/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/081215.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, December 15, 2008, Vol. 12, No. 298 Headlines ABACUS 2005-1: S&P Ratings on 3 Classes of Notes Tumble to 'D' AEROFLEX INCORPORATED: Moody's Affirms B3 Corporate Family Rating ALITALIA SPA: CAI Buys Smaller Rival Air One, Reuters Says ALLTEL CORPORATION: Posts $250MM Net Lost in the Last Nine Months ALLTEL CORP: Terminates Registration of 6 Class of Securities AMERICAN AXLE: Fitch Puts Issuer Default Rating on WatchNeg. AMERICAN AXLE & MANUFACTURING: Fitch Puts IDR on WatchNeg. AMERICAN INT'L: Will Meet With Bankers on Asian Assets Sale ARVINMERITOR: Fitch Puts Issuer Default Rating on WatchNeg. ASCOTT DISTRIBUTORS: Case Summary & 20 Largest Unsec. Creditors AVANI INT'L: Posts $150,323 Net Loss in the Last Nine Months AVANTE SALON: Voluntary Chapter 11 Case Summary B MOSS CLOTHING: Court Approves Going-Out-Of-Business Sales BCE INC: $41BB Buyout Collapses as Buyers Terminate Deal BERNARD L. MADOFF: SEC Sues Firm for Multi-Billion Ponzi Scheme BERNARD L. MADOFF: District Court Appoints Receiver; TRO Entered BOISE INC: S&P Keeps 'BB-' Corp. Credit Rating; Outlook Negative BOLTHOUSE FARMS: Moody's Changes Probability Default Rating to B3 BYSYNERGY LLC: Files Amended Chapter 11 Plan of Reorganization CADENCE INNOVATION: Gets Nod to Implement Employee Plans CADENCE INNOVATION: Files Schedules Of Assets And Debts CADENCE INNOVATION: Files Statement of Financial Affairs CADENCE INNOVATION: Seeks to Sell 3 Michigan Plants CADENCE INNOVATION: Wants Extension of Lease Decision Period CALPINE CORP: $64-Million Debt Deal Assigned to Barclays CALPINE CORP: Court OKs Deal With Rosetta on Claim vs. Estate CALPINE CORP: Lays Off More Than 200 Workers at Fremont Plant CALPINE CORP: Taps WestLB for Loans to Expand Deer Park Center CAPITAL AUTO: Fitch Affirms 'BB' Rating on Class D Notes CDX GAS: Files for Chapter 11 Bankruptcy in Texas CDX GAS: Voluntary Chapter 11 Case Summary CHARTER COMMUNICATIONS: Lazard to Start Talks With Bondholders CHARTER COMM: Moody's Cuts Probability-of-Default Rating to Ca CITADEL INVESTMENT: Halts Withdrawal from 2 Largest Hedge Funds CITIGROUP INC: Settles w/ SEC, Buys Back $7 Bil. of Securities CHRYSLER LLC: Auto Aid Rejected by Senate; Access to TARP Mulled COMPTON PETROLEUM: S&P Downgrades Corporate Credit Rating to 'B' COMPTON PETROLEUM FINANCE: S&P Cuts Sr. Unsec. Debt Rating to B- COPIA: May Close Permanently After Court Rejects Plea for Loan CREDIT GENESIS: Moody's Cuts Rating on $23MM Class B Notes to Ba1 DOUGLAS BOOKER: Case Summary & 20 Largest Unsecured Creditors EASTMAN KODAK: S&P Cuts Corp. Credit Rating to 'B'; WatchNeg. EL PASO: Files Amended Chapter 11 Plan and Disclosure Statement EZ LUBE: Can Access Goldman DIP Facility and Cash Collateral EZ LUBE: Court Approves Kurtzman Carson as Claims Agent EZ LUBE: Section 341(a) Meeting Scheduled for January 16, 2009 EZ LUBE: Files Sale Protocol for All Assets; Lead Bidder Named FEDERAL-MOGUL: Bankruptcy Court OKs Settlement w/ Former CEO FIRST UNION: Interest Shortfalls Cue S&P's 'D' Rating on Class L FORD MOTOR: Auto Aid Rejected by Senate; Access to TARP Mulled FORD MOTOR: Fitch Puts Issuer Default Ratings on Negative Watch FOSTER WHEELER: S&P Raises Corporate Credit Rating to 'BB+' GENERAL GROWTH: Citigroup Inc. Holds 5.4% Stake GENERAL GROWTH: Executives Acquire 1.8MM Shares of Common Stock GENERAL GROWTH: In Talks With Lenders to Extend Mortgage Loans GENERAL GROWTH: Morgan Stanley Discloses Ownership of 5.1% Stake GENERAL GROWTH: Pershing Square, et. al. Disclose 7.5% Stake GENERAL MOTORS: Auto Aid Rejected by Senate; Access to TARP Mulled GENERAL MOTORS: E. Kullman Resigns from Board to Focus on DuPont GENERAL MOTORS: May Lose 40% of Dealers If GMAC Goes Bankrupt GLITNIR BANKI: KPMG Halts Probe on Pre-Bankruptcy Operations GMAC LLC: Bankruptcy Would Cause GM to Lose 40% of Dealers GMAC LLC: Delivery Time Extension Won't Affect S&P's Junk Ratings HAVEN TRUST: State Regulator Seizes Bank; BBT to Assume Deposits HAYES-LEMMERZ INT'L: Fitch Puts Issuer Default Rating on WatchNeg. HAYES-LEMMERZ FINANCE: Fitch Puts IDR on Negative Watch HEALTHSOUTH CORP: Court to Consider UBS Settlement on January 12 HLI OPERATING: Fitch Puts Issuer Default Rating on WatchNeg. HORACE MANN: A.M. Best Assigns "bb+" Rating on Subordinated Debt HOSPITALS INSURANCE: A.M Best Cuts FSR to "C-" & ICR to "cc" JOHNSON CONTROLS: Fitch Puts Issuer Default Rating on WatchNeg. KINETEK HOLDINGS: S&P Cuts Corp. Credit Rating to B-; Outlook Neg. L&M STRATEGIC INVESTMENTS: Voluntary Chapter 11 Case Summary LB-UBS COMMERCIAL: S&P Keeps Low-B Ratings on 6 Classes of Certs. LB-UBS COMMERCIAL: S&P Junks Ratings on Class K & L Certificates LEVEL 3 COMMUNICATIONS: Convertible Notes Offering to Expire Today LEVITT AND SONS: Court Approves Unit's Sale of Laurel Canyon LEVITT AND SONS: Gets Plan Support from Committees; BofA Balks LEVITT AND SONS: Regency's Auction Protocol for Hartwood Okayed LEVITT AND SONS: Wachovia Wants Plan Exclusivity Terminated LEXINGTON PRECISION: Explains Terms of Reorganization Plan LEXINGTON PRECISION: Files Second Amended Plan of Reorganization LIBERTY MEDIA: S&P Affirms 'BB+' Ratings on 4 Certificates MECACHROME INTERNATIONAL: Obtains Court Protection to Restructure MEDIANEWS GROUP: Moody's Downgrades Ratings; Outlook Negative MEDICAL SAVINGS: A.M. Best Cuts Financial Strength Rating to "E" MEGA BRANDS: Moody's Lowers Corporate Family Rating to Caa2 MILLENIUM INORGANIC: S&P Raises Corporate Credit Ratings to 'B-' MORGAN STANLEY: S&P Ups Ratings on 2008-7 Notes to AAA From BB MORGAN STANLEY: Senior Banker Robert Scully Will Leave Firm N. CAROLINA MUTUAL: A.M. Best Holds "B" Financial Strength Rating NEIMAN MARCUS: S&P Cuts Corp. Credit Rating to 'B+'; Outlook Neg. NEWPORT TELEVISION: S&P Cuts Senior Unsecured Debt Rating to 'CCC' NEWSWEEK: Will Lay Off Employees & May & Cut Focus on Print NTELOS HOLDINGS: S&P Keeps BB- Corp. Credit Rating; Outlook Pos. PIERRE FOODS: Emerges from Bankruptcy, Secures $95MM Exit Facility PMA CAPITAL: A.M. Best Downgrades FSR to "C" & ICR to "b" PRECISION PARTS: Financial & Economic Woes Cue Chapter 11 Filing PRECISION PARTS: Case Summary & 30 Largest Unsecured Creditors PRUDENTIAL STRUCTURED: S&P Cuts Ratings on B-1 & B-1L Notes to CC PTA REINSURANCE: A.M. Best Assigns "B" Financial Strength Rating QPC LASERS: Discloses $0.0021 Default Reset Price at December 1 RELIANT ENERGY: Emerges from Bankruptcy, Chapter 11 Plan Effective RENFRO CORP: S&P Places 'B' Corp. Credit Rating on Negative Watch RESIDENTIAL CAPITAL: S&P Junk Ratings Unaffected by GMAC Setback RFMSI 2006-SA4: S&P Cuts Ratings on Class M-2 & M-3 Certs. to CC SACRAMENTO YACHT: Files for Chapter 11 Protection SAGEMARK COMPANIES: Appoints New CEO and Director, Settles Debt SAGEMARK COMPANIES: Judgement on LaVilla Case May Cue Bankruptcy SANDERSON STATE: Tex. Regulators Close Bank & FDIC Named Receiver SEACOR HOLDINGS: Moody's Affirms 'Ba1' Corporate Family Rating SGS INTERNATIONAL: Moody's Affirms 'B2' Corporate Family Rating SGS INV: S&P Junks Ratings on Classes C and D Notes SYSCAN INT'L: Wants Trustee Under Bankruptcy and Insolvency Act TENNECO: Fitch Puts Issuer Default Rating on Negative Watch TRIBUNE CO: Bankruptcy Invokes Default In Credit Facilities TRIBUNE CO: Bankruptcy Signals Distress for Media Buy-Outs TRIBUNE CO: Gets Interim Approval for $125MM Barclays Financing TRIBUNE CO: To Pay Pre-Bankruptcy Dues to Customers TROPICANA INN: Files Chapter 11 Plan of Reorganization TRW AUTOMOTIVE: Fitch Puts Issuer Default Rating on WatchNeg. TRW AUTOMOTIVE HOLDINGS: Fitch Puts IDR on Negative Watch TUBE CITY: Moody's Places 'B1' CFR Under Review for Likely Cut TWEETER OPCO: Court Appoints George L. Miller as Ch. 7 Trustee TWEETER OPCO: Closes Stores; Trustee Seeks Clearance Sales TWEETER OPCO: Ch. 7 Trustee Seeks to Retain Dilworth as Counsel UNIFUND ASSURANCE: A.M. Best Upgrades FSR to "B" from "C+" UNIVERSAL AMERICAN: A.M. Best Affirms "bb" Issuer Default Rating VISTEON CORP: Fitch Puts Issuer Default Rating on WatchNeg. YORK INT'L: Fitch Puts Issuer Default Rating on WatchNeg. * A.M. Best Comments on U.S. Treasury's Capital Purchase Program * A.M. Best: Pressure Mounting on Canadian Life Insurance Market * A.M. Best Says D&O Market Braces for Steep Downturn * Fitch Says U.S. Oil & Gas Credit Metrics to Fall in 2009 * Moody's Downgrades Ratings on 164 Notes by CDO Transactions * Timothy Pohl Will Leave Skadden for Lazard * BOND PRICING: For the Week of Dec. 8 - Dec. 12, 2008 ********* ABACUS 2005-1: S&P Ratings on 3 Classes of Notes Tumble to 'D' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on all classes issued by ABACUS 2005-1 CB1 Ltd. The lowered ratings follow a number of recent credit events within the underlying portfolio, which have caused the class F and G notes to incur complete principal write-downs and the class E-2 notes to incur a partial principal loss. S&P lowered the ratings on the remaining classes due to the decreased subordination available to support the notes. Ratings Lowered ABACUS 2005-1 CB1 Ltd. Rating ------ Class To From ----- -- ---- A-1 BBB+ A+ A-2 BBB- BBB+ B BB BBB- C CCC+ BB D CCC- BB- E-1 CCC- B E-2 D CCC+ F D CCC- G D CCC- AEROFLEX INCORPORATED: Moody's Affirms B3 Corporate Family Rating ----------------------------------------------------------------- Moody's Investors Service affirmed the debt ratings of Aeroflex Incorporated, Corporate Family and Probability of Default Ratings at B3 and the Speculative Grade Liquidity rating at SGL-2. The rating outlook is positive. The affirmation reflects the company's solid revenue growth and EBITDA expansion since the consummation of the August 2007 LBO despite the difficult demand environment for semiconductors and test and measurement products due to the economic downturn. Aeroflex demonstrated good top-line revenue growth via expanded R&D investments and targeted product development that enabled the company to move up the value chain and make good progress towards broadening the applications for existing technologies to expand into new end markets. In fiscal 2008, the company achieved good customer uptake for new products in the wireless, test and medical market verticals. The affirmation also considers the modest improvement in leverage (as measured by debt to EBITDA) to 6.9x, good free cash flow generation and the expectation that leverage metrics will continue to improve due to continued EBITDA growth and positive FCF generation applied to debt reduction. The outlook is positive reflecting Aeroflex's exposure to the less cyclical aerospace & defense (government) sector, well-diversified product portfolio in which Aeroflex is the only (or principal) supplier and a rich portfolio of new products expected to ramp and contribute to revenues in 2009. Though Aeroflex's recent operating performance metrics suggest a B2 rating, the rating agency expects sluggish demand from wireless and networking commercial customers will impact the company's revenues over the next several quarters. How the company manages its operating performance during the economic downturn over the next 6 -- 9 months will be an important factor in Moody's analysis for a potential ratings upgrade. The B3 corporate family rating continues to reflect the company's: (i) high financial leverage and thin credit protection measures; (ii) modest footprint and limited asset protection from a small base of pro forma tangible assets; (iii) potentially increasing competition longer-term from larger and well-capitalized companies; (iv) exposure to weakening wireless end markets; and (v) exposure to aerospace and defense electronics end markets, which are currently experiencing strong demand but could experience changes in procurement policies or the types of products sourced by the government. The rating also takes into account Moody's hybrid security treatment for the $378 million of sponsor preferred-like member interests in which 25% of the equity is treated as debt-like and 75% is treated as equity-like. As such, Moody's adjustments incorporate the commensurate increase in debt, equity and interest expense on Aeroflex's balance sheet and income statement. The B3 CFR also considers Aeroflex's leading market position as the primary or sole source provider in niche markets, strong intellectual property portfolio with proprietary technology, highly visible and diversified revenue base with no specific defense platform exposure, relatively stable competitive landscape, mission-critical nature of its products with high switching costs resulting in stable gross margins approaching 50% (Moody's adjusted) and consistent operating profitability and positive free cash flow generation. The rating considers Moody's expectation that Aeroflex's operating performance will continue to benefit from a broadening of applications from existing technologies, the secular outsourcing trend from primary contractors and increasing dollar content as the company moves up the value chain in the satellite and medical platforms. Despite relatively higher leverage (due to the LBO), the B3 CFR also reflects the company's solid EBITDA margins, EBITDA less capex/interest expense and FCF/debt measures, which are better than its B3-rated peers and compensates for its higher leverage. The SGL-2 rating reflects Aeroflex's modest liquidity from internal sources, which consists of $73 million of cash balances and Moody's expectation of $17 million of FCF generation in fiscal 2009. External liquidity is supported by full access to a $50 million first lien revolver. Aeroflex is expected to remain compliant with its financial covenants over the next year. These ratings were affirmed: -- Corporate Family Rating -- B3 -- Probability of Default Rating -- B3 -- $50 Million Senior Secured First Lien Revolver due 2013 -- Ba3 (LGD-2, 21%) -- $400 Million (First-Out) Senior Secured Term Loan due 2014 -- Ba3 (LGD-2, 21%) -- $125 Million (First-Loss) Senior Secured Term Loan due 2014 - B3 (LGD-4, 56%) -- $135 Million Senior Subordinated PIK Loan Facility due 2015 - Caa2 (LGD-6, 94%) -- Speculative Grade Liquidity Rating -- SGL-2 The last rating action was on September 4, 2007 when Moody's affirmed Aeroflex's B3 corporate family rating and positive outlook. Aeroflex's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as: (i) the business risk and competitive position of the company versus others within the industry; (ii) the capital structure and financial risk of the company; (iii) the projected performance of the company over the near-to-intermediate term; and (iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of Aeroflex's core industry and Aeroflex's ratings are believed to be comparable to those of other issuers of similar credit risk. Headquartered in Plainview, New York, Aeroflex is a specialty provider of microelectronics and test and measurement products to the aerospace, defense, wireless, broadband and medical markets. For the twelve month period ended September 2008, revenues (Moody's adjusted) and EBITDA (Moody's adjusted) were $646 million and $148 million, respectively. ALITALIA SPA: CAI Buys Smaller Rival Air One, Reuters Says ---------------------------------------------------------- Reuters reported that Alitalia SpA's smaller rival Air One SpA agreed Thursday last week to sell its operations to Compagnia Aerea Italiana s.r.l., a consortium of Italian investors created to save the national airline. The purchase of Air One is part of CAI's rescue plan for Alitalia. The transaction is expected to close by the end of the year. Meanwhile, Reuters said the process of integrating Alitalia and Air One to create "the new flagship carrier" will begin from Jan. 13. According to Reuters, Air One President Carlo Toto will reinvest EUR60 million in the new airline. About Alitalia Based in Rome, Alitalia S.p.A. -- http://www.alitalia.it/-- provides air travel services for passengers and air transport of cargo on national, international and inter-continental routes, including United States, Canada, Japan and Argentina. The Italian government owns 49.9% of Alitalia. As reported in the TCR-Europe on November 7, 2008, Alitalia S.p.A. filed for Chapter 15 protection with the U.S. Bankruptcy Court in the Southern District of New York. Italy's national airline experienced financial difficulties for a number of years caused, in large measure, by a combination of competition from low-cost air carriers, poor management and onerous union obligations, according to papers filed with the court. Despite a EUR1.4 billion state-backed restructuring in 1997, Alitalia posted net losses of EUR256 million and EUR907 million in 2000 and 2001 respectively. Alitalia posted EUR93 million in net profits in 2002 after a EUR1.4 billion capital injection. The carrier booked annual net losses of EUR520 million in 2003, EUR813 million in 2004, EUR168 million in 2005, EUR625.6 million in 2006, and EUR494.64 million in 2007. In the petition filed October 29, 2008, Prof. Augusto Fantozzi, the appointed administrator, said the airline's financial difficulties have been and exacerbated by spiraling fuel prices. On Aug. 29, 2008, Alitalia declared insolvency and filed for commencement of extraordinary administration procedure at the Tribunal of Rome. Italian Prime Minister Silvio Berlusconi appointed Mr. Fantozzi as extraordinary commissioner. Under the Bankruptcy Bill, the Administrator has supplanted the directors and other management of Alitalia. ALLTEL CORPORATION: Posts $250MM Net Lost in the Last Nine Months ----------------------------------------------------------------- Alltel Corporation reported financial results for three and nine months ended Sept. 30, 2008. The company reported a net loss of $55.2 million for three months ended Sept. 30, 2008, compared to net income of $282.6 million for the same period in the previous year. For the nine months ended Sept. 30, 2008, the company incurred a net loss of $250.0 million compared to net income of $708.4 million for the same period in the previous year. Financial Condition, Liquidity and Capital Resources For the nine months ended Sept. 30, 2008, Alltel's primary source of liquidity was cash provided from operations. Compared to the corresponding period of 2007, the decrease in cash flows from operating activities during the first nine months of 2008 reflected the payment of merger-related expenses and the effects of higher interest costs resulting from the issuance of $21.7 billion of additional long-term debt. Recent distress in the financial markets has had an adverse impact on financial market activities including, among other things, extreme volatility in security prices, severely diminished liquidity and credit availability, rating downgrades of certain investments and declining valuations of others. During the first nine months of 2008, these factors have not had a material adverse effect on the company's financial position, results of operations or liquidity. If the financial markets do not recover by Jan. 1, 2009, the annual valuation date for the determination of the company's pension funding requirements, Alltel may be required to contribute to the plan during the latter half of 2009 in order to meet the minimum funding requirements under the Employee Retirement Income Security Act of 1974, as amended. After the completion of the Merger, Alltel has a substantial amount of indebtedness and will incur significantly higher interest costs which will adversely affect the company's future operating results. Alltel believes it has sufficient cash and short-term investments on hand ($1,297.6 million at Sept. 30, 2008) and will generate adequate operating cash flows to finance its ongoing requirements, including capital expenditures and the payment of principal and interest related to its long-term debt obligations. Additional sources of funding available to Alltel include additional borrowings of up to $1.5 billion available under the company's revolving credit agreement. Pursuant to the terms of the merger agreement with Verizon Wireless, Alltel agreed that between June 5, 2008, and the effective time of the merger, Alltel would not incur any additional indebtedness (including the issuance of any debt security) other than borrowings under the revolving credit agreement made in the ordinary course of business. At Sept. 30, 2008, the company was in compliance with all of its debt covenant. At Sept. 30, 2008, the company's balance sheet showed total assets of $31.5 billion, total liabilities of $27.3 billion and shareholders' equity of about $4.2 billion. A full-text copy of the 10-Q filing is available for free at http://ResearchArchives.com/t/s?361f About Alltel Corp. Headquartered in Little Rock, Arkansas, Alltel Corp. -- http://www.alltel.com/-- operates America's largest wireless network, which delivers voice and advanced data services nationwide to more than 13 million customers. on November 16, 2007, Alltel was acquired by Atlantis Holdings LLC, a Delaware limited liability company and an affiliate of private investment funds TPG Partners V, L.P. an GS Capital Partners VI Fund, L.P. Alltel disclosed plans on June 5, 2008, to be acquired by Verizon Wireless. The deal, which requires regulatory approval, is expected to close by year's end. * * * As reported in the Troubled Company Reporter on Oct. 31, 2008, Moody's Investors Service stated that Alltel Corporation's ratings remain on review for possible upgrade (i)$2.3 billion senior unsecured notes -- Caa1, LGD 6 (95%); (ii) $1.0 billion senior unsecured toggle notes -- Caa1 LGD 5 (79%); (iii) corporate family rating -- B2; and (iv) probability of default rating -- B2. ALLTEL CORP: Terminates Registration of 6 Class of Securities ------------------------------------------------------------- Scott T. Ford, president and chief executive officer of Alltel Corporation, disclosed in a Form 15 filing with the Securities and Exchange Commission that the company has terminated registration of securities under Section 12(g) of the Securities Exchange Act of 1934 and has suspended its duty to File Reports Under Sections 13 and 15(d) of the Securities Exchange Act of 1934. The Class of Securities and the approximate number of holders of record as of the certification or notice date are: Approx. number of Class of Securities holders of record or notice date as of certification ------------------- ------------------- Alltel Corporation 7.00% Senior Unsecured Notes due June 2012 96 Alltel Corporation 6.50% Notes due November 1, 2013 87 Alltel Corporation 7.00% Notes due March 15, 2016 79 Alltel Corporation 6.80% Notes due May 1, 2029 73 Alltel Corporation 7.875% Notes due July 1, 2032 91 Western Wireless LLC 4.625% Convertible Subordinated Notes due 2023 0 A full-text copy of the Form 15 filing is available for free at http://ResearchArchives.com/t/s?361d About Alltel Corp. Headquartered in Little Rock, Arkansas, Alltel Corp. -- http://www.alltel.com/-- operates America's largest wireless network, which delivers voice and advanced data services nationwide to more than 13 million customers. on November 16, 2007, Alltel was acquired by Atlantis Holdings LLC, a Delaware limited liability company and an affiliate of private investment funds TPG Partners V, L.P. an GS Capital Partners VI Fund, L.P. Alltel disclosed plans on June 5, 2008, to be acquired by Verizon Wireless. The deal, which requires regulatory approval, is expected to close by year's end. * * * As reported in the Troubled Company Reporter on Oct. 31, 2008, Moody's Investors Service stated that Alltel Corporation's ratings remain on review for possible upgrade (i)$2.3 billion senior unsecured notes -- Caa1, LGD 6 (95%); (ii) $1.0 billion senior unsecured toggle notes -- Caa1 LGD 5 (79%); (iii) corporate family rating -- B2; and (iv) probability of default rating -- B2. AMERICAN AXLE: Fitch Puts Issuer Default Rating on WatchNeg. ------------------------------------------------------------ Fitch Ratings has placed the Issuer Default Ratings of the U.S. auto suppliers listed below on Rating Watch Negative, based on the impact of a potential bankruptcy filing by General Motors (and Fitch's view that this would be followed by a bankruptcy at Ford). Given its smaller profile, it is unlikely that a bankruptcy filing by Chrysler would have the same impact. Industry bankruptcies could result from either the failure of the auto legislation currently under consideration in the U.S. Congress, or the failure of the Detroit Three to develop viable restructuring plans in the several months prior to the expiration of the bridge loans included in the current legislation. In 2009, auto suppliers are already facing a steep global downturn in auto production, including a deeply depressed production forecast in the U.S. and Europe. In the event of a General Motors bankruptcy, Fitch believes that the resulting contraction in auto production, the supply chain, trade credit and capital-access would cause widespread shutdowns and bankruptcies throughout the supply chain. Given the cliff-risk nature of the risks involved, Fitch has tried to detail below the extent of the potential rating actions that would be taken in the event of a GM bankruptcy. In any event, Fitch will continue to take individual rating actions in the sector as events unfold over the next several weeks and months. Fitch notes that even if the OEMs avoid bankruptcy, major restructurings of their operations will occur, causing material changes in the operations of their Tier I suppliers. These restructurings could also lead to ratings actions, providing further rationale for placing these suppliers on Rating Watch Negative. The auto suppliers placed or remain on Rating Watch Negative and the ratings most likely to result in the event of a GM bankruptcy are: Companies Current IDR/Prospective IDR -- American Axle 'B'/'CC'; -- ArvinMeritor 'B'/CCC'; -- Hayes-Lemmerz 'B'/CCC'; -- Johnson Controls 'A-'/'BBB+'; -- Tenneco 'BB-/B-'; -- TRW 'BB'/'B-'; -- Visteon 'CCC'/'CC' -- Companies not included in the rating actions: -- Cummins 'BBB+'; -- Goodyear 'BB-'; -- Navistar 'BB-' Despite improved diversification by most Tier 1 suppliers, across manufacturers, geographies and product lines, the decline in supplier revenues and operating cash flow through 2009 resulting from a GM bankruptcy would likely produce covenant violations across the vast majority of suppliers. Of equal concern, Tier 2 and three suppliers are likely to experience widespread bankruptcies through loss of volume, lack of receivables financing, and restricted financial and trade credit. Fitch expects that a collapse of trade credit throughout the supply chain would put at risk the domestic operations of these suppliers, as well as their financial viability. TRW and Tenneco remain better positioned given their global operations, but Fitch expects that these two companies, at a minimum, would require renegotiations with their bank group. Ratings on Rating Watch Negative are: American Axle & Manufacturing Holdings, Inc. -- IDR 'B'; American Axle & Manufacturing, Inc -- IDR 'B'; ArvinMeritor -- IDR 'B'; -- Secured 'BB'; -- Senior unsecured 'B/RR4'. Hayes-Lemmerz International, Inc -- IDR 'B'. Hayes-Lemmerz Finance Luxembourg S.A -- IDR 'B'; -- Senior unsecured 'B-/RR5'; -- Senior secured 'BB/RR1'. HLI Operating Company Inc. -- IDR 'B'; -- Senior secured 'BB/RR1'. Johnson Controls -- IDR 'A-'. York International -- IDR 'A-'. Tenneco -- IDR 'BB-'; -- Senior unsecured 'BB-'; -- Subordinated 'B'; -- Senior secured notes 'BB'; -- Senior secured credit facilities 'BB+'. TRW Automotive Holdings Corp -- IDR 'BB'. TRW Automotive, Inc -- IDR 'BB'; -- Secured 'BB+'; -- Senior unsecured 'BB-'. Visteon Corp -- IDR 'CCC'; -- Senior secured 'B/RR1'; -- senior unsecured 'CC/RR6'. AMERICAN AXLE & MANUFACTURING: Fitch Puts IDR on WatchNeg. ---------------------------------------------------------- Fitch Ratings has placed the Issuer Default Ratings of the U.S. auto suppliers listed below on Rating Watch Negative, based on the impact of a potential bankruptcy filing by General Motors (and Fitch's view that this would be followed by a bankruptcy at Ford). Given its smaller profile, it is unlikely that a bankruptcy filing by Chrysler would have the same impact. Industry bankruptcies could result from either the failure of the auto legislation currently under consideration in the U.S. Congress, or the failure of the Detroit Three to develop viable restructuring plans in the several months prior to the expiration of the bridge loans included in the current legislation. In 2009, auto suppliers are already facing a steep global downturn in auto production, including a deeply depressed production forecast in the U.S. and Europe. In the event of a General Motors bankruptcy, Fitch believes that the resulting contraction in auto production, the supply chain, trade credit and capital-access would cause widespread shutdowns and bankruptcies throughout the supply chain. Given the cliff-risk nature of the risks involved, Fitch has tried to detail below the extent of the potential rating actions that would be taken in the event of a GM bankruptcy. In any event, Fitch will continue to take individual rating actions in the sector as events unfold over the next several weeks and months. Fitch notes that even if the OEMs avoid bankruptcy, major restructurings of their operations will occur, causing material changes in the operations of their Tier I suppliers. These restructurings could also lead to ratings actions, providing further rationale for placing these suppliers on Rating Watch Negative. The auto suppliers placed or remain on Rating Watch Negative and the ratings most likely to result in the event of a GM bankruptcy are: Companies Current IDR/Prospective IDR -- American Axle 'B'/'CC'; -- ArvinMeritor 'B'/CCC'; -- Hayes-Lemmerz 'B'/CCC'; -- Johnson Controls 'A-'/'BBB+'; -- Tenneco 'BB-/B-'; -- TRW 'BB'/'B-'; -- Visteon 'CCC'/'CC' -- Companies not included in the rating actions: -- Cummins 'BBB+'; -- Goodyear 'BB-'; -- Navistar 'BB-' Despite improved diversification by most Tier 1 suppliers, across manufacturers, geographies and product lines, the decline in supplier revenues and operating cash flow through 2009 resulting from a GM bankruptcy would likely produce covenant violations across the vast majority of suppliers. Of equal concern, Tier 2 and three suppliers are likely to experience widespread bankruptcies through loss of volume, lack of receivables financing, and restricted financial and trade credit. Fitch expects that a collapse of trade credit throughout the supply chain would put at risk the domestic operations of these suppliers, as well as their financial viability. TRW and Tenneco remain better positioned given their global operations, but Fitch expects that these two companies, at a minimum, would require renegotiations with their bank group. Ratings on Rating Watch Negative are: American Axle & Manufacturing Holdings, Inc. -- IDR 'B'; American Axle & Manufacturing, Inc -- IDR 'B'; ArvinMeritor -- IDR 'B'; -- Secured 'BB'; -- Senior unsecured 'B/RR4'. Hayes-Lemmerz International, Inc -- IDR 'B'. Hayes-Lemmerz Finance Luxembourg S.A -- IDR 'B'; -- Senior unsecured 'B-/RR5'; -- Senior secured 'BB/RR1'. HLI Operating Company Inc. -- IDR 'B'; -- Senior secured 'BB/RR1'. Johnson Controls -- IDR 'A-'. York International -- IDR 'A-'. Tenneco -- IDR 'BB-'; -- Senior unsecured 'BB-'; -- Subordinated 'B'; -- Senior secured notes 'BB'; -- Senior secured credit facilities 'BB+'. TRW Automotive Holdings Corp -- IDR 'BB'. TRW Automotive, Inc -- IDR 'BB'; -- Secured 'BB+'; -- Senior unsecured 'BB-'. Visteon Corp -- IDR 'CCC'; -- Senior secured 'B/RR1'; -- senior unsecured 'CC/RR6'. AMERICAN INT'L: Will Meet With Bankers on Asian Assets Sale ----------------------------------------------------------- Dow Jones Newswires reports that American International Group Inc. Chairperson and CEO Edward Liddy said on Thursday that the company will discuss with investment bankers the potential sale of some of the firm's Asian assets. Jonathan Cheng at The Wall Street Journal relates that Mr. Liddy said that he may not meet with potential buyers for some of AIG's major Asian assets until January 2009. The report says that Prudential PLC, Prudential Financial Inc., and some Asian-based insurers are among those expected to look closely at the assets. Dow Jones states that AIG wants to sell a stake of up to 49% in its Asian operation, American International Assurance Company Ltd., and its shares in its Japanese joint ventures and American Life Insurance Co. According to Dow Jones, Mr. Liddy said in a speech at an American Chamber of Commerce luncheon in Hong Kong, "Given the size and complexity of our businesses, however, we recognize that an announcement on these (divestitures) are a couple of months or more into the future." WSJ states that Mr. Liddy admitted that difficult markets and the complexity of the terms of the U.S. government rescue could slow the sale process for American International Assurance Co., which bankers value at more than $20 billion. The report says that Citigroup Inc. and Goldman Sachs Group Inc. are handling the sale of AIA. Mr. Liddy, according to WSJ, said that AIG would take its time considering offers to avoid a "fire sale." Retention Packages to Top Executives WSJ reports that Mr. Liddy said AIG will retention packages to top executives at the company's Asian life-insurance unit. Mr. Liddy told the American Chamber of Commerce in Hong Kong that the retention packages are needed to preserve franchise value during the sale process of the Asian assets, WSJ relates. According to WSJ, Mr. Liddy said that executives can leave anytime but "we don't want individuals to leave." The report says that Mr. Liddy assured that AIG is "extremely" cautious with expenses. About American International Group Based in New York, American International Group, Inc. (AIG) is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. During the third quarter of 2008, requirements to post collateral in connection with AIG Financial Products Corp.'s credit default swap portfolio and other AIGFP transactions and to fund returns of securities lending collateral placed stress on AIG's liquidity. AIG's stock price declined from $22.76 on Sept. 8, 2008, to $4.76 on Sept. 15, 2008. On that date, AIG's long-term debt ratings were downgraded by Standard & Poor's, a division of The McGraw- Hill Companies, Inc., Moody's Investors Service and Fitch Ratings, which triggered additional requirements for liquidity. These and other events severely limited AIG's access to debt and equity markets. On Sept. 22, 2008, AIG entered into an $85 billion revolving credit agreement with the Federal Reserve Bank of New York and, pursuant to the Fed Credit Agreement, AIG agreed to issue 100,000 shares of Series C Perpetual, Convertible, Participating Preferred Stock to a trust for the benefit of the United States Treasury. At Sept. 30, 2008, amounts owed under the facility created pursuant to the Fed Credit Agreement totaled $63 billion, including accrued fees and interest. Since Sept. 30, AIG has borrowed additional amounts under the Fed Facility and has announced plans to sell assets and businesses to repay amounts owed in connection with the Fed Credit Agreement. In addition, subsequent to Sept. 30, 2008, certain of AIG's domestic life insurance subsidiaries entered into an agreement with the NY Fed pursuant to which the NY Fed has borrowed, in return for cash collateral, investment grade fixed maturity securities from the insurance subsidiaries. On Nov. 10, 2008, the U.S. Treasury agreed to purchase, through its Troubled Asset Relief Program, $40 billion of newly issued AIG perpetual preferred shares and warrants to purchase a number of shares of common stock of AIG equal to 2% of the issued and outstanding shares as of the purchase date. All of the proceeds will be used to pay down a portion of the Federal Reserve Bank of New York credit facility. The perpetual preferred shares will carry a 10% coupon with cumulative dividends. AIG and the Fed also agreed to revise the existing FRBNY credit facility. The loan terms were extended from two to five years to give AIG time to complete its planned asset sales in an orderly manner. The equity interest that taxpayers will hold in AIG, coupled with the warrants, will total 79.9%. At Sept. 30, 2008, AIG had $1.022 trillion in total consolidated assets and $950.9 billion in total debts. Shareholders' equity was $71.18 billion, including the addition of $23 billion of consideration received for preferred stock not yet issued. ARVINMERITOR: Fitch Puts Issuer Default Rating on WatchNeg. ----------------------------------------------------------- Fitch Ratings has placed the Issuer Default Ratings of the U.S. auto suppliers listed below on Rating Watch Negative, based on the impact of a potential bankruptcy filing by General Motors (and Fitch's view that this would be followed by a bankruptcy at Ford). Given its smaller profile, it is unlikely that a bankruptcy filing by Chrysler would have the same impact. Industry bankruptcies could result from either the failure of the auto legislation currently under consideration in the U.S. Congress, or the failure of the Detroit Three to develop viable restructuring plans in the several months prior to the expiration of the bridge loans included in the current legislation. In 2009, auto suppliers are already facing a steep global downturn in auto production, including a deeply depressed production forecast in the U.S. and Europe. In the event of a General Motors bankruptcy, Fitch believes that the resulting contraction in auto production, the supply chain, trade credit and capital-access would cause widespread shutdowns and bankruptcies throughout the supply chain. Given the cliff-risk nature of the risks involved, Fitch has tried to detail below the extent of the potential rating actions that would be taken in the event of a GM bankruptcy. In any event, Fitch will continue to take individual rating actions in the sector as events unfold over the next several weeks and months. Fitch notes that even if the OEMs avoid bankruptcy, major restructurings of their operations will occur, causing material changes in the operations of their Tier I suppliers. These restructurings could also lead to ratings actions, providing further rationale for placing these suppliers on Rating Watch Negative. The auto suppliers placed or remain on Rating Watch Negative and the ratings most likely to result in the event of a GM bankruptcy are: Companies Current IDR/Prospective IDR -- American Axle 'B'/'CC'; -- ArvinMeritor 'B'/CCC'; -- Hayes-Lemmerz 'B'/CCC'; -- Johnson Controls 'A-'/'BBB+'; -- Tenneco 'BB-/B-'; -- TRW 'BB'/'B-'; -- Visteon 'CCC'/'CC' -- Companies not included in the rating actions: -- Cummins 'BBB+'; -- Goodyear 'BB-'; -- Navistar 'BB-' Despite improved diversification by most Tier 1 suppliers, across manufacturers, geographies and product lines, the decline in supplier revenues and operating cash flow through 2009 resulting from a GM bankruptcy would likely produce covenant violations across the vast majority of suppliers. Of equal concern, Tier 2 and three suppliers are likely to experience widespread bankruptcies through loss of volume, lack of receivables financing, and restricted financial and trade credit. Fitch expects that a collapse of trade credit throughout the supply chain would put at risk the domestic operations of these suppliers, as well as their financial viability. TRW and Tenneco remain better positioned given their global operations, but Fitch expects that these two companies, at a minimum, would require renegotiations with their bank group. Ratings on Rating Watch Negative are: American Axle & Manufacturing Holdings, Inc. -- IDR 'B'; American Axle & Manufacturing, Inc -- IDR 'B'; ArvinMeritor -- IDR 'B'; -- Secured 'BB'; -- Senior unsecured 'B/RR4'. Hayes-Lemmerz International, Inc -- IDR 'B'. Hayes-Lemmerz Finance Luxembourg S.A -- IDR 'B'; -- Senior unsecured 'B-/RR5'; -- Senior secured 'BB/RR1'. HLI Operating Company Inc. -- IDR 'B'; -- Senior secured 'BB/RR1'. Johnson Controls -- IDR 'A-'. York International -- IDR 'A-'. Tenneco -- IDR 'BB-'; -- Senior unsecured 'BB-'; -- Subordinated 'B'; -- Senior secured notes 'BB'; -- Senior secured credit facilities 'BB+'. TRW Automotive Holdings Corp -- IDR 'BB'. TRW Automotive, Inc -- IDR 'BB'; -- Secured 'BB+'; -- Senior unsecured 'BB-'. Visteon Corp -- IDR 'CCC'; -- Senior secured 'B/RR1'; -- senior unsecured 'CC/RR6'. ASCOTT DISTRIBUTORS: Case Summary & 20 Largest Unsec. Creditors --------------------------------------------------------------- Debtor: Ascott Distributors, Inc. dba House of Lights 213 Rt 22 East Green Brook, NJ 08812 Case No.: 08-34638 Chapter 11 Petition Date: December 11, 2008 Court: U.S. Bankruptcy Court District of New Jersey (Trenton) Debtor's Counsel: Theodore Liscinski, Jr., Esq. 265 Davidson Ave., Suite 200 Somerset, NJ 08873 Tel: (732) 469-9008 Fax: 732-469-9037 Email: tedliscinski@verizon.net Total Assets: $216,930 Total Debts: $1,991,568 A list of the Debtor's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/njb08-34638.pdf AVANI INT'L: Posts $150,323 Net Loss in the Last Nine Months ------------------------------------------------------------ Avani International Group Inc. disclosed in a regulatory filing with the Securities and Exchange Commission its financial results for the three and nine months ended Sept. 30, 2008. The company reported net loss of $17,214 for three months ended Sept. 30, 2008, compared to net loss of $72,614 for the same period in the previous year. For nine months ended Sept. 30, 2008, the company incurred net loss of $150,323 compared to net loss of $264,654 for the same period in the previous year. Liquidity and Capital Resources. As of Aug. 31, 2008, the company had working capital deficit of $77,530. Working capital as of Dec. 31, 2007, was $95,950. The decrease in working capital deficit is due to the comprehensive loss of the company which occurred through the third fiscal quarter of 2008. Property, plant and equipment, net of accumulated depreciation, totaled $82,804 on Aug. 31, 2008. Property, plant and equipment, net of accumulated depreciation, totaled $12,874 on Dec. 31, 2007. The increase is due to the recovery of the Avani O2 equipment, partially offset by depreciation during the nine month period in 2008. The company continues to experience significant losses from operations. The company expects to re-commence operations of its water business in Malaysia through a licensee or joint venture arrangement. The company believes that it will be able to meet its anticipated expenditures for the 2008 period through some combination of; deferment of paying certain accounts payable and cash on hand. However, beyond fiscal 2008, the company likely will need to raise additional capital pursuant to the private placement of its debt or equity. The company also is exploring other business opportunities for purposes of effecting a business acquisition or combination. In implementing a structure for a particular business acquisition, the company may become a party to a merger, consolidation, reorganization, joint venture, franchise or licensing agreement with another corporation or entity. As of the date of this filing, the company has no formal plan, proposal, agreement, understanding or arrangement to acquire or merge with any specific business or company. The company can not predict whether it will be successful in raising additional capital, or whether it will be successful in effecting any form of business acquisition or combination. The private placement of its capital stock in capital raising transaction, or the issuance of capital stock in effecting any form of business acquisition or combination may result in significant dilution to existing shareholders. If the company is unsuccessful in raising required funds, it will have a material adverse impact on the company and its ability to re-commence operations and it future business in general. At Sept. 30, 2008, the company's balance sheet showed total assets of $1,177,542, total liabilities of $1,159,043 and capital of $18,499. A full-text copy of the 10-Q filing is available for free at http://ResearchArchives.com/t/s?3610 About Avani International Headquartered in West Vancouver, Canada, Avani International Group Inc. (OTC: AVIT) is seeking a joint venture partner or licensee in the Far East, mainly Malaysia, for the purpose of re-commencing operations utilizing the company's oxygenated equipment. Under this arrangement, the company expects that its licensee or joint venture partner will engage in the actual manufacture and sale of its oxygenated product, subject to the payment of a yet to be determined royalty to the company. As of Dec. 31, 2007, the company had not entered into any binding arrangements regarding its proposed joint venture or licensee arrangements. The company previously constructed a bottling facility and engaged in the business of bottling and distributing a bottled water product under the trade name Avani Water, which is oxygen enriched, purified bottled water produced from technology developed by the company. Going Concern Doubt Jeffrey Tsang & Co., in Hong Kong, expressed substantial doubt about Avani International Group Inc.'s ability to continue as a going concern after auditing the 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. AVANTE SALON: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: AVANTE SALON, LLC dba AVANTE SALON & SPA 2031 N POWER ROAD, SUITE 110 MESA, AZ 85215 Case No.: 08-17901 Chapter 11 Petition Date: December 10, 2008 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: Randolph J. Haines Debtor's Counsel: NATHAN E CARR, Esq. 1830 S. ALMA SCHOOL RD #104 MESA, AZ 85210 480-278-1278 Email: natecarrlaw@yahoo.com Estimated Assets: $0 to $50,000 Estimated Debts: $500,001 to $1,000,000 The Debtor did not file a list of its largest unsecured creditors when it filed its petition. B MOSS CLOTHING: Court Approves Going-Out-Of-Business Sales ----------------------------------------------------------- The Hon. Novalyn L. Winfield of the United States Bankruptcy Court for the District of New Jersey authorized B. Moss Clothing Company Ltd. to conduct going-out-of-business sales of substantially all their assets, free and clear of all liens and encumbrances. Judge Winfield also authorized the Debtor to assume a prepetition consulting agreement with ARG Recovery LLC. The Debtor told the Court that it has an urgent need to sell its assets for the benefit of all of its creditors. The Debtor said it is taking full advantage of the level of mall traffic, which is at its peak between now and Christmas. The Court has approved an employee incentive program in connection with the assets sale. About B. Moss Clothing Headquartered in Secaucus, New Jersey, B. Moss Clothing Company Ltd. -- http://www.bmossclothing.com/-- sells clothing Apparels. The company filed for Chapter 11 protection on December 2, 2008 (Bankr. D. N.J. Case No. 08-33980). Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard PA, represent the company in its restructuring effort. When the company filed for protection from its creditors, it listed assets and debts between $10 million to $50 million each. BCE INC: $41BB Buyout Collapses as Buyers Terminate Deal -------------------------------------------------------- Peter Lattman at The Wall Street Journal reports that the $41 billion leveraged buyout of BCE Inc. buyout has collapsed. As reported in the Troubled Company Reporter on Nov. 28, 2008, BCE said it reached a final agreement with Teachers' Private Capital, the private investment arm of the Ontario Teachers' Pension Plan, Providence Equity Partners Inc., Madison Dearborn Partners LLC and Merrill Lynch Global Private Equity, to complete its privatization. The all-cash transaction is valued at C$51.7 billion or $48.5 billion including C$16.9 billion or $15.9 billion of debt, preferred equity and minority interests. WSJ relates that the buyers said that the deal was terminated due to the failure to fulfill the contract's terms. The report says that the merger agreement expired on Thursday at 12:01 a.m. The buyers, states the report, said that they aren't responsible for a $1.2 billion breakup fee. BCE would sue the group over the breakup fee, according to WSJ. As reported by the TCR, accounting and valuation firm KPMG said that BCE might not be able to meet the conditions of the merger agreement. According to WSJ, the buyers said that they still want to own BCE, but sources said that the group will also take some measure of relief from the deal's collapse, since the economic climate and valuation of telecom firms has changed since July 2007, when the agreement was reached. WSJ states that Citigroup Inc., Deutsche Bank AG, Royal Bank of Scotland Group PLC, and Toronto Dominion Bank would have absorbed as much as $12 billion in losses from selling the debt package at "steep markdowns" or by holding the debt on their books. The report says that because the buyout was terminated, the banks won't have to provide about $34 billion in debt to finance the deal. After the termination of the proposed privatization agreement, BCE said that it will return value to BCE shareholders with a reinstated common share dividend and a new Normal Course Issuer Bid (NCIB) common share buyback program. Bell Canada will also continue its move forward as a re-energized company with a clear goal -- to be recognized by customers as Canada's leading communications company -- and the customer- focused strategy and structure required to achieve it. "Our enhanced operational performance in recent months confirms that Bell is competing as a cost-effective and customer-focused communications company. The Bell team has implemented a range of programs to deliver a better customer experience, and we are eager to build on the clear progress we've already made," said George Cope, President and CEO of Bell and BCE. "Given this steadily improving business trajectory, we view the dividend and share buyback initiatives announced by BCE today as very attractive to our shareholders now and going forward." "The BCE Board of Directors is in full support of the operational and investment strategy and capital market approach implemented by our CEO George Cope and his executive team," said Richard J. Currie, BCE and Bell Canada Board Chair. Bell's Move Forward In July 2008, Bell instituted a new strategy and a 100-day plan to enhance its customer service capability, competitiveness and cost efficiency. With a strict focus on its core business as a communications service provider, Bell is executing on five strategic imperatives -- Improve Customer Service, Accelerate Wireless, Leverage Wireline Momentum, Invest in Broadband Networks & Services, and Achieve a Competitive Cost Structure -- to deliver a better customer experience. Beginning in July, Bell disclosed several significant operational initiatives supporting its Strategic Imperatives, including: -- an organizational restructuring that reduced the number of management layers at Bell, bringing all team members closer to the customer, while reducing the number of management positions by 15%; ambitious new service programs like Same Day Next Day service and Express Install; -- major investments in its wireless and IP fibre networks, as well as its service infrastructure; and -- a bold new brand that highlights Bell's move forward in the business and consumer marketplaces. Bell's cost reduction initiatives will result in savings of approximately $400 million, an enhanced competitive position and, as evidenced by the progress shown in BCE's third-quarter results, steadily improving operational and financial performance supporting Bell's future as a public company, and the shareholder value initiatives. Strong Balance Sheet and Liquidity Maintaining a public company capital structure, underpinned by strong investment grade credit metrics, BCE is retaining high levels of financial liquidity to fund its maturing debt obligations given today's market environment. The company also today announced new initiatives -- a reinstated common share dividend and an NCIB program -- dedicated to returning value to its shareholders. Reinstated Common Share Dividend BCE has reinstated its common share dividend and declared this morning its fourth quarter of 2008 common dividend. For shareholders of record as of Dec. 23, 2008, a quarterly dividend per share of $0.365 will be paid on Jan. 15, 2009. NCIB Share Buyback Program BCE will return capital to shareholders in the form of a Normal Course Issuer Bid. To that end, BCE will repurchase up to approximately 5% of outstanding common shares, or 40 million common shares. The NCIB is subject to approval by the Toronto Stock Exchange and will be carried out in accordance with the requirements of the TSX and applicable laws. "A share buyback is the most efficient method of distributing capital to our shareholders, particularly given the current valuation metrics of the company," said Siim Vanaselja, Chief Financial Officer of BCE. "The share buyback will be accretive to earnings per share and cash flow. Our improving operational progress provides the Company with confidence in our ability to return value to shareholders now and into the future." Annual Shareholder Meeting BCE's shareholders' meeting will be held on Feb. 17, 2009, in Montreal. At this meeting, the company will further outline Bell's goal and 5 Strategic Imperatives and BCE's capital structure and shareholder value initiatives, including its dividend payout policy. Return of share certificates BCE has advised Computershare Investor Services Inc. that the privatization transaction will not proceed. As a result, holders of BCE shares will maintain their status as BCE shareholders. Computershare will return to depositing shareholders a share certificate representing their deposited BCE common and preferred shares and any ancillary documents it received from each such shareholder by first class mail as soon as practicable. For more information, investors may contact Computershare at 1-800-564- 6253. Termination of Cash Tender Offers BCE and Bell Canada have terminated their previously disclosed conditional cash tender offers for outstanding BCE 7.35% Series C Notes due Oct. 30, 2009 (the BCE Notes), and outstanding Bell Canada 6.15% Debentures, Series M-2, due June 15, 2009, and 5.50% Debentures, Series M-16, due Aug. 12, 2010 (the Bell Debentures). BCE and Bell Canada, respectively, have notified the depositaries of the termination of the tender offers, that they will not accept for payment or pay for any BCE Notes or Bell Debentures deposited to the tender offers, and instructed the depositaries to promptly return all BCE Notes and Bell Debentures deposited by the tendering holders. About BCE BCE Inc. -- www.bce.ca -- is Canada's largest communications company, providing the most comprehensive and innovative suite of communication services to residential and business customers in Canada. Under the Bell brand, the Company's services include local, long distance and wireless phone services, high-speed and wireless Internet access, IP-broadband services, information and communications technology services (or value-added services) and direct-to-home satellite and VDSL television services. BCE also holds an interest in CTVglobemedia, Canada's premier media company. BCE shares are listed in Canada and the United States. As reported in the Troubled Company Reporter on Sept. 3, 2008, Fitch's ratings placed BCE Inc.'s 'BB-' issuer default and senior unsecured debt ratings, as well as the 'BB-' issuer default and senior unsecured debt ratings and 'B+' subordinate debt rating on Bell Canada on Watch Negative. The ratings were first placed on Rating Watch Negative on July 3, 2007, when Fitch downgraded the IDR and senior unsecured debt ratings to 'BB-' from 'BBB+' due to BCE's acceptance of a leveraged buyout offer from an investor group including Teachers Private Capital. BERNARD L. MADOFF: SEC Sues Firm for Multi-Billion Ponzi Scheme --------------------------------------------------------------- The Securities and Exchange Commission has charged Bernard L. Madoff and his investment firm, Bernard L. Madoff Investment Securities LLC, with securities fraud for a multi-billion dollar Ponzi scheme that he perpetrated on advisory clients of his firm. The SEC is seeking emergency relief for investors, including an asset freeze and the appointment of a receiver for the firm. The SEC's complaint, filed in federal court in Manhattan, alleges that Mr. Madoff yesterday informed two senior employees that his investment advisory business was a fraud. Mr. Madoff told these employees that he was "finished," that he had "absolutely nothing," that "it's all just one big lie," and that it was "basically, a giant Ponzi scheme." The senior employees understood him to be saying that he had for years been paying returns to certain investors out of the principal received from other, different investors. Mr. Madoff admitted in this conversation that the firm was insolvent and had been for years, and that he estimated the losses from this fraud were at least $50 billion. "We are alleging a massive fraud -- both in terms of scope and duration," said Linda Chatman Thomsen, Director of the SEC's Division of Enforcement. "We are moving quickly and decisively to stop the fraud and protect remaining assets for investors, and we are working closely with the criminal authorities to hold Mr. Madoff accountable." Andrew M. Calamari, Associate Director of Enforcement in the SEC's New York Regional Office, added, "Our complaint alleges a stunning fraud that appears to be of epic proportions." According to regulatory filings, the Madoff firm had more than $17 billion in assets under management as of the beginning of 2008. It appears that virtually all assets of the advisory business are missing. Mr. Madoff founded the firm in 1960 and has been a prominent member of the securities industry throughout his career. Mr. Madoff served as vice chairman of the NASD, a member of its board of governors, and chairman of its New York region. He was also a member of NASDAQ Stock Market's board of governors and its executive committee and served as chairman of its trading committee. The complaint charges the defendants with violations of the anti- fraud provisions of the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940. In addition to emergency and interim relief, the SEC seeks a final judgment permanently enjoining the defendants from future violations of the antifraud provisions of the federal securities laws and ordering them to pay financial penalties and disgorgement of ill-gotten gains with prejudgment interest. The SEC's investigation is continuing. The SEC acknowledges the assistance of the U.S. Attorney's Office for the Southern District of New York. Two Firms Disclose Exposure According to Bloomberg News, Nomura Holdings Inc., Japan's largest brokerage, and Banco Santander SA disclosed investments tied to Madoff. Nomura said it has JPY27.5 billion ($302 million) at risk linked to Bernard Madoff's investment funds. Banco Santander, Europe's second-biggest bank by market value, said its hedge-fund unit invested EUR2.33 billion (US$3.1 billion) with Madoff through its Optimal Strategic U.S. Equity fund. Bloomberg adds that BNP Paribas SA, Europe's third-largest bank, said it may lose as much as EUR350 million through indirect exposure to Madoff's investment advisory business. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC is a leading international market maker. The firm has been providing quality executions for broker-dealers, banks, and financial institutions since its inception in 1960. During this time, Madoff has compiled an uninterrupted record of growth, which has enabled us to continually build our financial resources. With more than $700 million in firm capital, Madoff currently ranks among the top 1% of US Securities firms. BERNARD L. MADOFF: District Court Appoints Receiver; TRO Entered ---------------------------------------------------------------- The Honorable Louis L. Stanton, Federal Judge in the United States District Court for the Southern District of New York, has appointed Lee S. Richards of the law firm Richards Kibbe & Orbe LLP as receiver over the assets and accounts of Bernard L. Madoff Investment Securities LLC. The Securities and Exchange Commission has sued Mr. Madoff and his firm before the District Court with securities fraud for a multi- billion dollar Ponzi scheme that Mr. Madoff perpetrated on advisory clients of his firm. The SEC won emergency relief for investors, including an asset freeze and the appointment of a receiver for the firm. At the behest of the Securities and Exchange Commission, the U.S. District Court for the Southern District of New York has issued a temporary restraining order against Mr. Madoff and Bernard L. Madoff Investment Securities, barring them from violating Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, among other rules and statutes. The Court also freezes Madoff's assets. "It appears that an order freezing [Madoff's] assets, as specified herein, is necessary to preserve the status quo, and to protect this Court's ability to award equitable relief in the form of disgorgement of illegal profits from fraud and civil penalties, and to preserve the Court's ability to approve a fair distribution for victims of the fraud," District Stanton said. The Court has asked Madoff to show cause on December 19, 2008, why the SEC's request, including the asset freeze, should not be granted on a final basis. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC is a leading international market maker. The firm has been providing quality executions for broker-dealers, banks, and financial institutions since its inception in 1960. During this time, Madoff has compiled an uninterrupted record of growth, which has enabled us to continually build our financial resources. With more than $700 million in firm capital, Madoff currently ranks among the top 1% of US Securities firms. BOISE INC: S&P Keeps 'BB-' Corp. Credit Rating; Outlook Negative ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlook on Boise, Idaho-based Boise Inc. to negative from stable. At the same time, S&P affirmed its ratings on Boise, including the 'BB-' corporate credit rating. The outlook revision reflects uncertainties regarding Boise's financial performance over the next several quarters in light of the U.S. recession and prospects for difficult operating conditions. If 2009 earnings do not improve from the level of the 12 months ended Sept. 30, 2008, or Boise does not reduce debt, the company could be challenged to comply with financial covenants that tighten throughout the year. "Specifically," said S&P's credit analyst Pamela Rice, "we are concerned about the narrow cushion under Boise's maximum leverage covenant, which declines progressively to 3.75x at year-end 2009 from 4.75x at Sept. 30, 2008. In the near term, S&P believes that Boise's financial results should benefit from the substantial decline in most raw material and energy costs, although the sustainability of these decreases is uncertain." Product prices have been holding up fairly well, and Boise's portfolio includes a good proportion of less-cyclical specialty products and products sold to relatively stable packaging end markets. Ms. Rice said, "We are concerned that demand for the company's commodity products could decline more than expected, causing pressure on prices, despite the industry's capacity management efforts." Boise is the third-largest producer of uncoated freesheet in North America. It also manufactures containerboard, corrugated products, and newsprint. "We could lower the ratings if leverage does not improve sufficiently to ensure that the cushion under its financial covenants exceeds 10%," Ms. Rice said. "We could revise the outlook to stable if the company is able to generate better-than- expected earnings and cash flow during the economic downturn to reduce debt and strengthen its credit measures to S&P's targeted levels. For a revision to stable, S&P expects debt to EBITDA in the 3.5x to 4x range and EBITDA interest coverage of 3.0x to 3.5x." BOLTHOUSE FARMS: Moody's Changes Probability Default Rating to B3 ----------------------------------------------------------------- Moody's Investors Service changed the probability of default rating for Wm. Bolthouse Farms, Inc. to B3 from B2, and the rating outlook to negative from stable. These actions reflect concern that tight cushion under financial covenants could erode further. The company's B2 corporate family rating and the ratings on first lien debt were affirmed, reflecting Moody's expectation that credit ratios will remain appropriate for Bolthouse's rating level. The rating on Bolthouse's second lien debt was lowered to Caa2 from Caa1 as a consequence of the lowering of the probability of default rating. Ratings lowered, and LGD assessments adjusted: -- Probability of Default rating to B3 from B2 -- $135 million 2nd lien term loan due December 2013 to Caa2 (LGD5, 80%) from Caa1 (LGD6, 91%) Ratings affirmed, and LGD assessments adjusted: -- Corporate Family rating at B2 -- $75 million 1st lien revolving credit agreement expiring in December 2011 at B1; LGD rates to LGD2/28% from LGD3/ 41% -- $500 million (original principal) 1st lien term loan due December 2012 at B1; LGD rates to LGD2/28% from LGD3/ 41% The cushion on the company's 1st lien leverage covenant was tight at about 4% at Sept. 30, 2008, and is likely to remain modest, especially when the leverage covenant steps down in March. To boost cushion, Bolthouse will have to grow sales and/or profit margins at a time when cost-conscious consumers may be less willing to buy premium priced products, such as Bolthouse's beverages and salad dressings. In the six months ended Sept. 30, for example, concentrate sales to Japan fell in the face of reduced demand by retail end-users in a tough economy. Should Bolthouse's covenant cushion be expected to be abundant for the foreseeable future, Moody's would likely change the probability of default rating back to B2 and change the outlook back to stable. The affirmation of the company's B2 corporate family rating incorporates Bolthouse's benefits from its position as the larger of two providers of most domestic carrot products -- the two players have over 90% domestic market share -- and vies with another major player for the leading market share in the healthy beverage industry. This market position allows the company to price appropriately and to introduce new products such as yogurt- based salad dressings to an extensive retail customer base. Headquartered in Bakersfield, California, BF Bolthouse Holdco, LLC through its operating subsidiaries including Wm. Bolthouse Farms, Inc., is a grower, processor and distributor of peeled and cut carrots and carrot products, and a producer of fruit and vegetable based beverages. Revenues for the twelve months ended Sept. 30, 2008 were approximately $656 million. The company is majority owned and controlled by an affiliate of private equity firm Madison Dearborn Capital Partners IV, L.P. Moody's most recent rating action on Wm. Bolthouse Farms on November 29, 2007 affirmed the company's ratings and maintained a stable outlook. BYSYNERGY LLC: Files Amended Chapter 11 Plan of Reorganization -------------------------------------------------------------- Bysynergy, LLC submitted to the U.S. Bankruptcy Court for the District of Arizona an Amended Chapter 11 Plan of Reorganization and Amended Disclosure Statement. The Plan will be funded from three principal sources of revenue: (1) The Amended Plan will receive immediate capital from Michael Zito, the Debtor's sole shareholder, who will invest $750,000 in additional equity within 2 days of Confirmation. (2) The Amended Plan plan will receive funding from two bulk sales of units which will close on or before the effective date. Category I contracts will yield net proceeds of $3,411,000, with the purchaser paying all closing costs. The purchaser has required that all these proceeds will go to fund the remaining infrastructure construction. Categoy II Contracts will yield net proceeds of $2,643,000, with the purchaser paying all closing costs. The full amount of the proceeds from Contract II will be paid to M&I Bank as a reduction of the amount of its allowed claim. (3) The Amended Plan will receive proceeds from the orderly sale of lots. These sales will be generated through incentivizing early buyers through deep discounts to generate the immediate cash critical to completing the 103 remaining single family detached Finally Platted Lots in Yavapai County, known as Bella Terra on Oak Creek. Treatment of Claims Class 1 consists of all Allowed Claims entitled to such priority under Sections 503, 507 and 1129 of the Bankruptcy Code. All Class 1 claims are unimpaired, and will be paid on the effective date. Although the Debtor is unaware of any Priority Claims, portions of the $750,000 additional equity contribution could be available to fund any such claims. Class 2.A shall consist of the Allowed Secured Claim of M&I Bank in the amount of $10,987,495. M&I will receive a payment of $2,643,000 upon the closing of the category II contracts. M&I will receive additionally repayment of its Allowed Claim in the form of release payments made upon the sale of lots. This Class in impaired. Class 2.B shall consist of the Allowed Secured Claim of Fred Schuerman in the amount of $1,625,000. Mr. Shuerman will receive no interest on his claim and will receive repayment of his Allowed Claim in the form of release payments made upon the sale of lots. This Class is impaired. Class 2.C shall consist of an Allowed Secured Tax Claim by Yavapai County against the Debtor in the amount of $82,373. This claim will be paid ratably upon the sale of each lot securing such claim, and will accrue interest at the Amended Plan Rate of 6%. This Class in impaired. Class 2.D shall consist of the Allowed Secured Claim of Tiffany Construction in the amount of $676,994. The first $439,369 is to be paid within 10 days of Confirmation from the additional equity being invested into the Debtor by Michael Zito. The remaining $237,624 will be paid from the proceeds of the category II contracts used to fund the remaining infrastructure development. Class 2.E shall consist of the Allowed Secured Claim of George Raluy, as filed in Claim No. 21 in the Claim Register, in the amount of $150,000. George Raluy will be paid the amount of his claim at the time of the sale of the lot securing his claim. His Claim No. 7 will be expunged. Class 3.A General Unsecured Claims, Class 3.B Deficiency Claims, Class 3.C Loans, Class 3.D Commissions/Salaries and Class 3.E Professionals Services will receive payment, pari passu, with each other Class 3 Claimant based upon the amount of distribution allocated proportionately to each Allowed Claim. Distributions will be made by way of a release payment upon the sale of lots. All Sub-classes of Class 3 are impaired. Class 3.A, Class 3.D and Class 3.E will receive no interest on their Allowed Claims. The Debtor does not anticipate any Class 3.B Claims. Class 3.C Loans will receive interest on their Allowed Claims at the Amended Plan Rate of 6% per year, calculated from the maturity date of each note. Class 4 shall consist of Non-Debtor Claims, Subordinated Claims of Insiders, Affiliates and Ineligible Creditors, and Erroneously Scheduled Claims. This Class is impaired. The claims of Class 4 creditors will be disallowed in their entirety. If any portion of any Class 4 Claim is ultimately deemed allowed by the Bankruptcy Court, such Claim will be reclassified as a Class 3.A Claim and share pro rata in any distributions. Class 5 consists of Membership Interests in the Debtor. This Class is impaired. All Class 5 Membership Interests shall be preserved. A full-text copy of Bysynergy, LLC's Amended Chapter 11 Plan of Reorganization is available for free at: http://researcharchives.com/t/s?3625 A full-text copy of Bysynergy, LLC's Amended Disclosure Statement in available for free at: http://researcharchives.com/t/s?3624 About Bysynergy LLC Based in Sedona, Arizona, Bysynergy, LLC is a single purpose, single asset Delaware limited liability comnay, which primarily owns 103 single family dtached Finally Platted Lots in Yavapai County, known as Bella Terra on Oak Creek. The Debtor filed for Chapter 11 protection on June 25, 2008 (Bankr. D. Ariz. Case No. 08-07680). Jonathan P. Ibsen, at Jaburg & Wilk, PC, represents the Debtor as its counsel. Steven J. Brown, Esq., at Steve Brown & Associates, LLC, represents the Official Committee of Unsecured Creditors as counsel. When Bysynergy, LLC filed for protection from its creditors, it listed assets of between $10 million and $50 million, and debts of between $10 million and $50 million. CADENCE INNOVATION: Gets Nod to Implement Employee Plans -------------------------------------------------------- Cadence Innovation LLC and its affiliate New Venture Real Estate Holdings, LLC won approval from the U.S. Bankruptcy Court for the District of Delaware to (i) maintain a retention plan and severance plan for non-insider salaried employees; and (ii) implement a performance-based officer incentive plan. The Debtors recount that a key element of the Final DIP Order and other financial accommodations is the sale of their Chesterfield, Michigan plant and other milestones within a short timeframe. With the intent of maximizing the highest value possible for their estates, the Debtors believe that the continuation of the Plans will ensure the Debtors' employees' availability while the sale of assets are on-going. The Debtors add that well- compensating and incentivizing the employees will be key in preserving the estates' value. Roberta A. DeAngelis, Acting U.S. Trustee for Region 3, General Motors Corporation, Chrysler LLC, Roberta A. DeAngelis, and the Official Committee of Unsecured Creditors voiced their objections to the Retention, Severance and Officer Incentive Plans. The U.S. Trustee objected to the Officer Incentive Plan citing that the Debtors have not demonstrated that: (i) certain payments under the Officer Incentive Plan are not retention payments to insiders, (ii) the Incentive Plan is justified given the facts and circumstances of the Debtors' cases, and (iii) the Incentive Plan represents the actual, necessary costs of preserving the estates. GM points out that as the Debtors have not identified an independent source of financing for the Plans, the Plans must be funded out of the estate assets, including the collateral pledged to GM under the Term Loans. The Committee filed its objection under seal. Retention and Severance Plans The Retention Plan is essentially similar to the Debtors' prepetition Retention Bonus Program and is designed to incentivize salaried employees comprising five non-insider executives and 36 key employees, to remain with the company. These employees are vital to the manufacturing process and finance and integral to the company's daily operations. The Debtors point out that given the immense talent of these employees, it is crucial to retain them to avoid attrition. Under the Retention Plan, the eligible employees would be entitled to receive 75% of the Retention Bonus Program, which 25% has been awarded during the second quarter of 2008, within 30 days after the (i) sale and shutdown of facilities or (ii) wind- down of the Debtors' business and sale of assets or (iii) involuntary termination by the management because a participant's services are no longer needed. If all Employees remain employed by the Debtors through the Retention Date, the maximum cost of the Retention Plan would be $810,000. The Severance Plan is designed to incentivize salaried employees comprised of (i) five non-insider executives, (ii) 36 key employees throughout the organization and 120 employees in the Debtors' headquarters, and (iv) 175 salaried employees in the Debtors' five plants and one service center. Under the Severance Plan, the baseline severance amount is one week of pay per year of service and would include variable minimums and maximums based on an employee's level in the organization. Majority of eligible participants under the Severance Plan are not entitled to more than 12 weeks of severance benefits and employees who are either terminated "for cause" or on their own volition are also not eligible for payments under the Severance Plan. Assuming half of the Employees are severed, the cost of the Plan is $1,230,000. The Debtors clarified that the Plant Employees will not be paid severance given the potential purchase of those facilities and their possible employment by the purchaser. In the event any of those facilities are acquired, it is anticipated that severance pay will be applicable only to those employees the purchaser is not required through negotiation to employ or those employees not offered employment by the purchaser. The cost of implementing the Severance Plan would be $1,450,000 if all employees are severed. Performance-Based Officer Incentive Plan The Incentive Plan is designed to:(i) deliver enhanced value to the Debtors' estates by incentivizing officers to achieve the highest possible sales price for the Debtors' assets; (ii) provide the Debtors' officers with competitive compensation; (iii) align the officers' pay with performance; and (iv) promote an aggressive timetable to achieve the Sale Milestones. Board-appointed officers who are eligible to participate in the Incentive Plan are the (i) chief executive officer, (ii) chief financial officer, (iii) senior vice president of human resources, and (iv) vice president of finance, controller. They are, however, exempted to participate in the Retention and Severance Plans. The Officers' rewards will be based on these metrics: (i) size of the asset realization value, (ii) sale of Chesterfield as a going concern, and (iii) pay down of the Bank of America portion of the DIP financing facility. Each metric will represent one third of the incentive target levels and the percentage of payout under the first and third metrics depends on percentage of the target obtained. The maximum cost of the Incentive Plan is $628,000 for all the Officers. The incentive period began August 26, 2008, and will end on the date that the Board or the Court determines that the Officers are no longer required. If an Officer gets terminated without cause, the incentive payment will be based on the results obtained as against the metrics as of the termination date. For any other termination, the incentive payment is forfeited. The Debtors thus see it fair and necessary to reward the Officers based on their performance for the furtherance of the Debtors' goals. The Debtors, however, assure the Court that based on Buck Consultants' market analysis, the compensation of the Officers is well below market median. Norman L. Pernick, Esq., at Cole Schotz, Meisel, Forman & Leonard, P.A., stresses that the Debtors' ability to maintain the stability of their businesses and the value of their estates is hinged on the continued employment and morale and motivation of critical employees. Without these incentives, the Debtors will most certainly find their key employees looking for jobs elsewhere as these employees have the skills that could attract better employment opportunities, he stresses. More importantly, the continuance of the Retention and Severance Plans do not conflict with Sections 503(c)(1) or 503(c)(2) as they apply only to payments that are meant to induce insiders to remain with a debtor's business. Mr. Pernick attests that neither the Retention nor Severance Plans violate Section 503(c)(3) because the payments are justified by the facts and circumstances of these speedy and complex bankruptcy cases. In the same way that the Incentive Plan also conforms with Section 503(c) as it consists of strictly performance-based payments. Moreover, the Debtors seek the Court's permission to file under seal the Buck Report as it contains sensitive information including the base salary of the Officers, the proposed incentive payment and peer survey data. The Debtors intend to serve the unredacted version of the Buck Report to the U.S. Trustee and the Official Committee of Unsecured Creditors with response or objections to be filed with the Court under seal and be served to the Debtors. * * * Prior to the hearing, the Debtors' counsel informed the Court that the Committee's objections have been resolved. The terms of the Employee Plans have been modified to address certain of the objections. The Court has approved the Employee Plans, subject to modifications. The Court strikes out the condition hinging the Debtors' authority to make any payments under the Plans to the full, complete and permanent pay down of the DIP Loans to GM and Chrysler pursuant to the DIP Final Order. About Cadence Innovation Headquartered in Troy, Michigan, Cadence Innovation LLC -- http://www.cadenceinnovation.com/-- manufactures and sells auto parts to its customers GM and Chrysler. The company has at least 4,200 employees in the United States and Europe, including Hungary and Czech Republic. The company and its debtor-affiliate, New Venture Real Estate Holdings, LLC, filed for Chapter 11 reorganization on Aug. 26, 2008 (Bankr. D. Del. Lead Case No. 08- 11973). Norman L. Pernick, Esq. and Patrick J. Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, represent the Debtors as counsel. When the Debtors filed for protection from their creditors, they listed assets of between $10 million and $50 million, and debts of between $100 million and $500 million. (Cadence Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) CADENCE INNOVATION: Files Schedules Of Assets And Debts ------------------------------------------------------- A. Real Property $0 B. Personal Property B.1 Cash on hand Petty Cash Fund -- Chesterfield 1,519 Petty Cash Fund -- Hillsdale 719 Petty Cash Fund -- Hartford City 687 Petty Cash Fund -- Malyn 500 Petty Cash Fund -- Service 334 Petty Cash Fund -- Groesbeck 315 Petty Cash Fund -- Masonic 254 B.2. Bank Accounts Bank of America Customer 3756626489 1,523,798 JP Morgan Chase 695212043 1,318,579 Bank of Tokyo-Mitsubishi UFJ 15010129363101 17,957 Bank of America Customer 3756626489 (530,000) Bank of America 3299124919 - Bank of America Customer 3756626476 - JP Morgan Chase 695212084 - Bank of America 3165 - Bank of America Customer 3756626502 - B.3 Security Deposits GE Capital Solutions 1,124,085 GE Capital Solutions 778,146 Cole Schotz 625,000 977 Fourteen Mile Rd Ass. 500,000 Merrill Lynch & Co., Inc. 413,923 Kruass Maffeis for GE Capital 404,767 FTI Consulting 250,000 Merrill Lynch & Co., Inc. 229,344 Katten Muchin 210,138 Merrill Lynch & Co., Inc. 200,903 Butzel Long 192,000 Merrill Lynch & Co., Inc. 108,375 SEMCO Gas 102,641 Kramer Levin 100,000 Merrill Lynch & Co., Inc. 90,482 Merrill Lynch & Co., Inc. 87,307 Merrill Lynch & Co., Inc. 77,115 Merrill Lynch & Co., Inc. 73,045 Madison Escrow Deposit with Metropolitan Tile Company 42,465 Jenoptik Laser Technologies 30,927 Jenoptik Laser Technologies 24,900 Bishop Energy Services 14,271 RSM McGladrey 12,000 Workers Comp Deposit with Presidium 10,000 Middle Market Banking 7,000 SEMCO Gas 5,000 Servcorp 1,931 B.4 Household goods none B.5 Books, and other collectibles none B.6 Wearing apparel none B.7 Furs and jewelry none B.8 Firearms and sports equipment none B.9 Interests in insurance policies none B.10 Annuities none B.11 Interest in an education IRA none B.12 Interests in IRA, ERISA, Keogh or other pension none B.13 Stocks and Interests New Venture Finance LLC 42,998,448 New Venture Real Estate Holdings LLC 38,784,865 New Venture Real Estate Holdings (OH) LLC - New Venture Management Holdings LLC - New Venture Management Company LLC - Plasof Holdings B.V. unknown B.14 Interests in partnerships or joint ventures none B.15 Government and corporate bonds none B.16 Accounts Receivable Trade Receivables General Motors Corporation 28,477,179 Chrysler Corporation 27,049,424 Android Industries 8,461,959 Service Other 363,290 TRW Automotive Electronics 350,676 Recticel Interiors North 212,294 Jackson Plastic Inc. 160,571 Allos Corporation 156,907 Ford Motor Company 152,148 LLC AutomobilePlant-Gaz 124,698 Stellar Engineering 68,468 Autoliv 58,426 L. Lewallen Co. Inc. 68,365 Complete Prototype Services 28,087 Industrial Resin Recycling, Inc. 20,723 Bailey Hartford City - Intercompany 18,112 Isuzu Motors America 17,560 Hope Global of Detroit 15,744 Motorola - Tecstar Engineering (2,750) Plastech Corporation 10,245 Mitsubishi International Corp. 10,616 Multimatic 10,147 35 West Wilmont 8,846 Richmond Hill, Ontario, L4B 1L7 6,174 Trim X Technologies 6,199 332 Industrial Drive 6,030 Imlay, MI 48444 5,328 BATA Plastics 3,242 Baja Marine 1,085 Plastic Molding Development 781 Audiovox Corporation 1,035 Continental Plastics Co. 412 Moonroof Corp. of America 210 QEK Global Solutions (US) Inc. 180 Mopar 93 H.S. Die & Engineering 0 Western Star Trk Plt Portland (2,926) Collins & Aikman - Complete Surface Technologies - Intercompany Receivables 251,019 B.17 Alimony and support none B.18 Other Liquidated debts owing to tax refunds none B.19 Equitable or future interests none B.20 Contingent and non-contingent interests none B.21 Other contingent and unliquidated claims none B.23 Patents, copyrights and intellectual property Method of Manufacturing an InMold Laminate Component 7425122 unknown Method of Manufacturing an InMold Laminate Component 7101505 unknown A full-text copy of Patents is available for free at: http://bankrupt.com/misc/Cadence_B23Patents.pdf B.24 Customer lists none B.25 Automobiles Ford 150 18,335 Toyota Sienna 16,866 Ford Shelby unknown Ford Shelby unknown Antique Electric Car unknown 1994 Mack Tractor - 1998 Chevy Astro Van - 1994 Ford F250 - 1998 Ford F250 - 1999 Ford F450 - 2001 Western Millenium Tractor - B.26 Boats, motors and accessories none B.27 Aircraft and accessories none B.28 Office equipment, furnishings and supplies Chesterfield 2,177,393 Hillsdale 126,486 Masonic 104,356 Groesbeck 15 Malyn 0 Processing Center 0 Holly Road 0 Hartford City 0 Conneaut 0 SMC 0 B.29 Machinery and equipment used in business Chesterfield 31,259,701 Masonic 7,356,142 Hillsdale 6,014,679 Hartford City 1,992,098 Groesbeck 755,410 Malyn 97,647 Processing Center 48,276 Holly Road - Conneaut - SMC - B.30 Inventory Parts, Raw Materials, and WIP Chesterfield 9,172,299 Groesbeck 1,055,556 Masonic 1,956,132 Hillsdale 1,729,459 Hartford City 504,562 Malyn 280,520 B.31 Animals none B.32 Crops none B.33 Farming equipment none B.34 Farm supplies none B.35 Other personal property Plashof Holdings B.V. Intercompany Receivable 1,973,118 Escrow Fund Deposits 1,162,762 Various Taxing Authorities Prepayments 605,131 Various Insurance Companies Deposits 537,130 Engineering Prepayments 261,144 Cadence Innovation SRO 32,464 Commissioned Agent Prepayments 16,690 Bishop Energy Natural Gas Deposits 8,930 TOTAL SCHEDULED ASSETS $225,217,639 ======================================================== C. Property Claimed as Exempt Not Applicable D. Creditors Holding Secured Claims Bank of America NA 42,659,094 997 E 14 Mile Road Cadence LLC 1,430,686 Delta Tooling Co. 1,253,881 H.S. Die & Engineering Inc. 654,670 Trim X Technologies 324,980 RCO Engineering Inc. 270,545 Branson Automotive Group 262,385 997 E 14 Mile Road Cadence LLC 119,137 QCR Tech LLC 110,280 T A Systems Inc. 101,084 Carcoustics USA Inc. 86,245 WK Industries Inc. 74,700 Tenibac Graphion Inc. 72,265 Summit Polymers 48,962 KPI Keen Point International 42,175 Bank of America 38,200 Su Dan Corporation 35,300 SEMCO Inc. 31,013 DECO Tools Inc. 27,182 Siegel Robert Automative 25,283 Janesville Accoustics Patters 22,170 Northern Engraving Corporation 20,520 Recticel Interiors North 19,149 Mold Tech 6,000 Sellner Behr Corporation 5,954 Express Gage Inc. 2,990 Bank of America 2,163 Jenoptik Laser Technologies USA Corp. 2,050 Delphi Packard Electric System 1,365 Triway 900 Piolax Corporation 875 Bank of America, as admin. Agent unknown A & J Automation unknown Acord Holdings LLC unknown ACS Auxiliaries Group Inc. unknown AIG Commercial Equipment Finance unknown Bell Fork Lift Inc. unknown City of Fraser unknown Complete Prototype Services Inc. unknown DEMAG Plastics Group Corp. unknown Ervin Leasing Company unknown G.S. Leasing Inc. unknown GB Sales & Service Inc. unknown Hewlett Packard Financial unknown IBM Credit LLC unknown Industrial Automation LLC unknown Key Equipment Finance Inc. unknown Kimastle Corporation unknown Krauss Maffei Corporation unknown Mattson Tool & Die Corp unknown Merrill Lynch Capital unknown Metro Technologies unknown Michigan Gage & Manufacturing LLC unknown NMHG Financial Services Inc. unknown Oakwood Metal Fabricating Company unknown Orbitform Group LLC unknown Phillips Tool and Mould Windsor Limited unknown Plastic Systems unknown Reko Tool & Mould 1987 Inc. unknown Relational LLC unknown Sigma Tool unknown The Conair Group Inc. unknown Toyota Motor Credit Corporation unknown US Gauge & Fixture Inc. unknown Valiant Tool & Mold Inc. Division unknown Viking Products Inc. unknown Welsh & katz Ltd. unknown E. Creditors Holding Unsecured Priority Claims Vacation Accrual 2,049,983 Health Ins 977,390 Workers Comp 784,252 State of Michigan 533,218 City of Fraser 408,909 Charter TWP of Chesterfield 353,838 401K Withholdings 264,882 Wages Payable 260,017 Other Employee related 255,440 City of Troy 199,823 Accrued Payroll Taxes 111,135 Raj Shah 105,000 Grand Blanc Charter TWP 103,696 Charter Township of Clinton 81,623 City of Hillsdale 63,828 401k Match 60,879 Blackford County 38,786 Robert C. Trombley 1,699 Reubens Perdomo 787 City of Portland 441 Petty cash/Christine Whitehead 434 Gary Feger 412 State of Michigan CD 410 James G. Skeans 331 Dennis Schroll 327 Gerald Alexie 306 Larry Allen 253 Anne M. Kohler 200 Internal Revenue Service 160 Jack Phillips 158 State Disbursement Unit 145 Christopher Delay 138 Social Security Administration 95 State of Michigan SAC 93 State of Michigan UIA 42 Indiana State Central 41 Tracy Stortz Godin 34 Dana Leavitt 25 Village of Almont Treasurer 25 City of Hopkinsville 0 Rebecca Garcia 0 Robert Taylor 0 State of Indiana unknown State of Ohio unknown F. Creditors Holding Unsecured Nonpriority Claims Trade Debt Venture Blocker Inc. f/k/a HMC 52,065,678 New Venture Finance LLC 30,135,451 Plascore Holdings BV 21,991,816 DCX Costdowns 9,942,684 Yucaipa American Special Situations Fund I LP 6,524,796 Yucaipa American Special Situations Fund I LP 6,524,796 Ventra c/o Comerica Bank 2,483,236 New Venture Finance LLC 1,989,368 Recticel Interiors North 1,666,803 Bayer Material Science 1,457,663 Blackhawk Automotive Plastics 1,034,575 Exxon Mobil Chemical 954,105 Michigan Staffing LLC 920,185 Detroit Edison 793,193 Osullivan Films Inc. 744,103 Summit Polymers 679,075 Unique Fabricating 653,055 ADAC Plastics 551,114 Advanced Composites Inc. 528,651 Coastal Container 441,085 Emhart Teknologies Inc. 430,012 Anchor Bay Packaging 382,555 Jackson Plastics Inc. 372,168 Complete Prototype 367,594 Mico Industries Inc. 369,342 Mitsubishi Intl Polymertrade Corp. 343,175 Multimatic Inmet 326,856 Siegel Robert Automotive 307,948 Nescor Plastics Corp. 311,545 Northern Engraving Corp. 283,594 Hope Global of Detroit 275,179 Uniform Color Company 269,641 Sellner Behr Corp. 261,941 Hawk Plastics Inc. 259,078 Advanced Multi Product Group 231,541 Worwag Coatings LLC 234,072 Triangle Rubber Co LLC 213,464 Omron Dualtec Automotive 180,798 KMT Robotic Solutions Inc. 189,543 NB Coatings Inc. 177,279 ALLOS Corp. 174,182 Innatech 172,579 A Schulman Inc. 162,730 Foamade 169,102 Janesville Acoustics Patters 154,822 Android Industries of Lansing 154,080 Dove Equipment Co. Inc. 150,956 E & R Industrial 149,978 Termax Corp. 146,531 Piolax Corp. 144,891 Robert Bosch Corp. 143,662 Brown Corp. 143,526 Americhem Color 142,066 MFI McMurray Fabrics Inc. 137,500 Foster Electric America 133,373 Eleison Composites LLC 127,938 Delphi Packard Electric System 121,718 ITW Delpro 111,680 PolyOne Distribution Co. 123,200 Sova Plastics Products 115,030 Tinnerman Palnut Eng Products 114,723 Lagard Security 107,174 ALCOA Fastening Systems 102,152 Grand Blanc Charter TWP 103,696 Hyundai Autonet Co. Ltd. 103,178 Others 6,306,961 Accessed for free at: http://bankrupt.com/misc/Cadence_SchedF.pdf TOTAL LIABILITIES $211,997,639 ======================================================= About Cadence Innovation Headquartered in Troy, Michigan, Cadence Innovation LLC -- http://www.cadenceinnovation.com/-- manufactures and sells auto parts to its customers GM and Chrysler. The company has at least 4,200 employees in the United States and Europe, including Hungary and Czech Republic. The company and its debtor-affiliate, New Venture Real Estate Holdings, LLC, filed for Chapter 11 reorganization on Aug. 26, 2008 (Bankr. D. Del. Lead Case No. 08- 11973). Norman L. Pernick, Esq. and Patrick J. Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, represent the Debtors as counsel. When the Debtors filed for protection from their creditors, they listed assets of between $10 million and $50 million, and debts of between $100 million and $500 million. (Cadence Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) CADENCE INNOVATION: Files Statement of Financial Affairs -------------------------------------------------------- Cadence Innovation, LLC, disclosed that it received income from the operation of its business: Period Amount ------ ------- Jan.1, 2008 - Aug. 25, 2008 $198,930,000 2007 377,621,000 2006 335,106,000 Moreover, the Debtor received income, other than from business operations, from Third Party Other Income: Period Amount ------ ------ Jan. 1 2008 - Aug. 25, 2008 $2,055,156 Sept. 1, 2006 - Dec. 31, 2006 7,231,688 The Debtor made payments to certain creditors within 90 days prior the Petition Date, which transfers are not less than $5,475. A 53-page list of these transfers is available for free at http://bankrupt.com/misc/Cadence_PaymenttoCreditors.pdf The Debtor further made transfers to banks for debts that are not primarily consumer debts. The Bank Transfers include: Bank Amount Paid Purpose ---- ----------- ------- Bank of America #6489 $21,173 Aetna - Medical Bank of America #4919 3,153 Hewlett-Packard Financial Service JP Morgan Chase #2043 4,453 Cambridge North America - Workers' Comp. JP Morgan Chase #2043 54,991 Prudential Retirement/401K Bank of America #6489 62,388 Aetna - Medical A full-text copy of the Bank Transfers is available for free at: http://bankrupt.com/misc/Cadence_BankTransfers.pdf The Debtor stated that it made payments to insiders. A copy of the complete list of insider payments is available in the U.S. Bankruptcy Court for the District of Delaware: https://ecf.deb.uscourts.gov/ The Debtor is a defendant to 20 lawsuits and civil proceedings. A full-text copy of the list of lawsuits is available for free at: http://bankrupt.com/misc/Cadence_Lawsuits.pdf The Debtor related that it gave gifts within a year before the Petition Date to these entities: Recipient Date of Gift Value --------- ------------ ------ American Heart Association 02/29/2008 $10,000 Alliance for a Safer Greater Detroit 09/20/2007 10,000 The Debtor experienced losses totaling more than $120,000: Value of Loss Circumstance Date of Loss ------------- ------------ ------------ $50,000 Water Line Break Feb. 2008 28,000 5 Stolen HVACs Dec. 2007 15,000 Press Fire Dec. 2007 4,715 Stolen radios Dec. 2007 19,468 Auto Losses Various 12,527 Workers Compensation Various Losses The Debtor have paid certain bankruptcy professionals, a full- text copy of the payments is available for free at: http://bankrupt.com/misc/Cadence_PaymentstoProfessionals.pdf Bankruptcy professionals paid by the Debtor include: * Butzel Long * Cole Schotz * FTI Restructuring * Katten Muchin * Kramer Levin * Kurtzman Carson The Debtor disclosed that it has had an ongoing relationship with Rothschild regarding assistance with various strategic issues, but their payments have been excluded from the schedule as it is difficult to identify any bankruptcy specific assistance that may have occurred. In addition the payments to professionals are gross payments, in excess of bankruptcy and other restructuring specific assistance. The Debtor said it will provide further detail if requested. The Debtor filed a list of all setoffs made by any creditor against debts incurred by the Debtor within 90 days preceding the Petition Date: Creditor Date of Setoff Amount of Setoff -------- -------------- ---------------- Chrysler Corporation 07/08/2008 $25,883 Chrysler Corporation 07/08/2008 9,877 Chrysler Corporation 07/08/2008 30,191 Chrysler Corporation 07/16/2008 24,895 Chrysler Corporation 08/04/2008 3,927,796 Chrysler Corporation 08/04/2008 431,254 Unique Fabricating 04/01/2008 14,444 Unique Fabricating 05/01/2008 14,444 Unique Fabricating 06/01/2008 14,444 Unique Fabricating 07/01/2008 14,444 Unique Fabricating 08/01/2008 14,444 The Debtor reported a list of inventories taken of its property: Date of Inventory Supervisor Amount ----------------- ---------- ------ 12/22/2007 - Chesterfield Jeff Elliot $7,105,527 07/22/2007 - Chesterfield Jeff Elliot 4,563,714 06/20/2008 - Hartford City Mike Zartman 618,889 03/20/2008 - Hartford City Mike Zartman 566,276 05/31/2008 - Masonic Debra Skrinner 1,616,102 12/31/2007 - Masonic Debra Skrinner 2,426,143 12/28/2007 - Hillsdale Scott Morton 1,230,000 11/03/2007 - Hillsdale Scott Morton 1,324,000 12/28/2007 - Groesbeck Patti Pertile 1,313,806 07/02/2007 - Groesbeck Karen DeLisle 1,395,670 12/28/2007 - Malyn Angela Krajewski 792,113 07/02/2007 - Malyn Angela Krajewski 376,313 The Debtor has made transfers in other property including machinery and equipment and real estate to certain entities, including a real property transfer totaling $980,132 to Dale T. Slater of Fabricated Packaging Specialties Inc. A full-text copy of the Debtor's transfers of other property is available for free at: http://bankrupt.com/misc/Cadence_OtherTransfers.pdf The Debtor further explained that it retains a significant number of molds, tooling, dies and other equipment owned by the Debtor's customers. The Debtor possessed property deemed "held for another person" for (i) AT&T Capital for equipment and machinery, (ii) Baja Marie for customer supplied tooling, (iii) Chrysler Corporation for customer supplied tooling, and (iv) Ford Motor Company for customer supplied tooling. The Debtor's current shareholders are: Percentage of Stock Name Title Ownership ---- ----- ---------- ABN Amro Bank NV, London Branch Shareholder 0.7469% Ares Leveraged Investment Fund II, LP Shareholder 2.3876% Aubrey, Kirk Shareholder 0.0084% Barclays Bank, PLC Shareholder 10.8095% BDC Finance Intermediate Shareholder 1.4082% BDCM Opportunity Fund, LP Shareholder 9.6087% BDCM Partners I, LP Shareholder 0.2411% Bear Stearns & Co., Inc. Shareholder 0.0801% Bernlohr, Tim Shareholder 0.0009% Cocroft, Duncan Shareholder 0.0009% Credit Suisse First Boston International Shareholder 2.6850% Davis, Eugene Shareholder 0.0019% Fernwood Associates Shareholder 1.1935% Harbert Distressed Investment Shareholder 41.143% JP Morgan Chase Bank, NA Shareholder 2.1619% Lehman Commercial Paper, Inc. Shareholder 0.5310% Ore Hill Hub Fund, Ltd. Shareholder 4.9888% Sights, Jack Shareholder 0.0001% Sola Technology Funding II Corp. Shareholder 3.4757% Solus LLC Shareholder 0.2231% Yucaipa - Corporate Initiatives Fund Shareholder 9.1519% Yucaipa - American Special Situations Shareholder 9.1519% The Debtor's current officers and members are: Percentage of Name Title Stock Ownership ---- ----- --------------- Cynthia Bezik Current Manager 0% Jack Sights Current Manager 0% Tim Bernlohr Current Manager 0% Eugene Davis Current Manager 0% Steve Mortenson Current Manager 0% Jerry Mosingo Current Manager 0% Ed Renwick Current Manager 0% Dave Cosgrove Current Corporate Officer 0% Ronda Coogan Current Corporate Officer 0% Raj Shah Current Corporate Officer 0% Mike Selwood Current Corporate Officer 0% Jerry Mosingo Current Corporate Officer 0% Tim Bernlohr Current Board Member 0% Cynthia Bezik Current Board Member 0% Ed Renwick Current Board Member 0% Gene Davis Current Board Member 0% Steve Mortensen Current Board Member 0% Jack Sights Current Board Member 0% Jerry Mosingo Current Board Member 0% About Cadence Innovation Headquartered in Troy, Michigan, Cadence Innovation LLC -- http://www.cadenceinnovation.com/-- manufactures and sells auto parts to its customers GM and Chrysler. The company has at least 4,200 employees in the United States and Europe, including Hungary and Czech Republic. The company and its debtor-affiliate, New Venture Real Estate Holdings, LLC, filed for Chapter 11 reorganization on Aug. 26, 2008 (Bankr. D. Del. Lead Case No. 08- 11973). Norman L. Pernick, Esq. and Patrick J. Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, represent the Debtors as counsel. When the Debtors filed for protection from their creditors, they listed assets of between $10 million and $50 million, and debts of between $100 million and $500 million. (Cadence Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) CADENCE INNOVATION: Seeks to Sell 3 Michigan Plants --------------------------------------------------- Cadence Innovation, LLC, seeks permission from the U.S. Bankruptcy Court for the District of Delaware to sell three plants in Chesterfield, Hillsdale and Groesbeck, where Cadence performs the manufacturing of component parts supplied to General Motors Corporation and Chrysler LLC. The Chesterfield Plant has 1018 employees, the Groesbeck Plant has 198 employees, and the Hillsdale Plant has 190 employees. The Debtors' DIP Financing Agreement and Accommodation Agreements are conditioned on the Debtors' commitment to take actions necessary to sell all or substantially all of their businesses, pursuant to an agreed schedule which includes a October 31, 2008 deadline to execute a definitive asset purchase agreement, and to close the sale by December 15, 2008. The DIP Financing will expire no later than December 31, 2008. If a purchase offer acceptable to the Debtors is not received, the Debtors reserve the right to withdraw their Sale Motion without prejudice, and to pursue an orderly liquidation of the Plants to maximize the recoveries from those sales for the benefit of their estates and creditors. Before the Petition Date, the Debtors pursued extensive efforts to market their businesses in the U.S. and Europe, led by Rothschild, Inc. Those efforts continued after the Petition Date but Cadence did not receive an acceptable purchase offer as those purchase proposals were based on a purchase price that is less than the orderly liquidation value of the Plant assets, after deducting the estimated costs of the transaction. Moreover, with the Bank of America, N.A., the Debtors negotiated with GM with respect to a range of wind-down and liquidation issues, including the Debtors' funding requirements, and reached an agreement which included the Debtors' filing of a sale motion to make one last effort to sell the Plants as operating businesses. As of December 5, 2008, the Debtors have not received an offer to purchase the Plants on terms acceptable to them. In this light, the Debtors ask the Court's approval of (i) uniform procedures for the sale of the Plants as operating businesses, and (ii) if a purchase offer is made that is acceptable to the Debtors, the sale of the Plants to the highest and best purchase offer. Sale Procedures The Debtors propose to sell a majority but not substantially all of their assets, comprising of the assets located at the Michigan Plants, including certain owned property, company intellectual property, equipment, purchasing tooling inventory, acquired programs, purchased trade inventory, and certain Contracts to be assumed. The Debtors will notify bidders whether their bids are deemed to be Qualified Bids no later than December 15, 2008. All Qualified Bids must be submitted no later than December 12, 2008. In the event at least two Qualified Bids are received, the Debtors will conduct an Auction on December 15. Qualified Bidders must submit bids in minimum increments of at least $100,000 higher than the Initial Highest Bid, and each subsequent bid thereafter. The closing of the sale of the Michigan Plants is contemplated to occur on December 19. The Debtors intend to advise counterparties to the Contracts to be assumed and assigned as part of the Sale via a notice, including any related cure amounts. Objections to the contract assumption and assignment are due December 15. The Debtors may hold in reserve an amount equal to the claimed cure amount or consensually agree with the parties. At the Sale Hearing, the Successful Bidder will have the burden to establish requirements under Section 365 of the Bankruptcy Code as to how the purchaser will satisfy adequate assurances of future performance. A full-text copy of the Michigan Plants Asset Purchase Agreement and a schedule of the Contracts to be assumed and assigned is available for free at : http://bankrupt.com/misc/Cadence_SaleProceduresMo.pdf Responses A. ExxonMobil Chemical Company ExxonMobil complained that the Sale Motion failed to identify unequivocally which contracts will be assumed and assigned. ExxonMobil pointed out that the Motion requires it to file objections to assumption and assignment matters before actual information about the proposed assignee is provided by the Debtors. ExxonMobil argued that the objection deadline deprives it of an opportunity to file a response with respect to assumption and assignment of the Contract as well the Sale Motion. ExxonMobil thus asked the Court to extend the objection deadlines. To the extent the Debtors propose to delay payment of cure costs, Exxon asked the Court to compel the Debtors' immediate payment upon actual assumption and assignment of the Contract. B. Faurecia Interior Systems, Inc. William F. Taylor, Jr., Esq., at McCarter & English LLP, in Wilmington, Delaware, disclosed that Faurecia Interior has been discussing with the Debtors regarding its possible acquisition of certain assets contemplated in the proposed Sale. He pointed out that the Michigan Plant APA, however, differs materially and significantly from the APA negotiated by Faurecia and the Debtors. Under the Faurecia APA, cure costs and the assumption and assignment of key leases are the Debtors' responsibilities. Other material differences include indemnification escrow, due diligence and a closing date in January 2009, he added. Mr. Taylor informed the Court that Faurecia's Objection will serve as notice to parties that the Faurecia APA, should it be filed with the Court, will be materially different from the version filed by the Debtors, as Faurecia does not wish to be bound by the ill-fitting form of the Debtors' APA. C. AIG Commercial Equipment Finance AIG, a lessor, asserted that the Debtors' intent to provide information related to their proposed assignee during the Sale Hearing is unfair and inadequate. The Debtors' action precludes AIG from reviewing the assignee's ability to perform under the AIG Lease. Moreover, AIG contests the $0 cure amount designated by the Debtors to its Lease. AIG maintained that $526,437 plus other charges are owed and continued to be owed by the Debtors to it under the Lease. Accordingly, AIG asks the Court to compel the Debtors to pay the defaults under the Lease incurred before and after the actual contract assumption. Debtors to Withdraw Motion A minute entry on the hearing held December 10 referenced that the Sales Procedures Motion will be withdrawn. Prior to the December 10 hearing, Patrick J. Reilley, Esq., at Cole Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, informed the Court that the Debtors have not reached an agreement with GM and Chrysler. Assuming an agreement is reached, the hearing will go as planned, he said. According to Mr. Reilley, Roberta A. DeAngelis, Acting United States Trustee for Region 3, has also raised informal comments to the Motion. Moreover, T.A. Systems, Inc., said that the Motion did not allow it adequate notice and opportunity to object to the proposed sale, which may include TA Systems' equipment. About Cadence Innovation Headquartered in Troy, Michigan, Cadence Innovation LLC -- http://www.cadenceinnovation.com/-- manufactures and sells auto parts to its customers GM and Chrysler. The company has at least 4,200 employees in the United States and Europe, including Hungary and Czech Republic. The company and its debtor-affiliate, New Venture Real Estate Holdings, LLC, filed for Chapter 11 reorganization on Aug. 26, 2008 (Bankr. D. Del. Lead Case No. 08- 11973). Norman L. Pernick, Esq. and Patrick J. Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, represent the Debtors as counsel. When the Debtors filed for protection from their creditors, they listed assets of between $10 million and $50 million, and debts of between $100 million and $500 million. (Cadence Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) CADENCE INNOVATION: Wants Extension of Lease Decision Period ------------------------------------------------------------ Cadence Innovation, LLC, asks the U.S. Bankruptcy Court for the District of Delaware to extend its deadline to either assume or reject unexpired leases and contracts. Section 365(d)(4) of the Bankruptcy Code provides that a debtor's unexpired lease of nonresidential real property will be deemed rejected if the trustee does not assume or reject the unexpired lease by the earlier of (i) the date that is 120 days after the order for the relief, or (ii) the date of entry of an order confirming a plan. Section 365(d)(4) provides, however, that the court may extend the period prior to the expiration of the 120- day period for 90 days on the debtor's motion for cause. The Debtors' current lease decision deadline is December 24, 2008. Karen M. McKinley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A, in Wilmington, Delaware, attests that the Debtors have been pushing an extremely aggressive timeline for the marketing of their assets as well as pursuing potential purchasers that would lead to acceptable sale arrangements. Those arrangements, however, have not been reached as the Debtors still do not know what Leases, if any, a potential purchaser is interested in assuming. By this motion, the Debtors ask the Court to extend the time by which they must assume or reject these non-residential property leases they are a party to pursuant to Section 365(d)(4)(B)(1) of the Bankruptcy Code, through and including March 24, 2008: Lease Type Contract Party ---------- -------------- headquarters lease Investment Grade Loans, Inc. warehouse lease Trans Man Logistics warehouse lease Pronto Properties processing center lease Deluxe Development building lease Ercole Development lease DD Jackson warehouse lease Tri-State Investment headquarters lease Investment Grade Loans, Inc. warehouse lease Hillsdale Holdings, LLC Without the extension, the Debtors will be compelled prematurely to assume substantial, long-term liabilities under the Leases or to forfeit benefits conferred with some of the Leases to the detriment of the Debtors' ability to operate their business and to market their assets successfully, Mr. McKinley stresses. The Debtors thus seek an extension of their lease decision period to preserve the going concern value of their businesses for the benefit of all parties-in-interest. The Debtors do not believe any lessor will be prejudiced or will suffer harm as a result of the proposed extension as they intend to continue to perform obligations to the Leases during the extension period until a decision has been made with respect to the Leases. In the event any of the Leases are assumed and assigned, the lessor will receive the direct benefit of uninterrupted tenancy any cure payments paid in connection with the assumption, the Debtors assure the Court. About Cadence Innovation Headquartered in Troy, Michigan, Cadence Innovation LLC -- http://www.cadenceinnovation.com/-- manufactures and sells auto parts to its customers GM and Chrysler. The company has at least 4,200 employees in the United States and Europe, including Hungary and Czech Republic. The company and its debtor-affiliate, New Venture Real Estate Holdings, LLC, filed for Chapter 11 reorganization on Aug. 26, 2008 (Bankr. D. Del. Lead Case No. 08- 11973). Norman L. Pernick, Esq. and Patrick J. Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, represent the Debtors as counsel. When the Debtors filed for protection from their creditors, they listed assets of between $10 million and $50 million, and debts of between $100 million and $500 million. (Cadence Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) CALPINE CORP: $64-Million Debt Deal Assigned to Barclays -------------------------------------------------------- Calpine Corp. has reached a deal with Calpine Corp. regarding the assignment of proceeds from a settlement with The Bank of New York Mellon to Barclays Bank. The Bank of New York Mellon, as administrative agent for a group of lenders who provided second priority loans to Calpine before its bankruptcy filing, filed Claim No. 5692 against the Debtors. HSBC Bank USA, N.A., as indenture trustee for the second priority debtholders, also filed Claim No. 3731 against the Debtors. In September 2008, the U.S. Bankruptcy Court for the Southern District of New York entered an order approving the stipulation settling the Claims for $64,000,000. Between October 28 30, 2008, BNY sold all of its right, title and interest in $22,692,792 of the claim to Barclays Bank PLC. HSBC also transferred all of its rights, title and interest in $86,987,208 of the Claim. BNY and HSBC wish to ensure that the assignee receives all Plan distributions made on account of the claim. Thus, BNY and HSBC consent to and stipulate that all distributions pursuant to the Plan made on account of the claim will be made to the Assignee, Barclays. BNY and HSBC waive all their rights under Rule 3001 of the Federal Rules of Bankruptcy Procedures in connection with the Claims. (Calpine Bankruptcy News, Issue No. 98; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). About Calpine Based in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company and its affiliates filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2007, the Debtors disclosed total assets of $18,467,000,000, total liabilities not subject to compromise of $11,207,000,000, total liabilities subject to compromise of $15,354,000,000 and stockholders' deficit of $8,102,000,000. On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC, and Silverado Geothermal Resources, Inc., filed voluntary chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198). On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another affiliate, also filed a voluntary chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-12967). On June 20, 2007, the Debtors filed their Chapter 11 Plan and Disclosure Statement. On Aug. 27, 2007, the Debtors filed their Amended Plan and Disclosure Statement. Calpine filed a Second Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a Third Amended Plan. On Sept. 25, 2007, the Court approved the adequacy of the Debtors' Disclosure Statement and entered a written order on September 26. On Dec. 19, 2007, the Court confirmed the Debtors' Plan. The Amended Plan was deemed effective as of Jan. 31, 2008. (Calpine Bankruptcy News, Issue No. 98; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). CALPINE CORP: Court OKs Deal With Rosetta on Claim vs. Estate ------------------------------------------------------------- Judge Burton Lifland of the U.S. Bankruptcy Court for the Southern District of New York approved the terms of a settlement agreement between Calpine Corp. and Rosetta Resources, Inc. Judge Lifland also authorized the Reorganized Debtors to perform their obligations under the Settlement Agreement, the amended purchase and sale agreement, and related agreements. Rosetta is barred and permanently enjoined from asserting against the Reorganized Debtors any default, claim or liability, existing, accrued, assigned, or relating to the PSA and Related Agreements. Moreover, Judge Lifland authorized the Reorganized Debtors to complete the sale and transfer to the appropriate Rosetta entity of the properties other than the Petersen Properties, including the disputed, together with the Reorganized Debtors' remaining oil and gas assets that were owned by Calpine as of May 1, 2005, but were previously conveyed to Rosetta, without regard to whether the properties are specifically identified in the PSA, pursuant to the Conveyance Documents, the terms of the Settlement Agreement, the Amended PSA, the Plan, and the Bankruptcy Code. Wunderlich Securities analysts initiate coverage on Rosetta with a "buy." In a statement dated December 11, 2008, Wunderlich stated that "Rosetta offers investors an attractive package of geographically diverse acreage positions of long-lived reserves. A multi-year drilling inventory could expand under the company's new directives. Divestiture of non-core properties could provide additional capital to expand the development of currently owned properties and expand those properties. With the Calpine issue now resolved, we look for investors to more fully value the company's reserve position and growth potential . . . While the current macroeconomic environment presents a very unattractive backdrop for the E&P sector, on a nearer term basis we believe the longer term supply/demand outlook for the sector remains positive." Terms of Settlement The Reorganized Debtors said the settlement agreement they entered into with Rosetta resolves their disputes relating to the $27,800,000 claims Rosetta filed against the Reorganized Debtors and the fraudulent transfer lawsuit the Reorganized Debtors filed against Rosetta. The Settlement Agreement provides that the Reorganized Debtors will assume the Purchase and Sale Agreement, dated July 7, 2005, pursuant to which Calpine Corporation agreed to sell to Rosetta substantially all of its oil and gas assets. The Settlement Agreement further provides that Rosetta will pay the Reorganized Debtors $97,000,000. When Calpine filed for protection under Chapter 11 of the Bankruptcy Code in December 2005, certain issues remained unresolved with respect to the PSA, certain Related Agreements, and conveyances. Among other issues, the status of legal title to a number of the transferred properties remained unsettled. A number of the properties were not conveyed to Rosetta in accordance with the PSA. In a motion filed under Section 365 in June 2006 and the Court's corresponding orders, the Reorganized Debtors claimed title to the properties and various other. In August 2006, Rosetta filed 15 proofs of claim against the Reorganized Debtors' estate asserting a total of $27,800,000 in damages. With the exception of the properties labeled in the agreements as "Petersen properties," the Settlement Agreement provides that the Reorganized Debtors will convey to Rosetta all of their remaining oil and gas assets that were owned by Calpine as of May 1, 2005, but were not previously conveyed to Rosetta, including without regard whether the properties are specifically identified in the PSA. The effective date of ownership of the properties is May 1, 2005. The Settlement Agreement also extends for 10 years the Gas Purchase Agreement under which the Reorganized Debtors purchase natural gas from Rosetta to supply Calpine's power plants. Moreover, the Settlement Agreement provides that the parties will release each other from all existing Claims and liability arising under or in connection with the PSA and the Related Agreements. The Reorganized Debtors also seek the Court's authority to (a) assume the PSA, as amended, and the Related Agreements, and (b) transfer of the Properties free and clear of any claim or interest, including any liens, claims and encumbrances. Andrew R. McGaan, Esq., at Kirkland & Ellis, LLP, in Chicago, Illinois, tells the Court that the Settlement will bring in $97,000,000 cash to the estate; extend a valuable gas purchase agreement for ten years; and eliminate damages claims against the Reorganized Debtors arising from the gas purchase agreement. A full-text copy of the Settlement can be accessed for free at: http://bankrupt.com/misc/Calpine&RosettaSettlement.pdf About Calpine Based in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company and its affiliates filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2007, the Debtors disclosed total assets of $18,467,000,000, total liabilities not subject to compromise of $11,207,000,000, total liabilities subject to compromise of $15,354,000,000 and stockholders' deficit of $8,102,000,000. On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC, and Silverado Geothermal Resources, Inc., filed voluntary chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198). On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another affiliate, also filed a voluntary chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-12967). On June 20, 2007, the Debtors filed their Chapter 11 Plan and Disclosure Statement. On Aug. 27, 2007, the Debtors filed their Amended Plan and Disclosure Statement. Calpine filed a Second Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a Third Amended Plan. On Sept. 25, 2007, the Court approved the adequacy of the Debtors' Disclosure Statement and entered a written order on September 26. On Dec. 19, 2007, the Court confirmed the Debtors' Plan. The Amended Plan was deemed effective as of Jan. 31, 2008. (Calpine Bankruptcy News, Issue No. 98; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). CALPINE CORP: Lays Off More Than 200 Workers at Fremont Plant ------------------------------------------------------------- The Fremont News Messenger reported on December 3, 2008, that Calpine Corporation laid off more than 200 employees at its Fremont Energy Center, in Ohio that day. The news report did not disclose further details on the layoffs. Calpine sold the Fremont Project to FirstEnergy Generation Corp. for $253,600,000 in January 2008, after determining that the project was a non-strategic asset in the context of the company's successful Chapter 11 restructuring. The energy company successfully emerged from bankruptcy that same month. The Fremont Project is a partially completed natural gas-fueled power plant located in Fremont, (Sandusky County) Ohio. Fremont is a clean and highly efficient combined-cycle generating facility capable of generating 550- megawatts of baseload capacity and up to 700-megawatts of total capacity. Calpine initiated construction activities at the site in 2001 but subsequently placed the project on hold due to adverse market conditions. About Calpine Based in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company and its affiliates filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2007, the Debtors disclosed total assets of $18,467,000,000, total liabilities not subject to compromise of $11,207,000,000, total liabilities subject to compromise of $15,354,000,000 and stockholders' deficit of $8,102,000,000. On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC, and Silverado Geothermal Resources, Inc., filed voluntary chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198). On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another affiliate, also filed a voluntary chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-12967). On June 20, 2007, the Debtors filed their Chapter 11 Plan and Disclosure Statement. On Aug. 27, 2007, the Debtors filed their Amended Plan and Disclosure Statement. Calpine filed a Second Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a Third Amended Plan. On Sept. 25, 2007, the Court approved the adequacy of the Debtors' Disclosure Statement and entered a written order on September 26. On Dec. 19, 2007, the Court confirmed the Debtors' Plan. The Amended Plan was deemed effective as of Jan. 31, 2008. (Calpine Bankruptcy News, Issue No. 98; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). CALPINE CORP: Taps WestLB for Loans to Expand Deer Park Center -------------------------------------------------------------- Calpine Corporation has selected WestLB to arrange financing for the expansion of the energy company's Deer Park Energy Center near Houston in Harris County, Texas, Power Finance and Risk stated on December 11, 2008. Deer Park Energy Center is a 1,007-megawatt, low-carbon, natural gas-fired, combined-cycle cogeneration power plant located 10 miles east of Houston. The facility, which went on-line in phases between 2003 and 2004, is comprised of four gas combustion turbines and one steam turbine. Calpine currently supplies high- pressure steam to an industrial customer and sells the electricity generated to its customers in the deregulated Texas market. Calpine, in February 2007, announced today that it is moving forward with plans to expand its Deer Park Energy Center. Calpine will add the final two combustion turbines to the facility, effectively adding 400 megawatts to the capacity of the plant. About Calpine Based in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company and its affiliates filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2007, the Debtors disclosed total assets of $18,467,000,000, total liabilities not subject to compromise of $11,207,000,000, total liabilities subject to compromise of $15,354,000,000 and stockholders' deficit of $8,102,000,000. On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC, and Silverado Geothermal Resources, Inc., filed voluntary chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198). On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another affiliate, also filed a voluntary chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-12967). On June 20, 2007, the Debtors filed their Chapter 11 Plan and Disclosure Statement. On Aug. 27, 2007, the Debtors filed their Amended Plan and Disclosure Statement. Calpine filed a Second Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a Third Amended Plan. On Sept. 25, 2007, the Court approved the adequacy of the Debtors' Disclosure Statement and entered a written order on September 26. On Dec. 19, 2007, the Court confirmed the Debtors' Plan. The Amended Plan was deemed effective as of Jan. 31, 2008. (Calpine Bankruptcy News, Issue No. 98; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). CAPITAL AUTO: Fitch Affirms 'BB' Rating on Class D Notes -------------------------------------------------------- Fitch Ratings affirms the Capital Auto Receivables Asset Trust 2007-4 transaction: -- Class A-2a notes at 'AAA'; -- Class A-2b notes at 'AAA'; -- Class A-3a notes at 'AAA'; -- Class A-3b notes at 'AAA'; -- Class A-4 notes at 'AAA'; -- Class B notes at 'A'; -- Class C notes at 'BBB'; -- Class D notes at 'BB'. The rating affirmation is a result of continued available credit enhancement. The collateral continues to perform within Fitch's expectations and, under the credit enhancement structure, the securities can withstand stress scenarios consistent with the current ratings and still make full payments to investors in accordance with the terms of the documents. CDX GAS: Files for Chapter 11 Bankruptcy in Texas ------------------------------------------------- CDX Gas LLC, together with certain of its affiliated entities and Subsidiaries, filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas, Houston Division. Bloomberg News' Christopher Scinta related that the company had defaulted on its credit agreement. A forbearance agreement between the company and its first-lien lenders was to expire Friday and another with second-lien lenders would expire Jan. 7, 2009, Mr. Scinta citing papers filed with the Court. The company expected its lenders to exercise all their available remedies as a result of the default, Mr. Scinta notes. According to Bloomberg, the company listed assets and debts between $500 million and $1 billion each. The company said will continue normal business operations throughout the bankruptcy process while it develops a reorganization plan with its senior and junior secured lenders, as well as its senior subordinated note holders, to restructure debt and to resolve liquidity issues. About CDX Gas Headquartered in Houston, Texas, CDX Gas LLC -- http://www.cdxgas.com/-- is an independent gas company that explores, develops, and produces onshore North American unconventional natural gas resources located in coal, shale, and tight gas sandstone formations. CDX GAS: Voluntary Chapter 11 Case Summary ------------------------------------------ Debtor: CDX Gas, LLC 1001 McKinney Street Houston, TX 77002 Bankruptcy Case No.: 08-37922 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- CD Exploration, LLC 08-37931 CDX Acquisition Company, LLC 08-37930 CDX Barnett, LLC 08-37932 CDX Bisho Creek, LLC 08-37933 CDX East, LLC 08-37934 CDX Gas International, LLC 08-37936 CDX Minerals, LLC 08-37938 CDX North America, LLC 08-37939 CDX Operating, LLC 08-37940 CDX Panther, LLC 08-37941 CDX Plum Creek, JV 08-37944 CDX Services, LLC 08-37945 CDX Shale, LLC 08-37946 CDX Tapicito, LLC 08-37947 CMV Joint Venture 08-37951 CDX Isolate, LLC 08-37937 CDX Sequoya, LLC 08-37949 Type of Business: CDX Gas is an independent energy company focused on the exploration, development and production of onshore North American unconventional natural gas resources located in coal, shale and tight gas sandstone formations. Chapter 11 Petition Date: December 12, 2008 Court: Southern District of Texas (Houston) Judge: Letitia Z. Clark Debtor's Counsel: Harry Allen Perrin, Esq. hperrin@velaw.com Vinson Elkins LLP 1001 Fannin, First City Tower, Suite 2500 Houston, TX 77002 Tel: (713) 758-2548 John E. Mitchell, Esq. jmitchell@velaw.com Vinson & Elkins, LLP 2001 Ross Ave., Suite 3700 Dallas, TX 75201 Tel: (214) 220-7700 Fax: (214) 220-7716 Michaela Christine Crocker, Esq. mcrocker@velaw.com Vinson Elkins LLP 2001 Ross Ave., Suite 3700 Dallas, TX 75201 Tel: (214) 220-7787 Fax: (214) 999-7787 Estimated Assets: $500,000,000 to $1,000,000,000 Estimated Debts: $500,000,000 to $1,000,000,000 The Debtor did not file a list of 20 largest unsecured creditors. The petition was signed by Robert R. McBride, Jr., president of the company. CHARTER COMMUNICATIONS: Lazard to Start Talks With Bondholders -------------------------------------------------------------- Charter Communications, Inc., has asked its financial advisor, Lazard LLC, to initiate discussions with the company's bondholders about financial alternatives to improve the company's balance sheet. Charter Communications' Neil Smit said, "We believe engaging in discussions with our bondholders, aimed at improving our capital structure and enhancing our financial flexibility, is in the Company's and our customers' best interests. In the third quarter 2008, revenues increased 7.3%, and net customer additions increased more than 50% year over year. Our objective in these discussions is to improve our balance sheet, which will better position Charter for the future, while we continue to focus on delivering quality service to our customers and growing our business." Charter Communications noted that its cash on hand and cash equivalents as of Dec. 10, 2008, was in excess of $900 million, which is available to pay operating costs and expenses. Kathy Shwiff at The Wall Street Journal reports that the planned talks have fueling concerns on Charter Communications' possible bankruptcy. According to the report, Charter Communications warned earlier this year that it might have to seek bankruptcy protection if it failed to raise additional funds for its cash needs by 2010. About Charter Communications Headquartered in St. Louis, Missouri, Charter Communications Inc. (Nasdaq: CHTR) -- http://www.charter.com/-- is a broadband communications company and the third-largest publicly traded cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. As reported by the Troubled Company Reporter on Nov. 11, 2008, Charter Communications' balance sheet at Sept. 30, 2008, showed total assets of $15.1 billion, total liabilities of $23.9 billion, resulting in a shareholders' deficit of $8.8 billion. CHARTER COMM: Moody's Cuts Probability-of-Default Rating to Ca -------------------------------------------------------------- Moody's Investors Service lowered the Probability-of-Default Rating for Charter Communications, Inc., to Ca from Caa2 and placed all ratings (other than the SGL3 Speculative Grade Liquidity Rating) for the Company and its subsidiaries under review for possible downgrade. The rating actions are prompted by the announcement that financial advisors have been engaged to initiate discussions with bondholders. "Charter's ratings have long reflected a high probability of default and a fundamental mismatch between the Company's liability structure and its business model," noted Moody's Senior Vice President Russell Solomon. The Ca PDR specifically reflects Moody's expectation that default (beyond those that occurred via various distressed exchanges over the last couple of years) is imminent and that a restructuring of the company's balance sheet via some form of a much more material distressed exchange and/or bankruptcy filing is likely to occur pre-emptively in 2009, notwithstanding the sufficiency of liquid resources to maintain operations into 2010. Given the current state of the capital markets, Moody's believes that some meaningful restructuring may now finally be more palatable for all affected parties, although the complexity posed by the company's multiple creditor classes may render an in-court restructuring process as the more likely format for resolution in Moody's estimation. The review will focus on the materiality of financial deleveraging that can be effected via a restructuring and the specific form that such a restructuring is likely to take. "Moody's continues to believe that at least $7 billion of the company's approximately $22 billion of rated debt obligations needs to be equitized," noted Mr. Solomon. Debt reduction of this magnitude should sufficiently mitigate (if not entirely eliminate) the company's highly cash absorptive financial profile, which historically has been significantly constrained by heavy debt service costs related to its excessively leveraged and unsustainable capital structure. Moreover, rising debt service costs following heavy but necessary capital investment activity and ensuing liquidity-enhancing debt exchanges (albeit at higher interest rates) over the past few years have at times outpaced operational improvements. Depending on the final construct of the expected restructuring -- specifically the magnitude of change in junior-ranking liabilities which are the primary candidates for loss absorption -- and given the historical positioning of ratings in contemplation of this eventuality, the magnitude of requisite downgrades for any given credit class is expected to be minimal (and some ratings, with a specific bias towards the senior-most secured claims, may be just as likely to be confirmed at current levels). Moody's ratings for Charter Communications: Charter Communications, Inc. -- Caa1 corporate family rating, review for downgrade; -- probability-of-default rating cut to Ca from Caa2, review for downgrade; and -- senior unsecured notes rated Ca (LGD5 -- 87%), review for Downgrade; Charter Communications Holdings, LLC -- senior unsecured notes rated Ca (LGD5 -- 85%), review for downgrade CCH I Holdings, LLC -- senior unsecured notes rated Caa3 (LGD5 -- 77%), review for downgrade CCH I, LLC -- senior secured notes rated Caa3 (LGD4 -- 60%), review for Downgrade; CCH II, LLC -- senior unsecured notes rated Caa2 (LGD3 -- 42%), review for downgrade CCO Holdings, LLC -- senior unsecured notes rated Caa1 (LGD3 -- 34%), review for downgrade; and -- senior secured (1st lien - stock only) term loan rated B3 (LGD2 -- 29%), review for downgrade Charter Communications Operating, LLC -- senior secured (2nd lien - all assets) notes rated B3 (LGD2 -- 23%), review for downgrade; -- senior secured (1st lien - all assets) revolver & term loan rated B1 (LGD1 -- 6%), review for downgrade; and -- speculative grade liquidity rating at SGL-3, unchanged. The last rating action for Charter Communications was on July 2, 2008, when Moody's affirmed the company's Caa1 corporate family rating and its Caa2 Probability-of-Default Rating. Headquartered in St. Louis, Missouri, Charter Communications is a domestic multiple system cable operator serving approximately 5.1 million basic video subscribers. CITADEL INVESTMENT: Halts Withdrawal from 2 Largest Hedge Funds --------------------------------------------------------------- Citadel Investment Group has prevented investors from withdrawing any money from its two biggest hedge funds until the end of March 2009, Jenny Strasburg at The Wall Street Journal reports. Citing Citadel Investment, WSJ relates that investors can't withdraw money at year-end from Kensington and Wellington, with a combined $10 billion in assets. The report says that Citadel Investment wants to prevent the withdrawal of a total of $1.2 billion, which would complicate its attempt to resuscitate its performance. According to WSJ, the move reflects increased strain on Citadel Investment after its funds dropped almost 50% in 2008 on investment losses. WSJ states that Citadel Investment had repeatedly assured earlier that redemption requests wouldn't be a problem. Citadel Investment's total assets have declined to $13 billion from $20 billion at the start of 2008, says WSJ. In today's highly volatile markets, maintaining financial flexibility must be a priority," WSJ quoted Citadel founder Kenneth Griffin as saying. Citadel Investment executives including Mr. Griffin have helped absorb between $300 million and $500 million in expenses that the company would normally charge investors, WSJ relates. The report says that when the Kensington and Wellington hedge funds declined 16% and 22%, respectively, during September and October, money was returned to clients. As reported by the Troubled Company Reporter on Dec. 9, 2008, Citadel Investment planned to close down its Tokyo office and Asian principal investments operations by year-end, affecting about 37 jobs in the region (12 in Tokyo and 25 in Hong Kong) while Nick Taylor, who heads the principal investments division in Asia and Europe, will be leaving the firm. Citadel will retain 25 to 30 employees in Hong Kong where its Asian investments will be run in the future. The TCR reported on Nov. 12, 2008, that Citadel Investment will shut down its CIG Reinsurance Ltd. in Bermuda. Mr. Griffin had planned to turn Citadel Investment into a public company, but the plan was put on hold as due to market woes this year, WSJ reports. Headquartered in Chicago, Illinois, USA, Citadel Investment Group, L.L.C. -- http://www.citadelgroup.com/-- is a hedge fund company. The company also acts as a market maker on smaller exchanges for some blue-chip stocks. It currently manages some US$17 billion for a wide range of investors. CITIGROUP INC: Settles w/ SEC, Buys Back $7 Bil. of Securities -------------------------------------------------------------- Liz Rappaport at The Wall Street Journal reports that Citigroup Inc., along with UBS AG, will buy back billions of dollars of illiquid auction-rate securities from hundreds of clients under settlements with the Securities and Exchange Commission. Ronald D. Orol at MarketWatch relates that the SEC asked Citigroup and UBS on Thursday to buy back about $30 billion in auction-rate- securities. MarketWatch states that under the agreement, Citigroup will buy back about $7 billion of securities from retail investors, charitable organizations, and small businesses that lost on the investments. UBS, says MarketWatch, would purchase about $22.7 billion of the same type of shares from clients that invested in auction-rate securities. The SEC reports that the settlements resolve its charges that Citigroup and UBS misled investors regarding the liquidity risks associated with auction rate securities (ARS) that they underwrote, marketed and sold. Previously, on Aug. 7 and 8, 2008, the SEC's Division of Enforcement disclosed preliminary settlements with Citigroup and UBS, respectively. According to the SEC's complaints, filed in federal court in New York City, Citigroup and UBS misrepresented to customers that ARS were safe, highly liquid investments that were comparable to money markets. Court documents say that in late 2007 and early 2008, the firms knew that the ARS market was deteriorating, causing the firms to have to purchase additional inventory to prevent failed auctions. At the same time, the firms knew that their ability to support auctions by purchasing more ARS had been reduced, as the credit crisis stressed the firms' balance sheets. The complaints allege that Citigroup and UBS failed to make their customers aware of these risks. In mid-February 2008, according to the complaints, Citigroup and UBS decided to stop supporting the ARS market, leaving tens of thousands of Citigroup and UBS customers holding tens of billions of dollars in illiquid ARS. "Today's settlements are the largest in SEC history, and represent the largest return of customer money in the agency's 75 years," said SEC Chairperson Christopher Cox. "The Commission's prompt action after the auction rate securities market froze in February of this year, which led to last summer's settlements in principle, helped restore liquidity to tens of thousands of investors. Every one of the investors covered by these settlements will be able to receive 100 cents on the dollar on their ARS investments." Linda Chatman Thomsen, Director of the SEC's Division of Enforcement, said, "The SEC will continue to aggressively investigate whether other broker-dealers and individuals have failed to disclose to investors material risks about ARS that they marketed and sold. We also look forward to finalizing the four other settlements-in-principle that the Division has entered into with Bank of America, RBC Capital Markets, Merrill Lynch and Wachovia." The settlements, which are subject to court approval, will restore approximately $7 billion in liquidity to Citigroup customers who invested in ARS, and $22.7 billion to UBS customers who invested in ARS. Without admitting or denying the SEC's allegations, Citigroup and UBS agreed to be permanently enjoined from violations of the broker-dealer fraud provisions and to comply with a number of undertakings. Investors should review the full text of the consents executed by Citigroup and UBS. The Citigroup settlement provides, among other things, that: -- Citigroup will offer to purchase ARS at par from individuals, charities, and small businesses that purchased those ARS from Citigroup, even if those customers moved their accounts. -- Citigroup will use its best efforts to provide liquidity solutions for institutional and other customers, including, but not limited to, facilitating issuer redemptions, restructurings, and other reasonable means, and will not take advantage of liquidity solutions for its own inventory before making those solutions available to these customers. -- Citigroup will pay eligible customers who sold their ARS below par the difference between par and the sale price of the ARS. -- Citigroup will reimburse eligible customers for any excess interest costs associated with loans taken out from Citigroup due to ARS illiquidity. The UBS settlement provides, among other things, that: -- UBS will offer to purchase at par from all current or former UBS customers who held their ARS at UBS as of Feb. 13, 2008, or purchased their ARS at UBS between Oct. 1, 2007 and Feb. 12, 2008, even if they moved their accounts. Different categories of customers will receive offers from UBS at different times. -- UBS will not liquidate its own inventory of a particular ARS without making that liquidity opportunity available, as soon as practicable, to customers. -- UBS will pay eligible customers who sold their ARS below par the difference between par and the sale price of the ARS. -- UBS will reimburse customers for any excess interest costs incurred by using UBS's ARS loan programs. Investors, in most instances, will receive correspondence from Citigroup and UBS, and that they must advise the respective firm that they elect to participate in these settlements, or they could lose their rights to sell their ARS. Further, if eligible customers incurred consequential damages because of the illiquidity of their ARS, they may participate in special FINRA arbitrations. Citigroup and UBS will also be permanently enjoined from violating the provisions of Section 15(c) of the Exchange Act of 1934, which prohibit the use of manipulative or deceptive devices by broker- dealers. Both firms also face the prospect of financial penalties to the SEC. After the buy back periods are substantially complete, the SEC may consider imposing a financial penalty against Citigroup and UBS based on the traditional factors the SEC considers for penalties and based on whether the individual firm has fulfilled its obligations under its settlement agreement. Customers with questions about these settlements may contact Citigroup or UBS through the firms' websites, or call the firms at the following toll-free telephone numbers: -- Citigroup: 1-866-720-4802 -- UBS: 1-800-253-1974 The SEC notes the substantial assistance and cooperation from the New York Attorney General, the Financial Industry Regulatory Authority (FINRA), the Texas State Securities Board, and the North American Securities Administrators Association (NASAA). The SEC's investigation of the auction rate securities market is continuing. WSJ relates that Citigroup has already repurchased about $6.2 billion of auction-rate securities out of an estimated $7 billion covered by the settlement. A Citigroup spokesperson said that the bank is trying to clean up problems for customers that have more than $10 million at the bank, the report states. Citigroup and UBS, according to WSJ, also reached settlements with the New York Attorney General Andrew Cuomo and state securities regulators. Based in New York, Citigroup Inc. (NYSE: C) -- http://www.citigroup.com-- is organized into four major segments -- Consumer Banking, Global Cards, Institutional Clients Group, and Global Wealth Management. Citi had $2.0 trillion in total assets on $1.9 trillion in total liabilities as of Sept. 30, 2008. As reported in the Troubled Company Reporter on Nov. 