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/raid1/www/Hosts/bankrupt/TCR_Public/081029.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, October 29, 2008, Vol. 12, No. 258 Headlines 4S DEVELOPMENT: Files Disc. Statement to Reorganization Plan ACE SECURITIES: Moody's Lowers Three Certs. Ratings to 'C' ADVANCED HOMECARE: Moody's Lifts Ratings After Company Progress ADVANCED MICRO: Names Bod Rivet as Chief Operations Officer AIRCRAFT FINANCE: S&P Cuts Cl. A-2 Notes Rtng to 'BB-' from 'BB+' ALLIANCE BANCORP: Moody's Cuts Ratings on Six Certificate Classes AMERICAN HOME: Moody's Trims Rtngs on Two Classes of Certificates AMERICAN TECHNOLOGIES: Shareholders Okay Omaha Sale to Laurus AMERICHIP INTERNATIONAL: Chairman W. Conlin Named CEO ANTHRACITE CRE: S&P Puts 19 Trusts Ratings Under Negative Watch ARCHWAY COOKIES: Wants Sale Bidding Procedures Approved ARQ TEK: Case Summary & 20 Largest Unsecured Creditors ASCENDIA BRANDS: Court OKs Auction, to Hold Sale Hearing Oct. 29 BAYWOOD INTERNATIONAL: Taps Mayer Hoffman McCann as Accountant BEAR STERNS: Fitch Affirms Low-B Rating on Six Cert. Classes BETTER BODIES: Case Summary & 20 Largest Unsecured Creditors BIRCH MOUNTAIN: Ernst & Young LLP Quits as Auditor BONSO ELECTRONICS: Nasdaq to Delist Securities on October 30 CABELA'S CREDIT: Moody's Reviews 23 Notes Ratings for Likely Cut CABELA'S CREDIT: Moody's Reviews 23 Notes Ratings for Likely Cut CENTENNIAL COMMS: Fitch Upgrades Issuer Default Rating to B CENTURYTEL INC: Moody's Keeps '(P)Ba1' Rating Under Review CHAI HAWAII: Court Okays Focus Management as Financial Advisor CIENA CAPITAL: Committee Taps Hahn & Hessen as Counsel CITY CAPITAL: To Acquire InfoMind Inc.'s Assets for $50,000 COLONIAL CAPITAL: Fitch Cuts Preferred Stock Ratings to 'BB+' COMPUCREDIT CREDIT: Moody's Puts 20 Notes Ratings Under Review COPERNIC INC: Has Until March 19 to Comply with Bid Price Rule COREL CORPORATION: Ends Sale Talks with Third Party DANIEL T. FARKAS: Case Summary & Five Largest Unsecured Creditors DELPHI CORP: Plan Filing Period Extended to January 31, 2009 DELPHI CORP: Committee, Equity Holders to Participate in Exit Loan DELPHI CORP: Seeks 6-Month Extension of $4.35 Billion DIP Loan DELPHI CORP: Seeks to Reinstate Fraud Claims Against Appaloosa DERBES REALTY: Voluntary Chapter 11 Case Summary DOMENIC MOTORS: Voluntary Chapter 11 Case Summary DRS TECHNOLOGIES: S&P Lifts LT Corp. Credit Rating to BBB from BB- EMPIRE LAND: Creditors' Panel Objects to Pachulski Stang Fees ENRON CORP: EBS Ex-CEO Joseph Hirko Pleads Guilty to Wire Fraud EPICEPT CORP: SEC Registers $50MM Securities for Sale EQUISTAR CHEMICALS: LyondellBasell Amends Bridge Loan Agreement EVERGREEN ENERGY: Gets Ave. Closing Price Non-Compliance Notice FIELDSTONE MORTGAGE: Moody's Cuts Ratings on Worsening Performance FORT DUQUESNE: Moody's Junks Rating on $400MM Class A-1B Notes FRED LEIGHTON: Owner Says Jewelry Not Bankrupt Estate Property FREESCALE SEMICONDUCTOR: 2 Board Members Named to Legal Committee FREESCALE SEMICONDUCTOR: Board Adopts Deferred Stock Unit Deal FREMONT GENERAL: Wins Jan. 30 Extension for Own Restructuring Plan GANNETT CO: To Lay Off 10% of Staff After 33% Drop in Profit GENERAL DATACOMM: Unit Inks $250K Receivable Sales Pact with CEO GENERAL GROWTH: 2 Ind. Directors Assumes Senior Management Roles GENERAL GROWTH: Sells L.V. Malls, Seeks Delay of $900M Mortgages GENERAL GROWTH: Pres. & CEO's Resignation Cues Fitch's Ratings Cut GEO GROUP: S&P Holds 'BB+' Rating on Proposed $100MM Debt Add-On GLOBAL MOTORSPORT: Wants Plan Filing Period Extended to Dec. 2 GMAC LLC: Wants Access to Gov't Financial Rescue Plan GOE LIMA: Court Extends Time to File Schedules to November 13 GOE LIMA: U.S. Trustee Appoints Five-Member Creditors Panel GREENWICH CAPITAL: S&P Junks Rating on Class Q Certificates GPS INDUSTRIES: New Mgt. Team Aims to Achieve Revenue Growth GRANITE CITY: Gets $1-per-Share Criteria Non-Compliance Notice HAIGHTS CROSS: Kevin McAliley Ceases as Executive Vice President HAYES LEMMERZ: Car Production Slowdown Cues Fitch to Hold Ratings HEARTLAND AUTOMOTIVE: Court Approves Agreement With BP Plc HEXION SPECIALTY: Credit Suisse & Deutsche Won't Fund Merger HOME EQUITY: Moody's Downgrades Ratings on 19 Cert. Transactions HOST HOTELS: S&P Affirms Corporate Credit Rating at 'BB' HUNTSMAN CORP: Credit Suisse & Deutsche Won't Fund Merger HYDROGEN LLC: Appoints Triax Capital to Sell Cleantech Power INFOSONICS CORP: NASDAQ Extends Compliance Period Until April 13 INGEARS CORP: Court Converts Case to Chapter 7 Liquidation INPHONIC INC: Obtains Confirmation of Liquidating Plan INTEREP NATIONAL: Court Converts Case to Chapter 7 Liquidation IRWIN HOME: Moody's Lowers Ratings on 23 Certificate Transactions JC REED: Says Chapter 11 Filing Not Due to Founder's Death JEFFERSON COUNTY: To Make Payment on General Obligation Bonds JEFFERSON COUNTY: To Vote on Another 30-Day Sewer-Debt Reprieve JOHN MUMEY: Case Summary & 34 Largest Unsecured Creditors JOHNSON BROADCASTING: Wants Schedules Deadline Extended to Dec. 1 JPMORGAN CHASE: S&P Lowers Ratings on Seven Classes of Certificate KIDSPEACE INC: Moody's Junks Debt Rating; Remains Under Watchlist KIRK PIGFORD: Wants to Employ Intracoastal Realty as Broker KIRK PIGFORD: Files Emergency Motion to Use Cash Collateral LANDMARK FBO: S&P Trims Rating to 'B-' on Reduced Liquidity LEHMAN BROTHERS: Fitch Withdraws Ratings and All of Its Units LINENS 'N THINGS: Picks DJM Realty To Market 371 Retail Stores LIZ CLAIBORNE: Earnings Revision Cues S&P's Negative CreditWatch MASTR SECOND: Poor Collateral Performance Cues Moody's Ratings Cut METALDYNE CORP: Amendment Negotiations Cue Moody's Ratings Cut METROMEDIA STEAKHOUSE: Interim Approval to Borrow Up $1MM Given MORGAN STANLEY: S&P Affirms Ratings on 24 Classes of Certificates MRS FIELDS: Chapter 11 Plan Effective Oct. 24 NASIR EBRAHIMI: Case Summary & 12 Largest Unsecured Creditors NEUMANN HOMES: Court Approves Proofs of Claim Filing Deadlines NEUMANN HOMES: Court OKs $12M Sale of Properties to Guaranty Bank NEUROGEN CORP: Nasdaq Suspends $1 Minimum Bid Rule until May 29 NEW CENTURY: Moody's Trims Three Certs. Ratings on 'C' from 'Caa2' NEWBURGH INVESTMENT: Case Summary & 20 Largest Unsecured Creditors NV TELEVISION: S&P Chips Credit Rating to 'B-'; Outlook Negative ORBIT PETROLEUM: Amends Chapter 11 Petition, Names New Chief OSCIENT PHARMACEUTICALS: NASDAQ Waives Action to Delist Security PARCS-R MASTER: S&P Assigns 'CCC+' Rating on $19MM Unit Series PAPPAS TELECASTING: Nov. 14 Hearing on Last 10 TV Stations Set PETTERS CO: Accomplice Pleads Guilty to Money Laundering PILGRIM'S PRIDE: S&P Trims Credit Rating on Likely Covenant Breach PRIEST LAKE: Case Summary & 20 Largest Unsecured Creditors PROELITE INC: Gets Default Notice from Showtime Network PROVIDENCE SERVICE: S&P Puts 'B+' Credit Rating Under Neg. Watch RED SHIELD: Court Approves $18.9 Million Plant Sale to Patriarch ROBERT GAVIN: Voluntary Chapter 11 Case Summary ROBERT MCDONALD: Case Summary & 20 Largest Unsecured Creditors RYLAND GROUP: Posts $65.7MM Net Loss for Quarter Ended Sept. 30 SEMGROUP LP: Chapter 11 Examiner To Report Work Plan by Nov. 6 SEMGROUP LP: U.S. Trustee Forms Nine-Member Creditors Committee SMARTIRE SYSTEMS: To Sell Business and Assets to Bendix SPEEDWAY MOTORSPORTS: S&P Trims Rating to 'BB'; Removes Neg. Watch SPHERIX INC: Nasdaq Waives Delisting Action Until January 16 SPRINT NEXTEL: Names Sven-Christer Nilsson to Board STEVE WOODS: Case Summary & 19 Largest Unsecured Creditors STOCKMANS BANK: Weiss Ratings Assigns "Very Weak" E- Rating TEKOIL & GAS: Committee May Retain P&H as Bankruptcy Counsel TEKOIL & GAS: Gulf Coast Taps William Roberts as Consultant TEKOIL & GAS: Gulf Coast Taps Neligan Foley as Bankruptcy Counsel TEKOIL & GAS: U.S. Trustee Appoints Five-Member Creditors Panel TEKOIL & GAS: Court Extends Plan Filing Period to December 29 VAIL PLAZA: Files For Chapter 11 Bankruptcy in Colorado VAIL PLAZA: Case Summary & 18 Largest Unsecured Creditors VOLTARC TECHNOLOGIES: Case Summary & 20 Largest Unsec. Creditors VONAGE HOLDINGS: Amends Conditions to Notes Purchase Offer W.R. GRACE: Addresses Various Objections to Disclosure Statement W.R. GRACE: Wants Sale of San Leandro, California Asset Approved W.R. GRACE: Reports Results for 3rd Quarter ended September 30 WESTMORELAND COAL: Creates Unit to Realize Tax Credits WORLDSPACE INC: Nasdaq to Suspend Trading of Stocks on Oct. 30 * U.S. Retail Sector Bracing for Grim Holiday Season, S&P Says * Upcoming Meetings, Conferences and Seminars ********* 4S DEVELOPMENT: Files Disc. Statement to Reorganization Plan ------------------------------------------------------------ 4S Development Ltd. LLP submitted to the U.S. Bankruptcy Court for the District of Colorado a disclosure statement explaining its plan of reorganization. A hearing to approve the disclosure statement is set for Dec. 4, 2008, at 1:30 p.m. Objections are due Nov. 20, 2008. Means of Executing the Plan The Debtor will continue to market and sell its lots or a substantial real estate holdings in Routt County, Colorado, for the benefit of the estate and its creditors. The plan provides for an orderly sale of its real property in the ordinary course of business, the refinancing of all or a portion of the secured indebtness at any time, or the sale of the project in a single sale transaction. Treatment of Claims Class 1 priority claims will be paid in full. The Class 2 allowed secured claim of Routt County Treasurer, amounting to $1,770, will be allowed in its full amount and paid with interest at the statutory rate. The Class 3 allowed secured claim of The First State Bank of Altus, totalling $5,478,340, will be paid in full by Dec. 31, 2010, provided the sale proceeds allow for such payment. The Class 4 allowed secured claim of Robinson Construction Company, which totalled $2,138,819, will be paid in full by Dec. 31, 2010, based on a sale of real property securing its claim or a refinance of the Debtor's secured indebtness. The $300,000 Class 5 allowed secured claim of Juels Carlson and the Sally A. Carlson Revocable Trust, the $75,000 Class 6 allowed secured claim of John C. Doolittle and Roberta M. Doolittle Living Trust, and the Class 7 allowed secured claim of Jack M. Horner will be paid in full on Dec. 31, 2010, provided the sale proceeds from the collateral securing these claims allow for such payment. The Class 8 allowed secured claim of Wells Fargo Financial Leasing Inc. in the amount of $30,000, will be paid in 60 equal monthly installments of $629.32 until paid in full by no later than Aug. 1, 2013. The Class 9 allowed secured claim of Alpine Bank, totalling $1,389,322, will be paid in full by Dec. 31, 2010, provided the sale proceeds from the collateral securing these claims allow for such payment. Classes 10(a) and 10(b) consists of the allowed claims held by unsecured creditors amounting to $10,761,588. Class 10(a) consists of general unsecured creditors of the Debtor. Class 10(b) consists of those unsecured creditors who hold allowed claims existing as a result of 4S's personal guaranty of debts owed by Mountain Adventure Property Investments LLC. Class 10(a) and 10(b) will be paid a pro rata percentage of the net lot or project proceeds after all senior creditors are paid in full, until Class 10(a) and 10(b) claims have been paid in full, which will occur by no later than Dec. 31, 2010. Class 11 interest holders will retain their interests in the Debtor notwithstanding the fact that most or all of the Debtor's assets will be sold or refinance to pay creditors. A full-text copy of the disclosure statement is available for free at http://researcharchives.com/t/s?343f About 4S Development Headquartered in Hayden, Colorado, 4S Development Ltd, LLP acquires and develops real estate. The company filed for Chapter 11 protection on Feb. 26, 2008 (Bankr.D.Co. Case No. 08-12162). Philipp C. Theune, Esq. at Theune Law Offices, P.C. represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors it listed total assets of $75,825,498 and total liabilities of $5,684,487. ACE SECURITIES: Moody's Lowers Three Certs. Ratings to 'C' ---------------------------------------------------------- Moody's Investors Service has downgraded 4 certificates from a transaction issued by ACE Securities Corp. Home Equity Loan Trust. The transaction is backed by second lien loans. The certificates were downgraded because the bonds' credit enhancement levels, including excess spread and subordination were low compared to the current projected loss numbers at the previous rating levels. The actions take into account the continued and worsening performance of transactions backed by closed-end-second collateral. Substantial pool losses of over the last few months have eroded credit enhancement available to the mezzanine and senior certificates. Despite the large amount of write-offs due to losses, delinquency pipelines have remained high as borrowers continue to default. Issuer: ACE Securities Corp. Home Equity Loan Trust, Series 2005- SL1 -- Cl. M-1, Downgraded to B3 from Aa2 -- Cl. M-2, Downgraded to C from Baa1 -- Cl. M-3, Downgraded to C from Ba3 -- Cl. M-4, Downgraded to C from Caa2 ADVANCED HOMECARE: Moody's Lifts Ratings After Company Progress --------------------------------------------------------------- Moody's Investors Service upgraded the Corporate Family Rating of Advanced Homecare Holdings, Inc. to B2 from B3. Concurrently Moody's upgraded the first lien senior secured credit facility to B1 from B2 and the second lien term loan to Caa1 from Caa2. The outlook for the ratings is stable. The last rating action was August, 2007 when Moody's assigned the original ratings in connection with the acquisition of Advanced Homecare by Thoma Cressey Bravo, Inc. The upgrade to B2 from B3 reflects the progress the company has demonstrated since the original ratings were assigned. Over the past year the company has: 1) successfully integrated several companies acquired in 2006, 2007 and 2008; 2) established a track record of operating as a combined entity; 3) demonstrated deleveraging due to growth in revenue and EBITDA, achieved both organically and through acquisitions; and 4) successfully operated through Medicare reimbursement changes to home health care which went into effect January 1, 2008. The B2 rating reflects primarily the company's limited size and geographic diversity, considerable financial leverage and Moody's expectation that the company will continue to be acquisitive. The ratings also reflect risks typical of the home health industry including: high exposure to Medicare and challenges hiring and retaining qualified nurses and therapists, of which there are nationwide shortages. The ratings are supported by the stable, recurring nature of home healthcare revenues, the strong underlying fundamentals of the industry, and Advanced Homecare's leading market positions in its key geographies. Moody's upgraded these ratings: -- Corporate Family Rating, to B2 from B3 -- $25 million First Lien Revolving Credit Facility due 2013, to B1, LGD3, 39% (from B2, LGD3, 40%) -- $106.5 million First Lien Term Loan B due 2014, to B1, LGD3, 39% (from B2, LGD3, 40%) -- $29 million Second Lien Term Loan due 2015, to Caa1, LGD6, 90% (Caa2, LGD6, 91%) -- Probability of Default Rating, to B2 from B3 The outlook is stable. Advanced Homecare (doing business as Encompass Home Health), headquartered in Dallas, Texas, provides home healthcare services in the Texas, Oklahoma and New Mexico markets. The company is the market leader within its target markets. For the twelve months ended September 30, 2008 Advanced Homecare generated revenue of approximately $140 million. ADVANCED MICRO: Names Bod Rivet as Chief Operations Officer ----------------------------------------------------------- Advanced Micro Devices Inc. disclosed in a Securities and Exchange Commission filing the expansion of key executive roles. Bob Rivet, former executive vice president and chief financial officer, was named chief operations and administrative officer. Emilio Ghilardi, senior vice president and general manager of sales for Europe, Middle East and Africa (EMEA), will assume the role of chief sales officer at the beginning of 2009. "With our recently-announced Asset Smart strategy, AMD is accelerating our transformation to capitalize on our proven expertise in both microprocessor and leading-edge graphics to deliver the innovations that matter most to our customers," said Dirk Meyer, AMD president and CEO. "Placing these proven, experienced leaders in expanded roles will strengthen our customer relationships, enhance our execution and drive progress against our corporate objectives. Emilio brings more than 20 years of computer sales and marketing experience that will help AMD continue to strengthen and expand our global customer relationships. Bob's proven operational discipline and leadership will help AMD evolve operationally as a smarter, more flexible company." Mr. Ghilardi, 50, will assume his new position as part of a planned executive transition. AMD's current Senior Vice President and Chief Sales Officer Gustavo Arenas will transition into a role focused exclusively on further strengthening AMD's global customer and strategic relationships, one of his stated objectives when he assumed the CSO role earlier this year. Mr. Ghilardi will continue in his current role until a replacement is announced. About Advanced Micro Headquartered in Sunnyvale, California, Advanced Micro Devices Inc. (NYSE: AMD) -- http://www.amd.com/-- provides innovative processing solutions in the computing, graphics and consumer electronics markets. At June 28, 2008, the company's consolidated balance sheet showed $9.8 billion in total assets, $8.1 billion in total liabilities, $189 million in minority interest in consolidated subsidiaries, and $1.5 billion in total stockholders' equity. * * * As reported in the Troubled Company Reporter on Aug. 12, 2008, Fitch has affirmed these ratings on Advanced Micro Devices Inc.: Issuer Default Rating at 'B-'; Senior unsecured debt at 'CCC/RR6' and Rating Outlook at Negative. AIRCRAFT FINANCE: S&P Cuts Cl. A-2 Notes Rtng to 'BB-' from 'BB+' ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class A-2 notes issued by Aircraft Finance Trust to 'BB-' from 'BBB+'. In addition, S&P affirmed the 'B' rating on class A-1. S&P removed both the lowered and affirmed ratings from CreditWatch with negative implications. Additionally, S&P assigned a negative outlook to both classes. The downgrades primarily reflect S&P's view of ongoing value declines in the transaction's portfolio, as well as the payment priority mechanisms within the structure. S&P also took into account fuel prices that, while recently were reduced, are still high by historical standards, and the rapidly slowing global economy. In addition, for the first time with respect to this transaction, S&P used Standard & Poor's new proprietary cash flow model to run stress tests, which also incorporated more conservative assumptions. As with other aircraft securitizations originated in the late 1990s to early 2000s, the fleet underlying this transaction has a significant concentration of older aircraft designed in the 1980s- -some of which, in S&P's view, are likely to become economically obsolete earlier than S&P originally anticipated. The weighted average age of the fleet in the Aircraft Finance Trust transaction, which was issued in 1999, is approximately 13.4 years. These planes, which include older B737s and MD80s, are less fuel-efficient than newer models, which led us to adjust S&P's useful life and depreciation assumptions. Furthermore, S&P believes the slowing global economy and the high likelihood of a recession in the U.S. and some other developed countries will continue to put additional pressure on the airline industry and, in its view, lessen the credit quality of lessees contained in the securitization pool. Although S&P used its new proprietary model in the analysis in evaluating this transaction, S&P used the same methodology that it used in its initial rating analysis of previous aircraft operating lease pool securitizations. As part of this analysis, S&P reviewed various sets of cash flow stress tests designed to capture the impact of a number of risk factors and their timing on the cash flow S&P expects the 33 aircraft in the fleet to generate. These cash flow stress assumptions are consistent with those applied to recent pooled aircraft asset-backed securitizations and are more conservative than what S&P used when this transaction was originally evaluated, reflecting sector performance after 2000. Typical Cash Flow Stresses Rating BBB(ii) BB(ii) Depression 1 start(i) Depression 2 start 2008-2012 2008-2012 Depression 3 start 2021-2024 2021-2024 Length of depression (mos) 48 48 Lessee defaults - depression 1(i) Lessee defaults - depression 2 & 3 (%) 48-57 42-48 Lease rate decline - depression 1(i) Lease rate decline - depression 2,3(%) 51-58 35-46 Repossession/remarketing time (mos) 7-9 4-6 Lease term - depression 1(i) Lease term - depression 2 (mos) 36 36 Repossession costs (mil. $) 0.2-1.5 0.2-1.5 (i)At inception, S&P assumed that the securitization would experience three economic depressions. For midstream projections, S&P assumes that the first depression has already taken place. In these cases, S&P runs the two remaining depressions for the life of the transaction. (ii)Rating stress analysis; not indicative of the credit ratings assigned to the AFT notes. The A-1 notes were not refinanced on the expected maturity date in 2004 and have an outstanding balance of $512.5 million. Amortization for the A-1 notes isn't scheduled to start until June 2009; although the A-1 notes will begin to receive an increasing share of principal going forward, balance reduction of these notes will be difficult given the current appraised value of the fleet ($550.9 million) and S&P's forecasted cash flows generated by the planes in the securitization. The A-2 notes have a significantly smaller outstanding balance ($78.76 million) compared with the A-1 notes and are currently receiving all available principal payments. However, as the A-1 notes start to amortize according to the extended pool factors in June 2009, the payment mechanism within the structure that allocates principal among subclasses will eventually divert the majority of cash to pay down the A-1 notes, to the detriment of the A-2 notes. S&P's rating outlook for both classes is negative. Although the A-2 notes have a relatively small outstanding balance, S&P believes that for these notes to sustain a 'BB-' rating threshold, the A-2 tranche principal payments would need to be augmented by additional principal repayments, such as from aircraft sales, before payment priorities shift in favor of the A-1 notes. S&P believes aircraft sales at sufficiently high prices are unlikely in current market conditions and therefore have a negative outlook on this class. S&P's rating actions and outlooks incorporate S&P's current expectations of a downturn in the global aviation market, driven by recessions or slow growth in all regions of the world, and high jet fuel prices. ALLIANCE BANCORP: Moody's Cuts Ratings on Six Certificate Classes ----------------------------------------------------------------- Moody's Investors Service has downgraded 6 certificates from a transaction issued by Alliance Bancorp Trust. The transaction is backed by second lien loans. The certificates were downgraded because the bonds' credit enhancement levels, including excess spread and subordination were low compared to the current projected loss numbers at the previous rating levels. The actions take into account the continued and worsening performance of transactions backed by closed-end-second collateral. Substantial pool losses of over the last few months have eroded credit enhancement available to the mezzanine and senior certificates. Despite the large amount of write-offs due to losses, delinquency pipelines have remained high as borrowers continue to default. Issuer: Alliance Bancorp Trust 2007-S1 -- Cl. A-1, Downgraded to Ca from Baa3 -- Cl. A-2, Downgraded to Ca from Baa3 -- Cl. A-3, Downgraded to Ca from Baa3 -- Cl. A-4, Downgraded to C from B3 -- Cl. M-1, Downgraded to C from Caa2 -- Cl. M-2, Downgraded to C from Caa3 AMERICAN HOME: Moody's Trims Rtngs on Two Classes of Certificates ----------------------------------------------------------------- Moody's Investors Service has downgraded 2 certificates from a transaction issued by American Home Mortgage Investment Trust. The transaction is backed by second lien loans. The certificates were downgraded because the bonds' credit enhancement levels, including excess spread and subordination were low compared to the current projected loss numbers at the previous rating levels. The actions take into account the continued and worsening performance of transactions backed by closed-end-second collateral. Substantial pool losses of over the last few months have eroded credit enhancement available to the mezzanine and senior certificates. Despite the large amount of write-offs due to losses, delinquency pipelines have remained high as borrowers continue to default. Issuer: American Home Mortgage Investment Trust 2007-2 -- Cl. II-A, Downgraded to Ca from B3 -- Cl. II-M-1, Downgraded to C from Caa3 AMERICAN TECHNOLOGIES: Shareholders Okay Omaha Sale to Laurus ------------------------------------------------------------- American Technologies Group Inc. disclosed in a Securities and Exchange Commission filing that on Oct. 20, 2008, at a special meeting of shareholders, the company received the approval of shareholders to sell substantially all of the assets of Omaha Holdings Corp., to a subsidiary of Laurus Master Fund. The transaction as described in the Definitive Proxy was closed on Oct. 21, 2008, resulting in the satisfaction of $13,580,810 plus accrued interest and fees payable to Laurus Fund and/or its affiliates and the satisfaction of the outstanding Gryphon Debt. As a result of the transaction, the Company is without operating assets. Going Concern Doubt RBSM LLP, in New York, expressed substantial doubt about American Technologies Group Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended July 31, 2007. The auditing firm reported that the company has suffered recurring losses and is experiencing difficulty in generating sufficient cash flow to meet its obligations and sustain its operations. Since its inception, the company has incurred significant operating losses totaling $84.5 million. In addition, the company also received a letter from LV Administrative Services Inc., acting in the capacity of administrative and collateral agent for Laurus Master Fund, that demands the immediate payment of all past due amounts owed to Laurus Master Fund by Feb. 1, 2008. American Technologies Group Inc.'s consolidated balance sheet at April 30, 2008, showed $17.2 million in total assets and $23.1 million in total liabilities, resulting in a $5.9 million total stockholders' deficit. At April 30, 2008, the company's consolidated balance sheet also showed strained liquidity with $11.4 million in total current assets available to pay $23.1 million in total current liabilities. The company reported net income of $79,735 on net sales of $7.3 million for the third quarter ended April 30, 2008, compared with a net loss of $1.3 million on net sales of $8.8 million in the same period ended April 30, 2007. About American Technologies Based in Fort Worth, Texas, American Technologies Group Inc. (Nasdaq: ATGR) -- http://www.ntxstl.com/-- was engaged, prior to 2001, in the development, commercialization and sale of products and systems using patented and proprietary technologies including catalyst technology and water purification. The company largely ceased operations during 2001 and began focusing efforts on restructuring and refinancing. In fiscal year ended July 31, 2005, the company successfully continued these efforts by settling various pending law suits and reducing outstanding liabilities. In September 2005, the company entered into various financing transactions and acquired North Texas Steel Company Inc. On April 25, 2006, the company purchased certain assets of Whitco Company LP, a business conducting the sale and distribution of steel and aluminum lighting poles. The Whitco assets are held in a separate subsidiary called Whitco Poles Inc. AMERICHIP INTERNATIONAL: Chairman W. Conlin Named CEO ----------------------------------------------------- AmeriChip International Inc. disclosed in a Securities and Exchange Commission filing on Oct. 21, 2008, its Board of Directors enacted through resolution these changes with regard to the executive management: -- William P. Conlin to be appointed CEO of the Company while retaining his position as Chairman of the Board. -- Drew Mouton has been appointed Vice-Chairman of the Board, overseeing corporate communications, investor relations, functions of the Treasury, strategic direction and other non-operational departments of the company; and -- Ken Mann will retain his position as Interim President of the company until Nov. 1, 2008, or until such time as a suitable replacement has been recruited. About AmeriChip International Based in Clinton Township, Mich., AmeriChip International Inc. (OTC BB: ACHI.OB) -- http://www.americhiplacc.com/-- holds a patented technology known as Laser Assisted Chip Control, which can be used to re-engineer the manufacturing process for industrial metal machining applications. According to AmeriChip International, this technology, when implemented by the customer, will eliminate dangerous ribbon-like steel chips that tangle around moving tool parts, automation devices and other components essential to the machine processing of low to medium grade carbon steels and non-ferrous metal parts. Going Concern Doubt As reported in the Troubled Company Reporter on March 13, 2008, Jewett, Schwartz, Wolfe & Associates, in Hollywood, Fla., expressed substantial doubt about Americhip International Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Nov. 30, 2007. The auditing firm pointed to the company's recurring losses from operations. AmeriChip International Inc.'s balance sheet as of Aug. 31, 2008, showed $6,750,114 in total assets, $6,945,282 in total liabilities, resulting to $198,581 in shareholders' deficit. The company also had $34,935,799 in accumulated deficit. At Aug. 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $842,781 in total current assets available to pay $4,562,016 in total current liabilities. AmeriChip International posted $1,188,032 in net losses on $572,376 in net revenues for the three months ended Aug. 31, 2008, compared with $102,598 in net losses on $863,826 in net revenues for three months ended Aug. 31, 2007. The company's material recurring losses from operations, accumulated deficit, limited cash, negative working capital, among others, indicate that it may be unable to continue as a going concern for a reasonable period of time. ANTHRACITE CRE: S&P Puts 19 Trusts Ratings Under Negative Watch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on 19 classes from Anthracite CRE CDO 2006-HY3 Ltd. and Centerline 2007- 1 Resecuritization Trust on CreditWatch with negative implications. The CreditWatch negative placements reflect Standard & Poor's preliminary analysis of the transactions, which are primarily collateralized by commercial mortgage-backed securities, including those with exposure to Mervyns. The CreditWatch placements reflect the placement of the ratings on several CMBS classes on CreditWatch negative, as detailed in "30 Ratings On Six U.S. CMBS Deals Placed On CreditWatch Negative Due To Mervyn's Liquidation," published Oct. 22, 2008. The CreditWatch placements on the CMBS resecuritizations will be updated or resolved following further analysis of the underlying CMBS collateral. Details for Anthracite 2006-HY3 are: According to the trustee report dated Sept. 17, 2008, Anthracite 2006-HY3's current assets included classes K through Q ($92.9 million, 16%) from GE Commercial Mortgage Corp.'s series 2005-C4. GE 2005-C4 represents the largest asset concentration collateralizing this deal. S&P placed the ratings on all of the GE 2005-C4 classes held in Anthracite 2006-HY3, excluding the first-loss class Q ($36 million, 6%), on CreditWatch negative following its preliminary analysis of the CMBS transactions with tenant exposure to Mervyns. Anthracite 2006-HY3's current asset pool includes 58 CMBS classes ($445.9 million, 75%) from 16 distinct transactions issued between 2002 and 2006, of which Standard & Poor's rates $308.8 million (52%). Since S&P's last rating action on Anthracite 2006-HY3, on Aug. 11, 2008, it has reviewed five ($221.9 million, 37%) CMBS transactions held as collateral in Anthracite 2006-HY3. The current assets include $137.1 million (23%) first-loss CMBS and six commercial real estate loans ($149.7 million, 25%), which are all either subordinate B-notes or mezzanine loans. Details for Centerline 2007-1 are: According to the trustee report dated Sept. 22, 2008, Centerline 2007-1's current assets included classes H through P ($37.7 million, 4%) from Morgan Stanley Capital I Trust 2006-TOP 21 (MSC 2006-TOP21). S&P placed the ratings on all of the MSC 2006-TOP21 classes held in Centerline 2007-1, excluding the first- loss class P ($8.6 million), on CreditWatch negative following S&P's preliminary analysis of the CMBS transactions with tenant exposure to Mervyns. Centerline 2007-1's current asset pool includes 114 classes ($882.2 million, 89%) from 18 distinct CMBS transactions issued between 2000 and 2007, of which Standard & Poor's rates $570 million (58%). Since S&P's last rating action on Centerline 2007-1, on July 3, 2008, it has reviewed nine ($640.9 million, 65%) CMBS transactions held as collateral in Centerline 2007-1. The CMBS reviews include JPMorgan Chase Commercial Mortgage Securities Trust 2007-CIBC18 (JPM 2007-CIBC 18, $107.4 million, 11%). S&P lowered the ratings on seven classes from JPM 2007- CIBC18 on Oct. 27, 2008, as detailed in "J.P. Morgan Chase Commercial Mortgage Corp.'s series 2007-CIBC18 Ratings Lowered And Affirmed," published on RatingsDirect. The current assets include $311.8 million (32%) of first-loss CMBS and three classes ($103.6 million, 11%) from ARCap 2006-RR7 Resecuritization Inc., which is a CMBS resecuritization deal. The CreditWatch negative placements follow S&P's evaluation of Mervyns exposure in various transactions. As the status of individual properties with exposure to Mervyns becomes available, S&P will update its CreditWatch placements or initiate rating actions as warranted. S&P is evaluating the impact of this exposure in several collateralized debt obligation transactions primarily collateralized by commercial real estate loans and will take rating actions as warranted when S&P's analysis is complete. Ratings Placed on Creditwatch Negative Anthracite CRE CDO 2006-HY3 Ltd. CDOs Rating ------ Class To From ----- -- ---- B-FL BBB-/Watch Neg BBB- B-FX BBB-/Watch Neg BBB- C-FL BB+/Watch Neg BB+ C-FX BB+/Watch Neg BB+ D BB/Watch Neg BB E-FL B/Watch Neg B E-FX B/Watch Neg B F CCC+/Watch Neg CCC+ G CCC/Watch Neg CCC Centerline 2007-1 Resecuritization Trust CDO certificates Rating ------ Class To From ----- -- ---- A-1 AA+/Watch Neg AA+ A-2 AA-/Watch Neg AA- B A+/Watch Neg A+ C A-/Watch Neg A- D BBB+/Watch Neg BBB+ E BBB-/Watch Neg BBB- F BB+/Watch Neg BB+ G BB-/Watch Neg BB- H B+/Watch Neg B+ J CCC+/Watch Neg CCC+ ARCHWAY COOKIES: Wants Sale Bidding Procedures Approved ------------------------------------------------------- Archway Cookies LLC and Mother's Case & Cookie Co. ask the United States Bankruptcy Court for the District of Delaware to approve proposed bidding procedures for the sale of substantially all of their assets, free and clear of liens, claims, encumbrances and interests. A hearing is set for Nov. 6, 2008, at 2:30 p.m., to consider the Debtors' motion. According to the motion, the Debtors have a need for immediate sale to maintain and preserve the value of their estates, and to maximize recoveries for their stakeholders. The Debtor says they were unable to consummate any transaction before they filed for bankruptcy due to significant liquidity constraints. Bids for the Debtor's asset together with a cash deposit of 10% of the purchase price must be delivered by no later than 4:00 p.m., on Nov. 21, 2008, to Duane Morris LLP at 1100 North Market Street, Suite 1200 in Wilmington Delaware. An auction will take place on Nov. 24, 2008, at 10:00 a.m., at the firm's office followed by a sale hearing the following day at 2:30 p.m. The Debtors expect the sale to close on Nov. 26, 2008. If the prevailing bidder fails to consummate the sale, the Debtors will be authorized to complete the sale with the backup bidder without further order of the Court otherwise the Debtors will seek all available damages from backup bidder. The Debtors has yet to select a stalking-horse bidder. A full-text copy of the Debtors' sale motion together with the bidding procedures is available for free at: http://ResearchArchives.com/t/s?3445 About Archway Cookies Battle Creek, Michigan-based Archway Cookies, LLC,-- http://www.archwaycookies.com/-- makes soft-baked cookies and crackers. In 1998, Specialty Foods Corp. acquired Archway for about $100 million. Parmalat Finanziaria of Italy acquired Mother's Cake and Cookie Company and Archway Cookies from The Specialty Foods for $250 million in 2000. Parmalat later sold its North American Bakery Group, which includes the Archway brands, Mother's brands and the U.S. and Canadian private label cookie businesses, to the private equity firm Catterton Partners and their operating partner Insight Holdings in 2005. Archway Cookies filed for Chapter 11 protection on Oct. 6, 2008 (Bankr. D. Del. Case No. 08-12323). Its affiliate, Mother's Cake & Cookie Co. also filed for bankruptcy (Bankr. D. Del. Case No. 08-12326). Michael R. Lastowski, Esq., at Duane Morris, LLP, represent the Debtors in their restructuring efforts. In their filing, the Debtors listed estimated assets of between $50 million and $100 million and estimated debts of between $500 million and $1 billion. ARQ TEK: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------ Debtor: ARQ Tek Construction I, Ltd. c/o Lisa Colquitt 603 Upson El Paso, TX 79902 Bankruptcy Case No.: 08-31753 Type of Business: The Debtor operates a construction company. Chapter 11 Petition Date: October 27, 2008 Court: Western District of Texas (El Paso) Debtor's Counsel: Sidney J. Diamond, Esq. usbc@sidneydiamond.com 3800 N Mesa C-4 El Paso, TX 79902 Tel: (915) 532-3327 Fax: (915) 532-3355 Total Assets: $2,534,615 Total Debts: $2,560,133 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/txwb08-31753.pdf ASCENDIA BRANDS: Court OKs Auction, to Hold Sale Hearing Oct. 29 ---------------------------------------------------------------- BankruptcyData.com reports that the U.S. Bankruptcy Court for the District of Delaware approved the motion of Ascendia Brands, Inc., and its bankrupt affiliates, pursuant to Sections 105(a), 363 and 365 of the Bankruptcy Code and Bankruptcy Rules 6004 and 6006, for an order: (a) approving procedures in connection with the sale of the Debtors' assets, (b) scheduling the related auction and hearing to consider approval of the sale and a hearing to consider approval of stalking horse protections, (c) approving procedures related to the assumption of certain executory contracts and unexpired leases, (d) approving the form and manner of notice thereof and (e) granting related relief. The Court also ordered: (a) authorizes the sale of such assets pursuant to the modified purchase agreement free and clear of liens, claims, encumbrances and other interests, (b) approves the assumption and assignment of certain executory contracts and unexpired leases related thereto and (c) grants related relief. The Court will hold a hearing on Oct. 29, 2008, to consider the sale of the purchased assets. Headquartered in Hamilton, New Jersey, Ascendia Brands, Inc. -- http://www.ascendiabrands.com/-- makes and sells branded consumer products primarily in North America and over 80 countries as well. The company's customers include Walmart, Walgreens, Kmart, Meijer Stores, Target, and CVS. The company and six of its affiliates filed for Chapter 11 protection on Aug. 5, 2008 (Bankr. D. Del. Lead Case No.08-11787). Kenneth H. Eckstein, Esq., and Robert T. Schmidt, Esq., at Kramer Levin Naftalis & Frankel LLP, represent the Debtors in their restructuring efforts. M. Blake Cleary, Esq., Edward J. Kosmoswki, Esq., and Patrick A. Jackson, Esq., at Young, Conaway, Stargatt & Taylor, LLP, serve as the Debtors' Delaware counsel. The Debtors selected Epiq Bankruptcy Solutions LLC as their claims agent. When the Debtors filed for protection from their creditors, they listed total assets of $194,800,000 and total debts of $279,000,000. BAYWOOD INTERNATIONAL: Taps Mayer Hoffman McCann as Accountant -------------------------------------------------------------- Baywood International, Inc. disclosed in a Securities and Exchange Commission filing that on Oct. 20, 2008, Baywood International, Inc., dismissed its principal independent accountant Malone & Bailey, PC. The company's Board of Directors approved the decision to dismiss M&B. Except as reported in the Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2007, which stated that "[t]he accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern and that "the Company has suffered recurring losses from operations and has a working capital deficiency, which raises substantial doubt about its ability to continue as a going concern," the report of M&B on the Company's financial statements for the fiscal year ended December 31, 2007 did not contain an adverse opinion or a disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principles. M&B did not perform the audit on the Company's financial statements for the fiscal year ended Dec. 31, 2006. In connection with the audit of the Company's financial statements for the fiscal year ended Dec. 31, 2007, and in the subsequent interim periods through Oct. 20, 2008, there were no disagreements with M&B on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure which, if not resolved to the satisfaction of M&B, would have caused M&B to make reference to the subject matter of the disagreement in connection with its report. Effective Oct. 20, 2008, the Company engaged Mayer Hoffman McCann P.C. to act as the Company's principal independent accountant. The Board of Directors of the Company approved the decision to engage MHM. During the fiscal years ended Dec. 31, 2007 and 2006 and during all subsequent interim periods through Oct. 20, 2008, the Company did not consult MHM regarding (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company's financial statements, and neither a written report nor oral advice was provided to the Company that MHM concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue; or (ii) any matter that was the subject of a disagreement or a reportable event with its former accountants, M&B. M&B was provided a copy of the foregoing disclosures and was requested to furnish a letter addressed to the United States Securities and Exchange Commission stating whether or not it agrees with the above disclosures. In its letter, M&B said, "We have read the statements made by Baywood International, Inc. We agree with the statements concerning our firm. We have no basis to agree or disagree with the Company's comments contained in the fourth or fifth paragraphs under. About Baywood International Headquartered in Scottsdale, Ariz., Baywood International Inc. (OTC BB: BYWD) -- http://www.bywd.com/-- is a nutraceutical company specializing in the development, marketing and distribution of nutraceutical products under the LifeTime(R) and Baywood brands. Going Concern Doubt Malone & Bailey, PC, in Houston, expressed substantial doubt about Baywood International Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's recurring losses from operations and working capital deficiency. The Troubled company Reporter reported on Aug. 26, 2008, that Baywood International Inc. disclosed a net loss of $559,443 on net sales of $3,399,422 for the second quarter ended June 30, 2008, compared with a net loss of $770,187 on net sales of $3,206,550 in the same period last year. At June 30, 2008, the company's consolidated balance sheet showed $13,057,856 in total assets, $10,304,869 in total liabilities, and $2,752,987 in total stockholders' equity. The company's consolidated balance sheet at June 30, 2008, showed strained liquidity with $3,136,904 in total current assets available to pay $9,456,099 in total current liabilities. BEAR STERNS: Fitch Affirms Low-B Rating on Six Cert. Classes ------------------------------------------------------------ Fitch Ratings has affirmed and assigned Rating Outlooks to Bear Sterns Commercial Mortgage Securities Trust 2007-PWR16 as: -- $72.8 million class A-1 at 'AAA'; Outlook Stable; -- $681 million class A-2 at 'AAA'; Outlook Stable; -- $58.2 million class A-3 at 'AAA'; Outlook Stable; -- $130.7 million class A-AB at 'AAA'; Outlook Stable; -- $954.4 million class A-4 at 'AAA'; Outlook Stable; -- $412.5 million class A-1A at 'AAA'; Outlook Stable; -- $331.4 million class A-M at 'AAA'; Outlook Stable; -- $273.4 million class A-J at 'AAA'; Outlook Stable; -- Interest-only class X at 'AAA'; Outlook Stable; -- $33.1 million class B at 'AA+'; Outlook Stable; -- $33.1 million class C at 'AA'; Outlook Stable; -- $33.1 million class D at 'AA-'; Outlook Stable; -- $20.7 million class E at 'A+'; Outlook Stable; -- $24.9 million class F at 'A'; Outlook Stable; -- $29 million class G at 'A-'; Outlook Stable; -- $41.4 million class H at 'BBB+'; Outlook Stable; -- $33.1 million class J at 'BBB'; Outlook Stable; -- $33.1 million class K at 'BBB-'; Outlook Stable; -- $16.6 million class L at 'BB+'; Outlook Stable; -- $12.4 million class M at 'BB'; Outlook Stable; -- $12.4 million class N at 'BB'; Outlook Stable; -- $8.3 million class O at 'B+'; Outlook Stable; -- $8.3 million class P at 'B'; Outlook Stable; -- $8.3 million class Q at 'B-'. Outlook Stable; Fitch does not rate the $41.4 million class S. The affirmations are due to stable pool performance and minimal principal paydown since issuance. The Rating Outlooks reflect the likely direction of the rating changes over the next one to two years. As of the October 2008 distribution date, the pool's aggregate certificate balance has been reduced 0.4% to $3.302 billion from $3.314 billion at issuance. Currently there are no delinquent or specially serviced loans. Fitch has reviewed the performance of the two shadow rated loans, Clear Creek Plaza (0.2%) and Residential Inn San Antonio (0.2%). Both loans maintain investment grade shadow ratings due to stable performance. Clear Creek Plaza is a five-year amortizing balloon loan secured by four single-story anchored retail buildings totaling 56,494 square feet in Carson City, Nevada. The servicer reported year end 2007 debt service coverage ratio was 2.11 times, compared to 1.97x at issuance. Occupancy has remained stable at 97.6% since issuance. Residential Inn San Antonio is a five-year interest-only loan secured by a 120 room limited service hotel in San Antonio, Texas. The servicer reported YE 2007 DSCR was 4.16x, compared to 4.38x at issuance. Occupancy as of the first quarter of 2008 was 78.9% with Revenue Per Average Room at $60.77, compared to occupancy of 90% with RevPar at $78.32 at issuance. The decline in occupancy and revenue was due to seasonal fluctuation. Fitch has identified ten (2.3%) loans of concern due to declining DSCR and/or occupancy. The largest Fitch loan of concern (0.9%) is secured by a 634-unit garden-style apartment complex located in New Castle, Delaware. The property has been under substantial renovation since May 2007, which is anticipated at issuance. The servicer reported YE 2007 DSCR was 0.92x, compared to 1.19x at issuance. The occupancy rate as of the second quarter of 2008 was 81.4%, compared to 95.3% at issuance. The second largest Fitch loan of concern (0.3%) is secured by a 135,401 SF multi-tenant retail center in Lakewood, Colorado. The servicer reported YE 2007 DSCR was 0.94x, compared to 1.35x at issuance. The occupancy rate as of the second quarter of 2008 was 75%, compared to 78% at issuance. No loans are scheduled to mature within the next two years. Loan maturities are concentrated in the year 2012 and 2017, when 23% and 72.9% of the pool, respectively, are scheduled to mature. BETTER