/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/080926.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, September 26, 2008, Vol. 12, No. 230 Headlines ANATOLI KARATCHOUN: Case Summary & 15 Largest Unsecured Creditors ADELPHIA COMM: Trust Releases Legal Proceedings Updates AFFINIA GROUP: S&P Assigns 'BB-' Rating on Proposed $200MM Notes AMDL INC: Closes Convertible Notes' Private Placement AMERICAN INT'L: SEC Subpoenas Funds on Share Manipulation AMERICAN MEDIA: June 30 Balance Sheet Upside-Down by $398.7MM APP PHARMACEUTICALS: Fresenius SE Completes Firm's Acquisition ARAMARK CORP: S&P Holds 'B+' Rating; Changes Outlook to Positive ARIAD PHARMACEUTICALS: SEC Will Keep Merck Agreement Under Seal ARIAD PHARMACEUTICALS: Board Okays ARIAD Gene Therapeutics Merger ARIAD PHARMACEUTICALS: Names Laurie Allen as AGTI President ARIAD PHARMACEUTICALS: Court Grants Amgen Summary Judgment Motion ARIGATO JAPANESE: Case Summary & Largest Unsecured Creditors ASARCO LLC: Files Second Amended Joint Plan of Reorganization ASARCO LLC: Parent Files 1st Amended Plan & Disclosure Statement ASARCO LLC: Plan Voting Begins; Confirmation Hearing on Nov. 17 ASARCO LLC: Various Parties Object to Disclosure Statement ATHEROGENICS INC: Cuts Workforce to 30 Employees ATRIUM CORP: Extends 11-1/2% Notes Exchange Offer to Sept. 29 BEAR STEARNS: Agrees on $28MM Settlement in Fraud Case BILL HEARD: Collapses, Closes Down 13 Stores BOSQUE POWER: S&P Puts 'B+' Issue Rating Under Negative Watch BOWNETREE LLC: Wants to Employ Stephen Kass as Bankruptcy Counsel BUILDERS FIRSTSOURCE: S&P Cuts Corporate Credit Rating to 'B-' BURLINGTON COAT: CEO Mark Nesci Will Retire CBA COMMERCIAL: Fitch Takes Rating Actions on Various Classes CENTRO RENAL: Case Summary & Two Largest Unsecured Creditors CHANDLER OAKS: Case Summary & Eight Largest Unsecured Creditors CHRYSLER LLC: Will Lay Off 300 Salaried Employees CLAIRE'S STORES: Posts $16.9 Million Net Loss in Qtr. Ended Aug. 2 CONTINENTAL AIRLINES: Hurricane Ike's Impact Estimated at $50MM CONVEYOR COMPANY: Case Summary & 20 Largest Unsecured Creditors COUNTRYWIDE FINANCIAL: Craig Buffie Replaces Andrew Gissinger DAYTON SUPERIOR: Moody's Holds 'B1' Rating on $100MM Term Loan DELPHI CORP: Gets Green Light to Halt Pension Contributions DELTA AIR: Stockholders Approve Northwest Merger DOMINICK SARTORIO: Case Summary & 20 Largest Unsecured Creditors EDGEWATER FOODS: Ian Fraser and Robert Rooks Quit from Board EOS AIRLINES: Court Extends Exclusive Plan Filing Date to Oct. 24 ESTATE FINANCIAL: U.S. Trustee Sets 341(a) Meeting for October 7 ESTATE FINANCIAL: Ch. 11 Trustee Wants JMBM as Bankruptcy Counsel ETELOS INC: Files Prospectus for Sale of 5,760,741 Shares ETERNAL TECHNOLOGIES: Receiver to Collect $732,290 in Payments FANNIE MAE: Top Executives Leaving Company FGIC CORP: S&P Cuts Credit and Notes Ratings to 'CCC' from 'B' FIRST MARBLEHEAD: Fitch Lowers 25 Classes of Student Loan Trusts FULTON STREET: S&P Chips Notes Ratings; Removes Negative Watch GENERAL MOTORS: Delphi Wants to Shift $3.4BB in Pension Debts GENERAL MOTORS: May Lack Cash, Hires Outsider to Help Cut Costs GREAT LAKES: Case Summary & 20 Largest Unsecured Creditors GROWERS DIRECT: June 30 Balance Sheet Upside-Down by $2.39 Million GSAA HOME: S&P Lowers Ratings on 21 Classes of Certificates HANOVER CAPITAL: Defer Payment of Interest Due September 30 HEIGHTS SUBDIVISION: Case Summary & 10 Largest Unsecured Creditors HELEN SPANGLER: Case Summary & Seven Largest Unsecured Creditors HELLER EHRMAN: Partners to Vote on Firm's Dissolution Friday HEXION SPECIALTY: To Sell Epoxy Resins Biz to Spolchemie HOME INTERIORS: Details Plans to Split Up; Officers to Submit Bids HRP MYRTLE: Files for Voluntary Chapter 11 Protection ICFQ DESARROLLOS: Files Amended Disclosure Statement IL LUGANO: Seeks to Employ Neligan Foley as Bankruptcy Counsel IMPAC: Moody's Cuts Ratings on 194 Tranches from 18 Transactions INTERMET CORP: Lenders Worried on Assets Deterioration J&D RESTAURANT: Case Summary & 20 Largest Unsecured Creditors JEFFERSON COUNTY: Former Official Pleads Guilty in Debt Probe JEFFERSON COUNTY: S&P Slashes Underlying Rating to 'D' from 'B' JP MORGAN CHASE: Fitch Affirms Rating on $2.6MM Class LV-2 at 'BB' JPMORGAN TRUST: S&P Trims Ratings on 13 Certificate Classes JUDITH ROGAN: Voluntary Chapter 11 Case Summary KAYDON CORP: S&P Withdraws 'BB+' Rating at Company's Request KELSEY GLEN: Case Summary & 11 Largest Unsecured Creditors KIDSPEACE INC: Moody's Trims Debt Rating to 'B3'; On Watchlist LAS VEGAS SANDS: $5.25BB Jumbo Loan in Jeopardy Report Says LEHMAN BROTHERS: Claims to Trade in SecondMarket Auction Platform LUMINENT MORTGAGE: Wants Disclosure Statement Approval by Oct. 10 MAIN STREET: Fitch Removes Neg. Watch on 'C' Rated Revenue Bonds MAXTEL COMMS: Case Summary & 19 Largest Unsecured Creditors METRO ONE: Names MSCM LLP as Independent Public Accountants MIAMI-DADE HOUSING: Moody's Trims Revenue Bonds Rating to 'Ba3' MPF CORP: Files for Bankruptcy in Texas and Bermuda MPF CORP: Case Summary & 20 Largest Unsecured Creditors MICHAEL MOLLESTON: Case Summary & 11 Largest Unsecured Creditors MIRANT CORP: Suspends Program of Returning Cash to Stockholders MONEYGRAM INTERNATIONAL: Board Approves Deferred Compensation Plan MORGAN STANLEY: Moody's Cuts $5MM Class IVA Notes Rating to Ba1 MORGAN STANLEY: Fitch Cuts Rating to 'BB-' on Expected Losses MULTIPLAN INC: S&P Affirms 'B+' Ratings; Revises Outlook to Stable NETEFFECT INC: Intel Offers to Buy Firm for $8 Million NEXIA HOLDINGS: Sells 30,000 Shares of Series C Preferred Stock NORTHWEST AIRLINES: Stockholders Approve Delta Air Merger OLYMPIC SALES: Olympic Boat Closes Retail Centers in Washington OPEN ENERGY: Posts $34.9 Million Losses for Year Ended May 31 OSKAR HUBER: Seeks Court Okay for Going-Out-of-Business Sale PCG SUMMIT-LAKELINE: Court Okays Stutman as Special Counsel PCG SUMMIT-LAKELINE: Files Schedules of Assets & Liabilities PENN OCTANE: Standard General, et al., Disclose 28.5% Stake PEOPLES COMMUNITY: To Sell Assets to CenterBank & CBSEF PHOENIX DEMOLOTION: Case Summary & 20 Largest Unsecured Creditors PILGRIM'S PRIDE: Stops Trading on NYSE After Shares Drop 38% PINNACLE HEIGHTS: Voluntary Chapter 11 Case Summary PRB ENERGY: Wants to Sell Pipeline Assets and Furniture to Wytex PRESERVE LLC: Case Summary & Six Largest Unsecured Creditors PROSYS-TEC COMPUTERS: Files Creditors Protection under BIA QUAD J INC: Case Summary & Seven Largest Unsecured Creditors RENFRO CORP: Weak Performance Cues S&P to Change Outlook to Neg. RETAIL PRO: Settles Case with Securities and Exchange Commission ROCKWOOD SPECIALTIES: Fitch Holds 'B' IDR on Solid Performance ROUNDY'S SUPERMARKETS: Moody's Cuts $125MM Credit Rating to 'B1' SALAS AUTOMOTIVE: Case Summary & 19 Largest Unsecured Creditors SHERIDAN HOMES: Court Dimisses Chapter 11 Case SHIV RESTAURANT: Case Summary & Four Largest Unsecured Creditors SIRIUS COMPUTER: Moody's Holds 'B1' Rating; Outlook Negative SIX FLAGS: Heightened Default Risk Cues Moody's to Cut Ratings SKIPPER'S INC: Closing Stores Under Bankruptcy Proceedings STOKESAY MANAGEMENT: Case Summary & Six Largest Unsec. Creditors STUART EDWARDS: Section 341(a) Meeting Scheduled for October 1 SWANSEA PROPERTIES: Section 341(a) Meeting Scheduled for Sept. 30 SWANSEA PROPERTIES: Files Schedules of Assets & Liabilities SWANSEA PROPERTIES: Court OKs Osborn Maledon as Bankr. Counsel SWANSEA PROPERTIES: Court Okays Quarles Brady as Special Counsel SYNOVICS PHARMACEUTICALS: Posts $4.7MM Loss for 3 Quarters SYNOVICS PHARMA: Drops Plan to Issue New Securities T & D DEVELOPMENT: Case Summary & Four Largest Unsecured Creditors THORNBURG MORTGAGE: EJF Capital Discloses 10.5% Equity Stake TREE CARE: Case Summary & Six Largest Unsecured Creditors TRM CORP: Chairman Brotman Resigns; M. Venezia Appointed to Board UNIFI INC: To Hold Annual Stockholders' Meeting on October 29 UNIPROP MANUFACTURED: June 30 Balance Sheet Upside-Down by $21.4MM VILLA DEL SOL: Section 341(a) Meeting Scheduled for October 7 VILLA DEL SOL: Creditor Asks Court to Dismiss Chapter 11 Case VILLA DEL SOL: Seeks to Employ Thomas Woodward as Counsel VIRGIN MOBILE: Appoints Two New Board Members From SK Telecom VIRGIN MOBILE: CFO John Feehan to Leave in Mid-November VIRGIN MOBILE: Sprint Ventures Discloses 63.1% Equity Stake WASHINGTON MUTUAL: JPMorgan Buys Banking Operations for $1.9BB WASHINGTON MUTUAL: Fitch Chips LT Issuer Default Rating to 'B-' WASHINGTON MUTUAL: DBRS Cuts Issuer & Senior Debt Rating to 'B' WASHINGTON MUTUAL: Moody's Trims Ratings on Class D Certs. to Ba2 WASHINGTON MUTUAL: Moody's Lowers Ratings on 26 Classes of Trust WASHINGTON MUTUAL: S&P Junks Preferred Stock and Credit Ratings WAVE SYSTEMS: To Sell Series I Convertible Preferred Stock WENTWORTH ENERGY: Malone & Bailey Appointed as New Accountants WESTAFF INC: Westaff USA Unit Receives $1MM Loan from DelStaff LLC WESTAFF INC: Price Rule Breach Spurs Nasdaq Delistment Warning WHITEHALL JEWELERS: Files Amended Schedules of Assets & Debts WHITNEY LAKE: Case Summary & 20 Largest Unsecured Creditors WINDY CITY: Files Amended Plan of Reorganization in Arizona WORLD HEART: Shares to Continue Trading on NASDAQ Capital Market YOUNG BROADCASTING: Gets NASDAQ Panel's Okay to Transfer Listing ZVUE CORPORATION: John Durham Appointed to Board of Directors * S&P: US Treasury Plan May Bring Financial Markets Back to Normal * S&P Says Downgrade Potential Soars to Three-Year High * S&P: Investment-Grade Composite Credit Spread Expands 302 Bps * S&P Downgrades Ratings on 197 Classes from 19 U.S. ALT-A RMBS * SecondMarket to Begin Trading Lehman Claims in Auction Platform * U.S. $700 Billion Financial Bailout Plan Stalls * More Bankruptcies to Follow Falgun Dharia's Filings * Oil Price Drop "Too Little, Too Late" for Ailing Carriers * Bober Markey Welcomes Andrew Zinger as Senior Consultant * BOOK REVIEW: The Chief Executives ********* ANATOLI KARATCHOUN: Case Summary & 15 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Anatoli I. Karatchoun aka Point West Excavation, LLC Lyubov Karatchoun 700 Longwood Lane, Apt. 206 Asheville, NC 28806 Bankruptcy Case No.: 08-10768 Chapter 11 Petition Date: September 24, 2008 Court: Western District of North Carolina (Asheville) Judge: George R. Hodges Debtor's Counsel: David G. Gray, Esq. judyhj@bellsouth.net Westall, Gray, Connolly & Davis P.A. 81 Central Avenue Asheville, NC 28801 Tel: (828) 254-6315 Fax: (828) 255-0305 Total Assets: $3,407,900 Total Debts: $2,213,473 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/ncwb08-10768.pdf ADELPHIA COMM: Trust Releases Legal Proceedings Updates ------------------------------------------------------- The Adelphia Recovery Trust, in a filing with the U.S. Securities and Exchange Commission, provided status updates on certain legal proceedings it is a party to. Bank Litigation In July 2003, the Official Committee of Unsecured Creditors in the U.S. Bankruptcy Court for the Southern District of New York against Adelphia's prepetition commercial banks and lenders, former investment bankers and financial advisors, and assignees of Adelphia's pre-petition bank debt. The Creditors Committee Complaint asserted 52 causes of action, alleging fraudulent and preferential transfers and fraud and breaches of fiduciary duties, among other things. The Official Committee of Equity Security Holders for Adelphia sought to assert additional claims against the defendants in the form of an intervenor complaint. The Equity Committee was granted leave to file its complaint. In October 2003, various defendants moved to dismiss both complaints. In August 2005, the Bankruptcy Court held that the Creditors Committee had standing to pursue the claims in the Original Complaint on behalf of, and together with, Adelphia. The claims asserted in the Creditors Committee Complaint and the Equity Committee Complaint were transferred to the ART pursuant to the Plan. In 2007, the Bankruptcy Court for the Southern District of New York issued separate decisions with respect to two Complaints. In the first decision, the Bankruptcy Court sustained the fraudulent transfer claims, the aiding and abetting breach of fiduciary duty claims, the breach of fiduciary duty claims against certain defendants, the equitable subordination and disallowance claims, the Bank Holding Company Act claims, and the voidable preference claims in the Official Committee of Unsecured Creditors' Complaint, but dismissed, with leave to replead, the claims for aiding and abetting fraud. In the second decision, the Bankruptcy Court dismissed the additional claims asserted in the Equity Committee's Complaint, but granted leave to replead the claims for fraud and fraudulent concealment. On July 10, 2007, the original defendants sought leave to appeal with respect to all the claims in the Creditors Committee's Complaint that the Bankruptcy Court had declined to dismiss. The District Court denied leave to appeal from the rulings that sustained the fraudulent transfer claims, the voidable preference claims, and the equitable subordination claims, but granted leave to appeal on certain discrete issues of law concerning the ART's standing, application of the Bank Holding Company Act, the existence of equitable disallowance under the Bankruptcy Code, and the existence of aiding and abetting breach of fiduciary duty liability under Pennsylvania law as well as the adequacy of the pleadings on that claim. On Oct. 31, 2007, while the appeal was pending, the ART filed an Amended Complaint. The Amended Complaint (i) consolidated the earlier complaints into a single complaint; (ii) added additional allegations to support the claims on which the Bankruptcy Court granted leave to replead (aiding and abetting fraud, fraudulent concealment, and fraud); and (iii) added as defendants about 380 new entities that became assignees of the Adelphia bank debt after the original complaints were filed. Certain defendants filed motions to dismiss the Amended Complaint and certain defendants filed answers to the Amended Complaint. In its Jan. 17, 2008, decision on appeal, the District Court concluded, inter alia, that the ART had standing and the Bankruptcy Court properly had sustained the claims for aiding and abetting breach of fiduciary duty and equitable disallowance. On June 18, 2008, the District Court dismissed the Bank Holding Company Act claim with leave to replead to cure an ambiguity in the original allegations. The Bank Holding Company Act claims subsequently were repleaded in a Second Amended Complaint filed March 4, 2008. Certain defendants filed motions to dismiss the repleaded Bank Holding Company Act claims set forth in the Second Amended Complaint. The motions to dismiss the Amended Complaint and the Second Amended Complaint are pending. A trial on the Amended and Second Amended Complaint is set no earlier than March 2009. Prestige and FPL Litigation On June 24, 2004, the Creditors Committee filed two separate fraudulent conveyance complaints against: (i) FPL Group, Inc. and West Boca Security, Inc.; and (ii) Prestige Communications of NC, Inc., Jonathan J. Oscher, Lorraine Oscher McClain, Robert F. Buckfelder, Buckfelder Investment Trust, and Anverse, Inc. The Actions were filed in the Bankruptcy Court. In a decision dated Jan. 7, 2008, the Bankruptcy Court withdrew the reference in the Prestige action and transferred the case to the District Court. The FPL action remains pending in the Bankruptcy Court. Discovery is ongoing in both actions. The Prestige action seeks to recover fraudulent transfers in connection with Adelphia's purchase of the assets of Prestige Communications of N.C., Inc., an acquisition that closed on July 5, 2000, as well as a claim that the owners of the Prestige cable systems aided and abetted breaches of fiduciary duty on the part of the Rigas family in connection with the transaction. The trial in the Prestige action is scheduled to begin Jan. 20, 2009. The FPL action seeks to recover an alleged fraudulent transfer arising out of Adelphia's repurchase of certain of its stock from FPL in January 1999 for $149.5 million. The trial date in the FPL action is Dec. 1, 2009. The ART says that at this time, it cannot predict the outcome of these proceedings or estimate the possible financial effect of these proceedings on the ART. About Adelphia Comms Based in Coudersport, Pennsylvania, Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television company. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, Internet access and other advanced services over its broadband networks. The company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the Debtors in their restructuring efforts. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates' chapter 11 cases. The Bankruptcy Court confirmed the Debtors' Modified Fifth Amended Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That plan became effective on Feb. 13, 2007. AFFINIA GROUP: S&P Assigns 'BB-' Rating on Proposed $200MM Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' issue-level rating and '1' recovery rating to Affinia Group Inc.'s proposed $200 million senior secured notes due 2013. The issue-level rating and recovery rating indicate S&P's expectation of very high recovery of principal in the event of a payment default or bankruptcy. At the same time, S&P affirmed the 'B' corporate credit rating on Affinia. The outlook is negative; however, S&P would likely revise the outlook to stable if Affinia is successful in its refinancing efforts despite difficult credit market conditions. The proposed notes and asset-based lending facility would improve liquidity and eliminate the threat of restrictive financial covenants in Affinia's existing secured term loan. Proceeds from the secured notes and an unrated proposed $340 million ABL revolving credit facility would be used to replace Affinia's existing senior secured term loan and revolving credit facilities. Proceeds would also be used to finance the recently announced $49 million acquisition of unrated Chinese brake component producer Longkou Haimeng Machinery Co., one of Affinia's two primary suppliers in China. The ratings on Ann Arbor, Mich.-based Affinia reflect the company's high leverage, currently thin liquidity, and participation in the intensely competitive auto aftermarket components industry. These weaknesses more than offset Affinia's fair geographical diversity and No. 1 or No. 2 position in its primary markets. Affinia, with annual revenues of nearly $2.2 billion, offers well- known brands such as Raybestos brakes and WIX oil and air filters. Nearly all of Affinia's sales come from supplying products to the replacement aftermarket, so the company is not exposed to the volatile and declining production schedules of the U.S.-based automakers. However, "The auto aftermarket is intensely competitive and vulnerable to substitution by low-cost imports," said Standard & Poor's credit analyst Gregg Lemos Stein. "Growth is sluggish, and we expect it to remain so in 2008 and 2009 because of high gas prices and the weak U.S. economy. Also, raw material cost inflation is a risk factor," he continued. Affinia's largest exposures are to steel, energy, and shipping costs, which have been rising and volatile. The company recently implemented price increases intended to fully recover these higher costs for the full year. To address the threat of foreign competition and eliminate excess manufacturing capacity, Affinia has closed numerous plants in the U.S., Canada, and Europe while increasing production and outsourcing in lower-labor-cost countries such as China, Mexico, and Ukraine. The multiyear restructuring plan is nearing completion but still entails significant execution risk in that the company must maintain an adequate supply of finished goods while consolidating its locations. The negative outlook reflects primarily restrictive financial covenants that reduce Affinia's liquidity. S&P would likely revise the outlook to stable if Affinia is successful in refinancing its existing secured credit facilities despite difficult credit market conditions, as this would eliminate the constraint of the financial covenants. An upgrade is highly unlikely during the next year because of weak economic conditions in the U.S. and Western Europe. S&P could lower the ratings if the current refinancing is unsuccessful and S&P came to expect that the company would fail to remain in compliance with its covenants, if free operating cash flow remained negative, or if liquidity otherwise deteriorated from current levels. Even if the refinancing is successful, a downgrade could be triggered by leverage increasing substantially over 6x, including S&P's adjustments, or if availability under the proposed ABL were to become constrained. AMDL INC: Closes Convertible Notes' Private Placement ----------------------------------------------------- AMDL, Inc. disclosed in a Securities and Exchange Commission filing the successful closing and terms of a $2,510,000 private placement offering of 10% convertible notes. The placement agents for the offering were Jesup & Lamont Securities Corporation and Dawson James Securities, Inc. Gary Dreher, President and CEO of AMDL, Inc., said, "This financing strengthens our cash position and allows us to accelerate key business initiatives. We appreciate the financial support from our investors and their vote of confidence in AMDL's China and US-led operations." AMDL sold $2,510,000 of 10% convertible notes at par value. The notes mature at the earlier of 12 months from the completion of a registered follow-on public offering or 24 months after issuance. The notes will be repaid either at maturity in cash equal to 150% of the principal amount of the notes plus an amount equivalent to 10% per annum interest, or upon forced mandatory conversion into shares of the Company's common stock in the event of a public offering of at least $25 million in gross proceeds to AMDL. At any time after February 15, 2009, the holders of the notes have the right to convert the entire principal and interest due into common stock of the Company. The conversion price will be at a discount of 50% to: (i) the price of the Company's common stock on the closing of the public offering; or (ii) the common stock on February 15, 2009; provided, however, in no event will the conversion price be less than $1.20 per share. In the event of a voluntary conversion, the shares issued will not be registered. The shares issuable on conversion carry "piggy- back" registration rights should the Company file a registration statement subsequent to conversion. In the event of a forced conversion into common shares in the public offering, note holders will be subject to a lock-up on any remaining shares not sold in the offering for 90 days after the public offering. Upon any conversion of the notes into common stock of the Company, the Company will also issue warrants to purchase common stock to the converting investors in the amount equal to 50% of the number of shares of common stock into which their notes were converted. Warrants will have a term of five years from the date of issuance and shall be exercisable at a price equal to 120% of the closing price of the Company's common stock on the date of conversion; provided however, in no event shall the exercise price of the warrants be less than 120% of the five day volume average weighted price -- VWAP -- of the Company's common stock the on closing date of the debt offering. The placement agents received cash commissions of $251,000, representing 10% of the principal amount of the notes purchased, $62,750 in non-accountable expenses and due diligence fees -- 2-1/2% of the principal amount of the notes purchased -- and five year warrants to purchase a maximum of 209,167 shares of the Company's common stock -- which number will be adjusted and reduced when the initial conversion price of the notes is determined -- exercisable at $2.69 per share, representing a price equal to 115% of the five day VWAP of the common stock of the Company up to the closing. AMDL structured the debt financing so the conversion price will be determined at or about the same time as an anticipated 1st quarter 2009 "at market" public offering. Prior to this event, the Company expects to meet certain milestones that it believes will positively impact the conversion price. Specifically, AMDL intends to a secure new comprehensive credit facility in China. The credit facility is anticipated to include collateralized mortgage financing, construction financing, as well as lines of credit for accounts payable and research and development. AMDL intends to use proceeds from these financings for, among other things, the release of new pharmaceutical products in the China market; to advance business development efforts for the recently FDA-approved DR-70(R) ELISA cancer monitoring test; accelerate the product development pipeline for leading products that include Goodnak(R), the MyHPV Chip Test Kit(R), and Domperidone; and to fund AMDL's other general working capital needs in China and the US. No assurances can be given that these milestones can be achieved or what the timing thereof will be. About AMDL Inc. Based in Tustin, California, AMDL, Inc., (AMEX: ADL) -- http://www.amdl.com/-- with operations in Shenzhen, Jiangxi, and Jilin, China, is a vertically integrated specialty pharmaceutical company. In combination with its subsidiary Jade Pharmaceutical Inc., AMDL engages in the research, development, manufacture, and marketing of diagnostic products. Going Concern Doubt As reported in the Troubled Company Reporter on April 25, 2008, KMJ Corbin & Company LLP expressed substantial doubt about AMDL 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 operating losses and negative cash flows from operations through Dec. 31, 2007, and accumulated deficit at Dec. 31, 2007. The company incurred net losses off $429,567 and $2,264,305 during the three months ended June 30, 2008 and 2007, respectively, and had an accumulated deficit of $38,788,660 at June 30, 2008. In addition, the company used cash in operations of $1,348,241 and $2,876,356 during the six months ended June 30, 2008 and 2007, respectively. AMERICAN INT'L: SEC Subpoenas Funds on Share Manipulation --------------------------------------------------------- The U.S. Securities and Exchange Commission subpoenaed more than two dozen hedge funds on Sept. 22 as part of its probe on whether traders were spreading rumors to manipulate shares, Kara Scannell at The Wall Street Journal reports, citing people familiar with the matter. Elizabeth MacDonald at Foxbusiness.com relates that the SEC has subpoenaed 50 hedge funds to find out if they were engaging in rumor mongering to drive down shares in 19 financial companies "they had shorted in naked short sales to book a profit." According to WSJ, the subpoenas identified these financial institutions affected by manipulation: -- American International Group Inc., -- Goldman Sachs Group Inc., -- Lehman Brothers Holdings Inc., -- Morgan Stanley, -- Washington Mutual Inc., and -- Merrill Lynch & Co. WSJ relates that the subpoenas seek trading data -- include details of funds' positions in stocks, derivatives, swaps and other financial instruments, when trades were initiated and settled, and whom they involved -- and e-mail communications between Sept. 1 and Sept. 19, when certain financial markets came close to freezing up. Bloomberg News relates that the Federal Bureau of Investigation is probing the financial troubles of AIG, Lehman Brothers, Fannie Mae and Freddie Mac. Evan Perez at WSJ relates that law enforcement officials said that the FBI's preliminary inquiries are focusing on whether fraud helped cause some of the troubles at these four companies. According to WSJ, the U.S. Attorney in Brooklyn has brought charges against brokers who allegedly tricked some institutional investors into purchasing risky auction-rate securities. Based in New York City, American International Group Inc. -- http://www.aig.com/-- (NYSE: AIG) is an international insurance and financial services organization, with operations in more than 130 countries and jurisdictions. The company is engaged through subsidiaries in General Insurance, Life Insurance & Retirement Services, Financial Services and Asset Management. The company's British headquarters are located on Fenchurch Street in London, continental Europe operations are based in La Defense, Paris, and its Asian HQ is in Hong Kong. AIG owns Ocean Finance, a United Kingdom based company providing home owner loans, mortgages and remortgages. AIG operates in the UK with the brands AIG UK, AIG Life and AIG Direct. It has about 3,000 employees, and sponsors the Manchester United football club. In response to redemption demands, AIG Life (UK) suspended redemptions of its AIG Premier Bond money market fund on Sept. 19, 2008, in order to provide an orderly withdrawal of assets. The Federal Reserve Bank of New York has extended to AIG a revolving credit facility up to $85 billion. AIG's borrowings under the revolving credit facility will bear interest, for each day, at a rate per annum equal to three-month Libor plus 8.50%. The revolving credit facility will have a 24-month term and will be secured by a pledge of assets of AIG and various subsidiaries. The revolving credit facility will contain affirmative and negative covenants, including a covenant to pay down the facility with the proceeds of asset sales. The summary of terms also provides for a 79.9% equity interest in AIG. The corporate approvals and formalities necessary to create this equity interest will depend upon its form. In a statement, the company said "AIG is a solid company with over $1 trillion in assets and substantial equity, but it has been recently experiencing serious liquidity issues." Standard & Poor's Ratings Services has revised the CreditWatch status of most of its ratings on the AIG group of companies -- including its 'A-' long-term counterparty credit ratings on American International Group Inc. and International Lease Finance Corp. and the 'A+' counterparty credit and financial strength ratings on most of AIG's insurance operating subsidiaries -- to CreditWatch developing from CreditWatch negative. Fitch Ratings revised its Rating Watch on American International Group, Inc. to Evolving from Negative. Fitch viewed this transaction as a favorable development that alleviates significant near-term liquidity concerns. The Troubled Company Reporter reported on Sept. 19, 2008 that that Edward Liddy replaced Robert Willumstad as AIG's CEO. * * * In a U.S. Securities and Exchange Commission filing dated Aug. 6, 2008, AIG reported a net loss for the second quarter of 2008 of $5.36 billion compared to 2007 second quarter net income of $4.28 billion. Second quarter 2008 adjusted net loss was $1.32 billion, compared to adjusted net income of $4.63 billion for the second quarter of 2007. The continuation of the weak U.S. housing market and disruption in the credit markets, as well as global equity market volatility, had a substantial adverse effect on AIG's results in the second quarter. Net loss for the first six months of 2008 was $13.16 billion, compared to net income of $8.41 billion in the first six months of 2007. Adjusted net loss for the first six months of 2008 was $4.88 billion, compared to adjusted net income of $9.02 billion in the first six months of 2007. AMERICAN MEDIA: June 30 Balance Sheet Upside-Down by $398.7MM ------------------------------------------------------------- American Media Operations Inc. disclosed in a Securities and Exchange Commission filing that as of June 30, 2008, it balance sheet showed $891.6 million in total assets, $1.29 billion in total liabilities, resulting to $398.7 million in shareholders' deficit. AMOI posted $388,000 in net profit on $118.8 million in net revenues for quarter ended June 30, 2008, compared with $123,000 in net losses on $121.1 million in net revenues for quarter ended June 30, 2007. As of June 30, 2008, the company had cash and cash equivalents of $19.6 million, $26.0 million outstanding on its revolving credit facility, and a working capital deficit of $467.0 million. The increase in working capital deficit of $444.8 million from $22.2 million at March 31, 2008 primarily resulted from: (i) $413.4 million related to the company's 2009 Notes being classified as a current liability; (ii) a $44.6 million decrease in cash and cash equivalents primarily due to a $34.0 million payment towards its Revolving Facility, a fiscal year 2008 Excess Cash Flow paymentof $8.1 million and the first required quarterly $1.1 million principal payment on its Term Facility borrowing; (iii) a $3.4 million decrease in trade receivables; (iv) a $2.0 million increase in deferred revenue; and (v) a $1.7 million increase in accrued expenses and other liabilities. These items were partially offset by: (i) an $8.1 million decrease in the current portion of its Term Facility due to the $8.1 million fiscal year 2008 Excess Cash Flow payment made on June 30, 2008; (ii) a $7.7 million decrease in accrued interest due to the timing of interest payments; (iii) a $2.5 million decrease in accounts payable; (iv) a $1.1 million increase in inventories; and (v) a $0.8 million increase in prepaid expenses and other current assets. AMOI believes that it is probable that it will be able to complete a refinancing of the 2009 Notes on or prior to Feb. 1, 2009. About American Media Inc. Headquartered in Boca Raton, Florida, American Media Operations Inc., is a publisher of celebrity, health and fitness, and Spanish language magazines, including Star, Shape, Men's Fitness, Fit Pregnancy, Natural Health, and The National Enquirer. AMI also owns Distribution Services Inc. * * * As reported in the Troubled Company Reporter on Sept. 3, 2008, Standard & Poor's Ratings Services said that American Media Operations Inc.'s (CCC+/Negative/--) announcement that it has commenced a tender offer for its $414.5 million 10-1/4% senior subordinated notes due 2009 and its $155.5 million 8-7/8% senior subordinated notes due 2011 at par value does not currently affect the rating or outlook on the company. APP PHARMACEUTICALS: Fresenius SE Completes Firm's Acquisition -------------------------------------------------------------- APP Pharmaceuticals Inc. disclosed in a Securities and Exchange Commission filing that on Sept. 10, 2008, Fresenius Kabi Pharmaceuticals Holding, Inc., completed the acquisition of APP Pharmaceuticals pursuant to the merger contemplated by an Agreement and Plan of Merger, dated July 6, 2008, among Fresenius SE, a societas europaea organized under the laws of Germany; FK Holdings, an indirect, wholly owned subsidiary of Fresenius; Fresenius Kabi Pharmaceuticals, LLC, a direct, wholly owned subsidiary of FK Holdings; and APP. The Merger was approved on July 6, 2008, by the written consent of Dr. Patrick Soon-Shiong and certain entities affiliated with him, who together owned at that date approximately 81.1% of the outstanding shares of APP common stock. As a result of the Merger, APP is a direct wholly owned subsidiary of FK Holdings. A total of $3,730,419,320.92 in cash was paid and 163,251,906 Contingent Value Rights were issued as consideration for the Merger. Pursuant to the Merger Agreement, from the effective time of the Merger, the managers of Merger Sub, consisting of Ulf M. Schneider and Rainer Baule, became the directors of APP to serve as directors in accordance with the certificate of incorporation and by-laws of APP. Effective Sept. 10, 2008, the certificate of incorporation of APP was amended to delete provisions that related to APP's authorized share capital and to provide that APP has authority to issue 1,000 shares of common stock, each having a par value of one-tenth of one cent -- $0.001. The Certificate was also amended to delete provisions related to the management of APP and to provide that: (i) the business and affairs of APP will be managed by or under the direction of the board of directors of APP, (ii) the directors will have concurrent power with the stockholders to make, alter, amend, change, add to or repeal the By-Laws, (iii) the number of directors of APP shall be as from time to time fixed by, or in the manner provided in, the By-Laws and that election of directors need not be by written ballot unless the By-Laws so provide; and (iv) the directors are empowered to exercise all the powers and do all the acts and things as may be exercised or done by APP, subject to applicable law, the Certificate, and the By- Laws. About APP Pharmaceuticals Headquartered in Schaumburg, Illinois, APP Pharmaceuticals Inc. is a hospital-based injectable pharmaceutical company, focusing on oncology, anti-infective, anesthetic/analgesic and critical care markets. The company develops, produces and markets a comprehensive portfolio of over 100 hospital-based injectable products and operates three manufacturing facilities producing a comprehensive range of dosage formulations, including lyophilization. At March 31, 2008, the company's balance sheet showed total assets of $1,087,100,000 and total liabilities of $1,160,010,000, resulting in a total stockholders' deficit of $72,910,000. The Troubled Company Reporter reported on July 11, 2008, that Standard & Poor's Ratings Services affirmed APP Pharmaceuticals Inc.'s 'BB' long-term corporate ratings. The outlook on APP is stable. ARAMARK CORP: S&P Holds 'B+' Rating; Changes Outlook to Positive ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on ARAMARK Corp. to positive from stable. At the same time, S&P affirmed its ratings on ARAMARK, including the 'B+' corporate credit rating. The outlook revision reflects ARAMARK's good operating performance that has led to improved credit measures and a substantial liquidity position, despite current economic challenges. Philadelphia, Pennsylvania based ARAMARK had about $5.9 billion of debt as of June 27, 2008. The ratings on ARAMARK continue to reflect its highly leveraged financial profile and significant cash flow requirements to fund interest and capital expenditures. ARAMARK's good position in the competitive, fragmented markets for food and support services, and uniform and career apparel somewhat mitigate these factors. These positions have translated into a sizable stream of recurring revenues and healthy cash flow generation. "The positive outlook reflects our belief that ARAMARK's credit measures will continue to improve in the near to intermediate term, despite weak economic conditions," noted Standard & Poor's credit analyst Jean C. Stout. If the company can continue to improve key credit ratios, specifically leverage close to 5x and funds from operations to total debt trending toward 15%, we could raise the rating by one notch. "While unlikely over the near term, if liquidity becomes constrained and/or leverage increases above 5.5x and FFO to total debt declines to about 9%, we could revise the outlook to stable," she continued. S&P estimates that if fiscal 2008 sales increase by just 5% and EBITDA margins remain near current levels, leverage would be 5.5x and FFO would remain slightly above 10%. ARIAD PHARMACEUTICALS: SEC Will Keep Merck Agreement Under Seal --------------------------------------------------------------- On Sept. 12, 2008, L. Jacob Fien-Helfman, special counsel and information officer of the Securities and Exchange Commission, disclosed that ARIAD Pharmaceuticals, Inc. submitted an application under Rule 24b-2 requesting confidential treatment for information it excluded from the Exhibits to its Form 10-Q filed on August 11, 2008. "Based on representations by ARIAD Pharmaceuticals, Inc. that this information qualifies as confidential commercial or financial information under the Freedom of Information Act, 5 U.S.C. 552(b)(4), the Division of Corporation Finance has determined not to publicly disclose it." Mr. Fien-Helfman said excluded information from Exhibit 10.2 will not be released to the public through August 11, 2018. Exhibit 10.2 contained the Deforolimus API and Tablet Supply Agreement dated May 7, 2008, among ARIAD Pharmaceuticals, Inc., ARIAD Gene Therapeutics, Inc. and Merck & Co., Inc. A full-text copy of the company's Form 10-Q is available for free at http://researcharchives.com/t/s?3299 Background For the quarter ended June 30, 2008, the company posted $17,267,000 net loss on revenues of $1,450,000. The company's total operating expenses reached $18,856,000. For the six-month period ended June 30, 2008, the Company reported a net loss of $34,278,000. In an Aug. 7 press release, ARIAD said: "These results continue to reflect advancement of the Company’s development programs and the positive impact of the Company's collaboration with Merck & Co., Inc., for the development and commercialization of deforolimus. This collaboration resulted in an increase in license and collaboration revenue based on upfront and milestone payments received to date from Merck, and an increase in research and development expenses due to expansion of the Company’s clinical trials under the collaboration in the six-month period ended June 30, 2008 compared to the corresponding period in 2007. These results also reflect an increase in general and administrative expenses in 2008 compared to 2007, related to corporate and commercial development initiatives and patent litigation." "For the six-month period ended June 30, 2008, cash used in operations was $31,700,000 compared to cash used in operations of $26,400,000 for the same period in 2007. The Company ended the second quarter of 2008 with cash, cash equivalents and marketable securities of $60,000,000 compared to $85,200,000 at December 31, 2007." At June 30, 2008, the company's consolidated balance sheet showed $82,006,000 in total assets and $30,074,000 in total current liabilities, $12,250,000 long-term debt, $111,000 capital lease payable, $77,202,000 deferred revenue, $1,533,000 deferred executive compensation, and $39,164,000 in total stockholders' deficit. On Aug. 7, 2008, the Company reiterated its financial guidance for fiscal year 2008, estimating cash used in operations of $41,000,000 to $44,000,000 and a net loss of $81,000,000 to $84,000,000 for the year. Cash used in operations for the second half of 2008 is projected to be $10,000,000 to $12,000,000, reflecting the favorable impact of expected milestone payments, totaling $30,000,000, from Merck related to enrollment of the first patient in each of three Phase 2 clinical trials of deforolimus in several different cancers. In July and August 2008, the Company announced the start of two of these three trials. "Our results through June 30, 2008 are on track with our plans for the year, and our financial guidance for fiscal year 2008 remains unchanged," said Edward M. Fitzgerald, senior vice president and chief financial officer of ARIAD, in a press release dated Aug. 7. "In the second quarter of 2008, we made important progress in expanding and advancing our clinical programs, and we are executing well in all areas of our business," stated Harvey J. Berger, M.D., chairman and chief executive officer of ARIAD, in a press release dated Aug. 7, 2008. "Our partnership with Merck & Co., Inc. for the global development of our investigational mTOR inhibitor, deforolimus, is strong and productive, and we remain focused on delivering results consistent with our key corporate objectives for the year. Financially, our cash used in operations for the first six months of 2008 is in line with where we planned to be at this time in the year." Progress in the Clinic In a press release dated Aug. 7, ARIAD disclosed that it continued to make solid progress in its development programs, including: * Expansion of clinical sites for the Phase 3 SUCCEED trial of oral deforolimus in patients with metastatic sarcomas. Sites in Europe, Asia and Latin America, as well as the United States, are now enrolling patients. The Company also launched a website, http://www.SUCCEEDtrial.com,to build further awareness of the trial and provide information regarding patient enrollment. * Preparation for the initiation of three Phase 2 clinical trials expected to begin this year to examine the efficacy and safety of oral deforolimus in patients with several different cancers. The first two trials are now underway in patients with metastatic breast cancer and advanced endometrial cancer. The third trial in patients with prostate cancer is expected to begin enrollment later this year. * Initiation of three Phase 1 trials of deforolimus: oral deforolimus in combination with Merck's IGF-1R inhibitor, oral deforolimus as a single agent in Japan, and intravenous deforolimus as a single agent in pediatric solid tumors, sponsored by the Pediatric Cancer Foundation. * Initiation of a Phase 1 study of ARIAD's investigational oral multi-targeted kinase inhibitor, AP24534, in refractory hematologic cancers. Patient enrollment is underway, and early clinical data on this product candidate could be available as soon as the end of 2008. * Presentation of data from ARIAD's dose-ranging study of oral deforolimus at the American Society of Clinical Oncology meeting in May 2008. These data provided the rationale for selection of the oral dose and administration schedule that are now being used in the ongoing Phase 3 SUCCEED trial and other trials of oral deforolimus. ARIAD will continue executing on these important clinical programs for the remainder of the year, driving toward potential presentation of initial data in 2009. Changes in Senior Management Team On Aug. 7, the company disclosed changes to its senior management team: * Commercial Operations: Richard W. Pascoe has resigned his position as senior vice president and chief operating officer of ARIAD, effective as of August 8, 2008. Mr. Pascoe has accepted the position of chief executive officer of a specialty pharmaceutical company focused on psychiatric and neurological diseases. * ARIAD announced the promotion of Matthew E. Ros, currently vice president, oncology marketing of ARIAD, to the newly created position of vice president, commercial operations. Mr. Ros has an outstanding track record in the pharmaceutical industry with nearly 20 years of experience in sales, marketing and operations management for oncology products. Prior to joining ARIAD in 2007, Mr. Ros held a series of senior management positions at Bristol- Myers Squibb Company (BMS), most recently as senior director and U.S. commercial lead. He played a key role in the launch and commercialization of several of BMS's most recent oncology products. * Corporate Communications and Investor Relations: ARIAD also announced the appointment of Maria E. Cantor to the newly created position of vice president, corporate communications and investor relations. Ms. Cantor, who most recently was a senior director of corporate communications at Genzyme Corporation, will lead the Company's communications function and be responsible for the design and implementation of all communications and investor- relations strategies. Ms. Cantor brings nearly 20 years of communications expertise to ARIAD, the past seven of which she spent in roles of increasing responsibility at Genzyme. Most recently, she led communications initiatives for Genzyme's oncology, multiple sclerosis, genetic testing and orthopedics business units. During her tenure at Genzyme, she also was responsible for leading key branding initiatives, as well as enhancing Genzyme's corporate image and internal communications programs. Ms. Cantor received her M.S. degree in Communications Management from Syracuse University and her B.S. degree from Emerson College. "This is an exciting time for ARIAD, and we are delighted to recognize the proven leadership qualities demonstrated by Matt Ros during his tenure at ARIAD. I am proud of the caliber of the talent on our management team and the results that we have achieved over the past several years," said Dr. Berger. "Matt has a solid track record of delivering positive results for the oncology franchises he has championed. With his leadership, we are well positioned to extend the growth of our oncology portfolio. We wish Rich continued success as he pursues the next phase of his career." "We are delighted to have Maria join us to lead our communications programs," said Mr. Fitzgerald. "With her experience in driving key initiatives for a major biotechnology company like Genzyme, we are confident of the impact that she will have in developing strategies and programs for enhancing communications with all stakeholders of ARIAD." Upcoming Medical Meeting ARIAD will be presenting data on deforolimus and AP24534 at the upcoming EORTC-NCI-AACR (ENA) scientific meeting in Geneva, Switzerland, October 21 to 24, 2008. This will be the first time that preclinical data will be presented showing anti-tumor activity for AP24534 in models of solid tumors. Clinical and preclinical data on oral deforolimus will also be presented. Upcoming Investor Meetings ARIAD management will be making corporate presentations at Lazard Capital Markets Annual Life Sciences Conference in New York, which will be held from November 18 to 19, 2008. About ARIAD Pharmaceuticals Headquartered in Cambridge, Mass., ARIAD Pharmaceuticals Inc. (Nasdaq: ARIA) -- http://www.ariad.com/-- is engaged in the discovery and development of breakthrough medicines to treat cancer by regulating cell signaling with small molecules. ARIAD has a global partnership with Merck & Co. Inc. to develop and commercialize deforolimus, ARIAD's lead cancer product candidate, which is in Phase 3 clinical development. At June 30, 2008, the company's consolidated balance sheet showed $82,006,000 in total assets and $30,074,000 in total current liabilities, $12,250,000 long-term debt, $111,000 capital lease payable, $77,202,000 deferred revenue, $1,533,000 deferred executive compensation, and $39,164,000 in total stockholders' deficit. ARIAD PHARMACEUTICALS: Board Okays ARIAD Gene Therapeutics Merger ----------------------------------------------------------------- Edward M. Fitzgerald, senior vice president and chief financial officer of ARIAD Pharmaceuticals, Inc., disclosed in a regulatory filing with the Securities and Exchange Commission dated Sept. 17, 2008, that the independent and disinterested members of the Board of Directors of ARIAD have been evaluating a variety of potential strategic alternatives with respect to acquiring the 20% minority interest of ARIAD's 80%-owned subsidiary, ARIAD Gene Therapeutics, Inc. The Independent Directors include all members of the Board of Directors of ARIAD other than Harvey J. Berger, M.D., ARIAD's Chairman and Chief Executive Officer, and Jay R. LaMarche, a member of the ARIAD Board, each of whom are stockholders of AGTI. On September 11, 2008, ARIAD's Board approved, and ARIAD and AGTI entered into, an agreement and plan of merger pursuant to which AGTI has been merged with and into ARIAD. As stockholders of AGTI, Dr. Berger and Mr. LaMarche, abstained from the vote. A full-text copy of the Agreement and Plan of Merger is available for free at http://researcharchives.com/t/s?329e Pursuant to the Merger Agreement, each of the 1,126,064 outstanding shares of AGTI common stock owned by AGTI's minority stockholders has been converted into the right to receive two shares of ARIAD common stock. This exchange ratio was determined by the Independent Directors based on analyses received from an investment banking firm retained by the Independent Directors. In accordance with the provisions of section 262 of the Delaware General Corporation Law, any of the AGTI minority stockholders who properly demand appraisal of their AGTI shares will be entitled to seek a judicial determination of the fair value of such shares. If none of the AGTI minority stockholders exercise such appraisal rights, a total of 2,252,128 shares of ARIAD common stock will be issued, representing approximately 3.1 percent of the outstanding common stock of ARIAD following the transaction. Dr. Berger owns 178,571 shares of AGTI common stock, or 3.2% of the outstanding AGTI shares, and Mr. LaMarche owns 85,285 shares of AGTI common stock, or 1.5% of the outstanding AGTI shares. In addition, John D. Iuliucci, Ph.D., ARIAD's Senior Vice President, Chief Development Officer, owns 35,714 shares of AGTI common stock, or 0.6% of the outstanding AGTI shares, and David L. Berstein, ARIAD's Senior Vice President, Chief Intellectual Property Officer, owns 14,285 shares of AGTI common stock, or 0.3% of the outstanding AGTI shares. The shares of ARIAD common stock to be issued in the merger will not be registered under the Securities Act of 1933, as amended, and will be issued in reliance on the exemption from registration provided by Section 4(2) of the Securities Act (and the regulations promulgated thereunder, including Regulation D) relating to sales by an issuer not involving a public offering. "In order to create additional value for our stockholders, the independent and disinterested members of the ARIAD Board undertook, with the assistance of an investment banking firm, an extensive evaluation of strategic alternatives with respect to acquiring the 20 percent minority interest of AGTI that ARIAD did not own," stated Sandford D. Smith, vice chairman of the ARIAD Board, in a press release dated Sept. 12. "Based on our evaluation, we believe that this is an appropriate time to combine the companies and that this agreement is in the best interests of all parties." "Upon the consummation of this merger, ARIAD is poised to realize all of the potential future economic benefit from deforolimus and other assets previously owned by AGTI," stated Dr. Berger. Information Statement In connection with the merger, an information statement dated September 22, 2008 has been mailed to the minority stockholders of AGTI. A full-text copy of the Information Statement is available for free at http://researcharchives.com/t/s?329b It provides detailed information regarding specific actions AGTI stockholders will need to take to exchange their AGTI shares for ARIAD common stock. Any holders of AGTI common stock who properly demand appraisal of their shares will be entitled to seek a judicial determination of the fair value of those shares in accordance with the provisions of the Delaware General Corporation Law. About ARIAD Pharmaceuticals Headquartered in Cambridge, Mass., ARIAD Pharmaceuticals Inc. (Nasdaq: ARIA) -- http://www.ariad.com/-- is engaged in the discovery and development of breakthrough medicines to treat cancer by regulating cell signaling with small molecules. ARIAD has a global partnership with Merck & Co. Inc. to develop and commercialize deforolimus, ARIAD's lead cancer product candidate, which is in Phase 3 clinical development. At June 30, 2008, the company's consolidated balance sheet showed $82,006,000 in total assets and $30,074,000 in total current liabilities, $12,250,000 long-term debt, $111,000 capital lease payable, $77,202,000 deferred revenue, $1,533,000 deferred executive compensation, and $39,164,000 in total stockholders' deficit. ARIAD PHARMACEUTICALS: Names Laurie Allen as AGTI President ----------------------------------------------------------- On Sept. 11, 2008, ARIAD Pharmaceuticals, Inc.'s Board of Directors approved an agreement and plan of merger with ARIAD's 80%-owned subsidiary, ARIAD Gene Therapeutics, Inc. Immediately prior to the merger, ARIAD appointed Laurie A. Allen, Esq., ARIAD's senior vice president, chief legal officer and secretary, as the sole director and the president and secretary of AGTI. In connection with her service to AGTI, on Sept. 11, 2008, ARIAD amended Ms. Allen's employment agreement and AGTI entered into a compensation arrangement and a post-employment consulting agreement with Ms. Allen. (1) Amendment to Employment Agreement Ms. Allen's employment agreement with ARIAD, dated March 4, 2002, as amended, was further amended to: (i) modify the provisions concerning termination for disability, (ii) revise the definition of "cause" and require approval of any termination for "cause" by two-thirds of the ARIAD Board, (iii) modify the provisions regarding disclosure of confidential information, and (iv) remove the provisions concerning non-competition and non-solicitation. (2) Guarantee AGTI entered into a Guarantee with Ms. Allen pursuant to which it agreed to perform all of the obligations of ARIAD under Ms. Allen's employment agreement to the extent not performed by ARIAD. AGTI also agreed that, during Ms. Allen's employment with ARIAD, Ms. Allen will receive: (i) a base salary at a rate no less than she currently receives, which rate shall be increased annually by the average percentage increase received by ARIAD's executive officers, (ii) an annual bonus equal to at least 30% of her base salary, and (iii) health and dental benefits no less favorable than she currently receives, along with any improvements made available to ARIAD's other senior executives. In addition, the agreement provides that, following a termination of her employment, Ms. Allen will receive: (i) continued health and dental coverage for two years, and (ii) a payment equal to two times the Black-Scholes value of any forfeited unvested options. The agreement also provides that ARIAD will pay any legal expenses that she may incur in connection with enforcing her employment agreement or any other agreement with the company. The agreement was assumed by ARIAD in connection with the merger. (3) Consulting Agreement AGTI entered into a Consulting Agreement with Ms. Allen, commencing upon the termination of her employment for any reason with AGTI or any successor of AGTI. Pursuant to the terms of the agreement, Ms. Allen will be paid a per diem rate of 1/261st of the aggregate base salary and bonus she received in the prior 12 month period. The agreement has a term of five years and may be terminated by the company in the event of death or for cause. The agreement was assumed by ARIAD in connection with the merger. The ARIAD Board also authorized the entry by ARIAD into an indemnity agreement with Ms. Allen that updates the provisions of ARIAD's existing indemnification agreement with Ms. Allen. Pursuant to the terms of the new indemnity agreement, ARIAD will indemnify, hold harmless and exonerate Ms. Allen in connection with any Proceeding to which she was, is or is threatened to be made a party, subject to specified exclusions. The agreement also provides for indemnification of all expenses actually and reasonably incurred in connection with such proceedings, as well as the right to advancement of expenses. The agreement continues in effect