/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090105.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, January 5, 2009, Vol. 13, No. 4 Headlines 222 SOUTH CALDWELL: Creditors Unlikely to Receive Payment ABIGAIL ADAMS: Bank Unit to Merge with Premier in All-Stock Deal ABITIBI-CONSOLIDATED: Posts C$181 Million Net Loss in 3rd Quarter ADVANCED BIOENERGY: Auditor Raises Going Concern Doubt ALLIED SECURITY: September 30 Balance Sheet Upside-Down by $30MM AMERICAN TIRE: Moody's Affirms 'B3' Corp. Rating on Am-Pac Deal AMERICAN TONERSERV: Completes iPrint Acquisition for $1.5MM Cash AMERICAN TONERSERV: Appoints Monarch Bay as Investment Banker AMERICAN FIBERS: Asks Approval of $1.5MM Sale of 25-Acre Lot AMERICAN FIBERS: Court Approves Bid Procedures; Auction Set Jan. 5 ARK II MANUFACTURING: Assets to be Sold at Jan. 10 Public Auction ASSURED PHARMACY: Sept. 30 Balance Sheet Upside Down by $6.9MM ASTORIA BAY: Chapter 11 Filing Cancels Taggart Building Auction AXESSTEL INC: Bryan B. Min Resigns as Board Chairman BERNARD MADOFF: Releases Info on Assets; SEC Won't Release Data BERNARD MADOFF: SIPC, Trustee Report Initial Recovery of Assets BRAY & GILLESPIE: Wants to Borrow $2-Mil. from Glenmont Capital BRITTANIA BULKERS: Voluntary Chapter 15 Case Summary BROADSTRIPE LLC: Case Summary & 28 Largest Unsecured Creditors BSML INC: Appoints Dr. Robert J. Troell to Board of Directors BUFALLO THUNDER: Liquidity Concerns Cue S&P to Cut Ratings to B- CAPITAL CORP: Posts $54.6 Million Net Loss in Third Quarter CELLEGY PHARMA: September 30 Balance Sheet Upside Down by $2,000 CENTERLINE CAV: Picerne CA Selling CAV's Interest in Partnership CHESAPEAKE CORP: Chapter 11 Petitions Prompt Moody's 'D' Rating CHESAPEAKE CORP: S&P's Corp. Credit Rating Tumble to 'D' CHINA HEALTH: Sept. 30 Balance Sheet Upside Down by $4.9 Million CHRISTIAN BERNARD: Files for Chapter 7 Liquidation CHRYSLER LLC: Receives $4 Billion Low-Interest Loan from Gov't COMFORT COMPANY: Court Sets Jan. 26 Deadline to Accept/Reject Plan CONSTAR INTERNATIONAL: Chapter 11 Petition Cues Moody's 'D' Rating CONSTAR INTERNATIONAL: Expects to Emerge Not Later than March 30 CONSTAR INTERNATIONAL: S&P Cuts Rating on $220 Mil. Notes to 'D' CONTINENTAL AIRLINES: May Deepen Partnership with United Airlines CREATIVE LOAFING: Lays Off Seven Staffers CREDIT SUISSE: S&P Cuts Rating on Class M Certificates to 'D' COUNT ME IN: Sent to Chapter 7 By Alaska Sports Clubs DELTA AIR: Reluctant on NWA Dreamliner Orders DELTEK INC: September 30 Balance Sheet Upside-Down by $62 Million DOUBLE EAGLE: Auditor Raises Going Concern Doubt DUKE FUNDING: S&P Junks Ratings on Class A-1 & A-2 Notes DYNAMIC RESPONSE: Sept. 30 Balance Sheet Upside Down by $3.7MM EASTBRIDGE INVESTMENT: Posts $107,865 Net Loss in 3rd Quarter EDDIE WIGGINS: Files for Chapter 11 Due to Unpaid Debts by GM EMCORE CORPORATION: Auditor Raises Going Concern Doubt FANNIE MAE: Says IndyMac Must Repurchase $1BB of Home Mortgages FEDERAL TRUST: Posts $10.2 Million Net Loss in 3rd Quarter FOOTHILLS RESOURCES: Has Until Jan. 30 to Deliver Financials FORD MOTOR: Vehicle Sales in US Drop Almost 19% in 2008 FORSTER DRILLING: CFO and Controller Garrick Clayton Steps Down FRONTIER AIRLINES: Has Long-Term Labor Deal with Maintenance Staff FRONTIER AIRLINES: Inks Long Term Pact with Pilots FRONTIER AIRLINES: Court OKs Rejection of Pepsi Center Sponsorship GENERAL DATACOMM: Can't File Annual Report on Time GENERAL GROWTH: Picks Weil Gotshal as New Bankruptcy Counsel GENERAL MOTORS: Board of Directors Approves Amendment of Bylaws GINN-LA CONDUIT: Files for Chapter 7 Liquidation GINN-LA CS: Files for Chapter 7 Liquidation GMAC LLC: Ezra Merkin May Leave Chairperson Post at Unit GMAC LLC: S&P Downgrades Selected Ratings to 'SD' From 'CC' HARRAH'S ENTERTAINMENT: Affiliate Issues $214MM of 10% Sr. Notes HARRAH'S ENTERTAINMENT: Board Amends Mgt. Equity Incentive Plan HARRAH'S ENTERTAINMENT: Completes $2.1BB Notes Exchange Offering ICEWEB INC: Auditor Raises Going Concern Doubt INDYMAC BANK: Must Repurchase $1BB Home Mortgages, Says Fannie JACKPINE FOREST: Files for Bankruptcy; Lays off Over 100 Workers JOHNSON BROADCASTING: Files Schedules of Assets and Liabilities LAND INVESTORS: Moody's Downgrades Corporate Family Rating to 'Ca' LEHMAN BROTHERS: Seeks July 13 Extension to File Ch. 11 Plan LEHMAN BROTHERS: Sec. 341(a) Meeting Scheduled for Jan. 29 LEHMAN BROTHERS: Court Formally Approves Neuberger Sale LEHMAN BROTHERS: Sues Whitworth to Foreclose on Property LEHMAN BROTHERS: Court OKs Settlement of Barclays' $7-Bil. Claim LEHMAN BROTHERS: Court Approve Settlement with French Units LEHMAN BROTHERS: LBI Trustee Wants to Probe Former Officers LEHMAN BROTHERS: Seeks to Sell Interest in Loan to Thompson LEVEL 3: S&P Corrects December 29 Rating Press Release LEVEL 3: S&P Downgrades Rating on Convertible 2009 Notes to 'D' LIVE CURRENT: Posts $3 Million Net Loss in Quarter Ended Sept. 30 LYONDELLBASELL: Defers Payments to Jan. 4, CRO Awaits Ch. 11 MAGNA ENTERTAINMENT: Inks New Loan Agreement with MI Developments MAGNA ENTERTAINMENT: Inks Recapitalization Transactions with MID MAXWELL COMMUNICATION: New York Court Closes Case After 17 Years MERCURY COMANIES: Court Extends Bar Date to January 30, 2009 MERCURY COMPANIES: Obtains Approval to Sell Aircraft to Global Jet MERCURY COMPANIES: Wants Plan Filing Period Extended to Feb. 23 MEXICAN RESTAURANT ASSOCIATES: Files for Chapter 7 Liquidation MILLSTONE II: S&P Withdraws 'AAA' Rating on Class X Notes MOHAWK CO: Sells Equipment & Fixtures to Repay Creditors MONOGEN INC: Selects Nancy Ross as Trustee Under CCAA MPC CORP: To Cease Operations; Will Liquidate Remaining Assets MSX INTERNATIONAL: Decline in Earnings Cue Moody's Junk Rating NEVADA UENO: Chapter 11 Bankruptcy Filing Surprises Investors NORTHWEST AIRLINES: Delta Reluctant on NWA Dreamliner Orders OCCULOGIX INC: September 30 Balance Sheet Upside-Down by $3MM ONCOVISTA INNOVATIVE: Sept. 30 Balance Sheet Upside Down by $7.5MM PARENT COMPANY: Faces Nasdaq Delisting Due to Chapter 11 Filing PHIBRO ANIMAL: S&P Keeps 'B' Corp. Credit Rating; Outlook Neg. PROGRESSIVE GAMING: S&P's Corporate Credit Rating Tumbles to 'D' PULTE HOMES: Amends Credit Agreement with JPMorgan Chase, et. al. PULTE HOMES: Board Suspends Payment of Regular Quarterly Dividend QUICK-MED TECH: Sept. 30 Balance Sheet Upside Down by $3.4 Million RADICAL BUNNY: Court Appoints G. Grant Lyon as Ch. 7 Trustee RECYCLED PAPER: Files for Chapter 11 to Close Asset Sale to Rival RECYCLED PAPER: Case Summary & 30 Largest Unsecured Creditors RHODES COMPANIES: Moody's Downgrades Corp. Family Rating to 'Ca' SCANTEK MEDICAL: Files for Chapter 11 Bankruptcy in New Jersey SCANTEK MEDICAL: Case Summary & 20 Largest Unsecured Creditors SINGLE TOUCH: Auditor Raises Going Concern Doubt SUNRISE SENIOR: Enters Into Standstill Agreement with Natixis SUNWEST MANAGEMENT: Lawsuits Lead to CEO's Bankruptcy Filing SUPERIOR AIR: Case Summary & 20 Largest Unsecured Creditors TONGLI PHARMACEUTICALS: Still Seeking to Refinance $1 Million Note TROPICANA INN: Wants to Employ William Cooper as Special Counsel TRUMP ENTERTAINMENT: Reaches Forbearance Pact With Lenders UAL CORP: Expects 2.5%-3.5% YoY Revenue for 4th Quarter 2008 UAL CORP: Sells Jets to Boost Liquidity; Pilots Still Reject CEO UAL CORP: May Deepen Partnership with Continental Airlines UAL CORP: To Face Antitrust Charges In New Zealand UAL CORP: To Implement 250 More Job Cuts in January UNITED ENERGY: Posts $293,783 Net Loss in Quarter Ended Sept. 30 V2K INTERNATIONAL: Auditor Raises Going Concern Doubt VINEYARD NATIONAL: Posts $28.6 Million Net Loss in 3rd Quarter WALDEN RESERVE: To Auction 5,835-Acre Property in Tennessee WATERBROOK PENINSULA: Court Extends DIP Loan for Add'l 30 Days WAVERLY GARDENS: May Employ HTG Consultants as Valuation Expert WILLIAM LYON: Moody's Downgrades Corporate Family Rating to 'Caa3' * Fitch Updates Quantitative Insurer Ratings on 8 Life Insurers * S&P Says High-Yield Issuance Ends 2008 on Sour Note * Treasury Releases Guidelines for Targeted Investment Program * BOND PRICING: For the Week of Dec. 29 - Jan. 2, 2009 ********* 222 SOUTH CALDWELL: Creditors Unlikely to Receive Payment --------------------------------------------------------- Susan Stabley at Charlotte Business Journal reports that contractors and condo buyers that put down deposits at engineer Pete Verna's bankrupt 222 South Caldwell Street Limited Partnership are unlikely to get paid. The Business Journal relates that 222 South Caldwell's unfinished uptown tower was sold for $14.2 million in a foreclosure auction that wiped out most claims against the property. According to the report, the sale is subject to a 10-day upset-bid period. The building at the corner of South Caldwell and Third streets, says the report, is the primary asset belonging to 222 South Caldwell. Mr. Verna will still submit financial documents as part of the bankruptcy process, the Business Journal says, citing Langdon Cooper, the court-appointed trustee over the property. 222 South Caldwell Street Limited Partnership is a North Carolina limited partnership. As reported by Charlotte Business Journal in August 2008, C.P. Buckner Steel Erection Inc., Southern Steel Co., and Gary Williams have jointly filed a petition in U.S. Bankruptcy Court to put 222 South Caldwell under Chapter 7 liquidation, claiming a total of $1.85 million against the Debtor. ABIGAIL ADAMS: Bank Unit to Merge with Premier in All-Stock Deal ---------------------------------------------------------------- Premier Financial Bancorp, Inc. (NASDAQ/GM-PFBI) in Huntington, West Virginia, a $732 million community bank holding company with six bank subsidiaries, and Abigail Adams National Bancorp, Inc. (NASDAQ/GM-AANB) a $436 million bank holding company headquartered in Washington, DC, have entered into a definitive agreement whereby Premier will acquire Adams in a 100% stock exchange valued at approximately $10.9 million based on Premier's closing stock price on December 31, 2008. The resulting community banking organization will have consolidated assets of approximately $1.2 billion, with approximately $950 million in total deposits and $800 million in total loans. According to American Bankruptcy Institute, the investors who control Abigail Adams, the parent company of the troubled Adams National Bank, have decided to merge it with a West Virginia bank that they also control in a deal designed to ensure that Adams National can weather the financial crisis. Premier President and CEO Robert W. Walker commented, "We are pleased that Adams has chosen to merge with Premier. We certainly have a history of successfully working through formal regulatory agreements, reorganizing managerial structures and systems, and returning banking franchises to profitability. We believe the merger with Adams presents us with another opportunity to revitalize an organization to become a healthy and profitable community banking institution." Adams National Bank Executive Vice President Lou Akers stated, "We are excited by the opportunities to merge with Premier. We believe Premier is a vibrant and growing community bank franchise. Their management team has a history of operating banks that are strong, healthy performers within their local communities with an inviting, friendly community bank atmosphere. Through Premier's network of affiliated community banks, we will be able to complement Adams current loan and deposit products." Abigail Adams is parent company to two subsidiary banks, Adams National Bank, a $344 million bank headquartered in Washington, DC and Consolidated Bank & Trust, a $92 million bank headquartered in Richmond, Virginia. Premier Financial Bancorp announced a 6.8% increase in its third quarter 2008 earnings over their third quarter 2007 earnings. Premier's year-to-date earnings through September 30, 2008 totaled $5.634 million compared to $5.383 million in the first nine months of 2007. Premier also owns Boone County Bank in Madison, West Virginia, First Central Bank located in Philippi, West Virginia and Traders Bank in Ravenswood, West Virginia. In Kentucky, Premier's affiliates are Citizens Deposit Bank in Vanceburg and Farmers Deposit Bank in Eminence. Ohio River Bank headquartered in Ironton, Ohio is also a community bank owned by Premier. Under terms of the definitive agreement, each share of Adams common stock will be converted into 0.4461 shares of Premier common stock. Premier anticipates that it will issue approximately 1,545,000 shares of its common stock. The transaction, which is subject to satisfaction of various contractual conditions and requires approval by regulatory agencies and the shareholders of Adams and Premier, is anticipated to close sometime in the first half of 2009. Baxter Fentriss and Company served as financial advisor and investment banker for Premier while RP Financial L.C. served as financial advisor and investment banker for Adams. ABITIBI-CONSOLIDATED: Posts C$181 Million Net Loss in 3rd Quarter ----------------------------------------------------------------- Abitibi-Consolidated Inc. experienced a liquidity shortfall and faced significant near-term liquidity challenges at the end of the first quarter of 2008. "These circumstances lent substantial doubt as to the ability of Abitibi to meet its obligations as they became due and, accordingly, substantial doubt as to the appropriateness of Abitibi's use of accounting principles applicable to a going concern," William G. Harvey, vice president and treasurer, said in a regulatory filing dated November 14, 2008. As of March 31, 2008, the company had a total of C$355 million (US$346 million) of long-term debt maturing in 2008: C$201 million (US$196 million) principal amount of its 6.95% Senior Notes due April 1, 2008 and C$154 million (US$150 million) principal amount of its 5.25% Senior Notes due June 20, 2008, issued by Abitibi- Consolidated Company of Canada, a wholly owned subsidiary of Abitibi. Additionally, the company had revolving bank credit facilities with commitments totaling C$710 million (US$695 million) maturing in the fourth quarter of 2008. These amounts were successfully refinanced on April 1, 2008. Abitibi's primary sources of liquidity and capital resources are cash on hand, cash provided from operations and available proceeds under the accounts receivable securitization program. In addition, cash generated by Donohue Corp. is used, in part, to service the debt obligations of Abitibi since Abitibi receives interest from AbitibiBowater Inc. on the note issued as consideration for the transfer of Donohue to another subsidiary of AbitibiBowater. As of September 30, 2008, Abitibi had cash on hand of approximately C$198 million. Abitibi's third quarter 2008 cash used in operations was C$17 million, an improvement of C$164 million as compared to the second quarter of 2008. Abitibi is not expected to have sufficient cash to repay its $347 million term loan due March 30, 2009, without significant asset sales or external financing as presently contemplated by Abitibi's refinancing plans, which Abitibi is actively pursuing. As a result, while the April 1 refinancings alleviated the substantial doubt about Abitibi's ability to continue as a going concern, significant financial uncertainties and challenges remain for Abitibi to overcome including, but not limited to, Abitibi's ability to repay or to refinance the $347 million term loan due March 30, 2009, and to service its considerable debt, including the new debt resulting from the April 1 refinancings. If Abitibi defaults under the terms of any of its indebtedness, some or all of Abitibi's other long-term debt instruments could also go into default, possibly leading to the acceleration of the maturity of these obligations and requiring the presentation of these obligations as current liabilities. Third Quarter of 2008 Net loss in the third quarter of 2008 was $181 million, an increase in net loss of $235 million, compared to third quarter 2007 net income of $54 million. The increase in net loss in the third quarter of 2008 was partially due to a $6 million increase in operating loss for the comparable periods. These are the primary items that resulted in the increase in the 2008 third quarter net loss: -- Interest expense increased $18 million in the third quarter of 2008 as compared with the third quarter of 2007, primarily as a result of the refinancing transactions. -- Translation of foreign currencies decreased by $214 million to a loss of $14 million in the third quarter of 2008 as compared to a gain of $200 million in the third quarter of 2007. In November 2008, Abitibi's parent company, AbitibiBowater Inc. announced the permanent closure of Abitibi's previously idled Mackenzie paper mill, based on current market conditions. Upon review of the recoverability of the long-lived assets at this paper mill, Abitibi used this additional information and recorded long-lived asset impairment charges of C$91 million for the three and nine months ended September 30, 2008. The fair value of the long-lived assets of the Mackenzie paper mill was determined to be zero based on its estimated sale and salvage value. Additionally, C$3 million of mill stores inventory was determined to be unusable and was recorded in cost of sales. The company experienced several significant changes in its economic facts and circumstances resulting in a reconsideration of the functional currency of each of the company's domestic and foreign operations. The primary indicators of change were in cash flows from intercompany transactions and arrangements and cash flows from financing activities. The consideration received from a subsidiary of AbitibiBowater in the Donohue Corp. transaction was denominated in U.S. dollars. Further, the company completed a series of financing transactions on April 1, 2008. As a result of these refinancing transactions, substantially all the company's debt is now denominated in U.S. dollars. Consequently, upon reconsideration, the company concluded that the functional currency of the majority of the company's Canadian operations had changed from the Canadian dollar to the U.S. dollar. The change in functional currency was accounted for prospectively on July 1, 2008, with no change to previously reported results or balances. The exchange loss attributable to the remeasurement of the non- monetary items as of the date of the change in functional currency was included as part of the foreign currency translation adjustment included in a separate component of accumulated other comprehensive loss within shareholders' (deficit) equity. Effective July 1, 2008, and as a result of the change in functional currency, the company translates all of its foreign operations with a functional currency of the U.S. dollar into its reporting currency of the Canadian dollar. As a result of translating these non-monetary assets at the current rate as of July 1, 2008, the company's non-monetary assets and shareholders' equity decreased by C$909 million. As of September 30, 2008, the company's balance sheet showed total assets of C$4.9 billion and total liabilities of C$5.1 billion, resulting in total shareholders' deficit of C$227 million. A full-text copy of the company's third quarter financial results is available for free at: http://researcharchives.com/t/s?3718 About Abitibi-Consolidated Inc. Abitibi-Consolidated Inc. is a global leader in the production of newsprint and specialty papers as well as a major producer of wood products, and generated sales of approximately $4.1 billion in 2007. Its operations are currently comprised of 15 pulp and paper mills, 19 sawmills, four remanufacturing facilities, two engineered wood facilities and eight hydroelectric plants in Canada, the United States and the United Kingdom. The company supplies products to a diverse group of customers worldwide, marketing its products in over 70 countries. The company is also among the world's largest recyclers of newspapers and magazines and is responsible for the forest management of approximately 16 million hectares of third-party certified sustainable forest land. ADVANCED BIOENERGY: Auditor Raises Going Concern Doubt ------------------------------------------------------ McGladrey & Pullen, LLP, in Des Moines, Iowa, in a letter dated December 29, 2008, to the Board of Directors and Members of Advanced BioEnergy, LLC, expressed substantial doubt about the company's ability to continue as a going concern. The firm audited the consolidated balance sheets of Advanced BioEnergy, LLC, and subsidiaries as of September 30, 2008, and 2007, and the related consolidated statements of operations, changes in members' equity and cash flows for the years then ended. "The company has suffered significant losses; its current liabilities exceed current assets and have defaulted on several credit agreements. This raises substantial doubt about the company's ability to continue as a going concern," McGladrey & Pullen said. Richard R. Peterson, interim chief executive officer, vice president of accounting and finance and chief financial officer, disclosed in a regulatory filing that the company incurred a loss of $57,240,000 and used cash of $4,857,000 from operating activities in the year ended Sept. 30, 2008. "At September 30, 2008, the company's current liabilities exceed its current assets by $103,481,000 and it was not able to make scheduled principal and interest payments on credit facilities in October 2008. These factors raise substantial doubt about the Company's ability