/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/081230.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, December 30, 2008, Vol. 12, No. 309 Headlines ABITIBIBOWATER INC: To Seek Payment From Ottawa for Assets ABLE ENERGY: Names O'Brien as CFO & Posts $1.5MM Net Loss in 3Q AFC ENTERPRISES: Peninsula Capital Pares Equity Stake to 4.73% AHAVA OF CALIFORNIA: Gets $3.5 Million Bid From FJB LLC ALLIED DEFENSE: MECAR Unit Gets $37,000,000 Subcontract ANTIGENICS INC: Faces Delisting from NASDAQ Stock Market Staff ASTORIA BAY: Case Summary & Largest Unsecured Creditor ATHEROGENICS INC: Order Allowing Severance Payment Now Final BALTIMORE OPERA: Fails to Refund Tickets Sold for Canceled Shows BARRATT AMERICAN: Dispute With Lender Leads to Chapter 11 Filing BERNARD L. MADOFF: Investigators Probe Middlemen in Fraud CADENCE INNOVATION: Sued by GM for August 2008 Accommodation Pact CADENCE INNOVATION: Seeks April 23 Extension for Plan Filing CADENCE INNOVATION: Hillsdale Liens Challenge Period Extended CADENCE INNOVATION: Reaches Accommodation Deal with Chrysler CALIFORNIA COVE: U.S. Trustee Asks Court to Dismiss Case CENTERLINE HOLDING: Completes Financing Deal With Bank Lenders CHARLES TAGGART: Case Summary & 20 Largest Unsecured Creditors CHARTER COMMS: Discloses Resignation of Two Directors from Board CHINA AOXING: Working Capital Deficit Prompts Going Concern Doubt CHINA LOGISTICS: Files Second Amendment to 2007 Annual Report CHRYSLER LLC: Reaches Deal With Cadence on Accommodation Pact CIRCUIT CITY: Court Grants Final Approval to DIP Financing CIRCUIT CITY: Sec. 341 Meeting of Creditors Set for January 9 CIRCUIT CITY: Files Schedules of Assets and Liabilities CIRCUIT CITY: Files Statement of Financial Affairs COMPOSITE TECHNOLOGY: Auditor Raises Going Concern Doubt CORTE FRECCIA: Voluntary Chapter 11 Case Summary CUZZENS INC: Case Summary & 20 Largest Unsecured Creditors DANIEL BYERLY: Case Summary & 20 Largest Unsecured Creditors DESERT RIDERS: Case Summary & 20 Largest Unsecured Creditors DHP HOLDINGS: To Liquidate Business Under Chapter 11 DHP HOLDINGS: Case Summary & 35 Largest Unsecured Creditors DIAS HOLDING: Two Directors Voluntarily Resign DNC MULTIMEDIA: Case Summary & 20 Largest Unsecured Creditors DUNE ENERGY: Has Until January 14 to Submit NYSE Compliance Plan ECOLOGY COATINGS: Auditor Raises Going Concern Doubt ELAM TODD: Files for Chapter 7 Liquidation EMERGENCY CENTERS: Case Summary & 20 Largest Unsecured Creditors EQUISTAR CHEMICALS: Discloses Two Officers' Termination of Service ESTEVES CONCRETE: Files for Chapter 7 Protection EVEREST CONSTRUCTION: Files for Chapter 7 Liquidation FLYING J: Can Access Cash Collateral for Big West & Longhorn FLYING J: Organizational Meeting to Form Panel on January 5 FORD MOTOR: Kirk Kerkorian Sells Remaining Stake in Firm GENERAL MOTORS: Treasury Loans $1-Bil. for GMAC Rights Offering GENERAL MOTORS: Sues Cadence to Comply with Deal, Recover Tooling GLOBAL AIRCRAFT: Defaults on Victory Park Loans; Director Resigns GLOBAL MOTORSPORT: Plan Filing Period Extended to Dec. 29, 2008 GMAC LLC: Debt Exchange Offers Expire, Results Tabulation Ongoing GMAC LLC: U.S. Treasury Announces $5-Bil. TARP Investment GRACE WU: Case Summary & 20 Largest Unsecured Creditors GRAHAM PACKAGING: Names Mark S. Burgess as Chief Executive Officer GREEN BUILDERS: Auditor Raises Going Concern Doubt HAWAIIAN TELCOM: Bankruptcy Court OKs Transfer of Case to Hawaii HAWAIIAN TELCOM: Sec. 341 Meeting of Creditors on Jan. 27 HAWAIIAN TELCOM: Pimco and Capre Want to Join Creditors Committee HCA INC: Cuts Jobs, 90 Information Technology Employees Affected HELLER EHRMAN: Files for Chapter 11 Bankruptcy to Liquidate HELLER EHRMAN: Voluntary Chapter 11 Case Summary HEXION SPECIALTY: Cancels Notes Offering due to Merger Termination IAME GROUP: Case Summary & 20 Largest Unsecured Creditors IDEARC INC: Board Member Resigns, NYSE Suspends Stock Trading INDYMAC BANK: Sale to Private Equity & Hedge Fund Group Imminent INNOVEX INC: Auditor Raises Going Concern Doubt INTERMETRO COMMS: Names Fish as New CFO; Posts $1.8MM Loss in 3Q INTERSTATE BAKERIES: Incurs $41.4MM Loss for Nov. 15 Quarter INTERSTATE BAKERIES: May Liquidate if Exit Financing Talks Fail INTERSTATE BAKERIES: Lease Decision Period Extended to June 21 INTERSTATE BAKERIES: IRS Compromise Agreement Approved IOWA RENEWABLE: Auditor Raises Going Concern Doubt IVIVI TECHNOLOGIES: Posts $2.1MM Net Loss in Qtr. Ended Sept. 30 JASON WHITE: Case Summary & 20 Largest Unsecured Creditors JMYGEEZ INC: Chapter 7 Trustee Ready to Sell Assets on Jan. 8 JOHN JONES: Case Summary & 20 Largest Unsecured Creditors JORGE GONZALEZ-CARDONA: Case Summary & Largest Unsecured Creditor KB TOYS: Will Honor New Yorkers' Gift Cards KHALED ELWARACKY: Involuntary Chapter 11 Case Summary L.L. SWOR: Case Summary & 20 Largest Unsecured Creditors LAND RESOURCE: Obtains Final Authority to Secure DIP Financing LAND RESOURCE: Court Approves Bidding Procedures; Bid Protections LENNAR CORP: Amends Senior Unsecured Revolving Credit Facility LENNAR CORP: Posts $1.1 Billion Net Loss in Year Ended November 30 LEVEL 3 COMMUNICATIONS: Completes $373.8MM Offering of 15% Notes LEVEL 3 COMMUNICATIONS: Completes Convertible Notes Tender Offers LINENS 'N THINGS: Seeks Jan. 15 Auction for Intellectual Property MARITZA CAINS: Voluntary Chapter 11 Case Summary MEDIACOM COMMUNICATIONS: Grants Stock Options to Some Executives MICHAEL BERRIE: Case Summary & 20 Largest Unsecured Creditors MORTGAGEBROKERS.COM: Sept. 30 Balance Sheet Upside Down by $2MM NAVDEEP JAGGI: Voluntary Chapter 11 Case Summary NETVERSANT SOLUTIONS: To Sell Assets to Lender Patriarch Partners NEVADA UENO: Voluntary Chapter 11 Case Summary NEXCEN BRANDS: Sells Bill Blass Unit to Peacock for $10,000,000 NEXCEN BRANDS: Bill Blass Sale Prompts Amendment to BTMU Facility NORBRECK LLC: Case Summary & 20 Largest Unsecured Creditors NORTHWESTERN CORP: PSC Slaps $750,000 Fine on Violations OSCIENT PHARMA: NASDAQ Extends Temporary Suspension to 90 Days PALMS OF TREASURE ISLAND: Files for Bankruptcy in Florida PALMS OF TREASURE ISLAND: Voluntary Chapter 11 Case Summary PARENT CO: Files for Bankruptcy; DE Shaw Assumes Bank Debt PARENT CO: Case Summary & 40 Largest Unsecured Creditors PAUL FLORES: Case Summary & 20 Largest Unsecured Creditors PILGRIM'S PRIDE: Names Don Jackson as Chief Executive Officer PILGRIM'S PRIDE: Reports $998.6MM Net Loss for Fiscal Year 2008 PILGRIM'S PRIDE: To Cut 505 Jobs in Live Oak, Fla. in 2009 PILGRIM'S PRIDE: FMR LLC Discloses 2.33% Equity Stake POWERMATE CORP: Inks Confidential Settlement With Lowe's PRECISION PARTS: Section 341(a) Meeting Scheduled for January 20 PRIMEDIA INC: Board Approves $5 Million Stock Repurchase Program PRIMEDIA INC: Has until January 2 to Submit NYSE Compliance Plan RESIDENTIAL CAPITAL: GMAC's Private Debt Exchange Offers Expire RESIDENTIAL CAPITAL: Treasury Announces $5-Bil. TARP Investment RICKEY BYRD: Voluntary Chapter 11 Case Summary ROCK WELL: Files for Chapter 15 Bankruptcy in Wyoming RPM SOLUTIONS: Case Summary & 20 Largest Unsecured Creditors SEA CONTAINERS: Sells Interests in Societe Bananiere SEA CONTAINERS: Settles Trilogy Portfolio Claim for $4,300,000 SEA CONTAINERS: Assigns $2.8MM Intercompany Receivable SEA CONTAINERS: To Pay Goldman Sachs $17.5MM to Settle Claims SHEARIN FAMILY: Seeks to Obtain $10,600,000 Loan from GreenHawk SPECIAL DEVICES: Can Access $3,000,000 Wayzata DIP Facility SPECIAL DEVICES: Taps Brincko Associates as Financial Advisor SPO MEDICAL: Sept. 30 Balance Sheet Upside Down by $287,000 SPRINT NEXTEL: Reduces Virgin Mobile's Dec. 2008 Usage Payments SRA INC: Case Summary & List of Unsecured Creditors SYNTAX-BRILLIAN: Court Suspends Services of Examiner TEKNI-PLEX: Noteholders Relax Covenants Under 2012 & 2013 Notes TEKNI-PLEX: Mesterharm Steps Down as Restructuring Officer TERRA NOSTRA: Court Approves Involuntary Ch. 11 Petition TOUSA INC: Unsec. Creditors Defeat Lenders' Dismissal Motion UNI-MARTS: Has Until Feb. 23 to File Chapter 11 Plan VALLEY CLUB: Court Dismisses Chapter 11 Case VERASUN ENERGY: Can Employ AP Services as Crisis Managers VERASUN ENERGY: Seeks to Employ Deloitte Tax As Advisors VERASUN ENERGY: Committee Seeks to Retain Greenberg as Co-Counsel VERASUN ENERGY: Committee Seeks to Retain Houlihan as Co-Counsel VIREXX MEDICAL: Paladin Is Sole Shareholder; Obtains $1.25MM Loan VIRGIN MOBILE: Board Awards Restricted Stock Units to Directors VIRGIN MOBILE: Dec. 2008 Payment Under Sprint Pact Reduced VIRGIN MOBILE: No Exact Date Yet on Special Stockholders Meeting WARD CLEMMONS: Case Summary & 20 Largest Unsecured Creditors WASHINGTON COAST I: Voluntary Chapter 11 Case Summary WERNER LADDER: Judge Carey to Handle $1BB Suit vs. Shareholders WERNER LADDER: Fox Rothschild Sues Old Ladder for Fees WERNER LADDER: Wilkie Farr Faces Lawsuit for Negligence WERNER LADDER: Litig. Designee Wants PWC Fees Disgorged WILLIAM MULLENBACH: Case Summary & 20 Largest Unsec. Creditors YOUNG BROADCASTING: Gabelli Discloses 6.51% Equity Stake * Stevens & Lee's Goldberger Among First INSOL Int'l Fellows * Large Companies with Insolvent Balance Sheets ********* ABITIBIBOWATER INC: To Seek Payment From Ottawa for Assets ---------------------------------------------------------- Oliver Moore at Globe and Mail reports that AbitibiBowater Inc. said that the company would be seeking payment for its assets, for which Ottawa could be responsible as signatory to the North American free-trade agreement. Citing observers, Globe and Mail relates that AbitibiBowater's move would challenge whether Ottawa can sign treaties binding provinces without their consent. Premier Danny Williams, the report says, rushed through legislation to confiscate many of AbitibiBowater's assets in the province after the company said that it would close its mill. AbitibiBowater, according to Globe and Mail, alleges breach of NAFTA's Chapter 11 provisions on expropriation and compensation, minimum standard of treatment and non-discrimination. AbitibiBowater could bring its complaint before a NAFTA panel to determine its legal rights if the dispute can't be resolved within six months, the report says. "They're not going to settle the compensation in six months, I just don't think that could be done," Globe and Mail quoted Lawrence Herman, international-trade counsel at Cassels Brock & Blackwell LLP, as saying. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 27 pulp and paper facilities and 34 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the company is also among the world's largest recyclers of old newspapers and magazines, and has more third-party certified sustainable forest land than any other company in the world. AbitibiBowater's shares trade under the stock symbol ABH on both the New York Stock Exchange and the Toronto Stock Exchange. As reported in the Troubled Company Reporter on Nov. 13, 2008, AbitibiBowater Inc. reported a net loss of $302 million on sales of $1.7 billion for the third quarter 2008. These results compare with a net loss of $142 million on sales of $815 million for the third quarter of 2007, which consisted only of Bowater Incorporated. The company's 2008 third quarter results reflect the full quarter results for Abitibi-Consolidated Inc. and Bowater Incorporated as a combined company after their combination on Oct. 29, 2007. * * * AbitibiBowater Inc. still carries Fitch's 'CCC+' Issuer Default Rating assigned on April 1, 2008. Outlook is negative. ABLE ENERGY: Names O'Brien as CFO & Posts $1.5MM Net Loss in 3Q --------------------------------------------------------------- Able Energy, Inc., has appointed John F. O'Brien as Interim Chief Financial Officer to replace Daniel Johnston who is leaving the company for personal reasons. Mr. Johnston will continue to assist the company on a consulting basis as his time permits and as required by the company. Mr. O'Brien has an extensive background in financial accounting management, regulatory requirements of public companies, investment banking, private equity, M&A, financial operations and venture capital. He has managed numerous transactions related to mergers and acquisitions for clients ranging in size from small capitalization enterprises to Fortune 1000 companies, handled public market IPOs, and provided strategic and financial advisory services to both public and private corporations in a variety of industries. Most recently, Mr. O'Brien was a Managing Director at Aegis Capital Corp. Additionally, he has experience as the founder and CEO and CFO of MultiTechnics Corp. in Boston, MA, which was a multi-unit retail store chain. Earlier in his career, he also served as CFO of Miles River Development Corp., of Boston, a real estate development company. Mr. O'Brien holds a Bachelor of Arts degree in economics from Boston College. Gregory D. Frost, the company's CEO and Chairman, stated, ?We thank Mr. Johnston for all his hard work and contributions to the company, particularly in the preparation of our most recent financial reports. We are pleased to have Mr. O'Brien join us at this particularly challenging time and welcome his assistance in our effort to secure additional sources of capital to fund our operations and growth efforts. The current financial crisis in the US has presented us with similar difficulties as that of many other companies but we are making progress in stabilizing our business, cutting expenses and managing our limited resources.? The company will continue to engage outside, independent financial consultants to assist Mr. O'Brien with the preparation of the company's SEC filing requirements. Third Quarter Net Loss In a regulatory filing, Mr. Frost disclosed that the company has incurred losses from continuing operations during the three months ended September 30, 2008 of approximately, $1.5 million resulting in an accumulated deficit balance of approximately $32.1 million as of September 30, 2008. "Net cash provided by operations during the three months ended September 30, 2008, was approximately $1.3 million. The company had a working capital deficiency of $14.1 million. These factors raise substantial doubt about the company's ability to continue as a going concern." According to Mr. Frost, on May 30, 2007, the company completed a business combination with All American Plazas, Inc. now known as All American Properties, Inc. "The company is pursuing sales initiatives, cost savings and credit benefits as contemplated in the business combination including consolidation of business operations where management of the company deems appropriate for the combined entity. In order to conserve its capital resources and to provide incentives for the company's employees and other service vendors, the company expects to continue to issue, from time to time, common stock and stock options to compensate employees and non-employees for services rendered. The company is focusing on expanding its distribution programs and new customer relationships to increase demand for its products. In addition, the company is pursuing other lines of business, which include expansion of its current commercial business into other products and services such as solar energy and other energy related home services. The company is also evaluating, on a combined basis, all of its product lines for cost reductions, consolidation of facilities and efficiency improvements. There can be no assurance, however, that the company will be successful in achieving its operational improvements which would enhance its liquidity situation." "The company has been funding its operations through an asset- based line of credit and other financing facilities. Through the quarter ended September 30, 2008, the company has issued notes receivable and loans to other affiliates and to Properties, its largest stockholder, with a balance at September 30, 2008 of approximately $0.9 million. The company has granted Properties a series of extensions of the maturity of these obligations." As of September 30, 2008, the company's balance sheet showed total assets of $32,801,241, total liabilities of $27,944,777, and total stockholders' equity of $4,856,464. A full-text copy of the company's quarterly report is available for free at http://researcharchives.com/t/s?36e8 About Able Energy Able Energy Inc. is engaged in two primary business activities, organized in two segments: the Oil Segment and the Travel Plaza Segment. The company's Oil Segment is engaged in the retail distribution of, and the provision of services relating to, #2 home heating oil, propane gas, kerosene and diesel fuels. In addition to selling liquid energy products, the company offers complete heating, ventilation and air conditioning installation and repair and other services and also markets other petroleum products to commercial customers, including on-road and off-road diesel fuel, gasoline and lubricants. The company's Travel Plaza Segment, operated by its wholly-owned subsidiary All American Plazas, Inc., is engaged in the retail sale of food, merchandise, fuel, personal services, onsite and mobile vehicle repair, services and maintenance to both the professional and leisure driver through a network of travel plazas, located in Pennsylvania, New Jersey, New York and Virginia. AFC ENTERPRISES: Peninsula Capital Pares Equity Stake to 4.73% -------------------------------------------------------------- Scott Bedford disclosed in a regulatory filing with the Securities and Exchange Commission that his Peninsula Capital Management, LP and Peninsula Master Fund, Ltd., may be deemed to beneficially own 1,197,892 in the aggregate, or roughly 4.73%, of the common stock, $.01 par value, of AFC Enterprises, Inc., as of November 20, 2008. Prior to that, Peninsula held 1,285,701 or roughly 5.10%, of the company shares. Peninsula Capital may be deemed to be the beneficial owner of the securities by virtue of its role as the investment manager of the investment fund which owns such securities, according to Mr. Bedford. Mr. Bedford is the President of California-based Peninsula Capital Management, Inc., which is Peninsula Capital Management, LP's general partner. Henry Hope III, the company's chief financial officer, disclosed the acquisition of 2,250 company shares, to raise his stake to 26,517 shares. As of October 31, 2008 there were 25,295,273 shares of the company's common stock, par value $.01 per share, outstanding. On November 12, 2008, the company entered into amended and restated employment agreements with Harold M. Cohen, the Senior Vice President -- Legal Affairs, General Counsel, Chief Administrative Officer and Secretary of the company and its Popeyes Chicken & Biscuits division; and Mr. Hope, who also serves as Senior Vice President and Chief Financial Officer of the company and its Popeyes Chicken & Biscuits division. The new employment agreements are substantially similar to the employment agreements they replace, except that the new employment agreements (i) provide for an annual base salary of $280,000 for Mr. Cohen and $290,000 for Mr. Hope, (ii) incorporate changes to the benefit plans, incentive pay and severance benefits previously approved by the Board of Directors for Mr. Cohen and Mr. Hope, respectively and (iii) contain certain provisions to make them compliant with the requirements of, and final regulations promulgated under, Section 409A of the Internal Revenue Code of 1986, as amended. About AFC Enterprises Inc. Headquartered in Atlanta, Georgia, AFC Enterprises Inc. (Nasdaq: AFCE) -- http://www.afce.com/-- is the franchisor and operator of Popeyes(R) restaurants. As of July 13, 2008, Popeyes had 1,901 restaurants in the United States, Puerto Rico, Guam and 25 foreign countries. As of October 5, 2008, the company had $142.9 million in total assets, including $42.3 million in current assets; $47.4 million in total current liabilities and $136.3 million in total long-term liabilities; and $40.8 million in shareholders' deficit. The company also had $151.5 million in accumulated deficit. The company reported $4.0 million in net income for the 12 weeks ended October 5, 2008, on $38.3 million in total revenues. * * * As reported in the Troubled Company Reporter on Aug. 4, 2008, Moody's Investors Service assigned a Speculative Grade Liquidity rating of SGL-3 to AFC Enterprises Inc., indicating Moody's belief that the company should maintain adequate liquidity over the upcoming four quarters. AHAVA OF CALIFORNIA: Gets $3.5 Million Bid From FJB LLC ------------------------------------------------------- David Winters at Watertown Daily Times reports that FJB LLC of New York City has offered $3.5 million for Ahava of California LLC's plants in Ogdensburg and Lowville. As reported by the Troubled Company Reporter on Dec. 29, 2008, the U.S. Bankruptcy Court for the Central District of California approved, on a preliminary basis, the request of Ahava of California, LLC, to sell substantially all of its assets, subject to higher and and better offers. The auction will be held on Dec. 30, 2008, before the Bankruptcy Court. "This sale will transfer the title to any and all of the assets owned or used by Ahava of California," Watertown Daily quoted Josefina F. McEvoy at K&L Gates of Los Angeles, the attorney for Ahava of California, as saying. According to Watertown Daily, Ahava of California secured court approval to name FJB as the stalking horse at the auction for its assets. Based in Venice, California, Ahava of California, LLC, doing business as Ahava National Food Distributor and North Country Manufacturing, filed for Chapter 11 relief on July 15, 2008 (Bankr. C.D. Calif. Case No. 08-20524). Josefina F. McEvoy, Esq., at K&L Gates, LLP, represents the Debtor as counsel. When the Debtor filed for protection from its creditors, it listed assets of $1 million to $10 million and debts of $1 million to $10 million. ALLIED DEFENSE: MECAR Unit Gets $37,000,000 Subcontract ------------------------------------------------------- The Allied Defense Group, Inc.'s Texas-based wholly owned subsidiary, MECAR USA, has teamed with Alliant Techsystems in an $87,000,000 contract awarded by the U.S. Army Sustainment Command in Rock Island, Illinois, early this month. The $87 million contract requires Alliant to supply non-standard (non-NATO) ammunition in support of emergent requirements for Afghan National Security Forces. As subcontractor, MECAR USA will receive orders, potentially in excess of $37 million, to deliver various types of non-standard ammunition manufactured throughout the world. Team ATK has utilized its long standing position in the international ammunition community to qualify and secure high quality, reliable and competitive manufacturers and sellers of these rounds for the benefit of its customer and end users. Adequate Cash The Allied Defense Group said in a November regulatory filing with the Securities and Exchange Commission it believes it has adequate cash sources to fund operations for the remainder of 2008 based on its strong current backlog and its history of performing on a profitable basis when backlog is substantial. The company said it will have adequate cash to meet the convertible note holders "put" in December 2008 and January 2009. The company also said its management has begun the process of securing a long-term credit facility solution for its MECAR S.A. unit. Management believes that adequate opportunities will be available to finalize a long-term solution for the company's credit needs. Moreover, in October 2008, the company's Global Microwave Systems, Inc., subsidiary sold substantially all of its assets in a transaction that provided net proceeds of roughly $6,800,000 after repayment of $10,908,000 to the note holders, pursuant to the terms of the Convertible Notes and the repayment of the GMS acquisition promissory note of $3,392,000. MECAR Credit Facility In April 2008, MECAR reached an agreement with its existing bank group regarding its credit facility. The agreement provides for an expansion of the total credit facility from roughly $61,914,000 (EUR42,850,000) to $65,924,000 (EUR45,625,000). The credit facility was restructured and the portion designated for tax prepayments was terminated. The agreement provides for a cash line of $14,738,000 (EUR10,200,000) and performance bond and advance payment guarantee line of $51,186,000 (EUR35,425,000). The agreement required a partial repayment of MECAR's cash line of $7,369,000 (EUR5,100,000) in July 2008 and the remainder to be repaid by November 30, 2008. The performance bond and advance payment guarantee line expires on December 31, 2008. According to the company, after that date, it would be unable to issue any new performance bonds or advance payment guarantees without a new credit facility. Based on the timing of MECAR's shipments in July 2008, the company was unable to repay half of the cash line by July 31, 2008, but subsequently made the required repayments to the banking facility in the third quarter of 2008. In a November 13 filing, the company said that based on cash flow projections, it believes its MECAR subsidiary would be able to repay the remaining $7,369,000 (EUR5,100,000) by November 30, 2008, with cash generated from operations. The company has not provided updates on the payment. The company also said MECAR has shipments of roughly $52,258,000 (EUR36,167,000) -- which have occurred and are projected for the balance of the fourth quarter of 2008 to its largest client -- that will allow the subsidiary to generate cash in the fourth quarter in addition to other operating activities that will generate cash. In April 2008, MECAR's bank group received local government support that will guarantee an additional portion of MECAR's performance bonds and advance payment guarantees from May through November 2008. According to the company, the additional guarantee will reduce the required restricted cash balances at MECAR and allow the company to fund MECAR through its critical working capital expansion period. The agency began guaranteeing roughly 50% of MECAR's new performance bonds and advance payment guarantees in July 2007. Allied Defense said it is in discussions with members of the existing MECAR bank facility and other financial institutions to replace the existing credit facility. The anticipated new credit facility will have both a revolving cash line facility and performance bond and advance payment guarantee line like the existing facility. The company may look to expand the size of the performance bond and advance payment guarantee line to meet its projected requirements. According to the company, the refinancing of the credit facility, in some form, is critical to the company's ability to continue operations. Initial interest in establishing a new banking relationship has been expressed by certain existing bank group members although specific terms have not been documented at this time. At September 30, 2008, the company had $5,093,000 in cash on hand. For the nine months ended September 30, 2008, the company used $21,338,000 of cash for operating activities from continuing operations mainly related to increases in accounts receivable and costs and accrued earnings on uncompleted contracts at MECAR as it performs on its substantial backlog. The company does not anticipate continuing to use cash at this level for the remainder of 2008 as MECAR will increase its billings as the contracts in progress are shipped and generate cash collections from accounts receivable in the fourth quarter of 2008. Convertible Note Obligations As of September 30, 2008, the principal outstanding balance of the Convertible Notes was $19,876,000. The Convertible Notes have a put feature that allows the holders to put the notes back to the company on December 26, 2008, and January 19, 2009, based on the date of issuance. On October 10 through 14, 2008, the company received notices from all four of its note holders requiring the company to redeem all of the outstanding Notes at face value on December 26, 2008, and January 19, 2009. The company is required to redeem $8,039,000 on December 26, 2008 and $928,000 on January 19, 2009. The company said it would use the remaining GMS proceeds, its existing cash balances, and cash generated from operations, as needed, to repay the Convertible Notes. The company has not provided an update on the payments. Firm Commitments While the company is looking to secure long-term MECAR financing and be able to satisfy the put feature on its Convertible Notes, the company cautioned that there can be no assurance that: -- The company will be successful securing MECAR's long-term financing. -- The company will be successful generating adequate cash at its MECAR subsidiary in the fourth quarter of 2008 to repay its existing credit facility. -- The company will be successful in taking necessary steps to be in a position to satisfy the "put" of its senior secured convertible notes which will be made in December 2008 and January 2009. -- The company will be successful in its restructuring and turnaround efforts at its subsidiaries. -- The company will be able to meet the financial debt covenants of its debt instruments. The company noted in November that it has less than $200,000 of firm commitments for capital expenditures outstanding as of September 30, 2008. About Allied Defense Headquartered in Vienna, Virginia, The Allied Defense Group Inc. (Amex: ADG) -- http://www.allieddefensegroup.com-- is a diversified international defense and security firm which develops and produces conventional medium caliber ammunition marketed to defense departments worldwide. The company also designs, produces and markets sophisticated electronic and microwave security systems principally for European and North American markets. Going Concern Doubt BDO Seidman LLP, in Bethesda, Maryland, expressed substantial doubt about The Allied Defense Group Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm reported that in 2007 and 2006 the company suffered losses from operations. The auditing firm added that, in January and February 2008, the banking group of the company's key subsidiary sent notifications to the company of their intentions to terminate the credit facilities. Subsequently, in March 2008, the members of the banking group notified the company of their intentions to continue with the credit facility contingent upon the resolution of additional requirements. As of September 30, 2008, the company had $158,249,000 in total assets, $121,446,000 in total liabilities, and $36,518 in retained deficit. The company posted a $6,220,000 net loss on revenues of $50,813,000 for the three months ended September 30, 2008. ANTIGENICS INC: Faces Delisting from NASDAQ Stock Market Staff -------------------------------------------------------------- Antigenics Inc. received a letter from the Listing Qualifications Staff of The NASDAQ Stock Market LLC indicating that it had not regained compliance with Marketplace Rule 4450(b)(1)(A), requiring a minimum $50 million market value of listed securities for continued inclusion on The NASDAQ Global Market. The company said that it also receive a letter from the staff that it failed to comply Marketplace Rule 4450(b)(1)(A) and 4450(b)(1)(B) on Nov. 26, 2008. The Staff has indicated that the company's common stock is subject to delisting unless it requests a hearing before a NASDAQ Listing Qualifications Panel. The company said it intends to request a hearing before the Panel to present its plan to maintain continued listing. The company's shares will continue to be listed on The NASDAQ Global Market pending the issuance of the Panel's decision after the hearing. Alternatively, the company may apply to have its listing transferred to the NASDAQ Capital Market, provided that it satisfies the requirements for continued listing on that market at the time of transfer. Headquartered in New York City, Antigenics Inc. (NASDAQ:AGEN) -- http://www.antigenics.com/-- is a biotechnology company focused on developing technologies and product candidates to treat cancers and infectious diseases, primarily based on immunological approaches. The company's principal product candidate is Oncophage (vitespen), a patient-specific therapeutic cancer vaccine candidate that has been tested, or is being tested, in several cancer indications. ASTORIA BAY: Case Summary & Largest Unsecured Creditor ------------------------------------------------------ Debtor: Astoria Bay LLC 264 W Marine Drive Astoria, OR 97103 Bankruptcy Case No.: 08-37064 Chapter 11 Petition Date: December 22, 2008 Court: United States Bankruptcy Court District of Oregon Judge: Trish M. Brown Debtor's Counsel: Bradley L. Brown, Esq. 12725 SW Millikan Way #260 Beaverton, OR 97005 Tel.: (503) 469-1229 Email: blbrown360@hotmail.com Total Assets: $2,924,269 Total Debts: $2,620,394 The Debtor's Largest Unsecured Creditor: The Debtor disclosed that its largest unsecured creditor is Clatsop Clounty, owed $998. The petition was signed by Charles Taggart, Manager of the company. ATHEROGENICS INC: Order Allowing Severance Payment Now Final ------------------------------------------------------------ AtheroGenics, Inc., relates in a regulatory filing with the Securities and Exchange Commission that the order entered by the United States Bankruptcy Court for the Northern District of Georgia on November 18, 2008, approving the payment of severance to employees upon their involuntary separation from the company's employment is deemed final. According to the company, the objection period specified in the order expired December 8, 2008, and as a result the order is now final. Pursuant to the order, Drs. Medford and Montgomery, and Messrs. Colonnese and Gaynor will each receive a cash payment of $125,000 in the event of their involuntary separation from the company's employment -- other than a "for cause" separation. Since the amount is substantially lower than the amount of severance that would have been payable under each of the Named Executive Officer's employment agreement, each Named Executive Officer will also have a non-priority, general unsecured claim against the company's bankruptcy estate for such difference. Each Named Executive Officer will also be entitled to receive an additional incentive payment if the company's non-cash assets are sold for amounts that exceed certain thresholds approved by the Bankruptcy Court. Based in Alpharetta, Georgia, AtheroGenics, Inc. -- http://www.atherogenics.com/-- is a research-based pharmaceutical company focused on the discovery, development and commercialization of drugs for the treatment of chronic inflammatory diseases, including diabetes and coronary heart disease. It has one late stage clinical drug development program. On Sept. 15, 2008, five creditors holding claims totalling $20,413,000 pursuant to the company's 4.5% Convertible Notes Due 2008 filed an involuntary Chapter 7 petition against the Debtor (Bankr. N.D. Georgia Case No. 08-78200). The petitioning noteholders were: -- AQR Absolute Return Master Account, L.P.; -- CNH CA Master Account, L.P.; -- Tamalpais Global Partner Master Fund, LTD; -- Tang Capital Partners, LP; and -- Zazove High Yield Convertible Securities Fund, L.P. On Oct. 6, the Debtor filed its consent to entry for order for relief and motion to convert its Chapter 7 case to one under Chapter 11 (Bankr. N.D. Ga. Case No. 08-78200). AtheroGenics currently contemplates that its non-cash assets will be sold in the Chapter 11 proceeding, either through a motion under Section 363 of the Bankruptcy Code or through confirmation of a plan pursuant to Section 1129 of the Bankruptcy Code, and that the then-remaining cash assets together with the net proceeds generated through the sale of the non-cash assets will be distributed to its stakeholders, including its creditors. Due to the constraints imposed on AtheroGenics by the Chapter 11 Proceeding, AtheroGenics does not anticipate pursuing any clinical trials or other development activities relating to AGI-1067 or its other products during the course of the Chapter 11 Proceeding. As of September 30, 2008, AtheroGenics had $55,858,367 in total assets; $306,728,421 in liabilities subject to compromise and $303,060 in total current liabilities, not subject to compromise; and $251,173,114 in shareholders' deficit. The company reported a $29,789,408 net loss for the three months ended September 30, 2008, on $0 in total revenues. As of September 30, 2008, AtheroGenics had roughly $302.4 million of 2008 Notes, 4.5% Convertible Notes due 2011 and 1.5% Convertible Notes due outstanding and cash and cash equivalents of $52.7 million. Under the priority scheme established by the Bankruptcy Code, as a general rule, AtheroGenics' creditors will be entitled to receive any proceeds generated through the sale of AtheroGenics' non-cash assets before shareholders are entitled to receive any proceeds. The ultimate recovery by creditors and shareholders, if any, will not be determined until confirmation and implementation of a plan of liquidation. No assurance can be given as to what recoveries, if any, will be assigned in the Chapter 11 Proceeding to each of these constituencies. A plan of liquidation could result in AtheroGenics' shareholders receiving no value for their interests and holders of unsecured debt, including trade debt, receiving less, and potentially substantially less, than payment in full for their claims. Because of such possibilities, the value of the common stock and unsecured debt is highly speculative. Accordingly, AtheroGenics urges that appropriate caution be exercised with respect to existing and future investments in any of these securities. BALTIMORE OPERA: Fails to Refund Tickets Sold for Canceled Shows ---------------------------------------------------------------- Tim Smith at Baltimoresun.com reports that The Baltimore Opera Co. failed to refund tickets sold to the canceled spring productions of Rossini's The Barber of Seville and Gershwin's Porgy and Bess. Baltimoresun.com quoted Baltimore Opera General Manager M. Kevin Wixted as saying, "Since we're in Chapter 11 bankruptcy, ticketholders are the same as anybody else in the creditor line." According to Baltimoresun.com, four major arts organizations -- the Baltimore Symphony Orchestra, Washington National Opera, Centerstage and the Hippodrome -- will offer a gift of free tickets to patrons of Baltimore Opera. Baltimoresun.com relates that 3,800 households, representing an estimated 7,200 Baltimore Opera subscribers and single-ticket buyers, will receive in the mail a voucher for a free ticket to one of a dozen performances in the region. According to the report, Mr. Wixted said, "This was an unsolicited idea from these organizations. It's a good marketing strategy for them, and an opportunity for our opera patrons to sample other performing arts." In a statement on its bankruptcy filing, BOC management said that, during the past few months, it explored alternatives to strengthen the company's financial base; however, harsh economic conditions placed ongoing operations in jeopardy. "We regret the impact that this will have on our creditors and our associates, but we take this action in order to preserve one of the regions most significant cultural institutions." Baltimore Opera -- http://www.baltimoreopera.com-- held opera shows in Baltimore, Maryland. Michael Harrison is the company's artistic director. The Baltimore Opera Co. filed for Chapter 11 protection before the U.S. Bankruptcy Court for the District of Maryland on December 10, 2008. BARRATT AMERICAN: Dispute With Lender Leads to Chapter 11 Filing ---------------------------------------------------------------- Mike Freeman at SignOnSanDiego.com reports that Barratt American Incorporated filed for bankruptcy reorganization, two days after its key lender Bank of America foreclosed on seven of the Debtor's subdivisions and condo projects. The Debtor and three sister companies, including its mortgage lending arm, filed for bankruptcy protection, listing creditors are mostly trade contractors, SignOnSanDiego.com relates. The Debtor, says the report, had more than $21 million in unsecured debts. According to SignOnSanDiego.com, Bank of America claims that the Debtor owes it almost $79 million. Bank of America is taking back four other projects in Riverside and San Bernardino counties, the report states. Citing Barratt American President Michael Pattinson, SignOnSanDiego.com relates that in Bank of America refused to extend loans on two of the company's subdivisions in North County in August 2007, forcing the company to stop construction while some homes were in escrow. The report says that Bank of America then froze its $125 million line of credit while it reappraised the Debtor's assets securing the loan. Mr. Pattinson said that $71 million of the line was drawn at the time, and the company paid down the principal on the credit line by about $30 million, the report states. SignOnSanDiego.com states that Bank of America didn't renew the credit line. Barratt American stopped making interest payments in March 2008, according to the report. The report says that Bank of America began foreclosure proceeding on 11 subdivisions or condo projects that secured the note, taking back these projects: -- Magnolia Estates in Carlsbad, -- Nantucket in Encinitas, -- Aragon in La Mesa, and -- City Square in Escondido. SignOnSanDiego.com relates that the Debtor has drastically cut operations in the past several months, reducing employees to 15 from 140. Mr. Pattinson, according to SignOnSanDiego.com, said that the company will continue constructing custom homes and replacing homes for victims of the 2007 wildfires. The Debtor hopes to reorganize and start building new homes again in 2010, SignOnSanDiego.com reports. SignOnSanDiego.com quoted Mr. Pattinson as saying, "What we'll do is work with new financial partners and basically restart." Citing Mr. Pattinson, SignOnSanDiego.com relates that some of The Debtor's remaining projects -- including the proposed 1,400-home Fanita Ranch development in Santee that is a separate limited partnership of which the Debtor is the managing member -- were excluded from the bankruptcy. SignOnSanDiego.com says that Guaranty Bank issued in October 2008 a notice of default against Fanita Ranch L.P., the partnership developing Fanita Ranch. Guaranty Bank, according to SignOnSanDiego.com, claims it is owed almost $27 million in principal and interest on the undeveloped land. Barratt American officials said that they're looking for a financial partner for the Fanita Ranch project, SignOnSanDiego.com states, citing Santee Mayor Randy Voepel. SignOnSanDiego.com relates that work on the project could be delayed for as much as five years due to poor market and a lawsuit on the city's approval of the project. Carlsbad, California-based Barratt American Incorporated -- http://www.barrattamerican.com/-- and its affiliates is a privately-owned home builder in Southern California. The Companies filed for Chapter 11 protection on Dec. 24, 2008 (Bankr. S. D. Calif. Case No. 08-13249). Marc J. Winthrop, Esq., at Winthrop Couchot Professional Corp. represented the companies in their restructuring efforts. The companies listed assets of $10 million to $50 million and debts of $100 million to $500 million. BERNARD L. MADOFF: Investigators Probe Middlemen in Fraud --------------------------------------------------------- Bernard L. Madoff fraud investigators have started to focus on the middlemen who attracted billions of investment dollars to Mr. Madoff's funds, Jenny Strasburg at The Wall Street Journal reports, citing a person familiar with the matter. According to WSJ, the source said that authorities want to know what the middlemen told clients about how their money was being invested, and whether they disclosed Mr. Madoff's involvement in managing customer funds. Those middlemen also say that they have lost sizeable personal fortunes from the fraud, WSJ relates. The report says that there are no allegations that the middlemen knew anything about Mr. Madoff's scheme. WSJ states that to keep the money flowing Mr. Madoff turned to a diverse group of middlemen, who received fees from Mr. Madoff and many of them became wealthy. Clients, according to the report, have sued some middlemen, claiming that the middlemen neglected their duties to detect fraud and that they didn't reveal they were actually invested with Mr. Madoff. Madoff Latin American Fraud Victims WSJ relates that the private nature of Latin American fortunes, worries about security, and concerns about tipping off local tax authorities made many wealthy Latin Americans who invested in Mr. Madoff's business reluctant to step forward. WSJ quoted Mexican corporate lawyer Ernesto Canales as saying, "[Banco] Santander clients in Monterrey were invited to invest in that fund." According to the report, Mr. Canales said that with Santander's size in Mexico and the size of its acknowledged losses, the bank's Mexican customers may have lost as much as $300 million. The Fairfield Greenwich Group, which had a Brazilian presence, invested in Mr. Madoff's business, says WSJ. Fairfield Greenwich posted on its Web site that it employed Bianca Haegler as its representative in Brazil. The report states that Fairfield Greenwich's Sentry fund was Mr. Madoff's largest single investor, with $7.5 billion investment in Ponzi scheme. 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. As reported by the Troubled Company Reporter on Dec. 15, 2008, 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 estimated the losses from Madoff's fraud were at least $50 billion. CADENCE INNOVATION: Sued by GM for August 2008 Accommodation Pact ----------------------------------------------------------------- General Motors Corporation sued Cadence Innovation LLC and its affiliates before the U.S. Bankruptcy Court for the District of Delaware. In its complaint filed on Dec. 24, 2008, General Motors seeks the Debtors' specific performance on an Accommodation Agreement dated August 26, 2008. GM complains that in direct contravention of the Accommodation Agreement, the Debtors are holding hostage tooling and equipment critical to the manufacture of GM vehicles. While GM's right to possession of the tooling and equipment is indisputable, the Debtors' failure to turn over the Tooling and Equipment and interference with GM's legal purchase rights is unjustified and threatens GM's vehicle assembly operations, James S. Yoder, Esq., at White & Williams LLP, in Wilmington, Delaware, argues, on GM's behalf. Mr. Yoder relates that before the Petition Date, GM and the Debtors are parties to purchase orders, whereby the Debtors sold to GM component parts for installation into new vehicles and tooling for the production of the component parts. The Debtors are the sole source suppliers to GM of the Component Parts. The Component Parts are essential to GM's manufacturing and assembly operations and without sufficient quantities of the Component Parts, GM cannot maintain production, Mr. Yoder says. A day's disruption in supply of certain Component Parts could cause a shutdown of GM assembly operations, he avers. The Accommodation Agreement By August 2008, the parties entered into an Accommodation Agreement, whereby GM provided accommodations to the Debtors, including certain prepayments and payments made in satisfaction of commercial issues; expedited payment terms; funding for certain tooling; and certain credit enhancements. GM also agreed not to re-source its production unless an event of default occurred of the Debtors commenced a liquidation. In return, the Debtors were required to continue to manufacture GM's required quantities of Component Parts and to provide GM immediate possession of tooling and related equipment used to produce the Component Parts. Under the Accommodation Agreement, any and all Tooling utilized to manufacture Component Parts is deemed to be Customer Tooling, owned by GM and subject to GM's immediate possession. GM was also granted an option to purchase and the right to take immediate possession of all or any Supplier Owned Tooling and all or any machinery or equipment used in the manufacture of the Component Parts. GM noted that in the week of December 15, 2008, it advised the Debtors of its intention to exercise its option to purchase certain Designated Equipment. However, despite GM's requests, the Debtors have not obtained an appraisal of Designated Equipment by Hilco Industrial. The Debtors also conditioned the release of the Designated Equipment subject to a post-transfer appraisal and GM's commitment to make payment promptly upon the completion of the appraisal. The Debtors' Default The Debtors, however, defaulted under the Accommodation Agreement when they failed to meet any of the set Sales Milestones under the Agreement despite an extension of time agreed by GM, according to Mr. Yoder. The Debtors have withdrawn their Motion to Sell Michigan Plants and have informed GM of the orderly liquidation of the estates. Mr. Yoder asserts that GM will suffer significant and irreparable harm if its supply of Component Parts is interrupted and possession of Tooling and Designated Equipment is withheld. To protect GM's supply of Component Parts and prevent a shutdown of its vehicle assembly operations, he continues, it is critical that GM be permitted to immediately remove the Customer Tooling and Designated Equipment from the Chesterfield Facility. Mr. Yoder tells the Court that the Debtors have failed to release the Customer Tooling to GM and did not cooperate with its removal for GM to resource production. The Customer Tooling is highly specialized and it would take a long lead time for its production, he says. GM says despite its demands, the Debtors refused to turn over the Customer Tooling and thus, substantially impairing not only the value of the Customer Tooling but GM's ability to mitigate its damages as well. Moreover, GM, must by January 12, 2009, have a successor supplier in place and producing Component Parts for the launch of the new Chevrolet Camaro, Mr. Yoder adds. Given the quantities of Component Parts that GM has on hand and the time it will take to resource production, if Debtors fail to allow GM immediate possession of the Customer Tooling and the Designated Equipment, GM's vehicle assembly operations will be interrupted, he points out. GM asks the Court to: (a) compel the Debtors to specifically perform their obligations under the Accommodation Agreement, including GM's immediate possession of the Customer Tooling; (b) grant it continuous access to Debtors' facilities to allow it to retrieve the Customer Tooling; (c) immediately allow it to take possession of the Designated Equipment pending an appraisal and payment of the purchase price; (d) engage Hilco to appraise Designated Equipment; and (e) order the Debtors to sell to GM the Designated Equipment per the pricing terms provided in the Accommodation Agreement. GM also argues that the Debtors are in breach of the accommodation Agreement by refusing to grant GM immediate possession of the Customer Tooling, and preventing GM from exercising the Designated Equipment Option. The Debtors have wrongfully exerted dominion over GM's property resulting to its incurrence of damages, Mr. Yoder contends. GM thus asks the Court to (i) enter a judgment its favor and against the Debtors for damages arising from the Debtors' breaches and conversion of the Customer Tooling; and (ii) grant it treble damages pursuant to statute. GM further asks the Court to declare that: (a) it has no obligations and commitments to the Debtors, with respect to its right to immediate possession of the Customer Tooling and exercise of the Designated Equipment Option, other than those obligations set forth in the Accommodation Agreement; and (b) it has not breached any obligation or commitment to the Debtors under the Accommodation Agreement and that, except for payments relating to GM's exercise of the Designated Equipment Option, GM has not liability to the Debtors under the Accommodation Agreement. GM also seeks an award of its litigation costs, including attorneys' fees. Adversary Proceeding, Not Motion Before the filing of the suit, GM filed a motion to compel Cadence to comply with the Accommodation Agreement. Norman L. Pernick, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, Cadence's counsel, asserted that as a matter of law, GM's Motion must be denied because Rule 7001 (1) and (7) of the Federal Rules of Bankruptcy Procedure designate that GM can only seek approval of its Motion through an adversary proceeding and a complaint as well as a motion for a temporary restraining order and a preliminary injunction. To the extent the Court further considers GM's Motion, the Motion should be denied because it is unwarranted and should never have been filed, the Debtors contend. Moreover, Mr. Pernick clarified that the Debtors did not refuse to release certain Tooling to GM. With an adversary proceeding before the Court, he maintained, the evidence will show that despite difficulties created by GM's own conduct, the Debtors have made extraordinary efforts to fulfill their performance obligations under the Accommodation Agreement. Mr. Pernick also asserted that GM does not have the right to take possession of the Designated Equipment until GM first pays the purchase price. He said that the Debtors did request Hilco to appraise the Designated Equipment, but Hilco omitted from its appraisal a significant portion of the Designated Equipment on which the Debtors spent millions of dollars to make parts for GM. "GM now wants to seize the equipment without paying for it, simply because Hilco did not include the equipment in its appraisal," Mr. Pernick said. "Not only is GM's Motion with respect to the Designated Equipment inconsistent with the Accommodation Agreement, but also violates any basic notion of fairness and reasonableness." Mr. Pernick also disclosed that GM agreed to fund its allocable share of winddown costs for the Debtors, but failed to do so despite the Debtors' repeated requests. He emphasized that the Debtors have incurred significant costs, in million of dollars, to ensure that GM would enjoy a smooth transition from the Debtors' production of component parts vital to the manufacture of GM vehicles to GM's new supplier, at significant expense to the Debtors' estates. Unless and until GM fulfill its own material obligations under the Accommodation Agreement, and completes a materially acceptable Liquidation Budget, it should not be permitted to enforce the Accommodation Agreement, Mr. Pernick said. 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 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 US$10 million and US$50 million, and debts of between US$100 million and US$500 million. (Cadence Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) CADENCE INNOVATION: Seeks April 23 Extension for Plan Filing ------------------------------------------------------------ Cadence Innovation LLC and its affiliated debtors ask the U.S. Bankruptcy Court for the District of Delaware to extend: (i) their exclusive period to file a Chapter 11 plan through and including April 23, 2009; and (ii) their exclusive period to solicit acceptances of that plan through and including June 22, 2009. Pursuant to Section 1121(b) of the Bankruptcy Code, a chapter 11 debtor has the exclusive right to file a plan of reorganization during the first 120 days following the filing of its chapter 11 petition, and thereafter to solicit acceptances to any plan so filed for a period of an additional 60 days. Moreover, Section 1121(d) provides that a court may, for cause, extend or reduce a debtor's exclusive plan period up to 18 months, and the exclusive solicitation period up to 20 months, after the Petition Date. The current period within which the Debtors may exclusively file a plan of reorganization expired on December 24, 2008, and the exclusive period within which they may solicit acceptances for that plan will expire on February 22, 2009. Patrick J. Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, asserts that the Debtors' request extension is warranted for these reasons: (1) Within a four-month period after their petition filing, the Debtors have made significant progress in resolving many of the issues facing the estates. Among others, the Debtors have devoted extensive efforts in negotiating and implementing (i) Accommodation Agreements with General Motors Corporation and Chrysler LLC and (ii) DIP financing, and marketing substantially all of their assets. (2) An extension of the Exclusive Periods will provide the Debtors with reasonable opportunity to continue the sale And wind-down process and consummate all of the closings contemplated by the process; and to develop, negotiate and confirm what will be a consensual liquidating plan, without prejudicing any party-in-interest. (3) The Debtors' bankruptcy cases are complex, and certain substantial issues remain unresolved, including the validity, amount, and priority of claims against the estates. Mr. Reilley contends that given their substantial efforts since the Petition Date, the Debtors should be granted additional time to continue the sale process through the controlled liquidation and develop a liquidating plan without distraction, and without the potential adverse effect of competing plans filed by other parties-in-interest. Formulation of a plan after there is more clarity on the sale process is the most efficient and reasonable path for the Debtors' estates, he points out. The Debtors add that they have attempted to quantify the amount of existing administrative, priority and unsecured claims against their estates. While the Schedules and Statements have been filed, the Debtors assert that they need more time to review and analyze those claims. The Debtors are also evaluating which leases and executory contracts are to be rejected, or assumed and assigned to potential purchasers. Moreover, the Debtors and their professionals require additional time to develop, negotiate, file and solicit acceptances of a plan or plans of reorganization and a disclosure statement that contains adequate information under Section 1125 of the Bankruptcy Code, Mr. Reilley says. More importantly, he notes, the Debtors have undertaken substantial efforts to administer their bankruptcy cases as efficiently as possible to minimize administrative expenses and maximize recovery available to their creditors. There can be no doubt that the Debtors have acted diligently in the initial three months of their reorganization cases, he attests. Mr. Reilley, however, admonishes that termination of the Debtors' Exclusive Periods at this time might give rise to the concomitant threat of multiple plans and a contentious confirmation process. Litigation and resulting administrative expenses, he cites, would serve only to decrease recoveries to the Debtors' creditors and delay the Debtors' ability to confirm a plan in their Chapter 11 cases, particularly where the plan will be a liquidating one. The requested extension will further the Debtors' efforts to preserve value and to avoid unnecessary and wasteful litigation, Mr. Reilley asserts. He clarifies that the Debtors are not seeking an extension to unduly pressure creditors. The Debtors aver that the extension will facilitate their efforts by providing a full and fair opportunity to complete or make substantial progress on the sale process and propose and seek acceptances of a Chapter 11 plan that embodies the results of a fully consummated Asset Sale Plan and provides equitable distribution of the Debtors' assets to the holders of valid claims against their estates. Mr. Reilley informs the Court that the Debtors are pursuing an extremely aggressive timeline for the marketing of their assets and have been spending considerable time pursuing potential purchasers and attempting to reach acceptable sale arrangements. Given those exigencies, he maintains, it is premature for the Debtors at this point to file a plan of reorganization in their cases. The Court will convene a hearing on January 16, 2009, to consider approval of the Debtors' request. By application of Rule 9006-2 of the Local Rules of Bankruptcy Practice and Procedures of the United States Bankruptcy Court for the District of Delaware, the Exclusive Plan Proposal Period is automatically extended until the conclusion of the hearing 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 US$10 million and US$50 million, and debts of between US$100 million and US$500 million. (Cadence Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) CADENCE INNOVATION: Hillsdale Liens Challenge Period Extended ------------------------------------------------------------- Bank of America, N.A., the administrative agent of the lenders under the debtor-in-possession loans granted to Cadence Innovation, LLC, has agreed to extend through Dec. 30, 2008, the deadline for the official committee of unsecured creditors to challenge or object to any existing lender liens with respect to the Debtors' real property located at 29 Superior Street, in Hillsdale, Michigan. The U.S. Bankruptcy Court for the District of Delaware, in its order authorizing Cadence to obtain debtor-in-possession financing from its existing lenders, had given the creditors committee until Dec. 16, 2008, to object or challenge any existing lender liens. The Court has approved the stipulation reached by BofA and the creditors committee. 