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**UNITEDSTATESSECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON,D.C. 20549**

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**FORM 10-K**

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**(MarkOne)**

 
| **x** | **ANNUAL  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE  ACT OF 1934** |
|-------|------------------------------------------------------------------------------------------------------|

 

**For thefiscal year ended December 31, 2008**

 

**or**

 
| **o** | **TRANSITION REPORT PURSUANT TO SECTION 13 OR  15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|-------|---------------------------------------------------------------------------------------------------------|

 

**For thetransition period from                  to                  **

 

**Commission File Number: ****333-112795-02**

 

**filed on behalf of:**

 

**Corporate Backed Callable TrustCertificates, J.C. Penney Debenture-Backed Series 2007-1 Trust**

(Exact Name of Registrantas Specified in its Charter)

 

**by:**

 

**Select Asset Inc.**

(Exact Name of Registrant as Specified in its Charter)

 

**Commission File Number ofDepositor: ****333-11279**

 

| **Delaware**                                                     | ** ** | **13-4029392**                        |
|------------------------------------------------------------------|------------|---------------------------------------|
| (State or other  jurisdiction of incorporation  or organization) |       | (I.R.S. Employer  Identification No.) |
|                                                             |       |                                  |
| **1271  Avenue of the Americas**

**New  York, New York**        | ** ** | **10020**                             |
| (Address of  principal executive offices)                        |       | (Zip Code)                            |

 

Registrant’s telephone number, including area code: **(212) 526-7000**

 

Securitiesregistered pursuant to Section 12(b) of the Act:

 

| ** ** | **Title of  each class**                                                                                         | ** ** | **Name of  Each Exchange on Which Registered** | ** ** |
|------------|------------------------------------------------------------------------------------------------------------------|------------|------------------------------------------------|------------|
|       | Corporate Backed  Callable Trust Certificates, J.C. Penney   Debenture-Backed Series 2007-1, Class A-1 |       | New York Stock  Exchange (“NYSE”)    |       |

 

Securitiesregistered pursuant to Section 12(g) of the Act:   **None**

 

Indicate by check mark if the registrant is awell-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yeso  No x

 

Indicate by check mark if the registrant is notrequired to file reports pursuant to Section 13 or Section 15(d) ofthe Act. Yes o  No x

 

Indicate by check mark whether the registrant: (1) Hasfiled all reports required to be filed by Section 13 or 15(d) of theSecurities Exchange Act of 1934 during the preceding 12 months (or for suchshorter period that the registrant was required to file such reports), and (2) hasbeen subject to such filing requirements for the past 90 days. Yes  x  No  o

 

Indicate by check markwhether the registrant has submitted electronically and posted on its corporateWeb site, if any, every Interactive Data File required to be submitted andposted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter)during the preceeding 12 months (or for such shorter period that the registrantwas required to submit and post such files). Yes o  No o

 

Indicate by check mark if disclosure of delinquentfilers pursuant to Item 405 of Regulation S-K (§229.405) is notcontained herein, and will not be contained, to the best of registrant’sknowledge, in definitive proxy or information statements incorporated byreference in Part III of this Form 10-K or any amendment to this Form 10-K.  Not applicable.

 

        Indicateby check mark whether the registrant is a large accelerated filer, anaccelerated filer or a non-accelerated filer. See the definition of “acceleratedfiler and large accelerated filer” in Rule 12b-2 of the Exchange Act:

 

| Large  Accelerated Filer  o |   | Accelerated  Filer  o         |
|----------------------------------|--------|------------------------------------|
|                             |   |                               |
| Non- Accelerated  Filer  x  |   | Smaller Reporting  Company  o |

 

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2 of theAct). Yes o  No x

 

Statethe aggregate market value of the voting and non-voting common equity held bynon affiliates computed by reference to the price at which the common equitywas last sold, or the average bid and asked price of such common equity, as ofthe last business day of the registrant’s most recently completed second fiscalquarter.

 

The registrant has novoting stock or class of common stock that is held by non affiliates.

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**DOCUMENTSINCORPORATED BY REFERENCE**

 

None.

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**Introductory Note**

 

Select Asset Inc. (the “Depositor”)is the Depositor in respect of the Corporate Backed Callable TrustCertificates, J.C. Penney Debenture-Backed Series 2007-1 Trust (the “Trust”),a common law trust formed pursuant to the Standard Terms for  Trust Agreements, dated as of November 9,2006, between the Depositor and U.S. Bank National Association, as trustee (the“Trustee”), as supplemented by a series supplement (the “Series Supplement”)dated as of January 31, 2007 in respect of the Trust.  The Trust’s assets consist solely of notesissued by J.C. Penney Corporation, Inc., successor to J.C. Company, Inc.(the “Underlying Securities Issuer”). The Certificates do not represent obligations of or interests in theDepositor or the Trustee.

