/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/080829.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, August 29, 2008, Vol. 12, No. 206 Headlines 530 WEST: Goes Bankrupt Amidst Disputes, Difficulty in Paying Bill A&F PROPERTIES: Voluntary Chapter 11 Case Summary AGY HOLDING: S&P Keeps 'B' Rating; Outlook Revised to Stable AIRLIE LCDO I: S&P Lowers Rating on Class D Notes to 'B+' AIRLIE LCDO II: S&P Lowers Ratings on Class D Notes to 'BB' AIRTRAN HOLDINGS: Cut to 'CCC+'; S&P Expects Heavy Losses ALMERIA EQUITIES: Case Summary & Largest Unsecured Creditor ALPHA MEDIA: Moody's Withdraws B2 Rating on $22.3 Mil. Sr. Notes AMORES OIL: Case Summary & 20 Largest Unsecured Creditors AMR CORP: Notifies Put Option for 4.25% Senior Convertible Notes ANDRE KANDY: Case Summary & 12 Largest Unsecured Creditors ASHTON WOODS: Violates Terms of Bank Credit Facility, $125MM Notes ARCAP 2005-RR5: S&P Cuts Class M to 'D' on Interest Shortfalls ARIZANT: S&P Revises 'B+' Rating Outlook to Positive ARIZONA DISCOUNT: Terminated GE Credit Line Cues Bankruptcy Filing ATLANTIS PLASTICS: Says Elkhart Plant Sale Possible AVALON FORTRESS: Plagued by IRS Issues; Files for Bankruptcy BABSON CLO: S&P Places 'BB' Ratings on CreditWatch Negative BANC OF AMERICA: Fitch Affirms B Rating on $19.3MM Class K Certs. BANYAN CORP: June 30 Balance Sheet Upside-Down by $1,692,052 BAUGHER CHEVROLET-BUICK: To Sell Biz to Rival Obaugh Auto Group BEAR STEARNS: Moody's Junks Two Class Certificates BLOCKBUSTER INC: S&P Affirms 'B-' Corporate Credit Rating, Stable BLUE WATER: Court Approves $6 Million Sale of Plant and Equipment BOSCOV'S INC: Proposes $1.45MM Bonus Payments to Top Executives BSCM TRUST: Fitch Affirms B- Rating on $8.3 Million Class Q Loans CAPTAIN'S COVE: Case Summary & 20 Largest Unsecured Creditors CAREFREE 65: Voluntary Chapter 11 Case Summary CE GEN: S&P Affirms 'BB+' on Strength of Contracted Cash Flow CENTRO NP: Posts $299.5 Million Net Loss in 2008 Second Quarter CG JCF: S&P Cuts Bank Loan, Counterparty Credit Ratings to 'B' CHARMING SHOPPES: S&P Says Ratings Unaffected By Catalog Sale CIFG GUARANTY: S&P Cuts Ratings on 8 Insured MTN Issues to 'B' CIFG GUARANTY: S&P Cuts Ratings on 5 Classes to 'B' CLUBHOUSE AT FAIRWAY: Case Summary & 10 Largest Unsec. Creditors COMMODORE CDO: Fitch Cuts Ratings on 5 Note Classes CONTINENTAL ALLOYS: S&P Puts 'B' Credit Rating on Watch Negative COTT CORP: Cut by S&P to 'B-' on Drop in 2008 Profit Expectations DAVISON PLAZA: Case Summary & Four Largest Unsecured Creditors DELTA AIR: S&P Sees $500MM Loss for 2008; 'B' Rating Off Watch DEUTSCHE MORTGAGE: Fitch Affirms B- Rating on $19.7MM Cl. K Certs. DUNMORE HOMES: Court Approves Settlement With Travelers, et al. ENCORE ACQUISITION: S&P Lowers Subordinated Debt Rating to 'B' EXUM RIDGE: S&P Lowers Classes E-1, E-2 Ratings to 'CCC-' FEDERAL-MOGUL: Shows Stability Amid Auto Sales Slump FGIC INC: $184BB in Insured Muni Bonds to Be Reinsured by MBIA FREMONT GENERAL: Equity Panel Wants Financial Documents Produced FRONTIER AIRLINES: Files List of Assets and Liabilities G-I HOLDING: Files Joint Plan of Reorganization GLOBAL BEVERAGE: June 30 Balance Sheet Upside-Down by $5,391,004 GOLDMAN SACHS CBO: S&P Raises Class B Rating to 'BB' GRANDLUXE RAIL: Financial Hurdles Spur Halt in Railway Operations GS MORTGAGE: Fitch Affirms B- Rating on $3.3 Million Class O Loans HAIGHTS CROSS: Moody's Junks Senior Unsecured Notes HAIGHTS CROSS: S&P Affirms 'CCC' Corporate Credit Rating HAROLD GLICK: Case Summary & Three Largest Unsecured Creditors HEALTH MANAGEMENT: Moody's Cuts Rating on $2.7 Bil. Sr. Loan to B1 HEALTHSOUTH CORP: Moody's Junks 10.75% Senior Unsecured Notes HELLER FINANCIAL: Fitch Holds B- rating on $9.6MM Class M Certs. HERCULES CHEMICAL: Case Summary & 18 Largest Unsecured Creditors HILEX-POLY: Gets $125 Million Exit Financing from GE Commercial HINES HORTICULTURE: Hearing on Planned Sale Procedures Set Nov. 20 HSI ASSET: Cuts Ratings on 4 Classes of Securities to 'B' IKON OFFICE: Ricoh Deal Cues Moody's to Review Low-B Ratings IKON OFFICE: Ricoh Buyout Cues S&P to Put 'BB-' on Watch Pos INDALEX HOLDING: S&P Cuts Credit Rating to 'CCC+'; Outlook Neg JACKSONVILLE ECONOMIC: Moody's Rates $23MM Sr. Unsec. Bonds to Ba1 JEFFERSON COUNTY: S&P Cuts SPUR on GO Warrants to 'B' JENNIFER MCSWEENEY: Case Summary & 20 Largest Unsecured Creditors JERK MACHINE: Case Summary & 20 Largest Unsecured Creditors JJH INVESTMENTS: Development Issues Lead to Bankruptcy JP MORGAN: Fitch Lowers Ratings on Classes N and P Certificates JPMORGAN TRUST: Cuts Rating on Classes P, Q Ratings to CCC JUNIPER CBO: Classes A-4L, A-4, B-2 Have 'CCC-', 'CC' Ratings KANDY LLC: Voluntary Chapter 11 Case Summary KENT SHAFFER: Case Summary & 18 Largest Unsecured Creditors LANDSOURCE COMMUNITIES: Panel to Challenge Enforceability of Liens LANDSOURCE COMMUNITIES: Says Panel Needs No Further Discovery LEHMAN BROTHERS: To Slash Up to 6% of Workforce LEVITZ FURNITURE: Trustee Wants Professional Fees Reduced LEVITZ FURNITURE: U.S. Trustee Wants Chapter 11 Case Converted LINENS N THINGS: Court Approves Second Round of Closing Sales LINENS N THINGS: Court Approves Oct. 6 as Claims Bar Date LINENS N THINGS: Court OK Waiver of Claims Against Landlords LODGENET INTERACTIVE: Appoints Two Members to Board of Directors LODGENET INTERACTIVE: S&P Cuts Rating to 'B'; Off Watch MANTIFF JACKSON: Case Summary & 40 Largest Unsecured Creditors MASTRO'S RESTAURANTS: S&P Affirms 'B-' Corporate Credit Rating MERCURY COMPANIES: Files for Chapter 11 Protection in Colorado MERVYN'S LLC: Taps Richards Layton as Bankruptcy Co-Counsel MERVYN'S LLC: Wants to Hire Miller Buckfire as Financial Advisor MLMT COMMERCIAL: Fitch Affirms Ratings on Series 2007-C1 Loans MORGAN STANLEY: Fitch Affirms B- Rating on $15.9MM Class L Certs. MORRIS PUBLISHING: Cut to 'CCC+'; S&P Sees Covenant Breach MRS FIELDS: Court Approves All First Day Motions MRS FIELDS: Plan Confirmation Hearing Set For October 2 MSC MEDICAL: S&P Withdraws 'CCC+' Rating MW JOHNSON: Court Allows Investigation of Insiders NATIONAL DRY: Court Approves Sell of 28 Stores for $3 Million NAVIGATOR CDO: S&P Affirms 'B' Rating on Class D NEWARK GROUP: S&P Affirms 'B' Credit Rating; Outlook Negative NEW YORK RACING: Oversight Board OKs 7th Franchise Extension NEXIA HOLDINGS: June 30 Balance Sheet Upside-Down by $8,375,961 NORTH OAKLAND: Files for Bankruptcy, To Sell Assets for $9 Million NORTH OAKLAND: Case Summary & 20 Largest Unsecured Creditors NOVA CDO: S&P Junks Ratings on Four Classes of Securities OLIO DENTAL: Case Summary & 18 Largest Unsecured Creditors OXBOW CARBON: Debt Reduction Cues S&P to Put 'B+' on Watch Pos OXIS INTERNATIONAL: June 30 Balance Sheet Upside-Down by $2.8MM PATIENT SAFETY: Posts $2,399,825 Net Loss in 2008 Second Quarter PEBBLE CREEK: S&P Cuts 2007-2 Class E Rating to 'B-' PNC MORTGAGE: Fitch Downgrades Two Classes of 2000-C1 Certificates PORTOLA PACKAGING: Files for Bankruptcy, Gets $79MM DIP Facility PORTOLA PACKAGING: Case Summary & 20 Largest Unsecured Creditors POSITRON CORP: June 30 Balance Sheet Upside-Down by $6,757,000 PROBE MANUFACTURING: Inks Purchase Agreement with Solar Masters PROGRESSIVE MOLDED: Gets Court Nod to Hire Paul Weiss as Attorneys PROGRESSIVE MOLDED: Can Hire Young Conaway as Delaware Counsel PROGRESSIVE MOLDED: CCCA Court Extends Stay Order Until Oct. 31 PROGRESSIVE MOLDED: CCCA Court OKs Danbury to Sell Canadian Assets PROGRESSIVE MOLDED: Withdraws Application to Hire Conway Mackenzie PROXYMED INC: Common Stock Subject to Nasdaq Delisting RADIAN INSURANCE: Downgrade Cues S&P to Lower 3 U.S. ABS Deals RACE POINT: S&P Affirms 'BB' Ratings on 3 Classes of Securities REDWOOD PLACE: Case Summary & 20 Largest Unsecured Creditors RENAISSANCE HEALTHCARE: Files for Chapter 11 Protection in Texas RIDGEMOUR MEYER: Former Partner Ginsburg Wants Case Dismissed RIDGEMOUR MEYER: Case Summary & Five Largest Unsecured Creditors ROBERT WALLACH: Voluntary Chapter 11 Case Summary ROBERT WARFIELD: Case Summary & 20 Largest Unsecured Creditors RONALD HUCH: Case Summary & Four Largest Unsecured Creditors ROYAL PALM: Case Summary & Three Largest Unsecured Creditors RUBEN SALAZAR: Voluntary Chapter 11 Case Summary SAGECREST FINANCE: Wants to Access Deutsche Bank Cash Collateral SEMGROUP LP: U.S. Trustee, Panel Balk at Blackstone Fee Structure SEMGROUP LP: Oil Suppliers Demand Payment, Return of Deliveries SEMGROUP LP: HSBC, et al., Disclose Interest in Bankruptcy Case SHERWOOD RESOURCES: Case Summary & 20 Largest Unsecured Creditors SHOE PAVILION: Gets Nasdaq's Delisting Notice Effective Sept. 2 SOUTH STREET: S&P Puts 'CC' Rating on Cl. A-4A, A-4C and A-4L SOUTHEAST WAFFLES: Has Accounting Irregularities; Files Bankruptcy STELLAR MANAGEMENT: S&P Keeps Class K 'CCC' Rating on Watch Neg STEVE & BARRY'S: Schedules Filing Deadline Extended to Sept. 3 STONE TOWER: S&P Affirms 'BB' Rating on Class D Securities STRUCTURED ARM: S&P Junks Ratings on 20 Classes of Securities STUDIO THEATRE: Hopes Kidman's Comment to Spur Donation Momentum SUTTER CBO: S&P Affirms 'CCC' Rating on Class B-2 Securities SYMPHONY CLO: S&P Assigns 'BB' Rating on Class D Securities SYNTAX-BRILLIAN: Judge Tentatively Approves Assets Sale to TCV TCW SELECT: Moody's Lifts $16 Mil. Senior Secured Notes to Ba1 TEEKAY CORP: Cut by S&P to 'BB' on Weaker Financial Risk Profile TEGRANT CORP: S&P Downgrades Rating to 'CCC', Outlook Negative TERWIN MORTGAGE: S&P Junks 2006-10SL Class A-X Rating TIAA SEASONED: Fitch Affirms Ratings on 21 Series 2007-C4 Certs. TRAINER WORTHAM: Fitch Cuts Ratings on 5 Note Classes TRIAD GUARANTY: Business Conversion Cues Fitch to Withdraw Ratings TRIAXX FUNDING: Fitch Affirms Ratings on Four Classes of Notes TRIBUNE CO: Fitch Junks Issuer Default Rating to CCC; Outlook Neg. US AIRWAYS: Raises $179,000,000 from Stock Offering US AIRWAYS: Registers 6.7 Million Shares for 2008 Incentive Plan US ENERGY: Files Chapter 11 Plan of Reorganization VIRGIN MOBILE: Completes Acquisition of Helio WACHOVIA BANK: Fitch Affirms Ratings on S. 2005-C17 Certificates WARNER ROBBINS: Case Summary & 20 Largest Unsecured Creditors WELLMAN INC: Amends Credit Agreement to Pursue Chapter 11 Plan WELLMAN INC: Court Defers Exclusivity Extension Hearing to Sept. 4 WESTAR ENERGY: Fitch Lifts Issuer Default Rating to BBB- WILBRAHAM CBO: S&P Assigns 'CC' Rating on Classes B-1, B-2 Notes WILLIAM BISHOP: Case Summary & 20 Largest Unsecured Creditors WINSTON-SALEM: U.S. Trustee Wants Cases Treated Separately WOODSIDE GROUP: Business as Usual Amid Involuntary Bankruptcy WORKFLOW MANAGEMENT: Merger No Effect on 'B-' Rating, S&P Says * S&P Cuts 46 Ratings on 4 U.S. Alt-A RMBS Transactions * Bankruptcy Filings Soar to Almost 30% in Past 12 Months * Fried Frank Selected Five New Partners * BOOK REVIEW: Working Together: 12 Principles for Achieving Excellence in Managing Projects, Teams, and Organizations ********* 530 WEST: Goes Bankrupt Amidst Disputes, Difficulty in Paying Bill ------------------------------------------------------------------ William Rochelle of Bloomberg News reports that the owner of two nightclubs in the Chelsea neighborhood of Manhattan named Pink Elephant and Mansion filed for Chapter 11 reorganization Aug. 21 in New York. Mr. Rochelle said the company is having disputes with a landlord, was involved in lawsuits, and is behind in paying the electric bill. Based in New York, NY, 530 West 28th St., LP -- dba Mansion, Pink Elephant, Crobar, Studio Mezmore -- filed for bankruptcy on Aug. 21, 2008 (Bankr. S.D.N.Y., Case No. 08-13266). John H. Hall, Jr., Esq., at Shaw, Licitra, Gulotta & Esernio, P.C., represents the Debtor. When the debtor filed for bankruptcy, it listed assets and debts of $1,000,000 to $10,000,000, each. A&F PROPERTIES: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: A&F Properties, Inc. Bankruptcy Case No.: 08-02524 Chapter 11 Petition Date: August 27, 2008 Court: Southern District of Mississippi (Jackson Divisional Office) Debtor's Counsel: J. Walter Newman, IV, Esq. 539 Trustmark National Bank Bldg. Jackson, MS 39201 Tel: (601) 948-0586 Fax: (601) 948-0588 Email: wnewman95@msn.com Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of its largest unsecured creditors. AGY HOLDING: S&P Keeps 'B' Rating; Outlook Revised to Stable ------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on AGY Holding Corp. to stable from negative. At the same time, Standard & Poor's affirmed its ratings, including its 'B' corporate credit rating, on AGY. "The outlook revision reflects our expectation for a stable operating environment for AGY, and follows several quarters of steadily improving earnings," said Standard & Poor's credit analyst Paul Kurias. "Overall earnings have improved over the past several quarters, despite the gradual decline in earnings from a key product application -- the military-Humvee. AGY has more than offset the decline in earnings from the military-Humvee with an increase in earnings from other applications, as well as by developing new applications. Consequently, EBITDA for the 12 months ended June 30, 2008, improved to about $50 million from about $42 million in the previous year. We expect AGY to at least maintain this level of earnings in the future," S&P says. At June 30, 2008, total adjusted debt (including the present value of operating leases, unfunded postretirement obligations, and the notional value of precious metals leased) was about $311 million. The ratings on AGY reflect a vulnerable business position in a relatively narrow segment of the glass fiber market, with meaningful concentration of revenue and operating profits from a few customers and product applications, and a highly leveraged financial profile. Partially offsetting these risk factors are the company's technological capabilities in some specialized product categories, a focus on increasing the contribution from value- added products, and good market shares in the business niches in which AGY competes. Aiken, S.C.-based AGY and its operating subsidiaries manufacture glass yarns with varying degrees of specialization and technological complexity. AIRLIE LCDO I: S&P Lowers Rating on Class D Notes to 'B+' --------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class C and D notes issued by Airlie LCDO I (Aviv LCDO 2006-3) Ltd. The ratings on these notes remain on CreditWatch with negative implications, where they were placed on July 18, 2008. Additionally, the 'AAA' ratings on the class B-1 and B-2 notes also remain on CreditWatch negative, where they were also placed on July 18, 2008. Airlie LCDO I (Aviv LCDO 2006-3) Ltd. is a hybrid collateralized debt obligation (CDO) transaction collateralized primarily by corporate loans. The lowered ratings primarily reflect negative rating migration among the corporate names referenced by the transaction. Currently, more than 11% of underlying loans have ratings in the 'CCC' range, and an additional 6% have ratings that are on CreditWatch with negative implications. The transaction has also experienced three credit events. According to the most recent trustee report, dated Aug 7, 2008, these credit events have been settled, but resulted in a net loss of $6.06 million to the transaction. Additionally, the eligible investments in the transaction are subject to market value risk. Standard & Poor's will continue to review whether the ratings currently assigned to the notes remain consistent with the credit enhancement available to support them. RATINGS LOWERED AND REMAINING ON CREDITWATCH NEGATIVE Airlie LCDO I (Aviv LCDO 2006-3) Ltd. Rating Class To From Balance (mil. $) ----- -- ---- ---------------- C BBB-/Watch Neg A/Watch Neg 14.500 D B+/Watch Neg BBB/Watch Neg 12.000 RATINGS REMAINING ON CREDITWATCH NEGATIVE Airlie LCDO I (Aviv LCDO 2006-3) Ltd. Class Rating Balance (mil.$) ----- ------ --------------- B-1 AAA/Watch Neg 18.397 B-2 AAA/Watch Neg 44.872 TRANSACTION INFORMATION Issuer: Airlie LCDO I (Aviv LCDO 2006-3) Ltd. Co-issuer: Airlie LCDO I (Aviv LCDO 2006-3) Corp. Underwriter: Lehman Brothers Special Financing Inc. Trustee: U.S. Bank N.A. AIRLIE LCDO II: S&P Lowers Ratings on Class D Notes to 'BB' ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class C and D notes issued by Airlie LCDO II (Pebble Creek 2007-1) Ltd. The ratings remain on CreditWatch with negative implications, where they were placed on July 18, 2008. At the same time, S&P affirmed the rating on the class B notes, reflecting an adequate level of credit support to sustain the rating. Airlie LCDO II (Pebble Creek 2007-1) Ltd. is a hybrid collateralized debt obligation (CDO) transaction collateralized primarily by corporate loans. The lowered ratings primarily reflect negative rating migration in the corporate names referenced by the transaction. Currently, over 9% of the underlying loans are rated in the 'CCC' category, and the ratings on an additional 9% are on CreditWatch negative. The transaction has also experienced four credit events. According to the most recent trustee report, dated Aug. 7, 2008, these credit events have been settled, resulting in a net loss of $5.1 million to the transaction. Additionally, the eligible investments in the deal are subject to market value risk. Standard & Poor's will continue to review the ratings currently assigned to the notes to determine whether they remain consistent with the credit enhancement available. RATINGS LOWERED AND REMAINING ON CREDITWATCH NEGATIVE Class To From Balance (mil. $) ----- -- ---- ---------------- C BBB+/Watch Neg A/Watch Neg 16.000 D BB/Watch Neg BBB/Watch Neg 16.000 RATING AFFIRMED Airlie LCDO II (Pebble Creek 2007-1) Ltd. Class Rating Balance (mil.$) ----- ------ --------------- B AAA 60.400 TRANSACTION INFORMATION Issuer: Airlie LCDO II (Pebble Creek 2007-1) Ltd. Co-issuer: Airlie LCDO II (Pebble Creek 2007-1) Corp. Underwriter: Lehman Bros. Special Financing Inc. Trustee: U.S. Bank National Association AIRTRAN HOLDINGS: Cut to 'CCC+'; S&P Expects Heavy Losses --------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on AirTran Holdings Inc., including the corporate credit rating, which it lowered to 'CCC+' from 'B-'. At the same time, S&P removed the ratings from CreditWatch, where they had been placed with negative implications on May 22, 2008. The outlook is stable. "The downgrade reflects expected heavy losses caused by high and volatile -- albeit recently somewhat reduced -- fuel prices," said Standard & Poor's credit analyst Betsy R. Snyder, "and the resulting pressure on the company's liquidity." AirTran currently has adequate near-term liquidity, with $433 million of unrestricted cash and short-term investments at June 30, 2008. "Expected continued heavy losses could total over $100 million in 2008, based on our current fuel price and revenue outlook," added Ms. Snyder, "with the potential for further, albeit reduced losses, in 2009." ALMERIA EQUITIES: Case Summary & Largest Unsecured Creditor ----------------------------------------------------------- Debtor: Almeria Equities LLC 1055 Corporate Center Dr., Ste. 500 Monterrey Park, CA 91754 Bankruptcy Case No.: 08-23587 Chapter 11 Petition Date: August 27, 2008 Court: Central District Of California (Los Angeles) Judge: Barry Russell Debtor's Counsel: Paul Harrigan, Esq. Law Office of Paul Harrigan 2785 S Bear Clay Way Meridian, ID 83642 Tel: (831) 401-2296 Estimated Assets: $1 million to $10 million 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/califcb08-23587.pdf ALPHA MEDIA: Moody's Withdraws B2 Rating on $22.3 Mil. Sr. Notes ---------------------------------------------------------------- Moody's Investors Service withdrawn the rating on this notes issued by Jade CBO, Limited: Class Description: The $22,300,000 Second Priority Senior Secured Fixed Rate Notes due 2011 -- Prior Rating: B2 -- Current Rating: WR According to Moody's, the rating action is as a result of the notes being redeemed in full. AMORES OIL: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Amores Oil Co. 3655 N.W. 58 St. Miami, FL 33142 Bankruptcy Case No.: 08-22132 Chapter 11 Petition Date: August 26, 2008 Court: Southern District of Florida (Miami) Judge: Robert A. Mark Debtor's Counsel: Jacqueline Calderin, Esq. Email: jc@ecccounsel.com Ehrenstein Charbonneau Calderin 800 Brickell Ave., Ste. 902 Miami, FL 33131 Tel: (305) 722-2002 Amores Oil Co's Financial Condition: Estimated Assets: $500,000 to $1,000,000 Estimated Debts: $1,000,000 to $10,000,000 A copy of Amores Oil Co's petition is available for free at: http://bankrupt.com/misc/flsb08-22132.pdf AMR CORP: Notifies Put Option for 4.25% Senior Convertible Notes ---------------------------------------------------------------- AMR Corporation is notifying holders of the $225,490,000 outstanding principal amount of its 4.25% Senior Convertible Notes due 2023 that they have an option, pursuant to the terms of the Notes, to require AMR to purchase, on Sept. 23, 2008, all or a portion of such holders' Notes at a price equal to $1,000 per $1,000 principal amount of the Notes, plus any accrued and unpaid interest to Sept. 23, 2008. As Sept. 23, 2008 is an interest payment date for the Notes, interest accrued up to the purchase date will be paid to record holders as of the regular record date immediately preceding this interest payment date, and therefore AMR expects that there will be no accrued and unpaid interest due as part of the purchase price. Under the terms of the Notes, AMR has the option to pay the purchase price for the Notes with cash, stock, or a combination of cash and stock, and has elected to pay for the Notes solely with cash. As required by rules of the Securities and Exchange Commission, AMR will file a Tender Offer Statement on Schedule TO. In addition, AMR's company notice to holders with respect to the Put Option specifying the terms, conditions and procedures for exercising the Put Option will be available through The Depository Trust Company and the paying agent, which is Wilmington Trust Company. None of AMR, its board of directors, or its employees has made or is making any representation or recommendation to any holder as to whether to exercise or refrain from exercising the Put Option. Noteholders' opportunity to exercise the Put Option commenced on Aug. 22, 2008, and will terminate at 5:00 p.m., New York City time, on Sept. 22, 2008. Holders may withdraw any previously delivered purchase notice pursuant to the terms of the Put Option at any time prior to 5:00 p.m., New York City time, on Sept. 22, 2008. About AMR Corporation Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, including Brazil, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. * * * As reported in the Troubled Company Reporter on August 5, 2008, the TCR said that Moody's Investors Service downgraded the Corporate Family and Probability of Default Ratings of AMR Corp. and its subsidiaries to Caa1 from B2, and lowered the ratings of its outstanding corporate debt instruments and certain equipment trust certificates and Enhanced Equipment Trust Certificates of American Airlines Inc. The company still carries Moody's Negative 10 ANDRE KANDY: Case Summary & 12 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Andre Kandy, DDS 6504 Bridgewater Way, Unit 802 Panama City Beach, FL 32407 Bankruptcy Case No.: 08-40572 Type of Business: The Debtor is a dentist. Chapter 11 Petition Date: August 26, 2008 Court: Northern District of Florida (Tallahassee) Debtor's Counsel: Thomas B. Woodward, Esq. (woodylaw@embarqmail.com) P.O. Box 10058 Tallahassee, FL 32302 Tel: (850) 222-4818 Fax: (850) 561-3456 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/flnb08-40572.pdf ASHTON WOODS: Violates Terms of Bank Credit Facility, $125MM Notes ------------------------------------------------------------------ William Rochelle of Bloomberg News reports that Ashton Woods USA LLC, violated covenants on its bank credit facility and senior subordinated notes, resulting in the issuance of a notice of default prohibiting payment of Oct. 1 interest on the $125 million in notes. Ashton Woods disclosed this month unaudited and preliminary financial results for its fiscal year ended May 31, 2008. It said it expects that its financial and operating results for fiscal 2008 will include: -- An estimated net loss of approximately $113.5 million, taking into account asset impairment charges of approximately $116.9 million, on revenues of $408.1 million in fiscal 2008, as compared to net income of $24.7 million, taking into account asset impairment charges of $18.8 million, and revenues of $581.0 million in fiscal 2007; -- Tangible net worth at May 31, 2008 will be approximately $58.7 million; -- Home closings of 1,393 in fiscal 2008, down 30.1% as compared to fiscal 2007; -- Net new home orders for fiscal 2008 of 1,043 as compared to 1,564 in fiscal 2007; and -- Loss on land sales of $25.1 million (included in the $116.9 million impairment charges) recognized in fiscal 2008 as a result of a previously reported sale of properties to an affiliate of the Company. Tom Krobot, President and Chief Executive Officer of ASHTON WOODS USA L.L.C., said, "Our preliminary financial results for the fiscal year ending May 31, 2008 reflect the difficult market conditions that exist in the homebuilding industry today, which have continued to deteriorate throughout fiscal 2008 and into fiscal 2009." As a result of the Company's financial performance during the fiscal year ended May 31, 2008, at the end of the fiscal year, the Company was not in compliance with the tangible net worth, leverage ratio and land inventory ratio covenants of its senior credit facility. On August 21, 2008, the lenders under the senior credit facility delivered a notice of default to the Company with respect to the covenant compliance issues. During the period of default, the notice prohibits the Company from making scheduled payments of interest on or otherwise repaying or purchasing its 9.5% Senior Subordinated Notes due 2015. The Company is currently in negotiations with the lenders to address its covenant defaults. Further, the Company is currently engaged in planning efforts to address the future requirements of its Subordinated Notes. These plans could include a range of alternatives, including seeking an amendment or waiver under the Subordinated Notes or finding another way to satisfy the Company's obligations. Mr. Krobot noted, "We are optimistic of reaching agreement with the lenders under our senior credit facility and finding an acceptable solution for the Subordinated Notes. However, terms for such agreement and solution acceptable to the Company may not be available and, therefore, there are no guarantees we will successfully achieve compliance with the senior credit facility or be able to address our future requirements under the Subordinated Notes. Notwithstanding the current difficult market conditions, the Company continues to meet its operational objectives." With headquarters in Atlanta, Georgia, Ashton Woods USA L.L.C. is a homebuilder with operations in Atlanta, Dallas, Houston, Orlando, Phoenix, Denver and Tampa. ARCAP 2005-RR5: S&P Cuts Class M to 'D' on Interest Shortfalls -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class M commercial mortgage-backed securities (CMBS) pass-through certificates from ARCap 2005-RR5 Resecuritization Inc. to 'D' from 'CCC-'. The downgrade is due to interest shortfalls to class M, which S&P expects to continue. To date, the trust has incurred losses totaling $92.7 million, causing principal losses to the subordinate classes O and N; S&P downgraded class N to 'D' on March 27, 2008. As of the Aug. 25, 2008, trustee report, class M experienced a $44,713 interest shortfall and had experienced cumulative interest shortfalls of $84,619 after two consecutive months. The interest shortfalls were caused by interest shortfalls on the underlying CMBS collateral, which S&P expects to continue. Standard & Poor's expects class M to eventually suffer a principal loss upon the ultimate resolution of the delinquent loans in the underlying CMBS transactions. ARIZANT: S&P Revises 'B+' Rating Outlook to Positive ---------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Eden Prairie, Minn.-based Arizant Inc. to positive from stable. Ratings on the company, including the 'B+' corporate credit rating, were affirmed. "The outlook revision reflects the substantial improvement in Arizant's financial profile since we initially rated the company in 2004," said Standard & Poor's credit analyst Michael Berrian. The 'B+' rating overwhelmingly reflects Arizant's narrow product offerings, relatively small size, dependence on group purchasing organizations (GPOs), and increasingly price-sensitive customer base. The company's leading position as a manufacturer of perioperative temperature management products, its substantial growth rates, and its conservative financial policy partially mitigate these concerns. Arizant is a small company in a niche market with a narrow operating focus. Two of the company's products, based on similar technology, account for the majority of revenues, resulting in a business risk profile that remains vulnerable to currently unforeseen new product development or changes in technology. The company is also heavily dependent on medium-term contracts with GPOs for the majority of its disposable products. This is a concern since the GPOs can exert pricing pressure on Arizant by contracting with its competitors for lower-priced products. S&P also believes that the company's hospital customers could become increasingly price sensitive and opt for seemingly lower-cost cotton blankets or gowns instead of Arizant's disposable blankets and gowns. The company's competitors are much larger companies with greater financial resources that primarily compete on price, which could ultimately pressure Arizant's margins. Still, over the past four years, Arizant's financial performance has consistently met or exceeded Standard & Poor's expectations. During that time, the company has generated organic revenue and EBITDA growth in excess of 10% each year, and good free operating cash flow, which enabled it to reduce leverage to less than 2x. Moreover, the company has increased EBITDA interest coverage and other credit metrics to levels that are strong for the current rating. ARIZONA DISCOUNT: Terminated GE Credit Line Cues Bankruptcy Filing ------------------------------------------------------------------ Arizona Discount Marine, LLC, filed for chapter 11 protection saying that GE Commercial Distribution Finance Corp., a General Electric Co. unit, allegedly cut its credit line in July 2008, the Arizona Daily Star says. Under the GE facility, the Debtor was allowed to access funds to buy new boats and other vehicles and cut its debt by trading-in the assets to the lender, Arizona Daily quotes court documents as stating. The Arizona Daily Debtor counsel Eric Slocum Sparks, Esq., said that absent the trade-ins, the Debtor suffered a "huge cash flow shortage." The Debtor's co-owner, Scott Buchanan, added that GE's move "almos" crippled him. The trade in, according to Mr. Buchanan is "a big part of [its] business." Based on court documents, the Debtor was behind payment of its debts, the Arizona Daily states. The report says that the Debtor has about $11 million in assets and $10.2 million in debts, including $9.5 million owed to boat financiers. Mr. Buchanan, according to the Arizona Daily, said that the Debtor is also borrowing funds from Chicago-based Textron Financial, which is doing business with the Debtor. The Arizona Discount Marine had sought the authority of the U.S. Bankruptcy Court for the District of Arizona to tap its lenders' cash collateral, the Arizona Daily relates. Amid GE's allegations that the Debtor sold boats and did not use the sale proceeds to pay its debts, the Court permitted the Debtor to use cash collateral. Arizona Discount Marine, LLC sells boats, filed its chapter 11 petition on Aug. 17, 2008 (Bankr. D. Ariz. Case No. 08-10635). ATLANTIS PLASTICS: Says Elkhart Plant Sale Possible --------------------------------------------------- Atlantis Plastics Inc. is mulling over the possibility of selling one of its three plant facilities in Elkhart, Indiana, Goshen News reports. The sale will put at risk the jobs of around 70 workers, says Goshen News. The Debtors fixed October 31 as the interim date of closing. "After reviewing all of our alternatives, the company's management and board of directors. . . unanimously determined that sales of our plastic films and molded plastic products businesses through the Chapter 11 process would provide the best result for our creditors, suppliers, employees and customers," Goshen News cites CEO Bud Philbrook in a company press release. As reported in the Troubled Company Reporter on Aug. 20, 2008, the Debtors agreed, as part of its reorganization, to sell substantially all of the assets of its debtor-affiliate, Atlantis Plastic Films, Inc., to AEP Industries, Inc., of The Netherlands. So far, according to Goshen News, no updates of the transaction have surfaced. About Atlantis Plastics Atlanta, Georgia-based Atlantis Plastics Inc. manufactures specialty polyethylene films and molded and extruded plastic components used in a variety of industrial and consumer applications. It filed its Chapter 11 petition on Aug. 10, 2008 (Bankr. N.D. Ga. Case Nos. 08-75473 through 08-75481) together with Atlantis Plastics, Inc., Atlantis Plastic Films, Inc., Atlantis Films, Inc., Atlantis Molded Plastics, Inc., Atlantis Plastics Injection Molding, Inc., Extrusion Masters, Inc., Linear Films, Inc., Pierce Plastics, Inc., and Rigal Plastics, Inc. David B. Kurzweil, Esq., at Greenberg Traurig, LLP, represents the Debtors in their restructuring efforts. They listed assets between of $100 million and $500 million and debts of between $100 million and $500 million. The Debtors owe The Bank of New York $75 million in unsecured loan and Equistar $1 million in unsecured trade debt. AVALON FORTRESS: Plagued by IRS Issues; Files for Bankruptcy ------------------------------------------------------------ Avalon Fortress Security Corp. filed for Chapter 11 protection with the U.S. Bankruptcy Court for the District of Minnesota, the St. Paul Business Journal reports. According to the Debtor's counsel, Avalon Fortress owes the IRS at least $3 million in taxes, which resulted from the Debtor's rapid expansion in the residential security market, says the Business Journal. The Debtor had eventual cash flow problems after a deal with the IRS fell through, the Journal relates. Based in Minneapolis, Minnesota, Avalon Fortress Security Corp. -- http://www.avalonsecurity.com/-- is a full-service protection agency that provides general security services, patrol inspection, executive protection, and security design and management. At the time of the bankruptcy filing, the Debtor had total cash assets of $658,000 and estimated liabilities of $10 million. BABSON CLO: S&P Places 'BB' Ratings on CreditWatch Negative ----------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on the class E notes and Spref shares issued by Babson CLO Ltd. 2003-I, an arbitrage high-yield collateralized loan obligation (CLO), on CreditWatch with negative implications. At the same time, S&P affirmed its ratings on the class A-1, A-2A, A-2B, B, C, and D notes. The CreditWatch placements primarily reflect negative rating migration within the transaction's underlying portfolio. Currently, approximately 72% of underlying loans have ratings that are in the 'B' range, up from 47% as of the earliest trustee report dated June 30, 2004. The weighted average spread earned by the transaction has also decreased to 2.5% from 2.95%, compared with a trigger of 2.45%. Standard & Poor's will review the results of current cash flow runs generated for Babson CLO Ltd 2003-I to determine the level of future defaults the rated classes can withstand under various stressed default timing and interest rate scenarios while still paying all of the interest and principal due on the notes. "We will compare the results of these cash flow runs with the projected default performance of the performing assets in the collateral pool to determine whether the ratings currently assigned to the notes remain consistent with the credit enhancement available," S&P says. RATINGS PLACED ON CREDITWATCH NEGATIVE Babson CLO Ltd 2003-I Rating Class To From Balance (mil. $) ----- -- ---- ---------------- E BB/Watch Neg BB 7.00 SPref shrs BB/Watch Neg BB 5.00 RATINGS AFFIRMED Babson CLO Ltd 2003-I Class Rating Balance (mil. $) ----- ------ ---------------- A-1 AAA 150.00 A-2A AAA 93.00 A-2B AAA 17.00 B AA 20.00 C A 18.50 D BBB 17.70 TRANSACTION INFORMATION Issuer: Babson CLO Ltd 2003-I Co-issuer: Babson (Delaware) CLO Corp. 2003-I Underwriter: Wachovia Securities Inc. Collateral manager: Babson Capital Management LLC Trustee: U.S. Bank N.A. BANC OF AMERICA: Fitch Affirms B Rating on $19.3MM Class K Certs. ----------------------------------------------------------------- Fitch Ratings affirms all classes of Banc of America Large Loans, Inc.'s commercial mortgage pass-through certificates, series 2004- BBA4 as: -- $6.8 million class F at 'AAA'; -- $15.1 million class G at 'AAA'; -- $9.4 million class H at 'AAA', -- $11.2 million class J at 'AA+' -- $19.3 million class K at 'B' and -- Interest-only classes, X-1B 'AAA', X-2 'AAA', X-3 'AAA', X-4 'AAA'. Classes A1, A2, X-1A, X-5, B, C, D, and E have paid in full. The classes are affirmed due to stable Fitch-expected credit enhancement levels since Fitch's last rating action. Although the transaction has been paid down 93.2% since issuance, the pool has become increasingly concentrated. As of the August 2008 distribution date the transaction balance has paid down to $61.7 million, from $912.3 million at issuance. Three of the original loans remain in the pool, including one retail loan, the Westgate Mall (50.24%); one office loan, Heritage Square I & II (28.5%) and the Arapaho Business Park (21.3%). The collateral is heavily concentrated in two states, Massachusetts (50.24%) and Texas (49.8%). All three loans have extended their maturity dates into 2009. Fitch has identified two loans (49.8%) as Fitch Loans of Concern, including the Heritage Square I & II loan (28.5%) and the Arapaho Business Park loan (21.3%): Both loans are performing at below investment grade standards. The net cash flow for Heritage Square I & II (28.5%) is below that at issuance because of increased expenses. In addition, based on information provided by the servicer, occupancy as of June 30, 2008, has declined to 86.1% compared to 91.0% at issuance. The Fitch stressed net cash flow at the Arapaho Business Park in Richardson Texas, has declined by 28.2% since issuance. In addition, occupancy at Arapaho Business Park has also declined to 84.8%, which has been consistently below that of 89.3% at issuance. Somewhat mitigating the decline in performance of the Arapaho Business Park loan is the presence of subordinate debt in the amount of $6.6 million. Fitch will continue to monitor the performance of these loans as the current analysis was based on the six months ended June 30, 2008. BANYAN CORP: June 30 Balance Sheet Upside-Down by $1,692,052 ------------------------------------------------------------ Banyan Corp.'s consolidated balance sheet at June 30, 2008, showed $3,759,657 in total assets and $5,451,709 in total liabilities, resulting in a $1,692,052 stockholders' deficit. At June 30, 2008, the company's consolidated balance sheet also showed strained liquidity with $1,299,860 in total current assets available to pay $3,886,436 in total current liabilities. The company reported a net loss of $849,101 on revenues of $696,364 for the second quarter ended June 30, 2008, compared with a net loss of $1,676,536 on revenues of $1,357,712 in the corresponding period last year. Revenue from the diagnostic testing business decreased by $640,932, or 53.3%, compared to 2007. Revenue from franchised operations decreased $20,417, or 13.1%, compared to 2007. Loss from operations decreased 82% to $56,784 from $315,648, due to a significant decrease in selling, general and administrative expenses. This was caused by a force reduction in the company's diagnostic testing business and corresponding reductions in salaries, employee benefits, expense reimbursement, travel and entertainment, and all the costs associated with the company's diagnostic testing system business. The decrease in net loss primarily reflects decreases in loss from operations and other expenses. The decrease in other expenses included a $473,712 decrease in management compensation expense. 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?3167 Going Concern Doubt Schwartz Levitsky Feldman LLP, in Toronto, Ontario, expressed substantial doubt about Banyan Corp.'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, working capital deficiency and net stockholders' deficit. To date operations have not been self-sustaining. Should the company be unable to implement its plan of operation, expansion plans may be curtailed, and the company may not be able to continue in operation. Should it be unable to continue in operation, the company said that it will be forced to sell its businesses, seek a reverse merger or file for protection under the federal bankruptcy laws. About Banyan Corp. Headquartered in Beverly Hills, California, Banyan Corporation (OTC BB: BANY.OB) operates in two segments of the health care industry: diagnostic imaging and franchising Chiropractic USA chiropractic clinics. All clinics are operated by independent entrepreneurs under the terms of franchise arrangements. BAUGHER CHEVROLET-BUICK: To Sell Biz to Rival Obaugh Auto Group --------------------------------------------------------------- Baugher Chevrolet-Buick plans to sell itself to a competitor, Obaugh Auto Group, to raise funds to repay more than $3 million in debts. According to court documents, the Debtor says that, among other things, reluctant buyers and the weak economy helped to drive it into bankruptcy. Waynesboro, Virginia-based Baugher Chevrolet-Buick -- http://www.baugherautos.com/-- is a dealer for new and used cars, trucks and SUVs. The Debtor also provides auto financing, services, and parts. The Debtor filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court in Virginia (Case No.: 08-50862). A. Carter Magee, Jr., Esq., at Magee Foster Goldstein & Sayers, in Roanoke, Virginia, represents the Debtor. When it filed for bankruptcy, the Debtor listed $2,931,782 in total assets and $4,432,601 in total debts. BEAR STEARNS: Moody's Junks Two Class Certificates -------------------------------------------------- Moody's Investors Service downgraded the ratings of 9 tranches from the Bear Stearns ARM Trust 2005-12 transaction. The collateral backing these transactions consists primarily of first- lien, adjustable-rate, Alt-A mortgage loans. Complete rating actions are Issuer: Bear Stearns ARM Trust 2005-12 -- Cl. II-4-A-1, Downgraded to Aa2 from Aaa -- Cl. II-5-A-1, Downgraded to Aa2 from Aaa -- Cl. II-1-A-1, Downgraded to Aa3 from Aaa -- Cl. II-2-A-2, Downgraded to Aa3 from Aa1 -- Cl. II-3-A-2, Downgraded to Aa3 from Aa1 -- Cl. I-B-1, Downgraded to A2 from Aa3 -- Cl. I-B-2, Downgraded to Ba2 from Baa1 -- Cl. I-B-3, Downgraded to Caa3 from Ba3 -- Cl. II-B-3, Downgraded to Caa2 from B3 Ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions are a result of Moody's on-going review process. BLOCKBUSTER INC: S&P Affirms 'B-' Corporate Credit Rating, Stable ----------------------------------------------------------------- Standard & Poor's Rating Services revised its outlook on Dallas- based Blockbuster Inc. to stable from negative. At the same time, S&P affirmed all other ratings, including the 'B-' corporate credit rating on the company. "The outlook change reflects the meaningfully improved performance and enhanced credit protection profile driven primarily by significant cost reductions," said Standard & Poor's credit analyst David Kuntz. BLUE WATER: Court Approves $6 Million Sale of Plant and Equipment ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan has authorized Blue Water Automotive Systems Inc. and its debtor- affiliates to sell a plant and equipment for $6 million to CIT Group Inc. and Engineered Plastic Components Inc. Detroit Free Press says that CIT, an investment firm and Blue Water's biggest creditor, agreed to buy the plant in St. Clair in exchange for $3 million in debt, while Engineered Plastic bought machinery and equipment for $3 million in cash. The sales were approved Tuesday by U.S. Bankruptcy Judge Marci McIvor, Detroit Free Press adds. As reported in the Troubled Company Reporter on Aug. 13, 2008, Blue Water delivered to the Court an amended joint plan of liquidation to contemplate a wind-down of the Debtors' assets. Various reports state that General Motors Corp., a creditor, wanted the case converted to a Chapter 7 bankruptcy to allow a government-appointed trustee to take over management. Bloomberg reports that GM told the Court that the reorganization of the Debtors is a failure. About CIT Group Headquartered in New York City, CIT Group Inc. (NYSE: CIT) -- http://www.cit.com/-- is a commercial finance company that provides financial products and advisory services to more than one million customers in over 50 countries across 30 industries. About Engineered Plastic Components Inc. Engineered Plastic Components Inc. is a privately held company based in Grinnell, Iowa. About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operations in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Judy O'Neill, Esq., and Frank DiCastri, Esq., at Foley & Lardner, LLP, serve as the Debtors' bankruptcy counsel. Administar Services Group LLC acts as the Debtors' claims, noticing, and balloting agent. Blue Water's bankruptcy petition lists assets and liabilities each in the range of US$100 million to US$500 million. The Debtors filed their Liquidation Plan on May 9, 2008. The Plan contemplates a sale of substantially all of the Debtors' assets and equity interests, except for a piece of real property located at Yankee Road, in St. Clair, Michigan. The Plan has been confirmed by the Court. BOSCOV'S INC: Proposes $1.45MM Bonus Payments to Top Executives --------------------------------------------------------------- Boscov's Inc. and its affiliated debtors seek permission from the the U.S. Bankruptcy Court for the District of Delaware to pay its top six executives success payments totaling $1.45 million if the company gets out of bankruptcy or is sold by early 2009. The Debtors, according to Bloomberg, propose that an executive vice president could earn a bonus equal to his annual salary if a Chapter 11 plan is approved by the end of February or a sale of assets as a going concern is completed by early January. Both must be approved by the creditors' committee for the bonus to kick in, Bloomberg indicates. He would receive a 50% bonus if the assets are liquidated by January, Bloomberg adds. The other top officers could receive from 20% to 50% of annual salary, Bloomberg relates. For them to qualify, there must be a plan or a going-concern sale before the same deadlines, Bloomberg notes. Lancaster Online.com, citing court documents, states that the payments will compensate the senior executives for their efforts on the bankruptcy case, a possible sale and operating the business. The payment will also ensure that business will be maintained pending these transaction, Lancaster Online.com adds. The Court, according to various reports, will consider the Debtors' request on Sept. 5, 2008, at 10 a.m. Lancaster Online.com adds that a committee representing its unsecured creditors supports the proposal. 