/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/081020.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, October 20, 2008, Vol. 12, No. 250 Headlines 556 FIRST: Case Summary & Five Largest Unsecured Creditors ALEC NAMAN CATERING: Files for Chapter 11 Protection AMCORE FINANCIAL: Asset Quality Slide Cues Fitch to Cut Ratings AMERICAN FIBERS: Gets Final OK to Use $7.7 Million GECC Facility AMERICAN HOME: Moody's Lowers Ratings on 62 Loan Tranches AMERICAN INT'L: Sens. Want Halt on Mortgage Law Change Efforts ARCHCO VENTURES: Case Summary & Two Largest Unsecured Creditors ASSET FAMILY: Voluntary Chapter 11 Case Summary BALLANTYNE RE: Fitch Cuts $250 Million Class Notes Rating to 'CCC' BALTIMORE GAS: MidAmerican Seeks State Gov't Okay on Acquisition BANKERS OF RUPTCY: Case Summary & 20 Largest Unsecured Creditors BEAR STEARNS: Fitch Holds Low-B Ratings on Six Class Certificates BILL HEARD: Opposes GMAC's Repossession of Unsold Autos BON-TON STORES: S&P Cuts Sr. Unsec. Rating to CCC; Outlook Stable BURGER KING: Fitch Lifts Issuer Default Rating to 'BB' CBRE REALTY: Moody's Affirms Ratings on Overall Stable Performance CENTRAL ILLINOIS: Fitch Lifts 'BB+' Pref. Stock Rating to 'BBB' CHOCTAW GENERATION: S&P Cuts Rating to 'BB'; Keeps Neg. Outlook CHRISTO BARDIS: Files for Chapter 11 Bankruptcy in California CHRISTO BARDIS: Case Summary & 20 Largest Unsecured Creditors CISTERA NETWORKS: Has $951,000 Net Loss for Sept. 2007 Quarter CITIGROUP INC: Posts $2.8 Billion Net Loss in 2008 Third Quarter CMT AMERICA: Wants Case Converted to Chapter 7 Liquidation COLOWYO COAL: S&P Cuts $192.8MM Bonds Rating to 'BB-' from 'BB' CONSTELLATION ENERGY: MidAmerican Seeks Gov't Approval on Deal CSMC 2006-TFL2: Fitch Affirms Low-B Ratings on Two Class Certs. DISTRIBUTED ENERGY: Wants Plan Filing Period Extended to Dec. 31 DOMARK INT'L: Report $959,000 Net Loss for August 31, 2008 EATON VANCE: Moody's Trims $6MM Notes Rating to 'Ba1' from 'Baa3' EHAB A MOHAMED MEDICAL: Case Summary & Largest Unsecured Creditors EIF CALYPSO: S&P's 'BB+' Rating Unaffected by Northampton's Cut ELITE CROSS: Voluntary Chapter 11 Case Summary FAMILY MANAGEMENT: Case Summary & Two Largest Unsecured Creditors FANNIE MAE: Gov't May Have to Pay Shareholders in Fraud Lawsuit FORD MOTOR: John Bond & Jorma Ollila Leave Board Member Posts GENERAL MOTORS: Starts Looking for Hummer Buyer G&G/PENINSULA: Section 341(a) Meeting Scheduled for November 5 GATEWAY ETHANOL: Section 341(a) Meeting Scheduled for November 5 GRAY TELEVISION: Moody's Reviews Ratings for Possible Downgrade GUZMAN GROUP: Case Summary & Two Largest Unsecured Creditors HAMIL CORP: Section 341(a) Meeting Scheduled for November 13 HEALTHCARE PARTNERS: S&P Lifts Counterparty Credit Rating to 'BB+' JETBLUE AIRWAYS: Improved Revenue Cues S&P to Affirm 'B-' Rating JP MORGAN: Fitch Downgrades Class 1B3 Trust Rating to 'CCC/DR2' JUDITH GARVIN: Case Summary & 15 Largest Unsecured Creditors KARYKEION INC: Schedules-Filing Deadline Extended to November 10 KEY DEVELOPERS: Sells 171 Channelside Condos for $21.9 Million LANDMARK II: Moody's Slashes $6MM Notes Rating to 'Ca' from 'Ba2' LANDSOURCE COMMUNITIES: Barclays Files Plan, Mulls Asset Sale LANDSOURCE COMMUNITIES: Treatment of Claims Under Chapter 11 Plan LANDSOURCE COMMUNITIES: Gives Up Exclusive Right to File Plan LEAR CORP: S&P Cuts Corp. Credit to 'B' on Weak Sales & Cash Flow LEHMAN MORTGAGE: S&P Junks Ratings on 9 Pass-Through Certificates LINENS 'N THINGS: Canadian Unit Files for Protection under BIA LOVELL PLACE: Asks Court to Extend Plan Filing Period to Nov. 14 MACH GEN: S&P Puts 'B+' $580MM Loan Rating Under Positive Watch MERRILL LYNCH: Posts $5.2BB in 3rd Quarter Ended Sept. 26 MGM MIRAGE: Tender Offer to Exchange Stock Options Expires MICHAELS STORES: $120MM Credit Facility Won't Affect S&P's Rating MICROMET INC: Index Venture Discloses 6% Equity Stake MORGAN STANLEY: S&P Chips $3.5MM Class A-14 Notes Rating to 'B' MORGAN STANLEY: Fitch Affirms Low-B Ratings on Three Class Certs. MOTOR COACH: Wins Permission to Obtain $315 Million Loan MOTOR COACH: Canadian Unit Lays Off 21 Workers MXENERGY HOLDINGS: S&P Holds 'CCC+' Senior Unsecured Rating NATIONAL AMUSEMENTS: In Talks With Lenders After Selling Shares NOMURA ASSET: Moody's Chips Ratings on 83 Tranches from 16 Loans NORD RESOURCES: Wants Shares Deregistered After Warrants Expire NORTHAMPTON GENERATING: S&P Cuts $153MM Revenue Bonds Rating to B- NOVA SCOTIA CO: Moody's Cuts ID and Facility Ratings; Outlook Neg. OMNOVA SOLUTIONS: S&P Cuts Ratings to 'B' on Declining Financial OPEN ENERGY: Reports $4.5 Million Net Loss for August 2008 PAINE WEBBER: Fitch Downgrades Class 1B5 Trust Rating to 'B' PARADIGM MEDICAL: June 30 Balance Sheet Upside-down by $3.1 Mil. PETTERS COMPANY: Case Summary & 13 Largest Unsecured Creditors PETTERS AVIATION: CEO Says Airline Staff to Get Back 70% of Wages PETTERS COMPANY: Petters Group Creditors List Made Public PETTERS COMPANY: Case Summary & 13 Largest Unsecured Creditors PHILADELPHIA SCHOOL: Moody's Assigns 'Ba2' Underlying Rating PIERRE FOODS: Wants Exclusive Plan Filing Period Moved to Jan 2009 PILGRIM'S PRIDE: Plunges 24% on Bankruptcy Speculation PILGRIM'S PRIDE: Denies Bankruptcy Rumors PLASTECH ENGINEERED: Files Amended Joint Plan of Liquidation PLIANT CORP: S&P Junks Credit Rating on Debt Refinancing Concerns POE FINANCIAL: Poe & Associates File Modified Amended Plan QUIGLEY CO: Pfizer Objects to U.S. Trustee's Proposed Probe RELIANT ENERGY: Disclosure Statement, Confirmation Schedule OK'd RESOURCE REAL: Fitch Affirms 'B' $28.46 Million Notes Rating RITE AID: S&P Cuts $500MM & $470MM Second-Lien Notes to 'B-' SPANISH BROADCASTING: S&P Junks Corp. Credit Rating; Outlook Neg. SPRINT NEXTEL: Accounting Officer Gregoire Discloses Equity Stake STEVE AND BARRY: Balks Panel's Move to Access Insider Documents SUPERIOR OFFSHORE: Seeks Until November 20 to File Ch.11 Plan TRIBUNE CO: Draws $250 Million of Revolving Credit Line TROPICANA ENT: Seeks to Regain Control of Atlantic City Assets TROPICANA ENT: Steering Panels Supports DIP Facility Amendment TROPICANA ENT: Gets Go-Signal to Enter Into Amended DIP Facility TWEETER HOME: Court Extends Exclusive Period Until December 2 TWEETER HOME: Seeks Until April 29, 2009 to Remove Actions US ENERGY: Has Until December 5 to Solicit Acceptances of Plan VESTA INSURANCE: Haskell, et al., Seek Dismissal of Trustee Action VONAGE HOLDINGS: Extends Expiration Date of Tender Offer to Nov. 3 WASHINGTON MUTUAL: Taps Weil Gotshal as Lead Bankruptcy Counsel WASHINGTON MUTUAL: Taps Richards Layton as Bankruptcy Co-Counsel WASHINGTON MUTUAL: Wants to Hire KCC as Claims and Noticing Agent WATERFORD LAKES: Case Summary & 10 Largest Unsecured Creditors WELLS FARGO: Moody's Lowers Ratings on 53 Tranches from Six RMBS WERNER LADDER: NY Court Transfers $1 Billion Lawsuit to Delaware WEST CONTRA: S&P Lifts Underlying Rating to 'A+' from 'C' WESTERN REFINING: S&P Keeps 'B+' Rating Under Negative CreditWatch WORLDSPACE INC: Files for Chapter 11 Bankruptcy in Delaware WORLDSPACE INC: Case Summary & 30 Largest Unsecured Creditors W.R. GRACE: Court Denies Libby Claimants' 2nd Reconsideration Plea * S&P Takes Rating Actions on Various U.S. CDO Transactions * BOND PRICING: For the Week of Oct. 12 - Oct. 18, 2008 ********* 556 FIRST: Case Summary & Five Largest Unsecured Creditors ---------------------------------------------------------- Debtor: 556 First Street, LLC 556 First Street, Unit 3 Hoboken, NJ 07030 Bankruptcy Case No.: 08-30146 Chapter 11 Petition Date: October 16, 2008 Court: District of New Jersey (Newark) Debtor's Counsel: Anita Lang Walch, Esq. anitalangwalch@aol.com Law Offices of Anita Lang Walch 646A Newark Avenue Jersey City, NJ 07306 Tel: (201) 420-4050 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/njb08-30146.pdf ALEC NAMAN CATERING: Files for Chapter 11 Protection ---------------------------------------------------- Jeff Amy at Press-Register reports that Alec Naman Catering Inc. has filed for bankruptcy reorganization in the U.S. Bankruptcy Court for the Southern District of Alabama. Press-Register relates that the company's owner, Alec Naman said that worsening economic conditions and rising food prices made the company file for bankruptcy on Sept. 29, 2008. "The high food costs really hurt us. We weren't able to adjust our prices because we were locked in contracts with many of our customers," the report quoted Mr. Naman as saying. Alec Naman Catering, says Press-Register, disclosed debts of between $1 million and $10 million, compared to assets of less than $500,000. Mr. Naman said that the company has 140 full-time employees and 60 part-time workers. According to court documents, the company estimates that no money will be available to pay unsecured creditors and that it owes money to more than 150 creditors. According to Press-Register, Alec Naman Catering had large debts due to recent expansions that dramatically increased its size. Alec Naman Catering failed to find new financing or win concessions from lenders due, in part, to decreased lending by banks that has marked the worldwide financial crisis, the report says, citing Mr. Naman. Press-Register states that Alec Naman Catering is facing a lawsuit by Whitney National Bank, who claimed that the company failed to pay a debt that now totals more than $340,000. The city of Mobile, Mobile County, and Alabama Revenue Department filed a lawsuit against Mr. Naman in August and September for failing to pay sales taxes. According to the report, Mobile County claims that Alec Naman Catering owes it about $156,464 and the city claims Mr. Naman owes $65,779. Those cases, says the report, were frozen after Alec Naman Catering filed for bankruptcy. Employee leasing company Staff USA also sued Mr. Naman in May 2008, claiming that Mr. Naman failed to pay $85,000 in debt. Staff USA had filed a lawsuit against Mr. Naman in 2003 for his alleged failure to send checks to Staff USA to pay taxes, insurance, and other benefits due Alec Naman Catering's workers. Mr. Naman, according to Press-Register, claimed that Staff USA used his money to cover its expenses, instead of paying expenses for the workers. Court records indicate that Mr. Naman and Staff USA appear to have settled the earlier suit. About Alec Naman Catering Mobile, Alabama-based Alec Naman Catering Inc. offers catering services provides food at three local stadiums. It is owned by Alec Naman. It runs Naman's Midtown Market, a restaurant and specialty grocery at the corner of Old Shell Road and North Florida Street, and Naman's Middle Bay Cafe, a restaurant at the University of South Alabama's Brookley Center. The company also provides food at three local stadiums. Other Naman family businesses, including Naman's Meat Co. and Naman's Department Store, aren't connected to Alec Naman or Alec Naman Catering. Alec Naman Catering, Inc., filed for chapter 11 protection on Sept. 29, 2008 (Bankr. S. D. Ala. Case No. 08-13689). Irvin Grodsky, Esq., represents the company in its restructuring effort. The company listed assets of $100,000 to $500,000 and debts of $1,000,000 to $10,000,000. AMCORE FINANCIAL: Asset Quality Slide Cues Fitch to Cut Ratings --------------------------------------------------------------- Fitch Ratings has downgraded the long-term Issuer Default Ratings and Individual Ratings on AMCORE Financial, Inc. and AMCORE Bank, N.A.: AMFI -- Long-term IDR to 'BB-' from 'BB+'; -- Individual to 'D' from 'C'. AMCORE Bank -- Long-term IDR to 'BB' from 'BB+'; -- Individual to 'C/D' from 'C'. In addition, Fitch has placed the long-term IDR, individual ratings, and long-term deposit rating on Negative Rating Watch. AMFI's ratings downgrade comes on significant further deterioration in asset quality, a pressured parent company liquidity position, relatively lean capital position, and an increased reliance on wholesale funding. AMFI's level of nonperforming assets at Sept. 30, 2008 increased to approximately 5.29% of loans and foreclosed real estate, up considerably from 2.95% at March 31, 2008. The deteriorating asset quality pressured earnings, and AMFI reported a significant loss for the quarter. Fitch expects earnings to remain pressured in the near term with higher levels of non-accrual assets and chargeoffs. AMFI is currently under a Written Agreement with regulators related to weaknesses in the bank's commercial lending area. This regulatory action requires the bank to improve credit underwriting and administration practices. The Negative Watch reflects the potential for further deterioration in AMFI's financial flexibility over the near term as the credit cycle progresses. The parent company liquidity profile is also under pressure. With approximately $11 million in cash as of Sept. 30, 2008 and no bank dividend capacity to the parent in the foreseeable future, AMFI's ability to meet parent obligations could become challenged. AMFI has taken some steps to address this issue and is currently in the process of taking additional steps to enhance parent company flexibility. Regulatory capital ratios as of September 30, 2008 do not afford much cushion above regulatory well-capitalized guidelines, with the bank total risk-based capital ratio at 10.45%. While recent wholesale borrowings have been laddered out, AMFI has reported an increased reliance on wholesale funding. Somewhat offsetting these rating drivers are AMFI's strong market share in its home market of Rockford, Illinois, improved geographic diversification, and continued efforts to fortify its executive management team by adding industry veterans from larger Midwest banking institutions. Fitch has downgraded these ratings: AMCORE Financial, Inc. -- Long-term IDR to 'BB-' from 'BB+'; -- Individual to 'D' from 'C'. AMCORE Bank, N.A. -- Long-term IDR to 'BB' from 'BB+'; -- Individual to 'C/D' from 'C'; -- Long-term deposits to 'BB' from 'BBB-'; -- Short-term deposits to 'B' from 'F3'. In addition, Fitch has affirmed these ratings: AMCORE Financial, Inc. AMCORE Bank, N.A. -- Short-term IDR 'B'; -- Support '5'; -- Support Floor 'NF'. AMERICAN FIBERS: Gets Final OK to Use $7.7 Million GECC Facility ---------------------------------------------------------------- The Hon. Peter J. Walsh of the United States Bankruptcy Court for the District of Delaware authorized American Fibers and Yarns Company and AFY Holding Company to obtain, on a final basis, up to $7,700,000 in debtor-in-possession financing under a revolving credit facility with General Electric Capital Corporation, as lender. On Oct. 8, 2008, the Official Committee of Unsecured Creditors objected to the Debtors' request. "The terms of the DIP facility are to onerous and the Dec. 6, 2008, expiration for the DIP facility simply does not provide sufficient time for [it] to pursue sale alternatives that may maximize the value of the Debtors' assets for the benefit of all creditors," the Committee argued. "...the DIP facility pales in comparison to the burdens imposed on the Debtors and the substantial benefits that are provided to the [lender]," the Committee continued. According to the Troubled Company Reporter on Sept. 30, 2008, the Court allowed the Debtors to access as much as $2,653,237 in financing from the lender, on the interim. The Court authorized the Debtors to use cash collateral securing repayment of the secured loan to the lenders. The Debtors entered into a loan and security agreement dated June 28, 2005, with the lender to provide at least $12,000,000 in revolving credit facility. As of the company's bankruptcy filing, the company has $7.6 million outstanding on account of revolving credit loans and $115,000 on account of issued but undrawn letters of credit. Furthermore, as collateral security for all of the obligations of the company, GE was granted a first priority lien and security interest on substantially all of the company's assets. The Debtors told the Court that they have an immediate need to use financing to facilitate, among other things, their efforts to continue to operate their businesses while they liquidate their assets. The committed $7,700,000 DIP financing will incur a floating rate equal to the Index Rate plus 1.25% per annum. The lender will be paid a non-refundable closing fee of $200,000, payable and fully earned at closing. To secure the Debtors' DIP obligations, the lender will be granted priority over any and all administrative expenses and fees payable under Section 28 of the United States Bankruptcy Code. Moreover, all financing under the DIP loan will be secured by a first priority security interest in, and lien upon, all unencumbered assets of the Debtors. The DIP facility is subject to a $300,000 carve-out to pay fees and expenses incurred by professional advisors retained by the Debtors and the any committee. The DIP facility contains customary and appropriate events of default. A full-text copy of the postpetition loan agreement between the Debtors and the lender is available for free at: http://ResearchArchives.com/t/s?32ae A full-text copy of the Debtors' 13 Week Cash Flow Budget is available for free at: http://ResearchArchives.com/t/s?3402 A full-text copy of the Official Committee of Unsecured Creditors' motion to object debtor-in-possession financing is available for free at: http://ResearchArchives.com/t/s?3405 Headquartered in Chapel Hill, North Carolina, American Fibers and Yarns Company -- http://www.afyarns.com/-- is a supplier of dyed yarns to the automotive and apparel industries. The company and its affiliates, AFY Holding Company, filed for Chapter 11 protection on Sept. 22, 2008 (Bankr. D. Del. lead case no. 08- 12176). Edward J. Kosmowski, Esq., and Michael R. Nestor, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Debtors selected RAS Management Advisors LLC as proposed financial advisor. Epiq Bankruptcy Solution will serve as the Debtors' claims agent. The U.S. Trustee for Region 3 appointed creditors to serve on an Official Committee of Unsecured Creditors. The Committee selected Lowenstein Sandler PLC as its counsel and Ashby & Geddes PA as its Delaware Counsel. When the Debtors filed for protection from their creditors, they listed assets and debts between $10 million and $50 million. AMERICAN HOME: Moody's Lowers Ratings on 62 Loan Tranches --------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 62 tranches from 8 transactions issued by American Home. Of these, 4 continue to remain on review for further possible downgrade. Additionally, 2 senior tranches were placed on review for possible downgrade. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, Alt-A mortgage loans. Ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. Also, for certain seasoned deals, step-down, or the possibility thereof, is likely to cause further erosion of credit support from subordination. Moody's Investors Service has also published the underlying rating on one insured note as identified below, and has taken action on it accordingly. The underlying ratings reflect the intrinsic credit quality of the notes in the absence of the guarantee. The ratings on securities that are guaranteed or "wrapped" by a financial guarantor is the higher of a) the rating of the guarantor or b) the published underlying rating. The current ratings on the below notes are consistent with Moody's practice of rating insured securities at the higher of the guarantor's insurance financial strength rating and any underlying rating that is public. The actions described below are a result of Moody's on-going review process. Complete rating actions are: Issuer: American Home Mortgage Assets Trust 2005-1 -- Cl. 1-A-1, Downgraded to Aa3 from Aaa -- Cl. 2-A-2-2, Downgraded to A1 from Aa1 -- Cl. 3-A-1-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-2-2 Placed on Review for Possible Downgrade, currently Aaa Issuer: American Home Mortgage Assets Trust 2005-2 -- Cl. 1-A-1, Downgraded to Ba2 from Aaa -- Cl. 1-X, Downgraded to Ba2 from Aaa -- Cl. 2-A-1A, Downgraded to Ba1 from Aaa -- Cl. 2-A-1B, Downgraded to B3 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. 1-B-1, Downgraded to Ca from B2 -- Cl. 1-B-2, Downgraded to Ca from Caa1 -- Cl. 1-B-3, Downgraded to C from Ca -- Cl. 2-B-1, Downgraded to Ca from B3 -- Cl. 2-B-2, Downgraded to C from Ca -- Cl. 2-B-3, Downgraded to C from Ca -- Cl. 2-B-4, Downgraded to C from Ca Issuer: American Home Mortgage Investment Trust 2004-3 -- Cl. MH-1, Downgraded to A3 from Aa2 -- Cl. MF-1, Downgraded to A1 from Aa2 -- Cl. MF-2, Downgraded to Baa1 from A2 -- Cl. MF-3, Downgraded to B1 from Baa2 Issuer: American Home Mortgage Investment Trust 2004-4 -- Cl. I-A-2, Downgraded to Aa3 from Aaa -- Cl. II-A-2, Downgraded to Aa1 from Aaa -- Cl. M-1, Downgraded to Baa2 from Aa2 -- Cl. VI-B-2, Downgraded to Ba1 from Baa2 -- Cl. VI-B-3, Downgraded to B1 from Baa3 Issuer: American Home Mortgage Investment Trust 2005-1 -- Cl. I-A-3, Downgraded to Aa2 from Aaa -- Cl. II-A-1, Downgraded to Aa1 from Aaa -- Cl. II-A-2, Downgraded to Aa3 from Aaa -- Cl. VI-A, Downgraded to Aa2 from Aaa -- Cl. VIII-A-1, Downgraded to Aa3 from Aaa -- Cl. VIII-A-2, Downgraded to A1 from Aaa Issuer: American Home Mortgage Investment Trust 2005-2 -- Cl. I-A-2, Downgraded to Aa1 from Aaa -- Cl. I-A-3, Downgraded to Aa3 from Aaa -- Cl. II-A-1, Downgraded to Aa1 from Aaa -- Cl. II-A-2, Downgraded to Aa1 from Aaa -- Cl. III-A, Downgraded to Aa2 from Aaa -- Cl. IV-A-1, Downgraded to Aa1 from Aaa -- Cl. IV-A-2, Downgraded to Aa1 from Aaa -- Cl. V-A-1, Downgraded to A1 from Aaa -- Cl. V-A-3, Downgraded to Aa3 from Aaa -- Cl. V-A-4-A, Downgraded to A1 from Aaa -- Cl. V-A-4-C, Downgraded to A1 from Aaa -- Cl. V-A-4-D, Downgraded to Aa3 from Aaa, Placed Under Review for further Possible Downgrade Financial Guarantor: Ambac Assurance Corporation (Aa3 on review for possible downgrade) -- Underlying Rating: A1 -- Cl. M-1, Downgraded to Baa1 from Aa1 -- Cl. V-M-1, Downgraded to Baa1 from Aa1 -- Cl. M-2, Downgraded to Baa2 from Aa2 -- Cl. V-M-2, Downgraded to Baa2 from Aa2 -- Cl. M-3, Downgraded to Baa3 from Aa3 -- Cl. V-M-3, Downgraded to Baa3 from Aa3 Issuer: American Home Mortgage Investment Trust 2005-3 -- Cl. I-A-2, Downgraded to Aa3 from Aaa -- Cl. II-A-4, Downgraded to Aa3 from Aaa -- Cl. III-A-1, Downgraded to Aa3 from Aaa -- Cl. III-A-4, Downgraded to Aa3 from Aaa -- Cl. M-1, Downgraded to A3 from Aa1 -- Cl. M-2, Downgraded to Ba1 from A1 -- Cl. M-3, Downgraded to B3 from Baa2 -- Cl. M-4, Downgraded to Caa3 from Ba1 Issuer: American Home Mortgage Investment Trust 2007-2 -- Cl. I-1A-2, Downgraded to A1 from Aaa -- Cl. I-2A-1, Downgraded to A2 from Aaa -- Cl. I-3A-1, Downgraded to A1 from Aaa -- Cl. I-1A-3, Downgraded to B1 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. I-2A-2, Downgraded to B1 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. I-3A-2, Downgraded to B1 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. I-M-1, Downgraded to Caa3 from Aa3 -- Cl. I-M-2, Downgraded to Ca from Baa2 AMERICAN INT'L: Sens. Want Halt on Mortgage Law Change Efforts -------------------------------------------------------------- Elizabeth Williamson at The Wall Street Journal reports that Senator Dianne Feinstein of California, and Senator Mel Martinez of Florida asked American International Group Inc. on Friday to stop using taxpayers money in its effort to diminish the new federal controls over the mortgage industry. WSJ relates that after receiving an emergency loan from the government, in exchange of an 80% stake in the firm, AIG has continued to lobby states implementing a federal law that subjects mortgage originators to greater scrutiny. Under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, mortgage originators must be licensed by the states, and that they must supply comprehensive background information so regulators can better track their activities. WSJ states that bank regulators have been fighting for the law, saying that if they had been better able to track mortgage loan originators, they could have stopped some fraudulent practices that led to AIG's problems. WSJ reports that AIG, along with Citigroup Inc., and HSBC Holdings PLC, have engaged in a state-by-state effort to win concessions as states implement the law, saying that the licensing fees are too expensive, and that the information required from originators could lead to privacy violations. The companies, the report says, want greater transparency over how the licensing fees are to be spent by the states. According to WSJ, Sens. Feinstein and Martinez said in their letter to AIG Chief Executive Edward Liddy, "We find it unconscionable that AIG would take advantage of these taxpayer loans while paying lobbyists to rollback taxpayer protections against misrepresentations, deception, and fraud in mortgage lending. This crisis was stoked, in part, by abusive and predatory lending practices that were made possible by lax mortgage industry standards and oversight. We hope AIG will immediately cease all efforts to undermine strong licensing and oversight standards for the mortgage industry." About American International 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 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 the 'A+' counterparty credit and financial strength ratings on most of AIG's insurance operating subsidiaries -- to CreditWatch developing from CreditWatch negative. S&P raised its ratings on preferred stock of International Lease Finance Corp. (ILFC; A-/Watch Dev/A-1) to 'BBB' from 'B', and revised the CreditWatch implications to developing from negative. All other ILFC ratings remain on CreditWatch with developing implications. 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. ARCHCO VENTURES: Case Summary & Two Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Archco Ventures, Inc. 4805 Golden Foothill Pkwy. El Dorado Hills, CA 95762 Bankruptcy Case No.: 08-34876 Type of Business: The Debtor operates a consultancy firm. See: http://www.arch-co.com/ Chapter 11 Petition Date: October 15, 2008 Court: Eastern District of California (Sacramento) Judge: Christopher M. Klein Debtor's Counsel: W. Steven Shumway, Esq. 2140 Professional Dr. #250 Roseville, CA 95661 Tel: (916) 789-8821 Estimated Assets: Less than $50,000 Estimated Debts: $1 million to $10 million A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/califeb08-34876.pdf ASSET FAMILY: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Asset Family Co. LLC 15760 Ventura Blvd., #A7 Encino, CA 91436 Bankruptcy Case No.: 08-18110 Chapter 11 Petition Date: October 16, 2008 Court: Central District Of California (San Fernando Valley) Judge: Maureen Tighe Debtor's Counsel: Barry K. Rothman, Esq. Law Offices of Barry K. Rothman 1901 Ave. Of The Stars, Suite 370 Los Angeles, CA 90067 Tel: (310) 557-0062 Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $10 million The Debtor does not have any creditors who are not insiders. BALLANTYNE RE: Fitch Cuts $250 Million Class Notes Rating to 'CCC' ------------------------------------------------------------------ Fitch Ratings downgraded, removed from Rating Watch Negative, and assigned Distressed Recovery ratings to the classes of Ballantyne Re Plc: -- $250,000,000 class A-1 floating-rate notes to 'CCC/ DR4' from 'B+'; -- $10,000,000 class B-1 subordinated notes to 'C/DR6' from 'B'; -- $40,000,000 class B-2 subordinated floating-rate notes to 'C/DR6 from 'B'. Fitch also affirmed the 'AAA' ratings of the class A-2, series B floating-rate guaranteed notes. Ballantyne Re holds significant amounts of residential-mortgage- backed and asset-backed securities in the asset portfolios supporting its reserves. These assets have experienced material mark-to-market declines, which previously resulted in the deferral and accrual of interest on the class B-1 and B-2 notes and a substantial write-down of the accrued interest and principal of Ballantyne Re's class C notes. On March 7, 2008, Fitch placed the Class A-1, B-1 and B-2 notes on Rating Watch Negative to reflect Fitch's continued concern about declining subprime and Alt-A residential RMBS/ABS market values and growing life insurance reserves on Ballantyne Re's block of business. Subprime and Alt-A residential RMBS/ABS market values continued to decline since that time, resulting in a significant write-down of Ballantyne's asset portfolio as of June 30, 2008. The term life insurance book of business continues to perform within expectations. Although life insurance reserves grow over time due to the accretion of interest, Ballantyne has completed a number of recapture transactions, which mitigate the growth in those life insurance reserves. Nonetheless, absent a remarkable recovery in subprime and Alt-A residential RMBS/ABS market values, Fitch does not expect holders of the class B-1 or B-2 notes to receive additional principal or interest payments. Additionally, Fitch believes there is a real possibility that holders of the class A-1 notes will eventually fail to receive future interest or principal payments as scheduled. The Default Recovery ratings reflect Fitch's expectations, based on current values of the asset portfolio, that series A-1 noteholders would recover 30%-50% in a default situation and that series B-1 and B-2 noteholders would have no recovery in a default situation. The 'AAA' ratings of Ballantyne Re's class A-2, series B floating- rate guaranteed notes are linked to the financial strength of the relevant financial guarantor. Ballantyne Re is a special purpose public limited company incorporated and registered in Ireland. The company was established for the limited purpose of entering into a reinsurance agreement with Scottish Re Inc., and conducting activities related to the notes' issuance. Under the reinsurance agreement, SRUS ceded a block of business to Ballantyne Re. Ballantyne Re issued the notes to finance excess reserve requirements under Regulation XXX for the ceded block of business. BALTIMORE GAS: MidAmerican Seeks State Gov't Okay on Acquisition ---------------------------------------------------------------- Shara Tibken at The Wall Street Journal reports that Warren Buffett's MidAmerican Energy Holding Co. is seeking the Maryland Public Service Commission's approval on the deal to acquire Constellation Energy Group Inc. and its unit, Baltimore Gas & Electric Co. As reported in the Troubled Company Reporter on Sept. 25, 2008, MidAmerican Energy and Constellation Energy reached a tentative agreement in which MidAmerican will purchase all of the outstanding shares of Constellation Energy for a cash consideration of approximately $4.7 billion. Simultaneous with execution of the Merger Agreement, MidAmerican agreed to make a $1 billion investment into Constellation, in exchange for shares of 8% convertible preferred stock of Constellation. The Stock Purchase Agreement provides for the private placement of 10,000 shares of Series A Convertible Preferred Stock of Constellation for an aggregate purchase price of $1 billion. The Series A Preferred Stock is convertible into shares of Company Common Stock and senior unsecured promissory notes of Constellation. WSJ reports that some Constellation Energy shareholders were upset by MidAmerican Energy's $26.50-per-share offer, after the company had been trading at over $100 earlier in the year. According to WSJ, MidAmerican Energy told the Maryland Public Service Commission that its purchase of Constellation Energy and Baltimore Gas would stabilize the troubled utilities and curb rate increases. The acquisition deal comes along with the company's plan to decrease and delay planned Baltimore Gas rate requests, the report says, citing MidAmerican Energy's President and CEO Gregory E. Abel. MidAmerican Enery said that it will cut in half the 5% cap to be applied to any increase in an electric distribution rate case filed by Baltimore Gas next year, and that the company won't file the next Baltimore Gas electric and natural gas distribution rate cases until January 2011, WSJ states. Baltimore Gas' gas and electric base distribution rates in 2010 and the first half of 2011 won't increase, which would mean a benefit of as much as $70 million for clients, the report says, citing MidAmerican Energy. MidAmerican Energy, according to WSJ, said it will keep Constellation Energy's headquarters in Baltimore. Citing MidAmerican Energy, the report says that Constellation Energy's Chairperson and CEO Mayo A. Shattuck III waived his right to receive cash severance as a result of the merger, instead donating the amount to the Constellation Energy Group Foundation. WSJ reports that Constellation Energy's board already approved the deal. About MidAmerican Energy Holdings MidAmerican Energy Holdings Company, based in Des Moines, Iowa, is a global provider of energy services. Through its energy-related business platforms, MidAmerican provides electric and natural gas service to more than 6.9 million customers worldwide. These business platforms are Pacific Power, Rocky Mountain Power and PacifiCorp Energy, which comprise PacifiCorp; MidAmerican Energy Company; CE Electric UK; Northern Natural Gas Company; Kern River Gas Transmission Company; and CalEnergy. About Constellation Energy Constellation Energy -- http://www.constellation.com-- a FORTUNE 125 company with 2007 revenues of $21 billion, says it is the nation's largest competitive supplier of electricity to large commercial and industrial customers and the nation's largest wholesale power seller. Constellation Energy also manages fuels and energy services on behalf of energy intensive industries and utilities. It owns a diversified fleet of 83 generating units located throughout the United States, totaling approximately 9,000 megawatts of generating capacity. The company delivers electricity and natural gas through the Baltimore Gas and Electric Company (BGE), its regulated utility in Central Maryland. About Baltimore Gas Baltimore Gas and Electric Company -- http://www.bge.com/-- is an electric transmission and distribution utility company and a gas distribution utility company with a service territory that covers the City of Baltimore and all or part of 10 counties in central Maryland. BGE's electric service territory includes an area of approximately 2,300 square miles. There are no municipal or cooperative wholesale customers within BGE's service territory. BGE's gas service territory includes an area of approximately 800 square miles. BGE's electric and gas revenues come from residential, commercial and industrial customers. As reported in the Troubled Company Reporter on Aug. 22, 2008, Moody's Investors Service affirmed the Ba1 preference stock rating on Baltimore Gas and Electric Company. Moody's said the outlook is stable. BANKERS OF RUPTCY: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Bankers of Ruptcy Hypothecaters & Wholesalers a U B O aka J-son & Affiliates Foreclosure Eviction Bankruptcy Research-ologist aka All Tenants Subtenants Named Claimants & other Occupants of the Premises aka All Unknown Occupants 2515 W 54th St. # A Los Angeles, CA 90043 Bankruptcy Case No.: 08-27335 Type of Business: The Debtor is a pecuniary emancipators. Chapter 11 Petition Date: October 16, 2008 Court: Central District Of California (Los Angeles) Judge: Alan M. Ahart Debtor's Counsel: Benjamin B. Wasson, Esq. Law Offices of Benjamin B. Wasson 4403 Morse Avenue Studio City, CA 91604 Tel: (310) 293-3657 Fax: (818) 728-9608 Estimated Assets: $100 million to $500 million Estimated Debts: $10 million to $50 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Clearinghouse Community $740,000 Development Financial Chicago Title Company Jeremiah Aguolu, M.D. $95,640 211 North Prairie Avenue Inglewood, California 80301 Internal Revenue Service $58,400 Fresno, California Kennith Crocket $21,640 State of California $18,540 501 C3 Outsourcing Founding $15,490 Jonathan Lee, M.D. $7,650 Sanitec West $1,850 Venison California $2,800 Mr. R. Hill $2,570 Employment Development Dept. $2,500 Mr. L. Gaston $1,895 T. Burton $1,533 Dr. Daniel Kutus $1,250 Southern California Edison $1,250 Los Angeles Department of Water $800 and Power Alvin Brown $216 The Rosa & Raymond Parks Wooden $100 Cloth Pen Research Institute City of Inglewood unknown SBC Phone Company unknown BEAR STEARNS: Fitch Holds Low-B Ratings on Six Class Certificates ----------------------------------------------------------------- Fitch Ratings has affirmed all classes of notes for Bear Stearns Commercial Mortgage Securities Trust's commercial mortgage pass- through certificates, series 2007-TOP28, and assigned Rating Outlooks as outlined below: -- $73.5 million class A-1 at 'AAA'; Outlook Stable; -- $63.2 million class A-2 'AAA'; Outlook Stable; -- $79.8 million class A-3 at 'AAA'; Outlook Stable; -- $76.4 million class A-AB at 'AAA'; Outlook Stable; -- $841.7 million class A-4 at 'AAA'; Outlook Stable; -- $145.6 million class A-1A at 'AAA'; Outlook Stable; -- $176.1 million class A-M at 'AAA'; Outlook Stable; -- $114.5 million class A-J at 'AAA'; Outlook Stable; -- Interest-only class X-1 at 'AAA'; Outlook Stable; -- Interest-only class X-2 at 'AAA'; Outlook Stable; -- $30.8 million class B at 'AA'; Outlook Stable; -- $15.4 million class C at 'AA-'; Outlook Stable; -- $28.6 million class D at 'A'; Outlook Stable; -- $22.0 million class E at 'A-'; Outlook Stable; -- $17.6 million class F at 'BBB+'; Outlook Stable; -- $19.8 million class G at 'BBB'; Outlook Stable; -- $15.4 million class H at 'BBB-'; Outlook Stable; -- $2.2 million class J at 'BB+'; Outlook Stable; -- $2.2 million class K at 'BB'; Outlook Stable; -- $2.2 million class L at 'BB-'; Outlook Stable; -- $4.4 million class M at 'B+'; Outlook Stable; -- $4.4 million class N at 'B'; Outlook Stable; -- $2.2 million class O at 'B-'; Outlook Stable. Fitch does not rate the $17.6 million class P. The rating affirmations reflect minimal paydown since issuance and stable performance of the pool. As of the September 2008 distribution date, the transaction has paid down by 0.31% to $1.756 billion from $1.761 billion at issuance. Rating Outlooks reflect the likely direction of any rating changes over the next one to two years. There are no scheduled maturities until 2011. There have been no specially serviced loans since issuance. Fitch has identified seven loans as Loans of Concern. The largest Fitch Loan of Concern is secured by a hotel property in Bend, Oregon. The servicer reported DSCR for the year end 2007 is 0.84 times. However, 28 rooms were not added until September 2007, which should increase room revenue for 2008. There are nine shadow rated loans within the transaction (22.5%). The largest, Easton Town Center (9.7%) is secured by a regional mall located in Columbus, Ohio. Occupancy as of June 30, 2008 was 93%, consistent with the occupancy at issuance. The third largest shadow rated loan, Cove Apartments (1.7%), reported an 28% drop in net operating income for the first quarter of 2008 as compared to at issuance. Occupancy at the property, located in Phoenix, Arizona, has dropped to 78.7% from 91% at issuance due to the submarket's decline in employment growth and oversupply of rental units. Fitch will continue to monitor this loan's performance. All of the loans maintain investment grade shadow ratings. BILL HEARD: Opposes GMAC's Repossession of Unsold Autos ------------------------------------------------------- Bill Rochelle of Bloomberg News reports that Bill Heard Enterprises, Inc., and its debtor-affiliates say it's in discussions to sell "several" dealerships. Although Heard allowed JPMorgan Chase Bank NA to repossess unsold autos subject to the bank's lien, the Debtors are opposed to allowing the same for GMAC, LLC, according to the report. The Debtors, according to the report, say that having an adequate inventory of autos "significantly aids" the negotiations. 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. BON-TON STORES: S&P Cuts Sr. Unsec. Rating to CCC; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered the corporate credit rating on York, Pennsylvania-based Bon-Ton Stores Inc. to 'B-' from 'B' and the senior unsecured rating to 'CCC' from 'CCC+'. The outlook is stable. "The rating change reflects our belief that the company will be more challenged than previously expected by the current weak economic environment in the U.S.," explained Standard & Poor's credit analyst Diane Shand, "and that credit metrics will deteriorate more than we had originally projected as a result of a deepening spending pull-back by consumers." BURGER KING: Fitch Lifts Issuer Default Rating to 'BB' ------------------------------------------------------ Fitch Ratings has upgraded the long-term Issuer Default Rating for Burger King Corporation to 'BB' from 'BB-', affirmed the company's secured credit facility rating at 'BB+' and revised the Rating Outlook to Positive. At June 30, 2008, Burger King had $947 million of debt, most of which is secured. The rating actions reflect continued improvement in Burger King's credit profile due to positive same-store sales momentum, substantial cash flow growth and stable debt balances. Burger King's strengthening financial condition and competitive position in the quick service restaurant sector should enable the company to perform well despite on-going pressure on consumer discretionary spending and a difficult commodity cost environment. Absent material deterioration in operating performance and credit measures, ratings could be upgraded. Given the challenging operating environment, the continued prudent use of cash flow will also be critical to any additional ratings upgrade. During the fiscal year ended June 30, 2008, world-wide SSS grew 5.4%, up from 3.4% in fiscal 2007 and annual average restaurant sales increased 9% to $1.3 million. Burger King's 18 consecutive quarters of positive world-wide SSS growth have been driven by the steady launch of appealing premium and value priced menu offerings; such as the Steakhouse Burger and the BK Breakfast Value Menu. Fitch anticipates that the company's robust new product pipeline and on-going implementation of longer competitive hours of operation will continue to support SSS growth. Burger King's WW company operated restaurant margin declined 70 basis points to 14.3% during fiscal 2008; due primarily to higher beef, cheese and other food costs. Nonetheless, strong revenue growth in the company's higher margin franchise operations combined with effective general and administrative cost management resulted in EBITDA margin expansion of 130 bps to 18.3%. Cash flow from operations increased to $243 million as operating income increased 21.6% to $354 million and the company benefited from a significant reduction in tax-related accrued liabilities. Burger King's cash flow comfortably covers its capital expenditure requirements, which have increased over the past year due to heightened unit remodeling, rebuilding and expansion activity. The company also continues to proactively manage its restaurant portfolio to optimize growth. In fiscal 2008, Burger King utilized $31 million of free cash flow along with approximately $27 million of proceeds from refranchising 38 company units to acquire 83 units from franchisees. The company intends to maintain its mix of franchised to company unit ownership at approximately 90/10 but plans to reduce concentration among its top franchisees over time. Burger King's total debt and cash balance remained relatively stable at $947 million and $166 million, respectively, at June 30, 2008. While these acquisitions were strategic in nature and the financial health of the Burger King system has improved, due to the current economic downturn, Fitch has factored in an increased pace of franchise unit purchases into the ratings. Burger King's liquidity is supported by the $73 million available on its $150 million revolver at June 30, 2008 and the fact that the company does not have any significant maturities until its revolver expires in June of 2011. For the year ended June 30, 2008, Burger King's adjusted leverage was 3.5 times, versus 3.9x for the 2007 fiscal year. Adjusted interest coverage was 2.9x and funds from operations fixed charge coverage was 2.1x; up from 2.5x and 2.0x, respectively, during the previous year. Burger King has substantial room under its bank financial covenants. These covenants include; but are not limited to, maximum leverage of 4x through June 30, 2008, 3.5x through June 30, 2009 and 3.0x thereafter. At June 30, 2008, Burger King was in full compliance with this measure at 1.8x. Burger King Holdings operates the world's No.2 fast food hamburger chain with approximately 15% market share. At June 30, 2008, the company's 11,565 units, of which 65% were located in North America and 35% were international, generated approximately $15 billion in system-wide sales. Approximately 88% are owned and operated by franchisees and 12% are operated by the company. In 2008, Burger King's three geographic reporting segments made the following contributions to revenue and operating income: N.A., Europe, the Middle East and Africa/Asia Pacific, and Latin America. Private equity owners TPG Capital, Bain Capital Partners and Goldman Sachs Funds have reduced their ownership to 32% from 60% during fiscal 2007. CBRE REALTY: Moody's Affirms Ratings on Overall Stable Performance ------------------------------------------------------------------ Moody's Investors Service affirmed the ratings of 10 classes of Notes issued by CBRE Realty Finance CDO 2006-1, Ltd. as: -- Class A-1, $375,000,000, Floating Rate Secured Notes Due 2046, affirmed at Aaa -- Class A-2, $33,000,000, Floating Rate Secured Notes Due 2046, affirmed at Aaa -- Class B, $34,500,000, Floating Rate Secured Notes Due 2046, affirmed at Aa2 -- Class C, $15,000,000, Floating Rate Secured Deferrable Interest Notes Due 2046, affirmed at A1 -- Class D, $13,500,000, Floating Rate Secured Deferrable Interest Notes Due 2046, affirmed at A3 -- Class E, $9,000,000, Floating Rate Secured Deferrable Interest Notes Due 2046, affirmed at Baa1 -- Class F, $10,500,000, Floating Rate Secured Deferrable Interest Notes Due 2046, affirmed at Baa1 -- Class G, $13,500,000, Floating Rate Secured Deferrable Interest Notes Due 2046, affirmed at Baa3 -- Class J, $24,000,000, Fixed Rate Secured Deferrable Interest Notes Due 2046, affirmed at Ba2 -- Class K, $20,250,000, Fixed Rate Secured Deferrable Interest Notes Due 2046, affirmed at B2 Moody's is affirming this transaction due to overall stable pool performance based on the Trustee Report dated September 19, 2008 and information from the Collateral Manager. CBRE Realty Finance CDO 2006-1, Ltd.. is a collateralized debt obligation backed by a portfolio of CMBS CUSIP bonds, whole loans, B-Notes, and mezzanine loans. Based on the Trustee Report dated September 19, 2008, the transaction's aggregate bond balance totals $600 million, the same as at issuance. The ramp-up period ended on October 19, 2006, and the reinvestment period ends on April 25, 2011. The transaction is in compliance with all the applicable collateral quality and coverage tests. The rating actions reflect Moody's evaluation of the expected loss associated with each class of Notes based on the level of subordination under the notes and the credit quality of the underlying collateral pool. Moody's periodically completes full reviews in addition to monitoring transactions on a monthly basis. Moody's prior full review was completed on the October 19, 2006 effective date. The most recent rating action is summarized in a Presale Report dated February 24, 2006. Moody's has published rating methodologies outlining its analytical approach to surveillance and its approach to rating revolving commercial real estate collateralized debt obligations. In addition, Moody's has published numerous articles outlining our ratings approach to the various collateral types customarily deposited within these transactions along with other articles on credit issues unique to the sector. The major rating methodologies employed in analyzing this transaction include: CMBS: Moody's Approach to Rating Revolving Facilities in CDOs Backed by Commercial Real Estate Securities, July 29, 2004 -- this paper details the revolver impact on credit quality, key revolver criteria applicable at the pool level, asset level criteria for whole loans, B-Notes, and mezzanine debt, the provision for periodic review, and compliance mechanisms; and The Inclusion of Commercial Real Estate Assets in CDOs, October 8, 1999 -- this paper describes the development of commercial real estate backed CDOs, speaks to collateral pool analysis including industry classifications, diversification, credit quality, recovery rate, and cash flow characteristics, and refers to other aspects of CMBS as CDO collateral including prepayment risk, sequential pay structure, ability to defer interest payments temporarily, servicer advancing, losses, extension risk, recovery rates, and servicer risk. CENTRAL ILLINOIS: Fitch Lifts 'BB+' Pref. Stock Rating to 'BBB' --------------------------------------------------------------- Fitch Ratings has upgraded the Issuer Default Ratings of Ameren Corp.'s Illinois utility subsidiaries as: Central Illinois Light Company to 'BBB' from 'BB+' and Central Illinois Public Service Company, Illinois Power Co. and CILCORP to 'BBB-' from 'BB+'. Fitch has also raised the instrument ratings for each entity as shown in the table below. Concurrent with this action, the ratings of each entity are removed from Rating Watch Positive. The Rating Outlook is Stable. The ratings of Ameren Corp. (IDR 'BBB+', Outlook Stable), Union Electric Co. (IDR 'A-', Outlook Negative) and Ameren Energy Generating Company (IDR 'BBB+', Outlook Stable) are unaffected by today's ratings actions. The rating upgrades and Stable Outlook reflect the expected positive financial impact of electric and gas rate case decisions recently issued by the Illinois Commerce Commission. Both CIPS and CILCO were granted electric and gas rate increases effective Oct. 1, 2008, that are expected to improve credit quality measures to a level supportive of the new ratings. CILCO was required to moderately lower its electric and gas rates. However, even with the rate reductions CILCO's credit quality measures are expected to be supportive of the new ratings. The ratings also recognize the reduction in business risk that resulted from the 2007 Illinois Settlement Agreement, which affirmed the Illinois utilities' right to recover power procurement costs from customers. Rising capital expenditures to meet environmental compliance standards are among the primary credit concerns. CILCO subsidiary AmerenEnergy Resources Generating Co. owns approximately 1,074 megawatts of coal-fired electric generation in Illinois that will require significant investment over the next several years. Similarly, Ameren subsidiaries Union Electric Company and Ameren Energy Generating Co. own 5,422 MW and 2,549 MW, respectively, of coal-fired electric generation. These ratings have been upgraded and assigned a Stable Ratings Outlook: Central Illinois Public Service Company -- IDR to 'BBB-' from 'BB+'; -- Senior secured debt to 'BBB+' from 'BBB'; -- Senior unsecured debt to 'BBB' from 'BBB-'; -- Preferred stock to 'BBB-' from 'BB+'; -- Short-term IDR to 'F3' from 'B'. Central Illinois Light Company -- IDR to 'BBB' from 'BB+'; -- Senior secured debt to 'A-' from 'BBB'; -- Senior unsecured debt to 'BBB+' from 'BBB-'; -- Preferred stock to 'BBB' from 'BB+'; -- Short-term IDR to 'F3' from 'B'. CILCORP -- IDR to 'BBB-' from 'BB+'; -- Senior unsecured debt to 'BBB-' from 'BB+'; -- Short-term IDR