BODIES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Better Bodies Personal Training Corp. 2122 N Craycroft Road, Suite 120-A Tucson, AZ 85712 Bankruptcy Case No.: 08-14920 Chapter 11 Petition Date: October 24, 2008 Court: District of Arizona (Tucson) Judge: Eileen W. Hollowell Debtor's Counsel: Eric Slocum Sparks, Esq. eric@ericslocumsparkspc.com Eric Slocum Sparks, P.C. 110 S. Church Ave., Suite 2270 Tucson, AZ 85701 Tel: (520) 623-8330 Fax: (520) 623-9157 Total Assets: $42,447 Total Debts: $1,567,864 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/azb08-14920.pdf BIRCH MOUNTAIN: Ernst & Young LLP Quits as Auditor -------------------------------------------------- Birch Mountain Resources Ltd. disclosed in a Securities and Exchange Commission filing that that Ernst & Young LLP, Chartered Accountants, resigned as the auditor of the Corporation effective Sept. 23, 2008. E&Y resigned on its own initiative. There were no reservations in the former auditor's reports for the two most recently completed financial years or for any period subsequent to the most recently completed period for which an audit report was issued and preceding the date of the Former Auditor's resignation. There are no reportable events between the corporation and the former auditor. The resignation of the Former Auditor as auditor of the Corporation has been approved by the Corporation's audit committee and by its board of directors. Headquartered in Calgary, Canada, Birch Mountain Resources Ltd. (TSX and AMEX: BMD) -- http://www.birchmountain.com/-- operates the Muskeg Valley Quarry, an early production stage limestone quarry that produces limestone aggregate products for sale to customers in the Athabasca Oil Sands region of northeastern Alberta. The company is engaged in the regulatory approval process for the Hammerstone Project which will expand the Muskeg Valley Quarry and add an integrated limestone processing complex to provide manufactured limestone-based products such as quicklime, as well as related environmental services such as spent lime re-calcining. Going Concern Doubt Birch Mountain Resources Ltd. disclosed in its report on Form 6-K which was filed with the U.S. Securities and Exchange Commission on May 20, 2008, that the company currently has insufficient revenue to meet its yearly operating and capital requirements. The company has incurred operating losses since its inception in 1995, and as of March 31, 2008, has an accumulated deficit of C$48.2 million. Losses are from costs incurred in the early operation and development of the Muskeg Valley Quarry and the Hammerstone Project, exploration of mineral opportunities and mineral technology research. Future operating losses may occur as a result of the continued operation of the Muskeg Valley Quarry and development of the Hammerstone Project. The company has a working capital balance at March 31, 2008, of C$2.1 million, a decrease of approximately C$5.5 million from Dec. 31, 2007. The company has formally engaged RBC Capital Markets to assist in the evaluation of strategic alternatives, which includes discussing debt and equity strategies for its immediate and medium term capital needs. To the extent the company raises additional capital by issuing equity or convertible debt securities, ownership dilution to shareholders will result. The company believes these factors raise substantial doubt about the company's ability to continue as a going concern. BONSO ELECTRONICS: Nasdaq to Delist Securities on October 30 ------------------------------------------------------------ Bonso Electronics International, Inc. received a NASDAQ Staff Determination Letter indicating that the company had failed to comply with NASDAQ's requirements for continued listing as set forth in Marketplace Rule 4320(e)(12), because the company had not filed its Annual Report on Form 20-F for the fiscal year ended March 31, 2008, with the United States Securities & Exchange Commission. The Letter stated that trading of Bonso's common stock would be suspended from trading at the opening of business on Oct. 30, 2008, and that NASDAQ would delist Bonso's common stock, unless Bonso requested an appeal of this determination. Bonso has requested a hearing before a NASDAQ Listing. Qualifications Panel to review the Staff Determination. There can be no assurance that the Panel will grant the company's request for continued listing. The company expects that it will be in compliance with Marketplace Rule 4320(e)(12) when it files its Form 20-F with the SEC, which the company anticipates filing prior to the hearing date. Headquartered in Hong Kong, Bonso Electronics International Inc. (NASDAQ: BNSO) -- http://www.bonso.com/-- designs, develops, produces and sells electronic sensor-based and wireless products for private label Original Equipment Manufacturers, Original Brand Manufacturers and Original Design Manufacturers. The company's sensor-based scale products consists of bathroom, kitchen, office, jewelry, laboratory, postal and industrial scales that are used in consumer, commercial and industrial applications. Its wireless telecommunications products consist of two-way radios and cordless telephones that are used in consumer and commercial applications. It also receives revenue from certain customers for the development and manufacture of tooling and molding for scales and telecommunication products. These tools and moulds are used by the company for the manufacture of products. It also generates some sales of scrap materials. Bonso USA Inc. is the company has a wholly owned subsidiary. CABELA'S CREDIT: Moody's Reviews 23 Notes Ratings for Likely Cut ---------------------------------------------------------------- Moody's Investors Service has placed the ratings under review for possible downgrade on 23 classes of asset-backed notes issued by Cabela's Credit Card Master Note Trust. These notes are backed by a revolving pool of unsecured, revolving co-branded VISA credit card receivables. Moody's has a negative outlook on the credit card industry and believes the current economic environment makes several elements of Cabela's credit card program vulnerable to significant performance volatility. In particular, the protracted turmoil in the credit markets has reduced the financial flexibility for companies, like Cabela's, that have relatively limited access to the capital markets. With an expectation of worsening collateral performance in the months to come, balance sheet strength and liquidity have become increasingly important dimensions to Moody's credit analysis, especially for those issuers with limited alternative funding resources. Moreover, in this economic environment, the risks associated with a relatively weak funding profile may be compounded for those seller/servicers that also have relatively weak backup servicing arrangements. The current, consumer-led downturn in the economy may have a more pronounced effect on companies, like Cabela's, that have a single platform retail operation. Although Cabela's credit card Trust is composed of high-quality collateral, the value proposition of these cards is highly linked to the ongoing viability of the Cabela's merchandizing. Furthermore, as Moody's has previously stated, the lack of a contracted backup servicer compounds the risk of collateral performance deterioration in the event that the Trust's servicer, World's Foremost Bank ("WFB", wholly owned subsidiary of Cabela's), can no longer fulfill its obligations as servicer. Trust performance was not the primary driver of Moody's review. The performance of the underlying receivables in the Trust is generally characterized by a substantially higher-than-industry- average principal payment rate, a higher-than-industry-average yield, and a lower-than-industry-average charge-off rate. To date, Trust performance trends have been deteriorating more or less in line with those of the industry. As of September 2008, the Trust had an excess spread margin of approximately 10% - well above the industry average. In recent months, Moody's has adjusted performance expectations for the Trust to reflect performance expectations over the intermediate-term time horizon. Current expectations for key performance metrics of the trust are a charge-off rate in the range of 2.5% - 4.5%, yield in the range of 19% - 22%, and a principal payment rate in the range of 40% - 44%. These ranges incorporate an expectation of collateral performance deterioration that is consistent with Moody's view on macro industry trends and how these factors may specifically impact the performance of the Cabela's Trust. In its review, Moody's will assess the ability of Cabela's and WFB to develop and execute on contingency funding plans, as well as their ability to mitigate the servicing risks discussed above. Moody's review will also place continued focus on Trust performance metrics relative to developments in the fast-changing macro economy. The complete rating actions are: Under Review for Possible Downgrade Issuer: Cabela's Credit Card Master Note Trust -- $75,000,000 Class A Series 2004-I Asset Backed Notes, rated Aa3 -- $175,000,000 Class A Series 2004-II Asset Backed Notes, rated Aa3 -- $140,000,000 Class A-1 Series 2005-I Asset Backed Notes, rated Aaa -- $76,250,000 Class A-2 Series 2005-I Asset Backed Notes, rated Aaa -- $17,500,000 Class B Series 2005-I Asset Backed Notes, rated A2 -- $10,625,000 Class C Series 2005-I Asset Backed Notes, rated Baa2 -- $5,625,000 Class D Series 2005-I Asset Backed Notes, rated Ba2 -- $250,000,000 Class A-1 Series 2006-III Asset Backed Notes, rated Aaa -- $182,500,000 Class A-2 Series 2006-III Asset Backed Notes, rated Aaa -- $35,000,000 Class B Series 2006-III Asset Backed Notes, rated A2 -- $21,250,000 Class C Series 2006-III Asset Backed Notes, rated Baa2 -- $11,250,000 Class D Series 2006-III Asset Backed Notes, rated Ba2 -- $202,650,000 Class A-1 Series 2008-I Asset Backed Notes, rated Aaa -- $229,850,000 Class A-2 Series 2008-I Asset Backed Notes, rated Aaa -- $29,000,000 Class B-1 Series 2008-I Asset Backed Notes, rated A2 -- $6,000,000 Class B-2 Series 2008-I Asset Backed Notes, rated A2 -- $21,250,000 Class C-2 Series 2008-I Asset Backed Notes, rated Baa2 -- $11,250,000 Class D Series 2008-I Asset Backed Notes, rated Ba2 -- $98,000,000 Class A-1 Series 2008-IV Asset Backed Notes, rated Aaa -- $72,000,000 Class A-2 Series 2008-IV Asset Backed Notes, rated Aaa -- $16,000,000 Class B-1 Series 2008-IV Asset Backed Notes, rated A2 -- $8,500,000 Class C-1 Series 2008-IV Asset Backed Notes, rated Baa2 -- $5,500,000 Class D Series 2008-IV Asset Backed Notes, rated Ba2 Note that the Series 2004-I-A and 2004-II-A notes listed herein are currently insured by Ambac Assurance Corporation. These notes have been under review for possible downgrade since Sept. 18, 2008, as a result of Moody's pending review of the insurance financial strength ratings of Ambac. Cabela's is a public retail company headquartered in Sidney, Nebraska. Cabela's was established in 1961 and sells outdoor apparel, camping, hunting, and fishing supplies through its mail order catalogs, twenty-six retail superstores located across the United States, outlet stores, and its web site. CABELA'S CREDIT: Moody's Reviews 23 Notes Ratings for Likely Cut ---------------------------------------------------------------- Moody's Investors Service has placed the ratings under review for possible downgrade on 23 classes of asset-backed notes issued by Cabela's Credit Card Master Note Trust. These notes are backed by a revolving pool of unsecured, revolving co-branded VISA credit card receivables. Rationale Moody's has a negative outlook on the credit card industry and believes the current economic environment makes several elements of Cabela's credit card program vulnerable to significant performance volatility. In particular, the protracted turmoil in the credit markets has reduced the financial flexibility for companies, like Cabela's, that have relatively limited access to the capital markets. With an expectation of worsening collateral performance in the months to come, balance sheet strength and liquidity have become increasingly important dimensions to Moody's credit analysis, especially for those issuers with limited alternative funding resources. Moreover, in this economic environment, the risks associated with a relatively weak funding profile may be compounded for those seller/servicers that also have relatively weak backup servicing arrangements. The current, consumer-led downturn in the economy may have a more pronounced effect on companies, like Cabela's, that have a single platform retail operation. Although Cabela's credit card Trust is composed of high-quality collateral, the value proposition of these cards is highly linked to the ongoing viability of the Cabela's merchandizing. Furthermore, as Moody's has previously stated, the lack of a contracted backup servicer compounds the risk of collateral performance deterioration in the event that the Trust's servicer, World's Foremost Bank ("WFB", wholly owned subsidiary of Cabela's), can no longer fulfill its obligations as servicer. Trust performance was not the primary driver of Moody's review. The performance of the underlying receivables in the Trust is generally characterized by a substantially higher-than-industry- average principal payment rate, a higher-than-industry-average yield, and a lower-than-industry-average charge-off rate. To date, Trust performance trends have been deteriorating more or less in line with those of the industry. As of September 2008, the Trust had an excess spread margin of approximately 10% - well above the industry average. In recent months, Moody's has adjusted performance expectations for the Trust to reflect performance expectations over the intermediate-term time horizon. Current expectations for key performance metrics of the trust are a charge-off rate in the range of 2.5% - 4.5%, yield in the range of 19% - 22%, and a principal payment rate in the range of 40% - 44%. These ranges incorporate an expectation of collateral performance deterioration that is consistent with Moody's view on macro industry trends and how these factors may specifically impact the performance of the Cabela's Trust. In its review, Moody's will assess the ability of Cabela's and WFB to develop and execute on contingency funding plans, as well as their ability to mitigate the servicing risks discussed above. Moody's review will also place continued focus on Trust performance metrics relative to developments in the fast-changing macro economy. The complete rating actions are: Under Review for Possible Downgrade Issuer: Cabela's Credit Card Master Note Trust -- $75,000,000 Class A Series 2004-I Asset Backed Notes, rated Aa3 -- $175,000,000 Class A Series 2004-II Asset Backed Notes, rated Aa3 -- $140,000,000 Class A-1 Series 2005-I Asset Backed Notes, rated Aaa -- $76,250,000 Class A-2 Series 2005-I Asset Backed Notes, rated Aaa -- $17,500,000 Class B Series 2005-I Asset Backed Notes, rated A2 -- $10,625,000 Class C Series 2005-I Asset Backed Notes, rated Baa2 -- $5,625,000 Class D Series 2005-I Asset Backed Notes, rated Ba2 -- $250,000,000 Class A-1 Series 2006-III Asset Backed Notes, rated Aaa -- $182,500,000 Class A-2 Series 2006-III Asset Backed Notes, rated Aaa -- $35,000,000 Class B Series 2006-III Asset Backed Notes, rated A2 -- $21,250,000 Class C Series 2006-III Asset Backed Notes, rated Baa2 -- $11,250,000 Class D Series 2006-III Asset Backed Notes, rated Ba2 -- $202,650,000 Class A-1 Series 2008-I Asset Backed Notes, rated Aaa -- $229,850,000 Class A-2 Series 2008-I Asset Backed Notes, rated Aaa -- $29,000,000 Class B-1 Series 2008-I Asset Backed Notes, rated A2 -- $6,000,000 Class B-2 Series 2008-I Asset Backed Notes, rated A2 -- $21,250,000 Class C-2 Series 2008-I Asset Backed Notes, rated Baa2 -- $11,250,000 Class D Series 2008-I Asset Backed Notes, rated Ba2 -- $98,000,000 Class A-1 Series 2008-IV Asset Backed Notes, rated Aaa -- $72,000,000 Class A-2 Series 2008-IV Asset Backed Notes, rated Aaa -- $16,000,000 Class B-1 Series 2008-IV Asset Backed Notes, rated A2 -- $8,500,000 Class C-1 Series 2008-IV Asset Backed Notes, rated Baa2 -- $5,500,000 Class D Series 2008-IV Asset Backed Notes, rated Ba2 Note that the Series 2004-I-A and 2004-II-A notes listed herein are currently insured by Ambac Assurance Corporation. These notes have been under review for possible downgrade since September 18, 2008 as a result of Moody's pending review of the insurance financial strength ratings of Ambac. Background Cabela's is a public retail company headquartered in Sidney, Nebraska. Cabela's was established in 1961 and sells outdoor apparel, camping, hunting, and fishing supplies through its mail order catalogs, twenty-six retail superstores located across the United States, outlet stores, and its web site. CENTENNIAL COMMS: Fitch Upgrades Issuer Default Rating to B ----------------------------------------------------------- Fitch Ratings has upgraded the ratings for Centennial Communications Corp. and its subsidiaries as: Centennial Communications Corp. -- Issuer default rating to 'B' from 'B-'; -- Senior unsecured notes to 'CCC+/RR6' from 'CCC/RR6'. Centennial Cellular Operating Co.; -- IDR to 'B' from 'B-'; -- Senior secured credit facility to 'BB/RR1' from 'BB-/RR1'; -- Senior unsecured notes to 'BB/RR1' from 'B+/RR2'. Fitch also withdraws these ratings on the senior subordinated notes at CCOC that were repaid: -- Senior subordinated notes 'CCC+/RR5'. The Rating Outlook is Stable. Approximately $1.9 billion of debt securities are affected by these actions. The ratings upgrade at CYCL reflects the improved credit profile of the company due primarily to operating performance improvements in the U.S. and Puerto Rico. Leverage at the end of the first fiscal quarter 2009 was 5.0 times compared with 5.7x a year ago. Free cash flow has improved over the last 12 months to $71 million. Fitch expects CYCL will continue to have stable financial performance during fiscal 2009, which should increase the company's liquidity position and result in moderately greater FCF. Rating concerns include the company's competitive position and much smaller scale as a regional niche operator in the U.S., which results in a higher level of business risk. Fitch views the potential strategic separation of the company's U.S. and Puerto Rican operations as an event risk. If the company pursued these plans, CYCL would need to redeem all of the existing debt in its capital structure due to debt covenant provisions, and issue new debt for the U.S and Puerto Rican operations. CYCL's current financial flexibility and liquidity is solid based on its cash position, undrawn revolver availability and internal cash generation. In addition, CYCL's maturity schedule is favorable as the company has no near-term maturities. Cash at the end of the first fiscal quarter 2009 was $124 million. Fitch believes cash levels will build during fiscal 2009 given CYCL's expectations for approximately $90 million in FCF. As a result, Fitch considers CYCL's internally generated liquidity position as strong. CYCL's senior secured credit facility matures in 2011 with $550 million outstanding, with no annual amortization payments, although the company is subject to mandatory prepayments as determined by the excess cash flow sweep (50%) if the total leverage at the end of the fiscal year is greater than or equal to 4x. The senior secured credit facility also includes a $150 million revolving facility that matures in 2010 that is undrawn. While a Lehman subsidiary was a lender with respect to $17.5 million of CYCL's $150 million revolver, at the time of Lehman's bankruptcy filing another bank acquired the majority of this commitment. CENTURYTEL INC: Moody's Keeps '(P)Ba1' Rating Under Review ---------------------------------------------------------- Moody's Investors Service has placed the debt ratings of Embarq Corporation and all of its operating subsidiaries on review for possible upgrade, following the announcement of CenturyTel's (rated Baa2/P-2) plans to acquire the company in a stock-for-stock transaction. The ratings of CenturyTel remain on review for possible downgrade. Under the terms of the agreement, Embarq shareholders will receive 1.37 CenturyTel shares for each share of Embarq common stock they own. The transaction reflects an enterprise value of approximately $11.6 billion, including the planned assumption of $5.8 billion of Embarq's debt. The companies anticipate closing this transaction in the second quarter of 2009. The transaction is expected to generate significant synergies, initially estimated by the companies' at about $400 million annually. In addition, the merger will produce a company with operations in 33 states, 8 million access lines and 2 million broadband customers. While the acquisition of Embarq increases CenturyTel's exposure to more competitive urban/suburban markets, the increase in scale is expected to bolster its overall competitive position and increase operational and capital efficiencies, especially those related to network modernization and new product development. Nevertheless, the challenge to CenturyTel of integrating a company twice its size is substantial and will be an additional and significant focus of Moody's ongoing review of its ratings. The combined company is expected to generate significant operating cash flow, especially after anticipated synergies. In addition, free cash flow levels are expected to also benefit from modest capital efficiencies. Pro forma leverage is projected to be less than 2.5 times Debt to EBITDA and dividends are initially expected to be about 50% of pro forma free cash flow. However, uncertainties exist with regard to the new company's leverage targets and future shareholder return strategies. These decisions, together with Moody's assessment as to whether CenturyTel will achieve the anticipated synergies and CenturyTel's ultimate plans with regard to Embarq's debt will have a critical impact on Embarq's ratings. Before the transaction can close, numerous regulatory approvals, including those of several state Public Utility Commissions, are required. Conditions that may be imposed by some of these states' regulatory authorities could have a material impact on the combined entities' future operating performance and financial profile. In addition, the Federal Communication Commission is currently engaged in a comprehensive reform of intercarrier compensation and universal service. Changes to the current structure of these two regulatory frameworks could also have an impact on the combined company's future operating and financial performance and will also be a focus of Moody's review. Finally, Moody's will assess management's commitment and ability to maintain an investment grade credit profile for the combined company in light of the intense competitive challenges confronting the sector and its stated appetite for additional M&A activity. These ratings have been placed on review for possible upgrade: * Embarq Corporation: Senior Unsecured Bank Credit Facilities, rated Baa3 and Senior Unsecured Regular Bonds/Debentures, rated Baa3 * Embarq-Florida, Inc.: Senior Secured First Mortgage Bonds, rated Baa1 * United Telephone Company of Pennsylvania: Senior Secured First Mortgage Bonds, rated Baa1 * Carolina Telephone & Telegraph: Senior Unsecured Debentures, rated Baa1 * Centel Capital Corp.: Senior Unsecured Debentures, Baa2 Ratings continuing on review for possible downgrade are: * CenturyTel, Inc.: Senior Unsecured, Baa2; Senior Unsecured Shelf, (P) Baa2; Preferred Shelf, (P) Ba1 and Commercial Paper, Prime-2. CenturyTel, Inc., headquartered in Monroe, Louisiana is a regional communications company engaged primarily in providing telephone and broadband services in various, predominately rural, regions of the United States. The company served approximately 2.0 million total access lines in 25 states as of September 30, 2008. LTM revenues were about $2.6 billion. CenturyTel's ratings were placed on review for possible downgrade on June 24, 2008. Based in Overland Park, Kansas, Embarq Corporation is the fourth largest local telecommunications company in the United States by access lines. As of the end of 3Q'2008, the company had about 5.9 million access lines and generated LTM revenues of $6.2 billion. The ratings of Embarq and its subsidiaries were affirmed on January 9, 2008. CHAI HAWAII: Court Okays Focus Management as Financial Advisor -------------------------------------------------------------- Focus Management Group has been appointed as Financial Advisor to CHA Hawaii, LLC and its affiliates pursuant to an order entered by the United States Bankruptcy Court for the District of Hawaii. Focus Management Group is providing CHA Hawaii with advisory services regarding the preparation of its Debtor-in-Possession cash budgets as well the internal administration of its Chapter 11 case. This includes a full range of services assisting in preparation of the SOFAs and Schedules and the Monthly Operating Reports. Focus has also assisted in managing the post petition vendor environment and analysis and planning for asset sales. The Focus team is led by Juanita Schwartzkopf, a restructuring advisor with wide-ranging experience in chapter 11 reorganizations, distressed business sales, financial restructurings and operational turnarounds in the healthcare sector. She can be reached at (800) 528-8985. About Focus Management Group Headquartered in Tampa, Florida, Focus Management Group -- http://www.focusmg.com-- provides professional services in turnaround management, insolvency proceedings, business restructuring and operational improvement with a senior-level team of ninety professionals. The firm provides a full portfolio of services to distressed companies and their stakeholders, including secured lenders and equity sponsors. About CHA Hawaii Based in Wichita, Kans., CHA Hawaii, LLC runs a health care business. The Debtor and three of its debtor-affiliates filed for Chapter 11 reorganization on Aug. 29, 2008 (Bankr. D. Del. Lead Case No. 08-12027). The Court approved the joint administration of CHA Hawaii, LLC and its affiliates Hawaii Medical Center East, LLC, Hawaii Medical Center West, LLC, and Hawaii Medical Center, LLC on September 3, 2008. Hawaii Medical Center LLC is a partnership comprised of CHA Hawaii, an affiliate of Cardiovascular Hospitals of America (CHA), a leading US hospital management company, and the over 130 Hawaii-based physicians who form Hawaii Physician Group LLC. When the Debtor filed for protection from its creditors, it listed assets of between $1 million and $10 million, and debts of between $50 million and $100 million. CIENA CAPITAL: Committee Taps Hahn & Hessen as Counsel ------------------------------------------------------ The Official Committee of Unsecured Creditors of Ciena Capital LLC and its debtor-affiliates asks the United States Bankruptcy Court for the Southern District of New York for permission to employ Hahn & Hessen LLP as its counsel. Hahn & Hessen is expected to: a) render legal advice to the Committee with respect to its duties and powers; b) assist the Committee in its investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors, the operation of the Debtors' business, the desirability of continuance of the business and any other matters relevant to the case or to the business affairs of the Debtors; c) advise the Committee with respect to any proposed of the Debtors' assets or a sale of the Debtors' business operations and any other relevant matters; d) advise the Committee with respect to any proposed plan of reorganization or liquidation and the prosecution of claims against third parties, if any, and any other matters relevant to the cases or to the formulation of a plan or liquidation; e) assist the Committee in requesting the appointment of a trustee or examiner pursuant to Section 1104 of the Bankruptcy Code; and f) perform other legal services, which may be required by, and which are in the best interests of the Committee. The firm's professionals and their compensation rates are: Designations Hourly Rates ------------ ------------ Partners $640-$795 Special Counsel $475-$675 Associates $270-$550 Paralegals $215-$245 Mark T. Power, Esq., attorney at firm, assures the Court that the firm does not hold any interests adverse to the Debtors' estate and is "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Headquartered in New York City, Ciena Capital LLC -- http://www.cienacapital.com/-- offers commercial real estate finance services including loans and long term investment property financing. The company and 11 affiliates files for Chapter 11 protection on Sept. 30, 2008 (Bankr. S.D. N.Y. Lead Case No. 08- 13783). Peter S. Partee, Esq., at Hunton & Williams LLP represents the Debtor as counsel. The Debtors selected Donlin Recano & Company Inc. as their claims agent. The U.S. Trustee of Region 2 appointed creditors to serve on an Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed both assets and debts between $100 million and $500 million. CITY CAPITAL: To Acquire InfoMind Inc.'s Assets for $50,000 ----------------------------------------------------------- City Capital Corp. disclosed in a Securities and Exchange Commission filing that it has entered into an Asset Acquisition Agreement with InfoMind, Inc., doing business as Nitty Gritty Marketing. Under this agreement, the company is acquiring certain properties and other assets and intellectual property for a sum of $50,000. Closing is expected to occur Oct. 31, 2008, but not later than Nov. 30, 2008. Going Concern Doubt As reported in the Troubled Company Reporter on May 19, 2008, Spector & Wong, LLP, in Pasadena, Calif., expressed substantial doubt about City Capital Corporation's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm said that the company's ability to continue in the normal course of business is dependent upon the success of future operations. The auditing firm added that the company has recurring losses, substantial working capital deficiency, stockholders' deficit and negative cash flows from operations. The auditing firm also pointed to the company's default in certain notes payable, recent withdrawal as a business development company and commencement of new operations. City Capital Corp.'s consolidated balance sheet at June 30, 2008, showed $2,406,041 in total assets and $3,668,041 in total liabilities, resulting in a $1,261,973 total stockholders' deficit. At June 30, 2008, the company's consolidated balance sheet also showed strained liquidity with $2,078,845 in total current assets available to pay $3,589,084 in total current liabilities. The company reported a net loss of $7644,140, on revenues of $116,679, for the first quarter ended June 30, 2008, compared with a net loss of $3,044,868, on zero revenues, in the same period last year. About City Capital Based in Franklin, Tenn., City Capital Corporation (OTC BB: CTCC) -- http://www.citycapitalcorp.net/-- acquires and renovates distressed properties in multiple industry segments, reselling them at a profit. COLONIAL CAPITAL: Fitch Cuts Preferred Stock Ratings to 'BB+' ------------------------------------------------------------- Fitch Ratings has downgraded The Colonial BancGroup Inc's long- and short-term Issuer Default ratings to 'BBB-/F3' from 'BBB/F2', reflecting continued asset quality deterioration and the impact of heightened credit losses on CNB's earnings. While continued erosion was anticipated, the magnitude of credit quality deterioration has exceeded Fitch's expectations. Although CNB has been aggressive in addressing its problem assets, Fitch believes the current market environment will impede the company's ability to cure its problem loans, and the inflow of new non- performers will continue. CNB's substantial exposure to troubled markets, particularly Florida, and residential real estate construction, has driven its significant increase in problem assets, with NPAs climbing to 4.43% at Sept. 30, 2008 from 1.65% at March 31, 2008. Fitch acknowledges the efforts management has made to bolster its capital, liquidity, and reserve levels. CNB's recent announcement to suspend its dividend (resulting in savings of approximately $77 million annually) will also facilitate capital retention and aid the holding company's liquidity. Moreover, provisioning continues to exceed net chargeoffs, as reserves grew to 1.88% of total loans; however, reserve coverage of non-performing assets continued its downward trend, amounting to 42% at Sept. 30, 2008. Fitch views CNB's capital raising, preservation efforts, and increased reserve measures as necessary given the credit challenges the company continues to experience. Though CNB may qualify for additional capital enhancements through the Treasury's Capital Purchase Program, tangible common equity remains low in light of its risk profile at 5.27%. Should credit quality problems accelerate, a further downgrade of CNB's ratings would be likely. Conversely, should challenges in asset quality stabilize such that CNB's capital and earnings are no longer threatened by credit losses, Fitch would consider revising the Rating Outlook to Stable. Fitch has downgraded these ratings with a Negative Outlook: The Colonial BancGroup, Inc. -- Long-term IDR to 'BBB-' from 'BBB'; -- Short-term IDR to 'F3' from 'F2'; -- Subordinated Debt to 'BB+' from 'BBB-' -- Individual to 'C' from 'B/C'; Colonial Bank, N.A. -- Long-term IDR to 'BBB-' from 'BBB'; -- Long-term deposits to 'BBB' from 'BBB+'; -- Short-term IDR to 'F3' from 'F2'; -- Short-term deposits to 'F3' from 'F2'; -- Subordinated debt to 'BB+' from 'BBB-'; -- Individual to 'C' from 'B/C'; Colonial Capital Trust IV -- Preferred stock to 'BB+' from 'BBB-'. CBG Florida REIT -- Preferred stock to 'BB+' from 'BBB-'. Fitch has also affirmed Colonial BancGroup, Inc. and Colonial Bank, N.A.'s ratings as follows with a Negative Outlook: -- Support '5'; -- Support Floor 'NF'. COMPUCREDIT CREDIT: Moody's Puts 20 Notes Ratings Under Review -------------------------------------------------------------- Moody's Investors Service has placed the ratings under review for possible downgrade on 20 classes of asset-backed notes issued by the CompuCredit Credit Card Master Note Business Trust, CompuCredit Credit Acquired Portfolio Voltage Master Business Trust, and the CompuCredit Acquired Portfolio Business Trust. These notes are backed by revolving pools of primarily sub-prime, unsecured, general purpose VISA credit card receivables. Moody's has a negative outlook on the credit card industry and believes the current economic environment makes several elements of CompuCredit's credit card programs vulnerable to significant performance volatility. In particular, the protracted turmoil in the credit markets has reduced the financial flexibility for companies, like CompuCredit, that have relatively limited access to the capital markets. With an expectation of worsening collateral performance in the months to come, balance sheet strength and liquidity have become increasingly important dimensions to Moody's credit analysis, especially for those issuers with limited alternative funding resources. The current consumer-led downturn is expected to have a more pronounced effect on the performance of CompuCredit's trusts due to their significant exposure to sub-prime collateral. In addition, a heightened focus from various government regulatory agencies, including currently unsettled law suits by the FDIC and the FTC, may inhibit CompuCredit's ability to find willing partner banks to originate credit card accounts in the future. It is this confluence of funding risks, deteriorating collateral performance, and regulatory actions that prompted Moody's decision to place the outstanding ratings under review. All three of these CompuCredit's trusts are backed by collateral pools that are comprised of deeply subprime credit card receivables and exhibit performance characteristics consistent with a riskier obligor base. Similar to other credit card issuers, Moody's expects charge-offs to rise through the next year. Also, the payment rate, a measure of cardholders' willingness and ability to repay their credit card debt, has been falling in recent months. In its review, Moody's will assess CompuCredit's ability to address and mitigate the potential challenges presented by the credit markets, regulators, and the macro economic environment. The complete rating actions are: Under Review for Possible Downgrade Issuer: CompuCredit Credit Card Master Note Business Trust -- $164,220,000 Class A Series 2004-Two Asset Backed Notes, rated Aaa -- $70,840,000 Class B Series 2004-Two Asset Backed Notes, rated A2 -- $28,980,000 Class C Series 2004-Two Asset Backed Notes, rated Baa2 -- $22,540,000 Class D-1 Series 2004-Two Asset Backed Notes, rated Ba2 -- $12,880,000 Class D-2 Series 2004-Two Asset Backed Notes, rated B2 -- $164,220,000 Class A Series 2004-Three Asset Backed Notes, rated Aaa -- $70,840,000 Class B Series 2004-Three Asset Backed Notes, rated A2 -- $28,980,000 Class C Series 2004-Three Asset Backed Notes, rated Baa2 -- $22,540,000 Class D-1 Series 2004-Three Asset Backed Notes, rated Ba2 -- $12,880,000 Class D-2 Series 2004-Three Asset Backed Notes, rated B2 Issuer: CompuCredit Credit Acquired Portfolio Voltage Master Business Trust (Amounts listed approximate issuance outstanding) -- $135,000,000 Class A-1 Series 2006-1 Asset Backed Notes, rated Aaa -- $32,100,000 Class A-2 Series 2006-1 Asset Backed Notes, rated Aa2 -- $28,900,000 Class A-3 Series 2006-1 Asset Backed Notes, rated A2 -- $54,500,000 Class A-4 Series 2006-1 Asset Backed Notes, rated Baa2 -- $9,500,000 Class B Series 2006-1 Asset Backed Notes, rated Ba2 Issuer: CompuCredit Acquired Portfolio Business Trust (Amounts listed approximate issuance outstanding) -- $41,300,000 Class A-1 Series 2004-One Asset Backed Notes, rated Aaa -- $18,900,000 Class A-2 Series 2004-One Asset Backed Notes, rated Aa2 -- $10,600,000 Class A-3 Series 2004-One Asset Backed Notes, rated A2 -- $9,500,000 Class A-4 Series 2004-One Asset Backed Notes, rated Baa2 -- $9,100,000 Class B Series 2004-One Asset Backed Notes, rated B2 CompuCredit Corporation, headquartered in Atlanta, Georgia is an originator and servicer of sub-prime credit card receivables. In addition to credit cards, the company the under-served consumer credit market with a variety of other credit and related financial services products. As of June 30, 2008, the company had reported assets of approximately $1.8 billion. COPERNIC INC: Has Until March 19 to Comply with Bid Price Rule -------------------------------------------------------------- Copernic Inc. received a NASDAQ Notice on Oct. 22, 2008, indicating that the company has received an extension to comply with the minimum bid price requirement for continued listing. The notice stated: "Given these extraordinary market conditions, NASDAQ has determined to suspend enforcement of the bid price and market value of publicly held shares requirements through Friday, Jan. 16, 2009. In that regard, on Oct. 16, 2008, NASDAQ filed an immediately effective rule change with the Securities and Exchange Commission to implement the suspension. As a result, all companies presently in a bid price or market value of publicly held shares compliance period will remain at that same stage of the process and will not be subject to being delisted for these concerns. These rules will be reinstated on Jan. 19, 2009, and the first relevant trade date will be Jan. 20, 2009. Since your company had 59 calendar days remaining in its compliance period as of Oct. 16, it will, upon reinstatement of the rules, still have this number of days, or until March 19, 2009, to regain compliance. The company can regain compliance, either during the suspension or during the compliance period resuming after the suspension, by achieving a $1 closing bid price for a minimum of 10 consecutive trading days". Marc Ferland, President and CEO of Copernic Inc. stated that he welcomed this moratorium which allows management to continue focussing on value creation activities for the benefit of its shareholders. About Copernic Inc. Headquartered in Quebec, Canada, Copernic Inc. (NASDAQ:CNIC) -- http://www.mamma.com/and -- http://www.copernic.com/-- specializes in developing, marketing and selling cutting-edge search technology, providing innovative home and business software products and solutions for desktop, web and mobile users, through its online properties. Additionally, Copernic Inc. provides both online advertising well as pure content to array of partnerships worldwide through its established media placement channels. Copernic handles over one billion search requests per month and has media placement partnerships established not only in North America, but also in Europe and Australia. COREL CORPORATION: Ends Sale Talks with Third Party --------------------------------------------------- Corel Corporation disclosed in a Securities and Exchange Commission filing that discussions with a third party regarding a potential sale of Corel have ceased. Corel's Board of Directors will continue to focus on maximizing shareholder value as an independent company and will also continue to evaluate all strategic alternatives as they may arise. About Corel Corp. Corel Corp. (NASDAQ:CREL) (TSX:CRE) -- http://www.corel.com/-- is one of the world's top software companies with more than 100 million active users in over 75 countries. The company provides high quality, affordable and easy-to-use Graphics and Productivity and Digital Media software. The company's products products are sold through a scalable distribution platform comprised of Original Equipment Manufacturers (OEMs), the company's global e- Stores, and the company's international network of resellers and retail vendors. The company's award-winning product portfolio includes some of the world's most widely recognized and popular software brands, including CorelDRAW(R) Graphics Suite, Corel(R) Paint Shop Pro(R) Photo, Corel(R) Painter(TM), VideoStudio(R), WinDVD(R), Corel(R) WordPerfect(R) Office and WinZip(R). The company's global headquarters are in Ottawa, Canada, with major offices in the United States, United Kingdom, Germany, China, Taiwan and Japan Corel's balance sheet as of Aug. 31, 2008, showed $252.22 million in total assets, $260.89 million in total liabilities, resulting to $8.67 million in shareholders' deficit. At Aug. 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $75.31 million in total current assets available to pay $85.92 million in total current liabilities. DANIEL T. FARKAS: Case Summary & Five Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Daniel T. Farkas P.O. Box 75 Oakdale, NY 11769 Bankruptcy Case No.: 08-75985 Chapter 11 Petition Date: October 27, 2008 Court: Eastern District of New York (Central Islip) Judge: Robert E. Grossman Debtor's Counsel: Ronald D. Weiss, Esq. weiss@ny-bankruptcy.com Ronald D. Weiss, P.C. 734 Walt Whitman Road, Suite 203 Melville, NY 11747 Tel: (631) 271-3737 Fax: (631) 271-3784 Total Assets: $2,298,500 Total Debts: $2,329,300 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/nyeb08-75985.pdf DELPHI CORP: Plan Filing Period Extended to January 31, 2009 ------------------------------------------------------------ The United States Bankruptcy Court for the Southern District of New York extended Delphi Corporation' exclusive periods, solely as between the statutory committees and Delphi, to: (a) file a plan of reorganization through and including January 31, 2009; and (b) solicit acceptances of that Plan through and including March 31, 2009. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court on January 25, 2008, confirmed Delphi's plan of reorganization. The terms of the Plan, however, were not consummated after a group led by Appaloosa Management, LP terminated a deal to invest $2,550,000,000 in reorganized Delphi. On October 3, 2008, Delphi filed a revised plan that excludes Appaloosa, et al., but provides for more funding from General Motors Corp. The revised plan requires a re-solicitation of votes and contemplates Delphi's exit from bankruptcy in December 2008. The Court has adjourned the preliminary plan modification hearing to 11:00 a.m. on November 5, 2008. The hearing was originally scheduled for 10:00 a.m. EDT on Oct. 23, 2008. The objection deadline for the proposed plan modifications was October 16, 2008, except for certain parties that requested, and received, a specific extension of the objection deadline. In a prepared statement, Delphi corporate spokesman Lindsey Williams said the extra time will "allow us to continue the significant transformation progress made to date," according to a report by the Business First of Buffalo. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. (Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELPHI CORP: Committee, Equity Holders to Participate in Exit Loan ------------------------------------------------------------------ At the behest of Delphi Corporation, the United States Bankruptcy Court for the Southern District of New York permitted members of the Debtors' statutory committees of creditors and equity holders to help finance the Debtors' emergence from bankruptcy. Delphi is working out a $3,750,000,000 exit financing to push for its emergence from bankruptcy. Judge Drain ruled that investors are allowed to participate in Delphi's financing without compromising their duties as members of any of Delphi's committees by limiting the information they share with others in the firm. "Delphi's request doesn't give anyone a free pass under the securities law," Bloomberg quoted Judge Drain as saying. John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, asserts it wouldn't be in Delphi's interest, or in the interest of any stakeholder of Delphi, to place any arbitrary impediments on investment in the former GM unit. Delphi anticipates raising approximately $3,750,000,000 of funded emergence capital through a combination of term bank debt and rights to purchase equity in reorganized Delphi. Delphi expects to raise at least $2,750,000,000 in funded first and second lien debt plus an unfunded asset-backed revolving credit facility of up to $1,200,000,000. Delphi anticipates raising the remaining funded emergence capital through a combination of a $1,000,000,000 discount rights offering and a direct subscription for new common stock in reorganized Delphi. Members of the Official Committee of Unsecured Creditors and the Official Committee of Equity Security Holders were also allowed to participate in Delphi's exit financing in connection with its reorganization plan that was confirmed by the Court on January 25, 2008. The Confirmed Plan required a $4,700,000,000 of net funded debt and $1,750,000,000 from a rights offering, as well as a $2,550,000,000 equity investment by a group led by Appaloosa Management, L.P. The Plan, however, was not consummated after Appaloosa backed out. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court on January 25, 2008, confirmed Delphi's plan of reorganization. The terms of the Plan, however, were not consummated after a group led by Appaloosa Management, LP terminated a deal to invest $2,550,000,000 in reorganized Delphi. On October 3, 2008, Delphi filed a revised plan that excludes Appaloosa, et al., but provides for more funding from General Motors Corp. The revised plan requires a re-solicitation of votes and contemplates Delphi's exit from bankruptcy in December 2008. (Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELPHI CORP: Seeks 6-Month Extension of $4.35 Billion DIP Loan -------------------------------------------------------------- Delphi Corporation said in a regulatory filing that it is seeking to amend and extend until the earlier of June 30, 2009, or the effective date of its reorganization plan, its existing debtor- in-possession credit facility. Delphi was scheduled to meet with investors Sept. 27 to discuss its plan to extend the approximately $4,350,000,000 in total financing, comprising: Tranche Facility ------- -------- A $1,100,000,000 first priority revolving Credit facility B $500,000,000 first priority term loan C Approximately $2,750,000,000 second priority term loan. Delphi continues to work on emerging from bankruptcy "as soon as practicable," Business First of Buffalo reported, citing Delphi Spokesman Lindsey Williams. Delphi on Oct. 3 filed modifications to its Court-confirmed plan of reorganization. The modified plan provides for a schedule that could allow Delphi to exit from bankruptcy by this December. In connection with the proposed extension, Delphi provided supplemental financial information containing unaudited collateral coverage and borrowing base calculations for debtor entities as of June 30, 2008 and projected revenues, EBITDAR information and debt and liquidity levels through June 30, 2009, each as measured under the terms and covenants to be contained in the Amended and Restated DIP Credit Facility. A copy of Delphi's presentation is available at: http://researcharchives.com/t/s?344c Delphi's new projections differ from the projections stated in its September 2007 plan and disclosure statement to reflect: (i) Delphi's delayed emergence from chapter 11, including the retiming of divestiture transactions, the removal of changes in working capital terms anticipated at emergence and the reversal of adjustments related to fresh start accounting and certain recapitalization transactions which were to take place upon emergence; (ii) a more conservative volume assumption of a 10% reduction in projected global vehicle production volumes from prior projections, and revised prices per pound of copper, aluminum (primary), aluminum (secondary), and steel and per barrel of crude oil of $2.27, $0.98, $0.82, $0.88 and $78.00, respectively; (iii) a retiming of capital expenditures resulting in projected expenditures of $329,000,000 in the second half of 2008 and $338,000,000 in the first half of 2009, (iv) an extension of the term of Delphi's Advance Agreement with GM, which provides for $300,000,000 in available liquidity, and (v) the acceleration by GM of payables to Delphi which is expected to result in an additional $100,000,000 of liquidity to Delphi in each of April, May and June of 2009. While Delphi believes there is substantial agreement with GM to extend the term of its Advance Agreement and accelerate payment of payables to Delphi, any amendment to the Advance Agreement or agreement to advance payables is conditioned on Delphi obtaining extension of its Amended and Restated DIP Credit Facility through June 30, 2009. In addition, any amendment to the Advance Agreement is subject to the Bankruptcy Court's approval. "There can be no assurances that such amendment will actually become effective or that GM will agree to accelerate payment of payables," Delphi said in the SEC filing. Incorporating the revised assumptions to the Prior Projections results in a decrease in projected 2008 revenue from $22,203,000,000 to $21,642,000,000 in the DIP Extension Projections, due principally to projected volume declines. The first half 2009 revenue on a basis consistent with the Prior Projections increases from $9,625,000,000 to $9,789,000,000 principally due to the retiming of divestitures offset by projected volume reductions. The 2008 projected EBITDAR increases from $526,000,000 in the Disclosure Statement to $745,000,000 in the DIP Extension Projections. The increase is primarily due to a difference in definition of EBITDAR between the Disclosure Statement and the Amended and Restated DIP Credit Facility principally related to the treatment of effectiveness of Delphi's amended Master Restructuring Agreement with GM resulting in an increase of $373,000,000, adjustments for non-emergence of $32,000,000 primarily driven by a decrease in incentive compensation expense, material cost reductions of $17,000,000, and performance and other related improvements of $47,000,000, partially offset by the impact of volume reductions of $249,000,000. The first half 2009 projected EBITDAR decreases from $904,000,000 on a basis consistent with the Prior Projections to $699,000,000 in the DIP Extension Projections. The decrease is primarily due to volume reductions resulting in a $337,000,000 decrease, a difference in the definition of EBITDAR between the Disclosure Statement and the Amended and Restated DIP Credit Facility resulting in an increase of $2,000,000, and adjustments for non- emergence of $4,000,000 primarily driven by an increase in pension expense, partially offset by a decrease in material costs of $113,000,000 and performance and other related improvements of $21,000,000. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court on January 25, 2008, confirmed Delphi's plan of reorganization. The terms of the Plan, however, were not consummated after a group led by Appaloosa Management, LP terminated a deal to invest $2,550,000,000 in reorganized Delphi. On October 3, 2008, Delphi filed a revised plan that excludes Appaloosa, et al., but provides for more funding from General Motors Corp. The revised plan requires a re-solicitation of votes and contemplates Delphi's exit from bankruptcy in December 2008. (Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELPHI CORP: Seeks to Reinstate Fraud Claims Against Appaloosa -------------------------------------------------------------- The Hon. Robert Drain of the United States Bankruptcy Court for the Southern District of New York said at a hearing on Oct. 8 that that he will reconsider Delphi Corp.'s fraud claim against Appaloosa Management, L.P., that he had earlier dismissed. In that light, the parties submitted various memorandums that back their positions with respect to Delphi's fraudulent omission claim against Appaloosa. Delphi wants its fraudulent omission claim reinstated, citing that the claim is in compliance with Rule 9(b) of the Federal Rules of Civil Procedure. To note, the Bankruptcy Court had earlier issued an order sustaining all claims alleged by Delphi against Appaloosa except for the Fraud Claim. The Court explained that Delphi's fraud claim against Appaloosa was based on two different theories: (1) the alleged concerted efforts by Appaloosa to subvert secretly, at least to Delphi, the implementation of the Equity Purchase and Commitment Agreement and the related agreements, including the bank financing under the Chapter 11 plan; (2) Appaloosa, through David Tepper's declaration to the Court, and in his testimony on the December 7, 2007, hearing on the Debtors' motion to enter into the amended EPCA, knowingly falsely represented Appaloosa's intention to perform the EPCA. Representing Delphi, Edward A. Friedman, Esq., at Friedman Kaplan Seiler & Adelman LLP, in New York, asserts that the fraudulent omission claim has been alleged with sufficient particularity, and accordingly, the claim should be reinstated. As the Court noted, the Civil Rule 9(b) pleading standard for the "circumstances constituting fraud" is different in cases alleging concealment as opposed to an affirmative misrepresentation. In addition, according to Mr. Friedman, the Court stated it would permit Delphi to amend its complaint to raise allegations against any of the defendants in respect of misconduct or recklessness or the like that could justify a claim of either specific performance of not enforcing the damages cap under Kalisch-Jarcho or veil-piercing or equitable subordination. Instead of amending its complaint, Delphi, in a letter dated July 31, 2008, advised the Court and Appaloosa that it decided not to amend its Complaint in respect of misconduct or recklessness per the Court's authorization, Mr. Friedman avers. He further said that Delphi explained that its complaint would give it sufficient basis to proceed and obtain the relief it seeks, because the Court had ruled that Delphi's allegations of misconduct as against Appaloosa were "reasonably specific." Paragraphs 71-83 Delphi's fraud claims rely upon the events and allegations made by Delphi in Paragraphs 71-83 of its $2,550,000,000 lawsuit against Appaloosa and other parties. The allegations included that even before the Court confirmed Delphi's Plan of Reorganization on Jan. 25, 2008, Appaloosa engaged in efforts to avoid its obligations under the EPCA and undermine the consummation of the Plan. Appaloosa notes that while those "unsupported and incorrect allegations" have been dismissed as against every other defendant, Delphi continues to advance the false allegations as the "core" of its claims against Appaloosa. Accordingly, Appaloosa asked the Court to strike Par. 71-83. Appaloosa insists that Par. 71-83 should be stricken because Delphi did not satisfy the "particularity requirement" of Civil Rule 9(b). Delphi's fraud claim was dismissed, but not the other claims for specific performance, invalidating the liability cap, piercing the corporate veil and equitable subordination. Glenn M. Kurtz, Esq., at White & Case LLP, in New York, tells the Court that Appaloosa and its affiliate A-D Acquisition Holdings, LLC, are seeking the Court's approval to reargue because Civil Rule 9(b) applies to all fraud allegations for all purposes, not merely when offered is support of a fraud claim. Mr. Kurtz affirms that the Court correctly applied Civil Rule 9(b) to the alleged fraudulent conduct of Par. 71-83, as it applies to averments of fraud and is not dependent on the particular elements of fraudulent omission claim. Civil Rule 9(b) applies to Par. 71-83 for all claims, including Delphi's claim for specific performance and invalidating the liability cap, veil piercing and equitable subordination and disallowance, Mr. Kurtz adds. According to Mr. Kurtz, a limitation on the order dismissing the fraudulent omission claim would not be correct because Delphi's claims fail on these grounds: -- Delphi failed to plead a duty to speak; -- Delphi's allegations are impermissibly made on information and belief; -- Delphi failed to plead the underlying misrepresentation, as required; -- Delphi failed to plead the omitted information, the context for the omissions and the manner in which it was misled; -- Delphi failed to plead what Appaloosa obtained through the alleged fraud; and -- Delphi failed to plead reliance, causation or damages. Mr. Kurtz contends that the allegations of Par. 71-83 cannot support the invalidation of the liability cap, veil piercing or equitable subordination, irrespective of secrecy. In light of these, Appaloosa and ADAH maintain that they are entitled to the same rulings issued in favor of the other defendants as to Delphi's claims for specific performance, invalidating the liability cap, piercing the corporate veil and equitable subordination. In another filing, Mr. Kuntz said that Appaloosa also intends to manifest these three issues raised in its Motion to Strike: (i) Whether the heightened pleading standard of Civil Rule 9(b) is relaxed because the fraud allegations of Par. 71-83 were made in connection with fraudulent omission claim. The cases are uniform that Civil Rule 9(b) applies to all averments of fraud, including those made in fraudulent omissions claims. Although the pleading standard accommodates the difficulty of pleading a negative, the applicable standard in the New York Southern district is clear in requiring particularity. (ii) Whether Delphi has properly pled a fraudulent omission claim. In addition to its failure to plead the omitted information, Delphi also fails to plead a duty to speak, the underlying misrepresentation rendering the omission misleading, the context for the omission and the manner in which Delphi was misled, what Appaloosa gained through the alleged fraud, and reliance, causation and injury. The claim fails for relying on allegations made on information and belief. (iii) Whether the alleged conduct or Par. 71-83 could support Delphi's claim for invalidating the liability cap, veil piercing and equitable subordination and disallowance, if there had been no alleged secrecy. In any case, Rule 9(b) applies to averments of fraud regardless of the claims for which they are offered. Delphi does not, and cannot plead the required elements of reliance, causation or damages. Delphi Wants to Reply with Confidentiality Delphi informs the Court that it intends to file a reply memorandum of law concerning the application of Civil Rule 9(b) to its claim for fraudulent omissions. Pursuant to Section 107(b) of the Bankruptcy Code and Rule 9018 of the Federal Rules of Bankruptcy Procedure, Delphi seeks the Court's authority to redact the Reply Memorandum when it is filed, in accordance with the Stipulation and Agreed Protective Order Governing Production and Use of Confidential and Highly Confidential Information, which was agreed to by the parties and approved by the Court on July 10, 2008. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court on January 25, 2008, confirmed Delphi's plan of reorganization. The terms of the Plan, however, were not consummated after a group led by Appaloosa Management, LP terminated a deal to invest $2,550,000,000 in reorganized Delphi. On October 3, 2008, Delphi filed a revised plan that excludes Appaloosa, et al., but provides for more funding from General Motors Corp. The revised plan requires a re-solicitation of votes and contemplates Delphi's exit from bankruptcy in December 2008. (Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DERBES REALTY: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Derbes Realty Trust 44 Branch Street Quincy, MA 02169 Tel: (617) 471-9190 Bankruptcy Case No.: 08-18131 Type of Business: The Debtor is a realty trust. Chapter 11 Petition Date: October 27, 2008 Court: District of Massachusetts (Boston) Judge: Henry Boroff Debtor's Counsel: Christine Cedrone Logan, Esq. clogan@cedronelaw.com Christine Cedrone Logan & Associates, P. 21 McGrath Highway, Suite 306 Quincy, MA 02169 Tel: (617) 934-0709 Fax: (617) 328-0689 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of 20 largest unsecured creditors. DOMENIC MOTORS: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Domenic Motors, Ltd. 4331 Ohio River Boulevard Pittsburgh, PA 15202 Bankruptcy Case No.: 08-27162 Type of Business: The Debtor is a European automobile dealer. See: http://www.domenicmotors.com/ Chapter 11 Petition Date: October 27, 2008 Court: Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: Robert O. Lampl, Esq. rol@lampllaw.com 960 Penn Avenue, Suite 1200 Pittsburgh, PA 15222 Tel: (412) 392-0330 Fax : 412-392-0335 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 million to $10 million The Debtor did not file a list of 20 largest unsecured creditors. DRS TECHNOLOGIES: S&P Lifts LT Corp. Credit Rating to BBB from BB- ------------------------------------------------------------------ Standard & Poor's Ratings Service raised certain ratings and withdrew others on DRS Technologies Inc. (BBB/Watch Neg/--) following the acquisition of the company by Finmeccanica SpA (BBB/Watch Neg/A-2) of Italy for $5.2 billion, including assumed debt. The long-term corporate credit rating has been raised to 'BBB' from 'BB-'. "The ratings of DRS have been equalized to those of Finmeccanica as we believe DRS will be a core subsidiary of its new parent, especially as related to its U.S. defense electronics business," said Standard & Poor's credit analyst Christopher DeNicolo. At the same time, S&P withdrew its issue and recovery ratings on DRS' secured credit facility, as it was repaid as part of the transaction. S&P also withdrew the recovery ratings on the remaining unsecured and subordinated notes, as they are now investment grade. The $345 million convertible notes due 2013 are in the process of being converted and ratings will be withdrawn when conversion is complete. The ratings are on CreditWatch with negative implications, reflecting the CreditWatch of Finmeccanica. The corporate credit rating on DRS will likely be withdrawn if the company ceases to file separate financial statements or if Finmeccanica explicitly guarantees the outstanding notes. Parsippany, New Jersey-based DRS is a leading mid-tier supplier of defense electronics, including infrared and electro-optical sighting, targeting and weapon sensor systems, naval displays, signals intelligence processing equipment and battle management tactical computer systems. The company also provides logistics, IT, and training services and military support equipment. EMPIRE LAND: Creditors' Panel Objects to Pachulski Stang Fees ------------------------------------------------------------- BankruptcyLaw360.com reports that the Official Committee of Unsecured Creditors of Empire Land, LLC, which does business as Empire Land Development, LLC, and its debtor-affiliates objected to the fee request of Pachulski Stang Ziehl & Jones, LLP, for the month of July 2008, citing the lack of a plan and "bad faith" in discovery. Headquartered in Ontario, California, Empire Land, LLC, dba Empire Land Development, LLC -- http://www.epinc.com/-- develops communities and other land construction projects located in California and Arizona. As of March 31, 2008, the company owned at least 11,800 lost in 14 separate land projects. The company and seven of its affiliates filed for Chapter 11 protection on April 25, 2008 (Bankr. C.D. Calif. Lead Case No.08- 14592). James Stang, Esq., at Pachulski Stang Ziehl & Jones, LLP, represents the Debtors in their restructuring efforts. The U.S. Trustee for Region 16 has appointed three creditors to serve on an Official Committee of Unsecured Creditors in the case. The Committee selected Landau & Berger LLP as its general bankruptcy counsel. When the Debtors filed for protection against their creditors, they listed assets and debts between $100 million to $500 million. ENRON CORP: EBS Ex-CEO Joseph Hirko Pleads Guilty to Wire Fraud --------------------------------------------------------------- Joseph Hirko, former co-chief executive of Enron Broadband Services, pleaded guilty to one count of a superseding indictment of wire fraud, the U.S. Department of Justice said in a press release dated October 14, 2008. Mr. Hirko pleaded guilty before Judge Vanessa Gilmore at the U.S. District Court in Houston, Texas. According to the terms of the plea agreement, Mr. Hirko faces a maximum sentence of 16 months in prison and a fine of up to $250,000. Sentencing has been scheduled for March 3, 2009. As part of the plea agreement, Mr. Hirko agreed to cooperate fully with the government's ongoing criminal investigation of individuals formerly employed at EBS. In addition, Mr. Hirko agreed to forfeit approximately $8.7 million in restitution to the Enron victims through the U.S. Securities and Exchange Commission's Enron Fair Fund. The Justice Department related that in July 2005, Mr. Hirko and four other EBS executives were tried on various charges of conspiracy to commit securities and wire fraud, securities fraud, wire fraud, insider trading and money laundering relating to their employment at Enron. The trial resulted in a mistrial, and Mr. Hirko was subsequently charged in a new indictment with wire fraud, securities fraud and insider trading. Mr. Hirko participated at Enron's annual analyst conference in Houston at which Jeffrey Skilling, Enron's former chief executive officer, introduced EBS as one of Enron's "core" units. Mr. Skilling also announced the development of a broadband operating system or "BOS." According to the superseding indictment, the BOS was meant to be an "intelligent" operating system that would, among other things, automatically find the most optimal path to deliver data on Enron's network, a process Enron dubbed "dynamic routing," link Enron's network to other networks and provide guaranteed levels of service. As alleged in the superseding indictment, Enron issued a press release on May 15, 2000, announcing the acquisition of Warpspeed Communications. According to the plea agreement, the press release falsely represented the status of the BOS and implied that it was already embedded and functioning as a part of Enron's network; in particular, the press release stated that the BOS "allows application developers to dynamically provision bandwidth on demand for the end-to-end quality of service necessary to deliver broadband content." The plea agreement, according to the DOJ, states that Mr. Hirko reviewed and, with a reckless indifference to the true facts, approved this language even though the press release contained material inaccurate representations of the BOS' status. He admitted that he knew the BOS was under development throughout his employment at Enron, was never embedded on Enron's network and could not dynamically provide bandwidth on demand or provide for the end-to-end quality of service necessary to deliver broadband content. According to the plea agreement, Mr. Hirko's approval of this press release, as well as other press releases, assisted in maintaining Enron's overall stock price, thereby improperly maintaining the value of his holdings of Enron stock. "Today's plea closes another chapter in the Enron scandal," said Acting Assistant Attorney General Matthew Friedrich. "According to admissions made by Mr. Hirko as a part of his plea, he played a part in disseminating misstatements about the technical viability of Enron's Broadband Services Division, and shareholders were left holding the bag." "Mr. Hirko not only deceived his colleagues and investors about Enron's 'core' broadband unit, but his actions had a greater impact on our nation's economy and resulted in the eventual erosion of numerous retirement nest eggs," said Assistant Director Kenneth W. Kaiser, FBI Criminal Investigative Division. "The FBI remains committed to bringing to justice those responsible for corporate fraud and restoring the public's confidence in our economy." The case is being prosecuted by attorneys Jonathan E. Lopez, Jack B. Patrick and Liam B. Brennan of the Criminal Division's Fraud Section. Charges against the EBS employees were initially brought in March 2003 by the Enron Task Force, a team of federal prosecutors and agents formed to investigate matters related to the collapse of Enron Corp. All remaining Enron Task Force cases are now being handled by the Criminal Division's Fraud Section, with the investigatory assistance of the FBI. Mr. Hirko has been slated to go to trial in December, alongside Rex Shelby, a former top software executive at EBS, The Houston Chronicle related. Another former Enron executive, Scott Yeager, is also facing a retrial scheduled for March 2009. Enron Corp., at one time the seventh-ranked company in the United States with stock trading as high as $80 per share in August 1999, filed for bankruptcy protection on Dec. 2, 2001, and its stock became virtually worthless. About Enron Corp. Based in Houston, Texas, Enron Corporation filed for chapter 11 protection on Dec. 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Albert Togut, Esq., at Togut Segal & Segal LLP, Brian S. Rosen, Esq., Martin Soslan, Esq., Melanie Gray, Esq., Michael P. Kessler, Esq., Sylvia Ann Mayer, Esq., at Weil, Gotshal & Manges LLP, Frederick W.H. Carter, Esq., Michael Schatzow, Esq., Robert L. Wilkins, Esq., at Venable, Baetjer and Howard, LLP, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft, LLP, represented the Debtors. Jeffrey K. Milton, Esq., Luc A. Despins, Esq., Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy LLP represented the Official Committee of Unsecured Creditors. The Debtors filed their Chapter Plan and Disclosure Statement on July 11, 2003. On Jan. 9, 2004, they filed their fifth Amended Plan and on the same day the Court approved the adequacy of the Disclosure Statement. On July 15, 2004, the Court confirmed the Debtors' Modified Fifth Amended Plan and that plan was declared effective on Nov. 17, 2004. (Enron Bankruptcy News, Issue No. 210; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) EPICEPT CORP: SEC Registers $50MM Securities for Sale ----------------------------------------------------- The Securities and Exchange Commission granted effectiveness on EpiCept Corporation's Registration Statement, File No. 333-153895, on Oct. 21, 2008. The statement relates to $50,000,000 worth of indeterminate number of: -- common stock at $0.0001 par value; -- preferred stock at $0.0001 par value; -- convertible debt securities; -- warrants; and -- units. A copy of the share prospectus is available free of charge at: http://researcharchives.com/t/s?33c2 About EpiCept Corporation Based in Tarrytown, New York, EpiCept Corporation (NASDAQ:EPCT) -- http://www.epicept.com/-- is a specialty pharmaceutical company focused on the development of pharmaceutical products for the treatment of cancer and pain. The company has a portfolio of five product candidates in active stages of development. It includes an oncology product candidate submitted for European registration, two oncology compounds, a pain product candidate for the treatment of peripheral neuropathies and another pain product candidate for the treatment of acute back pain. The two wholly owned subsidiaries of the company are Maxim, based in San Diego, California, and EpiCept GmbH, based in Munich, Germany, which are engaged in research and development activities. Going Concern Doubt Deloitte & Touche LLP, in Parsippany, New Jersey, expressed substantial doubt about EpiCept Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's recurring losses from operations and stockholders' deficit. The company disclosed in its Form 10-Q for the second quarter ended June 30, 2008, a net loss of $7,765,000. EpiCept Corp.'s consolidated balance sheet at June 30, 2008, showed total assets of $3,093,000, total liabilities of $22,598,000, and a stockholders' deficit of $19,505,000, compared to a deficit of $14,177,000 at Dec. 31, 2007. The company said it expects to incur substantial net losses, in the aggregate and on a per share basis, for the foreseeable future as it attempts to market and sell Ceplene(R). "We are unable to predict the extent of these future net losses, or when we may attain profitability, if at all. These net losses, among other things, have had and will continue to have an adverse effect on our stockholders' equity. We anticipate that for the foreseeable future our ability to generate revenues and achieve profitability will be dependent on the successful commercialization of Ceplene(R). There is no assurance that we will be able to obtain or maintain governmental regulatory approvals to market Ceplene(R) in Europe. If we are unable to generate significant revenue from Ceplene(R), or attain profitability, we may not be able to sustain our operations." EQUISTAR CHEMICALS: LyondellBasell Amends Bridge Loan Agreement --------------------------------------------------------------- Equistar Chemicals LP disclosed in a Securities and Exchange Commission filing that through a series of actions, the validity of which LyondellBasell Industries disputes, the joint lead arrangers under the Bridge Loan Agreement had attempted to increase the applicable rate under the Bridge Loan Agreement to 12% per annum. Since June 20, 2008, LyondellBasell Industries had been paying 12% interest, which is approximately 4% higher than the applicable rate under the Bridge Loan Agreement as at June 30, 2008, in order to avoid any allegation of default by the lenders. LyondellBasell had protested the higher rate of interest and had reserved its right to recover any such amounts based upon a determination that the JLAs' attempt to impose a rate increase is not supported by the terms of the applicable loan documentation. On Oct. 17, 2008, the Bridge Loan Agreement originally dated as of Dec. 20, 2007, and amended and restated as of April 30, 2008, between, among others, LyondellBasell Finance Company, of which Lyondell Chemical Company, as borrower, parent as a guarantor, certain subsidiaries of parent, including Lyondell and certain of its subsidiaries, including Equistar Chemicals, LP, as subsidiary guarantors, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman Sachs Credit Partners L.P., Citigroup Global Markets Inc., ABN AMRO Incorporated and UBS Securities LLC, as Joint Lead Arrangers and Bookrunners, was further amended and restated. The amendments re-tranche the $8 billion principal amount of initial loans outstanding under the Amended and Restated Bridge Loan Agreement into (a) $3.5 billion of fixed rate second lien loans, which bear interest at a rate equal to 12% per annum (12.5% in the case of certain ratings downgrades), (b) $2.0 billion of floating rate second lien loans and (c) $2.5 billion of floating rate third lien loans. All of the floating rate loans bear interest at a rate equal to LIBOR (in the case of U.S. dollar loans) or EURIBOR (in the case of euro loans) plus the Applicable Margin (as defined in the Amended and Restated Bridge Loan Agreement). The economic impact of the interest rates applicable to the re-tranched loans is effective as of June 16, 2008. The amendments also include provisions allowing lenders under the Amended and Restated Bridge Loan Agreement: -- within 180 days after Oct. 17, 2008, to convert retranched fixed rate second lien loans into fixed rate second lien notes or a combination of fixed rate second lien notes and up to $1 billion in aggregate principal amount of fixed rate third lien notes and/or fixed rate unsecured notes (and pursuant to a notice provided by the lenders on Oct. 17, 2008, all of the fixed rate second lien loans will automatically convert into fixed rate second lien notes if no election is made by the lenders to convert a portion of the fixed rate second lien loans to fixed rate third lien or unsecured notes within this 180-day period); and -- following the time that the fixed rate second lien loans have been converted into exchange notes and certain lenders under the Amended and Restated Bridge Loan Agreement hold, in aggregate, less than $950 million of such notes, to convert new floating rate second lien loans into fixed rate second lien notes and to convert new floating rate third lien loans into fixed rate third lien notes and/or fixed rate unsecured notes. In all such cases, the exchange notes will bear interest at a rate equal to 12% per annum (12.5% in the case of certain ratings downgrades), may be denominated in euro or dollars, and will have maturity dates between June 2015 and December 2019. In addition, the amendments include revisions to some of the terms of the exchange notes to make them consistent, in some instances, with similar provisions of the senior secured credit facility, originally dated as of Dec. 20, 2007, and amended and restated as of April 30, 2008, between, among others, Parent, Lyondell and certain subsidiary guarantors, including Equistar, party thereto from time to time. The amendments also make other changes, including technical and typographical corrections. The foregoing does not purport to be complete and is qualified in its entirety by reference to the Amended and Restated Bridge Loan Agreement. About Equistar Chemicals Headquartered in Houston, Texas, Equistar Chemicals LP, a wholly owned subsidiary of Lyondell Chemical Company (NYSE: LYO) -- http://www.lyondell.com/-- produces ethylene, propylene and polyethylene in North America and ethylene oxide, ethylene glycol, high value-added specialty polymers and polymeric powder. Equistar Chemicals LP's consolidated balance sheet at June 30, 2008, showed $9.62 billion in total assets and $19.7 billion in total liabilities, resulting in a $10.1 billion total partners' deficit. At June, 2008, the company's consolidated balance sheet also showed strained liquidity with $2.97 billion in total current assets available to pay $2.53 billion in total current liabilities. * * * Equistar Chemicals LP's 7.55% senior unsecured notes carry Moody's Investor Service's B3 rating, Standard & Poor's Ratings Service's B+ rating and Fitch Ratings' BB+ rating. EVERGREEN ENERGY: Gets Ave. Closing Price Non-Compliance Notice --------------------------------------------------------------- Evergreen Energy Inc. was notified by the New York Stock Exchange Arca Inc. that it is not in compliance with the NYSE Arca's continued listing standard for minimum share price under Rule 5.5(b)(2) of the NYSE Arca Equities Rules. The standard requires that the average closing price of any listed security not fall below $1.00 per share for any consecutive 30-day trading period. Evergreen is exploring alternatives for curing this deficiency and restoring compliance with the continued listing standards. The company's common stock will remain listed on the NYSE Arca exchange under the symbol "EEE" but will be assigned a ".BC" indicator by the NYSE Arca to show that the company is currently out of compliance with the NYSE Arca's continued listing standards. As required by Rule 5.5(b) of the NYSE Arca Equities Rules, Evergreen is required to notify formally the NYSE Arca within 10 business days from receipt of the notice of its intent to cure this deficiency and provide commentary on its ability to cure the deficiency and of the specific steps it is planning to take to regain compliance. Evergreen has six months from the notification date to comply with the NYSE Arca minimum share price standard. If it is not compliant by that date, its common stock will be subject to suspension and delisting by the NYSE Arca. About Evergreen Energy Inc. Headquartered in Denver, Colorado, Evergreen Energy Inc. (NYSE Arca: EEE) -- http://www.evgenergy.com/-- refines coal into a cleaner, more efficient and affordable solid fuel that is available today to meet the growing energy demands of industrial and utility customers while addressing important environmental concerns. FIELDSTONE MORTGAGE: Moody's Cuts Ratings on Worsening Performance ------------------------------------------------------------------ Moody's Investors Service has downgraded 3 certificates from a transaction issued by Fieldstone Mortgage Investment Trust. The transaction is backed by second lien loans. The certificates were downgraded because the bonds' credit enhancement levels, including excess spread and subordination were low compared to the current projected loss numbers at the previous rating levels. The actions take into account the continued and worsening performance of transactions backed by closed-end-second collateral. Substantial pool losses of over the last few months have eroded credit enhancement available to the mezzanine and senior certificates. Despite the large amount of write-offs due to losses, delinquency pipelines have remained high as borrowers continue to default. Issuer: Fieldstone Mortgage Investment Trust 2006-S1 -- Cl. A, Downgraded to Ca from B3 -- Cl. M1, Downgraded to C from Caa3 -- Cl. M2, Downgraded to C from Ca FORT DUQUESNE: Moody's Junks Rating on $400MM Class A-1B Notes -------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of four classes of notes and left on review for possible further downgrade the ratings of three of these classes of notes issued by Fort Duquesne CDO 2006-1 Ltd. as: Class Description: $450,000,000 Class A-1A Senior Secured Floating Rate Notes Due 2046 -- Prior Rating: Aa1, on review for possible downgrade -- Prior Rating Date: 7/17/2008 -- Current Rating: A1, on review for possible downgrade Class Description: $400,000,000 Class A-1B Senior Secured Floating Rate Notes Due 2046 -- Prior Rating: Ba1, on review for possible downgrade -- Prior Rating Date: 7/17/2008 -- Current Rating: Caa3, on review for possible downgrade Class Description: U $100,000,000 Class A-2 Senior Secured Floating Rate Notes Due -- Prior Rating: Caa2, on review for possible downgrade -- Prior Rating Date: 7/17/2008 -- Current Rating: Ca Class Description: $11,000,000 Class X Senior Secured Notes Due 2046 -- Prior Rating: Baa1, on review for possible downgrade -- Prior Rating Date: 7/17/2008 -- Current Rating: Ba3, on review for possible downgrade Fort Duquesne CDO 2006-1 Ltd. is a collateralized debt obligation backed primarily by a portfolio of structured finance securities. On May 30, 2008, the transaction experienced an event of default caused by a failure of the ratio calculated by dividing (a) the Net Outstanding Portfolio Collateral Balance by (b) the Aggregate Outstanding Amount of the Class A Notes to equal 100%, as set forth in Section 5.01(i) of the Indenture dated as of October 26, 2006. That event of default is continuing. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, certain parties to the transaction may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating actions taken reflect the increased expected loss associated with tranches of the transaction. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued following the default event. Because of this uncertainty, the ratings assigned to Class A-1A, Class A-1B and Class X remain on review for possible further action. FRED LEIGHTON: Owner Says Jewelry Not Bankrupt Estate Property -------------------------------------------------------------- BankruptcyLaw360.com reports that a family member of the owner of Fred Leighton Holding, Inc., and its debtor-affiliates demanded the return of a massive jewelry collection that she insists should not be part of the bankruptcy estate. Fred Leighton Holding, Inc. -- http://www.fredleighton.com/-- is a New York-based jewelry retailer owned by Ralph O. Emerian. Fred Leighton has decked countless red-carpet-dwellers in diamonds, including Sarah Jessica Parker, Nicole Kidman, and Catherine Zeta- Jones. It specializes in vintage jewelry from the 18th and 20th centuries, including antique cushion-cut diamonds and antique and estate brooches. It also produces Fred Leighton signature collection that combines past aura and the present materials and craftmanship. The Debtors filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code on April 15, 2008 (Bankr. S.D.N.Y., Case No. 08-11363). Joshua Joseph Angel, Esq., and Frederick E. Schmidt, Esq., at Herrick, Feinstein LLP, in New York, represent the Debtors. An Official Committee of Unsecured Creditors has been appointed in these cases. The Committee's counsels are Michael Z. Brownstein, Esq., and Rocco A. Cavaliere, Esq., at Blank Rome LLP. No trustee or examiner has been appointed in the cases. The Debtors listed total assets of $128,551,467 and total liabilities of $134,814,367 in their schedules. FREESCALE SEMICONDUCTOR: 2 Board Members Named to Legal Committee ----------------------------------------------------------------- Freescale Semiconductor Inc. disclosed in a Securities and Exchange Commission filing that on Oct. 17, 2008, Kevin R. Burns and James A. Quella, both members of the Board of Directors of Freescale Semiconductor Holdings I, Ltd. and Freescale, were appointed to the Audit and Legal Committee of the Board of Directors of Holdings I and Freescale. About Freescale Semiconductor Headquartered in Austin, Texas, Freescale Semiconductor Inc. (NYSE: FSL) -- http://www.freescale.com/ -- designs and manufactures embedded semiconductors for the automotive, consumer, industrial, networking and wireless markets. The company has design, research and development, manufacturing or sales operations in more than 30 countries. * * * As reported in the Troubled Company Reporter on Feb. 15, 2008, Fitch Ratings revised the rating outlook on Freescale Semiconductor Inc. to negative from stable and affirmed these ratings: (i) issuer default rating at 'B+'; (ii) senior secured bank revolving credit facility at 'BB+/RR1'; (iii) senior secured term loan at 'BB+/RR1'; (iv) senior unsecured notes at 'B/RR5'; and (v) senior subordinated notes at 'CCC+/RR FREESCALE SEMICONDUCTOR: Board Adopts Deferred Stock Unit Deal -------------------------------------------------------------- Freescale Semiconductor Inc. disclosed in a Securities and Exchange Commission filing that on Oct. 17, 2008, the Compensation and Leadership Committees of the Board of Directors of Holdings I and Freescale adopted the form of Deferred Stock Unit Award Agreement to be used under the Freescale Holdings 2006 Management Incentive Plan to issue performance-based deferred stock unit awards to certain executives, including named executive officers. Under the terms of the DSU Agreement, the number of deferred stock units issued will be based on Freescale's performance based on revenue growth and EBITDA growth measured against a list of peer companies chosen by the Committee. The performance period will commence on Jan. 1, 2009, and will end on Dec. 31, 2011. The deferred stock units will vest 100% on the fourth anniversary of the date of grant so long as the executive remains employed by Freescale or an affiliate. In addition, the DSU Agreement contains covenants regarding confidential information, non-solicitation and non-competition that are effective following termination of the executive's employment. Except as otherwise determined by the Committee, if a change in control occurs during the Performance Period, the Performance Period will terminate and all performance goals will be deemed achieved at target levels. On Oct. 17, 2008, the Committee adopted the form of Restricted Cash Award Agreement to be used under the Freescale Holdings 2007 Employee Incentive Plan to issue cash awards to certain executives, including named executive officers. Under the terms of the RCA Agreement, the cash award will vest and become payable with respect to 100% of the dollar value of the cash award on the third anniversary of the date of grant. If the executive's employment terminates, then all unvested portions of the award will be forfeited by the executive. About Freescale Semiconductor Headquartered in Austin, Texas, Freescale Semiconductor Inc. (NYSE: FSL) -- http://www.freescale.com/ -- designs and manufactures embedded semiconductors for the automotive, consumer, industrial, networking and wireless markets. The company has design, research and development, manufacturing or sales operations in more than 30 countries. * * * As reported in the Troubled Company Reporter on Feb. 15, 2008, Fitch Ratings revised the rating outlook on Freescale Semiconductor Inc. to negative from stable and affirmed these ratings: (i) issuer default rating at 'B+'; (ii) senior secured bank revolving credit facility at 'BB+/RR1'; (iii) senior secured term loan at 'BB+/RR1'; (iv) senior unsecured notes at 'B/RR5'; and (v) senior subordinated notes at 'CCC+/RR FREMONT GENERAL: Wins Jan. 30 Extension for Own Restructuring Plan ------------------------------------------------------------------ The Hon. Erithe A. Smith of the United States Bankruptcy Court for the Central District of California further extended the exclusive periods of Fremont General Corporation to: a) file a Chapter 11 plan until Jan. 30, 2009; and b) solicit acceptances of that plan until April 30, 2009. The Court overruled an objection to the Debtor's extension request filed by Official Committee of Unsecured Creditors on Oct. 6, 2008, saying that only a plan of liquidation is a possible exit from the case. "The Committee' crave the power to seize control over this case, incite further litigation, and ultimately force a liquidation in the face of the real prospect that a larger estate could be realized for the benefit of all the Debtor's stakeholders," the Debtor said. The Debtor told the Court that it will use the extension of time to (i) solicit overbids to a proposed plan of reorganization of Kelly Capital LLC, which terms of the plan are still being negotiated, or (ii) locate more plan proponents. The proposed plan consist of an infusion of new value into the Debtor's estate, among other things. About Fremont General Based in Santa Monica, Calif., Fremont General Corp. (OTC: FMNTQ) -- http://www.fremontgeneral.com/-- was a financial services holding company with $8.8 billion in total assets at Sept. 30, 2007. Fremont General ceased being a financial services holding company on July 25, 2008, when its wholly owned bank subsidiary, Fremont Reorganizing Corporation (f/k/a Fremont Investment & Loan) completed the sale of its assets, including all of its 22 branches, and 100% of its $5.2 billion of deposits to CapitalSource Bank. Fremont General filed for Chapter 11 protection on June 18, 2008, (Bankr. C.D. Calif. Case No. 08-13421), after selling subsidiary Fremont Investment & Loan to CapitalSource Inc. Robert W. Jones, Esq., and J. Maxwell Tucker, Esq., at Patton Boggs LLP, serve as counsel to the Debtor. Theodore Stolman, Esq., and Scott H. Yun, at Stutman Treister & Glatt, are the co-counsel to the Debtor. The Debtor selected Kurtzman Carson Consultants LLC as its claims agent. Lee R. Bogdanoff, Esq., Jonathan S. Shenson, Esq., and Jonathan D. Petrus, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP, represent the Official Committee of Unsecured Creditors as counsel. In its schedules, Fremont General reported $362,227,537 in total assets and $326,529,372 in total debts. When the Debtor filed for protection from its creditors, it listed total assets of $643,197,000 and total debts of $320,630,000. GANNETT CO: To Lay Off 10% of Staff After 33% Drop in Profit ------------------------------------------------------------ David B. Wilkerson at MarketWatch reports that Gannett Co. said on Tuesday that it will lay off about 3,000 employees, or 10% of its work force, after the company reported a 33% decline in its third- quarter 2008 profit. MarketWatch relates that Gannett's newspaper division chief, Bob Dickey, sent out a memo informing workers that the company will let the workers go by early December. According to MarketWatch, Mr. Dickey told employees that Gannett's "fiscal crisis is worsening." MarketWatch states that Gannett's Chief Executive Craig Dubow underscored a decline in classified ad sales. According to Mr. Wilkerson, Mr. Dubow told analysts in a conference call, "The economy's problems are rooted in housing, and we have been a leading indicator of the downturn there, with weak real estate undermining the local economies in many markets we serve. Consumer confidence fell, retail spending was curtailed and unemployment rose. Demand for all ad categories waned, but the critical real estate, retail and employment categories were stung the most profoundly. In fact, many of the states [hit hardest] are ones in which we have a significant presence in publishing or broadcasting or both, such as California, Nevada, Arizona and Florida, among others." About Gannett Co. Inc. Headquartered in McLean, Virginia, Gannett Co. Inc. (NYSE:GCI) -- http://www.gannett.com/-- is an international news and information company. In the United States, the company publishes 85 daily newspapers, including USA TODAY, and nearly 900 non-daily publications. Along with each of its daily newspapers, the company operates Websites offering news, information and advertising that is customized for the market served and integrated with its publishing operations. Newspaper publishing operations in the United Kingdom, operating as Newsquest, include 17 paid-for daily newspapers, almost 300 non-daily publications, locally integrated Websites and classified business Websites with national reach. The company has two segments: newspaper publishing and broadcasting. As reported in the Troubled Company Reporter on Oct. 2, 2008, Standard & Poor's said on Oct. 1 it may lower Gannett's BBB+ corporate credit rating, the eighth-highest investment grade, and its A-2 commercial paper rating, according to the report. The ratings company cited the worsening decline in newspaper advertising, according to the report. Gannett's print advertising sales plunged 16.8 percent in August, the biggest monthly drop this year, as classifieds continued to dry up, according to the report. Gannett said it drew on a revolving credit line to ensure it has funds to repay its commercial paper. GENERAL DATACOMM: Unit Inks $250K Receivable Sales Pact with CEO ---------------------------------------------------------------- General DataComm Industries, Inc.'s subsidiary, General DataComm, Inc. entered into a Receivable Sales Agreement with Howard S. Modlin, the company?s chief executive officer pursuant to which Mr. Modlin has initially purchased receivables with a face value of $256,242 for an aggregate purchase price of $250,000. The proceeds will be used for the company?s working capital needs. A full-text copy of Receivable Sales Agreement is available for free at http://ResearchArchives.com/t/s?3447 Based in Naugatuck, Connecticut, General DataComm Industries Inc. (Other OTC: GNRD.PK) -- http://www.gdc.com/-- provides secure, NEBS-compliant networking for telcos, governments and businesses. GDC's solutions help customers to bridge technologies, maximize their investments in existing voice and data networks, and transition to the newest network architectures. GDC's product offerings enable legacy and DSL network access; bandwidth management, multiprotocol label switching (MPLS), voice over IP (VoIP), Ethernet, power over Ethernet (PoE), and wireless networking, and are supported by services for network installation, maintenance, operations, repair, enterprise security management and complete network outsourcing. Going Concern Doubt Eisner LLP, in New York, expressed substantial doubt about General DataComm Industries Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Sept. 30, 2007. The auditing firm reported that the company has both a working capital and stockholders' deficit at Sept. 30, 2007, and has no current ability to obtain new financing. The company has no current ability to borrow additional funds. It must, therefore, fund operations from cash balances, cash generated from operating activities and any cash that may be generated from the sale of non-core assets such as real estate and others. The company has $28,306,954 of debentures including accrued interest which mature on Oct. 1, 2008, which it is presently unable to pay. GENERAL GROWTH: 2 Ind. Directors Assumes Senior Management Roles ----------------------------------------------------------------- General Growth Properties, Inc. disclosed that two independent directors of the company will assume senior management positions effective immediately. Adam Metz will serve as interim chief executive officer, and Thomas H. Nolan Jr. will serve as interim president, positions previously held by John Bucksbaum and Robert A. Michaels. Mr. Bucksbaum will continue to serve as chairman and Mr. Michaels will continue to serve as chief operating officer and a senior officer of the company. In order to maintain a majority of independent directors, Mr. Michaels has also given up his board seat. "[Messrs. Metz and Nolan] bring a wealth of real estate and finance experience to our company," Mr. Bucksbaum said. "I fully support the board of director's decision to have them join the senior management team, given their deep knowledge of our industry and extensive relationships." "We recognize that we are facing unprecedented challenges in this economic environment, and we are committed to working with all our stakeholders to achieve a successful outcome to our strategic review process," Mr. Metz said. "[Messrs. Bucksbaum and Michaels] remain committed to the company's success and will continue to play important roles both in the strategic review process and in the ongoing operations of the company. [Mr. Nolan] and I look forward to working with both of them." The company's board of directors and management team, along with its financial and legal advisors, continue to be fully engaged in a comprehensive evaluation of all financial and strategic alternatives for the company, including but not limited to, asset sales, joint ventures, corporate level capital infusions, and broader strategic business combinations. Along with other assets currently being marketed, the company's board of directors and management team have elected to market for sale its portfolio of retail properties in Las Vegas, Nevada: Fashion Show Mall, Grand Canal Shoppes, and The Palazzo. Goldman, Sachs & Co. and Eastdil Secured will be jointly responsible for the marketing effort, which is expected to begin immediately. In conjunction with the sale process, the company is working with its syndicate of lenders on Fashion Show Mall and The Palazzo to extend the Nov. 28, 2008, maturity date. The company continues to remain current on all of its debt obligations. Mr. Metz is a founding partner of Polaris Capital LLC. Before founding Polaris, Mr. Metz was executive vice president and chief investment officer of Rodamco, North America, with approximately $6 billion of real estate assets in regional malls. Previously, he had been president, chief financial officer and director of Acquisitions for Urban Shopping Centers, Inc. where he worked from 1993 until its sale in 2000. Prior to joining Urban, he held positions in the Capital Markets group of JMB Realty and in the Commercial Real Estate Lending Group at The First National Bank of Chicago. Mr. Nolan was a managing director of Trefethen & Co, a real estate advisory and investment firm. From 1984 to 2004, Mr. Nolan held various positions at AEW Capital Management LP, a national real estate investment advisor, including president and senior portfolio of the AEW Partners Group, the Private Equity division of AEW, well as serving as a member of the firm's management and investment committees. At AEW, Mr. Nolan also represented institutional clients in the overall management of their real estate portfolios with services ranging from troubled debt restructuring to initial public offerings, including representing a client on the Partnership Committee of the Taubman Realty Group. The company also disclosed that it has recently come to the attention of the board that an affiliate of a Bucksbaum family trust advanced unsecured loans to Mr. Michaels and Bernard Freibaum, the company's former director and CFO, for the purpose of repaying personal margin debt relating to company stock. The loan to Mr. Michaels, which totaled $10 million, has been repaid in full. The loan to Mr. Freibaum, whose employment was terminated prior to the board's knowledge of these loans, totaled $90 million and has $80 million presently outstanding. A review by the company's independent directors concluded that, while the failure to disclose the loans to the company's board of directors did not follow internal company policy, no company assets or resources were involved in the loans and that no laws or Securities and Exchange Commission rules were violated as a result of the loans. About General Growth Properties, Inc. General Growth is a U.S.