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). Judge Kevin Gross presides over the cases. David G. Heiman, Esq., and Thomas A. Wilson, Esq., at Jones Day, serve as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq. at Richards, Layton & Finger, P.A., serve as the Debtors' local Delaware counsel. The Debtors' financial advisor is Capstone Advisory Group and their investment banker is Lehman Brothers Inc. The Debtors' claims agent is Kurtzman Carson Consultants, L.L.C. Boscov's listed assets of $538 million and liabilities of $479 million in its bankruptcy filing. BSCM TRUST: Fitch Affirms B- Rating on $8.3 Million Class Q Loans ----------------------------------------------------------------- Fitch Ratings affirms Bear Stearns Commercial Mortgage Securities Trust 2007-PWR16 as: -- $74.2 million class A-1 at 'AAA'; -- $681 million class A-2 at 'AAA'; -- $58.2 million class A-3 at 'AAA'; -- $130.7 million class A-AB at 'AAA'; -- $954.4 million class A-4 at 'AAA'; -- $411 million class A-1A at 'AAA'; -- $331.4 million class A-M at 'AAA'; -- $273.4 million class A-J at 'AAA'; -- Interest-only class X at 'AAA'; -- $33.1 million class B at 'AA+'; -- $33.1 million class C at 'AA'; -- $33.1 million class D at 'AA-'; -- $20.7 million class E at 'A+; -- $24.9 million class F at 'A'; -- $29 million class G at 'A-'. -- $41.4 million class H at 'BBB+'. -- $33.1 million class J at 'BBB'. -- $33.1 million class K at 'BBB-'. -- $16.6 million class L at 'BB+'; -- $12.4 million class M at 'BB'; -- $12.4 million class N at 'BB-'; -- $8.3 million class O at 'B+'; -- $8.3 million class P at 'B'; -- $8.3 million class Q at 'B-'. Fitch does not rate the $41.4 million class S. The affirmations are due to stable pool performance and minimal principal paydown since issuance. As of the August 2008 distribution date, the pool's aggregate certificate balance has been reduced 0.3% to $3.304 billion from $3.314 billion at issuance. Currently there are no delinquent or specially serviced loans. Fitch has reviewed the performance of the two shadow rated loans, Clear Creek Plaza (0.2%) and Residential Inn San Antonio (0.2%). Both loans maintain investment grade shadow ratings due to stable performance. Clear Creek Plaza is a five-year amortizing balloon loan secured by four single-story anchored retail buildings totaling 56,494 square feet (SF) in Carson City, Nevada. Servicer-reported year- end 2007 debt service coverage ratio was 2.11 times, compared to 1.97x at issuance. Occupancy has remained stable at 97.6% since issuance. Residential Inn San Antonio is a five-year interest-only loan secured by a 120-room limited service hotel in San Antonio, Texas. Servicer-reported YE 2007 DSCR was 4.16x, compared to 4.38x at issuance. Occupancy as of first-quarter 2008 was 77% with revenue per available room at $60.77, compared to occupancy of 90% with RevPar at $78.32 at issuance. The decline in occupancy and revenue was due to seasonal fluctuation. Fitch has identified 10 loans (2.3%) as Fitch loans of concern due to declining DSCR and/or occupancy. The largest Fitch loan of concern (0.9%) is secured by a 634-unit garden-style apartment complex located in New Castle, Delaware. Servicer-reported YE 2007 DSCR was 0.92x with an occupancy rate of 76.8%, compared to DSCR of 1.17x with an occupancy rate of 85.3% at issuance. The property has been under substantial renovation since May 2007, which was anticipated at issuance. Most of the construction work has been completed and the property occupancy has improved to the same level at issuance. The second largest Fitch loan of concern (0.3%) is secured by a 135,401 SF retail property in Lakewood, CO. Servicer-reported YE 2007 DSCR was 0.98x with occupancy at 78%, compared to DSCR of 1.35x and occupancy of 79% at issuance. Fitch will continue to monitor this loan. Loan maturities are concentrated in the year 2012 and 2017, when 23% and 72.9% of the pool, respectively, are scheduled to mature. CAPTAIN'S COVE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Captain's Cove Group, LLC 6014 South Point Rd. Berlin, MD 21811 Bankruptcy Case No.: 08-20901 Chapter 11 Petition Date: August 26, 2008 Court: District of Maryland (Baltimore) Judge: Duncan W. Keir Debtor's Counsel: J. Daniel Vorsteg, Esq. Email: jvorsteg@wtplaw.com Whiteford Taylor & Preston 7 St. Paul St. Baltimore, MD 21202 http://www.wtplaw.com/ Estimated Assets: $10,000,000 to $50,000,000 Estimated Debts: $10,000,000 to $50,000,000 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bunting Construction Corp., trade debt $206,466 Inc. 32996 Lighthouse Rd. Selbyville, DE 19970 Atlantic Group & Associates, trade debt $17,693 Inc. 10044 Old Ocean City Blvd. Berlin, MD 21811 Superior Outdoor Signs, Inc. trade debt $7,900 12044 South Piney Point Rd. Bishopville, MD 21813 Comcast Spotylignt trade debt $7,123 Captain's Cove Golf & Yacht trade debt $2,506 Club BIC, Inc. trade debt $2,000 Lynch Printing, LLC trade debt $1,693 Chesapeake Outdoor trade debt $949 Sharp Energy trade debt $887 Nancy Matthews trade debt $682 D3 Corp. trade debt $600 Gowen & Associates trade debt $400 Pender & Coward trade debt $195 CAREFREE 65: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Carefree 65, L.L.C. W238 N1660 Busse Road, Suite 110 Waukesha, WI 53188 Bankruptcy Case No.: 08-11303 Chapter 11 Petition Date: August 27, 2008 Court: District of Arizona (Phoenix) Judge: Charles G. Case II Debtor's Counsel: Mark Wesbrooks, Esq. The Wesbrooks Law Firm, LLC 15396 N. 83rd Avenue, Suite C-100 Peoria, AZ 85381 Tel: (602) 262-0390 Fax: (602) 262-4353 Email: mark.wesbrooks@azbar.org Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The Debtor did not file a list of its 20 Largest Unsecured Creditors. CE GEN: S&P Affirms 'BB+' on Strength of Contracted Cash Flow ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB+' rating on CE Generation LLC's (CE Gen) $400 million senior secured notes due 2018, and assigned a recovery rating of '1'. The outlook is stable. The recovery rating of '1' indicates the expectation of very high (90% to 100%) recovery of principal in the event of a default. "The rating on CE Gen reflects the strength of the contracted cash flows from its subsidiary Salton Sea Funding Corp., which is expected to account for nearly all of CE Gen's contracted cash flows after 2009," said Standard & Poor's credit analyst Terrence Marshall. "Of the $400 million originally issued, CE Gen had about $271.8 million in debt outstanding as of March 31, 2008." CE Generation LLC, which is owned 50% by MidAmerican Energy Holdings Co. (MEHC) and 50% by TransAlta Corp., is the holding company for MEHC's interests in its U.S. qualifying facilities (QF). The total capacity of CE Gen's 13-project portfolio is 829 megawatts (MW), with CE Gen's net ownership at 769 MW. Although the cash flows come from a number of projects, the portfolio's effect is limited in that 10 of the 13 projects are part of SSFC's (BBB-/Stable) geothermal portfolio, with the remainder being gas-fired combined-cycle units. Together with Saranac, the combined-cycle QF located in New York state, SSFC is expected to provide most of the cash flow through 2009. After 2009, when the Saranac QF contract expires, SSFC will provide virtually all of CE Gen's contractual cash flow, while all three combined cycle units will have merchant exposure. CENTRO NP: Posts $299.5 Million Net Loss in 2008 Second Quarter --------------------------------------------------------------- Centro NP LLC reported a net loss of $299.5 million for the second quarter ended June 30, 2008, a net loss of $34.7 million for the period from April 1, 2007, through April 4,2007, and net income of $3.7 million for the period April 5, 2007, through June 30, 2007. Rental income was $76.9 million for the three months ended June 30, 2008, $4.5 million for the period from April 1, 2007, through April 4, 2007, and $94.2 million for the period April 5, 2007 through June 30, 2007. These significant factors caused material changes in the rental income of the company: -- 2007 Acquisitions, which increased rental income by approximately $5.6 million -- Increased amortization of below market leases, which leases were recorded at fair value upon completion of the purchase accounting analyses by the company in connection with the Merger, which increased rental income by approximately $3.8 million -- Net increases in rental rates and straight-line rent adjustments, which increased rental income by approximately $2.1 million -- The Residual Joint Venture Transactions, which decreased rental income by approximately $33.0 million Expense reimbursements were $20.5 million for the three months ended June 30, 2008, $2.4 million for the period from April 1, 2007, through April 4, 2007, and $23.7 million for the period from April 5, 2007, through June 30, 2007. Fee income was $8.4 million for the three months ended June 30, 2008, $196,000 for the period from April 1, 2007, through April 4, 2007, and $6.8 million for the period from April 5, 2007, through June 30, 2007. The company reported a loss before real estate sales, minority interest and other income and expenses, of $248.0 million for the three months ended June 30, 2008, a loss of $32.7 million for the for the period from April 1, 2007, through April 4, 2007, and income of $29.8 million for the period from April 5, 2007, through June 30, 2007. During three months ended June 30, 2008, the company recorded impairment charges of $95.1 million and $18.1 million over its real estate assets and real estate held for sale assets, respectively. These impairment charges are the result of changes in the hold period probability weighting applied by management in relation to the company's real estate assets and real estate assets held for sale, in accordance with SFAS No. 144. An impairment charge of $173.5 million of goodwill and other intangibles was also recorded by the company during the three months ended June 30, 2008. This impairment charge was required due to the significant reduction in the company and affiliates' capital streams derived from certain property and funds management services. During the three months ended June 30, 2008, the company recorded an impairment charge of $6.2 million in relation to its investment in Centro GA America LLC. This charge is the result of an other than temporary loss in value of the company's investment. The company has identified that the cause for the other than temporary loss is the decrease in the fair value of the underlying real estate investments of Centro GA America LLC, due to the intended sale of these assets during the next six to twelve months. Short-Term Liquidity Needs In addition to short-term indebtedness, the company's short-term liquidity requirements consist primarily of funds necessary to pay for management fees, operating and other expenses directly associated with its portfolio of properties, interest expense and scheduled principal payments on its outstanding debt, capital expenditures incurred to facilitate the leasing of space (e.g., tenant improvements and leasing commissions), and capital expenditures incurred in the company's development and redevelopment projects. The company presently has $306.8 million of debt under its Amended July 2007 Revolving Facility scheduled to mature on the earlier to occur of (i) Sept. 30, 2008, and (ii) the date on which any trigger event under its Amended July 2007 Revolving Facility occurs. The company also has aggregate of $8.6 million of mortgage debt scheduled to mature during 2008. Although the company has historically met its short-term liquidity requirements with cash generated from operations and borrowings under credit facilities, the company is presently unable to make draws on its Amended July 2007 Revolving Facility. Due to covenants contained in certain of its debt agreements, the company is prohibited from incurring additional indebtedness and are limited to distributions received from the Residual Joint Venture that are funded with borrowings from an $80.0 million revolving credit facility of BPR Shopping Center, LLC, an unconsolidated subsidiary of the company. The company is currently working with the lenders under its Amended July 2007 Revolving Facility to refinance its short-term indebtedness and are considering additional plans with respect to meeting its short-term liquidity requirements. Additionally, the limited partners of Excel Excel Realty Partners, L.P., a consolidated entity, have a redemption right for their Class A Preferred Units exercisable as of April 20, 2008. The aggregate redemption amount payable to all limited partners as of April 1, 2008, was approximately $83.9 million. The DownREIT Partnership was required to pay the redemption amount on June 27, 2008, to any redeeming limited partners which it received a notice of redemption from on or prior to June 13, 2008. Limited partners were not entitled to provide notice of redemption prior to April 20, 2008. Prior to June 27, 2008, twelve limited partners, who held a total of approximately 1.35 million units, exercised their redemption right, the aggregate redemption amount payable in relation to such redemption would have been approximately $44.9 million. On June 26, 2008, the DownREIT Partnership entered into agreements with such twelve limited partners which provided for, among other things, the DownREIT Partnership to pay the redemption amount for 15% of each limited partner's outstanding Class A Preferred Units and an extension payment of 1% of the remaining Class A Preferred Units on June 27, 2008. The aggregate redemption amount paid on June 27, 2008, to the 12 redeeming limited partners was approximately $6.7 million and the extension payment was approximately $380,000. In addition, the agreements provide that the DownREIT Partnership is required to redeem the remaining 85% of the twelve limited partners' Class A Preferred Units by a date no later than Sept. 15, 2008, with any net proceeds of the company from a sale, mortgage or any other transfer of assets of the company or its subsidiaries to be used promptly to redeem all or a portion of the remaining Class A Preferred Units. The DownREIT Partnership's redemption obligation is also secured by certain of its properties. Balance Sheet At June 30, 2008, the company's consolidated balance sheet showed $4.51 billion in total assets, $2.20 billion in total liabilities, $42.0 million in minority interest in consolidated partnership and joint ventures, and $2.27 billion in total member's capital. 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?316a Going Concern Doubt There is substantial doubt about the company's ability to continue as a going concern given that the company's liquidity is subject to, among other things, its ability to negotiate extensions of credit facilities. The company's inability to refinance the credit facilities would have a material adverse effect on the company's liquidity and financial condition. In addition, uncertainty also exists due to the refinancing issues currently experienced by the company's ultimate parent investors, Centro Properties Group and Centro Retail Group. If the outcomes of these refinancing negotiations are not favorable to Centro Properties Group and Centro Retail Group, it is uncertain as to the impact that this will have on the company. About Centro NP LLC Headquartered in New York, Centro NP LLC (formerly Super IntermediateCo LLC) was formed in February 2007 to succeed the operations of New Plan Excel Realty Trust Inc. The principal business of the company is the ownership and management of community and neighborhood shopping centers throughout the United States. A substantial portion of its revenue is derived from tenants under existing leases at its properties. Prior to the consummation of the merger, New Plan Excel Realty Trust was operated as a self-administered, self-managed real estate investment trust. CG JCF: S&P Cuts Bank Loan, Counterparty Credit Ratings to 'B' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its counterparty credit rating and bank loan ratings on C.G. JCF Corp., the intermediate holding company of the Crump Group Inc., to 'B' from 'B+.' The outlook was revised to negative from stable. "The rating downgrade reflects Crump's weaker credit profile, weaker liquidity and deteriorating financial performance driven primarily by challenging market conditions in property/casualty operations," said Standard & Poor's credit analyst Tracy Dolin. Crump also is starting to experience top-line pressure in its Life operation affected by slowing sales trends on an industry-wide basis. These factors have all contributed to peer lagging organic revenue growth rates and margin compression. "Overall, Crump has not met Standard & Poor's original expectations upon rating assignment. In particular, Crump produced a 1.4x EBITDA fixed charge coverage for the first half of 2008, weaker than our 2.5x expectation," S&P says. "In addition, Crump's coverage metrics are starting to mirror those of lower rated peers, based upon results for the first half of 2008 and our year-end projections. We also believe the company will produce lower levels of cash flow and be challenged to meet its restrictive covenants in the near to intermediate term on a status quo basis. Partly offsetting these weaknesses, we believe the organization has adequate risk controls in place and a strong partnership with its private equity sponsor, J.C. Flowers, as evidenced by recent extensions of capital support. Thus, we believe the company will not actually breach its restrictive covenants. In addition, Crump remains less leveraged than its interactively rated peers and has surpassed our expectations of prepaying debt ahead of schedule. "The outlook is negative. We expect the company to produce pretax EBITDA coverage of about 1.8x, with total debt-to-EBITDA of 5.5x (not including cure amounts) and EBITDA margins of 18% prospectively in 2008. We believe the company will produce lower levels of cash flow in 2008 than 2007 and will be challenged to meet its restrictive covenants in the near-to-intermediate term without ongoing support from its private equity sponsor. "If the company's interest-coverage and debt-leverage metrics continue to fall short of our expectations, the rating might be lowered over the next 12 months. Because of the soft property/casualty market pricing cycle, and the potential impact of weakening economic conditions on Crump's other life insurance and retirement services businesses, we may witness margin compression, top line pressures and/or unsuccessful execution of expense savings targets precipitating unsatisfactory coverage metrics. We will consider revising the outlook to stable if the company is able to significantly increase EBITDA production and improve compliance with existing restrictive bank loan covenants through its standalone operating fundamentals." CHARMING SHOPPES: S&P Says Ratings Unaffected By Catalog Sale ------------------------------------------------------------- Standard & Poor's Ratings Services said its ratings on Bensalem, Pa.-based Charming Shoppes Inc. (B/Negative/--) are unchanged following the company's announcement that it has entered into an agreement to sell its noncore misses apparel catalogs (Crosstown Traders) to Orchard Brands for $35 million. Charming Shoppes also announced that it has entered into an agreement for the sale of the misses apparel catalog credit card receivables for about $40 million to Alliance Data Systems Corp. Management expects the two sales to net approximately $43 million combined. Use of proceeds has not been publicly disclosed. CIFG GUARANTY: S&P Cuts Ratings on 8 Insured MTN Issues to 'B' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on eight CIFG Assurance North America Inc. (CIFG) insurance-supported medium-term note issues and revised the CreditWatch implications on the ratings to developing from negative. These rating actions follow Standard & Poor's Aug. 22, 2008, lowering of S&P's rating on CIFG to 'B' from 'A-'. The ratings on the affected note issues are based solely on the full financial guarantee insurance policies provided by CIFG, which guarantee the timely payment of interest and principal according to the transactions' terms. Under S&P's criteria, the issue rating on an insured bond reflects the higher of the rating on the bond insurer (monoline) and Standard & Poor's underlying rating (SPUR) on the securities. Since these transactions do not have SPURs, however, S&P has lowered the ratings based solely on the support from CIFG. RATINGS LOWERED AND ON CREDITWATCH DEVELOPING Rating Issuer Series To From ------ ------ -- ---- Republic Holdings Texas II L.P. 2008-A B/Watch Dev A-/Watch Neg 2008-B B/Watch Dev A-/Watch Neg 2008-C B/Watch Dev A-/Watch Neg Whitecap New York Growth Fund LLC 2004 B/Watch Dev A-/Watch Neg Whitecap New York Growth Fund II LLC 2005 B/Watch Dev A-/Watch Neg Whitecap Texas Opportunity Fund L.P. 2005 B/Watch Dev A-/Watch Neg Whitecap Texas Opportunity Fund II L.P. 2008A B/Watch Dev A-/Watch Neg 2008B B/Watch Dev A-/Watch Neg CIFG GUARANTY: S&P Cuts Ratings on 5 Classes to 'B' --------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on five classes from five U.S. residential mortgage-backed securities (RMBS) transactions following the downgrade of bond-insurer CIFG Guaranty (CIFG). "We also removed the ratings on the downgraded classes from CreditWatch with negative implications. In addition, the ratings on seven classes (two 'AAA' ratings and five 'A-' ratings) remain on CreditWatch negative pending further review. Lastly, we affirmed our ratings on seven classes from five transactions. A total of 19 classes from 14 RMBS transactions were affected by the CIFG downgrade," S&P says. On Aug. 22, 2008, Standard & Poor's lowered its financial strength rating on CIFG to 'B' from 'A-'. The rating remains on CreditWatch, but the implications were changed at the time of the downgrade to developing from negative. RATINGS LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE American Home Mortgage Investment Trust 2006-2 Series 2006-2 Rating Class CUSIP To From ----- ----- -- ---- V-A 02660YAA0 B A-/Watch Neg Greenpoint Mortgage Funding Trust 2006-HE1 Series 2006-HE1 Rating Class CUSIP To From ----- ----- -- ---- Ac 39539BAB9 B A-/Watch Neg GSAA Home Equity Trust 2007-S1 Series 2007-S1 Rating Class CUSIP To From ----- ----- -- ---- A-1 362246AA8 B A-/Watch Neg SACO I Trust 2006-12 Series 2006-12 Rating Class CUSIP To From ----- ----- -- ---- II-A 78577NAG3 B A-/Watch Neg Terwin Mortgage Trust 2007-3SL Series 2007-3SL Rating Class CUSIP To From ----- ----- -- ---- A-1 88157TAA0 B A-/Watch Neg RATINGS REMAINING ON CREDITWATCH NEGATIVE ACE Securities Corp. Home Equity Loan Trust, Series 2006-HE1 Series 2006-HE1 Class CUSIP Rating ----- ----- ------ A-1B2 004421WL3 AAA/Watch Neg Banc of America Funding 2006-R1 Trust Series 2006-R1 Class CUSIP Rating ----- ----- ------ A-1 05950CAA0 A-/Watch Neg A-2 05950CAB8 A-/Watch Neg A-3 05950CAC6 A-/Watch Neg Banc of America Funding Corp. 2006-R2 Trust Series 2006-R2 Class CUSIP Rating ----- ----- ------ A-2 05950SAB3 A-/Watch Neg A-1 05950SAA5 A-/Watch Neg Merrill Lynch Mortgage Investors Trust, Series 2006-WMC1 Series 2006-WMC1 Class CUSIP Rating ----- ----- ------ A-1B 59020U4M4 AAA/Watch Neg RATINGS AFFIRMED Asset Backed Securities Corporation Home Equity Loan Trust Series OOMC 2005-HE6 Series 2005-HE6 Class CUSIP Rating ----- ----- ------ A2D 04541GTJ1 AAA Bear Stearns Asset Backed Securities I Trust 2005-HE9 Series 2005-HE9 Class CUSIP Rating ----- ----- ------ II-A-2 073879R34 AAA Lehman XS Trust Series 2005-8 Class CUSIP Rating ----- ----- ------ 1-A4 525221DU8 AAA 2-A3 525221ED5 AAA Lehman XS Trust Series 2005-10 Series 2005-10 Class CUSIP Rating ----- ----- ------ 1-A5 525221FR3 AAA Structured Asset Investment Loan Trust 2005-5 Series 2005-5 Class CUSIP Rating ----- ----- ------ A8 86358ETD8 AAA A9 86358ETE6 AAA CLUBHOUSE AT FAIRWAY: Case Summary & 10 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: The Clubhouse at Fairway Pines, LLC 22045 South Highway 550 Montrose, CO 81403 Bankruptcy Case No.: 08-23047 Chapter 11 Petition Date: August 27, 2008 Court: District of Colorado (Denver) Judge: Elizabeth E. Brown Debtor's Counsel: Lee M. Kutner (lmk@kutnerlaw.com) 303 E. 17th Avenue, Suite 500 Denver, CO 80203 Tel: (303) 832-2400 Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 A copy of the Debtor's petition is available for free at: http://bankrupt.com/misc/cob08-23047.pdf COMMODORE CDO: Fitch Cuts Ratings on 5 Note Classes --------------------------------------------------- Fitch downgrades and removes from Rating Watch Negative five classes of notes issued by Commodore CDO II, Ltd./Corp. These rating actions are effective immediately: -- $95,385,236 class A-1MM notes to 'BBB/F2' from 'A-/F1+'; -- $24,336,366 class A-2(a) notes to 'BB' from 'BBB-'; -- $772,583 class A-2(b) notes to 'BB' from 'BBB-'; -- $48,600,000 class B notes to 'CC' from 'CCC'; -- $8,921,225 class C notes to 'C' from 'CCC'. Fitch's rating actions reflect the significant collateral deterioration within the portfolio, specifically from subprime residential mortgage-backed securities. Commodore II is a cash flow structured finance (SF) collateralized debt obligation (CDO) that closed on Dec. 12, 2003, and is managed by Fischer Francis Trees & Watts Inc. Currently, 29.7% of the portfolio is comprised of 2005, 2006 and 2007 vintage U.S. subprime RMBS. The portfolio also contains 28.2% asset-backed securities, 20.0% subprime RMBS collateral from pre-2005 vintages, 14.7% CDOs, and 7.4% of various other structured finance assets. Since Fitch's last rating action on November 21, 2007, approximately 44.6% of the portfolio has been downgraded, with 5.0% of the portfolio currently on Rating Watch Negative. Additionally, 44.3% of the portfolio is now rated below investment grade, including 32.8% of the portfolio rated 'CCC+' or below. The negative credit migration experienced since the last review has resulted in the weighted average rating of the portfolio deteriorating to 'BB-/B+' from 'BBB-/BB+', breaching its minimum required average rating of between 'BBB/BBB-', as of the trustee report dated July 7, 2008. The collateral deterioration has caused the class B and class C overcollateralization tests to fall below 100% and fail their respective triggers. As of the July 7, 2008, trustee report the class B OC ratio was 82.3% and the class C OC ratio was 78.2%. The coverage test failures are causing interest proceeds to be diverted from the class C notes in order to redeem the class A-1MM notes. Additionally, all principal proceeds are currently being used to redeem the principal balance of the class A-1MM notes. The structural features of the transaction make it unlikely that the classes A-2a and A-2b notes will receive any additional principal proceeds unless and until the class A-1MM notes are paid-in-full. The class B notes continue to receive full interest payments, but are unlikely to receive their complete principal balances by maturity. The class C notes are not receiving any payments and are unlikely to receive significant, if any, future proceeds. The ratings on the classes A-1MM, A-2(a), A-2(b), and B notes address the timely receipt of scheduled interest payments and the ultimate receipt of principal as per the transaction's governing documents. The rating on the class C notes addresses the ultimate receipt of interest payments and ultimate receipt of principal as per the transaction's governing documents. In addition, the short-term rating on the class A-1MM notes is based on the availability of support provided to these notes by the put agreement provided by AIG Financial Products Corp., whose payment obligations are absolutely and unconditionally guaranteed by American International Group Inc. (rated 'AA-' Outlook Negative/'F1+' by Fitch). The availability of this put agreement is contingent upon, among other conditions, the continued fulfillment of interest payments and the ultimate payment of principal to the class A-1MM notes. The 'F2' rating indicates a satisfactory capacity for timely payment of these financial commitments. Fitch is reviewing its SF CDO approach and will comment separately on any changes and potential rating impact at a later date. Fitch will continue to monitor and review this transaction for future rating adjustments. CONTINENTAL ALLOYS: S&P Puts 'B' Credit Rating on Watch Negative ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including its 'B' corporate credit rating, on Houston, Texas-based Continental Alloys & Services Inc. on CreditWatch with negative implications. "The rating action follows the company's weaker-than-expected second-quarter results and our concern that Continental will not be able to meet its fixed charge coverage covenant in the third quarter," said Standard & Poor's credit analyst Sherwin Brandford. Continental's EBITDA dropped to $11.6 million in the second quarter, 15% lower than first-quarter results. The decline reflected weaker U.S. sales due mainly to a decrease in drilling activity in the Gulf of Mexico. "Although the company has adequate room under its leverage and interest coverage covenants with the lower earnings, its fixed charge ratio was 1.66x at June 30, 2008, providing little room versus the 1.5x covenant level. In calculating the fixed charge coverage ratio, capital expenditures are subtracted from EBITDA, causing the current ratio to be negatively impacted by the increase in capital spending related to the Asian expansion. We are concerned that third quarter results may not be strong enough to prevent the company from breaching this covenant," S&P says. "In resolving our CreditWatch, we will closely monitor the company's performance and its ability to maintain compliance with its financial covenants," S&P says. COTT CORP: Cut by S&P to 'B-' on Drop in 2008 Profit Expectations ----------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its ratings, including the long-term corporate credit rating to 'B-' from 'B', on Mississauga, Ont.-based beverage manufacturer Cott Corp. The ratings remain on CreditWatch with negative implications, where they were placed Feb. 26. "The downgrade follows Cott's announcement of substantially weaker adjusted operating profit now expected for 2008, compared with the company's previous guidance," said Standard & Poor's credit analyst Lori Harris. The decline is attributed to the effects of lower volume from competitive promotional activity and poor weather, increased raw material costs, and higher-than-anticipated start-up costs and shipment delays related to the North American water business. While management had expected a significant increase in adjusted operating profit year-over-year, Cott now expects 2008 adjusted operating profit to be between 28% below and 5% above its 2007 level. The drop in profit will further weaken Cott's liquidity position and credit protection measures. Adjusted debt to EBITDA has climbed in the past few years to the mid-5x area, from about 2x in 2004, due to lower EBITDA and higher debt levels. "We will keep the ratings on Cott on CreditWatch until we obtain better visibility regarding the likely effect on the company's liquidity position and covenant compliance resulting from the revised operating profit guidance," S&P says. DAVISON PLAZA: Case Summary & Four Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Davison Plaza Shopping Center, Inc. 14329 Warren Dearborn, MI 48126 Bankruptcy Case No.: 08-60737 Chapter 11 Petition Date: August 26, 2008 Court: Eastern District of Michigan (Detroit) Debtor's Counsel: Michael E. Williams, Esq. (attymw@yahoo.com) 19500 Middlebelt Rd., Suite 201W Livonia, MI 48152 Tel: (248) 474-0670 Estimated Assets: $1 million to $10 million 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/mieb08-60737.pdf DELTA AIR: S&P Sees $500MM Loss for 2008; 'B' Rating Off Watch -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Delta Air Lines Inc. (B/Negative/--), including the 'B' long-term corporate credit rating. S&P has removed all ratings from CreditWatch, where they were placed with negative implications on May 22, 2008, as part of an industrywide review. The rating outlook is negative. "We expect that Delta will post a significant loss this year, approaching $500 million -- before large noncash charges -- due to high and volatile fuel prices," said Standard & Poor's credit analyst Philip Baggaley, "but its financial performance should continue to be better than those of most peer large U.S. airlines." That, plus expected positive operating cash flow and adequate liquidity, support an affirmation of its corporate credit rating. Our rating action is not based on Delta's proposed merger with Northwest Airlines Corp. (also 'B/Negative/--'). DEUTSCHE MORTGAGE: Fitch Affirms B- Rating on $19.7MM Cl. K Certs. ------------------------------------------------------------------ Fitch Ratings upgraded three classes of commercial mortgage pass- through certificates from Deutsche Mortgage & Asset Receiving Corp., as: -- $68.8 million class G to 'AA+' from 'A-;' -- $13.1 million class H to 'A+' from 'BBB; -- $26.2 million class J to 'BB-' from 'B+'. In addition, Fitch has affirmed these classes: -- Interest-only class X at 'AAA'; -- $15.1 million class C at 'AAA'; -- $62.3 million class D at 'AAA'; -- $81.9 million class E at 'AAA'; -- $19.7 million class F at 'AAA'; -- $19.7 million class K at 'B-'. Fitch does not rate the $9.3 million class L certificates. Classes A-1, A-2 and B have paid in full. The upgrades are the result of additional paydown of 41.9% since Fitch's last rating action in April 2008. Of the remaining pool, 84.8% matures in 2008. As of the August 2008 distribution date, the pool's aggregate certificate balance has been reduced by approximately 76.2%, to $312.3 million from $1.31 billion at issuance. There is currently one specially serviced asset (0.7%) which was transferred due to monetary default. T he asset is secured by a 24,620 square foot retail center located in Clinton, Michigan. Occupancy at the property is currently 60%. A Hollywood Video vacated the property in September 2007 and there are no prospective tenants. Based on the most recent appraisal value, losses are expected to be absorbed by the non-rated class L. DUNMORE HOMES: Court Approves Settlement With Travelers, et al. --------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of New York approved a settlement agreement Dunmore Homes, Inc., entered into with Travelers Casualty & Surety Co. of America, Cal Sierra Construction, Inc., DeSilva Construction, Inc., and Hemington Landscape Services, Inc., pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure. Travelers issued performance and payment bonds in favor of certain subsidiaries of Dunmore Homes California, the Debtor's predecessor company, for the benefit of contractors and subcontractors who performed work for the Dunmore Companies. Subsequently, certain parties, including Cal Sierra Construction, DeSilva Construction, and Hemington Landscape, have asserted claims against some of the Bonds. The approved Settlement provides that the Contractor Claimants agree to assign their "Bonded stop Notice Claims" to Travelers. Based in Granite Bay, California, Dunmore Homes Inc. is a privately-owned homebuilder. The company filed for Chapter 11 protection on Nov. 8, 2007 (Bankr. S.D.N.Y. Case No. 07-13533). Maria A. Bove, Esq., and Debra I. Grassgreen, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors has selected Morrison & Foerster LLP as its counsel in this bankruptcy proceeding. In January 2008, the U.S. Bankruptcy Court for the Southern District of New York ordered the transfer of Debtor's Chapter 11 case to the U.S. Bankruptcy Court for the Eastern District of California, Sacramento Division. The Debtor filed its plan of liquidation and an accompanying disclosure statement on March 21, 2008. The company amended the Plan on April 24. The California Bankruptcy Court approved Dunmore's Disclosure Statement on June 12, 2008 as containing "adequate information" within the meaning of Section 1125 of the Bankruptcy Code. A hearing for August 12 has been set to consider confirmation of the Plan. The Debtor disclosed $20,743,147 in total assets and $250,252,312 in total debts in its schedules of assets and liabilities filed with the Court. ENCORE ACQUISITION: S&P Lowers Subordinated Debt Rating to 'B' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its issue-level rating and revised its recovery rating on Encore Acquisition Co.'s senior subordinated debt. "We lowered the issue-level rating to 'B' (two notches below the 'BB-' corporate credit rating on the company) from 'B+', and revised the recovery rating to '6' from '5', indicating the expectation for negligible (0% to 10%) recovery in the event of a payment default," S&P says. "The rating action follows the increase in the borrowing base of the company's credit facility to $1.1 billion from $870 million," said Standard & Poor's credit analyst David Lundberg. "As a result, there is less residual value available for subordinated creditors in the event of a payment default." Fort Worth, Texas-based Encore is an independent oil and gas exploration and production company. The ratings on Encore reflect a weak business risk profile based on its mid-size reserve base (231 million barrels of oil equivalent [boe], including about 32 million boe held at Encore Energy Partners L.P., a partially-owned master limited partnership); participation in the volatile, cyclical, and capital-intensive oil and gas industry; and an aggressive financial risk profile. These factors are mitigated at the rating level by strong near-term cash flow visibility, a long reserve life, and a favorable near-term outlook for crude oil prices. Ratings List Encore Acquisition Co. Corporate credit rating BB-/Stable/-- Ratings Revised To From Encore Acquisition Co. Senior subordinated debt B B+ Recovery rating 6 5 EXUM RIDGE: S&P Lowers Classes E-1, E-2 Ratings to 'CCC-' --------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class B, C, D, E-1, and E-2 notes issued by Exum Ridge CBO 2006-2 Ltd., a hybrid collateralized bond obligation (CBO) transaction. The ratings on the downgraded tranches remain on CreditWatch, where they were placed with negative implications on July, 18 2008. At the same time, the 'AAA' rating on the class A notes remains on CreditWatch negative. The lowered ratings primarily reflect negative rating migration in the corporate entities referenced by the transaction. Currently, more than 6% of underlying bonds have ratings in the 'CCC' range, and an additional 5% have ratings that are on CreditWatch with negative implications. The transaction has also experienced five credit events. According to the most recent trustee report, dated Aug. 7, 2008, four of these have been settled, resulting in a net loss of $9.70 million to the transaction. Additionally, the eligible investments in the deal are subject to market-value risk. Standard & Poor's will continue to review whether the ratings currently assigned to the notes remain consistent with the credit enhancement available to support them. RATINGS LOWERED AND REMAINING ON CREDITWATCH NEGATIVE Exum Ridge CBO 2006-2 Ltd. Rating Class To From Balance (mil. $) ----- -- ---- ---------------- B A-/Watch Neg AA+/Watch Neg 15.000 C BB/Watch Neg A/Watch Neg 12.000 D B-/Watch Neg BBB/Watch Neg 12.000 E-1 CCC-/Watch Neg BB/Watch Neg 3.817 E-2 CCC-/Watch Neg BB/Watch Neg 6.361 RATING REMAINING ON CREDITWATCH NEGATIVE Exum Ridge CBO 2006-2 Ltd. Class Rating Balance (mil. $) ----- ------ ---------------- A AAA/Watch Neg 218.202 TRANSACTION INFORMATION Issuer: Exum Ridge CBO 2006-2 Ltd. Co-issuer: Exum Ridge CBO 2006-2 Corp. Underwriter: Lehman Bros. Special Financing Inc. Trustee: U.S. Bank N.A. FEDERAL-MOGUL: Shows Stability Amid Auto Sales Slump ---------------------------------------------------- Analyst at rating agency, Standard & Poor's said autoparts supplier, Federal-Mogul Corp., is unlikely to follow its peers into bankruptcy, Bloomberg News related. Recently, autoparts supplier Cadence Innovation LLC and Intermet Corp. filed for Chapter 11 bankruptcy, joining other auto suppliers Progressive Molded Products, Inc., Plastech Engineered Products, Inc., and Blue Water Automotive Systems, Inc., which filed for bankruptcy earlier this year. Grant Thornton LLP said in a report dated August 8, 2008, that as many as a third of North American autoparts supplier, including closely hedl firms, are at risk for bankruptcy. However, Nancy Messer, an analyst at S&P, told Bloomberg that Federal-Mogul won't be joining them. Federal-Mogul is one of the few companies in this sector with a stable outlook, Ms. Messer told Bloomberg. S&P gives Federal-Mogul a BB- corporate credit rating. Fund managers echoes Ms. Messer's confidence in Federal-Mogul. According to Bloomberg, Federal-Mogul is "well-positioned" given the fact that the company gets more than a third of its revenues and most of its profits from selling replacement items like Champion spark plugs and because 60% of the company's business is outside the United States, exposing it to faster-growing economies. Federal-Mogul's overall business strategy -- from heavily investing in its aftermarket business, to expanding outside the auto industry, and improving fuel efficiency for its autoparts supplies -- contributes to the company's stability amidst the current automotive sales slump, Bloomberg said. The news agency said that Federal-Mogul gets 39% of its 2007 revenue from its aftermarket business and is in negotiations with a Chines wind-turbine manufacturer. The report cited that Federal-Mogul's competitors in the auto industry are more at risk to bankruptcy because they have no significant aftermarket business. The 11% decline in U.S. auto sales this year through July, higher raw materials costs, and the credit crisis are weighing on U.S.-based partsmakers, Bloomberg said. Annual vehicle sales may fall to 14,200,000 units, the lowest since 1993, according to J.D. Power & Associates, a Westlake Village, California-based market research firm, Bloomberg added. Robert Goodman, an analyst at CRT Capital Group, recommends a buy for Federal-Mogul's common stock. George Putnam, publisher of the Turnaround Letter and fund-manager of New Generation Advisers, Inc., thinks Federal-Mogul stock "is cheap right now." As of August 26, 2008, Federal-Mogul's common stock trades at $16.53 per share. Billionaire Carl Icahn owns 74.8% of Federal-Mogul's common stock. The stake is valued at approximately $1,242,000,000. UBS bought a 5.7% stake in the three months ended June 30, while Solus Alternative Asset Management LP bought a 2.6% stake in the second quarter. TIAA-CREF, the biggest U.S. pension-fund manager, owned 2.1% as of June 30. "Icahn's involvement draws interest," Mr. Putnam told Bloomberg. Mr. Icahn purchased two-thirds of his holdings, 50,100,000 shares, for $900,000,000, or $17.96 each, on Feb. 25, 2008. Bloomberg said those shares have lost 9.3% of their value, costing Icahn $83,700,000 on paper. The rest of his stake was acquired in an exchange of debt while the company was in bankruptcy. Analysts, according to Bloomberg, said Federal-Mogul's stocks may recover to $26 per share at the end of the year. If that happens, Mr. Icahn's shares will be valued to $1,950,000,000. About Federal-Mogul Federal-Mogul Corporation -- http://www.federal-mogul.com/-- (OTCBB: FDMLQ) is a global supplier, serving the world's foremost original equipment manufacturers of automotive, light commercial, heavy-duty, agricultural, marine, rail, off-road and industrial vehicles, as well as the worldwide aftermarket. Founded in Detroit in 1899, the company is headquartered in Southfield, Michigan, and employs 45,000 people in 35 countries. Aside from the U.S., Federal-Mogul also has operations in other locations which includes, among others, Mexico, Malaysia, Australia, China, India, Japan, Korea, and Thailand. The Company filed for chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl & Jones, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $10.15 billion in assets and $8.86 billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the Official Committee of Unsecured Creditors. On March 7, 2003, the Debtors filed their Joint Chapter 11 Plan. They submitted a Disclosure Statement explaining that plan on April 21, 2003. They submitted several amendments and on June 6, 2004, the Bankruptcy Court approved the Third Amended Disclosure Statement for their Third Amended Plan. On July 28, 2004, the District Court approved the Disclosure Statement. The estimation hearing began on June 14, 2005. The Debtors submitted a Fourth Amended Plan and Disclosure Statement on Nov. 21, 2006, and the Bankruptcy Court approved that Disclosure Statement on Feb. 6, 2007. The Fourth Amended Plan was confirmed by the Bankruptcy Court on Nov. 8, 2007, and affirmed by the District Court on November 14. Federal-Mogul emerged from chapter 11 on Dec. 27, 2007. (Federal-Mogul Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) FGIC INC: $184BB in Insured Muni Bonds to Be Reinsured by MBIA -------------------------------------------------------------- MBIA Inc. has agreed to provide reinsurance to $184 billion of municipal bonds currently insured by and FGIC Corp.'s Financial Guaranty Insurance Company. The deal resulted from a competitive process undertaken at the direction of, and overseen by, the New York State Insurance Department and includes the innovative use of "cut-through" reinsurance for a large book of existing financial guaranty business, Insurance Superintendent Eric Dinallo said. The specifics of the transaction must still be submitted to the Insurance Department for approval. In addition, the Department has approved the commutation between FGIC and FGIC UK and Calyon with respect to a commitment by FGIC UK to issue a $1.875 billion financial guaranty policy on a complex basket of distressed asset backed securities. FGIC UK paid Calyon $200 million for the commutation. "Assuming the terms of the reinsurance deal meet regulatory requirements, it should provide substantial improvement for everyone-the municipal and structured policyholders of FGIC, the policyholders of MBIA, and both companies," Mr. Dinallo said. "The innovative use of cut-through reinsurance provides a model that I expect can be used to improve the rating of the municipal bonds currently insured by other downgraded bond insurers, while freeing up capital to pay the claims of other policyholders. I'm proud that the Insurance Department was able to play a constructive role by facilitating and overseeing the bidding process that resulted in a beneficial, market-based transaction." Cut-through reinsurance generally means that a policyholder can file a claim directly with the reinsurer if the insurance company that issued the policy goes bankrupt, thus avoiding the delays usually associated with bankruptcy. This cut-through reinsurance is innovative in three ways: 1. Policyholders can usually only use cut-through reinsurance after the insurance company that issued the policy goes bankrupt. Here, owners of municipal bonds backed by FGIC have a choice. They can go to FGIC or go directly to MBIA with any claims. This increases the assurance that a policyholder will be paid promptly for a claim. 2. Cut-through reinsurance is typically offered to help sell a new policy. Here it is being used retrospectively for existing policies. 3. Cut-through reinsurance is normally offered policy by policy. Here it is being provided all at once for a large group. "We believe that cut-through reinsurance could prove invaluable in helping lift the ratings of municipal bonds now covered by other bond insurers, including Syncora and CIFG," Mr. Dinallo said. FGIC had been downgraded from AAA to ratings that range from BB to CCC, which means that the municipal bonds it insured were also downgraded, unless the issuer had its own independent higher rating. As a result of this transaction, the bonds now reinsured could be upgraded to as high as AA. Also, FGIC municipal policyholders will benefit from a stable reinsurer backing their policies. FGIC's structured finance counterparties will benefit from approximately $1 billion of additional capital resources supporting their policies in the form of capital release, contingency reserve release and a cash ceding commission. As part of this process, FGIC continues to have extensive discussions with its CDO structured finance counterparties. While the majority of FGIC municipal bonds are included in the reinsurance transaction, a small number, including bonds issued by Jefferson County, Alabama, were not included and will continue to be insured only by FGIC. The transaction also strengthens MBIA's insurance company in ways that provide substantial benefit to policyholders. * The transaction will result in greater earnings and cash flow to the insurance company. It also creates operational and capital synergies. * The insurance company will be larger and with a greater percentage of its book concentrated in the stable, low loss municipal business. * Both of the above should fortify MBIA's ratings by improving its financial position. Policyholders would benefit from the maintaining or improving of MBIA's ratings. * The transaction is an effective use of excess capital at a time when the company is able to write limited new business. The deal resulted from an auction and a search process for bidders directed by the Insurance Department. Many bidders participated and provided bids. FGIC selected the best offer and negotiated the final terms. It is expected that the companies will file an application for approval of the transaction on Tuesday, September 2, 2008. That will begin a 10-business-day public comment period, during which all interested parties are free to comment on the transaction before the Department makes its final determination. The application will be public and available from FGIC. "As we move forward with the evaluation process, we hope that anyone who has a comment will share it with us. We want to ensure that both companies moving forward are stronger for all policyholders," Mr. Dinallo said. This transaction is part of the Insurance Department's continuing implementation of its three point plan for the bond insurance industry. 1. Bring in new capital and new players to ensure a competitive market providing bond insurance to those who need it. To date, the Department has facilitated the addition of $10 billion in capital. 2. Protect the policyholders of the distressed companies by finding solutions, including reinsurance for the municipal bonds. 3. Develop new rules for the bond insurers to prevent similar problems in the future. FGIC Corporation is a holding company whose primary operating subsidiaries, Financial Guaranty Insurance Corporation and FGIC UK Limited, provide credit enhancement and protection products to the public finance and structured finance markets throughout the United States and internationally. FGIC Corporation is privately owned by an investor group consisting of The PMI Group, GE and private equity firms Blackstone, Cypress and CIVC. For the three months ended March 31, 2008, FGIC Corporation reported GAAP losses of $33.3 million. As of March 31, 2008, the company had shareholders' equity of approximately $548 million. * * * Fitch Ratings downgraded FGIC Corp.'s Long-term Issuer ratings to 'CCC-' from 'BB'; and ratings on $325 million of 6% senior notes due Jan. 15, 2034, to 'CCC-' from 'BB'. The rating action is based on Fitch's expectation that FGIC will experience further credit deterioration on its book of business backed by residential mortgage-backed securities. This deterioration could lead to further additions in loss reserves which will increase the possibility that FGIC could become subjected to some form of regulatory intervention. As reported by the Troubled Company Reporter on June 23, 2008, Moody's Investors Service has downgraded to B1, from Baa3, the insurance financial strength ratings of the main operating subsidiaries of FGIC Corporation, including Financial Guaranty Insurance Company and FGIC UK Limited. Moody's has also downgraded the senior debt ratings of the holding company, FGIC Corporation to Caa2 from B3 and the contingent capital securities ratings of Grand Central Capital Trusts I-IV to B3 from B2. The rating action concludes a review for possible downgrade that was initiated on March 31, 2008, and reflects the company's severely impaired financial flexibility and the company's proximity to minimum regulatory capital requirements relative to our estimations of expected case losses. The rating action also considers the likelihood that FGIC's announced restructuring plan will ultimately result in the company retaining the higher-risk portion of the insured portfolio without the premiums associated with its lower-risk business. The outlook for the rating is negative. FREMONT GENERAL: Equity Panel Wants Financial Documents Produced ---------------------------------------------------------------- The Official Committee of Equity Holders in Fremont General Corp.'s Chapter 11 case asks the U.S. Bankruptcy Court for the Central District of California to compel the Debtor to produce information documenting its financial affairs. Since the Equity Holders Committee's formation in July, the equity committee has not received from the Debtor basic documentation related to its financial affairs. These documents, the equity panel says, are essential since the Official Committee of Unsecured Creditors in the Debtor's case appear to be working in tandem with the Debtor and FTI Consulting Inc., in order to liquidate all the Debtor's assets and its subsidiary, Fremont Reorganizing Company fka Fremont Investment & Loan. Moreover, the equity panel tells the Court that, through FTI Consulting, the Debtor appears to be giving unfettered access to the creditors committee on this information. The equity panel complains that, while it doesn't have a problem with the Debtor sharing information with the creditors committee, this cooperation has not been extended to the equity panel. The problem for the equity committee is that the Debtor's estate has approximately $695 million in net operating loss carryforwards that may be destroyed if all assets are liquidated because of various Internal Revenue Code sections requiring that there be a "business purpose" to maintain the NOLs. The equity panel relates that the NOLs were allegedly so important to the Debtor that on the first day of the case, it filed an emergency motion for the Court to limit certain transfers of equity interests in the Debtor, and approve related notice procedures to protect the NOLs. The Debtor admits in various pleadings that its assets and liabilities are intertwined with those of its subsidiaries. Moreover, the Debtor and its subsidiaries share common management and file consolidated financial statements. Thus, the equity panel asks the Court to authorize the examination and production of documents of these entities on the dates and times specified: a) on Sept. 10, 2008, at 9:00 a.m., the person most knowledgeable at Fremont Investment & Loan regarding FIL's assets, liabilities, litigation, operations, professionals, and management; b) on Sept. 10, 2008, at 2:00 p.m., the person most knowledgeable at the Debtor regarding the Debtor's assets, liabilities, litigation, operations, professionals, and management; c) on Sept. 11, 2008, at 9:00 a.m., Albert S. Conly, the senior managing director with FTI Consulting Inc. The equity panel says it believes Mr. Conly has been involved in the Debtor's business and financial affairs for some time. The Debtor is seeking to have Mr. Conly employed as its chief restructuring officer; d) on Sept. 11, 2008, at 1:00 p.m., Stephen H. Gordon, the chairman of the board and chief executive officer of the Debtor and, on information and belief, the chairman of the board and chief executive officer of FIL; e) on Sept. 11, 2008, at 3:30 p.m., Thea K. Stuedli, the executive vice president and chief executive officer of the Debtor; and f) ordering the examinees to produce the documents -- which are to be filed under seal -- no later than Sept. 3, 2008, at 5:00 p.m., at the office of: Weiland, Golden, Smiley, Wang Ekvall & Strok LLP 650 Town Center Drive, Suite 950 Costa Mesa, CA The equity panel also asks the Court for assistance to resolve objections and disputes in an expedited manner. About Fremont General Fremont General Corporation (OTC: FMNTQ) -- http://www.fremontgeneral.com/-- is a financial services holding company with $8.8 billion in total assets, at September 30, 2007. The company is engaged in deposit gathering through a retail branch network located in the coastal and Central Valley regions of Southern California through Fremont Investment & Loan. Fremont Investment & Loan funds its operations primarily through deposit accounts sourced through its 22 retail banking branches which are insured up to the maximum legal limit by the FDIC. The Retail Banking Division of the Bank continues to offer a variety of savings and money market products as well as certificates of deposits across its 22 branch network. Customer deposits remain fully insured by the FDIC up to at least $100,000 and retirement accounts remain insured separately up to an additional $250,000. Fremont General filed for Chapter 11 protection on June 18, 2008, (Bankr. C.D. Calif. Case No. 08-13421). Robert W. Jones, Esq., and J. Maxwell Tucker, Esq., at Patton Boggs LLP, represent the Debtor in its restructuring efforts. The Debtor selected Kurtzman Carson Consultants LLC as its claims agent. Peter C. Anderson, the U.S. Trustee for Region 16, has appointed five creditors to serve on an Official Committee of Unsecured Creditors in the case. In its schedules, Fremont General reported $362,227,537 in total assets and $326,529,372 in total debts. When the Debtor filed for protection from its creditors, it listed total assets of $643,197,000 and total debts of $320,630,000. Tiffany Kary of Bloomberg News reported that the Debtor's co- counsel, Scott H. Yun, Esq., at Stutman Treister & Glat, said the assets and debts in the initial court filing were for the period Sept. 30, 2007. The estimates exclude potential recoveries from lawsuits, Ms. Kary said. FRONTIER AIRLINES: Files List of Assets and Liabilities ------------------------------------------------------- Frontier Airlines Inc. filed on Aug. 25, 2008, definitive list of assets and liabilities with the United States Bankruptcy Court for the Southern District of New York. The company listed assets on the books for $1.1 billion and liabilities of $546 million, Bloomberg News reports. As reported in the Troubled Company Reporter on July 28, 2008, the Debtor's holding company, Frontier Airlines Holdings Inc., listed total assets of $1.24 million and total liabilities of $1.09 million as of March 31, 2008. About Frontier Airlines Inc. Headquartered in Denver, Colorado, Frontier Airlines Inc. -- http://www.frontierairlines.com/-- provide air transportation for passengers and freight. They operate jet service carriers linking their Denver, Colorado hub to 46 cities coast-to-coast, 8 cities in Mexico, and 1 city in Canada, well as provide service from other non-hub cities, including service from 10 non-hub cities to Mexico. As of May 18, 2007 they operated 59 jets, including 49 Airbus A319s and 10 Airbus A318s. The Debtor and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.: 08- 11297 thru 08-11299.) Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. At Dec. 31, 2007, Frontier Airlines Holdings Inc. and its subsidiaries' total assets was $1,126,748,000 and total debts was $933,176,000. G-I HOLDING: Files Joint Plan of Reorganization ----------------------------------------------- Bankruptcy Data reports that G-I Holdings and ACI Inc. filed with the U.S. Bankruptcy Court for the District of New Jersey filed a Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code. The U.S. Bankruptcy Court, meanwhile, has approved G-I Holdings' motion for an order extending the exclusive periods during which the Debtors may file a Chapter 11 plan and solicit acceptances thereof. According to Bankruptcy Data, G-I Holdings plan provides for the issuance of a channeling injunction under section 524(g) of the Bankruptcy Code that permanently enjoins all persons holding asbestos claims and future asbestos related demands from pursuing a remedy against the Debtors and other protected parties and channels such claims and demands to the asbestos trust for resolution and payment. The Debtors' exclusive right to file a Plan is extended through and including the earlier of 30 days after (a) one or more of the co-proponents has validly withdrawn its support for the co- proposed plan, (b) the co-proposed plan has been filed for 180 days without the occurrence of its effective date and with the co- proponents having each filed statements extending the 180-day period or (c) an order is entered denying confirmation of the co- proposed plan. The time period with which the Debtors shall have the exclusive right to solicit acceptances of a Chapter 11 plan is extended through and including the sixtieth day after the earliest of the dates designated above. As reported by the Troubled Company Reporter on May 1, 2008, the Debtors asked the U.S. Bankruptcy Court for the District of New Jersey to extend, until Oct. 30, 2008, the exclusive period wherein they can file a plan of reorganization. In addition, the Debtors asked the Court to extend their deadline to solicit acceptances of that plan until Dec. 30, 2008. That was the Debtors' 11th extension request. About G-I Holdings Based in Wayne, New Jersey, G-I Holdings, Inc., is a holding company that indirectly owns Building Materials Corporation of America, a manufacturer of premium residential and commercial roofing products. The company filed for chapter 11 protection on Jan. 5, 2001 (Bankr. D. N.J. Case No. 01-30135). An affiliate, ACI, Inc., filed its own voluntary chapter 11 petition on Aug. 3, 2001. The cases were consolidated on Oct. 10, 2001. Weil, Gotshal & Manges LLP, and Riker, Danzig, Scherer, Hyland & Perretti LLP, represent the Debtors. Lowenstein Sandler PC represents the Official Committee of Unsecured Creditors. C. Judson Hamlin was appointed by the Court as the Legal Representative for Present and Future Holders of Asbestos Related Demands. Keating, Muething & Klekamp, PLL, represents the Futures Representative. GLOBAL BEVERAGE: June 30 Balance Sheet Upside-Down by $5,391,004 ---------------------------------------------------------------- Global Beverage Solutions Inc.'s consolidated balance sheet at June 30, 2008, showed $3,087,548 in total assets and $8,478,552 in total liabilities, resulting in a $5,391,004 stockholders' deficit. At June 30, 2008, the company's consolidated balance sheet also showed strained liquidity with $917,017 in total current assets available to pay $8,478,552 in total current liabilities. The company reported a net loss of $231,790 on product sales of $2,178,256 for the second quarter ended June 30, 2008, compared with a net loss of $1,503,239 on product sales of $2,859,703 in the corresponding period in 2007. Operating expenses decreased $279,322 (22.4%) for the three months ended June 30, 2008, compared to the same period in 2007. Loss on investments was incurred in the three months ended June 30, 2007, for $669,853 due to an unrealized depreciation in the note with Rudy Partners of $1,658,283. 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?316b Going Concern Doubt As reported in the Troubled Company Reporter on May 14, 2008, Turner, Stone & Company LLP, in Dallas, expressed substantial doubt about Global Beverage Solutions Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the the year ended Dec. 31, 2007. The auditing firm or pointed to the company's limited revenues and losses totaling $33,766,869 for the period from Aug. 26, 2002, through Dec. 31, 2007. As of June 30, 2008, the company has an accumulated deficit of $35,560,372 and had net losses totaling $952,462 for the six months ended June 30, 2008. About Global Beverage Headquartered in Plantation, Fla., GlobaL Beverage Solutions Inc. (OTC BB: GBVS.OB) -- http://www.globalbeveragesolutions.com/-- is a business development company organized pursuant to applicable provisions of the Investment Company Act of 1940. The company primarily focuses on manufacturing, distribution and sales of unique beverages globally. GOLDMAN SACHS CBO: S&P Raises Class B Rating to 'BB' ---------------------------------------------------- Standard & Poor's Ratings Services raised its rating on the class B notes issued by Goldman Sachs Asset Management CBO Ltd., an arbitrage corporate high-yield collateralized bond obligation (CBO) transaction, to 'BB' from 'B+' and removed it from CreditWatch, where it was placed with developing implications on July 30, 2008. The raised rating on the class B notes reflects delevering of the transaction and the fact that the class has paid down by 77.5%. As a result of paydowns, the class has an outstanding balance of $8.96 million and is backed by $20.55 million of performing collateral, resulting in significant overcollateralization for the class. Standard & Poor's notes that, according to the July 2008 trustee report, the class B par value ratio was 229.30%, compared with a minimum required ratio of 110.0%. The class also paid all of its deferred interest on the July 10, 2008, payment date. RATING RAISED AND REMOVED FROM CREDITWATCH DEVELOPING Goldman Sachs Asset Management CBO Ltd. Rating Class To From ----- -- ---- B BB B+/Watch Dev TRANSACTION INFORMATION Issuer: Goldman Sachs Asset Management CBO Ltd. Co-issuer: Goldman Sachs Asset Management CBO Corp. Collateral manager: Goldman Sachs Asset Management Underwriter: Goldman Sachs & Co. Trustee: JPMorgan Chase Bank N.A. GRANDLUXE RAIL: Financial Hurdles Spur Halt in Railway Operations ----------------------------------------------------------------- GrandLuxe Rail Journeys will stop its luxury carriage operations later this week due to financial difficulties, relates The Los Angeles Times. The company hasn't filed for Chapter 11 protection though. "We're in negotiations with various parties, lenders. . . [W]e are evaluating what our options are," Tom Rader, the Debtor's chairman, told the Times in a telephone interview. Mr. Rader did not provide details of the Debtor's financial problems. The LA Times indicates that industry insiders were surprised at the Debtor's shutdown. Based in Evergreen, Colorado, GrandLuxe Rail Journeys -- http://www.americanorientexpress.com/-- operates America's premier private train on four to 10 day itineraries throughout North America. The company offers fine dining and comfortable luxury aboard its classic, restored, private railcars. The company bought American Orient Express in 2006. GS MORTGAGE: Fitch Affirms B- Rating on $3.3 Million Class O Loans ------------------------------------------------------------------ Fitch Ratings has upgraded five classes of GS Mortgage Securities Corp. II Series 2004-C1 as: -- $12.3 million class E to 'AAA' from 'AA+'; -- $13.4 million class F to 'AA+' from 'A+'; -- $7.8 million class G to 'A+' from 'A'; -- $7.8 million class H to 'A-' from 'BBB+'; -- $5.6 million class J to 'BBB+' from 'BBB'. Fitch has also affirmed these classes: -- $104.1 million class A-1 at 'AAA'; -- $190.5 million class A-2 at 'AAA'; -- $125.4 million class A-1A at 'AAA'; -- Interest only classes X-1 and X-2 at 'AAA'; -- $20.1 million class B at 'AAA'; -- $7.8 million class C at 'AAA'; -- $16.7 million class D at 'AAA'; -- $3.3 million class K at BB+'; -- $3.3 million class L at 'BB-'. -- $4.5 million class M at 'B+'; -- $3.3 million class N at 'B'; -- $3.3 million class O at 'B-'. Fitch does not rate the $13.4 million class P. The upgrades reflect increased credit enhancement due to the payoff of eight loans and scheduled amortization since Fitch's last rating action. As of the August 2008 distribution date, the pool has paid down 39.2%, to $542.7 million from $892.3 million at issuance. Fifteen loans (35.3%) are defeased. Fitch has reviewed the performance of the remaining non-defeased shadow rated loan, The Water Tower Center (9.6%). The loan, which is secured by a regional anchored shopping mall located in Chicago, Illinois, maintains its investment grade shadow rating due to stable performance. There are a total of six pari passu notes A-1 through A-6 with the A-3 and A-4 pieces included in the trust. The property is currently 88.3% leased, compared to 96.1% occupied at issuance due to Lord & Taylor store closing. The American Girl has signed a 15-year lease for part of the vacated space which starts in February 2009. The loan is amortizing and is scheduled to mature in September 2010. Three loans (3.1%) have been identified as Fitch loans of concern due to declining performance. The largest Fitch loan of concern (1.5%), which is in special servicing, is secured by a 282 unit multifamily property in San Antonio, Texas. The loan was transferred to special servicing for an imminent maturity default after the borrower stated that he will not be able to refinance by the maturity date of Oct. 1, 2008. Servicer reported year end 2007 debt service coverage ratio was only 0.35 times, compared to 1.57x at issuance. The property is currently 63% occupied, compared to 85.8% at issuance. The property suffered a fire in 2007 that damaged several units. Per a recent inspection by the servicer, all damages have been repaired. The special servicer is looking into possible workout options. Fitch will continue to monitor this loan. The second largest Fitch loan of concern (1.1%) is secured by a 310 unit multifamily property in Houston, Texas. Servicer report YE07 DSCR was 1.06x, compared to 2.0x at issuance. The decline in performance was caused by increased operating expenses, resident turnover, and high concessions offered at the property. Eleven loans (17.5%) are scheduled to mature in 2008, including eight non-defeased loans (9%). The interest rates on these loans range from 4.55% to 5.43% with weighted average coupon of 4.95%. Servicer reported YE07 DSCR ranges from 0.35x to 2.3x with weighted average DSCR at 1.73x. HAIGHTS CROSS: Moody's Junks Senior Unsecured Notes --------------------------------------------------- Moody's Investors Service affirmed Haights Cross Communications, Inc.'s Caa3 Corporate Family rating while upgrading its Probability of Default rating to Caa3 from Ca, following the company's announcement that it has successfully refinanced its prior senior secured term loan. Ratings upgraded: Haights Cross Communications, Inc. -- Probability of Default rating to Caa3 from Ca -- Senior Discount Notes to Ca, LGD5, 86% from C, LGD5, 72% Rating affirmed: Haights Cross Communications, Inc. -- Corporate Family Rating -- Caa3 Haights Cross Operating Company -- Senior unsecured notes due August, 2011 -- Caa3, LGD3, 48% The rating outlook has been changed to stable from negative. These actions follow the company's announcements that it has closed on a new approximately $108 million unrated senior secured term loan and completed the sale of its Oakstone Publishing business, using the proceeds, in part, to repay its prior term loan and to reduce its debt burden through the repurchase of $32.1 million of senior notes. The upgrade of the PDR incorporates Moody's view that the refinancing has successfully averted an otherwise near-certain payment default, albeit temporarily through the new May 2011 maturity date. Affirmation of the CFR, however, reflects a potentially lower expected recovery for the corporate family in default based on the business lines that remain proforma for the recent asset sale and financial leverage that still far exceeds estimated realizable and prudently financeable values for the same. The change in rating outlook to stable from negative largely results from the extension of Haights Cross' debt maturity schedule conferred by the refinancing. Haights Cross now has no significant debt maturities prior to May 2011, the maturity date of its new term loan. The new term loan contains a number of financial tests which the company must pass in order to avoid a default. Moody's considers that the company will be able to comply with these financial covenants, although the initial tests provide a relatively thin margin of headroom. The change in Haights Cross' senior discount notes rating reflects the reduced probability of near-term default which is somewhat offset by a higher forecasted LGD rate. This results in a lower expected loss rate for this junior-ranking instrument and a smaller distinction in expected loss relative to the more senior claims of the company. Affirmation of Haights Cross's Caa3 CFR reflects Moody's view that Haights Cross continues to maintain a relatively weak financial profile, notwithstanding the short-term liquidity improvements noted above. While the sale of Oakstone Publishing has provided Haights Cross with a cash infusion, and permitted a significant debt reduction, it will nonetheless deprive the company of the cash flow generated by the sold property. In Moody's view, the benefit of Haights Cross' debt reduction on leverage is more than offset by the loss of Oakstone's EBITDA, placing relatively greater financial leverage upon the company's surviving properties. Moody's expects that the company's modestly positive free cash flow will turn negative once Haights Cross Communications' PIK notes turn cash pay starting in June 2009. With no revolving credit facility, the company depends upon cash-on-hand to provide for its working capital needs; however, Moody's considers that the funding requirements of the parent company senior discount notes will quickly deplete this cash following their conversion to cash pay status in 2009. While the successful refinancing of Haights Cross' term loan has allayed concerns of a near-term payment default, Moody's considers that there is little prospect that the company will be able to repay the principal amount of its fully-accreted debt upon maturity in 2011, absent further asset sales, amendments and a wholesale recapitalization. Moreover, the ability of Haights Cross Communications to service its interest payments is vulnerable to the ability of the operating company to upstream sufficient cash on a sustained basis, unfettered by the restricted payments covenants contained in the company's senior notes indenture. The Caa3 Corporate Family rating continues to reflect Haights Cross' heavy debt burden, weakening asset coverage and liquidity, soft market conditions and the possible negative impact on Haights Cross' test prep business if the "No Child Left Behind" Act is significantly modified or repealed. Ratings are supported by dependability of Haights Cross' library/recorded books sales, the diversification provided by its test-prep business, the company's highly diversified customer base, and the long standing reputation of its educational, professional and library products. On August 18, 2008, Haights Cross announced that it had (1) refinanced its prior term loan upon maturity on August 15, 2008 partly from the proceeds of approximately $106.6 million drawn under a new $108.2 million unrated senior secured term loan provided by DDJ Capital and certain other lenders and (2) repurchased at par $31.2 million of its 11 3/4 % Senior Notes due 2011 from certain of the lenders and other holders. Headquartered in White Plains, New York, Haights Cross develops and publishes print and audio products for the K-12 education, library and medical education markets. The company recorded approximately $232 million in revenue for the twelve month period ended June 30, 2008. HAIGHTS CROSS: S&P Affirms 'CCC' Corporate Credit Rating -------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'CCC' corporate credit rating on Haights Cross Communications Inc. (HCC) and removed the ratings from CreditWatch, where they were placed with negative implications on June 16, 2008, based on Standard & Poor's concern about the company's ability to repay its $124.5 million senior secured term loan on Aug. 15, 2008. The outlook is stable. "We affirmed the ratings based upon the company's refinancing of its term loan," said Standard & Poor's credit analyst Tulip Lim, "but we are still concerned about the company's high interest burden, fractional EBITDA coverage of gross interest expense, and limited liquidity." On Aug. 15, 2008, White Plains, N.Y.-based HCC announced that it successfully repaid its senior secured term loan due Aug. 15, 2008, from borrowings of $108.2 million under a new senior secured credit facility due May 15, 2011, cash on hand, and from net cash proceeds from its previous sale of its Oakstone publishing business. In addition, as part of the transaction, the company repurchased at par, $31.2 million of its 11-3/4% senior notes due 2011 from certain lenders and other holders. Pro forma for the transaction, total debt outstanding as of June 30, 2008, is roughly $374.4 million. "However, added Ms. Lim, "these transactions were not deleveraging, and in our view, only forestalled further liquidity difficulties." HAROLD GLICK: Case Summary & Three Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Harold P. Glick 10706 Piney Island Dr. Bishopville, MD 21813 aka Hal P. Glick Bankruptcy Case No.: 08-20914 Chapter 11 Petition Date: August 26, 2008 Court: District of Maryland (Baltimore) Judge: Duncan W. Keir Debtor's Counsel: Gary R. Greenblatt, Esq. Email: grgreen@mehl-green.com Mehlman, Greenblatt & Hare, LLC 723 South Charles St., Ste. LL3 Baltimore, MD 21230 Tel: (410) 547-0300 Fax: (410) 547-7474 Estimated Assets: $10,000,000 to $50,000,000 Estimated Debts: $10,000,000 to $50,000,000 Debtor's Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ PNC Bank, N.A. Guaranty $16,213,949 P.O. Box 340777 Pittsburgh, PA 15230 M&T Bank $6,832,721 25 S. Charles St., 18th Fl. Baltimore, MD 21201 PNC Bank, N.A. PNC- Wealth $3,012,917 Management securities account ending 1585 (balance as of July 31, 2008); value of security: $1,026,424 HEALTH MANAGEMENT: Moody's Cuts Rating on $2.7 Bil. Sr. Loan to B1 ------------------------------------------------------------------ Moody's Investors Service affirmed the B1 Corporate Family and Probability of Default Ratings of Health Management Associates, Inc. Moody's also lowered the rating on HMA's senior secured credit facility to B1 from Ba3. In accordance with the application of Moody's Loss Given Default Methodology, the lower rating reflects the reduction in the amount of subordinated debt in the capital structure resulting from the repurchase and resolution of the put of the company's convertible senior subordinated notes due 2023, which diminishes the benefit of the layer of first loss absorption in a distress scenario. This action concludes the review of the ratings of the senior secured credit facilities. The outlook for the ratings is stable. Ratings downgraded/LGD assessments revised: -- $500 million senior secured revolving credit facility, to B1 (LGD3, 44%) from Ba3 (LGD3, 42%) -- $2.75 billion senior secured term loan, to B1 (LGD3, 44%) from Ba3 (LGD3, 42%) Ratings affirmed: -- Corporate Family Rating at B1 -- Probability of Default Rating at B1 Headquartered in Naples, Florida, HMA is an owner and operator of acute-care hospitals in non-urban settings. The company provides inpatient services such as general surgery, and oncology as well as outpatient services such as laboratory, x-ray and physical therapy services. In addition, some facilities also offer specialty services such as cardiology, radiation therapy and MRI scanning. HMA generated revenue of approximately $4.5 billion in the 12 months ended June 30, 2008. HEALTHSOUTH CORP: Moody's Junks 10.75% Senior Unsecured Notes ------------------------------------------------------------- Moody's Investors Service affirmed the B3 Corporate Family and Probability of Default Ratings of HealthSouth Corporation and changed the ratings outlook to positive from stable. Moody's also upgraded HealthSouth's Speculative Grade Liquidity Rating to SGL-2 from SGL-3 reflecting the company's improved liquidity profile. Additionally, we affirmed the ratings on the senior secured credit facility at Ba3 and the senior unsecured notes at Caa1. Summary of Moody's actions. Ratings upgraded: -- Speculative Liquidity Rating to SGL-2 from SGL-3 -- Ratings affirmed/LGD assessments revised: -- Corporate Family Rating, B3 -- Probability of Default Rating, B3 -- Senior secured revolving credit facility due 2012 to Ba3 (LGD2, 24%) from Ba3 (LGD2, 23%) -- Senior secured term loan due 2013 to Ba3 (LGD2, 24%) from Ba3 (LGD2, 23%) -- 10.75% senior unsecured notes due 2016, Caa1 (LGD5, 78%) -- Senior unsecured floating rate notes, Caa1 (LGD5, 78%) Outlook changed to positive from stable. The change in outlook reflects several positive milestones including the progress in debt reduction and associated improvement in liquidity. Debt has been reduced by approximately $1.6 billion since December 31, 2006. Furthermore, with the divestitures and settlements complete and the regulatory uncertainty resolved the company can focus on improving operating performance. HealthSouth generated greater than anticipated volume growth in the first half of 2008 which helped mitigate the affects of the pricing "roll-back". We believe the freezing of the inpatient rehabilitation services compliance threshold at 60% will be a long term positive and expect to see further improvement in credit metrics. The upgrade in the Speculative Grade Liquidity Rating reflects the improved liquidity of HealthSouth as borrowings under the revolving credit facility have been fully repaid and greater covenant cushion is expected because of additional debt reduction. We anticipate that HealthSouth will now have sufficient cushion under the financial covenants to maintain access to the available revolver. Prior to upgrading the B3 Corporate Family Rating, Moody's would like to see the company realize further operating and credit metric improvements. The adjusted financial leverage of the company remains high. Further, free cash flow became positive for the twelve months ended June 30, 2008 but was modest. Moody's would like to see HealthSouth demonstrate a sustained ability to reduce debt with internal cash flow prior to a ratings change. Headquartered in Birmingham, Alabama, HealthSouth operates inpatient rehabilitation hospitals and long-term acute care hospitals. HealthSouth recognized approximately $1.8 billion of revenue in the twelve months ended June 30, 2008. HELLER FINANCIAL: Fitch Holds B- rating on $9.6MM Class M Certs. ---------------------------------------------------------------- Fitch Ratings upgrades Heller Financial Commercial Mortgage Asset Corp.'s mortgage pass-through certificates, series 2000-PH1: -- $26.3 million class G to 'AAA' from 'AA+'; In addition, Fitch affirms these classes: -- $415.9 million class A-2 at 'AAA'; -- Interest-only class X at 'AAA'; -- $43.1 million class B at 'AAA'; -- $47.8 million class C at 'AAA'; -- $12 million class D at 'AAA'; -- $35.9 million class E at 'AAA'; -- $14.4 million class F at 'AAA'; -- $7.2 million class K at 'BBB-'; -- $9.6 million class L at 'BB'; -- $9.6 million class M at 'B-'. Fitch does not rate the $19.1 million class H, $9.6 million class J, or $11.4 million class N certificates. Class A-1 has paid in full. The upgrade reflects increased credit enhancement due to principal paydown as a result of loan payoffs and scheduled amortization since Fitch's last rating action. As of the August 2008 distribution date, the pool's aggregate principal balance has decreased 30.9% to $661.7 million from $956.9 million at issuance. Fifty-five loans (44.1%) are defeased, including five (14.4%) of the top 10 loans in the transaction. There are currently four loans (2.3%) in special servicing. The largest specially serviced asset (1.0%) became real estate-owned in November 2007. The asset is an industrial property in Irving, Texas, that reported a December 2007 physical occupancy of 14%. The special servicer is working to stabilize the asset and the Fitch projected losses are anticipated to be absorbed by the non- rated class. The second largest specially serviced asset (0.7%) is secured by a retail property in Cincinnati, OH. The loan transferred to special servicing in July 2008 for imminent default and is currently 30+ days delinquent. As of June 2008, the property was 67% occupied and had a servicer reported debt service coverage ratio (DSCR) of 0.77 times. The third largest specially serviced asset (0.5%) is secured by an office building in Schererville, Indiana. The property has suffered from a decline in occupancy and the loan is currently 60+ days delinquent. Three loans (0.7%) are scheduled to mature in 2008, of which two loans have defeased (0.4%). The non-defeased loan is performing and its coupon rate is 7.21%. HERCULES CHEMICAL: Case Summary & 18 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Hercules Chemical Company, Inc. 111 South Street Passaic, NJ 07055 Bankruptcy Case No.: 08-25553 Type of Business: The Debtor sells plumbing products. See: http://www.herchem.com/ Chapter 11 Petition Date: August 22, 2008 Court: Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: Gregory L. Taddonio, Esq. (gtaddonio@reedsmith.com) Paul M. Singer, Esq. (psinger@reedsmith.com) Reed Smith LLP 435 Sixth Ave. Pittsburgh, PA 15219 Tel: (412) 288-7102 Fax: (412) 288-3063 http://reedsmith.com/ Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Edna Wander Ghertler corporate guaranty $127,707 60 Riverside Drive New York, NY 10024 The Dow Chemical Company trade debt $116,159 7719 Collection Center Drive Chicago, IL 60694 Evercrest Inc. trade debt $95,604 2 Lee Boulevard, Suite B Malvern, PA 19355 NAMPAC trade debt $65,239 Ascutney Metal Products trade debt $62,050 Rhoda W. Fidler corporate guaranty $53,145 ISP Tech trade debt $41,148 Berry Plastics trade debt $39,425 Estate of Jay W. Fidler corporate guaranty $37,644 Veckridge Chemical trade debt $33,935 Calumet Penreco LLC trade debt $31,992 G.J. Chemical Co. Inc. trade debt $31,717 Josh Fidler corporate guaranty $29,450 Meg Fidler corporate guaranty $28,867 C & N Packaging Inc. trade debt $23,138 Arma Container Corp. trade debt $21,338 Total Fina Elf Lubricants trade debt $21,314 USA Harvard Folding Fox trade debt $21,288 Custom Chem Formulators trade debt $20,247 HILEX-POLY: Gets $125 Million Exit Financing from GE Commercial --------------------------------------------------------------- GE Commercial Finance Corporate Lending provided $125 million in exit credit financing to Hilex-Poly Co. LLC on July 9, 2008. The financing was used to refinance the Debtor's debtor-in-possession financing upon its emergence from a pre-packaged Chapter 11 bankruptcy. In May, GE Commercial also provided the Debtor with a $140 million DIP credit facility to support its pre-packaged Chapter 11 filing. GE Capital Markets arranged both transactions. "We specialize in meeting the financing needs of our customers in both good and challenging times," said Rob McMahon, managing director of GE Corporate Lending's Restructuring group. "In addition, GE's access to capital and turnaround finance experience expedites the lending process and provides liquidity to borrowers when they need it most." As reported in the Troubled Company Reporter on July 10, 2008, the Debtors emerged from its pre-packaged Chapter 11 restructuring as a healthy company with a solid financial structure. The Debtor officially concluded its Chapter 11 reorganization after meeting all statutory requirements of its plan of reorganization. About Hilex Poly Headquartered in Hartsville, South Carolina, Hilex Poly Co. LLC -- http://www.hilexpoly.com/-- manufactures plastic bag and film products. The company has approximately 1,324 personnel and has 10 manufacturing facilities located in the United States. The company and its affiliates Hilex Poly Holding Co. LLC filed for Chapter 11 protection on May 6, 2008 (Bankr. D. Del. Lead Case No.08-10890). Hilex Poly is a majority-owned subsidiary of Hilex Poly Holding Co. LLC. Edmon L. Morton, Esq., and Kenneth J. Enos, Esq., at Young, Conaway, Stargatt & Taylor in Wilmington, Delaware, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as claims agent. The U.S. Trustee for Region 3 has not appointed creditors to serve on an Official Committee of Unsecured Creditors to date. When the Debtors filed for protection against their creditors, they listed assets and debts between $100 million and $500 million. HINES HORTICULTURE: Hearing on Planned Sale Procedures Set Nov. 20 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware will hold a hearing on Nov. 20, 2008, to approve the sale procedures proposed by Hines Horticulture, Inc., and its debtor-affiliate, William Rochelle of Bloomberg News reports. As reported by the Troubled Company Reporter on Aug. 21, the Debtors agreed to the terms of an asset purchase agreement with an affiliate of Black Diamond Capital Management, L.L.C., the designated stalking-horse bidder. The asset purchase agreement contain several conditions -- including completion of due diligence and financing, among other things. Investment funds managed by Black Diamond are the company's largest unsecured creditors, holding a majority of the company's 10.25% Senior Notes. The sale is for approximately $70 million, according to Mr. Rochelle. It will involve up to $58 million in cash to pay pre- bankruptcy secured loans and financing for the restructuring, and up to $12 million to pay debt owing to pre- and post-bankruptcy suppliers. A $1.5 million breakup fee, plus up to $750,000 in expense reimbursement, is being proposed. The Debtors want the deadline for competitive bids be set for Nov. 3, and the auction for Nov. 7. They are also proposing that they pays Black Diamond $225,000 for expenses the potential buyer will make while it investigates the Debtor's finances. The investigation timetable ends Sept 19. According to the report, Hines received interim authority on Aug. 22 to borrow up to $53 million. A final financing hearing for approval of a $62 million secured loan is set for Sept. 10. A date hasn't yet been set for a hearing on the motion erecting sale procedures and bidder protections for Black Diamond, the report said. About Hines Horticulture Headquartered in Irvine, California, Hines Horticulture, Inc. -- http://www.hineshorticulture.com/-- operates nursery facilities located in Arizona, California, Oregon and Texas. Through its affiliate, the company produces and distributes horticultural products. The company and its affiliate, Hines Nurseries, Inc., filed for Chapter 11 protection on Aug. 20, 2008 (Bankr. D. Del. Case No.08-11922). Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, represents the Debtors in their restructuring efforts. The Debtors' proposed claims, notice and balloting agent is Epiq Bankruptcy Solutions LLC. When the Debtors filed for protection against their creditors, they listed assets and debts of between $100 million and $500 million each. HSI ASSET: Cuts Ratings on 4 Classes of Securities to 'B' --------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on seven classes of mortgage pass-through certificates from HSI Asset Loan Obligation Trust 2007-AR1, a residential mortgage-backed securities (RMBS) transaction backed by U.S. prime jumbo mortgage loan collateral. "The downgrades reflect our opinion that projected credit support for the affected classes is insufficient to maintain the previous ratings, given our current projected losses. During the August 2008 distribution period, delinquency levels spiked, and the amount of loans classified as real estate owned (REO) increased to $9.35 million from $7.63 million in July 2008. Loans in the 60-day delinquent category experienced the largest increase, rising to $10.52 million in August from $4.39 million in July, while loans in the 30-day delinquent category decreased by only $2 million, meaning an additional $4 million in mortgage loans became newly delinquent," S&P says. "As a way to better account for this spike in 60-day delinquencies and further reduce future volatility in determining our lifetime projected losses, we assumed that 75% of the 60-day delinquent loans and 25% of the 30-day delinquent loans would be in foreclosure within six months. We then added this amount to the current foreclosure amount, since this provided a forecast more consistent with the current delinquency trend. Our new lifetime projected losses, as a percentage of the original pool balance, for this U.S. RMBS transaction is now 4.13%," S&P adds. Subordination provides credit support for this transaction. The underlying collateral for this deal consists of hybrid, adjustable-rate, U.S. prime jumbo mortgage loans that are secured primarily by first liens on one- to four-family residential properties with original terms to maturity from the first scheduled payment due date of not more than 30 years. Standard & Poor's will continue to monitor the RMBS transactions it rates and take rating actions, including CreditWatch placements, when appropriate. RATINGS LOWERED HSI Asset Loan Obligation Trust 2007-AR1 Mortgage pass-through certificates Rating Class CUSIP To From ----- ----- -- ---- I-A-1 40431LAA6 B BB II-A-1 40431LAB4 BBB A II-A-2 40431LAC2 B BB III-A-1 40431LAD0 BBB A III-A-2 40431LAE8 B BB IV-A-1 40431LAF5 BBB A IV-A-2 40431LAG3 B BB IKON OFFICE: Ricoh Deal Cues Moody's to Review Low-B Ratings ------------------------------------------------------------ Moody's Investors Service placed the ratings of IKON Office Solutions on review for possible upgrade following the company's announcement today that it has entered into a definitive agreement to be acquired by Ricoh Co. for approximately $1.6 billion. Ratings under review include: -- Corporate Family Rating of Ba2; -- Probability of Default Rating of Ba2; -- Senior unsecured $225 million, notes due 2015 at Ba3, LGD 4, 62%; -- Senior unsecured $260 million notes due 2025 at Ba3, LGD 4, 62%; -- Senior unsecured $95 million notes due 2027 at Ba3, LGD 4, 62%. Under the terms of the agreement, Ricoh is offering cash to IKON's shareholders and may finance this acquisition through internal and external sources but the transaction is not contingent on financing and, subject to regulatory and shareholder approvals, is expected to close by Dec. 31, 2008. The review for upgrade will focus on the structural considerations of the IKON debt in Ricoh's capital structure, including whether or not Ricoh directly guarantees the notes upon closing. IKON's $225 million notes due 2015 are subject to a change of control covenant whereby investors may require IKON to repurchase the notes upon the close of the transaction at 101% of the principal. IKON's corporate family, probability of default and speculative grade liquidity (SGL-1) ratings will likely be withdrawn when the transaction closes. Ricoh is one of the world's leading manufacturers of office automation equipment. With over 300 subsidiaries and affiliates globally, Ricoh posted sales of Yen 2,219 billion during the fiscal year ended March 2008. IKON Office Solutions, headquartered in Malvern Pennsylvania, is the largest independent distributor of copier, printer and multifunction printer technologies, as well as a provider of integrated document management solutions and systems. IKON generated about $4.17 billion in revenue for the twelve months ended June 2008. IKON OFFICE: Ricoh Buyout Cues S&P to Put 'BB-' on Watch Pos ------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings, including the 'BB-' corporate credit rating, on IKON Office Solutions Inc. on CreditWatch with positive implications. "The CreditWatch placement follows the announcement that IKON has agreed to be acquired by 'A+' rated Ricoh Co. Ltd. for approximately $1.6 billion in cash," said Standard & Poor's credit analyst Martha Toll-Reed. IKON is the leading independent provider of document management systems and services, with fiscal 2007 revenues of $4.2 billion. Ricoh, headquartered in Japan, is one of the world's leading manufacturers of high-quality multifunction products, printers, fax machines, and related supplies. The transaction, subject to IKON shareholder and certain regulatory approvals, is expected to close in fourth-quarter 2008. IKON will become a subsidiary of Ricoh and maintain its headquarters in Malvern, Penn. If the rated debt on IKON remains outstanding following the close of the transaction, the ratings will likely be investment-grade. INDALEX HOLDING: S&P Cuts Credit Rating to 'CCC+'; Outlook Neg -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Lincolnshire, Ill.-based Indalex Holding Corp. to 'CCC+' from 'B-'. The outlook is negative. At the same time, S&P lowered the rating on the company's $270 million senior secured notes due 2014 to 'CCC' from 'CCC+'. The recovery rating on the notes remains a '5', indicating expectations of modest (10% to 30%) recovery in the event of a payment default. "The downgrade reflects the company's poorer-than-expected second- quarter results, its weak liquidity, and our expectation that its key end markets, transportation and residential construction, will not recover until late 2009," said Standard & Poor's credit analyst Sherwin Brandford. Indalex has been experiencing steadily declining operating performance and tenuous liquidity that has been shored up through sale-leasebacks of equipment and a term loan from an affiliate of its equity sponsor, Sun Capital Advisers Inc. Continued market weakness is likely to further erode the company's liquidity and could lead to a breach of financial covenants. The ratings reflect the company's exposure to highly cyclical and competitive markets, its thin margins, import concerns, negative free cash flow, and shrinking liquidity. The ratings also reflect the company's low fixed-cost structure, which provides some cushion from aluminum price volatility for the vast majority of its sales. Indalex is one of the largest aluminum extruders in the highly fragmented North American market, with more than $1 billion in revenues. The company's markets are highly competitive. Although the company sells its products across several industries, it derives a majority of its revenues from the highly cyclical transportation and residential construction sectors. The downturn in these key end markets has resulted in significant volume declines for Indalex over the past several quarters, hampering profitability and pressuring liquidity. JACKSONVILLE ECONOMIC: Moody's Rates $23MM Sr. Unsec. Bonds to Ba1 ------------------------------------------------------------------ Moody's Investors Service changed to positive from stable the outlook of all ratings related to Gerdau S.A. and Gerdau Ameristeel Corporation. Simultaneously, Moody's withdrew the Ba1 corporate family rating of the Brazilian operations of Gerdau represented by Gerdau Acominas S.A., Gerdau Acos Longos S.A., Gerdau Acos Especiais S.A., and Comercial de Acos S.A., collectively referred to as "Gerdau Brazil". Ratings with outlook changed to positive from stable are: Issuer: Gerdau S.A. -- Ba1 Corporate Family Rating -- Ba1 $600 million guaranteed perpetual bonds Issuer: Gerdau Ameristeel Corporation -- Ba1 Probability of Default Rating -- Ba1 Corporate Family Rating -- Ba1 $405 million Senior Unsecured Guaranteed Notes due 2011 (LGD 4, 62%) Issuer: Jacksonville Economic Development Commission (FL) -- Ba1 $23 million Industrial Revenue Senior Unsecured Bonds due 2037 (LGD4, 62%) Rating withdrawn: -- Ba1 Corporate Family Rating of "Gerdau Brazil" The change in outlook reflects the maintenance of strong debt protection metrics and robust liquidity on a consolidated basis while successfully integrating Chaparral Steel, a 2.6 million ton per year structural steel and steel bar producer acquired in September 2007 for about $4.2 billion, and Macsteel, a 1.1 million ton per year specialty steel manufacturer acquired in April 2008 for some $1.46 billion. Gerdau's healthy liquidity is based on a cash balance of $3.4 billion at June 30, 2008 in addition to $1.35 billion in committed credit facilities, its good access to export- related financing and comfortable debt repayment schedule vis-�- vis its strong cash generation. Current global steel market conditions are very favorable and, along with recent acquisitions, are raising Ameristeel's and Gerdau's revenues and earnings to levels well above historical results. Moody's expects Gerdau to use free cash flow to reduce leverage as measured by Net Debt to EBITDA to around 1.0x by 2008 year-end. Gerdau's ratings continue to be supported by its solid cash generation, which reflects its strong market position in the several markets where it operates, its good operational and geographic diversity, and cost-driven management. The company's acquisitive growth strategy, exposure to commodity products, and the need for further improvement of operational efficiency in North America are constraining factors for its ratings. Moody's recognizes, however, that acquisitions made so far have contributed to Gerdau's improved business profile. At this time, Moody's believes the ratings of Gerdau and Ameristeel should be highly correlated. The factors behind this judgment include the strong parent support to Ameristeel, demonstrated by the recent equity infusion, which maintained the parent's 66.5% ownership, guarantees of Gerdau for approximately 80% of Ameristeel's debt, cross default provisions under existing loan agreements, and the centrally managed approach to sales and operations. However, there is no assurance that the two companies' ratings will move in tandem in the future. Upward pressure on the ratings of Gerdau could result from the decline in leverage as measured by Consolidated Net Debt to EBITDA below 1.8x on a sustained basis simultaneous with the maintenance of strong credit fundamentals that include efficient cost management and adequate liquidity levels. An upgrade of Ameristeel's ratings would also consider the secured nature of its $950 million committed credit facility, which is a limiting factor in achieving investment grade status. Conversely, Gerdau's ratings or outlook could come under downward pressure if Consolidated Net Debt to EBITDA remains above 2.2x for an extended time period or in case of a sharp deterioration in the group's liquidity position or financial performance. This scenario would probably result from a large acquisition preventing Gerdau from prospectively reducing its leverage. Gerdau Ameristeel, headquartered in Tampa, Florida, serves customers in the U.S. and Canada through a vertically integrated network of 19 minimills, 19 scrap recycling facilities and 68 downstream operations. The company's run-rate annual sales are approximately $10 billion. Gerdau S.A., headquartered in Porto Alegre, Brazil, is the largest long steel producer in Brazil and the second largest long steel manufacturer in North America, with consolidated net revenues of approximately $20 billion for the trailing twelve months ended June 30, 2008. JEFFERSON COUNTY: S&P Cuts SPUR on GO Warrants to 'B' ----------------------------------------------------- Standard & Poor's Ratings Services lowered its underlying ratings (SPURs) on Jefferson County, Ala.'s outstanding general obligation warrants to 'B' from 'BBB'. In addition, Standard & Poor's lowered its SPUR on the Jefferson County Public Building Authority, Ala.'s series 2006 lease revenue warrants to 'B-' from 'BBB-'. Standard & Poor's also lowered its SPUR on Birmingham-Jefferson Civic Center Authority, Ala.'s special tax bonds, series 2002-A, 2002-B, 2002- C, and 2005-A special tax bonds to 'B' from 'A'. Standard & Poor's also lowered its ratings on the county's outstanding limited obligation school warrants to 'BBB' from 'A'. Finally, Standard & Poor's lowered its rating on the county's series 2000 limited- obligation school debt, issued for the board of education and secured by lease payments to the county, to 'B' from 'A-'. "The rating actions reflects a greater probability that the county will proceed with a bankruptcy filing," said Standard & Poor's credit analyst James Breeding. All ratings also remain on CreditWatch with negative implications, reflecting the potential for county bankruptcy. Standard & Poor's continues to monitor the situation and will adjust ratings as necessary as the circumstances dictate. The county adopted a resolution authorizing the development of a bankruptcy plan. Revenues available for payment of debt service on the general obligation warrants include ad valorem, sales, business license, and occupational taxes; however, none of these legally available revenues are specifically pledged for payment of debt service. In the event the county files for bankruptcy, the entire balance of the 2001B warrants could become due immediately at the request of at least 25% of holders of the warrants. The county has only one $5 million payment remaining to make to the Birmingham-Jefferson Civic Center Authority for its obligation pertaining to the series 2002A and 2002B bonds, but there is uncertainty as to whether this payment could be delayed due to a bankruptcy filing. Also, while the taxes that support the 2002-C bonds and the 2005-A bonds are special taxes, the same concerns exist for those revenue streams. JENNIFER MCSWEENEY: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Jennifer A. McSweeney aka Jennifer A. Hartling 169 Beacon Street Boston, MA 02116 Bankruptcy Case No.: 08-16401 Chapter 11 Petition Date: August 27, 2008 Court: District of Massachusetts (Boston) Judge: Joan N. Feeney Debtor's Counsel: David B. Madoff (madoff@mandkllp.com) Madoff &Khoury LLP 124 Washington Street, Suite 202 Foxboro, MA 02035 Tel: (508) 543-0040 Fax: (508) 543-0020 Total Assets: $1,082,180 Total Liabilities: $1,404,142 A copy of Debtor's petition, which includes a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mab08-16401.pdf JERK MACHINE: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Jerk Machine, Inc. 111 NW 2nd Street P.O. Box 14035 Fort Lauderdale, FL 33301 Bankruptcy Case No.: 08-21962 Type of Business: The Debtor sells Jamaican food. See: http://www.jerkmachine.com/ Chapter 11 Petition Date: Aug. 22, 2008 Court: Southern District of Florida (Fort Lauderdale) Judge: John K. Olson Debtor's Counsel: David Marshall Brown, Esq. (dmbrownpa@bellsouth.net) David Marshall Brown, P.A. 33 NE 2 St # 208 Ft. Lauderdale, FL 33301 Tel: (954) 765-3166 Total Assets: $3,274,979 Total Debts: $4,061,768 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/flsb08-21962.pdf JJH INVESTMENTS: Development Issues Lead to Bankruptcy ------------------------------------------------------ JJH Investments filed for Chapter 11 protection with the U.S. Bankruptcy Court for the Southern District of Florida, the South Florida Business Journal reports. The Debtor's development of City Shops & Walk, a retail complex in Ocana, was frought with legal and financial difficulties, the Journal relates, citing local paper Ocal Star-Banner. Counsel for the Debtor have not returned comments. JJH Investments is based in Southwest Ranches, Florida. JP MORGAN: Fitch Lowers Ratings on Classes N and P Certificates --------------------------------------------------------------- Fitch Ratings has downgraded two classes of JP Morgan Commercial Mortgage Securities Corp. pass-through certificates, series 2003- PM1 as: -- $4.3 million class N from 'B' to 'B-'; -- $2.9 million class P from 'CCC' to 'CCC/DR1'. In addition, Fitch has affirmed these classes: -- $312.4 million class A1A at 'AAA'; -- $40.1 million class A-2 at 'AAA'; -- $82.6 million class A-3 at 'AAA'; -- $282 million class A-4 at 'AAA'; -- Interest-only class X-1 at 'AAA'; -- Interest-only class X-2 at 'AAA'; -- $33.2 million class B at 'AAA'; -- $13 million class C at 'AAA'; -- $27.5 million class D at 'AAA'; -- $13 million class E at 'AA+'; -- $15.9 million class F at 'AA-'; -- $13 million class G at 'A'; -- $18.8 million class H at 'BBB+'; -- $15.9 million class J at 'BBB-'; -- $7.2 million class K at 'BB+'; -- $8.7 million class L at 'BB'; -- $7.2 million class M at 'B+'. Class A-1 has paid in full. Fitch does not rate the $14.7 million class NR certificates. The downgrades are the result of expected losses on the four loans (2%) currently in special servicing as well as higher than expected losses on a loan disposed from the trust. Two loans (1.6%) are secured by multifamily properties located in Fort Worth, Texas and are controlled by MBS Cos., a property owner and operator that defaulted on a portfolio of multifamily properties in late 2007. Recent property valuations indicate that significant losses are possible upon liquidation. Fitch's analysis reflects the risk associated with these loans. The third specially serviced loan (0.46%) is collateralized by an industrial warehouse located in Tustin, California. The loan is 90+ days delinquent on debt service payments. The servicer is currently trying to establish contact with the operator. Losses are possible. The final specially serviced loan (0.18%) is secured by a multifamily property in Springfield, Illinois. The loan has a history of delinquencies and the borrower is currently working with the special servicer to cure all defaults. Losses are possible. The affirmations reflect scheduled amortization and defeasance since Fitch's last rating action. As of the August 2008 distribution date, the pool's aggregate certificate balance has decreased 21% to $913 million from $1.16 billion at issuance. Thirteen loans (21%), including the largest two loans in the transaction (11.6%), are fully defeased. The majority of the non-defeased pool (55.6%) matures in 2013. The weighted average interest rate for these loans is 5.58%. The largest non-defeased loan in the pool (5.6%) is secured by a retail property in West Palm Beach, Florida, has an interest rate of 6.20% and matures in October 2012. The servicer reported December 2007 Debt Service Coverage Ratio was 1.40 times. JPMORGAN TRUST: Cuts Rating on Classes P, Q Ratings to CCC ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on eight classes of commercial mortgage pass-through certificates from JPMorgan Chase Commercial Mortgage Securities Trust 2007-CIBC19. In addition, S&P affirmed its ratings on 15 other classes from this series. The downgrades reflect credit concerns regarding seven of the 27 loans in the pool that have reported debt service coverage (DSC) of less than 1.0x. The downgrades also reflect the fact that one loan ($4.7 million) will have a DSC of less than 1.0x when its initial interest-only (IO) period ends. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. There are 27 loans in the pool ($399.4 million; 12%) that have reported DSC of less than 1.0x. The loans are secured by a variety of property types and have an average balance of $14.8 million. These loans have seen an average decline in DSC of 45% since issuance. The properties securing the seven loans that are credit concerns have experienced a combination of declining occupancy and higher operating expenses. The remaining loans secure properties that are in various stages of renovation or lease-up, and are not currently credit concerns because S&P expects the net cash flow available for debt service to improve in the future. Two assets ($15.0 million, 0.5%) are with the special servicer, LNR Partners Inc. (LNR); details are: -- The Beaver Brook Village loan has a total exposure of $10.0 million (0.3%) and is secured by the fee interest in a 73,285-sq.-ft. retail property in Dracut, Mass. The loan was transferred to LNR on Aug. 15, 2007, after the borrower filed for bankruptcy. The loan is 60-plus-days delinquent and LNR expects to review the borrower's proposed reorganization in the near future. Standard & Poor's expects the resolution of the asset will result in a minimal loss. -- The Gaffney Retail Center-SC loan has a total exposure of $5.6 million (0.2%) and is secured by a 56,940 -sq.