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. As part of the agreement, the U.S. Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of approximately $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup will issue preferred shares to the Treasury and FDIC. In addition and if necessary, the Federal Reserve will backstop residual risk in the asset pool through a non-recourse loan. CHRYSLER LLC: Auto Aid Rejected by Senate; Access to TARP Mulled ---------------------------------------------------------------- Greg Hitt, Jeffrey McCracken, and John D. Stoll at The Wall Street Journal report that the U.S. Senate has rejected the $14 billion financial assistance for General Motors Corp., Chrysler LLC, and Ford Motor Co. As reported by the Troubled Company Reporter on Dec. 11, 2008, The House of Representatives passed the bill on the government financial assistance being requested by GM, Ford Motor, and Chrysler. The bill states that the U.S. president will appoint one or more officers from the Executive Branch to facilitate the restructuring necessary to achieve the long-term financial viability of the automakers. WSJ relates that the bill failed due to a dispute within the Senate over the wages paid to the companies' workers. Citing Senate Majority Leader Harry Reid, the report says that the Senate would be in recess, and would stand in pro forma session until January 2009. According to WSJ, only a few Republicans had been willing to back the rescue package, while others raised concerns about government intervention in the marketplace and demanded that the bill be strengthened to exact concessions from the industry. Access to $700BB Financial-Rescue Plan John D. McKinnon, Deborah Solomon, and Greg Hitt at WSJ report that the White House said on Friday that it would consider letting GM, Chrysler, and Ford Motor access the $700 billion financial- rescue plan. The government's $700 billion Troubled Asset Relief Program was approved in October and was intended for financial institutions. Citing a person familiar with the matter, WSJ relates that the loans to be offered could be lesser than the $14 billion financial assistance. According to the report, the source said that it could be closer to $8 billion and GM would be a recipient. The report says that GM is hoping for about $10 billion. WSJ states that Chrysler's parent Cerberus Capital Management was criticized for not bailing out its own company, while Ford Motor said that it doesn't need a short-term lifeline and is seeking for loans in case the market worsens. GM & Chrysler May Fail to Pay $9BB in Bills From Suppliers Sharon Terlep at WSJ relates that after the Senate denied the government bailout, GM and Chrysler may not be able to pay the $9 billion in bills for already-delivered auto parts. According to WSJ, the impending payments to suppliers account for almost half the cash GM had available at the end of the third quarter. Suppliers, says WSJ, might tighten payment terms, which would accelerate the erosion of cash from the auto makers. WSJ quoted United Auto Workers President Ron Gettelfinger as saying, "We need to satisfy suppliers that there is going to be a tomorrow. If suppliers believe they can't operate, what are they going to do? They aren't going to deliver the goods. If they don't deliver the goods, the plants go down." Chrysler CEO Asks Workers to Cut Costs Dow Jones Newswires reports that Chrysler CEO Bob Nardelli asked workers on Friday to help the company save money. Chrysler is in talks with the White House and the U.S. Treasury over giving the automakers access to the $700 billion Troubled Assets Relief Program for financial institutions, Dow Jones states, citing Mr. Nardelli. Dow Jones quoted Mr. Nardelli as saying, "We will continue to make our case in Washington that an immediate, short-term bridge loan is critical for Chrysler to survive the current financial crisis and is just as important to the health of the overall American economy. While a bridge loan is critical to manage through this financial crisis, we must continue to manage the factors under our control." According to Dow Jones, Mr. Nardelli said Chrysler is also talking to the incoming Barack Obama administration over the industry's long-term needs, assuring that the administration is "aware of the importance of addressing the short-term and long-term viability of our industry and our company." 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 Dec. 3, 2008, Dominion Bond Rating Service downgraded the ratings of Chrysler LLC, including Chrysler's Issuer Rating to CC from CCC (high). Chrysler's First Lien Secured Credit Facility and Second Lien Secured Credit Facility have also been downgraded to CCC and CC (low) respectively. All trends are Negative. The ratings action reflects Chrysler's challenge to maintain sufficient liquidity balances amid severe industry conditions that have deteriorated alarmingly over the past few months and are not expected to improve in the near term. With this ratings action, Chrysler is removed from Under Review with Negative Implications, where it was placed on Nov. 7, 2008. 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. As reported in the TCR on Dec. 3, 2008, Dominion Bond Rating Service downgraded on Nov. 20, 2008, the ratings of Chrysler LLC, including Chrysler's Issuer Rating to CC from CCC (high). Chrysler's First Lien Secured Credit Facility and Second Lien Secured Credit Facility have also been downgraded to CCC and CC (low) respectively. All trends are Negative. The ratings action reflects Chrysler's challenge to maintain sufficient liquidity balances amid severe industry conditions that have deteriorated alarmingly over the past few months and are not expected to improve in the near term. With this ratings action, Chrysler is removed from Under Review with Negative Implications, where it was placed on Nov. 7, 2008. COMPTON PETROLEUM: S&P Downgrades Corporate Credit Rating to 'B' ---------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its long-term corporate credit rating on Calgary, Alberta-based Compton Petroleum Corp. to 'B' from 'B+' following a review of the company's current and prospective business risk and financial risk profiles. At the same time, S&P lowered its senior unsecured debt rating on subsidiary Compton Petroleum Finance Corp. to 'B-' from 'B'. The recovery rating of '5' is unchanged. S&P removed the ratings from CreditWatch, where they were placed with developing implications June 12, 2008. The outlook is stable. "Our decision to lower the ratings on Compton reflects the company's inability to show any meaningful production growth and its increasing operating cost profile," said S&P's credit analyst Jamie Koutsoukis. "Furthermore, although the company intends to match its capital budget to expected cash flow in 2009, its high debt levels and the current low commodity price environment limits its financial flexibility," Ms. Koutsoukis added. In S&P's view, the ratings on Compton reflect the company's high debt, its limited financial flexibility, its increasing operating cost profile, its inability to increase production despite a large resource base, and concerns regarding the company's strategic direction following the terminated sales process. Offsetting positive factors, in S&P's opinion, include Compton's strong internal growth prospects and good resource base provide some credit strength. The stable outlook reflects S&P's expectation that Compton will limit its spending to internal cash flow and maintain production at current levels. Furthermore, S&P does not expect that the company will encounter liquidity issues and could fund any negligible operating shortfalls through its available credit facilities. A negative rating action is possible should Compton not maintain production levels while generating meaningful negative free cash flow. The rating does not have room for debt to increase much beyond S&P's expected C$900 million level for 2009. Conversely, although not probable in the near term, an upgrade or outlook revision to positive would depend on Compton's ability to convert its sizable reserves base into production and cash flow growth and improve and sustain its coverage and debt-to- cash flow metrics, particularly its total debt-to-EBITDA ratio somewhere near 2.0x-2.5x. COMPTON PETROLEUM FINANCE: S&P Cuts Sr. Unsec. Debt Rating to B- ---------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its long-term corporate credit rating on Calgary, Alberta-based Compton Petroleum Corp. to 'B' from 'B+' following a review of the company's current and prospective business risk and financial risk profiles. At the same time, S&P lowered its senior unsecured debt rating on subsidiary Compton Petroleum Finance Corp. to 'B-' from 'B'. The recovery rating of '5' is unchanged. S&P removed the ratings from CreditWatch, where they were placed with developing implications June 12, 2008. The outlook is stable. "Our decision to lower the ratings on Compton reflects the company's inability to show any meaningful production growth and its increasing operating cost profile," said S&P's credit analyst Jamie Koutsoukis. "Furthermore, although the company intends to match its capital budget to expected cash flow in 2009, its high debt levels and the current low commodity price environment limits its financial flexibility," Ms. Koutsoukis added. In S&P's view, the ratings on Compton reflect the company's high debt, its limited financial flexibility, its increasing operating cost profile, its inability to increase production despite a large resource base, and concerns regarding the company's strategic direction following the terminated sales process. Offsetting positive factors, in S&P's opinion, include Compton's strong internal growth prospects and good resource base provide some credit strength. The stable outlook reflects S&P's expectation that Compton will limit its spending to internal cash flow and maintain production at current levels. Furthermore, S&P does not expect that the company will encounter liquidity issues and could fund any negligible operating shortfalls through its available credit facilities. A negative rating action is possible should Compton not maintain production levels while generating meaningful negative free cash flow. The rating does not have room for debt to increase much beyond S&P's expected C$900 million level for 2009. Conversely, although not probable in the near term, an upgrade or outlook revision to positive would depend on Compton's ability to convert its sizable reserves base into production and cash flow growth and improve and sustain its coverage and debt-to- cash flow metrics, particularly its total debt-to-EBITDA ratio somewhere near 2.0x-2.5x. COPIA: May Close Permanently After Court Rejects Plea for Loan -------------------------------------------------------------- Betty Hallock posted at the Los Angeles Times blog that the U.S. Bankruptcy Court for the Northern District of California has rejected Copia's request for approval on a $2 million line of credit. According the LA Times blog, Copia will use the loan to in its operations and in payments for workers and vendors. The LA Times blog says that creditor ACA Financial Guaranty Corp. objected to Copia's motion to incur debt. As reported by the Troubled Company Reporter on Dec 10, 2008, ACA Financial asked the Court to deny Copia's petition for Chapter 11 bankruptcy protection, claiming that Copia's bankruptcy is an attempt to relieve its debt at the creditors' expense so it can become a for- profit enterprise. The LA Times blog states that Copia had also sought a $2 million line of credit so it could continue operating and pay employees and vendors. According to The Napa Valley Register, Copia will close for good. The LA Times blog relate that Copia officials had said when the company filed for Chapter 11 protection that the closure was temporary. The Register quoted Copia Chief Financial Officer Joe Fischer as saying, "At this time, it is highly unlikely that Copia will continue in any form other than to orderly wind down operations." The LA Times states that the next hearing will be on Dec. 19. Copia is a culinary museum and cultural center in Napa, California. It includes a grand building on the Napa River, organic gardens, outdoor kitchens, wine tasting rooms, exhibition galleries and a restaurant called Julia's Kitchen. As reported in the Troubled Company Reporter on Dec. 3, 2008, Copia filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of California on Dec. 1, 2008. CREDIT GENESIS: Moody's Cuts Rating on $23MM Class B Notes to Ba1 ----------------------------------------------------------------- Moody's Investors Service has downgraded its rating of this class of notes issued by Credit Genesis CLO 2005-1 Ltd. and left the rating on review for possible further downgrade: Class Description: US$23,000,000 Class B Term Notes Due 2010 -- Prior Rating: A2, on review for possible downgrade -- Prior Rating Date: 10/10/2008 -- Current Rating: Ba1, on review for possible downgrade Credit Genesis CLO 2005-1 Ltd. is a market value collateralized loan obligation transaction backed primarily by bank loans. Moody's explained that the rating action reflects deterioration in the market value of the underlying collateral pool as well as the increased volatility and decreased liquidity in the bank loan market. DOUGLAS BOOKER: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Douglas Kent Booker dba BOOKER DEVELOPMENT, LLC aka DOUG K BOOKER dba BOOKER & SON PAINTING COMPANY, LLC dba BUMBLEBEE CONSTRUCTION, LLC. dba BOOKER CORPORATION dba A PERFECT DOOR, LLC dba BOOKER CONSTRUCTION, LLC 13226 W BEVERLY RD GOODYEAR, AZ 85338 Case No.: 08-17961 Chapter 11 Petition Date: December 11, 2008 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Debtor's Counsel: CHARLES 2 FIRESTEIN, Esq. 1300 E. MISSOURI AVE., #D-200 PHOENIX, AZ 85014 Tel: 602-235-9000 Fax: 602-235-9040 Email: charles@firesteinpc.com Total Assets: $2,849,506 Total Debts: $1,925,730 A list of the Debtor's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/azb08-17961.pdf EASTMAN KODAK: S&P Cuts Corp. Credit Rating to 'B'; WatchNeg. ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and issue-level ratings on Eastman Kodak Co. by one notch. The corporate credit rating was lowered to 'B' from 'B+'. These ratings remain on CreditWatch with negative implications, where they were initially placed Nov. 3, 2008, because of the company's significant downward revision in earnings guidance in October. The recovery ratings on the senior secured debt remain at '1', reflecting S&P's expectation of very high recovery (90%-100%) in the event of a payment default, and the recovery ratings on the unsecured debt remain at '5', reflecting S&P's expectation of modest recovery (10%-30%) in the event of a payment default. Upon resolution of the CreditWatch status, S&P could revise the recovery ratings if S&P's valuation assumptions change. Rochester, New York-based Eastman Kodak had $1.3 billion in debt at Sept. 30, 2008. "The ratings downgrade reflects the company's announcement that it has now withdrawn its guidance, and this presents significant uncertainty, magnified by the recession," said S&P's credit analyst Tulip Lim. "We expect that consumers will pull back on leisure expenditures, and that Kodak's businesses customers' budgets will be strained, opening the possibility of significant earnings disappointments." Kodak stated that the economy and credit market conditions have affected its business, and it now expects revenue growth, earnings from operations, and cash flow generation to be even below its October downward forecast. Management is taking measures, including cost-cutting efforts to address the situation; however, S&P is concerned these efforts may be undermined by declining demand and the recession. The expected underperformance highlights its ongoing concerns regarding the company's increasing reliance on its digital businesses while its higher-margin traditional imaging business declines. S&P expects that Kodak will have significant negative discretionary cash flow in full-year 2008. The company's cash balance at Sept. 30, 2008, remained substantial, at $1.8 billion. Although Kodak has indicated that it wants to maintain at least a $1 billion cash balance to finance seasonal working capital needs, its cash position could quickly diminish if discretionary cash flow deficits widen, especially given its dividend rate of more than 25% of EBITDA in the 12 months ended Sept. 30. The company stated in late October 2008 that it did not plan to change its dividend policy. The company repurchased $219 million of its common stock in the nine months ended Sept. 30. In resolving the CreditWatch listing, S&P will assess the company's near-term earnings and cash flow prospects. Financial policy and liquidity will be key considerations. Near-term maturities are modest. Significant maturities include $575 million of convertible bonds, which are putable in 2010. EL PASO: Files Amended Chapter 11 Plan and Disclosure Statement --------------------------------------------------------------- El Paso Chile Company, Inc. and Desert Pepper filed with the U.S. Bankruptcy Court for the Western District of Texas an amended Chapter 11 Plan and Disclosure Statement explaining said Plan. Funding of the Plan Payments to creditors will be made from future earnings of the Debtor and liquidation of various real properties owned by the Debtors and United Gourmet, L.P., the land holding aspect of the Debtors' overall operations and owner of the Fred Wilson property from which the Debtors operate. Treatment of Claims All Allowed Administrative Claims, including Fee Requests, shall be paid in full on the later of (i) the Effective Date, or (ii) within thirty days after the Administrative Claim becomes an Allowed Claim. Each holder of an Allowed Tax Claim arising before the Petition Date shall be paid in equal monthly installments of principal and interest over a period of 5 years from the date of assessment of the taxes. The Debtors' Amended Plan provides for 7 classes of Claims. Except for Classes 4 and 5, all Classes are impaired under the Plan. Class 4 consist of the Secured Claim of Berlin Packaging, LLC in the amount of $48,474. Berlin shall receive in full satisfaction of its claim the molds and bottle cap inventory securing its claim. Class 5 consist of the claims of Bank of the West in the amount of $19,475 secured by a lien on a 2006 Chrysler 300 automobile. Bank of the West will continue to receive monthly payments of $597.74 until maturity on July 12, 2011. Class 1 claims include the secured claim of the City of El Paso in the amount of $11,014 for ad valorem taxes on the Debtor's property situated in the City of El Paso, El Paso County, Texas, covering tax year 2008. The City of El Paso's allowed claim will be paid in full in 60 equal monthly installments, with the first payment to be made on the Plan's Effective Date. Class 2 consist of the secured claim of Sovereign Business Credit, a division of Sovereign Business Capital. The full allowed amount of Sovereign's secured claims in the approximate amount of $2,334,475, plus accrued unpaid interest, charges, and other fees shall be paid by means of the sale of the real property located at 4707 Fred Wilson Drive in El Paso, Texas, and quarterly distributions in the amounts and on the dates set forth below: 12/31/2008 $300,000 3/15/2009 $100,000 4/14/2009 $200,000 6/15/2009 $100,000 9/15/2009 $100,000 12/15/2009 $100,000 1/15/2010 $700,000 4/15/2010 $100,000 6/15/2010 $100,000 9/15/2010 $100,000 12/15/2010 $100,000 3/15/2011 $100,000 6/15/2011 $100,000 9/15/2011 $100,000 12/15/2011 $100,000 3/15/2012 $128,255 In the event that the Fred Wilson property is not sold within two years of the Effective Date of the Plan of Reorganization, the remaining balance due and owing to Sovereign will be paid out over an additional 24 months by means of equal quarterly installments. The outstanding indebtedness of Sovereign will be paid at a fixed rate of interest of 6 1/2% p.a. Class 3 consist of the claim asserted by CIT Small Business Lending Corp ("CIT") in the amount of $646,638. The allowed secured claims of CIT shall be paid by means of monthly payments in the amount of $4,031.46 until such time as its claim is paid in full. In addition, CIT shall receive $2,015.73 per month from United Gourmet, L.P. Class 6 consist of the general unsecured claims against the Debtor with the exception of the deficiency and claims, if any, of the Class 1, 2 or 3 Creditors. The Class 6 creditors will be paid approximately 50% of the allowed amount of their claims over a period of 48 months from the Effective Date of the Plan without interest by means of quarterly and bi-quarterly payments. The Class 6 creditors shall receive a lien on all outstanding stock of the Debtor until all Plan payments are completed. Class 7 consist of the equity interests in the Debtor. The equity interest owners shall retain their ownership interests in the Debtor subject to the lien granted to the Class 6 creditors under the Plan. The Class 7 equity owners shall not receive any dividends or distributions of their shares until such time as all allowed claims are paid in full. As reported in the Troubled Company Reporter on Nov. 7, 2008, the U.S. Trustee for Region 7 asked the Court to deny approval of the Disclosure Statement of the Debtors until they have addressed each of the concerns raised in his objection, including an explanation for the basis for the projection that El Paso will operate at a positive cash flow when based on El Paso's August 2008 operating report, the company had a negative cash flow of $151,668. The Trustee also said that Desert Pepper should correct the inconsistencies in the Disclosure Statement pertaining to the monthly amounts to be paid to unsecured creditors. A full-text copy of the Debtors' Amended Chapter 11 Plan is available for free at: http://researcharchives.com/t/s?3622 A full-text copy of the Disclosure Statement explaining the Debtors' Amended Chapter 11 Plan is available for free at: http://researcharchives.com/t/s?3623 Based in El Paso, Texas, El Paso Chile Company Inc. -- http://www.elpasochile.com/-- is a salsa, chile and margarita mix distributor. Dessert Pepper Trading Company specializes in the grocery side of the business. El Paso Chile and Desert Pepper Tradihg filed for Chapter 11 protection on June 25, 2008 (Bankr. W.D. Tex. Case Nos. 08-30949 and 08-30948). Bernard R. Given, II, Esq., at Beck & Given, P.C., represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed assets of $1 million to $100 million, and debts of $1 million to $100 million. EZ LUBE: Can Access Goldman DIP Facility and Cash Collateral ------------------------------------------------------------ The Hon. Christopher Sontchi of the U.S. Bankruptcy Court for the District of Delaware authorized EZ Lube LLC and Xpress Lube- Tech Inc., to obtain, on an interim basis, postpetition financing from a syndicate of financial institutions led by Goldman Sachs Specialty Lending Group LP, as administrative agent. Judge Sontchi also authorized the Debtors to use cash collateral on the interim. A hearing is set for Jan. 5, 2008, at 3:30 p.m., to consider final approval of motions. Objections, if any, are due Dec. 23, 2008 Troubled Company Reporter said on Dec. 11, 2008, the Debtors told the Court that they have an urgent need to obtain postpetition financing -- and use of cash collateral -- to allow them to proceed with the sale of their assets and maintain their business operations. The absent of financing would suffer immediate harm to their estate, the Debtors pointed out. According to the motion, the Debtors are parties to two separate credit agreements: a) A First Lien Credit Agreement dated Dec. 13, 2005, as amended, with Goldman Sachs to provide $57,000,000, which consists of a five-year revolving credit facility of $17 million in revolving credit loan and a five-year term loan of $40 million. The first lien lenders were granted a senior security interest in substantially all of Xpress Lube-Tech's assets. The Debtor owed about $16 million under the revolver and $37.5 million under the first lien term loan and guaranty; and b) A Second Lien Credit Agreement dated Dec. 13, 2005, as amended, with Hudson Straits CLO 2004 Ltd., Gale Force 1 CLo Ltd., Foxe Basin CLO 2003 Ltd. GSO Credit Opportunities Fund (Helios) LP; GSO Special Situations Overseas Master Fund Ltd, where in lenders provided a seven-year term loan of $35 million. The obligations are secured by all of the Debtors' assets and junior only to the liens provided under the First Lien Credit Agreement. As of their bankruptcy filing, the Debtors owed $27.8 million under the second lien term loan. Xpress Lube-Tech said it is a gaurantor of EZ Lube's obligations owed uuder the Second Lien Credit Agreement and has granted the Second Lien Lenders a security interest in substantially all of its assets junior on to the liens granted under the first lien credit agreement. Salient terms of the DIP credit facility are: Borrower and Guarantors: EZ Lube LLC and Xpress Lube-Tech Inc; Lender: Goldman Sachs Specialty Lending Group LLC; Revolving Loan Amount: $2.5 million initially and $9.0 million in total; Term Loan Amount: The entire amount of the rolled-up First Lien Obligations; Interest Rate: Floating rate equal to Base Rate plus 7.0% with respect to the DIP revolving facility; Floating rate equal to Base Rate plus 4.5% Fees: A facility fee of $270,000; and administration fee of $100,000 per annum; and unused line of fee of0.5% per annum. Under the agreement, the DIP facility will be due and payable on the earliest to occur of, among other things: -- 180 days after the Debtors' bankruptcy filing; -- 30 days after the entry of Court's interim order; -- effective date of a plan of reorganization; -- acceleration of the DIP loans and the termination of the commitments in accordance with the DIP agreement; -- entry of an court order granting relief from the automatic stay allowing foreclosure of any assets of the Debtors of $100,000 in the aggregate; -- date a sale of all of the capital stock or assets of any Debtor is consummated under Section 363; or -- entry of an order of dismissal or conversion of the Debtors' case or the appointment of a Chapter 11 trustee. To secure their DIP obligations, the lenders will be granted a superpriority administrative expense claims with priority, subject to carve-out, over any and all administrative expenses and all other claims against the Debtors. The DIP facility is subject to a $250,000 carve-out for payment of fees incurred by professionals of Debtors, and any statutory committee. The DIP agreement contains customary and appropriate events of default including failure to (i) obtain an acceptable bidding procedures motion and sale order; and (ii) retain chief restructuring officer Stephen V. Coffey. A full-text copy of the senior secured superpriority DIP agreement is available for free at http://ResearchArchives.com/t/s?35f9 A full-text copy of the term loan and revolving commitments is available for free at http://ResearchArchives.com/t/s?35fa About EZ Lube LLC Headquartered in Santa Ana, California, EZ Lube LLC -- http://www.ezlube.com-- provide oil change and related services for automobiles including: oil filter replacement, lubricating chassis, and gearbox and brake fluid level maintenance. The company and Xpress Lube-Tech, Inc. filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case. No.: 08-13256). The Debtors proposed Broadway Advisors LLC as financial advisor; Coffey Management Company as chief restructuring advisor; and Kurztman Carson Consultants LLC as notice, claims and solicitation agent. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million to $500 million each. EZ LUBE: Court Approves Kurtzman Carson as Claims Agent ------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware authorized EZ Lube LLC and Xpress Lube-Tech Inc. to employ Kurtzman Carson Consultants LLC as their notice, claims and solicitation agent. The firm is expected to: a) notify all potential creditors of the filing of these Chapter 11 cases of the setting of the first meeting of creditors, under Section 341(a) of the Bankruptcy Code; b) file affidavits of service for all mailings, including a copy of each notice, a list of person to whom such notice was mailed and the date mailed; c) furnish a notice of the last date for filing proofs of claim and a form for filing proof of claim to creditors and parties in interest; d) maintain an official copy of the schedules, listing creditors and amounts owed; e) docket all claims filed and maintaining the official claims register on behalf of the clerk and providing to the clerk an exact duplicate thereof; f) specify in the claims register for each claim docket (i) the claim number assigned, (ii) the dated received, (iii) the name and address of the claimant, (iv) the filed amount of the claim, if liquidated, and (v) the allowed amount of the claim; g) record all transfers of claims and providing notices of the transfers as required under the Bankruptcy Rule 3001(e); h) maintain the official mailing list for all entities who have filed proofs of claim; i) mailing the Debtors' disclosure statement, plan, ballots and any other related solicitation materials to holders of impaired claims and equity interests; j) receive and tally ballots and responding to inquiries respecting voting procedures and the solicitation of votes on the plan; and k) provide any other administrative and distribution services set for in the services agreement as are necessary or required. The firm will receive a $25,000 retainer for services to be performed and expenses to be incurred. Michael J. Frishberg, director of restructuring services of the firm, assures the Court that the firm does not hold any interests adverse to the Debtors' estate and their creditors, and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About EZ Lube LLC Headquartered in Santa Ana, California, EZ Lube LLC -- http://www.ezlube.com-- provide oil change and related services for automobiles including: oil filter replacement, lubricating chassis, and gearbox and brake fluid level maintenance. The company and Xpress Lube-Tech, Inc. filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case. No.: 08-13256). The Debtors proposed Broadway Advisors LLC as financial advisor; Coffey Management Company as chief restructuring advisor; and Kurztman Carson Consultants LLC as notice, claims and solicitation agent. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million to $500 million each. EZ LUBE: Section 341(a) Meeting Scheduled for January 16, 2009 -------------------------------------------------------------- Roberta A. DeAngelis, the United States Trustee for Region 3, will convene a meeting of creditors of EZ Lube LLC and Xpress Lube-Tech Inc. on Jan. 16, 2009, at 11:00 a.m., at J. Caleb Boggs Federal Building, 2nd Floor, Room 2112. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About EZ Lube LLC Headquartered in Santa Ana, California, EZ Lube LLC -- http://www.ezlube.com-- provide oil change and related services for automobiles including: oil filter replacement, lubricating chassis, and gearbox and brake fluid level maintenance. The company and Xpress Lube-Tech, Inc. filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case. No.: 08-13256). The Debtors proposed Broadway Advisors LLC as financial advisor; Coffey Management Company as chief restructuring advisor; and Kurztman Carson Consultants LLC as notice, claims and solicitation agent. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million to $500 million each. EZ LUBE: Files Sale Protocol for All Assets; Lead Bidder Named -------------------------------------------------------------- EZ Lube LLC and Xpress Lube-Tech Inc. 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, subject to competitive bidding and auction. The Debtors have retained Broadway Advisors LLC as their financial advisor and investment banker in connection with the sale of their assets. The Debtors entered on Dec. 8, 2008, into an asset purchase agreement with EZ Lube Acquisition Company LLC to acquire their assets for: -- an aggregate amount in cash and assumption of their obligations under the DIP facility equal to the DIP amount and the first lien facility equal to the first lien amount; -- $1,500,000 plus the difference of the amount provided for professional fee claims in the approved budget less the amount of professional fee claims incurred and paid as of closing; -- $2,000,000 representing a portion of the second lien amount which will be bid by the purchaser; and -- the assumption of assumed liabilities. The Debtors reminds the Court that the DIP facility will terminate in May 2009, and requires the sale to be approved within 120 days of their petition date and closed within 15 days after approval. The Debtors say they were unable to obtain other financing for their operations and expenses. The Debtors propose that each bid must be accompanied by a good faith deposit of $1,000,000. The Debtors also propose a minimum overbid at purchase price plus $500,000. A full-text copy of the asset purchase agreement dated Dec. 8, 2008 is available for free at http://ResearchArchives.com/t/s?3618 A full-text copy of the bidding procedures is available for free at http://ResearchArchives.com/t/s?3619 About EZ Lube LLC Headquartered in Santa Ana, California, EZ Lube LLC -- http://www.ezlube.com-- provide oil change and related services for automobiles including: oil filter replacement, lubricating chassis, and gearbox and brake fluid level maintenance. The company and Xpress Lube-Tech, Inc. filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case. No.: 08-13256). The Debtors proposed Broadway Advisors LLC as financial advisor; Coffey Management Company as chief restructuring advisor; and Kurztman Carson Consultants LLC as notice, claims and solicitation agent. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million to $500 million each. FEDERAL-MOGUL: Bankruptcy Court OKs Settlement w/ Former CEO ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has approved the stipulation among Federal-Mogul Corp., the official committee of unsecured creditors in its Chapter 11 case, and Richard Snell, Federal-Mogul Corporation's former president, chief executive officer, and chairman of the board of directors. Pursuant to the Stipulation, the Parties agree that Mr. Snell and his wife, Sheridan Snell, will have an allowed unsecured claim against Federal-Mogul for $4,360,000, which will be paid in accordance with the terms of the Stipulation and the Debtors' confirmed Fourth Amended Joint Plan of Reorganization, provided that the first installment payment will not be due and owing to the Snells until January 31, 2009. The second and third installment payments will be made in accordance with the timetable specified in the Plan. Terms of Snell Settlement Richard Snell, from November 1996 until September 2000, served as president, chief executive officer, and chairman of the board of directors of Federal-Mogul Corporation. In connection with his service, Mr. Snell was covered by certain pension arrangements, including the "Supplemental Key Executive Pension Plan," pursuant to which he received a monthly prepetition payment of approximately $35,000. As of the Petition Date, the Debtors projected that Mr. Snell had accrued SKEPP benefits of $4,900,000. By an order dated April 30, 2002, the Court authorized the Debtors to continue paying Mr. Snell a $3,500 per month cap, which payments continued and will continue to be paid to Mr. Snell, or to Sheridan Snell, Mr. Snell's wife. On February 27, 2003, the Snells filed a proof of claim against Federal-Mogul, which was assigned as Claim No. 5407, asserting an unsecured, non-priority claim for $7,716,495, including amounts allegedly owed under the SKEPP, and unliquidated claims for future, contingent rights of indemnification related to Mr. Snell's prior service to the Debtors. The Debtors disputed the Claim's amounts. In addition, the Debtors and the Official Committee of Unsecured Creditors asserted that certain amounts paid to Mr. Snell prior to the Petition Date constituted avoidable transfers under the Bankruptcy Code. Pursuant to certain tolling agreements, the period in which the Debtors and the Creditors Committee might bring actions against Mr. Snell to recover avoidable transfers has been extended through October 31, 2008. Pursuant to the Debtors' Fourth Amended Joint Plan of Reorganization, the Creditors' Committee is designated as the representative of the bankruptcy estates in pursuing and settling any actions to avoid and recover transfers made to Mr. Snell. The Creditors Committee was actively involved throughout the Chapter 11 cases in negotiations with Mr. Snell to resolve both the Claim and the estates' claims against him. Pursuant to the Stipulation, the Parties agree that the Snells will have an allowed unsecured claim against Federal-Mogul for $4,360,000, which will be paid in accordance with the terms of the Plan, provided that the first installment payment will not be due and owing to the Snells until January 31, 2009. The second and third installment payments will be made in accordance with the timetable specified in the Plan. The Debtors assert that the terms of the Stipulation, in which negotiations have taken place over a period of several years, are fair and reasonable, and in the best interests of the estates. They add that the Stipulation resolves simultaneously one of the most significant causes of action remaining in the estates, and one of the largest remaining unresolved general unsecured claims asserted against the estates. About Federal-Mogul Corporation Federal-Mogul Corporation -- http://www.federal-mogul.com/-- (OTCBB: FDMLQ) is a global supplier, serving the world's foremost original equipment manufacturers of automotive, light commercial, heavy-duty, agricultural, marine, rail, off-road and industrial vehicles, as well as the worldwide aftermarket. Founded in Detroit in 1899, the company is headquartered in Southfield, Michigan, and employs 45,000 people in 35 countries. Aside from the U.S., Federal-Mogul also has operations in other locations which includes, among others, Mexico, Malaysia, Australia, China, India, Japan, Korea, and Thailand. The Company filed for chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl & Jones, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $10.15 billion in assets and $8.86 billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the Official Committee of Unsecured Creditors. On March 7, 2003, the Debtors filed their Joint Chapter 11 Plan. They submitted a Disclosure Statement explaining that plan on April 21, 2003. They submitted several amendments and on June 6, 2004, the Bankruptcy Court approved the Third Amended Disclosure Statement for their Third Amended Plan. On July 28, 2004, the District Court approved the Disclosure Statement. The estimation hearing began on June 14, 2005. The Debtors submitted a Fourth Amended Plan and Disclosure Statement on Nov. 21, 2006, and the Bankruptcy Court approved that Disclosure Statement on Feb. 6, 2007. The Fourth Amended Plan was confirmed by the Bankruptcy Court on Nov. 8, 2007, and affirmed by the District Court on November 14. Federal-Mogul emerged from chapter 11 on Dec. 27, 2007. (Federal-Mogul Bankruptcy News, Issue No. 176; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the Troubled Company Reporter on Nov. 4, 2008, Standard & Poor's Ratings Services said it has revised its outlook on Federal-Mogul Corp. to negative from stable and affirmed its 'BB-' corporate credit rating on the company. Southfield, Mich.- based Federal-Mogul had total balance sheet debt of $3 billion as of Sept. 30, 2008. FIRST UNION: Interest Shortfalls Cue S&P's 'D' Rating on Class L ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class L commercial mortgage pass-through certificates from First Union National Bank Commercial Mortgage Trust series 2000-C2 to 'D' from 'CCC-'. S&P downgraded the class to 'D' because of recurring interest shortfalls to the class. An appraisal subordinate entitlement reduction that is in effect for one asset and the reimbursement of advances to the master servicer, Wachovia Bank N.A., related to one loan that was previously with the special servicer are the primary causes of the shortfalls. Details for the two assets are: -- The Red Oak Apartments ($4.6 million, 13%) asset is currently with the special servicer and is secured by a 186-unit multifamily property in Houston, Texas. The loan was transferred to the special servicer, LNR Partners Inc., in October 2007 and is now classified as real estate owned. The interior and exterior of the property have been rehabilitated for $1 million. Occupancy as of May 2008 was 63%. An appraisal reduction amount totaling $2.6 million is in effect for this asset. The related ASER amount on the Nov. 18, 2008, remittance report was $20,886. The cumulative ASER reported was $154,545. -- The second asset was previously with the special servicer, but was resolved and returned to the master servicer in August 2003. The loan was subsequently defeased on Feb. 22, 2007. The asset, the Crowne Plaza loan, was secured by a 533-room full-service hotel in Phoenix, Arizona. The loan was transferred to the special servicer on Aug. 12, 2001, due to payment default. The borrower subsequently filed Chapter 11 bankruptcy. As part of the bankruptcy settlement, $3.9 million of the advances was capitalized into the mortgage loan amount and $1.2 million was forgiven. The interest rate on the loan was also modified with various interest rate step-ups, reaching 8.95% in years eight through 10. The term of the loan remains 10 years, and the loan is scheduled to mature in February 2011. The current interest rate on the loan is 8.35%. The loan balance at issuance was $16.5 million; the current outstanding principal balance is $18.3 million. The servicer has approximately $1.3 million of advances to recover comprising principal and interest, property protection, and other advances. The servicer has been recovering advances each remittance period that are causing interest shortfalls. The servicer recovered $18,523 of advances in November. Rating Lowered First Union National Bank Commercial Mortgage Trust Commercial mortgage pass-through certificates series 2000-C2 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ L D CCC- 0.81% FORD MOTOR: Auto Aid Rejected by Senate; Access to TARP Mulled ---------------------------------------------------------------- Greg Hitt, Jeffrey McCracken, and John D. Stoll at The Wall Street Journal report that the U.S. Senate has rejected the $14 billion financial assistance for General Motors Corp., Chrysler LLC, and Ford Motor Co. As reported by the Troubled Company Reporter on Dec. 11, 2008, The House of Representatives passed the bill on the government financial assistance being requested by GM, Ford Motor, and Chrysler. The bill states that the U.S. president will appoint one or more officers from the Executive Branch to facilitate the restructuring necessary to achieve the long-term financial viability of the automakers. WSJ relates that the bill failed due to a dispute within the Senate over the wages paid to the companies' workers. Citing Senate Majority Leader Harry Reid, the report says that the Senate would be in recess, and would stand in pro forma session until January 2009. According to WSJ, only a few Republicans had been willing to back the rescue package, while others raised concerns about government intervention in the marketplace and demanded that the bill be strengthened to exact concessions from the industry. Access to $700BB Financial-Rescue Plan John D. McKinnon, Deborah Solomon, and Greg Hitt at WSJ report that the White House said on Friday that it would consider letting GM, Chrysler, and Ford Motor access the $700 billion financial- rescue plan. The government's $700 billion Troubled Asset Relief Program was approved in October and was intended for financial institutions. Citing a person familiar with the matter, WSJ relates that the loans to be offered could be lesser than the $14 billion financial assistance. According to the report, the source said that it could be closer to $8 billion and GM would be a recipient. The report says that GM is hoping for about $10 billion. WSJ states that Chrysler's parent Cerberus Capital Management was criticized for not bailing out its own company, while Ford Motor said that it doesn't need a short-term lifeline and is seeking for loans in case the market worsens. Canadian Gov't May Provide Financial Assistance The Canadian government is considering providing financial aid to units of GM, Ford Motor, and Chrysler, Alexandre Deslongchamps and Hugo Miller at Bloomberg News report, citing Canadian Finance Minister Jim Flaherty. "Our government is open to helping the industry. This is a day- by-day thing, obviously, in terms of developments in the United States," Bloomberg quoted Minister Flaherty as saying. According to Bloomberg, GM has asked for C$800 million assistance from Canada by year-end, an additional C$1.2 billion line of credit through March 2009, and then C$400 million in the second quarter of 2009. Bloomberg states that MF Global Ltd. broker Aaron Fennell found the assistance as "a waste of time because they'll probably end up in some sort of bankruptcy within weeks." About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Moody's Investors Service lowered the debt ratings of Ford Motor Company, Corporate Family and Probability of Default Ratings to Caa1 from B3. The company's Speculative Grade Liquidity rating remains at SGL-3 and the rating outlook is negative. In a related action Moody's also lowered the long-term rating of Ford Motor Credit Company to B3 from B2. The outlook for Ford Credit is negative. As reported in the Troubled Company Reporter on Oct. 10, 2008, Fitch Ratings downgraded the Issuer Default Rating of Ford Motor Company and Ford Motor Credit Company by one notch to 'CCC' from 'B-'. FORD MOTOR: Fitch Puts Issuer Default Ratings on Negative Watch --------------------------------------------------------------- Fitch Ratings has placed the Issuer Default Ratings of the U.S. auto suppliers listed below on Rating Watch Negative, based on the impact of a potential bankruptcy filing by General Motors (and Fitch's view that this would be followed by a bankruptcy at Ford). Given its smaller profile, it is unlikely that a bankruptcy filing by Chrysler would have the same impact. Industry bankruptcies could result from either the failure of the auto legislation currently under consideration in the U.S. Congress, or the failure of the Detroit Three to develop viable restructuring plans in the several months prior to the expiration of the bridge loans included in the current legislation. In 2009, auto suppliers are already facing a steep global downturn in auto production, including a deeply depressed production forecast in the U.S. and Europe. In the event of a General Motors bankruptcy, Fitch believes that the resulting contraction in auto production, the supply chain, trade credit and capital-access would cause widespread shutdowns and bankruptcies throughout the supply chain. Given the cliff-risk nature of the risks involved, Fitch has tried to detail below the extent of the potential rating actions that would be taken in the event of a GM bankruptcy. In any event, Fitch will continue to take individual rating actions in the sector as events unfold over the next several weeks and months. Fitch notes that even if the OEMs avoid bankruptcy, major restructurings of their operations will occur, causing material changes in the operations of their Tier I suppliers. These restructurings could also lead to ratings actions, providing further rationale for placing these suppliers on Rating Watch Negative. The auto suppliers placed or remain on Rating Watch Negative and the ratings most likely to result in the event of a GM bankruptcy are: Companies Current IDR/Prospective IDR -- American Axle 'B'/'CC'; -- ArvinMeritor 'B'/CCC'; -- Hayes-Lemmerz 'B'/CCC'; -- Johnson Controls 'A-'/'BBB+'; -- Tenneco 'BB-/B-'; -- TRW 'BB'/'B-'; -- Visteon 'CCC'/'CC' -- Companies not included in the rating actions: -- Cummins 'BBB+'; -- Goodyear 'BB-'; -- Navistar 'BB-' Despite improved diversification by most Tier 1 suppliers, across manufacturers, geographies and product lines, the decline in supplier revenues and operating cash flow through 2009 resulting from a GM bankruptcy would likely produce covenant violations across the vast majority of suppliers. Of equal concern, Tier 2 and three suppliers are likely to experience widespread bankruptcies through loss of volume, lack of receivables financing, and restricted financial and trade credit. Fitch expects that a collapse of trade credit throughout the supply chain would put at risk the domestic operations of these suppliers, as well as their financial viability. TRW and Tenneco remain better positioned given their global operations, but Fitch expects that these two companies, at a minimum, would require renegotiations with their bank group. Ratings on Rating Watch Negative are: American Axle & Manufacturing Holdings, Inc. -- IDR 'B'; American Axle & Manufacturing, Inc -- IDR 'B'; ArvinMeritor -- IDR 'B'; -- Secured 'BB'; -- Senior unsecured 'B/RR4'. Hayes-Lemmerz International, Inc -- IDR 'B'. Hayes-Lemmerz Finance Luxembourg S.A -- IDR 'B'; -- Senior unsecured 'B-/RR5'; -- Senior secured 'BB/RR1'. HLI Operating Company Inc. -- IDR 'B'; -- Senior secured 'BB/RR1'. Johnson Controls -- IDR 'A-'. York International -- IDR 'A-'. Tenneco -- IDR 'BB-'; -- Senior unsecured 'BB-'; -- Subordinated 'B'; -- Senior secured notes 'BB'; -- Senior secured credit facilities 'BB+'. TRW Automotive Holdings Corp -- IDR 'BB'. TRW Automotive, Inc -- IDR 'BB'; -- Secured 'BB+'; -- Senior unsecured 'BB-'. Visteon Corp -- IDR 'CCC'; -- Senior secured 'B/RR1'; -- senior unsecured 'CC/RR6'. FOSTER WHEELER: S&P Raises Corporate Credit Rating to 'BB+' ----------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit and issue-level ratings on Clinton, New Jersey-headquartered Foster Wheeler Ltd. S&P raised the long-term corporate credit rating to 'BB+' from 'BB'. The outlook is stable. "The upgrade reflects Foster Wheeler's good cash flow generation, sizable cash balance, and solid backlog of about $7 billion," said S&P's credit analyst Robyn Shapiro. Foster Wheeler, a provider of petrochemical and power-related engineering and construction services, reported total debt of approximately $220 million at Sept. 26, 2008. The ratings on Foster Wheeler reflect the company's intermediate financial risk profile, marked by its low debt balance and solid cash flow generation. The company's financial obligations related to postretirement and asbestos liabilities are still present, although these have been reduced. The rating also incorporates the inherent cyclicality of the engineering and construction services sector in which Foster Wheeler participates. Nonetheless, the company's good market position, strong backlog levels, improved risk management policies and profitability, and low financial leverage are supportive rating factors. With sales of roughly $6.7 billion during the trailing 12 months ended Sept. 26, 2008, Foster Wheeler is a globally diversified E&C company operating through two reporting segments: the global E&C group and the global power group. The first unit provides services to the process sectors (oil and gas, energy, petrochemicals, and pharmaceuticals), and the second unit designs, manufactures, and erects steam generators for industrial power plants, power stations, and cogeneration facilities. The company exhibits solid technical expertise in delayed coking and circulating fluidized bed technologies. For the rating, S&P expects funds from operations to total debt of about 30%, in addition to sufficient liquidity at all points in the cycle. The company recently announced a $750 million share repurchase program and had about $400 million remaining under authorization as of November 2008. Additionally, since 2007, the company has been exploring strategic acquisitions to complement or expand technical capabilities or to access new market segments. S&P expects the company to finance future transactions in a manner consistent with S&P's expectations at the current ratings. A revision of the outlook to positive or an upgrade could occur if Foster Wheeler can sustain good cash flow protection measures and healthy liquidity through a downturn in the industry. Conversely, S&P could take a negative rating action if the company's credit protection measures or liquidity declines significantly, possibly due to cost overruns or working capital swings. For example, S&P could revise the outlook to negative or lower the rating if FFO to debt appears likely to fall below 30%. GENERAL GROWTH: Citigroup Inc. Holds 5.4% Stake ----------------------------------------------- Citigroup Inc. and two other companies disclosed in a regulatory filing with the Securities and Exchange Commission that they may be deemed to beneficially own General Growth Properties, Inc.'s shares of common stock: Shares Beneficially Company Owned Percentage ------- ------------ ---------- Citigroup Financial Products Inc. 14,245,462 5.3% Citigroup Global Markets Holdings Inc. 14,245,462 5.3% Citigroup Inc. 14,497,408 5.4% The number of shares outstanding of General Growth's common stock as of Nov. 10, 2008, was 268,314,510. Citigroup Inc. also disclosed that pursuant to the restructuring of Old Lane Partners, LLC, a Citigroup Inc. subsidiary, reported on June 12, 2008, and effected on June 26, 2008, this filing reflects securities beneficially owned by both Citigroup and Old Lane. A full-text copy of SCHEDULE 13G is available for free at http://ResearchArchives.com/t/s?3614 Based in Chicago, Illinois, General Growth Properties, Inc. (NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S. mall owner with 200-plus shopping malls in 44 states. General Growth is a self-administered and self-managed real estate investment trust. General Growth owns, manages, leases and develops retail rental property, primarily shopping centers. Substantially all of its properties are located in the United States, but the company also has retail rental property operations and property management activities -- through unconsolidated joint ventures -- in Brazil and Turkey. Its Master Planned Communities segment includes the development and sale of residential and commercial land, primarily in large-scale projects in and around Columbia, Maryland; Houston, Texas; and Summerlin, Nevada, as well as the development and sale of its one residential condominium project located in Natick (Boston), Massachusetts. General Growth said in a regulatory filing Sept. 30 that its potential inability to address its 2008 or 2009 debt maturities in a satisfactory fashion raises substantial doubts as to its ability to continue as a going concern. General Growth had $29.6 billion in total assets and $27.3 billion in total liabilities as at Sept. 30. * * * As reported by the Troubled Company Reporter on Dec. 11, 2008, Fitch Ratings, has downgraded the Issuer Default Ratings and outstanding debt ratings of General Growth Properties to 'C' from 'B'. GENERAL GROWTH: Executives Acquire 1.8MM Shares of Common Stock --------------------------------------------------------------- Thomas H. Nolan, Jr., interim president and director of General Growth Properties Inc. disclosed in a Form 4 filing with the Securities and Exchange Commission that he may be deemed to beneficially own 800,000 shares of the company's common stock after exercising his right to buy 800,000 shares on Nov. 3, 2008. A full-text copy of Mr. Nolan's Form 4 is available for free at http://ResearchArchives.com/t/s?3616 Adam S. Metz, the company's interim CEO and director, disclosed in a separate filing that he acquired 1,000,000 shares of the company's common stock on Nov. 3, 2008. A full-text copy of Mr. Metz's Form 4 is available for free at http://ResearchArchives.com/t/s?3617 The number of shares outstanding of General Growth's common stock as of Nov. 10, 2008, was 268,314,510. Based in Chicago, Illinois, General Growth Properties, Inc. (NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S. mall owner with 200-plus shopping malls in 44 states. General Growth is a self-administered and self-managed real estate investment trust. General Growth owns, manages, leases and develops retail rental property, primarily shopping centers. Substantially all of its properties are located in the United States, but the company also has retail rental property operations and property management activities -- through unconsolidated joint ventures -- in Brazil and Turkey. Its Master Planned Communities segment includes the development and sale of residential and commercial land, primarily in large-scale projects in and around Columbia, Maryland; Houston, Texas; and Summerlin, Nevada, as well as the development and sale of its one residential condominium project located in Natick (Boston), Massachusetts. General Growth said in a regulatory filing Sept. 30 that its potential inability to address its 2008 or 2009 debt maturities in a satisfactory fashion raises substantial doubts as to its ability to continue as a going concern. General Growth had $29.6 billion in total assets and $27.3 billion in total liabilities as at Sept. 30. * * * As reported by the Troubled Company Reporter on Dec. 11, 2008, Fitch Ratings, has downgraded the Issuer Default Ratings and outstanding debt ratings of General Growth Properties to 'C' from 'B'. GENERAL GROWTH: In Talks With Lenders to Extend Mortgage Loans -------------------------------------------------------------- General Growth Properties, Inc., is in talks with its syndicate of lenders for a further extension of the Fashion Show and Palazzo mortgage loans currently scheduled to mature on Dec. 12, 2008. There can be no assurance that General Growth will obtain these further extensions. Kris Hudson at The Wall Street Journal reports General Growth isn't in default on the loan even if the deadline passes without an extension, until the banks declare it so. General Growth reported the completion of $896 million of mortgage loans. The maturity dates of these mortgage loans range from five to seven years. The proceeds were fully used to retire a $58 million bond issued by The Rouse Company LP maturing Dec. 11, 2008, as well as to refinance approximately $814 million of mortgage indebtedness scheduled to mature in 2009. These refinanced loans are separate from the Fashion Show and Palazzo mortgage loans. WSJ reports that the new mortgages will due in 2013 to 2015, and they General Growth an extra $24 million in cash, which would likely be used to cover fees and closing costs. General Growth still has $2 billion in debt that expires in 2009 and $4.5 billion due in 2010, WSJ relates. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. (NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S. mall owner with 200-plus shopping malls in 44 states. General Growth is a self-administered and self-managed real estate investment trust. General Growth owns, manages, leases and develops retail rental property, primarily shopping centers. Substantially all of its properties are located in the United States, but the company also has retail rental property operations and property management activities -- through unconsolidated joint ventures -- in Brazil and Turkey. Its Master Planned Communities segment includes the development and sale of residential and commercial land, primarily in large-scale projects in and around Columbia, Maryland; Houston, Texas; and Summerlin, Nevada, as well as the development and sale of its one residential condominium project located in Natick (Boston), Massachusetts. General Growth said in a regulatory filing Sept. 30 that its potential inability to address its 2008 or 2009 debt maturities in a satisfactory fashion raises substantial doubts as to its ability to continue as a going concern. General Growth had $29.6 billion in total assets and $27.3 billion in total liabilities as at Sept. 30. * * * As reported by the Troubled Company Reporter on Dec. 11, 2008, Fitch Ratings has downgraded its issuer default rating on General Growth Properties to 'C' from 'B'. As reported by the Troubled Company Reporter on Nov. 18, Moody's Investors Service has downgraded the ratings on General Growth Properties, Inc., certain of its subsidiaries and The Rouse Company LP (to Caa2 from B3 senior secured bank debt; to Caa2 from B3 senior unsecured debt). The ratings remain on review for further possible downgrade. The rating action reflects deepening concerns in the REIT's ability to meet its near term debt obligations and funding needs. GENERAL GROWTH: Morgan Stanley Discloses Ownership of 5.1% Stake ---------------------------------------------------------------- Morgan Stanley disclosed in a regulatory filing with the Securities and Exchange Commission that it may be deemed to beneficially own 13,628,093 shares of General Growth Properties, Inc.'s common stock, equivalent to 5.1% of the total stock outstanding. Morgan Stanley also disclosed this filing does not reflect securities, if any, beneficially owned by any operating units of Morgan Stanley and its subsidiaries and affiliates. The number of shares outstanding of General Growth's common stock as of Nov. 10, 2008, was 268,314,510. A full-text copy of SCHEDULE 13G is available for free at http://ResearchArchives.com/t/s?3615 Based in Chicago, Illinois, General Growth Properties, Inc. (NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S. mall owner with 200-plus shopping malls in 44 states. General Growth is a self-administered and self-managed real estate investment trust. General Growth owns, manages, leases and develops retail rental property, primarily shopping centers. Substantially all of its properties are located in the United States, but the company also has retail rental property operations and property management activities -- through unconsolidated joint ventures -- in Brazil and Turkey. Its Master Planned Communities segment includes the development and sale of residential and commercial land, primarily in large-scale projects in and around Columbia, Maryland; Houston, Texas; and Summerlin, Nevada, as well as the development and sale of its one residential condominium project located in Natick (Boston), Massachusetts. General Growth said in a regulatory filing Sept. 30 that its potential inability to address its 2008 or 2009 debt maturities in a satisfactory fashion raises substantial doubts as to its ability to continue as a going concern. General Growth had $29.6 billion in total assets and $27.3 billion in total liabilities as at Sept. 30. * * * As reported by the Troubled Company Reporter on Dec. 11, 2008, Fitch Ratings, has downgraded the Issuer Default Ratings and outstanding debt ratings of General Growth Properties to 'C' from 'B'. GENERAL GROWTH: Pershing Square, et. al. Disclose 7.5% Stake ------------------------------------------------------------ Pershing Square Capital Management L.P., et. al., filed Schedule 13D/A with the Securities and Exchange Commission to amend and supplement the Schedule 13D filed on Nov. 24, 2008 In a regulatory filing, four entities disclosed that they may be deemed to beneficially own shares of General Growth Properties, Inc.'s common stock: Shares Beneficially Company Owned Percentage ------- ------------ ---------- Pershing Square Capital Management L.P. 20,080,690 7.5% PS Management GP, LLC 20,080,690 7.5% Pershing Square GP, LLC 7,626,991 2.8% William A. Ackman 20,080,690 7.5% The number of shares outstanding of General Growth's Common Stock, $.01 par value, as of Nov. 10, 2008, was 135,807,774. Pershing Square purchased the Subject Shares and the Swaps, for a total consideration of $9,261,789. The source of funds for the transactions was derived from the capital of the Pershing Square Funds. As of Dec. 8, 2008, Pershing Square, et. al., beneficially owned an aggregate of 20,080,690 Common Shares, representing approximately 7.5% of the outstanding Common Shares. Pershing Square also have additional economic exposure to approximately 48,500,000 Common Shares under certain cash-settled total return swaps, bringing their total aggregate economic exposure to 68,580,690 Common Shares or approximately 25.6% of the outstanding Common Shares. A full-text copy of General Growth's Schedule 13D is available for free at http://ResearchArchives.com/t/s?3613 About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. (NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S. mall owner with 200-plus shopping malls in 44 states. General Growth is a self-administered and self-managed real estate investment trust. General Growth owns, manages, leases and develops retail rental property, primarily shopping centers. Substantially all of its properties are located in the United States, but the company also has retail rental property operations and property management activities -- through unconsolidated joint ventures -- in Brazil and Turkey. Its Master Planned Communities segment includes the development and sale of residential and commercial land, primarily in large-scale projects in and around Columbia, Maryland; Houston, Texas; and Summerlin, Nevada, as well as the development and sale of its one residential condominium project located in Natick (Boston), Massachusetts. General Growth said in a regulatory filing Sept. 30 that its potential inability to address its 2008 or 2009 debt maturities in a satisfactory fashion raises substantial doubts as to its ability to continue as a going concern. General Growth had $29.6 billion in total assets and $27.3 billion in total liabilities as at Sept. 30. * * * As reported by the Troubled Company Reporter on Dec. 11, 2008, Fitch Ratings, has downgraded the Issuer Default Ratings and outstanding debt ratings of General Growth Properties to 'C' from 'B'. GENERAL MOTORS: Auto Aid Rejected by Senate; Access to TARP Mulled ------------------------------------------------------------------ Greg Hitt, Jeffrey McCracken, and John D. Stoll at The Wall Street Journal report that the U.S. Senate has rejected the $14 billion financial assistance for General Motors Corp., Chrysler LLC, and Ford Motor Co. As reported by the Troubled Company Reporter on Dec. 11, 2008, The House of Representatives passed the bill on the government financial assistance being requested by GM, Ford Motor, and Chrysler. The bill states that the U.S. president will appoint one or more officers from the Executive Branch to facilitate the restructuring necessary to achieve the long-term financial viability of the automakers. WSJ relates that the bill failed due to a dispute within the Senate over the wages paid to the companies' workers. Citing Senate Majority Leader Harry Reid, the report says that the Senate would be in recess, and would stand in pro forma session until January 2009. According to WSJ, only a few Republicans had been willing to back the rescue package, while others raised concerns about government intervention in the marketplace and demanded that the bill be strengthened to exact concessions from the industry. Access to $700BB Financial-Rescue Plan John D. McKinnon, Deborah Solomon, and Greg Hitt at WSJ report that the White House said on Friday that it would consider letting GM, Chrysler, and Ford Motor access the $700 billion financial- rescue plan. The government's $700 billion Troubled Asset Relief Program was approved in October and was intended for financial institutions. Citing a person familiar with the matter, WSJ relates that the loans to be offered could be lesser than the $14 billion financial assistance. According to the report, the source said that it could be closer to $8 billion and GM would be a recipient. The report says that GM is hoping for about $10 billion. WSJ states that Chrysler's parent Cerberus Capital Management was criticized for not bailing out its own company, while Ford Motor said that it doesn't need a short-term lifeline and is seeking for loans in case the market worsens. GM & Chrysler May Fail to Pay $9BB in Bills From Suppliers Sharon Terlep at WSJ relates that after the Senate denied the government bailout, GM and Chrysler may not be able to pay the $9 billion in bills for already-delivered auto parts. According to WSJ, the impending payments to suppliers account for almost half the cash GM had available at the end of the third quarter. Suppliers, says WSJ, might tighten payment terms, which would accelerate the erosion of cash from the auto makers. WSJ quoted United Auto Workers President Ron Gettelfinger as saying, "We need to satisfy suppliers that there is going to be a tomorrow. If suppliers believe they can't operate, what are they going to do? They aren't going to deliver the goods. If they don't deliver the goods, the plants go down." GM to Slash Production in First Quarter 2009 GM disclosed on Dec. 12 a significant reduction of planned production for the first quarter of 2009 due to the ongoing and severe drop in industry sales, which were down 36 percent in November overall and 41 percent for GM (2007 vs. 2008). The impact of these and recently announced actions to adjust production with market demand, will result in the temporary idling of approximately 30 percent of GM's North American assembly plant volume during the first quarter of 2009 and will remove approximately 250,000 units from production. The speed and severity of the U.S. auto market's decline has been unprecedented in recent weeks as consumers reel from the collapse of the financial markets and the resulting lack of credit for vehicle financing. These U.S., Canada, and Mexico operations are affected: * U.S.: -- Ft. Wayne (Indiana): Chevy Silverado, GMC Sierra Light Duty Regular and Extended Cab; -- Flint Assembly (Michigan): Chevy Silverado, GMC Sierra Heavy Duty Regular and Crew Cab & Medium Duty; -- Wentzville (Missouri): Chevy Express, GMC Savanna; -- Lansing Delta Township (Michigan): Buick Enclave, GMC Acadia, Saturn Outlook; -- Pontiac Assembly (Mich.): Chevy Silverado, GMC Sierra Heavy Duty Extended Cab; -- Spring Hill (Tennessee): Chevy Traverse; -- Fairfax Assembly (Kansas): Chevrolet Malibu/Hybrid, Saturn Aura/Hybrid; -- Arlington Assembly (Texas): Full Size SUVs: Chevy Suburban, Tahoe & Tahoe Hybrid, GMC Yukon, Yukon XL & Yukon Hybrid, Cadillac Escalade/Escalade ESV & Escalade Hybrid; -- Lansing Grand River (Michigan): Cadillac STS & CTS; -- Orion (Michigan): Chevy Malibu, Pontiac G6; -- Detroit-Hamtramck (Michigan): Buick Lucerne, Cadillac DTS; -- Shreveport (Louisiana): Chevy Colorado, GMC Canyon, Hummer H3 & H3T; -- Bowling Green (Kentucky): Chevy Corvette, Cadillac XLR; and -- Wilmington (Delaware): Pontiac Solstice, Saturn Sky, Opel GT * Canada: -- Oshawa Consolidated: Chevy Impala; -- Oshawa Truck: Chevy Silverado, GMC Sierra Light Duty Extended and Crew Cab; -- CAMI: Chevy Equinox, Pontiac Torrent * Mexico: -- Silao: Chevy Silverado, GMC Sierra Light Duty Crew Cab, Chevy Avalanche, Cadillac Escalade EXT; -- Ramos 2: Chevy HHR, Saturn VUE, Chevy Captiva; and -- San Luis Potosi: Chevy Aveo, Pontiac G3 As a result of these assembly plant actions, GM will also continue to assess its powertrain and stamping capacity needs and make adjustments as appropriate. Canadian Gov't May Provide Financial Assistance The Canadian government is considering providing financial aid to units of GM, Ford Motor, and Chrysler, Alexandre Deslongchamps and Hugo Miller at Bloomberg News report, citing Canadian Finance Minister Jim Flaherty. "Our government is open to helping the industry. This is a day- by-day thing, obviously, in terms of developments in the United States," Bloomberg quoted Minister Flaherty as saying. According to Bloomberg, GM has asked for C$800 million assistance from Canada by year-end, an additional C$1.2 billion line of credit through March 2009, and then C$400 million in the second quarter of 2009. Bloomberg states that MF Global Ltd. broker Aaron Fennell found the assistance as "a waste of time because they'll probably end up in some sort of bankruptcy within weeks." About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Latin America, Africa and Middle East, with headquarters in Miramar, Florida, is one of GM's four regional business units. GM LAAM employs approximately 37,000 people in 18 countries and has manufacturing facilities in Argentina, Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and Venezuela. GM LAAM markets vehicles under the Buick, Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and Suzuki brands. As reported in the Troubled Company Reporter on Nov. 10, 2008, General Motors Corporation's balance sheet at Sept. 30, 2008, showed total assets of $110.425 billion, total liabilities of $170.3 billion, resulting in a stockholders' deficit of $59.9 billion. * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on General Motors Corp. to 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. S&P said that the outlook is negative. Fitch Ratings, as reported in the Troubled Company Reporter on Nov. 11, 2008, placed the Issuer Default Rating of General Motors on Rating Watch Negative as a result of the company's rapidly diminishing liquidity position. Given the current liquidity level of $16.2 billion and the pace of negative cash flows, Fitch expects that GM will require direct federal assistance over the next quarter and the forbearance of trade creditors in order to avoid default. With virtually no further access to external capital and little potential for material asset sales, cash holdings are expected to shortly reach minimum required operating levels. Fitch placed these on Rating Watch Negative: -- Senior secured at 'B/RR1'; -- Senior unsecured at 'CCC-/RR5'. As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corp. and General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. Economy. GENERAL MOTORS: E. Kullman Resigns from Board to Focus on DuPont ---------------------------------------------------------------- General Motors Corp. disclosed that Ellen J. Kullman, president of DuPont, has resigned from its board of directors effective Dec. 11, 2008, to focus on her new responsibilities at DuPont. Mrs. Kullman will become chief executive officer of DuPont on Jan. 1, 2009. "I have been proud to serve on GM's board for four years," said Mrs. Kullman. "GM has made important advancements across a number of fronts and I wish the GM team continued success as they work to overcome the current challenges." "I understand and respect [Mrs. Kullman's] need to focus on DuPont right now," noted George M.C. Fisher, presiding director of GM's board. "She's been a great board member for GM, and we'll miss her." Mrs. Kullman served on GM's audit committee and investment funds committee. There are no immediate plans to replace her on those committees. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Latin America, Africa and Middle East, with headquarters in Miramar, Florida, is one of GM's four regional business units. GM LAAM employs approximately 37,000 people in 18 countries and has manufacturing facilities in Argentina, Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and Venezuela. GM LAAM markets vehicles under the Buick, Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and Suzuki brands. As reported in the Troubled Company Reporter on Nov. 10, 2008, General Motors Corporation's balance sheet at Sept. 30, 2008, showed total assets of $110.425 billion, total liabilities of $170.3 billion, resulting in a stockholders' deficit of $59.9 billion. * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on General Motors Corp. to 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. S&P said that the outlook is negative. Fitch Ratings, as reported in the Troubled Company Reporter on Nov. 11, 2008, placed the Issuer Default Rating of General Motors on Rating Watch Negative as a result of the company's rapidly diminishing liquidity position. Given the current liquidity level of $16.2 billion and the pace of negative cash flows, Fitch expects that GM will require direct federal assistance over the next quarter and the forbearance of trade creditors in order to avoid default. With virtually no further access to external capital and little potential for material asset sales, cash holdings are expected to shortly reach minimum required operating levels. Fitch placed these on Rating Watch Negative: -- Senior secured at 'B/RR1'; -- Senior unsecured at 'CCC-/RR5'. As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corp. and General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. Economy. GENERAL MOTORS: May Lose 40% of Dealers If GMAC Goes Bankrupt ------------------------------------------------------------- A bankruptcy filing by GMAC LLC may cause General Motors Corp. to lose as many as 40% of its 6,500 U.S. dealerships, Greg Bensinger at Bloomberg News reports, citing a retailer for GM. Bloomberg relates that GMAC is GM dealers' largest source of financing for purchasing vehicles, representing about 75% of U.S. inventory. The report says that tighter GMAC loan rules discouraged about 40% of potential buyers, helping drag GM sales to a 22% decline this year. Bloomberg quoted Martin NeSmith, a liaison to the lender as a member of GM's National Dealer Council, as saying, "There's so many dealers on the edge, if GMAC goes out of business 30 to 40 percent of dealers won't be able to get financing from anywhere else. They'll go out of business." As reported by the Troubled Company Reporter on Dec. 11, 2008, GMAC Financial Services threatened bondholders that it would abandon its effort to become a bank holding company if it doesn't get the required support from them. GMAC failed to lure enough bondholders to $38 billion debt exchange offer and so the company failed to raise enough capital for it to become a bank holding company. GMAC must raise $2 billion of new capital and have at least $30 billion in total regulatory capital. By becoming a bank, GMAC will be able to access the Treasury's $700 billion rescue fund. It will also allow GMAC to sell bonds backed by the Federal Deposit Insurance Corp., giving it new funding. GMAC was shut out of the public market for bonds backed by auto loans for the past six months. GMAC asked bondholders in November to tender their securities for at least 55 cents in cash or a combination of new notes and preferred stock, which would count as regulatory capital. GMAC's debt exchange offer is extended to GMAC and Residential Capital LLC investors. GMAC extended for the third time the delivery deadline for debt holders to Dec. 12. Aparajita Saha-Bubna and Liz Rappaport at The Wall Street Journal report that some bondholders said that the plan doesn't ask enough sacrifice from GMAC's owners -- GM and an investor group led by Cerberus Capital Management LP. According to the report, the bondholders want equity holders to put in their share of new capital. According to WSJ, the proposed debt exchange is necessary to GMAC, which may face bankruptcy protection if it isn't completed. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Latin America, Africa and Middle East, with headquarters in Miramar, Florida, is one of GM's four regional business units. GM LAAM employs approximately 37,000 people in 18 countries and has manufacturing facilities in Argentina, Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and Venezuela. GM LAAM markets vehicles under the Buick, Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and Suzuki brands. As reported in the Troubled Company Reporter on Nov. 10, 2008, General Motors Corporation's balance sheet at Sept. 30, 2008, showed total assets of $110.425 billion, total liabilities of $170.3 billion, resulting in a stockholders' deficit of $59.9 billion. * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on General Motors Corp. to 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. S&P said that the outlook is negative. Fitch Ratings, as reported in the Troubled Company Reporter on Nov. 11, 2008, placed the Issuer Default Rating of General Motors on Rating Watch Negative as a result of the company's rapidly diminishing liquidity position. Given the current liquidity level of $16.2 billion and the pace of negative cash flows, Fitch expects that GM will require direct federal assistance over the next quarter and the forbearance of trade creditors in order to avoid default. With virtually no further access to external capital and little potential for material asset sales, cash holdings are expected to shortly reach minimum required operating levels. Fitch placed these on Rating Watch Negative: -- Senior secured at 'B/RR1'; -- Senior unsecured at 'CCC-/RR5'. As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corp. and General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. Economy. GLITNIR BANKI: KPMG Halts Probe on Pre-Bankruptcy Operations ------------------------------------------------------------ Iceland Review reports that KPMG Iceland decided Wednesday last week to halt its investigation of trade within Glitnir banki hf before it went bankrupt following criticism of its work. According to the report, KPMG's participation in the investigation was criticized because the auditor had also worked for old Glitnir's largest shareholders. Arni Tomasson, chairman of the resolution committee of old Glitnir, as cited by the report, said KPMG, which launched its investigation of old Glitnir in October, will not receive payment for its work. "Since [KPMG] chose to leave the project they own the data and will not get paid. I don't know whether we can reach an agreement with them on partial payment for the exchange of some of the data," Mr. Tomasson was quoted by the report as saying. The Glitnir resolution committee is now in talks with auditor Ernst & Young on resuming the investigation, the report discloses. The investigation, according to Mr. Tomasson, will be delayed by up to two months as Ernst & Young have much less information about old Glitnir's operations, the report relates. It is also unclear whether the new investigator will be able to use some of the information gathered by KPMG, the report adds. Mr. Tomasson however noted all possible connections between the auditor and old Glitnir are currently being looked into, the report states. About Glitnir banki Headquartered in Reykjavik, Iceland, Glitnir banki hf -- http://www.glitnir.is/-- offers an array of financial services to corporation, financial institutions, investors and individuals. Glitnir banki filed a Chapter 15 petition on November 26, 2008 (Bankr. S.D. N.Y. Case No. 08-14757). The firm has retained Gary S. Lee, Esq., at Morrison & Foerster LLP, in New York, as counsel. In its Chapter 15 petition, the company estimated both its assets and debts to be than US$1 billion each. GMAC LLC: Bankruptcy Would Cause GM to Lose 40% of Dealers ---------------------------------------------------------- A bankruptcy filing by GMAC LLC may cause General Motors Corp. to lose as many as 40% of its 6,500 U.S. dealerships, Greg Bensinger at Bloomberg News reports, citing a retailer for GM. Bloomberg relates that GMAC is GM dealers' largest source of financing for purchasing vehicles, representing about 75% of U.S. inventory. The report says that tighter GMAC loan rules discouraged about 40% of potential buyers, helping drag GM sales to a 22% decline this year. Bloomberg quoted Martin NeSmith, a liaison to the lender as a member of GM's National Dealer Council, as saying, "There's so many dealers on the edge, if GMAC goes out of business 30 to 40 percent of dealers won't be able to get financing from anywhere else. They'll go out of business." As reported by the Troubled Company Reporter on Dec. 11, 2008, GMAC Financial Services threatened bondholders that it would abandon its effort to become a bank holding company if it doesn't get the required support from them. GMAC failed to lure enough bondholders to $38 billion debt exchange offer and so the company failed to raise enough capital for it to become a bank holding company. GMAC must raise $2 billion of new capital and have at least $30 billion in total regulatory capital. By becoming a bank, GMAC will be able to access the Treasury's $700 billion rescue fund. It will also allow GMAC to sell bonds backed by the Federal Deposit Insurance Corp., giving it new funding. GMAC was shut out of the public market for bonds backed by auto loans for the past six months. GMAC asked bondholders in November to tender their securities for at least 55 cents in cash or a combination of new notes and preferred stock, which would count as regulatory capital. GMAC's debt exchange offer is extended to GMAC and Residential Capital LLC investors. GMAC extended for the third time the delivery deadline for debt holders to Dec. 12. Aparajita Saha-Bubna and Liz Rappaport at The Wall Street Journal report that some bondholders said that the plan doesn't ask enough sacrifice from GMAC's owners -- GM and an investor group led by Cerberus Capital Management LP. According to the report, the bondholders want equity holders to put in their share of new capital. According to WSJ, the proposed debt exchange is necessary to GMAC, which may face bankruptcy protection if it isn't completed. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Latin America, Africa and Middle East, with headquarters in Miramar, Florida, is one of GM's four regional business units. GM LAAM employs approximately 37,000 people in 18 countries and has manufacturing facilities in Argentina, Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and Venezuela. GM LAAM markets vehicles under the Buick, Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and Suzuki brands. As reported in the Troubled Company Reporter on Nov. 10, 2008, General Motors Corporation's balance sheet at Sept. 30, 2008, showed total assets of $110.425 billion, total liabilities of $170.3 billion, resulting in a stockholders' deficit of $59.9 billion. * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on General Motors Corp. to 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. S&P said that the outlook is negative. Fitch Ratings, as reported in the Troubled Company Reporter on Nov. 11, 2008, placed the Issuer Default Rating of General Motors on Rating Watch Negative as a result of the company's rapidly diminishing liquidity position. Given the current liquidity level of $16.2 billion and the pace of negative cash flows, Fitch expects that GM will require direct federal assistance over the next quarter and the forbearance of trade creditors in order to avoid default. With virtually no further access to external capital and little potential for material asset sales, cash holdings are expected to shortly reach minimum required operating levels. Fitch placed these on Rating Watch Negative: -- Senior secured at 'B/RR1'; -- Senior unsecured at 'CCC-/RR5'. As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corp. and General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. Economy. 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. As reported in the Troubled Company Reporter on Nov. 13, 2008, Fitch Ratings has downgraded GMAC LLC's issuer default rating and senior unsecured debt: (i) IDR to 'CCC' from 'B+'; and (ii) senior unsecured debt to 'CC' from 'B+'. GMAC LLC: Delivery Time Extension Won't Affect S&P's Junk Ratings ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on GMAC LLC (CC/Watch Neg/C) and its 100% owned subsidiary, Residential Capital LLC (CC/Watch Neg/C) are not affected by GMAC's announcement that it extended the early delivery time with respect to separate private exchange offers and cash tender offers to purchase or exchange certain of its and its subsidiaries' and Residential Capital's outstanding notes to provide investors with a final opportunity to consider the GMAC and Residential Capital LLC offers. The extension was accompanied by GMAC's disclosure that, based on results of the offers to date, GMAC would not obtain sufficient regulatory capital to meet requirements set by the Federal Reserve for GMAC to become a bank holding company. The Fed required GMAC to achieve a minimum of $30 billion total regulatory capital in connection with its application. To satisfy this stipulation, the company estimates a required participation level of about 75% on a pro rata basis. Furthermore, the Fed informed GMAC that if the capital requirements are not met, the application to become a bank holding company would not be approved. According to GMAC, it intends to withdraw its application to become a bank holding company if the participation level is not achieved with this extension. The company also disclosed that its inability to convert to a bank holding company and complete the GMAC and Residential Capital LLC offers by Dec. 31, 2008, would have a near-term material adverse effect on GMAC's business, results of operations, and financial position. If the company fails to convert to a bank holding company, S&P believes the potential for a bankruptcy filing by either or both of these companies would be high. In the absence of both a bankruptcy filing and conversion to a bank holding company, S&P would not likely lower its ratings on GMAC and Residential Capital LLC until it defaults on its obligations. S&P would view completion of the exchange as a default under its criteria and S&P would expect to downgrade GMAC and Residential Capital to 'SD' (selective default), with the affected debt ratings lowered to 'D'. S&P would subsequently re-rate GMAC and Residential Capital, considering the new debt and capital structures, future business prospects, and other factors relevant to the rating. HAVEN TRUST: State Regulator Seizes Bank; BBT to Assume Deposits ---------------------------------------------------------------- The Georgia Department of Banking and Finance closed Haven Trust Bank on Dec. 12. Subsequently, the Federal Deposit Insurance Corporation was named Receiver. No advance notice was given to the public when a financial institution is closed. Home equity lines of credit and other lines of credit have been suspended. Jessica Holzer at The Wall Street Journal reports that Branch Banking & Trust will buy $55 million of Haven Trust's $572 million in assets, while the FDIC will take control of the rest. BBT entered into an agreement with the FDIC to assume all of Haven Trust's $515 million in deposits. All deposit accounts have been transferred to BB&T. Transferred deposits will be separately insured from any accounts clients may already have at BB&T for six months after the failure of Haven Trust. Checks that were drawn on Haven Trust Bank that didn't clear before the institution closed will be honored as long as there are sufficient funds in the account. Haven Trust's four branches will reopen as BB&T branches on Dec. 15. Heaven Trust Bank -- http://www.haventrustbank.com/ -- is headquartered in Duluth, Georgia. HAYES-LEMMERZ INT'L: Fitch Puts Issuer Default Rating on WatchNeg. ------------------------------------------------------------------ Fitch Ratings has placed the Issuer Default Ratings of the U.S. auto suppliers listed below on Rating Watch Negative, based on the impact of a potential bankruptcy filing by General Motors (and Fitch's view that this would be followed by a bankruptcy at Ford). Given its smaller profile, it is unlikely that a bankruptcy filing by Chrysler would have the same impact. Industry bankruptcies could result from either the failure of the auto legislation currently under consideration in the U.S. Congress, or the failure of the Detroit Three to develop viable restructuring plans in the several months prior to the expiration of the bridge loans included in the current legislation. In 2009, auto suppliers are already facing a steep global downturn in auto production, including a deeply depressed production forecast in the U.S. and Europe. In the event of a General Motors bankruptcy, Fitch believes that the resulting contraction in auto production, the supply chain, trade credit and capital-access would cause widespread shutdowns and bankruptcies throughout the supply chain. Given the cliff-risk nature of the risks involved, Fitch has tried to detail below the extent of the potential rating actions that would be taken in the event of a GM bankruptcy. In any event, Fitch will continue to take individual rating actions in the sector as events unfold over the next several weeks and months. Fitch notes that even if the OEMs avoid bankruptcy, major restructurings of their operations will occur, causing material changes in the operations of their Tier I suppliers. These restructurings could also lead to ratings actions, providing further rationale for placing these suppliers on Rating Watch Negative. The auto suppliers placed or remain on Rating Watch Negative and the ratings most likely to result in the event of a GM bankruptcy are: Companies Current IDR/Prospective IDR -- American Axle 'B'/'CC'; -- ArvinMeritor 'B'/CCC'; -- Hayes-Lemmerz 'B'/CCC'; -- Johnson Controls 'A-'/'BBB+'; -- Tenneco 'BB-/B-'; -- TRW 'BB'/'B-'; -- Visteon 'CCC'/'CC' -- Companies not included in the rating actions: -- Cummins 'BBB+'; -- Goodyear 'BB-'; -- Navistar 'BB-' Despite improved diversification by most Tier 1 suppliers, across manufacturers, geographies and product lines, the decline in supplier revenues and operating cash flow through 2009 resulting from a GM bankruptcy would likely produce covenant violations across the vast majority of suppliers. Of equal concern, Tier 2 and three suppliers are likely to experience widespread bankruptcies through loss of volume, lack of receivables financing, and restricted financial and trade credit. Fitch expects that a collapse of trade credit throughout the supply chain would put at risk the domestic operations of these suppliers, as well as their financial viability. TRW and Tenneco remain better positioned given their global operations, but Fitch expects that these two companies, at a minimum, would require renegotiations with their bank group. Ratings on Rating Watch Negative are: American Axle & Manufacturing Holdings, Inc. -- IDR 'B'; American Axle & Manufacturing, Inc -- IDR 'B'; ArvinMeritor -- IDR 'B'; -- Secured 'BB'; -- Senior unsecured 'B/RR4'. Hayes-Lemmerz International, Inc -- IDR 'B'. Hayes-Lemmerz Finance Luxembourg S.A -- IDR 'B'; -- Senior unsecured 'B-/RR5'; -- Senior secured 'BB/RR1'. HLI Operating Company Inc. -- IDR 'B'; -- Senior secured 'BB/RR1'. Johnson Controls -- IDR 'A-'. York International -- IDR 'A-'. Tenneco -- IDR 'BB-'; -- Senior unsecured 'BB-'; -- Subordinated 'B'; -- Senior secured notes 'BB'; -- Senior secured credit facilities 'BB+'. TRW Automotive Holdings Corp -- IDR 'BB'. TRW Automotive, Inc -- IDR 'BB'; -- Secured 'BB+'; -- Senior unsecured 'BB-'. Visteon Corp -- IDR 'CCC'; -- Senior secured 'B/RR1'; -- senior unsecured 'CC/RR6'. HAYES-LEMMERZ FINANCE: Fitch Puts IDR on Negative Watch ------------------------------------------------------- Fitch Ratings has placed the Issuer Default Ratings of the U.S. auto suppliers listed below on Rating Watch Negative, based on the impact of a potential bankruptcy filing by General Motors (and Fitch's view that this would be followed by a bankruptcy at Ford). Given its smaller profile, it is unlikely that a bankruptcy filing by Chrysler would have the same impact. Industry bankruptcies could result from either the failure of the auto legislation currently under consideration in the U.S. Congress, or the failure of the Detroit Three to develop viable restructuring plans in the several months prior to the expiration of the bridge loans included in the current legislation. In 2009, auto suppliers are already facing a steep global downturn in auto production, including a deeply depressed production forecast in the U.S. and Europe. In the event of a General Motors bankruptcy, Fitch believes that the resulting contraction in auto production, the supply chain, trade credit and capital-access would cause widespread shutdowns and bankruptcies throughout the supply chain. Given the cliff-risk nature of the risks involved, Fitch has tried to detail below the extent of the potential rating actions that would be taken in the event of a GM bankruptcy. In any event, Fitch will continue to take individual rating actions in the sector as events unfold over the next several weeks and months. Fitch notes that even if the OEMs avoid bankruptcy, major restructurings of their operations will occur, causing material changes in the operations of their Tier I suppliers. These restructurings could also lead to ratings actions, providing further rationale for placing these suppliers on Rating Watch Negative. The auto suppliers placed or remain on Rating Watch Negative and the ratings most likely to result in the event of a GM bankruptcy are: Companies Current IDR/Prospective IDR -- American Axle 'B'/'CC'; -- ArvinMeritor 'B'/CCC'; -- Hayes-Lemmerz 'B'/CCC'; -- Johnson Controls 'A-'/'BBB+'; -- Tenneco 'BB-/B-'; -- TRW 'BB'/'B-'; -- Visteon 'CCC'/'CC' -- Companies not included in the rating actions: -- Cummins 'BBB+'; -- Goodyear 'BB-'; -- Navistar 'BB-' Despite improved diversification by most Tier 1 suppliers, across manufacturers, geographies and product lines, the decline in supplier revenues and operating cash flow through 2009 resulting from a GM bankruptcy would likely produce covenant violations across the vast majority of suppliers. Of equal concern, Tier 2 and three suppliers are likely to experience widespread bankruptcies through loss of volume, lack of receivables financing, and restricted financial and trade credit. Fitch expects that a collapse of trade credit throughout the supply chain would put at risk the domestic operations of these suppliers, as well as their financial viability. TRW and Tenneco remain better positioned given their global operations, but Fitch expects that these two companies, at a minimum, would require renegotiations with their bank group. Ratings on Rating Watch Negative are: American Axle & Manufacturing Holdings, Inc. -- IDR 'B'; American Axle & Manufacturing, Inc -- IDR 'B'; ArvinMeritor -- IDR 'B'; -- Secured 'BB'; -- Senior unsecured 'B/RR4'. Hayes-Lemmerz International, Inc -- IDR 'B'. Hayes-Lemmerz Finance Luxembourg S.A -- IDR 'B'; -- Senior unsecured 'B-/RR5'; -- Senior secured 'BB/RR1'. HLI Operating Company Inc. -- IDR 'B'; -- Senior secured 'BB/RR1'. Johnson Controls -- IDR 'A-'. York International -- IDR 'A-'. Tenneco -- IDR 'BB-'; -- Senior unsecured 'BB-'; -- Subordinated 'B'; -- Senior secured notes 'BB'; -- Senior secured credit facilities 'BB+'. TRW Automotive Holdings Corp -- IDR 'BB'. TRW Automotive, Inc -- IDR 'BB'; -- Secured 'BB+'; -- Senior unsecured 'BB-'. Visteon Corp -- IDR 'CCC'; -- Senior secured 'B/RR1'; -- senior unsecured 'CC/RR6'. HEALTHSOUTH CORP: Court to Consider UBS Settlement on January 12 ---------------------------------------------------------------- HealthSouth Corporation disclosed in a regulatory filing with the Securities and Exchange Commission that it will be obligated to pay the reasonable fees and expenses of the derivative plaintiffs' lawyers, subject to the approval of the Circuit Court of Jefferson County, Alabama. On Oct. 23, 2008, HealthSouth and derivative stockholder plaintiffs reached an agreement in principle with UBS Securities, LLC and UBS AG, Stamford Branch, well as UBS' insurance carriers, to settle certain claims in the litigation, captioned Tucker v. Scrushy (CV-0205212), filed by the derivative plaintiffs on HealthSouth's behalf in the Court. A full-text copy of the notice of proposed partial settlement of derivative action is available for free at http://ResearchArchives.com/t/s?3627 On Dec. 11, 2008, the court unsealed the Petition for Fees as to Recovery in Settlement of $133 Million from Defendant UBS Securities LLC filed by the derivative plaintiffs' lawyers. In the Fee Petition, the derivative plaintiffs' lawyers ask for a fee award of 30% of $133 million, or $39.9 million, plus out-of-pocket expenses not to exceed $1.7 million. A full-text copy of the Fee Petition is available for free at http://ResearchArchives.com/t/s?3628 The Court has set a hearing for Jan. 12, 2009, at 10 a.m. CST at which time it is anticipated the Court will determine whether or not: i) to approve a proposed settlement of claims with UBS; ii) to approve an Order ending a portion of this lawsuit and barring further lawsuits over the claims made, or which could have been made, by or against UBS in Tucker v. Scrushy; and iii) to award fees and expenses to derivative plaintiffs' lawyers. The Court issued preliminary approval of the settlement on Nov. 13, 2008. The process by which stockholders may object to any of these matters in advance of the hearing is set out in the Notice of Proposed Partial Settlement of Derivative Action that was previously sent to all stockholders. As provided in the Notice of Proposed Partial Settlement of Derivative Action, stockholders wishing to object to the Settlement or the Fee Petition must do so no later than 10 days prior to the Settlement Hearing. The company added that this settlement agreement relates only to UBS and does not relate to the other defendants or otherwise affect the Tucker v. Scrushy derivative litigation. About HealthSouth Corp. Headquartered in Birmingham, Alabama, HealthSouth Corp. (NYSE: HLS) -- http://www.healthsouth.com/-- provides inpatient rehabilitation services. Operating in 26 states across the country and in Puerto Rico, HealthSouth serves more than 250,000 patients annually through its network of inpatient rehabilitation hospitals, long-term acute care hospitals, outpatient rehabilitation satellites, and home health agencies. At Sept. 30, 2008, the company's balance sheet showed total assets of $1.9 billion and total liabilities of $3.3 billion, resulting in a shareholders' deficit of about $1.4 billion. For three months ended Sept. 30, 2008, the company's net income was $6.6 million compared with net income of $287.6 million for the same period in the previous year. For nine months ended Sept. 30, 2008, the company reported net income of $70.5 million compared with net income of $699.2 million for the same period in the previous year. In total and through October 2008, the company has reduced its total debt outstanding by approximately $208 million since Dec. 31, 2007. Total debt outstanding approximated $1.8 billion as of Oct. 31, 2008. HLI OPERATING: Fitch Puts Issuer Default Rating on WatchNeg. ------------------------------------------------------------ Fitch Ratings has placed the Issuer Default Ratings of the U.S. auto suppliers listed below on Rating Watch Negative, based on the impact of a potential bankruptcy filing by General Motors (and Fitch's view that this would be followed by a bankruptcy at Ford). Given its smaller profile, it is unlikely that a bankruptcy filing by Chrysler would have the same impact. Industry bankruptcies could result from either the failure of the auto legislation currently under consideration in the U.S. Congress, or the failure of the Detroit Three to develop viable restructuring plans in the several months prior to the expiration of the bridge loans included in the current legislation. In 2009, auto suppliers are already facing a steep global downturn in auto production, including a deeply depressed production forecast in the U.S. and Europe. In the event of a General Motors bankruptcy, Fitch believes that the resulting contraction in auto production, the supply chain, trade credit and capital-access would cause widespread shutdowns and bankruptcies throughout the supply chain. Given the cliff-risk nature of the risks involved, Fitch has tried to detail below the extent of the potential rating actions that would be taken in the event of a GM bankruptcy. In any event, Fitch will continue to take individual rating actions in the sector as events unfold over the next several weeks and months. Fitch notes that even if the OEMs avoid bankruptcy, major restructurings of their operations will occur, causing material changes in the operations of their Tier I suppliers. These restructurings could also lead to ratings actions, providing further rationale for placing these suppliers on Rating Watch Negative. The auto suppliers placed or remain on Rating Watch Negative and the ratings most likely to result in the event of a GM bankruptcy are: Companies Current IDR/Prospective IDR -- American Axle 'B'/'CC'; -- ArvinMeritor 'B'/CCC'; -- Hayes-Lemmerz 'B'/CCC'; -- Johnson Controls 'A-'/'BBB+'; -- Tenneco 'BB-/B-'; -- TRW 'BB'/'B-'; -- Visteon 'CCC'/'CC' -- Companies not included in the rating actions: -- Cummins 'BBB+'; -- Goodyear 'BB-'; -- Navistar 'BB-' Despite improved diversification by most Tier 1 suppliers, across manufacturers, geographies and product lines, the decline in supplier revenues and operating cash flow through 2009 resulting from a GM bankruptcy would likely produce covenant violations across the vast majority of suppliers. Of equal concern, Tier 2 and three suppliers are likely to experience widespread bankruptcies through loss of volume, lack of receivables financing, and restricted financial and trade credit. Fitch expects that a collapse of trade credit throughout the supply chain would put at risk the domestic operations of these suppliers, as well as their financial viability. TRW and Tenneco remain better positioned given their global operations, but Fitch expects that these two companies, at a minimum, would require renegotiations with their bank group. Ratings on Rating Watch Negative are: American Axle & Manufacturing Holdings, Inc. -- IDR 'B'; American Axle & Manufacturing, Inc -- IDR 'B'; ArvinMeritor -- IDR 'B'; -- Secured 'BB'; -- Senior unsecured 'B/RR4'. Hayes-Lemmerz International, Inc -- IDR 'B'. Hayes-Lemmerz Finance Luxembourg S.A -- IDR 'B'; -- Senior unsecured 'B-/RR5'; -- Senior secured 'BB/RR1'. HLI Operating Company Inc. -- IDR 'B'; -- Senior secured 'BB/RR1'. Johnson Controls -- IDR 'A-'. York International -- IDR 'A-'. Tenneco -- IDR 'BB-'; -- Senior unsecured 'BB-'; -- Subordinated 'B'; -- Senior secured notes 'BB'; -- Senior secured credit facilities 'BB+'. TRW Automotive Holdings Corp -- IDR 'BB'. TRW Automotive, Inc -- IDR 'BB'; -- Secured 'BB+'; -- Senior unsecured 'BB-'. Visteon Corp -- IDR 'CCC'; -- Senior secured 'B/RR1'; -- senior unsecured 'CC/RR6'. HORACE MANN: A.M. Best Assigns "bb+" Rating on Subordinated Debt ---------------------------------------------------------------- A.M. Best Co. assigned on December 5, 2008, indicative ratings of "bbb-" on senior unsecured debt, "bb+" on subordinated debt and "bb" on preferred stock of Horace Mann Educators Corporation's (Horace Mann) (Springfield, IL) [NYSE: HMN] $300 million universal shelf registration filed on November 26, 2008 to replace its current $300 million shelf registration, which expired on December, 1, 2008. The ratings from the expired shelf have been withdrawn, and the assigned outlook on the new ratings is stable. The financial strength, issuer credit and debt ratings of Horace Mann and its direct and indirect life/health subsidiaries led by Horace Mann Insurance Company (HMIC) (Springfield, IL) are unchanged. The shelf offering allows Horace Mann to periodically sell debt securities, ordinary shares, preference shares and other securities with net proceeds to be used for working capital and general corporate purposes. Following any debt issues, Horace Mann's debt-to-adjusted capital and fixed charge coverage ratios are expected to remain within A.M. Best's published parameters for a company at Horace Mann's current rating level. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. HOSPITALS INSURANCE: A.M Best Cuts FSR to "C-" & ICR to "cc" ------------------------------------------------------------ A.M. Best Co. downgraded on December 2, 2008, the financial strength rating (FSR) to C- (Weak) from C++ (Marginal) and issuer credit rating (ICR) to "cc" from "b" of Hospitals Insurance Company, Inc. (HIC) (White Plains, NY). The outlook for both ratings is negative. Subsequently, A.M. Best has withdrawn the ratings at the company's request and assigned a category NR-4 (Company Request) to the FSR and an "nr" to the ICR. The downgrading of the ratings is based on the decrease in HIC's risk-adjusted capitalization, primarily driven by the significant decline in the value of its equity investment portfolio. HIC's ratings are reflective of its weak capitalization, inconsistent operating performance, the business risk the company faces from its concentration in New York, the additional volatility associated with the equity markets given its large common stock portfolio relative to its surplus size and the lack of reinsurance protection. Risk-adjusted capitalization is hindered by the company's highly elevated level of investment leverage and reserve leverage, which is exacerbated by the substantial surplus dependence on heavily discounted loss reserves and unstable reserve development. JOHNSON CONTROLS: Fitch Puts Issuer Default Rating on WatchNeg. --------------------------------------------------------------- Fitch Ratings has placed the Issuer Default Ratings of the U.S. auto suppliers listed below on Rating Watch Negative, based on the impact of a potential bankruptcy filing by General Motors (and Fitch's view that this would be followed by a bankruptcy at Ford). Given its smaller profile, it is unlikely that a bankruptcy filing by Chrysler would have the same impact. Industry bankruptcies could result from either the failure of the auto legislation currently under consideration in the U.S. Congress, or the failure of the Detroit Three to develop viable restructuring plans in the several months prior to the expiration of the bridge loans included in the current legislation. In 2009, auto suppliers are already facing a steep global downturn in auto production, including a deeply depressed production forecast in the U.S. and Europe. In the event of a General Motors bankruptcy, Fitch believes that the resulting contraction in auto production, the supply chain, trade credit and capital-access would cause widespread shutdowns and bankruptcies throughout the supply chain. Given the cliff-risk nature of the risks involved, Fitch has tried to detail below the extent of the potential rating actions that would be taken in the event of a GM bankruptcy. In any event, Fitch will continue to take individual rating actions in the sector as events unfold over the next several weeks and months. Fitch notes that even if the OEMs avoid bankruptcy, major restructurings of their operations will occur, causing material changes in the operations of their Tier I suppliers. These restructurings could also lead to ratings actions, providing further rationale for placing these suppliers on Rating Watch Negative. The auto suppliers placed or remain on Rating Watch Negative and the ratings most likely to result in the event of a GM bankruptcy are: Companies Current IDR/Prospective IDR -- American Axle 'B'/'CC'; -- ArvinMeritor 'B'/CCC'; -- Hayes-Lemmerz 'B'/CCC'; -- Johnson Controls 'A-'/'BBB+'; -- Tenneco 'BB-/B-'; -- TRW 'BB'/'B-'; -- Visteon 'CCC'/'CC' -- Companies not included in the rating actions: -- Cummins 'BBB+'; -- Goodyear 'BB-'; -- Navistar 'BB-' Despite improved diversification by most Tier 1 suppliers, across manufacturers, geographies and product lines, the decline in supplier revenues and operating cash flow through 2009 resulting from a GM bankruptcy would likely produce covenant violations across the vast majority of suppliers. Of equal concern, Tier 2 and three suppliers are likely to experience widespread bankruptcies through loss of volume, lack of receivables financing, and restricted financial and trade credit. Fitch expects that a collapse of trade credit throughout the supply chain would put at risk the domestic operations of these suppliers, as well as their financial viability. TRW and Tenneco remain better positioned given their global operations, but Fitch expects that these two companies, at a minimum, would require renegotiations with their bank group. Ratings on Rating Watch Negative are: American Axle & Manufacturing Holdings, Inc. -- IDR 'B'; American Axle & Manufacturing, Inc -- IDR 'B'; ArvinMeritor -- IDR 'B'; -- Secured 'BB'; -- Senior unsecured 'B/RR4'. Hayes-Lemmerz International, Inc -- IDR 'B'. Hayes-Lemmerz Finance Luxembourg S.A -- IDR 'B'; -- Senior unsecured 'B-/RR5'; -- Senior secured 'BB/RR1'. HLI Operating Company Inc. -- IDR 'B'; -- Senior secured 'BB/RR1'. Johnson Controls -- IDR 'A-'. York International -- IDR 'A-'. Tenneco -- IDR 'BB-'; -- Senior unsecured 'BB-'; -- Subordinated 'B'; -- Senior secured notes 'BB'; -- Senior secured credit facilities 'BB+'. TRW Automotive Holdings Corp -- IDR 'BB'. TRW Automotive, Inc -- IDR 'BB'; -- Secured 'BB+'; -- Senior unsecured 'BB-'. Visteon Corp -- IDR 'CCC'; -- Senior secured 'B/RR1'; -- senior unsecured 'CC/RR6'. KINETEK HOLDINGS: S&P Cuts Corp. Credit Rating to B-; Outlook Neg. ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on Deerfield, Illinois-based Kinetek Holdings Corp., including the long-term corporate credit rating to 'B-' from 'B'. The outlook is negative. "The rating action reflects our belief that the company is at a heightened risk of a covenant violation in the near term given the weak end markets and step-downs in its covenant levels," said S&P's credit analyst Helena Song. It also reflects the company's weakened performance resulting from challenging economic conditions in U.S. and Europe, where the company generates most of its revenue. The ratings on Kinetek reflect the company's highly leveraged financial profile and the competitive and cyclical nature of the global electrical motors and motion controls systems industry in which it operates. Partly mitigating these risks are the company's well-established market positions in several niches and its relatively sound profitability underpinned by low-cost manufacturing capabilities. Kinetek manufactures special-purpose electric motors and electronic motion control systems for original equipment manufacturer applications -- including elevators, commercial floor care machines, and consumer appliances -- and other niche end markets. Although cyclical and mature, the end markets and the company's customer base are relatively diverse, and there are growth opportunities in emerging markets. After several quarters of growth underpinned by favorable economic conditions and market share gains, the company recently started to experience a sharp downturn resulting from the softening U.S. and Europe economy. Kinetek has also experienced competitive pricing pressure and had limited success in passing along higher prices for raw materials and motors and electronic components. Kinetek's financial risk profile is highly leveraged. As of Sept. 30, 2008, total debt to EBITDA (adjusted for operating leases, but excluding about $159 million of preferred stock) was about 5.9x, and funds from operations to total debt was about 8%. Leverage is higher when the preferred stock, which S&P views as having the potential to be recapitalized into debt, is treated as debt. S&P could lower the ratings if Kinetek violates its covenants and the likelihood of obtaining a satisfactory cure worsens or if the company fails to meet its financial obligations. A positive ratings action could occur if the company avoids a covenant violation or, if the company does violate a covenant, the company is able to receive adequate relief. L&M STRATEGIC INVESTMENTS: Voluntary Chapter 11 Case Summary ------------------------------------------------------------ Debtor: L & M STRATEGIC INVESTMENTS, L.L.C. 387 N. 2ND AVE., 2A PHOENIX, AZ 85003 Case No.: 08-17994 Chapter 11 Petition Date: December 11, 2008 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: Sarah Sharer Curley Debtor's Counsel: DEAN M. DINNER, Esq. Email: ddinner@nussbaumgillis.com RANDY NUSSBAUM, Esq. Email: rnussbaum@nussbaumgillis.com NUSSBAUM & GILLIS P.C. 14500 N. NORTHSIGHT BLVD., SUITE 116 SCOTTSDALE, AZ 85260-0001 Tel: 480-609-0011 Fax: 480-609-0016 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Debtor did not file its list of largest unsecured creditors when it filed its petition. LB-UBS COMMERCIAL: S&P Keeps Low-B Ratings on 6 Classes of Certs. ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 21 classes of commercial mortgage pass-through certificates from LB- UBS Commercial Mortgage Trust 2003-C7. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. As of the Nov. 18, 2008, remittance report, the collateral pool consisted of 50 loans with an aggregate trust balance of $998.6 million, down from 68 loans totaling $1.447 billion at issuance. The master servicer, Wachovia Bank N.A. (Wachovia), reported financial information for 99% of the pool, 98% of which was full-year 2007 data. S&P's calculated a weighted average debt service coverage of 2.17x for the pool, up from 1.98x at issuance. There are no delinquent loans in the pool, and there is one loan totaling $31.6 million (3.1%) with the special servicer, ING Clarion Capital Loan Servicing LLC. The trust has experienced two losses totaling $603,597 to date. The top 10 loans secured by real estate have an aggregate outstanding balance of $687.6 million (69.4%) and a weighted average DSC of 2.29x, up from 2.19x at issuance. The eighth- largest loan is with the special servicer and is discussed below. Standard & Poor's reviewed property inspections provided by Wachovia for all of the top 10 loan exposures. Nine were characterized as "good," and one was characterized as "excellent." Five loans (the Bank of America Building loan, the Parklawn Building loan, the Valley Plaza Shopping Center loan, the Westfield Shoppingtown Santa Anita loan, and the Visalia Mall loan) have credit characteristics consistent with those of investment-grade rated obligations. Standard & Poor's adjusted values for these loans are comparable to their levels at issuance. Details of the two largest of these loans are: -- The largest loan in the pool, the Bank of America Building loan, has a trust balance of $206.7 million and whole-loan balance of $212.5 million. The whole loan consists of a $206.7 million A-note that is included in the trust and a $5.8 million B note held outside of the trust. The loan is secured by the fee interest in a 29-story, 1.1 million-sq.- ft. office property located at Madison Avenue and 43rd Street in Manhattan. The property has an underground walkway connecting it to adjacent Grand Central Station. The property is occupied by multiple tenants at an average rent of $51.49 per sq. ft. The largest tenant in the building is Bank of America (19.4% of office space). Reported DSC was 1.90x as of year-end 2007, and occupancy was 93.0%. S&P's adjusted value for this loan is comparable to its level at issuance. -- The Parklawn Building is the second-largest loan in the pool and has a trust and whole-loan balance of $100.0 million. The loan is secured by a first mortgage lien on a 1.4 million-sq.-ft. office property in Rockville, Maryland. The subject office property was built-to-suit for the General Services Administration in 1969 and was renovated in 1990 and 2001. As of year-end 2007, reported DSC was 2.26x and occupancy was 100.0%. S&P's adjusted value for this loan is comparable to its level at issuance. The eighth-largest loan is with the special servicer; details are: -- The Shepherd Office Center loan ($32.0 million, 3%) is secured by the fee interest in a 637,463-sq.-ft. office property in Oklahoma City. The loan was transferred to ING on Aug. 27, 2008, due to imminent maturity default. The special servicer accelerated the loan and declared an event of default on Sept. 9, 2008, due to the borrower's failure to renew a letter of credit for new leasing activity. The borrower subsequently filed for Chapter 11 bankruptcy protection on Sept. 10, 2008. As of March 2008, the reported DSC was 1.27x, and occupancy was 91%, down slightly from 1.30x and 91% as of year-end 2007. Based on the most recent "as-is" appraisal, S&P expects a minimal loss upon the ultimate resolution of the asset. There are two loans ($22.3 million, 2.2%) in the pool that have reported low DSC, one of which ($6.6 million, 0.6%) is a credit concern. The loan is secured by a retail property that has experienced a combination of declining occupancy and higher operating expenses. The loan reported a DSC of 0.69x and occupancy of 59% as of Dec. 31, 2007. Wachovia reported a watchlist of five loans ($35.1 million, 3.5%). The largest loan on the watchlist is the 1000 Vermont Avenue loan ($15.6 million, 1.6%). The loan is secured by a 78,237-sq.-ft. multitenant office building in Washington, D.C. The property was built in 1950 and renovated in 1997. The loan was placed on the watchlist because of a low DSC; however, the property is currently in lease-up. S&P used a Dec. 1, 2008, rent roll to calculate an estimated DSC that is greater than 1.0x. The remaining four loans are on the watchlist primarily because of low occupancy or a decline in DSC since issuance, and none has a balance greater than $7.2 million, or 0.7% of the pool. S&P 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 affirmed ratings. Ratings Affirmed LB-UBS Commercial Mortgage Trust Commercial mortgage pass-through certificates series 2003-C7 Class Rating Credit enhancement ----- ------ ------------------ A-2 AAA 21.86% A-3 AAA 21.86% A-4 AAA 21.86% A-1b AAA 21.86% B AAA 20.02% C AAA 17.81% D AAA 16.15% E AA+ 14.49% F AA 13.20% G AA- 10.81% H A 8.60% J BBB+ 7.12% K BBB 5.65% L BB+ 4.36% M BB 3.62% N BB- 3.26% P B+ 2.89% Q B 2.52% S B- 2.15% X-CL AAA N/A X-CP AAA N/A N/A - Not applicable. LB-UBS COMMERCIAL: S&P Junks Ratings on Class K & L Certificates ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on four classes of commercial mortgage pass-through certificates from LB- UBS Commercial Mortgage Trust's series 2000-C4. At the same time, S&P affirmed its ratings on eight other classes from this series. The lowered ratings reflect anticipated losses and credit support erosion upon the eventual resolution of one loan and three assets with the special servicer, CWCapital Asset Management. The downgrades also reflect credit concerns regarding eight of the 15 loans in the pool that have either reported low debt service coverage or are likely to do so in the near future. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. Details of the specially serviced assets are: -- The Grapevine I & II Professional Buildings asset ($6.2 million, 0.84%) is a 58,560-sq.-ft. office complex in Grapevine, Texas. An appraisal reduction amount of $4.5 million is in effect. Current occupancy is 32%, and the property is listed for sale for $3.8 million. -- The Cedar Pines loan ($5.6 million, 0.76%) is secured by a 169-unit multifamily property in Clarkston, Georgia. The loan was transferred to CWCapital on July 2, 2008, for imminent default. The loan is currently in foreclosure, and a receiver was appointed on Nov. 13, 2008. As of Sept. 30, 2008, occupancy was 48%. As of Dec. 3, 2008, 30 units were confirmed to be offline due to maintenance issues. CWCapital has estimated that the deferred maintenance issues will cost approximately $530,000 to remedy. Standard & Poor's expects that the resolution of the loan will result in a significant loss. -- The Flairwood Apartments asset ($3.0 million, 0.4%) is a 120- unit multifamily property in Memphis, Tennesse. An ARA of $2.4 million is in effect. As of Nov. 13, 2008, occupancy was 50%, and the property is currently listed for sale for $2.8 million. -- The Willow Creek Apartments asset ($2.9 million, 0.4%) is a 166-unit multifamily property in Memphis, Tennessee. An ARA of $1.9 million is in effect. As of Nov. 13, 2008, occupancy was 51%, and the property is currently listed for sale for $3.0 million. There is approximately $825,000 in deferred maintenance at the property. In addition to the specially serviced assets, 15 loans in the pool ($60.4 million, 8.2%) have reported low DSCs or are likely to do so in the near future. Eight of the 15 loans ($31.9 million, 4.3%) are credit concerns. Generally, the properties securing loans that are credit concerns have experienced declining occupancy and/or increasing expenses. The remaining seven loans generally have low debt exposure per sq. ft. or have experienced improved occupancy that S&P anticipates will boost the reported DSC above 1.0x. The 15 loans that have or will likely have low reported DSCs are secured by multifamily, office, and retail properties and have an average balance of $3.8 million. These loans have seen an average decline in DSC of 43% since issuance. As of the Nov. 18, 2008, remittance report, the collateral pool consisted of 133 loans with an aggregate trust balance of $736.0 million, compared with 167 loans totaling $999.1 million at issuance. The master servicer, KeyBank Real Estate Capital Inc., reported financial information for 98.6% of the pool, excluding the defeased loans; 96.3% of the servicer-reported information was from year-end 2007 or later. S&P's calculated a weighted average DSC of 1.78x for the pool, up from 1.40x at issuance. The trust has experienced 13 losses totaling $13.1 million to date. The top 10 loans secured by real estate have an aggregate outstanding balance of $244.6 million (33.2%) and a weighted average DSC of 2.08x, up from 1.72x at issuance. S&P's reviewed the property inspections provided by the master servicer for the properties underlying the top 10 exposures. All of the assets were characterized as being in "good" condition. KeyBank reported a watchlist of 19 loans ($62.7 million, 8.5%). The Clocktower Place Shopping Center loan ($12.2 million, 1.63%) is the largest loan on the watchlist and the seventh-largest loan in the pool. The loan is secured by a 214,198-sq.-ft. grocery- anchored retail shopping center 10 miles north of St. Louis, Missourri. The loan is on the watchlist because two tenants that had represented 46.6% of the net rentable area, Dierberg's Market and TJ Maxx, vacated the property, and occupancy fell to 50% as of Aug. 27, 2008. As of June 30, 2008, DSC was 0.54x. The remaining loans are on the watchlist due to declines in DSC, low occupancy, and/or higher expenses. Credit characteristics for the largest and third-largest loans in the pool continue to be consistent with those of investment-grade obligations. Details of these loans are: -- Westfield Shoppingtown South Shore, the largest loan in the pool ($78.9 million, 10.7%), is secured by 1.03 million sq. ft. of a 1.2 million-sq.-ft. regional shopping mall in Bay Shore, Long Island, New York. As of year-end 2007, the servicer-reported DSC was 1.82x. Occupancy was 95.4% as of June 30, 2008, compared with 96.9% for year-end 2007. Expense reimbursements and other income have declined, and operating expenses have increased. S&P's adjusted valuation has declined by 12% since issuance. -- Westfield Shoppingtown Plaza Camino Real, the third-largest loan in the pool ($36.0 million, 4.9%), is secured by 578,766 sq. ft. of a 1,148,028-sq.