-based publicly traded Real Estate Investment Trust (REIT). The company currently has ownership interest in, or management responsibility for, a portfolio of more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The company's portfolio totals approximately 200 million square feet and includes over 24,000 retail stores nationwide. The company is listed on the New York Stock Exchange under the symbol GGP. * * * As reported in the Troubled Company Reporter on Oct. 7, 2008, Moody's Investors Service has lowered the ratings on General Growth Properties, Inc., certain of its subsidiaries and The Rouse Company LP (to Ba3 from Ba2 senior secured bank debt; to Ba3 from Ba2 senior unsecured debt) and placed the ratings on review for possible downgrade. As reported in the Troubled Company Reporter on Oct. 8, 2008, Standard & Poor's Ratings Services lowered its corporate credit rating on General Growth Properties Inc. to 'B+' from 'BB'. At the same time, it lowered the rating on the company's unsecured debt to 'B' from 'BB-', affecting roughly $5 billion of securities. The recovery rating assigned to the company's unsecured debt remains unchanged at '5'. All of S&P's General Growth-related ratings remain on CreditWatch with negative implications. As reported in the Troubled Company Reporter on Oct. 16, 2008, Fitch Ratings has downgraded and placed on Rating Watch Negative the Issuer Default Ratings and outstanding debt ratings of General Growth Properties and its subsidiaries as: General Growth Properties, Inc. -- IDR to 'B+' from 'BB'. GGP Limited Partnership -- IDR to 'B+' from 'BB'; -- Revolving credit facility to 'B/RR5' from 'BB'; -- Term loan to 'B/RR5' from 'BB'; -- Exchangeable senior notes to 'B/RR5' from 'BB'; -- Perpetual preferred stock (indicative) to 'CCC+/RR6' from 'B+'. The Rouse Company LP -- IDR to 'B+' from 'BB'; -- Senior unsecured notes to 'B/RR5' from 'BB'. Fitch has also downgraded and withdrawn these ratings: Price Development Company, L.P.: -- IDR to 'B+' from 'BB+' -- Senior unsecured notes to 'B' from 'BB+'. Fitch's actions affect approximately $6.3 billion of outstanding indebtedness. GENERAL GROWTH: Sells L.V. Malls, Seeks Delay of $900M Mortgages ---------------------------------------------------------------- Kris Hudson at The Wall Street Journal reports that General GrowthProperties Inc. is selling its three luxury Las Vegas malls as part of an effort to try to raise capital to pay down debt and to keep the debt load from dragging the company into bankruptcy. Along with other assets currently being marketed, the company's Board of Directors and management team have elected to market for sale its portfolio of retail properties in Las Vegas, Nevada: -- Fashion Show Mall, -- Grand Canal Shoppes, and -- The Palazzo. Goldman, Sachs & Co. and Eastdil Secured will be jointly responsible for the marketing effort, which is expected to begi immediately. In conjunction with the sale process, the company is working with its syndicate of lenders on Fashion Show Mall and The Palazzo to extend the Nov. 28, 2008, maturity date of their $900 million in mortgages. WSJ relates that without an extension or new funding, General Growth doesn't have the cash on hand to pay that debt. WSJ relates that analysts believe that the sale of the three malls could pay off their $1.3 billion in mortgages and might yield an additional hundred millions of dollars to pay down $600 million in bonds due in the spring, but buyers that are able to finance high- dollar purchases in this credit crunch are few. General Growth said in a statement that it continues to remain current on all of its debt obligations. WSJ states that General Growth, with the help of Goldman Sachs and Morgan Stanley, had tried to raise capital by seeking out investors to purchase $1.5 billion to $2 billion in preferred stock. Citing a person familiar with the matter, the report says that the effort ended in recent days, causing General Growth to decide to sell the Las Vegas malls. About General Growth General Growth is a U.S.-based publicly traded Real Estate Investment Trust (REIT). The company currently has ownership interest in, or management responsibility for, a portfolio of more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The company's portfolio totals approximately 200 million square feet and includes over 24,000 retail stores nationwide. The company is listed on the New York Stock Exchange under the symbol GGP. * * * As reported in the Troubled Company Reporter on Oct. 7, 2008, Moody's Investors Service has lowered the ratings on General Growth Properties, Inc., certain of its subsidiaries and The Rouse Company LP (to Ba3 from Ba2 senior secured bank debt; to Ba3 from Ba2 senior unsecured debt) and placed the ratings on review for possible downgrade. As reported in the Troubled Company Reporter on Oct. 8, 2008, Standard & Poor's Ratings Services lowered its corporate credit rating on General Growth Properties Inc. to 'B+' from 'BB'. At the same time, it lowered the rating on the company's unsecured debt to 'B' from 'BB-', affecting roughly $5 billion of securities. The recovery rating assigned to the company's unsecured debt remains unchanged at '5'. All of S&P's General Growth-related ratings remain on CreditWatch with negative implications. As reported in the Troubled Company Reporter on Oct. 16, 2008, Fitch Ratings has downgraded and placed on Rating Watch Negative the Issuer Default Ratings and outstanding debt ratings of General Growth Properties and its subsidiaries as: General Growth Properties, Inc. -- IDR to 'B+' from 'BB'. GGP Limited Partnership -- IDR to 'B+' from 'BB'; -- Revolving credit facility to 'B/RR5' from 'BB'; -- Term loan to 'B/RR5' from 'BB'; -- Exchangeable senior notes to 'B/RR5' from 'BB'; -- Perpetual preferred stock (indicative) to 'CCC+/RR6' from 'B+'. The Rouse Company LP -- IDR to 'B+' from 'BB'; -- Senior unsecured notes to 'B/RR5' from 'BB'. Fitch has also downgraded and withdrawn these ratings: Price Development Company, L.P.: -- IDR to 'B+' from 'BB+' -- Senior unsecured notes to 'B' from 'BB+'. Fitch's actions affect approximately $6.3 billion of outstanding indebtedness. GENERAL GROWTH: Pres. & CEO's Resignation Cues Fitch's Ratings Cut ------------------------------------------------------------------ Fitch Ratings has downgraded the Issuer Default Ratings and outstanding debt ratings of General Growth Properties and its subsidiaries as: General Growth Properties, Inc. -- IDR to 'B' from 'B+'. GGP Limited Partnership -- IDR to 'B' from 'B+'; -- Revolving credit facility to 'B-/RR5' from ' B/RR5'; -- Term loan to 'B-/RR5' from ' B/RR5'; -- Exchangeable senior notes to 'B-/RR5' from ' B/RR5'; -- Perpetual preferred stock (indicative) to 'CCC/RR6' from 'CCC+/RR6'. The Rouse Company LP -- IDR to 'B' from 'B+'; -- Senior unsecured notes to 'B-/RR5' from ' B/RR5'. The ratings remain on Rating Watch Negative by Fitch. The rating actions are based on the resignations of John Bucksbaum and Robert Michaels from their positions as GGP's Chief Executive Officer and President, respectively. While Messrs. Bucksbaum and Michaels will remain as GGP's Chairman and Chief Operating Officer, respectively, Fitch is concerned that these management changes may be disruptive to the company's daily management and execution of financial and strategic alternatives, the pursuit of which was announced by GGP on Sept. 22, 2008. Consistent with Fitch's Oct. 14 press release, resolution of the Negative Rating Watch will be driven by GGP's ability to refinance, extend or otherwise amend the terms of its near-term indebtedness to provide the company with additional liquidity and financial flexibility. Fitch would consider further downgrades if fixed charge coverage metrics weaken from current levels or if the earnings power of the company were reduced due to asset sales. In contrast, Fitch would consider a rating affirmation and Stable Outlook if GGP successfully addressed its near-term unsecured and secured debt maturities while maintaining solid fundamentals for its operating properties. GGP is a Chicago-based real estate investment trust engaged in acquiring, developing, renovating and managing regional malls in major and middle markets throughout the United States. GGP also has investments in commercial office buildings and community development projects purchased in connection with the Rouse acquisition in 2004. As of June 30, 2008, GGP owned interests in over 200 million square feet of properties and had $33.4 billion in total undepreciated book assets. GEO GROUP: S&P Holds 'BB+' Rating on Proposed $100MM Debt Add-On ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB+' senior secured debt rating on Boca Raton, Florida-based The GEO Group Inc.'s proposed $100 million add-on to its revolving credit facility. The facility is expected to increase from $150 million to $250 million depending on market demand. The upsized revolving credit facility and term loan B facility are rated 'BB+' with a recovery rating of '1', indicating expectations of very high recovery in the event of a payment default. S&P also affirmed the company's 'BB-' corporate credit and 'BB-' senior unsecured note ratings. However, S&P revised the unsecured note recovery rating from '3' to '4', indicating expectations of average recovery in the event of a payment default, and reflecting the increased amount of priority obligations ahead of these notes due to the add-on to the revolving credit facility. The outlook is stable. As of June 29, 2008, GEO had about $360 million of recourse debt. The ratings on GEO reflect the company's narrow business focus in an industry that is subject to social and political policy changes, customer concentration, a highly leveraged financial profile, and substantial capital-expenditure program during an extremely challenging capital market environment. The company's strong market position, limited industry cyclicality, and favorable demographic trends mitigate these factors. GEO is a narrowly focused company that provides a range of prison and correctional services to U.S. federal, state, local, and overseas government agencies. The outlook on GEO is stable. "We believe the company should be able to expand its business by bringing new capacity on line, while maintaining solid, albeit slightly lower, occupancy rates, and lease-adjusted leverage in the 3.5x area," noted Standard & Poor's credit analyst Jerry Phelan. S&P could revise the outlook to negative if delays in filling new capacity result in occupancy rates declining below current expectations, if liquidity becomes strained due to higher-than-expected capital expenditures, or lower-than-expected cash flows or lease-adjusted leverage exceeds 4x. "An outlook revision to positive, although unlikely over the near term, could occur if GEO successfully fills new capacity and sustains occupancy rates near current levels, and if operating cash flow exceeds our expectations, which would enable GEO to reduce lease-adjusted leverage below 3x," he continued. GLOBAL MOTORSPORT: Wants Plan Filing Period Extended to Dec. 2 -------------------------------------------------------------- Global Motorsport Group Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive periods to: a) file a plan through and including Dec. 29, 2008; and b) solicit acceptances on a plan through and including Feb. 27, 2009. This is the Debtors' second request for an extension of the Exclusive Periods. On Sept. 9, 2008, the Court extended the Debtors' exclusive period to file a plan to Sept. 29, 2008, and their exclusive period to solicit acceptances of a plan to Nov. 27, 2008. As reported in the Troubled Company Reporter on March 12, 2008, the Debtors obtained approval from the Court to sell substantially all their assets to Dae-II USA Inc., which sale closed on March 7, 2008. Under the Asset Purchase Agreement, Dai-II may request the assumption of certain "Held Contracts", as that term is defined in the APA. As in their first request for extension of their exclusive periods, the Debtors tell the Court that they need additional time to negotiate and formulate an acceptable plan with creditors, and to review and analyze claims filed in these cases in order to effectively move the plan process forward. In addition, they will use the additional time to address post-closing issues with Dae-II under the APA, including the assumption and assignment of the Held Contracts. The Debtors further say that they believe that the additional time to formulate a plan will be most beneficial to the estates and will be the most efficient use of the estates' assets and resources. About Global Motorsport Headquartered in Morgan Hill, California, Global Motorsport Group Inc. -- http://www.gmgracing.com/home.shtml-- is a dealer of European model sports cars. The company is also known as Global Motorsport Parts Inc. The company and three of its affiliates filed for protection on Jan. 31, 2008 (Bankr. D. Del. Lead Case No. 08-10192). The Debtors selected Laura Davis Jones, Esq., James O'Neill, Esq., and Joshua Fried, Esq., at Pachulski Stang Ziehl & Jones LLP, as their counsel. T. Scott Avil, Esq., at CRG Partners Group LLC, is the Debtors' restructuring services provider. Federico G.M. Mennella, Esq., is the Debtors' investment banker. The Debtors selected Epiq Bankruptcy Solution LLC as their claims agent. The U.S. Trustee for Region 3 has appointed five creditors to serve on an Official Committee of Unsecured Creditors in these cases. Jeffrey M. Schlerf, Esq., Eric M. Sutty, Esq., and Kathryn D. Saille, Esq., at Bayard P.A., and James Donell, Esq., at Andrews Kurth LLP, represent the Committee in these cases. Edward T. Gavin, CTP, at NachmanHaysBrownstein, Inc., is the Committee's financial advisor. Adam Harris, Esq., and David Hillman, Esq., at Schulte Roth & Zabel LLP, serve as counsel to the prepetition and postpetition secured lenders. When the Debtors filed for protection from their creditors, they listed assets of between $50 million and $100 million and debts of between $100 million and $500 million. GMAC LLC: Wants Access to Gov't Financial Rescue Plan ----------------------------------------------------- GMAC LLC wants to become a bank holding company to gain access to the government's $700 billion financial bailout plan, Damian Paletta and John D. Stoll at The Wall Street Journal report, citing people familiar with the talks. WSJ relates that Cerberus Capital Management LP, which co-owns GMAC with General Motors Corp., has been in talks with the Federal Reserve for more than a month. Cerberus Capital is also negotiating for a merger between GM and Chrysler LLC, which it controls. According to WSJ, Cerberus Capital has sought to exchange most of its Chrysler holdings for a larger share of GMAC. Cerberus Capital now controls 51% of GMAC. Citing sources, WSJ states that the GM-Chrysler negotiations seem to be being structured to ensure Cerberus and GM can take advantage of financial bailout programs offered by the Treasury Department and the Federal Reserve. For a bank registration for GMAC, GM may need to transfer at least 50% of its ownership in GMAC to Cerberus so that GM no longer owned more than 24.9% of the voting shares, and won't have a controlling interest in GMAC under federal law, WSJ states. WSJ reports that GMAC, as a bank holding company, could get equity injections from the Treasury Department's capital purchase program. The report says that the Federal Deposit Insurance Corp. could temporarily guarantee GMAC's debt. According to the report, GMAC could gain some flexibility in funding its operations and it could access the Fed's discount window for inexpensive, short-term emergency loans. People familiar with the talks said that Cerberus Capital could merge GMAC and Chrysler Financial, Chrysler's lending arm, and place them under the control of the bank holding company, WSJ relates. GMAC's plan to become a bank holding company would need approval from several government agencies, WSJ states. WSJ quoted Gil Schwartz -- a former Fed attorney and a partner at Schwartz & Ballen LLP -- as saying, "You want to be a regulated entity now, because it provides confidence to the market that you've got the Fed providing oversight and you have the ability to qualify for a broader range of programs." According to WSJ, GMAC has an industrial bank chartered in Utah that doesn't have the full powers of a commercial bank, which had $32 billion of assets and $17 billion of deposits as of June 30, 2008. That industrial bank, says WSJ, could be converted into a commercial bank or a national bank if it gets the regulators' approval. Cerberus Capital might have to form several bank holding companies within its own structure to control the new bank holding company, WSJ reports. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Aug. 11, 2008, Standard & Poor's Ratings Services lowered its ratings on Chrysler LLC, including the corporate credit rating, to 'CCC+' from 'B-'. On July 31, 2008, TCR said that Fitch Ratings downgraded the Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'. The Rating Outlook is Negative. The downgrade reflects Chrysler's restricted access to economic retail financing for its vehicles, which is expected to result in a further step-down in retail volumes. Lack of competitive financing is also expected to result in more costly subvention payments and other forms of sales incentives. Fitch is also concerned with the state of the securitization market and the ability of the automakers to access this market on an economic basis over the near term, given the steep drop in residual values, higher default rates, higher loss severity being experienced and jittery capital market. 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. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. At June 30, 2008, the company's balance sheet showed total assets of US$136.0 billion, total liabilities of US$191.6 billion, and total stockholders' deficit of US$56.9 billion. For the quarter ended June 30, 2008, the company reported a net loss of US$15.4 billion over net sales and revenue of US$38.1 billion, compared to a net income of US$891.0 million over net sales and revenue of US$46.6 billion for the same period last year. About GMAC LLC GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors Acceptance Corporation, is a global, diversified financial services company that operates in approximately 40 countries in automotive finance, real estate finance, insurance and other commercial businesses. GMAC was established in 1919 and employs approximately 26,700 people worldwide. GMAC Financial Services is in turn wholly owned by GMAC LLC. Cerberus Capital Management LP led a group of investors that bought a 51% stake in GMAC LLC from General Motors Corp. in December 2006 for $14 billion. GOE LIMA: Court Extends Time to File Schedules to November 13 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Ohio has extended the time within which GOE Lima, LLC, must file its schedules of assets and liabilities, schedules of executory contracts and unexpired leases, and statements of financial affairs, by 15 days, or until Nov. 13, 2008, without prejudice to its right to seek further extensions of such deadline upon submission of cause. Based in Lima, Ohio, GOE Lima, LLC -- http://www.go-ethanol.com/ -- operates an ethanol production facility in Ohio. The company filed for Chapter 11 relief on Oct. 14, 2008 (Bankr. N.D. Ohio Case No. 08-35508). Timothy J. Hurley, Esq., at Taft, Stettinius & Hollister LLP, represents the Debtor as counsel. When the Debtor filed for protection from its creditors, it listed assets and debts of between $100 million and $500 million each. GOE LIMA: U.S. Trustee Appoints Five-Member Creditors Panel ----------------------------------------------------------- Daniel M. McDermott, the U.S. Trustee for Region 9, appointed five creditors to serve on the Official Committee of Unsecured Creditors in GOE Lima LLC's Chapter 11 case. The Creditors Committee members are: a) BP Canada Energy Marketing Corp. and BP Products North America Inc. Attn: Kenny Foo 1200-240 4th Avenue SW P.O. Box 200 Calgary, Alberta Canada T2p 2h8 Tel: (281) 366-2760 Fax: (281) 366-6335 b) Benchmark Design USA Inc. Attn: David R. Walker, President 2155 N. McMullen Booth Road Clearwater, FL 33759 Tel: (727) 669-7036 Fax: (727) 669-7039 c) PVS-Nolwood Chemicals Inc. Attn: Jonathan S. Taub 1900 Harper Avenue Detroit, MI 48213 Tel: (313) 924-2629 Fax: (313) 921-1378 d) Eagle Construction and Environmental Services, L.P. Attn: Marc Walraven 9701 East I-20 P.O. Box 872 Eastland, TX 76448 Tel: (254) 629-1718 Fax: (254) 629-8625 e) Ottawa Oil Co. Inc. Attn: Dennes J. Knott P.O. Box 346 Ottawa, OH 44875 Tel: (419) 523-6441 Fax: (419) 523 5568 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Based in Lima, Ohio, GOE Lima, LLC -- http://www.go-ethanol.com/ -- operates an ethanol production facility in Ohio. The company filed for Chapter 11 relief on Oct. 14, 2008 (Bankr. N.D. Ohio Case No. 08-35508). Timothy J. Hurley, Esq., at Taft, Stettinius & Hollister LLP, represents the Debtor as counsel. When the Debtor filed for protection from its creditors, it listed assets and debts of between $100 million and $500 million each. GREENWICH CAPITAL: S&P Junks Rating on Class Q Certificates ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on five classes of commercial mortgage pass-through certificates from Greenwich Capital Commercial Funding Corp.'s series 2007-GG9. In addition, S&P affirmed its ratings on 20 classes from this series. The downgrades reflect credit concerns with five of the 22 loans in the pool that have or will have low reported debt service coverage. The downgrades also reflect credit concerns with the one asset with the special servicer, LNR Partners Inc. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. There are 21 loans in the pool totaling $591.3 million (9.0%) with low reported DSCs. The loans are secured by a variety of property types with an average balance of $28.2 million. These loans have experienced an average decline in DSC of 30% since issuance. The seven loans that are credit concerns are secured by a variety of property types and have experienced a combination of declining occupancy and higher operating expenses. The remaining loans are in various stages of renovation or lease-up, and the net cash flow available for debt service is expected to improve in the future; these loans are not credit concerns at this time. The Linens HQ Clifton loan ($15.2 million, 0.2%), the only loan with LNR, is secured by a 164,034-sq.-ft. office property in Clifton, New Jersey. The loan was transferred to LNR on July 10, 2008, because the sole tenant, Linens 'n Things, declared bankruptcy. The loan is now current, but it is unclear whether it will remain current due to the announced liquidation of the remaining Linens 'n Things stores. Standard & Poor's will continue to monitor the situation. As of the Oct. 10, 2008, remittance report, the collateral pool consisted of 201 loans with an aggregate trust balance of $6.56 billion, compared with the same number of loans totaling $6.58 billion at issuance. The master servicer, Wachovia Bank N.A., reported financial information for 97.7% of the pool. Ninety-seven percent of the servicer-provided information was full-year 2007 data. Standard & Poor's calculated a weighted average DSC of 1.37x for the pool, down from 1.54x at issuance. The trust has experienced no losses to date. The top 10 loans, excluding 590 Madison Avenue and 667 Madison Avenue, have an aggregate outstanding balance of $2.26 billion (32%) and a weighted average DSC of 1.35x, down from 1.48x at issuance. S&P excluded the 590 Madison Avenue and 667 Madison Avenue loans because their initial values represent stabilized figures. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 exposures, and all were characterized as "good." The credit characteristics of the 590 Madison Avenue (5.3%) and Merchandise Mart (2.7%) loans are consistent with those of investment-grade obligations; however, the credit characteristics of the Victoria Ward Warehouse and Plaza loan (0.6%) are no longer consistent with those of an investment-grade rated obligation. Details of these loans are: -- The 590 Madison Avenue loan is the second-largest exposure in the pool, with a trust balance of $315.0 million. The loan is secured by a 1.0 million-sq.-ft. office building in New York City. As of June 30, 2008, the DSC was 2.62x and occupancy was 100.0%, compared with 96.0% occupancy at issuance. Standard & Poor's adjusted value for this loan is comparable to its level at issuance. -- The Merchandise Mart loan is the ninth-largest exposure in the pool, with a trust balance of $175.0 million and a whole-loan balance of $350.0 million. The remaining $175.0 million piece is held within the JPMC 2006-LDP9 transaction. The loan is secured by a 3.4 million-sq.-ft. office building in Chicago. As of year-end 2007, reported DSC was 2.37x and occupancy was 84.1%, compared with 98.3% occupancy at issuance. Standard & Poor's adjusted value for this loan is comparable to its level at issuance. -- The Victoria Ward Warehouse and Plaza loan has a trust balance of $40.0 million and a whole-loan balance of $68.5 million. The loan is secured by 159,490 sq. ft. of a mixed-use property in Honolulu. As of Dec. 31, 2007, reported DSC was 2.05x and occupancy was 78.1%, compared with 91.0% occupancy at issuance. Standard & Poor's adjusted NCF for this loan is down 18.6% from its level at issuance due to declines in occupancy and rental income. Wachovia reported a watchlist of 43 loans ($1.2 billion, 18.8%). The 667 Madison loan ($250.0 million, 3.8%) is the largest loan on the watchlist and the fourth-largest exposure in the pool. The loan is secured by a 250,731-sq.-ft. office property in New York City. The loan appears on the watchlist because of a decline in DSC to 1.12x. The tenants at the property pay below-market rents, and the DSC is expected to increase over time; at this time, the loan is not a credit concern. Standard & Poor's identified seven properties ($238.5 million; 3.6%) in areas affected by Hurricane Ike. The master servicer could not confirm whether three of the properties ($82.8 million; 1.3%) were damaged. The remaining properties sustained either no damage or minor damage that is already under repair. The master servicer stated that it found the insurance coverage to be sufficient and that none of the properties were in the flood zone. Standard & Poor's will continue to evaluate these loans and review information as it becomes available. Standard & Poor's stressed the loans on the watchlist and the other loans with credit issues as part of its analysis. The resultant credit enhancement levels support the lowered and affirmed ratings. Ratings Lowered Greenwich Capital Commercial Funding Corp. Commercial mortgage pass-through certificates series 2007-GG9 Class To From Credit enhancement ----- -- ---- ------------------ M BB- BB 2.25% N B+ BB- 1.88% O B B+ 1.63% P B- B 1.38% Q CCC+ B- 1.25% Ratings Affirmed Greenwich Capital Commercial Funding Corp. Commercial mortgage pass-through certificates series 2007-GG9 Class Rating Credit enhancement ----- ------ ------------------ A-1 AAA 30.06% A-2 AAA 30.06% A-3 AAA 30.06% A-AB AAA 30.06% A-4 AAA 30.06% A-1-A AAA 30.06% A-M AAA 20.04% AM-FL AAA 20.04% A-J AAA 11.27% B AA+ 10.77% C AA 9.27% D AA- 8.64% E A+ 8.02% F A 7.14% G A- 6.26% H BBB+ 5.01% J BBB 4.01% K BBB- 3.01% L BB+ 2.50% X AAA N/A N/A -- Not applicable. GPS INDUSTRIES: New Mgt. Team Aims to Achieve Revenue Growth ------------------------------------------------------------ GPS Industries, Inc. disclosed in a Securities and Exchange Commission filing that David Chessler, chief executive officer, has sent shareholders these updates on certain of the company's activities. "As you may be aware, GPSI has recently transitioned to a new management team. During the recent adjustment period the company saw a drop in share price, along with a general uncertainty about the future of the company. I am writing this shareholder update to assure you that the company now has a great new management team, along with decreased operating costs, better margins and increased profitability, and a specific plan to achieve dramatic new revenue growth. "A great company begins with great people, and I am pleased to announce that the company's new management team is now completely in place, starting with myself as the new CEO. Kevin Carpenter is the new V.P. of Sales. And we are finalizing the terms with our new President - COO and CFO. More information about the new management will follow in public press releases, but let me assure you right now, we have great talent in all areas of this company with this new management team. "GPSI's new management is now focused on a three-fold strategy to achieve profitability. First, we are aggressively decreasing our operating costs by merging our operations into a single new company headquarters located in Sarasota, Florida, while simultaneously downsizing our Vancouver and Austin offices. We feel this consolidation will substantially lower our operating costs, and eliminate redundant and wasteful spending. "Secondly, the company is actively and currently seeking partnerships to pursue growth opportunities in the worldwide direct-to-consumer GPS market. Whereas our products in the past have focused exclusively on business-to-business GPS/WiFi solutions, we are now focused on dramatically expanding our market presence with services and products aimed at the consumer hand- held GPS market. This includes aggressively defending our worldwide patents on golf related GPS applications, including golf related advertising patents covering cart-based and handheld GPS devices. In conjunction with this, we have recently announced lawsuits against ABC Media and Prolink, among others, who we believe are in direct violation of our company's patents. "Lastly, we have doubled our focus on sales, resulting in sales revenue increasing an estimated 100% over 2007. We strongly believe that with the economic credit crisis facing the world today, our finance relationship with Green Tulip will stabilize GPSI and elevate us as the only sound GPS choice in the GPS market place. "Management is confident that GPSI is now heading in the direction of growth and profitability without new management and new strategy. More details will follow in our press releases and SEC filings. We thank you for your continued support of GPSI, and we believe your confidence in the company will increase decisively in the months to come." Going Concern Doubt Sherb & Co., LLP, in New York, expressed substantial doubt about GPS Industries Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm reported that the company has incurred significant losses and has a working capital deficiency. At June 30, 2008, the company's consolidated balance sheet showed $35,746,000 in total assets, $33,419,000 in total liabilities, and $2,327,000 in total stockholders' equity. The company's consolidated balance sheet at June 30, 2008, also showed strained liquidity with $12,138,000 in total current assets available to pay $18,423,000 in total current liabilities. GPS Industries Inc. reported a net loss of $3,866,000 on revenue of $4,564,000 for the second quarter ended June 30, 2008, compared with a net loss of $2,064,000 on revenue of $2,215,000 in the second quarter ended June 30, 2007. About GPS Industries Headquartered in Surrey, B.C. Canada, GPS Industries Inc. (OTC BB: GPSN.OB) -- http://www.gpsindustries.com/-- develops and markets GPS and Wi-Fi multimedia solutions for use with golf course operations and residential community developments. The company's primary business is the development, manufacture and sale of the Inforemer HDX mobile display units (MDU) in both cart mounted and hand held product lines along with the related infrastructure. GRANITE CITY: Gets $1-per-Share Criteria Non-Compliance Notice -------------------------------------------------------------- Granite City Food & Brewery Ltd. received a notice from NASDAQ regarding its non-compliance with the $1.00 per share minimum requirement for continued listing of its common stock under Marketplace Rule 4450(a)(5). NASDAQ further advised that it has determined to suspend enforcement of its bid price and market value of publicly held shares requirements through Jan. 16, 2009. Following reinstatement of these rules, Granite City will be provided until July 20, 2009, to regain compliance. If Granite City has not regained compliance by the expiration of the temporary rule suspension, management anticipates that it will prepare a plan to achieve compliance with NASDAQ listing requirements. Such plan may include a request to transfer the listing of the company's common stock to the NASDAQ Capital Market, which would, if the company's application is approved, provide the company with a second period of 180 calendar days to regain compliance. If NASDAQ determines that Granite City's plan does not adequately address the noted non-compliance, or if Granite City fails to maintain compliance with any other listing requirement, Granite City will receive notice that its securities will be delisted from NASDAQ. At that time, Granite City would have the ability to appeal the decision to a NASDAQ Listing Qualifications Panel. If Granite City's securities do not continue to be listed on NASDAQ, such securities would become subject to certain rules of the SEC relating to "penny stocks." Such rules require broker- dealers to make a suitability determination for purchasers and to receive a purchaser's prior written consent for a purchase transaction, thus restricting the ability to purchase or sell the securities in the open market. In addition, trading, if any, would be conducted in the over-the-counter market in the so-called "pink sheets" or on the OTC Bulletin Board, which was established for securities that do not meet NASDAQ listing requirements. Consequently, selling Granite City's securities would be more difficult because smaller quantities of securities could be bought and sold, transactions could be delayed, and security analyst and news media coverage of Granite City may be reduced. These factors could result in lower prices and larger spreads in the bid and ask prices for Granite City securities. There can be no assurance that Granite City securities will continue to be listed on NASDAQ. About Granite City Food & Brewery Ltd. Based in Minneapolis, Minnesota, Granite City Food & Brewery Ltd. (NASDAQ:GCFB) -- http://www.gcfb.net/-- is a modern American upscale casual restaurant chain that operates 25 restaurants in 11 states. T he menu features affordable quality family favorite menu items. Granite City opened its first restaurant in 1999. HAIGHTS CROSS: Kevin McAliley Ceases as Executive Vice President ---------------------------------------------------------------- Haights Cross Communications, Inc., disclosed in a Securities and Exchange Commission filing that Kevin McAliley, executive vice president of Haights, and president and chief executive officer of Triumph Learning, LLC, an indirect wholly owned subsidiary, will no longer be serving in those positions effective Oct. 22, 2008. About Haights Cross Founded in 1997 and based in White Plains, New York, Haights Cross Communications Inc. -- http://www.haightscross.com/-- is a developer and publisher of products for the K-12 supplemental education and library markets. The company's products include supplemental reading books with a concentration on non-fiction content, state-specific test preparation materials, skills assessment and intervention books and unabridged audiobooks. The company's products are sold primarily to schools and libraries. At June 30, 2008, the company's consolidated balance sheet showed $339.1 million in total assets and $479.4 million in total liabilities, resulting in a $140.3 million stockholders' deficit. Including income on disposal of discontinued operations of $15.4 million, the company reported net income of $16.3 million for the second quarter ended June 30, 2008. This compares with a net loss of $14.4 million, including income from discontinued operations of $367,000, for the same period last year. * * * As reported in the Troubled Company Reporter on Aug. 29, 2008, Moody's Investors Service affirmed Haights Cross Communications, Inc.'s Caa3 Corporate Family rating while upgrading its Probability of Default rating to Caa3 from Ca, following the company's announcement that it has successfully refinanced its prior senior secured term loan. At the same time, Standard & Poor's Ratings Services affirmed its 'CCC' corporate credit rating on Haights Cross Communications Inc. (HCC) and removed the ratings from CreditWatch, where they were placed with negative implications on June 16, 2008, based on Standard & Poor's concern about the company's ability to repay its $124.5 million senior secured term loan on Aug. 15, 2008. The outlook is stable. HAYES LEMMERZ: Car Production Slowdown Cues Fitch to Hold Ratings ----------------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Ratings and outstanding debt ratings of Hayes Lemmerz International Inc. and subsidiaries as: Hayes Lemmerz International, Inc. -- IDR at 'B'. Fitch has also revised HAYZ' Rating Outlook to Negative from Stable. Approximately $662 million of on balance sheet debt is covered by Fitch's ratings. The Outlook revision reflects declining automobile production trends in Europe and increasing concern about HAYZ's ability to meet and maintain its tightening leverage covenant. Additional concerns include the impact that commodity cost increases could have on working capital and margins, an expectation of negative free cash flow in the current fiscal year including restructuring costs, margin deterioration in the most recently reported quarter, and exposure to weak North American and European commercial truck production. Volume declines in Europe, which makes up approximately 58% of the company's revenue, will likely pressure HAYZ to reduce plant structure costs and capital expenditures in the region. HAYZ's senior secured credit facility net leverage covenant tightens from 3.75 times at July 31, 2008 to 3.5x at the end of October 2008 and 3.0x at the end of April 2009. Fitch is concerned that these covenant stepdowns could be difficult to meet and maintain, particularly the April 2009 level. The company reported 2.7x credit facility net leverage at the end of July. The ratings are supported by HAYZ's leading position in the global wheel market, geographic and customer diversity, significant progress in restructuring operations, solid credit metrics for the rating, and an adequate liquidity position. HAYZ has no significant debt maturities until 2014, but it has the option of reducing term loan borrowings if cash generation improves. Steel prices have come down recently though they remain at historically high levels. While HAYZ has a good history of recovering commodity cost increases, higher commodity costs require additional financing for working capital and could affect margins if the company is unable to achieve full cost recovery. HAYZ has made significant progress in restructuring operations. This year it has closed its Belgium and Gainesville, Georgia, passenger wheel facilities and is in the process of selling its Nuevo Laredo Powertrain facility. These facilities have yielded negative EBITDA and cash flow, and their closings could yield an EBITDA improvement of between $30 million-$40 million. Fitch no longer estimates a material rebound in commercial truck volume next year in North America, and European commercial truck volume will remain under pressure. Going forward, HAYZ is expected to benefit from its steel wheel technology, moves to lower cost countries, and growth prospects from non-Detroit 3 customers, especially in regions such as Eastern Europe, India, and Brazil. In fiscal 2008, Eastern Europe is expected to make up 24% of HAYZ's sales versus 13% in the U.S. The Recovery Ratings and notching in the debt structure reflect Fitch's recovery expectations under a scenario in which distressed enterprise value is allocated to the various debt classes. The analysis is based on a going concern scenario rather than liquidation. Fitch estimates that in a distressed scenario, HAYZ's enterprise value could significantly deteriorate and secured debtholders would most likely still receive full recovery. As a result, the senior secured facilities are rated 'RR1' (91% to 100% recovery). The senior unsecured Euro notes are rated 'RR5' (11% to 30%) to reflect the junior position of the senior unsecured debtholders' claim relative to the senior secured debtholders. Including the cash and marketable securities balance of $88 million, total liquidity at the end of the company's second quarter on July 31, 2008, was $222 million. At quarter-end, HAYZ had no borrowing under its $125 million secured revolver and Fitch estimates $9 million available under its U.S. securitization facility. Also as of July 31, Fitch calculates that HAYZ's gross debt-to-latest 12-month EBITDA rose to 4.5x, from 3.8x at the end of its fiscal year ending Jan. 30. Fitch's calculated debt-to- EBITDA metric is more conservative than the company's reported debt-to-LTM adjusted EBITDA figure, which is used to determine compliance with credit facility covenants. HAYZ is the world's largest producer of automotive and commercial highway steel and aluminum wheels, with operations in 13 countries and approximately 8,000 employees. HAYZ is today a wheels-focused company after divesture of its components segment businesses over the last several years. HAYZ generated 96% of its fiscal 2007 revenue from global wheel sales, and 80% of the company's revenue came from outside the U.S. Fitch has also affirmed these: HLI Operating Company, Inc. -- IDR at 'B'; -- Senior secured revolving credit facility at 'BB/RR1'. Hayz Lemmerz Finance - Luxembourg S.A. (European Holdco) -- IDR at 'B'; -- Senior secured revolving credit facility at 'BB/RR1'; -- Senior secured Euro term loan at 'BB/RR1'; -- Senior secured Euro synthetic LOC facility at 'BB/RR1'; -- Senior unsecured Euro notes at 'B-/RR5'. HEARTLAND AUTOMOTIVE: Court Approves Agreement With BP Plc ---------------------------------------------------------- Bill Rochelle of Bloomberg News reports that the United States Bankruptcy Court for the Northern District of Texas approved the agreement Heartland Automotive Holdings, Inc., and its debtor- affiliates entered into to pay London-based BP Plc a breakup fee ranging between $150,000 and $500,000 if an agreement doesn't work out for emerging from Chapter 11 with the stores rebranded as BP's Castrol Premium Lube Express. About Heartland Automotive Based in Omaha, Nebraska, Heartland Automotive Holdings Inc. -- http://www.heartlandjiffylube.com/-- and its debtor-affiliates are franchisees of Jiffy Lube International Inc. since 1980. The Debtors operate 438 quick-oil-change stores in 20 states across the Eastern, Midwestern and Western U.S. They employed in excess of 4,000 employees. The company and its nine affiliates filed for Chapter 11 protection on Jan. 7, 2008 (Bank. N.D. Tex. Lead Case No. 08-40057). Thomas E. Lauria, Esq., Patrick Mohan, Esq., Gerard Uzzi, Esq., Lisa Thompson, Esq., at