during the period Ms. Allen serves as an officer or director of ARIAD, or any other enterprise for which she serves at the request of ARIAD, and continues thereafter for so long as she may be subject to a proceeding. On Sept. 11, 2008, Ms. Allen also entered into an indemnity agreement with AGTI in connection with her service to AGTI. This agreement was assumed by ARIAD in connection with the merger. The terms of the indemnity agreement by and between AGTI and Ms. Allen are exactly the same as the terms set forth with respect to the indemnity agreement by and between ARIAD and Ms. Allen. About ARIAD Pharmaceuticals Headquartered in Cambridge, Mass., ARIAD Pharmaceuticals Inc. (Nasdaq: ARIA) -- http://www.ariad.com/-- is engaged in the discovery and development of breakthrough medicines to treat cancer by regulating cell signaling with small molecules. ARIAD has a global partnership with Merck & Co. Inc. to develop and commercialize deforolimus, ARIAD's lead cancer product candidate, which is in Phase 3 clinical development. At June 30, 2008, the company's consolidated balance sheet showed $82,006,000 in total assets and $30,074,000 in total current liabilities, $12,250,000 long-term debt, $111,000 capital lease payable, $77,202,000 deferred revenue, $1,533,000 deferred executive compensation, and $39,164,000 in total stockholders' deficit. ARIAD PHARMACEUTICALS: Court Grants Amgen Summary Judgment Motion ----------------------------------------------------------------- ARIAD Pharmaceuticals, Inc., disclosed in a regulatory filing with the Securities and Exchange Commission on Sept. 22, 2008, that the United States District Court for the District of Delaware granted Amgen Inc.'s motion for summary judgment of non-infringement of seven claims of U.S. Patent No. 6,410,516 based on activities related to Enbrel(R) (etanercept). The court found that administration of Enbrel falls outside the scope of the asserted claims based on the court's interpretation of these claims to exclude extracellular methods of reducing NF-KB activity. "We are disappointed by these rulings on claim construction and non-infringement, and plan to pursue the appropriate legal action to obtain review of the rulings," said Harvey J. Berger, M.D., chairman and chief executive officer of ARIAD. The '516 Patent, issued in 2002, is based on the pioneering discoveries made by research groups led by Professors David Baltimore, Phillip Sharp and Tom Maniatis at the Massachusetts Institute of Technology, The Whitehead Institute for Biomedical Research, and Harvard University. ARIAD is the exclusive licensee of the technology and patents. Background In its Annual Report filed March 17, 2008, ARIAD disclosed the details of the litigation: "On April 20, 2006, Amgen Inc. and certain affiliated entities filed a lawsuit against the Company in the U.S. District Court for the District of Delaware seeking a declaratory judgment that each of the claims contained in the '516 Patent are invalid and that Amgen has not infringed any of the claims of the '516 Patent based on activities related to Amgen's products, Enbrel (R) and Kineret (R). On April 13, 2007, the Company, together with the institutional patentees, filed a counterclaim against Amgen, and joining Wyeth Corp. (“Wyeth”) in the action. The counterclaim against Amgen and Wyeth alleged infringement of the '516 Patent based on activities related to Enbrel and Kineret, as well as the Company's answer to Amgen's complaint, counter-claim and demand for jury trial. Amgen and Wyeth each filed a reply to the counterclaim, asserting that the '516 Patent is invalid and that it is unenforceable due to alleged inequitable conduct before the U.S. Patent and Trademark Office. "The Company has agreed to dismiss its claims of infringement of the '516 Patent against Wyeth pending final resolution, including appeals or settlement, of the litigation against Amgen. Accordingly, a stipulated dismissal, without prejudice, was entered by the Delaware Court on December 12, 2007. If the Company prevails in its litigation against Amgen, the stipulated dismissal provides, among other things that the Company may renew its claims of infringement against Wyeth in the Delaware Court within 30 days after the Final Resolution. Wyeth has agreed not to contest the validity or enforceability of the '516 Patent or that the use of Enbrel by a patient amounts to direct infringement of the '516 Patent in a Renewed Action. "On January 31, 2008, the Delaware Court granted Amgen's motion filed on December 11, 2007, requesting leave to amend and supplement Amgen's reply and to plead additional facts in support of Amgen's counterclaim for inequitable conduct. On February 8, 2008, the Company filed a motion to amend and clarify that the Company's counterclaim encompasses claims for infringement relating to Amgen's activities in supplying Enbrel for sales in markets outside the United States and to amend its counterclaim to reflect that the Company has dismissed without prejudice its counterclaims against Wyeth, that the Company is no longer asserting counterclaims for infringement with respect to Kineret, and that the Company has withdrawn its claims against Amgen for infringement of the '090 and '374 patents. Such amendments to the Company's counterclaim serve to focus the claims asserted by the Company against Amgen to be tried before the jury in the 9-day trial in this case on the Company's claim that Amgen infringes the '516 Patent based on activities relating to Enbrel." In its latest Form 10-Q filed Aug. 11, the company provided an update of the litigation: "On May 29, 2008, the Delaware Court denied in part a motion filed by the Company and its co-defendants seeking to, among other things, clarify that the counterclaim filed by them encompasses claims for infringement relating to Amgen's ex-US activities. "On April 25, 2008, the Company and its co-defendants provided Amgen a partial covenant not to sue covering Kineret and Enbrel. With respect to Kineret, the Covenant covers all claims of the '516 Patent, as well as any claim of the '516 Patent that may reissue from the reexamination. With respect to Enbrel, the Covenant covers all claims of the '516 Patent, other than the seven (7) claims currently being asserted against Enbrel and claims of the '516 Patent that may issue from the reexamination in a form that is either substantially identical to the seven (7) claims currently being asserted or not substantially identical to a claim of the '516 Patent that issued on June 25, 2002. The Covenant does not abridge the Company's rights to institute an action against Wyeth upon final resolution of the Amgen litigation. "On April 25, 2008, the Company and its co-defendants, filed a motion seeking to dismiss for lack of jurisdiction under the Declaratory Judgment Act Amgen's challenges to the validity and enforceability of claims of the '516 Patent that are not being asserted against Enbrel. Also on April 25, 2008, the Company and its co-defendants filed (i) their opening brief on claim construction, (ii) a motion for partial summary judgment with respect to Amgen's inequitable conduct defense, arguing, among other things, that certain of Amgen's factual allegations in support of that defense are moot in light of the Company's disclosures to the U.S. Patent and Trademark Office, and (iii) motions seeking to preclude trial testimony from certain of Amgen's expert witnesses. The amendments to their counterclaim, the Covenant and the motions for partial dismissal and summary judgment serve to focus the claims asserted by the Company and its co-defendants against Amgen to be tried before the jury in the nine-day trial in this case on their claim that Amgen infringes the '516 Patent based on activities relating to Enbrel. Amgen's opposition to these motions was filed on May 22, 2008. "On April 25, 2008, Amgen filed its opening brief on claim construction, as well as three motions for summary judgment, arguing that (i) Enbrel does not infringe the '516 Patent, (ii) the '516 Patent is invalid, and (iii) Amgen's infringement of the '516 Patent, if it exists, is not willful. Also on April 25, 2008, Amgen filed several motions seeking to preclude trial testimony from certain of the Company's expert witnesses. The opposition of the Company and its co- defendants to Amgen's motions was filed on May 22, 2008. An amended scheduling order for this action has been issued by the Delaware Court. The claim construction hearing was held and arguments on the pending dispositive motions were heard on June 19, 2008. A pretrial conference is scheduled for October 15, 2008. Trial is scheduled to commence on November 3, 2008." About ARIAD Pharmaceuticals Headquartered in Cambridge, Mass., ARIAD Pharmaceuticals Inc. (Nasdaq: ARIA) -- http://www.ariad.com/-- is engaged in the discovery and development of breakthrough medicines to treat cancer by regulating cell signaling with small molecules. ARIAD has a global partnership with Merck & Co. Inc. to develop and commercialize deforolimus, ARIAD's lead cancer product candidate, which is in Phase 3 clinical development. At June 30, 2008, the company's consolidated balance sheet showed $82,006,000 in total assets and $30,074,000 in total current liabilities, $12,250,000 long-term debt, $111,000 capital lease payable, $77,202,000 deferred revenue, $1,533,000 deferred executive compensation, and $39,164,000 in total stockholders' deficit. ARIGATO JAPANESE: Case Summary & Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Arigato Japanese Steak House, Inc. 3600 - 66th St. N. Saint Petersburg, FL 33710 Bankruptcy Case No.: 08-14679 Type of Business: The Debtor operates Japanese restaurants. See: http://www.dinearigato.com/ Chapter 11 Petition Date: September 24, 2008 Court: Middle District of Florida (Tampa) Debtor's Counsel: Buddy D. Ford, Esq. Buddy@tampaesq.com Buddy D. Ford PA 115 N. MacDill Avenue Tampa, FL 33609-1521 Tel: (813) 877-4669 Fax: (813) 877-5543 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/flmb08-14679.pdf ASARCO LLC: Files Second Amended Joint Plan of Reorganization ------------------------------------------------------------- ASARCO LLC and its debtor-affiliates delivered to the U.S. Bankruptcy Court for the Southern District of Texas draft copies of their Second Amended Joint Plan of Reorganization and a Disclosure Statement explaining that Plan on Sept. 22, 2008. The Debtors' proposed Second Amended Plan provides, among others, that sources of payments to be made to Claimants pursuant to the Plan include: * the Debtors' cash, which could total as much as $1.4 billion to $1.5 billion; and * the Available Plan Proceeds, which are expected to total $2.5 billion, assuming a $90 million Adjustment Payment Reserve, and a $10 million Unpaid Cure Claims Reserve. Any amounts remaining in the Unpaid Cure Claims Reserve after the application of the reserve pursuant to the Plan will be applied to satisfy any remaining obligations of ASARCO under the Plan Sponsor Purchase Sale Agreement after the application of the Adjustment Payment Reserve pursuant to the Plan. The proposed Second Amended Plan also includes the employee benefit plan fiduciaries who are directors or employees of a Debtor, and the Indenture Trustees Wilmington Trust Company, Deutsche Bank Trust Company Americas, and Wells Fargo Bank, National Association, under several prepetition Indentures pursuant to which ASARCO issued debentures and notes. The proposed Second Amended Plan also provides that the El Paso and Amarillo, Texas sites will be transferred to a separate Environmental Custodial Trust to be funded in the total amount of $52,080,000. The Debtors will file, after the Effective Date, the Texas Environmental Custodial Trust Agreement, together with any related settlement agreement, which will address the remaining obligations with respect to the El Paso site. Under the proposed Second Amended Plan, the Indenture Trustees will be entitled to receive, on the Effective Date, cash in an amount equal to the Indenture Trustee Fee Claims. The proposed Second Amended Plan also incorporates ASM Capital L.P. and Contrarian Funds, L.L.C.'s statements regarding the Debtors' Plan. ASM and Contrarian holds approximately $8 million in Trade Claims against the Debtors. Interests in ASARCO LLC will be canceled under the proposed Second Amended Plan. However, the draft amended plan proposes that if the holder of the Interest votes to accept the Plan and elects to enter into a plan settlement, the holder will receive the settlement benefits under the plan settlement in release of their Interests in ASARCO. If the holder of the Interests either (1) votes to accept the Plan but declines to enter into the Plan Settlement or (2) votes to reject the Plan, the holder will receive any Available Plan Funds after the Class 11 Subordinated Claims have been paid in full. A copy of the Debtors' draft of the Second Amended Plan of Reorganization is available for free at: http://bankrupt.com/misc/2ndamendeddebtorsplan.pdf About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for Chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). The Debtors submitted to the Court a joint plan of reorganization and disclosure statement on July 31, 2008. The plan incorporates the sale of substantially all of the Debtors' assets to Sterlite Industries, Ltd., for $2,600,000,000. Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, submitted a reorganization plan to retain its equity interest in ASARCO LLC, by offering full payment to ASARCO's creditors in connection with ASARCO's Chapter 11 case. AMC would provide up to $2.7 billion in cash as well as a $440 million guarantee to assure payment of all allowed creditor claims, including payment of liabilities relating to asbestos and environmental claims. AMC's plan is premised on the estimation of the approximate allowed amount of the claims against ASARCO. Asarco Inc. and AMC are represented by Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York. (ASARCO Bankruptcy News Issue No. 85; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Parent Files 1st Amended Plan & Disclosure Statement ---------------------------------------------------------------- Asarco Incorporated and Americas Mining Corporation delivered to the U.S. Bankruptcy Court for the Southern District of Texas a First Amended Plan of Reorganization for Debtors ASARCO LLC, Southern Peru Holdings LLC, AR Sacaton LLC, and ASARCO Master Inc., and a disclosure statement explaining that Plan on Sept. 20, 2008. The Parent's First Amended Plan addresses the objections to the Parent's Disclosure Statement. For one, the First Amended Plan maintains that the Plan would result in distributions, in Cash, to all creditors who already have Allowed Claims, including creditors holding environmental claims, on the Effective Date. As to the remaining non-asbestos and non-environmental claims that have not yet been Allowed, the Parent asserts that the timing of the Allowance of those claims is substantially in the control of the Reorganizing Debtors and not the Plan Sponsors, at least prior to the Effective Date of the Plan. As to Asbestos Personal Injury Claims and Miscellaneous Environmental Claims that have not yet been Allowed, the Parent intends to require the Holders of those Claims to prove their entitlement to recoveries. To that end, the Parent has filed a motion, known as the Megaclaims Motion, seeking to have the Court determine the maximum amount of Asbestos Personal Injury Claims well as Unresolved Environmental Claims for purposes of distributions under the Plan and the Debtors' Plan of Reorganization. The Megaclaims Motion, according to the Parent, will enable the Court to liquidate the relevant claims efficiently and will enable the claims determination process with respect to Class 5 and Class 8 Claims to proceed on a parallel track with the plan confirmation process such that distributions to creditors could be made on or close to the Effective Date. If the Court approves the Megaclaims Motion, the Parent says it intends, with respect to Class 8 Miscellaneous Claims, for the Court's estimation to serve as the sole claims liquidation process for those Claims, unless the Court determines that the Claims must be liquidated in another forum to be unimpaired. The Parent's First Amended Plan also provides that following the implementation of the Plan, the Reorganized Debtors will remain liable for Reinstated Environmental Claims, any Reinstated Secured Claims, any Reinstated Bondholder Claims, Demands if the Section 524(g) Treatment does not go into effect. The Amended Plan contemplates for these classes of claims to be paid in full or reinstated on the Effective Date: * Class 2 Secured Claims * Class 4 Bondholders' Claims * Class 5 Asbestos PI Claims and Demands * Class 9 Reinstated Environmental Claims Jorge Lazale Psihas, Asarco Inc.'s vice president and counsel, says, based on financial information received from the Debtors, Reorganized ASARCO is expected to generate free cash of approximately $273 million in 2009, and cumulative free cash of approximately $1.6 billion by 2012. Even discounting the Debtors' projections by 20%, Mr. Psihas believes that Reorganized ASARCO will generate free cash of at least $218 million in 2009, and cumulative free cash of at least $1.2 billion by 2012. Together with any surplus funds in the Disputed Claims Reserve remaining after other Claims are paid in full, the Plan Sponsors are confident there will be sufficient cash to address all Reinstated Obligations in the ordinary course of business, even without resort to the AMC Guaranty. Following the implementation of the Plan, the Reorganized Debtors will also remain liable for all of their Plan Obligations to the extent the Plan Sponsor Contribution, the Distributable Cash, and any other form of consideration held in the Disputed Claims Reserve together are insufficient to satisfy all Plan Obligations, and the AMC Guaranty will provide addition recourse to satisfy those Plan Obligations. Therefore, all holders of Allowed Claims will have the right to look to Reorganized ASARCO for payment of their Allowed Claims, and will have additional recourse to the AMC Guaranty. Indemnification by Section 524(g) and Asbestos Claims Trusts The Parent's First Amended Plan provides that the Section 524(g) Trust and the Asbestos Claims Trust will indemnify, defend and hold harmless each of the ASARCO Protected Parties from any and all liabilities associated with an Asbestos Personal Injury Claim or Demand that a third party seeks to impose upon any of the ASARCO Protected Parties, or that are imposed upon any of the ASARCO Protected Parties. In the event that the Section 524(g) Trust or the Asbestos Claims Trust makes a payment to any of the ASARCO Protected Parties, and the liability on account of which payment was made is subsequently diminished, either directly or through a third-party recovery, the applicable ASARCO Protected Party will promptly repay the Section 524(g) Trust the amount by which the payment made by the Section 524(g) Trust exceeds the actual cost of the indemnified liability. Mr. Psihas clarifies that while funds sufficient to fund the Section 524(g) Trust will be transferred to the Plan Administrator on the Effective Date, those funds will not be transferred to the Section 524(g) Trust until the time as there is a Final Order determining the amount of consideration necessary to fund the Section 524(g) Trust. Treatment of Claims under 1st Amended Parent Plan The Parent's First Amended Plan incorporates the Debtors' estimated aggregate amount of claims provided under the Debtors' First Amended Plan of Reorganization filed September 12, 2008. The Parent's First Amended Plan retains the Full-Payment provision. Any holder of an Asbestos PI Claim with a Lien against any property of the Reorganizing Debtors other than proceeds of an Asbestos Insurance Policy will retain the Lien securing that Claim, subject to the Section 542(g) Trust Agreement. If the Section 524(g) Treatment goes into effect, Asbestos PI Claims, which are secured by Liens against proceeds of an Asbestos Insurance Policy will be included in the treatment accorded Class 5 Asbestos PI Claims, and will be determined, processed, liquidated, and paid pursuant to the terms and conditions of the Section 524(g) Trust Distribution Protocol and the Section 524(g) Trust Agreement. The Section 524(g) Trust may assert any rights and objections that the Reorganizing Debtors have against those Claims, which rights, defenses, and objections are transferred to the Section 524(g) Trust. Labor Union Bargaining Mr. Psihas tells the Court that the Parent and the United Steelworkers have, at various dates in early 2008, exchanged proposals for a collective bargaining agreement and met. The Parent, he says, offered to accept and assume all terms of the New CBA with what it considers some limited non-economic modifications and what the USW informs the Parent that it regards as significant non-economic modifications. However, the proposal was not accepted by the USW. The bargaining between the USW and the Parent is currently the subject of unfair labor practice charges that have been filed against the USW and are pending before the NLRB, alleging, among other things, that the USW bargained in bad faith by insisting as a condition of agreement that the Parent agree to illegal and permissive subjects of bargaining and thus engaged in bad faith bargaining within the meaning of the labor laws. Neither the Parent nor the USW has requested a bargaining session with each other since the Plan Sponsor Selection Meeting in Dallas on May 22 and 23, 2008. Mr. Psihas says the Parent remains willing to attempt to negotiate, in good faith, an acceptable collective bargaining agreement with the USW and other labor unions, but may also pursue its legal remedies including before the Court as part of the Confirmation Hearing to address the special successorship provision. A blacklined copy of the Parent's First Amended Plan and accompanying Disclosure Statement is available for free at: http://bankrupt.com/misc/1stamendedparentplan&ds.pdf About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for Chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). The Debtors submitted to the Court a joint plan of reorganization and disclosure statement on July 31, 2008. The plan incorporates the sale of substantially all of the Debtors' assets to Sterlite Industries, Ltd., for $2,600,000,000. Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, submitted a reorganization plan to retain its equity interest in ASARCO LLC, by offering full payment to ASARCO's creditors in connection with ASARCO's Chapter 11 case. AMC would provide up to $2.7 billion in cash as well as a $440 million guarantee to assure payment of all allowed creditor claims, including payment of liabilities relating to asbestos and environmental claims. AMC's plan is premised on the estimation of the approximate allowed amount of the claims against ASARCO. Asarco Inc. and AMC are represented by Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York. (ASARCO Bankruptcy News Issue No. 85; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Plan Voting Begins; Confirmation Hearing on Nov. 17 --------------------------------------------------------------- Judge Richard Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas has tentatively approved the disclosure statements explaining both the competing Plans of Reorganization filed by ASARCO LLC and its debtor affiliates and by ASARCO's parent, Americas Mining Corporation. Judge Schmidt convened a hearing on Sept. 23, 2008, to determine whether the Disclosure Statements contain "adequate information" as required by Section 1125 of the Bankruptcy Code. AMC has said in a Court filing that it is not seeking to use its Disclosure Statement for the solicitation of votes in the traditional sense since its Full-Payment Plan leaves creditors unimpaired. However, during the September 23 hearing, Judge Schmidt ruled that AMC must let creditors vote on reorganization proposals as the parent seeks to regain control of ASARCO, Bloomberg News reported. "Everybody gets to vote," Judge Schmidt said during the hearing, Bloomberg said. "I have not ruled that your vote has any meaning, however." AMC's counsel, Luc Despins, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, in New York, told Bloomberg that no creditors has agreed to support the Parent's Plan. Judge Schmidt, according to Bloomberg, was surprised by the lack of creditor support for the Parent's Plan. "You'd wonder why [the creditors] wouldn't," Bloomberg quoted Judge Schmidt as saying during the hearing. "There must be something else involved." Creditors say it will take longer to be paid under the Parent's proposal and that ASARCO may walk away if a court finds the debts are too high, the report said. The ruling, according to a press release, dated September 23, 2008, and generated by ASARCO, is still subject to final approval of the forms of order for both Disclosure Statements. A Courtroom Minutes for the September 23 Hearing said approved disclosure statement orders will follow within 10 days. Plan Confirmation to Start on Nov. 17 The Plan Confirmation hearing will begin the week of November 17, 2008. ASARCO's proposed Disclosure Statement Order states that a judge from the U.S. District Court for the Southern District of New York may preside over the Confirmation Hearing along with Judge Schmidt. Creditors will receive a ballot to vote for or against one or both Plans, and, if voting in favor of both, to express a preference between the two Plans. If the Court finds that both Plans are confirmable, it must look at the expressed preferences of creditors and equity in determining which Plan to confirm. ASARCO CEO's Remarks "The plans are markedly different," Joseph F. Lapinsky, President and CEO of ASARCO LLC, said in the press release. "Our parents' proposal is a time-consuming litigation plan, as our major creditors have repeatedly stated. Ours, by contrast, is a comprehensive settlement plan." This global settlement, Mr. Lapinsky continued, culminated from three long years of negotiation, litigation and mediation by ASARCO and its major creditors. It was finally achieved under the guidance of a federal bankruptcy judge from Louisiana who was appointed as a mediator in the case. The federal government has described this as "the most complicated environmental bankruptcy in United States history," ASARCO said. As part of the global settlement under ASARCO's plan, the company will give $1.6 billion in cash plus interests in a litigation trust to federal and state governments to pay its fair share of environmental liability at more than 75 sites across the United States -- making the global settlement the largest environmental settlement in history, ASARCO added. "ASARCO's payments will infuse much-needed cash into federal and state coffers, allowing governments to clean up some of the largest sites on the Superfund National Priorities List," stated Mr. Lapinsky. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for Chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). The Debtors submitted to the Court a joint plan of reorganization and disclosure statement on July 31, 2008. The plan incorporates the sale of substantially all of the Debtors' assets to Sterlite Industries, Ltd., for $2,600,000,000. Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, submitted a reorganization plan to retain its equity interest in ASARCO LLC, by offering full payment to ASARCO's creditors in connection with ASARCO's Chapter 11 case. AMC would provide up to $2.7 billion in cash as well as a $440 million guarantee to assure payment of all allowed creditor claims, including payment of liabilities relating to asbestos and environmental claims. AMC's plan is premised on the estimation of the approximate allowed amount of the claims against ASARCO. Asarco Inc. and AMC are represented by Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York. (ASARCO Bankruptcy News Issue No. 85; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Various Parties Object to Disclosure Statement ---------------------------------------------------------- Deutsche Bank Securities Inc.; Plainfield Special Situations Master Fund Limited; Mitsui Co. (U.S.A.) Inc.; Wells Fargo Bank, National Association, Wilmington Trust Company, and Deutsche Bank Trust Company Americas as Indenture Trustees; Future Claims Representative; and the Official committee of Unsecured Creditors filed objections with the U.S. Bankruptcy Court for the Southern District of Texas to the Disclosure Statement explaining the Asarco LLC and its debtor affiliates' Joint Plan of Reorganization. (a) Deutsche Bank According to Deutshce Bank, a creditor of ASARCO LLC, ASARCO's Disclosure Statement should not be approved in its current form because it fails to provide sufficient factual disclosure to enable creditors to fully evaluate the Joint Plan as a result of the Debtors' exclusion of, among others, (i) an adequate discussion of the Debtors' financial performance during the bankruptcy cases, (ii) an estimate of the Debtors' potential recovery from pending litigation and pending and potential avoidance and preference actions, and (iii) an adequate discussion of Sterlite (USA), Inc.'s ability to consummate the underlying sales transaction. William L. Wallander, Esq., at Vinson & Elkins L.L.P. in Dallas, Texas, asserts that the voting procedures proposed in the Debtors' motion must be modified to comply with Section 1126(c) of the Bankruptcy Code and provide creditors holding multiple claims within a class a separate vote for each claim. (b) Plainfield Special Situations Plainfield Special, a holder of Trade and General Unsecured Claims, Bondholders' Claims, Toxic Tort Claims and Previously Settled Environmental Claims against the Debtors, tells the Court that ASARCO's Disclosure Statement should not be approved unless amended to disclose sufficient information concerning the payment of postpetition interest specifically whether the Plan will create a reserve for the interest and the mechanics of that reserve, with the Disclosure Statement providing a chart or other exhibit that illustrates more clearly the proceeds to be distributed under the Plan so that creditors can better determine the likelihood that they will receive payment in full including postpetition interest on account of their claims. Plainfield argues the approval of the Disclosure Statement because the plan does not provide for payment of postpetition interest at the contract rate, or the judgment rate. (c) Mitsui Mitsui, a creditor, opposes the Debtors' Disclosure Statement because it contains multiple incorrect statements that may prejudice Mitsui's interests. In order to protect its interests, Mitsui proposes alternate corrective language that would correct each error to make the Disclosure Statement more accurate and complete. (d) Indenture Trustees Wells Fargo Bank, National Association, Wilmington Trust Company, and Deutsche Bank Trust Company Americas as Indenture Trustees of the Debtors opposes the Debtors' Disclosure Statement, saying it must contain "adequate information" to be approved. The Indenture Trustees join in the Majority Bondholders' objection to the Debtors' Disclosure Statement. (e) FCR The Future Claims Representative, Robert Pate, says that he is not objecting to the Debtors' Disclosure Statement, as the issues raised by the FCR have been resolved, or left for resolution at confirmation. However, the FCR files his Statement in order to expressly reserve its rights to raise any and all issues and objections that the FCR may have to the confirmation of the Debtors' Plan. (f) Creditors' Committee The Official committee of Unsecured Creditors asks the Debtors to amend the their Disclosure Statement to provide "adequate information" pursuant to Section 1125 of the Bankruptcy Code. As a matter of concern regarding the Disclosure Statement, the Committee specifically points to (i) the appropriate rate of postpetition interest required under the Bankruptcy code, and (ii) the Debtors' outstanding dispute with multiple parties-in -interest. The Committee asks the Court to amend their Disclosure Statement to fully inform the creditors of the argument that their proposal to pay postpetition interest at the federal judgment rate is inconsistent with the legal requirements under the circumstances presented. As reported in today's Troubled Company Reporter, Judge Richard Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas has tentatively approved the disclosure statements explaining both the competing Plans of Reorganization filed by ASARCO LLC and its debtor affiliates and by ASARCO's parent, Americas Mining Corporation. Judge Schmidt convened a hearing on Sept. 23, 2008, to determine whether the Disclosure Statements contain "adequate information" as required by Section 1125 of the Bankruptcy Code. The plan documents have been sent out for creditor votes. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for Chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). The Debtors submitted to the Court a joint plan of reorganization and disclosure statement on July 31, 2008. The plan incorporates the sale of substantially all of the Debtors' assets to Sterlite Industries, Ltd., for $2,600,000,000. Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, submitted a reorganization plan to retain its equity interest in ASARCO LLC, by offering full payment to ASARCO's creditors in connection with ASARCO's Chapter 11 case. AMC would provide up to $2.7 billion in cash as well as a $440 million guarantee to assure payment of all allowed creditor claims, including payment of liabilities relating to asbestos and environmental claims. AMC's plan is premised on the estimation of the approximate allowed amount of the claims against ASARCO. Asarco Inc. and AMC are represented by Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York. (ASARCO Bankruptcy News Issue No. 85; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ATHEROGENICS INC: Cuts Workforce to 30 Employees ------------------------------------------------ AtheroGenics, Inc. disclosed in a Securities and Exchange Commission filing that on Sept. 19, 2008, it reduced its employee headcount by approximately 40% to a current staff of 30 employees. In addition, the Company has also eliminated approximately 20 open positions as a result of the downsizing. The Company is providing severance to employees affected by the workforce reduction, resulting in a one-time charge of approximately $400,000 related to the severance benefits, which will be paid in the third quarter of 2008. About AtheroGenics Based in Alpharetta, Georgia, AtheroGenics, Inc. -- http://www.atherogenics.com/-- is a research-based pharmaceutical company focused on the discovery, development and commercialization of drugs for the treatment of chronic inflammatory diseases, including diabetes and coronary heart disease. It has one late stage clinical drug development program. As of June 30, 2008, AtheroGenics, Inc. had $72.41 million in total assets, $294.57 million in total liabilities, resulting in $222.17 million in shareholders' deficit. The Troubled Company Reporter reported on Sept. 17, 2008, that noteholders filed on Sept. 15, 2008, a petition with the U.S. Bankruptcy Court for the Northern District of Georgia to place AtheroGenics in Chapter 7 bankruptcy. The petitioning noteholders are: -- AQR Absolute Return Master Account, L.P.; -- CNH CA Master Account, L.P.; -- Tamalpais Global Partner Master Fund, LTD; -- Tang Capital Partners, LP; and -- Zazove High Yield Convertible Securities Fund, L.P. The Company is reviewing the involuntary bankruptcy petition filed by the 2008 Noteholders and is evaluating its alternatives. The case is In Re AtheroGenics, Inc. (Case No. 08-78200) ATRIUM CORP: Extends 11-1/2% Notes Exchange Offer to Sept. 29 ------------------------------------------------------------ Atrium Corporation, ACIH Inc., a subsidiary of Atrium Corp, and Atrium Companies Inc. or the Issuer, a subsidiary of ACIH, are extending the private exchange offer and consent solicitation to exchange any and all of the 11-1/2% Senior Discount Notes due 2012 issued by ACIH in a private placement for new 15.0% senior subordinated notes due 2012 to be issued by the Issuer and warrants to purchase shares of Atrium Corp's Series C Preferred Stock convertible into 10.0% of Atrium Corp's common stock on a fully diluted basis at an exercise price of $0.01 per share, subject to adjustment. The CUSIP numbers of the Old Notes are 00087E AA3 and U0045R AA 2. The Exchange Offer was scheduled to expire at 5 p.m. New York City time on Sept. 23, 2008. The Exchange Offer is being extended until 5 p.m. New York City time on Sept. 29, 2008. As of 5 p.m. on Sept. 23, 2008, $167,785,000, or 97.38%, of the $174,000,000 Old Notes had been tendered. One of the conditions of the Exchange Offer is that holders of at least 97% of the total principal amount of outstanding Old Notes tender their Old Notes in the Exchange Offer. The terms and conditions of the Exchange Offer are set forth in the offering memorandum and consent solicitation statement, dated Aug. 22, 2008. The consummation of the Exchange Offer is conditioned upon the satisfaction or waiver of the conditions set forth in the Offering Memorandum. Copies of the Offering Memorandum and related Letter of Transmittal may be obtained from the information agent, Mackenzie Partners Inc., by calling (800)322-2885. Documents relating to the exchange offer and consent solicitation will only be distributed to eligible holders who complete and return a letter of eligibility confirming that they are within the category of eligible holders for this private offer. Holders who desire a copy of the eligibility letter may contact Mackenzie Partners Inc., the information agent for the exchange offer, at (800)322-2885. About Atrium Corporation Headquartered in Dallas, Texas, Atrium Corporation is a manufacturer and supplier of residential windows and doors in North America. The company has approximately 5,100 employees and 63 manufacturing facilities and distribution centers in 21 states, Canada and Mexico. Forbearance and Lockup Agreements As reported in the Troubled Company Reporter on July 24, 2008, Atrium Corporation and its key affiliates reached an agreement with each of their major creditor groups to restructure debt. Atrium also has entered into forbearance and lockup agreements with requisite majorities of the holders of each tranche of Atrium's funded indebtedness. BEAR STEARNS: Agrees on $28MM Settlement in Fraud Case ------------------------------------------------------ ABI World reports that The Bear Stearns Companies Inc. and its mortgage servicing unit agreed to pay $28 million to settle a lawsuit on its alleged fraud. According to ABI World, Bear Stearns was accused of deceiving subprime borrowers and engaging in abusive loan practices before the investment bank's collapse. About Bear Stearns New York City-based The Bear Stearns Companies Inc. (NYSE: BSC) -- http://www.bearstearns.com/-- is a leading financial services firm serving governments, corporations, institutions and individuals worldwide. The company's core business lines include institutional equities, fixed income, investment banking, global clearing services, asset management, and private client services. The company has approximately 14,000 employees worldwide. * * * As reported in the Troubled Company Reporter on Dec. 28, 2007, Fitch Ratings' affirmed its Negative Outlook for The Bear Stearns Companies Inc. following the announcement of the company's fiscal year earnings for 2007. On Nov. 14, 2007, Fitch affirmed Bear Stearns' long-term credit ratings, along with its subsidiaries. Fitch also downgraded the short-term rating to 'F1' from 'F1+', and Individual rating to 'B/C' from 'B'. BILL HEARD: Collapses, Closes Down 13 Stores -------------------------------------------- The Columbus (Georgia) Ledger-Enquirer reports that Bill Heard Enterprises Inc. will shut down its 13 stores on Sept. 26. The Orlando Business Journal relates that Bill Heard closed a store in Arizona earlier this month. According to Sharon Terlep at Dow Jones Newswires, Bill Heard is the highest profile dealership collapse in recent months. "Rising fuel prices, a product portfolio of mostly heavy trucks and sport utility vehicles, economic recession, unfavorable local market conditions for vehicle sales, the crisis in the banking and financing sectors, and other factors combined to create a business environment in which the company simply did not have the resources needed to continue to operate," Bill Heard said in a statement. Richard Mullins at The Tampa Tribune states that Derek Fowler, service department director at the Lott-Mather Buick Pontiac GMC dealership and a former public relations representative for Bill Heard, said that the company wasn't in good financial shape due to bad vehicle loans. "Once the loans started to fail the company was in big trouble. Even the General Motors financing arm pulled out of the deal. Once that happened it was all over," The Tampa Tribune quoted Mr. Fowler as saying. According to The Tampa Tribune, financial company General Motors Acceptance Corp. cut its financing of car loans at several Bill Heard dealership locations in August. Myfoxtampabay.com reports that vendor Ron Childs, who repairs automotive glass, said that Bill Heard was two months behind paying the bills and owes him at least a thousand dollars. Georgia investigators have accused Bill Heard of fraud for an advertisement it sent to clients saying, "Urgent Potential Recall Notification," Myfoxtampabay.com relates. The report states that the investors sought $50 million in fines for the ad. According to Jane Larson at The Arizona Republic, a General Motors Corp. official said that Bill Heard Chevrolet will reopen as a Chevrolet dealership under new ownership. GM spokesperson Susan Garontakos said that the company could find a buyer for Bill Heard and sales generally take from a month to a year. "It's in a good area, and the store has a lot of traffic. GM intends to keep it open," the report quoted Ms. Garontakos as saying. According to WSJ, Ms. Garontakos said that GM determines whether the stores remain viable sales locations and if they are, the auto maker will work to keep them open by consolidating them into other stores or finding a buyer. Headquartered in Columbus, Georgia, Bill Heard Enterprises, Inc. -- http://www.billheard.com-- is a chain of Chevrolet franchises. It has about 15 dealerships in Alabama, Arizona, Florida, Georgia, Nevada, Tennessee, and Texas. The dealer sells both new and used vehicles and auto supplies and offers repair services and financing. The company also sells used Cadillac and Saab vehicles at a dealership in Georgia. William Heard Sr. opened his first dealership in 1919. He switched to selling Chevrolets exclusively in 1932, and his son and grandsons, who now run the family-owned business, continue to focus on Chevy sales. Bill Heard employs about 3,500 people in six states. The company posted on its Web site that it sells around $2.5 billion per year, Kansas City Business Journal says. BOSQUE POWER: S&P Puts 'B+' Issue Rating Under Negative Watch ------------------------------------------------------------- Standard & Poor's Rating Services placed its 'B+' issue rating on Laguna Park, Texas-based Bosque Power Co. LLC's $412.5 million senior secured facilities on CreditWatch with negative implications. The action reflects uncertainty of physical call option hedge receipts following the downgrade of Lehman Brothers Commodity Services to BB-/Watch Dev/B and the downgrade of Lehman Brothers Holdings Inc. to 'D'. Lehman Brothers Commodity Services is the counterparty to the project's hedge of 230 MW (summer) and 250 MW (winter) of its 570 MW capacity. Under the January 2008 loan agreement, if LBCS fails to perform under the contract with material adverse consequences, then the project must enter into a substantially similar replacement hedge agreement within 90 days with another counterparty or guarantor, with certain minimum rating requirements ranging from 'BBB-' to 'A-'. Failure to do so would constitute an event of default, allowing a simple majority of lenders to accelerate all or a portion of outstanding loan principal. Capacity payment receipts from LBCS under the existing hedge are about $1.75 million per month. Standard & Poor's will continue to monitor the situation, focusing on the timeliness of payments from Lehman under the existing hedge and the risk that any replacement hedge might include less favorable terms for the project than those of the existing hedge. Confidence that the existing or replacement hedge agreement will maintain the project's current forecasts would likely result in a return to a stable outlook, while any adverse changes that significantly increase projected outstanding debt at loan maturity could result in a rating downgrade. BOWNETREE LLC: Wants to Employ Stephen Kass as Bankruptcy Counsel ----------------------------------------------------------------- Bownetree LLC asks authority from the U.S. Bankruptcy Court for the Eastern District of New York to employ Stephen B. Kass, P.C., as its counsel. The law firm will: (a) prepare records and reports as required by the Bankruptcy Rules, the Local Bankruptcy Rules and the U.S. Trustee's Regulations for bank deposits, in compliance with operating guidelines and financial reporting requirements as promulgated by the U.S. Trustee; (b) prepare applications and proposed orders to be submitted to the Court; (c) identify and prosecute claims, if any, and causes of action assertable by the debtor; (d) examine proofs of claims to be filed and possible prosecution of objections to certain of such claims; (e) advise Debtor and prepare a plan and disclosure statement; (f) advise the Debtor and preparing documents that may be required in connection with the possible liquidation of some of the Debtor's assets, including analysis and collection of outstanding receivables; (g) assist and advise the Debtor in performing any and all other functions as required pursuant to Section 704 of the Bankruptcy Code. The Debtor discloses that it proposes to employ the law firm under a general retainer based on time and its standard billable charges of $375 per hour for senior partners, $250 per hour for associates and $90 per hour for paralegals. A general retainer is necessary because of the extensive legal services required for this estate. Furthermore, the Debtor recounts that it has extended $15,000 to the firm, as of Sept. 9, 2008, plus $1,039 for the filing fee as a retainer for services performed and to be performed in this case. As of Sept. 9, 2008, senior partner Stephen B. Kass has spent a total of 3.5 hours at $375 per hour equaling $1,312 in fees; and associates spent a total of 2 hours at $250 per hour equaling $500 in fees and paralegals spent a total of 4 hours at $90 per hour equaling $360. Total of $2,172 in fees. The Debtor tells the Court that the firm has indicated its willingness to act on the Debtor's behalf and to be compensated according to the terms and conditions of the written retainer. To the best of the Debtor's knowledge, the firm, its partners, associates, paralegals, administrative staff, or of-counsels, do not have any connection with the Debtor, its creditors or any other party in interest, or their respective attorneys or accountants, and represents no interest adverse to the estate in any of the matters upon which it is to be retained. Headquartered in New York City, Bownetree LLC is a residential development company. The company filed for Chapter 11 protection on Sept. 4, 2008 (Bankr. E.D. N.Y. 08-45854). The Debtor's schedules showed assets of $17,301,277 and liabilities of $10,940,615. BUILDERS FIRSTSOURCE: S&P Cuts Corporate Credit Rating to 'B-' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Dallas, Texas-based Builders FirstSource Inc. The corporate credit rating was lowered to 'B-' from 'B'. At the same time, S&P lowered the issue-level rating on the company's second-lien secured notes to 'CCC+' from 'B' and revised the recovery rating to '5' from '3'. The ratings indicate modest recovery in the event of a payment default. S&P removed all ratings from CreditWatch, where they had been placed with negative implications on April 2, 2008. The outlook is negative. "The lower ratings reflect our assessment that demand for the company's products and services will decline further as a result of the ongoing challenging operating conditions due to the weak U.S. economy and continued housing downturn," said Standard & Poor's credit analyst Andy Sookram. Operating performance and cash flow will likely be weaker than expected, resulting in a deterioration of credit measures to a level S&P would consider to be weak for the current rating. Still, Builders FirstSource continues to have adequate near-term liquidity, consisting of $75 million in cash and $138 million in revolving credit facility availability. In addition, minimal financial covenants exist under the company's revolving credit facility, thus providing some flexibility while it addresses the difficult operating environment. The ratings on Builders FirstSource reflect the cyclicality of new residential construction, volatile costs of lumber and other materials, limited end-market focus, and vulnerability of end- market demand to weak U.S. economic conditions. Ratings also reflect the company's good market positions with key homebuilders and good cost flexibility. BURLINGTON COAT: CEO Mark Nesci Will Retire ------------------------------------------- Mark A. Nesci, chief executive officer of Burlington Coat Factory Warehouse Corporation, a wholly owned subsidiary of Burlington Coat Factory Investments Holdings, Inc., said that he had made a personal decision to retire when his successor is identified and transitioned into the company. Upon retirement, he will become an advisor to the company's Board of Directors and will remain a significant long-term equity investor. Headquartered in Burlington, New Jersey, Burlington Coat Factory Warehouse Corporation, a wholly owned subsidiary of Burlington Coat Factory Investments Holdings, Inc., is a nationwide off-price apparel retailer that operates approximately 384 stores in 44 states under the nameplates of Burlington Coat Factory, Cohoes, MJM, and Baby Depot. * * * As disclosed in the Troubled Company Reporter on May 2, 2008, Fitch Ratings affirmed Burlington Coat Factory Warehouse Corp.'s Issuer Default Rating at 'B-' and the $900 million term loan at 'B/RR3.' In addition, Fitch has taken these rating actions: $800 million asset-based revolver revised to 'B+/RR1' from 'B+/RR2'; $305 million senior unsecured notes downgraded to 'CCC/RR6' from 'CCC+/RR5'; and $99 million senior discount notes downgraded to 'CCC-/RR6' from 'CCC/RR6'. The TCR reported on Sept. 22, 2008, that Standard & Poor's Ratings Services lowered the corporate credit rating on Burlington Coat Factory Warehouse Corp. to 'B-' from 'B'. The outlook is stable. "The downgrade reflects BCF's continued weak performance and our expectation that the company will continue to be challenged by the soft U.S. economy," said Standard & Poor's credit analyst Diane Shand. In addition, credit metrics materially deteriorated in its fiscal fourth quarter due to the combination of poor operating results and increased debt levels from heavier operating lease commitments. CBA COMMERCIAL: Fitch Takes Rating Actions on Various Classes ------------------------------------------------------------- Fitch takes rating actions on CBA Commercial Assets, LLC, Series 2004-1 and 2007-1, small balance U.S. CMBS transactions: CBA Series 2004-1 -- $770,000 class M-5 downgraded to 'B' from 'BB'. CBA Series 2007-1 -- $1.3 million class M-6 downgraded to 'BB-' from 'BB+'. -- $1.8 million class M-5 rated 'BBB-' is placed on Rating Watch Negative. In addition, Fitch affirmed these classes: CBA Series 2004-1: -- $22.2 million class A-1 at 'AAA'; -- $9.7 million class A-2 at 'AAA'; -- $5.3 million class A-3 at 'AAA'; -- interest only class IO at 'AAA'; -- $2.9 million class M-1 at 'AAA'; -- $3.6 million class M-2 at 'AA+'; -- $3.7 million class M-3 at 'BBB+'. Classes M-4, M-6, M-7 and M-8 are not rated by Fitch. Fitch affirmed these classes: CBA Series 2007-1: -- $103.3 million class A at 'AAA'; -- interest-only class X-1 at 'AAA'; -- $3.5 million class M-1 at 'AA'; -- $3.7 million class M-2 at 'A-'; -- $2.2 million class M-3 at 'BBB+'; -- $1.4 million class M-4 at 'BBB'. Classes M-7 and M-8 are not rated by Fitch. The downgrades and rating watch negative placement are the result of increased specially serviced loans and loss expectations since Fitch's last rating action. The CBA 2004-1 transaction has eighteen loans (12.2%) currently in special servicing and the CBA 2007-1 deal has fifteen loans (6.4%). Losses are expected on the majority of the specially serviced loans in both transactions. The transactions are collateralized by small balance commercial loans secured by multifamily, retail, office, industrial, and mixed use properties. The loans are smaller than typical CMBS loans with an average loan size of $467,255 ranging from approximately $79,000 to $3MM, and in some instances are not structured as single purpose entities and are full recourse. A high proportion of the transactions have upcoming Adjustable Rate Mortgage resets. CENTRO RENAL: Case Summary & Two Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Centro Renal de Santurce MSC 536 El Se?orial Mail Sta. #138 Winston Churchill Avenue San Juan, PR 00926 Bankruptcy Case No.: 08-06315 Chapter 11 Petition Date: September 24, 2008 Court: District of Puerto Rico (Old San Juan) Debtor's Counsel: Carlos Rodriguez Quesada, Esq. cerqlaw@coqui.net Law Office of Carlos Rodriguez Quesada PO Box 9023115 San Juan, PR 00902-3115 Tel: (787) 724-2867 Total Assets: $2,000,000 Total Debts: $2,165,000 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/prb08-06315.pdf CHANDLER OAKS: Case Summary & Eight Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Chandler Oaks, LLC 521 E. Morehead St, Ste. 405 Charlotte, NC 28202 Bankruptcy Case No.: 08-06507 Chapter 11 Petition Date: September 22, 2008 Court: Eastern District of North Carolina (Wilson) Judge: J. Rich Leonard Debtor's Counsel: Trawick H Stubbs, Jr., Esq. efile@stubbsperdue.com Stubbs & Perdue, P.A. P. O. Drawer 1654 New Bern, NC 28563 Tel: (252) 633-2700 Fax: (252) 633-9600 Estimated Assets: Less than $50,000 Estimated Debts: $1,000,000 to $10,000,000 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/nceb08-06507.pdf CHRYSLER LLC: Will Lay Off 300 Salaried Employees ------------------------------------------------- Neal E. Boudette at The Wall Street Journal reports that Chrysler LLC will fire about 300 salaried workers as soon as Sept. 26, to meet a target of cutting 1,000 white-collar jobs by the end of this month. Mike Ramsey and Bill Koenig at Bloomberg News relate that the cuts represent 5.4% of Chrysler's salaried workforce. WSJ states that Chrysler said in July that it would lay off workers. Chrysler said in a statement that it has offered buyouts and early-retirement packages, but has not gotten enough people to take the offers to meet its target. According to Chrysler's statement, about three-quarters of the 1,000 jobs have been eliminated through voluntary-severance agreements, with the balance to be achieved through involuntary cuts. The majority of workers to be fired will be informed on Friday, WSJ says, citing Chrysler. Bloomberg reports that involuntary dismissal weren't part of the plan when Chrysler first announced the job cuts in July. According to the report, the company expected the job cuts would be done through "retirements, special programs, and attrition." Chrysler, according to WSJ, is trying to lure union workers to accept buy-out offers or early retirement packages at several plants, which is the main way the company is allowed to eliminate hourly jobs under its current labor contact. If not enough accept the severance deals, salaried workers like the ranks of engineers, designers, and middle managers in its Auburn Hills headquarters, can be dismissed, WSJ states. Chrysler is seeking to cut costs and survive a deep industry downturn, Reuters states. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Aug. 11, 2008, Standard & Poor's Ratings Services lowered its ratings on Chrysler LLC, including the corporate credit rating, to 'CCC+' from 'B-'. On July 31, 2008, TCR said that Fitch Ratings downgraded the Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'. The Rating Outlook is Negative. The downgrade reflects Chrysler's restricted access to economic retail financing for its vehicles, which is expected to result in a further step-down in retail volumes. Lack of competitive financing is also expected to result in more costly subvention payments and other forms of sales incentives. Fitch is also concerned with the state of the securitization market and the ability of the automakers to access this market on an economic basis over the near term, given the steep drop in residual values, higher default rates, higher loss severity being experienced and jittery capital market. CLAIRE'S STORES: Posts $16.9 Million Net Loss in Qtr. Ended Aug. 2 ------------------------------------------------------------------ Claire's Stores, Inc., reported its financial results for the 2008 second quarter ending August 2, 2008, posting a net loss of $16.93 million on net sales of $359.97 million. Effective with the fiscal quarter ended May 3, 2008, the company has changed its fiscal year naming convention to coincide with the calendar year in which the fiscal year begins. Accordingly, the current fiscal quarter is referred to as the 2008 second quarter and the comparable prior year quarter is referred to as the 2007 second quarter. Second Quarter Results The company reported net sales of $360.0 million for the 2008 second quarter, a 1.5% decrease from the 2007 second quarter. The decrease was primarily attributable to a decline in same store sales, partially offset by the growth in its new store base and the effect of foreign currency translation. Consolidated same store sales declined 5.8% in the 2008 second quarter. A decline in average transactions per store of 12.0%, was partially offset by a 7.5% increase in average sales per transaction. The increase in sales per transaction reflects the company's strategy to increase average ticket through good, better and best price tiering. The decline in the number of transactions reflects both weaker mall traffic and less reliance on low margin, low dollar value promotional transactions. In North America, same store sales decreased 8.1%, with sales at Claire's stores declining less than at Icing stores. European same store sales declined 1.7%. The company computes same store sales on a local currency basis, which eliminates any impact from changes in foreign exchange rates. Chief Executive Officer Gene Kahn said, "In the second quarter, we saw an improvement in the tone of business as our comparable store sales improved during each month of the quarter and our merchandise margin increased. We also successfully completed phase one of our Pan-European Transformation project. As a result, we now have an integrated team managing our European business, and a more focused North American merchandising team, within which there are now dedicated groups responsible for each of our Claire's and Icing brands. We launched our Cost Savings Initiative during the quarter and are on target to achieve our previously announced goals of $15 million of expense reductions this year and an annualized amount in excess of $40 million. "I would also like to note, in the 14 months since the transaction was completed, we have made significant progress in upgrading our management team and refining our organizational structure, creating a strong foundation to sustain us through this difficult retail environment and positioning us to reach our performance goals." The gross profit percentage was flat at 49.9% for both 2008 and 2007 second quarters. A 290 basis point increase in the merchandise margin was offset by an equal increase in occupancy and buying costs. Excluding $1.4 million of non-recurring costs related to the PET project, gross profit percentage increased to 50.3%. Selling, general and administrative expenses increased 7.2% to $132.4 million in the second quarter of Fiscal 2008 compared to $123.5 million in last year's comparable fiscal quarter. Adjusting for changes in foreign exchange rates and excluding $2.0 million of non-recurring PET costs, $1.7 million of expense relating to CSI, and $0.3 million of additional sponsor management fees this fiscal quarter compared to the 2007 second quarter, SG&A increased $0.9 million or 0.7%. Adjusted EBITDA in the 2008 second quarter was $58.1 million compared to $64.3 million in the 2007 second quarter. The company defines Adjusted EBITDA as earnings before interest, income taxes, depreciation and amortization, excluding the impact of transaction related costs incurred in connection with its May 2007 acquisition and other non-recurring or non-cash expenses, and normalizing occupancy costs for certain rent-related adjustments. At August 2, 2008 the company's $200 million revolving credit facility was undrawn and fully available aside from an ongoing $5.9 million letter of credit in connection with the company's self-insured workers' compensation program. Cash and cash equivalents were $35.2 million. During the 2008 second quarter, cash used in operating activities was $12.0 million, compared with cash used in operating activities of $59.5 million during the 2007 second quarter. The change in cash used in operating activities was impacted by an increase in operating income, due primarily to a decrease in transaction- related costs, and a decrease in working capital, partially offset by higher interest expense paid on the debt incurred to fund the acquisition of the company. Capital expenditures during the 2008 second quarter were $16.0 million, of which $9.2 million related to new store openings and remodeling projects. Capital expenditures during the 2007 second quarter were $24.6 million. As of Aug. 2, 2008, the company's balance sheet showed $3,342,990,000 in total assets, $2,542,492,000 in total liabilities and $568,759,000 in total stockholders' equity. A full-text copy of the company's financial statements on Form 10- Q is available for free at http://researcharchives.com/t/s?3282 Amendment to Stock Incentive Plan On September 9, 2008, the board of directors and stockholders of Claire's Inc., the parent of Claire's Stores, Inc. adopted an amendment to Parent's Amended and Restated Stock Incentive Plan to increase the number of shares available for issuance to 8,200,000 shares. About Claire's Stores Headquartered in Pembroke Pines, Florida, Claire's Stores Inc. (NYSE: CLE) -- http://www.clairestores.com/-- is a specialty retailer of value-priced jewelry and accessories for girls and young women through its two store concepts: Claire's and Icing. While the latter operates only in North America, Claire's operates worldwide. As of May 3, 2008, Claire's Stores, Inc. operated 3,053 stores in North America and Europe. Claire's Stores Inc. also operates through its subsidiary, Claire's Nippon Co. Ltd., 201 stores in Japan as a 50:50 joint venture with AEON Co. Ltd. The company also franchises 169 stores in the Middle East, Turkey, Russia, South Africa, Poland and Guatemala. * * * As reported in the Troubled Company Reporter on May 6, 2008, Standard & Poor's Ratings Services lowered its corporate credit rating on Claire's Stores Inc. to 'B-' from 'B'. At the same time, S&P lowered the ratings on the company's $1.65 billion senior secured credit facilities to 'B' from 'B+', its $600 million senior unsecured notes to 'CCC+' from 'B-', and its $335 million senior subordinated notes to 'CCC' from 'CCC+'. The outlook is negative. The TCR reported on July 29, 2008, that Moody's Investors Service downgraded Claire's Stores, Inc.'s, ratings, including its probability of default rating to Caa1 from B3 and speculative grade liquidity rating to SGL-4 from SGL-3. In addition, Claire's long term ratings were placed on review for further possible downgrade. The downgrade to Caa1 reflects Claire's weak operating performance over the past two quarters that has led to deterioration in its debt protection measures. In particular, EBITA to interest expense fell to 0.9 times for the lagging twelve month period ending May 3, 2008. The review for further possible downgrade reflects the high likelihood that Claire's debt protection measures will get worse given the challenging economic environment which makes the company highly susceptible to further earnings and cash flow pressure. CONTINENTAL AIRLINES: Hurricane Ike's Impact Estimated at $50MM --------------------------------------------------------------- Continental Airlines, Inc.'s operations were negatively impacted by Hurricane Ike. The company suspended operations at its Houston hub from mid-day on Friday, September 12 through Sunday, September 15. Continental currently estimates that the net adverse impact in September on operating results as a result of Hurricane Ike will be approximately $50 million. This is a preliminary estimate and is subject to change depending on, among other things, insurance recoveries and how quickly traffic returns at the carrier's Houston hub. In a presentation to investors on September 18, 2008, the company plans to update its estimated third quarter 2008 ending unrestricted cash, cash equivalents, and short-term investments balance from its previously estimated level of approximately $2.8 billion to approximately $2.7 billion. The revised estimate of approximately $2.7 billion takes into account the estimated impact of Hurricane Ike, the delay in the return of pre-delivery deposits and related financing on aircraft that were expected to be delivered this month from Boeing which have been delayed due to the strike by certain Boeing employees, and the estimated cash collateral requirements of the Company's fuel hedges caused by the recent significant decline in crude oil prices. About Continental Airlines Based in Houston, Texas, Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/-- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 3,000 daily departures throughout the Americas, Europe and Asia, serving 140 domestic and 139 international destinations. More than 550 additional points are served via SkyTeam alliance airlines. With more than 46,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with Continental Express, carries approximately 69 million passengers per year. * * * The Troubled Company Reporter reported on Aug. 13, 2008, that Standard & Poor's Ratings Services took various actions on its ratings on Continental Airlines Inc. (B/Negative/B-3). S&P affirmed its 'B' long-term corporate credit rating, 'B-3' short- term corporate credit rating, all ratings on unsecured debt and on selected enhanced equipment trust certificates. S&P lowered S&P's ratings on other enhanced equipment trust certificates, particularly those secured by regional jets, and raised other ratings. All ratings were removed from CreditWatch, where they were placed with negative implications May 22, 2008, as part of an industry-wide review. The rating outlook is negative. CONVEYOR COMPANY: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: The Conveyor Company 1200 9th Avenue Sibley, IA 51249 Bankruptcy Case No.: 08-02058 Chapter 11 Petition Date: September 24, 2008 Court: Northern District of Iowa (Sioux City) Debtor's Counsel: Jeana L. Goosmann, Esq. Jeana.Goosmann@Heidmanlaw.com 1128 Historic Fourth Street P.O. Box 3086 Sioux City, IA 51102-3086 Tel: (712) 255-8838 Fax: 712-258-6714 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor's list of 20 largest unsecured creditors is available for free at: http://researcharchives.com/t/s?32b6 COUNTRYWIDE FINANCIAL: Craig Buffie Replaces Andrew Gissinger ------------------------------------------------------------- Bank of America Corp. appointed Craig Buffie to take the place of Andrew Gissinger III as Countrywide Financial Corp.'s executive managing director and chief production officer, James R. Hagerty and Dan Fitzpatrick at The Wall Street Journal reports. WSJ relates that BofA had put Mr. Gissinger in charge of several groups responsible for selling mortgages to consumers. Appointments and changes as part of a change in Countrywide Financial's organizational structure. According to WSJ, the appointment of Mr. Buffie reinforced BofA's "reliance on a cadre of insiders to lead the integration" of Countrywide Financial. WSJ states that Mr. Buffie has worked at BofA for 24 years and is a member of its management operating committee and previously was a senior human resources executive. About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- is a diversified financial services provider and a member of the S&P 500, Forbes 2000 and Fortune 500. Through its family of companies, Countrywide originates, purchases, securitizes, sells, and services residential and commercial loans; provides loan closing services such as credit reports, appraisals and flood determinations; offers banking services which include depository and home loan products; conducts fixed income securities underwriting and trading activities; provides property, life and casualty insurance; and manages a captive mortgage reinsurance company. As reported by the Troubled Company Reporter, Bank of America closed its purchase of Countrywide for $2.5 billion on July 1, 2008. The mortgage lender was originally priced at $4 billion, but the purchase price eventually was whittled down to $2.5 billion based on BofA's stock prices that fell over 40 percent since the time it agreed to buy the ailing lender. As part of the purchase, BofA will also slash around 7,500 jobs. As reported in the Troubled Company Reporter on June 27, 2008, the reductions will take place throughout the country within the next two years, and will begin notifying affected associates in the third quarter. Most of the reductions will occur in instances where the two companies have significant overlap in staff support. BofA will continue to monitor market conditions and make adjustments as appropriate. According to Reuters, BofA will modify around $40 billion of its inherited troubled loans over the next two years to save distressed homeowners. The acquisition will also result in cost savings. Reuters notes that BofA stopped originating sub-prime mortgages in 2001 and said it will not do so again. DAYTON SUPERIOR: Moody's Holds 'B1' Rating on $100MM Term Loan -------------------------------------------------------------- Moody's Investors Service affirmed the B1 rating on Dayton's $100 million senior secured term loan, and also affirmed the B2 corporate family rating as well as the Caa1 rating on the company's $154 million subordinated notes. The ratings outlook has been changed to negative from stable. The affirmation of the B2 rating reflects the benefits from the company's revenue diversification and in particular a very low level of revenue concentration from residential construction. The company's performance has benefited from strong demand in the commercial, infrastructure, and institutional construction markets. Nevertheless, the rating outlook has been changed to negative to reflect the anticipated impact of the slowing US economy and concerns regarding the pace of the company's refinancing. Moody's notes that the company's senior subnotes mature in June 2009 and that the company does not have the internal sources to pay off the notes. As a result, Dayton ability to refinance the notes is an important "liquidity event." Over the next quarter, or so, progress in refinancing will be an increasingly important consideration in the rating. To the degree that this progress stalls, downwards rating action, particularly in its probability of default rating, may be considered. The B2 rating considers the company's reported weak net income as evidenced by its negative book equity and low levels of free cash flow. The company's YTD performance actually improved meaningfully on a year over year basis. However, given Moody's view that the commercial market is unlikely to strengthen from current levels, it will be difficult for the company to meaningfully de-leverage its balance sheet beyond that caused by its typical working capital troughs. The rating considers the company's ABL facility and its priority claim on accounts receivable, inventory, and rental equipment. The rating also considers the company's high level of goodwill and intangible assets. These rating actions and assessment changes have been taken: -- $100 million senior secured term loan, affirmed at B1. LGD assessment changed to LGD3, 32% from LGD3, 33%; -- $154.7 million senior subordinated notes, affirmed at Caa1. LGD assessment changed to LGD5, 83% from LGD5 84%; -- Corporate family rating, affirmed at B2; -- Probability of default, affirmed at B2. Headquartered in Dayton, Ohio, Dayton Superior Corporation is the largest North American manufacturer and distributor of metal accessories and forms used in concrete construction, as well as metal accessories used in masonry construction. Dayton provides these specialized products to the non-residential construction market for use in infrastructure, institutional, and commercial projects. Total revenues for the trailing twelve months ended June 27, 2008 were $483 million. The last rating action was January 31, 2008. DELPHI CORP: Gets Green Light to Halt Pension Contributions ----------------------------------------------------------- David McLaughlin at Dow Jones Newswires reports that the Hon. Robert Drain U.S. Bankruptcy Court for the Southern District of New York granted Delphi Corp. permission on Tuesday to freeze contributions to pension plans for hourly and salaried workers, despite an objection by the Committee of Unsecured Creditors. Dow Jones relates that Delphi will freeze the pension plan for salaried workers on Sept. 30,2008. Delphi, says Dow Jones, will freeze the pension plan for hourly workers as soon as an agreement can be reached with labor unions. Delphi said that it will save $4 million per quarter by freezing the pension plan for hourly workers and $26 million per quarter by freezing the plan for salaried workers, Dow Jones states. Christopher Scinta at Bloomberg News reports that court documents indicate that each month the hourly pension plan costs Delphi about $1 million. Delphi will provide workers with replacement plans based on defined contributions by the company, Dow Jones says. According to Dow Jones, Robert Rosenberg, an attorney for the creditors committee, said that the plan for top executives should be approved as part of Delphi's bankruptcy plan. "Of all the times to lock in a new program given what's going on in the auto industry and the capital markets with no knowledge of what reality is going to look like tomorrow let alone in a year, the timing is just not appropriate," Dow Jones quoted Mr. Rosenberg as saying. "It would be patently unreasonable" to create replacement plans for everyone except 460 top executives, Bloomberg says, citing Delphi attorney John W. Butler Jr., Esq. Delphi will also ask the Court to shift $3.4 billion in pension liabilities to General Motors Corp., Dow Jones says. Bloomberg relates that the creditors committee is also opposing revised agreements that increase the financial contributions GM will make to Delphi as part of its reorganization to $10.6 billion from $6 billion. Attorneys from Latham & Watkins representing the creditors said in a court filing that Delphi will "give away control over the Chapter 11 plan process to GM" in exchange for financing. Bloomberg reports that the Court must approve the changes by the end of September if GM is to take on $3.4 billion of Delphi's pension liabilities to block the federal Pension Benefit Guaranty Corp. from putting a lien on Delphi's foreign assets. The Court will hold a hearing amending the GM agreements until Sept. 25, Bloomberg states. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Latin America, Africa and Middle East, with headquarters in Miramar, Florida, is one of GM's four regional business units. GM LAAM employs approximately 37,000 people in 18 countries and has manufacturing facilities in Argentina, Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and Venezuela. GM LAAM markets vehicles under the Buick, Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and Suzuki brands. At June 30, 2008, the company's balance sheet showed total assets of $136.0 billion, total liabilities of $191.6 billion, and total stockholders' deficit of $56.9 billion. For the quarter ended June 30, 2008, the company reported a net loss of $15.4 billion over net sales and revenue of $38.1 billion, compared to a net income of $891.0 million over net sales and revenue of $46.6 billion for the same period last year. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. (Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELTA AIR: Stockholders Approve Northwest Merger ------------------------------------------------ Delta Air Lines (NYSE: DAL) and Northwest Airlines (NYSE: NWA) stockholders have overwhelmingly approved the pending merger between the two companies. Delta stockholders approved the issuance of 1.25 shares of Delta common stock for each outstanding share of Northwest stock to be distributed upon closing of the merger, expected later this year. The proposal was approved by approximately 99 percent of the votes cast by Delta stockholders. More than 98 percent of the votes cast by Northwest stockholders were voted in favor of the merger. Delta stockholders also approved an amendment to Delta's broad- based employee compensation program that will allow the company to distribute equity to U.S.-based employees of the combined company shortly after the merger closes. This amendment was approved by approximately 92 percent of the shares of Delta common stock voting on the proposal. "We appreciate that stockholders recognize the benefits the Delta- Northwest merger will offer our company, customers, employees, and the communities we serve. This is another milestone toward completing a merger that brings together two unique airlines with complementary strengths that will offer unmatched global service," said Richard Anderson, CEO of Delta. "Providing both Delta and Northwest employees with the ability to share in the benefits of the merger from the beginning is a prime example of the Delta Difference," Mr. Anderson said. "By distributing equity to our employees we're not only recognizing the critical role employees will play in successfully integrating two customer-focused companies, we're also making good on a longstanding commitment that our employees will share in the success their hard work makes possible." Delta in April announced that it is combining with Northwest in an all-stock transaction to create a premier global airline that will be unmatched in the scope and level of services it offers customers. The new company will be called Delta and will be headquartered in Atlanta. The combined company and its regional partners will provide customers access to more than 390 destinations in 67 countries. Together, Delta and Northwest will have more than $35 billion in aggregate annual revenues, operate a mainline fleet of nearly 800 aircraft, employ approximately 75,000 people worldwide, and have one of the strongest balance sheets in the industry. The merger is subject to the approval of the U.S. Department of Justice, which is expected by the end of the year. Delta and Northwest received unconditional clearance from the European Commission on the airlines' proposed merger on Aug. 6, 2008. Northwest to Guarantee $2.5-Bil. Delta Obligations upon Merger In a regulatory filing with the Securities and Exchange Commission dated September 15, 2008, Northwest disclosed that it entered into a third amendment to its Superpriority Debtor-in- Possession and Exit Credit and Guarantee Agreement dated as of August 21, 2006, with Citicorp USA, Inc., as administrative agent, and other financial institutions. Pursuant to the DIP Amendment, Northwest will be permitted to guarantee approximately $2,500,000,000 of obligations of Delta under certain Delta credit agreements, upon the consummation of Northwest's Merger Agreement with Delta, dated as of April 14, 2008, Michael L. Miller, vice president for Law and secretary at Northwest, said. Additionally, Northwest will agree to make a $300,000,000 prepayment of loans outstanding under the Credit Agreement, Mr. Miller disclosed. The Amended DIP Agreement will mature on the earlier of (i) the final date of consolidation with Delta, and (ii) December 31, 2010. A full-text copy of Northwest's DIP Amendment, filed on Form 8K with the SEC, is available for free at: http://sec.gov/Archives/edgar/data/1058033/000110465908059270/a08- 3810_1ex99d1.htm About Northwest Airlines Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents, including Italy, Spain, Japan, China, Venezuela and Argentina. The company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for bankruptcy, they listed $14.4 billion in total assets and $17.9 billion in total debts. On Jan. 12, 2007, the Debtors filed with the Court their chapter 11 plan. On Feb. 15, 2007, the Debtors filed an amended plan and disclosure statement. The Court approved the adequacy of the Debtors' amended disclosure statement on March 26, 2007. On May 21, 2007, the Court confirmed the Debtors' amended plan. That amended plan took effect May 31, 2007. * * * As reported in the Troubled Company Reporter on July 29, 2008, Standard & Poor's Ratings Services lowered its ratings on Northwest Airlines Corp. and subsidiary Northwest Airlines Inc. (both rated B/Negative/--), including lowering the long-term corporate credit ratings on both entities to 'B' from 'B+', and removed the ratings from CreditWatch, where they had been placed with negative implications April 15, 2008. The outlook is negative. The downgrade reflects expected losses and reduced or negative operating cash flow caused by high fuel prices. S&P also lowered our ratings on enhanced equipment trust certificates, in some cases by more than one notch. About Delta Air Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE: DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta flies to Argentina, Australia and the United Kingdom, among others. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan. 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 25, 2007, the Court confirmed the Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. DOMINICK SARTORIO: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Dominick L. Sartorio Elizabeth C. Sartorio 26 Legends Circle Melville, NY 11747 Bankruptcy Case No.: 08-75266 Chapter 11 Petition Date: September 24, 2008 Court: Eastern District of New York (Central Islip) Judge: Dorothy Eisenberg Debtor's Counsel: Marc A. Pergament, Esq. mpergament@wgplaw.com Weinberg Gross & Pergament LLP 400 Garden City Plaza Garden City, NY 11530 Tel: (516) 877-2424 Estimated Assets: $1 million to $10 million Estimated Debts: $10 million to $50 million A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/nyeb08-75266.pdf EDGEWATER FOODS: Ian Fraser and Robert Rooks Quit from Board ------------------------------------------------------------ Edgewater Foods International Inc. disclosed in a Securities and Exchange Commission filing that on Sept. 5, 2008, it accepted the resignation of two board members: -- Ian Fraser, who is also the Chairman of the company's Compensation Committee, and -- Robert Rooks. The resignations were not motivated by a disagreement with the company on any matter relating to the company's operations, policies or practices. The company's Board has been reduced to seven persons. The company appointed Javier Idrovo to fill the vacancy created by the resignations, with such appointment effective Sept. 8, 2008. As set forth in the Purchase Agreement, Mr. Idrovo was designated by the purchaser to the Purchase Agreement. Mr. Idrovo will be entitled to the same fees applicable to all of the company's directors. Mr. Idrovo has been involved in the food industry since 2001 when he joined Dole Food Company, Inc. as Vice President of Strategy. In 2004, Mr. Idrovo was promoted to Senior Vice President of Strategy. In 2005, he became Vice President and CFO of Dole Packaged Foods, one of the operating divisions of Dole Food Company. In 2006, he was promoted to President of Dole Packaged Foods and held that title until March 2008. Prior to joining Dole, Mr. Idrovo worked as a management consultant for The Boston Consulting Group, Inc. holding positions of increasing responsibility from Associate Consultant to Manager. As a consultant, Mr. Idrovo worked for clients on projects that focused on strategy issues as well as organizational effectiveness issues across a number of industries including, but not limited to, Telecommunications, Retailing, Manufacturing, and Financial Services. He received both a Bachelor of Science degree in 1989 and a Master of Engineering degree in 1990 from Harvey Mudd College. Mr. Idrovo also received a Master of Business Administration degree from Harvard Business School in 1995. About Edgewater Foods Based in Gaithersburg, Maryland, Edgewater Foods International Inc. (OTC BB: EDWT) -- http://www.edgewaterfoods.com/-- is the parent company of Island Scallops Ltd., a Vancouver Island aquaculture company. Established in 1989, ISL operates a scallop farming and marine hatchery business. Going Concern Doubt LBB & Associates Ltd. LLP, in Houston, expressed substantial doubt about Edgewater Foods International Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Aug. 31, 2007. The auditing firm pointed to the company's absence of significant revenues, recurring losses from operations, and its need for additional financing in order to fund its projected loss in 2008. EOS AIRLINES: Court Extends Exclusive Plan Filing Date to Oct. 24 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has extended Eos Airlines, Inc.'s exclusive right to file a plan and disclosure statement to Oct. 24, 2008, and its exclusive right to solicit approval of, and obtain confirmation of the plan to Dec. 22, 2008. About EOS Airlines Based in Purchase, New York, EOS Airlines, Inc. -- http://www.eosairlines.com/-- is a transatlantic airline. The company filed for Chapter 11 protection April 26, 2008 (Bankr. S.D.N.Y. Case No.08-22581). Tim J. Robinson, Esq., Nicholas J. Brannick, Esq., and Christine M. Piernpont, Esq., at Squire, Sanders & Dempsey L.L.P, represent the Debtor as counsel. The Debtor selected Kurztman Carson Consultants LLC as its claims agent. The U.S. Trustee for Region 2 appointed creditors to serve on an Official Committee of Unsecured Creditors. Joseph M. Vann, Esq., and Robert A. Boghosian, Esq., at Cohen Tauber Spievack & Wagner P.C. in New York, represent the Committee in this case. Alvarez & Marsal in New York is the Financial Advisor for the Debtor. Menzies Corporate Restructuring has been appointed as joint administrators in the U.K. When the Debtor filed for protection against its creditors, it listed total assets of $70,233,455 and total debts of $34,858,485. ESTATE FINANCIAL: U.S. Trustee Sets 341(a) Meeting for October 7 ---------------------------------------------------------------- The United States Trustee for the Central District of California will convene a meeting of creditors of Estate Financial Inc. and its debtor-affiliate Estate Financial Mortgage Fund, LLC, at 10:00 a.m., on Oct. 7, 2008, in Fess Parker's Doubletree Resort, Santa Ynez Room, 633 E. Cabrillo Boulevard in Santa Barbara, California. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Five creditors of Paso Robles, California-based Estate Financial Inc. -- www.estatefinancial.com/ -- filed an involuntary chapter 11 petition against the real estate broker on June 25, 2008 (Bankr. C.D. Calif. Case Number 08-11457). Petitioner Steve Gardality asserted a claim of $6,269,768. Estate Financial Inc. consented to the bankruptcy filing on July 16, 2008. A Chapter 11 trustee, Thomas P. Jeremiassen, was appointed by the Court on July 23, 2008. Paso Robles, California-based Estate Financial Mortgage Fund, LLC, and its debtor-affiliate, Estate Financial, Inc., filed for Chapter 11 protection on July 1, 2008 (Bankr. C.D. Ca. Case No. 08-11535). Lewis R. Landau, Esq., at Calabasas, California, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed estimated assets of more than $100,000,000 and estimated debts of $100,000 to $1,000,000. Bradley D. Sharp was appointed as Chapter 11 trustee for the case. ESTATE FINANCIAL: Ch. 11 Trustee Wants JMBM as Bankruptcy Counsel ----------------------------------------------------------------- Bradley D. Sharp, Chapter 11 trustee for the bankruptcy estate of Estate Financial Mortgage Fund LLC, a debtor-affiliate of Estate Financial Inc., seeks permission from the U.S. Bankruptcy Court for the Central District of California to employ Jeffer, Mangels, Butler & Marmaro LLP as its general bankruptcy counsel. The Chapter 11 trustee requires JMBM to: a. advise the Trustee regarding his rights and responsibilities as a chapter 11 trustee, specifically including the requirements of the United States Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, the Local Bankruptcy Rules, the Guides for Chapter 11 Debtors, and how the application of such provisions relate to the administration of Debtor's estate; b. advise and to assist the Trustee in connection with the preparation of certain documents to be filed with the Court and/or the OUST, including, without limitation, Schedules, SOFA, Statement of Equity Security Holders, Seven Day Package, Monthly Operating Reports, and other such documents; c. represent the Trustee with respect to bankruptcy issues in the context of Debtor's pending chapter 11 case, and any adversary proceedings, including the commencement of any avoidance actions, the outcome of which would affect the administration of the chapter 11 case; d. advise and protect the Trustee concerning Debtor's estate's rights, investments and interests in various loans and deeds of trust and to take action to protect Debtor's estate's economic interests in such assets; and e. advise, assist and represent the Trustee in the negotiation, formulation and confirmation of a plan of reorganization. David M. Poitras, a principal of JMBM, discloses that the firm's professionals bill: Professional Hourly Rate ------------ ----------- * Attorneys: Joseph A. Eisenberg $750 Steven A Spector $650 John A. Graham $595 David M. Poitras $565 Thomas M. Geher $495 Caroline Djang' $325 Joseph Nicchitta $295 * Paralegals: Juanita Treshinsky $200 Wilma Escalante $180 To the best of the Chapter 11 trustee's knowledge, JMBM is a "disinterested person" within the meaning of section 101(14) of the Bankruptcy Code. JMBM does not represent any interest adverse to Debtor, its creditors or the estate. On Sept. 11, 2008, U.S. Bankruptcy Judge Robin Riblet entered an order denying the request of Mr. Sharp to employ JMBM as his counsel. The Court decreed that the notice of application for an order to employ JMBM does not appear to have been widespread. A hearing for the counsel's employment is set for Oct. 8, 2008, at 10:00 a.m., in Courtroom 201, 1415 State Street, in Santa Barbara, California. About Estate Financial Based in Paso Robles, California, Estate Financial Mortgage Fund, LLC -- http://www.estatefinancial.com/-- is a fund organized by sole manager Estate Financial Inc. to invest in construction loans for residential and commercial properties. The Fund filed for Chapter 11 protection on July 1, 2008 (Bankr. C.D. Calif. 08-11535). Lewis R. Landau, Esq., in Calabasas, California, represents the Debtor as counsel. When the Fund filed for protection from its creditors, it listed assets of more than $100,000,000, and debts of $100,001 to $1,000,000. Paso Robles, California-based Estate Financial Mortgage Fund, LLC, and its debtor-affiliate, Estate Financial, Inc., filed for Chapter 11 protection on July 1, 2008 (Bankr. C.D. Ca. Case No. 08-11535). Lewis R. Landau, Esq., at Calabasas, California, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed assets of more than $100,000,000 and debts of $100,000 to $1,000,000. Bradley D. Sharp was appointed as Chapter 11 trustee for the case. ETELOS INC: Files Prospectus for Sale of 5,760,741 Shares --------------------------------------------------------- Etelos Inc. filed with the Securities and Exchange Commission filing a prospectus that relates solely to the offer and sale by the selling stockholders identified in the prospectus of up to 5,760,741 shares of the company's common stock. The shares offered consist of: -- 4,074,074 shares of the company's common stock issuable upon conversion of the principal amount of the senior convertible debentures purchased in the company's January 2008 and April 2008 private placements; -- 488,889 shares of the company's common stock issuable upon conversion of interest payable through maturity on the senior convertible debentures purchased in the company's January 2008 and April 2008 private placements; -- 611,111 shares of the company's common stock issuable upon exercise of warrants issued to purchasers of the senior convertible debentures sold in the company's January 2008 and April 2008 private placements; and -- 586,667 shares of the company's common stock issuable upon conversion of the original principal amount of the notes purchased in the company's September 2007 private placement. The shares being registered were sold to investors in private placement transactions that were exempt from registration pursuant to Section 4(2) of the Securities Act of 1933. The company will not receive any proceeds from the resale of shares of its common stock. The company will, however, receive proceeds in connection with the exercise of the warrants to the extent the exercise price of such warrants is paid with cash. The selling stockholders may resell the shares of the company's common stock from time to time in the principal market on which its stock is traded at the prevailing market price or in negotiated transactions. A full-text copy of the prospectus in available free of charge at http://researcharchives.com/t/s?3287 About Etelos Inc. Headquartered in San Mateo, Calif., Etelos Inc. (OTC BB: ETLO) -- http://www.etelos.com/-- is a developer and distributor of Open Standards software. Etelos development products include tools for Web developers, business and individual users such as the Etelos Application Server(TM) and the Etelos Development Environment(TM). EAS and EDE support many common application languages and also supports a simple to use scripting language, the English Application Scripting Engine(TM). Etelos Inc.'s consolidated balance sheet at June 30, 2008, showed $2,252,000 in total assets and $18,067,000 in total liabilities, resulting in a $15,815,000 stockholders' deficit. At June 30, 2008, the company's consolidated balance sheet also showed strained liquidity with $1,863,000 in total current assets available to pay $14,607,000 in total current liabilities. The company reported a net loss of $21,573,000 on revenue of $22,000 for the second quarter ended June 30, 2008, compared with a net loss of $572,000 on revenue of $106,000 in the corresponding period of 2007. ETERNAL TECHNOLOGIES: Receiver to Collect $732,290 in Payments ------------------------------------------------------------- Western Securities Corporation disclosed that the U.S. Bankruptcy Court for the Southern District of Texas has appointed a Receiver to collect and satisfy the final Judgment and Writ of Execution in the amount of $732,290 plus legal and court fees against Eternal Technologies Group Inc. The Turnover Order issued by United States District Judge Vanessa D. Gilmore on Sept. 23, 2008, is to collect on the unsatisfied Judgment Western Securities Corporation has against Eternal Technologies Group rendered in the U.S. District Court of the Southern District of Texas, Civil Action Number H-O5-02504 on Oct. 31, 2007. The Turnover Motion states that the Receiver will have and exercise the fullest and broadest powers under the Rule, including but not limited to: "Order the production before him of evidence, including documents, upon all matters pertaining to Defendant's compliance with this Order; the assets, location of assets, value of assets and all other financial matters pertaining to Defendant." Order that, "all third-parties in possession, or constructive possession, of assets, including but not limited to cash and funds on deposit, documentation, property or information regarding the Defendant, shall turnover or make available for turnover to the Receiver." Order that Eternal Technologies Group, "immediately turnover to the Receiver within ten days from Defendant's receipt of a copy of this Order any current and future proceeds, checks, cash, securities and share certificates. If the share certificates do not exist, Defendant is hereby ordered to execute share certificates representing his interests and to turn the share certificates over to Receiver within ten days after receipt of a copy of this Order." The Turnover Motion also stated that, "The Receiver is hereby authorized necessary to gain access to all storage facilities, safety deposit boxes, real property, leased premises wherein any property of Defendant may be situated." The powers of the Receiver include the right, authority and power to: 1. Collect all accounts receivable of Defendant; 2. Change locks to all premises at which any property is situated; 3. Open all mail directed to Defendant; 4. Endorse and cash all checks and negotiable instruments payable to Defendant; 5. Hire a real estate broker to sell any real property and mineral interest belonging to the Defendants; 6. Hire any person or company to move and store the property of Defendant; 7. Obtain from any financial institution, bank, credit union, or savings and loan any financial records belonging to or pertaining to the Defendant; 8. Hire any person or company necessary to accomplish any right or power under this Order; 9. Sell assets collected from the Defendants upon terms to be determined by the Receiver; 10. Direct any Constable, Sheriff or authorized Peace Officer to seize and sell property under Writ of Execution. About Eternal Technologies Group Inc. Eternal Technologies Group Inc. (OTC:ETLT) -- http://www.eternaltechs.com/-- is engaged in agricultural genetics and medical equipment manufacturing and distribution operating in the People's Republic of China. The company is focused on the development and application of animal husbandry techniques to produce food products, the development, manufacturing and marketing of medical equipment and technologies used in the detection and prevention of breast cancer in humans. The company's operations are conducted through its wholly owned subsidiaries, Eternal Technology Group Ltd. and E-Sea Biomedical Engineering Co. International Ltd. also a BVI company and Willsley Company Limited. FANNIE MAE: Top Executives Leaving Company ------------------------------------------ James R. Hagerty at The Wall Street Journal reports that Fannie Mae top executives are leaving the company. According to WSJ, officials leaving Fannie Mae include: -- Peter Niculescu, promoted less than a month ago to become chief business officer and the No. 2 executive; -- Beth Wilkinson, general counsel; -- Rahul Merchant, chief information officer; and -- Duane Duncan, a veteran lobbyist. WSJ states that it wasn't clear on what terms any of the executives were leaving. About Fannie Mae The Federal National Mortgage Association -- (FNMA) (NYSE: FNM) -- commonly known as Fannie Mae, is a shareholder-owned U.S. government-sponsored enterprise. Fannie Mae has a federal charter and operates in America's secondary mortgage market, providing mortgage bankers and other lenders funds to lend to home buyers at low rates. Fannie Mae was created in 1938, under President Franklin D. Roosevelt, at a time when millions of families could not become homeowners, or risked losing their homes, for lack of a consistent supply of mortgage funds across America. The government established Fannie Mae to expand the flow of mortgage funds in all communities, at all times, under all economic conditions, and to help lower the costs to buy a home. In 1968, Fannie Mae was re-chartered by the U.S. Congress as a shareholder-owned company, funded solely with private capital raised from investors on Wall Street and around the world. Fannie Mae is the U.S. largest mortgage buyer, according to The New York Times. FGIC CORP: S&P Cuts Credit and Notes Ratings to 'CCC' from 'B' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on FGIC Corp.'s counterparty credit rating and senior unsecured notes to 'CCC' from 'B' and removed them from CreditWatch where they were placed with negative implications on June 6, 2008. The outlook is negative. Although management states that FGIC Corp. has cash resources to fund its obligations as they come due for at least the next 12 months, Financial Guaranty Insurance Co., FGIC Corp.'s principal subsidiary, is currently unable to pay dividends to FGIC Corp. without the approval of the New York State Insurance Department. In addition, FGIC's 'BB' financial strength rating and the 'B' preferred stock ratings on its Grand Central Capital Trust securities remain on CreditWatch with negative implications. S&P believes FGIC's capital position is fragile as, relative to the regulatory minimum statutory surplus requirement of $65 million, FGIC reports $285.6 million of statutory surplus as of June 30, 2008. S&P believes capital may be further reduced in view of its estimates for losses on FGIC's CDO of ABS and non-prime RMBS exposures which are a multiple of FGIC's current loss reserves. Another development that S&P believes may stress policyholder surplus in the near term is the potential bankruptcy of Jefferson County, Alabama. FGIC has $1.2 billion of exposure to Jefferson County sewer revenue bonds. The successful closing of the reinsurance transaction between FGIC and MBIA Insurance Corp., whereby FGIC would cede $184 billion of municipal par exposure to MBIA, would benefit statutory surplus. While the ultimate economic benefit of transferring about $900 million of future earned premium on this well-performing book of business is questionable in S&P's view, management's near-term objective is to bolster statutory surplus to avoid regulatory intervention. Company projections show resulting contingency reserve transfers and ceding commissions positively contributing to management's pro-forma policyholder surplus projection of $853 million for the period ending Sept. 30, 2008. FGIC also has the ability to bolster statutory capital by up to $300 million by drawing against its Grand Central Capital Trust contingent preferred stock security. Management expects the reinsurance transaction to close by the end of the month. However, if the closing of this transaction is seriously delayed or postponed, FGIC's financial strength rating will likely be lowered, in view of the possibility of a breach of the minimum statutory requirement due to potential additional losses. Finally the 'BB' financial strength rating of FGIC UK Ltd. remains on CreditWatch with negative implications. Following the termination of the net worth maintenance agreement between FGIC and FGIC UK Ltd., FGIC UK Ltd. will be evaluated on a stand-alone basis. FIRST MARBLEHEAD: Fitch Lowers 25 Classes of Student Loan Trusts ---------------------------------------------------------------- Fitch Ratings downgraded 25 classes, upgraded two classes and affirms 45 classes from 12 National Collegiate Student Loan Trust asset-backed securities issued by the First Marblehead Corporation. In addition, Fitch places 22 classes on 'Rating Watch Negative' and 15 classes remain on 'Rating Watch Negative' where they were placed on April 9, 2008. The ratings actions are detailed at the end of this press release. The affirmations and upgrades are primarily related to seasoned transactions that are performing within Fitch's expectations or have built credit enhancement in excess of Fitch's expectations. Downgrades and Rating Watch Negative actions are primarily the result of a combination of default rates that have exceeded Fitch's initial expectations, the operational uncertainties related to the ongoing bankruptcy proceedings related to The Education Resources Institute, the guarantor of the loans in the NCSLT transactions, and Fitch's concerns regarding the level of recoveries on defaulted loans in a post-TERI environment. Fitch's analysis is focusing on further refining default level and loss timing projections for each pool. Importantly, Fitch's analysis will also consider the transactions' sensitivity to various recovery levels and timing patterns in the context of TERI's bankruptcy proceedings including the impact of the suspension of "rehab" loan sales which resulted in near-term recoveries on re-performing loans. Depending on the outcome of this analysis Fitch expects that ratings currently on RWN could be downgraded by an additional zero to three notches. Details of Fitch's analysis for each vintage are: NCSLT 2003-1, 2004-1 and 2004-2 trusts have performed within or better than Fitch's expectations or credit enhancement has built in excess of expectations since Fitch's last review of the trusts. As the collateral in these trusts have seasoned for 4 to 5 years, the levels and volatility of remaining defaults are expected to be lower than that for the newer trusts. In addition, the total and senior parity ratios for these trusts as of July 31, 2008 ranged from 100.5% to 106.8% and 121.5% to 125.0%, respectively. Higher parity ratios combined with lower expected remaining defaults make these trusts less susceptible to adverse changes in loss severity. NCSLT 2005-1, 2005-2 and 2005-3 trusts have performed modestly below Fitch's expectations. The total and senior parity ratios for these trusts as of July 31, 2008 ranged from 97.3% to 98.2% and 111.1% to 113.2%, respectively. Less seasoning combined with lower parity ratios make these trusts, especially the class C notes, more susceptible to adverse changes in loss severity. NCSLT 2006-1, 2006-2, 2006-3, 2006-4 and 2007-1 trusts have performed measurably worse than Fitch's expectations. In particular, the 06-1, 06-2 and 07-1 transactions have demonstrated significant weakness. In a number of the '06 and '07 transactions, loss coverage multiples were below the level necessary to maintain the current ratings, resulting in downgrades for those classes. The 2007-2 transaction is performing slightly below Fitch's expectations but within a range where current ratings are maintainable. Update on TERI's Bankruptcy Filing The ratings on some of the NCSLT notes were placed on 'Rating Watch Negative' by Fitch on Apr. 9, 2008, following the bankruptcy filing by TERI. Among Fitch's concerns were the status of funds in the pledged accounts and the potential for changes in service levels related to collection and loss mitigation functions, which if not maintained, could increase loss severity. On June 5, 2008, TERI sought to resume payment of default claims from the pledged accounts as part of a motion terminating their master servicing agreement with the sponsor for NCSLT transactions, First Marblehead, and any related FMD entities. On June 23, 2008, the U.S. Bankruptcy Court of Massachusetts granted this motion, determining that each of the affected NCSLT transactions has an enforceable, first-perfected security interest in the funds deposited in their respective pledge accounts. In July 2008, TERI resumed payment of default claims, including claims filed but not processed by TERI from April to June. Funds in the pledged accounts were divided into three categories: funds on deposit at the time of the bankruptcy filing; funds deposited between the bankruptcy filing and June 23, 2008 (existing recoveries); and funds deposited after June 23, 2008 (future recoveries). Other interested parties were given fund- specific objection periods of 14 days, 45 days, and 60 days, respectively, from approval of the motion, during which time the specified funds would continue to be frozen. To date, the objection period for the first group of funds has expired, and TERI has resumed paying claims on defaulted NCSLT loans from funds released from the pledged accounts. However, existing and future recoveries continue to be frozen pending the expiration of its objection periods which have been extended to September 30, In addition, 're-hab' loan sales have been suspended pending resolution of these issues. With regard to service levels, First Marblehead has deposited cash into specified accounts created within each NCSLT transaction for the sole purpose of supporting current service levels over the next 12 months, during which time a more permanent solution is intended to be in place. Fitch will continue to monitor the transactions closely. Rating actions are: NCSLT 2003-1 -- Class A-4 affirmed at 'AAA'; -- Class A-5 affirmed at 'AAA'; -- Class A-6 affirmed at 'AAA'; -- Class A-7 affirmed at 'AAA'; -- Class A-IO affirmed at 'AAA'; -- Class B-1 upgraded to 'A+' from 'A'; -- Class B-2 upgraded to 'A+' from 'A'. NCSLT 2004-1 -- Class A-2 affirmed at 'AAA'; -- Class A-3 affirmed at 'AAA'; -- Class A-4 affirmed at 'AAA'; -- Class A-IO-1 affirmed at 'AAA'; -- Class A-IO-2 affirmed at 'AAA'; -- Class B-1 affirmed at 'A'; -- Class B-2 affirmed at 'A'. NCSLT 2004-2 -- Class A-2 affirmed at 'AAA'; -- Class A-3 affirmed at 'AAA'; -- Class A-4 affirmed at 'AAA'; -- Class A-5-1 affirmed at 'AAA'; -- Class A-5-2 affirmed at 'AAA' -- Class A-IO affirmed at 'AAA'; -- Class B affirmed at 'AA+'; -- Class C affirmed at 'A+'. NCSLT 2005-1 -- Class A-2 affirmed at 'AAA'; -- Class A-3 affirmed at 'AAA'; -- Class A-4 affirmed at 'AAA'; -- Class A-5-1 affirmed at 'AAA'; -- Class A-5-2 affirmed at 'AAA' -- Class A-IO affirmed at 'AAA'; -- Class B 'AA' placed on Rating Watch Negative; -- Class C downgraded to 'BBB+' from 'A-' and remains on Rating Watch Negative. NCSLT 2005-2 -- Class A-2 affirmed at 'AAA'; -- Class A-3 affirmed at 'AAA'; -- Class A-4 affirmed at 'AAA'; -- Class A-5-1 affirmed at 'AAA'; -- Class A-5-2 affirmed at 'AAA' -- Class A-IO affirmed at 'AAA'; -- Class B 'AA' placed on Rating Watch Negative; -- Class C downgraded to 'BBB+' from 'A-' and remains on Rating Watch Negative. NCSLT 2005-3 -- Class A-2 affirmed at 'AAA'; -- Class A-3 affirmed at 'AAA'; -- Class A-4 affirmed at 'AAA'; -- Class A-5-1 affirmed at 'AAA'; -- Class A-5-2 affirmed at 'AAA' -- Class A-IO-1 affirmed at 'AAA'; -- Class A-IO-2 affirmed at 'AAA'; -- Class B 'AA' placed on Rating Watch Negative; -- Class C downgraded to 'BBB+' from 'A-' and remains on Rating Watch Negative. NCSLT 2006-1 -- Class A-2 downgraded to 'AA+' from 'AAA'; -- Class A-3 downgraded to 'AA+' from 'AAA'; -- Class A-4 downgraded to 'AA+' from 'AAA'; -- Class A-5 downgraded to 'AA+' from 'AAA'; -- Class A-IO downgraded to 'AA+' from 'AAA'; -- Class B downgraded to 'A' from 'A+' and remains on Rating Watch Negative; -- Class C downgraded to 'BBB' from 'A-' and remains on Rating Watch Negative. NCSLT 2006-2 -- Class A-1 downgraded to 'AA' from 'AAA'; -- Class A-2 downgraded to 'AA' from 'AAA'; -- Class A-3 downgraded to 'AA' from 'AAA'; -- Class A-4 downgraded to 'AA' from 'AAA'; -- Class A-IO downgraded to 'AA' from 'AAA'; -- Class B downgraded to 'A' from 'A+' and remains on Rating Watch Negative; -- Class C downgraded to 'BBB' from 'A-' and remains on Rating Watch Negative. NCSLT 2006-3 -- Class A-1 'AAA' placed on Rating Watch Negative; -- Class A-2 'AAA' placed on Rating Watch Negative'; -- Class A-3 'AAA' placed on Rating Watch Negative'; -- Class A-4 'AAA' placed on Rating Watch Negative; -- Class A-5 'AAA' placed on Rating Watch Negative; -- Class A-IO 'AAA' placed on Rating Watch Negative; -- Class B 'AA' placed on Rating Watch Negative; -- Class C 'A' remains on Rating Watch Negative; -- Class D 'BBB' remains on Rating Watch Negative. NCSLT 2006-4 -- Class A-1 'AAA' placed on Rating Watch Negative; -- Class A-2 'AAA' placed on Rating Watch Negative'; -- Class A-3 'AAA' placed on Rating Watch Negative; -- Class A-4 'AAA' placed on Rating Watch Negative; -- Class A-IO 'AAA' placed on Rating Watch Negative; -- Class B 'AA' placed on Rating Watch Negative; -- Class C 'A' remains on Rating Watch Negative; -- Class D 'BBB' remains on Rating Watch Negative. NCSLT 2007-1 -- Class A-1 downgraded to 'AA+' from 'AAA' and placed on Rating Watch Negative; -- Class A-2 downgraded to 'AA+' from 'AAA' and placed on Rating Watch Negative; -- Class A-3 downgraded to 'AA+' from 'AAA' and placed on Rating Watch Negative; -- Class A-4 downgraded to 'AA+' from 'AAA' and placed on Rating Watch Negative; -- Class A-IO downgraded to 'AA+' from 'AAA' and placed on Rating Watch Negative; -- Class B downgraded to 'A+' from 'AA' and placed on Rating Watch Negative; -- Class C downgraded to 'BBB+' from 'A' and remains on Rating Watch Negative; -- Class D downgraded to 'BB+' from 'BBB' and remains on Rating Watch Negative. NCSLT 2007-2 -- Class A-1 affirmed at 'AAA'; -- Class A-2 affirmed at 'AAA'; -- Class A-3 affirmed at 'AAA'; -- Class A-4 affirmed at 'AAA'; -- Class A-IO affirmed at 'AAA'; -- Class B affirmed at 'AA'; -- Class C 'A' remains on Rating Watch Negative; -- Class D 'BBB' remains on Rating Watch Negative. FULTON STREET: S&P Chips Notes Ratings; Removes Negative Watch -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Fulton Street CDO Ltd.'s class A-1A, A-2, B-1, and B-2 notes and removed them from CreditWatch with negative implications, where they were placed on July 21, 2008. Concurrently, S&P lowered its rating on the class A-1B notes and placed it on CreditWatch with negative implications. The 'CC' rating on the class C notes is unaffected by these actions. Fulton Street CDO Ltd. is a cash flow collateralized debt obligation of asset-backed securities originated in March 2002 that triggered an event of default under section 5.1(j) of its indenture. This section of the indenture specifies an EOD if the ratio calculated by dividing the net outstanding collateral balance by the sum of the aggregate principal amount of the class A-1 notes falls below 102%. The lowered ratings and CreditWatch placement reflect the continued credit deterioration of the residential mortgage-backed securities backing the transaction, as well as the EOD. Fulton Street CDO Ltd. triggered the EOD on Sept. 17, 2008, under section 5.1(j) of the indenture dated March 27, 2002, when its class A-1 overcollateralization ratio fell below 102%. When Standard & Poor's receives EOD notices, S&P places all affected note ratings on CreditWatch with negative implications. S&P lowered the rating on the class A-1A notes to 'AA' from 'AAA' based on the full financial guarantee insurance policy provided by the monoline insurance provider, MBIA Inc., which guarantees payments on the insured notes. Because Standard & Poor's underlying rating on this insured class, without giving benefit to the insurance policy, was lower than 'AA', S&P lowered the rating to match its financial strength rating on MBIA. Ratings Lowered and Removed from Creditwatch Negative Rating ------ Transaction Class To From ----------- ----- -- ---- Fulton Street CDO Ltd. A-1A AA AAA Fulton Street CDO Ltd. A-2 CC BBB+/Watch Neg Fulton Street CDO Ltd. B-1 CC B/Watch Neg Fulton Street CDO Ltd. B-2 CC B/Watch Neg Rating Lowered and Placed on Creditwatch Negative Transaction Class To From ----------- ----- -- ---- Fulton Street CDO Ltd. A-1B BBB-/Watch Neg AAA Other Outstanding Rating Transaction Class Rating ----------- ----- ------ Fulton Street CDO Ltd. C CC GENERAL MOTORS: Delphi Wants to Shift $3.4BB in Pension Debts ------------------------------------------------------------- Delphi Corp will ask the U.S. Bankruptcy Court for the Southern District of New York to shift $3.4 billion in pension liabilities to General Motors Corp., David McLaughlin at Dow Jones Newswires reports. According to Dow Jones, the Hon. Robert Drain U.S. Bankruptcy Court for the Southern District of New York granted Delphi permission on Tuesday to freeze contributions to pension plans for hourly and salaried workers, despite an objection by the Committee of Unsecured Creditors. Dow Jones relates that Delphi will freeze the pension plan for salaried workers on Sept. 30,2008. Delphi, says Dow Jones, will freeze the pension plan for hourly workers as soon as an agreement can be reached with labor unions. Delphi said that it will save $4 million per quarter by freezing the pension plan for hourly workers and $26 million per quarter by freezing the plan for salaried workers, Dow Jones states. Christopher Scinta at Bloomberg News reports that court documents indicate that each month the hourly pension plan costs Delphi about $1 million. Delphi will provide workers with replacement plans based on defined contributions by the company, Dow Jones says. According to Dow Jones, Robert Rosenberg, an attorney for the creditors committee, said that the plan for top executives should be approved as part of Delphi's bankruptcy plan. "Of all the times to lock in a new program given what's going on in the auto industry and the capital markets with no knowledge of what reality is going to look like tomorrow let alone in a year, the timing is just not appropriate," Dow Jones quoted Mr. Rosenberg as saying. "It would be patently unreasonable" to create replacement plans for everyone except 460 top executives, Bloomberg says, citing Delphi attorney John Butler Jr. Bloomberg relates that the creditors committee is also opposing revised agreements that increase the financial contributions GM will make to Delphi as part of its reorganization to $10.6 billion from $6 billion. Attorneys from Latham & Watkins representing the creditors said in a court filing that Delphi will "give away control over the Chapter 11 plan process to GM" in exchange for financing. Bloomberg reports that the Court must approve the changes by the end of September if GM is to take on $3.4 billion of Delphi's pension liabilities to block the federal Pension Benefit Guaranty Corp. from putting a lien on Delphi's foreign assets. The Court adjourned a hearing amending the GM agreements until Sept. 25, Bloomberg states. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Latin America, Africa and Middle East, with headquarters in Miramar, Florida, is one of GM's four regional business units. GM LAAM employs approximately 37,000 people in 18 countries and has manufacturing facilities in Argentina, Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and Venezuela. GM LAAM markets vehicles under the Buick, Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and Suzuki brands. At June 30, 2008, the company's balance sheet showed total assets of $136.0 billion, total liabilities of $191.6 billion, and total stockholders' deficit of $56.9 billion. For the quarter ended June 30, 2008, the company reported a net loss of $15.4 billion over net sales and revenue of $38.1 billion, compared to a net income of $891.0 million over net sales and revenue of $46.6 billion for the same period last year. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. (Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: May Lack Cash, Hires Outsider to Help Cut Costs --------------------------------------------------------------- Sharon Terlep at The Wall Street Journal reports that General Motors Corp. has hired an outside company to help find ways to reduce spending. GM didn't name the company. According to WSJ, GM is acccelerating its $10 billion cost-cutting plan. WSJ relates that GM investors are concerned that the company's cash is insurricient to withstand the current downturn, sparked by the company's latest move to draw $3.5 billion from its credit facilities. GM's Treasurer Walter Borst explained that GM made the move because of turmoil in financial markets and "it seemed like a good time to take the money in house and make sure it was available if and when we need it," WSJ says. Mr. Borst said that GM remains on track to boost its liquidity by $15 billion by 2009 through cost cuts, asset sales, and by tapping financial markets, WSJ states. As part of plans to raise $4 billion through asset sales, GM is looking to sell a parts factory in Strasbourg, France, along with GM's Hummer truck brand, WSJ says, citing Mr. Borst. According to the report, Mr. Borst said GM is considering to sell other assets and will disclose plans in the fourth quarter. WSJ reports that GM is on schedule with its plan to cut $1.5 billion in costs by year-end and will make further custs in 2008. GM, says WSJ, has already reduced production, suspending plans to develop a next generation of pickup truck. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Latin America, Africa and Middle East, with headquarters in Miramar, Florida, is one of GM's four regional business units. GM LAAM employs approximately 37,000 people in 18 countries and has manufacturing facilities in Argentina, Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and Venezuela. GM LAAM markets vehicles under the Buick, Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and Suzuki brands. At June 30, 2008, the company's balance sheet showed total assets of $136.0 billion, total liabilities of $191.6 billion, and total stockholders' deficit of $56.9 billion. For the quarter ended June 30, 2008, the company reported a net loss of $15.4 billion over net sales and revenue of $38.1 billion, compared to a net income of $891.0 million over net sales and revenue of $46.6 billion for the same period last year. As reported in the Troubled Company Reporter on Sept. 24, 2008, Fitch Ratings downgraded the Issuer Default Rating of General Motors by one notch to 'CCC' from 'B-', due to diminishing liquidity and lack of access to capital. In Fitch's previous downgrade, Fitch stated that diminished capacity to refinance short-term maturities, or Fitch projections that GM would drop below $15 billion in cash could be cause for further downgrades. GREAT LAKES: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Great Lakes Tissue Company 437 S. Main St. Cheboygan, MI 49721 Bankruptcy Case No.: 08-22796 Type of Business: The Debtor makes toilet papers, stock towels and napkins. Chapter 11 Petition Date: September 22, 2008 Court: Eastern District of Michigan (Bay City) Judge: Daniel S. Opperman Debtor's Counsel: Keith A. Schofner, Esq. kaschofner@lambertleser.com Rozanne M. Giunta, Esq. rmgiunta@lambertleser.com 916 Washington Ave., Suite 309 Bay City, MI 48708 Tel: (989) 893-3518 Fax: (989)894-2232 Estimated Assets: $7,700,000 Estimated Debts: $14,293,125 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/mieb08-22796.pdf GROWERS DIRECT: June 30 Balance Sheet Upside-Down by $2.39 Million ------------------------------------------------------------------ Growers Direct Coffee Company Inc. released its unaudited consolidated financial results for the three and six months ended June 30, 2008. As of June 30, 2008, Growers Direct's balance sheet showed $957,348 in total assets, $3.33 million in total liabilities, resulting to $2.39 million in shareholders' deficit. Growers Direct posted $1.79 million in net losses on $430,397 in net revenues for the second quarter ended June 30, 2008, compared with $4.05 million in net losses on $251,577 in net revenues for same period ended June 30, 2007. Growers Direct posted $2.99 million in net losses on $1.05 million in net revenues for first half ended June 30, 2008, compared with $5.46 million in net losses on $644,189 in net revenues for the same period ended June 30, 2007. Full-text copy of the company's consolidated financial statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?327c About Growers Direct Headquartered in Berkeley, Calif., Growers Direct Coffee Company Inc. (OTC BB: GWDC) -- http://www.growersdirectcoffee.com/-- is a world-wide distributor and a marketer of the green bean coffee grown in Papua New Guinea, "Penlyne Castle" brand "Jamaican Blue Mountain" coffee grown by Blue Mountain Coffee Co-Operative Society Ltd of Jamaica. Coffee in Papua New Guinea are grown by the company's shareholder-farmers in the Highland region's rich volcanic soils between the altitudes of 4,000 and 6,000 feet above sea level. Going Concern Doubt PMB Helin Donovan, LLP, in San Francisco, expressed substantial doubt about Growers Direct Coffee Company 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 operating losses. GSAA HOME: S&P Lowers Ratings on 21 Classes of Certificates ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 21 classes of mortgage-backed pass-through certificates issued by GSAA Home Equity Trust's series 2005-14 and 2005-15. S&P removed 15 of the lowered ratings from CreditWatch with negative implications. Concurrently, S&P affirmed its ratings on the remaining nine classes from these transactions. The lowered ratings reflect S&P's opinion that projected credit support for the affected classes is insufficient to support the ratings at their previous levels. To assess the creditworthiness of each class, S&P reviewed the individual delinquency and loss trends for changes, if any, in risk characteristics, servicing, and the ability to withstand additional credit deterioration. As of the Aug. 25, 2008, distribution date, severe delinquencies for series 2005-14 were about 17.28% of the current pool balance, up approximately 24.50% in the past six months; this deal experienced net losses totaling $11,220,000 during this time. Severely delinquent loans for series 2005-15 totaled approximately 12.39%, which is a 25.80% increase over the past six months; the transaction has incurred $7,717,000 in net losses over this period. Cumulative realized losses for series 2005-14 and 2005-15 were 1.61% and 0.99% of the original pool balance, respectively, while credit enhancement for the senior classes from series 2005-14 and 2005-15 was 21.60% and 18.41% of the original pool balances, respectively. Class B-3 from series 2005-14 took a principal write-down, which prompted S&P to downgrade it to 'D'. Credit enhancement for the downgraded classes from series 2005-14 ranged from 11.94% to 0%, while credit support for the downgraded classes from series 2005-15 ranged from 7.32% to 0.30% of the original pool balance. Subordination, excess spread, and overcollateralization provide credit support for these transactions. The underlying collateral for these series consists of U.S. Alternative-A fixed-rate mortgage loans that are secured by first liens on one- to four- family residential properties. Rating Actions GSAA Home Equity Trust 2005-14 Series 2005-14 Rating ------ Class CUSIP To From ----- ----- -- ---- 1A2 362341B32 A AAA 2A2 362341ZU6 AA AAA 2A4 362341B40 A AAA M-1 362341ZW2 BB AA+/Watch Neg M-2 362341ZX0 B AA/Watch Neg M-3 362341ZY8 CCC AA/Watch Neg M-4 362341ZZ5 CCC AA/Watch Neg M-5 362341A25 CCC A-/Watch Neg M-6 362341A33 CCC BB/Watch Neg B-1 362341A41 CC B/Watch Neg B-2 362341A58 CC CCC B-3 362341A82 D CCC GSAA Home Equity Trust 2005-15 Series 2005-15 Rating ------ Class CUSIP To From ----- ----- -- ---- M-1 362341D97 A AA+/Watch Neg M-2 362341E21 BBB AA+/Watch Neg M-3 362341E39 BB AA/Watch Neg M-4 362341E47 B AA-/Watch Neg M-5 362341E54 CCC BBB+/Watch Neg M-6 362341E62 CCC BB/Watch Neg B-1 362341E70 CC BB/Watch Neg B-2 362341E88 CC B/Watch Neg B-3 362341F38 CC CCC Ratings Affirmed GSAA Home Equity Trust 2005-14 Series 2005-14 Class CUSIP Rating ----- ----- ------ 1A1 362341ZS1 AAA 2A1 362341ZT9 AAA 2A3 362341ZV4 AAA GSAA Home Equity Trust 2005-15 Series 2005-15 Class CUSIP Rating ----- ----- ------ 1A1 362341D48 AAA 1A2 362341D55 AAA 2A1 362341D63 AAA 2A2 362341D71 AAA 2A3 362341D89 AAA 2A4 362341F61 AAA HANOVER CAPITAL: Defer Payment of Interest Due September 30 ----------------------------------------------------------- Hanover Capital Mortgage Holdings, Inc. disclosed in a Securities and Exchange Commission filing that on Sept. 9, 2008, the company provided The Bank of New York with notice that, pursuant to the parties' Indenture, the company elected to defer the next payment of interest on certain securities, for the quarterly interest payment due on Sept. 30, 2008. The company has the right, pursuant to the Indenture, upon appropriate notice, to defer the payment of interest for a period of up to four consecutive quarterly interest periods, so long as no Event of Default has occurred and is continuing and the company has timely filed all reports required under the Securities Exchange Act of 1934, subject to certain other restrictions set forth in the Indenture. The Indenture clarifies that if interest payments are being deferred during an Extension Period, this will not constitute an Event of Default under the Indenture. On March 15, 2005, the company completed a private placement of $20 million of trust preferred securities through Hanover Statutory Trust I, a statutory trust formed by the company for that purpose. In connection with the issuance, the company entered into an Amended and Restated Trust Agreement, dated March 15, 2005, among the company, JP Morgan Chase Bank, National Association, Chase Bank USA, National Association, and the administrative trustees named therein, pursuant to which the Securities were issued. The proceeds from the sale of the Securities were used by the Trust to purchase from the company $20,619,000 in aggregate principal amount of the company's junior subordinated notes due 2035. The Notes were issued pursuant to a junior subordinated indenture, dated March 15, 2005, by and between the company and JP Morgan, as trustee. The Bank of New York succeeded JP Morgan as Trustee. About Hanover Capital Based in Edison, N.J., Hanover Capital Mortgage Holdings Inc. (AMEX: HCM) -- http://www.hanovercapitalholdings.com/-- is a mortgage real estate investment trust. The company invests in prime mortgage loans and mortgage securities backed by prime mortgage loans. Going Concern Doubt As reported in the Troubled Company Reporter on April 10, 2008, Grant Thornton LLP, in New York, expressed substantial doubt about Hanover Capital Mortgage Holdings Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm pointed to the company's net loss for the year ended Dec. 31, 2007, which included $76.0 million in impairment losses on mortgage-backed securities. Due to unprecedented turmoil in the mortgage and capital markets during 2007 and into 2008, the company incurred a significant loss of liquidity over a short period of time. The company experienced a net loss of approximately $46.3 million for the six months ended June 30, 2008, and its current operations are not cash flow positive. Additional sources of capital are required for the company to generate positive cash flow and continue operations beyond 2008. The Troubled Company Reporter reported on Aug. 27, 2008, Hanover Capital Mortgage Holdings Inc. disclosed its financial results for the three and six months ended June 30, 2008. At June 30, 2008, the company's consolidated balance sheet showed $62.2 million in total assets, $134.1 million in total liabilities, resulting in a $71.9 million stockholders' deficit. HEIGHTS SUBDIVISION: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: The Heights Subdivision, LLC 521 E. Morehead St, Suite 405 Charlotte, NC 28202 Bankruptcy Case No.: 08-06502 Chapter 11 Petition Date: September 22, 2008 Court: Eastern District of North Carolina (Wilson) Judge: J. Rich Leonard Debtor's Counsel: Trawick H Stubbs, Jr., Esq. efile@stubbsperdue.com Stubbs & Perdue, P.A. P. O. Drawer 1654 New Bern, NC 28563 Tel: (252) 633-2700 Fax: (252) 633-9600 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/nceb08-06502.pdf HELEN SPANGLER: Case Summary & Seven Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Helen Mary Spangler 1140 Martin Avenue San Jose, CA 95126 Bankruptcy Case No.: 08-55408 Chapter 11 Petition Date: September 24, 2008 Court: Northern District of California (San Jose) Debtor's Counsel: Phyllis N. Voisenat, Esq. VoisNetLaw@aol.com Law Offices of Phyllis N. Voisenat 1330 Broadway #1035 Oakland, CA 94612 Tel: (510) 272-9410 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/califnb08-55408.pdf HELLER EHRMAN: Partners to Vote on Firm's Dissolution Friday ------------------------------------------------------------ Bankruptcy Law360 reports that Matthew L. Larrabee, chairman at Heller Ehrman LP, told lawyers and support staff Thursday that partners at the firm will vote on Friday whether to dissolve the firm. The report cited a source at the firm. As reported by the Troubled Company Reporter on September 17, 2008, merger talks involving Heller Ehrman and Mayer & Brown, LLP have fallen through for the second time in just over a month. According to the report, Mayer & Brown backed out citing client and practice conflicts. The TCR also noted that Zach Lowe of The American Lawyer said that a possible collapse of Washington Mutual Corp. could significantly affect the business of Heller Ehrman LLP. Mr. Lowe said Heller Ehrman stands to lose the most if WaMu collapses. The 118-year- old law firm has handled 24 matters for the bank since 2003, including 12 in the last two years, Mr. Lowe said. "Much of the work has involved defending the bank in wage and hour disputes, says Jonathan Hayden, a Heller partner," according to Mr. Lowe's post. The post stated that Heller Ehrman's work for Wamu includes: -- defense in class actions linked to the subprime mortgage crisis, including one brought by a Connecticut hedge fund that purchased $18 million in bonds backed by junk mortgages; and -- corporate matters, including advisory work when Wamu began issuing covered bonds this year and when it acquired mortgage-lending arms of PNC Bank and Fleet Boston Financial Corp. According to the report, other Am Law 200 firms with major WaMu connections include Reed Smith, Simpson Thacher & Bartlett, Goodwin Procter, K&L Gates and Ballard Spahr Andrews & Ingersoll. A report also said that up to 40 lawyers are leaving the firm's intellectual property group. Debra Cassens Weiss of ABA Journalk Law News Now cited a Daily Journal Report stating that the lawyers leaving include two key partners. According to Niraj Chokshi of The Recorder, at least 15 lawyers from the firm are leaving for Covington & Burling. Heller has reportedly lost about 35 partners firmwide since January. According to The Recorder, the firm was one of three on the Am Law 100 to have seen a drop in revenue in 2007. The other two firms were Holland & Knight, of Miami, and Atlanta's Kilpatrick Stockton. Heller previously denied rumors that it may dissolve. Heller Ehrman LLP -- http://www.hewm.com/-- with 650 attorneys and professionals in the United States, Europe and Asia, offers full range of litigation, business and intellectual property services. HEXION SPECIALTY: To Sell Epoxy Resins Biz to Spolchemie -------------------------------------------------------- Hexion Specialty Chemicals, Inc. and Spolchemie entered on Sept. 19, 2008, into a definitive purchase agreement to divest a portion of the company's global specialty epoxy resins business to Spolchemie. The transaction is contingent upon the completion of the company's pending merger with Huntsman Corporation and the receipt of approval from both the U.S. Federal Trade Commission and European Commission. About Hexion Specialty Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. -- http://www.hexionchem.com/-- is a producer of thermosetting resins, or thermosets. Thermosets are a critical ingredient in virtually all paints, coatings, glues and other adhesives produced for consumer or industrial uses. Hexion Specialty Chemicals is controlled by an affiliate of Apollo Management L.P. Hexion Specialty Chemicals Inc.'s balance sheet at March 31, 2008, showed the company had total assets of $4.2 billion and total liabilities of $5.5 billion, resulting in a shareholders' deficit of $1.3 billion. HOME INTERIORS: Details Plans to Split Up; Officers to Submit Bids ------------------------------------------------------------------ Brendan M. Case of The Dallas Morning News reported that Carrollton-Tex. based Home Interiors & Gifts Inc. said Monday that it plans to split itself up. The report also said that executives at the firm are expected to submit bids for some of the company's assets. "Parts of this thing are probably worth more than the whole," said William Snyder, the company's chief restructuring officer. Mr. Snyder said that the new plan could spell more layoffs at the company's headquarters. Under the new plan, the company's U.S., Canada and Puerto Rico business assets will be sold as as single unit. According to Mr. Case, a group connected with Robin Crossman, the company's president and chief executive, will bid for some of these assets. The company's Mexican unit will be offered separately. Domistyle Inc., a Dallas manufacturer and distributor of home fragrances and decor accessories, will be offered as an independent company. The Laredo Candle unit will be offered as a separate entity, although it may be included in the Domistyle sale. Mr. Snyder said Home Interiors' largest shareholder and creditor, Highland Capital Management LP of Dallas, supports the plan. In a press release dated Sept. 22, 2008, the company disclosed that it has requested the U.S. Bankruptcy Court for the Northern District of Texas for authority to employ the investment banking firm Houlihan Lokey Howard & Zukin Capital, Inc. to manage the sale process. About Home Interiors Headquartered in Carrollton, Texas, Home Interiors & Gifts, Inc. -- http://www.homeinteriors.com/-- manufactures, imports and distributes indoor and outdoor home decorative accessories. It was founded by Mary Crowley in 1957. Through its affiliates, the company has a significant presence in Mexico, Puerto Rico, and Canada. Annual revenue in 2007 reached $300 million. When Mary Crowley, died in 1986, her son, Don Carter continued the business operation nearly debt-free. In a leveraged transaction in 1998, private equity firm of Hicks, Muse, Tate, and Furst acquired 66% of the parent company, which resulted in the imposition of more than $500 million in debt on the Debtors. In the face of decreased sales and increased debt load, bondholders canceled their debts in February 2006 in exchange for receiving most of the outstanding equity of the Debtors. About 40% of the goods the Debtors sell are now acquired from manufacturers in China. In the last decade, sales volume in the U.S. has waned, but the Debtors reported that sales in Mexico and Puerto Rico significantly increased. The company and six of its affiliates filed for Chapter 11 protection on April 29, 2008 (Bankr. N.D. Tex. Lead Case No. 08-31961). Andrew E. Jillson, Esq., Cameron W. Kinvig, Esq., Lynnette R. Warman, Esq., and Michael P. Massad, Jr., Esq., at Hunton & Williams, LLP, represent the Debtors in their restructuring efforts. The U.S. Trustee for Region 6 has appointed seven creditors to serve on an Official Committee of Unsecured Creditors. Richard A. Lindenmuth, at Boulder International LLC, is designated as CRO. Munsch Hardt Kopf & Harr PC represents the Committee in these cases. When the Debtors file for protection against their creditors, they listed assets of between $100 million and $500 million and the same range of debts. HRP MYRTLE: Files for Voluntary Chapter 11 Protection ----------------------------------------------------- Dawn McCarty of Bloomberg News reports that HRP Myrtle Beach Holdings, LLC, and its debtor-affiliates asks authority from the U.S. Bankruptcy Court for the District of Delaware to borrow as much as $2 million to help fund operations while it restructures. The senior secured financing, arranged by administrative agent Cerberus Partners, LP, would allow the Debtors to use up to $1,000,000 on an interim basis, according to the report. Myrtle Beach, South Carolina-based HRP Myrtle Beach Holdings, LLC,-- http://www.hrpusa.com/-- wholly owns HRP Myrtle Beach Operations, LLC, which owns and operates rock-n-roll theme park Hard Rock Park under a long term license agreement with Hard Rock Cafe International (USA), Inc. The Debtors filed for Chapter 11 protection separately on Sept. 24, 2008 (Bankr. D. Del. Case No. 08-12193). Daniel J. DeFranceschi, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger represent the Debtors in their restructuring efforts. The lead Debtor listed between $100,000,000 and $500,000,000 in assets and between $100,000,000 and $500,000,000 in debts in its filing. ICFQ DESARROLLOS: Files Amended Disclosure Statement ---------------------------------------------------- ICFQ Desarrollos Carraizo Inc. delivered to the U.S. Bankruptcy Court for the District of Puerto Rico an Amended Disclosure Statement explaining its Amended Plan of Reorganization. Means for Implementation of the Plan After the payment of its Administrative Expense Claims, Tax Claims and Secured Claims, the Debtor will satisfy its General Unsecured Claims to the extent of available funds arising from the proceeds of its Mansiones de Carraizo Project and Debtor's Claims and Causes of Action. Treatment of Claims Under the Plan, the Debtor proposes to pay Administrative Expense Claims, Professional Fee Claims, and Priority Tax Claims in full. The Debtor discloses that it does not anticipate any Class 1 Priority Claims. However, a holder of such claim will be able to get an amount equal to its claim on the later of the effective date and the date such priority claim becomes an Allowed Priority Claim, or as soon as practicable. The Class 2 Claim, consisting of $2,375,410 of the principal and $635,000 of interest, arises from the Debtor's construction loan from Banco Bilbao Vizcaya Argentaria and is secured by the land of the Mansiones de Carraizo and Mirador del Lago projects. BBVA's secured claim will be paid by available proceeds. If the claim will not be satisfied in full, the claim will be treated as a Class 3 claim and will be paid as such. Class 3 Claims, consisting of all Allowed General Unsecured Claims, are estimated to be approximately $1,302,396. Holders of these claims will receive their pro rata share of the funds after payment of Administrative Expense Claims, Priority Tax Claims, and Classes 1 and 2. These claims will be paid in full within 24 months from the effective date from funds originating from the Debtor's Mansiones de Carraizo project, including the expected $1,500,000 to $2,000,000 profit and from remaining funds arising from the Debtor's Claims and Causes of Action. Equity holders under Class 4 will retain their interest in the Debtor. A full-text copy of the Amended Plan of Reorganization is available for free at http://researcharchives.com/t/s?32c0 About ICFQ Based Caguas, Puerto Rico, real estate developer ICFQ Desarrollos Carraizo, Inc., filed for Chapter 11 protection on July 3, 2008 (Bankr. D. P.R. Case No. 08-04351). Charles A. Cuprill, P.S.C., Law Offices, serves as the Debtor's bankruptcy counsel. When the Debtor filed for protection from its creditors, it listed estimated assets of $55,985,918 and debts of $3,687,843. IL LUGANO: Seeks to Employ Neligan Foley as Bankruptcy Counsel -------------------------------------------------------------- IL Lugano LLC asks the U.S. Bankruptcy Court for the District of Connecticut for permission to employ Neligan Foley LLP as bankruptcy counsel. The Firm will, among other things, advise the Debtor in its Chapter 11 case, in the potential sales of assets, financing options, as well as the preparation of necessary documents. The Firm will charge the Debtor these hourly rates: Patrick J. Neligan, Jr. $500 Douglas J. Buncher $425 David Ellerbe $425 Stefanie Klein $300 Nancy L. Ribaudo $150 Carolyn Perkins $130 Kathy Gradick $130 The Debtor assures the Court of the Firm's disinterestedness. According to the Debtor, the Firm has no connection with the Debtor's creditors, the U.S. Trustee, or any other party with an actual or potential interest in the Debtor's Chapter 11 case. The Firm has no other interest adverse to the Debtor or its estate, the Debtor says. Headquartered in Fort Lauderdale, Florida, IL Lugano LLC -- http://www.illugano.com/-- owns a hotel. The company filed for chapter 11 protection on Aug. 29, 2008 (Bankr. D. Conn. Case No. 08-50811). James Berman, Esq., at Zeisler and Zeisler, represents the Debtor. When the Debtor filed for protection from its creditors, it listed assets between $50 million and $100 million and debts between $1 million and $10 million. IMPAC: Moody's Cuts Ratings on 194 Tranches from 18 Transactions ---------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 194 tranches from 18 Alt-A transactions backed by Impac originated collateral. Of these, 28 remain on review for further possible downgrade. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, Alt-A mortgage loans. 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. Moody's Investors Service has also published actions on the underlying ratings of the insured notes. The rating on a security that is guaranteed or "wrapped" by a financial guarantor is the higher of a) the rating of the guarantor or b) the published underlying rating. The underlying ratings reflect the intrinsic credit quality of the notes in the absence of the guarantee. The current ratings on the notes are consistent with Moody's practice of rating insured securities at the higher of the guarantor's insurance financial strength rating and any underlying rating that is public. Complete rating actions are: Issuer: Bear Stearns Asset Backed Securities I Trust 2006-IM1 -- Cl. A-1, Downgraded to Baa3 from Aaa -- Cl. A-2, Downgraded to Baa2 from Aaa -- Cl. A-3, Downgraded to Baa3 from Aaa -- Cl. A-5, Downgraded to Baa2 from Aaa -- Cl. A-6, Downgraded to Baa3 from Aaa -- Cl. A-7, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-1, Downgraded to Ca from Ba2 -- Cl. M-2, Downgraded to Ca from B3 -- Cl. M-3, Downgraded to C from B3 -- Cl. M-4, Downgraded to C from B3 -- Cl. M-5, Downgraded to C from Caa1 -- Cl. M-6, Downgraded to C from Ca -- Cl. M-7, Downgraded to C from Ca -- Cl. M-8, Downgraded to C from Ca Issuer: CWABS Asset-Backed Certificates Trust 2005-IM1 -- Cl. M-1, Downgraded to A3 from Aa3 -- Cl. M-2, Downgraded to Ba2 from Baa1 -- Cl. M-3, Downgraded to B3 from Ba3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to Ca from B2 -- Cl. M-5, Downgraded to Ca from B3 -- Cl. M-6, Downgraded to C from Caa1 -- Cl. M-7, Downgraded to C from Ca Issuer: CWABS Asset-Backed Certificates Trust 2005-IM2 -- Cl. A-4, Downgraded to Aa1 from Aaa -- Cl. M-1, Downgraded to Baa3 from Aa3 -- Cl. M-2, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to Ca from B1 -- Cl. M-4, Downgraded to C from B3 -- Cl. M-5, Downgraded to C from Caa1 -- Cl. M-6, Downgraded to C from Ca -- Cl. M-7, Downgraded to C from Ca Issuer: CWABS Asset-Backed Certificates Trust 2005-IM3 -- Cl. A-3, Downgraded to A1 from Aaa -- Cl. A-3M, Downgraded to A2 from Aaa -- Cl. A-4, Downgraded to A3 from Aaa -- Cl. M-1, Downgraded to B1 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to Ca from Ba3 -- Cl. M-3, Downgraded to C from B3 -- Cl. M-4, Downgraded to C from Caa1 -- Cl. M-5, Downgraded to C from Ca -- Cl. M-6, Downgraded to C from Ca Issuer: CWABS Asset-Backed Certificates Trust 2006-IM1 -- Cl. A-2, Downgraded to Baa2 from Aaa -- Cl. M-1, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to C from B2 -- Cl. M-3, Downgraded to C from B3 -- Cl. M-4, Downgraded to C from Ca -- Cl. M-5, Downgraded to C from Ca -- Cl. M-6, Downgraded to C from Ca Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2005-IM1 -- Cl. A-3, Downgraded to Baa2 from Aaa -- Cl. M-1, Downgraded to B3 from Aa2 -- Cl. M-2, Downgraded to Ca from A2 -- Cl. M-3, Downgraded to C from Baa2 -- Cl. M-4, Downgraded to C from Baa3 -- Cl. M-5, Downgraded to C from Ba1 Issuer: Impac CMB Trust Series 2005-6 Collateralized Asset-Backed Bonds, Series 2005-6 -- Cl. 1-A-1, Downgraded to Aa3 from Aaa; under review for further Possible Downgrade Financial Guarantor: Ambac Assurance Corporation (Aa3, Under Review for further Possible Downgrade) -- Underlying Rating: Downgraded to B1 from Aaa -- Cl. 1-A-2, Downgraded to Aa3 from Aaa; under review for further Possible Downgrade Financial Guarantor: Ambac Assurance Corporation (Aa3, Under Review for further Possible Downgrade) Underlying Rating: Downgraded to B1 from Aaa -- Cl. 1-M-1, Downgraded to Caa2 from Ba2 -- Cl. 1-M-2, Downgraded to Caa3 from B1 -- Cl. 1-M-3, Downgraded to Ca from B3 -- Cl. 1-M-4, Downgraded to Ca from Caa1 -- Cl. 1-M-5, Downgraded to Ca from Caa1 -- Cl. 1-B-1, Downgraded to Ca from Caa2 -- Cl. 1-B-2, Downgraded to Ca from Caa2 Issuer: Impac CMB Trust Series 2005-7 -- Cl. A-1, Downgraded to Aa3 from Aa2; under review for further Possible Downgrade Financial Guarantor: Ambac Assurance Corporation (Aa3, Under Review for further Possible Downgrade) -- Underlying Rating: Downgraded to B1 from Aaa -- Cl. A-2, Downgraded to Aa3 from Aa2; under review for further Possible Downgrade Financial Guarantor: Ambac Assurance Corporation (Aa3, Under Review for further Possible Downgrade) Underlying Rating: Downgraded to B1 from Aaa -- Cl. M-1, Downgraded to Caa2 from Ba1 -- Cl. M-2, Downgraded to Ca from B1 -- Cl. M-3, Downgraded to Ca from B3 -- Cl. M-4, Downgraded to Ca from Caa1 -- Cl. M-5, Downgraded to Ca from Caa1 -- Cl. M-6, Downgraded to Ca from Caa2 -- Cl. B, Downgraded to Ca from Caa3 Issuer: Impac CMB Trust Series 2005-8 -- Cl. 1-A, Downgraded to Aa3 from Aaa -- Cl. 1-A-IO, Downgraded to Aa3 from Aaa -- Cl. 1-AM, Downgraded to Baa2 from Aaa -- Cl. 1-M-1, Downgraded to Ba3 from Aa3 -- Cl. 1-M-2, Downgraded to B2 from Baa1 -- Cl. 1-M-3, Downgraded to Caa2 from Ba2 -- Cl. 1-M-4, Downgraded to Ca from B2 -- Cl. 1-M-5, Downgraded to Ca from B3 -- Cl. 1-M-6, Downgraded to Ca from B3 Issuer: Impac Secured Assets Corp. Mortgage Pass-Through Certificates, Series 2005-2 -- Cl. A-1, Downgraded to Baa3 from Aa1 -- Cl. A-1M, Downgraded to Ba3 from A1 -- Cl. A-1W, currently Aa3; on review for further Possible Downgrade Financial Guarantor: Ambac Assurance Corporation (Aa3, Under Review for further Possible Downgrade) -- Underlying Rating: Downgraded to Ba2 from A1 -- Cl. A-2C, Downgraded to A3 from Aa3 -- Cl. A-2D, Downgraded to Ba2 from A1 -- Cl. M-1, Downgraded to Ca from B2 -- Cl. M-2, Downgraded to Ca from B3 -- Cl. M-3, Downgraded to Ca from B3 -- Cl. M-4, Downgraded to Ca from Caa1 -- Cl. M-5, Downgraded to C from Ca -- Cl. M-6, Downgraded to C from Ca -- Cl. M-7, Downgraded to C from Ca -- Cl. M-8, Downgraded to C from Ca Issuer: Impac Secured Assets Corp. Mortgage Pass-Through Certificates, Series 2006-1 -- Cl. 1-A-1-1, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. 1-A-1-2, Downgraded to Caa3 from Ba1; Placed Under Review for further Possible Downgrade -- Cl. 1-A-2B, Downgraded to Caa3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. 1-A-2C, Downgraded to Caa3 from Ba1; Placed Under Review for further Possible Downgrade -- Cl. 1-M-1, Downgraded to C from B3 -- Cl. 1-M-2, Downgraded to C from B3 -- Cl. 1-M-3, Downgraded to C from Caa1 -- Cl. 1-M-4, Downgraded to C from Caa1 -- Cl. 1-M-5, Downgraded to C from Caa1 -- Cl. 1-M-6, Downgraded to C from Caa1 -- Cl. 1-M-7, Downgraded to C from Ca -- Cl. 1-M-8, Downgraded to C from Ca -- Cl. 1-B, Downgraded to C from Ca Issuer: Impac Secured Assets Corp. Mortgage Pass-Through Certificates, Series 2006-2 -- Cl. 1-A1-1, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. 1-A1-2, Downgraded to Caa3 from Ba3; Placed Under Review for further Possible Downgrade -- Cl. 1-A2-B, Downgraded to Caa3 from Ba2; Placed Under Review for further Possible Downgrade -- Cl. 1-A2-C, Downgraded to Caa3 from Ba3; Placed Under Review for further Possible Downgrade -- Cl. 1-M-1, Downgraded to C from B3 -- Cl. 1-M-2, Downgraded to C from B3 -- Cl. 1-M-3, Downgraded to C from Caa1 -- Cl. 1-M-4, Downgraded to C from Caa1 -- Cl. 1-M-5, Downgraded to C from Ca -- Cl. 1-M-6, Downgraded to C from Ca -- Cl. 1-M-7, Downgraded to C from Ca -- Cl. 1-M-8, Downgraded to C from Ca Issuer: Impac Secured Assets Corp. Mortgage Pass-Through Certificates, Series 2006-3 -- Cl. A-1, currently Aa3; on review for further Possible Downgrade Financial Guarantor: Ambac Assurance Corporation (Aa3, Under Review for further Possible Downgrade) -- Underlying Rating: Downgraded to Caa1 from Ba3; Placed Under Review for further Possible Downgrade -- Cl. A-4, Downgraded to A3 from Aa3 -- Cl. A-2, Downgraded to B2 from A1; Placed Under Review for further Possible Downgrade -- Cl. A-3, Downgraded to B2 from A1; Placed Under Review for further Possible Downgrade -- Cl. A-5, Downgraded to B2 from A1; Placed Under Review for further Possible Downgrade -- Cl. A-6, Downgraded to B2 from A1; Placed Under Review for further Possible Downgrade -- Cl. A-7, Downgraded to Caa1 from Ba3; Placed Under Review for further Possible Downgrade -- Cl. A-2M, Downgraded to Caa2 from Ba3; Placed Under Review for further Possible Downgrade -- Cl. A-3M, Downgraded to Caa2 from Ba3; Placed Under Review for further Possible Downgrade -- Cl. A-4M, Downgraded to B1 from Ba2; Placed Under Review for further Possible Downgrade -- Cl. A-5M, Downgraded to Caa2 from Ba2; Placed Under Review for further Possible Downgrade -- Cl. A-6M, Downgraded to Caa2 from Ba3; Placed Under Review for further Possible Downgrade -- Cl. M-1, Downgraded to Ca from B3 -- Cl. M-2, Downgraded to Ca from B3 -- Cl. M-3, Downgraded to C from B3 -- Cl. M-4, Downgraded to C from Caa1 -- Cl. M-5, Downgraded to C from Caa1 -- Cl. M-6, Downgraded to C from Caa1 -- Cl. M-7, Downgraded to C from Ca -- Cl. M-8, Downgraded to C from Ca -- Cl. B, Downgraded to C from Ca Issuer: Impac Secured Assets Corp. Mortgage Pass-Through Certificates, Series 2006-4 -- Cl. A-1, Downgraded to Ba1 from A1 -- Cl. A-2B, Downgraded to Ba1 from A1 -- Cl. A-2C, Downgraded to Ba1 from A2 -- Cl. A-M, Downgraded to B3 from Ba3; Placed Under Review for further Possible Downgrade -- Cl. M-1, Downgraded to Ca from B3 -- Cl. M-2, Downgraded to C from B3 -- Cl. M-3, Downgraded to C from B3 -- Cl. M-4, Downgraded to C from Caa1 -- Cl. M-5, Downgraded to C from Caa1 -- Cl. M-6, Downgraded to C from Ca -- Cl. M-7, Downgraded to C from Ca -- Cl. M-8, Downgraded to C from Ca -- Cl. B, Downgraded to C from Ca Issuer: Impac Secured Assets Corp. Mortgage Pass-Through Certificates, Series 2006-5 -- Cl. 1-A1-B, Downgraded to Baa2 from Aaa -- Cl. 1-A1-C, Downgraded to Baa2 from Aaa -- Cl. 1-AM, Downgraded to B2 from Ba2 -- Cl. 1-M-1, Downgraded to Caa3 from B2 -- Cl. 1-M-2, Downgraded to Ca from B3 -- Cl. 1-M-3, Downgraded to C from B3 -- Cl. 1-M-4, Downgraded to C from B3 -- Cl. 1-M-5, Downgraded to C from B3 -- Cl. 1-M-6, Downgraded to C from Caa1 -- Cl. 1-M-7, Downgraded to C from Ca -- Cl. 1-M-8, Downgraded to C from Ca -- Cl. 1-B, Downgraded to C from Ca Issuer: Impac Secured Assets Corp. Mortgage Pass-Through Certificates, Series 2007-1 -- Cl. A-1, Downgraded to Aa2 from Aaa -- Cl. A-2, Downgraded to Baa2 from Aaa -- Cl. A-3, Downgraded to Baa2 from Aaa -- Cl. A-M, Downgraded to Ba2 from Baa3 -- Cl. M-1, Downgraded to Caa1 from B1 -- Cl. M-2, Downgraded to Ca from B2 -- Cl. M-3, Downgraded to Ca from B2 -- Cl. M-4, Downgraded to C from B3 -- Cl. M-5, Downgraded to C from B3 -- Cl. M-6, Downgraded to C from Ca -- Cl. M-7, Downgraded to C from Ca -- Cl. M-8, Downgraded to C from Ca -- Cl. B, Downgraded to C from Ca Issuer: Impac Secured Assets Corp. Mortgage Pass-Through Certificates, Series 2007-2 -- Cl. 1-A1-A, Downgraded to Aa1 from Aaa -- Cl. 1-A1-B, Downgraded to A1 from Aaa -- Cl. 1-A1-C, Downgraded to A1 from Aaa -- Cl. 1-AM, currently Aa3; on review for further Possible Downgrade Financial Guarantor: Ambac Assurance Corporation (Aa3, Under Review for further Possible Downgrade) Underlying Rating: Downgraded to Caa1 from Ba3 -- Cl. 1-M-1, Downgraded to Ca from B1 -- Cl. 1-M-2, Downgraded to C from B2 -- Cl. 1-M-3, Downgraded to C from B3 -- Cl. 1-M-4, Downgraded to C from B3 -- Cl. 1-M-5, Downgraded to C from B3 -- Cl. 1-M-6, Downgraded to C from Ca -- Cl. 1-M-7, Downgraded to C from Ca -- Cl. 1-M-8, Downgraded to C from Ca -- Cl. 1-B, Downgraded to C from Ca Issuer: Impac Secured Assets Corp. Mortgage Pass-Through Certificates, Series 2007-3 -- Cl. M-1, Downgraded to Caa1 from B1 -- Cl. M-2, Downgraded to Ca from B1 -- Cl. M-3, Downgraded to Ca from B1 -- Cl. M-4, Downgraded to C from B1 -- Cl. M-5, Downgraded to C from B1 -- Cl. M-6, Downgraded to C from B2 -- Cl. M-7, Downgraded to C from Ca -- Cl. M-8, Downgraded to C from Ca -- Cl. B, Downgraded to C from Ca INTERMET CORP: Lenders Worried on Assets Deterioration ------------------------------------------------------ Hazel Bledsoe Smith at The Lake Gazette reports that commercial lenders expressed concern about the deterioration of Intermet Corp.'s financial assets. According to The Lake Gazette, court documents indicate that since filing for bankruptcy protection on Aug. 12, Intermet has been working with major customer representatives to negotiate an accommodation agreement. A federal judge agreed on Sept. 8 to extend a hearing to Sept. 16, on whether or not to liquidate the assets of Intermet rather than allow the firm to reorganize its debt. The extension was requested by Maryland commercial lender Capital Source Finance LLC. Commercial lenders agreed to the Sept. 16 extension, the report says. The Lake Gazette relates that Matt Barr, the attorney for Intermet, told the court that "Intermet has agreements in principal with most of its major customers." Court documents indicate that Intermet is proposing a 21-month price agreement with its suppliers while it "endeavors consolidation of its operation as it transitions through filing and getting out of bankruptcy through a merger sale or through a standalone plan of reorganization." The court, The Lake Gazette says, ordered Intermet to pay for utility services and allowed Intermet "to provide a deposit equal to two weeks of utility service." The report states that the court also ordered the utility companies to continue to supply services to Intermet. According to the report, Monroe City Clerk Gary Osbourne said that he received a check from Intermet for $246,751 on Sept. 8. Monroe City had to eventually write off $123,000 in utilities fees when Intermet filed for bankruptcy in 2004. The report states that City Administrator Jim Burns said receiving the utility payment from Interment was very important "since this amount was pre-petition utilities and could have been written off should Intermet be granted the Chapter 11 petition." According to The Lake Gazette, Mr. Burns said this was a good sign that Intermet wanted to stay in Monroe City. About Intermet Corp. Based in Fort Worth, Texas, Intermet Corp. designs and manufactures machine precision iron and aluminum castings for the automotive and industrial markets. The company and its debtor- affiliates filed for chapter 11 protection on Aug. 12, 2008 (D. Del. Case Nos. 08-11859 to 08-11866 and 08-11868 to 08-11878). Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Michael E. Comerford, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as the Debtors' counsel. James E. O'Neill, Esq., Laura Davis Jones, Esq. and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' co-counsel. Kurtzman Carson Consultants LLC serves as the Debtors' claims, notice and balloting agent. An Official Committee of Unsecured Creditors has been formed in this case. When the Debtors filed for protection from their creditors, they listed assets of between $50 million and $100 million and debts of between $100 million and $500 million. This is the Debtors' second bankruptcy filing. Intermet Corp., along with its debtor-affiliates, filed for Chapter 11 protection on Sept. 29, 2004 (Bankr. E.D. Mich. Case Nos. 04-67597 through 04-67614). Salvatore A. Barbatano, Esq., at Foley & Lardner LLP, represents the Debtors. When the Debtors filed for protection from their creditors, they listed $735,821,000 in total assets and $592,816,000 in total debts. Intermet Corporation emerged from the first bankruptcy filing in November 2005. J&D RESTAURANT: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: J&D Restaurant Holdings, LLC 3676 East Industrial Way West Palm Beach, Fl 33404 Bankruptcy Case No.: 08-23958 Type of Business: The Debtor operates a chain of restaurants. Chapter 11 Petition Date: September 24, 2008 Court: Southern District of Florida (West Palm Beach) Judge: Paul G. Hyman, Jr. Debtor's Counsel: Bradley S. Shraiberg, Esq bshraiberg@kpkb.com Kluger, Peretz, Kaplan & Berlin, P.L. 2385 NW Executive Center Dr. #300 Boca Raton, FL 33431 Tel: (561) 443-0801 Fax: (561) 998-0047 http://www.kpkb.com/ 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/flsb08-23958.pdf JEFFERSON COUNTY: Former Official Pleads Guilty in Debt Probe ------------------------------------------------------------- Martin Z. Braun of Bloomberg News reports that former Jefferson County, Alabama, commissioner Mary Buckelew, 62, pleaded guilty to obstruction of justice in a federal corruption investigation of bond sales that financed the county's almost-bankrupt sewer system. According to the report, Ms. Buckelew lied about receiving $4,000 in gifts, including shoes and a purse, from an investment banker whose firm received millions from bond and interest-rate swap deals involving the county, U.S. Attorney Alice Martin said. Ms. Buckelew, who served on the Jefferson County commission from 1990 until November 2006, admitted in a plea agreement that she knew the banker was trying to influence her, according to the report. A Montgomery, Alabama, investment banker, who wasn't identified by name, bought the items and, reportedly, also paid for a $1,400 spa treatment for Ms. Buckelew on a trip to arrange the bond deals for the sewer system, Ms. Martin said. Buckelew, who served on a county committee that oversaw five bond sales and four interest-rate swaps, denied the banker purchased the gifts for her when she appeared before a federal grand jury in August 2008, Martin said according to the report. Ms. Buckelew, according to the report, faces up to 20 years in jail and a fine of up to $250,000, Martin said. The Jefferson County faces two debt payment deadlines by the end of the month. Sept. 30 is the deadline by which the County must make payments for its $3.2 billion sewer debt. A forbearance agreement with New York-based JPMorgan Chase & Co. and Bayerische Landesbank for GO warrants the county sold in 2001 also expires on Sept. 30. The agreement delays a $20 million payment that was due Sept. 15 to holders of about $270 million in general obligation debt. About Jefferson County Jefferson County has its seat in Birmingham. It has a population of 660,000. It ended its 2006 fiscal year with a $42.6 million general fund balance, according to Standard & Poor's. The Birmingham firm of Bradley Arant Rose & White, represents Jefferson County. Porter, White & Co. in Birmingham is the county's financial adviser. A bankruptcy by Jefferson County stands to be the largest municipal bankruptcy in U.S. history. It could beat the record of $1.7 billion, set by Orange County, California in 1994. Jefferson County has $4.6 billion in overall debt, including $3.2 billion in sewer bonds. * * * As reported by the Troubled Company Reporter on Sept. 19, 2008, Standard & Poor's Ratings Services lowered its rating three notches on Jefferson County, Alabama's series 1997A, 2001A, and 2003 B-1-A through series 2003 B-1-E, as well as its series 2003 C-1 through 2003 C-10 sewer system revenue bonds to 'C' from 'CCC'. At the same time, S&P revised the CreditWatch implications on the bonds to negative from developing. As reported by the TCR on July 22, 2008, Moody's continues to review the Caa3 rating on Jefferson County's (AL) $3.2 billion in outstanding sewer revenue warrants for possible downgrade. The TCR Reported on Aug. 4, 2008 that Moody's downgraded to Ba3 from Baa1 the rating on Jefferson County's (AL) $270 million in outstanding general obligation debt. That time, Moody's also downgraded: to B1 from Baa2 the county's $86.7 million in outstanding lease revenue warrants issued through the Jefferson County Public Building Authority; to B1 from Baa2 the county's $996.8 million in limited obligation school warrants secured by sales taxes; to B1 from Baa1 the rating on $20.3 million in special tax bonds issued by the Birmingham- Jefferson Civic Center Authority (BJCCA) partially secured by the county's occupational tax; and to B1 from Baa2 the rating on $40.86 million in debt issued by BJCCA partially secured by a beverage tax and lodging tax levied and the collected by the county. The sewer revenue bonds continue to be rated Caa3, on review for possible downgrade. JEFFERSON COUNTY: S&P Slashes Underlying Rating to 'D' from 'B' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its underlying rating on Jefferson County, Alabama's series 2001B general obligation warrants to 'D' from 'B' and removed its rating from CreditWatch with negative implications where it was placed on Aug. 26, 2008, due to the county's failure to make a principal payment on the bank warrants when due on Sept. 15, 2008, in accordance with the terms of the standby warrant purchase agreement. Although the county and the banks entered into a forbearance agreement which effectively delayed payment under the standby warrant purchase agreement until the end of September 2008, Standard & Poor's lowers its rating on an issue to 'D' when payments on an obligation are not made on the date due in accordance with the terms of the documents. The rating for the county's parity general obligation warrants remains at 'B' and on CreditWatch with negative implications. If the principal and interest payments on other series are not made when due, the ratings on those series would also be lowered to 'D'. JP MORGAN CHASE: Fitch Affirms Rating on $2.6MM Class LV-2 at 'BB' ------------------------------------------------------------------ Fitch Ratings has placed these class of J.P. Morgan Chase Commercial Mortgage Securities Corp., series 2006-FL2, on Rating Watch Negative: -- $29.3 million class L at 'BBB-'. In addition, Fitch affirmed these classes: -- $306.2 million class A-1 at 'AAA'; -- $298.2 million class A-2 at 'AAA'; -- Interest-only class X-2 at 'AAA'; -- $33 million class B at 'AA+'; -- $28.1 million class C at 'AA'; -- $19.5 million class D at 'AA-'; -- $22 million class E at 'A+'; -- $22 million class F at 'A'; -- $19.5 million class G at 'A-'; -- $24.4 million class H at 'BBB+'; -- $24.4 million class J at 'BBB'; -- $22 million class K at 'BBB-'; -- $7.4 million class LV-1 at 'BB+'; -- $2.6 million class LV-2 at 'BB'. Interest-only class X-1 has paid in full. The Rating Watch Negative placement is due to upcoming maturity risk associated with one loan: the SOMA Portfolio (1.9%). The affirmations reflect generally stable performance demonstrated by the remainder of the pool since Fitch's last rating action. The SOMA Portfolio loan (1.9%) is secured by four hotels located in San Francisco, California, with a total of 308 rooms. At issuance, the borrower planned to reposition the portfolio by performing over $7.4 million in renovations, to be completed by 2008. An initial cash equity contribution of approximately 33% was made. The loan is scheduled to mature Oct. 11, 2008. Three extension options are available; however, their exercise is subject to a minimum debt service coverage ratio of 1.20 times, 1.30x, and 1.40x for the first, second, and third options, respectively. The loan does not currently meet the performance hurdle required for extension. If the borrower cannot extend or refinance the loan, it would be in default and could be transferred to the special servicer, which could result in interest shortfalls to class L. Fitch will revisit the ratings as additional information becomes available upon loan maturity. Of the 10 loans remaining in the pool, three (24.6%) are considered Fitch loans of concern, including the SOMA Portfolio. The largest Fitch loan of concern is Marina Village (13.4%), which consists of 34 low- to mid-rise office properties located within a master-planned development in Alameda, California. Year-end 2007 reported occupancy stood at 76%, compared to the 79.6% leased at issuance. The borrower has thus far been unable to re-lease large blocks of space vacated prior to issuance, and the Alameda submarket remains challenging, with an average vacancy rate of approximately 30%. The sponsor had invested approximately 30% cash equity in the property at issuance, and a portion of the $23.5 million B-2 note future funding facility remains available for leasing costs and capital expenditures. The loan is in its first of three extension options, with an extended maturity date of Feb. 9, 2009. The 1111 Marcus Avenue loan (9.3%), collateralized by a mixed-use property in New Hyde Park, New York, is also a Fitch loan of concern. Occupancy at the property has increased slightly, to 84.1% as of Dec. 31, 2007 from 80% at issuance. However, actual servicer-reported expenses for 2007 were higher than anticipated at issuance, resulting in a current Fitch stressed DSCR of 1.06x on the trust balance, compared to 1.40x at issuance. All other loans within the pool are performing at or above expectations at issuance. The RREEF Silicon Valley Office Portfolio (16.8%) is the largest loan in the transaction. It is secured by a portfolio of 119 office and industrial properties located throughout four submarkets of Silicon Valley, California. Occupancy across the portfolio has increased slightly since issuance, to 77% as of Dec. 31, 2007 from 71.4%. The loan had a Fitch stressed DSCR of 1.46x on the trust balance A-3 note, compared to 1.30x at issuance. The loan matures on Nov. 9, 2008, and has three one-year extension options. The second largest loan is secured by 697,151 square feet of in- line and leased fee space corresponding to the Lehigh Valley Mall (16.3%), a regional mall located in Whitehall, Pennsylvania, which at issuance comprised 1,049,504 sf of total space. In October 2007, a lifestyle center opened at the property, which consists of approximately 120,000 sf of additional space. The loan has experienced stable performance since issuance. The loan is within the second of three one-year extension options, and has an extended maturity date of Aug. 9, 2009. The Doubletree Metropolitan collateralizes the third largest loan. Located in Midtown Manhattan, the property is a 755-room full- service hotel built in 1961 and renovated in 2005. Performance has improved since issuance, with year-end 2007 occupancy rising to 95.3% from 94.4% at issuance, and the Fitch stressed DSCR on the whole loan increasing to 2.56x from 2.17x at issuance. The loan is within its first of three one-year extension options, with an extended maturity date of May 9, 2009. All but one (9.3%) of the loans mature by 2008. However, every loan within the pool has one or more one-year extension options remaining. All pooled whole loans, A notes, or senior participations of whole loans in the trust maintain investment- grade shadow ratings. As of the September 2008 remittance, the pool's collateral balance has paid down 42.8% to $858.7 million, from $1.501 billion at issuance. Five loans have paid in full since issuance and 10 loans remain outstanding. The transaction has a modified pro rata pay structure whereby 80% of principal is paid to classes A-1 and A-2, and the remaining 20% is paid to the other classes pro rata. The transaction switches to sequential pay in the event of default or when the transaction has been reduced by 80% from issuance. JPMORGAN TRUST: S&P Trims Ratings on 13 Certificate Classes ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 13 classes of mortgage pass-through certificates from JPMorgan Mortgage Trust 2006-S4, a residential mortgage-backed securities transaction backed by U.S. prime jumbo mortgage loan collateral. The downgrades reflect S&P's opinion that projected credit support for the affected classes is insufficient to maintain the previous ratings, given its current projected losses. During the August 2008 distribution period, severe delinquency levels continued to increase steadily, as the dollar amount of loans in foreclosure increased to $12.1 million from $9.654 million in July 2008. In addition, the dollar amount of loans classified as real estate owned increased to $3.295 million in August from $2.987 million in July 2008. S&P assumed that 50% of the 60-day delinquent loans and 100% of the 90-day delinquent loans would be in foreclosure within five months. S&P then added this amount to the current foreclosure amount, since this provided a forecast that is more consistent with the current delinquency performance trend. S&P's new lifetime projected losses for this U.S. RMBS transaction, as a percentage of the original pool balance, is now 1.60%. Subordination provides credit support for this transaction. The underlying collateral for this deal consists of fixed-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 no more than 30 years. Ratings Lowered JPMorgan Mortgage Trust 2006-S4 Mortgage pass-through certificates Rating ------ Class CUSIP To From ----- ----- -- ---- A-2 46629SAB8 A AAA A-3 46629SAC6 A AAA A-4 46629SAD4 A AAA A-5 46629SAE2 A AAA A-7 46629SAG7 A AAA A-8 46629SAH5 A AAA A-9 46629SAJ1 A AAA A-10 46629SAK8 A AAA A-11 46629SAL6 A AAA A-12 46629SAM4 A AAA A-13 46629SAN2 A AAA A-P 46629SAQ5 A AAA M 46629SAR3 BB AA JUDITH ROGAN: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Judith K. Rogan 206 Scarborough Ct. Valparaiso, IN 46385 Bankruptcy Case No.: 08-23158 Chapter 11 Petition Date: September 24, 2008 Court: Northern District of Indiana (Hammond Division) Debtor's Counsel: Michael C. Moody, Esq. mmoody@orourkeandmoody.com O'Rourke and Moody 55 West Wacker Drive, Suite 1400 Chicago, IL 60601 Tel: (312) 849-2020 Estimated Assets: $1 million to $10 million Estimated Debts: $50 million to $100 million The Debtor did not file a list of 20 largest unsecured creditors. KAYDON CORP: S&P Withdraws 'BB+' Rating at Company's Request ------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its ratings on Kaydon Corp., including the 'BB+' long-term corporate credit rating, at the company's request. This follows the completion of the redemption of Kaydon's 4% contingent convertible senior subordinated notes on Sept 19, 2008. KELSEY GLEN: Case Summary & 11 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Kelsey Glen, LLC 521 E. Morehead St, Ste. 405 Charlotte, NC 28202 Bankruptcy Case No.: 08-06503 Type of Business: The Debtor sells houses. Chapter 11 Petition Date: September 22, 2008 Court: Eastern District of North Carolina (Wilson) Judge: J. Rich Leonard Debtor's Counsel: Trawick H Stubbs, Jr., Esq. efile@stubbsperdue.com Stubbs & Perdue, P.A. P. O. Drawer 1654 New Bern, NC 28563 Tel: (252) 633-2700 Fax: (252) 633-9600 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/nceb08-06503.pdf KIDSPEACE INC: Moody's Trims Debt Rating to 'B3'; On Watchlist -------------------------------------------------------------- Moody's Investors Service has downgraded KidsPeace Inc.'s debt rating to B3 from B1; the rating remains on