 

The Registrant is awholly-owned, indirect subsidiary of Lehman Brothers Holdings Inc. (“LBHI”),which filed a voluntary petition (the “Petition”) for relief under Chapter 11of the United States Code in the United States Bankruptcy Court for theSouthern District of New York on September 15, 2008 in a jointlyadministered proceeding named In re Lehman Brothers Holdings Inc., et. al.under Case Number 08-13555. LBHI and its wholly-owned broker-dealer, LehmanBrothers Inc., have sold since September 15, 2008 significant businesses,including the sale on September 21, 2008 of the investment bankingbusiness to Barclays Capital Inc., which business included the employees whohistorically conducted the Registrant’s business. As a result of the foregoing,the Registrant discontinued its securitization business and the individualspreviously involved in such securitization business are no longer employed by theRegistrant’s affiliates.  Accordingly,the Registrant was unable to timely file its Annual Report on Form 10-Kfor the fiscal year ended on December 31, 2008, and filed a Form 12b-25on April 2, 2009 in connection therewith.

 

J.C. Penney Company, Inc.,the guarantor of the underlying securities, is subject to the informationreporting requirements of the Securities Exchange Act of 1934, as amended (the “ExchangeAct”). For information on J.C. Penney Company, Inc. please see itsperiodic and current reports filed with the Securities and Exchange Commission(the “Commission”) under its Exchange Act file number, 001-15274.  The Commission maintains a site on the WorldWide Web at “http://www.sec.gov” at which users can view and download copies ofreports, proxy and information statements and other information regardingissuers that file electronically through the Electronic Data Gathering,Analysis and Retrieval system, or “EDGAR.” Periodic and current reports andother information required to be filed pursuant to the Exchange Act by J.C.Penney Company, Inc. may be accessed on this site. You can request copiesof these documents, upon payment of a duplicating fee, by writing to the SEC.The public may read and copy any materials filed with the Commission at theCommission’s Public Reference Room at 100 F Street, NE, Washington, DC20549.  The public may obtain informationon the operation of the Public Reference Room by calling the Commission at1-800-SEC-0330.  Neither Select AssetInc. nor the Trustee has participated in the preparation of such reportingdocuments, or made any due diligence investigation with respect to theinformation provided therein. Neither Select Asset Inc. nor the Trustee hasverified the accuracy or completeness of such documents or reports.  There can be no assurance that eventsaffecting the issuer of the Underlying Securities, the underlying securitiesguarantor or the underlying securities have not occurred or have not yet beenpublicly disclosed which would affect the accuracy or completeness of thepublicly available documents described above.

 

Pursuantto General Instruction J of Form 10-K, the Trust is not required torespond to various items of Form 10-K. Such items are designated herein as “Not Applicable.” Distributionreports detailing receipts and distributions by the Trust are filed after eachdistribution date on Form 10-D in lieu of reports on Form 10-Q.

 

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**PART I**

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Item1. Business.

 

Not Applicable

 

Item1A. Risk Factors.

 

Not Applicable

 

Item1B. Unresolved Staff Comments.

 

Not Applicable

 

Item2. Properties.

 

Not Applicable

 

Item3. Legal Proceedings.

 

None

 

Item4. Submission of Matters to a Vote of Security Holders.

 

None

 

**PART II**

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Item5. Market for Registrant’s Common Equity, Related Stockholder Matters andIssuer Purchases of Equity Securities.

 

Not Applicable

 

Item6. Selected Financial Data.

 

Not Applicable

 

Item7. Management’s Discussion and Analysis of Financial Condition and Results ofOperations.

 

Not Applicable

 

Item7A. Quantitative and Qualitative Disclosures About Market Risk.

 

Not Applicable

 

Item8. Financial Statements and Supplementary Data.

 

Not Applicable

 

Item9. Changes in and Disagreements With Accountants on Accounting and FinancialDisclosure.

 

None

 

Item9A.  Controls and Procedures.

 

Not Applicable

 

Item9A(T).  Controls and Procedures.

 

Not Applicable

 

Item9B. Other Information.

 

None

 

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**PART III**

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Item10. Directors, Executive Officers, and Corporate Governance.

 

Not Applicable

 

Item11. Executive Compensation.

 

Not Applicable

 

Item12. Security Ownership of Certain Beneficial Owners and Management and RelatedStockholder Matters.

 

Not Applicable

 

Item13. Certain Relationships and Related Transactions, and Director Independence.

 

None

 

Item14. Principal Accountant Fees and Services.