to 'F3' from 'B'. Illinois Power Company -- IDR to 'BBB-' from 'BB+'; -- Senior secured debt to 'BBB+' from 'BBB'; -- Senior unsecured debt to 'BBB' from 'BBB-'; -- Preferred stock to 'BBB-' from 'BB+'; -- Short-term IDR to 'F3' from 'B'. Illinois Development Finance Authority -- Senior unsecured PCRBs to 'BBB' from 'BBB-'; Illinois Development Finance Authority -- Senior secured PCRBs to 'BBB+' from 'BBB'. These rating is withdrawn: Central Illinois Light Company -- Commercial paper of 'B'. These ratings are unaffected: Ameren Corp -- IDR 'BBB+'; -- CP 'F2'; -- Short-term IDR 'F2'; -- Rating Outlook Stable. Union Electric Company: -- IDR 'A-'; -- Senior secured debt 'A+'; -- Senior unsecured debt 'A'; -- Subordinate debt 'A-'; -- Preferred stock 'A-'; -- CP 'F2'; -- Short-term IDR 'F2'; -- Rating Outlook Negative. Ameren Energy Generating Company: -- IDR 'BBB+'; -- Senior unsecured debt 'BBB+'; -- Short-term IDR 'F2'. -- Rating Outlook Stable. CHOCTAW GENERATION: S&P Cuts Rating to 'BB'; Keeps Neg. Outlook --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on electricity provider Choctaw Generation L.P.'s pass-through trust certificates due 2023 and 2030 to 'BB' from 'BB+'. The outlook remains negative. "The downgrade is based on our expectation that operating margins at the plant will remain pressured in the near term until there is a permanent solution to the nagging heat-rate efficiency issue at the plant," said Standard & Poor's credit analyst Matthew Hobby. Availability problems in recent years have further pressured fixed-charge coverage at the project, resulting in continued fixed-charge coverage below 1x. Choctaw, an indirect, wholly owned subsidiary of GDF Suez Energy North America, is a 440-megawatt lignite-fired generating facility that sells power to the Tennessee Valley Authority (TVA; AAA/Stable/--) under a 30-year power purchase and operating agreement (PPOA). A 30-year lignite sales agreement with Mississippi Lignite Co. (unrated) protects margins, and the project passes through fuel costs associated with generation to TVA at an assumed heat rate significantly lower than the plant's actual heat rate. The negative outlook reflects the likelihood that the 30-day scheduled major maintenance outage in September and October of 2008 will only partially address the ongoing heat rate issues at the project, and ultimate resolution may be a few years away. S&P could lower the rating further if the planned outage does not result in improved availability at the plant and corresponding increased debt service coverage ratios. A stable outlook would follow improved plant availability, and an upgrade is possible if the heat rate issues are ultimately resolved. CHRISTO BARDIS: Files for Chapter 11 Bankruptcy in California ------------------------------------------------------------- Real estate broker Christo Bardis filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of California, Sacramento. Mr. Bardis owes as much as 582,593,701 in loans to his unsecured creditors including, among others, Wells Fargo Bank owing $81,082,143; Indymac Bank owing $70,233,564; Comerica owing $52,235,143. He listed assets between $10 million and $50 million, and debt between $100 million and $500 million in his filing. According to The Sacramento Bee, Mr. Bardis is co-founder of Sacramento homebuilder Reynen and Bardis Communities. The Chapter 11 filing will allow Mr. Bardis to keep business operations to continue, the report says. "[The] filing was a difficult decision and an essential step in continuing to demonstrate that we take our obligations to creditors very seriously," the report quoted Mr. Bardis as saying. Partner John D. Reynen filed for bankruptcy on April 23, 2008, in Sacramento (Case No. 08-25145) to avert Bank of the West's foreclosure of his personal property securing a $26 million loan. Messrs. Reynen and Bardis guaranteed at least $740 million used by their company that was obtained from several creditors but failed to repay the loan, according to the Troubled Company Reporter on April 25, 2008. Mr. Reynen disclosed in its filing assets between $50 million and $100 million, and debts between $500 million and $100 million. He owes $286,616,222 to his unsecured creditors including Lennar Rennaissance Inc. asserting $47,000,000 in trade debt; Wells Fargo asserting $29,387,928 in bank loan; and Indymac Bank asserting $26,833,087 in bank loan. The Sacramento Bee relates that Sullivan Real Estate Advisors vice president, Dean Wehrli, said "[Messrs. Reynen and Bardis] acquired properties at the wrong time." Howard S. Nevins, Esq., at Hefner, Stark & Marols, LLP, in Sacramento, California, represents Mr. Reynen. David M. Meegan, Esq., at Meegan, Hanschu & Kassenbrock, represents Mr. Bardis. Both cases are assigned to the Hon. Christopher M. Klein. CHRISTO BARDIS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Christo Bardis Sara Bardis 10630 Mather Blvd. Sacramento, CA 95655 Bankruptcy Case No.: 08-34878 Type of Business: The Debtor is in the real estate business. Chapter 11 Petition Date: October 15, 2008 Court: Eastern District of California (Sacramento) Judge: Christopher M. Klein Debtor's Counsel: David M. Meegan, Esq. 11341 Gold Express Dr., #110 Gold River, CA 95670 Tel: (916) 925-1800 Estimated Assets: $10 million to $50 million Estimated Debts: $100 million to $500 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wells Fargo Bank bank loan $81,082,134 c/o Pat Mooney CLW Irvine MAC E2148-015 P.O. Box 966 El Segundo, CA Tel: (949) 251-4372 Indymac Bank bank loan $70,233,564 c/o Paul Bogel Homebuilder Division P.O. Box 78826 Phoenix, AZ 86062-8826 Comerica bank loan $52,235,143 c/o Hisashi Takiguchi P.O. Box 641618 Detroit, MI 48264-1618 Tel: (408) 556-5872 Lennar Renaissance Inc. bank loan $47,000,000 c/o Larry Gualco 1075 Creekside Drive, St.e 110 Roseville, CA 95678 Tel: (916) 783-3224 JP Morgan Chase bank loan $44,735,727 c/o Dan Bracken P.O. Box 974675 Dallas, TX 75397-4675 Tel: (602) 221-2599 Frank Stathos bank loan $33,786,233 c/o Frank Stathos 7700 College Town Dr., Ste. 201 Sacramento, CA 95826 Tel: (916) 386-8800 Wachovia Bank bank loan $28,517,640 Commercial Loan Service c/o James Brett P.O. Box 60503 City of Industry, CA 91716-0503 Tel: (215) 670-6628 IMH bank loan $27,-94,473 (Investors Mortgage Holdings) c/o Shane Albers 11333 North Scottsdale Road, Suite 160 Scottsdale, AZ 85254 Tel: (602) 889-3410 Western Springs National Bank bank loan $26,049,387 4456 Wolf Road Western Springs, IL 60558 Tel: (708) 246-220 Bank of The West bank loan $23,773,062 c/o Alicia Anderson P.O. Box 515274 Los Angeles, CA 90051-6574 Tel: (925) 975-3927 First Bank bank loan $21,460,259 c/o Kerri J. Horsley P.O. Box 419048 St. Louis, MO 63141 Tel: (916) 783-1206 Colonial Bank bank loan $20,854,789 c/o Dennis Harms 2330 South Virginia Street, 3rd Floor Reno, NV 89502 Tel: (775) 827-7200 Key Bank bank loan $20,850,997 c/o Steve Barkley P.O. Box 5278 Boise, ID 83705-0278 Tel: (425) 709-4346 Travelers Bond Claims performance bond $14,064,750 c/o Steven Pand 33650 6th Avenue South, Suite 200 Federal Way, WA 98003 Tel: (253) 943-5819 First Horizon bank loan $13,766,650 c/o Bo Boxold 500 Ygnacio Valley Road, #190 Walnut Creek, CA 94596 Tel: (925) 944-3123 California Bank & Trust bank loan $12,606,824 c/o Rick Audino 2929 North Central Avenue Suite 200 Phoenix, AZ 85012 Tel; (559) 261-3541 Weyerhaeuser Realty Investors acquisition $11,999,041 c/o Jack March loan 1301 Fifth Ave., Ste. 3100 Seattle, WA 98101 Tel: (206) 264-2240 Marshall First Bank bank loan $11,371,340 c/o Megan Mourning 225 South Sixt Street Suite 2900 Minneapolis, MN 55402 Tel: (612) 376-1500 Craig T. Ehnisz Trust Performance loan $10,606,147 c/o Craig Ehnisz 1101 47th Street Sacramento, CA 95814 Tel: (916) 453-8724 N. Vineyard Family RB, Inc. trade debt $10,505,541 c/o Tom Winn 1130 Iron Point Road, Ste. 150 Folsom, CA 95630 Tel: (916) 355-1450 CISTERA NETWORKS: Has $951,000 Net Loss for Sept. 2007 Quarter -------------------------------------------------------------- Cistera Networks Inc. reported $951,525 in net loss on revenues of $893,782 for the three months ended Sept. 30, 2007, compared to $110,522 net loss on revenues of $399,880 for the same period a year ago. The company's consolidated balance sheet at Sept. 30, 2007, showed $3,932,818 in total assets and $3,657,999 in total liabilities resulting in a $274,000 stockholders' equity. Going Concern Doubt According to the Troubled Company Reporter on Sept. 2, 2008, Farmer, Fuqua & Huff, P.C., in Plan, Texas, raised substantial doubt on Cistera Networks Inc.'s ability to continue as a going concern after it audited the company's financial statements for the years ended March 31, 2008, and 2007. The auditing firm pointed out that the company has suffered recurring losses from operations and has a net capital deficit. On Nov. 12, 2007, auditing firm Robinson Hill & Co. in Salt Lake, Utah, cited the company's recurring losses from operations and net capital deficit that raise substantial doubt about the company's ability to continue as a going concern. A full-text copy of the company's regulatory filing with the Securities and Exchange Commission is available for free at: http://ResearchArchives.com/t/s?33f8 Based in Dallas, Cistera Networks Inc. (OTC BB: CNWT.OB) -- http://www.cistera.com/-- works within the IT industry, specifically the field of unified communications. Cistera provides converged application platforms for the enterprise that enhances the investment in IP Telephony. CITIGROUP INC: Posts $2.8 Billion Net Loss in 2008 Third Quarter ---------------------------------------------------------------- Citigroup, Inc., disclosed Thursday its results of operations for the quarter ended Sept. 30, 2008. The company reported a net loss of $2.8 billion for the third quarter ended Sept. 30, 2008, compared to net income of $2.2 billion in the same period last year, and a net loss of $2.5 billion for the second quarter ended June 30, 2008. Results included $4.4 billion in net pre-tax write-downs in Securities and Banking, $4.9 billion in net credit losses, and a $3.9 billion net charge to increase loan loss reserves. Third Quarter Highlights -- Net interest revenue up 13% and net interest margin up 79 basis points versus the third quarter 2007. -- Lower write-downs in Securities and Banking for the third consecutive quarter. -- Total expenses declined for the third consecutive quarter, down $1.2 billion since the second quarter 2008. -- Headcount reduced by approximately 11,000 since the second quarter 2008 and approximately 23,000 in the first nine months of 2008. -- Retail and corporate deposits in the U.S. increased 6% versus second quarter 2008 and 11% versus third quarter 2007. -- Total assets declined by $50.0 billion since second quarter 2008 and by $308 billion since third quarter 2007. -- Legacy assets declined by approximately $48.0 billion since second quarter 2008. -- Capital strength maintained with Tier 1 Capital ratio at 8.2%. -- Closed sale of CitiStreet; announced sale of Citi Global Services Limited; sale of the German retail banking operations on track for the fourth quarter. Management Comment "I am very proud of my Citi colleagues for staying focused on our priorities and for their relentless commitment to serving our clients during these turbulent times. While our third quarter results reflect both a difficult environment as well as continued write-downs on our legacy assets, we are making excellent progress on the parts of our business we control, including expense reduction, headcount, and balance sheet and capital management. We expect these improvements will enable us to realize the full earnings power of our franchise as the economy stabilizes," said Vikram Pandit, chief executive officer of Citi. Mr. Pandit also noted: "We have also been very focused on aggressively managing our risks during this credit cycle and have been taking steps to add hedges as appropriate. We end the quarter with a very strong Tier 1 ratio of 8.2% and a loan loss reserve of $25.0 billion. Our capital will be further strengthened by the sale of our Germany retail banking operations in the fourth quarter, continued focus on reducing our legacy assets, as well as the latest steps taken by the U.S. Department of the Treasury." Third Quarter Summary Revenues were $16.7 billion, down 23%. This quarter's decline in revenues was driven by $4.4 billion in net write-downs in Securities and Banking, lower securitization results in North America Cards, and a $612.0 million write-down related to the auction rates securities ("ARS") settlement announced on Aug. 7, 2008, partially offset by a $347.0 million pre-tax gain on the sale of CitiStreet. The prior-year period included a $729.0 million pre-tax gain on the sale of Redecard shares. Revenues across all businesses reflect the impact of a difficult economic environment and weak capital markets. The net interest margin decreased 1 basis point versus the second quarter 2008, to 3.13%. Global Cards GAAP revenues declined 40%, mainly due to lower securitization results in North America and the absence of a gain on the sale of Redecard shares recorded in the prior-year period. Global Cards managed revenues declined 1%, primarily due to the absence of a gain on the sale of Redecard shares recorded in the prior-year period, partially offset by growth in average managed loans, up 6%, and improved managed net interest margin. North America managed revenues increased 7%. Consumer Banking revenues grew 2%, as increased revenues in North America were partially offset by declines in Latin America and Asia. Current and historical German retail banking operations income statement items have been reclassified as discontinued operations. Related assets and liabilities have been condensed and moved to assets and liabilities of discontinued operations held for sale, respectively, on the balance sheet in the current period. In the Institutional Clients Group, Securities and Banking revenues were negative $81.0 million, due to substantial write- downs and losses related to the credit markets. These included write-downs of $2.0 billion on Structured Investment Vehicle ("SIV") assets, write-downs of $1.2 billion, net of hedges, on Alt-A mortgages, downward credit value adjustments of $919.0 million related to exposure to monoline insurers, write- downs of $792.0 million, net of underwriting fees, on funded and unfunded highly leveraged finance commitments, write-downs of $518.0 million on commercial real estate positions, and net write- downs of $394.0 million on sub-prime related direct exposures. Negative revenues also included a $306.0 million write-down related to the ARS settlement and were partially offset by a $1.5 billion gain related to the inclusion of Citi's credit spreads in the determination of the market value of those liabilities for which the fair value option was elected. Transaction Services revenues were up 20% to a record $2.5 billion, reflecting double-digit revenue growth across all regions. Average deposits and other customer liability balances increased 7%, while a decline in global equity markets resulted in a 6% reduction in assets under custody. Global Wealth Management revenues decreased 10%, driven by a decline in capital markets and investment revenues, partially offset by higher banking and lending revenues. Revenues also included a $347.0 million pre-tax gain on the sale of CitiStreet, partially offset by a $306.0 million write-down related to the ARS settlement. Operating expenses were $14.4 billion, up 2% from the prior-year period. Expense growth reflected $459.0 million in repositioning charges, a $100.0 million charge related to the ARS settlement, and the impact of acquisitions. Expense growth was partially offset by benefits from re-engineering efforts. Expenses declined for the third consecutive quarter, due to lower incentive compensation accruals and continued benefits from re-engineering efforts. Credit costs were $9.1 billion, up 86%. Credit costs primarily consisted of $4.9 billion in net credit losses and a $3.9 billion net charge to increase loan loss reserves. Net credit losses increased $2.5 billion, primarily driven by Consumer Banking and Cards in North America. The incremental net charge to increase loan loss reserves of $1.7 billion was mainly due to Consumer Banking and Cards in North America, and Securities and Banking. The effective tax rate on continuing operations was 48.4% versus 18.8% in the prior-year period. The increase in the tax rate was due largely to higher tax rates in the jurisdictions where the losses were incurred. The Tier 1 capital ratio was 8.2% at quarter-end. Balance Sheet At Sept. 30, 2008, the company's consolidated balance sheet showed $2.0 trillion in total assets, $1.9 trillion in total liabilities, and $126.1 billion in total stockholders's equity. Total deposits were $780.3 billion. The balance sheet figures are preliminary. In comparison, the company's consolidated balance sheet at June 30, 2008, showed $2.1 trillion in total assets, $2.0 trillion in total liabilities, and $136.4 billion in total stocholders' equity. Total deposits were $803.6 billion. A full-text copy of the company's quarterly financial data supplement for the quarter ended Sept. 30, 2008 is available for free at http://researcharchives.com/t/s?3401 Share Price The shares closed at $14.88 in New York Stock Exchange composite trading on Friday, down $1.02, or 6.42% from Oct. 16, 2008. Volume was 157,379,000 shares. About Citigroup Inc. Citigroup Inc. (NYSE: C) -- http://www.citigroup.com/citigroup/-- doing business as Citi, provides a range of financial products and services to consumer and corporate customers in the United States and internationally. The company operates through four segments: Global Cards, Consumer Banking, Institutional Clients Group, and Global Wealth Management. The Global Cards segment offers MasterCard, VISA, Diners Club, private label, and American Express card products, as well as engages in sales finance activities. The Consumer Banking segment involves in retail banking, consumer finance, real estate lending, and small and middle market commercial banking; and provides personal and auto loans, investment services, and Primerica financial services. As of June 30, 2008, it operated 8,300 branches. The Institutional Clients Group segment engages in various securities and banking activities, which include investment banking, debt and equity, lending, private equity, hedge funds, real estate, structured products, and managed funds. It also offers transaction services, such as cash management services, trade services, custody and fund services, clearing services, and agency and trust services. The Global Wealth Management segment's services include advisory, financial planning, brokerage, wealth management, and equity and fixed income research services. The company was founded in 1812 and is based in New York, New York. * * * The company has reported four consecutive quarters of net losses beginning the fourth quarter of 2007. Aggregate net losses for the last four quarters were $20.2 billion. CMT AMERICA: Wants Case Converted to Chapter 7 Liquidation ---------------------------------------------------------- Bill Rochelle of Bloomberg News reports that CMT America Corp. asked the U.S. Bankruptcy Court for the District of Delaware to convert its case to a liquidation in Chapter 7 where a trustee is appointed automatically. The Debtor, according to the report, said there is no hope for a rehabilitation. Headquartered in Farmington, Connecticut, CMT America Corp., aka Fairvane Corp., is a 70-store women's clothing retailer. The company filed for chapter 11 protection on July 13, 2008 (Bankr. D. Del. Case No.08-11434). Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor, LLP, represents the Debtor in its restructuring efforts. The Debtor selected Administar Services Group LL as its claims agent. The U.S. Trustee for Region 2 has appointed five creditors to serve on Official Committee of Unsecured Creditors. The Debtor's summary of schedules posted total assets of $9,651,473 and total debts of $20,352,990. COLOWYO COAL: S&P Cuts $192.8MM Bonds Rating to 'BB-' from 'BB' --------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its rating on Colowyo Coal Funding Corp.'s $192.8 million bonds due 2011 and 2016 to 'BB-' from 'BB'. The outlook remains negative. The downgrade reflects the project's historic performance below 1x debt service coverage from operations combined with its recent volatility in coverage, which increases the risk of fully drawing on its debt-service letter of credit before debt maturity. The Colowyo transaction essentially securitizes revenue from several long-term coal sales contracts, net of transfer payments to its two equity partners. The rating reflects credit concerns that include the following two structural weaknesses in the project: Debt-service coverage and the resulting magnitude of its liquidity draws depend on the timing of counterparty coal purchases during each year, while its long-term coal sales contracts only specify a total annual quantity without regard to timing. This permitted low quantities, low coverage (0.71x), and a large draw on liquidity in the first half of 2008. Volatile coverage is a significant credit concern because liquidity has not been replenished when coverage exceeds 1x. The coal sales contracts' broadly defined force majeure clause allows purchasers to take less coal during force majeure events such as forced outages at power plants. These concerns are balanced against the following credit strengths at the 'BB-' rating level: The long-term coal sales contracts between the Colowyo mine and the Craig Station power generating facility provides some cash flow stability. The debt service letter of credit could provide sufficient liquidity through the debt's maturity if debt service coverage returns to historic levels near 1x. The outlook remains negative, reflecting S&P's concern that the debt service letter of credit could be depleted by debt service coverage levels that remain near or below 0.9x. Continued coverage near or below 0.9x could result in a rating downgrade, while sustained coverage above 1x or a significant increase in liquidity could result in a return to a stable outlook. CONSTELLATION ENERGY: MidAmerican Seeks Gov't Approval on Deal -------------------------------------------------------------- Shara Tibken at The Wall Street Journal reports that Warren Buffett's MidAmerican Energy Holding Co. is seeking the Maryland Public Service Commission's approval on the deal to acquire Constellation Energy Group Inc. As reported in the Troubled Company Reporter on Sept. 25, 2008, MidAmerican Energy and Constellation Energy reached a tentative agreement in which MidAmerican will purchase all of the outstanding shares of Constellation Energy for a cash consideration of approximately $4.7 billion. Simultaneous with execution of the Merger Agreement, MidAmerican agreed to make a $1 billion investment into Constellation, in exchange for shares of 8% convertible preferred stock of Constellation. The Stock Purchase Agreement provides for the private placement of 10,000 shares of Series A Convertible Preferred Stock of Constellation for an aggregate purchase price of $1 billion. The Series A Preferred Stock is convertible into shares of Company Common Stock and senior unsecured promissory notes of Constellation. MidAmerican Energy will also acquire Constellation Energy's Baltimore Gas & Electric Co., WSJ relates. WSJ reports that some Constellation Energy shareholders were upset by MidAmerican Energy's $26.50-per-share offer, after the company had been trading at over $100 earlier in the year. According to WSJ, MidAmerican Energy told the Maryland Public Service Commission that its purchase of Constellation Energy and Baltimore Gas would stabilize the troubled utilities and curb rate increases. The acquisition deal comes along with the company's plan to decrease and delay planned Baltimore Gas rate requests, the report says, citing MidAmerican Energy's President and CEO Gregory E. Abel. MidAmerican Enery said that it will cut in half the 5% cap to be applied to any increase in an electric distribution rate case filed by Baltimore Gas next year, and that the company won't file the next Baltimore Gas electric and natural gas distribution rate cases until January 2011, WSJ states. Baltimore Gas' gas and electric base distribution rates in 2010 and the first half of 2011 won't increase, which would mean a benefit of as much as $70 million for clients, the report says, citing MidAmerican Energy. MidAmerican Energy, according to WSJ, said it will keep Constellation Energy's headquarters in Baltimore. Citing MidAmerican Energy, the report says that Constellation Energy's Chairperson and CEO Mayo A. Shattuck III waived his right to receive cash severance as a result of the merger, instead donating the amount to the Constellation Energy Group Foundation. WSJ reports that Constellation Energy's board already approved the deal. About MidAmerican Energy Holdings MidAmerican Energy Holdings Company, based in Des Moines, Iowa, is a global provider of energy services. Through its energy-related business platforms, MidAmerican provides electric and natural gas service to more than 6.9 million customers worldwide. These business platforms are Pacific Power, Rocky Mountain Power and PacifiCorp Energy, which comprise PacifiCorp; MidAmerican Energy Company; CE Electric UK; Northern Natural Gas Company; Kern River Gas Transmission Company; and CalEnergy. About Baltimore Gas Baltimore Gas and Electric Company -- http://www.bge.com/-- is an electric transmission and distribution utility company and a gas distribution utility company with a service territory that covers the City of Baltimore and all or part of 10 counties in central Maryland. BGE's electric service territory includes an area of approximately 2,300 square miles. There are no municipal or cooperative wholesale customers within BGE's service territory. BGE's gas service territory includes an area of approximately 800 square miles. BGE's electric and gas revenues come from residential, commercial and industrial customers. As reported in the Troubled Company Reporter on Aug. 22, 2008, Moody's Investors Service affirmed the Ba1 preference stock rating on Baltimore Gas and Electric Company. Moody's said the outlook is stable. About Constellation Energy Constellation Energy -- http://www.constellation.com-- a FORTUNE 125 company with 2007 revenues of $21 billion, says it is the nation's largest competitive supplier of electricity to large commercial and industrial customers and the nation's largest wholesale power seller. Constellation Energy also manages fuels and energy services on behalf of energy intensive industries and utilities. It owns a diversified fleet of 83 generating units located throughout the United States, totaling approximately 9,000 megawatts of generating capacity. The company delivers electricity and natural gas through the Baltimore Gas and Electric Company (BGE), its regulated utility in Central Maryland. CSMC 2006-TFL2: Fitch Affirms Low-B Ratings on Two Class Certs. --------------------------------------------------------------- Fitch Ratings has placed two classes of CSMC 2006-TFL2, commercial mortgage pass-through certificates on Rating Watch Negative, as: -- $14.1 million class MW-A at 'AA'; and -- $8.5 million class MW-B at 'A'. In addition, Fitch has affirmed these classes and assigned Rating Outlooks as: -- $305.1 billion class A-1 at 'AAA'; Outlook Stable; -- $536 million class A-2 at 'AAA'; Outlook Stable; -- Interest-only class A-X-1 at 'AAA'; Outlook Stable; -- Interest-only A-X-2 at 'AAA'; Outlook Stable; -- Interest-only class A-X-3 at 'AAA'; Outlook Stable; -- $41 million class B at 'AA+'; Outlook Stable; -- $41 million class C at 'AA'; Outlook Stable; -- $33 million class D at 'AA-'; Outlook Stable; -- $25 million class E at 'A+'; Outlook Stable; -- $19 million class F at 'A'; Outlook Stable; -- $19 million class G at 'A-'; Outlook Stable; -- $19 million class H at 'BBB+'; Outlook Stable; -- $20 million class J at 'BBB'; Outlook Stable; -- $22 million class K at 'BBB-'; Outlook Stable; -- $16.3 million class L at 'BBB-'; Outlook Negative. These classes are assigned Rating Outlooks and affirmed by Fitch and are non-pooled components of the related trust assets: -- $62.2 million class KER-A at 'AA-'; Outlook Stable; -- $44.2 million class KER-B at 'A'; Outlook Stable; -- $38.7 million class KER-C at 'A-'; Outlook Stable; -- $47.7 million class KER-D at 'BBB+'; Outlook Negative; -- $48.1 million class KER-E at 'BBB'; Outlook Negative; -- $64 million class KER-F at 'BBB-'; Outlook Negative; -- $4.7 million class SHD-A at 'AA+'; Outlook Stable; -- $4.5 million class SHD-B at 'AA'; Outlook Stable; -- $4.4 million class SHD-C at 'A+'; Outlook Stable; -- $3.4 million class SHD-D at 'A-'; Outlook Stable; -- $4.3 million class SHD-E at 'BBB-'; Outlook Stable; -- $11 million class BEV-A at 'BBB-'; Outlook Stable; -- $5.3 million class QUN-A at 'AA-'; Outlook Stable; -- $4.9 million class QUN-B at 'A'; Outlook Stable; -- $7.1 million class QUN-C at 'BBB'; Outlook Stable; -- $4.6 million class QUN-D at 'BBB-'; Outlook Stable; -- $7 million class ARG-A at 'BB'; Outlook Stable; -- $5.5 million class ARG-B at 'BB-'; Outlook Stable; -- $4 million class NHK-A at 'BBB-'; Outlook Stable. These classes are assigned Rating Outlooks and affirmed by Fitch and are non-pooled components of the trust assets: -- $376.8 million class SV-A1 at 'AAA'; Outlook Stable; -- $126 million class SV-A2 at 'AAA'; Outlook Stable; -- Interest-only SV-AX at 'AAA'; Outlook Stable; -- $61 million class SV-B at 'AA+'; Outlook Stable; -- $31 million class SV-C at 'AA'; Outlook Stable; -- $31 million class SV-D at 'AA-'; Outlook Stable; -- $30 million class SV-E at 'A+'; Outlook Stable; -- $31 million class SV-F at 'A'; Outlook Stable; -- $30 million class SV-G at 'A-'; Outlook Stable; -- $54 million class SV-H at 'BBB+'; Outlook Stable; -- $34 million class SV-J at 'BBB'; Outlook Stable; -- $39 million class SV-K at 'BBB-'; Outlook Stable. Rating Outlooks reflect the likely direction of rating changes over the next one or two years. Classes MW-A and MW-B have been placed on rating watch negative due to the upcoming final maturity of Metropolitan Warner Center. The Metropolitan Warner Center loan is collateralized by 677 units within the condominium property located in Woodland Hills, California. The subject was formerly an apartment complex that was converted into condominiums. Debt is paid down as unit sales are executed. The loan exercised its one-year extension option in July 2008 and has a final maturity on July 9, 2009. The pace of unit sales has fallen behind initial expectations and Fitch is concerned that sales proceeds may not be sufficient to pay off the debt at loan maturity. The original management company has been replaced and new management plans to focus on increased marketing efforts to bolster unit sales. Class L has been assigned a Negative Outlook due to the concerns surrounding The Kerzner Portfolio and Metropolitan Warner Center. Though classes KER-D, KER-E, and KER-F have been affirmed at the current rating levels, the Negative Outlooks are due to the potential future decline in performance of The Kerzner Portfolio. The Kerzner Portfolio consists of a diverse portfolio of real estate including resort casinos, golf courses, timeshares, vacant waterfront land and ongoing construction projects. The portfolio is sponsored by Istithmar PJSC, Whitehall Funds, Kerzner Family, Colony Capital, Baron Funds and The Related Companies. Occupancy, ADR and RevPAR as of Dec. 31, 2007, is 73%, $310, and $245, compared to the issuer's expectations of 81%, $323, and $262 at origination. The portfolio continues to stabilize as construction projects are completed at the Atlantis property, including the Phase III expansion which added a 600-room all-suite hotel tower, a 495-unit condominium hotel, approximately 40-acres of new water attractions, and the Dolphin Experience. While cash flow has improved from year-end 2006 to YE2007, there is concern that the performance expectations from origination may become increasingly difficult to achieve as the economy continues to face significant challenges. The impact the contracting economy is having on discretionary spending along with declines in business and leisure travel may limit future improvement to cashflow. The rating affirmations are the result of stable pool performance since issuance, scheduled paydown, and ongoing stabilization of the underlying assets. As of the September 2008 distribution date, the transaction's aggregate principal balance has decreased 31% to $2.35 billion from $3.40 billion at issuance. Three loans, The Plaza Residential and Retail (23.8% of the initial pool balance) JP Morgan International Tower III (1.5%), and The Plaza CondoHotel and Hotel (1.1%) have paid in full. The largest loan in the transaction, The Sava Healthcare Portfolio (35.9%), consists of two partially cross-collateralized and cross- defaulted loans: the Sava Portfolio, consisting of 169 properties and the Fundamental Portfolio, consisting of 28 properties. Occupancy as of April 15, 2008 is 85.6%, inline with issuance. The Sava Portfolio and the Fundamental Portfolio are bridge loans until the individual assets are refinanced through the HUD 232 Program, which insures mortgages that cover the construction, rehabilitation, purchase, and refinancing of nursing homes, intermediate care facilities, board and care homes, and assisted living facilities. The portfolio is sponsored by Rubin Schron, an experienced health care property operator. All of the Fitch rated classes related to the Sava Healthcare Portfolio are non-pooled components of the related trust. Fitch reviewed servicer provided operating statement analysis reports for all of the loans in the transaction as well as updated sales reports for the condominium properties. Based on their stable performance since issuance the loans maintain their investment grade shadow ratings. DISTRIBUTED ENERGY: Wants Plan Filing Period Extended to Dec. 31 ---------------------------------------------------------------- Distributed Energy Systems Corp. and its wholly owned subsidiary, NPS Liquidating Inc., f/k/a Northern Power Systems Inc., ask the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive periods to: a) file a plan to Dec. 31, 2008; b) solicit acceptances of the plan to March 2, 2009. This is the Debtors' first request for an extension of these deadlines. The Debtors have been engaged in extensive negotiations with the Official Committee of Unsecured Creditors and Perseus Partners VII, L.P. in an attempt to resolve the issues currently pending between the Committee and Perseus. The Debtors tell the Court that the extension requested will give them additional time to fully evaluate the feasibility of a plan or plans in these chapter 11 cases and complete the other tasks that may need to be completed before such plans can be filed and acceptances solicited. The Debtors add that the termination of their exclusive periods would cause substantial harm to their efforts to preserve and maximize the value of their estates and the progress of these cases. Issues Between the Committee and Perseus Need to be Resolved On July 31, 2008, the Committee filed a Complaint for Equitable Re-Characterization of Purported Secured Loan As Equity Investment or, in the alternative, Equitable Subordination. With the assistance of the Debtors, the Committee and Perseus have and continue to exchange detailed proposals that would provide for a global resolution of issues between the Committee and Perseus, including settling the Committee Complaint and resolving the dispute over the escrowed proceeds of the Northern Sale and the Northern Servicing Sale. The sale of Northern Power Systems Inc. to CB Wind closed on Aug. 15, 2008, while the sale of Northern's sevicing business to Endurant Energy Systems, LLC followed shortly after the Court approved the sale on Aug. 19, 2008. The Debtors are hopeful that through these negotiations they can also reach an agreement with Perseus that will provide for the consensual use of Perseus' cash collateral as well as a roadmap for winding up these cases. The Debtors told the Court that ultimately, the outcome of the negotiations between the Debtors, the Committee, and Perseus will be, to a great extent, determinative of the value available to the various creditors as well as the feasibility of a chapter 11 plan or plans in these cases. Distributed Energy Systems Corp. and its wholly owned subsidiary, Northern Power Systems Inc., filed for Chapter 11 bankruptcy protection on May 4, 2008 (Bankr. D. Del. Lead Case No. 08-11101). Robert S. Brady, Esq., Edward J. Kosmowski, Esq., and Robert F. Poppiti, Jr., at Young, Conaway, Stargatt & Taylor LLP represent the Debtors in their restructuring efforts. The Debtors selected Epiq Systems as their claims agent. The U.S. Trustee for Region 3 appointed three creditors to serve on an Official Committee of Unsecured Creditors. Schuyler G. Carroll, Esq., Robert M. Hirsh, Esq., and Karen McKinley, Esq., at Arent Fox LLP, in New York, and John V. Fiorella, Esq., Charles C. Brown, III, Esq., and "J" Jackson Shrum, Esq., at Archer & Greiner, P.C., in Wilmington, Delaware, represent the Committee. The Debtors disclosed in their schedules, assets of $19,593,387 and debts of $43,558,713. DOMARK INT'L: Report $959,000 Net Loss for August 31, 2008 ---------------------------------------------------------- DoMark International Inc. reported $959,368 net loss on revenues of $452,336 for the three months ended Aug. 31, 2008, compared to $596,000 net loss on no revenues of the same period a year ago. The company's balance sheet at Aug. 31, 2008, showed $17,741,640 in total assets and $6,177,977 in total liabilities resulting in a $11,563,663 stockholders' equity. A full-text copy of the company's regulatory filing is available for free at http://ResearchArchives.com/t/s?33fb Going Concern Doubt According to the Troubled Company Reporter on Sept. 29, 2008, Davis, Fla.-based Kramer Weisman and Associates LLP raised substantial doubt about the ability of DoMark International, Inc., to continue as a going concern after it audited the company's financial statements for the year ended May 31, 2008. The auditor reported that the company has operating and liquidity concerns, has incurred an accumulated deficit of $1,431,970 through the period ended May 31, 2008, and current liabilities exceeded current assets by $3,828,255 at May 31, 2008. The company has inadequate working capital to maintain or develop its operations, and is dependent upon funds from private investors and the support of certain stockholders. Management is planning to raise any necessary additional funds through loans and additional sales of its common stock. There is no assurance that the company will be successful in raising additional capital. About DoMark DoMark International, Inc., acquires and manages majority owned public entities and privately owned companies in various industries. The company, through its subsidiary, JAVACO, Inc., distributes equipment and tools for cable television and telecommunications industry in North and Latin America. The company, through its other subsidiary, SportsQuest, Inc., creates, develops, and manages high end sports events, as well as executing a growth strategy involving acquisition of diverse and effective sports marketing platforms. Formerly known as DoMar Exotic Furnishings, Inc., the company was incorporated in 2006 and is based in Oviedo, Fla. EATON VANCE: Moody's Trims $6MM Notes Rating to 'Ba1' from 'Baa3' ----------------------------------------------------------------- Moody's Investors Service has downgraded the notes issued by Eaton Vance CDO IX, Ltd.: Class Description: $35,000,000 Class D Floating Rate Deferrable Notes Due 2019 -- Prior Rating: Baa2, on review for possible downgrade -- Prior Rating Action Date: 9/18/08 -- Current Rating: Baa3 Class Description: $6,000,000 Class 2 Combination Notes Due 2019 -- Prior Rating: Baa3, on review for possible downgrade -- Prior Rating Action Date: 9/18/08 -- Current Rating: Ba1 According to Moody's, the rating action is a result of the loss of credit support from the Class D Coupon Swap Counterparty. Lehman Brothers Special Financing Inc. acts as counterparty under the Class D Coupon Swap Agreement guaranteeing the obligations of LBSFI). In this role, LBSFI advances payment of interest owed on the Class D notes during the reinvestment period to the extent that interest collections on the collateral are insufficient to service such payments. LBHI's bankruptcy filing and the downgrade of both LBHI and LBSFI will likely disrupt LBSFI's ability to perform its obligations under the swap. Moody's noted that no cash collateral has been posted to Eaton Vance CDO IX, Ltd. by LBSFI. Additionally, the likelihood of entering into a replacement swap at an acceptable cost in the near-term appears to be adversely constrained by the current challenging market conditions. EHAB A MOHAMED MEDICAL: Case Summary & Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Ehab A Mohamed Medical Corporation, Inc. 16260 Ventura Blvd., Suite 720 Encino, CA 91436 Bankruptcy Case No.: 08-18104 Type of Business: The Debtor operates a medical office. Chapter 11 Petition Date: October 16, 2008 Court: Central District Of California (San Fernando Valley) Judge: Geraldine Mund Debtor's Counsel: Allan D. Sarver, Esq. ADSarver@aol.com 16633 Ventura Blvd., Suite, 800 Encino, CA 91436 Tel: (818) 981-0581 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/califcb08-18104.pdf EIF CALYPSO: S&P's 'BB+' Rating Unaffected by Northampton's Cut --------------------------------------------------------------- Standard & Poor's Ratings Services said that the recent downgrade of the series A senior secured bonds at Northampton Generating Co. L.P. to 'B-' from 'B' will have no impact on EIF Calypso LLC's 'BB+' rating or stable outlook. Northampton is a 112 MW waste coal-fired power plant, of which Calypso owns 77.5%. Northampton has been downgraded two notches since Calypso's rating was initially released in April 2008, and the project currently has a negative outlook in the face of continued cash flow pressures. However, Calypso's pro rata ownership of Northampton is 87 MW of Calypso's 1,686 MW portfolio, and the project constitutes a negligible amount of total cash flow distributions to Calypso. ELITE CROSS: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Elite Cross Creek, Inc. 16009 N. 81st Street, Suite 130 Scottsdale, AZ 85260 Bankruptcy Case No.: 08-14336 Chapter 11 Petition Date: October 16, 2008 Court: District of Arizona (Phoenix) Judge: George B. Nielsen, Jr. Debtor's Counsel: Paul Sala, Esq. psala@asbazlaw.com Allen, Sala & Bayne, PLC Viad Corporate Center 1850 N. Central Ave., #1150 Phoenix, AZ 85004 Tel: (602) 256-6000 Estimated Assets: $1 million to $10 million Estimated Debts: $10 million to $50 million The Debtor did not file a list of 20 largest unsecured creditors. FAMILY MANAGEMENT: Case Summary & Two Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Family Management LLC 431 N. Halifax Avenue, Apt. 5 Daytona Beach, FL 32118 Bankruptcy Case No.: 08-06373 Chapter 11 Petition Date: October 16, 2008 Court: Middle District of Florida (Jacksonville) Judge: Paul M. Glenn Debtor's Counsel: Walter J. Snell, Esq. snellandsnell@mindspring.com Snell & Snell, P.A. 436 N Peninsula Drive Daytona Beach, FL 32118 Tel: (386) 255-5334 Total Assets: $1,605,000 Total Debts: $883,312 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/flmb08-06373.pdf FANNIE MAE: Gov't May Have to Pay Shareholders in Fraud Lawsuit --------------------------------------------------------------- Aparajita Saha-Bubna at The Wall Street Journal reports that the government may have to pay Fannie Mae shareholders for hundreds of milllions of dollars in damages stemming from a class action in the U.S. District Court in Washington alleging securities fraud by the company. The government, through the the Federal Housing Finance Agency, took over control of Fannie Mae in September. In that same month, Fannie Mae shareholders sued Merrill Lynch, Citigroup, Morgan Stanley, and others for allegedly making false statements about Fannie Mae's financial condition, Jonathan D. Glater at The New York Times relates. The report says that the shareholders blamed a government plan for helping to depress the company's stock price by buying shares of Fannie Mae and then take it over. WSJ quoted H. Adam Prussin, Esq. -- a partner at Pomerantz Haudek Block Grossman & Gross and the attorney for Fannie Mae investors -- as saying, "The more you think about it, there're so many different ways that so many different people could be responsible for this. There are the lenders who screwed up in the first place, there are the people who bought these things from the lenders and then didn't account correctly for them." According to WSJ, a status conference, or a progress report, on the the Fannie Mae case is set for Oct. 20. About Fannie Mae The Federal National Mortgage Association -- (FNMA) (NYSE: FNM) -- commonly known as Fannie Mae, is a shareholder-owned U.S. government-sponsored enterprise. Fannie Mae has a federal charter and operates in America's secondary mortgage market, providing mortgage bankers and other lenders funds to lend to home buyers at low rates. Fannie Mae was created in 1938, under President Franklin D. Roosevelt, at a time when millions of families could not become homeowners, or risked losing their homes, for lack of a consistent supply of mortgage funds across America. The government established Fannie Mae to expand the flow of mortgage funds in all communities, at all times, under all economic conditions, and to help lower the costs to buy a home. In 1968, Fannie Mae was re-chartered by the U.S. Congress as a shareholder-owned company, funded solely with private capital raised from investors on Wall Street and around the world. Fannie Mae is the U.S. largest mortgage buyer, according to The New York Times. FORD MOTOR: John Bond & Jorma Ollila Leave Board Member Posts ------------------------------------------------------------- Matthew Dolan at The Wall Street Journal reports that Sir John R. H. Bond and Jorma Ollila resigned as Ford Motor Co. board members on Friday. Messrs. Bond and Ollila have significant responsibilities within their own companies in Europe and each has recently added new responsibilities in advising governmental entities during these difficult economic times. Messrs. Bond and Ollila told the Board of Directors that they couldn't devote the additional time and international travel that would be required of them as the company responds to the unprecedented external environment and rapidly changing auto industry. In addition to his board duties, Mr. Bond served as a member of the Finance Committee of the Ford Motor board and served as a consultant and senior advisor to the Executive Chairman, William Clay Ford, Jr. Mr. Bond's formal paid consultancy arrangement with the company also terminates on Oct. 17, 2008, although Mr. Bond may continue to act as an advisor to Mr. Ford on an informal, unpaid basis. Mr. Ollila served as a member of the Audit Committee and the Nominating and Governance Committee of the board. According to WSJ, Messrs. Bond and Ollila won't be immediately replaced and the board will now have 11 members. The resignations had nothing to do with any disagreement over the management or direction of the the company, and were not related to the Don Leclair's retirement as chief financial officer, WSJ relates, citing a Ford Motor spokesperson Mark Truby. The report quoted Mr. Truby as saying, "Ford's board remains very strong, independent and experienced. Our board members are fully engaged in directing the company at this important time." 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 Oct. 10, 2008, Fitch Ratings downgraded the Issuer Default Rating of Ford Motor Company and Ford Motor Credit Company by one notch to 'CCC' from 'B-'. As reported in the Trouble Company Reporter on Oct. 17, 2008, Standard & Poor's Ratings Services placed the CCC ratings on nine Ford Motor Co.-related transactions on CreditWatch with negative implications. GENERAL MOTORS: Starts Looking for Hummer Buyer ----------------------------------------------- John D. Stoll and Jeff Bennett at The Wall Street Journal report that General Motors Corp. has started formal talks with potential buyers for its Hummer sport-utility-vehicle division. GM has begun sending out a sale prospectus for Hummer, WSJ says, citing a Hummer spokesperson. According to the report, Hummer's CEO Jim Taylor will lead the negotiations with interested parties. WSJ relates that the Hummer sale would bring some cash to GM, which is losing money, partly due to its continual restructuring effort in North America. Analysts say that GM could run short of cash within 12 months. GM is considering acquiring Chrysler. The report states that the Hummer and Chrysler deals are part of an initiative for GM to avoid a potential liquidity crunch in 2009. According to WSJ, GM started selling Hummer in June, when GM's board of directors launched a strategic review of the brand as demend for SUVs collapsed. WSJ relates that Hummer sales dropped as high gasoline prices and a rocky U.S. economy pressured consumers. The report says that GM, at first, said that it was open to some options for Hummer, including an overhaul of its line of models. In recent months, some Hummer dealers had to stop operations due to a 47% drop in the brand's sales in 2007, the report states. Edmunds.com says that dealers sold fewer than 10 Hummers per month and offered $9,251 in sales incentives per vehicle sold. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Latin America, Africa and Middle East, with headquarters in Miramar, Florida, is one of GM's four regional business units. GM LAAM employs approximately 37,000 people in 18 countries and has manufacturing facilities in Argentina, Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and Venezuela. GM LAAM markets vehicles under the Buick, Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and Suzuki brands. At June 30, 2008, the company's balance sheet showed total assets of $136.0 billion, total liabilities of $191.6 billion, and total stockholders' deficit of $56.9 billion. For the quarter ended June 30, 2008, the company reported a net loss of $15.4 billion over net sales and revenue of $38.1 billion, compared to a net income of $891.0 million over net sales and revenue of $46.6 billion for the same period last year. G&G/PENINSULA: Section 341(a) Meeting Scheduled for November 5 -------------------------------------------------------------- The U.S. Trustee for Region 7 will convene a meeting of G&G/Peninsula, LP's creditors on Nov. 5, 2008, at 1:00 p.m., at the Room 118 in Austin. This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Cedar Park, Texas-based G&G/Peninsula, LP, filed for Chapter 11 protection on Oct. 6, 2008 (Bankr. W. D. Texas Case No. 08-11913). Mark Curtis Taylor, Esq., at Hohmann & Taube LLP assists the company in its restructuring effort. The company listed assets of $10 million to $50 million and debts of $1 million to $50 million. GATEWAY ETHANOL: Section 341(a) Meeting Scheduled for November 5 ---------------------------------------------------------------- The U.S. Trustee for Region 20 will convene a meeting of Gateway Ethanol, LLC's creditors on Nov. 10, 2008, at 11:00 a.m., at the Room 173 in Kansas City. This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Pratt, Kansas-based Gateway Ethanol, LLC, operates an ethanol plant that has a capacity of 55 million gallons a year, according to Orion Ethanol's Web site. The Company filed for bankruptcy protection on October 5, 2008 (Bankr. D. Ks. Case No. 08-22579). Laurence M. Frazen, Esq., Megan J. Redmond, Esq., and Tammee E. McVey, Esq., at Bryan Cave, LLP, represent the Debtor in its restructuring efforts. In its filing, the Debtor listed estimated assets between $50 million to $100 million and estimated debts between $50 million to $100 million. GRAY TELEVISION: Moody's Reviews Ratings for Possible Downgrade --------------------------------------------------------------- Moody's Investors Service placed on review for possible downgrade the ratings of Gray Television, Inc., FoxCo Acquisition Sub L.L.C., Local TV Finance, LLC, Newport Television Holdings LLC and NV Broadcasting, LLC. The rating actions are prompted by Moody's heightened concerns that the television broadcasting sector will face substantial revenue and cash flow deterioration due to the high probability of further deterioration in the U.S. economy and its impact on advertising revenue. Television broadcasters derive a majority of their revenue from cyclical advertising. Annual television station revenue performance is additionally affected by the timing of the Olympics and elections. TV broadcast station revenues will be lower in 2009 due to the absence of these latter events. Additionally, Moody's expects television broadcasting revenue to continue to come under increasing cyclical pressure due to depressed consumer confidence, the slowdown in consumer spending, its impact on corporate profits and the resulting cutbacks in advertising and marketing budgets by several industries. In addition, Moody's notes that the primarily fixed cost base of most television broadcasting companies offers limited avenues to reduce costs in a downturn. As a result, the operating cash flow and the fundamental credit profiles of television broadcasters could weaken dramatically in the face of a weak economic and advertising climate. Moody's expects the deteriorating cash flows and high debt leverage to erode headroom under financial maintenance covenants, which in some cases could cause severe liquidity pressure. While the sale of assets can provide broadcasters with additional liquidity, in S&P's view, a sale of stations may be difficult and may take longer due to the current adverse credit environment and lack of financing availability. Reduced access to capital markets will also make it challenging for companies to refinance debt, raise additional funding and remedy covenant problems. Moody's has placed these ratings under review for possible downgrade: Issuer - Gray Television, Inc. * Corporate family rating -- B2 * Probability-of-default rating -- B3 * $100 million revolving credit facility -- B2 (LGD 3, 35%) * $925 million term loan facility -- B2 (LGD 3, 35%) Outlook revised to under review for possible downgrade from negative. Gray Television, Inc., headquartered in Atlanta, Georgia, is a television broadcaster that owns 36 primary television stations serving 30 mid-sized markets. The company's total revenues were approximately $307 million for year ended December 31, 2007. Issuer - FoxCo Acquisition Sub L.L.C. * Corporate family rating -- B2 * Probability-of-default rating -- B2 * $50 million Senior Secured Revolving Credit Facility -- B1 (LGD 3, 32%) * $515 million Senior Secured Term Loan B Facility -- B1 (LGD 3, 32%) * $200 million Senior Unsecured Notes -- Caa1 (LGD 5, 86%) Outlook revised to under review for possible downgrade from stable. FoxCo Acquisition Sub L.L.C., headquartered in Ft. Worth, Texas, owns and operates 8 television stations in 8 markets. The stations' 2007 revenue was approximately $309 million. Issuer - Local TV Finance, LLC * Corporate family rating -- B2 * Probability-of-Default rating -- B2 * $30 million 6-year Senior Secured Revolving Credit Facility - Ba3 (LGD2, 29%) * $275 million 6-year Senior Secured First Lien Term Loan - Ba3 (LGD2, 29%) * $190 million 8-year Senior Notes - Caa1 (LGD5, 83%) Outlook revised to under review for possible downgrade from negative. Local TV Finance, LLC, headquartered in Ft. Worth, Texas, owns nine television broadcasting stations in eight mid-sized markets. Issuer - Newport Television Holdings LLC * Corporate family rating -- B2 * Probability-of-default rating -- B2 * $100 million Senior Discount Notes -- Caa1 (LGD 6, 94%) Outlook revised to under review for possible downgrade from stable. Issuer - Newport Television LLC * $590 million senior secured credit facility -- Ba3 (LGD 3, 30%) * $200 million Senior PIK Toggle Notes -- Caa1 (LGD 5, 81%) Outlook revised to under review for possible downgrade from stable. Newport Television Holdings LLC, headquartered in Kansas City, Missouri, owns and operates 50 television stations in 22 markets. The company's 2007 revenue was approximately $338 million. Issuer - NV Broadcasting, LLC * Corporate Family Rating -- B3 * Probability-of-default rating -- B3 * $20 million Senior Secured First Lien Revolving Credit Facility -- B1 (LGD 3, 30%) * $195 million Senior Secured First Lien Term Loan Facility -- B1 (LGD 3, 30%) * $100 million Senior Secured Second Lien Term Loan Facility -- Caa2 (LGD 5, 80%) Outlook revised to under review for possible downgrade from stable. Parkin Broadcasting, LLC * $5 million Senior Secured First Lien Revolving Credit Facility -- B1 (LGD 3, 30%) * $40 million Senior Secured First Lien Term Loan Facility -- B1 (LGD 3, 30%) Outlook revised to under review for possible downgrade from stable. NV Broadcasting, LLC, headquartered in Los Angeles, California owns and/or operates 13 major affiliated broadcast television stations and two CW and two MyTV affiliated broadcast stations in 8 markets. The company has also announced the establishment of KBNZ as the CBS network affiliate serving the Bend,Oregon market. The company's pro-forma 2007 net revenue was approximately $109 million GUZMAN GROUP: Case Summary & Two Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Guzman Group, LLC 7335 Fairway Drive, Apt. 620 Miami Lakes, FL 33014 dba A-Kid's Party Express Bankruptcy Case No.: 08-25412 Chapter 11 Petition Date: October 16, 2008 Court: Southern District of Florida (Miami) Judge: Laurel M Isicoff Debtor's Counsel: David S Abrams, Esq. salvador@abramslaw.cc 9400 S Dadeland Blvd., PH 3 Miami, FL 33156 Tel: (305) 598-1880 Fax: (305) 598-1881 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/flsb08-25412.pdf HAMIL CORP: Section 341(a) Meeting Scheduled for November 13 ------------------------------------------------------------ The U.S. Trustee for Region 21 will convene a meeting of The Hamil Corporation's creditors on Nov. 13, 2008, at 1:00 p.m., at the Hearing Room 362 in Atlanta. This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Griffin, Georgia-based The Hamil Corporation offers industrial construction services. The company filed for Chapter 11 protection on Oct. 6, 2008 (Bankr. N. D. Ga. Case No. 08-12916). Scott B. Riddle, Esq., who has an office at Resurgens Plaza, Atlanta, Georgia, represents the company in its restructuring effort. The company listed assets of $10 million to $50 million and debts of $1 million to $10 million. HEALTHCARE PARTNERS: S&P Lifts Counterparty Credit Rating to 'BB+' ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its counterparty credit rating on HealthCare Partners LLC to 'BB+' from 'BB'. The outlook is stable. Standard & Poor's also raised its senior secured debt rating on HealthCare to 'BBB-' from 'BB+'. The recovery rating remains unchanged at '2', indicating the expectation for substantial recovery in the event of a payment default. Debt outstanding through Aug. 31, 2008, totaled $226.4 million. "The upgrade reflects HealthCare's growing market scale, improving financial condition, and strengthening competitive position," said Standard & Poor's credit analyst Joseph Marinucci. Operating performance continues to benefit from effective care management initiatives -- partly attributed to the successful rollout of its electronic medical records project and to its generally well- managed acquisition and integration of recent acquisitions. These have meaningfully expanded the company's scale and have better diversified its business profile. HealthCare has strengthened its balance sheet by enhancing liquidity, reducing debt outstanding, and building more shareholders' equity via the partial retention of earnings. The stable outlook reflects HealthCare's established competitive presence in its core market in southern California, strong profitability and cash flow generation relative to peers, and relatively modest financial leverage. Offsetting factors include client and geographic concentrations, acquisition-based growth strategy risks, and a significant, but diminishing, level of intangibles relative to shareholders' equity. JETBLUE AIRWAYS: Improved Revenue Cues S&P to Affirm 'B-' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on JetBlue Airways Corp. (B-/Negative/--), and removed them from CreditWatch, where they were placed with negative implications May 22, 2008, as part of an industrywide review. The outlook is negative. Ratings on pass-through certificates insured by bond insurers were not on CreditWatch and are not affected. "The rating affirmation reflects improving revenue generation and lower oil prices, which should allow JetBlue to maintain adequate near-term liquidity and generate better financial results in 2009," said Standard & Poor's credit analyst Philip Baggaley. The ratings on JetBlue reflect high debt levels undertaken to finance its previously rapid growth rate, participation in the cyclical, price-competitive, and capital-intensive airline industry, and near-term risks from high jet fuel prices and a rapidly weakening U.S. economy. Ratings also incorporate the airline's low operating cost structure. Forest Hills, New York-based JetBlue is a midsize U.S. airline that started operating in 1999 from New York's JFK International Airport, which remains its principal hub. In response to the difficult airline industry conditions, the company is sharply reducing capacity growth, and has joined in the industrywide trend toward raising fares and implementing various added fees to generate additional revenues. S&P expects the company to generate a moderate loss of well under $100 million this year, with some improvement expected in 2009. The extent of the improvement will depend, as at other U.S. airlines, on the level of fuel prices and the degree to which economic deterioration slows revenue growth. JetBlue and other U.S. airlines have been reporting accelerating year-over-year gains in passenger revenue per available seat mile this year, due mostly to their ability to raise fares and carry fewer passengers flying on deeply discounted tickets following the widespread capacity cuts. While S&P does not foresee a reversal of the capacity reductions in response to recently lower fuel prices, S&P also expects that outright recession in the U.S. and in some other global economies will weaken demand and slow revenue gains in 2009. Based on S&P's 2008 earnings forecast, EBITDA interest coverage should slip to 1.3x this year, compared with 1.4x in 2007, and funds flow to debt to be around 5%, compared with 7.3% last year. Credit measures should improve modestly in 2009, based on expected earnings improvement and roughly unchanged debt levels. S&P could lower its ratings on JetBlue if recession or a renewed spike in fuel prices causes greater-than-expected losses and unrestricted cash to decline below $500 million. S&P could revise the outlook to stable if lower fuel prices and continued revenue gains allows JetBlue to return to profitability, restoring funds flow to debt to the high single-digit percent area. JP MORGAN: Fitch Downgrades Class 1B3 Trust Rating to 'CCC/DR2' --------------------------------------------------------------- Fitch Ratings has taken rating action on J.P. Morgan Mortgage Trust certificates. The class represents a beneficial ownership interest in separate trust funds, which include bonds that have been downgraded. J.P. Morgan Residential Mortgage Acceptance Corp, MBS Series 2002- R2: -- 1B3 downgraded from 'BB' to 'CCC/DR2'. The rating actions were taken as part of Fitch's ongoing surveillance process of existing transactions. JUDITH GARVIN: Case Summary & 15 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Judith Marie Garvin aka Judy Garvin 39341Diamond Drive Hemet, CA 92543 Bankruptcy Case No.: 08-24154 Chapter 11 Petition Date: October 15, 2008 Court: Central District Of California (Riverside) Judge: Meredith A. Jury Debtor's Counsel: Marc A. Duxbury, Esq. info@countylawcenter.com 5963 La Place Ct., Suite 312 Carlsbad, CA 92008 Tel: (760) 438-5291 Total Assets: $3,686,457 Total Debts: $2,181,077 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/califcb08-24154.pdf KARYKEION INC: Schedules-Filing Deadline Extended to November 10 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California extended, until Nov. 10, 2008, the time within which Karykeion Inc. must file its Statement of Financial Affairs and Schedules of Assets and Liabilities. The Debtor told the Court it needs sufficient time to identify all employees and patients and their contact information. This task is time consuming, very labor intensive and is being performed for the most part by Debtor's small accounting and administrative staff, who, in addition, continue to perform their regular duties as well. In addition to staff priorities, the Debtor's underlying financial books and records regarding the patients and employees are incomplete and may be, in many instances where multiple patients have the same first and last name, inaccurate and not contain current contact and identifying information. The Debtor said it has retained the accounting firm of Grobstein Horwath to assist the staff in compiling and aggregating all of the data needed to prepare and submit as accurate and complete financial information. After the information as to employees and patients has been aggregated and compiled, the Debtor must prepare the data and presentation so as to "mask" or hide the social security numbers of those listed to ensure that information is not accessible in the public record ans is otherwise protected from unathourized disclosure. Headquartered in Studio City, California, Karykeion Inc. operates two hospitals known as Community Hospital of Huntington Park and Mission hospital of Huntington Park. The Debtor filed for Chapter 11 protection on Sept. 22, 2007 (Bankr. C.D. Calif. Case No. 08- 17254). Michael H. Weiss, Esq., at Fainsbert, Mase & Snyder LLP, is the Debtor's proposed counsel. When the Debtor filed for protection from its creditors, it listed both assets and liabilities between $10 million and $50 million. KEY DEVELOPERS: Sells 171 Channelside Condos for $21.9 Million -------------------------------------------------------------- An unnamed company has paid $21.9 million for 171 condominiums at The Place at Channelside, during an auction of the building Wednesday, said Lamar Fisher of Fisher Auction Co., Shannon Behnken, of the Tampa Tribune (Florida), reported Thursday. According to the report, the units were originally offered for about $200,000 to $1,000,000 each. Key Developers Group LLC, the developer of the project, owes the bank more than $47 million. "I think everyone involved is really happy with the result," Mr. Fisher said. Key Developers Group LLC, filed for Chapter 11 bankruptcy reorganization on March 5, 2008, after some buyers canceled their contracts and others filed cases against the company to get their deposits back. The auction sale was ordered by the U.S. Bankruptcy Court for the Middle District of Florida in Tampa. About Key Developers Tampa, Florida-based Key Developers Group LLC is a real estate developer. Its developments include a 469-unit, The Place at Channelside I and II. The Place at Channelside I, an-8-floor building, was completed in 2007, while The Place at Channelside II, a 32-floor building, was never built. Its president is Fida Sirdar Hussain. Key Developers filed for chapter 11 on March 5, 2008 (Bankr. M.D. Fla. Case No. 08-02929). Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser PA, represents the Debtor in its restructuring efforts. When it filed for bankruptcy, the Debtor disclosed $100 million to $500 million in estimated assets, and $50 million to $100 million in estimated debts. LANDMARK II: Moody's Slashes $6MM Notes Rating to 'Ca' from 'Ba2' ----------------------------------------------------------------- Moody's Investors Service has downgraded the notes issued by Landmark II CDO Ltd.: Class Description: $24,000,000 Class C Third Priority Floating Rate Notes, Due 2012 -- Prior Rating: Baa2, on review for possible downgrade -- Prior Rating Date: August 15, 2008 -- Current Rating: B1 Class Description: $6,000,000 Class D Fourth Priority Floating Rate Notes, Due 2012 -- Prior Rating: Ba2, on review for possible downgrade -- Prior Rating Date: August 15, 2008 -- Current Rating: Ca According to Moody's, these rating actions are primarily a result of the par losses to the deal due to the disposition of the underlying securities with maturities past the legal maturity of the transaction at below par values. In addition, deterioration in the credit quality of the transaction's underlying collateral pool consisting primarily of senior secured loans has also contributed to the rating actions. In addition, Moody's announced that it has confirmed the ratings on these notes: Class Description: $12,000,000 Class B Second Priority Floating Rate Notes, Due 2012 -- Prior Rating: Aa2, on review for possible downgrade -- Prior Rating Date: August 15, 2008 -- Current Rating: Aa2 Upon further review, Moody's determined that the expected loss on Class B Notes is consistent with the Aa2 rating. LANDSOURCE COMMUNITIES: Barclays Files Plan, Mulls Asset Sale ------------------------------------------------------------- Barclays Bank PLC, the administrative agent under the debtor-in- possession credit facility the prepetition first lien credit facility, filed with the U.S. Bankruptcy Court for the District of Delaware a Chapter 11 joint plan of reorganization for LandSource Communities Development LLC and its 20 debtor affiliates, on October 13, 2008. The Plan sponsored by Barclays contemplates the sale of substantially all of the Debtors' assets through an auction. The auction will be conducted not later than 120 days after the confirmation of the Plan. The auction procedures will be subject to the Court's approval. A plan administrator, to be appointed by Barclays, will run the Debtors' estate starting on the effective date of the Plan. The existing equity holders of LandSource Communities will lose their interests in the land-developer but may receive distributions under the Plan. Prepetition, LandSource's equity sponsors were Lennar Corporation, L&R Property Corporation, who each held a 16% stake, and the California Public Employees Retirement System, who owned 68% of the equity. Barclays did not disclose whether key parties, like the Debtors, the existing equity holders, or the Official Committee of Unsecured Creditors, are supporting the Plan. Under the Bankruptcy Code, acceptances by impaired creditors, i.e. creditors who are not receiving 100 cents on the dollar on their claims, are necessary in order to obtain confirmation of the Plan. A full-text copy of LandSource's Joint Plan of Reorganization is available for free at: http://ResearchArchives.com/t/s?33d5 Barclays has not yet filed a disclosure statement that explains the terms of the Plan. Under Section 1125 of the Bankruptcy Code, the plan proponent cannot solicit votes from the Debtors' creditors and interest holders, unless the Court approves the disclosure statement as containing adequate information. As previously reported, the Debtors, on June 4, 2008, received a commitment letter from Barclays Bank PLC and Marathon Special Opportunity Fund, LP, for a senior secured priming superpriority DIP credit facilities of up to $1,185,000,000, including a roll- up of up to $1,050,000,000 in outstanding obligations under a first lien facility provided by Barclays prepetition. The Commitment Letter provides that the Debtors must file a Chapter 11 plan and disclosure statement that is acceptable in form and substance to Barclays on or prior to the later of the 120th day after the Petition Date, or October 6, 2008. The Debtors' exclusive period to file a plan under Section 1121 of the Bankruptcy Code also expired as of Oct. 7. With the expiration of the Debtors' exclusive plan filing period, any party-in-interest may file and solicit acceptances of a plan for the Debtors. The Plan, which was signed by Mark Manski, director at Barclays, specifically provides for: (a) a substantive consolidation of the Debtors for the purposes of the Plan only; (b) the sale of the Debtors' assets to successful bidders in an auction, with the proceeds to be distributed as: (i) payment in full of all DIP Revolver Loan Claims and DIP Roll-Up Loan Claims, (ii) payment in full of allowed administrative expense claims, allowed priority tax claims, and allowed priority non-tax claims, (iii) payment in full of allowed "permitted lien claims", (iv) payment to each holder of an allowed second lien secured claim of its pro rata share of the second lien secured claims proceeds, (v) payment to each holder of an allowed other secured claim of its other secured claim proceeds, (vi) payment to each holder of an allowed general unsecured claim of its pro rata share of the general unsecured claims proceeds, and (vii) payment to each holder of an allowed interest in LandSource Communities of its pro rata share of all remaining proceeds after all allowed claims against the Debtors are satisfied in full; and (c) the establishment and implementation of a liquidating trust for the purposes of (i) resolving disputed claims and interests, (ii) selling or disposing of all of the estate assets not sold in the auction, (iii) evaluating, prosecuting and resolving any and all causes of action, and (iv) collecting and distributing proceeds in accordance with the Plan. Under the Plan, Claims against and Interests in the Debtors are categorized in to seven classes: Class Claims/Interests ----- ---------------- 1 Priority Non-Tax Claims 2 Permitted Lien Claims 3 Convenience Class Claims 4 Second Lien Secured Claims 5 Other Secured Claims 6 General Unsecured Claims 7 Interests Claims in Class 1, Class 2 and Class 3 are not impaired under the Plan, while the remaining Classes of Claims and Interests are impaired under the Plan. Administrative expense claims, DIP Claims, which will receive full recovery under the Plan, are not classified. PLAN PROVISIONS A. Substantive Consolidation The effectiveness of the Plan is precedent on an order by the Bankruptcy Court providing for the substantive consolidation of the Debtors and their estates into a single estate for all purposes under the Plan including the purposes of voting and distributions. Barclays want the Court to enter an order confirming the Plan and holding, among other things, that all assets and liabilities of the Debtors will be deemed to be merged, and the obligations of each Debtor and each estate will be deemed to be obligations of the substantively consolidated Debtors and Estates. B. The Plan Administrator A plan administrator will be appointed and will (a) act as the trustee for the Liquidating Trust, (b) hold and liquidate all of the Estate Assets contributed to the Liquidating Trust for the benefit of the holders of Allowed Claims against and Interests in the Debtors and the Estates, (c) investigate and (if the Plan Administrator determines the pursuit is in the best interests of the beneficiaries of the Liquidating Trust) pursue causes of action to judgment or settlement, (d) make, on behalf of the Debtors, the distributions required to be made to creditors or interest holders, and (e) distribute any proceeds received by the Liquidating Trust in accordance with the provisions of the Plan. The Plan Administrator will be selected by Barclays, and will be announced at the Confirmation Hearing. The Plan provides that the U.S. Trustee will not select or supervise the Plan Administrator. >From and after the Effective Date, and until the Chapter 11 cases are closed, the affairs of the Debtors will be managed by the Plan Administrator, which will have the sole right to act on behalf of the Debtors. After the Effective Date, the Plan Administrator will have the sole authority to file and prosecute objections to settle or otherwise resolve, any Disputed Claims and Interests in any Class. C. Auction Promptly after the Court enters a Final Order, Barclays will commence marketing of the Estate Assets with the goal of maximizing the total Proceeds received for the assets in an auction to be held as soon as practicable, but in any event no later than 120 days after the Confirmation Date, unless Barclays determines that a later date is desirable. The Auction will be conducted pursuant to procedures that will be approved by a Final Order or another Final Order entered prior to or substantially contemporaneously with the Confirmation Order. The Debtors will cooperate fully with Barclays in marketing the Estate Assets and conducting the Auction. Holders of Allowed Secured Claims will be entitled to "credit-bid" those Claims at the Auction, as provided in the Plan and the Bidding Procedures. For the avoidance of doubt, NewCo, the Administrative Agent or other agents as the holders of DIP Revolver Loan Claims or DIP Roll-Up Loan Claims may designate, will be entitled to "credit-bid" certain of the applicable Claims at the Auction and any subsequent sale of the Estate Assets, subject to the terms and conditions agreed to by the holders. D. Attribution of Proceeds At the Confirmation Hearing, Barclays will announce the identity of an expert or experts, which will conduct an appraisal of the then-current value of the Estate Assets. The Court will authorize the experts to conduct the Appraisal, and will authorize and direct the Debtors to pay the reasonable fees and expenses of the experts incurred in connection with conducting the Appraisal. E. Establishment of NewCo On the Confirmation Date, Barclays will establish "NewCo" pursuant to the governance and other documents to be included in the Plan Supplement. Subject to those documents, NewCo will generally be established as a limited liability company organized under the laws of the State of Delaware. F. Establishment of Liquidating Trust On the Effective Date, a Liquidating Trust will be established, which will have the Plan Administrator as trustee. All Estate Assets, other than the Purchased Assets, the Causes of Action and the Liquidating Trust Funds, will be transferred to the Liquidating Trust, subject to all liens on and security interests in the Estate Assets and all Claims against and Interests in the Debtors. G. Preservation of Assets and Claims On the Effective Date, all rights, title and interest in and to the Estate Assets and all Proceeds, other than Proceeds required to make Distributions on the Initial Distribution Date, will be contributed to the Liquidating Trust and will remain with the Plan Administrator; provided, however, that the Purchased Assets will be transferred to the Successful Bidders on the Effective Date and the Proceeds required to make Distributions on the Initial Distribution Date will remain with the Debtors until distributed by the Plan Administrator on the Initial Distribution Date. H. Funding of Effective Date and Initial Distribution Date Payments. To the extent that the cash to be received by the Debtors and the Estates as a result of the Auction and the Cash the Debtors and the Estates are expected to have after the conclusion of the Auction are not sufficient to allow the Plan Administrator to satisfy certain conditions precedent to the Effective Date, Barclays may provide to the Estates and the Plan Administrator an additional cash as it deems necessary to allow the Plan Administrator to satisfy conditions precedent to the Effective Date. The aggregate Allowed Amount of the Debtors-In-Possession Roll-Up Loan Claims will be increased by an amount equal to the amount of Cash Barclays provided. I. Prosecution of Claims Against Third Parties The Plan Administrator may commence adversary or other legal proceedings to pursue avoidance claims and any other Causes of Action against the Debtors' affiliates, holders of Claims or Interests, and other third parties to the extent not settled or resolved prior to the Effective Date or pursuant to the Plan. J. Liquidation of Estate Assets The Plan Administrator will liquidate all Estate Assets as quickly as practicable in a commercially reasonable manner and reduce them to Cash, subject to the right of holders of Allowed Secured Claims to "credit-bid" those Allowed Claims in any sale of Estate Assets; provided, however, that if the Plan Administrator, determines that an asset is burdensome or of inconsequential value, the asset may be abandoned. K. Effect of Failure to Consummation Plan If conditions to Plan consummation and the occurrence of the Effective Date has not been satisfied or duly waived on or before the date that is 180 days after the Confirmation Date, the Confirmation Order may be vacated by the Court upon a motion filed by Barclays. If the Confirmation Order is vacated, the Plan will be null and void in all respects, and nothing contained in the Plan will (a) constitute a waiver of any Claims against or Interests in the Debtors, or (b) prejudice in any manner the rights of the Successful Bidders or Barclays. L. Assumption of Executory Contracts On the Effective Date, the Debtors will assume and assign to the successful bidders certain of their contracts. Barclays will file with the Court and serve on each non-Debtor party to an Assumed Contract, at least 15 days prior to the Effective Date, a schedule of all Assumed Contracts and, to the extent applicable, the proposed cure amounts. Effect of The Plan On Claims And Interests (a) Release of Liens on Purchased Assets Unless a particular Claim is reinstated or left unaltered: (i) each holder of a Secured Claim or a Claim that is purportedly secured by any of the Purchased Assets will, (a) turn over and release to the applicable Successful Bidder any and all Purchased Assets that secured the Claim; and (b) execute the documents and instruments as may be require to evidence the holder's release of the property; and (ii) on the Effective Date all claims to the property will revert to the applicable Successful Bidder free and clear of all Claims. All liens of the holders of the Claims will be deemed to be canceled and released as of the Effective Date. (b) Release of Liens on Other Estate Assets Unless a particular Claim is reinstated or left unaltered, each holder of a Secured Claim or a Claim that is purportedly secured by any of the Estate Assets will (i) turn over and release to the Debtors or the Liquidating Trust, as applicable, the property; and (ii) execute documents and instruments as may be require to evidence or record the holder's release of the property. (c) Effect of Failure to Release Liens No distribution will be made to any holder of a Claim or Interest unless and until the holder executes and delivers to the Debtors or the Plan Administrator, a release and surrender of liens, or demonstrates the non-availability of the items to the satisfaction of the Plan Administrator. The Plan Administrator may reasonably require the holder of the Claim or Interest to hold the Plan Administrator harmless up to the amount of any Distribution made in respect of the unavailable note, instrument or other item evidencing the Claim or Interest. Any holder that fails to comply with the provisions within 180 days after the Effective Date will be deemed to have no further Claim against or Interest in the Debtors, the Estates, the Liquidating Trust, the Successful Bidders or the Plan Administrator, and will not participate in any Plan distribution, and the Distributions that would otherwise have been made to the holder will be treated as Unclaimed Property. (d) Revesting and Vesting; Retention and Enforcement of Claims Except as otherwise provided in the Plan, on the Effective Date all Estate Assets other than the Purchased Assets and the Proceeds required to make Distributions on the Initial Distribution Date pursuant to the Plan will vest in the Liquidating Trust, including the rights to Distributions afforded to holders of certain Claims and Interests under the Plan. The Plan Administrator may use the property to settle and compromise Claims or Interests without supervision of the Court. * * * Led by LandSource Communities Development LLC, the LandSource Group is a large and diversified land development company. Since its inception, it has managed over 35,000 homesites across the nation, including in the states of Arizona, California, Florida, New Jersey, Nevada and Texas. As of 2007, there were over 22,800 remaining homesites and over 30,000 acres of land assets remaining in LandSource's Newhall portfolio. 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 expired on Oct. 6, 2008. (LandSource Bankruptcy News, Issue No. 15; http://bankrupt.com/newsstand/or 215/945-7000). LANDSOURCE COMMUNITIES: Treatment of Claims Under Chapter 11 Plan ----------------------------------------------------------------- Barclays Bank PLC's Joint Plan of Reorganization of LandSource Communities Development, LLC, and its affiliated debtors contemplates a sale of substantially all of the Debtors' tangible and intangible assets. Majority of the proceeds from the sale will be paid to holders of allowed claims in accordance with these priorities established by the Bankruptcy Code: A. Claims and Interest Classified Under The Plan Class Description Treatment & Status ----- ----------- -------------------- 1 Priority Non- Not Impaired. Except to the extent Tax Claims a holder of a Priority Non-Tax Claim agrees to less favorable treatment, each holder of an Allowed Priority Non-Tax Claim will be paid the Allowed Amount of the Claim in full in cash on the later of (i) the Initial Distribution Date, and (ii) the first Distribution Date after the date the Claim becomes Allowed. 2 Permitted Not Impaired. Except to the extent Lien Claims a holder of a Permitted Lien Claim agrees to less favorable treatment, each holder of an Allowed Permitted Lien Claim will be paid the Allowed Amount of such Claim in full in cash on the later of (i) the Initial Distribution Date, and (ii) the first Distribution Date after the date the Claim becomes Allowed. Each holder of an Allowed Permitted Lien Claim will be entitled to "credit-bid" all or part of the Allowed Claim for any or all of the property securing the Claim at the Auction, as provided in the Bidding Procedures, and at any subsequent sale of Estate Assets. 3 Convenience Not Impaired . Each holder of an Class Claims Allowed Convenience Class Claim will be paid the Allowed Amount of the Claim in full in cash on the later of (i) the Initial Distribution Date, and (ii) the first Distribution Date after the date the Claim becomes Allowed. 4 Second Impaired. Except to the extent a Lien holder of a Second Lien Secured Secure Claim agrees to less favorable Claims treatment, the Second Lien Administrative Agent, for the benefit of each holder of an Allowed Second Lien Secured Claim, will be paid the Second Lien Secured Claims Proceeds on (i) the later of (A) the Initial Distribution Date, and (B) the first Distribution Date after the date the Claim becomes Allowed; and (ii) any subsequent Distribution Date on which Second Lien Secured Claims Proceeds are held by the Liquidating Trust (or earlier date as determined by the Plan Administrator). Each holder of an Allowed Second Lien Secured Claim will be entitled to "credit-bid" all or part of the Allowed Claim for any or all of the Second Lien Collateral at the Auction, as provided in the Bidding Procedures, and at any subsequent sale of Estate Assets. 5 Other Impaired. Except to the extent a Secured holder of an Other Secured Claim Claims agrees to less favorable treatment, each holder of an Allowed Other Secured Claim will be paid its respective Other Secured Claim Proceeds on (i) the later of (A) the Initial Distribution Date, and (B) the first Distribution Date after the date the Claim becomes Allowed; and (ii) any subsequent Distribution Date on which the Other Secured Claim Proceeds are held by the Liquidating Trust (or earlier date as determined by the Plan Administrator). Each holder of an Allowed Other Secured Claim will be entitled to "credit-bid" all or part of the Allowed Claim for any or all of the Claim's Other Secured Claim Collateral at the Auction, as provided in the Bidding Procedures, and at any subsequent sale of Estate Assets. 6 General Impaired. Other than as provided Unsecured in the Final DIP Order, and except Claims to the extent that a holder of a General Unsecured Claim agrees to less favorable treatment, each holder of an Allowed General Unsecured Claim will be paid its Pro Rata Share of the General Unsecured Claims Proceeds on (i) the later of (A) the Initial Distribution Date, and (B) the first Distribution Date after the date the Claim becomes Allowed; and (ii) any subsequent Distribution Date on which General Unsecured Claims Proceeds are held by the Liquidating Trust. 7 Interest Impaired. Class 7 consists of all Interests in LandSource Communities Development LLC. Interests in LandSource Communities will be canceled on the Effective Date, and the holders of the canceled Interests will not receive or retain any interest in the Debtors or the Estates on account of those Interests, other than the right to receive Distributions provided in the Plan. Classes 4, 5, 6, and 7 are impaired Classes under the Plan, thus, they are not entitled to vote to accept or reject the Plan. B. Unclassified Claims Class Description Allowance & Payment ----- ----------- ------------------- N/A Administrative An Administrative Expense Claim Expense Claims that has been properly filed will become an Allowed Administrative Expense Claim if no objection is filed with the Court within 180 days after the Administrative Expense Bar Date. If an objection is filed within the 180 day period, the Administrative Expense Claim will become an Allowed Administrative Expense Claim only to the extent allowed by Final Order of the Court. Each holder of an Allowed Administrative Expense Claim will receive (i) the Allowed Amount of the Claim in one cash payment on the later of (A) the Initial Distribution Date, and (B) the first Distribution Date after the Claim becomes Allowed , or (ii) other less favorable treatment as may be agreed upon in writing by the Debtors or the Plan Administrator, as applicable, and the holder; provided, however, that an Administrative Expense Claim representing a liability incurred in the ordinary course of business by the Debtors may be paid in the ordinary course of the Debtors' business. N/A Fee Claims A Fee Claim, with respect to which its has been properly filed, will become an Allowed Fee Claim only to the extent allowed by Final Order of the Court, and will be paid in accordance with the Final Order. N/A Priority Tax Each holder of an Allowed Priority Claims Tax Claim will receive, at the sole option of the Debtors or the Plan Administrator, as applicable, (i) the Allowed Amount of the Claim in one cash payment on the later of (A) the Initial Distribution Date, and (B) the first Distribution Date after the Claim becomes Allowed; (ii) the Allowed Amount of the Claim plus interest accrued at the Mid-Term Applicable Federal Rate, in equal annual cash payments on each anniversary of the Effective Date, until the last anniversary of the Effective Date that precedes the sixth anniversary of the Commencement Date; provided, however, that the treatment will not be less favorable than that received by the most favored Unsecured Claim provided for by the Plan; or (iii) the other less favorable treatment as may be agreed upon in writing by the Debtors or the Plan Administrator, as applicable, and the holder, provided, however, if a Priority Tax Claim is an Assumed Liability pursuant to a Sale Transaction, it will be assumed by the applicable Successful Bidder. N/A DIP Revolver Except to the extent 100% of Loan Claims holders of the DIP Revolver Loan Claims agree to a different treatment, the Administrative Agent, for the benefit of each holder of a DIP Revolver Loan Claim, will be paid the aggregate Allowed Amount of the DIP Revolver Loan Claims in full in cash on the Initial Distribution Date. N/A DIP Roll-Up Except to the extent holders of DIP Loan Claims Roll-Up Loan Claims (i) constituting 50% or more of the total number of the holders, and (ii) holding DIP Roll-Up Loan Claims in an aggregate Allowed Amount of not less than 66 2/3% of the aggregate Allowed Amount of all DIP Roll-Up Loan Claims, agree to other treatment, the Administrative Agent, for the benefit of each holder of a DIP Roll-Up Loan Claim, will be paid the aggregate Allowed Amount of the DIP Roll-Up Loan Claims in full in cash on the Initial Distribution Date. 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 expired on Oct. 6, 2008. (LandSource Bankruptcy News, Issue No. 15; http://bankrupt.com/newsstand/or 215/945-7000). LANDSOURCE COMMUNITIES: Gives Up Exclusive Right to File Plan ------------------------------------------------------------- LandSource Communities Development, LLC, and its affiliated debtors have not requested an extension of their exclusive plan filing period, which expired as of Oct. 7. Section 1121(b) of the Bankruptcy Code provides for an initial 120-day period after the Petition Date during which a debtor has the exclusive right to file a Chapter 11 plan. Section 1121(d) provides that upon a request by a party-in-interest, the the U.S. Bankruptcy Court for the District of Delaware may for cause reduce or increase the 120-day period. The Debtors' $1,185,000,000 debtor-in-possession credit agreement with Barclays Bank PLC and Marathon Special Opportunity Fund, LP, however, required the Debtors to file a Chapter 11 plan and disclosure statement on or prior to the later of the 120th day after the Petition Date, or Oct 6. The DIP Credit Agreement provided that the Debtors cannot seek an extension of the exclusive period, absent the consent of Barclays. With the expiration of the Debtors' exclusive plan filing period, any party in interest may file and solicit acceptances of a plan for the Debtors. Barclays, on Oct. 13, filed a Chapter 11 for the Debtors' estates. The plan contemplates the sale of substantially all of the Debtors' assets through an auction. Proceeds will be used to pay off Barclays and other claimants. 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. (LandSource Bankruptcy News, Issue No. 15; http://bankrupt.com/newsstand/or 215/945-7000). LEAR CORP: S&P Cuts Corp. Credit to 'B' on Weak Sales & Cash Flow ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Lear Corp., including the corporate credit rating, to 'B' from 'B+', reflecting the prospects for Lear's sales and cash flow to be weaker than S&P expected in 2009, resulting in credit measures that are inconsistent with the previous rating. For the current rating, S&P now expect adjusted debt to EBITDA to exceed 4.0x but be less than 5.0x. At the same time, S&P also lowered the issue- level rating on Lear's $1 billion senior secured term loan facility ($988 million outstanding) to 'BB-' from 'BB' and lowered the issue-level rating on Lear's senior unsecured notes to 'B-' from 'B'. The outlook is negative. "Falling auto demand in North America and Europe and ongoing adverse shifts in product mix toward smaller passenger cars in the U.S. are the main reasons for the downgrade," said Standard & Poor's credit analyst Lawrence Orlowski. "We now expect U.S. light-vehicle sales to be 13 million units in 2009, and light- vehicle sales in Europe are continuing to weaken. S&P believes the weak economy will extend well into 2009 and suppress purchases of big-ticket items such as autos, so S&P do not expect production for many of Lear's key SUV and full-size pickup truck platforms to rebound in the near term," he continued. Lear recently reduced its 2008 guidance for sales and core operating earnings by 7% and 20%, respectively. Lear has a highly leveraged financial risk profile, combined with a weak business risk position that is dominated by the intense competitive pressures of the global auto supply industry. Lear has a solid market position in the global auto seating supply sector (79% of revenues) and is a player in the electrical/electronics auto supply market. Although Lear has strong positions in the auto seating market and good growth prospects outside North America, continuing challenges come from customer concentration. Its two largest customers, Ford Motor Co. and General Motors Corp. (excluding the Saab, Volvo, Jaguar, and Land Rover units), represented about 42% of global sales in 2007. Moreover, the prices of raw materials such as steel, copper, and oil remain volatile, and unexpected price increases could reduce margins as well. S&P expects Lear to have sufficient liquidity to meet its cash obligations during the next year. Cash balances were $624 million as of June 28, 2008, and there are no material debt maturities until 2012. The bulk of Lear's cash needs are in the U.S., where its free cash flow is weakest and the bulk of its debt resides. Still, Lear can move cash balances between certain countries via intercompany notes and tax-related strategies. The outlook is negative. S&P expects the operating environment for auto suppliers to remain difficult in 2009, and Lear's leverage and heavy dependence on the U.S. auto manufacturers make the company especially vulnerable to negative industry developments. For the current rating, S&P expects the company's adjusted debt to EBITDA to stay below 5.0x and funds from operations to debt to exceed 10%. To reach the upper end or higher of our expected debt-to-EBITDA measure, Lear's EBITDA would have to drop an estimated 40% from the level of the 12 months ended June 28, 2008, and S&P could lower the rating if such a scenario seemed likely. A revision in S&P's outlook to stable in the near term is unlikely because market conditions will likely continue to deteriorate, preventing an improvement in credit measures. LEHMAN MORTGAGE: S&P Junks Ratings on 9 Pass-Through Certificates ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 28 classes of pass-through certificates from Lehman Mortgage Trust 2005-2, a residential mortgage-backed securities transaction backed by U.S. prime jumbo mortgage loan collateral. In addition, S&P affirmed its ratings on the remaining 13 classes of certificates. The downgrades reflect S&P's opinion that projected credit support for the affected classes is insufficient to maintain the previous ratings, given S&P's current projected losses. This RMBS transaction contains five separate pools of mortgage loans, divided into four different structure groups. Mortgage pools 4 and 5 are combined to form one structure group, "4-5". Structure groups 1 through 3 each have their own separate set of underlying component classes. For example, structure group 1 has underlying component classes B1(1)-B9(1). Each set of underlying component classes for structure groups 1 through 3 is combined to form one publicly issued set of subordinate classes: i.e., classes B1(1-3) through B9(1-3). This RMBS transaction requires that each of the first three structure groups be analyzed separately, with losses allocated to the three separate component classes. For example, realized losses from structure group 1 are first allocated to underlying component class B9(1), then to underlying component class B8(1), etc. Then, the lowest rating on any of the component classes determines the rating for the entire combined publicly issued subordinate classes: B1(1-3) through B9(1-3). Because mortgage pools 4 and 5 are cross-collateralized, they can be treated as one structure group. As of the Sept. 25, 2008, distribution, total and severe delinquencies and cumulative realized losses were as: Structure Total Severe Cumulative Group delinquencies (%) delinquencies (%) realized losses (%) --------- ----------------- ----------------- --------------- 1 7.76 3.86 0.25 2 8.13 3.79 0.32 3 8.13 4.93 0.32 4-5 5.71 3.82 0.18 S&P's lifetime projected losses, as a percentage of the original structure group balances, for this U.S. RMBS transaction are as: Structure group Projected loss (%) --------------- ------------------ 1 2.32 2 2.25 3 2.46 4-5 2.03 The remaining projected lifetime losses and the current credit support for the non-super-senior classes, as a percentage of the current structure group balances, as well as the multiple of current credit support to the remaining projected lifetime losses for each of the structure groups, are: Structure Remaining Current Multiple group projected losses (%) credit support (%) CCS/RPL --------- -------------------- ------------------ -------- 1 2.58 6.498 2.516 2 2.56 6.672 2.603 3 2.98 6.678 2.240 4-5 2.27 5.808 2.558 Because the non-super-senior classes for structure group 3 had a CCS/RPL multiple under 2.5, S&P lowered its rating on these classes to 'BBB'. The multiples for the non-super-senior classes in structure groups 1, 2, and 4-5 ranged between 2.5 and 3.0, so S&P lowered the ratings on these classes to 'A'. Similarly, the super-senior classes from the four different structure groups have current credit support ranging from 11.53% (group 3) to 20.32% (group 1), so their multiples of current credit support to remaining projected losses range from 3.868 times (group 3) to 8.532 times (group 4-5), well above S&P's 3.5 multiple for 'AAA' ratings. Therefore, S&P is affirming its 'AAA' ratings on the seven super-senior classes. In addition, S&P is affirming its 'AAA' ratings on five interest-only classes. Finally, S&P is affirming its 'CC' rating on class B6(4-5). Subordination provides credit support for this transaction. The underlying collateral for this deal consists of fixed-rate U.S. prime jumbo mortgage loans. The loans are secured primarily by first liens on one- to four-family residential properties with original terms to maturity from the first scheduled payment due date of no more than 30 years. Ratings Lowered Lehman Mortgage Trust 2005-2 Rating ------ Class CUSIP To From ----- ----- -- ---- 1-A3 52520MBQ5 A AAA 1-A4 52520MBR3 A AAA 2-A3 52520MBU6 A AAA 2-A6 52520MBX0 A AAA 3-A1 52520MBY8 BBB AAA 3-A3 52520MCA9 BBB AAA 3-A6 52520MCD3 BBB AAA 3-A7 52520MCE1 BBB AAA AP 52520MCN1 BBB AAA B1(1-3) 52520MCR2 B AA B2(1-3) 52520MCS0 B AA- B3(1-3) 52520MCT8 CCC BBB+ B4(1-3) 52520MCU5 CCC BBB B5(1-3) 52520MCV3 CCC BB B6(1-3) 52520MCW1 CCC B B7(1-3) 52520MDC4 CC CCC B8(1-3) 52520MDD2 D CC 4-A2 52520MCG6 A AAA 5-A1 52520MCH4 A AAA 5-A2 52520MCJ0 A AAA 5-A3 52520MCK7 A AAA 5-A4 52520MCL5 A AAA 5-A5 52520MCM3 A AAA B1(4-5) 52520MCX9 