Watchlist for further possible downgrade. The rating applies to $60.2 million of Series 1998 and Series 1999 Bonds issued by the Lehigh County General Purpose Authority. The rating downgrade is primarily attributable to the decline in liquidity and material deterioration in financial performance through the interim period. The Watchlist for further possible downgrade is attributable to the liquidity risk stemming from weakened financial performance and the possibility that KidsPeace may violate certain financial covenants, triggering an event of default that could possibly lead to an acceleration of the bonds. Legal Security: The bonds are secured by a gross revenues pledge of the obligated group members consisting of KidsPeace Corp, KidsPeace National Centers for Kids, Inc., KidsPeace National Centers for Kids of Pennsylvania, Inc., and KidsPeace National Hospital, Inc. Violation of 1.1 times rate covenant requires a consultant, and violation of a 1.0 times rate covenant is an event of default. Interest Rate Derivatives: None. Strengths * Sizable human service provider with geographical diversification, with operations in twelve states, including Maine, Georgia, Pennsylvania, Indiana, New Jersey and Minnesota * Following the hold on admissions in the fourth quarter of FY 2007, KidsPeace changed senior management and has taken actions to improve safety, training, and best clinical practices. Census has started to increase with a 3% growth in September, 2008 Challenges * Continued decline in census, deterioration in operating performance following a 41% year over year decline in census at two of KidsPeace's residential facilities following a ten- week hold on admissions imposed by the Pennsylvania Department of Welfare and the closure of a dual diagnosis program in March, 2008, following a client incident, resulting in a material decline in financial performance beginning in the second half of FY 2007 that has continued into the current fiscal year. Although, on a year-to-date basis, the organization has accumulated a $3.9 million operating loss through the first seven months of FY 2008 all Pennsylvania residential programs are now fully licensed by the Pennsylvania Department of Welfare and accredited by the Joint Commission * Potential covenant violations in FY 2008 could potentially trigger an event of default, leading to an acceleration of the bonds * Weakened liquidity measures, with cash levels declining to $9.4 million through seven months of FY 2008, down from $13.9 million at FYE 2007. Continued operational challenges and under funded pension obligations will continue to temper liquidity growth. * Very high debt burden, with cash-to-debt of 14.2% * Despite organizational efforts to reduce dependency on Pennsylvania operations, Pennsylvania still represents 31% of KidsPeace's total operating revenues. Continued payer pressures are present in Georgia and New Jersey Recent Results/Developments The downgrade to B3 from B1 is primarily due to the decline in census, and resultant material decline in financial and liquidity metrics that began in the fourth quarter of FY 2007 that has accelerated in the interim FY 2008 period. Following two record years of strong financial performance in FY 2005 and FY 2006, KidsPeace recorded $6.7 million operating income (7.9% margin) through the first six months of FY 2007, continuing a trend of strong revenue growth and a shift towards higher reimbursement rates attributable to higher intensity clients. However, the increased acuity resulted in a higher frequency of prone restraints that led to a ten-week hold on admissions imposed by the Pennsylvania Department of Welfare in September, 2007. KidsPeace recorded a $3.4 million operating income (2.1% margin) in FY 2007. Although KidsPeace recorded 9% growth in operating revenues through the first six months of FY 2007, the hold on admissions and subsequent decline in census reduced revenue growth to 4% in FY 2007. KidsPeace generated $12.7 million of operating cash flow (7.7% margin) in FY 2007, down from $15.5 million (9.6% margin) in FY 2006. Peak annual debt service coverage declined to 2.2 times in FY 2007, down from 2.7 times in FY 2006, and debt-to-cash flow increased to 6.6 times, up from 5.2 times. A client incident In March, 2008 resulted in the closure of KidsPeace's dual diagnosis program and further suppressed admissions and financial performance. Through seven months of FY 2008, revenues have declined 17.8% over prior year period and expenses have declined 8.8% following a reduction in force. KidsPeace has recorded a $3.9 million operating loss through seven months of FY 2008 (-4.8% margin), down from a $5.9 million income (6.0% margin) in the prior year period. Operating cash flow declined materially to $1.3 million (1.6% margin) through seven months of FY 2008, down from $11.1 million (11.4% margin) through seven months of FY 2007. Despite the decline in census, management reports that census has increased 3% since the beginning of September and expects census numbers to continue to increase during the historically strong census months of the fourth quarter. Although Moody's expects census numbers to continue to increase, Moody's remains concerned that the referral patterns from out of state may not recover to historical levels or recover in time to improve financial performance to meet financial covenants. Following two strong years of financial performance, unrestricted cash and investments grew to $13.9 million (32 days) at FYE 2007, up from $7.3 million (17 days) at FYE 2006. Unrestricted cash has since declined to $9.4 million through the first seven months of FY 2008. Cash-to-debt increased to 21% at FYE 2007, up from 10% at FYE 2006 but has declined to 14.2% through the first seven months of FY 2008. The violation of a financial covenant in FY 2008 increases the risk of triggering an event of default, potentially leading to an acceleration of the 1998 and 1999 bonds. Based on performance through seven months of FY 2008, KidsPeace is expected to violate the 1.0 times rate covenant. While Moody's do not believe that KidsPeace is in immediate danger of missing a debt payment ($3.3 is in a sinking fund), Moody's believes that if the system fails to improve financial performance to meet the 1.0 times rate covenant, the likelihood of filing for bankruptcy protection increases substantially. Outlook What could change the rating-UP Future upward rating movement will largely depend on a resumption of historical census patterns, improved financial performance, and improvements in balance sheet and liquidity What could change the rating--DOWN Continued decline in financial performance, violation of a 1.0 times rate covenant, leading to further declines in liquidity. Key Indicators Assumptions & Adjustments: -- Based on financial statements for KidsPeace Inc. -- First number reflects audit year ended December 31, 2006 -- Second number reflects audit year ended December 31, 2007 -- Investment returns normalized at 6% unless otherwise noted * Total operating revenues: $160.9 million; 164.6 million * Moody's-adjusted net revenue available for debt service: $17.2 million; 14.3 million * Total debt outstanding: $68.4 million; $66.1 million * Maximum annual debt service (MADS): $6.4 million; $6.4 million * MADS Coverage with reported investment income: 2.6 times; 2.2 times * Moody's-adjusted MADS Coverage with normalized investment income: 2.7 times; 2.7 times * Debt-to-cash flow: 5.2 times; 6.6 times * Days cash on hand: 18 days; 32 days * Cash-to-debt: 10%; 21% * Operating margin: 4.1%; 2.1% * Operating cash flow margin: 9.6%; 7.7% Rated Debt (debt outstanding as of December 31, 2006) -- Series 1998, 1999 ($60.2 million outstanding) rated B3 LAS VEGAS SANDS: $5.25BB Jumbo Loan in Jeopardy Report Says ----------------------------------------------------------- Euroweek.com reports that the fate of the $5.25 billion jumbo loan for Venetian Macau Ltd., the casino developer owned by Las Vegas Sands Corp., was thrown into doubt after Lehman Brothers Holdings, Inc., filed for bankruptcy. According to Las Vegas Sands' 10-Q filing on Aug. 11 with the Securities and Exchange Commission, Las Vegas Sands was in the process of arranging "up to $5.25 billion of secured financing, the proceeds from which would be used to refinance the amount currently outstanding under the Macao credit facility and to provide incremental borrowings to fund the Four Seasons Macao, the development of parcels 5 and 6, and to continue funding [] other Cotai Strip development projects. The Company expects to complete this refinancing in 2008. Additional financing may be required to complete the development and construction of parcels 7, 8 and 3." The Credit Agreement was dated May 25, 2006 and was entered among VML US FINANCE LLC, as the Borrower; VENETIAN MACAU LIMITED, as the Company; and Lenders GOLDMAN SACHS CREDIT PARTNERS L.P., LEHMAN BROTHERS INC., and CITIGROUP GLOBAL MARKETS, INC., as Co- Syndication Agents, Joint Lead Arrangers and Joint Bookrunners; THE BANK OF NOVA SCOTIA, as Administrative Agent; and BANCO NACIONAL ULTRAMARINO, S.A. and SUMITOMO MITSUI BANKING CORPORATION as Co-Documentation Agents. A copy of the Agreement is available for free at: http://ResearchArchives.com/t/s?32c1 Lehman Brothers Holdings, Inc., filed for chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No.: 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. The September 15 Chapter 11 filing does not include Lehman Brothers, Inc. Vegas Sands Corp. owns and operates The Venetian Resort Hotel Casino, and The Palazzo Resort Hotel Casino. With the opening of The Palazzo, these Las Vegas properties, situated on or near the Las Vegas Strip, form an integrated resort. The Company also owns and operates the Sands Macao, the first Las Vegas-style casino in Macao, China, pursuant to a 20-year gaming subconcession. On August 28, 2007, under the same gaming subconcession as the Sands Macao, the Company opened The Venetian Macao Resort Hotel, which anchors the Cotai Stript, a master-planned development of resort properties in Macao, China. * * * As reported by the Troubled Company Reporter on Sept. 24, 2008, Standard & Poor's Ratings Services lowered its corporate credit and issue-level ratings on the Las Vegas Sands Corp. family of companies, including Las Vegas Sands LLC, its Venetian Casino Resort LLC subsidiary, and affiliate VML U.S. Finance LLC, by one notch. The corporate credit rating was lowered to 'B+' from 'BB-'. The corporate credit and issue-level ratings remain on CreditWatch with negative implications, where they were initially placed on July 16, 2008. "The downgrade reflects increased concerns around LVSC's liquidity position, given current issues in the capital markets, continued weak performance on the Las Vegas Strip, and the potential for a significant slowdown of the growth trajectory in Macau, all while the company seeks a significant amount of capital to fund its development pipeline," explained Standard & Poor's credit analyst Ben Bubeck. LEHMAN BROTHERS: Claims to Trade in SecondMarket Auction Platform ----------------------------------------------------------------- SecondMarket, the largest marketplace for illiquid assets, said on Sept. 25 that effective immediately it will begin trading bankruptcy claims created by the Lehman Brothers Holdings Inc. Chapter 11 filing. With $639 billion in assets and more than 100,000 creditors, the Lehman Brothers bankruptcy is the largest in the U.S. to date. SecondMarket (formerly known as Restricted Stock Partners) opened to trading of bankruptcy claims in June 2008 when it acquired the Trade Receivable Exchange, Inc. (T-REX), the largest online auction platform serving the bankruptcy claims market. "We purchased T-REX earlier this year in order to accelerate our expansion into claims trading," CEO Barry E. Silbert said. "These are unprecedented times in the financial and credit markets. We expect that bankruptcy claims trading is going to explode, particularly as a result of the Lehman Brothers Chapter 11 filing." To address the growth in claims trading, SecondMarket also announced that John A. McKenna, Jr., a member of SecondMarkets Board of Directors, will play an active role in managing that business. Prior to founding SecondMarket, Silbert worked with McKenna at Houlihan Lokey Howard & Zukin, one of the worlds leading bankruptcy financial advisors. At Houlihan Lokey, McKenna served as the Co-Head of the Financial Restructuring Group in the eastern region. Silbert and McKenna worked on many of the countrys largest bankruptcy cases, including Enron, U.S. Airways and Delta Air Lines. "Bankruptcies often have a ripple effect," according to Mr. McKenna. "When a major company like Lehman Brothers files for Chapter 11, the financial condition of its creditors is often materially affected. By providing them with an opportunity to sell their claims, instead of waiting for a recovery at the end of the bankruptcy case, SecondMarket plays an important role in providing the liquidity needed to restore stability to financial markets and the economy as a whole." SecondMarket expects to trade a variety of unsecured claims resulting from the Lehman Brothers bankruptcy, including structured product, trade, lease and contract rejection, employment and other unsecured claims. Lehman Brothers listed total liabilities of $613 billion in its bankruptcy filing. Creditors can have access to the SecondMarket online trading platform and list their claims for sale at no cost. In addition to bankruptcy claims, SecondMarket trades auction-rate securities, restricted securities in public companies and other illiquid assets. SecondMarkets online trading platform has more than 1,500 members, including global financial institutions, hedge funds, private equity firms, mutual funds, and other institutional and accredited investors that collectively manage over $250 billion in assets available for investment. About SecondMarket Founded in 2004, New York-based SecondMarket is the world's largest marketplace for illiquid assets, such as auction-rate securities, bankruptcy claims and restricted securities in public companies. SecondMarkets online trading platform has more than 1,500 members, including global financial institutions, hedge funds, private equity firms, mutual funds, and other institutional and accredited investors that collectively manage over $250 billion in assets available for investment. SecondMarket is a wholly owned division of Green Drake, Inc. (Member FINRA/SIPC). LUMINENT MORTGAGE: Wants Disclosure Statement Approval by Oct. 10 ----------------------------------------------------------------- Bill Rochelle of Bloomberg News reports that Luminent Mortgage Capital, Inc., and its debtor-affiliates have filed a proposed Chapter 11 reorganization plan and a disclosure statement explaining the Plan with the U.S. Bankruptcy Court for the District of Maryland. The plan carries out an agreement reached with major creditors before the bankruptcy filing. According to the report, the Debtors asked the Court for an accelerated approval of the disclosure statement by Oct. 10, 2008, so there is no default under the loan and plan agreements. Mr. Rochelle says the disclosure statement is silent on the actual or estimated recoveries to general unsecured creditors, which hold $210 million in claims. The pre-bankruptcy agreement calls for unsecured creditors other than Arco Capital Corp. to receive 41% of the stock and $2.75 million, according to the report. Secured lender Arco is owed $28.9 million and is slated to receive 51% of the stock under the plan, according to the report. Arco is to provide $3.2 million in financing for the reorganization and $2.8 million after emerging from bankruptcy, according to the report. The plan is supported by Arco, WaMu Capital Corp. and the holders of all of the convertible notes, according to the report. It cancels existing common and preferred stock and all subordinated debt, according to the report. The Debtors have disclosed in a regulatory filing that on September 5, 2008, due to the nonpayment of principal and interest due, an event of default has occured and may be declared under a Promissory Note agreement dated June 2, 2008. As a result, if an event of default is declared, the lender may declare the amount outstanding of $10.0 million under the agreement to be immediately due and payable including accrued interest. Also on September 5, the Debtors entered into a Post-Petition Loan and Security Agreement with Arco. On September 10, the Bankruptcy Court authorized the Debtors to enter into the Facility and access $400,000. The Facility provides for loans of up to $3.2 million to fund post-petition operations and certain reorganization expenses. Loans under the Facility bear an interest rate of LIBOR plus 2% per annum and the maturity date of the Facility is the earlier of the effective date of a confirmed plan of reorganization, January 31, 2009, or the termination of the commitment by Arco to make loans upon the occurance of an event of default or the acceleration of the outstanding obligations. The Facility is subject to additional terms and conditions, including the adherence to an operating budget, and can be terminated at any time due to an event of default as specified in the Facility at which time all loans plus accrued interest would become immediately due and payable. Repayment of the loan is collateralized by a security interest in property owned by the Debtors or certain of their subsidiaries. About Luminent Mortgage Luminent Mortgage Capital, Inc. (OTCBB: LUMCE) is a real estate investment trust, or REIT, which, together with its subsidiaries, has historically invested in two core mortgage investment strategies. Under its Residential Mortgage Credit strategy, the Company invests in mortgage loans purchased from selected high- quality providers within certain established criteria as well as subordinated mortgage-backed securities and other asset-backed securities that have credit ratings below AAA. Under its Spread strategy, the Company invests primarily in U.S. agency and other highly-rated single-family, adjustable-rate and hybrid adjustable- rate mortgage-backed securities. Luminent and nine subsidiaries filed September 5, 2008, for relief under Chapter 11 of the U.S Bankruptcy Code in the United States Bankruptcy Court for the District of Maryland, Baltimore Division (Lead Case No. 08-21389). Immediately prior to the filing, the Debtor executed a Plan Support and Forbearance Agreement with secured creditor Arco Capital Corp., Ltd., WAMU Capital Corp. and convertible noteholders representing 100% of the outstanding principal amount of its convertible notes. Bloomberg News reports that Luminent listed debts of $484,100,000 and assets of $13,400,000 as of July 31, 2008. Bloomberg adds that 30 largest unsecured creditors are owed a total of $221,800,000. Wells Fargo & Co., indenture trustee for Luminent's 8-1/8% bonds due in 2027, is listed as the largest unsecured creditor. The principal amount owed under the bonds is $90,000,000, Bloomberg says. Luminent and its debtor-subsidiaries continue to operate their business as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. MAIN STREET: Fitch Removes Neg. Watch on 'C' Rated Revenue Bonds ---------------------------------------------------------------- Fitch Ratings downgraded Main Street Natural Gas, Inc. gas project revenue bonds, series 2008A to 'C' from 'CCC'; the Rating Watch Negative assigned on Sept. 15, 2008, is removed. This action takes into account Lehman Brothers Commodity Services failure to deliver gas and Main Street's exercising of its right to terminate the Gas Purchase Agreement. The 'C' rating reflects Fitch's assessment that a default is imminent. LBCS failed to deliver gas for five consecutive days beginning Thursday Sept. 18, which constitutes a Persistent Delivery Default under the GPA granting Main Street the right to terminate the GPA. After such notice, LBCS has two days to cure its failure to deliver. If not cured, the GPA will be terminated. The termination payment date will be Sept. 30. The termination payment date could be moved forward in the event that LBCS files for bankruptcy. An LBCS bankruptcy, together with Lehman Brother's Holdings Inc's filing for bankruptcy on September 15th, would constitute a termination event and require immediate payment by LBCS of the termination amount. It is Fitch's assessment that regardless of the timing of the termination payment, bondholders will not be paid in full on the payment date. Consequently, if the termination amount is not paid by LBCS, pursuant to the GPA, LBHI shall be notified of the non-payment and requested to immediately pay the termination payment as required under the Guaranty. If this chain of events occurs, it is Fitch's assessment that the bonds will be in default and bondholders will become unsecured creditors of LBHI. MAXTEL COMMS: Case Summary & 19 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Maxtel Communications LLC dba Excel Home Phone aka Cabinet Communications aka Local Tel Svc 5959 Westheimer Roadd, Suite 111 Houston, TX 77057 Bankruptcy Case No.: 08-36060 Type of Business: The debtor is a telecommunications company. Chapter 11 Petition Date: September 22, 2008 Court: Southern District of Texas (Houston) Judge: Karen K. Brown Debtor's Counsel: Doug K. Clemons, Esq. The Clemons Law Firm clemonslaw@sbcglobal.net 5959 Westheimer Road, Suite 111 Houston, TX 77057 Tel: (713) 825-1994 Fax: (713) 394-5169 Estimated Assets: $500,000 to $1,000,000 Estimated Debts: $1,000,000 to $10,000,000 A list of the Debtor's 19 Largest Unsecured Creditors is available at http://bankrupt.com/misc/txsb08-36060.pdf METRO ONE: Names MSCM LLP as Independent Public Accountants ----------------------------------------------------------- Metro One Development Inc. disclosed in a Securities and Exchange Commission filing that it has received notice that Danziger Hochman Partners LLP, its independent registered public accountants, would be merging with MSCM LLP, with MSCM LLP as the surviving entity. Effective Sept. 5, 2008, Metro One's board of directors approved the engagement of MSCM LLP as Danziger Hochman Partners LLP's successor to continue as its independent registered public accountant for the fiscal year ended July 31, 2008. The reports of Danziger Hochman Partners LLP on the company's financial statements for either of the fiscal years ended July 31, 2007 or July 31, 2006, did not contain an adverse opinion or a disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope, or accounting principles. In connection with the audit for the past two fiscal year and through Sept. 5, 2008, there were no disagreements with Danziger Hochman Partners LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Danziger Hochman Partners LLP, would have caused Danziger Hochman Partners LLP to make reference to the subject matter of the disagreements in connection with its audit reports on the financial statements. During fiscal years ended July 31, 2008 and 2007 and through Sept. 5, 2008, no one on the company's behalf has consulted with MSCM LLP regarding: (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the company's financial statements, and neither a written report was provided to the company nor oral advice was provided that MSCM LLP concluded was an important factor considered by the company in reaching a decision as to any accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K) or a reportable event (as that term is defined in Item 304(a)(1)(v) of Regulation S-K). The company provided Danziger Hochman Partners LLP with a copy of this current report on Form 8-K and requested it to furnish a letter addressed to the United States Securities and Exchange Commission stating whether or not it agrees with the above disclosures. About Metro One Headquartered in Concord, Ontario, Canada, Metro One Development Inc. (OTC BB: MODI) -- http://www.metro-one.com/-- formerly On The Go Healthcare Inc., is a custom builder and property developer in the greater Toronto area. The company was a value-added reseller of computer and computer-related products, including hardware, peripherals, software and supplies. Going Concern Doubt Metro One Development Inc. has an accumulated deficit of $20,738,346 as of April 30, 2008, and incurred a net loss applicable to common stockholders of $4,678,750 during the nine months ended April 30, 2008. These conditions raise substantial doubt about the company's ability to continue as a going concern. At April 30, 2008, the company's consolidated balance sheet showed $3,787,576 in total assets, $1,519,822 in total liabilities, $1,000,000 in conditionally redeemable preferred stock, and $1,267,754 in total stockholders' equity. Laurus Master Fund Ltd. has notified the company that it is in default under the Amended and Restated Security Purchase Agreement. In addition, the company's payment obligations under the Secured Revolving Note issued pursuant to such Amended and Restated Security Purchase Agreement are currently in default. The company's Secured Revolving Note with Laurus was the company's primary source of financing until March 17, 2008. Without this source of funding, the company no longer has access to capital to allow it to develop its operations. MIAMI-DADE HOUSING: Moody's Trims Revenue Bonds Rating to 'Ba3' --------------------------------------------------------------- Moody's has downgraded the rating assigned to the Housing Finance Authority of Miami-Dade County, Home Ownership Mortgage Revenue Bonds, Series 2006B-2 to Ba3 from Baa2 and removed bonds from Watchlist for Possible Downgrade. In addition, Moody's has also confirmed the Aaa rating on the series 2006B-1. The confirmation of the 2006B-1 bonds apply to the extension of the non-origination redemption date to June 1, 2009 from October 1, 2008. The downgrade and removal from Watchlist for Possible Downgrade of the 2006B-2 bonds is based on a review of the second mortgage loans securing the 2006B-2 bonds. Moody's decision to downgrade the rating on the 2006B-2 bonds was based on the struggling housing market in the Miami-Dade MSA and the credit characteristics of the second mortgage pools for bonds. All of the second mortgages are 0% coupon bonds, with 30 year terms that will begin to amortize five years after issuance, and were issued in connection with the issuance of a first mortgages that were guaranteed by either Fannie Mae, Freddie Mac or GNMA-all of which have strict underwriting guidelines-and securitized into Mortgaged Backed Securities. As a result, the credit characteristics of the second mortgagees are more similar to Prime borrowers. However, the small number of second mortgages that have originated to date, the fact that many of the mortgages have been originated within the last two years, the uncertainty around the expected performance of the second mortgages, and the ongoing housing price declines in the Miami-Dade area are not compatible with a rating at the Baa2 level. Although the mortgage pool supporting the bonds is experiencing a very low delinquency rate, Moody's could not rely on default projections that are based on current experience, given the struggling area's housing market. For the Series 2006B-1 bonds, Moody's has reviewed various cash flow scenarios that demonstrate that sufficient funds will be available to pay debt service and program expenses through the final maturity date. As of September 1, 2008, $10,788,294 of mortgage-backed securities and $2,486,889 of second mortgages have been purchased by the Trustee. MPF CORP: Files for Bankruptcy in Texas and Bermuda --------------------------------------------------- The Board of Directors of MPF Corp. filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas and provisional liquidation in Bermuda. According to the board, substantial cost overruns to complete the MPF 01 Project were identified in June 2008. Together with its advisors and the bondholders, the board has been running a process to sell or refinance the project. The company's bondholders will continue to fund the project at present. A sale and refinancing process have not resulted in any firm offers from potential buyers and the company has exhausted its financial resources. The company stated that the objectives for the filing is to create a framework to achieve the orderly sale of its assets and protect the interests of its creditors. Efforts to sell the project including the equipment contracts continue, the company noted. The company listed assets and debts of between $100 million and $500 million in its filing. The company, Bloomberg says, owes $156.5 million to unsecured creditors, including Norsk Tillitsmann ASA, which is owed $75 million for bond debt; Aker Kvaerner Mh AS, $21 million for trade debt; and Dragados Offshore SA, $16 million for trade debt. The company's consolidated balance sheets at June 30, 2008, showed total assets of $466.32 million and total debts of $399.52 million resulting in a $66.80 million stockholders' equity. Furthermore, the company reported a $8.57 million net loss on total revenue of $0.33 million for the quarter ended June 30, 2008, compared with a $0.76 million net loss on total revenue of $0.30 million for the same period as year ago. "[It] has incurred significant operating losses and cash outflows and has a negative working capital as at June 30, 2008," the company stated in its website. "[Its] available cash and cash equivalents and committed sources of cash are not presently sufficient to fund expected cash requirements through the next 12 months," the company continued. Its ability to continue as a going concern depends upon raising additional financing through borrowings or equity financing. A full-text copy of the company's consolidated balance sheets at June 30, 2008, is available for free at: http://ResearchArchives.com/t/s?32cf Headquartered in Bermuda, MPF Corp. Ltd. -- http://www.mpf- corp.com/ -- engages in deep water oil and gas exploration. The company was established on April 25, 2006. MPF CORP: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: MPF Corp. Ltd. Clarendon House 2 Church Street Hamilton HM11 Bermuda Bankruptcy Case No.: 08-36086 Debtor-affiliate filing separate Chapter 11 petitions: Entity Case No. ------ -------- MPF Holding US LLC 08-36084 Type of Business: The Debtors are into deep water oil and gas exploration. They were established to build tools to improve oil industries develop oilfields. MPF Corp. is based in Bermuda with Norwegian and U.S. subsidiaries -- MPF Corp. (Norway) AS in Oslo and MPF Operating Company LLC in Houston, Texas. MPF Corp. shares are traded on the OTC-list in Norway. See: http://www.mpf-corp.com Chapter 11 Petition Date: September 24, 2008 Court: Southern District of Texas (Houston) Judge: Jeff Bohm Debtor's Counsel: D. Bobbitt Noel, Jr., Esq. bnoel@velaw.com Vinson & Elkins LLP 1001 Fannin, Suite 2300 Houston, TX 77002 Tel: (713) 758-2084 Fax: (713) 615-5222 Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Norsk Tillitsmann ASA Bond Debt $75,000,000 Postboks 1470 Vika 0116 Oslo Norway Tel: +47 22 87 94 00 Fax: +47 22 87 94 10 Aker Kvaerner Mh AS Trade Debt $20,970,140 Serviceboks 413 4604 KRISTIANSAND S Tel: +47 38 05 70 00 Fax: +47 38 05 72 50 Dragados Offshore S.A. Trade Debt $15,948,440 Bajo de la Cabezuela 11510 Puerto Real (Càdiz) Direccion Postal Apartado 2616-1080 Càdiz, Spain Tel: +34 956 470 700 Fax: +34 956 470 729 Cosco Dalian Shipyard Trade Debt $13,200,000 Group Co. Ltd. 80 Zhongyuan Road, Dalian 116113 LIAONING, China Tel: + 86 411 8712 3640 Fax: + 86 411 8760 1056 Pharmadule Emtunga AB Trade Debt $11,795,446 Danvik Center 28 SE-13130 Nacka, Sweden Tel: +46 8 58 899 800 Fax: +46 8 58 899 888 Keppel Shipyard Limited Trade Debt $6,767,976 51 Pioneer Sector 1 628437 Singapore Tel: +65 686 14141 Fax: + 65 686 17767 Hydril Company LP Trade Debt $4,375,266 P.O. Box 73762 Dallas, TX 75397-3762 Tel: (281) 449-2000 Fax: (281) 985-3498 Hamworthy Gas Trade Debt $2,479,721 Solbraaveien 10 NO-1383 Asker, Norway Tel: +47 815 48500 Fax: +47 815 48510 Parisco AS Trade Debt $2,315,958 Karenslyst Allé 12 PO Box 81 NO-0212 Oslo, Norway Tel: +23 27 48 90 Fax: +23 27 48 90 KCA Deutag Drilling Limited Trade Debt $858,889 Minto Drive Altens Industrial Estate Aberdeen AB12 3LW United Kingdom Tel: +44 (0) 1224 299 600 Fax: +44 (0) 1224 895 813 Wartsila Norway AS Trade Debt $697,249 Ship Power P.O. Box 252 5420 RUBBESTADNESET Norway Tel: +47 53 422 500 Fax: + 47 53 422 501 Fjord Technology AS Trade Debt $520,774 P.O. Box 336 1301 SANDVIKA Trade Debt $520,774.76 Norway Tel: +47 67 80 71 20 Fax: +47 67 80 71 21 Det Norske Veritas Trade Debt $398,016 MSHNO080 1322 HoVIK Norway Tel: +47 67 57 99 00 Fax: +47 67 57 99 11 Inocean AS Trade Debt $355,511 Bryggegata 3 NO-0250 OSLO Norway Tel: +22 33 11 31 Fax: +22 33 11 32 L.C. Eldridge Sales Co., Inc. Trade Debt $332,656 9800 Richmond Ave., Suite 325 Houston, Texas 77042 Tel: (713) 780-7200 Fax: (713) 780-9324 Mustang Engineering Trade Debt $186,253 St. Andrews House, West Street Woking Surrey United Kingdom, GU21 6EB Tel: +44 1483 717700 Fax: +44 1483 717701 First Commissioning Service Trade Debt $169,121 Centro Comercial Vista Hermosa 11500 Elpuerto de Santa Maria, Cadiz, Spain Tel: +34 956 873 900 Fax: +34 956 875 420 CLH Invest AS Trade Debt $60,612 Bamseveien 3B 0774 Oslo Norway Tel: +47 95 25 58 49 Dong Nam Precision Ind. Trade Debt $52,937 Co., Inc. 1593-6 Song Jeong-Dong, Gang Seo-Gu Busan, Korea Tel: +82 52 239 0300 Fax: +82 52 238 7213 Panalpina Inc. Trade Debt $39,783 19409 Kenswick Drive Humble, Texas 77338 Tel: (281) 446-0600 MICHAEL MOLLESTON: Case Summary & 11 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Michael Choate Molleston 342 West Lake Road Hattiesburg, MS 39402 Bankruptcy Case No.: 08-51637 Chapter 11 Petition Date: September 24, 2008 Court: Southern District of Mississippi (Gulfport Div. Office) Debtor's Counsel: Douglas Scott Draper, Esq. ddraper@hellerdraper.com 650 Poydras Street, Suite 2500 New Orleans, LA 70130 Tel: 504 581-9595 Fax: 504-525-3761 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor's list of 11 largest unsecured creditors is available for free at: http://researcharchives.com/t/s?32b7 MIRANT CORP: Suspends Program of Returning Cash to Stockholders --------------------------------------------------------------- Mirant Corp. has suspended its program of returning cash to its stockholders after purchasing approximately 110 million of its shares since November 2007 for $3.85 billion. The company now has 156 million basic shares outstanding, having repurchased approximately 43% of its basic outstanding shares over the past 11 months. In November 2007, when Mirant said it would return $4.6 billion of cash to its owners, it stated that it was sizing the amount based on four factors: -- the outlook for the business, -- preserving the company's credit profile, -- maintaining adequate liquidity, including for capital expenditures, and -- maintaining sufficient working capital. "We have continued to evaluate those four factors as we have returned cash," said Edward R. Muller, chairman and chief executive officer of Mirant. "Although we continue to be optimistic about the value of the company and the company has no liquidity issues, our analysis of those four factors under current market conditions has led us to conclude that we should suspend our program of returning cash. A significant consideration in our evaluation is that we recently submitted proposals for new generating plants at our facilities in Northern California in response to a request for offers from Pacific Gas & Electric. If our proposals are accepted, we want to ensure that we have funds for the required capital expenditures, and for other requirements of the business, even if turmoil in the credit markets continues and commodity prices are depressed." Mirant will continue to evaluate its need for cash using the same four factors. About Mirant Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR) -- http://www.mirant.com/-- is an energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant's investments in the Caribbean include three integrated utilities and assets in Jamaica, Grand Bahama, Trinidad and Tobago and Curacao. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of a confirmed Second Amended Plan on Jan. 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtor in its successful restructuring. When the Debtor filed for protection from its creditors, it listed $20,574,000,000 in assets and $11,401,000,000 in debts. The Debtors emerged from bankruptcy on Jan. 3, 2006. On March 7, 2007, the Court entered a final decree closing 46 Mirant cases. Mirant NY-Gen LLC, Mirant Bowline LLC, Mirant Lovett LLC, Mirant New York Inc., and Hudson Valley Gas Corporation, were not included. On Feb. 15, 2007, Mirant NY-Gen filed its Chapter 11 Plan of Reorganization and on Feb. 22 filed a Disclosure Statement explaining that Plan. The Court approved the adequacy of Mirant NY-Gen's Disclosure Statement on March 22, 2007, and confirmed the Amended Plan on May 7, 2007. Mirant NY-Gen emerged from Chapter 11 on May 7, 2007. On July 13, 2007, Mirant Lovett filed its Chapter 11 Plan of Reorganization. The Court confirmed Mirant Lovett's Plan on Sept. 19, 2007. Mirant Lovett emerged from bankruptcy on Oct. 2, 2007. (Mirant Bankruptcy News, Issue No. 138; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) MONEYGRAM INTERNATIONAL: Board Approves Deferred Compensation Plan ------------------------------------------------------------------ MoneyGram International, Inc. disclosed in a Securities and Exchange Commission filing that on Sept. 4, 2008, its Board of Directors approved a 2005 Deferred Compensation Plan for the company's directors, as amended and restated effective as of March 24, 2008. The Directors Deferred Compensation Plan was amended and restated to eliminate the annual stock unit retainer and to freeze new contributions into the Directors Deferred Compensation Plan as of Dec. 31, 2008. The Board also approved an amendment to compensation for non- management directors, upon recommendation by the Human Resources and Nominating Committee, effective January 1, 2009, by eliminating the stock unit retainer and providing an annual cash retainer in the amount of $105,000 paid quarterly in arrears (pro- rated for any partial quarters of service). Due to the amendment and restatement of the Directors Deferred Compensation Plan, no new participants would be added to the Director Deferred Compensation Plan after March 24, 2008. Therefore, for the remainder of 2008, the directors who remained in office after the recapitalization would receive an additional pro rata amount of the value of the 2008 stock unit retainer credited in cash quarterly in arrears pursuant to the Directors Deferred Compensation Plan. Any directors appointed after the recapitalization would receive a pro rata amount of the value of the 2008 stock unit retainer in cash quarterly in arrears. About MoneyGram International Headquartered in Minneapolis, Minnesota, MoneyGram International Inc. (NYSE: MGI) -- http://www.moneygram.com/-- is a global payment services company. The company's major products and services include global money transfers, money orders and payment processing solutions for financial institutions and retail customers. MoneyGram is a New York Stock Exchange listed company with approximately 157,000 global money transfer agent locations in 180 countries and territories. * * * MoneyGram International Inc.'s consolidated balance sheet at June 30, 2008, showed US$7.78 billion in total assets, US$7.93 billion in total liabilities, and US$738.5 million in total mezzanine equity, resulting in a US$885.7 million shareholders' deficit. As reported in the Troubled Company Reporter on April 22, 2008, Moody's Investors Service confirmed MoneyGram International's B1 corporate family rating with a negative rating outlook. This rating confirmation concludes the review for further possible downgrade initiated on Oct. 18, 2007, which was prompted by the company's statement that it had experienced losses to its investment portfolio as a result of the illiquidity in the market for subprime asset backed securities and CDO's. MORGAN STANLEY: Moody's Cuts $5MM Class IVA Notes Rating to Ba1 --------------------------------------------------------------- Moody's Investors Service has downgraded its rating of the notes issued by Morgan Stanley Managed ACES SPC AB SCDO Series 2007-1: Class Description: $45,000,000 Class IA Secured Floating Rate Notes due 2014 -- Prior Rating: Aa3 -- Prior Rating Date: 8/13/2008 -- Current Rating: A2 Class Description: EUR7,500,000 Class IC Secured Floating Rate Notes due 2014 -- Prior Rating: Aa3 -- Prior Rating Date: 8/13/2008 -- Current Rating: A2 Class Description: $100,000,000 Class ID Secured Floating Rate Notes due 2014 -- Prior Rating: Aa3 -- Prior Rating Date: 8/13/2008 -- Current Rating: A2 Class Description: $40,000,000 Class IIIA Secured Floating Rate Notes due 2014 -- Prior Rating: Baa1 -- Prior Rating Date: 8/13/2008 -- Current Rating: Baa3 Class Description: $5,000,000 Class IVA Secured Floating Rate Notes due 2014 -- Prior Rating: Baa2 -- Prior Rating Date: 8/13/2008 -- Current Rating: Ba1 Moody's explained that the transaction, a synthetic CDO, has exposure to Lehman Brothers Holdings Inc., Fannie Mae, Freddie Mac, Ambac, and MBIA in its portfolio of reference obligations. Lehman Brothers Holdings Inc. filed for protection under Chapter 11 of the U.S. Bankruptcy Code on September 15, 2008, Fannie Mae and Freddie Mac were placed into the conservatorship of the U.S. Government on September 8, 2008, and Ambac and MBIA, had their Moody's ratings placed on review for possible downgrade on September 18, 2008. MORGAN STANLEY: Fitch Cuts Rating to 'BB-' on Expected Losses ------------------------------------------------------------- Fitch Ratings downgraded and places on Rating Watch Negative one class of Morgan Stanley Capital I Inc.'s commercial mortgage pass- through certificates, series 1998-XL as: -- $27.8 million class H to 'BB-' from 'BBB-' These classes are affirmed by Fitch: -- $48.8 million class D at 'AAA'; -- $46.3 million class E at 'AAA; -- $11.7 million class F at 'AAA; -- $30 million class G at 'AA'; -- $13.9 million class J at 'C/DR5'. Classes A-1, A-2, A-3, B and C have paid in full. The downgrade is the result of an increase in expected losses from the Charlestowne Mall (24.8%) in St. Charles Ilinoois, a real estate owned asset. As of the September 2008 distribution date, the collateral consisted of one mortgage loan and the REO asset. Through payoffs and amortization, the collateral balance has been reduced 80.7% to $178.4 million from $925.8 million at issuance. The Charlestowne Mall transferred to special servicing when it failed to secure new financing at its anticipated maturity date in April 2005. The property is being marketed at this time and has an interested purchaser. Fitch anticipates that the net proceeds from the sale of the property will result in losses to the trust. The Center America (75.2%) loan is collateralized by a pool of 42 retail assets located in Houston and Dallas, Texas and remains current. The portfolio was acquired by an entity related to the Centro Properties Group. The loan had an Anticipated Repayment Date of June 1, 2008 and did not pay off. Additional interest continues to be deferred and accrue interest until the borrower secures refinancing. The final maturity date is June 1, 2028. While the weighted average (WA) occupancy in the pool has declined slightly to 86.4% from 91.7% at issuance, the debt service coverage ratio at year-end 2007 has risen to 2.40 times compared to 1.37x at issuance, largely due to an increase in rents. Since issuance, NCF has increased 46.7%. Fitch is monitoring the Center America properties for potential damages from Hurricane Ike. MULTIPLAN INC: S&P Affirms 'B+' Ratings; Revises Outlook to Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B+' counterparty credit rating on MultiPlan Inc. and revised the outlook to stable from negative. At the same time, Standard & Poor's affirmed its 'B+' debt ratings on Multiplan's senior secured credit facilities, which consist of a $50 million revolving credit facility due 2012, a $425 million term loan B due 2013, and a $360 million term loan C due 2013. The recovery ratings on these senior secured credit facilities are '3', which indicate a meaningful (50-70%) recovery in the event of a payment default. S&P also affirmed its 'B-' debt rating on MultiPlan's $225 million 10.38% senior subordinated notes due 2016 and assigned it a recovery rating of '6', which indicates a negligible (0%-10%) recovery in the event of a payment default. "The outlook revision to stable from negative is primarily based on the company's sustained cash flow strength, continued debt reduction, and successful integration of Preferred Healthcare Systems Inc.," said Standard & Poor's credit analyst James Sung. As of June 30, 2008, MultiPlan's key credit metrics were in line with expectations, and the PHCS integration was complete from an IT and customer transition perspective. MultiPlan's ratings are based on strengths such as its established competitive position, a very good earnings profile underscored by strong, stable cash flows, and improved scale and diversification via the PHCS integration. These strengths are offset by weaknesses such as its significant debt leverage, a large amount of goodwill and intangibles on the balance sheet, limited overall product scope, and some client concentrations. MultiPlan is the largest independent preferred provider organization in the U.S. It primarily offers network-based cost management solutions to healthcare payers and providers within the 50 states and the District of Columbia. The company generates transaction-based fee income by providing its clients access to its network of discounted provider contracts, as well as providing fee-negotiation services. The company was acquired by The Carlyle Group in 2006. For 2008, S&P expects MultiPlan to generate full-year revenue of $350-360 million and adjusted EBITDA of $180-190 million. S&P also expects debt to capital of 60-70%, debt to EBITDA of 4-5x, and EBITDA interest coverage of 2-3x. S&P could consider a positive outlook over the next 9-12 months if the company's operating results continue to improve and its key credit metrics suggest an overall lower risk profile. NETEFFECT INC: Intel Offers to Buy Firm for $8 Million ------------------------------------------------------ Kirk Ladendorf at American-Statesman reports that NetEffect's CEO Rick Maule said the company received an $8 million acquisition offer from Intel Corp. According to American-Statesman, NetEffect executives said last week the company filed for reorganization in the U.S. Bankruptcy Court for the District of Delaware to set up a buyout by Intel or another potential buyer. Mr. Maule said Intel insisted that NetEffect file for bankruptcy reorganization before the deal is made, American-Statesman relates. Other buyers can bid for NetEffect until the end of September, American-Statesman says, citing Mr. Maule. American-Statesman relates that NetEffect's investors -- including Austin Ventures, Duchossois Technology Partners, Granite Ventures, Infinity Capital, Jato-Tech Ventures, TI Ventures and TL Ventures -- "will be taking a sizable loss" if the Intel deal goes through. According to the report, NetEffect raised $47 million in two investment rounds between 2002 and 2006. Based in Austin, Texas, NetEffect Inc. is engaged in the Data Network Solutions business. The company filed for Chapter 11 reorganization on Aug. 27, 2008 (Bankr. D. Del. 08-12008). Curtis A. Hehn, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtors as counsel. The U.S. Trustee for Region 3 has not appointed creditors to serve on an Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed assets of between $500,000 and $1,000,000, and debts of between $10,000,000 to $50,000,000. NEXIA HOLDINGS: Sells 30,000 Shares of Series C Preferred Stock --------------------------------------------------------------- Nexia Holdings Inc. disclosed in a Securities and Exchange Commission filing that on Sept. 8, 2008, it authorized the delivery to Taylor R. Gourley of 20,000 shares of the Corporation's series C Preferred Stock. The issuance represents compensation for providing or obtaining promotional services for the benefit of the company. The transaction was handled as a private sale exempt from registration under Rule 506 of Regulation D and the Securities Act of 1933. On Sept. 9, 2008, the company authorized the delivery to Shauna Postma of 10,000 shares of the Corporation's Series C Preferred Stock. The issuance represents compensation for services provided to the company as an employee in the accounting department. The transaction was handled as a private sale exempt from registration under Rule 506 of Regulation D and the Securities Act of 1933. 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. 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, and has a working capital deficit of $2,569,857. 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 company'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. It 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. NORTHWEST AIRLINES: Stockholders Approve Delta Air Merger --------------------------------------------------------- Delta Air Lines (NYSE: DAL) and Northwest Airlines (NYSE: NWA) stockholders have overwhelmingly approved the pending merger between the two companies. Delta stockholders approved the issuance of 1.25 shares of Delta common stock for each outstanding share of Northwest stock to be distributed upon closing of the merger, expected later this year. The proposal was approved by approximately 99 percent of the votes cast by Delta stockholders. More than 98 percent of the votes cast by Northwest stockholders were voted in favor of the merger. Delta stockholders also approved an amendment to Delta's broad- based employee compensation program that will allow the company to distribute equity to U.S.-based employees of the combined company shortly after the merger closes. This amendment was approved by approximately 92 percent of the shares of Delta common stock voting on the proposal. "We appreciate that stockholders recognize the benefits the Delta- Northwest merger will offer our company, customers, employees, and the communities we serve. This is another milestone toward completing a merger that brings together two unique airlines with complementary strengths that will offer unmatched global service," said Richard Anderson, CEO of Delta. "Providing both Delta and Northwest employees with the ability to share in the benefits of the merger from the beginning is a prime example of the Delta Difference," Mr. Anderson said. "By distributing equity to our employees we're not only recognizing the critical role employees will play in successfully integrating two customer-focused companies, we're also making good on a longstanding commitment that our employees will share in the success their hard work makes possible." Delta in April announced that it is combining with Northwest in an all-stock transaction to create a premier global airline that will be unmatched in the scope and level of services it offers customers. The new company will be called Delta and will be headquartered in Atlanta. The combined company and its regional partners will provide customers access to more than 390 destinations in 67 countries. Together, Delta and Northwest will have more than $35 billion in aggregate annual revenues, operate a mainline fleet of nearly 800 aircraft, employ approximately 75,000 people worldwide, and have one of the strongest balance sheets in the industry. The merger is subject to the approval of the U.S. Department of Justice, which is expected by the end of the year. Delta and Northwest received unconditional clearance from the European Commission on the airlines' proposed merger on Aug. 6, 2008. Northwest to Guarantee $2.5-Bil. Delta Obligations upon Merger In a regulatory filing with the Securities and Exchange Commission dated September 15, 2008, Northwest disclosed that it entered into a third amendment to its Superpriority Debtor-in- Possession and Exit Credit and Guarantee Agreement dated as of August 21, 2006, with Citicorp USA, Inc., as administrative agent, and other financial institutions. Pursuant to the DIP Amendment, Northwest will be permitted to guarantee approximately $2,500,000,000 of obligations of Delta under certain Delta credit agreements, upon the consummation of Northwest's Merger Agreement with Delta, dated as of April 14, 2008, Michael L. Miller, vice president for Law and secretary at Northwest, said. Additionally, Northwest will agree to make a $300,000,000 prepayment of loans outstanding under the Credit Agreement, Mr. Miller disclosed. The Amended DIP Agreement will mature on the earlier of (i) the final date of consolidation with Delta, and (ii) December 31, 2010. A full-text copy of Northwest's DIP Amendment, filed on Form 8K with the SEC, is available for free at: http://sec.gov/Archives/edgar/data/1058033/000110465908059270/a08- 3810_1ex99d1.htm About Delta Air Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE: DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta flies to Argentina, Australia and the United Kingdom, among others. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan. 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 25, 2007, the Court confirmed the Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. About Northwest Airlines Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents, including Italy, Spain, Japan, China, Venezuela and Argentina. The company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for bankruptcy, they listed $14.4 billion in total assets and $17.9 billion in total debts. On Jan. 12, 2007, the Debtors filed with the Court their chapter 11 plan. On Feb. 15, 2007, the Debtors filed an amended plan and disclosure statement. The Court approved the adequacy of the Debtors' amended disclosure statement on March 26, 2007. On May 21, 2007, the Court confirmed the Debtors' amended plan. That amended plan took effect May 31, 2007. * * * As reported in the Troubled Company Reporter on July 29, 2008, Standard & Poor's Ratings Services lowered its ratings on Northwest Airlines Corp. and subsidiary Northwest Airlines Inc. (both rated B/Negative/--), including lowering the long-term corporate credit ratings on both entities to 'B' from 'B+', and removed the ratings from CreditWatch, where they had been placed with negative implications April 15, 2008. The outlook is negative. The downgrade reflects expected losses and reduced or negative operating cash flow caused by high fuel prices. S&P also lowered our ratings on enhanced equipment trust certificates, in some cases by more than one notch. OLYMPIC SALES: Olympic Boat Closes Retail Centers in Washington --------------------------------------------------------------- Dave Gallagher of the Bellingham Herald (Washington) reports that on Sept. 12, 2008, Olympic Boat Centers closed its retail centers on Squalicum Harbor in Bellingham and at 5955 Guide Meridian. The company's parent, Olympic Sales Inc., filed for Chapter 11 bankruptcy in July and has been closing its retail centers along the West Coast, said Jim Rick, the former general manager for the Whatcom County operations. The closure of the two Olympic Boat Centers in Whatcom County resulted in the layoffs of about 20 employees, Mr. Rick said. "The decision to close and liquidate came as a surprise to me, as did the filing for Chapter 11 (bankruptcy)," Mr. Rick said. "It's disappointing. Over the past 12 years we had some great customers and I really appreciate their support." The report adds that Mr. Rick hopes that a new investor comes in and purchases the Olympic and the Whatcom County facilities. Olympic Sales Inc. -- http://www.boatnut.com/-- sells bayliner, maxum, meridian and trophy boats with 21 west coast locations from San Diego to British Columbia. The company and three of its debtor affiliates filed for Chapter 11 relief on July 17, 2008 (C.D. Calif. 08-15026, 08-15023, 08-15024 and 08-15027). David L. Neale, Esq. and Todd M. Arnold, Esq. at Levene Neale Bender Rankin & Brill, LLP represent the Debtors as counsel. When Olympic Sales Inc. filed for protection from its creditors, it listed Massachusetts Mutal Life Insurance Co. as its largest unsecured creditor, with claims of $6,139,705. OPEN ENERGY: Posts $34.9 Million Losses for Year Ended May 31 ------------------------------------------------------------- Open Energy Corporation posted $34.9 million in net losses on $6.9 million in net revenues for fiscal year ended May 31, 2008, compared with $39.5 million in net losses on $4.3 million in net revenues for fiscal year ended May 31, 2007. The company has incurred losses since its inception totaling approximately $87,388,000 through May 31, 2008. The company has been selling its products at a negative margin to gain market share and is unsure if or when it will become profitable. During the year ended May 31, 2008, the company funded its operations primarily from private sales of equity and debt securities. It has no unused sources of liquidity. Thus, additional equity or debt financing will need to be raised in the near future to continue operations and implement the company's business strategy. In April 2008, Open Energy entered into a loan and security agreement with The Quercus Trust pursuant to which Quercus agreed to loan the company up to $3,500,000 based upon the availability of specified collateral. As of May 31, 2008, Open Energy had borrowed $1,550,000 under this agreement and by June 10, 2008 the remaining $1,950,000 had been funded. The loan and security agreement is collateralized by a general security interest in all of the company's inventory, specified accounts receivable and the company's cash accounts. If the company was to default under the terms and conditions of the loan and security agreement, or if its specified collateral ratios fall below certain levels, Quercus would have the right to accelerate the outstanding indebtedness under the loan and security agreement and foreclose on the collateral. Such a foreclosure would have a material adverse effect on its business, liquidity, results of operations and financial position. At May 31, 2008, Open Energy's balance sheet showed $26.6 million in total assets, $23.5 million in total liabilities, and $3.1 million in shareholders' equity. Solana Beach, Calif.