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/raid1/www/Hosts/bankrupt/TCR_Public/080813.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, August 13, 2008, Vol. 12, No. 192 Headlines a21 INC: Inks Commercial Loan Agreement with Applejack Art ACCURIDE CORP: High Leverage Cues S&P to Cut Rating to 'B' AIR 2 US: S&P Affirms 'BB-', 'B-' Ratings; Off CreditWatch ALLIED HOLDINGS: Releases June 2008 Post-Confirmation Qtr. Report ALLIED SECURITY: S&P Assigns 'B+' Rating on $380MM Loan Facility ALLIS-CHALMERS: Cancels Merger Agreement with Bronco Drilling ALLIS-CHALMERS: Bronco Deal Wrap-Up Cues Moody's B2 CF Rating AMERICAN HOME: S&P Drops Classes II-A, III-M-1 Securities to 'D' ARIAD PHARMACEUTICALS: Merck to Pay $2.5MM for Cancer Drug Test AVICENA GROUP: Dr. Leslie Fang Elected to Board of Directors BANC OF AMERICA: S&P Cuts Ratings on Three Classes to 'CCC' BIOJECT MEDICAL: Shares Now Trading at OTC After Nasdaq Delisting BLOCKBUSTER INC: Posts $41.9 Mil. Net Loss in Second Quarter 2008 BORGER ENERGY: S&P Raises $117MM Sr. Secured Bond Rating to 'BB-' BOSCOV'S INC: Wants to Hire Jones Day as Lead Bankruptcy Counsel BUILDING MATERIALS: Housing Slump Cues S&P to Cut Rating to CCC+ CANADIAN TRUST: Court Extends CCAA Protection until August 31 CANADIAN TRUST: No Order Yet on Debtors' Plan of Compromise Appeal CATHOLIC CHURCH: Mediation for Fairbanks Assets Set for Aug. 14 CATHOLIC CHURCH: Panel Taps Morrow & Hensel in Faribanks' Case CATHOLIC CHURCH: Portland Lawyer Balks at Clergy Info Disclosure CATHOLIC CHURCH: Judge Williams Reopens Spokane's Case CBA COMMERCIAL: S&P Cuts Class M-7 to 'D' After Principal Loss CBRE REALTY: S&P Affirms 'BB' Rating on Classes K, L Notes CLAYTON HOLDINGS: Moody's Withdraws B1 Corporate Family Rating CLEAR CHANNEL: Implements Stock Fund Blackouts Prior to Merger CMT AMERICA: Gets Final Approval to Use Clothing's $2.8 Mil. Loan CMT AMERICA: Court Approves Going-Out-Of-Business Sales Motion CONSECO INC: Planned Spin-Off Cues Fitch to Affirm All Ratings CONSECO INC: S&P Holds B+, BB+ Ratings on Plan to Transfer Units CONTINENTAL AIRLINES: S&P Affirms 'B' Rating; Off CreditWatch COUDERT BROTHERS: Panel Wants to Investigate 16 Former Partners CPG INTERNATIONAL: S&P Revises Outlook to Neg; B Rating Affirmed CT CDO IV: S&P Affirms 'BB', 'B' Ratings on Six Classes DANA CORP: Settles Allen County's Claim for $1,750,000 DELTA AIR: Gets Unconditional Clearance from European Commission DELTA AIR: Shareholders to Vote on Northwest Merger Sept. 25 DELTA AIR: Trial for Comair 5191 Crash Lawsuits Canceled DELTA AIR: Drops Springfield-Cincinnati Route and Stewart Flights DELTA AIR: Cancels Freedom CRJ-900 Delta Connection Agreement F&N CONSTRUCTION: Case Summary & 12 Largest Unsecured Creditors FRANK WOODWORTH: Case Summary & 20 Largest Unsecured Creditors FTI CONSULTING: S&P Affirms 'BB' Rating; Outlook Positive GLOBAL EDGE: Case Summary & 9 Largest Unsecured Creditors INERGY LP: Inks Deal to Acquire US Salt in Upstate New York INERGY LP: US Salt Bid Cues S&P to Put BB- Ratings on Watch Neg INTERMET CORP: Files for Chapter 11 Bankruptcy in Delaware INTERMET CORPORATION: Case Summary & 20 Largest Unsec. Creditors JAMES BAUR: Case Summary & Six Largest Unsecured Creditors JDA SOFTWARE: S&P Puts 'B+' Corp. Credit Rating on Watch Positive LANDSOURCE COMMUNITIES: Ex-Governer Davis to Provide Legal Advice LEVITT AND SONS: Wachovia, et al. Balk at Disclosure Statement LEVITT AND SONS: Wants to Hire Moecker Auctions as Auctioneer LSP BATESVILLE: S&P Cuts Senior Secured Bonds Ratings to 'B' L&M PRESSWORKS: Case Summary & 20 Largest Unsecured Creditors MAXXAM INC: June 30 Balance Sheet Upside-Down by $306.3 Million MEDIACOM COMMS: June 30 Balance Sheet Upside-Down by $282.8MM MEDICURE INC: Continues to Explore Ways to Strengthen Finances MERRILL LYNCH TRUST: S&P Affirms BB, B Ratings on Five Classes MICHAEL VICK: Proposed Financial Adviser Accused of Swindling MOLINA HEALTHCARE: Best Lifts and Affirms Ratings on Subsidiaries MONICA WITT: Case Summary & 17 Largest Unsecured Creditors MONITOR OIL: Files Chapter 11 Plan And Disclosure Statement MT. ST. FRANCIS: Court OKs Sale of Assets to American Senior NATIONAL CENTURY: Ex-CEO Gets 10 Years for Witness Tampering NORTHWEST AIRLINES: Obtains Clearance from European Commission NORTHWEST AIRLINES: Shareholders to Vote on Delta Merger Sept. 25 N-STAR REAL ESTATE: S&P Affirms 'BB' Ratings on Classes J, K NUVEEN INVESTMENTS: Revises Timing of ARPS Refinancing for CEFs PACIFIC LUMBER: Scopac Withdraws Provisional Motion to Sell Assets PARMALAT SPA: NY Court Confirms Settlement Class in Hermes Suit PERFORMANCE TRANS: Ch. 7 Trustee Taps Ritchie Bros. as Auctioneer PLASTECH ENGINEERED: Files Joint Chapter 11 Plan of Liquidation PLASTECH ENGINEERED: Plan's Treatment & Classification of Claims PLASTECH ENGINEERED: Wants to Assign License Amid Infor Objection [REDACTED Aug. 13, 2008] PRIMEDIA INC: June 30 Balance Sheet Upside-Down by $134.8 Million PROGRESSIVE MOLDED: Bankruptcy Case Converted to Chapter 7 PROGRESSIVE MOLDED: US Trustee Names Andrew Vara as Ch. 7 Trustee PROGRESSIVE MOLDED: Has Until September 5 to File Schedules PROGRESSIVE MOLDED: Committee Can Hire Arent Fox as Counsel PROGRESSIVE MOLDED: Gets Court OK to Hire Donald McKenzie as CRO PROPEX INC: Wants Plan-Filing Deadline Extended to October 20 QUALITY HOME BRANDS: S&P Says CreditWatch Status Developing RADIOSHACK CORP: Fitch to Rate Proposed $300MM Conv. Notes 'BB' RALLY PARTNERS: Case Summary & 20 Largest Unsecured Creditors RASC SERIES: Moody's Publishes Underlying Ratings of Class A Notes REVLON INC: Appoints Tamara Mellon as New Board Member RIDGEMOUR MEYER: Files for Chapter 11 Bankruptcy in Manhattan RURAL CELLULAR: Completes $2.66 Bil. Purchase Deal with Verizon SAINT ANNES: Files for Chapter 11 Bankruptcy in Delaware SALLY BEAUTY: June 30 Balance Sheet Upside-Down by $701 Million SBARRO INC: S&P Cuts Rating to 'CCC+' on Covenant Compliance Worry SEMGROUP LP: Court OKs Use of Cash Collateral for White Cliff SEMGROUP LP: Pioneer Asserts $30 Million Pre-Bankruptcy Claims SEMGROUP LP: U.S. Trustee Forms Seven-Member Creditors' Panel SEMGROUP LP: Five Canadian Units File Separate CCAA Petitions SEMGROUP LP: Monitor Provides Update on CCAA Proceedings SHADOW LAKES: Case Summary & Two Largest Unsecured Creditors SPRINT NEXTEL: DBRS Rates Proposed $3 Bil. Preferred Shares 'BB' STRATOS GLOBAL: S&P Affirms 'B+' Rating on Better Performance SUN MICROSYSTEMS: Moody's Confirms Ba1 Corporate Family Rating SYNCORA HOLDINGS: Fitch Revises Watch to Positive from Evolving SYNTAX-BRILLIAN: Gets Final OK to Use Silver's $23 Mil. DIP Loan TEXAS INDUSTRIES: S&P Affirms 'BB-' on Sr. Unsec. Notes on Add-on TRANSMERIDIAN: Has Until Oct. 31 to Meet AMEX's Listing Standards TRONOX WORLDWIDE: Tightening Liquidity Cues Fitch's 'CCC' IDR UNITED RENTALS: S&P Affirms 'BB-' Corp. Credit Rating VALIDUS HOLDINGS: S&P Assigns 'BB+' Rating on Subordinated Debt WARREN MARCUS: Voluntary Chapter 11 Case Summary WHOLE FOODS: Corporate Credit Rating Lowered to 'BB' by S&P WORLDSPACE INC: Chief Operating Officers Resign * S&P Cuts Ratings on Two U.S. Alt-A RMBS Deals, Off Watch Neg * Fitch: US CREL CDO Delinquencies Fall Slightly on Forbearance * Fitch: High Spreads & CDS Market Volatility Cause of Concern * S&P Cuts 4 Ratings on Two U.S. Prime Jumbo RMBS Transactions * S&P Places 206 Ratings on 94 U.S. CDO Deals on Watch Neg * S&P Cuts Ratings on 12 U.S. Alt-A RMBS Transactions * S&P Lowers Ratings on 11 U.S. CDOs; $5.5BB in Issuance Affected * Kahn Kleinman Inks Merger Agreement with Taft Stettinius * Upcoming Meetings, Conferences and Seminars ********* a21 INC: Inks Commercial Loan Agreement with Applejack Art ---------------------------------------------------------- a21, Inc. entered into a Commercial Loan Agreement and Promissory Note with Applejack Art Partners, Inc., which provides a line of credit of up to $500,000 for working capital. Funds may be drawn over a three-month period no more frequently than weekly and in amounts not exceeding $150,000 at any one time. Some $100,000 was drawn down on the closing date. The Note requires that the Company pay interest on the advanced funds beginning August 1, 2008, at an annual percentage rate of 12% and accrued on a monthly basis, with the Note maturing and the outstanding principal and any unpaid interest due in full on November 1, 2008. The Note is secured by the collateral specified in the Security Agreement, which consists of all personal property and assets of the Company. The loan may be accelerated if an event of default occurs, which includes: the failure of the Company to make any payment when due, the inaccuracy of any material representation made by the Company, the failure of the Company to observe or perform any of its obligations under the Loan Agreement, Note or Security Agreement, and the occurrence of any event under any other lending facility which gives the lender under that facility the right to accelerate payment under that facility. The Loan Agreement also requires that the Company obtain the prior consent of the Lender to engage in discussions and/or negotiations with any party other than the Lender to convey, lease, or sell all or substantially all of its assets to any person or entity, whether in one transaction or a series of related transactions. This limitation expires upon the earlier of 30 days after the date of the Loan Agreement and the date that the Lender fails to make an advance under the Loan Agreement. On July 9, 2008, the Company entered into an Intercreditor Agreement with the Lender and certain of the Company's noteholders, which provides that the Lender shall have a first priority security interest in all of the Company's assets until all the obligations and liabilities owing by the Company to the Lender up to $500,000 are paid in full. On July 22, 2008, the Company issued a press release outlining its signature of a non-binding letter of intent with Applejack Art Partners, Inc. , which upon closing of the transaction would result in Applejack owning a majority stake of the Company. The text of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein. Pursuant to the LOI, Applejack would purchase all of the Company's outstanding notes (an aggregate principal amount of $18,000,000) from the holders of such notes and also purchase all of the shares of a21 common stock owned by the Company's note holders (an aggregate of approximately 41 million shares). The Company would then exchange approximately 110 million newly issued shares of its common stock with Applejack in satisfaction of approximately $13,000,000 of such notes. The closing of the transactions contemplated by the LOI is subject to various conditions, including execution of definitive agreements by the Company, the note holders, and Applejack. About a21 Inc. a21 Inc. (OTC BB: ATWO) -- http://www.a21group.com/-- is an online digital content company. a21, through its subsidiary SuperStock, with offices in Florida, Iowa, and London, aggregates visual content from photographers, photography agencies, archives, libraries, and private collections and licenses the visual content to its customers. As reported in the Troubled Company Reporter on May 22, 2008, a21 Inc.'s consolidated balance sheet at March 31, 2008, showed $28.6 million in total assets, $30.2 million in total liabilities, and $553,000 in minority interest, resulting in $2.1 million capital deficit. Going Concern Doubt As reported in the Troubled Company Reporter on April 22, 2008, BDO Seidman LLP, in West Palm Beach, Fla., expressed substantial doubt about a21 Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's recurring losses from operations and net capital deficiency. ACCURIDE CORP: High Leverage Cues S&P to Cut Rating to 'B' ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Accuride Corp. to 'B' from 'B+' because of increased prospects for persistent weak demand in the commercial truck industry, which S&P believes will keep Accuride's leverage elevated into 2009 and potentially place the company in danger of violating covenants under its secured credit facilities early next year. The outlook is negative. Evansville, Ind.-based Accuride, a maker of heavy steel wheels and other commercial truck components, has total debt of nearly $640 million, including Standard & Poor's adjustments that add the present value of operating leases and unfunded postretirement benefit liabilities to debt. Production of commercial trucks and trailers in the U.S. has remained very weak in 2008 because of sharply higher diesel fuel prices and the weak economy, which have reduced freight volumes and deterred trucking companies from ordering new equipment. These factors are extending an industry downturn that began in early 2007, originally because of tougher emissions standards. "We believe demand will remain sluggish for truck manufacturers and suppliers at least into early 2009," said Standard & Poor's credit analyst Gregg Lemos Stein. The weak U.S. market accounts for more than 80% of Accuride's total revenues. Accuride's adjusted EBITDA has declined year-over-year for six consecutive quarters, reflecting the low industry production. Revenues were $245 million, essentially flat compared to those of a year earlier, although the most recent period included higher pass-through of raw material costs. The company reduced its EBITDA guidance for all of 2008 to between $85 million and $100 million, down from $100 million to $125 million. It still expects to have neutral free operating cash flow for the full year, which implies positive free cash flow of about $50 million for the second half, taking into account cash outflows in the first half. S&P believes much of this cash flow improvement is attainable as the company reduces inventory and capital spending, while benefiting from seasonally strong fourth-quarter inflows. The outlook is negative. The ratings assume Accuride's sales and profitability will remain weak for the rest of 2008 because of the persistent commercial truck downturn, although they will improve from the first half of the year because of increased cost-saving efforts and some new business. S&P also assumes the company will increase cash balances by the end of the year by generating cash from working capital and somewhat higher profitability in the third and fourth quarters. S&P could lower the rating if Accuride's liquidity becomes further pressured by a failure to negotiate new financial covenants, or if cash flow remains negative or only slightly positive in the second half of 2008. An upgrade is unlikely in the next year, but would be driven by a combination of factors, including Accuride's eliminating the covenant concerns and demonstrating substantial profitability improvement such that leverage returns to 4x or better, including S&P's adjustments, over the industry cycle. AIR 2 US: S&P Affirms 'BB-', 'B-' Ratings; Off CreditWatch ---------------------------------------------------------- Standard & Poor's Ratings Services completed its CreditWatch review of Air 2 US LLC, affirming its 'BB-' rating on the Series A enhanced equipment notes and its 'B-' rating on the Series B notes. The ratings were placed on CreditWatch June 3, 2008, following S&P's decision to review ratings on American Airlines Inc. (B-/Negative/--) and United Air Lines Inc. (B-/Negative/--). Air 2 US LLC is a Cayman Islands-based limited liability company that in 1999 issued more than $1.1 billion of enhanced aircraft notes. This special-purpose entity relies on lease rental payments on planes leased to American and United by various financing subsidiaries of Airbus Industries SAS. S&P lowered its ratings on American and United to current levels on July 25, 2008. "However, our review of the Air 2 US notes concluded that the collateral coverage was sufficiently conservative to justify maintaining our current ratings, despite the increased default risk of American and United," said Standard & Poor's credit analyst Philip Baggaley. S&P estimates the loan-to-value, using base values, at around 50% for the Class A notes and around 80% for the Class B notes. S&P believes that these loan-to-values will rise somewhat in the near term, but remain consistent with its ratings. United leases 22 A320-200 jet aircraft from the various financing units of Airbus, representing more than half of the total rentals related to this transaction, with the remainder paid by American Airlines to lease 19 A300-600R planes (one of which has since been removed due to its loss in an accident) from other units of Airbus. The A320-200 is a highly successful and widely used model and represents the core of United's narrowbody fleet. The particular planes in the Air 2 US portfolio were delivered in 1994-1996, meaning that they are somewhat older than the average 10 year age of United's overall A320 fleet. The A300-600R is a midsize widebody plane that is a less successful model and is no longer in production. American's recent announced capacity reductions include A300-600Rs among the planes that are being taken out of service, and S&P sees a risk that American would either return the aircraft that partly secure the Air 2 US equipment notes or seek to negotiate significantly reduced rental rates in any future bankruptcy. Fortunately, the leases on A300- 600Rs are reaching their expiration dates, with the last lease ending in 2010. If planes were repossessed from a bankrupt airline lessee, they would not be sold (which is a choice in a typical enhanced equipment trust certificate). Rather, Airbus would direct the repossession and attempted re-leasing of any aircraft rejected in a bankruptcy of United or American. There is also potential upside in American's decision to exit the A300-600R. If American chooses to terminate its A300-600R leases early, it would have to make payments that would be more than sufficient to retire notes on the associated aircraft, causing a prepayment of some amount of the Air 2 US notes. At that point, the remaining notes would be backed entirely by leases of A320- 200s to United. Those leases were renegotiated to lower payments somewhat in United's bankruptcy, but should still be sufficient to pay off all notes if American either buys out its A300-600R leases or makes remaining payments as scheduled. ALLIED HOLDINGS: Releases June 2008 Post-Confirmation Qtr. Report ----------------------------------------------------------------- Allied Holdings, Inc., and its 21 affiliates filed separate post- confirmation quarterly operating reports for the period April 1, 2008, to June 30, 2008. Allied Holdings reports total cash disbursements of $50,3981,949 for the period. Bank account balances reflect: Bank Account No. Balance ---- ----------- ------- Bank of America 9429019178 $138,203 Fidelity National Bank 59328 8,319 LaSalle Bank 5800299454 367,633 LaSalle Bank 5590056569 0 LaSalle Bank 5590056577 0 LaSalle Bank 5590056551 0 LaSalle Bank 5590056544 0 LaSalle Bank 5590056536 0 JPMorgan Chase 904123677 0 First Community Bank of Tifton 1900109 0 LaSalle Bank 5801012450 409,804 Regions Bank 6596012078 14,782 Counsel for the Reorganized Debtors, Kelly E. Culpin, Esq., at Troutman Sanders LLP, in Atlanta, Georgia, delivered the post- confirmation reports to the U.S. Bankruptcy Court for the Northern District of Georgia on July 29, 2008. About Allied Holdings Based in Decatur, Georgia, Allied Holdings Inc. (AMEX: AHI, other OTC: AHIZQ.PK) -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, served as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provided the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provided financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. On May 11, 2007, the Court confirmed Allied's Second Amended Chapter 11 Plan of Reorganization. Allied emerged from bankruptcy on May 29, 2007. (Allied Holdings Bankruptcy News, Issue No. 67; Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/or 215/945-7000) * * * As of April 30, 2007, Allied Holdings Inc.'s consolidated balance sheet showed $217,379,000 in total stockholders' deficit resulting from total assets of $309,931,000 and total liabilities of $527,310,000. ALLIED SECURITY: S&P Assigns 'B+' Rating on $380MM Loan Facility ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on King of Prussia, Pa.-based Allied Security Holdings LLC (Allied). At the same time, S&P assigned its 'B+' issue rating to Allied's proposed $380 million senior secured bank credit facility, one notch above the company's corporate credit rating, with a recovery rating of '2', indicating that bank facility lenders could expect substantial (70%-90%) recovery in the event of a payment default. The outlook is stable. The ratings reflect Allied's narrow business focus, aggressive growth strategy, competitive operating environment, highly leveraged financial profile, increased debt levels, and higher financing costs associated with its acquisition by Blackstone. The company's high customer retention rates, satisfactory market position, relatively stable cash flows, and low capital- expenditure requirements mitigate these factors. The outlook on Allied is stable. "We expect the company's margin and cash flow stability to result in credit protection measures remaining close to current levels over the next 12 to 18 months," said Standard & Poor's credit analyst Jerry Phelan. We expect lease-adjusted leverage and funds from operations to total debt to remain in the mid-5x and 9% area, respectively. Standard & Poor's could revise the outlook to negative if operating performance deteriorates because of contract losses or intense pricing pressure, or if debt levels increase materially as a result of acquisition activity. S&P's would consider revising the outlook to negative, if lease-adjusted leverage increased to around 6x. "We could revise the outlook to positive if the company directs the majority of its cash flow toward debt reduction and significantly improves its credit measures, including sustaining lease-adjusted leverage below 5x," he continued. ALLIS-CHALMERS: Cancels Merger Agreement with Bronco Drilling ------------------------------------------------------------- Allis-Chalmers Energy Inc. and Bronco Drilling Company Inc. terminated their Agreement and Plan of Merger relating to the proposed acquisition of Bronco by Allis-Chalmers. Allis-Chalmers and Bronco agreed to terminate the merger agreement in light of indications that Bronco stockholders would not adopt the merger agreement. "The management and board of directors of Allis-Chalmers strongly believed in the benefit of a combination with Bronco," Micki Hidayatallah, Allis-Chalmers' Chairman and Chief Executive Officer, stated. "The consolidated entity would have been a diversified international provider of oilfield services to its customers. We regret that we have entered into a termination agreement based on public filings by several institutional holders of Bronco stock who did not recognize the merits of the transaction. I would like to extend my best wishes to Frank Harrison, the board of directors of Bronco and their management team that worked so diligently with us in an effort to achieve our shared vision for the benefit of all our stakeholders." "While Bronco management and its board of directors continue to believe in the strategic rationale supporting a combination with Allis-Chalmers, it now seems clear that it is unlikely we will achieve the requisite votes needed to approve the merger," Frank Harrison, Bronco Drilling's Chairman and Chief Executive Officer, stated. "I greatly appreciate the work of all of the individuals involved in this transaction and want to wish Micki and the Allis- Chalmers team the best in all their future endeavors." Cancellation of Special Stockholders Meetings In connection with the termination of the Merger Agreement, Allis- Chalmers and Bronco Drilling disclosed that their boards of directors have canceled their special meetings of stockholders, both of which were scheduled to occur on Thursday, Aug. 14, 2008, at 9:00 a.m. (Central Time). The purpose of the Bronco Drilling special meeting was to adopt the Merger Agreement, and the purpose of the Allis-Chalmers special meeting was to approve the issuance of 16,846,500 shares of Allis-Chalmers common stock to stockholders of Bronco Drilling in connection with the merger. About Allis-Chalmers Headquartered in Houston, Texas, Allis-Chalmers Energy Inc. -- http://www.alchenergy.com-- provides services and equipment to oil and natural gas exploration and production companies, in Texas, Louisiana, New Mexico, Colorado, Oklahoma, Mississippi, Wyoming, Arkansas, West Virginia, offshore in the Gulf of Mexico, Argentina and Mexico. Allis-Chalmers provides rental services, international drilling, directional drilling, tubular services, underbalanced drilling, and productions services. About Bronco Drilling Company Headquartered in Edmond, Oklahoma, Bronco Drilling Company Inc. (NASDAQ/GM:BRNC) -- http://www.broncodrill.com/is a publicly held company. The company is a provider of contract land drilling and workover services to oil and natural gas exploration and production companies. ALLIS-CHALMERS: Bronco Deal Wrap-Up Cues Moody's B2 CF Rating ------------------------------------------------------------- Moody's Investors Service affirmed the ratings for Allis-Chalmers Energy Inc. after the company's announcement that it has terminated its proposed merger with Bronco Drilling Company Inc. (not rated). Ratings affirmed are ALY's B2 Corporate Family Rating, B2 Probability of Default Rating, and B2 (LGD 4, changed to 57% from 55%) senior unsecured note ratings. At the same time, Moody's withdrew the B2 (LGD 4, 55%) rating assigned to ALY's proposed US$350 million senior unsecured notes. The rating outlook remains positive. The rating affirmation follows ALY's and Bronco's termination of their merger agreement. Had the transaction been completed, the Bronco acquisition would have represented ALY's largest acquisition to date and its first entry into the contract drilling market in the U.S. Despite the merger termination, Moody's expects that ALY will continue to grow through acquisitions, including targets in the domestic and international land contract drilling markets, well as organically. Management has stated that it intends to issue equity to fund a meaningful portion of material acquisitions, and Moody's notes that the Bronco acquisition would have included a substantial equity component (about 50%). The positive outlook continues to reflect the company's increasing scale and diversification, which are indicative of a higher rating, and management's track record of financing material acquisitions with a substantial equity component. ALY has continued to increase its scale and diversification, both by product line and geographically. While the lion's share of this increased scale has been achieved through acquisitions, recently the company has also been increasing its growth organically. Management's demonstrated willingness to issue equity has provided a degree of financial cushion partially mitigating the risks associated with ALY's aggressive growth strategy. These risks include valuation and performance risk inherent to a proportionally high level of acquisitions priced during fairly robust sector conditions, event and integration risk, and business and political risk associated with step-outs into new business lines and regions with substantial political risk. An upgrade of ALY's B2 Corporate Family Rating over the medium term will depend on the company continuing to finance material acquisitions with a meaningful equity component; generating improved results from its recently restructured rental tools business, which has performed below expectations; achieving projected earnings from its organic growth projects, including its newbuild program in Argentina and its expansion into emerging U.S. shale plays and into certain international markets; and maintaining conservative financial leverage, with debt/EBITDA maintained within 3x. Weaker than expected operating results or an unfavorable change in financial policies could result in the outlook returning to stable. Allis-Chalmers Energy Inc. is headquartered in Houston, Texas. AMERICAN HOME: S&P Drops Classes II-A, III-M-1 Securities to 'D' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class II-A mortgage-backed notes from structure group II of American Home Mortgage Investment Trust's series 2007-2 to 'D' from 'CCC'. At the same time, S&P lowered its rating on the class III-M-1 mortgage-backed pass-through certificates from structure group III of American Home Mortgage Assets Trust's series 2007-3 to 'D' from 'CC'. The downgrades reflect the erosion of credit support for the two classes, as of the July 25, 2008, distribution date, which S&P believes is attributable to the significant monthly net losses being experienced by the underlying collateral. During the July 2008 distribution period, structure group II from the 2007-2 transaction realized a net loss of $6,819,433.04, while structure group III from the 2007-3 transaction incurred a realized net loss of $3,587,064.58. As of the July 25 distribution, cumulative realized losses for structure group II from series 2007-2 were 32.32% of the original pool balance, and total delinquencies were 21.35% of the current pool balance. During the same period, cumulative realized losses for structure group III from series 2007-3 were 23.09% of the original pool balance, and total delinquencies were 18.02% of the current pool balance. In S&P's opinion, monthly net losses have outpaced monthly excess interest because of poor collateral performance and escalating delinquencies. During the past six months, structure group II from series 2007-2 incurred approximately $11.60 million in losses, representing approximately 16.26% of the total $71,310,143 in cumulative realized losses experienced by the entire structure. Over the same period, structure group III from series 2007-3 incurred approximately $4.18 million in losses, representing approximately 13% of the total $32,249,976 in cumulative realized losses experienced by the entire structure. The series 2007-2 transaction is 14 months seasoned. Structure group II from series 2007-2 has a pool factor of 55.52% and the structure had an original pool balance of $220.625 million. The series 2007-3 transaction is 12 months seasoned. Structure group III from series 2007-3 has a pool factor of 67.19% and the structure had an original pool balance of $139.685 million. The rating on class II-A from structure group II for Series 2007-2 was originally 'AAA'. S&P first placed the rating on CreditWatch negative on March 26, 2008. S&P then lowered the rating to 'CCC' on April 24, 2008. All of the subordinate classes have already defaulted. The rating on class III-M-1 from structure group III for series 2007-3 was originally 'A'. S&P first placed the rating on CreditWatch negative on Oct. 17, 2007. S&P then lowered the rating to 'CC' on April 24, 2008. The collateral for structure group II from series 2007-2 and structure group III from series 2007-3 originally consisted of fixed-rate mortgage loans secured by junior liens on one- to four- family residential real properties. Classes III-A-1 and III-A-2 classes from structure group III from series 2007-3 have bond insurance provided by Assured Guaranty Corp. As of the cutoff date, loans from structure group II from series 2007-2 had an average combined loan-to-value (LTV) ratio of 96.42%, and borrowers for these loans had an average credit score of 697. In addition, 16.62% of the mortgage loans were originated in Florida. As of the cutoff date, loans from structure group III from series 2007-3 had an average combined LTV ratio of 96.58%, and borrowers for these loans had an average credit score of 688. In addition, 17.75% of the mortgage loans were originated in Florida. RATINGS LOWERED American Home Mortgage Investment Trust Series 2007-2 Mortgage- backed notes Class To From II-A D CCC American Home Mortgage Assets Trust Series 2007-3 Mortgage-backed pass-through certificates Class To From III-M-1 D CC ARIAD PHARMACEUTICALS: Merck to Pay $2.5MM for Cancer Drug Test --------------------------------------------------------------- ARIAD Pharmaceuticals, Inc. disclosed the initiation of a randomized, multi-center, Phase 2 clinical trial to evaluate the safety and efficacy of oral deforolimus, its investigational mTOR inhibitor, in patients with advanced endometrial cancer. In collaboration with Merck & Co. Inc., deforolimus is currently being studied in multiple clinical trials, both alone and in combination with other therapies, in patients with several different types of cancer. Under terms of the agreement, ARIAD will receive a $2.5 million milestone payment from Merck upon treating the first patient in this clinical study. The clinical trial will compare single-agent oral deforolimus to progestin in patients with metastatic or recurrent endometrial cancer following first line chemotherapy. The primary endpoint for the study is progression-free survival. Overall survival and response rate will be evaluated as secondary endpoints. This is the second Phase 2 clinical trial to begin this quarter examining the safety and efficacy of oral deforolimus in patients with different solid tumors. "We have Phase 2 data on the intravenous form of deforolimus in endometrial cancer and are pleased to now examine the potential of this drug candidate in its oral form in similar patients with this cancer," stated Pierre F. Dodion, senior vice president and chief medical officer of ARIAD. "There is significant unmet medical need for the effective treatment of patients with endometrial cancer, and this controlled clinical study is designed to help inform us of the potential impact of oral deforolimus on patients with this difficult-to- treat cancer", Mr. Dodion added. The clinical trial will enroll 150 patients at approximately 50 sites including medical centers in North America, Europe, Asia and Australia. Patients will be randomized to oral deforolimus or progestin, a commonly accepted treatment in patients with endometrial cancer. Enrollment in the trial is expected to be completed by the second half of 2009. "With the start of this trial, we now have begun enrollment in two Phase 2 clinical trials of oral deforolimus this quarter," said Harvey J. Berger, M.D., chairman and chief executive officer of ARIAD. "The start of this study is another important milestone for deforolimus and for the joint development program with Merck. We are committed to completing these clinical trials as quickly as possible facilitating the potential development of deforolimus in multiple cancer indications." ARIAD announced the initiation last month of a Phase 2 clinical trial of deforolimus in patients with advanced breast cancer. About Merck & Co. Inc. Based in Whitehouse Station, New Jersey, Merck & Co., Inc. -- http://www.merck.com/-- is a global research-driven pharmaceutical company. It discovers, develops, manufactures and markets vaccines and medicines to address unmet medical needs. About ARIAD Pharmaceuticals Headquartered in Cambridge, Mass., ARIAD Pharmaceuticals Inc. (Nasdaq: ARIA) -- http://www.ariad.com/-- is engaged in the discovery and development of breakthrough medicines to treat cancer by regulating cell signaling with small molecules. ARIAD has a global partnership with Merck & Co. Inc. to develop and commercialize deforolimus, ARIAD's lead cancer product candidate, which is in Phase 3 clinical development. At March 31, 2008, the company's consolidated balance sheet showed $97.6 million in total assets and $121.1 million in total liabilities, resulting in a $23.5 million total stockholders' deficit. AVICENA GROUP: Dr. Leslie Fang Elected to Board of Directors ------------------------------------------------------------ Pursuant to Section 5B of Avicena Group, Inc.'s Series A Preferred Stock Certificate of Designations, a majority of the holders of Avicena's Series A Preferred Stock elected Dr. Leslie Fang to the Board of Directors as the Series A Preferred Director, effective immediately. No fees will be paid or stock options granted in connection with this election. Dr. Fang currently serves as the head of Avicena's Scientific Advisory Board. Dr. Fang does not have any related party transactions with the company. On June 4, 2008, Andrew Gertler, a member of the Board of Directors and Audit Committee, notified his fellow directors of his resignation from the Board, effective immediately. Avicena Group's unaudited balance sheet as at March 31, 2008, showed total assets of $832,553, total liabilities of $11,774,635, convertible preferred stock of $3,621,463, resulting to a $14,563,545 stockholders' deficit. About Avicena Group Headquartered in Palo Alto, Calif., Avicena Group Inc. (OTC BB: AVGO.OB) -- http://www.avicenagroup.com/ -- is a late-stage biotechnology company that develops central nervous system therapeutics for neurodegenerative diseases. The company's core technologies have broad applications in both pharmaceuticals and dermaceuticals. Avicena's pharmaceutical program centers on rare neurological disorders. Unlike traditional biotechnology companies, Avicena's clinical programs are largely funded by government and non-profit organizations. Avicena presently derives revenue from the sale of proprietary dermaceutical ingredients to skin care manufacturers. BANC OF AMERICA: S&P Cuts Ratings on Three Classes to 'CCC' ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on eight classes of commercial mortgage pass-through certificates from Banc of America Commercial Mortgage Trust 2007-2. Concurrently, S&P affirmed its ratings on 18 other classes from this series. The downgrades reflect anticipated credit support erosion upon the eventual resolution of three of the six specially serviced assets. The lowered ratings also reflect credit concerns relating to eight loans ($30.4 million) with reported debt service coverage (DSC) below 1.0x, and three loans ($14.8 million) that S&P projects will have DSCs below 0.90x when their initial interest-only (IO) periods end. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. There are six assets with the special servicer, LNR Partners Inc. (LNR), totaling $65.8 million (2%). At this time, Standard & Poor's expects losses on three of the assets ($38.2 million). Four assets ($42.2 million) with the special servicer are 90-plus-days delinquent and two ($23.5 million) are current or in their grace period. Details of the specially serviced assets are: -- The Century Village Apartments ($21.3 million total exposure) and Brookside Villas Apartments ($9.5 million total exposure) loans are both over 90-days delinquent and are secured by multifamily properties with related borrowers. Century Village Apartments is a 258-unit property in Las Vegas, Nev., while Brookside Villas Apartments is a 113-unit property located in Reno, Nev. Both loans were transferred to LNR on June 2, 2008, due to payment default. LNR has initiated foreclosure on both properties. Standard & Poor's analysis indicates the eventual resolution of the assets could result in a significant loss. -- The Echelon ($8.1 million total exposure) and Plainfield Lot 1 ($4.3 million total exposure) loans are over 90-days delinquent and are secured by retail properties in Indiana with related borrowers. Echelon is a 30,817-sq.-ft. property in Indianapolis, Ind. The loan was transferred to LNR due to payment default. LNR has received a summary judgment for foreclosure. Standard & Poor's analysis indicates that the eventual resolution of the asset could result in a significant loss. -- The Plainfield Lot 1 loan is secured by a 14,026-sq.-ft. property in Plainfield, Ind. The loan was transferred to LNR due to payment default. LNR is moving forward with the foreclosure process but has received interest in a possible purchase of the property and assumption of the loan. Standard & Poor's does not expect a loss on this asset at this time. -- The Buffets Headquarters ($19.9 million total exposure) loan is secured by a 99,342-sq.-ft. office property in Eagan, Minn. The loan was transferred to LNR on June 12, 2008, due to material modification on the lease term and the rental rate of the single-tenanted property. The lease amendment was approved in July 2008, and LNR expects the loan will be returned to the master servicer. -- The Main Street Crossing ($3.8 million total exposure) loan is secured by a 26,807-sq.-ft. retail property in Plainfield, Ind. The loan was transferred to LNR due to payment default and was subsequently assumed by a new borrower, who brought the loan current. LNR expects the loan will be returned to the master servicer. S&P is concerned with eight of the 18 loans ($492.6 million, 16%) that reported DSCs below 1.0x. The loans are secured by a variety of property types and have an average balance of $3.8 million. These loans have seen a weighted average decline in DSC of 35% since issuance. The projected DSCs for eight loans ($52.7 million) were below 0.90x when their initial IO periods end. S&P is concerned with three ($14.8 million) of the eight loans. The loans are secured by office and multifamily properties and have an average balance of $4.9 million. As of the July 10, 2008, remittance report, the collateral pool consisted of 180 loans with an aggregate trust balance of $3.16 billion, compared with 180 loans totaling $3.17 billion at issuance. The master servicer, Bank of America N.A., reported full-year 2007 financial information for 93% of the pool. Standard & Poor's calculated a weighted average DSC of 1.28x, down from 1.34x at issuance. To date, the trust has not experienced any losses. The top 10 loans have an aggregate outstanding balance of $1.6 billion (49%) and a weighted average DSC of 1.10x, down from 1.30x at issuance. Standard & Poor's reviewed property inspections provided by the master servicer for most of the assets underlying the top 10 exposures. One was characterized as "excellent," while the remaining properties were characterized as "good." Inspections were provided for nine of 20 properties in the largest exposure in the transaction, the Beacon Seattle & DC Portfolio. Bank of America reported a watchlist of 30 loans ($1.1 billion, 34%). While the three largest loans ($744.5 million, 24%) in the pool are on the servicer's watchlist for low DSC, they are performing within S&P's expectations. Standard & Poor's does not anticipate any credit support erosion to the pool due to these assets at this time. The remaining loans are on the watchlist primarily because of low occupancy or a decline in DSC since issuance. Standard & Poor's stressed the loans with credit issues as part of its analysis. The resultant credit enhancement levels support the affirmed ratings. RATINGS LOWERED Banc of America Commercial Mortgage Trust 2007-2 Commercial mortgage pass-through certificates Rating Class To From Credit enhancement (%) J BBB- BBB 4.26 K BB BBB- 3.13 L BB- BB+ 2.63 M B+ BB 2.38 N B- BB- 1.88 O CCC+ B+ 1.76 P CCC B 1.63 Q CCC- B- 1.25 RATINGS AFFIRMED Banc of America Commercial Mortgage Trust 2007-2 Commercial mortgage pass-through certificates Class Rating Credit enhancement (%) A-1 AAA 30.09 A-2 AAA 30.09 A-2FL AAA 30.09 A-3 AAA 30.09 A-AB AAA 30.09 A-4 AAA 30.09 A-1A AAA 30.09 A-M AAA 20.06 A-J AAA 12.03 A-JFL AAA 12.03 B AA+ 11.53 C AA 10.03 D AA- 9.03 E A+ 8.52 F A 7.65 G A- 6.77 H BBB+ 5.39 XW AAA N/A N/A-Not aplicable. BIOJECT MEDICAL: Shares Now Trading at OTC After Nasdaq Delisting ----------------------------------------------------------------- The Nasdaq Stock Market notified Bioject Medical Technologies Inc. on July 21, 2008, that the Nasdaq Hearings Panel has determined to delist the securities of the Company from The Nasdaq Stock Market. The effectivity of the suspension was the opening of business on July 23, 2008. The Company's common stock is now trading at the Over-the-Counter Bulletin Board, an electronic quotation service maintained by the Financial Industry Regulatory Authority. The symbol remains BJCT. The Nasdaq Hearings Panel's determination to delist the securities and suspend trading of the Company's shares is a result of the Company's failure to meet the $1.00 minimum bid price requirement for continued listing as set forth in Marketplace Rule 4310(c)(4). The Company expects The Nasdaq Stock Market to file a Form 25-NSE with the Securities and Exchange Commission to complete the delisting of the Company's shares from The Nasdaq Capital Market. The Company expects its shares to be formally delisted from The Nasdaq Capital Market ten days after the filing of the Form 25- NSE. Based in Portland, Oregon, Bioject Medical Technologies Inc. (Nasdaq: BJCT) -- http://www.bioject.com/-- is a developer and manufacturer of needle-free injection therapy systems (NFITS). NFITS provide an empowering technology and work by forcing medication at high speed through a tiny orifice held against the skin. This creates a fine stream of high-pressure fluid penetrating the skin and depositing medication in the tissue beneath. The company is focused on developing mutually beneficial agreements with leading pharmaceutical, biotechnology, and veterinary companies. Going Concern Doubt As reported in the Troubled Company Reporter on April 18, 2008, Moss Adams LLP expressed substantial doubt about Bioject Medical Technologies Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditor reported that the company has suffered recurring losses, has had significant recurring negative cash flows from operations, and has an accumulated deficit. BLOCKBUSTER INC: Posts $41.9 Mil. Net Loss in Second Quarter 2008 ----------------------------------------------------------------- Blockbuster Inc. reported financial results for the second quarter ended July 6, 2008. Total revenues for the second quarter of 2008 increased 3.3%, or $41.3 million, to $1.30 billion, as compared to the second quarter of 2007. Net loss for the second quarter of 2008 was $41.9 million, as compared with a net loss of $31.4 million for the second quarter of 2007, which included an $81.3 million gain on asset sale. Net income improved $70.8 million year-over-year, excluding the prior year gain on asset sale. Adjusted net loss for the second quarter of 2008 totaled $36.1 million, a significant improvement as compared with adjusted net loss of $96.5 million for the second quarter of 2007. Adjusted EBITDA for the second quarter of 2008 improved $58.2 million to $28.2 million, reflecting the positive impact of the company's strategic initiatives, including the increased availability of top new movies, improved store merchandising, more effective pricing and a lower cost structure. "Our second quarter results mark Blockbuster's fourth consecutive quarter of improved same-store sales," Jim Keyes, Blockbuster Chairman and CEO, said. "We are especially pleased with the 14.2% increase in domestic same-store revenues, which includes a 6.5% increase in rental revenues. Also, we are launching our movie downloading service, Movielink(R), on blockbuster.com, giving customers the ability to rent, buy and download thousands of movies online. Our achievement of these strategic milestones underscores that our efforts to transform Blockbuster into a multi-channel provider of entertainment are working and are contributing to our improved financial results." Total revenues for the second quarter of 2008 increased 3.3%, or $41.3 million, to $1.30 billion, as compared to the second quarter of last year primarily reflecting a 54.4% growth in domestic merchandise revenues driven by a significant increase in game sales. Domestic same-store revenues increased 14.2% as compared to the second quarter of 2007, driven by a 6.5% growth in same-store rental revenues and a 69.2% increase in same-store merchandise sales demonstrating the underlying strength of company's emerging retail business. International same-store revenues remained essentially flat as compared to the same period last year, reflecting a 6.0% increase in same-store merchandise sales, offset by a 4.3% decline in same-store rental revenues. Worldwide same- store revenues grew 9.0% from the same period last year. Gross profit for the second quarter of 2008 increased $20.4 million to $655.2 million as compared to the second quarter of 2007 and gross margin remained essentially flat at 50.2%. General and administrative expenses for the period declined $17.3 million as a result of a smaller company-operated store base and the company's ongoing cost reduction actions. Advertising expense for the second quarter of 2008 totaled $31.9 million as compared to $54.8 million for the second quarter of 2007. Cash flow used for operating activities increased $23.1 million to $63.4 million for the second quarter of 2008 from cash used of $40.3 million for the second quarter of 2007. Free cash flow (net cash flow used for operating activities less capital expenditures) decreased $24.3 million to a negative $84.1 million for the second quarter of 2008 from a negative $59.8 million for the second quarter of 2007. Both changes were primarily the result of changes in working capital pursuant to the company's investment in additional game hardware, software and accessories for all domestic stores during the second quarter of 2008. About Blockbuster Inc. Based in Dallas, Texas, Blockbuster Inc. (NYSE: BBI, BBI.B) -- http://www.blockbuster.com/-- is a leading global provider of in-home movie and game entertainment, with over 7,800 stores throughout the Americas, Europe, Asia and Australia. The company maintains operations in Brazil, Mexico, Denmark, Italy, Taiwan, and Australia. At Jan. 6, 2008, the company's total debt, including capital lease obligations was US$757.8 million compared with US$984.2 million in Dec. 31, 2006. * * * In December 2007, Fitch Ratings affirmed Blockbuster Inc.'s long-term Issuer Default Rating at 'CCC' and the senior subordinated notes at 'CC/RR6'. The rating outlook is stable. BORGER ENERGY: S&P Raises $117MM Sr. Secured Bond Rating to 'BB-' ----------------------------------------------------------------- Standard & Poor's Ratings Services raised the rating on Borger Energy Associates L.P./Borger Funding Corp.'s $117 million senior secured notes to 'BB-' from 'B+'. At the same time, Standard & Poor's assigned a recovery rating of '4' to the notes, indicating the expectation for an average (30- 50%) recovery in the event of a payment default. The outlook is stable. Borger is a Delaware limited partnership that owns and operates a 230 megawatt gas-fired cogeneration facility located near Borger, Texas. The project's energy output and electrical capacity are sold to Southwestern Public Service Co., a subsidiary of Xcel Energy Inc. Steam output from the project is sold to ConocoPhillips. DCP Midsteam, formerly known as Duke Energy Field Services LLC, supplies fuel. The upgrade is the result of improved operations since October 2007 and that the ConocoPhillips' Blackhawk refinery is expected to take a steady steam offtake of 950-1,000klbs/hour through 2008 and onwards. BOSCOV'S INC: Wants to Hire Jones Day as Lead Bankruptcy Counsel ---------------------------------------------------------------- Boscov's Inc. and its affiliated debtors ask permission from the U.S. Bankruptcy Court for the District of Delaware to employ Jones Day as their lead bankruptcy counsel nunc pro tunc to Aug. 4, 2008. As counsel to the Debtors, Jones Day will: (a) advise the Debtors of their rights, powers and duties in continuing to operate and manage their respective businesses and properties under Chapter 11 of the Bankruptcy Code; (b) prepare on behalf of the Debtors all necessary and appropriate applications, motions, draft orders, other pleadings, notices, schedules and other documents, and reviewing all financial and other reports to be filed in the Chapter 11 cases; (c) advise the Debtors concerning, and prepare responses to, applications, motions, other pleadings, notices and other papers that may be filed by other parties; (d) advise the Debtors with respect to, and assist in the negotiation and documentation of, financing agreements and related transactions; (e) review the nature and validity of any liens asserted against the Debtors' property and advise the Debtors concerning the enforceability of the liens; (f) advise the Debtors regarding their ability to initiate actions to collect and recover property for the benefit of their estates; (g) advise the Debtors in connection with the formulation, negotiation and promulgation of a plan or plans of reorganization and related transactional documents; (h) advise and assist the Debtors in connection with any asset sales and potential property dispositions; (i) advise the Debtors concerning executory contract and unexpired lease assumptions, assignments and rejections and lease restructurings and recharacterizations; (j) assist the Debtors in reviewing, estimating and resolving claims asserted against the Debtors' estates; (k) commence and conduct litigation necessary and appropriate to assert rights held by the Debtors, protect assets of the Debtors' Chapter 11 estates or otherwise further the goal of completing the Debtors' successful reorganization; (l) provide non-bankruptcy services for the Debtors to the extent requested by the Debtors; and (m) perform all other necessary and appropriate legal services in connection with the Chapter 11 cases for or on behalf of the Debtors. The Debtors will pay Jones Day and its professionals according to their customary hourly rates. The Debtors anticipate that the Jones Day professionals will take the lead in the Debtors' Chapter 11 cases: Professional Hourly Rate ------------ ------------ David G. Heiman, Esq. $875 Brad B. Erens, Esq. $700 Marc F. Skapof, Esq. $495 Robert E. Krebs, Esq. $425 Steven A. Domanowski, Esq. $425 Timothy Hoffman, Esq. $400 Daniel M. Syphard, Esq. $250 The Debtors will also reimburse Jones Day for any necessary out- of-pocket expenses it incurs. Brad B. Erens, a partner at Jones Day, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). He adds that his firm does not represent any interest adverse to the Debtors, their estates, and their creditors. Mr. Erens disclose that Jones Day received a total of $2,229,418 from the Debtors during the one year period before the Petition Date for prepetition services. He says any portion of the retainer in excess of Jones Day's prepetition fees and expenses will be applied by the firm upon the conclusion of the Debtor's Chapter 11 cases against remaining unpaid postpetition fees and expenses as allowed by Court. About Boscov's Inc. Headquartered in Reading, Pennsylvania, Boscov's Inc. -- http://www.boscovs.com-- is America's largest family-owned independent department store, with 49 stores in Pennsylvania, New York, New Jersey, Maryland, Delaware and Virginia. Boscov's Inc. and its debtor-affiliates filed for Chapter 11 protection on Aug. 4, 2008 (Bankr. D. Del. Case No.: 08-11637) Daniel J. DeFranceschi, Esq. at Richards Layton & Finger and L. Katherine Good, Esq. at Richards, Layton & Finger, P.A. represent the Debtors in their restructuring efforts. The Debtors' financial advisor is Capstone Advisory Group and their investment banker is Lehman Brothers Inc. The Debtors disclosed estimated assets of $500 million to $1 billion and estimated debts of $100 million to $500 million. (Boscov's Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BUILDING MATERIALS: Housing Slump Cues S&P to Cut Rating to CCC+ ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on San Francisco, Ca.