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/raid1/www/Hosts/bankrupt/TCR_Public/081001.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, October 1, 2008, Vol. 12, No. 234 Headlines ACCESS PHARMACEUTICALS: Incorporates Somanta's Financial Results ACCESS PHARMACEUTICALS: June 30 Balance Sheet Upside-Down by $4MM AFFINIA GROUP: Moody's Withdraws Ba3 Rtng on Proposed $200MM Notes AMERICAN INT'L: Former CEO Seeks to Bid for Firm's Assets AMERICAN INT'L: To Sell ILFC Unit to Pay Off $85BB Gov't Loan ALLIED WASTE: Board Won't Rescind Employment Agreement Provisions APPLERIDGE RETIREMENT: Case Summary & 20 Largest Unsec. Creditors APP PHARMACEUTICALS: Files Notice of De-registration with SEC ARIEL WAY: June 30 Balance Sheet Upside-Down by $1,129,462 ATA AIRLINES: To Sell Assets to American Aviation for $3,800,000 ATA AIRLINES: To Auction Aircraft on Oct. 7; Flight Support Bids AUTOBYTEL INC: Lays Off 35% of Staff to Cut Costs, Plans Sale BEARINGPOINT INC: Moody's Reviews 'B2' CF Rating for Likely Cut BILL HEARD: Wants to Obtain $6.7 Million GMAC DIP Facility BI-LO LLC: S&P Chips Corp. Credit to 'B-'; Keeps Negative Outlook CASCADE NURSERY: Case Summary & 17 Largest Unsecured Creditors CCM MERGER: S&P Revises Outlook to Negative from Stable CD 2006-CD3: S&P Slashes Class Q Certs. Rating to 'CCC+' from 'B-' CENTRO NP: Financial Difficulties Cue Moody's to Junk Debt Rating CHA HAWAII: Delaware Court Transfers Venue of Cases to Hawaii CHARTER COMMUNICATIONS: Jonathan L. Dolgen Resigns from Board CHINA GATEWAY: June 30 Balance Sheet Upside-Down by $17.8 Million CHINA GATEWAY: Former G8wave Unit Faces Breach of Contract Lawsuit CHIQUITA BRANDS: S&P Holds 'B-' Rating; Changes Outlook to Stable CIENA CAPITAL: Files for Chapter 11 Bankruptcy Protection CIENA CAPITAL: Case Summary & 30 Largest Unsecured Creditors CIRCUIT CITY: Stops Issuing Profit Projections After Loss CIRCUIT CITY: Hires Restructuring Firm FTI Consulting, Inc. CITY CROSSING: Nevada State Suspends Contractor License CREDIT SUISSE: S&P Places Eight Certs. Ratings Under Neg. Watch CRYSTAL RIVER: S&P Lowers Ratings on 10 Classes of Securities DECODE GENETICS: June 30 Balance Sheet Upside-Down by $186.8 Mln DECODE GENETICS: SEC Grants Request to Exclude Info From Report DELAWARE HEALTH FACILITIES: S&P Cuts $53.5MM Bonds Rating to 'BB' DELPHI CORP: Says Agreements with Unions Fortifies Bankruptcy Exit DILLARD'S INC: Investors Demand Owners to Relinquish Control DISH NETWORK: S&P's Ratings & Outlook Unmoved by AT&T's Decision DIXIE MANAGEMENT: Files for Chapter 11 Bankruptcy Protection DIXIE MANAGEMENT: Case Summary & 28 Largest Unsecured Creditors ERIE COUNTY PLASTICS: Case Summary & Largest Unsecured Creditors FORD MOTOR: May Repay $1.5 Billion Debt Due Today FREDDIE MAC: Moody's Assigns 'Ba1' Rating on $26.5MM Class B Cert. FREMONT GENERAL: Wants Exclusive Period Extended Until Jan. 2009 FRONTIER AIRLINES: Teamsters Balk at CBA's Proposed Modifications FRONTIER AIRLINES: Courts Sets November 17 as Claims Bar Date GARNIC ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors GE COMMERCIAL: S&P Chips Loan Ratings on Ongoing Potential Risks GOODY'S FAMILY: MDOR, et al., Balk at Amended Chapter 11 Plan GOODY'S FAMILY: Has Until November 21 to File Chapter 11 Plan GOODY'S FAMILY: Shuts Down E-Commerce Web Site HAWAII MEDICAL: Will Lay Off Workers This Week HC INNOVATIONS: Potential Conflict Cues James Bigl's Resignation HEARTLAND AUTOMOTIVE: Judge Lynn Lets Another Judge Take Over HENDRX CORP: Board Appoints Kurt Dalmata as Director HINES HORTICULTURE: Must Complete Asset Sale, Says BofA HRP MYRTLE: Files New Details on Hard Rock's Operations IDLEAIRE INC: Appoints James Price as Interim CEO ISTAR FINANCIAL: Moody's Cuts Rating to 'Ba1' on Fin'l Market Woes JEFFERSON COUNTY: Continues Talks with Lenders After Deadline Ends JOSE ESCOBAR: Voluntary Chapter 11 Case Summary JPMORGAN AUTO: Moody's Rates $6.37MM 5.22% Certificates 'Ba2' KAYDON CORPORATION: Moody's Withdraws Ratings at Company's Request KING PHARMACEUTICALS: S&P Rates Existing $400MM Conv. Notes 'BB' LA INDIANA: Case Summary & 20 Largest Unsecured Creditors LANDSOURCE COMMUNITIES: Wants Court's OK to Assume Downrite Deal LANDSOURCE COMMUNITIES: Newhall Wants to Assume ACI Master Pact LANDSOURCE COMMUNITIES: Wants Right of First Refusal Pact Rejected LEHMAN BROTHERS: Faces Class Action for Preferred Series J Stock LINDSAY AND CHANDLER: Voluntary Chapter 11 Case Summary LOEHMANN'S CAPITAL: Moody's Cuts Ratings on Weak Liquidity MAGUIRE PROPERTIES: Completes $100 Mln. Refinancing to Cut Debt MAIN BEACH: Voluntary Chapter 11 Case Summary MAIN STREET: Moody's Slashes Revenue Bonds Rating to Caa3 from B3 MCCLATCHY CO: Facility Amendment Cues Moody's to Confirm Ratings MCCLATCHY CO: S&P Trims Corp. Credit to 'B'; Outlook Negative MCCLATCHY CO: Fitch Says Loan Amendment Adds Flexibility METALS USA: S&P Affirms Corporate Credit Rating at 'B-' MICHAEL MEISNER: Faces Fraud Lawsuit by Trading Commission MORTGAGE LTD: Faces Investigation by Ariz. Corporate Commission MRM DEVELOPMENT: Case Summary & Two Largest Unsecured Creditors MRS FIELDS: U.S. Government, TYCB Franchisee Oppose Plan MRS FIELDS: Seeks to Pay $1 Mln. to Settle Lehman Contract Row NON-INVASIVE MONITORING: Signs $300,000 Revolving Credit Pact ORLEANS HOMEBUILDERS: Amends, Restates $440MM Credit Agreement OSKAR HUBER: U.S. Trustee to Hold Meeting to Form Panel on Oct. 2 PENN TRAFFIC: Faces SEC Action for Accounting Fraud PENN TREATY: S&P Holds 'B-' Credit Rating; Outlook Stays Negative PHOENIX DIVERSIFIED: Futures Commission Sues Firm for Fraud PIERRE FOODS: Oaktree to Become New Majority Owner Under Plan PLASTECH ENGINEERED: Taps Hilco to Liquidate Remaining Assets PROBE MANUFACTURING: Names Barrett Evans as Interim CEO PRODUCTION RESOURCE: S&P Cuts Secured Debt Rating to 'B' from 'B+' QUEBECOR WORLD: Voluntary Chapter 15 Case Summary QUEBECOR WORLD: Gets Conversion Notices for S. 5 Preferred Shares QUEST MINERALS: June 30 Balance Sheet Upside-Down by $3,699,929 RELIANT ENERGY: Moody's Reviews 'Ba3' Corporate Family Rating RENAISSANCE HOSPITAL: Court Approves Amended Disclosure Statement SCPB LLC: Case Summary & Seven Largest Unsecured Creditors SEASIDE AMELIA: Voluntary Chapter 11 Case Summary SHILOH'S INDUSTRIES: Moody's Rates $120MM Revolving Facility 'Ba2' SPORTS COLLECTIBLES: U.S. Trustee to Hold Meeting to Form Panel STAMFORD CENTER: Court Allows Firm to Continue Operations STRATFORD NURSING: U.S. Trustee to Hold Meeting to Form Panel STRUCTURED ASSET: S&P Junks Ratings on Two Classes of Certificates STURGIS IRON: Creditors Want Case Converted to Chapter 7 SUPERIOR OIL: Posts $232,326 Net Loss in 2008 Second Quarter TROPICANA ENTERTAIMENT: Files Notice for Evansville Asset Sale TROPICANA ENT: Trustee Picks Cordish as Lead Bidder, Blocks Sale TRIBUNE CO: Fitch Sees Limited Margin of Error on Debt Covenants TS TELECOM: Fails to File Annual Report, Issues Default Notice TURKEY LAKE: Ordered to Obtain New Counsel to Keep Case UBS CDS: Moody's Junks, Reviews Rating on $40 Million Notes US WEB: To Sell Assets for $100,000, Plus Assumption of Debts U.S. HELICOPTER: June 30 Balance Sheet Upside-Down by $12,705,166 ULTITEK LTD: June 30 Balance Sheet Upside-Down by $1,505,528 VIASPACE INC: Settles Dispute & Issues Shares to YA Global WACHOVIA CORP: Moody's Puts Deposit and Debt Ratings Under Review WACHOVIA CORP: Fitch Cuts IDR to 'BB-'; Puts on Developing Watch WACHOVIA CORP: Planned Retail Bank Sale Cues S&P's Negative Watch WACHOVIA CORP: S&P Puts All Servicer Rankings Under Neg. Watch WASHINGTON MUTUAL: Effects Conditional Exchange of Pref Securities WASHINGTON MUTUAL: Moody's Confirms 31 Ratings After JPMorgan Deal WASHINGTON MUTUAL: S&P Puts Rtngs on Var. Classes Under Dev. Watch WASTE SERVICES: Moody's Affirms Ratings; Changes Outlook to Pos. WCA WASTE: Moody's Affirms 'B3' Rating on $150MM Sr. Secured Notes WELLMAN INC: Selling Eng'g. Resins Biz, Other S.C. Assets WENDY'S INTERNATIONAL: Triarc Merger Cues S&P to Take Rtng Actions WERNER LADDER: Trust Obtains Protection for Confidential Documents XERIUM TECHNOLOGIES: S&P Lifts Rating to 'B-'; Outlook Stable X-RITE INC: Shareholders to Vote on Incentive Plan on October 28 ZAP IMPORT: Lender Westernbank Wants Chapter 11 Case Dismissed * Fitch Changes U.S. Life Insurance' Outlooks to Neg. from Stable * Fitch Says Liquidity Solid for Most U.S. Media Companies * S&P Puts 'D' Ratings on 30 Cert. Classes from 29 U.S. RMBS * S&P Cuts Ratings on 51 Tranches from 14 Cash Flow & Hybrid CDOs * S&P Trims Ratings on 71 Classes from 26 US Subprime RMBS * S&P Downgrades Ratings on 84 Classes from 15 Subprime RMBS * Democrats Want Changes in Bankruptcy Law Included in Rescue Plan * Upcoming Meetings, Conferences and Seminars ********* ACCESS PHARMACEUTICALS: Incorporates Somanta's Financial Results ---------------------------------------------------------------- Access Pharmaceuticals Inc. filed with the Securities and Exchange Commission Amendment No. 2 to the company's Form 8-K dated Jan. 9, 2008, to incorporate by reference both audited and unaudited financial statements of Somanta Pharmaceuticals, Inc. and to include the Securities and Exchange file number, filings and the filing dates of Somanta Pharmaceuticals, Inc.'s audited consolidated financial statements and unaudited interim financial statements. The consolidated financial statements of Somanta Pharmaceuticals, Inc., were audited by Stonefield Josephson, Inc. Access Pharmaceuticals closed the acquisition of Somanta Pharmaceuticals on January 4, 2008. In connection with the merger, Access issued an aggregate of 1.5 million shares of Access Pharmaceuticals' common stock to the shareholders of Somanta as consideration. In addition, Access is exchanging all outstanding warrants of Somanta for warrants to purchase 191,991 shares of Access common stock at exercise prices ranging between $18.55 and $69.57 per share. About Access Pharmaceuticals Headquartered in Dallas, Texas, Access Pharmaceuticals Inc. (OTC BB: ACCP.OB) -- http://accesspharma.com/-- is an emerging biopharmaceutical company developing products for use in the treatment of cancer, the supportive care of cancer, and other disease states. The company's product for the management of oral mucositis, MuGard(TM) has received marketing clearance by the FDA as a device. The company's lead clinical development program for the drug candidate ProLindac(TM) is in Phase II clinical testing. Access also has advanced drug delivery technologies including Cobalamin(TM) mediated oral drug delivery and targeted delivery. At March 31, 2008, Access Pharmaceuticals reported total assets of $7.3 million and total liabilities of $8.7 million, resulting in a total stockholders' deficit of $1.4 million. Going Concern Doubt On March 31, 2008, Whitley Penn LLP, in Dallas, expressed substantial doubt about Access Pharmaceuticals Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007 and 2006. The auditing firm pointed to the company's recurring losses from operations, negative cash flows from operating activities and an accumulated deficit. ACCESS PHARMACEUTICALS: June 30 Balance Sheet Upside-Down by $4MM ----------------------------------------------------------------- Access Pharmaceuticals Inc.'s balance sheet as of June 30, 2008, showed $6.92 million in total assets, $10.99 million in total liabilities, resulting to $4.07 million in shareholders' deficit. Access Pharmaceuticals posted $1.76 million in net losses on $132,000 in net revenues for the second quarter ended June 30, 2008, compared with $2.11 million in net losses for the second quarter ended June 30, 2007. The company posted $15.19 million in net losses on $170,000 in net revenues for the first half ended June 30, 2008, compared with $6.24 million in net lossesfor the first half ended June 30, 2007. "As of Aug. 13, 2008, the Company did not have enough capital to achieve its long-term goals," Jeffrey B. Davis, CEO, said. "If we raise additional funds by selling equity securities, the relative equity ownership of our existing investors would be diluted and the new investors could obtain terms more favorable than previous investors. A failure to obtain necessary additional capital in the future could jeopardize our operations." A copy of Access Pharmaceuticals' financial results for the three months ended June 30, 2008 is available at: http://researcharchives.com/t/s?32f4 About Access Pharmaceuticals Headquartered in Dallas, Texas, Access Pharmaceuticals Inc. (OTC BB: ACCP.OB) -- http://accesspharma.com/-- is an emerging biopharmaceutical company developing products for use in the treatment of cancer, the supportive care of cancer, and other disease states. The company's product for the management of oral mucositis, MuGard(TM) has received marketing clearance by the FDA as a device. The company's lead clinical development program for the drug candidate ProLindac(TM) is in Phase II clinical testing. Access also has advanced drug delivery technologies including Cobalamin(TM) mediated oral drug delivery and targeted delivery. At March 31, 2008, Access Pharmaceuticals reported total assets of $7.3 million and total liabilities of $8.7 million, resulting in a total stockholders' deficit of $1.4 million. Going Concern Doubt On March 31, 2008, Whitley Penn LLP, in Dallas, expressed substantial doubt about Access Pharmaceuticals Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007 and 2006. The auditing firm pointed to the company's recurring losses from operations, negative cash flows from operating activities and an accumulated deficit. AFFINIA GROUP: Moody's Withdraws Ba3 Rtng on Proposed $200MM Notes ------------------------------------------------------------------ Moody's Investors Service has withdrawn the Ba3 prospective rating of Affinia Group Inc.'s proposed $200 million of senior secured notes. On Sept. 24, 2008 Affinia announced that, given the recent volatility in the capital markets, it will suspend its previously- announced plans to syndicate a $340 million asset-based revolving credit facility and to offer an aggregate principal amount of up to $200 million of senior secured notes in a private placement. The net proceeds from the proposed offering of the Notes, together with proceeds of borrowings under the ABL Revolver, would have been used to repay all amounts outstanding under the existing senior secured credit facility and to finance the acquisition of HBM Investment Limited, a Hong Kong company, and its wholly-owned subsidiary, Longkou Haimeng Machinery Company Limited. The company's announcement stated that the acquisition of Haimeng is expected to proceed as planned and is expected to close in the 4th quarter of this year. The company may consider refinancing alternatives, as market conditions allow. Ratings Withdrawn: -- $200 million senior secured notes, 144A with registration rights, (P) Ba3 (LGD2, 29%) Ratings Affirmed: -- B2, Corporate Family Rating -- B2, Probability of Default -- Speculative Grade Liquidity Rating, SGL-3 -- First lien bank debt at Ba2 (LGD2, 19%) -- Subordinated Notes at B3 (LGD5, 70%) -- Senior Unsecured Issuer Rating at B3 The last rating action was on September 22, 2008 when prospective ratings were assigned. Affinia Group Inc., headquartered in Ann Arbor, Michigan, is a designer, manufacturer and distributor of aftermarket components for passenger cars, sport utility vehicles, light, medium and heavy trucks and off-highway vehicles. The company's product range addresses filtration, brake and chassis markets in North and South America, Europe and Asia. In 2007, the company reported revenues of approximately $2.1 billion. AMERICAN INT'L: Former CEO Seeks to Bid for Firm's Assets --------------------------------------------------------- Liam Pleven at The Wall Street Journal reports that Maurice R. Greenberg, the former American International Group Inc. CEO, has asked AIG's current CEO Edward Liddy for a chance to bid on any assets the company will sell. AIG plans to sell assets to pay off the up to $85 billion government loan. WSJ relates that Mr. Greenberg sent a letter to Mr. Liddy saying, "I now understand that the company has begun to liquidate itself by selling assets in privately negotiated transactions without transparency and without providing the opportunity for the participation of alternative purchasers. I want to formally request an opportunity to submit an offer on any assets that the company intends to sell." "We are open to all reasonable expressions of interest in the assets we plan to sell," WSJ quoted an AIG spokesperson as saying. 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. $85,000,000,000 Federal Reserve Loan The Federal Reserve Bank of New York 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 Credit Facility provides for a 79.9% equity interest in AIG. The Credit Facility provides for an initial gross commitment fee of 2% of the total Credit Facility on the closing date. AIG, in a regulatory filing with the Securities and Exchange Commission, said it will pay a commitment fee on undrawn amounts at the rate of 8.5% per annum. Interest and the commitment fees are generally payable through an increase in the outstanding balance under the Credit Facility. Borrowings under the Credit Facility are conditioned on the NY Fed being reasonably satisfied with, among other things, AIG's corporate governance. AIG is required to repay the Credit Facility from, among other things, the proceeds of certain asset sales and issuances of debt or equity securities. These mandatory repayments permanently reduce the amount available to be borrowed under the Credit Facility. The Credit Facility contains customary affirmative and negative covenants, including a requirement to maintain a minimum amount of liquidity and a requirement to use reasonable efforts to cause the composition of the Board of Directors of AIG to be satisfactory to the trust within 10 days after the establishment of the trust. Under the agreement, AIG will issue a new series of perpetual, non-redeemable Convertible Participating Serial Preferred Stock to a trust that will hold the Preferred Stock for the benefit of the United States Treasury. The Preferred Stock will, from issuance: -- be entitled to participate in any dividends paid on the common stock, with the payments attributable to the Preferred Stock being approximately, but not in excess of, 79.9% of the aggregate dividends paid on AIG's common stock, treating the Preferred Stock as if converted; and -- vote with AIG's common stock on all matters submitted to AIG's shareholders, and will hold approximately, but not in excess of, 79.9% of the aggregate voting power of the common stock, treating the Preferred Stock as if converted. The Preferred Stock will remain outstanding even if the Credit Facility is repaid in full or otherwise terminates. Pursuant to the Credit Facility, AIG is required to hold a special shareholders meeting to amend its restated certificate of incorporation to increase its share capitalization and to lower the par value of its common stock to permit the conversion of the Preferred Stock into common stock. Once this amendment is effective, the Preferred Stock will be convertible at any time into 79.9% of the shares of common stock outstanding at the time of issuance. AIG is required to enter into a customary registration rights agreement that will permit the NY Fed to require AIG to register the Preferred Stock and the underlying common stock under the Securities Act of 1933. The Credit Facility will be secured by a pledge of the capital stock and assets of certain of AIG's subsidiaries, subject to exclusions for certain property the pledge of which is not permitted by AIG debt instruments, as well as exclusions of assets of regulated subsidiaries, assets of foreign subsidiaries and assets of special purpose vehicles. Copy of the Credit Agreement is available free of charge at: http://researcharchives.com/t/s?331e Copy of the Pledge Agreement is available free of charge at: http://researcharchives.com/t/s?331f 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 INT'L: To Sell ILFC Unit to Pay Off $85BB Gov't Loan ------------------------------------------------------------- American International Group Inc. is considering selling International Lease Finance Corp., its aircraft leasing company, Liam Pleven and J. Lynn Lunsford at The Wall Street Journal report, citing a person familiar with the matter. According to WSJ, a source said that AIG's board met Sunday to discuss what units the company should sell to pay off a $85 billion loan from the government to help the company avoid possible bankruptcy. The source said that investors from the U.S., Europe, Asia, and the Middle East have expressed interest in investing in a buyout, WSJ relates. ILFC's founder and chairperson Steven Udvar-Hazy sold the company to AIG in 1990. ILFC is a standalone business with a yearly revenue of $6 billion. It has more than 1,030 jetliners and is valued at more than $50 billion. AIG's equity interest in the leasing company is about $7 billion. Mr. Udvar-Hazy is leading an effort to purchase ILFC, WSJ states. 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. ALLIED WASTE: Board Won't Rescind Employment Agreement Provisions ----------------------------------------------------------------- Allied Waste Industries, Inc. disclosed in a Securities and Exchange Commission filing that on Sept. 18, 2008, James W. Crownover, a member of its board of directors, sent a letter to CtW Investment Group. The letter was in reaction to CtW Investment's request with company's board of of directors to rescind any provisions of the employment agreement amendments the board approved on June 22, 2008 that have the effect of increasing change-in-control payments for Allied executives. In the letter, Mr. Crownover said the company's board of directors declined to consider rescinding or seeking executive agreement to rescind the amendments to the executive employment agreements approved on June 22, 2008, due to these reasons: -- the board of directors believes that the amendments -- which address change-in-control payments as well as other terms of employment -- are in the best interests of Allied's stockholders; -- the board views executive employment agreements as a critical component of attracting and retaining the best management talent; -- the board considers change in control payments to be key tools to motivate and retain management in connection with strategic transactions such as the pending Allied-Republic merger; -- the amendments approved on June 22, 2008 will continue to apply if the Allied-Republic merger is not consummated for any reason. This is because the board of directors concluded that the prior agreements, with their unusual provisions, were not in the best interests of Allied or its stockholders in that they were not adequate to meet the objectives of attracting and retaining executives of the highest caliber; -- CtW's assertions regarding the financial implications of the amendments in connection with the pending Allied-Republic transaction are incorrect. Of the five Allied executive officers, only Messrs. Zillmer and Hathaway are not expected to continue with the combined company. The other executive officers are expected to continue and thus the merger will not trigger any cash change-in-control payments for them. About Allied Waste Based in Phoenix, Arizona, Allied Waste Industries Inc. (NYSE: AW) -- http://www.alliedwaste.com/and http://www.disposal.com/-- provides waste collection, transfer, recycling and disposal services to millions of residential, commercial and industrial customers in over 100 major markets spanning 38 states and Puerto Rico. * * * As reported in the Troubled Company Reporter on June 25, 2008, Fitch Ratings placed the ratings of Allied Waste Industries Inc. on Rating Watch Positive, including the company's CCC+/RR6 Senior subordinated rating, following the announcement that the company intends to merge with Republic Services Inc. Balance Sheet At June 30, 2008, the company's consolidated balance sheet showed $13.94 billion in total assets, $9.83 billion in total liabilities, and $4.11 billion in total stockholders' equity. The company's consolidated balance sheet at June 30, 2008, also showed strained liquidity with $1.05 billion in total current assets available to pay $1.87 billion in total current liabilities. APPLERIDGE RETIREMENT: Case Summary & 20 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Appleridge Retirement Community, Inc. 3005 Watkins Road Horseheads, NY 14845 Bankruptcy Case No.: 08-22508 Type of Business: The Debtor owns apartments. Chapter 11 Petition Date: September 29, 2008 Court: Western District of New York (Rochester) Debtor's Counsel: Stephen A. Donato, Esq. sdonato@bsk.com Bond, Schoeneck & King, PLLC One Lincoln Center Syracuse, NY 13202-1355 Tel: (315) 218-8336 Estimated Assets: $5,535,629 Estimated Debts: $26,767,620 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Touchstone Asset Management Building consisting $19,017,751 c/o Bank of America of approximately 99 Founders Plaza Stop CTEH 167,300 sq. ft. FO3E situated on 21.997 East Hartford, CT 06108-3292 acres located at campus address of 3005 Watkins Road in Village of Horseheads; security: $5,000,000 David Christa Construction Services $246,625.00 Inc. 119 Victor Heights Parkway Village of Horseheads PILOT Agreement $220,000 202 S. Main Street Horseheads, NY 14845 Horseheads Central School PILOT Agreement $154,051 District Chemung County Industrial Agreement $114,051 Dev. Agency Cutler's Paint & Carpet $54,661 Center US Foodservice $16,724 Gannett Central NY $15,786 Newspapers Perry & Carroll, Inc. $10,820 Associated Textile Rental $9,265 Services NYSEG Solutions Utility services $9,704 The Leader $5,360 Behlog & Son Produce Trade debt $4,763 Hess Corporation $4,381 NYSEG Utility services $4,429 Janet Ross $3,001 Harry & Sophie Shabanowitz Resident $2,695 Appleridge Retirement overpayment Fire Alarm Service Technology $2,665 Finger Lakes HVAC&R, Inc. $2,575 APP PHARMACEUTICALS: Files Notice of De-registration with SEC ------------------------------------------------------------- APP Pharmaceuticals Inc. has filed a Form 15 with the Securities and Exchange Commission for the termination of registration under the Securities Exchange Act. 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. ARIEL WAY: June 30 Balance Sheet Upside-Down by $1,129,462 ---------------------------------------------------------- Ariel Way Inc.'s consolidated balance sheet at June 30, 2008, showed $159,929 in total assets and $1,289,391 in total liabilities, resulting in a $1,129,462 total stockholders' deficit. At June 30, 2008, the company's consolidated balance sheet also showed strained liquidity with $8,603 in total current assets available to pay $1,289,391 in total current liabilities. The company reported a net loss of $1,328,898 for the third quarter ended June 30, 2008, compared with a net profit of $131,523 in the same period ended June 30, 2007. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2008, are available for free at http://researcharchives.com/t/s?32ed Going Concern Disclaimer Bagell, Josephs, Levine & Company, LLC, in Marlton, N.J., expressed substantial doubt about Ariel Way Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Sept. 30, 2007. The auditing firm said that the company did not generate sufficient cash flows from revenues during the year ended Sept. 30, 2007, to fund its operations. Also at Sept. 30, 2007, the company had negative net working capital of $2,554,341. About Ariel Way Based in Vienna, Va., Ariel Way Inc. (OTC BB: AWYI) -- http://www.arielway.com/-- is a technology and services company for highly secure global communications, multimedia and digital signage solutions and technologies. The company is focused on developing innovative and secure technologies, acquiring and growing profitable advanced technology companies and global communications service providers and creating strategic alliances with companies in complementary product lines and service industries. ATA AIRLINES: To Sell Assets to American Aviation for $3,800,000 ---------------------------------------------------------------- In May 2008, the Federal Aviation Administration approached ATA Airlines Inc., concerning the Debtor's intentions with respect to continuing or restarting its business operations. The Debtor informed the FAA that it had ceased operations, but was interested in maintaining its operating certificate with any eye toward marketing it to third parties for a potential sale. The FAA at that time expressed a reluctance regarding the contemplation of selling the operating certificate as a stand- alone asset. The Debtor subsequently engaged in protracted discussions with the FAA in an effort to convince the FAA to allow the Debtor to maintain the operating certificate and to discuss the contours of a potential sale of the operating certificate. The FAA indicated during those discussions that the operating certificate is not a stand-alone tangible asset; instead, it is a set of attributes permitting an individual or company to provide a controlled type of flight service. As such, the FAA will only recognize the continuation of the operating authority through a sale of the company. The discussions with the FAA have shaped the Debtor's efforts to maintain its operating authority and its related marketing efforts, counsel for ATA Airlines, Terry Hall, Esq., at Baker & Daniels LLP, in Indianapolis, Indiana, said. After the bankruptcy filing, the Debtor began receiving expressions of interest from various parties regarding an acquisition of the Debtor's business and its operating certificate, Ms. Hall relates. In all, 12 parties contacted the Debtor inquiring about a sale of the operating certificate. In addition, the Debtor also solicited input from its secured lender JPMorgan Chase Bank, N.A. and the Unsecured Creditors Committee concerning the sale process and the identification of possible buyers. The Debtor is not aware of any additional parties who might be interested in purchasing its business, Ms. Hall notes. The Debtor had discussions or negotiations with each of the interested parties, and informed each of the parties during course of the discussions of the FAA's views concerning the operating certificate and its ability to be transferred. The Debtor ultimately identified several parties with a legitimate interest in purchasing the company as a means of continuing or restarting the airline. The Debtor entered into non-disclosure agreements with these parties, and exchanged relevant business and financial information with them in furtherance of a potential sale transaction. As a result of the information exchange, the Debtor solicited, received, and negotiated letters of intent for the sale of the company with three of the interested parties. Parallel with these negotiations, the Debtor briefed the FAA on the potential transactions and sought the FAA's input on each transaction. The Debtor has determined that the offer submitted by American Aviation Investments is the highest and best offer for the Company. Accordingly, the Debtor, as seller, and American Aviation, as purchaser, have entered into a binding letter of intent dated September 5, 2008, which contemplates the sale of the Debtor's business and related authorities and assets to AAI for $3,800,000. ATA Agreed to sell its air carrier operating certificate, the Department of Transportation Certificate of Public Commerce and Necessity, all documents necessary for its normal operations, and any client database, computer software, the goodwill, and all intangibles owned by or licensed to and constituting the intellectual property of the Debtor. The airlines also agreed to sell all of its outstanding stock and transfer its right to airport slots at LaGuardia Airport in New York. ATA Airlines said the sale of the assets would be implemented through a stock transaction under its Chapter 11 plan, and would be subject to the plan confirmation requirements. "The sale would be effectuated through the sale of either new ATA stock issued pursuant to the confirmed plan or the stock of an ATA subsidiary formed under the confirmed plan," a filing in the U.S. Bankruptcy Court for the Southern District of Indiana said. The sale of the airlines will be free and clear of all liens, claims, interests, and other encumbrances, with the liens attaching to the sale proceeds with the same validity and priority as they had against the assets comprising the airlines. Under the deal, American Aviation is required to deposit $850,000 in immediately available funds after the Court approves the company as the buyer of the assets. The deposit would be credited against the amounts payable to ATA Airlines at the closing of the transaction. Ms. Hall said the deposit would be refundable only if a Chapter 11 plan effectuating the transaction is not confirmed by Jan. 31, 2009, or if the Federal Aviation Administration revokes or invalidates the airlines' operating certificate before the closing of the transaction for a reasons other than domestic ownership requirements or a breach of American Aviation's obligations under the Letter of Intent. Ms. Hall said, however, that the assets are open for bidding and that an auction would be conducted at the Oct. 7 hearing if the airlines receives competing bids. ATA Airlines ask the Court to designate American Aviation as the purchaser, and to authorize it to enter into the Letter of Intent. About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., is a diversified passenger airline operating in two principal business lines -- a low cost carrier providing scheduled passenger service that leverages a code share agreement with Southwest Airlines; and a charter operator that focused primarily on providing charter service to the U.S. government and military. ATA is a wholly owned subsidiary of New ATA Acquisition, Inc. -- a wholly owned subsidiary of New ATA Investment, Inc., which in turn, is a wholly owned subsidiary of Global Aero Logistics Inc. ATA Acquisition also owns another holding company subsidiary, World Air Holdings, Inc., which it acquired through merger on August 14, 2007. World Air Holdings owns and operates two other airlines, North American Airlines and World Airways. ATA Airlines and its affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). The Honorable Basil H. Lorch III confirmed the Debtors' plan of reorganization on Jan. 31, 2006. The Debtors' emerged from bankruptcy on Feb. 28, 2006. Global Aero Logistics acquired certain of ATA's operations after its first bankruptcy. The remaining ATA affiliates that were not substantively consolidated in the company's first bankruptcy case were sold or otherwise liquidated. ATA Airlines filed for Chapter 22 on April 2, 2008 (Bankr. S.D. Ind. Case No. 08-03675), citing the unexpected cancellation of a key contract for ATA's military charter business, which made it impossible for ATA to obtain additional capital to sustain its operations or restructure the business. ATA discontinued all operations subsequent to the bankruptcy filing. ATA's Chapter 22 bankruptcy petition lists assets and liabilities each in the range of $100 million to $500 million. The Debtor is represented in its Chapter 22 case by Haynes and Boone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel. The United States Trustee for Region 10 appointed five members to the Official Committee of Unsecured Creditors. Otterbourg, Steindler, Houston & Rosen, P.C., serves as bankruptcy counsel to the Committee. FTI Consulting, Inc., acts as the panel's financial advisors. The Court gave ATA Airlines Inc. until Feb. 26, 2009, to file its Chapter 11 plan and April 27, 2009, to solicit acceptances of that plan. (ATA Airlines Bankruptcy News, Issue No. 90; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). ATA AIRLINES: To Auction Aircraft on Oct. 7; Flight Support Bids ---------------------------------------------------------------- ATA Airlines Inc., sought approval from the U.S. Bankruptcy Court for the Southern District of Indiana to sell its aircraft and other properties, with Flight Support as the likely buyer. The airlines intends to sell L1011 aircraft, spare engines, tooling, among other things. Terry Hall, Esq., at Baker & Daniels LLP, in Indianapolis, Indiana, said they had already closed an agreement to sell the assets to Flight Support for $2,500,000. Ms. Hall said that Flight Support's offer is the highest and the best that ATA Airlines has received so far. She pointed out, however, that the assets may be sold in an auction if other interested buyers offer a better bid. Flight Support has already deposited $2,000,000 in immediately available funds for the assets. The deposit is refundable only if the Court does not approve Flight Support as the buyer, and if there is no termination of the agreement "by reason of a default by Flight Support," according to the court filing. ATA Airlines asked the Court to conduct an auction at an Oct. 7 hearing, in the event there are other bids submitted, in accordance with these bidding procedures: 1) The competing offer must be submitted in the form of a mark-up of the purchase agreement and must be for all of the assets. Bids on subsets or individual pieces of the Assets would not be accepted. 2) The competing offer must include a purchase price in an amount not less than $100,000 greater than the purchase price offered by Flight Support. 3) Competing offers must be in the form of cash without any financing contingencies and cannot be subject to further due diligence. 4) Competing offers must be submitted on or before Oct. 3, at 5:00 p.m., Eastern Time by mail, hand-delivery, facsimile, or electronic mail to counsel for ATA Airlines, JPMorgan Chase Bank, N.A., the Official Committee of Unsecured Creditors, and the U.S. Trustee. Any bidder is required to tender a bid deposit for $2,000,000 directly to ATA Airlines by wire transfer of immediately available funds by end of Oct. 6. Bidding at the auction would proceed in minimum bid increments of $100,000. "A bidder wishing to submit an incremental bid that is less than the minimum of $100,000 may do so, but only by announcing that such bid is the bidder's highest or otherwise best bid and, if topped, such bidder would no longer participate in the auction," Ms. Hall said, adding that the bidding would continue to be in $100,000 minimum bid increments. About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., is a diversified passenger airline operating in two principal business lines -- a low cost carrier providing scheduled passenger service that leverages a code share agreement with Southwest Airlines; and a charter operator that focused primarily on providing charter service to the U.S. government and military. ATA is a wholly owned subsidiary of New ATA Acquisition, Inc. -- a wholly owned subsidiary of New ATA Investment, Inc., which in turn, is a wholly owned subsidiary of Global Aero Logistics Inc. ATA Acquisition also owns another holding company subsidiary, World Air Holdings, Inc., which it acquired through merger on August 14, 2007. World Air Holdings owns and operates two other airlines, North American Airlines and World Airways. ATA Airlines and its affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). The Honorable Basil H. Lorch III confirmed the Debtors' plan of reorganization on Jan. 31, 2006. The Debtors' emerged from bankruptcy on Feb. 28, 2006. Global Aero Logistics acquired certain of ATA's operations after its first bankruptcy. The remaining ATA affiliates that were not substantively consolidated in the company's first bankruptcy case were sold or otherwise liquidated. ATA Airlines filed for Chapter 22 on April 2, 2008 (Bankr. S.D. Ind. Case No. 08-03675), citing the unexpected cancellation of a key contract for ATA's military charter business, which made it impossible for ATA to obtain additional capital to sustain its operations or restructure the business. ATA discontinued all operations subsequent to the bankruptcy filing. ATA's Chapter 22 bankruptcy petition lists assets and liabilities each in the range of $100 million to $500 million. The Debtor is represented in its Chapter 22 case by Haynes and Boone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel. The United States Trustee for Region 10 appointed five members to the Official Committee of Unsecured Creditors. Otterbourg, Steindler, Houston & Rosen, P.C., serves as bankruptcy counsel to the Committee. FTI Consulting, Inc., acts as the panel's financial advisors. The Court gave ATA Airlines Inc. until Feb. 26, 2009, to file its Chapter 11 plan and April 27, 2009, to solicit acceptances of that plan. (ATA Airlines Bankruptcy News, Issue No. 90; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). AUTOBYTEL INC: Lays Off 35% of Staff to Cut Costs, Plans Sale ------------------------------------------------------------- Autobytel Inc. has fired 75 employees, or 35% of its work force, as part of a cost-cutting effort it began in 2007, The Wall Street Journal reports. According to WSJ, Autobytel expects that with the layoffs, the company would be able to save some $10 million per year and hopes that the company would return to profitability. WSJ relates that Autobytel has also started reviewing options, including its possible sale. The company hired RBC Capital Markets Corp. to advise it during the review, the report says. WSJ quoted Autobytel's CEO Jim Riesenbach as saying, "We believe our current stock price as well as overall market conditions are conducive to, and have driven, increased interest in Autobytel from various third parties." WSJ reports that Autobytel's stock has declined 64% this year, putting the company's market value at $45 million. Autobytel hasn't been profitable in for several years, posting net losses almost every quarter dating back to 2005, WSJ relates. About Autobytel Irvine, California-based Autobytel, Inc. -- http://www.autobytel.com-- is an automotive media and marketing services company focused on helping dealers sell cars and services, and manufacturers build brands through marketing and advertising primarily through the Internet. The company owns and operates automotive Websites, including MyRide.com, Autobytel.com, Autoweb.com, Car.com, CarSmart.com, AutoSite.com and CarTV.com. BEARINGPOINT INC: Moody's Reviews 'B2' CF Rating for Likely Cut --------------------------------------------------------------- Moody's Investors Service has placed the B2 corporate family, unsecured subordinated convertible notes, and speculative grade liquidity ratings on review for possible downgrade. The review was prompted by slower than anticipated improvement in the company's free cash flow and concerns about the company's ability to retain sufficient liquidity in light of the $200 million 5% senior subordinated convertible notes, which can be put to the company at the investor's option on April 15, 2009. Moody's last rating action was on December 7, 2007, when Moody's confirmed BearingPoint's B2 corporate family rating and assigned a negative rating outlook. The review will focus on the company's prospects for improving its cash position by generating free cash flow as well as net cash proceeds that may be derived through the sale of certain assets, which could include various business units or the company as a whole. The review will also assess the company's ability to access capital markets, potential alternatives to reduce debt, possible additional restructuring costs, and working capital needs. Ratings on review for possible downgrade are: -- Corporate Family Rating - B2 -- Probability of Default Rating - B2 -- $250 million Series A Subordinated Convertible Notes to Caa1 (LGD5, 86%) -- $200 million Series B Subordinated Convertible Notes to Caa1 (LGD5, 86%) -- Short-Term Liquidity Rating SGL-3 Headquartered in Mclean, Virginia, with approximately $3.4 billion in revenues for the twelve months ended June 30, 2008, BearingPoint, Inc. provides I/T consulting and managed services to commercial and governmental entities worldwide. BILL HEARD: Wants to Obtain $6.7 Million GMAC DIP Facility ---------------------------------------------------------- Bill Heard Enterprises Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Alabama for authority to access $6,716,925 in debtor-in-possession financing under a loan agreement with GMAC LLC. The committed $6,716,925 financing will incur interest at a rate per annum equal to prime plus 4%. Robert B. Rubin, Esq., at Burr & Forman LLP in Birmingham, Alabama, relates that the Debtors have three floor plan lenders including GMAC LLC, BMW Financial Services N.A., and JPMorgan Chase Bank N.A. GMAC provides the floor plan lending at the remaining 10 of the Debtors' dealership for $229,000,000, while BMW provides lending at the Debtors' dealership in Plant City, Florida, Union City, Georgia and Sugar Land, Texas, and JP Morgan provides lending at the Debtors' dealership in Scottsdale, Arizona, Mr. Rubin continued. Mr. Rubin says that Majority of the Debtors' dealerships are located on real property owned by one or more of their subsidiaries. The real property is mortgaged to various entities including GE Commercial Finance Business Property Corporation, Astar Finance Falcon II LLC, Columbus Bank & Trust Company, GMAC or JPMorgan, he points out. According to the motion, the Debtors have an immediate need for financing. The access to the lender's financing will allow the Debtors to continue to finance their orderly liquidation and the wind-down of their affairs for the benefit of the estates. The wind-down will maximize distribution to creditors, and the failure to liquidate may cause irreparable harm to the debtors' cases. The loan agreement contains customary and appropriate events of default including, but are not limited to: -- failure by the Debtors to make timely payments; -- misinterpretation by the Debtors; -- breach of specific covenants or other covenants by the Debtors; -- default under other DIP financing documents; -- uninsured losses or unauthorized disposition; -- the occurrence of certain bankruptcy events; -- change of control of Debtors; -- the occurrence of any event that could be reasonably assume to have a material adverse effect; and -- criminal forfeiture. To secured their DIP obligations, the lenders will be granted an administrative expense claims against the Debtors' estate. A full-text copy of the Debtors' Debtor-in-Possession budget is available for free at http://ResearchArchives.com/t/s?331a About Bill Heard Headquartered in Huntsville, Alabama, Bill Heard Enterprises Inc. -- http://www.billheardhuntsville.com/-- is one of the largest dealers of Chevrolet in the United States. The company and 17 of its affiliates filed for Chapter 11 protection on Sept. 28, 2008 (Bankr. N.D. Ala. Lead Case No. 08-83028). Derek F. Meek, Esq., at Burr & Forman, LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed assets and debts of between $500 million and $1 billion each. BI-LO LLC: S&P Chips Corp. Credit to 'B-'; Keeps Negative Outlook ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered the corporate credit rating on Greenville, South Carolina-based BI-LO LLC to 'B-' from 'B.' The outlook remains negative. "The rating change reflects our concern regarding BI-LO's ability to refinance its existing $260 million term loan and $100 million asset-based revolver when they come due in March 2009," said Standard & Poor's credit analyst Jackie E. Oberoi, "given the current lack of liquidity in the credit markets for speculative- grade credits." In addition, S&P expects the EBITDA cushion over financial covenants -- already thin as of the second quarter ended July 12, 2008 -- to narrow as of the third quarter when covenants become more restrictive. CASCADE NURSERY: Case Summary & 17 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Cascade Nursery, LLC P.O. Box 272050 Lutz, FL 33558 Bankruptcy Case No.: 08-15089 Chapter 11 Petition Date: September 29, 2008 Court: Middle District of Florida (Tampa) Debtor's Counsel: Harley E. Riedel, Esq. hriedel.ecf@srbp.com Stichter, Riedel, Blain & Prosser 110 East Madison St., #200 Tampa, FL 33602 Tel: (813) 229-0144 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/flmb08-15089.pdf CCM MERGER: S&P Revises Outlook to Negative from Stable ------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Detroit, Michigan-based CCM Merger Inc. to negative from stable. Ratings on the company, including the 'B' corporate credit rating, were affirmed. "The outlook revision reflects our concern regarding the limited cushion with respect to CCM's total leverage covenant and the potential for a violation of this covenant over the near term, as this measure steps down by 0.2x in the first quarter of 2009," explained Standard & Poor's credit analyst Michael Listner. Having completed the expansion project at its MotorCity facility, the bank agreement requires that consideration now be given to formerly excluded debt in calculating covenant compliance for the company. Given the limited operating history of the completed facility, EBITDA is calculated by annualizing year-to-date performance. Based on this methodology, and assuming that total debt remains constant, CCM would need to achieve an average EBITDA growth rate of approximately 22% in the second half of the year in order to achieve total leverage covenant compliance. S&P expects that these growth assumptions and the need for continuous deleveraging will prove to be challenging given weak economic conditions and competitive pressures from MGM Grand Detroit. Despite S&P's concerns regarding covenants, CCM has performed relatively well in 2008, growing EBITDA by approximately 16% during the first half of the year. Although casino revenue for the company declined by approximately 0.5% according to the Michigan Gaming Control Board, growth in EBITDA was primarily driven by a 5% decline in the wagering tax rate, which was approved in March of this year and retroactive to Jan. 1. The tax rollback was awarded following the opening of CCM's permanent facility and will remain in effect gong forward, leading to consistent comparables in 2009, commensurate with the anniversary of this rollback. CCM Merger Inc. is a private company and does not publicly report its financial results. Based on S&P's expectation for stable cash flow generation now that the expansion is complete, CCM is expected to reduce debt balances going forward. Given a required 75% excess cash flow sweep for its term loan debt, S&P expects that leverage peaked in 2007, and believes that this measure will continue to improve, despite concerns that economic weakness may have some impact on operating performance in the second half of 2008. CD 2006-CD3: S&P Slashes Class Q Certs. Rating to 'CCC+' from 'B-' ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on four classes of pooled commercial mortgage pass-through certificates from CD 2006-CD3 Mortgage Trust. Concurrently, S&P affirmed its ratings on 24 other classes from this transaction. The downgrades reflect anticipated credit support erosion upon the eventual resolution of one asset ($7.4 million) that is currently with the special servicer, J.E. Roberts Co., as well as credit concerns with three ($14 million, 1%) of the 11 loans ($132 million, 3%) in the pool that have a reported debt service coverage of less than 1.0x. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. Details of the asset with the special servicer are: -- The Macdade Terrace Apartments loan ($7.6 million) is secured by a 160-unit multifamily property that consists of four, three-story buildings located in Woodlyn, Pennsylvania. The loan is 90-plus-days delinquent and was transferred to the special servicer in July 2008 due to payment default. The property condition report shows that there is a significant amount of deferred maintenance at the property. The property performance also suffered from rent collection issues. As of August 2008, occupancy was 88%. An appraisal is being finalized, and Standard & Poor's expects a significant loss upon the resolution of this asset. Three of the 11 loans that have a reported DSC of less than 1.0x are currently credit concerns. The 11 loans are secured primarily by a variety of multifamily, office, retail, and parking garage properties, have an average balance of $11.2 million, and have experienced an average decline in DSC of 35% since issuance. The three loans that are credit concerns are secured by multifamily, office, and retail properties. These properties have experienced a combination of declining occupancies and higher operating expenses. The remaining loans secure properties that are in various stages of renovation or lease-up and are not currently credit concerns because S&P expects the net cash flow available for debt service to improve in the future. As of the Sept. 17, 2008, remittance report, the collateral pool consisted of 191 loans with an aggregate balance of $3.55 billion, compared with 192 loans with a balance of $3.57 billion at issuance. The master servicers, Capmark Finance Inc., Wachovia Bank N.A., and Midland Loan Services Inc. reported financial information for 99% of the pool. Ninety percent of the servicer- provided information was full-year 2007 data, and 9% was interim- 2008 data. Standard & Poor's calculated a weighted average DSC of 1.49x for the pool, up slightly from 1.40x at issuance. All of the loans in the pool are current except for the asset with the special servicer. The top 10 loans have an aggregate outstanding balance of $1.5 billion (43%) and a weighted average DSC of 1.35x, down from 1.52x at issuance. The master servicers provided property inspections for nine of the top 10 loan exposures. One was characterized as "excellent," and the other eight properties were characterized as "good." The credit characteristics of the Ala Moana portfolio (8.5%), High Point Furniture Mart (5.5%), 80 Field Point Road (0.2%), and Century City Central Plant (0.2%) loans are consistent with those of investment-grade obligations. Details of the two largest of these loans are: -- The Ala Moana portfolio loan, which is the largest exposure in the pool, has a trust balance of $200.0 million and a whole-loan balance of $1.5 billion. The whole loan is secured by the fee and leasehold interests in four properties: a regional mall, two office buildings, and a retail property located in Honolulu, Hawaii. The reported combined DSC for this loan was 1.59x as of year-end 2007, and occupancy was 97.1%, compared with a DSC of 1.81x and 96% occupancy at issuance. The underwritten NCF at issuance was based on the completion and full lease-up of 300,000 sq. ft. of expansion space. Standard & Poor's adjusted value for this loan is comparable to its level at issuance. -- The High Point Furniture Mart loan is the third-largest exposure in the pool and has a trust and whole-loan balance of $194.8 million. The loan is secured by the fee interest in an eight-building, 2 million-sq.