-based Open Energy Corporation (OEGY.OB) -- http://www.openenergycorp.com/-- together with its subsidiaries, engages in the development and commercialization of solar energy products and technologies for power production and water desalination. It offers building-integrated photovoltaic roofing materials for commercial, industrial, and residential markets. Going Concern As reported in the Troubled Company Reporter on Sept 17, 2007, San Diego, Calif.-based Squar, Milner, Peterson, Miranda & Williamson, LLP expressed substantial doubt about Open Energy Corporation's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended May 31, 2007. The auditing firm pointed to the company's recurring losses from operations and working capital deficiency. OSKAR HUBER: Seeks Court Okay for Going-Out-of-Business Sale ------------------------------------------------------------ John Anastasi at Courier Times Now relates that Oskar Huber Fine Furniture Inc. is seeking the permission of the U.S. Bankruptcy Court for the District of New Jersey to hold a going-out-of- business sale in October. Erik Ortiz at The Press of Atlantic City Media Group relates that the sale, once approved by the Court, could last through the first quarter of 2009. Oskar Huber's stores will remain open as the company seeks the Court's permission to hold the sale, Courier TImes says. Tyrone Richardson at The Morning Call reports that Oskar Huber Fine Furniture filed for Chapter 11 protection due to declining sales. According to the Philadelphia Inquirer, Oskar Huber said its sales have been cut nearly in half. Erik Ortiz at The Press of Atlantic City Media Group relates that the company, which merged with D&D Home Furnishings this year, reported a "drastic drop in sales" of up to 50% from pre-merger levels. Oskar Huber also had trouble financing inventory, The Press states. About Oskar Huber Cherry Hill, New Jersey-based Oskar Huber Fine Furniture Inc. operates family-owned home-furnishing stores since 1927. It is the operator of D&D Home Furnishings. Oskar Huber merged with family-owned JD Garber Furniture LP in March. The combined business, DD-OH Family Partners LLC, operates nine locations in the greater Philadelphia and South Jersey area. The Lehigh Valley has a D&D Home Furnishings store in Whitehall Township and outlet in Hanover Township, Lehigh County. Oskar Huber and its debtor-affiliates filed for Chapter 11 bankruptcy protection separately with the U.S. Bankruptcy Court for the District of New Jersey (Lead Case No. 08-28136) on Sept. 22, 2008. Hal L. Baume, Esq., at Fox Rothschild, LLP, represents the Debtors in their restructuring efforts. In its petition, the lead Debtor listed less than $50,000 in estimated assets and less than $50,000 in estimated debts. Court documents indicate that Oskar Huber owes its 31 largest unsecured creditors a total of $6,100,000, which includes $729,504 owed to Sealy Mattress Co. and $308,252 owed to Kohl's Department Stores. PCG SUMMIT-LAKELINE: Court Okays Stutman as Special Counsel ----------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California has granted PCG Summit-Lakeline Station, L.P., permission to employ Stutman, Treister & Glatt Professional Corporation as special reorganization counsel. Jeffrey C. Krause, Eric D. Goldberg, Gregory K. Jones at Stuart, Treister & Glatt will, among other things, advise the Debtor on matters of bankruptcy law and represent the Debtor in proceedings and hearings in the Court. The Debtor assured the Court of the firm's disinterestedness. According to the Debtor, the firm and its attorneys do not hold or represent an interest adverse to the estate and do not have any connection with the Debtor, its estate, its creditors, and other pary in interest. The firm will charge the Debtor these hourly rates: Jeffrey C. Krause $725 Eric D. Goldberg $615 Gregory K. Jones $450 Shareholders $420-$825 Associates $285-390 Of Counsel $450-$625 Paralegals $200 About PCG Summit Costa Mesa, California-based PCG Summit-Lakeline Station, L.P. is a single asset real estate entity. It filed its chapter 11 petition on Aug. 4, 2008 (Bankr. C.D. Calif. Case No. 08-14588). Judge Theodor Albert presides over the case. Eric D. Goldberg, Esq., represents the Debtor in its restructuring efforts. The Debtor estimated both its assets and debts to be between $10,000,000 and $50,000,000. The Debtor's largest unsecured creditor is Diversified Pacific Opportunity Fund, which is owed $10,600,000. PCG SUMMIT-LAKELINE: Files Schedules of Assets & Liabilities ------------------------------------------------------------ PCG Summit-Lakeline Station, L.P., filed with the U.S. Bankruptcy Court for the Central District of California, its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property Unknown B. Personal Property $3.18 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $33,555,060.01 E. Creditors Holding Unsecured Priority Claims $3,174.69 F. Creditors Holding Unsecured Non-priority Claims $12,805,412 ----------- ----------- TOTAL Unknown $46,363,646.70 About PCG Summit Costa Mesa, California-based PCG Summit-Lakeline Station, L.P. is a single asset real estate entity. It filed its chapter 11 petition on Aug. 4, 2008 (Bankr. C.D. Calif. Case No. 08-14588). Judge Theodor Albert presides over the case. Eric D. Goldberg, Esq., represents the Debtor in its restructuring efforts. The Debtor estimated both its assets and debts to be between $10,000,000 and $50,000,000. The Debtor's largest unsecured creditor is Diversified Pacific Opportunity Fund, which is owed $10,600,000. PENN OCTANE: Standard General, et al., Disclose 28.5% Stake ----------------------------------------------------------- Standard General L.P., Standard General Master Fund L.P., Soohyung Kim, and Nicholas J. Singer disclose that they may be deemed to beneficially own 4,444,368 shares of Common Stock in Penn Octane Corp., which represents 28.85% of 15,406,187 shares issued and outstanding. Headquartered in Palm Desert, California, Penn Octane Corporation (NASDAQ:POCC) -- http://www.pennoctane.com/-- formerly known as International Energy Development Corporation buys, transports and sells liquefied petroleum gas for distribution in northeast Mexico, and resells gasoline and diesel fuel. The company has a long-term lease agreement for approximately 132 miles of pipeline, which connects ExxonMobil Corporation's King Ranch Gas Plant in Kleberg County, Texas and Duke Energy's La Gloria Gas Plant in Jim Wells County, Texas, to the company's Brownsville Terminal Facility. Going Concern Doubt As reported in the Troubled Company Reporter on May 4, 2006, Burton McCumber & Cortez, L.L.P., Brownsville, Texas, raised substantial doubt about Penn Octane's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. Burton McCumber pointed to the company's insufficient cash flow to pay its obligations when due, inability to obtain additional financing because substantially all of the company's assets are pledged or committed to be pledged as collateral on existing debt, existing credit facility may be insufficient to finance its liquefied petroleum gas and Fuel Sales Business, and working capital deficiency. Penn Octane posted $1,436,000 in net loss on revenues of $17,019,000 for the quarter ended June 30, 2008, compared to $289,000 in net loss on $32,981,000 in revenues for the same period last year. At June 30, 2008, the company has $54,832,000 in total assets; $50,826,000 in total liabilities and minority interest, including $39,664,000 in current liabilities; and $4,006,000 in stockholders' equity. Penn Octane disclosed in an August regulatory filing with the Securities and Exchange Commission, that as of June 30, 2008, its Rio Vista Energy Partners, L.P. unit was not in compliance with all the covenants under Rio Vista's TCW Credit Facility although no notice of default has been given to Rio Vista. Rio Vista and TCW are currently negotiating an amendment to the TCW Credit Facility which would, among other things, allow Rio Vista to regain compliance. As a result of the non-compliance, the Company has classified the TCW Credit Facility as a current liability as required by general accepted accounting principles. The TCW Credit Facility is a $30,000,000 senior secured credit facility available to Rio Vista Penn LLC with a maturity date of August 29, 2010. The TCW Credit Facility is secured by a first lien on all of the company's oil and natural gas producing properties and related assets in the state of Oklahoma, and associated production proceeds. The interest rate is 10.5%, increasing to 12.5% if there is an event of default. Payments under the TCW Credit Facility are interest-only until December 29, 2008. The TCW Credit Facility carries no prepayment penalty. Rio Vista ECO LLC (an indirect, wholly-owned subsidiary of Rio Vista and the direct parent of Rio Vista Penny and Rio Vista GO), Rio Vista GO, GO and MV have each agreed to guarantee payment of the Notes payable to the lenders under the TCW Credit Facility. In a letter accompanying the company's financial report, Burton McCumber said conditions continue to exist which raise substantial doubt about the company's ability to continue as a going concern. PEOPLES COMMUNITY: To Sell Assets to CenterBank & CBSEF ------------------------------------------------------- Peoples Community Bancorp, Inc. disclosed in a Securities and Exchange Commission filing that it and its wholly owned subsidiary, Peoples Community Bank, entered into a Purchase and Assumption Agreement with CenterBank and The Community Bank Strategic Equity Fund, LLC. The Agreement provides for the purchase of a substantial portion of the company's assets, as well as the assumption of all of the company's deposits and certain other liabilities by the Buyer. The Agreement also provides for the assumption of all of the liabilities with respect to the company's trust preferred obligations by a savings and loan holding company to be organized by the Buyer, CBSEF and other investors, who will become a party to the Agreement when formed. The Agreement provides that the Buyer will pay a 5.5% premium on the deposits of the company, excluding brokered deposits, deposits of government units and other public entities, secured investor custodial accounts, and certificates of deposit that are subject to a repurchase agreement or otherwise secured by collateral. the company's other assets to be sold in the transaction, at net book value, include real and personal property, cash, investment securities, certain commercial, residential and consumer loans, and certain other assets. As part of the proposed transaction, the company will retain certain assets, including loans greater than 60 consecutive days past due as of the closing date of the transaction or that become classified, as specified in the Agreement, between March 31, 2008, and the closing date, and certain liabilities. In addition, the Agreement provides that if at any time between the closing date and the second anniversary of the closing date, any consumer loans specified in the Agreement become more than 60 consecutive days past due or become subject to regulatory downgrade, the company may be required to repurchase the past-due or downgraded loans from the Buyer. The parties agreed to maintain an escrow account to secure the company's Repurchase Obligation until the second anniversary of the closing date. The escrow account will be funded by the company at the closing of the proposed transaction with $2.0 million in cash and a pledge of certain loans that the company will continue to hold after the closing, which pledge shall continue until the amount in the escrow account reaches $5.0 million as a result of the loan payments received on such pledged loans. The purchase price of the assets and the deposits being sold by the company, which will be calculated as of the close of business on the closing date, will be offset against the amount owed by the company to the Buyer for assuming the company's liabilities pursuant to the Agreement. It is currently anticipated that the aggregate balance of the company's liabilities will exceed the estimated purchase price. To the extent the company does not have sufficient funds available at the time of the closing, the company and the company have contingency plans, which may include selling certain loans that will not be purchased by the Buyer or obtaining a third-party loan, to be secured by the unsold loans, for the difference. In connection with the consummation of the proposed transaction, the Buyer and the company will enter into a participation agreement pursuant to which the Buyer will buy a 50% participation interest in certain commercial loans to be retained by the company upon consummation of the transaction. The Buyer's participation interest will be senior in right to payment under the loans until the Buyer's participation interest is paid in full. In addition, the Buyer and the company will enter into a servicing agreement pursuant to which the Buyer, at the company's request, will service the loans retained by the company in the transaction, including any loans subject to the Participation Agreement, and any consumer loans that the company repurchases from the Buyer as result of the company's Repurchase Obligation described above, for a period of up to two years after the closing date. Completion of the proposed transaction is subject to the approval of the Office of Thrift Supervision and other regulatory authorities. In order to complete the transaction and as part of the required regulatory approvals, the Regulatory Authorities will need to authorize and approve the reorganization of the Buyer following the completion of the various steps. Prior to the purchase of the assets and assumption of the liabilities of the company by the Buyer, the Buyer, CBSEF and other investors will organize Buyer Parent and the Buyer will convert from an Ohio- chartered bank to a federal savings association. The current stockholders of the Buyer will exchange their stock in the Buyer for stock in Buyer Parent, pursuant to a stock exchange agreement to be entered into, and Buyer Parent will acquire all of the equity interests of the Buyer thereby becoming its sole stockholder. The proposed transaction as structured also requires the approval of the company's stockholders and the satisfaction of closing conditions. The conditions required to complete the transaction include, that within 30 days of the date of the Agreement, unless this period is extended for an additional 15 days pursuant to the Agreement, the Buyer and CBSEF must deliver to the company and the company must deliver to the Buyer reasonably satisfactory evidence that they will be able to perform their respective obligations under the Agreement. For the Buyer and CBSEF, this includes possessing the requisite capital and committed financial capability to consummate the reorganization of the Buyer, and to purchase the company's assets and assume the company's liabilities. For the company, this means the ability to pay the cash amount due to the Buyer and Buyer Parent at closing for the difference between the company's liabilities and the estimated purchase price. In addition, there may not be a material adverse change in the business or condition, financial or otherwise, of the company. A material adverse change of the company, may include, without limitation, a decline in the company's deposits (excluding brokered deposits, deposits of government units and other public entities, secured investor custodial accounts, and certificates of deposit that are subject to a repurchase agreement or otherwise secured by collateral) by more than 10% from the aggregate amount of deposits as of the date of the Agreement. The transaction contemplated by the Agreement is expected to close during the fourth quarter of 2008, subject to the satisfaction of the required closing conditions as set forth in the Agreement. Upon consummation of the transaction and the assumption of the company's deposits by the Buyer, the company will no longer be accepting deposits and will cease normal banking operations. Until the closing, the company will continue its operations in the normal course and all of its deposits will continue to be insured to the fullest extent provided by law. the company continues to exceed all applicable regulatory capital requirements and continues to be well capitalized under the regulatory framework for prompt corrective action. Headquartered in West Chester, Ohio, Peoples Community Bancorp Inc. (NasdaqGM: PCBI) -- http://www.pcbionline.com/-- is the holding company for Peoples Community Bank, a federally chartered savings bank with 19 full service offices in Butler, Warren and Hamilton counties in southwestern Ohio and Dearborn and Ohio counties in southeastern Indiana. Going Concern Doubt As reported in the Troubled Company Reporter on May 9, 2008, Cincinnati-based BKD, LLP, expressed substantial doubt about Peoples Community Bancorp 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 report of the company's independent registered public accounting firm contained an explanatory paragraph as to the company's ability to continue as a going concern primarily due to the company's current lack of liquidity to repay its $17.5 million obligation under an outstanding line of credit due June 30, 2008. On April 2, 2008, the company and Peoples Community Bank each consented to the terms of Cease and Desist Orders issued by the Office of Thrift Supervision (OTS). The Orders prohibit Peoples Community Bank from paying cash dividends to the company without the prior consent of the OTS and the company will only be able to rely upon existing cash and cash equivalents as sources of its liquidity. Without the ability to rely on dividends from Peoples Community Bank, the company will require funds from other capital sources to meet its obligations such as restructuring the current line of credit or replacing the current line of credit. The company was not in compliance with one of the loan covenants at Dec. 31, 2007, and at March 31, 2008, and the lender has the ability to accelerate all outstanding amounts upon notice and the passage of 30 days. The company said it is currently negotiating resolution of these issues with the current lender and other parties. PHOENIX DEMOLOTION: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Phoenix Demolition Company and Salvage, Inc. 1912 N. Rosemont Mesa, AZ 85205 Bankruptcy Case No.: 08-11891 Type of Business: The Debtor provides demolition services. Chapter 11 Petition Date: September 8, 2008 Court: District of Arizona (Phoenix) Debtor's Counsel: Thomas G. Luikens, Esq. Thomas.Luikens@azbar.org Ayers & Brown, P.C. 4227 N. 32nd ST., 1st Floor Phoenix, AZ 85018-4757 Tel: (602) 468-5700 Total Assets: $1,044,625 Total Debts: $1,837,843 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/azb08-11891.pdf PILGRIM'S PRIDE: Stops Trading on NYSE After Shares Drop 38% ------------------------------------------------------------ Choy Leng Yeong at Bloomberg News reports that trading in Pilgrim's Pride Corp. shares were halted on the New York Stock Exchange on Wednesday after the stock dropped 38%. Emily Fredrix at The Associated Press relates that the shares fell $3.90, or 38%, "to $6.36 by the time trading was halted on volume of nearly 13.2 million shares, compared to normal volume of nearly 2.2 million." According to Lauren Etter at The Wall Street Journal, trading of the stock halted at $6.36 per share, "after dipping to a 52-week intraday low of $6.06, compared with its 52- week intraday high of $35.98." Carl Gutierrez at Forbes states that investors kept running fast from Pilgrim's Pride on Thursday, sending its share price plummeting 39.9%, or $2.54, to $3.82, in morning trading. The stock drop was prompted by investor concerns that the U.S. financial crisis would limit the company's access to credit, Reuters relates. Pilgrim's Pride said in a statement that, based on preliminary results, it notified its lenders that it expects to report a significant loss in the fiscal fourth quarter ending Sept. 27, 2008. The company attributed the anticipated loss to high feed- ingredient costs, continued weak pricing, and demand for breast meat, and the significant negative impact of hedged grain positions during the quarter. Bloomberg relates that Pilgrim's Pride posted a $52.8 million loss in the three months through June 28, 2008, as corn and soybean prices increased the costs of raising poultry. According to Bloomberg, the loss was the company's third in a row. Pilgrim's Pride has cut weekly processing capacity by 5% to stem losses, Bloomberg states. As a result of the expected loss, Pilgrim's Pride released a statement, telling its lenders that it does not expect to be in compliance with its fixed-charge coverage ratio covenant under its principal credit facilities as of the fiscal year ending Sept. 27, 2008, but it expects to be in compliance with all other covenants as of the end of the 2008 fiscal year. Bloomberg states that Pilgrim's Pride took on debt and surpassed its rival, Tyson Foods Inc., in terms of production when it purchased Gold Kist Inc. in Atlanta for $1.1 billion in January 2007. The company's long-term debt, according to a filing with the U.S. Securities and Exchage Commission, was $1.52 billion as of June 28, 2008. The filing says that Pilgrim's Pride has a market value of $471 million and had $341.4 million available to borrow from various credit lines as of July 29, 2008. Bloomberg says that Pilgrim's Pride must keep various measures of creditworthiness above set levels to avoid violating its credit agreements. Pilgrim's Pride said in its SEC filing that in April, the covenants were adjusted to levels that the company "can comply with in the near-term despite the current economic issues facing the chicken industry." Pilgrim's Pride said in a statement that it believes it has reached an understanding with the agents under its credit facilities to temporarily waive the fixed-charge coverage ratio covenant through Oct. 28, 2008, and to provide continued liquidity under these facilities during this same period. The temporary waiver will be subject to the negotiation of a definitive written agreement with the lenders, and there can be no assurance that this negotiation will result in a waiver acceptable to Pilgrim's Pride and its lenders. Failure to obtain a waiver or amendment of this covenant may preclude the company from drawing funds under these facilities and permit the lenders to declare an event of default, either of which would have a material adverse effect on the company. "The stock decline is based on concerns they're going to trigger some of their debt covenants, and they may have difficulty getting waivers in this credit environment," Bloomberg quoted BB&T Capital Markets analyst Heather Jones as saying. About Pilgrim's Pride Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. Pilgrim's Pride employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. * * * As reported in the Troubled Company Reporter on Sept. 8, 2008, Moody's Investors Service placed under review for possible downgrade the ratings of Pilgrim's Pride Corporation, including the company's B1 corporate family rating and probability of default rating. LGD assessments are also subject to adjustment. The review action is based on Moody's concern that profitability could erode more severely in fiscal 2008 than previously contemplated based on volatile and still high grain costs and uncertainty about the extent to which domestic chicken market prices rise to offset input costs. As reported in the Troubled Company Reporter on June 24, 2008, Standard & Poor's Ratings Services placed its 'BB-' corporate credit rating Pilgrim's Pride Corp. on CreditWatch with negative implications. PINNACLE HEIGHTS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Pinnacle Heights Apartments, LLC 2900 Baby Ruth Lane Antioch, TN 37013 Bankruptcy Case No.: 08-08697 Type of Business: The Debtor owns apartment buildings. Chapter 11 Petition Date: September 24, 2008 Court: Middle District of Tennessee (Nashville) Debtor's Counsel: Elliott Warner Jones, Esq. ejones@dsattorneys.com Drescher & Sharp PC 1720 West End Avenue, Suite 300 Nashville, TN 37203 Tel: (615) 425-7121 Fax: (615) 425-7111 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The Debtor did not file a list of 20 largest unsecured creditors. PRB ENERGY: Wants to Sell Pipeline Assets and Furniture to Wytex ---------------------------------------------------------------- PRB Energy Inc. and its wholly owned subsidiary PRB Gathering Inc. ask the U.S. Bankruptcy Court for the District of Colorado for approval of: a) the sale of pipeline assets in Campbell County, Wyoming, collectively the "Antelope Valley Assets," for approximately $97,000 cash and Miscellaneous Furniture for $3,000 to Wytex Ventures LLC and Northeast Enegy Energy, Management Inc. b) the sale of the Assets to Buyers or other entity submitting a higher or otherwise better bid, free and clear of all liens, claims, encumbrances and other interests; and b) assignment or assumption of certain contracts associated with the Antelope Valley Assets, specifically: i) Interconnect Facilities Agreement as amended between Thunder Creek Gas Services, LLC and PRB Energy as successor to Bear Paw Energy, LLC dated March 17, 2000; ii) Interconnect Agreement between Fort Union Gas Gathering, LLC and PRB Energy as successor to Bear Paw Energy, Inc. dated Oct. 18, 1999. PRB Gathering is the owner of the Antelope Valley Assets. PRB Energy is the owner of certain miscellaneous office furniture located at "Any Time Storage" in Gillete, Wyoming. West Coast Opportunity Fund LLC asserts that it holds a first security interest in all of the assets of PRB Energy and liens of various priorities on most if not all of the assets of PRB Gathering. Debtors believe that by way of a UCC-1 Financing Statement delivered by PRB Gathering and filed on Dec. 28, 2006, West Coast may have a perfected security interest in the Antelope Valley Assets. Debtors believe that by way of a UCC-1 Financing Statement delivered by PRB Energy and filed on Dec. 28, 2006, West Coast may have a perfected lien claim against the furniture assets. PRB Funding, LLC, whose principals are members of the Board of the Debtors, also holds a lien on all of the Assets of PRB Energy (and PRB Oil and Gas, Inc.). As a result of a $275,000 post-petition which it provided to PRB Energy (and PRB oil and Gas), PRB Funding asserts a security interest in the furniture assets. PRB Funding does not have any security interest in the Antelope Valley Assets. The Debtors have requested that the Court set a hearing date in November, prior to Nov. 17, 2008, to consider this request. The Agreement contemplates closing to occur on Oct. 1, 2008. Competitive bidders are invited to submit better and higher offers to purchase the Assets. Bids must be in writing and received by the Debtors no later than 12:00 p.m. noon, Prevailing Mountain Time, Oct. 17, 2008. About PRB Energy Headquartered in Denver, PRB Energy Inc. fka PRB Gas Transportation Inc. -- http://www.prbenergy.com/-- operates as independent energy companies engaged in the acquisition, exploitation, development and production of natural gas and oil. In addition, the company and its affiliates provide gas gathering, processing and compression services for properties it operates and for third-party producers. The Debtor conducts business activities in Wyoming, Colorado and Nebraska. The Debtor filed for chapter 11 protection on March 5, 2008 (Bankr. D. Co. Case No. 08-12658) together with two affiliates, PRB Oil & Gas Inc. (Case No. 08-12661) and PRB Gathering Inc. (08-12663). Faegre & Benson LLP, Happensall & Savage LLC, Donald D. Allen, Esq., Edward M. Hepenstall, Esq., James T. Markus, Esq., Jennifer M. Salisbury, Esq., and John F. Young, at Block, Markus & Williams LLC represent the Debtors in their restructuring efforts. Daniel J. Garfield, Esq. and Michael J. Pankow, Esq., at Brownstein Hyatt Farber Schreck, P.C. represent the Debtors in their restructuring efforts. The Debtor listed assets of between $50 million and $100 million and liabilities of between $10 million and $50 million. PRESERVE LLC: Case Summary & Six Largest Unsecured Creditors ------------------------------------------------------------ Debtor: The Preserve, LLC 7006 Magnolia Ave., PMB No. 309 Riverside, CA 92506 Bankruptcy Case No.: 08-23006 Chapter 11 Petition Date: September 25, 2008 Court: Central District Of California (Riverside) Judge: Sheri Bluebond Debtor's Counsel: Jeffrey W. Broker, Esq. jbroker@brokerlaw.biz Broker & Associates Professional Corporation 18191 Von Karman Ave., Suite 470 Irvine, CA 92612-7114 Tel: (949) 222-2000 Fax: (949) 222-2022 Estimated Assets: $100 million to $500 million Estimated Debts: $10 million to $50 million Debtor's Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Rox Consulting engineering services $156,250 575 Anton, Suite 820 Costa Mesa, CA 92626 Tel: (949) 502-8100 Bandari, Beach, et al. accounting services $52,946 12424 Wilshire Blvd., Ste. 750 Los Angeles, CA 90025 Tel: (310) 447-1234 DPFG consulting services $13,573 27127 Calle Arroyo, Ste. 1920 San Juan Capistrano, CA 92675 TelL (949) 388-9269 Amir Raza legal services $13,212 Palmeiri Tyler, et al. legal services $7,415 Applied Planning planning services $5,160 Gresham Savage, et al. legal services unknown PROSYS-TEC COMPUTERS: Files Creditors Protection under BIA ---------------------------------------------------------- Prosys-Tech Corporation discloses that the management of Prosys- Tec Computers Inc. has filed a Notice of Intention pursuant to Chapter 50.4 of the Bankruptcy and Insolvency Act, dated Sept. 24, 2008. This decision is part of the restructuring process to abandon the white box assembly business after the deterioration of its financial position and market circumstances in which the Subsidiary operates. The Subsidiary will continue to operate under the Bankruptcy and Insolvency Act protection. The Subsidiary is not bankrupt. Rights and remedies of creditors against the Subsidiary, including rights and remedies of unpaid suppliers, are stayed for an initial 30 day period. This stay period may be further extended with leave of the Court and in accordance with the Bankruptcy and Insolvency Act. All alternatives are under study in order to obtain the maximum value for its assets for its sole shareholder, the company. Moreover, the Subsidiary has negotiated and has made contractual arrangements with its main creditors in order to ensure that the abandonment of the white box assembly business takes place in the best interest of creditors and of the sole shareholder. About Prosys-Tec Computers Inc. Prosys-Tec Computers Inc. is a subsidiary of Prosys-Tech Corporation (TSX VENTURE: POZ) -- http://www.cdmsfirst.com/and http://www.peakpositioning.com/-- is a distributor of information technology products having offices in Montreal, Quebec and Ottawa. QUAD J INC: Case Summary & Seven Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Quad J, Inc. dba Columbia Lanes 211 South Park Avenue Columbia, MS 39429 Bankruptcy Case No.: 08-51537 Chapter 11 Petition Date: September 8, 2008 Court: Southern District of Mississippi (Gulfport Divisional Office) Judge: Edward Gaines Debtor's Counsel: William J. Little, Jr., Esq. littlewj@bellsouth.net Lentz & Little, P.A. PO Box 927 Gulfport, MS 39502 Tel: (228) 8867-6050 Fax: (228) 867-6077 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1,000,000 to $10,000,000 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/mssb08-51537.pdf RENFRO CORP: Weak Performance Cues S&P to Change Outlook to Neg. ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Renfro Corp. to negative from stable. At the same time, S&P affirmed all ratings on the company, including the 'B' long-term corporate credit rating. The Mount Airy, North Carolina-based sock manufacturer had about $169 million of balance sheet debt as of July 26, 2008. The outlook revision reflects S&P's concerns about Renfro's weaker-than-expected operating performance and tight covenant cushion levels for the quarter-ended July 26, 2008. While net sales increased slightly and volumes were flat, EBITDA declined about 12% due to higher raw material costs, a less-favorable product mix, and overall weaker sales trends to retailers. Credit protection measures for the quarter ended July 26, 2008 were weaker than expected. The ratings on Renfro reflect the company's participation in the highly competitive apparel manufacturing industry, its narrow product portfolio, customer concentration, and highly leveraged financial profile. Renfro benefits from the strength of its well- known Fruit of the Loom brand, which makes up a significant portion of the company's revenues. Although Renfro does not own the brand, it does have a long-term license to sell Fruit of the Loom socks until 2026. Standard & Poor's assigns a high degree of business risk to the apparel manufacturing industry, because of intense competition, low barriers to entry, and the commodity-like nature of certain apparel items, such as socks. The outlook on Renfro is negative. "We are concerned about the company's ability to restore and maintain sufficient cushion on its leverage covenant and to improve its operating performance amid rising raw material costs and the current weak economy," said Standard & Poor's credit analyst Bea Chiem. "We could lower the ratings in the near term if Renfro continues to experience weak operating trends, resulting in continued tight covenant cushion levels," she continued. RETAIL PRO: Settles Case with Securities and Exchange Commission ---------------------------------------------------------------- Retail Pro Inc. disclosed that it settled an action filed in the United States District Court for the Southern District of California entitled "Securities and Exchange Commission v. Retail Pro Inc., fka Island Pacific Inc. et al." The company settled the Lawsuit by consenting to entry of a permanent injunction in the United States District Court for the Southern District of California against future violations of the anti-fraud, reporting, record-keeping, and internal control provisions of the Securities Exchange Act of 1934. The company entered into the Settlement without admitting or denying the allegations, and was not required to pay any civil penalty, fine, or monetary damages as part of the Settlement. The Settlement resolves the SEC investigation into the company's financial condition, results of operations, accounting policies and procedures, internal controls, and internal revenue recognition investigation relating to the timing of revenue recognition for certain transactions during the fiscal years ended March 31, 2003, 2004 and 2005. Headquartered in La Jolla, California, Retail Pro, Inc. (OTC: IPIN.PK) -- http://www.retailpro.com/--provides Point of Sale, Store Operations, Merchandising, Planning, Business Intelligence, and Payment Processing software applications for the specialty retail industry. Retail Pro(R) is delivered through a world-wide network of channel partners. The company maintains offices in the United States, United Kingdom, Australia, Mexico, Italy, Poland and China. Going Concern Doubt Goldman & Parks LLP, in Encino, California, expressed substantial doubt about Island Pacific Inc. nka. Retail Pro Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended March 31, 2007, and 2006. The auditing firm reported that the company has suffered recurring losses from operations and has an accumulated deficit of $81,979,000 as of March 31, 2007. ROCKWOOD SPECIALTIES: Fitch Holds 'B' IDR on Solid Performance -------------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Rating and outstanding debt ratings on Rockwood Specialties Group, Inc. as: -- IDR at 'B' -- Senior secured credit facility at 'BB/RR1'; -- Senior Secured Term Loans at 'BB/RR1'; -- Senior subordinated notes at 'B/RR4'. The Rating Outlook is Stable. The ratings reflect solid performance and the potential for modest earnings growth over the next 12-to-18 months. Fitch expects cash generation after capital expenditures to comfortably service debt over that period. Financial leverage is high and expected to remain so over the near term under the assumption that Rockwood will preserve cash in this credit constrained environment. Liquidity is quite strong with cash on hand at June 30 of $337 million and $225.3 million available under the company's $250 million revolver expiring July 30, 2010. At June 30, 2008 total debt was $2,639 million and 4.3 times LTM operating EBITDA of $620 million. Following the completion of the formation of the joint-venture with Kemira Oyj and related EUR250 million borrowing which will be consolidated under Rockwood Specialties, debt becomes about $3 billion and leverage could increase to about 4.5 times. As of Dec. 31, 2007, scheduled debt amortization was quite modest with $107.4 million due in 2008, $74.2 million due in 2009 and $79.2 million due in 2010. In 2012 some $1.4 billion in term loans is scheduled to mature and Fitch expects some portion to be refinanced prior to the expiry of the revolver. Rockwood reported that it complied with the leverage ratio covenant limit of less than 4.75:1, with a ratio of 3.75:1 and the interest coverage limit of at least 1.95:1 with a ratio of 4.12:1. The leverage ratio covenant tightens gradually to a maximum of 4.25:1 and the interest coverage covenant steps up to 2:1 after Jan. 1, 2009. The Stable Outlook reflects Fitch's expectations that current operations should allow for modest debt reduction over the medium term and that acquisitions will be financed by cash on hand or new equity. Products consist primarily of inorganic chemicals and solutions and engineered materials. They are often customized to meet the complex needs of the customers and to enhance the value and performance of their end products by improving performance, providing essential product attributes, lowering costs or making them more environmentally friendly. Rockwood generally competes in niche markets in a wide range of end-use markets, including construction, life sciences, electronics and telecommunications, metal treatment and general industrial and consumer products markets. Rockwood generated operating EBITDA of $620 million on $3.3 billion in revenues for the LTM ending June 30, 2008. ROUNDY'S SUPERMARKETS: Moody's Cuts $125MM Credit Rating to 'B1' ---------------------------------------------------------------- Moody's Investors Services affirmed the corporate family rating of Roundy's Supermarkets Inc. at B2 and its probability of default rating at B3. Moody's also downgraded the ratings on Roundy's $125 million senior secured revolving credit, and its $800 million senior secured term loan to B1 from Ba3. The downgrade of the bank facility ratings to B1 reflects a reduction in the proportion in the company's capital structure comprised of unsecured liabilities as well as Moody's reconsideration of some non-debt liabilities in accordance with Moody's Loss Given Default Methodology. The outlook on all ratings remains negative. These ratings were affirmed: -- Corporate family rating at B2 -- Probability of default rating at B3 These ratings were downgraded: -- $125 million senior secured revolving credit to B1 (LGD3, 30%) from Ba3 (LGD 2, 18%) -- $800 million senior secured term loan to B1 (LGD3, 30%) from Ba3 (LGD2, 18%) The B2 corporate family rating reflects Roundy's weak credit metrics, its small size relative to the overall supermarket universe, its geographic concentration, and its continuing negative comparable store sales. The rating also recognizes Roundy's position as the leading supermarket operator in Wisconsin, the company's private label and commissary growth, the long term stability of management, and the improving operating margins. The negative outlook reflects Moody's concern that Roundy's liquidity position may become constrained due to limited headroom within its bank financial covenants, as well as the fact that the covenants tighten in the first quarter of 2009. Roundy's Supermarkets, Inc., headquartered in Milwaukee, Wisconsin, operates 152 retail grocery stores primarily under the Pick 'n Save, Copps, and Rainbow banners. Sales for the last twelve months ended in June, 2008 were approximately $3.8 billion. The company is 89% owned by Willis Stein Funds. SALAS AUTOMOTIVE: Case Summary & 19 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Salas Automotive Group, Inc. dba Poway Chevrolet Poway Chevrolet 13742 Poway Road Poway, CA 92064 Tel: (858) 748-9600 Bankruptcy Case No.: 08-09311 Type of Business: The Debtor sells automobiles. Chapter 11 Petition Date: September 23, 2008 Court: Southern District of California (San Diego) Judge: James W. Meyers Debtor's Counsel: Michael S. Kogan, Esq. mkogan@ecjlaw.com Ervin Cohen & Jessup, LLP 9401 Wilshire Boulevard, 9th Floor Beverly Hills, CA 90212 Tel: (310) 273-6333 http://www.ecjlaw.com/ 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/califsb08-09311.pdf SHERIDAN HOMES: Court Dimisses Chapter 11 Case ---------------------------------------------- Sarah Yaussi at Big Builder News reports that the Hon. Brenda T. Rhoades of the U.S. Bankruptcy Court for the Eastern District of of Texas has dismissed Sheridan Homes of Texas' Chapter 11 case. Andrea Jares at Star-Telegram.com relates that Sheridan Homes filed for Chapter 11 protection on Aug. 4, 2008 (Bankr. E.D. Tex. Case No. 08-42099). It listed assets below $60,000 and debts below $60,000 when it filed for bankruptcy. Star-Telegram.com states that Sheridan Homes was building five houses in Grand Prairie and Waxahachie that had already been sold. "Because of [Sheridan's] precarious financial position, the [company] was unable to fund the completion of the homes and deliver them to the buyers," the company said in court documents. According to the report, Sheridan Homes has 34 properties in in Mansfield, south Arlington, Azle, Fort Worth, and Grand Prairie, which are set for foreclosure in an auction scheduled on Oct. 7. According to Big Builder News, Sheridan Homes is already back in business. The report says that Eric Liepins, Esq., the attorney for Sheridan Homes, said that his client was able to work out a deal with creditors that let the company continue operating outside of bankruptcy. "They're trying to not go through bankruptcy. They're kind of in a holding pattern," the report quoted Mr. Liepins as saying. Mr. Liepins, according to the report, said that Sheridan Homes could re-file for bankruptcy if necessary. Big Builder News relates that Sheridan Homes has to generate enough cash to pay its workers and keep its banks at bay. About Sheridan Homes Plano, Texas-based Sheridan Homes of Texas builds homes. Sheridan Homes builds in the Dallas and Fort Worth areas. Its houses are generally priced from $100,000 to $200,000. The Debtor filed for bankruptcy on Aug. 4 (Bankr. E.D. Tex., Case No. 08-42099). SHIV RESTAURANT: Case Summary & Four Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Shiv Restaurant Corp. Inc. 5-7 Lehns Court Easton, PA 18042 Bankruptcy Case No.: 08-22022 Type of Business: Single Assets Real Estate Chapter 11 Petition Date: September 24, 2008 Court: Eastern District of Pennsylvania (Reading) Debtor's Counsel: Michael J. McCrystal, Esq. mmccrystal@verizon.net 2355 Old Post Road, Suite 4 Coplay, PA 18037 Tel: (610) 262-7873 Total Assets: $1,431,010 Total Debts: $938,914 The Debtor's chapter 11 petition with list of its four largest unsecured creditors is available for free at: http://researcharchives.com/t/s?32b8 SIRIUS COMPUTER: Moody's Holds 'B1' Rating; Outlook Negative ------------------------------------------------------------ Moody's Investors Service affirmed the ratings of Sirius Computer Solutions, Inc. (B1 CFR) and changed the outlook to negative from stable. The negative outlook underscores Sirius' weaker liquidity position because of extremely tight covenants resulting from covenant step downs and weaker than expected operating performance. Sirius' operating performance has been below expectations due to declines in revenues due to weak macro economic environment as well as timing related to new product introductions by its key vendor. Moody's believes that a continuation of such lackluster performance along with significant step downs in covenants may lead to breach of some of the credit agreement financial covenants. This may require the company to seek relief in an available equity cure under its credit agreement from its shareholders. The negative outlook also reflects Moody's belief that despite the equity cure, the company's EBITDA cushion under its financial covenants will remain very tight, and a shortfall in the company's anticipated performance over the next twelve months could require the company to seek further equity cure or other relief. As of June 30, 2008, the company had total debt of $158 million, which included $97.1 million of first lien term loan, $55 million of second lien term loan and the remaining related to acquisition notes. There were no outstandings under the revolving credit facility. These ratings are affirmed: * Corporate family rating -- B1 * Probability of default rating -- B1 * $30 million first lien revolving credit facility -- Ba2, LGD-2, 28% * $130 million first lien term loan -- Ba2, LGD-2, 28% * $55 million second lien term loan -- B2, LGD-4, 66% Ratings outlook is negative. The B1 corporate family rating reflects Sirius' low operating margins, high financial leverage, liquidity constrained by financial covenants under the company's credit facility, small presence in the "high growth" service and solutions space, and reliance on IBM's discount pricing because of its high level of vendor concentration -- more than 90% of Sirius Computer's revenues are represented by IBM products and services. The rating is supported by the company's track record as the largest IBM value-added-reseller of IT solutions primarily serving small to medium businesses in the US, its positive cash generating ability and its good track record of paying down debt. The ratings incorporate Sirius Computer's premium IBM VAR position and its strong customer orientation which has led to healthy repeat revenues in recent years. Sirius Computer Solutions, Inc., headquartered in San Antonio Texas, is a leading IBM value-added-reseller of IT solutions primarily serving small to medium businesses in the US. The company provides its 5,000+ customers with an extensive offering of advanced infrastructure solutions, including hardware, software, and services. SIX FLAGS: Heightened Default Risk Cues Moody's to Cut Ratings -------------------------------------------------------------- Moody's Investors Service downgraded Six Flags, Inc.'s Corporate Family rating to Caa2 from Caa1, the Probability of Default rating to Caa2 from Caa1 and associated instrument ratings. The rating actions reflect heightened risk of default because of the approach of the August 15, 2009 mandatory redemption date for the $287.5 million Preferred Income Redeemable Securities and the February 1, 2010 maturity of the remaining $131 million 8.875% senior unsecured notes. Moody's does not expect Six Flags to generate sufficient free cash flow or have sufficient unused revolver capacity to fund these obligations -- creating reliance on asset sales or refinancing options. Moody's believes an inability to fund the PIERS redemption would constitute a default under Six Flags' credit agreement, which would in turn trigger a cross default on the bonds issued by Six Flags and Six Flags Operations, Inc. Six Flags' improved operating performance during the 2008 summer season is a positive and there is a potential that a PIERS refinancing could be based on the instruments' market value -- approximately $82 million as of August 23, 2008 -- instead of the $287.5 million liquidation preference. However, Moody's believes Six Flags' highly levered capital structure and difficult credit market conditions could limit its ability to sell assets or execute on a refinancing, including the 2010 requirement even if the PIERS' maturities are somehow satisfied. The rating outlook is negative. Downgrades: Issuer: Six Flags Inc. -- Corporate Family Rating, Downgraded to Caa2 from Caa1 -- Probability of Default Rating, Downgraded to Caa2 from Caa1 -- Preferred Stock (PIERS), Downgraded to Ca from Caa3 (LGD6 - 98%) Issuer: Six Flags Theme Parks Inc. -- Senior Secured Bank Credit Facility, Downgraded to B2 from B1 (LGD2 - 20%) The negative rating outlook reflects the potential for a default if Six Flags is unable to satisfy the 2009 PIERS redemption and 2010 note maturity. Six Flags' SGL-4 speculative-grade liquidity rating reflects Moody's expectation that the company will not have sufficient cash, internally generated cash flow and/or committed unused revolver capacity to fund the PIERS redemption and contingent obligations, including the partnership puts. However, Moody's believes Six Flags could be close to free cash flow break even over the next 12 months, and that the unused revolver capacity could cover any operating shortfall and seasonal working capital needs. The Caa2 rating and LGD4 -- 60% assessment on the SFO notes and the Caa3 ratings and LGD5 -- 85% assessments on the notes issued by Six Flags, Inc. are not affected. Moody's last rating action on Six Flags was a change in the PDR to Caa1/LD from Ca and a downgrade of the 8.875% 2010 notes to Caa3 from Caa2 on June 16, 2008 in conjunction with an exchange offer (the PDR reverted to Caa1 on June 19). Six Flags, headquartered in New York City, is a regional theme park company that operates 20 parks spread across North America. The park portfolio includes 16 wholly-owned facilities as well as four parks - Six Flags over Texas, Six Flags over Georgia, Six Flags White Water (Atlanta), and the Six Flags Great Escape Lodge -- in which Six Flags owns partial interests and three of which it consolidates due to significant operational control and residual economic interest. Annual revenue approximates $990 million. SKIPPER'S INC: Closing Stores Under Bankruptcy Proceedings ---------------------------------------------------------- Skipper's Inc.'s fish-n-chips eatery off Auburn Way North has closed its doors, the Auburn Reporter (Wash.) reported Wednesday. Skipper's Inc., a chain of seafood restaurants based in SeaTac, a city and outlying suburb of Seattle, has closed 22 of its stores in the Puget Sound area and is selling more than 25 others as it completes bankruptcy procedures, the report said. The former Skipper's on Auburn Way North will reopen as Chicago Willies this fall. Chicago Willies specializes in hamburgers, hot dogs and other fast-food favorites. About Skipper's Inc. Based in Seatac, Washington, Skipper's Inc. operated a chain of fast service oriented seafood restaurants doing business in Idaho, Montana, Oregon, Utah, Washington and Alaska when it filed for Chapter 11 relief on Dec. 12, 2006 (Bankr. W.D. Wash. 06-14414). The restructuring failed, and Skipper's, Inc. was liquidated on June 29, 2007. STOKESAY MANAGEMENT: Case Summary & Six Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Stokesay Management Corporation ta Stokesay Castle 141 Stokesay Castle Lane Reading, PA 19606 Bankruptcy Case No.: 08-22009 Type of Business: The Debtor operates a restaurant. See http://www.stokesaycastle.com/ Chapter 11 Petition Date: September 23, 2008 Court: Eastern District of Pennsylvania (Reading) Judge: Richard E. Fehling Debtor's Counsel: Frederick L. Reigle 2901 Street Lawrence Avenue, Suite 202 Reading, PA 19606 Tel: (610) 779-4550 Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $500,000 to $1,000,000 A copy of the Debtor's list of Six Largest Unsecured Creditors is available at http://bankrupt.com/misc/paeb08-22009.pdf STUART EDWARDS: Section 341(a) Meeting Scheduled for October 1 -------------------------------------------------------------- The U.S. Trustee for Region 17 will convene a meeting of Stuart D. Edwards' creditors on Oct. 1, 2008, at 2:00 p.m., at the San Jose Room 130. This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Salinas, California-based Stuart D. Edwards, a.k.a. Stuart Denzil Edwards filed for Chapter 11 protection on June 3, 2008 (Bankr. N.D.Calif. No. 08-52920). Charles B. Greene, Esq., at the Law Offices of Charles B. Greene represents the Debtor in its restructuring effort. The Debtor listed assets between $10,000,001 and $50 million and debts between $1,000,001 and $10 million when it filed for bankruptcy. SWANSEA PROPERTIES: Section 341(a) Meeting Scheduled for Sept. 30 ----------------------------------------------------------------- The U.S. Trustee for Region 14 will convene a meeting of Swansea Properties, LLC's creditors on Sept. 30, 2008, at 3:00 p.m., at the U.S. Trustee Meeting Room, 230 N. First Avenue, Suite 102, Phoenix, Arizona. This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Litchfield Park, Arizona-based Swansea Properties LLC filed for Chapter 11 protection on Aug. 29, 2008 (Bankr. D.Ariz. Case No. 08-11486). James E. Cross, Esq., at Osborn Maledon P.A. represents the Debtor in its restructuring effort. The company listed assets between $10 million and $50 million and debts between $10 million and $50 million when it filed for bankruptcy. Its affiliates, Eagletail Bighorn LLC and MPK Enterprises Inc. made separate Chapter 11 filings in August. SWANSEA PROPERTIES: Files Schedules of Assets & Liabilities ----------------------------------------------------------- Swansea Properties, LLC, filed with the U.S. Bankruptcy Court for the District of Arizona, its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $20,000,000 B. Personal Property $0 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $29,599,367.61 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $0 ----------- ----------- TOTAL $20,000,000 $29,599,367.61 Litchfield Park, Arizona-based Swansea Properties LLC filed for Chapter 11 protection on Aug. 29, 2008 (Bankr. D.Ariz. Case No. 08-11486). James E. Cross, Esq., at Osborn Maledon P.A. represents the Debtor in its restructuring effort. The company listed assets between $10 million and $50 million and debts between $10 million and $50 million when it filed for bankruptcy. SWANSEA PROPERTIES: Court OKs Osborn Maledon as Bankr. Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona granted Swansea Properties, LLC, and its debtor-affiliates permission to employ Osborn Maledon, P.A., as counsel for the Debtors. The Debtors told the Court that Osborn Maledon will, among others, advise the Debtors of their rights, powers, and duties in their Chapter 11 case and assist the Debtors in the preparation of their voluntary Chapter 11 Petition and Statments and Schedules. According to James E. Cross, a partner at Osborn Maledon, the firm will charge the Debtors thes hourly rates: Partners $245-$465 Associates $190-$520 Paralegals $60-$185 Mr. Cross assured that Court that the firm has no other relationship with the Debtors, nor does it hold or reepresent an interest adverse to the Debtors or their estates, creditors of the estates or interested parties. Litchfield Park, Arizona-based Swansea Properties LLC filed for Chapter 11 protection on Aug. 29, 2008 (Bankr. D.Ariz. Case No. 08-11486). James E. Cross, Esq., at Osborn Maledon P.A. represents the Debtor in its restructuring effort. The company listed assets between $10 million and $50 million and debts between $10 million and $50 million when it filed for bankruptcy. Its affiliates, Eagletail Bighorn LLC and MPK Enterprises Inc. made separate Chapter 11 filings in August. SWANSEA PROPERTIES: Court Okays Quarles Brady as Special Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona granted Swansea Properties, LLC, and its debtor-affiliates permission to employ Quarles & Brady, LLP, as special counsel for the Debtors nunc pro tunc. Diane M. Haller, Esq., a partner at Quarles & Brady, told the Court that the firm will, among other things, perform real estate transactional work and represent the Debtors in related litigation or other dispute resolution proceedings. According to Ms. Haller, the firm will charge the Debtors these hourly rates: Partners, Attorneys, and Associates $230-$650 Paralegals $180-$225 Ms. Haller assured that Court that the firm and its attorneys are disinteresed persons and that the firm doesn't hold an interest adverse to the estates or their creditors or interested parties. Litchfield Park, Arizona-based Swansea Properties LLC filed for Chapter 11 protection on Aug. 29, 2008 (Bankr. D.Ariz. Case No. 08-11486). James E. Cross, Esq., at Osborn Maledon P.A. represents the Debtor in its restructuring effort. The company listed assets between $10 million and $50 million and debts between $10 million and $50 million when it filed for bankruptcy. Its affiliates, Eagletail Bighorn LLC and MPK Enterprises Inc. made separate Chapter 11 filings in August. SYNOVICS PHARMACEUTICALS: Posts $4.7MM Loss for 3 Quarters ---------------------------------------------------------- Synovics Pharmaceuticals Inc. posted $4.7 million in net losses on $18.1 million in net revenues for nine months ended July 31, 2008, compared with $16.6 million in net losses on $18.1 million in net revenues for nine months ended July 31, 2008. Synovics posted $489,670 in net profit on $7.7 million in net revenues for the three months ended July 31, 2008, compared with $7.5 million in net losses on $6.9 million in net revenues for the three months ended July 31, 2007. Synovics Pharmaceuticals Inc.'s consolidated balance sheet at July 31, 2008, showed $23.6 million in total assets and $19.6 million in total liabilities, and $4.0 million in stockholders' equity. At July 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $6.8 million in total current assets available to pay $14.1 million in total current liabilities. "To date, our operations have not generated sufficient revenues to satisfy our historical capital needs," Jyotindra Gange, Principal Executive Officer, said. "We have been financed through operations and the sale of our common stock, warrants and debt by means of private placements. We had a working capital deficit of $7,297,512 at July 31, 2008 as compared with a working capital deficit of $19,458,269 at Oct. 31, 2007. Cash and cash equivalents were $426,060 at July 31, 2008, as compared with $0 at Oct. 31, 2007." Net cash provided by operating activities during the nine-month period ended July 31, 2008 was $2,617,121. This resulted from the company's net loss of $4,676,159 reduced by significant amortization of loan discounts and increases in current liabilities accounts. The company has generally incurred negative cash flows from operations since inception. The company expects the negative cash flow will be reduced in the future as its short and long term debt obligation as well as and financing expenses are reduced or eliminated. Net cash used in investing activities during the nine-month period ended July 31, 2008 was $586,061. These funds were used for capital expenditures funded through leasing activities and were substantially offset by a significant sale of an asset. Net cash used in financing activities during the nine-month period ended July 31, 2008 was $1,605,000. Full-text copies of the company's consolidated financial statements for the quarter ended July 31, 2008, are available for free at http://researcharchives.com/t/s?3285 Going Concern Doubt As reported in the Troubled Company Reporter on Feb. 21, 2008, Miller, Ellin & company LLP, in New York, expressed substantial doubt about Synovics Pharmaceuticals Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Oct. 31, 2007. The auditing firm stated that the company has negative working capital and has experienced significant losses and negative cash flows. About Synovics Pharmaceuticals Based in Ft. Lauderdale, Fla., Synovics Pharmaceuticals Inc. (OTC BB: SYVC) -- http://www.bionutrics.com/-- through its subsidiaries, engages in the development, manufacture, and commercialization of generic over-the-counter (OTC) pharmaceutical products and generic prescription drug products. The company's OTC product categories include analgesics, cough, cold, antihistamines, asthma relief, and laxatives. It also offers private label solid dosage Rx products, including Estratest, a product used by post-menopausal women. Synovics Pharmaceuticals packages and distributes its private label, or store brand OTC products to chain drug stores, wholesalers, and distributors in the United States. It has a strategic partnership with Maneesh Pharmaceuticals Pvt. Ltd. The company was founded in 1983. It was formerly known as Bionutrics Inc. SYNOVICS PHARMA: Drops Plan to Issue New Securities --------------------------------------------------- Synovics Pharmaceuticals Inc. disclosed in a Securities and Exchange Commission filing that it has requested, pursuant to Rule 477 under the Securities Act of 1933, as amended, that the Commission consent to the withdrawal of its Registration Statement on Form S-3 filed with the Commission on July 24, 2006 (File No. 333-135981). The company requests the withdrawal because it has determined not to pursue the registration of the securities included in the Registration Statement at this time. About Synovics Pharmaceuticals Phoenix-based Synovics Pharmaceuticals Inc., fka, Bionutric, is focused on developing generics and improved formulations of already-approved prescription drugs. Its generic Metformin, a treatment for type 2 diabetes, is approved by the FDA but has not yet been launched. Synovics brings in revenue from over-the- counter drugmaker Kirk Pharmaceuticals, which it acquired in 2006. Going Concern Disclaimer As reported in the Troubled Company Reporter on Feb. 21, 2008, Miller, Ellin & company LLP, in New York, expressed substantial doubt about Synovics Pharmaceuticals Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Oct. 31, 2007. The auditing firm stated that the company has negative working capital and has experienced significant losses and negative cash flows. Synovics Pharmaceuticals Inc.'s consolidated balance sheet at Jan. 31, 2008, showed $21.2 million in total assets and $31.5 million in total liabilities, resulting in a $10.3 million total stockholders' deficit. At Jan. 