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 US$10 million and US$50 million, and debts of between US$100 million and US$500 million. (Cadence Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) CADENCE INNOVATION: Reaches Accommodation Deal with Chrysler ------------------------------------------------------------ Cadence Innovation LLC has reached an agreement with Chrysler LLC, Chrysler Motors LLC, and Chrysler Canada Inc., regarding the parties' August 2008 Accommodation Agreement, under which Cadence will make some payments to Chrysler. Chrysler had asked the U.S. Bankruptcy Court for the District of Delaware to compel Cadence to comply with the Accommodation Agreement. In August 2008, the Debtors entered into the Accommodation Agreement with Bank of America N.A. and Chrysler, whereby Chrysler and BofA provided financial and other accommodations to the Debtors. Specifically, under the Agreement, with the Court's consent, Chrysler provided the Debtors a DIP financing, payment of certain disputed amounts, acceleration of payment terms, restriction on re-sourcing rights, and limitation of set-off rights. The Accommodation Agreement required the Debtors to close a sale of their assets by December 15, 2008. It also includes other "sale milestones" to be accomplished by the Debtors. Subsumed in the Accommodation Agreement are (i) a tooling acknowledgement, (ii) a lease option, and (iii) an equipment purchase option: A. Tooling Acknowledgement. The Debtors agreed that all tooling they utilized to manufacture component parts for Chrysler is owned by Chrysler and is being held by the Debtors, on a bailment basis. The Debtors further agreed that Chrysler has the right to take immediate possession of the Tooling. They also agreed to assist Chrysler on the Tooling removal, if necessary. In the event of dispute over the ownership of the Tooling, Chrysler will prevail as the Tooling would be presumed as its own pending resolution of the dispute and would have the right to take immediate possession of the Tooling even if resolution is pending. B. Lease Option. The Debtors granted Chrysler the option to lease their Masonic facility for $175,000, which lease option is exercisable on the occurrence of an Event of Default or the Debtors' failure to meet a Sales Milestone with respect to the Masonic Facility. In a written notice on November 30, 2008, Chrysler informed the Debtors of its intent to exercise the Lease Option, effective January 1, 2009, pending completion. In turn, the Debtors demanded to Chrysler payment of collateral issues as employee severance and disputed commercial claims that were not contemplated or required by the Lease Option, Adam G. Landis, Esq., at Landis Rath & Cobb LLP, in Wilmington, Delaware, confirms. C. Equipment Purchase Option. The Debtors granted Chrysler "an irrevocable and exclusive option . . . to purchase all or any Supplier Owned Tooling and all or any machinery or equipment that is owned by the Debtors and is necessary or helpful to manufacture of component parts for Chrysler at the prices set forth in the Accommodation Agreement." Chrysler could exercise the Equipment Purchase Option upon (i) an event of Default; (ii) expiration of the Accommodation Agreement; or (iii) resourcing of the manufacture of the component parts to a substitute supplier. Upon the exercise of the Equipment Purchase Option, Chrysler will have the right to take immediate possession of the purchased equipment. Under the Accommodation Agreement, Chrysler may also exercise the "Right of Access" under that certain Access and Security Agreement. On Chrysler's behalf, Adam G. Landis, Esq., at Landis Rath & Cobb LLP, in Wilmington, Delaware, asserted that Chrysler is entitled to exercise the Lease Option as evidenced by the Debtors' failure to meet the Sale Milestones and their orderly liquidation. In the same way, he avers, Chrysler's immediate possession of the Facility will ensure continued production of component parts and assembly and sale of Chrysler vehicles. Due to the Debtors' failure to meet the Sale Milestones, Chrysler informs the Court that it had resourced production of its component parts to other suppliers. Chrysler adds that despite repeated demands, the Debtors refused to relinquish the Tooling and assist in its removal. The Debtors demanded Chrysler to pay certain disputed amounts arising from commercial claims and not from the Tooling, before they'll assist in the Tooling removal, according to Mr. Landis. "The Accommodation Agreement expressly prohibits this type of hostage-taking behavior." Nevertheless, Chrysler is prepared to immediately escrow any disputed Tooling payment in line with its obligations under the Accommodation Agreement, Mr. Landis says. Moreover, if the Debtors refuse to lease the Facility to Chrysler, Chrysler asserts it is entitled to exercise its Right of Access because a default has occurred under the Access and Security Agreement; and given the Debtors' liquidation, it cannot be denied that additional defaults are likely to occur and the Debtors will be unable to continue production at the Facility. Chrysler was concerned it would suffer immediate and irreparable harm if the Debtors are not required to adhere to their obligations under the Accommodation Agreement. The Debtors have stated, Mr. Landis points out, that they will not borrow additional funds and will stop production for Chrysler on December 19, 2008, as Chrysler enters its extended holiday shutdown. Specifically, Chrysler sought to require the Debtors to comply with the Accommodation Agreement by: (a) authorizing Chrysler to immediately possess all tooling in the Debtors' possession used to manufacture component parts for Chrysler; (b) immediately leasing to Chrysler the Masonic Facility; and (c) immediately selling to Chrysler all equipment or machinery in the Debtors' possession that is necessary to the manufacture of component parts for Chrysler. Parties' Stipulation The terms of the parties' agreement are: (1) Chrysler will pay the Debtors $4 million in cash. The first $3 million will be wired to the Debtors and the remaining $1 million will be held in escrow by BBK Ltd and will be disbursed to the Debtors upon execution by the parties of the Masonic Lease. If the Masonic Lease is not executed by parties by January 15, 2009, the Holdback will be disbursed to Chrysler. (2) Upon payment of the Settlement Amount, the Debtors, as borrowers to the Second Amended and Restated Credit Agreement, will be fully and finally released and all rights of Chrysler as a Term Lender will be extinguished. Among others, the Debtors will not be required to obtain the consent of Chrysler to payments to employees pursuant to the Employee-Based Retention Plans Order while Chrysler is under no obligations to fund the Plans. (3) Chrysler is authorized to take possession of all Tooling in the Debtors' premises and the Debtors will cooperate in the tooling removal. The Debtors will comply with the Accommodation Agreement by conforming to the re-sourcing scheduling so that Tooling can be removed by December 23, 2008. (4) To the extent the appraisal performed by Hilco Industrial did not appraise specific equipment optioned by Chrysler, Chrysler will be allowed to take possession of the equipment subject to the Debtors' ownership interest and the Lender's continuing security interests upon placement of amount demanded by the Debtors into an escrow account. The money will be disbursed upon further Court order. (5) The parties' Stipulation will effect a global settlement of all issues between Chrysler and the Debtors, and Chrysler is released, discharged and waived from all claims, causes of action and obligations, except for these payments which will be paid under the terms of the Accommodation Agreement: * Payments owed by Chrysler for shipments of Component Parts after August 26, 2008, at prices in effect in Chrysler's invoices. * Payments owed by Chrysler for Designated Equipment. * Engineering services or other services requested by Chrysler from the Debtors under the Accommodation Agreement. * Obligations under the Stipulation and the contemplated agreements. * In the event the Debtors receive payment from Chrysler for amounts related to retroactive purchase adjustments, Chrysler will be entitled to setoff and recoup the overpayment against amounts due and owing for Component Parts shipped after August 26, 2008. The parties also agree that the Masonic Lease will contain terms consistent with the Accommodation Agreement, including: (1) Chrysler will provide the Debtors with a $320,000 security deposit, constituting two months of Base Rent under the Masonic Lease, as security for Chrysler's payment obligations under the Masonic Lease. The Security Deposit will be maintained in an escrow account. (2) Chrysler will not have any guaranty, indemnity or other payment obligation related to premises liability exceeding the cost of insurance premiums funded by Chrysler, including environmental claims. Chrysler and Masonico will enter into a new access and security agreement, as to which the Debtors and Lender will be parties. The Events of Default will be amended to provide that an Event of Default will occur if Masonico interfere and threaten to jeopardize Chrysler's ability to rely on Masonico for the production of component parts; and the Debtors will not seek to make demands on Chrysler inconsistent with the Masonic Lease. (3) The New Access Agreement will further provide that in the event Chrysler elects to exercise its Right of Access, Chrysler will continue to pay all of its accrued and unpaid obligations to the Debtors. The Old Access and Security Agreement remains in full force and effect. (4) In the event Chrysler purchases the leased equipment located at Masonic or assumes the Debtors' obligations to the lessors, then the monthly base rent due under the Masonic Lease be reduced by $10,000 per month. (5) The parties will conduct a physical inventory at Masonic, and Chrysler will pay the Debtors for all work-in-progress at Masonic on the effective date under the Masonico Operating Agreement for 90% of the book value of the WIP as determined by physical inventory. A copy of the Cadence-Chrysler Stipulation is available for free at http://bankrupt.com/misc/Cadence_ChryslerStipulation.pdf The Court approves the parties' Stipulation. At the Debtors' behest and as a condition to the Masonic Lease, the Court places under seal the full and unredacted version of the Chrysler Stipulation. 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. 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 US$10 million and US$50 million, and debts of between US$100 million and US$500 million. (Cadence Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) CALIFORNIA COVE: U.S. Trustee Asks Court to Dismiss Case -------------------------------------------------------- Peter C. Anderson, the U.S. Trustee for Region 16, asks the U.S. Bankruptcy Court for the Central District of California to dismiss California Cove at San Elijo, LLC's Chapter 11 case for these reasons: 1) relief from stay has been granted as to the Debtor's primary asset; and 2) the Debtor has never filed any operating reports. The U.S. Trustee for Region 16 says that AmTrust Bank obtained relief from the automatic stay on Dec. 1, 2008, with respect to the Debtor's primary asset consisting of 52 finished lots, 6 model homes, 4 production homes and 42 finished lots in San Marcos, California, and because of this, there is no reasonable likelihood of rehabilitation. In addition, the Debtor has not filed any operating reports since it filed for bankruptcy on Sept. 5, 2008. Headquartered in Irvine, California, California, Cove at San Elijo LLC is a home builder and developer. The company filed for Chapter 11 protection on Sept. 5, 2008 (Bankr. C.D. Calif. Case No. 08-15506). David M. Poitras, Esq., at Jeffer, Mangels, Butler & Marmaro LLP, in Los Angeles, California, represents the Debtor as counsel. Nathan A. Schultz, Esq., at Greenberg Traurig, LLP, represents the Offical Committee of Unsecured Creditors as counsel. In its schedules, the Debtor listed assets of $44,584,741 and debts of $65,380,351. CENTERLINE HOLDING: Completes Financing Deal With Bank Lenders -------------------------------------------------------------- Centerline Holding Company has closed an agreement with its bank lenders modifying its corporate debt facilities and extending the maturity date of its term loan to Dec. 31, 2009, and its revolving credit facilities to Sept. 30, 2010. With the previous refinancing of certain of its CMBS assets, the company now has no corporate debt maturities prior to the end of 2009. According to Marc D. Schnitzer, CEO and President, "Closing our financing agreement reflects the confidence of our seven bank lenders in the stability and strength of our platform as well as the quality of our people." "We have been in business for over 36 years," noted Mr. Schnitzer. "We are doing business today and we intend to continue doing business. And we intend to maintain our same high service delivery level as we develop new products and innovations to meet the challenges of the changing real estate capital markets." About Centerline Capital Group Headquartered in New York, New York, Centerline Capital Group -- http://www.centerline.com-- a subsidiary of Centerline Holding Company (NYSE:CHC), is an alternative asset manager focused on real estate funds and financing. As of March 31, 2008, Centerline had more than $12 billion of assets under management. It sponsors funds of low-income housing tax credits on behalf of institutional and retail investors. It has raised more than $8 billion used to finance and develop affordable housing properties throughout the U.S. It also provides management and advisory services to its parent company and some of its other subsidiaries, as well as to publicly traded real estate investment trust American Mortgage Acceptance Company. Centerline has nine offices throughout the United States. * * * As reported by the Troubled Company Reporter on Nov. 4, 2008, Moody's Investors Service lowered the corporate family rating of Centerline Holding Company to B2 from B1. The rating remains under review for possible downgrade. This follows the deferment of payment by Centerline's term loan lenders for 21 days; the amount that had been due October 31st was approximately $18 million. Centerline's near-term liquidity position remains challenging; Moody's believes, however, that Centerline is working to alleviate this situation through potential transactions which would provide sufficient funds to meet its remaining needs in 2008. Looking beyond this year, Moody's is concerned that disruptive conditions in the commercial real estate, affordable housing and financial markets will continue to pressure Centerline's rating. CHARLES TAGGART: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Charles Taggart 264 W. Marine Dr. Astoria, OR 97103 Bankruptcy Case No.: 08-37066 Chapter 11 Petition Date: December 22, 2008 Court: United States Bankruptcy Court District of Oregon Judge: Randall L. Dunn Debtor's Counsel: Bradley L. Brown, Esq. 12725 SW Millikan Way #260 Beaverton, OR 97005 Tel.: (503) 469-1229 Email: blbrown360@hotmail.com Total Assets: $3,485,679.00 Total Debts: $4,105,239.54 A full-text copy of the Debtor's petition and a list of the Debtor's largest unsecured creditors are available for free at: http://bankrupt.com/misc/orb08-37066.pdf The petition was signed by Charles Taggart. CHARTER COMMS: Discloses Resignation of Two Directors from Board ---------------------------------------------------------------- Charter Communications, Inc., disclosed in a regulatory filing with the Securities and Exchange Commission that Nathaniel A. Davis has resigned for personal reasons from its board of directors, effective immediately. "[Mr. Davis] has been a leader in the telecommunications industry for nearly 35 years, and the company has benefitted greatly from his strategic insight," Paul G. Allen, chairman of the board and controlling shareholder of Charter, said. "On behalf of the board, I thank Nate for his valuable service and his many contributions." "[Mr. Davis] is a talented industry executive, and Charter was fortunate to have had the benefit of his expertise on the board," Neil Smit, president and chief executive officer, added. "It has been an honor and a privilege to serve as a director of Charter and to have worked with Paul Allen, Neil Smit, and my fellow board members," Mr. Davis said. "I wish Charter and its talented employees great success for the future." Mr. Davis added that he was unable to dedicate the appropriate amount of time to Charter's board going forward due to personal health reasons. His position on the board will not be replaced at this time. On Dec. 5, 2008, Marc B. Nathanson resigned from the board of directors effective Dec. 1, 2008. "With 40 years of cable industry experience, [Mr. Nathanson] has served as vice chairman and been a valuable member of Charter's board for more than eight years," Paul G. Allen, chairman of the board and controlling shareholder of Charter, said. "We appreciate his many contributions to Charter, and wish him well in future endeavors." "[Mr. Nathanson] has served as vice chairman and been a valuable member of Charter is one of the true industry pioneers. As the founder of Falcon Cable in 1975, an executive committee member of the National Cable & Telecommunications Association, and a Vanguard Award recipient, his in-depth knowledge of the business has proven invaluable to all of us at Charter," Neil Smit, president and chief executive officer, added. "Resigning to make more time available for other personal and business interests," Mr. Nathanson said. "My resignation is also the end to a long chapter of my life (over 40 years) that I have been associated with the dynamic growth of the cable TV industry. I believe Charter and the other cable companies have made enormous technological achievements that benefit the American consumer." 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. TCR reported on Dec. 22, 2008, Fitch Ratings has placed Charter Communications, Inc.'s 'CCC' Issuer Default Rating and the IDRs and individual issue ratings of Charter's subsidiaries on Rating Watch Negative. Approximately $21.1 billion of debt outstanding as of Sept. 30, 2008 is effected by Fitch's action. CHINA AOXING: Working Capital Deficit Prompts Going Concern Doubt ----------------------------------------------------------------- At September 30, 2008, China Aoxing Pharmaceutical Co., Inc., has a deficiency in working capital of $11,615,663. "The uncertainties caused by this condition raise substantial doubt as to the company's ability to continue as a going concern," Juan Yue Han, chief executive officer, and Hongyue Hao, acting chief financial officer, disclosed in a regulatory filing with the Securities and Exchange Commission. "The company is exploring various alternatives to improve its financial position and continue to meet its obligations. Management is focusing on improving its operations and seeking additional debt and equity financing. There can be no assurance that any of these efforts will be fruitful." "Our net income for the three months ended September 30, 2008 was $626,119. This represented a significant reduction from the $1,762,161 in net income that we realized during the three months ended September 30, 2007. However, the $1,762,161 in net income for the three months ended in September 30, 2007 was significantly attributed to the change in fair value of warrant and derivative liabilities in the amount of $2,675,625 during that period." As of September 30, 2009, the company's balance sheet showed total assets of $55,784,801, total liabilities of $24,653,537, convertible debentures of $889,392, minority interest of $79,830, and warrant and derivative liabilities of $3,848,357, and total stockholders' equity of $26,313,685. A full-text copy of the company's quarterly report is available for free at http://researcharchives.com/t/s?36ef Effective on November 10, 2008, Richard Wm. Talley, Joseph J. Levinson, Jiaqi Wang and Hui Shao resigned from their positions as members of the company's Board of Directors. Juan Yue Han, the remaining member of the Board, then appointed to fill the vacancies: Jun Min, John O'Shea, Howard David Sterling and Dr. Guozhu Xu. On November 10, 2008, Chief Executive Officer Juan Yue Han resigned from his position as Chief Financial Officer. The Board appointed Hao Hongyue to serve as Acting Chief Financial Officer. Hao Hongyue has been employed since 2000 by the Hebei Aoxing Pharmaceutical Group Company, which is the operating subsidiary of China Aoxing Pharmaceutical Company. Ms. Hao was initially employed as Controller, and was appointed Vice President - Finance in 2007. Prior to joining Hebei Aoxing, Ms. Hao was employed for four years as Financial Manager of the China Aoxing Food and Brewery Company, and for three years as an accountant with the Hebei Brewery Company. In 2007, Ms. Hao earned a Bachelor's Degree with a concentration in accounting at the China Science and Technology Training Institute. Ms. Hao is 37 years old. She is the niece of the spouse of Chairman Juan Yue Han. The company has an oral employment agreement with Hao Hongyue, its newly-appointed Acting Chief Financial Officer. The company will pay Ms. Hao an annual salary of 200,000 Renminbi (currently $29,325). The company has also agreed to issue 100,000 shares of its common stock to Ms. Hao in compensation for her services through December 31, 2009. About China Aoxing China Aoxing Pharmaceutical Co., Inc., through its subsidiaries, is a vertically integrated pharmaceutical company specializing in research, development, manufacturing and marketing of a variety of narcotics and pain management pharmaceutical products in generic and innovative formulations. The company has two operating subsidiaries: Hebei Aoxing Pharmaceutical Co., Inc., which at September 30, 2008 is 95% owned by the company, and Shijazhuang Lerentang Pharmaceutical Company, Ltd., which is 100% owned by Hebei. Both subsidiaries were organized under the laws of the People's Republic of China. Since 2002, Hebei has been engaged in developing its analgesic products, building its facilities and obtaining the requisite licenses from the Chinese Government. LRT manufactures a line of pain management drugs in pills, tablets, capsules, oral solutions and other formulations. CHINA LOGISTICS: Files Second Amendment to 2007 Annual Report ------------------------------------------------------------- China Logistics Group, Inc., has filed a second amendment to its Annual Report for the year ended December 31, 2007, to correct the accounting treatment previously accorded certain transactions and to restate its consolidated balance sheet at December 31, 2007, and its consolidated statement of operations, consolidated statements of stockholders' deficit and consolidated statements of cash flows for the year ended December 31, 2007. China Logistics' December 31, 2007 restated balance sheet showed total assets of $5,329,009m total current liabilities of $8,569,728, and minority interest of $670,510, resulting in total stockholders' deficit of $3,911,229. For the year ended December 31, 2007, the company earned $347,948 compared with a net loss of $1,476,7000 a year earlier. A full-text copy of the company's amended annual report is available for free at http://researcharchives.com/t/s?36e6 The company also filed its quarterly report for the period ended September 30, 2008. As of September 30, the company's balance sheet showed total assets of $8,928,721, total current liabilities of $4,620,996, minority interest of $1,326,510 and total stockholders' equity of $2,981,215. For the three months ended September 30, 2008, the company posted a net loss of $188,586. Wei Chen, chief executive officer, principal financial and accounting officer, relates that the company had generated minimal revenue since its inception until we acquired of a 51% interest in Shandong Jiajia in December 2007. "It should be noted that while our operations reflect profit for the nine month period ended September 30, 2008, the entire amount of profit resulted from one- time transactions including $764,220 for the forgiveness of debt and approximately $400,000 in recovery of bad debts previously recognized as uncollectable. Additionally, we have a minimal level of working capital totaling $4,257,135 at September 30, 2008, and cash used in operations totaling approximately $895,000 during the nine months ended September 30, 2008. Our ability to continue as a going concern is dependent upon our ability to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they become due, to fund possible acquisitions, and to generate profitable operations in the future. These matters, among others, raise substantial doubt about our ability to continue as a going concern." A full-text copy of the company's quarterly report is available for free at http://researcharchives.com/t/s?36e7 About China Logistics China Logistics Group, Inc., is a Florida corporation and was incorporated on March 19, 1999, under the name of ValuSALES.com, Inc. It changed its name twice before becoming China Logistics Group, Inc., on February 14, 2008. Historically, since 2003, the company provided products and services in the home entertainment media-on-demand marketplace to produce and distribute interactive consumer electronics equipment to provide streaming digital media and video on demand services. On December 31, 2007, the company acquired a 51% interest in Shandong Jiajia, which is an agent for international freight and shipping companies. It sells cargo space and arranges land, maritime, and air international transportation for clients seeking primarily to export goods from China. CHRYSLER LLC: Reaches Deal With Cadence on Accommodation Pact ------------------------------------------------------------- Cadence Innovation LLC has reached an agreement with Chrysler LLC, Chrysler Motors LLC, and Chrysler Canada Inc., regarding the parties' August 2008 Accommodation Agreement, under which Cadence will make some payments to Chrysler. Chrysler had asked the U.S. Bankruptcy Court for the District of Delaware to compel Cadence to comply with the Accommodation Agreement. In August 2008, the Debtors entered into the Accommodation Agreement with Bank of America N.A. and Chrysler, whereby Chrysler and BofA provided financial and other accommodations to the Debtors. Specifically, under the Agreement, with the Court's consent, Chrysler provided the Debtors a DIP financing, payment of certain disputed amounts, acceleration of payment terms, restriction on re-sourcing rights, and limitation of set-off rights. The Accommodation Agreement required the Debtors to close a sale of their assets by December 15, 2008. It also includes other "sale milestones" to be accomplished by the Debtors. Subsumed in the Accommodation Agreement are (i) a tooling acknowledgement, (ii) a lease option, and (iii) an equipment purchase option: A. Tooling Acknowledgement. The Debtors agreed that all tooling they utilized to manufacture component parts for Chrysler is owned by Chrysler and is being held by the Debtors, on a bailment basis. The Debtors further agreed that Chrysler has the right to take immediate possession of the Tooling. They also agreed to assist Chrysler on the Tooling removal, if necessary. In the event of dispute over the ownership of the Tooling, Chrysler will prevail as the Tooling would be presumed as its own pending resolution of the dispute and would have the right to take immediate possession of the Tooling even if resolution is pending. B. Lease Option. The Debtors granted Chrysler the option to lease their Masonic facility for $175,000, which lease option is exercisable on the occurrence of an Event of Default or the Debtors' failure to meet a Sales Milestone with respect to the Masonic Facility. In a written notice on November 30, 2008, Chrysler informed the Debtors of its intent to exercise the Lease Option, effective January 1, 2009, pending completion. In turn, the Debtors demanded to Chrysler payment of collateral issues as employee severance and disputed commercial claims that were not contemplated or required by the Lease Option, Adam G. Landis, Esq., at Landis Rath & Cobb LLP, in Wilmington, Delaware, confirms. C. Equipment Purchase Option. The Debtors granted Chrysler "an irrevocable and exclusive option . . . to purchase all or any Supplier Owned Tooling and all or any machinery or equipment that is owned by the Debtors and is necessary or helpful to manufacture of component parts for Chrysler at the prices set forth in the Accommodation Agreement." Chrysler could exercise the Equipment Purchase Option upon (i) an event of Default; (ii) expiration of the Accommodation Agreement; or (iii) resourcing of the manufacture of the component parts to a substitute supplier. Upon the exercise of the Equipment Purchase Option, Chrysler will have the right to take immediate possession of the purchased equipment. Under the Accommodation Agreement, Chrysler may also exercise the "Right of Access" under that certain Access and Security Agreement. On Chrysler's behalf, Adam G. Landis, Esq., at Landis Rath & Cobb LLP, in Wilmington, Delaware, asserted that Chrysler is entitled to exercise the Lease Option as evidenced by the Debtors' failure to meet the Sale Milestones and their orderly liquidation. In the same way, he avers, Chrysler's immediate possession of the Facility will ensure continued production of component parts and assembly and sale of Chrysler vehicles. Due to the Debtors' failure to meet the Sale Milestones, Chrysler informs the Court that it had resourced production of its component parts to other suppliers. Chrysler adds that despite repeated demands, the Debtors refused to relinquish the Tooling and assist in its removal. The Debtors demanded Chrysler to pay certain disputed amounts arising from commercial claims and not from the Tooling, before they'll assist in the Tooling removal, according to Mr. Landis. "The Accommodation Agreement expressly prohibits this type of hostage-taking behavior." Nevertheless, Chrysler is prepared to immediately escrow any disputed Tooling payment in line with its obligations under the Accommodation Agreement, Mr. Landis says. Moreover, if the Debtors refuse to lease the Facility to Chrysler, Chrysler asserts it is entitled to exercise its Right of Access because a default has occurred under the Access and Security Agreement; and given the Debtors' liquidation, it cannot be denied that additional defaults are likely to occur and the Debtors will be unable to continue production at the Facility. Chrysler was concerned it would suffer immediate and irreparable harm if the Debtors are not required to adhere to their obligations under the Accommodation Agreement. The Debtors have stated, Mr. Landis points out, that they will not borrow additional funds and will stop production for Chrysler on December 19, 2008, as Chrysler enters its extended holiday shutdown. Specifically, Chrysler sought to require the Debtors to comply with the Accommodation Agreement by: (a) authorizing Chrysler to immediately possess all tooling in the Debtors' possession used to manufacture component parts for Chrysler; (b) immediately leasing to Chrysler the Masonic Facility; and (c) immediately selling to Chrysler all equipment or machinery in the Debtors' possession that is necessary to the manufacture of component parts for Chrysler. Parties' Stipulation The terms of the parties' agreement are: (1) Chrysler will pay the Debtors $4 million in cash. The first $3 million will be wired to the Debtors and the remaining $1 million will be held in escrow by BBK Ltd and will be disbursed to the Debtors upon execution by the parties of the Masonic Lease. If the Masonic Lease is not executed by parties by January 15, 2009, the Holdback will be disbursed to Chrysler. (2) Upon payment of the Settlement Amount, the Debtors, as borrowers to the Second Amended and Restated Credit Agreement, will be fully and finally released and all rights of Chrysler as a Term Lender will be extinguished. Among others, the Debtors will not be required to obtain the consent of Chrysler to payments to employees pursuant to the Employee-Based Retention Plans Order while Chrysler is under no obligations to fund the Plans. (3) Chrysler is authorized to take possession of all Tooling in the Debtors' premises and the Debtors will cooperate in the tooling removal. The Debtors will comply with the Accommodation Agreement by conforming to the re-sourcing scheduling so that Tooling can be removed by December 23, 2008. (4) To the extent the appraisal performed by Hilco Industrial did not appraise specific equipment optioned by Chrysler, Chrysler will be allowed to take possession of the equipment subject to the Debtors' ownership interest and the Lender's continuing security interests upon placement of amount demanded by the Debtors into an escrow account. The money will be disbursed upon further Court order. (5) The parties' Stipulation will effect a global settlement of all issues between Chrysler and the Debtors, and Chrysler is released, discharged and waived from all claims, causes of action and obligations, except for these payments which will be paid under the terms of the Accommodation Agreement: * Payments owed by Chrysler for shipments of Component Parts after August 26, 2008, at prices in effect in Chrysler's invoices. * Payments owed by Chrysler for Designated Equipment. * Engineering services or other services requested by Chrysler from the Debtors under the Accommodation Agreement. * Obligations under the Stipulation and the contemplated agreements. * In the event the Debtors receive payment from Chrysler for amounts related to retroactive purchase adjustments, Chrysler will be entitled to setoff and recoup the overpayment against amounts due and owing for Component Parts shipped after August 26, 2008. The parties also agree that the Masonic Lease will contain terms consistent with the Accommodation Agreement, including: (1) Chrysler will provide the Debtors with a $320,000 security deposit, constituting two months of Base Rent under the Masonic Lease, as security for Chrysler's payment obligations under the Masonic Lease. The Security Deposit will be maintained in an escrow account. (2) Chrysler will not have any guaranty, indemnity or other payment obligation related to premises liability exceeding the cost of insurance premiums funded by Chrysler, including environmental claims. Chrysler and Masonico will enter into a new access and security agreement, as to which the Debtors and Lender will be parties. The Events of Default will be amended to provide that an Event of Default will occur if Masonico interfere and threaten to jeopardize Chrysler's ability to rely on Masonico for the production of component parts; and the Debtors will not seek to make demands on Chrysler inconsistent with the Masonic Lease. (3) The New Access Agreement will further provide that in the event Chrysler elects to exercise its Right of Access, Chrysler will continue to pay all of its accrued and unpaid obligations to the Debtors. The Old Access and Security Agreement remains in full force and effect. (4) In the event Chrysler purchases the leased equipment located at Masonic or assumes the Debtors' obligations to the lessors, then the monthly base rent due under the Masonic Lease be reduced by $10,000 per month. (5) The parties will conduct a physical inventory at Masonic, and Chrysler will pay the Debtors for all work-in-progress at Masonic on the effective date under the Masonico Operating Agreement for 90% of the book value of the WIP as determined by physical inventory. A copy of the Cadence-Chrysler Stipulation is available for free at http://bankrupt.com/misc/Cadence_ChryslerStipulation.pdf The Court approves the parties' Stipulation. At the Debtors' behest and as a condition to the Masonic Lease, the Court places under seal the full and unredacted version of the Chrysler Stipulation. 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 US$10 million and US$50 million, and debts of between US$100 million and US$500 million. (Cadence Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) 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. CIRCUIT CITY: Court Grants Final Approval to DIP Financing ---------------------------------------------------------- At a hearing held on December 22, 2008, the U.S. Bankruptcy Court for the Eastern District of Virginia authorized Circuit City Stores, Inc., and its debtor affiliates, on a final basis, to borrow up to the aggregate committed amount of: (a) $1,100,000,000 consisting of $1,050,000,000 for the Debtors and $50,0000,000 for InterTAN Canada Ltd.; (b) $900,000,000, consisting of $850,000,000 for the Debtors and $50,0000,000 for InterTAN, on December 30 and 31, 2008; (c) $910,000,000, consisting of $850,000,000 for the Debtors and $60,0000,000 for InterTAN for the period from January 1 through 17, 2009; and (d) $900,000,000, consisting of $850,000,000 for the Debtors and $50,0000,000 for InterTAN. According to the Final Order, all DIP obligations will become immediately due and payable, and authority to use the DIP Financing's proceeds and to use cash collateral will cease both on the date that is the earliest to occur of: -- November 10, 2009; -- the date on which the maturity of the obligations is accelerated and DIP commitments are irrevocably terminated; or -- the DIP's consummation date. A copy of the Final Order can be obtained without charge at: http://bankrupt.com/misc/CircuitCity_Final_DIP_Order.pdf The Debtors have also filed with the Court on December 22, a second amendment to the DIP Credit Agreement, as agreed among the parties. The Second Amendment provides, among other things, that the challenge period for any official committee to contest the validity of the liens of any prepetition agent or lender is extended until March 1, 2009. A copy the Second Amendment is available for free at: http://bankrupt.com/misc/2nd_Amended_DIP_Agreement.pdf Prior to the entry of the Final DIP Order, the Court amended the interim order to include certain amounts relating to the Debtors' prepetition debt amount. The Corrected Order provided that as of the Petition Date, the Debtors were indebted under the Prepetition Financing Agreements on account of credit extensions (i) to the Debtors, in the principal amount of $730,742,932, plus letters of credit for $124,363,738, plus interest, costs and expenses, and (ii) made to Intertan Canada Ltd., for CDN$42,500,000, plus letters of credit for $6,991,547, plus interest, costs, expenses, and fees. Several parties-in-interest and creditors also tried to block the approval of the DIP Financing by filing separate objections and joinders: -- AmCap NorthPoint LLC and AmCap Arborland LLC; -- Eatontown Commons Shopping Center, et al.; -- Faber Bros., Inc.; and -- Prince George's Station Retail, LLC, et al. The Final Order, however, provided that all objections to the DIP Financing's approval, which have not been withdrawn or resolved, are overruled. About Circuit City Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- is a specialty retailer of consumer electronics, home office products, entertainment software and related services. The company has two segments: domestic and international. Circuit City Stores, Inc. (NYSE: CC) together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (E.D. Virg. Lead Case No.: 08-35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc. and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of Aug. 31, 2008. (Circuit City Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CIRCUIT CITY: Sec. 341 Meeting of Creditors Set for January 9 ------------------------------------------------------------- The U.S. Trustee for Region 4 will convene a meeting of creditors of Circuit City Stores, Inc., and its 17 debtor affiliates on January 9, 2009, at 2:30 p.m., at 701 E. Broad Street, Suite 4300, in Richmond, Virginia. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtors' bankruptcy cases. Attendance by the Debtors' creditors at the meeting is welcome, but not required. The Sec. 341(a) meeting offers the creditors a one-time opportunity to examine the Debtor's representative under oath about the Debtor's financial affairs and operations that would be of interest to the general body of creditors. January 30 Claims Bar Date The U.S. Bankruptcy Court for the Eastern District of Virginia has set deadline for filing proofs of claim against Circuit City Stores, Inc., and its affiliates. The Court set: -- January 30, 2009, as the general bar date for filing proofs of claim; and -- May 11, 2009, as the governmental bar date. The Department of Revenue of the state of Colorado tried to block approval of the request by asserting that the request is a classic instance of an attempt to ambush all creditors in the bankruptcy cases, governmental and otherwise, with a short response period made even shorter by the Thanksgiving holidays. Pursuant to Sections 105 and 502 of the Bankruptcy Code and Rules 2002, 3003(c)(3), and 9007 of the Federal Rules of Bankruptcy Procedure, the Debtors ask the Court to (i) set January 30, 2009, as general bar date for filing certain proofs of claim, (ii) approve procedures for filing those proofs of claim, and (iii) approve the form and manner of notice with respect to the Bar Date. The Debtors have proposed that proofs of claim be filed by creditors of any of the Debtors on account of any claim arising before the Petition Date. Nevertheless, the Debtors propose that creditors holding or wishing to assert these types of excluded claims against the Debtors need not file a proof of claim: (a) Claims listed in the Debtors' schedules and statements that are not listed as "contingent," "unliquidated" or "disputed," and that are not disputed by the holders as to amount, classification or the identity of the Debtor against whom the claim is scheduled; (b) Claims on account of which a proof of claim has already been properly filed with the Court or the Debtors' claims agent against the correct Debtor, provided that proofs of claim or requests for payment under Section 503(b)(9) of the Bankruptcy Code are not Excluded Claims; (c) Claims previously allowed or paid pursuant to a Court order; (d) Claims allowable under Sections 503(b) and 507(a)(2) of the Bankruptcy Code as expenses of administration; (e) Claims of Debtors against other Debtors; (f) Claims of current officers or directors of a Debtor for indemnification or contribution arising as a result of the officer's or director's postpetition service to a Debtor; and (g) Claims related to the Debtors' gift cards purchased prior to the Petition Date. The Debtors also request that any holder of an interest in any of the Debtors, which interest is based exclusively upon the current ownership of stock or other equity interest, will not be required to file a proof of Interest based solely on account of that Interest Holder's ownership interest. However, any Interest Holder (i) other than a governmental unit, who wishes to assert a claim against any of the Debtors based on any transaction in the Debtors' Interests, including a claim for damages or rescission based on the purchase or sale of the Interests, must file a proof of claim on or prior to the General Bar Date, and (ii) who is a governmental unit and wishes to assert a claim based on any transaction in the Debtors' Interests, including a claim for damages or rescission based on the purchase or sale of the Interests, must file a proof of claim on or prior to February 27, 2008 -- the governmental claims bar date. Furthermore, the Debtors request that proofs of claim for damages arising from the rejection of any unexpired lease or executory contract of a Debtor during the bankruptcy cases be filed by the latest of: -- 30 days after the effective date of rejection of the executory contract or unexpired lease as provided by a Court order, or pursuant to a notice under the procedures approved by the Court; -- any date set by another Court order; or -- the General Bar Date. Proofs of claim for any other claims that arose prior to the Petition Date with respect to a lease or contract must be filed by the General Bar Date. About Circuit City Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- is a specialty retailer of consumer electronics, home office products, entertainment software and related services. The company has two segments: domestic and international. Circuit City Stores, Inc. (NYSE: CC) together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (E.D. Virg. Lead Case No.: 08-35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc. and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of Aug. 31, 2008. (Circuit City Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CIRCUIT CITY: Files Schedules of Assets and Liabilities ------------------------------------------------------- Circuit City Stores, Inc., filed before the U.S. Bankruptcy Court for the Eastern District of Virginia its schedules of assets and liabilities: A. Real Property Building & improvements $339,497,766 Land 14,323,487 B. Personal Property B.1 Cash on Hand 2,425,996 B.2 Bank Accounts 2,820,167 B.3 Security Deposits Utilities deposits 192,788 Rent deposits 574,989 B.4 Household goods - B.5 Book, artwork and collectibles - B.6 Wearing apparel - B.7 Furs and jewelry - B.8 Firearms and other equipment - B.9 Insurance Policies Undetermined B.10 Annuities - B.11 Interests in an education IRA - B.12 Interests in pension plans 401(k) Plan - B.13 Stock and Interests 2,627,385 B.14 Interests in partnerships/joint ventures Undetermined B.15 Government and corporate bonds - B.16 Accounts Receivable - 3rd Party Provider 6,989,300 Credit Card 98,124,526 Extended Service Plan 33,023,484 Notes 770,111 Chase 6,099,142 Other receivables 5,036,559 Vendor Receivables 192,765,111 Allowance for Doubtful Accounts (9,109,055) B.17 Alimony - B.18 Other Liquidated Debts Owing Debtor 82,129,000 B.19 Equitable or future interests - B.20 Interests in estate death benefit plan - B.21 Other Contingent and Unliquidated Claims Undetermined B.22 Patents, copyrights, and others Unknown B.23 Licenses, franchises & other intangibles Unknown B.24 Customer lists or other compilations - B.25 Vehicles - B.26 Boats, motors and accessories - B.27 Aircraft and accessories 5,268,901 B.28 Office Equipment, furnishings & supplies Various fixed assets 68,178,945 B.29 Equipment and Supplies for Business Various fixed assets 68,076,540 B.30 Inventory Various stores & distribution centers 1,344,921,972 B.31 Animals - B.32 Crops - B.33 Farming equipment and implements - B.34 Farm supplies, chemicals, and feed - B.35 Other Personal Property Fixed Assets - various 250,723,869 Intercompany receivables 300,562,921 Pension - Funded Status 95,510,801 Prepaid inventory 91,878,526 Others 86,843,549 TOTAL SCHEDULED ASSETS $3,090,256,780 ========================================================== C. Property Claimed None D. Creditors Holding Secured Claims General Electric $300,500,000 Wells Fargo 250,000,000 Bank of America 225,000,000 Wachovia 87,000,000 JPMorgan 85,000,000 GMAC 75,000,000 Burdale 60,000,000 National City 50,000,000 Others 175,720,512 E. Creditors Holding Unsecured Priority Claims Unknown F. Creditors Holding Unsecured Nonpriority Claims 1,941,112,932 TOTAL SCHEDULED LIABILITIES $3,249,333,444 ========================================================== About Circuit City Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- is a specialty retailer of consumer electronics, home office products, entertainment software and related services. The company has two segments: domestic and international. Circuit City Stores, Inc. (NYSE: CC) together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (E.D. Virg. Lead Case No.: 08-35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc. and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of Aug. 31, 2008. (Circuit City Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CIRCUIT CITY: Files Statement of Financial Affairs -------------------------------------------------- As part of their requirement to disclose income from their business operations during the two years preceding the Petition Date, Circuit City Stores, Inc., and its subsidiaries, reported: Source Date Covered Income/Amount ------ ------------ ------------- Operation of Business 03/01/06 - 02/28/07 $9,375,699,681 Operation of Business 03/01/07 - 02/29/08 8,877,317,238 Operation of Business 03/01/08 - 11/09/08 4,638,871,169 Bruce H. Besanko, the Debtors' executive vice president and chief financial officer, relates that within two years immediately preceding the commencement of the bankruptcy cases, the Debtors received certain income other than from employment, trade, profession or business operations: Date Covered Income/Amount ------------ ------------- 03/01/06 - 02/28/07 $21,160,832 03/01/07 - 02/29/08 972,307 03/01/08 - 11/09/08 (3,245,531) Within 90 days prior to the Petition Date, the Debtors paid or transferred certain property for debts, which are not primarily consumer debts. Among the largest payments are: Creditor Amount Paid -------- ----------- Hewlett-Packard $200,876,756 Sony Electronics Inc. 191,734,356 Samsung Electronics America Inc. 177,884,594 Toshiba Computer Systems Div. 70,576,747 Canon USA 63,472,815 ADP 61,176,347 LG Electronics 57,009,980 Toshiba America Consumer Products 50,482,919 Panasonic North America 35,135,982 Graphic Communications 30,810,336 Acer America Corp. 27,740,381 Panasonic Company National 25,299,770 GE 24,280,432 Continental Traffic 23,545,038 California Board of Equalization 23,445,940 Sony Computer Entertainment 21,101,254 IBM 20,250,122 Advantage IQ 20,171,138 A complete list of the payments made is available for free at http://bankrupt.com/misc/CircuitCity_TransfersMade.pdf Mr. Besanko discloses that the Debtors also paid certain creditors, who were insiders, within one year prior to their bankruptcy filing. The Debtors are also parties to certain lawsuits and administrative proceedings. A copy of the complete list of paid creditors and lawsuits is available for free at: http://bankrupt.com/misc/InsiderPayments_and_Lawsuits.pdf About Circuit City Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- is a specialty retailer of consumer electronics, home office products, entertainment software and related services. The company has two segments: domestic and international. Circuit City Stores, Inc. (NYSE: CC) together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (E.D. Virg. Lead Case No.: 08-35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc. and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of Aug. 31, 2008. (Circuit City Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). COMPOSITE TECHNOLOGY: Auditor Raises Going Concern Doubt -------------------------------------------------------- SingerLewak LLP, in Irvine, California, in a letter dated December 22, 2008, to the Board of Directors and Shareholders of Composite Technology Corporation and subsidiaries, expressed substantial doubt about the company's ability to continue as a going concern. The firm audited the consolidated balance sheets of Composite Technology Corporation and subsidiaries as of September 30, 2008 and 2007, and the related consolidated statements of operations and comprehensive loss, shareholders' equity, and cash flows for each of the three years in the period ended September 30, 2008. SingerLewak noted that the company has suffered recurring losses from operations, which raises substantial doubt about the company's ability to continue as a going concern. Chief Executive Officer Benton H Wilcoxon disclosed that during the year ended September 30, 2008, the company incurred a net loss of $45,553,000 and had negative cash flows from continuing operations of $51,360,000. In addition, the Company had an accumulated deficit of $185,163,000 at September 30, 2008. "The company's ability to continue as a going concern is dependent upon its ability to generate profitable operations in the future and to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The outcome of these matters cannot be predicted with any certainty at this time." "Our principal sources of working capital have been private debt issuances and historically, the company has issued registered stock and unregistered, restricted stock, stock options, and warrants in settlement of both operational and non-operational related liabilities and as a source of funds." "In addition, management plans to ensure that sufficient capital will be available to provide for its capital needs with minimal borrowings and may issue equity securities to ensure that this is the case. However, there is no guarantee that the company will be successful in obtaining sufficient capital through borrowings or selling equity securities." "We believe our cash position, including usable restricted cash as of September 30, 2008, of $23.3 million, and expected cash flows from revenue orders may not be sufficient to fund operations for the next four calendar quarters for both of our business segments. We believe that we will have positive cash flow from our Cable business to fund its operations. We anticipate that additional cash is needed to fund operations beyond March 2009 for our DeWind business, absent a large cash deposit for a future turbine order and to the extent required the Company intends to continue the practice of issuing stock, debt or other financial instruments for cash or for payment of services until our cash flows from the sales of our primary products is sufficient to provide cash from operations or if we believe such a financing event would be a sound business strategy," Mr. Wilcoxon said. As of September 30, 2008, the company's balance sheet showed total assets of $165,440,000, total liabilities of $97,800,000 and total shareholders' equity of $67,640,000. A full-text copy of the company's annual report is available for free at http://researcharchives.com/t/s?36e1 About Composite Technology Composite Technology Corporation -- http://www.compositetechcorp.com/-- develops, produces, and markets innovative energy efficient products and renewable energy products for the electrical utility industry. CTC's products incorporate advanced composite materials and innovative design solutions that result in energy efficient conductors for electrical transmission systems and advanced wind turbines which offer a simple grid synchronization and a more reliable renewable energy solution. The Company was incorporated in Florida on February 26, 1980, as El Dorado Gold & Exploration, Inc. and reincorporated in Nevada on June 27, 2001 and renamed Composite Technology Corporation. In July 2006, the Company acquired its wind turbine business through the acquisition of EU Energy plc, a U.K. corporation, subsequently renamed DeWind. The company's principal corporate offices are located at 2026 McGaw Avenue, Irvine, California 92614. CORTE FRECCIA: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Corte Freccia I, L.L.C. 19420 N. 59th Avenue Suite 233 Glendale, AZ 85308 Tel.: (480) 609-0011 Bankruptcy Case No.: 08-18600 Type of Business: The Debtor is a land subdivider and developer. Chapter 11 Petition Date: December 22, 2008 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: George B. Nielsen Jr. Debtor's Counsel: Randy Nussbaum, Esq. Nussbaum & Gillis, P.C. 14500 N. Northsight Blvd. - #116 Scottsdale, AZ 85260 Tel.: (480) 609-0011 Fax : 480-609-0016 Email: rnussbaum@nussbaumgillis.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of 20 largest unsecured creditors together with its petition. The petition was signed by A. Paul Stephens, Jr., Manager of the company. CUZZENS INC: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Cuzzens, Inc. 3500 Las Vegas Blvd. South Suite a-13 Las Vegas, NV 89109 Bankruptcy Case No.: 08-25337 Type of Business: The Debtor is a retailer of men's and boys' clothing. Chapter 11 Petition Date: December 22, 2008 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Debtor's Counsel: Timothy S. Cory, Esq. 8831 w. sahara Ave. Lakes Business Park Las Vegas, NV 89117 Tel.: (702) 388-1996 Email: tim.cory@corylaw.us Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition and a list of the Debtor's largest unsecured creditors are available for free at: http://bankrupt.com/misc/nvb08-25337.pdf The petition was signed by Steven Vieths, President of the company. DANIEL BYERLY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Daniel Thomas Byerly 602 S. Indiana Ave. Alexandria, IN 46001 County: Madison Bankruptcy Case No.: 08-15784 Chapter 11 Petition Date: December 22, 2008 Court: United States Bankruptcy Court Southern District of Indiana (Indianapolis) Judge: Anthony J. Metz III Debtor's Counsel: KC Cohen, Esq. 151 N Delaware St. Ste. 1104 Indianapolis, IN 46204 Tel.: (317) 715-1845 Fax : (317) 916-0406 Email: kc@esoft-legal.