-ft. retail property in Gaffney, S.C. The loan was transferred to LNR on Aug. 14, 2007, because of a dispute over escrow payments. The property is 100% occupied by a single tenant that filed a lawsuit over the dispute. The court has ordered mediation, which is expected to occur next month. Standard & Poor's expects the resolution of the asset to result in a minimal loss. As of the Aug. 12, 2008, remittance report, the collateral pool consisted of 241 loans with an aggregate trust balance of $3.265 billion, compared with the same number of loans totaling $3.276 billion at issuance. The master servicers, Capmark Finance Inc. (Capmark) and Wells Fargo Bank N.A. (Wells), reported financial information for 96% of the pool. Ninety-nine percent of the servicer-provided information was full-year 2007 data. Standard & Poor's calculated a weighted average DSC of 1.31x for the pool, up from 1.24x at issuance. There is one delinquent loan in the pool, which is with LNR. The trust has not experienced any losses to date. The top 10 loans have an aggregate outstanding balance of $761.9 million (23%) and a weighted average DSC of 1.21x, down from 1.32x at issuance. Standard & Poor's reviewed the property inspections provided by the master servicer for nine of the assets underlying the top 10 exposures. All of the properties were characterized as "good." Capmark and Wells reported a watchlist of 38 loans ($520.9 million, 16%). The River City Marketplace loan ($110.0 million, 3%) is the largest loan on the watchlist and the second-largest exposure in the pool. The loan is secured by a 559,796-sq.-ft. lifestyle retail property in Jacksonville, Fla. The loan appears on the watchlist because the collateral property reported a DSC of 0.72x for the year-ended Dec. 31, 2007. The property opened in November 2006 and was 94% occupied as of July 2008. The loan has a $1.3 million letter of credit, which can be used for debt service shortfalls. "The Doubletree Guest Suites loan ($39.8 million, 1%) is the second-largest loan on the watchlist and the ninth-largest loan in the pool. The loan is secured by a 253-room full-service hotel in Plymouth Meeting, Pa., and appears on the watchlist because of a decline in DSC from issuance. The property reported a DSC of 1.17x for the year-ended Dec. 31, 2007, down from 1.42x at issuance. Occupancy at the hotel, however, was negatively affected by renovation work during 2007, and we expect the DSC to improve in 2008," S&P says. 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 lowered and affirmed ratings. RATINGS LOWERED JPMorgan Chase Commercial Mortgage Securities Trust 2007-CIBC19 Commercial mortgage pass-through certificates Rating Class To From Credit enhancement (%) ----- -- ---- ---------------------- H BBB- BBB 4.26 J BB BBB- 3.01 K BB- BB+ 2.76 L B+ BB 2.51 M B BB- 2.01 N B- B+ 1.76 P CCC+ B 1.63 Q CCC B- 1.25 RATINGS AFFIRMED JPMorgan Chase Commercial Mortgage Securities Trust 2007-CIBC19 Commercial mortgage pass-through certificates Class Rating Credit enhancement (%) ----- ------ ---------------------- A-1 AAA 30.10 A-2 AAA 30.10 A-3 AAA 30.10 A-4 AAA 30.10 A-1A AAA 30.10 A-SB AAA 30.10 A-M AAA 20.06 A-J AAA 12.04 B AA+ 11.29 C AA 10.16 D AA- 9.15 E A 7.65 F A- 6.52 G BBB+ 5.27 X AAA N/A N/A -- Not applicable. JUNIPER CBO: Classes A-4L, A-4, B-2 Have 'CCC-', 'CC' Ratings ------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on the class A-3L and A-3 notes issued by Juniper CBO 2000-1 Ltd., a high-yield arbitrage collateralized bond obligation (CBO) transaction, to 'AAA' from 'AA+' and removed them from CreditWatch, where they were placed with positive implications on Aug. 1, 2008. "The upgrades reflect factors that have positively affected the credit enhancement available to support the class A-3 and A-3L notes since we upgraded them to 'AA+' in April 2007. These factors include an increase in the level of overcollateralization available to support the class A-3 and A-3L notes due to the continued delevering of the transaction. Since the April 2007 rating action, the class A-2L notes have paid down completely, and the class A-3 and A-3L notes have paid down approximately 32% of their outstanding balances, which has raised the senior class A overcollateralization ratio to 196.6%," S&P says. RATINGS RAISED AND REMOVED FROM CREDITWATCH POSITIVE Juniper CBO 2000-1 Ltd. Rating Class To From ----- -- ---- A-3L AAA AA+/Watch Pos A-3 AAA AA+/Watch Pos OTHER OUTSTANDING RATINGS Juniper CBO 2000-1 Ltd. Class Rating ----- ------ A-4L CCC- A-4 CCC- B-2 CC TRANSACTION INFORMATION Issuer: Juniper CBO 2000-1 Ltd. Current manager: Wellington Management Co. LLP Underwriter: Bear Stearns & Co. Inc. Trustee: The Bank of New York Mellon Transaction type: Arbitrage corporate high-yield CBO TRANCHE PRIOR CURRENT INFORMATION ACTION ACTION ----------- ------ ------- Date (MM/YYYY) 04/2007 8/2008 A-3L note bal. (mil. $) 20.00 13.59 A-3 note bal. (mil. $) 30.00 20.38 Senior class A O/C ratio (%) 173.98 196.6 Senior class A O/C ratio min. (%) 120.0 120.0 Class A O/C ratio (%) 98.75 89.90 Class A O/C ratio min. (%) 110.0 110.0 KANDY LLC: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: Kandy, LLC 1211 West Tharpe Street Tallahassee, FL 32303 Bankruptcy Case No.: 08-40573 Debtor-affiliates filing separate Chapter 11 petitions on August 27, 2008: Entity Case No. ------ -------- AFDC Tallahassee I , LLC 08-40575 AFDC Panama City II, LLC 08-40576 Kandy, D.D.S., P.A. 08-40577 Chapter 11 Petition Date: August 26, 2008 Court: Northern District of Florida (Tallahassee) Debtors' Counsel: Thomas B. Woodward, Esq. P.O. Box 10058 Tallahassee, FL 32302 Tel: (850) 222-4818 Fax: (850) 561-3456 Email: woodylaw@embarqmail.com Estimated Assets: $100,000 to $500,000 Estimated Debts: $1,000,000 to $10,000,000 The Debtors did not file a list of their 20 Largest Unsecured Creditors. KENT SHAFFER: Case Summary & 18 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Kent Alan Shaffer and Merry Susan Shaffer dba Builder's Choice dba Shaffer Construction 412 Kennedy Avenue Alma, NE 68920 Bankruptcy Case No.: 08-41976 Chapter 11 Petition Date: August 26, 2008 Court: District of Nebraska (Lincoln Office) Debtor's Counsel: Joseph H. Badami (jbadami@woodsaitken.com) Woods & Aitken LLP 301 South 13th St., Suite 500 Lincoln, NE 68508 Tel: (402) 437-8500 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A list of the debtor's 18 largest unsecured creditors is available for free at http://bankrupt.com/misc/neb08-41976.pdf LANDSOURCE COMMUNITIES: Panel to Challenge Enforceability of Liens ------------------------------------------------------------------ The Official Committee of Unsecured Creditors appointed in LandSource Communities Development LLC, and its debtor-affiliates bankruptcy cases seeks the U.S. Bankruptcy Court for the District of Delaware's permission to challenge (a) the extent, validity, priority, perfection, and enforceability of certain liens on the Debtors' property and personal property; and (2) all of acknowledgments, releases of claims, admissions, and confirmations. The Creditors Commitee has conveyed its intent to challenge the stipulations and admissions of LandSource Communities Development, LLC, and the validity of liens asserted by lenders, and (ii) may pursue claims against the lenders in connection with the Court- approved $1,185,000,000 debtor-in-possession facility, and prepetition credit facilities. "The Third Circuit has held that bankruptcy courts have the power to grant derivative standing to creditor committees 'as a remedy in cases where a debtor-in-possession unreasonably refuses to pursue an avoidance claim.'" The Official Committee of Cybergenics Corp. v. Chinery, 330 F.3d 548,553 (3rd Cir. 2003). The Debtors sought and obtained a Final DIP Order that set, according to the Creditors Committee, a particularly short deadline by which it could determine whether it should file challenges on liens and bring claims that would otherwise belong to the Debtors. By the Final DIP Order, the Debtors have stipulated away their rights to bring the Lien Challenges and Potential Claims. The Final DIP Order also requires the Committee to obtain Court approval to file the Lien Challenges and Potential Claims. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, relates the Debtors, the First Lien Lenders and the Second Lien Lenders have not yet produced a substantial portion of the documents that the Committee must review in order to substantiate the Lien Challenges and Potential Claims. However, Ms. Jones avers, based on the information the Committee has reviewed, it can satisfy the Court's requirements for derivative standing. Evidences of Liens According to Ms. Jones, in 2007, the First Lien Lenders and Second Lien Lenders executed certain pledge and security agreements that ostensibly provide the Lenders with a security interest in and a continuing lien on all of Debtors' personal property. The P&S Agreements provide that the Lender will have a security interest in all personal property and fixtures of the Debtors including this collateral: (a) Accounts; (b) Chattel Paper; (c) Documents; (d) General Intangibles; (e) Goods; (f) Instruments; (g) Insurance; (h) Intellectual Property; (i) Investment Related Property; (j) Letter of Credit Rights; (k) Money; (1) Receivables and Receivable Records; (m) Commercial Tort Claims; (n) All Collateral Records, the Collateral Support and Supporting Obligations; and (o) All Proceeds, products, accessions, rents and profits. Ms. Jones informs the Court that the Committee has been provided only copies of draft of the Debtors' schedules of assets and liabilities. Thus, the identity of the Debtors' actual, owned property that the P&S Agreements identify as collateral has not been made available to the Committee. The Lien Challenges and Potential Claims are colorable claims that would benefit the estates if successful, Ms. Jones asserts. She relates that given the short timeline that the Debtors and Lenders provided for the Challenge Deadline, and taking into account that minimal documentation has been provided to the Committee with regard to these issues, the Committee has been able to narrow the universe of colorable Lien Challenges and Potential Claims. In its effort to narrow the field of its potential targets for the Lien Challenges, the Committee excludes certain of the Debtors' possessions: (a) Exempt assets; (b) Deposit accounts for which Lenders executed control agreements prior to March 10, 2008; (c) Intellectual Property Rights recorded with the U.S. Patent and Trademark Office of property rights predating the March 10, 2008 non-insider preference period cutoff; (d) Certain unexpired insurance policies identified by policy endorsements predating the March 10, 2008 non-insider preference period cutoff; (e) Certain real property referenced in real property trust deeds; (f) Certain Blanket U.C.C. Security. According to Ms. Jones, the inaction in failing to bring the Lien Challenges and Potential Claims would be an injustice to the Debtors and their creditors. Ms. Jones recalls that the Final DIP Order provides that in the absence of the Committee filing Lien Challenges and Potential Claims, those Lien Challenges and Potential Claims are waived. She argues that significant sums may not be recovered into the estates due solely to the unreasonably short time frame that Debtors and Lenders sought for the Challenge Deadline, which compromises the Committee's ability to make its case on these issues. Ms. Jones asserts that the Lien Challenges and Potential Claims have the likelihood of bringing additional assets into the estates. Ms. Jones points out that to the extent a lien is challenged successfully, that property will not belong to the Lenders, but rather will be recovered by the estates for potential distribution to the creditors. Ms. Jones says that the Debtors agreed not to pursue the Lien Challenges and the Potential Claims for reasons having nothing to do with the merits of any Lien Challenges or Potential Claims. According to Ms. Jones, the Debtors required financing from the Lenders. The Debtors stipulated away their rights to bring any Lien Challenges and Potential Claims in return for the financing. "The Debtors have an obvious conflict." Further, Ms. Jones avers that there is no benefit to a trustee standing in the Debtors' stead to bring the Lien Challenges and Potential Claims as opposed to the Committee. The Committee has already spent time and effort investigating these issues and pursuing additional information from the Debtors, she relates. "The learning curve on these issues is steep. The Committee should continue with the efforts it has already begun." As reported in the Troubled Company Reporter on Aug. 20, 2008, the Creditors Committee asked the Court to extend the time within which they may file certain motions and complaints in connection with Valuation Issues and Liens Challenge. The Court's order granting final approval to the Debtors' $1,185,000,000 debtor-in-financing package, funded by the syndicate of Barclays Bank PLC-led lenders, provides for: -- a September 8, 2008 deadline by which the Official Committee of Unsecured Creditors may file a motion or application with the Court to determine the value of the collateral securing the Debtors' prepetition debt and to recharacterize outstanding any amounts as unsecured deficiency claims; and -- a September 18, 2008 deadline by which the Committee may file a complaint or motion challenging the extent, validity, priority, perfection and enforceability of certain liens. 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. 10; http://bankrupt.com/newsstand/or 215/945-7000). LANDSOURCE COMMUNITIES: Says Panel Needs No Further Discovery ------------------------------------------------------------- LandSource Communities Development LLC, and its debtor-affiliates say they have already provided the Official Committee of Unsecured Creditors with the formal appraisals that were conducted, valuing the Debtors' assets as of September 2007 and as of March 2008. The Committee needs no further discovery to decide whether to ask the U.S. Bankruptcy Court for the District of Delaware to determine the value of the collateral security of the Debtors' prepetition debt or to recharacterize any amounts outstanding as unsecured deficiency claims, says Mark D. Collins, Esq., at Richards, Layton & Finger P.A., in Wilmington, Delaware. As for a formal appraisal valuing the Debtors' assets as of the Petition Date, the Committee has been granted substantial funds of up to $500,000 to challenge the amount of the First Lien Lenders' Roll-Up above $750,000,000, which provides ample funds for an appraisal should the Committee believe one is necessary or appropriate, Mr. Collins notes. There is simply no need for any additional extension of time for the Committee to file a complaint regarding the Collateral Valuation Issues, he tells the Court. If the Court does grant an extension to the Committee, the Debtors asks the Court to grant them the same extension to file a complaint regarding the Collateral Valuation Issues. Mr. Collins asserts that without an extension, judicial resources will be wasted as the Debtors and the Committee would be pursuing adversary proceedings under much different time frames. Mr. Collins says the Debtors would be amenable to a 90-day extension of time for the Committee to assert any claims regarding a Lien Challenge. "This would provide the Debtors with certainty as to when the Committee would make a Lien Challenge and would prevent the prejudice that the Debtors face if the Committee's open-ended extension request of filing 90 days after all documents have been produced was granted," Mr. Collins relates. "The open-ended extension would likely cause any Lien Challenge to be filed by the Committee sometime next year," he adds. First Lien/DIP Agent The Committee's is seeking an "indefinite" extension of time to file any challenge it may have with respect to the valuation issue or the lien issue, counsel to Barclays Bank PLC, Edwin J. Harron, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, notes. Mr. Harron informs the Court that the Committee was provided weeks ago with all the information necessary to determine the extent, validity, priority, perfection and enforceability of the First Lien Obligations. Thus, there is no need for any extension of the Lien Challenge Period or for the First Lien Secured Parties to provide any further information with respect to the Lien Issue, he asserts. Similarly, the Committee has been provided with all past appraisals of the collateral securing the First Lien Obligations, and has the resources to obtain its own appraisal as of the Petition Date. According to Mr. Harron, the valuation of the collateral as of the Petition Date is the sole issue relevant to any challenge of the amount of the Term Loan Credit Facility. Thus, there is no basis for the Committee's request for additional time and information in order for it to be in a position to challenge the amount of Term Loan Credit Facility in excess of $750,000,000. Mr. Harron asserts that the value of that collateral is best determined through a formal third-party appraisal, not through a review of documents the First Lien Secured Parties may possess concerning appraisals conducted months prior to the Petition Date. "The Committee has had more than two months, and has been provided with the resources and access to the Debtors' assets necessary, to conduct an appraisal." Moreover, the Final DIP Order explicitly provides that the Valuation Challenge Period may be extended only with the prior written consent of the DIP Agent. The DIP Agent has not consented, and does not consent, to any extension of the Valuation Challenge Period, Mr. Harron points out. While the Committee contends that it needs an extension because it is waiting to receive additional e-mails from the Debtors, it has failed to describe the anticipated content of those e-mails or why they may be relevant to the validity and perfection of the First Lien Secured Parties' liens and security interests, Mr. Harron adds. The Committee, according to Mr. Harron, has refused to identify the information it needs from the First Lien Secured Parties that will allow for a reasonable search of the documents and communications. Rather, the Committee, he says, has asserted a need for a broad range of documents created over a period of many years that would be extremely burdensome and costly for the First Lien Secured Parties to deliver. Equally without merit is the Committee's contention that the Debtors' failure to file schedules of assets and liabilities justifies an extension of the Lien Challenge Period, Mr. Harron avers. Mr. Harron notes that it is unclear from the Committee's request whether it is also is seeking an extension of the Release Challenge Period. Regardless, the Committee, he asserts, has not provided cause sufficient to warrant an extension of that period. Second Lien Agent The Bank of New York Mellon, in its capacity as administrative agent for the Second Lien Lenders, has no objection to a 90-day extension to the September deadlines to December 2008. It does, however, object to a 90-day extension from the date when the absolute last document requested has been produced. Andrew N. Rosenberg, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, in New York, says the extension could drag on indefinitely, especially considering the overbroadness of the Committee's request for production on documents and communications. Mr. Rosenberg points out that an inability to locate one of the numerous non-relevant documents or communications could easily create an infinite deadline. The Committee should be limited to a 90-day extension to the September deadlines, Mr. Rosenberg argues. "If discovery issues arise, the Committee may always request additional extensions, but the Extension Motion requests no real set end date, and must, therefore, be denied." As reported in the Troubled Company Reporter on Aug. 20, 2008, the Creditors Committee asked the Court to extend the time within which they may file certain motions and complaints in connection with Valuation Issues and Liens Challenge. The Court's order granting final approval to the Debtors' $1,185,000,000 debtor-in-financing package, funded by the syndicate of Barclays Bank PLC-led lenders, provides for: -- a September 8, 2008 deadline by which the Official Committee of Unsecured Creditors may file a motion or application with the Court to determine the value of the collateral securing the Debtors' prepetition debt and to recharacterize outstanding any amounts as unsecured deficiency claims; and -- a September 18, 2008 deadline by which the Committee may file a complaint or motion challenging the extent, validity, priority, perfection and enforceability of certain liens. 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. 10; http://bankrupt.com/newsstand/or 215/945-7000). LEHMAN BROTHERS: To Slash Up to 6% of Workforce ----------------------------------------------- The Wall Street Journal's Matthias Rieker, citing a report by The New York Times, says Lehman Brothers Holdings, Inc., is planning to eliminate 1,000 to 1,500 employees, as much as 6% of the company. It remains unclear what parts of the company would be affected, WSJ says. The Journal notes that Lehman this year has had at least four rounds of layoffs and had 26,189 employees at the end of its fiscal second quarter, ended May 31, down 2,134 from the year- earlier period. The Journal further notes that Lehman has been struggling to keep up with the losses it had to take in marking to market its mortgage assets, and is in talks centered on selling parts of its businesses and even a stake in itself to raise capital. The Journal's Diya Gullapalli says Lehman is looking to sell its investment-management division, Neuberger Berman. The report notes that private-equity firms including Kohlberg Kravis Roberts & Co., Bain Capital LLC and TPG are considered potential buyers for at least parts of Lehman's investment-management division, where Neuberger is the crown jewel. The report says another possibility for Lehman is selling a piece of its $40 billion commercial-mortgage portfolio. MarketWatch's Sue Chang says the report of the additional layoffs comes in the wake of reports that Lehman has failed to secure investment from Asian entities, including Korea Development Bank of South Korea. Mr. Rieker relates that Lehman swung to a $2.8 billion loss in the second quarter, from a $1.3 billion profit a year earlier, because write-downs of mortgage-related assets and exposure to hedge funds. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- an innovator in global finance, serves the financial needs of corporations, governments and municipalities, institutional clients, and high net worth individuals worldwide. Founded in 1850, Lehman Brothers maintains leadership positions in equity and fixed income sales, trading and research, investment banking, private investment management, asset management and private equity. The firm is headquartered in New York, with regional headquarters in London and Tokyo, and operates in a network of offices around the world. LEVITZ FURNITURE: Trustee Wants Professional Fees Reduced --------------------------------------------------------- Four professionals retained in the Chapter 11 case of PLVTZ, Inc., doing business as Levitz Furniture, sought allowance and payment of fees and reimbursable expenses for services rendered: Period Fees Expenses ------ ---- -------- Jones Day 3/1/2008 to $328,245 $7,491 6/30/2008 Cooley Godward 3/1/2008 to $26,078 $343 Kronish LLP 6/30/2008 J.H. Cohn LLP 3/1/2008 to $3,998 $253 6/30/2008 FTI Consulting, Inc. 3/1/2008 to $41,197 $0 6/30/2008 Cooley Godward serves as legal counsel for the Official Committee of Unsecured Creditors while J.H. Cohn serves as the panel's forensic accountant & financial advisor. FTI Consulting work for the Debtor as crisis manager, while Jones Day serves the Debtor's counsel. U.S. Trustee Objects Diana G. Adams, United States Trustee for Region 2, asked for a 30% reduction of the fees requested by the firms and a reservation of her rights to object to the allowance of future interim and final fee requests. "The ultimate benefit to the estates of the fees incurred to date simply cannot be assessed at this time," the U.S. Trustee said in a court filing. According to Ms. Adams, the outcome of the Debtor's bankruptcy case is still uncertain since it is still unknown whether the estate is administratively solvent or insolvent. She further said that the Debtor has not also filed a plan or disclosure statement to date. Jones Day has agreed to the holdback and is presently only seeking payment of 70% of its fees. About Levitz Furniture/PVLTZ Based in New York City, Levitz Furniture Inc., -- http://www.levitz.com/-- is a specialty retailer of furniture, bedding and home furnishings in the United States. It has 76 locations in major metropolitan areas, principally in the Northeast and on the West Coast of the United States. Levitz Furniture Inc. and 11 affiliates filed for chapter 11 on Sept. 5, 1997. In December 2000, the Court confirmed the Debtors' Plan and Levitz emerged from chapter 11 on February 2001. Levitz Home Furnishings Inc. was created as the new holding company as a result of the emergence. Levitz Home Furnishings and 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 45189). In their second filing, the Debtors disclosed about $245 million in total assets and $456 million in total debts. Nicholas M. Miller, Esq., and Richard H. Engman, Esq., at Jones Day represented the Debtors. Jeffrey L. Cohen, Esq., Jay R. Indyke, Esq., and Cathy Hershcopf, Esq., at Cooley Godward Kronish LLP served as counsel to the Official Committee of Unsecured Creditors. During this period, the Debtors closed around 35 stores in the Northeast, California, Minnesota and Arizona. On March 28, 2008, the Court dismissed the chapter 11 cases of Levitz II. In December 2005, the Levitz II debtors sold substantially all of their assets to PLVTZ, LLC, an affiliate of Prentice Capital Management LLP, and the Pride Capital Group, doing business as Great American Group. Initially, Prentice owned all of the equity interests in PLVTZ. On July 6, 2007, PLVTZ was converted into a Delaware corporation, and Harbinger Capital Partners Special Situations Fund, LP, Harbinger Capital Partners Master Fund I, Ltd., and their affiliates became minority shareholders. Great American's stake in the acquisition was in running the going-out- of-business sales for some 27 Levitz units. PLVTZ, dba Levitz Furniture, continued to face decline in financial performance since December 2005. Liquidity issues and the inability to obtain additional capital prompted PLVTZ to seek protection under chapter 11 on Nov. 8, 2007 (Bankr. S.D.N.Y. Lead Case No. 07-13532). Paul D. Leake, Esq., and Brad B. Erens, Esq., at Jones Day represents the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC serves as the Debtors' claims and noticing agent. The Debtor's schedules show total assets of $123,842,190 and total liabilities of $76,421,661. (Levitz Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). LEVITZ FURNITURE: U.S. Trustee Wants Chapter 11 Case Converted -------------------------------------------------------------- Diana Adams, United States Trustee for Region 2, has proposed the conversion of the Chapter 11 case of Levitz Furniture, Inc. to one under Chapter 7, or the dismissal of the case, citing the Debtor's failure to timely file and confirm a plan of reorganization. "As of [August 26, 2008], the Debtor has not filed a plan or disclosure statement. Failure to timely file and confirm a plan constitutes cause for conversion or dismissal," Ms. Adams said in a court filing. The deadline for the Debtor to file a plan expired on March 7, 2008, while the deadline for soliciting votes from its creditors to accept the plan expired on May 6, 2008. "Unless the Debtor files a confirmable plan and disclosure statement in the immediate future, it appears that [it] has no likelihood of confirming a plan," Ms. Adams said. Ms. Adams said the case is good for conversion since the Debtor has assets to distribute only to administrative creditors based on its monthly operating report for July 2008. The report shows that the Debtor has $4,593,000 in total assets while it has $3,871,000 in current liabilities representing its administrative obligations. It also shows that the Debtor has a total liabilities of $73,332,000. "Assuming the Debtor is able to realize almost 100% of the value of its current assets, [it] has a razor thin level of administrative solvency," Ms. Adams said. "The Debtor, however, does not have sufficient funds to provide a meaningful distribution to its non-administrative creditors." Section 1112(b) of the Bankruptcy Code allows a court to convert a Chapter 11 case to a Chapter 7 case for cause. In a Chapter 7 case, the bankruptcy trustee gathers and sells the debtor's nonexempt assets and uses the proceeds to pay creditors. The debtor is allowed to keep certain "exempt" property but its remaining assets will be liquidated by the trustee. About Levitz Furniture/PVLTZ Based in New York City, Levitz Furniture Inc., nka PVLTZ Inc. -- http://www.levitz.com/-- is a specialty retailer of furniture, bedding and home furnishings in the United States. It has 76 locations in major metropolitan areas, principally in the Northeast and on the West Coast of the United States. Levitz Furniture Inc. and 11 affiliates filed for chapter 11 on Sept. 5, 1997. In December 2000, the Court confirmed the Debtors' Plan and Levitz emerged from chapter 11 on February 2001. Levitz Home Furnishings Inc. was created as the new holding company as a result of the emergence. Levitz Home Furnishings and 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 45189). In their second filing, the Debtors disclosed about $245 million in total assets and $456 million in total debts. Nicholas M. Miller, Esq., and Richard H. Engman, Esq., at Jones Day represented the Debtors. Jeffrey L. Cohen, Esq., Jay R. Indyke, Esq., and Cathy Hershcopf, Esq., at Cooley Godward Kronish LLP served as counsel to the Official Committee of Unsecured Creditors. During this period, the Debtors closed around 35 stores in the Northeast, California, Minnesota and Arizona. PLVTZ Inc., a company created by Prentice Capital Management LP, and Great American Group purchased substantially all the assets of Levitz Home Furnishings in December 2005. Initially, Prentice owned all of the equity interests in PLVTZ. On July 6, 2007, PLVTZ was converted into a Delaware corporation, and Harbinger Capital Partners Special Situations Fund, LP, Harbinger Capital Partners Master Fund I, Ltd., and their affiliates became minority shareholders. Great American's stake in the acquisition was in running the going-out-of-business sales for some 27 Levitz units. PLVTZ, dba Levitz Furniture, continued to face decline in financial performance since December 2005. Liquidity issues and the inability to obtain additional capital prompted PLVTZ to seek protection under chapter 11 on Nov. 8, 2007 (Bankr. S.D.N.Y. Lead Case No. 07-13532). Paul D. Leake, Esq., and Brad B. Erens, Esq., at Jones Day represents the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC serves as the Debtors' claims and noticing agent. The Debtor's schedules show total assets of $123,842,190 and total liabilities of $76,421,661. The Debtors' exclusive period to file a chapter 11 plan expired on March 7, 2008. On March 28, 2008, the Court dismissed the chapter 11 cases of Levitz II (Levitz Home Furnishings Inc., and its remaining six debtor-affiliates). (Levitz Bankruptcy News, Issue No. 44; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). LINENS N THINGS: Court Approves Second Round of Closing Sales ------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware authorized Linens 'n Things, Inc., and its debtor-affiliates to conduct the second round of their store closing sales of their liquidation assets, which include merchandise and owned furniture fixture and equipment, at their 52 closing stores. Judge Mary F. Walrath held that all objections to the Debtors' request, to the extent not previously withdrawn, resolved or granted, are denied. The Debtors have chosen a joint venture of Hilco Merchant Resources, LLC, and Gordon Brothers Retail Partners, LLC, to serve as the stalking horse bidder, and eventually as winning agent, in connection with the Closing Sales, pursuant to a Court- approved agency agreement dated as of August 13, 2008, entered into with Linens Holding Co., and GE Retail Finance Group. According to the TheDeal.com, Hilco/Gordon was selected as the stalking horse bidder, when the Debtors chose their offer to pay 96.5% of the inventory's value superior to the other initial offers. Two other groups, however, joined the auction -- a joint venture comprised of the Tiger Capital Group and SB Capital Group LLC, and another venture by Great American Ventures LLC and Hudson Capital Partners LLC. "There was spirited bidding at the auction and as a result the guaranteed percentage payable under the agency agreement was increased from 96.5 percent to 102.6 percent, which resulted in an increase in 3.3 million to the estate and Hilco/Gordon was declared the highest bidder," Michael J. Merchant, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, told Judge Walrath at the August 14 hearing. Mr. Merchant said that the initial overbid was 97.1% at the auction and approximately thirty bids were submitted to get to the 102.6% of the cost value. Bids were allowed in 0.1% percent increments. While there were initially three groups of bidders, Great American/Hudson actually ended up teaming up with Tiger and SB Capital at the auction. Bloomberg News reports that Hilco/Gordon assured the Debtors that they will collect at least $55,900,000 from the sales, after deducting sales costs and expenses. Judge Walrath has authorized the Debtors and Hilco/Gordon to conduct the Closing Sales without further Court order as provided by the Agency Agreement and the sale guidelines, and to sell the Liquidation Assets free and clear of all liens and claims. Except as provided for in the Agency Agreement, the Closing Sales will be conducted notwithstanding any restrictive provision of any lease and agreement or non-bankruptcy laws, provided that nothing in the order will impact any objection a landlord may have to the assumption, assignment or rejection of their lease. Any local governmental unit may assert a reserved dispute over the enforceability of a liquidation sale law by notifying the Debtors and the Agent's counsel within 20 days. If the parties are unable to resolve the Reserved Dispute, either party may file a motion with the Court requesting a resolution. Judge Walrath maintained that the timely filing of a Resolution Motion, will not affect the finality of the order or interfere with the Agent's ability to conduct the Closing Sales. Disbursement of the guaranteed amount, recovery amount and the net FF&E proceeds under the Agency Agreement, will be done in accordance with the DIP order, provided that the Debtors will segregate $8,300 on account of estimated taxes owed to Rod the tax collector for Brevard County, in Florida, pending resolution of the tax amounts due and owing. Absent further order, the Agent will not be authorized to supplement the Closing Sales with additional goods not owned by the Debtors, the Court reminded the Debtors and parties-in- interest. To the extent that the disposition of the Liquidation Assets would constitute the sale of an interest in a consumer credit transaction that is subject to the Truth in Lending Act or an interest in a consumer credit contract, the purchaser will remain subject to all claims and defenses that are related to that consumer credit transaction. Gift certificates, gift cards, and merchandise credits issued by the Debtors prior to the commencement of the Closing Sales will be accepted and honored by the Agent, Judge Walrath said. She added that transactions contemplated by the Agency Agreement are not subject to avoidance pursuant to Section 363(n). Clifton, New Jersey-based Linens 'n Things, Inc. -- http://www.lnt.com/-- is the second largest specialty retailer of home textiles, housewares and home accessories in North America operating 589 stores in 47 U.S. states and seven Canadian provinces as of Dec. 29, 2007. The company is a destination retailer, offering one of the broadest and deepest selections of high quality brand-name as well as private label home furnishings merchandise in the industry. Linens 'n Things has some 585 superstores (33,000 sq. ft. and larger), emphasizing low-priced, brand-name merchandise, in more than 45 states and about seven Canadian provinces. Brands include Braun, Krups, Calphalon, Laura Ashley, Croscill, Waverly, and the company's own label. Linens 'n Things was acquired by private equity firm Apollo Management in 2006. On May 2, 2008, these Linens entities filed chapter 11 petition (Bankr. D. Del.): Linens Holding Co. (08-10832), Linens 'n Things, Inc. (08-10833), Linens 'n Things Center, Inc. (08-10834), Bloomington, MN., L.T., Inc. (08-10835), Vendor Finance, LLC (08- 10836), LNT, Inc. (08-10837), LNT Services, Inc. (08-10838), LNT Leasing II, LLC (08-10839), LNT West, Inc. (08-10840), LNT Virginia LLC (08-10841), LNT Merchandising Company LLC (08-10842), LNT Leasing III, LLC (08-10843), and Citadel LNT, LLC (08-10844). Judge Christopher S. Sontchi presides over the case. The Debtors' bankruptcy counsels are Mark D. Collins, Esq., John H. Knight, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., provide Linens 'n Things with bankruptcy counsel. The Debtors' special corporate counsel are Holland N. O'Neil, Esq., Ronald M. Gaswirth, Esq., Stephen A. McCaretin, Esq., Randall G. Ray, Esq., and Michael S. Haynes, Esq., at Morgan, Lewis & Bockius, LLP. The Debtors' restructuring management services provider is Conway Del Genio Gries & Co., LLC. The Debtors' CRO and Interim CEO is Michael F. Gries, co-founder of Conways Del Genio Gries & Co., LLC. The Debtors' claims agent is Kurtzman Carson Consultants, LLC. The Debtors' consultants are Asset Disposition Advisors, LLC, and Protivit, Inc. The Debtors' investment bankers are Financo, Inc., and Genuity Capital Markets. (Bankruptcy News About Linens 'n Things; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) LINENS N THINGS: Court Approves Oct. 6 as Claims Bar Date --------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware has established for Linens 'n Things, Inc., and its debtor- affiliates: -- October 6, 2008, at 5:00 p.m. Prevailing Pacific Time, as general claims bar date for filing prepetition claims; -- the later of: * the General Bar Date; or * 20 days from the date the Debtors provided notice of the amendment as specific bar date for filing affected claims in the event the Debtors amend their schedules of liabilities; -- the later of: * the General Bar Date; * the date the Debtors are authorized to reject contracts or leases; or * 30 days after an order or notice is provided as the specific bar date for filing claims in connection with the Debtors' rejection of various executory contracts and unexpired leases; -- October 29, 2008, at 5:00 p.m. Prevailing Pacific Time as the deadline for all governmental units to file a proof of claim; The Court has also approved the form and manner for filing proofs of claim, which the Debtors prepared based on Official Bankruptcy Form No. 10, and the proposed form of notice. Clifton, New Jersey-based Linens 'n Things, Inc. -- http://www.lnt.com/-- is the second largest specialty retailer of home textiles, housewares and home accessories in North America operating 589 stores in 47 U.S. states and seven Canadian provinces as of Dec. 29, 2007. The company is a destination retailer, offering one of the broadest and deepest selections of high quality brand-name as well as private label home furnishings merchandise in the industry. Linens 'n Things has some 585 superstores (33,000 sq. ft. and larger), emphasizing low-priced, brand-name merchandise, in more than 45 states and about seven Canadian provinces. Brands include Braun, Krups, Calphalon, Laura Ashley, Croscill, Waverly, and the company's own label. Linens 'n Things was acquired by private equity firm Apollo Management in 2006. On May 2, 2008, these Linens entities filed chapter 11 petition (Bankr. D. Del.): Linens Holding Co. (08-10832), Linens 'n Things, Inc. (08-10833), Linens 'n Things Center, Inc. (08-10834), Bloomington, MN., L.T., Inc. (08-10835), Vendor Finance, LLC (08- 10836), LNT, Inc. (08-10837), LNT Services, Inc. (08-10838), LNT Leasing II, LLC (08-10839), LNT West, Inc. (08-10840), LNT Virginia LLC (08-10841), LNT Merchandising Company LLC (08-10842), LNT Leasing III, LLC (08-10843), and Citadel LNT, LLC (08-10844). Judge Christopher S. Sontchi presides over the case. The Debtors' bankruptcy counsels are Mark D. Collins, Esq., John H. Knight, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., provide Linens 'n Things with bankruptcy counsel. The Debtors' special corporate counsel are Holland N. O'Neil, Esq., Ronald M. Gaswirth, Esq., Stephen A. McCaretin, Esq., Randall G. Ray, Esq., and Michael S. Haynes, Esq., at Morgan, Lewis & Bockius, LLP. The Debtors' restructuring management services provider is Conway Del Genio Gries & Co., LLC. The Debtors' CRO and Interim CEO is Michael F. Gries, co-founder of Conways Del Genio Gries & Co., LLC. The Debtors' claims agent is Kurtzman Carson Consultants, LLC. The Debtors' consultants are Asset Disposition Advisors, LLC, and Protivit, Inc. The Debtors' investment bankers are Financo, Inc., and Genuity Capital Markets. (Bankruptcy News About Linens 'n Things; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) LINENS N THINGS: Court OK Waiver of Claims Against Landlords ------------------------------------------------------------ The United States Bankruptcy Court for the District of Delaware has authorized the Linens 'n Things, Inc., and its debtor- affiliates to waive, in their sole discretion, potential causes of action against landlords, who are counter-parties to the Remaining Leases. Representing the Debtors, Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., told the Court that while the Debtors' proposal to have authorization to waive certain preference actions, claims under Section 547 and 550 of the Bankruptcy Code, against certain of their landlords is somewhat "unique", the proposal is necessary in order to comply with the terms of their $700,000,000 debtor-in-possession financing credit facility. Among the various provisions of the DIP amendment approved by Judge Sontchi in July is that no later than August 1 of this year the Debtors were tasked with having to collect written consents with respect to 80% of the Debtors' go forward leases. The failure of the Debtors to obtain the required consents from landlords -- that would get them to enter into stipulations to extend the Debtors' 265(d)(4) period currently set to expire in those locations on November 28th of this year, through March 31, 2009 -- would have constituted a default to the DIP amendment. Accordingly, the Debtors agreed to seek Court's authority waive any potential preference claims against them as a motivation to enter into the stipulations. Mr. Madron assured Judge Walrath that the Debtors made no guarantees to the landlords outside the fact that Linens 'n Things would make its best efforts to seek approval of the Motion. Mr. Madron added that no formal objections have been filed to the proposal. The ad hoc committee of noteholders, however, requested that they, like the unsecured creditors committee, be consulted in connection with the waivers of claims against the landlords. Upon Judge Walrath's entry of the order, the Debtors in their sole discretion, following consultation with the Creditors Committee and the ad hoc noteholders group, may waive preference claims against certain of the landlords that gave written consents to the Debtors. Mr. Madron shared that various landlords requested various incentives, including payment of certain May stub rent, as a condition to entering into the stipulations. The Debtors, he relates, did not agree to these terms in the exercise of their business judgment. Clifton, New Jersey-based Linens 'n Things, Inc. -- http://www.lnt.com/-- is the second largest specialty retailer of home textiles, housewares and home accessories in North America operating 589 stores in 47 U.S. states and seven Canadian provinces as of Dec. 29, 2007. The company is a destination retailer, offering one of the broadest and deepest selections of high quality brand-name as well as private label home furnishings merchandise in the industry. Linens 'n Things has some 585 superstores (33,000 sq. ft. and larger), emphasizing low-priced, brand-name merchandise, in more than 45 states and about seven Canadian provinces. Brands include Braun, Krups, Calphalon, Laura Ashley, Croscill, Waverly, and the company's own label. Linens 'n Things was acquired by private equity firm Apollo Management in 2006. On May 2, 2008, these Linens entities filed chapter 11 petition (Bankr. D. Del.): Linens Holding Co. (08-10832), Linens 'n Things, Inc. (08-10833), Linens 'n Things Center, Inc. (08-10834), Bloomington, MN., L.T., Inc. (08-10835), Vendor Finance, LLC (08- 10836), LNT, Inc. (08-10837), LNT Services, Inc. (08-10838), LNT Leasing II, LLC (08-10839), LNT West, Inc. (08-10840), LNT Virginia LLC (08-10841), LNT Merchandising Company LLC (08-10842), LNT Leasing III, LLC (08-10843), and Citadel LNT, LLC (08-10844). Judge Christopher S. Sontchi presides over the case. The Debtors' bankruptcy counsels are Mark D. Collins, Esq., John H. Knight, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., provide Linens 'n Things with bankruptcy counsel. The Debtors' special corporate counsel are Holland N. O'Neil, Esq., Ronald M. Gaswirth, Esq., Stephen A. McCaretin, Esq., Randall G. Ray, Esq., and Michael S. Haynes, Esq., at Morgan, Lewis & Bockius, LLP. The Debtors' restructuring management services provider is Conway Del Genio Gries & Co., LLC. The Debtors' CRO and Interim CEO is Michael F. Gries, co-founder of Conways Del Genio Gries & Co., LLC. The Debtors' claims agent is Kurtzman Carson Consultants, LLC. The Debtors' consultants are Asset Disposition Advisors, LLC, and Protivit, Inc. The Debtors' investment bankers are Financo, Inc., and Genuity Capital Markets. (Bankruptcy News About Linens 'n Things; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) LODGENET INTERACTIVE: Appoints Two Members to Board of Directors ---------------------------------------------------------------- LodgeNet Interactive Corporation announced the addition of Scott Kirby and Marty Abbott to its Board of Directors. Mr. Kirby is president of US Airways. Prior to becoming president in 2006, Mr. Kirby served as US Airways' executive vice president, sales and marketing, a position he had previously held at America West Airlines. In 2005, he played a critical role in the merger efforts between America West and US Airways. As president of US Airways, Mr. Kirby oversees all of the airline's operations, including flight operations, safety and regulatory compliance, maintenance, in-flight services, airport customer service and reservations. Mr. Kirby's oversight at the airline also encompasses information technology, sales and marketing, labor relations and scheduling/planning. "Scott Kirby is a dedicated and extremely talented executive who brings a wealth of business experience to the board, especially with regard to the unique issues of the travel industry," Scott C. Petersen, Chairman, President and CEO of LodgeNet, said. "We are delighted to welcome Scott. His remarkable career and solid business skills will be a valuable addition to the LodgeNet Board of Directors," Mr. Petersen added. Mr. Kirby joined America West in 1995 as senior director, scheduling and planning and was promoted to vice president, planning in October 1997. Kirby was named vice president, revenue management in May 1998 and senior vice president, e-business in early 2000. Prior to joining America West, Kirby worked for Sabre Decision Technologies, a subsidiary of AMR Corp, and worked at the Pentagon prior to SDT. Kirby earned bachelor degrees in computer science and operations research from the U.S. Air Force Academy and a Master of Science degree in operations research from George Washington University. On the other hand, Mr. Abbott brings a distinguished track record of working with some of the world's leading technology organizations. He was senior vice president of technology and CTO for eBay and its subsidiary companies during eBay's formative high growth years of 1999 though 2005. After his tenure at eBay, Mr. Abbott served as chief operating officer of Quigo Technologies, a developer of online marketing technologies which was purchased by AOL in 2007, and he is currently a partner at AKF Consulting, an advisory group to technology companies. He has also held operational and engineering positions at Motorola and Gateway. "Marty Abbott is an accomplished technologist with broad expertise in the world of business," Scott C. Petersen, chairman, president & CEO of LodgeNet, said. "We are extremely pleased to welcome Marty to our Board. He will be a great resource for our company as we look to build upon our technological leadership position in media and connectivity solutions." Mr. Abbott also serves on the board of OnForce, the world's largest marketplace for IT and consumer electronics service professionals. He has an M.S. in Computer Engineering from the University of Florida, a B.S. in Computer Science from the United States Military Academy at West Point and is a graduate of the Harvard Business School's Executive Education Program. About LodgeNet Interactive Based in Sioux Falls, South Dakota, LodgeNet Interactive Corp. (Nasdaq: LNET) -- http://www.lodgenet.com/-- provided media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms representing 9,900 hotel properties worldwide in addition to healthcare facilities throughout the United States. The company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. At June 30, 2008, the company's consolidated balance sheet showed $656.5 million in total assets and $728.8 million in total liabilities, resulting in a $72.3 million stockholders' deficit. LODGENET INTERACTIVE: S&P Cuts Rating to 'B'; Off Watch ------------------------------------------------------- Standard & Poor's Rating Services lowered its corporate credit and issue-level ratings on LodgeNet Interactive Corp. (formerly LodgeNet Entertainment Corp.) and removed them from CreditWatch, where they were placed with negative implications June 13, 2008. The corporate credit rating was lowered to 'B' from 'B+', and the rating outlook is stable. "The downgrade reflects LodgeNet's thin cushion of compliance with bank covenants in the second quarter of 2008--and covenants tighten twice in 2009," said Standard & Poor's credit analyst Jeanne Mathewson. "It also reflects the difficulties that we believe the company faces in the near-to-intermediate term as the economy and hotel occupancy rates continue to struggle." LodgeNet had a thin margin of covenant compliance as of June 30, 2008, with leverage at 4.31x (using pro forma EBITDA as defined in the bank agreement), compared with its 4.75x leverage covenant. The covenant progressively tightens to 4.5x on Sept. 30, 2008, 4.25x on March 31, 2009, and a quarter turn semiannually thereafter until September 2010. The company will need to improve EBITDA or pay down debt to maintain compliance with covenants. "Revenue and EBITDA increased 1.8% and 3.4%, respectively, in the second quarter of 2008. Growth in Hotel Services and System Sales outpaced the decline in Guest Entertainment Revenue. We expect the decline in Guest Entertainment Revenue to continue for the remainder of 2008 as a result of lower hotel occupancy rates and persistent consumer caution. Pro forma debt to EBITDA improved in the quarter to 4.2x for the 12 months ended June 30, 2008, from 4.4x for the 12 months ended March 31, 2008, primarily due to the repayment of roughly $14 million in debt. The company's ability to further reduce principal will rely heavily on discretionary cash flow. Pro forma EBITDA coverage of interest was 3.4x for the 12 months ended June 30, 2008," S&P explains. "The company's discretionary cash flow was modestly positive during the 12 months ended June 30, 2008. We expect the company to generate positive discretionary cash flow for the year. In December 2007, the company authorized a $15 million share repurchase plan (the full amount permitted under its senior credit facility). As of June 30, 2008, $9.3 million remained to be repurchased under the program. We view the share repurchases unfavorably, given the tightening margin of financial covenant compliance." MANTIFF JACKSON: Case Summary & 40 Largest Unsecured Creditors -------------------------------------------------------------- Lead Debtor: Mantiff Jackson Hospitality, LLC aka Jackson Inn & Conference Center Attn: Mantiff Management, Inc. 387 Passaic Ave. Fairfield, NJ 07004 Bankruptcy Case No.: 08-26038 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Mantiff-Jahnavi Zanesville Hospitality, 08-26040 LLC Chapter 11 Petition Date: August 25, 2008 Court: District of New Jersey (Newark) Debtors' Counsel: Joseph J. DiPasquale, Esq. Email: jdipasquale@trenklawfirm.com Trenk, DiPasquale, Webster, Della Fera & Sodono, P.C. 347 Mt. Pleasant Ave., Ste. 300 West Orange, NJ 07052 Tel: (973) 243-8600 Fax: (973) 243-8677 http://www.trenklawfirm.com/ Mantiff Jackson Hospitality, LLC's Financial Condition: Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 A. A copy of Mantiff Jackson Hospitality, LLC's petition is available for free at: http://bankrupt.com/misc/njb08-26038.pdf B. A copy of Mantiff-Jahnavi Zanesville Hospitality, LLC's petition is available for free at: http://bankrupt.com/misc/njb08-26038.pdf MASTRO'S RESTAURANTS: S&P Affirms 'B-' Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Mastro's Restaurants LLC to negative from stable. "At the same time, we affirmed the ratings, including the 'B-' corporate credit rating, on the Woodland Hills, Calif.