to continue as a going concern." "We believe our options for refinancing the [secured term loan note with PJC Capital LLC with an outstanding principal amount of approximately $10 million] are significantly constrained due to continued disappointing economics related to the production of ethanol. The disappointing economics may force us to accept financing terms which may significantly impair or render worthless ABE LLC's existing equity interest in ABE Fairmont which constitutes the pledged collateral." "We will continue to work directly with Piper Jaffray & Company, an affiliate of PJC Capital, to explore all available strategic alternatives. This may include the sale or divestiture of specific operating assets, planned merger of all or a part of ABE LLC and its wholly owned subsidiaries, issuance of various debt instruments or the sale of our equity securities." "We are continuing to work directly with WestLB and its advisors to put in place an agreement whereby WestLB along with other loan syndicate members would continue to forebear principal and interest to March 31, 2009. On October 22, 2008, [Heartland Grain Fuels, L.P.] failed to pay approximately $1.2 million of interest due on its existing WestLB Syndicate term loans. On October 28, 2008, HGF received a Notice of Suspension of Project Accounts from WestLB notifying HGF of the event of default. During the requested period of forbearance to March 31, 2009, HGF would work with the WestLB Syndicate on a longer-term loan restructuring. Under current ethanol industry economics HGF is not able to service its existing debt including its Brown County Subordinated Revenue Bonds totaling $19.0 million. The restructuring of the WestLB Syndicate debt may result in a portion of that debt being converted into equity of HGF. A conversion of a portion of WestLB Syndicate debt into HGF equity would reduce HGF's debt service obligations in the future reducing both principal and interest payments due. Any conversion of WestLB Syndicate debt into HGF equity would reduce ABE LLC's existing ownership in HGF. Under current ethanol industry economics the conversion of WestLB Syndicate debt into HGF equity is expected to significantly reduce and possibly eliminate ABE LLC's existing wholly owned equity interest in HGF. Additionally, any restructuring of the existing debt with the WestLB Syndicate may cause a partial or total impairment of the outstanding Revenue Bonds." "Continuation of the Company is dependent on its ability to meet cash flow requirements through debt relief, and improvement in related commodity markets." "Management intends to seek relief from its creditors on the timing and amounts of debt service payments and or sell certain assets to pay existing obligations. The company will focus on maximizing margin opportunities and seek efficiencies and expense savings where possible. However, there is no assurance that the Company will generate sufficient cash flows from operations or complete its financing plan or sell certain assets to meet its obligations on a timely basis." As of September 30, 2008, the company's balance sheet showed total assets of $309,706,000, total liabilities of $242,281,000, and total members' equity of $67,425,000. About Advanced BioEnergy Advanced BioEnergy, LLC, and its consolidated subsidiaries -- which include ABE Fairmont, LLC, Indiana Renewable Fuels, LLC, ABE Northfield, LLC, ABE Heartland, LLC (formerly known as HGF Acquisition, LLC), Heartland Grain Fuels, L.P., and Dakota Fuels, Inc., the general partner of HGF -- in engaged in the business of producing ethanol and co-products, including wet, modified wet and dried distiller grains. Its operations are carried out primarily through its operating subsidiaries HGF and ABE Fairmont. ALLIED SECURITY: September 30 Balance Sheet Upside-Down by $30MM ---------------------------------------------------------------- Allied Security Innovations Inc.'s balance sheet at Sept. 30, 2008, showed total assets of $6,156,968 and total liabilities of $36,676,852, resulting in a stockholders' deficit of $30,519,884. For three months ended Sept. 30, 2008, the company posted a net income of $128,167 compared with a net loss of $3,835,567 for the same period in the previous year. ASII had a net loss for the nine months ended Sept. 30, 2008, of $2,646,287 and a net loss for the nine months ended Sept. 30, 2007, of $5,641,864. As of Sept. 30, 2008, the company has cash balance in the amount of $264,825 and current liabilities of $22,608,095. The total amount of notes payable and debentures is $18,067,155. The company may not have sufficient cash or other assets to meet its current liabilities. In order to meet these obligations, the company may need to raise cash from the sale of securities or from borrowings. A full-text copy of the 10-Q filing is available for free at http://ResearchArchives.com/t/s?3719 About Allied Security Based in Wall, New Jersey, Allied Security Innovations Inc. (OTC BB: ASVN.OB) fka. Digital Descriptor Systems Inc. -- http://www.ddsi-cpc.com/-- develops and markets integrated enterprise-wide image applications specifically designed for criminal justice organizations. Customers include states, cities, counties, corrections, justice, and public safety agencies. Its subsidiary, CGM Applied Security Technologies Inc., with locations in Wall, N.J. and a factory in Staten Island, N.Y., is a manufacturer and distributor of Homeland Security products, including indicative and barrier security seals, security tapes and related packaging security systems, protective security products for palletized cargo, physical security systems for tractors, trailers and containers, as well as a number of highly specialized authentication products. Going Concern Doubt Bagell, Josephs, Levine & Company, LLC, in Marlton, N.J., expressed substantial doubt about Allied Security Innovations Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm reported that the company did not generate sufficient cash flows from revenues during the year ended Dec. 31, 2007, to fund its operations. The auditing firm added that at Dec. 31, 2007, the company had negative net working capital of $32,087,467. AMERICAN TIRE: Moody's Affirms 'B3' Corp. Rating on Am-Pac Deal --------------------------------------------------------------- Moody's Investors Service affirmed American Tire Distributors, Inc.'s debt ratings following the company's December 19, 2008 announcement that it acquired Am-Pac Tire Dist., Inc. from Tokyo- based Itochu Corp. The aggregate purchase price was reported as $75 million less Am-Pac debt repayment, and any net working capital or other adjustments. In a related action, Moody's lowered ATD's speculative grade liquidity rating to SGL-3 from SGL-2. The ratings outlook remains stable. The affirmation of ATD's B3 corporate family rating and stable outlook reflect the strategic benefits of the transaction, which is expected to significantly strengthen ATD's market position and distribution capabilities, and further expand ATD's servicing area into St. Louis and western Texas. The rating also reflects the longer-term stability of replacement tire demand, as well as the company's leading market position, diverse customer base, and adequate near-term liquidity. The rating also reflects ATD's high leverage despite recent improvement in ratios such as Debt/EBITDA, and emphasizes the company's inconsistent free cash flow generation over the past several years. Further constraining the rating are the company's dependency on purchases from a limited number of tire suppliers, acquisitive growth strategy, and the characteristically low margins associated with distribution businesses. The SGL downgrade primarily reflects reduced, yet adequate, remaining availability under the company's $400 million asset- based revolving credit agreement due to increased borrowing. ATD's free cash flow turned materially negative over the past year due to increased investments in working capital, reflecting in part management's election to carry higher inventories, as well as increased tax payments and timing of interest and vendor payments. As of October 4, 2008, approximately $260 million was borrowed under the company's credit facility, nearly $100 million higher than last year, while remaining excess availability declined to about $111 million, or 29% of the available borrowing base, down from 47% last year. Nevertheless, near-term liquidity appears adequate, supported by anticipated seasonal working capital reduction and improved free cash flow over the near term, as well as sufficient remaining availability under the revolver. Rating lowered: -- Speculative Grade Liquidity rating to SGL-3 from SGL-2 Ratings affirmed and LGD assessment updated: -- Corporate Family Rating at B3 -- Probability of Default rating at B3 -- Senior unsecured notes at Caa1 (LGD5, 73%) The ratings outlook is stable. The last rating action on ATD was on April 5, 2007, when Moody's affirmed the company's B3 corporate family rating and changed the outlook to stable. ATD's ratings were assigned by evaluating factors Moody's believes is relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of the company's core industry and ATD's ratings are believed to be comparable to those of other issuers of similar credit risk. American Tire Distributors, Inc., headquartered in Huntersville, NC, is a wholesale distributor of tires, custom wheels, and related service equipment. The company had revenues of nearly $2 billion during the latest twelve month period ending October 4, 2008. AMERICAN TONERSERV: Completes iPrint Acquisition for $1.5MM Cash ---------------------------------------------------------------- American TonerServ Corp. disclosed in a regulatory filing that its subsidiary iPrint Technologies, LLC, acquired all of the assets of iPrint Technologies, Inc.'s retail business of providing printing supplies and service to a variety of companies including Fortune 1000 companies, nationwide. iPrint's business operations are located in Chatsworth, California, in the Los Angeles area and in Larkspur, California, in the Bay Area. On Oct. 31, 2008, American TonerServ entered into an Asset Purchase Agreement with iPrint Technologies, LLC, a newly formed subsidiary of the company, iPrint Technologies, Inc., and Chad Solter, Darrell Tso, and Scott Muckley, who own all of the stock of iPrint, relating to the purchase of all of the assets of iPrint's retail business. The purchase price for the acquisition consisted of $1.5 million in cash; $3.5 million in the form of four promissory notes; 5,847,953 shares of common stock valued at $1.5 million; and warrants to purchase 200,000 shares of the company's common stock at $0.30 per share. The subsidiary also assumed liabilities of iPrint of approximately $990,000 and the obligations of iPrint under certain contracts and facilities leases. The assets acquired by the subsidiary include approximately $1,290,000 in accounts receivable. In connection with the acquisition, iPrint Technologies entered into employment agreements with each of the three Selling Shareholders, and has offered employment to approximately 13 employees of iPrint. Pursuant to the terms of the Agreement, Chad Solter, one of the Selling Shareholders, will have the right to attend all meetings of the company's board of directors as a nonvoting observer for a term of 12 months after the closing date. One of the promissory notes, in the amount of $500,000, bears interest at the rate of 10% per annum and was due and payable in full on Nov 30, 2008. Two of the promissory notes, which are each in the amount of $575,000 and bear interest at the rate of 5% per annum. One of the Short-Term Notes is due within 120 days after the closing date. The other Short-Term Note is due in full on the earlier of (i) 45 days following the end of the second full calendar quarter (i.e., January through March, April through June, July through September, or October through December, as applicable) after the Closing Date in which the earnings before interest, taxes, depreciation and amortization of the subsidiary for such period meets or exceeds $250,000; (ii) if not paid at the end of the second such quarter, then 45 days after the end of the first full three consecutive calendar months thereafter in which EBITDA of the Subsidiary for such period meets or exceeds an amount equal to $250,000; or (iii) if not paid before, on the 1 year anniversary of the closing date. One of the promissory notes, in the amount of $1,850,000, bears interest at the rate of 5% per annum and due and payable in 48 equal monthly installments, commencing on the 13th month after the closing date. At the option of the holder, all or a portion of the outstanding principal and unpaid accrued interest of the Long-term Note may be converted into shares of common stock of the company at a conversion price of (i) $0.50 per share if the conversion occurs on or before the 13th month after the closing date, or (ii) $1.00 per share if the conversion occurs after the date that is 13 months after the closing date. The promissory notes are secured by the assets purchased from iPrint other than inventory and accounts receivable. The Short-Term Notes and the Long-Term Note are subject to reductions in the event that the amount of net working capital acquired in the transaction is less than $380,000. The Long-Term Note is also subject to reduction in the event that the amount of EBITDA of the Subsidiary for the 12 months after the closing date is less than $1,000,000. The 5,847,953 shares of the company's common stock issued in the transaction are being held in escrow pursuant to an escrow agreement until 24 months after the closing date, at which time it will be delivered to iPrint. The common stock will be subject to offset in an amount equal to any damages for which the company or the Subsidiary is entitled to be indemnified pursuant to the Agreement, but only if and to the extent that the principal balance of the Long-term Note has been reduced to zero as a result of the possible adjustments described above. A full-text copy of the Asset Purchase Agreement is available for free at http://ResearchArchives.com/t/s?371c Unregistered Sales of Equity Securities On Oct. 31, 2008, the company closed on an offering of Units, each Unit consisting of a 10% Convertible Promissory Note in the amount of $103,830 and warrants to purchase 125,000 shares of the company Common Stock. The Notes will bear interest at 10% per annum and will be payable interest only for the first twelve months following the date of the Notes. During the first 12 months, the principal amount of the Notes will be convertible into common stock of the company at a conversion price of $0.30 per share. The Warrants will be exercisable for a period of three years following the closing of the offering at an exercise price of $0.30 per share. A total of 16.4 Units have been sold at an offering price of $100,000 per Unit to nine accredited investors, for a total of $1,640,000 in gross proceeds. Certain directors of the company have personally guaranteed the Notes, and these directors will receive Warrants with the same terms and conditions as those included in the Units as compensation for providing such guarantees. Among the investors in the Units is Mark Warnell, an employee and Human Resources Manager of the company, who purchased one-half Unit for $50,000. The company issued 5,847,953 shares of its Common Stock to iPrint which shares were not registered under the Act. In connection with the issuance of the Common Stock to iPrint, the company relied upon the exemptions provided by Section 4(2) of the Act. About American TonerServ Based in Santa Rosa, California, American TonerServ Corp. (OTC BB: ASVP) -- http://www.americantonerserv.com/-- is a consolidator in the highly fragmented printer supplies and services industry. ATS acquires, integrates and manages independent businesses that deliver printer supplies, services and equipment to small/mid- sized businesses. At. Sept. 30, 2008, the company's balance sheet showed total assets of $8,292,077, total liabilities of $6,989,010 and stockholders' equity of $1,303,067. Three months ended Sept. 30, 2008, the company posted net loss of $956,081 compared to net loss of $1,234,037 for the same period in the previous year. For nine months ended Sept. 30, 2008, the company posted net loss of $3,408,006 compared to net loss of $3,080,011 for the same period in the previous year. At Sept. 30, 2008, the company had a working capital deficit of $3,189,912 including cash and equivalent balances of $5,421 compared to a working capital deficit balance of $2,121,624 at Dec. 31, 2007. Going Concern Doubt The company had a loss of $2,451,925 and had negative cash flows from operations of $1,326,103 for the six month period ended June 30, 2008, and had an accumulated deficit of $20,030,765 and a working capital deficit of $2,935,217 at June 30, 2008. The company has significant cash requirements and is not generating enough cash flows from existing operations to cover its operating expenses. The company currently has no external sources of liquidity. AMERICAN TONERSERV: Appoints Monarch Bay as Investment Banker ------------------------------------------------------------- American TonerServ Corp. entered into an engagement agreement with Monarch Bay Associates, LLC pursuant to which MBA will provide investment banking services including representing the company in its efforts to obtain financing on an exclusive basis. On Dec. 3, 2008, the company terminated its financial advisory agreement with Merriman Curhan Ford & company pursuant to which MCF acted as a financial advisor to the company. In connection with the termination, MCF waived the 30-day notice requirement in that agreement. Pursuant to the terms of the agreement, the company issued 750,000 shares of the company's common stock which shares will not vest until certain milestones are met. MCF will also be entitled to receive certain additional fees upon completion of a sale of securities to investors introduced to the company by MBA or from other investors during the time period while MBA is acting as the company's investment banker. The company will also reimburse MBA for certain out of pocket expenses. In connection with this sale, the company relied upon the exemptions provided by Section 4(2) of the Act. MBA is an accredited investor who had access to complete information concerning the company. A restrictive legend will be placed on the certificate representing the securities issued. About American TonerServ Based in Santa Rosa, California, American TonerServ Corp. (OTC BB: ASVP) -- http://www.americantonerserv.com/-- is a consolidator in the highly fragmented printer supplies and services industry. ATS acquires, integrates and manages independent businesses that deliver printer supplies, services and equipment to small/mid- sized businesses. At. Sept. 30, 2008, the company's balance sheet showed total assets of $8,292,077, total liabilities of $6,989,010 and stockholders' equity of $1,303,067. Three months ended Sept. 30, 2008, the company posted net loss of $956,081 compared to net loss of $1,234,037 for the same period in the previous year. For nine months ended Sept. 30, 2008, the company posted net loss of $3,408,006 compared to net loss of $3,080,011 for the same period in the previous year. At Sept. 30, 2008, the company had a working capital deficit of $3,189,912 including cash and equivalent balances of $5,421 compared to a working capital deficit balance of $2,121,624 at Dec. 31, 2007. Going Concern Doubt The company had a loss of $2,451,925 and had negative cash flows from operations of $1,326,103 for the six month period ended June 30, 2008, and had an accumulated deficit of $20,030,765 and a working capital deficit of $2,935,217 at June 30, 2008. The company has significant cash requirements and is not generating enough cash flows from existing operations to cover its operating expenses. The company currently has no external sources of liquidity. AMERICAN FIBERS: Asks Approval of $1.5MM Sale of 25-Acre Lot ------------------------------------------------------------ AFY Holding Company and American Fibers and Yarns Company ask the U.S. Bankruptcy Court for the District of Delaware to authorize the private sale of their approximately 25.1-acre property commonly known as 140 Industrial Boulevard, Bainbridge, Georgia, for the purchase price of $1,500,000, on an "as is, where is" basis, free and clear of all liens, to the Development Authority of Bainbridge and Decatur County, Georgia. The official committee of unsecured creditors of AFY and General Capital Corp., the Debtors' postpetition lender have consented to the sale. Any liens, claims, encumbrances, and interests will attach to the proceeds of the sale. The Debtors tell the Court that, in their informed business judgment, there is very little, if anything, to be gained by conducting a formal auction of the Purchased Assets. The Debtors believe that it is unlikely there will be other entities willing and able to overbid the Purchaser for the Purchased Asset, and that the delay, uncertainty and added administrative expenses attendant to the auction process would be unfavorable to the Debtors, their estates and creditors. About American Fibers Headquartered in Chapel Hill, North Carolina, American Fibers and Yarns Company -- http://www.afyarns.com/-- manufactures solution- dyed Polypropylene yarns in its Bainbridge, Georgia and Afton, Virginia production