B AA B2(4-5) 52520MCY7 CCC BBB B3(4-5) 52520MCZ4 CCC B+ B4(4-5) 52520MDA8 CCC B B5(4-5) 52520MDF7 CC CCC Ratings Affirmed Lehman Mortgage Trust 2005-2 Class CUSIP Rating ----- ----- ------ 1-A1 52520MBN2 AAA 1-A2 52520MBP7 AAA 2-A1 52520MBS1 AAA 2-A2 52520MBT9 AAA 2-A4 52520MBV4 AAA 2-A5 52520MBW2 AAA 3-A2 52520MBZ5 AAA 3-A4 52520MCB7 AAA 3-A5 52520MCC5 AAA 4-A1 52520MCF8 AAA AX 52520MCP6 AAA PAX 52520MCQ4 AAA B6(4-5) 52520MDG5 CC LINENS 'N THINGS: Canadian Unit Files for Protection under BIA -------------------------------------------------------------- Linens Holding Co. disclosed that the company's Canadian operating subsidiary, Linens 'n Things Canada Corp. have filed for protection under the Canadian Bankruptcy and Insolvency Act. Linens Canada expects to appear before the Court in Canada in the next week to seek approval to liquidate its Canadian business. LNT's Canadian subsidiaries were not part of the company's voluntary filing for protection under Chapter 11 of the United States Bankruptcy Code on May 2, 2008. The filing in Canada follows approval by the United States Bankruptcy Court for the sale of LNT's assets to a joint venture comprised of Gordon Brothers Retail Partners, LLC, Hilco Merchant Resources, LLC, SB Capital Group, LLC, Tiger Capital Group, LLC, Hudson Capital Group, LLC and Great American Group, LLC. Under that agreement, the joint venture group will act as the agent for LNT to liquidate substantially all of its inventory through store closing sales at LNT's remaining 371 U.S. locations. If the Canadian court provides its approval, the agreement will also include the company's 40 Canadian locations. The store closing sales are expected to commence following approval by the Canadian court. "Since our bankruptcy filing in the United States in early May, LNT and our advisors have worked tirelessly to develop a viable restructuring plan for the company," Michael Gries, chief restructuring officer and interim CEO, said. "Unfortunately, the worsening economic situation in the U.S., the deepening decline in the real estate market, the further downturn in consumer spending and the frozen credit markets combined to make this sale of assets the best vehicle to satisfy our creditors. This is a difficult day, especially since our Canadian stores were among the best performing stores, but I am very appreciative of the incredible efforts and dedication of the entire LNT team, the loyalty of our guests and the significant support we received from vendors." About Linens 'n Things, Inc. Headquartered in Clifton, New Jersey, Linens 'n Things, Inc. -- http://www.lnt.com/-- is the second largest specialty retailer of home textiles, housewares and home accessories in North America. As of Sept. 30, 2008, Linens 'n Things operated 411 stores in 47 states and seven provinces across the United States and Canada. The company is a destination retailer, offering one of the broadest and deepest selections of high quality brand-name as well as private label home furnishings merchandise in the industry. Linens 'n Things has some 585 superstores (33,000 sq. ft. and larger), emphasizing low-priced, brand-name merchandise, in more than 45 states and about seven Canadian provinces. Brands include Braun, Krups, Calphalon, Laura Ashley, Croscill, Waverly, and the company's own label. Linens 'n Things was acquired by private equity firm Apollo Management in 2006. On May 2, 2008, these Linens entities filed chapter 11 petition (Bankr. D. Del.): Linens Holding Co. (08-10832), Linens 'n Things, Inc. (08-10833), Linens 'n Things Center, Inc. (08-10834), Bloomington, MN., L.T., Inc. (08-10835), Vendor Finance, LLC (08-10836), LNT, Inc. (08-10837), LNT Services, Inc. (08-10838), LNT Leasing II, LLC (08-10839), LNT West, Inc. (08-10840), LNT Virginia LLC (08-10841), LNT Merchandising company LLC (08-10842), LNT Leasing III, LLC (08-10843), and Citadel LNT, LLC (08-10844). Judge Christopher S. Sontchi presides over the case. Mark D. Collins, Esq., John H. Knight, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., provide Linens 'n Things with bankruptcy counsel. The Debtors' special corporate counsel are Holland N. O'Neil, Esq., Ronald M. Gaswirth, Esq., Stephen A. McCaretin, Esq., Randall G. Ray, Esq., and Michael S. Haynes, Esq., at Morgan, Lewis & Bockius, LLP. The Debtors' restructuring management services provider is Conway Del Genio Gries & Co., LLC. The Debtors' CRO and Interim CEO is Michael F. Gries, co-founder of Conways Del Genio Gries & Co., LLC. The Debtors' claims agent is Kurtzman Carson Consultants, LLC. The Debtors' consultants are Asset Disposition Advisors, LLC, and Protivit, Inc. The Debtors' investment bankers are Financo, Inc., and Genuity Capital Markets. (Bankruptcy News About Linens 'n Things; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) LOVELL PLACE: Asks Court to Extend Plan Filing Period to Nov. 14 ---------------------------------------------------------------- Eerie Times-News reports that Lovell Place Limited Partnership is asking the Hon. Warren W. Bentz of the U.S. Bankruptcy Court for the Western District of Pennsylvania to move the deadline for the Debtor to exclusively file a reorganization plan to Nov. 14, 2008. According to Eerie Times, Lovell Place wants the filing of the Plan extended to show how the apartment complex will emerge from bankruptcy. Eerie Times states that deadline for the Plan was previously extended to Oct. 14, 2008, from Aug. 15, 2008. Eerie Times relates that once the Plan is filed, Judge Bentz will schedule proceedings to sell Lovell Place at a public auction. According to the report, Guy Fustine, Esq., who represents Lovell Place, said that a prospective buyer is in place. Court documents say that Mr. Fustine said that the draft of the Plan is circulating among the interested parties. Lovell Place needs more time to complete the Plan, Eerie Times reports, citing Mr. Fustine. About Lovell Place Headquartered in Erie, Pennsylvania, Lovell Place Limited Partnership, develops and leases residential and commercial real estate. The company filed for chapter 11 protection on Oct. 15, 2005 (Bankr. W.D. Pa. Case No. 05-15114). Guy C. Fustine, Esq., at Knox McLaughlin Gornall & Sennett, P.C., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of less than $10 million and total debts of $26 million. Lovell Place Limited Partnership filed for bankruptcy after its developer, Stephen B. McGarvey, died in February 2005. Mr. McGarvey bought the complex in 1991 and used his own money and bank financing to renovate it. Lovell Place is still operating at East 13th and French streets. Lovell Place used to be a washing-machine factory. Now it includes 106 apartments, a restaurant, a bookstore, and state offices. MACH GEN: S&P Puts 'B+' $580MM Loan Rating Under Positive Watch --------------------------------------------------------------- Standard & Poor's Ratings Services placed on CreditWatch Positive its 'B+' rating on electricity generator MACH Gen LLC's $580 million ($574.2 million outstanding) senior secured first- lien term loan B due 2014, $100 million first-lien working-capital facility due 2012, and $60 million first-lien synthetic LOC facility due 2013. Standard & Poor's left unchanged the '1' recovery rating on the combined initial $734 million first-lien senior secured debt obligations, reflecting S&P's expectation of full recovery of principal in the event of a default. The CreditWatch placement is a result of the company's decision to sell its Covert generating plant near South Haven, Michigan to Tenaska Capital Management LLC and to use a portion of the proceeds to reduce its first-lien debt. The Covert plan is a 1,100-megawatt natural-gas fired combined cycle facility that began operation in 2004. The CreditWatch will remain in place until the extent of debt reduction is finalized, at which point S&P could raise the rating. MACH Gen benefits from a $100 million working-capital facility ($75 million undrawn) that it will use to fund each plant's seasonal operating requirements and provide finance for any capital-spending costs that the project incurs. Working-capital funds are also available to cover any debt service shortfalls that may arise. Lenders also benefit from an additional six-month debt service reserve fund. MERRILL LYNCH: Posts $5.2BB in 3rd Quarter Ended Sept. 26 --------------------------------------------------------- Merrill Lynch & Co. Inc. reported Thursay its results of operations for the three- and nine-month periods ended Sept. 26, 2008. Merrill Lynch reported a net loss from continuing operations for the third quarter of 2008 of $5.1 billion, compared with a net loss from continuing operations of $2.4 billion for the third quarter of 2007. Merrill Lynch's net loss for the third quarter of 2008 was $5.2 billion, compared with a net loss of $2.2 billion for the year-ago quarter. Third quarter 2008 net revenues were $16.0 million, driven by a number of significant items, including: -- Net write-downs of $5.7 billion resulting from the previously disclosed sale of U.S. super senior ABS CDOs and the termination and potential settlement of related hedges with monoline guarantor counterparties; -- Net pre-tax gain of $4.3 billion from the previously disclosed sale of the 20% ownership stake in Bloomberg, L.P.; -- Net write-downs of $3.8 billion principally from severe market dislocations in September, including real estate- related asset write-downs and losses related to certain government sponsored entities and major U.S. broker-dealers, as well as the default of a U.S. broker-dealer; -- Net gains of $2.8 billion due to the impact of the widening of Merrill Lynch's credit spreads on the carrying value of certain of its long-term debt liabilities, which was similarly impacted by the severe market movements in September; and -- Net losses of $2.6 billion resulting primarily from completed and planned asset sales across residential and commercial mortgage exposures. Excluding the items listed above, adjusted net revenues were $5.7 billion in the third quarter of 2008, down 31% on a comparable basis from the prior-year period, reflective of the challenging operating environment. Third quarter 2008 net revenues decreased from $380.0 million in the prior-year period, which included $8.5 billion in net write- downs, primarily related to U.S. ABS CDO and residential mortgage- related exposures, and a $609.0 million net gain related to the changes in carrying value of certain of the company's long-term debt liabilities. The net loss for the third quarter of 2008 was also impacted by certain non-compensation expense items including: -- A $2.5 billion non-tax deductible payment to Temasek Holdings related to the July common stock offering; and -- A $425.0 million expense, including a $125.0 million fine, arising from Merrill Lynch's previously disclosed offer to repurchase auction rate securities (ARS) from its private clients and the associated settlement with regulators. Merrill Lynch's net loss applicable to common shareholders for the third quarter and first nine months of 2008 included $2.1 billion of additional preferred dividends associated with the previously disclosed exchange of the mandatory convertible preferred stock. The net loss from continuing operations for the first nine months of 2008 was $11.7 billion, compared with net earnings from continuing operations of $1.7 billion in the prior-year period. The first nine months of 2008 net loss was $11.8 billion, compared with net earnings of $2.1 billion for the prior-year period. The first nine months of 2008 net revenues were $834.0 million compared with $19.4 billion in the prior-year period. The first nine months of 2008 adjusted net revenues were $20.6 billion, down 25% from the prior-year period on a comparable basis. Including the impact of this quarter's net loss, at the end of the third quarter of 2008, Merrill Lynch's total common equity increased to $29.8 billion, an increase of 41% or $8.7 billion from the second quarter of 2008. Total stockholders' equity was $38.4 billion at the end of the third quarter of 2008, an increase of 10% or $3.6 billion from the second quarter of 2008. Third Quarter and First Nine Months of 2008 Highlights -- Bank of America Corporation agreed to acquire Merrill Lynch & Co. in an all-stock transaction. -- Record year-to-date and third highest quarterly revenues in Rates and Currencies, up 27% from prior year-to-date. -- Global Equity Linked Products (Derivatives) net revenue growth of 23% sequentially and 14% year-on-year. -- Advisory revenues outperformed the market, increasing 12% sequentially; Merrill Lynch also ranked #2 in global announced M&A for the quarter. -- Solid performance in Global Wealth Management despite challenging market environment; FA headcount increased by 240 from a year ago; Net new annuitized assets are up $21.0 billion year-to-date. -- Significant progress in balance sheet and risk reduction; RWA declined by approximately 15% over the quarter. -- Substantial sale of $30.6 billion of gross notional amount of U.S. super senior ABS CDOs. -- Reductions of 98% of U.S. Alt-A residential mortgage net exposures. Including planned sales, reductions of 56% in non-U.S. residential mortgages and 25% in commercial real estate, excluding First Republic Bank and the U.S. Banks Investment Securities Portfolio. -- Enhanced capital base through a $9.8 billion common stock offering and the $4.425 billion sale of the Bloomberg stake. -- Subsequent to the third quarter, and as part of Bank of America's $25.0 billion participation in the TARP Capital Purchase Program, Merrill Lynch agreed and expects to issue $10.0 billion of non-voting preferred stock and related warrants to the U.S. Treasury pursuant to the program. "We continue to reduce exposures and de-leverage the balance sheet prior to the closing of the Bank of America deal," said John A. Thain, chairman and CEO of Merrill Lynch. "As the landscape for financial services firms continues to change and our transition teams make good progress, we believe even more that the transaction will create an unparalleled global company with pre- eminent scale, earnings power and breadth." Business Segment Review: In addition to the restructuring charge of $445.0 million recorded in the second quarter, an additional $39.0 million was recorded in the third quarter related to headcount reduction initiatives, primarily in technology. The third quarter and year-to-date amounts recorded in the business segments were as follows: $18.0 million and $329.0 million in Global Markets and Investment Banking and $21.0 million and $155.0 million in Global Wealth Management. The following discussion of business segment results excludes the impact of these restructuring expenses. a) Global Markets and Investment Banking (GMI) GMI recorded net revenues of negative $3.2 billion and a pre-tax loss of $6.0 billion for the third quarter of 2008 compared with net revenues of negative $3.2 billion and a pre-tax loss of $4.6 billion in the prior-year period. The challenging market environment, particularly in September, resulted in net losses in FICC and lower net revenues in Investment Banking, offset by significantly higher net revenues in Equity Markets resulting from the Bloomberg gain. GMI's third quarter net revenues included a net benefit of $2.8 billion (approximately $2.0 billion in FICC and $800.0 million in Equity Markets) due to the impact of the widening of Merrill Lynch's credit spreads on the carrying value of certain long-term debt liabilities. Net revenues from GMI's three major business lines were as follows: FICC net revenues were negative $9.9 billion for the quarter, as strong revenues from Rates and Currencies were more than offset by net losses related to the CDO sale and termination and potential settlement of related monoline hedges, real estate-related assets, and net losses from credit spreads widening across most asset classes to significantly higher levels at the end of the quarter. FICC recorded significant losses as a result of severe market dislocations in September, including credit spread volatility and a default of a major U.S. broker-dealer. In addition, net revenues for other FICC businesses declined from the third quarter of 2007, as the environment for those businesses was materially worse than the year-ago quarter. Equity Markets net revenues for the third quarter of 2008, which included the Bloomberg gain and a net gain related to changes in the carrying value of certain long-term debt liabilities, were $6.0 billion compared with $1.6 billion in the prior-year period. Global Equity-Linked Products revenues increased approximately 14% from the prior-year period, driven by increased trading activity and heightened market volatility. These increases were more than offset by declines from the company's Cash business, which experienced adverse market conditions, as well as Global Markets Financing and Services, which experienced declines in average balances, particularly in September. Private equity net losses were $289.0 million for the third quarter of 2008 compared with net losses of $61.0 million for the prior year quarter. Excluding private equity net losses, the Bloomberg gain and the net gain related to changes in the carrying value of certain long-term debt liabilities, Equity Markets revenues were down 19% from the prior- year period. Investment Banking net revenues were $750.0 million for the third quarter of 2008, down 25% from $1.0 billion in the 2007 third quarter. Equity origination, debt origination and advisory revenues all declined, reflecting significantly lower industry- wide underwriting and deal volumes compared with the year-ago period. For the first nine months of 2008, GMI recorded a pre-tax loss of $18.3 billion, on net revenues of negative $9.2 billion, due primarily to net losses in FICC that were partially offset by revenues in Equity Markets and Investment Banking. In addition, GMI recorded a net gain of approximately $5.0 billion (approximately $3.4 billion in FICC and $1.5 billion in Equity Markets) due to the impact of the widening of Merrill Lynch's credit spreads on the carrying value of certain long-term debt liabilities. b) Global Wealth Management (GWM) GWM generated solid net revenues for the third quarter of 2008 despite significant market declines, reflecting the stability of the client franchise and the significant proportion of recurring net revenues in GWM. -- GWM's third quarter 2008 net revenues were $3.2 billion, down 9% from the strong third quarter of 2007. The decrease in net revenues was primarily due to declines in transactional and origination revenues resulting from reduced client and issuer activity amidst increasingly challenging market conditions. The revenue decline was partially offset by a reduction in compensation and non-compensation expenses, resulting in pre-tax earnings of $774.0 million. GWM's pre- tax profit margin was 23.9%, compared with 26.9% in the prior-year period. -- Net revenues from GWM's major business lines were as follows: -- Global Private Client (GPC) net revenues for the third quarter of 2008 were $3.0 billion, down 8% from the prior- year period driven by lower transaction and origination revenues resulting from reduced client and origination activity in a challenging environment. Fee-based revenues also declined due to lower market levels. -- Global Investment Management (GIM) third quarter 2008 net revenues were $241.0 million, an 11% decline from the third quarter of 2007, due to lower revenues from investments in asset management and alternative investment management companies. -- Financial Advisor (FA) headcount was 16,850 at quarter-end, a net increase of 160 FAs during the quarter and 240 from the third quarter of 2007, as GWM continued to be successful in retaining and recruiting high-quality experienced Fas. FA retention, particularly among first and second quintile FAs, continues to outperform the industry average. Outside the Americas, Merrill Lynch's continued focus and investment in the GWM franchise increased international FA headcount 8% year over year. -- Net inflows of client assets into annuitized-revenue products were $2.0 billion for the third quarter. Total net new money was negative $3.0 billion, impacted largely by client reaction to persistent volatility and negative market movements during the quarter. -- Total client assets in GWM accounts were $1.5 trillion at the end of the 2008 third quarter. GWM recorded pre-tax earnings of $2.2 billion for the first nine months of 2008, down 18% from the year-ago period. Net revenues were $10.2 billion, a decline of 2%. The decrease in pre-tax earnings was driven by lower net revenues from GPC and GIM and slightly higher expenses reflecting GWM's commitment to continuing investment in its key growth initiatives. Other Items: Compensation Expenses Compensation and benefits expenses were $3.5 billion for the third quarter of 2008, up 76% from $2.0 billion in the third quarter of 2007, primarily due to the reversal of compensation expense accruals in the prior-year quarter. Compensation and benefits expenses were $11.2 billion for the first nine months of 2008, down 3% from $11.6 billion in the first nine months of 2007 primarily due to a decline in compensation expense accruals reflecting lower net revenues and reductions in headcount. Non-compensation Expenses Total non-compensation expenses were $4.8 billion for the third quarter of 2008, including the $2.5 billion Temasek payment and the $425 million ARS-related expense; excluding the aforementioned items, total non-compensation expenses were $1.9 billion, down 9% from the year-ago quarter. Details of the other significant changes in non-compensation expenses from the third quarter of 2007 are as follows: -- Communication and technology costs were $546.0 million, up 9% due primarily to costs related to ongoing technology investments and system development initiatives, including continued investment in GWM platforms and workstations. -- Advertising and market development costs were $159.0 million, down 12% due primarily to lower travel and other related expenses. -- Other expenses were $588.0 million, including the $425.0 million charge related to auction-rate securities. Excluding this item, other expenses were $163.0 million, down 59% due primarily to the write-off of approximately $100.0 million of identifiable intangible assets related to First Franklin in the prior-year quarter and lower minority interest expenses associated with private equity investments. Restructuring Charges In the third quarter of 2008 Merrill Lynch recorded a pre-tax restructuring charge of $39.0 million, primarily related to severance costs and the accelerated amortization of previously granted stock awards associated with headcount reduction initiatives, primarily in technology. The restructuring charge for the nine month period was $484.0 million. Income Taxes Income taxes from continuing operations for the third quarter were a net credit of $3.1 billion, reflecting tax benefits associated with the firm's pre-tax losses. The third quarter effective tax rate was 37.9%, compared with 34.6% for the third quarter of 2007. The increase in the effective tax rate reflected changes in the firm�s geographic mix of earnings. Capital and Liquidity Management The firm's excess liquidity pool ended the quarter at approximately $77.0 billion, well in excess of total debt maturing over the next twelve months. Merrill Lynch's active management of equity capital during the 2008 third quarter included a number of transactions, including the previously disclosed $9.8 billion common stock offering and sale of a 20% stake in Bloomberg L.P. resulting in a pre-tax gain of $4.3 billion. As previously disclosed, concurrent with the $9.8 billion common stock offering, holders of $4.9 billion of the $6.6 billion of the mandatory convertible preferred stock agreed to exchange their preferred stock for approximately 177 million shares of common stock, plus $65.0 million in cash. Holders of the remaining $1.7 billion of mandatory convertible preferred stock agreed to exchange their preferred stock for new mandatory convertible preferred stock. The price reset feature for all securities exchanged was eliminated. In connection with the elimination of the price reset feature of the $6.6 billion of preferred stock, Merrill Lynch recorded additional preferred dividends of $2.1 billion in the third quarter of 2008. In light of the pending transaction with Bank of America, Merrill Lynch is no longer pursuing the proposed sale of Financial Data Services, Inc. (FDS). As a result, all of Merrill Lynch's equity capital and related figures do not include any impact of the firm's previously contemplated sale of a controlling interest in FDS. At the end of the third quarter of 2008, estimated book value per share was $18.59, down from $21.43 at the end of the second quarter. Adjusting for the company's $1.7 billion mandatory convertible preferred offering on an "if-converted" basis, Merrill Lynch's adjusted book value per share was $18.90 at the end of the third quarter of 2008. Subsequent to the third quarter, and as part of Bank of America's $25.0 billion participation in the TARP Capital Purchase Program, Merrill Lynch agreed and expects to issue $10.0 billion of non- voting preferred stock and related warrants to the U.S. Treasury pursuant to the program. Staffing Merrill Lynch's full-time employees totaled 60,900 at the end of the third quarter of 2008, reduced by approximately 3,300 employees since the prior-year period, largely due to headcount reduction initiatives in the U.S., within GMI and support areas. A copy of the preliminary unaudited earnings summary, reconciliation of "Non-GAAP" measures and segment data for the three- and nine-month periods ended Sept. 26, 2008, and supplemental quarterly data, is available for free at: http://researcharchives.com/t/s?3406 About Merrill Lynch Headquartered in New York City, Merrill Lynch & Co. Inc. -- http://www.ml.com/-- is one of the world's leading wealth management, capital markets and advisory companies with offices in 40 countries and territories and total client assets of approximately $1.5 trillion. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. Merrill Lynch owns approximately half of BlackRock, one of the world's largest publicly traded investment management companies with more than $1.0 trillion in assets under management. * * * As reported in the Troubled Company Reporter on Sept. 16, 2008, Moody's Investors Service placed on review for possible upgrade all long-term ratings of Merrill Lynch (senior at A2) and its subsidiaries. The Prime-1 short-term ratings of Merrill Lynch and its guaranteed subsidiaries were affirmed. The rating action follows the announcement that Merrill Lynch will be acquired by Bank of America Corporation, rated Aa2 for senior debt (on review for downgrade) in an all-stock transaction valued at approximately $50.0 billion. The transaction is expected to close early in the first quarter of 2009. The review will focus on the ultimate legal and regulatory structure for Bank of America Corporation and the nature of support for each rated Merrill Lynch entity. The company has reported five consecutive quarters of net losses beginning the third quarter of 2007. MGM MIRAGE: Tender Offer to Exchange Stock Options Expires ---------------------------------------------------------- MGM Mirage disclosed in a Securities and Exchange Commission filing that the tender offer to exchange certain stock options to purchase shares of its common stock, par value $0.01 per share, and stock appreciation rights that are settled in shares of common stock expired at 5:00 p.m. Pacific Daylight Time on Oct. 13, 2008. Pursuant to the offer, the company accepted for exchange and cancelled 4,234,900 Eligible Awards, representing approximately 89.21% of the Eligible Awards. Subject to the terms and conditions of the Offer, MGM MIRAGE granted 699,660 RSUs in exchange for the Eligible Awards accepted and cancelled, including 66,656 RSUs granted to MGM MIRAGE executive officers. About MGM Mirage Headquartered in Las Vegas, Nevada, MGM Mirage (NYSE: MGM) -- http://www.mgmmirage.com/-- is a hotel and gaming company. It owns and operates 17 properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. * * * As reported in the Troubled Company Reporter on Oct. 9, 2008, Tamara Audi at The Wall Street Journal reports that MGM Mirage needs to raise about $1.2 billion to complete the financing of its CityCenter project in Las Vegas. As reported in the Troubled Company Reporter on Oct. 7, 2008, MGM Mirage said that CityCenter, its joint development project with Dubai World, completed the first phase of its $3.0 billion financing package by securing a $1.8 billion senior bank credit facility. The facility matures in April 2013 and is expected to be increased to a total amount of $3.0 billion as additional commitments are received. CityCenter has received additional signed commitment letters totaling in excess of $500 million, which commitments are expected to be added to the facility once completed. MGM Mirage and Dubai World continue to work with additional lenders and will seek the remaining commitment amounts through a syndication process beginning on Oct. 7, 2008. The gross project budget consists of $9.3 billion of construction costs (including capitalized interest), $1.7 billion of land, $0.2 billion of preopening expenses, and $0.1 billion of intangible assets. CityCenter is scheduled to be completed in December 2009. According to WSJ, MGM Mirage is working to secure 41.2 billion in financing to round out the $3 billion needed to complete the project. Jim Murren, MGM Mirage's chief operating officer and president, said that he hopes to have the remaining funds committed by Oct. 31, WSJ says. As reported in the Troubled Company Reporter on Sept. 5, 2008, Standard & Poor's Ratings Services revised its rating outlook on Las Vegas-based MGM MIRAGE to negative from stable. Ratings on the company, including the 'BB' corporate credit rating, were affirmed. As reported in the Troubled Company Reporter on Aug. 12, 2008, Fitch Ratings has affirmed MGM MIRAGE's ratings and revised its Outlook to Negative from Stable as: Issuer Default Rating 'BB'; Senior credit facility 'BB'; Senior notes 'BB'; and Senior subordinated notes 'B+'. MICHAELS STORES: $120MM Credit Facility Won't Affect S&P's Rating ----------------------------------------------------------------- Standard & Poor's said that Irving, Texas-based Michaels Stores Inc.'s (B-/Stable/--) announcement that it drew $120 million from its secured asset-based revolving credit facility on Sept. 19, 2008, has no immediate impact on the company's ratings or outlook. The company said that it took the measure so that it would have adequate liquidity while there are disruptions in the debt markets and would use the proceeds to fund seasonal working capital needs and make semiannual interest payments on its unsecured and subordinated notes. A future downgrade or negative outlook revision would focus on the company's liquidity, which S&P still feel is adequate in the near term. As of Oct. 14, 2008, Michaels had $515 million of unused availability on its revolver. S&P also note that the effective interest rate on Michaels' variable-rate debt will not increase to the magnitude of recent LIBOR increases because the company can elect to pay a bank prime rate plus an applicable margin on both its revolver and term loan. MICROMET INC: Index Venture Discloses 6% Equity Stake ----------------------------------------------------- Index Venture Growth Associates I Limited disclosed in a Securities and Exchange Commission filing that it may be deemed to beneficially own 3,043,530 shares of Micromet Inc.'s common stock, representing 6% of the shares issued and outstanding. Index Venture Associates IV Limited disclosed that it may be deemed to beneficially own 1,517,177 shares of Micromet's common stock, representing 3% of the shares issued and outstanding. Yucca Partners L.P. Jersey Branch disclosed that it may be deemed to beneficially own 27,529 shares -- including shares issuable upon exercise of warrants -- of Micromet's common stock, representing less than 0.01% of the shares issued and outstanding. About Micromet Inc. Micromet Inc. (Nasdaq: MITI) -- http://www.micromet-inc.com/-- is a biopharmaceutical company developing novel, proprietary antibodies for the treatment of cancer, inflammation and autoimmune diseases. Four of its antibodies are currently in clinical trials, while the remainder of the product pipeline is in preclinical development. Going Concern Doubt The company disclosed in its Form 10-Q for the second quarter of 2008, that as of June 30, 2008, it had an accumulated deficit of $179.4 million, and that it expects to continue to incur substantial, and possibly increasing, operating losses for the next several years. These conditions create substantial doubt about our ability to continue as a going concern. The company is continuing its efforts in research and development, preclinical studies and clinical trials of its product candidates. These efforts, and obtaining requisite regulatory approval prior to commercialization, will require substantial expenditures. Once requisite regulatory approval has been obtained, substantial additional financing will be required to manufacture, market and distribute its products in order to achieve a level of revenues adequate to support its cost structure. Management believes it has sufficient resources to fund its required expenditures into the second quarter of 2009, without considering any potential milestone payments that it may receive under current or future collaborations, or any future capital raising transactions or drawdowns from the committed equity financing facility (CEFF) with Kingsbridge Capital Limited. At June 30, 2008, the company's consolidated balance sheet showed $48.3 million in total assets, $36.3 million in total liabilities, and $12.0 million in total stockholders' equity. MORGAN STANLEY: S&P Chips $3.5MM Class A-14 Notes Rating to 'B' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on Morgan Stanley ACES SPC's series 2006-8 $3.5 million class A-14 secured fixed-rate notes to 'B' from 'B+' and placed it on CreditWatch with negative implications. The rating action reflects the Oct. 9, 2008, lowering of the ratings on American Axle & Manufacturing Holdings Inc. and its placement on CreditWatch with negative implications. Morgan Stanley ACES SPC's series 2006-8 is a credit-linked note transaction. The rating on each class of notes is based on the lowest of (i) the rating on the respective reference obligations for each class (with respect to class A-14, the senior unsecured notes issued by American Axle & Manufacturing Inc. {'B/Watch Neg'}); (ii) the rating on the guarantor of the counterparty to the credit default swap, the interest rate swap, and the contingent forward agreement, Morgan Stanley (A+/Negative/A-1); and (iii) the rating on the underlying securities, the class A certificates issued by BA Master Credit Card Trust II's series 2001-B due 2013 ('AAA'). MORGAN STANLEY: Fitch Affirms Low-B Ratings on Three Class Certs. ----------------------------------------------------------------- Fitch Ratings affirmed and assigned Outlooks to Morgan Stanley Capital 1 Trust series 2007-IQ16 commercial mortgage pass-through certificates as: -- $48.4 million class A-1 at 'AAA'; Outlook Stable; -- $314.2 million class A-1A at 'AAA'; Outlook Stable; -- $91.1 million class A-2 at 'AAA'; Outlook Stable; -- $83 million class A-3 at 'AAA'; Outlook Stable; -- $1,276.6 million class A-4 at 'AAA'; Outlook Stable; -- $194.7 billion class A-M at 'AAA'; Outlook Stable; -- $20 million class A-MFL at 'AAA'; Outlook Stable; -- $44.9 million class A-MA at 'AAA'; Outlook Stable; -- $131 million class A-J at 'AAA'; Outlook Stable; -- $30 million class A-JFL at 'AAA'; Outlook Stable; -- $33.7 million class A-JA at 'AAA'; Outlook Stable; -- Interest-only class X-1 at 'AAA'; Outlook Stable; -- Interest-only class X-2 at 'AAA'; Outlook Stable; -- $19.5 million class B at 'AA+'; Outlook Stable; -- $26 million class C at 'AA'; Outlook Stable; -- $16.2 million class D at 'AA-'; Outlook Stable; -- $38.9 million class E at 'A+'; Outlook Stable; -- $13.0 million class F at 'A'; Outlook Stable; -- $35.7 million class G at 'A-'; Outlook Stable; -- $26 million class H at 'BBB+'; Outlook Stable; -- $26 million class J at 'BBB'; Outlook Stable; -- $32.4 million class K at 'BBB-'; Outlook Stable; -- $9.7 million class L at 'BB+'; Outlook Stable; -- $9.7 million class M at 'BB'; Outlook Stable; -- $9.7 million class N at 'BB-'; Outlook Stable. Fitch does not rate the following classes: $16.2 million class 0, $6.5 million class P, $9.7 million class Q and $29.2 million class S. The affirmations are the result of stable performance and minimal paydown since issuance. Rating Outlooks reflect the likely direction of any rating changes over the next one to two years. As of the September 2008 distribution date, the pool's certificate balance has decreased 0.08% to $2.591 billion from $2.595 billion at issuance. 38 loans (40.4%) are interest-only and there are no near-term maturities. The largest loan, West Town Mall (8.12% of the pool), is collateralized by a 1.3 million square foot regional mall located in Knoxville, Tennessee. The servicer-reported debt service coverage ratio and occupancy for year-end 2007 was 1.38 times and 96.7%, respectively. The second largest loan, 60 Wall Street (4.82% of the pool), is an office tower located in Manhattan's financial district. The property is 100% leased to Deutsche Bank through 2022. The servicer-reported DSCR for YE2007 was 2.10x. Easton Town Center (4.24% of the pool), the third largest loan in the pool, and The Ferrell Duncan Building (0.28% of the pool) maintain investment-grade shadow ratings. Easton Town Center is collateralized by a 1.75 million sf regional mall located in Columbus, Ohio. The servicer-reported DSCR and occupancy for the center were 1.72x and 93.0% at June 30, 2008. The Ferrell Duncan building is a medical clinic in Springfield, Missouri, that is 99.5% leased to Cox Health Systems. The servicer-reported DSCR was 2.4x as of June 2008. Fitch identified 4 loans of concern (0.61% of the pool). There were no specially serviced loans. MOTOR COACH: Wins Permission to Obtain $315 Million Loan -------------------------------------------------------- Steven Church of Bloomberg News reports that the U.S. Bankruptcy Court for the District of Delaware approved on Oct. 17, 2008, the request of Motor Coach Industries International, Inc., and its debtor-affiliates to borrow as much as $315 million over objections of creditors who say the loan will guarantee they aren't repaid. Foreclosure Right The loan, according to the report, would give General Electric Capital Corp. and the other lenders the right to foreclose on the Debtors' assets should they fail to exit bankruptcy by February 2009, creditor attorney Robert Stark, Esq., said in court according to the report. Unsecured creditors will oppose the reorganization plan, according to the report, because it leaves them nothing while turning the Debtors over to lenders, including Franklin Mutual Advisors LLC, Mr. Stark said. The Court also authorized the Debtors to pay fees related to a so- called stock backstop agreement that would help fund their exit from bankruptcy, according to the report. Under the deal, Franklin Mutual would guarantee that $160 million worth of stock would be sold in the reorganized Debtors, according to the report. The stock transaction, the bankruptcy loan approved today and a related a court-sanctioned auction of the Debtors' assets should raise enough money to pay off more than $500 million in notes and loans, according to the report. The fees include a $2.5 million break-up fee should another company outbid Franklin Mutual at the auction, according to the report. Franklin has offered the $160 million backstop guarantee and has agreed to trade its $220.7 million in notes for equity in the reorganized company, according to the report. Under the loan agreement, the Debtors must win final approval for a reorganization plan by early next year, according to the report. Wilmington, Delaware-based Motor Coach Industries International, Inc.-- http://www.mcicoach.com/-- and its subsidiaries manufacture intercity coaches for the tour, charter, line-haul, scheduled service, and commuter transit sectors in the U.S. and Canada. They also operate seven sales centers and nine service centers in the U.S. and Canada and is the industry's supplier of aftermarket parts for most makes and models. The Company and its debtor-affiliates filed for separate Chapter bankrupty protection with the United States Bankruptcy Court for the District of Delaware on September 15, 2008 (Lead Case No. 08- 12136), to implement a pre-negotiated restructuring plan to be funded by Franklin Mutual Advisors, LLC and certain of its affiliates. The Company's Canadian operations are not included in the filing. Kenneth S. Ziman, Esq., and Elisha D. Graff, Esq., at Simpson Thacher & Bartlett LLP, in New York; and Jason M. Madron, Esq., and Lee E. Kaufman, Esq., at Richards Layton & Finger, P.A., in Wilmington, Delaware, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC serves as claims and notice agent. Rothschild Inc. and AlixPartners LLP also provide restructuring advice. At the time of filing, the Debtors listed assets of between $500,000,000 and $1,000,000,000 and liabilities of between $100,000,000 and $500,000,000. MOTOR COACH: Canadian Unit Lays Off 21 Workers ---------------------------------------------- Scott Gibbons at Winnipeg (Canada) Free Press reports that Motor Coach Industries International, Inc.'s unit in Canada has laid off about 21 workers. According to Winnipeg Free Press, Motor Coach gave those salaried workers severance packages after the reorganization of the operational area of the Winnipeg center. The layoff isn't related to the bankruptcy of Motor Coach's U.S. parent, Winnipeg Free Press states, citing company spokesperson Rich Tauberman. Winnipeg Free Press reports that the Canadian unit laid off about 181 workers in Feburary to cope with declining demand in the U.S. The unit has about 1,300 employees. Wilmington, Delaware-based Motor Coach Industries International, Inc. -- http://www.mcicoach.com/-- and its subsidiaries manufacture intercity coaches for the tour, charter, line-haul, scheduled service, and commuter transit sectors in the U.S. and Canada. They also operate seven sales centers and nine service centers in the U.S. and Canada and is the industry's supplier of aftermarket parts for most makes and models. The Company and its debtor-affiliates filed for separate Chapter bankrupty protection with the United States Bankruptcy Court for the District of Delaware on September 15, 2008 (Lead Case No. 08-12136), to implement a pre-negotiated restructuring plan to be funded by Franklin Mutual Advisors, LLC and certain of its affiliates. The Company's Canadian operations are not included in the filing. Kenneth S. Ziman, Esq., and Elisha D. Graff, Esq., at Simpson Thacher & Bartlett LLP, in New York; and Jason M. Madron, Esq., and Lee E. Kaufman, Esq., at Richards Layton & Finger, P.A., in Wilmington, Delaware, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC serves as claims and notice agent. Rothschild, Inc. and AlixPartners LLP also provide restructuring advice. At the time of filing, the Debtors listed assets of between $500,000,000 and $1,000,000,000 and liabilities of between $100,000,000 and $500,000,000. MXENERGY HOLDINGS: S&P Holds 'CCC+' Senior Unsecured Rating ----------------------------------------------------------- Standard & Poor's Ratings Services affirmed MXEnergy Holdings Inc.'s 'B' corporate credit rating and 'CCC+' senior unsecured rating. The outlook remains negative. As of June 30, 2008, the Stamford, Connecticut-based natural gas and electric power provider had $163 million of debt. The affirmation reflects MXEnergy's year-end results which were slightly above the projections S&P reviewed in May when it revised the company's outlook to negative. Adjusted EBITDA for the year ended June 2008 was, however, still significantly lower than in fiscal 2007 due to reduced natural gas profits and volumes, and higher operating costs experienced mainly in the third quarter. The company also entered into a new $255 million revolving credit facility due July 31, 2009, which replaced the prior facility of $280 million due December 2008. The facility does, however, come at a higher interest rate and its smaller size could create a liquidity strain if gas prices substantially increase this winter heating season from projected levels. NATIONAL AMUSEMENTS: In Talks With Lenders After Selling Shares --------------------------------------------------------------- Merissa Marr at The Wall Street Journal reports that Sumner Redstone's National Amusements Inc. said it is negotiating with its lenders and has created a special committee to conduct those talks. Los Angeles Times relates that National Amusements said that it sold about $233 million worth of stock in Viacom Inc. and CBS Corp. to raise cash to comply with debt covenants. WSJ relates that Mr. Redstone planned to sell $400 million, or 20% of his family's of nonvoting stock in Viacom and CBS. Los Angeles Times reports that National Amusements said that it had completed the sale of 17 million of CBS Class B shares and seven million of Viacom Class B shares, and that it had no plans to sell additional shares. The Redstone family will keep its control in Viacom and CBS through voting stock, WSJ states. According to Los Angeles Times, National Amusement has $1.6 billion in debt. Citing people familiar with the situation, WSJ relates that the $1.6 billion of debt was a combination of debt taken on to: -- acquire Viacom, -- expansion of the movie theater chain, -- Mr. Redstone's acquisition of stock in videogame company Midway Games Inc., and -- the $240 million settlement of a case to buy out Mr. Redstone's son Brent from the holding company. WSJ reports that National Amusements specified the debt as unsecured. National Amusements, the report says, may be trying to pacify investors that its banks don't have the right to directly seize its Viacom and CBS holdings as they might if they were collateral. WSJ relates that CBS and Viacom also revealed worsening outlooks that underline increasing advertising pressure on TV companies. WSJ states that CBS disclosed a $14 billion noncash impairment charge to adjust in large part for the dropping value of its local television and radio stations. The company, along with Viacom, also cut their 2008 profit outlooks as advertising sales decline, the report says. WSJ reports that the Redstone family's interest in Viacom and CBS are worth about $1.9 billion and is one of the biggest assets in National Amusements, the family's privately held holding company. National Amusements holds 23.4 million Viacom Class B nonvoting shares and 39.8 million CBS Class B nonvoting shares. National Amusements controls Viacom through its holding of 46.8 million Class A voting shares and CBS through its holding 46.8 million Class A voting shares. National Amusements said that, as part of the $400 million sale, it would sell nonvoting stock and that it would sell an equal dollar amount of shares in Viacom and CBS, WSJ reports. According to WSJ, investors have asked for more information about Mr. Redstone's finances after learning the extent of National Amusements' debt and that it was linked to the performance of Viacom and CBS stock, fearing that Mr. Redstone may have to sell more stock if share prices continue to drop. WSJ reports that National Amusements said on Friday that its management "is engaged in constructive discussions with its bank group and noteholders regarding a covenant issue under National Amusement's debt, which is unsecured," and that it appointed a committee of directors to oversee the talks that excludes Philippe Dauman, who is chief executive of Viacom, and Mr. Redstone, executive chairman of Viacom and CBS. The report states that the committee comprises: -- Mr. Redstone's daughter Shari, who runs the family's movie theater chain; -- George Abrams, who also sits on Viacom's board; and -- Mr. Redstone's attorney, David Andelman, who sits on CBS's board. National Amusements hired Citigroup Inc. and Rothschild as financial advisers, WSJ states. About CBS Corp. New York-based CBS Corporation -- http://www.cbscorporation.com/ -- is a mass media company with operations in Television, Radio, Outdoor and Publishing segments. The Television segment consists of CBS Television, which includes CBS Television Network, CBS Paramount Network Television and CBS Television Distribution, Showtime Networks and CSTV College Sports Television. The Radio segment owns and operates 140 radio stations in 30 United States markets through CBS Radio. The Outdoor segment displays advertising on media, including billboards, transit shelters, buses, rail systems (in-car, station platforms and terminals), mall kiosks and stadium signage through CBS Outdoor, and in retail stores through CBS Outernet. The Publishing segment consists of Simon & Schuster, which publishes and distributes consumer books under imprints, such as Simon & Schuster, Pocket Books, Scribner and Free Press. About Viacom Viacom Inc. is an entertainment content company. The Company operates through two reporting segments: Media Networks, which includes MTV Networks and BET Networks , and Filmed Entertainment. The company is based in New York. About National Amusements, Inc. National Amusements, Inc., North America's sixth largest theatre operator is a closely held corporation, that operates more than 1,425 motion picture screens in the U.S., the U.K., Latin America, is an equal partner in the online ticketing service, MovieTickets.com and the parent company of Viacom. Viacom is a leading global media company, with preeminent positions in broadcast and cable television, radio, outdoor advertising and online. With programming that appeals to audiences in every demographic category across virtually all media, the company is a leader in the creation, promotion and distribution of entertainment, news, sports, music and comedy. Viacom's well-known brands include CBS, MTV, Nickelodeon, VH1, BET, Paramount Pictures, Viacom Outdoor, Infinity, UPN, Spike TV, TV Land, CMT: Country Music Television, Comedy Central, Showtime, Blockbuster, and Simon & Schuster. NOMURA ASSET: Moody's Chips Ratings on 83 Tranches from 16 Loans ---------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 83 tranches from 16 Alt-A transactions issued by Nomura. The collateral backing these transactions consists primarily of first- lien, fixed and adjustable-rate, Alt-A mortgage loans. Ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. Also, for certain seasoned deals, step-down, or the possibility thereof, is likely to cause further erosion of credit support from subordination. Moody's Investors Service has also published the underlying rating on one insured note as identified below, and has taken action on it accordingly. The underlying ratings reflect the intrinsic credit quality of the notes in the absence of the guarantee. The ratings on securities that are guaranteed or "wrapped" by a financial guarantor is the higher of a) the rating of the guarantor or b) the published underlying rating. The current ratings on the below notes are consistent with Moody's practice of rating insured securities at the higher of the guarantor's insurance financial strength rating and any underlying rating that is public. The actions described below are a result of Moody's on-going review process. Complete rating actions are : Issuer: Nomura Asset Acceptance Corporation Alternative Loan Trust, Series 2005-AP2 -- Cl. A-2, Downgraded to A3 from Aaa -- Cl. A-3, Downgraded to Baa3 from Aaa -- Cl. A-4, Downgraded to Baa3 from Aaa -- Cl. A-5, Downgraded to Baa3 from Aaa -- Cl. A-IO, Downgraded to A3 from Aaa -- Cl. M-1, Downgraded to Caa2 from Aa2 -- Cl. M-2, Downgraded to Ca from A2 -- Cl. M-3, Downgraded to C from Baa2 Issuer: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2004-AP1 -- Cl. M-1, Downgraded to Aa3 from Aa2 -- Cl. M-2, Downgraded to Baa3 from A2 -- Cl. M-3, Downgraded to B3 from Baa2 Issuer: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2004-AP2 -- Cl. A-5, Downgraded to Aa1 from Aaa -- Cl. A-6, Downgraded to Aa1 from Aaa -- Cl. M-1, Downgraded to A1 from Aa2 -- Cl. M-2, Downgraded to Baa2 from A2 -- Cl. M-3, Downgraded to B3 from Baa2 Issuer: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2004-AP3 -- Cl. A-5A, Downgraded to Aa2 from Aaa -- Cl. A-5B, Downgraded to Aa2 from Aaa -- Cl. A-6, Downgraded to Aa2 from Aaa Financial Guarantor: Ambac Assurance Corporation (Aa3 on review for possible downgrade) -- Underlying Rating: Aa2 -- Cl. M-1, Downgraded to A3 from A2 -- Cl. M-2, Downgraded to B2 from Ba1 -- Cl. M-3, Downgraded to C from Caa2 Issuer: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2004-AR1 -- Cl. C-B-2, Downgraded to Baa1 from A3 -- Cl. C-B-3, Downgraded to B1 from Baa3 -- Cl. V-M-1, Downgraded to Baa1 from Aa2 -- Cl. V-M-2, Downgraded to B2 from A1 Issuer: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2004-AR2 -- Cl. M-2, Downgraded to A2 from A1 -- Cl. M-3, Downgraded to B1 from A3 -- Cl. M-4, Downgraded to Ca from Baa1 Issuer: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2004-AR3 -- Cl. M-1, Downgraded to Aa3 from Aa2 -- Cl. M-3, Downgraded to Ca from A3 -- Cl. M-2, Downgraded to Ba2 from A1 -- Cl. M-4, Downgraded to C from Baa1 Issuer: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2004-AR4 -- Cl. M-2, Downgraded to A3 from A1 -- Cl. M-3, Downgraded to Caa1 from A3 -- Cl. M-4, Downgraded to C from Baa1 -- Cl. M-5, Downgraded to C from Baa2 Issuer: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2005-AP1 -- Cl. II-A-2, Downgraded to Aa1 from Aaa -- Cl. II-A-3, Downgraded to Aa1 from Aaa -- Cl. II-A-4, Downgraded to Aa1 from Aaa -- Cl. II-A-5, Downgraded to Aa1 from Aaa -- Cl. II-A-IO, Downgraded to Aa1 from Aaa -- Cl. I-A-1, Downgraded to A1 from Aaa -- Cl. I-B-1, Downgraded to Ba3 from Aa3 -- Cl. I-B-2, Downgraded to Ca from A3 -- Cl. I-B-3, Downgraded to C from Baa3 -- Cl. II-M-1, Downgraded to A2 from Aa2 -- Cl. II-M-2, Downgraded to Ba1 from A2 -- Cl. II-M-3, Downgraded to Caa2 from Baa2 Issuer: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2005-AR1 -- Cl. M-1, Downgraded to A1 from Aa2 -- Cl. M-2, Downgraded to Ba1 from Aa3 -- Cl. M-3, Downgraded to Caa2 from A2 -- Cl. M-4, Downgraded to Ca from A3 -- Cl. M-5, Downgraded to C from Baa2 Issuer: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2005-AR2 -- Cl. M-1, Downgraded to Baa1 from Aa2 -- Cl. M-2, Downgraded to Caa2 from A1 -- Cl. M-3, Downgraded to Ca from A3 -- Cl. M-4, Downgraded to C from Baa1 -- Cl. M-5, Downgraded to C from Baa2 Issuer: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2005-AR3 -- Cl. I-A-1, Downgraded to Aa3 from Aaa -- Cl. I-A-2, Downgraded to Baa2 from Aaa -- Cl. II-A, Downgraded to Aa2 from Aaa -- Cl. M-1, Downgraded to Caa1 from Aa2 -- Cl. M-2, Downgraded to Ca from A1 -- Cl. M-3, Downgraded to C from A3 -- Cl. M-4, Downgraded to C from Baa1 -- Cl. M-5, Downgraded to C from Baa3 Issuer: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2005-AR4 -- Cl. V-A-1, Downgraded to Aa1 from Aaa -- Cl. V-A-2, Downgraded to Aa2 from Aaa -- Cl. V-A-3, Downgraded to Aa2 from Aaa -- Cl. M-1, Downgraded to Caa3 from B3 -- Cl. M-2, Downgraded to C from B3 -- Cl. M-3, Downgraded to C from Caa1 -- Cl. M-4, Downgraded to C from Caa2 Issuer: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2005-AR5 -- Cl. M-1, Downgraded to B3 from B2 -- Cl. M-2, Downgraded to C from B3 -- Cl. M-3, Downgraded to C from Caa1 -- Cl. M-4, Downgraded to C from Caa1 -- Cl. M-5, Downgraded to C from Caa3 Issuer: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2005-WF1 -- Cl. M-1, Downgraded to A1 from Aa2 -- Cl. M-2, Downgraded to Ba1 from A2 -- Cl. M-3, Downgraded to Caa3 from Baa2 Issuer: Nomura Asset Acceptance Corporation, Aternative Loan Trust, Series 2003-A2 -- Cl. B6, Downgraded to Caa1 from B2 NORD RESOURCES: Wants Shares Deregistered After Warrants Expire --------------------------------------------------------------- Nord Resources Corporation filed with the Securities and Exchange Commission a post-effective amendment to its Registration Statement, File No. 333-146813, pertaining to the resale of 55,589,705 shares of its common stock, at $0.01 par value. The company is requesting the deregistration of 250,000 shares of common stock, at $0.01 par value, that were issuable upon the exercise of 250,000 common stock purchase warrants. The warrants were issued to Auramet Trading, LLC in connection with a $1,000,000 loan advanced to the company on May 31, 2006, and added to the principal amount of a $3,900,000 secured bridge loan made by Nedbank Limited dated Nov. 8, 2005. The warrants expired on 5:00 p.m. (Central time) on May 31, 2008. As a result of the expiration of the warrants, the warrant shares are no longer available. The company also filed Post-Effective Amendment No. 1 to update certain financial and other information contained in the prospectus in accordance with the Securities Act of 1933. A copy of the amendment to the company's Registration Statement on Form SB-2 is available for free at: http://ResearchArchives.com/t/s?33f1 About Nord Resources Based in Tucson, Arizona, Nord Resources Corporation (Pink Sheets: NRDS) -- http://www.nordresources.com/-- is an emerging copper producer, which controls a 100% interest in the Johnson Camp SX-EW copper project in Arizona. Nord's near term objective is to resume mining and leaching operations at the Johnson Camp mine, which has been on care and maintenance status since August 2003. Nord has decided to proceed with its mine plan bases on an updated feasibility study that was completed in October 2005, subject to raising sufficient financing. Going Concern Doubt On March 26, 2008, Mayer Hoffman McCann PC, in Denver, Colorado, expressed substantial doubt about Nord Resources Corporation's ability to continue as a going concern after auditing the company's consolidated financial statements as of the years ended Dec. 31, 2007, and 2006. The auditing firm company reported that the company incurred a net loss of $2.5 million and $6.2 million during the years ended Dec. 31, 2007, and 2006. The company's continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet the company's obligations on a timely basis, to produce copper at a level where it can become profitable, to pay off existing debt and provide sufficient funds for general corporate purposes. Liquidity and Financial Resources Nord Resources Corporation's balance sheet at March 31, 2008, showed total assets of $29.2 million and total liabilities of $32.3 million, resulting in a shareholders' deficit of roughly $3.1 million. The company's cash flows from operating activities during the three months ended March 31, 2008, and 2007 were negative $532,132 and negative $114,079. NORTHAMPTON GENERATING: S&P Cuts $153MM Revenue Bonds Rating to B- ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its rating on Northampton Generating Co. L.P.'s Series 1994A $153 million resource recovery revenue bonds due 2019 to 'B-' from 'B'. S&P removed the rating from CreditWatch, where S&P placed it with negative implications on Sept. 3, 2008. The outlook is negative. The downgrade reflects heightened concern regarding the project's financial profile given key operational challenges, namely increases in pet coke prices, as well as higher diesel prices that adversely affect the project's fuel site operations and transport costs. The bonds were issued by the Pennsylvania Economic Development Financing Authority on behalf of the project. Northampton is a 110-megawatt anthracite waste coal-fired power plant in Northampton, Pennsylvania Electricity is provided to Metropolitan Edison Co. (BBB/Stable/--) under a 25-year, energy-only power purchase agreement (PPA) through 2020. "We could lower the rating further if fuel costs increase and/or in our view the possibility of an economically viable refinancing becomes more remote or the expectation of default on the senior bonds is more certain," said Standard & Poor's credit analyst Trevor D'Olier-Lees. Prospects for an upgrade or outlook revision to stable in the near term are unlikely, given the financial vulnerability, albeit a significant reduction of about 35% to 40% in fuel costs would improve coverage to break-even levels. NOVA SCOTIA CO: Moody's Cuts ID and Facility Ratings; Outlook Neg. ------------------------------------------------------------------ Moody's Investors Service downgraded the corporate family and probability of default ratings of 3217920 Nova Scotia Company (a subsidiary of Alliance Films Holdings Inc., and affiliate of Alliance Films Inc., referred to as Alliance Films, formerly known as Motion Picture Distribution Finance Company) to Caa2 from Caa1 and instrument ratings as shown below. This action concludes the review commenced April 24, 2008, and reflects concern over the sustainability of the company's capital structure. The outlook is negative. Alliance Films achieved compliance with the revolver's leverage covenant as of June 30, 2008, with the infusion of C$40 million from its two equity sponsors, and Moody's expects that the company will remain in compliance with its financial covenants over the next year. However, absent a material improvement in operating performance, renegotiation of bank covenants, or an incremental equity contribution, compliance on June 30, 2009 will challenge the company, in Moody's view. In addition, the company has drawn all of its C$50 million revolver so is reliant on its cash for liquidity needs. As of June 30, 2008, prior to the C$40 million cash equity injection, cash was C$31 million. Even after recognizing that management has demonstrated some success in expanding its pipeline of film content, cash flow visibility remains limited given uncertainty around the timing and success of these films. In total, the uncertainty surrounding cash flow when combined with limited liquidity and high leverage raises the expected loss to a level more in line with the Caa2 corporate family rating. A summary of action follows. 3217920 Nova Scotia Company -- Corporate Family Rating, Downgraded to Caa2 from Caa1 -- Probability of Default Rating, Downgraded to Caa2 from Caa1 -- Senior Secured First Lien Bank Credit Facility, Downgraded to B3, LGD2, 26% from B2 -- Senior Secured Second Lien Bank Credit Facility, Downgraded to Caa3, LGD4, 69% from Caa2 -- Outlook, Changed To Negative From Rating Under Review Alliance Films' Caa2 corporate family rating reflects high leverage, weak liquidity and risk associated with film quality and contract renewal. Furthermore, the business model requires front- end payments to secure content, which in turn has an unpredictable future revenue stream. This lack of visibility and requirement for minimum guarantee payments necessitates robust liquidity, and the company's limited liquidity constrains the ratings. Alliance Films' valuable library of titles as well as considerable scale and market share in the Canadian distribution market support the ratings. Headquartered in Montreal, Quebec, Alliance Films Holdings Inc., is the largest independent distributor of motion pictures in Canada, with additional operations in the United Kingdom through its Momentum subsidiary and in Spain through its Aurum subsidiary. Goldman Sachs Capital Partners and Societe generale de financement du Quebec own the company. OMNOVA SOLUTIONS: S&P Cuts Ratings to 'B' on Declining Financial ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on OMNOVA Solutions Inc. to 'B' from 'B+'. The outlook is negative. At the same time, S&P lowered the issue-level rating on the company's $150 million senior secured term loan to 'B' from 'B+'. The recovery rating on the term loan is unchanged at '3', which indicates S&P's expectation of meaningful recovery in the event of a payment default. "The downgrades reflect OMNOVA's continued declining financial performance and our expectation that the current difficult operating environment is likely to further delay a material improvement in the company's financial profile," said Standard & Poor's credit analyst Henry Fukuchi. Despite significant price increases earlier this year, profitability has not met earlier expectations and cash flow has been hurt by elevated raw material costs and continued weakness in key end markets as a result of housing, office sector, and weak economic conditions. The downgrades also reflect S&P's expectation of weak economic conditions for the next few quarters, which could further impair end markets leading to weaker operating results and further deterioration in the financial profile. The rating reflects OMNOVA's vulnerable business position as a niche provider of emulsion polymers, specialty chemicals, and decorative products to mature and highly competitive markets. The rating also reflects OMNOVA's exposure to volatile raw material costs, many of which are derived from oil and natural gas, and its highly aggressive financial profile. These attributes are partially offset by competitive business positions as the No. 1 or No. 2 supplier in each of its key end markets and moderate product diversification. OMNOVA generated approximately $846 million in revenues in the 12 months ended Aug. 31, 2008. Also on that date, the company had approximately $211.5 million of total debt outstanding, including a modest amount of capitalized operating leases and unfunded postretirement obligations. OPEN ENERGY: Reports $4.5 Million Net Loss for August 2008 ---------------------------------------------------------- Open Energy Corporation reported $4,561,000 net loss on revenues of $766,000 for the three months ended Aug. 31, 2008, compared to $8,989,000 in net loss on revenues of $1,547,000 for the same period a year ago. The company's condensed consolidated balance sheet at Aug. 31, 2008, showed $24,778,000 in total assets and $24,854,000 in total liabilities resulting in a $76,000 stockholders' deficit. The company's condensed consolidated balance sheet showed strained liquidity with $8,005,000 in total current assets available to pay $14,948,000 in total current liabilities. A full-text copy of the company's regulatory filing is available for free at http://ResearchArchives.com/t/s?33f9 About Open Energy Based in Solana Beach, Calif., Open Energy Corporation (OTC BB: OEGY) -- http://www.openenergycorp.com -- a renewable energy company, focuses on the development and commercialization of a portfolio of solar technologies for residential, commercial, and industrial applications. The company designs, manufactures, and distributes building-integrated photovoltaic roofing tiles, roofing membranes, and architectural photovoltaic glass products under the SolarSave(R) trade name. * * * As reported in the Troubled Company Reporter on Sept. 24, 2008, Squar, Milner, Peterson, Miranda & Williamson, LLP, in San Diego raised substantial doubt about the ability of Open Energy Corp. to continue as a going concern after it audited the company's financial statements for the year ended May 31, 2008. The auditing firm pointed to the company's recurring losses from operations and working capital deficit. The company posted a net loss of $34,940,000 on net revenues of $6,940,000 for the year ended May 31, 2008, as compared with a net loss of $39,550,000 on net revenues of $4,290,000 in the prior year. PAINE WEBBER: Fitch Downgrades Class 1B5 Trust Rating to 'B' ------------------------------------------------------------ Fitch Ratings has taken rating actions on Paine Webber Mortgage Acceptance Trust IV, series 1999-4. The classes represent a beneficial ownership interest in separate trust funds. Paine Webber Mortgage Acceptance Trust IV, series 1999-4 -- Class 1B1 affirmed at 'AAA'; -- Class 1B2 affirmed at 'AA-'; -- Class 1B3 affirmed at 'A-'; -- Class 1B4 affirmed at 'BBB-'; -- Class 1B5 downgraded to 'B' from 'BB-'. The rating actions were taken as part of Fitch's ongoing surveillance process of existing transactions. PARADIGM MEDICAL: June 30 Balance Sheet Upside-down by $3.1 Mil. ---------------------------------------------------------------- Paradigm Medical Industries Inc.'s condensed balance sheet at June 30, 2008, showed $1,614,000 in total assets and $4,726,000 in total liabilities resulting in a $3,112,000 stockholders' deficit. The company's condensed balance sheet also showed strained liquidity with $1,262,000 in total current assets available to pay $3,427,000 in total current liabilities. The company reported $548,000 net loss on sales of $213,000 for the three months ended June 30, 2008, compared to $52,000 net loss on sale of $260,000 for the same period a year ago. A full-text copy of the company's regulatory filing is available for free at http://ResearchArchives.com/t/s?33ee Going Concern Doubt On May 15, 2008, Chislom, Bierwolf & Nilson LLC expressed substantial doubt about Paradigm Medical Industries, Inc.'s ability to continue as a going concern after auditing the company's financial statement for the fiscal year Dec. 31, 2007. The firm reported the the company has a working capital deficit and suffered recurring operating losses. About Paradigm Medical Headquartered in Salt Lake City, Paradigm Medical Industries Inc. (OTC BB: PMED) -- http://www.paradigm-medical.com/-- develops, manufactures, and markets diagnostic and surgical equipment for the ophthalmic market. The company specializes in powerful, easy-to-use, value-driven equipment capable of providing the experienced practitioner exceptional value while being affordable for doctors starting new practices or opening up satellite offices. PETTERS COMPANY: Case Summary & 13 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Petters Company, Inc. 4400 Baker Road Minnetonka, MN 55343 Bankruptcy Case No.: 08-45257 Type of Business: The Debtors operate an investing company. See: http://www.pettersgroup.com Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Petters Group Worldwide, LLC 08-45258 PC Funding LLC 08-45326 Thousand Lakes, LLC 08-45327 SPF Funding, LLC 08-45328 PL Ltd, Inc. 08-45329 Edge One, LLC 08-45330 MGC Finance, Inc., LLC 08-45331 PAC Funding, LLC 08-45371 Chapter 11 Petition Date: October 11, 2008 Court: District of Minnesota (Minneapolis) Debtors' Counsel: James A. Lodoen, Esq. jlodoen@lindquist.com Lindquist & Vennum P.L.L.P 4200 IDS Center 80 South Eight Street Minneapolis, MN 55402 Tel: (612) 371-3234 Fax: (612) 371-3207 Estimated Assets: unstated Estimated Debts. $500 million to $1 billion The Debtors' Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Ritchie Special Credit Investments $111,785,239 c/o Ritchie Capital 801 Warrenville Road, Suite 650 Lisle, IL 605532 Apriven $42,422,875 50D1 Spring Valley Road, Suite 290 Dallas, TX 5244 Yorkville Investment I, LLC $34,957,845 c/o Ritchie Capital Mgmnt Ltd. 801 Warrenville Road, Suite 650 Lisle, IL 60532 Vlahos, Michelle $18,800,000 294 Grove Lane E, Suite 113 Wayzata, MN 55391 Opportunity Finance LLC security $18,716,621 60 South 6th Street, Ste. 2540 agreement Minneapolis, MN 55402 Deikel, Theodore $10,000,000 MN Teen Challenge $9,320,000 Fidelis Foundation 3189 Fernbrook Lane N. Plymouth, MN 55447 Ark Discovery II, LP $6,949,180 c/o Ritchie Capital Mgmnt Ltd. 801 Warrenville Road, Suite 650 Lisle, IL 60532 Tauton Ventures LP $6,500,000 9900 Deerbrook Drive Chanhassen, MN 55317 Steel Pier Capital Advisors LLC $1,750,000 AD Capital LLC $1,200,000 Unit 1006, 10 floor, Block B Phileo Damansara 1, Jalan 16/11 New York, NY 10022 Calibrax Capital $1,000,000 800 Third Avenue, 9th Floor New York, NY 10022 Edge Brook, Inc. $1,000,000 294 Grove Lane E, Suite 113 Wayzata, MN 55391 PETTERS AVIATION: CEO Says Airline Staff to Get Back 70% of Wages ----------------------------------------------------------------- CEO Stan Gadek has restored 70 percent of Sun Country Airlines employees' wages, which was cut to 50 percent last week, Liz Fedor of the Minneapolis Star Tribune (Minnesota) reported Wednesday. "Based upon continued customer support for our business in the form of new bookings, I am comfortable in taking this action," Mr. Gadek said in a memorandum to employees. Tom Petters owns all of the voting stock in Sun Country and was its chairman. Mr. Petters is also the founder and former CEO of Petters Group Worlwide. On Oct. 8, 2008, a federal court judge sentenced Mr. Petters to jail on charges on mail and wire fraud, money laundering and obstruction of justice. He remains in federal custody. On Oct. 14, 2008, Petters Company, Inc. and Petters Group Worldwide LLC, filed separate petitions for Chapter 11 relief with the U.S. Bankruptcy Court for the District of Minnesota. "I must emphasize that we are still at risk and that I have not yet brought in new cash to the airline," Mr. Gadek said in his employee memo. According to the report, Sun Country will increase its fleet of Boeing 737s from seven to nine on Nov. 1 in anticipation of increased customer bookings in the coming winter. "Many people who fly on Sun Country have flown on us for years and years" and remain loyal, Sun Country spokeswoman Wendy Williams Blackshaw said Wednesday. "I don't think that people automatically associate us with [Mr.] Petters," she added. "The [Sun Country] brand is so strong in the market." "We've been really clear about the fact that we didn't go into bankruptcy because our business model is broken," she said. "This happened because of the situation with [Mr.] Petters." Petters Aviation LLC, and its debtor-affiliates MN Airlines LLC, dba. Sun Country Airlines Inc. and MN Airline Holdings Inc. filed separate petitions for Chapter 11 relief on Oct. 6, 2008 (Bankr. D. Minn. Lead Case No. 08-45136). Brian F. Leonard, Esq., Matthew R. Burton, Esq., at Leonard O'Brien et al., represented the Debtors as counsel. When Petters Aviation LLC filed for protection from its creditors, it listed assets of $50 million and $100 million, and the same range of debts. PETTERS COMPANY: Petters Group Creditors List Made Public --------------------------------------------------------- The list of creditors for Petters Group Worldwide, which filed for Chapter 11 bankruptcy on Oct. 11, 2008, was made public, John Welbes of the Pioneer Press (Minnesota) reported Wednesday. Petters Co. Inc., which also filed for Chapter 11, amended its creditors list on Wednesday to add Lancelot Investors' claim of $1.5 billion, and to revise some earlier claims. Petters Group Worldwide named Petters Capital as its largest unsecured creditor with a claim of $259 million, followed by Ritchie Capital and several of its entities with a claim of $235 million, according to the filing. Petters Group also listed a $34 million claim under Petters Co. Inc. The report adds that Petters Co. Inc. also listed a $250 million claim from Ritchie Capital. About Petters Group Worldwide Based in Minnetonka, Minn., Petters Group Worldwide LLC is named for founder and chairman Tom Petters. The group is a collection of some 20 companies, most of which make and market consumer products. It also works with existing brands through licensing agreements to further extend those brands into new product lines and markets. Holdings include Fingerhut (consumer products via its catalog and Web site), SoniqCast (maker of portable, WiFi MP3 devices), leading instant film and camera company Polaroid (purchased for $426 million in 2005), Sun Country Airlines (acquired in 2006), and Enable Holdings (online marketplace and auction for consumers and manufacturers' overstock inventory). Petters formed the company in 1988. Petters Company, Inc. is the financing and capital-raising unit of Petters Group Worldwide, LLC. Petters Company, Inc. and Petters Group Worldwide, LLC, filed separate petitions for Chapter 11 relief on Oct. 11, 2008 (Bankr. D. Minn. Case No. 08-45257 and 08-45258, respectively). James A. Lodoen, Esq., at Lindquist & Vennum P.L.L.P., represents the Debtors as counsel. In its petition, Petters Company, Inc. listed debts of between $500 million and $1 billion, while its parent, Petters Group Worldwide, LLC listed debts of not more than $50,000. As reported in the Troubled Company Reporter on Oct. 7, 2008, Petters Aviation, LLC,, and affiliates MN Airlines, LLC, doing business as Sun Country Airlines, Inc., and MN Airline Holdings, Inc., filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court for the District of Minnesota on Oct. 6, 2008 (Lead Case No. 08-45136). Petters Aviation, LLC is a wholly owned unit of Thomas Petters Inc. and owner of MN Airline Holdings, Inc., Sun Country's parent company. PETTERS COMPANY: Case Summary & 13 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Petters Company, Inc. 4400 Baker Road Minnetonka, MN 55343 Bankruptcy Case No.: 08-45257 Type of Business: The Debtors operate an investing company. See: http://www.pettersgroup.com Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Petters Group Worldwide, LLC 08-45258 Thousand Lakes, LLC 08-45327 SPF Funding, LLC 08-45328 PL Ltd, Inc. 08-45329 Edge One, LLC 08-45330 MGC Finance, Inc., LLC 08-45331 Chapter 11 Petition Date: October 11, 2008 Court: District of Minnesota (Minneapolis) Debtors' Counsel: James A. Lodoen, Esq. jlodoen@lindquist.com Lindquist & Vennum P.L.L.P 4200 IDS Center 80 South Eight Street Minneapolis, MN 55402 Tel: (612) 371-3234 Fax: (612) 371-3207 Estimated Assets: unstated Estimated Debts. $500 million to $1 billion The Debtors' Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Ritchie Special Credit Investments $111,785,239 c/o Ritchie Capital 801 Warrenville Road, Suite 650 Lisle, IL 605532 Apriven $42,422,875 50D1 Spring Valley Road, Suite 290 Dallas, TX 5244 Yorkville Investment I, LLC $34,957,845 c/o Ritchie Capital Mgmnt Ltd. 801 Warrenville Road, Suite 650 Lisle, IL 60532 Vlahos, Michelle $18,800,000 294 Grove Lane E, Suite 113 Wayzata, MN 55391 Opportunity Finance LLC security $18,716,621 60 South 6th Street, Ste. 2540 agreement Minneapolis, MN 55402 Deikel, Theodore $10,000,000 MN Teen Challenge $9,320,000 Fidelis Foundation 3189 Fernbrook Lane N. Plymouth, MN 55447 Ark Discovery II, LP $6,949,180 c/o Ritchie Capital Mgmnt Ltd. 801 Warrenville Road, Suite 650 Lisle, IL 60532 Tauton Ventures LP $6,500,000 9900 Deerbrook Drive Chanhassen, MN 55317 Steel Pier Capital Advisors LLC $1,750,000 AD Capital LLC $1,200,000 Unit 1006, 10 floor, Block B Phileo Damansara 1, Jalan 16/11 New York, NY 10022 Calibrax Capital $1,000,000 800 Third Avenue, 9th Floor New York, NY 10022 Edge Brook, Inc. $1,000,000 294 Grove Lane E, Suite 113 Wayzata, MN 55391 PHILADELPHIA SCHOOL: Moody's Assigns 'Ba2' Underlying Rating ------------------------------------------------------------ Moody's Investors Service has assigned an enhanced rating of Aa3 and underlying rating of Ba2 and stable outlook to the Philadelphia School District's $284.42 million General Obligation Bonds, Series E of 2008 and $112.89 million General Obligation Bonds, Series F of 2008. The bonds are secured by the full faith and credit of the school district within the limits prescribed by law. Proceeds of Series E will be used to finance the district's ongoing capital improvement plan. Proceeds of Series F will refund an outstanding variable rate loan issued through the Dauphin County General Authority Loan Pool. The Aa3 rating reflects Moody's current assessment of the Pennsylvania School District Fiscal Agent Agreement Intercept Program. The program provides for an intercept of state aid due in the current fiscal year in the event of a threatened payment failure by the district, and reflects the strong credit profile of the Commonwealth itself, whose general obligation bonds are rated Aa2/stable. Pursuant the School Code (Section 6-633), the state is authorized to intercept aid appropriated in the current fiscal year. The program is further enhanced by a Fiscal Agent's Agreement, which requires the fiscal agent to notify the Secretary of Education if the district has not made sinking fund payments 15 days prior to debt service due dates. Pursuant to a Memorandum of Understanding among: the Secretary of Education; the Labor, Education and Community Services Comptroller, and the State Treasurer, the timing for state aid intercept would require the transfer of appropriated funds to the fiscal agent in amounts required for debt service. After the current issue, the district will have outstanding approximately $2.87 billion in direct debt outstanding, of which $100 million is unhedged variable rate debt, $670.7 million is hedged variable rate debt, $1.23 billion is fixed rate general obligation debt, and $901 million in rental debt issued through the Pennsylvania State Public School Building Authority, $500 million of which is related to two basis swaps. The Ba2 unenhanced underlying rating and stable outlook reflect the numerous management and financial challenges that continue to face the district, including expenditure growth associated with mandated contributions to charter schools and the need to augment academic services given a substantial high school dropout rate; sluggish tax base growth and other limitations on the district's ability to raise revenues; and substantial capital needs for which additional bond issuance is contemplated. These weak credit fundamentals rose to a crisis level in fiscal 2002, with the projection early in the year of a large cash deficit by year-end, plus significant additional deficits projected in the out-years. Pursuant to an intermediate recovery plan negotiated by then Governor Schweiker and the Mayor, a formal "declaration of distress" was issued by the state's Secretary of Education in December 2001, causing the immediate replacement of the local school board with a largely state-controlled School Reform Commission. The city and the state also agreed to provide moderate levels of additional funding for the district, and a $300 million long-term deficit bond was authorized and issued in May 2002. The district's underlying rating outlook remains stable, despite a challenging financial environment over the past few years. The district issued bonds in 2005 to reimburse itself for the 2004 and 2005 one-time early retirement payments and a portion of the termination payments and to fund additional payments in fiscal 2006. In fiscal 2006, the district ran a $122.56 million operating deficit in its General Fund, despite a balanced budget at the beginning of the year, resulting in a General Fund deficit of -$66 million (-3.6% of General Fund revenues). It is of note that the district includes its Debt Service and Intermediate Unit Funds in its overall Operating Budget; when these funds are combined with the General Fund, the total operating deficit for fiscal 2006 was actually -$102.8 million. The Debt Service Fund is used to account for the district's accumulation of resources for the payment of debt service and insurance costs, and had a fund balance of $64.6 million at the end of fiscal 2006. Total undesignated fund balance for all three funds was -$23.8 million (-1.2% of Combined Operating Funds revenues) at the end of fiscal 2006. The deficit was driven by several unexpected factors, including a delay of building sales, delay in the receipt of state building aid, a significant decline in grant revenue, higher-than- anticipated termination costs, severance obligations that should have been accrued in the prior year, and delays in the implementation of hiring controls. The district began implementing a plan with the School Reform Commission in fiscal 2007 to correct the financial instability, resulting in a $5.1 million operating surplus, reducing the ending Operating Budget fund balance deficit to -$0.8 million (-0.03% of operating budget revenues). However, the amended FY2008 Operating Budget shows an additional deficit of as much as $30 million, driven by several unexpected budget variances during the year as well as some unrealized revenue increases and expenditure savings. The approved fiscal 2009 budget is expected to return the district to surplus operations, built on an expectation of growth in local tax revenues and an approved increase in state funding and expenditure controls. Intercept Program Provides Additional Bondholder Security; Strong Mechanics and Revenue Sufficiency The Aa3 programmatic rating serves as a ceiling for enhanced ratings related to individual financings. Moody's assigns an enhanced rating to specific financings after an evaluation of the sufficiency of interceptable revenues, as determined by specific coverage tests, the level of reliance on the final state aid payment, the timing of scheduled debt service payment dates as it relates to the state's fiscal year, the stability of state aid, and the priority of state aid payments. Moody's also evaluates the transaction structure, which considers the role of the independent fiduciary and any reserve fund. Financings that are considered average to strong in the majority of these areas will usually achieve the program-level rating, while financings with weaker scores may be rated one or more notches below the programmatic rating. All of the Philadelphia School District's general obligation financings, including the current one, have strong sufficiency of interceptable revenues and average transaction structure, warranting the Aa3 programmatic rating. Moody's analysis of actual monthly state aid payments for fiscal 2008 indicate that coverage for required monthly sinking fund payments from remaining state aid receipts never falls below 5 times. Under the stress- test scenario, which excludes the final month of state aid allocation, coverage for required monthly sinking fund payments from remaining state aid receipts never falls below 4 times. The state has consistently increased state aid, even in periods of fiscal stress. Finally, the availability of state aid for debt service prior to the use of other purposes is considered strong given that upon notification to the Secretary of Education of the deficiency in a sinking fund payment, any state aid appropriation for the remainder of the fiscal year can be accelerated for the intercept. The district's transaction structure favorably includes the use of a fiscal agent, which offers average strength given the timely notification requirements established in the Fiscal Agent Agreement whereby the fiscal agent must notify the Secretary of Education if the district has not made its full sinking fund payment 15 days prior to the due dates. Lastly, while there is no reserve fund for this financing, Moody's believes that average strength is offered by the notification requirements, mechanics and availability of funds to ensure timely debt service payments. Return to Surplus Operations in Fiscal 2007 After Significant Deficit in Fiscal 2006 Results in Negative Operating Budget Balance; Fiscal 2008 May Have Deficit Although the original fiscal 2006 budget was balanced, inclusive of one-time revenues, the district ran a $102.8 million operating budget deficit, extinguishing operating reserves of $79.1 million. The district experienced balanced operations in fiscal 2005, after two years of deficits in fiscal 2003 and 2004 driven by required payments to charter schools (approximately $184 million in fiscal 2005, up from just $17 million in 1999) due to rapid enrollment growth in such schools, plus growing costs for full day kindergarten, special education programs, debt service, and contractual teacher salary increases. The deficits had been met via draws against the district's one- time large cash balance, which resulted from the $300 million deficit bond sold in 2002. Fiscal 2005 included $70 million in Series 2005C bonds issued to fund costs related to a one-time retirement incentive package in 2004 and increased termination payments in 2004, 2005 and 2006. The fiscal 2006 budget was to be balanced with the sale of two buildings, the application of the 2005C bond proceeds for 2006 termination payments, and increases in revenue from both the state and city. The fiscal 2006 deficit was due to a variety of factors. The largest portion of the deficit was due to the receipt of $26.4 million less in grants revenue than budgeted driven by a significant drop in federal grants as compared to recent trends. Termination incentive payments were also higher than expected by $10.6 million and $8.6 million in severance obligations that should have been accrued in fiscal 2005 were accrued in fiscal 2006. There were also unanticipated costs due to a delay in the implementation of hiring practices for school-based positions, amounting to additional expenditures of $8.8 million. The district was also delayed in the expected building sales, which were expected to equal $7.8 million, and there was a delay in state aid for school building into fiscal 2006, reducing the fiscal 2005 anticipated revenues by $3.4 million. It is of note that the district includes its Debt Service and Intermediate Unit Funds in its overall Operating Budget; when these funds are combined with the General Fund, the total operating deficit for fiscal 2006 was a less pronounced $102.8 million. The Debt Service Fund is used to account for the district's accumulation of resources for the payment of debt service and insurance costs, and had a fund balance of $64.6 million at the end of fiscal 2006. Total undesignated fund balance for all three funds was -$23.8 million (-1.2% of Combined Operating Funds revenues) at the end of fiscal 2006. In response to the fiscal 2006 financial imbalance, the district developed and began implementing a recovery plan in fiscal 2007. The district reaffirmed existing and implemented new policies that were ratified by the SRC, including the creation of a Financial Accountability Unit to report to the SRC monthly budgetary status and the establishment of two new designated reserves together equal to 5% of the operating budget. The establishing resolutions for the Financial Accountability Unit restrict school-level management spending, including limitations on contracting and hiring authority and reductions in budget authority if overspending occurs. The district identified approximately $54 million in savings, including $32 million in expenditure reductions, such as the elimination of positions, a hiring freeze and other expenditure controls. The new plan resulted in a $14.8 million surplus in fiscal 2007, reducing the General Fund balance deficit to - $51.1 million (-2.6% of General Fund revenues). The undesignated fund balance for the Operating Budget, inclusive of the General, Debt Service and Intermediate Unit Funds at June 30, 2007 was - $790,000 (-0.04% of Combined Operating Funds). Despite this success in fiscal 2007, unaudited results for fiscal 2008 indicate an operating deficit in fiscal 2008 of up to $30 million. Although the district realized an additional $17.5 million in property taxes, as well as an additional $46.5 million in state aid, the district had several negative budget variances. Net payments to the district on its four swaps were lower than expected due to the increased interest rates on the district's auction rate bonds, creating a mismatch that cost an additional $11.8 million. The district also faced increased expenditures of $9.3 million related to charter schools as well as increased utilities costs of $6.4 million. In addition, the district, while successful in gaining some revenue enhancements and expenditure reductions, was not able to realize all of its gap-closing measures by the end of the year. The approved fiscal 2009 budget indicates a return to surplus operations through $93 million in state aid that is in the commonwealth's approved budget and the expectation of an additional $29 million in local tax revenues (4% increase based on growth). Weak Long-Term Demographic and Economic Trends, Some Improvement Indicated Philadelphia has experienced a long trend of industry and population loss since 1950, with a particularly sharp economic retreat hitting in the late 1980's and early 1990's. The late 1990's saw a resumption of growth, with employment up 5.7% between 1998 and 2001. After a decline between 2001 and 2003, reflecting the slowdown in the national economy, modest growth in employment resumed, with growth of about 1.1% in 2005, 0.9% in 2006, and 0.7% in 2007. Results for the first six months of 2008 demonstrate continued growth, with each month showing an increase over the same month of the prior year, although results for July and August show zero growth. Given an increase in unemployment rates (7.4% in July, 2008 vs. 6.2% in July, 2007) and the national economic slowdown, Moody's believe it is likely there will be job losses in the latter half of the calendar year. Manufacturing has continued to decline in importance, and as of 2005, diversified services account for 54% of total employment. Population loss during the 1990's was just over 4%, although this was only about half the loss that had been estimated prior to the 2000 census count. With an estimated 1.45 million residents, the city is the nation's sixth most populous. Resident wealth indicators are low, with per capita and median family incomes only about 77% and 74% of the national median, respectively, and 23% of residents below the poverty level. A relatively large portion of the city's job base is in low-paying sectors, with healthcare, social services, and state and local government accounting for about 30% of total jobs. The city's taxable base has grown modestly over the past decade, averaging 2.8% growth annually since 2002. The approximately $60 billion tax base does benefit from significant diversity, with the 10 largest tax payers comprising less than 5% of total valuation. Substantial Debt Burden; Significant Swap Exposure The district's direct debt burden is an above average 4.9% of full valuation, climbing to a high 12.5% when overlapping city obligations are taken into account. The substantial overall debt burden reflects, among other factors, special efforts to promote economic development, the PICA deficit-funding bonds sold in the early 1990's, and a City $1.3 billion pension bond issued several years ago. Given the slow rate of principal retirement (28.1% in 10 years) and additional borrowing plans, Moody's does not expect the district's debt burden to moderate in the near future. The district has entered into multiple fixed rate payer interest rate swap agreements to hedge a portion of its variable rate Series 2008A, B, C and D bonds. There are four separate Counterparties for the swaps, including Wachovia Bank (Moody's long-term issuer rating of Aa2), Morgan Stanley (Moody's rated A1), Goldman Sachs (Moody's rated Aa3), and Merrill Lynch (Moody's rated A2). The swaps are all % of LIBOR-based on various notional amounts and for various durations. The district has also entered into two basis swaps related to their lease revenue bonds issued through the State Public School Building Authority, paying SIFMA and receiving 67% of one-month LIBOR plus a fixed spread for both, with Bear Stearns and Wachovia for a total notional amount of $500 million. For all of the district's swaps, the district only has the right of optional termination and rating triggers, which include a downgrade of the enhanced state intercept rating below Baa3. Outlook The enhanced rating outlook for the district's bonds is stable, reflecting the stable outlook on the Pennsylvania School District Fiscal Agent Agreement Intercept Program. The sufficiency of interceptable revenues is expected to remain strong and the transaction structure is expected to remain average. The rating outlook is also stable on an unenhanced basis - i.e. excluding the support provided by the state aid intercept. Although the district continues to face financial challenges in fiscal 2008 and beyond, Moody's believes the new adopted policies and targeted budget cuts should help improve the district's financial operations in the medium term. Further deterioration in financial operations, however, could lead to a weakening of credit quality. What could change the Aa3 enhanced rating - UP: -- Upgrade of the programmatic intercept rating What could change the Aa3 enhanced rating - DOWN: -- Downgrade of the programmatic intercept rating -- Weakening of the sufficiency of interceptable revenues or transaction structure What could change the Ba2 underlying rating - UP: -- Multi-year trend of surplus operating budgets -- Return to adequate General Fund reserve levels What could change the Ba2 rating - DOWN: -- Continued operating deficits in fiscal 2009 and beyond Key Statistics: -- 2006 Estimated Population: 1.5 million -- 2008 Full Value: $60.8 billion -- Full Value Per Capita: $41,597 -- Per Capita Income as % of State: 79.1% -- Median Family Income as % of State: 75.3% -- Direct Debt Burden: 4.9% -- Overall Debt Burden: 12.5% -- Payout of principal (10 years): 28.1% -- FY07 Operating Budget balance: -$0.8 million (0.03% of operating revenues) -- FY07 General Fund balance: -$51.1 million (-2.6% of General Fund revenues) -- Post-Sale Parity Debt Outstanding: $1.97 billion PIERRE FOODS: Wants Exclusive Plan Filing Period Moved to Jan 2009 ------------------------------------------------------------------ Pierre Foods Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware to further extend their exclusive periods to: a) file a Chapter 11 plan until Jan. 12, 2009; and b) solicit acceptances of that plan until March 13, 2009. A hearing is set for Oct. 29, 2008, at 10:00 a.m., to consider approval of the extension request. Objections, if any, are due Oct. 22, 2008. According to the Troubled Company Reporter on Oct. 1, 2008, the Debtors delivered to the Court a joint Chapter 11 plan of reorganization dated Sept. 29, 2008, and disclosure statement describing the plan. The Debtors' plan provides for (i) the conversion of $100 million of existing prepetition secured indebtedness to 100% of the equity of the reorganized Debtors; (ii) conversion of $50 million of existing prepetition secured indebtedness to a new mezzanine facility; and (iii) 12% cash recovery for unsecured creditors -- including holders of senior subordinated notes -- to be paid in installments within 120 days after the plan's effective date, among other things. General unsecured creditors are expected to recover 12% under the plan. The Debtors have asked the Court to hold a hearing early in December 2008 to consider confirmation of their plan. The Court will convene a hearing on Oct. 29, 2008, to consider the adequacy of the Debtors' disclosure statement, and solicitation and tabulation of plan votes. The extension of time will provide the Debtors with sufficient time to reassess and pursue all alternative options with respect to their Chapter 11 restructuring. The Debtors' current deadline to file a plan is Nov. 12, 2008. 