-based company," S&P says. "The outlook revision reflects Mastro's weaker-than-expected operating performance," said Standard & Poor's credit analyst Mariola Borysiak, "and our belief that prolonged economic weakness will hinder material improvement in the company's profitability." This could lead to higher leverage and declining liquidity. MERCURY COMPANIES: Files for Chapter 11 Protection in Colorado -------------------------------------------------------------- Mercury Companies Inc. filed for Chapter 11 protection with the U.S. Bankruptcy Court for the District of Colorado (Denver). The case number is 08-23125. Erik Larson of Bloomberg News states that the Debtor sought for protection from its creditors due to the collapse of the U.S. housing market. Mercury's lawyer, Daniel Garfield, Esq., said in court papers that it operated through its subsidiaries in a number of states, but has since wound down or sold its operations, Bloomberg notes. Mercury said it ceased operations in some states in July and in June, three units sought permission to liquidate in a California bankruptcy court, Bloomberg adds. Mercury's biggest unsecured creditor is First American Corp., with $17 million in claims, Bloomberg notes. The claim may be reduced by a contract dispute according to Mercury, Bloomberg relates. Bloomberg states that Mercury disclosed up to $100 million in both estimated assets and debts. About Mercury Companies Mercury Companies Inc. operates mortgage companies in almost 250 offices in six states. It has more than 2,500 workers. The company had offices in Colorado, Arizona, California, Texas, Oregon and Utah. MERVYN'S LLC: Taps Richards Layton as Bankruptcy Co-Counsel ----------------------------------------------------------- Mervyn's LLC and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Richards, Layton & Finger, P.A. as their co-counsel. Richards Layton will: (a) advise the Debtors of their rights, powers and duties as Debtors and Debtors-in-Possession in the continued operation of their business and management of their properties; (b) take all necessary actions to protect and preserve the Debtors' estates, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiations of disputes in which the Debtors are involved, and the preparations of objections to claims filed against the Debtors' estates; (c) prepare on behalf of the Debtors all necessary motions, applications, answers, orders, reports and papers in connection with the administration of the Debtors' estates; (d) attend meetings and negotiations with representatives of creditors, equity holders or prospective investors of acquirers and other parties-in-interest; (e) appear before the Court, any appellate courts and the Office of the United States Trustee to protect the interests of the Debtors; (f) pursue approval of confirmation of a plan of reorganization and approval of the corresponding solicitation procedures and disclosure statement; and (g) perform all other necessary legal services in connection with the Bankruptcy cases. The principal professionals and paraprofessionals designated to represent the Debtors and their current standard hourly rates are: Mark D. Collins $610 Daniel J. DeFranceschi $550 Christopher M. Samis $275 Ann Jerominski $185 The firm will be reimbursed for reasonable, out-of-pocket expenses. Prior to the bankruptcy filing, Richards Layton rendered legal services to the Debtors in connection with the preparation and commencement of their cases. As a result of the services rendered, the firm received a $175,000 retainer as payment of prepetition charges. The Debtors propose that the retainer paid to Richard Layton be treated as an evergreen retainer to be held as security throughout the Debtors' bankruptcy cases until expenses and fees are awarded by final order. Mark D. Collins, Esq., a director at Richards Layton, 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). About Mervyns LLC Headquartered in the San Francisco Bay Area, Mervyns LLC -- http://www.mervyns.com/-- provides a mix of top national brands and exclusive private labels. Mervyns has 176 locations in seven states. Mervyns stores have an average of 80,000 retail square feet, smaller than most other mid-tier retailers and easier to shop, and are located primarily in regional malls, community shopping centers, and freestanding sites. The company and its affiliates filed for Chapter 11 protection on July 29, 2008, (Bankr. D. Del. Lead Case No.: 08-11586). Howard S. Beltzer, Esq., and Wendy S. Walker, Esq., at Morgan Lewis & Bockius LLP, and Mark D. Collins, Esq., Daniel J. DeFranceschi, Esq., Christopher M. Samis, Esq. and L. Katherine Good, Esq., at Richards Layton & Finger P.A., represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The Debtors' financial advisor is Miller Buckfire & Co. LLC. Mervyn's LLC has estimated assets of $500,000,000 to $1,000,000,000 and estimated debts of $500,000,000 to $1,000,000,000 when it filed for bankruptcy. MERVYN'S LLC: Wants to Hire Miller Buckfire as Financial Advisor ---------------------------------------------------------------- Mervyn's LLC and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Miller Buckfire & Co., LLC as their financial advisor and investment banker. In early July 2008, the Debtors retained Miller Buckfire as their financial advisor to analyze their current liquidity and projected cash flows, assist them in evaluating their restructuring and other strategic alternatives, and conduct a comprehensive process to secure their debtor-in-possession financing. As a result of this prepetition work performed on behalf of the Debtors, Miller Buckfire acquired significant knowledge of the Debtors and their estates and is now intimately familiar with the Debtors' financial affairs, debt structure, operations and related matters, says Charles R. Kurth, executive vice president and chief financial and administrative officer of Mervyn's Holdings, LLC. Miller Buckfire will perform these services for the Debtors: (a) advise and assist the Debtors in structuring and effectuating the financial aspects of any restructuring, financing or sale transaction or transactions proposed to be undertaken by the Debtors; (b) provide financial advise and assistance in developing and seeking approval of a reorganization plan, including participating in negotiations with entities affected by the plan; (c) identify, solicit and negotiate with potential lenders or investors in connection with any financing or potential acquirers in connection with any sale; and (d) participate in hearings before the Court with respect to the matters upon which Miller Buckfire has provided advise. In exchange for its services, Miller Buckfire will be paid: (i) a monthly advisory fee of $150,000 for each month during the term of the engagement, provided that one-half of each Monthly Advisory Fee -- $75,000 -- paid in respect of any months following the sixth month of the Engagement will be credited against any restructuring fee, sale transaction fee or financing fee. (ii) a restructuring transaction fee of $2,500,000 contingent upon the consummation of a Restructuring and payable at the closing any transaction; (iii) a sale transaction fee of 1% of the Aggregate Consideration of any sale, provided that the minimum Sale Transaction Fee in connection with any sale will be $500,000. Miller Buckfire has not been engaged to conduct a liquidation or going out of business sale, and accordingly, will not be paid a Sale Transaction Fee for a going-out-of-business sale, liquidation or related bulk transfer of inventory. (iv) if the Debtors consummate any Financing Transactions, a financing fee of: -- 1% of the gross proceeds of any indebtedness issued that is secured by a first lien; -- 3% of the gross proceeds of any indebtedness issued that is secured by a second or more junior lien, is unsecured and is subordinated; and -- 5% of the gross proceeds of any equity or equity-linked securities or obligations issued. However, the firm will not be entitled to any of these compensation in connection with any Financing involving the implementation by the Debtors of any junior lien program with any of the Debtors' vendors or provided by one or more of the Debtors' equity holders other than an investment made in the form of a debtor-in-possession loan as part of a case commenced under Chapter 11 or made in connection with, and as a part of, a Restructuring. Miller Buckfire will be entitled to a $500,000 DIP financing fee, in connection with the execution of a commitment for DIP financing. (v) regardless of whether any transaction occurs, the Debtors will promptly reimburse Miller Buckfire for all reasonable out-of-pocket expenses and for any sales, use or similar taxes arising in connection with any matter under the agreement. (vi) The Debtors have agreed to indemnify, hold harmless and defend Miller Buckfire and its affiliates and their directors, officers, members, managers, shareholders, employees, agents and controlling persons and their successors. Prior to the bankruptcy filing, the Debtors paid Miller Buckfire $180,000 for fees and expense reimbursement and a $500,000 financing fee in connection with the pending DIP financing. Although Miller Buckfire does not charge for its services on an hourly basis, the firm will nevertheless maintain records of time spent by its professionals in connection with the rendering of services for the Debtors by category and nature of the services rendered. Miller Buckfire seeks the Court's approval to maintain time records in half-hour increments. As is customary in Delaware and other jurisdictions, the Debtors will indemnify, hold harmless and defend the firm under certain circumstances. Stuart E. Erickson, managing director of Miller Buckfire & Co., LLC, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, a modified by Section 1107(b). About Mervyns LLC Headquartered in the San Francisco Bay Area, Mervyns LLC -- http://www.mervyns.com/-- provides a mix of top national brands and exclusive private labels. Mervyns has 176 locations in seven states. Mervyns stores have an average of 80,000 retail square feet, smaller than most other mid-tier retailers and easier to shop, and are located primarily in regional malls, community shopping centers, and freestanding sites. The company and its affiliates filed for Chapter 11 protection on July 29, 2008, (Bankr. D. Del. Lead Case No.: 08-11586). Howard S. Beltzer, Esq., and Wendy S. Walker, Esq., at Morgan Lewis & Bockius LLP, and Mark D. Collins, Esq., Daniel J. DeFranceschi, Esq., Christopher M. Samis, Esq. and L. Katherine Good, Esq., at Richards Layton & Finger P.A., represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The Debtors' financial advisor is Miller Buckfire & Co. LLC. Mervyn's LLC has estimated assets of $500,000,000 to $1,000,000,000 and estimated debts of $500,000,000 to $1,000,000,000 when it filed for bankruptcy. MLMT COMMERCIAL: Fitch Affirms Ratings on Series 2007-C1 Loans -------------------------------------------------------------- Fitch Ratings has affirmed MLMT Commercial Mortgage Trust, series 2007-C1, as: -- $50.1 million class A-1 at 'AAA'; -- $298.9 million class A-2 at 'AAA'; -- $200 million class A-2FL at 'AAA'; -- $322.2 million class A-3 at 'AAA'; -- $130 million class A-3FL at 'AAA'; -- $90.3 million class A-SB at 'AAA'; -- $442.2 million class A-4 at 'AAA'; -- $1.3 billion class A-1A at 'AAA'; -- $405 million class AM at 'AAA'; -- $134.1 million class AJ at 'AAA'; -- $200 million class AJ-FL at 'AAA'; -- Interest-only class X at 'AAA'; -- $86.1 million class B at 'AA'; -- $40.5 million class C at 'AA-'; -- $45.6 million class D at 'A'; -- $45.6 million class E at 'A-'; -- $50.6 million class F at 'BBB+'; -- $40.5 million class G at 'BBB'; -- $40.5 million class H at 'BBB-'; -- $15.2 million class J at 'BB+'; -- $15.2 million class K at 'BB'; -- $10.1 million class L at 'BB-'; -- $10.1 million class M at 'B+'; -- $10.1 million class N at 'B'; -- $5.1 million class P at 'B-'. Fitch does not rate the $60.8 million class Q. The affirmations are the result of stable performance and minimal paydown since issuance. As of the July 2008 distribution date, the pool's certificate balance has decreased 0.2% to $4.04 billion from $4.05 billion at issuance. There have been no delinquencies since issuance. 159 loans (84%) are interest-only or partial interest-only. The Encanto - SLB Puerto Rico retail portfolio, located in Puerto Rico (0.4%), maintains an investment-grade shadow rating. The loan is secured by an eighteen property portfolio totaling 66,101 square feet, and remains 100% occupied by Encanto Restaurants, Inc. The servicer reported debt service as of year-end (YE) 2007 is 1.77 times (x) as compared to 1.89x at issuance. The largest loan (9.5%) is collateralized by 78 rental housing communities located in 66 cities across eight states. Occupancy as of March 2008 was 94.8% compared to 94.4% at issuance. The servicer reported YE 2007 DSCR was 1.55x compared to 1.52x at issuance. The second largest loan (8.2%) is secured by a 79 rental housing communities located in 61 cities across eight states. Occupancy as of March 2008 was 95.2% compared to 93.4% at issuance. The servicer reported YE 2007 DSCR was 1.57x compared to 1.52x at issuance. MORGAN STANLEY: Fitch Affirms B- Rating on $15.9MM Class L Certs. ----------------------------------------------------------------- Fitch Ratings affirms Morgan Stanley commercial mortgage pass- through certificates, series 1998-HF2, as: -- Interest only class X at 'AAA'; -- $52.2 million class D at 'AAA'; -- $21.2 million class E at 'AAA'; -- $23.8 million class F at 'AAA'; -- $18.5 million class G at 'AA-'; -- $10.6 million class H at 'A'; -- $21.2 million class J at 'BBB-' -- $10.6 million class K at 'BB'; and -- $15.9 million class L at 'B-'. In addition, Fitch maintains the $10.6 million class M at 'CCC/DR3'. Fitch does not rate the $0.4 million class N certificates. Classes A-1, A-2, B, and C have been paid in full. The affirmations are based on the high credit enhancement in light of significant exposure to loans maturing in 2008 (39%). Currently, six loans (10.5%) are defeased, including the third largest loan (5.7%) that remains in the pool. As of the August 2008 distribution date, the transaction has paid down 75% to $184.8 million from $1 billion at issuance. Three loans are currently with the special servicer due to maturity balloon default. The second largest loan remaining in the pool (7.3%) was transferred on August 11 after the borrower indicated they do not have refinancing capital available. The loan is secured by a 1.1 million square foot warehouse in Arlington, Texas. Based on current cash flow and the low loan per square foot ($17), losses are not expected at this time. The second loan (2.26%) in special servicing is secured by a 117,000 sf retail property in Marietta, Georgia. The loan's anticipated repayment date was in March 2008, and the interest rate increased from 7.26% to 10.26%, substantially increasing debt service. The borrower has been unable to pay the increased debt service amount. Additionally, in light of tenant vacancies, income has dropped and the property stands at 28% occupancy. A recent broker opinion of value indicates that losses are likely. The final specially serviced loan (0.24%) is secured by a 37,000 sf warehouse in Arlington, Texas. The sponsor to the loan passed away and his heirs are running his assets through probate. The probate hearing is on August 25, at which time the family expects to pay off the loan. No losses are expected at this time. MORRIS PUBLISHING: Cut to 'CCC+'; S&P Sees Covenant Breach ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and issue-level ratings on Augusta, Ga.-based Morris Publishing Group LLC. The corporate credit rating was lowered to 'CCC+' from 'B-', and the rating outlook is negative. "The ratings downgrade reflects our concern around the current pace of revenue and EBITDA declines at Morris' newspaper publishing assets, and the challenges the company faces in rightsizing its cost structure to meaningfully stem near-term EBITDA declines," explained Standard & Poor's credit analyst Liz Fairbanks. "Given the pace of declines -- and in the absence of an amendment -- we believe that the company will violate its 6.5x total leverage covenant measured for the 12 months ending Sept. 30, 2008." "The 'CCC+' corporate credit rating reflects our concern that, even with an amendment to financial covenants, the company will be unable to sustain its current capital structure over the next several quarters without a significant improvement in the operating environment. While we believe an amendment to covenants is possible given the additional resources that Morris Publishing's parent company, Morris Communications (guarantor of bank facility), could bring to the table, we are concerned that the outcome would result in restricted revolver capacity and additional liquidity pressures," S&P explains. The rating on Morris Publishing is based on the consolidated credit quality of Morris Communications Co. LLC and its restricted subsidiaries, which guarantee Morris Publishing's senior secured credit facilities. (Morris Publishing's subordinated notes, however, are not guaranteed by the parent company.) Morris Publishing accounts for the majority of Morris Communications' cash flow. In addition to Morris Publishing, other restricted subsidiaries are involved in outdoor advertising and radio broadcasting, as well as magazine, book, and specialty publishing. MRS FIELDS: Court Approves All First Day Motions ------------------------------------------------ Mrs. Fields' Original Cookies, Inc. received bankruptcy court approval of all of its first day motions, including approval to: -- continue to pay employee salaries, wages, and benefit programs; -- pay vendors in the normal course of business for goods and services provided to the company; and -- maintain uninterrupted delivery of products and services to the company's franchisees and customers. Included in approvals was the Court's authorization to access the necessary funds from the approximately $90 million in previously restricted deal proceeds to fund business operations during the Chapter 11 process. The company also is pursuing a $10 million credit line that will be used, in conjunction with cash flows from normal operations, to support all of its go-forward operations and working capital needs upon emergence from Chapter 11. "We were very pleased with the Courts positive response to our first day motions. Receiving approval so quickly places Mrs. Fields in the best possible position as we move toward completing our restructuring. We fully expect to receive Court approval of our reorganization plan at the scheduled October 2 Confirmation Hearing and to emerge from these proceedings a stronger, more viable company with a drastically improved balance sheet. With our first day motions behind us, we can now focus our attention on finalizing post-emergence plans leveraging our new financing and equity structures to drive results for our franchising, gifting, and branded retail businesses," said Michael Ward, Interim Co- Chief Executive Officer. About Mrs. Fields' Headquartered in Salt Lake City, Utah, Mrs. Fields' Original Cookies, Inc. -- http://www.mrsfields.com/-- operates a chain of cookie and baked goods. The company and 13 of its affiliates filed for Chapter 11 protection on Aug. 24, 2008 (Bankr. D. Del. Lead Case No.08-11953). David R. Hurst, Esq., at Montgomery McCracken Walker & Rhoads LLP, represents the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Services LLC as their claims agent. When the Debtors filed for protection from their creditors, they list assets between $500,000 and $1 million, and debts between $100 million and $500 million. MRS FIELDS: Plan Confirmation Hearing Set For October 2 ------------------------------------------------------- The Hon. Peter J. Walsh of the United States Bankruptcy Court for the District of Delaware will convene a hearing on Oct. 2, 2008, at 3:00 p.m., to consider approval of the adequacy of the disclosure statement filed by Mrs. Field's Orginal Cookies Inc. and its debtor-affiliates on Aug. 15, 2008, followed by a confirmation hearing of their Chapter 11 plan of reorganization on the same date. Objections, if any, are due Sept. 25, 2008. The hearing will take place at 824 Market Street, 6th floor in Wilmington, Delaware. The Plan will pay allowed unsecured claims in full, and effectuate, without limitation, these restructuring transactions: 1. the conversion of Old Notes into a combination of cash, New Notes and 87.5% of the equity of MFOC outstanding at the effective date of the Plan; and 2. the conversion of the MFOC note into a combination of cash, 12.5% of the equity of MFOC outstanding at the effective date of the Plan and a warrant to purchase additional equity of Reorganized MFOC. Each holder of an allowed secured notes claim will be entitled to vote on the Plan. On the Effective Date, in turn for their allowed secured notes claims against each of the Debtors, holders will receive, on a pro rata basis: -- the noteholder cash; -- the new notes; and -- 87.5% of the equity of the new common equity issued and outstanding as of the effective date. Secured noteholders are expected to recovery 86.5%. The holders of an allowed MFOC note claim will be entitled to vote on the Plan. On the Effective Date, in exchange for their allowed MFOC Note Claim, Capricorn, will receive: -- 12.5% of the new common equity issued and outstanding as of the Effective Date; -- the warrant; -- a payment in the amount of $1.049 million. MFOC noteholders are expected to recover 96.4%. The holder of the allowed MFOC equity interest will be entitled to vote on the Plan. Holders will not receive any recovery under the Plan. A full-text copy of the disclosure statement for the company's prepackaged Chapter 11 plan of reorganization is available for free at http://ResearchArchives.com/t/s?3120 About Mrs. Fields' Headquartered in Salt Lake City, Utah, Mrs. Fields' Original Cookies, Inc. -- http://www.mrsfields.com/-- operates a chain of cookie and baked goods. The company and 13 of its affiliates filed for Chapter 11 protection on Aug. 24, 2008 (Bankr. D. Del. Lead Case No.08-11953). David R. Hurst, Esq., at Montgomery McCracken Walker & Rhoads LLP, represents the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Services LLC as their claims agent. When the Debtors filed for protection from their creditors, they list assets between $500,000 and $1 million, and debts between $100 million and $500 million. MSC MEDICAL: S&P Withdraws 'CCC+' Rating ---------------------------------------- Standard & Poor's Ratings Services withdrew its ratings on MSC- Medical Services Co. at the company's request. Ratings List To From -- ---- MSC-Medical Services Co. Corporate credit rating NR B-/Negative/-- Senior secured debt rating NR CCC+ Recovery rating NR 5 MW JOHNSON: Court Allows Investigation of Insiders -------------------------------------------------- The U.S. Bankruptcy Court for the District of Minnesota (St. Paul) authorized the Official Committee of Unsecured Creditors in M.W. Johnson Construction Inc.'s Chapter 11 case to investigate company insiders, William Rochelle of Bloomberg News reports. The matters that the committee is highlighting are the more than $2 million that companies owned by insiders received within three months of the bankruptcy filing and the $1.5 million that a real estate broker under common ownership received within three months of filing. The company has 250 uncompleted or unsold homes, the report noted. About M.W. Johnson Lakeville, Minnesota-based M.W. Johnson Construction Inc. -- http://www.mwjohnson.com/-- and M.W. Johnson Construction of Florida Inc. are custom homebuilders. They filed their chapter 11 petition on June 13, 2008 (Bankr. D. Minn. Case Nos. 08-32874 and 08-32876). Judge Robert J. Kressel presides over the case. Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath Nauman, represent the Debtors in their restructuring efforts. The Debtors' schedules showed $62,400,721 in total assets and $54,673,496 in total liabilities. An Official Committee of Unsecured Creditors has been appointed in this case. The Committee has retained Hinshaw & Culbertson LLP as its attorneys. NATIONAL DRY: Court Approves Sell of 28 Stores for $3 Million ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized National Dry Cleaners Inc. on Aug. 22 to sell 28 stores around Kansas City, Missouri, for about $3 million, William Rochelle of Bloomberg News reports. The sales of other locations are ongoing under a court-approved process in late July. As reported by the Troubled Company Reporter on Aug. 1, The Debtors entered into an asset purchase agreement dated July 9, 2008, with USDC Kansas City, Inc., the designated stalking-horse bidder. The sale is expected to close by Sept. 15, 2008. The report, citing court documents, say $34.6 million is owing to the secured lender. About National Dry Headquartered in Phoenix, Arizona, National Dry Cleaners Inc. -- http://www.alphillips.com/and http://www.pridecleaners.com/-- aka Delia's Cleaners Inc. operates more than 300 dry cleaning stores across the nation. The enterprise employs over 1,500 people. As of June 30, 2008, NDCI operated 231 dry cleaning stores and 6 central dry cleaning and laundry plants in nine states. Of the dry cleaning stores, 164 are drop stores, meaning that the stores do not have dry cleaning or laundry equipment on site, and 67 dry cleaning stores have the necessary equipment to perform dry cleaning and laundry services on-site. National operates under the names Tuchman Cleaners, DryClean USA, Pride Cleaners, and Al Phillips the Cleaner. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on July 7, 2008, (Bankr. D. Del. Case No.: 08-11382 to 08-11393). The Debtors selected Epiq Bankruptcy Solutions LLC as their claims, notice and balloting agent. The Debtors listed assets of $10 million to $50 million and estimated debts of $10 million to $50 million at its bankruptcy filing. NAVIGATOR CDO: S&P Affirms 'B' Rating on Class D ------------------------------------------------ Standard & Poor's Ratings Services raised its ratings on the class A-3a, A-3b, and B notes issued by Navigator CDO 2003 Ltd., a high- yield arbitrage collateralized loan obligation (CLO) managed by GE Asset Management Inc., and removed them from CreditWatch with positive implications, where they were placed on Aug. 1, 2008. Concurrently, S&P affirmed its ratings on the remaining classes from this transaction. The raised ratings reflect factors that have positively affected the credit enhancement available to support the notes. These factors include the de-levering of the transaction through the paydown of approximately 75% of the class A-1 note balance. According to the most recent trustee report (dated July 3, 2008), the class A overcollateralization ratio was 148.18%. This compares with 125.74% as of the deal's effective date. The class B overcollateralization ratio was 130.00%, compared with 117.22% at the effective date. RATINGS RAISED AND REMOVED FROM CREDITWATCH POSITIVE Navigator CDO 2003 Ltd. Rating Balance (mil. $) Class To From Current Previous ----- -- ---- ------- -------- A-3a AAA AA/Watch Pos 22.00 22.00 A-3b AAA AA/Watch Pos 16.00 16.00 B AA- A/Watch Pos 26.00 26.00 RATINGS AFFIRMED Navigator CDO 2003 Ltd. Class Rating Balance (mil. $) ----- ------ ---------------- A-1 AAA 85.859 A-2 AAA 62.000 C-1 BBB 17.000 C-2 BBB 8.000 D BB 15.000 Q-1 BBB- 10.000 Q-2 BBB- 5.333 TRANSACTION INFORMATION Issuer: Navigator CDO 2003 Ltd. Co-issuer: Navigator CDO 2003 Corp. Current manager: GE Asset Management Inc. Underwriter: Citigroup Inc. Trustee: LaSalle Bank N.A. Transaction type: Arbitrage high-yield CLO TRANCHE INFORMATION Date (M/YYYY) 7/2008 A-1 note bal. (mil. $) 85.859 A-2 note bal. (mil. $) 62.000 A-3a note bal. (mil. $) 22.000 A-3b note bal. (mil. $) 16.000 Class A O/C ratio (%) 148.18 Class B note bal. (mil. $) 26.000 Class B O/C ratio (%) 130.00 C-1 note bal. (mil. $) 17.000 C-2 note bal. (mil. $) 8.000 Class C O/C ratio (%) 116.28 D note bal. (mil. $) 15.000 Class D O/C ratio (%) 109.35 Q-1 note bal. (mil. $) 10.000 Q-2 note bal. (mil. $) 5.333 O/C -- Overcollateralization. NEWARK GROUP: S&P Affirms 'B' Credit Rating; Outlook Negative ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed all of its ratings on The Newark Group Inc., including its 'B' corporate credit rating. S&P removed the ratings from CreditWatch, where they had been placed with negative implications on April 2, 2008. The outlook is negative. "The rating affirmation reflects our expectations that earnings should improve from weak levels because of the closure of high- cost facilities, cost-reduction initiatives, as well as recent sales price increases," said Standard & Poor's credit analyst Andy Sookram. "In addition, Newark should have increased headroom under financial covenants following the amendment of its credit-linked credit agreement." The negative outlook reflects S&P's concerns regarding the weak U.S. economy that could cause a further fall off in demand and continued cost pressures. The rating on Cranford, N.J.-based Newark reflects its participation in the cyclical and mature recycled paperboard market, highly leveraged financial profile, product substitution risks, some end-market concentration, and volatile raw material and energy costs. These factors overshadow the company's solid market positions in niche paperboard markets, competitive level of vertical integration, and diversified customer base. Newark is one of the leading producers in this relatively concentrated paper segment. It is the third largest U.S. producer of tubes and cores, which exposes it to the cyclical manufacturing sector, but it has a dominant share of the U.S. laminated graphic board market, in which products are more consumer-oriented. NEW YORK RACING: Oversight Board OKs 7th Franchise Extension ------------------------------------------------------------ New York's Non-Profit Racing Oversight Board granted the New York Racing Association Inc. its seventh temporary franchise extension, until Sept. 28, 2008, to emerge from Chapter 11 protection to make its 25-year franchise official, Paul Post of the Thoroughbred Times reports. As disclosed in the Troubled Company Reporter on Aug. 14, 2008, NYRA pushed back its exit from Chapter 11 bankruptcy to Sept. 2, 2008, as it seeks for a video-lottery operator for its Aqueduct track. NYRA was expected to emerge on June 30, 2008, but it postponed its emergence until July 31, 2008, while it made improvements to the approved franchise that permits NYRA to operate horse races for 25 years. The postponement surfaced after the state of New York reached an agreement with NYRA on June 13, 2008, that enabled the state to control its off-track betting, wherein some of the state's OTB's profits will be paid to NYRA. According to Mr. Post, the Oversight Board is responsible for checking the NYRA's business practices. The source suggests that once the franchise takes effect, the NYRA would no longer have to pay for $4.4 million worth of property tax payments due on September and October, and $500,000 worth of interest on old loans since the franchise deal provides for the waiver of all loans amounting to $200 million. NYRA President Charles Hayward disclosed that the NYRA doesn't have the resources to pay for property taxes if the bankruptcy and franchise concerns will not settled, Mr. Post recounts. Based in Jamaica, New York, The New York Racing Association Inc. aka NYRA -- http://www.nyra.com/-- operates racing tracks in Aqueduct, Belmont Park and Saratoga. The company filed for chapter 11 protection on Nov. 2, 2006 (Bankr. S.D.N.Y. Case No. 06-12618). Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, Henry C. Collins, Esq., at Cooper, Erving & Savage LLP, and Irena M. Goldstein, Esq., at Dewey Ballantine LLP represent the Debtor in its restructuring efforts. Jeffrey S. Stein of The Garden City Group Inc. serves as the Debtor's claims and noticing agent. The U.S. Trustee for Region 2 appointed an Official Committee of Unsecured Creditors and Edward M. Fox, Esq., Eric T. Moser, Esq., and Jeffrey N. Rich, Esq., at Kirkpatrick & Lockhart Preston Gates Ellis LLP, represent the Committee. When the Debtor sought protection from its creditors, it listed assets of $153 million and debts of $310 million. NEXIA HOLDINGS: June 30 Balance Sheet Upside-Down by $8,375,961 --------------------------------------------------------------- Nexia Holdings Inc.'s consolidated balance sheet at June 30, 2008, showed $3,910,593 in total assets, $12,111,986 in total liabilities, and $174,568 in minority interest, resulting in a $8,375,961 stockholders' deficit. At June 30, 2008, the company's consolidated balance sheet also showed strained liquidity with $577,620 in total current assets available to pay $3,147,477 in total current liabilities. The company reported a net loss of $768,333 on total revenue of $680,439 for the second quarter ended June 30, 2008, compared with a net loss of $868,384 on total revenue of $739,610 in the same period last year. The revenue decrease in the three months ended June 30, 2008, compared with the same period in 2007 of $59,171, or 8%, is due to a tenant leaving one of the buildings at the end of March and the closing of three retail stores in the first six months of 2008. The reduction in net loss primarily reflects reduced payroll expenses and the reduction in expenses from closing three Black Chandelier stores and decrease in promotional services. 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?3161 Going Concern Doubt Hansen Barnett & Maxwell, P.C., in Salt Lake City, expressed substantial doubt Nexia Holdings 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 has incurred cumulative losses from operations through June 30, 2008, of $27,020,252, has a working capital deficit of $2,569,857 and a stockholders deficit of $8,375,961 at June 30, 2008. In addition, the company has defaulted on several of its liabilities, has closed three retail clothing stores, and has entered into agreements to sell one of its commercial real estate properties. About Nexia Holdings Headquartered in Salt Lake City, Utah, Nexia Holdings Inc. (OTC BB: NEXA) -- http://www.nexiaholdings.com/-- is a diversified holdings company with operations in real estate, health & beauty, and fashion retail. Nexia owns a majority interest in Landis Lifestyle Salon, a hair salon built around the AVEDA(TM) product lines. Through its Style Perfect Inc. subsidiary, Nexia owns the retail and design firm Black Chandelier and its related brands. NORTH OAKLAND: Files for Bankruptcy, To Sell Assets for $9 Million ------------------------------------------------------------------ Erik Larson of Bloomberg News reports that North Oakland Medical Centers Inc. filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Michigan when it run out of cash. Bloomberg, citing papers filed with the Court, says the company is in severe financial distress, despite current management's implementation of extensive restructuring and cost-cutting measures. The company listed assets of less than $50 million and debts of more than $100 million, Bloomberg reports. The company asked the Court for permission to access $2.75 million in financing from McClaren Health Care Corp. to ensure that it operation continue by Oct. 24, 2008, Bloomberg says. The company is selling its assets in October to group of senior physicians for at least $9 million, the report says. John Graham, chief executive officer of the company, told Bloomberg that the deal is expected to close within 60 days. Mr. Graham said the sale will permit the company to become a for- profit enterprise under the new owner, the report relates. Bloomberg relates that the company defaulted in January 2008 on an required bond payment to the Pontiac Hospital Finance Authority. The company failed to (i) find other healthcare companies interested in buying its assets and (ii) secure financing from lenders -- including Healthcare Financing Corp and JPMorgan Chase & Co., the report says. About North Oakland Headquartered in Pontiac, Michigan, North Oakland Medical Centers Inc. fka Pontiac General Hospital and Medical Center -- http://www.nomc.org/-- provides healthcare services in northern Oakland County. According to Bloomberg, the company has more than 67,000 residents and is home to plants for city's largest employer, General Motors Corp. NORTH OAKLAND: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: North Oakland Medical Center, Inc. dba Pontiac General Hospital and Medical Center 461 West Huron Street Pontiac, MI 48341 Bankruptcy Case No.: 08-60731 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- NOMC Physician Services, Inc. 08-60740 NOMC Services, Corp. 08-60732 Type of Business: The Debtors provide health care services. Chapter 11 Petition Date: August 26, 2008 Court: Eastern District of Michigan (Detroit) Judge: Marci B McIvor Debtor's Counsel: Matthew Wilkins, Esq. (wilkins@butzel.com) Max J. Newman, Esq. (newman@butzel.com) Butzel Long, P.C. Stoneridge West Fax: 313-225-7080 150 W. Jefferson, Suite 100 Detroit, MI 48226 Tel: (313) 225-7000 Fax: (313) 225-7080 http://butzel.com/ Estimated Assets: $10 million to $50 million Estimated Debts: $50 million to $100 million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Pontiac Finance Hospital Authority $36,099,672 C/O City of Pontiac 450 East Wide Track Drive Pontiac, MI 48342 City of Pontiac $10,405,591 450 East Wide Track Drive Pontiac, MI 48342 National Government Services, Inc. $1,810,283 Reimbursement Division Dept. of Community Health Lansing, MI 48913 PIP-Provider Reimbursement $1,376,481 Department N P.O. Box 7149 Indianapolis, IN 46207-7149 Michigan Health & Hospital Association $1,210,933 State of Michigan Dept. of Community Health Capitol Commons Center Lansing, MI 48913 Caretech Solutions Inc. $949,609 25800 Nortwestern Highway, Suite 900 Southfield, MI 48075 Williams, Adonis $900,000 Jesse Reiter/Juliana Sabatini, Gregory 122 Concord Road Bloomfield Hills, MI 48304 State of Michigan $767,726 Capitol View Building 201 Townsend St Lansing, MI 48913 Kovacik, Jeanie $750,000 Euel W. Kinsey, McKeen & Associates P.C. 645 Griswold Street, Suite 4200 Detroit, MI 48226 Westlake TPA $675,749 1477 BARCLAY Buffalo Grove, IL 60089 BIP-Facility Reimbursement Department $500,000 Blue Cross Blue Shield 1405 S. Creyts Rd., MC B186 Lansing, MI 48917 Gully, Donna $500,000 Linda Turek Sachs Waldman, P.C. Detroit, MI 48226 Dutton, Christine & Matthew Minor $500,000 Teresa E. Holman Brian McKeen, McKeen & Associates, P.C. 645 Griswold Street, 42nd Floor Detroit, MI 48226 Detroit, MI 48226 Blue Cross Blue Shield of $453,018 1405 S. Creyts Rd., MC B186 Lansing, MI 48917 NOMC Insurance C0., Ltd. $433,145 c/o HSBC Bank (CAYMAN) Ltd. P.O. BOX 1109 GT George Town., Grand Cayman Sodexho Operations LLC $428,218 9801 Washingtonian Blvd Gaithersburg, MD 20878 Romero, Claudia $400,000 John S. Hone, The Hone Law Firm, P.C. 28411 Northwestern Highway, Suite 930 Southfield, MI 48034 MI Escheats -Unclaimed Property Division $369,511 Michigan Department of Treasury P.O. Box 30756 LANSING, MI 48909 MESC (SUTA) $356,917 State of Michigan Unemployment Insurance Agency Detroit, MI 48202 3024 West Grand Blvd., #11-500 Detroit, MI 48202 MESC (SUTA) $356,917 P.O. BOX 33598 DETROIT, MI 48232-5598 NOVA CDO: S&P Junks Ratings on Four Classes of Securities --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BBB+' rating on the class B notes issued by Nova CDO 2001 Ltd., an arbitrage collateralized bond obligation (CBO) transaction managed by Phoenix Investment Partners, and removed it from CreditWatch, where it was placed with positive implications on Aug. 1, 2008. After reviewing the results of cash flow runs to determine the level of future defaults the rated tranches can withstand under various stressed default timing and interest rate scenarios while still paying all of the interest and principal due on the notes, Standard & Poor's determined that the rating currently assigned to the class B notes remains consistent with the amount of credit enhancement available. RATING AFFIRMED AND REMOVED FROM CREDITWATCH POSITIVE Nova CDO 2001 Ltd. Rating Class To From Balance (mil. $) ----- -- ---- ---------------- B BBB+ BBB+/Watch Pos 12.352 OTHER OUTSTANDING RATINGS Nova CDO 2001 Ltd. Class Rating Balance ----- ------ ------- C-1 CCC- 3.500 C-2 CCC- 9.700 D-1 CC 9.400 D-2 CC 3.600 TRANSACTION INFORMATION Issuer: Nova CDO 2001 Ltd Co-Issuer: Nova CDO 2001 Corp. Collateral manager: Phoenix Investment Counsel Inc. Underwriter: CIBC World Markets Corp. Trustee: JPMorgan Chase Bank N.A. Transaction type: Cash flow arbitrage corporate high-yield CBO OLIO DENTAL: Case Summary & 18 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Olio Dental, Inc. 11740 Olio Road, Suite 100 Fishers, IN 46037 Bankruptcy Case No.: 08-10305 Type of Business: The Debtor provides health care services. Chapter 11 Petition Date: August 22, 2008 Court: Southern District of Indiana (Indianapolis) Judge: Basil H. Lorch III Debtor's Counsel: Jeffrey M. Hester, Esq. (jeff@tucker-hester.com) Tucker | Hester, LLC 429 N Pennsylvania St., Suite 100 Indianapolis, IN 46204-1816 Tel: (317) 833-3030 Fax: (317) 833-3031 http://www.tucker-hester.com/ Total Assets: $51,710 Total Debts: $1,197,918 A list of the Debtor's largest unsecured creditors is available for free at http://bankrupt.com/misc/indsb08-10305.pdf OXBOW CARBON: Debt Reduction Cues S&P to Put 'B+' on Watch Pos -------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including its 'B+' corporate credit rating, on West Palm Beach, Fla.-based Oxbow Carbon LLC on CreditWatch with positive implications. "The CreditWatch listing follows the company's stronger-than- expected operational performance and notable debt reduction," said Standard & Poor's credit analyst Sherwin Brandford. Oxbow generated $187 million in EBITDA during the first half of 2008, driven by strong demand and pricing for fuel-grade petroleum coke and calcined petroleum coke as well as strong coal pricing. Oxbow reduced debt by about $150 million to $947 million at June 30, 2008, from $1.1 billion at Sept. 30, 2007. The combination of higher earnings and lower debt improved leverage to around 3.4x at the end of the second quarter of 2008 from around 4.5x at Sept. 30, 2007 (pro forma for the Great Lakes Carbon Corp. and SSM Coal B.V. acquisitions). "We will resolve our CreditWatch listing after evaluating third quarter 2008 financial results and meeting with management to discuss the company's business plans and financial projections," S&P says. OXIS INTERNATIONAL: June 30 Balance Sheet Upside-Down by $2.8MM --------------------------------------------------------------- Oxis International Inc.'s consolidated balance sheet at June 30, 2008, showed $1,387,000 in total assets and $4,154,000 in total liabilities, resulting in a $2,767,000 stockholders' deficit. The company reported a net loss of $2,533,000 on total revenue of $1,476,000 for the second quarter ended June 30, 2008, compared with net income of $1,085,000 on total revenue of $1,813,000 in the same period last year. License revenues decreased to $115,000 from $606,000 during the three months ended June 30, 2007. This decline was attributable to the loss of a significant manufacturing contract. Results for the second quarter of 2008 included a loss on disposition of subsidiary of $2,873,000. Net income in 2007 included non-cash income of $1,053,000 relating to a decrease in warrant and derivative liabilities. 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?3164 Going Concern Doubt Williams & Webster, P.S., in Spokane, Wash., expressed substantial doubt about Oxis International 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 significant and ongoing operating losses. The company has incurred an accumulated deficit of $73,475,000 through June 30, 2008. On a consolidated basis, the company had cash and cash equivalents of $232,000 at June 30, 2008. The company will need to seek additional loan or equity financing to pay for basic operating costs, or to expand operations, implement its marketing campaign, or hire additional personnel. About Oxis International Based in Foster City, California, Oxis International Inc. (OTC BB: OXIS) -- http://www.oxis.com/-- focuses on the research and development of technologies and therapeutic products in the field of oxidative stress/inflammatory reaction, diseases that are associated with damage from free radicals and reactive oxygen species. A prime objective of OXIS is to use its broad portfolio of oxidative stress biomarkers to identify associations between reactive biomarker signals and various disease etiologies and conditions. The company presently derive its revenues primarily from sales of research diagnostic reagents and assays to medical research laboratories. The company's diagnostic products include approximately 45 research reagents and 26 assays to measure markers of oxidative and nitrosative stress. The company holds the rights to four therapeutic classes of compounds in the area of oxidative stress and inflammation. One such compound is L- Ergothioneine, a potent antioxidant produced by OXIS that may be appropriate for sale over-the-counter as a dietary supplement. PATIENT SAFETY: Posts $2,399,825 Net Loss in 2008 Second Quarter ---------------------------------------------------------------- Patient Safety Technologies Inc. reported a net loss of $2,399,825 on revenues of $556,591 for the second quarter ended June 30, 2008, compared with a net loss of $1,756,157 on revenues of $313,461 in the same period last year. The increase in revenues is mainly attributable to the increase in sales generated by the company's Safety-Sponge System. Operating expenses were $2,407,026 and $1,535,280 for the three months ended June 30, 2008, and 2007, respectively. The increase in operating expenses for the three months ended June 30, 2008, when compared to the three months months ended June 30, 2007, was primarily the result of increases in salaries and employee benefits, professional fees, and general and administrative expenses. At June 30, 2008 the company's consolidated balance sheet showed $8,447,890 in total assets, $8,101,391 in total liabilities, and $346,499 in total stockholders' equity. The company's consolidated balance sheet at June 30, 2008, also showed strained liquidity with $1,233,121 in total current assets available to pay $4,136,223 in total current liabilities. 