-ft. retail/showroom complex located in High Point, North Carolina. The reported DSC for this loan was 1.71x as of year-end 2007, and occupancy averaged 98% in 2007. Standard & Poor's adjusted NCF for this loan is comparable to its level at issuance. Capmark reported a watchlist of 29 loans with an aggregate outstanding balance of $266.6 million (8%). The St. Ives Apartments loan is the largest loan on the watchlist and the 17th- largest loan in the pool. The loan is secured by a 516-unit multifamily property located in northeast Philadelphia, Pennsylvania. The loan was placed on the watchlist because DSC was 0.95x for the first quarter of 2008. The decrease in DSC is due to lower occupancy, the addition of security guards beginning in August 2007, and the upgrading of apartments as they become vacant. The property was 91% occupied as of March 30, 2008. Standard & Poor's stressed the loans on the watchlist, along with other loans with credit issues, as part of its pool analysis. The resultant credit enhancement levels support the lowered and affirmed ratings. Ratings Lowered CD 2006-CD3 Mortgage Trust Commercial mortgage pass-through certificates Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ N B+ BB- 1.76% O B B+ 1.64% P B- B 1.26% Q CCC+ B- 1.13% Ratings Affirmed CD 2006-CD3 Mortgage Trust Commercial mortgage pass-through certificates Class Rating Credit enhancement ----- ------ ------------------ A-1 AAA 35.89% A-1D AAA 35.89% A-2 AAA 35.89% A-3 AAA 35.89% A-AB AAA 35.89% A-4 AAA 35.89% A-5 AAA 35.89% A-1S AAA 35.89% A-M AAA 26.63% A-J AAA 11.83% A-1A AAA 11.83% B AA+ 11.20% C AA 9.69% D AA- 8.81% E A+ 8.18% F A 7.43% G A- 6.17% H BBB+ 5.03% J BBB 3.90% K BBB- 2.77% L BB+ 2.39% M BB 2.14% XP AAA N/A XS AAA N/A N/A -- Not applicable. CENTRO NP: Financial Difficulties Cue Moody's to Junk Debt Rating ----------------------------------------------------------------- Moody's Investors Service downgraded the senior unsecured debt ratings of Centro NP LLC (formerly New Plan Excel Realty Trust, Inc.) to Caa1, from B3. Although the company announced that its lenders extended its September 30, 2008 refinancing deadline for US debt to be coterminous with the Australian deadline of Dec. 15, the inability to complete portfolio sales and the material decline in capital market liquidity continues to pressure the rating. The ratings are under review for possible downgrade. These ratings actions reflect the financial difficulties and uncertainty Centro NP's parent (Super LLC) is facing in refinancing its own bridge debt in addition to Centro NP's currently outstanding $307 million revolving line of credit. Moody's also expects that Centro NP LLC will have heightened leverage and secured debt following the take-out of the bridge financing, significant property sales to fund debt, and a reduction in transparency due to increased organizational complexity. Moody's review will focus on the final capital structure and strategic profile of the company in light of Centro NP's and Centro Properties Group's short-term pressure to refinance debt. Moody's will continue to monitor Centro NP's compliance with its bond covenants and the quality and composition of its portfolio as it works though these financings. The maturity date of both the bridge facility and the line of credit is December 15, 2008. Moody's acknowledges that Centro NP has a defensive portfolio that may afford opportunities for asset sales or financing to pay off debt. Since the acquisition, Centro NP's parent's bridge loan has been reduced to approximately $1.9 billion due to a $300 million CMBS issuance and the conversion of $400 million to a one-year term loan. Centro Properties Group is operating its US community and neighborhood shopping center portfolio from Centro NP's New York City headquarters, utilizing New Plan's nationwide operating infrastructure and staff as its base. A confirmation of the Caa1 rating with a stable outlook would be contingent upon Centro NP refinancing by the December 15, 2008 deadline without materially pressuring their leverage, secured debt, and other credit metrics, while complying with bond covenants. Moody's stated that the adoption of a viable plan to refinance/restructure Centro Property Group's debt will be a positive. A downgrade would most likely reflect further extensions for Centro NP to refinance its line or Centro Properties Group to refinance its debt, no viable plan to refinance/restructure Centro NP's and Centro Property Group's debt, noncompliance with bond covenants at the Centro NP level, acceleration of bond payments, a firesale of assets, or a bankruptcy filing. These ratings were lowered to Caa1, and are under review for possible downgrade: * Centro NP LLC -- Senior unsecured debt to Caa1, from B3; medium-term notes to Caa1, from B3. Centro NP LLC, headquartered in New York City, owns and operates community and neighborhood shopping centers. The company had assets of $4.5 billion and equity of $2.3 billion at June 30, 2008. Centro Properties Group (AXP: CNP), headquartered in Melbourne, Victoria, Australia, is an Australian Listed Property Trust that specializes in the ownership, management and development of retail shopping centers in Australia, New Zealand and the USA. The company has A$22.6 billion in assets under management. CHA HAWAII: Delaware Court Transfers Venue of Cases to Hawaii ------------------------------------------------------------- Bill Rochelle of Bloomberg News reports that U.S. Bankruptcy Court for the District of Delaware granted the request of St. Francis Healthcare System of Hawaii to have the Chapter 11 bankruptcy cases of CHA Hawaii, LLC, and its debtor-affiliates transferred to Hawaii on Sept. 19, 2008. St. Francis Healthcare is the Debtors' largest secured creditor, the report notes. The Court decided that the case was better suited to Hawaii, the report says. The Court, however, reserved the right to decide how much in fees to pay the lawyers for the hospitals and the Debtors' Official Committee of Unsecured Creditors, according to the report. About CHA Hawaii Based in Wichita, Kans., CHA Hawaii, LLC runs a health care business. The Debtor and three of its debtor-affiliates filed for Chapter 11 reorganization on Aug. 29, 2008 (Bankr. D. Del. Lead Case No. 08-12027). When the Debtor filed for protection from its creditors, it listed assets of between $1 million and $10 million, and debts of between $50 million and $100 million. CHARTER COMMUNICATIONS: Jonathan L. Dolgen Resigns from Board ------------------------------------------------------------- Charter Communications Inc. disclosed that Jonathan L. Dolgen has resigned from its board of directors effective Sept. 29, 2008. "[Mr. Dolgen] has been a valuable member of Charter's board and has made many significant contributions to the company in a variety of areas," Paul G. Allen, chairman of the board and controlling shareholder of Charter, said. "We appreciate his years of service, and wish him well." "Resigning for personal reasons and to make time available for other interests, Mr. Dolgen said. "I have enjoyed having an opportunity to work with Paul Allen and the other members of the board and with the management of the company, particularly Neil Smit." Mr. Dolgen, the former chairman of the Viacom Entertainment Group, is Principal of Wood River Ventures, LLC and serves as Senior Advisor to Viacom, Inc. and among his other activities is a member of the board of directors of Expedia, Inc. and Ticketmaster. His position on the board will not be replaced at this time. About Charter Communications Headquartered in St. Louis, Missouri, Charter Communications Inc. (Nasdaq: CHTR) -- http://www.charter.com/-- is a broadband communications company and the third-largest publicly traded cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. At June 30, 2008, the company's balance sheet showed total assets of 14.71 billion and total liabilities of $23.21 billion, resulting in a shareholders' deficit of $8.50 billion. As reported in the Troubled Company Reporter on March 14, 2008, Moody's Investors Service affirmed these ratings for Charter Communications Inc.: (i) corporate family rating: Caa1; (ii) probability-of-default rating: Caa2; and (iii) senior unsecured notes: Ca (LGD5 -- 87%). CHINA GATEWAY: June 30 Balance Sheet Upside-Down by $17.8 Million ----------------------------------------------------------------- China Gateway Corporation's balance sheet as of June 30, 2008, showed $29.1 million in total assets, $47 million in total liabilities, resulting to $17.8 million in shareholders' deficit. The company posted $3.89 million in net losses for three months ended June 30, 2008, compared with $1.92 million in net losses for three months ended June 30, 2007. The company posted $2.22 million in net losses for six months ended June 30, 2008, compared with $1.22 million in net losses for six months ended June 30, 2007. The Company suffered losses for the three and six months ended June 30, 2008, and accumulated deficit of $13.74 million. These conditions raise substantial doubt as to the Company's ability to continue as a going concern. On June 5, 2008, China Gateway Corporation, formerly g8wave Holdings, Inc. all of the its right, title, and interest in and to all of the capital stock of the Company's wholly owned subsidiary, g8wave, Inc., pursuant to that certain Stock Purchase Agreement, entered into as of May 12, 2008, by and among Mr. Mindich, PMCG Management Company, LLC and the Company. About China Gateway Corporation Headquartered in Boston, China Gateway Corporation (fka g8wave Holdings Inc. (OTC BB: GEWV) -- http://www.g8wave.com/-- is an integrated mobile media company and a global provider of interactive entertainment, social networking/community services and mobile marketing services. The company provides services in the following areas: mobile content distribution services, mobile marketing applications and consulting, and mobile community development services. Going Concern Doubt As reported in the Troubled Company Reporter on June 4, 2008, Sherb & Company, LLP, in Boca Raton, Florida, expressed substantial doubt about g8wave 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 auditor pointed to the company's accumulated deficit of $10,196,529 and cash used in operating activities of $4,408,397 for the year ended Dec. 31, 2007. CHINA GATEWAY: Former G8wave Unit Faces Breach of Contract Lawsuit ------------------------------------------------------------------ China Gateway Corporation -- fka g8wave Holdings Inc. -- disclosed in a Securities and Exchange Commission filing that on Aug. 25, 2008, PodChannels, Inc. filed a civil action in the Massachusetts Superior Court, Norfolk County, captioned PodChannels, Inc. v. G8Wave, Inc. et al. (Civ. A. No. 08-1607-A). Pod alleges that G8Wave, Inc., a former unit of the company, Bradley Mindich, as an officer of G8, Habib Khoury, as a former officer of G8, and the registrant, as the former stockholder of G8, are liable for breach of contract, quantum meruit and violation of Massachusetts General Law Section 93A. In particular, Pod alleges that it provided consulting and software development services to G8 pursuant to a purported consulting agreement for which Pod was only partially compensated. Pod is seeking the outstanding balance of $246,590.40, treble damages in accordance with Massachusetts General Law Section 93A, and attorneys' fees. Pod also seeks injunctive relief against G8 and the company, "restraining and enjoining" them from "paying any monies . . . other than in the ordinary course of business." The company first learned of the lawsuit on Sept. 15, 2008. To date, the company has not been served with a summons or complaint. Pursuant to a Stock Purchase Agreement, dated May 12, 2008, by and between the company, Mr. Mindich, and PMCG Management Company, LLC, Mr. Mindich has agreed to indemnify, defend, and hold harmless the company from certain claims, including, without limitation. The company believes it has meritorious defenses and intends to defend this matter vigorously. However, as the suit is in its early stages, and given the inherent uncertainties involved in litigation, the company is unable to provide an opinion as to the likely final outcome of the litigation, or the amount of any loss if the outcome should be unfavorable. However, if a court or jury rules against the company, the ruling is ultimately sustained on appeal, damages are awarded against the registrant, and Mr. Mindich is unwilling or unable to comply with his indemnification obligations, such ruling could have a material adverse effect on the registrant's business, results of operations and financial condition. About China Gateway Corporation Headquartered in Boston, China Gateway Corporation (fka g8wave Holdings Inc. (OTC BB: GEWV) -- http://www.g8wave.com/-- is an integrated mobile media company and a global provider of interactive entertainment, social networking/community services and mobile marketing services. The company provides services in the following areas: mobile content distribution services, mobile marketing applications and consulting, and mobile community development services. Going Concern Doubt As reported in the Troubled Company Reporter on June 4, 2008, Sherb & Company, LLP, in Boca Raton, Florida, expressed substantial doubt about g8wave 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 auditor pointed to the company's accumulated deficit of $10,196,529 and cash used in operating activities of $4,408,397 for the year ended Dec. 31, 2007. CHIQUITA BRANDS: S&P Holds 'B-' Rating; Changes Outlook to Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Cincinnati, Ohio-based Chiquita Brands International Inc. to stable from negative. S&P also affirmed the existing ratings on the company, including the 'B-' corporate credit rating. As of June 30, 2008, the company had about $874 million of total debt. The outlook revision reflects operating results in the first half of 2008 that exceeded S&P's expectations, improved credit measures, and strong covenant cushion. In addition, S&P expects some near-term debt repayment using proceeds from the recent sale of Chiquita's Atlanta AG subsidiary for net proceeds of EUR65 million (about $92 million), including working capital and net debt adjustments. Although Atlanta generated about $1.2 billion of sales in 2007, it reported an operating income loss of $0.5 million. The outlook is stable. Chiquita has reduced leverage and improved covenant cushion despite high industry costs. S&P estimates that if EBITDA declines by 15%, given the current economic uncertainties, Chiquita would maintain sufficient cushion on its financial covenants. "An outlook revision to positive would require sustained improvement in operating performance, and sustained solid covenant cushion," noted Standard & Poor's credit analyst Alison Sullivan. "We could revise the outlook to negative if liquidity becomes constrained, for example, if covenant cushion is in the single- digit percentage area, and/or operating trends deteriorate," she continued. CIENA CAPITAL: Files for Chapter 11 Bankruptcy Protection --------------------------------------------------------- Ciena Capital LLC along with its 10 affiliates filed voluntary petitions under Chapter 11 in the United States Bankruptcy Court for the Southern District of New York blaming deterioration in the value of its assets as a result of increasing uncertainty in the financial markets, decreasing bid prices and a reduction in the number of loan buyers. Allied Capital Corp., which owns 95% of Ciena Capital, said that the value of Ciena's assets is insufficient to cover all of its liabilities and it is insolvent. The filing will enable it to proceed with an orderly sale of its assets over time in more favorable market conditions in the future and maximize the value of its assets and reduce costs in order to repay its debts, Allied Capital continued. Allied Capital related that its unconditional guaranty of the obligations outstanding under Ciena's revolving credit facility may become due. Allied Capital intends to pay approximately $320 million to the lenders in connection with Ciena's revolving credit facility and will continue to guarantee a remaining balance of approximately $10 million. Allied Capital said that it intends to use cash resources of approximately $150 million and may borrow approximately $170 million on its unsecured revolving line of credit to fund the payment. Furthermore, Allied Capital pointed out that it will become a senior secured lender to Ciena. Allied Capital said that on Sept. 30, 2008, after giving effect to money paid in connection with the guarantee, it estimates that it will maintain approximately $200 million in cash and other liquid securities and will have borrowings of approximately $170 million under its line of credit. In addition, Allied Capital stated that it has as much as $124 million in standby letters of credit under its line of credit, including standby letters of credit totaling approximately $103 million in connection with term securitization transactions completed by Ciena. Allied Capital disclosed that it is now in negotiations regarding the provision of a debtor-in-possession credit facility for Ciena. According to Allied Capital, the values of Ciena's assets have continued to decline as credit markets and the economy have deteriorated. As a result, Allied Capital expects that it will record substantial further unrealized depreciation in the value of its investment in Ciena for the quarter ending Sept. 30, 2008. Allied Capital said that it expects Ciena to avoid having to sell its assets in [Thur]day's unfavorable market conditions, and will instead be able to service and maximize the sales value of its assets, which in turn will allow for a maximum recovery for all creditors, including Allied Capital for any amounts paid under the guaranty. Allied Capital said that it will not realize a loss on its investment in Ciena solely as a result of the bankruptcy filing; however, the amount and timing of any future realized loss on its investment in Ciena will depend on future asset sales, future market conditions and the outcome of Ciena's bankruptcy proceedings. According to paper filed with the Court, the company listed assets and debts between $100 million and $500 million each. The company owes as much as $3,595,835 to unsecured creditors including (i) U.S. Small Business Admin (SBA) in Indianapolis, Indiana, owing $1,780,932; (ii) Paramount Group Inc. in New York owing $258,627; and (iii) Ernst & Young LLP in New York owing $200,000. The company said it has fewer than 1,000 creditors and said it expects a recovery for those that are unsecured in its filing. The company said it will continue to operate its servicing business and manage its assets as a "debtor-in-possession" under the jurisdiction of the Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Court. New York, New York-based Ciena Capital, LLC,-- http://www.cienacapital.com/-- offers commercial real estate finance services including loans and long term investment property financing. Peter S. Partee, Esq., at Hunton & Williams LLP, represents the company. CIENA CAPITAL: Case Summary & 30 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Ciena Capital LLC aka BLC Financial Services, Inc. aka Allied Capital SBLC, Inc. aka Business Loan Express, Inc. aka Business Loan Express, LLC 1633 Broadway, 39th Floor New York, NY 10019 Bankruptcy Case No.: 08-13783 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Ciena Capital LLC 08-13783 Business Loan Center, LLC 08-13785 Ciena Capital Funding LLC 08-13786 BLX Commercial Capital, LLC 08-13787 BLX Holdings Corp. 08-13788 BLX Capital Real Estate, LLC 08-13789 BLX Commercial Capital Real Estate, LLC 08-13791 BLC Real Estate, LLC 08-13792 BLX Capital Real Estate (Berlin), LLC 08-13794 BLC Real Estate (UPC Petroleum), LLC 08-13795 BLC Real Estate (Texas), LLC 08-13797 Type of Business: The Debtors offer commercial real estate finance services including loans and long-term investment property financing. See: http://www.cienacapital.com/ Chapter 11 Petition Date: September 30, 2008 Court: Southern District of New York (Manhattan) Judge: Arthur J. Gonzalez Debtor's Counsel: Peter S. Partee, Esq. ppartee@hunton.com Hunton & Williams LLP 200 Park Avenue New York, NY 10166-0136 Tel: (212) 309-1000 Fax: (212) 309-1100 Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million Debtor's 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ U.S. Small Business Admin Government $1,780,932 (SBA) 429 N. Pennsylvania Suite 100 Indianapolis, IN 46204 Tel: (317) 226-7272 Paramount Group Inc. Trade $258,627 1633 Broadway Tower LP New York, NY 10019 Tel: (212) 654-4700 Ernst & Young LLP Professional $200,000 5 Times Square New York, NY 10036-6530 Tel: (212) 773-3000 Helix Financial Group LLC Trade $176,550 Matthews, Carter and Professional $100,000 Boyce, PC Willis of New York, Inc. Insurance $89,452 RR Donnelley Global R/E Trade $85,142 c/o JPMorgan Chase Bank Sutherland Asbill & Professional $83,484 Brennan Estate of Glo-Tex Intl., Inc. Trade $68,629 Dickstein Shapiro LLP Professional $60,000 Earth Touch Inc. $56,791 Nixon Peabody LLP Professional $56,421 Quilling Selander Professional $51,768 Cummiskey American Express Trade $50,000 World Financial Center Harris & Rufty LLC Professional $49,060 Lerch, Early & Brewer, Professional $43,991 Chartered The Chartwell Law Offices Professional $36,184 Valley Forge Corporate Center Allen, Kuehnle & Stovall Professional $35,159 Winston & Strawn LLP Professional $34,882 Kevin Blaney P.C. Professional $33,944 Property Solutions, Inc. Trade $31,972 Patton Boggs LLP Professional $31,268 Law Snakard & Gambill Professional $29,104 Miller, Canfield, Paddock Professional $25,794 Steven Michael La Bret, Professional $21,997 P.A. Nexsen Pruet Adams Professional $21,735 Kleemeier McLane, Graf, Raulerson & Professional $21,019 Middleton, P.A. FedEX EDI Trade $20,941 Liberty Property Limited Trade $20,697 Sgroi Law Firm, PLC Professional $20,022 CIRCUIT CITY: Stops Issuing Profit Projections After Loss --------------------------------------------------------- Miguel Bustillo at The Wall Street Journal reports that Circuit City Stores Inc. said it would stop issuing profit projections after slumping sales led to a "bigger-than-expected" $239.2 million loss in the three months ended Aug. 31, 2008. Michael Felberbaum at The Associated Press relates that Circuit City lost $62.8 million in the same period last year. WSJ states that Circuit City reported that net sales declined 9.6% to $2.39 billion -- including a 13% drop in stores that have been open for 12 months. WSJ says that it was the sixth straight quarter that Circuit City reported declining same-store sales. Circuit City, according to the report, said that its cash position has dropped to $92.5 million this year, from $424.4 million in 2007. Circuit City said on Sept. 22, 2008, that it expected that the results of the second quarter ended Aug. 31, 2008, are slightly better than the previously provided range of a loss from continuing operations before income taxes of $170 million to $185 million, excluding any unusual non-cash charges. Circuit City said it was undertaking a "comprehensive review of the business," while executives hope to focus on upgrades that may be made quickly, WSJ relates. The company is exploring all its options, including seeking a buyer or closing some of its 1,486 stores in the U.S. and Canada, the report says, citing acting CEO James A. Marcum. The report states that Mr. Marcum said that the tumultuous economy may discourage possible buyers and that the company may continue to operate as a standalone business. "Clearly, the performance of the company is unacceptable to all of our shareholders," WSJ quoted Mr. Marcum as saying. According to the report, Mr. Marcum criticized Circuit City's direction under his predecessor, Philip J. Schoonover, who was blamed for cost- cutting measures that backfired, including the dismissal of more than 3,000 employees, which hurt customer service. The report states that Mr. Marcum said, "In many cases we believe our past actions have affected our business negatively. We must get back to the basics, and make no mistake, this is all about the customers." According to WSJ, Circuit City executives said they will concentrate on simple improvements that could be made quickly, like upgrading store signs, hiring more cheerful greeters, and speeding up checkout lines. WSJ relates that analysts were concerned about the company's acknowledgment that fewer clients were coming into its stores. "The lack of foot traffic starts to make this a very different story for investors. They have a huge gap between them and Best Buy, Wal-Mart's taking a big chunk of the business on the other end, and the market share appears to be in free fall," WSJ quoted Jefferies & Co. analyst Daniel Binder as saying. About Circuit City Stores Inc. Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- is a specialty retailer of consumer electronics, home office products, entertainment software and related services. The company has two segments: domestic and international. * * * James A. Marcum replaced former Circuit City president, chairperson and CEO Philip J. Schoonover, who left the company this month. Mr. Schoonover had engaged in a review of options for Circuit City that includes selling all or a part of the company, which operates 700 stores nationwide. Blockbuster, Inc. offered a bid, but withdrew later. It was then thought that the failed deal in July could force Circuit City to file for bankruptcy. Circuit City has since secured credit line of about $1 billion and has filed a shelf registration that would allow it to beef up its capital by selling new shares or to find debt-assuming buyers. CIRCUIT CITY: Hires Restructuring Firm FTI Consulting, Inc. ----------------------------------------------------------- Lauren Coleman-Lochner, Mark Clothier and Jonathan Keehner of Bloomberg News report that Circuit City Stores, Inc., has hired turnaround firm FTI Consulting Inc. as an adviser, according to two people with knowledge of the appointment who declined to be identified because the information isn't public. Circuit City replaced CEO Philip Schoonover on Sept. 22, 2008, with James Marcum, who joined the board of directors three months ago as vice chairman, according to the report. The report adds that Mr. Marcum, 49, led Hollywood Entertainment Corp., a movie- rental chain, and Ultimate Electronics, Inc., an electronics retailer owned by activist investor Mark Wattles, through bankruptcy. Fewer Shoppers Circuit City, according to the report, plunged 32 cents, or 30 percent, to 76 cents at 4:14 p.m. in New York Stock Exchange composite trading, the biggest decline since February 2002, as the broader markets rose more than 4 percent. The shares have dropped 82 percent this year, according to the report. Circuit City has lost customers to larger Best Buy Co. and Wal- Mart Stores, Inc., according to the report. It reported a second- quarter loss that more than tripled to $239.2 million, or $1.45 a share, from $62.8 million, or 38 cents, a year earlier, according to the report. A "significant decline" in shoppers pushed sales down 9.6 percent to $2.39 billion, the company said in a statement on Sept. 29, according to the report. Circuit City withdrew its forecast for the fiscal year ending Feb. 28, according to the report. It suspended plans for any store openings for fiscal 2010 beyond commitments already made and may close unprofitable locations while evaluating spending for this year and next, according to the report. Turnaround Strategy "We hire different advisers but won't disclose the specific ones," Circuit City said according to the report. "We're doing everything we can to conserve equity and accelerate a turnaround," according to the report. About Circuit City Stores Inc. Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- is a specialty retailer of consumer electronics, home office products, entertainment software and related services. The company has two segments: domestic and international. * * * Former Circuit City president, chairperson and CEO Philip J. Schoonover had engaged in a review of options for Circuit City that includes selling all or a part of the company, which operates 700 stores nationwide. Blockbuster, Inc. offered a bid, but withdrew later. It was then thought that the failed deal in July could force Circuit City to file for bankruptcy. Circuit City has since secured credit line of about $1 billion and has filed a shelf registration that would allow it to beef up its capital by selling new shares or to find debt-assuming buyers. CITY CROSSING: Nevada State Suspends Contractor License ------------------------------------------------------- Brian K. Miller at Globest.com reports that the Nevada State Contractors Board has suspended the licenses of developer William Plise, his company Plise Development and its subsidiaries, which include bankrupt company City Crossing. According to Globest.com, Mr. Plise failed to respond to the board's requests for additional information related to nine complaints on multiple projects. The report says that two complaints were filed on alleged project abandonment, one for failure to provide financial responsibility and six for debts. Globest.com quoted the board as saying, "The respondent has not attended administrative meetings or responded to a request for financial information. The Board finds that the public health, safety or welfare imperatively requires the summary suspension of the license(s)." The report states that Mr. Plise can file an appeal on the suspension of the licenses at a hearing within 60 days, if he requests one within 20 days. Las Vegas, Nevada-based City Crossing 1, LLC filed for Chapter 11 protection on June 2, 2008 (Bankr. D. Nev. Case No. 08-15780). Jeanette E. McPherson, Esq., at Schwartzer & McPherson Law Firm, represents the Debtor in its restructuring efforts. The Debtor had proposed to hire White & Case LLP as its primary bankruptcy counsel. In its schedules, the Debtor disclosed total assets of $242,025,172, and total debts of $194,201,534. CREDIT SUISSE: S&P Places Eight Certs. Ratings Under Neg. Watch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on eight classes of commercial mortgage pass-through certificates from Credit Suisse Commercial Mortgage Trust Series 2006-C1 on CreditWatch with negative implications. The CreditWatch placements reflect S&P's preliminary analysis of the transaction. During the analysis, S&P identified 34 loans with low debt service coverage, a number of which are potential credit concerns. These loans have experienced a weighted average 46.4% decline in DSC since issuance. The asset pool also includes several loans with interest-only periods that S&P expects will have low DSCs when their amortization periods begin. In addition, there are two loans with the special servicer, Helios AMC LLC. One loan, while current, experienced damage from Hurricane Ike; the other loan is more than 90 days past due. S&P expects to resolve the CreditWatch placements within one to two weeks, after it have completed its analysis. Ratings Placed on Creditwatch Negative Credit Suisse Commercial Mortgage Trust Series 2006-C1 Commercial mortgage pass-through certificates series 2006-C1 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ J BBB/Watch Neg BBB 4.21% K BBB-/Watch Neg BBB- 2.94% L BB+/Watch Neg BB+ 2.43% M BB/Watch Neg BB 2.04% N BB-/Watch Neg BB- 1.66% O B+/Watch Neg B+ 1.53% P B/Watch Neg B 1.40% Q B-/Watch Neg B- 1.15% CRYSTAL RIVER: S&P Lowers Ratings on 10 Classes of Securities ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 10 classes from Crystal River Resecuritization 2006-1 Ltd. S&P left nine of the ratings on CreditWatch with negative implications and removed one from CreditWatch negative. S&P originally placed the ratings on CreditWatch on Aug. 4, 2008, due to portfolio requirement test failures. The lowered ratings on Crystal River 2006-1 follow Standard & Poor's downgrades of 22 classes of commercial mortgage-backed securities (CMBS: $111.4 million, 29%) that serve as collateral for Crystal River 2006-1. The CMBS downgrades followed the Aug. 4, 2008, CreditWatch placements. The nine ratings remaining on CreditWatch reflect S&P's analysis of the transaction's exposure to six classes ($47.2 million, 12%) from Credit Suisse Commercial Mortgage Trust Series 2006-C1 (CSCMT 2006-C1), which were placed on CreditWatch with negative implications. According to the trustee report dated Aug. 22, 2008, the transaction's current assets include 71 classes ($390.5 million, 100%) of CMBS pass-through certificates from 32 distinct transactions issued between 2002 and 2007. While none of the CMBS assets have sustained any losses to date, first-loss positions currently represent $37.7 million (10%) of the asset pool. The following CMBS transactions represent asset concentrations of 10% or more of total assets: -- Classes K, L, M, N, O, P, and Q ($51.8 million, 13%) from Credit Suisse Commercial Mortgage Trust Series 2006-C4 (CSCMT 2006-C4). These classes were downgraded an average of 2.7 notches; -- Classes K, L, M, N, O, and Q ($47.2 million, 12%) from CSCMT 2006-C1; and -- Classes H, J, K, L, M, N, O, and P ($46.7 million, 12%) from Bear Stearns Commercial Mortgage Securities Trust 2006-PWR13 (BSCMST 2006-PWR13). These classes have been downgraded an average of 1.9 notches. The collateral pool also includes classes L, M, and N ($9.2 million, 2%) from Wachovia Bank Commercial Mortgage Trust's series 2007-C31. Standard & Poor's lowered the rating on each class by one notch on Sept. 26, 2008, as detailed in "22 Ratings >From 3 CMBS Deals Lowered, Off Watch Neg; ST/PCV Loan Exposure Cited," published Sept. 26, 2008. S&P's analysis indicates that the current asset pool for Crystal River 2006-1 exhibits weighted average credit characteristics consistent with 'BB-' rated obligations. Excluding the first-loss CMBS assets, S&P's analysis indicates that the current asset pool exhibits credit characteristics consistent with 'BB' rated obligations. Standard & Poor's rates $338.3 million (87%) of the assets. S&P's analysis also considers the interest reserve account, which serves to protect the interest payments to class A and has a current balance of $1 million. The decreasing creditworthiness and resulting downgrades of the collateral that occurred prior to the Aug. 4, 2008, CreditWatch placements ($35.9 million, 9%) caused the portfolio requirement test failures, which prompted the CreditWatch placements. The majority of the downgrades in the collateral since issuance ($147.3 million, 38%) occurred after the Aug. 4 CreditWatch placements. Standard & Poor's will update or resolve the CreditWatch negative placements following S&P's review of CSCMT 2006-C1. Ratings Lowered and Remaining on Creditwatch Negative Crystal River Resecuritization 2006-1 Ltd. Commercial mortgage-related securities Rating ------ Class To From ----- -- ---- A AA/Watch Neg AAA/Watch Neg B A-/Watch Neg AA/Watch Neg C BBB/Watch Neg A+/Watch Neg D BBB-/Watch Neg A-/Watch Neg E BB+/Watch Neg BBB+/Watch Neg F BB/Watch Neg BBB/Watch Neg G BB-/Watch Neg BBB-/Watch Neg H B+/Watch Neg BBB-/Watch Neg J B-/Watch Neg BB/Watch Neg Rating Lowered and Removed from Creditwatch Negative Crystal River Resecuritization 2006-1 Ltd. Commercial mortgage-related securities Rating ------ Class To From ----- -- ---- K CCC- B/Watch Neg DECODE GENETICS: June 30 Balance Sheet Upside-Down by $186.8 Mln ---------------------------------------------------------------- deCODE genetics Inc.'s consolidated balance sheet at June 30, 2008, showed $110.6 million in total assets and $297.2 million in total liabilities, resulting in a $186.8 million total stockholders' deficit. deCODE genetics posted $18.4 million in net losses on $15 million in net revenues for the three months ended June 30, 2008, compared with $16.2 million in net losses on $7.6 million in net revenues for the three months ended June 30, 2007. The company posted $45 million in net losses on $30 million in net revenues for the six months ended June 30, 2008, compared with $38.9 million in net losses on $16.2 billion in net revenues for the so months ended June 30, 2007. The period-on-period increase in revenue for the second quarter and the first half of 2008 was driven principally by growth in the company's genomic services business, which includes its diagnostics, deCODEme personal genome analysis, and contract genotyping business. Importantly, its genomic services revenues were $5.1 million and $10.0 million during the three and six-month periods ended June 30, 2008, respectively, as compared to $1.0 million and $2.1 million during the three and six-month periods ended June 30, 2007, respectively. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2008, are available for free at http://researcharchives.com/t/s?32ef About deCODE genetics deCODE genetics Inc. (Nasdaq: DCGN) -- http://www.decode.com/-- operates as a biopharmaceutical company that applies discoveries in human genetics to develop drugs and diagnostics for common diseases. The company serves pharmaceutical companies, biotechnology firms, pharmacogenomics companies, government institutions, universities, and other research institutions primarily in the United States, Europe, and internationally. The company was founded in 1996 and is headquartered in Reykjavik, Iceland. DECODE GENETICS: SEC Grants Request to Exclude Info From Report --------------------------------------------------------------- The Securities and Exchange Commission, by the Division of Corporation Finance, granted an application by deCODE Genetics, Inc. requesting confidential treatment for information it excluded from an exhibit to a Form 10-K filed on March 15, 2007. Patti J. Dennis, chief of the SEC's Office of Disclosure Support, has determined not to publicly disclose the information since it qualifies as confidential commercial or financial information under the Freedom of Information Act, 5 U.S.C. 552(b)(4). Excluded information from these exhibits will not be released to the public for the time periods specified: Exhibits 10.32 and 10.33 to through March 16, 2017 Form 10-K filed March 15, 2004 Exhibit 10.14 to the Form 10-K through March 16, 2017 filed on March 15, 2007 A copy of the deCODE genetics' Form 10-K filed March 15, 2008, is available free of charge at http://researcharchives.com/t/s?32f6 About deCODE genetics deCODE genetics Inc. (Nasdaq: DCGN) -- http://www.decode.com/-- operates as a biopharmaceutical company that applies discoveries in human genetics to develop drugs and diagnostics for common diseases. The company serves pharmaceutical companies, biotechnology firms, pharmacogenomics companies, government institutions, universities, and other research institutions primarily in the United States, Europe, and internationally. The company was founded in 1996 and is headquartered in Reykjavik, Iceland. deCODE genetics Inc.'s consolidated balance sheet at June 30, 2008, showed $110.6 million in total assets and $297.2 million in total liabilities, resulting in a $186.8 million total stockholders' deficit. DELAWARE HEALTH FACILITIES: S&P Cuts $53.5MM Bonds Rating to 'BB' ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its standard long-term rating and underlying rating to 'BB' from 'BBB-' on Delaware Health Facilities Authority's $53.5 million series 2002A and 2002B revenue and refunding bonds, issued for Nanticoke Memorial Hospital. In addition, Standard & Poor's revised the rating outlook to negative from stable. The downgrade reflects a sharp decline in volume, a significantly larger-than-expected operating loss, declining liquidity, and continued management turnover--the most recent example of which is the resignation of the hospital's fourth CEO in as many years. Although operating losses were expected, as were some volume losses, the actual operating loss of $10.9 million (negative 9.7%) in fiscal 2008 (unaudited) was significantly greater than the budgeted $4.4 million loss. The budgeted loss was based on a consultant-assisted turnaround that projected a return to a positive bottom line by fiscal 2009 and a positive operating income by fiscal 2011. Of particular concern is the 10% decline in inpatient admissions in fiscal 2008, which followed a 3.4% decline in fiscal 2007. Although improvement is evident in the first two months of fiscal 2009, the outlook remains negative because management has not developed a record of delivering on budgets and the loss that must be overcome to achieve profitability again is sizable. In addition, the organization is looking for a new CEO again. However, the hospital's limited competition should allow for profitability if the organization is well managed and can rebuild volumes through physician recruiting. "The outlook could return to stable if it meets or is close to budget and a higher rating could be achieved over time, if management stabilizes and volumes grow," said Standard & Poor's credit analyst Liz Sweeney. "We could lower the rating if the budget once again proves to be unrealistic and results in operations fall short of expectations, or if the CEO's resignation causes additional senior management turnover or volumes continue to decline," said Ms. Sweeney. The 'BB' rating is supported by the hospital's limited competition, solid liquidity at 70 days' cash on hand, and recent improvement in the first two months of fiscal 2009. DELPHI CORP: Says Agreements with Unions Fortifies Bankruptcy Exit ------------------------------------------------------------------ Delphi Corp. disclosed the effectiveness of several agreements with GM and Delphi's U.S. unions. These agreements further the significant progress Delphi has achieved in its Chapter 11 cases and, together with other actions Delphi has taken, keep Delphi on track to complete the five key tenets of its transformation by year's end. On Sept. 26, 2008, the U.S. Bankruptcy Court for the Southern District of New York authorized Delphi to enter into an Amended and Restated Global Settlement Agreement and an Amended and Restated Master Restructuring Agreement with GM, well as an amendment to an existing Advance Agreement with GM. In addition, on Sept. 23, 2008, the Bankruptcy Court authorized Delphi to take actions with respect to certain of its existing pension plans and to implement replacement pension plans. The Amended GSA and Amended MRA reflect the completion of Delphi's negotiations with GM to finalize its financial support of Delphi's legacy and labor costs, including by means of GM's assumption of Delphi's U.S. Hourly post-retirement benefits obligations and support for certain labor costs, and to document Delphi's business relationship with GM going forward. In addition, these agreements, together with Implementation Agreements, which have been entered into with each of the company's six U.S. unions, will allow Delphi to immediately commence implementation of a workable solution to its pension obligations through -- a transfer of U.S. hourly pension liabilities and assets from the Delphi hourly pension plan to the GM hourly pension plan in the net amount of approximately $2.1 to 2.4 billion, in the first of two anticipated transfers of U.S. hourly pension liabilities to the GM hourly pension plan; and -- the freezing of substantially all of Delphi's existing U.S. pension plans and the implementation of replacement plans. Importantly, the Pension Benefit Guaranty Corporation has stated that as a result of the transfer of pension liability, the PBGC will begin withdrawing its previous lien filings of approximately $1.2 billion. The amendment to the Advance Agreement provides for an additional $300 million availability to Delphi, which, combined with the net payments of over $900 million to be made by GM to Delphi upon the effectiveness of the Amended GSA and Amended MRA, provides significant enhancement to Delphi's liquidity position. These agreements and the actions being taken by Delphi provide the framework for the company to complete its transformation and emerge from Chapter 11 as soon as practicable. 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 $2,550,000,000 in equity financing to Delphi. DILLARD'S INC: Investors Demand Owners to Relinquish Control ------------------------------------------------------------ Rachel Dodes at The Wall Street Journal reports that investors are demanding that the Dillard family relinquish control of Dillard's Inc. In a letter sent Thursday to Dillard's board, the investors said they want a special committee of independent directors to look into buying the Dillard family's super-voting Class B shares requested a special meeting of shareholders to consider the planned purchase, the report says. According to WSJ, investors Barington Capital Group and Clinton Capital Group said Dillard's should have one class of shares because "the company and its public shareholders are being penalized" by the current two-tier structure. WSJ says Barington and Clinton together own 5.7% of the company's Class A shares. The investors, WSJ says, said that the Dillard family's shares warrant a "substantial premium" over the Class A shares, WSJ states. According to WSJ, the Dillard family owns almost all of Dillard's Class B shares, which control eight of the board's 12 seats. WSJ states that Barington and Clinton complained to the board in 2007 about four senior executive seats being taken by members of the Dillard family. According to the report, the investors blamed the family for the company's poor performance. WSJ reports that Barington and Clinton had reached a truce with Dillard's management after threatening a proxy fight. Dillard's, under terms of the agreement, allowed the Barington and Clinton to appoint two members to the 12-member board and let another investor, Southeastern Asset Management, put two additional directors, WSJ relates. According to WSJ, Dillard's sales have dropped over the past two years. In the six months ended Aug. 2, 2008, Dillard's posted a net loss of $35.6 million, compared with net income of $17.8 million a year earlier, WSJ says. About Dillard's Little Rock, Arizona-based Dillard's, Inc. -- http://www.dillards.com/-- is engaged in apparel and home furnishing retail business. During the fiscal year ended Feb. 2, 2008, the company operated 326 Dillard�s stores offering a selection of merchandise, including fashion apparel for women, men and children, accessories, cosmetics, home furnishings and other consumer goods. The stores of the company are located in suburban shopping malls. * * * As reported in the Troubled Company Reporter on April 16, 2008, Moody's Investors Service downgraded Dillard Inc.'s corporate family rating to B1 from Ba3. Moody's said the outlook remains stable. As reported in the Troubled Company Reporter on April 16, 2008, Standard & Poor's Ratings Services lowered the ratings on Dillard's Inc. to 'BB-' from 'BB.' S&P said the outlook is stable. As reported in the Troubled Company Reporter on April 3, 2008, Fitch Ratings affirmed its 'BB' issuer default on Dillard's, Inc. Fitch said the rating outlook was revised to negative from stable. DISH NETWORK: S&P's Ratings & Outlook Unmoved by AT&T's Decision ---------------------------------------------------------------- On Sept. 29, 2008, Standard & Poor's Ratings Services said that its ratings and outlook on Englewood, Colorado-based satellite TV provider DISH Network Corp., including the 'BB-' corporate credit rating, remain unchanged following the announcement that AT&T Corp. (A-/Stable/A-1) had selected The DIRECTV Group Inc. (BB/Stable/--) to be its exclusive provider of co-branded satellite TV service beginning Jan. 31, 2009. Since the first quarter of 2008, DISH has been that exclusive provider. Prior to the first quarter, DISH had been the exclusive provider for the former SBC territories while DIRECTV had served the former BellSouth territories. DISH will retain its existing AT&T co- branded customers. While this announcement is a negative for DISH's business and could exacerbate the company's churn and new subscriber growth issues, DISH's relatively low leverage for its rating category still supports the 'BB' corporate credit rating. Leverage as of the June 30, 2008, quarter, was 2.1x debt to latest-12-month EBITDA, adjusted for operating leases. Net subscriber growth has been weak for the past three quarters due to a slowing economy, piracy, an increasingly competitive environment, and internal operational missteps. All of this led to DISH reporting a net loss of subscribers in the second quarter of 2008, the first such loss in the company's 13-year public history. DIXIE MANAGEMENT: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------------ Erik Larson of Bloomberg News reports that Dixie Management & Investment, LP, and debtor-affiliate Ben B. Israel filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court for the Western District of Arkansas (Lead Case No. 08-73874) on Sept. 29, 2008, blaming the collapse of the U.S. real-estate market. Fayetteville, Arkansas-based Dixie Management & Investment, LP, engages in commercial real estate leasing. Derrick Mark Davidson, Esq., at Derrick Davidson, P.A., represents the Debtors in their restructuring efforts. In its filing, the Lead Debtor listed $10 million to $50 million in assets and $10 million to $50 million in estimated debts. DIXIE MANAGEMENT: Case Summary & 28 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Dixie Management & Investment, Limited Partners 908 Rolling Hills Drive, Suite 201 Fayetteville, AR 72703 Tel: (479)251-0707 Bankruptcy Case No.: 08-73874 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Ben B Israel 08-73875 Type of Business: The Debtor engages in commercial real estate leasing. Chapter 11 Petition Date: September 29, 2008 Court: Western District of Arkansas (Fayetteville) Debtor's Counsel: Derrick Mark Davidson, Esq. derrick@davidsonbusinessattorney.com Derrick Davidson, P.A. 3236 E. Charing Cross Fayetteville, AR 72703 Tel: (479) 935-4100 Fax: (479) 856-6168 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million Debtor's 28 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ BB&T Leasing Corporation and trade debt $398,888 BB&T Equipment Financing Corp. 5130 Parkway Plaza, Blvd. Charlotte, NC 28217 William Dougherty Baker, Donaldson, Bearman, Caldwell & Berkowitz, P.C. 165 Madison Avenue, Suite 200 Memphis, TN 38103 Tel: (901) 577-2340 Built-Well Construction trade debt $280,548 Company 13754 Hwy., 279 Bentonville, AR 72712 John Scott Keisling, Pieper & Scott PLC One Steele Plaza 3739 Steele Blvd., Ste. 340 Fayetville, AR 72703 Tel: (479) 251-0800 Campbell Electric Inc. trade debt $261,942 2301 S. School St. Fayetteville, AR 72701 John Scott Keisling, Pieper & Scott PLC One Steele Plaza 3739 Steele Blvd., Ste. 340 Fayetville, AR 72703 Tel: (479) 251-0800 Dean Enterprises, Ltd. trade debt $260,000 c/o Dorothy Patrick 3893 Georgia Street Springdale, Ar 72762 Donniee Rutledge Lisle Law Firm 1458 Plaza Place Springdale, AR 72764 Tel: (479) 750-444 Tom Muccio trade debt $191,927 National City Commercial trade debt $167,000 Capital Company Yan Qin Chan trade debt $138,750 Judy Israel trade debt $116,000 Vitro America Inc. trade debt $115,276 First National Bank Omaha trade debt $85,000 City of Frisco, Texas property tax $67,000 Concrete Services of NWA Inc. trade debt $59,770 Allegiant Partners Inc. trade debt $56,676 First Federal Bank of Arkansas bank loan $49,876 National Home Centers trade debt $41,670 Kitchen Distributors Inc. trade debt $39,516 Evans Industrial Coatings trade debt $37,900 Banc of America Leasing trade debt $36,206 Alliance Financial LLC trade debt $29,341 Schwob Building trade debt $28,861 Wittenberg Deloney & Davidson trade debt $27,000 Stone Panels Inc. trade debt $26,319 Gill Elrod Ragon Owen & trade debt $25,862 Sherman P.A. Washington County, Arkansas property tax $11,586 Bellotte and Associates trade debt $3,000 Dell Financial Services trade debt $2,500 Benton County, Arkansas trade debt $839 Hobbs & Curr Family Limited litigation claim $1 Partnership, LLP ERIE COUNTY PLASTICS: Case Summary & Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Erie County Plastics Corporation 844 Route 6 Corry, PA 16407 Bankruptcy Case No.: 08-11860 Type of Business: The Debtor makes custom injection molders of plastics packaging and components including lids, closures and vials. http://www.erieplastics.com/ Chapter 11 Petition Date: September 29, 2008 Court: Western District of Pennsylvania (Erie) Debtor's Counsel: Lawrence C. Bolla, Esq. lbolla@quinnfirm.com Quinn Buseck Leemhuis Toohey & Kroto Inc. 2222 West Grandview Boulevard Erie, PA 16506-4508 Tel: (814) 833-2222 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bank One Capital Partners II Subordinated Debt $11,819,744 JPM Mezzanine Capital LLC 277 Park Avenue, 9th Floor New York NY 10172 DOW Chemical Trade debt $727,686 2030 Willard H. Dow Center Midland MI 48674 Corry Area Industrial Trade debt $360,792 Development Co. 1524 Enterprise Road Corry PA 16407 Penelec Trade debt $319,796 P.O. Box 3687 Akron OH 44309 Adhesive Systems, Inc. Trade debt $286,290 15477 Woodrow Wilson Detroit MI 48238 Nova Chemicals, Inc. Trade debt $189,667 Channel Prime Alliance Trade debt $178,295 International Paper Trade debt $151,905 Poly One Corp. Trade debt $107,584 J&A Tool Company, Inc. Trade debt $107,120 Flint Hills Resources Trade debt $104,946 Georgia-Pacific Bradford Trade debt $103,181 Corrugated LLC Wells Fargo Equipment Finance Trade debt $101,775 Rite Systems Trade debt $100,594 Bamberger Polymers Trade debt $99,824 Ivanhoe Tool & Die Co., Inc. Trade debt $93,783 Selig Sealing Prodcuts Trade debt $91,620 Saint-Gobain Plastics Trade debt $89,194 Entec Polymers LLC Trade debt $87,848 American Styrenics Trade debt $86,108.00 FORD MOTOR: May Repay $1.5 Billion Debt Due Today ------------------------------------------------- Ford Motor Co. may repay about $1.5 billion in debt coming due on Oct. 1, 2008, without tapping a revolving credit line, Bill Koenig and Jeff Green at Bloomberg News report, citing analysts. Bloomberg relates that the debt includes: -- $1 billion in five-year, unsecured bonds at the Ford Motor Credit Co. consumer-finance unit, which has a coupon interest rate of 5.625%, and was part of a September 2003 sale of $3 billion in 5- and 10-year notes; and -- $500 million in 12-year notes at Ford, which was "sold in 1996 and has an interest rate of 7.25%." According to Bloomberg, Ford took a $23.4 billion loan in 2006 to have enough cash to develop new models while shutting down plants and laying off workers in North America, its home market and the main source of $23.9 billion in losses since 2005. Bloomberg says that as part of the 2006 restructuring, Ford secured an $11.5 billion revolving line of credit that it hasn't used. Ford's CEO Alan Mulally is using cash to help pay for a plan to develop more small cars and lessen the company's reliance on large pickup trucks and sport-utility vehicles, Bloomberg relates. Citing Standard & Poor's credit analyst Robert Schulz, Bloomberg states that Ford Credit may refinance some of the $1 billion coming due, as part of its normal financing activities, while the $500 million coming due at Ford Motor would be paid in cash. "We expect them to use cash out of hand to pay those down. In the current environment we simply expect these sorts of debts to be paid off, not refinanced," Bloomberg quoted Fitch Ratings Co. credit analyst Mark Oline as saying. According to Bloomberg, Mr. Schulz said, "Given their cash levels, we certainly wouldn't expect them to need to tap their revolver." Ford reported in August that it had $30.1 billion in cash and equivalents and $12.5 billion in marketable securities as of June 30, 2008. "If conditions keep deteriorating, Ford may eventually have to tap its revolving credit, sooner than expected," the report quoted Mr. Oline as saying. About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on Aug. 5, 2008, Fitch Ratings has