White & Case LLP, and Jeff P. Prostok, Esq., at Forshey & Prostok, LLP, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as claims, noticing and balloting agent. The U.S. Trustee for Region 6 appointed seven creditors to serve on an Official Committee of Unsecured Creditors on these cases. The Committee selected Cadwalader, Wickersham & Taft LLP, and Munsch, Hardt, Kopf & Harr, PC as co-counsel. As of Nov. 29, 2007, the Debtors' financial statements reflected assets totaling about $334 million and liabilities totaling about $396 million. HEXION SPECIALTY: Credit Suisse & Deutsche Won't Fund Merger ------------------------------------------------------------ Hexion Specialty Chemicals, Inc., reported that it received correspondence from counsel to affiliates of Credit Suisse and Deutsche Bank stating that the banks don't believe that the solvency opinion of American Appraisal Associates and the solvency certificate of Huntsman Corporation's Chief Financial Officer meet the condition of the commitment letter. The banks said that as a result, they won't fund the proposed closing of the merger. Huntsman Corporation said it received a written opinion from American Appraisal, a leading valuation firm, which has concluded that the company to be formed from the pending merger of Hexion Specialty and Huntsman would be solvent. American Appraisal found that the combined Hexion-Huntsman company would satisfy all of the solvency tests commonly used in transactions of this nature. Huntsman's President and CEO, Peter R. Huntsman, stated, "American Appraisal is a well regarded and highly qualified valuation firm. As Vice Chancellor Lamb noted in his decision following the Delaware trial, Credit Suisse testified during the trial that they are prepared to fund their commitment 'if a compliant solvency certificate can be provided' at the closing. We plan to do so, and with an independent opinion to which no reasonable lender, acting in good faith, could object." Hexion Specialty disagreed with the banks' position and has advised them of their obligation to fulfill the financing commitment for the merger. Hexion Specialty informed Huntsman that it is working to resolve the banks' concerns and is still seeking to close the merger. Huntsman will continue to enforce its rights under the Merger Agreement and various court orders and will seek to consummate the merger promptly. Huntsman and Hexion entered into a Merger Agreement on July 12, 2007, pursuant to which Hexion agreed to acquire all of Huntsman's outstanding common stock for $28.00 per share in cash. On October 16, 2007, Huntsman stockholders holding a majority of the shares entitled to vote thereon approved a proposal to adopt the Merger Agreement. On June 18, 2008, Apollo Fund IV, Apollo Fund V, and various affiliated Apollo entities and Hexion filed an action for declaratory judgment against Huntsman in Delaware Chancery Court to avoid their obligations under the Merger Agreement. Among others, Hexion argued that it is not obligated to consummate the Merger if the combined company would be insolvent following the consummation of the Merger and that Hexion's liability for failure to consummate the Merger is limited to $325 million. Hexion alleged that since execution of the Merger Agreement, Huntsman has suffered a material adverse effect in its business, and that, if the conditions to closing were measured then, Hexion would have no obligation to make any payment to Huntsman in connection with the Merger. On July 4, 2008, Huntsman exercised its right under the Merger Agreement to extend the termination date of the Merger by 90 days to October 2, 2008. Huntsman asked the court to enjoin Hexion from continuing to breach the Merger Agreement and to specifically order Hexion to perform its obligations under the Merger Agreement. Huntsman also filed counterclaims against Hexion. On June 23, 2008, Huntsman filed a state court petition in Montgomery County, Texas, against Leon Black, Joshua J. Harris and Apollo alleging that Apollo and Messrs. Black and Harris tortiously interfered with and fraudulently induced Huntsman to terminate its June 25, 2007 merger agreement with Basell AF, an affiliate of Access Industries. Huntsman sought damages in excess of $3 billion. Apollo and Messrs. Black and Harris have denied liability and sought to dismiss or, alternatively, to stay the case until the Delaware action is concluded. On September 29, 2008, Vice Chancellor Stephen P. Lamb of the Court of Chancery of the State of Delaware issued an Opinion and an Order and Final Partial Judgment directing Hexion to specifically perform their covenants under the Merger Agreement. About Huntsman Headquartered in Salt Lake City, Utah, Huntsman Corporation (NYSE: HUN) -- http://www.huntsman.com/-- is a manufacturer of differentiated chemical products and inorganic chemical products. The company operates in four segments: Polyurethanes, Materials and Effects, Performance Products and Pigments. Its products are used in a range of applications, including those in the adhesives, aerospace, automotive, construction products, durable and non-durable consumer products, electronics, medical, packaging, paints and coatings, power generation, refining, synthetic fiber, textile chemicals and dye industries. Its Latin American operations are in Argentina, Brazil, Chile, Colombia, Guatemala, Panama and Mexico. At March 31, 2008, the company's consolidated balance sheet showed US$8.68 billion in total assets, US$6.71 billion in total liabilities, US$32.1 million in minority interests, and US$1.94 billion in total stockholders' equity. * * * As reported by the Troubled Company Reporter on Oct. 3, 2008, Standard & Poor's Ratings Services said that its ratings on Huntsman Corp. and Hexion Specialty Chemicals Inc. remain on CreditWatch with negative implications, where they were placed on July 5, 2007. The initial CreditWatch placement followed the announcement of Hexion's proposed debt-financed acquisition of Huntsman in a transaction valued at more than US$10 billion, including assumed debt. In June 2008, S&P said that its ratings on Huntsman Corp. (BB- /Watch Neg/--) remain on CreditWatch with negative implications, where they were placed on July 5, 2007. As reported in the Troubled Company Reporter on Oct. 6, 2008, Huntsman Corp. (Huntsman - Ba3 Corporate Family Rating - Rating Under Review For Downgrade) issued a press release on Sept. 29, 2008 announcing the decision of the Delaware Court of Chancery to enter judgment in favor of Huntsman denying all declarations sought by Apollo Management, L.P. and Hexion Specialty Chemicals, Inc. in their suit requesting that the Court excuse Hexion from its obligation to consummate the pending transaction. About Hexion Specialty Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. -- http://www.hexionchem.com/-- is a producer of thermosetting resins, or thermosets. Thermosets are a critical ingredient in virtually all paints, coatings, glues and other adhesives produced for consumer or industrial uses. Hexion Specialty Chemicals is controlled by an affiliate of Apollo Management L.P. Hexion Specialty Chemicals Inc.'s balance sheet at June 30, 2008, showed total assets of $3.9 billion and total liabilities of $5.4 billion, resulting in a shareholders' deficit of $1.5 billion. HOME EQUITY: Moody's Downgrades Ratings on 19 Cert. Transactions ---------------------------------------------------------------- Moody's Investors Service has downgraded 19 certificates from transactions issued by Home Equity Mortgage Trust. The transactions are backed by second lien loans. The certificates were downgraded because the bonds' credit enhancement levels, including excess spread and subordination were low compared to the current projected loss numbers at the previous rating levels. The actions take into account the continued and worsening performance of transactions backed by closed-end-second collateral. Substantial pool losses of over the last few months have eroded credit enhancement available to the mezzanine and senior certificates. Despite the large amount of write-offs due to losses, delinquency pipelines have remained high as borrowers continue to default. Issuer: Home Equity Mortgage Trust 2005-1 -- Cl. M-5, Downgraded to Ba1 from A2 -- Cl. M-6, Downgraded to B3 from A3 -- Cl. M-7, Downgraded to C from Baa1 -- Cl. M-8, Downgraded to C from Baa2 -- Cl. M-9, Downgraded to C from Ba2 -- Cl. B-1, Downgraded to C from Caa2 Issuer: Home Equity Mortgage Trust 2005-2 -- Cl. M-4, Downgraded to A2 from A1 -- Cl. M-5, Downgraded to Baa2 from A2 -- Cl. M-6, Downgraded to Ba3 from A3 -- Cl. M-7, Downgraded to Caa2 from Baa1 -- Cl. M-8, Downgraded to C from Baa2 -- Cl. M-9, Downgraded to C from Ba3 -- Cl. B-1, Downgraded to C from Caa3 Issuer: Home Equity Mortgage Trust 2006-2 -- Cl. 1A-1, Downgraded to Caa1 from Ba3 -- Cl. 1A-2, Downgraded to C from Ca Issuer: Home Equity Mortgage Trust 2006-5 -- Cl. A-1, Downgraded to Ca from Ba1 -- Cl. A-2, Downgraded to C from Ba3 -- Cl. A-3, Downgraded to C from B3 -- Cl. M-1, Downgraded to C from Caa3 HOST HOTELS: S&P Affirms Corporate Credit Rating at 'BB' -------------------------------------------------------- Standard & Poor's Ratings Services raised its issue-level rating on Host Hotels & Resorts L.P.'s senior secured notes and debentures to 'BBB-' from 'BB'. A recovery rating of '1' was assigned to these securities, indicating that lenders can expect very high recovery in the event of a payment default. The previous 'BB' issue-level rating reflected criteria different from what S&P currently uses in its recovery analysis. At the same time, S&P affirmed its other ratings on Host, including the 'BB' corporate credit rating. The rating reflects Host's aggressive financial profile and, as a real estate investment trust, its reliance on external sources of capital for growth. These factors are tempered by the company's high-quality and geographically diversified hotel portfolio of 117 owned hotels and over 60,000 rooms, high barriers to entry for new competitors because of its hotels' locations, its strong brand relationships, and its experienced management team. In addition, the current rating incorporates the expectation that credit measures at Host are going to deteriorate over the intermediate term, mostly due to expected EBITDA declines of up to 10% in 2008 and possibly more in 2009. S&P expects that credit measures will begin to weaken from current levels: lease- adjusted debt to EBITDA of 4.5x, EBITDA interest coverage of 3.6x, and debt to total capital of 55% at September 2008. S&P has further lowered its outlook for the U.S. lodging industry in recent weeks, reflecting a harder hit to demand than it previously expected. With business and leisure travel expected to slow at the same time given prospects for a long and moderate U.S. recession, S&P now believes U.S. revenue per available room will be flat or decline in the low-single-digit percentage area in 2008, and will decline by 5% or more in 2009. Host's credit measures can move within a wide range over time given the cyclical nature of lodging and the company's operating leverage, and will be influenced by borrowing to complete a more aggressive financial policy of providing returns to shareholders. This includes the company's $500 million share repurchase authorization, and Host expects to declare another special dividend in the December 2008 quarter, following its declaration of a special dividend in December 2007 that totaled approximately $100 million. These are in addition to the company's regular dividend, which is currently declared at a rate in excess of free cash flow. Host expects that its comparable RevPAR will decline by 3% to 5% and its adjusted operating profit margin to decrease 100 to 125 basis points in the December 2008 quarter. In 2009, Host has preliminarily indicated that, in the upscale segment, it expects occupancy declines of 2% to 3% and RevPAR declines of 4% to 6% due to lower overall demand from weaker group bookings and continued weakness in corporate and premium rate segments. HUNTSMAN CORP: Credit Suisse & Deutsche Won't Fund Merger --------------------------------------------------------- Hexion Specialty Chemicals, Inc., reported that it received correspondence from counsel to affiliates of Credit Suisse and Deutsche Bank stating that the banks don't believe that the solvency opinion of American Appraisal Associates and the solvency certificate of Huntsman Corporation's Chief Financial Officer meet the condition of the commitment letter. The banks said that as a result, they won't fund the proposed closing of the merger. Huntsman Corporation said it received a written opinion from American Appraisal, a leading valuation firm, which has concluded that the company to be formed from the pending merger of Hexion Specialty and Huntsman would be solvent. American Appraisal found that the combined Hexion-Huntsman company would satisfy all of the solvency tests commonly used in transactions of this nature. Huntsman's President and CEO, Peter R. Huntsman, stated, "American Appraisal is a well regarded and highly qualified valuation firm. As Vice Chancellor Lamb noted in his decision following the Delaware trial, Credit Suisse testified during the trial that they are prepared to fund their commitment 'if a compliant solvency certificate can be provided' at the closing. We plan to do so, and with an independent opinion to which no reasonable lender, acting in good faith, could object." Hexion Specialty disagreed with the banks' position and has advised them of their obligation to fulfill the financing commitment for the merger. Hexion Specialty informed Huntsman that it is working to resolve the banks' concerns and is still seeking to close the merger. Huntsman will continue to enforce its rights under the Merger Agreement and various court orders and will seek to consummate the merger promptly. About Hexion Specialty Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. -- http://www.hexionchem.com/-- is a producer of thermosetting resins, or thermosets. Thermosets are a critical ingredient in virtually all paints, coatings, glues and other adhesives produced for consumer or industrial uses. Hexion Specialty Chemicals is controlled by an affiliate of Apollo Management L.P. Hexion Specialty Chemicals Inc.'s balance sheet at June 30, 2008, showed total assets of $3.9 billion and total liabilities of $5.4 billion, resulting in a shareholders' deficit of $1.5 billion. About Huntsman Headquartered in Salt Lake City, Utah, Huntsman Corporation (NYSE: HUN) -- http://www.huntsman.com/ -- is a manufacturer of differentiated chemical products and inorganic chemical products. The company operates in four segments: Polyurethanes, Materials and Effects, Performance Products and Pigments. Its products are used in a range of applications, including those in the adhesives, aerospace, automotive, construction products, durable and non-durable consumer products, electronics, medical, packaging, paints and coatings, power generation, refining, synthetic fiber, textile chemicals and dye industries. Its Latin American operations are in Argentina, Brazil, Chile, Colombia, Guatemala, Panama and Mexico. At March 31, 2008, the company's consolidated balance sheet showed US$8.68 billion in total assets, US$6.71 billion in total liabilities, US$32.1 million in minority interests, and US$1.94 billion in total stockholders' equity. * * * As reported by the Troubled Company Reporter on Oct. 3, 2008, Standard & Poor's Ratings Services said that its ratings on Huntsman Corp. and Hexion Specialty Chemicals Inc. remain on CreditWatch with negative implications, where they were placed on July 5, 2007. The initial CreditWatch placement followed the announcement of Hexion's proposed debt-financed acquisition of Huntsman in a transaction valued at more than US$10 billion, including assumed debt. In June 2008, S&P said that its ratings on Huntsman Corp. (BB- /Watch Neg/--) remain on CreditWatch with negative implications, where they were placed on July 5, 2007. As reported in the Troubled Company Reporter on Oct. 6, 2008, Huntsman Corp. (Huntsman - Ba3 Corporate Family Rating - Rating Under Review For Downgrade) issued a press release on Sept. 29, 2008 announcing the decision of the Delaware Court of Chancery to enter judgment in favor of Huntsman denying all declarations sought by Apollo Management, L.P. and Hexion Specialty Chemicals, Inc. in their suit requesting that the Court excuse Hexion from its obligation to consummate the pending transaction. HYDROGEN LLC: Appoints Triax Capital to Sell Cleantech Power ------------------------------------------------------------ Hydrogen LLC is selling its assets and has chosen Triax Capital Advisors, LLC, a New York based boutique merchant banking firm to market the assets. Joseph E. Sarachek, the managing partner of Triax commented: "The cleantech sector is very hot right now and we are hopeful that we will be successful in this restructuring process and finding the right strategic alternative for the company." Scott Schecter, chief executive officer of HydroGen, added, "We are happy to have Triax assisting us in this process. Triax has reached out to potential partners, and we continue to have faith that they will find a suitor for the company." Headquartered in New York City, HydroGen, L.L.C. -- http://www.hydrogenllc.net/-- manufactures fuel cell systems and air-cooled phosphoric acid fuel cell technology. HydroGen Corporation owns 100% of the membership interest of the Debtor. The Debtor filed for Chapter 11 protection on Oct. 22, 2008, (Bankr. S.D. N.Y. Case No. 08-14139) Law Offices of David C. McGrail represents the Debtor in its restructuring efforts. When it filed for protection from its creditors, it has estimated assets of $1 million to $10 million and estimated debts of $1 million to $10 million. The Debtor did not file a list of 20 largest unsecured creditors. INFOSONICS CORP: NASDAQ Extends Compliance Period Until April 13 ---------------------------------------------------------------- InfoSonics Corporation received a NASDAQ letter indicating that NASDAQ has suspended, for a three month period, the enforcement of the rule requiring a minimum bid price of publicly held shares. The company will now have until April 13, 2009, to achieve compliance with the rule. On July 10, 2008, the company received a letter from the Listing Qualifications Department of The NASDAQ Stock Market indicating that for the last 30 consecutive trading days, the company's publicly held shares had closed below the minimum $1.00 per share requirement under Marketplace Rule 4450(a)(5). On Oct. 16, 2008, NASDAQ implemented a temporary suspension of enforcement of Marketplace Rule 4450(a)(5) until Jan. 16, 2009, due to the volatility of current market conditions. As a result of the temporary suspension, NASDAQ informed the company that its deadline for compliance with Marketplace Rule 4450(a)(5) has been extended from Jan. 6, 2009, to April 13, 2009. During this interim period, the company's common stock is expected to continue to trade on The NASDAQ Global Market. If compliance with Marketplace Rule4450(a)(5) cannot be demonstrated by April 13, 2009, the staff of The NASDAQ Stock Market Listing Qualifications department will deliver a written notification to the company that its securities will be delisted from The NASDAQ Global Market. If the company receives a delisting notice, the company may appeal the Staff's determination to a Listing Qualifications Panel. Alternatively, the company may apply to transfer its securities to The NASDAQ Capital Market. About InfoSonics Corporation Headquartered in San Diego, California, InfoSonics Corporation (NASDAQ:IFON) -- http://www.infosonics.com/-- is a distributor and provider of wireless handsets and accessories in Latin America and the United States. The company distributes products of several original equipment manufacturers, including Samsung, LG, Novatel and others. InfoSonics is also involved in the designing, sourcing and distributing of a line of products under its own verykool brand, which includes entry level, mid-tier and high-end products. From its facility in Miami, Florida, where the company has its Latin America sales and executive offices, InfoSonics operates a warehouse and distribution center. This distribution center services customers in Latin America and the United States. The company has wholly owned subsidiaries in Latin America, which conduct some of its business activities in their respective regions of Latin America. INGEARS CORP: Court Converts Case to Chapter 7 Liquidation ----------------------------------------------------------- The Hon. Pamela Hollis of the United States Bankruptcy Court for the Northern District of Illinois converted InGear Corp.'s Chapter 11 reorganization case to a Chapter 7 liquidation proceeding, Bloomberg News reports. In June, the U.S. Trustee for Region 11, Cameron Gulden, asked the Court to convert the case arguing that the Debtor is unlikely to survive, and creditors could recover on their claims under Chapter 7, the report says. Headquartered in Buffalo, Grove, InGear Corp. -- http://www.ingearsports.com-- manufactures leather goods, toys and sporting goods. The company filed for Chapter 11 protection on Feb. 7, 2008 (Bankr. N.D. Il. Case No. 08-02824). Daniel A. Zazove, Esq., at Perkins Coie, L.L.P., represents the Debtor in its restructuring effort. When the Debtor filed for protection from its creditors, it listed assets and debts between $10 Million to $50 Million each. INPHONIC INC: Obtains Confirmation of Liquidating Plan ------------------------------------------------------ Bill Rochelle of Bloomberg News reports that SN Liquidation, Inc., formerly known as InPhonic Inc., and its debtor-affiliates are set to emerge from Chapter 11 following the confirmation of the U.S. Bankruptcy Court for the District of Delaware on Oct. 22, 2008, of their Second Amended Joint Plan of Liquidation. According to Troubled Company Reporter on Sept. 23, 2008, the lead plaintiff in a class-action lawsuit on behalf of shareholders filed an objection with the Court to the liquidating plan. The plaintiff, according to the report, says the plan is defective by not allowing the suit to go forward while collecting a judgment only from proceeds of directors and officers' liability insurance. The Internal Revenue Service also objected on the grounds that its priority tax claim isn't paid in cash on confirmation, according to the report. Instead, the tax claim is paid over time, presenting the possibility of eventual non-payment, the IRS said, according to the report. The Debtors and the Official Committee of Unsecured Creditors filed the Plan on Aug. 11, 2008. The Court held a Disclosure Statement hearing on June 13. The Court later set a status conference regarding the Disclosure Statement on July 15. It approved the Disclosure Statement for distribution to interested parties on Aug. 12. The Plan contemplates the liquidation of the Debtors' assets and the resolution of the outstanding claims against and interests in the Debtors. Prior to the Nov. 8, 2007 bankruptcy filing, the Debtors reached an agreement, subject to higher and better offers, to sell substantially all of their assets to Adeptio INPC Funding LLC, the parent corporation of Simplexity, Inc. The Committee objected to the sale. The Committee, the Debtors, and Adeptio reached a compromise whereby Adeptio agreed to make certain payments in connection with the Debtors' bankruptcy cases and pursuant to a plan of reorganization. After a hearing on Dec. 13, 2007, the Court entered an order approving the sale. Mr. Rochelle says the buyer of the Debtors' assets is an affiliate of secured creditor Versa Capital Management. The Plan provides for the distribution of the bankruptcy estates' interest in proceeds from The sale and the creation of a litigation trust that will administer remaining property of the Debtors, which includes causes of action. Under the Plan, each holder of an Allowed General Unsecured Claim -- including rebate claims -- will receive its pro rata share of all Cash, if any, available for distribution by the Litigation Trust up to the full amount of the Allowed General Unsecured Claim, after satisfaction in full of all expenses, unpaid Allowed Secured Claims, including the Adeptio Loan, Allowed Administrative Claims, Allowed Priority Tax Claims, and Allowed Priority Non-Tax Claims. Allowed General Unsecured Claims are estimated to total $350 million, Mr. Rochelle notes. All Cash necessary for the Debtors or the Litigation Trustee to make payments will be obtained from these sources: (a) the Debtors' or SN Liquidation's Cash on hand (which is little or none); (b) Cash received upon liquidation of the Debtors' assets excluded from the sale, including proceeds of all the Debtors' Causes of Action against directors and officers or otherwise; (c) Adeptio's funding obligations pursuant to the sale. The Term Sheet provides that Adeptio will provide a $500,000 secured loan to fund the investigation of Causes of Action and to commence and prosecute litigation if appropriate through the Litigation Trust. The value of the Debtors' Causes of Action is uncertain, and the Litigation Trust needs to further investigate those claims. Mr. Rochelle says Versa was to provide as much as $500,000 for payment of priority claims and $1.1 million for professional fees, while putting $200,000 into a litigation trust and giving the trust a $500,000 loan. Intercompany Claims and Equity Interests are being extinguished and will not receive any distribution. About InPhonic Inc. Headquartered in Washington, DC, InPhonic Inc. (NASDAQ:INPC)-- http://www.inphonic.com/-- provides internet and wireless services. The company through its wholly owned subsidiary, CAIS Acquisition II, market broadband and VOIP services. The company maintained operations centers in Largo, Maryland; Reston, Virginia; and Great Falls, Virginia. As reported in Troubled Company Reporter on Feb. 12, 2008, the Court authorized the Debtors to change their name and the caption of the bankruptcy case to SN Liquidation, Inc. The company and its debtor-affiliates filed for Chapter 11 protection on Nov. 8, 2007 (Bankr. D. Del. Case Nos. 07-11666 to 07-11673). Thomas R. Califano, Esq., and Jeremy R. Johnson, Esq., at DLA Piper, LLC in New York, and Neil Glassman, Esq., Eric M. Sutty, Esq., and Mary E. Augustine, Esq., at Bayard Firm P.A., Wilmington, Delaware, represent the Debtors. The Debtors selected BMC Group Inc. as their claims, noticing and balloting agent. The United States Trustee for Region 3 appointed five creditors to serve on an Official Committee of Unsecured Creditors in the Debtors' cases. Kurt F. Gwynne, Esq., and Robert P. Simons, Esq., at Reed Smith LLP, represent the Committee. Anup Sathy, P.C., Esq., and David A. Agay, Esq., at Kirkland & Ellis in Chicago, Illinois, represent Adeptio and Simplexity, the buyer of the Debtors' assets. When the Debtors filed from protection from their creditors, they listed total assets of $120,916,991 and total debts of $179,402,834. INTEREP NATIONAL: Court Converts Case to Chapter 7 Liquidation -------------------------------------------------------------- The Hon. Robert D. Drain of the United States Bankruptcy Court for the Southern District of New York converted the Chapter 11 case of Interep National Radio Sales Inc. and its debtor-affiliates to a Chapter 7 liquidation proceeding, Bloomberg News reports. According to the Troubled Company Reporter on Oct. 27, 2008, Erica M. Ryland, Esq., at Jones Day, listed two grounds that warrant the conversion: i) an event of default under the Debtors' postpetition financing facility will occur Oct. 24, 2008, wherein the Debtors may lose all access to liquidity; and ii) certain of the Debtors' key leases will be deemed rejected by operation of law under Section 365(d) of the Bankruptcy Code on Monday, Oct. 27, 2008. The conversion of the Debtors' cases is in the best interest of their estates and their creditors, Ms. Ryland said. About Interep National Headquartered in New York, Interep National Radio Sales, Inc. -- http://www.interep.com/-- are independent sales and marketing companies that specialize in radio, the Internet, television and complementary media. With 16 offices across the U.S., they serve radio and television station clients and advertisers in all 50 states and beyond. The company and 14 of its affiliates filed for Chapter 11 protection on March 30, 2008 (Bankr. S.D.N.Y. Lead Case No.08-11079). Erica M. Ryland, Esq., at Jones Day, represents the Debtors in their restructuring efforts. No Official Committee has been appointed in the cases to date. The Debtors selected Kurztman Carson Consultants LLC as claims, noticing and balloting agent. When the Debtor filed for protection from their creditors, it listed between $50 million and $100 million in asset and between $100 million and $500 million in debts. IRWIN HOME: Moody's Lowers Ratings on 23 Certificate Transactions ----------------------------------------------------------------- Moody's Investors Service has downgraded 23 certificates from transactions issued by Irwin Home Equity Loan Trust. The transactions are backed by second lien loans. The certificates were downgraded because the bonds' credit enhancement levels, including excess spread and subordination were low compared to the current projected loss numbers at the previous rating levels. The actions take into account the continued and worsening performance of transactions backed by closed-end-second and home equity line of credit collateral. Substantial pool losses of over the last few months have eroded credit enhancement available to the mezzanine and senior certificates. Despite the large amount of write-offs due to losses, delinquency pipelines have remained high as borrowers continue to default. Issuer: Irwin Home Equity Loan Trust 2005-1 -- Cl. M-2, Downgraded to Baa1 from A2 -- Cl. B-1, Downgraded to Ba2 from Baa1 -- Cl. B-2, Downgraded to B2 from Baa2 -- Cl. B-3, Downgraded to Caa3 from Baa3 Issuer: Irwin Whole Loan Home Equity Trust 2005-A -- Cl. M-2, Downgraded to A1 from Aa1 -- Cl. M-3, Downgraded to A2 from Aa2 -- Cl. M-5, Downgraded to Baa3 from Baa2 -- Cl. M-6, Downgraded to Ba1 from Baa3 -- Cl. M-7, Downgraded to Caa3 from Ba2 Issuer: Irwin Whole Loan Home Equity Trust 2005-B -- Cl. 1M-2, Downgraded to A3 from A2 -- Cl. 1M-3, Downgraded to B1 from Baa2 -- Cl. 1M-4, Downgraded to B3 from Baa3 -- Cl. 2M-2, Downgraded to Baa1 from A2 -- Cl. 2M-3, Downgraded to Ba3 from Baa2 -- Cl. 2M-4, Downgraded to B3 from Baa3 -- Cl. 1B-1, Downgraded to Caa1 from Ba1 -- Cl. 1B-2, Downgraded to Caa2 from Ba2 -- Cl. 2B-1, Downgraded to Caa1 from Ba2 Issuer: Irwin Whole Loan Home Equity Trust 2005-C -- Cl. 2M-3, Downgraded to B1 from Baa2 -- Cl. 2M-4, Downgraded to B3 from Baa3 -- Cl. 1B-1, Downgraded to Ba3 from Ba1 -- Cl. 1B-2, Downgraded to Caa1 from Ba2 -- Cl. 2B-1, Downgraded to Caa3 from Ba1 JC REED: Says Chapter 11 Filing Not Due to Founder's Death ---------------------------------------------------------- E. Thomas Wood at Nashvillepost.com reports that J.C. Reed & Co. Inc. has filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Middle District of Tennessee. According to Nashvillepost.com, J.C. Reed filed its bankruptcy four months after its founder, John C. Reed, died of cancer at the age of 45. Mr. Reed's death in June wasn't the reason for filing, Nashvillepost.com relates, citing the company's lawyer -- Bill Norton, Esq., at Boult, Cummings, Conners & Berry. Mr. Norton said that J.C. Reed's two main operating units -- investment company J.C. Reed Advisory Group and mortgage lender J.C. Reed Mortgage Co. -? need funding, but the parent company J.C. Reed is "running out of money," Nashvillepost.com says. Citing Mr. Norton, Nashvillepost.com relates that J.C. Reed will sell "the proprietary assets used to manage investments and operate the mortgage lending subsidiary. Apparently, the software and programs to operate those companies are unique and have value." Franklin, Tennessee-based J.C. Reed & Co., Inc., is a mortgage banker, and a parent company of a group of financial businesses based in Cool Springs. The company filed for Chapter 11 protection on Oct. 22, 2008 (Bankr. M. D. Tenn. Case No. 08- 09771). William L. Norton, III, Esq., at Boult Cummings Conners Berry, PLC, represents the company in its restructuring effort. The company listed assets of $1,000,000 to $10,000,000 and debts of $100,000 to $500,000. JEFFERSON COUNTY: To Make Payment on General Obligation Bonds ------------------------------------------------------------- Martin Z. Braun of Bloomberg News reports that Jefferson County, Alabama, will pay JPMorgan Chase & Co. and BayernLB at least half of the $20 million due on the week ended Nov. 1, 2008, on its general obligation bonds, officials said. The County, according to the report, faced accelerated payments on $120 million of floating-rate debt backed by the full faith and credit of the county. JPMorgan and Munich-based BayernLB, banks of last resort that agreed to purchase the debt, had the right to demand payment after investors dumped the bonds, according to the report. "Our attorneys are working with JPMorgan and the German bank to set up a structure that will allow us to make payments in increments," County commission president Bettye Fine Collins said according to the report. Mrs. Collins didn't say where the county would get the money, according to the report. About Jefferson County Jefferson County has its seat in Birmingham. It has a population of 660,000. It ended its 2006 fiscal year with a $42.6 million general fund balance, according to Standard & Poor's. The Birmingham firm of Bradley Arant Rose & White, represents Jefferson County. Porter, White & Co. in Birmingham is the county's financial adviser. A bankruptcy by Jefferson County stands to be the largest municipal bankruptcy in U.S. history. It could beat the record of $1.7 billion, set by Orange County, California in 1994. * * * As reported by the Troubled Company Reporter on Sept. 19, 2008, Standard & Poor's Ratings Services lowered its rating three notches on Jefferson County, Alabama's series 1997A, 2001A, and 2003 B-1-A through series 2003 B-1-E, as well as its series 2003 C-1 through 2003 C-10 sewer system revenue bonds to 'C' from 'CCC'. At the same time, S&P revised the CreditWatch implications on the bonds to negative from developing. As reported by the Troubled Company Reporter on June 10, 2008, Standard & Poor's Ratings Services' ratings on Jefferson County, Ala.'s series 1997A, series 2001A, series 2003 B-1-A through 2003 B-1-E, and series 2003 C-1 through 2003 C-10 sewer system revenue bonds ('CCC' underlying rating [SPUR]) remain on CreditWatch with developing implications. As reported by the TCR on July 22, 2008, Moody's Investors Service's continues to review the Caa3 rating on Jefferson County's (AL) $3.2 billion in outstanding sewer revenue warrants for possible downgrade. JEFFERSON COUNTY: To Vote on Another 30-Day Sewer-Debt Reprieve --------------------------------------------------------------- Martin Z. Braun of Bloomberg News reports that Jefferson County, Alabama, officials plan to vote in two days on approving another 30-day forbearance with banks, including JPMorgan Chase & Co., to avoid making full payments on $3.2 billion of sewer debt that has brought the county to the brink of bankruptcy. Jefferson County has its seat in Birmingham. It has a population of 660,000. It ended its 2006 fiscal year with a $42.6 million general fund balance, according to Standard & Poor's. The Birmingham firm of Bradley Arant Rose & White, represents Jefferson County. Porter, White & Co. in Birmingham is the county's financial adviser. A bankruptcy by Jefferson County stands to be the largest municipal bankruptcy in U.S. history. It could beat the record of $1.7 billion, set by Orange County, California in 1994. * * * As reported by the Troubled Company Reporter on Sept. 19, 2008, Standard & Poor's Ratings Services lowered its rating three notches on Jefferson County, Alabama's series 1997A, 2001A, and 2003 B-1-A through series 2003 B-1-E, as well as its series 2003 C-1 through 2003 C-10 sewer system revenue bonds to 'C' from 'CCC'. At the same time, S&P revised the CreditWatch implications on the bonds to negative from developing. As reported by the Troubled Company Reporter on June 10, 2008, Standard & Poor's Ratings Services' ratings on Jefferson County, Ala.'s series 1997A, series 2001A, series 2003 B-1-A through 2003 B-1-E, and series 2003 C-1 through 2003 C-10 sewer system revenue bonds ('CCC' underlying rating [SPUR]) remain on CreditWatch with developing implications. As reported by the TCR on July 22, 2008, Moody's Investors Service's continues to review the Caa3 rating on Jefferson County's (AL) $3.2 billion in outstanding sewer revenue warrants for possible downgrade. JOHN MUMEY: Case Summary & 34 Largest Unsecured Creditors --------------------------------------------------------- Debtor: John F. Mumey 11601 S. Memorial Drive Bixby, OK 74008 Bankruptcy Case No.: 08-12552 Chapter 11 Petition Date: October 27, 2008 Court: Northern District of Oklahoma (Tulsa) Judge: Terrence L. Michael Debtor's Counsel: James W. Stamper, Esq. jwstamper@aol.com 406 S. Boulder, #640 Tulsa, OK 74103-3825 Tel: (918) 587-3700 Total Assets: $2,814,880 Total Debts: $1,068,309 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/oknb08-12552.pdf JOHNSON BROADCASTING: Wants Schedules Deadline Extended to Dec. 1 ----------------------------------------------------------------- Johnson Broadcasting Inc. and Johnson Broadcasting of Dallas Inc. ask the U.S. Bankruptcy Court for the Southern District of Texas to extend the deadline by which time they must file their schedules and statement of financial affairs, to Dec. 1, 2008. The Debtors tell the Court that during the early stages of this case, they have focused their efforts on critical operational and financial issues, and as a consequence, would not be able to complete the schedules and statement of financial affairs by Oct. 28, 2008, the current deadline. Based in Houston, Texas, Johnson Broadcasting Inc. and Johnson Broadcasting of Dallas Inc. own and operate television stations in Texas. Johnson Broadcasting Inc. and Johnson Broadcasting of Dallas Inc. filed separate petitions for Chapter 11 relief on Oct. 13, 2008 (Bankr. S.D. Texas Case No. 08-36583 and 08-36585, respectively). John James Sparacino, Esq., and Timothy Alvin Davidson, II, Esq., at Andrews and Kurth, represent the Debtors as counsel. When Johnson Broadcasting Inc. filed for protection from its creditors, it listed assets and debts of between $10 million and $50 million each. JPMORGAN CHASE: S&P Lowers Ratings on Seven Classes of Certificate ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on seven classes of commercial mortgage pass-through certificates from JPMorgan Chase Commercial Mortgage Securities Trust 2007-CIBC18. Concurrently, S&P affirmed its ratings on the remaining 14 classes from this transaction. The lowered ratings reflect S&P's credit concerns with four of the 21 loans in the pool that have reported debt service coverage below 1.0x and two loans (0.32% of the mortgage pool balance) that will have projected DSCs below 0.9x when their initial interest- only periods end. In addition, the downgrades reflect anticipated credit support erosion upon the eventual resolution of two assets with the special servicer, Centerline Servicing Inc. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. There are two loans totaling $12.9 million (0.33%) with the special servicer; details of these loans are: -- The Wickes Furniture loan ($7.6 million; 0.20%) is secured by a 39,200-sq.-ft. single-tenant retail property built in 2006 in Victorville, California, 80 miles northeast of Los Angles. The loan was transferred to the special servicer in May 2008 upon notification that the single tenant, Wickes Furniture Co., filed for bankruptcy in February 2008. The related lease was terminated in April 2008. Based on the most recent appraisal, an appraisal reduction amount totaling $2.2 million is in effect. Standard & Poor's expects a moderate loss upon the resolution of this asset. -- The QXL loan ($5.3 million; 0.14%) is secured by a 70,000- sq.-ft. industrial flex building in North Huntington, Pennsylvania, 20 miles east of Pittsburgh; the property was built in 1964 and renovated in 2005. The loan was transferred to the special servicer in February 2008 due to payment default. The single tenant, QXL Metals, was unable to make the required lease payments due under its lease agreement. Based on the most recent appraisal, an ARA totaling $3.8 million is in effect, and Standard & Poor's expects a significant loss upon the resolution of this asset. There are 21 loans in the pool totaling $426.4 million (11.0%) that have reported low DSC. The loans are secured primarily by a variety of lodging, retail, office, industrial, and multifamily properties. The loans have experienced an average decline in DSC of 36.1% since issuance. Standard & Poor's has credit concerns with four of these loans. The four loans are currently experiencing decreasing occupancies and increasing expenses, and certain loans have relatively high amounts of debt per sq. ft./unit/room compared with similar properties in the market. The remaining 17 loans are secured by properties that have either low debt exposure per sq. ft., have experienced improved occupancy, or have reserves in place. As of the Sept. 30, 2008, remittance report, the collateral pool consisted of 226 loans with an aggregate balance of $3.88 million, compared with the same number of loans and an aggregate balance of $3.90 billion at issuance. The master servicer, Capmark Finance Inc., reported financial information for 98% of the pool. Ninety- five percent of the servicer-provided information was full-year 2007 data, 2.1% was interim-2007 data, and 0.28% was intermin-2008 data. Based on this data, Standard & Poor's calculated a weighted average DSC of 1.46x for the pool, up from 1.40x at issuance. In addition to the two loans with the special servicer, there are two loans totaling $16 million that are 30-plus-days delinquent. To date, the trust has not experienced any losses. Capmark reported a watchlist of 36 loans with an aggregate outstanding balance of $731.9 million (18.8%). Three of the top 10 loans appear on the watchlist; details of these loans are: -- The largest loan on the watchlist and the largest loan in the pool, the 131 South Dearborn loan ($236.0 million; 6.0%), is secured by a 37-story, 1.5 million-sq.-ft., class A office building built in 2003 in Chicago's Central Loop District. The loan appears on the watchlist due to a low-DSC reporting error. The low DSC was reported improperly by the master servicer of the JPMC 2006-LDP9 deal but has since been corrected. As of December 2007, the DSC was 1.37x. -- The fourth-largest loan in the pool is the Marriott - Hilton Head loan ($122.2 million; 3.1%). The loan is secured by a 512-room hotel built in 1976 in Hilton Head, North Carolina. The loan appears on the watchlist because the property reported a year-end 2007 DSC of 0.95x. The subject property underwent a $15.3 million ($29,000 per key) property improvement plan from November 2006 to May 2007 and is in the process of stabilization. -- The fifth-largest loan in the pool, the Hilton - Anchorage loan ($93.3 million; 2.4%), is secured by a 606-room hotel built in 1976 in Anchorage, Alaska. The loan appears on the watchlist because the property reported a year-end 2007 DSC of 0.75x. The subject underwent an $8.0 million PIP for one of its two towers from October 2007 through May 2008. The borrower is also planning a PIP for the second tower from January 2009 to June 2009. S&P expects the subject property to stabilize once the PIP is completed. Additionally, the borrower provided a $3.5 million full-recourse guarantee to cover any debt service shortfalls. The top 10 loans have an aggregate outstanding trust balance of $1.2 billion (31.1%) and a weighted average DSC of 1.45x, down slightly from 1.52x at issuance. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 exposures, all of which were characterized as "good." The second-largest loan in the pool, the Centro Heritage Portfolio IV loan ($226.1 million; 5.8%), continues to have credit characteristics consistent with those of investment-grade rated obligations. The loan is secured by 16 cross-collateralized and cross-defaulted anchored retail shopping centers totaling 2.7 million sq. ft. The reported DSC was 2.08x as of year-end 2007, and occupancy was 95% as of December 2007, compared with a DSC of 2.15x and 95% occupancy at issuance. Standard & Poor's adjusted net cash flow for this loan is comparable to its level at issuance. Standard & Poor's identified 11 properties in areas affected by Hurricane Ike. The master servicer notified us that six properties (2.5% of the pool) sustained damage of greater than $25,000. All six properties have windstorm insurance, and none of them have flood insurance. The master servicer could not confirm whether the remaining five properties (0.5% of the pool) were damaged, but three of the five have both wind and flood insurance, and the remaining two have just wind insurance. S&P will continue to evaluate these loans and review information as it becomes available. Standard & Poor's stressed the loans on the watchlist, along with other loans with credit issues, as part of its pool analysis. The resultant credit enhancement levels support the lowered and affirmed ratings. Ratings Lowered JPMorgan Chase Commercial Mortgage Securities Trust 2007-CIBC18 Commercial mortgage pass-through certificates Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ H BB+ BBB- 2.76% J BB BB+ 2.51% K BB- BB 2.14% L B+ BB- 1.76% M B B+ 1.51% N B- B 1.38% P CCC+ B- 1.01% Ratings Affirmed JPMorgan Chase Commercial Mortgage Securities Trust 2007-CIBC18 Commercial mortgage pass-through certificates Class Rating Credit enhancement ----- ------ ------------------ A-1 AAA 30.15% A-3 AAA 30.15% A-4 AAA 30.15% A-1a AAA 30.15% A-M AAA 20.10% A-MFL AAA 20.10% A-J AAA 11.68% B AA 9.80% C AA- 9.05% D A 7.54% E A- 6.53% F BBB+ 5.03% G BBB 3.89% X AAA N/A N/A -- Not applicable. KIDSPEACE INC: Moody's Junks Debt Rating; Remains Under Watchlist ----------------------------------------------------------------- Moody's Investors Service has downgraded KidsPeace Inc.'s debt rating to Caa2 from B3; the rating remains on Watchlist for further possible downgrade. The rating applies to $60.2 million of Series 1998 and Series 1999 Bonds issued by the Lehigh County General Purpose Authority. The rating downgrade is primarily attributable to the continued decline in liquidity and Moody's belief that the likelihood of default has increased since its last review. Unrestricted cash declined to $5.7 million through the end of Sept. 30, 2008 from $9.4 million at July 31, 2008. Additionally, a $10.0 million line of credit ($2.0 million has been drawn) provided by Commerce Bank has been frozen. KidsPeace is currently in the process of securing an asset based line of credit for $10.0 million to provide for working capital in the interim period. If KidsPeace fails to secure this financing, we believe the likelihood of missing the Dec. 1, 2008, bond payment increases ($3.2 million is already in the sinking fund). Moody's also notes that KidsPeace is in the process of undergoing a restructuring. The Watchlist action reflects the uncertainty surrounding the ability to secure a line of credit and its belief that KidsPeace will violate a 1.0 times rate covenant, triggering an event of default, which could potentially lead to an acceleration of the 1998 and 1999 bonds. If an acceleration of the outstanding bonds occurs, we believe that the likelihood of filing for bankruptcy protection increases, warranting a lower rating based on estimated recovery value of the bonds. Rated Debt (debt outstanding as of December 31, 2007) -- Series 1998, 1999 ($60.2 million outstanding) rated Caa2 KIRK PIGFORD: Wants to Employ Intracoastal Realty as Broker ----------------------------------------------------------- Kirk Pigford Construction Inc. asks the U.S. Bankruptcy Court for the Eastern District of North Carolina for authority to employ Intracoastal Realty Corp. as broker. As the Debtor's broker, Intracoastal Realty Corp. will assist the Debtor in the marketing and selling of the Debtor's real property, specifically the development known as "Avalon West". Pursuant to a certain Exclusive Right to Sell Listing Agreement, the Debtor tells the Court that Intracoastal Realty will receive a commission of 5% of the total gross sales price of homes sold. Lee Crouch, a broker with Intracoastal Realty, assures the Court that he holds no interest materially adverse to the interest of the estate or of any class of creditors or equity security holders. He discloses, however, that he is a partner in KPLC, LLC, a real estate holding company, with the Debtor's owner, Kirk Pigford. He further discloses that he is the chairman of the board of directors for the holding company of Cape Fear Bank, a secured creditor of the Debtor. Based in Wrightsville Beach, N.C., Kirk Pigford Construction Inc. -- http://www.kirkpigfordconstruction.com/-- is a homebuilder. The company filed for Chapter 11 relief on Oct. 14, 2008 (Bankr. E.D. N.C. Case No. 08-07139). Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A. represents the Debtor as counsel. When the Debtor filed for protection from its creditors, it listed assets of $10 million to $50 million, and debts of $10 million to $50 million. KIRK PIGFORD: Files Emergency Motion to Use Cash Collateral ----------------------------------------------------------- Kirk Pigford Construction Inc. asks the U.S. Bankruptcy Court for the Eastern District of North Carolina for emergency authority to use Cash Collateral to fund its operations and other expenses. The Debtor tells the Court that absent the use of Cash Collateral, the company will not be able to continue in operations, causing irreparable harm to the Debtor's estate. A hearing on this emergency motion to use Cash Collateral is scheduled for Nov. 4, 2008. The Debtor believes that proceeds generated from the sale of its properties may constitute Cash Collateral of Cooperative Bank, NewBridge Bank, First South Bank, Cape Fear Bank, RBC Centura, North State Bank, Wachovia Bank, Regions Bank, Markraft Cabinets, Kitchen & Lighting Designs Inc., Floors of Wilmington, Blown Rite Insulation Inc., Hollingsworth Cabinets and Interiors, Coastal Sash and Door Inc., Ed Newsome Hardwood Floors Inc., Creative Flooring Concepts Inc., Bozart Brothers Construction Inc., Coastal Glass and Hardware, General Shale Brick, Godwin Pumps of America Inc. and Probuild East, LLC (collectively the "Creditors"). Cooperative Bank, NewBridge Bank, First South Bank, Cape Fear Bank, RBC Centura, North State Bank, Wachovia Bank, Regions Bank, and Markraft Cabinets hold deeds of trust on various properties of the Debtor. Kitchen & Lighting Designs Inc., Floors of Wilmington, Blown Rite Insulation Inc., Hollingsworth Cabinets and Interiors, Coastal Sash and Door Inc., Ed Newsome Hardwood Floors Inc., Creative Flooring Concepts Inc., Bozart Brothers Construction Inc., Coastal Glass and Hardware, and General Shale Brick have all filed claims of liens with the New Hanover County, North Carolina, Office of the Clerk of Superior Court, or the Brunswick County, North Carolina, Office of the Clerk of Superior Court. The Debtor believes Kitchen and Lighting Designs Inc. may have obtained a judgment against the Debtor, arising out of its claim of lien against the Debtor. Probuild East, LLC obtained a judgment in the New Hanover County Superior Court dated Aug. 7, 2008, against Kirk H. Pigford and wife, Luanne C. Pigford, the Debtor, and Pigford Properties, LLC. Coastal Sash & Door Inc. obtained a judgment against the Debtor. Coastal Glass and Hardware obtained two judgments against the Debtor, who asserts that these judgments have been satisfied. Adequate Protection As adequate protection for the Debtor's Use of Cash Collateral, the Debtor proposes that Creditors be granted post-petition replacement liens and security interests on the same assets, to the same extent and with the same validity and priority as existed on the petition date. About Kirk Pigford Based in Wrightsville Beach, N.C., Kirk Pigford Construction Inc. -- http://www.kirkpigfordconstruction.com/-- is a homebuilder. The company filed for Chapter 11 relief on Oct. 14, 2008 (Bankr. E.D. N.C. Case No. 08-07139). Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A. represents the Debtor as counsel. When the Debtor filed for protection from its creditors, it listed assets of $10 million to $50 million, and debts of $10 million to $50 million. LANDMARK FBO: S&P Trims Rating to 'B-' on Reduced Liquidity ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating to 'B-' from 'B', on aviation support provider Landmark FBO LLC. The outlook is negative. Landmark has about $320 million of debt outstanding. "The downgrade reflects lower-than-expected earnings and reduced liquidity," said Standard & Poor's credit analyst Roman Szuper. A weaker U.S. economy and very high fuel prices have adversely affected demand for Landmark's core fueling and related services, with near-term prospects uncertain. Those developments coincide with gradually tightening financial covenants, which results in relatively thin covenant cushions in Landmark's credit facility. In response, the company has accelerated its cost-cutting initiatives, which should stabilize results, at lower levels. The 'B-' corporate credit rating on Landmark reflects the company's very high debt leverage, very weak cash flow protection measures, the risks associated with the cyclical and competitive general aviation market, and modest earnings and cash flow. These factors outweigh Landmark's position as the third-largest provider of fixed-base operations services, enhanced by the scarcity of airport leases that provide considerable barriers to entry. In February 2008, private equity firms GTCR Golder Rauner LLC and Platform Partners LLC acquired DAE Aviation Holdings Inc.'s airport services business and Encore FBO for about $500 million, excluding fees and expenses. The acquisition was financed by a combination of debt and the sponsors' preferred stock. Although this security has several attributes of equity, Standard & Poor's Ratings Services does not grant equity credit to preferred stock issued as part of an LBO and held by a private equity owner and, thus, S&P includes it as debt. On that basis, leverage is very high, with debt to EBITDA of about 12x. Debt to capital is also very high, at approximately 100%, with goodwill and intangibles in large amounts. The company's overall financial profile is likely to remain highly leveraged over the next two years. However, S&P expects Landmark to show gradual gains in credit measures as earnings improve and as the company applies modest free cash flow to debt repayment. Houston, Texas-based Landmark operates under the Landmark Aviation brand, with revenues of approximately $475 million estimated for 2008. The company's network comprises 43 FBOs (40 locations in North America and three in Europe). The company is the sole FBO operator at about 20 of its locations, with only one competitor at a majority of other locations. Limited liquidity, little cushion under financial covenants, and the effect of a weakening economy on the company's services are key near-term concerns. S&P could lower the ratings if financial results make it likely that Landmark will breach covenants. S&P considers an outlook revision to stable less likely in the near term, but it could follow a meaningful improvement in earnings and liquidity. LEHMAN BROTHERS: Fitch Withdraws Ratings and All of Its Units ------------------------------------------------------------- Fitch Ratings is withdrawing the ratings of Lehman Brothers Holdings Inc. and all of its subsidiaries. Fitch will no longer provide analytical coverage on the entities as: Lehman Brothers Holdings Inc. -- Long-term Issuer Default Rating of 'D'; -- Senior unsecured debt of 'CCC/RR4'; -- Subordinated debt of 'C/RR6'; -- Preferred stock of 'C/RR6; -- Short-term IDR of 'D'; -- Short term debt of 'D'; -- Individual of 'F'; -- Support of '5'; -- Support floor of 'NF'. Lehman Brothers Inc. -- Long-term IDR of 'B'; -- Senior debt of 'B/RR1'; -- Senior subordinated of 'B-'; -- Short-term IDR of 'B'; -- Short term debt of 'B'; -- Individual from of 'D/E'; -- Support from of '5'. Lehman Brothers Bank, FSB -- Long-term IDR of 'BB'; -- Long-term deposits of 'BBB-'; -- Subordinate debt of 'BB-'; -- Short-term IDR of 'F3'; -- Short-term deposits of 'F3'; -- Individual of 'D'; -- Support Rating of '5'. Lehman Brothers Commercial Bank -- Long-term IDR of 'BB'; -- Long-term deposits of 'BBB-'; -- Short-term IDR of 'F3'; -- Short-term deposits of 'F3'; -- Individual of 'D'; -- Support of '5'. Lehman Brothers Holdings plc -- Long-term IDR of 'D'; -- Senior unsecured debt of 'CCC/RR4'; -- Subordinated debt of 'C/RR6'; -- Short-term IDR of 'D'; -- Short term debt of 'C'; -- Individual of 'F'. -- Support of '5'. Lehman Brothers International (Europe) -- Long-term IDR of 'D'; -- Short-term IDR of 'D'. Lehman Brothers Holdings Capital Trust III - VII -- Preferred stock of 'C/RR6'. Lehman Brothers UK Capital Trust LP, II and III -- Preferred stock of 'C/RR6'. Lehman Brothers E-Capital Trust I -- Preferred stock of 'C/RR6'. LINENS 'N THINGS: Picks DJM Realty To Market 371 Retail Stores -------------------------------------------------------------- Linens 'n Things Inc. will sell the remaining 371 retail store leases and 3 distribution centers. The company has selected DJM Realty, a Gordon Brothers Group Company to manage the national disposition of the remaining properties. Linens 'n Things operated 551 U.S. locations in the beginning of 2008. On May 2, 2008, Linens 'n Things filed to reorganize under Chapter 11 and since then DJM Realty has been disposing of the retailer's real estate. "Linens 'n Things have built a portfolio in markets that are very difficult to enter, which creates a real opportunity to retailers," Michael Gries, chief executive officer of Linens 'n Things, said. The 371 leases that are available for assignment in this bankruptcy sale are in these states: AL, AR, AZ, CA, CO, CT, DC, DE, FL, GA, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MI, MN, MO, MS, MT, NC, NE, NH, NJ, NM, NV, NY, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV. "The Linens 'n Things portfolio include some of the top retail real estate locations in the Northeast including the 1-95 corridor from Long Island to Boston, the Western Coast of Florida including the panhandle, Northern and Southern California, several markets throughout Chicago and prime Southeast United States locations," Andy Graiser, co-president of DJM Realty, heading the Linens 'n Things project, said. In addition to disposing of the retail locations, DJM Realty is marketing 3 Linens 'n Things distribution centers in New Jersey, North Carolina and Kentucky totaling 1.2 million square feet. The distribution center in Greensboro, North Carolina is available for sale. The property consists of a 228,000 SF building with a 50,000 SF mezzanine on 24.2 (+/-) acres. "The Greensboro warehouse is well located, in close proximity to the airport and right off of the Interstate," Mr. Graiser said. As with all Chapter 11 projects, the process moves fast and we are expecting an auction before Dec. 15, 2008. Linens 'n Things property details will be available shortly at http://www.djmrealty.com. For more information you can contact James Avallone at Javallone@djmrealty.com or 631-927-0024. DJM Realty has worked with over 230 retail companies to dispose of their surplus or under-performing real estate. DJM Realty finds ways to consolidate and reconfigure real estate to achieve the highest possible value. 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) LIZ CLAIBORNE: Earnings Revision Cues S&P's Negative CreditWatch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed it ratings on Liz Claiborne Inc., including the 'BB+' corporate credit rating, on CreditWatch with negative implications. The New York City-based apparel company had about $898 million of debt as of July 5, 2008. The CreditWatch placement follows the company's pre-announcement and downward earnings revision for the nine months ended September 2008, and for the full-year fiscal 2008 ending December 2008. The earnings revisions are due to the continued weak economic outlook and challenging holiday season in the retail sector, and lower- than-expected comparable store sales in its owned retail segment. "Standard & Poor's will monitor developments and meet with management shortly to review the company's ongoing operating strategies and financial policy," noted Standard & Poor's credit analyst Susan H. Ding. "Our resolution of the CreditWatch listing will focus on the company's ability to maintain its credit metrics consistent with our expectations, and its operating business trends and financial metrics," she continued. MASTR SECOND: Poor Collateral Performance Cues Moody's Ratings Cut ------------------------------------------------------------------ Moody's Investors Service has downgraded 9 certificates from transactions issued by MASTR Second Lien Trust. The transactions are backed by second lien loans. The certificates were downgraded because the bonds' credit enhancement levels, including excess spread and subordination were low compared to the current projected loss numbers at the previous rating levels. The actions take into account the continued and worsening performance of transactions backed by closed-end-second collateral. Substantial pool losses of over the last few months have eroded credit enhancement available to the mezzanine and senior certificates. Despite the large amount of write-offs due to losses, delinquency pipelines have remained high as borrowers continue to default. Issuer: MASTR Second Lien Trust 2005-1 -- Cl. A, Downgraded to Baa1 from Aaa -- Cl. M-1, Downgraded to Caa3 from Aa1 -- Cl. M-2, Downgraded to C from Ba2 -- Cl. M-3, Downgraded to C from B3 -- Cl. M-4, Downgraded to C from Caa3 -- Cl. M-5, Downgraded to C from Ca -- Cl. M-7, Downgraded to C from Ca Issuer: MASTR Second Lien Trust 2006-1 -- Cl. A, Downgraded to Ca from A2 -- Cl. M-1, Downgraded to C from Caa1 METALDYNE CORP: Amendment Negotiations Cue Moody's Ratings Cut -------------------------------------------------------------- Moody's Investors Service lowered the ratings of Metaldyne Corporation - Corporate Family and Probability of Default, to Caa3 from Caa1; senior notes, to Caa3 from Caa1; and the senior subordinated notes to Ca from Caa3. Moody's also lowered the ratings of Metaldyne Company LLC's senior secured term loan facility and senior secured synthetic letter of credit facility to Caa2 from B3, and senior secured revolving credit facility to B1 from Ba3. The ratings remain under review for downgrade. The downgrade reflects Metaldyne's website posting of October 23, 2008 that it has been in the process of negotiating various amendments to the credit agreements of certain of its subsidiaries. In the announcement, the company noted that it is in discussions with Asahi Tec Corporation (the company's indirect parent), RHJ International, SA/NV (Asahi Tec's largest shareholder), its customers, as well as holders of the company's 10% senior notes due 2013 and its 11% senior subordinated noted due 2012. It is Moody's belief that these discussions are progressing as Metaldyne previously announced an additional $10 million capital contribution from Asahi Tec made on October 15, 2008, and the cancellation of a $31 million senior subordinated due from Metaldyne to Chrysler LLC on October 13, 2008. Any financial restructuring would likely result in an improved capital structure. However, Moody's also believes that in light of the current automotive supplier industry conditions and prospects, the resolution of these negotiations will result in less than full value to one or more of the junior classes of debt. Also incorporated in the company's discussions is a potential payment default under the ABL revolving credit facility which disputed by the company and, as part of a letter agreement, is under a standstill arrangement until the earlier of an amendment to the ABL revolving credit or October 28th, 2008. For the twelve months ending June 29, 2008 Metaldyne's EBIT/interest coverage was approximately 0.2x and free cash flow was approximately negative $70 million. As per the letter agreement noted above, Metaldyne currently does not have access to its ABL revolving credit facility. Moody's review will focus on and assess the degree to which there is any compromise of the outstanding debt of Metaldyne as information becomes available. In addition, the review will consider the degree to which Metaldyne's new capital structure will be suitable to the company's market position, operating structure, industry conditions, and general economic conditions. These considerations also include the company's high customer concentration with Chrysler LLC, the severe downturn in North American automotive markets and weaker demand in Europe. These pressures are expected to continue into 2009. Ratings lowered and under review: Metaldyne Corporation: -- Corporate Family Rating, to Caa3 from Caa1; -- Probability of Default Rating, to Caa3 from Caa1; -- $142 million (remaining amount) of 10% guaranteed senior unsecured notes due November 2013, to Caa3 (LGD4, 53%) from Caa1 (LGD4, 50%); -- $250 million of 11% guaranteed senior subordinated notes due June 2012, to Ca (LGD5, 88%) from Caa3 (LGD5, 87%) Metaldyne Company LLC: -- $150 million guaranteed senior secured asset based revolving credit facility, to B1 (LGD2, 12%) from Ba3 (LGD2, 18%); -- $408 million (remaining amount) guaranteed senior secured term loan, to Caa2 (LGD3, 36%) from B3 (LGD3, 34%); -- $60 million Synthetic L/C Facility, to Caa2 (LGD3, 36%) from B3 (LGD3, 34%); The last rating action was on February 20, 2008 when the ratings were lowered. Metaldyne Corporation, headquartered in Plymouth, Michigan, is a leading global designer and supplier of metal-based components, assemblies and modules for transportation related powertrain and chassis applications including engine, transmission/transfer case, wheel-end and suspension, axle and driveline, and noise and vibration control products to the motor vehicle industry. Metaldyne LLC is a wholly-owned operating company. Metaldyne was purchased by Asahi Tec Corp in January 2007. While Metaldyne is a restricted subsidiary of Asahi Tec, Metaldyne's Chairman and CEO also serves as co-CEO of Asahi Tec. METROMEDIA STEAKHOUSE: Interim Approval to Borrow Up $1MM Given --------------------------------------------------------------- Steven Church of Bloomberg News reports that the U.S. Bankruptcy Court for the District of Delaware gave Metromedia Steakhouses Company, L.P., and its debtor-affiliates interim approval to borrow $1 million from indirect parent Metromedia Co. The Debtors told the Court that they must reorganize their Ponderosa and Bonanza restaurant chains within 180 days, or lose the financing needed to pay bankruptcy costs, according to the report. The Debtors, according to the report, will return in November to ask for permission to borrow as much as $2.4 million. Metromedia has been subsidizing the Debtors for several months, company Chief Financial Officer Tamara Jones said according to the report. The Debtors expects to file a reorganization plan within 60 days, according to the report. About Metromedia Steakhouses Headquartered in Plano, Texas, Metromedia Steakhouses Company, L.P. owns, operates and franchises family-focused restaurants operating under the Ponderosa Steakhouse and Bonanza Steakhouse brands directly and through its affiliates. The Debtor and its bankrupt affiliates filed for Chapter 11 bankruptcy protection on Oct. 22, 2008 (Bankr. D. Del. Lead Case No. 08-12490). Bruce Grohsgal, Esq., and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl Young & Jones, LLP, represent the Debtors in their restructuring efforts. The Lead Debtor listed in its petition between $1 million and $10 million in estimated assets and between $100 million and $500 million in estimated debts. MORGAN STANLEY: S&P Affirms Ratings on 24 Classes of Certificates ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 24 classes of commercial mortgage pass-through certificates from Morgan Stanley Capital I Trust 2007-TOP27. The affirmed ratings on the pooled certificates reflect credit enhancement levels that provide adequate support through various stress scenarios. The affirmed rating on the 'AW34' raked certificate class reflects S&P's analysis of the credit characteristics of the 330 West 34th Street loan, which is the sole source of cash flow for the certificate. As of the Oct. 14, 2008, remittance report, the trust collateral pool comprised 226 assets with an aggregate balance of $2.762 billion, compared with 226 loans with a balance of $2.773 billion at issuance. The master servicer, Wells Fargo Bank N.A., reported financial information for 95.2% of the loans in the pool; 94.6% of the servicer-reported information was year-end 2007 data. Based on this information, Standard & Poor's calculated a weighted average debt service coverage of 1.65x for the pool, up from 1.61x at issuance. All of the loans in the pool are current except for the One Exchange Place and Regent Shoppes loans, which are referenced below. To date, the trust has not experienced any losses. The top 10 loans have an aggregate outstanding balance of $797.0 million (29%) and a weighted average DSC of 1.60x, the same as at issuance. Wells Fargo provided property inspections for all of the top 10 loan exposures. All of the properties were characterized as "good." At issuance, 17 loans ($344.2 million, 13%) were categorized as having credit characteristics consistent with investment-grade rated obligations. Standard & Poor's adjusted valuations for 16 of the 17 loans were comparable with their valuations at issuance. The credit characteristics of the Fields Apartment Homes loan ($18.7 million, 1%) are no longer consistent with those of an investment-grade rated obligation. This loan is secured by a 285-unit multifamily property in Bloomington, Indiana, that was built in 1997. Occupancy at the property has dropped to 88% from 95% at issuance, and DSC has dropped 13% since issuance. Standard & Poor's adjusted value for this loan is 4% lower than the value at issuance. Two assets ($11.7 million) are with the special servicer, Centerline Servicing Inc. Details of these two specially serviced assets are: -- The One Exchange Place loan ($10.4 million total exposure) is secured by a 97,733-sq.-ft. office property in Jersey City, New Jersey. The property was built in 1920 and renovated in 1990. The loan was transferred to the special servicer in June 2008 due to payment default. The special servicer has indicated that the property is 55% occupied, down from 84% at issuance. The property lost its certificate of occupancy after illegal modifications were made to the sprinkler system in one of the tenant spaces, resulting in higher tenant rollover and the higher vacancy rate. Centerline has begun foreclosure proceedings. At this time, however, Standard & Poor's does not expect a loss upon the resolution of this asset. -- The Regent Shoppes loan ($1.8 million total exposure) is secured by a 10,850-sq.-ft. unanchored retail property in St. Cloud, Florida. The property was built in 2006. The loan was transferred to the special servicer in March 2008 due to payment default and it is 90-plus days delinquent. Performance at the property has deteriorated significantly since issuance. The most recent occupancy was 43% as of April 2008, down from 100% at issuance. Centerline received an as-is appraisal of $2.14 million in May 2008, and Centerline has begun foreclosure proceedings. At this time, Standard & Poor's expects a significant loss upon the resolution of this asset. Five loans in the pool, totaling $40.0 million (2%), have DSCs below 1.0x. These loans have an average balance of $8.0 million and have experienced a weighted average decline in DSC of 50% since issuance. The loans are secured by a variety of hotel, retail, office, and industrial properties. However, S&P doesn't consider these five loans to be credit concerns at this time due to improving property occupancy or relatively low leverage. Wells Fargo reported a watchlist of two loans ($10.4 million, 0.4%). The largest loan on the watchlist is the Rivery Town Center loan ($8.0 million, 0.3%), which is secured by a 74,266- sq.-ft. anchored retail property located in Georgetown, Texas, and built in 2005. This loan appears on the watchlist due to a drop in occupancy to 71% from 83%. However, the reported DSC was 1.13x as of June 30, 2008. Standard & Poor's identified seven collateral properties ($56.4 million, 2%) in areas affected by Hurricane Ike. Wells Fargo reported that six of the properties ($53.7 million, 2%) did not sustain significant damage, but could not confirm whether the property securing the 3334 Richmond Avenue loan ($2.7 million, 0.1%) was damaged. However, this property has both flood and windstorm insurance in place. Standard & Poor's will continue to evaluate information on the loans as it becomes available. Standard & Poor's stressed the loans on the master servicer's watchlist, along with other loans with credit issues, as part of its pool analysis. The resultant credit enhancement levels adequately support the affirmed ratings. Ratings Affirmed - Pooled Certificates Morgan Stanley Capital I Trust 2007-TOP27 Class Rating Credit enhancement ----- ------ ------------------ A-1 AAA 27.11% A-1A AAA 27.11% A-2 AAA 27.11% A-3 AAA 27.11% A-AB AAA 27.11% A-4 AAA 27.11% A-M AAA 17.07% A-MFL AAA 17.07% A-J AAA 10.04% B AA 8.03% C AA- 6.90% D A 5.77% E A- 4.89% F BBB+ 4.02% G BBB 2.89% H BBB- 2.01% J BB+ 1.88% K BB 1.76% L BB- 1.51% M B+ 1.26% N B 1.00% O B- 0.88% X AAA N/A N/A -- Not applicable. Ratings Affirmed - Non-Pooled Certificates Morgan Stanley Capital I Trust 2007-TOP27 Class Rating ----- ------ AW34 AAA MRS FIELDS: Chapter 11 Plan Effective Oct. 24 ---------------------------------------------- Mrs. Fields Famous Brands, LLC, implemented on Oct. 24, 2008 its reorganization plan approved by the U.S. Bankruptcy Court for the District of Delaware. The Court confirmed the Plan on Oct. 2. Mrs. Fields' Original Cookies, Inc., said Oct. 24 that it has emerged from Chapter 11 bankruptcy with an improved balance sheet, a good working capital position, and new ownership. "The prepackaged bankruptcy filing was the perfect means to complete the Company?s reorganization," commented Michael Ward, Interim Co-Chief Executive Officer. "Within 60 days of filing the Chapter 11 petition, we were able to significantly de-lever the Company's balance sheet, establish a credit facility to support our working capital needs, and emerge from bankruptcy fully capable of meeting and exceeding customer expectations." About Mrs. Fields' Headquartered in Salt Lake City, Utah, Mrs. Fields' Original Cookies, Inc. -- http://www.mrsfields.com/-- operates a chain of cookie and baked goods. The company and 13 of its affiliates filed for Chapter 11 protection on Aug. 24, 2008 (Bankr. D. Del. Lead Case No.08-11953). David R. Hurst, Esq., at Montgomery McCracken Walker & Rhoads LLP, represents the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Services LLC as their claims agent. When the Debtors filed for protection from their creditors, they list assets between $500,000 and $1 million, and debts between $100 million and $500 million. NASIR EBRAHIMI: Case Summary & 12 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Nasir Ebrahimi aka Nassir Ebrahimi 3131 Deep Canyon Drive Beverly Hills, CA 90210 Bankruptcy Case No.: 08-27944 Chapter 11 Petition Date: October 27, 2008 Court: Central District Of California (Los Angeles) Judge: Victoria S. Kaufman Debtor's Counsel: John J. Bingham, Jr., Esq. jbingham@dgdk.com Danning, Gill, Diamond & Kollitz, LLP 2029 Century Park East, Third Floor Los Angeles, CA 90067 Tel: (310) 277-0077 Fax: (310) 277-5735 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Maryam Seyedan special verdict $8,204,820 Greenberg Glusker Fields 1900 Avenue of the Stars 21st Floor Los Angeles, CA 90067-4590 Pacific Western Bank loan guarantee $3,703,093 444 South Flower Street 14th Floor Los Angeles, CA 90071 Wells Fargo Bank loan $523,000 National Association MAC #E2064-203 333 South Grand Avenue, #2000 Los Angeles, CA 90071 Shahram Elyaszadeh loan $150,000 Lida Lahijani loan $130,000 American Express credit card debt $111,633 Fereydoon Khodadadi loan $100,000 Bank of America credit card debt $43,021 American Express credit card debt $7,353 Discover Card credit card debt $4,306 Discover Card credit card debt $2,357 Bank of America credit card debt $1,841 NEUMANN HOMES: Court Approves Proofs of Claim Filing Deadlines -------------------------------------------------------------- Judge Eugene R. Wedoff of the United States Bankruptcy Court for the Northern District of Illinois approved the proposed deadlines for creditors to file their proofs of claim against Neumann Homes, Inc., and its debtor-affiliates Creditors holding prepetition claims against the Debtors are required to file their proofs of claim within 60 days after the Debtors mail the Bar Date Notice. For creditors whose claims resulted from the rejection of their contracts with the Debtors, they are required to file their proofs of claim by the later of the Bar Date or at a date set by the Court. The Debtors will cause to publish the Bar Date Notice in the national edition of The Chicago Tribune, The Detroit Free Press, The Milwaukee Journal Sentinel and The State Capitol Times no later than two weeks prior to the Bar Date. NEUMANN HOMES: Court OKs $12M Sale of Properties to Guaranty Bank ----------------------------------------------------------------- Judge Eugene R. Wedoff of the United States Bankruptcy Court for the Northern District of Illinois approved the proposed sale of Neumann Homes, Inc., and its debtor-affiliates' properties in four residential developments to Guaranty Bank through a credit bid. The properties are located in the Clublands of Joliet, Meadows of West Bay, NeuStoneshire and the Conservancy/Cascairo Farm Developments. They serve as collateral for the loans, which the Debtors availed from Guaranty Bank before the Petition Date. "The consideration provided by Guaranty [Bank] pursuant to the credit bid is fair and reasonable, is the highest and best offer for the developments and constitutes reasonably equivalent value and fair consideration," the Court held in its ruling. Guaranty Bank made credit bids for properties in these Developments: Clublands of Joliet $2,135,000 Meadows of West Bay $3,100,000 NeuStoneshire $6,115,000 Conservancy/Cascairo Farm in the village of Gilberts $620,000 The properties will be sold to Guaranty Bank free and clear of all junior interests. The Court-approved sale, however, will not affect any valid and enforceable interest in the properties senior to Guaranty Bank's interests. As part of the sale, the Court authorized the Debtors to assume and assign to Guaranty Bank or its designee the declaration of condominium ownership dated Jan. 18, 2006, which was executed for the NeuDearbon Station Condominium Association. The Court also permitted the Debtors to reject the remaining contracts and leases executed relating to the Residential Developments. The remaining contracts are not a source of potential value for the Debtors' estates, the Court acknowledged. The Court noted it will deal with Guaranty Bank's collateral in the NeuDearbon Station in a separate or supplemental order. About Neumann Homes Headquartered in Warrenville, Illinois, Neumann Homes Inc. -- http://www.neumannhomes.com/-- develops and builds residential real estate throughout the Midwest and West US. The company is active in the Chicago area, southeastern Wisconsin, Colorado, and Michigan. The company has built more than 11,000 homes in some 150 residential communities. The company offers formal business training to employees through classes, seminars, and computer- based training. The company filed for Chapter 11 protection on Nov. 1, 2007 (Bankr. N.D. Ill. Case No. 07-20412). George Panagakis, Esq., at Skadded, Arps, Slate, Meagher & Flom L.L.P., was selected by the Debtors to represent them in these cases. The Official Committee of Unsecured Creditors has selected Paul, Hastings, Janofsky & Walker LLP, as its counsel in these bankruptcy proceeding. When the Debtors filed for protection from its creditors, they listed assets and debts of more than $100 million. (Neumann Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000) NEUROGEN CORP: Nasdaq Suspends $1 Minimum Bid Rule until May 29 --------------------------------------------------------------- Neurogen Corporation was informed by The NASDAQ Stock Market that, pursuant to the NASDAQ's suspension of their requirements for minimum bid price and market value of publicly held shares, Neurogen's deadline to regain compliance with the NASDAQ's $1.00 minimum bid requirement has been extended from Feb. 23, 2009 to May 29, 2009. On Aug. 26, 2008, Neurogen was notified by the NASDAQ that for the preceding 30 business days Neurogen's common stock had not met the $1.00 minimum closing bid price requirement. To regain compliance, the closing bid price of Neurogen common stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days. Neither the original notification nor the extension has an immediate effect on the listing of Neurogen's common stock on the NASDAQ Global Market. Neurogen's common stock will continue to trade on the NASDAQ Global Market under the symbol NRGN. If Neurogen does not regain compliance by May 29, 2009, NASDAQ will provide written notification to Neurogen that its common stock will be delisted. At that time, the company may appeal NASDAQ's determination to delist its securities to a Listing Qualifications Panel. Alternatively, Neurogen could apply to transfer its common stock from the NASDAQ Global Market to the NASDAQ Capital Market if it satisfies all requirements, other than the minimum closing bid price requirement, for initial inclusion in that market set forth in Marketplace Rule 4310(c). If Neurogen makes such an election and its transfer application is approved, it will be eligible to regain compliance with the minimum closing bid price requirement during a second 180 calendar day compliance period. About Neurogen Corp. Neurogen Corporation (NasdaqGM: NRGN) -- http://www.neurogen.com/ -- is a drug development company focusing on small-molecule drugs to improve the lives of patients suffering from disorders with significant unmet medical need, including insomnia, anxiety, restless legs syndrome (RLS), Parkinson's disease, and pain. Neurogen conducts its development independently and, when advantageous, collaborates with world-class pharmaceutical companies to access additional resources and expertise. At Dec. 31,2007, the company's consolidated balance sheet showed $71,370,000 in total assets, $16,763,000 in total liabilities, and $54,607,000 in total stockholders' equity. * * * PricewaterhouseCoopers LLP, in Hartford, Connecticut, expressed substantial doubt about Neurogen Corporation's ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm said that the company expects to incur substantial and increasing losses for at least the next several years and will need substantial additional financing to obtain regulatory approvals, fund operating losses, and if deemed appropriate, establish manufacturing and sales and marketing capabilities. NEW CENTURY: Moody's Trims Three Certs. Ratings on 'C' from 'Caa2' ------------------------------------------------------------------ Moody's Investors Service has downgraded 3 certificates from a transaction issued by New Century Home Equity Loan Trust. The transaction is backed by second lien loans. The certificates were downgraded because the bonds' credit enhancement levels, including excess spread and subordination were low compared to the current projected loss numbers at the previous rating levels. The actions take into account the continued and worsening performance of transactions backed by closed-end-second collateral. Substantial pool losses of over the last few months have eroded credit enhancement available to the mezzanine and senior certificates. Despite the large amount of write-offs due to losses, delinquency pipelines have remained high as borrowers continue to default. Issuer: New Century Home Equity Loan Trust, Series 2006-S1 -- Cl. A-1, Downgraded to C from Caa2 -- Cl. A-2a, Downgraded to C from Caa2 -- Cl. A-2b, Downgraded to C from Caa2 NEWBURGH INVESTMENT: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Newburgh Investment Properties, LLC 426 Newburgh Rd. 27758 West Warren Westland, MI 48185 Bankruptcy Case No.: 08-66197 Type of Business: The Debtor operates a real estate company. Chapter 11 Petition Date: October 27, 2008 Court: Eastern District of Michigan (Detroit) Judge: Phillip J Shefferly Debtor's Counsel: Richard F. Fellrath, Esq. lawfell@wowway.com 4056 Middlebury Drive Troy, MI 48085 Tel: (248) 519-5064 Fax: (248) 519-5065 Total Assets: $2,800,001 Total Debts: $3,041,709 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/mieb08-66197.pdf NV TELEVISION: S&P Chips Credit Rating to 'B-'; Outlook Negative ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and issue-level ratings on Atlanta, Georgia-based NV Television LLC and its affiliates, NV Broadcasting LLC and Parkin Broadcasting LLC. The corporate credit rating was lowered to 'B-' from 'B'. The rating outlook is negative, reflecting S&P's concern about the company's thinning margin of compliance with its leverage covenant in the face of weakening TV ad spending. "The rating reflects the TV broadcaster's elevated debt leverage, narrow cash flow diversification, weak conversion of EBITDA into discretionary cash flow because of high interest expense, a thinning margin of bank covenant compliance, and TV broadcasting's mature revenue growth prospects," said Standard & Poor's credit analyst Deborah Kinzer. "The competitive positions of NV Television's predominantly major network-affiliated TV stations in several small and midsize markets, TV broadcasting's good margins, and the company's discretionary cash flow potential minimally offset these factors." NV Television is an indirect, wholly owned subsidiary of New Vision Television LLC, which is 97.3% owned by HBK Capital Management, a private equity firm, and 2.7% owned by management. The company operates 13 TV stations in nine small and midsize markets ranked from No. 22 (Portland, Ore.) to No. 192 (Bend, Ore.). Most of the company's stations are affiliated with the top four networks. Two markets contribute more than half of total broadcast cash flow, which increases the impact of regional economic volatility on ad demand and on the company's financial performance. Pro forma for the November 2007 acquisition of Montecito Broadcast Group, the company's EBITDA margin was 32.1% for the 12 months ended June 30, 2008, which is slightly better than the peer average. Pro forma EBITDA coverage of cash interest was thin, at 1.2x, but EBITDA coverage of total interest was only breakeven, at 1.0x. The company's $30 million senior unsecured holding company term loan due 2015 pays interest in kind at an annual rate of 16% for the first four years. The payment-in-kind feature allows the company to have smaller cash interest payments in the near term, but it will subject the company to sharply higher interest payments starting in 2011, and rapid accretion during the PIK period. Pro forma debt to EBITDA is very high, at 10.9x as of June 30, 2008. S&P is concerned that slowing local and national ad revenues could offset the benefits of election advertising in 2008, and that the situation will worsen in 2009, a nonelection year. Although the company has low working capital and capital spending needs, S&P expects it to generate negligible discretionary cash flow because of its high debt burden. ORBIT PETROLEUM: Amends Chapter 11 Petition, Names New Chief ------------------------------------------------------------ Orbit Petroleum, Inc. (Oklahoma) has amended its originally filing petition to clarify that only the company, and not its parent -- Orbit Petroleum, Inc. -- is petitioning for reorganization. Orbit Petroleum, Inc. (Oklahoma) is currently under a petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in Federal Court in New Mexico. Orbit Petroleum's Board of Directors has also named Mike Myers as its President, and as President of the wholly owned subsidiary, Orbit Petroleum, Inc. (Oklahoma) effective Oct. 20, 2008. Mr. Myers will immediately be directly responsible for all action related to both Orbit Petroleum, Inc. (Nevada), the parent holding company and Orbit Petroleum, Inc. (Oklahoma) the wholly owned subsidiary. This change in management follows an equity investment by a group led by Mr. Myers to acquire approximately 40% of the parent company. The Board of Directors thinks that this is a positive development for both the holding company and its wholly owned subsidiary. Mr. Myers has a great deal of oil and gas experience and has successfully worked with other companies going through reorganization. Mr. Jim Frazier will effectively be resigning as President and Chairman of the Company with the addition of Mr. Myers. Mr. Frazier will remain active with the Company for a short period of time to aid in the transition. Headquartered in Oklahoma City, Oklahoma, Orbit Petroleum, Inc. (OBPT.PK) -- http://www.orbitpetro.com-- is the owner of oil and gas properties in New Mexico and Texas. OSCIENT PHARMACEUTICALS: NASDAQ Waives Action to Delist Security ---------------------------------------------------------------- Oscient Pharmaceuticals Corporation received notification from the Listings Qualifications Department of The NASDAQ Stock Market LLC that, given the current extraordinary market conditions, NASDAQ has suspended the enforcement of the rules requiring a minimum market value of publicly held shares and a minimum $1 closing bid price, effective immediately. As a result of the suspension, all companies presently in the compliance process will remain at that same stage of the process; however, companies can regain compliance during the suspension period. NASDAQ will not take any action to delist any security for these concerns during the suspension period, which will remain in effect through Friday, Jan. 16, 2009. These rules will be reinstated on Monday, Jan. 19, 2009. On Oct. 3, 2008, Oscient disclosed that pursuant to Marketplace Rule 4310(c)(8)(B), the company had 90 calendar days, or until Jan. 2, 2009, to regain compliance with the MVPHS requirement. Oscient will now have until April 7, 2009, to regain compliance by evidencing a minimum $15 million MVPHS for 10 consecutive business days. If the company does not regain compliance with the MVPHS requirement by April 7, 2009, the company will receive written notification of delisting from NASDAQ and at that time will be entitled to request a hearing before a NASDAQ Listing Qualifications Panel to present its plan to regain compliance with the MVPHS requirement. The NASDAQ notice has no effect on the listing of the company's common stock on The NASDAQ Global Market at this time. Seeking to improve its capital structure, on Oct. 21, 2008, the company launched a proposed exchange offer with the holders of its 3.50% Convertible Senior Notes due 2011. The company has filed a registration statement with the Securities and Exchange Commission relating to the proposed exchange offer. As stated in the registration statement, the company believes the exchange offer is an important component of its plan to reduce the company's overall debt level and to re-calibrate its capital structure in order to better execute the company's business strategy. The company also believes completion of the exchange offer may enable it to evidence compliance with NASDAQ's MVPHS requirement; however, there can be no assurance that the company will be able to do so. About Oscient Pharmaceuticals Corporation Headquartered in Waltham, Massachusetts, Oscient Pharmaceuticals Corporation (NASDAQ:OSCI) -- http://www.oscient.com/-- is a commercial-stage pharmaceutical company marketing Food and Drug Administration approved products in the United States. The company markets two products: ANTARA (fenofibrate) capsules, a cardiovascular product, and FACTIVE (gemifloxacin mesylate) tablets, a fluoroquinolone antibiotic. ANTARA is approved by the FDA to treat hypercholesterolemia (high blood cholesterol) and hypertriglyceridemia in combination with a healthy diet. The company also has late-stage antibiotic candidate, Ramoplanin for the treatment of Clostridium difficile-associated disease, or CDAD. PARCS-R MASTER: S&P Assigns 'CCC+' Rating on $19MM Unit Series -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'CCC+' rating to PARCS-R Master Trust's $19 million Montaigne (fixed recovery) units series 2008-3 due 2014. The rating reflects: -- The credit support in the form of subordination; -- The underlying collateral's rating; and -- The transaction's legal structure, including the issuer's bankruptcy remoteness. PAPPAS TELECASTING: Nov. 14 Hearing on Last 10 TV Stations Set -------------------------------------------------------------- Bill Rochelle of Bloomberg News reports that the U.S. Bankruptcy Court for the District of Delaware scheduled for Nov. 14, 2008, a hearing to consider the request of E. Roger Williams -- the Chapter 11 Trustee overseeing the estates of Pappas Telecasting, Inc., and its debtor-affiliates -- for approval of auction and sale procedures for the remaining Pappas TV stations. Although no one is under contract, the Trustee, according to Mr. Rochelle, intends to hold a Dec. 11 auction for the remaining 10 stations in California, Washington, Texas, Nebraska, Iowa, and North Carolina. If the Court approves with the proposed procedures, initial bids would be due Dec. 4 and the hearing for approval of the sale would occur Dec. 16, according to the report. According to the report, the Debtors did not receive any higher offer at an Oct. 27 auction than the $4 million bid by Entravision Communications Corp. for eight of the Debtors' television stations near Reno, Nevada. The Chapter 11 Trustee, according to Troubled Company Reporter on Sept. 25, will appear at a hearing later today for the approval of the sale of the eight stations. Fortress Credit Corp., administrative agent for secured lenders owed $330 million, will be entitled to credit bid at the auction, according to the report. About Pappas Telecasting Fresno, California-based Pappas Telecasting Inc., aka KMPH, aka KMPH-TV, and aka KMPH Fox 26, -- http://www.pappastv.com/-- and its affiliates are broadcasting companies. Founded in 1971, their stations reach over 15% of all U.S. households and over 32% of Hispanic households. Pappas and 21 affiliates filed chapter 11 petition on May 10, 2008 (Bankr. D. Del. Case No. 08-10915 through 08-10936). Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP represents the Debtors in their restructuring efforts. Administar Services Group LLC is the Debtors' notice and claims agent. The Debtors listed $100 million to $500 million in assets and debts when they filed for bankruptcy. Harry J. Pappas, the CEO and chairman of Pappas Telecasting and its debtor-affiliates, was the subject of a petition for Chapter 7 liquidation filed by creditors before the U.S. Bankruptcy Court for the District of Delaware. Mr. Pappas' wife Stella was also subject of the involuntary petition. The petitioning creditors are Fortress Credit Opportunites I LP, Fortress Credit Opportunites II LP, Ableco Finance LLC and Silver Oak Capital. John H. Knight, Esq., at Richards Layton & Finger, represents the Fortress Creditors. Adam G. Landis, Esq., at Landis Rath & Cobb LLP, in Wilmington, represents Ableco and Silver Oak. According to Bloomberg, the Debtors listed assets with a book value of $460 million and debt of $537 million, including inter- corporate debt. PETTERS CO: Accomplice Pleads Guilty to Money Laundering -------------------------------------------------------- Sophia Pearson and Beth Hawkins of Bloomberg News reports that Larry Reynolds, who is linked to a more than $2 billion fraud at Petters Co. and its debtor-affiliates, pleaded guilty on Oct. 23, 2008, to charges he conspired to commit money laundering. Mr. Reynolds allegedly acted as a sales representative for a fake supplier and helped Debtors' founder Tom Petters launder about $12 billion from 2002 to September, prosecutors said during a hearing in a St. Paul, Minnesota federal court according to the report. Mr. Petters, according to the report was arrested Oct. 3 on charges of mail fraud, wire fraud and money laundering. He was ordered jailed without bail on Oct. 8, according to the report. Another bail hearing, originally scheduled for Oct. 23 in a Minneapolis federal court was postponed until Oct. 31, according to the report. Two former executives of the Debtors, Deanna Coleman and Robert Dean White, pleaded guilty earlier this month in connection with the allegations, according to the report. Ms. Coleman, vice president of operations, acknowledged she alerted the government to the scam on Sept. 8, according to the report. 