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?3165 Going Concern Doubt Squar, Milner, Peterson, Miranda & Williamson, LLP, in San Diego, expressed substantial doubt about Patient Safety Technologies 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 reported that the company has reported recurring losses from operations through Dec. 31, 2007, and has a significant accumulated deficit and a significant working capital deficit at Dec. 31, 2007. At June 30, 2008, the company has an accumulated deficit of approximately $40,573,160 and a working capital deficit of $2,903,102. About Patient Safety Headquartered in Los Angeles, Patient Safety Technologies Inc. (OTC BB: PSTX.OB) -- http://www.patientsafetytechnologies.com/-- through its wholly owned subsidiary, SurgiCount Medical Inc., is a developer and manufacturer of patient safety products including the Safety-Sponge(TM) System. The system helps in reducing the number of retained sponges and towels in patients during surgical procedures ans allows for faster and more accurate counting of surgical sponges. PEBBLE CREEK: S&P Cuts 2007-2 Class E Rating to 'B-' ---------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class C, D, and E notes issued by Pebble Creek LCDO 2007-2 Ltd., a hybrid collateralized loan obligation (CLO) transaction. These ratings, and the rating on the class B notes, remain on CreditWatch, where they were placed on July 18, 2008. The lowered ratings and CreditWatch placements primarily reflect negative rating migration in the corporate entities referenced by the transaction. Currently, more than 10% of the underlying loans have ratings in the 'CCC' range, and an additional 8% have ratings that are on CreditWatch with negative implications. The transaction has a standard recovery rate of 70% on all credit events. According to the trustee report dated July 8, 2008, the deal has experienced three credit events that have resulted in a net loss of $6.90 million to the transaction. Additionally, the eligible investments in the deal are subject to market value risk. Standard & Poor's will continue to review whether the ratings currently assigned to the notes remain consistent with the credit enhancement available to support them. RATINGS LOWERED AND REMAINING ON CREDITWATCH NEGATIVE Pebble Creek LCDO 2007-2 Ltd. Rating Class To From Balance (mil. $) ----- -- ---- ---------------- C BBB+/Watch Neg A/Watch Neg 20.500 D BB+/Watch Neg BBB/Watch Neg 22.500 E B-/Watch Neg BB/Watch Neg 20.750 RATING REMAINING ON CREDITWATCH NEGATIVE Pebble Creek LCDO 2007-2 Ltd. Class Rating Balance (mil. $) ----- ------ ---------------- B AAA/Watch Neg 112.150 TRANSACTION INFORMATION Issuer: Pebble Creek LCDO 2007-2 Ltd. Co-issuer: Pebble Creek LCDO 2007-2 LLC Underwriter: Lehman Brothers Special Financing Inc. Collateral manager: Stone Tower Debt Advisors Trustee: Citibank N.A. PNC MORTGAGE: Fitch Downgrades Two Classes of 2000-C1 Certificates ------------------------------------------------------------------ Fitch Ratings downgraded these two classes of commercial mortgage pass-through certificates from PNC Mortgage Acceptance Corp., series 2000-C1: -- $8 million class L to 'B-/DR1' from 'B'; -- $6.8 million class M to 'C/DR6' from 'CC/DR4'. In addition, Fitch has affirmed these classes: -- $299.3 million class A-2 at 'AAA'; -- Interest-only (IO) class X at 'AAA'; -- $34 million class B at 'AAA'; -- $34 million class C at 'AAA'; -- $10 million class D at 'AAA'; -- $26 million class E at 'AAA'; -- $12 million class F at 'AA+'; -- $12 million class G at 'A+'; -- $18 million class H at 'BBB'; -- $8 million class J at 'BBB-'; -- $6.8 million class K at 'BB'. The class A-1 certificates have paid in full. The balance of classes N and O have been reduced to zero due to realized losses. The downgrades are the result of an increase in expected losses from one new specially serviced loan. Forty-one loans (39.1%) are fully defeased, including six of the top 10 loans (17.4%). As of the August 2008 distribution date, the principal balance has been reduced 40.7% to $475.3 million from $801 million at issuance. There are currently three assets (2.1%) in special servicing. The largest specially serviced loan (1.8%) is secured by a 212,000 square foot retail center located in Manchester, New Hampshire. The asset was transferred to the special service in July 2008 due to imminent default. The loan does not mature until, Aug. 1, 2028, but had an Anticipated Repayment Date of Aug. 1, 2008. Due to unremedied environmental issues, the borrower was unable to refinance and the new interest rate is expected push the loan to less than 1.0x DSCR. Of the pool, nine loans (4.1%) mature in 2008, 51 loans (35.7%) mature in 2009 and 64 loans (34.4%) mature in 2010. Additionally, the transaction's highest state concentration is Michigan (10%). PORTOLA PACKAGING: Files for Bankruptcy, Gets $79MM DIP Facility ---------------------------------------------------------------- Portola Packaging, Inc. filed a voluntary Chapter 11 petition to reorganize before the United States Bankruptcy Court for the District of Delaware. In connection with the filing, the company confirmed that all of its secured lenders and holders of approximately 90% in aggregate principal amount of its 8-1/4% Senior Notes due 2012 agreed to a voluntary and consensual restructuring of the company pursuant to the restructuring support agreement dated July 24, 2008. Pursuant to the proposed plan of reorganization, holders of the Senior Notes will receive 100% of the common stock of reorganized Portola in exchange for their claims. Wayzata Investment Partners LLC is expected to be the company's controlling shareholder upon its emergence from bankruptcy. The company's plan of reorganization will reduce its long term debt obligations by $180 million. The company anticipates completing its pre-packaged reorganization and emerging from Chapter 11 in mid-October, 2008. Under the restructuring plan, all obligations owed to trade creditors, suppliers, customers and employees in the ordinary course of business will be unimpaired and unaffected by the restructuring. The company reached agreement with its existing secured lenders to provide the Company with debtor-in-possession financing of $79 million to pay off the outstanding indebtedness under the company's existing secured facilities and to finance its ongoing operations. The company said that its president and chief executive officer, Brian Bauerbach, and its chief financial officer, John LaBahn, and its general counsel, Kim Wehrenberg, have been appointed as the sole directors of the company and will oversee the restructuring. "We are pleased to have achieved such strong support for a consensual restructuring that dramatically improves our balance sheet, reduces our annual cash interest obligations by approximately $15 million, and enables continued reinvestment in our products and future growth," Mr. Bauerbach stated. We are thrilled to have the continued support of Wayzata and look forward to its long term commitment to the business." In conjunction withe Chapter 11 filing, the company is seeking approval for a variety of first day motions that will allow it to continue to manage operations in the ordinary course. The motions include requests to make wage and salary payments and other benefits to employees and to pay critical vendors, suppliers, trade creditors and certain other pre-petition trade claims. A full-text copy of the company's restructuring term sheet date July 24, 2008, is available for free at: http://ResearchArchives.com/t/s?3168 A full-text copy of the company and lenders' restructuring support agreement is available for free at: http://ResearchArchives.com/t/s?3169 Headquartered in Batavia, Illinois, Portola Packaging Inc. -- http://www.portpack.com/-- designs, manufactures and markets tamper-evident plastic closures used in dairy, fruit juice, bottled water, sports drinks, institutional food and other non- carbonated beverage markets. The company also produces a wide variety of plastic bottles for use in dairy, water and juice markets, including various high density bottles, as well as five- gallon polycarbonate water bottles. In addition, the company designs, manufactures and markets capping equipment for use in high speed bottling, filling and packaging production lines. Portola is also engaged in the manufacture and sale of tooling and molds used for blow molding. * * * As reported in the Troubled Company Reporter on July 31, 2008, Standard & Poor's Ratings Services lowered its corporate credit rating on Portola Packaging Inc. to 'D' from 'CCC-'. In addition, S&P lowered the senior unsecured ratings to 'D' from 'C'. The downgrades follow Portola's announcement that it is restructuring its capital structure through a prepackaged Chapter 11 bankruptcy filing. Before the default, the rating on Portola's $180 million 8.25% senior unsecured notes was two notches below the corporate credit rating and the recovery rating was '6', indicating the expectation for negligible (0% to 10%) recovery in the event of a payment default. PORTOLA PACKAGING: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Portola Packaging, Inc. aka Cap Snap aka NEPCO aka Consumer Cap aka Nepco aka Allied Tool 951 Douglas Road Bativia, IL 60510 Bankruptcy Case No.: 08-12001 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Great Lakes Sales Associates, LLC 08-12002 Northern Engineering and Plastics Corporation (Delaware) 08-12003 Northern Engineering Plastics Corporation (Puerto Rico) 08-12004 Northern Engineering Plastics Corporation - Puerto Rico (Pennsylvania) 08-12005 Portola Allied Tool, Inc. 08-12006 Portola Tech International, Inc. 08-12007 Type of Business: The Debtors designs, manufactures, and markets a full line of tamper-evident plastic closures, bottles, and equipment for the beverage and food industries, as well as plastic closures and containers for the cosmetics industry. See http://www.portpack.com/ Chapter 11 Petition Date: August 27, 2008 Court: District of Delaware (Delaware) Judge: Christopher S. Sontchi Debtors' Counsels: Young, Conaway, Stargatt & Taylor Edmon L. Morton, Esq. Robert S. Brady, Esq. Sean T. Greecher, Esq. The Brandywine Building 1000 West Street, 17th Floor P.O. Box 391 Wilmington, DE 19899 Tel: (302) 571-6600 Fax: (302) 571-1253 Email: bankfilings@ycst.com Estimated Assets: $50 million to $100 million Estimated Debts: $100 million to $500 million Debtors' consolidated list of their 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ U.S. Bank National Association Notes $180,000,000 60 Livingston Avenue (Aggregate St. Paul, MN 55107-2292 principal amount) SACMI IMOLA Trade Creditor $1,056,895 Via Selice Provencial, 17/A 40026 Imola Bo Italy Casella Postale 113 Italy KDV (1006) Trade Creditor $307,142 431 W. Newhall Avenue Waukesha, WI 53186 Packaging Corp. of America Trade Creditor $164,097 Hoffer Plastics Corp. Trade Creditor $160,467 Foreco SRL Trade Creditor $135,766 Unipac Corp. Trade Creditor $113,831 Rite Systems Inc. Trade Creditor $108,783 City of Batavia Utility $96,935 Much Shelist Trade Creditor $96,713 Riverdale Color Trade Creditor $90,828 Bamberger Polymers, Inc. Trade Creditor $75,041 D&D Custom Machine Trade Creditor $71,874 Whitaker Transportation Co. Inc. Trade Creditor $61,473 GE Capital Freight Trade Creditor $57,014 Rite Systems (Chino) Trade Creditor $55,896 RBC Bearings Trade Creditor $53,525 Federal Mfg. Co. Trade Creditor $50,809 Rogers Foam Corp. Trade Creditor $50,724 United Health Care Insurance Insurance $44,750 POSITRON CORP: June 30 Balance Sheet Upside-Down by $6,757,000 -------------------------------------------------------------- Positron Corp.'s consolidated balance sheet at June 30, 2008, showed $5,347,000 in total assets and $12,104,000 in total liabilities, resulting in a $6,757,000 stockholders' deficit. At June 30, 2008, the company's consolidated balance sheet also showed strained liquidity with $1,918,000 in total current assets available to pay $8,495,000 in total current liabilities. The company reported a net loss of $2,017,000 on revenues of $767,000 for the second quarter ended June 30, 2008, compared with a net loss of $1,107,000 on revenues of $869,000 in the same period in 2007. The decrease in revenues is due in part to a drop in sales of IPT gamma cameras attributable to the late 2007 change in the company's sales and marketing efforts from a third party distribution model to an internal sales force and the time required to ramp up its efforts. The significantly larger net loss for the three months ended June 30, 2008 is due primarily to derivative losses included in other income. 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?3166 Going Concern Doubt As reported in the Troubled Company Reporter on April 29, 2008, Frank L. Sassetti & Co., in Oak Park, Ill., expressed substantial doubt about Positron Corporation'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 significant accumulated deficit. Since inception, the company has expended substantial resources on research and development. Consequently, the company has sustained substantial losses. Due to the limited number of systems sold or placed into service each year, revenues have fluctuated significantly from year to year. At June 30, 2008, the company had an accumulated deficit of $79,721,000 and a stockholder's deficit of $6,757,000. The company will need to increase system sales and apply the research and development advancements to achieve profitability in the future. The company had cash and cash equivalents of $27,000 at June 30, 2008. At the same date, the company had accounts payable and accrued liabilities of $2,314,000. In addition, debt service and working capital requirements for the upcoming year may reach beyond current cash balances. About Positron Corp. Headquartered in Houston, Positron Corporation (OTC BB: POSC) -- http://www.positron.com/-- designs, manufactures, markets and supports advanced cardiac molecular imaging devices utilizing single photon emission computed tomography (SPECT) and positron emission tomography (PET). The company's molecular imaging systems incorporate patented and proprietary software and hardware technology for the diagnosis and treatment of patients with heart disease. PROBE MANUFACTURING: Inks Purchase Agreement with Solar Masters --------------------------------------------------------------- Probe Manufacturing, Inc., entered a definitive agreement for the sale and purchase of business assets of Solar Masters Company. The purchase price of the assets consists of: (a) $2,719.65 payable to Solar Masters, LLC (b) $77,280.35 for the container currently in the Port of Long Beach; (c) 250,000 shares of Probe common stock valued at $.40 each, and a royalty on gross revenue of 5% for the balance of 2008; (d) additional royalty payments of 7% for 2009, 6% for 2010 and 5% for 2011, provided that Probe has gross revenue of a minimum of $1 million, and product cost of $10 or less for the "barricade light". If these conditions are not met, the royalty shall decrease to 5%; (e) additional shares of Probe common stock of 100,000 in 2009; 100,000 in 2010; and 50,000 in 2011 provided that Probe has gross revenue of a minimum of $1 million, and product cost of $10 or less for the "barricade light". If the gross revenue number is not met, then the stock that was to be issued will become an option to purchase the shares that would have been issuable if the gross revenue target had been met. The exercise price of the options will be $0.40; (f) additional royalty payment of 5% for 2012, provided that Probe has gross revenue of a minimum of $1 million, and product cost of $10 or less for the "barricade light". If these conditions are not met, the royalty will decrease to 1%; (g) the "barricade light" pricing is to be $10.00 and may adjust periodically based on standard industry pricing variations. This will apply in all sections of this Agreement that refer to the $10.00 cost for the barricade light. Gross Revenue for purposes of calculating all royalty payments is based upon Revenue specifically generated from products acquired pursuant to this Agreement. On August 11, 2008, the board of directors of Probe Manufacturing, Inc., approved a 3-for-1 forward stock split of its outstanding and issued common stock. Pursuant to the forward stock split the company's issued and outstanding share capital will increase from 10,594,258 shares of common stock to 31,782,774 shares of common stock. The effective date of the forward stock split will be September 1, 2008. About Probe Manufacturing Based in Lake Forest, Calif., Probe Manufacturing Inc. (OTCBB: PMFI) -- http://www.probemi.com/-- provides electronics manufacturing services to original equipment manufacturers of industrial, automotive, semiconductor, medical, communication, military, and high technology products. It offers engineering, supply chain management, and manufacturing services. The company's engineering services include product design, printed circuit board layout, prototyping, and test development. Its supply chain management solutions comprise purchasing, management of materials, and order fulfillment. The company's manufacturing services include printed circuit board assembly, subsystem assembly, box build and systems integration, the process of integrating sub-systems, and downloading software before producing a fully configured product. It also offers computer-aided, in- circuit testing of assembled printed circuit boards; and final system assembly, and test assemblies and modules, as well as distribution services. The company was founded in 1993. It was formerly known as Probe Manufacturing Industries, Inc., and changed its name to Probe Manufacturing Inc., in 2005. At Dec. 31, 2007, the company's balance sheet showed $1,897,127 in total assets and $2,170,157 in total liabilities, resulting in a $273,030 stockholders' deficit. As reported in The Troubled Company Reporter on August 26, 2008, Jaspers + Hall, PC, raised substantial doubt about the ability of Probe Manufacturing, Inc., to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditor pointed to the company's accumulated deficit from operations and its difficulties in maintaining sufficient working capital. PROGRESSIVE MOLDED: Gets Court Nod to Hire Paul Weiss as Attorneys ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware gave authority to Progressive Molded Products, Inc. and its debtor- affiliates to employ Paul, Weiss, Rifkind, Wharton & Garrison LLP as their attorneys. Paul Weiss is expected to: (a) advise the Debtors with respect to their powers and duties as Debtors and Debtors-in-possession in the continued management of their business and properties; (b) attend meetings and negotiate with representatives of creditors and other parties in interest and advise consulting on the conduct of these cases, including all of the legal and administrative requirements in the Chapter 11 cases; (c) take all necessary action to protect and preserve the Debtors' estates, including the prosecution of actions commenced under the Bankruptcy Code on their behalf, and objections to claims against the estates; (d) prepare and prosecute on behalf of the Debtors all motions, applications, answers, orders, reports and papers necessary to the administration of the estates; (e) negotiate and prepare on the Debtors' behalf Chapter 11 plans, disclosure statements and all related agreements and documents and take any necessary action to obtain confirmation of plans; (f) advise the Debtors with respect to any sale of assets and negotiate and prepare related agreements; (g) appear in Court and protect the interests of the Debtors' estates; and (h) perform all other legal services in connection with the Chapter 11 cases. Paul Weiss will be paid on an hourly basis. Billing rates currently range from $725 to $975 for partners, $665 to $700 for counsel, $375 to $625 for associates and $180 to $225 for para- professionals. The attorneys who will represent the Debtors in their cases, and their hourly rates, are: Name of Attorney Hourly Rate --------------- ----------- Kelly A. Cornish $975 Brian S. Hermann 795 Diane Meyers 700 Claudia R. Tobler 625 Christopher A. Jarvinen 625 Toni Li 490 Matthew R. Scheck 375 In addition to the hourly rates, Paul Weiss customarily charges its clients for all costs and expenses incurred, including telephone and telecopier toll, mail and express mail, special or hand delivery charges, document processing, photocopying charges, travel expenses, expenses for "working meals," computerized research, and transcription cost, as well as ordinary overhead expenses. Paul Weiss also received a retainer amounting to $250,000 in connection with the preparation of filing the bankruptcy case and for the proposed postpetition representation of the Debtors. Kelley A. Cornish, Esq., a member at Paul Weiss, assures the Court that his firm do not have any connection with the Debtors, their affiliates, their creditors, or their attorneys and accountants. 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: Can Hire Young Conaway as Delaware Counsel -------------------------------------------------------------- Progressive Molded Products, Inc. and its debtor-affiliates obtains authority from the U.S. Bankruptcy Court for the District of Delaware to employ Young Conaway Stargatt & Taylor, LLP, as Delaware counsel. Young Conaway will: (a) provide legal advise with respect to the Debtors' powers and duties as Debtors-in-possession in the continued operation of their businesses and management of their properties; (b) prepare and pursue confirmation of a plan and approval of a disclosure statement; (c) prepare on behalf of the Debtors necessary applications, motions, answers, orders, reports and other legal papers; (d) appear in Court to protect the interest of the Debtors; and (e) perform all other legal services for the Debtors as necessary. Young Conaway will seek approval of payment of compensation and reimbursement of actual, necessary expenses and other charges upon its filing of appropriate applications for allowance of interim or final compensation and reimbursement of expenses pursuant to Sections 330 and 331 of the Bankruptcy Code, the Bankruptcy and Local Rules. The principal attorneys and paralegal presently designated to represent the Debtors and their current standard hourly rates are: Name of Attorney Hourly Rate --------------- ----------- Pauline K. Morgan $545 Joseph M. Barry 390 Donald J. Bowman, Jr. 305 Nathan D. Grow 260 Frank Grese 240 Kimberly A. Beck 175 Young Conaway received $475,000 in retainer fee in connection with the planning and preparation of initial documents and its proposed postpetition representation of the Debtors. Pauline K. Morgan, Esq., a partner at Young Conaway, assures the Court that her firm is a "disinterested person" as defined in Section 101(4) of the Bankruptcy Code. The firm and its partners are not creditors, equity holders, and do not hold an interest adverse to the Debtors' estates. 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: CCCA Court Extends Stay Order Until Oct. 31 --------------------------------------------------------------- Progressive Molded Products, Inc., Progressive Marketing, Inc., THL-PMPL Holding Corp., and Progressive Moulded Products Limited sought and obtained the Ontario Superior Court of Justice, Commercial List's authority under the Companies' Creditors Arrangement Act to extend the stay order previously entered by the Court. Under the term of the Initial Order, as amended on July 8, 2008, the "Stay Period" was set to expire August 15, 2008, unless extended. Donald S. MacKenzie, chief restructuring officer for the Canadian Applicants, namely THL-PMPL Holding Corp. and Progressive Moulded Products Limited, relates the Applicants are continuing to work with their major customers -- General Motors Corporation, Ford Motor Company, and Chrysler LLC -- pursuant to Tooling Removal Order and the Term Sheet. Pursuant to the Tooling Removal Order, the Applicants have agreed to return the tooling to their customers in exchange of the funding of a portion of the Applicants' winding-down operations. Mr. MacKenzie relates while the removal of the customer-owned tooling has occurred, there are still numerous unresolved issues relating to invoicing, payment for secondary tooling and machinery and equipment, and reconciliation and payment of accounts receivable owing to the Applicants and otherwise. According to Sheryl E. Seigel, and Alex A. Ilchenko, of Lang Mihiner LLP, solicitors of the Applicants, an extension will permit the Applicants to continue to perform their obligations under the Tooling Removal Orders and the Term Sheet, including the orderly wind-down of their operations as previously authorized by the Court. Accordingly, the Honorable Justice Campbell of the Ontario Superior Court of Justice, Commercial List, orders an extension of the stay period until October 31, 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: CCCA Court OKs Danbury to Sell Canadian Assets ------------------------------------------------------------------ As a result of their winding-down of their business operations, Progressive Molded Products, Inc. and its debtor-affiliates wish to proceed with the disposition of certain of their remaining properties and assets that are situated in their Canadian facilities. To this end, Progressive Moulded Products Limited, with the assistance of Ernst & Young Inc. and Conway MacKenzie, Inc., canvassed third parties with specialized expertise in the sale auction of plant machinery and equipment with a view to select a suitable candidate. PMPL, with the approval of Ernst & Young, prepetition agents for the first lien secured creditors, JP Morgan Chase Bank, N.A. and JP Morgan Chase Bank N.A., Toronto Branch, has selected Danbury Industrial and Infinity Asset Solutions Inc. to proceed with the sale and auction of the Canadian Plant assets and wishes to enter into the Auction Services Agreement. At the Applicants' behest, the Honorable Justice Campbell of the Ontario Superior Court of Justice, Commercial List, approves the Auction Service Agreement with Danbury. Specifically, Justice Campbell authorized and directed PMPL to enter into the agreement and execute any ancillary or related documents as are necessary or incidental to the performance of its obligations under the Auction Services Agreement. He further authorized PMPL to enter into any amendments or modifications of the Auction Services Agreement as it may consider necessary and appropriate, with the approval of the Monitor and counsel for the prepetition agents. Upon the Auctioneer completing the sale of the assets to a purchaser in accordance with the terms of the Auction Services Agreement and the delivery of a bill of sale to the purchaser in relation to the sale, all rights, title and interests of PMPL in and to any asset described in the bill of sale will be vested in the purchaser, free and clear of all claims, Justice Campbell ordered. PMPL and the Auctioneer are also relieved from compliance with the provisions of any law relating to notice, statutory or otherwise, which a creditor or other party is required to issue in order to dispose of the collateral of a Debtor in connection with the transaction contemplated in the Auction Services Agreement. Furthermore, Justice Campbell ordered that the sale of assets contemplated in the Auction Services Agreement will be exempt from any applicable bulk sales legislation in any jurisdiction in which the assets are situated, including without limitation, the Ontario Bulk Sales Act, R.S.O. 1990, c. B-14, as amended, and are in all respects judicial sales for the purposes of the bulk sales legislation. 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: Withdraws Application to Hire Conway Mackenzie ------------------------------------------------------------------ Progressive Molded Products Inc. and its three debtor-affiliates have withdrawn their prior request to hire Conway MacKenzie, Inc., as financial advisor. The Debtors Canadian units THL-PMPL Holdings Corp. and Progressive Moulded Products Limited have filed before the Ontario Superior Court of Justice, Commercial List, an application to hire the firm and its member Donald S. Mackenzie as chief restructuring officer, for their services during the wind-down of their operations. The Debtors obtained approval from Justice Morawetz of the Ontario Superior Court of Justice, Commercial List, to hire Donald S. Mackenzie as chief restructuring officer. 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. PROXYMED INC: Common Stock Subject to Nasdaq Delisting ------------------------------------------------------ The Nasdaq Stock Market, Inc. has determined to remove from listing the common stock of ProxyMed, Inc., effective at the opening of the trading session on September 2, 2008. Based on a review of the information provided by the company, Nasdaq Staff determined that the company no longer qualified for listing on the Exchange pursuant to Marketplace Rules 4300, 4450(f), and IM-4300. The company was notified of the Staffs determination on July 23, 2008. The company did not appeal the Staff determination to the Hearings Panel, and the Staff determination to delist the company became final on August 1, 2008. Headquartered in Norcross, Georgia, ProxyMed Inc. fka MedUnite, Inc. -- http://www.medavanthealth.com-- facilitates the exchange of medical claim and clinical information. The company and two of its affiliates filed for Chapter 11 protection on July 23, 2008 (Bankr. D. Del. Lead Case No.08-11551). Kara Hammond Coyle, Esq., and Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor, L.L.P., represent the Debtors in their restructuring efforts. The Debtors indicated $40,655,000 in total consolidated assets and $47,640,000 in total consolidated debts as of December 31, 2007. In its petition, ProxyMed Transaction Services, Inc. indicated $10,000,0000 in estimated assets and $10,000,000 in estimated debts. RADIAN INSURANCE: Downgrade Cues S&P to Lower 3 U.S. ABS Deals -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on four classes from three U.S. asset-backed securities (ABS) transactions and removed them from CreditWatch with negative implications. The rating actions follow the recent lowering of the financial strength ratings on monoline insurers Radian Asset Assurance Inc. (BBB+/Negative/--) and Radian Insurance Inc. (BB+/Negative/--). "We lowered the long-term ratings on classes IM-2 and IIM-2 from Manufactured Housing Contract Trust Pass-Thru Cert Series 2001-1 to 'BB+' to reflect the downgrade of Radian Insurance Inc. We lowered the long-term rating on class A from BCC Funding Corp. VI (ABS equipment) to 'BBB+' to reflect the downgrade of monoline insurer Radian Asset Assurance Inc. Lastly, we lowered the long- term rating on class A from Credit Acceptance Auto Dealer Loan Trust 2006-2 (ABS auto loan) to 'A-'; the rating is now delinked from the rating on the monoline insurer, Radian Asset Assurance Inc., as it is able to withstand stress scenarios consistent with a higher rating than that of Standard & Poor's underlying rating (SPUR)," S&P explains. "A SPUR is our opinion of the stand-alone creditworthiness of a transaction -- that is, the capacity to pay debt service on a debt issue in accordance with its terms -- without considering an otherwise applicable bond insurance policy. Under our criteria, the issue credit rating on a fully credit-enhanced bond issue is the higher of the two ratings: the credit enhancer's or the SPUR," S&P says. RATINGS LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE Manufactured Housing Contract Pass-Thru Cert Series 2001-1 Rating Class To From ----- -- ----- IM-2 BB+ A/Watch Neg IIM-2 BB+ A/Watch Neg BCC Funding Corp. VI Rating Class To From ----- -- ----- A BBB+ A/Watch Neg Credit Acceptance Auto Dealer Loan Trust 2006-2 Rating Class To From ----- -- ----- A A- A/Watch Neg RACE POINT: S&P Affirms 'BB' Ratings on 3 Classes of Securities --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on the class B-1, B-2, and C notes issued by Race Point CLO Ltd. on CreditWatch with positive implications. "At the same time, we affirmed our ratings on the class A-1, A-2, D-1, D-2 and D-3 notes. Race Point CLO Ltd. is a high-yield arbitrage collateralized loan obligation (CLO) managed by Sankaty Advisors LLC," S&P says. "We placed our ratings on the B and C notes on CreditWatch positive because the class A-1 notes continue to benefit from ongoing paydowns, which has raised the amount of credit support available to the class A-2, B, and C notes. The A-1 notes received a paydown of approximately $26 million on the Aug. 15, 2008, payment date, reducing its outstanding balance to $133 million, which is about 41% of its original balance," Standard & Poor's will review the results of current cash flow runs generated for Race Point CLO Ltd. to determine the level of future defaults the rated notes can withstand under various stressed default timing and interest rate scenarios while still paying all of the interest and principal due on the notes. "We will compare the results of these cash flow runs with the projected default performance of the performing assets in the collateral pool to determine whether the ratings currently assigned to the notes remain consistent with the credit enhancement available, the firm says. RATINGS PLACED ON CREDITWATCH POSITIVE Race Point CLO Ltd. Rating Balance (mil. $) Class To From Original Current ----- -- ---- -------- ------- B-1 AA/Watch Pos AA 10.000 10.000 B-2 AA/Watch Pos AA 12.000 12.000 C BBB+/Watch Pos BBB+ 20.000 20.000 RATINGS AFFIRMED Race Point CLO Ltd. Balance (mil. $) Class Rating Original Current ----- ------ -------- ------- A-1 AAA 327.000 133.477 A-2 AAA 71.000 71.000 D-1 BB 15.500 15.500 D-2 BB 2.000 2.000 D-3 BB 3.500 3.500 TRANSACTION INFORMATION Issuer: Race Point CLO Ltd. Co-issuer: Race Point CLO Inc. Manager/servicer: Sankaty Advisors LLC Underwriter: Deutsche Bank Alex Brown Trustee: Bank of New York Mellon Trust Co. N.A. (formerly JPMorgan Chase Bank N.A.) Transaction type: Cash flow arbitrage CLO REDWOOD PLACE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Redwood Place, LLC 3900 S. Hualapai Way Las Vegas, NV 89147 Bankruptcy Case No.: 08-19725 Type of Business: The Debtor is a real estate corporation. See http://www.redwoodplace.com Chapter 11 Petition Date: August 27, 2008 Court: District of Nevada (Las Vegas) Judge: Mike K. Nakagawa Debtor's Counsel: Matthew L. Johnson, Esq. Matthew L. Johnson & Associates, P.C. 8831 W. Sahara Avenue Las Vegas, NV 89117 Tel: (702) 471-0065 Fax: (702) 471-0075 Email: bankruptcy@mjohnsonlaw.com Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Trinity Bros. Contracting, LLC Contractor $353,339 14037 N. 24th Avenue Services Phoenix, AZ 85023 Corporate Air Mechanical Contractor $188,447 1838 E. University Drive Services Phoenix, AZ 85034 AZ Partsmaster Contractor $146,633 15 N. 57th Drive Phoenix, AZ 85043 Design & Stone International Contractor Services $120,627 Maricopa County Treasurer Property Taxes $87,008 Manual Ortiz Atlas Marble Contractor Services $86,970 Ponce Plumbing, Inc. Plumbing Services $48,043 Installation for Less Contractor Services $26,644 Rossmar & Graham CAM $14,932 Genos Landscape Landscape Services $13,377 Robert McWaters Contractor Services $9,106 JR McDade $5,125 CAMS-Corporate Air Unknown $3,778 HD Supply Facilities Maintenance Unknown $3,144 Main Amundson & Associates $2,600 Archies Air Condtioning Air Conditioning $2,370 Services BRAVO, Inc. Unknown $2,045 Fennemore Craig PC Legal Fees $1,933 Glassbusters Unknown $1,439 Waste Management of Arizona - Garbage Collections $1,303 Phoenix Hauling Services RENAISSANCE HEALTHCARE: Files for Chapter 11 Protection in Texas ---------------------------------------------------------------- Renaissance Healthcare Systems Inc. and three of its affiliates filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code before the United States Bankruptcy Court for the Northern District of Texas when it failed to reorganize outside of bankruptcy, Bloomberg News reports. Bloomberg says the company listed assets and debts between $10 million and $50 million each. The company owes at least $13.2 million to unsecured creditors including Metro Electric owed $1.7 million, JMC Mechanical Inc. owed $1.6 million, and Cardinal Health owed $1.6 million, the report says. According to Bloomberg, combinations of cost overruns of the company's Renaissance Hospital Grand Prairie project, collapse of the capital markets and gross underestimation of costs have drained its resources. The company wants to sell substantially all of its assets located in Terrell, Texas, subject to competitive bidding and auction, Bloomberg says. Tarig Mahmood agreed to buy the assets for $1.2 million and lend $150,000 to the company to fund business operation as it restructure, the report says. All bids must be delivered by Sept. 5, 2008, followed by an auction on Sept. 10, 2008, Bloomberg says. A sale hearing is set for Sept. 17, 2008, the report adds. The sale is expected to close by Sept. 30, 2008, Bloomberg notes. Headquartered in Houston, Texas, Renaissance Healthcare Systems Inc. -- http://www.renhealthcare.org/-- operates a hospital in Texas. RIDGEMOUR MEYER: Former Partner Ginsburg Wants Case Dismissed ------------------------------------------------------------- Ginsburg Development Companies LLC is asking the United States Bankruptcy Court for the Southern District of New York to dismiss the Chapter 11 case of Ridgemour Meyer Properties LLC or, in the alternative, appoint a Chapter 11 trustee, Bloomberg News reports. Ginsburg Development alleges that the Debtor used the Chapter 11 process to evade an unfavorable arbitration ruling, Bloomberg says. When the Debtor filed for bankruptcy, it cited that it has a dispute with Ginsburg Development, the report says. "This bankruptcy case is a classic example of a bad faith bankruptcy filing," Bloomberg quoted an attorney for Ginsburg Development as saying. A hearing is set for Sept. 11, 2008, to consider the motion, Bloomberg notes. Headquartered in New York, Ridgemour Meyer Properties, LLC is a real estate developer. The company filed for Chapter 11 protection from its creditors on Aug. 11, 2008 (Bankr. S.D.N.Y. Case No.08-13153). Marc Stuart Goldberg, Esq., at M. Stuart Goldberg, LLC, represents the Debtor. When the Debtor filed protection from its creditors, it listed both assets and debts between $10 million and $50 million. RIDGEMOUR MEYER: Case Summary & Five Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Ridgemour Meyer Properties, LLC 41 Union Square West, Suite 507 New York, NY 10003 Bankruptcy Case No.: 08-13153 Type of Business: The Debtor is a real estate developer. Chapter 11 Petition Date: August 11, 2008 Court: Southern District of New York (Manhattan) Judge: Stuart M. Bernstein Debtor's Counsel: Marc Stuart Goldberg, Esq. (mgoldberg@msglegal.com) M. Stuart Goldberg, LLC 81 Main Street, Suite 205 White Plains, NY 10601 Tel: (914) 949-5400 Fax: (914) 683-1279 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million Debtor's five Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Wachovia Bank, National Association $3,400,000 12 East 49th St. New York, New York 10017 Goetz & Fitzpatrick, LLP $208,263 One Pennslvania Plaza New York, New York 10119-0196 Riverso & Associates $23,082 1088 Central Avenue, 2nd Floor Scarsdale, New York 10583 Metropolitan Value Services $63,200 Grassi Consulting, LLC $8,450 ROBERT WALLACH: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Robert M. Wallach aka Bobby Wallach aka Bob Wallach aka Robert Matthew Wallach 219 Feeks Lane Mill Neck, NY 11765 Bankruptcy Case No.: 08-74601 Chapter 11 Petition Date: August 27, 2008 Court: Eastern District of New York (Central Islip) Judge: Robert E. Grossman Debtor's Counsel: Steven I. Super, Esq. Wander & Associates PC 641 Lexington Avenue New York, NY Tel: (212) 751-9700 Fax: (212) 751-6820 Email: ssuper@wanderlaw.com Estimated Assets: $10 million to $50 million Estimated Debts: $50 million to $100 million The Debtor did not file a list of its 20 Largest Unsecured Creditors. ROBERT WARFIELD: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Robert Warfield, Sr. 10481 Golf Course Rd. Ocean City, MD 21842 Bankruptcy Case No.: 08-20909 Chapter 11 Petition Date: August 26, 2008 Court: District of Maryland (Baltimore) Judge: Duncan W. Keir Debtor's Counsel: Morton A. Faller, Esq Email: mfaller@srgpe.com Shulman Rogers Gandal Pordy & Ecker, PA 11921 Rockville Pike, Ste. 300 Rockville, MD 20852 Tel: (301) 231-0928 Fax: (301) 230-2891 http://www.srgpe.com/ Estimated Assets: $10,000,000 to $50,000,000 Estimated Debts: $10,000,000 to $50,000,000 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ PNC Bank National Association Acquisition loan $4,857,755 P.O. Box 340777 (Guarantors) Pittsburgh, PA 15230-7777 Marina building loan $4,016,049 I (Guarantors) Line of Credit $3,012,917 (Guarantors) Golf course rehab $3,012,917 loan (Guarantors) Marina building $1,811,344 loan II (Guarantors) Water & sewer $1,790,577 projects loan (Guarantors) Office building term $725,306 loan (Guarantors) M&T Bank Loan made to Ocean $6,832,721 25 South Charles St., 18th 25 Pines Independent Fl. Living, LLC-- Attn: Kevin Giusti Warfields are Baltimore, MD 21201 Guarantors Bunting Construction Corp., Marina building $206,467 Inc. 32996 Lighthouse Rd. Ocean View, DE 1997 Calvin B. Taylor Banking Co. Personal Line of $40,000 Credit Atlantic Group & Associates, Engineering $17,693 Inc. services Superior Outdoor Signs, Inc. Advertising $7,900 Comcast Spotlight Advertising $7,123 Bank of America VISA Credit Card $2,762 Captain's Cove Golf & Yacht Marina electric $2,506 Club BIC, Inc. Fill dirt on lot $2,000 Lynch Printing, LLC Advertising $1,693 Chesapeake Outdoor Advertising $949 Sharp Energy Propane $887 D3 Corp. Advertising $700 RONALD HUCH: Case Summary & Four Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Ronald O. Huch Barbara Ann Huch 1473 Windsong Place Morgan Hill, CA 95037 Bankruptcy Case No.: 08-54296 Chapter 11 Petition Date: August 6, 2008 Court: Northern District of California (San Jose) Judge: Arthur S. Weissbrodt Debtor's Counsel: Henry B. Niles, III, Esq. Law Offices of Henry B. Niles III 340 Soquel Avenue, Suite105 Santa Cruz, CA 95062 Tel: (831) 457-4545 E-mail: ecf-niles@hbniles.com Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 A copy of the Debtor's petition is available for free at: http://bankrupt.com/misc/canb08-54296.pdf ROYAL PALM: Case Summary & Three Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Royal Palm Land Holdings of Starke LLC 2400 North Commerce Parkway Suite 305 Weston, FL 33326 Bankruptcy Case No.: 08-21448 Chapter 11 Petition Date: August 13, 2008 Court: Southern District of Florida (Fort Lauderdale) Judge: John K. Olson Debtor's Counsel: Thomas L. Abrams, Esq. 1776 North Pine Island Road, Suite 309 Plantation, FL 33322 Tel: (954) 523-0900 E-mail: tabrams@tabramslaw.com Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 A copy of the Debtor's petition is available for free at: http://bankrupt.com/misc/flsb08-21448.pdf RUBEN SALAZAR: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Ruben Salazar 2502 Emerald Lake Drive Harlingen, TX 78550 Bankruptcy Case No.: 08-10405 Chapter 11 Petition Date: August 4, 2008 Court: Southern District of Texas (Brownsville) Judge: Richard S. Schmidt Debtor's Counsel: Eduardo V. Rodriguez, Esq. (evrcourt@malaiselawfirm.com) Malaise Law Firm 1265 North Expressway 83 Brownsville, TX 78521 Tel: (956)547-9638 Fax: (956)547-9630 Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 The Debtor does not have any unsecured creditors who are not insiders. SAGECREST FINANCE: Wants to Access Deutsche Bank Cash Collateral ---------------------------------------------------------------- SageCrest Finance LLC and its affiliate SageCrest II LLC seek permission from the the U.S. Bankruptcy Court for the District of Connecticut (Bridgeport) to use the cash collateral securing repayment of $107 million in loans from Deutsche Bank AG. Bloomberg, citing court papers filed on August 22, says the Debtors paid the bank $107 million from $240 million during the preceding 10 months. Greenwich, Connecticut-based SageCrest Financial LLC is managed by Windmill Management LLC. The company provides short-term financing. SageCrest Financial and SageCrest II LLC filed their chapter 11 petition on Aug. 17, 2008 (Bankr. Conn. Case Nos. 08- 50755 and 08-50754). James Berman, Esq., at Zeisler and Zeisler P.C., represents the Debtors in their restructuring efforts. The Debtors listed assets between $100 million and $500 million and debts between $1 million and $10 million. According to the Troubled Company Reporter, the Debtor's counsel said that SageCrest Financial sought bankruptcy protection in order to avoid a foreclosure sale initiated by Deutsche Bank AG, which is owed $7 million. SEMGROUP LP: U.S. Trustee, Panel Balk at Blackstone Fee Structure ----------------------------------------------------------------- The Official Committee of Unsecured Creditors, joined by Titan Energy, Inc., Loren Gas, Inc., Winstar Energy I, LP, and Texon Energy, L.P., objects to the application of SemGroup, L.P. and its debtor-affiliates to hire Blackstone Advisory Services L.P., as their investment banker, arguing that Blackstone's proposed fee structure cannot be approved because they encourage a specific course of action for the benefit of one creditor group. Specifically, the Committee believes that the Transaction Fee improperly incentivizes Blackstone to pursue quick asset sales, without fully exploring any restructuring options. Representing the Committee, Bonnie Glantz Fatell, Esq., at Blank Rome LLP, in Wilmington, Delaware, relates that Bank of America, as administrative DIP agent, has required to reduce Blackstone's Restructuring Fee to $15,000,000, while holding its Transaction Fee at 1.0% of proceeds. Thus, unless Blackstone believes that selling the Debtors will yield less than $1,500,000,000, Blackstone will always profit from a sale, as opposed to a restructuring, Ms. Fatell says. The Committee insists that Blackstone's fee structure should be modified, so that Blackstone's incentives and restructuring options are balanced, and will result in the estates', not BofA's, best interests. In addition to the improper incentives created by the BofA-approved fee structure, the Committee argues that restructuring fees as high as $15,000,000 are reserved for larger cases. Blackstone's liquidation premium of a 1.0% of every dollar realized for the Debtors' assets is atypical and contrary to customary norms. The Debtors cannot justify a 1.0% flat fee on the basis that the Debtors' assets are as a series of unrelated stand-alone assets that could each attract their own buyer, Ms. Fatell argues. The Committee asks Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware to hold the Debtors to their fiduciary duties owed to all creditors, not just the senior and secured creditors, and consider the Blackstone Application as presented in its objection. Roberta A. DeAngelis, Acting United States Trustee for Region 3, also opposes the employment of Blackstone, to the extent that Blackstone sees extraordinary fees related to its involvement in raising debt financing, raising equity financing, consummating a restructuring and consummating a transaction. The U.S. Trustee objects to the provisions that provide Blackstone with a liability cap, because they fail to conform to applicable Third Circuit law. The liability cap protects Blackstone's exposure if it is not entitled to indemnity, limiting its damages to the fees it actually received. Moreover, the U.S. Trustee argues that the Court must prohibit the limitation of liability provisions and the payment of indemnification under certain circumstances. The U.S. Trustee also objects to Blackstone's request for a $100,000 replenishing expense advance. The U.S. Trustee states that under any standard, Blackstone's requested fees are extraordinary and outside of the range of reasonableness. She insists that Blackstone is inappropriately seeking the approval overly broad indemnification provisions, improper limitation of liability provisions, a waiver of its obligation to file fee applications, and a waiver of its obligation to provide support for reimbursement of expenses. Accordingly, The U.S. Trustee asks the Court to deny the Blackstone Application. BofA Responds BofA tells the Court that it has negotiated substantial economic improvements to Blackstone's proposed fees that will benefit all creditors. There was no other agenda than a fee reduction, since the fees will be paid using collateral from the Debtors' prepetition lenders, BofA says. BofA concedes that the Debtors' Chapter 11 cases are dictated by their determination of the best way to maximize their estates, and not by BofA as their agent. In addition, BofA tells Judge Shannon that the Committee had actively participated in and supported the Debtors' request to use the cash collateral and obtain DIP financing for the purpose of enhancing the sale process. The Committee counters that the BofA's business relationship with the Debtors is "no ordinary borrower-lender relationship." This relationship undercuts the Committee's assurance that decisions on the Debtors' restructuring are being made by the Debtors' officers, and not their advisors whose financial motivations are engineered to force a quick break-up and sale, David W. Carickhoff, Esq., at Blank Rome LLP, in Wilmington, Delaware, proposed counsel for the Committee, argues. The Committee believes that the Debtors' advisors must be free from all potential adverse interests to the estates. In support of BofA, the Debtors remind the Court that Section 328(a) of the Bankruptcy Code allows them to employ professionals on reasonable terms and conditions. The Debtors insist that the economic terms of the Blackstone Application is reasonable. The Debtors maintain that the transactions under which Blackstone will earn its fees will be subject to the Court's approval. Thus the Application is inherently reasonable, because the Court will be asked to make a ruling contrary to law. Court Wants Changes to Proposed Order According to The Journal Record, Tom Becker, the Debtors' spokesman said Judge Shannon has already authorized the Debtors to employ Blackstone as their investment banker. However, no written order has yet been filed with the Court. Mr. Becker, according to the report, said Blackstone and the Debtors agreed to change one component of the fee structure. Instead of Blackstone receiving 1% for every transaction, Blackstone's fees will range from 1% for transactions not reaching $500,000,000 and 0.45% for transactions amounting from at least $2,500,000,000 to less than $3,000,000,000, the report said. The restructuring fee has also been reduced from $20,000,000 to $15,000,000, and a monthly fee will be due to Blackstone for the first six months, the report added. The Debtors initially proposed an $350,000 monthly fee. 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. 9; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SEMGROUP LP: Oil Suppliers Demand Payment, Return of Deliveries --------------------------------------------------------------- LCS Production Co., sells oil to SemCrude, L.P., pursuant to a contract dated April 2, 2008. Under the Contract, SemCrude agreed to remit the purchase price to LCS on the 20th of the month following the delivery. According to Michael J. Joyce, Esq., at Cross & Simon, LLC, in Wilmington, Delaware, SemCrude has not paid LCS for oil sold in June and July 2008, which totals $5,152,184. Pursuant to Section 9.343 of the Texas Business & Commerce Code, Mr. Joyce asserted that LCS holds a security interest and lien in the Oil, which extends to all proceeds resulting from any sale of the Oil. He notes that LCS has not consented to any sale of the the Oil or any cash receivable from that sale. LCS asked the U.S. Bankruptcy Court for the District of Delaware to adjudicate and determine that LCS is the owner of a first and prior security interest and lien in the Oil. SemCrude should also provide an accounting on the status of the Oil. Further, LCS seeks a determination of the amount of its secured claim, and a determination that all the proceeds from the sale of the Oil will be used only to pay LCS, and should not be deemed a property of the Debtors' estate. Further, LCS sought the turnover of all property in the Debtors' possession that represents the Oil, and asked the Court to issue a preliminary and permanent injunction on the Debtors, precluding them from using, dissipating or disbursing the Oil. In a separate filing, Linn Energy Holdings sought the payment of its administrative expense claim against SemMaterials, L.P. and its debtor-affiliates, pursuant to Sections 503(b)(9) and 546(c). Linn Energy said it is owed $1,263,396 for goods it delivered to the Debtors within 45 days before the bankruptcy filing, including $618,714 for goods it delivered within 20 days before the bankruptcy filing. Linn Energy has filed with the Court a notice of reclamation demand. New Dominion, L.L.C., and SemCrude, L.P., are parties to a contract under which SemCrude purchases all of the Oklahoma Sweet Crude Oil produced by New Dominion and its partners. Pursuant to the Contract, New Dominion sold the Oil to SemCrude during June and July 2008. New Dominion delivered 21,183 barrels of Oil for $2,617,420 in June, and 29,100 barrels in July. In addition, New Dominion also delivered 7,500 barrels after the bankruptcy filing. According to William D. Sullivan, Esq., at Sullivan Hazeltine Allinson LLC, in Wilmington, Delaware, New Dominion has not yet received a final accounting as to the exact amounts delivered in July, and is unable to place an exact value on the July Deliveries. However, New Dominion believes that the July Prepetition Delivery has an approximate net value of $5,000,000, and the July Postpetition Delivery has an approximate net value of $1,000,000. Mr. Sullivan argued that any cash received by SemCrude as a result of the sale of the Oil constitutes cash collateral, pursuant to Section 363 of the Bankruptcy Code. New Dominion demands that the SemCrude provide an accounting of the sale of the Oil, and turn over any proceeds from the sale. New Dominion asks the Court to enter a temporary restraining order and a preliminary injunction, enjoining the SemCrude from using the proceeds. Additionally, Vitol, Inc., and SemCrude, L.P., entered into the Crude Oil Storage Service Agreement dated June 1, 2008, under which Vitol owes a $930,000 debt for August 2008. Vitol has filed an interpleader action against SemCrude, SemGroup Crude Storage, L.L.C., and SemGroup Energy Partners, L.L.C., stating that it seeks to pay the August Payment, but is not able to determine to which Debtor should it should make the payment. According to Stephen M. Miller, Esq., at Morris James LP, in Wilmington, Delaware, SemCrude and SGEP entered into a purchase and sale agreement, executed on May 30, 2008. Pursuant to the Sale Agreement, SemCrude and SGCS executed an assignment of third-party storage agreement on May 30, 2008. Mr. Miller noted that the parties may have claims related to the Storage Agreement, which became effective two days later. Mr. Miller asserted that Vitol was invoiced by SGEP for storage fees for June, July, and August 2008. Vitol has made payments to SGEP for services for June and July. Vitol is concerned that that SGCS, and not SGEP, is SemCrude's actual assignee under the Storage Agreement. He represents that Vitol is uncertain of any claims SemCrude might assert as the original party to the Storage Agreement. Vitol maintained that although it wishes to perform under the Storage Agreement, it also seeks to avoid multiple liabilities. Vitol asked the Court to declare the June and July 2008 obligations as satisfied by virtue of the prior payments to SGEP. Vitol also sought the Court's permission to pay the August Payment into the Court's registry, and asked the Court to require the SemGroup, SGCS, and SGEP to settle among themselves their rights to the payments under the Storage Agreement. Titan Energy, Inc., Winstar Energy, Inc., Loren Gas, Inc., Double D Eael, LLC, Texon Energy, L.P., and Texas Energy Nos. 42-24 to 24-38, delivered crude oil to SemCrude, L.P., for $2,904,144, which remained outstanding as of the bankruptcy filing. Kathleen M. Miller, Esq., at Smith Katzenstein & Furlow LLP, in Wilmington, Delaware, told the Court that Titan holds a security interest in the oil, and cash received by the Debtors from the sale of the oil constitutes cash collateral under Section 363 of the Bankruptcy Code. Accordingly, Titan asked the Court to direct the Debtors provide an accounting for the delivered oil and to pay all the amounts due. 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). 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, represent the Debtors in their restructuring efforts. 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; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SEMGROUP LP: HSBC, et al., Disclose Interest in Bankruptcy Case --------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, three professionals disclose representations with respect to certain parties-in-interest in the Debtors' chapter 11 cases: * HSBC Bank USA, National Association; * Werb & Sullivan; and * Russell R. Johnson III, Esq. Representing HSBC, Douglas L. Furth, Esq., at Gelenbock Eiseman Assor Bell & Peskoe LLP, in New York, stated that HSBC, as successor indenture trustee for the Debtors' 8.75% senior notes due 2015, does not own any legal or beneficial claim against the Debtors, other than claims arising in connection with the Notes. Mr. Furth further disclosed that the holders of the notes have claims under the Indenture for unpaid principal and interest. The Notes are issued and outstanding for a $600,000,000 aggregate principal amount. Duane D. Werb, Esq., at Werb & Sullivan in Wilmington, Delaware, stated that his firm represents seven secured creditors in the Debtors' cases before the bankruptcy filing, which engaged in prepetition transactions with SemCrude, L.P.: Creditor Claim Amount -------- ------------ LCS Production Company $5,438,825 Star Production, Inc. 3,042,438 Southlake Exploration, Inc. 204,930 Spalding Energy, Inc. 133,386 Bell Energy 72,113 Tracker Mineral, LLC 63,231 B L Oil Company, Inc. 45,715 Holley Operating, L.L.C. 45,522 Mr. Werb noted that the firm expects the Debtors to list the creditors in its Schedules of Assets and Liabilities. The amounts may not agree with those listed by the Debtors, and the Creditors reserve the right to file claims asserting the amounts based on their business records. Russell R. Johnson III, Esq., disclosed that he represents six creditors that assert unsecured claims arising from prepetition utility usage: * American Electric Power, * Carolina Power & Light Company, * Southern California Edison Company, * Southern California Gas Company, * Virginia Electric and Power Company, and * Westar Energy. 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). 