downgraded the issuer default rating of Ford Motor Company and Ford Motor Credit Company LLC to 'B-' from 'B'. The Rating Outlook remains Negative. The downgrade reflects: the further deterioration in Ford's U.S. sales as a result of economic conditions, an adverse product mix and the most recent jump in gas prices; portfolio deterioration at Ford Credit and heightened concern regarding economic access to capital to support financing requirements; and escalating commodity costs that will remain a significant offset to cost reduction efforts. FREDDIE MAC: Moody's Assigns 'Ba1' Rating on $26.5MM Class B Cert. ------------------------------------------------------------------ Moody's Investors Service has assigned definitive ratings to securities issued by Freddie Mac Multifamily Variable Rate Certificates Series; -- Class B, $26,549,651, rated Ba1 FREMONT GENERAL: Wants Exclusive Period Extended Until Jan. 2009 ---------------------------------------------------------------- Bill Rochelle of Bloomberg News reports that Fremont General Corp. asked the U.S. Bankruptcy Court for the Central District Of California to extend its exclusive right to propose a Chapter 11 plan until Jan. 30, 2009. The Court has scheduled a hearing on the motion on Oct. 16, 2008, the report says. Absent an extension of their Exclusive Periods, the Debtor says there could be three or more competing plans, according to the report. Currently, the court filing says, there is no agreement on the "contours of a plan," according to the report. About Fremont General Based in Santa Monica, Calif., Fremont General Corp. (OTC: FMNTQ) -- http://www.fremontgeneral.com/-- was a financial services holding company with $8.8 billion in total assets at Sept. 30, 2007. Fremont General ceased being a financial services holding company on July 25, 2008, when its wholly owned bank subsidiary, Fremont Reorganizing Corporation (f/k/a Fremont Investment & Loan) completed the sale of its assets, including all of its 22 branches, and 100% of its $5.2 billion of deposits to CapitalSource Bank. Fremont General filed for Chapter 11 protection on June 18, 2008, (Bankr. C.D. Calif. Case No. 08-13421), after selling subsidiary Fremont Investment & Loan to CapitalSource Inc. Robert W. Jones, Esq., and J. Maxwell Tucker, Esq., at Patton Boggs LLP, serve as counsel to the Debtor. Theodore Stolman, Esq., and Scott H. Yun, at Stutman Treister & Glatt, are the co-counsel to the Debtor. The Debtor selected Kurtzman Carson Consultants LLC as its claims agent. Lee R. Bogdanoff, Esq., Jonathan S. Shenson, Esq., and Jonathan D. Petrus, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP, represent the Official Committee of Unsecured Creditors as counsel. In its schedules, Fremont General reported $362,227,537 in total assets and $326,529,372 in total debts. When the Debtor filed for protection from its creditors, it listed total assets of $643,197,000 and total debts of $320,630,000. FRONTIER AIRLINES: Teamsters Balk at CBA's Proposed Modifications ----------------------------------------------------------------- The International Brotherhood of Teamsters Airline Division contends that Frontier Airlines Holdings Inc.'s proposed modifications to their collective bargaining agreements with the Union, eliminates their Union-represented workers' jobs and pensions and cuts their wages, in violation of Section 1113 of the Bankruptcy Code. The Debtors sought to: (a) reject three of their CBAs with the Teamsters, which cover (i) aircraft appearance agents and maintenance cleaners, (ii) aircraft technicians, ground service equipment technicians and tool room attendants, and (iii) material specialists; and (b) implement the terms of their bargaining proposal to the Teamsters, in accordance with Section 1113 of the Bankruptcy Code. According to Marianne Goldstein Robbins, Esq., at Previant, Goldberg, Uelmen, Gratz, Miller & Brueggeman, S.C., in Milwaukee, Wisconsin, the Debtors failed to demonstrate that they have a viable business plan, detailing that the changes they seek to implement in the CBAs "help bring about an actual recovery." The Debtors have not attempted to show why their proposed permanent change to the CBAs -- which essentially eliminates a significant part of the Teamsters' bargaining unit -- is an appropriate response to market fluctuations, Ms. Robbins maintains. Frontier asserts that the Proposed Modifications will save $5,600,000 from concessions from the Teamsters; however, it does not provide the U.S. Bankruptcy Court for the Southern District of New York with a gauge as to what percentage of the total needed savings and labor cost savings the amount constitutes, declared the Teamsters' Special Airline Division Counsel, William Wilder, Esq., at Baptiste & Wilder, P.C., in Washington, D.C. Accordingly, Frontier's statistics in its Proposed Modification "do not suggest a crisis," says Ms. Robbins. Outsourced Maintenance Work Despite Frontier's assumption that subcontracting maintenance jobs will have no inefficiencies, its proposed subcontractor, Aeroman, an El Salvador-based company, withdrew in March 2007, a bid for maintenance on six aircraft because it had no hangar space available, Mr. Wilder notes. Mr. Wilder also denies the Debtors' contention that no efficiencies can be obtained from their domestic unionized workforce, because Frontier was able to perform C-Checks ahead of schedule and for less cost than projected. The main justification for Frontier's subcontracting necessity is that "it will be forced to pay mechanics for doing nothing" during "gaps" -- which are produced by the reduction in the overall number of aircraft in the fleet -- between heavy maintenance of C-Checks. The purported "savings" that subcontracting will bring to Frontier is not based upon historical experience; hence, there is no way to substantiate that the "savings" are quantified correctly, Ms. Robbins notes. Furthermore, Mr. Wilder states that the context of gaps is itself a questionable assumption because Frontier will try to increase its service to its main market and has, in fact, ordered eight additional planes, now with delayed delivery in 2012. Because 75% of the gaps between C-Checks occur only in years 2011 to 2013, the Debtors cannot justify necessity for the immediate and irreversible elimination of most of the bargaining unit through the rejection of their CBAs. "Frontier also exaggerates the extent of industry subcontracting, [as its airline] competitors . . . do not subcontract all C-Check work," Mr. Wilder tells the Court. Pay Cuts and Pension Elimination To recall, Ms. Robbins says, the Teamsters voluntarily made interim concessions in May 2008, which called for pay reductions from May 24 to September 26, to aid the Company in securing Debtor-in-possession Financing in its Chapter 11 cases. However, she continues, Frontier has resorted to seeking to eliminate entirely the Teamster employees' retirement security by eliminating their pensions, rather than to seek the reductions in a more moderate way. In a declaration filed with the Court, the Teamsters' Senior Airline Analyst James M. Craun submits that Frontier makes no effort to achieve its goals through cost-saving alternatives, including furloughs of redundant employees, even as the Company's labor costs are among the lowest in the industry. Moreover, eliminating the pension saves about 1% of the $35,000,000 in concessions from all of the Debtors' employees, which is "insignificant" in the financial picture of Frontier, Mr. Wilder says. Similarly, enhancing the position of other creditors at the expense of employees is not a legitimate reason for Frontier's request under Section 1113 of the Bankruptcy Code, Ms. Robbins contends, citing In re Cedar Rapids Meats, 117 B.R. 448, 451 (Bankr. N.D. Ohio 1990). "The question is why [Teamsters-represented] mechanics should have their pay reduced by more than the non-union employees," Ms. Robbins points out. "Bad-Faith" Proposal Ms. Robbins avers that contrary to the Debtors' assertion, the Teamsters' insistence on detailed information on the Proposed Modifications cannot be regarded as "stonewalling" or "dilatory". Additionally, Ms. Robbins discloses that Frontier "negotiated with its DIP lenders to cement in place a package of proposals which called for deep cuts in Teamster wages and elimination of Teamster pensions and much of the bargaining unit." "These meetings, effectively secret negotiations that dictated the outcome of what should have been the 'real' negotiations with the Teamsters, were conducted with parties who have no right to negotiate or even to be heard on the Section 1113 issues," she maintains. Ms. Robbins tells the Court that the 5000-page data that the Debtors provided the Teamsters do not indicate meaningful response to certain significant issues, including, among others: * the alleged economic "need" or "hole" that needs to be filled and how Frontier intends to solve it; * the "sacrifices" that will be made by other employee groups, if any, and the the constituencies besides the employees who will make sacrifices; * other reasonable alternative strategies, if any; and * the number of aircraft that Frontier will fly and the projected price of fuel in the aircraft model. Additionally, the Modifications Proposal is not based on the most complete and reliable information, as it did not, among other things (i) disclose an updated plan on the basis of fuel price data, (ii) consider actual in-house or contractor work performed in estimating its savings, and (iii) consider the operation of the Seniority Clause, which governs the elimination of employees based on seniority and wage scales. For these reasons, the Teamsters ask Judge Robert D. Drain to deny the Debtors' request. About Frontier Airlines Inc. Headquartered in Denver, Colorado, Frontier Airlines Inc. -- http://www.frontierairlines.com/-- provide air transportation for passengers and freight. They operate jet service carriers linking their Denver, Colorado hub to 46 cities coast-to-coast, 8 cities in Mexico, and 1 city in Canada, well as provide service from other non-hub cities, including service from 10 non-hub cities to Mexico. The Debtor and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.: 08- 11297 thru 08-11299.) Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. (Frontier Airlines Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FRONTIER AIRLINES: Courts Sets November 17 as Claims Bar Date ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York established Nov. 17, 2008, as the deadline for filing proofs of claim in Frontier Airlines Inc. and its debtor-affiliates' cases. Judge Robert D. Drain deemed the Bar Date Notice adequate and sufficient, which will be served upon the parties-in-interest at least 35 days prior to the Claims Bar Date. Prior to the Court's entry its order, Damian S. Schaible, Esq., at Davis Polk & Wardwell, in New York, filed a certificate of no objection regarding the Debtors' request. Headquartered in Denver, Colorado, Frontier Airlines Inc. -- http://www.frontierairlines.com/-- provide air transportation for passengers and freight. They operate jet service carriers linking their Denver, Colorado hub to 46 cities coast-to-coast, 8 cities in Mexico, and 1 city in Canada, well as provide service from other non-hub cities, including service from 10 non-hub cities to Mexico. The Debtor and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.: 08- 11297 thru 08-11299.) Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. (Frontier Airlines Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) GARNIC ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Garnic Enterprises, LLC dba Foreign Motors East P.O. Box 690 Danielson, CT 06239 Bankruptcy Case No.: 08-21865 Chapter 11 Petition Date: September 26, 2008 Court: District of Connecticut (Hartford) Debtor's Counsel: Neil Crane, Esq. Law Offices of Neil Crane, LLC neilcranelaw@snet.net 2700 Whitney Avenue Hamden, CT 06518 Tel: (203) 230-2233 Fax: (203) 230-8484 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A copy of the Debtor's petition that contains the list of its 20 Largest Unsecured Creditors is available at: http://bankrupt.com/misc/ctb08-21865.pdf GE COMMERCIAL: S&P Chips Loan Ratings on Ongoing Potential Risks ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on nine classes of notes issued by GE Commercial Loan Trust's series 2006-1, 2006-2, and 2006-3. The lowered ratings remain on CreditWatch with negative implications, where they were placed July 22, 2008. At the same time, S&P affirmed its ratings on the other tranches from these three transactions. The affected transactions are cash flow arbitrage collateralized loan obligation transactions that are backed by syndicated and middle market loans. The downgrades primarily reflect a decline in credit enhancement as a result of the losses that the transactions continue to incur after triggering their "required sale assets" provisions. The transactions triggered these provisions when the market value of some securities in the portfolio from the three transactions breached their prespecified limits. This necessitated the sale of the affected securities at less than par prevailing market rates. The sale of the affected collateral at prevailing market prices reduced the par balance of each transaction's portfolio. The reduction in available credit enhancement left the affected classes with insufficient support at their previous ratings, leading to the downgrades. The ratings on the downgraded notes remain on CreditWatch negative while S&P assesses the impact of a few unsettled trades and reflect the ongoing potential risk of declining market prices on the remaining portfolio. The affirmed ratings on the other notes are based on the existing credit support available. Standard & Poor's notes that the July 21, 2008, trustee report for each transaction included a proposal to amend the "required sale assets" provisions. Ratings Lowered and on Remaining on Creditwatch Negative GE Commercial Loan Trust Series 2006-1 Rating Balance (mil. $) Class To From Original Current* ----- -- ---- -------- -------- B A-/Watch Neg A/Watch Neg 80.753 43.413 C BBB-/Watch Neg BBB/Watch Neg 32.123 17.269 Pref Trust BB-/Watch Neg BB/Watch Neg 37.477 20.419 GE Commercial Loan Trust Series 2006-2 Rating Balance (mil. $) Class To From Original Current* ----- -- ---- ----------------- C A-/Watch Neg A/Watch Neg 56.697 26.136 D BB+/Watch Neg BBB-/Watch Neg 47.526 21.908 Pref Trust BB-/Watch Neg BB/Watch Neg 8.337 3.922 GE Commercial Loan Trust Series 2006-3 Rating Balance (mil. $) Class To From Original Current* ----- -- ---- ----------------- C A-/Watch Neg A/Watch Neg 64.695 40.140 D BB+/Watch Neg BBB-/Watch Neg 44.789 27.790 Pref trust BB-/Watch Neg BB/Watch Neg 14.431 9.037 Ratings Affirmed GE Commercial Loan Trust Series 2006-1 Balance (mil. $) Class Rating Original Current* ----- ------ -------- -------- A-1 AAA 319.000 41.558 A-2 AAA 281.007 281.007 A-PT AAA 100.000 53.760 GE Commercial Loan Trust Series 2006-2 Balance (mil. $) Class Rating Original Current* ----- ------ -------- -------- A-1 AAA 358.526 7.968 A-2 AAA 291.823 291.823 B AA 30.849 14.220 GE Commercial Loan Trust Series 2006-3 Balance (mil. $) Class Rating Original Current* ----- ------ -------- -------- A-1 AAA 433.467 135.035 A-2 AAA 352.822 352.822 B AA 36.826 22.849 * Balances were calculated after the July 21, 2008, payment date. GOODY'S FAMILY: MDOR, et al., Balk at Amended Chapter 11 Plan ------------------------------------------------------------- The Missouri Department of Revenue, Texas Comptroller of Public Accounts and Texas Workforce Commission, and Libby Westmark Enterprises LLC and Libby Cross Station Enterprises LLC ask the Hon. Christopher S. Sontchi of the United States Bankruptcy Court for the District of Delaware to deny confirmation of the first amended joint Chapter 11 plan of reorganization filed by Goody's Family Clothing Inc. on Aug. 26, 2008. A. Missouri Department of Revenue MDOR has a priority tax claim for $33,646 for sales tax liability from June 1, 2008, to June 9, 2008. MDOR relates that one of the Debtors' options for payment of the allowed priority tax claims provides for deferred cash payments over a period exceeding five years after the petition date in an aggregate principal amount equal to the face amount of the allowed priority tax claim, plus interest on the unpaid portion at the rate of interest determined under applicable non-bankruptcy law as of the calender month in which the plan is confirmed. MDOR argues that the terms of the Debtors' plan lack specificity regarding payment of the priority tax claims and, as such, would be extremely difficult to enforce in the event of a default in plan payments. The Debtors' plan does not state when payments on priority tax claims will commence or the frequency of the payments, MDOR points out. B. Texas Comptroller and TWC The Texas entities filed more than $1.3 million in priority claims. According to the Texas entities, the plan provides for reserves to cover various categories of claims, but refers to a reserve only for "allowed" priority tax claims. If a party in interest disputes a priority tax claims and that claims has not been "allowed" on the plan's effective date, no reserve need be created, the Texas entities contend. Because large amounts of priority tax claims may be disputed in these cases, not reserving for them creates a substantial risk of non-payment, the Texas entities says. Reserves should be required for all priority tax claims as filed and deemed allowed under Section 502(a) of the U.S. Bankruptcy Code, the Texas entities point out. The Texas entities tell the Court that the "allowed claims" is unclear in providing that "allowed claims" will not, for purposes of distribution under the plan, include for prepetition claims interest or any other amounts accruing on, in connection with, the allowed claim until the Debtors' bankruptcy filing. If the definition is intended to preclude prepetition interest on priority tax claims, the plan should be revised, because prepetition interest on priority tax claims is entitled to priority status to the same extent as tax principal, the Texas entities stated. C. Libby Westmark and Libby Cross The Libby entities are landlords of two parcels of non-residential shopping center real estate space leased by the Debtor, located at the Cross Station Shopping Center in Albany, Georgia, and at the Westmark Plaza Shopping Center in Sumpter, South Carolina. Both of these properties are leased by the Debtors under certain unexpired leases, and the Debtors have neither assume nor rejected the two leases, the Libby entities say. Libby entities filed a claim for unpaid amounts of $32,172 in the aggregate, including administrative expense claims for stub rent. According to the Libby entities, the Debtors' plan seems to provide that applicable cure amounts which would be due to Libby as a condition of assumption and assignment of their leases by the Debtors; however, no schedule or detail of the proposed cure amount that the plan proponent would propose to have paid to it for its cure amount upon assumption and assignment of the leases have yet been filed, the Libby entities say. Furthermore, there is also a potential conflict with the Debtors' amended plan that requires clarification related to a pending appeal by the Debtors of the Libby entities' administrative expense claim for stub rent owed. Confirmation Hearing on October 6 The Court set Oct. 6, 2008, at 1:00 p.m., to consider confirmation of the amended plan. To recall, the Court approved the Debtors' amended disclosure statement explaining an amended Chapter 11 plan on Aug. 25, 2008. The amended plan classifies interests against and claims in the Debtors in 12 classes. The classification of treatment of interests and claims are: Treatment of Interests and Claims Type Estimated Estimated Class of Claims Treatment Amount Recovery ----- --------- --------- --------- --------- 1 prepetition senior unimpaired $0 100% lender claims 2 secured tax unimpaired $300,000 100% claims 3 aviation finance unimpaired $1,325,000 100% group secured claims 4 miscellaneous unimpaired unknown 100% secured claims 5 non-tax priority unimpaired $350,000 100% claims 6 prentice term loan impaired $67,527,777 26%-93% agreement claim 7 trance B term loan impaired $31,795,260 0% agreement claims 8 general unsecured impaired $125,000,000- 5%-10% claims $160,000,000 9 convenience claims impaired 0% 10 intercompany claims impaired 0% 11 subordinated 510(c) impaired 0% claims 12 subordinated 510(b) impaired 0% claims 13 old equity interest impaired 0% Classes 6,7 and 8 are entitled to vote to accept or reject the plan. Under the plan, allowed administrative claims, 503(b)(9) claims, priority tax claims, and non-tax priority claims will be paid in full, unless otherwise agreed by the holders of the claims. Holders of Class 2 and 4 claims may be reinstated on original terms, satisfied on deferred payment terms, or paid in full on the plan's effective date, at the Debtors' option. The tranche b term loan agreement claims held by GMM Capital LLC and PGDYS Lending LLC, an affiliates of Prentice Capital Management LP, will be treated as follows: i) GMM will receive new common stock if GMM makes the GMM equity election or treatment of its allowed tranche B loan agreement claim as a Class8 general unsecured claim; and ii) PGDYS Lending will receive new common stock. Moreover, PGDYS Lending has agreed to waive its rights to participate in the Class8 general unsecured claim distribution on account of the unsecured claim arising with respect to its allowed trance B loan agreement claims. Holders of Class 8 general unsecured claims will receive a pro rate share of (i) the general unsecured creditor cash, and (ii) the general unsecured creditor note. Class 9, 11 and 12 will not receive any distribution under the plan. Holders of Class 10 intercompany claims will be either: i) reinstated, in full or in party, or ii) canceled and discharge, in full or in part, in which case such discharged and satisfied portion will be eliminated and the holder of Class 10 claims will not receive any distribution under the plan. Class 13 equity interest will be canceled. A full-text copy of the Debtors' amended joint Chapter 11 plan of reorganization is available for free at: http://ResearchArchives.com/t/s?3153 Headquartered in Knoxville, Tennessee, Goody's Family Clothing Inc. -- http://www.shopgoodys.com/-- operates chains of clothing stores. The company is owned by Goody's Holdings Inc., a non- debtor entity. As of May 31, 2008, the company operates 355 stores in several states with approximately 9,868 personnel of which 170 employees are covered under a collective bargaining agreement. The company and 19 of its affiliates filed for Chapter 11 protection on June 9, 2008 (Bankr. D. Del. Lead Case No.08- 11133). Gregg M. Galardi, Esq., and Marion M. Quirk, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Paul G. Jennings, Esq., at Bass, Berry & Sims PLC, represent the Debtors. The Debtors selected Logan and Company Inc. as their claims agent. The U.S. Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. Frederick Brian Rosner, Esq., at Duane Morris LLP, and Lawrence C. Gottlieb, Esq., Cathy Herschopf, Esq., and Jeffrey L. Cohen, Esq., at Cooley Godward Kronish LLP, represent the Committee in these cases. When the Debtors filed for protection against their creditors, they listed assets and debts between $100 million and $500 million. As of May 3, 2008, the Debtors' records reflected total assets of $313,000,000 -- book value -- and total debts of $443,000,000. GOODY'S FAMILY: Has Until November 21 to File Chapter 11 Plan ------------------------------------------------------------- The Hon. Christopher S. Sontchi of the United States Bankruptcy Court for the District of Delaware further extended the exclusive periods of Goody's Family Clothing Inc. and its debtor-affiliates to: -- file a Chapter 11 plan, until Nov. 21, 2008, and -- solicit acceptances of that plan, until Jan. 5, 2009. As reported in the Troubled Company Reporter on Sept. 3, 2008, the Debtors told the Court that the requested extension is filed out of an abundance of caution as it attempts to secure adequate financing. The Court approved the amended disclosure statement explaining the amended joint Chapter 11 plan of reorganization filed by the Debtors and the Official Committee of Unsecured Creditors. A hearing is set for Oct. 6, 2008, at 1:00 p.m., to consider confirmation of the amended plan. About Goody's Family Headquartered in Knoxville, Tennessee, Goody's Family Clothing Inc. -- http://www.shopgoodys.com/-- operates chains of clothing stores. The company is owned by Goody's Holdings Inc., a non- debtor entity. As of May 31, 2008, the company operates 355 stores in several states with approximately 9,868 personnel of which 170 employees are covered under a collective bargaining agreement. The company and 19 of its affiliates filed for Chapter 11 protection on June 9, 2008 (Bankr. D. Del. Lead Case No.08- 11133). Gregg M. Galardi, Esq., and Marion M. Quirk, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Paul G. Jennings, Esq., at Bass, Berry & Sims PLC, represent the Debtors. The Debtors selected Logan and Company Inc. as their claims agent. The U.S. Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. Frederick Brian Rosner, Esq., at Duane Morris LLP, and Lawrence C. Gottlieb, Esq., Cathy Herschopf, Esq., and Jeffrey L. Cohen, Esq., at Cooley Godward Kronish LLP, represent the Committee in these cases. When the Debtors filed for protection against their creditors, they listed assets and debts between $100 million and $500 million. As of May 3, 2008, the Debtors' records reflected total assets of $313,000,000 -- book value -- and total debts of $443,000,000. GOODY'S FAMILY: Shuts Down E-Commerce Web Site ---------------------------------------------- Knoxville News Sentinel (Tennessee) reports that Goody's Family Clothing, Inc., is shutting down its e-commerce division, including its e-commerce Web site. Knoxville News relates that the shutting down of the e-commerce division effectively removes Goody's Family from the online retail arena. Goody's Family spokesperson Deborah Zahn said that the company would continue to operate an informational company Web site, Knoxville News states. About Goody's Family Headquartered in Knoxville, Tennessee, Goody's Family Clothing Inc. -- http://www.shopgoodys.com/-- operates chains of clothing stores. The company is owned by Goody's Holdings Inc., a non- debtor entity. As of May 31, 2008, the company operates 355 stores in several states with approximately 9,868 personnel, of which 170 employees are covered under a collective bargaining agreement. The company and 19 of its affiliates filed for Chapter 11 protection on June 9, 2008 (Bankr. D. Del. Lead Case No. 08- 11133). Gregg M. Galardi, Esq., and Marion M. Quirk, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Paul G. Jennings, Esq., at Bass, Berry & Sims PLC, represent the Debtors. The Debtors selected Logan and Company Inc. as their claims agent. The U.S. Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. Frederick Brian Rosner, Esq., at Duane Morris LLP, and Lawrence C. Gottlieb, Esq., Cathy Herschopf, Esq., and Jeffrey L. Cohen, Esq., at Cooley Godward Kronish LLP, represent the Committee in these cases. When the Debtors filed for protection from their creditors, they listed assets and debts of between $100 million and $500 million. As of May 3, 2008, the Debtors' records reflected total assets of $313,000,000 -- book value -- and total debts of $443,000,000. HAWAII MEDICAL: Will Lay Off Workers This Week ---------------------------------------------- Khnl.com (Hawaii) reports that Hawaii Medical Center said on Friday that it will start laying off workers starting this week. Hawaii Medical will fire a total of 150 workers at its HMC East and HMC West, Khnl.com says, citing hospital officials. According to Khnl.com, Hawaii Medical's Chief Executive Officer Danelo Canete said that the pending job cut is necessary because the center is overstaffed. "Thanks to the efficiency of our operating model and substantially improved patient care, we are able to treat patients more quickly and allow them to return to their families soon than before. This uses fewer beds while caring for the same number of patients, so we are overstaffed," the report quoted Mr. Canete as saying. The report states that Hawaii Medical is overstaffed by at least 30%. About Hawaii Medical Honolulu, Hawaii-based Hawaii Medical Center is only for-profit, physician-owned hospital. It is a partnership of CHA Hawaii, an affiliate of Cardiovascular Hospitals of America. It has two specialty units, including Adult and Pediatric and Intensive Care. Wichita, Kansas-based CHA Hawaii LLC, and its affiliates -- including Hawaii Medical Center LLC -- filed for Chapter 11 protection on Aug. 29, 2008 (Bankr. D.Del. Case No. 08-12027). Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP represents the Debtors in their restructuring efforts. The Debtors listed assets of between $1 million and $10 million and liabilities of between $50 million and $100 million when they filed for bankruptcy. HC INNOVATIONS: Potential Conflict Cues James Bigl's Resignation ---------------------------------------------------------------- On Sept. 9, 2008, James Bigl, the chairman of the board of directors of HC Innovations, Inc., resigned. According to the company's press release dated Sept. 10, Mr Bigl's decision was based on potential conflicts of interest. "It has been a pleasure working closely with Jim. He has been a great friend to the company and will remain so, but due to potential conflicts of interest needs to step down from the Board," said Dr. Chess, Chief Executive Officer. "The Board is currently working to identify candidates to replace Mr. Bigl." "HCI is revolutionizing healthcare services for patients and payors alike and I strongly wish the company success in achieving its vision," said Mr. Bigl. About HC Innovations Headquartered in Shelton, Conn., HC Innovations Inc. (OTC BB: HCNV) -- http://www.hcinnovationsinc.com/-- is the holding company for Enhanced Care Initiatives (ECI), which provides complex care management services for medically unstable, complex patients. These services are performed through a program of 24/7 clinical support and intensive interventions based on care plans guided by a proprietary electronic health record (EHR) system. The company targets its offering to HMOs, other risk-bearing managed care organizations, state Medicaid departments, and as an on-site subcontractor for disease management companies. Going Concern Doubt As reported in the Troubled Company Reporter on April 29, 2008, Carlin, Charron & Rosen, LLP, in Glastonbury, Conn., expressed substantial doubt about HC Innovations 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 negative working capital, net losses for the two years then ended, and accumulated deficit. The Troubled Company Reporter reported on Sept. 8, 2008, that HC Innovations Inc.'s consolidated balance sheet at June 30, 2008, showed $7,827,038 in total assets and $12,543,255 in total liabilities, resulting in a $4,716,217 stockholders' deficit. At June 30, 2008, the company's consolidated balance sheet also showed strained liquidity with $4,008,617 in total current assets available to pay $12,126,389 in total current liabilities. The company reported a net loss of $3,533,075 on net revenues of $6,833,433 for the second quarter ended June 30, 2008, compared with a net loss of $1,879,434 on net revenues of $2,752,470 in the corresponding period in 2007. HEARTLAND AUTOMOTIVE: Judge Lynn Lets Another Judge Take Over ------------------------------------------------------------- Bill Rochelle of Bloomberg News reports that Judge D. Michael Lynn of the United States Bankruptcy Court for the Northern District of Texas sent the Chapter 11 cases of Heartland Automotive Holdings, Inc., and its debtor-affiliates to Judge Russell F. Nelms after the Debtors announced they would drop the affiliation with Jiffy Lube and reflag the stores as Castrol Premium Lube Express. Judge Lynn owns stock of BP Plc, the report notes. Judge Lynn said another judge was needed to handle the case because Castrol Premium, which is seeking to help the Debtors out of Chapter 11 is a subsidiary of BP, according to the report. About Heartland Automotive Based in Omaha, Nebraska, Heartland Automotive Holdings Inc. -- http://www.heartlandjiffylube.com/-- and its debtor-affiliates are franchisees of Jiffy Lube International Inc. since 1980. The Debtors operate 438 quick-oil-change stores in 20 states across the Eastern, Midwestern and Western U.S. They employed in excess of 4,000 employees. The company and its nine affiliates filed for Chapter 11 protection on Jan. 7, 2008 (Bank. N.D. Tex. Lead Case No. 08-40057). Jeff P. Prostok, Esq., at Forshey & Prostok, LLP represents the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as claims, noticing and balloting agent. The U.S. Trustee for Region 6 appointed five creditors to serve on an Official Committee of Unsecured Creditors on these cases. The Committee selected Cadwalader Wickersham & Taft LLP as counsel. As of Nov. 29, 2007, the Debtors' financial statements reflected assets totaling about $334 million and liabilities totaling about $396 million. HENDRX CORP: Board Appoints Kurt Dalmata as Director ---------------------------------------------------- Effective Sept. 8, 2008, the board of directors of Hendrx Corp. appointed Kurt Dalmata to the company's board of directors to serve until the next annual meeting of the Company's shareholders. Mr. Dalmata has been engaged as an independent consultant for over ten years, based in Zurich, Switzerland, he specializes in mergers and acquisitions, corporate finance, private equity, and project management. Prior to his current occupation, he was the Executive VP of Finance of the Siber Hegner Group, an international trading house with 1,700 employees. Prior to that he was an Associate Director of what was then UBS (Securities) Ltd., the London-based investment bank of UBS. He has over thirty years of experience working in various capacities in the banking and corporate sectors. Mr. Dalmata obtained a Doctorate in Law from Vienna University in 1974 and an MBA from INSEAD, Fontainebleau, France, in 1976. Mr. Dalmata also serves as (i) an officer (September of 2008 to present) and director (April of 2008 to present) of Newtech Resources, Inc., an OTC:BB quoted company without operations, (ii) an officer (September of 2008 to present) and director (April of 2008 to present) of ASP Ventures Corp., an OTC:BB quoted company without operations, (iii) an officer (September of 2008 to present) and director (April of 2008 to present) of Enwin Resources, Inc., an OTC:BB quoted company without operations, and (iv) an officer and director (September 2008 to present) of High End Ventures, Inc., an OTC: BB quoted company without operations. Mr. Dalmata also acts as the managing director of First Capital Invest Corp., which entity has advanced loans to the Company within the past two years. "The appointment of Mr. Dalmata to the Company's board of directors was not based on any prior understanding or arrangement. The company has not at this time determined if Mr. Dalmata will serve on any standing committee," Chief Executive Officer George Solymar said. About Hendrx Corp. Headquartered in Vancouver, British Columbia, Hendrx Corp. (OTC BB: HDRX.OB) through its wholly owned subsidiary, Eastway Global Investment Limited, manufactures and distribute water dispenser systems. On Dec. 16, 2008, the company acquired 100% of the issued shares of Eastway Global Investment Limited, which included Eastway's wholly-owned operating subsidiary, Fujian Yuxin Electronic Equipment Co., Ltd. Yuxin was incorporated under the laws of People's Republic of China on Feb. 18, 1993. The principal business of Yuxin is to manufacture and distribute water dispenser systems. Going Concern Doubt The company has a working capital deficiency of $2,954,216 at June 30, 2008, and a net loss of $1,194,648 for the six months then ended. "The company might not have sufficient working capital for the next twelve months and is dependent on financing to continue operation. These factors create substantial doubt as to the ability of the company to continue as a going concern," George Solymar, the company's chief executive officer, chief financial officer, and principal accounting officer, remarked in Hendrx's Form 10-Q filed on Aug. 19, 2008. At June 30, 2008, the company's consolidated balance sheet showed $18,389,485 in total assets, $7,392,124 in total liabilities, and $10,997,361 in total stockholders' equity. The company's consolidated balance sheet at June 30, 2008, also showed strained liquidity with $3,212,588 in total current assets available to pay $6,166,804 in total current liabilities. HINES HORTICULTURE: Must Complete Asset Sale, Says BofA -------------------------------------------------------- Bank of America, as agent under a prepetition loan and debtor- in-possession agreement, objects a disclosure statement explaining a joint Chapter 11 plan filed by Hines Horticulture and Hines Nurseries Inc. on Aug. 29, 2008, in the United States Bankruptcy Court for the District of Delaware. A hearing is set for Oct. 9, 2008, at 3:30 p.m., to consider the adequacy of the Debtors' disclosure statement. Objections, if any, are due Oct. 3, 2008. The Court originally set the hearing on Oct. 2, 2008. BofA tells the Court that the Debtors' plan is entirely dependent upon the consummation of an acceptable sale transaction that will pay the lender in full, among other things. The sale process presently remains in its early stages and it is therefore premature to seek approval of the disclosure statement, BofA points out. "Therefore, the plan and disclosure statement process poses a substantial and expensive distraction for the Debtors and its Official Committee of Unsecured Creditors as well the BofA, Steven M. Yoder, Esq., at Potter Anderson & Corroon LLP, says. BofA asserts that the approval of the Debtors' disclosure statement -- and solicitation of votes on a plan -- must be postponed until the sale process is completed. As reported in the Troubled Company Reporter on Sept. 15, 2008, the Debtors asked the Court to approve proposed bidding procedures for the sale of substantially all of their assets free and clear of all liens. The sale is for approximately $70 million. It will involve up to $58 million in cash to pay prepetition secured loans and financing for the restructuring, and about $12 million to pay debt owing to pre- and post-bankruptcy suppliers. The Debtors proposed a $1.5 million break-up fee plus $750,000 in expense reimbursement. On Sept. 18, 2008, BofA said in papers filed with the Court that the Debtors' proposed bidding procedures is defective. The Court originally set Sept. 23, 2008, to consider approval of the Debtors' proposed bidding procedures. About Hines Horticulture Headquartered in Irvine, California, Hines Horticulture, Inc. -- http://www.hineshorticulture.com/-- operates nursery facilities located in Arizona, California, Oregon and Texas. Through its affiliate, the company produces and distributes horticultural products. The company and its affiliate, Hines Nurseries, Inc., filed for Chapter 11 protection on Aug. 20, 2008 (Bankr. D. Del. Case No.08-11922). Anup Sathy, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructure efforts. Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young, Conaway, Stargatt & Taylor, serve as the Debtors' co-counsel. The Debtors selected Epiq Bankruptcy Solutions LLC as their voting and claims agent, and Financial Balloting Group LLC as their securities voting agent. When the Debtors filed for protection against their creditors, they listed assets and debts of between $100 million and $500 million each. HRP MYRTLE: Files New Details on Hard Rock's Operations ------------------------------------------------------- Lisa Fleisher at Myrtle Beach Sun News reports that HRP Myrtle Beach Holdings, LLC's $400 million rock-and-roll theme park, Hard Rock Park, filed in the U.S. Bankruptcy Court for the District of Delaware details on its operations that it had previously kept. According to Myrtle Beach Sun, Hard Rock said that it sold an estimated 11,000 passes per year, about $150 each. Court documents indicate that Hard Rock proposes to extend the life of those passes, saying that "the Park believes that the support and loyalty of these individuals are critical to the Park's planned relaunch for the 2009 operating season." Myrtle Beach Sun relates that Hard Rock said it handed out 7,500 season passes to "people in the hospitality and travel industry, and other influential individuals within the region." 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 Debtor and six of its affiliates filed separate Chapter 11 petitions on Sept. 24, 2008 (Bankr. D. Del. Case Nos. 08-12193 to 08-12199). 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. IDLEAIRE INC: Appoints James Price as Interim CEO ------------------------------------------------- BankruptcyData.Com reports that IdleAire Technologies Corp. filed with the U.S. Bankruptcy Court for the District of Delaware a notice of its appointment of James A. Price as interim C.E.O. Mr. Price will carry out the remaining obligations of the Debtor during the pendency of its Chapter 11 case as well as after the conversion of the case to Chapter 7, according to the report. Mr. Price will receive $5,000 per week, the report says. About IdleAire Technologies Headquartered in Knoxville, Tennessee, IdleAire Technologies Corp. -- http://www.idleaire.com/-- is a privately held corporation founded in June 2000 and has not been profitable since inception. It manufactures and services an advanced travel center electrification system providing heating, ventilation & air conditioning, Internet and other services to truck drivers parked at rest stops. The company delivers its services to long-haul drivers through its patented Advanced Travel Center Electrification(R) system, or ATE system, comprised of an in-cab service module connected to an external heating, ventilation and air conditioning unit, or HVAC unit, mounted on a truss structure above parking spaces. IdleAire has 131 locations in 34 states and employs about 1,200 people. The company filed chapter 11 petition on May 12, 2008 (Bankr. D. Del. Case No. 08-10960). Judge Kevin Gross presides over the case. Elihu Ezekiel Allinson, III, Esq., William A. Hazeltine, Esq., and William David Sullivan, Esq., at Sullivan Hazeltine Allinson, LLC represent the Debtor in its restructuring efforts. John Monaghan, Esq., at Holland & Knight LLP is co-counsel to the Debtor. The Debtor selected Kurtzman Carson Consultants LLC as claim, noticing and balloting agent. The U.S. Trustee for Region 3 appointed three creditors as members of the Official Committee of Unsecured Creditors. Saul Ewing LLP represents the Creditors' Committee. The Troubled Company Reporter disclosed on June 30, 2008 that the Debtor's summary of schedules showed total assets of $152,398,370 and total debts of $373,220,369. ISTAR FINANCIAL: Moody's Cuts Rating to 'Ba1' on Fin'l Market Woes ------------------------------------------------------------------ Moody's Investors Service downgraded the ratings of iStar Financial to Ba1 from Baa3. The ratings are on review for downgrade. The rating action was prompted by the continued turmoil in the capital markets and the expectation that SFI's asset performance will experience further pressure as the commercial real estate market fundamentals weaken. Following its rating action on July 18, 2008, Moody's indicated that a rating downgrade could result if fixed charge coverage deteriorated further, non-performing assets exceeded 8%. Given the market dynamics, Moody's expects iStar's non-performing assets to grow beyond 8% of gross assets. Moody's believes the resolution of the REIT's non-performing assets will be a protracted process, and as a result EBITDA will erode and fixed charge could deteriorate to levels close to its bond covenant threshold. Moody's anticipates the credit environment will continue to tighten over the near-term, posing exit risk on the REIT's near- term asset maturities. Cash flow is expected to deteriorate as a result, but positively, iStar appears to have adequate liquidity to meet its debt obligations and funding commitments through 2009 even in a stressed scenario. The rating review will focus on further examination of iStar's asset performance as the credit and commercial property markets evolve, the prospects for earnings given the economic climate, and potential limitations to operations in a stressed scenario. A rating downgrade would result if non-performing assets exceed the mid-teens and fixed charge coverage falls below 1.7X. Moody's also indicated that a sharp increase in non-performing assets could result in a multi-notch downgrade. Moody's stated that a stable outlook would be predicated upon a stabilization of its asset performance, specifically non-performing assets close to 10% and maintenance of fixed charge coverage above 1.7X. These ratings were downgraded: iStar Financial Inc. -- Senior unsecured debt to Ba1 from Baa3, preferred stock to Ba3 from Ba2; senior debt shelf to (P)Ba1 from (P)Baa3; subordinated debt shelf to (P)Ba2 from (P)Ba1; preferred stock shelf to (P)Ba3 from (P)Ba2. iStar Financial Inc. [NYSE: SFI] is a property finance company that elects REIT status. iStar provides structured mortgage, mezzanine and corporate net lease financing. iStar Financial is headquartered in New York City, and had assets of $15.6 billion and equity of $2.9 billion as of June 30, 2008. JEFFERSON COUNTY: Continues Talks with Lenders After Deadline Ends ------------------------------------------------------------------ William Selway of Bloomberg News reports that Jefferson County, Alabama, may win more time to negotiate a way out of the $3.2 billion bond crisis that has pushed the county near bankruptcy after its current agreement with creditors expired, the county's top official said. Jefferson County Commission President Bettye Fine Collins, according to the report, said Governor Bob Riley called to tell her that negotiations are continuing with the county's creditors, who indicated they would be willing to grant the county another extension after the current standstill agreement expired at 5 p.m. on Sept. 30. "I don't have anything in concrete," Ms. Collins said in an interview from Birmingham, according to the report. "It appears that if we could work out another week without it costing the county anything that would be a reasonable thing to do." Ms. Collins said she is waiting to hear additional word from the governor, according to the report. "The governor's still the one who will let us know when we are at an impasse and he hasn't done that," she said according to the report. Jim Faherty of 960WERC.com reports that a Sept. 30 deadline for Jefferson County to make an $83 million interest payment on a portion of its sewer debt came and went without any money from the county. In the Bloomberg report, Ms. Collins said the county didn't intend to make the payment because it lacks the money. According to a report by the Troubled Company Reporter on Sept. 25, Jefferson County also faces a $20 million deadline to pay its general obligation debt on Sept. 30. No update on the matter is yet available. 