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. PILGRIM'S PRIDE: Plunges 24% on Bankruptcy Speculation ------------------------------------------------------ Choy Leng Yeong of Bloomberg News reports that Pilgrim's Pride Corp. fell 76 cents to $2.47 at 4:15 p.m. on the New York Stock Exchange amid speculation it may file for bankruptcy if it fails to refinance its debt. Plunging 24 percent, the Company's shares have slumped a total of 91 percent this year, according to the report. Independent rating company Egan-Jones Ratings Co. said there's a 70 percent chance Pilgrim's Pride will default on its debt, according to the report. The Company's long-term debt stood at $1.52 billion as of June 28, 2008, and it had $54.1 million in cash, according to a July regulatory filing, according to the report. It had $341.4 million available to borrow from credit lines as of July 29, according to the report. The Wall Street Journal said the Company's possible bankruptcy and sale is based on the statements of two unidentified people, according to the report. "We don't believe that a bankruptcy filing would be in anyone's best interest, certainly not for our lenders, nor for our company and investors," the Company's spokesman Gary Rhodes said in an e- mailed statement according to the report. About Pilgrim's Pride Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. Pilgrim's Pride employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. * * * As reported in the Troubled Company Reporter on Sept. 29, 2008, Standard & Poor's Ratings Services lowered its ratings on Pilgrim's Pride Corp., including its corporate credit rating to 'CCC+' from 'BB-'. In addition, S&P revised the CreditWatch implications to developing from negative. Moody's Investors Service lowered the ratings of Pilgrim's Pride Corporation, including: (i) corporate family rating to B2 from B1; (ii) probability of default rating to B2 from B1; (iii) $400 million 7.625% senior notes due 2015 to Caa1 from B3 and (iv) $250 million senior subordinated notes due in 2017 and $5.1 million (original $100 million) senior subordinated notes due 2013 to Caa1 from B3. PILGRIM'S PRIDE: Denies Bankruptcy Rumors ----------------------------------------- Reuters reports that Pilgrim's Pride Corp. said on Friday that it wouldn't file for bankruptcy protection, and that it was focusing on a plan to resolve its problems. Pilgrim's Pride spokesperson Gary Rhodes said in a statement, "We don't believe that a bankruptcy filing would be in anyone's best interest, certainly not for our lenders, nor for our company and investors." Lauren Etter and Jeffrey McCracken at The Wall Street Journal relates that two people familiar with the matter said that Pilgrim's Pride could be forced to seek bankruptcy-court protection if it fails to raise money or extract concessions from its lenders. By filing for bankruptcy, Pilgrim's Pride could speed up a sale of the company, the report says, citing the sources. According to the report, the sources said that Pilgrim's Pride is considering selling its Mexican operations, various poultry plants and some real estate, in which Tyson Foods Inc. and Industrias Bachoco SA are potential suitors. Citing independent rating company Egan-Jones Ratings Co., Choy Leng Yeong at Bloomberg News relates that Pilgrim's Pride has a 70% possibility of defaulting on its debt. As reported in the Troubled Company Reporter on Oct. 2, 2008, Pilgrim's Pride completed a definitive written agreement with its lenders to temporarily waive the fixed-charge coverage ratio covenant under its credit facilities through Oct. 28, 2008. The lenders also agreed to continue to provide liquidity under these credit facilities during this same 30-day period in accordance with the terms of the waiver agreement. Pilgrim's Pride had requested the temporary waiver after notifying lenders that it would report a significant loss in the fourth quarter of fiscal 2008, which ended Sept. 27, when it files its Form 10-K for the period. WSJ states that Pilgrim's Pride reported a $53 million fiscal- third-quarter loss, due to rising prices for feed, dropping prices for chicken, and an increasingly untenable debt load. Bloomberg quoted Morningstar Inc. analyst Ann Gilpin as saying, "There's probably a 50-50 chance of bankruptcy. They are having serious issues with their profitability. Their costs are going up. Their revenue is not keeping in pace with the increase in input costs." Bloomberg relates that Egan-Jones co-founder and president Sean Egan as saying, "The unfortunate reality for Pilgrim's Pride is that capital providers currently have little patience and even less additional funds for struggling firms." According to Bloomberg, Mr. Rhodes said that Pilgrim's Pride is exploring opportunities to refinance and recapitalize its business, and to find ways to operate more efficiently. "Over the past few weeks, we have been working hard to develop a comprehensive business plan for the months ahead. This plan will help us address the financial and operational challenges -- such as an oversupply of chicken, soft demand and weak market pricing," the report quoted Mr. Rhodes as saying. Pilgrim's Pride Corp must convince creditors to give it more months to shore up its business, Bob Burgdorfer at Reuters relates, citing analysts. According to the report, the analysts doubt that the company will meet its obligations by the Oct. 28 deadline. The company has been talking to lenders about longer- term relief on its fixed-charge covenant, the report says, citing a source. According to WSJ, banks have gotten a lot tougher about lending and some suppliers are demanding new payment terms, like payment on delivery or even in advance. WSJ reports that Pilgrim's Pride retained early this month Weil Gotshal & Manges LLP as bankruptcy counsel and that it has also been trying to line up debtor-in-possession financing. About Pilgrim's Pride Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. Pilgrim's Pride employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. * * * As reported in the Troubled Company Reporter on Sept. 29, 2008, Standard & Poor's Ratings Services lowered its ratings on Pilgrim's Pride Corp., including its corporate credit rating to 'CCC+' from 'BB-'. In addition, S&P revised the CreditWatch implications to developing from negative. Moody's Investors Service lowered the ratings of Pilgrim's Pride Corporation, including: (i) corporate family rating to B2 from B1; (ii) probability of default rating to B2 from B1; (iii) $400 million 7.625% senior notes due 2015 to Caa1 from B3 and (iv) $250 million senior subordinated notes due in 2017 and $5.1 million (original $100 million) senior subordinated notes due 2013 to Caa1 from B3. PLASTECH ENGINEERED: Files Amended Joint Plan of Liquidation ------------------------------------------------------------ Plastech Engineered Products, Inc., and its debtor-subsidiaries filed with the United States Bankruptcy Court for the Eastern District of Michigan on October 16, 2008, their First Amended Joint Plan of Liquidation. The Amended Plan, among other things, (i) provides for the estimated allowed amounts of claims in the Chapter 11 cases, although the expected recovery of unsecured creditors owed about $300,000,000 remains unspecified, (ii) adjusts the solicitation schedule, under which the Plan will be presented to the Court for confirmation in early December. The Original Plan contemplated an Oct. 22 confirmation hearing, about four months after the auto-parts supplier sold its units to various parties, including its top-customer Johnson Controls, Inc., and its secured lenders. The Amended Plan, which the Debtors propose together with the Official Committee of Unsecured Creditors: (a) provides for a confirmation objection deadline on November 25, 2008 at 4:00 p.m. (Eastern Time), and a Plan confirmation hearing on Dec. 3, 2008 at 9:30 a.m. (Eastern Time). (b) named Carroll Services LLC, as Liquidating Trustee, with James Patrick Carroll as managing member, appointed pursuant to the Plan, to act as trustee of and administer the Liquidating Trust. (c) anticipates for the Liquidating Trustee to engage Clark Hill, PLC; Allard & Fish, P.C.; and Skadden, Arps, Slate, Meagher & Flom LLP, who will primarily be responsible for the prosecution of avoidance actions and Class 7 General Unsecured Claims resolution and objections. Clark Hill is also expected to represent the Post-Effective Date Committee, which members will be selected from the Creditors Committee following the latter's dissolution on the effective date of the plan. (d) strikes out from the definition of Miscellaneous Assets the Debtors' 51% equity interest in TrimQuest, LLC. (e) provides that all cash necessary for the Debtors or the Liquidating Trustee to make distributions pursuant to the Plan will be obtained from: * the Debtors' cash on hand, * the proceeds of the sales and sale-related settlements, * cash received in liquidation of the unencumbered assets of the Debtors, which include expected avoidance action recoveries and offsets estimated between $10,000,0000 and $30,000,000, and * the proceeds of certain Available Additional DIP Collateral Proceeds. (f) provides for a liquidation analysis that shows that if the Chapter 11 cases were converted to cases under Chapter 7, (i) insufficient cash would remain to pay outstanding DIP claims and Term Lender claims in full, (ii) administrative claims, priority tax claims and non-Tax priority claims in full, would also not be paid in full because the only assets available to satisfy those claims would be pre- bankruptcy unencumbered assets and avoidance actions, and (iii) holders of general unsecured claims would fare worse under chapter 7 because their residual interest in the proceeds of unencumbered assets and avoidance actions would likely be consumed entirely by payments of higher priority claims. (g) noted that if the Plan cannot be confirmed or consummated by December 31, 2008, and as a consequence the Debtors cannot be dissolved as contemplated by the Plan prior to January 1, 2009, assets that remain at the Debtors and are transferred on or after January 1, 2009, may result in taxable gain due to the reduction in tax attributes that will occur on January 1, 2009. Delaying the dissolution of the Debtors could result significant additional tax liabilities that could in turn give rise to large administrative claims. The Amended Plan was signed by James P. Carroll, the chief liquidation officer of Plastech. Peter Smidt, in his role as executive vice president for Finance, and CFO, signed the Original Plan. Treatment of Interests and Claims Type Estimated Estimated Class of Claims Amount Recovery ---- --------- --------- --------- N/A DIP Facility claims N/A 503(b)(9) $17,000,000 claims N/A administrative $5,000,000 to claims $15,000,000 N/A priority tax $0 to claims $5,000,000 1 first lien term $85,000,000 70% loan claims 2 second lien $0 0% term loan claims 3 secured tool $0 to 100% vendor claims $25,000,000 4 secured tax $0 to 100% claims $2,000,000 5 miscellaneous $0 100% secured claims 6 non-tax $0 to 100% priority $25,000,000 7 general $300,000,000 unsecured claims 8 intercompany 0% claims 9 subordinated 0% 510(c) claims 10 subordinated 0% 510(b) claims 11 old equity 0% interests Revised Plan Solicitation Deadlines In line with the filing of their Amended Joint Plan of Liquidation, the Debtors propose revised dates to solicit votes to accept or reject their Joint Plan of Liquidation, as amended. The Debtors propose that June 30, 2008, will be the solicitation record date for determining which non-governmental creditors and other non-governmental parties-in-interest; and July 30, 2008 for determining which governmental unit will be sent Solicitation Packages by the proposed Mailing Deadline and provide the Debtors and the Voting Agent ample time to ensure that the persons are sent the proper Solicitation Package by the deadline. Under the proposed Plan, as amended, creditors in Classes 1, 2 and 7 are impaired and entitled to vote to accept or reject the Plan. Confirmation Hearing The Debtors ask the Court to consider confirmation of their Amended Joint Plan of Liquidation on December 3, 2008. The Debtors propose that objections to the Plan confirmation, the proposed assumption and rejection of unexpired lease or executory contract pursuant to the terms of the Plan, as amended, must be filed and served on November 25, 2008. Plan Confirmation objections must be filed in writing, -- state the name and address of the objecting or responding party and the nature of the claim or interest of the party; -- state with particularity the basis and nature of any objection or response and include, where appropriate, proposed language to be inserted in the Plan to resolve any objection or response; -- otherwise comply with the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, and the local rules of the Bankruptcy Court; and -- be filed with the Court and served so as to be actually received by November 25, 2008 by Skadden, Arps, Slate, Meagher & Flom LLP, and Allard & Fish; Clark Hill PLC; the Office of the United States Trustee; Latham & Watkins, LLP; Ropes & Gray LLP; Stutman, Treister & Glatt; Dickinson Wright PLLC, Miller, Canfield, Paddock and Stone, P.L.C.; Honigman Miller Schwartz and Cohn LLP; Dickinson Wright PLLC; and The Roxbury Group. Parties-in-interest will be allowed to file a reply by December 1, 2008, at 4:00 p.m. to any timely confirmation objections that may be filed. A copy of the black-lined First Amended Joint Plan of Liquidation is available for free at: http://ResearchArchives.com/t/s?33fd The disclosure statement, which explains the terms of the Plan, was also amended in light of the recent developments and the changes to the Plan. A copy of the black-lined of the Amended Disclosure Statement is available for free at: http://ResearchArchives.com/t/s?33fe 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. 37; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PLIANT CORP: S&P Junks Credit Rating on Debt Refinancing Concerns ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered the corporate credit rating on Schaumburg, Illinois-based Pliant Corp. to 'CCC' from 'B-' and removed it from CreditWatch, where it was placed with negative implications on Sept. 5, 2008. The outlook is negative. At the same time, Standard & Poor's lowered the issue rating on the company's first-lien senior secured notes to 'CCC-' from 'B-' and revised the recovery rating to '5' from '3', which reflects our expectation that first-lien senior secured noteholders are likely to realize modest recovery in the event of a default. S&P also lowered the issue rating on the second-lien secured notes to 'CC' from 'CCC', while leaving the recovery rating unchanged at '6', reflecting S&P's expectation for negligible recovery in the event of a default. S&P removed the issue ratings on the notes from CreditWatch, where they were placed with negative implications on Sept. 5, 2008. "The downgrade reflects heightened concerns regarding Pliant's ability to refinance pending debt maturities during the next few months," said Standard & Poor's credit analyst Ket Gondhan, "particularly given the company's highly leveraged financial profile and challenging credit market conditions." POE FINANCIAL: Poe & Associates File Modified Amended Plan ---------------------------------------------------------- Poe & Associates, LLC, filed with the U.S. Bankruptcy Court for the Middle District of Florida modifications to its Amended Plan of Reorganization which was filed on Dec. 19, 2007. The Florida State of Financial Services objected to the confirmation of the Plan during the confirmation hearing on Jan. 31, 2008. Since that time, Poe & Associates and DFS have reached an agreement to modify the Amended Plan. The Debtors told the Court that for technical reasons, DFS will still maintain its objections, but that the Modified Amended Plan could be confirmed. The Modified Amended Plan will allow Poe & Associates to sell its assets to Poe Financial Group Inc. or its nominee and allow PFG to conduct business as an insurance agent in the State of Florida. Plan Funding Funding for the Plan will come from the proceeds of the sale of Poe & Associates' real and personal properties, including tangible and intangible assets with the exclusion of the Trust Assets, to Poe Financial Group. PFG will not receive any right, title, or interest to any causes of action against any insider of Poe & Associates. While PFG is receiving all beneficial rights, interests, proceeds, and other benefits related to the Citizens Action, Poe & Associates is not assigning the underlying causes of action to PFG. Those causes of action shall remain in the name of the Debtor with all beneficial interests owned by PFG, and not the Trust. In consideration for the assets to be purchased, PFG will pay $100,000 plus the amount necessary to pay the Class 5 claims that are scheduled or Allowed as of the date of the Closing. The Debtor will pay all Allowed Claims in Classes 1 to 5 in Cash out of the Purchase price. The remainder of the Purchase Price will be transferred on or before the effective date to the trust. Poe & Associates will select a Liquidating Trustee who will be exclusive Trustee of the Trust Assets, whose responsibility will include, among others, receiving the Trust Assets and implementing the distributions of the Trust Assets. Classifications and Treatment of Claims Under the Modified Amended Plan, the claimants are grouped into six classes: Class 1 Priority Claims Impaired Entitled to Vote Class 2 Secured Tax Claims Impaired Entitled to Vote Class 3 Other Secured Impaired Entitled to Vote Claims (Equipment) Class 4 Convenience Class Impaired Entitled to Vote Claims Class 5 General Unsecured Impaired Entitled to Vote Claims (other than the claim filed by the State of Florida Department of Financial Services Class 5A Unsecured claim of Impaired Entitled to Vote State of Florida Department of Financial Services Class 6 Equity Interests Impaired Entitled to Vote Each holder of an Allowed Priority Claim under Class 1 will receive, in full and complete settlement, satisfaction and discharge of its Allowed Priority Claim, Cash in an amount equal to such Allowed Priority Claim without post-petition interest. Each holder of an Allowed Secured Tax Claim under Class 2 shall receive, in full and complete settlement, satisfaction and discharge of its Allowed Secured Tax Claim, Cash in an amount equal to such Allowed Secured Tax Claim required to be paid pursuant to Sec. 506(b) of the Bankruptcy Code. Each holder of an Allowed Other Secured Claim under Class 3 shall receive, in full and complete settlement, satisfaction and discharge of its Allowed Ohter Secured Claim, Cash in an amount equial to such Allowed Other Secured Claim, without post-petition interest. Each holder of an Allowed Convenience Class Claim under Class 4 shall, in full and complete settlement, satisfaction and discharge of such Allowed Convenience Claim, (i) receive 100% of the Allowed Convenience Claim, without post-petition interest, or (ii) such other treatment as may be consensually agreed to by Debtor and the holder of the Allowed Convenience Claim. Each holder of an Allowed General Unsecured Claim under Class 5 shall receive, in full and complete settlement, satisfaction and discharge of such Allowed General Unsecured Claim, without post- petition interest. DFS, classified as 5A, will, in full and complete settlement, satisfaction and discharge of its Claim receive (i) one or more distributions for the Trust in an amount equal to its Pro Rata share of the Trust; or (ii) such other treatment as may be consensually agreed to by the Debtor or the Liquidating Trustee and DFS. However, the aggregate distribution to DFS is capped at the principal amount of DFS's claim. Holders of Allowed Class 6 Interests will, subject to the Marketing Process, if applicable, and the results of any Equity Auction, retain their interests through issuance of the Post- Confirmation Equity Interest to the holders of the Class 6 Equity Interests, conditioned upon providing, or causing to be provided: (i) the Equity Fund Contribution; (ii) the Equity Priority Contribution; and (iii) the Litigation Expense Funds. In the event of the failure to satisfy one or more of the conditions, the Class 6 Interests will be cancelled and new shares of common stock representing a 100% ownership interest in the Reorganized Debtor will be issued, pro rata, to holders of Allowed Class 5 Claims. A full-text copy of the Amended Plan of Reorganization of Poe & Associates, LLC dated Dec. 19, 2007, is available for free at: http://ResearchArchives.com/t/s?33e7 A full-text copy of the Modified Amended Plan of Reorganization of Poe & Associates, LLC dated Oct. 9, 2008, is available for free at: http://researcharchives.com/t/s?33e8 Headquartered in Tampa, Florida, Poe Financial Group Inc. -- http://www.poefinancialgroup.com/-- specializes in insuring coastal properties assumed from Florida's high-risk insurance pool. The Debtor, Poe & Associates, LLC, and two other affiliates filed for chapter 11 protection on Aug. 18, 2006 (Bankr. M.D. Fla. Lead Case No. 06-04288). Noel R. Boeke, Esq., Leonard Gilbert, Esq., and Rod Anderson, Esq., at Holland & Knight, LLP, represent the Debtors. When Poe Financial Group Inc. filed for protection from its creditors, it listed assets of $50,000 to $100,000, and debts of $10 million to $50 million. Poe & Associates LLC listed assets of $500,000 to $1 million, and debts of $500,000 to $1 million. Poe Insurance Managers LLC listed assets of $10 million to $50 million, and debts of $10 million to $50 million. Mariah Claims Services listed assets of $50,000 to $100,000, and debts of $10 million to $50 million. Larry Hyman is the Liquidating Trustee. Edwin Rice, Esq., at Glenn Rasmussen Fogarty & Hooker PA, represents Mr. Hyman as counsel. QUIGLEY CO: Pfizer Objects to U.S. Trustee's Proposed Probe ----------------------------------------------------------- Tiffany Kary of Bloomberg News reports that Pfizer, Inc., asked the U.S. Bankruptcy Court for the Southern District of New York on Oct. 17, 2008, to deny the request of the U.S. Trustee for the appointment of an examiner to investigate Pfizer's relationship with Quigley Co., Inc., because the Trustee is trying to obstruct the Debtor's reorganization. Lawyers for the Debtor also objected to the proposed probe, calling the reasons for appointing an independent examiner "legally and factually without merit," according to the report. According to Troubled Company Reporter on Sept. 15, the Trustee contended that the Debtor and Pfizer had a joint-defense agreement that wasn't properly disclosed, hence, the Trustee's demanded for an examiner to investigate the parties. About Quigley Company Quigley Company, Inc., a division of Pfizer Inc., sold asbestos- containing insulation products until the early 1970s. Quigley filed for protection under chapter 11 on Sept. 3, 2004 (Bankr. S.D.N.Y. Case No. 04-15739) in order to implement a proposed global resolution of all pending and future asbestos-related personal injury liabilities. Asbestos victims and Pfizer have been negotiating a settlement deal which calls for Pfizer to pay $430 million to 80% of existing plaintiffs. It will also place an additional $535 million into an asbestos settlement trust that will compensate future plaintiffs as well as the remaining 20% of current plaintiffs with claims against Pfizer and Quigley. The compensation deal is worth $965 million all up. Of that $535 million, $405 million is in a 40-year note from Pfizer, while $100 million will come from insurance policies. Lawrence V. Gelber, Esq., and Michael L. Cook, Esq., at Schulte Roth & Zabel LLP, represent the Debtor in its restructuring efforts. Elihu Inselbuchm Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $155,187,000 in total assets and $141,933,000 in total debts. RELIANT ENERGY: Disclosure Statement, Confirmation Schedule OK'd ---------------------------------------------------------------- BankruptcyLaw360.com reports that the United States Bankruptcy Court for the District of Delaware has approved the Chapter 11 disclosure statement of Reliant Energy Channelview, LP, and its debtor-affiliates and has set a hearing to confirm the plan on Nov. 21, 2008. According to Troubled Company Reporter, the plan contemplates the liquidation of the Debtors' estate and the distribution of the sale proceeds and any other remaining assets to holders of allowed claims and equity interests. The plan further contemplates the appointment of a plan administrator who will serve as the chief executive officer of the Debtors. On April 8, 2008, GIM Channelview Cogeneration, LLC, emerged as the winning bidder during an auction. Consequently, the Debtors and GIM entered into an GIM asset purchase agreement, wherein GIM did not provide for the assumption and assignment of the Second Amended Restated Cash Flow Participation Agreement (CFPA) between the Debtors and Equistar Chemicals LP. The purchase price under the GIM APA was $500 million. The proceeds of the proposed GIM APA were sufficient to pay all creditor claims in full and provide a recovery to interest holders. The next day, the Court ruled that the Debtors had satisfied the standards for approval of the sale under Section 363 of the United States Bankruptcy Code, and that the CFPA was not severable from the other Equistar agreements to be assumes and assigned under the GIM APA. Thus, the Court's ruling regarding the CFPA jeopardized the Debtors' ability to consummate the sale to GIM. As the GIM APA did not contemplate the assumption and assignment of the CFPA, the Debtors and Equistar attempted to reach an agreement resolving their disputes with respect to the CFPA. On April 23, 2008, the Debtors asked the Court to appoint a Chapter 11 trustee but the Court decided to defer its decision on the Trustee plea and directed the parties to mediate their dispute. On May 6, 2008, the Court entered an order defering motion of the Debtors for entry of an order appointing a Chapter 11 trustee. The parties participated in the court-ordered mediation and successfully resolved their disputes regarding the sale and the CFPA. On June 9, 2008, the Debtors asked the Court to approve the GIM sale and a stipulation in connection with the sale. The salient terms of the stipulation are: -- Upon closing of the sale, the CFPA will be deemed assume by the Debtors, but not assigned to GIM. The acquired assets will be conveyed to GIM free and clear of any liens, claims under the CFPA; -- The project agreements and the letter agreements will be assume and assigned under the sale order. -- At closing, Equistar will receive certain payments and will be deemed to have terminated its interest under and waived all rights under the CFPA. -- After closing, all available cash will be paid to Equistar and REI in the following ratios: a) available cash up to and including $71.7 million will be paid 80% to Equistar and 20$ to REI or its designees; b) available cash in excess of $71.7 million will be paid 60% to Equistar and 405 to REI or its designees; c) Any additional funds will be paid 12.5% to Equistar and 87.5% to REI. -- All obligations under the secured credit facility will be paid in full at closing. Any obligations arising under the secured credit facility post-closing will be paid in full under the confirmed plan. On June 9, 2008, the Court approved sale to GIM. The closing of the sale took place on July 1, 2008. The plan classifies interests against and claims in the Debtors in five classes. The classification of interests and claims are: Treatment of Interests and Claims Type Estimated Class of Claims Treatment Recovery ----- --------- --------- --------- unclassified administrative 100% claims unclassified priority 100% claims unclassified other priority 100% claims 1 secured lender unimpaired 100% claims 2 other secured unimpaired 100% claims 3 general unsecured unimpaired 100% claims 4 intercompany impaired 0% claims 5 equity interests impaired unknown Class 5 holders of interests against the Debtors are entitled to vote for the plan. Holders of Class 1 secured lender claims will receive cash from the sale proceeds to the prepetition agents in an amount necessary to satisfy the allowed secured claims in full. Each holders of Class 2 other secured claims will be paid in full and final satisfaction of the allowed other secured claims otherwise holders agrees to a different treatment, either: -- the collateral secured the allowed secured claims; or -- cash in an amount equal to the value of the collateral. Holders of Class 3 general unsecured claims will receive the full unpaid amount of the claims plus interest -- except, in accordance wit the terms of the stipulation, allowed intercompany claims will be paid without interests -- with respect to the claims from the Debtors' bankruptcy filing to the plan's effective date, accruing at the Federal Judgment Rate as of the Debtors' bankruptcy filing. Class 4 intercompany claims will be canceled and holders will not receive any distribution under the plan. Holders of Class 5 equity interest, after the plan's effective date, will receive all cash and rights, title and interest in any other assets remaining in the Debtors' estates. All cash distributed to holders of equity interest will be subject to and in accordance with the terms of the stipulation including any payments required to be made to Equistar. A full-text copy of the Debtors' Disclosure Statement is available for free at: http://ResearchArchives.com/t/s?31ef A full-text copy of the Debtors' Joint Chapter 11 Plan of Liquidation is available for free at: http://ResearchArchives.com/t/s?31f0 About Reliant Energy Channelview Based in Houston, Reliant Energy Channelview L.P. owns a power plant located near Houston, and is an indirect wholly owned subsidiary of Reliant Energy Inc. -- http://www.reliant.com/-- The company and its three affiliates, Reliant Energy Channelview (Texas) LLC, Reliant Energy Channelview (Delaware) LLC, and Reliant Energy Services Channelview LLC filed for chapter 11 protection on Aug. 20, 2007 (Bankr. D. Del. Lead Case No. 07-11160). Jason M. Madron, Esq., Lee E. Kaufman, Esq., Mark D. Collins, Esq., Paul Noble Heath, Esq., Richards, Robert J. Stearn Jr., Esq., at Layton & Finger P.A., and Timothy P. Cairns, Pachulski Stang Ziehl & Jones represent the Debtors. The U.S. Trustee for Region 3 appointed an Official Committee of Unsecured Creditors in these cases. David B. Stratton, Esq., and Evelyn J. Meltzer, Esq., at Pepper Hamiltion LLP, represent the Committee. When the Debtors filed for protection from their creditors, they listed total assets of $362,000,000 and total debts of $342,000,000. RESOURCE REAL: Fitch Affirms 'B' $28.46 Million Notes Rating ------------------------------------------------------------ Fitch Ratings has affirmed all classes of notes to Resource Real Estate Funding CDO 2006-1 and assigned Rating Outlooks as outlined below: -- $129,370,000 class A-1 floating-rate at 'AAA'; Outlook Stable; -- $5,000,000 class A-2 FX fixed-rate at 'AAA'; Outlook Stable; -- $17,420,000 class A-2 FL floating-rate at 'AAA'; Outlook Stable; -- $6,900,000 class B floating-rate at 'AA'; Outlook Stable; -- $20,700,000 class C floating-rate at 'A+'; Outlook Stable; -- $15,520,000 class D floating-rate at 'A-'; Outlook Stable; -- $20,700,000 class E floating-rate at 'BBB+'; Outlook Stable; -- $19,830,000 class F floating-rate at 'BBB'; Outlook Stable; -- $17,250,000 class G floating-rate at 'BBB-'; Outlook Negative; -- $12,930,000 class H floating-rate at 'BBB-'; Outlook Negative; -- $14,660,000 class J fixed-rate at 'BB'; Outlook Negative; -- $28,460,000 class K fixed-rate at 'B'; Outlook Negative. Despite an increase in the Poolwide Expected Loss, Fitch has affirmed all classes as the pool has maintained an adequate PEL cushion of 11.75% The increase in PEL is due to the addition of four loans (21.8% of the pool) that carry a higher expected loss than those they replaced and the application of the interim surveillance model for commercial real estate structured securities. One loan, representing 4.8% of the pool, has defaulted and is expected to be removed from the pool imminently. The defaulted loan was excluded in the determination of PEL and, consistent with Fitch's modeling, no recovery is expected. The loss to par balance is mitigated by the CDO's purchase of other collateral at a discount, increasing the par balance of the CDO by approximately 0.6% on a net effective basis. While the credit quality of the rated securities is consistent with the last review, the application of the interim surveillance has contributed to the overall increase in the PEL. Classes G through K have been assigned negative outlooks due to the failure of Fitch's stress testing scenarios. The outlooks reflect the likely direction of any rating changes over the next one to two years. The deal was reviewed because of the defaulted asset and since over 15% of the portfolio has turned over since Fitch's last review. Fitch began assigning outlooks to structured finance ratings in September 2008. For CREL CDOs, a Negative Outlook may be assigned to any class that fails Fitch's stress testing. Fitch's stress testing assumes various property value declines for each rating stress. Based on these results, any loan whose loan-to-value ratio is greater than 100% is assumed to default with the recovery calculated based on the property value in that rating stress. In addition, Fitch may assign a Negative Outlook to classes within CDOs with below average PEL cushion. RITE AID: S&P Cuts $500MM & $470MM Second-Lien Notes to 'B-' ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on Harrisburg, Pennsylvania-based Rite Aid Corp., including its corporate credit rating to 'B-' from 'B'. S&P also lowered the issue ratings on the company's $1.105 billion tranche 2 and $350 million tranche 3 term loans to 'B+' from 'BB-'. The recovery ratings on the loans remain at '1', indicating S&P's expectation for very high recovery in the event of a payment default. In addition, S&P lowered the ratings on the $500 million and $470 million second-lien notes to 'B-' from 'B+' and revised the recovery ratings on the notes to '3' from '2', indicating S&P's expectation for meaningful recovery in the event of a payment default. The outlook is negative. "The downgrade reflects Rite Aid's slower-than-expected progress in turning around the operating performance at its acquired Eckerd stores," said Standard & Poor's credit analyst Ana Lai, "and a weakening U.S. economy which could dampen demand for prescriptions and front-end merchandise." Another factor is Standard & Poor's expectation that cash flow protection measures will remain thin given the challenging operating environment. SPANISH BROADCASTING: S&P Junks Corp. Credit Rating; Outlook Neg. ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Miami, Florida-based radio and television broadcaster Spanish Broadcasting System Inc. to 'CCC+' from 'B-'. The rating outlook is negative. At the same time, S&P lowered the issue-level rating on SBS's $350 million senior secured credit facilities to 'CCC+' from 'B-'. The recovery rating on this debt remains unchanged at '4', indicating S&P expectation of average recovery in the event of a payment default. The credit facility consists of a $325 million term loan due 2012 and a $25 million revolving credit facility due 2010. In addition, S&P lowered its rating on the company's preferred stock to 'CCC-' from 'CCC'. "The ratings downgrade is based on our continued liquidity concerns regarding cash depletion, which are further heightened by the company's inability to draw down fully on its $25 million revolving credit facility," explained Standard & Poor's credit analyst Michael Altberg. Approximately 40% of the facility, or $10 million, was committed by Lehman Commercial Paper Inc., which failed to fund its portion on Oct. 3, 2008. SBS requested to draw down fully on its revolving credit facility, in part to repay its $18.5 million maturity in January 2009. SBS owns and operates 21 radio stations in markets that reach roughly 48% of the U.S. Hispanic population. In March 2006, the company launched a television station, Mega TV, which accounted for about 6% of revenue in 2007, and entailed meaningful start-up losses. The company has significant revenue concentration in three markets--New York, Los Angeles, and Miami--which account for 70% of revenue in total. For the second quarter of 2008, revenue and EBITDA declined 5.6% and 31%, respectively. Radio revenue and EBITDA declined 9.0% and 8.9%, respectively, due to weaknesses in local advertising across several major markets, such as Miami, Los Angeles, New York, and Chicago. In addition, the company recorded a $379.4 million noncash impairment charge on the value of its FCC radio broadcast licenses, following a succession of data indicating declining fundamentals. SPRINT NEXTEL: Accounting Officer Gregoire Discloses Equity Stake ----------------------------------------------------------------- Christopher Gregoire disclosed in a Securities and Exchange Commission filing that he may be deemed to beneficially own 58,892 shares of Sprint Nextel Corporation's common stock. He also has non-qualified stock option to buy: -- 30,242 shares of common stock at exercise price of $18.78 until Feb. 27, 2017, -- 19,251 shares of common stock at exercise price of $6.52 until March 26, 2018, -- 10,737 shares of common stock at exercise price of $17.25 until Aug. 7, 2018, Sprint Nextel appointed Mr. Gregoire as Vice President and Principal Accounting Officer effective Oct. 2, 2008. Mr. Gregoire served as Vice President and Assistant Controller of Sprint Nextel from August 2006 through Oct. 2, 2008. Prior to joining Sprint Nextel, Mr. Gregoire served as a Partner at Deloitte from August 2003 through July 2006 and as a Senior Manager at Deloitte from 2000. About Sprint Nextel Sprint Nextel Corp. -- http://www.sprint.com/-- offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint Nextel is widely recognized for developing, engineering and deploying innovative technologies, including two robust wireless networks serving about 54 million customers at the end of the fourth quarter 2007; industry-leading mobile data services; instant national and international walkie- talkie capabilities; and a global Tier 1 Internet backbone. * * * The Troubled Company Reporter reported on Aug. 13, 2008, that DBRS assigned the Sprint Nextel Corporation proposed issuance of $3.0 billion of Cumulative Perpetual Convertible Preferred Shares a rating of BB. The trend is negative. STEVE AND BARRY: Balks Panel's Move to Access Insider Documents --------------------------------------------------------------- Steve and Barry's LLC, its debtor-affiliates and their former principals, Steven Shore and Barry Prevor, opposed the request filed by the Official Committee of Unsecured Creditors for the production of certain documents. Shai Y. Waisman, Esq., at Weil, Gotshal & Manges LLP, in New York, relates that the Committee negotiated directly with the Debtors' principals and unequivocally agreed to settle all claims and causes of action against the principals for $5,000,000. Moreover, the Committee not only negotiated the Settlement, but stood before the United States Bankruptcy Court for the Southern District of New York in support of the Settlement it had reached, he says. With respect to the Court's concern as to notice of the Settlement, the Committee agreed to bifurcate the Sale and the Settlement, and agreed to be a co- movant on a motion to approve the Settlement, which was to be promptly filed. "Rather than abide by its agreement or accept reasonable discovery that is likely to be conclusive evidence of the issues, the Committee now demands that all information it desires be provided -- including those demands that are likely to cost the Debtors over $500,000 and possibly as much as $1,000,000 to comply with -- at a time when these estates cannot afford such significant expenses," Mr. Waisman complains. At this point, these cases and estates can ill afford gamesmanship and litigation tactics. The Committee agreed to the Settlement and should abide by it, Mr. Waisman tells the Court. Kenneth H. Eckstein, Esq., at Kramer, Levin, Naftalis & Frankel LLP, in New York, counsel to Messrs. Shore and Prevor, contends that the Committee's request is an inaccurate pleading that obscures or entirely omits critical facts that render the relief it seeks inappropriate. Mr. Eckstein emphasizes that the central issue at this stage of the proceedings is not whether the Committee should be allowed to conduct a sweeping investigation, but rather if it should be required to honor the deal it negotiated and agreed to support on which the Former Principals, the Purchaser and the new investors relied. Committee Talks Back "That is not true," Cathy Hershcopf, Esq., at Cooley Godward Kronish LLP, in New York, said regarding the Debtors' contention that the Committee previously agreed to support the sale of the Insider Claims. The Committee -- faced with the choice of supporting a sale of the Debtors as a going concern, including a release of the Insider Claims, versus a liquidation of the Debtors' assets with no funds to pursue causes of action -- supported the going concern sale with a gun to its head, she says. She adds that the objections, at their essence, are nothing more than an attempt by the insiders to frustrate the Committee's investigative efforts by capitalizing on the undue leverage they inflicted on the Committee during the Sale process. "The foundation of any proper investigation, limited in scope or otherwise, are the emails and other informal communications that accompany a documented transaction. If the Committee were limited to reviewing the documents the Debtors and the Insiders want it to see, its hands would be tied to a story written by the transactional documents alone. The true story lies beneath those documents: in the emails and drafts that paint the larger picture of the transaction itself," Ms. Hershcopf points out. With respect to the suggested expense of responding to the Committee's document demand, Ms. Hershcopf says the suggested expense is highly inflated. The investigation is circumscribed to a discrete set of issues -- the TA Transaction, the Junior Participation and the Debtors' accounting methods, systems and calculations, she tells the Court. Moreover, the parties can agree on an electronic discovery protocol that keeps expenses below $500,000, she emphasizes. According to Ms. Hershcopf, the Debtors have absolutely no incentive to maximize the value of their estates or to investigate their affairs because they are not the ultimate beneficiaries of those actions. The Committee is the only actor in these bankruptcy proceedings with a real incentive to maximize the value of the Debtors' estate for the benefit of creditors, she says. Accordingly, the Committee asks the Court to overrule the objections. About Steve & Barry's Headquartered in Port Washington, New York, Steve and Barry's LLC -- http://www.steveandbarrys.com/-- is a national casual apparel retailer that offers high quality merchandise at low prices for men, women and children. Founded in 1985, the company operates 276 anchor and junior anchor shopping center and mall- based locations throughout the U.S. The discount clothing chain's brands include the BITTEN(TM) collection, the first-ever apparel line created by actress and global fashion icon Sarah Jessica Parker, and the STARBURY(TM) collection of athletic and lifestyle apparel and sneakers created with NBA (R) star Stephon Marbury. Steve & Barry's LLC, and 63 affiliates filed separate voluntary petitions under Chapter 11 on July 9, 2008 (Bankr. S.D. N.Y. Lead Case No. 08-12579). Lori R. Fife, Esq., and Shai Waisman, Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in their restructuring efforts. Diana G. Adams, United States Trustee for Region 2, has appointed seven members to the Official Committee of Unsecured Creditors in the Debtors' Chapter 11 cases. On Aug. 22, 2008, the Debtors obtained permission from the Court to sell substantially all of their assets for $168 million to a joint venture by Bay Harbour Management and York Capital, BHY S&B Holdings, LLC. Under the terms of the purchase agreement, majority of the Debtors' 276 stores will remain open. Pursuant to the Purchase Agreement, the Court authorized 51 Debtors to change their corporate names. Lead Debtor Steve & Barry's Manhattan LLC (Case No. 08-12579) has been changed to Stone Barn Manhattan LLC. Parent company Steve & Barry's LLC (Case No. 08-12615) is now known as Steel Bolt LLC. When the Debtors filed for bankruptcy, they listed $693,492,000 in total assets and $638,086,000 in total debts. (Steve and Barry's Bankruptcy News Issue No. 85; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SUPERIOR OFFSHORE: Seeks Until November 20 to File Ch.11 Plan ------------------------------------------------------------- Superior Offshore International, Inc. asks the United States Bankruptcy Court for the Southern District of Texas, Houston Division, to further extend its exclusive periods to: a) file a Chapter 11 plan until Nov. 20, 2008; and b) solicit acceptances of that plan until Jan. 21, 2009. A hearing is set for Oct. 20, 2008, at 11:00 a.m., to consider the Debtor's extension request. The hearing will take place at 515 Rusk Avenue, Courtroom 400 in Houston, Texas. The Debtor told the Court that it is in talks with its primary constituents regarding a plan structure as it liquidate its tangible assets and evaluate some of the estate's intangible properties. The Debtor's current deadline to file a plan is October 21, 2008. According to the Troubled Company Reporter on July 22, 2008, the Court authorized the Debtor to sell certain of its assets -- including Gulf Diver III and Gulf Diver VI, Superior Endeavor, and certain personal property -- to Infinity Investment Fund LLC for as much as $67,150,000, free of liens and interest. The Debtor will set aside $7,302,784 from the purchase price for certain disputed liens. Andre Blaauw, a tort maritime lien creditor, asserted on June 18, 2008, a $5,927,676 claim in the Debtor's Superior Endeavor. Mr. Blaauw argued that he is entitled to the same adequate protection of its lien as the maritime contract lien creditors -- including Goodcrane Corporation, L&L Oil, Cannata's Supermarket, Inc., Wilhelmsen Ships Service and William Jacob Management -- that the Debtor proposed to provide adequate protection by segregating up to $2,000,000 from the sale proceeds to cover their liens. About Superior Offshore Headquartered in Houston Texas, Superior Offshore International Inc. (Nasdaq: DEEP) -- http://www.superioroffshore.com/-- provides subsea construction and commercial diving services to the offshore oil and gas industry. The company's construction services include installation, upgrading and decommissioning of pipelines and production infrastructure. The company operates a fleet of seven service vessels and provides remotely operated vehicles and saturation diving systems for deepwater and harsh environment operations. Superior Offshore International, Inc., filed for bankruptcy protection on April 24, 2008 (Bankr. S.D. Tex. Case No. 08-32590). The Debtors listed total assets of $67,587,927 and total liabilities of $54,359,884 in its schedules. David Ronald Jones, Esq., and Joshua Walton Wolfshohl, Esq., at Porter & Hedges LLP, represent the Debtor. The U.S. Trustee for Region 7 appointed five creditors to serve on an Official Committee of Unsecured Creditors. Douglas S. Draper, Esq., at Heller Draper Hayden Patrick & Horn LLC, represents the Committee in this case. As reported in the Troubled Company Reporter on June 23, 2008, the Debtor's summary of schedules showed total assets of $67,587,927 and total debts of $54,359,884. TRIBUNE CO: Draws $250 Million of Revolving Credit Line ------------------------------------------------------- Shira Ovide at The Wall Street Journal reports that Tribune Co. said on Friday that it has drawn $250 million of a $750 million revolving credit line. Tribune said in a statement, "Like many businesses, we are strengthening our liquidity position in today's uncertain credit market." Analysts said that Tribune's move probably doesn't raise additional red flags about its financial standing, due to the uncertainty of financial markets, WSJ relates. WSJ quoted Fitch Ratings analyst Mike Simonton as saying, "In the current environment, we've seen other highly leveraged companies draw down [credit lines] to get more certainty and control over their liquidity position." According to WSJ, Tribune has a receding revenue and is being doubted on its ability to service its $13 billion debt load. WSJ states that Tribune's drawing on the the credit line also increases its interest costs. About Tribune Co. Chicago, Illinois-based Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. As reported in the Troubled Company Reporter on Aug. 27, 2008, Fitch Ratings downgraded Tribune Company's Issuer Default Rating to 'CCC' from 'B-'; senior guaranteed revolving credit facility to 'CCC/RR4' from 'B/RR3'; senior guaranteed term loan to 'CCC/RR4' from 'B/RR3'; senior unsecured bridge loan to 'CC/RR6' from 'CCC/RR6'; senior unsecured notes to 'CC/RR6' from 'CCC/RR6'; and subordinated exchangeable debentures due 2029 to 'CC/RR6' from 'CCC-/RR6'. Fitch said that about $13.4 billion of debt is affected by this action and that the rating outlook is negative. As of March 30, 2008, Tribune's balance sheet indicates that the company has $12.9 billion in assets, $14.6 billion in debts, and $1.7 billion in total shareholders' deficit. TROPICANA ENT: Seeks to Regain Control of Atlantic City Assets -------------------------------------------------------------- Tropicana Entertainment LLC and its affiliates are working on regaining control of Tropicana Casino and Resort of Atlantic City. Retired Supreme Court Justice Gary Stein, the casino's state- appointed conservator, has chosen The Cordish Company as lead bidder for the Tropicana Atlantic City. Cordish has offered $700,000,000 in cash and notes, or $575,000,000 in cash, for the Tropicana Atlantic City. Tropicana Entertainment asserts that the casino is worth at least $950,000,000. Tropicana Entertainment Chief Executive Officer Scott C. Butera told the Associated Press that "the company hopes to convince state regulators it has purged the elements they found unsuitable to run a casino, including Kentucky-based Columbia Sussex Corp. owner William Yung III." "We are essentially a new company. We have the financial and managerial resources to come in and turn this thing around," pressofatlanticcity.com quoted Mr. Butera as saying. However, if the bid to regain the Tropicana Atlantic City fails, Mr. Butera said other alternatives include making an offer for a struggling casino or to build one from scratch on vacant land, including the former Bader Field airport site, Associated Press reported. "We're looking to get back the Tropicana Atlantic City, but if it doesn't work out, all those things would be things we would be looking at. . . . We like this market and we really want to be here," Mr. Butera said. New Jersey Supreme Court To Hear Appeal on License Decision In an order signed by Chief Justice Stuart Rabner, the New Jersey Supreme Court has agreed to hear the appeal of Tropicana Casino and Resort to regain its license, PAC stated in a separate report. No hearing has been scheduled yet. TCR argued in its appeal that the New Jersey Commission "abused its power and misinterpreted its own regulations in revoking the license," PAC noted. As previously reported, the New Jersey Appellate Division agreed with the New Jersey Commission's decision to revoke the license. About Tropicana 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. 19; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENT: Steering Panels Supports DIP Facility Amendment -------------------------------------------------------------- The Steering Committee of Lenders under a January 3, 2007 credit agreement among Tropicana Entertainment LLC and its debtor- affiliates, the Lenders, and Credit Suisse, as administrative agent and collateral agent, relates that it does not oppose the Debtors' request for an amendment of the DIP Facility to increase borrowing limit to $80 million. The Lenders Steering Committee, however, is concerned that certain of the Debtors' statements in the DIP Amendment Motion, in other recent filings, and some press releases create a false impression as to the status of the Debtors' Chapter 11 cases and as to the context within which they are seeking to amend and increase their existing DIP financing facility. On behalf of the Lenders Steering Committee, Michael R. Lastowski, Esq., at Duane Morris LLP, in Wilmington, Delaware, argues that certain of the Debtors' actions call into question their ability to accurately predict their performance over any period longer than the next two or three months, and to establish financial covenants that will be realistic and achievable over the 11-month period they cover. He contends that, among other things: (a) Any projections that the Debtors may be using today to set financial covenants are inherently unreliable given the sales processes that are underway for two of their most significant assets. The outcome of the sales processes, both expected to conclude within the next few months, will dramatically affect the Debtors' ability to satisfy the new financial covenants that are the subject of the DIP Amendment Motion. (b) The Debtors' actions with respect to the Tropicana Casino and Resort of Atlantic City may have a materially negative impact on them, their estates and stakeholders, and in particular on the Lenders and their collateral. The Debtors are taking actions that have a potential long-term consequences for the estates, yet are doing so without a long-term business plan that would justify the goal that they are seeking to achieve. (c) The Debtors' opposition to the sale process of Tropicana Atlantic City could discourage potential bidders from incurring the costs necessary to compete for the casino. At best, the Debtors' actions will "chill" the bidding for the casino, resulting in a lower price for those assets. At worst, the Debtors' actions will disrupt the sales process completely, preventing a sale while the market continues to deteriorate. "The result would be paralysis -- the Debtors would be unable to progress towards a reorganization while values deteriorate and professional fees and other restructuring costs mount," Mr. Lastowski says. Moreover, the Lenders Steering Committee relates that it was not provided with a copy of the Debtors' proposed framework for a Chapter 11 joint plan of reorganization. The Lenders Steering Committee opposes the fundamental premises of the Plan Framework, which contemplates the retention of the Tropicana Atlantic City. Responses to Steering Committee's Statement; Support for Reconveyance of Atlantic City Assets The Official Committee of Unsecured Creditors, and Harbinger Capital Partners Special Situations Fund L.P. and Harbinger Capital Partners Master Fund I, Ltd., each submitted their response to the Lenders Steering Committee's Statement. The Creditors Committee points out that the OpCo Lenders' Statement takes no position on the relief requested in the DIP Amendment Motion and that it relates to, among other things, the pending sales process with respect to the Tropicana Atlantic City. The Creditors Committee and Harbinger believe that the Statement is a means to influence the New Jersey regulators with respect to the Tropicana Altantic City sale. "[The Lenders Steering Committee's Statement's] transparent purpose is not with respect to the matter before the [United States Bankruptcy court for the District of Delaware], but rather an attempt to influence the Court and interested regulatory bodies with respect to matters that will arise in these cases within the next few months," Thomas F. Driscoll III, Esq., at Morris, Nichols, Arsht & Tunnell LLP, in Wilmington, Delaware, on behalf of the Creditors Committee, contends. Similarly, James C. Carignan, Esq., at Pepper Hamilton LLP, in Wilmington, Delaware, on behalf of Harbinger, asserts that the Lenders Steering Committee's Statement is "a thinly veiled propaganda piece primarily directed to New Jersey regulators, in furtherance of the [Lenders'] agenda to frustrate the Debtors' efforts to regain ownership and control of the Tropicana Casino and Resort in Atlantic City. . . the Debtors' former 'crown jewel' asset." The Creditors Committee and Harbinger say they support and believe that the Debtors' efforts to take back Tropicana Atlantic City are critical in maximizing the value of the Debtors' estates. Mr. Driscoll insists that the OpCo Lenders Steering Committee will have an opportunity to be heard on broader issues concerning the Debtors and their estates at a future date. Mr. Driscoll adds that nowhere in the Statement does the OpCo Lenders Steering Committee suggest that their collateral will diminish in value as a result of the DIP Amendment, nor does the Steering Committee dispute that they are adequately protected. Moreover, the Creditors Committee has learned that the DIP Lender, one of the largest holders of the OpCo bank debt, refused to further extend the DIP forbearance agreement with the Debtors until the time the business plan would be completed, leaving the Debtors with little room to maneuver, Mr. Driscoll points out. The Lenders Steering Committee has asserted that the Debtors' efforts to regain ownership and control of the Tropicana Atlantic City will chill the bidding. The notion that there is serious bidding, or even a legitimate sale process, for the Tropicana Atlantic City is "illusionary," Harbinger counsel Mr. Carignan says. Mr. Carignan notes that under Justice Stein's control, Tropicana Atlantic City's EBITDA on a percentage basis has fallen more than three times as much as the rest of the market and its net revenue has fallen more than five times as much as the rest of the market. "These horrendous results likely further depressed bidding and interest in bidding. They also underscore the need to return the property to the Debtors so that their management team can rehabilitate its operations as part of the overall restructuring of the Debtors' assets, and restore performance to proper levels," he states. Committee counsel Mr. Driscoll relates that the Debtors and the Creditors Committee are mutually motivated to see the Tropicana Atlantic City thrive and prosper over the long term, which is in the best interests of creditors and stakeholders. The reconveyance of the Atlantic City Assets would allow the assets to fall under the managerial control of Tropicana Entertainment LLC Chief Executive Officer Scott C. Butera and his qualified management team, and enable the Debtors to decide the approach best-suited to maximize value, Mr. Driscoll asserts. Mr. Driscoll notes that the OpCo Lenders Steering Committee, on the other hand, clearly favors a quick exit by way of a fire sale of the Debtors' assets and businesses that might satisfy the claims of the secured lenders, but few others. "That approach might maximize the lenders' objectives, but with no regard for what is in the best interests of the Debtors, the Debtors' employees, Atlantic City and other creditors," he tells the Court. Lazard Freres Supports DIP Amendment In a separate filing, Suneel Mandava, a director at Lazard Freres & Company LLC, the Debtors' financial advisors, relates that the Debtors' former management developed the original DIP Budget using a top-down forecasting methodology based on historical operating earnings, rather than preparing a detailed bottoms-up monthly build-up. Mr. Mandava notes that the Original DIP Budget did not adequately take into account changes in competition, deterioration in consumer markets, other factual conditions affecting the gaming industry, and the impact of the Chapter 11 filing on the Debtors' operations. As a result, the Debtors have reported actual results well below what was originally forecasted and expect to continue to do so, increasing their liquidity needs going forward relative to the original DIP forecast, he tells the Court. The Debtors' new management, working with the Debtors' restructuring advisors, AlixPartners, LLP, and Lazard Freres, have formulated a new budget. Mr. Mandava says that the Debtors' budgeting methodology and approach has been greatly improved and will continue to improve going forward, now that additional managers are in place to develop specific forecasts for each property. Mr. Mandava adds that during the negotiation of the amended DIP Credit Agreement, the Debtors exercised their option to replace two of the financial institutions in the existing syndicate that were unwilling to amend the DIP Credit Agreement to address their needs. Mr. Mandava believes that the fees under the renegotiated and amended DIP Credit Agreement are reasonable, taking into consideration the current operating environment for gaming companies, the unprecedented tightening in the lending markets, and the scarcity of DIP financing; and are consistent with the expectations of lenders negotiating similar agreements at this time. About Tropicana 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. 19; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENT: Gets Go-Signal to Enter Into Amended DIP Facility ---------------------------------------------------------------- Judge Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware permitted Tropicana Entertainment LLC and its debtor- affiliates to enter into a Second DIP Facility Amendments as agreed with their DIP Lenders. The Debtors, their Lenders, and Credit Suisse, as administrative agent and collateral agent, agreed to modify the DIP Facility to increase borrowing limit to $80 million. Among others, under the Amended DIP Credit Agreement, the unused commitments of the DIP Lenders is increased from $47 million to $60 million, which is broken down as: Lender Term Loan Commitment Pro Rata ------ -------------------- -------- SPCP Group, LLC $4,477,611 7.462687% SPF CDO I, Ltd. 55,522,388 92.537313% The Debtors have drawn $20 million from the original DIP Loan Commitments as of September 2008. With the Court-approved increase of the unused lender commitments to $60 million under the Second Amended DIP Credit Agreement, the total DIP Lender Commitments now total $80 million. The DIP Amendments also include a waiver of EBITDA covenant default, an amended EBITDA Covenant, amended Capital Expenditures Amounts, an increase in the mandatory loan draw, an adjusted interest rate on the DIP Loan, and covenant compliance within 20% of the budget. The Debtors are also authorized to pay the Amendment Fees and all other amounts required to be paid in connection with the implementation of the DIP Amendment, which include: -- a 4% fee on the additional $13,000,000 "new money;" and -- a 3% fee on any unused availability under the DIP Credit Agreement. The OpCo Lenders are deemed to be adequately protected following the Debtors' entry into the DIP Amendment, the Court rules. Except as otherwise specifically provided in the DIP Amendment Order, the Final DIP Order will remain in full force and effect, and the Prepetition Lenders, the DIP Lenders, and the OpCo Lenders will be entitled to all of the rights and protections provided. All references to the DIP Credit Agreement in the Final DIP Order will be deemed references to the Amended DIP Credit Agreement. About Tropicana 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. 19; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) TWEETER HOME: Court Extends Exclusive Period Until December 2 ------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware extended until December 2, 2008, the exclusive right of Tweeter Home Entertainment Group Inc. and its debtor affiliates to file plan of reorganization. The Debtors are also given until February 2, 2009, to solicit acceptances of that plan. The Court entered its ruling after Sarah E. Pierce, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, notified the Court that she received no formal or informal objections or responses to the Debtors' extension request. About Tweeter Home Based in Canton, Mass., Tweeter Home Entertainment Group Inc. -- http://www.tweeter.com/-- retails mid-to high-end audio and video consumer electronics products. Tweeter and seven of its affiliates filed for chapter 11 Protection on June 11, 2007 (Bankr. D. Del. Case Nos. 07-10787 through 07-10796). Gregg M. Galardi, Esq., Mark L. Desgrosseilliers, Esq., and Sarah E. Pierce, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represent the Debtors. Kurtzman Carson Consultants LLC acts as the Debtors' claims and noticing agent. Bruce Grohsgal, Esq., William P. Weintraub, Esq., and Rachel Lowy Werkheiser, Esq., at Pachulski Stang Ziehl & Jones LLP; and Scott L. Hazan, Esq., Lorenzo Marinuzzi, Esq., and Todd M. Goren, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represent the Official Committee of Unsecured Creditors. As of Dec. 21, 2006, Tweeter had total assets of $258,573,353 and total debts of $190,417,285. The Debtors exclusive period to file a plan of reorganization expired on June 5, 2008. (Tweeter Bankruptcy News, Issue No. 25, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). TWEETER HOME: Seeks Until April 29, 2009 to Remove Actions ---------------------------------------------------------- Tweeter Home Entertainment Group Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware to extend the Removal Period with respect to any actions they are a party to pending on the Petition Date through the later of: (a) April 29, 2009; or (b) 30 days after the entry of an order terminating the automatic stay with respect to any particular action sought to be removed. Pursuant to Rule 9027(a)(2) of the Federal Rules of the Bankruptcy Procedure, the current period during which the Debtors may remove actions expires on the later of October 31, 2008, or 30 days after the entry of an order terminating the automatic stay with respect to any particular action sought to be removed. The Debtors relate that they are parties to numerous judicial and administrative proceedings currently pending in various courts and administrative agencies. Specifically, the Debtors note, the Actions include discrimination, workers' compensation, and product liability claims. The Debtors tell the Court that they have not completed the review of the Actions because they have been focused primarily on finalizing a proposed plan of liquidation following the closing of the sale of substantially all of their assets to Tweeter Newco, LLC; determining their remaining assets and liabilities; and fulfilling their obligations as debtors-in-possession. The Debtors note that their adversaries may not prosecute the Actions absent relief from the automatic stay and therefore, insists that those adversaries will not be prejudiced by the extension of the Removal Period. About Tweeter Home Based in Canton, Mass., Tweeter Home Entertainment Group Inc. -- http://www.tweeter.com/-- retails mid-to high-end audio and video consumer electronics products. Tweeter and seven of its affiliates filed for chapter 11 Protection on June 11, 2007 (Bankr. D. Del. Case Nos. 07-10787 through 07-10796). Gregg M. Galardi, Esq., Mark L. Desgrosseilliers, Esq., and Sarah E. Pierce, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represent the Debtors. Kurtzman Carson Consultants LLC acts as the Debtors' claims and noticing agent. Bruce Grohsgal, Esq., William P. Weintraub, Esq., and Rachel Lowy Werkheiser, Esq., at Pachulski Stang Ziehl & Jones LLP; and Scott L. Hazan, Esq., Lorenzo Marinuzzi, Esq., and Todd M. Goren, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represent the Official Committee of Unsecured Creditors. As of Dec. 21, 2006, Tweeter had total assets of $258,573,353 and total debts of $190,417,285. The Debtors exclusive period to file a plan of reorganization expired on June 5, 2008. (Tweeter Bankruptcy News, Issue No. 25, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). US ENERGY: Has Until December 5 to Solicit Acceptances of Plan -------------------------------------------------------------- The Hon. Robert D. Drain of the United States Bankruptcy Court for the Southern District of New York further extended the exclusive period of U.S. Energy Systems, Inc., and its debtor-affiliates to solicit acceptances of their Chapter 11 plan until Dec. 5, 2008. According to the Troubled Company Reporter on Oct. 7, 2008, the Debtors' chief executive officer Richard J. Augustine said the Debtors filed on Aug. 22, 2008, separate Chapter 11 plans for U.S. Energy Overseas Investments LLC and GBGH LLC. The Debtors submitted to the Court a joint liquidating plan for USEO and a plan of reorganization for GBGH, Mr. Augustine says. According to Bloomberg News, explanatory disclosure statements have not been filed. Under the USEO plan, a liquidation trust will be formed and any remaining assets -- including any proceeds from USEY's sale of 100% of the common stock of USEB and any residual ownership interest in GBGH -- will be transferred into the trust for liquidation and the subsequent distribution of net liquidation proceeds to USEY equity holders. The GBGH plan provides for, among other things (i) the restructuring of GBGH's first lien debt through issuance of a restructure first lien note, (ii) the execution of a rights offering for the raising of at least US$10 million of new equity in GBGH, and (iii) the issuance of new warrants convertible into equity interests in GBGH at to be established strike prices. The Debtors say that they do not have sufficient time to (i) make final amendments to the Chapter 11 plans before the solicitation process expires on Oct. 22, 2008, and (ii) obtain approval of disclosure statements regarding the Chapter 11 plans. U.K. Plant Shutdown On Aug. 23, 2008, the Knapton Plant, a 42MW natural gas-fired electricity generating plant in the United Kingdom, was shut down to perform scheduled maintenance and gas flows from the plant were as well shut down in order to preserve gas reserves. Upon the completion of the scheduled maintenance work five days later, attempts to restart the gas flows from the plan failed. Ground water that overtook the natural gas in the plant's reservoir was blamed for the malfunction. As a result, the inability to obtain gas production, electricity production at the plant has been reduced to two to four hours per day. This will remain the case until new wells are drilled. The current business plan includes the drilling of new wells in early 2009. According to the Debtors, these operational difficulties have changed the short-term economics of the Chapter 11 Plans and required additional time on the part of potential equity investors to consider amendments to the Chapter 11 Plans, which the Debtors are in the midst of negotiating. A full-text copy U.S. Energy and U.S. Energy Overseas' Chapter 11 plan is available for free at http://ResearchArchives.com/t/s?3162 A full-text copy of GBGH's Chapter 11 plan is available for free at http://ResearchArchives.com/t/s?3163 About U.S. Energy Based in Avon, Connecticut, U.S. Energy Systems, Inc., (Pink Sheets: USEY) -- http://www.usenergysystems.com/-- owns green power and clean energy and resources. USEY owns and operates energy projects in the United States and United Kingdom that generate electricity, thermal energy and gas production. The company filed for Chapter 11 protection on Jan. 9, 2008 (Bank. S.D. N.Y. Case No. 08-10054). Subsequently, 34 affiliates filed separate Chapter 11 petitions. Peter S. Partee, Esq., at Hunton & Williams LLP, represents the Debtor in its restructuring efforts. Jefferies & Company, Inc., serves as the company's financial advisor. The Debtor selected Epiq Bankruptcy Solutions LLC as noticing, claims and balloting agent. The Official Committee of Unsecured Creditors has yet to be appointed in these cases by the U.S. Trustee for Region 2. When the Debtors filed for protection from their creditors, they listed total assets of $258,200,000 and total debts of $175,300,000. VESTA INSURANCE: Haskell, et al., Seek Dismissal of Trustee Action ------------------------------------------------------------------ In briefs filed with the U.S. Bankruptcy Court for the Northern District of Alabama, Southern Division, Wyatt R. Haskell and William K. Holbrook ask the Court to dismiss the adversary proceeding filed by Lloyd T. Whitaker, Plan Trustee for Vesta Insurance Group, Inc., seeking a declaratory judgment prohibiting the prosecution of a state court action filed by Messrs. Haskell and Holbrook before the Circuit Court of Jefferson County. The State Court Action, commenced in May 2008, filed against Vesta directors and officers -- Norman W. Gayle, III, James E. Tait, Hopson B. Nance, W. Perry Cronin, E. Murray Meadows, John C. Hines, David W. Lacefield, Thomas J. Chana and Thomas E. Mangold -- to recover damages allegedly caused by the dissemination of false and misleading financial information by Vesta with respect to its insurance subsidiaries. The State Court Action was removed to the District Court for the Northern District of Alabama the next month. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, in Birmingham, Alabama, Messrs. Haskell and Holbrook's counsel, argues that the State Court Action does not bring claims against Vesta or the assets of its bankrupt estate. The State Court Action, he adds, merely seek State Court claims against, and hold personally liable, the Vesta D&Os who are not in bankruptcy. Thus, the automatic stay imposed by Vesta's bankruptcy filing does not apply. Mr. Williams clarifies that Messrs. Haskell and Holbrook have not sued -- nor sought to levy on -- any D&O insurance policy, which advances the defense expenses of Vesta D&Os who are involved in separate lawsuits and adversary proceedings. Moreover, the proceeds of the D&O Policies are not the property of Vesta's estate, he asserts. Thus, Messrs. Haskell and Holbrook argue that the Bankruptcy Court does not have jurisdiction to hear the Vesta Plan Trustee's Complaint. Plan Trustee Reacts The Vesta Plan Trustee insists that the Adversary Proceeding should not be dismissed. Colin M. Bernardino, Esq., at Kilpatrick Stockton LLP, in Atlanta, Georgia, the Plan Trustee's counsel, argues that the State Court Action has "an identity of interest" with Vesta with respect to the claims asserted in the Action, and is therefore related to Vesta's Chapter 11 case. He thus maintain that, logically, the Bankruptcy Court has jurisdiction over the Adversary Proceeding. Mr. Bernardino asserts that when litigation is instituted against former Vesta D&Os based on alleged acts or omissions, and their expenses of defending the litigation are advanced by the D&O insurer, the D&O Policies are diminished in value because defense expenses erode the policy limits. Accordingly, the Bankruptcy Court has, and should exercise, the power to prevent diminution in value of property of the estate, Mr. Bernardino explains. District Court Remands State Court Action At the behest of Messrs. Haskell and Holbrook, District Judge William M. Acker, Jr., remands the State Court Action back to the Circuit Court of Jefferson County, Alabama, after finding that the State Court Action "could have no conceivable effect on, and could cause no diminution in, the Vesta bankruptcy estate." Judge Acker rules that the State Court Action and Messrs. Haskell and Holbrook's request for remand constitute their "absolute waiver of any right to collect any judgment that may be entered in their favor or against the Defendants, or any of them, from the D&O insurers, unless all insurance proceeds are fully made available to Vesta and its creditors, even to the point of exhaustion." Parties File Supplemental Briefs The Plan Trustee and Messrs. Haskell and Holbrook filed supplemental briefs, at the Bankruptcy Court's directive, to address the effect, if any, of the District Court's ruling to their pending requests with the Bankruptcy Court. Messrs. Haskell and Holbrook insist that the Claims pursued in the State Court Action do not belong to the Vesta Plan Trustee. They assert that as Vesta is a liquidating company, the Stay -- which the Plan Trustee wanted to impose upon the State Court Action -- is inapplicable. Moreover, Messrs. Haskell and Holbrook point out, that, among other things: -- they have brought no action to obtain any lien, judgment, injunction or relief as to the Policy and the proceeds, or obligations of the insurers; and -- they are asserting separate claims against the former D&Os than those asserted by the Plan Trustee. Judge Acker's finding that Messrs. Haskell and Holbrook's waiving of their right to collect judgment from the D&O insurers has no effect on the pending Complaint before the Bankruptcy Court, Mr. William says. The Vesta Plan Trustee asserts that neither claim preclusion nor issue preclusion is implicated in the Adversary Proceeding as a consequence of the issuance of the Remand Order. "The relationship between the Plan Trustee and the State Court Action Defendants is strictly an adversarial one, and there was no collusion between [the parties] with respect to the Removal of the [Action]," the Vesta Plan Trustee says. Whether or not the prosecution of the State Court Action contravenes the Plan Injunction and the Confirmation Order, the Bankruptcy Court has jurisdiction over the Adversary Proceeding because it pertains to the implementation, consummation, execution and administration of Vesta's Plan of Liquidation, the Vesta Plan Trustee asserts. The Claims asserted in the State Court Action may appear to be claims for direct injury to the Defendants, the Vesta Plan Trustee avers. In reality, the Plan Trustee points out, the Claims constitute in large measure, derivative claims under the laws of the state of Delaware, which governs Vesta. The Plan Trustee clarifies that no effort is being made in the Adversary Proceeding to override the interest of former officers or directors as Insured Persons under the D&O Policies. The Proceeding does not offend the priority of payments provision under the Policies, he attests. Bankruptcy Court Sets Deadlines and Time Frames Pursuant to Rule 7016 of the Federal Rules of Bankruptcy Procedure, the Bankruptcy Court sets this time frame: Discovery -- October 14, 2008 Dispositive Motion Deadline -- October 28, 2008 Deadline to File Replies -- November 12, 2008 Witness and Exhibits List -- November 19, 2008 Pretrial Briefs -- November 19, 2008 Trial Date -- December 3, 2008 Failure to comply with the time frames and requirements may result in, among others, the dismissal of claims and causes of action, barring of introduction of evidence at trial or in support of pre-trial requests, and monetary sanctions, Judge Bennett rules. Headquartered in Birmingham, Alabama, Vesta Insurance Group, Inc. (Other OTC: VTAI.PK) -- http://www.vesta.com/-- is a holding company for a group of insurance companies that primarily offer property insurance in targeted states. Wyatt R. Haskell, Luther S. Pate, UV, and Costa Brava Partnership III, L.P., filed an involuntary chapter 7 petition against the company on July 18, 2006 (Bankr. N.D. Ala. Case No. 06-02517). The case was converted to a voluntary chapter 11 case on Aug. 8, 2006 (Bankr. N.D. Ala. Case No. 06-02517). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represents the Debtor. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, represents the petitioning creditors. In its schedules of assets and liabilities, Vesta listed $14,919,938 in total assets and $214,278,847 in total liabilities. J. Gordon Gaines Inc. is a Vesta Insurance-owned unit that manages the company's numerous insurance subsidiaries and employs the headquarters workers. The company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. N.D. Ala. Case No. 06-02808). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represent the Debtor in its restructuring efforts. In its schedules of assets and liabilities, Gaines listed $19,818,094 in total assets and $16,046,237 in total liabilities. On Aug. 1, 2006, the District Court of Travis County, Texas entered an order appointing the Texas Commissioner of Insurance as Liquidator of Vesta Insurance's Texas-domiciled subsidiaries: Vesta Fire Insurance Corporation; The Shelby Insurance Company; Shelby Casualty Insurance Corporation; Texas Select Lloyds Insurance Company; and Select Insurance Services, Inc. Florida Select Insurance Agency Inc., an affiliate, filed for chapter 11 protection on April 24, 2007 (Bankr. N.D. Ala. Case No. 07-01849). Rufus Dorsey, IV, Esq., at Parker Hudson Rainer & Dobbs LLP, represents Florida Select. The Court confirmed FSIA's plan on March 24, 2008. (Vesta Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) VONAGE HOLDINGS: Extends Expiration Date of Tender Offer to Nov. 3 ------------------------------------------------------------------ Vonage Holdings Corp. is extending the expiration date of its previously announced offer to purchase for cash any and all of its outstanding 5% Senior Unsecured Convertible Notes due 2010. As amended, the offer will now expire at noon, New York City time, on Nov. 3, 2008, unless further extended or earlier terminated. Vonage is now confident that the offer will expire and the Notes validly tendered and not properly withdrawn will be accepted for payment promptly after the stockholders meeting scheduled for Nov. 3, 2008. Tenders of Notes must be made on or prior to the expiration of the offer, and Notes may be withdrawn at any time on or prior to the time the Notes validly tendered are accepted for payment. As of 5:00 p.m., New York City time on Oct. 15, 2008, $253.26 million aggregate principal amount of Notes have been validly tendered and not properly withdrawn. Miller Buckfire & Co., LLC is acting as Dealer Manager and D.F. King & Co., Inc. is acting as the Information Agent in connection with the offer. American Stock Transfer & Trust Company, LLC is the Depositary for the offer. For any questions concerning the offer or for copies of the documents related to the offer contact D.F. King & Co., Inc. by calling (212) 269-5550 (for banks and brokers) or 1-888-628-9011 (all others toll free). About Vonage Holdings Corp. Headquartered in Holmdel, New Jersey, Vonage Holdings Corp. (NYSE:VG) -- http://www.vonage.com/-- provides broadband telephone services with nearly 2.6 million subscriber lines. The company's Residential Premium Unlimited and Small Business Unlimited calling plans offer consumers unlimited local and long distance calling, and features like call waiting, call forwarding and voicemail for a flat monthly rate. Vonage's service is sold on the web and through national retailers including Best Buy, Circuit City, Wal-Mart Stores Inc. and Target and is available to customers in the U.S., Canada and the United Kingdom. Going Concern Doubt BDO Seidman, LLP, in Woodbridge, New Jersey, raised substantial doubt as to Vonage Holdings Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years Dec. 31, 2007, and 2006. Vonage Holdings's balance sheet at June 30, 2008, showed $466.1 million in total assets and $551.9 million in total liabilities, resulting in an $85.8 million stockholders' deficit. WASHINGTON MUTUAL: Taps Weil Gotshal as Lead Bankruptcy Counsel --------------------------------------------------------------- Washington Mutual, Inc., and WMI Investment Corp., seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Weil, Gotshal & Manges LLP, as counsel in their Chapter 11 cases. The Debtors have selected Weil Gotshal as their counsel because of the firm's knowledge of the Debtors' business and financial affairs. Moreover, the Debtors note, the firm has an extensive general experience and knowledge and is recognized for its expertise in Chapter 11 reorganizations. In addition, Weil Gotshal has represented the Debtors prior to the Petition Date, with respect to seeking alternatives for refinancing and the preparation for the Chapter 11 cases. Accordingly, the Debtors point out, Weil Gotshal has the necessary background to deal effectively with the potential legal issues and problems that may arise in the context of their Chapter 11 cases. As the Debtors' counsel, Weil Gotshal is contemplated to: (a) take all necessary action to protect and preserve the Debtors' estates, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes, and the preparation of objections to claims filed against the Debtors� estates; (b) prepare on behalf of the Debtors, all necessary motions, applications and other documents in connection with the administration of the Debtors' estates; (c) take all necessary actions in connection with a Chapter 11 plan and disclosure statement; and (d) perform all other necessary legal services in connection with the prosecution of the Debtors' Chapter 11 cases. The Debtors disclose that they have filed an application to employ Richards, Layton & Finger, P.A., as their co-counsel. In this regard, Weil Gotshal will monitor carefully and coordinate with RLF and other professional retained by the Debtors, to clearly delineate their duties and prevent duplication of effort. Weil Gotshal will be paid for its services according to these hourly rates: Members and counsel $650 to $950 Associates $355 to $595 Paraprofessionals $155 to $290 Weil Gotshal will also seek reimbursement of reasonable out-of- pocket expenses it will incur. Prior to the Petition Date, Weil Gotshal received from the Debtors an aggregate of $950,000 for professional services performed and expenses incurred as advance payments to cover an estimate of charges for the period from September 16, 2008, through the Petition Date. As of the Petition Date, the fees and expenses incurred by Weil Gotshal approximated $700,000, resulting to a remaining credit balance of $200,000 in favor of the Debtors, for future professional services to be performed and expenses to be incurred. The $50,000 retainer, which the firm received on Richard Layton's behalf, has been forwarded to RLF. In an affidavit filed with the Court, Brian S. Rosen, Esq., a member of Weil Gotshal, disclosed that his firm does not have any connection with, or any interest adverse to, the Debtors, their creditors, or any other party-in-interest. Weil Gotshal is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, Mr. Rosen assures the Court. 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. (Washington Mutual Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) WASHINGTON MUTUAL: Taps Richards Layton as Bankruptcy Co-Counsel ---------------------------------------------------------------- Washington Mutual, Inc., and WMI Investment Corp., seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Richards, Layton & Finger P.A., as their co-counsel. The Debtors note that they are seeking a separate application to retain Weil, Gotshal & Manges LLP as their lead counsel. They add that due to the extensive legal services necessitated by their Chapter 11 cases, employing Richards Layton as co-counsel is appropriate. The Debtors believe that Richards Layton is well-qualified and able to represent them in the Chapter 11 cases, owing to the firm's extensive experience relating to the Debtors' and their creditors' rights and business. As co-counsel, Richards Layton is expected to render various services to the Debtors and: (a) advise the Debtors of their rights, powers and duties; (b) protect and preserve the Debtors' estates, through prosecuting actions on the Debtors' behalf; defending the Debtors of any actions commenced against them; negotiating disputes involving the Debtors; and preparing objections to claims filed against the Debtors' estates; and (c) prepare all necessary motions, applications and other documents in connection with the administration of the Debtors' estates. Richards Layton professionals will be paid according to these standard hourly rates: Mark D. Collins $610 Chun I. Jang $300 Lee E. Kaufman $275 Cathy Greer $185 Prior to the Petition Date, Richards Layton rendered legal services for the Debtors' benefit and received a $50,000 retainer fee. The Debtors propose that the Retainer paid to Richards Layton be treated as "evergreen retainer" to be held by the firm solely as security for unpaid expenses throughout the Debtors' cases, until Richards Layton expenses are paid by the Court's final order. Mark D. Collins, Esq., a director at Richards Layton, assured the Court that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Judge Mary Walrath will convene a hearing on October 30, 2008, to consider the Debtors' request. Responses or objections to the Application must be filed on or before October 23, absent which, the Court may approve the request without further notice or hearing. 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. (Washington Mutual Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) WASHINGTON MUTUAL: Wants to Hire KCC as Claims and Noticing Agent ----------------------------------------------------------------- Washington Mutual, Inc., and WMI Investment Corp., seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Kurtzman Carson Consultants as (i) their claims and noticing agent, pursuant to the terms of a services agreement, dated Oct. 8, 2008, and (ii) agent to the Bankruptcy Court for the administration of their Chapter 11 cases. The Debtors disclose that noticing, receiving, docketing and maintaining more than 200 creditors in their cases will be unduly time consuming for the Office of the Clerk of the Bankruptcy Court. KCC's efficient and economical methods will allow them to to handle the voluminous claims properly. Pursuant to the Services Agreement, Kurtzman Carson, as the Debtors' claims agent, will: (a) notify all potential creditors of the Chapter 11 cases, and of the first meeting of creditors pursuant to Section 341 of the Bankruptcy Code; (b) prepare and serve Court documents on behalf of the Debtors; (c) assist the Debtors in preparing their schedules of assets and liabilities, and statements of financial affairs, by listing, among other things, the Debtors' known creditors; (d) maintain a copy service from which parties may obtain copies of relevant documents relating to the Chapter 11 cases; (e) notify all potential creditors of the existence and amount of their claims as set forth in the Schedules; (f) furnish a form for the filing of claims, after approval of notice and form by the Court, and provide a notice of the Claims Bar Date; (g) file with the Clerk's office a copy of the Bar Date Notice; (h) docket all claims filed, and maintain the official claims register for the Debtors; (i) specify information relating to the claims in the Claims Register; (j) implement necessary security measures to ensure the completeness and integrity of the Claims Register; (k) relocate all of the actual claims filed with the Court, if necessary; (l) record all transfer of claims; (m) modify the Claims Register as the Court may direct; (n) turn over copies of the Claims Register to the Clerk's Office for review; (o) maintain official mailing list for each Debtor of all entities that have filed claims; (p) establish and maintain a case Web site with case information; (q) assist in the solicitation and calculation of votes, and distributions, as required for the confirmation and consummation of a Chapter 11 plan; and (i) submit an order dismissing Kurtzman Carson as the Court's outside agent, and terminating the services within 30 days prior to the closing of the WaMu's Chapter 11 cases. Among other things, Kurtzman Carson will be paid in accordance with its consulting services' hourly rates, as detailed in the KCC Fee Structure: Clerical $45 Project Specialist $80 Consultant $165 Senior Consultant $255 Senior Managing Consultant $295 Technology/Programming Consultant $145 In addition to the Hourly Fees, Kurtzman Carson will also be reimbursed for its necessary out-of-pocket expenses. Kurtzman Carson will receive a $100,000 retainer for services to be performed and expenses to be incurred upon the execution of the Services Agreement. Sheryl Betance, a director of KCC's Restructuring Services, assures the Court that her firm does not represent any interest adverse to the Debtors' estates. A hearing to consider approval of the Debtors' Application will be held on October 30, 2008. Objections, if any, must be filed no later than October 23. If no objections to the Application are timely filed, the Court may approve the request without further notice or hearing. 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. (Washington Mutual Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) WATERFORD LAKES: Case Summary & 10 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Waterford Lakes Carwash, LLC 340 S Alafaya Trail Orlando, FL 32828 Bankruptcy Case No.: 08-09534 Type of Business: The Debtor provides car wash services. Chapter 11 Petition Date: October 16, 2008 Court: Middle District of Florida (Orlando) Judge: Arthur B. Briskman Debtor's Counsel: Frank M. Wolff, Esq. fwolff@whmh.com Wolff Hill McFarlin & Herron PA 1851 West Colonial Drive Orlando, FL 32804 Tel: (407) 648-0058 Fax: (407) 648-0681 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/flmb08-09534.pdf WELLS FARGO: Moody's Lowers Ratings on 53 Tranches from Six RMBS ---------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 53 tranches from 6 subprime RMBS transactions issued by Wells Fargo. Additionally, three ratings were confirmed after previously being on review for possible further downgrade. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, subprime residential mortgage loans. These actions follow and are as a result of Moody's September 18, 2008 announcement that it had updated its loss projections on first-lien subprime RMBS. Complete rating actions are: Issuer: Wells Fargo Home Equity Asset-Backed Securities 2005-3 Trust -- Cl. M-10, Confirmed at B2 -- Cl. M-11, Downgraded to Caa1 from B3 Issuer: Wells Fargo Home Equity Asset-Backed Securities 2006-1 Trust -- Cl. M-2, Downgraded to Aa3 from Aa2 -- Cl. M-3, Downgraded to A2 from A1 -- Cl. M-5, Confirmed at B1 -- Cl. M-6, Confirmed at B2 -- Cl. M-7, Downgraded to Ca from B3 -- Cl. M-8, Downgraded to C from Caa1 -- Cl. M-9, Downgraded to C from Caa2 -- Cl. M-10, Downgraded to C from Ca Issuer: Wells Fargo Home Equity Asset-Backed Securities 2006-2 Trust -- Cl. A-4, Downgraded to Aa2 from Aaa -- Cl. M-1, Downgraded to Baa1 from Aa1 -- Cl. M-2, Downgraded to Ba1 from Aa3 -- Cl. M-3, Downgraded to B2 from Baa1 -- Cl. M-4, Downgraded to Caa2 from Ba2 -- Cl. M-5, Downgraded to C from B1 -- Cl. M-6, Downgraded to C from B2 -- Cl. M-7, Downgraded to C from Caa1 -- Cl. M-8, Downgraded to C from Caa2 -- Cl. M-9, Downgraded to C from Caa3 Issuer: Wells Fargo Home Equity Asset-Backed Securities 2006-3 Trust -- Cl. A-2, Downgraded to A3 from Aaa -- Cl. A-3, Downgraded to Baa1 from Aaa -- Cl. M-1, Downgraded to Ba2 from Baa1 -- Cl. M-2, Downgraded to Caa2 from Ba3 -- Cl. M-3, Downgraded to C from B1 -- Cl. M-4, Downgraded to C from B1 -- Cl. M-5, Downgraded to C from B2 -- Cl. M-6, Downgraded to C from B2 -- Cl. B-1, Downgraded to C from B3 -- Cl. B-2, Downgraded to C from Caa1 -- Cl. B-3, Downgraded to C from Caa2 -- Cl. B-4, Downgraded to C from Ca Issuer: Wells Fargo Home Equity Asset-Backed Securities 2007-1 Trust -- Cl. A-2, Downgraded to Ba1 from Aa2 -- Cl. A-3, Downgraded to Ba2 from A2 -- Cl. M-1, Downgraded to B3 from Ba3 -- Cl. M-2, Downgraded to Caa3 from B1 -- Cl. M-3, Downgraded to C from B1 -- Cl. M-4, Downgraded to C from B2 -- Cl. M-5, Downgraded to C from B2 -- Cl. M-6, Downgraded to C from B3 -- Cl. B-1, Downgraded to C from Caa1 -- Cl. B-2, Downgraded to C from Caa2 -- Cl. B-3, Downgraded to C from Caa3 Issuer: Wells Fargo Home Equity Asset-Backed Securities 2007-2 Trust -- Cl. A-2, Downgraded to Aa2 from Aaa -- Cl. A-3, Downgraded to B1 from Aaa -- Cl. A-4, Downgraded to Caa2 from A3 -- Cl. M-1, Downgraded to C from Ba3 -- Cl. M-2, Downgraded to C from B1 -- Cl. M-3, Downgraded to C from B2 -- Cl. M-4, Downgraded to C from B2 -- Cl. M-5, Downgraded to C from Caa1 -- Cl. M-6, Downgraded to C from Caa2 -- Cl. M-7, Downgraded to C from Caa3 -- Cl. M-8, Downgraded to C from Ca -- Cl. M-9, Downgraded to C from Ca -- Cl. B-1, Downgraded to C from Ca WERNER LADDER: NY Court Transfers $1 Billion Lawsuit to Delaware ---------------------------------------------------------------- Judge Richard M. Berman of the U.S. District Court for the New York District Court ruled that the lawsuit against more than 200 former shareholders, directors, officers, and advisors of Werner Holding Co., Inc., and affiliates, is transferred to the U.S. District Court for the District of Delaware. The lawsuit, filed on Jan. 24, 2008, by the Old Ladder Litigation Co., LLC, as Litigation Designee, seeks, among other things, to recover on behalf of Werner's unsecured creditors in excess of $480,000,000 in alleged "fraudulent transfers" made by Werner to certain entities, including Investcorp Bank, B.S.C., in 1997 and 2003. The Litigation Designee alleges in the lawsuit that Werner's former owners and other insiders stripped nearly $500,000,000 in cash out of the company before its bankruptcy liquidation. An "expensive bid" to restructure Werner Holding Co. (DE), Inc., and its debtor-affiliates in Chapter 11 failed in 2007, "leaving hedge funds including Levine Leichtman Capital Partners to take over the Debtors' remaining operations in a deal that left more than $1 billion in unpaid debt," the Associated Press reported in January 2008. In June 2008, Investcorp and other defendants moved for a transfer of the lawsuit to the Delaware District Court, or, in the alternative, to dismiss the Complaint. In their request, the Defendants argued that transferring the venue to Delaware will conserve time and costs for the parties as the Delaware Court knows more about Werner's history and financial affairs than any other court. The Defendants further argued that the Litigation Designee filed the Complaint in New York to avoid "unfavorable Third Circuit precedent" that provides the Defendants with an "absolute defense" to the fraudulent transfer claims. The Litigation Designee objected to the transfer request, arguing that there is no judicial advantage in having the lawsuit transferred as the Plaintiff will not consent to a jury trial in Delaware. The Litigation Designee also contended that the Defendants' allegation that the Plaintiff is just forum shopping is untrue. Oral argument on the venue issue was held on October 8 before Judge Berman. Judge Berman held that the factors identified in In re Burns v. Grupo Mexico S.A. de C.V., No. 07 Civ. 3496, 2007 WL 4046762, at *5 (S.D.N.Y. Nov. 16, 2007) favor transfer of the lawsuit to the Delaware District Court. Transfer of the lawsuit to the Delaware District Court will promote the efficient administration of the Werner estate because it will place the litigation in the same court as the bankruptcy case, Judge Berman ruled. The Litigation Designee also recently filed preference actions in the U.S. Bankruptcy Court for the District of Delaware with pre-trial and solvency consideration that will substantially overlap issues in the lawsuit. The Delaware Bankruptcy Court, Judge Berman pointed out, has presided over the Werner bankruptcy cases for more than two years and is currently "knee-deep" in "on-going discovery by Plaintiff . . . from Defendants in the avoidance actions related to the allegations in the Complaint. Transferring the venue, he said, will conserve judicial resources as the more than 100 preference actions the Litigation Designee filed in the Delaware Bankruptcy Court will require that Court to determine whether the Debtors were solvent, which is an issue also raised in the New York Complaint. Moreover, the Delaware Bankruptcy Court's familiarity with issues in Werner's bankruptcy cases will still allow for significant judicial efficiencies by presiding over pretrial matters for the New York Complaint until it is trial ready. Because Werner is organized under the laws of the State of Delaware, Delaware has an interest in litigation regarding companies incorporated within its jurisdiction, Judge Berman held. The factors of having "fair trial in the possible venues" and "enforceability of judgment" are neutral because the parties are capable of receiving a fair trial in either Court and because the enforceability of a judgment would not be affected by the transfer. Judge Berman added that the Defendants argue persuasively that the Litigation Designee commenced the lawsuit in New York and not in Delaware to avoid "binding Third Circuit precedent" that may provide the Defendants an absolute defense to the Litigation Designee's fraudulent transfer claims under Section 544 of the Bankruptcy Code and to seek to take advantage of a seemingly favorable decision on the same issue by a bankruptcy judge in the Eastern District of New York in In re Official Comm. of Unsecured Creditors v. Lattman (In re Norstan Apparel Shops, Inc.) 367 B.R. 68, 77 (Bank. E.D.N.Y. 2007). 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. 57; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). WEST CONTRA: S&P Lifts Underlying Rating to 'A+' from 'C' --------------------------------------------------------- Standard & Poor's Ratings Services raised its underlying rating to 'A+' from 'C' and revised its outlook to stable from developing on West Contra Costa HealthCare District, California's certificates of participation, series 2004. "The raised rating reflects a court order confirming the district's plan for the adjustment of debt, which classifies the certificates as a secured unimpaired claim," said Standard & Poor's credit analyst Misty Newland. "In addition, the rating is supported by a large and mature parcel tax base that benefits from its participation in the San Francisco Bay Area economy." The proceeds of certificates were used to support four months of working capital. Although the district currently has no debt plans, additional deficit financing bonds may be needed to relieve continued operational pressures. The district filed for Chapter 9 bankruptcy protection on Oct. 1, 2006. The plan for the adjustment of debt includes the district's funding and treatment of creditors, which was filed in the U.S. Bankruptcy Court on June 3, 2008. The court order confirming the plan went into effect Aug. 15, 2008. The district serves an estimated population of 250,000 in West Contra County, about 15 miles northeast of the City of San Francisco. The district owns Doctors Medical Center - San Pablo, a 247-bed acute care hospital, with a primary service area that encompasses the cities of Richmond, San Pablo, El Cerrito, Pinole, and Hercules, as well as the unincorporated communities of Rodeo and El Sobrante. The district also owns two medical office buildings adjacent to the hospital. WESTERN REFINING: S&P Keeps 'B+' Rating Under Negative CreditWatch ------------------------------------------------------------------ Standard & Poor's Ratings Services said that the ratings of refining and marketing company Western Refining Inc. (B+/Watch Neg/--) will remain on CreditWatch with negative implications, where S&P placed them on April 30, 2008. "Anticipated improvement in financial results during the third quarter, combined with covenant amendments received during the second quarter, should provide an adequate platform for near-term covenant compliance," noted Standard & Poor's credit analyst Paul Harvey. In addition, Western has begun a strategic review of its assets, including its Yorktown refinery, with expectations that it will use any proceeds from an assets sale to repay debt. S&P expects Western to complete any asset sales and debt repayment during first-quarter 2009. "However, if by March 31, 2009, Western fails to have an explicit route to sustained deleveraging, likely through asset sales, to 4.5x debt to EBITDA or below, we would lower the ratings," Mr. Harvey stated. In addition, any deleveraging must provide the ability to remain compliant with future revised or tightened financial covenants. Standard & Poor's remains concerned about Western's existing high debt leverage and ability to meet its tighter financial covenants after March 31, 2009 if its debt levels have not decreased. WORLDSPACE INC: Files for Chapter 11 Bankruptcy in Delaware ----------------------------------------------------------- WorldSpace Inc., along with its two affiliates, WorldSpace Systems Corporation and AfriSpace Inc., filed voluntary petition under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The WorldSpace's board of directors unanimously determined that Chapter 11 reorganization was necessary for the company to engage in an orderly process to (i) raise sufficient funds; and (ii) repay its senior secured and convertible notes by a sale of its assets or a recapitalization of the company. The company listed $307,382,000 in total assets and $2,122,904,000 in total liabilities. The company owes roughly $95,644,103 to its unsecured creditors including (i) Yenura Pte. Ltd. owing $55,221,413 in loan; (ii) Micronas GmbH owring $18,241,736 in trade debt; and Fraunhofer Institute for Integrated Circuits owing $4,445,212 in trade debt. In conjunction with the filing, the company asked the Court to obtain up to $13 million in debtor-in-possession financing from holders of its existing senior secured and convertible notes for a period of 90 days to facilitate a sale transaction. A hearing is set today, Oct. 20 at 3:00 p.m., at 824 Market Street, 6th floor, Courtroom #2 in Wilmington, Delaware, to consider approval of the motion. The company said that the financing facility is expected to enable the company to continue to pay salaries of critical employees and continue operations which are critical to preserving the value of its core assets through the term of the facility. The company will continue to operate its 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. On Sept. 19, 2008, the company reached an agreement in principle with each of the four holders of its amended and restated secured notes and second amended and restated convertible notes to defer until Sept. 25, 2008, its obligation to pay $19.97 million in principal amount of the secured notes, plus accrued but unpaid interest due on notes, which was payable on Sept. 15, 2008. The company was working on developing a comprehensive operational and financial restructuring plan for addressing both its immediate and longer term financing requirements. The Company intended to present the plan to the holders by Sept. 25, 2008, and to seek their cooperation in facilitating the implementation of the plan. Under the agreement, the company agreed to use its reasonable best efforts to appoint a chief restructuring officer acceptable to the holders by Sept. 30, 2008. In addition, in connection with the agreement, Noah Samara agreed to step down from his positions as CEO and chairman of the company's board if amounts due under the secured notes are not paid by Sept. 25, 2008. The holders have not entered into a further forbearance agreement with the company, as of Sept. 30, 2008. Pachulski Stang Ziehl & Jones LLP and Shearman & Sterling LLP represent the company as its counsel. The Bank Street Group LLC represents the company as its financial adviser. About WorldSpace Based in the Washington, D.C., WorldSpace Inc. -- http://www.1worldspace.com/-- is a media and entertainment company. The company offers news, sports and music entertainment, and educational programs. WORLDSPACE INC: Case Summary & 30 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: WorldSpace, Inc. 8515 Georgia Avenue Silver Spring, MD 20910 Bankruptcy Case No.: 08-12412 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- WorldSpace Systems Corporation 08-12413 AfriSpace, Inc. 08-12414 Type of Business: The Debtor is a media and entertainment company. The company offers news, sports and music entertainment, and educational programs. See: http://www.1worldspace.com/ Chapter 11 Petition Date: October 17, 2008 Court: District of Delaware (Delaware) Judge: Peter J. Walsh Debtor's Counsel: Laura Davis Jones, Esq. ljones@pszjlaw.com Pachulski Stang Ziehl & Jones LLP 919 N. Market Street, 17th Floor Wilmington, DE 19899-8705 Tel: (302) 652-4100 Fax: (302) 652-4400 -- and -- Shearman & Sterling LLP Financial Adviser: The Bank Street Group LLC Total Assets: $307,382,000 Total Debts: $2,122,904,000 The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Yenura Pte., Ltd. loan $55,221,413 c/o Citilegal LLC 7 Temaskek Blvd. #21-02 Suntec Tower One Singapore 038987 Tel: (011) 65 63333 1611 Fax: (011) 65 6338 6277 Micronas GmbH trade debt $18,241,736 c/o Ms. Isabelle Blank Hans-Bunte Strasse 19 Freiburg 79108 Germany Tel: 49 761 517 2695 Fax: 49 761 517 2174 Fraunhofer Institute for trade debt $4,445,212 Integrated Circuits c/o Ernts Ebertein AM Wolfsmantel 33 Erlangen D-91058 Germany Tel: 49 9131 776 6320 Fax: 49 9131 776 6399 Flextronics trade debt $2,342,657 c/o Richard L. Foley 2 Robbins Road Westford, MA 01886 Tel: (978) 392 3010 Fax: (978) 392-3011 Thales Alenia Space France trade debt $2,203,709 c/o Denis Laulan 26 Avenue J.F. Champollion Toulouse 31100 France Tel: 33-5-34-353-637 Fax: 22-5-34-35-51-18 Delphi Delco Electronics trade debt $1,222,254 Europe GmbH c/o Dr. Andreas Hunscher Tee Center Bad Salzdetfurth D 31162 Germany Tel: (765) 451-4963 Fax: (765) 451-7697 Baker & McKenzie trade debt $1,148,828 c/o Jeffrey Cohen 1114 Avenue of the Americas New York, NY 10036 Tel: (212) 626-4100 Fax: (212) 310-1600 International Space Brokers trade debt $990,366 c/o John Cozi 1200 Wilson Blvd. Arlington, VA 22209 Tel: (703) 841-1334 Fax: (703) 276-4901 SED Systems Inc. trade debt $986,277 c/o Jim Rennie P.O. Box 1464 Saskatoon, Saskatchewan Canada 57K 3P7 Tel: (306) 933-1524 Fax: (306) 933-1486 IFPI (South East Asia) Ltd. trade debt $948,152 c/o Winnie Wong 16/F Guardian House 32 Oi Kwan Road Wanchai Hong Kong Tel: (852) 2866-6862 Fax: (852) 2865-6326 Phonographic Performance trade debt $657,894 Limited Crescent Towers, B68, 7th fl. Veera Estate off New Link Rd. Mumbai, India Tel: 2673-6301 Fax: 2673-6304 Astrium SAS trade debt $650,549 31 rue de Cosmonautes Toulouse, France 31402 Tel: 33-5-6219-9069 Fax: 33-5-6219-7485 Sanyo-Mgt trade debt $612,250 c/o Toshio Shiozawa Hiyoshi-cho 2-Chome 5-15 Moriguchi City, Osaka Japan 449-843 Tel: 81-72-872-0011 Fax: 81-72-870-6070 Delphi Electronic and Safety trade debt $600,000 One Corporate Center P.O. Box 9005 M/S 9A222 Kokomo, IN 46904-9005 Tel: (765) 451-4963 Fax: (765) 451-7697 ST Microelectronics S.r.L trade debt $592,852 c/o Keitumetse Setshedi P.O. Box 31609 Braamfontein 2017 Tel: 27(0) 11-489-5093 Fax: 27(0) 11-489-5099 Accenture LLP trade debt $523,931 c/o Clifford K. Bartlett One Freedom Square 11951 Freedom Drive Reston, VA 20190 Tel: (703) 947-3022 Fax: (703) 947-2200 BPL Techno Vision Pvt. Ltd. trade debt $506,046 c/o Gopi Nath 17KM Old Madras Road Avanahall Bangalore, India Tel: (988) 664-5707 Fax: 91-80-41220721 Antrix Corporation Limited trade debt $482,661 c/o TS Shoba Antariksh Comples Bangalore India 560094 Tel: 91 80 2341 6273 Fax: 91 80 2341 8981 Performing Rights Society trade debt $400,967 Limited c/o Nick Edwards 29-33 Berners Street London WIT 3AB UK Tel: 44 20 7306 4260 Fax: 44 20 7631 8949 ESP Star Sports trade debt $400,000 c/o Jamie Davis 151 Lorong Chuan #01-01 New Tech Park Singapore 556741 Tel: 65-6488-6500 Fax: 65-6488-6407 American Express Travel trade debt $336,943 P.O. Box 360001 Ft. Lauderdale, FL 33336 Tel: (800) 492-5339 Fax: (800) 695-9090 Fiat Group Automobiles trade debt $304,375 c/o Giuseppe Bonollo Corso Agnelli 200 Torino 10135 Italy Tel: 39 0011 00 31 11 11 Fax: 39 01 1396879 Gabon Telecom S.A. BP trade debt $290,964 c/o Tania Sickout 40 000 Liberville Gabon Tel: 241-78-79-80 Fax: 2411-78-79-87 Universidad de Chile trade debt $286,740 c/o Martin Arluciaga Centro de Estudios Espaciales Arturo Prat 117 Santiago, Chile Tel: 56 2 555 3400 Fax: 56 2 556 1489 SAP America Inc. trade debt $277,113 c/o Scott Walbridge P.O. Box 7780-824024 Phila, PA 19182-4024 Tel: (610) 661-6981 Fax: (610) 661-6982 Wistron NeWeb Corp. trade debt $259,995 c/o Michelle Lin N. 10 Li-Hsin Road I Science-based Industrial Park 1-Hsinchu 300, Taiwan, ROC Tel: 886-3-666-7799 Fax: 886-3-666-7711 Paul Hastings Janofsky & trade debt $243,443 Walker c/o Ms. Tara Guinta 875 15th Street, N.W. Washington, D.C. 20005 Tel: (202) 551-1791 Fax: (202) 551-0191 Certicom Corp. trade debt $235,097 c/o David Sequino 1800 Alexander Bell Drive Suite 400 Reston, VA 20191 Tel: (905) 501-3813 Fax: (905) 501-5507 Microsoft Licensing Corp. trade debt $231,679 c/o Amy Horsman 1401 Elm St., 5th Floor Dept. 842467 Dallas, TX 75202 Tel: (425) 722-4987 Tel: (425) 936-7329 W.R. GRACE: Court Denies Libby Claimants' 2nd Reconsideration Plea ------------------------------------------------------------------ The United States Bankruptcy Court for the District of Delaware denied the Libby Claimants' requests to reconsider a scheduling order relating to the Plan confirmation process entered October 1, 2008. The Libby claimants ask the Court to expedite the consideration of their request in light of the impending October 17, 2008, objection deadline for the Disclosure Statement approval. The Libby Claimants also ask for relief from the Court's Case Management Order. Several claimants injured by exposure to asbestos from the Debtors' operations in Libby, Montana, previously asked the Court to reconsider the scheduling order relating to the Plan confirmation process entered October 1, 2008. However, the Libby Claimants' request was denied by the Court for failure to comply with the Court's order establishing case management procedures and hearing schedule and the Local Rules of Bankruptcy Procedure. To address, the Court's concerns, the Libby Claimants files another request to reconsider the October 1 Order. Adam G. Landis, Esq., at Landis Rath & Cobb LLP, in Wilmington, Delaware, maintains that the Debtors' Joint Plan of Reorganization and the accompanying Disclosure Statement were incomplete. He contends that the Debtors' request to shorten the objection deadline was contrary to Rule 2002(b) of the Federal Rules of Bankruptcy Procedure and the Case Management Order. Mr. Landis argues that the Plan and related documents do not reflect an agreement with the Libby Claimants on how their claims should be treated because the Libby Claimants' interests and concerns have not been fairly addressed in the Plan. He points out that the Plan provides for the satisfaction of other asbestos claimants while leaving the Libby Claimants with no assurance of a fair distribution. In addition, Mr. Landis tells the Court that the Libby Claimants' counsel have no time to review advance drafts of the Plan or the Disclosure Statement and prepare appropriate objections to approval of the Disclosure Statement if the deadline for objections is October 17, 2008. He notes that the Disclosure Statement consists of 146 single-space pages, while the Plan consists of 104 single-spaced pages, accompanied by an exhibit book consisting of hundreds of pages more. Furthermore, Mr. Landis argues that numerous exhibits are missing, including an exhibit listing parties that will be protected by the proposed channeling injunction. About W.R. Grace Headquartered in Columbia, Md., W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 13, 2004. On Jan. 13, 2005, they filed an Amended Plan and Disclosure Statement. The hearing to consider the adequacy of the Debtors' Disclosure Statement began on Jan. 21, 2005. The Debtors' exclusive period to file a chapter 11 plan expired on July 23, 2007. Estimation of W.R. Grace's asbestos personal injury liabilities commenced on January 14, 2008. At Dec. 31, 2006, the W.R. Grace's balance sheet showed total assets of $3,620,400,000 and total debts of $4,189,100,000. As of November 30, 2007, W.R. Grace's balance sheet showed total assets of $3,335,000,000, and total debts of $3,712,000,000. * S&P Takes Rating Actions on Various U.S. CDO Transactions ----------------------------------------------------------- Standard & Poor's Ratings Services took rating actions on various U.S. synthetic collateralized debt obligation transactions the September month-end batch run: -- S&P placed 63 ratings on CreditWatch with negative implications; -- S&P lowered 37 ratings; and -- S&P affirmed 14 ratings and removed them from CreditWatch negative. The CreditWatch negative placements reflect negative rating migration in the portfolios and the fact that the synthetic rated overcollateralization ratios for the affected transactions had fallen below 100% as of the September month-end run. The downgrades affected classes that had SROC ratios below 100% as of the September month-end run and at a 90-day forward run; the affirmations and CreditWatch negative removals affected classes that had SROC ratios that were at or over 100% at their current rating level. Ratings List ABACUS 2004-1 Ltd. Rating ------ Class To From ----- -- ---- A A- A+ B BB+ BBB+ C CCC+ BB ABACUS 2004-2 Ltd. Rating ------ Class To From ----- -- ---- B BB BB+ C B- B ABACUS 2005-1 Ltd. Rating ------ Class To From ----- -- ---- A-2 AA+ AAA B A+ AA C BBB+ A- D BB+ BBB ABACUS 2005-2 Ltd. Rating ------ Class To From ----- -- ---- D CCC- CCC ABACUS 2005-3 Ltd. Rating ------ Class To From ----- -- ---- B BBB+ A+ B Series 2 BBB+ A+ C BBB A- C Series2 BBB A- D BB BB+ D Series 2 BB BB+ D Series 3 BB BB+ ABACUS 2005-5 Ltd. Rating ------ Class To From ----- -- ---- A-1 A- A+ ABACUS 2006-17 Ltd. Rating ------ Class To From ----- -- ---- C A+ AA- ABSpoke 2005-X Ltd. Rating ------ Class To From ----- -- ---- VFRN B B+ ABSpoke 2005-XA Ltd. Rating ------ Class To From ----- -- ---- VFRN BB+ BBB- ABSpoke 2005-XII B Segregated Portfolio of SPGS SPC Rating ------ Class To From ----- -- ---- VFRN CCC+ B- Archstone Synthetic CDO II SPC Rating ------ Class To From ----- -- ---- B-2 AA AA/Watch Neg B-3 AA AA/Watch Neg B-4 AA AA/Watch Neg Arlo III Ltd. ARLO III Limited Series 2005 (Hyde Park) Rating ------ Class To From ----- -- ---- Notes BBB/Watch Neg BBB Calibre 2004-XI Ltd. Rating ------ Class To From ----- -- ---- Single Tra Ap/Watch Neg Ap Credit and Repackaged Securities Ltd. 2007-18 Rating ------ Class To From ----- -- ---- Notes BB-/Watch Neg BB- Credit Default Swap The Bank of Nova Scotia - Script Securitisation Ltd. Rating ------ Class To From ----- -- ---- Tranche CCC+srp/Watch Neg CCC+srp Credit Default Swap Swap Risk Rating-Portfolio, CDS Reference #230681 - MAPLES 2007-12 Rating ------ Class To From ----- -- ---- Tranche BB+srp/Watch Neg BB+srp Credit Default Swap Swap Risk Rating - Portfolio CDS Ref No. SDB506551435 Rating ------ Class To From ----- -- ---- Notes AAAsrp/Watch Neg AAAsrp Credit Default Swap Swap Risk Rating - Portfolio CDS Ref No. SDB506551423 Rating ------ Class To From ----- -- ---- Notes AAAsrp/Watch Neg AAAsrp Credit Default Swap Swap Risk Rating - Portfolio CDS Ref No. SDB506494096 Rating ------ Class To From ----- -- ---- Notes AAAsrp/Watch Neg AAAsrp Credit Default Swap Swap Risk Rating - Portfolio CDS Ref No. SDB506551442 Rating ------ Class To From ----- -- ---- Notes AAAsrp/Watch Neg AAAsrp Credit Default Swap Swap Risk Rating - Portfolio CDS Ref No. SDB506551445 Rating ------ Class To From ----- -- ---- Notes AAAsrp/Watch Neg AAAsrp Credit Default Swap Swap Risk Rating - Portfolio CDS Ref No. SDB506550851 Rating ------ Class To From ----- -- ---- Notes AAAsrp/Watch Neg AAAsrp Credit Default Swap Swap Risk Rating - Portfolio CDS Ref No. SDB506551383 Rating ------ Class To From ----- -- ---- Notes AAAsrp/Watch Neg AAAsrp Credit Default Swap Swap Risk Rating - Portfolio CDS Ref. No. SDB506551403 Rating ------ Class To From ----- -- ---- Notes AAAsrp/Watch Neg AAAsrp Credit Default Swap Swap Risk rating - Portfolio CDS Ref No. SDB506551406 Rating ------ Class To From ----- -- ---- Notes AAAsrp/Watch Neg AAAsrp Credit Default Swap Swap Risk rating - Portfolio CDS Ref No. SDB506551414 Rating ------ Class To From ----- -- ---- Notes AAAsrp/Watch Neg AAAsrp Credit Linked Notes Ltd. 2005-1 2005-1 Rating ------ Class To From ----- -- ---- Notes BBB-/Watch Neg BBB- Dallaglio CDO 2005-4 Ltd. Rating ------ Class To From ----- -- ---- B CCC CCC+ Eirles Two Ltd. 211 Rating ------ Class To From ----- -- ---- 211 BBB- BBB Eirles Two Ltd. 210 Rating ------ Class To From ----- -- ---- Series 210 BBB- BBB Eirles Two Ltd. 209 Rating ------ Class To From ----- -- ---- Series 209 BBB+ A- Eirles Two Ltd. 208 Rating ------ Class To From ----- -- ---- Series 208 A A+ Eirles Two Ltd. 242-245 & 247 Rating ------ Class To From ----- -- ---- Series 242 BB- BB+ Series 243 CCC+ B- Series 244 CCC- CCC Series 245 B B+ Series 247 CCC+ B- Herald Ltd. 24 Rating ------ Class To From ----- -- ---- 24 A-/Watch Neg A- High Grade Structured Credit 2004-1 Ltd. Rating ------ Class To From ----- -- ---- C AA+ AAA D A A+ Infiniti SPC Ltd. Aladdin Synthetic CDO 2006-1 Rating ------ Class To From ----- -- ---- A AAA/Watch Neg AAA Infiniti SPC Ltd. Kenmore Street Synthetic CDO 2006-2 Segregated Portfolio Rating ------ Class To From ----- -- ---- 7A-1 AAA/Watch Neg AAA Ixion PLC 27 Rating ------ Class To From ----- -- ---- Notes CCC- CCC+ Landgrove Synthetic CDO SPC 2007-2 Rating ------ Class To From ----- -- ---- 7A2 Sr AAA/Watch Neg AAA Lunar Funding I Ltd. 10 Rating ------ Class To From ----- -- ---- 10 AAA/Watch Neg AAA Mint 2005-1 Ltd. Rating ------ Class To From ----- -- ---- 2A AAA/Watch Neg AAA A-1 AAA/Watch Neg AAA A-2 AAA/Watch Neg AAA Mistletoe ORSO Trust 2 Rating ------ Class To From ----- -- ---- Cr Link AAA/Watch Neg AAA Morgan Stanley ACES SPC 2006-7 Rating ------ Class To From ----- -- ---- IA BBB/Watch Neg BBB Morgan Stanley ACES SPC 2006-13 Rating ------ Class To From ----- -- ---- II BBB-/Watch Neg BBB- Morgan Stanley ACES SPC 2006-18 Rating ------ Class To From ----- -- ---- Notes AA/Watch Neg AA Morgan Stanley ACES SPC 2007-6 Rating ------ Class To From ----- -- ---- IIIA A+ A+/Watch Neg Morgan Stanley ACES SPC 2007-13 Rating ------ Class To From ----- -- ---- IIA BBB+/Watch Neg BBB+ IIB BBB+/Watch Neg BBB+ Morgan Stanley Managed ACES SPC 2005-1 Rating ------ Class To From ----- -- ---- II A AA/Watch Neg AA II B AA/Watch Neg AA Morgan Stanley Managed ACES SPC 2006-3 Rating ------ Class To From ----- -- ---- II AA/Watch Neg AA Morgan Stanley Managed ACES SPC 2006-4 Rating ------ Class To From ----- -- ---- II AA/Watch Neg AA Morgan Stanley Managed ACES SPC 2007-15 Rating ------ Class To From ----- -- ---- IA AAA/Watch Neg AAA Newport Waves CDO 1 Rating ------ Class To From ----- -- ---- A1-$LS AA AA/Watch Neg A3-$LMS AA AA/Watch Neg Newport Waves CDO 2 Rating ------ Class To From ----- -- ---- A1-$LS AA AA/Watch Neg A1A-$LS AA AA/Watch Neg A1B-$LS AA AA/Watch Neg A7-$LS BBB- BBB-/Watch Neg Newport Waves CDO 5 Rating ------ Class To From ----- -- ---- A1-$LMS AAA AAA/Watch Neg A3-$LMS AA AA/Watch Neg Newport Waves CDO 7 Rating ------ Class To From ----- -- ---- A1A-ELS AA AA/Watch Neg A1-ELS AA AA/Watch Neg North Street Referenced Linked Notes 2004-6 Ltd. Rating ------ Class To From ----- -- ---- A BBB+ AA Oban Trust 2006-1 Rating ------ Class To From ----- -- ---- A BBB/Watch Neg BBB Omega Capital Investments PLC 19 Rating ------ Class To From ----- -- ---- A-1E AAA/Watch Neg AAA A-1U AAA/Watch Neg AAA PARCS Master Trust PARCS Master Trust Class 2007-16 Emory Units Rating ------ Class To From ----- -- ---- Units BBB/Watch Neg BBB PARCS Master Trust Parcs Mater Trust, Class 2007-18 Piedmont Units, Due 2017 Rating ------ Class To From ----- -- ---- Trust Unit BBB+/Watch Neg BBB+ PARCS-R Master Trust 2007-13 Rating ------ Class To From ----- -- ---- Trust Unit AAA/Watch Neg AAA REVE SPC REVE SPC Segregated Portfolio of Dryden XVII Notes - 34, 36, 37, 38, 39, & 40 Rating ------ Class To From ----- -- ---- Series 34 AA/Watch Neg AA REVE SPC 48 Rating ------ Class To From ----- -- ---- Notes AAA/Watch Neg AAA REVE SPC 53 Rating ------ Class To From ----- -- ---- JSS AAA/Watch Neg AAA Rutland Rated Investments Dryden XII - IG Synthetic CDO 2006-1 - DRYDEN06-1 Rating ------ Class To From ----- -- ---- A3C-$LS AA+/Watch Neg AA+ Rutland Rated Investments 2006-2 (28) Rating ------ Class To From ----- -- ---- A1A-L AAA/Watch Neg AAA Rutland Rated Investments Rumson 2007-1 (Series 38) Rating ------ Class To From ----- -- ---- A1-L AAA/Watch Neg AAA A3-L AA/Watch Neg AA Rutland Rated Investments Rutland Rated Investments Archer 2007-1 (Series 44) Rating ------ Class To From ----- -- ---- A1-L AAA/Watch Neg AAA Rutland Rated Investments Rutland Rated Investments Archer 2007-1 (Series 45) Rating ------ Class To From ----- -- ---- A1-L1 AAA/Watch Neg AAA A3-F AA/Watch Neg AA A3-L AA/Watch Neg AA SALS B-2004-1 Rating ------ Class To From ----- -- ---- Ser 2385 BB+/Watch Neg BB+ SPGS SPC 2006-IA Rating ------ Class To From ----- -- ---- Notes CCC+ B- STEERS Thayer Gate CDO Trust, Series 2006-9 Rating ------ Class To From ----- -- ---- Trust Unit BBB+/Watch Neg BBB+ STRATA Trust Series 2006-10 Rating ------ Class To From ----- -- ---- Notes AAA/Watch Neg AAA Terra CDO SPC Ltd. 2007-2 SEGREGATED PORTFOL Rating ------ Class To From ----- -- ---- A1 BBB/Watch Neg BBB Terra CDO SPC Ltd. 2007-5 SEGREGATED PORTFOL Rating ------ Class To From ----- -- ---- A BBB/Watch Neg BBB B1 BB/Watch Neg BB B2 BB/Watch Neg BB TIERS Derby Synthetic CDO Floating Rate Credit Linked Trust Rating ------ Class To From ----- -- ---- 2007-17 AAA/Watch Neg AAA TIERS Maine Floating Rate Credit Trust 2007-24 Rating ------ Class To From ----- -- ---- Cert BBB+/Watch Neg BBB+ Tribune Ltd. 50 Rating ------ Class To From ----- -- ---- Notes AA/Watch Neg AA True North No. 3 (CDO) Ltd. Rating ------ Class To From ----- -- ---- A AA/Watch Neg AA * BOND PRICING: For the Week of Oct. 12 - Oct. 18, 2008 ------------------------------------------------------- Issuer Coupon Maturity Bid Price ------ ------ -------- --------- ABITIBI-CONS FIN 7.875% 8/1/2009 75.00 AIRTRAN HOLDINGS 7.000% 7/1/2023 51.25 AMER GENL CORP 7.500% 8/11/2010 70.23 AMER GENL FIN 4.000% 6/15/2009 53.13 AMER GENL FIN 4.500% 9/15/2009 59.50 AMER GENL FIN 5.000% 9/15/2009 64.05 AMER GENL FIN 5.150% 9/15/2009 60.50 AMER GENL FIN 3.875% 10/1/2009 58.82 AMER GENL FIN 4.550% 10/15/2009 38.85 AMER GENL FIN 3.875% 11/15/2009 38.96 AMER GENL FIN 4.000% 11/15/2009 60.07 AMER GENL FIN 4.000% 11/15/2009 65.35 AMER GENL FIN 4.200% 11/15/2009 62.15 AMER GENL FIN 4.600% 11/15/2009 17.50 AMER GENL FIN 4.750% 4/15/2010 47.50 AMER GENL FIN 4.050% 5/15/2010 56.22 AMER GENL FIN 4.875% 5/15/2010 50.50 AMER GENL FIN 3.300% 6/15/2010 50.78 AMER GENL FIN 4.300% 6/15/2010 55.00 AMER GENL FIN 4.750% 6/15/2010 52.70 AMER GENL FIN 4.875% 6/15/2010 54.50 AMER GENL FIN 5.200% 6/15/2010 51.50 AMER GENL FIN 5.350% 7/15/2010 36.50 AMER GENL FIN 6.250% 7/15/2010 50.15 AMER GENL FIN 4.500% 8/15/2010 38.25 AMER GENL FIN 8.000% 8/15/2010 55.00 AMER GENL FIN 4.625% 9/1/2010 49.98 AMER GENL FIN 4.600% 9/15/2010 44.06 AMER GENL FIN 5.000% 9/15/2010 35.00 AMER GENL FIN 5.200% 9/15/2010 26.01 AMER GENL FIN 4.250% 10/15/2010 50.23 AMER GENL FIN 4.600% 10/15/2010 34.02 AMER GENL FIN 4.150% 11/15/2010 29.13 AMER GENL FIN 5.000% 11/15/2010 35.31 AMER GENL FIN 5.000% 11/15/2010 49.50 AMER GENL FIN 4.400% 12/15/2010 45.25 AMER GENL FIN 5.000% 12/15/2010 48.07 AMER GENL FIN 5.000% 12/15/2010 31.00 AMER GENL FIN 5.000% 12/15/2010 21.00 AMER GENL FIN 5.500% 12/15/2010 22.00 AMER GENL FIN 5.000% 1/15/2011 25.01 AMER GENL FIN 4.000% 3/15/2011 34.00 AMER GENL FIN 5.000% 3/15/2011 34.00 AMER GENL FIN 5.250% 4/15/2011 25.01 AMER GENL FIN 5.500% 4/15/2011 35.31 AMER GENL FIN 5.200% 5/15/2011 44.88 AMER GENL FIN 5.000% 6/15/2011 15.01 AMER GENL FIN 5.600% 6/15/2011 40.00 AMER GENL FIN 6.000% 7/15/2011 25.01 AMER GENL FIN 6.250% 7/15/2011 12.05 AMER GENL FIN 6.250% 7/15/2011 43.00 AMER GENL FIN 8.150% 8/15/2011 20.10 AMER GENL FIN 5.625% 8/17/2011 36.00 AMER GENL FIN 4.300% 10/15/2011 21.40 AMER GENL FIN 5.200% 12/15/2011 31.00 AMER GENL FIN 4.625% 3/15/2012 30.60 AMER GENL FIN 4.100% 7/15/2012 30.26 AMER GENL FIN 4.875% 7/15/2012 40.14 AMER GENL FIN 5.000% 8/15/2012 19.00 AMER GENL FIN 5.850% 9/15/2012 24.27 AMER GENL FIN 5.375% 10/1/2012 33.00 AMER GENL FIN 5.250% 12/15/2012 31.25 AMER GENL FIN 6.000% 4/15/2013 25.26 AMER GENL FIN 6.000% 4/15/2013 11.20 AMER GENL FIN 5.400% 5/15/2013 26.00 AMER GENL FIN 5.750% 5/15/2013 23.89 AMER GENL FIN 5.850% 6/1/2013 31.00 AMER GENL FIN 5.500% 5/15/2014 26.26 AMER GENL FIN 5.500% 6/15/2014 15.20 AMER GENL FIN 6.000% 11/15/2014 21.00 AMER GENL FIN 6.000% 12/15/2014 24.00 AMER GENL FIN 7.500% 7/15/2015 25.25 AMER GENL FIN 3.750% 11/15/2008 75.36 AMER GENL FIN 3.000% 12/15/2008 81.75 AMER GENL FIN 3.750% 12/15/2008 95.06 AMER GENL FIN 3.750% 12/15/2008 84.50 AMER GENL FIN 3.875% 12/15/2008 92.00 AMER GENL FIN 3.800% 4/15/2009 72.00 AMER GENL FIN 3.350% 5/15/2009 34.01 AMER GENL FIN 4.625% 5/15/2009 68.28 AMER GENL FIN 4.350% 6/15/2009 44.89 AMER GENL FIN 3.100% 7/15/2009 44.00 AMER GENL FIN 4.400% 7/15/2009 41.00 AMER GENL FIN 4.500% 7/15/2009 80.00 AMER GENL FIN 4.000% 8/15/2009 68.00 AMER GENL FIN 4.200% 8/15/2009 45.00 AMER GENL FIN 5.375% 9/1/2009 64.50 AMER GENL FIN 4.300% 9/15/2009 50.03 AMER INTL GROUP 5.375% 10/18/2011 52.56 AMER INTL GROUP 5.750% 3/15/2067 19.97 AMER INTL GROUP 8.175% 5/15/2058 19.92 AMER MEDIA OPER 10.250% 5/1/2009 68.50 AMES TRUE TEMPER 10.000% 7/15/2012 50.00 AMR CORP 4.500% 2/15/2024 91.50 ANTIGENICS 5.250% 2/1/2025 30.50 ARVIN INDUSTRIES 7.125% 3/15/2009 88.78 ASSURED GUARANTY 6.400% 12/15/2066 10.00 ATHEROGENICS INC 1.500% 2/1/2012 10.13 ATHEROGENICS INC 4.500% 9/1/2008 11.50 ATHEROGENICS INC 4.500% 3/1/2011 11.50 BALLY TOTAL FITN 13.000% 7/15/2011 17.00 BANK NEW ENGLAND 9.875% 9/15/1999 3.00 BANK NEW ENGLAND 8.750% 4/1/1999 5.75 BANKUNITED CAP 3.125% 3/1/2034 22.90 BON-TON DEPT STR 10.250% 3/15/2014 17.10 BOWATER INC 6.500% 6/15/2013 25.00 BRODER BROS CO 11.250% 10/15/2010 39.25 CARAUSTAR INDS 7.375% 6/1/2009 55.03 CCH I LLC 9.920% 4/1/2014 25.00 CCH I LLC 10.000% 5/15/2014 31.00 CCH II/CCH II CP 10.250% 9/15/2010 90.00 CELL GENESYS INC 3.125% 11/1/2011 15.00 CELL THERAPEUTIC 5.750% 12/15/2011 1.00 CHANCELLOR MEDIA 8.000% 11/1/2008 97.00 CHARTER COMM HLD 11.125% 1/15/2011 49.68 CHARTER COMM HLD 10.000% 4/1/2009 76.03 CHARTER COMM HLD 10.000% 5/15/2011 54.00 CHARTER COMM INC 6.500% 10/1/2027 16.45 CHENIERE ENERGY 2.250% 8/1/2012 16.00 CIT GROUP INC 5.200% 9/15/2011 42.02 CIT GROUP INC 6.250% 9/15/2009 65.00 CIT GROUP INC 5.800% 7/28/2011 57.00 CIT GROUP INC 6.750% 3/15/2011 43.50 CIT GROUP INC 5.050% 12/15/2010 47.88 CIT GROUP INC 4.750% 12/15/2010 61.00 CIT GROUP INC 5.200% 11/3/2010 62.00 CIT GROUP INC 5.250% 9/15/2010 51.63 CIT GROUP INC 6.500% 3/15/2010 62.15 CIT GROUP INC 4.250% 2/1/2010 62.85 CIT GROUP INC 4.125% 11/3/2009 75.05 CIT GROUP INC 6.875% 11/1/2009 83.80 CIT GROUP INC 3.875% 11/3/2008 97.50 CIT GROUP INC 3.375% 4/1/2009 82.00 CIT GROUP INC 7.250% 3/15/2012 34.00 CIT GROUP INC 5.125% 11/15/2008 93.50 CIT GROUP INC 7.250% 3/15/2013 39.00 CIT GROUP INC 7.900% 3/15/2013 36.53 CLAIRE'S STORES 10.500% 6/1/2017 20.00 CLEAR CHANNEL 5.750% 1/15/2013 24.00 CLEAR CHANNEL 5.500% 9/15/2014 23.00 CLEAR CHANNEL 6.250% 3/15/2011 14.00 CMP SUSQUEHANNA 9.875% 5/15/2014 22.00 COEUR D'ALENE 1.250% 1/15/2024 40.00 COMPUCREDIT 3.625% 5/30/2025 23.00 CONSTAR INTL 11.000% 12/1/2012 20.50 DAYTON SUPERIOR 13.000% 6/15/2009 77.25 DELPHI CORP 6.500% 8/15/2013 5.38 DELTA MILLS INC 9.625% 9/1/2007 9.00 DEX MEDIA INC 8.000% 11/15/2013 20.00 DOLE FOODS CO 8.625% 5/1/2009 87.84 FEDDERS NORTH AM 9.875% 3/1/2014 1.25 FIBERTOWER CORP 9.000% 11/15/2012 40.00 FINLAY FINE JWLY 8.375% 6/1/2012 14.75 FIRST DATA CORP 5.625% 11/1/2011 30.68 FLEETWOOD ENTERP 5.000% 12/15/2023 89.20 FORD MOTOR CO 9.980% 2/15/2047 33.96 FORD MOTOR CRED 5.000% 10/20/2008 99.38 FORD MOTOR CRED 5.250% 10/20/2008 99.04 FORD MOTOR CRED 5.000% 11/20/2008 87.50 FORD MOTOR CRED 5.100% 12/22/2008 90.00 FORD MOTOR CRED 5.100% 12/22/2008 89.00 FORD MOTOR CRED 5.800% 1/12/2009 91.85 FORD MOTOR CRED 4.400% 1/20/2009 89.25 FORD MOTOR CRED 4.600% 1/20/2009 90.90 FORD MOTOR CRED 4.350% 2/20/2009 87.34 FORD MOTOR CRED 4.350% 2/20/2009 87.62 FORD MOTOR CRED 4.500% 2/20/2009 84.26 FORD MOTOR CRED 4.300% 3/20/2009 39.50 FORD MOTOR CRED 4.500% 3/20/2009 79.99 FORD MOTOR CRED 4.450% 4/20/2009 63.16 FORD MOTOR CRED 4.650% 4/20/2009 77.01 FORD MOTOR CRED 4.900% 5/20/2009 73.56 FORD MOTOR CRED 5.350% 5/20/2009 82.00 FORD MOTOR CRED 5.250% 6/22/2009 70.45 FORD MOTOR CRED 5.400% 6/22/2009 73.27 FORD MOTOR CRED 5.500% 6/22/2009 70.57 FORD MOTOR CRED 5.500% 6/22/2009 70.57 FORD MOTOR CRED 4.800% 7/20/2009 66.22 FORD MOTOR CRED 5.100% 7/20/2009 59.66 FORD MOTOR CRED 5.200% 7/20/2009 48.44 FORD MOTOR CRED 5.000% 8/20/2009 57.00 FORD MOTOR CRED 5.000% 8/20/2009 63.53 FORD MOTOR CRED 4.900% 9/21/2009 69.40 FORD MOTOR CRED 5.000% 9/21/2009 66.00 FORD MOTOR CRED 5.000% 9/21/2009 54.50 FORD MOTOR CRED 5.050% 9/21/2009 57.30 FORD MOTOR CRED 4.900% 10/20/2009 62.80 FORD MOTOR CRED 4.900% 10/20/2009 55.00 FORD MOTOR CRED 4.950% 10/20/2009 60.15 FORD MOTOR CRED 5.000% 10/20/2009 56.00 FORD MOTOR CRED 7.375% 10/28/2009 65.00 FORD MOTOR CRED 5.100% 11/20/2009 36.56 FORD MOTOR CRED 5.150% 11/20/2009 52.98 FORD MOTOR CRED 5.150% 11/20/2009 62.95 FORD MOTOR CRED 5.150% 11/20/2009 53.62 FORD MOTOR CRED 5.250% 12/21/2009 45.00 FORD MOTOR CRED 5.250% 12/21/2009 63.98 FORD MOTOR CRED 5.400% 12/21/2009 45.50 FORD MOTOR CRED 5.700% 1/15/2010 63.00 FORD MOTOR CRED 5.250% 1/20/2010 51.95 FORD MOTOR CRED 5.500% 1/20/2010 54.20 FORD MOTOR CRED 5.500% 2/22/2010 55.00 FORD MOTOR CRED 5.500% 2/22/2010 54.85 FORD MOTOR CRED 6.000% 2/22/2010 42.65 FORD MOTOR CRED 5.700% 3/22/2010 57.19 FORD MOTOR CRED 5.750% 3/22/2010 50.66 FORD MOTOR CRED 6.300% 3/22/2010 50.00 FORD MOTOR CRED 7.250% 3/22/2010 36.68 FORD MOTOR CRED 6.950% 4/20/2010 33.81 FORD MOTOR CRED 5.850% 5/20/2010 31.21 FORD MOTOR CRED 5.950% 5/20/2010 47.56 FORD MOTOR CRED 6.300% 5/20/2010 37.10 FORD MOTOR CRED 7.875% 6/15/2010 56.00 FORD MOTOR CRED 5.750% 6/21/2010 45.63 FORD MOTOR CRED 5.850% 6/21/2010 48.25 FORD MOTOR CRED 6.000% 6/21/2010 48.90 FORD MOTOR CRED 5.850% 7/20/2010 45.02 FORD MOTOR CRED 6.050% 7/20/2010 55.11 FORD MOTOR CRED 6.150% 7/20/2010 45.00 FORD MOTOR CRED 7.000% 7/20/2010 46.50 FORD MOTOR CRED 6.400% 8/20/2010 39.73 FORD MOTOR CRED 6.500% 8/20/2010 40.01 FORD MOTOR CRED 6.550% 8/20/2010 37.00 FORD MOTOR CRED 7.150% 8/20/2010 43.00 FORD MOTOR CRED 9.750% 9/15/2010 57.00 FORD MOTOR CRED 6.050% 9/20/2010 52.00 FORD MOTOR CRED 6.150% 9/20/2010 46.00 FORD MOTOR CRED 6.350% 9/20/2010 44.00 FORD MOTOR CRED 6.350% 9/20/2010 40.00 FORD MOTOR CRED 5.750% 10/20/2010 46.00 FORD MOTOR CRED 8.625% 11/1/2010 44.88 FORD MOTOR CRED 5.800% 11/22/2010 45.00 FORD MOTOR CRED 5.600% 12/20/2010 53.31 FORD MOTOR CRED 5.650% 12/20/2010 37.00 FORD MOTOR CRED 6.000% 12/20/2010 46.98 FORD MOTOR CRED 5.150% 1/20/2011 24.00 FORD MOTOR CRED 7.375% 2/1/2011 46.00 FORD MOTOR CRED 5.100% 2/22/2011 33.32 FORD MOTOR CRED 5.250% 2/22/2011 44.66 FORD MOTOR CRED 5.200% 3/21/2011 25.91 FORD MOTOR CRED 5.250% 3/21/2011 43.00 FORD MOTOR CRED 5.600% 4/20/2011 19.31 FORD MOTOR CRED 5.700% 5/20/2011 41.50 FORD MOTOR CRED 6.200% 5/20/2011 33.98 FORD MOTOR CRED 6.050% 6/20/2011 19.00 FORD MOTOR CRED 6.200% 6/20/2011 42.76 FORD MOTOR CRED 6.250% 6/20/2011 24.79 FORD MOTOR CRED 5.650% 7/20/2011 27.94 FORD MOTOR CRED 5.900% 7/20/2011 17.03 FORD MOTOR CRED 9.875% 8/10/2011 49.00 FORD MOTOR CRED 5.600% 8/22/2011 16.24 FORD MOTOR CRED 5.750% 8/22/2011 41.04 FORD MOTOR CRED 5.500% 10/20/2011 17.13 FORD MOTOR CRED 7.250% 10/25/2011 40.50 FORD MOTOR CRED 5.600% 11/21/2011 12.98 FORD MOTOR CRED 5.650% 11/21/2011 32.00 FORD MOTOR CRED 5.850% 1/20/2012 16.58 FORD MOTOR CRED 6.000% 1/20/2012 38.00 FORD MOTOR CRED 5.750% 2/21/2012 30.28 FORD MOTOR CRED 7.800% 6/1/2012 46.00 FORD MOTOR CRED 7.000% 8/15/2012 32.07 FORD MOTOR CRED 7.050% 9/20/2013 15.76 FORD MOTOR CRED 7.100% 9/20/2013 18.63 FORD MOTOR CRED 7.100% 9/20/2013 30.31 FORD MOTOR CRED 6.600% 10/21/2013 24.00 FORD MOTOR CRED 6.650% 10/21/2013 12.00 FORD MOTOR CRED 6.750% 10/21/2013 21.00 FORD MOTOR CRED 6.250% 12/20/2013 20.10 FORD MOTOR CRED 6.500% 12/20/2013 28.50 FORD MOTOR CRED 5.650% 1/21/2014 21.54 FORD MOTOR CRED 5.750% 1/21/2014 24.50 FORD MOTOR CRED 6.000% 1/21/2014 21.10 FORD MOTOR CRED 5.750% 2/20/2014 27.00 FORD MOTOR CRED 6.000% 3/20/2014 27.00 FORD MOTOR CRED 6.000% 3/20/2014 24.02 FORD MOTOR CRED 6.000% 3/20/2014 27.30 FORD MOTOR CRED 6.000% 3/20/2014 25.23 FORD MOTOR CRED 6.050% 4/21/2014 25.13 FORD MOTOR CRED 6.200% 4/21/2014 25.22 FORD MOTOR CRED 6.250% 4/21/2014 25.32 FORD MOTOR CRED 6.350% 4/21/2014 27.00 FORD MOTOR CRED 6.300% 5/20/2014 25.18 FORD MOTOR CRED 6.850% 5/20/2014 21.10 FORD MOTOR CRED 6.950% 5/20/2014 27.50 FORD MOTOR CRED 6.650% 6/20/2014 24.00 FORD MOTOR CRED 6.750% 6/20/2014 27.00 FORD MOTOR CRED 6.800% 6/20/2014 25.66 FORD MOTOR CRED 6.800% 6/20/2014 20.10 FORD MOTOR CRED 6.850% 6/20/2014 20.13 FORD MOTOR CRED 6.550% 7/21/2014 25.30 FORD MOTOR CRED 6.000% 11/20/2014 22.10 FORD MOTOR CRED 6.000% 11/20/2014 13.20 FORD MOTOR CRED 6.000% 11/20/2014 21.10 FORD MOTOR CRED 6.050% 12/22/2014 22.71 FORD MOTOR CRED 6.050% 12/22/2014 22.56 FORD MOTOR CRED 6.150% 1/20/2015 12.70 FORD MOTOR CRED 6.250% 1/20/2015 24.00 FORD MOTOR CRED 6.500% 2/20/2015 14.36 FORD MOTOR CRED 6.250% 3/20/2015 25.01 FORD MOTOR CRED 6.500% 3/20/2015 24.50 FORD MOTOR CRED 6.800% 3/20/2015 23.47 FORD MOTOR CRED 7.350% 3/20/2015 18.76 FORD MOTOR CRED 7.250% 7/20/2017 14.94 FORD MOTOR CRED 5.900% 2/20/2014 26.46 FREMONT GEN CORP 7.875% 3/17/2009 54.00 FRONTIER AIRLINE 5.000% 12/15/2025 25.00 GENERAL MOTORS 8.250% 7/15/2023 23.30 GENERAL MOTORS 8.375% 7/15/2033 23.00 GENERAL MOTORS 8.800% 3/1/2021 24.96 GENERAL MOTORS 9.450% 11/1/2011 36.28 GENERAL MOTORS 7.125% 7/15/2013 29.50 GENERAL MOTORS 7.200% 1/15/2011 38.00 GENERAL MOTORS 9.400% 7/15/2021 28.80 GENERAL MOTORS 7.700% 4/15/2016 21.25 GENWORTH GLOBAL 6.050% 4/15/2033 14.75 GEORGIA GULF CRP 10.750% 10/15/2016 24.75 GLOBALSTAR INC 5.750% 4/1/2028 22.50 GMAC 4.700% 5/15/2009 50.50 GMAC 4.700% 11/15/2008 92.97 GMAC 4.750% 11/15/2008 84.99 GMAC 6.250% 11/15/2008 95.00 GMAC 6.500% 11/15/2008 99.58 GMAC 5.600% 2/15/2009 90.82 GMAC 6.750% 2/15/2009 91.12 GMAC 7.000% 2/15/2009 67.83 GMAC 4.100% 3/15/2009 75.44 GMAC 4.250% 3/15/2009 73.92 GMAC 6.000% 3/15/2009 92.00 GMAC 6.050% 3/15/2009 88.74 GMAC 6.100% 3/15/2009 88.75 GMAC 7.000% 3/15/2009 73.06 GMAC 4.500% 4/15/2009 74.01 GMAC 6.000% 4/15/2009 68.72 GMAC 6.100% 4/15/2009 90.46 GMAC 6.100% 4/15/2009 86.63 GMAC 6.150% 4/15/2009 90.59 GMAC 5.250% 5/15/2009 70.00 GMAC 5.625% 5/15/2009 74.00 GMAC 5.500% 6/15/2009 63.51 GMAC 6.700% 6/15/2009 72.63 GMAC 5.050% 7/15/2009 51.13 GMAC 5.100% 7/15/2009 58.82 GMAC 5.250% 7/15/2009 48.00 GMAC 5.250% 7/15/2009 41.50 GMAC 6.800% 7/15/2009 70.11 GMAC 6.850% 7/15/2009 61.89 GMAC 7.000% 7/15/2009 67.94 GMAC 5.000% 8/15/2009 46.55 GMAC 5.000% 8/15/2009 47.50 GMAC 5.100% 8/15/2009 55.00 GMAC 5.250% 8/15/2009 60.50 GMAC 5.250% 8/15/2009 45.50 GMAC 7.000% 8/15/2009 66.35 GMAC 7.125% 8/15/2009 49.00 GMAC 7.150% 8/15/2009 61.00 GMAC 7.200% 8/15/2009 42.00 GMAC 5.000% 9/15/2009 51.78 GMAC 5.000% 9/15/2009 45.00 GMAC 5.000% 9/15/2009 47.17 GMAC 5.100% 9/15/2009 47.02 GMAC 7.000% 9/15/2009 46.64 GMAC 7.000% 9/15/2009 57.63 GMAC 8.125% 9/15/2009 78.31 GMAC 4.900% 10/15/2009 51.50 GMAC 4.900% 10/15/2009 54.50 GMAC 4.950% 10/15/2009 62.83 GMAC 5.000% 10/15/2009 51.65 GMAC 6.500% 10/15/2009 61.66 GMAC 6.850% 10/15/2009 44.00 GMAC 7.000% 10/15/2009 47.50 GMAC 7.050% 10/15/2009 49.93 GMAC 5.200% 11/15/2009 38.00 GMAC 5.200% 11/15/2009 41.00 GMAC 5.250% 11/15/2009 48.27 GMAC 5.250% 11/15/2009 51.64 GMAC 5.350% 11/15/2009 43.43 GMAC 7.000% 11/15/2009 45.00 GMAC 7.250% 11/15/2009 59.91 GMAC 5.350% 12/15/2009 39.12 GMAC 5.350% 12/15/2009 53.55 GMAC 5.400% 12/15/2009 44.00 GMAC 5.400% 12/15/2009 48.29 GMAC 7.000% 12/15/2009 58.00 GMAC 5.300% 1/15/2010 42.17 GMAC 5.500% 1/15/2010 52.00 GMAC 5.750% 1/15/2010 38.29 GMAC 6.000% 1/15/2010 35.71 GMAC 7.000% 1/15/2010 55.68 GMAC 7.250% 1/15/2010 47.00 GMAC 5.850% 2/15/2010 42.26 GMAC 6.000% 2/15/2010 23.16 GMAC 6.000% 2/15/2010 37.97 GMAC 6.050% 3/15/2010 26.90 GMAC 6.150% 3/15/2010 15.00 GMAC 6.500% 3/15/2010 43.33 GMAC 7.000% 3/15/2010 35.56 GMAC 8.050% 4/15/2010 45.64 GMAC 8.400% 4/15/2010 45.00 GMAC 8.500% 5/15/2010 51.55 GMAC 6.375% 6/15/2010 47.95 GMAC 8.000% 6/15/2010 35.16 GMAC 8.000% 6/15/2010 46.22 GMAC 8.000% 6/15/2010 48.00 GMAC 8.000% 7/15/2010 43.25 GMAC 8.000% 7/15/2010 34.42 GMAC 8.200% 7/15/2010 38.43 GMAC 8.000% 9/15/2010 57.50 GMAC 8.500% 10/15/2010 35.00 GMAC 6.750% 9/15/2011 22.00 GMAC 6.625% 10/15/2011 22.25 GMAC 6.750% 10/15/2011 15.31 GMAC 6.750% 10/15/2011 16.50 GMAC 7.000% 10/15/2011 20.00 GMAC 6.500% 7/15/2012 30.25 GMAC 7.125% 8/15/2012 27.00 GMAC 7.250% 8/15/2012 33.25 GMAC 6.875% 8/28/2012 39.63 GMAC 6.750% 9/15/2012 24.25 GMAC 6.750% 9/15/2012 25.66 GMAC 7.000% 9/15/2012 25.35 GMAC 7.100% 9/15/2012 16.87 GMAC 6.750% 10/15/2012 25.00 GMAC 6.875% 10/15/2012 18.00 GMAC 7.000% 10/15/2012 31.16 GMAC 7.500% 10/15/2012 16.75 GMAC 7.750% 10/15/2012 15.65 GMAC 7.000% 11/15/2012 33.25 GMAC 7.150% 11/15/2012 18.50 GMAC 7.625% 11/15/2012 17.20 GMAC 7.875% 11/15/2012 21.00 GMAC 7.000% 12/15/2012 16.50 GMAC 7.125% 12/15/2012 22.00 GMAC 7.250% 12/15/2012 19.75 GMAC 7.250% 12/15/2012 25.00 GMAC 7.000% 1/15/2013 14.78 GMAC 7.100% 1/15/2013 25.00 GMAC 7.100% 1/15/2013 18.50 GMAC 6.500% 2/15/2013 20.10 GMAC 6.800% 2/15/2013 21.00 GMAC 6.250% 3/15/2013 25.00 GMAC 6.400% 3/15/2013 19.50 GMAC 6.500% 3/15/2013 13.74 GMAC 6.500% 4/15/2013 17.88 GMAC 6.750% 4/15/2013 25.00 GMAC 6.750% 4/15/2013 25.00 GMAC 6.800% 4/15/2013 22.50 GMAC 6.875% 4/15/2013 17.75 GMAC 5.850% 5/15/2013 14.66 GMAC 6.100% 5/15/2013 25.00 GMAC 6.350% 5/15/2013 19.00 GMAC 6.500% 5/15/2013 20.10 GMAC 5.700% 6/15/2013 10.00 GMAC 5.850% 6/15/2013 23.75 GMAC 5.850% 6/15/2013 21.00 GMAC 6.500% 6/15/2013 25.00 GMAC 6.000% 7/15/2013 19.10 GMAC 6.250% 7/15/2013 17.50 GMAC 6.500% 8/15/2013 35.75 GMAC 6.150% 9/15/2013 28.25 GMAC 5.700% 10/15/2013 25.00 GMAC 6.250% 10/15/2013 28.25 GMAC 6.300% 10/15/2013 19.00 GMAC 6.000% 11/15/2013 19.00 GMAC 6.100% 11/15/2013 16.77 GMAC 6.150% 11/15/2013 30.00 GMAC 6.200% 11/15/2013 18.00 GMAC 6.250% 11/15/2013 23.00 GMAC 6.300% 11/15/2013 16.75 GMAC 6.500% 11/15/2013 27.33 GMAC 5.700% 12/15/2013 20.10 GMAC 5.900% 12/15/2013 19.00 GMAC 6.000% 12/15/2013 22.12 GMAC 6.150% 12/15/2013 16.50 GMAC 5.250% 1/15/2014 21.00 GMAC 5.350% 1/15/2014 20.00 GMAC 6.375% 1/15/2014 16.75 GMAC 6.700% 6/15/2014 14.13 GMAC 6.750% 6/15/2014 17.00 GMAC 9.000% 7/15/2015 25.13 GMAC 8.000% 8/15/2015 15.75 GMAC 8.400% 8/15/2015 18.00 GMAC 8.650% 8/15/2015 17.00 GMAC 6.600% 8/15/2016 16.00 GMAC 6.700% 8/15/2016 20.00 GMAC 6.750% 8/15/2016 23.25 GMAC 6.875% 8/15/2016 20.75 GMAC 7.375% 11/15/2016 18.56 GMAC 7.500% 11/15/2016 21.60 GMAC 6.750% 6/15/2017 19.85 GMAC 6.900% 6/15/2017 15.88 GMAC 6.950% 6/15/2017 20.00 GMAC 7.000% 6/15/2017 20.33 GMAC 7.000% 7/15/2017 22.00 GMAC 7.500% 8/15/2017 20.25 GMAC 7.250% 9/15/2017 21.20 GMAC 7.250% 9/15/2017 16.15 GMAC 7.250% 9/15/2017 16.20 GMAC 7.125% 10/15/2017 15.00 GMAC 7.200% 10/15/2017 22.50 GMAC 7.200% 10/15/2017 19.50 GMAC 7.750% 10/15/2017 20.50 GMAC 8.000% 10/15/2017 14.75 GMAC 7.500% 11/15/2017 21.00 GMAC 7.500% 11/15/2017 22.50 GMAC 8.000% 11/15/2017 21.86 GMAC 8.125% 11/15/2017 20.50 GMAC 7.300% 12/15/2017 22.50 GMAC 7.400% 12/15/2017 15.41 GMAC 7.500% 12/15/2017 15.00 GMAC 7.300% 1/15/2018 15.90 GMAC 7.300% 1/15/2018 24.00 GMAC 7.000% 2/15/2018 10.50 GMAC 7.000% 2/15/2018 10.00 GMAC 6.750% 3/15/2018 19.81 GMAC 7.000% 3/15/2018 19.63 GMAC 7.050% 3/15/2018 18.50 GMAC 7.050% 3/15/2018 19.49 GMAC 7.050% 4/15/2018 18.00 GMAC 7.250% 4/15/2018 24.25 GMAC 7.250% 4/15/2018 20.00 GMAC 7.350% 4/15/2018 18.00 GMAC 7.375% 4/15/2018 22.00 GMAC 6.600% 5/15/2018 18.63 GMAC 7.000% 5/15/2018 20.00 GMAC 6.500% 6/15/2018 17.60 GMAC 6.650% 6/15/2018 19.50 GMAC 6.700% 6/15/2018 22.25 GMAC 6.700% 6/15/2018 14.00 GMAC 6.750% 7/15/2018 19.32 GMAC 6.875% 7/15/2018 15.17 GMAC 6.900% 7/15/2018 19.00 GMAC 6.900% 8/15/2018 15.14 GMAC 7.000% 8/15/2018 19.00 GMAC 7.250% 8/15/2018 20.71 GMAC 6.750% 9/15/2018 18.13 GMAC 6.800% 9/15/2018 14.80 GMAC 7.000% 9/15/2018 19.16 GMAC 7.150% 9/15/2018 19.50 GMAC 7.250% 9/15/2018 19.50 GMAC 6.650% 10/15/2018 15.25 GMAC 6.650% 10/15/2018 14.33 GMAC 6.750% 10/15/2018 18.08 GMAC 6.800% 10/15/2018 20.50 GMAC 6.700% 11/15/2018 18.05 GMAC 6.750% 11/15/2018 17.86 GMAC 6.250% 12/15/2018 19.00 GMAC 6.400% 12/15/2018 17.00 GMAC 6.500% 12/15/2018 16.00 GMAC 6.000% 2/15/2019 17.25 GMAC 6.000% 3/15/2019 12.50 GMAC 6.200% 4/15/2019 18.28 GMAC 6.350% 4/15/2019 16.00 GMAC 6.500% 5/15/2019 22.87 GMAC 6.750% 5/15/2019 17.00 GMAC 6.750% 5/15/2019 16.00 GMAC 6.600% 6/15/2019 21.51 GMAC 6.700% 6/15/2019 20.50 GMAC 6.750% 6/15/2019 10.68 GMAC 6.750% 6/15/2019 28.39 GMAC 6.250% 7/15/2019 24.35 GMAC 6.350% 7/15/2019 20.95 GMAC 6.350% 7/15/2019 20.95 GMAC 6.050% 8/15/2019 19.50 GMAC 6.150% 8/15/2019 19.50 GMAC 6.300% 8/15/2019 13.80 GMAC 6.300% 8/15/2019 21.00 GMAC 6.000% 9/15/2019 15.00 GMAC 6.000% 9/15/2019 19.90 GMAC 6.100% 9/15/2019 17.13 GMAC 6.150% 9/15/2019 18.50 GMAC 5.900% 10/15/2019 13.89 GMAC 6.050% 10/15/2019 21.87 GMAC 6.125% 10/15/2019 33.00 GMAC 6.150% 10/15/2019 17.00 GMAC 6.400% 11/15/2019 16.00 GMAC 6.400% 11/15/2019 19.50 GMAC 6.550% 12/15/2019 21.86 GMAC 6.550% 12/15/2019 17.80 GMAC 6.700% 12/15/2019 19.55 GMAC 6.500% 1/15/2020 15.00 GMAC 6.500% 2/15/2020 14.23 GMAC 9.000% 7/15/2020 20.00 GMAC 7.000% 9/15/2021 16.00 GMAC 7.000% 9/15/2021 21.00 GMAC 7.000% 6/15/2022 17.01 GMAC 7.000% 11/15/2023 17.50 GMAC 7.500% 3/15/2025 26.27 GMAC LLC 6.750% 7/15/2012 14.15 GMAC LLC 6.625% 5/15/2012 38.00 GMAC LLC 6.500% 5/15/2012 39.49 GMAC LLC 6.000% 12/15/2011 39.50 GMAC LLC 8.875% 6/1/2010 34.91 GMAC LLC 6.250% 6/15/2009 82.59 GMAC LLC 6.250% 5/15/2009 84.61 HARRAHS OPER CO 5.375% 12/15/2013 25.10 HARRAHS OPER CO 5.625% 6/1/2015 19.50 HARRAHS OPER CO 5.500% 7/1/2010 55.25 HAWAIIAN TELCOM 9.750% 5/1/2013 16.05 HAWAIIAN TELCOM 12.500% 5/1/2015 5.00 HERBST GAMING 7.000% 11/15/2014 6.00 HERBST GAMING 8.125% 6/1/2012 6.00 HINES NURSERIES 10.250% 10/1/2011 12.00 HOUSEHOLD FIN CO 4.125% 12/15/2008 99.25 HOUSEHOLD FIN CO 6.500% 11/15/2008 99.54 IDEARC INC 8.000% 11/15/2016 19.75 INN OF THE MOUNT 12.000% 11/15/2010 46.00 INTL LEASE FIN 5.150% 3/15/2010 60.26 INTL LEASE FIN 5.050% 3/15/2010 40.02 INTL LEASE FIN 4.875% 9/1/2010 65.40 INTL LEASE FIN 3.500% 4/1/2009 85.00 INTL LEASE FIN 5.600% 5/15/2009 70.00 INTL LEASE FIN 5.650% 6/15/2011 35.00 INTL LEASE FIN 6.375% 3/15/2009 93.00 ISOLAGEN INC 3.500% 11/1/2024 32.00 ISTAR FINANCIAL 5.800% 3/15/2011 46.75 ISTAR FINANCIAL 4.875% 1/15/2009 90.00 ISTAR FINANCIAL 6.000% 12/15/2010 47.75 JAZZ TECHNOLOGIE 8.000% 12/31/2011 40.00 K HOVNANIAN ENTR 6.000% 1/15/2010 59.75 KELLWOOD CO 7.875% 7/15/2009 65.00 KEMET CORP 2.250% 11/15/2026 34.22 KEMET CORP 2.250% 11/15/2026 36.38 KIMBALL HILL INC 10.500% 12/15/2012 2.33 KNIGHT RIDDER 7.125% 6/1/2011 50.00 LANDRY'S RESTAUR 9.500% 12/15/2014 73.50 LAZYDAYS RV 11.750% 5/15/2012 51.00 LEHMAN BROS HLDG 5.750% 1/3/2017 1.00 LEHMAN BROS HLDG 5.250% 3/8/2020 13.06 LEHMAN BROS HLDG 5.350% 3/13/2020 13.06 LEHMAN BROS HLDG 5.400% 3/20/2020 9.50 LEHMAN BROS HLDG 5.200% 5/13/2020 3.27 LEHMAN BROS HLDG 5.800% 9/3/2020 11.00 LEHMAN BROS HLDG 6.000% 1/29/2021 8.63 LEHMAN BROS HLDG 6.250% 2/5/2021 8.63 LEHMAN BROS HLDG 6.750% 7/1/2022 7.00 LEHMAN BROS HLDG 6.600% 10/3/2022 8.40 LEHMAN BROS HLDG 6.400% 10/11/2022 8.63 LEHMAN BROS HLDG 9.500% 1/30/2023 8.63 LEHMAN BROS HLDG 6.250% 2/22/2023 8.63 LEHMAN BROS HLDG 9.500% 2/27/2023 8.63 LEHMAN BROS HLDG 6.500% 2/28/2023 5.06 LEHMAN BROS HLDG 6.500% 3/6/2023 9.00 LEHMAN BROS HLDG 5.500% 3/14/2023 8.63 LEHMAN BROS HLDG 5.750% 3/27/2023 5.00 LEHMAN BROS HLDG 5.500% 4/8/2023 8.63 LEHMAN BROS HLDG 5.500% 4/15/2023 7.79 LEHMAN BROS HLDG 5.500% 4/23/2023 5.06 LEHMAN BROS HLDG 5.250% 5/20/2023 5.00 LEHMAN BROS HLDG 5.000% 5/30/2023 7.00 LEHMAN BROS HLDG 5.000% 6/10/2023 8.63 LEHMAN BROS HLDG 5.000% 6/17/2023 6.00 LEHMAN BROS HLDG 4.800% 6/24/2023 6.00 LEHMAN BROS HLDG 5.500% 8/5/2023 4.41 LEHMAN BROS HLDG 6.100% 8/12/2023 6.04 LEHMAN BROS HLDG 5.750% 9/16/2023 8.56 LEHMAN BROS HLDG 5.500% 10/7/2023 5.06 LEHMAN BROS HLDG 5.750% 10/15/2023 8.63 LEHMAN BROS HLDG 5.750% 10/21/2023 5.00 LEHMAN BROS HLDG 5.750% 11/12/2023 8.06 LEHMAN BROS HLDG 5.750% 11/25/2023 10.00 LEHMAN BROS HLDG 5.450% 3/15/2025 7.00 LEHMAN BROS HLDG 6.625% 7/27/2027 5.00 LEHMAN BROS HLDG 6.500% 9/20/2027 7.00 LEHMAN BROS HLDG 7.000% 9/27/2027 8.63 LEHMAN BROS HLDG 6.500% 10/18/2027 6.50 LEHMAN BROS HLDG 6.500% 10/25/2027 8.63 LEHMAN BROS HLDG 11.000% 3/17/2028 8.63 LEHMAN BROS HLDG 6.000% 10/23/2028 8.63 LEHMAN BROS HLDG 6.000% 11/18/2028 8.63 LEHMAN BROS HLDG 5.750% 12/16/2028 8.00 LEHMAN BROS HLDG 5.750% 12/23/2028 4.00 LEHMAN BROS HLDG 5.500% 1/27/2029 4.00 LEHMAN BROS HLDG 5.500% 2/3/2029 7.00 LEHMAN BROS HLDG 5.700% 2/10/2029 8.66 LEHMAN BROS HLDG 5.600% 2/17/2029 6.93 LEHMAN BROS HLDG 5.600% 2/24/2029 5.00 LEHMAN BROS HLDG 5.600% 3/2/2029 7.90 LEHMAN BROS HLDG 5.550% 3/9/2029 5.70 LEHMAN BROS HLDG 5.400% 3/30/2029 9.75 LEHMAN BROS HLDG 5.450% 4/6/2029 12.50 LEHMAN BROS HLDG 5.700% 4/13/2029 2.03 LEHMAN BROS HLDG 5.900% 5/4/2029 8.20 LEHMAN BROS HLDG 6.000% 5/11/2029 3.90 LEHMAN BROS HLDG 6.200% 5/25/2029 5.00 LEHMAN BROS HLDG 6.050% 6/29/2029 12.00 LEHMAN BROS HLDG 6.000% 7/20/2029 6.32 LEHMAN BROS HLDG 5.750% 8/24/2029 5.00 LEHMAN BROS HLDG 5.700% 9/7/2029 6.06 LEHMAN BROS HLDG 5.750% 9/14/2029 6.06 LEHMAN BROS HLDG 5.750% 10/12/2029 5.00 LEHMAN BROS HLDG 5.650% 11/23/2029 8.63 LEHMAN BROS HLDG 5.700% 12/14/2029 6.75 LEHMAN BROS HLDG 5.550% 1/25/2030 9.75 LEHMAN BROS HLDG 5.450% 2/22/2030 7.00 LEHMAN BROS HLDG 5.600% 2/25/2030 6.00 LEHMAN BROS HLDG 5.625% 3/15/2030 4.42 LEHMAN BROS HLDG 5.600% 5/3/2030 11.50 LEHMAN BROS HLDG 5.350% 6/14/2030 2.87 LEHMAN BROS HLDG 5.400% 6/21/2030 6.75 LEHMAN BROS HLDG 5.450% 7/19/2030 8.63 LEHMAN BROS HLDG 5.650% 8/16/2030 8.00 LEHMAN BROS HLDG 5.450% 9/20/2030 13.75 LEHMAN BROS HLDG 5.800% 10/25/2030 8.83 LEHMAN BROS HLDG 5.850% 11/8/2030 13.75 LEHMAN BROS HLDG 5.950% 12/20/2030 9.00 LEHMAN BROS HLDG 5.900% 2/7/2031 5.50 LEHMAN BROS HLDG 6.150% 4/11/2031 10.05 LEHMAN BROS HLDG 6.850% 8/16/2032 14.00 LEHMAN BROS HLDG 6.850% 8/23/2032 8.63 LEHMAN BROS HLDG 6.900% 9/1/2032 8.63 LEHMAN BROS HLDG 6.800% 9/7/2032 10.00 LEHMAN BROS HLDG 7.000% 10/4/2032 8.63 LEHMAN BROS HLDG 6.500% 11/15/2032 11.00 LEHMAN BROS HLDG 6.500% 1/17/2033 5.00 LEHMAN BROS HLDG 6.750% 3/11/2033 8.63 LEHMAN BROS HLDG 6.000% 4/30/2034 8.63 LEHMAN BROS HLDG 6.000% 7/30/2034 8.63 LEHMAN BROS HLDG 5.550% 12/31/2034 7.83 LEHMAN BROS HLDG 5.650% 12/31/2034 8.20 LEHMAN BROS HLDG 6.000% 2/21/2036 8.90 LEHMAN BROS HLDG 6.000% 2/24/2036 5.70 LEHMAN BROS HLDG 6.900% 6/20/2036 8.50 LEHMAN BROS HLDG 6.400% 12/19/2036 9.00 LEHMAN BROS HLDG 6.500% 12/22/2036 7.56 LEHMAN BROS HLDG 6.000% 2/12/2037 10.50 LEHMAN BROS HLDG 6.500% 2/13/2037 10.00 LEHMAN BROS HLDG 6.300% 3/27/2037 14.00 LEHMAN BROS HLDG 6.500% 6/21/2037 8.90 LEHMAN BROS HLDG 6.500% 7/13/2037 4.88 LEHMAN BROS HLDG 7.000% 7/27/2037 8.63 LEHMAN BROS HLDG 7.000% 9/28/2037 8.63 LEHMAN BROS HLDG 6.750% 10/26/2037 7.48 LEHMAN BROS HLDG 7.000% 11/16/2037 8.63 LEHMAN BROS HLDG 7.000% 12/28/2037 4.00 LEHMAN BROS HLDG 7.000% 1/31/2038 8.63 LEHMAN BROS HLDG 7.000% 2/1/2038 8.63 LEHMAN BROS HLDG 7.000% 2/8/2038 8.63 LEHMAN BROS HLDG 7.050% 2/27/2038 5.17 LEHMAN BROS HLDG 7.250% 2/27/2038 11.50 LEHMAN BROS HLDG 7.100% 3/25/2038 9.00 LEHMAN BROS HLDG 7.000% 4/22/2038 5.04 LEHMAN BROS HLDG 7.250% 4/29/2038 13.85 LEHMAN BROS HLDG 7.350% 5/6/2038 10.00 LEHMAN BROS HLDG 4.000% 8/3/2009 10.00 LEHMAN BROS HLDG 7.200% 8/15/2009 7.75 LEHMAN BROS HLDG 7.875% 11/1/2009 8.63 LEHMAN BROS HLDG 3.950% 11/10/2009 8.25 LEHMAN BROS HLDG 4.250% 1/27/2010 8.30 LEHMAN BROS HLDG 4.500% 7/26/2010 8.63 LEHMAN BROS HLDG 7.875% 8/15/2010 8.63 LEHMAN BROS HLDG 4.375% 11/30/2010 8.50 LEHMAN BROS HLDG 5.000% 1/14/2011 7.75 LEHMAN BROS HLDG 6.000% 4/1/2011 12.00 LEHMAN BROS HLDG 5.750% 4/25/2011 7.25 LEHMAN BROS HLDG 5.750% 7/18/2011 8.63 LEHMAN BROS HLDG 4.500% 8/3/2011 7.00 LEHMAN BROS HLDG 6.625% 1/18/2012 8.63 LEHMAN BROS HLDG 5.250% 2/6/2012 7.80 LEHMAN BROS HLDG 6.000% 7/19/2012 8.63 LEHMAN BROS HLDG 5.000% 1/22/2013 6.06 LEHMAN BROS HLDG 5.625% 1/24/2013 8.63 LEHMAN BROS HLDG 5.100% 1/28/2013 7.00 LEHMAN BROS HLDG 5.000% 2/11/2013 13.00 LEHMAN BROS HLDG 4.800% 2/27/2013 8.50 LEHMAN BROS HLDG 4.700% 3/6/2013 5.20 LEHMAN BROS HLDG 5.000% 3/27/2013 6.06 LEHMAN BROS HLDG 5.750% 5/17/2013 8.63 LEHMAN BROS HLDG 5.250% 1/30/2014 20.00 LEHMAN BROS HLDG 4.800% 3/13/2014 8.63 LEHMAN BROS HLDG 5.000% 8/3/2014 8.25 LEHMAN BROS HLDG 6.200% 9/26/2014 10.75 LEHMAN BROS HLDG 5.150% 2/4/2015 4.00 LEHMAN BROS HLDG 5.250% 2/11/2015 13.50 LEHMAN BROS HLDG 8.800% 3/1/2015 8.63 LEHMAN BROS HLDG 8.500% 8/1/2015 8.63 LEHMAN BROS HLDG 5.000% 8/5/2015 8.00 LEHMAN BROS HLDG 5.000% 12/18/2015 8.63 LEHMAN BROS HLDG 5.500% 4/4/2016 8.63 LEHMAN BROS HLDG 8.920% 2/16/2017 17.50 LEHMAN BROS HLDG 6.500% 7/19/2017 1.00 LEHMAN BROS HLDG 11.000% 10/25/2017 10.00 LEHMAN BROS HLDG 5.875% 11/15/2017 9.00 LEHMAN BROS HLDG 6.750% 12/28/2017 0.19 LEHMAN BROS HLDG 5.600% 1/22/2018 8.00 LEHMAN BROS HLDG 5.700% 1/28/2018 5.06 LEHMAN BROS HLDG 5.500% 2/4/2018 8.63 LEHMAN BROS HLDG 5.550% 2/11/2018 6.00 LEHMAN BROS HLDG 5.500% 2/19/2018 6.06 LEHMAN BROS HLDG 5.350% 2/25/2018 12.00 LEHMAN BROS HLDG 6.875% 5/2/2018 11.88 LEHMAN BROS HLDG 5.500% 11/4/2018 7.00 LEHMAN BROS HLDG 8.050% 1/15/2019 8.63 LEHMAN BROS HLDG 4.000% 4/16/2019 7.75 LEHMAN BROS HLDG 6.000% 1/22/2020 8.90 LEHMAN BROS HLDG 6.000% 2/12/2020 4.00 LEHMAN BROS HLDG 5.100% 2/15/2020 4.13 LEHMAN BROS HLDG 5.500% 2/27/2020 2.50 LEHMAN BROS HLDG 5.400% 3/6/2020 8.63 LEHMAN BROS INC 7.500% 8/1/2026 8.63 LEINER HEALTH 11.000% 6/1/2012 21.00 LEVEL 3 COMM INC 2.875% 7/15/2010 19.50 LIBERTY FINL 6.750% 11/15/2008 97.00 LITHIA MOTORS 2.875% 5/1/2014 81.00 MAGNA ENTERTAINM 8.550% 6/15/2010 46.20 MAGNA ENTERTAINM 7.250% 12/15/2009 51.00 MAJESTIC STAR 9.500% 10/15/2010 36.75 MAJESTIC STAR 9.750% 1/15/2011 10.00 MASONITE CORP 11.000% 4/6/2015 9.94 METALDYNE CORP 11.000% 6/15/2012 4.00 METALDYNE CORP 10.000% 11/1/2013 16.00 MORGAN ST DEAN W 1.250% 12/30/2008 74.25 MORRIS PUBLISH 7.000% 8/1/2013 9.75 MRS FIELDS 11.500% 3/15/2011 51.00 MUZAK LLC 9.875% 3/15/2009 95.00 MUZAK LLC/FIN 10.000% 2/15/2009 85.00 NATL CITY BANK 2.700% 8/24/2009 70.96 NATL CITY BANK 4.625% 5/1/2013 59.75 NATL CITY BK PA 7.250% 10/21/2011 39.00 NATL CITY CORP 5.750% 2/1/2009 86.10 NATL CITY CORP 3.125% 4/30/2009 90.00 NEFF CORP 10.000% 6/1/2015 18.00 NEW PLAN EXCEL 7.400% 9/15/2009 44.00 NEWARK GROUP INC 9.750% 3/15/2014 30.00 NORTH ATL TRADNG 9.250% 3/1/2012 38.03 NTK HOLDINGS INC 0.000% 3/1/2014 35.00 NUTRITIONAL SRC 10.125% 8/1/2009 21.50 OSCIENT PHARM 3.500% 4/15/2011 8.75 OSCIENT PHARM 3.500% 4/15/2011 25.75 OSI RESTAURANT 10.000% 6/15/2015 25.00 PALM HARBOR 3.250% 5/15/2024 40.38 PARK PLACE ENT 8.125% 5/15/2011 39.50 PARK PLACE ENT 7.875% 3/15/2010 56.75 PIERRE FOODS INC 9.875% 7/15/2012 7.88 PINNACLE AIRLINE 3.250% 2/15/2025 65.75 PLIANT CORP 11.125% 9/1/2009 49.00 PLY GEM INDS 9.000% 2/15/2012 41.00 PRIMUS TELECOM 3.750% 9/15/2010 51.75 PRIMUS TELECOM 12.750% 10/15/2009 73.00 PRIMUS TELECOM 8.000% 1/15/2014 24.00 QUALITY DISTRIBU 9.000% 11/15/2010 55.80 RADIAN GROUP 7.750% 6/1/2011 44.00 RAFAELLA APPAREL 11.250% 6/15/2011 38.75 REALOGY CORP 10.500% 4/15/2014 26.50 REALOGY CORP 12.375% 4/15/2015 19.00 RESIDENTIAL CAP 8.000% 2/22/2011 14.00 RESIDENTIAL CAP 8.125% 11/21/2008 83.75 RESIDENTIAL CAP 8.375% 6/30/2010 17.00 RESIDENTIAL CAP 8.500% 6/1/2012 14.00 RESIDENTIAL CAP 8.500% 4/17/2013 10.00 RESIDENTIAL CAP 8.875% 6/30/2015 21.00 RH DONNELLEY 8.875% 1/15/2016 21.94 RH DONNELLEY 8.875% 10/15/2017 22.25 RH DONNELLEY 6.875% 1/15/2013 31.50 RH DONNELLEY 6.875% 1/15/2013 24.50 RITE AID CORP 6.875% 8/15/2013 35.00 RITE AID CORP 8.625% 3/1/2015 32.94 RITE AID CORP 7.700% 2/15/2027 20.00 RJ TOWER CORP 12.000% 6/1/2013 1.13 ROUSE COMPANY 8.000% 4/30/2009 69.94 ROUSE COMPANY 3.625% 3/15/2009 59.80 SEARS ROEBUCK AC 7.500% 1/15/2013 32.25 SECURUS TECH 11.000% 9/1/2011 52.00 SIRIUS SATELLITE 2.500% 2/15/2009 82.88 SIX FLAGS INC 9.625% 6/1/2014 30.00 SIX FLAGS INC 9.750% 4/15/2013 33.00 SLM CORP 4.200% 9/15/2010 50.11 SLM CORP 4.000% 1/15/2009 95.00 SPECTRUM BRANDS 7.375% 2/1/2015 30.50 STANLEY-MARTIN 9.750% 8/15/2015 25.00 STATION CASINOS 6.625% 3/15/2018 12.75 STATION CASINOS 6.000% 4/1/2012 35.50 STATION CASINOS 6.875% 3/1/2016 13.75 STATION CASINOS 6.500% 2/1/2014 13.50 SWIFT TRANS CO 12.500% 5/15/2017 #N/A N. TEKNI-PLEX INC 12.750% 6/15/2010 65.00 TIMES MIRROR CO 7.250% 3/1/2013 24.00 TOUSA INC 9.000% 7/1/2010 16.00 TOUSA INC 7.500% 3/15/2011 2.25 TOUSA INC 7.500% 1/15/2015 0.88 TOUSA INC 9.000% 7/1/2010 14.88 TOUSA INC 10.375% 7/1/2012 2.25 TRIBUNE CO 5.670% 12/8/2008 94.00 TRIBUNE CO 5.250% 8/15/2015 16.25 TRIBUNE CO 4.875% 8/15/2010 40.00 TRONOX WORLDWIDE 9.500% 12/1/2012 26.25 TRUE TEMPER 8.375% 9/15/2011 29.80 TRUMP ENTERTNMNT 8.500% 6/1/2015 21.40 UAL CORP 5.000% 2/1/2021 41.51 UAL CORP 4.500% 6/30/2021 43.32 US AIRWAYS GROUP 7.000% 9/30/2020 59.00 VERASUN ENERGY 9.875% 12/15/2012 57.25 VERENIUM CORP 5.500% 4/1/2027 38.00 VERTIS INC 9.750% 4/1/2009 79.13 VESTA INSUR GRP 8.750% 7/15/2025 1.00 VICORP RESTAURNT 10.500% 4/15/2011 6.75 VION PHARM INC 7.750% 2/15/2012 22.50 VISTEON CORP 7.000% 3/10/2014 14.00 VISTEON CORP 8.250% 8/1/2010 35.00 WASH MUT BANK NV 5.650% 8/15/2014 0.25 WASH MUT BANK NV 5.550% 6/16/2010 28.50 WASH MUTUAL INC 4.625% 4/1/2014 16.03 WASH MUTUAL INC 4.000% 1/15/2009 69.00 WASH MUTUAL INC 4.200% 1/15/2010 66.50 WASH MUTUAL INC 7.250% 11/1/2017 16.50 WASH MUTUAL INC 8.250% 4/1/2010 16.00 WCI COMMUNITIES 9.125% 5/1/2012 21.25 WILLIAM LYON 10.750% 4/1/2013 29.85 WIMAR OP LLC/FIN 9.625% 12/15/2014 4.00 WOLVERINE TUBE 10.500% 4/1/2009 89.00 XM SATELLITE 10.000% 12/1/2009 46.88 YOUNG BROADCSTNG 8.750% 1/15/2014 15.00 YOUNG BROADCSTNG 10.000% 3/1/2011 10.00 ********* 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 ***