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, represent the Debtors in their restructuring efforts. 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; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SHERWOOD RESOURCES: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Sherwood Resources LLC dba Sherwood United LLC 1771 Upland Dr., Suite 104 Houston, TX 77043 Bankruptcy Case No.: 08-35528 Type of Business: The Debtor is a group of oil and gas land experts. The company is composed of professionals drawn from the top ranks of title experts, surveyors, digital imaging and aerial photogrammetrics specialists. The company is focused solely on leasehold, mineral and royalty acquisition in proven fields and trends. See: http://www.sherwoodresources.com/ Chapter 11 Petition Date: August 26, 2008 Court: Southern District of Texas (Houston) Debtor's Counsel: Patrick D. Devine, Esq. (pdevine@pdevinelaw.com) 4615 SW Fwy, Ste 405 Houston, TX 77027 Tel: (832) 251-2722 Fax: (832) 251-2724 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A list of the Debtor's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/txsb08-35528.pdf SHOE PAVILION: Gets Nasdaq's Delisting Notice Effective Sept. 2 --------------------------------------------------------------- The Nasdaq Stock Market, Inc. has determined to remove from listing the common stock of Shoe Pavilion, Inc., effective at the opening of the trading session on September 2, 2008. Based on a review of the information provided by the company, Nasdaq Staff determined that the company no longer qualified for listing on the Exchange pursuant to Marketplace Rules 4300, 4450(f), and IM-4300. The company was notified of the Staffs determination on July 17, 2008. The company did not appeal the Staff determination to the Hearings Panel, and the Staff determination to delist the company became final on July 28, 2008. About Shoe Pavilion Inc. Headquartered in Sherman Oaks, California, Shoe Pavilion, Inc. (NasdaqGM: SHOE) -- http://www.shoepavilion.com/-- sells branded footwear and accessories. The company operates 115 stores in Washington, Oregon, California, Arizona, Nevada, Texas and New Mexico. The company and its affiliate, Shoe Pavilion Corporation filed for Chapter 11 protection on July 15, 2008 (Bankr. C.D. Calif. Case No. 08-14939). Ron Bender, Esq., at Levene, Neale, Bender, Rankin & Brill L.L.P. represents the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors it listed $60,994,000 in total assets and $27,000,000 in total debts. SOUTH STREET: S&P Puts 'CC' Rating on Cl. A-4A, A-4C and A-4L ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on the class A-3 and A-3L notes issued by South Street CBO 2000-1 Ltd., a high-yield arbitrage collateralized bond obligation (CBO) transaction, and removed them from CreditWatch, where they were placed with positive implications on Aug. 1, 2008. After reviewing the results of cash flow runs to determine the level of future defaults the rated tranches can withstand under various stressed default timing and interest rate scenarios while still paying all of the interest and principal due on the notes, Standard & Poor's has determined that the ratings currently assigned to the class A-3 and A-3L notes remain consistent with the amount of credit enhancement available. RATINGS AFFIRMED AND REMOVED FROM CREDITWATCH POSITIVE South Street CBO 2000-1 Ltd. Rating Balance (mil. $) Class To From Original Current ----- -- ---- -------- ------- A-3 BBB+ BBB+/Watch Pos 30.0 12.332 A-3L BBB+ BBB+/Watch Pos 15.0 6.166 OTHER OUTSTANDING RATINGS South Street CBO 2000-1 Ltd. Balance (mil. $) Class Rating Original Current ----- ------ -------- ------- A-4A CC 8.0 8.0 A-4C CC 10.0 10.0 A-4L CC 20.0 20.0 TRANSACTION INFORMATION Issuer: South Street CBO 2000-1 Ltd. Co-issuer: South Street CBO 2000-1 Corp. Collateral manager: Columbia Management Advisors Inc. Investment manager: Colonial Advisory Services Inc. Underwriter: Bear Stearns Cos. Inc. (The) Indenture trustee: JPMorgan Chase Bank N.A. Cap provider: Wells Fargo Bank N.A. Hedging counterparty: Wells Fargo Bank N.A. SOUTHEAST WAFFLES: Has Accounting Irregularities; Files Bankruptcy ------------------------------------------------------------------ SouthEast Waffles LLC filed for Chapter 11 protection with the U.S. Bankruptcy Court in Tennessee, the Nashville Business Journal reports. Jim Shaub, the Debtor's CEO, related that the company has discovered accounting irregularities, and that they are still investigating this issue and the departure of their chief accountant, according to the Journal. Based in Nashville, Tennessee, SouthEast Waffles LLC is a franchisee of the Waffle House restaurants -- http://www.wafflehouse.com/-- and operates more than 100 Waffle House outlets in Alabama, Mississippi, Kentucky, and Tennessee. The company employs around 2,100 employees. STELLAR MANAGEMENT: S&P Keeps Class K 'CCC' Rating on Watch Neg --------------------------------------------------------------- Standard & Poor's Ratings Services said its ratings on 29 classes from three commercial mortgage-backed securities and commercial real estate collateralized debt obligation transactions remain on CreditWatch with negative implications, where they were placed Aug. 18, 2008, due to concerns with financing for the Riverton Apartments asset. The ratings remain on CreditWatch negative while S&P monitors the workout process for this loan and analyze the related interim-2008 financial reporting. "The Riverton Apartments loan is the sixth-largest loan in the CD 2007-CD4 transaction ($225 million, 3%) and is secured by a 1,230- unit apartment complex in Harlem, N.Y. In addition to the senior debt, the equity interests of the borrower are secured by a $25 million mezzanine loan (3%) that serves as collateral in the CBRE Realty Finance CDO 2007-1 Ltd. transaction. The master servicer for the loan, Wachovia Bank N.A. (Wachovia), transferred the loan to CWCapital on Aug. 8, 2008, after the borrower gave notice that it would not be able to make the Sept. 1, 2008, debt service payment," S&P says. "Standard & Poor's has been in a dialogue with CWCapital over the past week, during which we learned that CWCapital met with representatives from Stellar Management (Stellar) and CBRE Realty Finance to discuss the workout process. Stellar has proposed a loan modification to CWCapital. The borrower has indicated that it would pay the Sept. 1, 2008, debt service payment without a disbursement from the two $2.5 million letters of credit (LOCs) that are controlled by CWCapital and has also indicated it may be prepared to contribute additional capital. Although the parties are now analyzing the proposed loan modification, other workout strategies remain possible, including foreclosure," S&P says. CWCapital conducted a site inspection last week and found the property to be in good condition. The lobbies feature marble floors, and the renovated units have granite countertops, stainless steel appliances, and new kitchen cabinets. As of June 30, 2008, the property was 97.4% occupied, unchanged from issuance, and 128 of the units had been converted to market rents, up from 55 at issuance. The borrower reported that the annual unit conversion rate was approximately 5%, which is in line with Standard & Poor's expectations but 50% lower than the borrower's projections at issuance. "Standard & Poor's will update or resolve the CreditWatch placements when the workout process is closer to completion. At that time, we will complete our review of the loan modification's effect on the transactions, as well as the credit characteristics of the remaining assets in the pools," S&P relates. RATINGS REMAINING ON CREDITWATCH NEGATIVE CD 2007-CD4 Commercial Mortgage Trust Commercial mortgage pass-through certificates Rating Class Rating Credit enhancement (%) ----- ------ ---------------------- E A+/Watch Neg 7.64 F A/Watch Neg 6.89 G A-/Watch Neg 5.89 H BBB+/Watch Neg 4.76 J BBB/Watch Neg 3.76 K BBB-/Watch Neg 2.63 ACAS CRE CDO 2007-1 Ltd. CRE CDO Class Rating ----- ------ C-FX A/Watch Neg C-FL A/Watch Neg D A-/Watch Neg E-FX BBB+/Watch Neg E-FL BBB+/Watch Neg F-FX BBB-/Watch Neg F-FL BBB-/Watch Neg G-FX BB+/Watch Neg G-FL BB+/Watch Neg H B+/Watch Neg J B-/Watch Neg K CCC/Watch Neg CBRE Realty Finance CDO 2007-1 Ltd. CRE CDO Class Rating ----- ------ C A+/Watch Neg D A/Watch Neg E A-/Watch Neg F BBB+/Watch Neg G BBB/Watch Neg H BBB-/Watch Neg J BB+/Watch Neg K BB/Watch Neg L BB-/Watch Neg STEVE & BARRY'S: Schedules Filing Deadline Extended to Sept. 3 -------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of New York approved a request by Steve and Barry's LLC and its debtor-affiliates to further extend the time within which they may file their schedules of assets and liabilities, statements of financial affairs and related documents, for an additional 20 days, through and including September 3, 2008. The Debtors have been diligently working on the Schedules and have made significant progress. However, they will not be able to complete their Schedules by the current deadline, Shai Y. Waisman, Esq., at Weil, Gotshal & Manges LLP, in New York, related. According to Mr. Waisman, two factors hampered the Debtors' progress: (i) The Debtors' finance department has limited personnel, who are working diligently to complete the Schedules in addition to their day-to-day duties; and (ii) The finance department has been tasked with a number of additional responsibilities to help stabilize the Debtors' postpetition operations, including working to preserve vendor relations, collecting a list of creditors, and establishing and maintaining postpetition financial operations. Moreover, the finance department is in the process of preparing the Debtors' business for a sale, he added. The Debtors have discussed the proposed extension with the Official Committee of Unsecured Creditors and the United States Trustee for the Southern District of New York, and each has consented to the request. Headquartered in Port Washington, New York, Steve and Barry LLC -- http://www.steveandbarrys.com/-- is a national casual apparel retailer that offers high quality merchandise at low prices for men, women and children. Founded in 1985, the company operates 276 anchor and junior anchor shopping center and mall-based locations throughout the U.S. At STEVE & BARRY'S (R) stores, shoppers will find brands they can't find anywhere else, including the BITTEN(TM) collection, the first-ever apparel line created by actress and global fashion icon Sarah Jessica Parker, and the STARBURY(TM) collection of athletic and lifestyle apparel and sneakers created with NBA (R) star Stephon Marbury. Steve & Barry's, LLC, and 63 affiliates filed separate voluntary petitions under Chapter 11 on July 9, 2008 (Bankr. S.D. N.Y. Lead Case No. 08-12579). Lori R. Fife, Esq., and Shai Waisman, Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in their restructuring efforts. Diana G. Adams, United States Trustee for Region 2, has appointed seven members to the Official Committee of Unsecured Creditors in the Debtors' Chapter 11 cases. When the Debtors filed for bankruptcy, it listed $693,492,000 in total assets and $638,086,000 in total debts. STONE TOWER: S&P Affirms 'BB' Rating on Class D Securities ---------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on the class A-2 and B notes issued by Stone Tower CLO II Ltd., a high-yield arbitrage collateralized loan obligation (CLO) managed by Stone Tower Debt Advisors. Concurrently, S&P affirmed its rating on the class C notes and removed its ratings on the class A-2, B, and C notes from CreditWatch with positive implications, where they were placed Aug. 1, 2008. The raised ratings reflect factors that have positively affected the credit enhancement available to support the notes. These factors include the delevering of the transaction through the paydown of approximately 60% of the class A-1 notes since the reinvestment period ended in October 2006. According to the most recent trustee report (dated July 17, 2008), the class A overcollateralization ratio was 142.69% and the class B overcollateralization ratio was 131.00%. S&P affirmed its rating on the class C notes because the notes have sufficient enhancement to maintain the current rating. RATINGS RAISED AND REMOVED FROM CREDITWATCH POSITIVE Stone Tower CLO II Ltd. Rating Balance (mil. $) Class To From Current Previous ----- -- ---- ------- -------- A-2 AAA AA/Watch Pos 10.00 10.00 B AA A/Watch Pos 9.50 9.50 RATING AFIRMED AND REMOVED FROM CREDITWATCH POSITIVE Stone Tower CLO II Ltd. Rating Balance (mil. $) Class To From Current Previous ----- -- ---- ------- -------- C BBB BBB/Watch Pos 12.00 12.00 OTHER OUTSTANDING RATINGS Stone Tower CLO II Ltd. Class Rating Balance (mil. $) ----- ------ ---------------- A-1 AAA 96.496 D BB 8.000 TRANSACTION INFORMATION Issuer: Stone Tower CLO II Ltd. Co-issuer: Stone Tower CLO II Corp. Current manager: Stone Tower Debt Advisors Underwriter: Credit Suisse First Boston Corp. Trustee: US Bank Corporate Trust Services Transaction type: Arbitrage high-yield CLO TRANCHE INFORMATION Date (M/YYYY) 8/2008 A-1 note bal. (mil. $) 96.496 A-2 note bal. (mil. $) 10.00 Class A O/C ratio (%) 142.69 Class B note bal. (mil. $) 9.500 Class B O/C ratio (%) 131.00 C note bal. (mil. $) 12.00 Class C O/C ratio (%) 118.72 D note bal. (mil. $) 8.00 Class D O/C ratio (%) 111.73 O/C -- Overcollateralization. STRUCTURED ARM: S&P Junks Ratings on 20 Classes of Securities ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 35 classes from 14 Structured Adjustable Rate Mortgage Loan Trust transactions. "In addition, we removed one of the lowered ratings from CreditWatch with negative implications and affirmed our ratings on 274 other classes from these transactions. These 14 series are all U.S. prime jumbo residential mortgage-backed securities transactions issued in 2004," S&P says. The lowered ratings reflect projected credit support which will likely be insufficient to support the ratings at their current levels. Based on the dollar amount of loans currently in the delinquency pipeline, losses are projected to further reduce credit enhancement. In addition, for those classes downgraded to 'CCC', current credit support may not be sufficient to fully cover projected losses, due to high delinquencies and adverse collateral performance. The rating affirmations reflect actual and projected credit enhancement percentages that are sufficient to support the current ratings. "We will continue to monitor these transactions and will adjust the ratings on the remaining classes if the available credit support is no longer sufficient to support the current ratings," S&P relates. RATINGS LOWERED Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-1 Rating Class CUSIP To From ----- ----- -- ---- B5 86359BHD6 CCC B Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-2 Rating Class CUSIP To From ----- ----- -- ---- B5 86359BLW9 CCC B Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-4 Rating Class CUSIP To From ----- ----- -- ---- B5 86359BPK1 CCC B Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-5 Rating Class CUSIP To From ----- ----- -- ---- B5 86359BQH7 CCC B Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-6 Rating Class CUSIP To From ----- ----- -- ---- B5 86359BTV3 CCC B Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-8 Rating Class CUSIP To From ----- ----- -- ---- B4 86359BWY3 BB- BB B5 86359BWZ0 CCC B Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-10 Rating Class CUSIP To From ----- ----- -- ---- B4 86359BYP0 B BB B5 86359BYQ8 CCC B Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-12 Rating Class CUSIP To From ----- ----- -- ---- B7 863579BJ6 B BB B8 863579BK3 CCC B Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-14 Rating Class CUSIP To From ----- ----- -- ---- B7 863579DB1 B BB B8 863579DC9 CCC B Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-15 Rating Class CUSIP To From ----- ----- -- ---- B4 863579DL9 CCC BB Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-16 Rating Class CUSIP To From ----- ----- -- ---- B6 863579FJ2 BBB- BBB B7 863579FL7 CCC BB B8 863579FM5 CCC B Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-18 Rating Class CUSIP To From ----- ----- -- ---- B6 863579GP7 BB BBB B6X 863579GQ5 BB BBB B7 863579GR3 BB- BBB B7X 863579GS1 BB- BBB B8 863579GU6 CCC BB B8X 863579GV4 CCC BB B9 863579GW2 CCC B Structured Adjustable Rate Mortgage Loan Trust Series 2004-19 Series 2004-19 Rating Class CUSIP To From ----- ----- -- ---- B7-I 863579JT6 CCC BB B8-I 863579JU3 CC B B8-II 863579JX7 CCC B Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-20 Rating Class CUSIP To From ----- ----- -- ---- B7 863579HU5 BBB- A- B7X 863579HY7 BBB- A- B8 863579HV3 BB BBB B8X 863579HW1 BB BBB B9 863579HX9 BB- BBB B10 863579JA7 CCC BB B11 863579JB5 CCC B RATINGS LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-15 Rating Class CUSIP To From ----- ----- -- ---- B5 863579DM7 CCC B/Watch Neg RATINGS AFFIRMED Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-1 Class CUSIP Rating ----- ----- ------ 1-A 86359BFY2 AAA 2-A 86359BFZ9 AAA 2-AX 86359BGA3 AAA 3-A1 86359BGB1 AAA 3-A2 86359BGC9 AAA 3-A3 86359BGD7 AAA 4-A1 86359BGF2 AAA 4-A2 86359BGG0 AAA 4-A3 86359BGH8 AAA 4-A5 86359BGK1 AAA 4-AX 86359BGL9 AAA 4-PAX 86359BGM7 AAA 5-A 86359BGN5 AAA 5-AX 86359BGP0 AAA 6-A 86359BGQ8 AAA B1-I 86359BGS4 AA B1X-I 86359BGT2 AA B1-II 86359BGW5 AA B1X-II 86359BGX3 AA B2-I 86359BGU9 A B2X-I 86359BGV7 A B2-II 86359BGY1 A B3 86359BHA2 BBB B4 86359BHC8 BB 4-A4 86359BGJ4 AAA 6-AX 86359BGR6 AAA Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-2 Class CUSIP Rating ----- ----- ------ 1-A1 86359BKY6 AAA 1-A2 86359BKZ3 AAA 1-AX 86359BLA7 AAA 2-A 86359BLB5 AAA 3-A 86359BLC3 AAA 3-AX 86359BLD1 AAA 4-A1 86359BLE9 AAA 4-A2 86359BLF6 AAA 4-A3 86359BMC2 AAA 4-AX 86359BLG4 AAA 4-PAX 86359BLH2 AAA 5-A 86359BLJ8 AAA 5-AX 86359BLK5 AAA B1-I 86359BLL3 AA B1X-I 86359BLM1 AA B1-II 86359BLQ2 AA B2-I 86359BLN9 A B2X-I 86359BLP4 A B2-II 86359BLS8 A B3 86359BLT6 BBB B4 86359BLV1 BB Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-4 Class CUSIP Rating ----- ----- ------ 1-A1 86359BNL1 AAA 1-A2 86359BNM9 AAA 1-A3 86359BNN7 AAA 2-A 86359BNQ0 AAA 3-A1 86359BNT4 AAA 3-A2 86359BNU1 AAA 3-A3 86359BNV9 AAA 3-A4 86359BNW7 AAA 3-A5 86359BNX5 AAA 3-A6 86359BNY3 AAA 3-AX 86359BNZ0 AAA 3-PAX 86359BPA3 AAA 4-A 86359BPB1 AAA 4-AX 86359BPC9 AAA 5-A 86359BPD7 AAA B1 86359BPE5 AA B2 86359BPF2 A B3 86359BPG0 BBB B4 86359BPJ4 BB Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-5 Class CUSIP Rating ----- ----- ------ 1-A 86359BPM7 AAA 2-A 86359BPP0 AAA 3-A2 86359BPR6 AAA 3-A3 86359BPS4 AAA 3-A4 86359BPT2 AAA 3-A5 86359BPU9 AAA 3-A6 86359BPV7 AAA 3-AX 86359BPW5 AAA 3-PAX 86359BPX3 AAA 4-A 86359BPY1 AAA 4-AX 86359BPZ8 AAA 5-A 86359BQA2 AAA 5-AX 86359BQB0 AAA B1 86359BQC8 AA B2 86359BQD6 A B3 86359BQE4 BBB B4 86359BQG9 BB Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-6 Class CUSIP Rating ----- ----- ------ 1-A 86359BTA9 AAA 2-A 86359BTB7 AAA 3-A1 86359BTC5 AAA 3-A2 86359BVE8 AAA 3-A3 86359BVF5 AAA 4-A1 86359BTD3 AAA 4-A2 86359BTE1 AAA 5-A1 86359BTF8 AAA 5-A2 86359BTG6 AAA 5-A3 86359BTH4 AAA 5-A4 86359BTJ0 AAA 5-A5 86359BTK7 AAA 5-A6 86359BTL5 AAA 6-A 86359BTM3 AAA B1 86359BTN1 AA B1-X 86359BTP6 AA B2 86359BTQ4 A B2-X 86359BTR2 A B3 86359BTS0 BBB B4 86359BTU5 BB Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-8 Class CUSIP Rating ----- ----- ------ 1-A1 86359BWB3 AAA 1-A2 86359BWC1 AAA 1-A3 86359BWD9 AAA 2-A1 86359BWE7 AAA 2-A2 86359BWF4 AAA 3-A 86359BWG2 AAA 4-A 86359BWJ6 AAA 5-A3 86359BWN7 AAA 5-A4 86359BWP2 AAA 5-A4B 86359BXB2 AAA 5-A5 86359BWQ0 AAA 5-A5B 86359BXC0 AAA 5-A6 86359BWR8 AAA 5-A6B 86359BXD8 AAA B1 86359BWS6 AA B1-X 86359BWT4 AA B2 86359BWU1 A B2-X 86359BWV9 A B3 86359BWW7 BBB Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-10 Class CUSIP Rating ----- ----- ------ 1-A1 86359BYK1 AAA 1-A2 86359BXZ9 AAA 1-A3 86359BYA3 AAA 2-A 86359BYB1 AAA 3-A1 86359BYC9 AAA 3-A2 86359BYD7 AAA 3-A3 86359BYE5 AAA 4-A 86359BYF2 AAA 4-AX 86359BYG0 AAA B1 86359BYL9 AA B1-X 86359BYH8 AA B2 86359BYM7 A B2-X 86359BYJ4 A B3 86359BYN5 BBB Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-12 Class CUSIP Rating ----- ----- ------ 1-A1 863579AL2 AAA 1-A2 863579AM0 AAA 1-A3 863579BP2 AAA 2-A 863579AN8 AAA 3-A1 863579AP3 AAA 3-A2 863579AQ1 AAA 3-A3 863579BQ0 AAA 3-AX 863579AR9 AAA 4-A 863579AS7 AAA 5-A 863579AT5 AAA 6-A 863579AU2 AAA 7-A1 863579AV0 AAA 7-A2 863579AW8 AAA 7-A3 863579AX6 AAA 7-AX 863579AY4 AAA 8-A 863579AZ1 AAA 9-A 863579BA5 AAA B1 863579BC1 AA+ B1-X 863579BD9 AA+ B2 863579BE7 AA B2-X 863579BF4 AA B3 863579BG2 AA- B3-X 863579BT4 AA- B4 863579BV9 A B4-X 863579BU1 A B5 863579BW7 A- B6 863579BX5 BBB Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-15 Class CUSIP Rating ----- ----- ------ A 863579DE5 AAA B1 863579DF2 AA B2 863579DG0 A B3 863579DH8 BBB BX 863579DJ4 BBB Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-14 Class CUSIP Rating ----- ----- ------ 1-A 863579CB2 AAA 2-A 863579CC0 AAA 3-A1 863579CD8 AAA 3-A2 863579CE6 AAA 3 AX 863579CF3 AAA 3-PAX 863579CG1 AAA 4-A 863579CH9 AAA 5-A1 863579CJ5 AAA 5-A2 863579CK2 AAA 5-AX 863579CL0 AAA 5-PAX 863579CM8 AAA 6-A 863579CN6 AAA 7-A 863579CP1 AAA M 863579CQ9 AAA MX 863579CR7 AAA B1 863579CS5 AA+ B1-X 863579DP0 AA+ B2 863579CT3 AA B2-X 863579CU0 AA B3 863579CV8 AA- B3-X 863579CW6 AA- B-4 863579CX4 A B-5 863579CY2 A- B6 863579CZ9 BBB Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-16 Class CUSIP Rating ----- ----- ------ 1-A1 863579EF1 AAA 1-A2 863579EG9 AAA 1-A3 863579EH7 AAA 2-A 863579EJ3 AAA 3-A-1 863579EK0 AAA 3-A2 863579EL8 AAA 4-A 863579EP9 AAA 4-AX 863579EQ7 AAA 4-PAX 863579ER5 AAA 5-A1 863579ES3 AAA 5-A2 863579ET1 AAA 5-A3 863579EU8 AAA 5-AX 863579EV6 AAA 5-AIO 863579EW4 AAA 5-C 863579FP8 AAA 6-A 863579EX2 AAA M 863579EY0 AAA MX 863579EZ7 AAA B1 863579FA1 AA+ B1X 863579FB9 AA+ B2 863579FC7 AA B2X 863579FD5 AA B3 863579FE3 AA- B3X 863579FF0 AA- B4 863579FG8 A B5 863579FH6 A- Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-18 Class CUSIP Rating ----- ----- ------ 1-A1 863579FQ6 AAA 1-A2 863579FR4 AAA 1-A3 863579FS2 AAA 2-A 863579FT0 AAA 3-A1 863579FU7 AAA 3-A2 863579FV5 AAA 4-A1 863579FW3 AAA 4-A2 863579FX1 AAA 4-PAX 863579FZ6 AAA 5-A 863579GA0 AAA 5-AX 863579GB8 AAA M 863579GC6 AA+ MX 863579GD4 AA+ B1 863579GE2 AA+ B1X 863579GF9 AA+ B2 863579GG7 AA B2X 863579GH5 AA B3 863579GJ1 AA- B3X 863579GK8 AA- B4 863579GL6 A B5 863579GM4 A- B5X 863579GN2 A- 4-AX 863579FY9 AAA Structured Adjustable Rate Mortgage Loan Trust Series 2004-19 Series 2004-19 Class CUSIP Rating ----- ----- ------ 1-A1 863579JD1 AAA 1-A2 863579JE9 AAA 1-A2X 863579JF6 AAA 2-A1 863579JG4 AAA 2-A2 863579JH2 AAA B1 863579JK5 AA B2 863579JL3 AA B3 863579JM1 A+ B4 863579JN9 A B5 863579JP4 BBB+ B6 863579JQ2 BBB- BX 863579JR0 BBB- B7-II 863579JW9 BB Structured Adjustable Rate Mortgage Loan Trust (SARML) Series 2004-20 Class CUSIP Rating ----- ----- ------ 1-A1 863579GY8 AAA 1-A2 863579GZ5 AAA 1-A3 863579HA9 AAA 2-A1 863579HB7 AAA 2-A2 863579HC5 AAA 3-A1 863579HD3 AAA 3-A2 863579HE1 AAA 4-A 863579HF8 AAA 5-A 863579HG6 AAA B1 863579HH4 AA+ B1X 863579HJ0 AA+ B2 863579HK7 AA+ B2X 863579HL5 AA+ B3 863579HM3 AA B3X 863579HN1 AA B4 863579HP6 AA B4X 863579HQ4 AA B5 863579HR2 AA- B5X 863579HS0 AA- B6 863579HT8 A STUDIO THEATRE: Hopes Kidman's Comment to Spur Donation Momentum ---------------------------------------------------------------- Buffalo's struggling Studio Arena Theatre is gaining an unexpected supporter, actress Nicole Kidman, according to WKBW-TV (N.Y.). Ms. Kidman, speaking to reporters on the set of her latest film, made some remarks about the importance of saving regional theaters like Studio Arena, the report said, citing the London Mirror. The report says now the theater is hoping that the publicity from this will build some donation momentum. Studio Arena had racked up nearly $3 million in debts, according to the report. Based in Buffalo, NY, Studio Theatre School is a not-for-profit theater school and production company. It filed for bankruptcy on June 18, 2008 (Bankr. W.D.N.Y., Case No. 08-12680). Garry M. Graber, Esq., at Hodgson Russ LLP, represents the Debtor. When the Debtor filed for bankruptcy, it estimated both assets and debts between $1 million and $50 million. SUTTER CBO: S&P Affirms 'CCC' Rating on Class B-2 Securities ------------------------------------------------------------ Standard & Poor's Ratings Services raised its ratings on the class A-3L, B-1, and B-1L notes issued by Sutter CBO 2000-2 Ltd., a high-yield arbitrage collateralized bond obligation (CBO) transaction. Concurrently, S&P removed the rating on class A-3L from CreditWatch with positive implications, where it was placed on Aug. 1, 2008. Lastly, S&P affirmed its ratings on classes A-2L and B-2. The raised ratings reflect factors that have positively affected the credit enhancement available to support the notes since S&P downgraded them in March 2003. These factors include the delevering of the transaction through the paydown of the class A- 2L notes, which have paid down approximately $83.950 million since March 2003. According to the most recent trustee report, dated Aug. 17, 2008, the class A overcollateralization ratio is 215.12%, compared with a reported ratio of 126.03% at the time of the last downgrade. RATING RAISED AND REMOVED FROM CREDITWATCH POSITIVE Sutter CBO 2000-2 Ltd. Rating Class To From Current bal. (mil. $) ----- -- ---- --------------------- A-3L AAA AA+/Watch Pos 42.000 RATINGS RAISED Sutter CBO 2000-2 Ltd. Rating Class To From Current bal. (mil. $) ----- -- ---- --------------------- B-1 BB+ BB 24.000 B-1L BB+ BB 16.000 RATINGS AFFIRMED Sutter CBO 2000-2 Ltd. Class Rating Current bal. (mil. $) ----- ------ --------------------- A-2L AAA 21.050 B-2 CCC 19.000 TRANSACTION INFORMATION Issuer: Sutter CBO 2000-2 Ltd. Co-issuer: Sutter CBO 2000-2 (Delaware) Corp. Collateral manager: Wells Fargo Bank N.A. South Dakota Underwriter: Bear Stearns Cos. LLC Trustee: Wells Fargo Bank N.A. South Dakota Transaction type: Arbitrage high-yield CBO TRANCHE PRIOR CURRENT INFORMATION ACTION ACTION ----------- ------ ------- Date (MM/YYYY) 03/2003 08/2008 A-2L note balance (mil. $) 105.00 21.05 A-3L note balance (mil. $) 42.00 42.00 B-1 note balance (mil. $) 24.00 24.00 B-1L note balance (mil. $) 16.00 16.00 B-2 note balance (mil. $) 19.00 19.00 Class A O/C ratio (%) 126.03 215.12 Class A O/C ratio min. (%) 118.00 118.00 Class B1 O/C ratio (%) 106.77 130.09 Class B1 O/C ratio min. (%) 108.00 108.00 Class B2 O/C ratio (%) 99.35 108.95 Class B2 O/C ratio min. (%) 103.00 103.00 SYMPHONY CLO: S&P Assigns 'BB' Rating on Class D Securities ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Symphony CLO VI Ltd./Symphony CLO VI Corp.'s $354.9 million floating-rate notes due 2019. The preliminary ratings are based on information as of Aug. 27, 2008. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: -- The expected level of credit support in the form of subordination provided by the notes junior to the respective classes and by the income notes; -- The transaction's expected excess spread; -- The cash flow structure, which was subjected to various stresses requested by Standard & Poor's; and -- The transaction's legal structure, which includes the issuer's bankruptcy remoteness. PRELIMINARY RATINGS ASSIGNED Symphony CLO VI Ltd./Symphony CLO VI Corp. Class Rating Amount (mil. $) ----- ------ --------------- A-1 AAA 285.00 A-2 AA 24.80 B A 23.10 C BBB 8.00 D BB 14.00 Income notes NR 30.37 NR -- Not rated. SYNTAX-BRILLIAN: Judge Tentatively Approves Assets Sale to TCV -------------------------------------------------------------- William Rochelle of Bloomberg News reports that Syntax-Brillian Corp. and its debtor-affiliates told the U.S. Bankruptcy Court for the District of Delaware on Aug. 22 that it revised a proposed order to incorporate the court's rulings at an Aug. 20 hearing, where the judge tentatively approved the sale of assets to TCV Industries Co. for the assumption of $60 million in secured debt. The Troubled Company Reporter said on July 9, 2008, that the Debtors entered into an asset purchase agreement to sell certain of their assets to Olevia International Group, LLC, which is under common ownership with TCV Group. Under the terms of the agreement, Olevia International will assume $60 million of the Debtors' secured debt obligations to Silver Point Finance LLC in exchange for the purchased assets. Silver Point committed to provide up to $23 million in debtor-in-possession financing to the Debtors under a certain DIP credit and guaranty agreement. The Debtors were allowed to access at least $7.5 million in financing, on an interim basis. A full-text copy of the asset purchase agreement is available for free at http://ResearchArchives.com/t/s?2f40 The parties that raised objections to the sale includes: A. Tanner DeWitt, a Hong Kong law firm; Amr Mahmoud, a purported shareholder ; W. David Klemperer, another purported shareholder; Charles M. Cerny; the city of St. Clair Shores Police and Fire Retirement System, lead plaintiff in a class action against the Debtors; Funai Electric Co., Ltd. and Funai Corporation, Inc.; the Official Committee of Unsecured Creditors and Circuit City Stores, Inc. Based 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. Five members compose the Official Committee of Unsecured Creditors. Epiq Bankruptcy Solutions, LLC is the Debtors' balloting, notice, and claims agent. When the Debtors filed for protection against their creditors, they listed total assets of $175,714,000 and total debts of $259,389,000. TCW SELECT: Moody's Lifts $16 Mil. Senior Secured Notes to Ba1 -------------------------------------------------------------- Moody's Investors Service upgraded these notes issued by TCW Select Loan Fund, Ltd.: Class Description: $62,000,000 Class A-2 Senior Secured Floating Rate Notes due 2013 -- Prior Rating: Aa3 -- Current Rating: Aa1 Class Description: $25,000,000 Class B Senior Secured Floating Rate Notes due 2013 -- Prior Rating: A3 -- Current Rating: Aa2 Class Description: $15,000,000 Class C Senior Secured Floating Rate Notes due 2013 -- Prior Rating: Baa2 -- Current Rating: A3 Class Description: $11,000,000 Class D-1 Senior Secured Floating Rate Notes due 2013 -- Prior Rating: Ba3 -- Current Rating: Ba1 Class Description: $5,000,000 Class D-2 Senior Secured Floating Rate Notes due 2013 -- Prior Rating: Ba3 -- Current Rating: Ba1 According to Moody's, the rating action is a result of the ongoing delevering of the transaction. TEEKAY CORP: Cut by S&P to 'BB' on Weaker Financial Risk Profile ---------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its ratings, including the long-term corporate credit rating, on Vancouver, B.C.-based Teekay Corp. to 'BB' from 'BB+'. The outlook is stable. "At the same time, we lowered our issue rating on the company's US$350 million senior unsecured bonds maturing July 2011 to 'BB' (the same as the corporate credit rating on Teekay) from 'BB+', and revised the recovery rating to '3' from '4'. The '3' recovery rating indicates the expectation of meaningful (50%-70%) recovery in the event of payment default. As at June 30, US$226 million of these bonds remains outstanding," S&P says. "The downgrade reflects Teekay's weakened financial risk profile from the company's aggressive use of debt to finance its acquisitions and expand its fleet, as well as its exposure to the volatile spot tanker industry," said Standard & Poor's credit analyst Greg Pau. "Partially mitigating these risks are Teekay's market-leading and defendable position in the shuttle tanker business, increasing revenue contribution from more stable liquefied gas and offshore segments, a strong customer base, and a young fleet," Mr. Pau added. "Teekay has delayed its debt reduction and because of debt- financed acquisitions and new vessel purchases, its financial measures deteriorated. The company intends to resume reducing debt with its cash flow generation, in addition to issuing equity at its subsidiaries and disposing of some of its vessels. However, its ability to do so depends on investor appetite and conditions in the equity and vessel markets, both of which are largely beyond the company's control. The current financial measures are weak for the revised rating level, reflecting our expectation of continued debt reduction within the company's internal gearing targets for each of its businesses in the coming year," S&P says. Teekay has a leading market share in the shuttle tanker segment, which should be defendable given its capital intensity, protection from long-term contracts, strong track record, and customer relationships. The company's market position is supported by an extensive and young 163-vessel fleet. Teekay's exposure to the volatile spot market should decrease over time as a large proportion of the recently acquired vessels and new buildings operate under fixed-rate, long-term contracts. "The stable outlook reflects Teekay's strengthened product offering and market positions. However, its current financial risk profile is weak for the rating and it's crucial the company improve it in the near term. The outlook also reflects our expectation that Teekay's adjusted debt to EBITDA will fall below 6x and adjusted funds from operations (FFO) to debt will reach 20% in the next 12 months through the company's deleveraging efforts. We could revise the rating or outlook on the company downward if its debt reduction plan falls materially short of our expectations. Conversely, we could revise the rating or outlook upward when the company improves its adjusted debt to EBITDA to below 5.0x and adjusted FFO to debt to above 20%, while maintaining its strong market positions and reducing its exposure to the spot tanker business," S&P says. TEGRANT CORP: S&P Downgrades Rating to 'CCC', Outlook Negative -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on DeKalb, Ill.-based Tegrant Corp. to 'CCC' from 'CCC+'. The outlook is negative. "At the same time, we lowered the ratings on the company's $265 million senior secured credit facilities to 'CCC+' from 'B' and the rating on the company's $75 million second-lien term loan facility to 'CC' from 'CCC-'. The recovery rating on the senior secured facilities was revised to '2' from '1', reflecting our expectation of substantial (70% to 90%) recovery in the event of a payment default. The recovery rating on the second-lien term loan facility remains '6', indicating our expectation for negligible (0% to 10%) recovery in the event of a payment default," S&P says. "The downgrade reflects weaker-than-expected operating performance, a highly leveraged financial profile, and concerns regarding the potential for liquidity to deteriorate in the face of tightening covenant restrictions for the next two quarters," said Standard & Poor's credit analyst Ket Gondha. While the company has an equity cure available in the third quarter to alleviate covenant restrictions, this will only provide temporary relief, as there is no cure option available for the fourth quarter as per the loan agreement. If Tegrant is unable to generate sufficient operating profits in the near term, it will have to find alternative sources of liquidity or renegotiate its loan agreements, which could result in meaningfully higher credit margins on the company's borrowings. The ratings on Tegrant reflect the company's relatively narrow scope of operations, some exposure to weak housing-related end markets, and a highly leveraged capital structure. In addition, Tegrant participates in fragmented and competitive markets. These negatives are partially offset by the company's market-leading positions in niche segments of the packaging industry, its diversified customer base, and its manageable debt maturity schedule. With annual sales exceeding $400 million, Tegrant provides protective, retail, and temperature-assurance packaging products for a range of North American end markets, including consumer, health care, and auto components. TERWIN MORTGAGE: S&P Junks 2006-10SL Class A-X Rating ----------------------------------------------------- Standard & Poor's Ratings Services reinstated and affirmed its pre-Aug. 26, 2008, 'AAA' rating on class A-1 from Terwin Mortgage Trust 2006-10SL. The revised rating reflects a financial guarantee insurance policy on the class A-1 certificates issued by Financial Security Assurance Inc. ('AAA'). At the same time, S&P lowered the rating on class A-X from the same transaction to 'CC' from 'AAA' due to adverse collateral performance. Standard & Poor's inadvertently lowered the class A-1 rating and affirmed the class A-X rating as part of S&P's Aug. 26, 2008, rating actions affecting U.S. closed-end second-lien residential mortgage-backed securities transactions issued in 2005 and 2006. This transaction is backed by fixed-rate closed-end second-lien mortgage loans secured by residential properties. The mortgage loans have original maturities of up to 30 years. RATING REINSTATED AND AFFIRMED Terwin Mortgage Trust 2006-10SL Class Rating ----- ------ A-1 AAA RATING LOWERED Terwin Mortgage Trust 2006-10SL Rating Class To From ----- -- ---- A-X CC AAA TIAA SEASONED: Fitch Affirms Ratings on 21 Series 2007-C4 Certs. ---------------------------------------------------------------- Fitch affirms TIAA Seasoned Commercial Mortgage Pass-Through Certificates, Series 2007-C4 as: -- $480.1 million class A-1 at 'AAA'; -- $324.7 million class A-2 at 'AAA'; -- $686 million class A-3 at 'AAA'; -- $109.7 million class A-1A at 'AAA'; -- $227.5 million class A-J at 'AAA'; -- Interest-only class X at 'AAA'; -- $10.5 million class B at 'AA+'; -- $28.8 million class C at 'AA'; -- $18.3 million class D at 'AA-'; -- $5.2 million class E at 'A+'; -- $15.7 million class F at 'A'; -- $20.9 million class G at 'A-'; -- $13.1 million class H at 'BBB+'; -- $23.5 million class J at 'BBB'; -- $7.8 million class K at 'BBB-'; -- $7.8 million class L at 'BB+'; -- $7.9 million class M at 'BB'; -- $2.6 million class N at 'BB-'; -- $7.9 million class P at 'B+'; -- $2.6 million class Q at 'B'; and -- $2.6 million class S at 'B-'; Fitch does not rate the $15.7 million class T. The affirmations are due to the pool's stable performance and limited paydown since issuance. As of the August 2008 distribution date, the pool's aggregate principal balance has decreased 3.3% to $2.02 billion from $2.09 billion at issuance. There have been no specially serviced or delinquent loans since issuance. There are 34 shadow rated loans that remain in the transaction (38.5%). Fitch reviewed the latest available financials, and all of the shadow rated loans are generally performing inline with expectations. Clayton Corporate Park (0.55%) has defeased. The 1000 Broadway/Fox Tower portfolio represents the largest loan in the transaction (5.1%) and is shadow rated investment grade by Fitch. The loan is secured by two high quality office towers located in Portland, Oregon. The properties have a diversified tenant mix of office and retail, with over 80 tenants, and no tenant represents more than 16% of the combined building's net rentable area. While the properties have release provisions, in order for either property to be released, they must both have a minimum DSCR of 1.50x and a maximum LTV of 65%. As of YE 2007, occupancy improved to 99% from 95% at issuance, and the DSCR was inline with issuance at 1.58x. The second largest loan in the transaction, Sammamish Parkplace (4.26%), shadow rated, is secured by an office property in Issaquah, Washington. The collateral consist of three multilevel buildings situated in a campus-like setting on 20 acres of land in a picturesque landscaped setting. Located in the Eastside office market within the Seattle MSA, the current vacancy rate according to Torto Wheaton Research is 5.3%. The property is 100% occupied by Microsoft Systems with staggered lease maturities ranging from 2008-2011. As of YE2007, the DSCR was 1.94x, as compared to 2.11x at issuance. TRAINER WORTHAM: Fitch Cuts Ratings on 5 Note Classes ----------------------------------------------------- Fitch downgrades and removes from Rating Watch Negative five classes of notes issued by Trainer Wortham First Republic CBO V Ltd. These rating actions are effective immediately: -- $221,541,223 class A-1 notes downgrade to 'A-' from 'AA' and removed from Rating Watch Negative; -- $34,000,000 class A-2 notes downgrade to 'BBB-' from 'A+' and removed from Rating Watch Negative; -- $28,000,000 class B notes downgrade to 'B' from 'A' and removed from Rating Watch Negative; -- $10,000,000 class C notes downgrade to 'CC' from 'BBB+' and removed from Rating Watch Negative; -- $10,118,439 class D notes downgrade to 'C' from 'BB+' and removed from Rating Watch Negative. Fitch's rating actions reflect the collateral deterioration within the portfolio and underlying exposure to residential mortgage- backed securities. Trainer Wortham V is a collateralized bond obligation (CBO) that closed on Nov. 30, 2004, and is managed by Trainer Wortham & Co. Inc. Presently, 35.6% of the portfolio consists of U.S subprime RMBS, 8% of which are from 2005 and 2006 vintages, 27.3% of the portfolio is prime RMBS, 22.3% is Alternative-A RMBS, 8.5% is CDO, 3.2% is asset backed securities, and 3.1% is commercial mortgage backed securities. Since the last review in November 2007, approximately 28.8% of the portfolio has been downgraded with 7.9% of the portfolio currently on Rating Watch Negative. Currently, 22.5% of the portfolio is rated below investment grade, of which 11.5% of the portfolio is rated 'CCC+' and below. Currently, the class A/B overcollateralization ratios is passing its minimum level of 104.4%; however the class C and class D OC ratios are failing their respective triggers of 103.0% and 101.1% as of the June 1, 2008, trustee report. All classes of notes except for Class D are receiving interest distributions at this time and principal proceeds are being used to amortize the class A-1 notes. The principal of class D is PIK, whereby its principal balance is written up by the amount of interest owed. The downgrades to the rated notes are a result of the credit deterioration experienced to date and reflect Fitch's updated view of the default risk associated with each of the notes. Fitch is reviewing its SF CDO approach and will comment separately on any changes and potential rating impact at a later date. Fitch will continue to monitor and review this transaction for future rating adjustments. The ratings of the class A-1, A-2 and B notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, and ultimate repayment of the stated principal balance by the legal final maturity date. The ratings of the class C and D notes address the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, and ultimate repayment of the stated principal balance by the legal final maturity date. TRIAD GUARANTY: Business Conversion Cues Fitch to Withdraw Ratings ------------------------------------------------------------------ Fitch Ratings has withdrawn the ratings of Triad Guaranty Inc. and its mortgage insurance subsidiary Triad Guaranty Insurance Corporation. Fitch has withdrawn these ratings, which were on Rating Watch Negative: Triad Guaranty Insurance Corporation -- Insurer financial strength 'BB'. Triad Guaranty Inc. -- Long-term issuer rating to 'CCC'. -- $35 million 7.9% fixed coupon senior notes due Jan.15, 2028 'CCC/RR4'. The action follows an announcement by Triad's management that it is transitioning its business into run-off and Fitch believes there is little investor interest in continued coverage of this rating. Fitch notes that Triad's ratings had incorporated the full execution of the company's reinsurance facilities. In April of 2008, a third-party reinsurance provider notified Triad that it would be terminating a $95 million reinsurance facility on the grounds of a covenant violation. Triad disagrees with the reinsurer's conclusion and, as stipulated by the reinsurance contract, has initiated an arbitration process to settle the dispute. Fitch is not in a position to ascertain the ultimate outcome of the arbitration process, but notes that this reinsurance facility is a significant component of Triad's overall claims-paying resources. Triad Guaranty is a holding company that provides private mortgage insurance coverage in the United States through Triad, its wholly owned subsidiary. For June 30, 2008, Triad Guaranty reported consolidated assets under Generally Accepted Accounting Principles of $1.1 billion and shareholders' equity of approximately $141 million. TRIAXX FUNDING: Fitch Affirms Ratings on Four Classes of Notes -------------------------------------------------------------- Fitch Ratings has affirmed these classes of mezzanine floating- rate notes from Triaxx Funding High Grade I, Ltd: -- $80,000,000 class B-1 affirmed at 'CCC' and removed from Rating Watch Negative; -- $41,000,000 class B-2 affirmed at 'CCC' and removed from Rating Watch Negative; -- $149,375,000 class C deferrable interest notes affirmed at 'C'; -- $8,000,000 class D deferrable interest notes affirmed at 'C'. The ratings of the classes B-1 and B-2 notes reflect the likelihood that investors will receive periodic interest payments through the redemption date as well as their respective stated principal balances. The ratings of the classes C and D notes only reflect the likelihood that investors will ultimately receive their interest and principal balances by the legal final maturity date. Triaxx Funding High Grade I Ltd. invests in 'AAA' rated residential mortgage backed securities assets using proceeds raised by issuing notes and equity well as using repo funding. The credit quality of the underlying assets has remained stable but the market prices have continued to drop. The ratings reflect the continued distress in asset pricing, the short-term nature of the repo financing, and delevering of the program that has led to further realization of losses. The removal from negative rating watch reflects a reduction in the likelihood of an imminent liquidation of the entire portfolio. TRIBUNE CO: Fitch Junks Issuer Default Rating to CCC; Outlook Neg. ------------------------------------------------------------------ Fitch Ratings downgraded the ratings on Tribune Company: -- Issuer Default Rating to 'CCC' from 'B-'; -- Senior guaranteed revolving credit facility to 'CCC+/RR3' from 'B/RR3'; -- Senior guaranteed term loan to 'CCC+/RR3' from 'B/RR3'; -- Senior unsecured bridge loan to 'CC/RR6' from 'CCC/RR6'; -- Senior unsecured notes to 'CC/RR6' from 'CCC/RR6'; -- Subordinated exchangeable debentures due 2029 to 'CC/RR6' from 'CCC-/RR6'. Approximately $13.4 billion of debt is affected by this action. The Rating Outlook is Negative. The downgrade and Negative Outlook reflect these considerations: -- Given the acceleration of declines in newspaper advertising revenue and cash flow at Tribune and no evidence from any participants in the industry regarding the prospects for current pressure relenting, Fitch believes Tribune's credit profile is consistent with a 'CCC' rating. For issuers in the 'CCC' rating category, default is a real possibility and the capacity to meet financial commitments is vulnerable to deterioration in business and economic conditions. Fitch notes business and economic conditions have been rapidly deteriorating for newspaper companies over the past 12 months. -- On August 13, TRB announced continued weak operating and financial results. On a comparable basis, in the second quarter of 2008, publishing revenue was down 11%, costs were down 4% and operating EBITDA was off 38%, reflecting the significant operating leverage in the business as cost cuts have not been able to compensate for the revenue deterioration. Advertising revenue has been under pressure across advertising categories with classifieds continuing to post double-digit declines (over 40% for real estate classifieds). Interactive revenue was also down 4%. On the broadcasting side, revenue has been up modestly while costs were also up (7.5%) and operating EBITDA decreased 3%. -- Fitch is aware that there is limited visibility regarding the likelihood, timeframe and magnitude of a potential reversal of these negative trends. -- Over the longer term Fitch continues to anticipate that the company will be challenged to generate meaningful and consistent revenue growth, and remains cautious regarding newspaper companies' prospects for capturing and monetizing the significant volume of advertising dollars that are migrating toward the internet. While the second half of 2008 should be favorable for the broadcasting division, Fitch expects 2009 to be a weak year for TV broadcasting stations, particularly those affiliated with lower rated networks (e.g. The CW Network). -- Cost cuts announced and implemented in the first half of 2008 should help in the intermediate term, but Fitch notes that even more action may be necessary to offset the rapid erosion of advertising dollars. Newsprint prices have been escalating but have largely been offset by reduced consumption through web width reductions, fewer pages (lower advertising, less editorial, and actions such as elimination of stock charts) and discontinuation of low-value circulation. -- Fitch expects TRB to continue to pursue asset sales (namely the sale of the Chicago Cubs franchise and the company's 25% stake in Comcast SportsNet Chicago) to enable it to address principal amortization ($593 million) on the tranche X of its term loan facility in June of 2009. However, further asset monetization may be necessary. In the long run, Fitch is concerned about the company's ability to generate cash to meet its interest payments, principal amortization and maturities under its debt obligations in a timely manner. In the near term, Fitch believes the company can meet its obligations for several quarters, but has grown more concerned regarding the room the company has around its covenants given the pressured EBITDA generation. -- TRB has limited flexibility around its 9 times (x) guaranteed leverage covenant. Fitch calculates the ratio to be in the low-to-mid 8x range at June 30, 2008. If the company were to experience similar declines in the second half of the year as experienced in the first half, and sells the Cubs and SportsNet stakes before year-end for net proceeds of more than $675 million (which appears realistic), it could be under the 9x leverage covenant. However, if negative trends accelerate or if the Cubs/SportsNet deal is not completed the company could be at risk of breaching the threshold. Also, Fitch recognizes that even with the Cubs sale, the company faces a material risk of breaching the covenant threshold when it steps down in first- quarter 2009 to 8.75x. While the company could receive an amendment or waiver from the banks if it breaches a covenant, in this credit environment Fitch is uncertain and cautious regarding the terms of such a potential negotiation for such a highly leveraged entity with deteriorating prospects. In this scenario, the receipt of a waiver or amendment without an upturn in business prospects is not likely to have a positive impact on the rating. However, failure to receive covenant relief could result in a restructuring (not necessarily bankruptcy) that would likely further pressure ratings. -- Tribune management has met or exceeded Fitch's expectations on the elements of its business over which it has more explicit control: expense containment, asset sales and exclusive dedication of cash flow toward debt repayment. Fitch believes TRB management has distinguished itself from other newspaper management teams by taking aggressive actions across various areas of the company to attempt to preserve the longer term health of the company: bringing in new leadership from outside the industry, communicating directly with staff about the challenges facing the industry, reducing headcount, re-tooling incentive compensation for sales teams, redesigning the product, exploring asset monetization/ utilization opportunities, and experimenting with new revenue streams. While these actions appear prudent in the intermediate- to long-term, they are less quantifiable in the near term and they may not produce results that address the company's currently strained financial flexibility. The downgrade reflects weakness stemming from elements of the business that the company has less control over, namely areas that Fitch understood were highly volatile, such as classified advertising. -- The 'CCC+/RR3' rating for Tribune's secured bank credit facility and term loans B and X reflects Fitch's belief that 51%-70% recovery is reasonable in distress given that it benefits from a first-priority guarantee from direct and indirectly owned U.S. subsidiaries (providing it priority over other claims under a default scenario). The 'CC/RR6' Recovery Rating on the bridge loan ($1.6 billion), the unsecured notes and the subordinated exchangeable debentures reflects Fitch's estimate that 0% recovery is realistic in a distress scenario. (Although not reflected in notching due to the expectation of 0% recovery, Fitch notes there are differences in priority among the 'CC/RR6' rated securities.) Fitch's ratings reflect TRB's significant debt burden, well as the decline in its revenue and cash flow. Fitch believes newspapers and broadcast affiliates (particularly in large markets where there is more competition for advertising dollars) face meaningful secular headwinds that could lead to more cash flow pressure in the future. In addition, the ratings continue to reflect volatile newsprint prices and the threat of emerging technologies on the economics of the pure-play broadcasting affiliate business. TRB's businesses face the risk of margin compression as revenue pressures are coupled with cost structures that are fixed or contain elements that are largely outside of management's control. The margin of safety to endure these threats in a cyclical downturn has largely been exhausted. These concerns are balanced somewhat by the geographic diversity of the company's assets as well as the success of several of the company's on-line investments. Also, TRB owns some valuable assets (L.A. Times, Chicago Cubs, Food Network stake, CareerBuilder stake, etc.) that are separable from the company. Fitch estimates that cash proceeds from core divestitures would not likely de-leverage the company but could provide some capacity to enhance liquidity (non- core asset sales would be deleveraging, particularly the Cubs). Liquidity is supported by availability under its $750 million revolving bank credit facility which is fully available (with the exception of $95 million in letters of credit) and $75 million available under a $300 million Trade Receivable Securitization Facility (entered into on July 1, 2008). In addition, the company has available a delayed draw on the Term Loan B facility which should permit the company to fund the $238 million medium-term note coming due in October 2008 (which will slightly increase the numerator of the guaranteed leverage test). US AIRWAYS: Raises $179,000,000 from Stock Offering --------------------------------------------------- US Airways Group, Inc., completed on Aug. 19, 2008, a public stock offering, underwritten by Merrill Lynch & Co. as sole book runner. The transaction included the issuance of 19.0 million shares at a price of $8.50 per share as well as the full exercise of 2.85 million shares included in the overallotment option granted by the company at the same price. Merrill Lynch agreed to purchase the 19.0 million shares of USAir common stock on August 14. The net proceeds from the offering, after deducting underwriting discounts and commissions, were approximately $179 million and will be used for general corporate purposes, according to a statement issued by the company. "We are extremely pleased with the outcome of this transaction, which further strengthens our liquidity position," said Senior Vice President and Chief Financial Officer Derek Kerr. "Despite the fact that the industry continues to face stubbornly high fuel prices and a deteriorating economic environment, this transaction demonstrates the market's confidence in US Airways' ability to persevere in these new and challenging times. While we still have a lot of hard work to do, our business transformation plan continues to gain momentum and we look forward to reporting on our other initiatives that are currently underway." Seabury Group LLC's broker-dealer unit, Seabury Securities LLC, served as the company's financial advisor and McKenna Long & Aldridge LLP served as the company's counsel for the offering. A full-text copy of the regulatory filing filed by USAir with the United States Securities and Exchange Commission disclosing the stock offering is available for free at: http://ResearchArchives.com/t/s?315e Full-text copies of the prospectuses describing the specific terms of the stock offering is available for free at: http://ResearchArchives.com/t/s?315f and at: http://ResearchArchives.com/t/s?3160 Overallotment Option Under the terms and subject to the conditions contained in an underwriting agreement, US Airways has granted to the underwriter an option, exercisable through September 13, 2008, to purchase up to an aggregate of 2,850,000 additional shares of common stock at $8.50, less $0.31 underwriting discount. Since the underwriter has exercised its option in full, the total price to public was $185,725,000, the total underwriter's discount was $6,773,500 and the total gross proceeds to US Airways were $178,951,500. The underwriting discount per share is equal to the public offering price per share of common stock less the amount paid by the underwriter to US Airways per share of common stock. US Airways has estimated that the underwriting discount and estimated offering expenses is approximately $155 million. The number of shares of common stock to be outstanding after the offering is based on 92,152,158 shares of common stock outstanding as of August 13, 2008, and excludes 9,418,075 shares of common stock issuable upon the exercise of outstanding stock appreciation rights, stock options and unvested restricted stock units, and 3,050,148 shares of common stock issuable upon conversion of outstanding convertible debt. There were approximately 2,745 stockholders of record as of June 30, 2008. The shares of common stock were offered under the Company's existing shelf registration statement, which became automatically effective upon filing with the SEC. About US Airways Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) - http://www.usairways.com/-- primary business activity is the ownership of the common stock of US Airways, Inc., Allegheny Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc., MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc., Material Services company, Inc., and Airways Assurance Limited, LLC. Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. The Debtors' Chapter 11 plan for its second bankruptcy filing became effective on Sept. 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News, Issue No. 164; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled company Reporter on July 24, 2008, Moody's Investors Service downgraded the Corporate Family and Probability of Default Ratings of US Airways Group Inc. to Caa1 from B3 and lowered the ratings of its outstanding corporate debt instruments and certain Enhanced Equipment Trust Certificates (EETC). Moody's lowered the Speculative Grade Liquidity Assessment to SGL-4 from SGL-3. The rating outlook is negative. US AIRWAYS: Registers 6.7 Million Shares for 2008 Incentive Plan ---------------------------------------------------------------- Janet Dhillon, senior vice president and general counsel of US Airways Group, Inc., disclosed with the Securities and Exchange Commission that US Airways' compensation and human resources committee approved the forms of the restricted stock unit award agreement and stock appreciation right award agreement for grants under the US Airways Group, Inc. 2008 Equity Incentive Plan. The agreement forms include the vesting, payment of dividends, settlement of the award, delivery of the shares and transfer restrictions. The SAR Agreement sets forth the terms and conditions of awards of stock appreciation rights under the 2008 Plan, including, but not limited to, calculation of appreciation, vesting, exercise, expiration, payment, and transfer restrictions. Accordingly, the Compensation Committee made grants of stock appreciation rights to the executive officers of US Airways, which the officers, in separate filings, subsequently disclosed with the SEC: Number Director Title of Shares -------- ----- --------- W. Douglas Parker Chairman and Chief Executive 275,000 Officer J. Scott Kirby President 178,755 Robert D. Isom, Jr. Executive Vice President and 143,855 Chief Operating Officer Derek J. Kerr Senior Vice President and 51,020 Chief Financial Officer Janet Dhillon Senior Vice President and 51,020 General Counsel Elise R. Eberwein Senior Vice President for 51,020 People, Communications and Culture C.A. Howlett Senior Vice President for 51,020 Public Affairs The Officers acquired the stock appreciation rights on Aug. 5, 2008. The stock appreciation rights have an exercise price of $6.70, the fair market value of US Airway's common stock on the date of the grant. The stock appreciation right vests in increments of one third on each of Aug. 5, 2009; Aug. 5, 2010, and Aug. 5, 2011. The stock appreciation rights also become fully vested upon termination due to death, disability or retirement or in the event of a change in control of the company. Flight Attendants Balk at Stock Grants Flight attendants at US Airways, represented by the Association of Flight Attendants-CWA (AFA-CWA), are outraged over the announcement that seven of the airline's top executives were recently awarded stock appreciation grants totaling millions of dollars, according to a statement issued by the AFA-CWA. "It is disheartening to watch US Airways top executives enrich themselves with 'performance' based stock awards while flight attendants continue to work under a bankruptcy driven contract that slashed wages and eliminated pensions and benefits," said US Airways East AFA-CWA President Mike Flores. "While US Airways has improved its on time performance, the airline still ranks number one in customer complaints which makes it even harder to justify this 'performance' bonus." The American Customer Satisfaction Index published by the University of Michigan's National Quality Research Center showed USAir's ACSI score plummeted 12% to 54%, reports The Business Journal. US Airways West AFA-CWA President Lisa LeCarre, who represents the America West flight attendants of US Airways added, "While management has every right to award themselves performance based stock grants, it is a slap in the face to the hard working flight attendants who are facing job losses and have not received a simple cost-of-living increase in almost six years. It is also an affront to the passengers being nickel and dimed for such comforts as a glass of water. When will corporate America understand the devastating effects of this erosion on public and employee moral and trust?" About US Airways Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) - http://www.usairways.com/-- primary business activity is the ownership of the common stock of US Airways, Inc., Allegheny Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc., MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc., Material Services company, Inc., and Airways Assurance Limited, LLC. Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. The Debtors' Chapter 11 plan for its second bankruptcy filing became effective on Sept. 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News, Issue No. 164; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled company Reporter on July 24, 2008, Moody's Investors Service downgraded the Corporate Family and Probability of Default Ratings of US Airways Group Inc. to Caa1 from B3 and lowered the ratings of its outstanding corporate debt instruments and certain Enhanced Equipment Trust Certificates (EETC). Moody's lowered the Speculative Grade Liquidity Assessment to SGL-4 from SGL-3. The rating outlook is negative. US ENERGY: Files Chapter 11 Plan of Reorganization -------------------------------------------------- U.S. Energy Systems, Inc. and two subsidiaries -- U.S. Energy Overseas Investments, LLC and GBGH, LLC -- filed Chapter 11 plans of reorganization with the United States Bankruptcy Court, Southern District of New York. All Plans are subject to modification and revision. The Plan of Reorganization for U.S. Energy Systems, Inc. and U.S. Energy Overseas Investments, LLC is a Joint Liquidating Plan. Under this Plan, a Liquidation Trust would be established, and USEY and Overseas would transfer any remaining assets -- including any net proceeds from USEY's sale of 100% of the common stock of USEB and any residual ownership interests in GBGH, LLC -- into the Liquidation Trust for liquidation and the subsequent distribution of net liquidation proceeds to USEY equity holders. The Plan of Reorganization for GBGH, LLC, includes provisions for: -- restructuring of GBGH's first lien debt through the issuance of a Restructured First Lien Note; -- restructuring of GBGH's second lien debt, which will include the conversion of a portion of the existing second lien debt into newly issued equity in GBGH, LLC; -- the execution of a Rights Offering for the raising of at least $10 million of new equity in GBGH, LLC. The Company intends to identify parties to backstop the Rights Offering; and -- the issuance of New Warrants convertible into equity interests in GBGH at to be established strike prices. The warrants will be issued to existing GBGH, LLC equity holders. Subsequent to the confirmation of the Plan of Reorganization, GBGH, LLC will continue to own the UK subsidiaries, which in turn will continue to own and operate the UK gas licenses and assets, including the UK power plant. "This is an important milestone in emerging from Chapter 11 bankruptcy," said Joseph P. Reynolds, Chief Executive Officer of U.S. Energy Systems, Inc. "The Plans will allow the companies to emerge from bankruptcy in a manner that is fair to all constituencies. We believe the end of this bankruptcy is in sight, and we are focused on working to complete final negotiations and obtain the necessary court approval of the Plans." Peter Partee of Hunton & Williams LLP serves as lead counsel to U.S. Energy Systems, Inc., U.S. Energy Overseas Investments LLC and GBGH, LLC. To recall, the company's wholly-owned landfill gas to energy subsidiary U.S. Energy Biogas Corp. and the USEB subsidiaries, and UK Energy Systems Ltd. and its other UK subsidiaries are not part of these Chapter 11 cases. Virtually all of USEY's employees and all of its income generating operating activities are in USEB and the UK subsidiaries. A full-text copy U.S. Energy and U.S. Energy Overseas' Chapter 11 plan is available for free at http://ResearchArchives.com/t/s?3162 A full-text copy of GBGH's Chapter 11 plan is available for free at http://ResearchArchives.com/t/s?3163 About U.S. Energy Based in Avon, Connecticut, U.S. Energy Systems Inc. (Pink Sheets: USEY) -- http://www.usenergysystems.com/-- owns green power and clean energy and resources. USEY owns and operates energy projects in the United States and United Kingdom that generate electricity, thermal energy and gas production. The company filed for Chapter 11 protection on Jan. 9, 2008 (Bank. S.D.N.Y. Case No. 08-10054). There are 34 affiliates who filed for separate Chapter 11 petitions. Peter S. Partee, Esq., at Hunton & Williams LLP, represents the Debtor in its restructuring efforts. Jefferies & Company, Inc. serves as the company's financial advisor. The Debtor also selected Epiq Bankruptcy Solutions LLC as noticing, claims and balloting agent. The Official Committee of Unsecured Creditors has yet to be appointed in these cases by the U.S. Trustee for Region 2. When the Debtors filed for protection from their creditors, they listed total assets of $258,200,000 and total debts of $175,300,000. VIRGIN MOBILE: Completes Acquisition of Helio --------------------------------------------- Virgin Mobile USA, Inc. has completed its acquisition of Helio, a joint venture between SK Telecom and EarthLink, Inc., that complements Virgin Mobile USA's strengths through its specialization in highly advanced postpaid products and services. All necessary regulatory approvals have been obtained. In connection with the acquisition, Helio shareholders SK Telecom and, EarthLink and have received limited partnership units and shares equivalent to 13 million shares of Virgin Mobile USA Class A common stock, with a value of $38 million based on the average closing price of Virgin Mobile USA's Class A shares, as of two trading days before and two trading days after the date of announcement. In addition, SK Telecom and Virgin Group will each invest $25 million in Virgin Mobile USA for preferred shares. Dan Schulman, chief executive officer, Virgin Mobile USA, emphasized the benefits of the transaction to Virgin Mobile USA and the new opportunities for growth it creates. "Adding Helio's differentiated postpaid offer to Virgin Mobile USA's existing portfolio will expand both our market opportunity and our ability to deliver new products and services more rapidly," he said. "We believe this transformative transaction will bolster our leading position in the wireless space, and enable us to provide customers with whatever they need in wireless, always with our focus on great value, flexibility and customer service. We look forward to revealing our roadmap for expanded, innovative offers in the near future," Mr. Schulman added. "This acquisition of Helio also comes with a number of financial benefits, including improved network rates from Sprint for Virgin Mobile USA, and strategic investments by SK Telecom and Virgin Group which improve our capital structure and increase liquidity," Schulman said. Schulman said that the transaction provides Virgin Mobile USA with: -- a set of unique and differentiated data applications; -- entry into the postpaid market, with a sophisticated billing and customer care platform; -- approximately 170,000 Helio customers; -- revised terms for the Sprint PCS Services Agreement, expected to result in an 8% reduction in the company's effective cost per minute in 2009; -- reduction in net debt of approximately $35?$40 million, through the investments of $25 million each by SK Telecom and Virgin Group in the form of preferred mandatory convertible stock at the price of $8.50 per share; -- an increase to Virgin Mobile USA's total revolver from $75 million to $135 million, through additional investments of $25 million by Virgin Group and $35 million by SK Telecom; and -- the addition of SK Telecom as a strategic shareholder with two seats on the company's Board of Directors. A percentage of the equity issued and issuable in the transaction will be subject to escrow for one year to secure certain indemnification obligations. About Virgin Mobile USA Inc. Headquartered in Warren, New Jersey, Virgin Mobile USA Inc. (NYSE: VM) -- http://www.virginmobileusa.com/-- is a provider of wireless, pay-as-you-go communications services without annual contracts. Voice pricing plans range from monthly options with unlimited nights and weekends to by-the-minute offers, allowing consumers to adjust how and what they pay according to their needs. Virgin Mobiles full slate of handsets, including the Wild Card, Super Slice and Cyclops, are available at top retailers in more than 35,000 locations nationwide and online, with Top-Up cards available at more than 130,000 locations. As reported in The Troubled Company Reported on Aug. 18, 2008, at June 30, 2008 financial and operational results, the company's balance sheet showed total assets of $255.1 million and total liabilities of $656.1 million, resulting in a $400.9 million stockholders' deficit. WACHOVIA BANK: Fitch Affirms Ratings on S. 2005-C17 Certificates ---------------------------------------------------------------- Fitch Ratings affirms Wachovia Bank Commercial Mortgage Trust, series 2005-C17 commercial mortgage pass-through certificates as: -- $368 million class A-1A at 'AAA'; -- $272.7 million class A-2 at 'AAA'; -- $82 million class A-3 at 'AAA'; -- $224.4 million class A-PB at 'AAA'; -- $1.08 billion class A-4 at 'AAA'; -- $187.2 million class A-J at 'AAA'; -- Interest only class X-P* at 'AAA'; -- Interest only class X-C* at 'AAA'; -- $74.9 million class B at 'AA'; -- $23.8 million class C at 'AA-'; -- $47.7 million class D at 'A'; -- $27.2 million class E at 'A-'; -- $27.2 million class F at 'BBB+'; -- $30.6 million class G at 'BBB'; -- $37.4 million class H at 'BBB-'; -- $6.8 million class J at 'BB+'; -- $10.2 million class K at 'BB'; -- $13.6 million class L at 'BB-'; -- $6.8 million class M at 'B+'; -- $6.8 million class N at 'B'; -- $6.8 million class O at 'B-'. Class P is not rated by Fitch. The ratings affirmations are the result of stable performance and minimal paydown since issuance. As of the August 2008 remittance report the transaction has paid down 5.6% to $2.6 billion from $2.72 billion at issuance. In total, 25 loans (11.8%) have defeased. In total, 17 loans are considered Fitch loans of concern (6.7%), including one specially serviced loan (1.7%). The specially serviced loan is collateralized by a multifamily property located in San Diego, California. The loan is current, but it was transferred to special servicing in April 2008 due to imminent monetary default. According to the special servicer, the borrower missed a principal paydown required by the loan documents. The borrower's dispute over the trigger event is being evaluated. Losses are not expected at this time. Fitch reviewed the year-end 2007 operating data for the five shadow rated loans (15.9%): One and Two International Place (8.2%), Tharaldson Hotel Pool I-B (2.8%), Tharaldson Hotel Pool I- A (2.0%), Great Wolf Resorts Pool (1.8%) and 200 Varick Street (1.1%). Based on their stable performance since issuance, the loans maintain investment grade shadow ratings. The largest shadow rated loan, One and Two International Place, is a 1,852,501 square foot class A office building in Boston, Massachusetts. Current occupancy is 93.8% compared to 89.6% at issuance. Occupancy levels of the additional four shadow rated loans remained relatively stable since issuance: the Tharaldson Pool I-B YE2007 portfolio occupancy was 82.8%, compared to 77.1% at issuance; the Tharaldson Pool I-A YE2007 portfolio occupancy was 76.5%, compared to issuance of 75.2%; Great Wolf Resorts Pool remained stable with YE2007 occupancy of 64.7%, compared to 63.6% at issuance; and, 200 Varick YE2007 occupancy was 100%, compared to 97.1% at issuance. There is limited near-term refinance risk with no loan maturing in 2008, 1.1% in 2009 and 7.5% in 2010. WARNER ROBBINS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Warner Robbins Hospitality, LLC 2024 Watson Boulevard Warner Robins, GA 31093 Bankruptcy Case No.: 08-52084 Type of Business: The Debtor is a single asset real estate as defined in Section 101(51B) of the U.S. Bankruptcy Code. Chapter 11 Petition Date: August 4, 2008 Court: Middle District of Georgia (Macon) Debtor's Counsel: Wesley J. Boyer, Esq. (wjboyer_2000@yahoo.com) Katz, Flatau, Popson and Boyer, LLP 355 Cotton Avenue Macon, GA 31201 Tel: 478-742-6481 Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 A copy of the Debtor's petition is available for free at: http://bankrupt.com/misc/gamb08-52084.pdf WELLMAN INC: Amends Credit Agreement to Pursue Chapter 11 Plan -------------------------------------------------------------- Wellman, Inc., and its debtor-affiliates amended its debtor-in- possession credit agreement with its lenders to move the deadlines for obtaining approval of the disclosure statement and confirmation of its Chapter 11 Joint Plan of Reorganization. In a regulatory filing with the U.S. Securities and Exchange Commission, Wellman disclosed that the deadline, set in its $225,000,000 credit agreement with Deutsche Bank, for obtaining approval from U.S. Bankruptcy Court for the Southern District of New York of the Disclosure Statement has been pushed to August 29 from August 15. Meanwhile, the deadline for obtaining an order confirming the Plan has been moved to October 10 from September 26 and the deadline for emergence from bankruptcy has been extended to October 20 from October 6. The Court has adjourned the hearings on the Disclosure Statement. Judge Bernstein said at the July 31 hearing that the Disclosure Statement's "going to have to wait till the issue of the value of the first lienor's collateral is determined." Wellman asked the Court to rule that the replacement value of the collateral of Bank of New York, agent for a syndicate of prepetition first lien lenders, is only $70,827,000. The projected recovery for BNY under Wellman's Chapter 11 Plan is premised upon that assumption. Bank of New York, however, asserts that its collateral is woth $136,810,000 to $197,700,000 based on the appraisal conducted by its own valuation consultant. Wilmington Trust, relying on appraisals by Grant Thornton LLP, believes BNY's collateral should be less than $74,301,000. The Court's determination of how much of BNY's claims are secured will affect BNY's and other creditors' recovery under the Plan. Wellman's revised Chapter 11 plan provides that the First Lien Lenders are expected to get 38.4% on account of their claims, while Second Lien Lenders will receive 18.9%. The recovery of these lenders, however, may be adjusted depending the Court's determination of the First Lien Lenders' collateral. Under the Bankruptcy Code, if the First Lien Lenders are determined to be secured, they are entitled to receive payment in full; if they're undersecured, they are entitled to payment in full to the extent of the collateral securing their claims, or the return of that collateral, and a pro-rata distribution from the estate for the unsecured deficiency claim. About Wellman Headquartered in Fort Mill, South Carolina, Wellman Inc. ([OTC]: WMANQ.OB) -- http://www.wellmaninc.com/-- manufactures and markets packaging and engineering resins used in food and beverage packaging, apparel, home furnishings and automobiles. They manufacture resins and polyester staple fiber a three major production facilities. The company and its debtor-affiliates filed for Chapter 11 protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No. 08-10595). Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in New York City, represents the Debtors. Lazard Freres & Co., LLC, acts as the Debtors' financial advisors and investment bankers. Conway, Del Genio, Gries & Co., LLC, was also retained as the Debtors' chief restructuring advisor. The United States Trustee for Region 2 has appointed seven members to the Official Committee of Unsecured Creditors. Mark R. Somerstein, Esq., at Ropes & Gray LLP, serves as the Committee's bankruptcy counsel. FTI Consulting, Inc., acts as the panel's financial advisors. Wellman Inc., in its bankruptcy petition, listed total assets of $124,277,177 and total liabilities of $600,084,885, as of Dec. 31, 2007, on a stand-alone basis. Debtor-affiliate ALG, Inc., listed assets between $500 million and $1 billion on a stand-alone basis at the time of the bankruptcy filing. Debtor-affiliates Fiber Industries Inc., Prince Inc., and Wellman of Mississippi Inc., listed assets between $100 million and $500 million at the time of their bankruptcy filings. On a consolidated basis, Wellman Inc., and its debtor-affiliates listed $512,400,000 in total assets and $730,500,000 in liabilities as of June 30, 2008. Wellman filed a restructuring plan before the Bankruptcy Court on June 25, 2008. WELLMAN INC: Court Defers Exclusivity Extension Hearing to Sept. 4 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York has adjourned to Sept. 4, 2008, at 10:00 a.m. (ET), the hearing to consider approval of Wellman Inc. and its debtor-affiliates' request to extend their exclusive plan filing and solicitation periods. The Court's previous bridge order said that in the event the hearing to consider approval of the extension is adjourned, the Exclusive Periods will be automatically extended through any adjourned dates unless the Court orders otherwise. Headquartered in Fort Mill, South Carolina, Wellman Inc. ([OTC]: WMANQ.OB) -- http://www.wellmaninc.com/-- manufactures and markets packaging and engineering resins used in food and beverage packaging, apparel, home furnishings and automobiles. They manufacture resins and polyester staple fiber a three major production facilities. The company and its debtor-affiliates filed for Chapter 11 protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No. 08-10595). Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in New York City, represents the Debtors. Lazard Freres & Co., LLC, acts as the Debtors' financial advisors and investment bankers. Conway, Del Genio, Gries & Co., LLC, was also retained as the Debtors' chief restructuring advisor. The United States Trustee for Region 2 has appointed seven members to the Official Committee of Unsecured Creditors. Mark R. Somerstein, Esq., at Ropes & Gray LLP, serves as the Committee's bankruptcy counsel. FTI Consulting, Inc., acts as the panel's financial advisors. Wellman Inc., in its bankruptcy petition, listed total assets of $124,277,177 and total liabilities of $600,084,885, as of Dec. 31, 2007, on a stand-alone basis. Debtor-affiliate ALG, Inc., listed assets between $500 million and $1 billion on a stand-alone basis at the time of the bankruptcy filing. Debtor-affiliates Fiber Industries Inc., Prince Inc., and Wellman of Mississippi Inc., listed assets between $100 million and $500 million at the time of their bankruptcy filings. On a consolidated basis, Wellman Inc., and its debtor-affiliates listed $512,400,000 in total assets and $730,500,000 in liabilities as of June 30, 2008. Wellman filed a restructuring plan before the Bankruptcy Court on June 25, 2008. WESTAR ENERGY: Fitch Lifts Issuer Default Rating to BBB- -------------------------------------------------------- Fitch has upgraded the long-term Issuer Default Ratings of Westar Energy Inc. and its wholly-owned electric utility subsidiary, Kansas Gas & Electric, to 'BBB-' from 'BB+'. At the same time, Fitch has affirmed WR and KG&E's short-term ratings at 'F3'. The Rating Outlook is Stable. WR and KGE's ratings have been removed from Rating Watch Positive where they were placed June 12, 2007. Approximately $2.6 billion of long-term debt is affected by the rating action, including off-balance sheet obligations. The ratings and Stable Rating Outlook consider WR's conservative management style and strategic focus on credit quality while providing growth through investment in its Kansas-based electric utility business. Although the company's large capital program is subject to execution and regulatory risk, we believe these risks are manageable given WR's flexible approach to its capex strategy and a significantly improved regulatory environment in Kansas. The company's capital investment program is projected to average more than $800 million during 2008 - 2010, composed primarily of infrastructure investment, new transmission, environmental upgrades and wind and natural gas-fired peaking generation. Fitch expects WR to fund its external capital requirements with a balanced mix of equity and debt. Importantly, Fitch believes WR's investment plans are consistent with state policy goals. Fitch notes the significant improvement in the company's regulatory relations accomplished since 2002, when new management was recruited and the company's current utility-focused strategy adopted. Recovery mechanisms adopted in recent years in Kansas include pre- approval of planned investment projects, recovery of construction- work-in-progress and riders to pass-through environmental and Federal Energy Regulatory Commission-approved transmission investments. Fitch believes these mechanisms will mitigate regulatory lag and increase the likelihood of recovery of prospective utility investment. Fitch notes that general rate case proceedings are subject to statutory timing limits that require a final order to be issued eight months following initiation. WR also benefits from below-industry-average electric rates, a fuel mix composed primarily of competitive coal-fired and nuclear generation and a fuel and purchase power pass-through mechanism that adjusts rates monthly with annual true-up of deferral balances. In May 2008, WR filed its general rate case requesting a $178 million (14.9%) rate increase based on a 10.95% authorized return on equity. Staff and intervener testimony are expected to be filed in the next couple of months and a final KCC order is anticipated the first quarter of 2009. WR's forward credit metrics are consistent with low-investment grade creditworthiness, based on Fitch's earnings and cash flow projections and the utility's relatively low-business risk profile. Nonetheless, a final revenue requirement in WR's pending GRC significantly below Fitch's assumptions could result in meaningfully weaker than anticipated coverage ratios and prospective credit rating downgrades. Westar Energy: -- Long-Term IDR to 'BBB- from BB+'; -- Short-Term IDR affirmed at 'F3'; -- Secured debt to 'BBB+ from BBB'; -- Senior unsecured debt to 'BBB from BBB-'; -- Preferred stock to 'BBB- from BB+'. Kansas Gas & Electric -- Long-Term IDR to 'BBB- from BB+'; -- Short-Term IDR affirmed at 'F3'; -- Secured debt to 'BBB+ from BBB'. -- Facility Bonds to 'BBB+ from BBB'. WR and KG&E are operating utilities doing business as Westar Energy North and Westar Energy South. Together, WR and its operating subsidiary, KG&E, provide electric service to approximately 674,000 customers in Kansas. KG&E owns a 47% interest in the Wolf Creek Generating Station. WILBRAHAM CBO: S&P Assigns 'CC' Rating on Classes B-1, B-2 Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its rating on the class A-2 notes issued by Wilbraham CBO Ltd., a high-yield arbitrage collateralized bond obligation (CBO) transaction managed by Babson Capital Management LLC, to 'BBB-' from 'BB+' and removed it from CreditWatch with positive implications, where it was placed on Aug. 1, 2008. The raised rating reflects factors that have positively affected the credit enhancement available to support the notes since the last upgrade in April 2007. These include the delevering of the transaction through the paydown of the class A-1 notes, which have paid down approximately $52 million since April 2007. According to the most recent trustee report, dated Aug. 2, 2008, the class A overcollateralization ratio was 155.8%, compared with a reported ratio of 124.7% at the time of the last upgrade. RATING RAISED AND REMOVED FROM CREDITWATCH POSITIVE Wilbraham CBO Ltd. Rating Balance Class To From Current Previous ----- -- ---- ------- -------- A-2 BBB- BB+/Watch Pos 19.00 19.00 OTHER OUTSTANDING RATINGS Wilbraham CBO Ltd. Class Rating Balance (mil. $) ----- ------ ---------------- A-1 AAA 2.419 B-1 CC 9.792 B-2 CC 30.348 TRANSACTION INFORMATION Issuer: Wilbraham CBO Ltd. Co-issuer: Wilbraham CBO Corp. Current manager: Babson Capital Management LLC Underwriter: Citigroup Global Markets Inc. Trustee: The Bank of New York Mellon Transaction type: Arbitrage high-yield CBO TRANCHE PRIOR CURRENT INFORMATION ACTION ACTION ----------- ------ ------- Date (MM/YYYY) 04/2007 08/2008 A-1 note balance (mil. $) 54.40 2.49 A-2 note balance (mil. $) 19.00 19.00 B-1 note balance (mil. $) 9.79 9.79 B-2 note balance (mil. $) 30.35 30.35 C note balance (mil. $) 37.42 45.50 Class A O/C ratio (%) 124.7 155.8 Class A O/C ratio min. (%) 120.0 120.0 Class B O/C ratio (%) 80.60 54.20 Class C O/C ratio (%) 60.64 31.17 O/C -- Overcollateralization. WILLIAM BISHOP: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: William A. Bishop Katherine A. Bishop 3003 USFS Road Suite 4823 aka Cabin Creek Road Easton, WA 98925 Bankruptcy Case No.: 08-03134 Chapter 11 Petition Date: August 6, 2008 Court: Eastern District of Washington (Spokane/Yakima) Judge: Frank L Kurtz Debtor's Counsel: Erik S Bakke, Sr., Esq. (erikb@jgdwlaw.com) Johnson, Gaukroger, Drewelow & Woolett 139 South Worthen P.O. Box 19 Wenatchee, WA 98807-0019 Tel: 509-663-0031 Fax: 509-663-6003 Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 A copy of the Debtor's petition is available for free at: http://bankrupt.com/misc/waeb08-03134.pdf WINSTON-SALEM: U.S. Trustee Wants Cases Treated Separately ---------------------------------------------------------- The United States Trustee for Region 8 said that 10 facilities placed in Chapter 11 by owner Sunwest Management Inc. must be administered separately, Bloomberg News reports. Bloomberg says the Trustee wants each of the facility's case transferred to the state where it is located -- Tennessee, North Carolina, South Carolina and Oregon. The facilities including Winston-Salem Oakdale Property LLC filed for bankruptcy after defaulting on loans from General Electric Co., Bloomberg relates. The facilities are among the 287 in 36 states handled by Sunwest Management, the report says. Headquartered in Nashville, Tennesse, Nashville Senior Living, LLC provides health care services. The company and seven of its affiliates filed for Chapter 11 protection on Aug. 17, 2008 (Bankr. M.D. Tenn. Lead Case No. 08-07254). Robert A. Guy, Esq., at Waller Lansden Dortch & Davis, represents the Debtors. When the Debtors filed for protection from their creditors, they listed assets between $1 million and $10 million, and $50 million and $100 million. WOODSIDE GROUP: Business as Usual Amid Involuntary Bankruptcy ------------------------------------------------------------- Several noteholders of Woodside Homes LLC and its affiliates brought the homebuilder group to involuntary Chapter 11 proceedings before the U.S. Bankruptcy Court for the Central District of California. "First and foremost, Woodside continues to operate in the normal course of business -- paying employees, vendors and subcontractors, and building and selling homes," assured a representative of Woodside Homes. The spokesperson added that the group is still in negotiations with the noteholders and banks, TheStreet.com relates. Five noteholders, with John Hancock Life Insurance Company posting the highest claim amount, asserted a total of $155.9 million in claims against Woodside Homes. Woodside Group LLC and its debtor-affiliates -- http://www.woodside-homes.com/-- are homebuilders. The Debtor group, together with several other homebuilders, is continuing to develop the Inspirada master-planned community in Henderson, Nevada. The company and its affiliates were forced into involuntary Chapter 11 protection by certain of their noteholders on Aug. 20, 2008 (Bankr. C.D. Calif. Lead Case No. 08-20682). Susy Li, Esq., at Bingham McCutchen LLP, represents the Debtors in their restructuring efforts. WORKFLOW MANAGEMENT: Merger No Effect on 'B-' Rating, S&P Says -------------------------------------------------------------- Standard & Poor's Ratings Services said the announcement by Enterprise Acquisition Corp. (not rated) of its definitive merger agreement with Workflow Management Inc. (B-/Negative/--) will not affect the rating or outlook on the latter company. The announced merger is valued at $669 million and consists of the assumption of up to $490 million of indebtedness at Workflow Management and the transfer of $179 million of Enterprise Acquisition common stock to the stockholders of Workflow Management. It is expected that the current management of Workflow will remain in place to run the company after the merger is completed. "In addition to required regulatory approvals and customary closing conditions, the proposed merger is conditioned on the approval of the transaction by the stockholders of Enterprise Acquisition, as evidenced by fewer than 30% of shareholders voting against the merger. Given the uncertainty regarding the approval of the transaction on behalf of the shareholders, we are not yet factoring this transaction into our rating or outlook. If a shareholder vote results in the merger being approved, we would evaluate the impact to Workflow's capital structure and reassess the assigned rating and outlook at that time. Enterprise Acquisition intends to file proxy statements concerning the merger as soon as possible, and anticipates completing the transaction in the fourth quarter of 2008 or the first quarter of 2009, assuming all closing conditions are met," S&P explains. * S&P Cuts 46 Ratings on 4 U.S. Alt-A RMBS Transactions ------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 46 classes of mortgage pass-through certificates from four U.S. Alternative-A (Alt-A) residential mortgage-backed securities (RMBS) transactions: Alternative Loan Trust 2005-62, Adjustable Rate Mortgage Trust 2005-12, Opteum Mortgage Acceptance Corp.'s series 2005-5, and Terwin Mortgage Trust 2007-6ALT. "We removed 36 of the lowered ratings from CreditWatch with negative implications. In addition, we affirmed our ratings on two classes and removed them from CreditWatch negative. Lastly, we affirmed our ratings on 23 other certificates from these Alt-A transactions. All of the affected transactions were issued in 2005 with the exception of Terwin Mortgage Trust 2007-6ALT, which was issued in the second half of 2007," S&P says. There has been a persistent rise in the level of delinquencies among the Alt-A mortgage loans supporting these transactions. The lowered ratings reflect current or projected credit enhancement levels that are no longer adequate to support the ratings at their previous levels. As of the July 2008 distribution period, severely delinquent loans (90-plus days, foreclosures, and real estate owned {REO}) for these transactions ranged from 11.55% (Adjustable Rate Mortgage Trust 2005-12, structure group 8) to 29.28% (Adjustable Rate Mortgage Trust 2005-12, structure group 5) with total delinquencies ranging from 17.10% (Adjustable Rate Mortgage Trust 2005-12, structure group 8) to 35.04% (Alternative Loan Trust 2005-62) of the current pool balances. Cumulative losses for the affected transactions ranged between 0.00% (Terwin Mortgage Trust 2007-6ALT) and 2.86% (Adjustable Rate Mortgage Trust 2005- 12, structure group 5) of the original pool balances. Over the past six months, severe delinquencies for all of these transactions have continued to increase. The downgrades of class B-4 from Alternative Loan Trust 2005-62 and classes 5-M-4 and 5-M-5 from Adjustable Rate Mortgage Trust 2005-12 reflect principal write-downs to these classes, which prompted us to lower the ratings to 'D'. "Based on the current collateral performance of these transactions, future credit enhancement is projected to be significantly less than the original credit support. For transactions that contain excess spread and overcollateralization generally losses are exceeding the excess spread amounts generated from these transactions, and if this trend continues and losses are realized as we projected, credit support will be significantly eroded even at the subordination levels. In the case of Terwin Mortgage Trust 2007-6ALT, which is 11 months seasoned and has not realized any losses to date, the amount of severely delinquent loans for this deal has increased to 24.89% from 16.64% in the past six months. Credit enhancement for Alternative Loan Trust Series 2005-62 comes strictly from subordination, and the amount of severe delinquencies for this deal has increased to 23.17% from 14.77% in the past six months despite taking average losses of $2,204,000 during this time," S&P says. "We will continue to review all of the Alt-A transactions from these vintages on a monthly basis and take rating actions as they are warranted." The affirmations reflect sufficient credit support percentages to support the current ratings as of the July 2008 remittance period. The underlying collateral for all of the affected classes consists primarily of Alt-A mortgage loans. RATINGS LOWERED Alternative Loan Trust 2005-62 Series 2005-62 Rating Class CUSIP To From ----- ----- -- ---- 1-A-2 12668ATP0 BBB AAA 1-X-1 12668ATR6 BBB AAA 1-X-2 12668ATS4 BBB AAA 1-X-3 12668AYA7 BBB AAA 2-X-1 12668ATW5 BBB AAA 2-X-2 12668AYC3 BBB AAA M-X 12668ATX3 BBB AAA B-4 12668AUJ2 D CCC Opteum Mortgage Acceptance Corp. Series 2005-5 Rating Class CUSIP To From ----- ----- -- ---- M-1 68383NDB6 A AA+ M-10 68383NDS9 CC CCC RATINGS LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE Adjustable Rate Mortgage Trust 2005-12 Series 2005-12 Rating Class CUSIP To From ----- ----- -- ---- 1-A-2 2254W0ME2 AA AAA/Watch Neg 2-A-2 2254W0MG7 AA AAA/Watch Neg 3-A-2 2254W0MJ1 AA AAA/Watch Neg 4-A-2 2254W0ML6 AA AAA/Watch Neg C-B-1 2254W0MU6 CCC AA/Watch Neg C-B-2 2254W0MV4 CCC A/Watch Neg C-B-3 2254W0MW2 CC BBB/Watch Neg C-B-4 2254W0MZ5 CC BB/Watch Neg 5-A-2 2254W0MN2 A AAA/Watch Neg 5-M-1 2254W0MP7 BB AA/Watch Neg 5-M-2 2254W0MQ5 CCC A/Watch Neg 5-M-3 2254W0MR3 CC BBB/Watch Neg 5-M-4 2254W0MS1 D BB+/Watch Neg 5-M-5 2254W0MT9 D B/Watch Neg Alternative Loan Trust 2005-62 Series 2005-62 Rating Class CUSIP To From ----- ----- -- ---- M-1 12668ATY1 BB AA+/Watch Neg M-2 12668ATZ8 B AA/Watch Neg M-3 12668AUA1 CCC AA/Watch Neg M-4 12668AUB9 CCC AA-/Watch Neg M-5 12668AUC7 CCC A+/Watch Neg M-6 12668AUD5 CCC A-/Watch Neg M-7 12668AUE3 CC BBB+/Watch Neg B-1 12668AUF0 CC BBB/Watch Neg B-2 12668AUG8 CC BB/Watch Neg B-3 12668AUH6 CC B/Watch Neg Opteum Mortgage Acceptance Corp. Series 2005-5 Rating Class CUSIP To From ----- ----- -- ---- M-2 68383NDC4 BB AA/Watch Neg M-3 68383NDD2 B AA-/Watch Neg M-4 68383NDE0 CCC A+/Watch Neg M-5 68383NDF7 CCC A/Watch Neg M-6 68383NDG5 CCC BBB+/Watch Neg M-7 68383NDH3 CCC BB/Watch Neg M-8 68383NDJ9 CC BB/Watch Neg M-9 68383NDK6 CC B/Watch Neg Terwin Mortgage Trust 2007-6ALT Series 2007-6ALT Rating Class CUSIP To From ----- ----- -- ---- M-1 88157VAD9 B AA/Watch Neg M-2 88157VAE7 CCC A/Watch Neg M-3 88157VAF4 CC BBB/Watch Neg M-4 88157VAG2 CC BBB-/Watch Neg RATINGS AFFIRMED AND REMOVED FROM CREDITWATCH NEGATIVE Adjustable Rate Mortgage Trust 2005-12 Series 2005-12 Rating Class CUSIP To From ----- ----- -- ---- 3-A-1 2254W0MH5 AAA AAA/Watch Neg 5-A-1 2254W0MM4 AAA AAA/Watch Neg RATINGS AFFIRMED Adjustable Rate Mortgage Trust 2005-12 Series 2005-12 Class CUSIP Rating ----- ----- ------ 1-A-1 2254W0MD4 AAA 2-A-1 2254W0MF9 AAA 4-A-1 2254W0MK8 AAA Alternative Loan Trust 2005-62 Series 2005-62 Class CUSIP Rating ----- ----- ------ 1-A-1 12668ATN5 AAA 2-A-1 12668ATT2 AAA 2-A-2 12668ATU9 AAA 2-A-3 12668ATV7 AAA 2-A-4 12668AYB5 AAA Opteum Mortgage Acceptance Corporation Series 2005-5 Class CUSIP Rating ----- ----- ------ I-APT 68383NCU5 AAA I-A1A 68383NCV3 AAA I-A1B 68383NCW1 AAA I-A1C 68383NCX9 AAA I-A1D 68383NCY7 AAA I-A2 68383NCZ4 AAA II-A1A 68383NDL4 AAA II-A1B 68383NDM2 AAA II-A1C 68383NDN0 AAA II-A1D1 68383NDP5 AAA II-A1D2 68383NDQ3 AAA II-AN 68383NDR1 AAA Terwin Mortgage Trust 2007-6ALT Series 2007-6ALT Class CUSIP Rating ----- ----- ------ A-1 88157VAA5 AAA A-2 88157VAB3 AAA A-3 88157VAC1 AAA * Bankruptcy Filings Soar to Almost 30% in Past 12 Months --------------------------------------------------------- The 12-month period ended June 30, 2008, saw an increase of 28.9% in bankruptcy filings, the Associated Press reports, citing data obtained from the U.S. bankruptcy courts. There were a total of 967,831 bankruptcy filings for the 12-month period: Frequency Percentage --------- ---------- Business Filings 33,822 3.4% Non-Business Filings 934,009 96.5% ------- 967,831 Of the 934,009 non-business bankruptcy filings, 592,376 of them, or 63%, were Chapter 7 filings, or liquidation involving non- protected individual assets, relates the AP. Most of the non- business filings were under Chapter 13 protection. There were also 69%, or 23,372 Chapter 7 bankruptcy filings among the 33,822 business filings for the 12-month period, the AP further relates. ABI World reports that the total number of U.S. bankruptcies filed during the first six months of 2008 increased 29.2 percent over the same period in 2007. * Fried Frank Selected Five New Partners ---------------------------------------- Fried, Frank, Harris, Shriver & Jacobson LLP elected five lawyers to its partnership. As of September 1, 2008, the new partners are Andrew B. Barkan, Michael J. Barker, Murray Goldfarb, Bradford R. Lucas and Jennifer Lauren Rodburg. In a joint statement, Valerie Ford Jacob, Fried Frank's Chairperson, and Justin Spendlove, Fried Frank's Managing Partner, stated, "These appointments reflect the strength of the Firm and its continuing growth. We are proud and excited to have these colleagues, who have dedicated themselves to Fried Frank over the years, as partners of the Firm." Andrew B. Barkan, an attorney in the Corporate Department in the Firm's New York office, focuses his practice on corporate finance transactions, including the representation of issuers and underwriters in domestic and international high-yield and investment-grade debt offerings, acquisition financings, equity offerings, spin-offs and related capital market and private equity transactions. In addition, Mr. Barkan frequently works with investment banks in connection with acquisition financing commitments, and advises clients on a variety of securities law and corporate governance matters. He joined the Firm in 2000. Mr. Barkan received his JD from New York University School of Law in 2000 and his BS, magna cum laude, from the Wharton School of the University of Pennsylvania in 1997. He is admitted to the bar in New York. Michael J. Barker, an attorney in the Real Estate Department in the Firm's New York office, focuses his practice on a broad range of domestic and foreign acquisitions, financings, development and construction projects, joint ventures and real estate investment transactions involving commercial, residential, retail and hospitality properties. His diverse client list includes developers, owners, lenders and institutional investors. Mr. Barker joined the Firm in 2006 as special counsel. He received his JD from the College of Law of England and Wales in 1991 and his BA from the University of Sussex in 1990. He is admitted to the bar in New York. Murray Goldfarb, an attorney in the Corporate Department in the Firm's New York office, concentrates his practice on the representation of private equity funds and public and private companies in mergers and acquisitions, leveraged buyouts and joint ventures. He advises clients on acquisitions and investments in private and public companies, on the structuring and implementation of exit strategies, and in connection with securities laws compliance, corporate governance issues and other general corporate matters. Mr. Goldfarb joined the Firm in 2000. He received his LLM in taxation in 2003 from New York University School of Law, his JD, cum laude, from New York University School of Law in 2000, and his BS, magna cum laude, from Miami University of Ohio in 1997. He is admitted to the bar in New York. Bradford R. Lucas, an attorney in the Corporate Department in the Firm's Washington DC office, focuses his practice primarily on asset management matters, including the structuring and offering of hedge funds, private equity funds and other alternative investment products. In addition, he has worked on a variety of other transactional and securities law matters, including securities offerings and mergers and acquisitions, and has provided general corporate counsel on governance issues. Prior to joining the Firm in 2001, Mr. Lucas served as a judicial clerk to The Honorable Thomas Rawles Jones, Jr., United States Magistrate Judge, United States District Court for the Eastern District of Virginia. He received his JD, magna cum laude, from George Mason University School of Law in 2000 and his BA from the University of Virginia in 1997. He is admitted to the bar in the District of Columbia and Virginia. Jennifer Lauren Rodburg, an attorney in the Bankruptcy and Restructuring practice in Fried Frank's New York office, has a broad range of experience in advising clients on a variety of bankruptcy and restructuring-related matters. She has been active in the representation of corporate debtors, creditors and shareholders in chapter 11 cases and out-of-court restructurings both within the United States and abroad. Ms. Rodburg has also represented a variety of significant investors, creditors or third party purchasers in arbitrage and restructuring matters. She joined the Firm in 2000. Ms. Rodburg received her JD from New York University School of Law in 2000 and her BA, magna cum laude, from the University of Pennsylvania in 1997. She is admitted to the bar in New York and New Jersey, and she is admitted to practice in the courts of the Southern District of New York and the Eastern District of Michigan. About Fried Frank Fried, Frank, Harris, Shriver & Jacobson LLP -- http://www.friedfrank.com/-- is an international law firm with more than 650 attorneys in offices in New York, Washington, D.C., London, Paris, Frankfurt, Hong Kong and Shanghai. Fried Frank lawyers regularly represent major investment banking firms, private equity houses and hedge funds, as well as many of the largest companies in the world. The Firm has an association with Huen Wong & Co. in Hong Kong. * BOOK REVIEW: Working Together: 12 Principles for Achieving Excellence in Managing Projects, Teams, and Organizations --------------------------------------------------------- Author: James P. Lewis Publisher: Beard Books Hardcover: 208 pages List Price: US$34.95 Own your personal copy at http://amazon.com/exec/obidos/ASIN/158798279X/internetbankrupt This intriguing book tells the story of how the the author led in the restoration of Boeing Commercial Airplanes to a global industry leading position. In conjunction with Alan Mulally, President and CEO of Boeing and developer of his twelve guiding principles of project management, the "working together" principles and practices were the key to a successful conclusion of the project creating and selling the revolutionary Boeing 777. That project may have been the biggest test of the "working together" principles and practices, and should be required reading for all managers and would-be managers. These principles include such matters as clear performance goals, an inclusive working environment, and the use of active listening skills. The application of these principles to the real world makes for a book full of practical guidance and enduring managerial tools. ********* 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. Sheryl Joy P. Olano, 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 ***