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. JOSE ESCOBAR: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Jose Macias Escobar dba Macias Nursery aka Jose Macias 30590 Arbol Real Thousand Palms, CA 92276 Bankruptcy Case No.: 08-23143 Chapter 11 Petition Date: September 29, 2008 Court: Central District Of California (Riverside) Judge: Richard M. Neiter Debtor's Counsel: Daniel C. Sever, Esq. dansever@severlegal.com 41-750 Rancho Las Palmas, Ste. N-2 Rancho Mirage, CA 92270 Tel: (760) 773-0720 Fax: (760) 773-0732 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of 20 largest unsecured creditors. JPMORGAN AUTO: Moody's Rates $6.37MM 5.22% Certificates 'Ba2' ------------------------------------------------------------- Moody's Investors Service has assigned definitive ratings to the securities to be issued by JPMorgan Auto Receivables Trust 2008-A. The complete rating actions are: Issuer: JPMorgan Auto Receivables Trust 2008-A -- $121,000,000 3.41250% A-1 Notes, rated Prime-1 -- $81,000,000 4.82% A-2 Notes, rated Aaa -- $86,000,000 5.22% A-3 Notes, rated Aaa -- $19,700,000 5.22% A-4 Notes, rated Aaa -- $14,570,000 5.22% B Notes, rated Aa1 -- $11,840,000 5.22% C Notes, rated A1 -- $12,740,000 5.22% D Notes, rated Baa2 -- $6,370,000 5.22% Certificates, rated Ba2 Moody's said the ratings are based on the quality of the underlying auto loans and their expected performance; credit enhancement provided by subordination, overcollateralization and available excess spread; the strength of the transaction structure which includes the subordination of servicing fee and a sequential pay trigger that, if breached, would cause the cash flow waterfall to become sequential pay; and the experience of JPMorgan Chase Bank, N.A. as master servicer. The Assumption Volatility Score for this transaction is Low and in accord with the relatively low level of credit uncertainty in the prototypical prime auto transaction. Moody's Assumption Volatility Scores measure a transaction's exposure to factors that contribute to uncertainty in estimating credit risk and could give rise to ratings volatility. V Scores rank transactions on a five point scale by the potential for significant rating changes owing to uncertainty around the assumptions and the related modeling that underlie the ratings. The V Score applies to the entirety of a transaction and is derived from an analysis of the sector's historical performance and data adequacy, the issuer's historical performance and data adequacy, the transaction's complexity and market value sensitivity, and the level of transaction governance. Moody's Loss Sensitivities measure the number of notches that the rating on a structured finance security would likely move downward if the loss expectations assumed for the transaction's underlying collateral pool were presumed to be substantially higher than those actually used to rate the transaction. Loss Sensitivities assume that the deal has not aged. They are not intended to measure how the rating of a security might migrate over time, but rather how the initial rating would change if the loss distribution for the underlying asset pool changed significantly in a negative direction from what was used to rate the transaction. Were Moody's to assume a substantially higher expected loss for this transaction -- equivalent to a one-in-twenty negative scenario or 95th percentile loss on the present distribution - the ratings indicated by its rating model would shift down as: A-2 Notes, 2 notches A-3 Notes, 2 notches A-4 Notes, 2 notches B Notes, 10 notches C Notes, 11 notches D Notes, more than 7 notches (rating would be lower than B3) Certificates, more than 4 notches (rating would be lower than B3) The indicated rating shifts are based upon, among other things, an original expected loss of 3.00% and a 95th percentile loss of 6.25%. KAYDON CORPORATION: Moody's Withdraws Ratings at Company's Request ------------------------------------------------------------------ Moody's Investors Service withdrew all ratings on Kaydon Corporation at the company's request following the redemption of all of its 4% contingent convertible senior subordinated notes due 2023. These ratings were withdrawn: -- Ba2 Corporate Family Rating; -- Ba2 Probability of Default Rating; -- Ba3 (LGD 5, 75%) Convertible Senior Subordinated Notes. Kaydon Corporation is a manufacturer of custom-engineered, performance-critical metal components for a broad range of industrial end markets. The company reported consolidated net sales of approximately $494 million for the twelve months ending June 28, 2008. KING PHARMACEUTICALS: S&P Rates Existing $400MM Conv. Notes 'BB' ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BBB-' rating to King Pharmaceuticals Inc.'s proposed $1 billion senior secured credit facility, with a recovery rating of '1', indicating S&P's expectation for a very high (90%-100%) recovery for secured lenders in the event of a default. In addition, Standard & Poor's assigned its 'BB' rating to the company's existing $400 million convertible senior notes, with a recovery rating of '3', indicating its expectation for a meaningful (50%-70%) recovery in the event of a default. At the same time, Standard & Poor's affirmed its 'BB' corporate credit rating on the company. The outlook remains negative. "The current ratings and outlook on Bristol, Tennessee-based specialty pharmaceutical company King Pharmaceuticals reflect the ongoing competitive challenges facing a number of the company's core products, a lack of visibility with regards to new product pipeline contributions, and the potential need for significant, debt-financed product acquisitions," said Standard & Poor's credit analyst Brian Jones. Still, King has a relatively diverse product portfolio and remains very conservatively financed. King's product portfolio faces several challenges that have affected recent performance and could lead to a further decline if not offset by new products. Patent protection on King Pharmaceuticals' longtime lead product, the hypertension treatment Altace, expired December 2007, and subsequent generic competition sharply reduced sales. Altace sales declined 73% to $44 million in the quarter ended June 30, 2008, from $163 million for the corresponding quarter in 2007. Meanwhile, King's now best-selling product, the muscle relaxant Skelaxin, which generated $107 million of sales in the second quarter, faces patent litigation and is at risk of generic competition in the near to intermediate term. Thrombin-JMI, used to stop bleeding during surgery, is facing increased competition from ZymoGenetics, which launched a competing product in January 2008. Collectively, King's competitively exposed products accounted for 68% of total second- quarter 2008 sales. The challenges faced by King Pharmaceuticals' top three products place increased pressure on the company's near-term product pipeline to deliver significant new products. The company's leading candidate is Remoxy, an abuse-resistant opioid-based pain medication. The Food and Drug Administration designated this drug for priority review following its new drug application filing on June 9, 2008. However, Remoxy faces a potentially competitive field, with several rivals developing similar products. King's other product candidates include Acurox Tablets, immediate-release tablets for moderate-to-severe pain relief for which an NDA is expected to be filed with the FDA by the end of 2008, and CorVue, a cardiac stress imaging agent in late-stage development. However, S&P is uncertain these prospects will adequately replace the expected sales loss from patent expirations. To address this concern, Standard & Poor's Ratings Services believes acquisitions will continue to play a central role in King Pharmaceuticals' business strategy as it tries to restock its portfolio. Consistent with S&P's Bulletin dated Aug. 22, 2008, King's unsolicited $1.6 billion bid for Alpharma Inc. potentially addresses the company's product portfolio needs. In addition, research and development and sales force synergies in the $50 million-$70 million range would improve King's economies of scale in the abuse-deterrent pain management space. Upon close of the proposed financing, King Pharmaceutical's $1 billion senior secured credit facility--including its $150 million revolving credit facility, $350 million term loan A, and $500 million term loan B--will be rated 'BBB-' with a recovery rating of '1', indicating an expectation of very high (90%-100%) recovery in the event of a payment default. In addition, King's $400 million convertible senior unsecured notes due 2026 will be rated 'BB' with a recovery rating of '3', indicating an expectation for meaningful (50%-70%) recovery in the event of a payment default. The current negative outlook reflects the increased pressure felt by King Pharmaceuticals to address its declining product portfolio and uncertainty surrounding the extent to which the company would sacrifice its historically conservative financial policy as it considers large, debt-financed acquisitions. The outlook is likely to be revised to stable upon completion of the proposed financing and acquisition of Alpharma, which remains contingent upon approval by Alpharma's shareholders and regulatory approval. S&P believes this transaction makes even more aggressive transactions less likely and will allow King Pharmaceuticals to maintain sufficient financial cushion and appropriate credit metrics for its aggressive financial profile, including pro forma leverage of less than 4x and funds from operations to total debt of 15%-30%. LA INDIANA: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: La Indiana Tamales, Inc. 15268 Proctor Ave Unit B City Industry, CA 91745 Bankruptcy Case No.: 08-26062 Type of Business: The Debtor makes packaged tamales. See: http://www.laindianatamales.com/ Chapter 11 Petition Date: September 29, 2008 Court: Central District Of California (Los Angeles) Judge: Samuel L. Bufford Debtor's Counsel: Wesley H. Avery, Esq. wavery@rpmlaw.com Roquemore Pringle & Moore 6055 E Washington Blvd, Ste 500 Los Angeles, CA 90040-2466 Tel: (323) 724-3117 Fax: (323) 724-5410 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/califcb08-26062.pdf LANDSOURCE COMMUNITIES: Wants Court's OK to Assume Downrite Deal ---------------------------------------------------------------- LandSource Communities Development Inc. and its debtor-affiliates seek permission from the United States Bankruptcy Court for the District of Delaware to assume an agreement between owner and contractor dated January 15, 2007, between LandSource Holding, as successor-in-interest to Lennar Land Partners, and Downrite Engineering. Lennar Land merged into LandSource Holding on Nov. 28, 2007. By operation of law, as a result of the merger, LandSource Holding assumed all assets and liabilities of Lennar Land Partners. LandSource Holding is in the process of building the Clubhouse on real property owned by Isles at Bayshore Master Association, Inc. The Real Property and the Clubhouse are subject to a 99-year ground lease between Isles at Bayshore HOA and LandSource Holding. Once the Clubhouse is complete, it will offer LandSource Holding different options to generate revenues. LandSource Holding may sell memberships and operate the Clubhouse. Alternatively, LandSource may seek to sell the Clubhouse either by selling it to the Isles at Bayshore HOA or by assuming the Ground Lease and assigning the Ground Lease and selling the Clubhouse to a private investor. The construction of the Clubhouse is almost complete. In order for Icon Constructors, Inc., the general contractor hired to build the Clubhouse, to obtain a certificate of occupancy for the Clubhouse, however, Downrite must call inspections for and "close out" both a water and sewer permit and a paving and drainage, respectively. Aside from completing some minor warranty work and addressing certain minor issues, scheduling the final inspections is all that remains for Downrite to complete the Work required under the Contract. LandSource Holding has paid Downrite all postpetition amounts owed and believes that no additional postpetition amounts will become due under the Contract. Downrite has refused to schedule the final inspections unless it is paid all prepetition amounts it is owed. Mark D. Collins, Esq., at Richards Layton & Finger, P.A., in Wilmington, Delaware, relates that if Downrite is not paid its prepetition claim, it likely will assert a mechanic's lien against the Clubhouse. As of the Petition Date, LandSource Holding owed Downrite $76,995, in addition to $19,892 retention amount that LandSource Holding is entitled to hold back until final completion of the work. In order to ensure the prompt completion of the Clubhouse and avoid the placement of liens, LandSource Holding has agreed to assume the Contract, pay Downrite the Prepetition Claim amount, and upon final completion and acceptance of the Work as provided in the Contract, pay Downrite the Retention Amount. LandSource Holding plans to monetize the value of the Clubhouse project which will enable it to generate revenue from Clubhouse operations. Once in operation, according to Mr. Collins, LandSource Holding projects that the Clubhouse will generate $95,497, $267,367, and $313,847 in annual net income for the 2008, 2009, and 2010 calendar years. By assuming Downrite's Contract and paying the amounts now, LandSource will be able to get Downrite back on the jobsite to schedule the final inspections which will enable Icon to obtain the certificate of occupancy, Mr. Collins tells the Court. He adds that having this in place prior to marketing this asset will result in higher bids from prospective purchasers, which will enable LandSource Holding to maximize the value of this asset. About LandSource Communities LandSource Communities Development LLC, which operates in Arizona, California, Florida, New Jersey, Nevada and Texas, is involved in the planning and development of master planned communities and transforming undeveloped land into ready-to-build home sites and commercial properties. With the exception of one development project in Marina del Rey, California, LandSource does not build homes or commercial properties. LandSource and 20 of its affiliates filed for chapter 11 bankruptcy protection before the U.S. Bankruptcy Court for the District of Delaware on June 8, 2008 (Lead Case No. 08-11111). The Debtors are represented by Marcia Goldstein, Esq., at Weil Gotshal & Manges in New York, and Mark D. Collins, Esq., at Richards Layton & Finger in Wilmington, Delaware. Lazard Freres & Co. acts as the Debtors' financial advisors, and Kurtzmann Carson Consultants serves as the Debtors' notice and claims agent. According to the Troubled Company Reporter on May 22, 2008, LandSource sought help from its lender consortium to restructure $1.24 billion of its debt. LandSource engaged a 100-bank lender group led by Barclays Capital Inc., which syndicates LandSource's debt. LandSource had received a default notice on that debt from the lender group after it was not able to timely meet its payments during mid-April. However, LandSource failed to reach an agreement with its lenders on a plan to modify and restructure its debt, forcing it to seek protection from creditors. The Debtors' exclusive plan filing period expires on Oct. 6, 2008. (LandSource Bankruptcy News, Issue No. 13; http://bankrupt.com/newsstand/or 215/945-7000). LANDSOURCE COMMUNITIES: Newhall Wants to Assume ACI Master Pact --------------------------------------------------------------- The Newhall Land and Farming Company, a California Limited Partnership, seeks authority from the United States Bankruptcy Court for the District of Delaware to assume a master grading agreement with Altfillisch Contractors, Inc. Under the pact, ACI provides Newhall earth moving equipment and equipment operating services, which Newhall has projected it will need to develop property located in the Newhall Ranch area and the Santa Clarita Valley in Los Angeles, California, over the next eight years. In exchange for ACI's commitment of its equipment and manpower, Newhall agreed to negotiate individual subcontracts with ACI for specific development projects, with the intent that Newhall would use ACI's equipment substantially continuously during the term of the Agreement. Newhall currently requires ACI's services to extend the Newhall Ranch Road and continue development of the West Hills Area A infrastructure. Furthermore, ACI must complete its grading on the Newhall Ranch Road for the City of Santa Clarita to begin construction of the Golden Valley Bridge, which will extend Newhall Ranch Road across the Santa Clara River. Mark D. Collins, Esq., at Richards Layton & Finger, P.A., in Wilmington, Delaware, relates that the delay in continuing construction of the Newhall Ranch Road will likely increase the costs incurred by Newhall. He adds significant costs will be incurred when demobilizing and remobilizing work on the Newhall Ranch Road if Newhall is required to retain a new contractor. ACI has agreed that Newhall will pay only 34.2% of ACI's prepetition claim as a condition to assumption of the Agreement. As of the Petition Date, Newhall owed ACI $2,189,864. Newhall has agreed to assume the Agreement on these terms: (a) Newhall will promptly pay ACI $750,000, which is equal to approximately 34% of the Prepetition Claim, to cure any defaults, including its nonpayment of prepetition amounts under the Agreement. (b) The remainder of ACI's Prepetition Claim of $1,439,864 will be treated as an allowed claim. The Remaining Prepetition Claim, however, will be treated as a prepetition unsecured claim and will not be elevated to administrative expense priority status. ACI may still assert other rights affecting its recovery on the Remaining Prepetition Claim, including assertion of any mechanic's lien rights it may have. (c) Newhall will expedite the payment of postpetition invoices so that all pending and future invoices under the Agreement are paid no more than 10 business days after Newhall's receipt of an invoice that complies with the Agreement. Mr. Collins relates that the estimated costs to replace ACI as a contractor exceed the cure amounts on the proposed terms. He adds that the completion of the work undertaken by ACI will increase the overall value of Newhall's properties, in the short term will enable Newhall to complete the Newhall Ranch Road and West Hill Area A projects, and, longer term, will enhance the development of Newhall's other projects. Mr. Collins adds that the parties' business relationship has enabled ACI to maintain state of the art equipment necessary to meet air quality regulations imposed by the South Coast Air Quality Management District, the California Air Resources Board, and the U.S. Environmental Protection Agency. Without the deal, Mr. Collins relates, Newhall would have to pay substantially more for similar services and would have difficulty finding an alternate provider with the equipment necessary to fulfill various regulatory requirements. About LandSource Communities LandSource Communities Development LLC, which operates in Arizona, California, Florida, New Jersey, Nevada and Texas, is involved in the planning and development of master planned communities and transforming undeveloped land into ready-to-build home sites and commercial properties. With the exception of one development project in Marina del Rey, California, LandSource does not build homes or commercial properties. LandSource and 20 of its affiliates filed for chapter 11 bankruptcy protection before the U.S. Bankruptcy Court for the District of Delaware on June 8, 2008 (Lead Case No. 08-11111). The Debtors are represented by Marcia Goldstein, Esq., at Weil Gotshal & Manges in New York, and Mark D. Collins, Esq., at Richards Layton & Finger in Wilmington, Delaware. Lazard Freres & Co. acts as the Debtors' financial advisors, and Kurtzmann Carson Consultants serves as the Debtors' notice and claims agent. According to the Troubled Company Reporter on May 22, 2008, LandSource sought help from its lender consortium to restructure $1.24 billion of its debt. LandSource engaged a 100-bank lender group led by Barclays Capital Inc., which syndicates LandSource's debt. LandSource had received a default notice on that debt from the lender group after it was not able to timely meet its payments during mid-April. However, LandSource failed to reach an agreement with its lenders on a plan to modify and restructure its debt, forcing it to seek protection from creditors. The Debtors' exclusive plan filing period expires on Oct. 6, 2008. (LandSource Bankruptcy News, Issue No. 13; http://bankrupt.com/newsstand/or 215/945-7000). LANDSOURCE COMMUNITIES: Wants Right of First Refusal Pact Rejected ------------------------------------------------------------------ LandSource Communities Development LLC, and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware for authority to reject a right of first refusal agreement, entered into between West Valley, LLC and LandSource as successor-in-interest to MW Housing Partners III, L.P., governing units 1, 3, 4, 5A, 6, 7, and 18 of certain partially developed or undeveloped 983-acre real property in the county of El Dorado, California, known as the Blackstone Property. The Blackstone Property is partially developed and was transferred by West Valley to LandSource's predecessors-in- interest. West Valley, as seller, entered into an Agreement of Purchase and Sale with an affiliate of one of its members, Lennar for the sale of Blackstone Property units 1, 3, 4, 5A, 6, and 7. West Valley also sold Blackstone Property's unit 18 to U.S. Home Corporation, an affiliate of Lennar. Lennar and USHC later assigned their rights under the Purchase Agreements to MWHP. When MWHP was later admitted as a member of LandSource Communities, MWHP transferred to LandSource the Blackstone Property including the Right of First Refusal Agreement. LandSource plans to sell the Blackstone Property to generate money for its estate and, consistent with its fiduciary duty to maximize value, LandSource will seek the highest purchase price possible for the Blackstone Property. The ROFR, however, contains onerous terms that would undermine the value of the Blackstone Property to potential buyers, Cory D. Kandestin, Esq. at Richards, Layton & Finger, P.A., in Wilmington, Delaware, tells the Court. The ROFR requires LandSource to notify West Valley of the terms of any proposed transfer of the Blackstone Property. West Valley then has the option of purchasing the property at the lower of the price at which West Valley originally sold it to LandSource's predecessors and the price offered by a third party buyer. These terms alone justify rejection of the ROFR because they create the possibility that West Valley may purchase the Blackstone Property at a price below market value, Mr. Kandestin asserts. "The ROFR, however, goes further and purports to bind any purchaser of the Blackstone Property and its successors to its terms," Mr. Kandestin adds. By binding successors, Mr. Kandestin relates, the ROFR clouds the title of the Blackstone Property and substantially lowers the potential value that LandSource could realize upon sale. Moreover, the ROFR, according to Mr. Kandestin, chills the bidding process and discourages West Valley from participating in an auction by affording West Valley the advantage of waiting to see what other offers might be received and then determining if it wants to match the highest offer or, if the offer is above the original purchase price of the Blackstone Property, purchase for an even lower price. The Debtors delivered to the Court a copy of an executed version of the ROFR. About LandSource Communities LandSource Communities Development LLC, which operates in Arizona, California, Florida, New Jersey, Nevada and Texas, is involved in the planning and development of master planned communities and transforming undeveloped land into ready-to-build home sites and commercial properties. With the exception of one development project in Marina del Rey, California, LandSource does not build homes or commercial properties. LandSource and 20 of its affiliates filed for chapter 11 bankruptcy protection before the U.S. Bankruptcy Court for the District of Delaware on June 8, 2008 (Lead Case No. 08-11111). The Debtors are represented by Marcia Goldstein, Esq., at Weil Gotshal & Manges in New York, and Mark D. Collins, Esq., at Richards Layton & Finger in Wilmington, Delaware. Lazard Freres & Co. acts as the Debtors' financial advisors, and Kurtzmann Carson Consultants serves as the Debtors' notice and claims agent. According to the Troubled Company Reporter on May 22, 2008, LandSource sought help from its lender consortium to restructure $1.24 billion of its debt. LandSource engaged a 100-bank lender group led by Barclays Capital Inc., which syndicates LandSource's debt. LandSource had received a default notice on that debt from the lender group after it was not able to timely meet its payments during mid-April. However, LandSource failed to reach an agreement with its lenders on a plan to modify and restructure its debt, forcing it to seek protection from creditors. The Debtors' exclusive plan filing period expires on Oct. 6, 2008. (LandSource Bankruptcy News, Issue No. 13; http://bankrupt.com/newsstand/or 215/945-7000). LEHMAN BROTHERS: Faces Class Action for Preferred Series J Stock ---------------------------------------------------------------- Gainey & McKenna filed a class action in the United States District Court for the Southern District of New York, on behalf of all persons who purchased the Preferred Series J stock of Lehman Brothers Holdings Inc. from the date of the company's public offering on Feb. 5, 2008, and all purchasers traceable thereto against certain officers and directors of Lehman and certain Underwriters of the Offering, pursuant to Sections 11 and 15 of the Securities Act of 1933, 15 U.S.C. 77k, 77l and 77o. The Underwriters include Bank of America Securities LLC, Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Inc., Morgan Stanley & Co. Inc., UBS Securities LLC, and Wachovia Capital Markets, LLC. The case name is styled Fogel Capital Management Inc. v. Richard S. Fuld, Jr., et al. The Complaint asserts that Lehman's Prospectus contained both material misstatements and omissions, which Plaintiff and the Class relied upon to their detriment. The representations made in the company's Prospectus were materially false and misleading because at the time of the Offering, Lehman was already suffering from several adverse factors that were not revealed and/or adequately addressed in the document; including the failure to set aside adequate allowances to cover the company's ever increasing portfolio of underperforming sup-prime related products and to adequately write-down commercial and residential mortgage and real estate assets. These factors were already causing a material adverse affect on Lehman's business and directly led to Lehman's Sept. 15, 2008, that it was seeking protection under the Federal Bankruptcy Code in the largest bankruptcy filing in U.S. history. The Complaint alleges that Defendants could have -- and must have -- discovered the material misstatements and omissions in the company's Prospectus prior to its filing with the SEC and distribution to the investing public. Instead, they failed to do so as a result of a negligent and grossly inadequate due diligence investigation. As a result of the dissemination of the false and misleading statements set forth in the complaint, the market price of Lehman Preferred J was artificially inflated during the Class Period. In ignorance of the false and misleading nature of the statements described in the complaint, plaintiff and the other members of the Class relied, to their detriment, on the integrity of the market price of Lehman Preferred J. Had plaintiff and the other members of the Class known the truth, they would not have purchased said securities, or would not have purchased them at the inflated prices that were paid. For more information, interested parties may contact Thomas J. McKenna at Gainey & McKenna, 295 Madison Avenue, 4th Floor New York, New York 10017 by telephone at (212) 983-1300 and/or via e- mail at tjmckenna@gaineyandmckenna.com. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com-- is the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offers a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman 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 by Lehman Brothers Holdings, Inc., does not include any of its subsidiaries. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16 (Case No. 08-13600). The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Luc A. Despins, Esq., and Wilbur F. Foster, Jr., Esq., at MILBANK, TWEED, HADLEY & McCLOY LLP, in New York, and Paul Aronzon, Esq., and Gregory A. Bray, Esq., at MILBANK in Los Angeles, California, represent the official unsecured creditors committee. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. The two units of Lehman Brothers Holdings, Inc., which have filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion ($33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. LINDSAY AND CHANDLER: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Lindsay And Chandler Heights, LLC 7077 E. Marilyn Road, Suite 130 Scottsdale, AZ 85254 Bankruptcy Case No.: 08-13215 Chapter 11 Petition Date: September 29, 2008 Court: District of Arizona (Phoenix) Judge: George B. Nielsen Jr. Debtor's Counsel: D. Lamar Hawkins, Esq. dlh@hs-law.com Hebert Schenk P.C. 4742 North 24th Street, Suite 100 Phoenix, AZ 85016 Tel: (602) 248-8203 Fax: (602) 248-8840 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. LOEHMANN'S CAPITAL: Moody's Cuts Ratings on Weak Liquidity ---------------------------------------------------------- Moody's Investors Service downgraded the long term ratings of Loehmann's Capital Corporation including its probability of default rating to Caa2 and affirmed its speculative grade liquidity rating at SGL-4. The rating outlook remains negative. The downgrades reflects Loehmann's continued very weak operating results and negative free cash flow which has increased its reliance upon financial support from its sponsors and heightened the company's probability of default. These ratings are downgraded: -- Probability of default rating to Caa2 from Caa1; -- Corporate family rating to Caa2 from Caa1; -- $20 million Class A senior secured floating rating notes to Caa2 (LGD3, 49%) from Caa1 (LGD3, 48%); -- $55 million Class A 12% senior secured notes to Caa2 (LGD3, 49%) from Caa1 (LGD3, 48%); -- $35 million Class B senior secured notes to Ca (LGD5, 89%) from Caa3 (LGD5, 89%). This rating is affirmed: -- Speculative grade liquidity rating at SGL-4. The rating reflects Loehmann's very weak liquidity profile and higher-than-average probability of default, which makes it highly reliant on its financial sponsor to meet its obligations. The company is currently generating negative EBIT and negative free cash flow which has been supported by additional capital contribution by its owner -- Istithmar Retail Investments. Istithmar has arranged and supported financing for the company by having one of its banks provide Loehmann's with a $55 million stand by letter of credit which expires in March 2009. Loehmann's can draw down cash under this LC to provide for its cash needs. To date, Loehmann's has drawn $25 million under this LC, with an additional $30 million available. Moody's expects Loehmann's will likely need to make further drawings under the LC to supplement its free cash flow deficit. Despite this additional liquidity infusion, given the letter of credit's near dated expiration, Moody's believes that the company's liquidity cushion will remain very tight over the next four quarters. The negative outlook reflects Moody's expectation that operating performance will remain weak over the next twelve months placing further pressure on the company's liquidity and could further increase the probability of default. In addition, the negative outlook reflects that without an improvement in operating performance, ratings will likely move downward. The SGL-4 represents weak liquidity. The company's available cash, along with operating cash flow, is unlikely to be sufficient to fund the working capital and capital expenditure requirements over the next twelve months. Moody's expects that company will likely need to make additional drawings under the LC and will maintain sustained borrowings under its $35 million revolving credit facility resulting in limited availability. The revolving credit facility expires on October 13, 2010 and is subject to annual renewals thereafter. It can be terminated by either party by giving notice sixty days prior to its anniversary date. Positive ratings consideration was given to the fact the revolving credit facility does not contain any financial covenants. Loehmann's Capital Corporation, headquartered in The Bronx, New York, is an off-price retailer of apparel, accessories, and shoes, and operates 65 stores in major metropolitan markets located in 16 states and the District of Columbia. Revenues for the twelve months ended August 2, 2008 were about $490 million. MAGUIRE PROPERTIES: Completes $100 Mln. Refinancing to Cut Debt --------------------------------------------------------------- Alex Frangos at The Wall Street Journal reports that Maguire Properties Inc. has completed a $100 million refinancing that will reduce its debt. WSJ relates that Maguire Properties secured a new mortgage -- which sources say are from EuroHypo AG and Wells Fargo & Co. -- on its Plaza Las Fuentes property in Pasadena, California, which includes an eight-story office tower and a 350-room Westin hotel. "We are extremely pleased to complete this important transaction, particularly given current market conditions," WSJ quoted Maguire Properties' CEO Nelson Rising as saying. According to WSJ, Maguire Properties also extended for one year a construction loan on a recently completed 20-story office tower at 3161 Michelson in its Park Place complex that is 60% leased. WSJ states that Maguire Properties paid down about $33 million on that $214 million loan, which otherwise would have expired on Sept. 29, 2008. About Maguire Properties, Inc. Maguire Properties, Inc. (NYSE: MPG) -- http://www.maguireproperties.com/-- a Southern California- focused real estate investment trust, owns and operates Class A office properties in the Los Angeles central business district and is primarily focused on owning and operating high-quality office properties in the Southern California market. Maguire Properties, Inc. is a full-service real estate company with substantial in- house expertise and resources in property management, marketing, leasing, acquisitions, development and financing. * * * As reported in the Troubled company Reporter on May 9, 2008, Moody's Investors Service has lowered Maguire Properties Inc.'s ratings: (i) corporate family rating to B1 from Ba2 rating; (ii) senior secured rating to B1 from Ba3; and placed them on review for possible downgrade. As reported in the Troubled Company Reporter on Jan. 8, 2008, Standard & Poor's Ratings Services lowered its corporate credit ratings on Maguire Properties Inc. and Maguire Properties L.P. to 'B+' from 'BB-'. At the same time, S&P raised its bank loan rating on Maguire Properties L.P.'s $130 million revolving credit facility to 'BB' and raised its recovery rating on this facility to '1' from '4'. S&P revised its outlook on the company to negative from stable. MAIN BEACH: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Main Beach Resort, LLC Suite L-4 11285 Elkins Road Roswell, GA 30076 Bankruptcy Case No.: 08-78822 Chapter 11 Petition Date: September 24, 2008 Court: Northern District of Georgia (Atlanta) Judge: Mary Grace Diehl Debtor's Counsel: Rex Cornelison, Esq. The Cornelison Group, LLC Building D, Suite 1 500 Sun Valley Drive Roswell, GA 30076-5636 Tel: (770) 587-0082 Estimated Assets: $500,000 to $1,000,000 Estimated Debts: $1,000,000 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors. MAIN STREET: Moody's Slashes Revenue Bonds Rating to Caa3 from B3 ----------------------------------------------------------------- Moody's has downgraded the rating of Main Street Natural Gas, Inc. Gas Project Revenue Bonds, Series 2008A to Caa3 on watch for downgrade from B3 on watch for downgrade. Under the Agreement for Purchase and Sale of Natural Gas, Lehman Brothers Commodities Services Inc. as gas supplier is obligated to deliver gas on a monthly basis and is obligated to make payments for any undelivered gas. In addition, the gas supplier is responsible for paying the termination payment should the GPA terminate early. The termination payment is sufficient to redeem the bonds. These payment obligations are supported by a guaranty from Lehman Brothers Holdings, Inc. Gas ceased being delivered on September 18, 2008. Following the non-delivery of gas for five days, Main Street terminated the GPA effective September 24, 2008 and the bonds have been called for redemption on September 30, 2008. The Caa3 rating reflects Moody's belief that default in payment is likely with recovery that could be lower than 50%. MCCLATCHY CO: Facility Amendment Cues Moody's to Confirm Ratings ---------------------------------------------------------------- Moody's Investors Service confirmed The McClatchy Company's Ba2 credit facility rating in conjunction with the closing of the September 26, 2008 amendment to the facility, concluding the review for downgrade of the credit facility initiated on Sept. 17, 2008. The rating confirmation reflects the benefits of the credit facility's enhanced priority of claim as a result of the amendment, which provided a grant of security to the credit facility and a reduction in the revolver commitment to $600 million from $625 million. Application of Moody's Loss Given-Default methodology to the updated priority of claim structure results in a Ba2 rating and LGD2-20% assessment (changed from LGD2-22%) on the credit facility. McClatchy's B2 Corporate Family rating, B2 Probability of Default rating, SGL-4 speculative-grade liquidity rating, Caa1 rating and LGD5-80% assessment on the senior unsecured notes and negative rating outlook are not affected. Confirmations: Issuer: McClatchy Company (The) -- Bank Credit Facility, Confirmed at Ba2, LGD2 - 20% (from LGD2 - 22%) Outlook Actions: Issuer: McClatchy Company (The) -- Outlook, Changed To Negative From Rating Under Review The increased covenant cushion generated by the amendment favorably improves McClatchy's ability to manage the difficult revenue environment in its markets. The amendment increased the debt-to-EBITDA covenant to 6.25x through the end of 2008 and to 7.00x from March 2009 through September 2010 and reduced the EBITDA-to-interest covenant to 2.25x through March 2009 and 2.00x thereafter. Moody's estimates the EBITDA cushion improves to in excess of 25% from approximately 5% at present (LTM 6/29/08). Moody's nevertheless continues to maintain an SGL-4 liquidity rating on McClatchy because continued significant revenue pressure and the level of uncertainty that a tight credit environment creates for closing on signed asset sale agreements could diminish the company's ability to meet the revised covenants in the second half of 2009. However, Moody's believes the company has sufficient cash and stressed free cash flow to meet its obligations over the next 12 months including the $50 million remaining notes that mature in April 2009. The new collateral package for the credit facility was structured to avoid tripping the limitation on liens covenant in the 1986 and 1997 senior unsecured note indentures. Such negative pledge precludes McClatchy from granting security on Principal Properties and stock of subsidiaries unless the notes are also collateralized by liens on those assets. Accordingly, the credit facility holders received a first lien security interest in essentially all tangible and intangible assets except Principal Properties and stock of subsidiaries. The security grant improves the credit facility's standing by creating effective priority over unsecured operating subsidiary liabilities whereas previously the credit facility was supported only by unsecured upstream guarantees from operating subsidiaries. The estimated after-tax reduction in free cash flow of approximately $7-12 million due to the increase in spreads is manageable within McClatchy's EBITDA generation. The amendment also tightened other restrictive covenants including a requirement for a 100% mandatory credit facility pay down from asset sales (including the proposed Miami land sale), a prohibition on cash dividends if debt-to-EBITDA exceeds 5.0x, and a 50% excess cash flow sweep if debt-to-EBITDA exceeds 4.0x. These provisions along with additional revolver commitment reductions ($125 million reduction upon the close of the Miami land sale and $25 million on December 31, 2009) and debt incurrence limitations create tighter restrictions on McClatchy's strategic flexibility but provide greater assurance that cash generation will be used to reduce debt Moody's last rating action on McClatchy was to downgrade the CFR and PDR to B2 from Ba3, the credit facility to Ba2 from Ba1 and the senior unsecured notes to Caa1 from B1 on September 17, 2008. The McClatchy Company, headquartered in Sacramento, California, is the third-largest newspaper company in the U.S., with 30 daily newspapers and approximately 50 non-dailies. McClatchy also owns McClatchy Interactive, Real Cities and equity investments in Career Builder, Classified Ventures, and other newspaper and online properties. Annual revenue approximates $2.1 billion. MCCLATCHY CO: S&P Trims Corp. Credit to 'B'; Outlook Negative ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and issue-level ratings on The McClatchy Co. by one notch. The corporate credit rating was lowered to 'B' from 'B+'. The rating outlook is negative. On Sept. 26, McClatchy announced that it entered into an amendment to its $1.175 billion bank credit facility, which widened its leverage covenant to 6.25x until the end of 2008 and to 7.00x starting in 2009 until September 2010. In addition, the interest coverage covenant was lowered to 2.25x until the end of 2008 and to 2.00x thereafter. The amendment also grants a security interest in intangible assets, inventory, receivables, and certain other assets, adds limitations on the payment of cash dividends, and allows the add-back of cash and noncash restructuring charges to EBITDA for purposes of covenant calculations. "We noted in a comment published in July 2008 that McClatchy would likely violate covenants in its bank facility in the second half of 2008, and we also stated at that time that we believed the company's bank group would agree to amend covenants," said Standard & Poor's credit analyst Emile Courtney. "However, the downgrade reflects prospects for more meaningful declines in revenue and EBITDA in McClatchy's newspaper publishing business over the intermediate term than we had previously expected." Earlier this year, S&P believed that revenue could decline in the mid-teens percentage area and that EBITDA could decline by more than the mid-20% area in 2008. It is now clear that EBITDA could decline by closer to 40% this year. In addition, given its expectation for a prolonged downturn in the U.S. economy, S&P believes that revenue could decline by about 10% and EBITDA by more than 10% in 2009. Also, given that the economy will likely not moderate until the second half of next year, McClatchy could experience EBITDA declines well above 10% in the first half. This would probably result in a meaningful thinning of EBITDA cushions relative to the 7x leverage and 2x interest coverage covenants in the second half of 2009. In the seven months ended August 2008, advertising revenue at McClatchy declined 17% and total revenue declined 15%, exemplifying how the slowing U.S. economy has significantly exacerbated declines in print adverting revenue that were caused by a secular shift. EBITDA declined nearly 40% in the six months ended June 2008, and S&P expects that it could decline at nearly the same rate for full-year 2008. This incorporates the company's 2008 restructuring actions to reduce overall expenses by about $200 million on an annualized basis by September 2009. Cost- cutting actions will involve the reduction of 2,550 full-time employees through layoffs and attrition, and reductions in non- newsprint cash expenses. S&P expects newsprint expenses to increase in the second half of 2008 due to newsprint producer price increases, notwithstanding anticipated double-digit percentage area declines in consumption during the year. As a result, S&P expects lease- and pension- adjusted total debt to EBITDA to be in the mid-6x area, and EBITDA coverage of interest could be in the mid-2x area at the end of this year. MCCLATCHY CO: Fitch Says Loan Amendment Adds Flexibility -------------------------------------------------------- Fitch Ratings has published an in-depth analysis of media & entertainment sector liquidity titled 'Liquidity Focus: U.S. Media & Entertainment'. Fitch has stated in previous reports that as Lehman Brothers lending capacity is withdrawn; overlapping exposure of Bank of America/Merrill Lynch and Citigroup/Wachovia are addressed; and as possibly more institutions are merged, the systemic reduction in lending capacity could exacerbate the already tight conditions resulting from the credit crisis. The report released today emphasizes that due to these factors, Fitch's ratings and analysis of corporate liquidity are weighted more heavily toward internal sources of funds: cash holdings and cash generated from operations. Key conclusions include: -- Liquidity for the media & entertainment sector is generally healthy, with latest 12 months (LTM) free cash flow, as of June 30, 2008, of $18.1 billion and balance-sheet cash of $21.0 billion. Assuming LTM free cash flow is a proxy for future free cash flow, internal liquidity exceeds 2008, 2009 and 2010 maturities of $6.2 billion (includes any commercial paper borrowings), $10.2 billion and $12.4 billion, respectively. -- Not surprisingly, the major conglomerates -- including The Walt Disney Company (Disney), News Corporation (News Corp.), Time Warner Inc. (Time Warner) and Viacom Inc. (Viacom) -- are currently the best positioned to weather the current financial market conditions, as these companies benefit from strong and stable operating liquidity, diversity of revenues (non-advertising), meaningful amounts of capacity in the form of cash on hand and revolver availability, as well as longer-dated maturities. -- Within the portfolio, there is no significant Lehman Brothers exposure in bank facility commitments. When present, Lehman's commitments were typically lower than 10% of a company's total bank revolver. While it is possible that other banks assume at least a portion of Lehman's commitments, the failure of such would not result in a material credit event for the portfolio. -- There is also limited overlap between Wachovia/Citibank and Bank of America/Merrill Lynch on most bank facilities in Fitch's portfolio. Importantly, the limited instances of overlap occur on facilities that Fitch expects will have sufficient availability when they come due for re-financing. -- The tightening of the commercial paper market does not cause a material concern for Fitch as the media & entertainment sector is not a major CP issuer. Importantly, the majority of CP balances outstanding in Fitch's portfolio are covered by balance sheet cash at June 30, 2008. In addition, the majority of CP issuers have material availability under their revolving credit facilities with commitments from banks such as Bank of America, JP Morgan, Citibank, Deutsche Bank, Barclays, HSBC, Royal Bank of Scotland, Mizuho and Bank of Tokyo- Mitsubishi. -- Fitch estimates that The McClatchy Company (McClatchy) had very little cushion in its previous 2.75 times (x) interest coverage covenant prior to announcing an amendment to its credit agreement on Sept. 26, 2008. The amendment revised the interest coverage ratio initially down to 2.25x from 2.75x, and leverage to 6.25x from 5x. Both ratios loosen further in 2009, providing additional flexibility at the expense of revolver capacity, pricing and other restrictions (security, dividends, etc.). Tribune Company has a very limited margin of error in relation to its debt covenants. Fitch estimates that (assuming all else equal), less than a 10% drop in EBITDA for Tribune could put them at risk of breaching their guaranteed leverage ratio. -- Although facing both cyclical and secular threats, the media & entertainment industry is characterized by relatively predictable revenue streams and high margins. High free cash flow conversion is supported by limited working-capital swings, low capital expenditure, and (sometimes) low cash taxes. Fitch believes these factors make some media companies relatively attractive borrowers for banks and bondholders, even under more selective market conditions. METALS USA: S&P Affirms Corporate Credit Rating at 'B-' ------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Houston, Texas-based Metals USA Holdings Corp. and on its wholly owned subsidiary, Metals USA Inc., including the 'B-' corporate credit rating. The outlook is stable. All ratings are removed from CreditWatch, where they were placed with positive implications, on May 19, 2008, following the company's announcement of a planned initial public offering, the proceeds of which were to be used to reduce debt balances. "The ratings affirmation and CreditWatch removal reflect our assessment that the company's equity offering seems less likely in the near term because of the challenging economic and capital markets conditions, a trend we expect will continue during this period," said Standard & Poor's credit analyst Maurice Austin. "As a result, credit measures are likely to remain at a level that would be more in-line with the current rating, with adjusted debt to EBITDA of about 5x." In addition, S&P has concerns regarding end-market demand given the recent slowdown in steel demand and increased use of cash to fund higher cost inventories and receivables. The ratings on Metals USA reflect the significant volatility associated with its markets and cash flows, thin margins, and highly leveraged financial profile. The ratings also reflect the company's variable cost structure and its ability to generate cash flow from working capital during periods of soft end markets. Metals USA Holdings, with about $2 billion of revenue for the 12 months ended June 30, 2008, is one of the largest metals processors and distributors in the highly fragmented North American market. In addition, it operates a building products division, although this segment only accounts for about 6% to 12% of its consolidated revenues and has been losing money since 2007. The company's markets are highly competitive and cyclical, which results in the potential for wide swings in overall profitability. However, the company benefits from a variable cost structure, with fixed costs constituting only about 30% of the structure overall. Margins in its processing and distributor business are typically thin, averaging in the mid-to-high single digits. While the company's business model is to secure a margin over its metal costs, it can experience short-term margin pressures from rising raw material costs or because of declining market prices. MICHAEL MEISNER: Faces Fraud Lawsuit by Trading Commission ---------------------------------------------------------- Paul Brinkmann at South Florida Business Journal reports that the U.S. Commodity Futures Trading Commission has filed a lawsuit against Phoenix Diversified Investment Corp. and its owner, Michael A. Meisner, on alleged "commodity pool fraud." The Commission, says the Business Journal, seeks: -- a statutory restraining order, -- preliminary and permanent injunctive relief, -- the return of funds to defrauded participants, -- the repayment of ill-gotten gains, and -- civil monetary penalties. According to the Business Journal, the Commission accused Phoenix Diversified and Mr. Meisner of defrauding more than 100 investors out of up to $30 million. The Business Journal states that Mr. Meisner's daughter, Brooke, was wed at Donald Trump's Mar-a-Lago Club, amid concerns that Phoenix Diversified investment funds may have been used to pay for the event. Mr. Meisner, according to the report, said in an April letter attached to two civil complaints that he would stop using investor money on his personal lifestyle. Court documents say that Mr. Meisner allegedly took unsecured loans from individuals and promised up to 3% returns per month. The Business Journal relates that the Commission claimed that Mr. Meisner and Phoenix Diversified fraudulently solicited at least 26 investors for at least $8 million, claiming that his company owned a valuable software program that spotted trading patterns in the futures markets and guaranteeing high profits. Mr. Meisner misappropriated those funds and the accounts associated with the commodity pool suffered $5.8 million in net losses between May 2003 and March 2008, the report states, citing the Commission. The Commission, according to the Business Journal, alleged that Mr. Meisner made several material misrepresentations and failed to disclose material facts -- like past profitability of the pool and the actual value of the pool -- to induce prospective and current participants to invest or remain invested in the pool. The Commission claimed that Phoenix Diversified provided account statements, dated March 31, indicating that participants had a cumulative balance of more than $4 million in the pool, the Business Journal states. Phoenix Diversified, says the report, refused to honor pool participants' requests to withdraw funds and several checks were returned for insufficient funds. Phoenix Diversified didn't register with the Commission as a commodity pool operator, as required by federal commodities law, the Business Journal relates, citing the Commission. Mr. Meisner's wife, Victoria, is named in the complaint as a relief defendant for receiving at least $1 million of funds "to which she was not entitled," the Business Journal reports. About Phoenix Diversified Investment Phoenix Diversified Investment Group is a commodities investment firm based in Boca Raton, Florida owned by Michael Meisner. Lewis Freeman, of Lewis B. Freeman & Partners in Miami, is a court- appointed receiver in the case against Phoenix Diversified. The company faced an involuntary chapter 7 petition filed by a group of investors after learning that the company is insolvent. About 200 investors asserted claims of more than $140 million against the Debtor. About Michael Meisner Michael A. Meisner in Boca Raton, Florida filed a chapter 11 petition on May 19, 2008 (Bankr. S.D. Fla. Case No. 08-16502). Judge Paul G. Hyman, Jr., presides over the case. Sherri B. Simpson, Esq., at Law Offices of Sherri B. Simpson, P.A., represents the Debtor in his restructuring efforts. He listed assets of $1 million to $10 million and debts of $1 million to $10 million when he filed for bankruptcy. MORTGAGE LTD: Faces Investigation by Ariz. Corporate Commission --------------------------------------------------------------- The Arizona Republic reports that the Arizona Corporation Commission is investigating Mortgages Ltd. and has held an executive session during a public hearing on Wednesday afternoon. The Arizona Republic relaets that the Commission's securities division regulates the arm of Mortgages' business that raised money from investors. According to The Arizona Republic, The Arizona Department of Financial Institutions, which regulates banking institutions throughout the state, and the U.S. Securities and Exchange Commission are also conducting a probe on Mortgages. Corporation commissioners didn't comment about the nature of the executive session nor are there any details disclosed on the session, The Arizona Republic states. About Mortgages Ltd. Phoenix, Arizona-based Mortgages Ltd. -- http://www.mtgltd.com/ -- originates, invests in, sells and services its own short-term real-estate secured loans on properties within the state of Arizona in the US. It underwrites loans for commercial, industrial and residential properties for acquisition, entitlement, development, construction and investment. Mortgages Ltd. was the subject of an involuntary chapter 7 petition dated June 20, 2008, filed by KGM Builders Inc. -- a contractor for Grace Communities, a borrower of the company -- in the U.S. Bankruptcy Court for the District of Arizona. Central & Monroe LLC and Osborn III Partners LLC, divisions of Grace Communities, sought the appointment of an interim trustee for Mortgages Ltd. in the chapter 7 proceeding. Mortgages Ltd. is also facing lawsuits filed by Grace Communities and Rightpath Limited Development Group for its alleged failure to fully fund loans. Mortgages Ltd. denied the charges. It has filed a motion to dismiss the Rightpath suit. The Debtor's case was converted to a chapter 11 proceeding on June 24, 2008 (Bankr. D. Ariz. Case No. 08-07465). Judge Sarah Sharer Curley presides over the case. Carolyn Johnsen, Esq., and Bradley Stevens, Esq., at Jennings, Strouss & Salmon P.L.C., replaced Todd A. Burgess, Esq., at Greenberg Traurig LLP, as counsel to the Debtor. As of Dec. 31, 2007, the Debtor had total assets of $358,416,681 and total debts of $350,169,423. MRM DEVELOPMENT: Case Summary & Two Largest Unsecured Creditors --------------------------------------------------------------- Debtor: MRM Development, Inc. 101-B North Center Street Goldsboro, NC 27530 Bankruptcy Case No.: 08-06592-8 Type of Business: Real Estate Development Chapter 11 Petition Date: September 25, 2008 Court: Eastern District of North Carolina (Wilson) Debtor's Counsel: David J. Haidt, Esq. davidhaidt@embarqmail.com Ayers, Haidt & Trabucco, P.A. P.O. Box 1544 New Bern, NC 28563 Tel: (252) 638-2955 Fax: (252) 638-3293 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's Two Largest Unsecured Creditors: Entity Claim Amount ------ ------------ NC Mutual Whole Drug Co. $480,000 Attn: Managing Agent Collateral FMV 816 Ellis Road $385,000 Durham NC 27703-6019 NC Mutual Whole Drug Co. $475,000 Attn: Managing Agent Collateral FMV 816 Ellis Road $350,000 Durham NC 27703-6019 MRS FIELDS: U.S. Government, TYCB Franchisee Oppose Plan -------------------------------------------------------- BankruptcyData.Com reports that the United States Government, on behalf of the Internal Revenue Service, filed with the U.S. Bankruptcy Court for the District of Delaware an objection to the Joint Prepackaged Plan of Reorganization of Mrs. Field's Orginal Cookies, Inc., and its debtor-affiliates. The objection was filed on the grounds that several articles within the Plan failed to preserve the setoff and recoupment rights of the IRS, according to the report. The TCYB Franchisee Association also filed an objection to the Plan on the grounds that it fails to provide non-Debtor parties with adequate notice of the Debtors' intent to reject executory contracts with such parties and, further, the Plan effectively denies such parties due process of law, according to the report. As reported by the Troubled Company Reporter on August 29, 2008, Hon. Peter J. Walsh will convene a hearing on Oct. 2, 2008, at 3:00 p.m., to consider approval of the adequacy of the disclosure statement filed by the Debtors on Aug. 15, 2008, followed by a confirmation hearing of their prepackaged Chapter 11 plan of reorganization on the same date. The hearing will take place at 824 Market Street, 6th floor in Wilmington, Delaware. The Plan will pay allowed unsecured claims in full, and effectuate, without limitation, these restructuring transactions: 1. the conversion of Old Notes into a combination of cash, New Notes and 87.5% of the equity of MFOC outstanding at the effective date of the Plan; and 2. the conversion of the MFOC note into a combination of cash, 12.5% of the equity of MFOC outstanding at the effective date of the Plan and a warrant to purchase additional equity of Reorganized MFOC. Each holder of an allowed secured notes claim will be entitled to vote on the Plan. On the Effective Date, in turn for their allowed secured notes claims against each of the Debtors, holders will receive, on a pro rata basis: -- the noteholder cash; -- the new notes; and -- 87.5% of the equity of the new common equity issued and outstanding as of the effective date. Secured noteholders are expected to recovery 86.5%. The holders of an allowed MFOC note claim will be entitled to vote on the Plan. On the Effective Date, in exchange for their allowed MFOC Note Claim, Capricorn, will receive: -- 12.5% of the new common equity issued and outstanding as of the Effective Date; -- the warrant; -- a payment in the amount of $1.049 million. The holder of the allowed MFOC equity interest will be entitled to vote on the Plan. Holders will not receive any recovery under the Plan. David R. Hurst, Esq., at MONTGOMERY, MCCRACKEN, WALKER & RHOADS, LLP, in Wilmington, Delaware, says the Debtors' Liquidation Analysis estimates that holders of Class 3 Secured Notes Claims would receive a recovery of between 46.1% and 51.5% of the value of their claims in a liquidation under Chapter 7 of the Bankruptcy Code. Holders of claims and interests in all other impaired classes, including those in Class 5 MFOC Note Claim, would receive no distribution in a chapter 7 liquidation. Under the Debtors' Plan, (i) holders of Class 3 Secured Notes Claims will receive an approximately 86.5% return on account of such claims; and (ii) the holder of the MFOC Note Claim will receive an approximately 96.4% return on account of such claim, Mr. Hurst says. Since the filing of the Original Plan on August 24, 2008, the Plan Proponents have made certain non-material modifications to the Plan. The Plan is the result of months of prepetition negotiations among the Debtors, their secured Noteholders, represented by an ad hoc committee of certain unaffiliated investors holding in excess of 78% in face amount of the Debtors' old notes, and certain other parties-in-interest. The Debtors have retained Financial Balloting Group LLC to aid them in tabulating the voting. A full-text copy of the disclosure statement for the company's prepackaged Chapter 11 plan of reorganization is available for free at http://ResearchArchives.com/t/s?3120 About Mrs. Fields' Headquartered in Salt Lake City, Utah, Mrs. Fields' Original Cookies, Inc. -- http://www.mrsfields.com/-- operates a chain of cookie and baked goods. The company and 13 of its affiliates filed for Chapter 11 protection on Aug. 24, 2008 (Bankr. D. Del. Lead Case No.08-11953). David R. Hurst, Esq., at Montgomery McCracken Walker & Rhoads LLP, represents the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Services LLC as their claims agent. An official committee of unsecured creditors has not been appointed by the United States Trustee, which cited insufficient response to its communication/contact for service on the committee. When the Debtors filed for protection from their creditors, they list assets between $500,000 and $1 million, and debts between $100 million and $500 million. MRS FIELDS: Seeks to Pay $1 Mln. to Settle Lehman Contract Row -------------------------------------------------------------- Mrs. Fields' Original Cookies, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to approve a settlement with Lehman Commercial Paper, Inc., in connection with the confirmation of the Debtors' prepackaged plan of reorganization. In April 2008, MFOC and Great American Cookie Company, Inc.