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $3.7 million in total current assets available to pay $25.5 million in total current liabilities. The company reported a net loss of $2.2 million on net revenues of $4.3 million for the first quarter ended Jan. 31, 2008, compared with a net loss of $2.4 million on net revenues of $5.4 million in the corresponding period ended Jan. 31, 2007. T & D DEVELOPMENT: Case Summary & Four Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: T & D Development, Inc. 5801 Mt. Pleasant Prospect, KY 40059 Bankruptcy Case No.: 08-34183 Chapter 11 Petition Date: September 23, 2008 Court: Western District of Kentucky (Louisville) Judge: Joan A. Lloyd Debtor's Counsel: Henry K. Jarrett, III, Esq. henryk@iglou.com Suite 10 North First Trust Centre 200 South Fifth Street Louisville, KY 40202 Tel: 584-1374 Fax: 585-4009 Total Assets: $1,700,000 Total Debts: $1,040,072 Debtor's list of its Four Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Brush Run LLC $148,000 Attn: Tom Borntranger 5801 Mt. Pleasant Prospect, KY 40059 Land Design & Development $2,822 503 Washburn Avenue, Suite 101 Louisville, KY 40222 AT&T Mobility $1,292 P.O. Box 538641 Atlanta, GA 303353 BB&T $999 THORNBURG MORTGAGE: EJF Capital Discloses 10.5% Equity Stake ------------------------------------------------------------ EJF Capital LLC disclosed in a Securities and Exchange Commission filing that it may be deemed to beneficially own 3,196,700 shares of Thornburg Mortgage Inc.'s 10% Series F Cumulative Convertible Redeemable Preferred Stock, representing 10.5% of the shares issued and outstanding. EJF Capital LLC may be deemed to beneficially own the 3,150,900 shares of Preferred Stock owned by EJF Opportunity Master Fund, L.P. and the 45,800 shares of Preferred Stock owned by EJF Long/Short Master Fund, L.P as the firm's investment manager. About Thornburg Mortgage Inc. Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA) -- http://www.thornburgmortgage.com/-- is a single-family residential mortgage lender focused principally on prime and super-prime borrowers seeking jumbo and super-jumbo adjustable- rate mortgages. It originates, acquires, and retains investments in adjustable and variable rate mortgage assets. Its ARM assets comprise of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. * * * As reported in the Troubled Company Reporter on June 27, 2008, Moody's Investors Service affirmed Ca and C senior debt and preferred stock ratings, respectively of Thornburg Mortgage Inc. Thornburg's Ca debt rating remains under review for possible downgrade. Moody's said that Thornburg's efforts to raise capital to avoid default under its repo agreements have resulted in the reconfiguration of its balance sheet with adverse impact on its debt and preferred equity holders. As reported in the Troubled Company Reporter on Aug. 11, 2008, Standard & Poor's said that the completion of Thornburg Mortgage Inc.'s tender offer for its preferred shares will have an impact on the rating once complete. If Thornburg is successful in the tender offer, S&P would view this as a positive sign. TREE CARE: Case Summary & Six Largest Unsecured Creditors --------------------------------------------------------- Debtor: Tree Care, Inc. 13319 Aiken Road Louisville, KY 40223 Bankruptcy Case No.: 08-34204 Chapter 11 Petition Date: September 24, 2008 Court: Western District of Kentucky (Louisville) Debtor's Counsel: David M. Cantor, Esq. cantor@derbycitylaw.com Seiller Waterman LLC 462 S. 4th Street, Suite 2200 Louisville, KY 40202 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor's chapter 11 petition with list of its six largest unsecured creditors is available for free at: http://researcharchives.com/t/s?32b TRM CORP: Chairman Brotman Resigns; M. Venezia Appointed to Board ----------------------------------------------------------------- TRM Corporation disclosed on Sept. 12, 2008, that Jeffrey Brotman, Chairman of the Board of Directors, resigned from the company, effective September 9, 2008. Mr. Brotman's resignation is based solely on personal considerations unrelated to TRM and did not result from any disagreement with the company concerning any matter relating to the company's operations, policies or practices. In his resignation letter, Mr. Brotman stated, "My resignation is based solely on personal considerations. I remain highly confident in TRM's business plan, its management, and its future prospects." Richard Stern, CEO of TRM Corporation stated, "We appreciate the years of dedicated service Jeff has brought to TRM. It was through Jeff's efforts that we were able to quickly and effectively dispose of significant assets allowing us to pay down our debt and continue as a going concern. We wish him well in his future endeavors." TRM Corporation also announced that Michael E. Venezia has been appointed to serve on its Board of Directors effective Sept. 12, 2008. The appointment was pursuant to a provision in the Securities Purchase Agreement, dated April 18, 2008, as amended, by and among TRM Corporation, LC Capital Master Fund, Ltd., and Lampe Conway & Co., LLC, allowing the Purchaser the right to require appointment of an additional director to TRM Corporation's board of directors if it holds an aggregate of 2,500,000 warrants. Michael E. Venezia, age 32, has been a Credit Analyst for Lampe, Conway & Co. LLC since June 15, 2005. Before joining Lampe, Conway & Co. LLC., Mr. Venezia served as a Vice President in the High Yield Group of Weiss, Peck & Greer from August 2004 to June 2005. Prior to joining Weiss, Peck & Greer, Mr. Venezia was a Vice President within Citigroup. Mr. Stern said, "We welcome Mike to our board and look forward to his contribution." The Company has not yet named a replacement for the Chairman of the Board. The Board of Directors will nominate and appoint a new Chairman of the Board from the existing members of the Board. With Mr. Venezia's appointment, Lampe amended its Schedule 13D on Sept. 22, disclosing with the Securities and Exchange Commission: No. of Shares % of Shares Name of Common Stock of Common Stock ---- --------------- --------------- LC Capital Master Fund, Ltd. 14,997,903 42.6% Lampe, Conway & Co., LLC 15,124,903 42.9% Steven G. Lampe 15,124,903 42.9% Richard F. Conway 15,124,903 42.9% Lampe, Conway & Co., LLC, is the investment manager of LC Capital Master Fund, Ltd. Messrs. Lampe and Conway act as the managing members of LC&C. Accordingly, each of Messrs. Lampe and Conway may be deemed to have a beneficial interest in the shares by virtue of LC&C's indirect control of the Master Fund and LC&C's power to vote and dispose of the shares. In a Form 3 filing, Mr. Venezia disclosed that "no securities are beneficially owned." Second Quarter Results On Aug. 14, 2008, TRM Corporation disclosed its second quarter 2008 financial results. In a press release, Mr. Stern stated: "In the second quarter of 2008, net sales were $9.0 million compared to $8.8 million in the second quarter of 2007. On a sequential basis, net sales were $9.0 million compared to $7.4 million in the first quarter of 2008. Net sales performance reflects increased transactions compared to the second quarter of 2007, mainly due to the acquisition of Access To Money and the increase in the average number of transacting ATMs. The average number of withdrawals per ATM per month declined slightly and the average transaction-based sales per withdrawal was $2.36 per withdrawal in the second quarter of 2007 versus $2.34 in the second quarter of 2008. The average number of transacting ATMs was 11,823 during the second quarter of 2008 compared to an average of 10,473 during the second quarter of 2007. "Cost of sales in the second quarter of 2008 decreased 13.3% to $5.2 million from $6.0 million in the second quarter of 2007, and increased 10.6% from $4.7 million in the first quarter of 2008. In the second quarter of 2008, gross profit margin improved sequentially to 43% from 37% in the first quarter of 2008. The cost of vault cash decreased by $429,000 to $916,000 for the second quarter of 2008 from $1.3 million for the second quarter of 2007. In addition the number of ATMs for which we provide cash decreased by 4.4% year over year. This reduction was due to our determination that certain machines were no longer profitable to operate. The total amount of vault cash in our system has decreased by 3% to $69.1 million as of June 30, 2008. Our vault cash costs are based on a spread to the interest rates on asset-backed commercial paper issued by the lender. The interest rate on our vault cash facility decreased to 3.81% as of June 30, 2008 from 6.75% at June 30, 2007 due to decreased commercial paper interest rates. Our ATM processing, telecommunication and armored car costs also decreased by $194,000, mostly as a result of renegotiating many of those contracts. "In the second quarter of 2008, selling, general and administrative expense increased by $636,000 million to $5.0 million from $4.3 million in the second quarter of 2007. As a percentage of sales, selling, general and administrative expenses increased to 20.8% in the second quarter 2008 as compared to 18.4% in the comparable quarter of 2007. The increase in selling, general and administrative expenses is primarily attributable to a one time $1.4 million charge related to the accelerated vesting of stock options and restricted stock associated with the Access To Money transaction. Also affecting SG&A costs was a $404,000 increase in labor costs as a result of the Access To Money acquisition, temporary labor and recruiting costs. As we move through our integration of the operations of Access To Money, we expect our labor costs to reduce. The cost for outsourced services decreased by approximately $1 million primarily as a result of the eFunds settlement. Legal, accounting and consulting expenses decreased by $232,000. "In the second quarter 2008, we reported a net loss from continuing operations of ($3.7) million as compared to a net loss of ($1.9) million in the second quarter of 2007 and compared to a net loss of $400,000 in the first quarter of 2008. "We believe that adjusted EBITDA from continuing operations is the most accurate reflection of ongoing operations. For the second quarter 2008, adjusted EBITDA from continuing operations was $836,000 compared to ($1.4) million in the second quarter 2007 which reflects the positive effects of our restructuring efforts. "We had cash and restricted cash of $8.0 million at June 30, 2008, compared to $6.9 million at December 31, 2007." *** Highlights from the Quarter: -- "On April 18, 2008 we borrowed $11 million at an interest rate of 13% payable semiannually and due in 2011. The loan requires us to maintain certain cash balances, to meet certain EBITDA targets and to maintain at least 10,250 ATMs (inclusive of the ATMs we acquired from Access To Money). Proceeds from this loan were used primarily to pay off the remaining balance of our Term Loan B, the $2.5 million settlement payment with eFunds Corporation and the cash portion of the purchase price of Access To Money. In addition, we issued warrants to the lender to purchase 12,500,000 shares in aggregate of our common stock. -- "On April 18, 2008 we acquired Access To Money, one of the nation's largest independent ATM deployers with approximately 4,248 transacting ATMs, for $4.2 million in cash, 3.6 million shares of common stock and a note payable to the owner for approximately $9.8 million. We are currently engaged in the integration of this acquisition." At June 30, 2008, the company's balance sheet showed total assets of $127,940,000, total liabilities $107,691,000, and total shareholders' equity of $18,749,000. A full-text copy of the company's Form 10-Q is available for free at http://researcharchives.com/t/s?32a7 Amendment to Unit's Cash Provisioning Agreement TRM Corp.'s subsidiary TRM ATM Corporation entered into a Cash Provisioning Agreement with Genpass Technologies LLC, doing business as Elan Financial Services and Pendum, Inc., on August 28, 2007. The Agreement provides that Elan will supply cash, through the services of Pendum, an armored car carrier, to TRM's unit for use in the operation of its ATMs. The term of the Agreement is for a period of one year and automatically renews for additional one-month periods unless either party gives the other parties notice of its intent to terminate. TRM ATM and Elan agreed that the initial 90 days of the Agreement will be a pilot period intended for the company to evaluate the performance of the Elan program. TRM ATM is responsible for the payment of fees related to the use of the cash. On Aug. 14, TRM Corp. disclosed that TRM ATM, Elan and Pendum entered into Amendment No. 1 to the Agreement on May 8, 2008, which changed the term to five years with successive one-month renewal periods until terminated. About TRM Corp. Headquartered in Portland, Ore., TRM Corporation (OTC: TRMM) -- http://www.trm.com/-- is a consumer services company that provides convenience ATM services in high-traffic consumer environments. TRM operates the second largest non-bank ATM network in the United States. Going Concern Doubt McGladrey & Pullen LLP, in Blue Bell, Pa., expressed substantial doubt about TRM 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 reported that the incurred net losses in 2006 and 2007 of approximately $120.0 million and $8.0 million, respectively. The auditing firm added that it is uncertain if 2008 operations will generate sufficient cash to enable the company to comply with the covenants of the company's loan agreements and to pay its obligations on an ongoing basis. In addition, the auditing firm said that a default under the company's financing agreement with GSO Origination Funding Partners LP may render the debt callable and trigger the cross-default provision in TRM Inventory Funding Trust's Loan and Servicing Agreement. After borrowing $11.0 million under the Lampe Loan Facility in April 2008, and the repayment of the remaining balance with GSO, the company has eliminated possible default that could have triggered additional cross defaults. UNIFI INC: To Hold Annual Stockholders' Meeting on October 29 ------------------------------------------------------------- Charles F. McCoy, Unifi Inc.'s vice president, secretary and general counsel, disclosed on Sept. 18, 2008, that the Annual Meeting of Shareholders of Unifi, Inc. will be held at the company's corporate headquarters at 7201 West Friendly Avenue in Greensboro, North Carolina, on Wednesday, October 29, 2008, at 9:00 a.m. Eastern Daylight Savings Time. At the meeting, shareholders will be asked: 1. To elect ten directors to serve until the next Annual Meeting of Shareholders or until their successors are duly elected and qualified. Nominees: 1) William J. Armfield, IV, 2) R. Roger Berrier, Jr., 3) Archibald Cox, Jr., 4) William L. Jasper, 5) Kenneth G. Langone, 6) Chiu Cheng Anthony Loo, 7) George R. Perkins, Jr., 8) William M. Sams, 9) G. Alfred Webster, 10) Stephen Wener. 2. To approve the 2008 Unifi, Inc. Long-Term Incentive Plan. 3. To transact other business as may properly come before the meeting or any adjournment or adjournments thereof. The Board of Directors, under the provisions of the Company's By-Laws, has fixed the close of business on Sept. 10, 2008, as the record date for determination of Shareholders entitled to notice of and to vote at the Annual Meeting of Shareholders. The transfer books of the company will not be closed. A full text copy of Unifi's Proxy Statement is available for free at http://researcharchives.com/t/s?32a1 Annual Report Filed Unifi, Inc., disclosed in a regulatory filing dated Sept. 12, 2008, with the Securities and Exchange Commission that for the fiscal year ended June 29, 2008, it posted a net loss of $16.15 million on net sales of $713.34 million compared with a net loss of $115.79 million on net sales of $690.30 million in the previous year. The company disclosed in its Form 10-K that: "Although the Company had a net loss of $16.2 million in fiscal year 2008, the Company generated $13.7 million of cash from continuing operations in fiscal year 2008 compared to $10.6 million for fiscal year 2007. The fiscal year 2008 net loss was adjusted positively for non-cash income and expense items such as depreciation and amortization of $41.6 million, a decrease in inventories of $14.1 million, the impairment charge related to equity affiliates of $10.9 million, restructuring charges of $4.0 million, income from unconsolidated equity affiliates net of distributions of $3.1 million, fixed asset impairment charges of $2.8 million, prepaid expenses of $1.7 million, stock based compensation expense of $1.0 million, increases in income taxes of $0.4 million, and provision for bad debt of $0.2 million, offset by decreases in reductions in accounts payable and accrued expenses of $21.8 million, decreases in deferred taxes of $15.0 million, increases in accounts receivable of $5.2 million, gains from the sale of capital assets of $4.0 million, income from discontinued operations of $3.2 million, and decreases in other non-current liabilities of $0.7 million." At June 29, 2008, the company's balance sheet showed $591.53 million in total assets, $80,570,000 in total current liabilities, $204.36 million in long-term debt and other liabilities, $0.92 million in deferred income taxes, and $305.66 million in total shareholders' equity. A full-text copy of the company's Form 10-K is available for free at http://researcharchives.com/t/s?32a0 Termination of Reliance Agreement The Troubled Company Reporter reported on July 4, 2008, that Unifi Kinston, LLC, a wholly owned subsidiary of Unifi, Inc., and Reliance Industries USA, Inc., entered into an Asset Purchase Agreement, which provides for the sale of all remaining assets and structures, located at the Unifi Kinston's polyester manufacturing facility in Kinston, North Carolina, to Reliance for $12.18 million. Out of the proceeds from the Sale, Unifi Kinston will pay E.I. DuPont de Nemours a $3.66 million payment, to satisfy certain demolition and removal obligations created by the sale of these assets. On Aug. 29, 2008, Unifi, Inc. related that on Aug. 27, it was informed by Reliance, that Reliance was terminating the Reliance Agreement and would not be proceeding with the Sale. Unifi retains certain rights to sell these assets located at the Kinston facility for a period of two years from March 20, 2008. If after the two-year period the assets have not been sold, Unifi will convey them to E.I. DuPont de Nemours for no value. About Unifi Headquartered in Greensboro, North Carolina, Unifi Inc. (NYSE: UFI) -- http://www.unifi.com/ -- is a diversified producer and processor of multi-filament polyester and nylon textured yarns and related raw materials. Key Unifi brands include, but are not limited to: aio(R) - all-in-one performance yarns, Sorbtek(R), A.M.Y.(R), Mynx(R) UV, Repreve(R), Reflexx(R), MicroVista(R), and Satura(R). Unifi's yarns and brands are readily found in home furnishings, apparel, legwear, and sewing thread, as well as industrial, automotive, military, and medical applications. * * * On July 3, 2008, the TCR reported that Standard & Poor's Ratings Services revised its outlook on Unifi Inc. to positive from negative. At the same time, S&P affirmed the ratings, including the 'CCC+' corporate credit rating, on the company. Unifi had debt outstanding of $232.5 million at March 31, 2008. The company's 11-1/2% Senior Secured Notes due 2014 carry Moody's Investors Service's Caa2 rating and Standard & Poor's Rating Services' CCC+ rating. UNIPROP MANUFACTURED: June 30 Balance Sheet Upside-Down by $21.4MM ------------------------------------------------------------------ Uniprop Manufactured Housing Communities Income Fund's balance sheet at June 30, 2008, showed $17,133,042 in total assets and $38,555,587 in total liabilities, resulting in a $21,422,545 partners' deficit. The company reported a net loss of $436,362 on total income of $140,383 for the second quarter ended June 30, 2008, compared with a net loss of $959,031 on total income of $163,328 in the same period last year. The $22,945 decrease in gross revenues from continuing operations was due to a decrease in occupancy at the Old Dutch Farms property due to economic conditions in southeastern Michigan. This decrease was offset by a decrease of $43,304 in total operating expenses. The company classified the Aztec Estates, Kings Manor and Park of Four Seasons properties communities and their associated financial results as "discontinued operations" in the company's financial statements for the first and second quarters of 2008. Loss from these properties was $384,616 for the second quarter of 2008. This compared to a loss from discontinued operations of $884,894 for the same quarter in 2007. On July 11, 2008, a private buyer agreed to purchase both the Kings Manor and Park of Four Seasons properties for $23,741,572 less closing costs of $946,000 for net proceeds of $22,795,572, all of which was used to retire debt. The company estimates a gain on the sale of approximately $17,480,300. Full-text copies of the company's financial statements for the quarter ended June 30, 2008, are available for free at: http://researcharchives.com/t/s?32b1 Going Concern Doubt The company incurred a net loss of $436,362 for the second quarter of 2008, and had an accumulated deficit of $21,422,545 as of June 30, 2008. The company expects to deplete its liquid resources during the third or fourth quarter of fiscal 2008. The net proceeds from the sale of the Kings Manor and Park of Four Seasons properties in July 2008 were all used to pay down the mortgage debt. These factors raise substantial doubt about the company's ability to continue as a going concern. About Uniprop Headquartered in Birmingham, Michigan, Uniprop Manufactured Housing Communities Income Fund -- http://www.uniprop.com/-- a Michigan Limited Partnership, was originally formed to acquire, maintain, operate and ultimately dispose of income producing residential real properties consisting of four manufactured housing communities. The general partner of the partnership is P. I. Associates Limited Partnership. VILLA DEL SOL: Section 341(a) Meeting Scheduled for October 7 ------------------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of Villa Del Sol at Cape San Blas' creditors on Oct. 7, 2008, at 9:30 a.m., at 110 E. Park Avenue, Room 004, U.S. Trustee Mtg. Room. This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Alpharetta, Georgia-based Villa Del Sol at Cape San Blas LLC filed for Chapter 11 protection on Aug. 29, 2008, (Bankr. N.D.Fla. Case No. 08-40589). Thomas B. Woodward, Esq., at Tallahassee, Florida, represents the Debtor in its restructuring effort. The company listed total assets of $27,260,000 and total debts of $16,508,031 when it filed for bankruptcy. VILLA DEL SOL: Creditor Asks Court to Dismiss Chapter 11 Case ------------------------------------------------------------- SPCP Group, LLC, a secured creditor of Villa Del Sol at Cape San Blas, LLC, asks the U.S. Bankruptcy Court for the Northern District of Florida to dismiss the Debtor's Chapter 11 case. SPCP claims that the Debtor filed for Chapter 11 in "bad faith" and to delay a Florida state court action and a foreclosure sale. The Debtor owns a real property in Gulf County, Florida, and a real property in Forsyth County, Georgia. On June 23, 2004, the Debtor executed and delivered to Vanguard Bank & Trust company, a promissory note in the original principal sum of $16,500,000. The Note was secured by, inter alia, Mortgage. The Mortgage was recorded in the Official Records Book 344 of the Public Records of Gulf County, Florida, and mortgaged the FL Property, then owned by the Debtor. To further secure the indebtedness evidenced by the Note, the Debtor executed and delivered to Vanguard that the Assignment of Rents and Leases, which was recorded in the Official Records Book 344. On April 2, 2007, the Debtor executed and delivered to Vanguard a renewal promissory note in the original principal sum of $15,683,333. The Debtor executed and delivered to Vanguard mortgage modification agreements. In May 2008, Vanguard assigned to SPCP, inter alia, all of its rights, title and interest in the Renewal Note, the Mortgage, the Assignment of Rents and the Mortgage Modifications. The Debtor has materially defaulted under the Loan Documents by failing to pay all indebtedness due Nov. 2, 2007. When the Debtor failed to pay the loan on its maturity date, SPCP filed the action seeking to foreclose the FL Property in the Circuit Court for the 14 Judicial Circuit in and for Gulf County. On Aug. 1, 2008, Gary Barnes, Esq., submitted a Notice of Sale Under Power to the Forsyth County News to invoke Georgia's non- judicial foreclosure procedure to foreclose on the GA Property. The necessary publication to foreclose on the GA Property ran in the Forsyth County News on Aug. 4, 11, 18 and 25, 2008. Under Georgia procedure, the foreclosure sale was scheduled on Sept. 2, 2008. On Aug. 27, 2008, GA counsel received a Quit Claim Deed returning the GA Property to the Debtor subject to the GA Proceeding. On Aug. 29, 2008, before the scheduled foreclosure sale in the GA Proceeding, the Debtor filed the instant Chapter 11 case, automatically staying the pending foreclosure sale and all other matters in the Florida State Action. On Sept. 3, 2008, the Court authorized the Debtor to continue to operate the FL Property and the GA Property. The Debtor has filed a notice of no financial statements or profit and loss statements, as well as a notice of no requirement to file federal tax returns based on zero income. The Debtor told the Court that it is unclear how the Debtor will submit a reorganization plan when it has not made any income for the last two years and does not have any financial statements. Alpharetta, Georgia-based Villa Del Sol at Cape San Blas LLC filed for Chapter 11 protection on Aug. 29, 2008, (Bankr. N.D.Fla. Case No. 08-40589). Thomas B. Woodward, Esq., at Tallahassee, Florida, represents the Debtor in its restructuring effort. The company listed total assets of $27,260,000 and total debts of $16,508,031 when it filed for bankruptcy. VILLA DEL SOL: Seeks to Employ Thomas Woodward as Counsel --------------------------------------------------------- Villa Del Sol at Cape San Blas asks the U.S. Bankruptcy Court for the Northern District of Florida for permission to hire Thomas B. Woodward as bankruptcy counsel. Mr. Woodward will give the Debtor legal advice with respect to its powers and duties as Debtor-in-Possession. Mr. Woodward will charge the Debtor these hourly rates: Thomas B. Woodward $300 Legal Research Assistant $100 The Debtor assures the Court of Mr. Woodward's disinterestedness, saying that Mr. Woodward has no connection with the Debtor, the creditors, or any other party in interest. Alpharetta, Georgia-based Villa Del Sol at Cape San Blas LLC filed for Chapter 11 protection on Aug. 29, 2008, (Bankr. N.D.Fla. Case No. 08-40589). Thomas B. Woodward, Esq., at Tallahassee, Florida, represents the Debtor in its restructuring effort. The company listed total assets of $27,260,000 and total debts of $16,508,031 when it filed for bankruptcy. VIRGIN MOBILE: Appoints Two New Board Members From SK Telecom ------------------------------------------------------------- Virgin Mobile USA, Inc., disclosed on Sept. 16, 2008, the appointment of Richard Chin and Sungwon Suh to its board of directors following Virgin Mobile USA's recent acquisition of Helio LLC and SK Telecom's related investment in Virgin Mobile USA. "The addition of SK Telecom as a key strategic partner and subsequent appointment of Sungwon and Richard to our board will provide us with additional insight and experience with innovative services, opening new avenues for Virgin Mobile USA to strengthen its position in the market," said Dan Schulman, Virgin Mobile USA CEO. "SK Telecom is the leading wireless provider in Korea and known around the world for advancing the industry on a global scale. We look forward to tapping into this expertise and personal contributions of Sungwon and Richard. Both gentlemen have valuable telecom industry experience that we are eager to acquire." Richard Chin is President of SK Telecom Americas, a U.S. subsidiary of SK Telecom. In this role, he oversees all U.S. businesses, with a goal of developing various opportunities to access and penetrate the market. In addition to developing a U.S. market entrance strategy, Chin leads development in organic growth engine solutions as well as new business opportunities in and outside of the telecom industry. Prior to heading SK Telecom Americas, he held several positions at Motorola, including Corporate Vice President of Global Product Marketing and Business Ventures & Development. Chin has also held senior positions at Searle Pharmaceuticals, NutraSweet Company, Kraft Foods, and Accenture; he holds a J.D. from John Marshall Law School and a Bachelor's Degree from the University of Chicago. Sungwon Suh is Executive Vice President, Head of Global Strategy and Investment for SK Telecom. In this role, Sungwon oversees SK Telecom's overall globalization drive via partnerships and M&A activities. He was also a member of the board for Helio. Formerly Senior Vice President of Corporate Development for SK Telecom, Suh also served as Senior Vice President of Strategic Planning for SK Group, one of Korea's leading conglomerates with interests in energy, telecommunications, trading and distribution. Prior to joining SK Group, he was an associate partner at McKinsey Consulting. Suh holds an MBA degree from Kellogg School, Northwestern University. The Troubled Company Reporter reported on Sept. 23, 2008, that SK Telecom Co., Ltd. disclosed in a Securities and Exchange Commission filing that it may be deemed to beneficially own 52,040,314 shares of Virgin Mobile USA, Inc.'s common stock, representing 63.1% of the shares issued and outstanding. About SK Telecom SK Telecom -- http://www.sktelecom.com/-- is a wireless communication provider in Korea, where it has more than 22 million subscribers taking up more than 50% of the total market. The company established in 1984, reached KRW 11.28 trillion in revenue in 2007. SK Telecom was the first to launch and commercialize CDMA, CDMA 2001x, CDMA EV-DO and HSDPA networks, and it currently provides cellular, wireless internet, mobile media, global roaming service and more. 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 Reporter on Aug. 18, 2008, at June 30, 2008, 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. VIRGIN MOBILE: CFO John Feehan to Leave in Mid-November ------------------------------------------------------- On Sept. 17, 2008, Virgin Mobile USA said that its Chief Financial Officer, John Feehan, will be leaving the Company in mid-November to relocate to the Phoenix area and become CFO of LifeLock(R), a company engaged in identity theft protection. Mr. Feehan joined Virgin Mobile USA in 2001 as one of the Company's first employees, and was named chief financial officer in 2006 following almost five years of service as vice president of financial operations. Dan Schulman, chief executive officer for Virgin Mobile USA, said that Feehan has been instrumental in helping to set the business and financial course that led Virgin Mobile USA to its current position in the competitive U.S. wireless sector and growth to over $1 billion in annual revenues in less than three years. "From the moment John joined Virgin Mobile USA, he demonstrated the ability to lend strategic guidance and insight to all aspects of our growing business," said Schulman. "We will miss John as both a colleague and a friend, but wish him the best of success in this new endeavor that will allow him to return to his passion for building nascent businesses." Mr. Feehan said, "It has been a joy and a privilege to work with Dan and this management team. I am very proud of what we've accomplished here, and am comfortable knowing that the foundation has been built for future success." According to Mr. Schulman, Mr. Feehan will remain with Virgin Mobile USA for the next 60 days, through the Company's third quarter earnings report, while an external search to fill the CFO position takes place. Mr. Schulman added that the Company's guidance, last provided on its second quarter earnings call, remains unchanged. Prior to joining Virgin Mobile USA, Mr. Feehan served as CFO for SAGE BioPharma, Inc., a pharmaceutical and medical device company specializing in Infertility and women's health. His career began in Public Accounting at PriceWaterhouseCoopers and has included senior level finance positions at publicly traded companies. He is a graduate of St. Joseph's University in Philadelphia. 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 Reporter on Aug. 18, 2008, at June 30, 2008, 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. VIRGIN MOBILE: Sprint Ventures Discloses 63.1% Equity Stake ----------------------------------------------------------- Sprint Ventures Inc. disclosed in a Securities and Exchange Commission filing that it may be deemed to beneficially own 52,040,316 shares of Virgin Mobile USA, Inc.'s common stock, representing 63.1% of the shares issued and outstanding. The beneficial ownership results from: -- Sprint Ventures' ownership of a limited partnership interest in Virgin Mobile USA, L.P., which interest is initially exchangeable for 12,058,626 shares of Class A Common Stock of the the company, and Sprint Ventures' ownership of one share of the Issuer's Class B Common Stock, which is entitled to a number of votes that is equal to the total number of shares of Class A Common Stock for which such limited partnership interest is exchangeable; -- 25,847,772 shares of Class A Common Stock beneficially owned by the Virgin Group; and -- 14,133,918 shares of Class A Common Stock beneficially owned by SK Telecom. Sprint Ventures, the Virgin Group and SK Telecom may be deemed to share beneficial ownership of the shares as a result of being parties to the Amended and Restated Stockholders Agreement. 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 Reporter 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. WASHINGTON MUTUAL: JPMorgan Buys Banking Operations for $1.9BB -------------------------------------------------------------- JPMorgan Chase acquired the banking operations of Washington Mutual Bank in a transaction facilitated by the Federal Deposit Insurance Corporation. All depositors are fully protected and there will be no cost to the Deposit Insurance Fund. "For all depositors and other customers of Washington Mutual Bank, this is simply a combination of two banks," said FDIC Chairman Sheila C. Bair. "For bank customers, it will be a seamless transition. There will be no interruption in services and bank customers should expect business as usual come Friday morning." JPMorgan Chase acquired the assets, assumed the qualified financial contracts, and made a payment of $1.9 billion. Claims by equity, subordinated and senior debt holders were not acquired. "WaMu's balance sheet and the payment paid by JPMorgan Chase allowed a transaction in which neither the uninsured depositors nor the insurance fund absorbed any losses," Ms. Bair said. Washington Mutual Bank also has a subsidiary, Washington Mutual FSB, Park City, Utah. They have combined assets of $307 billion and total deposits of $188 billion. Thursday evening, Washington Mutual was closed by the Office of Thrift Supervision and the FDIC named receiver. Dan Fitzpatrick, Robin Sidel, and David Enrich at The Wall Street Journal earlier reported that Washington Mutual executives and directors are considering alternatives to a planned sale of its assets. WSJ said that the alternatives could include raising additional capital possibly with assistance from federal regulators, but declining housing prices and deepening tumult in the U.S. financial system have made it much harder to attract outsider investors. According to WSJ, a source said that bidders for WaMu assets include Citigroup Inc., J.P. Morgan Chase & Co., Wells Fargo & Co., and Banco Santander SA of Spain. WSJ states that WaMu's expected $19 billion loss on its mortgage portfolio over the next two and a half years has been a major stumbling block to the closure of a deal. WSJ reported that some would-be bidders favor a government- assisted takeover. The Federal Deposit Insurance Corp. would seize control of WaMu's banking unit and then sell its deposits to another bank, WSJ said. The buyer, according to WSJ, could pick the branches and assets it wanted to purchase along with WaMu's deposits, leaving the government to grapple with "riskier leftovers." Melissa Allison at The Seattle Times said that before WaMu can attract a buyer or more capital, it will probably have to wait for details about a mortgage rescue by the government, specifically on how many bad loans it might unload. According to Seattle Times, bank analyst Howard Shapiro doubts WaMu will find a buyer without a mortgage-bailout plan. "When there's clarity about how and when WaMu can dispose of troubled mortgage assets, you'll see suitors start to line up," WSJ quoted Mr. Shapiro as saying. Ladenburg Thalmann bank analyst, Richard Bove, believes that the government is urging WaMu to sell, Seattle Times states. Mr. Bove, according to Seattle Times, said that the government will assist a sale and it does not matter whether that money comes from the Federal Deposit Insurance Corp funds or a new bailout plan. About JPMorgan JPMorgan Chase & Co. is a financial holding company. JPMorgan Chase's principal bank subsidiaries are JPMorgan Chase Bank, National Association, a national banking association with branches in 17 states, and Chase Bank USA, National Association, a national bank that is the Company's credit card issuing bank. JPMorgan Chase's principal non-banking subsidiary is J.P. Morgan Securities Inc., its United States investment banking firm. The bank and non-bank subsidiaries of JPMorgan Chase operate nationally, as well as through overseas branches and subsidiaries, representative offices and subsidiary foreign banks. About Federal Deposit Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 8,451 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars -– insured financial institutions fund its operations. About Washington Mutual Inc. Washington Mutual Inc. (NYSE: WM) -- http://www.wamu.com/-- is a consumer and small business banking company with operations in United States markets. The Company is a savings and loan holding company. It owns two banking subsidiaries, Washington Mutual Bank and Washington Mutual Bank fsb, as well as numerous non-bank subsidiaries. The company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. As reported in the Troubled Company Reporter on Sept. 16, 2008, Standard & Poor's Ratings Services lowered its counterparty credit rating on WaMu to 'BB-/B' from 'BBB-/A-3'. As reported by the TCR on Sept. 22, Fitch Ratings placed the ratings of Washington Mutual, Inc. ('BBB-/F3'), Washington Mutual Bank ('BBB/F3') and related entities on Rating Watch Evolving. This action reflects recent market developments, specifically, the waiver by WaMu's largest investors of the price reset rights under their investment agreement and warrants associated with their June 2008 capital investments. WASHINGTON MUTUAL: Fitch Chips LT Issuer Default Rating to 'B-' --------------------------------------------------------------- There is an increased likelihood of a partial sale of Washington Mutual, Inc. leading to greater uncertainty for debt holders, according to Fitch Ratings, which has downgraded WaMu's long-term Issuer Default Rating to 'B-' from 'BBB-' and placed WaMu and subsidiaries on Rating Watch Evolving. Fitch has also downgraded and placed on Rating Watch Evolving the bonds issued by WM Covered Bond Program to 'BBB+' from 'AA'. The multiple notch downgrades reflect the heightened uncertainty associated with WaMu's debt obligations in light of the difficult market conditions and increasingly limited options to bolster capital. Last week, TPG Capital and related entities waived their price reset rights under their investment agreement and warrants associated with their June 2008 capital investment, clearing the way for a potential transaction. However, increasingly difficult market conditions render potential solutions more challenging, particularly without some form of assistance. Scenarios involving the sale of parts of WaMu appear more likely than a merger at this time. Fitch believes that WaMu's retail branch network, with its strong market share on the west coast and in Florida, along with a growing presence in New York City, remains very attractive to a number of stronger financial institutions. WaMu's loan portfolio remains a concern to potential buyers due to high levels of delinquencies and uncertain housing price trends. In any scenario other than a merger, buyers would be most attracted to the retail banking operations of the bank, including WaMu's approximately $140 billion in core deposits; the holding company's only significant assets are cash and its equity investment in the bank. As a result, any partial sale would likely be detrimental to WaMu's holding company creditors and potentially to unsecured debt holders at the bank level because they are effectively subordinated to depositors and the considerable amount of secured financing (including Federal Home Loan Bank Advances, Covered Bonds, and Federal Reserve borrowings). While a combination with a stronger banking organization remains possible, and would result in an improvement in the credit position of WaMu's creditors, the exceedingly high level of general market uncertainty at the present time makes a merger significantly less likely at this time. WM Covered Bonds: The downgrade of Washington Mutual Bank, which acts as a debtor of the mortgage bonds securing the debt issued by WM Covered Bond Program leads to a downgrade of WMCBP outstanding debt to 'BBB+' from 'AA'. The combination of WMB current IDR of 'BB-' and of Fitch's assessment of the risk of an interruption of payment on the covered bonds upon an insolvency of WMB limits the maximum rating the covered bonds can reach to 'BBB+'. The current maximum asset percentage of 67% is deemed sufficient to withstand a 'BBB+' stress scenario. Fitch has downgraded and placed these ratings on Rating Watch Evolving: Washington Mutual Inc. -- Long-term IDR to 'B-' from 'BBB-'; -- Senior debt to 'B-' from 'BBB-'; -- Short-term IDR to 'B' from 'F3'; -- Short-term debt to 'B' from 'F3'; -- Subordinated debt to 'CCC' from 'BB+'; -- Preferred stock to 'CC' from 'BB-'; -- Individual to 'E' from 'C/D'. Washington Mutual Bank -- Long-term IDR to 'BB-' from 'BBB'; -- Long-term deposits to 'BBB-' from 'BBB+'; -- Senior debt to 'B' from 'BBB'; -- Subordinated debt to 'B-' from 'BBB-'; -- Short-term IDR to 'B' from 'F3'; -- Short-term deposits to 'F3' from 'F2'. -- Individual to 'D/E' from 'C'. Bank United FSB -- Subordinated debt to 'B-' from 'BBB-'. Bank United Corp. -- Subordinated debt to 'CCC' from 'BB+'. Providian Financial Corp -- Senior debt to 'B-' from 'BBB-'. Providian National Bank -- Long Term Deposits to 'BBB-' from 'BBB+'. Washington Mutual Preferred Funding (Cayman) I Ltd. Washington Mutual Preferred Funding Trust I (Delaware) Washington Mutual Preferred Funding Trust II Washington Mutual Preferred Funding Trust III Washington Mutual Preferred Funding Trust IV -- REIT Preferred to 'CC' from 'BB-'. Washington Mutual Capital I Providian Capital I -- Trust Preferred to 'CC' from 'BB-'. These ratings are unchanged: Washington Mutual Inc. -- Support at '5'; -- Support Floor at 'NF'. Washington Mutual Bank -- Support at '3'; -- Support Floor at 'BB-'. WASHINGTON MUTUAL: DBRS Cuts Issuer & Senior Debt Rating to 'B' --------------------------------------------------------------- DBRS has downgraded the Issuer & Senior Debt rating of Washington Mutual, Inc. (WaMu, the Holding Company or the Company) to B from BB. Concurrently, DBRS has confirmed the BBB(low) Deposit & Senior Debt rating of Washington Mutual Bank. The trend on the Bank's ratings remain Negative, however, the ratings of the Holding Company have been placed Under Review with Negative Implications. The ratings action reflects DBRS's view that the current market events have continued to reduce the Company's flexibility, should it need to protect its core retail bank franchise. Exacerbating these concerns is the continued uncertainty as to the form and execution of the proposed troubled asset relief program currently before the United States Congress. While this program could well be positive for WaMu, it has significantly elevated uncertainty until the program takes its final form. Moreover, DBRS is concerned that the ongoing capital market disruptions have reduced WaMu's ability to generate additional capital. Given the current economic environment, the further declines in home prices and suppressed capital market activity, DBRS believes that risk has increased meaningfully at the Holding Company. This opinion has led DBRS to take negative rating actions on all securities at the Holding Company level. The confirmation of the Bank's investment grade Deposit & Senior Debt rating reflects DBRS's view that Washington Mutual's retail banking franchise remains attractive and largely intact despite the current market environment. WASHINGTON MUTUAL: Moody's Trims Ratings on Class D Certs. to Ba2 ----------------------------------------------------------------- Moody's Investors Service has downgraded the ratings on 5 classes of credit card receivable-backed securities issued through the Washington Mutual Master Trust. The rationale for this rating action is identical to that provided for the September 15 downgrade of 26 other classes of notes issued from the Washington Mutual credit card trusts. The 5 classes of certificates referenced in ratings action, were inadvertently omitted from the press release issued on September 15. The complete rating actions are: Issuer: Washington Mutual Master Trust -- Class D Certificates, Variable Funding Series 2004-G, downgraded to Ba2 from Baa2 -- Class A Certificates, Variable Funding Series 2007-A, downgraded to A1 from Aaa -- Class B Certificates, Variable Funding Series 2007-A, downgraded to A3 from Aa2 -- Class C Certificates, Variable Funding Series 2007-A, downgraded to Baa3 from A2 -- Class D Certificates, Variable Funding Series 2007-A, downgraded to Ba2 from Baa2 WASHINGTON MUTUAL: Moody's Lowers Ratings on 26 Classes of Trust ---------------------------------------------------------------- Moody's Investors Service has downgraded the ratings on 26 classes of credit card receivable-backed securities issued through the Washington Mutual Master Note Trust and the Washington Mutual Master Trust. The rating action concludes the review that began on June 9, 2008. Rationale The downgrades were prompted by a further weakening of the Trust's seller/servicer, Washington Mutual Bank, and Moody's view that that the current economic environment makes certain risk elements of WaMu's credit card program more vulnerable to significant performance deterioration. Specifically, Moody's believes WaMu's focus on sub- and near-prime credit card originations and the Trust's collateral concentration in states which have been particularly hard hit by the housing-led economic downturn pose incremental credit risk to noteholders. The new rating levels incorporate the risks associated with Moody's view that there is now a higher degree of likelihood that the card portfolio will become unprofitable. Moody's analysis considered the increased potential that further deterioration in performance could constrain access to funding and that the economic viability of the credit card program could be diminished. Downgrade of the Bank On September 11, 2008, Moody's downgraded the long-term deposit and issuer ratings of the Bank to Baa3 from Baa2, and the short- term rating to Prime-3 from Prime-2. The outlook is negative. Moody's said the downgrade resulted from WaMu's reduced financial flexibility, deteriorating asset quality, and expected franchise erosion as the bank continues to face adverse performance across its asset base. Its ability to deal with this issue is constrained by prospective earnings that are inadequate to restore or attract capital. This has complicated WaMu's ability to access external capital. Further, as a result, its funding sources have become more concentrated. Collateral Performance Deterioration The performance of the underlying receivables in the Trust is generally characterized by charge-off rates and yield that exceed industry averages and a payment rate that is lower than the industry average. As of July 2008, the Trust had a three-month average excess spread margin of approximately 4.5%, compared to the industry average, which was approximately 6.7% in July. Looking ahead, Moody's expects further deterioration in some of the key collateral performance metrics. Consequently, Moody's has revised its expected net charge-off rate range for the Trust to 14% - 16% from 10% - 12% and its expected principal payment rate range to 6.5% - 8.5% from 8% - 10%. The complete rating actions are: Issuer: Washington Mutual Master Note Trust -- $775,000,000 Floating Rate Class 2005-A2 Asset Backed Notes, downgraded to A1 from Aaa -- $125,000,000 Floating Rate Class 2005-M2 Asset Backed Notes, downgraded to A3 from Aa2 -- $150,000,000 Fixed Rate Class 2005-B2 Asset Backed Notes, downgraded to Baa3 from A2 -- $150,000,000 Floating Rate Class 2005-C2 Asset Backed Notes, downgraded to Ba2 from Baa2 -- $900,000,000 Floating Rate Class 2006-A1 Asset Backed Notes, downgraded to A1 from Aaa -- $750,000,000 Floating Rate Class 2006-A2 Asset Backed Notes, downgraded to A1 from Aaa -- $1,250,000,000 Floating Rate Class 2006-A3 Asset Backed Notes, downgraded to A1 from Aaa -- $500,000,000 Floating Rate Class 2006-A4 Asset Backed Notes, downgraded to A1 from Aaa -- $300,000,000 Floating Rate Class 2006-M1 Asset Backed Notes, downgraded to A3 from Aa2 -- $200,000,000 Fixed Rate Class 2006-B1 Asset Backed Notes, downgraded to Baa3 from A2 -- $200,000,000 Floating Rate Class 2006-C1 Asset Backed Notes, downgraded to Ba2 from Baa2 -- $150,000,000 Floating Rate Class 2006-C2 Asset Backed Notes, downgraded to Ba2 from Baa2 -- $200,000,000 Floating Rate Class 2006-C3 Asset Backed Notes, downgraded to Ba2 from Baa2 -- $1,100,000,000 Floating Rate Class 2007-A1 Asset Backed Notes, downgraded to A1 from Aaa -- $875,000,000 Floating Rate Class 2007-A2 Asset Backed Notes, downgraded to A1 from Aaa -- $425,000,000 Fixed Rate Class 2007-A4 Asset Backed Notes, downgraded to A1 from Aaa -- $200,000,000 Floating Rate Class 2007-A5 Asset Backed Notes, downgraded to A1 from Aaa -- $150,000,000 Fixed Rate Class 2007-B1 Asset Backed Notes, downgraded to Baa3 from A2 -- $125,000,000 Floating Rate Class 2007-C1 Asset Backed Notes, downgraded to Ba2 from Baa2 -- Class 2005-D2 Variable Funding Asset Backed Notes, downgraded to B3 from Ba3 -- Class 2007-C2 Variable Funding Asset Backed Notes, downgraded to Ba2 from Baa2 Issuer: Washington Mutual Master Trust -- Class E Certificates, Variable Funding Series 2004-G, downgraded to B3 from Ba3 -- Class A Certificates, Variable Funding Series 2007-B, downgraded to A1 from Aaa -- Class B Certificates, Variable Funding Series 2007-B, downgraded to A3 from Aa2 -- Class C Certificates, Variable Funding Series 2007-B, downgraded to Baa3 from A2 -- Class D Certificates, Variable Funding Series 2007-B, downgraded to Ba2 from Baa2 Washington Mutual Bank is a wholly-owned subsidiary of Washington Mutual, Inc. (Ba2) headquartered in Seattle, Washington. As of June 30, 2008 Washington Mutual, Inc. had reported assets of $310 billion. WASHINGTON MUTUAL: S&P Junks Preferred Stock and Credit Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its counterparty credit rating on Washington Mutual Inc. to 'CCC/C' from 'BB-/B'. At the same time, S&P affirmed the 'BBB-/A-3' counterparty credit rating on Washington Mutual Bank because of the breadth of its retail franchise. "The downgrade was due to the increased likelihood that a potential sale of the company may not involve the whole company, which increases the risk of default for holding company creditors," said Standard & Poor's credit analyst Victoria Wagner. S&P also lowered the preferred stock rating to 'CC' from 'B-' to reflect the incremental risk of default of these securities. The outlook remains negative. According to press reports, banking regulators could be intervening in the potential sale of WAMU. Depending on how a purchase transaction is structured, it is possible that the company may not be acquired in its entirety. If this is the case, holding company creditors face losses, because the assets at the holding company are not sufficient to cover the full repayment of the $14.4 billion of rated unsecured debt outstanding ($4.1 billion of senior debt, $1.6 billion of subordinated debt, and $8.65 billion of capital securities). WAMU's only operating subsidiary is the thrift. Given the stresses facing the broader U.S.