facilities for distribution throughout the United States. American Fibers is 100% owned by AFY Holding Company. On Sept. 22, 2008, AFY Holding and American Fibers and Yarns filed voluntary petitions seeking Chapter 11 relief (Bankr. D. Del. Lead Case No. 08-12175). Edward J. Kosmowski, Esq., Michael R. Nestor, Esq., Robert F. Poppiti, Jr., Esq., and Nathan D. Grow, Esq. at Young, Conaway, Stargatt & Taylor, LLP, represent the Debtors as counsel. RAS Management Advisors, LLC serves as the Debtors' restructuring advoisors. Epiq Bankruptcy Solutions, LLC serves as the Debtors' claims, noticing and balloting agent. The U.S. Trustee for Region 3 appointed creditors to serve on an Official Committee of Unsecured Creditors. Kenneth A. Rosen, Esq., Sharon L. Levine, Esq., Eric H. Horn, Esq., and Sean E. Quigley, Esq., at Lowenstein Sandler PC, represents the Debtors as counsel. William P. Bowden, Esq., Don A. Beskrone, Esq, and Amanda M. Winfree, Esq., at Ashby & Geddes, P.A., represent the Committee as Delaware counsel. When the Debtors sought bankruptcy protection from their creditors, they listed assets and debts of between $10 million and $50 million each. AMERICAN FIBERS: Court Approves Bid Procedures; Auction Set Jan. 5 ------------------------------------------------------------------ The U.S. Bankrutpcy Court for the District of Delaware approved the Bidding Procedures, including the payment of a breakup fee to thesStalking horse bidder, with respect to the proposed sale of certain of the property and assets of AFY Holdings Company and American Fibers and Yarns Company to Maynards Industries (1991) Inc., or other purchasers who submit higher or otherwise better offers at the Auction Sale. These assets comprise of (1) machinery and equipment; (2) real estate; and (3) inventory. If qualified bids are received, the Court authorizes the Debtors to conduct an Auction Sale on Jan. 5, 2009, at the offices of Young Conaway Stargatt & Taylor, LLP, The Brandywine Building, 1000 West Street, 17th Floor, in Wilmington, Delaware. Maynards Industries (1991) Inc., a Delaware corporation, has agreed to purchase the above assets in cash for $1,550,000. Maynards, the stalking-horse bidder, will pay the deposit of $155,000 by certified or bank check or by wire transfer. On the 10th day after the Bankruptcy Court's approval of the sale, Maynards will pay $295,000 by wire transfer and will a retain a holdback of $1,100,000 which will be available to the Purchaser for any claims Purchaser may suffer due to the owner of the premises at 1051 Colquitt Highway, Bainbridge, Georgia, including if Landlord prevents any sale taking place at its location on time. The Holdback, less any claim of Purchaser due to the interference form such Landlord, shall be paid to the Debtors upon occurrence of any of the following: (i) the Landlord Occupancy Agreement being signed; (ii) completion of the Purchase Auction and removal of all sold, unabandoned, assets from Seller Landlord Office prior to April 19, 2009, or (iii) by April 19, 2009. Should the Debtors consummate a sale other than Maynards, the Debtors will return the Deposit to Maynards pay a breakup fee equal to $75,000 which will constitute a super-priority administrative claim senior to all other administrative expense claims but junior to any existing super-priority administrative expense claims. Full-text copies of the Asset Purchase Agreement, dated Dec. 20, 2008, among Maynards Industries (1991) Inc., AFY Holding company, and American Fibers & Yarns Company, and a listing of the Acquired Assets, are available for free at: http://bankrupt.com/misc/AmericanFibers_BiddingProcedures.pdf About American Fibers Headquartered in Chapel Hill, North Carolina, American Fibers and Yarns Company -- http://www.afyarns.com/-- manufactures solution- dyed Polypropylene yarns in its Bainbridge, Georgia and Afton, Virginia production facilities for distribution throughout the United States. American Fibers is 100% owned by AFY Holding Company. On Sept. 22, 2008, AFY Holding and American Fibers and Yarns filed voluntary petitions seeking Chapter 11 relief (Bankr. D. Del. Lead Case No. 08-12175). Edward J. Kosmowski, Esq., Michael R. Nestor, Esq., Robert F. Poppiti, Jr., Esq., and Nathan D. Grow, Esq. at Young, Conaway, Stargatt & Taylor, LLP, represent the Debtors as counsel. RAS Management Advisors, LLC serves as the Debtors' restructuring advoisors. Epiq Bankruptcy Solutions, LLC serves as the Debtors' claims, noticing and balloting agent. The U.S. Trustee for Region 3 appointed creditors to serve on an Official Committee of Unsecured Creditors. Kenneth A. Rosen, Esq., Sharon L. Levine, Esq., Eric H. Horn, Esq., and Sean E. Quigley, Esq., at Lowenstein Sandler PC, represents the Debtors as counsel. William P. Bowden, Esq., Don A. Beskrone, Esq, and Amanda M. Winfree, Esq., at Ashby & Geddes, P.A., represent the Committee as Delaware counsel. When the Debtors sought bankruptcy protection from their creditors, they listed assets and debts of between $10 million and $50 million each. ARK II MANUFACTURING: Assets to be Sold at Jan. 10 Public Auction ----------------------------------------------------------------- Secured creditors of Ark II Manufacturing, LLC, disclosed that they will offer for sale to the public on Jan. 10, 2009, substantially all of the assets of Ark II, in which it has a security interest, at the offices of Jones Day, counsel for the administrative agent of the secured creditors, at 2727 North Harwood Street, in Dallas, Texas. These assets to be sold will consist of accounts receivable, books and records, chattel paper, deposit accounts, equipment and fixtures, general intangibles, including patents, trademarks, copyrights, websites, domain names, software, and intellectual property, inventory, letters of credit, payment intangibles, instruments promissory notes, documents of title, interests in respect of any commercial tort claims, money, cash equivalents, tax refunds, contract rights, and all proceeds and products, whether tangible or intangible, of any of the foregoing, including the capital stock of Ark Manufacturing de Mexico s. De R.L. De CV. The foregoing assets secure Ark II's obligations to the secured creditors, which are not less than $81,524,623 (excluding accrued and accruing interest, fees, costs and other charges). Assets will be offered for sale, on an "as is, where is" basis, in bulk only, which means the successful bidder at the Auction must bid on and be prepared to purchase all of the Assets. All bids for the assets must be for cash or on terms otherwise acceptable to the Administrative Agent, contain no contingencies that are unsatisfactory to the Administrative Agent and, unless ohterwise agreed to by the Administrative Agent, must be able to close on the date of the sale of the asets. For further information regarding the assets or the Auction, please contact: Gregory M. Gordon, Esq. or Daniel P. Winikka, Esq. Jones Day 2727 North Harwood Street Dallas, Texas 75201 Tel: (214) 220-3939 Fax: (214) 969-5100 Locatd in Garretsville, Ohio, Ark II Manufacturing, LLC -- http://www.ark2mfcom/-- is a manufacturer of metal doors and frames for commercial construction projects sold under the Amweld and Firedoor brand names as well as a manufacturer of duct work for commercial construction projects under the Foremost brand name. Ark II has manufacturing facilities in the United States and Mexico. ASSURED PHARMACY: Sept. 30 Balance Sheet Upside Down by $6.9MM -------------------------------------------------------------- Assured Pharmacy, Inc.'s balance sheet as of September 30, 2008, showed total assets of $5,303,159, total liabilities of $11,541,464, and minority interest of $674,708, resulting in total stockholders' deficit of $6,913,013. Robert DelVelcchio, chief executive officer, and Haresh Sheth, chief financial officer, disclosed in a regulatory filing dated November 14, 2008, that as of September 30, 2008, the company had $814,213 in cash. "As of September 30, 2008, we had current assets of $3,684,362 and current liabilities of $11,541,464 resulting in a working capital deficit of $7,857,102." "Operating activities used $2,443,298 in cash for the nine months ended September 30, 2008, as compared to $1,458,257 for the same period last year. Our net loss of $3,405,361 for the nine months ended September 30, 2008, reduced by non-cash expenses of $759,519 was the primary reason for our negative operating cash flow. In addition, our inventories increased by $217,987 primarily due to the fact that our prime vendor relocated to a new location and in order to minimize disruption in our ability to acquire inventory, we purchased quantities that we felt were necessary to allow us to continue to supply our stores during this period of relocation. An increase of accounts payable and accrued expenses of $633,000 offset the decrease in our cash flows of operating activities. In addition, inventory was required for our new store opening during the nine months ended September 30, 2008. Investing activities during the nine months ended September 30, 2008 used $186,283 for the purchase of property and equipment. Net cash flows provided by financing activities during the nine months ended September 30, 2008 was $3,035,489 primarily due to the $2,437,400 we received as proceeds from the issue of convertible debentures and $1,154,500 from notes issued to related parties during the reporting period." "On October 7, 2008, we entered into a Securities Purchase Agreement with APHY Holdings LLC, formed by Enhanced Equity Fund, L.P. for the purpose of this transaction, pursuant to which, subject to the satisfaction of certain closing conditions, we agreed to issue and sell 11,235 shares of our future Series A Convertible Preferred Stock, par value $0.001 per share and 75,000,001 shares of our common stock to APHY Holdings for an aggregate purchase price of $12,000,000.01. We intended to use the proceeds from the sale for general working capital purposes, to pay down debt and to pay fees related to the transaction. Prior to the closing of the Securities Purchase Agreement, on November 11, 2008, we received notice from APHY Holdings terminating the Securities Purchase Agreement, effective immediately." "As a result of the termination of the Securities Purchase Agreement, we will be required to seek alternative sources to finance our operations, service our existing debt (including the repayment of indebtedness that is past due) and continue our growth plan. We intend to obtain such funds through increased sales and debt and equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or other cash requirements for the next twelve months. The inability to secure sufficient funds in a timely manner would likely have a material adverse effect on our business, prospects, financial condition, and results of operations." "The company is aggressively seeking additional funds to finance its immediate and long-term operations. The successful outcome of future financing activities cannot be determined at this time and there is no assurance that if achieved, the company will have sufficient funds to execute its intended business plan or generate positive operating results. These factors, among others, raise substantial doubt about the company's ability to continue as a going concern." In response to these problems, management has taken or will take these actions: -- The company is expanding its revenue base beyond the pain management sector to service customers that require prescriptions to treat cancer, psychiatric, and neurological conditions. -- The company is aggressively signing up new physicians. -- The company retained additional sales personnel to attract business. -- The company consolidated two pharmacies in Portland, Oregon into a single operation. This consolidation is expected to allow the company to further leverage its existing infrastructure and is expected to result in a reduction of costs. -- In April 2008, the company entered into a Credit Agreement for $2,000,000, which can be extended up to $3,000,000. -- In the third quarter of 2008, the company raised $2,037,400 through the issuance of convertible debentures. -- The company will seek to extend the maturity dates of the related party payables and unsecured convertible debentures. As of September 30, 2008, we had an accumulated deficit of $26,413,555. A full-text copy of the company's quarterly report is available for free at: http://researcharchives.com/t/s?3735 About Assured Pharmacy Assured Pharmacy, Inc. is engaged in the business of operating specialty pharmacies that primarily dispense highly regulated pain medication. During 2006, the company expanded its business beyond pain management to service customers that require prescriptions to treat cancer, psychiatric, and neurological conditions. The company offers physicians the ability to electronically transmit prescriptions to its pharmacies. The company derives its revenue primarily from the sale of prescription drugs and does not keep in inventory non-prescription drugs or health and beauty related products inventoried at traditional pharmacies. The majority of the company's business is derived from repeat business from its customers. "Walk-in" prescriptions from physicians are limited. The company currently has six operating pharmacies. Four of those pharmacies are wholly owned and the company has a 94.8% ownership interest in the two other pharmacies. ASTORIA BAY: Chapter 11 Filing Cancels Taggart Building Auction --------------------------------------------------------------- Cassandra Profita at The Daily Astorian reports that Astoria Bay LLC has filed for Chapter 11 protection, canceling a foreclosure sale of the Taggart Building on Pier 1. The Daily Astorian relates that the Port of Astoria was interested in bidding for Taggart Building, which is in the Port property and houses the Port's marina offices. The report says that the Port Commission already approved a supplemental budget of $2.5 million for the purchase. According to The Daily Astorian, the Taggart Building is in foreclosure and was scheduled to be auctioned to compensate the Bank of Astoria for unpaid loans to the Taggarts. The report says that The Bank of Astoria assumed control of the Taggart Building and its rent payments after the Taggarts failed to repay almost $2 million in loans. The Port, according to the report, has been making its lease payments to the bank. Astoria Bay owes the Port about $8,000 in unpaid bills, the report states. Astoria Bay also listed Clatsop County as one of its creditors, court documents say. Citing Port Executive Director Jack Crider, The Daily Astorian states that Astoria Bay's filing for Chapter 11 will give the Port more time to consider an offering price. Astoria, Oregon-based Astoria Bay LLC is a company started by former Port of Astoria commissioner Glenn Taggart. The company filed for Chapter 11 protection on Dec. 22, 2008 (Bankr. D. Ore. Case No. 08-37064). Bradley L. Brown, Esq., who has an office at Beaverton, Oregon, represents the company in its restructuring effort. The company listed assets of $2,924,269 and debts of $2,620,394. AXESSTEL INC: Bryan B. Min Resigns as Board Chairman ---------------------------------------------------- Axesstel, Inc., disclosed in a regulatory filing with the Securities and Exchange Commission that Bryan B. Min will resign as chairman of the board for personal reasons, effective Dec. 31, 2008. The board expects to name a replacement in early 2009, and after the replacement is named, the board will continue to have five members. "I have thoroughly enjoyed the opportunity to serve Axesstel," stated Mr. Min. "During the past several years, the company resolved many challenges and stayed the course in pursuit to become a world leader in the fixed wireless and broadband data products business. 2008, in particular, has been rewarding as we delivered three consecutive profitable quarters for the first time in our business and we are on target to exceed our 2008 annual revenue goal of $100 million. I believe Axesstel has a better foundation from which to build in the coming years, and I wish the company continued success." Mr. Min became a director in November 2005 and served as chairman since June 2006. He is the founder and CEO of Epsilon Systems Solutions, Inc. "[Mr. Min]" is an extremely talented executive, and Axesstel was fortunate to have had the benefit of his expertise and leadership on the board, said Clark Hickock, CEO of Axesstel. "We wish him the best as he turns his focus to Epsilon Systems Solutions and other matters requiring his attention." About Axesstel Inc. Headquartered in San Diego, California, Axesstel Inc. (AMEX: AFT) -- http://www.axesstel.com/-- designs and develops fixed wireless voice and broadband data products. Axesstel's product portfolio includes broadband modems, 3G gateways, voice/data terminals, fixed wireless desktop phones and public call office phones for high-speed data and voice calling services. The company delivers innovative fixed wireless solutions to leading telecommunications operators and distributors worldwide. Axesstel's research and development center is located in Seoul, South Korea. Net income was $433,000 compared to a net loss of $3.0 million in the third quarter of 2007. For the nine months ended Sept. 28, 2008, the company reported net income of $1.9 million, compared to a net loss of $4.0 million for the first nine months 2007. At Sept. 30, 2008, the company's balance sheet showed total assets of $39.1 million, total liabilities of $36.1 million and stockholders' equity of $3.0 million. At Sept. 28, 2008, the company ended the quarter with cash and cash equivalents of approximately $3.0 million, and working capital of approximately $155,000. In addition, at Sept. 28, 2008, accounts receivables were $31.1 million. Currently its only source of borrowing is a credit line secured by certain of its accounts receivable. At Sept. 28, 2008, these borrowings totaled $2.9 million. The company intends to use this working capital financing to provide liquidity as required to fulfill orders for its products. Going Concern Doubt The company experienced losses from operations from 2004 to 2007. Because of the company's continuing net losses and negative working capital position, Gumbiner Savett Inc., the company's independent auditors, in their report on the company's consolidated financial statements for the year ended Dec. 31, 2007, expressed substantial doubt about the company's ability to continue as a going concern. BERNARD MADOFF: Releases Info on Assets; SEC Won't Release Data --------------------------------------------------------------- The Associated Press reports that Bernard Madoff has submitted a list of his personal assets to the U.S. Securities and Exchange Commission on Wednesday. According to The AP, Mr. Madoff was given until Dec. 31, 2008, present a detailed accounting of his homes, stock holdings, bank accounts, and other business interests. The list, says the report, was supposed to include the names and locations of any bank or brokerage accounts holding whatever remains of the clients' money. The report states that the list wasn't filed publicly in any of the courts handling Mr. Madoff's case. According to the report, SEC spokesperson said that no decision had been made as to whether part or all of the asset disclosure would be disclosed. The report says that any of Mr. Madoff's assets disclosed in the filing or unearthed by investigators could eventually be tapped to make restitution to victims of Mr. Madoff's fraud. Bloomberg, however, relates that the SEC said that it won't make public a list of his assets. American Bankruptcy Institute reports that former Nasdaq Stock Market Chairman Bernard Madoff gave the Securities and Exchange Commission a list of his personal assets, but investors may have to wait to learn whether the filing contained any clues as to the whereabouts of their missing billions. The AP relates that Mr. Madoff had: -- mansions in the Hamptons and Palm Beach, Florida; -- a penthouse in Manhattan; and -- a handful of luxury yachts. Mr. Madoff's firm operated proprietary stock trading desks in New York and London, says The AP. According to the report, several investors have already filed lawsuits against either Mr. Madoff or the hedge funds that fed his business. Citing a person familiar with the situation, Amir Efrati and Jesse Drucker at The Wall Street Journal say that investigators believe Mr. Madoff had at least one and possibly multiple accounts in offshore tax havens or locales with robust privacy laws, and those accounts may have been used to hide ill-gotten gains. WSJ reports that investors who received redemptions from Mr. Madoff trying to determine whether they would have to return those funds under pressure from Irving Picard, the court-appointed trustee for Bernard L. Madoff Investment Securities LLC, over allegations that the redemptions were paid using other investors' money, which would make the payments fraudulent transfers. According to WSJ, Irving Picard could try to wrest from investors any fictitious profits they got as far back as six years before its liquidation. The Austrian government, according to WSJ, said on Wednesday that it will take over management of Bank Medici, a Vienna bank that had large losses with Mr. Madoff. Citing people familiar with the matter, the report says that authorities probed Bank Medici after reports that it had placed about $2.1 billion in funds controlled by Mr. Madoff. Jenny Strasburg at WSJ states that Henry Kaufman, the former Salomon Brothers chief economist, lost several million dollars with Mr. Madoff. According to the report, Mr. Kaufman said that he had the money in a brokerage account with Bernard L. Madoff Investment Securities for more than five years. The U.S. Bankruptcy Court for the Southern District of New York approved on Tuesday a transfer of about $28.1 million from one of Mr. Madoff's bank accounts to the court-appointed trustee of the firm, who said the funds will be used for satisfying customer claims. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC was a market maker in US stocks, including all of the S&P 500 and more than 350 Nasdaq stocks. The firm moved large blocks of stock for institutional clients by splitting up orders or arranging off-exchange transactions between parties. It also performed clearing and settlement services. Clients included brokerages, banks, and other financial institutions. In addition, Madoff Securities managed assets for high-net-worth individuals, hedge funds, and other institutional investors. The firm is being liquidated in the aftermath of a fraud scandal involving founder Bernard L. Madoff. As reported by the Troubled Company Reporter on Dec. 15, 2008, the Securities and Exchange Commission 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 US$50 billion. As reported by the TCR on Dec. 16, 2008, the Securities Investor Protection Corporation, which maintains a special reserve fund authorized by Congress to help investors at failed brokerage firms, announced on Mon., Dec. 15, that it is liquidating Bernard L. Madoff Investment Securities LLC of New York, N.Y., under the Securities Investor Protection Act. BERNARD MADOFF: SIPC, Trustee Report Initial Recovery of Assets --------------------------------------------------------------- Stephen Harbeck, president of the Securities Investor Protection Corporation, and Irving H. Picard, the court-appointed trustee for the liquidation of Bernard L. Madoff Investment Securities LLC of New York said on Tuesday that the United States Bankruptcy Court for the Southern District of New York approved the transfer of $29 million in debtor funds held by the Bank of New York. According to them, this is one of many steps that Trustee Irving H. Picard has taken and will continue to take to collect all available assets of Bernard L. Madoff Investment Securities LLC for the future use of satisfying customer claims and other purposes. "We want to be very clear that to the extent these and other funds are 'customer property,' they will be used for satisfying customer claims and not the administrative expenses of the Trustee," they said. "Contrary to some recent media accounts, trustee expenses are paid out of any general estate of the debtor, and if insufficient, through advances by SIPC. Customer property may not be used to pay the administrative expenses of a liquidation proceeding," the added. Under the Securities Investor Protection Act, the trustee is empowered to recover customer property so that it may be returned to customers in need of protection under that law. Because expenditures by the trustee to recover such property and other administrative expenses of the trustee are borne by the general estate and SIPC and not by customers, such expenditures diminish in no way the amount of customer property available for customers. Separately, they said they want it to be known that a claim form will be available shortly for the Madoff liquidation proceeding. The Trustee said it will mail claim forms by Jan. 9, 2009, to customers and creditors of Bernard L. Madoff Investment Securities LLC. In addition to being mailed, the forms will be available on the Web for downloading at http://www.sipc.organd http://www.madoff.com. Those filing the form will need to use the forms created specifically for the purposes of the Madoff liquidation proceeding. About Bernard Madoff Bernard L. Madoff Investment Securities LLC was a market maker in US stocks, including all of the S&P 500 and more than 350 Nasdaq stocks. The firm moved large blocks of stock for institutional clients by splitting up orders or arranging off-exchange transactions between parties. It also performed clearing and settlement services. Clients included brokerages, banks, and other financial institutions. Inaddition, Madoff Securities managed assets for high-net-worth individuals, hedge funds, and other institutional investors. The firm is being liquidated in the aftermath of a fraud scandal involving founder Bernard L. Madoff. As reported by the Troubled Company Reporter on Dec. 15, 2008, the Securities and Exchange Commission 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 US$50 billion. As reported by the TCR on Dec. 16, 2008, the Securities Investor Protection Corporation, which maintains a special reserve fund authorized by Congress to help investors at failed brokerage firms, announced on Mon., Dec. 15, that it is liquidating Bernard L. Madoff Investment Securities LLC of New York, N.Y., under the Securities Investor Protection Act. BRAY & GILLESPIE: Wants to Borrow $2-Mil. from Glenmont Capital --------------------------------------------------------------- Bray & Gillespie Management, LLC, and its debtor-affiliates ask the U.S. Bankruptcy Court for the Middle District of Florida for authority to obtain postpetition financing of $2,000,000 from Glenmont Capital Management, LLC to cover: (i) working capital shortfalls; (ii) required utility deposits; and (iii) professional fees. The Debtors tell the Court that they are presently unable to obtain, in the ordinary course of business or otherwise, unsecured credit available under Sections 364(a) or (b) of the Bankruptcy Code. The Debtors relate that they previously obtained postpetition financing from Mr. Bray and Mr. Gillespie, but such financing will be depleted shortly. The loan will be secured by liens on all assets of the Debtors, which will be junior only to liens in existence on the Petition Date and will be first priority liens on all now and hereafter acquired unencumbered assets of the Debtors and all proceeds thereof. Moreover, all amounts advanced by Glenmont postpetition will be entitled to priority over any and all administrative expenses subject only to U.S. Trustee fees pursuant to Sec. 1930(a)(6) of the Bankruptcy Code. Lastly, the Loan will be senior in priority to the postpetition financing of the Debtors previously approved in the Debtors' cases. Interest on the Loan will accrue at 15% per annum, payable monthly in arrears. A commitment fee of $50,000 will be paid to Glenmont upon the Court's entry of a final DIP Loan Order. The Loan expires, and all obligations thereunder will be repaid in full, on the earlier of (i) May 30, 2009; (ii) the Effective Date of an Acceptable Plan; (iii) consummation of a sale under Sec. 363 of the Bankruptcy Code pursuant to an Acceptable Sale Process; and (iv) any Debtors' acts to propose a plan of reorganization other than an Acceptable plan or to sell assets other than pursuant to an Acceptable Sale Process. In the event that the Debtors pursue a plan of reorganization or asset sale other than an Acceptable Plan or an Acceptable Sale Process, or consummates any transaction other than an Acceptable Plan or sale of assets through an Acceptable Sale Process, Glenmont will be entitled to a Break Up Fee of 2.5% of the purchase price of the assets plus reimbursement of all of its fees, costs and expenses, including the fees and expenses of its professionals and advisors. Based in Daytona Beach, Florida Bray & Gillespie Management, LLC - - http://www.brayandgillespie.com-- and its debtor-affiliates are engaged in the business of renovating and redeveloping resort properties along Florida's Atlantic coastline. As of the Petition Date, the Debtors collectively own over six miles of ocean property from Daytona Beach to Ormond Beach. B&G Management operates a total of 23 hotel located in Volusia County which are either affiliates or related companies. B&G Management is owned by partners Charles A. Bray and Joe Gillespie. Bray & Gillespie Management, LLC and 78 of its debtor-affiliates filed separate petitions for Chapter 11 relief on Sept. 12, 2008 (Bankr. M.D. Fla. Lead Case No. 08-05473). Jimmy D. Parrish, Esq., Marianne L. Dorris, Esq., R. Scott Shuker, Esq. at Latham Shuker Eden & Beaudine LLP, represent the Debtors as counsel. Peter N. Hill, Esq., at Wolff Hill McFarlin & Herron PA, represent the Official Creditors Committee as counsel. In its petition, Bray & Gillespie Management, LLC disclosed assets of $1 million to $10 million and debts of $1 million to $10 million. BRITTANIA BULKERS: Voluntary Chapter 15 Case Summary ---------------------------------------------------- Chapter 15 Debtor: Britannia Bulkers A/S Holland & Knight LLP 195 Broadway, 24th Floor New York, NY 10007 Tel: (212) 513-32300 Chapter 15 Case No.: 08-15187 Chapter 15 Petition Date: December 30, 2008 Court: Southern District of New York (Manhattan) Judge: Judge Robert E. Gerber Chapter 15 Petitioner's Counsel: Peter Alan Zisser, Esq. peter.zisser@hklaw.com Holland & Knight, LLP 195 Broadway New York, NY 10007 Tel: (212) 513-3200 Fax: (212) 385-9010 Estimated Assets: $10 million to $50 million Estimated Debts: $100 million to $500 million BROADSTRIPE LLC: Case Summary & 28 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Broadstripe, LLC aka Millenium Digital Media Systems, L.L.C. 16305 Swingley Ridge Rd. Chesterfield, MO 63017 Bankruptcy Case No.: 09-10006 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Broadstripe Capital, LLC 09-10008 MDM Systems Northwest, L.L.C. 09-10009 Summit Cablevision, L.P. 09-10010 CP NW1, L.L.C. 09-10011 CP NW2, L.L.C. 09-10012 Type of Business: The Debtors provide video and telephone services to consumers and business in Maryland, Michigan, Washington and Oregon. http://www.broadstripe.com Chapter 11 Petition Date: January 2, 2009 Court: District of Delaware (Delaware) Judge: Christopher S. Sontchi Debtors' Counsel: Don A. Beskrone, Esq. dbeskrone@ashby-geddes.com Ashby & Geddes 222 Delaware Avenue P.O. Box 1150 Wilmington, DE 19899 Tel: (302) 654-1888 Fax: (302) 654-2067 -- and -- Gardere Wynne Sewell LLP Restructuring Consultant: FTI Consulting Inc. Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million The Debtors' Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Highland Capital Management LP increasing rate $331,120,497 Attn: Shawn Groves notes 800 Two Galleria Tower 13455 Noel Road, Suite 1300 Dallas, TX 75240 Tel: (927) 419-6298 Credit Suisse International increasing rate $28,788,974 Attn: Michael Bould notes Participation Loans Operation 7033 Louis Stephens Drive PO Box 110047 Research Park Triangle, NC 27709 Tel: (919( 994-4903 JPMorgan Chase increasing note $23,624,037 Attn: Linda Supaswud notes 4 New York Plaza 16th Floor New York, NY 10004 Tel: (212) 623-1847 National Cable TV Co-Op trade $3,550,047 Attn: Brian Jones 1008 Oak Street, Suite 200 Kansas City, MO 64106 Tel: (800) 888-6282 Abrams & Laster LLP trade $801,992 Attn: Jennifer Thompson 20 Montchanin Road, Suite 200 Wilmington, DE 19807 Tel: (302) 778-1000 Tailwind Communications Inc. trade $789,785 Attn: Jim Balcovic 2509 Gettysburg Road Camp Hill, PA 17011 Tel: (717) 975-7800 Paul, Hastings, Janofsky & trade $780,747 Walker LLP Attn: Michael Chernick 75 E. 55th Street New York, NY 10022-3205 Tel: (212) 318-6000 Decibels Inc. trade $671,577 Pam Skillman, Office Manager 1551 Center Street Tacoma, WA 98409 Tel: (253) 473-5855 Net2Phone trade $548,188 Attn: Vickie Dam 520 Broad Street Newark, NJ 07102 Tel: (973) 438-3028 Adams Cable Equipment trade $424,957 Anne Arundel County trade $400,102 CCI Systems Inc. trade $397,465 Comcast Sportsnet trade $339,443 CSG Systems Inc. trade $330,560 Fox Sports Northwest Network trade $328,295 Cintas trade $301,143 Mid-Atlantic Sports Network trade $260,489 Ervin Cable Construction LLC trade $253,642 Kelvin R. Westbrook trade $238,194 Cisco Systems Inc. trade $229,048 Lifetime Television trade $225,216 Blue Mountain Tele. Svcs. Inc. trade $222,832 Advanced Media Technologies trade $200,044 Sprint trade $197,992 Absolute Underground Inc. trade $194,999 City of Seattle tax $158,000 Network Cable Services Inc. trade $128,619 Time Warner Telecom trade $114,570 The petition was signed by president Gustavo Prilick. BSML INC: Appoints Dr. Robert J. Troell to Board of Directors ------------------------------------------------------------- BSML, Inc. disclosed in a regulatory filing with the Securities and Exchange Commission that effective Oct. 28, 2008, Dr. Robert J. Troell was appointed as a director of the company. Dr. Troell graduated from the University of South Florida in Tampa, Florida, in 1984 with a Bachelor of Science in Biology, and from the University of South Florida, College of Medicine in 1988. After an internship in General Surgery, a residency in Otolaryngology-Head and Neck Surgery, and a fellowship in Sleep Medicine, from 1994 to 2001 he was clinical faculty at Stanford University Medical Center in the departments of Psychiatry and Behavioral Medicine and Otolaryngology/Head & Neck Surgery. From 2001 through the present, he served as president, Physician and Surgeon at Beauty By Design, The Center of Excellence for Facial Plastic & Reconstructive Surgery in Las Vegas, Nevada. Additionally, from May 2008 through the present, he has served as chief medical officer for the BriteSmile Medical and Dental Spa in Boca Raton, Florida. About BSML Inc. Based in Walnut Creek, California, BSML Inc. (NasdaqCM: BSML) -- http://www.britesmile.com/-- markets teeth whitening technology and manages BriteSmile Professional Teeth Whitening Centers. At Sept. 27, 2008, the company's balance sheet showed total assets of $4.9 million and total liabilities of $8.0 million, resulting in a shareholders' deficit of about $3.1 million. For 13 weeks ended Sept. 27, 2008, the company posted net loss of $852,000 compared to net loss of $1.5 million for the same period in the previous year. For 39 weeks ended Sept. 27, 2008, the company posted net loss of $2.1 million compared to net loss of $2.6 million for the same period in the previous year. At Sept. 27, 2008, the company had approximately $73,000 in unrestricted cash. The company expects that its principal uses of cash will be to provide working capital to meet corporate expenses and satisfy outstanding liabilities. Going Concern Doubt Stonefield Josephson Inc., in Los Angeles, California, expressed substantial doubt about BSML Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 29, 2007. To date, the company has yet to achieve profitability. The company had an accumulated deficit of $177.9 million and working capital deficiency of $5.7 million as of June 28, 2008. The company's net loss and net cash used by operating activities were $1.3 million and $5.0 million, respectively, for the twenty-six weeks ended June 28, 2008. At June 28, 2008, the company had $243,000 in unrestricted cash and cash equivalents. The company is not certain if its cash will be sufficient to maintain operations of the continuing company at least through the next year due to the uncertainty of the company's ability to generate positive cash flow from the Centers business operations. BUFALLO THUNDER: Liquidity Concerns Cue S&P to Cut Ratings to B- ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its ratings on the Buffalo Thunder Development Authority to 'B-', from 'B'. At the same time, S&P placed the ratings on CreditWatch with negative implications. "The ratings downgrade and CreditWatch listing reflect S&P's concerns relating to the Authority's near-term liquidity position given initial operating results, and S&P's expectation that the Buffalo Thunder Resort and Casino (opened Aug. 12, 2008) will have a hard time driving sufficient customer traffic to the Resort's tourist-driven, Santa Fe location, because S&P expects the current weak economic climate to continue through at least the first half of 2009," said Standard & Poor's credit analyst Ariel Silverberg. Despite management's plans to realign the current cost structure and focus its marketing efforts more toward regional customers, S&P is concerned that the property will be challenged to achieve a sufficient run-rate level of EBITDA to meet its fixed obligations in the next few quarters (including the $11.5 million June 2009 coupon payment, approximately $2 million per quarter in amortization payments on its FF&E facility, $0.5 million per quarter in payments to the State of New Mexico related to previous compact settlements, and approximately $1.1 million per quarter of minimum distributions to the Pueblo of Pojoaque, which is the minimum distribution to fund Tribal government services). In resolving the CreditWatch listing, S&P will continue to monitor the revenue generating ability of the newly opened Resort, and assess the ability of management to improve profitability through its cost reduction efforts. If S&P conclude over the next several weeks that operating performance will not meaningfully improve to provide ample cushion with respect to the Authority's fixed obligations, the ratings will be lowered. CAPITAL CORP: Posts $54.6 Million Net Loss in Third Quarter ----------------------------------------------------------- Capital Corp of the West, parent company of County Bank, disclosed a third quarter net loss of $54.6 million, or $5.04 per diluted share, compared with a net income of $6.0 million, or $0.55 per diluted share, for the third quarter of 2007. Third quarter results were negatively impacted by significant non-cash charges corresponding to a goodwill impairment of $23.5 million and an increase in the deferred tax valuation allowance of $25.3 million. These non-cash charges only partially impacted the Bank's regulatory capital and the Bank remains adequately capitalized. In addition to the non-cash charges, the company also recorded a loan loss provision of $11.5 million in the third quarter of 2008. As previously disclosed on November 12, 2008, the company required additional time preparing its third quarter of 2008 results in order to complete the proper accounting of the company's goodwill, deferred tax assets and loan loss provisions. Excluding the goodwill impairment and deferred tax valuation allowance non-cash charges, the company would have reported a third quarter net loss of $5.8 million. While not a normal accounting measurement, this figure is included to provide additional insight into the impact of the company's non-cash charges on its third quarter financial statements. "A limited number of specific and complex accounting issues related to the proper accounting of the company's goodwill and deferred tax assets necessitated these significant non-cash balance sheet adjustments in the third quarter that, when combined with additional loan loss provisions, contributed to the net loss," said Richard S. Cupp, Chief Executive Officer, Capital Corp of the West and County Bank. Any future reductions in the deferred tax valuation allowance will have a positive impact on the company's net income, regulatory capital and stockholders' equity. The deferred tax asset has now been reduced to an amount that can be realized only through the carryback of tax losses to prior year federal tax returns. "At the heart of the matter is the fact that the Central Valley has undergone a violent property value correction that has dramatically eroded the company's operating results. That said, the Central Valley still has many terrific things going for it and I am confident that, given the necessary time, it will recover from this market correction in no small part because of its resilient and hard-working residents and business owners, the very people County Bank has been serving since 1977," said Mr. Cupp. County Bank never carried any of the subprime mortgages that have plagued some of the nation's top lenders and its direct exposure to residential real estate loans is minimal. However, the Bank does have significant exposure to construction and partially developed land for residential development purposes and has received numerous real estate appraisals that indicate declines in appraised values of more than 50% throughout the Central Valley and, in certain specific instances, declines of 70% or more. The Bank increased net deposit accounts by 4,879 during the first nine months of 2008 with 75.4% of those net deposit accounts represented by low-cost checking accounts. Service charges on deposit accounts increased 22.3% during the third quarter and 20.9% through the nine months ended September 30, 2008, as a result of the Bank's retail branch acquisition in the fourth quarter of 2007 as well as the Bank's organic growth during the first nine months of 2008, increased Bank fees and reduced waivers on service charges. Deposits at County Bank are federally insured by the FDIC up to the maximum legal limits (recently increased from $100,000 to $250,000 per depositor through 2009), including unlimited FDIC insurance for non-interest bearing deposit transaction accounts through 2009 as previously announced by the FDIC. As previously announced, the company continues to work with Keefe, Bruyette & Woods, Inc. to actively explore recapitalization options that would achieve well capitalized standing for the Bank and, in addition, has filed an application to participate in the U.S. Department of Treasury's TARP Capital Purchase Program. The