-- nka GACCF, LLC -- entered into a settlement agreement with Lehman Commercial Paper, Inc., to resolve a lawsuit between the parties relating to Lehman's allegations that MFOC had breached the terms of certain leases of nonresidential real property. Under the terms of the Settlement Agreement, MFOC was required to pay Lehman $1.125 million on or prior to May 7, 2008, plus certain additional fees and costs if such payment was not timely made. MFOC had not made the settlement payment to Lehman by the time it filed for bankruptcy. Lehman estimated that its claim had increased to approximately $1.225 million. Further, because the Settlement Agreement was terminable by Lehman upon MFOC' s failure to make timely payment, Lehman asserts the right to terminate the Settlement Agreement and pursue the full amount of the claim asserted in the Lehman Suit -- which Lehman estimates would increase its claim by $300,000 to $500,000. The Settlement Agreement provides that if any action is necessary to enforce the Settlement Agreement, the prevailing party will be entitled to attorneys' fees -- which Lehman estimates could increase its claim by as much as $200,000. The Debtors note that Lehman's claim purportedly may exceed $1.8 million. While Lehman's claim currently falls within Class 4 General Unsecured Claims under the Debtors' prepackaged joint plan of reorganization -- and thereby is entitled to payment in full in cash on the Effective Date -- the proponents to the Plan believe that Lehman's claim may be susceptible to separate classification and less favorable treatment under the Plan. Nonetheless, the Plan Proponents recognize that any attempt to reclassify a creditor at this stage of these cases would entail significant risks, including a possible delay in the confirmation of the Debtors' Plan. The Plan Proponents determined that a settlement of any and all claims held or asserted by Lehman would be in the best interests of the Debtors, their estates and their creditors. After a series of in-person and telephone meetings between counsel for the Debtors and counsel for Lehman, Lehman agreed to settle any and all claims held or asserted by Lehman against the Debtors, in exchange for a payment of $1 million in cash, to be paid on or as soon as practicable after the Effective Date of the Debtors' Plan. The Debtors believe that the Lehman Settlement is justified. The Lehman Settlement reflects a material discount on Lehman's claim, and settlement of the claim now avoids potentially expensive and time-consuming litigation. It will allow confirmation of the Debtors' Plan to go forward unopposed by Lehman, thereby eliminating risks of delay that would disadvantage the Debtors, their creditors, and their customers. About Mrs. Fields' Headquartered in Salt Lake City, Utah, Mrs. Fields' Original Cookies, Inc. -- http://www.mrsfields.com/-- operates a chain of cookie and baked goods. The company and 13 of its affiliates filed for Chapter 11 protection on Aug. 24, 2008 (Bankr. D. Del. Lead Case No.08-11953). David R. Hurst, Esq., at Montgomery McCracken Walker & Rhoads LLP, represents the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Services LLC as their claims agent. An official committee of unsecured creditors has not been appointed by the United States Trustee, which cited insufficient response to its communication/contact for service on the committee. When the Debtors filed for protection from their creditors, they list assets between $500,000 and $1 million, and debts between $100 million and $500 million. NON-INVASIVE MONITORING: Signs $300,000 Revolving Credit Pact ------------------------------------------------------------- Adam S. Jackson, chief financial officer of Non-Invasive Monitoring Systems, Inc., disclosed in a regulatory filing dated Sept. 12, 2008, that his company entered into a Note and Security Agreement dated as of August 28, 2008 with four persons. The Lenders granted the company a revolving credit line totaling $300,000. "We may borrow and reborrow from time to time under the Revolver until October 31, 2008. The interest rate payable by us on amounts outstanding under the Revolver is 11% per annum, and increases to 16% after the Maturity Date or after an Event of Default. All amounts owing under the Revolver must be repaid by the Maturity Date, and amounts outstanding are prepayable at any time. All amounts drawn under the Revolver are secured by all of our personal property," Mr. Jackson said. "The Agreement prohibits us, while a commitment to make a loan exists, from among other things, with certain exceptions, paying cash dividends, redeeming stock, incurring liens upon intellectual property, incurring new indebtedness (other than certain permitted indebtedness, including $250,000 relating to purchase or lease of equipment or personal property, and an additional $100,000), prepaying indebtedness, repaying notes to officers, directors or shareholders, amending the terms of indebtedness to accelerate the payment thereof, or creating or permitting any liens on any of our property (except certain permitted liens). "Events of Defaults under the Agreement include, among others, a breach by us of certain covenants contained therein (including those described in the previous paragraph), which breach remains uncured for ten days after notice from Lenders, defaults under other indebtedness giving other lenders the right to accelerate payment of at least $150,000 of aggregate indebtedness (whether or not exercised), judgments against us remaining unsatisfied for at least ten days aggregating to at least $150,000, attachments of a material amount of our assets (not removed within 10 days), and customary defaults relating to bankruptcy, liquidation and appointments of receivers. "Upon the occurrence of an Event of Default, we can no longer borrow under the Revolver and at the option of the Lenders, we must repay all outstanding indebtedness thereunder and any accrued interest thereon. "The Lenders include our Chairman and Chief Executive Officer, Marvin Sackner, MD (committing to lend $25,000), and Frost Gamma Investments Trust (committing to lend $200,000), each a beneficial owner of in excess of 19% of our common stock, as well as two other lenders. "On August 29, 2008, we drew down $300,000 under the Revolver." A full-text copy of the Note and Security Agreement is available for free at http://researcharchives.com/t/s?3300 About Non-Invasive Monitoring Based in Miami, Florida, Non-Invasive Monitoring Systems Inc. (OTC BB: NIMU) -- http://www.nims-inc.com/-- is engaged in the development of innovative medical products utilizing new and unique technologies to address a wide variety of medical conditions. The company specializes in products that use a natural approach to assist subjects without the use of drugs or any invasive procedures. The company's flagship product is the Acceleration Therapeutics AT-101. Going Concern Doubt Eisner LLP, in New York, expressed substantial doubt about Non- Invasive Monitoring Systems Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended July 31, 2007. The auditing firm pointed to the company's recurring losses from operations and accumulated deficit. The Troubled Company Reporter reported on June 19, 2008, that Non- Invasive Monitoring Systems Inc. reported a net loss of $488,000 on total revenues of $39,000 for the third quarter ended April 30, 2008, compared with a net loss of $383,000 on total revenues of $77,000 in the same period last year. ORLEANS HOMEBUILDERS: Amends, Restates $440MM Credit Agreement -------------------------------------------------------------- Orleans Homebuilders, Inc. said that on September 30, 2008, the company and its lenders entered into the Second Amended and Restated Revolving Credit Loan Agreement which provides an amendment and modification to the existing revolving credit agreement through December 2009. Jeffrey P. Orleans, Chairman of the Board and Chief Executive Officer stated, "We appreciate the continued support of our lending group in these challenging times. We believe that the recent extension and modification of our credit facility through December 2009 by our supportive bank group demonstrates confidence in our management's abilities, and the agreement provides us the necessary liquidity and covenant flexibility to operate our plan in today's challenging environment." The Company reduced the amended credit facility by 25% from $585 million to $440 million, subject to availability determinations and other limitations described below. Covenant modifications were made to the credit facility, including modifications to minimum consolidated tangible net worth, cash flow from operations and minimum liquidity. The amendment eliminated several covenants, including the maximum leverage ratio, the minimum debt service ratio, the maximum ratio of speculative units to historical closings, modified several definitions, and improved the borrowing base calculations. The amended credit facility contains additional covenants for maximum cash held on a consolidated basis as well as limitations on certain land acquisitions and joint ventures. The amended credit facility does not limit the acquisition of improved land (i.e., finished lot take-downs and/or controlled rolling lot options) purchased in the normal course of business and consistent with Company projections provided to lenders. The interest rate under the amended facility was changed to LIBOR plus 5.0%, an increase of 100 basis points. As part of the planned summer amendment process, certain property appraisals were completed by the lenders. Additional appraisals are expected to be completed over the next three fiscal quarters ending June 30, 2009 pursuant to the amended credit facility. The amended credit facility also includes certain other terms, modifications, definitional adjustments, charges, unused fees and potentially additional fees, which are provided for in the formal documentation. More specifically, the modifications include: -- The amendment includes an extension of maturity date by five banks with approximately 21% of aggregate commitments, or $121 million of aggregate commitments prior to the facility size reduction described herein and previously maturing on December 20, 2008, by one year to December 20, 2009 consistent with the other lenders in the facility. -- The $585 million credit facility was reduced in size by approximately 25% to $440 million on a pro rata basis for all the lenders, except that the amount of the revolving credit facility availability will be $425 million from the closing date through December 31, 2008; and $415 million from July 1, 2009 through December 20, 2009, unless otherwise reduced. The amount available under the facility also remains subject to borrowing base availability requirements. -- The amended credit facility also eliminated certain financial covenants from the facility, including both of the previous leverage covenants, the debt service covenant, and the units in inventory covenant. The facility also decreased the minimum liquidity covenant, reduced the cash flow coverage ratio and significantly reduced the minimum consolidated tangible net worth covenant. The facility also modified mechanisms for borrowings and settlement of home closings. The summary of certain provisions of the amended credit agreement in this disclosure is subject to the terms of the amended credit agreement, which the Company intends to file promptly with the Securities and Exchange Commission. As part of this anticipated amendment and extension process in the summer of 2008, the bank lenders engaged appraisers on behalf of the lenders for communities comprising approximately 35% of the borrowing base availability as of May 31, 2008. These appraisals were received by the Company in June, July and August 2008. The appraised communities included projects in every major division of the Company, including the North (communities in Pennsylvania, New Jersey and New York); the South (communities in Charlotte and Raleigh, NC and Richmond, VA); one community in the Chicago, IL area; and one community in Orlando, FL. In addition, the broad group of communities appraised included active and future communities, communities impaired by the Company, as well as communities never impaired by the Company. The results of the appraisals included both individual reductions in appraised values as well as some increases in appraised values of projects. While these project appraisals are not scheduled to be utilized in borrowing base availability determinations until the borrowing base certificate dated as of September 30, 2008, the Company estimates that the net borrowing base availability on a lower of GAAP cost or appraised value basis for each individual project category and as adjusted for increases and decreases in these project appraisals would have resulted in an estimated net increase in borrowing base availability of approximately $1.5 million as of June 30, 2008 and an estimated net increase of approximately $2.7 million as of August 31, 2008, respectively. Under this amended and restated credit agreement, the Company has permitted lenders to conduct future appraisals on a fair market value basis on all projects with a GAAP cost of at least $4.0 million to be phased in generally over the next three fiscal quarters ending June 30, 2009, but excluding the projects already recently appraised. The results of these appraisals are subject to numerous factors, and accordingly no assurance can be given on the results of both the recent or future bank appraisals and the corresponding liquidity impact to the Company. Garry P. Herdler, Executive Vice President and Chief Financial Officer stated, "The amended $440 million revolving credit facility significantly modifies bank covenants for improved flexibility, it also eliminates several covenants, and it improves our borrowing base availability through December 2009. We appreciate the one-year maturity extension from five individual banks that would have otherwise matured in December 2008, which enabled us to reduce the previous $585 million facility size by 25% on a pro rata basis for all lenders. We believe that the amended facility is a positive for our lenders, while it also provides Orleans with the flexibility necessary in today's challenging market." Orleans Homebuilders, Inc. -- http://www.orleanshomes.com-- develops, builds and markets high-quality single-family homes, townhouses and condominiums. The Company serves a broad customer base including luxury, move-up, empty nester, active adult and first-time homebuyers. The Company currently operates in the following eleven distinct markets: Southeastern Pennsylvania; Central and Southern New Jersey; Orange County, New York; Charlotte, Raleigh and Greensboro, North Carolina; Richmond and Tidewater, Virginia; Chicago, Illinois; and Orlando, Florida. The Company's Charlotte, North Carolina operations also include adjacent counties in South Carolina. OSKAR HUBER: U.S. Trustee to Hold Meeting to Form Panel on Oct. 2 ----------------------------------------------------------------- The United States Trustee for Region 3, will hold an organizational meeting in the joint administered Chapter 11 cases of Oskar Huber Fine Furniture Incorporated on October 2, 2008, at 11:00 a.m. at U.S. Trustee's Hearing Room, Bridge View, 800-840 Cooper Street, Suite 102 in Camden, New Jersey. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. 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. The company 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. PENN TRAFFIC: Faces SEC Action for Accounting Fraud --------------------------------------------------- The Securities and Exchange Commission yesterday charged East Coast supermarket operator and wholesale food distributor The Penn Traffic Company with fraud for orchestrating multi-million dollar accounting schemes that inflated its operating income and overstated its after tax net income. The SEC's complaint, filed in the U.S. District Court for the Northern District of New York, alleges that Syracuse, N.Y.-based Penn Traffic carried out the accounting fraud over multiple reporting periods, and failed to file certain required financial reports with the SEC or filed reports that did not fully comply with SEC regulations. Penn Traffic agreed to settle the SEC's charges without admitting or denying the allegations. "Penn Traffic's fraudulent conduct lasted several years and distorted the company's financial reports," said David Rosenfeld, Associate Director of the SEC's New York Regional Office. "The Commission continues to focus on accounting improprieties and will take action when a company engages in fraudulent conduct that falsifies the company's true financial condition." According to the SEC's complaint, Penn Traffic intentionally inflated its operating income and other financial results by prematurely recognizing promotional allowances in a scheme that lasted from approximately the second quarter of Penn Traffic's fiscal year 2001 through at least the fourth quarter of its FY 2003. Promotional allowances -- also referred to as rebates, slotting fees, or vendor allowances -- are fees paid from vendors in exchange for various marketing and promotional activities, such as inclusion in a supermarket's weekly circular. As a result of Penn Traffic's willful misconduct, the company prematurely recorded a total of approximately $10 million in operating income and reported these false results in financial reports filed with the Commission. The SEC's complaint also alleges a separate scheme from at least the first quarter of Penn Traffic's FY 2000 through the first quarter of its FY 2003. Penn Traffic recorded fraudulent entries to the books and records of Penny Curtiss, its wholly-owned bakery manufacturing subsidiary that has since closed. For example, Penny Curtiss fabricated accounting records to overstate inventory and reduce cost of goods sold. As a result, Penn Traffic overstated after tax net income by more than $7 million and reported these false results in financial reports filed with the Commission. The SEC's complaint further alleges that Penn Traffic failed to file financial reports or filed non-compliant reports with the Commission between the fourth quarter of its FY 2003 and the fourth quarter of its FY 2008. Penn Traffic has consented to the entry of a permanent injunction against future violations of Section 17(a) of the Securities Act of 1933, Sections 10(b), 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934, and Rules 10b-5, 12b-20, 13a- 1, and 13a-13 thereunder, and to certain undertakings that require it to employ an independent examiner, among other things. The settlement is subject to the court's approval. The SEC previously charged two former senior Penn Traffic executives and one Penny Curtiss executive for their roles in the fraudulent schemes alleged in the complaint. The Commission's case is pending against Leslie H. Knox, Penn Traffic's former Senior Vice President and Chief Marketing Officer, and Linda J. Jones, Penn Traffic's former Vice President of Non-Perishable Merchandising. In 2005, the Commission obtained a consent judgment against Michael J. Lawler, the former Director of Manufacturing at Penny Curtiss, permanently enjoining him from violating the antifraud and books and records of the securities laws. The Commission acknowledges the assistance of the U.S. Attorney's Office for the Northern District of New York and the Federal Bureau of Investigation in this matter. The Penn Traffic Company filed for chapter 11 protection on May 30, 2003 (Bankr. S.D.N.Y. Case No. 03-22945). Kelley Ann Cornish, Esq., at Paul Weiss Rifkind Wharton & Garrison, represented the Debtors in their restructuring efforts. When the grocer filed for protection from their creditors, they listed $736,532,614 in total assets and $736,532,610 in total debts. The Court confirmed the Debtor's First Amended Plan of Reorganization on March 17, 2005. The Plan became effective April 13, 2005, allowing it to formally emerge from Chapter 11. PENN TREATY: S&P Holds 'B-' Credit Rating; Outlook Stays Negative ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' financial strength and counterparty credit ratings on Penn Treaty Network America Insurance Co. The outlook remains negative. On Aug. 22, 2008, S&P revised its outlook on PTNA to negative from stable because of concerns regarding the company's business profile and statutory capitalization. This followed the announcement by PTNA's parent company, Penn Treaty American Corp., of a dispute with its reinsurer, Imagine International Reinsurance Ltd., regarding reinsurance of PTNA's business issued prior to 2002. The dispute with the reinsurer likely will go to arbitration as required in the contract. "In advance of an outcome, PTA's management is taking steps to mitigate the risk of a possible adverse decision by selling a subsidiary and obtaining capital that it could use to support recapture, if necessary," said Standard & Poor's credit analyst Neal Freedman. "Clearly, an adverse arbitration decision would create its own issues, but PTA is using some of its financial flexibility to account for this risk." PHOENIX DIVERSIFIED: Futures Commission Sues Firm for Fraud ----------------------------------------------------------- Paul Brinkmann at South Florida Business Journal reports that the U.S. Commodity Futures Trading Commission has filed a lawsuit against Phoenix Diversified Investment Corp. and its owner, Michael A. Meisner, on alleged "commodity pool fraud." The Commission, says the Business Journal, seeks: -- a statutory restraining order, -- preliminary and permanent injunctive relief, -- the return of funds to defrauded participants, -- the repayment of ill-gotten gains, and -- civil monetary penalties. According to the Business Journal, the Commission accused Phoenix Diversified and Mr. Meisner of defrauding more than 100 investors out of up to $30 million. The Business Journal states that Mr. Meisner's daughter, Brooke, was wed at Donald Trump's Mar-a-Lago Club, amid concerns that Phoenix Diversified investment funds may have been used to pay for the events. Mr. Meisner, according to the report, said in an April letter attached to two civil complaints that he would stop using investor money on his personal lifestyle. Court documents say that Mr. Meisner allegedly took unsecured loans from individuals and promised up to 3% returns per month. The Business Journal relates that the Commission claimed that Mr. Meisner and Phoenix Diversified fraudulently solicited at least 26 investors for at least $8 million, claiming that his company owned a valuable software program that spotted trading patterns in the futures markets and guaranteeing high profits. Mr. Meisner misappropriated those funds and the accounts associated with the commodity pool suffered $5.8 million in net losses between May 2003 and March 2008, the report states, citing the Commission. The Commission, according to the Business Journal, alleged that Mr. Meisner made several material misrepresentations and failed to disclose material facts -- like past profitability of the pool and the actual value of the pool -- to induce prospective and current participants to invest or remain invested in the pool. The Commission claimed that Phoenix Diversified provided account statements, dated March 31, indicating that participants had a cumulative balance of more than $4 million in the pool, the Business Journal states. Phoenix Diversified, says the report, refused to honor pool participants' requests to withdraw funds and several checks were returned for insufficient funds. Phoenix Diversified didn't register with the Commission as a commodity pool operator, as required by federal commodities law, the Business Journal relates, citing the Commission. Mr. Meisner's wife, Victoria, is named in the complaint as a relief defendant for receiving at least $1 million of funds "to which she was not entitled," the Business Journal reports. About Michael Meisner Michael A. Meisner in Boca Raton, Florida filed a chapter 11 petition on May 19, 2008 (Bankr. S.D. Fla. Case No. 08-16502). Judge Paul G. Hyman, Jr., presides over the case. Sherri B. Simpson, Esq., at Law Offices of Sherri B. Simpson, P.A., represents the Debtor in his restructuring efforts. He listed assets of $1 million to $10 million and debts of $1 million to $10 million when he filed for bankruptcy. About Phoenix Diversified Investment Phoenix Diversified Investment Group is a commodities investment firm based in Boca Raton, Florida owned by Michael Meisner. Lewis Freeman, of Lewis B. Freeman & Partners in Miami, is a court- appointed receiver in the case against Phoenix Diversified. The company faced an involuntary chapter 7 petition filed by a group of investors after learning that the company is insolvent. About 200 investors asserted claims of more than $140 million against the Debtor. PIERRE FOODS: Oaktree to Become New Majority Owner Under Plan ------------------------------------------------------------- Pierre Foods, Inc. filed a consensual Joint Plan of Reorganization and Disclosure Statement on September 29, 2008, with the United States Bankruptcy Court for the District of Delaware. The Plan is supported by funds managed by Oaktree Capital Management L.P., the Company's single largest creditor, and Pierre's Official Committee of Unsecured Creditors. Oaktree supplied the Company's $35 million debtor-in-possession credit facility, and upon confirmation of the Plan, funds managed by Oaktree will become the majority owner of Pierre. Pierre will ask the Bankruptcy Court to confirm the Plan in early December 2008, and hopes to emerge from bankruptcy shortly thereafter. The Court will convene a hearing on October 29, 2008, at 10:00 a.m. to consider approval of the Disclosure Statement and procedures for the solicitation and tabulation of plan votes. Objections, if any, to the Disclosure Statement are due October 24. The Debtors have proposed a December 5 deadline to vote on the plan. "The filing of this consensual Plan represents a significant step forward in our efforts to emerge from Chapter 11 as a stronger Company that can operate profitably in this difficult economic environment and beyond," said Norbert Woodhams, Chief Executive Officer of Pierre Foods. "We are very pleased to have Oaktree as our new financial sponsor and believe that Oaktree's continuing commitment to Pierre demonstrates its deep belief in the fundamental strengths and the inherent value of our Company." Mr. Woodhams added, "Thanks to the loyalty of Pierre's dedicated employees, customers and vendors, we have made great progress in our efforts to restructure the company and are poised to conclude our restructuring more quickly than originally projected. We have realigned our capital structure by eliminating over $225 million of debt and our business continues to perform in line with our expectations. We look forward to concluding this process and emerging from Chapter 11 as expeditiously as possible." The Plan provides for: -- conversion of $100 million of existing prepetition secured indebtedness to 100% of the equity of Reorganized Pierre; -- conversion of $50 million of existing prepetition secured indebtedness to a new mezzanine facility; -- the amendment and restatement of the remaining prepetition secured indebtedness of approximately $97 million on terms much more favorable to the company; -- a new exit facility to fund the Company's ongoing operations and pay obligations under the Plan; -- the Debtors' Senior Subordinated Notes in the principal amount of $125 million will be cancelled; and -- 12% cash recovery for unsecured creditors (including holders of Senior Subordinated Notes) to be paid in installments within 120 days after the Effective Date. The Plan provides for these projected recoveries: Class Claim/Equity Interest Recovery Under Plan ----- --------------------- ------------------- N/A Administrative Claims Paid in full, in cash N/A DIP Credit Agreement Paid in full, in cash claims N/A Priority Tax claims Paid in full, in cash; cash in an amount agreed to by the parties; or at Debtors' option, paid in installments for a 5-year period 1 Other Priority Claims 100%; paid in full, in cash 2 Other Secured Claims 100%; paid in full, in cash 3 Prepetition Credit 73% to 92% Agreement claims Allowed amount: $242,213,076 4 General Unsecured Claims 12% Allowed amount: $131,222,135 5 Equity Interests 0% in Pierre Holding Corp. 6 Intercompany N/A Interests Classes 3 and 4 are impaired and are entitled to vote on the Plan. A full-text copy of the Debtors' chapter 11 plan is available at no charge at: http://bankrupt.com/misc/PIERREchapter11plan.pdf A full-text copy of the Debtors' disclosure statement is available at no charge at: http://bankrupt.com/misc/PIERREdisclosurestatement.pdf About Pierre Foods Based in Cincinnati, Ohio, Pierre Foods, Inc. -- http://www.pierrefoods.com-- manufactures and sells ready-to-cook and pre-cook products. The company and and 13 of its affiliates filed for Chapter 11 protection on July 15, 2008 (Bankr. D. Del. Lead Case No. 08-11469). Jonathan S. Henes, Esq., and Lisa G. Laukitis, Esq., at Kirkland & Ellis; and Daniel J. DeFranceschi, Esq., and Paul N. Heath, Esq., at Richards, Layton & Finger P.A., represent the Debtors in their restructuring efforts. The Debtors selected Kurtzman Carson Consultants LLC as their claims agent. The United States Trustee for Region 3 appointed creditors to serve on an Official Committee of Unsecured Creditors. The Committee selected Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and James R. Savin, Esq., at Akin Gump's Washington, D.C. office, as counsel. Oaktree Capital Management, the Debtors' DIP lender and which is serving as plan sponser, is represented by Van C. Durrer, II, Esq., at Skadden Arps, Slate Meagher & Flom LLP, in Los Angeles, California. Wachovia Bank, N.A., the administrative agent under the Debtors' June 2004 credit agreement, is represented by Gregory Bray, Wsq., and Haig Mark Maghakian, Esq., at Milbank Tweed Hadley McCloy LLP. PLASTECH ENGINEERED: Taps Hilco to Liquidate Remaining Assets ------------------------------------------------------------- Plastech Engineered Products Inc. and its debtor-affiliates have begun winding down their operations and affairs following the sale of their interiors, exteriors, and stamping and carpet businesses. Certain miscellaneous assets that were not sold pursuant to the sales have been retained, which assets are no longer beneficial to the Debtors' estates. Prior to closing of the sales, the Debtors and their advisors solicited offers from various liquidators, competitors, and other parties for assets located at, among other locations, Andover, Ohio; Cleveland, Ohio; Elwood, Indiana; Winnsboro, South Carolina and Kenton, Tennessee. After receiving competing bids that were submitted as arm's- length, good-faith proposals, the Debtors determined that the bid submitted by Hilco Industrial, LLC, is currently the highest or otherwise best offer for the Miscellaneous Assets. The Debtors did not say whether they'll further market-test the Miscellaneous Assets and have not scheduled an auction for those assets. Their asset purchase agreement with Hilco, however, provides that: -- should the Debtors decide to consummate the sale transaction with another party, they will reimburse Hilco up to $350,000 for due-diligence expenses; and -- any competing bid for the Miscellaneous Assets should exceed Hilco's offer by $400,000. By this motion, Debtors ask the United States Bankruptcy Court for the Eastern District of Michigan to: (a) authorize the Sale of the Miscellaneous Assets, pursuant to Sections 105, 363 and 365 of the Bankruptcy Code, to Hilco pursuant to the terms of their Asset Purchase Agreement; (b) authorize them to reimburse Hilco up to $350,000 for reasonable out-of-pocket costs incurred for due diligence costs, and other costs related to marketing of the Assets and the auction preparation, in the event another successful bidder is awarded the Miscellaneous Assets Sale and the Debtors consummate the offer with that successful bidder. The Debtors maintain that the proposed Sale is in their best interests. Asset Purchase Agreement The Debtors relate that the Asset Purchase Agreement is still being negotiated and thus subject to change. Nevertheless, the salient terms of the Agreement are: Sellers: Debtors Buyers: Hilco Industrial, LLC Purchased Assets: All machinery and equipment located at the facilities in, among others, Andover and Cleveland, Ohio; Elwood, Indiana; Winnsboro, South Carolina and Kenton, Tennessee, a list of which is available for free at: http://ResearchArchives.com/t/s?32c4 The Purchased Assets constitute collateral securing the First Lien Credit and Guaranty Agreement. Purchase Price: The Sellers propose to sell the Purchased Assets for (i) a non-shared purchase price of $780,000, plus (ii) 50% of the excess of the gross sales, including any premium charged by Hilco, over $1,310,000, the shared portion of the purchase price. Payment Terms: Purchaser will directly pay Goldman Sachs Credit Partners L.P., as collateral agent under the First Lien Term Loan Agreement, for the account of Seller $433,000 of the Non-Shared Purchase Price on or before the third calendar day after the date of entry of the Order; provided however that a portion of the Initial Non-Shared Purchase Price equal to the Cost Estimate will be remitted to, and disbursed by, the Seller. Purchaser will pay the remaining Non-Shared Purchase Price to Goldman Sachs for the account of Seller no later than two days before the first Disposition of the Assets provided, that: * all liens securing the Assets have been released, either pursuant to an order of the Court or through the execution and delivery of U.C.C.-3 termination statement; * no uncured or unwaived breach of the the Asset Purchase Agreement has occurred and is then continuing; * an occupancy agreement for the Location in Strongsville, Ohio, in form and substance reasonably satisfactory to Purchaser, has been executed in all material respects; and * all of the Licenses for the Locations, in form and substance reasonably satisfactory to Purchaser have been granted and are in full force and effect in all material respects. If Buyer proceeds to dispose of any of the assets notwithstanding failure to satisfy these conditions, Buyer will pay both the remaining Non-shared Purchase Rrice and the entire Shared Purchase Price to Goldman Sachs without any set- off, recoupment, or deduction for any alleged actual failure to satisfy any of the conditions. Buyer agrees that no disposition or removal of any of the purchased assets may occur prior to Buyer's payment of the initial Non-shared Purchase Price. Buyer's Disposition of Purchased Assets: After Buyer's payment of the Non-Shared Purchase Price, Buyer may, in its absolute discretion and cost, conduct a private and/or public sale, including by way of a Global WebCast Auction Sale of the Assets at the locations at which the Assets are located. Seller grants Purchaser an exclusive and non-transferable license to use and occupy the Location through and including the earlier of (a) in the case of Kenton, Andover, Cleveland, and Winnsboro, November 30, 2008, and (b) the date on which the Assets are removed from the particular Location, or the termination date, without the obligation, through the Termination Date, to pay any rent or other charges for the rent being deducted from the Purchase Price. Estimated Occupancy Costs: The estimated costs and expenses relating to the Locations, other than the Strongsville Occupancy Costs is approximately $275,000. Proceeds from the Initial Non-Shared Purchase Price in the amount of the cost estimate will be paid and held in a segregated account by the Seller at the time of payment of the Initial Non-Shared Purchase Price. From the date of the Agreement through and including the Termination Date, the Seller will be responsible for all costs and expenses relating to the Locations or Purchaser's use and occupancy of the Locations, including rent, utilities, taxes, insurance, security and other costs and expenses, except for Strongsville Occupancy Costs. Seller may use proceeds from the Cost Estimate Account solely to pay utility and insurance costs with respect to the Locations, other than the Strongsville Occupancy Costs. On or before the 10th business day after the Termination Date, the Seller will perform a reconciliation of all payments made from the Cost Estimate Account and pay over any balance remaining in the Cost Estimate Account to Goldman Sachs. All costs and expenses relating to the Strongsville Facility or Purchaser's use and occupancy of the Location in Strongsville, including rent, utilities, taxes, insurance, security and other costs and expenses will be paid by the Purchaser pursuant to the Strongville Occupancy Agreement. Manner of Payment: Buyer will make all purchase price payments by wire transfer directly to Goldman Sachs for Seller's account. Title to the Assets will transfer from Seller to Purchaser upon Purchaser's payment of the Initial Non-Shared Purchase Price, evidenced by Seller's delivery of a bill of sale in favor of Purchaser, without warranty or representation of any kind or nature, except as to title, free and clear of liens, claims and encumbrances. Bid Protocol: In consideration of Hilco conducting its due diligence and entering into the Asset Purchase Agreement, which serves as a base by which other offers may be measured, in the event the Agreement is subject to higher and better offers by way of a bidding process: * all bidders must agree to be bound by the terms and conditions of the Asset Purchase Agreement with appropriate modifications for the identity of the successful bidder and the increased price; * all bidders must provide adequate assurance of their ability to perform their obligations under this Agreement; * the initial bid must be for an increase in the Purchase Price of no less than $400,000, with successive bids increasing no less than $25,000 over the previous bid; * competing bids will not be conditioned on the outcome of unperformed due diligence by the bidder; and * Purchaser may credit bid the Expense Reimbursement in connection with further bidding. Purchaser Expense Reimbursement: In the event that the Court approves a higher or otherwise better offer for the Assets, and the Seller consummates the offer, the Seller will pay to Purchaser up to $350,000 of the reasonable, out of pocket, documented costs incurred by Purchaser prior to the date of entry of the order in connection with the Purchaser's due diligence, entry into this Agreement, marketing of the Assets and the preparation for, and holding of, the Auction. A full-text copy of the Asset Purchase Agreement is available for free at http://ResearchArchives.com/t/s?32c3 Sarah E. Pierce, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, relates that the First Lien Lenders and the Second Lien Lenders have consented to a sale free and clear of their liens against the Miscellaneous Assets, pursuant to Section 363(f) of the Bankruptcy Code. Ms. Pierce says the $350,000 expense reimbursement to Hilco will enable the Debtors to secure an adequate floor so that any competing bids be materially higher or otherwise better than the Asset Purchase Agreements, a clear benefit to the Debtors' estates. Moreover, Hilco has expended significant costs and expenses in evaluating the Miscellaneous Assets in setting a value for the sale of the Miscellaneous Assets, and negotiating the Asset Purchase Agreement. Ms. Pierce further asserts that the amount of the Expense Reimbursement, and the overbid amount, is reasonable and appropriate in light of the size and nature of the transaction and the efforts expended and will be expended by the Purchaser. The Debtors sought and obtained an expedited hearing on October 8, 2008, for the Court to consider their request for approval of the APA. Ms. Pierce emphasizes that absent emergency consideration of the APA, the Debtors will unlikely able to consummate the sale of their Miscellaneous Assets as contemplated in the Agreement, to the detriment of their creditors and other parties-in-interest. The deadline to file objections to the sale is October 1. About Plastech Engineered Based in Dearborn, Michigan, Plastech Engineered Products, Inc. -- http://www.plastecheng.com/-- is a full-service automotive supplier of interior, exterior and underhood components. It designs and manufactures blow-molded and injection-molded plastic products primarily for the automotive industry. Plastech's products include automotive interior trim, underhood components, bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company, and Toyota, as well as Johnson Controls, Inc. Plastech is a privately held company and is the largest family- owned company in the state of Michigan. The company is certified as a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in the midwestern and southern United States. The company's products are sold through an in-house sales force. The company and eight of its affiliates filed for Chapter 11 protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C., represent the Debtors in their restructuring efforts. The Debtors chose Jones Day as their special corporate and litigation counsel. Lazard Freres & Co. LLC serves as the Debtors' investment bankers, while Conway, MacKenzie & Dunleavy provide financial advisory services. The Debtors also employed Donlin, Recano & Company as their claims and noticing agent. Joel D. Applebaum, Esq., at Clark Hill PLC, represents the Official Committee of Unsecured Creditors. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. (Plastech Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PROBE MANUFACTURING: Names Barrett Evans as Interim CEO ------------------------------------------------------- On Sept. 4, 2008, the board of directors of Probe Manufacturing, Inc., decided not to renew the month-month employment agreement of Reza Zarif, its Chief Executive Officer effective Sept. 7. As a result, Mr. Zarif has left the company to pursue other opportunities. Mr. Zarif will remain on the board of directors of the company. On Sept. 8, 2008, the company entered into an Executive Consulting Agreement with Barrett Evans to act as the company's interim Chief Executive Officer. Mr. Evans will receive a Base Salary at an annual rate of $175,000, payable on the 1st and 15th of the month. All compensation payable to Mr. Evans will be paid on an independent contractor basis. Based in Lake Forest, Calif., Probe Manufacturing Inc. (OTCBB: PMFI) -- http://www.probemi.com/-- provides electronics manufacturing services to original equipment manufacturers of industrial, automotive, semiconductor, medical, communication, military, and high technology products. The company was founded in 1993. It was formerly known as Probe Manufacturing Industries, Inc., and changed its name to Probe Manufacturing Inc., in 2005. Going Concern Doubt Denver-based Jaspers + Hall, PC, raised substantial doubt about the ability of Probe Manufacturing, Inc., to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditor pointed to the company's accumulated deficit from operations and its difficulties in maintaining sufficient working capital. The Troubled Company Reporter reported on June 24, 2008, that Probe Manufacturing Inc.'s balance sheet at March 31, 2008, showed $2,368,194 in total assets and $2,512,198 in total liabilities, resulting in a $144,004 total stockholders' deficit. The company reported net income of $108,065 on sales of $2,185,444 for the first quarter ended March 31, 2008, compared with net income of $38,951 on sales of $1,877,090 in the same period in 2007. PRODUCTION RESOURCE: S&P Cuts Secured Debt Rating to 'B' from 'B+' ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit and secured debt issue-level ratings on Production Resource Group LLC to 'B' from 'B+'. The rating outlook is stable. "The ratings downgrade is based on the company's weak operating performance, increased leverage, and reduced headroom under financial covenants," said Standard & Poor's credit analyst Tulip Lim. "PRG's financial covenants will tighten over the near-to- intermediate term and, if EBITDA continues to decline, the company's margin of compliance with covenants will narrow." The 'B' rating reflects the company's aggressive financial policy, fragmented and competitive end markets, high capital expenditure requirements for growth, and narrowing margin of compliance with financial covenants. PRG's dominant market share in theatrical productions and good customer retention record minimally offset these factors. New Windsor, New York-based PRG is a provider of lighting, audio, video, scenic equipment, and related services for live events and theatrical productions, with locations around the world. PRG has a very high market share of Broadway theatrical productions because of its large inventory of lighting, audio, and scenic equipment, as well as its good track record. Many Broadway shows have been using PRG's services for several years. Because the costs of switching lighting and audio service providers often include dismantling a set, customers usually do not change service providers during a production run, which can last five to 10 years. Credit market turmoil may stem transaction activity in the near term, but longer term, PRG will likely be very acquisitive. The company plans to use its existing business to become a consolidator. Although most of its peers are relatively small, a large debt-financed acquisition has the potential to increase debt leverage. On July 2, 2008, the company acquired Hi-Tech Rentals Inc., an audio, video, lighting, and scenic equipment and service company for $16 million. The acquisition was not funded through debt, but rather entirely through equity contributions. For the first six months of 2008, the company's revenue declined 6% and EBITDA declined roughly 21%. Weak operating performance was due to lower volumes and concert tour durations, fewer musicals compared with plays, shrinking event sizes, and pricing pressure. The EBITDA margin was 16.4% for the 12 months ended June 30, 2008. PRG is highly leveraged. Pro forma for the July 2008 acquisition, lease-adjusted total debt to EBITDA was 5.5x for the 12 months ended June 30, 2008, and lease-adjusted EBITDA coverage of interest was 2.0x. The company had discretionary cash flow deficits for the period, but does sell some of its equipment each year. QUEBECOR WORLD: Voluntary Chapter 15 Case Summary ------------------------------------------------- Debtor: Quebecor World, Inc. 612 St. Jacques Street Montreal, Quebec H3C 4M8 Canada Bankruptcy Case No.: 08-13814 Type of Business: The Debtor is a printing company Chapter 15 Petition Date: September 30, 2008 Court: Southern District of New York (Manhattan) Judge: James M. Peck Debtor's Counsel: Kenneth P. Coleman, Esq. kurt.vellek@allenovery.com Allen & Overy LLP 1221 Avenue of Americas New York, NY 10022 Tel: (212) 610-6300 Fax: (212) 610-6399 Estimated Assets: unstated Estimated Debts: unstated QUEBECOR WORLD: Gets Conversion Notices for S. 5 Preferred Shares ----------------------------------------------------------------- Quebecor World Inc. received notices in respect of 66,601 of its remaining 1,763,029 issued and outstanding Series 5 Cumulative Redeemable First Preferred Shares (CA:IQW) requesting conversion into the company's Subordinate Voting Shares (CA:IQW). In accordance with the provisions governing the Series 5 Preferred Shares, registered holders of such shares are entitled to convert all or any number of their Series 5 Preferred Shares into a number of Subordinate Voting Shares effective as of Dec. 1, 2008, provided such holders gave notice of their intention to convert at least 65 days prior to the Conversion Date. The Series 5 Preferred Shares are convertible into that number of the company's Subordinate Voting Shares determined by dividing C$25 together with all accrued and unpaid dividends on such shares up to Nov. 30, 2008, by the greater of (i) C$2 and (ii) 95% of the weighted average trading price of the Series 5 Preferred Shares on the Toronto Stock Exchange during the period of twenty trading days ending on Nov. 27, 2008. The next conversion date on which registered holders of the Series 5 Preferred Shares will be entitled to convert all or any number of such shares into Subordinate Voting Shares is March 1, 2009, and notices of conversion in respect thereof must be deposited with the Company's transfer agent, Computershare Investor Services Inc., on or before Dec. 29, 2008. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW), -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina and the British Virgin Islands. Quebecor World and 53 of its subsidiaries, including those in Canada, filed a petition under the Companies' Creditors Arrangement Act before the Superior Court of Quebec, Commercial Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. As of June 30, 2008, Quebecor World's unaudited consolidated balance sheet showed total assets of $3,412,100,000, total liabilities of $4,326,500,000, preferred shares of $62,000,000, and total shareholders' deficit of $976,400,000. QUEST MINERALS: June 30 Balance Sheet Upside-Down by $3,699,929 --------------------------------------------------------------- Quest Minerals & Mining Corp.'s consolidated balance sheet at June 30, 2008, showed $5,387,658 in total assets and $9,087,587 in total liabilities, resulting in a $3,699,929 stockholders' deficit. At June 30, 2008, the company's consolidated financial statements also showed strained liquidity with $19,207 in total current assets available to pay $7,689,314 in total current liabilities. The company reported a net loss of $5,129,895 on coal revenues of $59,087 for the second quarter ended June 30, 2008, compared with a net loss of $1,477,660 on coal revenues of $55,877 in the same period of 2007. The company incurred an operating loss of $3,880,168 for the three months ended June 30, 2008, compared to an operating loss of $1,746,591 for the three months ended June 30, 2007. The increased in operating losses was primarily due to significantly increased beneficial conversion expenses. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2008, are available for free at http://researcharchives.com/t/s?32fd Going Concern Doubt For the three months ended June 30, 2008, the company had a net operating loss of $3,880,168. The working capital deficit as of June 30, 2008, was $7,670,107. The company will require substantial additional funds to finance its business activities on an ongoing basis and will have a continuing long-term need to obtain additional financing. Quest believes these conditions raise substantial doubt about its ability to continue as a going concern. About Quest Minerals Headquartered in Paterson, N.J., Quest Minerals & Mining Corp. (OTC BB: QMNM) -- http://www.questmining.net/-- acquires and operates energy and mineral related properties in the southeastern part of the United States. Quest is a holding company for Quest Minerals & Mining, Ltd., a Nevada corporation, or Quest (Nevada), which in turn is a holding company for Quest Energy, Ltd., a Kentucky corporation, or Quest Energy, and of Gwenco, Inc., a Kentucky corporation, or Gwenco. Quest Energy is the parent corporation of E-Z Mining Co., Inc, a Kentucky corporation, or E-Z Mining, and of Quest Marine Terminal, Ltd., a Kentucky corporation, or Quest Marine. Gwenco leases over 700 acres of coal mines, with approximately 12,999,000 tons of coal in place in six seams. In 2004, Gwenco had reopened Gwenco's two former drift mines at Pond Creek and Lower Cedar Grove, and had begun production at the Pond Creek seam. This seam of high quality compliance coal is located at Slater's Branch, South Williamson, Kentucky. On Feb. 28, 2007, Gwenco, Inc. filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Ky. Case No. 07-10081). Gwenco has submitted a preliminary plan of reorganization to the court and the creditors for approval. RELIANT ENERGY: Moody's Reviews 'Ba3' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service placed the Ba3 Corporate Family Rating for Reliant Energy and its subsidiaries, Orion Power Holdings and Reliant Energy Mid-Atlantic Power Holdings, on review for possible downgrade. The last rating action for Reliant was on April 28, 2008, when Moody's upgraded the CFR to Ba3 from B1. The review for possible downgrade is prompted by Reliant's Securities and Exchange Commission Form 8-K filing (made on September 29, 2008), which discloses the magnitude of the business disruption to Reliant's retail electric provider business activities and the updated expected near-term outlook for the wholesale generation business activities. According to the company, the previous expectations for an improved financial performance in 2008, increased operating cash flows and a transition to generating positive free cash flow appears unlikely over the near-term. More importantly, Reliant announced a material change to its overall approach to hedging its retail supply obligations by announcing a termination of a special credit enhanced retail structure with Merrill Lynch which has been in place since 2006. In Moody's opinion, the retail credit sleeve with Merrill Lynch was considered a material credit positive, primarily because it utilized Merrill Lynch's balance sheet to provide hedging support to the retail supply obligations. Finally, Reliant announced its intention to raise approximately $1.0 billion in capital, $650 million through a new secured term loan structure and $350 million in convertible preferred stock. The review for possible downgrade will focus on the revised corporate strategy at Reliant, its intention to adjust its approach to hedging its retail supplies, the procedures for an orderly exit from the Merrill Lynch credit sleeve arrangement and the overall impact to the expected financial profile of the company. Reliant Energy is a large wholesale merchant generator with approximately 16 GWs of generating capacity diversified across several market regions in the U.S. In addition, Reliant is a large retail electric provider in Texas, serving almost 2 million customers, primarily in the greater Houston, Texas region. Reliant reported $12.4 billion in revenues for the twelve months ended June 2008 and is headquartered in Houston, Texas. On Review for Possible Downgrade: Issuer: Orion Power Holdings, Inc. -- Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Downgrade, currently Ba3 Issuer: Pennsylvania Economic Dev. Fin. Auth. -- Senior Secured Revenue Bonds, Placed on Review for Possible Downgrade, currently Ba3 Issuer: Reliant Energy Inc. -- Issuer Rating, Placed on Review for Possible Downgrade, currently Ba3 -- Probability of Default Rating, Placed on Review for Possible Downgrade, currently Ba3 -- Corporate Family Rating, Placed on Review for Possible Downgrade, currently Ba3 -- Multiple Seniority Shelf, Placed on Review for Possible Downgrade, currently (P)B2 -- Senior Secured Regular Bond/Debenture, Placed on Review for Possible Downgrade, currently B1 -- Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Downgrade, currently B1 Issuer: Reliant Energy Mid-Atlantic Power Hldgs., LLC -- Senior Secured Pass-Through, Placed on Review for Possible Downgrade, currently Ba1 Outlook Actions: Issuer: Orion Power Holdings, Inc. -- Outlook, Changed To Rating Under Review From Stable Issuer: Reliant Energy Inc. -- Outlook, Changed To Rating Under Review From Stable Issuer: Reliant Energy Mid-Atlantic Power Hldgs., LLC -- Outlook, Changed To Rating Under Review From Stable RENAISSANCE HOSPITAL: Court Approves Amended Disclosure Statement ----------------------------------------------------------------- The Hon. Barbara J. Houser of the United States Bankruptcy Court for the Northern District of Texas approved a second amended disclosure statement dated Sept. 23, 2008, explaining an amended Chapter 11 plan filed by Renaissance Hospital Terrell Inc. and Renaissance Hospital-Grand Prairie Inc. She held that the Debtors' amended disclosure statement contains adequate information within the meaning of Section 1129 of the U.S. Bankruptcy Code. A confirmation hearing is set for Oct. 14, 2008, at 10:30 a.m., at 501 W. Tenth Street, Eldon B. Mahon U.S. Courthouse in Forth, Texas. Objections, if any, are due Oct. 10, 2008. Judge Houser also approved the procedures the Debtors proposed for the solicitation and tabulation of plan votes. Deadline for voting for the plan is Oct. 7, 2008, at 4:00 p.m. Overview of the Plan The plan provides a meaningful distribution to holders of General Unsecured Claims, contemplates the reorganization or liquidation of the Debtor and the resolution of certain Claims through a series of mechanisms described more fully in the Plan and this Disclosure Statement. The Debtors stated that the plan depends upon the successful sale of either (i) the New Equity Interests or (ii) the Acquired Assets. This will be accomplished through the sale of the acquired assets, the Debtor continued. Higher and better offers will be solicited through an auction and sale process. The Debtor said that the Sale is anticipated to result in the transfer of either new equity interests or the acquired assets for not less than approximately $1,200,000 in cash and other consideration. Distributions to be made pursuant to the Plan will be funded from new proceeds generated by the Sale, in addition to the assignment or liquidation of any remaining assets and the pursuit of any causes of action belonging to the Debtors. The amended plan classifies interests in and claims against the Debtors in seven classes. The classification of interest and claims are: Treatment of Interest and Claims Treatment Class of Claims Treatment Estimated Amount ----- --------- --------- ---------------- 1 Priority impaired $147,065 Non-Tax Claims 2 Lenders Funding impaired $1,200,000-$1,450,000 Secured Claim 3 Secured Claims of Ad unimpaired $80,000-$110,000 Varolem Taxing Authorities 4 Misc. Secured Claims impaired $0 5 General Unsecured impaired $9,450,000-$9,700,000 Claims 6 Medical Malpractice impaired $0 7 Interests impaired All impaired classes are entitled to vote to accept or reject the Debtors' plan. Holders of Class 1 priority non-tax claims will receive a cash distribution up to 100% of the amount of the allowed priority non- tax claim on the plan's effective date. Holders of Class 2 secured claims of lenders funding will receive: i) assignment of the Debtors' Pre-MSA accounts receivables; ii) cash equal to the amount of the Net Sales Proceeds allocable to acquired assets for which Lenders Funding held a valid, duly enforceable security interest as of the Petition Date; and iii) cash equal to the amount of the net sales proceeds, if any, determined by order of the Court to be necessary to compensate lenders funding for any diminution in the value of its Cash Collateral, if any, from the petition date to the effective date. Each holder of Class 3 secured claims of ad valorem taxing authorities will receive cash from the net sales proceeds equal to the allowed amount of their secured claims. The ad valorem taxing authorities will be deemed to release any and all liens affecting the Debtors' assets. Holders of Class 4 other secured claims will receive, either: i) payment in full in cash of the other secured Claim; or (ii) assignment of the collateral securing the other secured claim, which payment or assignment shall occur on as practicable after the plan's effective date and the date on which the other secured claim becomes an allowed claim. Holders of Class 5 general unsecured claims will receive cash in an amount equal to its pro rata share of the fund, if any. The Debtor said that it can make no assurance that there will be sufficient cash or assets available to make any payment to allowed claims in Class 5. The Debtors' sources of recovery includes: i) cash equal to the net sales proceeds less those amounts payable to allowed administrative expenses, priority tax claims and Classes 1-4, if applicable; and ii) proceeds from excluded assets of the Debtors, including Chapter 5 causes of action, not otherwise paid or payable to administrative expenses, priority tax claims and Classes 1- 4, if any. Holders of Class 6 medical malpractice and 7 interest will not receive any distribution under the plan. A full-text copy of the Debtors' Second Amended Disclosure Statement is available for free at: http://ResearchArchives.com/t/s?3301 A full-text copy of the Debtors' Amended Chapter 11 Plan is available for free at: http://ResearchArchives.com/t/s?3302 Headquartered in Terrell, Texas, Renaissance Hospital Terrell, Inc. -- http://terrell.renhealthcare.org/-- provides medical services. The company and its affiliates, Renaissance Hospital- Grand Prairie, Inc., filed for Chapter 11 protection on Aug. 21, 2008 (Bankr. N.D. Tex. Lead Case No. 08-34143). Holland N. On'Neil, Esq., Marcus A. Helth, Esq., Michael S. Haynes, Esq., at Gardere Wynne Sewell LLP, represent the Debtors. The U.S Trustee for Region 6 appointed creditors to serve on an Official Committee of Unsecured Creditors. Shari L. Heyen, Esq., and William L. Medford, Esq., at Greenberg Traurig LLP, represent the Committee in this cases. When the Debtors filed for protection from their creditors, they listed assets and debts between $10 million and $50 million each. SCPB LLC: Case Summary & Seven Largest Unsecured Creditors ---------------------------------------------------------- Debtor: SCPB, LLC 6942 Barth Shawnee, KS 66226 Bankruptcy Case No.: 08-22445 Chapter 11 Petition Date: September 25, 2008 Court: District of Kansas (Kansas City) Judge: Robert D. Berger Debtor's Counsel: Joanne B. Stutz, Esq. jbs@evans-mullinix.com Evans & Mullinix PA 7225 Renner Road, Suite 200 Shawnee, KS 66217 Tel: (913) 962-8700 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's Seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ City of Kansas City, Missouri Taxes for $80,000 Treasury Division Neiborhood Dept of Finance Treasury Improvement 414 East 12th Street Kansas City, MO 64106 City of Kansas City, Missouri Real estate taxes $11,662 Treasury Division Dept of Finance Treasury 414 East 12th Street Kansas City, MO 64106 Clay County Collector Real estate taxes $29,707 Administration Building 1 Courthouse Square Liberty, MO 64068 Gary C. Richter, CPA Accountant/Tax services $195 7199 West 98th Terr, Suite 120 Overland Park, KS 66212 George Butler Associates Traffic Study $9,432 One Renner Ridge 9801 Renner Blvd. Lenexa, KS 66219-9745 Lutjen, Inc. Engineering fees $61,326 8350 North Saint Clair Ave. Kansas City, MO 64151 Mitchell, Kristl & Lieber Legal Fees $15,000 1220 Washington, 3rd Floor Kansas City, MO 64105-2245 SEASIDE AMELIA: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Seaside Amelia Inn, LLC Suite L-4 11285 Elkins Road Roswell, GA 30076 Bankruptcy Case No.: 08-78823 Chapter 11 Petition Date: September 24, 2008 Court: Northern District of Georgia (Atlanta) Judge: Mary Grace Diehl Debtor's Counsel: Rex Cornelison, Esq. The Cornelison Group, LLC Building D, Suite 1 500 Sun Valley Drive Roswell, GA 30076-5636 Tel: (770) 587-0082 Estimated Assets: $50 to $500,000 Estimated Debts: $1,000,000 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors. SHILOH'S INDUSTRIES: Moody's Rates $120MM Revolving Facility 'Ba2' ------------------------------------------------------------------ Moody's Investors Service assigned a Ba2 rating to Shiloh's Industries, Inc.'s new $120 million senior secured revolving credit facility due 2013, while affirming its Ba3 Corporate Family Rating. Proceeds from the newly rated debt were used to fully repay the company's pre-existing $175 million credit facilities due 2010 consisting of a $125M revolver and $50M term loan, ratings of which have been withdrawn concurrently. The ratings outlook remains stable. The affirmation of the Ba3 Corporate Family Rating considers some improvement in financial flexibility from the refinancing, Shiloh's leading position within the engineered welded blanks space, history of debt repayment, and stable free cash flow. Additionally, the Corporate Family Rating reflects the company's small size within the auto supplier industry, continued weakness within the auto industry, high concentration with the Big three automakers, and lack of material geographic diversification. John Zhao, Analyst, commented that, "Despite the expectation for continued weakness within the automotive sector, Shiloh has been so far able to maintain its margin by aggressively managing down variable cost to offset the sales decline. It also demonstrated its willingness and ability to reduce debt, resulting in Moody's anticipation for stable credit metrics over the intermediate term even though its cash flow generation will likely weaken as a result of the expected further downturn in the US auto industry." The stable outlook reflects Moody's expectation for Shiloh's continued deleveraging and relatively stable cash flow generation over the near term in the face of a prolonged decline in the auto industry. Ratings could experience downward pressure if the company's operating performance were to materially decline resulting in an impaired operating margin of less than 3% and the lack of reducing its leverage position. Additionally, pronounced and protracted decline in the industry outside of expectations or a pursuit of more aggressive shareholder friendly policy could result in negative rating pressure. The company's $120 million senior secured revolver is rated Ba2, which reflects a loss-given-default expectation greater than or equal to 10% and less than 30% (LGD 2). The ratings are one notch above the Corporate Family Rating, reflecting amount of support below the secured credit facilities in the form of other unsecured debt. These ratings were affected: -- Ba3 Corporate Family Rating - affirmed -- B1 Probability of Default Rating - affirmed -- Ba2 (LGD2/24%) rating on the $120 million Senior Secured Revolver -- assigned -- Ba2 (LGD2/22%) rating on the $50 million Senior Secured Term Loan --withdrawn -- Ba2 (LGD2/22%) rating on the $125 million Senior Secured Revolver - withdrawn Headquartered in Valley City, Ohio, Shiloh Industries, Inc. is a manufacturer of first operation blanks, engineered welded blanks, complex stampings and modular assemblies for the automotive, heavy truck and other industrial markets. SPORTS COLLECTIBLES: U.S. Trustee to Hold Meeting to Form Panel --------------------------------------------------------------- The United States Trustee for Region 3, will hold an organizational meeting in the Chapter 11 cases of Sports Collectibles Acquisition Corp. on October 2, 2008 at 11:00 a.m. at J. Caleb Boggs Federal Building, 844 King Street, Room 5209 in Wilmington, Delaware. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. About Sports Collectibles Headquartered in West ChesterSports Collectibles Acquisition Corp. -- http://www.bcsports.com/-- operates 45 retail stores located in regional shopping malls around the United States. The company offers sports related merchandise and apparel. The company filed for Chapter 11 protection on September 21, 2008 (Bankr. D.Del. Case No. 08-12170). Andrew C. Kassner, Esq. and Howard A. Cohen, Esq. at Drinker Biddle & Reath LLP represent 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. STAMFORD CENTER: Court Allows Firm to Continue Operations --------------------------------------------------------- Monica Potts at The Advocate (Connecticut) reports that the Stamford Center for the Arts Inc. said on Wednesday that the U.S. Bankruptcy Court for the District of Connecticut has approved the company's continued operations. Citing Stamford Center's spokesperson Timothy Bannon, The Advocate relates that institutions that have increased donations to the center include downtown pharmaceutical company, Purdue Pharma, with its "annual giving" increasing five-fold to $50,000 this year. Stamford Center's chairperson, Michael Widland, said that the center had a series of successful shows, including Roberta Flack and the Indigo Girls, The Advocate reports. The state provided other funds to help Stamford Center pay down other debts, the report says. According to The Advocate, Mayor Dannel Malloy said the city of Stamford was working with its delegation to the General Assembly so that "the state finds a way to make sure that we can, with confidence, go forward and rebuild this institution." About Stamford Center Headquartered in Stamford, Connecticut, Stamford Center for the Arts Inc. fkn Stamford Theatre Partnership -- http://www.stamfordcenterforthearts.org/-- was created by Champion International Corp., Pitney Bowes Inc. and F.D. Rich Company Inc. The Debtor filed for bankruptcy protection on Aug. 22, 2008 (Bankr. D.C. Case No.: 08-50773). Patrick J. McHugh, Esq., at Finn Dixon and Herling is the Debtor's counsel. When the Debtor filed for bankruptcy, it listed assets of $10,000,000 to $50,000,000 and debts of $1,000,000 to $10,000,000. STRATFORD NURSING: U.S. Trustee to Hold Meeting to Form Panel ------------------------------------------------------------- The United States Trustee for Region 3, will hold an organizational meeting in the Chapter 11 cases of Stratford Nursing and Convalescent on October 7, 2008 at 10:00 a.m. at U.S. Trustee's Hearing Room Bridge View, 800-840 Cooper Street, Suite 102 in Camden, New Jersey. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. About Stratford Nursing Based in Stratford, New Jersey, Stratford Nursing and Convalescent Center -- http://www.stratfordnursingcenter.com/-- is a rehabilitation institute. The company filed for Chapter 11 protection on September 17, 2008 (Bankr. D.N.J. Case No. 08-27733). Albert A. Ciardi, III, Esq. and Nicole M. Nigrelli, Esq. at Ciardi Ciardi & Astin, P.C. represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors its listed assets of $50,000 to $100,000 and debts of $1,000,000 to $10,000,000. STRUCTURED ASSET: S&P Junks Ratings on Two Classes of Certificates ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on the class M7 and M6 mortgage pass-through certificates issued by Structured Asset Securities Corp.'s series 2004-S2. At the same time, S&P lowered its rating on the class M7, M6, M5, M4, and M3 mortgage pass-through certificates issued by Structured Asset Securities Corp.'s series 2004-S3. S&P also affirmed its ratings on five other classes from these two Structured Asset Securities Corp. transactions. The downgrades reflect the deteriorating performance of the collateral pools for series 2004-S2 and 2004-S3. Monthly net losses have outpaced excess interest, resulting in an erosion of overcollateralization and a previously reported write-down to the B class from series 2004-S2 and the M9 and M8 classes in series 2004-S3. As of the September 2008 remittance period, severely delinquent loans for series 2004-S2 and 2004-S3 were 4.48% and 5.35% of the current pool balances, respectively. Cumulative realized losses, as a percentage of the original pool balances, were 4.41% for series 2004-S2 and 4.97% for series 2004-S3. The remaining classes from these series have adequate credit support for the current ratings. However, S&P will continue to closely monitor these transactions. If delinquencies continue to translate into realized losses, S&P will take further negative rating actions. Seasoning for series 2004-S2 and 2004-S3 is 51 months and 47 months, and these series have outstanding pool factors of 6.19% and 7.68%, respectively. A combination of excess interest, subordination, and O/C originally provided credit support for these transactions. However, losses have continually exceeded excess interest, depleting O/C to zero and causing the aforementioned principal write-down, thereby impairing the credit support available to these transactions. The collateral for series 2004-S2 originally consisted of subprime, fixed-rate, second-lien mortgage loans, and the collateral for series 2004-S3 originally consisted of conventional, 30-year, fixed-rate, fully amortizing and balloon second-lien mortgage loans. Ratings Lowered Structured Asset Securities Corp. Mortgage pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2004-S2 M6 B BBB 2004-S2 M7 CCC BBB- 2004-S3 M3 BBB AA- 2004-S3 M4 BB A 2004-S3 M5 B A- 2004-S3 M6 CCC BBB- 2004-S3 M7 CC CCC Ratings Affirmed Structured Asset Securities Corp. Mortgage pass-through certificates Series Class Rating ------ ----- ------ 2004-S2 A-SIO AAA 2004-S2 M4 A- 2004-S2 M5 BBB+ 2004-S3 M1 AA+ 2004-S3 M2 AA STURGIS IRON: Creditors Want Case Converted to Chapter 7 -------------------------------------------------------- Erik Larson of Bloomberg News reports that the Official Committee of Unsecured Creditors in the bankruptcy of Sturgis Iron & Metal Co. asked the U.S. Bankruptcy Court for the Western District of Michigan on Sept. 27, 2008, to convert the Debtor's Chapter 11 case to Chapter 7. According to the report, the Committee told the Court that the Debtor is wasting money during its wind down and should be taken over by a trustee. Claims that aren't backed by collateral will receive better recovery if the Debtor's case is converted, according to the report. Unsecured creditors, which seek $37.1 million, will get only $865,000 under current conditions, the Committee said according to the report. About Sturgis Iron Based in Sturgis, Michigan, Sturgis Iron & Metal Co., Inc. sells ferrous metal scrap & waste in wholesale. It also manufactures secondary nonferrous metals, and provides pre-finishing iron or steel processes services, finishing metal processing services, and smelting metal services. The company filed for chapter 11 protection on Apr. 4, 2008 (Bankr. W.D. Mich. Case No. 08-02966). Jay L. Welford, Esq., Judith Greenstone Miller, Esq., Paige Barr, Esq., Paul R. Hage, Esq. and Richard E. Kruger, Esq., at Jaffe Raitt Heuer & Weiss, P.C. represent the Debtor in its restructuring efforts. The Debtor selected Kurtzman Carson Consultants LLC as claims agent. The U.S. Trustee for Region 9 appointed an Official Committee of Unsecured Creditors in this case. The Committee proposed Winston & Strawn LLP as its counsel. As reported in the Troubled Company Reporter on May 13, 2008, the Debtor's summary of schedules shows total assets of $23,363,626 and total debts of $96,346,739. SUPERIOR OIL: Posts $232,326 Net Loss in 2008 Second Quarter ------------------------------------------------------------ Superior Oil and Gas Co. reported a net loss of $232,326 on oil and gas revenue of $15,546 for the second quarter ended June 30, 2008, compared with a loss of $356,649 on zero revenues for the same period in 2007. General and administrative expenses were $227,674 for the three and six month period ended June 30, 2008, compared to $330,527 for the same period in 2007. The decrease in general and administrative expenses in the three months ended June 30, 2008, compared to 2007 was due primarily to decreases in financial consulting and professional fees of approximately $166,000 and $62,000, respectively, partially offset by increases of approximately $14,000 in advertising, $13,000 in contract labor, $11,000 in new project analysis and $65,000 in travel. Balance Sheet At June 30, 2008, the company's balance sheet showed $2,562,685 in total assets, $2,377,370 in total liabilities, and $185,315 in total stockholders' equity. The company's consolidated balance sheet at June 30, 2008, also showed strained liquidity with $44,699 in total current assets available to pay $1,592,272 in total current liabilities. 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?3304 Going Concern Doubt The company neither has sufficient cash on hand nor is it generating sufficient revenues to cover its operating overhead. In order to be able to complete the wells it is in the process of drilling and completing and to produce those wells, the company will be required to obtain significant funding. These factors cast substantial doubt as to the company's ability to continue as a going concern. About Superior Oil Based in Calumet, Oklahoma, Superior Oil and Gas Co. (OTC BB: SIOR) -- http://www.superioroilandgas.com/-- engages in the exploration, development, and production of oil and gas properties. It owns leases with 2,121 undeveloped acres in Oklahoma and Texas. Superior Oil & Gas primarily serves marketers and other purchasers, as well as public utility companies. The company, formerly known as Red River Resources, Inc., was incorporated in 1997. TROPICANA ENTERTAIMENT: Files Notice for Evansville Asset Sale -------------------------------------------------------------- Tropicana Entertainment LLC and its debtor-affiliates filed with the U.S. Bankruptcy Court for the District of Delaware a notice of bid deadline, public auction, and sale hearing with respect to their Evansville assets. A full-text copy of the notice can be obtained for free at http://ResearchArchives.com/t/s?32f0 Debtor Aztar Riverboat Holding Company, LLC, entered into a Securities Purchase Agreement on March 31, 2008, with Resorts Indiana, LLC, as Buyer, and Eldorado Resorts, LLC, as Parent Guarantor, for the sale of the Debtors' membership interests in or the assets of Aztar Indiana Gaming Company, LLC. The Court approved the Bidding Procedures on Sept. 16, 2008. Interested parties are invited to submit Qualifying Bids for the Evansville Assets in accordance with the Bidding Procedures Order. The deadline to submit a Qualifying Bid for the Evansville Assets will be set by the Debtors, in consultation with the Official Committee of Unsecured Creditors, the ad hoc group of the Debtors' senior subordinated bondholders, Credit Suisse, as administrative agent for the Debtors' OpCo prepetition secured lenders, and Credit Suisse, as administrative agent for the Debtors' LandCo prepetition secured lenders. If the Debtors timely receive one or more Qualifying bids other than from Resorts Indiana, LLC, and Eldorado Resorts, LLC, an auction will be conducted. The Debtors will determine the date, time, and place of the Auction, if any. Objections to the Sale Motion are due no later than 4:00 p.m., on Nov. 7, 2008. The Sale Hearing will be held on Nov. 18, 2008. The Debtors also reserve their rights, in the exercise of their fiduciary duties and in consultation with their creditor constituencies, to modify the Bidding Procedures or impose, at or before the Auction, additional customary terms and conditions on the Evansville Assets sale. About Tropica Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada and Atlantic City, New Jersey. Tropicana Entertainment LLC filed for Chapter 11 protection on May 5, 2008, (Bankr. D. Del. Case No. 08-10856). Its debtor- affiliates filed for separate Chapter 11 petitions but with no case numbers assigned yet. Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. The Court has extended the Debtors' exclusive period to file a plan through and including January 12, 2009, and to solicit votes on the plan through and including March 13, 2009. (Tropicana Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENT: Trustee Picks Cordish as Lead Bidder, Blocks Sale ---------------------------------------------------------------- The Casino Control Commission disclosed that the state-appointed trustee and conservator of the Tropicana Atlantic City Casino & Resort has entered into negotiations with The Cordish Company concerning its proposal to purchase the Tropicana Atlantic City Casino in cash and securities aggregating $700,000,000. After conducting a thorough auction process, conservator Gary S. Stein and his investment banker, Moelis & Company, identified Cordish as a leading bidder for a number of reasons, including the price and consideration offered, well as Cordish's capabilities and track record of success in gaming, real estate development, and management. Cordish has indicated to Mr. Stein that it is prepared to complete its due diligence and move forward expeditiously. Under the terms of the proposed transaction, Cordish would acquire substantially all of the assets of Adamar, which consist of the Tropicana Casino & Resort. Mr. Stein expects to ask the commission for approval to designate Cordish as the lead bidder, or stalking horse, in a Section 363 proceeding. The transaction is also subject to completion of a definitive asset purchase agreement, approval of the commission, and various other conditions. The commission voted on Dec. 12, 2007, not to renew the Tropicana's casino license, formerly held by Adamar of New Jersey. That vote triggered a trust through which Mr. Stein, a retired justice of the New Jersey State Supreme Court, controls the stock of Adamar. The commission subsequently named Mr. Stein as conservator. Title to all of Adamar's assets was automatically transferred to the conservator and he was charged with selling the casino hotel complex while keeping it open and operating. The Cordish Company is one of the largest real estate developers in the world with extensive expertise in gaming and lodging, entertainment and mixed-use projects, sports anchored developments, and retail, office and residential construction. Many of Cordish's developments involve public/private partnerships, including The Walk in Atlantic City. Tropicana Entertainment's Statement Tropicana Entertainment LLC, asserted in a press statement that Cordish's offer is below the value of Tropicana Atlantic City and that it intends to block the proposed sale: Tropicana Entertainment Chief Executive Officer Scott Butera said that the reported indication of interest by Cordish & Co. in the purchase of the Tropicana City Casino and Resort in Atlantic City is likely to be below the underlying value of the asset and that Tropicana intends to pursue legal and other strategic alternatives to block that proposed sale by the New Jersey state appointed conservator of the casino. According to Mr. Butera, the securities that Cordish is said to be putting up for the purchase are likely to be well below the stated value, thus making highly suspect the $700,000,000 sale price referenced in media reports yesterday. Given the softness in the $700,000,000 number, Mr. Butera is urging conservator Judge Gary Stein to make the Cordish term sheet public so that all of Tropicana's constituents, including taxpayers and officials of New Jersey state and city government, can fully evaluate the actual value of the deal being proposed. Mr. Butera asserted that current economic conditions, an unexpected decline in the gaming business in New Jersey, and a mandated deadline for the sale have combined to produce unreasonably low offers for the casino property. He also pointed out that the reported term sheet from Cordish, even if the value of the securities portion could be substantiated, is well below previously reported offers. "The purported price for the Atlantic City property understandably reflects a fire sale mentality on the part of prospective buyers who see an extraordinary opportunity in a depressed market, which creates a windfall at the expense of other innocent parties," Mr. Butera said. "That's why we have proposed working cooperatively with the New Jersey Casino Control Commission to assume control of the property," Mr. Butera continued. "By incorporating the Atlantic City operations into the Tropicana family, we expect to stabilize and improve operations and build a stronger, more financially healthy brand. In the end, we believe that our plan would maximize the Atlantic City assets in a way that a sale process cannot possibly achieve at this time. "Under the circumstances," he concluded, "our process represents the most equitable course for determining the highest and best use for the Atlantic City assets, an outcome which is in keeping with our fiduciary obligations to creditors, employees, customers, local communities and taxpayers." About Tropica Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada and Atlantic City, New Jersey. Tropicana Entertainment LLC filed for Chapter 11 protection on May 5, 2008, (Bankr. D. Del. Case No. 08-10856). Its debtor- affiliates filed for separate Chapter 11 petitions but with no case numbers assigned yet. Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. The Court has extended the Debtors' exclusive period to file a plan through and including January 12, 2009, and to solicit votes on the plan through and including March 13, 2009. (Tropicana Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Fitch Sees Limited Margin of Error on Debt Covenants ---------------------------------------------------------------- Fitch Ratings has published an in-depth analysis of media & entertainment sector liquidity titled 'Liquidity Focus: U.S. Media & Entertainment'. Fitch has stated in previous reports that as Lehman Brothers lending capacity is withdrawn; overlapping exposure of Bank of America/Merrill Lynch and Citigroup/Wachovia are addressed; and as possibly more institutions are merged, the systemic reduction in lending capacity could exacerbate the already tight conditions resulting from the credit crisis. The report released today emphasizes that due to these factors, Fitch's ratings and analysis of corporate liquidity are weighted more heavily toward internal sources of funds: cash holdings and cash generated from operations. Key conclusions include: -- Liquidity for the media & entertainment sector is generally healthy, with latest 12 months (LTM) free cash flow, as of June 30, 2008, of $18.1 billion and balance-sheet cash of $21.0 billion. Assuming LTM free cash flow is a proxy for future free cash flow, internal liquidity exceeds 2008, 2009 and 2010 maturities of $6.2 billion (includes any commercial paper borrowings), $10.2 billion and $12.4 billion, respectively. -- Not surprisingly, the major conglomerates -- including The Walt Disney Company (Disney), News Corporation (News Corp.), Time Warner Inc. (Time Warner) and Viacom Inc. (Viacom) -- are currently the best positioned to weather the current financial market conditions, as these companies benefit from strong and stable operating liquidity, diversity of revenues (non-advertising), meaningful amounts of capacity in the form of cash on hand and revolver availability, as well as longer-dated maturities. -- Within the portfolio, there is no significant Lehman Brothers exposure in bank facility commitments. When present, Lehman's commitments were typically lower than 10% of a company's total bank revolver. While it is possible that other banks assume at least a portion of Lehman's commitments, the failure of such would not result in a material credit event for the portfolio. -- There is also limited overlap between Wachovia/Citibank and Bank of America/Merrill Lynch on most bank facilities in Fitch's portfolio. Importantly, the limited instances of overlap occur on facilities that Fitch expects will have sufficient availability when they come due for re-financing. -- The tightening of the commercial paper market does not cause a material concern for Fitch as the media & entertainment sector is not a major CP issuer. Importantly, the majority of CP balances outstanding in Fitch's portfolio are covered by balance sheet cash at June 30, 2008. In addition, the majority of CP issuers have material availability under their revolving credit facilities with commitments from banks such as Bank of America, JP Morgan, Citibank, Deutsche Bank, Barclays, HSBC, Royal Bank of Scotland, Mizuho and Bank of Tokyo- Mitsubishi. -- Fitch estimates that The McClatchy Company (McClatchy) had very little cushion in its previous 2.75 times (x) interest coverage covenant prior to announcing an amendment to its credit agreement on Sept. 26, 2008. The amendment revised the interest coverage ratio initially down to 2.25x from 2.75x, and leverage to 6.25x from 5x. Both ratios loosen further in 2009, providing additional flexibility at the expense of revolver capacity, pricing and other restrictions (security, dividends, etc.). Tribune Company has a very limited margin of error in relation to its debt covenants. Fitch estimates that (assuming all else equal), less than a 10% drop in EBITDA for Tribune could put them at risk of breaching their guaranteed leverage ratio. -- Although facing both cyclical and secular threats, the media & entertainment industry is characterized by relatively predictable revenue streams and high margins. High free cash flow conversion is supported by limited working-capital swings, low capital expenditure, and (sometimes) low cash taxes. Fitch believes these factors make some media companies relatively attractive borrowers for banks and bondholders, even under more selective market conditions. TS TELECOM: Fails to File Annual Report, Issues Default Notice -------------------------------------------------------------- TS Telecom, Ltd. said that it issued a notice of default on Sept. 26, 2008, after it was unable to file on July 29, 2008, its annual financial statements for the year ended March 31, 2008. The company said that its expects to file the financial statements by Sept. 29, 2008. The company, however, did not issue an updated regarding the matter. In the event it fails to file the financial statements, the securities commissions may impose an issuer cease trade order on the company, the company lamented. Furthermore, an issuer CTO may be imposed if it fails to file its default status reports as required in the accordance with CSA Staff Notice 57-301, the company continued. The company's auditors are now in possession of the requested financial information from TS Telecom Technologies Limited and a draft of the audit report was completed. Headquartered in Markham, Ontario, TS Telecom, Ltd. -- http://www.tstelecom.com/-- is a telecommunication system provider. The company's shares are traded on the TSX Venture Exchange in Canada and the shares of its principal subsidiary are traded on the Growth Enterprises Market of the Hong Kong Stock Exchange. TURKEY LAKE: Ordered to Obtain New Counsel to Keep Case ------------------------------------------------------- Judge Arthur Briskman of the U.S. Bankruptcy Court in Orlando has ordered Turkey Lake Partners LLC to obtain new counsel or correct a matter pending before the court in order for its bankruptcy case to continue, Sara K. Clarke of the Orlando Sentinel reported Tuesday. According to the report, the case was stalled because there is nothing in court records to indicate that the company's New York- based lawyer, Raymond Sussman, is permitted to appear before the Court. Turkey Lake Partners filed for Chapter 11 bankruptcy protection, more than a year after its condominium-hotel project near SeaWorld Orlando put all sales on hold, Sara K. Clarke of the Orlando Sentinel reported Tuesday. Turkey Lake Partners LLC, doing business as Sage Resorts, planned to build a 10-story, 260-unit condo-hotel on 5.4 acres near Big Sand Lake. The petition, filed Sept. 12 in U.S. Bankruptcy Court in Orlando, did not include a list of the largest unsecured creditors, as required by the Court. A meeting for creditors is scheduled for Oct. 20 in Orlando bankruptcy court. About Turkey Lake Partners Based in Brooklyn, New York, Turkey Lake Partners LLC is a single asset real estate debtor. The company filed for Chapter 11 relief on Sept. 12, 2008 (Case No. 08-10874). Raymond S. Sussmasn, Esq. represents the Debtor as counsel. When the company filed for protection from its creditors, it listed assets and debts of $1 million to $10 million. UBS CDS: Moody's Junks, Reviews Rating on $40 Million Notes ----------------------------------------------------------- Moody's Investors Service has downgraded and left on review for possible downgrade the following note issued by UBS CDS Ref.#37395430: Class Description: Trade Ref. # 37395430 $40,000,000 Credit Derivative Transaction due June 15, 2014 -- Prior Rating: Aa3 -- Prior Rating Date: 6/30/2006 -- Current Rating: Caa2, on review for possible downgrade According to Moody's, the rating action is a result of the deterioration in the credit quality of the transaction's underlying collateral pool consisting primarily of structured finance securities. US WEB: To Sell Assets for $100,000, Plus Assumption of Debts ------------------------------------------------------------- Bill Rochelle of Bloomberg News reports that US Web, Inc., has a contract to sell assets to a newly formed company. The report says a 25% shareholder and vice-president for sales at US Web is a part owner of Newco. The sale is subject to higher and better offers at an auction. The price is $100,000 cash, plus the assumption of specified liabilities, together with a formula based on accounts receivable and inventory, according to the report. Court papers did not indicate when bids would be due or the auction would be held, according to the report. The Debtor also filed schedules of assets and liabilities with the U.S. Bankruptcy Court for the Eastern District of New York showing property on the books for $5.4 million against $18.2 million debt, according to the report. Secured creditors are owed $12.6 million, according to the report. Unsecured claims are $5.4 million, according to the report. Huntington, New York-based US Web, Inc., produces a variety of direct-response materials, including sheetfed and continuous forms, publication insert cards, postcards, mailers, brochures and more. On August 18, 2008, the Debtor filed for Chapter 11 bankruptcy protection (Bankr. E.D. N.Y. Case No. 08-74421). Lori K. Sapir, Esq., at Silverberg Stonehill Goldsmith & Haber represents the Debtors in its restructuring efforts. In its filing, the Debtor listed between $10 million to $50 million in estimated assets and between $10 million to $50 million in estimated debts. U.S. HELICOPTER: June 30 Balance Sheet Upside-Down by $12,705,166 ----------------------------------------------------------------- U.S. Helicopter Corporation's balance sheet at June 30, 2008, showed total assets of $3,344,298 and total liabilities of $16,049,464, resulting in a $12,705,166 stockholders' deficit. At June 30, 2008, the company's balance sheet also showed strained liquidity with $1,303,373 in total current assets available to pay $12,001,353 in total current liabilities. The company reported a net loss of $3,208,038 on net revenues of $1,099,199 for the second quarter ended June 30, 2008, compared with a net loss of $3,449,050 on net revenues of $883,202 in the corresponding period last year. The increase in total revenues is attributable to increased passenger counts in 2008 versus 2007 and a higher net fare. The decrease in net loss loss is due to lower expense levels and an increase in revenue. At June 30, 2008, cash and cash equivalents were $203,719. As of June 30, 2008, the company had a working capital deficit of $10,697,978 as compared to $3,313,797 at June 30, 2007. 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?3305 Going Concern Doubt The company has incurred losses since inception and has experienced negative cash flows from operations. The expansion and development of the company's business will likely require additional capital. These conditions raise substantial doubt about the company's ability to continue as a going concern. About U.S. Helicopter Headquartered in New York, U.S. Helicopter Corp. (OTC: USHP.OB) -- http://www.flyush.com/-- provides scheduled and charter passenger helicopter services in the United States. It operates scheduled flights connecting Manhattan with Newark Liberty International Airport and John F. Kennedy International Airport. U.S. Helicopter Corporation was founded in 2003. ULTITEK LTD: June 30 Balance Sheet Upside-Down by $1,505,528 ------------------------------------------------------------ Ultitek, Ltd.'s consolidated balance sheet at June 30, 2008, showed $1,116,772 in total assets and $2,622,300 in total liabilities, resulting in a $1,505,528 stockholders' deficit. At June 30, 2008, the company's consolidated balance sheet also showed strained liquidity with $1,036,533 in total current assets available to pay $2,240,004 in total current liabilities. The company reported a net loss of $1,327,198 on revenues of $683,158 for the second quarter ended June 30, 2008, compared with a net loss of $1,010,294 on revenues of $686,293 in the same period last year. Selling, general and administrative expenses (SG&A) increased by $331,118, or approximately 39.7%, from $833,192 for the three months ended June 30, 2007, to $1,164,310 for the three months ended June 30, 2008. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2008, are available for free at http://researcharchives.com/t/s?3310 Going Concern Doubt The company incurred a net loss of $1,327,198 for the three months ended June 30, 2008, and had an accumulated deficit of $14,192,825 at June 30, 2008. Even if the company is able to raise sufficient capital to support its operating expenses and generate adequate revenues, there can be no assurances that the revenue will be sufficient to enable it to develop business to a level where it will generate profits and cash flows from operations. These matters raise substantial doubt about the company�s ability to continue as a going concern. About Ultitek, Ltd. Headquartered in Englewood Cliffs, N.J., Ultitek, Ltd. (OTC BB: UITK.OB) -- http://www.ultitek.com/ -- is engaged in the licensing and management of its multi-purpose software system, known as the Ultitek System, to airlines located in Russia and its provinces. This software is used by airlines to manage their reservation, global distribution and operating systems. The company conducts its operations through its wholly-owned subsidiary, Transport Automation Information Systems, or TAIS. The company currently operates its business in Russia. VIASPACE INC: Settles Dispute & Issues Shares to YA Global ---------------------------------------------------------- On September 8, 2008, VIASPACE Inc. and YA Global Investments, L.P., formerly known as Cornell Capital Partners, L.P. and another related party entered into a Settlement Agreement, whereby the parties agreed, subject to certain conditions, to completely and forever settle any and all of their disputes and claims with each other as well as render null and void any and all prior agreements between the parties including the warrant agreements dated November 2, 2006, amendment to warrant agreement dated March 7, 2007, Securities Purchase Agreement dated March 7, 2007, Registration Rights Agreement dated March 7, 2007, and Irrevocable Transfer Agent Instructions dated November 2, 2006. YA Global served a Complaint against the Company on April 24, 2008, claiming that they were entitled to additional warrants at a price lower than the revised exercise price of the warrants that was established on March 7, 2007. The company has categorically denied YA Global's claims. The Agreement provides for full and complete resolution of the dispute under the complaint subject only to certain conditions being fulfilled related to delivery and execution of consideration under the Agreement. As a result, other than what is agreed to be provided under the terms of the Agreement, the company has no continuing obligation to YA Global. Pursuant to the Agreement, the company has agreed to issue YA Global 22,500,000 restricted shares of Company common stock. As a condition to the Agreement, YA Global has a right to pursue the removal of the restrictive legend on the Shares by several means including (i) a Fairness Hearing pursuant to Section 3(a) (10) of the Securities Act of 1933, as amended in New Jersey; (ii) an SEC Rule 144 legal opinion; or (iii) a registration statement. The Agreement further provides, that in certain, limited circumstances arising from defined events of default, the company may be required to issue additional shares -- not to exceed 22,500,000 shares -- to YA Global if the default is not cured within the prescribed time period. A full-text copy of the Settlement Agreement is available for free at http://researcharchives.com/t/s?3303 On September 10, 2008, the Company issued to YA Global, pursuant to the Agreement, 22,500,000 shares of the company's common stock. The shares to YA Global were not registered under the Securities Act of 1933, as amended. About Viaspace Inc. Based in Pasadena, California, VIASPACE Inc. (OTC BB: VSPC) -- http://www.VIASPACE.com/-- founded in 1998 with the objective of transforming proven space and defense technologies from NASA and the Department of Defense into hardware and software solutions that solve today's complex problems, Viaspace benefits from important patent and software licenses from Caltech, which manages NASA's Jet Propulsion Laboratory. Going Concern Doubt Goldman Parks Kurland Mohidin LLP, in Encino, California, expressed substantial doubt about VIASPACE Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's recurring losses from operations, accumulated deficit and shareholders' deficit at Dec. 31, 2007. For the three months ended June 30, 2008, the company posted a net loss of $1,901,000 on revenues of $67,000, compared with a net loss of $2,102,000 on revenues of $132,000 in the same period in 2007. WACHOVIA CORP: Moody's Puts Deposit and Debt Ratings Under Review ----------------------------------------------------------------- Moody's placed Wachovia Corporation's senior and subordinated debt ratings (senior at A1) and the deposit and debt ratings of Wachovia banks and thrifts (deposits at Aa2) under review direction uncertain. Moody's lowered Wachovia's preferred stock rating to Ba3 from A3 and placed it under review with direction uncertain. Moody's also placed the B financial strength rating of Wachovia's bank and thrifts on review for possible downgrade. The Prime-1 rating on the bank, and the Prime-1 commercial paper rating on Wachovia Corporation were affirmed. Moody's rating action follows the announcement that Citigroup will acquire the bank and thrift assets of Wachovia Corporation for $2.1 billion. Citigroup also announced that it will assume the senior and subordinated debt, including the junior subordinated debt of Wachovia Corporation. Citigroup will not acquire Wachovia's retail brokerage operations, Wachovia Securities, or Wachovia's asset management operations, Evergreen. These operations will remain with Wachovia Corporation. In response to this transaction Moody's placed the ratings of Citigroup Inc. and Citibank under review for possible downgrade. Moody's said that Wachovia Corporation's deposit, senior and subordinated debt ratings will be dependent on the outcome of its review of Citigroup, Inc.'s ratings. Citigroup's ratings on review for possible downgrade include Citibank N.A.'s B financial strength rating and Aa1 deposit and other senior obligations ratings. Also under review for possible downgrade are Citigroup, Inc.'s Aa3 senior debt rating, A1 subordinated debt rating, and A2 preferred securities rating. Because Wachovia's bank and holding company ratings are lower than Citigroup's, Moody's placed Wachovia's senior and subordinated debt ratings on review with direction uncertain. That is, if Citigroup's ratings are confirmed, Wachovia's ratings could be raised. If Citigroup's ratings are lowered, then Wachovia's ratings could be confirmed or lowered depending on the level of downgrades for Citigroup, said Moody's. Wachovia Bank's B financial strength rating, which is at the same level as Citibank's financial strength rating, is under review for possible downgrade. The severe downgrade of Wachovia Corporation's preferred stock to Ba3 from A3 reflects the expected substantial increase in leverage at the holding company, whose major assets will be the operations of the retail brokerage Wachovia Securities and Evergreen Asset Management. The review with direction uncertain reflects the uncertainty regarding the future financial profile of Wachovia Corporation. Key considerations that will determine the future rating direction for the preferred stock include the strategic and financial plans for the newly constituted holding company, its capital structure, and the operating earnings of this entity given its new business mix. Rating action are: Downgrades: Issuer: First Fidelity Bancorporation -- Preferred Stock Preferred Stock, Downgraded to Ba3 from A3 Issuer: Wachovia Corporation -- Multiple Seniority Shelf, Downgraded to (P)Ba3 from (P)A3 -- Preferred Stock Preferred Stock, Downgraded to Ba3 from A3 -- Preferred Stock Shelf, Downgraded to (P)Ba3 from (P)A3 Issuer: Wachovia Preferred Funding Corp. -- Preferred Stock Preferred Stock, Downgraded to Ba3 from A3 -- On Review for Possible Downgrade: Issuer: Wachovia Bank, N.A. -- Bank Financial Strength Rating, Placed on Review for Possible Downgrade, currently B Issuer: World Savings Bank, FSB -- Bank Financial Strength Rating, Placed on Review for Possible Downgrade, currently B -- On Review Direction Uncertain: Issuer: Central Fidelity Capital Trust I -- Preferred Stock Preferred Stock, Placed on Review Direction Uncertain, currently A2 Issuer: Congress Financial Capital Company -- Senior Unsecured Regular Bond/Debenture, Placed on Review Direction Uncertain, currently A1 Issuer: CoreStates Capital I -- Preferred Stock Preferred Stock, Placed on Review Direction Uncertain, currently A2 Issuer: CoreStates Capital II -- Preferred Stock Preferred Stock, Placed on Review Direction Uncertain, currently A2 Issuer: CoreStates Capital III -- Preferred Stock Preferred Stock, Placed on Review Direction Uncertain, currently A2 Issuer: First Union Capital I -- Preferred Stock Preferred Stock, Placed on Review Direction Uncertain, currently A2 -- Preferred Stock Shelf, Placed on Review Direction Uncertain, currently (P)A1 Issuer: First Union Capital II -- Preferred Stock Preferred Stock, Placed on Review Direction Uncertain, currently A2 Issuer: First Union Capital III -- Preferred Stock Shelf, Placed on Review Direction Uncertain, currently (P)A2 Issuer: First Union Institutional Capital I -- Preferred Stock Preferred Stock, Placed on Review Direction Uncertain, currently A2 Issuer: First Union National Bank of Florida -- Subordinate Regular Bond/Debenture, Placed on Review Direction Uncertain, currently Aa3 Issuer: Golden West Financial Corporation -- Issuer Rating, Placed on Review Direction Uncertain, currently A1 -- Senior Unsecured Regular Bond/Debenture, Placed on Review Direction Uncertain, currently A1 Issuer: Meridian Bancorp, Inc. -- Multiple Seniority Shelf, Placed on Review Direction Uncertain, currently (P)A3 Issuer: South Carolina National Corporation -- Subordinate Medium-Term Note Program, Placed on Review Direction Uncertain, currently A2 Issuer: SouthTrust Bank -- Subordinate Regular Bond/Debenture, Placed on Review Direction Uncertain, currently Aa3 Issuer: SouthTrust Bank of Georgia, N.A. (Old) -- Subordinate Regular Bond/Debenture, Placed on Review Direction Uncertain, currently A2 Issuer: SouthTrust Corporation -- Subordinate Regular Bond/Debenture, Placed on Review Direction Uncertain, currently A2 Issuer: Wachovia Bank, N.A. -- Issuer Rating, Placed on Review Direction Uncertain, currently Aa2 -- OSO Senior Unsecured OSO Rating, Placed on Review Direction Uncertain, currently Aa2 -- Multiple Seniority Bank Note Program, Placed on Review Direction Uncertain, currently Aa3 -- Multiple Seniority Medium-Term Note Program, Placed on Review Direction Uncertain, currently Aa3 -- Subordinate Bank Note Program, Placed on Review Direction Uncertain, currently Aa3 -- Subordinate Conv./Exch. Bond/Debenture, Placed on Review Direction Uncertain, currently Aa3 -- Subordinate Regular Bond/Debenture, Placed on Review Direction Uncertain, currently Aa3 -- Senior Unsecured Bank Note Program, Placed on Review Direction Uncertain, currently Aa2 -- Senior Unsecured Deposit Note/Takedown, Placed on Review Direction Uncertain, currently Aa2 -- Senior Unsecured Conv./Exch. Bond/Debenture, Placed on Review Direction Uncertain, currently Aa2 -- Senior Unsecured Regular Bond/Debenture, Placed on Review Direction Uncertain, currently Aa2 -- Senior Unsecured Deposit Rating, Placed on Review Direction Uncertain, currently Aa2 Issuer: Wachovia Bank, N.A. (Old) -- Senior Unsecured Bank Note Program, Placed on Review Direction Uncertain, currently Aa3 -- Senior Unsecured Medium-Term Note Program, Placed on Review Direction Uncertain, currently Aa3 -- Senior Unsecured Regular Bond/Debenture, Placed on Review Direction Uncertain, currently Aa3 Issuer: Wachovia Capital Trust I -- Preferred Stock Preferred Stock, Placed on Review Direction Uncertain, currently A2 Issuer: Wachovia Capital Trust II -- Preferred Stock Preferred Stock, Placed on Review Direction Uncertain, currently A2 Issuer: Wachovia Capital Trust III -- Preferred Stock Preferred Stock, Placed on Review Direction Uncertain, currently A3 -- Preferred Stock Shelf, Placed on Review Direction Uncertain, currently (P)A2 Issuer: Wachovia Capital Trust IV -- Preferred Stock Preferred Stock, Placed on Review Direction Uncertain, currently A2 Issuer: Wachovia Capital Trust IX -- Preferred Stock Preferred Stock, Placed on Review Direction Uncertain, currently A2 -- Preferred Stock Shelf, Placed on Review Direction Uncertain, currently (P)A3 Issuer: Wachovia Capital Trust V -- Preferred Stock Preferred Stock, Placed on Review Direction Uncertain, currently A2 Issuer: Wachovia Capital Trust VII -- Preferred Stock Shelf, Placed on Review Direction Uncertain, currently (P)A2 Issuer: Wachovia Capital Trust VIII -- Preferred Stock Shelf, Placed on Review Direction Uncertain, currently (P)A2 Issuer: Wachovia Capital Trust X -- Preferred Stock Preferred Stock, Placed on Review Direction Uncertain, currently A2 -- Preferred Stock Shelf, Placed on Review Direction Uncertain, currently (P)A3 Issuer: Wachovia Capital Trust XI -- Preferred Stock Shelf, Placed on Review Direction Uncertain, currently (P)A3 Issuer: Wachovia Capital Trust XII -- Preferred Stock Shelf, Placed on Review Direction Uncertain, currently (P)A3 Issuer: Wachovia Capital Trust XIII -- Preferred Stock Shelf, Placed on Review Direction Uncertain, currently (P)A3 Issuer: Wachovia Capital Trust XIV -- Preferred Stock Shelf, Placed on Review Direction Uncertain, currently (P)A2 Issuer: Wachovia Capital Trust XV -- Preferred Stock Shelf, Placed on Review Direction Uncertain, currently (P)A3 Issuer: Wachovia Corporation -- Junior Subordinated Shelf, Placed on Review Direction Uncertain, currently (P)A2 -- Multiple Seniority Medium-Term Note Program, Placed on Review Direction Uncertain, currently A2 -- Multiple Seniority Shelf, Placed on Review Direction Uncertain, currently (P)A2 -- Subordinate Medium-Term Note Program, Placed on Review Direction Uncertain, currently A2 -- Subordinate Regular Bond/Debenture, Placed on Review Direction