-based financial institutions sector, the available pool of large bank acquirers that are not capital constrained or devoid of their own mortgage credit stress is quite small, raising the possibility that the purchase may be only partial. As of June 30, Washington Mutual Bank had total assets of $307 billion, total deposits of $188 billion, and Tier 1 core capital of $21.2 billion (Tier 1 risk-based capital 8.4% and tangible equity of 7.02%). S&P will continue to monitor the developments surrounding WAMU, both in terms of its financial fundamentals and its potential sale and the structure of such sale. S&P may revise the outlook to developing if it receives more definitive news regarding the final terms of a sales transaction and the potential benefit that Treasury's new bailout plan may offer to WAMU as an independent company. WAVE SYSTEMS: To Sell Series I Convertible Preferred Stock ---------------------------------------------------------- Wave Systems Corp. disclosed in a Securities and Exchange Commission filing that on Sept. 11, 2008, it entered into Subscription Agreements with certain purchasers pursuant to which Wave will sell a total of 172 shares of Series I Convertible Preferred Stock, par value $0.01 per share, for an aggregate purchase price of approximately $756,800. Each share of the Preferred Stock will be convertible into 10,000 shares of Class A Common Stock, par value $0.01 per share: -- at the election of the holder thereof at any time; or -- automatically on the date on which the average closing price per share of Common Stock for the 15 consecutive trading day period then ended equals or exceeds $1.10. Dividends will accrue at 8% per annum, payable every six months initially in either cash or in shares of Common Stock at a rate equal to $.44 per share of Common Stock. After five years, such regular dividend payments must be made in cash. The Preferred Stock would participate on an as converted basis with respect to any dividends paid in respect of the Common Stock. There will be no anti-dilution protection (other than proportionate adjustments for stock splits and similar events). Prior to conversion, the Preferred Stock will have no voting rights other than consent rights in respect of modifications to the terms of the Preferred Stock. The Preferred Stock (including the shares issuable upon conversion of the Preferred Stock) are to be drawn-down off of a shelf registration statement declared effective by the Securities and Exchange Commission on June 23, 2008. On Sept. 11, 2008, Security Research Associates, Inc. entered into a placement agency agreement with Wave in which they agreed to act as placement agent in connection with this offering. In connection with this offering, Wave agreed to pay the Placement Agent a cash fee of $45,408 -- 6% of the gross proceeds paid to Wave in connection with this offering -- and will issue to the Placement Agent a warrant to purchase up to 103,200 shares of Common Stock at an exercise price of $0.50 per share. The warrant is exercisable for 12 months beginning on the 180th day after the issuance of the warrant. The Placement Agent has no obligation to buy any Common Stock from the company. About Wave Systems Headquartered in Lee, Mass., Wave Systems Corp. (Nasdaq : WAVX) -- http://www.wave.com/-- provides software to help solve critical enterprise PC security challenges such as strong authentication, data protection, network access control and the management of these enterprise functions. Going Concern Doubt As reported in the Troubled Company Reporter on March 28, 2008, KPMG LLP, in Boston, expressed substantial doubt about Wave Systems Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm pointed to the company's recurring losses from operations and accumulated deficit. WENTWORTH ENERGY: Malone & Bailey Appointed as New Accountants -------------------------------------------------------------- Wentworth Energy Inc. disclosed in a Securities and Exchange Commission filing that on Sept. 9, 2008, Hein & Associates LLP, Certified Public Accountants of Dallas, Texas resigned as Wentworth Energy's principal independent accountants and Malone & Bailey, PC, Certified Public Accountants of Houston, Texas were appointed in their place. The former principal accountants' reports on the financial statements for the years ended Dec. 31, 2006, and Dec. 31, 2007, contained no adverse opinions, disclaimers of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles, except that their report for each such year expressed substantial doubt about the company's ability to continue as a going concern. The appointment of the new accountants was recommended by the company's audit committee and approved by its board of directors. During the years ended Dec. 31, 2006, and Dec. 31, 2007 and the interim period preceding their resignation, there were no disagreements with the former accountants on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of the former accountants, would have caused them to make reference to the subject matter of the disagreements in connection with their reports. About Wentworth Energy Headquartered in Palestine, Texas, Wentworth Energy Inc. (OTC BB: WNWG) -- http://www.wentworthenergy.com/-- is an independent exploration and production company focused on developing North American oil and natural gas reserves. The company owns a 27,557- acre mineral block in east central Freestone County and west central Anderson County in the active East Texas Basin, as well as an active oil and gas contract drilling company, Barnico Drilling Inc., which has serviced East Texas drilling demand since the late 1970s. Going Concern Doubt Hein & Associates LLP, in Dallas, expressed substantial doubt aobut Wentworth Energy 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 recurring losses from operations and working capital deficiency. Wentworth Energy's balance sheet at March 31, 2008, showed total assets of $41,005,206 and total liabilities of $39,338,109, resulting in a stockholders' deficit of $1,667,097. WESTAFF INC: Westaff USA Unit Receives $1MM Loan from DelStaff LLC -------------------------------------------------------- Westaff, Inc. disclosed in a Securities and Exchange Commission filing that on Sept. 3, 2008, Westaff (USA), Inc., a wholly owned subsidiary, Westaff Support, Inc. and MediaWorld International, wholly owned subsidiaries of Westaff (USA), were advanced a loan in an aggregate principal amount of $1,000,000 from DelStaff, LLC under a loan agreement of Aug. 25, 2008 . John R. Black, Michael R. Phillips and Michael T. Willis, members of the company's board of directors, are managers of DelStaff, LLC and also hold positions with H.I.G. Capital, L.L.C., which is an affiliate of DelStaff, LLC. About Westaff Inc. Based in Walnut Creek, California, Westaff Inc. (Nasdaq: WSTF) -- http://www.westaff.com/-- provides staffing services and employment opportunities for businesses in global markets. Westaff annually employs in excess of 125,000 people and services more than 20,000 client accounts from more than 177 offices located throughout the United States, Australia and New Zealand. * * * The company has incurred operating losses and negative operating cash flow since the second quarter of fiscal 2007, offset by slight operating income in the fourth quarter of fiscal 2007. The company says it it expects to incur additional losses in the future, particularly because of current soft economic conditions. In addition, the company is currently in default under the primary credit facility that it uses to finance its operations. If the company is unable to obtain a waiver or continued forbearance from the U.S. Bank National Association on acceptable terms, the company may be unable to access the funds necessary for its liquidity requirements or may be unable to obtain letters of credit under the facility needed for the company to obtain workers' compensation insurance. In that case, its business and operating results would be adversely affected. WESTAFF INC: Price Rule Breach Spurs Nasdaq Delistment Warning -------------------------------------------------------------- Westaff, Inc. disclosed in a Securities and Exchange Commission filing that on Sept. 10, 2008, it received a letter from The Nasdaq Stock Market indicating that, for the last 30 consecutive business days prior to the date of the letter, the bid price of Westaff's common stock had closed below the minimum $1.00 per share requirement for continued inclusion under Nasdaq Marketplace Rule 4450(a)(5). As of Sept. 16, 2008, Westaff's common stock has not been delisted and continues to be listed on the Nasdaq Global Market. In accordance with Nasdaq Marketplace Rule 4450(e)(2), Westaff has 180 calendar days from the date of the Nasdaq letter, or until March 9, 2009, for the bid price of its common stock to close at $1.00 per share or more for a minimum of 10 consecutive business days to regain compliance. In the event that Westaff does not regain compliance by March 9, 2009, Nasdaq will provide notice to Westaff that its common stock will be delisted. At that time, Westaff would be permitted to appeal Nasdaq's determination to delist Westaff's common stock to a Nasdaq Listing Qualifications Panel. Alternatively, Nasdaq Marketplace Rule 4310(c) may permit, upon approval by Nasdaq, Westaff to transfer its common stock to the Nasdaq Capital Market if Westaff's common stock satisfies all criteria, other than compliance with the minimum bid price rule, for initial inclusion on such market. In the event of such a transfer, the Nasdaq Marketplace Rules provide that Westaff would be afforded an additional 180 calendar days to comply with the minimum closing bid price rule while listed on the Nasdaq Capital Market. About Westaff Inc. Based in Walnut Creek, California, Westaff Inc. (Nasdaq: WSTF) -- http://www.westaff.com/-- provides staffing services and employment opportunities for businesses in global markets. Westaff annually employs in excess of 125,000 people and services more than 20,000 client accounts from more than 177 offices located throughout the United States, Australia and New Zealand. * * * The company has incurred operating losses and negative operating cash flow since the second quarter of fiscal 2007, offset by slight operating income in the fourth quarter of fiscal 2007. The company says it it expects to incur additional losses in the future, particularly because of current soft economic conditions. In addition, the company is currently in default under the primary credit facility that it uses to finance its operations. If the company is unable to obtain a waiver or continued forbearance from the U.S. Bank National Association on acceptable terms, the company may be unable to access the funds necessary for its liquidity requirements or may be unable to obtain letters of credit under the facility needed for the company to obtain workers' compensation insurance. In that case, its business and operating results would be adversely affected. WHITEHALL JEWELERS: Files Amended Schedules of Assets & Debts ------------------------------------------------------------- Whitehall Jewelers, Inc., filed with the U.S. Bankruptcy Court for the District of Delaware, its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property B. Personal Property $246,571,775 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $112,707,780 E. Creditors Holding Unsecured Priority Claims $9,998,822 F. Creditors Holding Unsecured Non-priority Claims $53,988,316 ----------- ----------- TOTAL $246,571,775 $173,694,918 About Whitehall Jewelers Headquartered in Chicago, Illinois, Whitehall Jewelers Holdings Inc. -- http://www.whitehalljewellers.com/-- owns and operates 375 stores jewelry stores in 39 states. The company operates stores in regional and regional shopping malls under the brand names Whitehall Jewellers, Marks Bros. Jewellers and Lundstrom Jewellers. The Debtors' retail stores operate under the names Whitehall (271 locations), Lundstrom (24 locations), Friedman's (56 locations, and Crescent (22 locations). As of June 23, 2008, the Debtors have about 2,852 workers. The company and its affiliates, Whitehall Jewelers Inc., filed for Chapter 11 protection on June 23, 2008 (Bankr. D. Del. Lead Case No. 08-11261). James E. O'Neill, Esq., Kathleen P. Makowski, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. Epiq Bankruptcy Solutions LLC is their claims, noticing and balloting agent. When the Debtors filed for protection against their creditors, they listed total assets of $207,100,000 and total debts of $185,400,000. WHITNEY LAKE: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Whitney Lake, LLC 3069 Sugarberry Ln Johns Island, SC 29455 Bankruptcy Case No.: 08-05729 Type of Business: The Debtor is a townhome subdivision developer. See: http://www.whitneylake.com/ Chapter 11 Petition Date: September 11, 2008 Court: District of South Carolina (Charleston) Judge: John E. Waites Debtor's Counsel: Kevin Campbell, Esq. kcampbell@campbell-law-firm.com Campbell Law Firm, P.A. PO Box 684 890 Jonnie Dodds Blvd. Mt. Pleasant, SC 29465 Tel: (843) 884-6874 Estimated Assets: $22,807,654 Estimated Debts: $21,197,259 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Tabares Inc. trade debt; $1,052,884 285 Highway 418 Ste. F unsecured: $1,052,884 Fountain Inn, SC 29644 VNS Corporation trade debt; $700,526 PO Box 1659 unsecured: $700,526 Vidalia, GA 30475 Three Oaks Construction Inc. trade debt; $340,628 3761 Angel Oak Road unsecured: $340,628 Johns Island, SC 29455 L&M Electric Inc. trade debt; $255,168 2567 Oscar Johnson Dr. unsecured: $255,168 North Charleston, SC 29405 Falapco LLC trade debt; $206,782 unsecured: $206,782 Thomas & Hutton Engineering trade debt; $196,815 Ci unsecured: $196,815 Landdesign Inc. trade debt; $175,287 unsecured: $175,287 Platt's Heating & Air Inc. trade debt $142,496 Banks Construction trade debt $140,246 M&J Siding trade debt; $135,678 unsecured: $135,678 Van Smith Concrete Co. trade debt; $133,489 unsecured: $133,489 Galicia Concrete Inc. trade debt $114,245 Republic National Industries trade debt $107,468 Blanchard Machinery Company trade debt $101,468 Adams Outdoor Advertising $98,325 Brandon Advertising & Public $94,846 Relation Stock Building Supply Inc. $67,036 WINDY CITY: Files Amended Plan of Reorganization in Arizona ----------------------------------------------------------- Windy City Group LLC delivered to the U.S. Bankruptcy Court for the District of Arizona its First Amended Plan of Reorganization. Means for Execution of the Plan The Debtor will provide funding for the Plan and for its operations from the sale of assets and by cash infusions during the pendency of these proceedings as contemplated in the Plan and Disclosure Statement. Proceeds from the sale of assets will be the amount remaining from a sale after all debt encumbered by the asset sold has been paid in full. Cash infusions are the amount added to the operating account of the Debtor-in-Possession, including that portion of the proceeds of a sale equal to the amount paid outside the Plan to a creditor secured by the asset sold. Treatment of Claims Class 1 Claimants, which consist of allowed administrative costs and expenses, will be paid their allowed claims in full. Class 1 claims may be paid in whole or part on the Effective Date if the Court determines that available funds are adequate for that purpose. Class 1 claims may be subordinated in whole or part to other claims by consent or order of the Court. Allowed Class 2 claims, consisting of allowed superpriority administrative claims, will be paid ahead of all other claims from all unencumbered assets as soon as practicable and authorized by the Court if stay relief is granted by the Court as to the collateral securing Class 4 claims, or if this Chapter 11 case is converted to a Chapter 7 proceeding. Otherwise, these claims will be paid in the treatment of Class 4 claims and interests, except that Class 2 claims may be paid from the proceeds of a sale of the Class 4 collateral ahead of any creditor secured by that collateral. Class 3 Claims consist of all allowed secured claims, including: a) real property tax claims, b) the claims of any other governmental units, c) the claims of Maritime Savings Bank, which are secured by Debtor's two spec homes on North Foothills Manor Drive in Paradise Valley, Arizona, and valued at approximately $5,000,000 each, and d) the claim of Compass Bank secured by Debtor's 2006 Mercedes Benz automobile, all of which are oversecured and are guaranteed by or held by Debtor's equity holder and his spouse. Class 3 Claims will be deemed reaffirmed by confirmation of the Plan and paid outside the Plan according to the applicable contract by the non-debtor guarantors of the indebtedness. The postpetition amounts paid upon such indebtedness will become a Class 2 claim in favor of the payor. In the event an asset securing a Class 3 claim is sold, the claim secured by the asset will attach to the proceeds and be paid in full from the proceeds of sale. Allowed Class 4 Claims, which consist of real property taxes and any other claim of a government unit secured by Debtor's 30.47 acre parcel of raw land in Carefree, Arizona, and having priority over the secured claim of Stearns Bank, may be paid outside the plan by the Debtor's equity holders, in which event the postpetition amount so paid will become a Class 2 claim in favor of the payor. The amount of any allowed Class 4 claim not so paid will be paid in full from the proceeds of sale of the property securing the claim. The Class 5 Claim, which consists of the allowed secured claim of Stearns Bank Arizona that is secured by Debtor's 30.47 acre parcel of raw land in Carefree, Arizona, will receive these treatment: * Allowed Amount Debtor will file an objection to the claim. Nick and Debra Partain will assign the Debtor any and all claims they may have against Stearns Bank, and such claims will be incorporated into Debtor's objection as a set-off. The objection will also ask the Court to exclude default penalties and interest. The allowed amount of the Claim, including the amount of applicable rate of interest will be that amount determined by the Court. * Improvement and Sale of Collateral Debtor will improve the Stearns Bank collateral into 9 residential lots and shall market each for sale as they are improved. The lots of lowest value and altitude shall be improved first. From the sale of each lot, Stearns shall receive 1/9th of the principal plus all remaining accrued interest divided by the total number of lots remaining before the sale (e.g. 1/9th of the total accrued interest due would be paid upon the first sale, 1/8th of the accrued interest then due would be paid upon the second sale, 1/7th of the accrued interest then due would be paid upon the third sale, ad nauseum). * Sale of Entire Project Debtor has listed or shall list the entire parcel securing the Stearns Bank Class 4 claim for sale with a commercial real estate broker chosen by or acceptable to Stearns Bank. No sale shall close except upon the approval of the Bankruptcy Court, or if Court approval is not required, then by both Stearns and the Debtor. The proceeds of any sale, to the extent they are adequate, will be disbursed from escrow as follows: i) First, to any then existing debt secured by the property and having priority over the lien of Stearns Bank, including that portion of Class 2 claims based upon a cash infusion directly improving and enhancing the value of the collateral. ii) Second, to Stearns Bank in the amount of its allowed claim, including interest at the contract rate. iii) Third, to all remaining creditors and equity holders in order of priority and consistent with the absolute priority rule. Allowed Class 6 claims, which consist of unsecured priority taxes of the Debtor, including capital gains taxes incurred by virtue of the sale of Debtor's real property shall be paid from the net proceeds of the sale of Debtor's assets after all assets of the Debtor are sold and after all claims of higher priority are paid in full. Allowed Class 7 claims, which consist of all other allowed claims against the Debtor, including any and all unsecured claims, will be paid from the net proceeds of the sale of Debtor's assets after all assets of the Debtor are sold and after all claims of higher priority are paid in full. Class 8 claims, which consist of any and all equity interests in Debtor, namely the interest of equity holder Nick Partain and the interest of Debra Partain, his spouse, will retain their equity interests and will be paid from the net proceeds of the sale of Debtor's assets after all assets of the Debtor are sold and after all claims of higher priority are paid in full. A full-text copy of the First Amended Plan of Reorganization is available for free at http://researcharchives.com/t/s?32d1 About Windy City Scottsdale, Arizona-based Windy City Group LLC filed for Chapter 11 protection on June 18, 2008 (Bankr. D. Ariz. Case No. 08-07274). Tim Coker, Esq., at the Coker Law Office, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed assets of $10 million to $50 million, and debts of $10 million to $50 million. WORLD HEART: Shares to Continue Trading on NASDAQ Capital Market ---------------------------------------------------------------- World Heart Corporation disclosed in a Securities and Exchange Commission filing that on Sept. 11, 2008, following a review by a NASDAQ Listing Qualifications Panel, NASDAQ has determined that the company's common stock will continue to be listed on The Nasdaq Capital Market. Additionally, on Sept. 9, 2008, WorldHeart received a letter from the NASDAQ stating that the company has regained compliance with the requirement to have a minimum market value of publicly held shares of $1,000,000 for at least 10 consecutive trading days as required by the The Nasdaq Capital Market pursuant to Marketplace Rule 4310(c)(7). On June 25, 2008, the company received a staff deficiency letter from the NASDAQ informing the company that for the previous 30 consecutive trading days it had not maintained the minimum market value of publicly held shares of $1,000,000 and that the company had 90 calendar days, or until Sept. 23, 2008, to regain compliance. That matter is now closed. About World Heart Corp. World Heart Corp. -- http://www.worldheart.com/-- is a developer of mechanical circulatory support systems. The company is headquartered in Oakland, Calif. with additional facilities in Salt Lake City, and Herkenbosch, Netherlands. WorldHeart's registered office is Ottawa, Ontario, Canada. World Heart Corp.'s consolidated balance sheet at June 30, 2008, showed $2,394,260 in total assets and $9,819,747 in total liabilities, resulting in a $7,425,487 stockholders' deficit. At June 30, 2008, the company's consolidated balance sheet also showed strained liquidity with $1,323,363 in total current assets available to pay $3,819,747 in total current liabilities. The company reported a net loss of $3,049,673 on revenue of $535,534 for the second quarter ended June 30, 2008, versus a net loss of $4,476,681 on revenue of $848,594 in the comparable period a year ago. YOUNG BROADCASTING: Gets NASDAQ Panel's Okay to Transfer Listing ---------------------------------------------------------------- On Sept. 8, 2008, Young Broadcasting Inc. received approval from the NASDAQ Hearings Panel to transfer the listing of the company's common stock from The NASDAQ Global Market to The NASDAQ Capital Market, effective September 10, 2008. The Company will continue to trade under the symbol "YBTVA." The NASDAQ Capital Market is a continuous trading market that operates in the same manner as The NASDAQ Global Market. The NASDAQ Capital Market includes the securities of approximately 450 companies. All companies listed on The NASDAQ Capital Market must meet certain financial requirements and adhere to NASDAQ's corporate governance standards. On March 3, 2008, the NASDAQ staff notified the company that the company's common stock was not in compliance with the NASDAQ Marketplace Rule 4450(b)(3) which requires the company's publicly held shares to have a market value of at least $15 million. The Listing Qualification Staff of The NASDAQ Stock Market notified the company on June 3, 2008 that the company did not regain compliance with NASDAQ Marketplace Rule 4450(b)(3). Additionally, the Listing Qualification Staff of The NASDAQ Stock Market notified the company on August 14, 2008 that the company was still not compliant with the $1.00 per share minimum bid price requirement set forth in NASDAQ Marketplace Rule 4450(a)(5). A meeting between the company and the NASDAQ panel was held on July 31, 2008. The Company requested that the NASDAQ panel transfer the company's securities to the NASDAQ Capital Market and allow the company to remain listed under an exception through November 28, 2008. During this meeting, the company discussed a plan to become compliant with the appropriate listing standards within the stipulated time frame. After considering the company's record and history which was presented to the NASDAQ staff, the NASDAQ panel approved the transfer of the company's common stock to the NASDAQ Capital Market and granted a short extension of time to permit the company to become compliant with all continued listing standards of the NASDAQ Capital Market by or before November 28, 2008. About Young Broadcasting Headquartered in New York City, Young Broadcasting Inc. -- http://www.youngbroadcasting.com/-- owns 10 television stations and the national television representation firm, Adam Young Inc. Five stations are affiliated with the ABC Television Network, three are affiliated with the CBS Television Network, one is affiliated with the NBC Television Network, and one is affiliated with MyNetwork. In addition, KELO-TV-Sioux Falls, SD is also the MyNetwork affiliate in that market through the use of its digital channel capacity. * * * As reported in the Troubled Company Reporter on Sept. 9, 2008, Standard & Poor's Ratings Services lowered its corporate credit rating and issue-level ratings on New York City-based Young Broadcasting Inc. The corporate credit rating was lowered to 'CCC' from 'CCC+'. The rating outlook is negative. The company had about $826 million of outstanding debt as of June 30, 2008. ZVUE CORPORATION: John Durham Appointed to Board of Directors ------------------------------------------------------------- ZVUE Corporation disclosed in a Securities and Exchange Commission filing that on Sept. 8, 2008, Bob Austrian left the Board of Directors. The company appointed John Durham to the Board effective Sept. 8, 2008. Mr. Durham has over 20 years of marketing and sales experience specializing in digital media. He previously served as President of Sales & Marketing for Jumpstart Automotive Media; SVP, Business Development for Carat Fusion; President and founder of Pericles Consulting; President, Winstar Interactive Media. Mr. Durham is a Founder and Co-chairman of BIG, The Bay Area Interactive Group and is a Professor of Marketing at the University of San Francisco. Jeff Oscodar, ZVUE President and CEO, said "We are thrilled to have someone with John's strong Internet advertising and marketing experience to join the company's Board. He brings a wealth of business contacts and sales strategy expertise that will be useful as we continue to execute on our business strategy. We are also grateful to Bob for his efforts on behalf of our shareholders and wish him well in his endeavors." About ZVUE Corp. Based in San Francisco, ZVUE Corporation (Nasdaq: ZVUE) -- http://www.zvue.com/-- is a global digital entertainment company. ZVUE(TM) personal media players are mass-market priced and currently available for purchase online and in Wal-Mart stores throughout the U.S. Going Concern Doubt Salberg & Company, P.A., in Boca Raton, Florida, expressed substantial doubt about ZVUE 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 net loss of $18,188,833 and net cash used in operations of $12,156,127 for the year ended Dec. 31, 2007, and accumulated deficit of $41,218,007 at Dec. 31, 2007. The company has incurred losses and negative cash flows from operations and has an accumulated deficit at March 31, 2008, of $48,777,000. With the company's available cash of $4,614,000 at March 31, 2008, and $3,673,000 available from a financing agreement with a related party and the expected growth in its business, the company believes that it will have sufficient funds and anticipated future cash flows to continue in operation at least through the end of 2008. * S&P: US Treasury Plan May Bring Financial Markets Back to Normal ------------------------------------------------------------------ The U.S. Treasury's promise to buy up to $700 billion of a variety of troubled assets could mitigate the downward valuation cycle in mortgage loans and securities and enable financial institutions to restructure and recapitalize their balance sheets, according to a report released by Standard & Poor's Ratings Services titled, "Will The U.S. Treasury Plan Help Restore Normality To The Financial Markets?" If the plan is approved, during the next two years, the U.S. Treasury will exchange newly issued Treasury notes for the mortgage-related assets at a price that has yet to be determined. The purchased assets will be managed by professional managers with the ability to either dispose of the assets or hold them to maturity. This is a broad outline of the plan, which Congress still needs to approve. It could, therefore, change. "If the plan can restore confidence in the accuracy of bank balance sheets, we believe it would allow fixed-income investors to focus again on fundamentals when analyzing these firms and making investment decisions, not on the very real potential for insolvency precipitated by the current marketplace volatility," said Standard & Poor's credit analyst Tanya Azarchs. * S&P Says Downgrade Potential Soars to Three-Year High ------------------------------------------------------- The potential downgrades count for this month rose to 758, an increase of 11 issuers from last month, said an article published by Standard & Poor's. (Potential downgrades are entities that have either a negative outlook or ratings on CreditWatch with negative implications across rating categories 'AAA' to 'B-'.) The article, which is titled "Downgrade Potential Across Credit Grades And Sectors (Premium)," says this is the highest potential downgrade count of issuers since September 2005, demonstrating a strong elevation of downgrade risk for entities all over the world. By comparison, September's count is 120 more than reported in the same period a year ago and more than double the count of those poised for potential upgrades. "This continues the trend that started last July, when the housing slowdown--coupled with large bank write downs--helped dislocate the credit markets," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. Compared with this time last year, the number of issuers poised for downgrades nearly quintupled in the banking and brokerage sectors and nearly doubled in the mortgage institution, finance companies, and homebuilders/real estate sectors Housing and financial sectors expectedly show the highest downgrade risk, with forest products and building materials showing a negative bias of 41.3%, mortgage institutions at 40%, and savings and loans at 33.3%. Automotive also leads, with 36.8% of entities poised for a negative rating action. * S&P: Investment-Grade Composite Credit Spread Expands 302 Bps --------------------------------------------------------------- Standard & Poor's U.S. investment-grade composite credit spread widened to 302 basis points, a marginal increase from Monday's figure and 48% wider than at the beginning of the year. By rating category, the 'BBB' spread widened by 7 bps to 356 bps, whereas the 'AA' spread tightened by the same amount to 298 bps. Standard & Poor's speculative-grade composite spread, on the other hand, tightened to 841 bps, a 3-bp shift from Monday's figure, largely driven by slight tightening in the 'B-' category (currently at 919 bps). The speculative-grade credit spread is poised for continued volatility, commensurate with an escalation in speculative-grade defaults over the course of this year. * S&P Downgrades Ratings on 197 Classes from 19 U.S. ALT-A RMBS --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 197 classes from 19 U.S. Alternative-A residential mortgage-backed securities transactions issued in 2004-2007. S&P removed 134 of the lowered ratings from CreditWatch with negative implications. The affected issuer shelves include Credit Suisse First Boston Mortgage Securities Corp., MASTR Adjustable Rate Mortgage Trust, MASTR Asset Backed Securities Trust, Merrill Lynch Mortgage Investors Trust, and Lehman XS Trust. In addition, S&P affirmed 89 ratings on these transactions, 28 of which S&P removed from CreditWatch with negative implications. The downgrades, affirmations, and CreditWatch resolutions incorporate the transactions' current and projected losses based on the dollar amounts of loans currently in the delinquency, foreclosure, and real estate owned pipelines, as well as S&P's projection of future defaults. S&P also incorporated cumulative losses to date in its analysis when determining rating outcomes. The lowered ratings reflect S&P's belief that the amount of available credit enhancement for the downgraded classes is not sufficient to cover losses at the previous rating levels. Severe delinquencies amounted to approximately 20% of the current pool balances for the majority of the transactions, and cumulative losses to date were generally between 1.5% and 3.0% of the original pool balances. However, due to the deteriorating performance of most of the transactions reviewed, along with the current condition of the housing market, S&P is projecting cumulative losses to increase significantly. In addition, certain senior classes that rely on certificate insurance were also affected due to changes in the rating on the insurer. The rating affirmations reflect sufficient credit enhancement to support the ratings at their current levels. Certain senior classes also benefit from senior support classes that would bear any applicable losses before they could affect the super-senior certificates. S&P considered the recent change in the financial condition of Lehman Bros. Holdings Inc. (D/--/D) when evaluating certain transactions. In some cases, Lehman Brothers Holdings Inc. is the guarantor for the derivative counterparty, Lehman Bros. Special Financing Inc. However, the derivatives guaranteed by Lehman Bros. Holdings Inc. fell under one or more of the following categories: 1) the derivative is used specifically to cover basis risk shortfalls; 2) the relationship between the strike rate and the forward rate curve used in S&P's projections generally placed the trust in a position of making payments to the counterparty for the duration of the contract; and 3) the expiration period of the derivative was in several months. Thus, applicable cash flows from the derivatives did not affect the ratings. The subordination of more-junior classes within each structure provides credit support for the affected transactions. Additionally, some structures use overcollateralization and excess spread to absorb losses and accelerate payments to certain securityholders. Certain classes also utilize certificate insurers for credit enhancement. The collateral backing the affected trusts originally consisted predominantly of Alternative- A fixed- or adjustable-rate first-lien mortgage loans on one- to four-family residential properties. S&P monitors these transactions over time to incorporate updated losses and delinquency pipeline performance to determine whether the applicable credit enhancement features are sufficient to support the current ratings. S&P will continue to monitor these deals and take additional rating actions as appropriate. Rating Actions Credit Suisse First Boston Mortgage Securities Corp. Series 2004-AR1 Rating ------ Class CUSIP To From ----- ----- -- ---- VI-M-2 22541Q5B4 BBB- A C-B-4 22541Q5F5 B BB C-B-5 22541Q5G3 D CCC Lehman XS Trust Series 2005-8 Rating ------ Class CUSIP To From ----- ----- -- ---- 1-A4 525221DU8 A AAA 1-M1 525221DV6 CCC BBB/Watch Neg 1-M2 525221DW4 CCC BB/Watch Neg 1-M3 525221DX2 CC B/Watch Neg 1-M4 525221DY0 CC CCC 1-M5 525221DZ7 D CC 2-M1 525221EG8 BBB AA/Watch Neg 2-M2 525221EH6 BB AA/Watch Neg 2-M3 525221EJ2 B A/Watch Neg 2-M4 525221EK9 CCC BBB/Watch Neg 2-M5 525221EL7 CC B/Watch Neg 2-M6 525221FL6 CC CCC Lehman XS Trust 2006-11 Series 2006-11 Rating ------ Class CUSIP To From ----- ----- -- ---- 1-A2 52522WAB5 A AAA 1-A3 52522WAC3 A AAA 1-A4 52522WAD1 B AAA/Watch Neg 2-A1 52522WAE9 BB AAA/Watch Neg 2-A-2 52522WAF6 B AAA/Watch Neg 2-A3 52522WAG4 B AAA/Watch Neg 2-A4 52522WAH2 B AAA/Watch Neg M-1 52522WAJ8 CCC A/Watch Neg M-2 52522WAK5 CCC BBB/Watch Neg M-3 52522WAL3 CCC BB/Watch Neg M-4 52522WAM1 CCC B/Watch Neg M-6 52522WAP4 CC CCC M-10 52522WAT6 D CC Lehman XS Trust 2006-17 Series 2006-17 Rating ------ Class CUSIP To From ----- ----- -- ---- 1-A1 52523KAN4 AA AAA 1-A2 52523KAP9 BB AAA 1-A3 52523KAQ7 BB AAA 1-A4A 52523KBH6 BBB AAA 1-A4B 52523KBJ2 BB AAA 1-A5 52523KBK9 B AAA/Watch Neg 1-M1 52523KAR5 CCC AAA/Watch Neg 1-M2 52523KAS3 CCC AA/Watch Neg 1-M3 52523KAT1 CCC A-/Watch Neg 1-M4 52523KAU8 CCC BB/Watch Neg 1-M5 52523KAV6 CCC BB/Watch Neg 1-M6 52523KAW4 CC B/Watch Neg 1-M7 52523KAX2 CC B/Watch Neg 1-M8 52523KAY0 CC CCC 1-M9 52523KAZ7 D CCC WF-1-2 52523KAB0 AAA AAA/Watch Neg WF-2 52523KAC8 AAA AAA/Watch Neg WF-3-1 52523KAD6 AA AAA WF-3-3 52523KAF1 B AAA/Watch Neg WF-4-1 52523KAG9 AA AAA WF-4-2 52523KAH7 B AAA/Watch Neg WF-5 52523KAJ3 B AAA/Watch Neg WF-6-1 52523KAK0 AA AAA WF-6-2 52523KAL8 B AAA/Watch Neg WF-M1 52523KBB9 CCC AA+/Watch Neg WF-M2 52523KBC7 CCC AA/Watch Neg WF-M3 52523KBD5 CCC AA/Watch Neg WF-M4 52523KBE3 CCC BBB/Watch Neg WF-M5 52523KBF0 CCC BB/Watch Neg WF-M6 52523KBG8 CC B/Watch Neg WF-M7 52523KBL7 CC CCC WF-M8 52523KBM5 CC CCC Lehman XS Trust 2006-19 Series 2006-19 Rating ------ Class CUSIP To From ----- ----- -- ---- A2 52523YAB0 BB AAA A3 52523YAC8 BB AAA A4 52523YAD6 BB AAA/Watch Neg A5 52523YAE4 B A/Watch Neg M1 52523YAG9 CCC BBB/Watch Neg M2 52523YAH7 CCC BB/Watch Neg M9 52523YAQ7 D CC M10 52523YAR5 D CC Lehman XS Trust 2006-20 Series 2006-20 Rating ------ Class CUSIP To From ----- ----- -- ---- A2 52523QAB7 BBB AAA A3 52523QAC5 BBB AAA A4 52523QAD3 BBB AAA A5 52523QAE1 B AA/Watch Neg M1 52523QAG6 CCC BB/Watch Neg M2 52523QAH4 CCC B/Watch Neg M3 52523QAJ0 CCC B/Watch Neg M4 52523QAK7 CCC B/Watch Neg M5 52523QAL5 CCC B/Watch Neg M6 52523QAM3 CC CCC M7 52523QAN1 CC CCC M8 52523QAP6 CC CCC Lehman XS Trust 2006-3 Series 2006-3 Rating ------ Class CUSIP To From ----- ----- -- ---- A4 525221JS7 BBB AAA/Watch Neg M1 525221JK4 B AA+/Watch Neg M2 525221JL2 CCC AA/Watch Neg M3 525221JM0 CCC AA-/Watch Neg M4 525221JN8 CC BBB/Watch Neg M5 525221JP3 CC BB-/Watch Neg M6 525221JQ1 D CCC M7 525221JR9 D CCC Lehman XS Trust 2006-5 Series 2006-5 Rating ------ Class CUSIP To From ----- ----- -- ---- 1-A1A 525221JT5 AAA AAA/Watch Neg 1-A1B 525221JU2 BBB AAA/Watch Neg 2-A1 525221JV0 AAA AAA/Watch Neg 2-A2 525221JW8 BBB AAA/Watch Neg 2-A3 525221JX6 BBB AAA/Watch Neg 2-A4A 525221JY4 AAA AAA/Watch Neg 2-A4B 525221JZ1 BBB AAA/Watch Neg M1 525221KA4 B AA+/Watch Neg M2 525221KB2 CCC A/Watch Neg M3 525221KC0 CCC BBB/Watch Neg M4 525221KD8 CCC BB/Watch Neg M5 525221KE6 CC B/Watch Neg M6 525221KF3 CC CCC M7 525221KG1 CC CCC M10 525221LF2 D CC Lehman XS Trust 2006-7 Series 2006-7 Rating ------ Class CUSIP To From ----- ----- -- ---- 1-A1A 52522EAA7 AA AAA/Watch Neg 1-A1B 52522EAB5 B AAA/Watch Neg 2-A2 52522EAD1 B AAA/Watch Neg 2-A3A 52522EAE9 AA AAA/Watch Neg 2-A3B 52522EAF6 B AAA/Watch Neg M1 52522EAG4 CCC A/Watch Neg M2 52522EAH2 CCC BBB/Watch Neg M3 52522EAJ8 CCC BB/Watch Neg M4 52522EAK5 CCC B/Watch Neg M5 52522EAL3 CCC B/Watch Neg M7 52522EAN9 CC CCC M10 52522EAR0 D CC Lehman XS Trust Series 2005-10 Series 2005-10 Rating ------ Class CUSIP To From ----- ----- -- ---- 1-A1 525221FM4 BB AAA 1-A3 525221FP7 AA AAA 1-A4 525221FQ5 A AAA 1-A5 525221FR3 BB AAA 1-M1 525221FS1 CCC BBB/Watch Neg 1-M2 525221FT9 CCC B/Watch Neg 2-M1 525221GG6 BB AA/Watch Neg 1-M3 525221FU6 CC CCC 2-M2 525221GH4 B A-/Watch Neg 1-M4 525221FV4 D CC 2-M3 525221GJ0 CCC BB/Watch Neg 2-M4 525221GK7 CCC B/Watch Neg 2-M5 525221GL5 CC CCC Lehman XS Trust Series 2006-9 Series 2006-9 Rating ------ Class CUSIP To From ----- ----- -- ---- A1B 52523DAB6 A AAA A1C 52523DAC4 A AAA A2 52523DAD2 B AA/Watch Neg M1 52523DAE0 CCC A/Watch Neg M2 52523DAF7 CCC BBB/Watch Neg M3 52523DAG5 CCC BB/Watch Neg M4 52523DAH3 CC B/Watch Neg M5 52523DAJ9 CC CCC M6 52523DAK6 CC CCC M9 52523DAN0 D CC M10 52523DAP5 D CC Lehman XS Trust Series 2005-6 Series 2005-6 Rating ------ Class CUSIP To From ----- ----- -- ---- M1 525221DB0 B A+/Watch Neg M2 525221DC8 CCC BB+/Watch Neg M3 525221DD6 D CCC 3-A1 525221DE4 AAA AAA/Watch Neg 3-A2A 525221DF1 AAA AAA/Watch Neg 3-A2B 525221DG9 AAA AAA/Watch Neg 3-A2C 525221DH7 AAA AAA/Watch Neg 3-A3A 525221DJ3 AAA AAA/Watch Neg 3-A3B 525221DK0 AAA AAA/Watch Neg 3-A4 525221DL8 AAA AAA/Watch Neg 3-A4B 525221DM6 AAA AAA/Watch Neg 3-M1 525221DN4 BBB- AA/Watch Neg 3-M2 525221DP9 CCC A/Watch Neg 3-M3 525221DQ7 CC BBB-/Watch Neg Lehman XS Trust Series 2006-1 Series 2006-1 Rating ------ Class CUSIP To From ----- ----- -- ---- 1-A2 525221HR1 AAA AAA/Watch Neg 1-M1 525221HS9 A AA+/Watch Neg 1-M2 525221HT7 BB AA/Watch Neg 1-M3 525221HU4 B AA-/Watch Neg 1-M4 525221HV2 CCC A/Watch Neg 1-M5 525221HW0 CCC A-/Watch Neg 1-M6 525221HX8 CC BB+/Watch Neg 1-M7 525221HY6 CC B/Watch Neg 2-A1 525221HZ3 A- AAA/Watch Neg 2-M1 525221JA6 B AA/Watch Neg 2-M2 525221JB4 CCC AA-/Watch Neg 2-M3 525221JC2 CCC A/Watch Neg 2-M4 525221JD0 CCC BB/Watch Neg 2-M5 525221JE8 CC CCC Lehman XS Trust Series 2006-8 Series 2006-8 Rating ------ Class CUSIP To From ----- ----- -- ---- 1-A1B 52522HAB8 A AAA/Watch Neg 2-A1 52522HAC6 A AAA/Watch Neg 2-A3 52522HAE2 A AAA/Watch Neg 2-A4B 52522HAG7 A AAA/Watch Neg 3-A1A 52522HAH5 AAA AAA/Watch Neg 3-A1B 52522HAJ1 AAA AAA/Watch Neg 3-A2 52522HAK8 AA AAA/Watch Neg 3-A3 52522HAL6 A AAA/Watch Neg 3-A4 52522HAM4 A AAA/Watch Neg 3-A5 52522HAN2 A AAA/Watch Neg M1 52522HAP7 BB AA+/Watch Neg M2 52522HAQ5 B AA/Watch Neg M3 52522HAR3 CCC A/Watch Neg M4 52522HAS1 CCC BBB/Watch Neg M5 52522HAT9 CCC BB/Watch Neg M6 52522HAU6 CCC B/Watch Neg M7 52522HAV4 CC CCC M8 52522HAW2 CC CCC M10 52522HAY8 D CC MASTR Adjustable Rate Mortgage Trust 2005-3 Series 2005-3 Rating ------ Class CUSIP To From ----- ----- -- ---- B-1 576433YZ3 A AA-/Watch Neg B-2 576433ZA7 B BBB/Watch Neg B-3 576433ZB5 CCC B/Watch Neg B-4 576433ZF6 CC CCC MASTR Adjustable Rate Mortgages Trust 2007-HF1 Series 2007-HF1 Rating ------ Class CUSIP To From ----- ----- -- ---- A-1 57645RAA9 BB AAA A-2 57645RAB7 B AAA/Watch Neg M-1 57645RAC5 CCC A+/Watch Neg M-2 57645RAD3 CCC A/Watch Neg M-3 57645RAE1 CCC BBB/Watch Neg M-4 57645RAF8 CCC BB+/Watch Neg M-5 57645RAG6 CCC B/Watch Neg M-6 57645RAH4 CC CCC MASTR Asset Backed Securities Trust 2006-AB1 Series 2006 AB1 Rating ------ Class CUSIP To From ----- ----- -- ---- A-1 57643LNT9 AAA AAA/Watch Neg A-2 57643LNU6 AAA AAA/Watch Neg A-3B 57643LNW2 AAA AAA/Watch Neg A-4 57643LNX0 AAA AAA/Watch Neg M-1 57643LNY8 A AA+/Watch Neg M-2 57643LNZ5 BBB AA/Watch Neg M-3 57643LPA8 BB AA-/Watch Neg M-4 57643LPB6 B A+/Watch Neg M-5 57643LPC4 CCC A/Watch Neg M-6 57643LPD2 CCC A-/Watch Neg M-7 57643LPE0 CCC BB/Watch Neg M-8 57643LPF7 CCC B/Watch Neg M-9 57643LPG5 CC CCC Merrill Lynch Mortgage Investors Trust Series 2005-A3 Series 2005-A3 Rating ------ Class CUSIP To From ----- ----- -- ---- M-1 59020UVT9 A AA M-2 59020UVU6 B A/Watch Neg B-1 59020UVV4 CCC BBB/Watch Neg B-2 59020UVW2 CCC BBB-/Watch Neg B-3 59020UVY8 CC BB/Watch Neg Merrill Lynch Mortgage Investors Trust Series 2006-FF1 Series 2006-FF1 Rating ------ Class CUSIP To From ----- ----- -- ---- M1 59023WAA6 AA+ AA+/Watch Neg M2 59023WAB4 AA+ AA+/Watch Neg M3 59023WAC2 AA+ AA+/Watch Neg M4 59023WAD0 AA+ AA+/Watch Neg M5 59023WAE8 AA+ AA+/Watch Neg M6 59023WAF5 AA AA/Watch Neg B1 59023WAG3 AA AA/Watch Neg B2 59023WAR9 AA- AA-/Watch Neg B3 59023WAS7 A AA-/Watch Neg Ratings Affirmed Credit Suisse First Boston Mortgage Securities Corp. Series 2004-AR1 Class CUSIP Rating ----- ----- ------ I-A-1 22541Q4U3 AAA II-A-1 22541Q4V1 AAA III-A-1 22541Q4W9 AAA IV-A-1 22541Q4X7 AAA V-A-1 22541Q4Y5 AAA VI-M-1 22541Q5A6 AA+ C-B-1 22541Q5P3 AA C-B-2 22541Q5Q1 A C-B-3 22541Q5R9 BBB Lehman XS Trust Series 2005-8 Class CUSIP Rating ----- ----- ------ 1-A2 525221DS3 AAA 1-A3 525221DT1 AAA 2-A1A 525221EA1 AAA 2-A1B 525221EB9 AAA 2-A2 525221EC7 AAA 2-A3 525221ED5 AAA 2-A4A 525221EE3 AAA 2-A4B 525221EF0 AAA Lehman XS Trust 2006-11 Series 2006-11 Class CUSIP Rating ----- ----- ------ 1-A1 52522WAA7 AAA Lehman XS Trust 2006-17 Series 2006-17 Class CUSIP Rating ----- ----- ------ I-AIO 52523KAM6 AAA WF-1-1 52523KAA2 AAA WF-3-2 52523KAE4 AAA Lehman XS Trust 2006-19 Series 2006-19 Class CUSIP Rating ----- ----- ------ A1 52523YAA2 AAA Lehman XS Trust 2006-20 Series 2006-20 Class CUSIP Rating ----- ----- ------ A1 52523QAA9 AAA Lehman XS Trust 2006-3 Series 2006-3 Class CUSIP Rating ----- ----- ------ A1 525221JG3 AAA A2 525221JH1 AAA A3 525221JJ7 AAA Lehman XS Trust Series 2005-10 Series 2005-10 Class CUSIP Rating ----- ----- ------ 2-A1 525221FY8 AAA 2-A2 525221FZ5 AAA 2-A3A 525221GA9 AAA 2-A3B 525221GB7 AAA 2-A4A 525221GC5 AAA 2-A4B 525221GD3 AAA 2-A5A 525221GE1 AAA 2-A5B 525221GF8 AAA Lehman XS Trust Series 2006-9 Series 2006-9 Class CUSIP Rating ----- ----- ------ A1A 52523DAA8 AAA Lehman XS Trust Series 2005-6 Series 2005-6 Class CUSIP Rating ----- ----- ------ 1-A1 525221CT2 AAA 1-A3 525221CV7 AAA 1-A4 525221CW5 AAA 1-A5 525221CX3 AAA 2-A1 525221CZ8 AAA 2-A2 525221DA2 AAA 1-AX 525221CY1 AAA Lehman XS Trust Series 2006-1 Series 2006-1 Class CUSIP Rating ----- ----- ------ 1-A1 525221HQ3 AAA Lehman XS Trust Series 2006-8 Series 2006-8 Class CUSIP Rating ----- ----- ------ 1-A1A 52522HAA0 AAA 2-A4A 52522HAF9 AAA MASTR Adjustable Rate Mortgage Trust 2005-3 Series 2005-3 Class CUSIP Rating ----- ----- ------ 1-A-1 576433YN0 AAA 1-A-2 576433ZC3 AAA 1-A-X 576433YP5 AAA 2-A-1 576433YQ3 AAA 3-A-1 576433YR1 AAA 3-A-X 576433ZE9 AAA 4-A-1 576433YS9 AAA 5-A-1 576433YV2 AAA 3-A-2 576433ZD1 AAA MASTR Asset Backed Securities Trust 2006-AB1 Series 2006 AB1 Class CUSIP Rating ----- ----- ------ A-3A 57643LNV4 AAA Merrill Lynch Mortgage Investors Trust Series 2005-A3 Series 2005-A3 Class CUSIP Rating ----- ----- ------ A-1 59020UVQ5 AAA A-2 59020UVR3 AAA Merrill Lynch Mortgage Investors Trust Series 2006-FF1 Series 2006-FF1 Class CUSIP Rating ----- ----- ------ A1 59023WAH1 AAA A2A 59023WAJ7 AAA A2B 59023WAK4 AAA A2C 59023WAL2 AAA * SecondMarket to Begin Trading Lehman Claims in Auction Platform ----------------------------------------------------------------- SecondMarket, the largest marketplace for illiquid assets, said on Sept. 25 that effective immediately it will begin trading bankruptcy claims created by the Lehman Brothers Holdings Inc. Chapter 11 filing. With $639 billion in assets and more than 100,000 creditors, the Lehman Brothers bankruptcy is the largest in the U.S. to date. SecondMarket (formerly known as Restricted Stock Partners) opened to trading of bankruptcy claims in June 2008 when it acquired the Trade Receivable Exchange, Inc. (T-REX), the largest online auction platform serving the bankruptcy claims market. "We purchased T-REX earlier this year in order to accelerate our expansion into claims trading," CEO Barry E. Silbert said. "These are unprecedented times in the financial and credit markets. We expect that bankruptcy claims trading is going to explode, particularly as a result of the Lehman Brothers Chapter 11 filing." To address the growth in claims trading, SecondMarket also announced that John A. McKenna, Jr., a member of SecondMarkets Board of Directors, will play an active role in managing that business. Prior to founding SecondMarket, Silbert worked with McKenna at Houlihan Lokey Howard & Zukin, one of the worlds leading bankruptcy financial advisors. At Houlihan Lokey, McKenna served as the Co-Head of the Financial Restructuring Group in the eastern region. Silbert and McKenna worked on many of the countrys largest bankruptcy cases, including Enron, U.S. Airways and Delta Air Lines. "Bankruptcies often have a ripple effect," according to Mr. McKenna. "When a major company like Lehman Brothers files for Chapter 11, the financial condition of its creditors is often materially affected. By providing them with an opportunity to sell their claims, instead of waiting for a recovery at the end of the bankruptcy case, SecondMarket plays an important role in providing the liquidity needed to restore stability to financial markets and the economy as a whole." SecondMarket expects to trade a variety of unsecured claims resulting from the Lehman Brothers bankruptcy, including structured product, trade, lease and contract rejection, employment and other unsecured claims. Lehman Brothers listed total liabilities of $613 billion in its bankruptcy filing. Creditors can have access to the SecondMarket online trading platform and list their claims for sale at no cost. In addition to bankruptcy claims, SecondMarket trades auction-rate securities, restricted securities in public companies and other illiquid assets. SecondMarkets online trading platform has more than 1,500 members, including global financial institutions, hedge funds, private equity firms, mutual funds, and other institutional and accredited investors that collectively manage over $250 billion in assets available for investment. About SecondMarket Founded in 2004, New York-based SecondMarket is the world's largest marketplace for illiquid assets, such as auction-rate securities, bankruptcy claims and restricted securities in public companies. SecondMarkets online trading platform has more than 1,500 members, including global financial institutions, hedge funds, private equity firms, mutual funds, and other institutional and accredited investors that collectively manage over $250 billion in assets available for investment. SecondMarket is a wholly owned division of Green Drake, Inc. (Member FINRA/SIPC). * U.S. $700 Billion Financial Bailout Plan Stalls ------------------------------------------------- Sheldon Alberts at Canwest News Service reports that efforts by U.S. lawmakers to craft a $700 billion financial rescue plan stalled on Thursday, as the plan met opposition from conservative Republicans. Canwest News relates that senate leaders from the Democrat and Republican parties had announced that they had reached a broad agreement on the principles of a bailout, authorizing the federal government to buy bad mortgage assets that have plunged Wall Street into financial crisis. But senators like Alabama's Richard Shelby, the ranking Republican on the Senate banking committee, don't believe that an agreement has been reached, as "there's till a lot of different opinions," the report states. David M. Herszenhorn at The New York Times reports that the U.S. government had proposed a bailout of financial institutions, requesting authority for the Treasury Department to purchase up to $700 billion in distressed mortgage-related assets from the private companies. According to NY Times, President George Bush discussed the government's financial bailout proposal -- which could include overseas firms and hedge funds -- during a news conference at the White House on Saturday. NY Times relates that the proposal would place no restrictions on the administration other than requiring semiannual reports to Congress and granting the Mr. Paulson unprecedented power to buy and resell mortgage debt. NY Times reports that the Treasury would purchase assets through a process to be determined, hold them until the market stabilizes, and sell them back into the private market. The asset managers and the Treasury would work out the mechanics of any sale, NY Times states. The government would launch reverse auctions for $50 billion tranches, Reuters releates, citing a source. A source said that additional increments would be taken in $10 billion blocks and five outside asset managers would help manage the purchases, Reuters states. According to Reuters, the source said that any assets being offloaded would have had to have been on the books of any participating financial firm as of Sept. 15, Reuters. Canwest News says that the proposed plan would place caps on pay packages for corporate executives receiving help. According to the report, the plan would have made $250 billion immediately available to the U.S. Treasury, with further scrutiny by Congress. According to Canwest News, Democratic leaders in Congress said the negotiations would resume late Thursday. ABI World relates that President George W. Bush had appealed to the nation to support the plan and said that he is willing to accept tougher controls over how the money would be spent. Labor unions, says ABI World, want the Congress to add more protections for workers' pensions battered by the market meltdown. The addition of a provision to modify mortgages for people in bankruptcy to the federal bailout package potentially could save hundreds of thousands of homeowners from future foreclosure, ABI World states, citing judges and other legal experts. * More Bankruptcies to Follow Falgun Dharia's Filings ----------------------------------------------------- A series of bankruptcy filings by Falgun Dharia on behalf of companies he headed, like Mantiff Dayton Hospitality LLC, may "forecast" additional bankruptcies by hospitality providers, Martin C. Daks at Njbiz.com reports, citing lawyers and other professionals. Njbiz.com relates that David M. Neff, a partner at Perkins Coie LLP, said, "We appear to be at the early stage of a cycle of more bankruptcies and workouts" or attempts to avoid bankruptcies. "Before the collapse [of the credit market], loan-to-value ratios were high, which means that some hotel owners may be overleveraged. Now, when the loan comes due, they may not have the funds to pay for it," the report quoted Mr. Neff as saying. Njbiz.com states that Mantiff Dayton, Mantiff-Jahnavi Zanesville Hospitality LLC, and Mantiff Jackson Hospitality LLC were operating under Holiday Inn -- owned by InterContinental Hotels Group -- when they were acquired by firms headed by Mr. Dharia. Mantiff Dayton filed for bankruptcy this month while Mantiff Jackson Hospitality, LLC, sought for bankruptcy protection in August. According to Njbiz.com, Mantiff Dayton purchased the first Ohio hotel in December 2004 for $3.1 million, taking on $1.9 million of financing and in 2005, it borrowed $1.2 million under a Small Business Administration loan. The company defaulted in March because the cost of making renovations required by InterContinental was eating up all of Mantiff Dayton's money, court documents say. In March 2006, Mantiff-Jahnavi purchased another Ohio-based Holiday Inn hotel for $3.6 million and lost the right to use the Holiday Inn in May 2007 after it failed to complete renovations required under the licensing agreement with InterContinental, Njbiz.com states. Court documents indicate that occupancy dropped to less than 30% from 60%. Mantiff-Jahnavi filed for bankruptcy on Aug. 25, listing more than $1 million in assets and more than $1 million in liabilities. According to Njbiz.com, InterContinental filed a lawsuit against Mr. Dharia, seeking more than $400,000 in damages for Mr. Dharia's alleged failure to complete certain renovations at the hotel. Mantiff Jackson, according to the court documents, purchased a hotel in Michigan for $3.5 million in October 2006, financing it with a bank loan. After partially completing renovations required under a planned move to a Choice Hotels brand in February 2008, another loan promised to Mantiff for the renovation fell through, and the Choice deal collapsed, Njbiz.com states. * Oil Price Drop "Too Little, Too Late" for Ailing Carriers ----------------------------------------------------------- Oil price has dropped from its record levels above $140 per barrel, but the decline was too little, too late for ailing carriers, Ian Putzger reported Monday in Cargonews Asia, a forthnightly publication reporting on major issues and trends affecting the cargo business industry in the Asia Pacific region. Mr. Putzger reports that Gemini Air Cargo ceased operations last month, after efforts to find a buyer failed. Gemini has since returned four MD-11 and several DC-10-30 freighters to its lessors. Atlas Air Worldwide Holdings, parent company of ACMI leasing outfit Atlas and scheduled carrier Polar Air Cargo reported a 97% decline in its second quarter net profit. Atlas Air attributed the decline to the high cost of fuel. Most airlines, such as Korean Air, JAL, China Airlines and EVA have reduced their US freighter flights. Mr. Putzger adds that even integrators have indicated they may cut back. "If trade flows continue to change, we will adjust our network to ensure that it is properly aligned with volume and revenue growth patterns," warned Kurt Kuehn, chief financial officer of UPS. FedEx boss Fred Smith said it has no intention of boosting domestic air freight capacity, in anticipation of further declines for domestic short-haul [freight]. * Bober Markey Welcomes Andrew Zinger as Senior Consultant ---------------------------------------------------------- The regional accounting firm of Bober Markey Fedorovich & Company disclosed the hiring of Andrew Zinger, CPA, a senior consultant in the firm's M&A Transaction Advisory Services and Valuation Services Group. Mr. Zinger is a 2005 graduate of Miami University of Ohio and has three years of experience with a national CPA firm, where he was a senior auditor focused on financial services, specifically insurance and banking. The BMF Transaction Advisory Services Group has established a national reputation performing due diligence for private equity firms, mezzanine and subordinated debt lenders, public companies and strategic buyers. Industry specializations include manufacturing, distribution, transportation, service firms and technology companies. The Valuation Services Group is made up of experienced CPAs who have earned specific business valuation credentials including being Accredited in Business Valuation and Certified Valuation Analysts. The team has experience in valuations related to a wide variety of situations, including shareholder and partnership disputes, breach of contract, fraud prevention, damage claims, property and earnings losses and bankruptcy. Bober Markey Fedorovich, founded in 1959, is one of the regional independent public accounting firms in Northeast Ohio. With approximately 70 employees, the firm offers specialized expertise in accounting, auditing, taxation, litigation support, business valuation and business advisory services. * BOOK REVIEW: The Chief Executives ----------------------------------- Author: Isadore Barmash Publisher: Beard Books Paperback: 260 pages List Price: US$34.95 Order your personal copy at http://www.amazon.com/exec/obidos/ASIN/1587982285/internetbankrupt The Chief Executives by Isadore Barmash is a provocative book dealing with the chief executive cult in America. This should be read by anyone interested in the American corporate system and those who run it. Isadore Barmash, one of the country's most respected business writers, takes a penetrating look into the minds, hearts, consciences, attitudes, and life styles of the CEOs of the 1970s. This surprisingly candid book is based upon extensive research and interviews with influential corporate chiefs, management consultants, and economists. Among others, Reginald Jones of GE, Irving Shapiro of Du Pont, and John de Butts of AT&T offer new insights into management's modus operandi, problems, and their own special public and private worlds. ********* 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. Julybien D. Atadero, Sheryl Joy P. Olano, 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 ***