additional time being taken to raise new capital is in part a result of the financial market's instability and the government's ongoing actions to resolve this crisis, including new regulatory guidelines and programs regarding capital, including TARP. Many other industries beyond the banking and financial services sectors are now showing signs of significant financial strain as well, further complicating the financial market's recovery. However, there can be no assurance that the company will be able to arrange for sufficient capital to satisfy regulatory requirements. These conditions and events, as well as the uncertainty regarding the ability to obtain additional capital, raise doubt about the company's ability to continue as a going concern. Cash flows from operations increased to $23.0 million for the nine months ended September 30, 2008, compared to $15.1 million for the same period ended September 30, 2007. Net interest income also increased 2.3% during the third quarter of 2008 and 11.4% for the nine months ended September 30, 2008 compared to the same periods in 2007, primarily due to the Bank's retail branch expansion and acquisition of Bay View Funding in the fourth quarter of 2007, while net interest margin, an indicator of the Bank's earnings capacity, increased 13 basis points to 4.22% during the first nine months of 2008, up from 4.09% for the nine months ended September 30, 2007. As of September 30, 2008, the company's subsidiary County Bank had a total risk-based capital ratio of 8.41%, a Tier 1 capital ratio of 5.84% and a leverage ratio of 4.52% and remained within adequately capitalized levels. The company itself had a total risk-based capital ratio of 8.75%, a Tier 1 capital ratio of 5.50% and a leverage ratio of 4.24% as of September 30, 2008. "In the view of many observers, the current financial crisis ranks as the worst since the Great Depression. But I do not believe that the U.S. economy, in the years ahead, faces a period of economic misery that will begin to rival the suffering associated with that historic economic calamity. The American economy is more resilient now than then," said Janet L. Yellen, President and CEO of the Federal Reserve Bank of San Francisco in a speech given on October 14, 2008. As a leading lender to Central California's diverse communities for over 30 years, County Bank has established itself as a respected and trusted community bank with retail branches stretching from Sacramento in the north to the San Francisco Bay Area and down through the Central Valley as far south as San Bernardino County. Throughout its 30 years of operations, County Bank has proactively supported numerous civic and community initiatives and in 2007, in partnership with the FDIC, opened the first student-run bank branch west of the Mississippi River at McLane High School in Fresno, California. This reinvestment in the communities it serves has been a tradition of County Bank since 1977. "Recent bank merger and acquisition activity in the Central Valley has resulted in a significant increase in the concentration of deposits with a few large national financial institutions," said Mr. Cupp. "We believe the health and viability of community banks, including County Bank, is critical to the Central Valley's recovery and the future growth and success of its locally-based businesses." Going Concern Doubt In a regulatory filing, David A. Heaberlin, chief financial officer and treasurer, said, "The company has determined that significant additional sources of liquidity and capital will be required for us to continue operations through 2008 and beyond. [T]here can be no assurance that the company will be able to maintain sufficient liquidity or to raise additional capital to satisfy regulatory requirements and meet obligations as they occur. Further, the regulators are continually monitoring liquidity and capital adequacy and evaluating the company's ability to continue to operate in a safe and sound manner. The Bank's regulators could, if deemed warranted, take further actions, including the assumption of control of the Bank, to protect the interests of depositors insured by the FDIC. The uncertainty regarding the company's ability to obtain additional capital or meet future liquidity requirements raises substantial doubt about the company's ability to continue as a going concern." As of September 30, 2008, the company's balance sheet showed total assets of $1,873,208, total liabilities of $1,799,312, and total shareholders' equity of $73,896. A full-text copy of the company's quarterly report is available for free at: http://researcharchives.com/t/s?371a About Capital Corp of the West Capital Corp of the West, a bank holding company established November 1, 1995, is the parent company of County Bank and is headquartered in Merced, California. With more than 30 years of service as California's leading regional community bank, County Bank currently operates 39 retail branch offices serving 13 counties throughout California. County Bank's primary concentration is in California's Central Valley. As of the latest FDIC data, County Bank has a 7.03 percent market share in the six Central California counties in which it has a significant retail branch presence, ranking County Bank fifth out of 40 financial institutions in that market area. CELLEGY PHARMA: September 30 Balance Sheet Upside Down by $2,000 ---------------------------------------------------------------- In a November regulatory filing with the Securities and Exchange Commisson, Cellegy Pharmaceuticals, Inc., bared an insolvent balance sheet as of September 30, 2008. Cellegy had $936,000 in total assets and $938,00 in total liabilities, resulting in a $2,000 stockholders' deficiency, as of September 30. The company also had $125.7 million in accumulated deficit as of September 30. The company posted $321,000 in net losses for the three months ended September 30, 2008, and $1.2 million in net losses for the nine months ended September 30. On February 12, 2008, Cellegy entered into a definitive merger agreement providing for the acquisition of Cellegy by Adamis Pharmaceuticals Corporation. Adamis is a privately held specialty pharmaceuticals company that is engaged in the research, development and commercialization of products for the prevention of viral infections, including influenza. Adamis markets and sells a line of prescription products for a variety of allergy, respiratory disease and pediatric conditions. The transaction was unanimously approved by the boards of directors of both companies. The closing of the transaction is subject to several closing conditions, including the filing of a registration statement and proxy statement with the Securities and Exchange Commission, the approval of Adamis' and Cellegy's respective stockholders at stockholder meetings following distribution of a definitive proxy statement, and other customary closing conditions. Holders of approximately 40% of Cellegy's outstanding common stock have entered into voting agreements pursuant to which they agreed to vote their shares in favor of the transaction. The combined company expects to continue to be publicly traded after completion of the merger, although under a different corporate name. On November 13, 2008, Cellegy filed a Form S-4 registration statement, which includes a preliminary proxy statement, with the SEC relating to the merger transaction with Adamis and certain related matters. If the merger is consummated, each Adamis stockholder will receive, in exchange for each share of Adamis common stock held by such stockholder immediately before the closing, one (post-reverse stock split) share of Cellegy common stock (excluding in all cases dissenting shares). If the transaction is approved by Cellegy's stockholders, before the closing Cellegy will implement a reverse stock split of its common stock so that the outstanding Cellegy shares will be converted into a number of shares equal to the sum of (i) 3,000,000 plus (ii) the amount of Cellegy's net working capital as of the end of the month immediately preceding the month in which the closing occurs divided by 0.50. Based on several assumptions that are subject to change, including, without limitation, the number of shares of Cellegy common stock outstanding immediately before the merger and the amount of Cellegy's current assets and liabilities as of the end of the month immediately prior to the closing, Cellegy estimates that the reverse stock split ratio will be approximately 1:9.9. The actual amounts and percentages will depend on many factors, and actual amounts and percentage could be higher or lower. In addition, the Merger Agreement contains certain termination rights for both Cellegy and Adamis, and further provides that, upon termination of the merger agreement under specified circumstances, either party may be required to pay the other party a termination fee of $150,000. Both parties have the right to terminate the Merger Agreement if the merger is not consummated by December 31, 2008, so long as the terminating party is not in breach of the Merger Agreement and such breach is a principal failure of the merger to occur by such date. The company has not provided an update on the merger as of press time. In connection with the signing of the Merger Agreement, Cellegy also issued to Adamis an unsecured convertible promissory note pursuant to which Cellegy agreed to lend Adamis $500,000 to provide additional funds to Adamis during the pendency of the merger transaction. Any principal outstanding under the Promissory Note accrues interest at 10% per annum. The Promissory Note becomes immediately due and payable in the event that the Merger Agreement is terminated by Adamis or Cellegy for certain specified reasons or on the later of (i) the 16 month anniversary of the issue date of the Promissory Note or (ii) the date that is two business days following the first date on which certain other notes issued by Adamis to a third party have been repaid in full. If the Promissory Note is outstanding as of the closing of the merger transaction, the Promissory Note will not be repaid, but will convert into shares of Adamis stock and these shares will be immediately cancelled. Cellegy will receive no additional shares. The terms of the Promissory Note provide Cellegy with no collateralized interest in the assets of Adamis. In the event the merger is not consummated with Adamis, Cellegy bears the risk of collecting the Promissory Note and therefore is subject to the risks and uncertainties of being in the position of an unsecured creditor. While the company feels that it is more likely than not that the merger will be consummated, in the event it is not, the Cellegy will have no ability to attach a claim to Adamis' assets. There is no assurance that the company will be able to close the transaction with Adamis. If the proposed merger transaction with Adamis is still pending and Cellegy requires additional cash resources to complete the transaction, Cellegy and Adamis are engaged in discussions concerning an agreement for Adamis to provide funding sufficient to permit the merger to be completed, although there can be no assurance that such funding will be available. If the merger with Adamis is not completed, Cellegy's board of directors will be required to explore alternatives for Cellegy's business and assets. These alternatives might include seeking the dissolution and liquidation of Cellegy, merging or combining with another company, or initiating bankruptcy proceedings. There can be no assurance that any third party will be interested in merging with Cellegy or acquiring the remaining assets of Cellegy. Although Cellegy may try to pursue an alternative strategic transaction, it will likely have very limited cash resources, and will likely be forced to file for federal bankruptcy protection. If Cellegy files for bankruptcy protection, Cellegy will most likely not be able to raise any type of funding from any source. In that event, the creditors of Cellegy would have first claim on the value of the assets of Cellegy which, other than remaining cash, would most likely be liquidated in a bankruptcy sale. Cellegy can give no assurance as to the magnitude of the net proceeds of such sale and whether such proceeds would be sufficient to satisfy Cellegy's obligations to its creditors, let alone to permit any distribution to its equity holders. Going Concern Doubt As reported Troubled Company Reporter on April 1, 2008, Mayer Hoffman McCann P.C., in Plymouth Meeting, Pa., expressed substantial doubt about Cellegy Pharmaceuticals Inc.'s ability to continue as a going concern after auditing the company's company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm reported that the company has incurred recurring losses from operations and has limited working capital to pursue its business alternatives. In addition, Cellegy says that it may choose to pursue liquidation or voluntarily file bankruptcy proceedings should the company be unable to secure the additional shareholder votes necessary to approve the transaction with Adamis or otherwise be unable to close the transaction. About Cellegy Pharmaceuticals Headquartered in Quakertown, Pa., Cellegy Pharmaceuticals Inc. (OTC BB: CLGY) is a specialty biopharmaceutical company that specializes in women's health. Savvy(R)(C31G vaginal gel), a microbicide gel product for contraception, is currently undergoing Phase 3 clinical studies in the United States for contraception. CENTERLINE CAV: Picerne CA Selling CAV's Interest in Partnership ---------------------------------------------------------------- Picerne CA Villas Limited Partnership, S.E. (the Partnership), as holder of the security interest in all right, title and interest of Centerline CAV Associates LLC and Centerline CAV SLP LLC in the Partnership and all proceeds, increases, additions, replacements and substitutions thereof, will offer to sell the collateral to the highest and best qualified bidder on Monday, Jan. 12, 2009, at 10:00 a.m. at the offices of Broad and Cassel, in Orlando, Florida. Interested parties should contact: Neil Silver, President Reigns Capital Ltd. Renaissance Corporate Center 235 Main Street, Suite 318 White Plains, New York 10601 Tel: (914) 949-3484 Fax: (407) 949-7003 E-mail: neils@reignscapital.com or Randal M. Alligood, Esq. Broad and Cassel 390 North Orange Avenue, Suite 1400 Orlando, Florida 32801 Tel: (407) 839-4202 Fax: (407) 650-0914 E-mail: ralligood@broadandcassel.com CHESAPEAKE CORP: Chapter 11 Petitions Prompt Moody's 'D' Rating --------------------------------------------------------------- Moody's Investors Service downgraded the probability of default rating of Chesapeake Corporation to D from Ca/LD and affirmed the Ca corporate family rating and the C rating on the senior subordinated notes. The downgrade follows the December 29, 2008 announcement that Chesapeake Corporation and its U.S. operating subsidiaries filed voluntary Chapter 11 petitions in the Eastern District of Virginia in an effort to consummate the sale of all of its operating businesses as a going concern to a group of investors, led by affiliates of Irving Place Capital Management, L.P. and Oaktree Capital Management, L.P. The purchase price is reportedly $485 million, less pension and severance obligations and amounts outstanding under the Senior Secured Credit Facility. Per the announcement, the company is seeking a $37 million DIP financing facility to provide an immediate source of funding so the company can operate through the Chapter 11 process. Subsequent to these actions, all ratings of Chesapeake Corporation will be withdrawn. This rating was changed: -- Probability of Default Rating, to D from Ca/LD; These ratings were affirmed: -- Corporate Family Rating, Ca; -- 67.1 million GBP 10.375% senior subordinated notes due 2011, C / LGD5 (86%); -- 100 million EUR 7% senior subordinated eurobonds due 2014, C / LGD5 (86%); -- $18.75 million 6.375% senior unsecured revenue bonds due 2019, Ca / LGD4 (69%); -- $31.25 million 6.25% senior unsecured revenue bonds due 2019, Ca / LGD4 (69%). The last rating action on Chesapeake occurred on December 18, 2008 when the PDR was changed to Ca/LD from Ca following the default on the senior subordinated notes. Headquartered in Richmond, Virginia, Chesapeake Corporation is a international supplier of specialty paperboard and plastic packaging. Revenues for the twelve month period ended September 28, 2008 were $1.02 billion. CHESAPEAKE CORP: S&P's Corp. Credit Rating Tumble to 'D' -------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its corporate credit rating on Chesapeake Corp. to 'D' from 'SD'. The downgrade follows Chesapeake's announcement that it is selling its business operations as a going concern to affiliates of Irving Place Capital Management L.P. and Oaktree Capital Management L.P. for $485 million through a prepackaged Chapter 11 bankruptcy filing of Chesapeake and its U.S. subsidiaries. The company will continue to operate its businesses during the sale and Chapter 11 process, and management expects ongoing business relationships with trade creditors, customers, and employees will not be affected. Importantly, the company will seek approval for new debtor-in- possession (up to $37 million provided by certain members of its current bank group) financing that will provide an immediate source of funds, enabling it to satisfy customary obligations including amounts owed to trade creditors, suppliers, customers, and employees in the ordinary course of business. Prior to the sale and bankruptcy filing, Chesapeake was operating under a forbearance agreement with bank facility lenders with respect to existing financial covenant defaults and the company's failure to pay interest on its outstanding notes. CHINA HEALTH: Sept. 30 Balance Sheet Upside Down by $4.9 Million ---------------------------------------------------------------- China Health Care Corp. Chief Executive Officer Siew Man Pang disclosed in a regulatory filing that the company had a net loss of $2,719,503 and a negative cash flow from operations of $1,139,328 for the year ended September 30, 2008, and a working capital deficiency of $4,842,080 and a shareholders' deficit of $4,944,873 at September 30. "These matters raise substantial doubt about the company's ability to continue as a going concern if the company does not secure new outside financing. The company is currently and continues to make efforts to procure outside financing to strengthen its financial position." As of Sept. 30, 2008, the company's balance sheet showed total assets of $1,499,720 and total liabilities of $6,387,781. Chief Executive Officer Siew Man Pang said that during the year ended September 30, 2008, the company financed its operation mainly through cash generated from its operations and the loans from directors of the company. During the year ended September 30, 2007, the company funded its operations mainly through two aspects 1) cash generated from its operations, and 2) cash proceeds from issuance of securities such as preferred stock. Cash from operations is only enough to fund its onsite personnel. The sale of preferred stock has providing the funding for the company's investment in capital expenditures, and the cost of medical and management expertise that are heavily involved in the early stages of building out the VIP Birthing Centers and training of the personnel that staff those VIP Birthing Centers. "The company expects that with the expansion into new markets and development of its business model, it can gain economies of scale on its heavy investment medical and hospital management experts. Related parties and directors have also provided the working capital during the most recent operating periods in order to maintain the business a going concern. The company is actively seeking external financing to strengthen its financial position." A full-text copy of the company's annual report is available for free at: http://researcharchives.com/t/s?372b About China Health China Health Care Corp. provides consultancy services to the VIP Maternity & Gynecological Centers in the People's Republic of China. These services are provided in conjunction with Johns Hopkins International, LLC, a U.S. based healthcare provider, and based upon a Consultancy Agreement with JHI. The Company is currently under contracts to provide consultancy services to a total of five VIP Birthing Centers in the PRC and to manage a private hospital in Macau. CHRISTIAN BERNARD: Files for Chapter 7 Liquidation -------------------------------------------------- Christian Bernard Jewelers has filed for Chapter 7 liquidation, Janice Podsada at Hartford Courant reports, citing Attorney General Richard Blumenthal. Citing Mr. Blumenthal, Hartford Courant relates that Christian Bernard has closed its Westfarms Mall and Stamford Town Center stores. According to Hartford Courant, Mr. Blumenthal said that consumers should contact him if either of the stores is holding property, including jewelry that may have been dropped off for repairs or adjustment, or items left in layaway plans. Mr. Blumenthal said in court documents that Christian Bernard's the bankruptcy was due to poor sales and an inability to secure financing. Christian Bernard Jewelers is a jewelry retailer that operated 15 stores in the Northeast. It is headquartered in Secaucus, New Jersey. It owns Westfarms and Stamford stores. CHRYSLER LLC: Receives $4 Billion Low-Interest Loan from Gov't -------------------------------------------------------------- Jeff Bennett at The Wall Street Journal reports that Chrysler LLC received a $4 billion low-interest loan from the government on Friday. WSJ relates that the loan will help Chrysler continue funding its operations. Chrysler Chairperson and CEO Robert Nardelli said in a statement, "This initial loan will allow the company to continue an orderly restructuring, while pursuing our vision to build the fuel-efficient, high-quality cars and trucks people want to buy." While General Motors Corp. received the $4 billion federal loan on Wednesday, the loan for Chrysler was delayed due to undisclosed issues in the company's application process, says WSJ. The report states that Chrysler was slated to receive the loan by year-end. Neil Irwin at the Washington Post reports that the U.S. Treasury Department keeps leeway in the U.S. auto aid. The Washington Post relates that the Treasury "will determine the form, terms, and conditions of any investment made pursuant to this program [Automotive Industry Financing Program] on a case-by-case basis." According to the Washington Post, the Treasury will decide what companies can avail funding on a case-by-case basis, based in part on "the importance of the institution" to the auto industry. The Treasury, says the report, has pledged about $17 billion for General Motors Corp. and Chrysler LLC, and $6 billion to help GMAC LLC. The report states that the Bush administration is using the $700 billion financial rescue package to rescue the auto industry. 