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/insb08-15784.pdf The petition was signed by Daniel Thomas Byerly. DESERT RIDERS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Desert Riders Motorsports, Inc. 212 E, Highway 70 Safford, AZ 85546 Bankruptcy Case No.: 08-18549 Type of Business: The Debtor is a motorcycle dealer. Chapter 11 Petition Date: December 22, 2008 Court: United States Bankruptcy Court District of Arizona (Tucson) Judge: James M. Marlar Debtor's Counsel: Eric Slocum Sparks, Esq. Eric Slocum Sparks PC 110 S. Church Ave. #2270 Tucson, AZ 85701 Tel.: (520) 623-8330 Fax : (520) 623-9157 Email: eric@ericslocumsparkspc.com Total Assets: $2,134,557 Total Debts: $240,891 A full-text copy of the Debtor's petition and a list of the Debtor's largest unsecured creditors are available for free at: http://bankrupt.com/misc/azb08-18549.pdf The petition was signed by Wallace R. Glover, President of the company. DHP HOLDINGS: To Liquidate Business Under Chapter 11 ---------------------------------------------------- DHP Holdings II Corp., together with six of its affiliates, filed for voluntary bankruptcy protection under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware, citing liquidity problem coupled with declining economy resulting to the company's inability to access additional funds. The Debtors plan to liquidate their business for the benefit of all of their creditors. The Debtors proposed on Dec. 5, 2008, to their senior lenders a funding scheme that would provide the financing necessary to maintain their operations but the lenders rejected the proposal and cease all cash in the Debtors' bank accounts -- including payroll and health benefits accounts. However, the lenders allowed the Debtors to access cash collateral on a limited basis. In light of the liquidity crisis, the Debtors said they were compelled to substantially restrict their business, lay off employees and terminate health benefits. The Debtors notified 331 employees -- including union employee -- in their facilities located in Bowling Green, Kentucky, about the planned terminations under the Workers Adjustment and Retraining Notification Act. According to Craig S. Dean, Debtors' chief restructuring officer, the Debtors defaulted on their obligations under the prepetition senior credit agreement several times since February 2005. The senior lenders provided more funding to the Debtors as well as extended the termination of the agreement and waived certain defaults in exchange for a higher interest and fees, under various amendments and forbearance agreements entered from time to time. The senior indebtedness became due and payable in full in cash and all commitments lend under the agreement terminated on Nov. 29, 2008, Mr. Dean said. The company listed assets and debts between $100 million and $500 million in its filing. Reuters' Chelsea Emery reports that the company, along with its non-debtor subsidiaries and affiliates, has $132.5 million in assets and $133.2 million in liabilities as of Nov. 29, 2008. The company's foreign units including HIG-DHP Barbados, who holds 100% of the equity of all foreign nondebtor units, did not file for bankruptcy, Bob Van Voris of Bloomberg News reports. According to Reuters, DHP Holdings owes about $40.8 million in senior debt under the prepetition senior credit facility, wherein GE Business Financial Services acted as agent. The company also owes $15 million in subordinated debt under the prepetition subordinated credit agreement to HIG Capital Partners. Former DESA Entities Chapter 11 Cases DESA Holdings Corporation and DESA International LLC filed voluntary petitions on June 8, 2002. HIG-DESA Acquisition nka DESA LLC acquired on Dec. 13, 2002, substantially all assets of the DESA Entities for $198 million comprised of $185 million in cash plus unsecured subordinated notes in the original aggregate amount of $13 million priced at 10% per annum due payable on Dec. 24, 2007. The sale closed on Dec. 24, 2002. The Chapter 11 cases of the form DESA Entities is still active; However, activity occurring in those cases consists of limited claims resolution, and required filing of necessary postconfirmation reports and payment of postconfirmation fees. No claims of ther issues remain open between the Debtors and the former DESA Entities. According to the Troubled Company Reporter on April 22, 2005, the Hon. Walter Shapero of the United States Bankruptcy Court for the District of Delaware confirmed the Second Amended Joint Plan of Liquidation of DESA Holdings Corporation and its debtor- affiliate -- DESA International LLC. The Court confirmed the Plan on April 1, 2005, and Plan took effect the same day. Kirkland & Ellis, LLP, and Pachulski, Stang, Ziehl Young Jones & Weintraub, P.C., represented the DESA entities. About DHP Holdings II Headquartered in Bowling Green, Kentucky DHP Holdings II Corp. sells and distributes heating commercial products in Europe and Mexico. The Debtors own manufacturing, storage and distribution facilities in Alabama and California. DHP HOLDINGS: Case Summary & 35 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: DHP Holdings II Corporation aka DESA (Cayman) Holding LLC aka DESA (Cayman) II Holding LLC 2701 Industrial Drive Bowling Green, KY 42101 Bankruptcy Case No.: 08-13422 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- DESA, LLC 08-13423 DESA Heating, LLC 08-13424 DESA Specialty, LLC 08-13425 DESA FMI, LLC 08-13426 DESA IP, LLC 08-13427 Type of Business: The Debtors sell and distribute heating commercial products in Europe and Mexico. The Debtors have manufacturing, storage and distribution facilities in Alabama and California, Chapter 11 Petition Date: December 29, 2008 Court: District of Delaware (Delaware) Judge: Mary F. Walrath Debtor's Counsel: Bruce Grohsgal, Esq. bgrohsgal@pszyj.com Laura Davis Jones, Esq. ljones@pszjlaw.com Timothy P. Cairns, Esq. tcairns@pszjlaw.com Pachulski, Stang, Ziehl Young & Jones LLP 919 N. Market Street, 16th Floor Wilmington, DE 19899-8705 Tel: (302) 778-6403 Fax: (302) 652-4400 Restructuring Officer: AEG Partners and Craig S. Dean as chief restructuring officer and Kevin Willis as assistant chief restructuring officer. Claims Agent: Epiq Bankruptcy Solutions, LLC Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Interpro Manufacturing, L trade $3,066,069 5/F, New Bright Industrial Ctr Sheung Yuet Rd Kowloon Bay, Hong Kong Tel: (852) 2363-1988 RYERSON COIL PROCESSING trade $2,343,687 Attn: Verla 24491 Network Place Chicago, IL 60673 Tel: (513) 896-2951 Fax: (513) 425-9317 WINNSPEC INTERNATIONAL CO. trade $2,072,664 Attn: Norman Jou 13F-1 207, Fu Sing Road Taoyuan City, Taiwan Roc Tele: 8-863-333-2107 Fax: 866-3-333-2752 WINNERS PRODUCTS ENGINEER trade $1,988,208 Attn: Desmond 25/F Top Glory Tower 262 Gloucester Rd. Causeway Bay, Hong Kong Tele: 1-1-8-529-045-5883 Fax: 852-2891-1300 GARDEN FLAME GAS APPLIANCE trade $1,860,523 4-402 Hua Jiang Rd. Hua Un Ju, Dashi, Panyu Guangzhou, China 511430 Tele: 86-20-84592859 Fax: 86-20-84992851 KBK FINANCIALS INC settlement $1,100,000 Attn: Robert McGee 301 Commerce St. Fort Worth, TX 76102 Tel: (817) 258-6020 Fax: (817) 420-6705 COPRECI, S. COOP trade $1,007,855 Attn: Ruben Matteos N9443 Narcisa Marquez 730 Fifth Ave. - 7th Floor New York, NY 10019 Tel: (678) 560-2154 Fax: (678) 978-9852 MAAS-HANSEN STEEL CORP. trade $894,569 Attn: Chris 1.0. PO Box 58364 Vernon, CA 90058 Tel: (323) 583-6321 Fax: (323) 586-9535 SCHEU MANUFACTURING CO. note $892,656 Phil Chiazza PO Box 250 Attn: Upland, CA 91785 Tel: (909) 981-5343 S.I.T. CONTROLS trade $867,861 Attn: Michelle Plyler 900 CENTER PARK DR., SUITE J Charlotte, NC 28217 Tel: (704) 522-6325 Fax: (704) 522-7945 REGAL BELOIT ELECTRIC MOT trade $756,447 Attn: Jil Roe Bin# 88159 Milwaukee, Wi 53288 Tel: (260) 416-5441 LEWISBURG CONTAINER COMPA Attn: Tami or D Kessler trade $744,310 PO Box 933931 Atianta,GA 31193 Tel: (937) 962-2681 Fax: (937) 962-4504 PLASPROS INC PLASPROS INC trade $619,506 PO Box 66116 Attn: Mark Doner Chicago, IL 60666 PO Box 66116 Chicago, IL 60666 Tel: 62-563-8635 Fax: 662-563-1737 BURNER SYSTEMS INTERNATIO trade $468,658 CONSTRUCTION BOLT trade $393,306 KELLY HART & HALLMAN LLP trade $359,486 WORGAS, INC trade $357,306 AMMUNITION ACCESSORIES trade $352,109 REVCOR trade $288,344 COLUMBUS ENGINEERING, INC trade $288,344 CREATIONS IN WOOD trade $281,934 O'NEAL TUBE PROCESSING trade $273,023 SAKURA trade $259,072 PACKAGING CORP OF AMERICA trade $257,271 MCGREGOR & ASSOCIATES trade $257,271 DUPONT POWDER COATINGS trade $235,466 C.H. ROBINSON WORLDWIDE I trade $232,615 NATIONAL KWIKMETAL SERVIC trade $217,769 PERFORMANCE STEEL,LLC trade $212,040 OLlNIWINCHESTER trade $233,809 SPEC PRINT trade $209,320 HONGDA GROUP. CO., LTD trade $207,040 NORTON IGNITOR PRODUCTS trade $204,081 DIRECT METALS trade $195,295 MOZAIK trade $181,531 The petition was signed by chief restructuring officer Craig S. Dean. DIAS HOLDING: Two Directors Voluntarily Resign ---------------------------------------------- Two of DIAS Holding, Inc.'s directors voluntarily resigned in November -- Yung-Hsiang "Paul" Chou and Hsiu-Pin "Sharon" Hsu. In the latest 10-Q report filed with the Securities and Exchange Commission, the company disclosed that the bulk of sales was attributed to its Asia Forging Supply subsidiary, but at a slight cumulative loss of $0.0028 per share. "Since 2006, we have succeeded in changing from a balanced sales combination between OEM and aftermarket sales to predominantly aftermarket driven. In 2007 and again in 2008, over 70 percent of our sales are from our spare-parts aftermarket and performance-parts aftermarket customers as part of our strategy to adjust to the decline in the North American OEM automotive market," Eric Huang, Chairman, CEO and President of DIAS Holding, stated. "The slight cumulative loss to date this year is because we are the first to create an auto salon in the U.S., which copies the success of year-round automotive salons in Asia. Even though new car sales are down, the U.S., and especially Detroit is known throughout the Asian automotive business community as the center of automobile technology and excellence, as indicated by the successful sales of Buicks and similar American-designed cars in China. So, Asian automotive systems and component manufacturers naturally want to migrate and establish a presence in the U.S. Thus, we will be concentrating in fulfilling the objectives of our strategic alliances and partnerships in 2009," summarized Chairman Huang. In 2008, DSHL has established cross-marketing agreements with automotive manufacturing centers and auto parts organizations in Guangzhou, Hangzhou, Beijing, Shanghai and Wuhan, China, and in Pune, India. Collectively, there are over 5,000 automotive component manufacturers and sources are available for DSHL as potential exhibitors for its auto salon subsidiary, as well as potential partners for American companies to joint venture or cooperate with for business in China and India. "2009 will be the year when our auto salon will bear fruit from the first wave of exhibitors from these various locations," affirmed Michael Wesney, president of the auto salon subsidiary of DSHL. "Targeting the top firms for the first 100 exhibitors from each of our strategic alliance partners will result in revenues upwards of $3 million next year for us. Promoting U.S. companies and products into China for business engagements and opportunity will add to the generation of new revenue potential for DIAS," added Mr. Wesney. Going Concern Doubt In a regulatory filing, Mr. Huang said the company has a history of operating losses. "There is no assurance that we will be profitable in the future. The Company incurred a net loss of $185,230 for the fiscal year ended December 31, 2007. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Continuing losses may exhaust our capital resources and force us to discontinue operations." As of September 30, 2008, the company's balance sheet showed total assets of $11,491,565, total liabilities of $9,976,937 and total stockholders' equity of $1,514,628. The company's total current liabilities of $8,355,404 exceeded total current assets of $7,199,582. A full-text copy of the company's quarterly report is available for free at http://researcharchives.com/t/s?36ea About the DIAS Holding DIAS Holding, Inc. -- http://www.diasholding.com/-- is a Delaware Corporation servicing the multi-billion dollar industry of providing automotive, trucking, railway and petroleum industries with raw, finished and assembled components. The company's major subsidiaries include Asia Forging Supply Company, a prime contractor for a network of factories throughout Asia, and the Detroit International Auto Salon, the largest independent, year- round exhibition center for automotive products. DNC MULTIMEDIA: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: DNC Multimedia Corporation 11050 Regal Forest Drive Suwanee, GA 30024 Bankruptcy Case No.: 08-29582 Type of Business: The Debtor engages in the consumer electronics industry focused on portable devices. Chapter 11 Petition Date: December 19, 2008 Court: Southern District of Florida (West Palm Beach) Debtor's Counsel: Bradley S. Shraiberg, Esq. bshraiberg@kpkb.com Kluger, Peretz, Kaplan & Berlin, PL 2385 NW Executive Center Dr. #300 Boca Raton, FL 33431 Tel: (561) 443-0801 Fax : (561) 998-0047 Total Assets: $1,153,467 as of Dec. 31, 2007 Total Debts: $1,166,838 as of Dec. 31, 2007 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/fasb08-29582.pdf The petition was signed by secretary M. Dewey Bain. DUNE ENERGY: Has Until January 14 to Submit NYSE Compliance Plan ---------------------------------------------------------------- Dune Energy, Inc., received notice from the NYSE Alternext US indicating that the company is not in compliance with certain conditions of the Exchange's continued listing standards under Section 1003 of the company Guide. Specifically, the Exchange noted the company's failure to comply with (a) Section 1003(a)(i) of the company Guide relating to stockholders' equity of less than $2,000,000 and losses from continuing operations and net losses in two out of its three most recent fiscal years; (b) Section 1003(a)(ii) of the company Guide relating to stockholders' equity of less than $4,000,000 and losses from continuing operations and net losses in three out of its four most recent fiscal years; and (c) Section 1003(a)(iii) of the company Guide relating to stockholders' equity of less than $6,000,000 and losses from continuing operations and net losses in its five most recent fiscal years. The notice was based on a review by the Exchange of publicly available information, including the company's Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2008. Upon receipt of notice from the Exchange, the company is subject to the procedures and requirements of Section 1009 of the company Guide. The company has been afforded the opportunity to submit a plan of compliance to the Exchange by Jan. 14, 2009, advising the Exchange of the actions the company has taken, or will take, that would bring it into compliance with the continued listing standards identified above by June 15, 2010. If the Exchange accepts the plan, then the company may be able to continue its listing during the plan period up to June 15, 2010, during which time the company will be subject to periodic review to determine whether it is making progress consistent with the plan. If the company fails to submit such a plan, the plan is not accepted, the company does not make progress toward compliance consistent with the plan, or is not in compliance at the end of the plan period, then the company may be subject to delisting proceedings by the Exchange. There can be no assurance that the Exchange staff will accept the company's plan of compliance or that, even if such plan is accepted, the company will be able to implement the plan within the prescribed timeframe. The company has already informed the Exchange staff that it intends to make a timely submission to the Exchange in which it will outline the actions and timeframe by which the company intends to cure the listing deficiencies and to regain its compliance with the Exchange's continued listing requirements. As a consequence of falling below the Exchange's continued listing standards, the company's stock trading symbol has become subject to the indicator ".bc" to denote its noncompliance. The trading symbol will bear this indicator until the company regains its compliance with the Exchange continued listing requirements. About Dune Energy Headquartered in Houston, Texas, Dune Energy Inc. (Amex: DNE) -- http://www.duneenergy.com/-- is an independent exploration and development company, with operations focused along the Louisiana/Texas Gulf Coast and the North Texas Fort Worth Basin Barnett Shale. Proved reserves as of Jan. 1, 2008, totaled 175 Bcfe. At Sept. 30, 2008, the company's balance sheet showed total assets of $531.8 million and total liabilities of $589.2 million, resulting ina stockholders' deficit of $57.4 million. Cash at the end of the quarter was $33.4 million, versus $16.8 million at year end 2007. Accounts payable have decreased from $56.6 million at year end 2007 to $4.4 million at the end of the third quarter. There are no cash borrowings under the $40 million revolver. Third quarter capital spending was $12.8 million, bringing the year to date total to $34.2 million. For three months ended Sept. 30, 2008, the company reported net income of $14.2 million compared with net loss of $4.9 million for the same period in the previous year. For nine months ended Sept. 30, 2008, the company posted net loss of $27.5 million compared with net loss of $35.6 million for the same period in the previous year. * * * Moody's Investor Service placed Dune Energy Inc.'s senior secured debt, probability of default and long term corporate family ratings at 'Caa2' in April 2007. The ratings still hold to date with a stable outlook. ECOLOGY COATINGS: Auditor Raises Going Concern Doubt ---------------------------------------------------- UHY LLP in Southfield, Michigan, in a letter dated December 19, 2008, to the Board of Directors of Ecology Coatings, Inc., expressed substantial doubt about the company's ability to continue as a going concern. The firm audited the consolidated balance sheets of Ecology Coatings, Inc. and subsidiary as of September 30, 2008, and 2007, and the related consolidated statements of operations, stockholders' equity (deficit) and cash flows for the years then ended. UHY LLP said the company's recurring losses, negative cash flows from operations and net capital deficiency raise substantial doubt about its ability to continue as a going concern. For the years ended September 30, 2008 and 2007, the company incurred net losses of $6,770,322 and $4,560,870, respectively. As of September 30, 2008, the company had stockholders' deficit of $1,239,810 -- with total assets of $1,501,892 and total liabilities of $2,741,702. David W. Morgan, vice president, chief financial officer, and treasurer, said, "Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow to meet our obligations on a timely basis, to obtain additional financing or refinancing as may be required, to develop commercially viable products and processes, and ultimately to establish profitable operations. We have financed operations through operating revenues and, primarily, through the issuance of equity securities and debt. Until we are able to generate positive operating cash flows, additional funds will be required to support operations. We believe that cash investments subject to a securities purchase agreement with an investor will be sufficient to enable us to continue as a going concern through the fiscal year ending September 30, 2009. This securities purchase agreement does not legally bind the investor to make the investments and there can be no assurances that the investments will continue." A full-text copy of the company's annual report is available for free at http://researcharchives.com/t/s?36df About Ecology Coatings Ecology Coatings, Inc., develops ?clean tech?, nanotechnology- enabled, ultra-violet curable coatings that are designed to drive efficiencies, reduce energy consumption and virtually eliminate pollutants in the manufacturing sector. Ecology Coatings creates proprietary coatings with unique performance and environmental attributes by leveraging its platform of integrated clean technology products that reduce overall energy consumption and offer a marked decrease in drying time. ELAM TODD: Files for Chapter 7 Liquidation ------------------------------------------- Jack Hagel and John Murawski at The News & Observer report that Elam, Todd & d'Ambrosi, parent firm Elam, Todd, d'Ambrosi II PA, and ETD of South Carolina LLC have filed for Chapter 7 liquidation. Court documents say that Elam Todd reported gross income of almost $2 million this year, about 53% lesser than in 2007. Elam Todd also reported that customers owed the company almost $367,000, The News & Observer states. According to court documents, Elam Todd's operations in North Carolina and South Carolina claim to have less than $50,000 in assets each and more than $1 million in debts each. Amanda Hoyle at Triangle Business Journal relates that Kevin Sink, Esq., at Nicholls & Crampton represents Elam Todd as counsel. Triangle Business says that Elam Todd's creditors include: -- principals Elam, d'Ambrosi and Mallett; -- former partner Barbara Todd; -- Crescent State Bank; -- the Withers & Ravenel Inc. engineering firm; and -- Raleigh's Sepi Engineering Group Inc. Elam, Todd & d'Ambrosi is a Morrisville engineering firm that helped residential developers plan subdivisions. Elam Todd specialized in providing urban-planning, landscape-architecture, and civil-engineering services to real estate developers, builders and municipalities. Elam Todd's projects include several high- profile Triangle developments: Bedford at Falls River, Renaissance Park and Alexander Place in Raleigh and Carpenter Village, Tryon Village, and Waverly Place in Cary. Elam Todd also offered golf course design services after acquiring Cary's Robbins and Associates in early 2006. Twelve-year-old Elam Todd is led by principals Charles Elam, Donald d'Ambrosi and Patrick Mallett, and has been involved with some major commercial and residential real estate developments around the Triangle and along the coastal areas of North and South Carolina. EMERGENCY CENTERS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Emergency Centers of Texas, Ltd. 711 East Southlake Blvd. Suite 300 Southlake, TX 76092 Bankruptcy Case No.: 08-46011 Chapter 11 Petition Date: December 22, 2008 Court: United States Bankruptcy Court Northern District of Texas (Ft. Worth) Judge: Russell F. Nelms Debtor's Counsel: Christina Walton Stephenson, Esq. Pronske & Patel, P.C. 1700 Pacific Ave., Ste. 2260 Dallas, TX 75201 Tel.: (214) 658-6506 Fax : (214) 658-6509 Email: cstephenson@pronskepatel.com and Rakhee V. Patel, Esq. Pronske & Patel, P.C. 1700 Pacific Avenue Suite 2260 Dallas, TX 75201 Tel.: (214) 658-6500 Fax : (214) 658-6509 Email: rpatel@pronskepatel.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 A list of the Debtor's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/txnb08-46011.pdf The petition was signed by Charles J. O'Hearn, MD. EQUISTAR CHEMICALS: Discloses Two Officers' Termination of Service ------------------------------------------------------------------ Equistar Chemicals LP disclosed in a regulatory filing with the Securities and Exchange Commission that Morris Gelb has ceased to serve as an officer of the company. In a separate filing, the company also related that on Oct. 31, 2008, W. Norman Phillips, Jr. ceased to serve as officer. Headquartered in Houston, Texas, Equistar Chemicals LP, a wholly owned subsidiary of Lyondell Chemical Company (NYSE: LYO) -- http://www.lyondell.com/-- produces ethylene, propylene and polyethylene in North America and ethylene oxide, ethylene glycol, high value-added specialty polymers and polymeric powder. For three months ended SEpt. 30, 2008, the company posted net loss of $271 million compared to net income of $22 million for the same period in the previous year. For nine months ended Sept. 30, 2008, the company posted net loss of $1.4 billion compared to net income of $41 million for the same period in the previous year. At Sept. 30, 2008, the company's balance sheet showed total assets of $9,096 billion and total liabilities of $19.0 billion, resulting in a partners' deficit of $9.991 billion. ESTEVES CONCRETE: Files for Chapter 7 Protection ------------------------------------------------ The News & Observer reports that Esteves Concrete has filed for Chapter 7 bankruptcy. Esteves Concrete listed assets of $624,366 and debts of $1.2 million, The News & Observer relates. According to the report, Esteves Concrete clients owed the company about $386,000. Esteves Concrete is based in Fuquay-Varina, North Carolina. EVEREST CONSTRUCTION: Files for Chapter 7 Liquidation ----------------------------------------------------- News & Observer reports that Everest Construction has filed for Chapter 7 liquidation. According to News & Observer, Everest Construction owed creditors $26,500. the report says that clients owed Everest Construction at least $44,000. Everest Construction is a deck builder in Raleigh, North Carolina. FLYING J: Can Access Cash Collateral for Big West & Longhorn ------------------------------------------------------------ The Hon. Mary Walrath of the United States Bankruptcy Court for the District of Delaware authorized Flying J Inc. and its debtor-affiliates to use, on an interim basis, cash collateral for (i) Big East Oil LLC, Big West of California LLC and Big West Transportation, and (ii) Longhorn Pipeline Inc. securing repayment of secured loan to their lenders. The Debtors' Big West entities have about $53 million in secured funded debt under a credit agreement dated March 15, 2005, with Bank of America N.A., as administrative agent, to provide as much as $200 million revolving credit facility. On the one hand, Longhorn has $53 million outstanding in secured fund debt under a credit agreement dated December 19, 2007, with Merrill Lynch Capital Corporation, as administrative agent, and Merrill Lynch Bank USA, as lender, to provide about $120 million revolving credit facility due 2012 The Debtors said Big West entities defaulted on their obligations on Dec. 19, 2008, prompting BofA to accelerate and declare all amount owing and payable immediately. BofA ceased $35 million of cash from the Big West entities' bank accounts, which resulted on another default on payments of $120 million to crude oil suppliers. Longhorn also defaulted in its debt obligations with its lenders after it failed to make a mandatory repayment of $2.7 million under the loan. As a result, Longhorn could no long make any withdrawal from its bank with out it's lenders' consent. The Debtors said they have an urgent need to access cash collateral to fund working capital, capital expenditures, research and development efforts and other general corporate purposes. Access to cash collateral will enable Longhorn to increase the capacity of the pipeline to transport refined products, among other things. The Debtors will pay all current interests, reasonable fees and charges accruing under the loans. Furthermore, the Debtor will provide to the lenders with replacement security interest and liens in all of Big West entities and Longhorn's property and superiority claims with priority over all other administrative expense claims. A hearing is set for Jan. 16, 2009, at 11:30 a.m. (ET) to consider final approval of the motions. Objections, if any, are due Jan. 9, 2009, at 4:00 p.m. (ET). A full-text copy of Big West entities' cash collateral budget is available for free at http://ResearchArchives.com/t/s?36e3 A full-text copy of Longhorn cash collateral term sheet and budget is available for free at http://ResearchArchives.com/t/s?36e2 Headquartered in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com-- operate an oil company with operations in the filed of exploration and refining of petroleum products. The Debtors engage in online banking, card processing truck and trailer leasing, and payroll services. The Debtors also operate about 200 travel plazas in 41 states and six Canadian provinces. The company and six of its affiliates filed for Chapter 11 protection on Dec. 22, 2008 (Bankr. D. Del. Lead Case No. 08-13384). Kirkland & Ellis LLP represents the Debtors' in their restructuring efforts and Young, Conaway, Stargatt & Taylor LLP as their Delaware Counsel. The Debtors proposed The Blackstone Group LP as financial advisor and Epiq Bankruptcy Solutions LLC as claims agent. When the Debtors filed for protection from its creditors, they listed assets more than $1 billion and debts between $100 million to $500 million. FLYING J: Organizational Meeting to Form Panel on January 5 ----------------------------------------------------------- Roberta A. DeAngelis, the Acting United States Trustee for Region 3, will hold an organizational meeting on January 5, 2009, at 1:00 p.m. in the bankruptcy cases of Flying J Inc., and and its debtor-affiliates. The meeting will be held at The DoubleTree Hotel, 700 King Street, Salon C, Wilmington, Delaware. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtor's cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. Headquartered in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com-- operate an oil company with operations in the filed of exploration and refining of petroleum products. The Debtors engage in online banking, card processing truck and trailer leasing, and payroll services. The Debtors also operate about 200 travel plazas in 41 states and six Canadian provinces. The company and six of its affiliates filed for Chapter 11 protection on Dec. 22, 2008 (Bankr. D. Del. Lead Case No. 08-13384). Kirkland & Ellis LLP represents the Debtors' in their restructuring efforts and Young, Conaway, Stargatt & Taylor LLP as their Delaware Counsel. The Debtors proposed The Blackstone Group LP as financial advisor and Epiq Bankruptcy Solutions LLC as claims agent. When the Debtors filed for protection from its creditors, they listed assets more than $1 billion and debts between $100 million to $500 million. FORD MOTOR: Kirk Kerkorian Sells Remaining Stake in Firm -------------------------------------------------------- Jeff Bennett at The Wall Street Journal reports that Kirk Kerkorian has sold his remaining 6.1% stake in Ford Motor Co. Mr. Kerkorian's Tracinda Corp. no longer owns any shares in Ford Motor, WSJ relates, citing Tracinda spokesperson Winnie Lerner. Tracinda had 133.5 million shares left in Ford Motor, WSJ states. Earlier this year, Tracinda purchased a 6.5% stake in Ford Motor, WSJ states. Mr. Kerkorian said in April that he had acquired 100 million shares in Ford Motor, and increased it in June, according to WSJ. WSJ relates that Tracinda said that it was considering a "possible infusion of additional capital" into Ford Motor to give the company "more flexibility in implementing its turnaround process," but no investment occurred and Mr. Kerkorian started to cut his stake amid slowing automotive sales and his own financial pressures. Tracinda sold about 7.3 million shares of Ford Motor common stock in October and had said it might continue selling its holdings through the end of 2008, WSJ reports. Jeff Green at Bloomberg News relates that Mr. Kerkorian said that he would focus his investments on energy, gambling, and hotels. Mr. Kerkorian, according to WSJ, said that he had started selling the shares and most recently reported holdings on Oct. 28, when he said his stake had dropped below 5%. 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-'. GENERAL MOTORS: Treasury Loans $1-Bil. for GMAC Rights Offering --------------------------------------------------------------- The U.S. Treasury Department said Dec. 29 it will purchase $5 billion in senior preferred equity with an 8% dividend from GMAC LLC as part of a broader program to assist the domestic automotive industry in becoming financially viable. Under the agreement, GMAC must be in compliance with the executive compensation and corporate governance requirements of Section 111 of the Emergency Economic Stabilization Act, as well as enhanced restrictions on executive compensation. GMAC will issue warrants to Treasury in the form of additional preferred equity in an amount equal to 5% of the preferred stock purchase that will pay a 9% dividend if exercised. Additionally, the Treasury has agreed to lend up to $1 billion to General Motors so that GM can participate in a rights offering at GMAC in support of GMAC's reorganization as a bank holding company. This commitment is in addition to the assistance previously announced for GM on Dec. 19. This loan will be exchangeable at any time, at Treasury's option, into the GMAC equity interests being acquired by GM in the rights offering. Furthermore, this loan will be secured and will have other terms and conditions as outlined in the attached term sheet. The ultimate level of funding under this facility will be dependent upon the level of current investor participation in the rights offering at GMAC. Treasury exercised this funding authority under the Emergency Economic Stabilization Act's Troubled Asset Relief Program (TARP). The preferred stock purchase and the loan to support GMAC's rights offering are part of an auto industry-focused TARP program that will include the $17.4 billion in assistance for domestic automakers announced earlier this month. Treasury will work with Congress and the President-elect's transition team on the appropriate timing for release of the remainder of the TARP funds to support financial market stability. 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 is the biggest lender to GM's 6,500 dealers nationwide, most of which get the financing they need to operate and buy vehicle inventory from the automaker, CNNMoney.com notes. 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. On December 24, 2008, GMAC Financial Services' application to become a bank holding company under the Bank Holding Company Act of 1956, as amended, was approved by the Board of Governors of the Federal Reserve System. In addition, GMAC Bank received approval from the Utah Department of Financial Institutions to convert to a state bank. As a bank holding company, GMAC will have expanded opportunities for funding and access to capital, which will provide increased flexibility and stability. For three months ended Sept. 30, 2008, the company reported net loss of $2.5 billion compared to net loss of $1.5 billion for the same period in the previous year. For nine months ended Sept. 30, 2008, the company incurred net loss of $5.5 billion compared to $1.6 billion for the same period in the previous year. At Sept. 30, 2008, GMAC's balance sheet showed total assets of $211.3 billion, total liabilities of $202.0 billion and members' equity of about $9.3 billion. * * * As reported in the Troubled Company Reporter on Dec. 15, 2008, 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. 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. GENERAL MOTORS: Sues Cadence to Comply with Deal, Recover Tooling ----------------------------------------------------------------- General Motors Corporation sued Cadence Innovation LLC and its affiliates before the U.S. Bankruptcy Court for the District of Delaware. In its complaint filed on Dec. 24, 2008, General Motors seeks the Debtors' specific performance on an Accommodation Agreement dated August 26, 2008. GM complains that in direct contravention of the Accommodation Agreement, the Debtors are holding hostage tooling and equipment critical to the manufacture of GM vehicles. While GM's right to possession of the tooling and equipment is indisputable, the Debtors' failure to turn over the Tooling and Equipment and interference with GM's legal purchase rights is unjustified and threatens GM's vehicle assembly operations, James S. Yoder, Esq., at White & Williams LLP, in Wilmington, Delaware, argues, on GM's behalf. Mr. Yoder relates that before the Petition Date, GM and the Debtors are parties to purchase orders, whereby the Debtors sold to GM component parts for installation into new vehicles and tooling for the production of the component parts. The Debtors are the sole source suppliers to GM of the Component Parts. The Component Parts are essential to GM's manufacturing and assembly operations and without sufficient quantities of the Component Parts, GM cannot maintain production, Mr. Yoder says. A day's disruption in supply of certain Component Parts could cause a shutdown of GM assembly operations, he avers. The Accommodation Agreement By August 2008, the parties entered into an Accommodation Agreement, whereby GM provided accommodations to the Debtors, including certain prepayments and payments made in satisfaction of commercial issues; expedited payment terms; funding for certain tooling; and certain credit enhancements. GM also agreed not to re-source its production unless an event of default occurred of the Debtors commenced a liquidation. In return, the Debtors were required to continue to manufacture GM's required quantities of Component Parts and to provide GM immediate possession of tooling and related equipment used to produce the Component Parts. Under the Accommodation Agreement, any and all Tooling utilized to manufacture Component Parts is deemed to be Customer Tooling, owned by GM and subject to GM's immediate possession. GM was also granted an option to purchase and the right to take immediate possession of all or any Supplier Owned Tooling and all or any machinery or equipment used in the manufacture of the Component Parts. GM noted that in the week of December 15, 2008, it advised the Debtors of its intention to exercise its option to purchase certain Designated Equipment. However, despite GM's requests, the Debtors have not obtained an appraisal of Designated Equipment by Hilco Industrial. The Debtors also conditioned the release of the Designated Equipment subject to a post-transfer appraisal and GM's commitment to make payment promptly upon the completion of the appraisal. The Debtors' Default The Debtors, however, defaulted under the Accommodation Agreement when they failed to meet any of the set Sales Milestones under the Agreement despite an extension of time agreed by GM, according to Mr. Yoder. The Debtors have withdrawn their Motion to Sell Michigan Plants and have informed GM of the orderly liquidation of the estates. Mr. Yoder asserts that GM will suffer significant and irreparable harm if its supply of Component Parts is interrupted and possession of Tooling and Designated Equipment is withheld. To protect GM's supply of Component Parts and prevent a shutdown of its vehicle assembly operations, he continues, it is critical that GM be permitted to immediately remove the Customer Tooling and Designated Equipment from the Chesterfield Facility. Mr. Yoder tells the Court that the Debtors have failed to release the Customer Tooling to GM and did not cooperate with its removal for GM to resource production. The Customer Tooling is highly specialized and it would take a long lead time for its production, he says. GM says despite its demands, the Debtors refused to turn over the Customer Tooling and thus, substantially impairing not only the value of the Customer Tooling but GM's ability to mitigate its damages as well. Moreover, GM, must by January 12, 2009, have a successor supplier in place and producing Component Parts for the launch of the new Chevrolet Camaro, Mr. Yoder adds. Given the quantities of Component Parts that GM has on hand and the time it will take to resource production, if Debtors fail to allow GM immediate possession of the Customer Tooling and the Designated Equipment, GM's vehicle assembly operations will be interrupted, he points out. GM asks the Court to: (a) compel the Debtors to specifically perform their obligations under the Accommodation Agreement, including GM's immediate possession of the Customer Tooling; (b) grant it continuous access to Debtors' facilities to allow it to retrieve the Customer Tooling; (c) immediately allow it to take possession of the Designated Equipment pending an appraisal and payment of the purchase price; (d) engage Hilco to appraise Designated Equipment; and (e) order the Debtors to sell to GM the Designated Equipment per the pricing terms provided in the Accommodation Agreement. GM also argues that the Debtors are in breach of the accommodation Agreement by refusing to grant GM immediate possession of the Customer Tooling, and preventing GM from exercising the Designated Equipment Option. The Debtors have wrongfully exerted dominion over GM's property resulting to its incurrence of damages, Mr. Yoder contends. GM thus asks the Court to (i) enter a judgment its favor and against the Debtors for damages arising from the Debtors' breaches and conversion of the Customer Tooling; and (ii) grant it treble damages pursuant to statute. GM further asks the Court to declare that: (a) it has no obligations and commitments to the Debtors, with respect to its right to immediate possession of the Customer Tooling and exercise of the Designated Equipment Option, other than those obligations set forth in the Accommodation Agreement; and (b) it has not breached any obligation or commitment to the Debtors under the Accommodation Agreement and that, except for payments relating to GM's exercise of the Designated Equipment Option, GM has not liability to the Debtors under the Accommodation Agreement. GM also seeks an award of its litigation costs, including attorneys' fees. Adversary Proceeding, Not Motion Before the filing of the suit, GM filed a motion to compel Cadence to comply with the Accommodation Agreement. Norman L. Pernick, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, Cadence's counsel, asserted that as a matter of law, GM's Motion must be denied because Rule 7001 (1) and (7) of the Federal Rules of Bankruptcy Procedure designate that GM can only seek approval of its Motion through an adversary proceeding and a complaint as well as a motion for a temporary restraining order and a preliminary injunction. To the extent the Court further considers GM's Motion, the Motion should be denied because it is unwarranted and should never have been filed, the Debtors contend. Moreover, Mr. Pernick clarified that the Debtors did not refuse to release certain Tooling to GM. With an adversary proceeding before the Court, he maintained, the evidence will show that despite difficulties created by GM's own conduct, the Debtors have made extraordinary efforts to fulfill their performance obligations under the Accommodation Agreement. Mr. Pernick also asserted that GM does not have the right to take possession of the Designated Equipment until GM first pays the purchase price. He said that the Debtors did request Hilco to appraise the Designated Equipment, but Hilco omitted from its appraisal a significant portion of the Designated Equipment on which the Debtors spent millions of dollars to make parts for GM. "GM now wants to seize the equipment without paying for it, simply because Hilco did not include the equipment in its appraisal," Mr. Pernick said. "Not only is GM's Motion with respect to the Designated Equipment inconsistent with the Accommodation Agreement, but also violates any basic notion of fairness and reasonableness." Mr. Pernick also disclosed that GM agreed to fund its allocable share of winddown costs for the Debtors, but failed to do so despite the Debtors' repeated requests. He emphasized that the Debtors have incurred significant costs, in million of dollars, to ensure that GM would enjoy a smooth transition from the Debtors' production of component parts vital to the manufacture of GM vehicles to GM's new supplier, at significant expense to the Debtors' estates. Unless and until GM fulfill its own material obligations under the Accommodation Agreement, and completes a materially acceptable Liquidation Budget, it should not be permitted to enforce the Accommodation Agreement, Mr. Pernick said. 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 US$10 million and US$50 million, and debts of between US$100 million and US$500 million. (Cadence Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) 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. GLOBAL AIRCRAFT: Defaults on Victory Park Loans; Director Resigns ----------------------------------------------------------------- Global Aircraft Solutions, Inc., and its subsidiaries Hamilton Aerospace Technologies, Inc., World Jet Corporation and Hamilton Aerospace S.A. de C.V. on December 19, 2008, failed to make required payments of principal due under three non-convertible secured debentures and two senior secured notes, all with Victory Park Master Fund, Ltd. in the total amount of $7,121,316. As of December 19, 2008, the aggregate accrued and unpaid interest under the Victory Park Loans amounted to $258,109.84. The Victory Park Loans provide that a failure to pay any amount of principal, interest or late charges when due, if such failure continues for a period of at least five business days, constitutes an "Event of Default." Upon the occurrence of an Event of Default, among other things, the Interest Rate of the Victory Park Loans is increased to 25% per annum. The company is currently in default for failure to make required payments of interest under the Victory Park Loans. As of December 19, 2008, the aggregate accrued but unpaid default interest under the Victory Park Loans is an amount equal to $426,282.71. Unless the Lender agrees to modify the Victory Park Loans or alternative financing can be obtained, the company will also default on the requirement to pay the principal amounts due under the Victory Park Loans. On December 22, 2008, the companies received a notice of default from the Lender. The notice demands, among other things, immediate payment of all current outstanding principal, interest and other amounts due under the Victory Park Loans. Director Resignation On December 21, 2008, Michael Hannley notified Global that due to increased demands on his time resulting from challenges facing the financial industry, he could no longer devote the time necessary to serve on Global's Board of Directors. Accordingly, Mr. Hannley tendered, and Global accepted, his resignation from Global's Board of Directors effective immediately. Third Quarter Results For the three months ended September 30, 2008, the company posted a net loss of $3,180,156. Gordon Hamilton, chief executive officer and director, John Sawyer, president, chief operating officer and director, and Patricia Graham, interim chief financial officer, had noted that the company has incurred recurring losses from operations, which include substantial inventory write downs due to declining market values and significant allowances taken against the company's outstanding accounts receivable. Various events of default have occurred and are continuing under secured debentures with Victory Park. "Victory Park has not consented to or waived any past, present or future defaults under the debentures or related transaction documents. Victory Park, however, is currently examining the situation and actively working with the company in an effort to resolve the matter, while it considers all of its rights, powers, privileges and remedies under the debentures and related transaction documents." Mr. Hamilton, Mr. Sawyer and Ms. Graham had pointed out that there is substantial doubt that the company will be able to repay this indebtedness on the due date. "Management has instituted a cost reduction program that includes reductions in management salaries, in labor and fringe benefit costs, in discretionary spending and has instituted more efficient management techniques for contract approval, collection of receivables, cash management and targeted marketing efforts. Management believes these factors will contribute toward achieving profitability." As of September 30, 2008, the company's balance sheet showed total assets of $23,782,299, total liabilities of $17,314,653, and total stockholders' equity of $6,467,646. A full-text copy of the company's quarterly report is available for free at http://researcharchives.com/t/s?36f7 About Global Aircraft Solutions Headquartered in Tucson, Arizona, Global Aircraft Solutions -- http://www.globalaircraftsolutions.com-- provides parts support and maintenance, repair and overhaul (MRO) services for large passenger jet aircraft to scheduled and charter airlines and aviation leasing companies. Hamilton Aerospace and World Jet, both divisions of Global Aircraft Solutions, operate from adjacent facilities comprising about 25 acres located at Tucson International Airport. These facilities include hangars, workshops, warehouses, offices and other buildings. Notable customers include G.A. Telesis, AfriJet, Zero G, Swift Air, Pamir Airways, Wind Rose Aviation, Jetran International, the Mexican Presidential Fleet, SEDENA, Canadian North Airlines, Iraqi Airways, Ryan International Airlines, and Alant Soyuz. GLOBAL MOTORSPORT: Plan Filing Period Extended to Dec. 29, 2008 --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended Global Motorsport Group, Inc., and its debtor-affiliates' exclusive periods to: a) file a plan through and including Dec. 29, 2008. b) solicit acceptances of the plan through and including Feb. 27, 2009. This is the second extension of the Debtors' Exclusive Periods. The Debtors' Exclusive Plan Filing Period was initially extended to Sept. 29, 2008, and the Exclusive Solicitation Period to Nov. 27, 2008. As reported in the Troubled Company Reporter on March 12, 2008, the Court approved the sale of substantially all of the Debtors' assets to Dae-II USA, Inc. for $16 million. The Debtors will use the extension to address post-closing issues with Dae-II under the APA, including the possible assumption and assignment of the Held Contracts. In addition, in order to effectively move the plan process forward, the Debtors need to review and analyze claims filed in these cases. About Global Motorsport Headquartered in Morgan Hill, California, Global Motorsport Group Inc. -- http://www.gmgracing.com/home.shtml-- is a dealer of European model sports cars. The company is also known as Global Motorsport Parts Inc. The company and three of its affiliates filed for protection on Jan. 31, 2008 (Bankr. D. Del. Lead Case No. 08-10192). Laura Davis Jones, Esq., James O'Neill, Esq., and Joshua Fried, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtors as counsel. T. Scott Avil, Esq., at CRG Partners Group LLC, is the Debtors' restructuring services provider. Federico G.M. Mennella, Esq., is the Debtors' investment banker. The Debtors selected Epiq Bankruptcy Solution LLC as their claims agent. The U.S. Trustee for Region 3 has appointed five creditors to serve on an Official Committee of Unsecured Creditors in these cases. Jeffrey M. Schlerf, Esq., Eric M. Sutty, Esq., and Kathryn D. Saille, Esq., at Bayard P.A., and James Donell, Esq., at Andrews Kurth LLP, represent the Committee in these cases. Edward T. Gavin, CTP, at NachmanHaysBrownstein, Inc., is the Committee's financial advisor. Adam Harris, Esq., and David Hillman, Esq., at Schulte Roth & Zabel LLP, serve as counsel to the prepetition and postpetition secured lenders. When the Debtors filed for protection from their creditors, they listed assets of between $50 million and $100 million and debts of between $100 million and $500 million. GMAC LLC: Debt Exchange Offers Expire, Results Tabulation Ongoing ----------------------------------------------------------------- GMAC Financial Services' separate private exchange offers and cash tender offers to purchase and exchange certain of its and its subsidiaries' and Residential Capital, LLC's outstanding notes, expired on December 26. According to reports, GMAC has remained silent on whether bondholders had approved a plan that would help provide GMAC with federal bailout money. Bloomberg.com citing a company spokeswoman related that the company is still tabulating the results of its debt exchange with bondholders. The auto lender, Bloomberg added, needed investors holding 75% of its $38 billion in bonds to exchange the notes and complete the transaction. On Dec. 16, 2008, GMAC disclosed in a regulatory filing with the Securities and Exchange Commission that it received significant additional participation in its separate private exchange offers and cash tender offers. On December 17, the preliminary results of GMAC LLC's separate private exchange offers and cash tender offers showed approximately $16.9 billion in aggregate principal amount or 58% of the outstanding GMAC old notes had been tendered in the GMAC offers and approximately $3.5 billion in aggregate principal amount or 38% of the outstanding ResCap old notes had been tendered in the ResCap offers. GMAC disclosed in a December 19 filing that in connection with its separate private exchange offers and cash tender offers, GMAC intends to undertake a transaction or series of transactions pursuant to which, concurrently with or shortly after completion of the GMAC offers and ResCap offers and receipt of all requisite approvals, GMAC would transfer ResCap old notes acquired by GMAC in the ResCap debt-for-debt exchange offers in an amount equal to at least 25% of ResCap's outstanding debt to ResCap in exchange for all or a majority of the non-voting common equity of IB Finance Holding Company LLC held by ResCap. IB Finance is the parent entity for GMAC Bank. Immediately after the IB Finance Transaction, ResCap would cancel the ResCap old notes acquired from GMAC. The completion of the IB Finance Transaction, if undertaken, would be subject to various conditions, including agreement on the terms of the IB Finance Transaction with ResCap, the completion of the GMAC offers and the ResCap offers and the receipt of a fairness opinion with respect to the IB Finance Transaction, and there can be no assurance that the IB Finance Transaction will be completed. Whether or not the IB Finance Transaction will constitute a "Succession Event" with respect to any credit default swap contracts related to the ResCap old notes or otherwise will be a function of the terms of the contracts between the applicable parties. Global Bondholder Services Corporation, the information agent for the offers, is available to assist investors with questions regarding the tender and exchange process or other logistical issues, at (866) 794-2200 (U.S. Toll- free). About ResCap Headquartered in Minneapolis, Minnesota, Residential Capital LLC -- http://www.rescapholdings.com/-- is the home mortgage unit of GMAC Financial Services, which is in turn wholly owned by GMAC LLC. 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 is the biggest lender to GM's 6,500 dealers nationwide, most of which get the financing they need to operate and buy vehicle inventory from the automaker, CNNMoney.com notes. 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. On December 24, 2008, GMAC Financial Services' application to become a bank holding company under the Bank Holding Company Act of 1956, as amended, was approved by the Board of Governors of the Federal Reserve System. In addition, GMAC Bank received approval from the Utah Department of Financial Institutions to convert to a state bank. As a bank holding company, GMAC will have expanded opportunities for funding and access to capital, which will provide increased flexibility and stability. For three months ended Sept. 30, 2008, the company reported net loss of $2.5 billion compared to net loss of $1.5 billion for the same period in the previous year. For nine months ended Sept. 30, 2008, the company incurred net loss of $5.5 billion compared to $1.6 billion for the same period in the previous year. At Sept. 30, 2008, GMAC's balance sheet showed total assets of $211.3 billion, total liabilities of $202.0 billion and members' equity of about $9.3 billion. * * * As reported in the Troubled Company Reporter on Dec. 15, 2008, 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. GMAC LLC: U.S. Treasury Announces $5-Bil. TARP Investment --------------------------------------------------------- The U.S. Treasury Department said Dec. 29 it will purchase $5 billion in senior preferred equity with an 8% dividend from GMAC LLC as part of a broader program to assist the domestic automotive industry in becoming financially viable. Under the agreement, GMAC must be in compliance with the executive compensation and corporate governance requirements of Section 111 of the Emergency Economic Stabilization Act, as well as enhanced restrictions on executive compensation. GMAC will issue warrants to Treasury in the form of additional preferred equity in an amount equal to 5% of the preferred stock purchase that will pay a 9% dividend if exercised. Additionally, the Treasury has agreed to lend up to $1 billion to General Motors so that GM can participate in a rights offering at GMAC in support of GMAC's reorganization as a bank holding company. This commitment is in addition to the assistance previously announced for GM on Dec. 19. This loan will be exchangeable at any time, at Treasury's option, into the GMAC equity interests being acquired by GM in the rights offering. Furthermore, this loan will be secured and will have other terms and conditions as outlined in the attached term sheet. The ultimate level of funding under this facility will be dependent upon the level of current investor participation in the rights offering at GMAC. Treasury exercised this funding authority under the Emergency Economic Stabilization Act's Troubled Asset Relief Program (TARP). The preferred stock purchase and the loan to support GMAC's rights offering are part of an auto industry-focused TARP program that will include the $17.4 billion in assistance for domestic automakers announced earlier this month. Treasury will work with Congress and the President-elect's transition team on the appropriate timing for release of the remainder of the TARP funds to support financial market stability. 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 is the biggest lender to GM's 6,500 dealers nationwide, most of which get the financing they need to operate and buy vehicle inventory from the automaker, CNNMoney.com notes. 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. On December 24, 2008, GMAC Financial Services' application to become a bank holding company under the Bank Holding Company Act of 1956, as amended, was approved by the Board of Governors of the Federal Reserve System. In addition, GMAC Bank received approval from the Utah Department of Financial Institutions to convert to a state bank. As a bank holding company, GMAC will have expanded opportunities for funding and access to capital, which will provide increased flexibility and stability. For three months ended Sept. 30, 2008, the company reported net loss of $2.5 billion compared to net loss of $1.5 billion for the same period in the previous year. For nine months ended Sept. 30, 2008, the company incurred net loss of $5.5 billion compared to $1.6 billion for the same period in the previous year. At Sept. 30, 2008, GMAC's balance sheet showed total assets of $211.3 billion, total liabilities of $202.0 billion and members' equity of about $9.3 billion. * * * As reported in the Troubled Company Reporter on Dec. 15, 2008, 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. 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. GRACE WU: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Grace E Wu, DDS, PC 587 Virginia Ave NE, Ste. E Atlanta, GA 30306 Bankruptcy Case No.: 08-86230 Chapter 11 Petition Date: December 22, 2008 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Debtor's Counsel: Jason L. Pettie, Esq. Jason L. Pettie, PC One Decatur Town Center 150 E. Ponce de Leon Avenue Suite 190 Decatur, GA 30030 Tel.: (404) 638-5984 Email: jasonpettie@gmail.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition and a list of the Debtor's largest unsecured creditors are available for free at: http://bankrupt.com/misc/ganb08-08702.pdf The petition was signed by Grace E. Wu, President of the company. GRAHAM PACKAGING: Names Mark S. Burgess as Chief Executive Officer ------------------------------------------------------------------ Graham Packaging Company, L.P., disclosed in a regulatory filing with the Securities and Exchange Commission that Mark S. Burgess has been named chief executive officer of Graham Packaging effective Jan. 1, 2009. Warren D. Knowlton will be resigning as chief executive officer of Graham Packaging, effective Dec. 31, 2008, but will serve as executive chairman of Graham Packaging. The company is in the advanced stages of searching for a new chief financial officer to replace Mr. Burgess. In the interim, Mr. Burgess will continue to fulfill the role of chief financial officer. Mr. Burgess has served as chief financial officer of Graham Packaging since 2006 and has served as chief operating officer of Graham Packaging since April 2008. In connection with his appointment to CEO, Mr. Burgess will no longer hold the position of COO. He served as president and CEO, well as CFO, of Anchor Glass Container Corporation, where he led the company through a financial restructuring. Prior to that time, he served as executive vice president and CFO of Clean Harbors Environmental Services, Inc., and prior to that was at JL French Automotive Castings, Inc. He holds a B.A. in economics from Dickinson College and an M.B.A. from the Fuqua School of Business at Duke University. In connection with Mr. Knowlton's resignation as CEO, he, Graham Packaging and Graham Packaging Holdings Company entered into a letter agreement dated Dec. 18, 2008, which sets forth the terms of Mr. Knowlton's employment as executive chairman and other matters. During that term, Mr. Knowlton's employment will continue to be governed by his existing employment agreement, except as set forth in the letter agreement. The letter agreement provides that, for purposes of Mr. Knowlton's pension benefits, Mr. Knowlton will be entitled to receive benefits as described in Section 6.2 of his employment agreement upon his continued employment as executive chairman through Dec. 31, 2009, and will be deemed not to have terminated his employment with Graham Packaging or Holdings until he resigns as executive chairman. In addition, Mr. Knowlton's time-based options will vest according to these schedules: Dec. 4, 2007, (20%), Dec. 31, 2008, (40%), Dec. 4, 2009, (20%) and Dec. 4, 2010, (20%) so long as Mr. Knowlton remains employed by Graham Packaging and Holdings as of each these date. A full-text copy of Mr. Knowlton's employment agreement is available for free at http://ResearchArchives.com/t/s?36de About Graham Packaging Headquartered in York, Pennsylvania, Graham Packaging Holdings company, -- http://www.grahampackaging.com/-- the parent company of Graham Packaging Company, L.P., is engaged in the design, manufacture and sale of customized blow molded plastic containers for the branded food and beverage, household, automotive lubricants and personal care/specialty product categories. As of the end of June 2008, the company operated 83 manufacturing facilities throughout North America, Europe and South America. The Blackstone Group is the majority owner of Graham Packaging Holdings company. Net income for the third quarter of 2008 was $5.68 million, compared to a loss of $13.39 million for the third quarter of 2007. For nine months ended Sept. 30, 2008, the company reported net income of 37.75 million compared with net loss of $23.87 million for the same period in the previous year. At Sept. 30, 2008, the company's balance sheet showed total assets of $2.25 billion and total liabilities of $3.00 billion, resulting in a partners' deficit of about $754.22 million. GREEN BUILDERS: Auditor Raises Going Concern Doubt -------------------------------------------------- PMB Helin Donovan, LLP, in Austin, Texas, in a letter dated December 23, 2008, to the Board of Directors and Stockholders of Green Builders, Inc., expressed substantial doubt about the company's ability to continue as a going concern. The firm audited the consolidated balance sheets of Green Builders, Inc., as of September 30, 2008 and 2007, and the related consolidated statements of operations, and stockholders' equity, and cash flows for the year ended September 30, 2008, and nine months ended September 30, 2007. PMB Helin Donovan noted that the company has suffered recurring losses from operations and has a net capital deficiency, which raise substantial doubt about its ability to continue as a going concern. President and Chief Executive Officer Clark N. Wilson said that the company's growth will require substantial amounts of cash for earnest money deposits, development costs, interest payments and homebuilding costs. "Until the company begins to sell an adequate number of lots and homes to cover its monthly operating expenses, sales and marketing, general and administrative costs will deplete cash. Due to current market conditions and slow home and land sales, the company may need to obtain additional capital. The company is currently in negotiations to dispose of some of its current land positions. In addition the company is seeking additional capital to support future growth and current operations for the next twelve months." On September 30, 2008, the company had approximately $3.7 million in cash and cash equivalents. In addition, the company's balance sheet showed total assets of $47,579,178, total liabilities of $47,436,723, and total stockholders' equity of $142,455. For the year ended September 30, 2008, the company posted a net loss of $14,832,608, on revenues of $8,993,205. A full-text copy of the company's annual report is available for free at http://researcharchives.com/t/s?36e5 About Green Builders Green Builders, Inc., is a real estate development and homebuilding company. The company commenced its homebuilding operations in June 2007 and it is currently building energy efficient homes in Austin, Texas. HAWAIIAN TELCOM: Bankruptcy Court OKs Transfer of Case to Hawaii ---------------------------------------------------------------- Judge Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware has approved the transfer of the Chapter 11 cases of Hawaiian Telcom Communications, Inc., Case No. 08-13086; Hawaiian Telcom Holdco, Inc., Case No. 08-13087; Hawaiian Telcom Inc., Case No. 08-13088; Hawaiian Telcom IP Service Delivery Research, LLC, Case No. 08-13090; Hawaiian Telcom IP Video Research, LLC, Case No. 08-13090; Hawaiian Telcom IP Service Delivery Investment, LLC, Case No. 08-13091; Hawaiian Telcom IP Video Investment LLC, Case No. 08-13092; and Hawaiian Telcom Services Company, Inc., Case No. 08-13093 to the U.S. Bankruptcy Court for the District of Hawaii. The Debtors' Chapter 11 cases are under Judge Lloyd King in Honolulu as of December 22, 2008, and have been assigned these case numbers: Entity Case No. ------ -------- Hawaiian Telcom Communications, Inc. 08-02005 Hawaiian Telcom Holdco, Inc. 08-02006 Hawaiian Telcom, Inc. 08-02007 Hawaiian Telcom IP Service Delivery Research LLC 08-02008 Hawaiian Telcom IP Video Research, LLC 08-02009 Hawaiian Telcom IP Service Delivery Investment LLC 08-02010 Hawaiian Telcom IP Video Investment, LLC 08-02011 Hawaiian Telcom Services Company, Inc. 08-02012 According to Pacific Business News, Judge Walsh held, "It is in the best interests of [Hawaiian Telcom's] estates, their creditors and other parties in interest." Hawaiian Telcom CEO Eric Yeaman, Pacific Business relates, explained that the company first filed in Delaware because it is incorporated there and its lead law firm, Kirkland & Ellis LLP, is based on the East Coast. According to Pacific Business, Hawaiian Telcom spokesperson Steven Golden said that all of the company's bankruptcy proceedings will be held in Hawaii, but hearings haven't been scheduled yet. Mr. Golden, Pacific Business relates, said Hawaiian Telcom decided to transfer the case in response to requests from Hawaii parties involved in the case, including creditors. The report says that most of the companies seeking payment for overdue bills are in Hawaii. The complaint entitled HYP Media Finance LLC v. Hawaiian Telcom, Inc., Adv. Proc. No. 08-51892, is also transferred to the Hawaii Bankruptcy Court. HYP filed its complaint on December 19, 2008. Before Judge Walsh entered the transfer venue ruling, HYP sought to have its Complaint transferred to the Hawaii Bankruptcy Court as well if the Delaware Court deemed it appropriate to transfer the Debtors' cases to the Hawaii Court. HYP is an unsecured creditor of the Debtors and is a counterparty to certain contract with the Debtors. Before the Delaware Court's ruling, noteholders Pacific Investment Management Company LLC and Capital Research and Management Company, on behalf of various funds and accounts that are beneficial holders of senior and subordinated notes issued by the Debtors, expressed support of the Debtors' venue transfer request. Pimco and CapRe profess to represent more than 40% of all known unsecured claims in the Debtors' cases. Pimco and CapRe agree that the interests of justice and convenience of the parties dictate that the Hawaii Bankruptcy Court preside over the cases, as all of the Debtors' employees, assets, operations and majority of their creditors are located in Hawaii. The U.S. Bankruptcy Court for the District of Delaware, however, retains venue and limited jurisdiction solely with respect to the retention application and fee applications of Klehr, Harrison, Harvey, Branzburg & Ellers LLP, proposed Delaware counsel to the Debtors. The Clerk of the Delaware Court is instructed to maintain the docket open for the Debtors' cases pending entry of a final fee order for Klehr Harrison. About Hawaiian Telecom Based in Honolulu, Hawaii, Hawaiian Telecom Communications, Inc. -- http://www.hawaiiantel.com/-- operates a telecommunications company, which offers an array of telecommunications products and services including local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. The company and five of its affiliates filed for Chapter 11 protection on Dec. 1, 2008 (Bankr. D. Del. Lead Case No. 08-13086). Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard Freres & Co. LLC as investment banker; Zolfo Cooper Management LLC as business advisor; Deloitte & Touche LLP as independent auditors; and Kurztman Carson Consultants LLC as notice and claims agent. When the Debtors filed for protection from their creditors, they listed total assets of $1,352,000,000 and total debts of $1,269,000,000 as of Sept. 30, 2008. (Hawaiian Telcom Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) HAWAIIAN TELCOM: Sec. 341 Meeting of Creditors on Jan. 27 --------------------------------------------------------- The Unites States Trustee for Region 15 will convene a meeting of the creditors of Hawaiian Telcom Communications, Inc., and its debtor subsidiaries at 2:00 p.m., on January 27, 2008, at the U.S. Trustee Hearing Room, Suite 606, at 1132 Bishop Street, in Honolulu, Hawaii. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtors' bankruptcy cases. Attendance by the Debtors' creditors at the meeting is welcome, but not required. The Sec. 341(a) meeting offers the creditors a one-time opportunity to examine the Debtors' representative under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. About Hawaiian Telecom Based in Honolulu, Hawaii, Hawaiian Telecom Communications, Inc. -- http://www.hawaiiantel.com/-- operates a telecommunications company, which offers an array of telecommunications products and services including local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. The company and five of its affiliates filed for Chapter 11 protection on Dec. 1, 2008 (Bankr. D. Del. Lead Case No. 08-13086). Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard Freres & Co. LLC as investment banker; Zolfo Cooper Management LLC as business advisor; Deloitte & Touche LLP as independent auditors; and Kurztman Carson Consultants LLC as notice and claims agent. The United States Trustee appointed five creditors to serve on the official committee of unsecured creditors in the case. When the Debtors filed for protection from their creditors, they listed total assets of $1,352,000,000 and total debts of $1,269,000,000 as of Sept. 30, 2008. Hawaiian Telcom's cases were transferred to Hawaii effective Dec. 22, 2008. Judge Lloyd King handles the case. (Hawaiian Telcom Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) HAWAIIAN TELCOM: Pimco and Capre Want to Join Creditors Committee ----------------------------------------------------------------- Pacific Investment Management Company LLC and Capital Research and Management Company ask the U.S. Bankruptcy Court for the District of Hawaii to direct the Office of the U.S. Trustee to appoint them to the Official Committee of Unsecured Creditors -- either in addition to the five current members of the Committee or as a replacement for two existing Committee members. The Noteholders urged the Hawaii Court to conduct an expedited hearing on their request on January 8, 2009. Judge Lloyd King, however, denied the Noteholders' request. The Hawaii Court will hear the Committee Appointment Motion in the ordinary course, on January 26, 2009. Any party who wishes to object must do so no later than January 8. The Bankruptcy Code articulate exactly one principle applicable to the formation of an official committee of unsecured creditors: the committee "shall ordinarily consist of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor." Chuck Choi, Esq., at Wagner Choi & Verbrugge, in Honolulu, Hawaii, contends that the U.S. Trustee for the District of Delaware utterly abandoned that principle and somehow managed to appoint a committee that denied membership to the Noteholders, who represent funds that alone hold 10 of the largest unsecured claims against the Debtors. Mr. Choi assert that Noteholders Pimco and CapRe, as investment managers, have the absolute authority to act on behalf of funds and accounts that are beneficial holders of more than $197.3 million of Senior Floating Rate Notes and 9.75% Senior Fixed Rate Notes as well as additional $20.4 million of 12.5% Senior Subordinated Notes issued by Debtor Hawaiian Telcom Communications, Inc. The Noteholders' claims, Mr. Choi elaborates, represent more than 56% of the $350 million in outstanding Senior Notes and an additional 13.5% of the 150 million in outstanding Subordinated Notes, and comprise more than 40% of all known unsecured claims in the Debtors' cases. "The Noteholders are or represent holder of the very largest unsecured claims in these cases," he maintains. Since the Debtors have claimed that this will strictly be a financial or "balance sheet" restructuring with the objective of wiping the Senior Notes and Subordinated Notes from the reorganized Debtors' books, the Noteholders will be an integral and necessary part of any reorganization, Mr. Choi asserts. Even the Debtors recognize this fact, he says. The Noteholders relate that the Delaware U.S. Trustee refused, without reason or explanation, to appoint them to the Committee. Instead, Mr. Choi reminds the Court, the Delaware U.S. Trustee appointed a five-member Committee consisting of: * The indenture trustee for the Senior Notes - U.S. Bank N.A; * Two trade creditors - Hawaii Electric Company, Inc., and Sprint Spectrum L.P. - holding claims that total less than $1.8 million or just 0.3% of known secured claims; * A union - International Brotherhood of Electrical Workers Telephone Local Union 1357 - that holds and represents no known claim; and * The indenture trustee for the Subordinated Notes - Deutsche Bank National Trust Company - which are subordinated to the Senior Noted and which the Debtors believe to be completely out of the money. "In other words, the Delaware U.S. Trustee appointed a committee whose members actually hold claims totaling less than one third of one percent (0.33%) of the unsecured claim pool," Mr. Choi argues. "A committee without the two largest unsecured creditors, and without any actual holder of Senior Notes, is not a committee that adequately represents the interests of unsecured creditors in general and holders of the Senior Notes in particular," Mr. Choi contends. About Hawaiian Telecom Based in Honolulu, Hawaii, Hawaiian Telecom Communications, Inc. - - http://www.hawaiiantel.com/-- operates a telecommunications company, which offers an array of telecommunications products and services including local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. The company and five of its affiliates filed for Chapter 11 protection on Dec. 1, 2008 (Bankr. D. Del. Lead Case No. 08-13086). Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard Freres & Co. LLC as investment banker; Zolfo Cooper Management LLC as business advisor; Deloitte & Touche LLP as independent auditors; and Kurztman Carson Consultants LLC as notice and claims agent. The United States Trustee appointed five creditors to serve on the official committee of unsecured creditors in the case. When the Debtors filed for protection from their creditors, they listed total assets of $1,352,000,000 and total debts of $1,269,000,000 as of Sept. 30, 2008. Hawaiian Telcom's cases were transferred to Hawaii effective Dec. 22, 2008. Judge Lloyd King handles the case. (Hawaiian Telcom Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) HCA INC: Cuts Jobs, 90 Information Technology Employees Affected ---------------------------------------------------------------- Nashville Business Journal reported that HCA Inc. is laying off some of its 2,600 workers. The company did not disclose how many of its headquarter employees will be affected. The report, citing HCA spokesman Ed Fishbough, stated that the job cut will include employees in the company's information technology department. According to the report, of the 1,300 employed in that division, about 85 to 90 people will lose their job. Mr. Fishbough, the report added, said that all lay offs include a severance package. Nashville Business Journal also stated that some HCA employees were given the option of part-time work or of volunteering for a severance package. Headquartered in Nashville, Tennessee, HCA Inc. -- http://www.hcahealthcare.com/-- is a provider of healthcare services. As of June 30, 2008, HCA operated 169 hospitals and 107 freestanding surgery centers, including eight hospitals and eight freestanding surgery centers operated through equity method joint ventures. At Sept. 30, 2008, the company's balance sheet showed total assets of $23.7 billion and total liabilities of $33.9 billion, resulting in a stockholders' deficit of about $10.2 billion. As of Sept. 30, 2008 HCA's balance sheet reflected cash and cash equivalents of $444.0 million, total debt of $27.0 billion, and total assets of $23.7 billion. During the third quarter, capital expenditures totaled $398.0 million. Net income for the third quarter of 2008 totaled $86 million, compared to $300.0 million in the third quarter of 2007. HCA's net income totaled $397 million during the first nine months of 2008 compared to $596 million for the same nine month period of 2007. HELLER EHRMAN: Files for Chapter 11 Bankruptcy to Liquidate ----------------------------------------------------------- Heller, Ehrman, White & McAuliffe, LLP, filed a voluntary petition under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Northern District of California following the approval of dissolution plan of the firm dated Sept. 26, 2008, by the members of the dissolution committee led by Peter J. Benvenutte. The firm said on its Web site that, effective Dec. 22, 2008, the freeze on the distributions from the shareholder Pension and Profit Sharing plan will lift. City National Bank told the firm that it will be sending a letter to all plan participants sometime next week, which letter outline the distribution options available to the firm's former shareholders, one of which is a tax deferred rollover of all or part of their balances to an IRA or another employer's eligible retirement plan. The firm further said the distributions from the LEO defined benefit pension plan will not be possible until later in 2009. City National will inform all shareholders after legal requirements for terminating the LEO plan is satisfied so that the benefits of that plan may be distributed. According to the firm, shareholders may elect lump sum distributions of cash or a tax deferred life annuity contract issued by an insurance company. Cash distributions will be eligible for tax deferred rollover treatment. Advisory Group of San Francisco will continue to manage the LEO plan's assets under 60% equity-40% fixed income strategy during the plan terminating process. The firm listed assets and debts between $50 million and $100 million in its filing. According to reports, the firm still has roughly $63 million in assets and 54 employees. Headquartered in San Francisco, California, Heller, Ehrman, White & McAuliffe, LLP -- http://www.hewm.com/-- is a law firm. HELLER EHRMAN: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Heller Ehrman LLP, Debtor fka Heller, Ehrman, White & McAuliffe, LLP 333 Bush Street San Francisco, CA 94104 Bankruptcy Case No.: 08-32514 Related Information: The Debtor is a law firm. See: http://www.hewm.com/ Chapter 11 Petition Date: December 28, 2008 Court: Northern District of California (San Francisco) Judge: Dennis Montali Debtor's Counsel: Greenberg Traurig LLP Debtor's Co-Counsel: John D. Fiero, Esq. jfiero@pszyjw.com Pachulski, Stang, Ziehl, Young and Jones 150 California St. 15th Fl. San Francisco, CA 94111-4500 Tel: (415) 263-7000 Estimated Assets: $50 million to $100 million Estimated Debts: $50 million to $100 million The Debtor did not file a list of 20 largest unsecured creditors. The petition was signed by Peter J. Benvenutti. HEXION SPECIALTY: Cancels Notes Offering due to Merger Termination ----------------------------------------------------------------- Hexion Specialty Chemicals, Inc., terminated the cash tender offers and consent solicitations by Nimbus Merger Sub Inc., a subsidiary of Hexion, for: A) any and all of the: i) outstanding $200,000,000 principal amount of Second- Priority Senior Secured Floating Rate Notes due 2014 (CUSIP No. 428303AG6) and ii) outstanding $625,000,000 principal amount of 9-3/4% Second-Priority Senior Secured Notes due 2014 (CUSIP No. 428303AH6) issued by Hexion U.S. Finance Corp. and Hexion Nova Scotia Finance, ULC, in each case on the terms and subject to the conditions set forth in an Offer to Purchase and Consent Solicitation Statement dated Oct. 8, 2008, and the accompanying Letter of Transmittal and Consent; and for B) any and all of the: i) outstanding $296,010,000 principal amount of 11-5/8% Senior Secured Notes due 2010 (CUSIP No. 44701RAE0), ii) outstanding $198,000,000 principal amount of 11-1/2% Senior Notes due 2012 (CUSIP No. 44701RAG5), iii) outstanding $175,000,000 principal amount of 7-3/8% Senior Subordinated Notes due 2015 (CUSIP No. 44701QAK8), iv) outstanding EUR135,000,000 principal amount of 7-1/2% Senior Subordinated Notes due 2015 (CUSIP No. 44701QAL6), v) outstanding $347,000,000 principal amount of 7-7/8% Subordinated Notes due 2014 (CUSIP No. 44701QAP7); and vi) outstanding ?400,000,000 principal amount of 6-7/8% Subordinated Notes due 2013 (Reg. S ISIN No. XS0274281186, Rule 144A ISIN No. XS0274281855), in each case issued by Huntsman International LLC, on the terms and subject to the conditions set forth in an Offer to Purchase and Consent Solicitation Statement dated Oct. 8, 2008, and the accompanying Letter of Transmittal and Consent. The tender offers were terminated as a result of the termination of the proposed merger between Huntsman Corporation and Hexion, the consummation of which had been a condition to the tender offers. None of the Notes were purchased in the tender offers and all Notes tendered and not withdrawn will be promptly returned to their holders. Nimbus had retained Oppenheimer & Co. Inc., to act as Dealer Manager in connection with the tender offers and consent solicitations. Questions about the tender offers and consent solicitations may be directed to Oppenheimer & Co. Inc., at (800) 274-2746 (toll free) or (212) 885-4646 (collect). About Hexion Specialty Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. -- http://www.hexionchem.com/-- is a producer of thermosetting resins, or thermosets. Thermosets are a critical ingredient in virtually all paints, coatings, glues and other adhesives produced for consumer or industrial uses. Hexion Specialty Chemicals is controlled by an affiliate of Apollo Management L.P. Hexion's balance sheet at Sept. 30, 2008, showed total assets of $3.8 billion and total liabilities of $5.4 billion, resulting in a shareholders' deficit of $1.6 billion. For three months ended Sept. 30, 2008, the company reported net loss of $76 million compared with net loss of $2 million for the same period in the previous year. For nine months ended Sept. 30, 2008, the company posted net loss of $269 million compared with net loss of $2 million for the sam period in the previous year. At Sept. 30, 2008, the company has $3,885 of debt, including $87 of short-term debt and capital lease maturities. In addition, at Sept. 30, 2008, the company has $321 in liquidity including $234 of unrestricted cash and cash equivalents, $21 of borrowings available under its senior secured revolving credit facilities, and $66 of borrowings available under additional credit facilities at certain domestic and international subsidiaries with various expiration dates through 2011. * * * As reported in the Troubled Company Reporter on Dec. 23, 2008, Moody's Investors Service confirmed the ratings (Corporate Family Rating -- CFR - at B2) on Hexion Specialty Chemicals, Inc. subsequent to the company's settlement agreement with Huntsman Corporation regarding litigation related to the failed acquisition of Huntsman by Hexion. Under the settlement agreement, HSCI would be liable for a $325 million payment and jointly and severally liable, along with certain affiliates of Apollo, for an additional $225 million. As part of the agreement, Apollo will contribute $200 million to Hexion LLC, which can be used for general corporate purposes. Hexion LLC is the parent company of HSCI. This concludes the review that was initiated on July 5, 2007 after the announcement of HSCI's bid to acquire Huntsman. The outlook on HSCI is negative. IAME GROUP: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: IAME Group Ltd. d/b/a Institute for Advanced Medical Education 27 Brookridge Court Rye Brook, NY 10573 Bankruptcy Case No.: 08-23860 Type of Business: The Debtor operates a vocational school. Chapter 11 Petition Date: December 22, 2008 Court: United States Bankruptcy Court Southern District of New York (White Plains) Debtor's Counsel: Dawn K. Arnold, Esq. Rattet, Pasternak & Gordon-Oliver, LLP 550 Mamaroneck Avenue Harrison, NY 10528 Tel.: (914) 381-7400 Fax : (914) 381-7406 Email: darnold@rattetlaw.com and Erica R. Feynman, Esq. Rattet, Pasternak & Gordon-Oliver, LLP 550 Mamaroneck Avenue Harrison, NY 10528 Tel.: (914) 381-7400 Fax : (914) 381-7406 Email: efeynman@rattetlaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition and a list of the Debtor's largest unsecured creditors are available for free at: http://bankrupt.com/misc/nysb08-23860.pdf The petition was signed by Erwin Kuperberg, President of the company. IDEARC INC: Board Member Resigns, NYSE Suspends Stock Trading ------------------------------------------------------------- Idearc Inc. disclosed in regulatory filings with the Securities and Exchange Commission that Jerry V. Elliott resigned as a member of the board of directors, effective Dec. 31, 2008. Mr. Elliott also served as a committee member of the Audit Committee and the Human Resources Committee of the board. Mr. Elliott has accepted a chief financial officer position at a publicly held company, which would require a significant amount of his time and commitment going forward. Idearc Inc. intended to make its semi-annual interest payment under the company's 8% Senior Notes due 2016 on its scheduled due date of Nov. 17, 2008. To date, the company has not provided any update on this matter. The company retained Merrill Lynch & Co. and Moelis & Company as financial advisors and continues to review alternatives related to the company's capital structure. On Nov. 21, 2008, the New York Stock Exchange Regulation Inc. suspended the company's common stock trading. NYSE also notified that it was initiating the delisting process relative to its common shares. The NYSE based its determination on the "abnormally low" trading price of the company's common stock, which closed at $0.13 on Nov. 18, 2008. The company also disclosed that common stock is currently trading over the counter under the trading symbol "IDAR". About Idearc Inc. Headquartered in Dallas, Texas, Idearc Inc. (NYSE: IAR) -- http://www.idearc.com/-- provides yellow and white page directories and related advertising products in the United States and the District of Columbia. Products include print yellow pages, print white pages, Superpages.com, Switchboard.com and LocalSearch.com, the company's online local search resources, and Superpages Mobile, its information directory for wireless subscribers. The company is the exclusive official publisher of Verizon print directories in the markets in which Verizon is currently the incumbent local exchange carrier. The company uses the Verizon brand on its print directories in its incumbent markets, as well as in its expansion markets. * * * As reported in the Troubled Company Reporter on Nov. 10, 2008, Moody's Investors Service has downgraded its $2,850 million senior unsecured notes, due 2016 to Caa2, LGD5, 87% from B3, LGD5, 87%. INDYMAC BANK: Sale to Private Equity & Hedge Fund Group Imminent ---------------------------------------------------------------- The Federal Deposit Insurance Corp. will sell IndyMac Bank to a group of private equity and hedge fund firms, CNNMoney.com reports, citing a source familiar with the situation. CNNMoney.com relates that the group includes investment firms J.C. Flowers & Co. and Dune Capital Management and hedge fund Paulson & Co. FDIC, according to the report, expects a deal to be disclosed by year-end. An Office of Thrift Supervision spokesperson said that the FDIC was "talking about" a "closing" in late January or early February, Dan Fitzpatrick, Damian Paletta, and David Enrich at The Wall Street Journal report. Christopher Flowers, John Paulson, and Dune Capital Management LP's chairperson Steve Mnuchin have teamed up in HoldCo LLC, seeking to buy IndyMac Bank, Dan Fitzpatrick, Damian Paletta, and David Enrich at WSJ relates, citing OTS. According to WSJ, the OTS spokesperson said that HoldCo has applied for a federal holding company charter and the conversion of IndyMac to a stock-held institution from a mutual savings bank. The spokesperson, WSJ relates, said that the FDIC is considering a sale to HoldCo and needs to have a letter of intent signed before the OTS can grant its approval. CNNMoney.com reports that the FDIC would spend $8.9 billion protecting the customer deposits at IndyMac, which had about $19 billion in deposits and $32 billion in assets when it collapse. The report states that the final cost will depend on how much FDIC receives in the sale. About IndyMac Bancorp Based in Pasadena, California, IndyMac Bancorp Inc. (NYSE:IMB) -- http://www.indymacbank.com/-- is the holding company for IndyMac Bank FSB, a hybrid thrift/mortgage bank that originated mortgages in all 50 states of the United States. Through its hybrid thrift- mortgage bank business model, IndyMac designed, manufactured, and distributing cost-efficient financing for the acquisition, development, and improvement of single-family homes. IndyMac also provided financing secured by single-family homes to facilitate consumers' personal financial goals and strategically invests in single-family mortgage-related assets. On July 11, 2008, the Office of Thrift Supervision closed IndyMac Bank and appointed FDIC as the bank's receiver. Thacher Proffitt & Wood LLP was engaged as counsel to the FDIC. Indymac Bancorp filed for Chapter 7 bankruptcy protection on July 31, 2008 (Bankr. C.D.Calif., Case No. 08-21752). Representing the Debtor are Dean G. Rallis, Jr., Esq., and John C. Weitnauer, Esq. Bloomberg noted that Indymac had about $32.01 billion in assets as of July 11, 2008. In court documents, IndyMac disclosed estimated assets of $50 million to $100 million and estimated debts of $100 million to $500 million. INNOVEX INC: Auditor Raises Going Concern Doubt ----------------------------------------------- BDO Seidman LLP, in Milwaukee, Wisconsin, in a letter dated December 22, 2008, to the Board of Directors and Stockholders of Innovex, Inc., expressed substantial doubt about the company's ability to continue as a going concern. The firm audited the consolidated balance sheet of Innovex, Inc. and subsidiaries as of September 27, 2008, and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for the period then ended. BDO Seidman noted that the company has suffered recurring losses from operations, has a working capital deficit, has not provided operating cash flow and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Terry M. Dauenhauer, president and chief executive officer, and Randy L. Acres, chief financial officer, relate that the company has historically financed its operations primarily through cash from operating activities, sales of equity securities, bank credit facilities and employee stock option exercises. "Cash and equivalents were $6.5 million at September 27, 2008 and $10.5 million at September 29, 2007. Long-term debt was $19.0 million at September 27, 2008 and $15.5 million at September 29, 2007 less current maturities of $3.5 and $11.0, respectively. Short-term debt was $32.7 million at September 27, 2008 and $20.4 million at September 29, 2007. During the years ended September 27, 2008 and September 29, 2007, the company incurred losses from continuing operations of $28.0 million and $32.1 million, respectively. Operating activities used $8.9 million and $17.6 million of cash during the years ended September 27, 2008 and September 29, 2007, respectively. As of September 27, 2008, the Company had a working capital deficit of $31.2 million." "Total unused debt availability as of September 27, 2008 was approximately $2.5 million under the Company's short-term packing credit and overdraft facilities." "The company believes that the ability to continue as a going concern depends upon the company's ability to obtain additional financing, the success in securing new customers and increasing sales to existing customers, as well as the company's ability to improving liquidity, whether through cash generated by operations or through incurring additional debt or the issuance of debt or equity. The company is considering alternatives for generating additional working capital and long-term financing and will continue to pursue financing opportunities to better leverage its assets. The company's financing needs and the financing alternatives available to it are subject to change depending on, among other things, general economic and market conditions, changes in industry buying patterns, customer demand for its products, the Company's ability to meet its loan covenant requirements and cash flow from operations." As of September 27, 2008, the company's balance sheet showed total assets of $69,156,791 and total liabilities of $82,957,833, resulting in total stockholders' deficit of $13,801,042. A full-text copy of the company's annual report is available for free at http://researcharchives.com/t/s?36e4 About Innovex Innovex, Inc., is a worldwide provider of flexible circuit interconnect solutions to original equipment manufacturers in the electronics industry. The company offers a full range of customized flexible circuit applications and services from initial design, development and prototype to fabrication, assembly and test on a global basis. Its customers include Entorian, Hitachi, HP, TPO, Quantum, SAE Magnetics (a subsidiary of TDK), Samsung, Seagate, StorageTek, Western Digital and other leading electronic OEMs. INTERMETRO COMMS: Names Fish as New CFO; Posts $1.8MM Loss in 3Q ---------------------------------------------------------------- Vincent Arena resigned as Chief Financial Officer and director of InterMetro Communications, Inc., effective December 12, 2008. InterMetro Communications appointed Kenneth Fish as its new Chief Financial Officer on December 10, 2008. Mr. Fish's most notable recent posts were as V.P. Corporate Finance/Strategic Planning and V.P. Corporate Business Development for Allergan, a publicly traded biotechnology and specialty pharmaceutical company with over $3 billion in annual sales. Between the two positions held at Allergan, Mr. Fish was responsible for quarterly forecasting and annual budgets; managing investor relations; managing in- licensing and out-licensing deals; as well as completing several M & A transactions. Prior to his tenure at Allergan, Mr. Fish worked for 10 years in telecommunications holding senior executive posts at Hughes Electronics, Airtouch Communications and MCI, all three large public telecommunications companies. Across these three companies' roles he has led business planning, accounting and tax structuring; managed company valuations; handled due diligence on mergers & acquisitions; as well as negotiated purchase and sale agreements, joint ventures and partnerships. While with Hughes, a publicly-traded $7.5B (annual revenue) telecom and media subsidiary of General Motors, Mr. Fish led three IPOs, including the XM Satellite Radio IPO (prior to its sale to News Corporation). He was also instrumentally involved in the creation of new business units in over twenty countries, which included serving as the launch CFO of Airtouch projects in Argentina, Brazil, Egypt, and Turkey. Ken holds his MBA from the Anderson Graduate School of Management at UCLA, with dual concentration in finance and strategy, and his BA, cum laude, from Princeton University. According to Charles Rice, CEO, "I am honored to announce the addition of Kenneth Fish to the InterMetro team. Ken brings to our company a wealth of experience and expertise, and will be a key component of our continuing long-term organic growth and M & A expansion strategy. Mr. Fish, who has over 20 years of experience with public company finance and business development, combined with his telecom growth experience, will be an instrumental part of the next stage of InterMetro's business plan." "I am delighted to be joining InterMetro at this time in its history," said Mr. Fish. "The company has many promising growth opportunities, a terrific set of assets, and motivated partners. I look forward to working with Charles on taking the company to its next level of success." The terms and conditions of Mr. Fish's employment are to be governed by an offer letter signed and accepted by Mr. Fish. Under the terms of this Offer Letter, Mr. Fish receives a compensation package which includes a base salary of $150,000 per year; a quarterly bonus of $17,500 and an annual discretionary bonus, targeted at 40% of his salary; health benefits; vacation time; and a severance package, to cover termination 'without cause' in the event of the sale of the company after having served the company in excess of 1 year. Mr. Fish will also be granted 1,200,000 stock options pursuant to the terms of the 2007 Stock Omnibus and Incentive Plan of InterMetro Communications, Inc., with this vesting schedule: 20% upon granting, and 1/12 of the balance each quarter thereafter, until the remaining options have vested. Third Quarter Net Loss Charles Rice, chairman of the board, chief executive officer, and president, disclosed that the company posted a net loss of $1,820,000 for the three months ended September 30, 2008. Mr. Rice related that the company incurred net losses of $5,578,000 for the nine months ended September 30, 2008 and $16,915,000 for the year ended December 31, 2007. "In addition, the company had total stockholders' deficit of $13,050,000 and $9,217,000 at September 30, 2008 and December 31, 2007, respectively and a working capital deficit of $15,341,000 and $12,003,000 as of September 30, 2008 and December 31, 2007, respectively. The company's auditors have indicated there is substantial doubt about the company's ability to continue as a going concern." "Management believes that the recent losses are primarily attributable to costs related to supporting a robust telecommunications infrastructure that has significantly more capacity than is currently being utilized by its existing customer base as well as the cost of marketing required for continued expansion of the customer base which is expected to result in an increase in revenues in order for the company to become profitable. The company continues to require outside financing until such time as we can achieve positive cash flow from operations. In November and December 2007, the company received $600,000 and in the nine months ended September 30, 2008, the company received an additional $1,320,000 pursuant to the sale of secured notes with individual investors and can continue to sell similar secured notes up to a maximum offering of $3 million. We anticipate completing the additional financing required but there can be no assurance that we will be successful in completing this required financing or that we will continue to expand our revenue base to the extent required to achieve positive cash-flows from operations in the future." As of September 30, 2008, the company's balance sheet showed total assets of $6,268,000 and total liabilities of $19,318,000. A full-text copy of the company's quarterly report is available for free at http://researcharchives.com/t/s?36e9 About InterMetro Communications InterMetro Communications, Inc. (IMTO.OB) is a facilities-based provider of enhanced voice and data communication services. The company owns and operates a national, private voice-over Internet Protocol (VoIP) network infrastructure powered by switching equipment. Its network powers providers of communication services, like wholesale transport carriers, wireless providers, broadband phone companies, VoIP service providers, prepaid calling card providers, and voice-enabled application service providers. INTERSTATE BAKERIES: Incurs $41.4MM Loss for Nov. 15 Quarter ------------------------------------------------------------ Interstate Bakeries Corporation and its debtor-affiliates filed with the Securities and Exchange Commission their quarterly report on Form 10Q for the period ended November 15, 2008. IBC's Quarterly Report on Form 10Q, dated December 24, 2008, is available for free at http://researcharchives.com/t/s?36f8 INTERSTATE BAKERIES CORPORATION Unaudited Condensed Consolidated Balance Sheets As of November 15, 2008 ASSETS Current Assets: Cash $24,664,000 Restricted Cash 21,117,000 Accounts receivable 134,607,000 Inventories 60,140,000 Assets held for sale 13,303,000 Other current assets 48,480,000 ------------- Total current assets 302,311,000 Property and equipment, net 444,614,000 Intangible assets 158,258,000 Other assets 29,919,000 ------------- Total Assets $935,102,000 ============= LIABILITIES AND STOCKHOLDERS' DEFICIT Liabilities not subject to compromise Current Liabilities Prepetition Debt $2,405,000 Postpetition Debt 113,191,000 Accounts payable 106,032,000 Accrued expenses 172,276,000 ------------- Total current liabilities 393,904,000 Other liabilities 186,448,000 Deferred income taxes 68,295,000 ------------- Total liabilities not subject to compromise 648,647,000 Liabilities Subject to Compromise 829,731,000 Stockholders' deficit Preferred stock, $0.01 par value, 1,000,000 shares authorized, none issued 0 Common stock, $0.01 par value, 120,000,000 shares authorized, 81,579,000 shares issued, 45,202,000 shares outstanding 816,000 Additional paid-in capital 584,485,000 Accumulated deficit (481,324,000) Treasury stock, 36,377,000 shares at cost (678,740,000) Accumulated other comprehensive income 31,487,000 ------------- Total stockholders' deficit (543,276,000) ------------- Total liabilities and stockholders' deficit $935,102,000 ============= INTERSTATE BAKERIES CORPORATION Unaudited Condensed Statement of Consolidated Operations Twelve Weeks Ended November 15, 2008 Net revenues $643,931,000 Cost of products sold, exclusive of items below 334,626,000 Selling, delivery and administrative expenses 292,685,000 Restructuring (credits) charges (1,778,000) Depreciation and amortization 13,650,000 Loss on sale or abandonment of assets 892,000 Property and equipment impairment 0 640,075,000 ------------- Operating Loss 3,856,000 Other (income) expense Interest expense, excluding unrecorded contractual interest expense 14,444,000 Reorganization charges, net 34,083,000 Other (income) expense 109,000 ------------- 48,636,000 Loss before income taxes (44,780,000) Provision (benefit) for income taxes (3,360,000) ------------- NET LOSS ($41,420,000) ============= INTERSTATE BAKERIES CORPORATION Unaudited Condensed Statement of Consolidated Cash Flows Twenty-four Weeks Ended November 15, 2008 Operating Activities: Net loss ($78,286,000) Depreciation and amortization 27,325,000 Provision (benefit) for deferred income taxes (140,000) Reorganization charges, net 40,109,000 Cash reorganization items (16,646,000) Non-cash bankruptcy-related charges 87,000 Non-cash interest expense -- deferred debt fees 9,228,000 Non-cash restricted stock compensation (benefit) expense 0 (Gain) loss on sale, write-down or abandonment of assets (5,955,000) Change in operating assets and liabilities: Accounts receivable 2,023,000 Inventories 1,697,000 Other current assets (5,527,000) Accounts payable and accrued expenses (7,575,000) Long-term portion of self-insurance reserves 1,164,000 Other (13,080,000) ------------- Net cash used in operating activities (45,576,000) Investing Activities: Purchases of property and equipment (6,709,000) Proceeds from sale of assets 11,599,000 Restricted cash deposit 0 Acquisition and development of software assets 0 Other 0 ------------- Net cash provided by investing activities 4,890,000 Financing Activities: Reduction of long-term debt (354,000) Increase in prepetition credit facility 1,239,000 Reduction of postpetition debt (11,485,000) Increase in postpetition debt 61,318,000 Debt fees (10,439,000) Net cash provided by financing activities 40,279,000 ------------- Net decrease in cash (407,000) Cash at beginning of period 25,071,000 ------------- Cash at end of period $24,664,000 ============= The Debtors disclosed that as of December 15, 2008, there were 45,202,826 shares of IBC common stock, $0.01 par value per share, outstanding. Giving effect to IBC's senior subordinated convertible notes and common stock equivalents, there were 55,101,267 shares of common stock outstanding as of December 15. About Interstate Bakeries Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh-baked bread and sweet goods, under various national brand names, including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and Drake's(R). Currently, IBC employs more than 25,000 people and operates 45 bakeries, as well as approximately 800 distribution centers and approximately 800 bakery outlets throughout the country. The company and eight of its subsidiaries and affiliates filed for chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6% senior subordinated convertible notes due Aug. 15, 2014) in total debts. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 5, 2007. Their exclusive period to file a chapter 11 plan expired on Nov. 8, 2007. On Jan. 25, 2008, the Debtors filed their First Amended Plan and Disclosure Statement. On Jan. 30, 2008, the Debtors received court approval of the first amended Disclosure Statement. IBC did not receive any qualifying alternative proposals for funding its plan of reorganization in accordance with the court-approved alternative proposal procedures. As a result, no auction was held on Jan. 22, 2008, as would have been required under those procedures. The Debtors, on Oct. 4, 2008, filed another Plan of Reorganization, which contemplates IBC's emergence from Chapter 11 as a stand-alone company. The filing of the Plan was made in connection with the plan funding commitments, on Sept. 12, 2008, from an affiliate of Ripplewood Holdings L.L.C. and from Silver Point Finance, LLC, and Monarch Master Funding Ltd. (Interstate Bakeries Bankruptcy News, Issue No. 123; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) INTERSTATE BAKERIES: May Liquidate if Exit Financing Talks Fail --------------------------------------------------------------- Interstate Bakeries Corp.'s Chief Executive Officer Craig D. Jung and Chief Financial Officer J. Randall Vance said in a regulatory filing with the Securities and Exchange Commission that under the terms of the Debtors' bankruptcy plan, IBC cannot emerge from Chapter 11 until the exit financings are consummated. On December 5, 2008, the U.S. Bankruptcy Court for the Western District of Missouri confirmed IBC's Amended New Joint Plan of Reorganization. The plan was filed October 31, 2008. The exit financings that form the basis for the Plan are reflected in corresponding debt and equity commitments. According to the IBC Officers, the Company is still focusing on negotiating and finalizing all documentation for the Exit Financings and satisfying the remaining conditions precedent to closing of the various transactions contemplated under the Plan. Although progress has been made, significant issues remain to be resolved, the IBC Officers report. Furthermore, in the event that one or more of the Parties committed to provide the exit financing refuse or fail to perform under their commitments, IBC may seek to (i) enforce our rights under the Financing Commitments or (ii) to replace the Financings. "There can be no assurance as to whether we will be able to successfully implement any such strategy on terms and conditions acceptable to the Company or its various constituents in the Chapter 11 cases," Messrs. Jung and Vance noted. Absent the ability to pursue such a strategy, IBC will expect to begin an orderly wind-down of its operations, they added. Moreover, there can be no assurance as to the ultimate recovery of value available to our constituents should our Plan not be consummated, Messrs. Jung and Vance said. Updates on IBC's Legal Proceedings The IBC Officers also report that as of December 9, 2008, upon consideration of a stipulation for dismissal unilaterally filed by the R2 Investments, LDC, the Circuit Court of Jackson County, Missouri dismissed, without prejudice, R2's action commenced against certain of IBC's former and current directors and a former officer. The Action was based upon alleged negligent misrepresentations made by certain defendants in connection with IBC's issuance of $100.0 million aggregate principal amount of 6.0% senior subordinated convertible notes due August 15, 2014. The R2 Action sought recovery of the total amount of the Convertible Notes held by R2 plus accrued interest. IBC is involved in a dispute regarding the proper characterization of the American Bakers Association Retirement Plan, which the Debtors believe has been historically administered as a multiple- employer plan under ERISA and tax rules. The ABA Plan, however, contends that it should be treated as an aggregate of single- employer plans under ERISA as it is reflected in IBC's financial statements. The Pension Benefit Guaranty Corporation -- the federal governmental agency that insures and supervises defined benefit pension plans -- made a final determination in August 2006 that the ABA Plan is a multiple employer plan under ERISA. Sara Lee Corporation instituted proceedings against the ABA Plan and the Board of Trustees of the Plan in the United States District Court for the District of Columbia, through which Sara Lee sought, among other things, a mandatory injunction that would compel the ABA Plan and the Board of Trustees to (i) require all participating employers in the ABA Plan with negative asset balances -- which would include IBC -- to make payments to the Plan in order to maintain a positive asset balance, and (ii) cut off the payment from the ABA Plan of benefits to employee- participants of IBC and other participating employers with negative asset balances. Sara Lee amended its Complaint, adding the PBGC as a defendant and challenging its Determination, as the Litigation is premised on the notion that the ABA Plan is an aggregate of single- employer plans. To resolve the issues without litigation, IBC has voluntarily stayed its Bankruptcy Court Lawsuit seeking enforcement of the Determination, upon the agreement by the ABA Plan and its Board of Trustees to join IBC as a party to the Sara Lee Litigation, Messrs. Jung and Vance informed the SEC. Subsequently, the PBGC asked the District Court for a summary judgment in the Sara Lee Litigation, to enforce the PBGC's Determination -- which decision is currently pending. The IBC Officers disclosed that in November 2008, IBC has withdrawn from the ABA Plan, ceasing any and all contributions and contributory obligations to the ABA Plan. IBC also entered into a Compromise and Settlement Agreement with the PBGC, which the Bankruptcy Court approved. Accordingly, IBC's Agreement with PBGC provides that (i) the PBGC will be granted an allowed prepetition general unsecured claim for $17.5 million; and (ii) if and only if the ABA Plan is ultimately determined in the Sara Lee Litigation to be an aggregate of single-employer plans, the PBGC will be granted an allowed prepetition general unsecured claim for $72.5 million. IBC also entered into a Compromise and Settlement Agreement with the ABA Plan, which the Bankruptcy Court approved in December 2008, which Agreement provides that the ABA Plan will be granted (i) an allowed prepetition general unsecured claim for of $6.0 million, and (ii) an allowed administrative expense claim for $0.8 million. Based upon the Settlements, IBC recorded a reorganization charge in the second quarter of Fiscal Year 2009 of $20.1 million to reflect the ABA Plan liability at the full amount of the Claim Settlements. About Interstate Bakeries Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh-baked bread and sweet goods, under various national brand names, including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and Drake's(R). Currently, IBC employs more than 25,000 people and operates 45 bakeries, as well as approximately 800 distribution centers and approximately 800 bakery outlets throughout the country. The company and eight of its subsidiaries and affiliates filed for chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6% senior subordinated convertible notes due Aug. 15, 2014) in total debts. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 5, 2007. Their exclusive period to file a chapter 11 plan expired on Nov. 8, 2007. On Jan. 25, 2008, the Debtors filed their First Amended Plan and Disclosure Statement. On Jan. 30, 2008, the Debtors received court approval of the first amended Disclosure Statement. IBC did not receive any qualifying alternative proposals for funding its plan of reorganization in accordance with the court-approved alternative proposal procedures. As a result, no auction was held on Jan. 22, 2008, as would have been required under those procedures. The Debtors, on Oct. 4, 2008, filed another Plan of Reorganization, which contemplates IBC's emergence from Chapter 11 as a stand-alone company. The filing of the Plan was made in connection with the plan funding commitments, on Sept. 12, 2008, from an affiliate of Ripplewood Holdings L.L.C. and from Silver Point Finance, LLC, and Monarch Master Funding Ltd. (Interstate Bakeries Bankruptcy News, Issue No. 123; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) INTERSTATE BAKERIES: Lease Decision Period Extended to June 21 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Missouri extended the deadline within which Interstate Bakeries Corp. and its affiliates may assume or reject unexpired leases and subleases of non-residential real property to: (a) the effective date of their Amended New Plan of Reorganization; or (b) June 21, 2009. The Lease Rejection or Assumption Deadline was originally set on December 21, 2008. Pending the assumption or rejection of any Real property Lease, the Debtors will timely perform all of their obligations under the Lease as required by Section 365(d)(3) of the Bankruptcy Code, the Court ruled. About Interstate Bakeries Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh-baked bread and sweet goods, under various national brand names, including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and Drake's(R). Currently, IBC employs more than 25,000 people and operates 45 bakeries, as well as approximately 800 distribution centers and approximately 800 bakery outlets throughout the country. The company and eight of its subsidiaries and affiliates filed for chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6% senior subordinated convertible notes due Aug. 15, 2014) in total debts. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 5, 2007. Their exclusive period to file a chapter 11 plan expired on Nov. 8, 2007. On Jan. 25, 2008, the Debtors filed their First Amended Plan and Disclosure Statement. On Jan. 30, 2008, the Debtors received court approval of the first amended Disclosure Statement. IBC did not receive any qualifying alternative proposals for funding its plan of reorganization in accordance with the court-approved alternative proposal procedures. As a result, no auction was held on Jan. 22, 2008, as would have been required under those procedures. The Debtors, on Oct. 4, 2008, filed another Plan of Reorganization, which contemplates IBC's emergence from Chapter 11 as a stand-alone company. The filing of the Plan was made in connection with the plan funding commitments, on Sept. 12, 2008, from an affiliate of Ripplewood Holdings L.L.C. and from Silver Point Finance, LLC, and Monarch Master Funding Ltd. (Interstate Bakeries Bankruptcy News, Issue No. 123; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) INTERSTATE BAKERIES: IRS Compromise Agreement Approved ------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Missouri authorized Interstate Bakeries Corp. and its affiliates to enter into a compromise agreement that outlines the terms of four Voluntary Correction Program Compliance Statements by and between Interstate Brands Corporation, as sponsor of four different retirement income and savings plans, and the Internal Revenue Service. Brands and the IRS entered into the VCPCs to allow taxpayers who discover errors in these qualified 401(k) Plans "to come forward, correct the errors, and be found in compliance without payment of a penalty, pursuant to Section 401(a) of the Internal Revenue Code: (a) Interstate Brands Companies Employee Savings Plan (Plan No. 139) (b) Interstate Brands Companies Retirement Income Plan (Plan No. 010) (c) Drake Bakeries Division Savings Plan for Route Drivers (Plan No. 016) (d) IBC Unit Elect Retirement Savings Plan (Plan No. 011) The operational failures in the administration of the 401(k) Plans cover the years ended December 31, 2003, through December 31, 2006. About Interstate Bakeries Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh-baked bread and sweet goods, under various national brand names, including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and Drake's(R). Currently, IBC employs more than 25,000 people and operates 45 bakeries, as well as approximately 800 distribution centers and approximately 800 bakery outlets throughout the country. The company and eight of its subsidiaries and affiliates filed for chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6% senior subordinated convertible notes due Aug. 15, 2014) in total debts. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 5, 2007. Their exclusive period to file a chapter 11 plan expired on Nov. 8, 2007. On Jan. 25, 2008, the Debtors filed their First Amended Plan and Disclosure Statement. On Jan. 30, 2008, the Debtors received court approval of the first amended Disclosure Statement. IBC did not receive any qualifying alternative proposals for funding its plan of reorganization in accordance with the court-approved alternative proposal procedures. As a result, no auction was held on Jan. 22, 2008, as would have been required under those procedures. The Debtors, on Oct. 4, 2008, filed another Plan of Reorganization, which contemplates IBC's emergence from Chapter 11 as a stand-alone company. The filing of the Plan was made in connection with the plan funding commitments, on Sept. 12, 2008, from an affiliate of Ripplewood Holdings L.L.C. and from Silver Point Finance, LLC, and Monarch Master Funding Ltd. (Interstate Bakeries Bankruptcy News, Issue No. 123; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) IOWA RENEWABLE: Auditor Raises Going Concern Doubt -------------------------------------------------- McGladrey & Pullen LLP in Davenport, Iowa, in a letter dated December 22, 2008, to the Board of Directors and Members of Iowa Renewable Energy, LLC, expressed substantial doubt about the company's ability to continue as a going concern. The firm audited the balance sheets of Iowa Renewable Energy, LLC, as of September 30, 2008, and 2007, and the related statements of operations, members' equity and cash flows for the years then ended. McGladrey & Pullen pointed out that the company has suffered losses from operations and has experienced significant increases in the input costs of its products. "This has created liquidity issues and the company is or, will likely be, in violation of its bank debt covenants and there is no assurance that such violations will be waived which together raise substantial doubt about the Company's ability to continue as a going concern." Mike Bohannan, chairman and president, and Todd Willson, chief financial officer, relate that through September 30, 2008, the company has generated accumulated losses of $7,563,432, has experienced significant volatility in its input costs and undertaken significant borrowings to finance the construction of its biodiesel plant. "The loan agreements with the company's lender currently contains a covenant that requires a minimum ratio of current assets to current liabilities (working capital ratio) and beginning in February 2009 additional covenants will become effective that will require minimum debt coverage and fixed charge coverage ratios. The company is not in compliance with the working capital ratio covenant at September 30, 2008, and it is projected that the company will fail to comply with one or more of the loan covenants throughout fiscal 2009. Failure to comply with these loan covenants constitutes an event of default under the company's loan agreements which, at the election of the lender, could result in the acceleration of the unpaid principal loan balance and accrued interest under the loan agreements or the loss of the assets securing the loan in the event the lender elected to foreclose its lien or security interest in such assets. In addition, the company's loan agreement allows the lender to consider the company in default of the loan at any point for poor financial performance. These liquidity issues raise doubt about whether the Company will continue as a going concern." According to Mr. Bohannan and Mr. Willson, the company has been in communication with its lender as to the steps it needs to take to resolve this situation, but there can be no assurance that the lender will waive the Company's noncompliance with any one or more of the loan covenants. "The company's ability to continue as a going concern is dependent on the company's ability to comply with the loan covenants and the lender's willingness to waive any noncompliance with such covenants. Management anticipates that if additional capital is necessary to comply with its loan covenants or to otherwise fund operations, the company may pursue strategies that could include issuing additional membership units through one or more private placements, or to solicit a sale or merger of the company with other strategic partners. However, there is no assurance that the company would be able to raise the desired capital. Finally the company could elect to reduce its production capacity through the remaining winter months by scaling back on biodiesel production or temporarily shutting down the biodiesel plant depending on the company's cash situation and its ability to purchase raw materials to operate the plant. The company may also seek to produce biodiesel on a toll basis where biodiesel would be produced using raw materials provided by someone else." As of September 30, 2008, the company's balance sheet showed total assets of $51,242,454, total liabilities of $35,640,464, and members' equity of $15,601,990. The company's current liabilities of $35,640,464 exceeded current assets of $11,178,526. For the year ended September 30, 2008, the company posted a net loss of $3,784,924. A full-text copy of the company's annual report is available for free at http://researcharchives.com/t/s?36e0 About Iowa Renewable Energy Iowa Renewable Energy, LLC, located in Washington, Iowa, was formed in April 2005 to pool investors to build a biodiesel manufacturing plant with an annual capacity of 30 million gallons. The company was in the development stage until July 2007, when it commenced operations. IVIVI TECHNOLOGIES: Posts $2.1MM Net Loss in Qtr. Ended Sept. 30 ---------------------------------------------------------------- Ivivi Technologies, Inc., had a net loss of $2,178,150 and $4,380,465 for the three and six months ended September 30, 2008, and net cash used in operating activities of $3,488,700 for the six months ended September 30, 2008. "These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to raise additional funds to finance our operations," Steven Gluckstern, president and chief executive officer, and Alan Gallantar, senior vice president and chief financial officer, said in a regulatory filing with the Securities and Exchange Commission. "We have generated only limited revenues from product sales and have incurred net losses of approximately $7.5 and $7.8 million for the fiscal years ended March 31, 2008 and 2007. At September 30, 2008, we had an accumulated deficit of approximately $35.6 million. Our continuing operating losses have been funded principally through the proceeds of our private placement financings, our initial public offering and other arrangements. We have generated limited revenues of $1.6 million and $1.2 million for the years ended March 31, 2008 and 2007, respectively, and $588,227 and $225,732 for the three months ended September 30, 2008 and 2007, respectively and $971,423 and $686,731 for the six months ended September 30, 2008 and 2007, respectively, primarily from the rental and sale of our products, and we expect to incur additional operating losses, as well as negative cash flow from operations, for the foreseeable future, as we continue to expand our research and development of additional applications for our tPEMF technology and other technologies that we may develop in the future. On October 15, 2008, we repurchased 650,000 shares of our common stock at $.15 per share, or $97,500, from an investor in a private transaction." "We estimate that we presently have sufficient sources of funds to meet our cash requirements through January 31, 2009. Previously we estimated that we had sufficient sources of funds to meet our cash requirements through March 31, 2009. The change in our estimate is primarily the result of additional accrued settlement fee and other costs relating to the termination of our agreement with Allergan Inc. of approximately $450,000, $97,500 to purchase our common stock in a private transaction with an investor and increased legal and regulatory expenses relating to our 510(k) submission with the FDA and legal representation in our litigation with Stonefield Josephson." As of September 30, 2008, the company's balance sheet showed total assets of $5,222,938, total current liabilities of $1,628,158, deferred revenue of $35,640, and total stockholders' equity of $3,559,140. A full-text copy of the company's quarterly report is available for free at http://researcharchives.com/t/s?36ec About Ivivi Technologies Ivivi Technologies, Inc., is an early-stage medical technology company focusing on designing, developing and commercializing proprietary electrotherapeutic technologies. The company has focused its research and development activities on targeted pulsed electromagnetic field, or tPEMF technology. This technology utilizes a magnetic field that is timed to turn on and off to create a therapeutic electrical current in injured tissue, which then stimulates biochemical and physiological processes to help repair injured soft tissue and reduce related pain. We are currently marketing products utilizing our tPEMF technology to the chronic wound and plastic and reconstructive surgery markets. We are developing proprietary technology for other therapeutic medical markets, including cardiology. JASON WHITE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Jason L. White d/b/a Jason White Construction P.O. Box 385 Eastpoint, FL 32328 Bankruptcy Case No.: 08-40924 Type of Business: The Debtor constructs single-family houses. Chapter 11 Petition Date: December 19, 2008 Court: United States Bankruptcy Court Northern District of Florida (Tallahassee) Debtor's Counsel: Thomas B. Woodward, Esq. P.O. Box 10058 Tallahassee, FL 32302 Tel.: (850) 222-4818 Fax : (850) 561-3456 Email: woodylaw@embarqmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition and a list of the Debtor's largest unsecured creditors are available for free at: http://bankrupt.com/misc/flnb08-40924.pdf The petition was signed by Jason L. White. JMYGEEZ INC: Chapter 7 Trustee Ready to Sell Assets on Jan. 8 ------------------------------------------------------------- Carlota Bohm, the Chapter 7 Trustee overseeing the liquidation of the bankruptcy estate of JMYGEEZ, Inc., d/b/a Jimmy G's Restaurant, will bring a Motion before the U.S. Bankruptcy Court for the Western District of Pennsylvania at 10:30 a.m. on Jan. 8, 2009, asking for permission to sell the Debtor's Pennsylvania Restaurant Liquor License, No. R 8775 Lid 46165, furniture, decorations and equipment located at debtor's former business location, Jimmy G's Restaurant. The Hearing will be held before the Honorable Thomas P. Agresti in Pittsburgh. The Court will entertain higher and better offers at the hearing. Arrangements for an inspection prior to the sale hearing may be made with: Carlota Bohm, Esq. Houston Harbaugh, P.C. Three Gateway Center, 22nd Floor 401 Liberty Avenue Pittsburgh, PA 15222 Telephone (412) 281-5060. JMYGEEZ, Inc., filed for chapter 11 protection (Bankr. W.D. Penn. Case No. 08-20710) on February 4, 2008. A copy of the Debtor's petition is available at http://bankrupt.com/misc/pawb08-20710.pdf at no charge. The case subsequently converted to a chapter 7 liquidation. JOHN JONES: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: John Gordon Jones 2700 Benedict Canyon Dr. Beverly Hills, CA 90210 Bankruptcy Case No.: 08-20355 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Asset Family Co., LLC 08-18110 Chapter 11 Petition Date: December 19, 2008 Court: United States Bankruptcy Court Central District Of California (San Fernando Valley) Judge: Maureen Tighe Debtor's Counsel: Barry K Rothman, Esq. 1901 Ave Of The Stars Ste. 370 Los Angeles, CA 90067 Tel.: (310) 557-0062 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition and a list of the Debtor's largest unsecured creditors are available for free at: http://bankrupt.com/misc/cacb08-20355.pdf The petition was signed by John Gordon Jones. JORGE GONZALEZ-CARDONA: Case Summary & Largest Unsecured Creditor ----------------------------------------------------------------- Debtor: Jorge Gonzalez-Cardona Jardines de Caparra, Calle 47 AE-5 Bayamon, PR 00959 Bankruptcy Case No.: 08-08702 Chapter 11 Petition Date: December 21, 2008 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Jose Ramon Cintron, Esq. 605 Calle Condado Suite 602 San Juan, PR 00907 Tel.: (787) 725-4027 Fax : (787) 725-1709 Email: jrcintron@prtc.