-based Building Materials Holding Corp. (BMHC), including the corporate credit rating, to 'CCC+' from 'B-'. The ratings remain on CreditWatch with negative implications, where S&P placed them on July 30, 2008. "The lower corporate credit rating reflects our increasing concerns that the ongoing housing downturn will significantly erode the company's end-market demand and credit measures over the next several quarters," said Standard & Poor's credit analyst Andy Sookram. "As a result, we believe that BMHC's operating performance and cash flows will likely weaken further during this period, diminishing its liquidity position and necessitating further bank facility waivers and/or amendments," he continued. In resolving the CreditWatch listing, S&P will review BMHC's liquidity position, including its ability to obtain an amendment under the facility. S&P will also consider near-term operating prospects for BMHC, given the continuing challenging industry conditions. CANADIAN TRUST: Court Extends CCAA Protection until August 31 ------------------------------------------------------------- The Investors representing the Pan-Canadian Investors Committee for Third Party Structured Asset Backed Commercial Paper sought and obtained an order from the Superior Court of Justice (Commercial List) for the Province of Ontario, extending the stay protection from certain creditors under the Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended. Pursuant to the Stay Extension Order, the Honorable Justice Colin Campbell ruled that until and including Aug. 31, 2008, no proceeding or enforcement process in any court or tribunal will be commenced or continued against the CCAA Parties, Ernst & Young Inc., as the Court-appointed Monitor, or affecting the CCAA Parties' business or property except with leave of the CCAA Court. All proceedings currently under way against or in respect of the CCAA Parties or their representatives are stayed and suspended pending further Court order. Apollo Trust, Apsley Trust, Aria Trust, Aurora Trust, Comet Trust, Devonshire Trust, Encore Trust, Gemini Trust, Ironstone Trust, MMAI-1 Trust, Newshore Canadian Trust, Opus Trust, Planet Trust, Rocket Trust, Selkirk Funding Trust, Silverstone Trust, Slate Trust, Structured Asset Trust, Structured Investment Trust III, Symphony Trust, Whitehall Trust are entities based in Canada that issue securities called third-party structured finance asset- backed commercial paper. As of Sept. 14, 2007, these 21 Canadian Trusts had approximately C$33 billion of outstanding ABCP. As reported by the Troubled Company Reporter on March 18, 2008, Justice Colin Campbell of the Ontario Superior Court of Justice granted an application filed on March 17 by The Pan-Canadian Investors Committee for Third-Party Structured ABCP under the provisions of the Companies' Creditors Arrangement Act. The Committee asked the Court to call a meeting of ABCP noteholders to vote on a plan to restructure 20 trusts affecting C$32 billion of notes. The trusts were covered by the Montreal Accord, an agreement entered by international banks and institutional investors on Aug. 16, 2007 to work out a solution for the ABCP crisis in Canada. Justice Campbell appointed Ernst & Young, Inc., as the Applicants' monitor, on March 17, 2008. (Canadian ABCP Trusts Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CANADIAN TRUST: No Order Yet on Debtors' Plan of Compromise Appeal ------------------------------------------------------------------ The Ontario Court of Appeals has yet to issue a decision regarding an appeal filed by corporate noteholders of the Sanction Order issued by the Ontario Superior Court of Justice on June 5, 2008, on the The Pan-Canadian Investors Committee for Third-Party Structured ABCP's Plan of Compromise and Arrangement for Canadian Asset Backed Commercial Paper, the Financial Post reported. The Appeal was filed on June 18, 2008, by 30 Noteholders that bought affected ABCP. Specifically, the Noteholders questioned the legality of the broad range of the ABCP Plan release provisions, under which parties that sold, brokered, and endorsed the Affected ABCP are protected from lawsuits, except in cases of fraud. Lawyers related to the case were expecting the Court of Appeals to make a decision on July 9, 2008, the deadline of a standstill agreement reached between parties involved in the restructuring of Affected ABCP, FP notes. Apparently, the standstill agreement has been extended, but no official word has been released, FP states. According to the paper, the Court of Appeals' decision is monumental to several brokerage firms and banks, especially Canaccord Capital, which sold "a boat load" of Affected ABCP to its clients. About the ABCP Trusts Apollo Trust, Apsley Trust, Aria Trust, Aurora Trust, Comet Trust, Devonshire Trust, Encore Trust, Gemini Trust, Ironstone Trust, MMAI-1 Trust, Newshore Canadian Trust, Opus Trust, Planet Trust, Rocket Trust, Selkirk Funding Trust, Silverstone Trust, Slate Trust, Structured Asset Trust, Structured Investment Trust III, Symphony Trust, Whitehall Trust are entities based in Canada that issue securities called third-party structured finance asset- backed commercial paper. As of Sept. 14, 2007, these 21 Canadian Trusts had approximately C$33 billion of outstanding ABCP. As reported by the Troubled Company Reporter on March 18, 2008, Justice Colin Campbell of the Ontario Superior Court of Justice granted an application filed on March 17 by The Pan-Canadian Investors Committee for Third-Party Structured ABCP under the provisions of the Companies' Creditors Arrangement Act. The Committee asked the Court to call a meeting of ABCP noteholders to vote on a plan to restructure 20 trusts affecting C$32 billion of notes. The trusts were covered by the Montreal Accord, an agreement entered by international banks and institutional investors on Aug. 16, 2007 to work out a solution for the ABCP crisis in Canada. Justice Campbell appointed Ernst & Young, Inc., as the Applicants' monitor, on March 17, 2008. (Canadian ABCP Trusts Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CATHOLIC CHURCH: Mediation for Fairbanks Assets Set for Aug. 14 --------------------------------------------------------------- Judge Donald MacDonald, IV, of the U.S. Bankruptcy Court for the District of Alaska had set July 15, 2008, as the deadline for: -- the Catholic Bishop of Northern Alaska to submit an elaborate term sheet that fully sets out the proposed treatment of tort claims to counsel for the Official Committee of Unsecured Creditors; and -- the Creditors Committee to draft an inventory of disputed property items that it consider estate property, and serve the list on the Diocese, the Court, and other parties-in- interest. Prior to the deadline, the Diocese and the Creditors Committee agreed in a stipulation signed by Judge MacDonald to extend the deadlines to July 22, 2008. The parties further extended the deadline to July 24. However, no term sheet or inventory list were filed with the Court by July 24. Judge MacDonald is set to discuss possible mediation of certain disputed items in the bankruptcy case at the Aug. 14, 2008, conference. About Diocese of Fairbanks The Roman Catholic Diocese of Fairbanks in Alaska, aka Catholic Bishop of Northern Alaska, aka Catholic Diocese of Fairbanks, aka The Diocese of Fairbanks, aka CBNA -- http://www.cbna.info/-- filed for chapter 11 bankruptcy on March 1, 2008 (Bankr. D. Alaska Case No. 08-00110). Susan G. Boswell, Esq., at Quarles & Brady LLP represents the Debtor in its restructuring efforts. Michael R. Mills, Esq., of Dorsey & Whitney LLP serves as the Debtor's local counsel and Cook, Schuhmann & Groseclose Inc. as its special counsel. Judge Donald MacDonald, IV, of the United States Bankruptcy Court for the District of Alaska presides over Fairbanks' Chapter 11 case. The Debtor's schedules show total assets of $13,316,864 and total liabilities of $1,838,719. The church's plans to file its bankruptcy plan and disclosure statement on July 15, 2008. Its exclusive plan filing period expires on Jan. 15, 2009. (Catholic Church Bankruptcy News, Issue No. 129; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CATHOLIC CHURCH: Panel Taps Morrow & Hensel in Faribanks' Case -------------------------------------------------------------- The Official Committee of Unsecured Creditors of the Catholic Bishop of Northern Alaska sought permission from the U.S. Bankruptcy Court for the District of Alaska to retain Morrow & Hensel Consulting as experts for issues relating to understanding and communicating with the native Alaskan population, nunc pro tunc to May 9, 2008. The Creditors Committee's counsel, Pachulski Stang Ziehl & Jones LLP, will employ Dr. Chase Hensel of Morrow & Hensel to maintain confidentiality of those matters that are intended only to assist the Committee, Committee Chairman E. Anthony Reisinger, Jr., related. Morrow & Hensel's services will be billed to the bankruptcy estate for payment as an administrative expense. Mr. Reisinger disclosed that no other arrangement exists between Pachulski Stang and Morrow & Hensel. Mr. Hensel will be paid in his standard hourly rates of $200 for research, report preparation and consultation, and $350 for testimony and depositions. The Creditors Committee estimates that Morrow & Hensel's fees and expenses will be around $15,000. Mr. Hensel assured the Court that he does not represent any interest materially adverse to the interests of the bankruptcy estate or its creditors. About Diocese of Fairbanks The Roman Catholic Diocese of Fairbanks in Alaska, aka Catholic Bishop of Northern Alaska, aka Catholic Diocese of Fairbanks, aka The Diocese of Fairbanks, aka CBNA -- http://www.cbna.info/-- filed for chapter 11 bankruptcy on March 1, 2008 (Bankr. D. Alaska Case No. 08-00110). Susan G. Boswell, Esq., at Quarles & Brady LLP represents the Debtor in its restructuring efforts. Michael R. Mills, Esq., of Dorsey & Whitney LLP serves as the Debtor's local counsel and Cook, Schuhmann & Groseclose Inc. as its special counsel. Judge Donald MacDonald, IV, of the United States Bankruptcy Court for the District of Alaska presides over Fairbanks' Chapter 11 case. The Debtor's schedules show total assets of $13,316,864 and total liabilities of $1,838,719. The church's plans to file its bankruptcy plan and disclosure statement on July 15, 2008. Its exclusive plan filing period expires on Jan. 15, 2009. (Catholic Church Bankruptcy News, Issue No. 129; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CATHOLIC CHURCH: Portland Lawyer Balks at Clergy Info Disclosure ---------------------------------------------------------------- A "demand" of Erin K. Olson, Esq., to publicly disclose confidential documents, which are under a protective order, dated Jan. 14, 2005, should be denied because she has not articulated any legitimate reason to release those files, Margaret Hoffman, Esq., at Schwabe, Williamson & Wyatt, P.C., in Portland, Oregon, said on behalf of the Archdiocese of Portland in Oregon. Ms. Hoffman related that the documents in question were produced at discovery during the course of the bankruptcy for the cases pending at that time, which were subsequently concluded by settlement or dismissal. "There was no agreement or condition in any settled case handled by Ms. Olson which required the release of clergy personnel files. All of her clients accepted their settlement funds, signed settlement agreements, and concluded their cases, without a demand or condition that documents be made public," Ms. Hoffman said. "[T]he only conceivable use Ms. Olson could have for the documents . . . would be to spread negative publicity about Roman Catholic clergy, the Archdiocese of Portland, its deceased bishops or priests, and the Roman Catholic Church in general," Ms. Hoffman states. She told Judge Elizabeth L. Perris that the U.S. Bankruptcy Court for the District of Oregon should not be a forum from which to launch those attacks. Ms. Hoffman further argued that the Protective Order should remain in effect because: -- after the conclusion of the bankruptcy proceedings, the Archdiocese made public over 2,000 documents in accordance with, and in fulfillment of, the public statement made by Archbishop John G. Vlazny; -- the sought documents are personnel files, which, by their very nature, are confidential and proprietary; and -- good cause exists to continue the Protective Order for the documents in question. Priests Don't Want Public Release of Files Fathers B, J, S, T, W and P objected to the public dissemination of their private information obtained through discovery in the Archdiocese's bankruptcy case. They ask the Court to uphold the Protective Order to allow the sought information to remain under seal. If the Court determines that their personnel files should be released as requested by Ms. Olson, the Fathers asked Judge Perris to redact all personal identifying information, including names, addresses and telephone numbers. Thomas E. Cooney, Esq., at Cooney & Crew, LLP, in Lake Oswego, Oregon, told the Court that the Fathers do not object to the goals served by the Archdiocese's agreement with its claimants to publicly release Archdiocesan records. However, they object to the dissemination of their personnel files, which will cause them annoyance, embarrassment, oppression and undue burden. Mr. Cooney pointed out that release will add very little to the public's understanding of the Archdiocese's severe mishandling of sexual abuse issues. Moreover, Mr. Cooney stated that the Fathers are still alive, and therefore, subject to future claims. He argued that if their files are disseminated, they want Ms. Olson to guarantee that they "will never receive an impartial jury trial for future and pending cases." "For the cases that the Archdiocese already settled, the Fathers should be able to rely on the finality of those settlements, and moved forward with their lives," Mr. Cooney said. Fr. MM, who appears under a pseudonym because he is not a party to any lawsuit, and because he seeks to preserve his right to privacy, relates that without his knowledge or consent, the Archdiocese produced documents from his personnel file to Ms. Olson. The documents were subjected to the Protective Order. Accordingly, Father MM asked the Court to uphold the Protective Order, deny Ms. Olson's request, and to order a return of all his records. Fr. MM also related that he began serving as a Catholic priest in the mid-1960s, but had withdrew from public ministry almost 20 years ago. He states that has never been sued, found liable or convicted for any sexual misconduct. He told Judge Perris that he understands that other priests, who have been sued for sexual misconduct, have been harassed or have received threats. Because he is not physically strong, Fr. MM has concerns for his safety and well-being if his records are publicly disclosed. Fr. MM further contended that Ms. Olson has no legal or reasonable basis for demanding public access to his records, or for wholly disregarding his rights and legitimate concerns because she does not represent any claimant with a claim against him. He argued that he was not a party to the Archdiocese's promises, and he did not agree to be bound by that promise. He also asserted, among other things, that Ms. Olson completely disregards him as an individual. Confidential defendant "Defendant Smith" opposed Ms. Olson's request because it seeks to release confidential documents that have been placed under seal for good cause, and by the agreement of all of the applicable parties. He argued that Ms. Olson lacks standing to challenge the confidentiality agreement, and she cannot establish sufficiently compelling reasons to unseal the documents. Hence, he said, her request should be denied. Richard J. Whittemore, Esq., at Bullivant Houser Bailey PC, in Portland, Oregon, related that several claimants have sued Father Mel Bucher in the past for tortious conduct that he allegedly committed in the 1970s. The claimants have also asserted that the Franciscan Friars of California, Franciscan Friars of Oregon, Inc., and Franciscan Friars of California, Inc., are vicariously liable for Fr. Bucher's conduct. To resolve those claims and "buy peace," Fr. Bucher and the Franciscan Friars settled them. "Now, [Ms. Olson] is trying to disturb that peace . . . She does so despite the fact that she lacks standing to seek the public disclosure of that information," Mr. Whittemore declared. He notes that even if she does have a standing, Fr. Bucher is not a party to any agreement, in which the Archdiocese may have agreed to disclose information. Because Fr. Bucher is not bound by any agreement, his private information should not be disclosed, Mr. Whittemore said. Father M and Father D remind the Court that no claims of misconduct were filed against either of them, and that they were not a party to the Archdiocese's bankruptcy proceedings or the resulting settlements. They further remind Judge Perris that in June 2007, The Oregonian published an article entitled "Archdiocese Released Secret Documents on Priest Sex Abuse," in which Father M's full name was listed amongst other priests, who had actually been accused of child sex abuse. Because information from sealed Court records leaked to the media once already, the best way to make sure this does not happen again is for the records to be returned, Father M and Father D assert. Hence, they asked the Court to provide continued protection of their documents, and direct Ms. Olson to return those that are in her possession. Alternatively, if the documents are to be unsealed, they asked Judge Perris to order the return of the documents to their counsel, and to allow the counsel to redact all identifying information of any person in the documents. Mr. H. and Thomas Laughlin joined in the arguments made by the other parties opposing Ms. Olson's request. They noted that the Archdiocese has released thousands of documents, and that the request is trying to disclose private personnel information having little or no relation to the claimed reason for seeking the release. The Archdiocese joined in, and supports all the oppositions filed against Ms. Olson's request. About Archdiocese of Portland The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents the Official Tort Claimants Committee in Portland, and scores of abuse victims are represented by other lawyers. David A. Foraker serves as the Future Claimants Representative appointed in the Archdiocese of Portland's Chapter 11 case. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. The Court approved the Debtor's disclosure statement explaining its Second Amended Joint Plan of Reorganization on Feb. 27, 2007. On April 17, 2007, the Court confirmed Portland's 3rd Amended Plan. On Sept. 28, 2007, the Court entered a final decree closing Portland's case. The case was subsequently reopened at Ms. Olson's request of further case administration. The Hon. Elizabeth L. Perris reopened the bankruptcy case of the Archdiocese of Portland in Oregon for further administration. Erin K. Olson, Esq., at the Law Office of Erin Olson, P.C., previously asked the Court to reopen the case to resolve certain issues, including her request to unseal, and file in redacted form, the documents and accompanying exhibits filed as Docket Nos. 4765 and 4766 in the bankruptcy case. (Catholic Church Bankruptcy News, Issue No. 129; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CATHOLIC CHURCH: Judge Williams Reopens Spokane's Case ------------------------------------------------------ Judge Patricia Williams of the U.S. Bankruptcy Court for the Eastern District of Washington approved the request of the Diocese of Spokane's Plan Trustee, Gloria Z. Nagler, Esq., to reopen the Diocese's bankruptcy case so that she may seek approval of her proposed distribution of trust funds. The previous order closing the case is amended to: -- clarify that, with the exception of Allowed Future Tort Claims–Extended and Allowed Future Tort Claims–Initial, all other Claims which had not been allowed as of May 12, 2008, will not be considered or allowed after May 12, 2008; and -- provide that the Plan Trustee is authorized to distribute funds to the Claimants and maintain reserves for potential taxes, professional fees and indemnity-related matters, without maintaining any reserves for additional Claims, which were not allowed as of May 12, 2008, and which do not qualify as Future Tort Claims. The additional Claims will not be funded from the reserves created by the Plan Trustee. About The Diocese of Spokane The Roman Catholic Church of the Diocese of Spokane filed for chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $11,162,938 in total assets and $81,364,055 in total debts. The Diocese of Spokane, the Tort Claimants Committee, the Future Claims Representative, and the Executive Committee of the Association of Parishes delivered an Amended Plan of Reorganization, and a Disclosure Statement describing that Plan to the Court on Feb. 1, 2007. The Honorable Patricia C. Williams approved the disclosure statement on March 8, 2007. On April 24, 2007, the Court confirmed Spokane's second amended joint plan. That plan is effective May 31, 2007. (Catholic Church Bankruptcy News, Issue No. 128; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CBA COMMERCIAL: S&P Cuts Class M-7 to 'D' After Principal Loss -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class M-7 commercial mortgage pass-through certificate from CBA Commercial Assets 2005-1 to 'D' from 'CCC-'. The downgrade of the class M-7 certificate reflects a $1,138,266 principal loss to the outstanding principal balance of the security due to the liquidation of two assets that were with the special servicer, Midland Loan Services Inc. The first asset, 1510 Nunneley, had a total exposure of $2,455,078 and was secured by a 95-unit multifamily property built in 1961 in Wichita Falls, Texas. According to the July 25, 2008, trustee remittance report, the property was liquidated, resulting in a $2,066,112 realized loss to the trust. The second asset, 146 Walker Street, had a total exposure of $473,385 and was secured by a nine-unit multifamily property built in 1892 in Manchester, N.H. According to the July 25, 2008, trustee remittance report, the property was liquidated, resulting in a $110,171 realized loss to the trust. The realized losses reduced the principal balance of the class M-8 certificate to $0 from $1,023,788. The balance of the realized losses ($1,138,266) was then allocated to the M-7 class. The 1510 Nunneley asset experienced a 100.78% loss severity upon disposition, while the 146 Walker Street asset was liquidated at a 24.69% loss severity. CBRE REALTY: S&P Affirms 'BB' Rating on Classes K, L Notes ---------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 14 classes from CBRE Realty Finance CDO 2007-1 Ltd. and removed them from CreditWatch with negative implications, where they were placed on May 28, 2008. The rating actions follow our analysis of the transaction, including an examination of the current credit characteristics of the transaction's assets and liabilities. While our analysis supports the affirmed ratings, the margin by which the actively managed transaction's break-even default rates exceeded the scenario default rates decreased for several classes. If the credit characteristics of the collateral assets decline, we could lower or place our ratings on several classes on CreditWatch negative. According to the trustee report dated June 27, 2008, the transaction's current assets included 38 classes ($197.1 million, 20%) of pass-through certificates from 25 distinct CMBS transactions issued between 2000 and 2007. None of the CMBS assets represent an asset concentration of 10% or more, while $7.1 million are first-loss positions. The current assets also included: -- Thirty-six commercial real estate loans ($758.5 million, 78%), which included whole loans, subordinate B notes, and mezzanine loans; and -- Five classes ($13 million, 1%) from three commercial real estate collateralized debt obligation (CDO) transactions. The aggregate principal balance of the assets totaled $968.6 million, down from $1.0 billion at issuance. The aggregate liabilities totaled $1.0 billion when considering the total commitment for class A-1R, which is unchanged since issuance. Our analysis indicates that the current asset pool exhibits weighted average credit characteristics consistent with 'BB-' rated obligations. Standard & Poor's rates $179.1 million (18%) of the assets. We reanalyzed our outstanding credit estimates for the remaining assets. RATINGS AFFIRMED AND REMOVED FROM CREDITWATCH NEGATIVE CBRE Realty Finance CDO 2007-1 Ltd. Commercial real estate CDO Rating Class To From A-1 AAA AAA/Watch Neg A-1R AAA AAA/Watch Neg A-2 AAA AAA/Watch Neg A-2R AAA AAA/Watch Neg B AA AA/Watch Neg C A+ A+/Watch Neg D A A/Watch Neg E A- A-/Watch Neg F BBB+ BBB+/Watch Neg G BBB BBB/Watch Neg H BBB- BBB-/Watch Neg J BB+ BB+/Watch Neg K BB BB/Watch Neg L BB- BB-/Watch Neg CLAYTON HOLDINGS: Moody's Withdraws B1 Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service has withdrawn its B1 corporate family rating on Clayton Holdings Inc. The rating has been withdrawn because Moody's believes it lacks adequate information to maintain a rating. In July 2008, Clayton completed its merger with Cobra Green Acquisition Corp., an affiliate of Greenfield Partners. Clayton ceased to be a publicly traded company, terminated its rated credit facility and all rated debt was paid off, in connection with the merger. These rating was withdrawn: Clayton Holdings Inc. -- Corporate family rating at B1 on review for possible downgrade Clayton Holdings Inc. is based in Shelton, Connecticut, provides outsourced services, information-based analytics and specialty consulting for buyers and sellers of, and investors in, mortgage- related loans and securities and other debt instruments. CLEAR CHANNEL: Implements Stock Fund Blackouts Prior to Merger -------------------------------------------------------------- Prior to the closing of the merger between Clear Channel Communications, Inc. and BT Triple Crown Merger Co., Inc., Clear Channel on July 18, 2008, provided a notice to the directors and executive officers of the company and to the participants and beneficiaries of the Clear Channel, Inc. 401(k) Savings Plan that activity in the Clear Channel Common Stock Fund under the 401(k) Plan will be closed temporarily to any transactions, beginning at the closing of trading on July 28, 2008. BT Triple Crown Merger Co., Inc. is an indirect subsidiary of CC Media Holdings, Inc. The blackout period for the Stock Fund was contingent upon approval of the merger by Clear Channel's shareholders. Also, on July 18, 2008 notice was provided to the directors and executive officers of Clear Channel and to the participants and beneficiaries of the Clear Channel, Inc. Nonqualified Deferred Compensation Plan that activity in the Company Stock Fund under the NQ Plan, which consists of deemed investments in Company stock, will be closed temporarily to any transactions, beginning at the closing of trading on July 28, 2008. The blackout period for the NQ Plan was contingent upon approval of the Merger As reported by the Troubled Company Reporter on July 31, 2008, in connection with the completion of the merger with BT Triple Crown Merger Co., Clear Channel Communications, Inc. reported the expiration and final results of its tender offer to purchase any and all of its subsidiary AMFM Operating Inc.'s outstanding 8% Senior Notes due 2008 (CUSIP No. 158916AL0). The tender offer and consent solicitation was made pursuant to the terms and conditions set forth in the AMFM Offer to Purchase and Consent Solicitation Statement for the Notes dated Dec. 17, 2007, and the related Letter of Transmittal and Consent. The tender offer and consent payment deadline expired at 8:00 a.m. New York City time on July 30, 2008. The aggregate principal amount of the Notes validly tendered (and not validly withdrawn) was $639 million, representing approximately 99.12% of outstanding Notes. About Clear Channel San Antonio, Texas-based Clear Channel Communications Inc. (NYSE: CCU) -- http://www.clearchannel.com/-- is a diversified media company operating in three business segments: radio broadcasting, Americas outdoor advertising, international outdoor advertising, which contributed to 50%, 21%, and 26%, respectively, during the year ended Dec. 31, 2007. The company owns 717 core radio stations, 288 non-core radio stations operating in the United States. It also owns about 209,000 Americas outdoor advertising display faces and approximately 687,000 international outdoor advertising display faces. In addition, it had equity interests in various international radio broadcasting companies. As of Feb. 13, 2008, the company sold 217 non-core radio stations. In March 2008, the company announced that it has completed the sale of its Television Group to Newport Television LLC. As disclosed in the Troubled Company Reporter on July 30, 2008, in-line with prior guidance, Fitch Ratings has downgraded the Issuer Default Rating and outstanding debt rating of Clear Channel Communications, Inc. as: IDR to 'B' from 'BB-'; and Senior unsecured non-guaranteed notes to 'CCC/RR6' from 'BB-'. Fitch has also removed Clear Channel from Rating Watch Negative, where it was originally placed on Oct. 26, 2006. The Rating Outlook is Negative. Additionally, Fitch has withdrawn all existing ratings of Clear Channel. As reported by the Troubled Company Reporter on June 20, 2008, Standard & Poor's Ratings Services lowered its corporate credit rating on Clear Channel Communications Inc. to 'B' from 'B+' based on the proposed financing of the company's pending leveraged buyout by the private equity group co-led by Thomas H. Lee Partners L.P. and Bain Capital Partners LLC. At the same time, S&P removed all the ratings from CreditWatch, where they had been placed with negative implications on Oct. 26, 2006, following the company's announcement that it was exploring strategic alternatives to enhance shareholder value, including a possible sale of the company. The outlook is stable. At the same time, Standard & Poor's assigned its 'B' bank loan rating and '3' recovery rating on Clear Channel's $16.1 billion of new senior secured credit facilities. The '3' recovery rating indicates S&P's expectation for meaningful (50% to 70%) recovery of principal and pre-petition interest in the event of a payment default. S&P also assigned its 'CCC+' rating on the company's $2.3 billion of new senior unsecured notes, with a recovery rating of '6', indicating its expectation for negligible (0% to 10%) recovery in the event of a payment default. At the same time, S&P lowered its rating on the company's $5.1 billion of existing senior unsecured notes to 'CCC+' from 'B-' and assigned a recovery rating of '6' on these issues. The 'B-' rating on the company's existing 8% senior notes due November 2008 at its AMFM Operating Inc. subsidiary remains on CreditWatch with negative implications pending the completion of the company's tender offer for these notes. S&P lowered the rating on Clear Channel's existing $750 million of 7.65% senior notes due 2010 to 'CCC+' from 'B-' and assigned a recovery rating of '6', reflecting the potential for this issue to remain outstanding until maturity. As reported by the TCR on Jul 31, 2008, Moody's Investors Service assigned a B2 Corporate Family Rating and B2 Probability of Default Rating to Clear Channel Communications, Inc. In addition, Moody's assigned a B1 rating to Clear Channel's new $15.77 billion senior secured credit facilities and a Caa1 rating to its proposed $2.31 billion guaranteed senior unsecured notes. Moody's also downgraded the company's legacy senior unsecured notes to Caa1 from Baa3 and affirmed the SGL2 speculative grade liquidity rating. The rating outlook is stable. This concludes Moody's review of Clear Channel's ratings, which was initiated on October 26, 2006 in connection with the company's announcement that its Board of Directors was evaluating various strategic alternatives to enhance shareholder value. CMT AMERICA: Gets Final Approval to Use Clothing's $2.8 Mil. Loan ----------------------------------------------------------------- The Hon. Christopher Sontchi of the U.S. Bankruptcy Court for the District of Delaware authorized CMT America Corp. to access, on a final basis, up to 2,800,000 in postpetition financing under a revolving credit facility from Clothing for Modern Times Ltd., pursuant to a credit agreement dated July 15, 2008. As reported in the Troubled Company Reporter on July 23, 2008, the Debtor obtained up to $1,350,000 in postpetition financing, in an interim basis, with a sublimit for letters of credit of $250,000. The Court also authorized the Debtor to use the lender's cash collateral. Before its bankruptcy filing, the Debtor entered into a loan and security agreement dated May 15, 2006, as amended, with GMAC Commercial Finance LLC. On July 15, 2008, GMAC Commercial assigned all of its rights and interest in the prepetition obligations to Clothing for Modern. At present, Clothing for Modern owed about $4,077,948 in revolving loan principal obligations -- including an outstanding stand-by letter of credit of $250,000 plus interest, fees, costs and expenses -- under prepetition credit agreement. The prepetition obligations are secured by a security interest in substantially all of the assets of the Debtor. CMT America Holdings Inc., parent of the Debtor, guaranteed all of the Debtor's obligations under the prepetition credit agreement. CMT America Holdings is the Debtor's parent company. CMT America Holdings acquired a significant equity stake in the Debtor in 2006. Furthermore, CMT America Holdings provided $8,000,000 in term loan due March 1, 2009, under a security agreement dated July 1, 2007, to the Debtor that is secured by an interest in the Debtor's personal property, but subordinate to the prepetition credit agreement. As of July 13, 2008, approximately $4,077,948 remain outstanding under the prepetition agreement. The proceeds of the loan will be used solely for (i) working capital and general corporate purposes; (ii) payments of costs of administration of the case; and (iii) payment of prepetition expenses. The DIP facility is subject to a $680,000 carve-out for payment of fees and expenses incurred by professional advisors employ by the Debtor or the committee. The DIP agreement contains customary and appropriate events of default. To secure its DIP obligations, the lender will be granted superpriority administrative expense status over all administrative expenses pursuant to Section 503(b) or 507(b) of the Bankruptcy Code. A full-text copy of the credit agreement is available for free at http://ResearchArchives.com/t/s?2fc2 About CMT America Headquartered in Farmington, Connecticut, CMT America Corp. aka Fairvane Corp. is a 70-store women's clothing retailer. The company filed for Chapter 11 protection on July 13, 2008 (Bankr. D. Del. Case No.08-11434). Robert S. Brady, Esq., Young, Conaway, Stargatt & Taylor LLP, represents the Debtor in its restructuring efforts. The U.S. Trustee for Region 2 has yet to appoint an Official Committee of Unsecured Creditors. When the Debtor filed for protection against its creditors, it listed assets between $10 million and $50 million, and debts between $10 million and $50 million. CMT AMERICA: Court Approves Going-Out-Of-Business Sales Motion -------------------------------------------------------------- The Hon. Christopher Sontchi of the United States Bankruptcy Court for the District of Delaware authorized CMT America Corporation to conduct going-out-of-business sales at its retail stores including all merchandise and personal property, free and clear of all liens and interests. As reported in the Troubled Company Reporter on Aug. 5, 2008, the Debtor said that its sales have been steadily declining, and that consequently, it has determined that the most prudent course of action is to conduct an orderly liquidation of its operations through the present Chapter 11 case. The Debtor intended to sell, other than merchandise and personal property, all inventory it receives from its distribution center, and additional inventory from its affiliates third-party provider, CMT Sourcing. The Debtor said it wants to sell immediately the merchandise in order to quickly monetize the assets and minimize administrative costs. The GOB sales will take place on Oct. 31, 2008. The Debtor expects about 60% of the GOB sales will be completed by the end of August. In connection with the GOB sales, the Debtor plans to pay in the aggregate, $200,000 in bonuses to its employees involved in the sale transaction. A full-text copy of the Debtor's sale guidelines is available for free at http://ResearchArchives.com/t/s?30a6 About CMT America Headquartered in Farmington, Connecticut, CMT America Corp. aka Fairvane Corp. is a 70-store women's clothing retailer. The company filed for Chapter 11 protection on July 13, 2008 (Bankr. D. Del. Case No.08-11434). Robert S. Brady, Esq., Young, Conaway, Stargatt & Taylor LLP, represents the Debtor in its restructuring efforts. The U.S. Trustee for Region 2 has yet to appoint an Official Committee of Unsecured Creditors. When the Debtor filed for protection against its creditors, it listed assets between $10 million and $50 million, and debts between $10 million and $50 million. CONSECO INC: Planned Spin-Off Cues Fitch to Affirm All Ratings -------------------------------------------------------------- Fitch Ratings has affirmed all ratings assigned to Conseco Inc. and its affiliates. The Rating Outlook on all ratings remains Negative. The rating action follows Conseco's announcement of plans to spin- off Conseco Senior Health Insurance Company into a trust for the benefit of CSHI's long-term care policyholders. CHSI is an indirect, wholly owned subsidiary of Conseco. The company primarily houses Conseco's run-off LTC insurance business. The transaction is subject to regulatory approval, and is targeted to be completed in the fourth quarter of 2008. As part of the transaction, Conseco is expected to take a GAAP charge of approximately $1.1 billion, which largely consists of Conseco's GAAP equity in CHSI and a valuation allowance for certain deferred tax assets that will likely not be recoverable as a result of the proposed transaction. Prior to the proposed spin- off, Conseco is expected to contribute $175 million of capital into CSHI, consisting of $50 million of cash and a $125 million note. As a result of the transaction, Fitch expects Conseco's financial leverage as measured by debt to total GAAP capital will increase to approximately 27%-28% due to the GAAP charge and the note issuance. The statutory capital levels of Conseco's remaining insurance subsidiaries are expected to largely be unaffected with combined statutory capital of approximately $1.4 billion and combined risk-base capital at approximately the 300% of company action level RBC. Fitch expects that Conseco's capital adequacy based on Fitch's capital, Prism, to be in the 'A-' to 'BBB+' range. Fitch believes that the proposed CSHI spin-off will have a positive impact on Conseco's risk profile. The impact on Conseco's ratings and Outlook status will be based the company's ability to complete the CHSI spinoff, the final terms of the CSHI spinoff, and progress towards improving operating performance in the company's other business lines. Fitch affirmed these with a Negative Outlook: Conseco, Inc. -- Issuer Default Rating at 'BB'; -- Senior secured bank credit facility at 'BB+'; -- Senior unsecured debt at 'BB-'. Bankers Life and Casualty Company -- Insurer Financial Strength at 'BBB'. Conseco Life Insurance Company Bankers Conseco Life Insurance Company Conseco Insurance Company Conseco Health Insurance Company Colonial Penn Life Insurance Company Washington National Insurance Company -- IFS at 'BBB-'. Conseco Senior Health Insurance Company -- IFS at 'CCC+'. CONSECO INC: S&P Holds B+, BB+ Ratings on Plan to Transfer Units ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' counterparty credit rating on Conseco Inc. and its ratings on Conseco's insurance subsidiaries, most of which are rated 'BB+'. The outlook remains negative. "The affirmation follows Conseco's announcement [] that it intends to contribute its CSH [Conseco Senior Health Insurance Co.] subsidiary to an oversight trust for the benefit of CSH's long- term care policyholders," said Standard & Poor's credit analyst Jon Reichert. This transaction would completely separate CSH from Conseco. CSH houses the bulk of Conseco's run-off block of long- term care business, which had significant adverse claims experience for several years prior to 2008. (S&P also affirmed its 'CCC-' ratings on CSH.) Pro forma financial leverage and GAAP interest coverage, incorporating the impact of the transaction, are expected to remain supportive of the current ratings. S&P expects financial leverage to remain at less than 30% and GAAP interest coverage to be about 3x. As part of the transaction, Conseco will make one final capital contribution to CSH of $175 million, which will be funded through a combination of existing cash at Conseco and a $125 million note to CSH. Also as a result of this transaction, Conseco's GAAP equity is expected to decline by about $1.2 billion. CONTINENTAL AIRLINES: S&P Affirms 'B' Rating; Off CreditWatch ------------------------------------------------------------- Standard & Poor's Ratings Services took various actions on its ratings on Continental Airlines Inc. (B/Negative/B-3). S&P affirmed its 'B' long-term corporate credit rating, 'B-3' short- term corporate credit rating, all ratings on unsecured debt and on selected enhanced equipment trust certificates. S&P lowered S&P's ratings on other enhanced equipment trust certificates, particularly those secured by regional jets, and raised other ratings. All ratings were removed from CreditWatch, where they were placed with negative implications May 22, 2008, as part of an industrywide review. The rating outlook is negative. "We expect that Continental Airlines will post a significant loss this year, due to high fuel prices, but its operating performance should continue to be better than those of most peer large U.S. airlines," said Standard & Poor's credit analyst Philip Baggaley. "That, plus expected adequate liquidity, support an affirmation of its corporate credit rating. Our downgrades on selected enhanced equipment trust certificates are based on reduced collateral values for certain models of aircraft, especially 50-seat regional jets, which are less economic to operate at current high fuel prices." Continental continues to report better operating results than its peer "legacy carriers," including a relatively modest $171 million first-half 2008 pretax loss. Still, Continental is under pressure from high (albeit recently somewhat reduced) fuel prices and, like other U.S. airlines, is grounding older, less fuel-efficient aircraft (including 67 B737-300s and B737-500s, as well as various regional jets). This, along with similar actions at other airlines, should allow Continental to generate higher passenger revenues per available seat miles by the fourth quarter and into 2009 (its consolidated passenger revenues per available seat mile increased 5.7% during the first half of 2008). S&P expects Continental to generate a reduced loss in 2009, with the magnitude dependent on the level of fuel prices and strength of passenger demand in a weak U.S. economy. The 'B' long-term corporate credit rating on Houston-based Continental reflects its participation in the high-risk airline industry and a heavy debt and lease burden, but also better-than- average operating performance among its peer large U.S. hub-and- spoke airlines. Continental, the fourth-largest U.S. airline, serves markets mainly in the southern and eastern U.S. from hubs at Houston; Newark, N.J.; and Cleveland, Ohio. International routes serve the central Pacific, selected Asian destinations, Latin America, and Europe. Although Continental currently has adequate liquidity and will likely report narrower losses than similar U.S. airlines, worse- than-expected fuel prices and/or economic weakness could erode the company's financial profile. S&P may lower the rating if unrestricted cash and short-term investments fall below $2 billion. If Continental is able to weather the downturn and industry conditions improve, S&P could revise the outlook to stable. COUDERT BROTHERS: Panel Wants to Investigate 16 Former Partners --------------------------------------------------------------- The Official Committee of Unsecured Creditors in the chapter 11 case of Coudert Brothers LLP asks the United States Bankruptcy Court for the Southern District of New York for permission to probe 16 former partners of Coudert Brothers for alleged breach of fiduciary duties, Bloomberg News reports. According to Bloomberg, the Debtor's partners decided out of a March 2008 agreement, which gave certain attorneys legal protection in turn for financial contribution to the Debtor's reorganization. The Committee's assertion did not contain specific allegations, the report says. The Committee is seeking documents related to the Debtor's case including documents that were transfered from the Debtor to the former partners' new law firm, the report relates. Accordingly, former partners of the Debtors will be called to testify as part of the investigation, the report says. As the Debtor liquidated its assets in 2005, nine of the 16 former partners transfered to DLA Piper LLP and the remaining went to Dechert LLP, the report notes. About Coudert Brothers Coudert Brothers LLP was an international law firm specializing in complex cross-border transactions and dispute resolution. The firm had operations in Australia and China. The Debtor filed for Chapter 11 protection on Sept. 22, 2006 (Bankr. S.D.N.Y. Case No. 06-12226). John E. Jureller, Jr., Esq., and Tracy L. Klestadt, Esq., at Klestadt & Winters, LLP, represent the Debtor in its restructuring efforts. The U.S. Trustee for Region 2 appointed five creditors to serve on an Official Committee of Unsecured Creditors. Brian F. Moore, Esq., and David J. Adler, Esq., at McCarter & English, LLP, represent the Official Committee of Unsecured Creditors. In its schedules of assets and debts, Coudert listed total assets of $29,968,033 and total debts of $18,261,380. CPG INTERNATIONAL: S&P Revises Outlook to Neg; B Rating Affirmed ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on building materials company CPG International Inc. to negative from stable. All ratings, including the company's 'B' corporate credit rating, were affirmed. The outlook revision follows the company's weaker-than-expected second quarter results and expectations of weaker earnings and cash flow in 2008, driven by the ongoing housing downturn and weak U.S. economy. In addition, the outlook revision reflects S&P's uncertainties regarding the depth and duration of the current difficult operating conditions and the further impact this may have on the company's operating results. Still, CPG continues to have adequate near-term liquidity consisting of about $13 million in cash and $38 million in revolving credit facility availability. The ratings on CPG, a Scranton, Pa.-based manufacturer of engineered building products, reflect its cyclical and seasonal niche markets, exposure to volatile raw-material costs, competition from substitute trim board and decking products, and current challenging operating conditions. These factors overshadow the company's continued penetration of its end markets and good margins. S&P expects endâ€“market demand for CPG's products to remain somewhat weak for the remainder of 2008 and into 2009 due to poor new construction fundamentals and weaker repair and remodeling spending. As a result, credit measures are likely to remain somewhat weak for the rating, with adjusted debt to EBITDA in the 5.5x to 6x range. "A downgrade could occur during thUnsaved Document 3is period if reduced construction activity or additional raw-material cost increases further weaken the company's credit measures beyond expected levels or if liquidity narrows meaningfully," said Standard & Poor's credit analyst Michael Scerbo. Specifically, S&P could lower the rating if debt to EBITDA were to increase to materially over 6x for an extended time due to the combination of continued margin contraction and lower volumes. An outlook revision back to stable could occur in the near term if the company can successfully stabilize operating results through continued price increases and cost efficiencies, resulting in modest improvement to credit measures, despite the current operating conditions. CT CDO IV: S&P Affirms 'BB', 'B' Ratings on Six Classes ------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 15 classes from CT CDO IV Ltd. and removed four of them from CreditWatch with negative implications, where they were placed on May 28, 2008. The rating actions follow S&P's analysis of the transaction, including an examination of the current credit characteristics of the transaction's assets and liabilities. According to the trustee report dated July 15, 2008, the transaction's current assets included 33 classes ($254.8 million, 62%) of pass-through certificates from 27 distinct CMBS transactions issued between 1998 and 2006. The current assets also included nine classes ($128.9 million, 31%) from five CMBS resecuritizations and two mezzanine commercial real estate loans ($29.7 million, 7%). Only class C from CRIIMI MAE Commercial Mortgage Trust's series 1998-C1 ($52 million, 13%) represents an asset concentration of 10% or more of total assets. The aggregate principal balance of the assets and liabilities both totaled $413.5 million, down from $488.6 million at issuance. The $75.2 million reduction in aggregate asset balance was due to principal paydowns on the underlying assets. S&P's analysis indicates that the current asset pool exhibits weighted average credit characteristics consistent with 'BBB' rated obligations. Standard & Poor's rates $298.5 million (72%) of the assets. S&P reanalyzed its outstanding credit estimates for the remaining assets. RATINGS AFFIRMED AND REMOVED FROM CREDITWATCH NEGATIVE CT CDO IV Ltd. Collateralized debt obligations Rating Class To From J BB- BB-/Watch Neg K B+ B+/Watch Neg L B B/Watch Neg M B- B-/Watch Neg RATINGS AFFIRMED CT CDO IV Ltd. Collateralized debt obligations Class Rating A-1 AAA A-2 AAA B AA C A D-FL BBB+ D-FX BBB+ E BBB F-FL BBB- F-FX BBB- G BB+ H BB DANA CORP: Settles Allen County's Claim for $1,750,000 ------------------------------------------------------ Dana Holding Corporation paid the Allen County Treasurer's Office $1,750,000 for the county's prepetition claims arising from tax payments, the Indiana NewsCenter reported. According to the report, the settlement money will go into the county tax collections fund and will be distributed to units receiving Allen County property tax monies. "We were able to successfully resolve this matter without litigation, which could have taken a lot of time and cost the taxpayers a lot of money," Allen County Treasurer Robert Lee told the Indiana NewsCenter. About DANA Based in Toledo, Ohio, Dana Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Dana has facilities in China in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. The company and its affiliates filed for chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Nov. 30, 2007, the Debtors listed $7,131,000,000 in total assets and $7,665,000,000 in total debts resulting in a total shareholders' deficit of $534,000,000. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, served as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners served as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represens the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP served as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC served as counsel to the Official Committee of Non-Union Retirees. The Debtors filed their Joint Plan of Reorganization on Aug. 31, 2007. On Oct. 23, 2007, the Court approved the adequacy of the Disclosure Statement explaining their Plan. Judge Burton Lifland of the U.S. Bankruptcy Court for the Southern District of New York entered an order confirming the Third Amended Joint Plan of Reorganization of the Debtors on Dec. 26, 2007. The Debtors' Third Amended Joint Plan of Reorganization was deemed effective as of Jan. 31, 2008. Dana Corp., starting on the Plan Effective Date, operated as Dana Holding Corporation. (Dana Corporation Bankruptcy News, Issue No. 79; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000) * * * As reported in the Troubled Company Reporter on Feb. 12, 2008, Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Dana Holding Corp. following the company's emergence from Chapter 11 on Feb. 1, 2008. The outlook is negative. At the same time, Standard & Poor's assigned Dana's $650 million asset-based loan revolving credit facility due 2013 a 'BB+' rating (two notches higher than the corporate credit rating) with a recovery rating of '1', indicating an expectation of very high recovery in the event of a payment default. In addition, S&P assigned a 'BB' bank loan rating to Dana's $1.43 billion senior secured term loan with a recovery rating of '2', indicating an expectation of average recovery. The TCR reported on Feb. 18, 2008, that Moody's Investors Service affirmed the ratings of the reorganized Dana Holding Corporation as: Corporate Family Rating, B1; Probability of Default Rating, B1. In a related action, Moody's affirmed the Ba3 rating on the senior secured term loan and raised the rating on the senior secured asset based revolving credit facility to Ba2 from Ba3. The outlook is stable. The financing for the company's emergence from Chapter 11 bankruptcy protection has been funded in line with the structure originally rated by Moody's in a press release dated Jan. 7, 2008. DELTA AIR: Gets Unconditional Clearance from European Commission ---------------------------------------------------------------- Delta Air Lines, Inc. and Northwest Airlines Corporation received, on Aug. 6, 2008, unconditional clearance from the European Commission on the airlines' proposed merger. The Commission, which is the regulatory arm of the European Union, noted that its investigation found the proposed transaction "would not impede effective competition in Europe or the trans-Atlantic." The airlines only offer overlapping direct service between Amsterdam-Atlanta, Amsterdam-New York and Paris-Detroit, and talks with competitors and customers did not flag antitrust problems on these routes, the Commission said, according to The Associated Press. Both Delta and Northwest are part of the SkyTeam alliance, sharing flights with Air France, KLM, Alitalia and Continental Airlines, among others. Delta flies to 119 international destinations including 32 cities in the EU territory, reports the AP. "Approval from the European Commission for the merger is another important step toward completing our pro-competitive merger with Northwest. . . which will offer greater access to destinations across the globe," Delta's chief executive officer Richard Anderson said in a statement posted on Delta's Web site. "We continue to work closely with the U.S. Department of Justice and remain confident that we will be able to finalize the merger by the end of the year," Mr. Anderson added. NWA Union Officials Testify Before Lawmakers on Proposed Delta-Northwest Merger In a hearing in Washington on July 30, 2008, before the Health, Employment, Labor, and Pensions subcommittee of the U.S. House of Representatives, unions representing Northwest's flight attendants, ramp workers and reservation agents pointed out that Delta's buyout plan for Northwest threatens pension benefits for employees, the AP reports. Northwest employees have not received assurances that their pension benefits would be protected upon the closing of the planned merger, said Robert Roach, general vice president of the International Association of Machinists on behalf of Northwest's labor force, reports the AP. "The ill-advised Delta-Northwest merger will jeopardize everything [the Northwest employees] have worked for while destroying two once-great airlines and threatening the solvency of our nation's pension insurance agency," Mr. Roach said, according to the Atlanta-Journal Constitution. Mr. Roach argued that the combined airline should not be allowed to "dump their garbage" on the Pension Benefit Guaranty Corp., the government-created corporation that takes over pension plans for bankrupt companies, says AJC. Forcing the frozen pension plans unto PBGC will mean an added $15,600,000,000 in liabilities on top of its $13,100,000,000 deficit for fiscal year 2007, AJC reports, quoting Mr. Roach. In response, Rob Kight, Delta's vice president for Compensation, Benefits and Services, told the Subcommittee that Delta intends to maintain its pension plans and Northwest's that were frozen in the Chapter 11 cases. The Delta-Northwest combination is about "addition, not subtraction," hence it will mean "a stronger company" that will be better able to fund pensions going forward," Mr. Kight said, according to AJC. Subsequent to testifying before lawmakers, IAM released a press statement dated July 30, reiterating that the Delta-NWA merger could possibly jeopardize workers' pensions and the stability of the government's pension insurance system, a complete copy of which is available for free at http://www.goiam.org/mergers Delta FAs are Not Unionized, AFA-CWA Worries On behalf of Northwest's flight attendants, the Association of Flight Attendants-CWA international president Patricia Friend, noted that Delta flight attendants are not currently represented by a union, according to the AP. Ms. Friend also accused Delta management of interfering with an attempt by some of its flight attendants to unionize. As previously reported, eligible Delta flight attendants voted to become unionized from April 23 through June 3, 2008; however, more than 60% of them rejected AFA's representation, according to results from the National Mediation Board. The AFA-CWA filed on June 6, 2008, formal interference charges with the NMB against Delta management, alleging illegal conduct during the recent flight attendant representation election. "This merger should not be permitted to be a vehicle for union busting," Ms. Friend told lawmakers during the hearing, says the AP. According to Ms. Friend, Delta "will do everything in their power to first make sure there is no union in place to protect the hard-earned benefits of the currently unionized Northwest flight attendants," AJC reports. Ms. Friend urged the members of the Committee to remember that "the hundreds of thousands of airline employees across the country have the most to lose and with the least protection." Delta President: Delta-NWA Merger to Produce $2-Bil. in Savings In an interview with The Street.com, Delta President Ed Bastian said that he believes that Delta's planned merger with Northwest will produce $2,000,000,000 in savings and benefits, up from an original estimate of $1,200,000,000 and will cost about $600,000,000, down from the $1,000,000,000, which the Company previously projected. "Now that we've had an opportunity to do more detailed work, we've been able to validate the synergies we thought were there, but had a difficult time quantifying," Mr. Bastian said in the interview. The updated evaluation means that the combined Company could possibly gain back $500,000,000 in 2009, and another $500,000,000 to $600,000,000 annually until 2012. Upon the closing of the merger, Delta will become the operator of not less than 700 regional jets, which comprises approximately 40% of U.S.' regional jet fleet, The Street.com notes. The airline will also get more than $100,000,000 in improved efficiencies in airport operations due to lessened leases in costly facilities, including, among others, the Los Angeles International Airport, the report adds. Delta CEO Aims for "Quick Integration" with Northwest Delta intends to file for a single operating certificate with the Federal Aviation Administration by the end of August 2008, in connection with its planned merger with Northwest, Marketwatch reports. Mr. Anderson said in a CNBC interview that Delta plans to take Northwest as a subsidiary during the first 18 months after the merger is completed. Delta intends to fold Northwest's operations into Delta "as quickly as we can," Mr. Anderson told CNBC, says the report. Mr. Anderson also noted that negotiations "are still at pace" with respect to discussions on antitrust issues with U.S. congressional panels, as well as The Department of Justice for final approval. Delta and Northwest Face Antitrust Trial Over Merger in November As previously reported, a group of 28 airline passengers from 10 states filed a lawsuit in the U.S. District Court for the Northern District of California to halt Delta Airlines, Inc.'s proposed takeover of Northwest Airlines Corporation. U.S. District Court Judge Vaughn Walker scheduled in San Francisco, on November 5, 2008, the trial over claims that the Delta-Northwest merger violates antitrust laws, Bloomberg News reports. Northwest and Delta executives are expected to testify at the trial, USA Today says. According to Bloomberg News, the lawsuit, captioned Rosemary D'Augusta v. Northwest Airlines, allege that the proposed Delta- Northwest merger "would result in an illegal monopoly," controlling, among others, 24% of domestic flights. The lawsuit also alleges that "higher ticket prices and diminished service" will result if federal regulators approve the deal, says the report. Delta and Northwest have said the combined Company would have the the most flights worldwide, providing access to more than 390 destinations in 67 countries. About Northwest Airlines Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents, including Italy, Spain, Japan, China, Venezuela and Argentina. The company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for bankruptcy, they listed $14.4 billion in total assets and $17.9 billion in total debts. On Jan. 12, 2007, the Debtors filed with the Court their chapter 11 plan. On Feb. 15, 2007, the Debtors filed an amended plan and disclosure statement. The Court approved the adequacy of the Debtors' amended disclosure statement on March 26, 2007. On May 21, 2007, the Court confirmed the Debtors' amended plan. That amended plan took effect May 31, 2007. (Northwest Airlines Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on July 29, 2008, Standard & Poor's Ratings Services lowered its ratings on Northwest Airlines Corp. and subsidiary Northwest Airlines Inc. (both rated B/Negative/--), including lowering the long-term corporate credit ratings on both entities to 'B' from 'B+', and removed the ratings from CreditWatch, where they had been placed with negative implications April 15, 2008. The outlook is negative. The downgrade reflects expected losses and reduced or negative operating cash flow caused by high fuel prices. S&P also lowered our ratings on enhanced equipment trust certificates, in some cases by more than one notch. About Delta Air Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE: DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta flies to Argentina, Australia and the United Kingdom, among others. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan. 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 25, 2007, the Court confirmed the Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. (Delta Air Lines Bankruptcy News, Issue No. 105; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DELTA AIR: Shareholders to Vote on Northwest Merger Sept. 25 ------------------------------------------------------------ In a joint prospectus filed with the Securities and Exchange Commission, dated Aug. 6, 2008, Delta Air Lines, Inc. and Northwest Airlines Corporation notify their stockholders of separate special meetings, that will simultaneously take place on Sept. 25, 2008. Essentially, during their Special Meetings, Delta and Northwest stockholders will consider and vote on a proposal to adopt the Agreement and Plan of Merger, dated as of April 14, 2008, by and among Delta Air Lines, Inc., Nautilus Merger Corporation, a direct, wholly-owned subsidiary of Delta, and Northwest. Delta's Special Meeting According to Delta Chief Executive Officer Richard H. Anderson, Delta's Special Meeting will be held at 2:00 p.m., at the Georgia International Convention Center Concourse, College Park in Georgia, where Delta stockholders will vote on: * a proposal to approve an amendment to the Delta 2007 Performance Compensation Plan to increase the number of shares of Delta Common Stock issuable by a number of shares equal to 15% of Delta's outstanding equity capitalization, determined on a fully-diluted basis at the closing of the Merger; and * an adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes to approve the Proposals. The issuance of Delta common stock to Northwest stockholders in the merger and the amendment to the Delta 2007 Performance Compensation Plan require the affirmative vote of holders of a majority of the shares of Delta common stock, according to the SEC filing. In connection with the Merger, Delta intends to issue to substantially all employees of the combined Company, equity equal to approximately 13.38% of Delta's outstanding equity capitalization, determined on a fully-diluted basis at the closing of the Merger. Delta says its board of directors believes the employees of the combined Company should receive equity to recognize their critical role in assisting it to (i) achieve its financial, operational and customer service goals, (ii) more closely align their interests with stockholders, and (iii) increase their stake in the combined Company's financial performance. The amendment to the Delta 2007 Performance Compensation Plan is intended to permit Delta to implement the employee equity issuance and allow for other equity grants after the closing of the merger, the SEC filing disclosed. Delta has fixed the close of business on July 29, 2008, as the record date for determination of the Delta stockholders entitled to receive notice of, and to vote at, the Delta Special Meeting. Northwest's Special Meeting Northwest's Special Meeting at 9:30 a.m., Eastern Time, will be held in the AXA Equitable Center's Auditorium located at 787 Seventh Avenue, New York, according to Northwest CEO Douglas M. Steenland. Northwest's stockholders will, among other things: * elect 12 directors to hold office until the 2009 Annual Meeting of Stockholders; * ratify the appointment of Ernst & Young LLP as Northwest's independent registered public accounting firm for 2008; * to approve an amendment to the Northwest Airlines Corp. 2007 Stock Incentive Plan; and * approve the adjournment of the Northwest Annual Meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes to approve the Merger and its Agreement. According to Mr. Steenland, the Northwest board of directors has fixed July 31, 2008, as the record date for determination of the Northwest stockholders entitled to receive notice of, and to vote at, the Northwest Annual Meeting. The joint proxy statement or prospectus and the Northwest 2007 Annual Report are available at http://www.proxyvote.com A full-text copy of Delta and Northwest's joint prospectus on Form S-4 is available at no charge at: http://ResearchArchives.com/t/s?30b1 Northwest Files Transcript of Conference Call In a separate filing on Form 425 with the SEC dated July 24, 2008, Northwest disclosed the transcript of their Conference Call held on July 23, with participating analysts Ray Neidl of Calyon Securities, Gary Chase of Lehman Brothers, Jamie Baker of JPMorgan, William Greene of Morgan Stanley and Daniel McKenzie of Credit Suisse. Northwest's Corporate participants included Doug Steenland; Andrew Roberts, executive vice president for Operations; Dave Davis, chief financial officer, Tim Griffin, EVP for Marketing and Distribution; and Andrew Lacko, Director IR. Among other things, Northwest tackled the planned merger with Delta, which, according to Mr. Steenland "makes even more sense now given the continued run up in fuel prices than it did when we entered into the merger agreement in April [2008]." Mr. Steenland added that "significant work is already under way" to realize the synergies of the Merger, including, among others: -- Delta and Northwest's joint formation of 26 integration planning teams comprised of leaders from both companies for smooth integration of operations; -- an unprecedented pre-merger collective bargaining agreement reached with Delta and Northwest pilot groups that includes a process to achieve full seniority list integration upon closing of the merger, subject to membership ratification and expected to be realized in August; -- Northwest and Delta's special meetings to be held on September 25, 2008, for shareholders to vote for the approval of the merger; and -- announcement of key executives that will lead the combined Company. Mr. Steenland added that the merger-related synergies have been estimated to be $2,000,000,000 on an annualized steady basis. "We continue to expect the closing in the fourth quarter of 2008," Mr. Steenland said. Mr. Davis reported that for the second quarter of 2008, Northwest incurred a net loss of $377,000,000. However, operating revenues for the second quarter were $3,600,000,000, up 12.4% from 2007, he says. The Participants also tackled, among other things, the impact of fuel costs to Northwest, the airline's capacity cuts and number of regional jets. A full-text copy of the Northwest Conference Call Transcript is available for free at http://ResearchArchives.com/t/s?30b0 About Northwest Airlines Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents, including Italy, Spain, Japan, China, Venezuela and Argentina. The company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for bankruptcy, they listed $14.4 billion in total assets and $17.9 billion in total debts. On Jan. 12, 2007, the Debtors filed with the Court their chapter 11 plan. On Feb. 15, 2007, the Debtors filed an amended plan and disclosure statement. The Court approved the adequacy of the Debtors' amended disclosure statement on March 26, 2007. On May 21, 2007, the Court confirmed the Debtors' amended plan. That amended plan took effect May 31, 2007. (Northwest Airlines Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on July 29, 2008, Standard & Poor's Ratings Services lowered its ratings on Northwest Airlines Corp. and subsidiary Northwest Airlines Inc. (both rated B/Negative/--), including lowering the long-term corporate credit ratings on both entities to 'B' from 'B+', and removed the ratings from CreditWatch, where they had been placed with negative implications April 15, 2008. The outlook is negative. The downgrade reflects expected losses and reduced or negative operating cash flow caused by high fuel prices. S&P also lowered our ratings on enhanced equipment trust certificates, in some cases by more than one notch. About Delta Air Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE: DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta flies to Argentina, Australia and the United Kingdom, among others. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan. 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 25, 2007, the Court confirmed the Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. (Delta Air Lines Bankruptcy News, Issue No. 105; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DELTA AIR: Trial for Comair 5191 Crash Lawsuits Canceled -------------------------------------------------------- A civil trial over the Comair Flight 5191 crash in 2006 that was scheduled Aug. 4, 2008, in Fayette County, Kentucky, before U.S. District Judge Karl Forester has been canceled, Kentucky.com reports. According to the report, only two lawsuits against Comair remained in Fayette County, and one in Florida. Over the past two weeks, 17 families reached settlement agreements with Comair, pursuant to court-ordered settlement conferences conducted by retired State Supreme Court Justice James E. Keller and U.S. Magistrate Judge James B. Todd, Kentucky.com says. Comair spokeswoman Kate Marx said Comair has honored its initial commitment "to [treat] the passenger families fairly and respectfully." Flight 5191 crashed on Aug. 27, 2006, after it took off from the wrong runway at Blue Grass Airport. Forty-nine of the 50 passengers were killed, of which 45 sued Comair. Subsequently, Comair filed a lawsuit against the Federal Aviation Administration, alleging the FAA's negligence in having only one air traffic controller on duty on Aug. 27, 2006. About Delta Air Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE: DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta flies to Argentina, Australia and the United Kingdom, among others. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan. 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 25, 2007, the Court confirmed the Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. (Delta Air Lines Bankruptcy News, Issue No. 105; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DELTA AIR: Drops Springfield-Cincinnati Route and Stewart Flights ----------------------------------------------------------------- Effective Aug. 31, 2008, Delta Air Lines, Inc. will end its three daily flights between Springfield and Cincinnati, according to Cheapflights.com, quoting officials at Springfield-Branson National Airport. According to Springfield-Branson Airport spokesman Kent Boyd, Delta said that that decision was made after careful review of the passenger demand and where they are connecting to and from in regards to the Springfield market place. Delta may have tentative plans to add another daily flight between Springfield and Atlanta in the future, Mr. Boyd told Cheapflights.com. Similarly, officials at the Stewart International Airport have announced that Delta planned to cut back to three daily flights to Atlanta from its current four, and to drop a second flight, blaming rising fuel costs for the cutbacks, Recordonline.com reports. About Delta Air Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE: DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta flies to Argentina, Australia and the United Kingdom, among others. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan. 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 25, 2007, the Court confirmed the Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. (Delta Air Lines Bankruptcy News, Issue No. 105; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DELTA AIR: Cancels Freedom CRJ-900 Delta Connection Agreement ------------------------------------------------------------- Mesa Air Group Inc. received notification from Delta Air Lines, Inc. regarding the airline's plan to terminate Mesa subsidiary Freedom Airlines' CRJ-900 Delta Connection agreement, Mesa disclosed in a statement filed with the Securities and Exchange Commission on Aug. 5. Freedom operates seven CRJ-900 regional jets for Delta Connection, with seven more aircraft scheduled to enter service by May 2009. Mesa subleases the Aircraft from Delta for $1 per month per aircraft, which will be returned to Delta in connection with this termination with no further financial obligation to Mesa. The 14 aircraft will be assigned to other Delta Connection carriers, Delta spokeswoman Betsy Talton told The Associated Press. According to the SEC filing, Delta alleges Freedom's "[failure] to maintain specified operational performance, as outlined in the Contract". "It's more important than ever before that Delta and its Delta Connection partners meet operational and customer service levels," Ms. Talton stated, according to he AP. However, Mesa believes the cancellation is part of Delta's efforts to reduce capacity, coupled with its inability to reduce aircraft at its wholly-owned subsidiary, Comair, without incurring significant ongoing expense. As previously reported, Delta also planned to cancel its flying contract with Freedom with respect to the ERJ-145 Connection Agreement, under which Mesa won a preliminary injunction in the Federal Court in Atlanta, enjoining Delta from terminating the Contract, according to the SEC filing. Mesa Air Group Chairman and CEO Jonathan Ornstein said the regional carrier "intends to vigorously defend its contractual rights . . . as it remains willing to cooperate in the mutual best interests of Delta and Mesa." About Delta Air Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE: DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta flies to Argentina, Australia and the United Kingdom, among others. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan. 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 25, 2007, the Court confirmed the Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. (Delta Air Lines Bankruptcy News, Issue No. 105; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). F&N CONSTRUCTION: Case Summary & 12 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: F&N Construction, Inc. fka F&N Construction, LLC fka Grayjack Coal Corporation P.O. Box 330 Bradley, WV 25818 Bankruptcy Case No.: 08-50215 Type of Business: The Debtor is a general building contractor. Chapter 11 Petition Date: August 10, 2008 Court: Southern District of West Virginia (Beckley) Debtor's Counsel: Michele Mansfield Tysiak (mtysiak@baileyglasser.com) Bailey & Glasser LLP 227 Capitol Street Charleston, WV 25301 Telephone (304) 345-6555 Fax (304) 342-1110 Estimated Assets: $500,000,001 to $100 million Estimated Debts: $10,000,001 to $50 million Debtor's 12 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ D. O'Brien/S. Harrington 375,000 8307 Cazavini Court Raleigh, NC 27613 NovaGen Corp. 200,000 4660 La Jolla Village Drive, Suite 500 San Diego, CA 92122 P&A Engineers 107,820 PO Box 279 Louisa, KY 41230 Alan Susman & CO Davis 50,000 Bundy Auger 42,000 John Grose 35,320 Cedar Trucking 31,000 John Shelton 25,000 REI Consultants 16,809 Central Testing 12,000 Marshall Miller & Associates 7,709 Land & Mapping Services 2,600 FRANK WOODWORTH: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Frank L. Woodworth, Inc. P.O. Box 95 Pittsfield, ME 04967 Bankruptcy Case No.: 08-10797 Chapter 11 Petition Date: Aug. 8, 2008 Court: District of Maine (Bangor) Debtor's Counsel: Thomas M. Brown, Esq. (tbrown@eatonpeabody.com) Eaton Peabody P.O. Box 1210 Bangor, ME 04402-1210 Tel: (207) 947-0111 Total Assets: $2,931,927 Total Debts: $2,153,093 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/meb08-10797.pdf FTI CONSULTING: S&P Affirms 'BB' Rating; Outlook Positive --------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Baltimore, Md.â€“based FTI Consulting Inc. to positive from stable. All ratings, including the 'BB' corporate credit rating, are affirmed. The outlook revision is based on FTI's recent announcement of its intention to sell a minority stake in its technology business through an initial public offering. Sale proceeds from the offering are expected to be between $600 million and $700 million, which the company will use primarily to pay down debt. Total debt outstanding as of June 30, 2008, was $568 million. On Aug. 6, 2008, FTI announced its intention to sell a minority interest in its technology division in an initial public offering (IPO). If the IPO is consummated, the company plans to distribute the remaining interest of the technology division to FTI's stockholders through a spin-off, split-off, or combination of these transactions within 12 months after the completion of the IPO. For the 12 months ended June 30, 2008, the technology division accounts for roughly 17% of FTI's gross revenue and 24% of total EBITDA. During the quarter, the technology segment registered rapid revenue growth of 50% and EBITDA growth of 50% from continued demand related to product liability cases. Despite the loss of this highly profitable division, FTI would still have four practice areas: forensics and litigation, corporate finance/restructuring, economic consulting, and strategic communications. Each segment contributes meaningfully to the company's overall performance. The 'BB' rating reflects FTI's dependence on highly mobile and sought-after senior staff, high acquisition activity, and its position in a competitive marketplace. Its modest business diversity, solid growth rate, and discretionary cash flow partially offset these factors. FTI's performance relies on a group of managing directors with the expertise sought by clients. The loss of any of these senior professionals could result in the loss of some existing engagements and some smaller client relationships. Although the company has been successful in retaining senior professionals, this will remain a key rating factor that S&P will continue to monitor. GLOBAL EDGE: Case Summary & 9 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Global Edge Trading, LLC 3790 PARADISE RD #210 LAS VEGAS, NV 89169 Bankruptcy Case No.: 08-18971 Type of Business: Software development. Chapter 11 Petition Date: Aug. 11, 2008 Court: District of Nevada (Las Vegas) Judge: Hon. Bruce A. Markell Debtor's Counsel: Herbert Sachs, Esq. 819 South Sixth Street Las Vegas, NV 89101 Tel: (702) 384-7999 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A copy of Global Edge Trading, LLC's petition is available for free at http://bankrupt.com/misc/nvb08-18971.pdf INERGY LP: Inks Deal to Acquire US Salt in Upstate New York ----------------------------------------------------------- Inergy, L.P. said its wholly owned subsidiary, Inergy Midstream, LLC, has executed a definitive agreement to purchase 100% of the membership interests in US Salt, LLC, an industry-leading solution mining and salt production company located in Schuyler County, New York, between Inergy's Stagecoach and Steuben County natural gas storage facilities. The transaction is expected to close within the month, subject to customary closing conditions; and it is expected to be immediately accretive to unitholders on a distributable cash flow per unit basis. US Salt is one of five major solution mined salt manufacturers in the United States, producing and selling in excess of 300,000 tons of salt each year. The US Salt operations are complementary and in close proximity to Inergy's existing midstream energy storage platform. The solution mining process used by US Salt creates salt caverns that can be developed into usable natural gas storage capacity. Inergy initially estimates that the acquisition provides access to at least 10 Bcf of additional salt cavern storage capacity which can be interconnected to its existing energy storage platform. Inergy expects to immediately begin developing approximately 5 Bcf of available salt cavern capacity, after receiving necessary regulatory approvals. The initial 5 Bcf of storage capacity is expected to be operational in the fall of 2010. "The acquisition of US Salt accomplishes a lot for our investors on several fronts," said John Sherman, President and CEO of Inergy. "First, the salt business is characterized by stable cash flows and long-term growth potential; and it meets all of our strict acquisition criteria. This transaction also provides us with a long-term pipeline of high-return storage development projects in the heart of the Northeast natural gas distribution infrastructure. In addition, this transaction is yet another example of the successful execution on our plan to build an integrated natural gas storage and transportation hub in the Northeast." Salt Operations US Salt produces food grade salt products, bulk salt for chemical feedstock, and is a market leader in the manufacture of pharmaceutical grade salt. The salt refining capacity is 70% contracted under term agreements. In addition to the salt production operations, Inergy also acquires usable salt cavern capacity for the storage of natural gas, LPGs or other refined products which is the natural by-product of the salt solution mining process. "One of the major hurdles with the development of salt cavern storage in the Northeast is brine disposal. This acquisition provides us a continuous means of brine disposal with limitless expansion possibilities to our overall energy storage platform in the Northeast," said Bill Moler, Senior Vice President of Inergy Midstream. "The acquisition provides us with approximately 10 Bcf of existing cavern space, and every new brine well that we drill creates additional storage capacity." Storage Expansion Inergy has performed pressure tests on a significant sample of the existing salt caverns to confirm the capability for energy storage development. Inergy believes that it will have approximately 5.0 Bcf of initial storage capacity available for development after receiving necessary regulatory approvals. Development of the balance of the existing cavern capacity into storage services will be subject to market demand and further due diligence. The caverns are within close proximity to the Empire Connector Pipeline, NYSEG's intrastate pipeline network, the Millennium Pipeline, Inergy's previously discussed Thomas Corners project, and Teppco's LPG pipeline and storage system. Inergy expects to immediately market these facilities in an open season and continue to pursue its strategy of creating an integrated Northeast gas storage hub. US Salt's New York employee base and its sales and marketing personnel will remain intact. Existing customers of US Salt should expect the same outstanding service and product quality they currently enjoy. The management team of US Salt will continue to lead the company from the combined Kansas City offices of Inergy and US Salt. Upon completion of the acquisition of US Salt and Inergy's subsequent capital investment for the development of the initial 5.0 Bcf of gas storage, Inergy expects the total invested capital to be approximately $191 million. Inergy expects to generate earnings before interest, taxes, depreciation, and amortization (EBITDA) from the combined salt production and gas storage operations of approximately $28.5 million on a run rate basis by the end of fiscal year 2010. Inergy will fund the initial acquisition of US Salt with a combination of borrowings from its revolving credit facility and Inergy, L.P. common units issued directly to the seller. About Inergy Midstream, LLC Inergy Midstream is a wholly owned subsidiary of Inergy L.P. and is headquartered in Kansas City, Missouri. The Company owns and operates Central New York Oil And Gas Company, LLC's Stagecoach natural gas storage facility with 26.35 Bcf of working gas capacity; the Bath LPG Storage facility, a 1.5 million barrel underground salt cavern liquid petroleum gas storage facility; and Arlington Storage Company which includes Thomas Corners, a planned 7 Bcf natural gas storage facility currently being developed and a controlling interest in Steuben Gas Storage Company, a 6.2 Bcf natural gas storage facility. About Inergy, L.P. and Inergy Holdings, L.P. Inergy, L.P. (NASDAQ:NRGY) with headquarters in Kansas City, Mo., is among the fastest growing master limited partnerships in the country. The Company's operations include the retail marketing, sale, and distribution of propane to residential, commercial, industrial, and agricultural customers. Today, Inergy serves approximately 700,000 retail customers from over 300 customer service centers throughout the eastern half of the United States. The Company also operates a natural gas storage business and a supply logistics, transportation, and wholesale marketing business that serves independent dealers and multi-state marketers in the United States and Canada. Inergy Holdings, L.P.'s assets consist of its ownership interest in Inergy, L.P., including limited partnership interests, ownership of the general partners, and the incentive distribution rights. INERGY LP: US Salt Bid Cues S&P to Put BB- Ratings on Watch Neg --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Inergy L.P., including its 'BB-' corporate credit rating, and its ratings on Inergy Finance Corp. on CreditWatch with negative implications. The CreditWatch placement follows the company's announced agreement to acquire solution mining and salt production company U.S. Salt LLC. "While Inergy's storage and midstream energy segments may realize some synergies from the U.S. Salt acquisition, the CreditWatch placement reflects the potential that the acquisition could weaken credit-protection measures to levels below those appropriate for the current rating and imply a higher risk tolerance than previously incorporated into the current rating," said Standard & Poor's credit analyst Michael Grande. S&P expects to resolve the CreditWatch before the end of third- quarter 2008. The rating on Inergy reflects the partnership's weak business risk profile and aggressive financial profile. Rating concerns include the master limited partnership (MLP) structure, an aggressive growth strategy, and exposure to weather, seasonal demand patterns, and changing commodity prices. These concerns are only partially offset by the propane segment's favorable operating characteristics, which include a high percentage of residential customers in attractive markets, and Inergy's natural gas storage operations that provide more stable cash flows. In resolving the CreditWatch listing, S&P expects to meet with management and assess its consolidated risk profile, including the U.S. Salt operations. S&P's review will also incorporate the company's financing plans for the acquisition and potential integration risks. INTERMET CORP: Files for Chapter 11 Bankruptcy in Delaware ---------------------------------------------------------- Intermet Corp. and 19 of its affiliates filed voluntary petitions under Chapter 11 of the Bankruptcy Code before the United States Bankruptcy Court for the District of Delaware, citing low demand for trucks and sport-utility vehicles due to high fuel costs, Bloomberg News reports. According to Bloomberg, the company listed assets of between $50 million and $100 million, and debts of between $100 million and $500 million. The company owes at least $8.6 million to unsecured creditors, the report says. "The downturn in the U.S. auto market has caused a significant decline in the demand for component parts," Bloomberg quoted William H. Whalen, the company's chief financial officer, as saying. "The ferrous segment, which accounts for about 60 percent of Intermet's revenue, is strongly dependent upon the sharply declining truck and SUV markets." Interment, the report notes, joins other auto-parts makers including Lexington Precision Corp., Diamond Glass Inc. Plastech Engineered Products Inc., Progressive Molded Products Inc. and Blue Water Automotive, which filed for Chapter 11 bankruptcy due to rising costs and slowdown in demand. The company's largest customers include Chrysler LLC, Ford Motor Co., Delphi Corp., Honda of America Manufacturing Inc. and Toyota Motor Manufacturing North America, the report says. This is the company's second time to file for bankruptcy in four years, Bloomberg notes. About Interment Corp. Headquartered in Fort Worth, Texas, Intermet Corp. -- http://www.intermet.com/-- designs and manufactures machine precision iron and aluminum castings for the automotive and industrial markets. The company has 12 manufacturing plants in the United States and it has at least 1,700 employees. As reported in the Troubled Company Reporter on Oct. 4, 2004, Intermet Corporation and 17 of its affiliates filed for Chapter 11 protection on Sept. 29, 2004 (Bankr. E.D. Mich. Case No.04-67597). The company's European operations were not included in the Chapter 11 filing. Foley & Lardner LLP represented the Debtors in their restructuring efforts. When the Debtors filed for protection against their creditors, they listed total assets of $735,821,000 and total debts of $592,816,000. As reported in the Troubled Company Reporter on Nov. 10, 2005, Intermet emerged from bankruptcy court protection. In connection with the emergence, the company entered into a $285 million credit facility with Goldman, Sachs & Co., as lead arranger. INTERMET CORPORATION: Case Summary & 20 Largest Unsec. Creditors ---------------------------------------------------------------- Lead Debtor: Intermet Corporation 301 Commerce Street, Suite 2901 Fort Worth, TX 76102 Bankruptcy Case No.: 08-11859 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Alexander City Castin Company, Inc. 08-11860 Cast-Matic, LLC 08-11861 Columbus Foundry, L.P. 08-11862 Diversified Diemakers, LLC 08-11863 Ferrous Metals Group, LLC 08-11864 Ganton Technologies, LLC 08-11865 Intermet Holding Company 08-11866 Intermet Illinois, Inc. 08-11868 Intermet International, Inc 08-11869 Intermet U.S. Holding, Inc. 08-11870 Ironton Iron, Inc. 08-11871 Light Metals Group, LLC 08-11872 Lynchburg Foundry, LLC 08-11873 Northern Castings, LLC 08-11874 SUDM, Inc. 08-11875 Tool Products, LLC 08-11876 Wagner Castings Company 08-11877 Type of Business: The Debtors design and manufacture machine precision iron and aluminum castings for the automotive and industrial markets. See: http://www.intermet.com/ Chapter 11 Petition Date: Aug. 12, 2008 Court: District of Delaware (Delaware) Judge: Kevin Gross Debtor's Counsel: James E. O'Neill, Esq. (jo'neill@pszyj.com) Laura Davis Jones, Esq. (ljones@pszjlaw.com) Timothy P. Cairns, Esq. (tcairns@pszyjw.com) Pachulski Stang Ziehl & Jones LLP 919 N. Market Street, 17th Floor Wilmington, DE 19801 Tel: (302) 652-4100 Fax: (302) 652-4400 Estimated Assets: $50 million to $100 million Estimated Debts: $100 million to $500 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ominsource trade $4,454,044 Attn: Marlene E. Sloat 23679 Network Place Chicago, IL 60673 Tel: (260) 423-8542 Spectro Alloys Corp. trade $997,236 Attn: Don Woessner P.O. Box 90295 Chicago, IL 60696 Tel: (651) 437-2815 Alcoa Inc. trade $477,072 Attn: Greg Heroux Riverview Tower, Ste. 1100 900 South Gay Street Knoxville, TN 37902 Tel: (865) 594-4895 Georgia Power trade $306,804 Attn: Accounts Receivable Georgia Power 68 Annex Atlanta, GA 30368 Tel: (888) 655-5888 Treasurer, City of trade $304,327 Radford Attn: Janet H. Jones Radford, VA 24141 Tel: (540) 731-3601 American Iron trade $259,394 Attn: Paula Wagner 2800 Pacific Street North Minneapolis, MN 55411 Tel: (612) 529-9221 Behr Iron & Steel trade $241,340 Industrial Supply Corp. trade $205,824 American Colloid Co. trade $163,471 Aleris International Inc. trade $162,725 City of Monroe City trade $134,555 ACE American Insurance trade $123,701 Eastern Alloys Inc. trade $120,973 Trans-Man Logistics, Inc. trade $102,599 Hartman Leito & Bolt LLP trade $100,380 Alliance Steel Service Co. trade $94,389 Arrow Cryogenics trade $82,228 Blue Cross Blue Shield trade $79,828 Larpen Metallurgical trade $76,500 Service JAMES BAUR: Case Summary & Six Largest Unsecured Creditors ---------------------------------------------------------- Debtor: James A. Baur aka Jim Baur aka James Alan Baur Michelle Ball Baur aka Karen Michelle Ball 920 1st Street Neptune Beach, FL 32266 Bankruptcy Case No.: 08-04752 Chapter 11 Petition Date: Aug. 11, 2008 Court: Middle District of Florida (Jacksonville) Debtor's Counsel: Albert H. Mickler, Esq., and Bryan K. Mickler, Esq. (court@planlaw.com) 5452 Arlington Expressway Jacksonville, FL 32211 Tel: (904) 725-0822 http://planlaw.com/ Total Assets: $653,740 Total Debts: $1,035,913 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/flmb08-04752.pdf JDA SOFTWARE: S&P Puts 'B+' Corp. Credit Rating on Watch Positive ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B+' corporate credit rating on Scottsdale, Ariz.-based JDA Software Group Inc. on CreditWatch with positive implications. The 'BB-' issue-level rating on the company's secured loan, as well as the recovery rating of '2' on this debt, indicating the expectation for substantial (70% to 90%) recovery in the event of a payment default, was affirmed. The CreditWatch listing follows the announced acquisition of unrated Dallas, Texas-based I2 Technologies Inc. for a net purchase price of $346 million. JDA's secured debt is expected to be refinanced at closing. The combination adds discrete manufacturing to JDA's product offerings and complements its process manufacturing, retail, and transportation management presence. Pro forma revenues will grow to about $635 million (from $378 million for the trailing-12-month period), with recurring annual service and subscription fees comprising about $300 million of that amount. To finance the transaction, JDA received commitments for up to $450 million of debt financing, including $425 million in term loans and a $25 million revolving credit facility, which will be used to replace the company's existing debt. "Although pro forma debt to EBITDA will rise to the 4.0x area (including operating leases and preferred stock) from 1.5x, the acquisition provides additional scale and should help JDA realize cost synergies through higher utilization and rationalization of the combined sales, product development, and service organizations," said Standard & Poor's credit analyst Phil Schrank. "In addition, we expect acquisitions to be modest over the near term, as JDA's focus will be on reducing acquisition- related debt. Incorporated into the CreditWatch listing is our belief that the company will maintain a financial policy of managing its total debt to EBITDA at less than 4.0x over the intermediate term, including debt incurred for opportunistic acquisitions." Standard & Poor's will meet with management to review JDA's integration plan and business and financial strategies, as well as assess the sustainability of its current operating trends, prior to resolving the CreditWatch listing. LANDSOURCE COMMUNITIES: Ex-Governer Davis to Provide Legal Advice ----------------------------------------------------------------- Former California Gov. Gray Davis said his firm, Loeb & Loeb LLP, has been retained by LandSource Communities Development LLC to provide strategic legal advice. Loeb & Loeb will meet with various homeowners, civic and governmental entities and seek a resolution of potential objections regarding the Newhall Ranch Development project. Loeb & Loeb, according to Mr. Davis, previously provided prepetition services to the Debtors and is owed $32,665. According to Santa Clarita, California-based paper, The Signal, the firm was retained by LandSource for accounting and legal services in November 2006. Mr. Davis, according to reports, served as governor of California from 1999 to 2003. He joined Los Angeles-based Loeb after losing in the election to actor Arnold Schwarzenegger. About LandSource Communities LandSource Communities Development LLC, which operates in Arizona, California, Florida, New Jersey, Nevada and Texas, is involved in the planning and development of master planned communities and transforming undeveloped land into ready-to-build home sites and commercial properties. With the exception of one development project in Marina del Rey, California, LandSource does not build homes or commercial properties. LandSource and 20 of its affiliates filed for chapter 11 bankruptcy protection before the U.S. Bankruptcy Court for the District of Delaware on June 8, 2008 (Lead Case No. 08-11111). The Debtors are represented by Marcia Goldstein, Esq., at Weil Gotshal & Manges in New York, and Mark D. Collins, Esq., at Richards Layton & Finger in Wilmington, Delaware. Lazard Freres & Co. acts as the Debtors' financial advisors, and Kurtzmann Carson Consultants serves as the Debtors' notice and claims agent. According to the Troubled Company Reporter on May 22, 2008, LandSource sought help from its lender consortium to restructure $1.24 billion of its debt. LandSource engaged a 100-bank lender group led by Barclays Capital Inc., which syndicates LandSource's debt. LandSource had received a default notice on that debt from the lender group after it was not able to timely meet its payments during mid-April. However, LandSource failed to reach an agreement with its lenders on a plan to modify and restructure its debt, forcing it to seek protection from creditors. The Debtors' exclusive plan filing period expires on Oct. 6, 2008. (LandSource Bankruptcy News, Issue No. 8; http://bankrupt.com/newsstand/or 215/945-7000). LEVITT AND SONS: Wachovia, et al. Balk at Disclosure Statement -------------------------------------------------------------- Before the Proponents of the Reorganization Plan of Levitt and Sons LLC and its debtor-affiliates filed a liquidation analysis and a copy of the Woodbridge Settlement to the U.S. Bankruptcy Court for the Southern District of Florida, a number of banks and homeowner associations delivered to the Court their objections to the Disclosure Statement filed by the Debtors and the Official Committee of Unsecured Creditors. These entities include: 1. Regions Bank; 2. Wachovia Bank, National Association; 3. Donald F. Walton, as United States Trustee for Region 21; 4. Bank of America, N.A.; 5. The Cascades at River Hall Residents' Association, Inc.; 6. Cascade Lakes Residents Association, Inc.; 7. Cascades at Estero Residents' Association, Inc.; 8. Cascades at St. Lucie West Residents' Association; 9. Chicago Title Insurance Company; and 10. The Home Purchase Deposit Creditors Deposit Holders Committee. Soneet R. Kapila, as chief administrator of the Wachovia Debtors, joined in Wachovia Bank's objection. In separate filings, the Objectors argued that the Disclosure Statement failed to provide adequate information, which would allow a claim holder to make an informed judgment about the Plan. The Objectors thus ask the Court to deny approval of the Disclosure Statement. The Objectors are concerned that: (a) The Disclosure Statement does not contain adequate information regarding the Debtors' assets, or any asset analysis. Among other things, the Debtors that own or have an interest in the Assets are not disclosed, and there is no description or information regarding what the Debtors anticipate the "Property on the Confirmation Date" will be, the Objectors pointed out. (b) The Disclosure Statement does not contain adequate information regarding claims against the Debtors or any claims analysis. An estimate of the total claims against all Debtors is not adequate, the Objectors contended. Among other things, the Disclosure Statement does not contain any information regarding administrative expenses that have been incurred or an estimate of administrative claims that will be incurred through confirmation of the Plan, nor any information regarding priority claims. (c) The Disclosure Statement does not contain any liquidation analysis. (d) The Disclosure Statement does not contain adequate information regarding the Plan Administrator. The Plan only names James S. Feltman as the Plan Administrator. No other information is provided in the Disclosure Statement. (e) The Disclosure Statement does not contain adequate information regarding the factual bases for the substantive consolidation of the Debtors or the effect of the substantive consolidation. Among other things, the benefits to be achieved or the harms to be avoided by the substantive consolidation are not identified, and the Disclosure Statement does not provide adequate information concerning the distribution of the $3,000,000 "Guaranteed Amount." (f) The Disclosure Statement does not contain adequate information regarding the release to be provided and the injunction to be issued. Among other things, certain provisions should be revised to clarify that the release does not include prepetition acts or omissions of the Debtors' officers and directors, and that actions against non-debtors or assets that are not Post-Confirmation Debtor Assets are not enjoined. The Plan and Disclosure Statement should also be revised to clarify whether the releasing parties -- Holders of Claims or Equity Interests -- are limited to creditors who have filed proofs of claim and will receive distributions on their allowed claims, or whether these terms encompass all potential claimants. (g) The Disclosure Statement lacks adequate information on the Woodbridge Settlement. A copy of the settlement is not attached to the Disclosure Statement, according to the Objectors. Among other things, the Disclosure Statement fails to disclose in detail the nature of either the Debtors' claims against Woodbridge or Woodbridge's claims against the Debtors. It also does not provide information as to why the Plan Proponents believe a third-party release is appropriate under the circumstances. (h) Any language regarding indemnification for professional, including post-confirmation professional in the Plan and Disclosure Statement should be stricken as inappropriate. There is no basis to provide that protection. Wachovia Bank relates that it has certain claims and causes of action against Woodbridge Holdings Corporation, formerly Levitt Corporation, and will likely object to any release or injunction of its claims against Woodbridge through the settlement. The U.S. Trustee points out that the Debtors are liquidating and there has been no authority cited for the proposition of granting third-party releases in a liquidating case. The Depositors Committee also seeks the appointment of a Deposit Holders Administrator to act as the estate representative for Depositors in their pursuit of claims against the Florida Construction Recovery Fund, and potentially against third parties. Ami Haley and Nancy Wells, and Robert and Linda Steil also oppose approval of the Disclosure Statement. The Steils seek the refund of certain taxes on a home they purchased from the Debtors. Msses. Haley and Wells relate that they have a pending litigation against the Debtors. However, they note, the Disclosure Statement failed to list Levitt & Sons, LLC and Levitt Construction East, LLC, as being affected by the pending Haley/Wells litigation. About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors have filed a Chapter 11 joint plan of liquidation. (Levitt and Sons Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) LEVITT AND SONS: Wants to Hire Moecker Auctions as Auctioneer ------------------------------------------------------------- Levitt and Sons LLC and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of Florida to employ Moecker Auctions, Inc., as their auctioneer. The Debtors own certain computers and related equipment located at their corporate office at 2200 West Cypress Creek Road, in Lauderdale, Florida. The Debtors are scheduled to vacate their corporate headquarters in the near future and has no need to maintain the Computer Equipment, Leslie Gern Cloyd, Esq., at Berger Singerman, P.A., in Miami, Florida, relates. The Debtors previously obtained the Court's approval to sell the Computer Equipment. They now seek the retention of an auctioneer to facilitate an auction of the equipment. According to Ms. Cloyd, Moecker is licensed and bonded as an auctioneer and is authorized to conduct auctions in the State of Florida, pursuant to Section 468.381 et seq. of the Florida Statutes. The firm has posted an annual blanket bond of $1,000,000, which is an amount greater than the expected revenues from the auction, she says. Pursuant to the terms of the retention agreement with the Debtors, Moecker will be paid based on a customary buyers' premium of 15%, to be paid at the sale by each individual buyer. Moecker will not seek any commissions from the estate, Ms. Cloyd informs the Court. The Debtors will also reimburse the firm for its out-of-pocket costs for advertising, marketing and conducting the auction, which are estimated to be total $5,600. Upon completion of the auction, Moecker will file a report summarizing the results of the auction and stating the firm's fees and expenses. The report will be served on the United States Trustee, the Debtors, counsel to the Official Committee of Unsecured Creditors and any other interested party requesting a copy of the report. Relevant fees and expenses will be paid to Moecker without the necessity of further notice or hearing unless a party-in-interest files an objection within 10 days from the filing of the Auction Report. Eric Rubin, an officer of Moecker, assures the Court that neither his firm nor any of its officers or directors have any connection with the Debtors, their estates or the U.S. Trustee. Moecker is a disinterested person, within the meaning of Section 327(a) of the U.S. Bankruptcy Code, he asserts. About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors have filed a Chapter 11 joint plan of liquidation. (Levitt and Sons Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) LSP BATESVILLE: S&P Cuts Senior Secured Bonds Ratings to 'B' ------------------------------------------------------------ Standard & Poor's Ratings Services lowered the rating on LSP Batesville Funding Corp.'s $150 million of senior secured bonds and $176 million of senior secured bonds to 'B' from 'B+'. In addition, Standard & Poor's assigned '3' recovery ratings to the bonds, indicating expectation of meaningful recovery (50%-70%) in the event of default. The outlook is stable. The downgrade follows sustained financial performance below expectations (resulting from forced outages on two of the project's three combined-cycle units) and continued pressures on revenues from the legacy effect of the steam turbine outage on Unit 2 in August 2007. Under the power purchase agreement with J. Aron, contract availability is determined on a 12-month rolling average. As a result of the August outage, the monthly contract availability for Unit 2 has averaged 81.6% year to date through the second quarter (though there were only three forced outage hours for the entire facility during the quarter). The low contract availability has had a continued negative effect on revenues that are expected to decrease over the next four months and roll off in December 2008. Increased legal fees, maintenance costs associated with the outage, and continued lower payments from J. Aron due to the call option buyback (under the PPA) on the its portion of the facility have all combined to pressure margins further. Debt service coverage as calculated by Standard & Poor's (operating revenues less operating costs over cash interest and principal payments) was 0.42x for the trailing 12 months as of the first quarter (vs. 0.56x for 2007). The six-month debt service reserve remains fully funded. Though many of these credit negative events are conceivably one- time events, S&P believes the credit quality of the plant has deteriorated as operational issues have persisted over a sustained period of time. Looking forward, the plant is expected to experience an improvement in revenues as the effects of the Unit 2 outage roll off. However, contributions to the major maintenance reserve in anticipation of payments owed Siemens under the long term parts (LTP) agreement, combined with the ongoing effect of the call option repurchase, are expected to keep coverage ratios between 1.02x and 1.05x through 2013. If the plant experiences additional outages, coverage ratios could deteriorate further. The project has mitigated maintenance costs somewhat through the LTP agreement with Siemens, and coverage ratios are expected to be low (1.02x-1.05x) but stable over the next five years. If continued operational problems result in additional forced outage penalties, foregone revenues, or higher operating costs, S&P could downgrade the rating. During the fully contracted period for the project (through 2013), upside potential is limited. L&M PRESSWORKS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: L&M Pressworks, LLC 1187 E. 68th Avenue Denver, CO 80229 Bankruptcy Case No.: 08-21966 Type of Business: The Debtor provides printing and marketing services. See: http://www.lmpressworks.com/ Chapter 11 Petition Date: Aug. 11, 2008 Court: District of Colorado (Denver) Judge: Sidney B. Brooks Debtor's Counsel: Jeffrey Weinman, Esq. (jweinman@epitrustee.com) William A. Richey, Esq. (lkraai@weinmanpc.com) Weinman Associates P.C. 730 17th St., Ste. 240 Denver, CO 80202 Tel: (303) 572-1010 Estimated Assets: Less than $50,000 Estimated Debts: $1 million to $10 million A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/cob08-21966.pdf MAXXAM INC: June 30 Balance Sheet Upside-Down by $306.3 Million --------------------------------------------------------------- MAXXAM Inc.'s consolidated balance sheet at June 30, 2008, showed $469.8 million in total assets and $776.1 million in total liabilities, resulting in a $306.3 million stockholders' deficit. The company reported a net loss of $12.7 million on sales of $23.3 million for the second quarter ended June 30, 2008, compared to a net loss of $6.7 million on sales of $23.3 million for the same period a year ago. The company's results for the three and six months ended June 30, 2008, were negatively impacted by a slowdown in the real estate markets in which the company operates and impairment charges related to its investment portfolio resulting from issues in global credit and capital markets. Included in net losses for the second quarter of 2008 is a $3.7 million impairment charge related to the company's investment portfolio and a $3.4 million benefit related to stock-based compensation resulting from fluctuations in the market price of the company's common stock. For the first six months of 2008, MAXXAM reported a net loss of $26.6 million, compared to a net loss of $19.0 million for the same period of 2007. Sales for the first six months of 2008 were $45.0 million, compared to $52.0 million for the first six months of 2007, reflecting a downturn in the real estate market. The company's net loss for the six months ended June 30, 2008, also reflects an aggregate $5.5 million impairment charge related primarily to the company's investments in auction rate securities. Real Estate Operations Total real estate sales operating results declined for the three months and six months ended June 30, 2008, as compared to the same periods in 2007, primarily due to a reduction in lot sales at the company's Fountain Hills project and an increase in the deferral of revenues at its Mirada project. The reduction of lot sales at Fountain Hills is due primarily to decreased demand and increased foreclosure rates, which increased the number of available properties on the market, in the greater Phoenix area, and the current credit crisis affecting the entire United States. As lots at Mirada are substantially sold out, the company does not anticipate receiving significant future revenues from the property. Resort operations at the company's Palmas development were negatively impacted by a general economic recession in Puerto Rico. Investment, interest and other income reflects an impairment charge related to investments in auction rate securities and lower earnings from the company's real estate joint ventures. Racing Operations Net sales increased slightly for the company's racing operations in the second quarter of 2008 as declines in wagering revenues were offset by increased revenues resulting from the expanded summer concert series at Sam Houston Race Park. Operating losses of $2.7 million for the second quarter of 2008 increased from $1.8 million in the prior year period, principally due to increased operating expenses related to the expanded summer concert series at Sam Houston Race Park. Corporate and Other The corporate segment's operating losses represent general and administrative expenses that are not specifically attributable to the company's operating segments. The corporate segment's operating losses improved $1.8 million in the second quarter of 2008, as compared to the prior year period, primarily due to changes in stock-based compensation expense resulting from fluctuations in the market price of the company's common stock. Consolidated investment, interest and other income was a loss of $3.8 million in the second quarter of 2008, as compared to income of $1.2 million in the prior year period, primarily due to impairment charges of $5.5 million related to other than temporary declines in the value of the Company’s investment portfolio. Reorganization Proceedings of Palco and its Wholly Owned Subsidiaries The Pacific Lumber Company (Palco) Palco and its five wholly owned subsidiaries, including Scotia Pacific Company LLC (Scopac), filed in January 2007separate voluntary petitions in the United States Bankruptcy Court for the Southern District of Texas for reorganization under Chapter 11 of the Bankruptcy Code. On July 8, 2008, the Court confirmed the MRC/Marathon Plan, a plan of reorganization that had been filed by Palco's principal creditor and a third party. Following further bankruptcy and appellate court proceedings, the MRC/Marathon Plan was consummated on July 30, 2008. Under the MRC/Marathon Plan, the debtor companies were reorganized and continued under two new companies, with substantial cash payments being made to all of the creditor classes other than Palco's principal creditor. The consummation of the MRC/Marathon Plan resulted in the loss entirely of the company's indirect equity interest in Palco and its subsidiaries, including Scopac. The company received cash consideration of $3.5 million at the time the MRC/Marathon Plan was consummated. Various parties have filed an appeal of the confirmation order with the Fifth Circuit Court of Appeals. It is possible that the MRC/Marathon Plan could be overturned and unwound as a result of the pending appeal. Were that to occur, thecCompany would be required to return $2.25 million of the cash consideration referred to above and the assumption of the Palco pension plan by the reorganized entity would no longer be effective. The company will reevaluate the accounting treatment of its investment in the Debtors in the third quarter of 2008. The company expects it will reverse all or a portion (depending on the status of the appeal) of its investment in the Debtors, including the related tax effects, in the third quarter of 2008. Other Matters In March 2008, the company purchased 687,480 shares of its common stock from two affiliated institutional holders in a privately negotiated transaction for an aggregate cost of $20.1 million. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2008, are available for free at http://researcharchives.com/t/s?309b About MAXXAM Inc. Headquartered in Houston, MAXXAM Inc. (AMEX: MXM) is a publicly- traded company, with business interests in three industries: forest products, real estate investment and development and racing operations. Going Concern Doubt As reported in the Troubled Company Reporter on May 9, 2008, Deloitte & Touche LLP, in Houston, expressed substantial doubt about MAXXAM Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The company's two operating segments incurred operating losses in 2007 and in the first six months of 2008. In addition, the company also has material uncertainties as a result of the bankruptcy cases. MEDIACOM COMMS: June 30 Balance Sheet Upside-Down by $282.8MM ------------------------------------------------------------- Mediacom Communications Corp. disclosed Thursday its financial results for the three and six months ended June 30, 2008. At June 30, 2008, the company's consolidated balance sheet showed $3.66 billion in total assets and $3.94 billion in total liabilities, resulting in a $282.8 million stockholders' deficit. The company's consolidated balance sheet at June 30, 2008, also showed strained liquidity with $145.0 million in total current assets available to pay $440.4 million in total current liabilities. The company reported net income of $20.9 million for the three months ended June 30, 2008, compared to a net loss of $6.6 million for the prior year period. Revenues rose 7.6% to $349.5 million, largely attributable to growth in high-speed data and phone customers and an increase in video revenues. Revenue generating units grew 8.0%, and average total monthly revenue per RGU was flat year-over-year. Adjusted operating income before depreciation and amortization (Adjusted OIBDA) increased 9.1% to $130.1 million, due to growth in HSD, phone and video revenues, offset in part by higher service costs and selling, general and administrative expenses. Operating income grew 13.7% to $69.3 million, due to the increase in Adjusted OIBDA, offset in part by higher depreciation and amortization. "We delivered another quarter of solid results despite a flat advertising sales market" said Rocco B. Commisso, Mediacom's chairman and chief executive officer. "Our RGU growth was a record for any second quarter in the company's history, due in part to the lowest basic subscriber loss for any comparable period since 2001. Given our performance thus far, together with our outlook for the balance of 2008, we feel comfortable raising external guidance for the second time this year. "This year we stepped up the capital investments in our network and delivery systems, not only to enrich the customer experience, but to maintain our competitive edge and capitalize on the opportunities of the digital transition. Fortunately, against the backdrop of difficult conditions in the credit markets, we are well-positioned financially to invest in our future, with more than $900.0 million of available lines of credit, and having achieved the lowest balance sheet leverage in seven years," concluded Mr. Commisso. Video revenues grew 2.3% from the second quarter of 2007, largely due to basic video rate increases and customer growth in the company's advanced video products and services, partially offset by a lower number of basic subscribers. During the quarter, the Ccmpany lost 5,000 basic subscribers, compared to a reduction of 18,000 for the same period last year. During the quarter, digital customers grew by 15,000, compared to an increase of 2,000 in the prior year period, ending the quarter with 599,000 customers, or 45.3% penetration of basic subscribers. As of June 30, 2008, 32.2% of digital customers were taking DVR and/or HDTV services, up from 26.5% at the end of the prior year period. High-speed data revenues rose 15.4%, primarily due to a 14.5% year-over-year increase in unit growth. During the quarter, high- speed data customers grew by 14,000, as compared to a gain of 13,000 in the prior year period, ending the quarter with 702,000 customers, or 24.7% penetration of estimated homes passed. Phone revenues grew 67.1%, mainly due to a 54.2% year-over-year increase in unit growth. During the quarter, phone customers grew by 18,000, compared to a gain of 21,000 in the prior year period, ending the quarter with 222,000 customers, or 8.6% penetration of estimated marketable phone homes. As of June 30, 2008, Mediacom Phone was marketed to 91% of the company's 2.84 million estimated homes passed. Advertising revenues were essentially flat year-over-year, largely as a result of an increase in local advertising, offset by a decrease in national advertising. Total operating costs grew 6.8%, primarily due to increases in programming unit costs and expenses related to the corresponding growth in the company's phone customers, offset in part by a reduction in high-speed data delivery costs. Free Cash Flow Free cash flow was a positive $12.6 million for the six months ended June 30, 2008, as compared to a negative $4.2 million in the prior year period. Financing Transactions On May 29, 2008, the company entered into an incremental credit facility agreement that provides for a new term loan in the principal amount of $350.0 million. Approximately $335.0 million of the proceeds from the new term loan were used to repay the outstanding balance of the revolving credit portion of an existing credit facility, without any reduction in the revolving credit commitments. The balance of the proceeds from the new term loan was used for general corporate purposes. Borrowings under this new term loan bear interest at a floating rate or rates equal to LIBOR or the prime rate, plus a margin of 3.50% for LIBOR loans and a margin of 2.50% for prime rate loans. For the first four years of the new term loan, LIBOR and the prime rate applicable to the new term loan are subject to a minimum of 3.00% in the case of LIBOR and a minimum of 4.00% in the case of the prime rate. The new term loan matures on Jan. 3, 2016. Financial Position At June 30, 2008, the company had total debt outstanding of $3.25 billion, an increase of $34.0 million from year-end 2007. As of the same date, the company had unused credit facilities of $903.0 million, all of which could be borrowed and used for general corporate purposes based on the terms and conditions of the company's debt arrangements. As of Aug. 7, 2008, about 68.5% of the company's total debt was at fixed interest rates or subject to interest rate protection. Stock Repurchase Program and Activity During the six months ended June 30, 2008, the company repurchased approximately 4.8 million shares of its Class A Common Stock for an aggregate cost of $22.4 million. At June 30, 2008, the company had approximately 94.6 million shares of Class A and Class B common stock outstanding, and $47.6 million was available under the company's stock repurchase program. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2008, are available for free at http://researcharchives.com/t/s?30a9 About Mediacom Communications Based in Middletown, New York, Mediacom Communications Corporation (Nasdaq: MCCC) -- http://www.mediacomcc.com/-- is a cable television company focused on serving the smaller cities and towns in the United States. The company offers a wide array of broadband products and services, including traditional video services, digital television, video-on-demand, digital video recorders, high-definition television, high-speed Internet access and phone service. * * * As disclosed in the Troubled Company Reporter on June 3, 2008, Fitch Ratings affirmed the 'B' Issuer Default Rating for Mediacom Communications Corporation and its wholly owned subsidiaries Mediacom LLC and Mediacom Broadband LLC. In addition Fitch assigned a 'BB/RR1' rating to Mediacom Broadband LLC's $300 million incremental term loan E. Lastly, Fitch has upgraded Mediacom LLC's senior unsecured debt to 'B-/RR5' from 'CCC+/RR6'. Approximately $3.2 billion of debt as of March 31, 2008 is affected. The Rating Outlook for all of Mediacom's ratings is Stable. As reported in the Troubled Company Reporter on March 6, 2008, Moody's Investors Service affirmed its 'B1' corporate family rating for Mediacom Communications Corp.. The rating outlook remains stable. MEDICURE INC: Continues to Explore Ways to Strengthen Finances -------------------------------------------------------------- Medicure Inc., a cardiovascular-focused biopharmaceutical company, provided an update on its cash position and commercial operations. As a result of the ongoing restructuring and numerous cost containment endeavors, the Company now expects its cash position will be sufficient to fund operations to the end of calendar 2008. The Company is currently exploring further alternatives for strengthening its financial position. "I am pleased that the Company has been able to reduce its expenses while still preserving and seeing some positive signs in its AGGRASTAT business," commented Medicure's President and CEO, Albert D. Friesen, PhD. "Although we have dramatically reduced our clinical and R&D headcount we have retained a strong core team of people with the capabilities to pursue preclinical and clinical development opportunities involving new potential applications of MC-1, both cardiovascular and non-cardiovascular, and our portfolio of novel antithrombotic small molecules." About Medicure Inc. Medicure Inc is a biopharmaceutical company focused on the research, development and commercialization of novel compounds to treat cardiovascular disorders. Cardiovascular medicine represents the largest pharmaceutical sector, with annual global sales of over US $70 billion. Medicure aims to make a global impact on cardiovascular disease and stroke by reducing deaths, improving the quality of life and serving the unmet needs of people who suffer from cardiovascular disease and stroke. The company incurred recurring losses in four consecutive quarters: (i) CDN$16.94 million net loss in quarter ended Nov. 30, 2007; (ii) CDN$15.08 million net loss in quarter ended Aug. 31, 2007; (iii) CDN$13.99 million net loss in quarter ended May 31, 2008; and CDN$8.36 million net loss in quarter ended Feb. 28, 2007. Medicure Inc.'s consolidated balance sheet at Feb. 29, 2008, showed C$39,801,126 in total assets and C$43,708,690 in total liabilities, resulting in a C$3,907,564 total stockholders' deficit. Going Concern Doubt The company believes existing conditions raise substantial doubt about its ability to continue as a going concern. The company has experienced operating losses and cash outflows from operations since incorporation, and has accumulated a deficit of C$132,528,447 as at Feb. 29, 2008. In addition the company announced in March 2008 that it will undergo significant corporate restructuring stemming from the unfavourable results of the Phase 3 MEND-CABG II trial. This restructuring includes the significant reduction in numbers of staff and in resources allocated to certain programs. Based on the company's operating plan, its existing working capital is not sufficient to meet the cash requirements to fund the company's currently planned operating expenses, capital requirements, working capital requirements and long-term debt obligations through the first quarter of fiscal 2009 without additional sources of cash or deferral, reduction or elimination of significant planned expenditures. MERRILL LYNCH TRUST: S&P Affirms BB, B Ratings on Five Classes -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 26 classes of commercial mortgage pass-through certificates from Merrill Lynch Mortgage Trust 2005-CKI1. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. As of the July 14, 2008, remittance report, the collateral pool consisted of 169 loans with an aggregate trust balance of $3.018 billion, compared with 169 loans totaling $3.074 billion at issuance. The master servicer, KeyCorp Real Estate Capital Markets Inc., reported financial information for 99.7% of the pool. Ninety-two percent of the servicer-provided information was full- year 2007 data. Excluding the defeased loans ($96.8 million, 3.2%), Standard & Poor's calculated a weighted average debt service coverage (DSC) of 1.89x for the pool, up from 1.63x at issuance. There are seven loans (2%) with reported DSCs lower than 1.0x. These loans are secured by retail, office, and multifamily properties with an average balance of $10.4 million. Of the seven loans with reported DSCs less than 1.0x, four have mitigating factors that offset the low coverage, and we stressed the remaining three loans in our analysis. None of the loans in the pool are currently with the special servicer or delinquent, and the trust has experienced no losses to date. The top 10 loans have an aggregate outstanding balance of $1.205 billion (39.9%) and a weighted average DSC of 2.04x, up from 1.95x at issuance. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 exposures. All of the properties were characterized as "good." At issuance, four loans had credit characteristics consistent with those of investment-grade obligations. The four loans all retain credit characteristics of investment-grade obligations. Details of the two largest of these loans are: -- The third-largest exposure in the pool, the Glendale Galleria loan, has a trust balance of $147.3 million (5%) and a whole-loan balance of $354.2 million. The whole loan consists of two pari passu notes, with a $147.3 million A-1 note that serves as the trust collateral, a $120.6 million A-2 note that is included in Merrill Lynch Mortgage Trust 2005-LC1, and $86.3 million of B and C notes that are held outside of the trust. In addition to the loan included in the trust, there is a $30 million mezzanine loan secured by a pledge of equity interests in the borrower that is held outside the trust. The whole loan is secured by 850,671 sq. ft. of a 1.3 million-sq.-ft. enclosed mall and an adjacent 145,458-sq.-ft. 12-story office tower in Glendale, Calif. The servicer reported a 2.01x DSC at year-end 2007, up from 1.88x at issuance. As of Dec. 31, 2007, the property was 93% occupied overall, compared with 91% at issuance. Standard & Poor's adjusted net cash flow (NCF) for this loan is comparable to its level at issuance. -- The fifth-largest exposure in the pool, the International Home Furnishings Center, has a loan balance of $35.8 million (3.8%). In addition to the loan included in the trust, there is a $25 million mezzanine loan secured by a pledge of equity interests in the borrower that is held outside the trust. The loan is secured by the fee interest in a 2.7 million-sq.-ft. furniture exhibition center in High Point, N.C. For the year ended Dec. 31, 2007, DSC was 5.93x, down from 6.16x at issuance. Standard & Poor's adjusted NCF was down slightly from issuance, reflecting higher operating expenses. KeyCorp reported a watchlist of 15 loans ($310.4 million, 10.3%). Louisiana Boardwalk ($128.0 million, 4.2%) is the largest loan on the watchlist. The loan is secured by a 544,175-sq.-ft. lifestyle center in Bossier City, La. The property was constructed in 2004 and 2005, and as of Dec. 31, 2007, it was 100% occupied. The loan appears on the watchlist because of a legal dispute over a small section of unimproved land. The prior owner of the land is claiming that the borrower and the city took the property unfairly. The second-largest loan on the watchlist is the Theraldson Portfolio IIIA ($49.1 million, 1.6%). The loan is secured by a portfolio of 16 hotels comprising 1,169 rooms. The loan appears on the watchlist because of the Federal Emergency Management Agency's response to tornadoes in the vicinity of at least one of these hotels. The master servicer reported that the tornadoes did not damage the collateral. The remaining loans appear on the watchlist primarily because of low occupancy or declines in DSC since issuance. Standard & Poor's stressed the loans on the watchlist and the other loans with credit issues as part of its analysis. The resultant credit enhancement levels support the affirmed ratings. RATINGS AFFIRMED Merrill Lynch Mortgage Trust 2005-CKI1 Commercial mortgage pass-through certificates series 2005-CKI1 Class Rating Credit enhancement (%) A-1 AAA 30.56 A-1D AAA 30.56 A-2 AAA 30.56 A-2FL AAA 30.56 A-3 AAA 30.56 A-4FL AAA 30.56 A-5 AAA 30.56 A-SB AAA 30.56 A-6 AAA 30.56 A-1A AAA 30.56 A-M AAA 20.37 A-J AAA 12.61 B AA 10.82 C AA- 9.93 D A 8.15 E A- 7.13 F BBB+ 5.35 G BBB 4.33 H BBB- 3.18 J BB+ 2.93 K BB 2.55 L BB- 2.16 M B+ 2.04 N B 1.78 P B- 1.40 X AAA N/A N/A-Not applicable. MICHAEL VICK: Proposed Financial Adviser Accused of Swindling ------------------------------------------------------------- The man that former NFL star Michael Vick picked to help him in his bankruptcy filing was accused of helping swindle more than $500,000 from church members in New Jersey, reports Online Athens (Georgia). According to the report, Mr. Vick's lawyer, said a motion will be filed in bankruptcy court to withdraw a request to have David A. Talbot named as financial adviser in the bankruptcy case. Mr. Talbot is facing the accusations with two other men. Mr. Vick filed for Chapter 11 bankruptcy protection last month. Mr. Talbot, who is facing a history of financial troubles, filed for bankruptcy protection in 2002. A judge dismissed the petition later that year. The financial issues were not disclosed in Mr. Vick's case, the report said. Michael Dwayne Vick, born June 26, 1980 in Newport News, Virginia, is a suspended National Football League quarterback under contract with the Atlanta Falcons team. In 2007, a U.S. federal district court convicted him and several co-defendants of criminal conspiracy resulting from felonious dog fighting and sentenced him to serve a 23 months in prison. He is being held in the United States Penitentiary at Leavenworth, Kansas. Mr. Vick is also under indictment for two related Virginia state felony charges for his role in the dogfighting ring and related gambling activity. His state trial has been delayed until he is released from federal prison. He faces a maximum 10-year state prison term if convicted on both counts. Mr. Vick filed his chapter 11 petition on July 7, 2008 (Bankr. E.D. Va. Case No. 08-50775). Dennis T. Lewandowski, Esq., and Paul K. Campsen, Esq., at Kaufman & Canoles, P.C., represent the Debtor in his restructuring efforts. Mr. Vick listed assets of $10 million to $50 million and debts of $10 million to $50 million. MOLINA HEALTHCARE: Best Lifts and Affirms Ratings on Subsidiaries ----------------------------------------------------------------- A.M. Best Co. has upgraded and affirmed the financial strength ratings and issuer credit ratings of the health maintenance organization subsidiaries of Molina Healthcare, Inc. (Long Beach, CA). These ratings are based solely upon public information and present the most informed view A.M. Best can offer, short of an insurer participating in the full interactive rating process. A.M. Best uses the same rating scale and definitions as it does for its long-term financial strength interactive ratings but applies a pd modifier to ensure the user is aware of the more limited information basis for the rating. Molina's HMO ratings reflect its various companies' sufficient level of capitalization, mostly favorable underwriting performance and relatively consistent operating results. In addition, the recent acquisition of Mercy CarePlus will allow Molina to expand its operations into Missouri. Offsetting rating factors include a reliance on government sponsored programs, which A.M. Best believes could pose future profitability challenges for the organization should reimbursement rates be cut. -- The FSR of B pd (Fair) and ICR of "bb" have been affirmed for Molina Healthcare of Washington, Inc. -- The FSR has been upgraded to B- pd (Fair) from C++ pd (Marginal) and the ICR to "bb-" from "b" for Molina Healthcare New Mexico. -- The FSR of B- pd (Fair) and ICR of "bb-" have been affirmed for Alliance for Community Health, LLC (dba Mercy CarePlus). -- The FSR has been upgraded to C++ pd (Marginal) from C+ pd (Marginal) and the ICR to "b" from "b-" for Molina Healthcare of California, Inc. -- The FSR of C++ pd (Marginal) and ICR of "b" have been affirmed for Molina Healthcare of Michigan, Inc. -- The FSR of C+ pd (Marginal) and ICR of "b-" have been affirmed for Molina Healthcare of Utah, Inc. MONICA WITT: Case Summary & 17 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Monica M. Witt 4009 West Soundside Road Nags Head, NC 27959 Bankruptcy Case No.: 08-05397 Chapter 11 Petition Date: Aug. 11, 2008 Court: Eastern District of North Carolina (Wilson) Judge: Hon. J. Rich Leonard Debtor's Counsel: Trawick H Stubbs, Jr., Esq. Stubbs & Perdue, P.A. P. O. Drawer 1654 New Bern, NC 28563 Tel: (252) 633-2700 Fax : 252 633-9600 Email: efile@stubbsperdue.com Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A copy of Monica M. Witt's petition is available for free at: http://bankrupt.com/misc/nceb08-05397.pdf MONITOR OIL: Files Chapter 11 Plan And Disclosure Statement ----------------------------------------------------------- Monitor Oil PLC and its debtor-affiliates delivered to the United States Bankruptcy Court for the Southern District of New York on Aug. 8, 2008, a joint Chapter 11 plan of reorganization and a disclosure statement explaining that plan. A hearing is set for Sept. 3, 2008, at 10:00 a.m., to consider the adequacy of the Debtors' disclosure statement. Objections, if any, are due Aug. 27, 2008. The Court has set Aug. 27, 2008, at 4:30 p.m., as deadline for creditors and governmental units to file proof of claims. Upon emergence from Chapter 11 Bankruptcy, the Debtors will raise at least $15 million in exit funding that will be used to pay: -- all amounts due under the Cash Collateral Order, including the initial $3.5 million cash collateral amount; -- at least $1,700,000 of additional cash collateral funding as provided for in the Budget attached hereto as Exhibit C, and -- at least $10 million for working capital to fund reorganized Debtors' operations and to fund any additional costs associated with the adoption of the plan. Furthermore, the Debtors will raise equity financing by (i) private placement to institutional investors of shares of common stock of Reorganized Debtors, and (ii) rights offering to the current shareholders of the Debtors. Under the rights offering, for each share of common stock of the Debtors outstanding on the record date, the Debtors' stockholders will be entitled to purchase one additional Reorganized Debtors common share at $1.00 per share. The proceeds from the equity financing will be allocated through: -- the first $10 million will be used to fund the working capital amount; -- the next $5 million will be used to repay the cash collateral amount; and -- any and all amounts raised above the exit funding amount will be used (i) 50% for the repayment of the Debtors Notes on a pro rata basis, and (ii) 50% to fund the acceleration of Reorganized Debtors' business plan and for general corporate purposes. If the Debtors raised less than $10 million in the equity financing, the second lien lenders will receive a senior secured note of Reorganized Debtors in an amount equal to the entire cash collateral amount on the plan's the effective date. On the one hand, if the Debtors raised between $10 million and $15 million in the equity financing, the second lien lenders will get a senior secured note of Reorganized Debtor in an amount equal to the remaining portion of the cash collateral amount that is not repaid by Reorganized Debtors on the plan's effective date. Treatment of Interests and Claims A. Monitor Oil PLC (PLC) Type Estimated Class of Claims Treatment Recovery ----- --------- --------- --------- 1 priority claims unimpaired 100% 2 secured claims none 3 general unsecured impaired 100% claims 4 equity interest impaired B. Monitor Single Lift I Ltd. (MSL) and Monitor US FinCo Inc. (FinCo) Type Estimated Class of Claims Treatment Recovery ----- --------- --------- --------- 1 priority claims unimpaired 100% 2 secured claims unimpaired 3 general unsecured impaired 0% claims 4 equity interest impaired 0% Administrative claims will be paid in cash equal to the amount of the allowed administrative expense claims in full satisfaction. General unsecured creditors of PLC will receive their allocable share of one or more PLC notes which shall be considered debt issued by the reorganized PLC in an aggregate principal amount equal to the aggregate amount of all allowed unsecured claims secured by a lien on all of the present assets of the reorganized Debtors subordinate to the liens of second lien lenders. The PLC notes shall have a term of 2 years, which is subject to a 1-year extension, if 50% of the notes are repaid before maturity. The PLC notes will be paid after payment in full of the senior secured notes and the subsidiary secured notes, if any. The general unsecured claims include guarantee claims of the second lien enders and bondholder Claims. Since MSL's value is less than the claims of the second lien lenders, the holders of general unsecured claims of MSL will not receive any distribution under the plan. Second Lien Lenders will be paid in cash in full on the plan's effective date. If the cash collateral amount is not paid in full, the second lien lenders will receive a senior secured note issued by Reorganized PLC in an amount equal to the unpaid cash collateral amount secured by first priority liens on all of the assets of Reorganized PLC. The second lien lenders will also receive the subsidiary secured note with first priority liens on all of the assets of MSL and FinCo. Each second lien lender's allocable share of the PLC notes will be reduced by the aggregate amount received by the second lien lender pursuant to the subsidiary secured note. As of their bankruptcy filing, the Debtors owe at least $80 million to the second lien lenders plus $1.45 million in accrued interest and fees under the second lien credit agreement dated Jan. 11, 2007. Holders of common stock in PLC will continue to hold one share of common stock in Reorganized PLC on account of each share of common stock owned in PLC as of the Effective Date. In addition, each holder of common stock of PLC will receive a right to purchase one new share of common stock in Reorganized PLC for each share of common stock held on the record date under the terms of the rights offering. Holders of priority claims -- including priority tax claims -- will be paid in cash in full of their allowed priority claims. On the plan's effective date, all equity interests will be canceled. Holders will not receive any distribution under the plan. A full-text copy of the Debtors' disclosure statement is available for free at: http://ResearchArchives.com/t/s?30aa A full-text copy of the Debtors' joint Chapter 11 plan of reorganization is available for free at: http://ResearchArchives.com/t/s?30ab About Monitor Oil Headquartered in the Cayman Islands, Monitor Oil, Plc -- htpp://www.monitoroil.com/ -- an oil and gas service company that provides oil and gas production solutions, offshore services and engineering services. The Monitor Group has operations in London, England; Aberdeen, Scotland; Stavanger, Norway; Caldicot, Wales; Shanghai, China and New York, United States. The company and two of its affiliates, Monitor Single Lift 1, Ltd., and Monitor US FinCo, Inc., filed for Chapter 11 Protection on Nov. 21, 2007 (Bankr. S.D.N.Y. Case No. 07-13709). Eric Lopez Schnabel, Esq., at Dorsey & Whitney, L.L.P., represents the Debtor. The U.S. Trustee for Region 2 appointed five creditors to serve on an Official Committee of Unsecured Creditors in the Debtors' cases. Ira L. Herman, Esq., at Thompson & Knight, LLP, represents the Committee. As of Dec. 31, 2007, the company disclosed total assets of $98,340,000 and total debts of $56,125,000. MT. ST. FRANCIS: Court OKs Sale of Assets to American Senior ------------------------------------------------------------ The United States Bankruptcy Court for the District of Rhode Island has approved the sale of the business operations, real estate and other assets of Mt. St. Francis Associates, L.P. to American Senior Living Communities I, L.L.C. for $12 million, subject to higher and better offers. All parties interested have until August 25, 2008 to submit higher and better offers to the Debtor's receiver, Joseph P. Ferruci, Esq., at Ferrucci Russo, P.C.: Joseph P. Ferruci, Esq. E-mail: receiver@frlawri.com Ferrucci Russo, P.C., 55 Pine St. Providence, RI 02903 Tel: (401) 455-1000 Fax: (401) 455-7778 Based in Woonsocket, RI, Mt. St. Francis Associates, L.P.,-- http://www.hospital-data.com/hospitals/MT-ST-FRANCIS-HEALTH- CENTER-WOONSOCK570.html -- is a religious non-medical health care institution. NATIONAL CENTURY: Ex-CEO Gets 10 Years for Witness Tampering ------------------------------------------------------------ Lance K. Poulsen, the former chief executive officer of National Century Financial Enterprises, was sentenced in U.S. District Court in Columbus, Ohio, on August 8, 2008, to 10 years in prison for conspiring to interfere with a witness who was preparing to testify in the fraud trial against Poulsen and other NCFE executives involved in a $3 billion securities fraud scheme, according to a statement issued by the U.S. Department of Justice. U.S. District Court Judge Algenon L. Marbley also fined Poulsen $17,500 as part of the sentence. Mr. Poulsen, 65, and his personal associate, Karl A. Demmler, 57, of Columbus were arrested Oct. 17, 2007, and later charged in a four-count indictment alleging that they conspired to impede the testimony of Sherry Gibson, a key witness in the securities fraud trial against Poulsen and other NCFE executives. A federal jury convicted Messrs. Poulsen and Demmler on all counts on March 26, 2008, after a week-long trial. Mr. Poulsen, along with seven other NCFE executives, was indicted in July 2007 for their roles in a scheme to deceive investors about the financial health of NCFE. Five of the defendants were found guilty on all counts of the indictment in March 2008. During the trial, the jury heard audio recordings of meetings that took place over a period of months between Mr. Demmler and Ms. Gibson and more than two months of intercepted wire communications between Messrs. Poulsen and Demmler. The recordings revealed that the defendants offered Ms. Gibson money to lie and attempted to influence her testimony at the NCFE fraud trial. According to the recordings presented at trial, Mr. Demmler offered Ms. Gibson money if she would have "memory lapses" when she testified against Mr. Poulsen. The jury also heard tapes of conversations between Messrs. Poulsen and Demmler discussing ways to keep the witness from testifying. Mr. Poulsen was president, chairman, chief executive officer and an owner of Dublin, Ohio-based NCFE, one of the largest healthcare finance companies in the United States until it filed for bankruptcy in November 2002. After the witness tampering indictment was returned, Mr. Poulsen's fraud trial was severed from the other NCFE defendants. Mr. Poulsen will face the fraud charges at trial scheduled to begin Oct. 1, 2008. Mr. Demmler's sentencing date has not yet been set. Both men have been in custody since their arrests. The case is being prosecuted by Assistant U.S. Attorney Doug Squires and Trial Attorneys Leo Wise and Nathan Dimock of the Criminal Division's Fraud Section. The case was investigated by the FBI. Poulsen's Fraud Trial Moved to October 1 The trial on Mr. Poulsen's fraud charges has been moved to October 1, 2008, The Columbus Dispatch reports. Judge Marbley previously scheduled Mr. Poulsen to go to trial in August 4 for charges relating to the collapse of National Century, which resulted to losses of nearly $2,000,000,000. Judge Marbley allowed the delay so that Mr. Poulsen's attorneys can review boxes of documents that they recently received, according to the report. "A two-month continuance will ensure that Poulsen has the time to obtain and review the documents that he plausibly claims are central to his theories of defense," Judge Marbley said in his order, reports Columbus Dispatch. The documents were used by the Securities Exchange Commission for a March 2008 ruling that placed partial blame for National Century's collapse on JP Morgan Chase Bank, which served as trustee banks for National Century, the Dispatch says. Because of the delay, Judge Marbley also moved to December 1 the trial on fraud charges for another National Century executive, James K. Happ, reports Business First of Columbus. Messrs. Poulsen and Happ have both pleaded not guilty of fraud. According to Business First, Mr. Poulsen has asked the Court to have his trial transferred to Cincinnati or Cleveland. He argued that it is impossible for him to get a fair trial in Columbus because news media reports have already tainted the jury pool. Business First further reports that Mr. Poulsen's lawyers asked Judge Marbley to exclude evidence concerning his wealth from trial because it would appeal to class prejudices. As widely reported, Mr. Poulsen allegedly lived in a mansion, owned a yacht, and had access to a corporate jet. Mr. Poulsen's attorneys asserted in Court filings that mentioning facts about his "wealth" during trial would limit his due process rights based on prior U.S. Supreme Court decisions. "He's accused of defrauding investors, so you have to talk about how much money he made," Business First quoted Peter Henning, a white-collar criminal law professor at Wayne State University College of Law in Detroit. "An extravagant lifestyle is usually irrelevant unless the prosecutor can prove they were spending proceeds (of alleged fraud) or that it feeds the motive," Mr. Henning added. Ex-Execs Sentenced to Years in Prison The DOJ also disclosed in a separate statement that four NCFE executives were sentenced for their roles in the scheme to deceive investors about NCFE's financial health: (1) Donald H. Ayers, 72, of Fort Myers, Florida, an NCFE vice chairman, chief operating officer, director and owner of the company, was sentenced on Aug. 6, 2008, to 15 years in prison for conspiracy, securities fraud and money laundering. (2) Randolph H. Speer, 57, of Peachtree City, Ga., NCFE's chief financial officer, was sentenced on Aug. 6, 2008, to 12 years in prison for conspiracy, securities fraud, wire fraud and money laundering. (3) Roger S. Faulkenberry, 47, of Dublin, a senior executive responsible for raising money from investors, was sentenced on Aug. 7, 2008, to 10 years in prison for conspiracy, securities fraud, wire fraud and money laundering. (4) James E. Dierker, 40, of Powell, Ohio, associate director of marketing and vice president of client development, was sentenced on Aug. 7, 2008, to five years in prison for conspiracy and money laundering. Rebecca S. Parrett, 59, of Carefree, Arizona, an NCFE vice chairman, secretary, treasurer, director and owner of the company, became a fugitive following the March 2008 jury verdict. She faces a maximum penalty of 75 years in prison and $2.5 million in fines. U.S. District Court Judge Algenon Marbley also ordered the defendants to forfeit $1.7 billion of property representing the proceeds of the conspiracy and to pay restitution of $2.3 billion. "In a scheme which lasted for years, these defendants purposely misled the investing public about National Century, its financial health, and the way in which it did business," said Acting Assistant Attorney General Matthew Friedrich. "When the facade collapsed and National Century filed for bankruptcy, investors were left holding the bag for billions of dollars in losses. The sentences handed down in this case justly reflect the gravity of the offenses." "These sentences mark the end of a nearly six-year march to justice for the architects of the financial house of cards known as National Century," said Gregory G. Lockhart, U.S. Attorney for the Southern District of Ohio. "These crimes touched hundreds of thousands of Americans if they participated in a pension that invested in National Century, or had money in any of the financial institutions who bought securities from National Century." "Unfortunately today's sentencing does not immediately restore investor confidence or offer complete financial restitution for the victims of one of the largest corporate fraud investigations," said Assistant Director Kenneth W. Kaiser of the FBI Criminal Investigative Division. "The FBI and our law enforcement and regulatory partners will do whatever it takes so that no company, in small town America or major metropolitan cities alike, misrepresents their financial health and defrauds investors." "The IRS, along with our law enforcement partners, will vigorously pursue corporate officers who victimize their investors and violate the public trust," said Internal Revenue Service (IRS) Chief of the Criminal Investigation Division Eileen Mayer. "Today's sentence demonstrates the government's determination to restore and ensure that trust." Evidence was presented at trial in February 2008 that the defendants engaged in a scheme to deceive investors and rating agencies about the financial health of NCFE and how investor monies would be used. Between May 1998 and May 2001, NCFE sold notes to investors with a combined value of $4.4 billion, which evidence showed were actually worth approximately six cents on the dollar at the time of NCFE's bankruptcy in November 2002. Court documents show that NCFE presented a business model to investors and rating agencies that called for NCFE to purchase high-quality accounts receivable from healthcare providers using money NCFE obtained through the sale of asset-backed notes to institutional investors. Evidence at trial showed that the defendants knew that the business model NCFE presented to the investing public differed drastically from the way NCFE did business within its own walls and that NCFE was making up the information contained in monthly investor reports to make it appear as though NCFE was in compliance with its own governing documents. Messrs. Ayers, Speer, Faulkenberry, Dierker and Ms. Parrett were five of eight individuals indicted in the case in July 2007. Lance K. Poulsen was severed from the other defendants following his arrest on obstruction of justice charges on Oct. 18, 2007. James K. Happ, a certified public accountant and former executive vice president for servicer operations will face charges of conspiracy and wire fraud at trial scheduled to begin Dec. 1, 2008. Jon A. Beacham, who was responsible for raising money from investors through the sale of notes, pleaded guilty to conspiracy and securities fraud on July 13, 2007, and awaits sentencing. The case was prosecuted by Assistant U.S. Attorney Douglas Squires of the Southern District of Ohio, Senior Litigation Counsel Kathleen McGovern and Trial Attorney Wes R. Porter of the Criminal Division's Fraud Section, with assistance from Fraud Section Paralegal Specialists Crystal Curry and Sarah Marberg. The investigation was conducted by FBI agents Matt Daly, Ingrid Schmidt and Tad Morris; IRS Inspectors Greg Ruwe and Mark Bailey; U.S. Postal Inspector Dave Mooney; and U.S. Immigration and Customs Enforcement agent Celeste Koszut. About National Century Financial Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- through the CSFB Claims Trust, the Litigation Trust, the VI/XII Collateral Trust, and the Unencumbered Assets Trust, is in the midst of liquidating estate assets. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. S.D. Ohio Case No. 02-65235). The Court confirmed the Debtors' Fourth Amended Plan of Liquidation on April 16, 2004. Paul E. Harner, Esq., at Jones Day, represented the Debtors. (National Century Bankruptcy News, Issue No. 86; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) NORTHWEST AIRLINES: Merger Gets Clearance from European Commission ------------------------------------------------------------------ Delta Air Lines, Inc. and Northwest Airlines Corporation received, on Aug. 6, 2008, unconditional clearance from the European Commission on the airlines' proposed merger. The Commission, which is the regulatory arm of the European Union, noted that its investigation found the proposed transaction "would not impede effective competition in Europe or the trans-Atlantic." The airlines only offer overlapping direct service between Amsterdam-Atlanta, Amsterdam-New York and Paris-Detroit, and talks with competitors and customers did not flag antitrust problems on these routes, the Commission said, according to The Associated Press. Both Delta and Northwest are part of the SkyTeam alliance, sharing flights with Air France, KLM, Alitalia and Continental Airlines, among others. Delta flies to 119 international destinations including 32 cities in the EU territory, reports the AP. "Approval from the European Commission for the merger is another important step toward completing our pro-competitive merger with Northwest. . . which will offer greater access to destinations across the globe," Delta's chief executive officer Richard Anderson said in a statement posted on Delta's Web site. "We continue to work closely with the U.S. Department of Justice and remain confident that we will be able to finalize the merger by the end of the year," Mr. Anderson added. NWA Union Officials Testify Before Lawmakers on Proposed Delta-Northwest Merger In a hearing in Washington on July 30, 2008, before the Health, Employment, Labor, and Pensions subcommittee of the U.S. House of Representatives, unions representing Northwest's flight attendants, ramp workers and reservation agents pointed out that Delta's buyout plan for Northwest threatens pension benefits for employees, the AP reports. Northwest employees have not received assurances that their pension benefits would be protected upon the closing of the planned merger, said Robert Roach, general vice president of the International Association of Machinists on behalf of Northwest's labor force, reports the AP. "The ill-advised Delta-Northwest merger will jeopardize everything [the Northwest employees] have worked for while destroying two once-great airlines and threatening the solvency of our nation's pension insurance agency," Mr. Roach said, according to the Atlanta-Journal Constitution. Mr. Roach argued that the combined airline should not be allowed to "dump their garbage" on the Pension Benefit Guaranty Corp., the government-created corporation that takes over pension plans for bankrupt companies, says AJC. Forcing the frozen pension plans unto PBGC will mean an added $15,600,000,000 in liabilities on top of its $13,100,000,000 deficit for fiscal year 2007, AJC reports, quoting Mr. Roach. In response, Rob Kight, Delta's vice president for Compensation, Benefits and Services, told the Subcommittee that Delta intends to maintain its pension plans and Northwest's that were frozen in the Chapter 11 cases. The Delta-Northwest combination is about "addition, not subtraction," hence it will mean "a stronger company" that will be better able to fund pensions going forward," Mr. Kight said, according to AJC. Subsequent to testifying before lawmakers, IAM released a press statement dated July 30, reiterating that the Delta-NWA merger could possibly jeopardize workers' pensions and the stability of the government's pension insurance system, a complete copy of which is available for free at http://www.goiam.org/mergers Delta FAs are Not Unionized, AFA-CWA Worries On behalf of Northwest's flight attendants, the Association of Flight Attendants-CWA international president Patricia Friend, noted that Delta flight attendants are not currently represented by a union, according to the AP. Ms. Friend also accused Delta management of interfering with an attempt by some of its flight attendants to unionize. As previously reported, eligible Delta flight attendants voted to become unionized from April 23 through June 3, 2008; however, more than 60% of them rejected AFA's representation, according to results from the National Mediation Board. The AFA-CWA filed on June 6, 2008, formal interference charges with the NMB against Delta management, alleging illegal conduct during the recent flight attendant representation election. "This merger should not be permitted to be a vehicle for union busting," Ms. Friend told lawmakers during the hearing, says the AP. According to Ms. Friend, Delta "will do everything in their power to first make sure there is no union in place to protect the hard-earned benefits of the currently unionized Northwest flight attendants," AJC reports. Ms. Friend urged the members of the Committee to remember that "the hundreds of thousands of airline employees across the country have the most to lose and with the least protection." Delta President: Delta-NWA Merger to Produce $2-Bil. in Savings In an interview with The Street.com, Delta President Ed Bastian said that he believes that Delta's planned merger with Northwest will produce $2,000,000,000 in savings and benefits, up from an original estimate of $1,200,000,000 and will cost about $600,000,000, down from the $1,000,000,000, which the Company previously projected. "Now that we've had an opportunity to do more detailed work, we've been able to validate the synergies we thought were there, but had a difficult time quantifying," Mr. Bastian said in the interview. The updated evaluation means that the combined Company could possibly gain back $500,000,000 in 2009, and another $500,000,000 to $600,000,000 annually until 2012. Upon the closing of the merger, Delta will become the operator of not less than 700 regional jets, which comprises approximately 40% of U.S.' regional jet fleet, The Street.com notes. The airline will also get more than $100,000,000 in improved efficiencies in airport operations due to lessened leases in costly facilities, including, among others, the Los Angeles International Airport, the report adds. Delta CEO Aims for "Quick Integration" with Northwest Delta intends to file for a single operating certificate with the Federal Aviation Administration by the end of August 2008, in connection with its planned merger with Northwest, Marketwatch reports. Mr. Anderson said in a CNBC interview that Delta plans to take Northwest as a subsidiary during the first 18 months after the merger is completed. Delta intends to fold Northwest's operations into Delta "as quickly as we can," Mr. Anderson told CNBC, says the report. Mr. Anderson also noted that negotiations "are still at pace" with respect to discussions on antitrust issues with U.S. congressional panels, as well as The Department of Justice for final approval. Delta and Northwest Face Antitrust Trial Over Merger in November As previously reported, a group of 28 airline passengers from 10 states filed a lawsuit in the U.S. District Court for the Northern District of California to halt Delta Airlines, Inc.'s proposed takeover of Northwest Airlines Corporation. U.S. District Court Judge Vaughn Walker scheduled in San Francisco, on November 5, 2008, the trial over claims that the Delta-Northwest merger violates antitrust laws, Bloomberg News reports. Northwest and Delta executives are expected to testify at the trial, USA Today says. According to Bloomberg News, the lawsuit, captioned Rosemary D'Augusta v. Northwest Airlines, allege that the proposed Delta- Northwest merger "would result in an illegal monopoly," controlling, among others, 24% of domestic flights. The lawsuit also alleges that "higher ticket prices and diminished service" will result if federal regulators approve the deal, says the report. Delta and Northwest have said the combined Company would have the the most flights worldwide, providing access to more than 390 destinations in 67 countries. About Delta Air Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE: DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta flies to Argentina, Australia and the United Kingdom, among others. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan. 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 25, 2007, the Court confirmed the Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. (Delta Air Lines Bankruptcy News, Issue No. 105; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). About Northwest Airlines Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents, including Italy, Spain, Japan, China, Venezuela and Argentina. The company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for bankruptcy, they listed $14.4 billion in total assets and $17.9 billion in total debts. On Jan. 12, 2007, the Debtors filed with the Court their chapter 11 plan. On Feb. 15, 2007, the Debtors filed an amended plan and disclosure statement. The Court approved the adequacy of the Debtors' amended disclosure statement on March 26, 2007. On May 21, 2007, the Court confirmed the Debtors' amended plan. That amended plan took effect May 31, 2007. (Northwest Airlines Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on July 29, 2008, Standard & Poor's Ratings Services lowered its ratings on Northwest Airlines Corp. and subsidiary Northwest Airlines Inc. (both rated B/Negative/--), including lowering the long-term corporate credit ratings on both entities to 'B' from 'B+', and removed the ratings from CreditWatch, where they had been placed with negative implications April 15, 2008. The outlook is negative. The downgrade reflects expected losses and reduced or negative operating cash flow caused by high fuel prices. S&P also lowered our ratings on enhanced equipment trust certificates, in some cases by more than one notch. NORTHWEST AIRLINES: Shareholders to Vote on Delta Merger Sept. 25 ----------------------------------------------------------------- In a joint prospectus filed with the Securities and Exchange Commission, dated Aug. 6, 2008, Delta Air Lines, Inc. and Northwest Airlines Corporation notify their stockholders of separate special meetings, that will simultaneously take place on Sept. 25, 2008. Essentially, during their Special Meetings, Delta and Northwest stockholders will consider and vote on a proposal to adopt the Agreement and Plan of Merger, dated as of April 14, 2008, by and among Delta Air Lines, Inc., Nautilus Merger Corporation, a direct, wholly-owned subsidiary of Delta, and Northwest. Northwest's Special Meeting Northwest's Special Meeting at 9:30 a.m., Eastern Time, will be held in the AXA Equitable Center's Auditorium located at 787 Seventh Avenue, New York, according to Northwest CEO Douglas M. Steenland. Northwest's stockholders will, among other things: * elect 12 directors to hold office until the 2009 Annual Meeting of Stockholders; * ratify the appointment of Ernst & Young LLP as Northwest's independent registered public accounting firm for 2008; * to approve an amendment to the Northwest Airlines Corp. 2007 Stock Incentive Plan; and * approve the adjournment of the Northwest Annual Meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes to approve the Merger and its Agreement. According to Mr. Steenland, the Northwest board of directors has fixed July 31, 2008, as the record date for determination of the Northwest stockholders entitled to receive notice of, and to vote at, the Northwest Annual Meeting. The joint proxy statement or prospectus and the Northwest 2007 Annual Report are available at http://www.proxyvote.com A full-text copy of Delta and Northwest's joint prospectus on Form S-4 is available at no charge at: http://ResearchArchives.com/t/s?30b1 Northwest Files Transcript of Conference Call In a separate filing on Form 425 with the SEC dated July 24, 2008, Northwest disclosed the transcript of their Conference Call held on July 23, with participating analysts Ray Neidl of Calyon Securities, Gary Chase of Lehman Brothers, Jamie Baker of JPMorgan, William Greene of Morgan Stanley and Daniel McKenzie of Credit Suisse. Northwest's Corporate participants included Doug Steenland; Andrew Roberts, executive vice president for Operations; Dave Davis, chief financial officer, Tim Griffin, EVP for Marketing and Distribution; and Andrew Lacko, Director IR. Among other things, Northwest tackled the planned merger with Delta, which, according to Mr. Steenland "makes even more sense now given the continued run up in fuel prices than it did when we entered into the merger agreement in April [2008]." Mr. Steenland added that "significant work is already under way" to realize the synergies of the Merger, including, among others: -- Delta and Northwest's joint formation of 26 integration planning teams comprised of leaders from both companies for smooth integration of operations; -- an unprecedented pre-merger collective bargaining agreement reached with Delta and Northwest pilot groups that includes a process to achieve full seniority list integration upon closing of the merger, subject to membership ratification and expected to be realized in August; -- Northwest and Delta's special meetings to be held on September 25, 2008, for shareholders to vote for the approval of the merger; and -- announcement of key executives that will lead the combined Company. Mr. Steenland added that the merger-related synergies have been estimated to be $2,000,000,000 on an annualized steady basis. "We continue to expect the closing in the fourth quarter of 2008," Mr. Steenland said. Mr. Davis reported that for the second quarter of 2008, Northwest incurred a net loss of $377,000,000. However, operating revenues for the second quarter were $3,600,000,000, up 12.4% from 2007, he says. The Participants also tackled, among other things, the impact of fuel costs to Northwest, the airline's capacity cuts and number of regional jets. A full-text copy of the Northwest Conference Call Transcript is available for free at http://ResearchArchives.com/t/s?30b0 Delta's Special Meeting According to Delta Chief Executive Officer Richard H. Anderson, Delta's Special Meeting will be held at 2:00 p.m., at the Georgia International Convention Center Concourse, College Park in Georgia, where Delta stockholders will vote on: * a proposal to approve an amendment to the Delta 2007 Performance Compensation Plan to increase the number of shares of Delta Common Stock issuable by a number of shares equal to 15% of Delta's outstanding equity capitalization, determined on a fully-diluted basis at the closing of the Merger; and * an adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes to approve the Proposals. The issuance of Delta common stock to Northwest stockholders in the merger and the amendment to the Delta 2007 Performance Compensation Plan require the affirmative vote of holders of a majority of the shares of Delta common stock, according to the SEC filing. In connection with the Merger, Delta intends to issue to substantially all employees of the combined Company, equity equal to approximately 13.38% of Delta's outstanding equity capitalization, determined on a fully-diluted basis at the closing of the Merger. Delta says its board of directors believes the employees of the combined Company should receive equity to recognize their critical role in assisting it to (i) achieve its financial, operational and customer service goals, (ii) more closely align their interests with stockholders, and (iii) increase their stake in the combined Company's financial performance. The amendment to the Delta 2007 Performance Compensation Plan is intended to permit Delta to implement the employee equity issuance and allow for other equity grants after the closing of the merger, the SEC filing disclosed. Delta has fixed the close of business on July 29, 2008, as the record date for determination of the Delta stockholders entitled to receive notice of, and to vote at, the Delta Special Meeting. About Delta Air Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE: DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta flies to Argentina, Australia and the United Kingdom, among others. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan. 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 25, 2007, the Court confirmed the Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. (Delta Air Lines Bankruptcy News, Issue No. 105; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). About Northwest Airlines Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents, including Italy, Spain, Japan, China, Venezuela and Argentina. The company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for bankruptcy, they listed $14.4 billion in total assets and $17.9 billion in total debts. On Jan. 12, 2007, the Debtors filed with the Court their chapter 11 plan. On Feb. 15, 2007, the Debtors filed an amended plan and disclosure statement. The Court approved the adequacy of the Debtors' amended disclosure statement on March 26, 2007. On May 21, 2007, the Court confirmed the Debtors' amended plan. That amended plan took effect May 31, 2007. (Northwest Airlines Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on July 29, 2008, Standard & Poor's Ratings Services lowered its ratings on Northwest Airlines Corp. and subsidiary Northwest Airlines Inc. (both rated B/Negative/--), including lowering the long-term corporate credit ratings on both entities to 'B' from 'B+', and removed the ratings from CreditWatch, where they had been placed with negative implications April 15, 2008. The outlook is negative. The downgrade reflects expected losses and reduced or negative operating cash flow caused by high fuel prices. S&P also lowered our ratings on enhanced equipment trust certificates, in some cases by more than one notch. N-STAR REAL ESTATE: S&P Affirms 'BB' Ratings on Classes J, K ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its ratings on 12 classes from N-Star Real Estate CDO IX Ltd. and removed them from CreditWatch with negative implications, where they were placed on May 28, 2008. The rating actions follow S&P's analysis of the transaction, including an examination of the current credit characteristics of the transaction's assets and liabilities. According to the trustee report dated Aug. 7, 2008, the transaction's current assets included 71 classes ($433.2 million, 54%) of CMBS pass-through certificates from 39 distinct transactions issued between 1998 and 2007. None of the CMBS assets represent an asset concentration of 10% or more of total assets, and none are first-loss positions. The current assets also included these assets: -- 26 classes ($169.6 million, 21%) from 15 collateralized debt obligation (CDO) transactions; -- 11 real estate investment trust (REIT) securities ($136.7 million, 17%); and -- Five commercial real estate loans ($62.5 million, 8%), which include four whole loans ($37.5 million, 5%) and one subordinate B-note ($25 million, 3%). The aggregate principal balance of the assets totaled $802 million, up from $800 million at issuance, while the aggregate liabilities totaled $800 million, which is unchanged since issuance. Since Standard & Poor's placed the ratings on CreditWatch with negative implications on May 28, 2008, the collateral manager has sold and purchased collateral assets for the transaction, which is actively managed. The changes in the asset pool improved the transaction's credit characteristics and contributed to the rating affirmations. S&P's analysis indicates that the current asset pool exhibits weighted average credit characteristics consistent with 'BBB' rated obligations. Standard & Poor's rates $528.1 million (66%) of the assets. S&P reanalyzed its outstanding credit estimates for the remaining assets. RATINGS AFFIRMED AND REMOVED FROM CREDITWATCH NEGATIVE N-Star Real Estate CDO IX Ltd. Floating-rate notes Rating Class To From A-1 AAA AAA/Watch Neg A-2 AAA AAA/Watch Neg A-3 AAA AAA/Watch Neg B AA AA/Watch Neg C A+ A+/Watch Neg D A A/Watch Neg E A- A-/Watch Neg F BBB+ BBB+/Watch Neg G BBB BBB/Watch Neg H BBB- BBB-/Watch Neg J BB+ BB+/Watch Neg K BB BB/Watch Neg NUVEEN INVESTMENTS: Revises Timing of ARPS Refinancing for CEFs --------------------------------------------------------------- Nuveen Investments provided an overview of its progress in refinancing auction-rate preferred shares issued by its closed-end funds. The firm highlighted the recent launch of Variable Rate Demand Preferred shares to replace ARPS of four different municipal bond CEFs, and noted that tender option bonds continue to serve as an important refinancing tool for municipal funds. The company also revised the expected timing for refinancing ARPS of four taxable closed-end funds and scheduled a conference call on ARPS for August 13 at 9:30 a.m., Central Time. "We continue to advance our goals to lower the relative cost of leverage over time for our funds and provide liquidity at par for preferred shareholders," said Bill Adams, Executive Vice President, Nuveen Investments. "While we are pleased to be making steady progress, we share the sense of urgency felt by many investors and recognize that much work remains to be done. One of the most encouraging developments to date has been the successful issuance of the first Variable Rate Demand Preferred Shares. As we announced early on, we believe this new security will be a critical element for being able to address the industry's ARPS refinancing challenge." Nuveen Investments sponsors 120 closed-end funds, of which 100 have outstanding auction-rate securities. As of August 11, 2008, $1.7 billion of ARPS, or approximately 40% of the $4.3 billion originally outstanding FundPreferred shares issued by Nuveen's taxable CEFs, have been redeemed. Four more Nuveen taxable CEFs expect to redeem an additional aggregate amount of $920 million of ARPS. Also, $1.5 billion of ARPS, or approximately 14% of the $11.1 billion originally outstanding MuniPreferred shares issued by Nuveen's municipal CEFs, have been or are in the process of being redeemed, in part with proceeds from the successful issuance of VRDP. Nuveen has also arranged for a liquidity facility to support the issuance of additional VRDP to refinance an additional $1.25 billion of ARPS. New VRDP Offerings Marking a key step forward, four Nuveen municipal CEFs recently announced the completion of private offerings of VRDP shares. The four funds are: -- Nuveen Dividend Advantage Municipal Fund 2 (AMEX: NXZ), -- Nuveen Insured Premium Income Municipal Fund 2 (NYSE: NPX), -- Nuveen Insured California Tax Free Advantage Municipal Fund (AMEX: NKX) and -- Nuveen Insured New York Dividend Advantage Municipal Fund (AMEX: NKO). A total of more than $500 million of VRDP shares were sold by the funds. The proceeds, along with each fund's proceeds from the creation of TOBs, will enable each fund to redeem all of its outstanding ARPS, totaling $596.9 million. "The initial launch of the VRDP initiative is a very significant milestone in ARPS refinancing as we forge ahead on behalf of investors," Adams said. "We look forward to building on this progress by expanding it to more municipal funds, and potentially using VRDP to refinance ARPS issued by taxable funds." The new VRDP shares include a liquidity feature that allows holders of VRDP to have their shares purchased by a liquidity provider in the event that VRDP holders' sell orders have not been matched with purchase orders in a remarketing. VRDP dividends will be set weekly at a rate established by a remarketing agent. In these four offerings the VRDP shares were offered only to qualified institutional buyers, such as money market funds, pursuant to Rule 144A under the Securities Act of 1933. TOB Strategy Continues Nuveen municipal funds have used tender option bonds to refinance a total of approximately $1 billion of ARPS. With the approval of the funds' Board, the first series of TOB partial redemptions for 13 funds in the amount of nearly $600 million was announced in June and completed in July. The second series of TOB partial redemptions for an additional 23 funds and approximately $350 million was announced last week, with the actual redemptions to be completed by early September. "Although under current market conditions the amount of TOBs our funds can create are in many cases quite limited, TOBs can still play an important role in our plans to manage fund leverage costs and provide liquidity to ARPs shareholders," Adams said. TOBs are floating rate securities issued by trusts into which a fund has deposited municipal securities. Many Nuveen CEFs currently use TOBs as a portfolio structuring and duration management tool. Revised Timing of ARPS Refinancing for 4 Taxable CEFs Economic uncertainties created by the ongoing credit crunch and market volatility have delayed the timing of the anticipated refinancing of ARPS issued by four taxable CEFs: -- Nuveen Diversified Dividend & Income Fund (NYSE: JDD); -- Nuveen Quality Preferred Income Fund (NYSE: JTP); -- Nuveen Quality Preferred Income Fund 2 (NYSE: JPS); and -- Nuveen Quality Preferred Income Fund 3 (NYSE: JHP). The four funds previously announced that they expected to obtain debt financing to permit the redemption of approximately $1 billion in ARPS. Nuveen currently expects these funds to redeem approximately $920 million of ARPS, using this financing and available cash. "We expected the ARPS refinancing facility for these funds to be in place by mid-July and the ARPS redemptions to be completed in August," Adams said. "We are disappointed that the refinancing process has taken longer than anticipated. We now estimate the refinancing facility for these four funds to be in place later this month and the ARPS redemptions to be completed in September. However, the funds' ability to finalize the refinancing facility is still not certain, and this revised timetable is subject to further change, due to market conditions and other factors, including the completion of final documentation for the debt financing arranged by the funds." Recent market and economic conditions also have made it difficult to set a timetable for refinancing the remaining ARPS issued by taxable funds that already have had partial redemptions. "We continue to pursue financing options to address the remaining preferred shares for these funds," Adams said. Conference Call Set for August 13 Nuveen Investments will host a conference call at 9:30 a.m. Central Time on August 13, 2008, to discuss this latest update. Nuveen anticipates high call volume and encourages attendees to access the call via the live streaming audio link to facilitate the registration process. Online participants will be able to submit questions. About Nuveen Investments Nuveen Investments, Inc., headquartered in Chicago, is a U.S.- domiciled holding company whose subsidiaries provide investment management products and services to retail and institutional investors predominantly in the US. Nuveen Investments provides investment services designed to help secure the long-term goals of institutions and high net worth investors as well as the consultants and financial advisors who serve them. Nuveen Investments markets its growing range of specialized investment solutions under the high-quality brands of HydePark, NWQ, Nuveen, Rittenhouse, Santa Barbara, Symphony and Tradewinds. In total, the company managed $153 billion of assets on March 31, 2008. It's assets under management were $164 billion as of Dec. 31, 2007, according to Moody's. Nuveen is owned by a group of investors led by Madison Dearborn Capital Partners Inc., The Wall Street Journal's Lauren Pollock says. * * * As reported by the Troubled Company Reporter on March 4, Moody's Investors Service affirmed the B1 corporate family rating on Nuveen Investments and has changed the rating outlook to negative from stable. The outlook change was primarily driven by the challenges that the company currently faces with regards to the liquidity crisis in the auction rate securities market for closed-end funds and the potential for a protracted equity market downturn in 2008. This rating action has no impact on any auction rate preferred stock or other indebtedness issued by Nuveen's closed-end funds that are rated by Moody's. PACIFIC LUMBER: Scopac Withdraws Provisional Motion to Sell Assets ------------------------------------------------------------------ Scotia Pacific Company LLC withdrew as moot its provisional request for a sale of its assets and related auction procedures in the event no plan of reorganization is confirmed in its bankruptcy case. As reported in the Troubled Company Reporter on July 9, 2008 pursuant to Section 363 of the Bankruptcy Code, Scopac sought the authority of the Court to sell its assets pursuant to auction procedures to be negotiated by the parties-in-interest in Scopac's Chapter 11 case, in the event that the Marathon/Mendocino Plan is not confirmed. The Modified First Amended Joint Plan of Reorganization proposed by Marathon Structured Finance Fund L.P., Mendocino Redwood Company, LLC, and the Official Committee of Unsecured Creditors for the Pacific Lumber Company and its debtor affiliates was confirmed on July 8, 2008, and was subsequently made effective on July 30. Scopac previously contemplated, to ensure the viability of the PALCO mill, that any purchaser of the Scopac timberlands must be willing to enter into a long-term contract for log sales, so long as the mill owner makes a substantial commitment to the ongoing viability of the mill. Scopac submitted a proposed Log Supply Agreement with Sierra Pacific Industries, which offered to buy the PALCO mill, the related co-generation plant and related working capital for roughly $45 million. Scopac's withdrawal of its Provisional Motion rendered the proposed Sierra Pacific Log Supply Agreement moot as well. About Pacific Lumber Based in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transaction pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jack L. Kinzie, Esq., at Baker Botts LLP, is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co-counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. Kyung S. Lee, Esq., Esq., at Diamond McCarthy LLP is Scotia Pacific's co-counsel, replacing Porter & Hedges LLP. John D. Fiero, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Official Committee of Unsecured Creditors. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors filed their Joint Plan of Reorganization on Sept. 30, 2007, which was amended on Dec. 20, 2007. Four other parties-in- interest have filed competing plans for the Debtors -- The Bank of New York Trust Company, N.A., as Indenture Trustee for the Timber Notes; the Official Committee of Unsecured Creditors; Marathon Structured Finance Fund L.P, the Debtors' DIP Lender and Agent under the DIP Credit Facility; and the Heartlands Commission, which represents the tribal members of the Bear River Band of Rohnerville Rancheria and PALCO employees. On July 8, 2008, the Court confirmed the Modified First Amended Joint Plan of Reorganization With Technical Modifications for the Debtors proposed by Marathon Structured Finance Fund L.P., Mendocino Redwood Company, LLC, and the Official Committee of Unsecured Creditors. The Debtors emerged from bankruptcy protection on July 30, 2008. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 67; http://bankrupt.com/newsstand/or 215/945-7000). PARMALAT SPA: NY Court Confirms Settlement Class in Hermes Suit --------------------------------------------------------------- The U.S. District Court for the Southern District of New York granted the request of Lead Plaintiffs Hermes Focus Asset Management Europe Limited, Cattolica Partecipazioni, S.p.A., Capital & Finance Asset Management, Societe Moderne des Terrassements Parisiens and Solotrat for preliminary certification to the Settlement Class, for the purpose of partially settling the securities class action litigation, according to a report by the PARMALAT Bankruptcy News, Issue No. 104. The Settlement Class will include all persons and entities that purchased or acquired securities of Parmalat Finanziaria S.p.A. and its subsidiaries and affiliates between Jan. 5, 1999 and Dec. 18, 2003. The Settlement Class excludes Parmalat, the other defendants, officers and directors of Parmalat or the Defendants, entities in which the Defendants have a controlling interest, Parmalat's insurers, banks and other financial institutions that transacted with Parmalat, and their relatives and legal representatives. The Court also approved, as to form and content, the Notice and Publication Notice to putative class members. Further, Judge Lewis A. Kaplan has appointed Epiq Systems Class Actions and Claims Solutions as the notice and claims administrator supervising and administering the notice procedure as well as the processing of claims. Parmalat has sought to dismiss the claims of Hermes et al. Judge Kaplan stated that approval of the settlement will moot Parmalat's motion for judgment. He denied without prejudice Parmalat's request for renewal of judgment on the pleadings, in the event that the District Court's decision does not moot the proposed settlement with the foreign plaintiffs. Judge Kaplan will convene a hearing on Sept. 24, 2008, at 9:30 a.m., to determine whether the Settlement is fair, reasonable and accurate. The Court will also consider the approval of the related plan of allocation, as well as the reimbursement of attorneys' fees and other costs. About Parmalat Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. The company's U.S. operations filed for chapter 11 protection on Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court has declared the units insolvent. On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No. 04-14268, in the United States Bankruptcy Court for the Southern District of New York. Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and Food Holdings are Cayman Island special-purpose vehicles established by Parmalat S.p.A. The Finance Companies are under separate winding up petitions before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. serve as Joint Provisional Liquidators in the cases. On Jan. 20, 2004, the Liquidators filed Sec. 304 petition, Case No. 04-10362, in the United States Bankruptcy Court for the Southern District of New York. In May 2006, the Cayman Island Court appointed Messrs. MacRae and Cleaver as Joint Official Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represent the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presides over the Parmalat Debtors' U.S. cases. On June 21, 2007, the U.S. Court granted Parmalat permanent injunction. PERFORMANCE TRANS: Ch. 7 Trustee Taps Ritchie Bros. as Auctioneer ----------------------------------------------------------------- Mark S. Wallach, the trustee appointed under Performance Transportation, Inc., et al.'s, Chapter 7 cases, asks the U.S. Bankruptcy Court for the Western District of New York to approve an auction contract with Ritchie Bros. Auctioneers (America), Inc. The Chapter 7 Trustee seeks the Court's authority to sell property free and clear of liens and encumbrances and implement the requests of Black Diamond Commercial Finance, L.L.C. The Chapter 7 Trustee has selected Ritchie Bros. as the auctioneer because of its experience in the liquidation of transportation equipment, and ability to insure and mobilize the Debtors' rolling stock and other assets to be sold to sites which Ritchie Bros. owns or controls. The Chapter 7 Trustee and Ritchie Bros. agreed that: a. Ritchie Bros. will conduct an unreserved public auction set for October 1, 2008, using both on-site and video presentations; b. Ritchie Bros. will charge an 8.25% commission on the gross sale price for any lot in excess of $2,500 or 25% for any lot realizing $2,500 or less; c. the Chapter 7 Trustee will receive from Ritchie Bros. a $10,000,000 advance, which is repayable from the auction's net proceeds, secured by a first lien to Ritchie Bros. on the equipment once the Ritchie Bros. obtains the vehicle titles and the Court's approval of the auction contract and the sale of the equipment free and clear of liens and encumbrances; d. the advance will bear interest at the per annum rate of US Bank's prime rate plus 2% compounded semi-annually from the date of the Advance to the date of the auction. The interest is repayable solely from the proceeds of the action; and e. Ritchie Bros. will post a bond, provide insurance, transport the equipment to its closest auction site, prepare the equipment for sale, conduct the sales and account to the Chapter 7 Trustee. Todd A. Ritschdorff, Esq., at Phillips Lytle LLP, in Buffalo, New York, relates that the estates are incurring ongoing lease expenses of not less than $230,000 per month. The Debtors will be able to avoid the leases expenses as soon as Ritchie Bros. removes the equipment from the premises, he says. The Chapter 7 Trustee will be able to use for defraying administrative expenses Ritchie Bros. advance payment of $10,000,000. The advance payment and other payments by Ritchie Bros. will be subject to the lien of the Debtors' secured creditors. However, the Chapter 7 Trustee, with the consent of Black Diamond, may use the funds for ongoing non-professional Chapter 7 expenses. Mr. Ritschdorff says Black Diamond consents to the sale of the equipment free and clear of its liens provided that the Court deems the liens attached to the advance payment and all other amounts due from Ritchie Bros. as net proceeds from the corresponding collateral. According to Mr. Ritschdorff, pursuant to an intercreditor agreement between the Debtors, the CIT Group/Business Credit, Inc., in its capacity as collateral agent for the prepetition senior secured lenders, and Goldman Sachs Credit Partners L.P., in its capacity as collateral agent for the prepetition junior secured lenders, if Black Diamond releases the liens of the prepetition senior secured lenders, the liens of the prepetition junior secured lenders will be automatically released. The intercreditor agreement further provides that, until the first lien obligations have been paid in full, the second lien collateral agent irrevocably appoints the first lien collateral agent. About Performance Transportation Performance Transportation Services Inc. is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America, and operates under three key transportation business lines including: E. and L. Transport, Hadley Auto Transport and Leaseway Motorcar Transport. The company and 13 of its affiliates previously filed for Chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Lead Case No. 06- 00107). The U.S. Bankruptcy Court for the Western District of New York confirmed the Debtors' plan on Dec. 21, 2006, and that plan became effective on Jan. 29, 2007. Garry M. Graber, Esq. of Hodgson, Russ LLP and Tobias S. Keller, Esq. of Jones Day represented the Debtors in their restructuring efforts. When the Debtor filed for protection from their creditors it reported more than $100,000,000 in total assets. It also disclosed owing more than $100,000,000 to at most 10,000 creditors, including $708,679 to Broadspire and $282,949 to General Motors of Canada Limited. The company and its debtor-affiliates filed their second Chapter 11 bankruptcy on Nov. 19, 2007 (Bankr. W.D.N.Y. Case Nos: 07-04746 thru 07-04760). Tobias S. Keller, Esq., at Jones Day, represents the Debtors. Garry M. Graber, Esq., at Hodgson, Russ LLP, serve as the Debtors' local counsel. The Debtors' claims and balloting agent is Kutzman Carson Consultants LLC. (Performance Bankruptcy News, Issue No. 52; Bankruptcy Creditors' Services Inc.; http://bankrupt.com/newsstand/or 215/945-7000). As reported in the Troubled Company Reporter on July 18, 2008, the Court converted the Debtors' Chapter 11 cases to cases under Chapter 7 of the Bankruptcy Code, effective as of July 14, 2008. Mark S. Wallach was appointed as the trustee for Performance Transportation, Inc., et al.'s, Chapter 7 case. PLASTECH ENGINEERED: Files Joint Chapter 11 Plan of Liquidation --------------------------------------------------------------- Plastech Engineered Products, Inc., and its debtor-subsidiaries submitted to the United States Bankruptcy Court for the Eastern District of Michigan on Aug. 11, 2008, a Joint Plan of Liquidation, backed by the Official Committee of Unsecured Creditors. The Plan, which was submitted by the Debtors and the Creditors Committee, as co-proponents, provides for the orderly wind-down and liquidation of the Debtors' remaining assets, following the consummation of the sales of the Debtors' businesses and assets, and approval of the sale-related settlements. During their Chapter 11 cases, the Debtors completed the sale of their major businesses and certain assets: Completion Assets Consideration and Terms Date ------ ----------------------- ---- Interiors Biz. Waiver of $160MM 1st Lien Debt Debt 7/01/08 Assumption of Liabilities, receipt of $39MM Cash from Johnson Controls' JCIM, LLC, and Goldman Sachs Credit Partners, on behalf of First Lien Lenders for Plastech's interior and underhood business. Exteriors Biz. Waiver of $24.5MM 1st Lien Debt, 7/01/08 Assumption of Liabilities, receipt of cash equal to amount of inventory, from Decoma International of America and Goldman Sachs Credit Partners, for Exteriors business. Carpet Biz. $650,000 cash from BBI Enterprises 6/30/08 for Carpet Business. H&P/Stamping $1,700,000 cash, subject to inventory 7/18/08 adjustment, from JD Norman of Ohio Holdings, Inc., for Brooklyn, Ohio Facility. Ford Patents $40,000 cash from Ford Global 7/17/08 Technologies, LLC, for US Patent Nos. 7121604 and 7007995. Upon consummation of the Sales or shortly thereafter, each of the officers of Plastech resigned or were terminated, except for Peter Smidt, who has been overseeing the wind-down and liquidation of the Debtors' assets. Mr. Smidt was the company's executive vice president and chief financial officer. The Debtors did not provide estimates on the aggregate amount of claims filed against them that will ultimately be allowed. The Debtors believe they have funds to pay administrative claims in full but did not disclose how much holders of general unsecured claims will recover. According to the Disclosure Statement attached to the Plan: -- As contemplated by the Bankruptcy Code, DIP Facility claims, allowed claims under Section 503(b)(9) of the Bankruptcy Code, and other administrative claims will be paid in full on the effective date of the Plan, or when they are due (for ordinary course administrative claims). -- Holders of priority tax claims will receive deferred cash payments over a period not exceeded five years, plus interest accruing from the Effective Date through the date of payment. -- First Lien Term Loan Lenders (on account of their credit bids) and the Second Lien Lenders have received consideration from the sale of the Debtors' Interiors and Exteriors businesses, pursuant to settlements entered into with the Debtors. The First Lien Lenders are entitled to a $80,000,000 deficiency claim and the Second Lien Lenders $100,000,000 but won't receive payments on account of those claims until all general unsecured creditors are paid in full. The Second Lien Lenders' deficiency claims are subordinate to the First Lien Lenders'. -- Holders of general unsecured claims will receive their pro rata share of the "Class 7 Distribution Amount" equal to $14,000,000 in cash contributed by the First Lien Lenders from the proceeds of the Interiors sale, plus proceeds from unencumbered assets, including avoidance actions. -- Holders of secured tool vendors claims and governmental units holding tax claims will receive full payment. Tool vendors will be paid cash or will recover their tooling. Tax claimants will receive cash or the collateral securing their claims. -- Holders of equity interests and subordinated claims will not recover anything under the Plan. Julie Nguyen Brown, sole director and chaiman of Plastech's Board of Directors, holds 99.33% of the common shares of Plastech and Tai Nguyern holds the remaining shares. A settlement with Plastech has allowed a Brown-owned non-debtor entity to retain ownership of all its properties. The Debtors acknowledge that the Pension Benefit Guaranty Corp., the government agency that affords certain guarantees of pension plan liabilities, may assert large claims based upon the estimate of the difference between liabilities to the Debtors' pension plan beneficiaries and the current value of the plan assets. The Debtors relate that the ultimate allowance of PGBC's claims may impact the distributions to holders of general unsecured claims. On the effective date of the Plan, a liquidating trust will administer and liquidate all remaining property of the Debtors, including avoidance actions, not sold, transferred or otherwise waived or released before the Effective Date. The liquidating trustee will distribute proceeds received from the liquidation and from litigation of avoidance actions to creditors in accordance with the terms of the Plan. Except with respect to 503(b)(9) Claims, the liquidating trustee will have sole authority for prosecuting, collecting, and otherwise administering causes of action under Sections 502, 510, 541, 542, 544, 545, 547, 548, 549, 550, 551 or 553 of the Bankruptcy Code. The Debtors, however, have signed waivers and releases of all claims against the Browns; their major customers General Motors Corp., Ford Motor Co. and Chrysler LLC; and the Term Lenders, pursuant to the sale-related settlements among the parties. On the Effective Date, or a soon as the Liquidating Trustee deems appropriate, Plastech and its subsidiary debtors will be dissolved. A Post-Effective Date Committee will be formed and will be comprised by certain members of the Creditors Committee. Professionals retained by the Debtors or the Creditors Committee will be entitled to reasonable compensation and reimbursement of actual, necessary expenses for post-Effective Date activities. The Disclosure Statement provides that the Plan, although styled as a "joint plan", is structured as the wind-down and liquidation of nine separate legal debtor-entities. Thus, votes will be tabulated separately for each of the Debtors with respect to each Debtor's Plan and distributions will be made separately. The Debtors, however, propose to consolidate general unsecured claims against all Debtor-entities under one class. The Debtors and the Creditors Committee believe the Plan provides claimholders with the "best recovery possible." The Debtors aver that converting their bankruptcy cases to liquidation under Chapter 7 of the Bankruptcy Code would dilute recovery by creditors, as the appointment of a Chapter 7 trustee, and its retention of professionals, would increase operating costs. The Debtors add that (i) a conversion to Chapter 7 would delay distribution to creditors, and (ii) their remaining assets will suffer erosion in value in the context of a "forced sale" atmosphere that would prevail in a Chapter 7 case. The Debtors expect an October 22 hearing where they will seek confirmation of their Plan and an October 15 deadline for confirmation objections by parties. Before seeking confirmation of the Plan, the Debtors have to obtain approval of the adequacy of the information in the Disclosure Statement and then solicit votes on the Plan. A full-text copy of the Plan is available for free at: http://bankrupt.com/misc/Plastech_Ch11Plan.pdf A full-text copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/Plastech_DiscStatement.pdf About Plastech Engineered Based in Dearborn, Michigan, Plastech Engineered Products, Inc. -- http://www.plastecheng.com/-- is a full-service automotive supplier of interior, exterior and underhood components. It designs and manufactures blow-molded and injection-molded plastic products primarily for the automotive industry. Plastech's products include automotive interior trim, underhood components, bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company, and Toyota, as well as Johnson Controls, Inc. Plastech is a privately held company and is the largest family- owned company in the state of Michigan. The company is certified as a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in the midwestern and southern United States. The company's products are sold through an in-house sales force. The company and eight of its affiliates filed for Chapter 11 protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C., represent the Debtors in their restructuring efforts. The Debtors chose Jones Day as their special corporate and litigation counsel. Lazard Freres & Co. LLC serves as the Debtors' investment bankers, while Conway, MacKenzie & Dunleavy provide financial advisory services. The Debtors also employed Donlin, Recano & Company as their claims and noticing agent. Joel D. Applebaum, Esq., at Clark Hill PLC, represents the Official Committee of Unsecured Creditors. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. (Plastech Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on Aug. 11, 2008, the Debtors has until Sept. 28, 2008, to file a Chapter 11 plan of reorganization. PLASTECH ENGINEERED: Plan's Treatment & Classification of Claims ---------------------------------------------------------------- The classification and treatment of claims pursuant to the Chapter 11 Joint Plan of Liquidation of Plastech Engineered Products Inc. and its debtor-affiliates are: Class Description Claim Treatment ----- ----------- --------------- N/A DIP Facility * All DIP Facility Claims will be Claims allowed pursuant to the Final DIP Claims: $______ Order. * After the Initial Distribution Date, each holder of an Allowed DIP Facility Claim will receive, to the extent not previously received, in full satisfaction of the Allowed DIP Facility Claim, (i) cash or other consideration from the liquidation proceeds of the Liquid Collateral and the Additional DIP Collateral securing the DIP Facility Claims, and (ii) to the extent that the proceeds are not adequate to pay the DIP Facility Claims in full, a Deficiency Claim, provided however, that the DIP Lenders will waive the Deficiency Claims in accordance with the Sale-related Settlements. N/A 503(b)(9) Claims * A 503(b)(9) Claim is a Claim Claims: $17,000,000 asserted pursuant to Section 503(b)(9) of the Bankruptcy Code. * Subject to the requirements of the Plan, after the later of (i) the Initial Distribution Date or (ii) the Distribution Date after a 503(b)(9) Claim becomes allowed, the holder of the Allowed 503(b)(9) Claim will receive, in full satisfaction of the Allowed 503(b)(9) Claim, (a) cash equal to the unpaid portion of the face amount of the Claim, or (b) other less favorable treatment which the Holder and the Debtors and Liquidating Trustee will have agreed upon in writing. N/A Administrative * An Administrative Claim is a Claim Claims arising under Section 507(a)*2) for Claims: $_______ costs and expenses of the Chapter 11 cases administration, under Sections 503(b), 507(b), or 1114(e)(2) of the Bankruptcy Code, including (a) any actual and necessary costs and expenses incurred after the Petition Date, or preserving the Estates and operating the businesses of the Debtors, such as wages, salaries, commissions for services, payments for inventory, leased equipment and premises, and Claims of governmental units for taxes (including tax audit Claims on tax years commencing after the Petition Date, but excluding Claims on tax periods ending up to the Petition Date); and (b) all other claims entitled to administrative claim status pursuant to a Final Order of the Court, but excluding Priority Tax Claims, Non- tax Priority claims, 503(b)(9) Claims, Trustee Fee Claims, Assumed Liabilities Claims and Professional Fee Claims. * After the later of (i) the Initial Distribution Date or (ii) the Distribution Date after an Administrative Claim becomes allowed, the holder of the Allowed Administrative Claim will receive, in full satisfaction of the Allowed Administrative Claim (a) cash equal to the unpaid portion of the face amount of the Allowed Administrative Claim, or (b) other less favorable treatment which the Holder and the Debtors and Liquidating Trustee will agree in writing; provided, however, that Allowed Administrative Claims for liabilities incurred by a Debtor in the ordinary course of the business during the Chapter 11 cases may be paid in the ordinary course pursuant to the terms and conditions of any related agreement (x) prior to the Effective Date, by the Debtors and the Purchaser (as required by the terms of the applicable Asset Purchase Agreement), and (y) subsequent to the Effective Date, by the Liquidating Trustee and the Purchaser, pursuant to the terms of the related Asset Purchase Agreement. N/A Priority Tax * A Priority Tax Claim is a Claim of a Claims governmental unit of the kind Claims: $________ specified in Sections 502(i) and 507(a)(8) of the Bankruptcy Code * Except to the extent that an Allowed Priority Tax Claim has been paid prior to the Initial Distribution Date, a Holder of an Allowed Priority Tax Claim will be entitled to receive from the Liquidating Trustee, in full satisfaction of the Allowed Priority Tax Claim, (i) deferred Cash payments over a period of up to five years after the assessment of the Allowed Priority Tax Claim in an aggregate principal amount equal to the Face Amount of the Allowed Priority Tax Claim, plus interest on the unpaid portion at the Case Interest Rate from the Effective Date through the payment date or (ii) other less favorable treatment which the Holder and the Debtors and the Liquidating Trustee will agree upon in writing. If deferred Cash payments are made to a Holder of an Allowed Priority Tax Claim, payments of principal will be made in annual installments equal to 10% of the Allowed Priority Tax Claim plus accrued and unpaid interest, with the first payment to be due on the first anniversary of the Initial Distribution Date, and subsequent payments to be due on the anniversary of the first payment date after the Priority Tax Claim becomes allowed; provided, however, that any unpaid installments five years after the assessment date of the tax that is the basis for the Allowed Priority Tax Claim will be paid on the first business day after the date, together with any accrued and unpaid interest to the date of payment; and provided, further, however, that the Liquidating Trustee will have the right to accelerate payment of any Allowed Priority Tax Claim, or any portion or remaining balance of any Allowed Priority Tax Claim, at any time on or after the Effective Date without premium or penalty. 1 First Lien Term * IMPAIRED Loan Claims Claims: $_________ * Entitled to vote to accept or reject the Plan * Estimated recovery: ______% * Pursuant to the orders approving the Interiors and Exteriors Sales and the terms of the Sale-related Settlements and the JCIM Operating Agreement, (i) the Fist Lien Term Lenders have received all consideration received in the Interiors and Exteriors Sale, and (ii) the Subscribing Term Lenders have received all equity interests that would otherwise have been distributed to Non-subscribing First Lien Term Lenders. To the extent the First Lien Term Loan Claims are not fully satisfied thereby, the First Lien Term Lenders will have Deficiency Claims amounting to $80,0000,000, representing the outstanding balance of their First Lien Term Loan Claims, after deducting an estimated recovery on account of their credit bids, receipt of proceeds of the Residual Assets and the financing they have provided. Pursuant to the Committee Settlement, the First Lien Term Lenders have agreed to waive any right to receive, on account of their Deficiency Claim, or any other portion of their Second Lien Term Loan Claims (i) any part of the First Lien Term Lender Contribution and (ii) any proceeds of Avoidance Actions, in each case, on account of the Deficiency Claims; such Deficiency Claims will be classified as Class 7 General Unsecured Claims, but will not be entitled to receive a Class 7 General Unsecured Claim Distribution on account of the Deficiency Claims, unless all Class 7 Claims are paid in full. 2 Second Lien Term * IMPAIRED Loan Claims Claims: $_________ * Entitled to vote to accept or reject the Plan * Estimated recovery: 0% * Pursuant to the orders approving the Interiors and Exteriors Sale and the terms of the Sale-related Settlements and the JCIM Operating Agreement, (i) the Second Lien Term Lenders have received all consideration in the Interiors and Exteriors Sales, and (ii) the Subscribing Term Lenders have received all equity interests that would otherwise have been distributed to Non-subscribing Second lien Term Lenders. To the extent the Second Lien Term Loan Claims are not fully satisfied thereby, the Second Lien Term Lenders will have Deficiency Claims in the approximate aggregate amount of $100,000,000 representing the outstanding balance of their Second Lien Term Loan Claims as of the Petition Date. Pursuant to the Committee Settlement, the Second Lien Term Lenders have agreed to waive any right to receive, on account of their Deficiency Claim, or any other portion of their Second Lien Term Loan Claims, (i) any part of the First Lien Term Lender Contribution and (ii) any proceeds of Avoidance Actions, in each case, on account of such Deficiency Claims. Any Second Lien Term Loan Claims or Deficiency Claims of the Second Lien Term Lenders are subordinate to the First Lien Term Loan Claims and the Deficiency Claims of the First Lien Term Lenders. Accordingly, the Second Lien Term Lenders will receive no further Distributions on account of their Second Lien Term Loan Claims or Deficiency Claims unless the Deficiency Claims of the First Lien Term Lenders are paid in full. 3 Secured Tool * UNIMPAIRED Vendor Claims Claims: $_________ * Not entitled to vote on the Plan * Estimated Recovery: 100% * Class 3 consists of Secured Claims held by Tool Vendors which Claims are (a) secured by a Lien on property in which a Debtor's Estate has an interest or (b) subject to setoff under Section 553 of the Bankruptcy Code, and the right of setoff has been asserted by the holder of the right prior to the Confirmation Date in a properly filed motion for relief from the automatic stay, to the extent of the value of the Claimholder's interest in the applicable Estate's interest in the property or to the extent of the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code or, in the case of setoff, pursuant to Section 553 of the Bankruptcy Code. * Pursuant to the Tooling Order, holders of Allowed Secured Tool Vendor Claims who elect to proceed under the Tooling order will receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed Secured Tool Vendor Claims a Distribution in accordance with the procedures set forth in the Tooling order, which procedures provide for (i) payment to the affected Tool Vendor, (ii) payment into escrow of appropriate amounts by the affected Customer, as defined in the Tooling Order, (iii) return of the Tooling securing the Secured Tool Vendor Claim, or (iv) other treatment as provided in the Tooling Order. Except as otherwise provided in the Tooling Order, any holder of a Secured Tool Vendor Claim will retain its lien in the Tooling or the proceeds of the Tooling (by payment int escrow of an appropriate amount in accordance with the Tooling Order) to the same extent and with the same priority as the lien held as of the Petition Date until such time as (A) the holder of the Secured Tool Vendor Claim (i) has been paid cash equal to the value of its Allowed Secured Tool Vendor Claim, (ii) has received a return of the Tooling securing the Secured Tool Vendor Claim, or (iii) has been afforded other treatment under the Tooling Order; or (B) the purported Lien has been determined by a Court order to be invalid or otherwise avoidable. A Holder of an Allowed Secured Tool Vendor Claim who elects not to proceed under the Tooling Order will be entitled either to (i) the return of the Tooling securing the Secured Tool Vendor Claim or (ii) the right to pursue any other contractual, legal or equitable remedy or avenue the Tool Vendor may have concerning the Tooling. 4 Secured Tax Claims * UNIMPAIRED Claims:$ _________ * Not entitled to vote on the Plan * Estimated Recover: 100% * Class 4 consists of claims of governmental units for the payment of a tax assessed against property to the Estate, which Claims are secured by a first lien on the property. * On, or as soon as reasonably practicable after the later of (a) the Initial Distribution Date or (b) the Distribution Date immediately following the date on which a Secured Tax Claim becomes an Allowed Secured Tax Claim, the holder of the Allowed Secured Tax Claim will receive from the Liquidating Trustee, in full satisfaction, settlement, release and discharge of and in exchange for, the Allowed Secured Tax Claim, (i) cash equal to the value of its Allowed Secured Tax Claim and (ii) the Collateral securing the Secured Tax Claim, or (iii) other less favorable treatment as to which the Debtors and the Liquidating Trustee and the Holder will have agreed upon in writing. Any Holder of a Secured Tax Claim will retain its lien in the Collateral or the proceeds of the Collateral (to the extent that the Collateral is sold by the Debtors or the Liquidating Trustee free and clear of the lien) to the same extent and with the same priority as the Lien held as of the Petition Date until the time as (A) the Holder of the Secured Tax Claim (i) has been paid cash equal to the value of its Allowed Secured Tax Claim and (ii) has received a return of the Collateral securing the Secured Tax Claim, or (iii) has been afforded other less favorable treatment as to which the Liquidating Trustee and the Holder will have agreed upon in writing; or (B) the purported Lien has been determined by a Court order to be invalid or otherwise avoidable. To the extent that a Secured Tax Claim exceeds the value of the interest of the Estate in the property that secures the Claim, the Claim will be deemed disallowed pursuant to Section 502(b)(3) of the Bankruptcy Code. 5 Miscellaneous * IMPAIRED Secured Claims * Entitled to vote to accept or reject the Plan * Estimated Recovery: ______% * Class 5 consists of Claims, other than Secured Tax Claims and Secured Tool Vendor Claims, that are (a) secured by a lien on property in which the Debtors' Estate has an interest or (b) subject to setoff under Section 553 of the Bankruptcy Code, and the right to offset has been asserted by the holder of the right prior to the Confirmation Date in a properly filed motion for relief from the automatic stay, to the extent of the value of the Claimholder's interest in the applicable Estate's interest in the property or to the extent of the amount subject to setoff, as applicable, pursuant to Section 506(a) of the Bankuptcy Code or, in the case of setoff, pursuant to Section 553 of the Bankruptcy Code. * On, or as soon as reasonably practicable after the later of (a) the Initial Distribution Date or (b) the Distribution Date following the date on which a Miscellaneous Secured Claim becomes an Allowed Miscellaneous Secured Claim, a holder of an Allowed Miscellaneous Secured Claim will receive from the Liquidating Trustee, in full satisfaction, settlement, release, and discharge of and in exchange for, the Allowed Miscellaneous Secured Claim, (i) cash equal to the value of its Allowed Miscellaneous Secured Claim and/or (ii) the Collateral securing the Miscellaneous Secured Claim, or (iii) other less favorable treatment as to which the Holder, and the Debtors and the Liquidating Trustee will have agreed upon in writing. Any Holder of a Miscellaneous Secured Claim will retain its lien in the Collateral or the proceeds of the Collateral (to the extent that the Collateral is sold by the Debtors or the Liquidating Trustee free and clear of lien) to the same extent and with the same priority as the lien held as of the Petition Date until the time as (A) the Holder of the Miscellaneous Secured Claim (i) has been paid cash equal to the value of its Allowed Miscellaneous Secured Claim and (ii) has received a return of the Collateral securing the Miscellaneous Secured Claim, or (iii) has been afforded other less favorable treatment as to which the Holder and the Liquidating Trustee will have agreed upon in writing; or (B) the purported Lien has been determined by a Court order to be invalid or otherwise avoidable. To the extent that the Holder of an Allowed Miscellaneous Secured Claim also holds an Unsecured Claim pursuant to Section 506(a) of the Bankruptcy Code, on account of the Allowed Miscellaneous Secured Claim, the Unsecured Claim constitutes a Deficiency Claim that will be separately classified as a Class 7 General Unsecured Claim. 6 Non-tax Priority * UNIMPAIRED * Not entitled to vote on the Plan * Estimated recovery: 100% * Class 6 consists of Claims entitled to priority in payment pursuant to Section 507(a) of the Bankruptcy Code, other than Administrative Claims, Priority Tax Claims, or 503(b)(9) Claims. * On or as soon as reasonably practicable after the later of (i) the Initial Distribution Date or (ii) the Distribution Date immediately following the date the Non-tax Priority Claim becomes an Allowed Non-tax Priority Claim, the holder of the Allowed Non-tax Priority will receive from the Liquidating Trustee, in full satisfaction, settlement, release and discharge of and in exchange for the Allowed Non-tax Priority Claim (i) cash equal to the unpaid portion of the face amount of the Allowed Non-tax Priority Claim or (ii) other less favorable treatment as to which the Holder and the Liquidating Trustee will have agreed upon in writing. 7 General Unsecured * IMPAIRED Claims * Entitled to vote on the Plan * Estimated Recovery: ______% * Consists of claims that are not DIP Facility Claims, 503(b)(9) Claims, Administrative Claims, Priority Tax Claims, Secured Tax Claims, First Lien Term Loan Claims, Second Lien Term Loan Claims, Secured Tool Vendors Claims, Miscellaneous Secured Claims, Non-tax Priority Claims or Professional Fee Claims, and are not Intercompany Claims, Subordinated 510(c) Claims or Subordinated 510(b) Claims, but which term includes but not limited to, a Wachovia Swap Termination Claim. * On, or as soon as reasonably practicable, the later of (i) the Initial Distribution Date, or (ii) the Distribution Date following the date a General Unsecured Claim becomes allowed, the holder of the General Unsecured Claim will, in full satisfaction of its Claim, receive from the Liquidating Trustee, its Pro Rata share of the Class 7 Distribution Amount. 8 Intercompany * IMPAIRED Claims * Class 8 is deemed to have rejected the Plan and, therefore, Holders of Intercompany Claims are not entitled to vote to accept or reject the Plan. * Estimated Recovery: 0% * Consists of (i) any Claim held by a Debtor against another Debtor, including (a) any account reflecting intercompany book entries, (b) any Claim not reflected in the book entries that is held by a Debtor against another Debtor, (c) any derivative Claim asserted by or on behalf of one Debtor against another Debtor and (d) any Claim asserted by one Debtor against another Debtor as a result of a payment made by the claimant Debtor pursuant to a guarantee or similar instrument; and (ii) any Subsidiary Interests. * On the Effective Date, all Class 8 Claims will be cancelled as worthless, and Holders of Intercompany Claims will not be entitled to, and will not receive any property under the plan on account of the Intercompany Claim. To the extent that the Claims are eliminated, each Debtor holding an Intercompany Claim will be entitled to the same treatment as other Claims with the same status and priority. 9 Subordinated * IMPAIRED 510(c) Claims * Class 9 is deemed to have rejected the Plan and, therefore, Holders of Subordinated 510(c) Claims are not entitled to vote to accept or reject the Plan. * Estimated Recovery: 0% * Consists of Claims (i) subordinated pursuant to Section 510(c) of the Bankruptcy Code, or (ii) punitive or exemplary damages or for a fine or penalty, to the extent permitted by applicable law. * On the Effective Date, holders of Subordinated 510(c) Claims will not be entitled to, and will not receive any property under the Plan on account of the Subordinated 510(c) Claims. 10 Subordinated * IMPAIRED 510(b) Claims * Class 10 is deemed to have rejected the Plan and, therefore, Holders of Subordinated 510(b) Claims are not entitled to vote to accept or reject the Plan. * Estimated Recovery: 0% * Class 10 consists of Claims subordinated pursuant to Section 510(b) of the Bankruptcy Code, which will include any Claim arising from the rescission of a purchase or sale of any Old Common Stock, any Claim for damages arising from the purchase or sale of any Old Common Stock, or any Claim for reimbursement, contribution or indemnification on account of the Claim. * On the Effective Date, holders of Subordinated 510(b) Claims will not be entitled to, and will not receive any property under the Plan on account of the Subordinated 510(b) Claims. 11 Old Equity * IMPAIRED Interests * Class 11 is deemed to have rejected the Plan and, therefore, Holders of Old Equity Interests are not entitled to vote to accept or reject the Plan. * Estimated Recovery: 0% * Class 11 consists of legal, equitable, contractual, and other rights of any Person with respect to any capital stock or other ownership interest in any Debtor, whether or not transferable, and any option, warrant or right to purchase, sell, or subscribe for an ownership interest or other equity security in any Debtor. * On the Effective Date, the Old Equity Interests, including the Old Common Stock, will be canceled and each holder of the Stock will not be entitled to any property or interest in property on account of the Interest. No holder of a disputed claim will receive any distribution on account the Claim until it becomes an allowed claim. About Plastech Engineered Based in Dearborn, Michigan, Plastech Engineered Products, Inc. -- http://www.plastecheng.com/-- is a full-service automotive supplier of interior, exterior and underhood components. It designs and manufactures blow-molded and injection-molded plastic products primarily for the automotive industry. Plastech's products include automotive interior trim, underhood components, bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company, and Toyota, as well as Johnson Controls, Inc. Plastech is a privately held company and is the largest family- owned company in the state of Michigan. The company is certified as a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in the midwestern and southern United States. The company's products are sold through an in-house sales force. The company and eight of its affiliates filed for Chapter 11 protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C., represent the Debtors in their restructuring efforts. The Debtors chose Jones Day as their special corporate and litigation counsel. Lazard Freres & Co. LLC serves as the Debtors' investment bankers, while Conway, MacKenzie & Dunleavy provide financial advisory services. The Debtors also employed Donlin, Recano & Company as their claims and noticing agent. Joel D. Applebaum, Esq., at Clark Hill PLC, represents the Official Committee of Unsecured Creditors. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. (Plastech Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on Aug. 11, 2008, the Debtors has until Sept. 28, 2008, to file a Chapter 11 plan of reorganization. PLASTECH ENGINEERED: Wants to Assign License Amid Infor Objection ----------------------------------------------------------------- Plastech Engineered Products Inc. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Eastern District of Michigan to assume and assign a prepetition master agreement contract to JCIM LLC. The Debtors and BRAIN North America, Inc., are parties to a Master Agreement, entered prepetition, which BRAIN, trading as Agilisys Automotive, subsequently assigned to Infor Global Solutions (Michigan), Inc. The Debtors and Infor, thereafter, entered into several addenda to the Contract. After a successful bid by JCIM, LLC, on the Debtors' Interiors Business, the Court approved the sale pursuant to the parties' Asset Purchase Agreement. The Interiors APA entitled JCIM, among others, to designate which of the Debtors' executory contracts and unexpired leases it intends to assume or reject. Pursuant to JCIM's exercise of its designation rights, the Debtors sought Infor's consent to the assignment of its Contract to JCIM. Three days later, Infor said in a letter that it does not consent to the assignment. According to the Contract terms, the Debtors may not assign or otherwise transfer the Master Contract, including the accompanying rights, whether voluntary or by operation of law, without the prior written consent of Infor. The Contract provides, however, that Infor is prohibited from "unreasonably" withholding its consent to transfer the Contract. Federal copyright law does generally prohibit the assignment of rights under nonexclusive copyright license agreements, Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, says. However, where the nonexclusive copyright license agreement by its very terms permits the assignment of the contract to a third party, a debtor is permitted to assume and assign the agreement pursuant to Section 365 of the Bankruptcy Code, he points out. Section 365 provides that a trustee may not assume the contract or lease if there has been default; provided that, at the time of the assumption, the trustee (i) cures, (ii) provides adequate assurance of a cure, or (iii) provides adequate assurance of future performance under the contract or lease. To this end, Mr. Galardi says JCIM maintains adequate funding to operate the Interiors Business and to pay costs relating to the Contract through secured loan facilities from Johnson Controls, Inc. He adds lower courts have set "hypothetical" test or "actual" test on the assumption and assignment of certain contracts. Courts applying the hypothetical test disallow the assumption if the debtor cannot assign the contract under non-bankruptcy law without consent. Under the actual test, a court allows assumption of a contract under Section 365(c)(1) of the Bankruptcy Code, when the debtor in possession is the same entity as the prepetition debtor for contractual purposes. Consequently, where there is material change in the identity of the person rendering the performance, assumption is not allowed. He maintains that assumption and assignment of the Contract to JCIM satisfies the actual test and the hypothetical test. The applicable law, he adds, does not excuse Infor from rendering performance to JCIM. For these reasons, the Court should grant the assumption and assignment of the Contract to JCIM, Mr. Galardi avers. Mr. Galardi further notes that Infor has conditioned its consent to the assumption and assignment upon payment of a $750,000 assignment fee, in addition to annual maintenance fee generally provided for under the Contract. Since JCIM can demonstrate adequate assurance of future performance under the Contract, including all related cure amounts, the Debtors maintain that Infor's refusal is not because of JCIM's inability to perform under the Contract, but for Inform to extract financial accommodations from JCIM. Alternatively, the Debtors seek that the Contract "ride through" their Chapter 11 cases pursuant to Section 365(a), should the Court deny their request. This, they say, will allow them to use the Contract after the confirmation of a plan of liquidation. The Debtors relate that they intend to file a plan of liquidation in the coming weeks, and subsequently confirm the Plan. About Plastech Engineered Based in Dearborn, Michigan, Plastech Engineered Products, Inc. -- http://www.plastecheng.com/-- is full-service automotive supplier of interior, exterior and underhood components. It designs and manufactures blow-molded and injection-molded plastic products primarily for the automotive industry. Plastech's products include automotive interior trim, underhood components, bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company, and Toyota, as well as Johnson Controls, Inc. Plastech is a privately held company and is the largest family- owned company in the state of Michigan. The company is certified as a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in the midwestern and southern United States. The company's products are sold through an in-house sales force. The company and eight of its affiliates filed for Chapter 11 protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C., represent the Debtors in their restructuring efforts. The Debtors chose Jones Day as their special corporate and litigation counsel. Lazard Freres & Co. LLC serves as the Debtors' investment bankers, while Conway, MacKenzie & Dunleavy provide financial advisory services. The Debtors also employed Donlin, Recano & Company as their claims and noticing agent. Joel D. Applebaum, Esq., at Clark Hill PLC, represents the Official Committee of Unsecured Creditors. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. (Plastech Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) [REDACTED Aug. 13, 2008] PRIMEDIA INC: June 30 Balance Sheet Upside-Down by $134.8 Million ----------------------------------------------------------------- PRIMEDIA Inc. reported Thursday financial results for its second quarter ended June 30, 2008. At June 30, 2008, the company's consolidated balance sheet showed $255.6 million in total assets and $390.5 million in total liabilities, resulting in a roughly $134.8 million stockholders' deficit. The company's consolidated balance sheet at June 30, 2008, also showed strained liquidity with $50.9 million in total current assets available to pay $63.2 million in total current liabilities. Net income decreased $3.7 million to $1.9 million compared to second quarter 2007, due to the second quarter 2007 gain on the sale of Channel One, part of the company's Education segment, partially offset by a $24.1 million reduction in interest expense as a result of the company's lower debt level. Total net revenue decreased 2.2% to $76.8 million compared to second quarter 2007, reflecting a 2.1% increase in Apartments, offset by a 16.4% decline in New Homes and a 5.0% decline in DistribuTech. "My first 70 days as president and chief executive officer have been extremely positive, and I am more excited today about the prospects that exist at PRIMEDIA than I was coming into this position," said Charles Stubbs, president and chief executive officer of PRIMEDIA. "PRIMEDIA has one simple goal: to be the leading cross platform provider of content designed to help consumers find the right place to live." "I have quickly developed an initial perspective on our competitive position, existing products, services and technologies and our ongoing efforts to control costs. I have realized that we are in a great position to extend our leading brands and market strengths by implementing growth strategies that will benefit our customers and, as a result, our shareholders. We are now highly focused on our strategic and operational development, analyzing everything from product design to distribution optimization, implementing additional operational efficiencies and identifying our more significant growth opportunities. I look forward to reporting on our progress going forward." Commenting on the second quarter results, Mr. Stubbs said, "Our core Apartment Guide business – including ApartmentGuide.com – continued to generate improved performance in the second quarter, achieving its fourth consecutive quarter of year-over-year growth in both revenue and customer count. This track record is a direct result of producing a best in class product offering, one that is national in scope with features specific to local market needs. I believe that there is a meaningful opportunity for PRIMEDIA to take advantage of this market leadership and expand our portfolio of product offerings within the Apartment industry. As we expected, our New Homes and DistribuTech businesses continued to face pressure in the second quarter as the country is experiencing its worst real estate environment in decades. We are taking a long-term view on these businesses, aggressively pursuing operating efficiencies while focusing a great deal of effort on fine-tuning our products and services to best position the company when the housing market turns." Operating income increased 23.3% year-over-year to $9.5 million due to: -- A decrease in general and administrative expense of 10.0% due to a number of factors, the largest of which related to the transition the company's headquarters from New York to Norcross; and -- A decrease in marketing and selling expenses of 9.0%, resulting largely from a reduction in the number of employees. These were partially offset by an increase in restructuring costs. Free cash flow was ($1.1) million in the second quarter 2008 compared to ($32.8) million in the second quarter 2007. The improvement was primarily due to lower capital expenditures and a reduction in interest expense. Discontinued Operations As previously disclosed, the company sold its South Florida and Wisconsin Auto Guide publications, as well as its www.autoguide.com website, to Target Media Partners, an independent print and online publisher, at the end of the second quarter of 2008. In addition, the company closed its Atlanta Auto Guide during the second quarter. These transactions completed the company's exit from the Auto Guide business. As of June 30, 2008, the company's cash and cash equivalent balance decreased to $6.8 million versus $111.0 million as of June 30, 2007. The 2007 cash and cash equivalent balance was primarily due to divestiture proceeds generated from the sale of the Outdoors Group, which was subsequently used to pay down debt. The company had debt, net of cash, of $247.1 million at June 30, 2008, compared to net debt of $1.2 billion at June 30, 2007. The company had approximately $90.4 million of unused bank commitments available at June 30, 2008. Dividend The Board of Directors of the company has authorized a quarterly cash dividend of $0.07 per share of common stock, payable on Sept. 10, 2008, to stockholders of record on Aug. 18, 2008. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2008, are available for free at http://researcharchives.com/t/s?30ae About PRIMEDIA Inc. Headquartered in Atlanta, PRIMEDIA Inc.(NYSE: PRM) -- http://www.primedia.com/-- through its Consumer Source Inc. operation, is a provider of advertising-supported consumer guides for the apartment and new home industries. Consumer Source publishes and distributes more than 38 million guides – such as Apartment Guide and New Home Guide – to approximately 60,000 U.S. locations each year through its proprietary distribution network, DistribuTech. The company also distributes category-specific content on its leading websites, including ApartmentGuide.com, NewHomeGuide.com and Rentals.com, a comprehensive single unit real estate rental site. PROGRESSIVE MOLDED: Bankruptcy Case Converted to Chapter 7 ---------------------------------------------------------- The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware orders the conversion of the bankruptcy cases of Progressive Molded Products Inc., Progressive Marketing Inc., THL-PMPL Holding Corp., and Progressive Moulded Products Limited to cases under Chapter 7 of the Bankruptcy Code. The Court instructed the U.S. Trustee to appoint a Chapter 7 trustee as promptly and practicably under the circumstances. The Court denied the Debtors' cross-motion consenting to the conversion of the cases of PMPI and PMI, but calling for the dismissal of the Chapter 11 cases of Canada-based THL and PMPL. Judge Carey handed over the responsibility to the appointed Chapter 7 trustee, to decide whether to seek dismissal of any or all of the Debtors' cases. Judge Carey calls for a status conference on August 21, 2008 at 3:00 p.m. Judge Carey direct professionals retained under Sections 327 or 1103 of the Bankruptcy Code and other entities to file their fee applications or requests for compensation on or before Sept. 5, 2008 at 4:00 p.m. (Eastern Time). Objections to the fee applications must be filed with the Court and served on certain parties, including the Office of the U.S. Trustee, on or before September 25. The Court will convene a hearing to consider final approval of the fee applications on October 15, 2008, at 11:00 a.m. (Eastern Time). In a conversion of a case from Chapter 11 to Chapter 7, the debtor-in-possession is required to promptly turnover all property of the estate to the Chapter 7 Trustee appointed by the U.S. Trustee. The Chapter 7 Trustee displaces the company's Board of Directors and senior management. The U.S. Trustee will convene another 341 meeting in the Chapter 7 case. At that meeting, creditors may choose to elect a new Chapter 7 Trustee. The Chapter 7 trustee is expected to ask the Court to set a Chapter 11 Claims Bar Date -- a deadline by which all creditors with claims arising between the date the company filed its Chapter 11 petition and the date the case was converted must file their claims or be forever barred from asserting those claims. Claims arising after the conversion take priority over claims arising during the course of the Chapter 11 proceeding. Claims arising during the course of the Chapter 11 proceeding take priority over prepetition claims. JPMorgan Supports Dismissal JPMorgan Chase Bank, N.A., as administrative and collateral agent for the first lien lenders owed $276,938,661 as of the Petition Date under the Credit Agreement dated August 16, 2004, supports conversion of the U.S. Debtors' cases and the dismissal of the Canadian Debtors' Chapter 11 cases. On behalf of JPMOrgan, Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, said "cause" exists pursuant to Section 1112(b)(4)(A) of the Bankruptcy Code to convert or dismiss the Debtors' Chapter 11 cases. He noted that the Debtors incurred substantial losses in the amount of $19,800,000 as of July 2008, and the only revenue the Debtors are receiving is from the liquidation of existing accounts receivable or other collateral. Mr. Collins, however, says the dismissal rather than the conversion of the Canadian Debtors' cases is preferable as it will permit the Companies' Creditors Arrangement Act to serve as the sole forum for the Canadian Debtors' remaining liquidation and will significantly reduce the streamline administrative costs. ROI Notifies of Unsatisfied Claim ROI Engineering informs the Court that Progressive Molded Products Inc. owes it a total of $39,057 for the goods it delivered on May 5, 2008. In a letter sent to the Court, ROI Engineering says it was unable to meet the July 28, 2008 deadline because it received the notice regarding the conversion of the Debtors' cases on July 30, 2008. About Progressive Molded Ontario, Canada-based Progressive Molded Products Inc. -- designs and manufactures component parts for General Motors Corp., Ford Motor Company and Chrysler, LLC. Its interior automotive subsystems are used for the "Big Three" automakers' top-selling platforms, including lightweight trucks, SUVs, mini-vans, cross- over vehicles, and passenger cars. The company and three of its affiliates filed for creditor protection under Chapter 11 of the U.S. Bankruptcy Code before the United States Bankruptcy Court for the District of Delaware on June 20, 2008 (Lead Case No. 08-11253). Kelley A. Cornish, Esq. and Brian S. Hermann, Esq. at Paul, Weiss, Rifkind Wharton & Garrison LLP and Pauline K. Morgan, Esq., Joseph M. Barry, Esq., and Donald J. Bowman, Jr., Esq. at Young, Conaway, Stargatt & Taylor represent the Debtors in their restructuring efforts. The Progressive Molded Products entities also commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Ontario Superior Court of Justice (Commercial List) on June 20. Sheryl E. Seigel, Esq. and Alex A. Ilchenko, Esq. at Lang Michener LLP are their solicitors. Alex F. Morrison at Ernst & Young, Inc., has been appointed CCAA monitor and Kevin J. Zych, Esq. at Bennett Jones LLP serves as his solicitor. PROGRESSIVE MOLDED: US Trustee Names Andrew Vara as Ch. 7 Trustee ----------------------------------------------------------------- Roberta A. DeAngelis, acting United States Trustee for Region 3, has appointed Andrew R. Vara, as an interim trustee for Progressive Molded Products Inc. and its debtor-affiliates' estates. In Chapter 7, subject to supervision by the Bankruptcy Court, the Chapter 7 trustee takes over the assets of the debtor's estate, reduces them to cash, and makes distributions to creditors, subject to the debtor's right to retain certain exempt property and the rights of secured creditors. The U.S. Trustee is expected to convene another meeting of creditors under Section 341 of the Bankruptcy Code. At that meeting, creditors may choose to elect a new Chapter 7 Trustee. About Progressive Molded Ontario, Canada-based Progressive Molded Products Inc. -- designs and manufactures component parts for General Motors Corp., Ford Motor Company and Chrysler, LLC. Its interior automotive subsystems are used for the "Big Three" automakers' top-selling platforms, including lightweight trucks, SUVs, mini-vans, cross- over vehicles, and passenger cars. The company and three of its affiliates filed for creditor protection under Chapter 11 of the U.S. Bankruptcy Code before the United States Bankruptcy Court for the District of Delaware on June 20, 2008 (Lead Case No. 08-11253). Kelley A. Cornish, Esq. and Brian S. Hermann, Esq. at Paul, Weiss, Rifkind Wharton & Garrison LLP and Pauline K. Morgan, Esq., Joseph M. Barry, Esq., and Donald J. Bowman, Jr., Esq. at Young, Conaway, Stargatt & Taylor represent the Debtors in their restructuring efforts. The Progressive Molded Products entities also commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Ontario Superior Court of Justice (Commercial List) on June 20. Sheryl E. Seigel, Esq. and Alex A. Ilchenko, Esq. at Lang Michener LLP are their solicitors. Alex F. Morrison at Ernst & Young, Inc., has been appointed CCAA monitor and Kevin J. Zych, Esq. at Bennett Jones LLP serves as his solicitor. PROGRESSIVE MOLDED: Has Until September 5 to File Schedules ----------------------------------------------------------- The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware extends: -- to August 15, 2008, the deadline of THL-PMPL Holdings Corp. and Progressive Moulded Products Limited to file their schedules and statements; and -- to September 5, 2008, the deadline of Progressive Molded Products Inc. and Progressive Marketing, Inc. to file their schedules of assets and liabilities, and statements of financial affairs. As reported in the Troubled Company Reporter on July 30, 2008, the Debtors ask the Court for an extension to file its Schedules of Assets and Liabilities to give the Debtors enough time to complete and enhance the accuracy of the Schedules and Statements while not prejudicing the rights of other claimants and parties-in-interest. The Official Committee of Unsecured Creditors asked the Court to deny the Debtors' request for an extension. The Debtors, however, asked the Court to overrule the Committee's objection and said that they see no legitimate reason to file statements and schedule at this time if the conversion or dismissal of their Chapter 11 cases is approved. Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, explained that after a conversion of the the U.S. Debtors' cases to Chapter 7, the trustee will have responsibility for fulfilling its reporting and other duties described in Section 704 of the Bankruptcy Code, including, among other things: (a) closing the estate as expeditiously as is compatible with the best interest of parties-in-interest; (b) being accountable for all property received; (c) investigating the financial affairs of the Debtors; and (d) making a final report and filing a final account of the administration of the estate with the Court and with the U.S. Trustee. Therefore, the types of informational reports to be filed during the U.S. Debtors' Chapter 7 cases should be entrusted to the Chapter 7 trustee under the oversight of the Bankruptcy Court, Ms. Morgan asserts. Ms. Morgan added that if the request for dismissal of the Canadian Debtors' Chapter 11 cases is approved, the Canadian Debtors will no longer be subject to the Bankruptcy Code and its reporting requirements. Ms. Morgan noted that the Companies' Creditors Arrangement Act proceeding of the U.S. Debtors and the Canadian Debtors will remain pending in Canada under the oversight of the Canadian Court, as well as the supervision of the Monitor. Hence, the Debtors will remain subject to the CCAA's informational requirements that will protect the Debtors, their creditors and other interested parties. About Progressive Molded Ontario, Canada-based Progressive Molded Products Inc. -- designs and manufactures component parts for General Motors Corp., Ford Motor Company and Chrysler, LLC. Its interior automotive subsystems are used for the "Big Three" automakers' top-selling platforms, including lightweight trucks, SUVs, mini-vans, cross- over vehicles, and passenger cars. The company and three of its affiliates filed for creditor protection under Chapter 11 of the U.S. Bankruptcy Code before the United States Bankruptcy Court for the District of Delaware on June 20, 2008 (Lead Case No. 08-11253). Kelley A. Cornish, Esq. and Brian S. Hermann, Esq. at Paul, Weiss, Rifkind Wharton & Garrison LLP and Pauline K. Morgan, Esq., Joseph M. Barry, Esq., and Donald J. Bowman, Jr., Esq. at Young, Conaway, Stargatt & Taylor represent the Debtors in their restructuring efforts. The Progressive Molded Products entities also commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Ontario Superior Court of Justice (Commercial List) on June 20. Sheryl E. Seigel, Esq. and Alex A. Ilchenko, Esq. at Lang Michener LLP are their solicitors. Alex F. Morrison at Ernst & Young, Inc., has been appointed CCAA monitor and Kevin J. Zych, Esq. at Bennett Jones LLP serves as his solicitor. PROGRESSIVE MOLDED: Committee Can Hire Arent Fox as Counsel ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave authority to the Official Committee of Unsecured Creditors for Progressive Molded Products Inc. and its debtor-affiliates to retain Arent Fox LLP as counsel, nunc pro tunc to July 7, 2008. Arent Fox will, among other things: (a) assist, advise and represent the Committee in its consultation with the Debtors relative to the administration of their Chapter 11 cases; (b) assist, advise and represent the Committee in analyzing the Debtors' assets and liabilities, investigate the extent and validity of liens and participate in and review any proposed asset sales or dispositions; (c) attend meetings and negotiate with the representatives of the Debtors; (d) assist the Committee in the review, analysis and negotiation of any plan of reorganization and any negotiation of the disclosure statement; (e) assist the Committee in the review, analysis, and negotiation of any financing or funding agreements; (f) take all necessary action to protect and preserve the interests of the Committee, including, without limitation, the prosecution of actions on its behalf, negotiations concerning all litigation in which the Debtors are involved, and review and analysis of all claims filed against the Debtors' estate; (g) prepare on behalf of the Committee all necessary motions, applications, answers, orders, reports and papers in support of positions taken by the Committee; and (h) perform all other necessary legal services in these cases. Arent Fox will be compensated in accordance with the firm's customary rates: Professional Rate/Hour ------------ --------- Partners $455-$790 Of Counsel $455-$750 Associates $290-$515 Paraprofessionals $145-$260 Arent Fox intends to apply for allowance of compensation and reimbursement of expenses in accordance with the applicable provisions of the Bankruptcy Code. Andrew I. Silfen, partner and chair of Financial Restructuring Group at Arent Fox LLP, assured the Court that his firm is a disinterested party as the term is defined in Section 101(14) of the Bankruptcy Code, and have no interest adverse to the Committee, the Debtors and their creditors. About Progressive Molded Ontario, Canada-based Progressive Molded Products Inc. -- designs and manufactures component parts for General Motors Corp., Ford Motor Company and Chrysler, LLC. Its interior automotive subsystems are used for the "Big Three" automakers' top-selling platforms, including lightweight trucks, SUVs, mini-vans, cross- over vehicles, and passenger cars. The company and three of its affiliates filed for creditor protection under Chapter 11 of the U.S. Bankruptcy Code before the United States Bankruptcy Court for the District of Delaware on June 20, 2008 (Lead Case No. 08-11253). Kelley A. Cornish, Esq. and Brian S. Hermann, Esq. at Paul, Weiss, Rifkind Wharton & Garrison LLP and Pauline K. Morgan, Esq., Joseph M. Barry, Esq., and Donald J. Bowman, Jr., Esq. at Young, Conaway, Stargatt & Taylor represent the Debtors in their restructuring efforts. The Progressive Molded Products entities also commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Ontario Superior Court of Justice (Commercial List) on June 20. Sheryl E. Seigel, Esq. and Alex A. Ilchenko, Esq. at Lang Michener LLP are their solicitors. Alex F. Morrison at Ernst & Young, Inc., has been appointed CCAA monitor and Kevin J. Zych, Esq. at Bennett Jones LLP serves as his solicitor. PROGRESSIVE MOLDED: Gets Court OK to Hire Donald McKenzie as CRO ---------------------------------------------------------------- THL-PMPL Holdings Corp. and Progressive Moulded Products Limited sought and obtained approval from Justice Morawetz of the Ontario Superior Court of Justice, Commercial List, to hire Donald S. Mackenzie as chief restructuring officer to implement an orderly wind down of their operations, and retain the services of his firm, Conway MacKenzie, Inc. The Canadian Debtors, also designated in the CCAA cases as the Canadian Applicants, are currently winding down their operations, and their customers General Motors Corp., Ford Motor Company and Chrysler LLC are in the process of removing their tooling, and purchasing and removing certain property from the Debtors. Alex A. Ilchenko and Sheryl E. Seigel, of Lang Michener LLP, solicitors of the Canadian Debtors, told the Ontario Court, which is overseeing the Canadian Debtors' bankruptcy cases in Canada pursuant to The Companies' Creditors Arrangement Act, that the company's chief executive officer and their chief financial officer have resigned, leaving only the chief operating officer. They informed the Court that a CRO was urgently needed in order to have adequate corporate governance to continue with the orderly wind-down. Ms. Seigel relates that Tim Safar, the COO of the Canadian Debtors, is providing management leadership responsibilities at Progressive. He has been assisted by Mr. MacKenzie and his firm Conway MacKenzie, Inc., in their role as financial advisor to Progressive since April 2008. Mr. Safar, however, requires additional management support with financial and restructuring expertise to provide oversight with respect to the wind-down of the operations and implementation. Pursuant to the CRO Agreement, Mr. MacKenzie and CM&D will, among other things: (a) implement the terms of the Initial CCAA Order and subsequent orders of the Ontario Court; (b) realize and dispose of the property of the Canadian Applicants including negotiating and entering into any agreements necessary with respect to the sale of the property and take any steps as the CRO deems necessary to effect the wind-down and termination of their business and operations; (c) take appropriate steps to maintain control over all receipts and disbursements arising out of the operations and take all necessary to control and use all bank accounts and to open new accounts as appropriate, with the approval of the prepetition agents; (d) take steps for the preservation, protection, and realization of the property of the Canadian Applicants; (e) execute documents to convey title of any of the property; (f) retain and terminate employees and otherwise deal with human resources issues in relation to the Applicants; (g) implement and complete the Employee Retention Program, including the execution of any documents required to be executed under the provisions of the ERP; (h) apply for and obtain any vesting order which may be necessary or appropriate, in the opinion of the CRO, in order to convey the property to a purchaser or purchasers; (i) collect accounts receivable of the Canadian Applicants including negotiations and settlement of disputes in connection with the collection of receivables; (j) represent the Canadian Applicants in any negotiations with any other parties; (k) settle litigation and disputes relating to third party tooling and receivables,or otherwise; (l) vacate any leased premises occupied by the Canadian Applicants, in accordance with the provisions of the Initial Order; (m) provide information to the Monitor and the prepetition agents regarding the business and affairs of the Applicants; (n) commence any proceeding and seek any order, or respond to any motion or application brought by any person, in the CCAA proceeding; (o) deal with the cases in the United States Bankruptcy Court for the District of Delaware on behalf of the Applicants, including instructing U.S. counsel, filing any materials or pleadings required and communicating with the U.S. Trustee or any committee representing creditors; (p) exercise any rights of the Canadian Applicants as a shareholder of Progressive Molded Products Inc. and Progressive Marketing, Inc.; and (q) take all steps and incur any expenses and obligations necessary in connection with the orderly win-down of the Canadian Applicants. The CRO Agreement provides that MacKenzie and CM&D will continue to charge for their services in acting as the CRO on the same hourly rates basis at which they were billing as financial advisor: Professional Hourly Rates ------------ ------------- Donald S. MacKenzie $695 John P. Kotas $395 Mandy W. Townsend $315 Daniel S. Stocker $275 Kristy A. Druskinis $110 The CRO Agreement also provides that the Applicants will indemnify and hold harmless MacKenzie, the restructuring associates, CM&D and its principals and other employees from all expenses incurred in connection with the engagement. About Progressive Molded Ontario, Canada-based Progressive Molded Products Inc. -- designs and manufactures component parts for General Motors Corp., Ford Motor Company and Chrysler, LLC. Its interior automotive subsystems are used for the "Big Three" automakers' top-selling platforms, including lightweight trucks, SUVs, mini-vans, cross- over vehicles, and passenger cars. The company and three of its affiliates filed for creditor protection under Chapter 11 of the U.S. Bankruptcy Code before the United States Bankruptcy Court for the District of Delaware on June 20, 2008 (Lead Case No. 08-11253). Kelley A. Cornish, Esq. and Brian S. Hermann, Esq. at Paul, Weiss, Rifkind Wharton & Garrison LLP and Pauline K. Morgan, Esq., Joseph M. Barry, Esq., and Donald J. Bowman, Jr., Esq. at Young, Conaway, Stargatt & Taylor represent the Debtors in their restructuring efforts. The Progressive Molded Products entities also commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Ontario Superior Court of Justice (Commercial List) on June 20. Sheryl E. Seigel, Esq. and Alex A. Ilchenko, Esq. at Lang Michener LLP are their solicitors. Alex F. Morrison at Ernst & Young, Inc., has been appointed CCAA monitor and Kevin J. Zych, Esq. at Bennett Jones LLP serves as his solicitor. PROPEX INC: Wants Plan-Filing Deadline Extended to October 20 ------------------------------------------------------------- Propex Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Eastern District of Tennessee to extend their exclusive periods for filing a plan of reorganization until October 20, 2008, and for soliciting votes for that plan until December 19, 2008. An extension of the exclusive periods is necessary to provide the Debtors with sufficient time to negotiate the terms of a Chapter 11 plan while allowing them to meet their obligations under the DIP Credit Agreement, Henry J. Kaim, Esq., at King & Spalding, LLP, in Houston, Texas, states. According to Mr. Kaim, cause exists to extend the exclusive periods considering the size and complexity of the Debtors' cases. He declares that the Debtors have $585,700,000 in assets and approximately $527,400,000 in liabilities. The Debtors operate in 40 countries around the world with approximately 3,200 employees. Mr. Kaim adds that 590 claims have been filed against the Debtors as of July 16, 2008. Mr. Kaim asserts that since the bankruptcy filing, the Debtors' management and employees have devoted substantial time and effort to a number of tasks, including obtaining $60,000,000 postpetition financing, reviewing executory contracts and leases, and providing the Debtors' business plan to the DIP lenders and creditors. The Debtors clarify that the extension request is not intended to pressure creditors. Rather, the Debtors assert they need more time to propose a viable plan of reorganization as contemplated in the DIP Credit Agreement. Mr. Kaim maintains there are several unresolved contingencies in the Debtors' bankruptcy cases. An important contingency to resolve is the issue raised by the Official Committee of Unsecured Creditors with respect to the validity of a lien on the Debtors' foreign subsidiaries, which may affect the proposed plan negotiations, Mr. Kaim points out. The Debtors are still reviewing their contracts and lease agreements to determine the benefits they contribute to their estates. About Propex Inc. Headquartered in Chattanooga, Tennessee, Propex Inc. -- http://www.propexinc.com/-- produces geosynthetic, concrete, furnishing, and industrial fabrics and fiber. It is produces primary and secondary carpet backing. Propex operates in North America, Europe, and Brazil. The company and its debtor-affiliates filed for Chapter 11 protection on Jan. 18, 2008 (Bankr. E.D. Tenn. Case No. 08- 10249). The debtors' has selected Edward L. Ripley, Esq., Henry J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in Houston, Texas, to represent them. As of Sept. 30, 2007, the debtors' balance sheet showed total assets of $585,700,000 and total debts of $527,400,000. The Debtors' exclusive period to file a plan of reorganization expired on Aug. 21, 2008. (Propex Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) QUALITY HOME BRANDS: S&P Says CreditWatch Status Developing ----------------------------------------------------------- Standard & Poor's Ratings Services revised its CreditWatch status on Cary, N.C.-based Quality Home Brands Holdings LLC to developing from negative. As of March 31, 2008, Quality Home Brands had about $462.6 million of debt (including about $44 million of holding company payment-in-kind notes, and lease and pension adjustments). S&P originally placed the 'CCC' rating on Quality Home Brands on CreditWatch on April 8, 2008, following the company's weak operating performance and weaker-than-expected credit measures for the year ended Dec. 31, 2007. The CreditWatch revision also reflects S&P's concerns that the company will remain challenged to restore operating results and meet bank financial covenants in the remainder of 2008, given the weak housing market and current economic conditions. The CreditWatch revision follows Quality Home Brands' receipt of an amendment to its first-lien credit facility, which will provide covenant relief and improve the company's liquidity position. The amendment requires the company's financial sponsor to contribute $20 million in additional common equity no later than Aug. 12, 2008, which Quality Home Brands will apply to the first-lien term loan. "We will monitor the timing of the equity contribution to ensure that it is made by the due date and will also review Quality Home Brands' 2008 second-quarter operating results when available," noted Standard & Poor's credit analyst Bea Chiem. If current operating results stabilize and the bank amendment becomes effective, we expect to raise the company's corporate credit rating to 'B-'. "The CreditWatch developing listing continues to reflect the possibility that we could lower the ratings on Quality Home Brands, if it cannot improve its liquidity position and/or negative operating trends worsen," she continued. RADIOSHACK CORP: Fitch to Rate Proposed $300MM Conv. Notes 'BB' --------------------------------------------------------------- Fitch Ratings expects to assign a rating of 'BB' to RadioShack Corporation's proposed $300 million convertible senior unsecured notes due 2013. The proceeds from the offering will be used to finance the net cost of the convertible note hedge and warrant transactions that RadioShack expects to enter into with affiliates of Citigroup Global Markets Inc. and Banc of America Securities LLC, as well as share repurchases in connection with the convertible notes offering. The balance will be used for general corporate purposes, including working capital uses as RadioShack's $300 million revolving credit facility is scheduled to terminate in June 2009. The Rating Outlook is Negative. The rating reflects RadioShack's broad geographic store base and recent improvement in operating results and credit metrics due to management's turnaround plan. In the last 12 months ending June 30, 2008, EBIT margin increased to 8.9% from 4.2% in fiscal 2006. This resulted in credit metrics strengthening, with total adjusted debt/EBITDAR improving to 3.6 times versus 4.8x and EBITDAR to interest plus rent increasing to 2.3x versus 1.8x during the comparable time period. Fitch anticipates RadioShack's leverage will increase following the convertible notes issuance. However, the convertible notes will provide the company with additional liquidity when the $300 million credit facility expires next year. In addition, Fitch expects the company will remain prudent in its financial management and does not expect RadioShack to repurchase any additional shares in fiscal 2008 besides the share repurchases in conjunction with the convertible notes offering. The rating also considers the continued soft operating trends in many of RadioShack's business segments, Fitch's concern about RadioShack's long-term ability to produce sustainable revenue growth and profitability, and a highly competitive operating environment. RALLY PARTNERS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Rally Partners, Inc. dba Great Race dba Great American Race 7500 E. Arapahoe Rd., Ste. 155 Centennial, CO 80112 Bankruptcy Case No.: 08-21987 Chapter 11 Petition Date: August 11, 2008 Court: District of Colorado (Denver) Judge: Michael E. Romero Debtor's Counsel: Jeffrey Weinman, Esq. Email: jweinman@epitrustee.com William A. Richey, Esq. Email: lkraai@weinmanpc.com 730 17th St., Ste. 240 Denver, CO 80202 Tel: (303) 572-1010 Total Assets: $35,500 Total Debts: $2,469,331 A copy of Rally Partners, Inc's petition is available for free at: http://bankrupt.com/misc/cob08-21987.pdf RASC SERIES: Moody's Publishes Underlying Ratings of Class A Notes ------------------------------------------------------------------ Moody's Investors Service published, at the issuers' request, the underlying ratings on these notes that are guaranteed by Financial Guaranty Insurance Company. The underlying rating reflects the intrinsic credit quality of the notes in the absence of the guarantee. The current ratings on these notes are consistent with Moody's practice of rating insured securities at the higher of the guarantor's insurance financial strength rating and any underlying rating that is public. The determination of the underlying ratings considered qualitative and quantitative factors, including structural features of the transactions. Complete rating actions are: Issuer: RASC Series 2001-KS1 Class Description: Class A-I-5 -- Current Rating: Aa3 -- Financial Guarantor: Financial Guaranty Insurance Company (B1, negative outlook) -- Underlying Rating: Aa3 Class Description: Class A-I-6 -- Current Rating: Aa3 -- Financial Guarantor: Financial Guaranty Insurance Company (B1, negative outlook) -- Underlying Rating: Aa3 Class Description: Class A-II -- Current Rating: Aa2 -- Financial Guarantor: Financial Guaranty Insurance Company (B1, negative outlook) -- Underlying Rating: Aa2 Issuer: RASC Series 2004-KS7 Class Description: Class A-I-3 -- Current Rating: Ba3 -- Financial Guarantor: Financial Guaranty Insurance Company (B1, negative outlook) -- Underlying Rating: Ba3 Class Description: Class A-I-4 -- Current Rating: B1 -- Financial Guarantor: Financial Guaranty Insurance Company (B1, negative outlook) -- Underlying Rating: B1 Class Description: Class A-I-5 -- Current Rating: B1 -- Financial Guarantor: Financial Guaranty Insurance Company (B1, negative outlook) -- Underlying Rating: B2 Class Description: Class A-I-6 -- Current Rating: B1 -- Financial Guarantor: Financial Guaranty Insurance Company (B1, negative outlook) -- Underlying Rating: B1 Class Description: Class A-II-A -- Current Rating: B1 -- Financial Guarantor: Financial Guaranty Insurance Company (B1, negative outlook) -- Underlying Rating: B2 Class Description: Class A-II-B2 -- Current Rating: Baa3 -- Financial Guarantor: Financial Guaranty Insurance Company (B1, negative outlook) -- Underlying Rating: Baa3 Class Description: Class A-II-B3 -- Current Rating: B1 -- Financial Guarantor: Financial Guaranty Insurance Company (B1, negative outlook) -- Underlying Rating: B3 Issuer: RASC Series 2004-KS9 Class Description: Class A-I-3 -- Current Rating: A2 -- Financial Guarantor: Financial Guaranty Insurance Company (B1, negative outlook) -- Underlying Rating: A2 Class Description: Class A-I-4 -- Current Rating: Baa2 -- Financial Guarantor: Financial Guaranty Insurance Company (B1, negative outlook) -- Underlying Rating: Baa2 Class Description: Class A-I-5 -- Current Rating: Baa2 -- Financial Guarantor: Financial Guaranty Insurance Company (B1, negative outlook) -- Underlying Rating: Baa2 Class Description: Class A-I-6 -- Current Rating: Baa2 -- Financial Guarantor: Financial Guaranty Insurance Company (B1, negative outlook) -- Underlying Rating: Baa2 Class Description: Class A-II-2 -- Current Rating: Ba2 -- Financial Guarantor: Financial Guaranty Insurance Company (B1, negative outlook) -- Underlying Rating: Ba2 Class Description: Class A-II-3 -- Current Rating: B1 -- Financial Guarantor: Financial Guaranty Insurance Company (B1, negative outlook) -- Underlying Rating: B3 Class Description: Class A-II-4 -- Current Rating: B1 -- Financial Guarantor: Financial Guaranty Insurance Company (B1, negative outlook) -- Underlying Rating: B3 Issuer: RASC Series 2005-EMX5 Class Description: Class A-2 -- Current Rating: Aa3 -- Financial Guarantor: Financial Guaranty Insurance Company (B1, negative outlook) -- Underlying Rating: Aa3 Class Description: Class A-3 -- Current Rating: B1 -- Financial Guarantor: Financial Guaranty Insurance Company (B1, negative outlook) -- Underlying Rating: B1 Issuer: RASC Series 2007-EMX1 Class Description: Class A-I-1 -- Current Rating: A1 -- Financial Guarantor: Financial Guaranty Insurance Company (B1, negative outlook) -- Underlying Rating: A1 Class Description: Class A-I-2 -- Current Rating: Ba2 -- Financial Guarantor: Financial Guaranty Insurance Company (B1, negative outlook) -- Underlying Rating: Ba2 Class Description: Class A-I-3 -- Current Rating: B1 -- Financial Guarantor: Financial Guaranty Insurance Company (B1, negative outlook) -- Underlying Rating: Caa2 Class Description: Class A-I-4 -- Current Rating: B1 -- Financial Guarantor: Financial Guaranty Insurance Company (B1, negative outlook) -- Underlying Rating: Caa2 Class Description: Class A-II -- Current Rating: B1 -- Financial Guarantor: Financial Guaranty Insurance Company (B1, negative outlook) -- Underlying Rating: B2 REVLON INC: Appoints Tamara Mellon as New Board Member ------------------------------------------------------ Revlon, Inc.'s board of directors has elected Tamara Mellon as a new director, effectively immediately. The election of Ms. Mellon will increase the size of Revlon's board of directors to ten members and increase the number of independent Directors to seven members. Revlon will continue to have a majority of independent directors on its board. Ms. Mellon is the president and founder of J. Choo Limited, a leading manufacturer and international retailer of glamorous, ready-to-wear women's shoes and accessories based in London, England. She has served in a senior executive capacity with Jimmy Choo since its inception in 1996. Ms. Mellon, 41, also serves on the board of directors and on the Creative Advisory Board of The H Company Holdings, LLC, a privately held holding company which owns and manages the Halston fashion design company. Commenting on the appointment of Ms. Mellon, Revlon chairman Ronald O. Perelman said, "We would like to welcome Tamara to Revlon's Board and believe that the Company will benefit greatly from Tamara's experience and leadership. [Ms. Mellon] is an exceptional business woman with an extensive background in business development, management and the consumer market. The Board and senior management look forward to working with Tamara and utilizing her expertise as we continue to build our brands and further strengthen our business to achieve our objective to generate sustainable, profitable sales growth." Commenting on her appointment to Revlon's board of directors, Ms. Mellon said, "I am thrilled to become a director of Revlon, an iconic brand in beauty and one that represents the image of a confident glamorous woman. I look forward to leveraging my consumer insights and my experience in the luxury fashion business to help the company grow its Revlon brand, and its other strong brands around the world. Also, I am proud to be part of a company that does so much to benefit women's health and related causes." About Revlon Inc. Headquartered in New York City, Revlon Inc. (NYSE: REV) -- http://www.revloninc.com/-- is a worldwide cosmetics, hair color, beauty tools, fragrances, skincare, anti- perspirants/deodorants and personal care products company. The company's brands, which are sold worldwide, include Revlon(R), Almay(R), Mitchum(R), Charlie(R), Gatineau(R) and Ultima II(R). At June 30, 2008, the company's consolidated balance sheet showed $883.7 million in total assets and $1.94 billion in total liabilities, resulting in a roughly $1.06 billion stockholders' deficit. RIDGEMOUR MEYER: Files for Chapter 11 Bankruptcy in Manhattan ------------------------------------------------------------- Ridgemour Meyer Properties LLC filed a chapter 11 petition with the U.S. Bankruptcy Court for the Southern District of New York in Manhattan. Christopher Scinta of Bloomberg News says that Ridgemour had a dispute with joint-venture partner Ginsburg Development Companies LLC. Bloomberg, citing court documents, relates that Ridgemour owns three commercial properties in White Plains, New York. Ridgemour was awarded sole control over the White Plains properties through a recent arbitration, Bloomberg states citing court documents. The Debtor's bankruptcy filing, was intended to avoid some of the arbitration ruling that reportedly directed Ridgemour to pay Ginsburg in connection with a residential development in White Plains, Bloomberg quotes Ginsburg president, Martin Ginsburg, as stating. Mr. Ginsburg said that "[b]ankruptcy is often the last resort of scoundrels." He added that both companies "had a very bad partnership," Bloomberg notes. Ridgemour listed $25 million in assets and $23 million in debts, based on court documents. Wachovia Bank N.A. asserts $3.7 million in disputed claim. Ridgemour president A.J. Rotonde stated in a court document that the Debtor's properties may increase in value through a lease- development program and when the litigation and arbitration costs are cut, Bloomberg relates. New York-based Ridgemour Meyer Properties LLC is a real estate developer. RURAL CELLULAR: Completes $2.66 Bil. Purchase Deal with Verizon --------------------------------------------------------------- Verizon Wireless, a joint venture of Verizon Communications and Vodafone, completed its purchase of Rural Cellular Corporation, doing business as Unicel, for $2.66 billion in cash and assumed debt. The acquisition will expand Verizon Wireless' network coverage to many rural markets around the country and increases the company's customers by more than 625,000. The purchase will increase Verizon Wireless' licensed coverage area by 4.7 million people, and will add licenses covering markets in Maine, New Hampshire, Massachusetts, Alabama, Mississippi, Minnesota, North Dakota, South Dakota, Wisconsin, Idaho, Washington and Oregon. Market Integration Verizon Wireless will begin to serve customers in Rural Cellular markets that will be merged with Verizon Wireless' operations. The company will continue to use the Unicel brand for the next several months, as it works to integrate networks, and deploy CDMA technology and high-speed wireless broadband service. Verizon Wireless will maintain Rural Cellular's existing GSM networks to continue serving the roaming needs of other GSM carriers' customers. Customers in markets to be integrated will receive a letter in the next few weeks informing them about the recently completed purchase. Also, before the network conversion in an area is complete, customers will receive a letter from Verizon Wireless explaining their service transition. Customers who will require a new handset due to network enhancements will receive information about handset options, which will include a variety of free and low-cost devices. Customers do not need to take any action at this time. Virtually all Rural Cellular employees have received employment offers and have accepted them. During the network conversion period, nearly every Unicel-branded store will remain open to serve customers. Unicel will be re-branded as Verizon Wireless in phases when customers are transitioned to the Verizon Wireless network and billing conversions are completed, beginning early in 2009 and continuing through mid-year. Divestiture Markets The completion of the Rural Cellular purchase required approvals by the Department of Justice and the Federal Communications Commission. As a result of the approval process, Verizon Wireless has placed Rural Cellular licenses and assets in Vermont, New York and parts of Washington in a management trust. The trust will continue to operate the markets under the Unicel brand until they are sold to a buyer, and these markets will not be integrated with Verizon Wireless operations. In addition, it is expected that Rural Cellular's markets in southern Minnesota and western Kansas will be divested as a result of the regulatory approval process for Verizon Wireless' proposed purchase of Alltel Corporation. Consequently, those markets also will continue to be served under the Unicel brand, and will not be integrated into Verizon Wireless. Wireless service for Unicel customers in the markets named above -- Vermont, New York, Kansas, and parts of Washington and Minnesota -- will remain unchanged and customers in these markets do not need to take any action at this time. Financial Information Verizon Wireless expects to realize approximately $1 billion in synergies in reduced roaming and operations expenses. Under the terms of the acquisition, Verizon Wireless paid $45 in cash for each share of Rural Cellular's common stock for a total common equity price of approximately $764 million on a fully diluted basis. Immediately prior to the closing of the transaction, Rural Cellular called for redemption of all its outstanding long-term notes, with a redemption date of September 5, 2008. Following the closing of the transaction, Verizon Communications Inc. guaranteed these notes. Verizon Wireless disclosed its agreement to acquire Rural Cellular in July 2007, pending regulatory approval. The FCC approved the transaction earlier this month. About Verizon Communications Verizon Communications, Inc. -- http://www.verizon.com/-- is engaged in providing communication services. The two segments of the company are Wireline and Domestic Wireless. Wireline communications services include voice, Internet access, broadband video and data, next generation Internet protocol network services, network access, long distance and other services. The company provides these services to consumers, carriers, businesses and government customers both domestically and internationally in 150 countries. Domestic Wireless' products and services include wireless voice, data products and other services, and equipment sales across the U.S. About Rural Cellular Corp. Based in Alexandria, Minnesota, Rural Cellular Corporation (Nasdaq: RCCC) -- http://www.unicel.com/-- provides wireless communication services to Midwest, Northeast, South and Northwest markets located in 15 states. On Oct. 4, 2007, the company disclosed that its shareholders voted to approve the merger agreement providing for the acquisition of Rural Cellular Corporation by Verizon Wireless for approximately $2.67 billion in cash and assumed debt. The acquisition is subject to certain closing conditions, including governmental and regulatory approvals, and is expected to close during the second quarter of 2008. Rural Cellular Corp.'s consolidated balance sheet at March 31, 2008, showed $1.3 billion in total assets, $1.9 billion in total liabilities, and $205.7 million in redeemable preferred stock, resulting in a $785.4 million total stockholders' deficit. * * * Rural Cellular Corporation still carries Moody's Ratings' 'B1' Corp. Family and Probability of Default Ratings. SAINT ANNES: Files for Chapter 11 Bankruptcy in Delaware -------------------------------------------------------- Dawn McCarty of Bloomberg News reports that Saint Annes Club LLC filed a voluntary petition under Chapter 11 of the Bankruptcy Code before the United States Bankruptcy Court for the District of Delaware. The company listed assets of between $10 million and $50 million, and debts of between $1 million and $10 million, Bloomberg says. The company owes at least $590,956 in claims to unsecured creditors, including SGM, which is owed $186,000; Tebco Irrigation, $102,560; and Midlantic Machinery Inc., $120,918, the report notes. The company, the report says, will pay its unsecured creditors. Headquartered in Middletown, Delaware, Saint Annes Club LLC - http://www.saintannesclub.com/-- is a family owned business. The company's courses are Back Creek, the Levels and Frog Hollow. SALLY BEAUTY: June 30 Balance Sheet Upside-Down by $701 Million --------------------------------------------------------------- Sally Beauty Holdings Inc. disclosed Thursday financial results for its third quarter ended June 30, 2008. At June 30, 2008, the company's consolidated balance sheet showed $1.49 billion in total assets, $2.19 billion in total liabilities, and $6.1 million in stock options subject to redemption, resulting in a roughly $701.0 million stockholders' deficit. On a GAAP basis, net earnings for the fiscal 2008 third quarter more than doubled to reach $29.4 million, compared to $13.4 million for the fiscal 2007 third quarter. Consolidated net sales for the fiscal 2008 third quarter were $676.8 million versus net sales of $634.9 million in the fiscal 2007 third quarter, an increase of 6.6%. This increase is attributed to consolidated same stores growth of 3.4% over the fiscal 2007 third quarter, the addition of new stores, and the acquisition of Pro-Duo, N.V on May 8, 2008. For the fiscal 2008 third quarter, adjusted net earnings, a non- GAAP measure, were $24.5 million, after adjusting for $4.9 million in non-cash interest credit from marked-to-market changes in the fair value of two of the company's interest rate swaps. For the fiscal 2007 third quarter, adjusted net earnings were $11.0 million, after adjusting for $2.5 million in non-cash interest credit. "As demonstrated by our strong financial performance, we continue to execute on our initiatives set forth at the beginning of the 2008 fiscal year and deliver strong results despite the challenging business environment," stated Gary Winterhalter, president and chief executive officer. "We significantly improved the bottom line year-over-year and consolidated net sales and same store sales comparables have sequentially improved for the third quarter in a row. We believe our operating results are further evidence that our business is fairly recession resistant." Consolidated gross profit for the fiscal 2008 third quarter was $315.1 million, an increase of 8.3% over last years gross profit of $290.9 million. Gross profit as a percentage of sales was 46.6%, an 80 basis point improvement over 45.8% in the fiscal 2007 third quarter. For the fiscal 2008 third quarter, selling, general and administrative (SG&A) expenses were $226.7 million, or 33.5% of sales, a 140 basis point improvement over the fiscal 2007 third quarter metric of 34.9% of sales and total SG&A of $221.5 million. Fiscal 2008 third quarter SG&A expense increased $5.2 million, or 2.3%, compared to the fiscal 2007 third quarter primarily due to acquisition related costs for Pro-Duo and increased rent expense for new stores. Interest expense, net of interest income, for the fiscal 2008 third quarter was $29.9 million and included $7.6 million of non- cash credit related to two of the company's interest rate swap transactions. Fiscal 2007 third quarter interest expense included $4.0 million of non-cash credit for the marked-to-market change in fair value for these interest rate swap transactions. Income taxes were $17.3 million for the fiscal 2008 third quarter. The company's effective tax rate for fiscal 2008 is currently projected to be approximately 36.0%. Financial Position, Capital Expenditures and Working Capital Cash and cash equivalents as of June 30, 2008, were $33.7 million. As of June 30, 2008, the company had $306.9 million available for additional borrowings under its asset-based (ABL) facility, subject to borrowing base limitations, as reduced by outstanding letters of credit. The company paid down $4.2 million of its Senior Term Loans during the fiscal 2008 third quarter. The company's debt, excluding capital leases, totaled $1.8 billion as of June 30, 2008. Capital expenditures in the fiscal 2008 third quarter were $10.0 million. During the fiscal 2008 third quarter the company completed the acquisition of Pro-Duo for a total of approximately $30.0 million. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2008, are available for free at http://researcharchives.com/t/s?30b2 About Sally Beauty Based in Denton, Texas, Sally Beauty Holdings Inc. (NYSE: SBH) -- http://www.sallybeautyholdings.com/-- is an international specialty retailer and distributor of professional beauty supplies. Through the Sally Beauty Supply and Beauty Systems Group businesses, the company sells and distributes through over 3,500 stores, including approximately 200 franchised units, throughout the United States, the United Kingdom, Canada, Puerto Rico, Mexico, Japan, Ireland, Spain and Germany. Beauty Systems Group stores, branded as CosmoProf or Armstrong McCall stores, along with its outside sales consultants, sell up to 9,800 professionally branded products including Paul Mitchell, Wella, Sebastian, Goldwell, and TIGI which are targeted exclusively for professional and salon use and resale to their customers. SBARRO INC: S&P Cuts Rating to 'CCC+' on Covenant Compliance Worry ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Melville, N.Y.-based Sbarro Inc. to 'CCC+' from 'B-'. Concurrently, S&P lowered the ratings on the company's $25 million revolving facility and $183 million first-lien term loan to 'B-' from 'B+', and revised the recovery ratings on these facilities to '2' from '1'. S&P also lowered the rating on the $150 million senior notes to 'CCC-' from 'CCC+' and affirmed the recovery rating of '6' on this debt issue. The outlook is negative. "The downgrade reflects the growing possibility that Sbarro will breach financial covenants under the senior secured credit facilities because poor operating performance is continuing to erode EBITDA," said Standard & Poor's credit analyst Mariola Borysiak. The EBITDA cushion narrowed significantly in the quarter ended June 30, 2008, and the maximum leverage covenant becomes more restrictive in the fourth quarter ending Dec. 31, 2008. "Pro forma for the change in the covenant level, Sbarro would be out of compliance," added Ms. Borysiak. SEMGROUP LP: Court OKs Use of Cash Collateral for White Cliff ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware permitted SemGroup L.P. and its debtor-affiliates to use some cash collateral for the completion of the $240 million White Cliff Pipeline project, The Calgary Herald reported. "The existing investment will be imperiled, if not lost," and the finished project promises "meaningful value" to the company and creditors, Judge Brendan Linehan Shannon said, according to the report. Parties Stipulate on the Management of White Cliff The Debtors, General Electric Capital Corporation, PE-Pipeline Services, LLC, and White Cliffs Pipeline, LLC, in a Court-approved stipulation, agreed to a temporary restraining order regarding the management and operations of White Cliffs. The Troubled Company Reporter said on July 28, 2008, that GECC, as administrative agent for a group of lenders on a $120,000,000 loan, on July 18, 2008, notified the Debtors that they are in default under the prepetition secured loan, and that all of SemCrude Pipeline, L.L.C.'s membership interest in non-debtor White Cliffs Pipeline, LLC, ceased and became vested in GECC. Pursuant to the stipulation, SemCrude Pipeline LLC continued until Aug. 8, 2008, in the managing the day-to-day physical operations of White Cliffs, subject to the oversight and supervision of PE- Pipeline, which will have final decision-making authority. The Debtors provided GECC and PE-Pipeline a detailed cash budget for the period through Aug. 8, 2008, setting forth (i) all costs that must be funded during the period for the construction of the White Cliffs to continue in the ordinary course, and (ii) all sources of cash available to the Debtors to pay the interim project costs. The Debtors will provide access to PE-Pipeline to books, records, and other documents relating to White Cliffs. About SemGroup L.P. SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq. at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc. The CCAA stay expires on Aug. 20, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. (SemGoup Bankruptcy News, Issue No. 4 and 5; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SEMGROUP LP: Pioneer Asserts $30 Million Pre-Bankruptcy Claims -------------------------------------------------------------- Pioneer Natural Resources Company said that it has approximately $30 million of unpaid pre-bankruptcy claims for condensate sold to certain subsidiaries of SemGroup, L.P. In July 2008, SemGroup, L.P. announced that it and certain of its subsidiaries filed petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Pioneer is seeking payment of its pre-bankruptcy claim as a critical supplier under a Supplier Protection Program created by SemGroup and approved by the Bankruptcy Court on July 23. The intent of this program is for SemGroup to pay certain critical suppliers their pre-bankruptcy claims in full and continue paying such suppliers in exchange for their willingness to continue performance. It is premature at this time to predict the timing of payments under this program. The condensate supplied to SemGroup is produced from Pioneer's West Panhandle gas field and is processed at Pioneer's Fain plant in the Texas Panhandle. Pioneer continues to supply condensate to SemGroup. However, the Company is monitoring SemGroup's situation closely and will sell its condensate to alternate purchasers should it become necessary to do so. About Pioneer Pioneer Natural Resources Company -- http://www.pxd.com/-- is a large independent oil and gas exploration and production company, headquartered in Dallas, with operations in the United States, South Africa and Tunisia. About SemGroup L.P. SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq. at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc. The CCAA stay expires on Aug. 20, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. (SemGoup Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SEMGROUP LP: U.S. Trustee Forms Seven-Member Creditors' Panel ------------------------------------------------------------- Pursuant to Section 1102(a)(1) of the Bankruptcy Code, Roberta A. DeAngelis, Acting United States Trustee for Region 3, appointed seven members to the Official Committee of Unsecured Creditors in the chapter 11 case of SemGroup, L.P., and its 24 debtor affiliates: 1. Central Crude Corporation Attn: Charles B. Wilson PO Box 21110 Wichita, Kansas 67208 Tel: 316-337-8378 Fax: 316-265-7372 2. BP Oil Supply Company Attn: Daniel Rosen 28301 Ferry Road Warrenville, Illinois 60555 Tel: 630-836-4544 Fax: 630-836-4600 3. ConocoPhillips Company Attn: George A. Padilla 600 North Dairy Ashford, CH 2116-B Houston, Texas 77079 Tel: 281-293-6795 Fax: 281-293-2690 4. Crude Marketing & Transportation, Inc. Attn: Phillip M. Burch 16 E. 16th Street, Ste. 300 Tulsa, Oklahoma 74119 Tel: 918-398-2715 Fax: 918-584-4128 5. HSBC Bank USA, National Association Attn: Sandra E. Horwitz 452 Fifth Ave. New York, New York 10018 Tel: 212-525-1358 Fax: 212-525-1300 6. Pacific Investment Management Company LLC Attn: David C. Flattum 840 Newport Center Drive, Suite 100 Newport Beach, California 92660 Tel: 949-720-6000 Fax: 949-720-6361 7. Western Asset Management Company Attn: W. Stephen Venable, Jr. 385 E. Colorado Blvd. Pasadena, California 91101 Tel: 626-844-9400 Fax: 626-844-4451 All of the members of the Creditors' Committee are listed in the Debtors' Chapter 11 petition as one of their largest unsecured trade creditors. BP Oil, Central Crude, ConocoPhillips, and Crude Marketing hold trade debts totaling more than $320,000,000 against the Debtors: BP Oil $159,004,586 Central Crude 52,196,576 ConocoPhillips 74,178,604 Crude Marketing 40,841,569 HSBC Bank is the successor Indenture Trustee for the 8-3/4% Senior Notes due 2015 issued by SemGroup, L.P., and SemGroup Finance Corp. PIMCO holds an $86,000,000 bond debt against the Debtors. Western Asset holds a $77,000,000 bond debt against Debtors. About SemGroup L.P. SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq. at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc. The CCAA stay expires on Aug. 20, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. (SemGoup Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SEMGROUP LP: Five Canadian Units File Separate CCAA Petitions ------------------------------------------------------------- Affiliates of SemGroup L.P., SemCAMS ULC and SemCanada Crude Company, filed petitions under the Companies' Creditors Arrangement Act before the Court of Queen's Bench of Alberta, Judicial District of Calgary. Five other affiliates of the SemCAMS and SemCanada filed similar CCAA petitions: * SemCanada Energy Company * A.E. Sharp, Ltd. * CEG Energy Options, Inc. * 319278 Nova Scotia Company * 1380331 Alberta ULC The CCAA Applicants are represented by A. Robert Anderson, Q.C., Esq., at Blake, Cassels & Graydon LLP, in Calgary, Alberta. About SemGroup L.P. SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq. at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc. The CCAA stay expires on Aug. 20, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. (SemGoup Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SEMGROUP LP: Monitor Provides Update on CCAA Proceedings -------------------------------------------------------- Ernst & Young, Inc., the appointed monitor of SemCanada Crude Company and affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act, reported that on Aug. 5, 2008, SemCAMS ULC, SemCanada Crude Company, SemCanada Energy Company, A.E. Sharp, Ltd., CEG Energy Options, Inc., 319278 Nova Scotia Company, and 1380331 Alberta ULC, on the one hand, and the Bank of Montreal, on the other hand, have reached an agreement as to the use of deposits at the bank. The Monitor also reported that the 319278 is seeking permission from the CCAA Court to execute a shareholder resolution for the sale of Wholesale Energy Group, ULC, to Universal Energy Corporation. 319278 owns 75% of WEG. According to the Monitor, WEG's book of business as of July 22, 2008, was negative because 319278 lost all of the contracted natural gas purchase positions needed for the WEG retail sales. WEG has limited cash on hand and does not have the financial resources to contract for the required natural gas purchases to lock down the book of business. The Monitor said Universal's offer for WEG is the best and highest offer received by 319278. Universal's offer contemplates: -- payment of $2,175,000 for WEG for its customer contracts plus the actual costs incurred by WEG for the supply of natural gas to WEG customer accounts for August; -- payment of $375,000 to Lesley Green, WEG's sole director, for consulting fees; -- 319278's acquisition of the remaining 25% shareholding in WEG for $1.00; and -- the transfer of certain office fixed assets to the the holder of the 25% shareholder interest in WEG. About SemGroup L.P. SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq. at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc. The CCAA stay expires on Aug. 20, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. (SemGoup Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SHADOW LAKES: Case Summary & Two Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Shadow Lakes Development, LLC 9112 Hard Dr. Foley, AL 36535 Bankruptcy Case No.: 08-12887 Type of Business: The Debtor is a real estate developer. Chapter 11 Petition Date: August 8, 2008 Court: Southern District of Alabama (Mobile) Debtor's Counsel: A. Richard Maples, Jr., Esq. Email: maplex@bellsouth.net Maples & Fontenot, L.P. P.O. Box 1281 Mobile, AL 36633-1281 Tel: (251) 432-2629 Fax: (251) 432-3629 Total Assets: $1,350,557 Total Debts: $2,146,000 A copy of Shadow Lakes Development, LLC's petition is available for free at http://bankrupt.com/misc/alsb08-12887.pdf SPRINT NEXTEL: DBRS Rates Proposed $3 Bil. Preferred Shares 'BB' ---------------------------------------------------------------- DBRS has assigned the Sprint Nextel Corporation proposed issuance of $3.0 billion of Cumulative Perpetual Convertible Preferred Shares a rating of BB. The trend is Negative. This offering is being done by way of Rule 144a under the Securities Act of 1933. The shares will have an aggregate liquidation preference of $1,000 per share for a total of $3.0 billion and will be convertible into shares of Sprint Nextel common stock. The company also expects to grant the initial purchasers a 30-day option to purchase up to 450,000 shares of additional preferred shares. DBRS expects the proceeds from this offering to be used for general corporate purposes, which may include debt reduction. STRATOS GLOBAL: S&P Affirms 'B+' Rating on Better Performance ------------------------------------------------------------- Standard & Poor's Ratings Services said it revised the outlook on Newfoundland-based satellite communications provider Stratos Global Corp. to positive from stable. At the same time, S&P affirmed the ratings, including the 'B+' long-term corporate credit rating, on the company. At June 30, Stratos had US$362 million of reported debt outstanding. "The outlook revision reflects Stratos' improving operating performance, which has allowed the company to improve its adjusted debt leverage, cash flow protection metrics, and liquidity," said Standard & Poor's credit analyst Madhav Hari. Inmarsat PLC's exercise of its option to acquire Stratos (after April 14, 2009) is a key near-term catalyst that could lead S&P to raise the ratings. Another important factor is the favorable renewal of the company's commercial framework agreement with Inmarsat. The ratings on Stratos reflect the below-average industry profile of the remote communications sector, which is a highly competitive niche segment within the broader telecommunications sector; highly volatile revenues and profitability; and the ongoing revenue shift to lower-margin, very small aperture terminal and fourth- generation Inmarsat broadband offerings, which will result in future operating margins remaining below historical levels. The ratings also reflect uncertainty about Stratos' ability to favorably renew its wholesale agreement with Inmarsat, as well as the company's high (albeit improving) debt leverage and credit measures. The positive outlook reflects Stratos' improved operating performance, which should allow the company to modestly improve its credit measures. Inmarsat's acquisition of Stratos is a key near-term catalyst that could lead S&P to raise the ratings. Alternatively, S&P could lower the ratings or revise the outlook to stable on Stratos should the company fail to meet S&P's operational expectations, if there is evidence that Inmarsat will not acquire Stratos, or if Stratos fails to reach a favorable operating agreement with Inmarsat before the agreement expires on April 14, 2009. SUN MICROSYSTEMS: Moody's Confirms Ba1 Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service has affirmed the ratings of Sun Microsystems Inc. and revised the outlook to negative from stable. These ratings were affirmed: -- Corporate Family Rating -- Ba1 -- Probability of Default Rating -- Ba1 -- $550 Million Senior Unsecured Notes due 2009 -- Ba1 (LGD-5, 76%) -- Shelf Registration for Senior Unsecured, Subordinated Debt and Preferred Securities - (P)Ba1 (LGD-5, 76%); (P)Ba2 (LGD- 6, 99%); and (P)Ba2 (LGD-6, 99%) The negative outlook reflects Moody's expectations of continued deterioration in Sun's operating profile in view of declining product sales, reduced profitability and market share contraction amid the current softening global macro-economic environment. The negative outlook also incorporates concerns about the company's ability to support somewhat aggressive financial policies given the cyclical nature of its network computing business. For example, how the company manages share repurchases and acquisitions during a period of weaker operating performance will be an important factor in Moody's analysis of Sun's Ba1 ratings. Ratings could be downgraded should Moody's witness a pronounced increase in business or financial risk, loss of market share, ASP pressure and/or gross/operating margin erosion. Sun's underperformance stems from lower (average) unit prices resulting in gross margins below 45% in the last two quarters. The company's product mix has changed as the demand for high-end servers (which carry richer margins) has declined and revenues from lower margin mid-range and enterprise storage products increased as a percent of revenues. According to the most recent server industry report from Gartner (for the quarter ended March 2008), Sun has fallen to fourth place after tying Dell (A2/Stable) in 2007 for the number three server position worldwide. In recent quarters, Dell has recorded strong revenue and shipment growth that outpaced the industry. Moody's affirmation of Sun's Ba1 rating recognizes the company's solid global market position, improving (though modestly concentrated) geographic and customer diversification, stable recurring revenue stream in the form of long-term support service contracts and management's track record of maintaining relatively good financial flexibility. The rating is constrained by the following factors, which Moody's will monitor closely going forward: (i) the new $1 billion stock repurchase program, which follows its soon-to-be completed $3 billion share buyback program (implemented May 2007); (ii) potential appetite for further large cash acquisitions; (iii) declining, albeit sizeable cash and marketable securities balance; (iv) potential for weaker free cash flow generation stemming from declining ASPs and reduced end market demand for high-end servers from financial services, telecommunications and retail customers, where Sun has large exposures; (v) a challenging U.S. macro- environment (U.S. revenues down 8% in fiscal 2008); sluggish EMEA growth (5% revenue growth in fiscal 2008 vs. 7.6% in fiscal 2007); and signs of sharply lower growth in Asia-Pacific (2.7% revenue growth in fiscal 2008 vs. 11.2% in fiscal 2007); and (vi) Sun's ability to manage its operating expenses in a more difficult business environment. Moody's expects Sun to generate lower gross cash flow over at least the next quarter as it adjusts to lower sales volumes and manages reduced/delayed demand from U.S. and Asian customers. Despite operating weakness, Sun's financial position remains solid. Cash and liquid long-term investments currently approximate $3.3 billion (down from $5.9 billion at fiscal year end 2007) compared to $1.3 billion of senior unsecured debt. Sun Microsystems Inc., based in Santa Clara, California, is a leading worldwide provider of network computing systems and service solutions for enterprise customers. Net revenues for the fiscal year ended June 30, 2008 were $13.9 billion. SYNCORA HOLDINGS: Fitch Revises Watch to Positive from Evolving --------------------------------------------------------------- Fitch Ratings has revised the Rating Watch of Syncora Holdings Ltd. (Syncora, formerly Security Capital Assurance Ltd.) and its financial guaranty subsidiaries to Positive from Evolving. Syncora Guarantee Inc. (SGI, formerly XL Capital Assurance Inc.) Syncora Guarantee (U.K.) Ltd. (SG-UK, formerly XL Capital Assurance (U.K.) Ltd.) Syncora Guarantee Re Ltd. (SGRe, formerly XL Financial Assurance Ltd.) -- Insurer financial strength 'CCC'. Syncora Holding Ltd. -- Long Term Issuer 'CCC-'; -- $250 million fixed/floating series A perpetual non-cumulative preference shares 'CCC-'. Twin Reefs Pass-Through Trust -- $200 million pass-through trust securities 'CCC-'. Syncora announced on Aug. 5 that it had finalized a transaction with Merrill Lynch & Co. and Merrill Lynch International under which the parties terminated eight structured finance collateralized debt obligations transactions executed as credit default swaps totaling $3.74 billion in exchange for a payment from SGI of $500 million to MLI. The elimination of the ML SF CDO transactions, as well as potential commutations with financial counterparties on other SF CDOs, is significantly capital accretive from the standpoint of Syncora and a positive for the credit profile. SGI and SGRe should be able to release a significant level of reserves, allowing its statutory capital to return to a positive value and materially reduces simulated modeled losses under Fitch's proprietary financial guaranty capital model. Additionally, XL Capital Ltd (XL, 46% owner of Syncora prior to the ML commutation) has reached agreement to make a final payment of about $1.9 billion in exchange for termination of any remaining exposure XL had to Syncora from its facultative reinsurance contract, excess of loss reinsurance contract and unlimited guaranty in support of any losses payable on Syncora's pre-August 2006 financial guaranty portfolio. The XL agreement is also capital accretive and a positive for the credit profile of Syncora. The Rating Watch Positive reflects: -- the positive implications of enhancements to Syncora's financial and capital position given the execution of the settlement agreements; and -- the possibility that Syncora's ratings could be significantly upgraded upon full assessment of the remaining insured portfolio. However, Fitch has not received updated financial and insured portfolio information to fully assess recent portfolio performance, including the decline in the credit quality of Syncora's RMBS exposures. Therefore, the 'CCC' IFS ratings on the financial guaranty subsidiaries reflect this uncertainty and remaining weakness in the company's exposure to its remaining SF CDOs and direct RMBS. Until this updated information is received Fitch is unable to determine the ultimate rating following the positive developments from these settlements. Fitch notes that the pending ratings assessment of Syncora would incorporate not only the improvement in Syncora's capital position, but also Fitch's view of various qualitative factors. These would include Syncora's franchise value and business outlook, which appear to be highly uncertain due to the negative implications from the company's exposure to mortgage-related credits. In its previous release on Syncora, Fitch suggested the possibility of considering the settlements with financial counterparties, such as ML, as 'distressed' under the agency's rating criteria. In evaluating the settlement terms of the commutations with ML, Fitch would note the terms of these agreements were executed at pricing levels that are well below the aggregate economic loss Fitch expects Syncora would have incurred on these policies. A determination of a Distressed Debt Exchange ultimately incorporates some level of judgment. One factor suggesting this would not constitute a DDE in this instance was the substantial contractual guarantees and reinsurance support provided to Syncora by XL. Ultimately, Syncora received over $1.9 billion from XL to terminate these coverages. Syncora is a Bermuda domiciled holding company whose primary operating subsidiaries, SGI and SGRe, provide insurance, reinsurance, and financial products and services throughout the United States and internationally. For March 31, 2008, Syncora reported consolidated GAAP assets of $3.8 billion and shareholders equity of approximately $348 million. On an aggregated basis net par outstanding totaled $155 billion as of March 31, 2008. SYNTAX-BRILLIAN: Gets Final OK to Use Silver's $23 Mil. DIP Loan ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Syntax-Brillian Corporation and its debtor-affiliates to obtain, on a final basis, up to $23,000,000 in postpetition financing under a DIP credit and guaranty agreement from a consortium of financial institutions led by Silver Point Finance LLC, as administrative agent and collateral agent. The facility is expected to mature by Sept. 2, 2008. As reported in the Troubled Company Reporter on July 11, 2008, the Debtors was allowed to access, in an interim basis, up to $7,500,000 in postpetition financing. On Oct. 26, 2007, the Debtors entered into a prepetition agreement with Silver Point to provide financing of up to $250,000,000 in loans in the aggregate. The proceeds of the loans were used to pay an existing credit facility with preferred bank and the outstanding balance owed to CIT Group/Commercial Services, Inc. pursuant to an account receivable factoring agreement dated Nov. 22, 2006. The remaining balance of the proceeds were applied to pay transaction fees and for general working capital -- including the purchase of panel inventory. The factoring agreement was terminated on July 7, 2008. The obligations under the prepetition credit agreement are secured by a first priority blanket lien on substantially all of the Debtors' assets, plus a pledge of all of the capital stock of each of the Debtors' domestic subsidiaries and Vivitar's foreign subsidiaries -- excluding Vivitar Japan Co., Ltd. The obligations are guaranteed by both Vivitar and the Debtors. As reported in the Troubled Company Reporter on July 9, 2008, Vivitar Corporation did not file for bankruptcy. The Debtors said that it has initiated the sale of Vivitar for $60 million to Olevia International Group LLC, the designated stalking-horse bidder. The Court also authorized the Debtors to use Silver Point's cash collateral until Aug. 29, 2008. A full-text copy of the cash flow forecast is available for free at: http://ResearchArchives.com/t/s?2f51 Under the DIP agreement, the facility will incur interest at a per annum rate equal to the great of, either: a) the Base Rate plus 8% and 15.5%; or b) the LIBOR Rate plus 9% and 13.5%. The proceeds of the loans will be used to (i) pay for fees, costs, expenses and other obligations owed to the lenders, (ii) fund ongoing working capital requirements of the Debtors including payments of administrative expenses incurred by professional advisors to the Debtors, and (iii) to pay carve-out expenses. The DIP loan is subject to a carve-out for payment to professional advisors retained by the Debtors or the committee, and fees incurred by the clerk of the Bankruptcy Court and the U.S. Trustee. There is a $200,000 carve-out for payment of fees incurred by professionals advisors to the Debtors and the committee. To secure their DIP obligations, Silver Point will be granted a superpriority administrative expense claims over all administrative expenses of any kind, pursuant to Section 507(b) of the Bankruptcy Code. The DIP agreement contains appropriate and customary events of default. A full-text copy of the DIP Guaranty and Credit Agreement is available for free at: Part One: http://ResearchArchives.com/t/s?2f52 Part Two: http://ResearchArchives.com/t/s?2f53 Headquartered in Tempe, Arizona, Syntax-Brillian Corporation (Nasdaq:BRLC) -- www.syntaxbrillian.com -- manufactures and markets LCD HDTVs, digital cameras, and consumer electronics products include Olevia(TM) brand high-definition widescreen LCD televisions and Vivitar brand digital still and video cameras. Syntax-Brillian is the sole shareholder of California-based Vivitar Corporation. The company and two of its affiliates -- Syntax-Brillian SPE, Inc., and Syntax Groups Corp. -- filed for Chapter 11 protection on July 8, 2008 (Bankr. D. Delaware Lead Case No.08-11409 through 08-11409. Dennis A. Meloro, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig LLP, represent the Debtors in their restructuring efforts. The U.S. Trustee for Region 3 has yet to appoint creditors to serve on an Official Committee of Unsecured Creditors. When the Debtors filed for protection against their creditors, they listed total assets of $175,714,000 and total debts of $259,389,000. TEXAS INDUSTRIES: S&P Affirms 'BB-' on Sr. Unsec. Notes on Add-on ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' issue-level rating on Texas Industries Inc.'s (TXI; BB-/Stable/--) existing senior unsecured notes following the company's announcement of a proposed $250 million add-on, which would bring the issue to $500 million. The recovery rating on this debt remains unchanged at '3' , indicating the expectation of meaningful (50%-70%) recovery in the event of a payment default. TXI will use proceeds from the proposed notes to repay its outstanding $150 million senior term loan and for general corporate purposes, including capital expenditures. Pro forma for the proposed transactions, S&P expects that TXI will have about $575 million in adjusted debt outstanding, resulting in debt to EBITDA of about 3x. The ratings on Dallas-based TXI reflect its much smaller scale of operations than global competitors', the cement industry's cyclicality and seasonality, high capital and energy intensity, and market and asset concentration in Texas and California. Supporting the ratings are the high long-term demand for cement in the U.S. relative to total production capacity, good operating margins, adequate liquidity, and credit measures that are in line with the rating. TRANSMERIDIAN: Has Until Oct. 31 to Meet AMEX's Listing Standards ----------------------------------------------------------------- Transmeridian Exploration Incorporated announced that the American Stock Exchange has accepted the company's plan to regain compliance with the AMEX's continued listing standards. On May 22, 2008, the company received notice from the AMEX staff indicating that the company is not in compliance with Section 1003(a)(iv) of the AMEX Company Guide due to sustained losses which are so substantial in relation to its overall operations or its existing financial resources, or its financial condition has become so impaired that it appears questionable, in the opinion of the AMEX, as to whether the company will be able to continue operations or meet its obligations as they mature. The company was afforded the opportunity to submit a plan of compliance to the AMEX and on June 5, 2008 presented its plan to the AMEX. The plan outlined the actions the company has taken and will take that it expects would bring it into compliance with the AMEX's continued listing standards. On July 30, 2008, the AMEX notified the company that it accepted the company's plan and granted an extension until October 31, 2008 to regain compliance with the AMEX's continued listing standards. The company will be subject to periodic review by the AMEX during the extension period, and the company must continue to provide the AMEX staff with updates in conjunction with the initiatives of its plan. Failure to make progress consistent with the plan or to regain compliance with the AMEX's continued listing standards by the end of the extension period could result in being delisted from the AMEX. About Transmeridian Exploration Based in Houston, Transmeridian Exploration Inc. (AMEX: TMY) -- http://www.tmei.com/ -- is an independent energy company established to acquire and develop oil reserves in the Caspian Sea region of the former Soviet Union. The company's primary oil and gas property is the South Alibek Field in the Republic of Kazakhstan covered by License 1557 and the related exploration and production contracts with the government of Kazakhstan. Transmeridian Exploration's consolidated balance sheet at March 31, 2008, showed $402.2 million in total assets, $341.2 million in total liabilities, and $92.5 million in redeemable convertible preferred stock, resulting in a $31.5 million total stockholders' deficit. Going Concern Doubt UHY LLP in Houston raised substantial doubt on Transmeridian's ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm pointed to the company's negative working capital, stockholders' deficit, and operating losses since its inception. The company had a net working capital deficit of approximately $56.2 million and a stockholders' deficit of approximately $31.5 million at March 31, 2008. Approximately 89.0% of the company's accounts payable at March 31, 2008, have been outstanding more than 120 days. TRONOX WORLDWIDE: Tightening Liquidity Cues Fitch's 'CCC' IDR ------------------------------------------------------------- Fitch Ratings has downgraded Tronox Worldwide LLC's ratings as: -- Issuer Default Rating to 'CCC' from 'B'; -- $250 million senior secured bank revolver to 'B'/RR1' from 'BB'/RR1'; -- $125 million (at March 31, 2008) senior secured term loan to 'B'/RR1' from 'BB'/RR1'; -- $350 million senior unsecured to 'CCC'/RR4 from 'B'/RR4'. The Rating Outlook remains Negative. Tronox Worldwide LLC and Tronox Finance Corp. are co-issuers of the senior unsecured notes. The downgrade reflects a tightening of liquidity and reduced flexibility following a weak quarter as well as the outlook for continued cost pressure and anemic growth. The ratings reflect Tronox's market position (12% of world market, third largest producer), geographic reach, and strong customer retention. Growth rate projections for titanium dioxide are modest and tend to track gross domestic product, and competition tends to be on price. In recent periods, margins have been squeezed for TiO2 producers and relief is not expected in the current year. Fitch expects the cash drain in the second half of 2008 to be less than the first half given conversion of accounts receivable and return to normal operations at the Uerdingen, Germany and the Kwinana, Western Australia plants. Tronox has reduced headcount, cut its dividend and reduced its capital spending. In addition, Tronox has obtained covenant amendments to its senior secured credit agreement in February 2008 and July 2008. In its second quarter earnings release, Tronox stated that it 'continues to evaluate all strategic alternatives to improve the business and address ongoing challenges, including development opportunities, mitigation of legacy liabilities, capital restructuring, land sales and all other options available to it. The company has hired financial advisor Rothschild Inc. to further assist in its evaluation of strategic alternatives.' The Negative Rating Outlook reflects the possibility of further downgrades if Tronox fails to obtain covenant relief as needed or otherwise improve its liquidity. Tronox is one of the leading global producers and marketers of titanium dioxide. In addition, Tronox produces electrolytic manganese dioxide, sodium chlorate and boron-based and other specialty chemicals. The company generated Operating EBITDA of $109.9 million on $1.4 billion in sales in 2007. UNITED RENTALS: S&P Affirms 'BB-' Corp. Credit Rating ----------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on United Rentals Inc. and subsidiary United Rentals (North America) Inc., including the 'BB-' corporate credit rating on both entities, and removed them from CreditWatch, where they were placed with negative implications on June 10, 2008. The CreditWatch listing followed the announcement that United Rentals Inc. (URI) had bought $679 million of its preferred stock and was offering to buy up to $679 million of its common stock for a total of $1.4 billion in a mostly debt-financed transaction. The outlook is negative. "The rating affirmation with a negative outlook reflects our expectation that URI should, despite its aggressive financial policies and the weakening nonresidential construction spending environment, be able to generate sufficient free cash flow to maintain leverage at about 3.5x," said Standard & Poor's credit analyst John R. Sico. "Downside rating risk exists if end markets weaken further than expected or if URI fails to reduce debt as planned." S&P remains concerned by the addition of a significant amount of debt on the balance sheet at a time when conditions in end markets, especially for nonresidential construction, are expected to weaken. However, the company had reduced leverage to about 2.6x at March 31, 2008, and the repurchases added about one additional turn to the leverage on a pro forma basis. While S&P expects EBITDA to weaken over the next 12 months, the planned reduction in capital expenditures should be sufficient to generate cash flow to reduce debt. Any departure from this plan could result in ratings being lowered by one notch. URI's strategic decision to buy back stock reflects an aggressive financial policy in its search for alternatives to provide value to shareholders. Final results from the tender offer for common shares reduced purchases of common stock by about $80 million. Additionally, the company has recently stated that it will generate a good amount of free cash in 2008, about $350 million to $400 million, mainly as a result of a significant planned reduction in capital expenditures. At this time URI has called for the redemption of about $125 million of the holding company notes issued to fund the preferred stock buyback. When repaid, this will amount to about $200 million less debt since the announcement of the share buyback in June. The ratings on Greenwich, Conn.-based URI reflect its weak business risk profile based on its participation in the cyclical, highly competitive, and fragmented equipment rental sector, as well as its aggressive financial policy. Somewhat moderating these risks are its position as the world's largest provider of equipment rentals and good geographic, product, and customer diversity. The current ratings and outlook assumes that key end markets, specifically nonresidential construction markets, will weaken modestly in 2008 and decline by 8% in 2009. However, if nonresidential spending drops significantly in 2009, or if free cash flow generation fails to meet S&P's expectations in a declining market, causing leverage to approach 4x, S&P could lower the rating. Upside potential for the rating is limited at this transition point in the cycle. VALIDUS HOLDINGS: S&P Assigns 'BB+' Rating on Subordinated Debt --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BBB-' counterparty credit rating on Bermuda-based Validus Holdings Ltd. (Validus; NYSE:VR). The outlook is stable. In addition, Standard & Poor's assigned its preliminary 'BBB-' senior debt, 'BB+' subordinated debt, and 'BB' preferred stock ratings to Validus' recently filed universal shelf registration. The company has no intention of drawing down on the shelf at this point. "The assigned rating is based on Validus' good competitive position, having leveraged its first mover advantage after Katrina, Rita, Wilma by providing capacity to the market as well as increasing its footprint, diversification and scope following the acquisition of Talbot, strong capitalization, strong risk controls around exposure management, and very strong operating performance since inception," said Standard & Poor's credit analyst Dennis Sugrue. "Partially offsetting these strengths are the company's adequate strategic risk management practices, the possibility of significant earnings volatility due to its short- tail focus and catastrophe exposure (though this is mitigated by the mix of business provided by the Talbot acquisition), and some remaining integration and execution risks associated with the acquisition of Talbot Holdings Ltd." Standard & Poor's expects Validus' competitive position to remain good throughout 2008. The additional scope and diversification provided by Talbot has given Validus a footprint that should enable it to compete on a global scale. The group's growth plans for 2008 are reasonable, given Validus Re is practicing responsible cycle management by cutting back on written premiums, while Talbot is expanding in niche lines that should help the group to manage the soft cycle. S&P expects continued prudent cycle management in 2009, and do not expect Talbot to make any material plays into new lines of business. Standard & Poor's expects Validus to continue to exhibit strong operating performance in years with normal catastrophe activity. Results will be volatile due to the property-catastrophe focus of the company, but this volatility is partially mitigated by the diversification provided through the acquisition of Talbot. The company's combined ratio is expected to be between 80%-85% and return on revenue should be more than 20% for 2008, taking into account increased expenses associated with the Talbot business and public company expenses, as well as an upward expectation in combined ratio as a result of an increase in direct business. Capital adequacy is expected to remain strong over the next two- three years. S&P does not expect the company to incur material credit risk through retrocession, and reserving practices should remain conservative. At this point, potential for positive movement in the rating is limited over the next 18-24 months, however, S&P will maintain regular surveillance on the group and make any adjustments as it sees fit. If the company experiences a catastrophe loss outside its stated tolerances, bringing its exposure management and modeling practices into question, or if S&P sees a lack of progress in the development of the strategic risk management processes, namely a broader implementation of the economic capital model, it could result in a downgrade or negative outlook. Also, given that the strength of Talbot's underwriting team provides weight to the significance of the acquisition's effect on competitive position, any large departures of syndicate underwriters could put negative pressure on the rating. WARREN MARCUS: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Warren Marcus, LLC 1701 Dunlap Avenue, Suite A Marinette, WI 54143 Bankruptcy Case No.: 08-28643 Court: Eastern District of Wisconsin (Milwaukee) Debtor's Counsel: Claire Ann Resop, Esq. von Briesen & Roper, s.c. 1 North Pinckney Street, #300 Madison, WI 53703 Tel: (608) 441-0300 Email: cresop@vonbriesen.com Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A copy of Warren Marcus, LLC's list of 20 largest creditors is available for free at: http://bankrupt.com/misc/wieb08-28643.pdf WHOLE FOODS: Corporate Credit Rating Lowered to 'BB' by S&P ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on the Austin, Texas-based Whole Foods Markets Inc. by one notch to 'BB' from 'BB+'. The outlook is negative. "The downgrade reflects that operating performance and corresponding credit metrics were significantly weaker than expected through the first three quarters of 2008," said Standard & Poor's credit analyst Charles Pinson-Rose, "and our projection that there may be only modest improvement over the next 12 months." The weak performance is the result of both greater administrative expenses associated with the integration of stores from the year-ago acquisition of Wild Oats Markets Inc., and from a deceleration of same-store sales at the company's existing stores in the past two quarters. WORLDSPACE INC: Chief Operating Officers Resign ----------------------------------------------- Worldspace, Inc. and Gregory B. Armstrong, co-chief operating officer of the company, reached a mutual agreement on Aug. 1, 2008, with respect to Mr. Armstrong's departure from the company. In connection with Mr. Armstrong's departure, the Employment Agreement dated as of May 12, 2006 between Mr. Armstrong and the company was terminated as of August 1, 2008. The company and Mr. Armstrong have agreed that, in connection with the departure: -- subject to approval by the company's Board of Directors, the vesting of 50,000 shares of restricted stock will be accelerated. The 50,000 shares were part of a grant of performance-based restricted stock awards granted to Mr. Armstrong at the time he joined the company. All other outstanding equity awards will be cancelled, effective immediately. -- the company will pay Mr. Armstrong all accrued vacation pay as of August 1, 2008, in the amount of $50,920. -- Mr. Armstrong agrees, for a period of one year following his departure from the company, not to compete with the company, directly or indirectly, in any satellite radio business outside the US in connection with research, development, consulting, manufacturing, purchasing, accounting, engineering, marketing, merchandising or selling of any conflicting product or service, directly or indirectly. In addition, on August 1, 2008, the company received from Alexander P. Brown, the other co-chief operating officer of the company, a notice terminating the Employment Agreement dated as of May 12, 2006 between Mr. Brown and the company. The company and Mr. Brown are in discussions as to any compensation payable to Mr. Brown in connection with such determination. About WorldSpace Inc. Based in the Washington, DC metropolitan area, WorldSpace Inc. (Nasdaq: WRSP) -- http://www.worldspace.com/-- is a media and entertainment company that offers a satellite radio to consumers in more than 130 countries with five billion people, driving 300 million cars. It operates WORLDSPACE Satellite Radio, which delivers the latest tunes, trends and information from around the world and around the corner. WORLDSPACE offers a combination of local programming, original WORLDSPACE content and content from brands around the globe including the BBC, CNN International, Virgin Radio UK, NDTV and RFI. WORLDSPACE's satellites cover two-thirds of the earth's population with six beams. WorldSpace has offices in Australia and France. The company's balance sheet at March 31, 2008, showed total assets of $323.7 million and total liabilities of $2.1 billion and minority interest of $608,000, resulting in total shareholders' deficit of $1.7 billion. Going Concern Doubt As reported in the The Troubled company Reporter on May 1, 2008, Grant Thornton LLP in McLean, Virginia, raised substantial doubt about WorldSpace Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm pointed to the company's net loss, negative working capital, and shareholders' deficit. Grant Thornton also cited that the company's management does not believe its cash on hand and cash available is sufficient to meet its operating needs during the coming year. * S&P Cuts Ratings on Two U.S. Alt-A RMBS Deals, Off Watch Neg -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 12 classes from two residential mortgage-backed securities (RMBS) transactions backed by U.S. Alternative-A (Alt-A) mortgage loan collateral issued in 2005. At the same time, S&P removed these ratings from CreditWatch with negative implications. Concurrently, S&P affirmed its ratings on 13 other classes from these two transactions. Both transactions are backed by a significant percentage of adjustable-rate loans with initial reset periods of three years or less. The downgrades reflect S&P's opinion that projected credit support for the affected classes is insufficient to maintain the previous ratings given the current delinquency and loss levels for these transactions and S&P's projection of future losses. S&P arrived at its estimated projected losses for the Alt-A RMBS deals using the analysis outlined in "Standard & Poorâ€™s Revised Default And Loss Curves For U.S. Alt-A RMBS Transactions," published Dec. 19, 2007, on RatingsDirect. For this analysis, S&P assumed a loss severity of 35% for U.S. Alt-A RMBS transactions backed by short-reset hybrid collateral (loans with fixed-rate periods of three years or less). As part of S&P's analysis, S&P considered the characteristics of the underlying mortgage collateral, as well as macroeconomic influences. For example, the risk profile of the underlying mortgage pools influences S&P's default projections, while the outlook for housing price appreciation and the health of the housing market influence S&P's loss severity assumptions. To assess the creditworthiness of each class, S&P reviewed the individual delinquency and loss trends of each transaction for changes, if any, in risk characteristics, servicing, and the ability to withstand additional credit deterioration. In order to maintain a rating higher than 'B', a class had to absorb losses in excess of the base-case assumption S&P used in S&P's analysis. For example, a class may have to withstand approximately 115% of S&P's base-case loss assumption in order to maintain a 'BB' rating, while a different class may have to withstand approximately 125% of S&P's base-case loss assumption to maintain a 'BBB' rating. Each class that has an affirmed 'AAA' rating can withstand approximately 150% of S&P's base-case loss assumption under its analysis, subject to individual caps and qualitative factors assumed on specific transactions. S&P determined the caps by limiting the amount of remaining defaults to 85% of the current pool balances. A combination of subordination, excess spread, and overcollateralization provides credit support for the affected transactions. The underlying collateral for these deals consists of adjustable-rate U.S. Alt-A mortgage loans secured by first and second liens on one- to four-family residential properties. RATINGS LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE Nomura Asset Acceptance Corp. Alternative Loan Trust Series 2005- AR6 Rating Class CUSIP To From I-A 65535VRG5 BBB AAA/Watch Neg II-A-2 65535VRW0 BBB AAA/Watch Neg III-A-2 65535VRV2 BBB AAA/Watch Neg IV-A-2 65535VRL4 BBB AAA/Watch Neg M1 65535VRM2 CCC AA/Watch Neg M-2 65535VRN0 CC A+/Watch Neg M-3 65535VRP5 CC BBB/Watch Neg M-4 65535VRQ3 D BB-/Watch Neg RALI Series 2005-QA6 Trust Rating Class CUSIP To From M-2 76110H6J3 B A/Watch Neg M-3 76110H6K0 CC BBB/Watch Neg B-1 76110H6L8 CC BB/Watch Neg B-2 76110H6M6 D B/Watch Neg RATINGS AFFIRMED Nomura Asset Acceptance Corp. Alternative Loan Trust Series 2005- AR6 Class CUSIP Rating II-A-1 65535VRH3 AAA III-A-1 65535VRJ9 AAA IV-A-1 65535VRK6 AAA RALI Series 2005-QA6 Trust Class CUSIP Rating CB-I 76110H5Z8 AAA NB-I 76110H6A2 AAA CB-II 76110H6B0 AAA NB-II-1 76110H6C8 AAA NB-II-2 76110H6D6 AAA NB-II-3 76110H6P9 AAA A-III-1 76110H6E4 AAA A-III-2 76110H6F1 AAA R 76110H6G9 AAA M-1 76110H6H7 AA * Fitch: US CREL CDO Delinquencies Fall Slightly on Forbearance --------------------------------------------------------------- Delinquencies within U.S. commercial real estate loan CDOs remain relatively low and declined from June levels due to forbearance and extensions, as well as asset managers' continued repurchasing of troubled assets out of the pools, according to the July 2008 CREL CDO delinquency index from Fitch Ratings. This month, the reported forbearance of a maturity defaulted loan led to a slight decrease in the CREL CDO delinquency rate, to 1.46% from last month's rate of 1.58%. If this loan were added back in to the Index, the rate would increase to 1.80% due to the inclusion of three smaller, newly delinquent loans. The Index includes loans that are 60 days or longer delinquent, matured balloon loans, and the current period's repurchased assets. The reduction in the Index is primarily attributed to a former matured balloon loan that accounted for 34 basis points that is currently operating under a forbearance agreement pursuant to which interest is paid currently. The two senior participation interests and one junior participation interest in this loan, which were contributed to three separate CREL CDOs, are likely to be extended under a short-term extension agreement to allow the sponsor to negotiate a potential sale or refinance of the property. Partially offsetting this decrease in the Index was the addition of three new loans (24 bps); all of which were multifamily or condo conversion loans. In addition to the participated matured balloon described above, another whole loan (four bps) dropped from this month's Index as the asset manager granted it a nine month extension. This month, Fitch noted 25 reported loan extensions in July 2008, which is up from last month's total of 20. This statistic continues to trend upwards reflecting the lower available liquidity for CRE loans. Over half of these extensions were not contemplated in the original loan documents, and many are short term extensions of one to three months. By their actions, managers are indicating that extending the loan to allow time to ride out the market is the prudent course of action at this time. Fitch is concerned that this trend serves only to delay the possible realization of losses on these loans. Of the 19 loans in the July 2008 CREL Delinquency Index, nearly one-third by balance are related to multifamily, condo conversion, or residential land properties, including the three new delinquencies this month. Further, over 80% of the loans in the 30 day bucket are secured by multifamily properties. Typically, the multifamily loans are secured by assets in a state of transition. Generally the borrowers' business plan was to make capital improvements to the property to improve the property quality to the next category and thus increase rents. But often the capital dollars infused per unit were used more to cure deferred maintenance or dated amenities as opposed to materially improving the quality of the asset vis a vis the market. As such, projected rents have not been obtainable. Increased delinquencies means riskier collateral pools. Fitch assumes a 100% probability of default in its modeling for loans which are 60+ days delinquent. Increases in delinquencies, therefore, lead to increased Fitch poolwide expected losses, and decreases in the Fitch PEL cushion as the PEL approaches the Fitch PEL covenant. Fitch recently placed the first CREL CDO on Rating Watch Negative due to insufficient PEL cushion arising from delinquencies. One class of Gramercy RE CDO 2007-1 was placed on Rating Watch Negative due to the delinquency and corresponding default of two hotel loans. Further, over one-third of all Fitch rated CREL CDOs now have below-average PEL cushions as of the last Fitch review. The decline in cushion is due to one or more of the following: increased delinquencies, properties falling behind on their business plans, reduced property net cash flows, and the application of Fitch's corporate Portfolio Credit Model on the corporate debt and REBL assets, if any, and the interim surveillance stacking model methodology on the CMBS and CRE CDO assets, if any. While rising delinquencies will reduce managers' reinvestment flexibility, the transactions were originally rated to withstand some negative migration. Significant decreases in cushions, however, could lead to more transactions placed on RWN or downgrades. Asset managers continue to repurchase assets from their CDOs. For this reporting period, asset managers repurchased three assets (15 bps). The repurchased assets consist of a mezzanine loan secured by an interest in a New York City office portfolio and a mezzanine loan secured by an interest in a portfolio of multifamily properties located throughout the Unites States. The first mortgage of this multifamily portfolio remains in the CDO. The third repurchased asset consists of the first loss piece of a commercial mortgage backed security. Repurchases of troubled loans are expected to be limited to the few issuers with liquidity remaining within their balance sheets. Repurchases of credit impaired assets are an important component of the Index as their exclusion would overstate the performance of the CDOs. * Fitch: High Spreads & CDS Market Volatility Cause of Concern -------------------------------------------------------------- Ongoing volatility in the credit default swap market combined with higher spreads indicate continued widespread concerns related to both financial and non-financial services sectors, according to a Fitch Ratings in a new report. 