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. COMFORT COMPANY: Court Sets Jan. 26 Deadline to Accept/Reject Plan ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware approved on Dec. 29, 2008, the adequacy of Comfort Co., Inc., and its debtor- affiliates' First Amended Disclosure Statement, dated Dec. 24, 2008. The Court set Jan. 26, 2009, at 4:00 p.m. prevailing Eastern time as the Voting Deadline, which may be extended without further order of the Corut, to a date that is no later than 5 business days before the Confirmation Hearing. The Court has set a confirmation hearing on Feb. 24, 2009, at 10:30 a.m. Objections to the Plan (with the exception of any objection filed by the Official Committee of Unsecured creditors which must be filed on or before Jan. 29, 2009), must be filed by Jan. 26, 2009, at 4:00 p.m. prevailing Eastern time. As reported in the Troubled Company Reporter on Dec. 29, 2008, according to Bloomberg's Bill Rochelle, to ward off objections, Comfort Company, Inc. revised the Plan and Disclosure Statement after taking comments from the Official Committee of Unsecured Creditors and the U.S. Trustee. Instead of 0.9% of the new stock of reorganized Comfort Co., unsecured creditors, the Creditors Committee's constituency, will now split $325,000 cash plus certain proceeds from lawsuits. The Plan, according to Mr. Rochelle, also provides for these terms: -- Holders of first lien debt by the Debtor to have the Court's ruling that $125 million of their $281 million claims are secured will receive (i) $100 million secured note and 75% of the new stock to pay off their secured claims, and (ii) additional 6.8% of the new stock and 68% of the recoveries in avoidance actions on account of their deficiency claims. -- Holders of second-lien claims owed $52.2 million are to have 2.3% percent of the new stock and 23% of lawsuit recoveries. -- Other unsecured creditors are in line for 0.9% of the stock plus 9% of lawsuit proceeds. As reported by the Troubled Company Reporter on Dec. 16, the plan contemplates 100% recovery, in cash, to holders of allowed administrative claims, priority tax claims, DIP claims, other priority claims, and other secured claims. Holders of equity interests won't recover anything under the Plan. The Plan, as amended, still does not specify the percentage recoveries by other creditor groups, according to Mr. Rochelle. JPMorgan is the administrative agent for the first lien and second lien loans. About Comfort Co. Headquartered in West Long Branch, New Jersey, Comfort Co., Inc. - - http://www.sleepinnovations.com/-- is a holding company that owns 100% of the common stock of Sleep Innovations, Inc., which, in turn, is the direct parent of Advanced Innovations East, LLC, Advanced Innovations West, LLC, Advanced Innovations Central, LLC and Advanced Urethane Technologies, Inc. Advanced Urethane is the direct parent of AUT Brehnam, Inc. AUT Dallas, Inc., AUT Lebanon, Inc., AUT Newburyport, Inc. and AUT West Chicago, Inc. The Debtors develop, manufacture, market and distribute foam comfort sleep products, which include pillows, mattresses and mattress toppers, for sale to major retailers in the United States, Canada, Mexico and other countries. The Debtors also manufacture and sell standard and specialty polyurethane foam products to end market users, such as manufacturers in the bedding, furniture, automotive, packaging, medical and consumer products industries. The Debtors filed for Chapter 11 relief on Oct. 3, 2008 (Bankr. D. Del. Lead Case No. 08-12305). Michael R. Lastowski, Esq., and Richard W. Riley, Esq., at Duane Morris LLP, in Wilmington, Delaware, Sommer Leigh Ross, Esq., at Duane Morris LLP, in Philadelphia, and Sheryl L. Toby, Esq.. at Dykema Gossett, PLLC, represents the Debtors as counsel. In its schedules, Comfort Company, Inc. listed total assets of $992 and total debts of $338,408,756. In its schedules, Sleep Innovations listed total assets of $93,363,164 and total debts of $366,468,023. CONSTAR INTERNATIONAL: Chapter 11 Petition Cues Moody's 'D' Rating ------------------------------------------------------------------ Moody's Investors Service downgraded the Probability of Default Rating of Constar International Inc. to D from Caa3 and the Corporate Family Rating to Ca from Caa3. Other instrument ratings are detailed below. The downgrades follow the company's announcement on December 30, 2008 that it filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy code. Moody's will withdraw all of Constar's ratings shortly. Moody's took these rating actions: - Downgraded Probability of Default Rating to D from Caa3 - Downgraded Corporate Family Rating to Ca from Caa3 - Affirmed $220 million floating rate first mortgage note, due 2012, at Caa3 (LGD3, 34%) - Affirmed $175 million 11% senior subordinated notes, due 2012, at C (LGD 5, 84%) The outlook was changed to stable from negative. The downgrade of the PDR to D reflects the company's now formal bankruptcy filing, which Moody's classifies as a "default" event, consistent with the "D" Probability of Default rating. Under the pre-arranged restructuring, holders of the $175 million of subordinate notes are expected to convert 100 percent of the face amount of the debt plus the unpaid December 1 interest into equity of a reorganized company. Current equity will be canceled. Constar advised that other creditors will be unimpaired. Moody's anticipates a higher recovery rate for the senior secured creditors. The company also received commitments from existing bank lenders for debtor-in-possession and exit financing of $75 million. Constar expects to complete the restructuring by early spring of 2009 and lenders committed to provide the $75 million exit financing for three years after the closing of DIP financing. The last rating action for Constar was on December 19, 2008 when the CFR was downgraded to Caa3 from Caa2. Based in Philadelphia, Constar International Inc. is a producer of PET (polyethylene terephthalate) plastic containers for food, soft drinks, and water. Consolidated revenue for the twelve months ended September 30, 2008 was approximately $891 million. CONSTAR INTERNATIONAL: Expects to Emerge Not Later than March 30 ---------------------------------------------------------------- Constar International, Inc., and its debtor-affiliates expect to emerge from Chapter 11 as early as Feb. 28, 2009, or at the latest, by March 30, 2009. On the Petition Date, the Debtors promptly requested that the U.S. Bankruptcy Court for the District of Delaware set a hearing date to approve the Disclosure Statement explaining their Joint Chapter 11 Plan of Reorganization and to confirm the Plan. If the Plan is confirmed, the Effective date of the Plan is projected to be approximately 10 days after the date the Court enters the Confirmation order. As reported in the Troubled Company Reporter on Jan. 2, 2009, under the Plan proposed by the Debtors, holders of the subordinated notes will convert 100% of the face amount of the subordinated notes and the full amount of the interest payment due Dec. 1, 2008, into common stock of the reorganized company. Holders that beneficially own a majority of the Senior Subordinated Notes, the Debtors relate, support the Plan. Projected Recoveries The projected recoveries for each of the seven classes of claims and interests under the Plan are: Estimated Class Claim/Equity Interest Treatment Recovery ----- --------------------- ---------- --------- Class 1 Other Priority Claims Unimpaired 100% Class 2 Senior Secured FRN Unimpaired 100% Claims Class 3 Other Secured Claims Unimpaired 100% Class 4 Senior Subordinated Impaired Pro rata share Note Claims of New Equity Class 5 Other General Unimpaired 100% Unsecured Claims Class 6 Section 510(b) Claims Impaired 0% Class 7 Equity Interests Impaired 0% DIP Facility Claims, Administrative Claims and Priority Tax Claims are not classified and are excluded from the Classes of Claims and Interests, in accordance with Sec. 1123(a)(1) of the Bankruptcy Code. DIP Facility Claims shall, at the option of the Debtors, either be repaid in Cash in full on the Effective Date or, subject to certain conditions, be converted into the Exit Facility. Administrative Claims will be paid in full in Cash in accordance with the terms of the applicable contract or agreement governing such Claim, if any. Priority Tax Claims will be paid in full in Cash pursuant to Sec. 1129(a)(9)(C) of the Bankruptcy Code. Other Priority Claims under Class 1 will be paid in full in Cash. All Senior Secured FRN Claims under Class 2 will be Allowed in full and such allowed claims will be satisfied by being reinstated in full. Other Secured Claims under Class 3, which consist of all Secured Claims that are not DIP Facility Claims, Existing Facility Claims or Senior Secured FRN Claims, shall, in the sole discretion of the Debtors or the Reorganized Debtors, receive one of the following treatments, as applicable: (i) payment in full in Cash; (ii) delivery of the collateral securing said Claim and payment of any interest required under Sec. 506(b) of the Bankruptcy Code; (ii) reinstatement of the Allowed Claims in full; or (iv) other treatment which will render such Claim Unimpaired. Senior Subordinated Note Claims under Class 4 will receive the Pro Rata portion of the Distribution Shares. Other General Unsecured Claims under Class 5 will be reinstated in full and paid in the ordinary course of the Reorganized Debtors' business. Section 510(b) Claims under Class 6, which consist of all claims arising from rescission of a purchase or sale of a security of Constar or any of its affiliates, for damages arising from the purchase or sale of such a security, or for reimbursement or contribution allowed under Sec. 502 of the Bankruptcy Code on account of such a Claim, will be extinguished and no distributions will be made. Equity Interests under Class 7 will be deemed canceled and extinguished, and there will be no distribution to the holders thereof. Who May Vote Class 4 is the sole class whose vote will be solicited to accept or reject the Plan. Classes 1, 2, 3, and 5 are Unimpaired under the Plan, and are conclusively presumed to have accepted the Plan. Classes 6 and 7, which will receive no distribution under Plan, are conclusively presumed to have rejected the Plan. A full-text copy of the Debtors' proposed Disclosure Statement explaining the Debtors' Joint Chapter 11 Plan of Reorganization, dated Dec. 30, 2008, is available for free at: http://bankrupt.com/misc/ConstarInternational_DS.pdf About Constar International Philadelphia-based Constar International Inc. (NASDAQ: CNST) -- http://www.constar.net/-- produces polyethylene terephthalate plastic containers for food, soft drinks and water. The company provides full-service packaging services. The company and five (5) of its debtor-affiliates filed separate petitions for Chapter 11 relief on Dec. 30, 2008 (Bankr. D. Del. Lead Case No. 08- 13432). Andrew N. Goldman, Esq., and Eric R. Markus, Esq., at Wilmer Cutler Pickering Hale and Dorr LLP are the Debtors' proposed counsel. Neil B. Glassman, Esq., and Jamie Edmonson, Esq., at Bayard, P.A., are Debtors' proposed Delaware counsel. The Debtors selected Greenhill & Co., LLC as their financial advisor and investment banker. On Dec. 31, 2008, the Court approved the employment of Epiq Bankruptcy Solutions, LLC as the Debtors' claims, noticing and balloting agent. In its petition, Constar International, Inc. listed total assets of $420,000,000 and total debts of $538,000,000 as at Nov. 30, 2008. CONSTAR INTERNATIONAL: S&P Cuts Rating on $220 Mil. Notes to 'D' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Constar International Inc. to 'D' from 'SD' and lowered its rating on the company's $220 million senior secured notes to 'D' from 'CC'. The rating on the company's $175 million senior subordinated notes is 'D'. The respective recovery ratings on the company's senior and subordinated notes are '3' and '6', indicating the expectation for meaningful (50% to 70%) and negligible (0% to 10%) recoveries in the event of a payment default. The downgrade follows Constar's announcement that it has filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court in Wilmington, Delaware. The bankruptcy filing comes after Constar missed a $9.6 million interest payment on its 11% senior subordinated notes due 2012. Constar manufactures blow-molded containers, mainly polyethylene terephthalate containers for carbonated beverages and water. The company operates in the fragmented and highly competitive rigid plastic packaging industry. Its operating margins have been lower than those of its rated peers because of a product mix that emphasizes high-volume, commodity-type carbonated beverage containers. In addition, it was unable to pass through to its customers steep plastic resin cost increases on a timely basis. CONTINENTAL AIRLINES: May Deepen Partnership with United Airlines ----------------------------------------------------------------- United Air Lines, Inc. may deepen its partnership with Continental Airlines by linking up on fuel purchasing and consolidating ticket counters, Joshua Freed of The Associated Press reports, citing UAL Corp., Chairman and Chief Executive Officer Glenn Tilton. Mr. Tilton confirmed to AP that a meeting of top executives from the Star Alliance is under way discussing cost saving measures like ground handling, fuel servicing, de-icing, and catering. He cited that not all those initiatives may be realized but could end up saving airlines a significant portion of the money they would have saved had they merged, the report said. Mr. Freed disclosed that United and Continental had talks but results have not been announced. Assuming a United-Continental partnership comes through, the report noted that United and Continental would still compete on domestic U.S. service, and discussions about cost-saving initiatives would stay away from anything as close as "bright line of pricing" as Mr. Tilton put it in the interview. Jaan Albrecht, Star Alliance chief executive officer added that Continental would leave the SkyTeam alliance and join Star Alliance in 2009, reports AP. Ted Bolema, a former Justice Department anti-trust attorney and current principal at Anderson Economic told AP that arrangements as contemplated by the United-Continental partnership may be legally tricky but the carriers may consult with the DOJ. Bill Hensel Jr. of the Houston Chronicle confirmed that Continental and United are discussing how to mesh their frequent flier programs, purchasing, information technology and even airport lounge networks and other facilities as stated by Mark Erwin, Continental senior vice president for corporate development and alliances to Houston Chronicle. Although a merger is speculated to be on the works, Bob Mann of R.W. Mann & Associates, told Houston Chronicle that the ongoing talks do not constitute a merger but by combining forces where they can, for the airlines to get some benefits without experiencing a lot of the disruption that a formal merger can cause. Continental has also filed with the government final comments for an antitrust immunity with United and carriers that belong to Star Alliance as Continental intends to leave the SkyTeam Alliance, the Report noted. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News, Issue No. 171; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on July 29, 2008, Standard & Poor's Ratings Services lowered its ratings on UAL Corp. and subsidiary United Air Lines Inc. (both rated B- /Negative/--), including lowering the long-term corporate credit ratings on both entities to 'B-' from 'B', and removed the ratings from CreditWatch, where they had been placed with negative implications May 22, 2008, as part of an industrywide review. The outlook is negative. About Continental Airlines Based in Houston, Texas, Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/-- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 3,000 daily departures throughout the Americas, Europe and Asia, serving 140 domestic and 139 international destinations. More than 550 additional points are served via SkyTeam alliance airlines. With more than 46,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with Continental Express, carries approximately 69 million passengers per year. * * * The Troubled Company Reporter said on Aug. 13, 2008, that Standard & Poor's Ratings Services took various actions on its ratings on Continental Airlines Inc. (B/Negative/B-3). S&P affirmed its 'B' long-term corporate credit rating, 'B-3' short-term corporate credit rating, all ratings on unsecured debt and on selected enhanced equipment trust certificates. S&P lowered S&P's ratings on other enhanced equipment trust certificates, particularly those secured by regional jets, and raised other ratings. All ratings were removed from CreditWatch, where they were placed with negative implications May 22, 2008, as part of an industrywide review. The rating outlook is negative. Continental Airlines, Inc. reported a working capital deficit of US$202 million, with current assets of US$4.713 billion and current liabilities of US$4.915 billion. At Dec. 31, 2007, the Company had a positive working capital of US$112 million, with US$4.561 billion in current assets and US$4.449 billion in current liabilities. As of Sept. 30, 2008, the Company had US$2.9 billion in unrestricted cash, cash equivalents and short-term investments, which is US$83 million higher than at Dec. 31, 2007. At Sept. 30, 2008, the Company also had US$164 million of restricted cash, cash equivalents and short-term investments, which is primarily collateral for estimated future workers' compensation claims, credit card processing contracts, letters of credit and performance bonds. Restricted cash, cash equivalents and short- term investments at Dec. 31, 2007, totaled US$179 million. Additionally, the Company held student loan-related auction rate securities reported as long-term investments at Sept. 30, 2008 with a par value of US$147 million and a fair value of US$130 million. CREATIVE LOAFING: Lays Off Seven Staffers ----------------------------------------- Michael Hinman at Tampa Bay Business Journal reports that Creative Loafing Inc.'s Tampa operation has laid off seven staffers. Citing Creative Loafing editor David Warner, the Business Journal relates that employees who include staff writer Alex Pickett and music critic Wade Tatangelo will remain on Creative Loafing's payroll until Wednesday Mr. Warner said in a statement, "If we don't streamline and refocus our newsroom operations, we won't survive. And unfortunately, that means we have to make equally grim choices." According to the Business Journal, Mr. Warner said that Creative Loafing will have a stronger Web focus while utilizing more independent contractors. The Court would hear more details about Creative Loafing's bankruptcy plan during on Jan. 26, 2009, the Business Journal states. About Creative Loafing Headquartered in Tampa, Florida, Creative Loafing, Inc. -- http://www.creativeloafing.com/-- publishes newspapers and magazines. The company and eight of its affiliates filed for Chapter 11 protection on September 29, 2008 (Bankr. M.D. Fla. Lead Case No. 08-14939). Chad S. Bowen, Esq., and David S. Jennis, Esq., Jennis & Bowen, P.L., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed assets and debts of between $10 million and $50 million each. CREDIT SUISSE: S&P Cuts Rating on Class M Certificates to 'D' ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on class M from Credit Suisse First Boston Mortgage Securities Corp.'s series 2001-CP4 to 'D' from 'CCC-'. The downgrade of class M reflects cumulative interest shortfalls and ongoing liquidity concerns stemming from the appraisal reduction amounts related to two specially serviced assets. At this time, S&P expects the current interest shortfall on class M to continue for an extended period. There are five loans totaling $53.4 million with the special servicer, LNR Partners Inc. ARAs totaling $16.4 million are in effect relating to two of these assets, both of which are real estate owned. Details for the two loans with ARAs ($33.8 million total exposure) are: -- The Novi Research Park loan has a total exposure of $17.7 million. The loan is secured by a 173,171-sq.