 

Not Applicable

 

**SUBSTITUTEINFORMATION PROVIDED IN ACCORDANCE WITH GENERAL INSTRUCTION J(2) TO FORM 10-K.**

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| **Item  1112(b) of Regulation AB.**           | ** ** | **Significant Obligors of Pool Assets  (Financial Information).**                                                                                 |
|----------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------|
| See Introductory Note                              | ** ** | ** **                                                                                                                                        |
|                                               | ** ** | ** **                                                                                                                                        |
| **Item  1114(b)(2) of Regulation AB.**        | ** ** | **Credit Enhancement and Other  Support, Except for Certain Derivatives Instruments (Information Regarding  Significant Enhancement Providers).** |
| No applicable updates                              | ** ** | ** **                                                                                                                                        |
|                                               | ** ** | ** **                                                                                                                                        |
| **Item  1115(b) of Regulation AB.**           | ** ** | **Certain  Derivatives Instruments (Financial Information).**                                                                                     |
| No applicable updates                              | ** ** | ** **                                                                                                                                        |
|                                               | ** ** | ** **                                                                                                                                        |
| **Item  1117 of Regulation AB.**                   | ** ** | **Legal Proceedings.**                                                                                                                            |
| No applicable updates                              | ** ** | ** **                                                                                                                                        |
|                                               | ** ** | ** **                                                                                                                                        |
| **Item  1119 of Regulation AB.**                   | ** ** | **Affiliations and Certain  Relationships and Related Transactions.**                                                                             |
| No applicable updates                              | ** ** | ** **                                                                                                                                        |
|                                               | ** ** | ** **                                                                                                                                        |
| **Item  1122 of Regulation AB.**                   | ** ** | **Compliance with Applicable  Servicing Criteria**                                                                                                |
| See Exhibits 33.1 and  34.1 to this Form 10-K | ** ** | ** **                                                                                                                                        |
|                                               | ** ** | ** **                                                                                                                                        |
| **Item  1123 of Regulation AB.**                   | ** ** | **Servicer Compliance Statement.**                                                                                                                |
| See Exhibit 35 to  this Form 10-K        | ** ** | ** **                                                                                                                                        |

 

**PART IV**

Item15. Exhibits, Financial Statement Schedules.

 

(a)                                  Thefollowing documents have been filed as part of, or incorporated by referenceinto, this annual report.

 

1.             None

 

2.                                       None

 

3.                                       The exhibits filed in response to Item601 of Regulation S-K are listed in the Exhibit Index.

 

(b)                                 Theexhibits filed in response to Item 601 of Regulation S-K are listed in the Exhibit Index.

 

(c)           None.

 

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SIGNATURE

 

Pursuant to the requirements of Section 13 or 15 (d) of theSecurities Exchange Act of 1934, the registrant has duly caused this report tobe signed on its behalf by the undersigned thereunto duly authorized.  In preparing this report the Registrant hasrelied on Distribution Statements provided to it by the Trustee.

 
|   | Select Asset Inc.,                                                                                                           |
|--------|------------------------------------------------------------------------------------------------------------------------------|
|   | as Depositor for the  Trust (the “Registrant”)                                                                     |
|   |                                                                                                                         |
|   |                                                                                                                         |
|   | By:                                                                                                                          | /s/ William Fox |
|   | Name:                                                                                                                        | William Fox |
|   | Title:                                                                                                                       | Chief Financial  Officer, Controller and Vice President |
|   | (Senior Officer in  charge of securitization of Select Asset Inc., as Depositor for the Trust  (the “Registrant”)) |

 

Dated:  July 28, 2009

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**EXHIBITINDEX**

 
| **Reference  Number per  Item 601 of  Regulation SK** | ** ** | **Description of Exhibits**                                                                                                                                                                            | ** ** | **Exhibit  Number in this  Form 10-K** |
|-----------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------|
| (4.1)                                                           |       | Exhibit 4.1:  Standard Terms for Trust Agreement (Filed  as part of the Current Report on Form 8-K filed on November 15,  2006 under the Commission file number of the Depositor). |       | 4.1                                         |
| (4.2)                                                           |       | Exhibit 4.2:  Series Supplement (Filed as part of  the Current Report on Form 8-K filed on November 15, 2006 under the  Commission file number of the Issuing Entity).        |       | 4.2                                         |
| (31.1)                                                          |       | Rule 15d –  14(d) Certification by Vice President of the Registrant.                                                                                                                    |       | 31.1                                        |
| (33.1)                                                          |       | Item 1122 Report on  Assessment of Compliance with Applicable Servicing Criteria                                                                                                                       |       | 33.1                                        |
| (34.1)                                                          |       | Attestation Report of  Ernst & Young LLP                                                                                                                                                      |       | 34.1                                        |
| (35)                                                            |       | Item 1123 Certification                                                                                                                                                                                |       | 35                                          |

 

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