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. PILGRIM'S PRIDE: S&P Trims Credit Rating on Likely Covenant Breach ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on Pittsburg, Texas-based Pilgrim's Pride Corp., including its corporate credit rating to 'CC' from 'CCC+'. In addition, S&P revised the CreditWatch implications to negative from developing. S&P originally placed the ratings on CreditWatch with negative implications on June 19, 2008, due to its concerns that in the near term, the company would face even higher commodity costs because of the damage from heavy rains and flooding in the Midwest to crops, especially the corn crop. On Sept. 25, 2008, S&P downgraded the ratings on Pilgrim's Pride and revised the CreditWatch implications to developing. These rating actions followed the company's announcement that it would not likely be in compliance with the fixed-charge ratio covenant as of its fiscal-year-end Sept. 27, 2008, due to a significant loss in the fourth fiscal quarter. As of June 30, 2008, the company had about $1.98 billion of debt. "The downgrade follows the company's announcement that it intends to exercise its 30-day grace period in making the $25.7 million interest payment due Nov. 3, 2008, on its 7.625% senior unsecured notes due May 1, 2015, and 8.375% senior subordinated notes due 2017," stated Standard & Poor's credit analyst Jayne M. Ross. If the company does not make the interest payments on Nov 3, 2008, S&P will lower the ratings on those issues to 'D'. "If Pilgrim's Pride can make the interest payments during the 30- day grace period, we would review the ratings on those issues for an upgrade," she continued. Standard & Poor's will continue to monitor developments and take appropriate rating actions as the situation necessitates. PRIEST LAKE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Priest Lake Apartments, LLC 2570 Murfreesboro Road Nashville, TN 37217 Bankruptcy Case No.: 08-09989 Type of Business: The Debtor owns an apartment building. Chapter 11 Petition Date: October 27, 2008 Court: Middle District of Tennessee (Nashville) Judge: George C Paine II Debtor's Counsel: Elliott Warner Jones, Esq. ejones@dsattorneys.com Drescher & Sharp, P.C. 1720 West End Avenue, Suite 300 Nashville, TN 37203 Tel: (615) 425-7121 Fax: (615) 425-7111 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/tnmb08-09989.pdf PROELITE INC: Gets Default Notice from Showtime Network ------------------------------------------------------- ProElite Inc. received a notice of default and reservation of rights dated Oct. 15, 2008, from Showtime Networks. Showtime claimed in the notice that the company has violated a debt covenant under a senior secured note purchase agreement dated June 18, 2008, and related security agreement dated Sept. 10, 2008, as amended, requiring the company to maintain at least $550,000 of unrestricted funds with a nationally recognized financial institution. Approximately $6.3 million is outstanding under the loan agreements, which is secured by substantially all of the company's assets. The notice states that Showtime may, within three business days, exercise rights and remedies including: a) exercise any and all rights as beneficial and legal owner of the company's assets; b) sell or assign the company's assets in whole or in part; c) grant a license or franchise to use the Company's assets in whole or in part; d) sue, demand, collect or receive Showtime's name and money property or receivable on account of or in exchange for the company's assets; or e) exercise all voting, consensual or other powers of ownership pertaining to the Company's assets as if Showtime were the sole and absolute owner thereof. On October 16, 2008, Ken Hershman tendered his resignation from the Board of Directors. Mr. Hershman is an executive officer of Showtime and was Showtime's designee on the company's Board of Directors. Edward Hannah resigned from the board the following day. The company's condensed consolidated balance sheet sheet at June 30, 2008, showed $15,025,349 in total assets and $9,715,772 in total liabilities. The company reported $18,719,364 net loss on total revenue of $3,686,650 for the three months ended June 30, 2008, compared with $7,393,200 net loss on total revenue of $1,927,235 for the same period a year earlier. A full-text copy of the company's regulatory filing is available for free at http://ResearchArchives.com/t/s?3441 Going Concern Doubt The company has incurred losses from operations and negative cash flows from operations since its inception. Although the company had approximately $3.5 million of cash at June 30, 2008, the company continues to expend more cash than it brings in through operations. The company is actively negotiating to consummate a financing of approximately $3.5 million in secured debt (with a funded amount of $3.0 million after an original issue discount of $500,000) and believes a successful closing is reasonably likely. The company says, however, that even with the successful closing of this debt financing, it expects that its capital resources would be sufficient only until the end of the year, and only if the company makes significant reductions in or cessation of operations and expenditures before year end, including dramatically reducing costs by reducing administrative expenses and some lines of business. These factors raise substantial doubt about the company's ability to continue as a going concern. About ProElite Inc. Headquartered in Los Angeles, ProElite, Inc. (OTC BB: PELE.PK) -- http://www.proeliteinc.com/-- through its subsidiaries, develops, organizes, and promotes live mixed martial arts (MMA) matches. It has agreements to distribute the video content through various distribution channels, including television networks, DVD, cable channels, and the Internet throughout the world. The company also operates ProElite.com, a social networking Web site for MMA enthusiasts and practitioners, which includes forums chats, message boards, internal communications, the ability to post photos, videos and other content, e-commerce, and transaction engines, as well as features footage from its live events and Webcast events, and post-fight interviews with MMA fighters. PROVIDENCE SERVICE: S&P Puts 'B+' Credit Rating Under Neg. Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B+' corporate credit rating and other ratings on Providence Service Corp. on CreditWatch with negative implications. "The CreditWatch follows the recent announcement by the company that it was withdrawing its guidance, and even more significant, that it expects to take a non-cash impairment charge of $90 million- $120 million in the third quarter related to its LogistiCare acquisition," said Standard & Poor's credit analyst Alain Pelanne. Acquired in late-2007, LogistiCare is Providence's largest acquisition ever, and it diversified the company by adding the nation's leading case management provider coordinating non- emergency transportation services for the Medicaid population. However, since then, several states have found themselves in a more tenuous financial position, and as such, are putting pressure on a number of their Medicaid providers, including Providence. S&P expects to review the company's financial results for the third quarter and also examine the company's plan to deal with anticipated pressures in its core businesses. In particular, S&P will examine the company's ability to comply with bank loan covenants before taking a further rating action. Providence provides community-based behavioral health and NET services through about 1,000 contracts throughout the U.S. RED SHIELD: Court Approves $18.9 Million Plant Sale to Patriarch ---------------------------------------------------------------- Christopher Scinta of Bloomberg News reports that the U.S. Bankruptcy Court for the District of Maine approved the sale of the pulp mill and biomass power plant of Red Shield Environmental, LLC, following an auction to an affiliate of private-equity group Patriarch Partners LLC for $18.9 million on Oct. 23, 2008. The minimum bid for the mill was expected to be $11.5 million, The Associated Press relates, citing Bob Keach, Esq., the attorney for Red Shield. According to The AP, Maine's Gov. John Baldacci said that Patriarch Partners was expected to close the mill on Monday. The report says that Patriarch Partners said it hopes to get the mill up and running as soon as possible. The AP states that a $30 million grant from the U.S. Department of Energy to start ethanol production will be transferred to the new owner once the sale is finalized. About Red Shield Headquartered in Old Town, Maine, Red Shield Environmental, LLC -- http://www.redshieldenv.com/-- provides renewable energy for on- site consumption. The company and its affiliate, RSE Pulp & Chemical, LLC, filed for chapter 11 protection on June 27, 2008 (Bankr. D. Maine Case Nos. 08-10633 and 08-10634), blaming increases in material and fuel costs.. Robert J. Keach, Esq., at Bernstein, Shur, Sawyer & Nelson, represents the Debtors in their restructuring efforts. When the Debtors filed for protection against their creditors, they listed assets of between $50 million and $100 million, and debts of between $1 million and $10 million. ROBERT GAVIN: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Robert G. Gavin, Sr. 189 South Main Street Doylestown, PA 18901 Bankruptcy Case No.: 08-17011 Chapter 11 Petition Date: October 27, 2008 Court: Eastern District of Pennsylvania (Philadelphia) Debtor's Counsel: Michael H. Kaliner, Esq. michaelkaliner@7trustee.net Jackson,Cook,Caracappa & Bloom 312 Oxford Valley Road Fairless Hills, PA 19030 Tel: (215) 946-4342 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of 20 largest unsecured creditors. ROBERT MCDONALD: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Robert C. McDonald dba Scooters dba Bob's Dogs 1412 South Racoon Road Youngstown, OH 44515 Bankruptcy Case No.: 08-27141 Chapter 11 Petition Date: October 27, 2008 Court: Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: Edgardo D. Santillan, Esq. edscourt@debtlaw.com Santillan & Associates,P.C. 650 Corporation Street, Ste 304 Beaver, PA 15009 Tel: (724) 770-1040 Fax: (412) 774-2266 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/pawb08-27141.pdf RYLAND GROUP: Posts $65.7MM Net Loss for Quarter Ended Sept. 30 --------------------------------------------------------------- The Ryland Group, Inc. and its subsidiaries posted $65.72 million in net losses on $543.84 billion in net revenues for the third quarter ended Sept. 30, 2008, compared with $54.74 million in net losses on $737.24 billion in net revenues for same period ended Sept. 30, 2007. The Ryland Group, Inc. and its subsidiaries posted $336.67 million in net losses on $1.45 billion in net revenues for the nine months ended Sept. 30, 2008, compared with $131.62 million in net losses on $2.19 billion in net revenues for same period ended Sept. 30, 2007. The Ryland Group's balance sheet as of Sept. 30, 2008, showed $2.06 billion in total assets, $1.25 billion in total liabilities, $33.79 million in minority interests and $784.4 million in shareholders' equity. Full-text copy of the - is available free of charge at: http://researcharchives.com/t/s?3442 About Ryland Group Based in Calabasas, California and founded in 1967, The Ryland Group Inc. (NYSE: RYL) -- http://www.ryland.com/-- is one of the nation's largest homebuilders and a leading mortgage-finance company. The company currently operates in 28 markets across the country and has built more than 275,000 homes and financed more than 230,000 mortgages since its founding in 1967. * * * As reported in the Troubled Company Reporter on Dec. 21, 2007, Moody's Investors Service lowered the ratings of The Ryland Group Inc., including its corporate family rating and the ratings on the various issues of senior unsecured notes to Ba1 from Baa3. The ratings were taken off review for downgrade where they had been placed on Oct. 31, 2007, and the outlook is negative. The company has reported seven consecutive quarters of net losses since the first quarter of 2007. The company posted $241.6 million in net losses on $487.9 million in revenues for the second quarter ended June 30, 2008. SEMGROUP LP: Chapter 11 Examiner To Report Work Plan by Nov. 6 -------------------------------------------------------------- John Knight, Esq., at Richards Layton & Finger, SemGroup LP's local Delaware counsel, said the Chapter 11 examiner appointed for the company's bankruptcy cases will submit his work plan and budget on November 6, 2008, Reuters reported. Roberta A. DeAngelis, Acting U.S. Trustee for Region 3, previously appointed former Federal Bureau of Investigation director Louis J. Freeh as the Chapter 11 examiner to investigate the trading practices and prepetition transaction of SemGroup and its debtor affiliates. About SemGroup SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq. at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on Nov. 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. (SemGoup Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SEMGROUP LP: U.S. Trustee Forms Nine-Member Creditors Committee --------------------------------------------------------------- Pursuant to Section 1102(a)(1) of the Bankruptcy Code, Roberta A. DeAngelis, Acting U.S. Trustee for Region 3, appoints nine members of the Official Committee of Producers for SemGroup, L.P., and its debtor affiliates' Chapter 11 cases. The members are: 1. Samson Resources Company Samson Plaza, Two West Second St. Tulsa, OK 74103 Tel. No.: 918-591-1918 Fax No.: 918-591-7918 Attn: C. Philip Tholen 2. Kerr-McGee Oil & Gas Onshore LP c/o Porter & Hedges, LLP 1000 Main Street, 36th Floor Houston, TX 77002 Attn: James Matthew Vaugh 3. Altex Energy Corporation 4801 Gaillardia Parkway, Suite 325 Oklahoma City, OK 73142 Tel. No.: 405-242-6000 Fax No.: 405-242-6099 Attn: Thomas C. Lough 4. New Dominion, LLC 1307 S. Boulder, #400 Tulsa, OK 74119 Tel. No.: 918-587-6242 Fax No.: 918-587-7120 Attn: Fred M. Buxton 5. Special Energy Corporation PO Drawer 369 Stillwater, OK 74076 Tel. No.: 405-377-1177 Fax No.: 405-743-1617 Attn: Jimmie Winfred Eden, Jr. 6. McCoy Petroleum Corporation 8080 E. Central Suite 300 Witchita, KS 67206 Tel. No.: 316-636-2737 Fax No.: 316-636-2741 Attn: William M. Johnson 7. Williams Production RMT Company PO Box 2400, MD 50-4 Tulsa, OK 74102 Tel. No.: 918-573-3792 Fax No.: 918-573-2065 Attn: Randall L. O'Neal 8. Pioneer Natural Resources USA, Inc. 5205 N.O'Connor Blvd., Ste. 200 Irving, TX 75039 Tel. No.: 972-969-3800 Fax No.: 972-969-3575 Attn: Hershal K. Wolfe 9. Chesapeake Energy Marketing, Inc. 6100 N. Western Avenue Oklahoma City, OK 73118 Tel. No.: 405-879-9163 Fax No.: 405-767-4115 Attn: James C. Johnson Pioneer Natural Resources is listed in the Debtors' Chapter 11 petition as one of their largest unsecured trade creditors. It holds a trade debt totaling more than $23,206,840 against the Debtors. About SemGroup SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq. at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on Nov. 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. (SemGoup Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SMARTIRE SYSTEMS: To Sell Business and Assets to Bendix ------------------------------------------------------- SmarTire Systems, Inc. disclosed in a Securities and Exchange Commission filing that on Oct. 15, 2008, it executed with and Bendix Commercial Vehicle Systems LLC, a wholly owned subsidiary of Knorr-Bremse AG, a term sheet. Under the term sheet, Bendix may acquire substantially all of the business and assets, and assume certain of the liabilities of, the company. The Term Sheet is subject to certain material terms and conditions prior to completion of the proposed transaction, including negotiation and completion of a mutually acceptable definitive sale and purchase agreement; approval of the transaction by the company's board of directors; and approval of the transaction by the company's debtholders, including release of all debts and claims against the company's assets. The acquisition by the Buyer is also subject to corporate approvals. The company expects to apply all, or substantially all, of the proceeds from the proposed sale against its debt obligations. The Buyer expects to incorporate the SmarTire business into its existing electronics business unit. About SmarTire Systems Headquartered in Richmond, British Columbia, Canada, SmarTire Systems Inc. (OTC BB: SMTR) -- http://smartire.com/-- develops, subcontracts its manufacturing, and markets tire pressure monitoring systems (TPMSs), which monitor tire pressure and tire temperature in a range of vehicles. The company sells TPMSs for trucks, buses, recreational vehicles, passenger cars and motorcycles. It has three wholly owned subsidiaries: SmarTire Technologies Inc., SmarTire USA Inc. and SmarTire Europe Limited. In Europe, SmarTire is headquartered in Oxfordshire, United Kingdom. SmarTire Systems Inc.'s consolidated balance sheet at April 30, 2008, showed US$3,240,386 in total assets, US$38,162,990 in total liabilities, and US$3,565,585 in preferred shares, resulting in a US$38,488,189 stockholders' deficit. Going Concern Doubt BDO Dunwoody LLP, in Vancouver, Canada, expressed substantial doubt about SmarTire Systems Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended July 31, 2007, and 2006. The auditing firm pointed to the company's accumulated deficit and working capital deficiency. The company has incurred recurring operating losses and as of April 30, 2008, had an accumulated deficit of $146,822,824 and a working capital deficiency of US$33,864,927 of which US$33,739,519 is potentially convertible into shares of common stock of the company, subject to certain restrictions. SPEEDWAY MOTORSPORTS: S&P Trims Rating to 'BB'; Removes Neg. Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit and issue-level ratings on Concord, North Carolina-based Speedway Motorsports Inc. by one notch; the corporate credit rating was lowered to 'BB' from 'BB+'. Concurrently, S&P removed the ratings from CreditWatch, where they were placed with negative implications June 18, 2008. The rating outlook is stable. "The rating change is based on Speedway Motorsports' more aggressive financial policy, higher debt leverage, and our discomfort with the narrowing margin of compliance for the previous 'BB+' rating," explained Standard & Poor's credit analyst Andy Liu. Over the past 12 months, Speedway Motorsports acquired New Hampshire International Speedway for $340 million in cash and has agreed to acquire the assets of Kentucky Speedway LLC for $78 million. When the acquisition of Kentucky Speedway is completed, which S&P expects before year-end, leverage will rise to 3.1x -- above of its 3.0x target for a 'BB+' rating. While Standard & Poor's believes the acquisition of Kentucky Speedway will be a positive longer term, it will be a minor drag on Speedway Motorsports' financial results over the next two years. Kentucky Speedway's financial results are not likely to improve until Speedway Motorsports can move one of its existing National Association of Stock Car Auto Racing Sprint Cup race dates to the track, which Standard & Poor's believes will not take place until 2010 or 2011 race season. The rating reflects Speedway Motorsports' concentrated earnings profile, uncertainty regarding the earnings potential of its Kentucky Speedway acquisition, and higher debt leverage due to acquisitions. The company's good market position in the motorsports industry, higher barriers to entry, and consistent operating performance partially offset these factors. Speedway Motorsports is the smaller of two major companies that host auto races sanctioned by NASCAR. Rival International Speedway Corp. is controlled by the same family that controls NASCAR. For the 12 months ended June 30, 2008, Speedway Motorsports' total debt to EBITDA was 2.9x. Pro forma for the acquisition of Kentucky Speedway, total debt to EBITDA was 3.1x, based on June 30, 2008 reported financials -- above S&P's target for the 'BB+' rating. Moreover, S&P believes that the company could look to acquire more race tracks as they come up for sale. While the probability of Speedway Motorsports making another acquisition is low over the near term, another acquisition will certainly increase debt leverage and further narrow the margin of compliance with its bank leverage covenant. For the 12 months ended June 30, 2008, Speedway Motorsports converted 31% of EBITDA into discretionary cash flow--better than the previous two years, as a result of lower capital spending. SPHERIX INC: Nasdaq Waives Delisting Action Until January 16 ------------------------------------------------------------ Spherix Incorporated received written notification from Nasdaq advising the company that, because of the current instability in the financial markets, Nasdaq has suspended enforcement of the bid price and market value requirements for continued listing on its Global Market. The suspension period will be in effect from Oct. 16, 2008, through Jan. 16, 2009. The Nasdaq notice provides that all companies currently in a bid price or market value compliance period, as Spherix, will not be subject to delisting during the suspension period and will be granted an extended compliance period. On Oct. 16, 2008, Spherix had 94 calendar days remaining in its compliance period for its bid price deficiency. Upon reinstatement of the rules on Jan. 19, 2008, Spherix will still have this number of days, or until April 23, 2009, to regain compliance. The company can achieve compliance at any time during either the suspension or the extended compliance period if the bid price of its common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days. If the company does not regain compliance with this rule by April 23, 2009, Nasdaq will provide notice to the company that its common stock will be delisted from Nasdaq and the company will have an opportunity to appeal the determination. Spherix also disclosed that it will be holding a Special Meeting of Stockholders on Nov. 17, 2008, to vote on a proposal to authorize a reverse split of the company's common stock within a range of 1:5 to 1:20. If approved, the board of directors would then be granted the authority to determine, in its discretion, the actual ratio of the reverse stock split immediately prior to the effective date of the reverse stock split, and when and if such reverse stock split would be implemented. The board would have the authority to implement the reverse split at any time within 12 months of the Special Meeting of Stockholders. About Spherix Incorporated Headquartered in Beltsville, Maryland, Spherix Incorporated (NASDAQ:SPEX) -- http://www.spherix.com/-- operated through two segments: InfoSpherix and BioSpherix prior to Aug. 15, 2007. BioSpherix develops products for commercial applications, while InfoSpherix provided contact center information and reservations services for government and industry. The company's focus is on the non-food use of tagatose, which Spherix plans to market under the name Naturlose. Its principal efforts have been to explore whether Naturlose is an effective treatment for Type 2 diabetes. SPRINT NEXTEL: Names Sven-Christer Nilsson to Board --------------------------------------------------- Sprint Nextel Corp. disclosed in a Securities and Exchange Commission filing that it has appointed Sven-Christer Nilsson to its Board of Directors. Mr. Nilsson is involved in the development of small companies as an advisor and board member. He held various leadership positions with The Ericsson Group, one of the world's leading telecommunications equipment companies, from 1982 through 1999, including president and CEO from 1998 to 1999. Sprint also disclosed the resignation of Ralph V. Whitworth from the board. "Sven-Christer has more than 30 years of experience in the IT and telecommunications industries and will be a strong addition to our board," said James Hance, chairman of the board of Sprint Nextel. "His expertise and counsel will help guide Sprint as it works to improve performance and profitability." "I would also like to thank Ralph Whitworth for his contributions to our board," said Mr. Hance. "Although only on the board for a short period of time, Ralph's knowledge of the business, his keen insight, and his focus on turning around the business were invaluable. On behalf of the entire company, I want to thank Ralph for his effort and expertise." 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 WOODS: Case Summary & 19 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Steve Woods Printing Company, LLC 2205 E. University Phoenix, AZ 85034 Bankruptcy Case No.: 08-14912 Chapter 11 Petition Date: October 24, 2008 Court: District of Arizona (Phoenix) Judge: Sarah Sharer Curley Debtor's Counsel: Donald W. Powell, Esq. d.powell@cplawfirm.com Carmichael & Powell, P.C. 7301 North, 16th Street, #103 Phoenix, AZ 85020 Tel: (602) 861-0777 Fax: (602) 870-0296 Total Assets: $0 Total Debts: $2,503,202 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/azb08-14912.pdf STOCKMANS BANK: Weiss Ratings Assigns "Very Weak" E- Rating ----------------------------------------------------------- Weiss Ratings has assigned its E- rating to Altus, Okla.-based Stockmans Bank. Weiss says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests Weiss uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." Sotckmans Bank is not a member of the Federal Reserve. Stockmans was established on Jan. 1, 1910, and deposits have been insured by the Federal Deposit Insurance Corporation since Jan. 1, 1934. Stockman's Web site at https://www.stockmansbankok.com/ relates that the institution has four branches located in Gould, Altus, Hollis, and Mangum, serves the local community, and provides working capital for many farmers and ranchers. At June 30, 2008, Stockmans Bank disclosed $113 million in assets and $105 million in liabilities in its regulatory filings. TEKOIL & GAS: Committee May Retain P&H as Bankruptcy Counsel ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Texas granted the Official Committee of Unsecured Creditors appointed in Tekoil & Gas Corp. and Tekoil Gas and Gulf Coast, LLC's jointly administered bankruptcy cases, authority to employ Porter & Hedges, L.L.P. as its bankruptcy counsel. As the Official Committee of Unsecured Creditors' bankruptcy counsel, P&H will: a) assist, advise and represent the Committee in its consultations regarding the administration of these cases; b) assist, advise and represent the Committee in investigating the acts, conduct, assets, liabilities and financial condition of the Debtors, the operation of the Debtors' businesses and the desirability of the continuance of such businesses, and any other matters relevant to these cases or the formulation of a plan; c) assist, advise and represent the Committee in analyzing the Debtors' assets and liabilities, investigating the extent and validity of liens, cash collateral stipulations and contested matters; d) assist, advise and represent the Committee with respect to the Debtors' potential postpetition financing transactions and cash collateral issues; e) assist, advise and represent the Committee in participating in the negotiation and formulation of a disclosure statement and plan of reorganization and to advise those represented by the Committee of the Committee's determinations as to any plan; f) request the appointment of a trustee or examiner as provided for under Section 1104 of the Bankruptcy Code; g) assist, advise and represent the Committee in any manner relevant to preserving and protecting the Debtors' estates and the rights of creditors; h) assist, advise and represent the Committee regarding the evaluation of claims, preferences, fraudulent transfers and other actions; i) prepare on behalf of the Committee all necessary applications, motions, answers, orders, reports, and other legal papers; j) appear in Court and protect the interests of the Committee before the Court; and k) perform all other legal services for the Committee which may be necessary and proper in this proceeding. The Court ordered that P&H will be compensated in accordance with the procedures set forth in Sections 330 and 331 of the Bankruptcy Code and such Bankruptcy Rules as may then be applicable from time to time, and such procedures as may be fixed by order of the Court. P&H professionals currently bill: Designation Low/High ----------- -------- Partners $350/650 Of Counsel $375/400 Associates/Staff Attorneys $225/325 Paralegals/Law Clerks $135/175 The Court finds that P&H does not hold or represent any interest adverse to the Debtors or their estates, and that the firm is a "disinterested person" as that term is defined in Sec. 101(14) of the Bankruptcy Code. About Tekoil & Gas Based in Houston, Tekoil & Gas Corporation and its subsidiaries -- http://www.tekoil.com/-- say they are into acquiring, stimulating, rehabilitating and improving the assets of small to medium sized oil and gas properties in North America. Tekoil & Gas owns interests in four oil and gas properties, including the Trinity Bay, Redfish Reef, Fishers Reef, and North Point Bolivar fields located in Galveston Bay, Texas. The company was incorporated in Florida in 2004. The company filed for Chapter 11 protection on June 10, 2008 (Bankr. S.D. Tex. Case No. 08-80270). Edward L. Rothberg, Esq., at Weycer Kaplan Pulaski & Zuber, Nancy Lee Ribaudo, Esq., and Patrick J. Neligan, Jr., Esq., at Neligan Foley LLP, represent the Debtor as counsel. David Ronald Jones, Esq., John F. Higgins, IV, Esq., and Joshua Nielson Eppich, Esq., at Porter and Hedges LLP, represent the Official Committee of Unsecured Creditors as counsel. When the Debtor filed for protection from its creditors, it listed assets of $10 million to $50 million, and liabilities of $10 million to $50 million. Based in Spring, Texas, Tekoil and Gas Gulf Coast, LLC is an acquisition subsidiary of Tekoil & Gas Corp. The company filed a separate petition for Chapter 11 relief on Aug. 29, 2008 (Bankr. S.D. Tex. Case No. 08-80405). Patrick J. Neligan, Jr., Esq., at Neligan Foley LLP represents Tekoil and Gas Gulf Coast as counsel. When Gulf Coast filed for protection from its creditors, it listed assets of $50 million to $100 million, and debts of $10 million to $50 million. TEKOIL & GAS: Gulf Coast Taps William Roberts as Consultant ----------------------------------------------------------- Tekoil and Gas Gulf Coast, LLC asks the U.S. Bankruptcy Court for the Southern District of Texas for authority to employ William L. Roberts as its financial and management consultant, effective Oct. 1, 2008. Gulf Coast seeks to retain Mr. Roberts as part of its effort to reduce operational expenses post-hurricane Ike by outsourcing day- to-day business operations, as well as to assist the Debtor in ints restructuring efforts to maximize value of the estate for the benefit of creditors. Specifically, Mr. Roberts will: a) acquire, inventory, and validate company contracts for bankruptcy reporting and acceptance/rejection; b) manage preparation of bankruptcy schedules and amended filings; c) prepare monthly and quarterly bankruptcy financial reporting as required by the U.S. Trustee's office; d) assist in preparing documentation and analysis in insurance claim process; e) assist with analysis and responses in remediation of regulatory matters with the Texas General Land Office and the Texas Railroad Commission; f) assist in preparing company and documentation for bankruptcy Section 363 sale process; g) manage move of corporate offices to professional offices in Dallas, Texas; h) assist in the establishment of administrative and internal controls to safeguard the company's assets; i) assist in establishing physical safeguarding of company's files, electronic data, and other valuable assets; and j) perform other similar task as requested by the Debtor. As compensation for his services, Mr. Roberts will be paid an hourly rate of $175 with a daily cap of $1,500. William D. Roberts, a certified public accountant in the State of Texas, assures the Court that he is an independent contractor and has no unpermitted connection with any known creditor or interested party, nor does he represent any interest adverse to the Debtor or its estate, and that he is a "disinterested person" as that term is defined in Sec. 101(14) of the Bankruptcy Code. About Tekoil & Gas Based in Houston, Tekoil & Gas Corporation and its subsidiaries -- http://www.tekoil.com/-- say they are into acquiring, stimulating, rehabilitating and improving the assets of small to medium sized oil and gas properties in North America. Tekoil & Gas owns interests in four oil and gas properties, including the Trinity Bay, Redfish Reef, Fishers Reef, and North Point Bolivar fields located in Galveston Bay, Texas. The company was incorporated in Florida in 2004. The company filed for Chapter 11 protection on June 10, 2008 (Bankr. S.D. Tex. Case No. 08-80270). Edward L. Rothberg, Esq., at Weycer Kaplan Pulaski & Zuber, Nancy Lee Ribaudo, Esq., and Patrick J. Neligan, Jr., Esq., at Neligan Foley LLP, represent the Debtor as counsel. David Ronald Jones, Esq., John F. Higgins, IV, Esq., and Joshua Nielson Eppich, Esq., at Porter and Hedges LLP, represent the Official Committee of Unsecured Creditors as counsel. When the Debtor filed for protection from its creditors, it listed assets of $10 million to $50 million, and liabilities of $10 million to $50 million. Based in Spring, Texas, Tekoil and Gas Gulf Coast, LLC is an acquisition subsidiary of Tekoil & Gas Corp. The company filed a separate petition for Chapter 11 relief on Aug. 29, 2008 (Bankr. S.D. Tex. Case No. 08-80405). Patrick J. Neligan, Jr., Esq., at Neligan Foley LLP represents Tekoil and Gas Gulf Coast as counsel. When Gulf Coast filed for protection from its creditors, it listed assets of $50 million to $100 million, and debts of $10 million to $50 million. TEKOIL & GAS: Gulf Coast Taps Neligan Foley as Bankruptcy Counsel ----------------------------------------------------------------- Tekoil and Gas Gulf Coast, LLC asks the U.S. Bankruptcy Court for the Southern District of Texas for authority to employ Neligan Foley LLP as its counsel, nunc pro tunc to Aug. 29, 2008. The Court approved the employment of Neligan Foley, LLP as counsel for Tekoil & Gas Corp. on Sept. 19, 2008. As Gulf Coast's counsel, Neligan Foley will: a) advise the Debtor's management, officers and members on issues involving operations, potential sales of assets, and possible financing options as well as negotiate documents, prepare pleadings, and represent the Debtor at hearings related to those matters; b) take all necessary actions to protect and preserve the Debtor's estate, including prosecuting litigation on the Debtor's behalf, investigating litigation on behalf of the Debtor and claims of the Debtor, defending the Debtor, if necessary, in any actions, litigations, hearings or motions commenced against the Debtor, negotiating disputes in which the Debtor is involved, and preparing objections to claims filed against the estate; d) prepare on behalf of the Debtor all necessary motions, applications, answers, pleadings, orders, reports, and papers in connection with the administration of the estate or in furtherance of the Debtor's business operations, or as required to preserve the assets of the Debtor, and as otherwise requested by the Debtor's management; e) negotiate and draft documents relating to debtor-in- possession financing and use of cash collateral as well as attend any hearings on such matters, prepare discovery and respond to discovery served on the Debtor, respond to creditor inquiries and information requests, assist with preparation of Schedules, Statement of Affairs, Monthly Operating Reports, attendance at the 341 meeting and representation at meetings with creditors as well as the Committee. f) draft, negotiate, and prosecute on behalf of the Debtor a plan or plans of reorganization, the related disclosure statements, any revisions, amendments, and supplements relating to the foregoing documents, and all related materials; g) perform all other necessary legal services in connection with this Chapter 11 case and any other bankruptcy-related representation that the Debtor requires; and h) handle all litigation, discovery, and other matters for the Debtor arising in connection with this Chapter 11 case. Gulf Coast tells the Court that it has paid a total of $82,002.91 to Neligan Foley, consisting of $1,816.41 in expenses and $80,186.50 in fees. Neligan Foley currently has a Retainer of $47,997.09 which is held in a Neligan Foley client trust account. If, at the conclusion of the Debtor's case, Neligan Foley's fees and expenses are ultimately approved in an aggregate amount less that the amount of the Retainer, Neligan Foley will return any remaining portion of the Retainer. To the best of the Debtor's knowledge, Neligan Foley has no interest adverse to Gulf Coast, and that that the firm is a "disinterested person" as that term is defined in Sec. 101(14) of the Bankruptcy Code. Subject to the Court's approval, Neligan Foley will charge for its legal services on an hourly basis in accordance with its ordinary and customary hourly rates in effect on the date services are rendered. Neligan Foley professionals who will have primary responsibility for providing services and their hourly rates are: Professional Hourly Rate ------------ ----------- Patrick J. Neligan, Jr., Esq. partner $485 Nick Foley, Esq., partner $450 Nancy L. Ribaudo, Esq., associate $200 Katherine Gradick, paralegal $150 About Tekoil & Gas Based in Houston, Tekoil & Gas Corporation and its subsidiaries -- http://www.tekoil.com/-- say they are into acquiring, stimulating, rehabilitating and improving the assets of small to medium sized oil and gas properties in North America. Tekoil & Gas owns interests in four oil and gas properties, including the Trinity Bay, Redfish Reef, Fishers Reef, and North Point Bolivar fields located in Galveston Bay, Texas. The company was incorporated in Florida in 2004. The company filed for Chapter 11 protection on June 10, 2008 (Bankr. S.D. Tex. Case No. 08-80270). Edward L. Rothberg, Esq., at Weycer Kaplan Pulaski & Zuber, Nancy Lee Ribaudo, Esq., and Patrick J. Neligan, Jr., Esq., at Neligan Foley LLP, represent the Debtor as counsel. David Ronald Jones, Esq., John F. Higgins, IV, Esq., and Joshua Nielson Eppich, Esq., at Porter and Hedges LLP, represent the Official Committee of Unsecured Creditors as counsel. When the Debtor filed for protection from its creditors, it listed assets of $10 million to $50 million, and liabilities of $10 million to $50 million. Based in Spring, Texas, Tekoil and Gas Gulf Coast, LLC is an acquisition subsidiary of Tekoil & Gas Corp. The company filed a separate petition for Chapter 11 relief on Aug. 29, 2008 (Bankr. S.D. Tex. Case No. 08-80405). When Gulf Coast filed for protection from its creditors, it listed assets of $50 million to $100 million, and debts of $10 million to $50 million. TEKOIL & GAS: U.S. Trustee Appoints Five-Member Creditors Panel --------------------------------------------------------------- Charles F. McVay, the U.S. Trustee for Region 7, appointed five creditors to serve on the Official Committee of Unsecured Creditors in Tekoil & Gas Corp., and Tekoil and Oil Gulf Coast, LLC's jointly administered Chapter 11 cases. The Creditors Committee members are: a) Geophysical Pursuit Inc. Attn: Jeff Springmeyer 3501 Allen Parkway Houston, TX 77019 Tel: (713) 529-3000 Fax: (713) 529-5805 b) Fusion Petroleum Technologies Inc. Attn: Treveor J. Parkes 8665 New Trails Drive, Suite 125 The Woodlands, TX 77381-4278 Tel: (281) 363-8530 Fax: (281) 363-4657 c) Creel & Associates, Inc. Attn: Harry L. Price 1400 Broadfield Boulevard, Suite 250 Houston, TX 77084-4111 Tel: (281) 752-4400 Fax: (281) 589-6003 d) Baker & Hostetler, LLP Attn: Pamela Gale Johnson Laura Lawton Gee 1000 Louisiana, Suite 2000 Houston, TX 77002 Tel: (713) 646-1324 Fax: (713) 751-1717 e) Longfellow Energy, LP Attn: Matthew McCann, General Counsel 4801 Gaillardia Parkway, Suite 225 Oklahoma City, OK 73142 Tel: (405) 286-6324 ext 1036 Fax: (405) 286-6399 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Tekoil & Gas Based in Houston, Tekoil & Gas Corporation and its subsidiaries -- http://www.tekoil.com/-- say they are into acquiring, stimulating, rehabilitating and improving the assets of small to medium sized oil and gas properties in North America. Tekoil & Gas owns interests in four oil and gas properties, including the Trinity Bay, Redfish Reef, Fishers Reef, and North Point Bolivar fields located in Galveston Bay, Texas. The company was incorporated in Florida in 2004. The company filed for Chapter 11 protection on June 10, 2008 (Bankr. S.D. Tex. Case No. 08-80270). Edward L. Rothberg, Esq., at Weycer Kaplan Pulaski & Zuber, Nancy Lee Ribaudo, Esq., and Patrick J. Neligan, Jr., Esq., at Neligan Foley LLP, represent the Debtor as counsel. David Ronald Jones, Esq., John F. Higgins, IV, Esq., and Joshua Nielson Eppich, Esq., at Porter and Hedges LLP, represent the Official Committee of Unsecured Creditors as counsel. When the Debtor filed for protection from its creditors, it listed assets of $10 million to $50 million, and liabilities of $10 million to $50 million. Based in Spring, Texas, Tekoil and Gas Gulf Coast, LLC is an acquisition subsidiary of Tekoil & Gas Corp. The company filed a separate petition for Chapter 11 relief on Aug. 29, 2008 (Bankr. S.D. Tex. Case No. 08-80405). Patrick J. Neligan, Jr., Esq., at Neligan Foley LLP represents Tekoil and Gas Gulf Coast as counsel. When Gulf Coast filed for protection from its creditors, it listed assets of $50 million to $100 million, and debts of $10 million to $50 million. TEKOIL & GAS: Court Extends Plan Filing Period to December 29 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas has extended Tekoil & Gas Corp.'s exclusive periods to: a) file a plan to Dec. 29, 2008; b) solicit acceptances of the plan to Feb. 25, 2009. As reported in the Troubled Company Reporter on Oct. 3, 2008, Tekoil & Gas Corp. told the Court that the Dec. 29, 2008 deadline to file a plan coincides with the exclusivity period for Tekoil and Gas Gulf Coast, which filed for Chapter 11 reorganization on Aug. 29, 2008. The Debtor said it owns a 75% limited liability company membership interest in Gulf Coast and is the guarantor of Gulf Coast's prepetition credit facilities with J. Aron and Company and other lenders. The Court approved on Oct. 3, 2008, Tekoil & Gas, and Gulf Coast's request for the joint administration of their cases. About Tekoil & Gas Based in Houston, Tekoil & Gas Corporation and its subsidiaries -- http://www.tekoil.com/-- say they are into acquiring, stimulating, rehabilitating and improving the assets of small to medium sized oil and gas properties in North America. Tekoil & Gas owns interests in four oil and gas properties, including the Trinity Bay, Redfish Reef, Fishers Reef, and North Point Bolivar fields located in Galveston Bay, Texas. The company was incorporated in Florida in 2004. The company filed for Chapter 11 protection on June 10, 2008 (Bankr. S.D. Tex. Case No. 08-80270). Edward L. Rothberg, Esq., at Weycer Kaplan Pulaski & Zuber, Nancy Lee Ribaudo, Esq., and Patrick J. Neligan, Jr., Esq., at Neligan Foley LLP, represent the Debtor as counsel. David Ronald Jones, Esq., John F. Higgins, IV, Esq., and Joshua Nielson Eppich, Esq., at Porter and Hedges LLP, represent the Official Committee of Unsecured Creditors as counsel. When the Debtor filed for protection from its creditors, it listed assets of $10 million to $50 million, and liabilities of $10 million to $50 million. Based in Spring, Texas, Tekoil and Gas Gulf Coast, LLC is an acquisition subsidiary of Tekoil & Gas Corp. The company filed a separate petition for Chapter 11 relief on Aug. 29, 2008 (Bankr. S.D. Tex. Case No. 08-80405). Patrick J. Neligan, Jr., Esq., at Neligan Foley LLP represents Tekoil and Gas Gulf Coast as counsel. When Gulf Coast filed for protection from its creditors, it listed assets of $50 million to $100 million, and debts of $10 million to $50 million. VAIL PLAZA: Files For Chapter 11 Bankruptcy in Colorado ------------------------------------------------------- Erik Larson of Bloomberg News reports that Vail Plaza Development filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Colorado. The Chapter 11 filing came after a lender commenced foreclosure proceedings, the report says. The company listed $138,704,342 in total assets and $39,660,347 in total liabilities in its filing. The company owes $1,561,132 to its unsecured creditors including Ballard Spahr Andrew & Ingersoll LLP owing $425,063, Slifer Designs Inc. owing $386,485, and Zehren & Associates Inc. owing $379,750. Harvey Sender, Esq., at Sender & Wasserman P.C. in Denver, Colorado, represents the Company. Bloomberg, citing papers filed with the Court, notes that Capmark Financial Group Inc.'s unit hold as much as $38.2 million in claims against the company. The lender sued the company in Eagle County in Colorado, holds a lien on a property worth $60,700,000, the report says. Vail Plaza Mezzanine LLC, an affiliate of the company, also filed for bankruptcy. It listed $60,761,186 in total assets, and $38,282,808 in total liabilities. Headquartered in Vail, Colorado, Vail Plaza Development operates a hotel. On the Web: http://www.vailplazaclub.com/ VAIL PLAZA: Case Summary & 18 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Vail Plaza Development, LLC 16 Vail Road Vail, CO 81657 Bankruptcy Case No.: 08-26920 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Vail Plaza Mezzanine, LLC 08-26924 Type of Business: The Debtors operates a hotel. See: http://www.vailplazaclub.com/ Chapter 11 Petition Date: October 27, 2008 Court: District of Colorado (Denver) Judge: A. Bruce Campbell Debtor's Counsel: Harvey Sender, Esq. Sendertrustee@sendwass.com Sender & Wasserman, P.C. 1660 Lincoln St., Ste. 2200 Denver, CO 80264 Tel: (303) 296-1999 Fax: (303) 296-7600 Total Assets Total Debts ------------ ----------- Vail Plaza Development $138,704,342 $39,660,347 Vail Plaza Mezzanine $60,761,186 $38,282,808 The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ballard Spahr Andrew & trade debt $425,063 Ingersoll, LLP 1225 17th Street, Suite 2300 Denver, CO 80202-5596 Tel: (303) 292-2400 Slifer Designs Inc. trade debt $386,485 50 Marmot Lane Eagle, CO 81631 Tel: (970) 926-8200 Zehren & Associates Inc. trade debt $379,750 48 E. Beaver Creek Blvd. Avon, CO 80301-2600 Tel: (970) 949-0257 ARC Integrated Program trade debt $167,077 Management McBoyd Builders Inc. trade debt $81,305 Faegre & Benson LLP trade debt $39,119 Marotta Gund Budd & Dzera trade debt $22,741 LLC Daymer Corporation trade debt $17,286 Novosad Lyle & Associates trade debt $12,676 PC Thompson Welding LLC trade debt $12,316 Shaw Construction trade debt $6,132 Barracuda Networks Inc. trade debt $4,801 RE/COR Inc. trade debt $2,115 Village Inn Plaza Condo trade debt $1,759 Association Hospitality Trends Inc. trade debt $1,297 Synthetic Sidings Inc. trade debt $800 Home Depot trade debt $396 MSC Industrial Supply trade debt $14 VOLTARC TECHNOLOGIES: Case Summary & 20 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Voltarc Technologies, Inc. 400 Captain Neville Drive Waterbury, CT 06705 Bankruptcy Case No.: 08-33493 Type of Business: The Debtor make light products. See: http://www.voltarc.com/ Chapter 11 Petition Date: October 27, 2008 Court: District of Connecticut (New Haven) Judge: Lorraine Murphy Weil Debtor's Counsel: James M. Nugent, Esq. jmn@quidproquo.com Harlow, Adams, and Friedman 300 Bic Drive Milford, CT 06460 Tel: (203) 878-0661 Estimated Assets: Less than $50,000 Estimated Debts: $10 million to $50 million A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/ctb08-33493.pdf VONAGE HOLDINGS: Amends Conditions to Notes Purchase Offer ---------------------------------------------------------- Vonage Holdings Corp. has amended the conditions to its offer to purchase for cash any and all of its outstanding 5% Senior Unsecured Convertible Notes due 2010. As amended, the offer is subject to the satisfaction of certain conditions, including: -- $185,000,000 minimum principal amount of Notes being validly tendered and not properly withdrawn; -- the receipt by Vonage of the proceeds from (1) a $130.3 million senior secured first lien credit facility, (2) a $72.0 million senior secured second lien credit facility; and (3) the sale of $18.0 million of Vonage's 20% senior secured third lien notes due 2015; and --- the satisfaction of the other conditions to the offer. 