-ft. office building in Novi, Michigan, built in 2000. The loan was transferred to LNR in November 2007 for imminent default and became REO in July 2008. A $6.3 million ARA is in effect for this loan. The appraised value for this asset was $12,825,000 as of April 3, 2008. -- The Princeton Park Corporate Center loan has a total exposure of $16.1 million. The loan is secured by an 86,265-sq.-ft. office building in South Brunswick, New Jersey, built in 1986. The loan was transferred to LNR in May 2006 for imminent default and became REO in September 2007. A$10.1 million ARA is in effect for this loan. The appraised value for this asset was $4,300,000 as of Oct. 20, 2008. According to the remittance report dated Dec. 17, 2008, the class M interest shortfall was $71,927 and the cumulative interest shortfall was $1,660,645. Class M has shorted interest for nine months, as reported in the trustee report. Standard & Poor's will continue to evaluate the transaction and will take any necessary CreditWatch placements and/or rating actions as S&P deems appropriate. Ratings Lowered Credit Suisse First Boston Mortgage Securities Corp. Commercial mortgage pass-through certificates series 2001-CP4 Rating ------ Class To From Credit enhancement (%) ----- -- ---- ---------------------- M D CCC- 1.59 COUNT ME IN: Sent to Chapter 7 By Alaska Sports Clubs ----------------------------------------------------- John Cook at TechFlash reports that Alaska sports clubs -- The Nordic Skiing Association of Anchorage, Campfire USA Alaska Council and Matanuska Soccer Club -- have filed a petition to force Count Me In into Chapter 7 liquidation. According to TechFlash, the petition was filed in the U.S. District Court for the Western District of Seattle. The Hon. Samuel Steiner handles the case, says the report. The sports clubs claimed that they are owed a total of $174,401, the report states. Peter Slinn at Stoel Rives represents The Nordic Skiiing Association, according to the report. The three sports clubs are among the 220 clubs and organizations across the country that Count Me In owes about $5 million in outstanding online registration fees, TechFlash relates. Count Me In CEO Terry Drayton told TechFlash in an interview that he is working hard to repay those debts. Citing Count Me In spokesperson Mark Firmani, the report states that Mr. Drayton wasn't aware of the involuntary petition at the time of the interview. TechFlash says that Mr. Drayton admitted that Count Me In didn't keep financial statements until about seven months ago. Count Me In had not been served with the court documents, the report says, citing Mr. Firmani. TechFlash relates that Mr. Drayton did address the possibility of filing for Chapter 11 bankruptcy during the interview. The report quoted Mr. Drayton as saying, "Bankruptcy is always an option. If you look at it, and there are lots of people who counsel it, it would be the easy way out is to basically put the Count Me In Corporation into bankruptcy. And if we do that, though, what we guarantee is that all of those clients aren't going to get paid. For me, it is the last option. The only way we will do that is if people continue to file so many lawsuits that we couldn't afford to defend them.... And so that is why when we talk to clients, we go: 'please save your money. I know you are mad at us, but if you file a lawsuit all you are doing is reducing the likelihood that you will get paid.' ... If a whole bunch of people sue, we will have to Chapter 11 it and then they will get nothing. That doesn't make any sense at all." Count Me In is a Bellevue online registration company. DELTA AIR: Reluctant on NWA Dreamliner Orders --------------------------------------------- As part of integrating its fleet with Northwest Airlines Corp.'s, Delta Air Lines, Inc., is eyeing to scale back Northwest's 787 Dreamliner orders from Boeing Co., and expand its own order for the 777-200LR. Specifically, Delta intends to purchase six Boeing 777-200LRs, six 737-700s and eight Bombardier CRJ-900s. Northwest has had 18 of the Dreamliner aircraft -- which guarantees exceptional fuel efficiency -- on order, Freep.com reported on November 28, 2008. Delta officials have disclosed that Boeing is reassessing a new date -- from the original August 2008 schedule -- for the firm delivery of its first 787 Dreamliners to Northwest. Delta president and Northwest CEO Ed Bastian told Freep.com that the airline already has the aircraft that "will fly almost any mission in the world," and declined to comment on the status of Northwest's Dreamliner orders. The Dreamliner costs between $146 million and $200 million, according to the report. About Delta Air Lines With its acquisition of Northwest Airlines, Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or http://www.nwa.com/-- is now the world's largest airline. From its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its Northwest subsidiary and Delta Connection carriers offer service to more than 376 destinations worldwide in 66 countries and serves more than 170 million passengers each year. Delta's marketing alliances allow customers to earn and redeem either SkyMiles or WorldPerks on more than 16,000 daily flights offered by SkyTeam and other partners. The merger closed on October 29, 2008. Prior to the merger, Delta was the world's second-largest airline in terms of passengers carried and Northwest was the world's fourth largest airline. Northwest and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington, represented the Northwest Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors retained Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy counsel. When the Northwest Debtors filed for bankruptcy, they listed $14.4 billion in total assets and $17.9 billion in total debts. On May 21, 2007, the Court confirmed the Northwest Debtors' amended plan. That amended plan took effect May 31, 2007. (Northwest Airlines Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). Delta and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provided the Delta Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provided the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, served as the Committee's financial advisors. On April 25, 2007, the Court confirmed the Delta Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. (Delta Air Lines Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DELTEK INC: September 30 Balance Sheet Upside-Down by $62 Million ----------------------------------------------------------------- Deltek, Inc.'s balance sheet at Sept. 30, 2008, showed total assets of $187.9 million and total liabilities of $249.8 million, resulting in a stockholders' deficit of $61.9 million. For three months ended Sept. 30, 2008, the company reported net income of $8.0 million compared with net income of $5.8 million for the same period in the previous year. For nine months ended Sept. 30, 2008, the company reported net income of $17.4 million compared with net income of $15.3 million for the same period in the previous year. For the nine months ended Sept. 30, 2008, net cash provided by operating activities was $33.0 million, compared to $12.1 million provided during the comparable period of 2007. The increase of $20.9 million was related to collection of customer payments which were offset by higher cash payments for taxes and other expenses in the first nine months of 2008. During the third quarter of 2008, cash flows from operating activities were impacted by cash payments of $862,000 for severance and other related costs associated with the restructuring charge recorded by the company during this period. The remaining accrued liability of $63,000 is expected to be paid within the next three months. A full-text copy of the 10-Q filing is available for free at http://ResearchArchives.com/t/s?372c About Deltek, Inc. Headquartered in Herndon, Virginia, Deltek, Inc. (Nasdaq: PROJ) -- http://www.deltek.com/--provides enterprise applications software and related services designed specifically for project- focused organizations. Project-focused organizations generate revenue from defined, discrete, customer-specific engagements or activities. DOUBLE EAGLE: Auditor Raises Going Concern Doubt ------------------------------------------------ Moore & Associates Chartered in Las Vegas, Nevada, in a letter dated December 22, 2008, to the Board of Directors and stockholders of Double Eagle Holdings, Ltd., expressed substantial doubt about the company's ability to continue as a going concern. The firm audited the statements of net assets (liabilities), including schedules of investments, of Double Eagle Holdings, Ltd. as of September 30, 2008 and 2007, and the related statements of operations, cash flows, changes in net assets (liabilities) and financial highlights for the years ended September 30, 2008, 2007, and 2006. Moore & Associates pointed out that the company has incurred a loss of $161,637 from operations, which raises substantial doubt about its ability to continue as a going concern. M.E. "Hank" Durschlag, chairman, chief executive officer and chief financial officer, disclosed in a regulatory filing with the Securities and Exchange Commission that the company has not established sources of revenue sufficient to fund the development of business, projected operating expenses and commitments for the next twelve months. At September 30, 2008, current assets, excluding investments, are $68,540, of which $57,970 is accounts receivable for management fees and accrued interest from portfolio companies. Current liabilities are $42,005. "The company has demonstrated an ability to raise funds as needed to fund operations and investments to complete its business plan. However, there can be no assurance that the planned sale of common stock will provide sufficient funding to develop the company's current business plan. These conditions raise some doubt about the company's ability to continue as a going concern. However, the funds raised to date substantially eliminate the likelihood that the company will not continue as a going concern." As of September 30, 2008, the company's statement of net assets showed total assets of $1,012,885, total liabilities of $42,005, and net assets of $970,880. About Double Eagle Double Eagle Holdings, Ltd. filed a notification under Form N54a with the U.S. Securities and Exchange Commission on April 5, 2007, indicating its election to be regulated as a business development company under the Investment Company Act of 1940. As a BDC, the company is required to invest at least 70% of its total assets in qualifying assets, which, generally, will be privately held companies or companies with thinly traded public securities at the time it invests in them. The company may invest a portion of the remaining 30% of its total assets in debt or equity securities of companies that may be larger or more stable than target portfolio companies. DUKE FUNDING: S&P Junks Ratings on Class A-1 & A-2 Notes -------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class A-1 and A-2 notes issued by Duke Funding High Grade V, a cash flow high-grade structured finance collateralized debt obligation of residential mortgage-backed securities managed by Ellington Management Group LLC. Concurrently, S&P removed the ratings from CreditWatch with negative implications. The downgrades reflect the increase in defaulted assets ($246 million as of Oct. 29, 2008, up from $111 million as of April 30, 2008) since Standard & Poor's last rating actions on July 1, 2008. Ratings Lowered And Removed From Creditwatch Negative Duke Funding High Grade V Rating ------ Class To From Current balance (mil. $) ----- -- ---- ------------------------ A-1 CC B/Watch Neg 1,243.7436 A-2 CC CCC-/Watch Neg 108.0000 Transaction Information ----------------------- Issuer: Duke Funding High Grade V Ltd. Collateral manager: Ellington Management Group LLC Underwriter: Wachovia Securities Inc. Tranche Last Current Information Action Action* ----------- ------ ------- Date (MM/YYYY) 07/2008 12/2008 Class A-1 notes rating B CC Class A-1 notes bal. (mil. $) 1,251.68 1,243.74 Class A-2 notes rating CCC- CC Class A-2 notes bal. (mil. $) 108.00 108.00 Portfolio Benchmarks* Current --------------------- ------- S&P weighted average rating BB S&P default measure (%) 2.01 S&P variability measure (%) 5.33 S&P correlation measure 4.54 Obligors rated 'BBB-' and above (incl. defaulted)(%) 37.15 Obligors rated 'BB-' and above (incl. defaulted)(%) 42.16 Obligors rated 'B-' and above (incl. defaulted)(%) 51.40 Obligors rated in 'CCC' range (incl. defaulted)(%) 37.25 Obligors rated 'CC', 'SD', or 'D' (%) 11.35 * Data based on the Oct. 29, 2008, report. DYNAMIC RESPONSE: Sept. 30 Balance Sheet Upside Down by $3.7MM -------------------------------------------------------------- Dynamic Response Group, Inc.'s September 30, 2008, balance sheet showed that the company had cash and cash equivalents of $3 million, current liabilities of $8.7 million and stockholders' deficit of $3.7 million. Chief Executive Officer Melissa K. Rice disclosed that during the nine months ended September 30, 2008, the company incurred a net loss of $1.5 million. "During the nine months ended September 30, 2008, operating activities used approximately $121,000 of cash. Given the company's results from operations, current forecasts, and financial position as of September 30, 2008, our present capital resources may not be sufficient to fund our planned operations through and beyond [the second quarter of 2009], and/or the company may require significant additional funds in maintain operations. These conditions raise substantial doubt about the company's ability to continue as a going concern." "As a result of its limited capital resources, the company intends to increase profitability by monitoring inventory, increasing the product mix and seeking less expensive modes of shipping. If we are not able to reduce or defer our expenditures, secure additional sources of revenue or otherwise secure additional funding, we may be unable to continue as a going concern, and we may be forced to restructure or significantly curtail our operations, file for bankruptcy or cease operations. We cannot assure you that we will successfully defer, reduce or eliminate certain operating expenditures or that we can obtain additional funding on reasonable terms, or at all. Further, if we raise additional funds by issuing equity securities, our stock price may decline, our existing stockholders will experience significant dilution, and the newly issued securities may have rights superior to those of existing shareholders." Ms. Rice said that the company's operating and capital requirements in connection with operations have been and will continue to be significant. "The recurring losses from operations raise doubt about the company's ability to continue as a going concern. Based on current plans, the company anticipates that revenues earned from product sales will be the primary source of funds for operating activities. Our ability to continue as a going concern is dependent upon our ability to generate sales from our new products and our obtaining adequate capital to fund losses until we become profitable." A full-text copy of the company's quarterly report is available for free at: http://researcharchives.com/t/s?371b Directed Appointed Effective December 3, 2008, Dynamic Response appointed Reno R. Rolle, as a director of the company to fill the board seat vacated by Joseph I. Emas. This appointment is effective until the next annual meeting of the shareholders or unless Mr. Rolle is removed by other action as allowed by the company's Bylaws. Mr. Rolle is the CEO of Red Rock Pictures, Inc., President of Synergy I.P. Group, LLC and inventor of the "Spin Fryer" a product currently licensed by Synergy I.P. Group, LLC to the company for manufacturing, marketing and distribution. Pursuant to the terms of the May 2008 manufacturing and marketing agreement, in exchange for the exclusive rights to manufacture and market the "Spin Fryer", the company agreed to compensate Synergy I.P. Group, LLC, in cash based on a percentage of sales, and options to purchase up to 5,000,000 shares of the company's common stock upon meeting certain performance benchmarks. Mr. Rolle was previously CEO for Shop America USA which specialized in direct response television and infomercial marketing. Mr. Rolle was also a founding principal of the National Lampoon Acquisition Group, LLC, an investment group that acquired the "National Lampoon" brand. Mr. Rolle founded National Lampoon Home Entertainment in 2002 to produce and distribute National Lampoon branded DVDs. Between 1997 and 2001 Mr. Rolle was the co-founder, Chairman and CEO of Synergy Worldwide, Inc., a product engineering, design and marketing company. From 1994 to 1997, Mr. Rolle was a co-founder of HSN Direct, a direct response television joint venture with Home Shopping Network, Inc. Mr. Rolle will receive 750,000 shares of the company's common stock annually as consideration for serving on the company's Board of Directors. There are no family relationships between Mr. Rolle and any of the company's members of the Board of Directors or executive officers. There are no arrangements between Mr. Rolle and any other persons pursuant to which Mr. Rolle was appointed as director. Except for the company's manufacturing and marketing agreement with Synergy I.P. Group, LLC for the "Spin Fryer", there are no transactions, or proposed transactions, to which the company is or was to be a party and in which Mr. Rolle had a direct or indirect material interest that are required to be disclosed under Item 404(a) of Regulation S-K. About Dynamic Response Dynamic Response Group, Inc., is a marketing company engaged in the business of Electronic & Multi Media Retailing, including print, radio, television and the Internet and considers itself an emerging leader in the use of direct response transactional television programming, known as infomercials, to market consumer products. EASTBRIDGE INVESTMENT: Posts $107,865 Net Loss in 3rd Quarter ------------------------------------------------------------- Investment Group Corporation reported that for the three months ended September 30, 2008, it posted a net loss of $107,865. For the nine months ended September 30, 2008, the company posted a net loss of $577,694. As of September 30, 2008, the company's balance sheet showed total assets of $7,976,558, total liabilities of $2,809,808, and total stockholders' equity of $5,083,560. Chief Executive Officer Keith Wong and Chief Financial Officer Norman Klein disclosed in a regulatory filing dated November 14, 2008, the company has incurred cumulative net operating losses of $3,451,898 since inception until the new acquisition. "We place no assurance on the on going operations of our new subsidiaries. So far, most of the working capital has been provided by the company's management team members. They have done so since EastBridge's inception and have indicated their continued support for EastBridge; however, there is no assurance that additional funds will be advanced. These matters raise substantial doubt about the company's ability to continue as a going concern." "We have cash and cash equivalents of $1,031,716 and $59,162 compared to working capital of $2,508,351 and deficit of $221,082 as of September 30, 2008, and December 31, 2007." "We have operating activities provided by (used in) $927,973 and ($39,587) for the nine months ended September 30, 2008 and 2007, respectively. The difference is mainly attributable to the increase in revenues in the current year and increase in operating expenses of the company." "Cash provided by financing activities was $44,581 and $27,059 for the nine months ended September 30, 2008 and 2007, respectively. The increase is due to repayment of advances from officers and cash received from our line of credit." "Our operations are currently financed through various loans from senior management and principal shareholders as it has been the case for the past several years. We also have a line or credit that we can borrow against and are seeking to increase the amount of our line of credit. However, there are no assurances that management will continue to fund the company. Management is in the process of taking action to strengthen our working capital position and generate sufficient cash to meet our operating needs. In addition, we also anticipate generating revenue through our proposed financial services that we provide to our clients and the newly acquired companies which we own at least a 51% stake. No assurances can be made that management will be successful in achieving its plan, or that additional capital will be available on a timely basis or at acceptable terms." A full-text copy of the company's quarterly report is available for free at: http://researcharchives.com/t/s?371d About EastBridge Investment Group Corporation EastBridge Investment Group Corporation provides financial services including public offering guidance, joint venture, and merchant banking services, to the small to medium-size businesses in China, India and other Asian countries. Normally, the