-ft. regional shopping mall in Carlsbad, California. The year-end 2007 servicer-reported DSC was 5.02x. Occupancy as of June 30, 2008, was 89.3%. Standard & Poor's adjusted valuation has increased by 17% since issuance. S&P'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 LB-UBS Commercial Mortgage Trust Commercial mortgage pass-through certificates series 2000-C4 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ H BB+ BBB- 5.69% J B BB+ 4.00% K CCC BB 2.98% L CCC- B+ 1.96% Ratings Affirmed LB-UBS Commercial Mortgage Trust Commercial mortgage pass-through certificates series 2000-C4 Class Rating Credit enhancement ----- ------ ------------------ A-2 AAA 26.73% B AAA 20.96% C AAA 15.53% D AAA 13.84% E AA+ 12.82% F A 10.44% G BBB+ 8.75% X AAA N/A N/A - Not applicable. LEVEL 3 COMMUNICATIONS: Convertible Notes Offering to Expire Today ------------------------------------------------------------------ Level 3 Communications, Inc. commenced three separate tender offers to purchase for cash any and all of its outstanding convertible notes listed in the table below at the consideration per $1,000 principal amount set forth next to the corresponding series of notes: Outstanding Minimum Title of Security Principal Tender Amount Condition Consideration ----------------- ----------- ---------- ------------- 2.875% Convertible Senior Notes due 2010 CUSIP No. 52729NBA7 $354,541,000 $177,270,500 $620.00 6% Convertible Subordinated Notes due 2010 CUSIP No. 52729NAS9 $481,666,000 $240,833,000 $700.00 6% Convertible Subordinated Notes due 2009 CUSIP No. 52729NAG5 $305,135,000 $152,567,500 $920.00 Each offer is scheduled to expire at 12:00 midnight, New York City time, on Dec. 15, 2008, unless extended for that offer or earlier terminated with respect to that offer. Holders of notes of any series validly tendered and not validly withdrawn on or prior to 12:00 midnight, New York City time on the applicable expiration date will receive the consideration for that series shown in the table above if such notes are accepted for payment pursuant to the terms and conditions of that offer. Accrued interest up to, but not including, the payment date will be paid in cash on all validly tendered and accepted notes. The company intends to fund purchases of the notes from the net proceeds of the sale of Level 3's to be newly issued 15% convertible senior notes due 2013 and from cash on hand. The investors in Level 3's New Notes are not obligated to purchase these notes if Level 3 does not accept for payment at least 50%, $177,270,500 in aggregate principal amount, of its 2.875% Convertible Senior Notes due 2010 and 50%, $240,833,000 in aggregate principal amount, of its 6% Convertible Subordinated Notes due 2010 in the respective offers for such notes and if other customary closing conditions are not satisfied. Conditions of the Offers All three offers are subject to the satisfaction or waiver of certain other conditions as set forth in the Offer to Purchase, dated the date hereof, filed with the SEC, including (i) there being validly tendered and not validly withdrawn on or prior to the applicable expiration date at least such principal amount of that series of notes to satisfy the Minimum Tender Condition and (ii) the sale of at least $373 million aggregate principal amount of the New Notes. In addition, (a) the offer to purchase its 6% Convertible Subordinated Notes due 2009 is conditioned on the acceptance for payment by the company of both its 2.875% Notes and its 2010 Notes pursuant to the terms and conditions of such other applicable offers, (b) the offer to purchase its 2010 Notes is conditioned on the acceptance for payment by the company of its 2.875% Notes pursuant to the terms and conditions of the offer for those 2.875% Notes and (c) the offer to purchase its 2.875% Notes is conditioned on the acceptance for payment by the company of its 2010 Notes pursuant to the terms and conditions of the offer for those 2010 Notes. A full-text copy of the first supplemental indenture is available for free at http://ResearchArchives.com/t/s?3544 A full-text copy of the securities purchase agreement is available for free at http://ResearchArchives.com/t/s?3543 A full-text copy of notes offering is available for free at http://ResearchArchives.com/t/s?362b Copies of the Offer to Purchase and the related Letter of Transmittal may be obtained from the Information Agent for the offers, Global Bondholder Services Corporation, at (212) 430-3774 (collect) and (866) 873-6300 (toll free). Citi and Merrill Lynch & Co. are the dealer managers for the offers. Questions regarding the offers may be directed to Citi at (800) 558-3745 (toll-free) and (212) 723-6106 or Merrill Lynch at (888) 654-8637 (toll-free) and (212) 449-4914. About Level 3 Communications Headquartered in Broomfield, Colorado, Level 3 Communications Inc. (Nasdaq: LVLT) -- http://www.level3.com/-- is a provider of fiber-based communications services. Level 3 offers a portfolio of metro and long haul services over an end-to-end fiber network, including transport, data, Internet, content delivery and voice. Level 3 Communications Inc. posted $4 million in net losses on $902 million in net revenues for the third quarter ended Sept. 30, 2008, compared with $23 million in net profit on $765 million in net revenues for same period ended Sept. 30, 2007. The company posted $19 million in net losses on $2.58 billion in net revenues for the nine months ended Sept. 30, 2008, compared with $22 million in net profit on $2.1 billion in net revenues for same period ended Sept. 30, 2007. * * * As reported in the Troubled Company Reporter on Nov. 26, 2008, Moody's Investors Service downgraded Level 3 Communications, Inc.'s probability of default rating to Ca from Caa1 in response to the company's Nov. 17 announcement that it had reached an agreement to raise $400 million in new convertible subordinated debt, the proceeds of which, together with cash on hand, will be used to fund discounted tender offers for three existing convertible debt issues that mature in 2009 and 2010. LEVITT AND SONS: Court Approves Unit's Sale of Laurel Canyon ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Florida has approved the purchase agreement between Debtor Levitt and Sons of Cherokee County, LLC, and SECL-LC/LL/PC, LLC, in all respects. LAS Cherokee County is authorized to sell Seasons at Laurel Canyon to SECL for $18,000,000, free and clear of any liens, claims, interests, and encumbrances. Objections that have not been withdrawn, waived or settled are denied and overruled on their merits, the Court ruled. No competing bids were received for the Assets and LAS Cherokee County believes that the Purchase Price represents the highest or otherwise best offer for the Assets. Levitt and Sons of Cherokee County, LLC, owns, and is in the business of developing, Seasons at Laurel Canyon, a planned community located in Cherokee County, Georgia. The Development consists primarily of single family homes. The Debtors earlier obtained approval of overbid protections, and a $550,000 breakup fee for the lead bidder, SECL. Pursuant to the Purchase Agreement, SECL has the right to assign and transfer its rights and obligations under the Agreement to one or more affiliates without the consent of LAS Cherokee County. On December 5, 2008, SECL assigned and transferred its rights and obligations under the Purchase Agreement to Lifestyle at Laurel Canyon, LLC. The provisions of the Purchase Agreement are binding upon Lifestyle, and Lifestyle assumes all the obligations of SECL under the Purchase Agreement. LAS Cherokee County's transfer of the Assets to Lifestyle will not result in (i) Lifestyle having any liability for any claim against the Debtor or against an insider of the Debtor or (ii) having any liability to the Debtor. A full-text copy of the Sale Order is available for free at: http://bankrupt.com/misc/LAS_LaurelCanyonSaleOrder.pdf About Levitt and Sons Headquartered in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors have filed a Chapter 11 joint plan of liquidation. (Levitt and Sons Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). LEVITT AND SONS: Gets Plan Support from Committees; BofA Balks -------------------------------------------------------------- The unsecured creditors committee appointed in Levitt and Sons LLC's Chapter 11 cases delivered to the U.S. Bankruptcy Court for the Southern District of Florida a copy of its solicitation letter encouraging all unsecured creditors to vote for and accept the Second Amended Plan proposed by Levitt. A full-text copy of the Committee Solicitation Letter is available for free at: http://bankrupt.com/misc/LAS_CC_SolicitationLetter_2ndAmendedPlan. pdf The Home Purchase Deposit Creditors Deposit Holders Committee also recently filed a copy of its solicitation letter urging Deposit Holders to vote for and accept the Second Amended Plan, a full-text copy of which is available at no charge at: http://bankrupt.com/misc/LAS_DC_SolicitationLetter_2ndAmendedPlan. pdf A full-text copy of the proposed cover letter for the Solicitation Package is available for free at: http://bankrupt.com/misc/LAS_CoverLetterSolicitationPkg.pdf A hearing to consider approval of the disclosure statement to the Second Amended Plan -- required before soliciting votes on the Plan -- was scheduled to convene on December 10, 2008. No order has been issued as of presstime. Wachovia, BofA's Objection Bank of America, N.A., joins in Wachovia's objections to the Plan Proponents' motion to approve the Second Disclosure Statement and their proposed voting procedures. On behalf of Wachovia Bank, National Association, Robert N. Gilbert, Esq., at Carlton Fields, P.A., in West Palm Beach, Florida, points out that under the voting process proposed by the Plan Proponents does not provide adequate notice to creditors that their claims may not be allowed for voting purposes. Also, the timing of the Voting Deadline may result in creditors trying to get an order allowing its claim out of the Court over the holidays or face having its claim disallowed for voting purposes, he adds. The Court should require that all objections to claims, for voting purposes, be filed at least 20 days before the Plan confirmation hearing, Mr. Gilbert contends, on Wachovia's behalf. The deadline for a Resolution Event should be eliminated in its entirety, he argues. Among other things, Wachovia proposes that: (a) The procedures order should provide that creditors will have until one business day before the Voting Deadline to resolve objection to its claim. If no agreement is reached at least one business day before the Voting Deadline or no order is entered by the Court resolving the objection to the claim at least one business day before the Voting Deadline, then the claimant should have its claim allowed for voting purposes. Any objection to the claim that is not resolved at least one business day before the Voting Deadline, and which remains unresolved on the confirmation date, will be resolved at the confirmation hearing where an evidentiary hearing on the claim objection, if material, will be held. (b) The procedures order should provide that any objections to Claims filed within the 20 days before the confirmation date will not affect the validity of the claim for purposes of voting on the Second Amended Plan. (c) The Voting Record Date should be moved to a date at least five business days after the Court approves the Second Amended Disclosure Statement so as to provide creditors with notice of the Voting Record Date. (d) The confirmation hearing should be at least 60 days after the approval of the Second Amended Disclosure Statement to allow parties-in-interest adequate time for discovery on any issues related to confirmation of the Second Amended Plan. (e) The Solicitation Date must be more than 10 business days after the entry of the procedures order. (f) The proposed procedures order must be revised to provide that creditors are allowed to submit votes by facsimile, e-mail or other electronic means, provided that a copy of the Ballot is also mailed to the Voting and Claims Agent. Delivery of the Ballot by electronic means before the Voting Deadline will be sufficient for a claimant's vote on the Second Amended Plan to be counted in the Ballot tabulation. (g) The procedures order must make clear that it is permissible for creditors to vote on claims in different classes differently. In a separate filing, Mr. Gilbert notes that the Second Amended Plan provides that if Wachovia votes against the Plan, all of the rights granted to it under the DIP Loan Agreement are rendered null and void. Controlling law does not allow Wachovia's rights under the Court- approved DIP Loan Agreement to be diminished, and certainly not entirely eliminated as the Second Amended Plan provides, in the event Wachovia casts a vote against the Plan, Mr. Gilbert argues. Wachovia should know well before it casts a vote that a vote against the Second Amended Plan will not cause it to lose the rights previously granted to it by the Court, Mr. Gilbert asserts. About Levitt and Sons Headquartered in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors have filed a Chapter 11 joint plan of liquidation. (Levitt and Sons Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). LEVITT AND SONS: Regency's Auction Protocol for Hartwood Okayed --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida has approved the proposed bidding procedures for the sale by Debtor Regency Hills by Levitt and Sons, LLC, of certain lots in the project called Hartwood Reserve. Debtor Regency Hills by Levitt and Sons, LLC, holds title to certain real property located in Lake County, Florida. On October 20, 2008, Regency Hills, as seller, and Harvest Holdings, LLC, as buyer entered into an agreement for the sale of certain real property, which includes: (1) Hartwood Reserve Phase 1 Lot Nos. 121, 154, 155, 156, 161, and 162, according to the map or plat recorded in Plat Book 54, pages 88 through 98, of the Public Records of Lake County, Florida; and (2) Hartwood Reserve Phase 2 Lot Nos. 73, 74, 189, 190, 296, 299, 301, 306, 307, 308, 309, 311, 313, 314, 315, 316, 321, 322, 323, 324 and 325, according to the map or plat recorded in Plat Book 27, pages 25 through 32, of the Public Records of Lake County, Florida. Harvest Holdings LLC has made a $721,500 bid for the Lots. In the event Harvest Holdings is not determined as the successful bidder and provided it is not in default, Regency Hills is authorized to reimburse Harvest Holdings for the amount of reasonable, actual, and fully reimbursable expenses and break-up fee in the amount of $27,000. The payment will be deemed an administrative expense priority in Regency Hills' estate and will be paid from the closing proceeds from the sale. All bids must be submitted by December 1, 2008, at 5:00 p.m., local Fort Lauderdale, Florida time. The auction of the Property will be held at the offices of Berger Singerman, P.A., located at 350 East Las Olas Boulevard, Suite 1000, in Fort Lauderdale, Florida, on December 3, 2008, commencing at 11:00 a.m. The Court will conduct a final hearing to consider approval of best bid for the Property on December 4. Parties-in-interest have until December 2 to file any sale objections. About Levitt and Sons Headquartered in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors have filed a Chapter 11 joint plan of liquidation. (Levitt and Sons Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). LEVITT AND SONS: Wachovia Wants Plan Exclusivity Terminated ----------------------------------------------------------- Wachovia Bank, National Association, asks the U.S. Bankruptcy Court for the Southern District of Florida Court to terminate the Levitt and Sons LLC and its affiliates' exclusivity period for getting a plan confirmed. Robert N. Gilbert, Esq., at Carlton Fields, P.A., in West Palm Beach, Florida, asserts that: (a) The Debtors' bankruptcy cases were filed more than a year ago; (b) The Court has granted the Debtors four extensions of the exclusivity period in which to get a plan confirmed. The Court's order approving the fourth request expressly noted that it was "without prejudice" to a party to seek to shorten or terminate the extended exclusivity period; (c) As of November 24, 2008, a copy of the Woodbridge Settlement Agreement has not been shown to creditors in general or to Wachovia specifically; (d) Counsel for the Debtors and the Official Committee of Unsecured Creditors state that the Woodbridge Settlement has not been signed and that the proposed Plan and Disclosure Statement accurately reflect the terms of the agreement. Nonetheless, the terms of the Disclosure Statement and the Plan provide that the Woodbridge Settlement Agreement control over the terms of the Plan and Disclosure Statement; (e) The Plan provides that if Wachovia votes against the Plan, the Wachovia Debtors' Chief Administrator Soneet R. Kapila's role in building houses and building and marketing communities is terminated, and all existing contracts are rejected; and (f) Wachovia needs to be able to file its own plan with respect to at least the so-called Wachovia Debtors to preserve the progress being made by Mr. Kapila in building and managing the communities for which Wachovia provides financing. About Levitt and Sons Headquartered in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors have filed a Chapter 11 joint plan of liquidation. (Levitt and Sons Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). LEXINGTON PRECISION: Explains Terms of Reorganization Plan ---------------------------------------------------------- Lexington Precision Corporation and Lexington Rubber Group Inc. delivered to the United States Bankruptcy Court for the Southern District of New York a disclosure statement dated Dec. 8, 2008, explaining a second joint amended Chapter 11 plan of reorganization. Overview of the Plan The plan provides a repayment program for the Debtors' suppliers and other general unsecured creditors, while achieving to reduce in the Debtors' consolidated indebtedness by conversion of LPC's senior subordinated notes, junior subordinated notes and series B preferred stock into equity securities of LPC at values based upon the valuation of the Debtors, which is prepared by their financial advisor, W.Y. Campbell & Company. Under the plan, holders of LPC's senior subordinated notes will receive shares of series C preferred stock while holders of LPC's junior subordinated note and series B preferred stock will receive newly-issued shares of LPC common stock. The series C preferred stock was designed to allow the holders to participate fully in the Chapter 11 cases, while retaining their priority position relative to the classes junior to them in the capital structure of LPC. However, in the event that the aggregate value of the equity of the Debtors increases at a rate of less than 6% per annum or if it declines, after the plan's effective date, the 6% annual accretion to the liquidation preference of the series C preferred stock will erode the value of the LPC common stock that the holders would receive under the plan. The plan classifies interests against and claims in the Debtors in 19 classes. The classification of treatment of interests and claims are: Treatment of Interests and Claims Class Type of Class Treatment ----- ------------- --------- 1 other priority claims unimpaired against LPC 2(a) CapitalSource secured unimpaired claims against LPC 2(b) CSE secured claims unimpaired against LPC 3 secured tax claims unimpaired against LPC 4 other secured claim unimpaired against LPC 5 senior subordinated impaired note claims 6 junior subordinated impaired note claims 7 general unsecured impaired claims against LPC 8 convenience claims unimpaired against LPC 9 asbestos-related claims impaired 10 series B preferred impaired stock 11 LPC common stock impaired interests 12 other equity interests unimpaired in LPC 13 other priority claims unimpaired against LRGI 14(a) CapitalSource secured unimpaired claims against LRGI 14(b) CSE secured claims unimpaired against LRGI 15 secured tax claims unimpaired against LRGI 16 other secured claims unimpaired against LRGI 17 general unsecured impaired claims against LRGI 18 convenience claims unimpaired against LRGI 19 interests in LRGI unimpaired According to the plan, among other things, the Debtors' unsecured creditors are expected to receive: i) cash in the amount of 10% of its allowed general unsecured claims against the Debtors as soon as reasonably practicable after (a) the plan's effective date and (b) the date the claims becomes allowed; and ii) nine equal cash payments, each in an amount equal to 10.75% of its allowed general unsecured claims against the Debtors, payable quarterly, commencing three months after the plan's effective date or, if later, the date claim is allowed The Debtors' common stock interests and other equity interests will be unaltered under the plan. The Debtors are now in talks with lenders of the DIP loan regarding an arrangement under which an amount equal to the principal amount of the DIP will be reinvested in the reorganized Debtors in the form of a second-lien loan junior to the new secured credit facility. The terms under discussion are: a) a maturity date three months after the expiration date of the new working capital facility; b) an interest rate of 700 basis points above the 30-day LIBOR; and c) the issuance of five-year warrants permitting the lenders to purchase an amount of LPC common stock equal in value to the amount of the investor loan. A full-text copy of the Debtors' disclosure statement is available for free at: http://ResearchArchives.com/t/s?3620 A full-text copy of the Debtors' second amended joint Chapter 11 plan of reorganization is available for free at http://ResearchArchives.com/t/s?3621 About Lexington Precision Headquartered in New York, Lexington Precision Corp. -- http://www.lexingtonprecision.com/-- manufactures tight- tolerance rubber and metal components for use in medical, automotive, and industrial applications. As of Feb. 29, 2008, the companies employed about 651 regular and 22 temporary personnel. The company and its affiliate, Lexington Rubber Group Inc., filed for Chapter 11 protection on April 1, 2008 (Bankr. S.D.N.Y. Lead Case No.08-11153). Christopher J. Marcus, Esq., and Victoria Vron, Esq., at Weil, Gotshal & Manges, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Systems - Bankruptcy Solutions LLC as claims agent. The U.S. Trustee for Region 2 appointed six creditors to serve on an Official Committee of Unsecured Creditors. Paul N. Silverstein, Esq., and Jonathan Levine, Esq., reresents the Committee as counsel. When the Debtors filed for protection from their creditors, they listed total assets of $52,730,000 and total debts of $88,705,000. LEXINGTON PRECISION: Files Second Amended Plan of Reorganization ---------------------------------------------------------------- Lexington Precision Corp. and Lexington Rubber Group Inc. filed with the U.S. Bankruptcy Court for the Southern District of New York on Dec. 8, 2008, their Second Amended Joint Plan of Reorganization and proposed Disclosure Statement explaining their Second Amended Joint Plan of Reorganization. Pursuant to the Second Amended Plan, LPC's Senior Subordinated Notes, Junior Subordinated Note, and Series B Preferred Stock will be converted into equity securities of LPC at values based upon the valuation of the Debtors prepared by the Debtor's financial advisor, W.Y. Campbell & Company. The Debtors believe that the significant reduction in their consolidated indebtedness as a result of the conversion and the substantial incremental business after emergence from Chapter 11 will result to the increase in the value of the equity securities that will be issued pursuant to the Second Amended Plan. The Second Amended Plan does not classify all Claims and Interests. Unclassified Claims and Interests Pursuant to the Second Amended Plan, all Allowed Administrative Expense Claims and DIP Loan Claims will be paid 100%, in Cash. Each holder of an Allowed Priority Tax Claim, which is any Claim of a governmental unit entitled to priority in payment as specified in Sec. 502(i) and 507(a)(8) of the Bankruptcy Code, shall receive, at the Debtor's or the Reorganized Debtors' option, (a) Cash in the amount of its Allowed Priority Tax Claim; (b) equal semi-annual Cash payments in the aggregate amount of its Allowed Priority Tax Claim, with interest, over an 18 month period (but in no event exceeding 5 years after the Commencement Date); or (c) such other treatment as shall be determined by the Bankruptcy Court to provide the holder of such Allowed priority Tax Claim deferred Cash payments having a value, as of the Effective Date, equal to such Allowed Priority Tax Claim. Classification and Treatment of Claims and Interests The Second Amended Plan provides for 19 classes of Claims and Interests. Classes 1 through 12 are comprised of Claims against or Interests in Lexington Precision Corp., and Classes 13 through 19 are comprised of Claims or Interests in Lexington Rubber Group Inc. Entitled to Class Designation Status Vote? ----- ----------- ------ ----------- Lexington Precision Corp. 1 Other Priority Claims Unimpaired Deemed to Accept 2(a) CapitalSource Secured Unimpaired Deemed to Accept Claims 2(b) CSE Secured Claims Unimpaired Deemed to Accept 3 Secured Tax Claims Unimpaired Deemed to Accept 4 Other Secured Claims Unimpaired Deemed to Accept 5 Senior Subordinated Impaired Yes Note Claims 6 Junior Subordinated Impaired Yes Note Claims 7 General Unsecured Impaired Yes Claims 8 Convenience Claims Unimpaired Deemed to Accept 9 Asbestors-Related Impaired Yes Claims 10 Series B Preferred Impaired Yes Stock Interests 11 LPC Common Stock Impaired Yes Interests 12 Other Equity Interests Unimpaired Deemed to Accept Lexington Rubber Group Inc. 13 Other Priority Claims Unimpaired Deemed to Accept 14(a) CapitalSource Secured Unimpaired Deemed to Accept Claims 14(b) CSE Secured Claims Unimpaired Deemed to Accept 15 Secured Tax Claims Unimpaired Deemed to Accept 16 Other Secured Claims Unimpaired Deemed to Accept 17 General Unsecured Impaired Yes Claims 18 Convenience Claims Unimpaired Deemed to Accept 19 Interests in LRGI Unimpaired Deemed to Accept Class 1 Claims are Claims against LPC of a type identified in Sec. 507(a) of the Bankrupcy Code as being entitled to priority in payment (other than Administrative Expense Claims and Priority Tax Claims. Class 2(a) Claims are all Claims against LPC arising under the Prepetition Credit Agreement and all Claims of CapitalSource for adequate protection arising under the Final Cash Collateral Order. Class 2(b) Claims are all Claims against LPC arising under Prepetition Loan Agreement and all Claims of CSE for adequate protection under the Final Cash Collateral Order. Class 1, Class 2(a) and Class 2(b) Claims shall receive Cash in the amount of their Allowed Claims against LPC. Because these Claims are not impaired pursuant to the Second Amended Plan, holders thereof are consclusively presumed to have accepted the Plan and are not entitled to vote. Each holder of an Allowed Secured Tax Claim against LPC under Class 3 shall receive, at the Debtors' election, either: (a) Cash; (b) equal semi-annual Cash payments, with interest, over an 18 month period (but in no event exceeding 5 years after the Commencement Date); or (c) such other treatment as shall be determined by the Bankruptcy Court to provide the holder of such Allowed Secured Tax Claim deferred Cash payments having a value, as of the Effective Date, equal to such Allowed Secured Tax Claim against LPC. Because Class 3 Claims are not impaired pursuant to the Plan, holders of Secured Tax Claims against LPC are conclusively presumed to have accepted the Plan and are not entitled to vote. Class 4 Claims are all Secured Claims against LPC other than CapitalSource Secured Claims, CSE Secured Claims, and Secured Tax Claims. At the option of LPC or Reorganized LPC, the Debtors may (i) reinstate any Other Secured Claim against LPC or (ii) distribute to holders (w) Cash in the amount of such Claim, (x) the sale or disposition of proceeds of the Collateral securing such Claim, including any interest, (y) the Collateral securing such Claim and any interest on such Claim, or (z) such other distribution as necessary to satisfy the requirements of Sec. 1124 of the Bankruptcy Code. Because Class 4 Claims are not impaired pursuant to the Second Amended Plan, holders are conclusively presumend to have accepted the Plan. Class 5 Claims are all Claims against LPC arising under the Senior Subordinated Notes issued pursuant to that certain Indenture, dated Dec. 8, 2008, between Wilmingto Trust Company, as Indenture Trustee, and LC, as issuer. Each holder of an Allowed Senior Subordinated Note Claim shall receive a number of shares of Series C Preferred Stock equal to the quotient of (a) such holder's Allowed Senior Subordinated Note Claim against LPC divided by (b) the Equity Per Share Value. Because Class 5 Claims are impaired pursuant to the Plan, holders are entitled to vote to accept or reject the Plan. Class 6 Claims are all Claims against LPC arising under the Junior Subordinated Note issued to Michael A. Lubin on Dec. 13, 2008. The holder of the Allowed Junior Subordinated Note Claims shall receive a number of shares of LC Common Stock equal to the quotient of (a) the aggregate amount of such Claim divided by (b) the Equity Value Per Share. Because Class 6 Claims are impaired pursuant to the Plan, the holder is entitled to vote to accept or reject the Plan. Each holder of an Allowed General Unsecured Claim against LPC under Class 7 shall receive (i) Cash in the amount of 10% of its Allowed General Unsecured Claim and (ii) 9 equal Cash payments, each in an amount equal to 10.75% of its Allowed General Unsecured Claim against LPC, payable quarterly. Because Class 7 Claims are impaired pursuant to the Plan, holders are entitled to vote to accept or reject the Plan. Class 8 Claims comprise all Unsecured Claims against LPC that are (i) Allowed in the amount of $2,000 or less or (ii) Allowed in a larger amount but reduced to $2,000 by the holder of such claim. Each holder of an Allowed Convenience Claim against LC shall receive Cash in the amount of its Allowed Convenience Claim against LPC. Because Class 8 Claims are not impaired pursuant to the Plan, holders of Convenience Claims against LPC are conclusively presumed to have accepted the Plan and are not entitled to vote to accept or reject the Plan. Class 9 Claims are any Asbestos-Related Claims, including Claims arising out of epnding litigation against LPC before the Court of Common Pleas in Cuyahoga County, Ohio. After the Effective Date, each Asbestos-Related Claim shall be adjudicated in the forum in which such Claim had been pending prior to the Commencement Date; provided, however, that any claimant who has filed an Asbestos- Related Claim, but has not commenced a proceeding prior to the Commencement Date, shall promptly as possible after the Effective Date commence a proceeding in a court of competent jurisdiction other than the Bankruptcy Court. To the extent that the proceeds of the Asbestos Insurance Policies are sufficient to cover the recovery on any Asbestos-Related Claim as determined by a final and non-appealable order or judgment of a court of competent jurisdiction (the "Adjudication Amount"), the holders of such Asbestos-Related Claims shall be permanently and forever stayed, restrained, and enjoined from taking any action to recover payment with respect to any Asbestos-Related claim against the Debtors or the Reorganized Debtors. To the extent the proceeds of the Asbestos Insurance Policies are not sufficient to cover the entire Adjudication Amount for any specific Asbestos-Related Claim, the Reorganized Debtors shall pay in Cash as promptly as possible the difference between such Adjudication Amount and the proceeds of the Asbestos Insurance Policies; provided, however, that if the Insurance Proceeds Deficiency exceeds $2,000, the holder of such Asbestos-Related Claim shall receive (i) Cash in the amount of 25% of such Insurance Proceeds Deficiency , and (ii) three equal Cash payments, each in an amount equal to 26.5% of such Insurance proceeds Deficiency, payable six months, twelve months and eighteen months after the date of determination of the Adjudicated Amount of such Asbestos Related Claim. Class 10 Interests are Interests in LPC arising from issued and outstanding shars of Precision $8 Cumulative Convertible Preferred Stock, Series B. On the Effective Date, the Series B Preferred Stock Interests shall be cancelled and each hodler of a Series B Preferred Stock Interest shall receive a number of shares of LPC Common Stock equal to the quotient of (a) the amount of such holder's Series B Preferred Stock Interest divided by (b) the Equity Value Per Share. Because Class 10 interests are impaired pursuant to the Plan, holders are entitled to vote to accept or reject the Plan. Class 11 LPC Common Stock Interests are Interests of any holder of LPC Common Stock. Although the LPC Common Stock Interests will be unaltered, the increase in the number of authorized shares of LPC Common Stock pursuant to the Plan will dilute the LPC Common Stock Interests. Because Class 11 Equity Interests are impaired pursuant to the Plan, holders of LPC Common Stock Interests are entitled to vote to accept or reject the Plan. Class 12 Other Equity Interests are Interests of any holder of an equity security of any of the Debtors represented by any instrument evidencing an ownership interest in any of the Debtors, whether or not transferable, or any option, warrant, or right, contractual or otherwise, to acquire any such interest, including the LPC Warrants, but excluding the LPC Common Stock Interests and the Series B Preferred Stock Interests. All Other Equity Interests will be unaltered and deemed to accept the Plan. Class 13 Claims are Claims against LRGI of a type identified in Sec. 507(a) of the Bankrupcy Code as entitled to priority in payment (other than Administrative Expense Claims and Priority Tax Claims. Class 14(a) Claims are all Claims against LRGI arising under the Prepetition Credit Agreement and all Claims of CapitalSource for adequate protection arising under the Final Cash Collateral Order. Class 14(b) Claims are all Claims against LRGI arising under Prepetition Loan Agreement and all Claims of CSE for adequate protection under the Final Cash Collateral Order. Class 13, Class 14(a) and Class 14(b) Claims shall receive Cash in the amount of their Allowed Claims against LRGI. Because these Claims are not impaired pursuant to the Second Amended Plan, holders thereof are consclusively presumed to have accepted the Plan and are not entitled to vote. Each holder of an Allowed Secured Tax Claim against LRGI under Class 15 shall receive, at the Debtors' election, either: (a) Cash; (b) equal semi-annual Cash payments, with interest, over an 18 month period (but in no event exceeding 5 years after the Commencement Date); or (c) such other treatment as shall be determined by the Bankruptcy Court to provide the holder of such Allowed Secured Tax Claim deferred Cash payments having a value, as of the Effective Date, equal to such Allowed Secured Tax Claim against LRGI. Because Class 15 Claims are not impaired pursuant to the Plan, holders of Secured Tax Claims against LPC are conclusively presumed to have accepted the Plan and are not entitled to vote. Class 16 Claims are all Secured Claims against LRGI other than CapitalSource Secured Claims, CSE Secured Claims, and Secured Tax Claims. At the option of LRGI or Reorganized LRGI, the Debtors may (i) reinstate any Other Secured Claim against LRGI or (ii) distribute to holders (w) Cash in the amount of such Claim, (x) the sale or disposition of proceeds of the Collateral securing such Claim, including any interest, (y) the Collateral securing such Claim and any interest on such Claim, or (z) such other distribution as necessary to satisfy the requirements of Sec. 1124 of the Bankruptcy Code. Because Class 15 Claims are not impaired pursuant to the Second Amended Plan, holders are conclusively presumend to have accepted the Plan. Each holder of an Allowed General Unsecured Claim against LRGI under Class 17 shall receive (i) Cash in the amount of 10% of its Allowed General Unsecured Claim and (ii) 9 equal Cash payments, each in an amount equal to 10.75% of its Allowed General Unsecured Claim against LRGI, payable quarterly. Because Class 17 Claims are impaired pursuant to the Plan, holders are entitled to vote to accept or reject the Plan. Class 18 Claims comprise all Unsecured Claims against LRGI that are (i) Allowed in the amount of $2,000 or less or (ii) Allowed in a larger amount but reduced to $2,000 by the holder of such claim. Each holder of an Allowed Convenience Claim against LRGI shall receive Cash in the amount of its Allowed Convenience Claim against LRGI. Because Class 18 Claims are not impaired pursuant to the Plan, holders of Convenience Claims against LRGI are conclusively presumed to have accepted the Plan and are not entitled to vote to accept or reject the Plan. Class 19 Equity Interests are all Equity Interests are all Interests in LRGI, all of which are owned by LPC. All the Interests in LRGI shall be unaltered. Because Class 19 Equity Interests are not impaired pursuant to the Plan, the holder of Interests in LRGI is conclusively presumed to accept the Plan and is not entitled to vote or reject the Plan. A full-text copy of the Debtors' Second Amended Joint Plan of Reorganization is available for free at: http://researcharchives.com/t/s?361b A full-text copy of the Debtors' Disclosure Statement explaining their Second Amended Joint Plan of Reorganization is available for free at: http://researcharchives.com/t/s?361c About Lexington Precision Headquartered in New York, Lexington Precision Corp. -- http://www.lexingtonprecision.com/-- manufactures tight- tolerance rubber and metal components for use in medical, automotive, and industrial applications. As of Feb. 29, 2008, the companies employed about 651 regular and 22 temporary personnel. The company and its affiliate, Lexington Rubber Group Inc., filed for Chapter 11 protection on April 1, 2008 (Bankr. S.D.N.Y. Lead Case No.08-11153). Christopher J. Marcus, Esq., and Victoria Vron, Esq., at Weil, Gotshal & Manges, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Systems - Bankruptcy Solutions LLC as claims agent. The U.S. Trustee for Region 2 appointed six creditors to serve on an Official Committee of Unsecured Creditors. Paul N. Silverstein, Esq., and Jonathan Levine, Esq., at Andrews Kurth LLP, represent the Committee as counsel. When the Debtors filed for protection from their creditors, they listed total assets of $52,730,000 and total debts of $88,705,000. LIBERTY MEDIA: S&P Affirms 'BB+' Ratings on 4 Certificates ---------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB+' ratings on four Liberty Media Corp.-related transactions and removed the ratings from CreditWatch, where they were placed with negative implications on Sept. 15, 2008. The rating actions reflect the Dec. 10, 2008, affirmation of the 'BB+' corporate credit and senior unsecured debt ratings on Liberty Media Corp. and their removal from CreditWatch with negative implications. PreferredPLUS Trust Series LMG-1, PPLUS Trust Series LMG-3, and PPLUS Trust Series LMG-4 are pass-through transactions, and the ratings on these certificates are based solely on the 'BB+' rating assigned to the underlying securities, the 8.25% senior unsecured debentures due Feb. 1, 2030, issued by Liberty Media Corp. PreferredPLUS Trust Series LMG-2 is also a pass-through transaction, and the rating on the certificate is based solely on the 'BB+' rating assigned to the underlying securities, the 8.5% senior unsecured notes due July 15, 2029, issued by Liberty Media Corp. Ratings Affirmed and Removed from Creditwatch Negative PreferredPLUS Trust Series LMG-1 $126 million preferred plus trust certificates Rating ------ Class To From ----- -- ---- Certs BB+ BB+/Watch Neg PreferredPLUS Trust Series LMG-2 $31 million trust certificates Rating ------ Class To From ----- -- ---- Certs BB+ BB+/Watch Neg PPLUS Trust Series LMG-3 $30 million certificates Rating ------ Class To From ----- -- ---- A BB+ BB+/Watch Neg B BB+ BB+/Watch Neg PPLUS Trust Series LMG-4 $35 million PPLUS trust certificates Rating ------ Class To From ----- -- ---- A BB+ BB+/Watch Neg B BB+ BB+/Watch Neg MECACHROME INTERNATIONAL: Obtains Court Protection to Restructure ----------------------------------------------------------------- Mecachrome International Inc. has obtained court protection under the Companies' Creditor Arrangement Act in Canada, and that its French subsidiaries have obtained similar protection under the safeguard procedure in France. These filings were made in the context of the Board's ongoing review of Mecachrome's strategic alternatives to improve Mecachrome's liquidity and financial position and reduce its financing costs. In addition, Mecachrome is in advanced discussions with potential lenders in order to conclude a secured debtor-in-possession financing to support it during the restructuring. "Our goal is to allow Mecachrome to continue to operate as a going concern for the benefit of all those affected, including our many loyal employees, customers and suppliers. We believe that the steps we are taking today, combined with the financing we are in the process of finalizing, will provide us with the ability to protect the value of the business for our stakeholders" said Mr. Christian Jacqmin, Mecachrome's president and CEO. Mr. Jacqmin added: "[Fri] ay's filings are the result of industry-wide challenges in our business segments, combined with Mecachrome's leverage and its inability to raise capital in the current market environment. The steps we initiated today will allow Mecachrome to make the necessary changes to ensure its longterm viability." While under CCAA protection, Mecachrome's Board of Directors maintains its usual role and its management remains responsible for the day-to-day operations of Mecachrome. Mecachrome has retained RBC Capital Markets to act as its financial advisor and Ernst & Young Inc. will serve as Court-appointed monitor during the CCAA process in order to assist Mecachrome throughout the restructuring. While under the CCAA protection, Mecachrome will continue its efforts to recapitalize. Mecachrome was advised today by the Toronto Stock Exchange that it had decided to delist Mecachrome's subordinate voting shares at the close of market on January 9, 2009 for failure to meet the continued listing requirements of the TSX. About Mecachrome International Headquartered in Quebec, Canada, Mecachrome International Inc. (TSX:MCH) -- http://www.mecachrome.com/-- designs, engineers, manufactures and assembles complex precision-engineered components for aircraft and automotive applications, including aerostructural and aircraft engine components, high-end automobile engine components and motor racing engines. The company currently operates 11 state-of-the-art facilities, principally in France and Canada, and employs over 2,000 employees. * * * Troubled Company Reporter said Nov. 20, 2008, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Montreal-based Mecachrome International Inc. to 'D' from 'CC' after the company missed the semi-annual interest payment due Nov. 15, on its 9% EUR200 million senior subordinated notes. At the same time, S&P lowered the issue-level ratings on the senior subordinated notes to 'D' from 'CC' and on the senior secured credit facilities to 'D' from 'CCC-'. The recovery ratings on these debts are unchanged at '4' and '2', respectively. MEDIANEWS GROUP: Moody's Downgrades Ratings; Outlook Negative ------------------------------------------------------------- Moody's Investors Service has downgraded MediaNews Group, Inc.'s Corporate Family rating to Caa3 from B3 and Probability of Default rating to Caa3 from Caa1, reflecting Moody's concern that the downturn of the company advertising sales will be significantly more protracted than previously anticipated, further straining the company's liquidity profile and heightening the probability of a covenant default. Details of the rating action are: -- Corporate family rating - to Caa3 from B3 -- Probability of Default rating - to Caa3 from Caa1 -- Senior secured revolving credit facility due 2009 - to Caa2, LGD3, 32% from B1, LGD2, 18% -- Senior secured term loan A due 2010 - to Caa2, LGD3, 32% from B1, LGD2, 18% -- Senior secured term loan B due 2010 - to Caa2, LGD3, 32% from B1, LGD2, 18% -- Senior secured term loan C due 2013 - to Caa2, LGD3, 32% from B1, LGD2, 18% -- 6.375% senior subordinated global notes due 2014 - to Ca, LGD5, 86% from Caa2, LGD4, 69% -- 6.875% senior subordinated global notes due 2013 - to Ca, LGD5, 86% from Caa2, LGD4, 69% The rating outlook remains negative. The downgrade of MediaNews' CFR reflects continued softening of the company's performance (total sales declined by 16% during the quarter ended September 30, 2008) and a significant weakening in its liquidity profile. The downgrade of the PDR to Caa3 reflects Moody's view that MediaNews faces a heightened risk of near-term default under the financial tests of its recently-amended senior secured credit agreement as well as the refinancing risk posed by the December 2009 maturity of its revolving credit facility. The Caa3 CFR incorporates MediaNews' heavy debt burden, high leverage (calculated by Moody's to exceed 8 times debt to EBITDA at the end of September 2008), and the weak level of debtholder protection indicated by current newspaper valuation multiples. In addition, the rating incorporates the secular pressure facing the newspaper publishing sector and the impact of current recessionary market conditions which have gripped virtually all of MediaNews' geographic markets. The rating is supported by the diversification of MediaNews' geographic and customer base, the reputation of its mastheads, and the continuing support provided by its largest partner, The Hearst Corporation. The continuing negative outlook underscores Moody's concern that a potential restructuring or recapitalization could result in further ratings downgrade. On May 5, 2008, Moody's downgraded MediaNews' Corporate Family rating to B3 and its Probability of Default rating to Caa1. Headquartered in Denver, Colorado, MediaNews Group Inc. is a large newspaper publishing company. For the LTM period ended September 30, 2008, the company reported pro-rata revenues of approximately $1.2 billion. MEDICAL SAVINGS: A.M. Best Cuts Financial Strength Rating to "E" ---------------------------------------------------------------- A.M. Best Co. downgraded on December 3, 2008, the financial strength rating (FSR) to E (Under Regulatory Supervision) from C++ (Marginal) and issuer credit rating (ICR) to "rs" from "b" of Medical Savings Insurance Company (Medical Savings) (Indianapolis, IN). On December 1, 2008, the Indiana Department of Insurance announced it had placed an Order of Rehabilitation against Medical Savings and appointed a receiver for the company. Medical Savings has reported large losses the past three years, which has led to considerable deterioration of its capital and surplus position. As part of the Order of Rehabilitation, existing policyholders of Medical Savings have the opportunity to transfer their coverage, most on a guaranteed coverage basis, to Golden Rule Insurance Company, a subsidiary of UnitedHealth Group, Inc. Golden Rule Insurance Company has an FSR of A (Excellent) and an ICR of "a" and focuses on the individual major medical market. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. MEGA BRANDS: Moody's Lowers Corporate Family Rating to Caa2 ----------------------------------------------------------- Moody's downgraded MEGA Brands, Inc.'s ratings, including lowering the Corporate Family Rating to Caa2 from B2, after the company posted its third quarter 2008 results and following an analysis of the prospects for the remainder of the year. The SGL rating was lowered to SGL-4 from SGL-3. The rating outlook is negative. Moody's said that the downgrade and negative outlook reflect that fact that financial flexibility of the company has deteriorated significantly during 2008 due both to lower than expected sales and high costs, as well as special items. Leverage also increased following the issuance of C$75 million in convertible debentures which Moody's consider to be basket A (or 100% debt). While it was a benefit to liquidity that the company was able to raise new funds in this difficult market, Debt to EBITDA at the end of the quarter jumped to 17.6 times from 5.5 times as of year-end 2007 (per Moody's FM) and operating cash flow was negative in the quarter and on a LTM basis. Because of the difficult economic environment and lack of growth momentum this year, Moody's expect that the fourth quarter will be worse than last year's fourth quarter. Moody's therefore do not expect improvement in leverage and cash flow ratios or overall liquidity for the full year despite the usual importance of cash flows in the fourth quarter. Moody's expects full year results to be significantly weaker than a year ago, and weaker than the 3rd quarter LTM, continuing a steady downward trend. Furthermore, the prospects for 2009 are grim, despite the likelihood of some expense savings next year following a plant closing and lower developmental expenses following this year's launch of MAGNEXT as well as lower input costs given the recent downward trend in commodity prices. The SGL rating was lowered to SGL-4 from SGL-3 reflecting weak liquidity. The $100 million revolver is almost fully utilized and Moody's do not expect cash balances to be much higher than the $40 million at the end of 3rd quarter. Moody's believe the company will be challenged to cover its pre-holiday season inventory build needs in 2009. Thanks to a waiver of the financial ratio covenants (the leverage covenant and the fixed charge coverage covenant were both waived until July 2010) the company is in compliance with its only remaining minimum EBITDA covenant as of third quarter with $46.2 million versus a $15 million requirement. The company expects to remain in compliance with this covenant throughout 2009 but the cushion may be very tight especially as the minimum steps up to $40 million during the year, and there is little margin for error. A successful sale of the stationery and activities businesses could improve credit metrics, (depending on the proceeds) and could be a positive rating development. Moody's rating does not assume that this sale will occur, especially since it was expected for the middle of 2008 and has still not materialized, and asset valuations are falling globally. The company faces challenges that include risks specific to the toy industry including, changing play patterns of children, fashion risk of toys, extreme seasonality, and weak retailer leverage with sales concentrated with a few large customers. Other key concerns include: Questions around consumer acceptance of the new generation of MAGNETIX products after the damage suffered over the last years due to product safety issues and the resulting recalls and lawsuits. Ongoing litigation, and issues around the company's self insurance for product liability for MAGNETIX products manufactured before May 1, 2006 and for incidents occurring after December 1, 2006 The resolution of and/or likely timing and payout of the disputed Rose Art earn-out payment. These ratings were downgraded: MEGA Brands, Inc. -- Corporate Family Rating to Caa2 from B2; -- Probability of Default to Caa2 from B3; -- $120 million 5-year revolving credit facility maturing July 2010 to Caa1 (LGD 3, 35%) from B1 (LGD 2, 26%); -- $40 million, 5-year term loan A facility to Caa1 (LGD-3, 35%) from B1 (LGD 2, 26%) MEGA Brands Finco -- $260 million 7-year term loan B facility to Caa1 (LGD 3, 35%) from B1 (LGD 2, 26%) The last rating action was taken on April 9, 2008 when the rating was lowered to B2 from B1 and left on review for further possible downgrade. MEGA Brands manufactures and markets a broad line of toys and stationery and activities products. It is based in Montreal, Canada and had sales of $525 million in 2007. Sales have slipped to $475 million through September 2008 on an LTM basis. MILLENIUM INORGANIC: S&P Raises Corporate Credit Ratings to 'B-' ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its corporate credit rating on Millennium Inorganic Chemicals to 'B-' from 'CCC+'. The outlook is stable. S&P also raised the rating on the company's $650 million first- lien senior secured credit facility to 'B' (one notch above the corporate credit rating) from 'B-' and kept the recovery rating at '2', indicating S&P's expectation for substantial (70%-90%) recovery in the event of default. The rating on the company's $230 million second-lien term loan due in 2014 was raised to 'CCC' (two notches below the corporate credit rating) from 'CCC-', with a recovery rating of '6', indicating the expectation of negligible (0%-10%) recovery in the event of default. "The upgrade reflects the recent amendment and expected completion of a proposed capital infusion, which would alleviate covenant concerns and bolster short-term liquidity," said S&P's credit analyst Henry Fukuchi. As part of the amendment, Millennium's parent, National Titanium Dioxide Co. Ltd., will inject $200 million into the business in coming weeks of which $50 million will be applied toward immediate debt reduction on the existing first-lien term loan. This will reduce the loan to approximately $495 million from $545 million. S&P does not expect any reduction in the revolving credit facility or the second-lien loan as part of this transaction. Of the remaining $150 million, $75 million will fund a separate escrow account for future Le Havre shutdown costs through the first half of 2009 and $75 million will remain on the balance sheet for liquidity and general purposes. The amendment relaxes upcoming total leverage and interest coverage levels, reducing concerns over financial covenant compliance in the near term, and allows the parent to provide up to $50 million annually for general corporate purposes without triggering mandatory repayment of existing debt. The ratings on Millennium Inorganic Chemicals reflect the company's limited business diversity, exposure to cyclical end markets and commodity product cycles, mediocre operating margins, and weak cash flow protection measures. Mitigating factors include the company's good geographic diversity, solid position in TiO2 markets, and ownership by Cristal, an industry player with experience operating a profitable TiO2 plant in the Middle East. Cristal acquired Millennium in May 2007 from Lyondell Chemical Co. MORGAN STANLEY: S&P Ups Ratings on 2008-7 Notes to AAA From BB -------------------------------------------------------------- Standard & Poor's Ratings Services raised its rating on Morgan Stanley ACES SPC's notes series 2008-7 to 'AAA' from 'BB' and removed the rating from CreditWatch with negative implications, where it was placed Nov. 26, 2008. The rating action reflects a transaction restructuring in which the credit default swap's attachment point was increased. Morgan Stanley ACES is a multi-use trust and its series 2008-7 segregated portfolio is a single-tranche synthetic corporate investment-grade collateralized debt obligation. MORGAN STANLEY: Senior Banker Robert Scully Will Leave Firm ----------------------------------------------------------- Morgan Stanley said on Friday that Robert Scully will resign from the company as its senior banker, Aaron Lucchetti at The Wall Street Journal reports. Citing people familiar with the matter, WSJ relates that Mr. Scully will leave by year-end. According to WSJ, Mr. Scully has worked at Morgan Stanley since 1996. He led the team that advised the U.S. government's efforts to rescue Fannie Mae, Freddie Mac, and American International Group Inc., says WSJ. WSJ states that Mr. Scully served under Morgan Stanley Chairperson and CEO John Mack as one of the company's two co-presidents from 2006 to 2007, supervising the firm's asset-management and credit- card divisions and working to lessen internal problems, the result of the 1997 Morgan Stanley - Dean Witter Discover merger. Last year, Mr. Scully became senior banker working in Morgan Stanley's newly created office of the chairperson, WSJ relates. About Morgan Stanley New York-based Morgan Stanley -- http://www.morganstanley.com-- is a global financial services firm that, through its subsidiaries and affiliates, provides its products and services to a group of clients and customers, including corporations, governments, financial institutions and individuals. Morgan Stanley's business segments include Institutional Securities, Global Wealth Management Group and Asset Management. The company conducts its business from New York City, its regional offices and branches throughout the United States and its principal offices in London, Tokyo, Hong Kong and other world financial centers. As reported in the Troubled Company Reporter on Aug. 26, 2008, Moody's Investors Service downgraded the ratings of 320 tranches from 25 transactions issued by Morgan Stanley, including its: -- Cl. M-2, downgraded to Caa2 from B2, -- Cl. M-3, Downgraded to Ca from B2, -- Cl. M-4, Downgraded to Ca from B3, -- Cl. M-5, Downgraded to Ca from B3, -- Cl. B-3, Downgraded to C from Ca, and -- Cl. B-4, Downgraded to C from Ca. N. CAROLINA MUTUAL: A.M. Best Holds "B" Financial Strength Rating ----------------------------------------------------------------- A.M. Best Co. affirmed on December 3, 2008, the financial strength rating (FSR) of B (Fair) of North Carolina Mutual Life Insurance Company (North Carolina Mutual) (Durham, NC). Concurrently, A.M. Best downgraded the issuer credit ratings (ICR) from "bb+" to "bb". The outlook for all ratings has been revised to negative from stable. The negative outlook and downgrading of the ICR reflects North Carolina Mutual's general decline in capital and surplus over the last several years, which was driven by operating losses primarily due to new business strain, and more recently by realized investment losses. Given the uncertainty of the current economic environment and the potential for additional realized losses, the company's capital position may be further weakened. The affirmation of the FSR reflects North Carolina Mutual's risk- adjusted capital position, which although relatively low, is considered adequate for its rating level, and expense reductions that should translate into improved future operating performance. In addition, the FSR is supported by recent initiatives to improve North Carolina Mutual's earnings and capitalization, including prudent use of reinsurance, a marketing strategy focused on select core business lines and the company's well established position and reputation in the African-American insurance market. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. NEIMAN MARCUS: S&P Cuts Corp. Credit Rating to 'B+'; Outlook Neg. ----------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its ratings on Dallas-based luxury retailer The Neiman Marcus Group Inc., including the corporate credit rating to 'B+' from 'BB-'. The outlook is negative. "The rating change reflects our belief that the company will be more challenged than previously expected by the current weak economic environment in the U.S. and the turmoil in the financial markets," said S&P's credit analyst Diane Shand. In addition, credit measures will likely deteriorate more than S&P had originally projected as a result of a deepening spending pull-back by consumers. NEWPORT TELEVISION: S&P Cuts Senior Unsecured Debt Rating to 'CCC' ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on Kansas City, Missouri-based Newport Television Holdings LLC and its operating subsidiary, Newport Television LLC. The corporate credit rating was lowered to 'B-' from 'B', and the rating outlook is stable. The issue-level rating on Newport's senior secured debt was also lowered to 'B-' (at the same level as the corporate credit rating) from 'B', and the recovery rating on this debt was revised to '4', indicating S&P's expectation of average (30% to 50%) recovery in the event of a payment default, from '3'. The issue-level rating on the company's senior unsecured debt was lowered to 'CCC' from 'CCC+', and the recovery rating on this debt remains at '6', indicating S&P's expectation of negligible (0% to 10%) recovery in the event of default. "The ratings downgrade reflects our expectation that Newport will be challenged to avoid revenue declines over the coming one to two years, resulting in EBITDA deterioration despite efforts to cut costs," explained S&P's credit analyst Deborah Kinzer. "Furthermore, S&P does not expect the company will be able to reduce its lease-adjusted debt to EBITDA to below 10x in the intermediate term because of declining EBITDA and because of lack of progress in selling assets." The 'B-' rating on Newport reflects the company's very high debt leverage of more than 10x, low EBITDA margin compared with the peer average, negative discretionary cash flow since its leveraged buyout in March 2008, generally weak competitive positions in its TV markets, and TV broadcasting's mature revenue growth prospects. Newport's revenue and geographic diversification across network affiliations and states minimally tempers these factors. Newport owns and operates 50 TV stations, including 17 digital multicast stations, in 22 markets ranging from No. 6 (San Francisco/Oakland/San Jose, California) to No. 203 (Fairbanks, Alaska). The company's station affiliations are fairly evenly distributed among the top four networks. Few of the company's stations have the top revenue rankings in their markets, although ownership of multiple stations in some markets improves the company's overall ranking in some cases. In May 2008, Newport sold five noncore stations and used the proceeds to pay down its term loan. The company wants to divest 11 more noncore stations, but the sale process is taking longer than anticipated, which is delaying Newport's plan to reduce debt. In the third quarter of 2008, EBITDA from continuing operations rose 2.9% year over year, despite a 1.6% decline in revenue, because of cost efficiencies that lowered operating expenses by 6.9%. Lower ad revenue from the automotive category in particular drove the revenue decline, which more than offset the benefit of political ad revenue. The EBITDA margin improved slightly over the same period, to 19.3% from 18.5%, but it remains significantly below the peer average of around 30%. Reported EBITDA coverage of pro forma cash interest was thin, at 0.9x, for the 12 months ended Sept. 30, 2008. EBITDA coverage of total interest expense was lower, at 0.8x. S&P believes that the company will be unable to generate positive discretionary cash flow in the foreseeable future because weak revenues, higher debt-servicing requirements, and capital expenditures for digital investments and technology infrastructure will more than offset the benefit of cost cuts. Lease-adjusted debt to reported EBITDA remains very high, at 14.3x, as of Sept. 30, 2008. Even netting out Newport's full usage of its revolving credit facility, the proceeds of which are being held as cash balances, leverage remains a high 13.0x. NEWSWEEK: Will Lay Off Employees & May & Cut Focus on Print ----------------------------------------------------------- Russel Adams at The Wall Street Journal reports that the Newsweek magazine has told workers that it will lay off some of its staff due to weakening financial position. WSJ relates that Newsweek parent Washington Post Co.'s vice president Ann McDaniel said in a memo sent to workers that about 65 workers will receive a buyout offer, while 10 other employees will be voluntarily laid off. The report says that eligible workers will have 45 days to decide whether to take the offer, and another seven days to change their minds. This would be Newsweek's final buyout, the report states, citing Ms McDaniel. Newsweek, WSJ reports, has recently laid off about 111 workers through the same buyout. The magazine will make additional cuts due to its weakened financial position, WSJ states. According to WSJ, Newsweek is also preparing for an overhaul of the magazine in 2009, which would reduce its 2.6 million circulation. Newsweek, says WSJ, will introduce a new strategy in February 2009, which would include a revamped magazine and Web site. Newsweek, according to the report, is aiming to become a less print-focused publication, and distribute more content online and on mobile devices. WSJ states that Newsweek would significantly cut its rate base-the number of weekly copies it promises advertisers it will deliver. The report says that Newsweek operates in six-month cycles. Newsweek executives said that the magazine is committed to its current circulation guarantee of 2.6 million copies for the first half of 2009, WSJ relates. According to the report, Newsweek could cut anywhere from 500,000 to one million copies by July 1. According to WSJ, the layoffs could reduce Newsweek's global circulation by as many as about a dozen cities. The report says that many of the 65 workers eligible for the buyout offer are located in bureaus in cities from Baghdad to Detroit. Closures are likely for these bureaus, which many are one- or two-person shops that carry real estate costs. WSJ reports that those eligible for the buyout are U.S. citizens working at overseas correspondent posts in Baghdad, Cape Town, Hong Kong, London, Tokyo, Jerusalem, and Paris. WSJ relates that offers were also extended to staffers in Chicago, Detroit, Los Angeles, San Francisco, and Miami. The report states that bureaus in Moscow, Beijing, South Asia, and Washington weren't targeted by the buyouts. The report says that if most of the eligible workers accept the offer, Newsweek's presence would be concentrated in Washington and New York, with a few correspondents who live in places like Boston and Miami. About Newsweek Newsweek is an American weekly newsmagazine published in New York City. It is distributed throughout the United States and internationally. It is the second largest news weekly magazine in the U.S., having trailed Time in circulation and advertising revenue for most of its existence, although both are much larger than the third of America's prominent weeklies, U.S. News & World Report. Newsweek is published in four English language editions and 12 global editions written in the language of the circulation region. NTELOS HOLDINGS: S&P Keeps BB- Corp. Credit Rating; Outlook Pos. ---------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook on Waynesboro, Virginia-based NTELOS Holdings Corp. to positive from stable. S&P affirmed all existing ratings on the company, including the 'BB-' corporate credit rating. NTELOS is an integrated communication services provider serving 427,000 retail wireless subscribers and, in its wireline segment, 91,900 access lines in parts of western Virginia and West Virginia. Debt outstanding at Sept. 30, 2008, totaled about $609 million. "The positive outlook revision recognizes NTELOS' solid operating performance over the past year, which has driven improvement in its financial profile," said S&P's credit analyst Susan Madison. PIERRE FOODS: Emerges from Bankruptcy, Secures $95MM Exit Facility ------------------------------------------------------------------ Pierre Foods Inc. said that it has emerged from Chapter 11 bankruptcy protection. The company said it officially concluded its Chapter 11 restructuring after meeting all statutory requirements for its Plan of Reorganization. In connection with its emergence, the company has named William Toler as chief executive officer of the company effective [Fri]day. Mr. Toler succeeds Norbert Woodhams, who is retiring from the Company. In conjunction with the Plan, the company has also closed its $95 million exit financing facility. "Pierre Foods is emerging from Chapter 11 with a strengthened balance sheet and is well positioned to capitalize on the significant opportunities we see today and in the future," said Mr. Toler. "The entire team is energized and looking forward to continuing our growth as a stronger company. In only five months, the Company has effectively addressed its financial and operational challenges and laid a strong foundation for its future. "The expeditious restructuring of Pierre is a testament to its loyal employees, dedicated customers and vendors and the strong relationship we have with our new owner sponsor, Oaktree Capital Management. I believe everyone at the Company is energized and excited to continue this success as we begin operating outside of Chapter 11," Mr. Toler said. "It is an honor to be given the opportunity to lead Pierre's talented team of employees. We will get started right away and utilize the positive momentum from the emergence from Chapter 11 to keep the company moving in the right direction. While there is still work to be done, I believe Pierre is now a financially stable company and can be a major competitor in the industry. On behalf of everyone at Pierre, I would like to wish Norb the best in his future endeavors," Mr. Toler continued. The company's new board of directors includes: -- Steven Kaplan as chairman of the board; -- William D. Toler as director; and -- Matthew Wilson as director. The company expects to announce the appointment of two new members of the board in the coming weeks. According to the Troubled Company Reporter on Dec. 11, 2008, the United States Bankruptcy Court for the District of Delaware confirmed the Debtor's plan of reorganization. With the Bankruptcy Court's approval of the Plan, funds managed by Oaktree Capital Management L.P., have become the majority owner of Pierre. Oaktree Capital is Pierre's single largest creditor and provider of the company's debtor-in-possession credit facility. The Plan provides for the following: -- a portion of the existing prepetition secured indebtedness will be satisfied in cash; -- conversion of $85 million of existing prepetition secured indebtedness to a new mezzanine facility; -- conversion of the remainder of the existing prepetition secured indebtedness to 100% of the equity of Reorganized Pierre; -- a new exit facility in the amount of $95 million to fund the Company's ongoing operations and pay obligations under the Plan. The Company expects less than $60 million to be drawn at exit; -- the Debtors' Senior Subordinated Notes in the principal amount of $125 million will be cancelled; and -- 12% cash recovery for unsecured creditors including holders of Senior Subordinated Notes. "Pierre Foods is poised to emerge with the renewed ability to operate profitably throughout the continued downturn of the economic cycle and beyond," the company stated. "We are pleased to continue working with Oaktree and appreciate their continued commitment to the Company. Oaktree and its affiliates have extensive experience in alternative investments and a proven track record of success through superior performance. "We are excited about this new sponsorship and believe that Oaktree is the perfect partner to help guide the future of the Company. Additionally, we are grateful for the loyalty of all our dedicated employees, customers and vendors during this restructuring. We look forward to our continuing relationship with these parties who played a critical role in our successful restructuring," the company continued. About Pierre Foods Based in Cincinnati, Ohio, Pierre Foods, Inc. -- http://www.pierrefoods.com-- manufactures and sells ready-to-cook and pre-cook products. The company and and 13 of its affiliates filed for Chapter 11 protection on July 15, 2008 (Bankr. D. Del. Lead Case No. 08-11469). Jonathan S. Henes, Esq., and Lisa G. Laukitis, Esq., at Kirkland & Ellis; and Daniel J. DeFranceschi, Esq., and Paul N. Heath, Esq., at Richards, Layton & Finger P.A., represent the Debtors in their restructuring efforts. The Debtors selected Kurtzman Carson Consultants LLC as their claims agent. The United States Trustee for Region 3 appointed creditors to serve on an Official Committee of Unsecured Creditors. The Committee selected Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and James R. Savin, Esq., at Akin Gump's Washington, D.C. office, as counsel. Oaktree Capital Management, the Debtors' DIP lender and which is serving as plan sponsor, is represented by Van C. Durrer, II, Esq., at Skadden Arps, Slate Meagher & Flom LLP, in Los Angeles, California. Wachovia Bank, N.A., the administrative agent under the Debtors' June 2004 credit agreement, is represented by Gregory Bray, Wsq., and Haig Mark Maghakian, Esq., at Milbank Tweed Hadley McCloy LLP PMA CAPITAL: A.M. Best Downgrades FSR to "C" & ICR to "b" --------------------------------------------------------- A.M. Best Co. downgraded on December 5, 2008, the financial strength rating (FSR) to C++ (Marginal) from B (Fair) and issuer credit rating (ICR) to "b" from "bb" of PMA Capital Insurance Company (PMACIC) (Philadelphia, PA), the run-off operations of PMA Capital Corporation (PMA Capital) (Blue Bell, PA) [NASDAQ: PMACA], following the recent reserve strengthening actions occurring during third quarter 2008. Additionally, the ratings remain under review with negative implications as a result of the announcement earlier this year that PMACIC's parent, PMA Capital, entered into a letter of intent and subsequently signed a stock purchase agreement with a third party to sell PMACIC. The ratings of PMA Capital and PMA Insurance Group (Blue Bell, PA) and its members are unchanged. The downgrading of PMACIC's ratings reflect the significant reduction in its stand-alone capitalization following additional reserve strengthening actions during the first and third quarters of 2008, impacting claims made general liability business and, to a lesser extent, occurrence liability business. Partially offsetting these negative rating factors is PMA Capital's commitment to maintain adequate capitalization to support the run- off operations following the recent reserve strengthening actions. While capitalization remains marginal, A.M. Best expects ongoing financial support from PMA Capital to ensure an orderly run off. The under review status of PMACIC's ratings reflect the planned sale to a third party and uncertainty with the level of commitment of the new parent to sustain operations, as well as the continued execution risk associated with managing the run-off business. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. PRECISION PARTS: Financial & Economic Woes Cue Chapter 11 Filing ---------------------------------------------------------------- Precision Parts International Services Corp. and each of the nine debtor-affiliates filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court in the District of Delaware citing the present global financial and economic crisis. According to the company, both domestic original equipment manufacturers and certain suppliers have faced troubling times in recent years caused by: -- a steady decline in market share by domestic OEMs; -- noncompetitive cost structures as a result of inflated union wages and pension and legacy costs; -- significant increases in raw materials; and -- excess production capacity. The company blamed the deteriorating conditions in the automotive sector. Despite generating sufficient cost savings to offset any price concessions made to customers and reducing cost to mitigate against expected production slowdowns, its operational flexibility has been severely restricted as a result of declining North American OEM production levels and increased raw materials, the company said. The company pointed out that North American OEM market share and overall production levels for both cars and light trucks has decline significantly in recent years. As of 1999, General Motors, Chrysler and Ford have a collective 62% U.S. market share, which fell to about 52% in the first half of 2007, the company related. Sales in the automotive industry in October 2008 were down nearly 32% compared with October 2007. The big three's loss of market share affected the automotive supply chain by decreasing volume production while OEMs continued to pursue aggressive price- down strategies at the same time, the company noted. On the one hand, the company said its revenue through third quarter 2008 declined to $126.2 million from $154.5 million in the same period a year ago. The decline in revenue, the company further said, was caused by (i) decline in domestic automobile production volume; (ii) lower pricing; and (iii) increasing costs. The company said that it filed for bankruptcy in order to facilitate an orderly wind-down of its business. The Chapter 11 filing came after an exhaustive exploration of options for continuing the business including a sale of its operations, the company added. The company related that it has secured a commitment from General Electric Capital Corp. and Comerica Bank for up to $2 million in debtor-in-possession financing to support the wind-down. The company said it will present to the Court several first day motions intends to allow the Debtors to maintain their ongoing business operations and fulfill their duties, including: -- additional time within which to file their schedules and statements of financial affairs; -- authority to continue use of existing cash management system, bank accounts and business forms; -- authority the employ Kurtzman Carson Consultants LLC as claim, noticing and balloting agent; -- authority to pay prepetition premiums necessary to maintain insurance coverage; -- authority to pay certain prepetition wages, salaries and other compensation, employee medical and similar Benefits, and reimbursable employee expenses; -- authority to pay Prepetition claims of shippers, brokers, warehousemen and other lien claimants; -- authority to pay the prepetition claims of certain critical vendors. A hearing is scheduled for on Dec. 15, 2008 at 1:30 p.m., to consider approval of the motions. According to the filing, the company has $184.5 million in secured and unsecured longterm liabilities and $30 million in trade debt in the aggregate trade debt as of its bankruptcy filing. The company's prepetition, long-term debt structure was composed of, among other things: i) a 115.0 million in secured senior term loan, a $19.7 million in secured revolver and $14.0 million in secured junior term loan issued under a senior credit agreement dated as of Sept. 30, 2005, with a syndicate of financial institution led by General Electric Capital Corporation; and ii) a $55.0 million in loan under a subordinated note purchase agreement dated as of Sept. 30, 2005, with Norwest Mezzanine Partners II LP, LEG Partners Debenture SBIC LP and Golub Capital CP Funding LLC. The company said it owes $89.1 million under the prepetition senior credit agreement and $88.5 million under the prepetition mezzanine agreement as of its bankruptcy filing. "[Fri]day's actions are unavoidable," said Joe Lefave, President and Chief Executive Officer. "The current depressed conditions in the domestic auto industry, along with the continued tightening of credit markets created insurmountable hurdles that could not be overcome. "PPI will continue to operate during the wind-down in order to ensure a successful transition for all of our customers and has obtained liquidity to pay suppliers and employees during this process," Mr. Lefave said. "Additionally, the company will be accepting offers for its assets." According to Bloomberg News, the company is at least the 10th auto-parts maker sought Chapter 11 protection from its creditors this year. About Precision Parts Headquartered in Rochester Hills, Michigan, Precision Parts International Services Corp. -- http://www.precisionparts.com-- sell products to major north American automotive and non- automotive original equipment manufacturers and Tier 1 and 2 suppliers. The Debtors operate six manufacturing facilities throughout north America, including a facility in Mexico operated on the Debtors' behalf by Intermex Manufactura de Chihuahua under a shelter and logistics agreement. The company's operations consist of two distinct lines of business: MPI, which performs fineblanking work and conventional metal stamping, as well as a range of value-added finishing operations, and Skill which performs conventional metal stamping, as well as a range of assembly and value-added finishing operations. Four of the Debtors are holding companies that have no employees and are not involved in the Debtors' day-to-day operations: PPI Holdings, Inc.; PPI Sub-Holdings, Inc.; MPI International Holdings, Inc.; and Skill Tool & Die Holdings Corp. PRECISION PARTS: Case Summary & 30 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Precision Parts International Services Corp. 2129 Austin Avenue Rochester Hills, MI 48309 Tel: (248) 742-7232 Fax: (248) 853-5665 Bankruptcy Case No.: 08-13291 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- PPI Holdings, Inc. 08-13289 PPI Sub-Holdings, Inc. 08-13290 MPI International Holdings, Inc. 08-13292 MPI International, Inc. 08-13293 International Fineblanking Corporation 08-13294 Michigan Fineblanking, Inc. 08-13295 Skill Tool & Die Holdings Corp. 08-13296 Skill Tool & Die Corp. 08-13297 Type of Business: The Debtors sell products to major north American automotive and non-automotive original equipment manufacturers and Tier 1 and 2 suppliers. The Debtors operate six manufacturing facilities throughout north America, including a facility in Mexico operated on the Debtors' behalf by Intermex Manufactura de Chihuahua under a shelter and logistics agreement. The Debtors' operations consist of two distinct lines of business: MPI, which performs fineblanking work and conventional metal stamping, as well as a range of value-added finishing operations, and Skill which performs conventional metal stamping, as well as a range of assembly and value-added finishing operations. Four of the Debtors are holding companies that have no employees and are not involved in the Debtors' day-to-day operations: PPI Holdings, Inc.; PPI Sub-Holdings, Inc.; MPI International Holdings, Inc.; and Skill Tool & Die Holdings Corp. See: http://www.precisionparts.com/ Chapter 11 Petition Date: December 12, 2008 Court: District of Delaware Judge: Kevin Gross Debtor's Counsel: David M. Fournier, Esq. Pepper Hamilton LLP Hecules Plaza, Suite 5100 1313 N. Market Street P.O. Box 1709 Tel: (302) 777-6500 Fax: (302) 421-8390 http://www.pepperlaw.com Financial Advisor: Alvarez & Marsal North America LLC Notice, Claims and Balloting Agent: Kurtzman Carson Consultants LLC Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million The petition was signed by chief financial officer Roger Goldbaum. The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Golub Capital bank loan $42,770,053 Attn: Gregory Cashman 551 Madison Ave., 6th Floor New York, NY 10022 Tel: (212) 750-6060 Fax: (212) 750-5505 Norwest Mezzanine Partners bank loan $42,7700,53 II LLP Attn: Carter Balfour 80 S. 8th, Suite 3600 Minneapolis, MN 55402 Tel: (612) 215-1600 Fax: (612) 215-1602 Gestamp North America Inc. trade debt $4,825,7449 Attn: Jim Barry 755 W. Big Beaver Rd. Ste. 1800 Troy, MI 48084 Tel: (248) 743-3404 Fax: (248) 743-3403 Chrysler LLC trade debt $3,259,742 Attn: Robert Nadellie Holly Leese 1000 Chrysler Driver Auburn Hills, Michigan 48326 Tel: (248) 576-5741 Fax: (248) 512-8084 Steel Warehouse Company Inc. trade debt $1,859,493 Attn: Mikre Lerman 2722 W. Tucker Drive South Bend, IN 46624 Tel: (574) 236-5100 Fax: (574) 236-5154 Heidtman Steel Products Inc. trade debt $1,529,970 Attn: John c. Bates 2401 Front St. Toledo, OH 43605 Tel: (419) 691-4646 Fax: (419) 698-1150 Samuel Son & Co. Inc. trade debt $1,061,191 Attn: Mark C. Samuel 2360 Dixie Road Mississuaga, ON, Canada L4Y 1Z7 Tel: (800) 267-2683 Fax: (905) 279-9658 General Motors Corp. trade debt $728,281 Attn: G. Richard Wagoner, Jr. Robert S. Osborne 200 Renaissance Center Detroit, MI 48265 Tel: (313) 556-5000 Fax: (313) 556-5108 Ford Motor Company trade debt $688,446 Attn: Alan Mullaly David G. Leitch 1 American Road Dearborn, MI 48126 Tel: (313) 322-3000 Fax: (313) 845-7512 Machine Concepts Inc. trade debt $542,165 Attn: John Eiting 2167 Sr. 66, PO Box 127 Minster, OH 45865 Tel: (419) 628-3498 Fax: (419) 628-2794 Worthington Steel trade debt $430,287 Independent Steel Company trade debt $370,598 (Inc.) Perkins Products Inc. trade debt $339,573 The Minster Machine Company trade debt $257,037 Benz Oil Inc. trade debt $255,814 Hoosier Custom Plastics trade debt $243,167 New Technology Steel LLC trade debt $242,281 Motion Industries Inc. trade debt $234,150 Blair Strip Steel Company trade debt $213,487 J & B Industrial Specialties trade debt $212,354 Inc. MST Steel Corporation trade debt $199,121 National Material of Mexico trade debt $198,143 Hi-Tech Metal Processing Inc. trade debt $193,666 Spectra-Tech Inc. trade debt $187,815 Ryeco Inc. trade debt $172,957 Amstek Metal trade debt $157,324 Keyker USA Inc. trade debt $156,420 Lap Tech Industries Inc. trade debt $153,907 Benteler Automotive trade debt $148,947 Corporation PRUDENTIAL STRUCTURED: S&P Cuts Ratings on B-1 & B-1L Notes to CC ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class A-2L, B-1L, and B-1 notes issued by Prudential Structured Finance CBO I, a cash flow mezzanine structured finance collateralized debt obligation of subprime residential mortgage- backed securities managed by Prudential Investment Corp. The downgrades reflect factors that have negatively affected the credit enhancement available to support the notes since S&P's last rating actions on Sept. 18, 2007, including a decline in the overall credit quality of the underlying portfolio. S&P will review the results of current cash flow runs generated for Prudential Structured Finance CBO I to determine the level of future defaults the rated classes can withstand under various stressed default timing and interest rate scenarios while still paying all of the interest and principal due on the notes. S&P will compare the results of these cash flow runs with the projected default performance of the performing assets in the collateral pool to determine whether the ratings currently assigned to the notes remain consistent with the credit enhancement available to support them. Ratings Lowered Prudential Structured Finance CBO I Class To From Current balance (million) ----- -- ---- ------------------------- A-2L BB- BBB $11.297 B-1 CC CCC- $4.200 B-1L CC CCC- $8.000 Transaction Information ----------------------- Issuer: Prudential Structured Finance CBO I Collateral manager: Prudential Investment Corporation Underwriter: Bear Stearns Cos. LLC Tranche Last Current Information Action Action* ----------- ------ ------- Date (MM/YYYY) 09/2007 12/2008 Class A-2L notes rating BBB BB- Class A-2L notes bal. (mil. $) 20.00 11.30 Class B-1 notes rating CCC- CC Class B-1 notes bal. (mil. $) 4.20 4.20 Class B-1L notes rating CCC- CC Class B-1L notes bal. (mil. $) 8.00 8.00 Portfolio Benchmarks* Current --------------------- ------- S&P weighted average rating (incl. defaulted) BBB S&P default measure (%) 0.60 S&P variability measure (%) 2.17 S&P correlation measure 1.13 Obligors rated 'BBB-' and above (incl. defaulted) (%) 59.76 Obligors rated 'BB-' and above (incl. defaulted) (%) 67.83 Obligors rated 'B-' and above (incl. defaulted) (%) 67.83 Obligors rated in 'CCC' range (%) 4.30 Obligors rated 'CC', 'SD', or 'D' (%) 27.87 * Data based on the Nov. 15, 2008, report. PTA REINSURANCE: A.M. Best Assigns "B" Financial Strength Rating ---------------------------------------------------------------- A.M. Best Co. has assigned a financial strength rating of B (Fair) and an issuer credit rating of "bb+" to ZEP-RE (PTA Reinsurance Company) (ZEP-RE) (Kenya). The outlook for both ratings is stable. The ratings reflect ZEP-RE's good level of risk-adjusted capitalization, developing business profile and improving risk management. An offsetting factor is its marginal underwriting performance. In A.M. Best's opinion, ZEP-RE's risk-adjusted capitalization is at a good level, following capital increases of USD 7.5 million in 2008 and full earnings retention in 2007. Additionally, ZEP-RE's capital position has benefited from a reduction in credit risk, with a lower level of debtors and improved outward reinsurance securities. A.M. Best believes that ZEP-RE's capital position is expected to remain stable, provided that growth in gross premiums written is controlled to 15% in each of the next two years, with minimum retained earnings of 75% of net profit. In A.M. Best's opinion, ZEP-RE's operating performance has been moderate with a pre tax profit of USD 5.2 million in 2007, mainly arising through investment income. Underwriting performance has been marginal with technical profits of approximately USD 1 million, mainly contributed by its non core life business. In A.M. Best's opinion, ZEP-RE's prudent underwriting and claims handling will result in a lower frequency of large claims during 2008, producing a loss ratio of 57% in 2008 (compared to 60% in 2007), with improved performance on its non-life risks, particularly in property. In addition, ZEP-RE has made considerable progress developing its risk management to ensure adequate controls are place. ZEP-RE is an African reinsurer, mainly concentrating on the COMESA market, where it has established itself as an important reinsurer. In A.M. Best's opinion, ZEP-RE is expected to continue increasing its presence in the African reinsurance market, growing between 10%-15% in each of the next two years, with gross premiums written in excess of USD 50 million. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. QPC LASERS: Discloses $0.0021 Default Reset Price at December 1 --------------------------------------------------------------- QPC Lasers, Inc. disclosed in a regulatory filing with the Securities and Exchange Commission that as of Dec. 1, 2008, the Default Reset Price is $0.0021. The company is in default of its obligations under its 10% Secured Convertible Debentures issued in April and May of 2007. After an Event of Default, the conversion price for the 2007 Debentures will be decreased on the first trading day of each calendar month thereafter until the Default Amount is paid in full, to a conversion price equal to the lesser of (i) the conversion price then in effect, or (ii) the lowest "Market Price" that has occurred on any Default Adjustment Date since the date the Event of Default began. The "Market Price" is defined in the 2007 Debentures as the volume weighted average price of the common stock during the ten consecutive trading days period immediately preceding the date in question. A holder of a 2007 Debenture may elect upon written notice to require the company to issue, in lieu of payment of all or any specified portion of the unpaid portion of the Default Amount, a number of shares of common stock, subject to the ownership limitations on the conversion of the 2007 Debentures contained therein, equal to all or the specified portion of the Default Amount divided by the Default Reset Price then in effect. However, with the new lower conversion price, the company will not be able to honor any conversions that cause its issued shares to exceed the 180,000,000 shares authorized for issuance under its Articles of Incorporation unless the company obtains shareholder consent to authorize the issuance of additional shares. As of Dec. 2, 2008, the company has 110,806,164 shares of common stock issued and outstanding. In addition, the conversion price of the company's 10% Secured Convertible Debentures issued in May and July of 2008 has been adjusted to the Default Reset Price pursuant to the conversion price adjustment provisions of the 2008 Debentures. The company reiterated that it is very likely that the company will file for protection under Chapter 7 or Chapter 11 of the federal bankruptcy laws due to its lack of cash and that its common stock will have no value after liquidation of the company is completed. About QPC Lasers, Inc. QPC Lasers, Inc. designs and manufactures laser diodes through its wholly-owned subsidiary, Quintessence Photonics Corporation. Quintessence was incorporated in November 2000 by Jeffrey Ungar, Ph.D. and George Lintz, MBA. The Founders began as entrepreneurs in residence with DynaFund Ventures in Torrance, California and wrote the original business plan during their tenure at DynaFund Ventures from November 2000 to January 2001. The business plan drew on Dr. Ungar's 17 years of experience in designing and manufacturing semiconductor lasers and Mr. Lintz's 15 years of experience in finance and business; the primary objective was to build a state of the art wafer fabrication facility and hire a team of experts in the field of semiconductor laser design. RELIANT ENERGY: Emerges from Bankruptcy, Chapter 11 Plan Effective ------------------------------------------------------------------ Reliant Energy Channelview LP's joint plan of liquidation became effective and it emerged from Chapter 11 protection, according to Bloomberg News. Troubled Company Reporter said on Nov. 25, 2008, the United States Bankruptcy Court for the District of Delaware has confirmed the Debtor's liquidation plan, Bankruptcy Law360 reports. The ruling, the report said, paves the way for Global Infrastructure Partners and Fortistar LLC to buy the Debtor's assets. All the creditors eligible to vote on the plan have voted to accept the plan. The Bankruptcy Court approved the Chapter 11 disclosure statement in October. The plan contemplates the liquidation of the Debtors' estate and the distribution of the sale proceeds and any other remaining assets to holders of allowed claims and equity interests. The plan further contemplates the appointment of a plan administrator who will serve as the chief executive officer of the Debtors. On April 8, 2008, GIM Channelview Cogeneration, LLC, emerged as the winning bidder during an auction. Consequently, the Debtors and GIM entered into an GIM asset purchase agreement, wherein GIM did not provide for the assumption and assignment of the Second Amended Restated Cash Flow Participation Agreement (CFPA) between the Debtors and Equistar Chemicals LP. The purchase price under the GIM APA was $500 million. The proceeds of the proposed GIM APA were sufficient to pay all creditor claims in full and provide a recovery to interest holders. The next day, the Court ruled that the Debtors had satisfied the standards for approval of the sale under Section 363 of the United States Bankruptcy Code, and that the CFPA was not severable from the other Equistar agreements to be assumes and assigned under the GIM APA. Thus, the Court's ruling regarding the CFPA jeopardized the Debtors' ability to consummate the sale to GIM. As the GIM APA did not contemplate the assumption and assignment of the CFPA, the Debtors and Equistar attempted to reach an agreement resolving their disputes with respect to the CFPA. On April 23, 2008, the Debtors asked the Court to appoint a Chapter 11 trustee but the Court decided to defer its decision on the Trustee plea and directed the parties to mediate their dispute. On May 6, 2008, the Court entered an order defering motion of the Debtors for entry of an order appointing a Chapter 11 trustee. The parties participated in the court-ordered mediation and successfully resolved their disputes regarding the sale and the CFPA. On June 9, 2008, the Debtors asked the Court to approve the GIM sale and a stipulation in connection with the sale. The salient terms of the stipulation are: -- Upon closing of the sale, the CFPA will be deemed assume by the Debtors, but not assigned to GIM. The acquired assets will be conveyed to GIM free and clear of any liens, claims under the CFPA; -- The project agreements and the letter agreements will be assume and assigned under the sale order. -- At closing, Equistar will receive certain payments and will be deemed to have terminated its interest under and waived all rights under the CFPA. -- After closing, all available cash will be paid to Equistar and REI in the following ratios: a) available cash up to and including $71.7 million will be paid 80% to Equistar and 20$ to REI or its designees; b) available cash in excess of $71.7 million will be paid 60% to Equistar and 405 to REI or its designees; c) Any additional funds will be paid 12.5% to Equistar and 87.5% to REI. -- All obligations under the secured credit facility will be paid in full at closing. Any obligations arising under the secured credit facility post-closing will be paid in full under the confirmed plan. On June 9, 2008, the Court approved sale to GIM. The closing of the sale took place on July 1, 2008. The plan classifies interests against and claims in the Debtors in five classes. The classification of interests and claims are: Treatment of Interests and Claims Type Estimated Class of Claims Treatment Recovery ----- --------- --------- --------- unclassified administrative 100% claims unclassified priority 100% claims unclassified other priority 100% claims 1 secured lender unimpaired 100% claims 2 other secured unimpaired 100% claims 3 general unsecured unimpaired 100% claims 4 intercompany impaired 0% claims 5 equity interests impaired unknown Class 5 holders of interests against the Debtors are entitled to vote for the plan. Holders of Class 1 secured lender claims will receive cash from the sale proceeds to the prepetition agents in an amount necessary to satisfy the allowed secured claims in full. Each holders of Class 2 other secured claims will be paid in full and final satisfaction of the allowed other secured claims otherwise holders agrees to a different treatment, either: -- the collateral secured the allowed secured claims; or -- cash in an amount equal to the value of the collateral. Holders of Class 3 general unsecured claims will receive the full unpaid amount of the claims plus interest -- except, in accordance wit the terms of the stipulation, allowed intercompany claims will be paid without interests -- with respect to the claims from the Debtors' bankruptcy filing to the plan's effective date, accruing at the Federal Judgment Rate as of the Debtors' bankruptcy filing. Class 4 intercompany claims will be canceled and holders will not receive any distribution under the plan. Holders of Class 5 equity interest, after the plan's effective date, will receive all cash and rights, title and interest in any other assets remaining in the Debtors' estates. All cash distributed to holders of equity interest will be subject to and in accordance with the terms of the stipulation including any payments required to be made to Equistar. A full-text copy of the Debtors' Disclosure Statement is available for free at: http://ResearchArchives.com/t/s?31ef A full-text copy of the Debtors' Joint Chapter 11 Plan of Liquidation is available for free at: http://ResearchArchives.com/t/s?31f0 About Reliant Energy Channelview Based in Houston, Reliant Energy Channelview L.P. owns a power plant located near Houston, and is an indirect wholly owned subsidiary of Reliant Energy Inc. -- http://www.reliant.com/-- The company and its three affiliates, Reliant Energy Channelview (Texas) LLC, Reliant Energy Channelview (Delaware) LLC, and Reliant Energy Services Channelview LLC filed for chapter 11 protection on Aug. 20, 2007 (Bankr. D. Del. Lead Case No. 07-11160). Jason M. Madron, Esq., Lee E. Kaufman, Esq., Mark D. Collins, Esq., Paul Noble Heath, Esq., Richards, Robert J. Stearn Jr., Esq., at Layton & Finger P.A., and Timothy P. Cairns, Pachulski Stang Ziehl & Jones represent the Debtors. The U.S. Trustee for Region 3 appointed an Official Committee of Unsecured Creditors in these cases. David B. Stratton, Esq., and Evelyn J. Meltzer, Esq., at Pepper Hamiltion LLP, represent the Committee. When the Debtors filed for protection from their creditors, they listed total assets of $362,000,000 and total debts of $342,000,000. RENFRO CORP: S&P Places 'B' Corp. Credit Rating on Negative Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it placed its ratings, including the 'B' corporate credit rating, on Mount Airy, North Carolina-based sock manufacturer Renfro Corp. on CreditWatch with negative implications, meaning that S&P could affirm or lower the ratings following its review. The company had about $199 million of total debt (including operating leases and pension obligations) at the end of its fiscal third quarter ended Oct. 25, 2008. The CreditWatch listing follows Renfro's continued weak operating performance, resulting in tighter than anticipated covenant cushion levels, and S&P's concerns about the weak economy's effect on the company's near-term performance. Challenging economic conditions and a weak retail environment continued to negatively affect Renfro's sales volumes. "Standard & Poor's will continue to monitor Renfro's operating performance and ability to restore additional cushion on its financial covenants," noted S&P's credit analyst Bea Chiem. S&P will review and discuss financial plans with the company before resolving the CreditWatch listing, as well as expected future levels of cushion on Renfro's financial covenants. "If the company cannot reduce leverage and restore sufficient cushion on its financial covenants in the near term, S&P could lower the ratings," she continued. RESIDENTIAL CAPITAL: S&P Junk Ratings Unaffected by GMAC Setback ---------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on GMAC LLC (CC/Watch Neg/C) and its 100% owned subsidiary, Residential Capital LLC (CC/Watch Neg/C) are not affected by GMAC's announcement that it extended the early delivery time with respect to separate private exchange offers and cash tender offers to purchase or exchange certain of its and its subsidiaries' and Residential Capital's outstanding notes to provide investors with a final opportunity to consider the GMAC and Residential Capital LLC offers. The extension was accompanied by GMAC's disclosure that, based on results of the offers to date, GMAC would not obtain sufficient regulatory capital to meet requirements set by the Federal Reserve for GMAC to become a bank holding company. The Fed required GMAC to achieve a minimum of $30 billion total regulatory capital in connection with its application. To satisfy this stipulation, the company estimates a required participation level of about 75% on a pro rata basis. Furthermore, the Fed informed GMAC that if the capital requirements are not met, the application to become a bank holding company would not be approved. According to GMAC, it intends to withdraw its application to become a bank holding company if the participation level is not achieved with this extension. The company also disclosed that its inability to convert to a bank holding company and complete the GMAC and Residential Capital LLC offers by Dec. 31, 2008, would have a near-term material adverse effect on GMAC's business, results of operations, and financial position. If the company fails to convert to a bank holding company, S&P believes the potential for a bankruptcy filing by either or both of these companies would be high. In the absence of both a bankruptcy filing and conversion to a bank holding company, S&P would not likely lower its ratings on GMAC and Residential Capital LLC until it defaults on its obligations. S&P would view completion of the exchange as a default under its criteria and S&P would expect to downgrade GMAC and Residential Capital to 'SD' (selective default), with the affected debt ratings lowered to 'D'. S&P would subsequently re-rate GMAC and Residential Capital, considering the new debt and capital structures, future business prospects, and other factors relevant to the rating. RFMSI 2006-SA4: S&P Cuts Ratings on Class M-2 & M-3 Certs. to CC ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on seven classes of mortgage pass-through certificates from RFMSI Series 2006-SA4 Trust, a residential mortgage-backed securities transaction backed by U.S. prime jumbo mortgage loan collateral. In addition, S&P affirmed its ratings on four classes from the same transaction. The downgrades reflect S&P's opinion that projected credit support for the affected classes is insufficient to maintain the previous ratings, given S&P's current projected losses. During the November 2008 distribution period, both foreclosure levels and cumulative realized losses were significantly higher than in August 2008. Loans in foreclosure had increased to $8.3 million in November from $2.9 million in August, and the cumulative realized losses doubled to $1.89 million from $0.90 million over the same period. S&P adjusted its lifetime projected losses figure upward to cover two times S&P's estimated losses on the loans currently in the delinquency pipeline. S&P's new lifetime projected losses for this U.S. RMBS transaction, as a percentage of the original pool balance, is 4.83%. The affirmations reflect actual and projected credit enhancement percentages that S&P believes are sufficient to support the current ratings. Subordination provides credit support for this transaction. The underlying collateral for this deal consists of hybrid, adjustable-rate U.S. prime jumbo mortgage loans secured primarily by first liens on fee-simple interests in one- to four-family residential properties with original terms to maturity (from the first scheduled payment due date) of no more than 30 years. S&P will continue to monitor the RMBS transactions it rates and take rating actions, including CreditWatch placements, when appropriate. Ratings Lowered RFMSI Series 2006-SA4 Trust Mortgage pass-through certificates Rating ------ Class CUSIP To From ----- ----- -- ---- I-A-1 74958CAA8 BB A II-A-1 74958CAB6 A AAA III-A-1 74958CAF7 BBB AA III-A-X-1 74958CAE0 BBB AA III-A-2 74958CAG5 BBB AA M-2 74958CAL4 CC CCC M-3 74958CAM2 CC CCC Ratings Affirmed RFMSI Series 2006-SA4 Trust Mortgage pass-through certificates Class CUSIP Rating ----- ----- ------ I-A-2 74958CAD2 B II-A-2 74958CAC4 B III-A-3 74958CAN0 B M-1 74958CAK6 CCC SACRAMENTO YACHT: Files for Chapter 11 Protection ------------------------------------------------- Sacramento Bee reports that Sacramento Yacht Charters has filed for Chapter 11 protection. Court documents say that Sacramento Yacht owes creditors more than $2 million, including: -- a $965,000 boat loan, -- a $220,000 advance by company President Roy King, -- attorneys fees, -- public relations fees, -- back taxes, and -- food bills. W. Austin Cooper, the attorney for Sacramento Yacht, said that the company filed for bankruptcy so that it can continue operations while it tries to restructure its debt. Sacramento Yacht wants to continue booking boat cruises in January 2009, the report says, citing Mr. Cooper. According to Sacramento Bee, the city of Sacramento planned to crack down Sacramento Yacht, which is running its riverfront operations. Sacramento Bee states that the city granted Sacramento Yacht in 2006 exclusive rights to provide riverboat, water taxi, and amphibious trolley service. The report says that the city was set to terminate the contract this week, alleging that Sacramento Yacht: -- provided no water taxi service last year and limited runs this year, -- didn't replace the riverboat Matthew McKinley, and -- make necessary city payments. Sacramento Bee says that for months the city had given in to requests from Sacramento Yacht not to yank its contract. Citing Assistant City Manager Cassandra Jennings, Sacramento Bee relates that Sacramento Yacht "has repeatedly demonstrated it cannot operate a high-quality . . . operation in Old Sacramento." Mr. Jennings, according to Sacramento Bee, said that because of the bankruptcy filing, repayment for $40,000 that Sacramento Yacht owes the city has been put on hold, including the estimated $90,000 in annual revenue expected from the company to support services in Old Sacramento. Sacramento Bee quoted Mr. Cooper as saying, "We needed to head (the council) off, to give the company more time and to preserve its bookings." Mr. Cooper said that the city will have to settle the contract dispute in federal court, and that the company would try to work out a way to sell the operation, states the report. Headquartered in Sacramento, California, Sacramento Yacht Charters offers venues, entertainment and catering services. These include awards banquets, product launches, employee recognition, client appreciation events, welcome receptions, sales meetings, holiday parties, fundraisers, birthdays, graduations, weddings, and proms. SAGEMARK COMPANIES: Appoints New CEO and Director, Settles Debt --------------------------------------------------------------- The Sagemark Companies Ltd. disclosed in a regulatory filing with the Securities and Exchange Commission that Cathy Bergman was appointed as the company's chief executive officer and a member of the company's board of directors. On Nov. 25, 2008, George W. Mahoney, the sole member of the board of directors of the company, resigned as a member of the board of directors, and as the company's president, chief executive officer, chief financial officer and as the president, chief executive officer or managing member of all of the company's subsidiaries. The company also disclosed that it has entered into settlement agreements with numerous of its creditors extinguishing a significant portion of its debt, reducing its aggregate outstanding indebtedness due to its creditors from approximately $10.8 million at March 31, 2008, to approximately $2.4 million. However, as a result of the company's distressed financial condition it does not have the funds to fully satisfy any of such remaining indebtedness, nor does it anticipate that it will have the funds to do so in the foreseeable future. Additionally, inasmuch as the company is not engaged in any revenue generating activities after having discontinued the operations of its outpatient medical diagnostic imaging centers, it is unable to pay its current operating expenses or service its substantial outstanding indebtedness or obligations and has very limited cash resources. As a result thereof, the company closed its corporate offices in Boca Raton, Florida on Nov. 25, 2008, and placed the majority of its books and records in storage. On that date, the company also terminated its remaining staff and employees at such location. The company intends to continue to conduct limited administrative activities in connection with its efforts in seeking to resolve outstanding creditor claims and terminate its remaining premises leases and other contractual obligations. About Sagemark Companies Based in New York, The Sagemark Companies Ltd. (OTC BB: SKCO) does not have significant operations. For the past six years the company has been engaged in the development and operation of out-patient medical diagnostic imaging centers that feature PET and PET/CT imaging systems which is used in the performance of medical diagnostic imaging procedures used by physicians in the diagnosis, staging and treatment of certain cancers, coronary disease and neurological disorders. Going Concern Doubt Moore Stephens, P.C., in Cranford, New Jersey, expressed substantial doubt about The Sagemark Companies Ltd.'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 continues to generate operating losses and has a significant working capital deficiency as of Dec. 31, 2007. SAGEMARK COMPANIES: Judgement on LaVilla Case May Cue Bankruptcy ---------------------------------------------------------------- The Sagemark Companies Ltd.'s balance sheet at Sept. 30, 2008, showed total assets of $363,000 and total liabilities of $5,857,000, resulting in a shareholders' deficit of $5,494,000. For three months ended Sept. 30, 2008, the company reported net loss of $29,000 compared to net loss of $5,252,000 for the same period in the previous year. In the nine months ended Sept. 30, 2008, the company incurred net loss of $2,376,000 compared net loss of $7,747,000 for the same period in the previous year. Working Capital Deficiency and Judgment As of Sept. 30, 2008, the company has a working capital deficiency of $5.4 million including net liabilities of $5 million related to discontinued operations. The significant components of the net liabilities of discontinued operations include notes payable, capital lease obligations, a judgment and accounts payable. As of Sept. 30, 2008, the debt related to the company's discontinued operations includes $1.9 million of notes payable and $725,000 of capitalized lease obligations, substantially all of which are in default for non payment and because it did not meet the minimum cash balances or debt to equity ratio covenants required by some of its creditors. The company does not have sufficient capital to cure any the defaults which have had and continue to have a material adverse affect on the company. During the three and nine months ended Sept. 30, 2008, the company paid $65,000 in full settlement of a $395,000 notes payable obligation to a senior creditor. The settlement included $370,000 of principal and $25,000 of accrued interest and penalties and resulted in a gain of $330,000, which is reported in the statement of operations as a gain on disposal of discontinued operations. Subsequent to Sept. 30, 2008, the company paid $44,000 in full settlement of $1.7 million of notes payable obligations and $879,000 of capital lease obligations to two senior creditors. The settlements included $1.6 million of note payable principal, $725,000 of capitalized lease obligation principal and $342,000 of accrued interest and penalties and resulted in a gain of $2.5 million. As of Sept. 30, 2008, the accounts payable of its discontinued operations includes a liability for a $1.5 million judgment against the company. On April 9, 2008, the company was served with a summons and complaint filed against us by LaVilla Partners, II, LLP in connection with a premises lease of certain premises in Jacksonville, Florida with respect to a PET/CT diagnostic imaging facility that we had at one time planned to establish. The premises lease was entered into on May 5, 2006, prior to the construction of the building in which the imaging facility was to be located. The facility was never established or occupied by the company. Subsequent to its signing of the lease and prior to the building being completed, the company repeatedly advised LaVilla that the company did not have the financial resources to establish or operate the facility or comply with the terms and conditions of the lease. Although the company believes it had significant meritorious defenses and counterclaims with respect to the action, including but not limited to fraud, the company lacked the financial resources to defend any action and did not file any responsive pleadings. As a result, on July 2, 2008, LaVilla obtained a default judgment against the company in the amount of $1,526,393, which is included in the liabilities of discontinued operations. On July 9, 2008, LaVilla filed a motion seeking an award of lawyer's fees and costs, a copy of which was served on the company on July 14, 2008. On Oct. 9, 2008, the Court awarded legal fees to LaVilla's counsel in this matter in the amount of $4,471. Both judgments accrue interest at 11% per annum, which approximates $15,000 per month. The company does not have the resources to satisfy these judgments. Moreover, notwithstanding the significant secured indebtedness of the company with priority over the judgment creditors, if the judgment creditors pursue efforts to collect these judgments, the action may force the company to seek bankruptcy protection. Potential Bankruptcy The company continues to seek relief from its secured and unsecured creditors and relief of its obligations under two remaining premises leases; however, there can be no assurance that it will be successful. If it will be unable to obtain relief on its remaining secured and unsecured obligations and remaining lease obligations, the company may be required to seek protection under available bankruptcy laws. The financial statements do not include any adjustments relating to the amounts and classification of assets and liabilities that might be necessary in the event it cannot continue in existence and are liquidated. A full-text copy of the 10-Q filing is available for free at http://ResearchArchives.com/t/s?3612 About Sagemark Companies Based in New York, The Sagemark Companies Ltd. (OTC BB: SKCO) does not have significant operations. For the past six years the company has been engaged in the development and operation of out-patient medical diagnostic imaging centers that feature PET and PET/CT imaging systems which is used in the performance of medical diagnostic imaging procedures used by physicians in the diagnosis, staging and treatment of certain cancers, coronary disease and neurological disorders. Going Concern Doubt Moore Stephens, P.C., in Cranford, New Jersey, expressed substantial doubt about The Sagemark Companies Ltd.'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 continues to generate operating losses and has a significant working capital deficiency as of Dec. 31, 2007. SANDERSON STATE: Tex. Regulators Close Bank & FDIC Named Receiver ----------------------------------------------------------------- Sanderson State Bank, based in Sanderson, Tex., was closed on Fri., Nov. 12, 2008, by the Texas Department of Banking, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with The Pecos County State Bank, of Fort Stockton, Tex., to assume all of Sanderson State Bank's deposits, including those that exceeded the deposit insurance limit. Sanderson State Bank's sole office will reopen on Mon., Nov. 15, 2008, as a branch of The Pecos County State Bank. All depositors of the failed bank will automatically become depositors of The Pecos County State Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their existing banking relationship to retain their deposit insurance coverage. Customers of the failed bank should continue to use the same banking location until they receive further information from The Pecos County State Bank. As of December 3, 2008, Sanderson State Bank had total assets of $37 million and total deposits of $27.9 million. The Pecos County State Bank agreed to assume all of the deposits for a .55 percent premium. In addition to assuming all of the failed bank's deposits, The Pecos County State Bank will purchase approximately $3.8 million of assets, and have the option to purchase owned premises and equipment. The FDIC will retain the remaining assets for later disposition. The FDIC estimates that the cost to the Deposit Insurance Fund will be $12.5 million. The Pecos County State Bank's acquisition of all the deposits was the least costly resolution for the FDIC's Deposit Insurance Fund compared to alternatives. Sanderson State Bank is the 25th bank to fail in the nation this year, and the second in Texas. The last bank to be closed in the state was Franklin Bank, SSB, Houston, TX, on November 7, 2008. Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 8,384 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars; insured financial institutions fund its operations. SEACOR HOLDINGS: Moody's Affirms 'Ba1' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service affirmed SEACOR Holdings Inc.'s Ba1 Corporate Family Rating and Probability of Default Rating and the Ba1 (LGD 4, 57%) ratings on the company's 7.2% senior unsecured notes due 2009 and 5.875% senior unsecured notes due 2012. Concurrently, Moody's affirmed the Ba1 (LGD4, 57%) rating on the 9.5% senior unsecured notes issued by SEACOR's wholly owned subsidiary, Seabulk International Inc. The outlook is stable. "SEACOR's Ba1 rating reflects the company's substantial market position in offshore marine services and strong liquidity," commented Pete Speer, Moody's Vice-President. "However, SEACOR's asset base, returns and absolute leverage are not comparable to investment grade oilfield services companies." The company is a leading provider of offshore logistics support in the U.S. Gulf of Mexico market and also has a presence in other major offshore oil and gas markets around the world. The Ba1 CFR is also supported by the company's policy of maintaining large cash and investment balances relative to debt to mitigate its financial risk in light of the high cyclicality of oilfield services demand. However, this high liquidity is also kept for opportunistic acquisitions when management believes asset valuations are attractive, which often coincides with market downturns. SEACOR's largest individual segment, offshore marine services, has a Ba business profile. The company's other four operating business segments have niche market positions. The ratings are also restrained by returns and financial performance that remain low relative to Baa rated oilfield services peers and have trended down since peaking in 2006. The company has made $450 million of share repurchases in recent years, somewhat reducing its cash and investment balances this year. Moody's also believes that management's propensity to make changes to its asset mix and enter into new or adjacent lines of business are more appropriately accommodated in the Ba1 rating. The outlook is stable based on an expectation that SEACOR's substantial liquidity position will enable it to weather a likely downturn in demand for offshore support services. A severe downturn in market conditions for a prolonged period that reduces the company's liquidity cushion could result in a negative outlook. SEACOR's ratings could be upgraded if the company increases its operating asset base to enhance its fleet quality, market position and geographic diversification in its existing lines of business. Assuming market conditions similar to LTM September 30, 2008, consolidated EBITDA of $750 million and gross adjusted debt/EBITDA of 2x on a sustainable basis would be more consistent with an investment grade oilfield services company. A major acquisition without meaningful equity funding that increases leverage and/or reduces the company's liquidity position could result in a negative outlook or ratings downgrade. The last rating action was on September 25, 2006, when the Ba1 Probability of Default rating was assigned to SEACOR and the Loss Given Default assessments were assigned to SEACOR and Seabulk's senior unsecured notes and to SEACOR's shelf ratings. SEACOR Holdings, Inc., headquartered in Fort Lauderdale, Florida, provides offshore marine and aviation services to oil and gas companies. The company also provides marine and inland river transportation, environmental and other services. SGS INTERNATIONAL: Moody's Affirms 'B2' Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service revised the rating outlook for SGS International Inc. to negative from stable. Moody's also affirmed the company's B2 corporate family rating, all instrument ratings, and its SGL-3 rating. Moody's took these actions: -- Affirmed B2 corporate family rating -- Affirmed $35 million first lien revolving credit facility due 2010, Ba2 (LGD2-21%) -- Affirmed $40 million acquisitions loan facility due 2011, Ba2 (LGD2-21%) -- Affirmed $119 million term loan facility due 2011 ($105 million outstanding), Ba2 (LGD2-21%) -- Affirmed $200 million subordinated notes due 2013, B3 (LGD5- 76%) -- Affirmed SGL-3 speculative grade liquidity rating The revision of the rating outlook to negative reflects the modest cushion under certain financial covenants in the company's credit facility, potentially reduced availability under the revolver, and continued price erosion in the industry against the backdrop of a weak economic environment. SGS's financial covenants step down over the next twelve months. In Moody's opinion, in order to build a safe cushion for continued covenant compliance, the company needs to refrain from debt financed acquisitions and apply free cash flow to debt reduction since little growth in EBITDA is expected. The B2 corporate family rating reflects the company's acquisitiveness, participation in a highly fragmented, competitive industry, concentration of sales, and small revenue base. The ratings are supported by the company's position as one of the leaders in its industry in the U.S., longstanding relationships with large, well-established consumer products companies, largely variable cost structure, and stable cash flow. The last rating action for SGS was on September 28, 2006, when the corporate family rating of B2 was affirmed. SGS's ratings have been assigned by evaluating factors that Moody's believe are relevant to the company's risk profile, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside IOI's core industry; IOI's ratings are believed to be comparable to those of other issuers with similar credit risk. Headquartered in Louisville, Kentucky, SGS International, Inc. is an international provider of design-to-print graphic services and image carriers to the global consumer products packaging market. SGS develops, designs and prepares prints and image carriers for mass production of packaging. Revenues for the twelve months ended September 30, 2008, were $324 million. SGS INV: S&P Junks Ratings on Classes C and D Notes --------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class A-2, B, C, and D notes issued by SGS Inv. Grade Credit Fund (Wayfarer CDO 2006-2) Ltd., a hybrid collateralized debt obligation transaction with a portfolio that primarily references investment-grade corporate bonds. At the same time, S&P placed its ratings on the class A-1, A-2, and B notes on CreditWatch with negative implications. S&P downgraded the class A-2, B, C, and D notes because of deterioration in the credit quality of the underlying reference obligations. The weighted average rating of the collateral in the portfolio has declined to 'BBB-' from 'BBB+' since the transaction closed in December 2006. The transaction has also experienced a credit event, as one of the securities that the transaction synthetically references has resulted in a loss of $11.6 million. According to the most recent trustee report, dated Nov. 10, 2008, the class D par value test had declined to 100.82% from 102.02% at the time the deal closed, and the current test figure is below the minimum required level of 101.1%. The CreditWatch placements reflect concerns over continuing negative rating migration in the transaction's portfolio. Currently, 17% of the ratings on the reference obligations in the portfolio are on CreditWatch with negative implications. S&P will continue to review whether the ratings currently assigned to the notes remain consistent with the credit enhancement available to support them. Rating Lowered and Placed on Creditwatch Negative SGS Inv. Grade Credit Fund (Wayfarer CDO 2006-2) Ltd. Rating Balance (million) ------ ----------------- Class To From Current Original ----- -- ---- ------- -------- A-2 BBB-/Watch Neg AAA $60.000 $60.000 B B-/Watch Neg AA $20.000 $20.000 Ratings Lowered SGS Inv. Grade Credit Fund (Wayfarer CDO 2006-2) Ltd. Rating Balance (million) ------ ----------------- Class To From Current Original ----- -- ---- ------- -------- C CCC+ A $10.000 $10.000 D CCC BBB $15.000 $15.000 Rating Placed on Creditwatch Negative SGS Inv. Grade Credit Fund (Wayfarer CDO 2006-2) Ltd. Rating ------ Class To From Balance (million) ----- -- ---- ----------------- A-1 AAA/Watch Neg AAA $870.300 Transaction Information ----------------------- Issuer: SGS Inv. Grade Credit Fund (Wayfarer CDO 2006-2) Ltd. Co-issuer: SGS Inv. Grade Credit Fund (Wayfarer CDO 2006-2) Inc. Underwriter: Goldman, Sachs & Co. Trustee: Citibank N.A. Transaction type: Hybrid cash flow/synthetic CDO SYSCAN INT'L: Wants Trustee Under Bankruptcy and Insolvency Act --------------------------------------------------------------- Syscan International Inc. has resolved to make assignment pursuant to the Bankruptcy and Insolvency Act to a Trustee to handle matters with its creditors. The assignment is a result of the company having received notice of the Hypothec enforcement from the courts, associated with a secured Bridge Loan the company had obtained from Bluehill ID AG of Switzerland. Demand for the Loan had been made as announced on Nov. 21, 2008. The Board of the company decided to pursue this course of action after the expected private placement with Bluehill ID failed to materialize and after previous attempts to raise capital and affect a company merger and sale were unsuccessful. The secured loan was first time entered on Aug. 29, 2008, and subsequently increased on Oct. 3, 2008, for a total of $200,000. The Company signed two promissory notes pursuant to which it unconditionally promised to pay to BlueHill, said amount bearing interest, at a nominal rate of 18% per annum. Moreover, on Aug. 29, 2008, the lender and the company entered into a movable hypothec Agreement which guarantees the payment by the company under the promissory notes on the universality of all the property of the company. In accordance with the terms of the promissory notes, the lender declared the outstanding principal amounts advanced under the Promissory Notes, and all accrued and unpaid interest upon, immediately due and payable by the Company to the Lender. Without the means to pay the Lender and with the institution of proceedings to seize all the company assets the Board decided to petition the court to appoint a Trustee to manage the affairs of the company with its creditors in accordance statutory requirements. About Syscan International Syscan International Inc. (TSX VENTURE:SYA) -- http://www.syscan.com/-- supplies RFID asset identification and tracking softwares for agriculture, asset management, security & ID Management. TENNECO: Fitch Puts Issuer Default Rating on Negative Watch ----------------------------------------------------------- Fitch Ratings has placed the Issuer Default Ratings of the U.S. auto suppliers listed below on Rating Watch Negative, based on the impact of a potential bankruptcy filing by General Motors (and Fitch's view that this would be followed by a bankruptcy at Ford). Given its smaller profile, it is unlikely that a bankruptcy filing by Chrysler would have the same impact. Industry bankruptcies could result from either the failure of the auto legislation currently under consideration in the U.S. Congress, or the failure of the Detroit Three to develop viable restructuring plans in the several months prior to the expiration of the bridge loans included in the current legislation. In 2009, auto suppliers are already facing a steep global downturn in auto production, including a deeply depressed production forecast in the U.S. and Europe. In the event of a General Motors bankruptcy, Fitch believes that the resulting contraction in auto production, the supply chain, trade credit and capital-access would cause widespread shutdowns and bankruptcies throughout the supply chain. Given the cliff-risk nature of the risks involved, Fitch has tried to detail below the extent of the potential rating actions that would be taken in the event of a GM bankruptcy. In any event, Fitch will continue to take individual rating actions in the sector as events unfold over the next several weeks and months. Fitch notes that even if the OEMs avoid bankruptcy, major restructurings of their operations will occur, causing material changes in the operations of their Tier I suppliers. These restructurings could also lead to ratings actions, providing further rationale for placing these suppliers on Rating Watch Negative. The auto suppliers placed or remain on Rating Watch Negative and the ratings most likely to result in the event of a GM bankruptcy are: Companies Current IDR/Prospective IDR -- American Axle 'B'/'CC'; -- ArvinMeritor 'B'/CCC'; -- Hayes-Lemmerz 'B'/CCC'; -- Johnson Controls 'A-'/'BBB+'; -- Tenneco 'BB-/B-'; -- TRW 'BB'/'B-'; -- Visteon 'CCC'/'CC' -- Companies not included in the rating actions: -- Cummins 'BBB+'; -- Goodyear 'BB-'; -- Navistar 'BB-' Despite improved diversification by most Tier 1 suppliers, across manufacturers, geographies and product lines, the decline in supplier revenues and operating cash flow through 2009 resulting from a GM bankruptcy would likely produce covenant violations across the vast majority of suppliers. Of equal concern, Tier 2 and three suppliers are likely to experience widespread bankruptcies through loss of volume, lack of receivables financing, and restricted financial and trade credit. Fitch expects that a collapse of trade credit throughout the supply chain would put at risk the domestic operations of these suppliers, as well as their financial viability. TRW and Tenneco remain better positioned given their global operations, but Fitch expects that these two companies, at a minimum, would require renegotiations with their bank group. Ratings on Rating Watch Negative are: American Axle & Manufacturing Holdings, Inc. -- IDR 'B'; American Axle & Manufacturing, Inc -- IDR 'B'; ArvinMeritor -- IDR 'B'; -- Secured 'BB'; -- Senior unsecured 'B/RR4'. Hayes-Lemmerz International, Inc -- IDR 'B'. Hayes-Lemmerz Finance Luxembourg S.A -- IDR 'B'; -- Senior unsecured 'B-/RR5'; -- Senior secured 'BB/RR1'. HLI Operating Company Inc. -- IDR 'B'; -- Senior secured 'BB/RR1'. Johnson Controls -- IDR 'A-'. York International -- IDR 'A-'. Tenneco -- IDR 'BB-'; -- Senior unsecured 'BB-'; -- Subordinated 'B'; -- Senior secured notes 'BB'; -- Senior secured credit facilities 'BB+'. TRW Automotive Holdings Corp -- IDR 'BB'. TRW Automotive, Inc -- IDR 'BB'; -- Secured 'BB+'; -- Senior unsecured 'BB-'. Visteon Corp -- IDR 'CCC'; -- Senior secured 'B/RR1'; -- senior unsecured 'CC/RR6'. TRIBUNE CO: Bankruptcy Invokes Default In Credit Facilities ----------------------------------------------------------- The filing of Tribune Company and its 110 affiliates under Chapter 11 of the Bankruptcy Code constitutes or may constitute an event of default or otherwise triggers or may trigger repayment obligations under the express terms of certain instruments and agreements relating to the companies' direct financial obligations, Tribune Co. disclosed with the Securities and Exchange Commission. The material Debt Documents, and the approximate principal amount of debt currently outstanding thereunder, are: Loan Type Amount Outstanding --------- ------------------ Tranche B Facility due 2014 and $8,230,000,000 Tranche X Facility due 2009 Revolving Credit Facility 237,000,000 Bridge Facility due 2008 1,600,000,000 Medium-term notes due 2008, 850,000,000 4.875% notes due 2010, and 5.25% notes due 2015, issued under the Indenture, dated January 1, 1997, with Deutsche Bank Trust Company Americas, as trustee 7.25% debentures due 2013 and 181,000,000 7.5% debentures due 2023, issued under the Indenture, dated January 30, 1995, with Deutsche Bank, as trustee 6.61% debentures due 2027 and 233,000,000 7.25% debentures due 2096, issued under the Indenture, dated March 19, 1996, with Deutsche Bank, as trustee Exchangeable subordinated 1,256,000,000 debentures due 2029, issued under the Indenture, dated April 1, 1999, with Deutsche Bank, as trustee Subordinated promissory 225,000,000 notes due 2018 Certain other obligations - under Tribune's interest rate swap/hedging arrangements As a result of an event of default or triggering event, all obligations under the Debt Documents would, by the terms of the Debt Documents, have or may become due and payable, David P. Eldersveld, Tribune's vice president, deputy general counsel and secretary, said. The Tribune Companies believe that any efforts to enforce the payment obligations against them under the Debt Documents are stayed as a result of the Chapter 11 Petitions. About Tribune Co. Chicago, Illinois-based Tribune Co. -- http://www.tribune.com/-- fka Times Mirror Corporation, is America's largest employee-owned media company, operating businesses in publishing, interactive and broadcasting. In publishing, Tribune's leading daily newspapers include the Los Angeles Times, Chicago Tribune, The Baltimore Sun, Sun-Sentinel (South Florida), Orlando Sentinel, Hartford Courant, Morning Call and Daily Press. The company's broadcasting group operates 23 television stations, WGN America on national cable, Chicago's WGN-AM and the Chicago Cubs baseball team. The company filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Delaware Case No. 08-13141). Norman L. Pernick, Esq., at Cole, Schotz, Meisel, Forman & Leonard, PA, and Sidley Austion LLP represent the company in its restructuring effort. The company's financial advisors are Lazard Ltd. and Alvarez & Marsal North Americal LLC. Its claims agent is Epiq Bankruptcy Solutions LLC. As of Dec. 8, 2008, the company listed assets of $7,604,195,000 and debts of $12,972,541,148. (Tribune Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). TRIBUNE CO: Bankruptcy Signals Distress for Media Buy-Outs ---------------------------------------------------------- Tribune Company's entry into Chapter 11 is a bad omen for the almost $90 billion in buyouts of U.S. media companies from 2005 to 2007 that relied heavily on loans and economic assumptions that proved too optimistic, Gillian Wee reported for Bloomberg News. Tribune was acquired in 2007 for about $8.3 billion by Sam Zell in a buy-out. That buy-out left the media company saddled with $12.9 billion of debts. Ms. Wee pointed out that $500 million of radio broadcaster Clear Channel Communications, Inc.'s 5.75% notes due 2013 is trading at about 16.5 cents on the dollar as of December 11, 2008, while Spanish-language media company Univision Communications, Inc.'s 9.75% notes due 2015, with a $1.5 billion principal amount, trades at around 12 cents. Univision was bought for $12.3 billion sometime in 2007. Clear Channel was acquired in a $17.9 billion leveraged buy-out in 2008. The prices indicate investors are concerned the companies may default, Larry Allen, managing director of Nyppex Holdings, LLC, which trades interests in buy-out funds, told Bloomberg. "We're going to see more bankruptcies in leveraged deals that were done at high prices in the past two or three years," Brooks Zug, senior managing director of HarbourVest Partners LLC, forecasted. The acquisitions most at risk are "consumer-oriented and deals that had covenants on borrowing," Ms. Zug related to Bloomberg. Brooke Morganstein Gordon, a spokeswoman for Univision, told Bloomberg that the company has "more than ample liquidity to operate the business in the current environment, and has sufficient cash on hand to meet all obligations and debt maturities, including repayment of the asset sale bridge due in March 2009." Bloomberg said Clear Channel has no comment. Tribune, in its bankruptcy petition, cited low U.S. advertising revenues as one of the reasons why its total revenues fell, which resulted to liquidity issues. U.S. advertising spending in the third quarter of 2008 dropped 4% even with election campaigns and will likely fall 6.6% in the last three months of the year, Bloomberg reported citing a report published November 14, 2008, by Sanford C. Bernstein & Co. analyst Michael Nathanson. The same report said ad spending will shrink 9.3% in 2009. "Broadcasting has been in a really tough business this year with a significant amount of automotive advertising coming out of local markets," Mike Simonton, an analyst at Fitch Ratings told Bloomberg. U.S. automakers, especially the Detroit Big Three -- General Motors Corporation, Ford Motor Company and Chrysler LLC - - are in the slump themselves and are currently pushing for a $14 billion dollar bail-out by the U.S. Government saying they don't have enough cash to get their operations going until the end of the year. Dark Outlook for Media Industry Tribune Company's decision to seek protection under Chapter 11 of the Bankruptcy Code exposes the U.S. media industry's grim future. Other media companies are also facing liquidity issues, heavy debt loads, and cutting costs. The Philadelphia Bulletin reported that McClatchy Co., publisher of 30 newspapers including the Miami Herald and the Sacramento Bee, in the past several months, has reduced its workforce by 20% and is seeking to sell the Miami Herald. Philadelphia Media Holdings LLC and Journal Register Co., have stopped making interest payments this year, the report said. The Wall Street Journal also reported that New York Times said it is negotiating with lenders over near future debt payments. A $400 million credit facility entered by the NY Times is set to expire in May 2009, and another credit facility of the same amount will expire in 2010, the Journal related. Creative Loafing, Inc., owner of six weekly newspapers, filed for bankruptcy in September 2008. According to the Journal, newspaper publishers concede that the financial picture for the industry is bleak for some, if not all, of 2009, after a 15% decline in advertising sales across the industry in 2008. About Tribune Co. Chicago, Illinois-based Tribune Co. -- http://www.tribune.com/-- fka Times Mirror Corporation, is America's largest employee-owned media company, operating businesses in publishing, interactive and broadcasting. In publishing, Tribune's leading daily newspapers include the Los Angeles Times, Chicago Tribune, The Baltimore Sun, Sun-Sentinel (South Florida), Orlando Sentinel, Hartford Courant, Morning Call and Daily Press. The