'The combined effects on the economy of the depressed housing market, the credit crisis in general and higher energy prices have led to concerns about an increase in the corporate default rate,' said Managing Director James Batterman. 'The result has been sharply higher spreads compared to early last year, which is indicative of the consensus view of further challenges ahead.' Fitch's review examined changes in spreads and trade volumes by industrial sector for both US and Euro denominated CDS, and highlights the extent of trading activity of some of the more liquid names, including those that have experienced significant difficulties over the course of the credit crisis.* * S&P Cuts 4 Ratings on Two U.S. Prime Jumbo RMBS Transactions -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on four classes of mortgage pass-through certificates from two U.S. residential mortgage-backed securities (RMBS) transactions backed by prime jumbo mortgage collateral. At the same time, S&P affirmed its ratings on 80 classes from various transactions, including those with lowered ratings. The downgrades reflect either current or projected credit support levels that were not sufficient to support the certificates at the previous rating levels. Class B5 from Morgan Stanley Mortgage Loan Trust 2004-4 and class II-B-5 from WaMu Mortgage Pass-Through Certificates Series 2003-S5 Trust have both experienced principal write-downs recently due to the depletion of credit support, which prompted us to downgrade these classes to 'D'. During recent months, these two deals have experienced deterioration in credit support, and the dollar amount of loans in the delinquency pipelines of these deals indicate that the pattern of losses could continue. As of the July 2008 distribution period, cumulative losses were 0.10% (WaMu Mortgage Pass-Through Certificates series 2003-S5 Trust, loan group 2) and 0.30% (Morgan Stanley Mortgage Loan Trust series 2004-4) of the original pool balances. Total delinquencies were 0.55% (WaMu Mortgage Pass-Through Certificates Series 2003-S5 Trust, loan group 2) and 3.29% (Morgan Stanley Mortgage Loan Trust 2004-4) of the current pool balances. The deals were seasoned 46 and 61 months, respectively, as of the July 2008 distribution period. The affirmations reflect actual and projected credit enhancement percentages that are sufficient to support the current ratings. A senior-subordinate structure provides credit support for these transactions. The collateral backing the certificates originally consisted of 15- to 30-year prime fixed- and adjustable-rate mortgage loans secured by one- to four-family residential properties. RATINGS LOWERED Morgan Stanley Mortgage Loan Trust 2004-4 Rating Class CUSIP To From B-4 61748HDY4 B BB B-5 61748HDZ1 D CCC WaMu Mortgage Pass-Through Certificates Series 2003-S5 Trust Rating Class CUSIP To From II-B-4 9292274A1 B BB II-B-5 9292274B9 D B RATINGS AFFIRMED Morgan Stanley Mortgage Loan Trust 2004-4 Class CUSIP Rating 1-A-1 61748HCX7 AAA 1-A-2 61748HCY5 AAA 1-A-3 61748HCZ2 AAA 1-A-4 61748HDA6 AAA 1-A-5 61748HDB4 AAA 1-A-8 61748HDE8 AAA 1-A-9 61748HDF5 AAA 1-A-10 61748HDG3 AAA 1-A-11 61748HDH1 AAA 1-A-12 61748HDJ7 AAA 1-A-13 61748HDK4 AAA 1-A-14 61748HDL2 AAA 1-A-15 61748HDM0 AAA 1-A-X 61748HDN8 AAA 1-A-P 61748HDP3 AAA 2-A 61748HDQ1 AAA 3-A 61748HDV0 AAA 3-A-X 61748HDW8 AAA 3-A-P 61748HDX6 AAA A-R 61748HDU2 AAA B-1 61748HDR9 AA B-2 61748HDS7 A B-3 61748HDT5 BBB Structured Asset Securities Corp. Series 2003-1 Class CUSIP Rating 1-A1 86359ALD3 AAA 1-A2 86359ALE1 AAA 1-A3 86359ALF8 AAA 1-A7 86359ALK7 AAA 1-AX 86359ALL5 AAA 2-A1 86359ALM3 AAA 3-A1 86359ALN1 AAA 4-A1 86359ALP6 AAA AP 86359ALQ4 AAA AX 86359ALR2 AAA B1 86359ALS0 AA+ B2 86359ALT8 A+ B3 86359ALU5 BBB B4 86359ALW1 BB B5 86359ALX9 CCC WaMu Mortgage Pass-Through Certificates Series 2003-S5 Trust Class CUSIP Rating I-A-1 9292272D7 AAA I-A-2 9292272E5 AAA I-A-3 9292272F2 AAA I-A-4 9292272G0 AAA I-A-5 9292272H8 AAA I-A-6 9292272J4 AAA I-A-7 9292272K1 AAA I-A-8 9292272L9 AAA I-A-9 9292272M7 AAA I-A-10 9292272N5 AAA I-A-11 9292272P0 AAA I-A-12 9292272Q8 AAA I-A-13 9292272R6 AAA I-A-14 9292272S4 AAA I-A-15 9292272T2 AAA I-A-16 9292272U9 AAA I-A-17 9292272V7 AAA I-A-18 9292272W5 AAA I-A-19 9292272X3 AAA I-A-22 9292273A2 AAA I-A-23 9292273B0 AAA I-A-24 9292273C8 AAA I-A-25 9292273D6 AAA I-A-26 9292273E4 AAA I-A-27 9292273F1 AAA I-A-28 9292273G9 AAA I-A-29 9292273H7 AAA II-A 9292273J3 AAA III-A 9292273K0 AAA C-X 9292273V6 AAA II-X 9292273W4 AAA C-P 9292273L8 AAA II-P 9292273M6 AAA C-B-1 9292273N4 AA+ C-B-2 9292273P9 AA C-B-3 9292273Q7 A+ II-B-1 9292273R5 AA+ II-B-2 9292273S3 AA- II-B-3 9292273T1 BBB+ C-B-4 9292273X2 A- C-B-5 9292273Y0 BB R 9292273U8 AAA * S&P Places 206 Ratings on 94 U.S. CDO Deals on Watch Neg ---------------------------------------------------------- Standard & Poor's Ratings Services placed on CreditWatch negative its ratings on 206 classes from 94 U.S. cash flow and hybrid collateralized debt obligation of asset-backed securities (CDO of ABS) and CDO of CDO transactions. The affected classes represent an aggregate original issuance amount of approximately $31.96 billion. The negative CreditWatch placements reflect S&P's view of continued deterioration in the credit quality of the residential mortgage-backed securities (RMBS) backing these CDO transactions, as also reflected by the increase in the number of downgrade actions Standard & Poor's has taken on the RMBS and CDO of ABS securities held or referenced in the transactions' portfolios. Of the 94 affected CDO transactions: -- 58 are mezzanine SF CDOs, generally defined as CDOs of ABS collateralized at origination primarily by 'A' and 'BBB' rated tranches of RMBS and other structured finance assets; -- 26 are high-grade CDOs of ABS, generally defined as CDOs of ABS typically collateralized at origination primarily by 'AAA' through 'A' rated tranches of RMBS and other structured finance transactions; and -- 10 are CDOs of CDOs collateralized predominantly by tranches from other CDO transactions. Of the 206 ratings being placed on CreditWatch today, S&P has lowered 107 one or more times, and 51 of the 94 affected CDO transactions already have other tranches with ratings currently on CreditWatch. Standard & Poor's expects to resolve the CreditWatch placements on the affected transactions within the next month. RATING PLACED ON CREDITWATCH NEGATIVE Rating Transaction Class To From 888 Tactical Fund Ltd. S CCC/Watch Neg CCC 888 Tactical Fund Ltd. A1 CCC-/Watch Neg CCC- ACA ABS 2005-2 Ltd. A-1S AAA/Watch Neg AAA Altius II Funding Ltd. C A/Watch Neg A Altius II Funding Ltd. D BBB/Watch Neg BBB Ambassador Structured Finance CDO Ltd. A-2 AAA/Watch Neg AAA Bayberry Funding Ltd. II AAA/Watch Neg AAA Bayberry Funding Ltd. III AA/Watch Neg AA Belle Haven ABS CDO 2005-1 Ltd. A-2 AAA/Watch Neg AAA Belle Haven ABS CDO 2005-1 Ltd. B AA/Watch Neg AA Bering CDO I Ltd. A-1S1 AAA/Watch Neg AAA Blue Bell Funding Ltd. A-1 AAA/Watch Neg AAA Blue Bell Funding Ltd. A-2 AA/Watch Neg AA Blue Bell Funding Ltd. B BBB+/Watch Neg BBB+ Broderick CDO 1 Ltd. A-1V AAA/Watch Neg AAA Broderick CDO 1 Ltd. A-2 A+/Watch Neg A+ Broderick CDO 1 Ltd. B BBB/Watch Neg BBB Broderick CDO 1 Ltd. C BB-/Watch Neg BB- Broderick CDO 1 Ltd. A-1NVA AAA/Watch Neg AAA Broderick CDO 1 Ltd. A-1NVB AAA/Watch Neg AAA Buckingham CDO II Ltd. CP AAA/A-1+/WatchNeg AAA/A-1+ Buckingham CDO II Ltd. B AA/Watch Neg AA Buckingham CDO II Ltd. C AA-/Watch Neg AA- Buckingham CDO II Ltd. D A-/Watch Neg A- Burnham Harbor CDO 2006-1 Ltd. A-1LB AAA/Watch Neg AAA Cairn Mezz ABS CDO 1 PLC II BB+/Watch Neg BB+ Cairn Mezz ABS CDO 1 PLC III BB/Watch Neg BB Cairn Mezz ABS CDO 1 PLC IV BB-/Watch Neg BB- CAMBER 3 plc A-1 AAA/Watch Neg AAA CAMBER 3 plc A-2 AAA/Watch Neg AAA C-BASS CBO XIV Ltd. B AA/Watch Neg AA C-BASS CBO XIV Ltd. C A/Watch Neg A C-BASS CBO XIV Ltd. D BBB/Watch Neg BBB CETUS ABS CDO 2006-1 Ltd. A-1 CCC/Watch Neg CCC Cherry Creek CDO II Ltd. A-1S CCC/Watch Neg CCC Cimarron CDO Ltd. B BBB-/Watch Neg BBB- Citius I Funding Ltd. B CCC+/Watch Neg CCC+ Clifton I CDO Ltd. A-1 CCC+/Watch Neg CCC+ Clifton I CDO Ltd. A-2 CCC/Watch Neg CCC Clifton I CDO Ltd. A-3 CCC-/Watch Neg CCC- Commodore CDO III Ltd. A-2 AAA/Watch Neg AAA Commodore CDO IV Ltd. A-2 AAA/Watch Neg AAA Commodore CDO IV Ltd. B AA/Watch Neg AA Commodore CDO IV Ltd. C A/Watch Neg A Commodore CDO IV Ltd. D BBB/Watch Neg BBB Commodore CDO IV Ltd. Comp Nts BBB-/Watch Neg BBB- Crystal River CDO 2005-1 Ltd. E BBB/Watch Neg BBB Crystal River CDO 2005-1 Ltd. F BB/Watch Neg BB Crystal River CDO 2005-1 Ltd. G BB-/Watch Neg BB- Crystal River CDO 2005-1 Ltd. H B+/Watch Neg B+ Davis Square Funding IV Ltd. C B/Watch Neg B Davis Square Funding IV Ltd. D CCC-/Watch Neg CCC- Davis Square Funding V Ltd. C BBB-/Watch Neg BBB- Davis Square Funding V Ltd. D CCC/Watch Neg CCC Davis Square Funding V Ltd. E CCC-/Watch Neg CCC- Duke Funding High Grade IV Ltd. A-1 AAA/Watch Neg AAA Duke Funding High Grade IV Ltd. A-2 AA+/Watch Neg AA+ Duke Funding High Grade IV Ltd. B-1 AA/Watch Neg AA Duke Funding High Grade IV Ltd. B-2 A+/Watch Neg A+ Duke Funding High Grade IV Ltd. C-1 A-/Watch Neg A- Duke Funding IV Ltd. A-1 AAA/Watch Neg AAA Duke Funding IV Ltd. A-2 AAA/Watch Neg AAA Dutch Hill Funding I Ltd. A-1A AAA/Watch Neg AAA E*Trade ABS CDO III Ltd. C BB+/Watch Neg BB+ E*Trade ABS CDO III Ltd. Pref Shrs B/Watch Neg B E*Trade ABS CDO III Ltd. Series I B/Watch Neg B Fort Point CDO I Ltd. A-2a AAA/Watch Neg AAA Fort Point CDO I Ltd. A-2b AAA/Watch Neg AAA Fort Point CDO II Ltd. C CCC+/Watch Neg CCC+ Fortius I Funding Ltd. A-1 AAA/Watch Neg AAA Fortius I Funding Ltd. A-2 AAA/Watch Neg AAA Gemstone CDO III Ltd. A-1 AAA/Watch Neg AAA Gemstone CDO III Ltd. A-3 AAA/Watch Neg AAA Gemstone CDO III Ltd. B AA/Watch Neg AA GSC ABS CDO 2005-1 Ltd. A1S AAA/Watch Neg AAA GSC ABS CDO 2005-1 Ltd. A1J AA/Watch Neg AA G-STAR 2005-5 Ltd. C BBB/Watch Neg BBB G-STAR 2005-5 Ltd. Income Not B/Watch Neg B Hamilton Gardens CDO Ltd. A-1 A+/Watch Neg A+ Hereford Street ABS CDO I Ltd. A-2 AAA/Watch Neg AAA Hereford Street ABS CDO I Ltd. B AA/Watch Neg AA Hereford Street ABS CDO I Ltd. C A-/Watch Neg A- Independence IV CDO Ltd. A-1Series1 AAA/Watch Neg AAA Independence IV CDO Ltd. A-1Series2 AAA/Watch Neg AAA Independence VI CDO Ltd. A1 AAA/Watch Neg AAA Independence VII CDO Ltd. A-1A BB+/Watch Neg BB+ Independence VII CDO Ltd. A-1B BB+/Watch Neg BB+ Independence VII CDO Ltd. A-2 BB/Watch Neg BB Independence VII CDO Ltd. B B/Watch Neg B Independence VII CDO Ltd. C CCC+/Watch Neg CCC+ Inman Square Funding I Ltd. III A-/Watch Neg A- Inman Square Funding I Ltd. IV-FX BB+/Watch Neg BB+ Inman Square Funding I Ltd. IV-FL BB+/Watch Neg BB+ Ischus CDO II Ltd. A-1A AAA/Watch Neg AAA Ischus CDO II Ltd. A-1B AAA/Watch Neg AAA IXIS ABS CDO 1 Ltd. A-1LB AA/Watch Neg AA IXIS ABS CDO 1 Ltd. X AAA/Watch Neg AAA Kent Funding III Ltd. A-1 AAA/Watch Neg AAA Kleros Preferred Funding II Ltd. A2 AA/Watch Neg AA Kleros Preferred Funding II Ltd. B BBB+/Watch Neg BBB+ Kleros Preferred Funding II Ltd. C BBB/Watch Neg BBB Klio III Funding Ltd. ABCP AAA/A-1+/Watch Neg AAA/A-1+ Klio III Funding Ltd. A-1 AAA/Watch Neg AAA Klio III Funding Ltd. A-2 AA/Watch Neg AA Klio III Funding Ltd. B A-/Watch Neg A- Klio III Funding Ltd. C BBB/Watch Neg BBB Klio III Funding Ltd. Pref Shrs BB/Watch Neg BB Lancer Funding Ltd. A1S2 AA/Watch Neg AA Lexington Capital Funding Ltd. A-2 AAA/Watch Neg AAA Lexington Capital Funding Ltd. B AA/Watch Neg AA Lexington Capital Funding Ltd. C A/Watch Neg A Lexington Capital Funding Ltd. D BBB-/Watch Neg BBB- Lexington Capital Funding Ltd. E BB+/Watch Neg BB+ Long Hill 2006-1 Ltd. S1VF AAA/Watch Neg AAA Long Hill 2006-1 Ltd. S2T AA+/Watch Neg AA+ Long Hill 2006-1 Ltd. A1 AA/Watch Neg AA Long Hill 2006-1 Ltd. A2 BB/Watch Neg BB Longshore CDO Funding 2006-1 Ltd. A-2 AA+/Watch Neg AA+ Longshore CDO Funding 2006-1 Ltd. B A+/Watch Neg A+ Manasquan CDO 2005-1 Ltd. A-3L A+/Watch Neg A+ Manasquan CDO 2005-1 Ltd. B-1L BBB+/Watch Neg BBB+ Manasquan CDO 2005-1 Ltd. B-2L BBB-/Watch Neg BBB- Marathon Structured Funding I LLC A-1 A/Watch Neg A McKinley II Funding Ltd. ABCP AAA/A-1+/Watch Neg AAA/A-1+ Millerton II High Grade ABS CDO Ltd. A-1 AA/Watch Neg AA MKP CBO III Ltd. B AA-/Watch Neg AA- Monterey CDO Ltd. A-1A AAA/Watch Neg AAA Monterey CDO Ltd. A-1B AAA/Watch Neg AAA Monterey CDO Ltd. A-2 AA/Watch Neg AA Mulberry Street CDO II Ltd. A-1U BBB-/Watch Neg BBB- Mulberry Street CDO II Ltd. A-2 CCC-/Watch Neg CCC- Mulberry Street CDO Ltd. A-1A AAA/Watch Neg AAA Mulberry Street CDO Ltd. A-1B AAA/Watch Neg AAA Neptune CDO III Ltd. S AAA/Watch Neg AAA Neptune CDO III Ltd. A-1 AAA/Watch Neg AAA Norma CDO I Ltd. A-1 B-/Watch Neg B- Norma CDO I Ltd. A-2 CCC-/Watch Neg CCC- North Cove CDO Ltd. A AAA/Watch Neg AAA Northwall Funding CDO I Ltd. A-2 AA/Watch Neg AA Octonion I CDO Ltd. A1 CCC/Watch Neg CCC Octonion I CDO Ltd. S CCC-/Watch Neg CCC- Opus CDO I Ltd. B A+/Watch Neg A+ Parapet 2006 Ltd. A A+/Watch Neg A+ Pine Mountain CDO Ltd. A-1 AAA/Watch Neg AAA Porter Square CDO I Ltd. C BBB-/Watch Neg BBB- Porter Square CDO III Ltd. A-1 AAA/Watch Neg AAA Porter Square CDO III Ltd. A-2 AA+/Watch Neg AA+ Raffles Place Funding Ltd. A-1a AAA/Watch Neg AAA Raffles Place Funding Ltd. A-1b AAA/Watch Neg AAA Raffles Place Funding Ltd. A-2 AA/Watch Neg AA Raffles Place Funding Ltd. B A/Watch Neg A RFC CDO III Ltd. A-2 AA/Watch Neg AA Saturn Ventures 2005-1 Ltd. A-2 AA+/Watch Neg AA+ Saturn Ventures 2005-1 Ltd. A-3 BBB-/Watch Neg BBB- Saturn Ventures 2005-1 Ltd. B B/Watch Neg B Sherwood Funding CDO II Ltd. A-1 AAA/Watch Neg AAA Silver Elms CDO plc A-1a CCC/Watch Neg CCC Silver Elms CDO plc A-1b CCC/Watch Neg CCC Silver Elms CDO plc A-2 CCC-/Watch Neg CCC- Singa Funding Ltd. A-1M CCC/Watch Neg CCC Singa Funding Ltd. A-1Q CCC/Watch Neg CCC Singa Funding Ltd. A-2 CCC-/Watch Neg CCC- South Coast Funding I Ltd. A-1 AA/Watch Neg AA South Coast Funding II Ltd. A-1 AAA/Watch Neg AAA South Coast Funding II Ltd. A-2 BBB+/Watch Neg BBB+ South Coast Funding IV Ltd. C BBB+/Watch Neg BBB+ South Coast Funding IV Ltd. Pre Shares BB-/Watch Neg BB- Squared CDO 2007-1 Ltd. A-1 CCC-/Watch Neg CCC- STAtic ResidenTial CDO 2005-A Ltd. B AA/Watch Neg AA STAtic ResidenTial CDO 2005-A Ltd. C A/Watch Neg A STAtic ResidenTial CDO 2005-B Ltd. A-1 AAA/Watch Neg AAA STAtic ResidenTial CDO 2005-B Ltd. A-2 AAA/Watch Neg AAA STAtic ResidenTial CDO 2005-B Ltd. B AA/Watch Neg AA STAtic ResidenTial CDO 2005-B Ltd. C A+/Watch Neg A+ STAtic ResidenTial CDO 2005-B Ltd. D BBB/Watch Neg BBB STAtic ResidenTial CDO 2005-C Ltd. A-1 AAA/Watch Neg AAA Stone Tower CDO II Ltd. B-1L BBB/Watch Neg BBB Summer Street 2005-1 Ltd. A-1 AAA/Watch Neg AAA Summer Street 2005-HG1 Ltd. B A+/Watch Neg A+ Summer Street 2005-HG1 Ltd. C BBB+/Watch Neg BBB+ Summer Street 2005-HG1 Ltd. D BB+/Watch Neg BB+ Summit RMBS CDO I Ltd. BF BBB/Watch Neg BBB Summit RMBS CDO I Ltd. BV BBB/Watch Neg BBB Summit RMBS CDO I Ltd. Pref Share BB/Watch Neg BB Summit RMBS CDO I Ltd. Comb I BBB-/Watch Neg BBB- Summit RMBS CDO I Ltd. Comb II BBB/Watch Neg BBB TABS 2004-1 Ltd. B AA/Watch Neg AA TABS 2004-1 Ltd. C A-/Watch Neg A- TABS 2004-1 Ltd. D BBB/Watch Neg BBB TAHOMA CDO II Ltd. A-1 BBB-/Watch Neg BBB- TAHOMA CDO II Ltd. A-2 CCC/Watch Neg CCC TIAA Structured Finance CDO II Ltd. A-2 AAA/Watch Neg AAA Tigris CDO 2007-1 Ltd. A-1A CCC-/Watch Neg CCC- Tourmaline CDO I Ltd. II AA/Watch Neg AA Trainer Wortham First Republic CBO V Ltd C A/Watch Neg A Trainer Wortham First Republic CBO V Ltd D BBB/Watch Neg BBB Tremonia CDO 2005-1 PLC B AA/Watch Neg AA Vertical ABS CDO 2005-1 Ltd. A-1 AAA/Watch Neg AAA Vertical ABS CDO 2005-1 Ltd. A-2 AA+/Watch Neg AA+ Vertical ABS CDO 2005-1 Ltd. B A-/Watch Neg A- Vertical CDO 2004-1 Ltd. A AAA/Watch Neg AAA Vertical CDO 2004-1 Ltd. B AA-/Watch Neg AA- Whitehawk CDO Funding Ltd. A-2 AAA/Watch Neg AAA Whitehawk CDO Funding Ltd. B AA-/Watch Neg AA- Whitehawk CDO Funding Ltd. C A-/Watch Neg A- Whitehawk CDO Funding Ltd. D BBB-/Watch Neg BBB- * S&P Cuts Ratings on 12 U.S. Alt-A RMBS Transactions ----------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 60 classes from 12 residential mortgage-backed securities (RMBS) transactions backed by U.S. Alternative-A (Alt-A) mortgage loan collateral issued in 2005, 2006, and 2007. At the same time, S&P removed 41 of the ratings from CreditWatch with negative implications. In addition, S&P affirmed its ratings on 89 classes and removed them from CreditWatch negative. All of the transactions are backed by fixed-rate loans or by adjustable-rate loans with an initial reset period of at least five years. The downgrades reflect S&P's opinion that projected credit support for the affected classes is insufficient to maintain the previous ratings given S&P's current projected losses. For the analysis, S&P assumed a loss severity of 34% for U.S. Alt-A RMBS transactions backed by fixed-rate loans and long-reset hybrid collateral (loans with fixed-rate periods of at least five years). As part of S&P's analysis, S&P considered the characteristics of the underlying mortgage collateral, as well as macroeconomic influences. For example, the risk profile of the underlying mortgage pools influences S&P's default projections, while the outlook for housing price appreciation and the health of the housing market influence S&P's loss severity assumptions. The lowered ratings reflect S&P's assessment of credit support under three constant prepayment rate (CPR) scenarios. The first scenario utilizes the lower of the lifetime CPR or the 12-month CPR. The second utilizes a CPR of 6.00%, which is very slow by historical standards. For transactions originated in 2007, S&P used a third CPR scenario that doubles the CPR used in the first scenario. This allows S&P to see how the transactions would be affected in different CPR environments. S&P assumed a constant default rate for each pool. Because S&P's analysis focused on each individual class with varying maturities, the prepayment scenarios may cause an individual class or the transaction itself to prepay in full before it incurs the entire loss projection. Slower prepayment assumptions lengthen the average life of the mortgage pool, which increases the likelihood that total projected losses will be realized. The longer a class remains outstanding, however, the more excess spread it generates. To assess the creditworthiness of each class, S&P reviewed the individual delinquency and loss trends of each transaction for changes, if any, in risk characteristics, servicing, and the ability to withstand additional credit deterioration. In order to maintain a rating higher than 'B', a class had to absorb losses in excess of the base-case assumption S&P used in its analysis. For example, a class may have to withstand approximately 115% of S&P's base-case loss assumption in order to maintain a 'BB' rating, while a different class may have to withstand approximately 125% of S&P's base-case loss assumption to maintain a 'BBB' rating. Each class that has an affirmed 'AAA' rating can withstand approximately 150% of S&P's base-case loss assumption under S&P's analysis, subject to individual caps and qualitative factors assumed on specific transactions. S&P determined the caps by limiting the amount of remaining defaults to 85% of the current pool balances. A combination of subordination, excess spread, and overcollateralization provides credit support for the affected transactions. The underlying collateral for these deals consists of fixed- and adjustable-rate U.S. Alt-A mortgage loans secured by first and second liens on one- to four-family residential properties. RATINGS LOWERED CSAB Mortgage-Backed Trust 2006-1 Series 2006-1 Rating Class CUSIP To From ----- ----- -- ---- M-3 22943HAM8 D CCC M-4 22943HAN6 D CC B 22943HAP1 D CC CSAB Mortgage-Backed Trust 2006-3 Series 2006-3 Rating Class CUSIP To From ----- ----- -- ---- A-4-A 12628KAH5 A AAA A-6 12628KAM4 A AAA Impac Secured Assets Corp. Series 2005-2 Rating Class CUSIP To From ----- ----- -- ---- M-1 45254TST2 BB BBB M-2 45254TSU9 B BB M-3 45254TSV7 B- B M-4 45254TSW5 CCC B- M-6 45254TSY1 CC CCC B 45254TTE4 D CC IndyMac INDX Mortgage Loan Trust 2006-AR21 Series 2006-AR21 Rating Class CUSIP To From ----- ----- -- ---- M-3 45660HAF5 B BB M-4 45660HAG3 CCC B M-5 45660HAH1 CCC B M-6 45660HAJ7 CC CCC M-7 45660HAK4 CC CCC M-8 45660HAL2 CC CCC M-10 45660HAN8 D CC Residential Asset Securitization Trust 2006-A11 Series 2006-K Rating Class CUSIP To From ----- ----- -- ---- B-5 76113TAU4 D CC RATINGS LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE CHL Mortgage Pass-Through Trust 2007-HYB2 Series 2007-HYB2 Rating Class CUSIP To From ----- ----- -- ---- 1-A 125438AA9 A AAA/Watch Neg 1-A-IO 125438AP6 A AAA/Watch Neg 2-A-2 125438AE1 A AAA/Watch Neg 2-A-IO 125438AF8 A AAA/Watch Neg 3-A-2 125438AC5 A AAA/Watch Neg 3-A-IO 125438AN1 A AAA/Watch Neg 4-A-2 125438AR2 A AAA/Watch Neg 4-A-IO 125438AS0 A AAA/Watch Neg CSAB Mortgage Backed Trust 2006-4 Series 2006-4 Rating Class CUSIP To From ----- ----- -- ---- A-5 12628LAH3 AA AAA/Watch Neg A-6-B 12628LAK6 AA AAA/Watch Neg CSAB Mortgage-Backed Trust 2006-1 Series 2006-1 Rating Class CUSIP To From ----- ----- -- ---- A-5 22943HAF3 BBB AAA/Watch Neg A-6-A 22943HAG1 AA AAA/Watch Neg A-6-B 22943HAH9 BBB AAA/Watch Neg CSAB Mortgage-Backed Trust 2006-3 Series 2006-3 Rating Class CUSIP To From ----- ----- -- ---- A-3-A 12628KAF9 A AAA/Watch Neg A-3-B 12628KAG7 A AAA/Watch Neg A-4-B 12628KAJ1 A AAA/Watch Neg A-7 12628KAN2 A AAA/Watch Neg First Horizon Alternative Mortgage Securities Trust 2006-AA6 Series 2006-AA6 Rating Class CUSIP To From ----- ----- -- ---- I-A-2 32052MAB7 A AAA/Watch Neg II-A-2 32052MAF8 A AAA/Watch Neg III-A-2 32052MAJ0 A AAA/Watch Neg Nomura Home Equity Loan Inc. Home Equity Loan Trust Series 2006- AF1 Series 2006-AF1 Rating Class CUSIP To From ----- ----- -- ---- A-4 65535AAD6 A AAA/Watch Neg RALI Series 2007-QA1 Trust Series 2007-QA1 Rating Class CUSIP To From ----- ----- -- ---- A-1 74923GAA1 BB AAA/Watch Neg A-2 74923GAB9 BB AAA/Watch Neg A-3 74923GAC7 BBB AAA/Watch Neg A-4 74923GAD5 BB AAA/Watch Neg Residential Asset Securitization Trust 2006-A11 Series 2006-K Rating Class CUSIP To From ----- ----- -- ---- 1-A-1 76113TAA8 AA AAA/Watch Neg 1-A-4 76113TAD2 AA AAA/Watch Neg 1-A-5 76113TAE0 AA AAA/Watch Neg 1-A-6 76113TAF7 AA AAA/Watch Neg 1-A-7 76113TAG5 AA AAA/Watch Neg 2-A-1 76113TAL4 AA AAA/Watch Neg 2-A-2 76113TAM2 AA AAA/Watch Neg 2-A-3 76113TAN0 AA AAA/Watch Neg 3-A-1 76113TAP5 AA AAA/Watch Neg Wachovia Mortgage Loan Trust Series 2006-AMN1 Series 2006-AMN1 Rating Class CUSIP To From ----- ----- -- ---- M-4 92978EAG9 A AA/Watch Neg M-5 92978EAH7 BBB AA-/Watch Neg Washington Mutual Mortgage Pass-Through Certificates WMALT Series 2007-4 Trust Series 2007-4 Rating Class CUSIP To From ----- ----- -- ---- 1-A-2 93936NAB9 A+ AAA/Watch Neg 1-A-4 93936NAD5 A+ AAA/Watch Neg 1-A-6 93936NAF0 A+ AAA/Watch Neg 1-A-13 93936NAN3 A+ AAA/Watch Neg 2-A-3 93936NBC6 A+ AAA/Watch Neg RATINGS AFFIRMED AND REMOVED FROM CREDITWATCH NEGATIVE Alternative Loan Trust 2007-HY4 Series 2007-HY4 Rating Class CUSIP To From ----- ----- -- ---- 1-A-2 02150QAB2 AAA AAA/Watch Neg 1-A-3 02150QAC0 AAA AAA/Watch Neg 2-A-2 02150QAE6 AAA AAA/Watch Neg 2-A-3 02150QAF3 AAA AAA/Watch Neg 3-A-2 02150QAH9 AAA AAA/Watch Neg 3-A-3 02150QAJ5 AAA AAA/Watch Neg 4-A-2 02150QAL0 AAA AAA/Watch Neg 4-A-3 02150QAM8 AAA AAA/Watch Neg ChaseFlex Trust Series 2007-3 Series 2007-3 Rating Class CUSIP To From ----- ----- -- ---- I-A1 16165AAA2 AAA AAA/Watch Neg I-A2 16165AAB0 AAA AAA/Watch Neg I-A3 16165AAC8 AAA AAA/Watch Neg I-A4 16165AAX2 AAA AAA/Watch Neg I-A5 16165AAY0 AAA AAA/Watch Neg I-A6 16165AAZ7 AAA AAA/Watch Neg I-A7 16165ABA1 AAA AAA/Watch Neg I-A8 16165ABB9 AAA AAA/Watch Neg A-P 16165ABC7 AAA AAA/Watch Neg CSAB Mortgage Backed Trust 2006-4 Series 2006-4 Rating Class CUSIP To From ----- ----- -- ---- A-1-C 12628LAC4 AAA AAA/Watch Neg A-2-A 12628LAD2 AAA AAA/Watch Neg A-2-B 12628LAE0 AAA AAA/Watch Neg A-3 12628LAF7 AAA AAA/Watch Neg A-6-A 12628LAJ9 AAA AAA/Watch Neg P 12628LAW0 AAA AAA/Watch Neg CSAB Mortgage-Backed Trust 2006-1 Series 2006-1 Rating Class CUSIP To From ----- ----- -- ---- A-1-B 22943HAB2 AAA AAA/Watch Neg A-2 22943HAC0 AAA AAA/Watch Neg A-3 22943HAD8 AAA AAA/Watch Neg A-4 22943HAE6 AAA AAA/Watch Neg CSAB Mortgage-Backed Trust 2006-3 Series 2006-3 Rating Class CUSIP To From ----- ----- -- ---- A-1-A 12628KAA0 AAA AAA/Watch Neg A-1-C 12628KAD4 AAA AAA/Watch Neg A-2 12628KAE2 AAA AAA/Watch Neg A-5-B 12628KAL6 AAA AAA/Watch Neg P 12628KAZ5 AAA AAA/Watch Neg CSMC Mortgage Backed Trust 2006-5 Series 2006-5 Rating Class CUSIP To From ----- ----- -- ---- 1-A-2 12637VAB3 AAA AAA/Watch Neg 2-A-2 12637VAD9 AAA AAA/Watch Neg 3-A-1 12637VAE7 AAA AAA/Watch Neg 3-A-3 12637VAG2 AAA AAA/Watch Neg 3-A-4 12637VAH0 AAA AAA/Watch Neg 3-A-5 12637VAJ6 AAA AAA/Watch Neg 3-A-6 12637VAK3 AAA AAA/Watch Neg 3-A-7 12637VAY3 AAA AAA/Watch Neg 3-A-8 12637VAZ0 AAA AAA/Watch Neg D-X 12637VAL1 AAA AAA/Watch Neg D-P 12637VAM9 AAA AAA/Watch Neg CSMC Mortgage-Backed Trust 2006-6 Series 2006-6 Rating Class CUSIP To From ----- ----- -- ---- 1-A-1 22942JAA1 AAA AAA/Watch Neg 1-A-2 22942JAB9 AAA AAA/Watch Neg 1-A-3 22942JAC7 AAA AAA/Watch Neg 1-A-4 22942JAD5 AAA AAA/Watch Neg 1-A-5 22942JAE3 AAA AAA/Watch Neg 1-A-6 22942JAF0 AAA AAA/Watch Neg 1-A-7 22942JAG8 AAA AAA/Watch Neg 1-A-9 22942JAJ2 AAA AAA/Watch Neg 1-A-10 22942JAK9 AAA AAA/Watch Neg 1-A-11 22942JAL7 AAA AAA/Watch Neg 1-A-12 22942JBG7 AAA AAA/Watch Neg 2-A-1 22942JAM5 AAA AAA/Watch Neg 2-A-2 22942JAN3 AAA AAA/Watch Neg 2-A-3 22942JAP8 AAA AAA/Watch Neg 2-A-4 22942JAQ6 AAA AAA/Watch Neg 2-A-6 22942JAS2 AAA AAA/Watch Neg 3-A-1 22942JAT0 AAA AAA/Watch Neg D-X 22942JAU7 AAA AAA/Watch Neg D-P 22942JAV5 AAA AAA/Watch Neg First Horizon Alternative Mortgage Securities Trust 2006-AA5 Series 2006-AA5 Rating Class CUSIP To From ----- ----- -- ---- A-2 32052QAB8 AAA AAA/Watch Neg First Horizon Alternative Mortgage Securities Trust 2006-AA6 Series 2006-AA6 Rating Class CUSIP To From I-A-IO 32052MAC5 AAA AAA/Watch Neg II-A-IO 32052MAG6 AAA AAA/Watch Neg III-A-1 32052MAH4 AAA AAA/Watch Neg III-A-IO 32052MAK7 AAA AAA/Watch Neg GSAA Home Equity Trust 2006-13 Series 2006-13 Rating Class CUSIP To From ----- ----- -- ---- AV-1 36244SAA6 AAA AAA/Watch Neg AF-2 36244SAB4 AAA AAA/Watch Neg AF-3 36244SAC2 AAA AAA/Watch Neg AF-4 36244SAD0 AAA AAA/Watch Neg AF-5 36244SAE8 AAA AAA/Watch Neg AF-6 36244SAF5 AAA AAA/Watch Neg IndyMac INDX Mortgage Loan Trust 2006-AR21 Series 2006-AR21 Rating Class CUSIP To From ----- ----- -- ---- A-2 45660HAB4 AAA AAA/Watch Neg Nomura Home Equity Loan Inc. Home Equity Loan Trust Series 2006- AF1 Series 2006-AF1 Rating Class CUSIP To From ----- ----- -- ---- A-1 65535AAA2 AAA AAA/Watch Neg A-2 65535AAB0 AAA AAA/Watch Neg A-3 65535AAC8 AAA AAA/Watch Neg Residential Asset Securitization Trust 2006-A11 Series 2006-K Rating Class CUSIP To From ----- ----- -- ---- 1-A-3 76113TAC4 AAA AAA/Watch Neg 1-PO 76113TAJ9 AAA AAA/Watch Neg 1-A-X 76113TAH3 AAA AAA/Watch Neg Wachovia Mortgage Loan Trust Series 2006-AMN1 Series 2006-AMN1 Rating Class CUSIP To From ----- ----- -- ---- A-1 92978EAA2 AAA AAA/Watch Neg A-2 92978EAB0 AAA AAA/Watch Neg A-3 92978EAC8 AAA AAA/Watch Neg M-1 92978EAD6 AA+ AA+/Watch Neg M-2 92978EAE4 AA+ AA+/Watch Neg M-3 92978EAF1 AA+ AA+/Watch Neg Washington Mutual Mortgage Pass-Through Certificates WMALT Series 2007-4 Trust Series 2007-4 Rating Class CUSIP To From ----- ----- -- ---- C-X 93936NAS2 AAA AAA/Watch Neg C-P 93936NAT0 AAA AAA/Watch Neg C-PPP 93936NAY9 AAA AAA/Watch Neg * S&P Lowers Ratings on 11 U.S. CDOs; $5.5BB in Issuance Affected ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 50 tranches from 11 U.S. cash flow and hybrid collateralized debt obligation (CDO) transactions. S&P removed 23 of the lowered ratings from CreditWatch with negative implications. The ratings on 27 of the downgraded tranches remain on CreditWatch with negative implications, indicating a significant likelihood of further downgrades. The CreditWatch placements primarily affect transactions for which a significant portion of the collateral assets currently have ratings on CreditWatch negative or have significant exposure to assets rated in the 'CCC' category. The 50 downgraded U.S. cash flow and hybrid tranches have a total issuance amount of $5.502 billion. Two of the 11 affected transactions are high-grade structured finance (SF) CDOs of asset- backed securities (ABS), which are CDOs collateralized at origination primarily by 'AAA' through 'A' rated tranches of residential mortgage-backed securities (RMBS) and other SF securities. Eight of the 11 transactions are mezzanine SF CDOs of ABS, which are collateralized in large part by mezzanine tranches of RMBS and other SF securities. The other transaction is a CDO of CDOs that was collateralized at origination primarily by notes from other CDOs, as well as by tranches from RMBS and other SF transactions. Today's CDO downgrades reflect a number of factors, including credit deterioration and recent negative rating actions on U.S. subprime RMBS securities. To date, including the CDO tranches listed below and including actions on both publicly and confidentially rated tranches, S&P has lowered its ratings on 3,456 tranches from 823 U.S. cash flow, hybrid, and synthetic CDO transactions as a result of stress in the U.S. residential mortgage market and credit deterioration of U.S. RMBS. In addition, 1,381 ratings from 418 transactions are currently on CreditWatch negative for the same reasons. In all, S&P has downgraded $380.356 billion of CDO issuance. Additionally, S&P's ratings on $36.165 billion in securities have not been lowered but are currently on CreditWatch negative, indicating a high likelihood of future downgrades. Standard & Poor's will continue to monitor the CDO transactions it rates and take rating actions, including CreditWatch placements, when appropriate. RATING ACTIONS Rating Transaction Class To From BFC Genesee CDO Ltd. A-1LA B/Watch Neg BBB+/Watch Neg BFC Genesee CDO Ltd. A-1LB CCC-/Watch Neg BBB+/Watch Neg BFC Genesee CDO Ltd. A-2L CC BB+/Watch Neg BFC Genesee CDO Ltd. A-3L CC B+/Watch Neg BFC Genesee CDO Ltd. B-1L CC CCC/Watch Neg Gemstone CDO III Ltd. A-1 AA AAA/Watch Neg Gemstone CDO III Ltd. A-3 AA AAA/Watch Neg Gemstone CDO III Ltd. B A- AA/Watch Neg Gemstone CDO III Ltd. C BBB- A/Watch Neg Gemstone CDO III Ltd. D CCC+/Watch Neg BB+/Watch Neg Gemstone CDO III Ltd. E CCC-/Watch Neg B/Watch Neg Gemstone CDO V Ltd. A-1 A-/Watch Neg AAA Gemstone CDO V Ltd. A-2 B+/Watch Neg A-/Watch Neg Gemstone CDO V Ltd. A-3 CCC/Watch Neg BB+/Watch Neg Gemstone CDO V Ltd. A-4 CCC/Watch Neg BB+/Watch Neg Gemstone CDO V Ltd. B CC B+/Watch Neg Gemstone CDO V Ltd. C CC CCC+/Watch Neg IXIS ABS CDO 1 Ltd. X AA/Watch Neg AAA/Watch Neg IXIS ABS CDO 1 Ltd. A-1LB BB+/Watch Neg AA/Watch Neg IXIS ABS CDO 1 Ltd. A-2L B-/Watch Neg A-/Watch Neg IXIS ABS CDO 1 Ltd. A-3L CCC-/Watch Neg BBB-/Watch Neg IXIS ABS CDO 1 Ltd. B-1L CC BB+/Watch Neg IXIS ABS CDO 1 Ltd. B-2L CC BB-/Watch Neg Orion 2006-1 Ltd. A CCC-/Watch Neg B+/Watch Neg Orion 2006-1 Ltd. B CC B-/Watch Neg Orion 2006-1 Ltd. C CC CCC-/Watch Neg Palmer Square 3 Ltd. A1-M B-/Watch Neg AA+/Watch Neg Palmer Square 3 Ltd. A1-Q B-/Watch Neg AA+/Watch Neg Palmer Square 3 Ltd. A2 CC A/Watch Neg Palmer Square 3 Ltd. A3 CC BB+/Watch Neg Palmer Square 3 Ltd. A4 CC B-/Watch Neg Palmer Square 3 Ltd. B CC CCC/Watch Neg Palmer Square 3 Ltd. C CC CCC-/Watch Neg Pascal CDO Ltd. A A+/Watch Neg AA Pascal CDO Ltd. B B-/Watch Neg BB- Pascal CDO Ltd. C CCC/Watch Neg CCC+/Watch Neg Springdale CDO 2006-1 Ltd. A-2 CC B-/Watch Neg Springdale CDO 2006-1 Ltd. B CC CCC-/Watch Neg STACK 2006-2 Ltd. I Funded CC B/Watch Neg STACK 2006-2 Ltd. I CC B/Watch Neg Unfunded STACK 2006-2 Ltd. II CC CCC/Watch Neg Tourmaline CDO II Ltd. A AA+/Watch Neg AAA Tourmaline CDO II Ltd. B A-/Watch Neg AAA/Watch Neg Tourmaline CDO II Ltd. C BB+/Watch Neg AA-/Watch Neg Tourmaline CDO II Ltd. D BB-/Watch Neg A-/Watch Neg Tourmaline CDO II Ltd. E CCC/Watch Neg BB+/Watch Neg Zais Investment Grade Ltd. VII A-2 AA/Watch Neg AA+/Watch Neg Zais Investment Grade Ltd. VII A-3 BB+/Watch Neg BBB-/Watch Neg Zais Investment Grade Ltd. VII B-1A CCC-/Watch Neg B-/Watch Neg Zais Investment Grade Ltd. VII B-1B CCC-/Watch Neg B-/Watch Neg OTHER RATINGS REVIEWED Transaction Class Rating Gemstone CDO III Ltd. A-2 AAA Gemstone CDO V Ltd. D CC Gemstone CDO V Ltd. E CC Orion 2006-1 Ltd. D CC Palmer Square 3 Ltd. X AA+/Watch Neg Palmer Square 3 Ltd. D CC Pascal CDO Ltd. Combo Nts AAA Springdale CDO 2006-1 Ltd. C CC Springdale CDO 2006-1 Ltd. D CC Springdale CDO 2006-1 Ltd. E CC STACK 2006-2 Ltd. III CC STACK 2006-2 Ltd. IV CC STACK 2006-2 Ltd. V CC STACK 2006-2 Ltd. VI CC STACK 2006-2 Ltd. VII CC Zais Investment Grade Ltd. VII A-1A AAA Zais Investment Grade Ltd. VII A-1B AAA * Kahn Kleinman Inks Merger Agreement with Taft Stettinius ---------------------------------------------------------- Taft Stettinius & Hollister LLP and Kahn Kleinman LPA said that Kahn Kleinman, a prominent Cleveland law firm established in 1962, will merge with and become part of Taft, effective Sept. 1, 2008. With the merger, Taft's Cleveland office will have 70 attorneys providing a full complement of legal services to clients throughout Northeast Ohio. Kahn Kleinman, which will transition to the Taft name, will move into Taft's Cleveland office located in BP Tower over the next three months. Following the merger, Taft estimates the firm will be in the top 175 firms (ranked by revenues) in the United States. With this merger, the depth and breadth of both firms' expertise has expanded to support the long-term success and growth of their clients in Northeast Ohio and throughout the region. Together, the attorneys in the combined Cleveland office will offer full- service legal support across every area of law important to our clients' businesses. The merger will bring the number of attorneys and legal professionals at Taft to more than 400 with offices in Cincinnati, Cleveland, Columbus, and Dayton, Ohio; Indianapolis, Indiana; Northern Kentucky; Phoenix, Arizona; and Beijing, China. In announcing the merger, Taft's Partner-in-Charge of the Cleveland office, Stephen M. O'Bryan said, "This merger is a great strategic fit for both firms and gives us a bigger and better toolkit of legal services to offer our clients in Northeast Ohio. The Kahn Kleinman lawyers are outstanding, and will bring great expertise and depth to our tax, wealth management, probate and estate planning, corporate finance, business law, mergers and acquisitions and securities law practices. They will also complement and significantly expand our existing real estate, litigation, labor and employment, public and governmental relations, and intellectual property practices." Kahn Kleinman Managing Partner Rick Rivitz added, "The merger with Taft and our combination with its Cleveland office will provide our existing clients with additional expertise and depth in all types of business and real estate litigation, labor and employment law, and governmental relations. The merger will also add depth and complement our existing, nationally recognized real estate practice by adding public finance, zoning, eminent domain and initiative and referendum expertise." Mr. Rivitz stated further, "Our clients will have the same personal relationships with and receive the same high level of service from the attorneys they work with today, and will further benefit from the additional support provided by a 350 lawyer firm with a 123-year track record of experience and success." As part of Taft, Mr. Rivitz will become a member of a standing management committee, and Kevin Barnes, current member of Kahn Kleinman's executive committee, will become a member of Taft's executive committee that oversees management of the firm. Taft's Managing Partner, Thomas Terp, had this to say about the merger: "Kahn Kleinman has exceptional lawyers, and their expertise, particularly in real estate, will add great depth to our existing practice, both in Northeast Ohio and for our clients throughout the Midwest. We are very excited to have them join the Taft team." Mr. Terp noted that almost half of the Kahn Kleinman's attorneys are recognized by their clients and peers in Best Lawyers in America, an indication of the strength and experience they bring to Taft. "With this merger, Taft is reaffirming its commitment to Northeast Ohio, an important market for the firm, as we continue to grow to better support the needs of our clients," said Mr. Terp. The Kahn Kleinman merger comes on the heels of Taft's merger with the former Sommer Barnard firm in Indianapolis in May and its recent opening of offices in Phoenix and Beijing. After the merger, the firm will rank approximately 125th in the National Law Journal 250, a listing of the largest law firms in the country. About Taft Taft Stettinius & Hollister LLP -- http://www.taftlaw.com/-- is a full-service firm with offices in Cincinnati, Columbus, Cleveland and Dayton, Ohio; Covington, Kentucky; Indianapolis, Indiana; Phoenix, Arizona; and Beijing, China. With more than 350 attorneys and a 123-year track record of experience, the firm has come to have not only regional prominence, but national stature as well. The firm's Labor Department, led by J. Mack Swigert, was instrumental in helping Senator Robert A. Taft draft 1947's groundbreaking Taft-Hartley Act. About Kahn Kleinman Since 1962, Kahn Kleinman LPA -- http://www.kahnkleinman.com/-- has provided thoughtful counsel to local and national businesses across every industry, from retail to contractors to venture capital funds, as well as individuals with an entrepreneurial emphasis, and the investment banking firms, venture capital funds, and financial institutions that support them. Kahn Kleinman is recognized nationally for its four and a half decades of experience in real estate acquisition, syndication, development, securities, and financing. Kahn Kleinman is proud that it has been the law firm of choice for many major transactions in and around Northeast Ohio. Together, the merged firm will have many lawyers who have been recognized for their professional accomplishments. For example, 85 attorneys are listed in the latest edition of the Best Lawyers in America; 32 attorneys are cited in the most recent edition of Chambers USA: America's Leading Lawyers for Business; and 75 were identified as Indiana Super Lawyers and Ohio Super Lawyers. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Aug. 14, 2008 TURNAROUND MANAGEMENT ASSOCIATION Nassau vs. Suffolk Softball Game Eisenhower Park, East Meadow, New York Contact: 631-251-6296 or www.turnaround.org Aug. 14, 2008 TURNAROUND MANAGEMENT ASSOCIATION Social & Networking Meeting CityPlace Center, Dallas, Texas Contact: 972-906-9436 or www.turnaround.org Aug. 15, 2008 TURNAROUND MANAGEMENT ASSOCIATION Family Night Baseball TBD, New Jersey Contact: 908-575-7333 or www.turnaround.org Aug. 16-19, 2008 AMERICAN BANKRUPTCY INSTITUTE 13th Annual Southeast Bankruptcy Workshop Ritz-Carlton, Amelia Island, Florida Contact: http://www.abiworld.org/ Aug. 20-24, 2008 NATIONAL ASSOCIATION OF BANKRUPTCY JUDGES NABT Convention Captain Cook, Anchorage, Alaska Contact: http://www.nabt.com/ Aug. 26, 2008 TURNAROUND MANAGEMENT ASSOCIATION Do's and Don'ts of Investing in a Turnaround Citrus Club, Orlando, Florida Contact: www.turnaround.org/ Sept. 4-5, 2008 AMERICAN BANKRUPTCY INSTITUTE Complex Financial Restructuring Program Four Seasons, Las Vegas, Nevada Contact: http://www.abiworld.org/ Sept. 4-6, 2008 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Four Seasons, Las Vegas, Nevada Contact: http://www.abiworld.org/ Aug. 27-28, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA 4th Annual Northeast Regional Conference Gideon Putnam Resort & Spa, Saratoga Springs, New York Contact: www.turnaround.org Aug. 28, 2008 TURNAROUND MANAGEMENT ASSOCIATION Arizona Chapter Mixer TBD, Phoenix, Arizona Contact: 623-581-3597 or www.turnaround.org Sept. 10, 2008 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast Marriott, Bridgewater, New Jersey Contact: 908-575-7333 or www.turnaround.org Sept. 10, 2008 TURNAROUND MANAGEMENT ASSOCIATION Dallas / Fort Worth Restructuring Workshop Belo Mansion Dallas, Texas Contact: www.turnaround.org Sept. 11, 2008 TURNAROUND MANAGEMENT ASSOCIATION Lenders Forum TBD, Long Island, New York Contact: www.turnaround.org Sept. 11-12, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Mid-America Regional Conference Oak Brook Hills Marriott Resort, Oak Brook, Illinois Contact: www.turnaround.org Sept. 11-14, 2008 TURNAROUND MANAGEMENT ASSOCIATION Cross Border Conference Grand Okanagan Resort, Kelowna, British Columbia Contact: www.turnaround.org Sept. 12, 2008 AMERICAN BANKRUPTCY INSTITUTE ABI/GULC Views from the Bench Georgetown University Law Center, Washington, DC Contact: 1-703-739-0800; http://www.abiworld.org/ Sept. 16-18, 2008 ASSOCIATION OF INSOLVENCY &RESTRUCTURING ADVISORS 2nd Annual Restructuring & Investing Conference Shanghai, China Contact: http://www.airacira.org/ Sept. 17, 2008 TURNAROUND MANAGEMENT ASSOCIATION Real Estate / Condo Restructuring Panel Marriott North, Fort Lauderdale, Florida Contact: www.turnaround.org/ Sept. 18, 2008 TURNAROUND MANAGEMENT ASSOCIATION Joint Event - CFA/IWIRC/RMA/NJTMA/NYIC Maplewood Country Club, Maplewood, New Jersey Contact: 908-575-7333 or www.turnaround.org Sept. 18, 2008 TURNAROUND MANAGEMENT ASSOCIATION Chapter Lunch Program Nashville City Center, Nashville, Tennessee Contact: 615-850-8678 or www.turnaround.org Sept. 18, 2008 TURNAROUND MANAGEMENT ASSOCIATION Healthcare Industry Update - Panel Discussion Summit Club, Birmingham, Alabama Contact: www.turnaround.org Sept. 18, 2008 TURNAROUND MANAGEMENT ASSOCIATION Effective Turnarounds: A View From US Trustees TBA, Syracuse, New York Contact: www.turnaround.org Sept. 18-19, 2008 AMERICAN CONFERENCE INSTITUTE Advanced Insolvency Law and Practice Conference Paris, France Contact: www.americanconference.com Sept. 24, 2008 TURNAROUND MANAGEMENT ASSOCIATION 13 Week Cash Flow Workshop: An Overview McCormick & Schmick's, Las Vegas, Nevada Contact: www.turnaround.org Sept. 24-25, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Florida Annual Golf Tournament Champions Gate Golf Club, Orlando, Florida Contact: 561-882-1331 or www.turnaround.org Sept. 24-26, 2008 INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION IWIRC 15th Annual Fall Conference Scottsdale, Arizona Contact: http://www.ncbj.org/ Sept. 24-27, 2008 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Desert Ridge Marriott, Scottsdale, Arizona Contact: http://www.iwirc.org/ Sept. 25, 2008 TURNAROUND MANAGEMENT ASSOCIATION Case Study with Tom Kim, TMA Small Business of the Year Turnaround Award - TMA Arizona Chapter Meeting TBD, Phoenix, Arizona Contact: www.turnaround.org Sept. 26, 2008 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Marriott Desert Ridge, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ Sept. 30, 2008 TURNAROUND MANAGEMENT ASSOCIATION Private Equity Panel Centre Club, Tampa, Florida Contact: www.turnaround.org/ Oct. 3, 2008 AMERICAN BANKRUPTCY INSTITUTE ABI/UMKC Midwestern Bankruptcy Institute H. Roe Bartle Hall Convention Center, Kansas City Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 9, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Luncheon - Chapter 11 University Club, Jacksonville, Florida Contact: http://www.turnaround.org/ Oct. 13, 2008 AMERICAN BANKRUPTCY INSTITUTE Consumer Bankruptcy Conference Standard Club, Chicago, Illinois Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 14, 2008 TURNAROUND MANAGEMENT ASSOCIATION Annual Charity Golf Event Forest Park Golf Course, St. Louis, Missouri Contact: www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION Billiards Networking Night Herbert's Billiards, Secaucus, New Jersey Contact: 908-575-7333 or www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION LI-TMA Member Social Davenport Press, Mineola, New York Contact: 631-251-6296 or www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting TBD, Calgary, Alberta Contact: 503-768-4299 or www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION View from the Bench - Bankruptcy Update Summit Club, Birmingham, Alabama Contact: www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION How to Contract with a Turnaround Manager University Club, Portland, Oregon Contact: www.turnaround.org Oct. 22, 2008 TURNAROUND MANAGEMENT ASSOCIATION Turnaround Nevada Award Night McCormick & Schmick's, Las Vegas, Nevada Contact: www.turnaround.org Oct. 23, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Arizona Chapter Meeting - Election Oriented TBD, Phoenix, Arizona Contact: www.turnaround.org Oct. 23, 2008 TURNAROUND MANAGEMENT ASSOCIATION Effective Turnarounds: A Panel of Professionals TBA, Rochester, New York Contact: www.turnaround.org Oct. 23-24, 2008 AMERICAN CONFERENCE INSTITUTE Distressed Assets Boot Camp TBD, London, United Kingdom Contact: www.americanconference.com Oct. 28, 2008 TURNAROUND MANAGEMENT ASSOCIATION State of the Capital Markets Citrus Club, Orlando, Florida Contact: www.turnaround.org/ Oct. 28-31, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott New Orleans, Louisiana Contact: 312-578-6900; http://www.turnaround.org/ Oct. 29-30, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Corporate Governance Meetings Marriott, New Orleans, Louisiana Contact: www.turnaround.org Oct. 30 & 31, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Physicians Agreements and Ventures Contact: 800-726-2524; 903-595-3800; www.renaissanceamerican.com Oct. 31, 2008 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium Hilton, Frankfurt, Germany Contact: 1-703-739-0800; http://www.abiworld.org/ Nov. 6, 2008 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast Coach House Diner & Restaurant, Hackensack, New Jersey Contact: 908-575-7333 or www.turnaround.org Nov. 11, 2008 AMERICAN BANKRUPTCY INSTITUTE Detroit Consumer Bankruptcy Conference Marriott, Troy, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ Nov. 13, 2008 TURNAROUND MANAGEMENT ASSOCIATION Turnaround Case Study Summit Club, Birmingham, Alabama Contact: www.turnaround.org Nov. 13, 2008 TURNAROUND MANAGEMENT ASSOCIATION Effective Turnarounds:A View From Workout Consultants TBA, Buffalo, New York Contact: www.turnaround.org Nov. 13, 2008 TURNAROUND MANAGEMENT ASSOCIATION LI-TMA Social TBD, Melville, New York Contact: 631-251-6296 or www.turnaround.org Nov. 13, 2008 TURNAROUND MANAGEMENT ASSOCIATION Dinner Meeting TBD, Calgary, Alberta Contact: 503-768-4299 or www.turnaround.org Nov. 19, 2008 TURNAROUND MANAGEMENT ASSOCIATION Special Program Tournament Players Club at Jasna Polana, New Jersey Contact: 908-575-7333 or www.turnaround.org Nov. 19, 2008 TURNAROUND MANAGEMENT ASSOCIATION Interaction Between Professionals in a Restructuring/Bankruptcy Bankers Club, Miami, Florida Contact: 312-578-6900; http://www.turnaround.org/ Nov. 20, 2008 TURNAROUND MANAGEMENT ASSOCIATION Senior Housing & Long Term Care Washington Athletic Club,Seattle, Washington Contact: www.turnaround.org Nov. 27, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Arizona Chapter Meeting - Chris Kaup TBD, Phoenix, Arizona Contact: www.turnaround.org Dec. 3, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday Party McCormick & Schmick's, Las Vegas, Nevada Contact: 702-952-2480 or www.turnaround.org Dec. 3, 2008 TURNAROUND MANAGEMENT ASSOCIATION Christmas Function Terminal City Club, Vancouver, British Columbia Contact: 503-768-4299 or www.turnaround.org Dec. 3-5, 2008 AMERICAN BANKRUPTCY INSTITUTE 20th Annual Winter Leadership Conference Westin La Paloma Resort & Spa Tucson, Arizona Contact: http://www.abiworld.org/ Dec. 8, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday Gathering TBD, Long Island, New York Contact: 631-251-6296 or www.turnaround.org Dec. 9, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday MIxer Washington Athletic Club, Seattle, Washington Contact: 503-768-4299 or www.turnaround.org Dec. 11, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday MIxer University Club, Portland, Oregon Contact: 503-768-4299 or www.turnaround.org Dec. 18, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday MIxer TBD, Phoenix, Arizona Contact: 623-581-3597 or www.turnaround.org Dec. 31, 2008 TURNAROUND MANAGEMENT ASSOCIATION Sponsorships - Annual Golf Outing, Various Events TBA, New Jersey Contact: 908-575-7333 or www.turnaround.org Jan. 21-22, 2009 TURNAROUND MANAGEMENT ASSOCIATION Corporate Governance Meetings Bellagio, Las Vegas, Nevada Contact: www.turnaround.org Jan. 22-23, 2009 TURNAROUND MANAGEMENT ASSOCIATION Distressed Investing Conference Bellagio, Las Vegas, Nevada Contact: www.turnaround.org Jan. 22-23, 2009 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Westin Tabor Center, Denver, Colorado Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 5-7, 2009 AMERICAN BANKRUPTCY INSTITUTE Caribbean Insolvency Symposium Westin Casurina, Grand Cayman Island, AL Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 25-27, 2009 AMERICAN BANKRUPTCY INSTITUTE Valcon Four Seasons, Las Vegas, Nevada Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 13, 2009 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West Beverly Wilshire, Beverly Hills, California Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 17-18, 2009 NATIONAL ASSOCIATION OFBANKRUPTCY TRUSTEES NABT Spring Seminar The Peabody, Orlando, Florida Contact: http://www.nabt.com/ Apr. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE Consumer Bankruptcy Conference John Adams Courthouse, Boston, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 27-28, 2009 TURNAROUND MANAGEMENT ASSOCIATION Corporate Governance Meetings Intercontinental Hotel, Chicago, Illinois Contact: www.turnaround.org Apr. 28-30, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Intercontinental Hotel, Chicago, Illinois Contact: www.turnaround.org May 7-10, 2009 AMERICAN BANKRUPTCY INSTITUTE 27th Annual Spring Meeting Gaylord National Resort & Convention Center National Harbor, Maryland Contact: http://www.abiworld.org/ May 14-16, 2009 ALI-ABA Chapter 11 Business Reorganizations Langham Hotel, Boston, Massachusetts Contact: http://www.ali-aba.org June 11-13, 2009 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ June 21-24, 2009 INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY & BANKRUPTCY PROFESSIONALS 8th International World Congress TBA Contact: http://www.insol.org/ July 16-19, 2009 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Mt. Washington Inn Bretton Woods, New Hampshire Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 15-18, 2010 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 17-20, 2010 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 7-10, 2010 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Ocean Edge Resort, Brewster, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 5-7, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ BEARD AUDIO CONFERENCES 2006 BACPA Library Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES BAPCPA One Year On: Lessons Learned and Outlook Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Calpine's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Carve-Out Agreements for Unsecured Creditors Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changes to Cross-Border Insolvencies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changing Roles & Responsibilities of Creditors' Committees Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Chinas New Enterprise Bankruptcy Law Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Clash of the Titans -- Bankruptcy vs. IP Rights Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Coming Changes in Small Business Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Corporate Bankruptcy Bootcamp: A Nuts & Bolts Primer for Navigating the Restructuring Process Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Dana's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Deepening Insolvency Widening Controversy: Current Risks, Latest Decisions Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Diagnosing Problems in Troubled Companies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Claims Trading Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Market Opportunities Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Real Estate under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Employee Benefits and Executive Compensation under the New Code Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Equitable Subordination and Recharacterization Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Examining the Examiners: Pros and Cons of Using Examiners in Chapter 11 Proceedings Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Fundamentals of Corporate Bankruptcy and Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Handling Complex Chapter 11 Restructuring Issues Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Healthcare Bankruptcy Reforms Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Homestead Exemptions under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Hospitals in Crisis: The Insolvency Crisis Plaguing Hospitals Across the U.S. Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES IP Rights In Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES KERPs and Bonuses under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES New 'Red Flag' Identity Theft Rules Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Non-Traditional Lenders and the Impact of Loan-to-Own Strategies on the Restructuring Process Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Partnerships in Bankruptcy: Unwinding The Deal Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Privacy Rights, Protections & Pitfalls in Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Real Estate Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Reverse Mergersthe New IPO? Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Second Lien Financings and Intercreditor Agreements Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Surviving the Digital Deluge: Best Practices in E-Discovery and Records Management for Bankruptcy Practitioners and Litigators Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Technology as a Competitive Advantage For Todays Legal Processes Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Battle of Green & Red: Effect of Bankruptcy on Obligations to Clean Up Contaminated Property Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Subprime Sector Meltdown: Legal Developments and Latest Opportunities Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Twenty-Day Claims Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Using Virtual Data Rooms to Expedite Corporate Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Using Virtual Data Rooms to Expedite M&A and Insolvency Proceedings Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Validating Distressed Security Portfolios: Year-End Price Validation and Risk Assessment Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES When Tenants File -- A Landlord's BAPCPA Survival Guide Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. * * * Featured Conferences Renaissance American Management and Beard Conferences presents Oct. 30-31, 2008 Physician Agreements & Ventures The Millennium Knickerbocker Hotel - Chicago Brochure will be available soon! Nov. 17-18, 2008 Distressed Investing The Helmsley Park Lane - New York Brochure will be available soon! * * * Beard Audio Conferences presents: Bankruptcy and Restructuring Audio Conference CDs * * * More information and list of available titles at: http://beardaudioconferences.com/bin/topics?category_id=BAR ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Raphael M. Palomino, Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, Joseph Medel C. Martirez, Ma. Cristina I. Canson, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2008. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***