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. W.R. GRACE: Addresses Various Objections to Disclosure Statement ---------------------------------------------------------------- Roberta A. DeAngelis, Acting U.S. Trustee for Region 3, Bank of America, N.A., and certain bank lenders, and insurance companies, among others, asked the United States Bankruptcy Court for the District of Delaware to deny approval, or, in the alternative, direct W.R. Grace & Co., et al. to modify, the Disclosure Statement explaining the Joint Plan of Reorganization. The Debtors point out that the Disclosure Statement Objections generally fall into four categories: (a) objections concerning the adequacy of the Disclosure Statement; (b) objections raising substantive confirmation issues; (c) insurance-related objections covering both disclosure and confirmation issues; and (d) objections to the Debtors' proposed Voting Procedures. The Debtors have prepared a tabulation of the Disclosure Statement Objections and their response to each of those objections, a copy of which is available for free at: http://ResearchArchives.com/t/s?3443 The Debtors ask the Court to overrule Objections pertaining to the confirmation of the Plan as the hearing on the Disclosure Statement is not the proper venue to hear any confirmation issue. More importantly, the Debtors ask the Court to overrule the objections questioning the adequacy of the Disclosure Statement pursuant to Section 11125 of the Bankruptcy Code. The Debtors indicated changes to the Plan that the Plan Proponents are considering making to address certain confirmation issues. Included in those considerations are amendments to address the objections to the treatment of Class 9 General Unsecured Claims are unimpaired under the Plan. David M. Bernick, P.C., Esq., at Kirkland & Ellis LLP, in New York, argues that issues relating to impairment, absolute priority rule, third party releases, and classification and treatment of certain Asbestos PI Claims do not render the Plan "patently unconfirmable." Mr. Bernick attests that Class 9 General Unsecured Creditors are properly treated under the Plan as unimpaired claims. The Plan Proponents are considering procedures in line with the Official Committee of Unsecured Creditors' request wherein general unsecured creditors may seek a postpetition interest other than what is in the Plan, he tells the Court. The Plan, however, will explicitly permit the Court to award no postpetition interest to any creditor who seeks to request additional postpetition interest. Moreover, the Plan will provide that any litigation to determine claims for a different interest rate that occurs after the Effective Date will be conducted as claim allowance litigation, subject to the Bankruptcy Code. As to Asbestos PI Claims, Mr. Bernick points out that the Plan's classification and treatment of indirect PI Trust Claims are consistent with Sections 524(g) and 1122 as the Indirect PI Trust Claims relate to the Debtors' asbestos liability. Thus, he maintains the Plan's classification of claims as Class 6 Asbestos PI Claims is only just and equitable. He further maintains that the Debtors' treatment of Indirect PI Trust Claims is far from unique as the Court has approved Chapter 11 plans of asbestos companies who adhere to the same treatment of claims. Other than the insurance companies' "disguised" Plan objections, the Debtors believe that there is no need for the Disclosure Statement to touch on the subject of the insurers' right to discovery since neither the Plan nor the Disclosure Statement restricts any of the insurance companies' rights and the insurance neutrality provision has been clear all along. Thus, the Debtors intend to add a language on the Plan mentioning contentions of these insurance companies and the Debtors' argument on these issues. Mr. Bernick reiterates that the Plan has resulted from extensive negotiations throughout the entire case. The settlement with the Official Committee of Asbestos Personal Injury Claimants and the Asbestos PI Future Claims Representative was reached in the midst of hotly contested estimation proceedings concerning the value of the Debtors' PI liabilities. "There is absolutely no basis for any conclusion other than that the settlement made under such circumstances was reached in good faith and that the Plan incorporating it has been proposed in good faith," Mr. Bernick asserts. Mr. Bernick tells the Court that the Debtors intend to file the remaining exhibits to the Plan before the conclusion of the Disclosure Statement hearing. Other Disclosure Statement Objections Arrowood Indemnity Company joins in Maryland Casualty Company's objection to the Disclosure Statement. Maryland and Arrowood previously filed Disclosure Statement objections on Oct. 17, 2008. Maryland Casualty objects to the proposed language set forth in each objection filed by Libby Claimants, BNSF Railway Company and The Scotts Company. Maryland stresses that it was neither directly or indirectly "responsible for failing to protect the workers and Libby from Grace's asbestos." In the same way that BNSF and Scotts Company have no rights to coverage under any insurance policies issued by Maryland to the Debtors. Maryland adds that the parties' rights, if any, are subject to settlement agreements between the Debtors and Maryland. Maryland joins in the Libby Claimants' Objections for reasons that: (i) the Debtors' proposed filing of the Plan Supplement after the Plan objection and voting deadlines have passed; and (ii) the Debt filing of or amendment to any Plan-related documents after the Disclosure Statement without Court approval of these documents under Section 1125. 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 Jan. 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. (W.R. Grace Bankruptcy News, Issue No. 169; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). W.R. GRACE: Wants Sale of San Leandro, California Asset Approved ---------------------------------------------------------------- W.R. Grace & Co. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware to approve of a purchase and sale agreement they entered into with ALCO Iron & Metal Co., for the sale of their property located at San Leandro, California. The Debtors own an operating facility in San Leandro, California that includes buildings, structures, improvements and certain personal property for their solvent-based can sealant plant. The Debtors intend to consolidate their Engineering Materials and Darex operations and will not need the Property anymore. Pursuant to the PSA, ALCO will purchase the Property for $6,500,000 and will close the sale of the Property by the end of 2008, in time for the transfer of the sealant plant. ALCO will also conduct an investigation on the Property within a 45-day period expiring on Nov. 3, 2008, and may terminate the Agreement for cause on or before Nov. 3, 2008. The Debtors will furnish Phase I and Phase II reports to ALCO and either of the parties may end the Agreement before 14 days following ALCO's receipt of the Reports. The Debtors will undertake postclosing legal actions, if required, to remediate environmental conditions determined by Phase II assessment. ALCO, however, agreed not to conduct any other subsurface environmental site investigation. ALCO will enter into a lease back to the Debtor at $.10 per square foot per month of the portion of the Property in which their construction products tanks currently sit for an initial term of one year from closing with two one-year renewal options. The Debtors will pay 4.5% of $6,500,000 to Lawrence C. Jones, Jr., of Cushman & Wakefield, Alco's broker, during closing. The Debtors tell the Court that they seek to eliminate accrual of carrying costs should the Property remain idle after the Sealant Plan is shut down. The purchase price, the Debtors point out, exceed the fair market value of the Property and would be beneficial to their estates. 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. (W.R. Grace Bankruptcy News, Issue No. 169; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). W.R. GRACE: Reports Results for 3rd Quarter ended September 30 --------------------------------------------------------------- W. R. Grace & Co. reported its financial results for the third quarter ended Sept. 30, 2008. Highlights are: * Sales for the third quarter were $889.4 million compared with $783.1 million in the prior year quarter, a 13.6% increase (9.0% before the effects of currency translation). The sales increase was attributable primarily to higher selling prices in response to rising raw materials costs in both operating segments and favorable currency translation. Price increases yielded approximately $50 million in the third quarter, increasing sales by 6.4% over the prior year quarter. Sales were up 13.4% in North America, 4.4% in Europe Africa, 36.1% in Asia Pacific and 18.8% in Latin America. * Net income for the third quarter was $28.3 million, or $0.39 per diluted share, compared with net income of $19.1 million, or $0.27 per diluted share, in the prior year quarter. The 2008 and 2007 results were negatively affected by Chapter 11 expenses, litigation and other matters not related to core operations. Excluding Chapter 11 expenses, the loss on noncore activities, and their tax effects, net income would have been $46.9 million for the third quarter of 2008 compared with $40.5 million calculated on the same basis for the prior year quarter, a 15.8% increase. * Pre-tax income from core operations was $82.4 million in the third quarter compared with $78.0 million in the prior year quarter, a 5.6% increase. Inflation on raw materials and energy costs totaled approximately $50 million in the third quarter, increasing costs approximately 18% when compared with the prior year quarter. * Sales for the nine months ended Sept. 30, 2008, were $2,548.6 million compared with $2,311.5 million for the comparable prior year period, a 10.3% increase (5.1% before the effects of currency translation). Net income for the nine months ended Sept. 30, 2008, was $78.1 million, or $1.07 per diluted share, compared with $51.6 million, or $0.72 per diluted share for the comparable prior year period. Excluding Chapter 11 expenses, the loss on noncore activities, and their tax effects, net income would have been $142.4 million for the nine months ended Sept. 30, 2008, compared with $123.8 million calculated on the same basis for the comparable prior year period, a 15.0% increase. Pre-tax income from core operations was $252.3 million for the nine months ended Sept. 30, 2008, up 4.1% from the comparable prior year period. Price increases totaled approximately $100 million in the nine months ended Sept. 30, 2008, increasing sales approximately 4.3% when compared with the comparable prior year period. Inflation on raw materials and energy costs totaled approximately $110 million in the nine months ended Sept. 30, 2008, increasing costs approximately 13% when compared with the comparable prior year period. * During the third quarter of 2008, Grace changed its accounting policy for inventories in the U.S. from LIFO to FIFO in order to provide a consistent, global inventory accounting standard. Grace has applied the change retrospectively and restated all periods presented in this press release. "We delivered good results in a tough economic environment," said Fred Festa, Grace's chairman, president and chief executive officer. "We have made significant progress improving prices in response to unprecedented increases in raw material costs. We are focused on executing our strategic plans and expect our diverse business and geographic position, and our integrated operating company approach, to enable us to continue delivering value to our customers in a period of increased volatility." Core Operations Grace Davison Third quarter sales for the Grace Davison operating segment, which includes specialty catalysts and materials used in a wide range of industrial applications, were $579.7 million, up 17.9% from the prior year quarter. Sales of this operating segment are reported by product group as follows: * Refining Technologies sales of catalysts and chemical additives used by petroleum refineries were $305.3 million in the third quarter, up 33.4% from the prior year quarter. Third quarter sales in the product group were favorably affected by strong order patterns for hydroprocessing catalysts, price increases in fluid cracking and hydroprocessing catalysts, and by favorable foreign currency translation. * Materials Technologies sales of engineered materials, coatings and sealants used in numerous industrial, consumer and packaging applications were $183.4 million in the third quarter, up 8.1% from the prior year quarter. Third quarter sales in the product group were favorably affected by foreign currency translation and pricing actions taken to offset inflation. Volumes in this product group were down from the prior year quarter due to lower customer demand, primarily in Europe. * Specialty Technologies sales of highly specialized catalysts and materials used in unique or proprietary applications and markets were $91.0 million in the third quarter, down 2.2% from the prior year quarter and up 1.2% after excluding prior year sales of a product line divested in 2007. Sales in the product group were unfavorably affected by Hurricane Ike, and by lower demand in Europe, the Middle East, and Asia. Pre-tax operating income of Grace Davison for the third quarter was $62.2 million compared with $60.9 million in the prior year quarter, a 2.1% increase. Pricing actions initiated early in the quarter across all product groups began yielding significant benefits by the end of the quarter. However, pre-tax operating income for the third quarter was negatively affected by continued high raw material cost inflation, lost sales and higher production costs due to Hurricanes Gustav and Ike, and isolated product-specific operational issues which were resolved in the quarter. Operating margin was 10.7% compared with 12.4% in the prior year quarter. Sales of the Grace Davison operating segment for the nine months ended Sept. 30, 2008, were $1,661.6 million, up 12.0% over the comparable prior year period. Pre-tax operating income for the nine months ended Sept. 30, 2008 was $209.8 million, a 5.4% increase over the comparable prior year period, with operating margins at 12.6%, for the nine months ended Sept. 30, 2008 compared with 13.4% for the comparable prior year period. Year-to-date operating results reflect continuing inflationary pressures. Grace Construction Products Third quarter sales for the Grace Construction Products operating segment, which includes specialty chemicals and building materials used in commercial, infrastructure and residential construction, were $309.7 million, up 6.2% from the prior year quarter. Sales in the third quarter were favorably affected by higher selling prices in all major geographic regions and product lines and by foreign currency translation. Sales of this operating segment are reported by geographic region as: * Americas -- sales of products to customers in North, Central and South America were $164.4 million in the third quarter, up 6.1% from the prior year quarter. Third quarter sales of Grace Construction Products in the U.S. were up 1.6% over the prior year period. Lower sales of concrete and cement additives were more than offset by sales of waterproofing products and the impact of pricing actions across all product lines in the U.S. The U.S. commercial construction market slowed during the third quarter. * Europe -- sales of products to customers in Eastern and Western Europe, the Middle East, Africa and India were $106.1 million in the third quarter, up 7.0% from the prior year quarter. Growth in the Middle East and Eastern Europe was offset by weakness in Western Europe, where housing market corrections as well as softness in commercial construction unfavorably affected third quarter sales. * Asia -- sales of products to customers in Asia (excluding India), Pacific Rim countries, Australia and New Zealand were $39.2 million in the third quarter, up 4.5% from the prior year quarter. Pre-tax operating income of Grace Construction Products for the third quarter was $44.9 million compared with $44.3 million for the prior year quarter, a 1.4% increase. Price increases and productivity gains offset the impact of higher raw material costs and decreased volumes. Operating margin in third quarter was 14.5%, compared with 15.2% in the prior year quarter. Sales of the Grace Construction Products operating segment for the nine months ended Sept. 30, 2008 were $887.0 million, up 7.1% over the comparable prior year period. Pre-tax operating income for the nine months ended Sept. 30, 2008 was $114.9 million compared with $117.8 million for the comparable prior year period, a 2.5% decrease, reflecting continued weakness in the U.S. construction market, raw material cost inflation, and second quarter severance costs. Operating margin of 13.0% for the nine months ended Sept. 30, 2008 was down 1.2 percentage points compared with the comparable prior year period. Corporate Operating Costs Corporate costs related to core operations were $24.7 million in the third quarter of 2008 compared with $27.2 million in the prior year quarter, a decrease of 9.2%, primarily due to lower expenses for pensions and other employment-related costs. Year- to-date corporate costs related to core operations were $72.4 million compared with $74.5 million in the first nine months of 2007, a decrease of 2.8%. Pre-Tax Income (Loss) From Noncore Activities Noncore activities (as reflected in the attached Segment Basis Analysis) include events and transactions not directly related to the generation of operating revenue or the support of core operations. The pre-tax loss from noncore activities was $33.9 million in the third quarter of 2008 compared with a loss of $13.3 million in the prior year quarter, and $47.2 million year-to-date 2008 compared with $39.5 million in the first nine months of 2007. The higher year-to-date loss is principally due to changes in foreign currency translation on intercompany loans net of hedge contract gains as well as higher legal costs related to the noncore matters. Interest and Income Taxes Interest expense was $13.1 million for the quarter ended Sept. 30, 2008, compared with $17.3 million for the comparable period in 2007, and $42.8 million year-to-date in 2008 compared with $57.1 million in the first nine months of last year. The change in interest expense is attributable to reductions in the prime rate and reduced interest accruals for certain pre-petition environmental obligations. The annualized weighted average interest rate on pre-petition obligations for the quarter was 4.7%. Income taxes are recorded at a global effective rate of approximately 33% before considering the effects of certain non- deductible Chapter 11 expenses, changes in uncertain tax positions and other discrete adjustments. Income taxes related to foreign jurisdictions are generally paid in cash, while Grace expects taxable income in the United States will be offset by available tax deductions. Chapter 11 Proceedings On April 2, 2001, Grace and 61 of its United States subsidiaries and affiliates, including its primary U.S. operating subsidiary W. R. Grace & Co. Conn., filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") in order to resolve Grace's asbestos-related liabilities. On Sept. 19, 2008, Grace filed a Joint Plan of Reorganization as well as several associated documents, including a disclosure statement, with the Bankruptcy Court. The Official Committee of Asbestos Personal Injury Claimants, the Representative for Future Asbestos Personal Injury Claimants, and the Official Committee of Equity Security Holders are co-proponents of the Plan. The Plan supersedes the plans of reorganization previously filed by Grace and the PI Committee and the PI FCR. The committee representing general unsecured creditors and the Official Committee of Asbestos Property Damage Claimants are not co-proponents of the Plan. The Plan is consistent with the terms of the previously announced asbestos personal injury settlement and requires the establishment of two asbestos trusts under Section 524(g) of the United States Bankruptcy Code to which all present and future asbestos-related claims would be channeled. Bankruptcy Court approval of the disclosure statement is required before votes on the Plan can be solicited. A hearing on the disclosure statement is scheduled to begin on Oct. 27, 2008, and a confirmation hearing is currently scheduled to begin on March 9, 2009. The Plan is subject to the satisfaction of a number of conditions, including the availability of exit financing and the approval of both the Bankruptcy Court and United States District Court for the District of Delaware. Most of Grace's noncore liabilities and contingencies (including asbestos-related litigation, environmental claims and other obligations) are subject to compromise under the Chapter 11 process. Grace has not revised its accounting to reflect the PI Settlement or the filing of the Plan. The resolution of Grace's asbestos-related liabilities and other unresolved claims under the Plan would result in allowable claims that differ from amounts recorded as part of liabilities subject to compromise as of Sept. 30, 2008. Grace expects to adjust its recorded asbestos-related liability as material conditions to the Plan are satisfied. Such adjustments may be material to Grace's consolidated financial position and results of operations. Expenses related to Grace's Chapter 11 proceedings, net of filing entity interest income, were $12.0 million in the third quarter compared with $21.3 million in the prior year quarter. Cash Flow and Liquidity Grace's net cash used for operating activities for the nine months ended Sept. 30, 2008 was $182.0 million compared with net cash provided by operating activities of $65.8 million for the prior year period. The change in net cash flow from operating activities was primarily attributable to a payment of $250 million related to the previously announced settlement of environmental claims relating to Grace's former operations in Libby, Montana. Net cash used for investing activities was $23.9 million for the nine months ended Sept. 30, 2008. At Sept. 30, 2008, Grace had available liquidity of approximately $562.8 million, consisting of $325.2 million in cash and cash equivalents, $35.1 million in short-term investment securities, $30.8 million in net cash value of life insurance policies, approximately $73.3 million of available credit under various non- U.S. credit facilities and approximately $98.4 million of available credit under its $165.0 million debtor-in-possession ("DIP") facility. Grace believes that these sources and amounts of liquidity are sufficient to support its business operations, strategic initiatives and Chapter 11 proceedings until a plan of reorganization is confirmed and Grace emerges from bankruptcy. Grace is exploring sources of new financing of up to $1.5 billion to fund the Plan. W. R. Grace & Co. and Subsidiaries Consolidated Balance Sheets (Unaudited) ================================== Sept. 30 Dec. 31 Amounts in millions 2008 2007 -------------------- -------- ------- ASSETS Current Assets Cash and cash equivalents $325.2 $480.5 Investment securities 35.1 98.3 Cash value of life insurance policies, net of policy loans 30.8 77.1 Trade accounts receivable, net 531.1 500.6 Inventories 431.4 362.9 Deferred income taxes 48.7 37.7 Other current assets 84.9 80.8 ------- -------- Total Current Assets 1487.2 1637.9 Properties and equipment, net 710.1 706.1 Goodwill 122.0 122.3 Cash value of life insurance policies, net 4.3 3.9 Deferred income taxes 723.6 747.5 Asbestos-related insurance 500.0 500.0 Overfunded defined benefit pension plans 64.8 54.1 Other assets 142.2 136.6 -------- -------- Total Assets $3,754.2 $3,908.4 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) Liabilities Not Subject to Compromise Current Liabilities Debt payable within one year $6.1 $4.7 Accounts payable 219.4 191.3 Other current liabilities 292.1 325.1 ------ ------ Total Current Liabilities 517.6 521.1 Debt payable after one year 0.3 0.3 Deferred income taxes 33.3 32.7 Minority interest in consolidated entities 69.7 73.2 Underfunded defined benefit pension plans 173.1 169.1 Unfunded defined benefit pension plans 121.8 137.9 Other liabilities 37.0 46.2 ------ ------ Total Liabilities Not Subject to Compromise 952.8 980.5 Liabilities Subject to Compromise Pre-petition bank debt plus accrued interest 815.2 783 Drawn letters of credit plus accrued interest 30.0 26.9 Income tax contingencies 88.7 89.3 Asbestos-related contingencies 1,700.0 1,700.0 Environmental contingencies 148.1 368.6 Postretirement benefits 151.3 172.7 Other liabilities and accrued interest 116.7 137 ------ ------ Total Liabilities Subject to Compromise 3,050.0 3,277.5 Total Liabilities 4,002.8 4,258.0 Shareholders' Equity (Deficit) Common stock 0.8 0.8 Paid-in capital 434.9 431.5 Accumulated deficit (290.0) (368.1) Treasury stock, at cost (57.4) (63.7) Accumulated other comprehensive income (loss) (336.9) (350.1) ------ ------ Total Shareholders' Equity (Deficit) (248.6) (349.6) Total Liabilities and Shareholders' Equity (Deficit) $3,754.2 $3,908.4 ======== ======== W. R. Grace & Co. and Subsidiaries Consolidated Statements of Operations Three Months Ended (Unaudited) September 30, ===================================== ================== Amounts in millions 2008 2007 ------------------- ---- ---- Net sales $889.4 $783.1 Cost of goods sold 633.4 532.6 Selling, general and administrative expenses 150.8 150.6 Research and development expenses 20.5 20.4 Defined benefit pension expense 14.1 13.1 Interest expense and related financing costs 13.1 17.3 Provision for environmental remediation 2.9 - Provision for asbestos-related litigation, net of insurance - - Chapter 11 expenses, net of interest income 12.0 21.3 Other (income) expense, net 14.5 (4.9) ------ ------ 861.3 750.4 Income before income taxes and minority interest 28.1 32.7 Provision for income taxes 4.2 (8.6) Minority interest in consolidated entities (4.0) (5.0) ------ ------ Net income $28.3 $19.1 ====== ====== W.R. Grace & Co. and Subsidiaries Consolidated Statements of Cash Nine Months Ended (Unaudited) September 30 ================================= ================= Amounts in millions 2008 2007 ------------------- ---- ---- OPERATING ACTIVITIES Net income $78.1 $51.6 Reconciliation to net cash provided by (used for) operating activities: Depreciation and amortization 90.8 83.5 Chapter 11 expenses, net of interest income 48.4 62.7 Provision for income taxes 38.9 36.7 Income taxes paid, net of refunds (39.1) (35.8) Minority interest in consolidated entities 11.4 18.8 Dividends paid to minority partners (13.3) (12.0) Interest accrued on pre-petition debt subject to compromise 38.8 56.2 Net (gain) loss on sales of investments and disposals of assets 0.3 (2.8) Defined benefit pension expense 42.4 38.9 Payments under defined benefit pension plans (57.4) (85.5) Net payments under postretirement benefit plans (4.7) (4.6) Net income from life insurance policies (2.0) (3.0) Provision for uncollectible receivables 0.8 (0.4) Provision for environmental remediation 8.8 12 Expenditures for environmental remediation (3.7) (7.1) Expenditures for retained obligations of divested businesses (0.1) (0.8) Changes in assets and liabilities, excluding effect of foreign currency translation: Working capital items (75.8) (69.1) Other accruals and non-cash items (40.1) (7.3) ------ ------ Net cash provided by operating activities before Chapter 11 expenses and settlements 122.5 132.0 Cash paid to resolve contingencies subject to Chapter 11 (251.6) (10.3) Chapter 11 expenses paid (52.9) (55.9) ------ ------ Net cash provided by (used for) operating activities (182.0) 65.8 INVESTING ACTIVITIES Capital expenditures (93.1) (89.8) Investments in short-term debt securities - (25) Proceeds from sales of investment securities 61.5 - Cash proceeds from sale of business - 21.8 Purchase of equity investment (3.0) (6.3) Businesses acquired, net of cash acquired - (5.5) Proceeds from termination of life insurance policies 8.1 - Net investment in life insurance policies (0.2) (1.2) Proceeds from disposals of assets 2.8 5.5 ------ ------ Net cash (used for) investing activities (23.9) (100.5) FINANCING ACTIVITIES Proceeds from life insurance policy loans 40.0 (0.1) Net (repayments) borrowings under credit Arrangements 1.5 0.7 Fees paid under DIP credit facility (1.6) (2.0) Proceeds from exercise of stock options 9.6 20.2 ------ ------ Net cash provided by financing activities 49.5 18.8 Effect of currency exchange rate changes on cash and cash equivalents 1.1 14.6 Decrease) in cash and cash equivalents (155.3) (1.3) Cash and cash equivalents, beginning of period 480.5 536.3 Cash and cash equivalents, end of period $325.2 $535.0 ====== ====== 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. (W.R. Grace Bankruptcy News, Issue No. 169; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). WESTMORELAND COAL: Creates Unit to Realize Tax Credits ------------------------------------------------------ Westmoreland Coal Company disclosed in a Securities and Exchange Commission filing that on Oct. 16, 2008, Westmoreland Resources, Inc., or WRI, a subsidiary of the company, entered into a series of transactions in order to enable it to take advantage of available tax credits which it has not been able to fully utilize. Entering into a transaction with a party which can utilize these credits could enable WRI, subject to certain conditions, to monetize the Credits and increase WRI's cash flows. The Credits are provided under Section 45(e) of the Internal Revenue Code to producers of Indian coal from facilities placed in-service by Jan. 1, 2009, if such coal is sold to unrelated parties. WRI's Absaloka Mine operates under a coal mineral lease with the Crow Tribe of Indians in Montana. The Credit is equal to $1.50 per ton during the period 2006-2009 and $2.00 per ton during 2010-2012, as adjusted for inflation. Credits earned in 2006 to 2009 can be applied against alternate minimum tax, or AMT, and/or regular income tax. Credits earned in 2010 to 2012 can be applied against only regular income tax. Westmoreland anticipates that it will not be able to fully utilize all of the Credits available to it, absent the transactions described herein. In an effort to realize the value of the Credits, WRI created a new subsidiary, Absaloka Coal, LLC, or LLC, and on Oct. 16, 2008, sold a membership interest in the LLC to a large East Coast financial institution. The Company projects, based on its current forecasts of the Absaloka Mine's coal sales, that the series of transactions described herein could increase WRI's income and cash flows before taxes over the period October 2008 through Dec. 31, 2012 by as much as $37 million. On Oct. 16, 2008, WRI sold its interest in LLC to an unrelated third party pursuant to a Membership Interest Purchase Agreement for consideration consisting of $4 million in cash and two promissory notes, or Notes. At closing, WRI received $2 million of the cash, and the remaining $2 million of the cash was, and all payments to be received on the Notes will be, paid into escrow pending receipt, prior to April 1, 2009, of (i) a private letter ruling, or PLR, from the Internal Revenue Service, or IRS, on various issues relating to the Credits and (ii) final approval from the BIA of a lease from the Crow Tribe to WRI. If by April 1, 2009 a favorable PLR is received in a form acceptable to WRI and Investor and the lease is approved, the funds in escrow will be paid to WRI and the transaction will go forward. If a favorable PLR and lease approval are not received by April 1, 2009, the funds in escrow will be returned to Investor, along with the original $2 million paid at closing, and the transaction will not go forward. The ruling presents unique considerations for the IRS and there is no assurance as to whether a ruling will be received or, if received, will be in a form that is acceptable to WRI and the Investor. About Westmoreland Coal Company Headquartered in Colorado Springs, Colorado, Westmoreland Coal Company (AMEX: WLB) -- http://www.westmoreland.com/-- is an independent coal company in the United States. The company mines coal, which is used to produce electric power, and the company owns power-generating plants. The company's coal operations include coal mining in the Powder River Basin in Montana and lignite mining operations in Montana, North Dakota and Texas. Its current power operations include ownership and operation of the two-unit ROVA coal-fired power plant in North Carolina. At June 30, 2008, the company's consolidated balance sheet showed $795.7 million in total assets and $988.0 million in total liabilities, resulting in a $192.3 million stockholders' deficit. Net loss was $17.9 million for the quarter ended June 30, 2008, compared to a net loss of $10.9 million for the quarter ended June 30, 2007. Results were negatively impacted during second quarter of 2008 by a $3.8 million loss on extinguishment of debt. The second quarter of 2007 was negatively impacted by a $2.3 million restructuring charge. WORLDSPACE INC: Nasdaq to Suspend Trading of Stocks on Oct. 30 -------------------------------------------------------------- WorldSpace(R), Inc. received notice from the staff of The Nasdaq Stock Market, LLC that the company will be delisted. Under Marketplace Rules 4300, 4340(b), 4450(f) and IM-4300, the Nasdaq staff has discretionary authority over the continued inclusion of the company's securities on Nasdaq in the event that a Nasdaq- traded company files for protection under any provision of the federal bankruptcy laws. On Oct. 17, 2008, WorldSpace, Inc., and its U.S. subsidiaries WorldSpace Systems Corporation and AfriSpace, Inc., filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court in Delaware. In its letter to the company, The Nasdaq Stock Market staff also cited the company as non-compliant with Marketplace Rule 4450(b)(1)(A) because the company's market value of listed securities for 10 consecutive trading days had fallen been below the minimum $50,000,000 requirement for continued inclusion; and with Marketplace Rule 4450(b)(1)(B)'s requirement that total assets and total revenue meet or exceed $50,000,000 each for the most recently completed fiscal year or two of the last three most recently completed fiscal years. The company does not intend to appeal The Nasdaq Stock Market staff's determination. It is therefore expected that common stock trading will be suspended at the opening of business on Oct. 30, 2008, and a Form 25-NSE will be filed by Nasdaq with the Securities and Exchange Commission which will remove the company's securities from listing and registration on The Nasdaq Stock Market. About WorldSpace, Inc. WorldSpace, Inc. (WSI) -- http://www.1worldspace.com/-- was organized on July 29, 1990, and incorporated in the State of Maryland on Nov. 5, 1990. WorldSpace, Inc. and subsidiaries is engaged in the design, development, construction, deployment and financing of a satellite-based radio and data broadcasting service, which serve areas of the world where traditional broadcast media or internet services are limited. The company, which operates in 10 countries, has one satellite in orbit over Africa, another over Asia and a completed third satellite currently in storage. This satellite, which can be used to replace either of the company's two operational satellites may also be modified and launched to provide DARS in Western Europe. The Debtor and two of its affiliates filed for Chapter 11 bankruptcy protection on Oct. 17, 2008 (Bankr. D.Del., Case No. 08-12412 - 08-12414). Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, and Shearman & Sterling LLP, are the Debtors' counsel. When the Debtors filed for bankruptcy, they listed total assets of $307,382,000 and total debts of $2,122,904,000. * U.S. Retail Sector Bracing for Grim Holiday Season, S&P Says -------------------------------------------------------------- The end of 2008 is shaping up to be the most difficult holiday season in memory for U.S. retailers. Faced with a torrent of challenges, including a horrible housing market, rising unemployment, falling consumer spending, declining consumer confidence, extraordinary stock market volatility, and uncertainty in the financial markets, the domestic retail industry is back on its heels, according to a new report by Standard & Poor's Ratings Services titled "The 2008 Holiday Season: No Diamonds In The Stocking," published earlier on RatingsDirect. "We think that the final quarter of 2008 will be a poor one as consumers continue to rein in their shopping," said Standard & Poor's credit analyst Gerald A. Hirschberg, "and that they will continue their long-standing history of waiting for last-minute bargains during the holiday." With this as a background and the evidence of steadily declining same-store sales throughout the retail sector, S&P is predicting that November-December GAFO sales will at best be flat with last year's $255 billion. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Oct. 30 & 31, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Physicians Agreements and Ventures Contact: 800-726-2524; 903-595-3800; www.renaissanceamerican.com Oct. 31, 2008 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium Hilton, Frankfurt, Germany Contact: 1-703-739-0800; http://www.abiworld.org/ Nov. 6, 2008 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast Coach House Diner & Restaurant, Hackensack, New Jersey Contact: 908-575-7333 or www.turnaround.org Nov. 11, 2008 AMERICAN BANKRUPTCY INSTITUTE Detroit Consumer Bankruptcy Conference Marriott, Troy, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ Nov. 13, 2008 TURNAROUND MANAGEMENT ASSOCIATION Turnaround Case Study Summit Club, Birmingham, Alabama Contact: www.turnaround.org Nov. 13, 2008 TURNAROUND MANAGEMENT ASSOCIATION Effective Turnarounds:A View From Workout Consultants TBA, Buffalo, New York Contact: www.turnaround.org Nov. 13, 2008 TURNAROUND MANAGEMENT ASSOCIATION LI-TMA Social TBD, Melville, New York Contact: 631-251-6296 or www.turnaround.org Nov. 13, 2008 TURNAROUND MANAGEMENT ASSOCIATION Dinner Meeting TBD, Calgary, Alberta Contact: 503-768-4299 or www.turnaround.org Nov. 17-18, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Distressed Investing Contact: 800-726-2524; 903-595-3800; www.renaissanceamerican.com Nov. 19, 2008 TURNAROUND MANAGEMENT ASSOCIATION Special Program Tournament Players Club at Jasna Polana, New Jersey Contact: 908-575-7333 or www.turnaround.org Nov. 19, 2008 TURNAROUND MANAGEMENT ASSOCIATION Interaction Between Professionals in a Restructuring/Bankruptcy Bankers Club, Miami, Florida Contact: 312-578-6900; http://www.turnaround.org/ Nov. 20, 2008 TURNAROUND MANAGEMENT ASSOCIATION Senior Housing & Long Term Care Washington Athletic Club,Seattle, Washington Contact: www.turnaround.org Nov. 27, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Arizona Chapter Meeting - Chris Kaup TBD, Phoenix, Arizona Contact: www.turnaround.org Dec. 3, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday Party McCormick & Schmick's, Las Vegas, Nevada Contact: 702-952-2480 or www.turnaround.org Dec. 3, 2008 TURNAROUND MANAGEMENT ASSOCIATION Christmas Function Terminal City Club, Vancouver, British Columbia Contact: 503-768-4299 or www.turnaround.org Dec. 3-5, 2008 AMERICAN BANKRUPTCY INSTITUTE 20th Annual Winter Leadership Conference Westin La Paloma Resort & Spa Tucson, Arizona Contact: http://www.abiworld.org/ Dec. 8, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday Gathering TBD, Long Island, New York Contact: 631-251-6296 or www.turnaround.org Dec. 9, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday MIxer Washington Athletic Club, Seattle, Washington Contact: 503-768-4299 or www.turnaround.org Dec. 11, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday MIxer University Club, Portland, Oregon Contact: 503-768-4299 or www.turnaround.org Dec. 18, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday MIxer TBD, Phoenix, Arizona Contact: 623-581-3597 or www.turnaround.org Dec. 31, 2008 TURNAROUND MANAGEMENT ASSOCIATION Sponsorships - Annual Golf Outing, Various Events TBA, New Jersey Contact: 908-575-7333 or www.turnaround.org Jan. 21-22, 2009 TURNAROUND MANAGEMENT ASSOCIATION Corporate Governance Meetings Bellagio, Las Vegas, Nevada Contact: www.turnaround.org Jan. 22-23, 2009 TURNAROUND MANAGEMENT ASSOCIATION Distressed Investing Conference Bellagio, Las Vegas, Nevada Contact: www.turnaround.org Jan. 22-23, 2009 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Westin Tabor Center, Denver, Colorado Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 5-7, 2009 AMERICAN BANKRUPTCY INSTITUTE Caribbean Insolvency Symposium Westin Casurina, Grand Cayman Island, AL Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 25-27, 2009 AMERICAN BANKRUPTCY INSTITUTE Valcon Four Seasons, Las Vegas, Nevada Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 13, 2009 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West Beverly Wilshire, Beverly Hills, California Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 17-18, 2009 NATIONAL ASSOCIATION OFBANKRUPTCY TRUSTEES NABT Spring Seminar The Peabody, Orlando, Florida Contact: http://www.nabt.com/ Apr. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE Consumer Bankruptcy Conference John Adams Courthouse, Boston, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 27-28, 2009 TURNAROUND MANAGEMENT ASSOCIATION Corporate Governance Meetings Intercontinental Hotel, Chicago, Illinois Contact: www.turnaround.org Apr. 28-30, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Intercontinental Hotel, Chicago, Illinois Contact: www.turnaround.org May 7-10, 2009 AMERICAN BANKRUPTCY INSTITUTE 27th Annual Spring Meeting Gaylord National Resort & Convention Center National Harbor, Maryland Contact: http://www.abiworld.org/ May 14-16, 2009 ALI-ABA Chapter 11 Business Reorganizations Langham Hotel, Boston, Massachusetts Contact: http://www.ali-aba.org June 11-13, 2009 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ June 21-24, 2009 INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY & BANKRUPTCY PROFESSIONALS 8th International World Congress TBA Contact: http://www.insol.org/ July 16-19, 2009 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Mt. Washington Inn Bretton Woods, New Hampshire Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 15-18, 2010 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 17-20, 2010 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 7-10, 2010 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Ocean Edge Resort, Brewster, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 5-7, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ BEARD AUDIO CONFERENCES 2006 BACPA Library Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES BAPCPA One Year On: Lessons Learned and Outlook Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Calpine's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Carve-Out Agreements for Unsecured Creditors Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changes to Cross-Border Insolvencies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changing Roles & Responsibilities of Creditors' Committees Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Chinas New Enterprise Bankruptcy Law Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Clash of the Titans -- Bankruptcy vs. IP Rights Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Coming Changes in Small Business Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Corporate Bankruptcy Bootcamp: A Nuts & Bolts Primer for Navigating the Restructuring Process Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Dana's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Deepening Insolvency Widening Controversy: Current Risks, Latest Decisions Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Diagnosing Problems in Troubled Companies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Claims Trading Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Market Opportunities Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Real Estate under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Employee Benefits and Executive Compensation under the New Code Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Equitable Subordination and Recharacterization Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Examining the Examiners: Pros and Cons of Using Examiners in Chapter 11 Proceedings Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Fundamentals of Corporate Bankruptcy and Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Handling Complex Chapter 11 Restructuring Issues Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Healthcare Bankruptcy Reforms Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Homestead Exemptions under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Hospitals in Crisis: The Insolvency Crisis Plaguing Hospitals Across the U.S. Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES IP Rights In Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES KERPs and Bonuses under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES New 'Red Flag' Identity Theft Rules Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Non-Traditional Lenders and the Impact of Loan-to-Own Strategies on the Restructuring Process Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Partnerships in Bankruptcy: Unwinding The Deal Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Privacy Rights, Protections & Pitfalls in Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Real Estate Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Reverse Mergersthe New IPO? Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Second Lien Financings and Intercreditor Agreements Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Surviving the Digital Deluge: Best Practices in E-Discovery and Records Management for Bankruptcy Practitioners and Litigators Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Technology as a Competitive Advantage For Todays Legal Processes Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Battle of Green & Red: Effect of Bankruptcy on Obligations to Clean Up Contaminated Property Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Subprime Sector Meltdown: Legal Developments and Latest Opportunities Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Twenty-Day Claims Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Using Virtual Data Rooms to Expedite Corporate Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Using Virtual Data Rooms to Expedite M&A and Insolvency Proceedings Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Validating Distressed Security Portfolios: Year-End Price Validation and Risk Assessment Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES When Tenants File -- A Landlord's BAPCPA Survival Guide Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ * * * Featured Conferences Renaissance American Management and Beard Conferences presents Oct. 30-31, 2008 Physician Agreements & Ventures The Millennium Knickerbocker Hotel - Chicago Brochure will be available soon! Nov. 17-18, 2008 Distressed Investing The Helmsley Park Lane - New York Brochure will be available soon! * * * Beard Audio Conferences presents Bankruptcy and Restructuring Audio Conference CDs More information and list of available titles at: http://beardaudioconferences.com/bin/topics?category_id=BAR * * * The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, Joseph Medel C. Martirez, Carlo Fernandez, 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 ***