company's broadcasting group operates 23 television stations, WGN America on national cable, Chicago's WGN-AM and the Chicago Cubs baseball team. The company filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Delaware Case No. 08-13141). Norman L. Pernick, Esq., at Cole, Schotz, Meisel, Forman & Leonard, PA, and Sidley Austion LLP represent the company in its restructuring effort. The company's financial advisors are Lazard Ltd. and Alvarez & Marsal North Americal LLC. Its claims agent is Epiq Bankruptcy Solutions LLC. As of Dec. 8, 2008, the company listed assets of $7,604,195,000 and debts of $12,972,541,148. (Tribune Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). TRIBUNE CO: Gets Interim Approval for $125MM Barclays Financing --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware, authorized, on an interim basis, Tribune Co. and its affiliates to amend the Receivables Loan Agreement and other accompanying agreements, dated July 1, 2007, among Tribune Company, non-debtor Tribune Receivables, LLC, and Barclays Bank PLC, as lender, funding agent, and administrative agent. The amendment, among other things, extends the term of the Facility until April 10, 2009. The Facility will provide the Debtors $75,000,000 of postpetition loans. The Court also authorized the Debtors, on an interim basis, to execute and enter into a $50,000,000 letter of credit with Barclays. During the December 10, 2008, hearing for interim DIP approval, the U.S. Trustee raised certain issues with respect to the proposed form of DIP order, the Debtors' proposed counsel, James F. Conlan, Esq., at Sidley Austin, in Chicago, Illinois, related in a certification of counsel. The Debtors and Barclays, Mr. Conlan related, made certain modifications to the proposed form of interim order to address the U.S. Trustee's concerns and address the scheduling of the final DIP hearing. Judge Carey approved the modified proposed interim DIP order. The Debtors' obligations under the Receivables Facility and the L/C Agreement constitute claims with priority in payment over all administrative expenses of the kinds specified pursuant to Sections 105, 326, 328, 330, 331, 503(b), 506(c), 507(a), 507(b), 546, 726, 1113, and 1114 of the Bankruptcy Code, and will at all times be senior to the rights of the Debtors or any successor trustee. Judge Carey will convene a hearing on January 3, 2009, to consider final approval of the financing request. Objections are due December 29, 2008. A full-text copy of the Interim Financing Order is available for free at http://bankrupt.com/misc/tribune_interimdipord.pdf To ensure sufficient liquidity and continuity of operations during the pendency of their Chapter 11 cases, Tribune Company and its 110 debtor-affiliates seek the Court's authority to: (a) amend the $300 million accounts receivable securitization facilities, dated July 1, 2008, with Barclays Bank PLC, as Funding Agent, Administrative Agent and Issuing Bank, to extend the Debtors' access under the facilities until April 10, 2009; and (b) enter into a Letter of Credit Agreement providing for the issuance by Barclays and other participating lenders of up to $50 million in new Letters of Credit. Terms of Receivables Facility Under the Receivables Facility Agreement, certain Debtors sell their accounts receivables to their parent, Tribune Co., which then sells the accounts to a special purpose vehicle buyer, non- Debtor Tribune Receivables, LLC, through loans provided by certain lenders, currently Barclays. Tribune Receivables grants Barclays a first-priority perfected security interest in, among other things, the Receivables purchased by it, all accounts to which collections on the Receivables are remitted, the related concentration accounts, and permitted investments held in a controlled money market fund account at Bank of America, N.A. About $225 million of the Facility has been used up by Tribune Receivables prepetition. Chandler Bigelow III, senior vice president and chief financial officer of Tribune Co., states that the purpose of the Receivables Facility is to provide liquidity to Tribune Co. and certain of its Debtor affiliates by enabling them to realize the cash equivalent value of certain of their accounts receivables prior to the usual collection period. The Receivables Facility Accounts, Mr. Bigelow relates, primarily receive collections on the Receivables, including credit card receipts. The majority of the funds deposited into the Receivables Facility Accounts are advertising revenue generated by the Debtors' broadcasting and publishing entities. The Receivables Facility Accounts receive approximately 80% of the incoming cash receipts from the Debtors' operations. Receivables Facility Amendment The Debtors seek to amend the Receivables Facility and its accompanying agreements in these respects: * The Facility Limit under the Receivables Loan Agreement is reduced to $225 million until the time as the prepetition loan balance has been reduced to zero. * The Facility Termination Date for the loans under the RLA is changed to April 10, 2009. * The various representations, covenants, defaults and amortization triggers in the RLA, the Receivables Purchase Agreement and the Servicing Agreement are revised to provide that the filing of the Motion does not, in and of itself, trigger a termination of the facility or the amortization of the loans outstanding hereunder. * Additional Facility Termination Events relating to the bankruptcy proceedings are incorporated into the RLA. * Additional covenants governing sales, purchases, investments, dividend distributions, incurrence of debt and other actions of Tribune Co. are incorporated into the RPA. A free copy of the Receivables Facility Amendments is available at http://bankrupt.com/misc/receiamendments.pdf Letter of Credit Agreement Terms The L/C Agreement will terminate on the earliest of (i) April 7, 2009, (ii) January 15, 2009, in the event a final financing order has not been approved by the Court on or prior to that date, (iii) the effective date of a plan of reorganization, or (iv) any other date on which the commitments terminate pursuant to the L/C Agreement. "Collateral" under the L/C Agreement means the amounts deposited into a Collateral Account from time to time pursuant to the L/C Agreement. The applicable Account Party is obligated to cash collateralize each outstanding obligation in an amount at least equal to 105% of the obligation. The facility will be secured by a first administrative priority status and a first priority security interest and Lien on the L/C Cash Collateral by the Court pursuant to Section 364(d) of the Bankruptcy Code, with priority and superpriority over: -- all other Liens and claims against the property of Tribune Co. or of the Debtor Subsidiaries or the Collateral existing as of the Petition Date; and -- priority claims, including administrative expenses, alleging priority pursuant to Sections 503(b), 506(c), or 507(b). The security, however, is subject to a Carve-Out for (a) the payment of allowed professional fees and disbursements incurred by the professionals retained by the Debtors and any official committee appointed in the Chapter 11 cases in an aggregate amount not to exceed $5,000,000; and (b) quarterly fees required to be paid to the U.S. Trustee and the Court Clerk. Other salient terms of the L/C Agreement: Interest Rate: the Administrative Agent's base rate plus a margin of 5% per annum L/C Commissions: 3% per annum of the daily average indrawn face amount of the applicable L/C Fronting Fee: 0.125% per annum of the daily average indrawn face amount of the applicable L/C Commitment Fee: 0.5% per annum on the daily average amount of the applicable Lender's commitment Administrative Fees: $10,000 per month Covenants under the L/C Agreement are the usual and customary for the same types of credit agreements, including the timely furnishing of annual and quarterly financial reports, Securities and Exchange Commission reports, notices of default, Chapter 11 filings to the Administrative Agent; and a covenant not to permit to exist any claims entitled to a superpriority under Section 364(c)(1) other than those of the Postpetition Agent and the Lenders. Events of default are customary, including, among others, non- compliance under the L/C, dismissal or conversion of the Chapter 11 cases, or the contest or disallowance of any Lenders' claim related to the Receivables or L/C Facilities. A full-text copy of the L/C Agreement is available for free at http://bankrupt.com/misc/tribune_creditpact.pdf Mr. Bigelow tells the Court that the Debtors' need for financing is immediate. In the absence of the proposed financing, serious and irreparable harm to the Debtors and their estates could occur, which may include third parties declining to conduct business dealings with the Debtors. The 120-day extension of the Receivables Facility provides the Debtors a reasonable period to evaluate the impact of their Chapter 11 proceedings, determine their longer term financing needs, and fully explore with Barclays and others the best alternatives for that financing, Mr. Bigelow adds. The Debtors, together with their investment bankers and financial advisors, sought indications of interest in a DIP facility, but the financial institutions that were approached were unwilling to provide the Debtors with additional liquidity on an unsecured basis, Mr. Bigelow tells the Court. The Debtors also ask the Court to modify the automatic stay to permit the deduction of amounts that are payable by the Originators to Tribune Receivables in respect of violations of certain representations and warranties and dilution items. The Debtors further seek the Court's authority to file under seal certain fee letters entered with Barclays in connection with the Credit Facilities asserting that a broad publication of the Fee Letters would be inappropriate and materially harmful to Barclay's business. About Tribune Co. Chicago, Illinois-based Tribune Co. -- http://www.tribune.com/-- fka Times Mirror Corporation, is America's largest employee-owned media company, operating businesses in publishing, interactive and broadcasting. In publishing, Tribune's leading daily newspapers include the Los Angeles Times, Chicago Tribune, The Baltimore Sun, Sun-Sentinel (South Florida), Orlando Sentinel, Hartford Courant, Morning Call and Daily Press. The company's broadcasting group operates 23 television stations, WGN America on national cable, Chicago's WGN-AM and the Chicago Cubs baseball team. The company filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Delaware Case No. 08-13141). Norman L. Pernick, Esq., at Cole, Schotz, Meisel, Forman & Leonard, PA, and Sidley Austion LLP represent the company in its restructuring effort. The company's financial advisors are Lazard Ltd. and Alvarez & Marsal North Americal LLC. Its claims agent is Epiq Bankruptcy Solutions LLC. As of Dec. 8, 2008, the company listed assets of $7,604,195,000 and debts of $12,972,541,148. (Tribune Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). TRIBUNE CO: To Pay Pre-Bankruptcy Dues to Customers --------------------------------------------------- Tribune Co. and its affiliated debtors won permission from the U.s. Bankruptcy Court for the District of Delaware to honor and pay prepetition amounts owed to customers under various customer programs. Judge Kevin Carey directed the Debtors to provide to the statutory committee of the unsecured creditors and the Office of the United States Trustee, reasonable and timely access to information sufficient to enable parties to monitor payments made, obligations satisfied and other actions taken. Prior to the Petition Date and in the ordinary course of their business operations, the Debtors engaged in certain practices to develop and sustain a positive reputation for their publications, syndicated content offerings, broadcast stations, cable networks and interactive Web sites with subscribers and advertisers and in the marketplace generally. The Customer Programs include rebates, prepayments, refunds, adjustments, customer service programs and delivery programs. The goals of the Customer Programs are to meet competitive pressures, ensure customer and advertiser satisfaction and generate goodwill for the Debtors, thereby retaining current customers and advertisers, attracting new ones and ultimately enhancing revenue and profitability. The Debtors' Prepetition Customer Programs are: (1) Advertising Programs The vast majority of the Debtors' revenue comes from advertising, with the remainder coming mostly from subscriptions. Advertising revenue accounts approximately 73% of the Debtors' total publishing revenue, and approximately 95% of the Debtors' total broadcasting revenue. The Debtors' Advertising Programs include (i) advertising rebates and related discounts or price adjustments; (ii) broadcasting audience delivery guarantees; (iii) online audience guarantees; and (iv) correcting improperly run ads. (2) Delivery Service Program The Debtors provide delivery services for certain non-affiliated newspaper companies in defined geographical areas. As compensation for delivery services, the Debtors are generally paid a set price per copy delivered. However, in most instances, the Debtors deduct the fees they are owed in connection with the Delivery Service Program from the proceeds collected from the retailers. To the extent the proceeds exceed the amounts due to the Debtors under the Program, the Debtors remit the excess to the appropriate Newspaper Company. (3) Direct Mail Program The Debtors also provide direct marketing services to customers seeking to distribute advertisements and similar materials directly to the homes and offices of a geographically defined market base. The services typically involve mailing a customers' print media directly to a specified mailing list on or before a certain date. (4) Billing Adjustments From time to time in the Debtors' publishing and broadcast and entertainment businesses, subscribers and advertisers are invoiced in error for amounts that they did not incur. The errors include improper invoicing, duplicated payment, mis- pricing, and mis-run advertisements. Where a customer pays for the amounts invoiced in error, the Debtors correct the invoicing errors through billing adjustments. (5) Customer Service Program To best serve their customers, the Debtors have engaged the services of third-party customer service representatives to address inquiries and issues related to their advertising services and publications, including newspaper, subscription issues, delivery issues, billing questions, advertising customer accounting, online technical issues, and debt collection services. (6) Prepayments There are instances when the Debtors receive payments from their customers in advance of providing goods and services. Nearly all subscribers prepay for newspaper subscription in advance. The Debtors also receive payments from certain advertisers in advance of providing broadcasting or publication advertising slots for the advertisers. As of the Petition Date, the Debtors believe they are holding approximately $62,700,000 on account of prepayments, of which $500,000 is outstanding in connection with refunds. The Debtors estimate that they owe $19,025,000 in their Customer Programs as of the Petition Date: Program Amount Owed ------- ----------- Advertising Program Rebate Program $5,000,000 Make-Good Program 4,600,000 Error Credit Program 1,500,000 Direct Mail Program 2,600,000 Billing Adjustments 4,500,000 Customer Service Program 825,000 The Debtors believe that the viability and revitalization of their business is dependent on the development and maintenance of customer loyalty, especially through their subscribers and advertisers. The Debtors note that without their ability to honor prepetition customer obligations, the stability of their business will be significantly undermined and otherwise loyal subscribers and advertisers may explore alternative sources for their products and services. Because the Debtors' industries are highly competitive, some of their subscribers may cease to purchase their publications and turn to other sources if they fail to timely perform their obligations under the Customer Programs. About Tribune Co. Chicago, Illinois-based Tribune Co. -- http://www.tribune.com/-- fka Times Mirror Corporation, is America's largest employee-owned media company, operating businesses in publishing, interactive and broadcasting. In publishing, Tribune's leading daily newspapers include the Los Angeles Times, Chicago Tribune, The Baltimore Sun, Sun-Sentinel (South Florida), Orlando Sentinel, Hartford Courant, Morning Call and Daily Press. The company's broadcasting group operates 23 television stations, WGN America on national cable, Chicago's WGN-AM and the Chicago Cubs baseball team. The company filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Delaware Case No. 08-13141). Norman L. Pernick, Esq., at Cole, Schotz, Meisel, Forman & Leonard, PA, and Sidley Austion LLP represent the company in its restructuring effort. The company's financial advisors are Lazard Ltd. and Alvarez & Marsal North Americal LLC. Its claims agent is Epiq Bankruptcy Solutions LLC. As of Dec. 8, 2008, the company listed assets of $7,604,195,000 and debts of $12,972,541,148. (Tribune Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). TROPICANA INN: Files Chapter 11 Plan of Reorganization ------------------------------------------------------ Tropicana Inn Investors, LLC, filed with the U.S. Bankruptcy Court for the District of Nevada on Dec. 10, 2008, a Plan of Reorganization under Chapter 11 of the Bankruptcy Code and Disclosure Statement containing a summary of the Plan and related matters. Description of the Assets Situated on Tropicana Avenue almost directly next to the MGM Grand Hotel in Las Vegas, Nevada, Onyx, the Debtor's 63-unit luxury condominium project, was not completed on time due to a number of issues and breaches of contract. The Debtor later decided that the property would be best utilized as a mixed use resort to include condominium fractional interest and boutique hotel. The Debtor received its certificate of occupancy on March 6, 2008. The final phase of finishing construction is estimated to be completed in early 2009. Plan Overview Pursuant to the Plan, the Debtor will offer individuals an opportunity to own up to a 1/12th fractional ownership in the Onyx. The Debtor will increase its amenity offerings by reconfiguring one of the 63 units as a boutique dining venue on site. The remaining units will be offered in a blend of the hotel condominium units and as fractional resort interests. The Plan divides the claims into 9 separate classes. The distributions to holders shall be in full satisfaction of their respective claims. All classes are impaired under the Plan and are entitled to vote to accept or reject the Plasn. Allowed Administrative Claim and Allowed Claims under Sec. 507(a), including allowances of of professional fees and costs and fees relating to the assumption and rejection of leases, shall be paid in full, in Cash. Class 1 consists of the Allowed Secured Claims of Clark County Property Tax. The Debtor will make equal quarterly payments over a 4-1/2 year period to commence 6 months after the Confirmation Date of the Plan. Class 2 consist of all Allowed Claims of Marshall Bank, the Debtor's primary lender. The Debtor will commence making monthly interest payments within 6 months from the Confirmation Date of the Plan. After one year, the Debtor will commence making interest and principal payments on the balance as if the payments were amortized over a 30 year period. At the end of 10 years, the Debtor will pay Marshall Bank in full through refinancing the project or through sales of the project. The interest rate on the note will be the non-default, contract rate under the original contract. Class 3 consists of all Allowed Claims of Summit Builders, the Debtor's general contractor for the Project. The Debtor will commence making interest payments at prime rate paid quarterly within 6 months from the Confirmation Date of the Plan. The Debtor will then make quarterly payments after one year, which will include interest at prime rate plus payments on the outstanding principal to be paid in full 60 months after the Confirmation Date. Class 4 consists of all Allowed Claims of RMCI. The Debtor will commence making interest payments at prime rate paid quarterly within 6 months from the Confirmation Dte of the Plan. The Debtor will then make quarterly payments after one year, which will include interest at prime rate plus payments on the outstanding principal to be paid in full 60 months after the Confirmation Date. Class 5 consists of all Allowed Claim of American Asphalt and Grading Co. The Debtor will commence making interest payments at prime rate paid quarterly within six (6) months from the Confirmation Date of the Plan. The Debtor will then make quarterly payments after one year, which will include interest at prime rate plus payments on the principal to be paid in full 60 months after the Confirmation Date. Class 6 consists of all Allowed Claims of Precision Concrete. The Debtor will commence making interest payments at prime rate paid quarterly within 6 months from the Confirmation Date. The Debtor will then make quarterly payments after one year, which will include interest at prime rate plus payments on the principal to be paid in full 60 months after the Confirmation Date. Class 7 consist of all Allowed Unsecured Claims less than $2,500 including Allowed Unsecured Claims for goods and services provided to the Debtor before the Petition Date, Allowed Unsecured Claims for breach of contract or rejection of executory contracts and unexpired leases, Allowed Unsecured Claims for damages, and Allowed Unsecured Claims in respect of the deficiency Claims of the creditors except as classified above. The Class 7 Allowed Unsecured Claimants will be paid in full 6 months from the Confirmation Date. Class 8 consists of all Allowed Unsecured Claims including Allowed Unsecured Claims for goods and services provided to the Debtor before the Petition Date, Allowed Unsecured Claims for breach of contract or rejection of executory contracts and unexpired leases, Allowed Unsecured Claims for damages, and Allowed Unsecured Claims in respect of the deficiency Claims of the creditors except as classified above. The Debtor will commence making quarterly payments within 6 months after the Confirmation Date. The payment will be in equal payments paid quarterly for 60 months until the Allowed Claim is paid in full. Class 9 consist of the Member Interests in the Debtors. The Holders of the Membership Interests shall retain their interest and their rights shall reinvest upon an order approving the Plan of Reorganization. The Debtors believe that the Plan provides the greatest possible recovery to all creditors and interest holders, and that the value of the property to be received under the Plan by each holder of an Allowed Claim is equal to or in excess of any value such holder would receive under Chapter 7 of the Bankruptcy Code. A full-text copy of Tropicana Inn Investors, LLC's Chapter 11 Plan of Reorganization is available for free at: http://researcharchives.com/t/s?362c A full-text copy of Tropicana Inn Investors, LLC's Disclosure Statement explaining its Chapter 11 Plan of Reorganization is available for free at: http://researcharchives.com/t/s?362d About Tropicana Inn Investors Las Vegas, Nevada-based Tropicana Inn Investors, LLC is the developer of Onyx, a 63-unit luxury condominium project in Las Vegas, Nevada. The $28 million mid-rise project was announced in 2005 as an affordable alternative to the high rises that were being constructed near the Strip. Units at Onyx ranged from 740 square feet to 2,300 square feet and were priced from $400,000 to more than $900,000. On Aug. 4, 2008, seven (7) creditors filed an involuntary petition for Chapter 11 relief against the Debtor (Bankr. D. Nev. Case No. 08-18719). David E. Doxey, Esq., and David J. Winterton, Esq., at David J. Winterton & Assoc., Ltd. represent the Debtor as counsel. TRW AUTOMOTIVE: Fitch Puts Issuer Default Rating on WatchNeg. ------------------------------------------------------------- Fitch Ratings has placed the Issuer Default Ratings of the U.S. auto suppliers listed below on Rating Watch Negative, based on the impact of a potential bankruptcy filing by General Motors (and Fitch's view that this would be followed by a bankruptcy at Ford). Given its smaller profile, it is unlikely that a bankruptcy filing by Chrysler would have the same impact. Industry bankruptcies could result from either the failure of the auto legislation currently under consideration in the U.S. Congress, or the failure of the Detroit Three to develop viable restructuring plans in the several months prior to the expiration of the bridge loans included in the current legislation. In 2009, auto suppliers are already facing a steep global downturn in auto production, including a deeply depressed production forecast in the U.S. and Europe. In the event of a General Motors bankruptcy, Fitch believes that the resulting contraction in auto production, the supply chain, trade credit and capital-access would cause widespread shutdowns and bankruptcies throughout the supply chain. Given the cliff-risk nature of the risks involved, Fitch has tried to detail below the extent of the potential rating actions that would be taken in the event of a GM bankruptcy. In any event, Fitch will continue to take individual rating actions in the sector as events unfold over the next several weeks and months. Fitch notes that even if the OEMs avoid bankruptcy, major restructurings of their operations will occur, causing material changes in the operations of their Tier I suppliers. These restructurings could also lead to ratings actions, providing further rationale for placing these suppliers on Rating Watch Negative. The auto suppliers placed or remain on Rating Watch Negative and the ratings most likely to result in the event of a GM bankruptcy are: Companies Current IDR/Prospective IDR -- American Axle 'B'/'CC'; -- ArvinMeritor 'B'/CCC'; -- Hayes-Lemmerz 'B'/CCC'; -- Johnson Controls 'A-'/'BBB+'; -- Tenneco 'BB-/B-'; -- TRW 'BB'/'B-'; -- Visteon 'CCC'/'CC' -- Companies not included in the rating actions: -- Cummins 'BBB+'; -- Goodyear 'BB-'; -- Navistar 'BB-' Despite improved diversification by most Tier 1 suppliers, across manufacturers, geographies and product lines, the decline in supplier revenues and operating cash flow through 2009 resulting from a GM bankruptcy would likely produce covenant violations across the vast majority of suppliers. Of equal concern, Tier 2 and three suppliers are likely to experience widespread bankruptcies through loss of volume, lack of receivables financing, and restricted financial and trade credit. Fitch expects that a collapse of trade credit throughout the supply chain would put at risk the domestic operations of these suppliers, as well as their financial viability. TRW and Tenneco remain better positioned given their global operations, but Fitch expects that these two companies, at a minimum, would require renegotiations with their bank group. Ratings on Rating Watch Negative are: American Axle & Manufacturing Holdings, Inc. -- IDR 'B'; American Axle & Manufacturing, Inc -- IDR 'B'; ArvinMeritor -- IDR 'B'; -- Secured 'BB'; -- Senior unsecured 'B/RR4'. Hayes-Lemmerz International, Inc -- IDR 'B'. Hayes-Lemmerz Finance Luxembourg S.A -- IDR 'B'; -- Senior unsecured 'B-/RR5'; -- Senior secured 'BB/RR1'. HLI Operating Company Inc. -- IDR 'B'; -- Senior secured 'BB/RR1'. Johnson Controls -- IDR 'A-'. York International -- IDR 'A-'. Tenneco -- IDR 'BB-'; -- Senior unsecured 'BB-'; -- Subordinated 'B'; -- Senior secured notes 'BB'; -- Senior secured credit facilities 'BB+'. TRW Automotive Holdings Corp -- IDR 'BB'. TRW Automotive, Inc -- IDR 'BB'; -- Secured 'BB+'; -- Senior unsecured 'BB-'. Visteon Corp -- IDR 'CCC'; -- Senior secured 'B/RR1'; -- senior unsecured 'CC/RR6'. TRW AUTOMOTIVE HOLDINGS: Fitch Puts IDR on Negative Watch --------------------------------------------------------- Fitch Ratings has placed the Issuer Default Ratings of the U.S. auto suppliers listed below on Rating Watch Negative, based on the impact of a potential bankruptcy filing by General Motors (and Fitch's view that this would be followed by a bankruptcy at Ford). Given its smaller profile, it is unlikely that a bankruptcy filing by Chrysler would have the same impact. Industry bankruptcies could result from either the failure of the auto legislation currently under consideration in the U.S. Congress, or the failure of the Detroit Three to develop viable restructuring plans in the several months prior to the expiration of the bridge loans included in the current legislation. In 2009, auto suppliers are already facing a steep global downturn in auto production, including a deeply depressed production forecast in the U.S. and Europe. In the event of a General Motors bankruptcy, Fitch believes that the resulting contraction in auto production, the supply chain, trade credit and capital-access would cause widespread shutdowns and bankruptcies throughout the supply chain. Given the cliff-risk nature of the risks involved, Fitch has tried to detail below the extent of the potential rating actions that would be taken in the event of a GM bankruptcy. In any event, Fitch will continue to take individual rating actions in the sector as events unfold over the next several weeks and months. Fitch notes that even if the OEMs avoid bankruptcy, major restructurings of their operations will occur, causing material changes in the operations of their Tier I suppliers. These restructurings could also lead to ratings actions, providing further rationale for placing these suppliers on Rating Watch Negative. The auto suppliers placed or remain on Rating Watch Negative and the ratings most likely to result in the event of a GM bankruptcy are: Companies Current IDR/Prospective IDR -- American Axle 'B'/'CC'; -- ArvinMeritor 'B'/CCC'; -- Hayes-Lemmerz 'B'/CCC'; -- Johnson Controls 'A-'/'BBB+'; -- Tenneco 'BB-/B-'; -- TRW 'BB'/'B-'; -- Visteon 'CCC'/'CC' -- Companies not included in the rating actions: -- Cummins 'BBB+'; -- Goodyear 'BB-'; -- Navistar 'BB-' Despite improved diversification by most Tier 1 suppliers, across manufacturers, geographies and product lines, the decline in supplier revenues and operating cash flow through 2009 resulting from a GM bankruptcy would likely produce covenant violations across the vast majority of suppliers. Of equal concern, Tier 2 and three suppliers are likely to experience widespread bankruptcies through loss of volume, lack of receivables financing, and restricted financial and trade credit. Fitch expects that a collapse of trade credit throughout the supply chain would put at risk the domestic operations of these suppliers, as well as their financial viability. TRW and Tenneco remain better positioned given their global operations, but Fitch expects that these two companies, at a minimum, would require renegotiations with their bank group. Ratings on Rating Watch Negative are: American Axle & Manufacturing Holdings, Inc. -- IDR 'B'; American Axle & Manufacturing, Inc -- IDR 'B'; ArvinMeritor -- IDR 'B'; -- Secured 'BB'; -- Senior unsecured 'B/RR4'. Hayes-Lemmerz International, Inc -- IDR 'B'. Hayes-Lemmerz Finance Luxembourg S.A -- IDR 'B'; -- Senior unsecured 'B-/RR5'; -- Senior secured 'BB/RR1'. HLI Operating Company Inc. -- IDR 'B'; -- Senior secured 'BB/RR1'. Johnson Controls -- IDR 'A-'. York International -- IDR 'A-'. Tenneco -- IDR 'BB-'; -- Senior unsecured 'BB-'; -- Subordinated 'B'; -- Senior secured notes 'BB'; -- Senior secured credit facilities 'BB+'. TRW Automotive Holdings Corp -- IDR 'BB'. TRW Automotive, Inc -- IDR 'BB'; -- Secured 'BB+'; -- Senior unsecured 'BB-'. Visteon Corp -- IDR 'CCC'; -- Senior secured 'B/RR1'; -- senior unsecured 'CC/RR6'. TUBE CITY: Moody's Places 'B1' CFR Under Review for Likely Cut -------------------------------------------------------------- Moody's Investors Service placed Tube City IMS Corporation's ratings (corporate family rating B1) under review for possible downgrade and downgraded its speculative grade liquidity rating to SGL-3 from SGL-2. The review was prompted by the substantive deterioration in steel markets and the potential impact on the company's performance and financial profile given its dependence on steel production volumes. Domestic capacity utilization for the steel industry has fallen to the 50% range from nearly 90% a few months ago as producers continue to reduce volumes through production curtailments and suspended operations. TCIMS's ratings reflect its sole dependence on sales to customers in the cyclical steel industry, predominantly in the U.S. While the company provides an array of services, much of its business is predicated on earning fees based on production volumes. Further, customer concentration is high, and the loss of any large customer or contracts could have a major impact on TCIMS's ratings. The review will focus on industry conditions and the strategy TCIMS will implement to deal with a period of weakness in the steel industry. The review will also incorporate an assessment of the company's ability to maintain adequate liquidity to support operations, and its ability to maintain credit metrics reflective of a B1 corporate family rating. The ratings could be downgraded if Moody's expects that EBITDA will be unable to cover interest, working capital, and maintenance capital spending for a sustained period, if leverage were expected to rise materially, if available liquidity were to deteriorate substantially, or in the event of loss of significant customers or contracts. The downgrade of the speculative grade liquidity rating to SGL-3 from SGL-2 reflects an expected deterioration in TCIMS's liquidity profile. Declining steel production is expected to result in significantly reduced availability under the company's asset-based revolving credit facility. While Moody's expects that TCIMS should continue generating positive cash flow from operations, it may be insufficient to cover up-front capital expenditures necessary for new contract awards. The SGL-3 is supported by the recently announced $50 million capital commitment ($10 million of which Moody's understands has already been invested into TCIMS) from the company's private equity sponsor, Onex Partners II L.P., which should boost total available liquidity. However, Moody's notes that the account established for the commitment resides at a legal entity outside of TCIMS's legal organizational structure and Moody's understand that the commitment letter expires at the end of February 2009. Beyond February 2009, the length of time during which the company may request access to the proceeds remains uncertain. These ratings were impacted by this action: - Corporate Family Rating of B1 Placed Under Review for Possible Downgrade - Probability of Default Rating of B1 Placed Under Review for Possible Downgrade - Senior Subordinate Note Rating of B3 (LGD 5; 82%) Placed Under Review for Possible Downgrade - Senior Secured Letter of Credit Facility Rating of Ba3 (LGD 3; 35%) Placed Under Review for Possible Downgrade - Senior Secured Term Loan Rating of Ba3 (LGD 3; 35%) Placed Under Review for Possible Downgrade - SGL Rating lowered to SGL-3 from SGL-2 The prior rating action for Tube City IMS was on December 12, 2006, when Moody's assigned a B1 corporate family rating. Tube City IMS Corporation's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of Tube City IMS's core industry and Tube City IMS's ratings are believed to be comparable to those of other issuers of similar credit risk. Tube City IMS Corporation, headquartered in Glassport, Pennsylvania, is a leading provider of on-site steel mill services such as material handling, scrap management, metal recovery and slag processing. Its sales for the 12 months ended September 30, 2008, were approximately $3 billion, and revenue net of the cost of scrap shipments was approximately $475 million. TWEETER OPCO: Court Appoints George L. Miller as Ch. 7 Trustee -------------------------------------------------------------- George L. Miller from the accounting firm Miller Coffey Tate has been appointed to serve as interim trustee of the Chapter 7 proceedings of Tweeter Opco, LLC, and its affiliates. Judge Mary Walrath of the U.S. Bankruptcy Court for the District of Delaware has converted the Opco Debtors' Chapter 11 cases to Chapter 7 liquidation proceedings effective as of December 5, 2008. The Court directs the Opco Debtors to: (a) surrender to the Chapter 7 trustee all records and property of their estates pursuant to Rule 1019(4) of the Federal Rules of Bankruptcy Procedure; (b) file a schedule of unpaid debts incurred after the Petition Date, including the name and address of each Creditor, by December 20, 2008; (c) file Statements of Financial Affairs and Schedules of Assets and Liabilities by December 20, 2008; (d) file and transmit to the Office of the United States Trustee a final report and account as required by Bankruptcy Rule 1019(5)(A) by January 4, 2009; and (e) have their representative appear at the first meeting of creditors pursuant to Sections 341(a) and 343 of the Bankruptcy Code; and have that representative available to testify at that meeting. Judge Walrath orders all professionals employed by the Opco Debtors and the Official Committee of Unsecured Creditors in the Opco Debtors' Chapter 11 cases to, no later than January 19, 2008, file final fee applications for approval of all fees and expenses incurred. The terms of the Court's Utility Order will continue to apply to all providers of utility services, Judge Walrath clarifies. The Debtors are also directed to pay all accrued but unpaid postpetition obligations identified on the budget related to the Interim DIP Order incurred and accrued from the Petition Date through December 1, 2008. In the event the Debtors cannot complete the payment of those obligations, the Chapter 7 trustee appointed in the Opco Debtors' cases is authorized to use Cash Collateral to make all remaining payments as soon as possible. The Opco Debtors have represented to the Court, as certified by their counsel, that they have paid (i) accrued but unpaid postpetition December 2008 lease obligations for all lease locations that were not previously rejected, (ii) all accrued but unpaid obligations to employees for postpetition wages, commissions and payroll related taxes, (iii) $1,324,622, representing approximately 75% of the total owed for payment of fees and expenses incurred by their liquidation consultant, a joint venture comprised of SB Capital Group, LLC, Tiger Capital Group, LLC and Hudson Capital Partners, LLC, and (iv) a portion of the sales and use taxes. In accordance with the terms of the DIP Credit Agreement, after payment of all amounts required to be paid, Wells Fargo Retail Finance LLC, as administrative agent of the Opco Debtors' DIP Credit Agreement, is directed to create a reserve for contingent indemnification claims consisting of all remaining Cash Collateral and all Cash Collateral thereafter collected. The rights of all parties regarding that reserve are fully reserved. Wells Fargo is also directed to fund the professional carve out provided in the DIP Credit Agreement and the Interim DIP order of: (i) $575,000 for fees and expenses incurred by the Opco Debtors' bankruptcy professionals; and (ii) $225,000 for the fees and expenses of the Creditors Committee's attorneys and financial advisors and expenses of the Committee members. The Carve-Out will be held in a Richards, Layton & Finger, P.A. escrow account. The Prepetition First Lien Secured Parties' and the Second Lien Holders' interests in the Carve Out will be subordinate to the interests of the case professionals and Committee members in the Opco Debtors' Chapter 11 cases. Moreover, Judge Walrath directs Wells Fargo to release from the Opco Debtors' deposit account, $1,324,622 for payment of fees and expenses incurred by the Opco Debtors' liquidation consultants. The payment is subject to the Chapter 7 Trustee's right to seek disgorgement of the amounts paid to the Liquidation Consultants in excess of amounts due pursuant to the consulting agreement. Court Requires Creditor/Noticing Info From Epiq In light of the conversion of the Opco Debtors' cases into Chapter 7 liquidation proceedings, the Court directs the Opco Debtors' counsel, Richards, Layton & Finger, P.A., in coordination with Epiq Bankruptcy Solutions LLC, as the Opco Debtors' claims agent, to provide it no later than December 15, 2008, with: (i) an updated list of creditors in .txt format as specified in the Bankruptcy Clerk's Instructions and Guidelines; (ii) an updated Bankruptcy Rule 2002 notice list in .txt format; (iii) an updated claims register in paper and .pdf format; and (iv) a list of all original claims. Upon compliance of these provisions, Epiq will be released from any responsibilities it may have in the Opco Debtors' cases. About Tweeter Opco Tweeter Opco, LLC, was formed in July 2007 to acquire the business operations and assets of Tweeter Home Entertainment Group, Inc. The company filed for Chapter 11 protection on Nov. 5, 2008 (Bankr. D. Delaware Case No. 08-12646). Chun I. Jang, Esq., and Cory D. Kandestin, Esq., at Richards, Layton & Finger, P.A., assisted the company in its restructuring effort. The company listed assets of $50 million to $100 million and debts of $50 million to $100 million. Judge Mary Walrath of the U.S. Bankruptcy Court for the District of Delaware converted the Opco Debtors' Chapter 11 cases to Chapter 7 liquidation proceedings effective as of December 5, 2008. (Tweeter Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). TWEETER OPCO: Closes Stores; Trustee Seeks Clearance Sales ---------------------------------------------------------- Tweeter Opco stores abruptly closed their doors in early December 2008, displacing more than 600 employees at 70 store locations across the U.S., The Boston Globe reported. The closure was executed just around the time Tweeter Opco sought a conversion of its bankruptcy cases into proceedings under Chapter 7 of the Bankruptcy Code. According to The Boston Globe, the displaced Tweeter employees are owed at least one week's pay, vacation time, and hundreds of dollars in bonuses promised as part of the store winding down sales. Certain fire employees are planning to file complaints with the Massachusetts attorney general's office, Reuters noted in a separate report. Subsequently, Judge Walrath authorized Tweeter Opco to liquidate its assets under Chapter 7 effective as of December 5, 2008. In other news, the newly appointed interim Chapter 7 trustee for Tweeter Opco's cases are in talks for a re-opening of the Tweeter stores for one last clearance sale before the year ends, TWICE.com relates. "I'm just trying to open the stores for another week to ten days and close up around Christmas," TWICE.com quoted the Interim Chapter 7 Trustee George Miller as saying. "There's no deal yet, but hopefully there will be." The Company's liquidation consultants had previously estimated remaining assets in the stores to aggregate roughly $14 million. Mr. Miller also told TWICE.com that he is trying to negotiate and address the matter on unpaid store employee compensation. About Tweeter Opco Tweeter Opco, LLC, was formed in July 2007 to acquire the business operations and assets of Tweeter Home Entertainment Group, Inc. The company filed for Chapter 11 protection on Nov. 5, 2008 (Bankr. D. Delaware Case No. 08-12646). Chun I. Jang, Esq., and Cory D. Kandestin, Esq., at Richards, Layton & Finger, P.A., assisted the company in its restructuring effort. The company listed assets of $50 million to $100 million and debts of $50 million to $100 million. Judge Mary Walrath of the U.S. Bankruptcy Court for the District of Delaware converted the Opco Debtors' Chapter 11 cases to Chapter 7 liquidation proceedings effective as of December 5, 2008. (Tweeter Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). TWEETER OPCO: Ch. 7 Trustee Seeks to Retain Dilworth as Counsel --------------------------------------------------------------- George Miller, as interim trustee of the Chapter 7 proceedings of Tweeter Opco, LLC, and its affiliates, seeks the U.S. Bankruptcy Court for the District of Delaware's authority to retain Dilworth Paxson LLP as his counsel pursuant to Sections 327 and 328 of the Bankruptcy Code, nunc pro tunc to December 4, 2008. As counsel to the Chapter 7 Interim Trustee, Dilworth will: (a) provide legal advice with respect to Mr. Miller's powers and duties; (b) prepare necessary applications, pleadings, briefs, memoranda and other documents and reports; (c) represent Mr. Miller at all hearings and adversary proceedings; (d) represent Mr. Miller in his dealings with the estates' creditors; and (e) perform all other legal services. According to Mr. Miller, Dilworth has not received any payments from the Opco Debtors' bankruptcy estates in the 90 days prior to the Petition Date. Mr. Miller propose that Dilworth's services be paid based on the firm's hourly rates: Partners $355-$675 Associates $200-$290 Paralegals $120-$130 Moreover, Mr. Miller propose that Dilworth be reimbursed actual and necessary expenses it incurred or incurs, including telephone, photocopying, travel, business meals, computerized research, messengers, couriers, postage, and witness fees. Peter C. Hughes, a partner of Dilworth Paxson LLP, assures the Court that his firm does not have interest adverse to the estate in the matters in which it is to be engaged. About Tweeter Opco Tweeter Opco, LLC, was formed in July 2007 to acquire the business operations and assets of Tweeter Home Entertainment Group, Inc. The company filed for Chapter 11 protection on Nov. 5, 2008 (Bankr. D. Delaware Case No. 08-12646). Chun I. Jang, Esq., and Cory D. Kandestin, Esq., at Richards, Layton & Finger, P.A., assisted the company in its restructuring effort. The company listed assets of $50 million to $100 million and debts of $50 million to $100 million. Judge Mary Walrath of the U.S. Bankruptcy Court for the District of Delaware converted the Opco Debtors' Chapter 11 cases to Chapter 7 liquidation proceedings effective as of December 5, 2008. (Tweeter Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). UNIFUND ASSURANCE: A.M. Best Upgrades FSR to "B" from "C+" ---------------------------------------------------------- A.M. Best Co. affirmed on December 4, 2008, the financial strength ratings (FSR) of A- (Excellent) and issuer credit ratings (ICR) of "a-" of Royal & Sun Alliance Insurance Company of Canada (RSA Canada) and Quebec Assurance Company (Quebec Assurance) (Quebec, Canada). A.M. Best also has upgraded the FSR to A- (Excellent) from B++ (Good) and ICR to "a-" from "bbb" of Western Assurance Company (Western Assurance) (Toronto, Canada). Together these members are known as RSA Group of Canada. In addition, A.M. Best has affirmed the FSR of B+ (Good) and ICR "bbb-" of Ascentus Insurance Ltd. (Ascentus) (Toronto, Canada). Additionally, A.M Best has upgraded the FSR to B (Fair) from C+ (Marginal) and ICR to "bb" from "b-" of Unifund Assurance Company (Unifund) (St. John's, Canada). Canadian Northern Shield Insurance Company (CNS) (Vancouver, Canada) formerly had a Best's public data (pd) rating when under a prior owner; however, now it has an interactive FSR of B (Fair) and ICR of "bb+". The outlook for all ratings is stable. The rating actions of RSA Canada, Quebec Assurance and Western Assurance reflect A.M. Best's viewpoint that the group maintains strong risk-adjusted capitalization, solid investment income and sound reserve development. The group has produced solid underwriting results, which have consistently increased equity over the last five years. Collectively, the group provides commercial property and casualty coverage as well as personal and specialty coverages throughout Canada. The companies' maintain a presence in all of the Canadian provinces and distribute their product range through multiple distribution channels, including a large independent broker network. The ratings of Ascentus are based on its solid level of capitalization, which supports its underwriting and investment risk. The level of premium volume has sharply declined in recent years, since all private passenger auto and personal property business was renewed into RSA Canada. The upgrades of Unifund's FSR and ICR are based on its improved risk-adjusted capitalization, consistent operating performance and favorable reserve development. Historically, Unifund has been a growth vehicle for the overall Canadian organization. In prior years, rapid premium expansion outpaced equity growth, which resulted in elevated underwriting leverage measures and a sharp decline in overall risk-adjusted capitalization. More recently, premium levels have stabilized, equity has increased and overall risk-adjusted capitalization has improved. The company primarily is a writer of personal lines insurance for associations and groups throughout Ontario, Alberta, Newfoundland and Labrador and Nova Scotia. The ratings of CNS reflect its elevated underwriting leverage, high underwriting expenses and adequate operating performance. The acquisition of CNS affords RSA Canada improved geographic diversity, increased distribution and growth opportunities within British Columbia where a majority of its premiums are written. CNS is licensed to offer several different products, which include personal property, commercial property, liability and auto. Going forward, A.M. Best remains concerned about softening market conditions, fierce competition and the long-term benefits of regulated product reforms to auto insurance in the core operating territories of Ontario and Alberta. As a result, all RSA Canada companies will be challenged to maintain current levels of profitability. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. UNIVERSAL AMERICAN: A.M. Best Affirms "bb" Issuer Default Rating ---------------------------------------------------------------- A.M. Best Co. affirmed on December 3, 2008, most of the financial strength ratings and issuer credit ratings (ICR) of Universal American Corp.'s (Universal American) (Rye Brook, NY) [NYSE: UAM] primary insurance subsidiaries. A.M. Best also affirmed the ICR of "bb" and all debt ratings on the shelf registration of Universal American. The outlook for these ratings is negative. The rating affirmations reflect Universal American's improved statutory operating results and growing regional presence in the senior health insurance market. During 2007, Universal American acquired MemberHealth, Inc., a privately-held pharmacy benefits manager and sponsor of CCRx, a national Medicare Part D Plan. Over the past few years, Universal American has significantly grown its Medicare Advantage private fee for service (PFFS) and prescription part D (PDP) business. With the change in federal Medicare regulations earlier in 2008, which will take effect in a couple of years, Universal American has a fairly limited time to build its Medicare Advantage Preferred Provider Organization (PPO) networks. A.M. Best believes this will be a challenge for Universal American to accomplish in targeted markets. Additionally, the organization's future earnings will be negatively impacted by future cuts to Medicare Advantage reimbursement rates. With the current economic conditions, A.M. Best also does not take a positive view of the company's continued activity in its stock buyback program. Many insurance companies have suspended their repurchase programs in order to conserve their cash positions. On December 1, 2008, Universal American announced it is reinsuring its life insurance and annuity segment to Commonwealth Annuity and Life Insurance Company, a subsidiary of Goldman Sachs, for an after tax statutory profit of $55-60 million. This business is currently spread out among Universal American's subsidiaries. A.M. Best anticipates that proceeds from the divestiture will be used to strengthen the capital position of several operating subsidiaries that have been rapidly growing. While the life and annuity segment was not core to the organization, it did represent some diversification for Universal American, which is very reliant on heavily regulated Medicare products. The negative outlook for most of the subsidiaries' ratings reflects the significant recent and projected growth at the subsidiaries and their ability to maintain adequate capitalization for their current ratings. With the recently announced reinsurance agreement, A.M. Best believes Universal American will have adequate overall statutory capital for its ratings. However, an unexpected deviation from the company's projections could change A.M. Best's view. The outlook for the ratings of the remaining subsidiaries is stable. Concurrently, A.M. Best has assigned an FSR of B (Good) and an ICR of "bb+" to GlobalHealth, Inc. (GlobalHealth) (Oklahoma). The outlook for both ratings is stable. The company is a Medicare Advantage HMO that has generated rapid recent membership growth. Additionally, A.M. Best has downgraded the FSR to B+ (Good) from B++ (Good) and ICR to "bbb-" from "bbb" of Constitution Life Insurance Company (Constitution Life) (Texas), and revised the outlook to stable from negative. Constitution Life's health insurance premiums have trended downward in recent years, which is not representative of a core operating subsidiary. . Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. VISTEON CORP: Fitch Puts Issuer Default Rating on WatchNeg. ----------------------------------------------------------- Fitch Ratings has placed the Issuer Default Ratings of the U.S. auto suppliers listed below on Rating Watch Negative, based on the impact of a potential bankruptcy filing by General Motors (and Fitch's view that this would be followed by a bankruptcy at Ford). Given its smaller profile, it is unlikely that a bankruptcy filing by Chrysler would have the same impact. Industry bankruptcies could result from either the failure of the auto legislation currently under consideration in the U.S. Congress, or the failure of the Detroit Three to develop viable restructuring plans in the several months prior to the expiration of the bridge loans included in the current legislation. In 2009, auto suppliers are already facing a steep global downturn in auto production, including a deeply depressed production forecast in the U.S. and Europe. In the event of a General Motors bankruptcy, Fitch believes that the resulting contraction in auto production, the supply chain, trade credit and capital-access would cause widespread shutdowns and bankruptcies throughout the supply chain. Given the cliff-risk nature of the risks involved, Fitch has tried to detail below the extent of the potential rating actions that would be taken in the event of a GM bankruptcy. In any event, Fitch will continue to take individual rating actions in the sector as events unfold over the next several weeks and months. Fitch notes that even if the OEMs avoid bankruptcy, major restructurings of their operations will occur, causing material changes in the operations of their Tier I suppliers. These restructurings could also lead to ratings actions, providing further rationale for placing these suppliers on Rating Watch Negative. The auto suppliers placed or remain on Rating Watch Negative and the ratings most likely to result in the event of a GM bankruptcy are: Companies Current IDR/Prospective IDR -- American Axle 'B'/'CC'; -- ArvinMeritor 'B'/CCC'; -- Hayes-Lemmerz 'B'/CCC'; -- Johnson Controls 'A-'/'BBB+'; -- Tenneco 'BB-/B-'; -- TRW 'BB'/'B-'; -- Visteon 'CCC'/'CC' -- Companies not included in the rating actions: -- Cummins 'BBB+'; -- Goodyear 'BB-'; -- Navistar 'BB-' Despite improved diversification by most Tier 1 suppliers, across manufacturers, geographies and product lines, the decline in supplier revenues and operating cash flow through 2009 resulting from a GM bankruptcy would likely produce covenant violations across the vast majority of suppliers. Of equal concern, Tier 2 and three suppliers are likely to experience widespread bankruptcies through loss of volume, lack of receivables financing, and restricted financial and trade credit. Fitch expects that a collapse of trade credit throughout the supply chain would put at risk the domestic operations of these suppliers, as well as their financial viability. TRW and Tenneco remain better positioned given their global operations, but Fitch expects that these two companies, at a minimum, would require renegotiations with their bank group. Ratings on Rating Watch Negative are: American Axle & Manufacturing Holdings, Inc. -- IDR 'B'; American Axle & Manufacturing, Inc -- IDR 'B'; ArvinMeritor -- IDR 'B'; -- Secured 'BB'; -- Senior unsecured 'B/RR4'. Hayes-Lemmerz International, Inc -- IDR 'B'. Hayes-Lemmerz Finance Luxembourg S.A -- IDR 'B'; -- Senior unsecured 'B-/RR5'; -- Senior secured 'BB/RR1'. HLI Operating Company Inc. -- IDR 'B'; -- Senior secured 'BB/RR1'. Johnson Controls -- IDR 'A-'. York International -- IDR 'A-'. Tenneco -- IDR 'BB-'; -- Senior unsecured 'BB-'; -- Subordinated 'B'; -- Senior secured notes 'BB'; -- Senior secured credit facilities 'BB+'. TRW Automotive Holdings Corp -- IDR 'BB'. TRW Automotive, Inc -- IDR 'BB'; -- Secured 'BB+'; -- Senior unsecured 'BB-'. Visteon Corp -- IDR 'CCC'; -- Senior secured 'B/RR1'; -- senior unsecured 'CC/RR6'. YORK INT'L: Fitch Puts Issuer Default Rating on WatchNeg. --------------------------------------------------------- Fitch Ratings has placed the Issuer Default Ratings of the U.S. auto suppliers listed below on Rating Watch Negative, based on the impact of a potential bankruptcy filing by General Motors (and Fitch's view that this would be followed by a bankruptcy at Ford). Given its smaller profile, it is unlikely that a bankruptcy filing by Chrysler would have the same impact. Industry bankruptcies could result from either the failure of the auto legislation currently under consideration in the U.S. Congress, or the failure of the Detroit Three to develop viable restructuring plans in the several months prior to the expiration of the bridge loans included in the current legislation. In 2009, auto suppliers are already facing a steep global downturn in auto production, including a deeply depressed production forecast in the U.S. and Europe. In the event of a General Motors bankruptcy, Fitch believes that the resulting contraction in auto production, the supply chain, trade credit and capital-access would cause widespread shutdowns and bankruptcies throughout the supply chain. Given the cliff-risk nature of the risks involved, Fitch has tried to detail below the extent of the potential rating actions that would be taken in the event of a GM bankruptcy. In any event, Fitch will continue to take individual rating actions in the sector as events unfold over the next several weeks and months. Fitch notes that even if the OEMs avoid bankruptcy, major restructurings of their operations will occur, causing material changes in the operations of their Tier I suppliers. These restructurings could also lead to ratings actions, providing further rationale for placing these suppliers on Rating Watch Negative. The auto suppliers placed or remain on Rating Watch Negative and the ratings most likely to result in the event of a GM bankruptcy are: Companies Current IDR/Prospective IDR -- American Axle 'B'/'CC'; -- ArvinMeritor 'B'/CCC'; -- Hayes-Lemmerz 'B'/CCC'; -- Johnson Controls 'A-'/'BBB+'; -- Tenneco 'BB-/B-'; -- TRW 'BB'/'B-'; -- Visteon 'CCC'/'CC' -- Companies not included in the rating actions: -- Cummins 'BBB+'; -- Goodyear 'BB-'; -- Navistar 'BB-' Despite improved diversification by most Tier 1 suppliers, across manufacturers, geographies and product lines, the decline in supplier revenues and operating cash flow through 2009 resulting from a GM bankruptcy would likely produce covenant violations across the vast majority of suppliers. Of equal concern, Tier 2 and three suppliers are likely to experience widespread bankruptcies through loss of volume, lack of receivables financing, and restricted financial and trade credit. Fitch expects that a collapse of trade credit throughout the supply chain would put at risk the domestic operations of these suppliers, as well as their financial viability. TRW and Tenneco remain better positioned given their global operations, but Fitch expects that these two companies, at a minimum, would require renegotiations with their bank group. Ratings on Rating Watch Negative are: American Axle & Manufacturing Holdings, Inc. -- IDR 'B'; American Axle & Manufacturing, Inc -- IDR 'B'; ArvinMeritor -- IDR 'B'; -- Secured 'BB'; -- Senior unsecured 'B/RR4'. Hayes-Lemmerz International, Inc -- IDR 'B'. Hayes-Lemmerz Finance Luxembourg S.A -- IDR 'B'; -- Senior unsecured 'B-/RR5'; -- Senior secured 'BB/RR1'. HLI Operating Company Inc. -- IDR 'B'; -- Senior secured 'BB/RR1'. Johnson Controls -- IDR 'A-'. York International -- IDR 'A-'. Tenneco -- IDR 'BB-'; -- Senior unsecured 'BB-'; -- Subordinated 'B'; -- Senior secured notes 'BB'; -- Senior secured credit facilities 'BB+'. TRW Automotive Holdings Corp -- IDR 'BB'. TRW Automotive, Inc -- IDR 'BB'; -- Secured 'BB+'; -- Senior unsecured 'BB-'. Visteon Corp -- IDR 'CCC'; -- Senior secured 'B/RR1'; -- senior unsecured 'CC/RR6'. * A.M. Best Comments on U.S. Treasury's Capital Purchase Program ---------------------------------------------------------------- Several publicly-traded insurers have recently announced plans to apply for funds through the U.S. Treasury's Capital Purchase Program, prompting A.M. Best Co. to comment on the treatment of the securities to be issued. New issues under the program are to be comprised of senior preferred shares and warrants to purchase common shares. Insurers are expected to be subject to similar terms and issue limits previously announced for banks of between 1-3% of risk- based assets, up to a maximum of $25 billion. The senior preferred shares are expected to pay a cumulative dividend rate of 5% annually, with a reset to 9% annually after year five. Dividend interest is not tax deductible by the issuer. Additionally, the shares are callable at par after three years, or may be redeemed early through the issuance of common stock or perpetual preferred stock. However, after year three, there are no restrictions on the type of security that could be issued. Given these features, A.M. Best views these securities as intermediate-term in nature and not permanent securities, particularly given the increase in the dividend rate and certain operating restrictions to be imposed by the government. Moreover, A.M. Best believes that the medium-term nature of these securities exposes insurers to refinancing or repayment risk. A.M. Best will assign ratings to these securities using standard rating methodologies as these securities will be marketable based on the Treasury's right to transfer them to third parties. Additionally, A.M. Best will review each security on its own merit, including a review of the intended use of the proceeds and the terms of the issuance, which are likely to be substantially similar for all issuers. The senior preferreds are considered a hybrid security due to their equity-like characteristics. These securities may be eligible for equity credit of up to 50% in the organization's financial leverage calculation; with equity credit for hybrids subject to a cap of 20% of total capital. A.M. Best expects actual equity credit to fall closer to 25% in most cases due to the call feature and significant step-up in dividend rate after year five. The actual equity credit will be determined by the impact of the securities on the holding company and insurer financial statements, and will be reviewed on a case by case basis. The treatment is subject to change as the structure of the program appears fluid. A.M. Best notes that accessing the CPP adds regulatory oversight to insurers, by meeting the bank/thrift ownership requirement. Overall, A.M. Best believes that having access to government funds is prudent given the current turmoil in the capital markets. However, the features of the securities partially mitigate the positive impact on ratings. If A.M. Best believes that accessing CPP funds will satisfy an insurer's short- term liquidity needs and operating fundamentals are sound, A.M. Best would view favorably the use of proceeds to bolster the capital position of the insurance companies through direct capital contributions or the use of surplus notes. If A.M. Best believes the funds would be used as a stopgap measure to support a stressed capital position, the impact would be less favorable. Additionally, A.M. Best would evaluate the impact on the organization's risk profile of other potential uses of proceeds such as acquisitions or investments in high-risk asset classes. A.M. Best expects life insurers to be the major insurance participants in the CPP. Currently, A.M. Best maintains a negative rating outlook for the U.S. life/health insurance industry. While fundamentals for the vast majority of companies remain sound, uncertainty regarding the economy, real estate values, interest rates, equity markets -- both domestically and globally -- and liquidity will impact life/health insurers' balance sheet strength and operating performance in the near term. While A.M. Best does not typically react to short-term volatility, large reductions in capital or earnings will be viewed negatively, given the magnitude of capital market uncertainty and rising risks. Finally, A.M. Best will continue to evaluate each company's performance on an individual basis and react accordingly. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. * A.M. Best: Pressure Mounting on Canadian Life Insurance Market ---------------------------------------------------------------- A.M. Best Co. says Canadian life insurers are experiencing mounting pressures as the global financial crisis hampers their ability to maintain a conservative capital base as well as sustain the favorable revenue and earnings streams recorded in recent years. While the onset of the global financial crisis did not have an immediate effect on the Canadian economy, more recently, Canada has been impacted by the global economic downturn. This is evidenced by the sharp erosion in the value of the Canadian dollar, significant declines in the Toronto stock exchange (TSX) index, constricted lending practices and a worsening of overall economic conditions. While nearly all life insurers in Canada have been negatively impacted in some way by the financial turmoil, those entities with large exposure to equity markets -- either through segregated fund products or asset managers -- will be most affected. A.M. Best Co. notes that certain companies with exposure to these products have recently bolstered their capital position by issuing debt or equity at a time when liquidity is at a premium, resulting in less than optimal pricing. On the regulatory front, the Office of the Superintendent of Financial Institutions (OSFI) provided added flexibility for financial institutions issuing high quality preferred shares by allowing those securities to count as Tier 1 capital. As recently as September 2008, A.M. Best viewed the Canadian life industry as stable. While headwinds existed at that time, market conditions have since deteriorated significantly, although other economic metrics, such as unemployment, have remained relatively stable. From September 1 to December 1, 2008, the TSX declined approximately 37%, while the Canadian dollar lost approximately 14% of its value relative to the U.S. dollar. The global contagion has clearly impacted Canada's equity markets, as the resource- based economy has been battered by declining commodity prices in light of slowing global demand. This in turn has led to large net outflows in mutual funds and grim outlooks for equity-linked products. In light of the significant volatility in equity markets, OSFI revised its minimum capital rules for segregated fund guarantees (SFG). The revision sought to reduce volatility in capital requirements for such obligations. The revised rules for SFG may be adopted by insurers with approved internal capital models commencing yearend 2008 and is expected to reduce capital requirements for longer-term payment obligations while increasing this requirement as payment dates come closer. While A.M. Best recognizes that the implementation of lower capital requirements bolsters regulatory capital ratios, A.M. Best also considers the underlying fundamentals of weak equity markets. Most notably, lower fund values translate immediately into lower fee revenues. Longer term, guarantees that are "in the money" will result in payouts. Although the ultimate financial impact cannot be assessed at this time and remains largely dependent upon future stock market performance, A.M. Best expects the overall operating performance for companies with large exposures to deteriorate. In addition, while many Canadian life insurers employ thorough enterprise risk management (ERM) strategies, the effectiveness of these strategies are being tested under true stressed conditions for the first time. A.M. Best will continue to monitor the ERM programs employed by life companies in conjunction with the overall financial and operating performance experienced during the near to medium term. Although fundamentals for the vast majority of life companies are currently sound and the outlook is currently stable, A.M. Best believes that the unprecedented negative financial conditions globally will challenge Canadian life insurers well into 2009. Continued deterioration in economic fundamentals, which would lead to higher credit defaults, ongoing equity market volatility, lower consumer confidence and a resulting weakening of product sales, could lead to a negative outlook for the Canadian life industry. At this time, A.M. Best expects any negative rating actions to be company specific. However, continued macroeconomic deterioration would lead to a change in outlook and negative rating changes for the entire segment. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. * A.M. Best Says D&O Market Braces for Steep Downturn ----------------------------------------------------- The directors and officers liability insurance market appears headed for a sharp underwriting downturn beginning with 2008 results. Towers Perrin's D&O average premium index recorded overall decreases in years 2004 through 2007, and the 2007 survey suggests few business classes had average premium increases in 2007. -- A.M. Best Co. believes the D&O market has remained highly competitive in 2007 and 2008, and this, combined with significantly higher frequency and severity of claims, strongly suggests significant underwriting deterioration lies ahead for most D&O writers. -- The current subprime mortgage/credit crisis; a weakened global economy and substantial declines in the stock market are expected to drive frequency and severity. -- The broad reach of the subprime/credit crisis and the financial market meltdown may drive a surge of D&O claims beyond the financial services sector, which has been hardest hit so far. -- Some D&O insurers have better managed their exposure in recent years by reducing their coverage limits and lowering their emphasis on financial institutions and large public companies. -- The current cycle has more surplus capacity and more insurers with D&O underwriting skill, which may reduce the possibility of a crisis in D&O capacity. -- A.M. Best believes the adverse fundamentals currently affecting D&O loss costs are likely to cause calendar year underwriting results to deteriorate through at least 2009. -- D&O trends do not yet threaten the financial foundation of most market leaders because of their financial strength, diversification and historically conservative reserving. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. * Fitch Says U.S. Oil & Gas Credit Metrics to Fall in 2009 ---------------------------------------------------------- Fitch Ratings released its 2009 outlook for the North American oil & gas sector. According to the report, the outlook for the U.S. oil & gas industry in 2009 is stable but weaker due to the sharp drop in commodity prices. With the multi-year run-up in energy prices grinding sharply to a halt in the third quarter, credit metrics across the oil & gas sector are set to drop from their recent highs. As global economic conditions continue to deteriorate, risks for further downward movement in commodity prices remain possible as global demand for commodities is expected to continue to come under pressure. Fitch's stable outlook is not uniform across all sectors and credits within the oil & gas industry. In general, the offshore drillers within the drilling and services sector are best suited to weather the current downturn due to their large backlog of contracts signed during the earlier boom. In contrast, refiners are among the most exposed to the downturn as fuel sales and refinery utilization rates continue to slump in response to sinking global demand. Upstream oil companies present a mixed picture, with larger, more conservatively financed independents and integrateds well positioned to weather the downturn, but smaller, growth-oriented companies with higher external financing requirements are vulnerable to lower prices. The sharp drop in stock prices has also increased M&A event risk for bondholders across the sector, although this remains an issuer-specific risk. Summary of Sector Outlooks: -- Integrated Oil: Credit quality for the large, integrated oil companies remains relatively robust as these firms benefit from diverse upstream portfolios, large cash balances and low debt levels. Benefits from the pullback in commodity prices include lower costs for drilling rigs and services and access to both international and domestic reserves on more favorable terms. -- Independent E&P: Credit quality for independent exploration and production companies is expected to fall during 2009 as the focus of many E&P firms shifts to lowering costs and managing capital expenditures to live within internally generated cash flow levels. Larger independents with stronger balance sheets are expected to weather the current pull-back in commodity prices the best. -- Drilling and Service Companies: The drilling and service sectors outlook remains strong for 2009. Credit quality is supported by sizable revenue backlogs and continued drilling on long-term projects. That said, the significant decline in commodity prices is expected to have implications for the sector extending beyond 2009 that include reduced pricing power, lower costs stemming from falling steel prices and reduced wage expectations, and reduced utilization levels for fleets. -- Downstream: The near-term outlook for the downstream looks weak, driven by poor global demand, low capacity utilization, and the addition of near-term supply from several expansion projects, including the 580,000 barrels per day Jamnagar refinery in India. Fitch expects to see weaker credit metrics and further spending adjustments going forward. * Moody's Downgrades Ratings on 164 Notes by CDO Transactions ------------------------------------------------------------- Moody's Investors Service has downgraded its ratings of 164 Notes issued by certain collateralized debt obligation transactions backed by structured finance securities, each of which originated in 2007 or 2008. Moody's explained that the rating actions taken are the result of the application of revised and updated key modelling parameter assumptions that Moody's uses to rate and monitor ratings of SF CDOs. The revisions affect the three key parameters in Moody's model for rating SF CDOs: asset correlation, default probability and recovery rate. Moody's announced the changes to these assumptions in a press release on December 11, 2008. Moody's noted that most of the lowered ratings remain on review for possible downgrade due to the continuing weakness in the performance of and outlook for structured finance securities that back SF CDOs. Moody's anticipates that in the coming days it will announce additional rating actions applicable to SF CDOs of earlier vintages as the revised assumptions are applied to those transactions. The rating actions are: ABCDS 2006-1, Ltd. -- US$200,000,000 Senior Swap Agreement with Royal Bank of Canada, London Branch, Downgraded to Caa1 Under Review for Possible Downgrade; previously on 5/18/2008 B1 Placed Under Review for Possible Downgrade Acacia CDO 11, Ltd. -- US$398,000,000 Class A First Priority Senior Secured Floating Rate Notes Due 2047, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 7/17/2008 Caa1 Placed Under Review for Possible Downgrade Acacia CDO 12, Ltd. -- US$100,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due 2047, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 8/7/2008 Caa2 Placed Under Review for Possible Downgrade -- US$291,500,000 Class A-1 First Priority Senior Secured Floating Rate Notes Due 2047, Downgraded to Ba1 Under Review for Possible Downgrade; previously on 8/7/2008 Baa1 Placed Under Review for Possible Downgrade Adrastea SHG 2007-1, Ltd. -- US$1,600,000,000 Class A-1M Variable Funding Floating Rate Notes Due 2052, Downgraded to Ba3 Under Review for Possible Downgrade; previously on 5/29/2008 Baa3 Placed Under Review for Possible Downgrade Adrastea SHG 2007-1, Ltd. -- US$200,000,000 Class A-1Q Floating Rate Notes Due 2052, Downgraded to B2 Under Review for Possible Downgrade; previously on 5/29/2008 Ba2 Placed Under Review for Possible Downgrade -- US$30,000,000 Class A-4 Floating Rate Notes Due 2052, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 5/29/2008 B3 Placed Under Review for Possible Downgrade -- US$50,000,000 Class A-3 Floating Rate Notes Due 2052, Downgraded to Caa1 Under Review for Possible Downgrade; previously on 5/29/2008 B1 Placed Under Review for Possible Downgrade -- US$84,000,000 Class A-2 Floating Rate Notes Due 2052, Downgraded to B3 Under Review for Possible Downgrade; previously on 5/29/2008 Ba3 Placed Under Review for Possible Downgrade Altius IV Funding, Ltd. -- US$300,000 Class A-1V Floating Rate Notes Due 2042, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 10/28/2008 Caa2 Placed Under Review for Possible Downgrade -- US$644,850,000 Class A-1F Floating Rate Notes Due 2042, Downgraded to B2 Under Review for Possible Downgrade; previously on 10/28/2008 Ba2 Placed Under Review for Possible Downgrade AMP A CLO 2007-2 -- US$25,000,000 Credit Linked Notes, Downgraded to B2 Under Review for Possible Downgrade; previously on 8/28/2007 Assigned Ba2 AMP CDO 2007-2 -- US$100,000,000 Variable Notes, Downgraded to A3 Under Review for Possible Downgrade; previously on 6/28/2007 Assigned Aa3 Anderson Mezzanine Funding 2007-1, Ltd. -- US$2,490,000 Class S Floating Rate Notes due July 2013, Downgraded to B1 Under Review for Possible Downgrade; previously on 10/8/2008 Ba1 Placed Under Review for Possible Downgrade ARLO VII Series 2007-1 (SABS) -- EUR 21,000,000 Variable Secured Limited Recourse Credit- Linked Notes due 2047, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 4/24/2008 Downgraded to Caa2 Aurelius Capital CDO 2007-1 Limited -- US$13,500,000 Class E Secured Floating Rate Deferrable Interest Notes due 2052, Downgraded to B2 Under Review for Possible Downgrade; previously on 10/25/2007 Assigned Ba2 -- US$15,200,000 Class C Secured Floating Rate Deferrable Interest Notes due 2052, Downgraded to Baa2 Under Review for Possible Downgrade; previously on 10/25/2007 Assigned A2 Aurelius Capital CDO 2007-1 Limited -- US$18,000,000 Class D Secured Floating Rate Deferrable Interest Notes due 2052, Downgraded to Ba2 Under Review for Possible Downgrade; previously on 10/25/2007 Assigned Baa2 -- US$240,300,000 Class A Loan due 2052, Downgraded to Aa3 Under Review for Possible Downgrade; previously on 10/25/2007 Assigned Aaa Ballyrock ABS CDO 2007-1 Limited -- US$150,000,000 Class A-1a Variable Funding Senior Secured Floating Rate Notes Due 2047, Downgraded to Ba3 Under Review for Possible Downgrade; previously on 7/2/2008 Baa3 Placed Under Review for Possible Downgrade -- US$150,000,000 Class A-1b Senior Secured Floating Rate Notes Due 2047, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 7/2/2008 B3 Placed Under Review for Possible Downgrade -- US$17,000,000 Class S Senior Secured Notes Due 2014, Downgraded to Baa2 Under Review for Possible Downgrade; previously on 7/2/2008 A2 Placed Under Review for Possible Downgrade Barrington II CDO Ltd. -- US$13,400,000 Class X Floating Rate Notes Due 2052, Aaa Placed on Review for Possible Downgrade Under Review for Possible Downgrade; previously on 5/30/2007 Assigned Aaa Barrington II CDO Ltd. -- US$154,000,000 Class A-1S Floating Rate Notes Due 2052, Downgraded to B1 Under Review for Possible Downgrade; previously on 10/20/2008 Ba1 Placed Under Review for Possible Downgrade Bernoulli High Grade CDO II, Ltd. -- US$750,000,000 Class A-1A First Priority Senior Secured Floating Rate Notes due October 2054, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 10/1/2008 Caa2 Placed Under Review for Possible Downgrade Cairn Mezz ABS CDO III Limited -- US$148,000,000 Class A2B Senior Secured Floating Rate Notes Due 2047, Downgraded to Ca; previously on 5/21/2008 Caa1 Placed Under Review for Possible Downgrade -- US$550,000,000 Class A1-VF Senior Secured Floating Rate Notes Due 2047, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 5/21/2008 Baa2 Placed Under Review for Possible Downgrade -- US$75,000,000 Class A2A Senior Secured Floating Rate Notes Due 2047, Downgraded to Ca; previously on 5/21/2008 Ba3 Placed Under Review for Possible Downgrade C-Bass CBO XIX Ltd. -- A-1, Downgraded to B1 Under Review for Possible Downgrade; previously on 4/24/2008 Ba1 Placed Under Review for Possible Downgrade -- A-2, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 4/24/2008 Caa2 Placed Under Review for Possible Downgrade C-BASS CBO XVIII Ltd. -- US$150,000,000 Class A-2 First Priority Senior Secured Fixed Rate Notes Due 2047, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 4/22/2008 Caa2 Placed Under Review for Possible Downgrade -- US$346,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes Due 2047, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 4/22/2008 Caa2 Placed Under Review for Possible Downgrade Ceago ABS CDO 2007-1, Ltd. -- US$106,000,000 Class A-2 Floating Rate Notes Due 2047, Downgraded to Caa2 Under Review for Possible Downgrade; previously on 6/9/2008 B2 Placed Under Review for Possible Downgrade -- US$21,000,000 Class B Floating Rate Notes Due 2047, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 6/9/2008 B3 Placed Under Review for Possible Downgrade -- US$6,227,000 Class S Floating Rate Notes Due 2017, Downgraded to Baa1 Under Review for Possible Downgrade; previously on 6/9/2008 A1 Placed Under Review for Possible Downgrade -- US$850,000,000 Class A-1 Floating Rate Notes Due 2047, Downgraded to Ba2 Under Review for Possible Downgrade; previously on 6/9/2008 Baa2 Placed Under Review for Possible Downgrade Chalfont 2007-I Segregated Portfolio -- US$50,000,000 Floating Rate Notes Due 2046, Downgraded to Caa1 Under Review for Possible Downgrade; previously on 6/2/2008 Downgraded to B1 Charles Fort CDO I, Ltd. -- US$220,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes due July 9, 2047, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 4/22/2008 B3 Placed Under Review for Possible Downgrade Clifton I CDO, Ltd. -- US$1,200,000,000 Class A-1 First Priority Senior Secured Floating Rate Delayed Draw Notes Due 2052, Downgraded to Caa1 Under Review for Possible Downgrade; previously on 6/3/2008 B1 Placed Under Review for Possible Downgrade Coda CDO 2007-1 LTD. -- US$125,000,000 Class A-3L Deferrable Floating Rate Notes Due November 2047, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 6/2/2008 Caa2 Placed Under Review for Possible Downgrade -- US$145,000,000 Class A-1LA Investor Swap Due November 2047, Downgraded to Ba3 Under Review for Possible Downgrade; previously on 6/2/2008 Baa3 Placed Under Review for Possible Downgrade -- US$35,000,000 Class A-2L Floating Rate Notes Due November 2047, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 6/2/2008 B3 Placed Under Review for Possible Downgrade -- US$40,000,000 Class X Notes Due November 2014, Downgraded to B2 Under Review for Possible Downgrade; previously on 6/2/2008 Ba2 Placed Under Review for Possible Downgrade -- US$55,000,000 Class A-1LB Floating Rate Notes Due November 2047, Downgraded to Caa1 Under Review for Possible Downgrade; previously on 6/2/2008 B1 Placed Under Review for Possible Downgrade Collybus CDO I Ltd. -- US$53,000,000 Class B Senior Secured Floating Rate Notes due 2047, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 9/25/2008 Caa2 Placed Under Review for Possible Downgrade -- US$55,000,000 Class A-3 Senior Secured Floating Rate Notes due 2047, Downgraded to Caa2 Under Review for Possible Downgrade; previously on 9/25/2008 B2 Placed Under Review for Possible Downgrade -- US$675,000,000 Class A-2 Senior Secured Floating Rate Notes due 2047, Downgraded to Ba2 Under Review for Possible Downgrade; previously on 9/25/2008 Baa2 Placed Under Review for Possible Downgrade Connecticut Valley CLO Funding IV, Ltd. -- US$225,000,000 Class A-1 Floating Rate Notes Due 2027, Downgraded to Aa2 Under Review for Possible Downgrade; previously on 9/24/2007 Assigned Aaa -- US$28,000,000 Class B Floating Rate Notes Due 2027, Downgraded to Baa2 Under Review for Possible Downgrade; previously on 9/24/2007 Assigned A2 -- US$29,500,000 Class C Floating Rate Notes Due 2027, Downgraded to Ba2 Under Review for Possible Downgrade; previously on 9/24/2007 Assigned Baa2 -- US$43,000,000 Class A-2 Floating Rate Notes Due 2027, Downgraded to Aa3 Under Review for Possible Downgrade; previously on 9/24/2007 Assigned Aaa -- US$50,000,000 Class A-3 Floating Rate Notes Due 2027, Downgraded to A2 Under Review for Possible Downgrade; previously on 9/24/2007 Assigned Aa2 Dalton CDO Ltd. -- Up to US $114,000,000 Class A-1a1 Floating Rate Variable Funding Notes Due June 2050, Downgraded to Baa1 Under Review for Possible Downgrade; previously on 10/6/2008 A1 Placed Under Review for Possible Downgrade -- US $50,000,000 Class A-1a2 Floating Rate Notes Due June 2050, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 10/6/2008 B3 Placed Under Review for Possible Downgrade Duke Funding High Grade VI, Ltd. -- US$13,500,000 Class X Senior Secured Floating Rate Notes Due 2014, Downgraded to B1 Under Review for Possible Downgrade; previously on 10/3/2008 Ba1 Placed Under Review for Possible Downgrade Euler ABS CDO I, Ltd. -- US$135,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes due 2050, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 6/5/2008 B3 Placed Under Review for Possible Downgrade -- US$270,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes due 2050, Downgraded to B2 Under Review for Possible Downgrade; previously on 6/5/2008 Ba2 Placed Under Review for Possible Downgrade -- US$93,750,000 Class A-3 Third Priority Senior Secured Floating Rate Notes due 2050, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 6/5/2008 Caa2 Placed Under Review for Possible Downgrade FACTS 2007-1 -- Floating Rate Notes, Downgraded to B1 Under Review for Possible Downgrade; previously on 5/8/2008 Ba1 Placed Under Review for Possible Downgrade Gemstone CDO VII Ltd. -- US$200,000,000 Class A-1b(i) Floating Rate Notes due December 2045, Downgraded to Caa1 Under Review for Possible Downgrade; previously on 4/28/2008 B1 Placed Under Review for Possible Downgrade -- US$244,000,000 Class A-1a Floating Rate Notes due December 2045, Downgraded to Ba2 Under Review for Possible Downgrade; previously on 4/28/2008 Baa2 Placed Under Review for Possible Downgrade -- US$400,000,000 Class A-1b Floating Rate Notes due December 2045, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 4/28/2008 Caa2 Placed Under Review for Possible Downgrade Glacier Funding CDO V, Ltd. -- US$122,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due 2051, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 5/30/2008 B3 Placed Under Review for Possible Downgrade -- US$200,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes Due 2051, Downgraded to B2 Under Review for Possible Downgrade; previously on 5/30/2008 Ba2 Placed Under Review for Possible Downgrade Glacier Funding CDO V, Ltd. -- US$46,000,000 Class A-3 Third Priority Senior Secured Floating Rate Notes Due 2051, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 5/30/2008 Caa2 Placed Under Review for Possible Downgrade Halcyon Securitized Products Investors ABS CDO II Ltd. -- US$75,000,000 Class A-1(b) Senior Secured Floating Rate Notes Due 2046, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 5/9/2008 Caa1 Placed Under Review for Possible Downgrade -- Up to US$225,000,000 Class A-1(a) Senior Secured Floating Rate Notes Due 2046, Downgraded to B3 Under Review for Possible Downgrade; previously on 5/9/2008 Ba3 Placed Under Review for Possible Downgrade HG-COLL 2007-1 Ltd. -- US$830,000,000 Class A-1LA Floating Rate Notes Due April 2052, Downgraded to Caa1 Under Review for Possible Downgrade; previously on 5/9/2008 B1 Placed Under Review for Possible Downgrade -- US$95,000,000 Class A-1LB Floating Rate Notes Due April 2052, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 5/9/2008 Caa2 Placed Under Review for Possible Downgrade High Grade Structured Credit CDO 2007-1 -- US$27,900,000 Class X Senior Secured Notes Due 2017, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 9/3/2008 B3 Placed Under Review for Possible Downgrade Highridge ABS CDO II, Ltd. -- US$800,000,000 Class A-1S First Priority Senior Secured Floating Rate Notes due 2047, Downgraded to Ba2 Under Review for Possible Downgrade; previously on 4/15/2008 A2 Placed Under Review for Possible Downgrade Hudson Mezzanine Funding 2006-2, Ltd. -- US$7,900,000 Class S Floating Rate Notes due 2012,Downgraded to Caa1 Under Review for Possible Downgrade; previously on 9/25/2008 B1 Placed Under Review for Possible Downgrade Ischus Mezzanine CDO IV, Ltd. -- US$17,500,000 Class X First Priority Senior Secured Amortizing Notes Due 2013, Downgraded to B1 Under Review for Possible Downgrade; previously on 11/12/2008 Ba1 Placed Under Review for Possible Downgrade Ixion 2007 Series 31 -- US$13,000,000 Floating Rate Portfolio Credit Linked Secured Notes due 2037, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 4/3/2008 Downgraded to Ba3 Jupiter High-Grade CDO VI, Ltd. -- US$750,000,000 Class A-1 First Priority Senior Secured Floating Rate Delayed Draw Notes Due 2053, Downgraded to Caa1 Under Review for Possible Downgrade; previously on 6/2/2008 B1 Placed Under Review for Possible Downgrade Kleros Preferred Funding IX, Ltd. -- US$1,380,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes Due 2052, Downgraded to Ba3 Under Review for Possible Downgrade; previously on 4/18/2008 A3 Placed Under Review for Possible Downgrade Kleros Preferred Funding VIII, Ltd. -- US$150,000,000 Class A-1B Second Priority Senior Secured Floating Rate Notes Due 2052, Downgraded to Caa2 Under Review for Possible Downgrade; previously on 5/30/2008 B2 Placed Under Review for Possible Downgrade -- US$180,000,000 Class A-2 Third Priority Senior Secured Floating Rate Notes Due 2052, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 5/30/2008 B3 Placed Under Review for Possible Downgrade -- US$2,400,000,000 Class A-1A First Priority Senior Secured Delayed Draw Floating Rate Notes Due 2052, Downgraded to Caa1 Under Review for Possible Downgrade; previously on 5/30/2008 B1 Placed Under Review for Possible Downgrade Kleros Real Estate CDO IV, Ltd. -- US$250,000,000 Class A-3 Third Priority Senior Secured Floating Rate Notes Due December 2050, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 7/29/2008 Caa2 Placed Under Review for Possible Downgrade -- US$300,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes Due December 2050, Downgraded to Baa1 Under Review for Possible Downgrade; previously on 7/29/2008 A1 Placed Under Review for Possible Downgrade -- US$300,000,000 Class A-2 Second Priority Senior Secured Floating Rate Delayed Draw Notes Due December 2050, Downgraded to B2 Under Review for Possible Downgrade; previously on 7/29/2008 Ba2 Placed Under Review for Possible Downgrade Le Monde CDO I PLC -- EUR360,000,000 Class A-3EU Floating Rate Euro Notes Due 2052, Downgraded to B3 Under Review for Possible Downgrade; previously on 6/12/2008 Ba3 Placed Under Review for Possible Downgrade -- US$120,000,000 Class A-1US Variable Funding Dollar Notes Due 2052, Downgraded to B3 Under Review for Possible Downgrade; previously on 6/12/2008 Ba3 Placed Under Review for Possible Downgrade -- US$604,250,000 Class A-2US Floating Rate Dollar Notes Due 2052, Downgraded to B3 Under Review for Possible Downgrade; previously on 6/12/2008 Ba3 Placed Under Review for Possible Downgrade -- US$80,000,000 and EUR69,500,000 Class A-1R Redenominatable Floating Rate Notes Due 2052, Downgraded to B3 Under Review for Possible Downgrade; previously on 6/12/2008 Ba3 Placed Under Review for Possible Downgrade Lexington Capital Funding III Ltd. -- US$480,000,000 Class A-1 First Priority Senior Floating Rate Notes Due April 2047, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 5/16/2008 Caa1 Placed Under Review for Possible Downgrade Lexington Capital Funding V Ltd. -- US$246,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes Due 2051, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 6/2/2008 Caa1 Placed Under Review for Possible Downgrade Libertas Preferred Funding V, Ltd. -- US$20,000,000 Class X Senior Secured Floating Rate Notes Due 2013, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 5/23/2008 Caa2 Placed Under Review for Possible Downgrade -- US$360,000,000 Class A-1 Senior Secured Floating Rate Notes Due 2047, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 5/23/2008 Caa1 Placed Under Review for Possible Downgrade Limehouse CDO 2008-1 Limited -- US$13,512,616 Class B Secured Floating Rate Deferrable Interest Notes Due 2042, Downgraded to A3 Under Review for Possible Downgrade; previously on 7/18/2008 Assigned Aa3 -- US$97,805,600 Class A Secured Floating Rate Notes Due 2042, Downgraded to Aa3 Under Review for Possible Downgrade; previously on 7/18/2008 Assigned Aaa Los Robles CDO Ltd. -- Up to $187,500,000 Class A-1a Floating Rate Notes Due August 12, 2047, Downgraded to B2 Under Review for Possible Downgrade; previously on 10/21/2008 Ba2 Placed Under Review for Possible Downgrade Lunar Funding V plc Series 2007-39 -- US$200,000,000 Limited Recourse Secured Floating Rate Credit- Linked Notes due 2037, Downgraded to B1 Under Review for Possible Downgrade; previously on 4/29/2008 Ba1 Placed Under Review for Possible Downgrade Magnolia Finance II plc Series 2006-6A1 -- Series 2006-6A1 US$50,000,000 ABS Portfolio Variable Rate Notes due December 2038, Downgraded to Ba1 ; previously on 10/1/2008 Baa1 Placed Under Review for Possible Downgrade Magnolia Finance II plc Series 2006-6A2E -- EUR 7,500,000 ABS Portfolio Variable Rate Notes due December 2038, Downgraded to Ba1 Under Review for Possible Downgrade; previously on 10/1/2008 Baa1 Placed Under Review for Possible Downgrade Magnolia Finance II plc Series 2006-6A2G -- GBP 6,000,000 ABS Portfolio Variable Rate Notes due December 2038, Downgraded to Ba1 Under Review for Possible Downgrade; previously on 10/1/2008 Baa1 Placed Under Review for Possible Downgrade Newbury Street CDO, Ltd. -- US$1,000,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes Due 2053, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 10/6/2008 Caa1 Placed Under Review for Possible Downgrade Niagara CDO Ltd. -- US$410,000,000 Class A Senior Secured Floating Rate Term Notes due 2039, Downgraded to A2 Under Review for Possible Downgrade; previously on 1/30/2007 Assigned Aa2 Penwood CDO 2008-1 Limited -- US$13,488,466 Class B Secured Floating Rate Deferrable Interest Notes, Due 2042-2, Downgraded to A3 Under Review for Possible Downgrade; previously on 7/18/2008 Assigned Aa3 -- US$97,630,800 Class A Secured Floating Rate Notes, Due 2042, Downgraded to Aa3 Under Review for Possible Downgrade; previously on 7/18/2008 Assigned Aaa Pine Mountain CDO III Ltd. -- US$20,000,000 Class A-2 Floating Rate Notes Due July 7, 2047, Downgraded to Caa2 Under Review for Possible Downgrade; previously on 5/9/2008 B2 Placed Under Review for Possible Downgrade -- US$41,250,000 Class A-4 Floating Rate Notes Due July 7, 2047, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 5/9/2008 Caa2 Placed Under Review for Possible Downgrade -- US$45,000,000 Class B Floating Rate Notes Due July 7, 2047, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 5/9/2008 Caa2 Placed Under Review for Possible Downgrade -- US$90,000,000 Class A-3 Floating Rate Notes Due July 7, 2047, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 5/9/2008 Caa1 Placed Under Review for Possible Downgrade -- Up to $230,000,000 Class A-1 Floating Rate Notes Due July 7, 2047, Downgraded to B2 Under Review for Possible Downgrade; previously on 5/9/2008 Ba2 Placed Under Review for Possible Downgrade Point Pleasant Funding 2007-1, Ltd. -- US$6,000,000 Class S Floating Rate Notes due 2012, Downgraded to Caa1 Under Review for Possible Downgrade; previously on 9/2/2008 B1 Placed Under Review for Possible Downgrade Pyxis Libertas 2006-11 -- US$135,000,000 Class 2006-11 Units issued by PYXIS Master Trust, Downgraded to Caa1 Under Review for Possible Downgrade; previously on 6/9/2008 B1 Placed Under Review for Possible Downgrade Sagittarius CDO I Ltd. -- US$15,000,000 Class S Senior Secured Floating Rate Notes Due 2012, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 5/23/2008 Caa1 Placed Under Review for Possible Downgrade Sharps CDO II Ltd. -- US$100,000,000 Class A-2 Senior Secured Floating Rate Notes due 2046, Downgraded to Caa1 Under Review for Possible Downgrade; previously on 5/9/2008 B1 Placed Under Review for Possible Downgrade -- US$60,000,000 Class A-3 Senior Secured Floating Rate Notes due 2046, Downgraded to Caa2 Under Review for Possible Downgrade; previously on 5/9/2008 B2 Placed Under Review for Possible Downgrade -- US$600,000,000 Class A-1 Senior Secured Floating Rate Notes due 2046, Downgraded to B1 Under Review for Possible Downgrade; previously on 5/9/2008 Ba1 Placed Under Review for Possible Downgrade -- US$82,000,000 Class B Senior Secured Floating Rate Notes due 2046, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 5/9/2008 B3 Placed Under Review for Possible Downgrade Silver Elms CDO II Limited -- US$151,400,000 Class A-1Q Floating Rate Senior Secured Notes due 2051, Downgraded to Caa1 Under Review for Possible Downgrade; previously on 5/29/2008 B1 Placed Under Review for Possible Downgrade -- US$873,600,000 Class A-1M Floating Rate Senior Secured Notes due 2051, Downgraded to Caa1 Under Review for Possible Downgrade; previously on 5/29/2008 B1 Placed Under Review for Possible Downgrade Silver Marlin CDO I Ltd. -- US$625,000,000 Class A-1 First Priority Senior Secured Floating Rate Delayed Draw Notes due 2050, Downgraded to B1 Under Review for Possible Downgrade; previously on 6/2/2008 Ba1 Placed Under Review for Possible Downgrade Soter 2007-CRN2, Ltd. -- US$100,000,000 A1 Variable Notes Due 2047, Downgraded to Ca ; previously on 5/30/2008 Ba1 Placed Under Review for Possible Downgrade Soter 2007-CRN3, Ltd. -- US$100,000,000 A1 Variable Notes Due 2047, Downgraded to Ca ; previously on 6/2/2008 Baa2 Placed Under Review for Possible Downgrade Soter 2007-GSC, Ltd. -- US$50,000,000 A1 Variable Notes Due 2039, Downgraded to Ca ; previously on 6/3/2008 B3 Placed Under Review for Possible Downgrade South Coast Funding IX Ltd -- Super Senior Swap, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 5/18/2008 Caa1 Placed Under Review for Possible Downgrade STACK 2006-2 Ltd. -- US$585,000,000 Class I Supersenior Swap, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 5/8/2008 Caa2 Placed Under Review for Possible Downgrade STACK 2007-2 Ltd. -- up to US$330,000,000 Class A-1 Senior Variable Funding Floating Rate Notes Due 2047, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 6/9/2008 Caa2 Placed Under Review for Possible Downgrade Summer Street 2007-1, Ltd. -- US$63,000,000 Class A-1SB Senior Secured Floating Rate Notes Due 2052, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 4/23/2008 B3 Placed Under Review for Possible Downgrade -- US$80,000,000 Class A-1SA Senior Secured Floating Rate Notes Due 2052, Downgraded to Ba3 Under Review for Possible Downgrade; previously on 4/23/2008 Baa3 Placed Under Review for Possible Downgrade Term CDO 2007-1 Ltd. -- Class A-1LA Floating Rate Notes Due July 2038, Downgraded to B2 Under Review for Possible Downgrade; previously on 4/23/2008 Ba2 Placed Under Review for Possible Downgrade Tower Hill CDO II, Ltd. -- US$0 Class A-1 Senior Secured Funded Notes Due 2023, Downgraded to Aa2 Under Review for Possible Downgrade; previously on 7/26/2007 Assigned Aaa -- US$0 Class A-2 Senior Secured Funded Notes Due 2023, Downgraded to Aa3 Under Review for Possible Downgrade; previously on 7/26/2007 Assigned Aaa -- US$0 Class B Type 2 Senior Secured Funded Notes Due 2023, Downgraded to A2 Under Review for Possible Downgrade; previously on 7/26/2007 Assigned Aa2 -- US$0 Class C Type 2 Secured Funded Deferrable Notes Due 2023, Downgraded to Baa2 Under Review for Possible Downgrade; previously on 7/26/2007 Assigned A2 -- US$11,000,000 Class B Type 1 Senior Secured Funded Notes Due 2023, Downgraded to A2 Under Review for Possible Downgrade; previously on 7/26/2007 Assigned Aa2 -- US$20,000,000 Class B Type 2 Senior Secured Unfunded Notes Due 2023, Downgraded to A2 Under Review for Possible Downgrade; previously on 7/26/2007 Assigned Aa2 -- US$25,000,000 Class C Type 2 Secured Unfunded Deferrable Notes Due 2023, Downgraded to Baa2 Under Review for Possible Downgrade; previously on 7/26/2007 Assigned A2 -- US$300,000,000 Class A-1 Senior Secured Unfunded Notes Due 2023, Downgraded to Aa2 Under Review for Possible Downgrade; previously on 7/26/2007 Assigned Aaa -- US$45,000,000 Class A-2 Senior Secured Unfunded Notes Due 2023, Downgraded to Aa3 Under Review for Possible Downgrade; previously on 7/26/2007 Assigned Aaa -- US$50,000,000 Class C Type 1 Secured Funded Deferrable Notes Due 2023, Downgraded to Baa2 Under Review for Possible Downgrade; previously on 7/26/2007 Assigned A2 -- US$53,000,000 Class D Secured Floating Rate Deferrable Notes Due 2023, Downgraded to Ba2 Under Review for Possible Downgrade; previously on 7/26/2007 Assigned Baa2 -- US$53,000,000 Class E Secured Floating Rate Deferrable Notes Due 2023, Downgraded to B2 Under Review for Possible Downgrade; previously on 7/26/2007 Assigned Ba2 -- US$9,415,000 Class A-X Notes Due 2023, Aaa Placed on Review for Possible Downgrade; previously on 7/26/2007 Assigned Aaa Triaxx Prime CDO 2007-1, Ltd. -- US$11,575,000 Class B Third Priority Senior Secured Floating Rate Notes Due October 2039, Downgraded to A2 Under Review for Possible Downgrade; previously on 10/20/2008 Aa2 Placed Under Review for Possible Downgrade -- US$12,700,000 Class X Fourth Priority Junior Secured Amortizing Deferrable Floating Rate Notes Due October 2039, Downgraded to Baa2 Under Review for Possible Downgrade; previously on 10/20/2008 A2 Placed Under Review for Possible Downgrade -- US$175,000,000 Class A-1D First Priority Senior Secured Floating Rate Delayed Draw Notes Due October 2039, Downgraded to Aa2 Under Review for Possible Downgrade; previously on 3/30/2007 Assigned Aaa Triaxx Prime CDO 2007-1, Ltd. -- US$78,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due October 2039, Downgraded to Aa3 Under Review for Possible Downgrade; previously on 10/20/2008 Aaa Placed Under Review for Possible Downgrade -- US$8,925,000 Class C Fifth Priority Junior Secured Deferrable Floating Rate Notes Due October 2039, Downgraded to Ba2 Under Review for Possible Downgrade; previously on 10/20/2008 Baa2 Placed Under Review for Possible Downgrade -- US$825,000,000 Class A-1T First Priority Senior Secured Floating Rate Notes Due October 2039, Downgraded to Aa2 Under Review for Possible Downgrade; previously on 3/30/2007 Assigned Aaa Tribune Limited Series 48 -- US$80,000,000 Floating Rate Credit Linked Secured Notes due 2050, -- Downgraded to Caa1 Under Review for Possible Downgrade; previously on 5/18/2008 B1 Placed Under Review for Possible Downgrade UBS Euro Note Programme AMPST 2007-1 -- US$20,000,000 Floating Rate Credit Linked Notes due 2047, Downgraded to Caa3 Under Review for Possible Downgrade; previously on 5/30/2008 B3 Placed Under Review for Possible Downgrade West Trade Funding CDO III Ltd. -- US$1,500,000,000 Class A-1 First Priority Senior Floating Rate Delayed Draw Notes Due 2053, Downgraded to B3 Under Review for Possible Downgrade; previously on 5/20/2008 Ba3 Placed Under Review for Possible Downgrade West Trade Funding CDO III Ltd. -- US$625,000,000 Class A-2 Second Priority Senior Floating Rate Notes Due 2053, Downgraded to Caa1 Under Review for Possible Downgrade; previously on 5/20/2008 B1 Placed Under Review for Possible Downgrade ZAIS Investment Grade Limited IX -- Class A-1A Senior Secured Floating Rate Notes Due 2052, Downgraded to A2 Under Review for Possible Downgrade; previously on 3/27/2008 Downgraded to Aa2 -- Class A-1B Senior Secured Floating Rate Notes Due 2052, Downgraded to A2 Under Review for Possible Downgrade; previously on 3/27/2008 Downgraded to Aa2 -- Class A-1C Senior Secured Floating Rate Notes Due 2052, Downgraded to A2 Under Review for Possible Downgrade; previously on 3/27/2008 Downgraded to Aa2 -- US$1,000,000 Class Y Combination Notes Due 2057, Downgraded to Caa1 Under Review for Possible Downgrade; previously on 10/6/2008 B1 Placed Under Review for Possible Downgrade -- US$54,000,000 Class A-2 Senior Secured Floating Rate Notes Due 2052, Downgraded to Baa1 Under Review for Possible Downgrade; previously on 10/6/2008 A1 Placed Under Review for Possible Downgrade -- US$58,000,000 Class B Senior Secured Floating Rate Notes Due 2052, Downgraded to Baa3 Under Review for Possible Downgrade; previously on 10/6/2008 A3 Placed Under Review for Possible Downgrade -- US$6,090,000 Class X Security Due 2012, Downgraded to A2 Under Review for Possible Downgrade; previously on 3/27/2008 Downgraded to Aa2 ZAIS Investment Grade Limited X -- US$120,000,000 Class A-1b Senior Secured Floating Rate Notes Due 2057, Downgraded to Aa1 Under Review for Possible Downgrade; previously on 8/3/2007 Assigned Aaa -- US$13,500,000 Class S Senior Secured Floating Rate Notes Due 2015, Aaa Placed on Review for Possible Downgrade; previously on 8/3/2007 Assigned Aaa -- US$152,000,000 Class A-1a Senior Secured Floating Rate Notes Due 2057, Downgraded to Aa1 Under Review for Possible Downgrade; previously on 8/3/2007 Assigned Aaa -- US$50,000,000 Class B Senior Subordinate Secured Floating Rate Notes Due 2057, Downgraded to B2 Under Review for Possible Downgrade; previously on 5/30/2008 Ba2 Placed Under Review for Possible Downgrade ZAIS Investment Grade Limited X -- US$59,500,000 Class A-2 Senior Secured Floating Rate Notes Due 2057, Downgraded to Aa2 Under Review for Possible Downgrade; previously on 8/3/2007 Assigned Aaa -- US$75,000,000 Class A-3 Senior Secured Floating Rate Notes Due 2057, Downgraded to Aa3 Under Review for Possible Downgrade; previously on 10/1/2008 Aaa Placed Under Review for Possible Downgrade -- US$75,000,000 Class A-4 Senior Secured Floating Rate Notes Due 2057, Downgraded to A3 Under Review for Possible Downgrade; previously on 10/1/2008 Aa3 Placed Under Review for Possible Downgrade * Timothy Pohl Will Leave Skadden for Lazard -------------------------------------------- Timothy R. Pohl will join Lazard Ltd.'s Financial Advisory business as a Managing Director in its Restructuring Group, effective Jan. 7, 2009. Mr. Pohl, who will be based in Chicago, currently is global co-leader of the 100-plus attorney corporate restructuring practice of Skadden, Arps, Slate, Meagher & Flom LLP. "Tim is widely recognized for providing high-value strategic advice in complex reorganizations and debt restructurings," said Kenneth Jacobs, Head of Lazard North America. "We are delighted that Tim is joining us to help serve our clients, and to expand both our Chicago and global restructuring teams." "Having advised on a number of restructuring transactions with Lazard's team over the years, I know first hand that they are the market leader in restructuring financial advisory, with some of the most respected and experienced bankers in the world. I am excited to have this new opportunity to join the Lazard team," said Mr. Pohl. "I am fortunate to have been part of Skadden, in one of the world's leading restructuring practices, over the past decade and look forward to continuing to work with them in the future." By joining Lazard, Mr. Pohl will conclude a 10-year career with Skadden, where he helped build and lead its corporate restructuring team. Prior to Skadden he was in the restructuring practice at Jones Day for eight years. "Tim has done a terrific job of co-leading and helping to build Skadden's global restructuring practice with a strong team of attorneys worldwide," said Skadden Managing Partner Robert C. Sheehan. "He will be missed, but we congratulate him and look forward to continuing to work with him and the professionals at Lazard." During his tenure at Skadden, Mr. Pohl led a number of successful out-of-court restructurings including for Rural Cellular Communications, Meridian Technologies, and Krispy Kreme in the restructuring of its troubled franchises. He also led numerous large Chapter 11 restructurings, including most recently for Vera Sun Energy, as well as for National Steel Corporation, McLeodUSA, Radnor Holdings, ICG Communications and Diamond Brands. In addition, Mr. Pohl has served as lead counsel to investors in and acquirers of distressed assets, including America West Airlines in its merger with US Airways, SPO Partners in its investment in Calpine, OAO Severstal in its acquisition of Rouge Industries and many others. Mr. Pohl received a BA from Amherst College and a JD from the University of Chicago. About Lazard Lazard Ltd. -- http://www.lazard.com-- is a financial advisory and asset management firms that operates from 41 cities across 24 countries in North America, Europe, Asia, Australia, Central and South America. With origins dating back to 1848, the firm provides advice on mergers and acquisitions, restructuring and capital raising, as well as asset management services to corporations, partnerships, institutions, governments, and individuals. About Skadden Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates -- http://www.skadden.com/-- was founded in 1948. It is a prominent law firm based in New York City. With over 2,000 attorneys, it is one of the largest and highest-grossing law firms in the world. In most jurisdictions, the firm is organized as a limited liability partnership (LLP). The firm's better-known alumni include former New York State Governor Elliot Spitzer. * BOND PRICING: For the Week of Dec. 8 - Dec. 12, 2008 ------------------------------------------------------ Company Coupon Maturity Bid Price ------- ------ -------- --------- AFFINION GROUP I 11.50 10/15/2015 35.32 AIRTRAN HOLDINGS 7.00 7/1/2023 52.50 ALERIS INTL INC 10.00 12/15/2016 19.38 AMBASSADORS INTL 3.75 4/15/2027 29.50 AMD 5.75 8/15/2012 39.00 AMER AXLE & MFG 5.25 2/11/2014 29.00 AMER AXLE & MFG 7.88 3/1/2017 27.38 AMER GENL FIN 4.00 3/15/2011 46.50 AMER GENL FIN 4.63 5/15/2009 82.75 AMER GENL FIN 4.63 9/1/2010 50.00 AMER GENL FIN 4.88 5/15/2010 59.00 AMER GENL FIN 5.38 9/1/2009 69.86 AMER GENL FIN 5.38 10/1/2012 40.00 AMER GENL FIN 5.63 8/17/2011 41.25 AMER GENL FIN 5.85 6/1/2013 35.00 AMER MEDIA OPER 8.88 1/15/2011 52.50 AMER MEDIA OPER 10.25 5/1/2009 41.00 AMES TRUE TEMPER 10.00 7/15/2012 35.31 AMR CORP 9.88 6/15/2020 24.73 AMR CORP 10.00 4/15/2021 24.95 AMR CORP 10.40 3/10/2011 42.50 ANTIGENICS 5.25 2/1/2025 24.00 APPLETON PAPERS 9.75 6/15/2014 15.00 ARVIN INDUSTRIES 7.13 3/15/2009 88.78 ARVINMERITOR 8.75 3/1/2012 51.50 ASSURED GUARANTY 6.40 12/15/2066 15.00 ATHEROGENICS INC 1.50 2/1/2012 9.50 ATHEROGENICS INC 4.50 9/1/2008 8.25 ATHEROGENICS INC 4.50 3/1/2011 8.50 AVENTINE RENEW 10.00 4/1/2017 10.00 AVIS BUDGET CAR 7.63 5/15/2014 27.50 BALLY TOTAL FITN 14.00 10/1/2013 1.00 BANK NEW ENGLAND 8.75 4/1/1999 5.13 BANK NEW ENGLAND 9.88 9/15/1999 4.53 BANKUNITED CAP 3.13 3/1/2034 10.00 BEARINGPOINT INC 4.10 12/15/2024 14.43 BEAZER HOMES USA 4.63 6/15/2024 43.00 BEAZER HOMES USA 8.38 4/15/2012 37.00 BEAZER HOMES USA 8.63 5/15/2011 51.75 BELL MICROPRODUC 3.75 3/5/2024 18.00 BERRY PLASTICS H 8.88 9/15/2014 23.79 BON-TON DEPT STR 10.25 3/15/2014 17.90 BORDEN INC 7.88 2/15/2023 10.75 BORDEN INC 8.38 4/15/2016 5.85 BORDEN INC 9.20 3/15/2021 7.00 BOWATER INC 9.38 12/15/2021 20.00 BOWATER INC 9.50 10/15/2012 15.87 BRODER BROS CO 11.25 10/15/2010 27.38 BURLINGTON COAT 11.13 4/15/2014 30.00 CALLON PETROLEUM 9.75 12/8/2010 50.00 CAPITALSOURCE 1.63 3/15/2034 91.50 CARAUSTAR INDS 7.38 6/1/2009 65.00 CCH I LLC 9.92 4/1/2014 14.50 CCH I LLC 10.00 5/15/2014 11.50 CCH I LLC 11.13 1/15/2014 14.50 CCH I/CCH I CP 11.00 10/1/2015 17.00 CCH I/CCH I CP 11.00 10/1/2015 22.50 CCH II/CCH II CP 10.25 9/15/2010 50.00 CCH II/CCH II CP 10.25 9/15/2010 45.75 CCH II/CCH II CP 10.25 10/1/2013 35.00 CELL GENESYS INC 3.13 11/1/2011 31.75 CELL THERAPEUTIC 5.75 12/15/2011 1.00 CHAMPION ENTERPR 2.75 11/1/2037 12.75 CHAPARRAL ENERGY 8.88 2/1/2017 25.00 CHARTER COMM HLD 10.00 4/1/2009 88.84 CHARTER COMM HLD 10.00 5/15/2011 23.00 CHARTER COMM HLD 11.13 1/15/2011 51.00 CHARTER COMM INC 6.50 10/1/2027 8.63 CHENIERE ENERGY 2.25 8/1/2012 22.00 CIRCUS CIRCUS 7.63 7/15/2013 28.90 CLAIRE'S STORES 9.25 6/1/2015 20.50 CLAIRE'S STORES 10.50 6/1/2017 17.75 CLEAR CHANNEL 4.40 5/15/2011 25.25 CLEAR CHANNEL 4.50 1/15/2010 62.00 CLEAR CHANNEL 4.90 5/15/2015 10.00 CLEAR CHANNEL 5.00 3/15/2012 19.25 CLEAR CHANNEL 5.50 9/15/2014 11.00 CLEAR CHANNEL 5.50 12/15/2016 13.50 CLEAR CHANNEL 5.75 1/15/2013 14.88 CLEAR CHANNEL 6.25 3/15/2011 32.00 CLEAR CHANNEL 6.88 6/15/2018 9.00 CLEAR CHANNEL 7.65 9/15/2010 53.50 CMP SUSQUEHANNA 9.88 5/15/2014 5.00 COEUR D'ALENE 1.25 1/15/2024 26.25 COEUR D'ALENE 3.25 3/15/2028 24.14 COMPUCREDIT 3.63 5/30/2025 25.25 CONEXANT SYSTEMS 4.00 3/1/2026 45.00 CONSTAR INTL 11.00 12/1/2012 3.00 COOPER-STANDARD 8.38 12/15/2014 19.50 CREDENCE SYSTEM 3.50 5/15/2010 25.00 DAIMLERCHRYS NA 5.20 12/15/2008 98.01 DAYTON SUPERIOR 13.00 6/15/2009 50.00 DECODE GENETICS 3.50 4/15/2011 11.96 DELPHI CORP 6.50 8/15/2013 1.25 DELPHI CORP 8.25 10/15/2033 0.01 DELTA PETROLEUM 7.00 4/1/2015 17.50 DEVELOPERS DIVER 3.00 3/15/2012 34.50 DEVELOPERS DIVER 3.50 8/15/2011 43.32 DEVELOPERS DIVER 3.50 8/15/2011 41.88 DEX MEDIA INC 8.00 11/15/2013 13.00 DEX MEDIA WEST 9.88 8/15/2013 18.75 DUNE ENERGY INC 10.50 6/1/2012 39.00 DVI INC 9.88 2/1/2004 8.88 EOP OPERATING LP 4.75 3/15/2014 15.64 EQUINIX INC 2.50 2/15/2024 57.25 FIBERTOWER CORP 9.00 11/15/2012 20.50 FINLAY FINE JWLY 8.38 6/1/2012 14.06 FIRST DATA CORP 3.90 10/1/2009 52.10 FIRST DATA CORP 4.95 6/15/2015 20.30 FIRST DATA CORP 5.80 12/15/2008 92.70 FLOTEK INDS 5.25 2/15/2028 24.75 FORD MOTOR CO 7.40 11/1/2046 20.16 FORD MOTOR CO 7.75 6/15/2043 19.61 FORD MOTOR CO 8.88 1/15/2022 22.07 FORD MOTOR CO 8.90 1/15/2032 20.00 FORD MOTOR CO 9.22 9/15/2021 23.00 FORD MOTOR CO 9.50 9/15/2011 42.00 FORD MOTOR CO 9.98 2/15/2047 21.28 FORD MOTOR CRED 4.25 1/20/2009 95.40 FORD MOTOR CRED 4.30 3/20/2009 86.45 FORD MOTOR CRED 4.35 2/20/2009 91.73 FORD MOTOR CRED 4.40 1/20/2009 87.93 FORD MOTOR CRED 4.45 4/20/2009 79.73 FORD MOTOR CRED 4.50 2/20/2009 83.90 FORD MOTOR CRED 4.50 3/20/2009 80.57 FORD MOTOR CRED 4.60 12/22/2008 97.74 FORD MOTOR CRED 4.60 1/20/2009 79.20 FORD MOTOR CRED 4.65 4/20/2009 71.63 FORD MOTOR CRED 4.70 4/20/2009 70.08 FORD MOTOR CRED 4.75 12/22/2008 98.10 FORD MOTOR CRED 4.80 7/20/2009 58.00 FORD MOTOR CRED 4.90 5/20/2009 69.16 FORD MOTOR CRED 4.90 9/21/2009 77.72 FORD MOTOR CRED 4.90 10/20/2009 70.57 FORD MOTOR CRED 4.90 10/20/2009 52.70 FORD MOTOR CRED 4.95 10/20/2009 61.68 FORD MOTOR CRED 5.00 8/20/2009 63.60 FORD MOTOR CRED 5.00 8/20/2009 45.00 FORD MOTOR CRED 5.00 9/21/2009 61.45 FORD MOTOR CRED 5.00 9/21/2009 61.80 FORD MOTOR CRED 5.00 9/21/2009 45.00 FORD MOTOR CRED 5.00 10/20/2009 69.75 FORD MOTOR CRED 5.00 1/20/2011 40.01 FORD MOTOR CRED 5.05 9/21/2009 77.00 FORD MOTOR CRED 5.10 12/22/2008 88.86 FORD MOTOR CRED 5.10 12/22/2008 97.20 FORD MOTOR CRED 5.10 7/20/2009 81.00 FORD MOTOR CRED 5.10 8/20/2009 73.73 FORD MOTOR CRED 5.10 11/20/2009 55.00 FORD MOTOR CRED 5.10 2/22/2011 51.87 FORD MOTOR CRED 5.15 11/20/2009 46.35 FORD MOTOR CRED 5.15 11/20/2009 59.50 FORD MOTOR CRED 5.15 11/20/2009 42.32 FORD MOTOR CRED 5.15 1/20/2011 37.00 FORD MOTOR CRED 5.20 7/20/2009 76.41 FORD MOTOR CRED 5.20 3/21/2011 35.92 FORD MOTOR CRED 5.20 3/21/2011 31.78 FORD MOTOR CRED 5.25 6/22/2009 78.20 FORD MOTOR CRED 5.25 12/21/2009 61.12 FORD MOTOR CRED 5.25 12/21/2009 63.37 FORD MOTOR CRED 5.25 1/20/2010 35.12 FORD MOTOR CRED 5.25 2/22/2011 35.27 FORD MOTOR CRED 5.25 3/21/2011 35.60 FORD MOTOR CRED 5.25 3/21/2011 20.06 FORD MOTOR CRED 5.30 3/21/2011 35.26 FORD MOTOR CRED 5.30 4/20/2011 31.76 FORD MOTOR CRED 5.35 5/20/2009 81.00 FORD MOTOR CRED 5.35 6/22/2009 56.88 FORD MOTOR CRED 5.35 12/21/2009 66.29 FORD MOTOR CRED 5.35 2/22/2011 33.90 FORD MOTOR CRED 5.40 6/22/2009 73.74 FORD MOTOR CRED 5.40 12/21/2009 51.58 FORD MOTOR CRED 5.40 1/20/2011 53.50 FORD MOTOR CRED 5.40 9/20/2011 22.89 FORD MOTOR CRED 5.40 10/20/2011 21.00 FORD MOTOR CRED 5.45 4/20/2011 28.68 FORD MOTOR CRED 5.45 10/20/2011 31.75 FORD MOTOR CRED 5.50 6/22/2009 69.50 FORD MOTOR CRED 5.50 6/22/2009 59.88 FORD MOTOR CRED 5.50 1/20/2010 65.45 FORD MOTOR CRED 5.50 2/22/2010 40.66 FORD MOTOR CRED 5.50 2/22/2010 66.72 FORD MOTOR CRED 5.50 2/22/2010 59.17 FORD MOTOR CRED 5.50 4/20/2011 23.80 FORD MOTOR CRED 5.50 9/20/2011 30.99 FORD MOTOR CRED 5.50 10/20/2011 32.10 FORD MOTOR CRED 5.55 6/21/2010 59.95 FORD MOTOR CRED 5.55 8/22/2011 22.00 FORD MOTOR CRED 5.55 9/20/2011 26.75 FORD MOTOR CRED 5.60 12/20/2010 41.00 FORD MOTOR CRED 5.60 4/20/2011 33.00 FORD MOTOR CRED 5.60 8/22/2011 32.67 FORD MOTOR CRED 5.60 9/20/2011 25.00 FORD MOTOR CRED 5.60 11/21/2011 18.38 FORD MOTOR CRED 5.65 12/20/2010 54.00 FORD MOTOR CRED 5.65 5/20/2011 25.00 FORD MOTOR CRED 5.65 7/20/2011 26.56 FORD MOTOR CRED 5.65 11/21/2011 16.58 FORD MOTOR CRED 5.65 11/21/2011 16.43 FORD MOTOR CRED 5.70 1/15/2010 62.03 FORD MOTOR CRED 5.70 3/22/2010 55.00 FORD MOTOR CRED 5.70 5/20/2011 35.78 FORD MOTOR CRED 5.70 12/20/2011 14.85 FORD MOTOR CRED 5.75 1/20/2010 65.91 FORD MOTOR CRED 5.75 3/22/2010 43.17 FORD MOTOR CRED 5.75 6/21/2010 41.00 FORD MOTOR CRED 5.75 10/20/2010 29.13 FORD MOTOR CRED 5.75 8/22/2011 16.70 FORD MOTOR CRED 5.75 12/20/2011 37.07 FORD MOTOR CRED 5.75 2/21/2012 21.24 FORD MOTOR CRED 5.75 1/21/2014 21.39 FORD MOTOR CRED 5.75 2/20/2014 28.00 FORD MOTOR CRED 5.80 1/12/2009 95.97 FORD MOTOR CRED 5.80 8/22/2011 31.92 FORD MOTOR CRED 5.85 5/20/2010 62.70 FORD MOTOR CRED 5.85 6/21/2010 41.49 FORD MOTOR CRED 5.85 7/20/2010 39.74 FORD MOTOR CRED 5.85 1/20/2012 33.00 FORD MOTOR CRED 5.90 7/20/2011 30.78 FORD MOTOR CRED 5.90 2/21/2012 18.20 FORD MOTOR CRED 5.95 5/20/2010 35.92 FORD MOTOR CRED 6.00 2/22/2010 45.90 FORD MOTOR CRED 6.00 6/21/2010 36.24 FORD MOTOR CRED 6.00 10/20/2010 41.00 FORD MOTOR CRED 6.00 10/20/2010 28.50 FORD MOTOR CRED 6.00 12/20/2010 40.00 FORD MOTOR CRED 6.00 1/20/2012 21.73 FORD MOTOR CRED 6.00 1/21/2014 21.39 FORD MOTOR CRED 6.00 3/20/2014 23.00 FORD MOTOR CRED 6.00 3/20/2014 14.86 FORD MOTOR CRED 6.00 11/20/2014 20.10 FORD MOTOR CRED 6.00 11/20/2014 23.00 FORD MOTOR CRED 6.05 7/20/2010 42.00 FORD MOTOR CRED 6.05 9/20/2010 55.86 FORD MOTOR CRED 6.05 6/20/2011 35.90 FORD MOTOR CRED 6.05 2/20/2014 26.63 FORD MOTOR CRED 6.05 12/22/2014 21.00 FORD MOTOR CRED 6.05 12/22/2014 18.00 FORD MOTOR CRED 6.05 2/20/2015 20.00 FORD MOTOR CRED 6.10 6/20/2011 48.15 FORD MOTOR CRED 6.15 7/20/2010 40.31 FORD MOTOR CRED 6.15 9/20/2010 49.00 FORD MOTOR CRED 6.15 5/20/2011 25.76 FORD MOTOR CRED 6.15 1/20/2015 18.50 FORD MOTOR CRED 6.20 5/20/2011 23.00 FORD MOTOR CRED 6.20 6/20/2011 30.74 FORD MOTOR CRED 6.20 4/21/2014 25.30 FORD MOTOR CRED 6.25 6/20/2011 36.10 FORD MOTOR CRED 6.25 6/20/2011 36.50 FORD MOTOR CRED 6.25 12/20/2013 22.19 FORD MOTOR CRED 6.25 1/20/2015 20.00 FORD MOTOR CRED 6.30 3/22/2010 50.23 FORD MOTOR CRED 6.30 5/20/2010 44.00 FORD MOTOR CRED 6.30 5/20/2014 24.77 FORD MOTOR CRED 6.35 9/20/2010 42.19 FORD MOTOR CRED 6.35 9/20/2010 46.23 FORD MOTOR CRED 6.35 4/21/2014 23.00 FORD MOTOR CRED 6.40 8/20/2010 36.79 FORD MOTOR CRED 6.50 8/20/2010 46.30 FORD MOTOR CRED 6.50 12/20/2013 27.14 FORD MOTOR CRED 6.50 3/20/2015 21.67 FORD MOTOR CRED 6.55 8/20/2010 35.69 FORD MOTOR CRED 6.55 7/21/2014 12.38 FORD MOTOR CRED 6.65 10/21/2013 29.50 FORD MOTOR CRED 6.65 6/20/2014 22.42 FORD MOTOR CRED 6.75 10/21/2013 11.75 FORD MOTOR CRED 6.75 6/20/2014 22.00 FORD MOTOR CRED 6.80 6/20/2014 21.78 FORD MOTOR CRED 6.85 9/20/2013 25.23 FORD MOTOR CRED 6.85 5/20/2014 29.50 FORD MOTOR CRED 6.85 6/20/2014 29.50 FORD MOTOR CRED 6.95 4/20/2010 60.39 FORD MOTOR CRED 6.95 5/20/2014 27.00 FORD MOTOR CRED 7.00 7/20/2010 56.41 FORD MOTOR CRED 7.00 11/26/2011 27.00 FORD MOTOR CRED 7.00 8/15/2012 26.00 FORD MOTOR CRED 7.05 9/20/2013 24.50 FORD MOTOR CRED 7.10 9/20/2010 39.00 FORD MOTOR CRED 7.10 9/20/2013 21.75 FORD MOTOR CRED 7.10 9/20/2013 28.16 FORD MOTOR CRED 7.15 8/20/2010 53.00 FORD MOTOR CRED 7.15 8/20/2010 52.00 FORD MOTOR CRED 7.25 3/22/2010 66.29 FORD MOTOR CRED 7.25 10/25/2011 48.50 FORD MOTOR CRED 7.25 7/20/2017 22.53 FORD MOTOR CRED 7.30 1/23/2012 28.50 FORD MOTOR CRED 7.38 10/28/2009 71.00 FORD MOTOR CRED 7.38 2/1/2011 55.00 FORD MOTOR CRED 7.88 6/15/2010 57.25 FORD MOTOR CRED 8.63 11/1/2010 54.50 FORD MOTOR CRED 9.75 9/15/2010 63.00 FORD MOTOR CRED 9.88 8/10/2011 52.50 FRANKLIN 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5/15/2009 52.81 GMAC LLC 4.85 5/15/2009 49.50 GMAC LLC 4.90 10/15/2009 25.35 GMAC LLC 4.90 10/15/2009 34.50 GMAC LLC 4.95 10/15/2009 31.60 GMAC LLC 5.00 8/15/2009 39.50 GMAC LLC 5.00 8/15/2009 30.00 GMAC LLC 5.00 9/15/2009 33.10 GMAC LLC 5.00 9/15/2009 33.10 GMAC LLC 5.00 9/15/2009 31.52 GMAC LLC 5.00 10/15/2009 39.50 GMAC LLC 5.05 7/15/2009 39.26 GMAC LLC 5.10 7/15/2009 39.50 GMAC LLC 5.10 8/15/2009 28.00 GMAC LLC 5.10 9/15/2009 26.72 GMAC LLC 5.20 11/15/2009 39.50 GMAC LLC 5.20 11/15/2009 32.50 GMAC LLC 5.25 5/15/2009 45.14 GMAC LLC 5.25 7/15/2009 34.00 GMAC LLC 5.25 7/15/2009 30.00 GMAC LLC 5.25 8/15/2009 29.57 GMAC LLC 5.25 8/15/2009 33.60 GMAC LLC 5.25 11/15/2009 39.50 GMAC LLC 5.25 11/15/2009 31.00 GMAC LLC 5.25 1/15/2014 14.23 GMAC LLC 5.30 1/15/2010 28.65 GMAC LLC 5.35 11/15/2009 22.55 GMAC LLC 5.35 12/15/2009 39.50 GMAC LLC 5.35 12/15/2009 21.70 GMAC LLC 5.35 1/15/2014 16.00 GMAC LLC 5.40 5/15/2009 43.61 GMAC LLC 5.40 12/15/2009 34.00 GMAC LLC 5.40 12/15/2009 33.00 GMAC LLC 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9/15/2012 14.00 GMAC LLC 6.75 10/15/2012 16.89 GMAC LLC 6.75 4/15/2013 21.50 GMAC LLC 6.75 4/15/2013 10.00 GMAC LLC 6.75 6/15/2014 29.86 GMAC LLC 6.75 7/15/2016 16.75 GMAC LLC 6.75 8/15/2016 11.00 GMAC LLC 6.75 9/15/2016 12.24 GMAC LLC 6.75 3/15/2018 11.26 GMAC LLC 6.75 7/15/2018 14.50 GMAC LLC 6.75 9/15/2018 10.23 GMAC LLC 6.75 10/15/2018 11.00 GMAC LLC 6.75 11/15/2018 10.01 GMAC LLC 6.75 5/15/2019 10.00 GMAC LLC 6.75 5/15/2019 9.38 GMAC LLC 6.75 6/15/2019 11.00 GMAC LLC 6.75 6/15/2019 10.50 GMAC LLC 6.80 7/15/2009 45.91 GMAC LLC 6.80 11/15/2009 35.00 GMAC LLC 6.80 12/15/2009 20.89 GMAC LLC 6.80 2/15/2013 11.50 GMAC LLC 6.80 4/15/2013 13.50 GMAC LLC 6.80 9/15/2018 18.89 GMAC LLC 6.80 10/15/2018 14.50 GMAC LLC 6.85 7/15/2009 51.41 GMAC LLC 6.85 10/15/2009 39.12 GMAC LLC 6.85 5/15/2018 15.80 GMAC LLC 6.88 8/28/2012 33.00 GMAC LLC 6.88 10/15/2012 18.00 GMAC LLC 6.88 4/15/2013 12.00 GMAC LLC 6.88 8/15/2016 13.93 GMAC LLC 6.88 7/15/2018 14.50 GMAC LLC 6.90 6/15/2009 44.00 GMAC LLC 6.90 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12/15/2017 14.10 GMAC LLC 7.30 1/15/2018 17.50 GMAC LLC 7.30 1/15/2018 13.00 GMAC LLC 7.35 4/15/2018 13.60 GMAC LLC 7.38 11/15/2016 11.00 GMAC LLC 7.38 4/15/2018 13.50 GMAC LLC 7.40 12/15/2017 13.33 GMAC LLC 7.50 10/15/2012 14.00 GMAC LLC 7.50 11/15/2016 11.32 GMAC LLC 7.50 8/15/2017 14.50 GMAC LLC 7.50 11/15/2017 13.75 GMAC LLC 7.50 11/15/2017 8.95 GMAC LLC 7.50 12/15/2017 14.50 GMAC LLC 7.63 11/15/2012 11.00 GMAC LLC 7.70 8/15/2010 21.88 GMAC LLC 7.70 8/15/2010 35.00 GMAC LLC 7.75 10/15/2012 13.50 GMAC LLC 7.75 10/15/2017 11.00 GMAC LLC 7.85 8/15/2010 56.24 GMAC LLC 7.88 11/15/2012 13.50 GMAC LLC 8.00 6/15/2010 22.20 GMAC LLC 8.00 6/15/2010 25.00 GMAC LLC 8.00 6/15/2010 25.00 GMAC LLC 8.00 7/15/2010 24.00 GMAC LLC 8.00 7/15/2010 21.38 GMAC LLC 8.00 9/15/2010 19.56 GMAC LLC 8.00 8/15/2015 16.00 GMAC LLC 8.00 10/15/2017 11.75 GMAC LLC 8.00 11/15/2017 11.00 GMAC LLC 8.05 4/15/2010 30.00 GMAC LLC 8.13 9/15/2009 81.09 GMAC LLC 8.13 11/15/2017 13.13 GMAC LLC 8.20 7/15/2010 24.22 GMAC LLC 8.25 9/15/2012 20.27 GMAC LLC 8.40 4/15/2010 25.00 GMAC LLC 8.40 8/15/2015 15.10 GMAC LLC 8.40 8/15/2015 25.10 GMAC LLC 8.50 5/15/2010 29.21 GMAC LLC 8.50 5/15/2010 31.49 GMAC LLC 8.50 10/15/2010 42.85 GMAC LLC 8.50 10/15/2010 40.50 GMAC LLC 8.50 8/15/2015 17.00 GMAC LLC 8.65 8/15/2015 14.00 GMAC LLC 8.88 6/1/2010 24.90 GMAC LLC 9.00 7/15/2015 12.00 GMAC LLC 9.00 7/15/2020 13.00 GREAT ATLA & PAC 5.13 6/15/2011 50.50 HARLAND CLARKE 9.50 5/15/2015 33.00 HARRAHS OPER CO 5.38 12/15/2013 24.50 HARRAHS OPER CO 5.50 7/1/2010 54.15 HARRAHS OPER CO 5.63 6/1/2015 13.10 HARRAHS OPER CO 5.75 10/1/2017 15.68 HARRAHS OPER CO 6.50 6/1/2016 15.10 HARRAHS OPER CO 7.50 1/15/2009 95.00 HARRAHS OPER CO 8.00 2/1/2011 35.00 HARRAHS OPER CO 10.75 2/1/2016 26.46 HARRY & DAVID OP 9.00 3/1/2013 22.00 HAWAIIAN TELCOM 9.75 5/1/2013 6.00 HAWAIIAN TELCOM 12.50 5/1/2015 4.30 HAWKER BEECHCRAF 9.75 4/1/2017 22.50 HEADWATERS INC 2.88 6/1/2016 36.25 HERTZ CORP 7.40 3/1/2011 42.00 HILTON HOTELS 7.20 12/15/2009 88.22 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5.45 7/19/2030 5.00 LEHMAN BROS HLDG 5.45 9/20/2030 5.97 LEHMAN BROS HLDG 5.50 4/4/2016 8.27 LEHMAN BROS HLDG 5.50 2/4/2018 4.75 LEHMAN BROS HLDG 5.50 2/19/2018 5.21 LEHMAN BROS HLDG 5.50 11/4/2018 5.10 LEHMAN BROS HLDG 5.50 2/27/2020 7.07 LEHMAN BROS HLDG 5.50 8/19/2020 8.13 LEHMAN BROS HLDG 5.50 3/14/2023 1.09 LEHMAN BROS HLDG 5.50 4/8/2023 1.01 LEHMAN BROS HLDG 5.50 4/15/2023 5.25 LEHMAN BROS HLDG 5.50 4/23/2023 7.07 LEHMAN BROS HLDG 5.50 8/5/2023 5.25 LEHMAN BROS HLDG 5.50 10/7/2023 5.00 LEHMAN BROS HLDG 5.50 1/27/2029 5.06 LEHMAN BROS HLDG 5.50 2/3/2029 7.06 LEHMAN BROS HLDG 5.50 8/2/2030 1.10 LEHMAN BROS HLDG 5.55 2/11/2018 7.20 LEHMAN BROS HLDG 5.55 3/9/2029 5.00 LEHMAN BROS HLDG 5.55 1/25/2030 3.62 LEHMAN BROS HLDG 5.55 9/27/2030 7.20 LEHMAN BROS HLDG 5.55 12/31/2034 5.10 LEHMAN BROS HLDG 5.60 1/22/2018 8.00 LEHMAN BROS HLDG 5.60 9/23/2023 10.00 LEHMAN BROS HLDG 5.60 2/17/2029 2.28 LEHMAN BROS HLDG 5.60 2/24/2029 4.75 LEHMAN BROS HLDG 5.60 3/2/2029 1.01 LEHMAN BROS HLDG 5.60 2/25/2030 5.25 LEHMAN BROS HLDG 5.60 5/3/2030 6.25 LEHMAN BROS HLDG 5.63 1/24/2013 8.00 LEHMAN BROS HLDG 5.63 3/15/2030 4.16 LEHMAN BROS HLDG 5.65 11/23/2029 3.25 LEHMAN BROS HLDG 5.65 8/16/2030 2.13 LEHMAN BROS HLDG 5.65 12/31/2034 4.50 LEHMAN BROS HLDG 5.70 1/28/2018 5.10 LEHMAN BROS HLDG 5.70 2/10/2029 1.57 LEHMAN BROS HLDG 5.70 4/13/2029 4.75 LEHMAN BROS HLDG 5.70 9/7/2029 1.13 LEHMAN BROS HLDG 5.70 12/14/2029 1.09 LEHMAN BROS HLDG 5.75 4/25/2011 7.75 LEHMAN BROS HLDG 5.75 7/18/2011 7.00 LEHMAN BROS HLDG 5.75 5/17/2013 6.75 LEHMAN BROS HLDG 5.75 1/3/2017 0.01 LEHMAN BROS HLDG 5.75 3/27/2023 1.01 LEHMAN BROS HLDG 5.75 9/16/2023 8.56 LEHMAN BROS HLDG 5.75 10/15/2023 4.00 LEHMAN BROS HLDG 5.75 10/21/2023 4.50 LEHMAN BROS HLDG 5.75 11/12/2023 2.10 LEHMAN BROS HLDG 5.75 11/25/2023 1.13 LEHMAN BROS HLDG 5.75 12/16/2028 5.10 LEHMAN BROS HLDG 5.75 12/23/2028 4.75 LEHMAN BROS HLDG 5.75 8/24/2029 1.28 LEHMAN BROS HLDG 5.75 9/14/2029 2.56 LEHMAN BROS HLDG 5.75 10/12/2029 1.13 LEHMAN BROS HLDG 5.75 3/29/2030 5.00 LEHMAN BROS HLDG 5.80 9/3/2020 6.25 LEHMAN BROS HLDG 5.80 10/25/2030 4.00 LEHMAN BROS HLDG 5.85 11/8/2030 2.07 LEHMAN BROS HLDG 5.88 11/15/2017 6.88 LEHMAN BROS HLDG 5.90 5/4/2029 8.06 LEHMAN BROS HLDG 5.90 2/7/2031 1.56 LEHMAN BROS HLDG 5.95 12/20/2030 1.56 LEHMAN BROS HLDG 6.00 7/19/2012 6.52 LEHMAN BROS HLDG 6.00 1/22/2020 5.19 LEHMAN BROS HLDG 6.00 2/12/2020 4.50 LEHMAN BROS HLDG 6.00 1/29/2021 3.00 LEHMAN BROS HLDG 6.00 10/23/2028 2.00 LEHMAN BROS HLDG 6.00 11/18/2028 2.88 LEHMAN BROS HLDG 6.00 5/11/2029 4.00 LEHMAN BROS HLDG 6.00 7/20/2029 4.00 LEHMAN BROS HLDG 6.00 3/21/2031 7.70 LEHMAN BROS HLDG 6.00 4/30/2034 1.13 LEHMAN BROS HLDG 6.00 7/30/2034 4.75 LEHMAN BROS HLDG 6.00 2/21/2036 3.28 LEHMAN BROS HLDG 6.00 2/24/2036 4.00 LEHMAN BROS HLDG 6.00 2/12/2037 5.20 LEHMAN BROS HLDG 6.05 6/29/2029 5.00 LEHMAN BROS HLDG 6.10 8/12/2023 1.13 LEHMAN BROS HLDG 6.15 4/11/2031 2.66 LEHMAN BROS HLDG 6.20 9/26/2014 5.00 LEHMAN BROS HLDG 6.20 6/15/2027 5.00 LEHMAN BROS HLDG 6.20 5/25/2029 4.50 LEHMAN BROS HLDG 6.25 2/5/2021 5.50 LEHMAN BROS HLDG 6.25 2/22/2023 5.00 LEHMAN BROS HLDG 6.30 3/27/2037 2.00 LEHMAN BROS HLDG 6.40 10/11/2022 4.94 LEHMAN BROS HLDG 6.40 12/19/2036 7.00 LEHMAN BROS HLDG 6.50 7/19/2017 0.01 LEHMAN BROS HLDG 6.50 2/28/2023 5.00 LEHMAN BROS HLDG 6.50 3/6/2023 4.00 LEHMAN BROS HLDG 6.50 9/20/2027 4.00 LEHMAN BROS HLDG 6.50 10/18/2027 4.50 LEHMAN BROS HLDG 6.50 10/25/2027 3.57 LEHMAN BROS HLDG 6.50 11/15/2032 7.06 LEHMAN BROS HLDG 6.50 1/17/2033 5.00 LEHMAN BROS HLDG 6.50 12/22/2036 6.75 LEHMAN BROS HLDG 6.50 2/13/2037 6.00 LEHMAN BROS HLDG 6.50 6/21/2037 2.56 LEHMAN BROS HLDG 6.50 7/13/2037 7.75 LEHMAN BROS HLDG 6.60 10/3/2022 4.50 LEHMAN BROS HLDG 6.60 6/18/2027 8.10 LEHMAN BROS HLDG 6.63 1/18/2012 10.00 LEHMAN BROS HLDG 6.63 7/27/2027 5.50 LEHMAN BROS HLDG 6.75 7/1/2022 7.07 LEHMAN BROS HLDG 6.75 11/22/2027 4.50 LEHMAN BROS HLDG 6.75 3/11/2033 3.90 LEHMAN BROS HLDG 6.75 10/26/2037 6.50 LEHMAN BROS HLDG 6.80 9/7/2032 8.90 LEHMAN BROS HLDG 6.85 8/16/2032 4.25 LEHMAN BROS HLDG 6.85 8/23/2032 8.00 LEHMAN BROS HLDG 6.88 5/2/2018 9.50 LEHMAN BROS HLDG 6.88 7/17/2037 0.02 LEHMAN BROS HLDG 6.90 9/1/2032 6.50 LEHMAN BROS HLDG 6.90 6/20/2036 7.50 LEHMAN BROS HLDG 7.00 5/12/2023 8.25 LEHMAN BROS HLDG 7.00 9/27/2027 10.00 LEHMAN BROS HLDG 7.00 10/4/2032 4.00 LEHMAN BROS HLDG 7.00 7/27/2037 8.90 LEHMAN BROS HLDG 7.00 9/28/2037 3.50 LEHMAN BROS HLDG 7.00 11/16/2037 4.33 LEHMAN BROS HLDG 7.00 12/28/2037 6.50 LEHMAN BROS HLDG 7.00 1/31/2038 4.52 LEHMAN BROS HLDG 7.00 2/1/2038 5.10 LEHMAN BROS HLDG 7.00 2/7/2038 4.13 LEHMAN BROS HLDG 7.00 2/8/2038 5.13 LEHMAN BROS HLDG 7.05 2/27/2038 4.95 LEHMAN BROS HLDG 7.10 3/25/2038 9.00 LEHMAN BROS HLDG 7.25 2/27/2038 7.25 LEHMAN BROS HLDG 7.25 4/29/2038 4.00 LEHMAN BROS HLDG 7.35 5/6/2038 5.50 LEHMAN BROS HLDG 7.73 10/15/2023 9.50 LEHMAN BROS HLDG 7.88 11/1/2009 7.88 LEHMAN BROS HLDG 7.88 8/15/2010 8.00 LEHMAN BROS HLDG 8.00 3/17/2023 8.63 LEHMAN BROS HLDG 8.05 1/15/2019 5.00 LEHMAN BROS HLDG 8.50 8/1/2015 6.00 LEHMAN BROS HLDG 8.50 6/15/2022 5.25 LEHMAN BROS HLDG 8.80 3/1/2015 5.00 LEHMAN BROS HLDG 8.92 2/16/2017 7.00 LEHMAN BROS HLDG 9.00 12/28/2022 8.63 LEHMAN BROS HLDG 9.50 12/28/2022 5.35 LEHMAN BROS HLDG 9.50 1/30/2023 8.75 LEHMAN BROS HLDG 9.50 2/27/2023 3.00 LEHMAN BROS HLDG 10.00 3/13/2023 8.40 LEHMAN BROS HLDG 10.38 5/24/2024 5.34 LEHMAN BROS HLDG 11.00 10/25/2017 4.50 LEHMAN BROS HLDG 11.00 6/22/2022 7.40 LEHMAN BROS HLDG 11.00 3/17/2028 9.70 LEHMAN BROS HLDG 11.50 9/26/2022 3.84 LEHMAN BROS HLDG 12.12 9/11/2009 8.63 LEHMAN CAP VII 5.86 #N/A N Ap 0.00 LEINER HEALTH 11.00 6/1/2012 21.00 LEVEL 3 COMM INC 2.88 7/15/2010 63.00 LEVEL 3 COMM INC 5.25 12/15/2011 40.90 LEVEL 3 COMM INC 6.00 3/15/2010 75.00 LEVEL 3 COMM INC 11.50 3/1/2010 57.20 LEVEL 3 FIN INC 10.75 10/15/2011 49.50 LITHIA MOTORS 2.88 5/1/2014 86.50 LOCAL INSIGHT 11.00 12/1/2017 25.00 MAGMA DESIGN 2.00 5/15/2010 57.75 MAGNA ENTERTAINM 8.55 6/15/2010 46.00 MAJESTIC STAR 9.50 10/15/2010 26.13 MAJESTIC STAR 9.75 1/15/2011 6.25 MANDALAY RESORTS 9.38 2/15/2010 78.00 MASONITE CORP 11.00 4/6/2015 7.00 MERISANT CO 9.50 7/15/2013 12.38 MERITOR AUTO 6.80 2/15/2009 90.00 MERIX CORP 4.00 5/15/2013 25.00 MERRILL LYNCH 7.41 3/9/2011 90.50 MERRILL LYNCH 12.00 3/26/2010 16.85 METALDYNE CORP 10.00 11/1/2013 20.75 METALDYNE CORP 11.00 6/15/2012 10.00 MGM MIRAGE 8.38 2/1/2011 44.50 MGM MIRAGE 8.50 9/15/2010 68.88 MICHAELS STORES 11.38 11/1/2016 27.00 MILLENNIUM AMER 7.63 11/15/2026 10.00 MOMENTIVE PERFOR 11.50 12/1/2016 26.50 MORRIS PUBLISH 7.00 8/1/2013 11.00 MUZAK LLC/FIN 10.00 2/15/2009 79.50 NATL FINANCIAL 0.75 2/1/2012 29.06 NCI BLDG SYSTEMS 2.13 11/15/2024 70.24 NCI BLDG SYSTEMS 2.13 11/15/2024 69.18 NEBRASKA BOOK CO 8.63 3/15/2012 28.00 NEFF CORP 10.00 6/1/2015 16.00 NETWORK COMMUNIC 10.75 12/1/2013 27.01 NEW PLAN EXCEL 5.13 9/15/2012 20.00 NEW PLAN EXCEL 7.40 9/15/2009 22.00 NEW PLAN EXCEL 7.50 7/30/2029 7.00 NEW PLAN REALTY 6.90 2/15/2028 7.00 NEW PLAN REALTY 7.65 11/2/2026 7.00 NEW PLAN REALTY 7.68 11/2/2026 11.00 NEW PLAN REALTY 7.97 8/14/2026 11.00 NEWARK GROUP INC 9.75 3/15/2014 28.00 NEWPAGE CORP 10.00 5/1/2012 43.00 NEWPAGE CORP 12.00 5/1/2013 27.50 NORTEK INC 8.50 9/1/2014 26.50 NORTH ATL TRADNG 9.25 3/1/2012 29.25 NTK HOLDINGS INC 0.00 3/1/2014 21.38 NUVEEN INVEST 5.00 9/15/2010 42.88 NUVEEN INVEST 5.50 9/15/2015 15.00 OSCIENT PHARM 3.50 4/15/2011 9.25 OSI RESTAURANT 10.00 6/15/2015 22.63 PALM HARBOR 3.25 5/15/2024 35.00 PARK PLACE ENT 7.50 9/1/2009 35.10 PARK PLACE ENT 7.88 3/15/2010 61.00 PARK PLACE ENT 8.13 5/15/2011 46.00 PIEDMONT AVIAT 10.35 3/28/2011 1.00 PILGRIM'S PRIDE 8.38 5/1/2017 4.00 PILGRIMS PRIDE 9.25 11/15/2013 1.00 PINNACLE AIRLINE 3.25 2/15/2025 66.50 PLIANT CORP 11.13 9/1/2009 15.00 PLY GEM INDS 9.00 2/15/2012 25.50 POPE & TALBOT 8.38 6/1/2013 0.26 POWERWAVE TECH 1.88 11/15/2024 20.25 PREGIS CORP 12.38 10/15/2013 40.50 PRIMUS TELECOM 3.75 9/15/2010 17.00 PRIMUS TELECOM 8.00 1/15/2014 5.00 PRIMUS TELECOM 12.75 10/15/2009 69.89 PRIMUS TELECOMM 14.25 5/20/2011 14.25 PROLOGIS 2.25 4/1/2037 32.53 PROLOGIS 7.88 5/15/2009 57.00 PROVIDENCE SERV 6.50 5/15/2014 17.50 QUALITY DISTRIBU 9.00 11/15/2010 31.50 QUANTUM CORP 4.38 8/1/2010 60.00 RADIAN GROUP 7.75 6/1/2011 45.00 RADIO ONE INC 6.38 2/15/2013 30.00 RADIO ONE INC 8.88 7/1/2011 50.00 RAFAELLA APPAREL 11.25 6/15/2011 38.75 RAIT FINANCIAL 6.88 4/15/2027 34.07 RAYOVAC CORP 8.50 10/1/2013 8.70 READER'S DIGEST 9.00 2/15/2017 7.63 REAL MEX RESTAUR 10.00 4/1/2010 81.50 REALOGY CORP 10.50 4/15/2014 15.00 REALOGY CORP 12.38 4/15/2015 11.99 REEBOK INTL LTD 2.00 5/1/2024 67.00 RESIDENTIAL CAP 8.00 2/22/2011 14.50 RESIDENTIAL CAP 8.38 6/30/2010 16.00 RESIDENTIAL CAP 8.50 6/1/2012 14.50 RESIDENTIAL CAP 8.50 4/17/2013 14.00 RESIDENTIAL CAP 8.88 6/30/2015 14.50 RESIDENTIAL CAP 9.63 5/15/2015 14.95 RH DONNELLEY 6.88 1/15/2013 11.53 RH DONNELLEY 6.88 1/15/2013 12.00 RH DONNELLEY 6.88 1/15/2013 11.53 RH DONNELLEY 8.88 1/15/2016 12.00 RH DONNELLEY 8.88 10/15/2017 10.00 RH DONNELLEY INC 11.75 5/15/2015 31.83 RITE AID CORP 6.88 8/15/2013 25.00 RITE AID CORP 7.70 2/15/2027 14.99 RITE AID CORP 8.50 5/15/2015 30.00 RITE AID CORP 8.63 3/1/2015 29.00 RITE AID CORP 9.38 12/15/2015 31.00 RJ TOWER CORP 12.00 6/1/2013 2.00 ROTECH HEALTHCA 9.50 4/1/2012 21.00 SABRE HOLDINGS 8.35 3/15/2016 24.00 SABRE HOLDINGS 7.35 8/1/2011 30.00 SCOTIA PAC CO 7.11 1/20/2014 28.50 SEARS ROEBUCK AC 5.70 2/12/2009 95.00 SEARS ROEBUCK AC 5.88 3/5/2009 90.00 SEARS ROEBUCK AC 7.40 12/15/2012 38.25 SEARS ROEBUCK AC 7.50 1/15/2013 37.00 SECURUS TECH 11.00 9/1/2011 49.65 SERVICEMASTER CO 7.10 3/1/2018 17.75 SERVICEMASTER CO 7.25 3/1/2038 19.00 SERVICEMASTER CO 7.45 8/15/2027 6.00 SIRIUS SATELLITE 2.50 2/15/2009 82.00 SIRIUS SATELLITE 9.63 8/1/2013 24.16 SIX FLAGS INC 4.50 5/15/2015 10.25 SIX FLAGS INC 8.88 2/1/2010 15.06 SMURFIT-STONE 8.00 3/15/2017 26.00 SPANSION LLC 2.25 6/15/2016 2.91 SPECTRUM BRANDS 7.38 2/1/2015 26.29 ST JUDE MEDICAL 1.22 12/15/2008 99.63 ST JUDE MEDICAL 1.22 12/15/2008 98.88 STANLEY-MARTIN 9.75 8/15/2015 29.50 STATION CASINOS 6.00 4/1/2012 31.00 STATION CASINOS 6.50 2/1/2014 7.00 STATION CASINOS 6.63 3/15/2018 7.50 STATION CASINOS 6.88 3/1/2016 7.50 STONE CONTAINER 8.38 7/1/2012 28.50 THORNBURG MTG 8.00 5/15/2013 16.00 TIMES MIRROR CO 6.61 9/15/2027 5.00 TIMES MIRROR CO 7.25 3/1/2013 1.00 TIMES MIRROR CO 7.25 11/15/2096 10.86 TIMES MIRROR CO 7.50 7/1/2023 6.00 TOUSA INC 9.00 7/1/2010 3.93 TOUSA INC 9.00 7/1/2010 2.00 TOYOTA MTR CRED 5.50 12/15/2008 99.58 TRANSMERIDIAN EX 12.00 12/15/2010 35.50 TRAVELPORT LLC 9.88 9/1/2014 34.50 TRAVELPORT LLC 11.88 9/1/2016 24.75 TRIBUNE CO 4.88 8/15/2010 4.50 TRIBUNE CO 5.25 8/15/2015 2.95 TRIBUNE CO 5.67 12/8/2008 5.00 TRONOX WORLDWIDE 9.50 12/1/2012 10.00 TRUE TEMPER 8.38 9/15/2011 34.00 TRUMP ENTERTNMNT 8.50 6/1/2015 11.50 UAL CORP 4.50 6/30/2021 47.50 UAL CORP 5.00 2/1/2021 48.00 UNISYS CORP 6.88 3/15/2010 45.33 UNISYS CORP 8.00 10/15/2012 29.00 UNISYS CORP 12.50 1/15/2016 30.56 UNIVISION COMM 7.85 7/15/2011 50.10 US LEASING INTL 6.00 9/6/2011 22.13 USFREIGHTWAYS 8.50 4/15/2010 55.00 VEECO INSTRUMENT 4.13 12/21/2008 98.00 VERASUN ENERGY 9.38 6/1/2017 11.50 VERENIUM CORP 5.50 4/1/2027 19.09 VERSO PAPER 11.38 8/1/2016 29.75 VESTA INSUR GRP 8.75 7/15/2025 1.00 VICORP RESTAURNT 10.50 4/15/2011 0.13 VION PHARM INC 7.75 2/15/2012 22.00 VISTEON CORP 8.25 8/1/2010 37.00 VITESSE SEMICOND 1.50 10/1/2024 51.00 WASH MUT BANK NV 5.55 6/16/2010 23.00 WASH MUT BANK NV 5.95 5/20/2013 0.01 WASH MUTUAL INC 4.00 1/15/2009 63.00 WASH MUTUAL INC 4.20 1/15/2010 62.50 WASH MUTUAL INC 4.63 4/1/2014 17.00 WASH MUTUAL INC 7.25 11/1/2017 19.00 WASH MUTUAL INC 8.25 4/1/2010 17.00 WCI COMMUNITIES 6.63 3/15/2015 13.00 WCI COMMUNITIES 7.88 10/1/2013 2.00 WCI COMMUNITIES 9.13 5/1/2012 9.10 WILLIAM LYON 7.50 2/15/2014 17.00 WILLIAM LYON 7.63 12/15/2012 29.00 WILLIAM LYON 10.75 4/1/2013 10.00 WIMAR OP LLC/FIN 9.63 12/15/2014 1.00 WOLVERINE TUBE 10.50 4/1/2009 85.50 XM SATELLITE 9.75 5/1/2014 10.07 XM SATELLITE 10.00 12/1/2009 37.13 YOUNG BROADCSTNG 8.75 1/15/2014 2.08 YOUNG BROADCSTNG 10.00 3/1/2011 1.00 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Luke Caballos, Sheryl Joy P. Olano, 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 ***