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor's largest unsecured creditor is Banco Popular de P.R., owed $405,452, $162,957 and $20,000. The petition was signed by Jorge Gonzalez-Cardona. KB TOYS: Will Honor New Yorkers' Gift Cards ------------------------------------------- KB Toys Inc. will honor New Yorkers' gift cards at least through Jan. 11, 2009, under an agreement with New York State Attorney General Andrew Cuomo, Reuters reports. Reuters relates that the gift cards will be honored at stores but not online. As reported by the Troubled Company Reporter on Dec. 26, 2008, the United States Bankruptcy Court for the District of Delaware approved going-out-of-business sale for all of KB Toys' 461 stores. Mr. Cuomo's office said in a statement that the court didn't require KB Toys to honor gift cards. According to Reuters, Mr. Cuomo's office said that the attorney general wanted to ensure that New York consumers with KB Toys gift cards can use the cards and any merchandise credit through the holidays and in the post- holiday period. According to the New York AG's statement, KB Toys sold as much as $2 million in gift cards in 2008 and holds about $12 million in unredeemed gift cards. KB Toys will notify Mr. Cuomo and post signs in stores any decision to stop honoring New York consumers' gift cards, Reuters states. About KB Toys Headquartered in Pittsfield, Massachusetts, KB Toys, Inc. -- http://www.kbtoys.com-- operates a chain of retail toy stores. On Jan. 14, 2008, the Debtor and 69 of its affiliates filed for protection under Chapter 11 of the Bankruptcy Code, which were administratively consolidated under Case No. 04-10120. Two of the 200 bankruptcy cases remain open, KB Toys Inc. and KB Toy of Massachusetts Inc. In connection with the emergence of KB Toys from bankruptcy in August 2005, and the subsequent organizational restructuring, the assets and operations of may of these prior debtors were transferred among then existing debtor entities and consolidated with KB Toys Group. Furthermore, most of the entities involved were either dissolved or were merged into surviving entities, and several of them changed their names. As a result, nine Debtors and four inactive special purpose units which are not debtors. The company and eight of its affiliates filed for Chapter 11 on December 11, 2008 (Bankr. D. Del. Lead Case No. 08-13269). Joel A. Waite, Esq., and Matthew Barry Lunn, Esq., at Young, Conaway, Stargatt & Taylor LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Wilmer Cutler Pickering Hale and Dorr LLP as their co-counsel, FTI Consulting Inc. as financial and restructuring advisor, and Epiq Bankruptcy Solutions LLC as claims and noticing agent. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million to $500 million each. KHALED ELWARACKY: Involuntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Khaled Elwaracky 10691 Water Falls Lane Vienna, VA 22182 Bankruptcy Case No.: 08-17629 Involuntary Petition Date: December 5, 2008 Court: United States Bankruptcy Court Eastern District of Virginia (Alexandria) Judge: Stephen S. Mitchell Debtor's Counsel: Pro Se Petitioning Creditors' Counsel: Henry Fitzgerald, Esq. 2200 Wilson Blvd., Suite 800 Arlington, Virginia 22201 Tel: (703) 525-5753 Petitioning Creditors Nature of Claim Amount --------------------- --------------- ------ Wei-Kai Chang Money lent $183,336.42 604 Garden View Sq. Rockville, MD 22850 Min-Hua Su Money lent $183,336.42 604 Garden View Sq. Rockville, MD 22850 Ying Qing Lu Money lent $245,000.00 4600 Connecticut Ave. N.W. Washington, DC 22208 L.L. SWOR: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: L.L. Swor, Inc. d/b/a Furniture Country Galleries 8626 US Hwy 441 Leesburg, FL 34788 Bankruptcy Case No.: 08-12173 Type of Business: The Debtor is a furniture retailer. Chapter 11 Petition Date: December 22, 2008 Court: United States Bankruptcy Court Middle District of Florida (Orlando) Judge: Arthur B. Briskman Debtor's Counsel: R. Scott Shuker, Esq. Latham Shuker Eden & Beaudine LLP Post Office Box 3353 Orlando, FL 32802 Tel.: (407) 481-5800 Fax : (407) 481-5801 bankruptcynotice@lseblaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition and a list of the Debtor's largest unsecured creditors are available for free at: http://bankrupt.com/misc/flmb08-12173.pdf The petition was signed by George Bannon, Vice-President of the company. LAND RESOURCE: Obtains Final Authority to Secure DIP Financing -------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida granted Land Resource, LLC, and its debtor-affiliates authority to obtain postpetition secured superpriority financing, to meet payroll and other operating expenses: a) $42 million from from Keybank National Association and Wachovia Bank, National Association. b) $25.2 million from KeyBank National Association. The DIP borrowers under the $42 Million DIP Credit Agreement are Land Resource, LLC, Clarks Hill Lake, LLC, The Ridges At Morgan Creek, LLC, Villages At Norris Lake, LLC, Roaring River, LLC, Bridge Pointe At Jekyll Sound, LLC, and Laird Point, LLC. The DIP borrowers under the $25.2 million DIP Credit Agreement are Land Resource, LLC and Point Peter LLLP. Pursuant to the order, the Court approved the use of cash collateral and post-petition financing of up to the maximum amount of $1,825,346 as to the $42 Million DIP Credit Agreement and $299,446 as to the $25.2 Million DIP Credit Agreement (inclusive of amounts advanced under the Interim Order entered by the Court on Nov. 7, 2008). Superpriority Claim Status The postpetition advances will have priority pursuant to Sec. 364(c)(1) of the Bankruptcy Code, over any and all administrative expenses of the kind specified in Sections 105, 326, 328, 330, 331, 503(b), 506(c), 507(a), 507(b) and 726 of the Bankruptcy Code. Adequate Protection to Prepetition Lenders As adequate protection to the prepetition lenders for any diminution in the value of the prepetition collateral, the prepetition lenders are granted Adequate Protection Liens in all Collateral, subject only to the Carve-Outs, (ii) the Superpriority Claims and liens on the Collateral to secure obligations owed to the DIP Lenders under the DIP Credit Agreements, and (iii) the Permitted Liens, if any. Interest Rate Postpetition obligations shall bear interest at a rate of prime plus 2% p.a, which interest shall accrue and be payable on the Maturity Date. Maturity Date The maturity date under each of the DIP Credit Agreements will be the earlier of: (a) Feb. 2, 2009, (b) the date a sale (or in the event of a series of sales, the last sale) of all or substantially all of the assets of the $42 Million DIP Borrowers or the $25.2 Million DIP Borrowers, as the case may be, is approved and consummated under Sec. 363 of the Bankruptcy Code, or (c) the effective date of a plan of reorganization or liquidation of the $42 Million DIP Borrowers or the $25.2 Million DIP Borrowers, as the case may be. All amounts outstanding under the DIP Credit Agreements shall be due and payable in full at maturity. Collateral A) $42 Million DIP Facility Subject to the Carve-Outs, as security for the full and timely payment of all postpetition obligations arising under the $42 Million DIP Credit Agreement and DIP Loan Documents related thereto, the $42 Million DIP Facility Lenders are granted a valid, perfected and enforceable security interest and lien upon all real and personal property of the $42 Million DIP Borrowers, the $42 Million DIP Guarantors, the $42 Million Prepetition Borrowers and the $42 Million Prepetition Guarantors, provided however, that: i) the $42 Million Postpetition Collateral shall not extend to, constitute, or encompass any proceeds of avoidance actions arising under Chapter 5 of the Bankruptcy Code, ii) the $42 Million DIP Facility Lenders shall be entitled to share, on account of and to the full extent of any and all allowed unsecured deficiency claims they may hold, in any distribution of any such Avoidance Action proceeds on a pro rata basis with all other allowed unsecured claims; and iii) the security interest granted to the $42 Million DIP Facility Lenders in property of LR Buffalo Creek, LLC and LR Riversea, LLC shall only secure the LR Buffalo and LR Riversea Limited Guarantees. B) $25.2 Million DIP Facility Subject to the Carve-Outs, as security for the full and timely payment of all postpetition obligations arising under the $25.2 Million DIP Credit Agreement and DIP Loan Documents related thereto, the $25.2 Million DIP Facility Lenders are granted a valid, perfected and enforceable security interest and lien upon all real and personal property of the $25.2 Million DIP Borrowers, the $25.2 Million DIP Guarantors, the $25.2 Million Prepetition Borrowers, and the $25.2M Prepetition Guarantors, provided, however that: i) the $25.2 Million Postpetition Collateral shall not extend to, constitute, or encompass any proceeds of Avoidance Actions, and ii) the $25.2 Million DIP Facility Lenders shall entitled to share, on account of and to the full extent of any and all allowed unsecured deficiency claims they may hold, in any distribution of any such Avoidance Action proceeds on a pro rata basis with all other allowed unsecured claims. Carve-Outs The liens, security interests and Superpriority Claims granted to the DIP Lenders and the Pre-Petition Lenders pursuant to this Order and the DIP Loan Documents shall be subject to (i) a limited carve-out for: (a) the payment of any unpaid fees payable to the U.S. Trustee, (b) the fees due to the Clerk of the Court, (c) payments to be made to certain employees of the Debtor pursuant to such incentive compensation plan as may be approved by the Bankruptcy Court, (d) the actual fees and expenses incurred by professionals retained by an order of the Court entered pursuant to Sections 327 or 1103(b) of the Bankruptcy Code, and, (e) following the occurrence of any Termination Event, the payment of allowed professional fees and disbursements incurred after any Termination Date by all Professionals retained in these proceedings, pursuant to Sections 327, 328 or 1103(a) of the Bankruptcy Code, in an aggregate amount not to exceed $75,000 to the extent such amounts are not otherwise payable from any unused portion of retainers. The loan provides for an an additional limited carve-out for the reasonable fees and expenses of Committee Professionals in the amount of $125,000; and an additional limited carve-out in the amount of $150,000 for the benefit of the Debtors' estates and to be remitted to any appointed Chapter 7 Trustee in the event the Debtors' cases are converted to cases under Chapter 7 of the Bankruptcy Code. A full-text copy of the Court's Final Order authorizing the Debtors' postpetition secured superpriority financing, dated Dec. 22, 2008, is available for free at: http://bankrupt.com/misc/LandResource_FinalDIPOrder.pdf About Land Resource Headquartered in Orlando, Florida, Land Resource LLC -- http://www.landresource.com-- creates residential communities, which includes coastal, lakefront and mountain locations in Georgia, North Carolina, West Virginia, Tennessee and Florida. The company and its affiliates filed for Chapter 11 protection on Oct. 30, 2008 (Bankr. M. D. Fla. Lead Case No. 08-10159). Grace E. Robson, Esq., at Berger Singerman, in Ft. Lauderdale, Florida, and Jordi Guso, Esq., at Berger Singerman, P.A., in Miami Florida, represent the Debtors as counsel. Jeffrey I. Snyder, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represents the Committee of Creditors Holding Unsecured Claims as counsel. The company listed assets of $100 million to $500 million and debts of $50 million to $100 million. Trustee Services Inc. is the Debtors' notice, claims and balloting agent. LAND RESOURCE: Court Approves Bidding Procedures; Bid Protections ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida approved bidding procedures for the sale of a portion or substantially all of Land Resource, LLC, and its debtor- affiliates' assets, including the Debtors' interest in all real and personal property, including permits and development rights. Pursuant to the order, interested bidders must submit a signed bid together with a good faith deposit equal to 10% of the bidder's purchase price, made by certified check or wire transfer. The Debtors are also authorized to enter into an agreement with a prospective Stalking Horse Bidder, who shall agree to serve as a "stalking horse" at the Auction. The stalking horse bidder shall be entitled to an Expense Reimbursement of documented, actual out- of-pocket expenses not to exceed $50,000, and with the consent of the Lenders and the Committee of Unsecured Creditors, a Breakup Fee of up to 2% of the total value of such bid. The Breakup Fee and Expense Reimbursement shall be an administrative expense claim against the Debtors' estate under Sec. 503(b) of the Bankruptcy Code. All Qualified Bids shall be submitted by 4:00 p.m (Eastern Time) on Jan. 16, 2009. The Auction to select the successful bidders shall be conducted on Jan. 21, 2009, at the offices of Shutts & Bowen LLP, located at 300 South Orange Avenue, Suite 1000, Orlando, Florida 32801 beginning at 10:00 a.m. (Eastern Time). The Sale Hearing shall be conducted on Jan. 22, 2009 commencing at 10:00 a.m. All objections to any sale of Offered Assets to a Successful Bidder or the assumption and assignment of any executory contacts or unexpired leases shall be in writing, shall state the basis of such objection and specificity and shall be filed with the Court, and served so as to be received on or before Jan. 16, 2009, at 4:00 p.m. (Eastern Time) by: a) Land Resource, LLC Attn: J. Robert Ward 5337 Millenia Lakes Boulevard Suite 121, Orlando FL 32839 (counsel for the Debtors) b) Berger Singerman P.A. Attn: Jordi Guso, Esq. 200 South Biscayne Boulevard Suite 1000, Miami FL 33131 (counsel for KeyBank) c) Thompson Hine LLP Attn: Alan R. Lepene, Esq. One Atlantic Center 201 W. Peachtree Street Suite 2200, Atlanta GA 30309-3449 (counsel for Wachovia) d) Smith Hulsey & Busey Attn: Steve Busey, Esq. 225 Water Street Suite 1800, Jacksonville FL 32202 (counsel for the Committee) e) Bilzin Sumberg Baena Price and Axelrod LLP Attn: Scott L. Baena, Esq. Wachovia Financial Center 200 South Biscayne Boulevard Suite 2500, Miami FL 33131 A full-text copy of the Order approving the bidding procedures for the sale of a portion of substantially all of the Debtors' assets, dated Dec. 22, 2008, is available for free at: http://bankrupt.com/misc/LandResource_BIddingProceduresOrder.pdf About Land Resource Headquartered in Orlando, Florida, Land Resource LLC -- http://www.landresource.com-- creates residential communities, which includes coastal, lakefront and mountain locations in Georgia, North Carolina, West Virginia, Tennessee and Florida. The company and its affiliates filed for Chapter 11 protection on Oct. 30, 2008 (Bankr. M. D. Fla. Lead Case No. 08-10159). Grace E. Robson, Esq., at Berger Singerman, in Ft. Lauderdale, Florida, and Jordi Guso, Esq., at Berger Singerman, P.A., in Miami Florida, represent the Debtors as counsel. Jeffrey I. Snyder, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represents the Committee of Creditors Holding Unsecured Claims as counsel. The company listed assets of $100 million to $500 million and debts of $50 million to $100 million. Trustee Services Inc. is the Debtors' notice, claims and balloting agent. LENNAR CORP: Amends Senior Unsecured Revolving Credit Facility -------------------------------------------------------------- Lennar Corporation amended its senior unsecured revolving credit facility. The amendment gives the company greater flexibility under the borrowing covenants, but increases the interest rate which is LIBOR based and reduces the total amount of the Credit Facility which reduces the company's cost of maintaining the facility. The amended terms provide for, among other things: a) a lower aggregate commitment of $1.1 billion; b) an extension of the required quarterly reductions in the company's recourse joint venture obligations through the maturity date, July 2011; and c) modification of these covenants: 1. minimum adjusted consolidated tangible net worth; 2. borrowing base; 3. maximum leverage ratio; and 4. investments. A full-text copy of the third amendment to credit agreement is available for free at http://ResearchArchives.com/t/s?36cf About Lennar Corp. Based in Miami, Florida, Lennar Corporation (NYSE: LEN and LEN.B) -- http://www.lennar.com/-- builds affordable, move-up and retirement homes primarily under the Lennar brand name. Lennar's Financial Services segment provides primarily mortgage financing, title insurance and closing services for both buyers of the company's homes and others. Lennar Corporation reported results for its fourth quarter and fiscal year ended Nov. 30, 2008. Fourth quarter net loss in 2008 was $811.0 million compared to a net loss of $1.3 billion in 2007. The net loss for the year ended Nov. 30, 2008, was $1.1 billion compared to a net loss of $1.9 billion in 2007. * * * As reported in the Troubled Company Reported on Dec. 16, 2008, Fitch Ratings has downgraded Lennar Corp.'s issuer default ratings and outstanding debt ratings: (i) IDR to 'BB+' from 'BBB-'; (ii) senior unsecured to 'BB+' from 'BBB-'; (iii) unsecured bank credit facility to 'BB+' from 'BBB-'; (iv) short term IDR from 'F3' to 'B'; and (v) Commercial Paper from 'F3' to 'B'. LENNAR CORP: Posts $1.1 Billion Net Loss in Year Ended November 30 ------------------------------------------------------------------ Lennar Corporation reported results for its fourth quarter and fiscal year ended Nov. 30, 2008. Fourth quarter net loss in 2008 was $811.0 million compared to a net loss of $1.3 billion in 2007. The net loss for the year ended Nov. 30, 2008, was $1.1 billion compared to a net loss of $1.9 billion in 2007. Stuart Miller, president and chief executive officer of Lennar Corporation, said, "Broad-based external pressures continued to negatively impact the housing market during the fourth quarter as rising unemployment, falling home prices, increased foreclosures, tighter credit and volatile equity markets further eroded consumer confidence and depressed home sales. As we enter fiscal 2009, we are hopeful the new administration will approve a major stimulus package to stimulate housing demand in order to stabilize housing values, which will reduce foreclosures and stabilize the financial markets, leading to restored consumer confidence." Mr. Miller continued, "During the fourth quarter, we were intensely focused on maximizing our homebuilding operating cash flows. As a result, we ended our fourth quarter with $1.1 billion in cash and no outstanding borrowings under our credit facility. During the fourth quarter, we reduced our land expenditures by almost 70% quarter-over-quarter, converted 127% of our backlog into deliveries despite difficult market conditions and continued to right-size our business as S,G&A expenses as a percentage of home sales improved 100 basis points year-over-year." "Along with significantly enhancing our balance sheet liquidity, we reduced the number of our unconsolidated joint ventures to 116, a 20% decrease from the third quarter, and reduced our maximum unconsolidated joint venture recourse debt to $520 million, a 71% decrease from the peak in 2006." Mr. Miller concluded, "In 2009, cash generation will continue to be our top priority. We will convert inventory to cash and reduce both our land purchases and homebuilding starts. In addition, we will reduce our cash outflows by continuing to right-size our overhead to improve our SG&A percentage." About Lennar Corp. Based in Miami, Florida, Lennar Corporation (NYSE: LEN and LEN.B) -- http://www.lennar.com/-- builds affordable, move-up and retirement homes primarily under the Lennar brand name. Lennar's Financial Services segment provides primarily mortgage financing, title insurance and closing services for both buyers of the company's homes and others. * * * TCR reported on Dec. 16, 2008, that Fitch Ratings has downgraded Lennar Corp.'s issuer default ratings and outstanding debt ratings: (i) IDR to 'BB+' from 'BBB-'; (ii) senior unsecured to 'BB+' from 'BBB-'; (iii) unsecured bank credit facility to 'BB+' from 'BBB-'; (iv) short term IDR from 'F3' to 'B'; and (v) Commercial Paper from 'F3' to 'B'. LEVEL 3 COMMUNICATIONS: Completes $373.8MM Offering of 15% Notes --------------------------------------------------------------- Level 3 Communications, Inc., completed its offering of $373.8 million aggregate principal amount of its 15% convertible senior notes due 2013. The Notes will mature in 2013 and pay 15% annual cash interest. The Notes are convertible by holders into shares of the Level 3 common stock at an initial conversion price of $1.80 per share, subject to adjustment upon certain events, at any time before the close of business on Jan. 15, 2013. The Notes rank pari passu with all of the company's senior unsecured indebtedness. Level 3 disclosed the completion of each of its tender offers to purchase for cash any and all of its outstanding 2.875% Convertible Senior Notes due 2010, 6% Convertible Subordinated Notes due 2010. The aggregate purchase price for such notes is approximately $227.3 million, including accrued and unpaid interest on those notes through Dec. 23, 2008. Level 3 also extended the tender offer for its 6% Convertible Subordinated Notes due 2009. Level 3 will use approximately $227.3 million of the net proceeds from the offering of the Notes to fund its repurchase of the notes including accrued interest tendered in the completed tender offers. The remaining net proceeds will be used to potentially repurchase, redeem or refinance existing indebtedness from time to time, for acquisitions, to enhance liquidity and for general corporate purposes. The company incurred expenses of approximately $1 million in connection with the offering of the Notes. Since Level 3 has not yet accepted for payment any of its 6% Convertible Subordinated Notes due 2009 in the pending tender offer for those notes, the commitment of Walter Scott, Jr. and his related accounts to purchase Notes was reduced in accordance with the terms of the Securities Purchase Agreement relating to the Notes from approximately $37 million to $10.8 million. However, the company also has amended the Securities Purchase Agreement to enable the company to issue and sell to Mr. Scott and his related accounts $26.2 million aggregate principal amount of additional Notes if the company purchases any 6% Convertible Subordinated Notes due 2009 pursuant to the pending tender offer for those notes. Citi and Merrill Lynch, Pierce, Fenner & Smith Inc. acted as financial advisors to the company in connection with the structuring of the Notes. Willkie Farr & Gallagher LLP acted as outside legal counsel to the company. A full-text copy of the amendment no. 2 to securities purchase agreement is available for free at: http://ResearchArchives.com/t/s?36ce 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. At Sept. 30, 2008, the company's balance sheet showed total assets of $9.73 billion, total liabilities of $8.93 billion and stockholders' equity of about $803 million. For three months ended Sept. 30, 2008, the company reported net loss of $120.00 million compared to net loss of $174.00 million for the same period in the previous year. For nine months ended Sept. 30, 2008, the company reported net loss of $334.00 million compared to net loss of $1.02 billion for the same period in the previous year. * * * 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. LEVEL 3 COMMUNICATIONS: Completes Convertible Notes Tender Offers ----------------------------------------------------------------- Level 3 Communications, Inc., completed each of its tender offers to purchase for cash any and all of its outstanding 2.875% Convertible Senior Notes due 2010 and 6% Convertible Subordinated Notes due 2010. Level 3 also disclosed that it has waived the minimum tender condition of its tender offer to purchase for cash any and all of its outstanding 6% Convertible Subordinated Notes due 2009 and that the expiration date for such tender offer has been extended to 12:00 midnight, New York City time, on Dec. 30, 2008. Level 3's tender offer for its 6% Convertible Subordinated Notes due 2009 remains subject to all other terms and conditions set forth in the Offer to Purchase dated Nov. 17, 2008, as modified. The depositary for the tender offers has advised Level 3 that an aggregate of $162,718,000 principal amount of its 2.875% Convertible Senior Notes due 2010 and $173,571,000 principal amount of its 6% Convertible Subordinated Notes due 2010 were validly tendered in the applicable tender offer for the notes prior to the expiration of each tender offer. In accordance with the terms of each tender offer, Level 3 accepted for payment $162,718,000 principal amount of its 2.875% Convertible Senior Notes due 2010 at a purchase price of $620.00 per $1,000 principal amount of such notes and $173,571,000 principal amount of its 6% Convertible Subordinated Notes due 2010 at a purchase price of $700.00 per $1,000 principal amount of such notes, plus, with respect to each series of notes, accrued and unpaid interest up to, but not including, Dec. 24, 2008. The company set Dec. 24, 2008, as payment date, with respect to validly tendered 2.875% Convertible Senior Notes due 2010 and the 6% Convertible Subordinated Notes due 2010. Pursuant to the terms of each tender offer, notes not tendered in a tender offer will remain outstanding, and the terms and conditions governing such notes, including the covenants and other protective provisions contained in the respective indentures governing such notes, will remain unchanged. In addition, Level 3 has now waived the condition to Level 3's obligation to accept for payment, and to pay for, any of its outstanding 6% Convertible Subordinated Notes due 2009 validly tendered pursuant to the tender offer for such notes, that there have been validly tendered and not withdrawn on or prior to the expiration date of that tender offer at least $135,000,000 principal amount of 6% Convertible Subordinated Notes due 2009. The expiration date for Level 3's tender offer for its 6% Convertible Subordinated Notes due 2009 has been extended to 12:00 midnight, New York City time, on Dec. 30, 2008, and remains subject to all other terms and conditions set forth in the Offer to Purchase dated Nov. 17, 2008, as modified. Holders of Level 3's 6% Convertible Subordinated Notes due 2009 who have validly tendered notes prior to today do not need to re- tender the notes. However, holders may withdraw tendered notes prior to 12:00 midnight, New York City time, on Dec. 30, 2008. The depositary for the tender offers has advised Level 3 that as of 12:00 noon on Dec. 23, 2008, an aggregate of $129,421,000 principal amount of Level 3's 6% Convertible Subordinated Notes due 2009 have been validly tendered in the tender offer for the notes. The tender offer for Level 3's 6% Convertible Subordinated Notes due 2009 commenced on Nov. 17, 2008, and was scheduled to expire at 12:00 noon, New York City time, on Dec. 23, 2008. Copies of the Offer to Purchase and the related Letter of Transmittal may be obtained from the Information Agent for the tender offers, Global Bondholder Services Corporation, at (866) 389-1500 (toll-free). Citi and Merrill Lynch & Co. are the dealer managers for the tender offers. Questions regarding the tender 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. At Sept. 30, 2008, the company's balance sheet showed total assets of $9.73 billion, total liabilities of $8.93 billion and stockholders' equity of about $803 million. For three months ended Sept. 30, 2008, the company reported net loss of $120.00 million compared to net loss of $174.00 million for the same period in the previous year. For nine months ended Sept. 30, 2008, the company reported net loss of $334.00 million compared to net loss of $1.02 billion for the same period in the previous year. * * * 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. LINENS 'N THINGS: Seeks Jan. 15 Auction for Intellectual Property ----------------------------------------------------------------- Linens 'n Things Inc., which is closing its remaining 370 stores, is auctioning off its trademarks, trade names and other intellectual property. According to Bloomberg's Bill Rochelle, Linens proposed submitted to the U.s. Bankruptcy Court for the District of Delaware bidding procedures, under which: -- the Court is scheduled to approve the bid procedures on Jan. 8. -- competing bids are due Jan. 14, and -- an auction will be conducted Jan. 15. Mr. Rochelle, notes that Linens has signed a purchase agreement with Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC, who were among the liquidators conducting the going-out-of-business sales. Gordon and Hilco have agreed to purchase the intellectual property for $1 million cash plus a 25% interest in the equity of the company that takes ownership of the property. The liquidators, according to the report, will pay costs to cure contract defaults and assume specified debt. As reported by the Troubled Company Reporter on Oct. 22, liquidators have started selling off merchandise and inventory at 371 Linens 'n Things stores that remain open. Judge Christopher Sontchi approved a joint offer by a group of liquidators that guaranteed at least $475,500,000 in proceeds from a going-out-of- business sale at the stores. Linens 'n Things set an October 14 auction to consider bids to liquidate, partially or all, of its assets, or buy its business as a going concern. No other qualified bid, however, was received by Oct. 13, other than the joint bid of Gordon Brothers Retail Partners, LLC, Hilco Merchant Resources, LLC, SB Capital Group, LLC, Tiger Capital Group, LLC, Hudson Capital Partners, LLC, and Great American Group, LLC. The liquidation comes five months after Linens 'n Things Inc., and its affiliates and subsidiaries, which comprised the second largest specialty retailer of home textiles in North America, sought bankruptcy protection from creditors. LNT's original plan was to shed off 120 underperforming stores, but keep most of its 589-store portfolio in the U.S. and Canada open. However, further deterioration of the economy in the U.S., and tight deadlines set by banks who gave the Clifton, New Jersey- based retailer $700,000,000 to fund its restructuring, pushed the company to close more stores, and ultimately fold up. About Linens 'n Things, Inc. Headquartered in Clifton, New Jersey, Linens 'n Things, Inc. -- http://www.lnt.com/-- is the second largest specialty retailer of home textiles, housewares and home accessories in North America. As of Sept. 30, 2008, Linens 'n Things operated 411 stores in 47 states and seven provinces across the United States and Canada. The company is a destination retailer, offering one of the broadest and deepest selections of high quality brand-name as well as private label home furnishings merchandise in the industry. Linens 'n Things has some 585 superstores (33,000 sq. ft. and larger), emphasizing low-priced, brand-name merchandise, in more than 45 states and about seven Canadian provinces. Brands include Braun, Krups, Calphalon, Laura Ashley, Croscill, Waverly, and the company's own label. Linens 'n Things was acquired by private equity firm Apollo Management in 2006. On May 2, 2008, these Linens entities filed chapter 11 petition (Bankr. D. Del.): Linens Holding Co. (08-10832), Linens 'n Things, Inc. (08-10833), Linens 'n Things Center, Inc. (08-10834), Bloomington, MN., L.T., Inc. (08-10835), Vendor Finance, LLC (08- 10836), LNT, Inc. (08-10837), LNT Services, Inc. (08-10838), LNT Leasing II, LLC (08-10839), LNT West, Inc. (08-10840), LNT Virginia LLC (08-10841), LNT Merchandising company LLC (08-10842), LNT Leasing III, LLC (08-10843), and Citadel LNT, LLC (08-10844). Judge Christopher S. Sontchi presides over the case. Mark D. Collins, Esq., John H. Knight, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., are Linens 'n Things' bankruptcy counsel. The Debtors' special corporate counsel are Holland N. O'Neil, Esq., Ronald M. Gaswirth, Esq., Stephen A. McCaretin, Esq., Randall G. Ray, Esq., and Michael S. Haynes, Esq., at Morgan, Lewis & Bockius, LLP. The Debtors' restructuring management services provider is Conway Del Genio Gries & Co., LLC. The Debtors' CRO and Interim CEO is Michael F. Gries, co-founder of Conways Del Genio Gries & Co., LLC. The Debtors' claims agent is Kurtzman Carson Consultants, LLC. The Debtors' consultants are Asset Disposition Advisors, LLC, and Protivit, Inc. The Debtors' investment bankers are Financo, Inc., and Genuity Capital Markets. (Bankruptcy News About Linens 'n Things, Issue No. 22; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). MARITZA CAINS: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Maritza Casiano Cains aka Maritza Casiano Kains PO Box 195494 San Juan, PR 00919 Bankruptcy Case No.: 08-07977 Chapter 11 Petition Date: November 25, 2008 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Judge: Gerardo Carlo Altieri Debtor's Counsel: Teresa M. Lube Capo, Esq. Lube & Soto Law Office 702 Calle Union APT G-1 Condominio Unimar San Juan, PR 00907-4202 Tel: (787) 722-0909 Fax: (787) 977-1709 Email: lubeysoto@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. MEDIACOM COMMUNICATIONS: Grants Stock Options to Some Executives ---------------------------------------------------------------- Mediacom Communications Corporation disclosed in a regulatory filing with the Securities and Exchange Commission that the Compensation Committee granted stock options and restricted stock units to certain of the company's named executive officers. The Compensation Committee granted to these executive officers stock options under the company's 2003 Incentive Plan at an exercise price of $3.88 per share, which was the closing price of the company's Class A common stock on Nov. 12, 2008: Mark E. Stephan 80,000 John G. Pascarelli 80,000 Italia Commisso Weinand 60,000 Joseph E. Young 60,000 The options will vest on Nov. 12, 2012, and will expire on Nov. 11, 2018. The Compensation Committee granted to the named executive officers restricted stock units under the company's 2003 Incentive Plan: Mark E. Stephan 80,000 John G. Pascarelli 80,000 Italia Commisso Weinand 60,000 Joseph E. Young 60,000 The restricted stock units will vest on Nov. 12, 2012. About Mediacom Communications Based in Middletown, New York, Mediacom Communications Corporation (Nasdaq: MCCC) -- http://www.mediacomcc.com/-- is a cable television company focused on serving the smaller cities and towns in the United States. The company offers a wide array of broadband products and services, including traditional video services, digital television, video-on-demand, digital video recorders, high-definition television, high-speed Internet access and phone service. For three months ended Sept. 30, 2008, the company reported net income of $2.19 million compared to net loss of $34.73 million for the same period in the previous year. For nine months ended Sept. 30, 2008, the company posted net loss of $7.50 million compared to net loss of $58.25 million for the same period in the previous year. At Sept. 30, 2008, the company's balance sheet showed total assets of $3.68 billion and total liabilities of $3.96 billion, resulting in a stockholders' deficit of about $280.00 million. As of Sept. 30, 2008, the company's total debt was $3.26 billion. Of this amount, $117.90 million matures within the year ending Sept. 30, 2009. During the nine months ended Sept. 30, 2008, the company paid cash interest of $167.00 million, net of capitalized interest. As of Sept. 30, 2008, about 68.3% of its outstanding indebtedness was at fixed interest rates or subject to interest rate protection. MICHAEL BERRIE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Michael G. Berrie 809 Piney Bluff Rd. Waverly, GA 31565 Bankruptcy Case No.: 08-21414 Chapter 11 Petition Date: December 22, 2008 Court: United States Bankruptcy Court Southern District of Georgia Debtor's Counsel: Robert H. Baer, Esq. Law Office of Robert H. Baer P.O. Box 1792 Brunswick, GA 31521 Tel.: (912) 264-3120 Fax : (912) 265-8337 Email: robertbaer@bellsouth.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition and a list of the Debtor's largest unsecured creditors are available for free at: http://bankrupt.com/misc/gasb08-21414.pdf The petition was signed by Michael G. Berrie. MORTGAGEBROKERS.COM: Sept. 30 Balance Sheet Upside Down by $2MM --------------------------------------------------------------- For the three-month period ended Sept. 30, 2008, MortgageBrokers.com Holdings, Inc., posted a net loss of $562,510. For the nine-month period ended September 30, 2008, the company generated a net loss of $186,100. As of September 30, 2008, the company's balance sheet showed total assets of $1,719,415 and total liabilities of $3,730,238, resulting in total stockholders' deficit of $2,010,823. Alex Haditaghi, president, secretary and director, disclosed in a regulatory filing with the Securities and Exchange Commission that the company's ability to continue as a going concern is contingent upon its ability to secure additional debt or equity financing, continue to grow sales of its services and achieve profitable operations. "Management's plan is to secure additional funds through future debt or equity financings. Such financings may not be available or may not be available on reasonable terms to the company. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments." "The company has devoted substantially all of its efforts to establishing its current business. Management continues to developed and execute its business model, business plans and strategic marketing plans which includes: -- organization of the company and divisions; -- identification of the company's sales channels and associated supply chain; -- development of marketing strategic plans and sales execution strategies; -- preparation of a financial plan, risk and capital structure planning models, and mortgage origination 'book of business' models; -- hiring mortgage sales agents to build its national sales force and continuing to develop our referral relationship; -- developing cash flow forecasts and an operating budget; -- identifying markets to raise additional equity capital and debt financing; -- embarking on research and development activities; -- performing employment searches and preparing agent contracts; and -- recruiting and hiring technicians, management and industry specialists." A full-text copy of the company's quarterly report is available for free at http://researcharchives.com/t/s?36f2 About MortgageBrokers.com MortgageBrokers.com Holdings, Inc. was incorporated under the laws of Delaware on February 6, 2003 as MagnaData, Inc. and was initially established for the purposes of providing consulting and technical support to internet service providers to develop e- commerce market intelligence services. In February 2005, the company's name was changed to MortgageBrokers.com Holdings, Inc. Mortgage brokerage operations are presently conducted through the Company's subsidiaries, Mortgagebrokers.com Inc. and MortgageBrokers.com Financial Group of Companies, Inc., in Canada only. The planned operations of the company consist of becoming a financial services company centered around mortgage finance, brokerage, sales and consulting in Canada, the United States and the European Union. NAVDEEP JAGGI: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Navdeep Jaggi 1551 West Ave. O12 Palmdale, CA 93551 Bankruptcy Case No.: 08-20343 Chapter 11 Petition Date: December 18, 2008 Court: United States Bankruptcy Court Central District Of California (San Fernando Valley) Judge: Maureen Tighe Debtor's Counsel: Louis J. Esbin, Esq. 27201 Tourney Rd., Ste. 122 Valencia, CA 91355-1804 Tel.: (661) 254-5050 Fax : (661) 254-5252 Email: Esbinlaw@sbcglobal.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of 20 largest unsecured creditors together with its petition. The petition was signed by Navdeep Jaggi. NETVERSANT SOLUTIONS: To Sell Assets to Lender Patriarch Partners ----------------------------------------------------------------- NetVersant Solutions Inc. will sell its assets to its secured lenders, led by Patriarch Partners, after it received no competing bids for its assets, Bloomberg's Bill Rochelle reports. As reported by the Troubled Company Reporter on December 12, 2008, the Hon. Peter J. Walsh of the United States Bankruptcy for the District of Delaware approved bidding procedures for the sale of substantially all of the Debtors' assets. All bids for the Debtors' assets were due Dec. 15, 2008, and an auction was to take place at the offices of Morris, Nichols, Arsht & Tunnel LLP at N. Market St., 18th floor in Wilmington, Delaware, on Dec. 17, followed by a sale hearing on Dec. 19. NetVersant entered into an asset purchase agreement with Patriarch, which allowed it to further market test its assets. According to Mr. Rochelle, no additional qualified bids were submitted at the auction. The sale of the assets is subject to Court approval. Patriarch Partners will release certain of its secured claims as part and will assume certain liabilities as consideration to the Debtor. NetVersant, according to Mr. Rochelle, owes $110 million on a credit agreement secured by substantially all of its assets. When they sought approval of the bidding procedures, the Debtors told the Court that the sale of their assets would relieve their business of their current substantial debt and other liabilities. The implementation of these operational changes enable their business to be profitable, the Debtor said. The Debtors also told the Court they expect to close the sale by Jan. 16, 2009. About NetVersant Solutions Headquartered in Houston, Texas, NetVersant Solutions, Inc. -- http://www.netversant.com/-- provides wireless network infrastructure services. The company also provides an array of voice, video and data communication services. The company and 20 of its affiliates filed for Chapter 11 protection on November 19, 2008 (Bankr. D. Del. Lead Case No. 08-12973). Daniel B. Butz, Esq., and Gregory W. Werkheiser, Esq., at Morris, Nichols, Arsht & Tunnell, represents the Debtors in their restructuring efforts. The Debtor selected Porter & Hedges LLP as local counsel. When they filed for protection from their creditors, they listed assets and debts between $100 million and $500 million each. NEVADA UENO: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Nevada Ueno Mita LLC OneCap Partners 2 LLC 5440 West Sahara Avenue, Third Floor Las Vegas, NV 89146 Bankruptcy Case No.: 08-25487 Type of Business: The Debtor is a single asset real estate debtor. Chapter 11 Petition Date: December 26, 2008 Court: District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtor's Counsel: Michael J. Dawson, Esq. 515 S. Third Street Las Vegas, NV 89101 Tel: (702) 384-1777 mdawson@lvcoxmail.com Estimated Assets: $50 million to $100 million Estimated Debts: $10 million to $50 million The Debtor does not have any creditors who are not insiders. The petition was signed by Michael Hesser, managing member and president of the company. NEXCEN BRANDS: Sells Bill Blass Unit to Peacock for $10,000,000 --------------------------------------------------------------- NexCen Brands, Inc., has been in active discussions to sell its Bill Blass licensing business as part of its announced restructuring plan which is centered on the company's franchising business. NexCen Brands, Inc., and its subsidiaries -- NexCen Fixed Asset company, LLC, NexCen Brand Management, Inc., Bill Blass Holding Co., Inc., Bill Blass Licensing Co., Inc., Bill Blass Jeans, LLC and Bill Blass International LLC -- sold substantially all of the assets of the Bill Blass licensing business to Peacock International Holdings, LLC, a New York limited liability company on December 24, 2008. The disposition was completed pursuant to the terms of an Asset Purchase Agreement dated December 24, 2008. Peacock agreed to purchase the assets for roughly $10 million in cash. The Purchase Agreement contains customary representations, warranties and covenants. Subject to limited exceptions for specified representations that are subject to extended survival, the representations and warranties of the company, the Sellers and Buyer will survive the closing for one year. Indemnification claims are generally capped at $2.25 million and are subject to a minimum claim amount of $25,000 and a $200,000 aggregate threshold -- with claims payable from dollar one once the aggregate exceeds this threshold. The limits do not apply to claims based on fraud. Kenneth J. Hall, Chief Executive Officer of NexCen Brands, stated, "The completion of the sale of Bill Blass is an important final step in the execution of our strategy to divest certain non-core assets and focus exclusively on our franchising business. We are gratified by the ongoing support of our lender as we continue to execute on our revised business strategy. As we look forward to 2009, we now are fully focused on our seven franchised brands in the retail and quick service restaurant sectors." A full-text copy of the purchase agreement is available at no charge at: http://ResearchArchives.com/t/s?36fd On December 4, 2008, Marvin Traub, a member of NexCen Brands' board of directors, resigned from his position as a director and as a member of the company's compensation committee. In connection with Mr. Traub's resignation, the board by resolution reduced the size of the board from six members to five. About NexCen Brands NexCen Brands Inc. (NASDAQ: NEXC) -- http://www.nexcenbrands.com/ -- acquires and manages global brands, generating revenue through licensing and franchising. The company own and license the Bill Blass and Waverly brands, well as seven franchised brands. Two franchised brands -- The Athlete's Foot and Shoebox New York -- sell retail footwear and accessories. Five are quick-service restaurants -- Marble Slab Creamery, MaggieMoo's, Pretzel Time, Pretzelmaker, and Great American Cookies. The company licenses and franchises its brands to a network of leading retailers, manufacturers and franchisees that generate $1.3 billion in retail sales in more than 50 countries around the world. The franchisees operate approximately 1,900 franchised stores. Franchisee support and training is provided at NexCen University, a state-of-the-art facility located in Atlanta. NexCen Brands has received additional notification from The Nasdaq Stock Market that the company is not in compliance with the continued listing requirement of Nasdaq Marketplace Rule 4310(c)(14) due to its failure to file its Quarterly Report on Form 10-Q for the period ended Sept. 30, 2008. The company is seeking to amend its Annual Report on Form 10-K for the year ended Dec. 31, 2007, and its Quarterly Reports on Form 10-Q for the periods ended March 31, 2008 and June 30, 2008. At this time, the company anticipates that it will complete these filings in the first quarter of 2009. * * * As reported by the Troubled Company Reporter on May 21, 2008, the company believes that there is substantial doubt about its ability to continue as a going concern, and pending completion of an independent review, that this substantial doubt also may have existed at the time the company filed its 2007 10-K. The audit committee of the company's Board of Directors has retained independent counsel to conduct an independent review of the situation. The company has concluded that its 2007 financial statements should no longer be relied upon and no reliance should be placed upon KPMG's audit report dated March 20, 2008, or its report dated March 20, 2008 on the effectiveness of internal control over financial reporting as of Dec. 31, 2007, as contained in the company's 2007 10-K. NexCen also announced that it is actively exploring all strategic alternatives to enhance its liquidity, including potential capital market transactions, the possible sale of one or more of its businesses, and discussions with the company's lender. In addition, the company will take immediate steps to reduce operating expenses. NEXCEN BRANDS: Bill Blass Sale Prompts Amendment to BTMU Facility ----------------------------------------------------------------- In connection with the sale of the assets related to the Bill Blass licensing business, NexCen Brands, Inc. amended on December 24, 2008, the bank credit facility by and among NexCen Holding Corp., a wholly owned subsidiary of the company, certain of the company's subsidiaries, and BTMU Capital Corporation. The amendment modifies certain provisions of the Facility that would have otherwise been applicable because the net proceeds from the sale of the Bill Blass licensing business are not sufficient to fully redeem the original note issued under the Facility and related to the Bill Blass licensing assets. After application of the net proceeds from the sale to the partial redemption of principal and the payment of accrued and unpaid interest on the original note related to the Bill Blass licensing assets, the remaining principal balance of the original note will be approximately $14.2 million. Under the terms of the Facility, the remaining note converted into a deficiency note that bears interest at an annual rate of 15% and matures on January 1, 2010. The amendment modifies the terms of the deficiency note and addresses certain related matters. The key provisions of the amendment include: -- the maturity date of the deficiency note has been extended from January 1, 2010 to July 31, 2013; -- scheduled principal payment obligations related to the deficiency note have been deferred until maturity of the note and a payment-in-kind interest feature was added to defer interest payments during the term of the deficiency note; and -- BTMUCC's contingent right to receive warrants to purchase 2.8 million shares of common stock of the company has been amended so that the existence of the deficiency note on and after March 31, 2009 will not be trigger the issuance of such warrants to BTMUCC. A full-text copy of the Second Amendment to Amended and Restated Security Agreement with BTMU Capital Corporation dated December 24, 2008, is available at no charge at: http://ResearchArchives.com/t/s?36fc About NexCen Brands NexCen Brands Inc. (NASDAQ: NEXC) -- http://www.nexcenbrands.com/ -- acquires and manages global brands, generating revenue through licensing and franchising. The company own and license the Bill Blass and Waverly brands, well as seven franchised brands. Two franchised brands -- The Athlete's Foot and Shoebox New York -- sell retail footwear and accessories. Five are quick-service restaurants -- Marble Slab Creamery, MaggieMoo's, Pretzel Time, Pretzelmaker, and Great American Cookies. The company licenses and franchises its brands to a network of leading retailers, manufacturers and franchisees that generate $1.3 billion in retail sales in more than 50 countries around the world. The franchisees operate approximately 1,900 franchised stores. Franchisee support and training is provided at NexCen University, a state-of-the-art facility located in Atlanta. NexCen Brands has received additional notification from The Nasdaq Stock Market that the company is not in compliance with the continued listing requirement of Nasdaq Marketplace Rule 4310(c)(14) due to its failure to file its Quarterly Report on Form 10-Q for the period ended Sept. 30, 2008. The company is seeking to amend its Annual Report on Form 10-K for the year ended Dec. 31, 2007, and its Quarterly Reports on Form 10-Q for the periods ended March 31, 2008 and June 30, 2008. At this time, the company anticipates that it will complete these filings in the first quarter of 2009. * * * As reported by the Troubled Company Reporter on May 21, 2008, the company believes that there is substantial doubt about its ability to continue as a going concern, and pending completion of an independent review, that this substantial doubt also may have existed at the time the company filed its 2007 10-K. The audit committee of the company's Board of Directors has retained independent counsel to conduct an independent review of the situation. The company has concluded that its 2007 financial statements should no longer be relied upon and no reliance should be placed upon KPMG's audit report dated March 20, 2008, or its report dated March 20, 2008 on the effectiveness of internal control over financial reporting as of Dec. 31, 2007, as contained in the company's 2007 10-K. NexCen also announced that it is actively exploring all strategic alternatives to enhance its liquidity, including potential capital market transactions, the possible sale of one or more of its businesses, and discussions with the company's lender. In addition, the company will take immediate steps to reduce operating expenses. NORBRECK LLC: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: NorBreck, LLC 10 Faraday Irvine, CA 92618 Bankruptcy Case No.: 08-18409 Chapter 11 Petition Date: December 19, 2008 Court: United States Bankruptcy Court Central District Of California (Santa Ana) Judge: Theodor Albert Debtor's Counsel: Marc J. Winthrop, Esq. 660 Newport Center Dr., Ste. 400 Newport Beach, CA 92660 Tel.: (949) 720-4100 Email: pj@winthropcouchot.