Uncertain, currently A2 -- Senior Unsecured Conv./Exch. Bond/Debenture, Placed on Review Direction Uncertain, currently A1 -- Senior Unsecured Medium-Term Note Program, Placed on Review Direction Uncertain, currently A1 -- Senior Unsecured Regular Bond/Debenture, Placed on Review Direction Uncertain, currently A1 Issuer: Wachovia Corporation (Old) -- Multiple Seniority Shelf, Placed on Review Direction Uncertain, currently (P)A2 -- Subordinate Regular Bond/Debenture, Placed on Review Direction Uncertain, currently A2 -- Senior Subordinated Regular Bond/Debenture, Placed on Review Direction Uncertain, currently A2 -- Senior Unsecured Regular Bond/Debenture, Placed on Review Direction Uncertain, currently A1 Issuer: Western Financial Bank, F.S.B. -- Subordinate Regular Bond/Debenture, Placed on Review Direction Uncertain, currently Aa3 Issuer: World Savings Bank, FSB -- Issuer Rating, Placed on Review Direction Uncertain, currently Aa2 -- OSO Senior Unsecured OSO Rating, Placed on Review Direction Uncertain, currently Aa2 -- Senior Unsecured Regular Bond/Debenture, Placed on Review Direction Uncertain, currently Aa2 -- Senior Unsecured Deposit Rating, Placed on Review Direction Uncertain, currently Aa2 Outlook Actions: Issuer: Central Fidelity Capital Trust I -- Outlook, Changed To Rating Under Review From Negative Issuer: Congress Financial Capital Company -- Outlook, Changed To Rating Under Review From Negative Issuer: CoreStates Capital I -- Outlook, Changed To Rating Under Review From Negative Issuer: CoreStates Capital II -- Outlook, Changed To Rating Under Review From Negative Issuer: CoreStates Capital III -- Outlook, Changed To Rating Under Review From Negative Issuer: First Fidelity Bancorporation -- Outlook, Changed To Rating Under Review From Negative Issuer: First Union Capital I -- Outlook, Changed To Rating Under Review From Negative Issuer: First Union Capital II -- Outlook, Changed To Rating Under Review From Negative Issuer: First Union Capital III -- Outlook, Changed To Rating Under Review From Negative Issuer: First Union Institutional Capital I -- Outlook, Changed To Rating Under Review From Negative Issuer: First Union National Bank of Florida -- Outlook, Changed To Rating Under Review From Negative Issuer: Golden West Financial Corporation -- Outlook, Changed To Rating Under Review From Negative Issuer: Meridian Bancorp, Inc. -- Outlook, Changed To Rating Under Review From Negative Issuer: South Carolina National Corporation -- Outlook, Changed To Rating Under Review From Negative Issuer: SouthTrust Bank -- Outlook, Changed To Rating Under Review From Negative Issuer: SouthTrust Bank of Georgia, N.A. (Old) -- Outlook, Changed To Rating Under Review From Negative Issuer: SouthTrust Corporation -- Outlook, Changed To Rating Under Review From Negative Issuer: Wachovia Bank, N.A. -- Outlook, Changed To Rating Under Review From Negative Issuer: Wachovia Bank, N.A. (Old) -- Outlook, Changed To Rating Under Review From Negative Issuer: Wachovia Capital Trust I -- Outlook, Changed To Rating Under Review From Negative Issuer: Wachovia Capital Trust II -- Outlook, Changed To Rating Under Review From Negative Issuer: Wachovia Capital Trust III -- Outlook, Changed To Rating Under Review From Negative Issuer: Wachovia Capital Trust IV -- Outlook, Changed To Rating Under Review From Negative Issuer: Wachovia Capital Trust IX -- Outlook, Changed To Rating Under Review From Negative Issuer: Wachovia Capital Trust V -- Outlook, Changed To Rating Under Review From Negative Issuer: Wachovia Capital Trust VII -- Outlook, Changed To Rating Under Review From Negative Issuer: Wachovia Capital Trust VIII -- Outlook, Changed To Rating Under Review From Negative Issuer: Wachovia Capital Trust X -- Outlook, Changed To Rating Under Review From Negative Issuer: Wachovia Corporation -- Outlook, Changed To Rating Under Review From Negative Issuer: Wachovia Corporation (Old) -- Outlook, Changed To Rating Under Review From Negative Issuer: Wachovia Preferred Funding Corp. -- Outlook, Changed To Rating Under Review From Negative Issuer: Western Financial Bank, F.S.B. -- Outlook, Changed To Rating Under Review From Negative Issuer: World Savings Bank, FSB -- Outlook, Changed To Rating Under Review From Negative Wachovia Corporation is headquartered in Charlotte, North Carolina. Its reported assets as of June 30, 2008 were $812 billion. WACHOVIA CORP: Fitch Cuts IDR to 'BB-'; Puts on Developing Watch ---------------------------------------------------------------- The strategic benefits of Citigroup Inc.'s acquisition of Wachovia Corporation's retail, corporate/investment and private banking operations are tempered by Citi's own escalating asset quality challenges, according to Fitch Ratings. Fitch has placed Citi's 'AA-' long-term Issuer Default Rating on Rating Watch Negative following the announced agreement. Separately, Fitch has placed Wachovia Bank on Rating Watch Evolving and downgraded Wachovia Corporation's long-term IDR to 'BB-' from 'A+'. In exchange for all its bank operations, Wachovia Corporation will receive approximately $2.2 billion in Citigroup stock. In addition, Wachovia Corporation is expected to be left with two operating businesses, Wachovia Securities and Evergreen Asset Management. The balance sheet is expected to be funded with the remaining $9.8 billion in outstanding preferred stock and several billion in equity. There is a meaningful possibility that the earnings of the remaining businesses will be strong enough to service the preferred dividends. Alternatively, it is possible that a merger partner may emerge for the residual Wachovia Corporation. Fitch's downgrade of Wachovia Corporation reflects Fitch's view of the considerable uncertainty surrounding these assumptions, particularly as Wachovia Securities would be carved away from the bank and no longer benefit from existing synergies. Fitch expects Citigroup to post bottom line losses yet again in third-quarter 2008 as U.S. consumer problems and other charges weigh on results. If Citi's losses continue in future quarters and asset quality problems continue to escalate, notwithstanding the acquisition of Wachovia, then Fitch will likely downgrade Citi's ratings, though likely not below the 'A+' level. On the other hand, if profitability is restored and asset quality issues begin to stabilize, then there is the possibility that the Rating Watch Negative could be removed. For Wachovia bank creditors, the Citigroup transaction strengthens their credit position although Wachovia Corporation preferred holders' position will hinge on the retail brokerage business, which will comprise most of Wachovia's remaining operations if this transaction is completed. The FDIC-assisted transaction is expected to close on Dec. 31, 2008 and is subject to approval by Wachovia shareholders and the Federal Reserve. FDIC approval has already been received. This acquisition is considered a net strategic positive by substantially increasing Citi's retail and middle market banking franchises in the United States. Citi's deposit share in the U.S. is estimated to increase from 3.4% to 9.8% once this deal closes. Worldwide, total deposits are expected to exceed $1.2 trillion and total assets are expected to reach $2.9 trillion. Integration of operations will be challenging given the scope of this transaction, but potential expense synergies are considerable. As part of the deal, Citi will receive loss protection from the FDIC on a pool of Wachovia's assets totaling $312 billion, consisting of $156 billion of residential mortgages, $100 billion of commercial real estate, and $56 billion of other assets. At closing, a purchase accounting adjustment of $30 billion will be taken on this pool. Thereafter, Citi's losses on that portfolio will be capped at a total of $12 billion, up to a maximum of $4 billion per year for the next three years. The FDIC is responsible for any losses exceeding this amount. To compensate the FDIC for its loss protection arrangement, Citi is issuing preferred stock and warrants to the FDIC with a fair value of $12 billion. In addition, Citi plans to issue $10 billion of common stock to the public markets and cut the common dividend by 50%. On a proforma basis, the Tier I ratio would stand at 8.8% and the Leverage ratio at 5.2%. These ratios factor in regulatory capital relief on the $312 billion asset pool. The pending sale of Citi's German retail operations would add approximately 50 basis points to the Tier I ratio. Most Wachovia bank level ratings have been placed on Rating Watch Evolving, reflecting potential credit improvement if this transaction closes as proposed, as well as potential downside if the transaction does not close and absent a similar or better transaction. Under the proposed transaction, depositors and other creditors, including all senior unsecured, subordinated debt and trust preferred holders, of Wachovia's bank subsidiaries will become depositors and creditors of Citigroup or one of its subsidiaries. If shareholders fail to approve the transaction, absent a competing offer, ratings for most bank obligations would likely deteriorate significantly. Similarly, because in the proposed transaction, Citigroup would assume all senior and subordinated debt of Wachovia Corporation, those obligations are also placed on Rating Watch Evolving. Fitch has placed these ratings on Rating Watch Negative: Citigroup Inc. -- Long-term IDR 'AA-'; -- Individual 'B'; -- Senior unsecured 'AA-'; -- Subordinated/preferred 'A+'; -- Short-term IDR at 'F1+'. Citigroup Funding Inc. -- Long-term IDR 'AA-'; -- Senior unsecured 'AA-'; -- Short-term IDR 'F1+'; -- Short-term debt 'F1+'. Citigroup Global Markets Holdings Inc. -- Long-term IDR 'AA-'; -- Senior unsecured 'AA-'; -- Subordinated 'A+'; -- Short-term IDR 'F1+'; -- Short-term debt 'F1+'. Citibank NA -- Long-term IDR 'AA-'; -- Individual 'B'; -- Long term deposits 'AA'; -- Short-term IDR 'F1+'; -- Short-term deposits 'F1+'. Citibank International PLC -- Long-term IDR 'AA-'; -- Short-term IDR 'F1+'. Citibank (South Dakota) -- Long-term IDR 'AA-'; -- Individual 'B'; -- Long-term deposits 'AA'; -- Short-term IDR 'F1+'; -- Short-term deposits 'F1+'. Citibank Banamex USA -- Long-term IDR 'AA-'; -- Individual 'B'; -- Subordinated 'A+'; -- Long-term deposits 'AA'; -- Short-term IDR 'F1+'; -- Short-term deposits 'F1+'. CitiFinancial Europe plc -- Long-term IDR 'AA-'; -- Senior unsecured 'AA-'; -- Senior shelf 'AA-'; -- Subordinated 'A+'. Citigroup Derivatives Services LLC. -- Long-term IDR 'AA-'; -- Short-term IDR 'F1+'. Citibank Canada -- Long-term IDR 'AA-'; -- Long-term deposits 'AA-'. Egg Banking plc (UK) -- Senior unsecured 'AA-'; -- Subordinated 'A+'. Nikko Citi Holdings Inc. -- Long-term IDR 'AA-'; -- Local Currency LT IDR 'AA-'. -- Short-term IDR 'F1+'; -- Local currency short-term IDR 'F1+'; Nikko Cordial Securities -- Long-term IDR 'AA-'; -- Local Currency LT IDR 'AA-'; -- Short-term IDR 'F1+'; -- Local currency short-term IDR 'F1+'. Citibank Japan, Ltd. -- Long-term IDR 'AA-'; -- Local currency LT IDR 'AA-'; -- Short-term IDR 'F1+'; -- Local currency short-term IDR 'F1+'. Citibank Korea Inc. -- Long-term IDR 'AA-'; -- Subordinated 'A+'; -- Short-term IDR 'F1+'; -- Individual 'B/C'; Citigroup Capital III, IV, V, VI, VII, VIII, IX, X, XIV, XV, XVI, XVII, XVIII, XIX, XX, XXI, XXIX, XXX, XXXI, and XXXII -- Preferred 'A+'. Adam Capital Trust II, III, Adam Statutory Trust I-V -- Preferred 'A+'. Commercial Credit Company -- Senior unsecured 'AA-'. Associates Corporation of North America -- Senior unsecured 'AA-'; -- Subordinated 'A+'. Primerica Life Insurance Company -- IFS 'AA-'. The following ratings remain unchanged: Citigroup Inc. -- Support at '5'; -- Support Floor 'NF'. Citibank NA -- Support '1'; -- Support Floor 'A-'. Citibank International PLC -- Support at '1'. Citibank (South Dakota) -- Support '1'; -- Support Floor 'A-'. Citibank Banamex USA -- Support at '1'; -- Support Floor 'A-'. Citigroup Derivatives Services LLC. -- Support at '1'. Nikko Citi Holdings Inc. -- Support '1'. Nikko Cordial Securities -- Individual 'C'; -- Support '1'. Citibank Japan, Ltd. -- Support '1'. Citibank Korea Inc. -- Individual 'B/C'; -- Support '1'. Fitch has also taken these rating actions on Wachovia and subsidiaries: Wachovia Corporation -- Long-term IDR downgraded to 'BB-' from 'A+' and placed on Rating Watch Negative; -- Short-term IDR downgraded to 'B' from 'F1+' and placed on Rating Watch Negative; -- Short-term debt rating downgraded to 'B' from 'F1+' and placed on Rating Watch Negative; -- Senior long-term debt 'A+' placed on Rating Watch Evolving; -- Subordinated debt 'A' placed on Rating Watch Evolving; -- Preferred stock downgraded to 'B+' from 'A' and placed on Rating Watch Evolving; -- Individual downgraded to 'D' from 'B' and placed on Rating Watch Evolving; -- Support unchanged at '5'; -- Support Floor unchanged at 'NF'. Wachovia Bank, NA -- Long-term IDR 'A+' placed on Rating Watch Evolving; -- Short-term IDR 'F1+' placed on Rating Watch Negative; -- Short-term deposits 'F1+' placed on Rating Watch Negative; -- Long-term deposits 'AA-' placed on Rating Watch Evolving; -- Senior long-term debt 'A+' placed on Rating Watch Evolving; -- Subordinated debt 'A' placed on Rating Watch Evolving; -- Individual 'B' placed on Rating Watch Negative; -- Support unchanged at '2'; -- Support Floor unchanged at 'BBB-'. Wachovia Bank of Delaware, NA -- Long-term IDR 'A+' placed on Rating Watch Evolving; -- Short-term IDR 'F1+' placed on Rating Watch Negative; -- Individual 'B' placed on Rating Watch Negative; -- Support unchanged at '2'; -- Support Floor unchanged at 'BBB-'. Wachovia Mortgage, FSB -- Long-term IDR 'A+' placed on Rating Watch Evolving; -- Short-term IDR 'F1+' placed on Rating Watch Negative; -- Short-term deposits 'F1+' placed on Rating Watch Negative; -- Long-term deposits 'AA-' placed on Rating Watch Evolving; -- Senior long-term debt 'A+' placed on Rating Watch Evolving; -- Individual 'B' placed on Rating Watch Negative; -- Support is unchanged at '2'; -- Support Floor is unchanged at 'BBB-'. Wachovia Bank, FSB (Texas) -- Long-term IDR 'A+' placed on Rating Watch Evolving; -- Short-term IDR 'F1+' placed on Rating Watch Negative; -- Short-term deposits 'F1+' placed on Rating Watch Negative; -- Long-term deposits 'AA-' placed on Rating Watch Evolving; -- Individual 'B' placed on Rating Watch Negative; -- Support is unchanged at '2'; -- Support Floor is unchanged at 'BBB-'. Wachovia Capital Finance Corporation (Canada) (guaranteed by Wachovia Bank, NA) -- Short-term IDR 'F1+' placed on Rating Watch Negative. Congress Financial Capital Company (guaranteed by Wachovia Corporation) -- Long-term IDR 'A+' placed on Rating Watch Evolving; -- Senior long-term debt 'A+' placed on Rating Watch Evolving. Golden West Financial Corporation -- Senior long-term debt 'A+' placed on Rating Watch Evolving. SouthTrust Bank -- Senior long-term debt 'A+' placed on Rating Watch Evolving; -- Subordinated debt 'A' placed on Rating Watch Evolving. First Union National - Florida SouthTrust Corporation Western Financial Bank -- Subordinated debt 'A' placed on Rating Watch Evolving. Wachovia Capital Trust I, II, III, IV, V, IX Central Fidelity Capital Trust I Corestates Capital I, II, III First Union Capital I, II First Union Institutional Capital I, II -- Preferred 'A' placed on Rating Watch Evolving. WACHOVIA CORP: Planned Retail Bank Sale Cues S&P's Negative Watch ----------------------------------------------------------------- Wachovia Corp. intends to sell its retail bank, corporate and investment bank, and wealth-management businesses to Citigroup Inc. The new Wachovia Corp. will remain a public company with two main operating subsidiaries: Wachovia Securities, the nation's third-largest brokerage firm, and Evergreen Asset Management, a leading provider of asset-management services. As a result of this transaction, Standard & Poor's Ratings Services placed all its ratings on Wachovia Corp. and Wachovia Bank on CreditWatch with negative implications. Standard & Poor's also said that it lowered its counterparty credit rating on Wachovia Corp. to 'BBB-/A-3' from 'A+/A-1'. At the same time, Standard & Poor's lowered its DRD Series J and K and convertible preferred stock Series L ratings on Wachovia Corp. to 'BB' from 'A-', as these securities will not be acquired and will continue to reside with the new Wachovia Corp. "We placed the ratings on CreditWatch negative at the same time we placed the ratings on Citigroup on CreditWatch negative," explained Standard & Poor's credit analyst Victoria Wagner. "We could lower the Citigroup ratings up to one notch below the senior debt ratings on Wachovia. We will align the ratings on Wachovia with the Citigroup ratings when the acquisition closes at year end." After the merger, Wachovia Corp. will be a dramatically different company. It will be the parent to one of the U.S.'s largest retail brokerage operations, with client assets of $1.1 trillion and assets under management of $246.5 billion at the end of the second quarter. These remaining businesses of Wachovia Corp. posted core earnings of $983 million in the first half of 2008, before $118 million of market disruption charges and $500 million in legal expenses tied to the settlement of auction rate securities. This dramatic reduction in the earnings profile places increased risk of deferral on the remaining $9.8 billion of rated DRD and convertible preferred securities, which require annual dividends of $765 million. "We will resolve the CreditWatch status of the Wachovia ratings in conjunction with the resolution of the Citigroup ratings," Ms. Wagner added. "When this unique transaction closes, we will assess the final legal terms, business profile, contingent liabilities capitalization, and operating earnings profile of the new Wachovia Corp." WACHOVIA CORP: S&P Puts All Servicer Rankings Under Neg. Watch -------------------------------------------------------------- Standard & Poor's Ratings Services placed all of its Wachovia- related servicer rankings on CreditWatch with negative implications. The affected servicing entities include Wachovia Bank N.A. and Wachovia Mortgage FSB, which are subsidiaries of Wachovia Corp., and Universal Master Servicing LLC, which is owned in part by Wachovia Bank N.A. The CreditWatch negative placements affect: -- S&P's ABOVE AVERAGE residential subordinate-lien ranking on Wachovia Bank N.A.; -- S&P's STRONG residential prime on Wachovia Mortgage FSB; -- S&P's STRONG commercial mortgage primary, master, special, and construction loan servicer rankings on Wachovia Bank N.A.; and -- S&P's AVERAGE residential master servicer ranking on Universal Master Servicing LLC. The CreditWatch negative placements follow Citigroup Inc.'s purchase of Wachovia Corp., the banking operations of Wachovia Bank N.A., and the corporation's subsidiaries, and reflect the uncertainties surrounding the future of the Wachovia-related servicing operations. It is currently difficult to assess what the near-term and ultimate impact, if any, to the loan servicing businesses and operations will be. However, Standard & Poor's will continue to monitor the situation and comment as developments unfold. WASHINGTON MUTUAL: Effects Conditional Exchange of Pref Securities ------------------------------------------------------------------ Washington Mutual, Inc. said that an "Exchange Event" has occurred under the applicable documents governing these securities: -- Washington Mutual Preferred (Cayman) I Ltd. 7.25% Perpetual Non-cumulative Preferred Securities, Series A- 1 (to be exchanged into depositary shares representing Series J Perpetual Non-Cumulative Fixed Rate Preferred Stock of WMI); -- Washington Mutual Preferred (Cayman) I Ltd. 7.25% Perpetual Non-cumulative Preferred Securities, Series A- 2 (to be exchanged into depositary shares representing Series J Perpetual Non-Cumulative Fixed Rate Preferred Stock of WMI); -- Washington Mutual Preferred Funding Trust I Fixed-to- Floating Rate Perpetual Non-cumulative Trust Securities (to be exchanged into depositary shares representing Series I Perpetual Non-Cumulative Fixed-to-Floating Rate Preferred Stock of WMI); -- Washington Mutual Preferred Funding Trust II Fixed-to- Floating Rate Perpetual Non-cumulative Trust Securities (to be exchanged into depositary shares representing Series L Perpetual Non-Cumulative Fixed Rate Preferred Stock of WMI); -- Washington Mutual Preferred Funding Trust III Fixed-to- Floating Rate Perpetual Non-cumulative Trust Securities (to be exchanged into depositary shares representing Series M Perpetual Non-Cumulative Fixed Rate Preferred Stock of WMI); and -- Washington Mutual Preferred Funding Trust IV Fixed-to- Floating Rate Perpetual Non-cumulative Trust Securities (to be exchanged into depositary shares representing Series N Perpetual Non-Cumulative Fixed-to-Floating Rate Preferred Stock of WMI). In connection with the Exchange Event, WMI will effect an exchange (Conditional Exchange) of the Securities into depositary shares representing a like amount of preferred stock in WMI, as contemplated by the applicable documents governing the securities. In accordance with the terms of the documents governing the Securities, the Conditional Exchange of the Securities w[as to] occur on September 26, 2008. As of the time of the Conditional Exchange, each outstanding Security will be exchanged automatically for a like amount of newly issued Fixed Rate Depositary Shares or newly issued Fixed-to-Floating Rate Depositary Shares, as applicable, each representing a 1/1000th interest in one share of the applicable series of preferred stock of WMI. WMI will mail the notice required under the applicable documents to each holder of record of Securities within 30 days, and WMI will deliver or cause to be delivered to each such holder of record depositary receipts for the Fixed Rate Depositary Shares and Fixed-to-Floating Rate Depositary Shares upon surrender of the Securities. Until such depositary receipts are delivered or in the event such depositary receipts are not delivered, any certificates previously representing Securities will be deemed for all purposes, effective as of 8:00 AM New York time on September 26, 2008, to represent Fixed Rate Depositary Shares or Fixed-to-Floating Rate Depositary Shares, as applicable. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank 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. Washington Mutual Bank was taken over Sept. 25 by U.S. government regulators. The next day, WaMu and its debtor-affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. Bloomberg notes that WaMu's debt ranks it among the largest U.S. bankruptcies by indebtedness. Lehman Brothers Holdings' bankruptcy filing on Sept. 15 is the largest, with $613 billion in debt. WorldCom Inc., the telecommunications firm that filed for protection in 2002 after accounting malfeasance was disclosed, listed $41 billion in debt in what's now the second-largest Chapter 11 case, according to Bloomberg. WASHINGTON MUTUAL: Moody's Confirms 31 Ratings After JPMorgan Deal ------------------------------------------------------------------ Moody's Investors Service has confirmed the ratings on 31 classes of credit card receivable-backed securities issued by the Washington Mutual Master Note Trust and the Washington Mutual Master Trust. The affected classes of notes are: Ratings Confirmed Issuer: Washington Mutual Master Note Trust -- $775,000,000 Floating Rate Class 2005-A2 Asset Backed Notes, rated A1 -- $125,000,000 Floating Rate Class 2005-M2 Asset Backed Notes, rated A3 -- $150,000,000 Fixed Rate Class 2005-B2 Asset Backed Notes, rated Baa3 -- $150,000,000 Floating Rate Class 2005-C2 Asset Backed Notes, rated Ba2 -- $900,000,000 Floating Rate Class 2006-A1 Asset Backed Notes, rated A1 -- $750,000,000 Floating Rate Class 2006-A2 Asset Backed Notes, rated A1 -- $1,250,000,000 Floating Rate Class 2006-A3 Asset Backed Notes, rated A1 -- $500,000,000 Floating Rate Class 2006-A4 Asset Backed Notes, rated A1 -- $300,000,000 Floating Rate Class 2006-M1 Asset Backed Notes, rated A3 -- $200,000,000 Fixed Rate Class 2006-B1 Asset Backed Notes, rated Baa3 -- $200,000,000 Floating Rate Class 2006-C1 Asset Backed Notes, rated Ba2 -- $150,000,000 Floating Rate Class 2006-C2 Asset Backed Notes, rated Ba2 -- $200,000,000 Floating Rate Class 2006-C3 Asset Backed Notes, rated Ba2 -- $1,100,000,000 Floating Rate Class 2007-A1 Asset Backed Notes, rated A1 -- $875,000,000 Floating Rate Class 2007-A2 Asset Backed Notes, rated A1 -- $425,000,000 Fixed Rate Class 2007-A4 Asset Backed Notes, rated A1 -- $200,000,000 Floating Rate Class 2007-A5 Asset Backed Notes, rated A1 -- $150,000,000 Fixed Rate Class 2007-B1 Asset Backed Notes, rated Baa3 -- $125,000,000 Floating Rate Class 2007-C1 Asset Backed Notes, rated Ba2 -- Class 2005-D2 Variable Funding Asset Backed Notes, rated B3 -- Class 2007-C2 Variable Funding Asset Backed Notes, rated Ba2 Issuer: Washington Mutual Master Trust -- Class D Certificates, Variable Funding Series 2004-G, rated Ba2 -- Class E Certificates, Variable Funding Series 2004-G, rated B3 -- Class A Certificates, Variable Funding Series 2007-A, rated A1 -- Class B Certificates, Variable Funding Series 2007-A, rated A3 -- Class C Certificates, Variable Funding Series 2007-A, rated Baa3 -- Class D Certificates, Variable Funding Series 2007-A, rated Ba2 -- Class A Certificates, Variable Funding Series 2007-B, rated A1 -- Class B Certificates, Variable Funding Series 2007-B, rated A3 -- Class C Certificates, Variable Funding Series 2007-B, rated Baa3 -- Class D Certificates, Variable Funding Series 2007-B, rated Ba2 Rationale Moody's confirmation follows the September 25, 2008 purchase of substantially all of the assets and the assumption of all the deposits and certain other liabilities of the thrift subsidiaries of Washington Mutual Inc. by JPMorgan Chase & Co ("JPM", senior debt at Aa2) in a transaction facilitated by the Federal Deposit Insurance Corporation. Included in the liabilities acquired by JPM are the securities issued by Washington Mutual Bank's credit card trusts. This rating action concludes Moody's review for downgrade announced on September 25 (prior to the JPM acquisition announcement). Immediately prior to the purchase, the Office of Thrift Supervision closed WaMu and appointed the FDIC as the receiver. In a statement issued on the same day, the FDIC disallowed the Trust's early amortization event tied to receivership citing the Federal Deposit Insurance Act, which prohibits the exercise of such contractual or other rights in order to promote an orderly resolution of insured depository institutions. JPM's acquisition of WaMu's credit card operations has allayed Moody's concern of an imminent, inefficient and disorderly liquidation of the credit card receivables. JPM's experience in acquiring, integrating, and effectively managing credit card programs affords a degree of confidence in their stated intent to "convert credit card business to the Chase brand and technology platforms over the next two years." Even so, the current ratings reflect Moody's view that the current economic environment makes certain risk elements of WaMu's credit card program more vulnerable to significant performance deterioration. The credit card portfolio is characterized by sub- and near-prime accounts with geographic concentrations in states that have been most negatively impacted by housing-related economic factors. Given these characteristics, and its current performance, the future profitability of the current portfolio is in doubt. JPMorgan Chase and Co.'s headquarters are in New York City. Its reported assets as of June 30, 2008 were $1.8 trillion. WASHINGTON MUTUAL: S&P Puts Rtngs on Var. Classes Under Dev. Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on various classes of certificates and notes issued by Washington Mutual Master Trust's series 2007-B and Washington Mutual Master Note Trust on CreditWatch with developing indications. The CreditWatch placements follow the placement of Washington Mutual Bank into receivership by the FDIC and the simultaneous sale of the bank to JPMorgan Chase & Co. (JPM; AA-/Negative/A-1+). As a result of the sale, a subsidiary of JP Morgan Chase & Co. will assume the role of seller and servicer for WaMu's trust receivables, although the exact subsidiary is still unknown. In addition, the FDIC has stated that the early amortization event, triggered by the bank's insolvency, is prohibited by law "in order to promote an orderly resolution of insured depository institutions," referencing the Federal Deposit Insurance Act. Chase's acquisition of Washington Mutual's credit card business can be viewed as a positive development given its experience integrating credit card portfolios, servicing credit card receivables, as well as its ability to continue originating and transferring new receivables to the trust. However, as is the case with any servicing transfer, the possibility exists for a near-term disruption of collections, which could weigh on trust performance. In addition, Chase's management has mentioned a possible "run-off" of some of the credit card receivables, namely those in the subprime space, which could also affect trust performance. Standard & Poor's will continue to monitor the developments surrounding the sale of WaMu, the effects of the servicing transfer, and the impact the transfer will have on credit card operations and trust performance. S&P does not expect any resulting rating actions to involve changes of more than one category in either direction, and S&P plans to have the CreditWatch placements resolved within 90 days. Ratings Placed on Creditwatch Developing Washington Mutual Master Trust Rating ------ Series Class To From ------ ----- -- ---- 2007-B A AA/Watch Dev AA 2007-B B A+/Watch Dev A+ 2007-B C A-/Watch Dev A- 2007-B D BB+/Watch Dev BB+ Washington Mutual Master Note Trust Rating ------ Class To From ----- -- ---- A AA/Watch Dev AA M A+/Watch Dev A+ B A-/Watch Dev A- C BB+/Watch Dev BB+ WASTE SERVICES: Moody's Affirms Ratings; Changes Outlook to Pos. ---------------------------------------------------------------- Moody's Investors Service affirmed the B2 corporate family and probability of default ratings of Waste Services, Inc., the Caa1 rating on Waste Services' $160 million of senior subordinated notes due 2014 and the SGL-3 speculative grade liquidity rating. Moody's also changed the outlook to positive from stable and assigned a Ba3 rating to the planned new $300 million first lien senior secured credit facility due 2013 that will fund the refinancing of WSII's existing credit facility, which it announced on Sept. 26, 2008. Moody's will withdraw the Ba3 rating on the company's existing credit facility upon its termination. The change in outlook to positive reflects Moody's belief that WSII can sustain the recent improvements in credit metrics that it achieved from its increasing scale, exits from certain weaker performing operations and the $42 million, March 2008 repayment on the existing term loan. Profit margins, leverage and operating cash flow metrics at June 30, 2008 have improved to levels indicative of corporate families rated higher than B2. Trailing 12 months' EBIT to Interest of 1.4 times remains below levels indicative of the B1 rating category; however, Moody's anticipates interest coverage to improve in upcoming periods. WSII funded the March 2008 debt repayment from the proceeds of the sale of its Jacksonville, Florida assets. The B2 corporate family rating reflects the expectation that WSII's current operations and disposal asset base should sustain funds from operations at levels that comfortably cover debt service obligations, notwithstanding the current pressure on roll- off volumes, particularly in its Florida operations. The ratings benefit from the solid waste sector's typical resistance to recessionary pressures and WSII's demonstrated ability to achieve price increases that more than mitigate the combination of weaker volumes and cost inflation, particularly for fuel. Liquidity is adequate, primarily because of cash on hand, expectations of at least $25 million of availability under the revolving credit, which will mature in 2013 and adequate cushions with financial covenants. The ratings could be upgraded if WSI sustains EBIT to Interest above 1.7 times, free cash flow to debt above 2.0% or retained cash flow to net debt above 18%. The outlook could be returned to stable or the ratings directly downgraded if EBIT to interest fell below 1.1 times, if Debt to EBITDA surpasses 5.0 times or if WSI sustains negative free cash flow. Additional debt-funded acquisitions that increase leverage or reduce cushions with required financial covenants could also weigh on the positive outlook. Moody's prior rating action on Waste Services occurred on April 2, 2007, when it upgraded the corporate family and probability of default ratings to B2 from B3. Assignments: Issuer: Waste Services (CA) Inc. -- Senior Secured Bank Credit Facility, Assigned a range of 27 - LGD2 to Ba3 Issuer: Waste Services, Inc. -- Senior Secured Bank Credit Facility, Assigned a range of 27 - LGD2 to Ba3 Outlook Actions: Issuer: Waste Services, Inc. -- Outlook, Changed To Positive From Stable LGD Assessments: Issuer: Waste Services, Inc. -- Senior Subordinated, Changed To 82-LGD5 from 84-LGD5 Ratings to Be Withdrawn: Issuer: Waste Services, Inc. -- Senior Secured Bank Credit Facility, Assigned a range of 31 - LGD3 to Ba3 Waste Services, Inc., headquartered in Burlington, Ontario, Canada, is a vertically integrated provider of solid waste management services. The company operates in the U.S. in central and southern Florida and in Canada in Ontario, Alberta, Saskatchewan and British Columbia. WCA WASTE: Moody's Affirms 'B3' Rating on $150MM Sr. Secured Notes ------------------------------------------------------------------ Moody's Investors Service affirmed the B1 corporate family and probability of default ratings of WCA Waste Corporation and the B3 rating on WCA's $150 million of senior unsecured notes due 2014. Moody's lowered its Speculative Grade Liquidity Rating to SGL-3 from SGL-2 and changed the outlook to negative. The affirmation reflects WCA's supportive leverage and cash flow profile for the B1 corporate family rating, which it has maintained while executing its acquisitive growth strategy. However, the Debt Service Ratio covenant of the company's credit agreement steps up to 1.5 times at the Sept. 30, 2008 measurement date. The resultant level of cushion is only modest, which could pressure the ability to maintain compliance in the event of a modest decline in EBIT or a significant increase in debt that could result from additional acquisitions, and results in the change to the SGL rating. The change in outlook to negative reflects the decline in the cushion of this financial covenant and also the decline, since December 31, 2007, in EBIT to Interest coverage to below 1.4 times, to a level indicative of corporate families rated below B1. High fuel costs and the lag in timing of recovery through fuel surcharges have negatively impacted earnings and Moody's believes WCA may operate at this lower coverage level beyond the near term. There is also the potential of declining collection and disposal volumes and, or the loss of the ability to maintain core price increases near recent levels that could result from a further, broader weakening of U.S. economic activity, which could pressure margins. The B1 corporate family rating reflects the expectation that WCA's collection and disposal operations should produce a level of funds from operations that covers debt service obligations with meaningful cushion. Although a small company with annual revenues of about $200 million, WCA has achieved an EBITDA margin that rivals those of its much larger industry peers and has also been a steady generator of a modestly positive level of free cash flow. WCA's stated goal to double its size by 2012 constrains the rating to the single-B rating category. Moody's expects the company's acquisitive growth strategy to lead to higher debt levels, which could temper potential improvements in credit metrics including interest coverage measures. Profit margins and cash flow metrics are at levels that could imply a higher rating; however, interest coverage metrics are weak for the B1-rating category. Liquidity is adequate. The ratings could be downgraded if WCA is unable, over the near term, to reverse the recent decline in EBIT to Interest, to return this metric to above 1.4 times. Debt to EBITDA that approaches 4.7 times or less than breakeven free cash flow could also lead to a downgrade of the ratings, as could a decline in the cushion with financial covenants. The outlook could be returned to stable if WCA was to demonstrate the ability to sustain EBIT to Interest above 1.5 times or Debt to EBITDA below 3.8 times while executing its strategy to again double its size by the end of 2012. Moody's prior rating action on WCA occurred on June 20, 2006, when it upgraded the corporate family rating to B1 from B2. Downgrades: Issuer: WCA Waste Corporation -- Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 Outlook Actions: Issuer: WCA Waste Corporation -- Outlook, Changed To Negative From Stable WCA Waste Corporation, based in Houston, Texas, is a vertically integrated provider of non-hazardous solid waste management services. WELLMAN INC: Selling Eng'g. Resins Biz, Other S.C. Assets --------------------------------------------------------- Wellman Inc. entered into a letter of intent to sell its Engineering Resins business and other assets located on its Johnsonville, South Carolina site to an investor group that specializes in turnarounds and renewable energy businesses and is known for its commitments to long term investing. Terms of the transaction were not disclosed, but the deal is expected to close shortly after the completion of a definitive agreement and due diligence, and after the receipt of bankruptcy court approval. The investor group, which includes JHW Greentree Capital, an affiliate of J.H. Whitney & Co., GarMark Partners and Westwind Equity Partners, has already made a significant commitment to recycled PET through their investment in New Horizon Plastics Recycling, which is one of the producers of recycled PET serving the bottling and other industries. "We are very pleased to have executed a letter of intent to sell our Engineering Resins Division and the entire Johnsonville site, Mark Ruday, Wellman, Inc.'s chief executive officer stated. "The sale needs to proceed with urgency and is scheduled to close in the middle of October. During the sale process, Wellman expects to continue to service its customers. Wellman believes the sale is in its best interests and the best interests of its estates and its stakeholders and will bring in more value than a liquidation. More importantly, Wellman believes the sale would benefit the approximately 160 Johnsonville employees well as the town of Johnsonville, its school system and its water treatment facility." "For decades, Wellman's Johnsonville facility has been a leader in plastic recycling," Robert Fotsch, CEO of New Horizons, who would also become CEO of the Wellman-Johnsonville assets, said. "Assuming we are able to complete the transaction, we plan to make the necessary investments and to support the high quality team in Johnsonville in order to reestablish Johnsonville's leadership in both Engineering Resins and recycled PET so that it remains a critical partner to companies in the automotive, bottling and other industries. Given the high cost of oil, the products produced at Wellman's Johnsonville's facility are a very attractive alternative to high priced virgin plastics." "This is a fantastic opportunity for our Engineering Resins business, our employees, customers and the surrounding community," Robert Taylor, vice-president of Engineering Resins, said. "With the financial backing and commitment of our new partners, we expect to have the resources to expand our Engineering Resins operation and restart the PET bottle recycling operation. It is also a great feeling to work with this investor group to save jobs at the Johnsonville site." About Assets at Wellman's Johnsonville Facility The Engineering Resins business has the capacity to produce over 70 million pounds per year of engineered plastics, which is used in a variety of applications including automotive, lawn and garden, and electronics. Other assets include a 235 million pound polyester staple fiber plant and a 190 million pound PET bottle recycling operation, which will be used in the bottling industry, but has applications for other areas. About Wellman Inc. Headquartered in Fort Mill, South Carolina, Wellman Inc. ([OTC]: WMANQ.OB) -- http://www.wellmaninc.com/-- manufactures and markets packaging and engineering resins used in food and beverage packaging, apparel, home furnishings and automobiles. It manufactures resins and polyester staple fiber. The company and its debtor-affiliates filed for Chapter 11 protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No. 08-10595). Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in New York City, represents the Debtors. Lazard Freres & Co., LLC, acts as the Debtors' financial advisors and investment bankers. Conway, Del Genio, Gries & Co., LLC, was also retained as the Debtors' chief restructuring advisor. The United States Trustee for Region 2 has appointed seven members to the Official Committee of Unsecured Creditors. Mark R. Somerstein, Esq., at Ropes & Gray LLP, serves as the Committee's bankruptcy counsel. FTI Consulting, Inc., acts as the panel's financial advisors. Wellman Inc., in its bankruptcy petition, listed total assets of $124,277,177 and total liabilities of $600,084,885, as of Dec. 31, 2007, on a stand-alone basis. Debtor-affiliate ALG, Inc., listed assets of between $500 million and $1 billion on a stand-alone basis at the time of the bankruptcy filing. Debtor-affiliates Fiber Industries Inc., Prince Inc., and Wellman of Mississippi Inc., listed assets of between $100 million and $500 million at the time of their bankruptcy filings. On a consolidated basis, Wellman Inc., and its debtor-affiliates listed $512,400,000 in total assets and $730,500,000 in liabilities as of June 30, 2008. Wellman filed a restructuring plan before the Bankruptcy Court on June 25, 2008. WENDY'S INTERNATIONAL: Triarc Merger Cues S&P to Take Rtng Actions ------------------------------------------------------------------ Standard & Poor's Ratings Services took various rating actions as a result of the consummation of the merger between Triarc Cos. Inc. and Wendy's International Inc. The new entity will be called Wendy's/Arby's Restaurant Group Inc. The rating actions are: S&P assigned Wendy's/Arby's a 'B+' corporate credit rating. The outlook is stable. S&P lowered the corporate credit rating on Wendy's one notch to 'B+' from 'BB-' and removed all ratings on Wendy's from CreditWatch with negative implications, where they were placed on April 26, 2007. The outlook is stable. S&P assigned a '4' recovery rating to the company's senior unsecured notes. The '4' recovery rating indicates its expectation of average (30%-50%) recovery in the event of default and also dictates that the senior unsecured issue rating be un- notched from the corporate credit rating. Consequently, S&P lowered the senior unsecured rating and issue-level rating on those notes to 'B+' from 'BB-'. S&P removed the ratings on Arby's Restaurant Group Inc., a subsidiary of Wendy's/Arby's, from CreditWatch with developing implications, where they were placed on April 22, 2008, and affirmed the 'B+' corporate credit rating on Arby's. The outlook is stable. S&P revised the recovery rating on Arby's senior secured credit facility to a '2' from a '1'. The '2' recovery rating indicates S&P's expectation of substantial (70%-90%) recovery in the event of default. As a result of the revised recovery rating, S&P lowered the issue-level rating of Arby's senior secured credit facility one notch to 'BB-' from 'BB'. "The stable outlook reflects our expectation that Wendy's/Arby's will maintain appropriate credit metrics for the rating category and liquidity despite Arby's narrow covenant cushion," said Standard & Poor's credit analyst Charles Pinson-Rose. WERNER LADDER: Trust Obtains Protection for Confidential Documents ------------------------------------------------------------------ Old Ladder Litigation Co. LLC, as the Litigation Designee on behalf of the Litigation Trust, on the one hand, and Investcorp Bank B.S.C., and other defendants named in the $1,000,000,000 damage lawsuit, on the other hand, sought and obtained approval from the U.S. District Court for the Southern District of New York of a stipulated protective order regarding discovery materials and confidential documents. The Litigation Designee told the Court that pursuant to Rule 26(c) of the Federal Rules of Civil Procedure, the Protective Order will facilitate the prompt resolution of disputes over confidentiality and protect Discovery Materials entitled to confidentiality. Among other things, the Protective Order provides for the limitation of the disclosure of Discovery Materials that or confidential of nature to parties involved in the Litigation and for issues relating to the Litigation. Confidential Documents and Confidential Information may only be disclosed by each Party and its counsel to these Qualified Persons: (1) the Court and its support personnel; (2) counsel to the Parties to the Litigation; (3) Court reporters and videographers engaged to record testimony in the Litigation; (4) officers and employees of the Parties as counsel to the Parties; (5) experts or consultants and their staff assisting in the investigation, prosecution or defense of the Litigation; (6) any person required to testify as a witness at a deposition or trial; (7) any third-party mediator, settlement judge, or arbitrator selected by the Parties or assigned by the Court; and (8) any other person agreed to by the Producing Party. All documents of any nature that contain Confidential Documents and Confidential Information that are filed in Court will be filed in sealed envelopes and marked with the caption of the Litigation, the words Confirmation Information and stating that: "This envelope contains Confidential Documents or Confidential Information which were filed in the action, Old Ladder Litigation Co., LLC v. Investcorp Bank B.S.C., et al., Case No. 08-0876, pending in the United States District Court for the Southern District of New York, pursuant to a Protective Order, and is not to be opened or the contents to be displayed or revealed, except by further order of the Court." At the conclusion of the Litigation, all Confidential Documents and Confidential Information and all of their copies will be returned to the Producing Party at its expense, or the receiving Parties will destroy all of the Confidential Documents and Information and certify in writing that the destruction has been effected. In a separate order, the Court extended the deadline for some Defendants to file responses to the First Amended Complaint from September 8, 2008, until 30 days after a decision on the pending requests to dismiss the Complaint is made. Ciardi Replaces Fox Rothschild as Litigation Designee's Counsel The Litigation Designee informed the Court that the law firms Ciardi Ciardi & Astin P.C., and Dombush Schaeffer Strongin & Veneglia, LLP, will substitute Fox Rothschild LLP as special counsel to the Litigation Designee in its claims against Investcorp. William F. Costigan, Esq., at Dombush Schaeffer Strongin & Veneglia, LLP, in a declaration, stated that the substitution of counsel eventuates from the withdrawal of Daniel K. Astin, Esq., from the Fox Rothschild firm and his becoming a principal at Ciardi Ciardi & Astin, P.C. About Werner Ladder Based in Greenville, Pennsylvania, Werner Holding Co. (DE) Inc. aka Werner Ladder Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The Debtors are represented by the firm of Willkie Farr & Gallagher LLP as lead counsel and the firm of Young, Conaway, Stargatt & Taylor LLP as co-counsel. Rothschild Inc. is the Debtors' financial advisor. The Official Committee of Unsecured Creditors is represented by the firm of Winston & Strawn LLP as lead counsel and the firm of Greenberg Traurig LLP as co-counsel. Jefferies & Company serves as the Creditor Committee's financial advisor. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. Earlier, on June 19, 2007, the Creditors Committee submitted its Liquidating Plan and Disclosure Statement for Werner. On Sept. 10, 2007, the Committee filed an Amended Plan and Disclosure Statement. On Sept. 13, 2007, the Committee filed its 2nd Amended Plan and on September 14, the Court approved the adequacy of the Amended Disclosure Statement explaining the 2nd Amended Plan. The Court confirmed the 2nd Amended Plan on October 25. New Werner Holding Co. (DE), LLC, a newly formed corporation, purchased substantially all the Debtors' assets in 2007. New Werner is a separate operating company. (Werner Ladder Bankruptcy News, Issue No. 56; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). XERIUM TECHNOLOGIES: S&P Lifts Rating to 'B-'; Outlook Stable ------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on Xerium Technologies Inc., including raising the long-term corporate credit rating to 'B-' from 'CCC+'. The outlook is stable. "The upgrade is based on the increased likelihood that Xerium will satisfy its covenants in the fourth quarter and maintain adequate liquidity in the near term," said Standard & Poor's credit analyst Sarah Wyeth. The ratings on Youngsville, North Carolina-based Xerium reflect the company's highly leveraged balance sheet, its limited liquidity, its modest size as a supplier to niche markets, and its dependence on the papermaking industry, all of which limit the company's organic growth potential. Partly mitigating these weaknesses are the company's good operating margins, its geographic diversity, and the strong competitive position of its niche product. Xerium, with revenues of about $650 million, operates in two business segments: clothing, in the form of synthetic textile belts that transport paper through papermaking machines, and roll covers, which provide covering surface for large steel cylinders between which paper travels in those machines. Clothing represented roughly 65% of revenue in the six months ending June 30, 2008, and roll covers the remainder. These consumables play key roles in the process of converting raw material into paper, and customers prefer local, reliable, and long-standing suppliers. Pricing, while not the key buying decision, has grown increasingly competitive recently. However, this has not affected Xerium's large market shares substantially. The recent amendment to Xerium's credit agreement has alleviated short-term liquidity pressures. S&P could revise the outlook to positive and potentially raise the ratings if the company can maintain operating margins of at least 23%, continue to generate positive free operating cash flow, and be expected to maintain an EBITDA cushion of 20% in its leverage covenant for the foreseeable future. However, Standard & Poor's notes that Xerium's end markets continue to be challenging and competitive. If EBITDA declines more than 5% from its current level and the company does not reduce debt in excess of mandatory payments, the leverage covenant could become tight in 2010 and S&P could revise the outlook to negative or lower the rating. X-RITE INC: Shareholders to Vote on Incentive Plan on October 28 ---------------------------------------------------------------- X-Rite Incorporated filed with the U.S. Securities & Exchange Commission a definitive proxy statement relating to certain proposals and disclosed that a special meeting of X-Rite's shareholders will be held on Oct. 28, 2008, at 8:30 a.m., Central Time, at the offices of: McDermott Will & Emery LLP 227 West Monroe Street Chicago, IL 60606 At the special meeting, X-Rite's shareholders of record as of the Sept. 22, 2008, record date will be asked to approve these proposals: Proposal 1: The issuance to OEPX LLC, a Delaware limited liability company managed by One Equity Partners, Sagard Capital Partners L.P. and Tinicum Capital Partners II L.P., Tinicum Capital Partners II Parallel Fund L.P. and Tinicum Capital Partners II Executive Fund L.L.C. of an aggregate of 46,904,763 shares of the company's common stock, in exchange for an aggregate purchase price of $155 million in cash. Proposal 2: The approval of the X-Rite, Incorporated 2008 Omnibus Long Term Incentive Plan. The board of directors of X-Rite believes that Proposals 1 and 2 are in the best interest of X-Rite and its shareholders and, therefore, unanimously recommends that X-Rite's shareholders vote "FOR" Proposals 1 and 2 at the special meeting. Shareholders can vote their shares via the Internet, by telephone, by mail or by written ballot at the special meeting. Shareholders whose shares are held in "street name" must instruct their brokers how to vote their shares using the instructions provided by their brokers. About X-Rite X-Rite Incorporated (NASDAQ:XRIT) -- http://www.xrite.com/-- including unit Pantone Inc., develops, manufactures, markets and supports innovative color solutions through measurement systems, software, color standards and services. X-Rite serves a range of industries, including printing, packaging, photography, graphic design, video, automotive, paints, plastics, textiles, dental and medical. * * * As reported in the Troubled Company Reporter on Aug. 27, 2008, Standard & Poor's Ratings Services revised its CreditWatch on X- Rite Inc. to positive from developing. On Aug. 20, 2008, X-Rite Inc. (CCC+/Watch Pos/--) announced that it had signed a forbearance and new lender agreement and investor agreements that include a plan to substantially reduce debt, primarily through the issuance of $155 million in common equity to new and certain existing shareholders. The agreement also provides the company with access to up to $10 million on its revolving credit agreement. ZAP IMPORT: Lender Westernbank Wants Chapter 11 Case Dismissed -------------------------------------------------------------- Westernbank Puerto Rico, secured creditor of Zap Import & Export Inc., asks the U.S. Bankruptcy Court for the District of Puerto Rico to dismiss the Debtor's Chapter 11 case or as an alternative, convert it to a Chapter 7 proceeding. Westernbank tells the Court that it filed a motion to lift automatic stay due to the Debtor's possible concealment of assets, and failure to segregate and account for cash collateral subject to Westernbank's security interest; and the Debtor's continued refusal to permit an audit of its books and records under various loan agreements between the Debtor and Westernbank. According to Westernbank, the Debtor transferred $1,300,000 in inventory, to its affiliate Pit Stop, Auto Body Parts Store and More Corp., financed by another lender, Banco Popular. Westernbank alleges that the transfer was not in the ordinary course of business, but the full story will not be known until Westernbank is permitted to see the Debtor's records. However, the transaction does not appear in the Debtor's petition or schedules. Unless the price was paid the transaction should appear as an account receivable or liquidated debt owed to the Debtor, or other unliquidated or liquidated claim. If in fact the transfer occured and does not appear in any Court documents, the case should be dismissed or converted to Chapter 7 or an examiner appointed to file complete and accurate schedules. The lender, in addition, objects to the inventory disclosure which shows an inventory valued at $1,425,990 without any detail. Based in San Juan, Puerto Rico, Zap Import & Export Corp. imports and exports motor vehicle supplies and new parts. The company filed for Chapter 11 protection on Sept. 3, 2008 (Bankr. D. P.R. Case No. 08-05799). Winston Vidal Gambaro, Esq., represents the Debtor. The Debtor's Schedules listed assets of $11,056,928 and liabilities of $11,161,127. * Fitch Changes U.S. Life Insurance' Outlooks to Neg. from Stable ----------------------------------------------------------------- Fitch Ratings has revised its Outlook for the U.S. life insurance sector to Negative from Stable, reflecting the significant deterioration in the credit and equity markets, and the expected impact of realized and unrealized investment losses on life insurers' capital levels and profitability. The Negative Outlook also reflects ongoing concern regarding the industry's expanding equity market exposure driven by growth in variable annuities, market performance guarantees which can add significant volatility to financial performance and capital in a period of unstable market conditions. Finally, for some life insurers, Fitch is concerned that liquidity pressures could develop if capital markets remain unstable and funding needs can not be met. Fitch's movement to a negative industry outlook implies that over the next 12-to-18 months, Fitch expects more downgrades than upgrades across the U.S. life insurance industry. However, it does not imply that all, or even a majority, of life insurers' ratings will necessarily be downgraded. Life insurers most exposed to rating pressures include companies with: -- above-average exposure to residential mortgage-related investments or below-investment grade bonds; -- above-average exposure to variable annuities; -- above-average exposure to products or business activities reliant on institutional funding (such as securities lending programs, or products such as guaranteed investment contracts with ratings triggers); and/or -- limited excess capital relative to prior rating expectations. The dramatic downturn in the U.S. housing market, which has led to significant losses to mortgage-related investments, has prompted a financial crisis among major U.S. financial institutions, market illiquidity, and a wholesale repricing of credit risk. While less exposed to these market issues than many investment banks, commercial banks, or financial guarantors, life insurers are experiencing a significant deterioration in investment results, which has negatively impacted industry earnings and capital. In first half-2008, Fitch's universe of life insurers reported combined statutory net income of $2.2 billion compared to $28.6 billion for full year 2007. Fitch expects statutory earnings to deteriorate further in the second half of 2008 and into 2009 driven by increased investment losses. Likewise, GAAP results have exhibited similar declining trends, which are expect to continue in 2H'08 and into 2009. In particular, Fitch projects a significant deterioration in variable annuity results driven by deferred acquisition cost write-downs, declining asset balances, increased reserving for guaranteed benefits, and higher hedging costs. In addition, Fitch expects the deterioration in industry statutory capital levels, which declined an estimated 4% in 1H'08, will accelerate in 2H'08. This will be heavily driven by greater recognition of unrealized investment losses as 'other than temporary', prompting impairment-related write-downs. Fitch believes a number of life insurers have been slow to recognize investment impairments against statutory capital, and that such recognition will pick up markedly in the second half of 2008. Despite the pressures, Fitch notes that the U.S. life insurance industry is relatively well-positioned to weather an environment of capital markets volatility and market illiquidity. The industry's risk-based capital position was very strong going into 2008, with many companies holding capital at levels close to or above the 'AAA' threshold based on Fitch's economic capital model. A select number of life insurers have material liquidity exposures via large debt maturities, reliance on commercial paper, short- term bank letters of credit, securities lending programs, short- term funding agreements or ratings triggers on products such as municipal GICs. These insurers are most susceptible to sudden changes in their creditworthiness and financial strength, as well as multi-notch ratings downgrades, should their liquidity pressures heighten. However, most life insurers have limited liquidity exposures, which should mitigate the impact of current market illiquidity across the industry. In addition, a vast majority of life insurers avoided investments in collateralized debt obligations backed by residential mortgage backed securities, and most have little or no activity in the credit default swap market. Fitch notes that the U.S. Government has embarked on a broad-based plan to bring stability to the financial markets and provide a market for troubled assets via the establishment of an up to $700 billion fund to support the purchase of troubled assets. It is not clear how effective this program will be and how it will impact the life insurance industry, but a positive outcome could lessen some of the industry pressures. * Fitch Says Liquidity Solid for Most U.S. Media Companies ---------------------------------------------------------- Fitch Ratings has published an in-depth analysis of media & entertainment sector liquidity titled 'Liquidity Focus: U.S. Media & Entertainment'. Fitch has stated in previous reports that as Lehman Brothers lending capacity is withdrawn; overlapping exposure of Bank of America/Merrill Lynch and Citigroup/Wachovia are addressed; and as possibly more institutions are merged, the systemic reduction in lending capacity could exacerbate the already tight conditions resulting from the credit crisis. The report released today emphasizes that due to these factors, Fitch's ratings and analysis of corporate liquidity are weighted more heavily toward internal sources of funds: cash holdings and cash generated from operations. Key conclusions include: -- Liquidity for the media & entertainment sector is generally healthy, with latest 12 months (LTM) free cash flow, as of June 30, 2008, of $18.1 billion and balance-sheet cash of $21.0 billion. Assuming LTM free cash flow is a proxy for future free cash flow, internal liquidity exceeds 2008, 2009 and 2010 maturities of $6.2 billion (includes any commercial paper borrowings), $10.2 billion and $12.4 billion, respectively. -- Not surprisingly, the major conglomerates -- including The Walt Disney Company (Disney), News Corporation (News Corp.), Time Warner Inc. (Time Warner) and Viacom Inc. (Viacom) -- are currently the best positioned to weather the current financial market conditions, as these companies benefit from strong and stable operating liquidity, diversity of revenues (non-advertising), meaningful amounts of capacity in the form of cash on hand and revolver availability, as well as longer-dated maturities. -- Within the portfolio, there is no significant Lehman Brothers exposure in bank facility commitments. When present, Lehman's commitments were typically lower than 10% of a company's total bank revolver. While it is possible that other banks assume at least a portion of Lehman's commitments, the failure of such would not result in a material credit event for the portfolio. -- There is also limited overlap between Wachovia/Citibank and Bank of America/Merrill Lynch on most bank facilities in Fitch's portfolio. Importantly, the limited instances of overlap occur on facilities that Fitch expects will have sufficient availability when they come due for re-financing. -- The tightening of the commercial paper market does not cause a material concern for Fitch as the media & entertainment sector is not a major CP issuer. Importantly, the majority of CP balances outstanding in Fitch's portfolio are covered by balance sheet cash at June 30, 2008. In addition, the majority of CP issuers have material availability under their revolving credit facilities with commitments from banks such as Bank of America, JP Morgan, Citibank, Deutsche Bank, Barclays, HSBC, Royal Bank of Scotland, Mizuho and Bank of Tokyo- Mitsubishi. -- Fitch estimates that The McClatchy Company (McClatchy) had very little cushion in its previous 2.75 times (x) interest coverage covenant prior to announcing an amendment to its credit agreement on Sept. 26, 2008. The amendment revised the interest coverage ratio initially down to 2.25x from 2.75x, and leverage to 6.25x from 5x. Both ratios loosen further in 2009, providing additional flexibility at the expense of revolver capacity, pricing and other restrictions (security, dividends, etc.). Tribune Company has a very limited margin of error in relation to its debt covenants. Fitch estimates that (assuming all else equal), less than a 10% drop in EBITDA for Tribune could put them at risk of breaching their guaranteed leverage ratio. -- Although facing both cyclical and secular threats, the media & entertainment industry is characterized by relatively predictable revenue streams and high margins. High free cash flow conversion is supported by limited working-capital swings, low capital expenditure, and (sometimes) low cash taxes. Fitch believes these factors make some media companies relatively attractive borrowers for banks and bondholders, even under more selective market conditions. * S&P Puts 'D' Ratings on 30 Cert. Classes from 29 U.S. RMBS ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings to 'D' on 30 classes of mortgage pass-through certificates from 29 U.S. subprime residential mortgage-backed securities transactions from various issuers. The downgrades reflect principal write-downs on the affected classes. Of the 30 defaulted classes, S&P downgraded six from the 'CCC' rating category, 23 from the 'CC' rating category, and one from the 'B+' rating category. The class balances of these certificates incurred realized losses during the August 2008 remittance period. Rating Actions 2006-CB4 Trust Series 2006-CB4 Rating ------ Class CUSIP To From ----- ----- -- ---- B-4 12498QAP1 D CC Aegis Asset Backed Securities Trust Series 2005-5 Rating ------ Class CUSIP To From ----- ----- -- ---- B4 00764MHP5 D CCC Bear Stearns Asset Backed Securities I Trust 2005-HE10 Series 2005-HE10 Rating ------ Class CUSIP To From ----- ----- -- ---- M-7 073879X94 D CC Bear Stearns Asset Backed Securities I Trust 2005-HE9 Series 2005-HE9 Rating ------ Class CUSIP To From ----- ----- -- ---- M-8 073879S33 D CC Bear Stearns Asset Backed Securities I Trust 2006-HE4 Series 2006-HE4 Rating ------ Class CUSIP To From ----- ----- -- ---- M-8 07388AAM6 D CC M-9 07388AAN4 D CC Bear Stearns Asset Backed Securities I Trust 2006-HE6 Series 2006-HE6 Rating ------ Class CUSIP To From ----- ----- -- ---- I-M-10 07388UBA7 D CCC Bear Stearns Asset Backed Securities I Trust 2006-HE8 Series 2006-HE8 Rating ------ Class CUSIP To From ----- ----- -- ---- II-M-11 07388JBL8 D CC Citigroup Mortgage Loan Trust 2006-CB3 Series 2006-CB3 Rating ------ Class CUSIP To From ----- ----- -- ---- B-4 12489WRH9 D CC GSAMP Trust 2006-HE3 Series 2006-HE3 Rating ------ Class CUSIP To From ----- ----- -- ---- B-1 36244KAV7 D CCC GSAMP Trust 2006-HE4 Series 2006-HE4 Rating ------ Class CUSIP To From ----- ----- -- ---- B-1 362439AT8 D CCC GSAMP Trust 2006-HE5 Series 2006-HE5 Rating ------ Class CUSIP To From ----- ----- -- ---- B-1 362437AT2 D CC Home Equity Asset Trust 2005-3 Series 2005-3 Rating ------ Class CUSIP To From ----- ----- -- ---- B-4 437084KZ8 D CC Home Equity Asset Trust 2005-4 Series 2005-4 Rating ------ Class CUSIP To From ----- ----- -- ---- B-3 437084LV6 D CC Home Equity Asset Trust 2005-6 Series 2005-6 Rating ------ Class CUSIP To From ----- ----- -- ---- B-4 437084NS1 D CC Home Equity Asset Trust 2006-3 Series 2006-3 Rating ------ Class CUSIP To From ----- ----- -- ---- B-3 437084VC7 D CC Home Equity Asset Trust 2006-5 Series 2006-5 Rating ------ Class CUSIP To From ----- ----- -- ---- B-1 437096AR1 D CC Home Equity Asset Trust 2007-1 Series 2007-1 Rating ------ Class CUSIP To From ----- ----- -- ---- B-2 43710LAQ7 D CC JPMorgan Mortgage Acquisition Corp. 2005-FRE1 Series 2005-FRE1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-11 46626LCN8 D CC JPMorgan Mortgage Acquisition Corp. 2005-WMC1 Series 2005-WMC1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-11 46626LBT6 D CC JPMorgan Mortgage Acquisition Corp. 2006-FRE1 Series 2006-FRE1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-11 46626LFZ8 D CC Long Beach Mortgage Loan Trust 2005-WL3 Series 2005-WL3 Rating ------ Class CUSIP To From ----- ----- -- ---- B-2 542514QH0 D CC Long Beach Mortgage Loan Trust 2006-1 Series 2006-1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-10 542514RX4 D CC M-8 54251PAN7 D CC NovaStar Mortgage Funding Trust Series 2006-6 Series 2006-6 Rating ------ Class CUSIP To From ----- ----- -- ---- M-10 66988RAQ0 D CCC Park Place Securities Inc. Series 2005-WHQ2 Rating ------ Class CUSIP To From ----- ----- -- ---- M-11 70069FJE8 D CC SG Mortgage Securities Trust 2005-OPT1 Series 2005-OPT1 Rating ------ Class CUSIP To From ----- ----- -- ---- M13 81879MAR0 D CC Soundview Home Loan Trust 2005-OPT4 Series 2005-OPT4 Rating ------ Class CUSIP To From ----- ----- -- ---- M-11 83611MJW9 D CC Terwin Mortgage Trust 2005-2HE Series 2005-2HE Rating ------ Class CUSIP To From ----- ----- -- ---- B-2 881561QB3 D B+ Terwin Mortgage Trust 2006-11ABS Series 2006-11ABS Rating ------ Class CUSIP To From ----- ----- -- ---- B-1 88156YAP7 D CC Terwin Mortgage Trust 2007-4HE Series 2007-4HE Rating ------ Class CUSIP To From ----- ----- -- ---- M-3 88157QAD0 D CCC * S&P Cuts Ratings on 51 Tranches from 14 Cash Flow & Hybrid CDOs ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 51 tranches from 14 U.S. cash flow and hybrid collateralized debt obligation transactions. S&P removed 16 of the lowered ratings from CreditWatch with negative implications. At the same time, S&P placed four additional ratings from Aspen Funding I Ltd. on CreditWatch with negative implications. The ratings on 34 of the downgraded tranches are on CreditWatch with negative implications, indicating a significant likelihood of further downgrades. The CreditWatch placements primarily affect transactions for which a significant portion of the collateral assets currently have ratings on CreditWatch with negative implications or have significant exposure to assets rated in the 'CCC' category. The 51 downgraded U.S. cash flow and hybrid tranches have a total issuance amount of $7.476 billion. Seven of the 14 affected transactions are mezzanine structured finance CDOs of asset-backed securities, which are collateralized in large part by mezzanine tranches of residential mortgage-backed securities and other SF securities. Five of the 14 transactions are high-grade SF CDOs of ABS, which were collateralized at origination primarily by 'AAA' through 'A' rated tranches of RMBS and other SF securities. The other two transactions are CDOs of CDOs that were collateralized at origination primarily by notes from other CDOs, as well as by tranches from RMBS and other SF transactions. The CDO downgrades reflect a number of factors, including credit deterioration and recent negative rating actions on U.S. subprime RMBS. To date, including the CDO tranches listed and including actions on both publicly and confidentially rated tranches, S&P has lowered its ratings on 3,817 tranches from 867 U.S. cash flow, hybrid, and synthetic CDO transactions as a result of stress in the U.S. residential mortgage market and credit deterioration of U.S. RMBS. In addition, 1,358 ratings from 472 transactions are currently on CreditWatch with negative implications for the same reasons. In all, S&P has downgraded $440.980 billion of CDO issuance. Additionally, S&P's ratings on $36.118 billion of securities have not been lowered but are currently on CreditWatch with negative implications, indicating a high likelihood of future downgrades. Rating Actions Rating ------ Transaction Class To From ----------- ----- -- ---- Altius III Fdg Ltd. A-1a CCC-/Watch Neg BBB/Watch Neg Altius III Fdg Ltd. A-1a-2 CCC-/Watch Neg BBB-/Watch Neg Altius III Fdg Ltd. A-1a-3 CCC-/Watch Neg BBB-/Watch Neg Altius III Fdg Ltd. A-1b-1B CCC-/Watch Neg BBB-/Watch Neg Altius III Fdg Ltd. A-1b-1F BB+/Watch Neg BBB-/Watch Neg Altius III Fdg Ltd. A-1b-V CCC-/Watch Neg BBB-/Watch Neg Altius III Fdg Ltd. A-2 CC B+/Watch Neg Altius III Fdg Ltd. B CC CCC-/Watch Neg Altius III Fdg Ltd. S AA/Watch Neg AAA/Watch Neg Aspen Funding I Ltd. A-1L AAA/Watch Neg AAA Aspen Funding I Ltd. A-2L A+/Watch Neg A+ Aspen Funding I Ltd. A-3L BBB/Watch Neg BBB Aspen Funding I Ltd. B-1 BB+/Watch Neg BB+ Aspen Funding I Ltd. Pfd Shares CCC+/Watch Neg B+ Blue Heron Funding V Ltd. B CCC-/Watch Neg BBB C-BASS CBO XV Ltd. A CC A/Watch Neg C-BASS CBO XV Ltd. B CC BBB+/Watch Neg C-BASS CBO XV Ltd. C CC BB+/Watch Neg C-BASS CBO XV Ltd. D CC BB-/Watch Neg Charles Fort CDO I Ltd. A-1 CC CCC+/Watch Neg Cheyne High Grade ABS A-1 LT A/Watch Neg AAA CDO I Ltd. Cheyne High Grade ABS A-1 MM-b A/A-1/Watch Neg AAA/A-1+ CDO I Ltd. Cheyne High Grade ABS A-1 MM-c A/A-1/Watch Neg AAA/A-1+ CDO I Ltd. Cheyne High Grade ABS A-1 MM-f A/A-1/Watch Neg AAA/A-1+ CDO I Ltd. Cheyne High Grade ABS A-2 BB+/Watch Neg AA+/Watch Neg CDO I Ltd. Cheyne High Grade ABS B B-/Watch Neg A+/Watch Neg CDO I Ltd. Cheyne High Grade ABS C CC B/Watch Neg CDO I Ltd. Commodore CDO II Ltd. A-1MM AA/A-1+/Watch Neg AAA/A-1+ Commodore CDO II Ltd. A-2 (a) B+/Watch Neg A-/Watch Neg Commodore CDO II Ltd. A-2 (b) B+/Watch Neg A-/Watch Neg IMAC CDO 2006-1 Ltd. A-1 CCC-/Watch Neg BBB-/Watch Neg Le Monde CDO I LLC A-1 BBB/Watch Neg AAA/Watch Neg Le Monde CDO I LLC A-1R (EUR) BBB/Watch Neg AAA/Watch Neg Le Monde CDO I LLC A-1R (USD) BBB/Watch Neg AAA/Watch Neg Le Monde CDO I LLC A-2 BBB/Watch Neg AAA/Watch Neg Le Monde CDO I LLC A-2MM BBB/A-2/Watch Neg AAA/A-1+/Watch Neg Le Monde CDO I LLC A-3 (EUR) CC B+/Watch Neg Le Monde CDO I LLC A-3MM CC/C B+/B/Watch Neg Le Monde CDO I LLC A-4 CC CCC/Watch Neg Orchid Structured Finance A-2 BBB/Watch Neg AAA CDO Ltd. Orchid Structured Finance B CC B- CDO Ltd. Silver Marlin CDO I Ltd. A-1 AA AAA/Watch Neg Stone Tower CDO II Ltd. A-1LB AA/Watch Neg AAA Stone Tower CDO II Ltd. A-2L BBB/Watch Neg AA Stone Tower CDO II Ltd. A-3L B+/Watch Neg A/Watch Neg Stone Tower CDO II Ltd. B-1L CCC/Watch Neg BBB/Watch Neg Tourmaline CDO II Ltd. A BBB-/Watch Neg AA+/Watch Neg Tourmaline CDO II Ltd. B B/Watch Neg A-/Watch Neg Tourmaline CDO II Ltd. C CC BB+/Watch Neg Tourmaline CDO II Ltd. D CC BB-/Watch Neg Tourmaline CDO II Ltd. E CC CCC/Watch Neg Trainer Wortham First A-2 AA-/Watch Neg AAA Republic CBO V Ltd. Trainer Wortham First B BBB/Watch Neg AA Republic CBO V Ltd. Trainer Wortham First C CCC+/Watch Neg A/Watch Neg Republic CBO V Ltd. Trainer Wortham First D CC BBB/Watch Neg Republic CBO V Ltd. OTHER OUTSTANDING RATINGS Transaction Class Rating Altius III Funding Ltd. C CC Altius III Funding Ltd. D CC Altius III Funding Ltd. E CC Blue Heron Funding V Ltd. Certificat AAA Charles Fort CDO I Ltd. A-2 CC Charles Fort CDO I Ltd. B CC Charles Fort CDO I Ltd. C CC Charles Fort CDO I Ltd. D-1 CC Charles Fort CDO I Ltd. D-2 CC Charles Fort CDO I Ltd. E CC Cheyne High Grade ABS CDO I A-1MT-d AA- Cheyne High Grade ABS CDO I A-1MT-e AA- Commodore CDO II Ltd. B CC Commodore CDO II Ltd. C CC IMAC CDO 2006-1 Ltd. A-2 CC IMAC CDO 2006-1 Ltd. B CC IMAC CDO 2006-1 Ltd. C CC IMAC CDO 2006-1 Ltd. D CC IMAC CDO 2006-1 Ltd. E CC IMAC CDO 2006-1 Ltd. F CC IMAC CDO 2006-1 Ltd. G CC Le Monde CDO I LLC B CC Le Monde CDO I LLC C CC Le Monde CDO I LLC D CC Le Monde CDO I LLC E CC Orchid Structured Finance CDO Ltd. A-1MM AAA/A-1+ Orchid Structured Finance CDO Ltd. C-1 CC Orchid Structured Finance CDO Ltd. C-2 CC Silver Marlin CDO I Ltd. A-2 CC Silver Marlin CDO I Ltd. A-3 CC Silver Marlin CDO I Ltd. A-4 CC Silver Marlin CDO I Ltd. B CC Silver Marlin CDO I Ltd. C CC Silver Marlin CDO I Ltd. D CC Silver Marlin CDO I Ltd. E CC Silver Marlin CDO I Ltd. F CC Stone Tower CDO II Ltd. A-1LA AAA Stone Tower CDO II Ltd. X AAA Trainer Wortham First A-1 AAA Republic CBO V Ltd. * S&P Trims Ratings on 71 Classes from 26 US Subprime RMBS ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 71 classes of mortgage pass-through certificates from 26 U.S. subprime residential mortgage-backed securities transactions issued between 2001 and 2004. S&P removed one of the lowered ratings from CreditWatch with negative implications. Two additional ratings remain on CreditWatch negative. Lastly, S&P affirmed its ratings on 128 other classes of certificates. S&P analyzed a total of 27 deals for this review. Chase Funding Loan Acquisition Trust Series 2003-C1 was the only deal that experienced affirmations and no rating changes. The lowered ratings and remaining CreditWatch negative placements reflect the performance of the underlying subprime collateral as of the August 2008 remittance period. Current or projected credit support, which is based on previous losses or the dollar amounts of delinquencies in the pipelines of the affected deals, was insufficient to support the ratings at their previous levels. While overcollateralization is at its target for 23 structures from 15 of the 26 deals, credit support for the downgraded transactions has deteriorated and in their delinquency pipelines have grown during recent months. Available loss severities indicate that the pattern of losses is likely to continue. O/C has been depleted for six of the downgraded deals. The approximate 12-month average of available loss severities for the affected vintages were as follows: 2001, 82%; 2002, 72%; 2003, 74%; and 2004, 60%. As of the August 2008 remittance period, seasoning for the downgraded deals ranged from 45 months (Chase Funding Loan Acquisition Trust Series 2004-OPT1) to 80 months (Chase Funding Trust Series 2001-4), and the paydown of the pools ranged from 3.73% (Home Equity Asset Trust 2002-2) to 43.06% (Chase Funding Trust Series 2003-6, loan group 1) of the original principal balances. Cumulative losses for the downgraded transactions ranged from 0.38% (Chase Funding Trust Series 2003-6, loan group 1) to 5.07% (Long Beach Mortgage Loan Trust 2002-2) of the original principal balances, while total delinquencies ranged from 5% (Chase Funding Trust Series 2003-5, loan group 2) to 51.85% (Chase Funding Trust Series 2001-4, loan group 2) of the current pool balances. The affirmations reflect adequate credit support that is sufficient to maintain the ratings at their current levels. A combination of subordination, excess spread, and O/C originally provided credit support to all of the transactions. The underlying collateral for the deals consists of subprime mortgage loans. Rating Actions 2004-CB6 Trust Series 2004-CB6 Rating ------ Class CUSIP To From ----- ----- -- ---- B-4 59020UJL0 B BB Chase Funding Loan Acquisition Trust, Series 2004-AQ1 Series 2004-AQ1 Rating ------ Class CUSIP To From ----- ----- -- ---- B-1 161542DS1 BBB BBB+ B-2 161542DT9 BBB- BBB B-3 161542DU6 BB BBB- B-4 161542DV4 B BB+ B-5 161542DW2 B- BB Chase Funding Loan Acquisition Trust, Series 2004-OPT1 Series 2004-OPT1 Rating ------ Class CUSIP To From ----- ----- -- ---- B-1 161542EC5 BBB BBB+ B-2 161542ED3 BBB- BBB B-3 161542EE1 BB BBB- B-4 161542EF8 B- BB+ Chase Funding Trust, Series 2001-4 Series 2001-4 Rating ------ Class CUSIP To From ----- ----- -- ---- IB 161551FH4 BB BBB- IIM-1 161551FK7 B AA IIM-2 161551FL5 B- A Chase Funding Trust, Series 2002-2 Series 2002-2 Rating ------ Class CUSIP To From ----- ----- -- ---- IM-2 161551FV3 BBB- A IB 161551FW1 BB BBB IIM-1 161551FY7 A AA IIM-2 161551FZ4 CCC A IIB 161551GA8 CCC BBB Chase Funding Trust, Series 2002-3 Series 2002-3 Rating ------ Class CUSIP To From ----- ----- -- ---- IM-2 161546CZ7 BB A IB 161546DA1 BB- BBB IIM-1 161546DC7 BB AA IIM-2 161546DD5 B A Chase Funding Trust, Series 2002-4 Series 2002-4 Rating ------ Class CUSIP To From ----- ----- -- ---- IIM-1 161546DR4 BB+ AA IIM-2 161546DS2 BB- A Chase Funding Trust, Series 2003-2 Series 2003-2 Rating ------ Class CUSIP To From ----- ----- -- ---- IB 161546EU6 BB BBB IIM-1 161546EX0 B AA IIM-2 161546EY8 CCC A Chase Funding Trust, Series 2003-3 Series 2003-3 Rating ------ Class CUSIP To From ----- ----- -- ---- IB 161546FK7 BB BBB IIM-2 161546FP6 B A IIB 161546FQ4 CCC BBB Chase Funding Trust, Series 2003-5 Series 2003-5 Rating ------ Class CUSIP To From ----- ----- -- ---- IIM-1 161546GS9 BBB AA IIM-2 161546GT7 BB A IIB 161546GU4 B BBB Chase Funding Trust, Series 2003-6 Series 2003-6 Rating ------ Class CUSIP To From ----- ----- -- ---- IB 161546HF6 BBB- BBB+ IIM-1 161546HJ8 BBB AA IIM-2 161546HK5 B A IIB 161546HL3 CCC BBB Chase Funding Trust, Series 2004-1 Series 2004-1 Rating ------ Class CUSIP To From ----- ----- -- ---- IB 161546HX7 BB BBB IIM-2 161546JB3 B- A IIB 161546JC1 CCC BBB Chase Funding Trust, Series 2004-2 Series 2004-2 Rating ------ Class CUSIP To From ----- ----- -- ---- IIM-2 161546JQ0 BB A IIB 161546JN7 B BBB Fremont Home Loan Trust 2003-1 Series 2003-1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-1 35729PAS9 AA AAA M-2 35729PAT7 BBB AA+ M-4 35729PAV2 B+ A M-5 35729PAW0 B BBB M-3 35729PAU4 BB AA GSAMP Trust 2002-WF Series 2002-WF Rating ------ Class CUSIP To From ----- ----- -- ---- M-1 36228FJQ0 AA AA+ M-2 36228FJR8 BB A GSAMP Trust 2003-NC1 Series 2003-NC1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-2 36228FLY0 A+ AAA M-3 36228FMA1 A- AAA B-1 36228FMB9 B- AA B-2 36228FMC7 CCC BBB Home Equity Asset Trust 2002-2 Series 2002-2 Rating ------ Class CUSIP To From ----- ----- -- ---- M-1 22541NCU1 BBB AA+ M-2 22541NCV9 CCC BB Home Equity Asset Trust 2003-2 Series 2003-2 Rating ------ Class CUSIP To From ----- ----- -- ---- M-1 22541NP52 A AA M-2 22541NP60 BB BBB-/Watch Neg Home Equity Asset Trust 2004-5 Series 2004-5 Rating ------ Class CUSIP To From ----- ----- -- ---- M-4 437084DZ6 A+/Watch Neg A+/Watch Neg M-5 437084EA0 BBB-/Watch Neg BBB-/Watch Neg B-3 437084EE2 D CC Long Beach Mortgage Loan Trust 2002-2 Series 2002-2 Rating ------ Class CUSIP To From ----- ----- -- ---- M2 542514CK8 B- BBB M3 542514CL6 D CCC Morgan Stanley ABS Capital I Inc. Trust 2003-NC6 Series 2003-NC6 Rating ------ Class CUSIP To From ----- ----- -- ---- B-3 61746RBR1 D CCC Morgan Stanley Dean Witter Capital I Inc. Trust 2002-NC4 Series 2002-NC4 Rating ------ Class CUSIP To From ----- ----- -- ---- M-2 61746WVT4 BB BBB B-1 61746WVU1 D CCC Option One Mortgage Loan Trust 2002-5 Series 2002-5 Rating ------ Class CUSIP To From ----- ----- -- ---- M-2 68389FCU6 A AAA M-3 68389FCV4 BBB BBB+ Option One Mortgage Loan Trust 2002-6 Series 2002-6 Rating ------ Class CUSIP To From ----- ----- -- ---- M-1 68400XAZ3 AA AAA M-2 68400XBA7 BB A M-3 68400XBB5 BB- BBB Saxon Asset Securities Trust 2002-2 Series 2002-2 Rating ------ Class CUSIP To From ----- ----- -- ---- M-2 805564LZ2 BBB A B 805564MA6 CCC B Saxon Asset Securities Trust 2004-2 Series 2004-2 Rating ------ Class CUSIP To From ----- ----- -- ---- MV-6 805564QQ7 BB BBB Ratings affirmed 2004-CB6 Trust Series 2004-CB6 Class CUSIP Rating ----- ----- ------ AF-3 59020UJA4 AAA AF-4 59020UJB2 AAA M-1 59020UJC0 AA M-2 59020UJD8 A M-3 59020UJE6 A- B-1 59020UJF3 BBB+ B-2 59020UJG1 BBB B-3 59020UJH9 BBB- Chase Funding Loan Acquisition Trust, Series 2003-C1 Series 2003-C1 Class CUSIP Rating ----- ----- ------ IA-4 161542CN3 AAA IA-5 161542CP8 AAA IM-1 161542CQ6 AA IM-2 161542CR4 A IB 161542CS2 BBB Chase Funding Loan Acquisition Trust, Series 2004-AQ1 Series 2004-AQ1 Class CUSIP Rating ----- ----- ------ A-2 161542DN2 AAA M-1 161542DP7 AA M-2 161542DQ5 A M-3 161542DR3 A- Chase Funding Loan Acquisition Trust, Series 2004-OPT1 Series 2004-OPT1 Class CUSIP Rating ----- ----- ------ M-1 161542DZ5 AA M-2 161542EA9 A M-3 161542EB7 A- Chase Funding Trust, Series 2001-4 Series 2001-4 Class CUSIP Rating ----- ----- ------ IA-5 161551FD3 AAA IA-6 161551FE1 AAA IM-1 161551FF8 AA IM-2 161551FG6 A IIA-1 161551FJ0 AAA Chase Funding Trust, Series 2002-2 Series 2002-2 Class CUSIP Rating ----- ----- ------ IA-5 161551FS0 AAA IA-6 161551FT8 AAA IM-1 161551FU5 AA IIA-1 161551FX9 AAA Chase Funding Trust, Series 2002-3 Series 2002-3 Class CUSIP Rating ----- ----- ------ IA-5 161546CW4 AAA IA-6 161546CX2 AAA IM-1 161546CY0 AA IIA-1 161546DB9 AAA Chase Funding Trust, Series 2002-4 Series 2002-4 Class CUSIP Rating ----- ----- ------ IA-5 161546DK9 AAA IA-6 161546DL7 AAA IM-1 161546DM5 AA IM-2 161546DN3 A IB 161546DP8 BBB IIA-1 161546DQ6 AAA Chase Funding Trust, Series 2003-2 Series 2003-2 Class CUSIP Rating ----- ----- ------ IA-5 161546EQ5 AAA IA-6 161546ER3 AAA IM-1 161546ES1 AA IM-2 161546ET9 A IIA-2 161546EW2 AAA Chase Funding Trust, Series 2003-3 Series 2003-3 Class CUSIP Rating ----- ----- ------ IA-4 161546FE1 AAA IA-5 161546FF8 AAA IA-6 161546FG6 AAA IM-1 161546FH4 AA IM-2 161546FJ0 A IIA-2 161546FM3 AAA IIM-1 161546FN1 AA Chase Funding Trust, Series 2003-5 Series 2003-5 Class CUSIP Rating ----- ----- ------ IA-4 161546GJ9 AAA IA-5 161546GK6 AAA IA-6 161546GL4 AAA IM-1 161546GM2 AA IM-2 161546GN0 A IB 161546GP5 BBB IIA-2 161546GR1 AAA Chase Funding Trust, Series 2003-6 Series 2003-6 Class CUSIP Rating ----- ----- ------ IA-3 161546GY6 AAA IA-4 161546GZ3 AAA IA-5 161546HA7 AAA IA-6 161546HB5 AAA IA-7 161546HC3 AAA IM-1 161546HD1 AA+ IM-2 161546HE9 A+ IIA-2 161546HH2 AAA Chase Funding Trust, Series 2004-1 Series 2004-1 Class CUSIP Rating ----- ----- ------ IA-4 161546HR0 AAA IA-5 161546HS8 AAA IA-6 161546HT6 AAA IA-7 161546HU3 AAA IM-1 161546HV1 AA IM-2 161546HW9 A IIA-2 161546HZ2 AAA IIM-1 161546JA5 AA Chase Funding Trust, Series 2004-2 Series 2004-2 Class CUSIP Rating ----- ----- ------ IA-4 161546JG2 AAA IA-5 161546JH0 AAA IA-6 161546JJ6 AAA IM-1 161546JK3 AA IM-2 161546JL1 A IB 161546JM9 BBB IIA-2 161546JS6 AAA IIM-1 161546JP2 AA GSAMP Trust 2002-WF Series 2002-WF Class CUSIP Rating ----- ----- ------ A-1 36228FJM9 AAA A-2B 36228FJP2 AAA B-1 36228FJS6 B- GSAMP Trust 2003-NC1 Series 2003-NC1 Class CUSIP Rating ----- ----- ------ M-1 36228FLX2 AAA Home Equity Asset Trust 2002-2 Series 2002-2 Class CUSIP Rating ----- ----- ------ A-2 22541NCP2 AAA A-3 22541NCQ0 AAA A-4 22541NCR8 AAA Home Equity Asset Trust 2003-2 Series 2003-2 Class CUSIP Rating ----- ----- ------ M-3 22541NQ28 B- Home Equity Asset Trust 2004-5 Series 2004-5 Class CUSIP Rating ----- ----- ------ A-1 437084DQ6 AAA A-3 437084DS2 AAA A-IO-1 437084DT0 AAA A-IO-2 437084EG7 AAA M-1 437084DW3 AA+ M-2 437084DX1 AA M-3 437084DY9 AA- M-6 437084EB8 B+ B-1 437084EC6 B- B-2 437084ED4 CCC Morgan Stanley ABS Capital I Inc. Trust 2003-NC6 Series 2003-NC6 Class CUSIP Rating ----- ----- ------ M-1 61746RBL4 AA+ M-2 61746RBM2 A M-3 61746RBN0 BB B-1 61746RBP5 B B-2 61746RBQ3 CCC Morgan Stanley Dean Witter Capital I Inc. Trust 2002-NC4 Series 2002-NC4 Class CUSIP Rating ----- ----- ------ M-1 61746WVS6 AA Option One Mortgage Loan Trust 2002-5 Series 2002-5 Class CUSIP Rating ----- ----- ------ M-1 68389FCT9 AAA M-4 68389FCW2 BBB Option One Mortgage Loan Trust 2002-6 Series 2002-6 Class CUSIP Rating ----- ----- ------ A-1 68400XAX8 AAA A-2 68400XAY6 AAA Saxon Asset Securities Trust 2002-2 Series 2002-2 Class CUSIP Rating ----- ----- ------ AF-5 805564LU3 AAA AF-6 805564LV1 AAA AV 805564LW9 AAA M-1 805564LY5 AA Saxon Asset Securities Trust 2004-2 Series 2004-2 Class CUSIP Rating ----- ----- ------ AF-3 805564PX3 AAA AF-4 805564PY1 AAA AF-5 805564PZ8 AAA MF-1 805564QA2 AA MF-2 805564QB0 A+ MF-3 805564QC8 A MF-4 805564QD6 A- MF-5 805564QE4 BBB+ MF-6 805564QF1 BBB MV-1 805564QK0 AA MV-2 805564QL8 A+ MV-3 805564QM6 A MV-4 805564QN4 A- MV-5 805564QP9 BBB+ * S&P Downgrades Ratings on 84 Classes from 15 Subprime RMBS ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on 84 classes of mortgage pass-through certificates from 15 U.S. subprime residential mortgage-backed securities transactions from various issuers. Concurrently, S&P affirmed its ratings on 113 other classes of certificates from these transactions. S&P analyzed a total of 18 deals for this review. The lowered ratings reflect S&P's lifetime loss expectations, coupled with projected future deterioration in credit enhancement due to the step-down features of the subprime RMBS transactions issued in 2005. As principal is released to the subordinate classes of these transactions, available credit support to absorb the projected losses in future periods decreases unless the transactions' triggers fail. Based on the current collateral performance of these transactions, S&P projects that future credit enhancement percentages will be insufficient to maintain the ratings at their previous levels. As of the Aug. 25, 2008, distribution date, cumulative losses for these transactions ranged from 0.53% to 3.05% of each transaction's original pool balance. Total delinquencies ranged from 11.63% to 40.36% of the current pool balances, while severe delinquencies ranged from 6.95% to 27.63% of the current pool balances. The affirmations reflect current and projected credit support percentages that are sufficient to maintain the ratings at their current levels. A combination of subordination, excess interest, and overcollateralization provide credit enhancement for these transactions. The collateral supporting these series consist of pools of fixed- and adjustable-rate subprime mortgage loans secured by first liens on one- to four-family residential properties. Rating Actions ACE Securities Corp Home Equity Loan Trust Series 2005-WF1 Series 2005-WF1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-9 004421QX4 BBB BBB+ M-10 004421QY2 BB BBB M-11 004421QZ9 B BBB- Bear Stearns Asset Backed Securities I Trust 2005-HE1 Series 2005-HE1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-3 073879PT9 BBB A- M-4 073879PU6 BB BBB+ M-5 073879PV4 B BBB M-6 073879PW2 CCC BBB- CSFB Home Equity Pass-Through Certificates, Series 2005-FIX1 Trust Series 2005-FIX1 Rating ------ Class CUSIP To From ----- ----- -- ---- B-1 22541S6C7 BB BBB B-2 22541S6D5 B BBB- Long Beach Mortgage Loan Trust 2005-1 Series 2005-1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-6 542514KE3 BBB A- M-7 542514KF0 BB BBB+ M-8 542514KG8 B BBB M-9 542514KH6 CCC BBB- B-1 542514KJ2 CCC BB+ B-2 542514KK9 CC BB Merrill Lynch Mortgage Investors Trust, Series 2005-NC1 Series 2005-NC1 Rating ------ Class CUSIP To From ----- ----- -- ---- B-2 59020URT4 BBB BBB+ B-3 59020URU1 BB BBB+ B-4 59020URV9 BB- BBB B-5 59020URZ0 B BBB- B-6 59020USA4 CCC BB+ Merrill Lynch Mortgage Investors Trust, Series 2005-WMC1 Series 2005-WMC1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-3 59020UQX6 A A+ M-4 59020UQY4 BBB A B-1 59020UQZ1 BBB- A- B-2 59020URA5 BB BBB+ B-3 59020URB3 B BBB B-4 59020URC1 B- BBB- B-5 59020URD9 CCC BB+ B-6 59020URE7 CCC BB+ Morgan Stanley ABS Capital I Inc. Trust 2005-HE1 Series 2005-HE1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-3 61744CKQ8 A AA- M-4 61744CKR6 BBB A+ M-5 61744CKS4 BBB- A M-6 61744CKT2 BB A- B-1 61744CKU9 BB- BBB+ B-2 61744CKV7 B BBB B-3 61744CKW5 CCC BBB- Morgan Stanley Home Equity Loan Trust 2005-1 Series 2005-1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-4 61744CLH7 A A+ M-5 61744CLJ3 BB A M-6 61744CLK0 B A- B-1 61744CLL8 CCC BBB+ B-2 61744CLM6 CCC BBB B-3 61744CLN4 CCC BBB- Option One Mortgage Loan Trust 2005-1 Series 2005-1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-4 68389FGN8 BBB A+ M-5 68389FGP3 B A M-6 68389FGQ1 CCC BBB M-7 68389FGR9 CCC B M-8 68389FGS7 CC CCC M-9 68389FGT5 CC CCC RASC Series 2005-KS1 Trust Series 2005-KS1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-2 76110WM45 BB A+ M-3 76110WM52 B A M-4 76110WM60 CCC A- M-5 76110WM78 CCC BBB+ M-6 76110WM86 CCC BBB B 76110WM94 CCC BB Saxon Asset Securities Trust 2005-1 Series 2005-1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-3 805564RP8 A AA- M-4 805564RQ6 BB A+ M-5 805564RR4 B A M-6 805564RS2 CCC A- B-1 805564RT0 CCC BBB+ B-2 805564RU7 CCC BBB B-3 805564RV5 CC BBB- Structured Asset Investment Loan Trust 2005-1 Series 2005-1 Rating ------ Class CUSIP To From ----- ----- -- ---- M3 86358EQK5 A AA- M4 86358EQL3 BB A+ M6 86358EQN9 CCC A- M7 86358EQP4 CCC BBB+ M8 86358EQQ2 CCC BBB M9 86358EQR0 CC BB- M5 86358EQM1 B A Structured Asset Securities Corp. Series 2005-NC1 Rating ------ Class CUSIP To From ----- ----- -- ---- M3 86359BZ38 A AA M4 86359BZ46 BBB AA- M5 86359BZ53 BB A M6 86359BZ61 B A- M7 86359BZ79 CCC BBB+ M8 86359BZ87 CCC BBB M9 86359BZ95 CCC BBB- B 86359B3V1 CC B Structured Asset Securities Corporation 2005-WF1 Series 2005-WF1 Rating ------ Class CUSIP To From ----- ----- -- ---- M7 86359BW56 BBB BBB+ M8 86359BW64 BB BBB M9 86359BV24 B BBB- B1 86359BV32 CCC BB B2 86359BW72 CCC BB Terwin Mortgage Trust 2005-2HE Series 2005-2HE Rating ------ Class CUSIP To From ----- ----- -- ---- M-2 881561PX6 BBB AA M-3 881561PY4 BB A+ M-4 881561PZ1 B A B-1 881561QA5 CCC BBB- Ratings Affirmed ACE Securities Corp Home Equity Loan Trust Series 2005-WF1 Series 2005-WF1 Class CUSIP Rating ----- ----- ------ A-1 004421QK2 AAA A-2C 004421QN6 AAA M-1 004421QP1 AA+ M-2 004421QQ9 AA M-3 004421QR7 AA M-4 004421QS5 AA M-5 004421QT3 A+ M-6 004421QU0 A+ M-7 004421QV8 A M-8 004421QW6 A Bear Stearns Asset Backed Securities I Trust 2005-HE1 Series 2005-HE1 Class CUSIP Rating ----- ----- ------ M-1 073879PR3 AA M-2 073879PS1 A M-7 073879PX0 CCC Centex Home Equity Loan Trust 2005-A Series 2005-A Class CUSIP Rating ----- ----- ------ AF-5 152314MC1 AAA AF-6 152314MD9 AAA M-1 152314MH0 AA+ M-2 152314MJ6 AA M-3 152314MK3 AA- M-4 152314ML1 A+ M-5 152314MM9 A M-6 152314MN7 A- M-7 152314MP2 BBB+ B 152314MQ0 BBB CSFB Home Equity Pass-Through Certificates, Series 2005-FIX1 Trust Series 2005-FIX1 Class CUSIP Rating ----- ----- ------ A-2 22541S5R5 AAA A-3 22541S5S3 AAA A-4 22541S5T1 AAA A-5 22541S5U8 AAA M-1 22541S5V6 AA+ M-2 22541S5W4 AA M-3 22541S5X2 AA M-4 22541S5Y0 AA- M-5 22541S5Z7 A+ M-6 22541S6A1 A M-7 22541S6B9 A- Long Beach Mortgage Loan Trust 2005-1 Series 2005-1 Class CUSIP Rating ----- ----- ------ I-A1 542514JV7 AAA M-1 542514JZ8 AA+ M-2 542514KA1 AA M-3 542514KB9 AA- M-4 542514KC7 A+ M-5 542514KD5 A Merrill Lynch Mortgage Investors Trust, Series 2005-NC1 Series 2005-NC1 Class CUSIP Rating ----- ----- ------ M-1 59020URP2 AA M-2 59020URQ0 A+ M-3 59020URR8 A B-1 59020URS6 A- Merrill Lynch Mortgage Investors Trust, Series 2005-WMC1 Series 2005-WMC1 Class CUSIP Rating ----- ----- ------ M-1 59020UQV0 AA M-2 59020UQW8 AA Morgan Stanley ABS Capital I Inc. Trust 2005-HE1 Series 2005-HE1 Class CUSIP Rating ----- ----- ------ A-1ss 61744CKX3 AAA A-2ss 61744CKY1 AAA M-1 61744CKN5 AA+ M-2 61744CKP0 AA Morgan Stanley Home Equity Loan Trust 2005-1 Series 2005-1 Class CUSIP Rating ----- ----- ------ A-1ss 61744CKZ8 AAA A-1mz 61744CLA2 AAA A-2c 61744CLD6 AAA M-1 61744CLE4 AA+ M-2 61744CLF1 AA M-3 61744CLG9 AA- Option One Mortgage Loan Trust 2005-1 Series 2005-1 Class CUSIP Rating ----- ----- ------ A-1A 68389FGE8 AAA A-1B 68389FGF5 AAA A-4 68389FGJ7 AAA M-1 68389FGK4 AA+ M-2 68389FGL2 AA M-3 68389FGM0 AA- Popular ABS Mortgage Pass-Through Trust 2005-1 Series 2005-1 Class CUSIP Rating ----- ----- ------ AF-3 73316PBK5 AAA AF-4 73316PBL3 AAA AF-5 73316PBM1 AAA AF-6 73316PBN9 AAA AV-1A 73316PBP4 AAA AV-1B 73316PBQ2 AAA AV-2 73316PBR0 AAA M-1 73316PBS8 AA M-2 73316PBT6 A M-3 73316PBU3 A- M-4 73316PBV1 BBB+ B-1 73316PBW9 BBB B-2 73316PBX7 BBB- Popular ABS Mortgage Pass-Through Trust 2005-B Series 2005-B Class CUSIP Rating ----- ----- ------ AF-5 73316PEH9 AAA M-1 73316PEL0 AA M-2 73316PEM8 A M-3 73316PEN6 A- M-4 73316PEP1 BBB+ M-5 73316PEQ9 BBB B-1 73316PES5 BB+ B-2 73316PET3 BB B-3 73316PEU0 B M-6 73316PER7 BBB- RASC Series 2005-KS1 Trust Series 2005-KS1 Class CUSIP Rating ----- ----- ------ A-3 76110WM29 AAA M-1 76110WM37 AA Saxon Asset Securities Trust 2005-1 Series 2005-1 Class CUSIP Rating ----- ----- ------ M-1 805564RM5 AA+ M-2 805564RN3 AA Structured Asset Investment Loan Trust 2005-1 Series 2005-1 Class CUSIP Rating ----- ----- ------ A2 86358EQA7 AAA A4 86358EQC3 AAA A5 86358EQD1 AAA A7 86358EQF6 AAA A8 86358EQG4 AAA M1 86358EQH2 AA+ M2 86358EQJ8 AA Structured Asset Securities Corp. Series 2005-NC1 Class CUSIP Rating ----- ----- ------ A5 86359BY21 AAA A8 86359BY54 AAA A9 86359BY62 AAA A10 86359BY70 AAA A-11 86359BY88 AAA M1 86359BY96 AA+ M2 86359BZ20 AA+ Structured Asset Securities Corporation 2005-WF1 Series 2005-WF1 Class CUSIP Rating ----- ----- ------ A3 86359BV65 AAA M1 86359BV73 AA+ M2 86359BV81 AA M3 86359BV99 AA- M4 86359BW23 A+ M5 86359BW31 A M6 86359BW49 A- Terwin Mortgage Trust 2005-2HE Series 2005-2HE Class CUSIP Rating ----- ----- ------ A-1 881561PU2 AAA S 881561PV0 AAA M-1 881561PW8 AA+ * Democrats Want Changes in Bankruptcy Law Included in Rescue Plan ------------------------------------------------------------------ Democrats want the rescue plan for Wall Street to include changes to the bankruptcy law, which will allow judges in Chapter 13 bankruptcy to modify the terms of home loans, Chris Chan of NBC in San Diego reports. The proposed changes include permitting judges to modify interest rates and reduce the loan amounts to match the depreciated prices of the home loans, also known as "cramdowns." This new legislation is meant to help homeowners avoid future foreclosures, and thus retain possession of their homes. These changes have been introduced before but met stiff opposition from the Bush administration and the lenders. The provision was not included in the Foreclosure Prevention Act of 2008 and the housing rescue package, which will be effective in October. "They believe it is bad policy to encourage irresponsible borrowing and it ends up rewarding people who exercised poor judgment in borrowing," said bankruptcy attorney Paul Staley. Attorney Michael O'Halloran says judges should be given the authority to change mortgage loan terms in personal bankruptcy, in the same manner as judges in Chapter 11 corporate bankruptcy are able to change the terms of loans facing companies. As reported by the Troubled Company Reporter on Sept. 30, the government's proposed $700 billion bailout plan for the financial market failed in the House of Representatives with a 228-205 vote. Talks broke down on Thursday when congressional leaders and presidential candidates couldn't agree on the plan's provisions. Congressional leaders said they would work on the bill again, with a new vote possibly late this week. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Oct. 3, 2008 AMERICAN BANKRUPTCY INSTITUTE ABI/UMKC Midwestern Bankruptcy Institute H. Roe Bartle Hall Convention Center, Kansas City Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 9, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Luncheon - Chapter 11 University Club, Jacksonville, Florida Contact: http://www.turnaround.org/ Oct. 13, 2008 AMERICAN BANKRUPTCY INSTITUTE Consumer Bankruptcy Conference Standard Club, Chicago, Illinois Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 14, 2008 TURNAROUND MANAGEMENT ASSOCIATION Annual Charity Golf Event Forest Park Golf Course, St. Louis, Missouri Contact: www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION Billiards Networking Night Herbert's Billiards, Secaucus, New Jersey Contact: 908-575-7333 or www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION LI-TMA Member Social Davenport Press, Mineola, New York Contact: 631-251-6296 or www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting TBD, Calgary, Alberta Contact: 503-768-4299 or www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION View from the Bench - Bankruptcy Update Summit Club, Birmingham, Alabama Contact: www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION How to Contract with a Turnaround Manager University Club, Portland, Oregon Contact: www.turnaround.org Oct. 22, 2008 TURNAROUND MANAGEMENT ASSOCIATION Turnaround Nevada Award Night McCormick & Schmick's, Las Vegas, Nevada Contact: www.turnaround.org Oct. 23, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Arizona Chapter Meeting - Election Oriented TBD, Phoenix, Arizona Contact: www.turnaround.org Oct. 23, 2008 TURNAROUND MANAGEMENT ASSOCIATION Effective Turnarounds: A Panel of Professionals TBA, Rochester, New York Contact: www.turnaround.org Oct. 23-24, 2008 AMERICAN CONFERENCE INSTITUTE Distressed Assets Boot Camp TBD, London, United Kingdom Contact: www.americanconference.com Oct. 28, 2008 TURNAROUND MANAGEMENT ASSOCIATION State of the Capital Markets Citrus Club, Orlando, Florida Contact: www.turnaround.org/ Oct. 28-31, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott New Orleans, Louisiana Contact: 312-578-6900; http://www.turnaround.org/ Oct. 29-30, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Corporate Governance Meetings Marriott, New Orleans, Louisiana Contact: www.turnaround.org Oct. 30 & 31, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Physicians Agreements and Ventures Contact: 800-726-2524; 903-595-3800; www.renaissanceamerican.com Oct. 31, 2008 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium Hilton, Frankfurt, Germany Contact: 1-703-739-0800; http://www.abiworld.org/ Nov. 6, 2008 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast Coach House Diner & Restaurant, Hackensack, New Jersey Contact: 908-575-7333 or www.turnaround.org Nov. 11, 2008 AMERICAN BANKRUPTCY INSTITUTE Detroit Consumer Bankruptcy Conference Marriott, Troy, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ Nov. 13, 2008 TURNAROUND MANAGEMENT ASSOCIATION Turnaround Case Study Summit Club, Birmingham, Alabama Contact: www.turnaround.org Nov. 13, 2008 TURNAROUND MANAGEMENT ASSOCIATION Effective Turnarounds:A View From Workout Consultants TBA, Buffalo, New York Contact: www.turnaround.org Nov. 13, 2008 TURNAROUND MANAGEMENT ASSOCIATION LI-TMA Social TBD, Melville, New York Contact: 631-251-6296 or www.turnaround.org Nov. 13, 2008 TURNAROUND MANAGEMENT ASSOCIATION Dinner Meeting TBD, Calgary, Alberta Contact: 503-768-4299 or www.turnaround.org Nov. 17-18, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Distressed Investing Contact: 800-726-2524; 903-595-3800; www.renaissanceamerican.com Nov. 19, 2008 TURNAROUND MANAGEMENT ASSOCIATION Special Program Tournament Players Club at Jasna Polana, New Jersey Contact: 908-575-7333 or www.turnaround.org Nov. 19, 2008 TURNAROUND MANAGEMENT ASSOCIATION Interaction Between Professionals in a Restructuring/Bankruptcy Bankers Club, Miami, Florida Contact: 312-578-6900; http://www.turnaround.org/ Nov. 20, 2008 TURNAROUND MANAGEMENT ASSOCIATION Senior Housing & Long Term Care Washington Athletic Club,Seattle, Washington Contact: www.turnaround.org Nov. 27, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Arizona Chapter Meeting - Chris Kaup TBD, Phoenix, Arizona Contact: www.turnaround.org Dec. 3, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday Party McCormick & Schmick's, Las Vegas, Nevada Contact: 702-952-2480 or www.turnaround.org Dec. 3, 2008 TURNAROUND MANAGEMENT ASSOCIATION Christmas Function Terminal City Club, Vancouver, British Columbia Contact: 503-768-4299 or www.turnaround.org Dec. 3-5, 2008 AMERICAN BANKRUPTCY INSTITUTE 20th Annual Winter Leadership Conference Westin La Paloma Resort & Spa Tucson, Arizona Contact: http://www.abiworld.org/ Dec. 8, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday Gathering TBD, Long Island, New York Contact: 631-251-6296 or www.turnaround.org Dec. 9, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday MIxer Washington Athletic Club, Seattle, Washington Contact: 503-768-4299 or www.turnaround.org Dec. 11, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday MIxer University Club, Portland, Oregon Contact: 503-768-4299 or www.turnaround.org Dec. 18, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday MIxer TBD, Phoenix, Arizona Contact: 623-581-3597 or www.turnaround.org Dec. 31, 2008 TURNAROUND MANAGEMENT ASSOCIATION Sponsorships - Annual Golf Outing, Various Events TBA, New Jersey Contact: 908-575-7333 or www.turnaround.org Jan. 21-22, 2009 TURNAROUND MANAGEMENT ASSOCIATION Corporate Governance Meetings Bellagio, Las Vegas, Nevada Contact: www.turnaround.org Jan. 22-23, 2009 TURNAROUND MANAGEMENT ASSOCIATION Distressed Investing Conference Bellagio, Las Vegas, Nevada Contact: www.turnaround.org Jan. 22-23, 2009 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Westin Tabor Center, Denver, Colorado Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 5-7, 2009 AMERICAN BANKRUPTCY INSTITUTE Caribbean Insolvency Symposium Westin Casurina, Grand Cayman Island, AL Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 25-27, 2009 AMERICAN BANKRUPTCY INSTITUTE Valcon Four Seasons, Las Vegas, Nevada Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 13, 2009 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West Beverly Wilshire, Beverly Hills, California Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 17-18, 2009 NATIONAL ASSOCIATION OFBANKRUPTCY TRUSTEES NABT Spring Seminar The Peabody, Orlando, Florida Contact: http://www.nabt.com/ Apr. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE Consumer Bankruptcy Conference John Adams Courthouse, Boston, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 27-28, 2009 TURNAROUND MANAGEMENT ASSOCIATION Corporate Governance Meetings Intercontinental Hotel, Chicago, Illinois Contact: www.turnaround.org Apr. 28-30, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Intercontinental Hotel, Chicago, Illinois Contact: www.turnaround.org May 7-10, 2009 AMERICAN BANKRUPTCY INSTITUTE 27th Annual Spring Meeting Gaylord National Resort & Convention Center National Harbor, Maryland Contact: http://www.abiworld.org/ May 14-16, 2009 ALI-ABA Chapter 11 Business Reorganizations Langham Hotel, Boston, Massachusetts Contact: http://www.ali-aba.org June 11-13, 2009 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ June 21-24, 2009 INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY & BANKRUPTCY PROFESSIONALS 8th International World Congress TBA Contact: http://www.insol.org/ July 16-19, 2009 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Mt. Washington Inn Bretton Woods, New Hampshire Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 15-18, 2010 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 17-20, 2010 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 7-10, 2010 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Ocean Edge Resort, Brewster, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 5-7, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ BEARD AUDIO CONFERENCES 2006 BACPA Library Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES BAPCPA One Year On: Lessons Learned and Outlook Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Calpine's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Carve-Out Agreements for Unsecured Creditors Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changes to Cross-Border Insolvencies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changing Roles & Responsibilities of Creditors' Committees Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Chinas New Enterprise Bankruptcy Law Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Clash of the Titans -- Bankruptcy vs. IP Rights Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Coming Changes in Small Business Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Corporate Bankruptcy Bootcamp: A Nuts & Bolts Primer for Navigating the Restructuring Process Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Dana's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Deepening Insolvency Widening Controversy: Current Risks, Latest Decisions Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Diagnosing Problems in Troubled Companies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Claims Trading Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Market Opportunities Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Real Estate under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Employee Benefits and Executive Compensation under the New Code Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Equitable Subordination and Recharacterization Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Examining the Examiners: Pros and Cons of Using Examiners in Chapter 11 Proceedings Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Fundamentals of Corporate Bankruptcy and Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Handling Complex Chapter 11 Restructuring Issues Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Healthcare Bankruptcy Reforms Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Homestead Exemptions under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Hospitals in Crisis: The Insolvency Crisis Plaguing Hospitals Across the U.S. Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES IP Rights In Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES KERPs and Bonuses under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES New 'Red Flag' Identity Theft Rules Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Non-Traditional Lenders and the Impact of Loan-to-Own Strategies on the Restructuring Process Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Partnerships in Bankruptcy: Unwinding The Deal Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Privacy Rights, Protections & Pitfalls in Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Real Estate Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Reverse Mergersthe New IPO? Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Second Lien Financings and Intercreditor Agreements Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Surviving the Digital Deluge: Best Practices in E-Discovery and Records Management for Bankruptcy Practitioners and Litigators Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Technology as a Competitive Advantage For Todays Legal Processes Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Battle of Green & Red: Effect of Bankruptcy on Obligations to Clean Up Contaminated Property Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Subprime Sector Meltdown: Legal Developments and Latest Opportunities Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Twenty-Day Claims Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Using Virtual Data Rooms to Expedite Corporate Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Using Virtual Data Rooms to Expedite M&A and Insolvency Proceedings Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Validating Distressed Security Portfolios: Year-End Price Validation and Risk Assessment Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES When Tenants File -- A Landlord's BAPCPA Survival Guide Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ * * * Featured Conferences Renaissance American Management and Beard Conferences presents Oct. 30-31, 2008 Physician Agreements & Ventures The Millennium Knickerbocker Hotel - Chicago Brochure will be available soon! Nov. 17-18, 2008 Distressed Investing The Helmsley Park Lane - New York Brochure will be available soon! * * * Beard Audio Conferences presents Bankruptcy and Restructuring Audio Conference CDs More information and list of available titles at: http://beardaudioconferences.com/bin/topics?category_id=BAR * * * The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* 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, 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 ***