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition and a list of the Debtor's largest unsecured creditors are available for free at: http://bankrupt.com/misc/cacb08-18409.pdf The petition was signed by John D. Gantes. NORTHWESTERN CORP: PSC Slaps $750,000 Fine on Violations -------------------------------------------------------- The Montana Public Service Commission voted 5-0 on December 23, 2008, to find NorthWestern Corporation in violation of the "limited investment basket cap" provisions of its 2004 Bankruptcy Stipulation. In a rare move, the PSC also voted to seek the recovery of more than $750,000 in related fines from the company in District Court. Concluding an investigation which began in April, the PSC determined the company violated the Stipulation and related requirements when obtaining the financing for the purchase of Colstrip Unit 4. The specific violations are borrowing money for improper purposes, investing more than it is allowed to invest in non-utility activities, and improperly supporting borrowing by a subsidiary. If the District Court agrees with the PSC findings, NWE could be fined $765,000 for violations over the course of 22 months. Hearing on the company's compliance with the Bankruptcy Stipulation began September 24, 2008. According to the PSC, a significant component of the bankruptcy agreement relies on the "ring-fencing" concept. The idea, the PSC explained, is to separate and insulate public utility assets, facilities, and operations from risks associated with non-utility ventures of the Corporation. For example, parent company public utility debt cannot be used for non-utility investment purposes. Colstrip Unit 4 is a coal-fired generation plant east of Billings, in Montana. Northwestern rejects the Consumer Counsel's case, stating it has followed all of the requirements fully. Made up of 5 elected commissioners, the PSC works to ensure that Montanans receive safe and reliable service from regulated public utilities while paying reasonable rates. Utilities regulated by the PSC generally include private investor owned natural gas, electric, telephone, water, and sewer companies. In addition, the PSC regulates certain motor carriers, and oversees natural gas pipeline safety and intrastate railroad safety. About NorthWestern Energy Based in Sioux Falls, South Dakota, NorthWestern Corporation (Nasdaq: NWEC) -- http://www.northwesternenergy.com/-- is a provider of electricity and natural gas in the Upper Midwest and Northwest, serving approximately 650,000 customers in Montana, South Dakota and Nebraska. The Debtor filed for Chapter 11 petition on Sept. 14, 2003 (Bankr. D. Del. Case No. 03-12872) Scott D. Cousins, Esq., Victoria Watson Counihan, Esq., and William E. Chipman, Jr., Esq., at Greenberg Traurig LLP, and Jesse H. Austin, III, Esq., and Karol K. Denniston, Esq., at Paul, Hastings, Janofsky & Walker LLP, represent the Debtor in its restructuring efforts. Kurtzman Carson Consultants LLC serves as the Debtor's notice and claims agent. NorthWestern filed a plan of reorganization and disclosure statement with the U.S. Bankruptcy Court for the District of Delaware. The Court confirmed the Plan on Oct. 8, 2004, and the Court's order was entered on Oct. 20, 2004. On Nov. 1, 2004, NorthWestern's plan of reorganization became effective and the company emerged from Chapter 11. OSCIENT PHARMA: NASDAQ Extends Temporary Suspension to 90 Days -------------------------------------------------------------- Oscient Pharmaceuticals Corporation has received notification from NASDAQ OMX that NASDAQ has extended by 90 days the temporary suspension of the rules requiring a minimum market value of publicly held shares and a minimum $1 closing bid price given the current extraordinary market conditions, As a result of the suspension, all companies presently in the compliance process will remain at that same stage of the process; however, companies can regain compliance during the suspension period. NASDAQ will not take any action to delist any security for these concerns during the suspension period; the rules will be reinstated on Monday, April 20, 2009. On Oct. 3, 2008, the company said that pursuant to Marketplace Rule 4310(c)(8)(B), it had 90 calendar days to regain compliance with the MVPHS requirement. The company estimates it will have until July 6, 2009, to regain compliance by evidencing a minimum $15 million MVPHS for 10 consecutive business days. However, if it fails to regain compliance with the MVPHS requirement by July 6, 2009, the company will receive written notification of delisting from NASDAQ and at that time will be entitled to request a hearing before a NASDAQ Listing Qualifications Panel to present its plan to regain compliance with the MVPHS requirement. The NASDAQ notice has no effect on the listing of the Company's common stock on The NASDAQ Global Market at this time. Oscient Pharmaceuticals Corporation, a commercial-stage biopharmaceutical company, sells and markets products to community-based primary care physicians through its primary care sales force in the United States. The Company is headquartered in Waltham, Mass. PALMS OF TREASURE ISLAND: Files for Bankruptcy in Florida --------------------------------------------------------- The Palms of Treasure Island LLC sought Chapter 11 protection from its creditors in the United States Bankruptcy Court for the Middle District of Florida after selling a few units along Gulf Boulevard, according to Business Journal. The company listed assets and debts more than $10 million in its filing, the report says. The company's 36-unit condominium located at 10315 Gulf Boulevard, which was build in 2007 after the developer obtained a $7.5 million mortgage in 2004 representing 207,600 per unit, Business Journal citing records from Pinellas County. Record shows, the report says, 10 units were sold up to beginning of this year averaging $376,700 and the most expensive selling for $565,000 The company owes $185,000 to Palms of Treasure Island Condominium Association and #385,000 to host of other unsecured creditors, Business Journal citing papers filed with the Court. A meeting of the company's creditors is scheduled for Jan. 16, 2009, at 1:30 p.m. at the courthouse, 501 E. Polk St., Business Journal notes. Palms of Treasure Island LLC -- http://thepalmsofti.com/and http://thepalmsoftreasureisland.com-- operates condominium units. PALMS OF TREASURE ISLAND: Voluntary Chapter 11 Case Summary ----------------------------------------------------------- Debtor: The Palms of Treasure Island, LLC 9515 N. Trask St. Tampa, FL 33624 Bankruptcy Case No.: 08-20354 Chapter 11 Petition Date: December 19, 2008 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Don M Stichter, Esq. Stichter, Riedel, Blain & Prosser 110 East Madison Street, Suite 200 Tampa, FL 33602 Tel.: (813) 229-0144 Fax : (813) 229-1811 Email: dstichter.ecf@srbp.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of 20 largest unsecured creditors together with its petition. The petition was signed by Edward Curtin, Manager of the company. PARENT CO: Files for Bankruptcy; DE Shaw Assumes Bank Debt ---------------------------------------------------------- The Parent Company and its nine affiliates filed for chapter 11 bankruptcy protection on December 28, 2008, before the U.S. Bankruptcy Court for the District of Delaware. In a regulatory filing with the Securities and Exchange Commission, the company held that it has experienced a significant reduction in revenues that has adversely affected current results of operations and liquidity. This reduction is the result of recent industry and macroeconomic conditions, including weak consumer confidence and spending, along with credit limitations imposed by the company's vendors and lenders, which has resulted in the company being unable to obtain appropriate levels of inventory to support consumer demand through the holiday season. The developments impact the company's liquidity and consequently raise substantial doubt about the company's ability to continue as a going concern. The company had said it continues to pursue a variety of strategic initiatives and restructuring alternatives, including a potential sale of all or a portion of its business, or seeking protection of the bankruptcy courts. The company said it continues to monitor working capital availability and capital resources, and the company's ability to maintain working capital and capital resources will have a significant impact on the ultimate resolution of the company's current liquidity situation and the timing of any potential actions in response to the situation. There can be no assurance that the company will successfully be able to resolve its current liquidity situation. In a September filing with the SEC, the company disclosed that as of August 2, 2008, its principal source of liquidity was a $25 million revolving credit line. The company said it has a $25 million term loan facility with Laminar Direct Capital, L.L.C., an affiliate of D. E. Shaw Laminar Acquisition Holdings 3, L.L.C., who holds a majority of the company's common shares -- $10 million of which has been funded, and the remaining $15 million of which is subject to various conditions, including Laminar Direct's consent. Assuming the company obtains Laminar Direct's funding of the remaining $15 million term loan, the company said it believes the facilities are sufficient to enable it to fund operating expenses and capital expenditures and enhance its strategic initiatives for the next 12 months. DE Laminar Assumes Bank Debt On December 1, 2008, the company's aggregate revolving exposure under the $25,000,000 credit agreement dated as of October 12, 2007, as amended, among the company and its subsidiaries BabyUniverse, Inc., eToys Direct, Inc., PoshTots, Inc., Dreamtime Baby, Inc. and My Twinn, Inc., as co-borrowers; eToys Direct 1, LLC, eToys Direct 2, LLC, eToys Direct 3, LLC and Gift Acquisition, L.L.C., as guarantors; and The CIT Group/Business Credit, Inc., as administrative agent, collateral agent and sole lender, exceeded the borrowing base, resulting in an overadvance. CIT demanded that the Borrowers immediately repay the overadvance and the Borrowers advised CIT that they were currently unable to repay such overadvance. On December 4, 2008, the company and its subsidiaries and CIT entered into a letter agreement, pursuant to which the company made certain representations, warranties and covenants to induce CIT to continue to make revolving loans to the Borrowers, permit the overadvance to remain outstanding and refrain from exercising CIT's rights and remedies. Among other things, the company agreed to (i) deliver weekly borrowing base certificates to CIT on December 8 and 15, 2008 and (ii) not permit the outstanding principal amount of the revolving loans to exceed certain maximum principal balances or the overadvance to exceed certain maximum amounts. CIT agreed to continue to consider requests from the Borrowers for additional revolving loans through December 8, 2008, subject to the company' compliance with the covenants, provided however, that CIT reserved its right at any time to refuse to make additional revolving loans and to exercise its rights and remedies. Management engaged in active discussions, with respect to funding and additional credit availability, with CIT and Laminar Direct. A full-text copy of the Letter Agreement dated December 4, 2008, is available at no charge at: http://ResearchArchives.com/t/s?36f0 The company and its subsidiaries and CIT entered into a letter agreement dated December 10, 2008, relating to an existing event of default under the credit agreement dated as of October 27, 2007, as amended, resulting from the Borrowers' inability to repay the overadvance. Pursuant to the letter agreement, CIT agreed to continue to make revolving loans to the Borrowers, permit the overadvance to remain outstanding, and forbear from exercising its default-related rights and remedies until the earliest of: (i) December 12, 2008, (ii) occurrence of any additional default or event of default under the credit agreement (other than the existing event of default), (iii) the failure of any Loan Party or D. E. Shaw Laminar Lending, Inc., to comply with their obligations under the letter agreement with the company or the letter agreement dated December 11, 2008, between CIT and Laminar Lending, and (iv) the taking of any action by or on behalf of Laminar Lending to repudiate or revoke (or attempt to repudiate or revoke) or contest the validity or enforceability of the Limited Guaranty of the obligations under the credit agreement made by Laminar Lending in favor of CIT. To induce CIT to enter into the letter agreement, the company made certain representations, warranties and covenants to CIT, including, among others, to not permit the outstanding principal amount of the revolving loans to exceed certain maximum principal balances or permit the amount of the overadvance to exceed certain maximum amounts. On December 12, 2008, CIT assigned its interest in the outstanding loan to D. E. Shaw Laminar Portfolios, L.L.C. The company, CIT, as existing lender, administrative agent and collateral agent under the credit agreement, Laminar Lending, Laminar Portfolios, as successor lender under the credit agreement, and D. E. Shaw Laminar Lending 3 (C), L.L.C., as successor administrative agent and collateral agent under the credit agreement, then entered into an assignment and acceptance agreement relating to the revolving commitment and outstanding loans under the credit agreement. On the terms and subject to the conditions set forth in the assignment and acceptance agreement, effective as of December 12, 2008: (i) Laminar Portfolios purchased and assumed all of CIT's rights and obligations, as existing lender, in and to the revolving commitment and all outstanding revolving loans under the credit agreement, (ii) CIT resigned as administrative agent and collateral agent under the credit agreement and related loan documents, (iii) Laminar Portfolios and the company appointed the Successor Agent as administrative agent and collateral agent under the credit agreement and related loan documents, and (iv) the Successor Agent accepted the assignment of all estates, liens, properties, rights, powers and duties of CIT, as existing administrative agent and collateral agent, under the loan documents (other than certain surviving rights of CIT thereunder). In consideration for the assignment of the revolving loans, Laminar Portfolios paid CIT $11,971,501, representing the outstanding principal balance of such loans, together with accrued and unpaid interest thereon, and related commitment fees and wire transfer fees. A full-text copy of the Letter Agreement dated December 10, 2008 and effective December 11, 2008, among The Parent Company, the additional Borrowers, the Guarantors, and The CIT Group/Business Credit, Inc. as administrative agent, collateral agent and sole lender, is available at no charge at: http://ResearchArchives.com/t/s?36f1 A full-text copy of the Assignment and Acceptance Agreement dated as of December 12, 2008, among The Parent Company, the additional Borrowers named therein, the Guarantors named therein, The CIT Group/Business Credit, Inc., as existing administrative agent, collateral agent and sole lender, D. E. Shaw Laminar Portfolios, L.L.C., as successor lender, D. E. Shaw Laminar Lending 3 (C), L.L.C., as successor administrative agent and collateral agent, and D. E. Shaw Laminar Lending, Inc., is available at no charge at: http://ResearchArchives.com/t/s?36f3 On December 12, 2008, Barry Hollingsworth, the company's Chief Financial Officer, was put on administrative leave with pay. Mike Wagner, the company's Chief Executive Officer, assumed the role of Acting Chief Financial Officer during Mr. Hollingsworth's leave of absence. Based in Denver, Colorado, The Parent Company sells toys, baby products, video games, electronics, party goods, movies and videos online through eToys.com and KBtoys.com. Parent Co. operates under a licensing agreement with KB Holdings, LLC, and has established strategic retail relationships with the online stores of major national retailers, such as Amazon, Buy.com, Kmart, Macys, QVC and Sears. Through the BabyUniverse, Dreamtime Baby and Posh Tots Web sites, Parent Co. sells brand-name baby, toddler and maternity products. Its three eContent sites include BabyTV.com, PoshCravings.com and ePregnancy.com, all of which provide content and social networking applications targeted to mothers and expectant mothers. On October 12, 2007, BabyUniverse, Inc. completed a merger with eToys Direct, Inc. pursuant to which Baby Acquisition Sub, Inc., or Merger Sub, which was a wholly owned direct subsidiary of BabyUniverse, merged with and into eToys Direct, with eToys Direct thereupon becoming a wholly-owned direct subsidiary of BabyUniverse and the surviving corporation in the merger. On March 7, 2001, eToys, Inc., filed for Chapter 11 in Delaware (Case Nos. 01-706(MFW) through 01-709 (MFW)). eToys and its then- affiliates filed a First Amended Consolidated Liquidating Plan of Reorganization of EBC I, Inc., f/k/a eToys, Inc. and its Affiliated Debtors and Debtors-in-Possession dated August 5, 2002, and a Disclosure Statement accompanying the plan. The Plan provided for the sale of eToys' assets to be used to settle creditor claims, and the ultimate dissolution of the company. On November 4, 2002, the Court entered an order confirming the Plan. All voting classes voted overwhelmingly to accept the Plan. The Effective Date of the Plan was November 5, 2002. Parent Co., as of August 2, 2008, had $95,582,085 in total assets, and $30,073,056 in total liabilities. The company also had $82,220,324 in accumulated deficit. The company reported a $7,583,774 net loss for the three months ended, and $13,964,356 net loss for the six months ended August 2, 2008. In papers filed with the bankruptcy court, the Debtors disclosed $20,633,447 in total assets, and $35,722,280 in total liabilities as of December 22, 2008. Parent Co. has not filed its quarterly report on Form 10-Q for the period ended November 1, 2008. PARENT CO: Case Summary & 40 Largest Unsecured Creditors -------------------------------------------------------- Debtor: EToys Direct 1, LLC 717 17th Street, Suite 1300 Denver, CO 80202 Bankruptcy Case No.: 08-13412 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- The Parent Company 08-13413 BabyUniverse, Inc. 08-13414 Dreamtime Baby, Inc. 08-13415 EToys Direct, Inc. 08-13416 PoshTots, Inc. 08-13417 EToys Direct 2, LLC 08-13418 EToys Direct 3, LLC 08-13419 Gift Acquisition, L.L.C. 08-13420 Type of Business: The Debtors sell toys and children's products through their Web sites. Debtor- affiliate Parent Company is publicly traded on the NASDAQ under the ticker symbol KIDS. The Debtors lease two distribution centers in Blairs, Virginia, which holds inventory and ship products, and Ringgold, Virginia, which is used primarily for ship-alone items off-site storage. See: http://www.etoys.com/ Chapter 11 Petition Date: December 28, 2008 Court: District of Delaware (Delaware) Judge: Brendan Linehan Shannon Debtors' Counsel: Laura Davis Jones, Esq. ljones@pszjlaw.com Michael Seidl, Esq. mseidl@pszyj.com Pachulski Stang Ziehl & Jones LLP 919 N. Market Street, 17th Floor Wilmington, DE 19899-8705 Tel: (302) 652-4100 Fax: (302) 652-4400 Financial Advisor: Clear Thinking Group LLC Claims Agent: Omni Management Group LLC Chief Restructuring Officer: Gibson & Rechan LLC Debtors' financial position as of December 22, 2008: Total Assets: $20,633,447 Total Debts: $35,722,280 The Debtors' Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ UPS trade $3,115,571 Attn: Jan Doering Lockbox 577 Carol Stream, IL 60132-0577 Tel: (630) 628-4923 Fax: (630) 628-4985 Quad/Graphics Inc. trade $1,972,976 Attn: Rosie 75 Remittance Drive Suite 6400 Chicago, IL 60675-6400 Tel: (414) 566-2796 Fax: (414) 566-4655 Zhejaing Xinyun Wood trade $660,329 Industry Group Co. Ltd. Attn: Jian Zhang No. 378 Zhongshand Road Yunhe, Zhejiang China Tel: 0578-5129829 Step 2 Corporation trade $341,591 Google Inc. trade $267,446 Madd International Ltd. trade $249,503 WMK Walthers Inc. trade $216,839 Linkshare Corporation trade $216,569 Technical Traffic Consultants trade $190,079 Tek Nek Toys (HK) Ltd. trade $180,607 King State Corp. trade $180,334 Ernts & Young LLP trade $180,000 Wow Wee Group Limited trade $162,099 WNR Industries Ltd. trade $150,017 National Products Limited trade $144,948 Riverwalk Owner LLC trade $130,978 Baker & Taylor trade $130,943 Manhattan Associates Inc. non-trade $129,393 Hasbro Toy Group trade $126,206 Oregon Scientific Inc. trade $123,108 Milton Bradley Company trade $122,084 Yahoo! Search Marketing non-trade $121,952 Bowless LLC non-trade $119,530 Jakks Pacific Inc. trade $117,673 Manley Toys Ltd. trade $114,677 Epsilon Data Management non-trade $110,188 Uncle Milton Industries Inc. trade $102,177 UPS Expedited Mail Services non-trade $98,809 Inc. Realtoy International Ltd. trade $97,500 Radio Flyer Inc. trade $97,121 DHL Express (USA) Inc. non-trade $92,412 First Act Inc. trade $90,872 Spin Master Toys trade $90,320 Britax Safety trade $88,200 Lexibook Ltd. trade $88,113 Toy State Industrial Ltd. trade $83,204 Moose Mountain Toymakers trade $82,529 Limited Chicco USA Inc. trade $75,792 Toy Island trade $75,631 Learning Resources Inc. trade $73,987 The petition was signed by Michael J. Wagner, chief executive officer and president of the Parent Company. PAUL FLORES: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Paul Flores 375 Louise CT Milpitas, CA 95035 Bankruptcy Case No.: 08-57373 Chapter 11 Petition Date: December 18, 2008 Court: United States Bankruptcy Court Northern District of California (San Jose) Judge: Roger L. Efremsky Debtor's Counsel: Sidney C. Flores, Esq. Law Offices of Flores and Barrios 97 E St. James St. #102 San Jose, CA 95112 Tel.: (408) 292-3400 Email: floreslawfirm@yahoo.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/canb08-57373.pdf The petition was signed by Paul Flores. PILGRIM'S PRIDE: Names Don Jackson as Chief Executive Officer ------------------------------------------------------------- Pilgrim's Pride Corp. named Dr. Don Jackson as the company's chief executive officer and chief operating officer following the resignation of Clint Rivers, former president and CEO, and Robert A. Wright, former COO. The company said the appointment was made in an effort to bring a fresh perspective to the company and to maximize opportunities available to company through its restructuring. The Debtors has asked the U.S. Bankruptcy Court for the Northern District of Texas to approve Dr. Jackson's employment. "As Pilgrim's Pride begins the reorganization process, we believe the company and its stakeholders would be best served by a fresh perspective on the opportunities available to us through restructuring," said Lonnie "Bo" Pilgrim, senior chairman of Pilgrim's Pride. "Don Jackson is a proven leader with the essential skills and industry insight to position Pilgrim's Pride to emerge from Chapter 11 as a stronger, more efficient, and more focused company." Mr. Pilgrim added: "Clint and Bob have both made tremendous contributions throughout their careers at Pilgrim's Pride, and we are grateful for their commitment and dedicated service during a very difficult time for our company and our industry. We wish both of them continued success in their careers." Pursuant to the Employment Agreement, Dr. Jackson's annual starting base salary is $1,500,000, plus many other benefits and entitlements during his employment term, which will expire on the third anniversary of the date the Court enters an order approving the Employment Agreement. A sign-on bonus of $3,000,000 payable upon, and within five business days of the effective date of the Employment Agreement will be given to Dr. Jackson, which must be paid must be repaid on a pro-rata basis if the Employment Agreement is terminated for cause by the Company or without good reason by Dr. Jackson during the term of the Employment Agreement. Dr. Jackson will also be granted 3,085,656 shares of PPC's common stock on January 1, 2009, or within one day of the effective date of the Employment Agreement, whichever is later. The Shares will be subject to forfeiture on a pro-rata basis if the Employment Agreement is terminated for cause or without good reason during the Term. During the Term, Dr. Jackson must hold at least 50% of the Shares that are not subject to forfeiture. Dr. Jackson will further be entitled to receive other compensation like: (a) a Reorganization Bonus in an amount not to exceed $2,000,000 upon confirmation of a plan of reorganization of the Company that does not provide for a sale of a majority of the Company?s and its subsidiaries? assets, provided that a majority of the Company?s assets have not been sold under Section 363 of the Bankruptcy Code prior to the date of the Plan confirmation; and is subject to the Company?s ability to meet certain targets specified in the Employment Agreement; (b) participation in all incentive, savings, and retirement plans, practices, and programs generally applicable to other executive personnel of the Company; (c) eligibility to participate in the Company?s Executive Relocation Policy and Repayment Agreement and all group benefits plans and programs the Company may establish for its executive employees. In addition, and notwithstanding anything to the contrary contained in the Relocation Policy, (a) the temporary housing period under the Relocation Policy shall be extended until the earliest of (i) the date on which the plan of reorganization of the Company is confirmed, (ii) the first anniversary of the effective date of the Employment Agreement or (iii) the date Dr. Jackson permanently relocates to Texas. Dr. Jackson will be reimbursed for costs and expenses incurred under the "Trips Home" provision of the Relocation Policy for a trip home every two weeks up to a maximum of 26 trips until the Extension Deadline. Dr. Jackson will be entitled to an annual vacation, sick leave, and paid holidays in accordance with the policies established by the Company for similarly situated employees. If the Company terminates Dr. Jackson's employment without cause or for death or permanent disability, or if Dr. Jackson terminates his employment for good reason, prior to the end of the Term, (1) he will be paid all accrued and unpaid salary, incentive compensation, and other compensation through the date of termination; (2) any prorated portion of the Sign-On Bonus that he would otherwise have to be repay, will be forgiven and (3) the Shares will immediately vest and all restrictions thereon will lapse. If the Company terminates Dr. Jackson's employment for cause or if he terminates his employment prior to the end of the Term, he (1) will be paid all accrued and unpaid salary, incentive compensation, and other compensation through the date of termination, (2) will be obligated to repay a pro-rated portion of the Sign-On Bonus, and (3) will forfeit the remaining Shares subject to forfeiture. Dr. Jackson will be subject to non-competition and non-disclosure agreements during the term of the Employment Agreement and for two years following the Date of Termination. A full-text copy of the Employment Agreement is available for free at http://bankrupt.com/misc/pilgrimspride_ceoemp_agrmnt.pdf The Board appointed Lonnie Ken Pilgrim, Chairman of the Board, to serve as interim President of the Company until Dr. Jackson's appointment is approved by the Court, the company discloses with the Securities and Exchange Commission. About Pilgrim's Pride Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. In addition, the company owns 34 processing plants in the United States and 3 processing plants n Mexico. The processing plants are supported by 42 hatcheries, 31 feed mills and 12 rendering plants in the United States and 7 hatcheries, 4 feed mills and 2 rendering plants in Mexico. Moreover, the company owns 12 prepared food production facilities in the United States. The company employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. Pilgrim's Pride Corporation and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N. D. of Texas, Lead Case No. 08-45664). Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. The Debtors have also tapped Baker & McKenzie LLP as special counsel. Lazard Freres & Co., LLC is the company's investment bankers and William K. Snyder of CRG Partners Group LLC as chief restructuring officer. The company's claims and noticing agent is Kurtzman Carson Consulting LLC. Pilgrim's Pride had total assets of $3,847,185,000, and debts of $2,700,139,000 as of June 28, 2008. A nine-member committee of unsecured creditors has been appointed in the case. (Pilgrim's Pride Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). PILGRIM'S PRIDE: Reports $998.6MM Net Loss for Fiscal Year 2008 --------------------------------------------------------------- Pilgrim's Pride Corporation Consolidated Balance Sheet As of September 27, 2008 ASSETS Current Assets: Cash & cash equivalents $61,553,000 Investment in available-for-sale securities 10,439,000 Trade accounts and other receivables, less allowance for doubtful accounts 144,156,000 Inventories 1,036,163,000 Income taxes receivable 21,656,000 Current deferred taxes 54,312,000 Prepaid expenses and other current assets 71,552,000 Assets held for sale 17,370,000 Assets of discontinued business 33,519,000 -------------- Total current assets 1,450,720,000 Investment in available-for-sale securities 55,854,000 Other assets 51,768,000 Identified intangible assets, net 67,363,000 Goodwill - -------------- Property, plant and equipment, net 1,673,004,000 -------------- Total assets $3,298,709,000 ============== LIABILITIES & STOCKHOLDER'S EQUITY Current Liabilities: Accounts payable $378,887,000 Accrued expenses 448,823,000 Current maturities of long-term debt 1,874,469,000 Liabilities of discontinued business 10,783,000 -------------- Total current liabilities 2,712,962,000 Long-term debt, less current maturities 67,514,000 Deferred income taxes 80,755,000 Other long term liabilities 85,737,000 Commitments and contingencies - Stockholders' equity: Preferred stock, $.01 per value, 5,000,000 shares authorized no shares issued - Common stock, $.01 par value, 160,000,000 shares authorized, 74,055,733 and 66,555,733 shares issued and outstanding at year end 2008 and 2007 respectively 740,000 Additional paid-in capital 646,922,000 Accummulated earnings (deficit) (317,082,000) Accummulated other comprehensive income 21,161,000 -------------- Total stockholders' equity 351,741,000 -------------- Total Liabilities and Stockholders' equity $3,298,709,000 ============== Pilgrim's Pride Corporation Consolidated Statement of Operations For the fiscal year ended September 27, 2008 Net Sales $8,525,112,000 Costs and expenses: Cost of sales 8,675,524,000 Operational restructuring charges 13,083,000 -------------- Gross profit(loss) (163,495,000) Selling general and administrative expenses 376,599,000 Goodwill impairment 501,446,000 Administrative restructuring charges 16,156,000 -------------- Total cost and expenses 9,582,808,000 Operating income(loss) (1,057,696,000) Other expenses(income): Interest expense 134,220,000 Interest income (2,593,000) Loss on early extinguishment of debt - Miscellaneous, net (2,230,000) -------------- 129,397,000 Income (loss) from continuing operations before income taxes (1,187,093,000) Income tax expense(benefits) (194,921,000) -------------- Income(loss) from continuing operations (992,172,000) Income (loss) from operations of discontinued business, net of tax (7,312,000) Gain on disposal of discontinued business, net of tax 903,000 -------------- Net income(loss) ($998,581,000) ============== Pilgrims' Pride Corporation Consolidated Cash Flow Statement For the fiscal year ended September 27, 2008 Net cash flows from operating activities: Net income(loss) ($998,581,000) Adjustments to reconcile net income(loss) to cash provided by (used in) operating activities Depreciation and amortization 240,305,000 Non-cash loss on early extinguishment of debt - Tangible asset impairment 13,184,000 Goodwill impairment 501,446,000 Loss(gain) on property disposals (14,850,000) Deferred income taxes (195,944,000) Changes in operating assets and liabilities, net of the effect of business acquired Accounts and other receivables (19,864,000) Income tax payable/receivable (1,552,000) Inventories (103,937,000) Prepaid expenses and other current assets (23,392,000) Accounts payable and accrued expenses (71,293,000) Other (6,248,000) -------------- Cash provided by(used in) operating activities (680,726,000) Cash flows from investing activities: Acquisitions of property, plant and equipment (152,501,000) Purchase of investment securities (38,043,000) Procedures from sale or maturity of investment securities 27,545,000 Business acquisition, net of cash acquired - Proceeds from property disposals 41,367,000 -------------- Cash provided by(used in) investing activities (121,632,000) Cash flows from financing activities: proceeds from notes payable to banks - Repayments on notes payable to banks - Proceeds from long-term debt 2,264,912,000 Payments on long-term debt (1,646,028,000) Changes in cash management obligations 13,358,000 Sale of common stock 177,218,000 Debt issue costs (5,589,000) Cash dividends paid (6,328,000) -------------- Cash provided by (used in) financing activities 797,743,000 Increase(decrease) in cash and cash equivalents (4,615,000) Cash and cash equivalents, beginning of year 66,168,000 -------------- Cash and cash equivalent, end of year $61,553,000 ============== About Pilgrim's Pride Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. In addition, the company owns 34 processing plants in the United States and 3 processing plants n Mexico. The processing plants are supported by 42 hatcheries, 31 feed mills and 12 rendering plants in the United States and 7 hatcheries, 4 feed mills and 2 rendering plants in Mexico. Moreover, the company owns 12 prepared food production facilities in the United States. The company employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. Pilgrim's Pride Corporation and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N. D. of Texas, Lead Case No. 08-45664). Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. The Debtors have also tapped Baker & McKenzie LLP as special counsel. Lazard Freres & Co., LLC is the company's investment bankers and William K. Snyder of CRG Partners Group LLC as chief restructuring officer. The company's claims and noticing agent is Kurtzman Carson Consulting LLC. Pilgrim's Pride had total assets of $3,847,185,000, and debts of $2,700,139,000 as of June 28, 2008. A nine-member committee of unsecured creditors has been appointed in the case. (Pilgrim's Pride Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). PILGRIM'S PRIDE: To Cut 505 Jobs in Live Oak, Fla. in 2009 ---------------------------------------------------------- Pilgrim's Pride Corporation, various sources reported, may cut 505 of the 1,400 jobs at its Live Oak, Florida plant. A statement from the company, dated December 19, 2008, said it will eliminate second-shift processing operations at the Live Oak plant between February 17 and March 29, 2009. The statement added that "some contract growers and employees in live operations will also be affected," but did give out an exact figure. The company stated that it is taking the action in its "continued efforts to reduce costs and operate more efficiently," and added that it is part of a broad-based plan to improve its competitive position and restore the company to profitability. The company assured employees that those who are affected by the layoff will be notified "within the next few weeks" and will continue to work and be paid until their jobs are officially eliminated. Employees, the company statement said, may be given priority consideration for other Pilgrim's Pride jobs. About Pilgrim's Pride Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. In addition, the company owns 34 processing plants in the United States and 3 processing plants n Mexico. The processing plants are supported by 42 hatcheries, 31 feed mills and 12 rendering plants in the United States and 7 hatcheries, 4 feed mills and 2 rendering plants in Mexico. Moreover, the company owns 12 prepared food production facilities in the United States. The company employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. Pilgrim's Pride Corporation and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N. D. of Texas, Lead Case No. 08-45664). Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. The Debtors have also tapped Baker & McKenzie LLP as special counsel. Lazard Freres & Co., LLC is the company's investment bankers and William K. Snyder of CRG Partners Group LLC as chief restructuring officer. The company's claims and noticing agent is Kurtzman Carson Consulting LLC. Pilgrim's Pride had total assets of $3,847,185,000, and debts of $2,700,139,000 as of June 28, 2008. A nine-member committee of unsecured creditors has been appointed in the case. (Pilgrim's Pride Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). PILGRIM'S PRIDE: FMR LLC Discloses 2.33% Equity Stake ----------------------------------------------------- FMR LLC discloses with the Securities and Exchange Commission that it is deemed to beneficially own 1,728,161 shares of Pilgrim's Pride Corp. common stock, which represents 2.334% of the 74,055,733 shares of PPC common stock outstanding as of December 11, 2008. Fidelity Management & Research Company, a wholly owned subsidiary of FMR LLC, is the beneficial owner of 600 shares or 0.001% of PPC common stock as a result of acting as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940. Edward C. Johnson 3d and FMR LLC, through its control of Fidelity, and the funds each has sole power to dispose of the 600 shares owned by the Funds. FIL Limited, is the beneficial owner of 1,727,561 shares or 2.333% of the Common Stock outstanding of PPC. Partnerships controlled predominantly by members of the family of Mr. Johnson own shares of FIL voting stock with the right to cast approximately 47% of the total votes, which may be cast by all holders of FIL voting stock. About Pilgrim's Pride Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. In addition, the company owns 34 processing plants in the United States and 3 processing plants n Mexico. The processing plants are supported by 42 hatcheries, 31 feed mills and 12 rendering plants in the United States and 7 hatcheries, 4 feed mills and 2 rendering plants in Mexico. Moreover, the company owns 12 prepared food production facilities in the United States. The company employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. Pilgrim's Pride Corporation and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N. D. of Texas, Lead Case No. 08-45664). Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. The Debtors have also tapped Baker & McKenzie LLP as special counsel. Lazard Freres & Co., LLC is the company's investment bankers and William K. Snyder of CRG Partners Group LLC as chief restructuring officer. The company's claims and noticing agent is Kurtzman Carson Consulting LLC. Pilgrim's Pride had total assets of $3,847,185,000, and debts of $2,700,139,000 as of June 28, 2008. A nine-member committee of unsecured creditors has been appointed in the case. (Pilgrim's Pride Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). POWERMATE CORP: Inks Confidential Settlement With Lowe's -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved a settlement agreement between Powermate Corp. and customer Lowe's Cos. The terms of the settlement were not publicly disclosed. Powermate asserts that Lowe's owe it $4.3 million for goods purchased on credit. Lowe's alleges that it was owed certain amounts for chargebacks. On December 2, 2008, the Troubled Company Reporter, citing Bill Rochelle, said the official committee of unsecured creditors appointed in Powermate's case obtained the Bankruptcy Court's approval to settle a lawsuit against Sun Capital Partners Inc., the private-equity investor that bought 95% of Powermate in 2004. According to Mr. Rochelle, in exchange for the withdrawal of the suit, US$4.7 million fund will be created for unsecured creditors, while Sun Capital will waive unsecured claims. The Creditors Committee sued Sun Capital Partners alleging fraudulent transfer and breach of fiduciary duty. About Powermate Headquartered in Aurora, Illinois, Powermate Corp. -- http://www.powermate.com/-- manufactures portable and home standby generators, air compressors, and pressure washers. Powermate Holding Corp. is the parent of Powermate Corp. In turn, Powermate Corp. owns 100% of Powermate International Inc. Powermate Corp. operates the companys assets located in the United States. Powermate International has sales employees in Hong Kong and the Philippines. Powermate Holding has no employees or operations. Sun Capital Partners bought 95% of Powermate in 2004. Powermate Holding has two other non-debtor subsidiaries, Powermate Canadian Corp., located in Canada and Powermate S. de R.L. de C.V., which is domiciled in Mexico. The three companies filed for chapter 11 protection on March 17, 2008 (Bankr. D. Del. Lead Case No.08-10498). Kenneth J. Enos, Esq.. and Michael R. Nestor, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors. The Official Committee of Unsecured Creditors, which has seven creditor members, is represented by Monika J. Machen, Esq., at Sonnenschein Nath Rosenthal LLP. On May 23, 2008, the Debtors' summary of schedules posted total assets of US$60,139,442 and total debts of US$85,700,759. PRECISION PARTS: Section 341(a) Meeting Scheduled for January 20 ---------------------------------------------------------------- Roberta A. DeAngelis, the United States Trustee for Region 3, will convene a meeting of creditors of Precision Parts International Services Corp. and its debtor-affiliates on Jan. 20, 2009, at 2:00 p.m., at J. Caleb Boggs Federal Building, 2nd Floor, Room 2112, in Wilmington, Delaware. 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. Headquartered in Rochester Hills, Michigan, Precision Parts International Services Corp. -- http://www.precisionparts.com-- sells 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. Bankruptcy Case No.: 08-13291 The company and eight of its affiliates filed for Chapter 11 protection on Dec. 12, 2008 (Bankr. D. Del. Lead Case No. 08-13291). David M. Fournier, Esq., at Pepper Hamilton LLP, represents the Debtors in their restructuring efforts. The Debtors proposed Alvarez & Marsal North America LLC as financial advisor and Kurtzman Carson Consultants LLC as notice, claims and balloting agent. When the Debtors filed for protection from their creditors, they listed assets between $100 million to $500 million each. According to Bloomberg News, the company is at least the 10th auto-parts maker sought Chapter 11 protection from its creditors this year. PRIMEDIA INC: Board Approves $5 Million Stock Repurchase Program ---------------------------------------------------------------- PRIMEDIA Inc.'s board of directors has authorized a program to repurchase up to $5 million of the company's common stock over the next 12 months. Under the terms of the repurchase program, the company may repurchase shares in open market purchases or through privately negotiated transactions. The company expects to use cash on hand to fund repurchases of its common stock. "This repurchase program demonstrates the confidence that our BOARD OF DIRECtors and senior management have in the future of PRIMEDIA and our belief that our shares are currently undervalued," Charles Stubbs, president and chief executive officer of PRIMEDIA. said. "It also underscores our confidence in PRIMEDIA's fundamental business position, our growth and earnings prospects and our ability to continue to generate strong cash flows for 2009 and forward." PRIMEDIA reported $0.20 EPS from continuing operations for the third quarter of 2008. The company expects to continue to pay a regular quarterly cash dividend of $0.07 per share for the foreseeable future. PRIMEDIA management will determine the timing and amount of any repurchase based on its evaluation of market conditions, business considerations and other factors. Stock repurchases under the program will be conducted in compliance with the safe harbor provisions of Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The program may be extended, modified, suspended or discontinued at any time, at the company's discretion. About PRIMEDIA Inc. Headquartered in Atlanta, PRIMEDIA Inc. (NYSE: PRM) -- http://www.primedia.com/-- through its Consumer Source Inc. operation, is a provider of advertising-supported consumer guides for the apartment and new home industries. Consumer Source publishes and distributes more than 38 million guides such as Apartment Guide and New Home Guide to approximately 60,000 U.S. locations each year through its proprietary distribution network, DistribuTech. The company also distributes category-specific content on its leading websites, including ApartmentGuide.com, NewHomeGuide.com and Rentals.com, a comprehensive single unit real estate rental site. At Sept. 30, 2008, the company's balance sheet showed total assets of $269.7 million and total liabilities of $393.6 million, resulting in a stockholders' deficit of $123.9 million. For three months ended Sept. 30, 2008, the company reported net income of $11.9 million compared with net income of $393.7 million for the same period in the previous year. For the nine months ended Sept. 30, 2008, the company reported net income of $27.4 million compared with $504.0 million for the same period in the previous year. As of Sept. 30, 2008, the company has cash and unused credit facilities of $94.3 million, compared to $106.4 million as of Dec. 31, 2007. Consolidated working capital, which includes current maturities of long-term debt, was a deficit of $3.5 million as of Sept. 30, 2008, compared to a deficit of $300,000 at Dec. 31, 2007. * * * As reported in the Troubled Company Reporter on Dec. 16, 2008, Standard & Poor's Ratings Services lowered its issue-level rating on Norcross, Georgia-based PRIMEDIA Inc.'s $350 million secured credit facility to 'BB-' (at the same level as the 'BB-' corporate credit rating on the company) from 'BB'. In addition, S&P revised the recovery rating on this debt to '3', indicating S&P's expectation of meaningful (50%-70%) recovery in the event of a payment default, from '2'. The credit facilities consist of a $250 million term loan B due 2014 and a $100 million revolving credit facility due 2013. PRIMEDIA INC: Has until January 2 to Submit NYSE Compliance Plan ---------------------------------------------------------------- PRIMEDIA Inc. received written notice from the New York Stock Exchange that the company does not satisfy one of the NYSE's standards for continued listing applicable to the company's common stock. The NYSE noted specifically that the company was "below criteria" for the NYSE's continued listing standards because its average total market capitalization was less than $75 million over a 30 trading-day period. Under applicable NYSE rules, the company has until Jan. 2, 2009, to submit a plan that demonstrates its ability to achieve compliance with the continued listing standards within 18 months of receipt of the notice. The company has notified the NYSE of the company's intent to submit a plan to remedy its non-compliance within the 18-month period. In the event that the NYSE does not accept the company's plan, PRIMEDIA's common stock would be subject to suspension and delisting proceedings. Neither delisting from the NYSE nor non- compliance with the NYSE's listing standards affects the company's compliance with the requirements of its credit facilities. Headquartered in Atlanta, PRIMEDIA Inc. (NYSE: PRM) -- http://www.primedia.com/-- through its Consumer Source Inc. operation, is a provider of advertising-supported consumer guides for the apartment and new home industries. Consumer Source publishes and distributes more than 38 million guides such as Apartment Guide and New Home Guide to approximately 60,000 U.S. locations each year through its proprietary distribution network, DistribuTech. The company also distributes category-specific content on its leading websites, including ApartmentGuide.com, NewHomeGuide.com and Rentals.com, a comprehensive single unit real estate rental site. At Sept. 30, 2008, the company's balance sheet showed total assets of $269.7 million and total liabilities of $393.6 million, resulting in a stockholders' deficit of $123.9 million. For three months ended Sept. 30, 2008, the company reported net income of $11.9 million compared with net income of $393.7 million for the same period in the previous year. For the nine months ended Sept. 30, 2008, the company reported net income of $27.4 million compared with $504.0 million for the same period in the previous year. As of Sept. 30, 2008, the company has cash and unused credit facilities of $94.3 million, compared to $106.4 million as of Dec. 31, 2007. Consolidated working capital, which includes current maturities of long-term debt, was a deficit of $3.5 million as of Sept. 30, 2008, compared to a deficit of $300,000 at Dec. 31, 2007. * * * As reported in the Troubled Company Reporter on Dec. 16, 2008, Standard & Poor's Ratings Services lowered its issue-level rating on Norcross, Georgia-based PRIMEDIA Inc.'s $350 million secured credit facility to 'BB-' (at the same level as the 'BB-' corporate credit rating on the company) from 'BB'. In addition, S&P revised the recovery rating on this debt to '3', indicating S&P's expectation of meaningful (50%-70%) recovery in the event of a payment default, from '2'. The credit facilities consist of a $250 million term loan B due 2014 and a $100 million revolving credit facility due 2013. RESIDENTIAL CAPITAL: GMAC's Private Debt Exchange Offers Expire --------------------------------------------------------------- GMAC Financial Services' separate private exchange offers and cash tender offers to purchase and exchange certain of its and its subsidiaries' and Residential Capital, LLC's outstanding notes, expired on December 26. According to reports, GMAC has remained silent on whether bondholders had approved a plan that would help provide GMAC with federal bailout money. Bloomberg.com citing a company spokeswoman related that the company is still tabulating the results of its debt exchange with bondholders. The auto lender, Bloomberg added, needed investors holding 75% of its $38 billion in bonds to exchange the notes and complete the transaction. On Dec. 16, 2008, GMAC disclosed in a regulatory filing with the Securities and Exchange Commission that it received significant additional participation in its separate private exchange offers and cash tender offers. On December 17, the preliminary results of GMAC LLC's separate private exchange offers and cash tender offers showed approximately $16.9 billion in aggregate principal amount or 58% of the outstanding GMAC old notes had been tendered in the GMAC offers and approximately $3.5 billion in aggregate principal amount or 38% of the outstanding ResCap old notes had been tendered in the ResCap offers. GMAC disclosed in a December 19 filing that in connection with its separate private exchange offers and cash tender offers, GMAC intends to undertake a transaction or series of transactions pursuant to which, concurrently with or shortly after completion of the GMAC offers and ResCap offers and receipt of all requisite approvals, GMAC would transfer ResCap old notes acquired by GMAC in the ResCap debt-for-debt exchange offers in an amount equal to at least 25% of ResCap's outstanding debt to ResCap in exchange for all or a majority of the non-voting common equity of IB Finance Holding Company LLC held by ResCap. IB Finance is the parent entity for GMAC Bank. Immediately after the IB Finance Transaction, ResCap would cancel the ResCap old notes acquired from GMAC. The completion of the IB Finance Transaction, if undertaken, would be subject to various conditions, including agreement on the terms of the IB Finance Transaction with ResCap, the completion of the GMAC offers and the ResCap offers and the receipt of a fairness opinion with respect to the IB Finance Transaction, and there can be no assurance that the IB Finance Transaction will be completed. Whether or not the IB Finance Transaction will constitute a "Succession Event" with respect to any credit default swap contracts related to the ResCap old notes or otherwise will be a function of the terms of the contracts between the applicable parties. Global Bondholder Services Corporation, the information agent for the offers, is available to assist investors with questions regarding the tender and exchange process or other logistical issues, at (866) 794-2200 (U.S. Toll- free). About ResCap Headquartered in Minneapolis, Minnesota, Residential Capital LLC -- http://www.rescapholdings.com/-- is the home mortgage unit of GMAC Financial Services, which is in turn wholly owned by GMAC LLC. 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 is the biggest lender to GM's 6,500 dealers nationwide, most of which get the financing they need to operate and buy vehicle inventory from the automaker, CNNMoney.com notes. 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. On December 24, 2008, GMAC Financial Services' application to become a bank holding company under the Bank Holding Company Act of 1956, as amended, was approved by the Board of Governors of the Federal Reserve System. In addition, GMAC Bank received approval from the Utah Department of Financial Institutions to convert to a state bank. As a bank holding company, GMAC will have expanded opportunities for funding and access to capital, which will provide increased flexibility and stability. For three months ended Sept. 30, 2008, the company reported net loss of $2.5 billion compared to net loss of $1.5 billion for the same period in the previous year. For nine months ended Sept. 30, 2008, the company incurred net loss of $5.5 billion compared to $1.6 billion for the same period in the previous year. At Sept. 30, 2008, GMAC's balance sheet showed total assets of $211.3 billion, total liabilities of $202.0 billion and members' equity of about $9.3 billion. * * * As reported in the Troubled Company Reporter on Dec. 15, 2008, 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. RESIDENTIAL CAPITAL: Treasury Announces $5-Bil. TARP Investment --------------------------------------------------------------- The U.S. Treasury Department said Dec. 29 it will purchase $5 billion in senior preferred equity with an 8% dividend from GMAC LLC as part of a broader program to assist the domestic automotive industry in becoming financially viable. Under the agreement, GMAC must be in compliance with the executive compensation and corporate governance requirements of Section 111 of the Emergency Economic Stabilization Act, as well as enhanced restrictions on executive compensation. GMAC will issue warrants to Treasury in the form of additional preferred equity in an amount equal to 5% of the preferred stock purchase that will pay a 9% dividend if exercised. Additionally, the Treasury has agreed to lend up to $1 billion to General Motors so that GM can participate in a rights offering at GMAC in support of GMAC's reorganization as a bank holding company. This commitment is in addition to the assistance previously announced for GM on Dec. 19. This loan will be exchangeable at any time, at Treasury's option, into the GMAC equity interests being acquired by GM in the rights offering. Furthermore, this loan will be secured and will have other terms and conditions as outlined in the attached term sheet. The ultimate level of funding under this facility will be dependent upon the level of current investor participation in the rights offering at GMAC. Treasury exercised this funding authority under the Emergency Economic Stabilization Act's Troubled Asset Relief Program (TARP). The preferred stock purchase and the loan to support GMAC's rights offering are part of an auto industry-focused TARP program that will include the $17.4 billion in assistance for domestic automakers announced earlier this month. Treasury will work with Congress and the President-elect's transition team on the appropriate timing for release of the remainder of the TARP funds to support financial market stability. About ResCap Headquartered in Minneapolis, Minnesota, Residential Capital LLC -- http://www.rescapholdings.com/-- is the home mortgage unit of GMAC Financial Services, which is in turn wholly owned by GMAC LLC. 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 is the biggest lender to GM's 6,500 dealers nationwide, most of which get the financing they need to operate and buy vehicle inventory from the automaker, CNNMoney.com notes. 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. On December 24, 2008, GMAC Financial Services' application to become a bank holding company under the Bank Holding Company Act of 1956, as amended, was approved by the Board of Governors of the Federal Reserve System. In addition, GMAC Bank received approval from the Utah Department of Financial Institutions to convert to a state bank. As a bank holding company, GMAC will have expanded opportunities for funding and access to capital, which will provide increased flexibility and stability. For three months ended Sept. 30, 2008, the company reported net loss of $2.5 billion compared to net loss of $1.5 billion for the same period in the previous year. For nine months ended Sept. 30, 2008, the company incurred net loss of $5.5 billion compared to $1.6 billion for the same period in the previous year. At Sept. 30, 2008, GMAC's balance sheet showed total assets of $211.3 billion, total liabilities of $202.0 billion and members' equity of about $9.3 billion. * * * As reported in the Troubled Company Reporter on Dec. 15, 2008, 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. 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. RICKEY BYRD: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Rickey L. Byrd 8205 Prospect St. Citronelle, AL 36522 Bankruptcy Case No.: 08-15111 Chapter 11 Petition Date: December 22, 2008 Court: United States Bankruptcy Southern District of Alabama (Mobile) Debtor's Counsel: Michael J. Harbin, Esq. The Southern Law Firm, LLC PO Box 851372 Mobile, AL 36685 Tel.: (251) 432-6931 (c)689-5569 Fax : (334) 432-2178 Email: mharbin370546809@aol.com Total Assets: $1,892,300.00 Total Debts: $2,041,311.00 The Debtor did not file a list of 20 largest unsecured creditors together with its petition. The petition was signed by Rickey L. Byrd. ROCK WELL: Files for Chapter 15 Bankruptcy in Wyoming ----------------------------------------------------- Bloomberg News reports that Rock Well Petroleum along with six of its affiliates made a voluntary filing under Chapter 15 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Wyoming (Case No. 08-20797). Bloomberg, citing papers filed with the Court, relates several events lead to this liquidity crisis including: -- a failed private placement of equity to Goldman Sachs International and convertible secured debt financing; -- a decrease in oil prices; and -- the contraction of available debt and equity financing from capital markets. Brent R. Cohen of Rothgerber Johnson & Lyons LLP, represents the company. Headquartered in Alberta, Canada, Rock Well Petroleum -- http://www.rockwellpetroleum.com/-- operates an oil development and production company. The company has operations around in the United States. RPM SOLUTIONS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: RPM Solutions, Inc. d/b/a Precision Tune Auto Care 4794 South Dixie Hwy., Suite A Dayton, OH 45439 Bankruptcy Case No.: 08-36529 Type of Business: The Debtor is engaged in the general auto repair business. Chapter 11 Petition Date: December 22, 2008 Court: United States Bankruptcy Court Southern District of Ohio (Dayton) Debtor's Counsel: Anne M. Frayne, Esq. 18 West First Street Dayton, OH 45402 Tel.: (937) 224-0077 Fax : (937) 224-5782 Email: annefrayne@myersandfrayne.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition and a list of the Debtor's largest unsecured creditors are available for free at: http://bankrupt.com/misc/ohsb08-36529.pdf The petition was signed by Jeffrey N. Caldwell, President of the company. SEA CONTAINERS: Sells Interests in Societe Bananiere ---------------------------------------------------- Sea Containers Ltd. obtained authority from the U.S. Bankruptcy Court for the District of Delaware to: (a) sell its majority share interest in Societe Bananiere de Motobe, S.A., to SBM's minority shareholder, S.A. SIPEF N.V.; and (b) assign to SIPEF certain intercompany receivables owed by SBM to SCL, pursuant to the terms of a sale agreement. Prior to the Petition Date, SCL acquired interests in several non-core business ventures, including a 70% equity interest in SBM, a banana plantation in the Ivory Coast. Subsequently, the Debtors decided to return their operational focus to their core marine container leasing business. Under the terms of the Sale Agreement, SCL would convey to SIPEF its 70% equity interest in SBM, and SIPEF would be substituted for SCL with respect to all claims and obligations between SCL and SBM, including SCL's right to collect certain SBM receivables. In exchange, SIPEF will assume any potential liabilities SCL may have in respect of SBM, and SCL will receive approximately $500,000 in cash. After accounting for SCL's share of closing costs and professional fees, the proposed transaction will yield a net recovery of around $400,000 in cash upon closing of the sale. The Debtors said they have obtained an offer to purchase SCL's interests in SBM that the Court should approve as reasonable in maximizing the value of the bankruptcy estates. The Debtors further submitted that the sale will allow SCL to immediately realize substantial value in exchange for its debt and equity interests in SBM. About Sea Containers Ltd. Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. are represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors is represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083. (Sea Containers Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEA CONTAINERS: Settles Trilogy Portfolio Claim for $4,300,000 -------------------------------------------------------------- Sea Containers Ltd. obtained approval from the U.S. Bankruptcy Court for the District of Delaware of a settlement with Trilogy Portfolio Company, LLC, to resolve a disputed claim. Trilogy filed Claim No. 130 for $4,777,782 against the Debtors in connection with a loan by Trilogy that was guaranteed by Sea Containers Ltd. for the purchase of SeaCat Scotland. The settlement provides for an allowed Class 2B SCL Other Unsecured Claim in the amount of $4,350,444 in full, final and complete satisfaction of the claim. The Debtors submit that the settlement is in the best interest of their creditors and bankruptcy estates because it falls within the lowest point in the range of potential outcomes if litigation were commenced with respect to the claim. About Sea Containers Ltd. Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. are represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors is represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083. (Sea Containers Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEA CONTAINERS: Assigns $2.8MM Intercompany Receivable ------------------------------------------------------ Sea Containers Ltd. and its debtor affiliates obtained permission from the U.S. Bankruptcy Court for the District of Delaware to assign to Sea Containers Brasil Ltda. certain intercompany receivables owed to Sea Containers Ltd. by Brasiluvas Agricola Ltda. The assignment is sought in connection with the sale of Brasiluvas to Agropecuaria Labrunier Ltda. Brasiluvas operates a 480-hectare grape farm in Brazil. SC Brasil is the direct parent of Brasiluvas, and holds all but one of Brasiluvas' shares. Since 2004, Brasiluvas has experienced losses due to diminished grape production and adverse foreign exchange movements. To ensure that Brasiluvas maintained sufficient liquidity, SCL provided $2,848,000 of intercompany debt to Brasiluvas. However, despite capital infusion, Brasiluvas continued to experience negative earnings. In light of its deteriorating financial condition and as part of SCL's global restructuring efforts, SCL decided to sell Brasiluvas. If the intercompany receivable is not transferred to SC Brasil, it is unlikely that Labrunier would be willing to purchase Brasiluvas' stock, the Debtors contend. They assert that absent the sale, Brasiluvas would probably be wound-down and liquidated, which would most likely result in additional professional fees and related expenses that will further reduce the net proceeds available for distribution to SCL. About Sea Containers Ltd. Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. are represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors is represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083. (Sea Containers Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEA CONTAINERS: To Pay Goldman Sachs $17.5MM to Settle Claims ------------------------------------------------------------- Sea Containers Ltd., and its affiliated debtors obtained approval from the U.S. Bankruptcy Court for the District of Delaware of a settlement agreement with Goldman Sachs International Bank, Sea Containers Ltd., Sea Containers British Isles Limited, Hoverspeed Italia S.r.l. and Sea Containers Italia Holdings S.r.l. to resolve certain Goldman Sachs claims held in connection with prepetition guarantees issued by SCL, SCBI and SCIH to finance the purchase of ferry vessels owned and operated by certain SCL subsidiaries. In light of Goldman Sachs' projected recovery and the risks of delaying resolutions of its claims, SCL has agreed to fully and finally resolve the claims through a cash payment of $17,500,000. The parties also agree that: -- the standstill period will be extended from October 7, 2008, until the earlier of: * the date the order approving the settlement becomes final and non-appealable; and * December 31, 2008; -- Goldman Sachs will assign to SCBI all residual claims it has or may have against Hoverspeed and SCIH under or in connection with a loan by SC Italia for the construction of a fast ferry, SuperSeacat 4. In consideration for the assignment, SCBI agrees to pay to Goldman Sachs, in full and final settlement of all amounts arising under the SSC4 Loan, $15,900,000; -- Goldman Sachs will assign to SCL all residual claims it has or may have against Hoverspeed and SCIH under or in connection with a loan by SC Italia for the construction of a fast ferry, SuperSeacat 3. In consideration for the assignment, SCL agrees to pay to Goldman Sachs, in full and final settlement of all amounts arising under the SSC3 Loan, $1,600,000; -- the parties will grant mutual global releases in connection with the SSC3 Loan, SSC4 Loan and other related agreement between them; and -- Goldman Sachs' Claim Nos. 79 and 80 will be disallowed in their entirety, discharged and expunged for all purposes. The Debtors believe that the settlement benefits all unsecured creditors, and is well within a range of litigation outcomes that could result in a substantially worse outcome for the bankruptcy estates. In a declaration supporting the request, Laura Barlow -- the Debtors' chief financial officer and chief restructuring officer -- avers that absent a settlement, Goldman Sachs has threatened to enforce its liens on account of the SSC4 Loan guarantees by instituting insolvency proceedings against SCBI in the United Kingdom, including requesting appointment of a liquidator, which could result in a significant delay in repatriations and additional costs. "I understand that if GS were to force SCBI to file for bankruptcy, a liquidator appointed to the SCBI insolvency proceedings could assert its intercompany claims against the Debtors and other non-debtor subsidiaries, which could trigger insolvencies of several non-debtor subsidiaries," Ms. Barlow says. "I believe that if such an event were to occur, the Debtors' standstill agreement with their non-debtor subsidiaries may cease to be effective, which would likely have an adverse impact on the orderly restructuring of and wind-down of SCL and its non-debtor subsidiaries," she notes. In addition, a contested liquidation of SCBI could result in high costs and fees, including payment of a liquidator's fees, and thus, reducing the funds available for repatriation to the Debtors' bankruptcy estates, Ms. Barlow points out. About Sea Containers Ltd. Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. is represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors is represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083. (Sea Containers Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SHEARIN FAMILY: Seeks to Obtain $10,600,000 Loan from GreenHawk --------------------------------------------------------------- Shearin Family Investments, LLC asks the U.S. Bankruptcy Court for the Eastern District of North Carolina for authority to enter into a postpetition financing arrangement with GreenHawk Partners, LLC. As reported in the Troubled Company Reporter, RBC Bank has loaned the Debtor approximately $30 million to acquire and construct the first phase of The Nautical Club Project, a waterfront, high-rise condominium project in Indian Beach, Carteret County, North Carolina. GreenHawk has agreed to provide financing in the maximum amount of $10,600,000 in order to complete the first phase of The Nautical Club Project, including the necessary sewer treatment facility and site work. The terms and conditions of the proposed DIP Financing are: Amount : $10,600,000 Term : 2 years Repayment : Sales proceeds of collateral with all principal, interest, fees and normal and customary Lender expenses, including counsel fees, to be retired by the end of term Interest : Fixed at 15.5% compounded on a monthly basis. Origination: 2.5% of principal loan amaount plus usual Fee customary legal and professional fees. The DIP Financing will be secured by (i) a first-priority lien pursuant to Sec. 364(d) that is senior to the RBC Deeds of Trust, including any post-petition liens, and any liens held by Centurion, and (ii) a second- or third-priority lien, as applicable, pursuant to Sec. 364(c), on the Debtor's remaining property, subject to a carve-out for the administrative expenses of the bankruptcy estate. The commitment of the Lender with respect to the DIP Financing will expire at 11:59 p.m. on Dec. 31, 2008, unless a nonappealable Bankruptcy Court order has been entered authorizing this DIP Financing, or 2) the Lender, in its sole and exclusive discretion, extends the term sheet. The Debtor tells the court that the only funds RBC has advanced under the RBC order are amounts to pay insurance and utility costs. No advances have been made with respect to the completion of construction of the Project. Faced with the prospect of a Project shut-down due the delay in RBC's decision to fund the Project, the Debtor sought and received a preliminary offer from GreenHawk to fund all the necessary expenses to complete construction the first phase of the Project, including the necessary sewer treatment facility and the site work. The Debtor tells the Court that without the postpetition financing provided by GreenHawk, unless RBC makes a commitment to fund, the Debtor will be unable to fund the completion of the first phase of the Project, and the Debtor's ability to effectively reorganize will be at risk. In addition, the Debtor relates that the existing secured creditors, including RBC, are adequately protected because the value of the property subsequent to completion of construction of the first phase of the Project and to the construction of the wastewater treatment plan exceeds the aggregate amount owed to GreenHawk and all of the existing secured creditors. Based in Rocky Mount, North Carolina, Shearin Family Investments, LLC owns and operates a condominium resort in Carteret County, in North Carolina. The company filed for Chapter 11 relief on Oct. 13, 2008 (Bankr. E.D. N.C. Case No. 08-07082). Amy M. Faber, Esq., at Stubbs & Perdue, P.A., and Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A., represent the Debtor as counsel. When the Debtor filed for protection from its creditors, it listed assets of $46,327,546 and debts of $49,260,007. SPECIAL DEVICES: Can Access $3,000,000 Wayzata DIP Facility ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has authorized Special Devices, Inc., to access $3 million of a $22.5 million DIP loan arranged by Wayzata Opportunities Fund LLC, Bloomberg's Bill Rochelle reports. The Court will consider final approval of the loan, which would allow the Debtor to access the entire $22.5-million secured lending facility, at a hearing on January 6. Moorpark, California-based Special Devices Inc. -- http://www.specialdevices.com/-- was founded in the 1950s to manufacture explosives for film special effects, also makes initiators for the defense and mining industries. The company makes a component that causes car air-bags to deploy. Special Devices filed for Chapter 11 protection on December 15, 2008 (Bankr. D. Del. 08-13312) after failing to refinance $73.6 million in debt. The Hon. Mary F. Walrath oversees the case. Jason M. Madron, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serve as the Debtor's counsel. Gibson, Dunn & Crutcher LLP acts as special corporate counsel, and Kurztman Carson Consultants LLC acts as claims agent. When it filed for bankruptcy, the Debtor estimated both assets and debts to be between $50 million and $100 million. SPECIAL DEVICES: Taps Brincko Associates as Financial Advisor ------------------------------------------------------------- Special Devices Inc. asks the United States Bankruptcy Court for the District of Delaware for permission to employ Brincko Associates Inc. as its financial advisor. The firm will: a) prepare the schedules of assets and liabilities for the Debtor; b) prepare the statement of financial affairs for the Debtor; c) provide accounting department with assistance and guidance with respect to Chapter 11 protocol and policies; d) assist with the preparation of the Debtor's monthly operating reports; and e) provide other financial advisory services in this Chapter 11 case as requested by the Debtor, its restructuring advisor(s), or its counsel. The firm received a $45,000 retainer fee from the Debtor before it filed for bankruptcy. The firm's professionals and their compensation rates are: Professional Hourly Rate ------------ ----------- John P. Brincko $445 Thora Thoroddsen $295 Other Professionals $125-$345 Administrative Staff $50 John P. Brincko, president of the firm, assures the Court that the firm does not hold any interests adverse to the Debtor's estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Moorpark, California-based Special Devices Inc. -- http://www.specialdevices.com/-- was founded in the 1950s to manufacture explosives for film special effects, also makes initiators for the defense and mining industries. The company makes a component that causes car air-bags to deploy. Special Devices filed for Chapter 11 protection on December 15, 2008 (Bankr. D. Del. 08-13312) after failing to refinance $73.6 million in debt. The Hon. Mary F. Walrath oversees the case. Jason M. Madron, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serve as the Debtor's counsel. Gibson, Dunn & Crutcher LLP acts as special corporate counsel, and Kurztman Carson Consultants LLC acts as claims agent. The U.S. Trustee for Region 3 appointed five creditors to serve on an Official Committee of Unsecured Creditors for the Debtor. When it filed for bankruptcy, the Debtor estimated both assets and debts to be between $50 million and $100 million. SPO MEDICAL: Sept. 30 Balance Sheet Upside Down by $287,000 ----------------------------------------------------------- SPO Medical Inc.'s September 30, 2008, balance sheet showed total assets of $3,163,000, total liabilities of $2,937,000, and accrued severance pay of $513,000, resulting in total stockholders' deficit of $287,000. The company's operations for the nine and three months ended September 30, 2008, resulted in a net loss of $1,661,000 and $588,000 respectively. The company's ability to continue operating as a "going concern" is dependent on its ability to raise additional working capital on an immediate basis, Michael Braunold, president and chief executive officer, and Jeff Feuer, chief financial officer, disclosed in a regulatory filing with the Securities and Exchange Commission. "Management is continuing in its efforts to secure funds for the company's continued operation. Management's plans in this regard include attempting to raise additional cash from current and potential stockholders and through sales of its existing inventories." "We need to raise additional funds on an immediate basis in order to meet our operating requirements and to fulfill our business plan. Pending the raise of additional capital, during the quarter ended September 30, 2008, we have significantly curtailed our product design, development and marketing efforts in an attempt to conserve our cash resources. As of November 18, 2008, we had 14 employees working on a full time basis. We have been forced to delay payments to most of our vendors, defer, in part, salaries for management and curtail product development plans. If we are unable to raise needed capital on an immediate basis, it may be necessary to lay-off additional personnel. No assurance can be given that we will be able to raise the needed capital. These conditions raise substantial doubt about our ability to continue as a going concern." A full-text copy of the company's quarterly report is available for free at http://researcharchives.com/t/s?36f6 About SPO Medical SPO Medical Inc. is engaged in the design, development and marketing of non-invasive pulse oximetry technologies to measure blood oxygen saturation and heart rate. The company has developed and patented proprietary technology that enables the measurement of heart rate and oxygen saturation levels in the blood which is known as Reflectance Pulse Oximetry (RPO). SPRINT NEXTEL: Reduces Virgin Mobile's Dec. 2008 Usage Payments --------------------------------------------------------------- Virgin Mobile USA, L.P., the operating partnership of Virgin Mobile USA, Inc., entered into sixth and seventh amendments to the company's Amended and Restated PCS Services Agreement dated October 16, 2007, with Sprint Spectrum, L.P., an affiliate of Sprint Nextel Corporation. Under the terms of the Sixth Amendment, the company's required payment for the year ended December 31, 2008, will decrease from $320 million to $318 million, and Sprint Nextel will provide the company with an additional network usage credit of $2.00 for each gross additional customer between October 1, 2008, and December 31, 2008, which will be accretive to the credit of $2.50 and not subject to the $10 million limit. Under the Seventh Amendment, beginning in 2009, the company will no longer be subject to minimum annual payments and will pay fixed rates for voice, messaging and data traffic that are lower than rates applicable in 2008. The company may benefit from additional discounts to these rates in 2010, with the degree of discount based upon the total payments made for 2009 -- including payments pursuant to the Amended and Restated Trademark License Agreement between the company and Sprint Communications company, L.P., an affiliate of Sprint Nextel, dated October 16, 2007. The company and Sprint Nextel will negotiate rates for 2011 and beyond, but if they fail to reach terms, the rates for 2010 will apply. The parties entered into a fifth amendment to the PCS Services Agreement in June. The Fifth Amendment required the company to pay Sprint Nextel at least $320 million, $370 million and $420 million during the years ended December 31, 2008, 2009 and 2010, respectively, for wireless network services, including voice, messaging and data traffic. In addition, the Fifth Amendment obligated Sprint Nextel to pay the company a $2.50 network usage credit for each gross additional customer between July 1, 2008 and December 31, 2009, up to a maximum of $10 million. A full-text copy of the Sixth Amendment to Amended and Restated PCS Services Agreement (as amended, supplemented or otherwise modified from time to time), dated December 22, 2008 by and between Virgin Mobile USA, Inc. and Sprint Spectrum L.P., is available at no charge at: http://ResearchArchives.com/t/s?36f4 A full-text copy of the Seventh Amendment to Amended and Restated PCS Services Agreement (as amended, supplemented or otherwise modified from time to time), dated December 22, 2008 by and between Virgin Mobile USA, Inc. and Sprint Spectrum L.P., is available at no charge at: http://ResearchArchives.com/t/s?36f5 About Virgin Mobile Headquartered in Warren, New Jersey, Virgin Mobile USA Inc. (NYSE: VM) -- http://www.virginmobileusa.com/-- is a provider of wireless, pay-as-you-go communications services without annual contracts. Voice pricing plans range from monthly options with unlimited nights and weekends to by-the-minute offers, allowing consumers to adjust how and what they pay according to their needs. Virgin Mobiles full slate of handsets, including the Wild Card, Super Slice and Cyclops, are available at top retailers in more than 35,000 locations nationwide and online, with Top-Up cards available at more than 130,000 locations. Virgin Mobile USA was founded as a joint venture between Sprint Nextel and the Virgin Group, and launched its service nationally in July 2002. As of September 30, 2008, the company served 5.2 million customers. According to Virgin Mobile's unaudited balance sheet on Sept. 30, 2008, the company has $395,989,000 in assets, $695,081,000 in liabilities and $355,482,000 stockholders' deficit. As reported by the Troubled Company Reporter on December 5, 2008, Virgin Mobile has said that, based on its expected cash flows from operations and available funds from its revolving credit facility, management believes that the company has the ability to finance its projected operating, investing and financing requirements of existing operations and planned customer growth through at least September 30, 2009. In June, the company entered into a Second Amendment to its Revolving Credit Facility. The amendment increased the Virgin Group's lending commitment from $75 million to $100 million and added SK Telecom as a new lender with a lending commitment of $35 million. In October 2008, the company borrowed an additional $20.0 million under the Revolving Credit Facility, bringing the total amount outstanding under the Revolving Credit Facility to $75.0 million. About Sprint Nextel Based in Overland Park, Kansas, Sprint Nextel Corp. (NYSE: S) -- http://www.sprint.com/-- is the third largest national wireless provider behind AT&T and Verizon, according to Moody's Investors Service. Sprint Nextel offers a comprehensive range of wireless and wireline communications services and is widely recognized for developing, engineering and deploying innovative technologies, including two wireless networks serving nearly 51 million customers at the end of the third quarter 2008; industry-leading mobile data services; instant national and international walkie- talkie capabilities; and a global Tier 1 Internet backbone. In the third quarter 2008, Sprint Nextel incurred a net loss of $326 million compared to net income of $64 million in the third quarter 2007. The company incurred a net loss of $1.2 billion in the year-to-date period 2008 compared to a net loss of $128 million in the year-to-date period 2007, primarily due to a decline in its Wireless segment earnings. The company's balance sheets as of September 30, 2008, show $61.8 billion in total assets, including $4.1 billion in cash and cash equivalents; $40.7 billion in total liabilities; and $29.5 billion in accumulated deficit. Over the past several months, Sprint Nextel has been reviewing its overall business strategy, including its sales, distribution and marketing plans, and working to streamline operations by changing the internal organizational structure of the company. As part of this process, Sprint Nextel has named new executives to lead key elements of the business. The process is ongoing and is expected to be largely completed by the end of the year and fully operational by early 2009. The company said as of September 30, 2008, it was in compliance with all restrictive and financial covenants associated with all of its borrowings. On November 3, 2008, the company amended the terms of its revolving bank credit facility. The company noted that it is required to maintain a ratio of total indebtedness to trailing four quarter earnings before interest, taxes, depreciation, amortization and certain other nonrecurring charges of no more than 3.5 to 1.0 under its credit facilities. As of September 30, 2008, the ratio was 3.1 to 1.0 as compared to 2.5 to 1.0 as of December 31, 2007. The credit facilities also required that certain indebtedness and liens of the company's controlled subsidiaries -- other than Nextel Communications, Inc. and Sprint Capital -- not exceed in the aggregate 15% of its consolidated shareholders' equity or about $3.2 billion as of September 30, 2008. The relevant controlled subsidiaries had approximately $900 million in debt and liens subject to this covenant as of September 30, 2008. The maturity dates of the loans under the credit facilities may accelerate if the company does not comply with the covenants. The company is also obligated to repay the loans if certain change of control events occur. * * * As reported by the Troubled Company Reporter on December 12, 2008, Moody's Investors Service downgraded Sprint Nextel's senior unsecured debt rating to Ba2 from Baa3 and assigned a Corporate Family Rating of Ba1. As part of the rating action, Moody's has downgraded the short-term rating of Sprint Nextel to Not Prime from Prime-3 and assigned a speculative grade liquidity rating of SGL-1. In addition, Moody's upgraded Sprint Nextel's senior unsecured revolving credit facility to Baa2 to reflect the recent addition of guarantees. The outlook for Sprint Nextel's ratings is negative. The downgrade of Sprint Nextel's rating reflects the company's significantly weakened market position among the national wireless carriers and its continuing challenges in turning around its wireless operations amid intense competition and weak economic conditions. While subscriber churn has improved from year-ago levels, Moody's believes the company's efforts to turn subscriber growth positive will take longer than previously anticipated as the company faces strong competition from AT&T and Verizon in the post pay subscriber segment and from flat rate service providers in the prepaid segment. As a result, Moody's expects Sprint Nextel's operating cash flows and subscriber counts to deteriorate until the second half of 2009, when Moody's expect the company's market share and wireless operating cash flows to stabilize. SRA INC: Case Summary & List of Unsecured Creditors --------------------------------------------------- Debtor: SRA, Inc. 50 Cavalier Blvd. Florence, KY 41042 Bankruptcy Case No.: 08-22384 Chapter 11 Petition Date: November 21, 2008 Court: United States Bankruptcy Court Eastern District of Kentucky (Covington) Judge: William S. Howard Debtor's Counsel: Jonathan M. Bruce, Esq. 300 Madison Avenue, Suite 200 Covington, KY 41011 Tel: (859) 431-5297 Email: jonermb@yahoo.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition and a list of the Debtor's unsecured creditors are available for free at: http://bankrupt.com/misc/kyeb08-22384.pdf SYNTAX-BRILLIAN: Court Suspends Services of Examiner ---------------------------------------------------- The Hon. Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware has ordered that the services of James S. Feltman as Court-appointed examiner in Syntax-Brillian Corp., and its debtor-affiliates' bankruptcy cases, and all agents and professionals acting on his behalf are suspended, effective as of Oct. 22, 2008. At the expense of the Debtors' estates, the Examiner will provide copies of any documents, memoranda, analyses, spreadsheets, data compilations, chronologies or other file materials he or his agents may have related to his investigation to the Debtors, or the Debtors's designees, at the request of the Debtors, and to the counsel for the Official Committee of Unsecured Creditors, at the request of the Committee. The Court approved on Sept. 3, 2008, the application of Roberta A. DeAngelis, Acting U.S. Trustee for Region 3, for the appointment of Mr. Feltman as Examiner in the Debtor's bankruptcy cases. As reported on Aug. 1, 2008, by the Troubled Company Reporter, the U.S. Trustee asked Judge Shannon to appoint a Chapter 11 Examiner to investigate: i) the facts and circumstances surrounding the sudden decline in the Debtors' assets; ii) the bona fides and necessity of the proposed sale of the substantially all of the Debtors' assets to TCV; iii) the relationships among and between the Debtors, TCV Group, Kolin, DigiMedia Technology Co., Ltd., including former and present principals, officers and directors; and iv) the ability and inclination of the Debtor's current management to probe and pursue potential claims and causes of action against the Debtors' former officers including directors who selected the Debtor's current chief executive officer and chief financial officer. Mr. Feltman made an oral presentation to the Court on Oct. 6, 2008. The Court indicated that parties in interest will not have the opportunity at that hearing to examine Mr. Feltman. About Syntax-Brillian Based in Tempe, Arizona, Syntax-Brillian Corporation (Nasdaq: BRLC) -- http://www.syntaxbrillian.com/-- and its affiliated debtors, Syntax-Brillian SPE, Inc. and Syntax Groups Corp. design, develop, and distribute high-definition televisions (HDTVs) utilizing liquid crystal display (LCD) and, formerly, liquid crystal (LCoS) technologies. The Debtors sell their HDTVs under the Olevia brand name. SBC is also the sole shareholder of Vivitar Corp., a suplier of film cameras and a line of digital imaging products, including digital cameras. The Debtors filed separate petitions for Chapter 11 relief on July 8, 2008 (Bankr. D. Del. Lead Case No. 08-11407). Nancy A. Mitchell, Esq., Allen G. Kadish, Esq., and John W. Weiss, Esq., at Greenberg Traurig LLP in New York, represent the Debtors as counsel. Victoria Counihan, Esq., at Greenburg Traurig LLP in Wilmington, Delaware, represents the Debtors as Delaware counsel. Five members compose the Official Committee of Unsecured Creditors. Epiq Bankruptcy Solutions, LLC is the Debtors' balloting, notice, and claims agent. Syntax-Brillian cut a deal to sell its business assets to Olevia International Group LLC. On Sept. 10, 2008, OIG told the Bankruptcy Court that it won't pursue the deal, contending that the Debtors irreparably breached various covenants and representations contained in the Purchase Agreement, causing various Closing Conditions to fail, and rendering it unable to comply with its obligations under the Purchase Agreement. OIG also accused the Debtors of violating their sale contract by losing business from Target Corp., the Debtors' main customer. The following day, the Debtors filed a lawsuit asking the Court to compel Olevia International to complete the purchase. On Oct. 10. the Bankruptcy Court denied OIG's emergency request to excuse it from its obligations. OIG has taken an appeal of that order. When the Debtors filed for protection from their creditors, they listed total assets of $175,714,000 and total debts of $259,389,000. TEKNI-PLEX: Noteholders Relax Covenants Under 2012 & 2013 Notes --------------------------------------------------------------- Tekni-Plex, Inc., completed on December 5, 2008, consent solicitations related to its outstanding 10.875% Senior Secured Notes due 2012 and its 8.75% Senior Secured Notes due 2013. The company was soliciting consents to waive and amend certain covenants in (i) the Indenture, dated as of June 10, 2005, by and among the company, each of the guarantors party and HSBC Bank USA, National Association, as trustee, pursuant to which the 2012 Notes were issued; and (ii) the Indenture, dated as of November 21, 2003, by and among the company, the Guarantors and the Trustee, pursuant to which the 2013 Notes were issued. The Consent Solicitations expired at 5:00 p.m. New York City time on December 2, 2008, and at that time the company had received consents to the Waivers, Supplemental Indentures and Amended and Restated Intercreditor Agreement from the holders of a majority in aggregate principal amount of the 2012 Notes and the 2013 Notes (other than Notes disregarded in accordance with the terms of the Indentures governing the Notes). The company paid a $1,317,710 consent fee, pro-rata, to those holders of Notes who delivered valid unrevoked consents in the Consent Solicitations. On the same day, the company, the Guarantors and the Trustee entered into waivers under the 2012 and 2013 Indentures. The Waivers provide for: (i) a waiver of the company's failure to comply with the Indentures which require the company to file an Annual Report on Form 10-K for the fiscal year ended June 27, 2008, and a Quarterly Report on Form 10-Q for the fiscal period ended September 26, 2008, with the Securities and Exchange Commission; and (ii) a waiver of the company's failure to comply with the Indentures which require the company to deliver an Officers' Certificate to the Trustee in connection with its fiscal year ended June 27, 2008 stating that, among other things, the company is not in default in the performance or observance of any of the terms, provisions and conditions of the Indentures or the Security Documents. The company, the Guarantors and the Trustee also entered into Supplemental Indentures under the 2012 Indenture and the 2013 Indentures. The Supplemental Indentures provide for a suspension through December 30, 2009, of the company's obligations under each of the Indentures to file Quarterly and Annual Reports on Forms 10-Q and 10-K, respectively, and Current Reports on Form 8-K with the SEC. During the Filing Suspension Period, the company will use its reasonable efforts to provide the Trustee and the holders of the Notes with certain unaudited quarterly and annual financial information. The company, the Guarantors, the lender-parties and the Trustee also entered into an amendment to the Access, Use and Intercreditor Agreement, dated as of June 10, 2005, to reflect the incurrence by the company of a new $15,000,000 term loan secured by the Collateral in favor of Citicorp USA, Inc. and the lender- parties. 2009 Liquidity As reported by the Troubled Company Reporter, Tekni-Plex has entered into a series of agreements in November that management believes will provide the company with sufficient liquidity to execute its business plan for the fiscal year 2009: -- The company entered into a second amendment and restatement of its Credit Agreement, dated as of June 10, 2005, among the company, the lenders and issuers party thereto, Citicorp USA, Inc., as Administrative Agent, and General Electric Capital Corporation, as Syndication Agent. The Second Amended and Restated Credit Agreement is an asset based, revolving credit facility in the maximum amount of $110 million. Among others, the amendment extends the scheduled maturity date by two years to February 2012; -- The company entered into a Junior Lien Credit Agreement with OCM Tekni-Plex Holdings II, L.P., an affiliate of OCM Tekni-Plex Holdings, L.P., the largest holder of the company's common stock. The Junior Lien Credit Agreement provides for a five-year term loan in the amount of $15,000,000, which is guaranteed by the company's domestic subsidiaries and secured, on a junior basis, by the collateral pledged in connection with the Second Amended and Restated Credit Agreement; and -- Tekni-Plex Europe NV, an indirect subsidiary of the company incorporated under the laws of Belgium, entered into a Term Loan Agreement with OCM Luxembourg Tekni-Plex Holdings S.a.r.l. The TPE Loan Agreement provides for a five-year unsecured term loan in the amount of EUR26,361,347.18 repayable at maturity. Tekni-Plex has informed the Securities and Exchange Commission that it won't be able to file its financial report for period ended Sept. 26, 2008, by the prescribed due date because its board is still in the process of conducting their internal investigation on the company's financial records. Accounting Errors and Irregularities In June 2008, the company disclosed that its board of directors initiated an internal investigation into allegations by a current employee that, for the fiscal years ending 2000 to 2006, the company may have incorrectly recorded certain inventory and accounts receivables in the Colorite Plastics company, a division of the company. The board subsequently expanded the scope of the investigation beyond the Colorite division to determine whether any improper accounting practices occurred in other divisions of the company. Information gathered to date in the course of the investigation indicates that the company's issued financial statements for the fiscal years ending 2000-2007 contain certain accounting errors and irregularities. Although not all relevant facts are known at this time and the investigation is continuing, and although the company cannot estimate at this time when the investigation will conclude, after reviewing the information gathered in the investigation to date, the board determined on Nov. 10, 2008, that the financial statements issued or filed by the company relating to the mentioned prior fiscal periods, and relating to the fiscal periods ending on Sept. 28, 2007, Dec. 28, 2007, and March 28, 2008, to the extent they rely on financial statements for prior periods, must not be relied upon. The board has discussed these matters with BDO Seidman, LLP, the company's independent registered public accounting firm. About Tekni-Plex Inc. Based in Coppell, Texas, Tekni-Plex Inc. -- http://www.tekni- plex.com/ -- manufactures packaging, packaging products and materials as well as tubing products. The company primarily serves the food, healthcare and consumer markets. It has built leadership positions in its core markets, and focuses on vertically integrated production of highly specialized products. Tekni-Plex has operations in the United States, Europe, China, Argentina and Canada. TEKNI-PLEX: Mesterharm Steps Down as Restructuring Officer ---------------------------------------------------------- On December 5, 2008, James A. Mesterharm notified Tekni-Plex, Inc., that effective as of December 1, 2008, he resigned his position as Chief Restructuring Officer of the company. Mr. Mesterharm has agreed to continue to provide services to the company as a restructuring advisor in accordance with the terms of that certain engagement letter dated as of December 17, 2007, between AP Services, LLC, a Delaware limited liability company and the company. On the same day, the company's Board of Directors appointed Edward Goldberg to serve as the company's Chief Operating Officer. Mr. Goldberg, 59, began serving as Chief Operating Officer of the company commencing December 5, 2008. Mr. Goldberg's employment as an officer of the company does not have a fixed term and will continue until terminated by either Mr. Goldberg or the company. There is no family relationship between Mr. Goldberg and any director, executive officer, or person nominated or chosen by the company to become a director or executive officer. Prior to his appointment as Chief Operating Officer, Mr. Goldberg was a Senior Vice President of the company, in charge of the Colorite business line. Prior to August, 2008, Mr. Goldberg managed the company's packaging business. He joined the company in 2001 and served as a director of the company from 2005 until May 30, 2008. Prior to joining the company he worked for Procter & Gamble and The Scott Paper company. He received his BS and MS degrees in Chemical Engineering from Rensselaer Polytechnic Institute in 1971. There have been no transactions since the beginning of the company's last fiscal year, nor are any transactions currently proposed, in which the company was or is to be a participant and the amount involved exceeds $120,000, and in which Mr. Goldberg had or will have a direct or indirect material interest. Accounting Errors and Irregularities In June 2008, the company disclosed that its board of directors initiated an internal investigation into allegations by a current employee that, for the fiscal years ending 2000 to 2006, the company may have incorrectly recorded certain inventory and accounts receivables in the Colorite Plastics company, a division of the company. The board subsequently expanded the scope of the investigation beyond the Colorite division to determine whether any improper accounting practices occurred in other divisions of the company. Information gathered to date in the course of the investigation indicates that the company's issued financial statements for the fiscal years ending 2000-2007 contain certain accounting errors and irregularities. Although not all relevant facts are known at this time and the investigation is continuing, and although the company cannot estimate at this time when the investigation will conclude, after reviewing the information gathered in the investigation to date, the board determined on Nov. 10, 2008, that the financial statements issued or filed by the company relating to the mentioned prior fiscal periods, and relating to the fiscal periods ending on Sept. 28, 2007, Dec. 28, 2007, and March 28, 2008, to the extent they rely on financial statements for prior periods, must not be relied upon. The board has discussed these matters with BDO Seidman, LLP, the company's independent registered public accounting firm. About Tekni-Plex Inc. Based in Coppell, Texas, Tekni-Plex Inc. -- http://www.tekni- plex.com/ -- manufactures packaging, packaging products and materials as well as tubing products. The company primarily serves the food, healthcare and consumer markets. It has built leadership positions in its core markets, and focuses on vertically integrated production of highly specialized products. Tekni-Plex has operations in the United States, Europe, China, Argentina and Canada. TERRA NOSTRA: Court Approves Involuntary Ch. 11 Petition -------------------------------------------------------- Bloomberg's Bill Rochelle reports that Terra Nostra Resources Corp. did not oppose the petition by its creditors owed $18.8 million to send it to Chapter 11 bankruptcy. Accordingly, the U.S. Bankruptcy Court for the Southern District of New York approved the involuntary Chapter 11 petition and directed the appointment of a Chapter 11 Trustee, who'll handle Terra Nostra's affairs going forward. The case is In re Terra Nostra Resources Corp., 08-14708, U.S. Bankruptcy Court, Southern District of New York (Manhattan). Headquartered in Pasadena, California, Terra Nostra Resources Corp. (OTCBB:TNRO) owns a 51% interestin two China Joint Ventures companies in the strategic copper and stainless steel industries. Creditors filed an involuntary Chapter 11 petition on Nov. 25, 2008 (Bankr. S.D. N.Y. Case No. 08-14708). Karen Ostad, Esq., at Morrison & Foerster LLP, represents the petitioning creditors. TOUSA INC: Unsec. Creditors Defeat Lenders' Dismissal Motion ------------------------------------------------------------ Judge John K. Olson of the U.S. Bankruptcy Court for the Southern District of Florida denied the request of the secured creditors of Tousa Inc. to dismiss an amended lawsuit filed by the official committee of unsecured creditors of the Debtor. According to Bloomberg's Bill Rochelle, the adversary proceeding contends that Tousa improperly required its operating units to guarantee debt as part of a July 2007 bailout and refinancing of a joint venture in a homebuilder named Transeastern Properties Inc. The subordinated debt holders succeeded in knocking out two of the claims against them, Mr. Rochelle reports. Trial will commence between the weeks of July 13 and July 20, 2009. Parties' Request for Dismissal A. Citicorp Citicorp North America, Inc., as administrative agent for the lenders under Tousa's revolving credit facility, insists that the Amended Complaint consistently failed to, among other things, distinguish among types of conveyances, and allege the categories of transfers it is challenging. "The Committee lumps all of those transfers and obligations into the buckets of New Lender Claims and Lien Transfers" and "Late 2007 Avoidable Claim and Lien Transfers," Citicorp argued. "If the allegation in the Original Complaint that the July 2007 Amendment was a new loan was found to be unpersuasive, piling on additional amendments does not help," Allan E. Wulbern, Esq., at Smith Hulsey & Busey, in Jacksonville, Florida, contends, on behalf of Citicorp. The Amended Complaint's assertion that the 2007 Revolver became a "discretionary" loan is an obvious effort by the Committee to resurrect its argument, which is irrelevant and contradicted by the actual loan agreements, Mr. Wulbern argued. He asserted that the Committee has had enough bites at the apple and has wasted enough of the estates' money attempting to state a claim against the Revolver Facility. The Court should dismiss the Amended Complaint as to the Revolver with prejudice and without leave to replead, he maintains. B. Senior Transeastern Lenders On behalf of the Senior Transeastern Lenders, Michael I. Goldberg, Esq., at Akerman Senterfitt, in Fort Lauderdale, Florida, argued that the Committee has failed to plead any facts that could support the legal contention that the Conveying Subsidiaries had an interest in the cash proceeds of the New Loans. The Senior Transeastern Lenders are certain of the lenders on the $450 million Credit Agreement dated as of August 1, 2005. Mr. Goldberg maintains that the Committee's argument that the Conveying Subsidiaries obtained a property interest by becoming obligated and pledging assets alone is unprecedented, and would distort, if not render moot, well-established legal principles. He adds that if permitted to proceed, the Committee's argument would render subsidiary guaranty structures, which have for decades been a significant part of financial transactions. Moreover, Mr. Goldberg noted, the Amended Complaint does not allege that any of the property transferred to the Senior Transeastern Lenders was property of the Conveying Subsidiaries. "This is a fatal defect that infected the Original Complaint and continues to infect the Amended Complaint. Moreover, this defect cannot be cured by amendment because it goes to the core of the Committee's theory," Mr. Goldberg says. The Senior Transeastern Lenders stress that the Committee's resort to an unprecedented legal argument, unsupported by any factual allegations, confirms that the Complaint should be dismissed with prejudice. The Senior Transeastern Lenders further ask the Court to prohibit the Committee to amend again its claims against the Senior Transeastern Lenders because any amendment would be futile. C. Subordinated Noteholders "The Committee has already conceded that it has no claims with respect to the New Subordinated Notes, thus the claims in the Amended Complaint should be dismissed," asserted Deutsche Bank Trust Company Americas, Highland CDO Opportunity Fund, Ltd., Highland Floating Rate Advantage Fund, et al., in their capacity as holders of New Subordinated Notes. The Subordinated Noteholders and the Conveying Subsidiaries, however, have expressly agreed that the Subsidiary Guaranties are limited to the amount which is not subject to reduction by a fraudulent conveyance claim. More importantly, the Subsidiary Guaranties are so limited by their terms, there is no ground to void the guaranties on the basis of a fraudulent conveyance claim as the Committee seeks to do here, the Subordinated Noteholders say. The Subsidiary Guaranties simply do not exist to the extent that the Conveying Subsidiaries did not receive reasonably equivalent value, were rendered insolvent, or were left with unreasonably small capital, the Subordinated Noteholders stress. "It is not enough for the Committee to say that this Adversary Proceeding will go forward against the Subordinated Noteholders so that parties can determine and fix the amount of the Subsidiary Guaranties," the Subordinated Noteholders complain. The Committee has alleged fraudulent conveyance claims, not claims to fix the amount of the Subsidiary Guaranties under the Indenture and thus, no claims exist, the Subordinated Noteholders remain. The Subordinated Noteholders add that Section 274 of the New York Debtor and Creditor Law do not apply to them as it only applies to fraudulent conveyances -- and not to fraudulently incurred obligations. Committee Addresses Motions to Dismiss The Creditors Committee reiterates that its Amended Complaint has stated sufficient claims to permit Citicorp to respond. The Committee has realleged that: (i) the incurrence of a new obligation and that the Amended Revolver Agreement was in all material respects a new loan, which Citicorp elected to extend when the Conveying Subsidiaries could no longer fulfill the terms of the January 2007 Revolver; (ii) the Conveying Subsidiaries transferred interests in their property on July 31, 2007, because the Revolver Lenders did not perfect their security interest in the assets of the Conveying Subsidiaries until the parties signed the Amended Security Agreement on July 31, 2007; (iii) the Conveying Subsidiaries incurred a new obligation for letters of credit issued before July 31, 2007, because those letters were expressly reissued under the Amended Revolver Agreement; and (iv) Florida choice-of-law rules dictate that New York law applies to fraudulent conveyance claims. Patricia A. Redmond, Esq., at Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., in Miami, Florida, contends that a complaint need only give notice of a basis for a claim, and it need only plead enough fact to raise a reasonable expectation that discovery will reveal evidence of the fraudulent conveyances. To this end, the Committee asks the Court to deny Citicorp's Motion to Dismiss. As to the Senior Transeastern Lenders, the Committee elaborates that the claims against those Lenders arise from interrelated transactions on July 31, 2007. The Conveying Subsidiaries borrowed $200 million from the First Lien Lenders and $300 million from the Second Lien Lenders, and secured that debt by granting the Lenders liens on their property. The money obtained through those loans was used to fund the Transeastern Settlement, in which more than $420 million was paid to the Senior Transeastern Lenders to repay a debt for which the Conveying Subsidiaries were not liable. If that premise is correct, the payment to the Senior Transeastern Lenders constitute a fraudulent transfer, the Committee maintains. On the other hand, if the loan proceeds were not property of the Conveying Subsidiaries, it is clear that a fraudulent transfer to the First and Second Lien Lenders occurred by virtue of securing debt and granting liens by the Conveying Subsidiaries, the Committee adds. The Committee maintains that for present purposes, its Amended Complaint sufficiently alleges that the proceeds of the First and Second Lien Loans were property of the Conveying Subsidiaries. The Committee asserts that the Senior Transeastern Lenders' Motion to Dismiss should be denied, notwithstanding the possibility that the Court may ultimately decide to the contrary on the basis of a complete record. Furthermore, the Committee emphasizes that the Senior Transeastern Lenders' assertion that the loan proceeds were not property of the Conveying Subsidiaries is entirely irrelevant as the Conveying Subsidiaries were borrowers, not mere guarantors, and thus the loan proceeds were their property. The Committee comments that there is no need for the Court to rule on hypothetical amendments to the Complaint. The Committee affirms that it has no intention at present to seek to add any of those claims. As to the Subordinated Noteholders, the Committee clarifies that it does not oppose their request to dismiss the claims brought under New York Debtor and Creditor Law. The Committee, however, argues that the Noteholders' Motion to Dismiss is barred under Rule 12(g)(2) of the Federal Rules on Civil Procedure, which provides "a party that makes a motion under Civil Rule 12 must not make a motion under Rule 12 raising a defense or objection that was available to the party but omitted from its earlier motion." The Committee avers that each of the defenses and objections now raised by the Subordinated Noteholders was then available to them when they filed their previous Motion to Dismiss. On that basis alone, the Noteholders' dismissal request should be denied, the Committee remains. On the Committee's behalf, Michael L. Waldman, Esq., at Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP, in Washington, D.C., further asserts that the Subordinated Noteholders' Motion to Dismiss is meritless as well as untimely. He points out that while the Noteholders sought dismissal of the Conveying Subsidiaries' guaranties on the New Subordinated Notes issued by the Debtors, they do not contend that the Amended Complaint failed to allege each of the elements of a fraudulent transfer claim with respect to those guaranties. Even if the Indenture Agreement would reduce the subsidiary guarantor's obligations to preclude a fraudulent transfer, it would still be necessary to adjudicate the liabilities and assets of the subsidiary guarantors and the extent of their insolvency in order to determine their obligations under the Guaranties, Mr. Waldman notes. The same factual and legal questions would need to be answered, whether the proceeding to determine the answers is denominated as a fraudulent transfer proceeding or as a proceeding to fix the amount of the Subordinated Noteholders' claims. "Thus, dismissal would serve no practical purpose," Mr. Waldman says. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No. 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger Singerman, to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008, (Bankr. S.D. Fla. Case No.: 08-20746). It listed assets between $1 million and $10 million, and debts between $1 million and $10 million. The Official Committee of Unsecured Creditors hired Patricia A. Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff & Sitterson, P.A., as its local counsel. TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets of $1,734,422,756 and total liabilities of $2,300,053,979. TOUSA's Exclusive Plan Filing Period expires Oct. 25, 2008. (TOUSA Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). UNI-MARTS: Has Until Feb. 23 to File Chapter 11 Plan ---------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware granted a request by Uni-Marts, LLC, and its debtor-affiliates to extend their exclusive period to file a Chapter 11 reorganization plan to Feb. 23, Bill Rochelle of Bloomberg News reports. The Debtors sought an April 22 extension. Mr. Rochelle notes that Uni-Marts won an extension although it was unable to complete a sale of assets, which the Court approved. The Debtors had named Atlantis the lead bidder at an August auction of its assets. Atlantis won the bid when no competing offers were submitted, and the auction was canceled. The buyer, however, was unable to secure financing, and canceled the offer, according to the report. About Uni-Marts Headquartered in State College, Pennsylvania, Uni-Marts LLC sells consumer goods. The company and six of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. D. Del. Lead Case No.08-11037). Michael Gregory Wilson, Esq., at Hunton & Williams LLP represents the Debtors in their restructuring efforts. The Debtor selected Epiq Bankruptcy Solutions LLC as its claims, notice and balloting agent. The U.S. Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. The Committee selected Blank Rome LLP as its counsel. VALLEY CLUB: Court Dismisses Chapter 11 Case -------------------------------------------- The Hon. Jim D. Pappas of the U.S. Bankruptcy Court for the District of Idaho dismissed on Dec. 8, 2008, Valley Club Homes, Inc.'s bankruptcy case, after conducting an evidentiary hearing on Dec. 3, 2008. As reported in the Troubled Company Reporter on Dec. 4, 2008, Valley Club Homes, LLC asked the Court to dismiss its Chapter 11 bankruptcy case on these grounds: a. The sole remaining parcel of real property that it holds consists of a residence encumbered by a first deed of trust lien in favor of Mountain West Bank. The Debtor does not believe there is equity in this property after payment of the secured debt, continuing interest, as well as payment of closing costs, to retire any of its unsecured debts. D.L. Evans Bank and California National Bank have both obtained relief from stay from the Court permitting them to foreclose on the properties encumbered by them. b. Debtor does not believe there is current source of repayment for any of the unsecured creditors of the estate under current market conditions. c. As a result of the foregoing, Debtor does not believe there is sufficient property available to the estate for the Debtor to either formulate a Chapter 11 plan or for a Chapter 7 trustee to provide any effective relief for the Chapter 7 unsecured creditors. In addition, the Debtor related that it has failed to obtain financing as contemplated in its Chapter 11 plan and disclosure statement. Upon further review, however, the Debtor told the Court that it believes it will be unable to reorganize its affairs or to amend the disclosure statement in a manner sufficient to satisfy the adequacy requirements of the Bankruptcy Code. About Valley Club Homes Headquartered in Ketchum, Idaho, Valley Club Homes LLC owns and operates The Village Green at the Valley Club, a high-end subdivision and golf course in Wood River Valley. According to the Idaho Mountain Express, Village Green was approved by the Blaine County Commission in spring 2005. Its development plan included a nine-hole Tom Fazio golf course and construction of 43 custom homes, valued at about $3 million each. The company filed for Chapter 11 protection on April 29, 2008 (Bankr. D. Idaho Case No. 08-40339). Joseph M. Meier, Esq., at Cosho Humphrey, LLP, in Boise, Idaho, represents the Debtor as counsel. In its amended schedules which was filed with the Court on Oct. 21, 2008, the Debtor listed total assets of $32,435,402 and total debts of $24,380,856. VERASUN ENERGY: Can Employ AP Services as Crisis Managers --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized VeraSun Energy Corp. and its affiliates to employ AP Services LLC and designate James J. Bonsall as their chief restructuring officer and senior vice president. The Debtors' proposed counsel, Mark S. Chehi, Esq. at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, contends that APS and Mr. Bonsall are well-suited to provide the restructuring services required by the Debtors because they have assisted and advised debtors, creditors, bondholders, investors and other entities in numerous Chapter 11 cases of similar size and complexity as the Debtors' Chapter 11 cases. Mr. Bonsall is a managing director of AlixPartners LLP, an affiliate of APS. Mr. Bonsall has worked as a restructuring and financial consultant for more than 29 years serving multinational public, European and privately owned companies. He, according to the Debtors, has substantial knowledge and experience advising large companies and assisting troubled companies with stabilizing their financial condition, analyzing their options, and developing an appropriate business plan to accomplish restructuring initiatives. In addition, Mr. Bonsall has served in executive management roles at many large companies, including Peregrine Incorporated, LTV Steel, Performance Fibers, FoxMeyer Drug Company, and Environmental Quality Company. The Debtors previously employed AlixPartners. Mr. Chehi states that AlixPartners' employment was one of the critical elements in the Debtors' decision to employ APS. Since the time APS was first engaged by the Debtors, APS has developed a great deal of institutional knowledge regarding the Debtors' operations, finance and systems, Mr. Chehi tells the Court. The Debtors believe that the institutional experience and knowledge will be valuable to them in their efforts to reorganize. APS and Mr. Bonsall will perform a broad range of services, which include assisting: * the Debtors and their management in developing a short-term cash flow forecasting tool, associated variance reporting and related methodologies and to assist with planning for alternatives as requested by the Debtors; * the Debtors' management with the development of their business plan, and other related forecasts as may be required by the bank lenders in connection with negotiations or by the Debtors for other corporate purposes; * in managing the "working group" professionals who are assisting the Debtors in the reorganization process or who are working for the Debtors' various stakeholders to improve coordination of their effort and individual work product to be consistent with the Debtors' overall restructuring goals; * with providing testimony before the Court on matters that are within APS' areas of expertise; * with financing issues during the Debtors' Chapter 11 Cases; * in communication, presenting information and/or negotiation with outside constituents including the banks, their advisors and committees appointed by the Court, and the Court; * with the preparation of the statement of affairs, schedules, and other regular reports required by the Court or which are customarily issued by the Debtors' Chief Financial Officer; * as requested in tasks like reconciling, managing, and negotiating claims, determining preferences and the collection of the same, document management, preservation of electronic data, and the like; * the Debtors and their counsel in confirmation of any plan of reorganization filed in these Chapter 11 Cases; and * with other matters as may be requested that fall within APS' expertise and that are mutually agreeable. The Debtors propose to pay APS for Mr. Bonsall's service at the rate of $750 per hour. In addition, the Debtors have agreed that services provided by an APS temporary staff, to assist Mr. Bonsall, will be billed at the these hourly rates: Professional Description Hourly Rate ------------ ----------- ----------- Barry Folse Case management $650 Robert Bush Cash management $620 Robert Rakowski Cash management $565 Carrianne Basler Cash & case management $565 Brent Robison Case management $485 Anton Kolev Cash & other modeling $375 Rob Butler Case management $245 Fees for all APS personnel are based on the hours worked and the title of each professional: Title Hourly Rate ----- ----------- Managing directors $650 to $850 Directors $485 to $650 Vice presidents $335 to $480 Associates $250 to $340 Analysts $225 to $250 Paraprofessionals $170 to $200 APS will invoice the Debtors for $200,000 at the beginning of each week, and the Debtors will pay the amount on the same day. A reconciliation of actual services rendered and expenses incurred to amounts invoiced and paid will be performed monthly, and a true-up credit or charge will be calculated. The true-up will be applied to the following week's invoice resulting in an increase or decrease to the invoice. APS will not be required to seek Court approval before payment of the hourly fees and expenses. Instead, 100% of the fees and expenses will be paid in the ordinary course. In addition to hourly fees, APS will have the right to earn a success fee of $3,500,000 if the Debtors (i) confirm a plan of reorganization that becomes effective, or (ii) complete one or more transactions that become effective or are consummated within 18 months of the date of the APS' engagement, that substantially transfer a significant portion of the business as a going concern to another entity. Beginning in the 19th month of APS' engagement, the Success Fee will be reduced at the rate of $100,000 per month until its amount is $2,500,000, after which point it will not be further reduced. If the Chapter 11 cases are converted to Chapter 7 cases, then the Success Fee will not be payable, provided that, in the event that the Transactions occur, then APS will be entitled to the Success Fee even if the Debtors' remaining estate becomes a Chapter 7 liquidation under the Bankruptcy Code. In addition to compensation for services rendered by APS' personnel, APS will seek reimbursement for reasonable and necessary expenses incurred in connection with the Chapter 11 cases. Mr. Bonsall disclosed that APS received $250,000 as a retainer from the Debtors during the 90-day period before the Petition Date. For the period of August 1, 2008, through October 31, 2008, APS incurred and was paid for fees and expenses amounting to $1,587,870. The amount includes an estimate of fees and expenses for the October period amounting to $380,805. Because APS is not being employed as a professional pursuant to Section 327 of the Bankruptcy Code, it will not submit quarterly fee applications. However, APS will provide notice to the United States Trustee and all official committees, of reports on compensation earned and expenses incurred on at least a quarterly basis. The Debtors agree to indemnify, hold harmless, and defend APS and its affiliates from and against all claims, liabilities, losses, expenses, and damages incurred by them in the performance of duties. Mr. Bonsall tells the Court that neither he nor APS or its managing directors have any connection with the Debtors, their creditors, the U.S. Trustee or any other party with an actual or potential interest in the Chapter 11 cases. Based on a search, Mr. Bonsall says that APS knows of no fact or situation that would represent a conflict of interest for APS with regard to the Debtors. However, APS discloses that it may have represented, or is representing, several parties-in-interest in the Debtors' bankruptcy cases in matters wholly unrelated to the bankruptcy cases. A copy of the Disclosures is available for free at: http://bankrupt.com/misc/VSunAPDisclosures.pdf Mr. Bonsall assures the Court that APS holds no adverse interest as to the matters for which it has been employed by the Debtors. About VeraSun Energy Headquartered in Sioux Falls, South Dakota, VeraSun Energy Corp. -- http://www.verasun.comor http://www.VE85.com/-- produces and markets ethanol and distillers grains. Founded in 2001, the company has a fleet of 16 production facilities in eight states, with 14 in operation. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 31, 2008, (Bankr. D. Del. Case No. 08-12606) Mark S. Chehi, Esq. at Skadden Arps Slate Meagher & Flom LLP represents the Debtors in their restructuring efforts. AlixPartners LLP serves as their restructuring advisor. Rothschild Inc. is their investment banker and Sitrick & Company is their communication agent. The Debtors' claims noticing and balloting agent is Kurtzman Carson Consultants LLC. The Debtors' total assets as of June 30, 2008, was $3,452,985,000 and their total debts as of June 30, 2008, was $1,913,214,000. VeraSun Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) VERASUN ENERGY: Seeks to Employ Deloitte Tax As Advisors -------------------------------------------------------- VeraSun Energy Corp. and its affiliates seek permission from the U.S. Bankruptcy Court for the District of Delaware to employ Deloitte Tax LLP to perform tax services including but not limited to tax return preparation, tax consulting, and advisory services nunc pro tunc to November 3, 2008. Mark D. Dickey, the Debtors' senior vice president, general counsel and corporate secretary, relates that Deloitte Tax was asked by the Debtors to provide necessary services after the Petition Date and has done so since November 3, 2008. He adds that Deloitte Tax has provided various prepetition tax services to the Debtors for approximately one year, and accordingly, is quite familiar with the Debtors' tax circumstances. Mr. Dickey contends that Deloitte Tax fulfills a vital need that compliments the services offered by the Debtors' other restructuring professionals. He further contends that Deloitte Tax's capabilities will enhance the potential for a successful resolution of the Debtors' Chapter 11 cases. Affiliates of Deloitte Tax, Deloitte & Touche LLP and Deloitte Financial Advisory Services LLP, have provided prepetition and certain postpetition services to the Debtors, Mr. Dickey notes. He says the Debtors will seek the Court's separate authorization for the Deloitte Affiliates' retentions. As tax advisors, Deloitte Tax will advise the Debtors: (a) regarding the restructuring or bankruptcy emergence process, including the tax workplan; (b) on the cancellation of debt income for tax purposes; (c) on post-bankruptcy tax attributes available under applicable tax regulations and the absorption of attributes based on the Debtors; (d) on the potential effect of the "Alternative Minimum Tax" in various post-emergence scenarios; (e) on the effects of tax rules pertaining to post-bankruptcy net operating loss carryovers and limitations on their utilization; (f) on Net Built-in Gain or Loss position at the time of any "ownership change," including limitations on use of tax losses generated from post-bankruptcy asset or stock sales; (g) in their work with creditors; (h) as to the proper tax treatment of postpetition interest for state and federal income tax purposes; (i) as to the proper state and Federal income tax treatment of prepetition and postpetition reorganization costs including restructuring-related professional fees and other costs, including the categorization and analysis of costs and the technical positions related thereto; (j) in their evaluation and modeling the effects of liquidating, merging, or converting entities as part of the restructuring, including the effects on federal and state tax attributes, state incentives, apportionment, and other tax planning; (k) in their review and analysis of the tax treatment of items adjusted for GAAP purposes as a result of "fresh start" accounting as required for the emergence date of the U.S. GAAP balance sheet in an effort to identify the appropriate tax treatment of adjustments to equity and other tax basis adjustments to assets and liabilities recorded; (l) in their documentation, as appropriate, Deloitte Tax's tax analysis, opinions, recommendation, observations, and correspondences for any proposed restructuring alternative tax issue or other tax matter; (m) regarding other state or Federal income tax questions that may arise, as requested by the Debtors, and as may be agreed to by Deloitte Tax. The services do not include rendering of tax opinions or review of required tax disclosures; (n) in their effort to identify tax issues and planning opportunities related to debt restructuring and/or bankruptcy from a state and local perspective, including, but not limited to, advising the Debtors on state adoption of IRC Section 108 on debt forgiveness and attribute reduction under IRC Section 108(b)(5), state tax effects of Section 346 of the Bankruptcy Code, and state positions with respect to state tax attribute utilization limitations post-bankruptcy; (o) on relevant state tax laws and apply them to the Debtors' specific facts, including the importance of tracking attributes on an entity by entity and state by state basis; (p) on the states' ability to file claims before the bar date for existing or potential liabilities for income tax and the need to establish reserves for bankruptcy claims; (q) in their efforts to preliminarily identify tax issues and state and local planning opportunities related to post- restructuring including, but not limited to, evaluating structural strategies to assist the Debtors in attempting to minimize state income taxes through the utilization of net operating losses, creation of special purpose entities or reorganization of the business along functional lines, property taxes, sales & use taxes, and other state and local taxes as appropriate; (r) in their efforts to estimate the tax basis in the stock in each of the Debtors' subsidiaries or other entity interests; and (s) with day-to-day federal and state questions as requested. Deloitte Tax will also provide these additional services: * Preparation of the short period Federal and State tax returns for Debtor US Bioenergy Corporation; * Preparation of the Federal and State tax returns for VeraSun Energy Corporation for the taxable year ended December 31, 2008; * Certain FAS 109-related services including assistance with calculations for December 31, 2008; and * Other Additional Tax Services as may be requested by the Debtors and as may be agreed to by Deloitte Tax, including General Corporate Tax Advisory Services and assistance to the Debtors in connection with IRS audits. The Debtors will pay Deloitte Tax according to its customary hourly rates: Professional Hourly Rate ------------ ----------- Partner $595 Director $580 Senior Manager $505 Manager $400 Senior Associate $300 Staff $190 For the Additional Tax Services, Deloitte Tax will be paid these hourly rates: Partner $470 Director $460 Senior Manager $410 Manager $330 Senior Associate $260 Staff $180 Deloitte Tax will also seek reimbursement for reasonable and necessary expenses, including travel, report production, delivery services, and other expenses incurred in providing the Professional Services. Mr. Dickey discloses that the approximate amount of estimated fees for services provided to the Debtors from November 3 to December 8, 2008, is $103,643 and $1,129 in related expenses. He adds that Deloitte Tax was paid approximately $617,229 in the 90 days before the Petition Date and has received no other compensation from the Debtors. As of the Petition Date, Deloitte Tax is owed $302,015, however, Deloitte has agreed to waive the prepetition claim. Subject to the Court's approval, the Debtors agree to indemnify and hold harmless Deloitte Tax, its subcontractors from all claims, except to the extent judicially determined to have resulted primarily from the gross negligence, bad faith, or intentional misconduct of Deloitte Tax or its subcontractors. In any event, the aggregate liability of Deloitte Tax, its subcontractors for any claim will not exceed an amount proportional to the relative default that their conduct bears to all other conduct giving rise to a claim. Mr. Dickey submits that the Debtors intend for Deloitte Tax's services to complement, and not duplicate, the services to be rendered by any other professional retained in the Chapter 11 cases. Boake D. Munsch, a partner of Deloitte Tax, assures the Court that his firm is a "disinterested person" under Section 101(14) of the Bankruptcy Code and that the firm neither holds nor represents any interest adverse to the Debtors or their estates. About VeraSun Energy Headquartered in Sioux Falls, South Dakota, VeraSun Energy Corp. -- http://www.verasun.comor http://www.VE85.com/-- produces and markets ethanol and distillers grains. Founded in 2001, the company has a fleet of 16 production facilities in eight states, with 14 in operation. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 31, 2008, (Bankr. D. Del. Case No. 08-12606) Mark S. Chehi, Esq. at Skadden Arps Slate Meagher & Flom LLP represents the Debtors in their restructuring efforts. AlixPartners LLP serves as their restructuring advisor. Rothschild Inc. is their investment banker and Sitrick & Company is their communication agent. The Debtors' claims noticing and balloting agent is Kurtzman Carson Consultants LLC. The Debtors' total assets as of June 30, 2008, was $3,452,985,000 and their total debts as of June 30, 2008, was $1,913,214,000. VeraSun Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) VERASUN ENERGY: Committee Seeks to Retain Greenberg as Co-Counsel ----------------------------------------------------------------- The official committee of unsecured creditors of VeraSun Energy Corp. seeks approval from the U.S. Bankruptcy Court for the District of Delaware to retain Greenberg Traurig LLP as co- counsel, nunc pro tunc to November 14, 2008. The Committee tells the Court that it selected Greenberg because of its substantial experience appearing before courts in the District of Delaware and its substantial experience representing committees and creditors in complex bankruptcy cases. As the Committee's co-counsel, Greenberg will: (a) provide legal advice with respect to the Committee's rights, powers and duties; (b) prepare all necessary applications, answers, responses, objections, orders, reports and other legal papers; (c) represent the Committee in any and all matters, including any disputes or issues with the Debtors, alleged secured creditors and other third parties; (d) assist the Committee in its investigation and analysis of the Debtors, including but not limited to, the review and analysis of all pleadings, claims and/or plans or reorganization that may be filed in the Chapter 11 cases and any negotiations or litigation that may arise out of or in connection with similar matters, operations and financial affairs; (e) represent the Committee in all aspects of confirmation proceedings; and (f) perform all other legal services for the Committee that may be necessary or desirable. The Committee notes that it has filed an application to retain Akin Gump Strauss Hauer & Feld LLP as co-counsel, however, the services to be provided by Greenberg will not be duplicative of those provided by Akin Gump. In addition, Greenberg will coordinate any services performed with the services of Akin Gump, as appropriate, to minimize duplication of effort. Greenberg will be paid based on its current hourly rates applicable to the principal attorneys and paralegals proposed to represent the Committee: Donald J. Detweiler $585 Sandra G. M. Selzer $415 Dennis A. Meloro $385 Elizabeth C. Thomas $195 Other attorneys and paralegals will render services to the Committee as needed. Generally, Greenberg's hourly rates are in these ranges: Shareholders $235 to $780 Associates $130 to $480 Legal Assistants/Paralegals $65 to $230 Donald J. Detweiler, Esq., a shareholder at Greenberg, assures the Court that to the best of his knowledge, his firm does not hold or represent any interest adverse to the Debtors or their estates, their creditors, or any other party-in-interest. He adds that Greenberg is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. However, Mr. Detweiler notes that Greenberg is a large firm and it may have represented certain creditors of other parties in interest in matters unrelated to the Debtors' Chapter 11 cases. About VeraSun Energy Headquartered in Sioux Falls, South Dakota, VeraSun Energy Corp. -- http://www.verasun.comor http://www.VE85.com/-- produces and markets ethanol and distillers grains. Founded in 2001, the company has a fleet of 16 production facilities in eight states, with 14 in operation. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 31, 2008, (Bankr. D. Del. Case No. 08-12606) Mark S. Chehi, Esq. at Skadden Arps Slate Meagher & Flom LLP represents the Debtors in their restructuring efforts. AlixPartners LLP serves as their restructuring advisor. Rothschild Inc. is their investment banker and Sitrick & Company is their communication agent. The Debtors' claims noticing and balloting agent is Kurtzman Carson Consultants LLC. The Debtors' total assets as of June 30, 2008, was $3,452,985,000 and their total debts as of June 30, 2008, was $1,913,214,000. VeraSun Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) VERASUN ENERGY: Committee Seeks to Retain Houlihan as Co-Counsel ---------------------------------------------------------------- The official committee of unsecured creditors of VeraSun Energy Corp. seeks approval from the U.S. Bankruptcy Court for the District of Delaware to retain Houlihan Lokey Howard & Zukin Capital, Inc.as financial advisor and investment banker, nunc pro tunc to November 18, 2008. Houlihan Lokey is a nationally recognized investment banking and financial advisory firm with offices worldwide and more than 800 professionals. It has served as financial advisor in some of the largest and most complex restructuring matters in the United States, including as financial advisory to Buffets Holdings, Inc. and AmeriServe Food Distribution, Inc. The Committee contends that in light of the size and complexity of the Debtors' cases, it needs a seasoned and experienced financial advisor, like Houlihan Lokey, that is familiar with the Debtors' businesses and the Chapter 11 process. As the Committee's financial advisor and investment banker, Houlihan Lokey will: (a) analyze business plans and forecasts of the Debtors; (b) evaluate the assets and liabilities of the Debtors; (c) assess the financial issues and options concerning the sale of the Debtors and any Chapter 11 plan of reorganization or liquidation; (d) analyze and review the financial and operating statements of the Debtors; (e) provide financial analyses as the Committee may require in connection with the Cases; (f) assist in the determination of an appropriate capital structure for the Debtors; (g) analyze strategic alternatives available to the Debtors; (h) evaluate the Debtors' debt capacity in light of its projected cash flows; (i) evaluate and negotiate the terms of any postpetition financing; (j) assist the Committee in identifying potential alternative sources of liquidity in connection with any Plan; (k) represent the Committee in negotiations; (l) provide testimony in Court on behalf of the Committee, if necessary; and (m) provide other financial advisory and investment banking services as may be agreed upon by Houlihan Lokey and the Committee. Houlihan Lokey will be entitled to receive, as compensation for its services: -- a monthly fee of $250,000, of which $100,000 will be credited against a deferred fee; -- a deferred fee equal to $2,000,000 earned and payable upon the earlier of confirmation of a Plan with respect to VeraSun Energy Corporation or the disposition of substantially all of the Debtors' assets; and -- reimbursement for reasonable out-of-pocket expenses incurred from time to time in connection with its services after invoicing the Debtors. Houlihan Lokey will be indemnified and held harmless from and against any and all losses, claims, damages or liabilities in connection with the engagement, except to the extent they arise as a result of Houlihan Lokey's gross negligence or willful misconduct. Christopher R. DiMauro, a managing director of Houlihan Lokey, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. He says that none of Houlihan Lokey's directors, managers, members, partners, and employees has any interests materially adverse to the Debtors and their estates. About VeraSun Energy Headquartered in Sioux Falls, South Dakota, VeraSun Energy Corp. -- http://www.verasun.comor http://www.VE85.com/-- produces and markets ethanol and distillers grains. Founded in 2001, the company has a fleet of 16 production facilities in eight states, with 14 in operation. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 31, 2008, (Bankr. D. Del. Case No. 08-12606) Mark S. Chehi, Esq. at Skadden Arps Slate Meagher & Flom LLP represents the Debtors in their restructuring efforts. AlixPartners LLP serves as their restructuring advisor. Rothschild Inc. is their investment banker and Sitrick & Company is their communication agent. The Debtors' claims noticing and balloting agent is Kurtzman Carson Consultants LLC. The Debtors' total assets as of June 30, 2008, was $3,452,985,000 and their total debts as of June 30, 2008, was $1,913,214,000. VeraSun Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) VIREXX MEDICAL: Paladin Is Sole Shareholder; Obtains $1.25MM Loan ----------------------------------------------------------------- ViRexx Medical Corp. said that Paladin Labs Inc. became the sole shareholder of the company in accordance with the Order for Reorganization in ViRexx's Proposal Proceedings under the Bankruptcy and Insolvency Act (Canada) and under the Alberta Business Corporations Act. According to TMCnet.com, Paladin Labs provided $1.25 million in debtor-in-possession financing to ViRexx Medical making it the sole shareholder. The facility will be used to pay creditors and legal fees, the report says. All existing issued and outstanding shares and options of Virexx were cancelled without payment or other consideration and Paladin Labs will take the steps necessary to cease being a reporting issuer in Canada and the United States. The Troubled Company Reporter on Dec. 5, 2008, said, as a result of having insufficient financial resources to meet all of its existing creditor obligations, on Oct. 16, 2008, the company filed a Notice of Intention to make a Proposal under the Bankruptcy and Insolvency Act. This filing allowed the Company to maintain scaled-back operations and the integrity of its assets while evaluating its strategic alternatives and developing a restructuring proposal for creditors. During this period Meyers Norris Penny Limited was appointed as trustee and monitored the activities of the company while the company formulated a Proposal for its creditors. On Nov. 17, 2008, the company obtained an Order from the Court to obtain debtor in possession financing from Paladin Labs Inc. in order to assist the company to complete its restructuring process. Pursuant to this Order, on Nov. 18, 2008, the company filed the Proposal with the Trustee who then called and held a meeting of unsecured creditors on Nov. 28, 2008, to consider the proposal. At the meeting, unsecured creditors of the company voted in favour of the Proposal. Summary of Proposed Order Under the Proposal and the proposed Order for Reorganization, Paladin or its assignee is intended to become the sole shareholder of the company. One of the consequences of which is that the company will take the steps necessary to cease being a reporting issuer in Canada and the United States. About Paladin Labs Headquartered in Montreal, Canada, Paladin Labs Inc. -- http://www.paladinlabs.com-- operates a pharmaceutical company focused on acquiring or licensing pharmaceutical products for the Canadian market. About ViRexx Medical ViRexx Medical Corp. (TSX: VIR) (AMEX: REX) is a Canadian-based development-stage biotech company focused on developing innovative-targeted therapeutic products that offer better quality of life and a renewed hope for living. The company's platform technologies include product candidates for the treatment of Hepatitis B, Hepatitis C, avian influenza viral infections, biodefence and nanoparticle applications, select solid tumors and late-stage ovarian cancer. VIRGIN MOBILE: Board Awards Restricted Stock Units to Directors --------------------------------------------------------------- The Compensation Committee of the Board of Directors of Virgin Mobile USA, Inc., approved on December 23, 2008, awards of restricted stock units to the directors of the company, effective immediately. Thomas O. Ryder, Chairman of the Board, was awarded 48,000 RSUs, and all other directors were awarded 32,000 RSUs. One-third of each RSU grant will vest on November 1, 2009, November 1, 2010, and November 1, 2011. The awards were approved subject to approval by the company's stockholders of the issuance of additional shares of authorized but unissued and unreserved shares of the company's Class A common stock reserved for issuance under the 2007 Omnibus Incentive Compensation Plan. On December 1, 2008, the Compensation Committee approved awards for the year ended December 31, 2009, to John Feehan, the company's Chief Financial Officer. Based on this methodology, the total value of the awards for 2009 granted by the Compensation Committee to Mr. Feehan (including both cash and equity compensation) was between the 25th and 50th percentile of the value of annual grants for chief financial officers at companies in the company's peer groups. Mr. Feehan received a grant of 400,000 restricted stock units pursuant to the 2007 Omnibus Incentive Compensation Plan. The grant was awarded subject to approval by the company's stockholders of the issuance of additional shares of authorized but unissued and unreserved shares of the company's Class A common stock reserved for issuance under the Omnibus Plan. One-third of Mr. Feehan's RSU grant will vest on January 1, 2010, January 1, 2011, and January 1, 2012. The Compensation Committee established a target cash award of $750,000 for Mr. Feehan pursuant to the company's 2009 Mid-Term Bonus Plan, subject to the company's performance against targets for Net Service Revenue and EBITDA in 2009. The actual cash payout to Mr. Feehan pursuant to the Mid-Term Bonus Plan will be determined based on the company's performance relative to targets for Net Service Revenue and EBITDA for the year 2009 and made in these percentages as of these dates: 30% of actual cash payout on February 28, 2010; 30% of actual cash payout on August 31, 2010; and 40% of actual cash payout on February 28, 2011. On December 12, 2008, Frances Brandon-Farrow resigned from the Board, effective immediately. The Virgin Group may designate up to three members of the company's Board. Prior to her resignation, Ms. Brandon-Farrow had been a Virgin Group designee. The Virgin Group has named Gordon D. McCallum as its new designee to the Board. Mr. McCallum, 48, has been chief executive officer of Virgin Management Limited a U.K.-based management services company, since September 2005. From January 1998 to September 2005, Mr. McCallum worked at Virgin Management as its group strategy director. On December 12, 2008, the company and its Chief Executive Officer, Daniel H. Schulman, entered into Amendment No. 1 to Mr. Schulman's Amended and Restated Employment Agreement. The Amendment is intended to ensure that Mr. Schulman's Amended and Restated Employment Agreement complies with Section 409A of the Internal Revenue Code. Headquartered in Warren, New Jersey, Virgin Mobile USA Inc. (NYSE: VM) -- http://www.virginmobileusa.com/-- is a provider of wireless, pay-as-you-go communications services without annual contracts. Voice pricing plans range from monthly options with unlimited nights and weekends to by-the-minute offers, allowing consumers to adjust how and what they pay according to their needs. Virgin Mobiles full slate of handsets, including the Wild Card, Super Slice and Cyclops, are available at top retailers in more than 35,000 locations nationwide and online, with Top-Up cards available at more than 130,000 locations. Virgin Mobile USA was founded as a joint venture between Sprint Nextel and the Virgin Group, and launched its service nationally in July 2002. As of September 30, 2008, the company served 5.2 million customers. According to Virgin Mobile's unaudited balance sheet on Sept. 30, 2008, the company has $395,989,000 in assets, $695,081,000 in liabilities and $355,482,000 stockholders' deficit. As reported by the Troubled Company Reporter on December 5, 2008, Virgin Mobile has said that, based on its expected cash flows from operations and available funds from its revolving credit facility, management believes that the company has the ability to finance its projected operating, investing and financing requirements of existing operations and planned customer growth through at least September 30, 2009. In June, the company entered into a Second Amendment to its Revolving Credit Facility. The amendment increased the Virgin Group's lending commitment from $75 million to $100 million and added SK Telecom as a new lender with a lending commitment of $35 million. In October 2008, the company borrowed an additional $20.0 million under the Revolving Credit Facility, bringing the total amount outstanding under the Revolving Credit Facility to $75.0 million. VIRGIN MOBILE: Dec. 2008 Payment Under Sprint Pact Reduced ---------------------------------------------------------- Virgin Mobile USA, L.P., the operating partnership of Virgin Mobile USA, Inc., entered into sixth and seventh amendments to the company's Amended and Restated PCS Services Agreement dated October 16, 2007, with Sprint Spectrum, L.P., an affiliate of Sprint Nextel Corporation. Under the terms of the Sixth Amendment, the company's required payment for the year ended December 31, 2008, will decrease from $320 million to $318 million, and Sprint Nextel will provide the company with an additional network usage credit of $2.00 for each gross additional customer between October 1, 2008, and December 31, 2008, which will be accretive to the credit of $2.50 and not subject to the $10 million limit. Under the Seventh Amendment, beginning in 2009, the company will no longer be subject to minimum annual payments and will pay fixed rates for voice, messaging and data traffic that are lower than rates applicable in 2008. The company may benefit from additional discounts to these rates in 2010, with the degree of discount based upon the total payments made for 2009 -- including payments pursuant to the Amended and Restated Trademark License Agreement between the company and Sprint Communications company, L.P., an affiliate of Sprint Nextel, dated October 16, 2007. The company and Sprint Nextel will negotiate rates for 2011 and beyond, but if they fail to reach terms, the rates for 2010 will apply. The parties entered into a fifth amendment to the PCS Services Agreement in June. The Fifth Amendment required the company to pay Sprint Nextel at least $320 million, $370 million and $420 million during the years ended December 31, 2008, 2009 and 2010, respectively, for wireless network services, including voice, messaging and data traffic. In addition, the Fifth Amendment obligated Sprint Nextel to pay the company a $2.50 network usage credit for each gross additional customer between July 1, 2008 and December 31, 2009, up to a maximum of $10 million. About Sprint Nextel Based in Overland Park, Kansas, Sprint Nextel Corp. (NYSE: S) -- http://www.sprint.com/-- is the third largest national wireless provider behind AT&T and Verizon, according to Moody's Investors Service. Sprint Nextel offers a comprehensive range of wireless and wireline communications services and is widely recognized for developing, engineering and deploying innovative technologies, including two wireless networks serving nearly 51 million customers at the end of the third quarter 2008; industry-leading mobile data services; instant national and international walkie- talkie capabilities; and a global Tier 1 Internet backbone. In the third quarter 2008, Sprint Nextel incurred a net loss of $326 million compared to net income of $64 million in the third quarter 2007. The company incurred a net loss of $1.2 billion in the year-to-date period 2008 compared to a net loss of $128 million in the year-to-date period 2007, primarily due to a decline in its Wireless segment earnings. The company's balance sheets as of September 30, 2008, show $61.8 billion in total assets, including $4.1 billion in cash and cash equivalents; $40.7 billion in total liabilities; and $29.5 billion in accumulated deficit. About Virgin Mobile Headquartered in Warren, New Jersey, Virgin Mobile USA Inc. (NYSE: VM) -- http://www.virginmobileusa.com/-- is a provider of wireless, pay-as-you-go communications services without annual contracts. Voice pricing plans range from monthly options with unlimited nights and weekends to by-the-minute offers, allowing consumers to adjust how and what they pay according to their needs. Virgin Mobiles full slate of handsets, including the Wild Card, Super Slice and Cyclops, are available at top retailers in more than 35,000 locations nationwide and online, with Top-Up cards available at more than 130,000 locations. Virgin Mobile USA was founded as a joint venture between Sprint Nextel and the Virgin Group, and launched its service nationally in July 2002. As of September 30, 2008, the company served 5.2 million customers. According to Virgin Mobile's unaudited balance sheet on Sept. 30, 2008, the company has $395,989,000 in assets, $695,081,000 in liabilities and $355,482,000 stockholders' deficit. As reported by the Troubled Company Reporter on December 5, 2008, Virgin Mobile has said that, based on its expected cash flows from operations and available funds from its revolving credit facility, management believes that the company has the ability to finance its projected operating, investing and financing requirements of existing operations and planned customer growth through at least September 30, 2009. In June, the company entered into a Second Amendment to its Revolving Credit Facility. The amendment increased the Virgin Group's lending commitment from $75 million to $100 million and added SK Telecom as a new lender with a lending commitment of $35 million. In October 2008, the company borrowed an additional $20.0 million under the Revolving Credit Facility, bringing the total amount outstanding under the Revolving Credit Facility to $75.0 million. VIRGIN MOBILE: No Exact Date Yet on Special Stockholders Meeting ---------------------------------------------------------------- Virgin Mobile USA, Inc., will hold a special meeting of stockholders at a yet to be determined date in 2009. Peter Lurie, General Counsel and Corporate Secretary of Virgin Mobile USA, says the purpose of the meeting is: 1. To approve an amendment to the company's Amended and Restated Certificate of Incorporation to (i) increase the number of authorized shares of Class B common stock from one share to two shares and (ii) add SK Telecom USA, Inc. as a "Founding Stockholder". 2. To approve (i) the issuance of shares of Class A common stock upon conversion of the shares of Series A Convertible Preferred Stock issued to Corvina Holdings Limited and SK Telecom USA, Inc. and (ii) the granting of voting rights to the Virgin Group and SK Telecom with respect to the Series A Preferred Stock. 3. To approve an amendment to the company's 2007 Omnibus Incentive Compensation Plan to increase the number of shares of common stock designated for issuance thereunder from 7,726,384 shares to 12,726,384 shares. 4. To approve the adjournment of the meeting, if necessary or appropriate, to solicit additional proxies if there is an insufficient number of votes at the meeting to approve the proposals. 5. To transact other business as may properly come before the meeting or any adjournment or postponement. The Board of Directors of the company has yet to fix a record date for the determination of stockholders entitled to notice of and to vote at the Special Meeting. On December 4, 2008, Virgin Mobile USA entered into a voting agreement with SK Telecom USA. On December 9, the company entered into additional, separate agreements with each of Corvina, an affiliate of the Virgin Group, and Sprint Ventures, Inc., an affiliate of Sprint Nextel Corporation. Under the terms of the agreements, each of Corvina, Sprint Ventures and SK Telecom, as Controlling Stockholders, agreed to vote its shares of the company's capital stock in favor of a proposal to increase the shares reserved for issuance under the Omnibus Plan at the special meeting. Sprint Nextel has agreed to vote its Class B common stock in favor of the proposal so long as it continues to be recommended by the majority of independent directors of the company at the time of the special meeting. The Virgin Group has agreed to vote its stock in favor of the proposal so long as it continues to be approved by the majority of the full Board at the time of the special meeting. The votes will be counted to satisfy the approval requirements of the New York Stock Exchange. As of December 9, 2008, taking into account the conversion of SK Telecom's interest in Virgin Mobile USA, L.P., into Class A common stock, the Controlling Stockholders collectively represented roughly 60% of the voting power of the company's capital stock. On December 2, 2008, SK Telecom exchanged its interest in the Operating Partnership for company Class A common stock. Following the conversion, SK Telecom holds approximately 17% of the company's Class A common stock. About Virgin Mobile Headquartered in Warren, New Jersey, Virgin Mobile USA Inc. (NYSE: VM) -- http://www.virginmobileusa.com/-- is a provider of wireless, pay-as-you-go communications services without annual contracts. Voice pricing plans range from monthly options with unlimited nights and weekends to by-the-minute offers, allowing consumers to adjust how and what they pay according to their needs. Virgin Mobiles full slate of handsets, including the Wild Card, Super Slice and Cyclops, are available at top retailers in more than 35,000 locations nationwide and online, with Top-Up cards available at more than 130,000 locations. Virgin Mobile USA was founded as a joint venture between Sprint Nextel and the Virgin Group, and launched its service nationally in July 2002. As of September 30, 2008, the company served 5.2 million customers. According to Virgin Mobile's unaudited balance sheet on Sept. 30, 2008, the company has $395,989,000 in assets, $695,081,000 in liabilities and $355,482,000 stockholders' deficit. As reported by the Troubled Company Reporter on December 5, 2008, Virgin Mobile has said that, based on its expected cash flows from operations and available funds from its revolving credit facility, management believes that the company has the ability to finance its projected operating, investing and financing requirements of existing operations and planned customer growth through at least September 30, 2009. In June, the company entered into a Second Amendment to its Revolving Credit Facility. The amendment increased the Virgin Group's lending commitment from $75 million to $100 million and added SK Telecom as a new lender with a lending commitment of $35 million. In October 2008, the company borrowed an additional $20.0 million under the Revolving Credit Facility, bringing the total amount outstanding under the Revolving Credit Facility to $75.0 million. WARD CLEMMONS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Ward W. Clemmons 10909 Woodland Drive Fort Smith, AR 72916 Joint Debtor: Anna Marie Clemmons Bankruptcy Case No.: 08-74839 Chapter 11 Petition Date: November 25, 2008 Court: United States Bankruptcy Court Western District of Arkansas (Fort Smith) Debtor's Counsel: Darrell W. Johnson, Esq. Attorney at Law 20 North 6th Street Fort Smith, AR 72901-2102 Tel: (479) 783-0207 Email: darrellwj16@yahoo.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition and a list of the Debtor's largest unsecured creditors are available for free at: http://bankrupt.com/misc/arwb08-74839.pdf WASHINGTON COAST I: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Washington Coast I LLC 10325 East Penstamin Drive Scottsdale, AZ 85255 Bankruptcy Case No.: 08-18608 Chapter 11 Petition Date: December 22, 2008 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: George B. Nielsen Jr. Debtor's Counsel: Allan D. Newdelman, Esq. Allan D. Newdelman PC 80 E. Columbus Ave. Phoenix, AZ 85012 Tel.: (602) 264-4550 Fax : (602) 277-0144 Email: anewdelman@qwestoffice.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of 20 largest unsecured creditors together with its petition. The petition was signed by Matthew A. Doney, Managing Member of the company. WERNER LADDER: Judge Carey to Handle $1BB Suit vs. Shareholders --------------------------------------------------------------- Old Ladder Litigation Co. LLC's lawsuit against more than 200 former shareholders, directors, officers, and advisors of Werner Holding Co., Inc., and affiliates, has been referred to Judge Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware. The lawsuit, which seeks about $1,000,000,000 in damages and awards, was originally filed in the U.S. District Court for the Southern District of New York. As reported by the Troubled Company Reporter on Oct. 20, 2008, Judge Richard M. Berman of the U.S. District Court for the New York District Court authorized the transfer of venue. The lawsuit, filed on Jan. 24, 2008, by the Old Ladder Litigation Co., LLC, as Litigation Designee, seeks, among other things, to recover on behalf of Werner's unsecured creditors in excess of $480,000,000 in alleged "fraudulent transfers" made by Werner to certain entities, including Investcorp Bank, B.S.C., in 1997 and 2003. About Werner Ladder Based in Greenville, Pennsylvania, Werner Holding Co. (DE) Inc. aka Werner Ladder Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The Debtors are represented by the firm of Willkie Farr & Gallagher LLP as lead counsel and the firm of Young, Conaway, Stargatt & Taylor LLP as co-counsel. Rothschild Inc. is the Debtors' financial advisor. The Official Committee of Unsecured Creditors is represented by the firm of Winston & Strawn LLP as lead counsel and the firm of Greenberg Traurig LLP as co-counsel. Jefferies & Company serves as the Creditor Committee's financial advisor. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. On June 19, 2007, the Creditors Committee submitted its Liquidating Plan and Disclosure Statement for Werner. On Sept. 10, 2007, the Committee filed an Amended Plan and Disclosure Statement. On Sept. 13, 2007, the Committee filed its 2nd Amended Plan and on September 14, the Court approved the adequacy of the Amended Disclosure Statement explaining the 2nd Amended Plan. The Court confirmed the 2nd Amended Plan on October 25. New Werner Holding Co. (DE), LLC, a newly formed corporation, purchased substantially all the Debtors' assets in 2007. New Werner is a separate operating company. (Werner Ladder Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). WERNER LADDER: Fox Rothschild Sues Old Ladder for Fees ------------------------------------------------------ Fox Rothschild, LLP, asks the U.S. Bankruptcy Court for the District of Delaware for judgment in its favor for amounts in excess of $75,000, in connection with services rendered to Old Ladder Litigation Co., LLC, as litigation designee to Werner Holding Co. and its affiliates. Old Ladder Litigation Co. LLC, as litigation designee, previously retained Fox Rothschild to prosecute certain adversary actions against various individuals. In connection with an agreement relating to Fox's retention, the Litigation Designee, agreed to compensate the firm on a 20% contingent fee basis for all recoveries whether or not a lawsuit is commenced or settlement is ultimately reached by Fox or any other firm. In addition, the agreement provides that if Fox files a lawsuit on Old Ladder's behalf to recover any alleged preferential payments aggregating less than $10,000, in addition to the Contingent Fee, Fox's recoveries totals 25%. The engagement and billing attorney at the time was Daniel K. Astin, Esq. On August 8, 2008, Mr. Astin left Fox and joined Ciardi Ciardi and Astin PC. Pursuant to the Fee and Billing Procedure Agreement, Fox tells the Court that it prosecuted and negotiated settlements in several preference actions totaling $508,611, of which $400,298 has already been paid over by Fox to Old Ladder before Mr. Astin's departure. The remaining $108,312 is in the process of being documented and finalized. Based on contingency percentages set in the Billing and Procedure Agreement, Fox asserts that Old Ladder owes it at least $103,648. In addition to Preference Actions, Old Ladder engaged Fox to represent it in a fee contest. Pursuant to the engagement, Old Ladder incurred legal fees amounting to $46,555 for services rendered through July 31, 2008. Old Ladder also engaged Fox's services as co-counsel in an action in the U.S. District Court for the Southern District of New York. Fox reveals that Old Ladder incurred legal fees aggregating $39,979 for services rendered through July 31, 2008. Furthermore, Levine Leichtman Capital Partners III LP engaged Fox to represent it in connection with the bankruptcy plan confirmation in the bankruptcy case captioned Old Ladder Co., f/k/a Werner Co., C.A., No. 06-10580 (KJC). Pursuant to that engagement, Fox incurred $13,302 of fees and costs through July 31, 2008. Fox reveals that Levine Leichtman incurred legal fees and costs amounting to $13,302 for services rendered regarding plan confirmation services and $384 for services rendered in the Buffets case. Fox says that to date, despite repeated requests for payment of the Fees, Old Ladder and Levine Leichtman has refused to pay Fox any of the outstanding amounts owed. About Werner Ladder Based in Greenville, Pennsylvania, Werner Holding Co. (DE) Inc. aka Werner Ladder Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The Debtors are represented by the firm of Willkie Farr & Gallagher LLP as lead counsel and the firm of Young, Conaway, Stargatt & Taylor LLP as co-counsel. Rothschild Inc. is the Debtors' financial advisor. The Official Committee of Unsecured Creditors is represented by the firm of Winston & Strawn LLP as lead counsel and the firm of Greenberg Traurig LLP as co-counsel. Jefferies & Company serves as the Creditor Committee's financial advisor. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. On June 19, 2007, the Creditors Committee submitted its Liquidating Plan and Disclosure Statement for Werner. On Sept. 10, 2007, the Committee filed an Amended Plan and Disclosure Statement. On Sept. 13, 2007, the Committee filed its 2nd Amended Plan and on September 14, the Court approved the adequacy of the Amended Disclosure Statement explaining the 2nd Amended Plan. The Court confirmed the 2nd Amended Plan on October 25. New Werner Holding Co. (DE), LLC, a newly formed corporation, purchased substantially all the Debtors' assets in 2007. New Werner is a separate operating company. (Werner Ladder Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). WERNER LADDER: Wilkie Farr Faces Lawsuit for Negligence ------------------------------------------------------- Old Ladder Litigation Co., LLC, as litigation designee to Werner Holding Co. and its affiliates, filed a suit before the U.S. Bankruptcy Court for the District of Delaware seeking damages against Willkie Farr & Gallagher, LLP, for professional negligence and breaches of contract in connection with legal services it provided to Werner Co. and its affiliates. The Litigation Designee alleges that before the Petition Date, upon Willkie Farr's advise, the Debtors entered into a 2005 refinancing, which only served to deepen their insolvency and prolonged inevitable bankruptcy filing. Willkie Farr, the Litigation Designee asserts, failed to properly advise the Debtors' insiders that the 2005 refinancing was a breach of their fiduciary duties to creditors because the refinancing would only serve to further their self-interests and prolong an inevitable bankruptcy filing. The Litigation Designee further accuses Willkie Farr of breaching its duties in connection with its advice regarding the timing of the filing of bankruptcy. "Willkie should have advised [the Debtors] to file bankruptcy prior to June 12, 2006 in order to preserve the statute of limitations on breach of fiduciary claims under Delaware law, or alternatively, should have advised disinterested insiders to file prior to June 12, 2006," Daniel K. Astin, Esq., at Ciardi Ciardi & Astin PC, in Wilmington, Delaware, tells the Court. As a result of Willkie's negligence, the Debtors suffered damages in an amount to be proven at trial, the Litigation Designee alleges. The Litigation Designee asks the Court for a trial by jury of any issues triable. About Werner Ladder Based in Greenville, Pennsylvania, Werner Holding Co. (DE) Inc. aka Werner Ladder Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The Debtors are represented by the firm of Willkie Farr & Gallagher LLP as lead counsel and the firm of Young, Conaway, Stargatt & Taylor LLP as co-counsel. Rothschild Inc. is the Debtors' financial advisor. The Official Committee of Unsecured Creditors is represented by the firm of Winston & Strawn LLP as lead counsel and the firm of Greenberg Traurig LLP as co-counsel. Jefferies & Company serves as the Creditor Committee's financial advisor. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. On June 19, 2007, the Creditors Committee submitted its Liquidating Plan and Disclosure Statement for Werner. On Sept. 10, 2007, the Committee filed an Amended Plan and Disclosure Statement. On Sept. 13, 2007, the Committee filed its 2nd Amended Plan and on September 14, the Court approved the adequacy of the Amended Disclosure Statement explaining the 2nd Amended Plan. The Court confirmed the 2nd Amended Plan on October 25. New Werner Holding Co. (DE), LLC, a newly formed corporation, purchased substantially all the Debtors' assets in 2007. New Werner is a separate operating company. (Werner Ladder Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). WERNER LADDER: Litig. Designee Wants PWC Fees Disgorged ------------------------------------------------------- Old Ladder Litigation Co., LLC, as litigation designee to Werner Holding Co. and its affiliates, asks the U.S. Bankruptcy Court for the District of Delaware to compel PricewaterhouseCoopers LLP to disgorge postpetition fees paid by the Debtors. The Debtors employed PricewaterhouseCoopers as tax advisors and auditors. The employment was supported by an affidavit, which disclosed that PWC received a total of $217,189 from the Debtors during the 90-day period that preceded the Petition Date. PwC failed to disclose that it received $64,763 during the Preference Period. The Court approved the Debtors' retention of PWC and accordingly ruled that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. On June 11, 2008, the Litigation Designee filed a complaint seeking the return of $280,952 in prepetition transfers made by the Debtors to PWC. The complaint is still pending and awaiting judgment from the Court. On November 30, 2007, PwC filed its final fee application seeking allowance and payment of $519,271. In December 2007, the Litigation Designee objected to the Final Fee Application, seeking, among others, to avoid any potential res judicata effect that an order approving the Final Fee Application may have with regard to the Litigation Designee's ability to seek disgorgement of fees predicated upon malpractice litigation that the Litigation Designee has commenced against PWC in the U.S. District Court for the Southern District of New York. PWC has not filed a supplemental affidavit to disclose the pendency of the New York Litigation, and that failure to disclose may constitute independent grounds for disgorgement, the Litigation Designee asserts. As of November 24, 2008, the Court has not entered an Order approving the Final Fee Application, based on the Litigation Designee's Objection. "PWC has demonstrated an apparent indifference to the veracity of the disclosures that it makes to this Court and parties in interest through the retention process," the Litigation Designee asserts. About Werner Ladder Based in Greenville, Pennsylvania, Werner Holding Co. (DE) Inc. aka Werner Ladder Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The Debtors are represented by the firm of Willkie Farr & Gallagher LLP as lead counsel and the firm of Young, Conaway, Stargatt & Taylor LLP as co-counsel. Rothschild Inc. is the Debtors' financial advisor. The Official Committee of Unsecured Creditors is represented by the firm of Winston & Strawn LLP as lead counsel and the firm of Greenberg Traurig LLP as co-counsel. Jefferies & Company serves as the Creditor Committee's financial advisor. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. On June 19, 2007, the Creditors Committee submitted its Liquidating Plan and Disclosure Statement for Werner. On Sept. 10, 2007, the Committee filed an Amended Plan and Disclosure Statement. On Sept. 13, 2007, the Committee filed its 2nd Amended Plan and on September 14, the Court approved the adequacy of the Amended Disclosure Statement explaining the 2nd Amended Plan. The Court confirmed the 2nd Amended Plan on October 25. New Werner Holding Co. (DE), LLC, a newly formed corporation, purchased substantially all the Debtors' assets in 2007. New Werner is a separate operating company. (Werner Ladder Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). WILLIAM MULLENBACH: Case Summary & 20 Largest Unsec. Creditors -------------------------------------------------------------- Debtor: William Leon Mullenbach 13175 State Highway 160 Las Vegas, NV 89161 Bankruptcy Case No.: 08-25233 Chapter 11 Petition Date: December 19, 2008 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Mike K. Nakagawa Debtor's Counsel: Christopher G. Gellner, Esq. 302 E. Carson Ave. #808 Las Vegas, NV 89101 Tel.: (702) 386-9393 Email: cggellner@lvcoxmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition and a list of the Debtor's largest unsecured creditors are available for free at: http://bankrupt.com/misc/nvb08-25233.pdf The petition was signed by William Leon Mullenbach. YOUNG BROADCASTING: Gabelli Discloses 6.51% Equity Stake -------------------------------------------------------- Mario J. Gabelli disclosed in a November regulatory filing that his Gabelli Funds, LLC, Gamco Asset Management Inc., Gamco Investors, and Teton Advisors, Inc., own in the aggregate 1,421,000 shares, representing 6.51% of the 21,825,520 outstanding shares of Young Broadcasting Inc. common stock. As reported by the Troubled Company Reporter on November 21, 20087, Young Broadcasting indicated in a regulatory filing with the Securities and Exchange Commission that it is exploring several ways to improve liquidity and cash flow. Despite actions that the company has taken to generate cost savings and minimize negative cash flow, there is no assurance that the company will be able to restructure its debt and generate sufficient cash flow from operations or that future business and financing alternatives will be available in an amount sufficient to enable the company to fund its liquidity needs for the next 12 months. Young Broadcasting had $574.6 million in total assets and $980.4 million in total liabilities, resulting in $405.8 million in stockholders' deficit as of September 30, 2008. Young Broadcasting's debt consists of $339.0 million under the term loan portion of the Senior Credit Facility, $484.3 million of Senior Subordinated Notes and $1.4 million of bond premiums. In addition, at Sept. 30, 2008, the company had an additional $20.0 million of undrawn amount under the Senior Credit Facility. Young Broadcasting has been trying to unload its KRON-TV station in San Francisco, to no avail. Young Broadcasting has said in a statement, "There are no current active discussions with possible buyers of KRON-TV." The company has said it is actively engaged in discussions with various parties about financing alternatives, including restructuring a significant portion of the company's outstanding debt and obtaining incremental capital as necessary. The company is also taking action to improve cash flow by implementing additional cost savings measures. If Young Broadcasting is unsuccessful in improving cash flow and completing these financing alternatives, the company may fail to comply with the covenant in its Senior Credit Facility requiring maintenance of $10 million of cash and short term investments and in the future may be unable to meet certain of its obligations as they come due. An event of default under any of the company's debt instruments could result in the acceleration of the company's payment obligations under that debt, which could have a material adverse effect on the company's business, consolidated financial results and operations, and could require the company to seek protection under Chapter 11 of the U.S. Bankruptcy Code. About Young Broadcasting Headquartered in New York City, Young Broadcasting Inc. -- http://www.youngbroadcasting.com/-- owns ten television stations and the national television representation firm, Adam Young Inc. Five stations are affiliated with the ABC Television Network, three are affiliated with the CBS Television Network, one is affiliated with the NBC Television Network, and one is affiliated with MyNetwork. In addition, KELO-TV-Sioux Falls, SD is also the MyNetwork affiliate in that market through the use of its digital channel capacity. * * * As reported in the Troubled Company Reporter on Sept. 9, 2008, Standard & Poor's Ratings Services lowered its corporate credit rating and issue-level ratings on New York City-based Young Broadcasting Inc. The corporate credit rating was lowered to 'CCC' from 'CCC+'. The rating outlook is negative. The company had about $826 million of outstanding debt as of June 30, 2008. * Stevens & Lee's Goldberger Among First INSOL Int'l Fellows ------------------------------------------------------------ Leonard P. Goldberger, Esq., a Stevens & Lee shareholder, has successfully completed INSOL International's inaugural Global Insolvency Practice Course, with honors, and has now become an INSOL Fellow. INSOL International is a world-wide federation of national associations for accountants and lawyers who focus their practices on turnaround and insolvency. There are currently 40 member associations world-wide with over 10,000 professionals participating as members of INSOL International. Leonard P. Goldberger has over 32 years of experience practicing business bankruptcy law. He represents insurers in asbestos, mass tort and environmental bankruptcy cases and works with domestic and foreign investors in the acquisition and financing of financially- distressed businesses. A former Vice President, Director and Executive Committee member of the American Bankruptcy Institute, Mr. Goldberger was also the Chair of the American Bar Association's Committee on Insurance Coverage Subcommittee on Insolvency, and a member of the ABA's Litigation Section and its Tort Trial and Insurance Practice Section. Mr. Goldberger has lectured and written extensively on bankruptcy law topics and currently serves on the editorial board of the American Bankruptcy Institute Journal. He has appeared as a guest commentator on CourtTV. Mr. Goldberger received a J.D. from Villanova University School of Law and a B.A., summa cum laude, from Temple University. ABOUT STEVENS & LEE Among the 200 largest law firms in the nation, Stevens & Lee -- http://www.stevenslee.com/-- is part of a multidisciplinary professional services platform which also consists of a FINRA- licensed investment bank, an SEC registered money manager, a D&O and E&O insurance risk consulting business, a swap and derivative advisory business, federal and state lobbying units, a health care risk consulting business and a government incentives and sales and use tax consulting business. The firm's 240 multidisciplinary professionals represent clients throughout the Mid-Atlantic region and across the country from 15 offices in: Reading, Harrisburg, Philadelphia, Valley Forge, Lancaster, the Lehigh Valley, Scranton and Wilkes-Barre, Pennsylvania; Princeton and Cherry Hill, New Jersey; Wilmington, Delaware; New York City and Charleston, South Carolina. * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Share- Total holders Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ ------- ------- ABSOLUTE SOFTWRE ABT CN 107 (3) 31 APP PHARMACEUTIC APPX US 1,105 (42) 260 ARBITRON INC ARB US 162 (9) (39) BARE ESCENTUALS BARE US 272 (25) 125 BLOUNT INTL BLT US 485 (20) 119 CABLEVISION SYS CVC US 9,717 (4,966) (1,583) CENTENNIAL COMM CYCL US 1,394 (1,026) 86 CHENIERE ENERGY CQP US 2,021 (312) 179 CHENIERE ENERGY LNG US 3,049 (266) 423 CHOICE HOTELS CHH US 350 (91) (8) CLOROX CO CLX US 4,587 (364) (396) CV THERAPEUTICS CVTX US 392 (226) 286 DELTEK INC PROJ US 188 (62) 34 DISH NETWORK-A DISH US 7,177 (2,129) (1,318) DOMINO'S PIZZA DPZ US 441 (1,437) 84 DUN & BRADSTREET DNB US 1,642 (554) (206) DYAX CORP DYAX US 91 (28) 33 ENERGY SAV INCOM SIF-U CN 464 (263) (92) EXELIXIS INC EXEL US 255 (23) (1) EXTENDICARE REAL EXE-U CN 1,621 (31) 125 FERRELLGAS-LP FGP US 1,510 (12) (114) GARTNER INC IT US 1,115 (15) (253) GENCORP INC GY US 1,014 (22) 66 GENERAL MOTO-CED GM AR 110,425 (58,994) (18,461) GENERAL MOTORS GM US 110,425 (58,994) (18,461) HEALTHSOUTH CORP HLS US 1,980 (874) (218) IMAX CORP IMX CN 238 (91) 41 IMAX CORP IMAX US 238 (91) 41 INCYTE CORP INCY US 265 (177) 216 INTERMUNE INC ITMN US 206 (92) 134 KNOLOGY INC KNOL US 647 (44) 13 LINEAR TECH CORP LLTC US 1,665 (378) 1,109 MEDIACOM COMM-A MCCC US 3,688 (279) (311) MOODY'S CORP MCO US 1,694 (894) (331) NATIONAL CINEMED NCMI US 569 (476) 86 NAVISTAR INTL NAV US 11,557 (228) 1,501 NPS PHARM INC NPSP US 202 (208) 90 OCH-ZIFF CAPIT-A OZM US 2,224 (173) - OSIRIS THERAPEUT OSIR US 29 (8) (14) OVERSTOCK.COM OSTK US 145 (4) 33 PALM INC PALM US 661 (151) (40) REGAL ENTERTAI-A RGC US 2,557 (224) (112) REVLON INC-A REV US 877 (999) 8 ROTHMANS INC ROC CN 545 (213) 102 SALLY BEAUTY HOL SBH US 1,527 (697) 367 SONIC CORP SONC US 836 (64) (13) STEREOTAXIS INC STXS US 55 (5) 3 SUCCESSFACTORS I SFSF US 168 (3) 4 SUN COMMUNITIES SUI US 1,222 (28) - SYNTA PHARMACEUT SNTA US 91 (35) 58 TAUBMAN CENTERS TCO US 3,182 (20) - TEAL EXPLORATION TEL SJ 56 (22) (62) THERAVANCE THRX US 255 (125) 184 UAL CORP UAUA US 20,731 (1,282) (1,583) UST INC UST US 1,402 (326) 237 WEIGHT WATCHERS WTW US 1,110 (901) (270) WESTERN UNION WU US 5,504 (90) 319 WR GRACE & CO GRA US 3,754 (179) 970 ********* 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 ***