company's first step is to help its clients become US public companies. Its target clients are mostly in China, Hong Kong, and Australia. The company focuses on short-term investment opportunities where the expected return is within a one to two year period and the potential gain is substantial for both parties. The company plans to expand to other Asian countries in 2009. EDDIE WIGGINS: Files for Chapter 11 Due to Unpaid Debts by GM ------------------------------------------------------------- Chuck Thompson at Macon.com reports that Eddie Wiggins said that he has filed for Chapter 11 bankruptcy protection. Macon.com quoted Mr. Wiggins as saying, "Our plan is to be closed for New Year's Day and then be back open Friday with a skeleton crew. We hope to go before a judge either Monday or Tuesday and have our reorganization plan approved so we can keep trying to sell cars and keep our employees working." According to Macon.com, Mr. Wiggins said that he has 47 workers at his GMC, Buick, and Pontiac dealership on Russell Parkway. Mr. Wiggins said that he was forced to file for bankruptcy because he hasn't been paid about $140,000 in rebate and incentive money he is due from General Motors Corp., Macon.com states. "I don't owe GM anything, and I'm up to date with GMAC (the financing company for GM dealers). But I'm having to file and notify my creditors because of the cash flow problems from not receiving what GM owes me," Macon.com quoted Mr. Wiggins as saying. The report states that Mr. Wiggins said that he usually gets rebate payments and payments for warranty work his service department performs every two weeks from GM. According to the report, Mr. Wiggins said, "But I haven't received any payments since Nov. 27. GM said then they were delaying payment until Dec. 11, but nothing has come from them since then. Smaller dealerships depend on that cash flow to operate, and we haven't gotten it. Before, GM would send the rebate checks directly to me, and then I'd pay GMAC and my other creditors. But after GMAC put us on watch, the last check we received was made out to both my dealership and GMAC. We sent it on to GMAC, and they sent back what they owed us. But now GM is saying GMAC has the ($140,000 rebate) payment held up, but GMAC says it hasn't received the money." GM officials offered to take over the dealership, Macon.com relates, citing Mr. Wiggins. He said that he would still be liable for any losses from his used car inventory, the report states. "I think I can sell the used cars without a loss, but I'm not sure GM could, so I decided on filing Chapter 11 so that we may be able to remain in control with the court's approval," the report quoted him as saying. Eddie Wiggins -- http://www.eddiewiggins.com-- is a car dealer based in Warner Robins, Georgia. EMCORE CORPORATION: Auditor Raises Going Concern Doubt ------------------------------------------------------ Deloitte & Touche LLP, in Dallas, Texas, in a letter dated December 30, 2008, to the Board of Directors and Shareholders of EMCORE Corporation expressed substantial doubt about the company's ability to continue as a going concern. The firm audited the consolidated balance sheets of EMCORE Corporation and subsidiaries as of September 30, 2008 and 2007, and the related consolidated statements of operations, shareholders' equity and comprehensive income (loss), and cash flows for each of the three years in the period ended September 30, 2008. "The company's recurring losses from operations raise substantial doubt about its ability to continue as a going concern." President and Chief Executive Officer Hong Q. Hou, Ph.D., disclosed in a regulatory filing that the company commenced operations in 1984 and as of September 30, 2008, the company had an accumulated deficit of $424.8 million. "We incurred a net loss of $80.9 million in fiscal 2008, net loss of $58.7 million in fiscal 2007, and net income of $54.9 million in fiscal 2006. Our operating results for future periods are subject to numerous uncertainties and we cannot assure you that we will not continue to experience net losses for the foreseeable future. Although our revenue has grown in recent years, we may be unable to sustain such growth rates if there are adverse changes in market or economic conditions. If we are not able to increase revenue and/or reduce our costs, we may not be able to achieve profitability." "At September 30, 2008, cash, cash equivalents, available-for-sale securities and restricted cash totaled approximately $24.7 million. Historically, the company has consumed cash from operations. During fiscal 2008, we consumed cash from operations of approximately $41.9 million, with the rate of cash consumption declining in the third and fourth quarters. Historically, we have addressed our liquidity requirements through a series of cost reduction initiatives, capital markets transactions and the sale of assets. As of September 30, 2008, we had approximately $79.2 million in working capital. Although we expect our operating performance to improve in future periods, we anticipate that the recession in the United States and the slowdown of economic growth in the rest of the world may create a more challenging business environment for us in the near term." "These matters raise substantial doubt about the company's ability to continue as a going concern," Dr. Hong Q. Hou said. Management Actions and Plans Recently, the company has revised the assumptions underlying its operating plans and recognized that additional actions were needed to position its operations to minimize cash usage. Accordingly, Dr. Hong Q. Hou said the company undertook a number of initiatives aimed at conserving or generating cash on an incremental basis through the end of 2009. "These initiatives included business realignment, structural cost and headcount reductions, reduction of capital spending, a greater emphasis on managing our working capital, and certain asset sales. In December 2008, we announced an agreement to sell our non-core equity interests for approximately $11.4 million in cash." "In addition to these operational measures, we are actively pursuing a number of capital raising initiatives including the sale of a minority ownership position in the company's photovoltaics business as an initial step towards a potential spin off of the business. In October 2008, we announced the closing of a $25 million secured credit facility with Bank of America and, in November 2008, the company sold $1.7 million of our auction rate securities at 100% par value with the remaining $1.4 million in auction rate securities expected to be settled at 100% par value by June 2010." "These initiatives are intended to conserve or generate cash in response to the deterioration in the global economy so that we can preserve adequate liquidity through December 2009. However, the full effect of many of these actions will not be realized until later in 2009, even if they are successfully implemented. We are committed to exploring all of the initiatives discussed above and there is no assurance that capital markets conditions will improve within that time frame. Our ability to continue as a going concern is substantially dependent on the successful execution of many of the actions referred to above within the timeline contemplated by our plans." "If cash generated from operations and cash on hand are not sufficient to satisfy EMCORE's liquidity requirements, EMCORE will seek to obtain additional equity or debt financing. Due to the unpredictable nature of the capital markets, additional funding may not be available when needed, or on terms acceptable to EMCORE. If EMCORE is required to raise additional financing and if adequate funds are not available or not available on acceptable terms, our ability to continue to fund expansion, develop and enhance products and services, or otherwise respond to competitive pressures may be severely limited. Such a limitation could have a material adverse effect on EMCORE's business, financial condition, results of operations, and cash flow." As of September 30, 2008, the company's balance sheet showed total assets of $329,278,000, total liabilities of $75,556,000 and total stockholders' equity of $253,722,000. A full-text copy of the company's annual report is available for free at: http://researcharchives.com/t/s?3724 About EMCORE Corporation EMCORE Corporation and consolidated subsidiaries designs, manufactures and markets a broad portfolio of compound semiconductor-based products for the broadband, fiber optic, satellite and solar power markets. The company has two reporting segments: Fiber Optics and Photovoltaics. FANNIE MAE: Says IndyMac Must Repurchase $1BB of Home Mortgages --------------------------------------------------------------- Fannie Mae believes that IndyMac Bank has obligations to repurchase about $1 billion of home mortgages that failed to meet Fannie Mae's standards, Damian Paletta and James R. Hagerty at The Wall Street Journal report, citing people familiar with the matter. According to WSJ, banks that sell loans to Fannie Mae or Freddie Mac must make "representations and warranties" that those loans meet certain quality standards, or the lenders can be forced to buy the loans back. The report says that IndyMac Bank started selling the bulk of its loans to Fannie Mae and Freddie Mac in the second half of 2007. Citing a Fannie Mae spokesperson, WSJ relates that the company is working with the Federal Deposit Insurance Corp. -- which is selling IndyMac Bank -- to resolve the issue. "We are awaiting information from the FDIC," the report quoted the spokesperson as saying. The Federal National Mortgage Association -- (FNMA) (NYSE: FNM) -- commonly known as Fannie Mae, is a shareholder-owned U.S. government-sponsored enterprise. Fannie Mae has a federal charter and operates in America's secondary mortgage market, providing mortgage bankers and other lenders funds to lend to home buyers at low rates. Fannie Mae was created in 1938, under President Franklin D. Roosevelt, at a time when millions of families could not become homeowners, or risked losing their homes, for lack of a consistent supply of mortgage funds across America. The government established Fannie Mae to expand the flow of mortgage funds in all communities, at all times, under all economic conditions, and to help lower the costs to buy a home. In 1968, Fannie Mae was re-chartered by the U.S. Congress as a shareholder-owned company, funded solely with private capital raised from investors on Wall Street and around the world. Fannie Mae is the U.S. largest mortgage buyer, according to The New York Times. FEDERAL TRUST: Posts $10.2 Million Net Loss in 3rd Quarter ---------------------------------------------------------- Federal Trust Corporation had a net loss for the three-month period ended September 30, 2008, of $10.2 million, compared with a net loss of $6.1 million. "The loss for the three months ended September 30, 2008, is primarily attributable to a $6.1 million provision for loan losses, together with interest income foregone as a result of the increase in nonperforming loans and the $1.3 million write-off of the costs associated with our unsuccessful efforts to raise additional equity capital," President and Chief Executive Officer Dennis T. Ward and Executive Vice President and Chief Financial Officer Gregory E. Smith disclosed in a regulatory filing dated November 14, 2008. "If the company is not able to raise additional capital or sell control of all or part of the company in a merger or other transaction, management believes that there is substantial doubt about the company's and the Bank's ability to continue as a going concern. The Bank's operating and capital requirements, the recurring losses due to recent increases in nonperforming loans, declining net interest margin and continuing high levels of operating expenses are contributing factors for this concern. In order to comply with its regulatory capital requirements, the Bank needs to raise substantial additional capital. There is no guarantee that a merger or similar transaction or that sufficient capital will be available at acceptable terms, if at all." As previously reported in the Troubled Company Reporter, Federal Trust said that on October 29, 2008, it received notice from the staff of the NYSE Alternext US indicating the Exchange's intent to delist Federal Trust common stock from the Exchange. The letter from the Exchange indicated that Federal Trust no longer complies with the Exchange's continued listing standards. Specifically, the staff of the Exchange determined that Federal Trust is in violation of Section 1003(a)(iv) of the NYSE Alternext US LLC Company Guide. The letter noted the issues raised by the Cease and Desist Order that has previously been issued to Federal Trust by the Office of Thrift Supervision, as well as Federal Trust's inability to raise capital by the September 30, 2008 deadline previously established by the Office of Thrift Supervision. The Exchange has also determined that Federal Trust has become subject to Section 1002(b) of the company Guide, which states that the Exchange will consider removal from listing of a security when, in the opinion of the Exchange, "it appears that the extent of public distribution or the aggregate market value of the security has become so reduced as to make further dealings on the Exchange inadvisable." Federal Trust does not intend to appeal the Exchange's intention to delist the common stock from the Exchange, will seek to have one or more market makers quote the common stock for trading through the OTC Bulletin Board or the "Pink Sheets". As of September 30, 2008, the company's balance sheet showed total assets of $601,741,000, total liabilities of $591,880,000 and total stockholders' equity of $9,861,000. A full-text copy of the company's quarterly report is available for free at: http://researcharchives.com/t/s?3720 About Federal Trust Corporation Federal Trust Corporation is the sole shareholder of Federal Trust Bank and Federal Trust Mortgage Company. Federal Trust operates as a unitary savings and loan holding company. Federal Trust's primary business activity is the operation of the Bank and the Mortgage Company. The Bank is a federally-chartered stock savings bank. The Bank's deposits are insured up to applicable limits by the Federal Deposit Insurance Corporation. The Bank provides a wide range of banking services to individual and corporate customers through its 11 full-service branch offices located in Orange, Seminole, Volusia, Lake and Flagler Counties, Florida. Until April 2008, the company operated a residential mortgage company, Federal Trust Mortgage Company, where the company originated residential mortgage loan, purchased and sold mortgage loans in the secondary market, and serviced residential mortgage loans, including loans in Federal Trust Bank's loan portfolio. In April 2008, Federal Trust Bank assumed the staff and operations of Federal Trust Mortgage Company. FOOTHILLS RESOURCES: Has Until Jan. 30 to Deliver Financials ------------------------------------------------------------ On December 2, 2008, Foothills Resources, Inc., entered into a Limited Waiver to Credit Agreement and Amendment to Third Amendment to Credit Agreement and Amended and Restated Forbearance Agreement, dated as of December 2, 2008, by and among the company and each of its subsidiaries as borrowers, certain lenders and Wells Fargo Foothill, LLC, as administrative agent. Pursuant to the Waiver, the lenders and Wells Fargo Foothill, LLC, extended until January 30, 2009, the date by which the company must deliver to lenders and Wells Fargo Foothill, LLC, copies of the company's and its subsidiaries' forecasted balance sheets, profit and loss statements, and cash flow statements, pursuant to Section 5.3 of the Credit Agreement, dated as of December 13, 2007, by and among the company and each of its subsidiaries as borrowers, certain lenders and Wells Fargo Foothill, LLC, as administrative agent, as amended. Additionally, the Waiver amended the Credit Agreement to require the company to maintain a leverage ratio less than 10.41:1.00 for the calendar month ending October 31, 2008, 10.73:1.00 for the calendar month ending November 30, 2008, and 10.96:1.00 for the calendar month ending December 31, 2008. The Waiver further amended the Credit Agreement to allow Wells Fargo Foothill, LLC, in its sole discretion, to extend the deadline for the company to complete certain actions identified in the report entitled "Restructuring Critical Path and Options" dated September 19, 2008. A full-text copy of the Limited Waiver Agreement is available for free at: http://researcharchives.com/t/s?373e In a regulatory filing dated November 14, 2008, Chief Executive Officer Dennis B. Tower and Chief Financial Officer W. Kirk Bosche disclosed that the company is considering and actively pursuing other strategic alternatives, which may include a sale of a portion of the company's assets, a merger or other business combination, or the issuance of equity or other securities, in connection with the repayment of all or a portion of the company's obligations under the Credit Facility. "All of these factors raise substantial doubt about the company's ability to continue as a going concern." The company reported a net loss of $2,148,000 for the three months ended September 30, 2008, compared to a net loss of $2,172,000 for the three months ended September 30, 2007. As of September 30, 2008, the company's balance sheet showed total assets of $89,464,000, total current liabilities of $78,812,000, asset retirement obligations of $662,000, fair value of derivative financial instruments of $3,679,000, and total shareholders' equity of $6,311,000. A full-text copy of the company's quarterly report is available for free at: http://researcharchives.com/t/s?373f About Foothills Resources, Inc. Headquartered in Bakersfield, California, Foothills Resources, Inc. (OTC:FTRS) -- http://www.foothills-resources.com/-- is an independent energy company engaged in the acquisition, exploration, exploitation and production of oil and natural gas opportunities in California, Texas and Oklahoma. FORD MOTOR: Vehicle Sales in US Drop Almost 19% in 2008 ------------------------------------------------------- Jeff Bennett at The Wall Street Journal reports that Ford Motor Co. said on Friday that industry-wide car and truck sales in the U.S. dropped almost 19% in 2008. Ford Motor's chief sales analyst, George Pipas, said that overall vehicle sales, including heavy and medium-duty trucks, were expected to drop to 13.5 million in 2008 from 16.5 million in 2007, which would be the lowest sales year since 1992, WSJ relates. Citing Mr. Pipas, WSJ states that the sales rate for vehicles, on an annualized basis, fell from 15.6 million vehicles in the first quarter 2008 to: -- 14.6 million in the second quarter 2008, -- 13.1 million in the third quarter 2008, and -- 10.6 million in the fourth quarter 2008. "We are not looking for sales in the first quarter to be much different than the fourth quarter," WSJ quoted Mr. Pipas as saying. Ford Motor, according to WSJ, said that the continued slowdown won't change much in the first quarter 2009. Citing Mr. Pipas, WSJ says that Ford Motor's market share in the U.S. would drop to 14% for 2008, from 14.7% in 2007. Mr. Pipas said that vehicle sales could recover in the second half of 2009 as efforts to stimulate the economy take, according to WSJ. Ford Motor said its overall 2009 sales would total 12.5 million units, while light-vehicle sales may hit 12.2 million, WSJ reports. Neil Irwin at the Washington Post reports that the U.S. Treasury Department keeps leeway in the U.S. auto aid. The Washington Post relates that the Treasury "will determine the form, terms, and conditions of any investment made pursuant to this program [Automotive Industry Financing Program] on a case-by-case basis." 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-'. FORSTER DRILLING: CFO and Controller Garrick Clayton Steps Down --------------------------------------------------------------- Forster Drilling Corporation disclosed in a regulatory filing with the Securities and Exchange Commission of the changes in the company's management. On Oct. 27, 2008, Garrick Clayton stepped down as controller, chief operating officer and acting chief financial officer of the company. On Oct. 29, 2008, Fred E. Forster, III, stepped down as a member of the board of directors. Mr. Forster is no longer an officer, director, employee or agent of the company. Headquartered in Houston, Forster Drilling Corporation (OTC BB: FODL.OB) -- http://www.forsterdrilling.com/-- is engaged in in the refurbishing land drilling rigs and deploying them for use by oil and natural gas producers. Currently, the company provides contract land drilling services in New Mexico to two different oil and gas company customers. Forster Drilling Corp.'s consolidated balance sheet at Feb. 29, 2008, showed $15,050,904 in total assets and $16,088,602 in total liabilities, resulting in a $1,037,698 total stockholders' deficit. Going Concern Doubt LBB & Associates Ltd., LLP, in Houston, expressed substantial doubt about Forster Drilling Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Nov. 30, 2007. The auditing firm pointed to the company's absence of significant revenues, recurring losses from operations, and its need for additional financing in order to fund its projected loss in 2008. FRONTIER AIRLINES: Has Long-Term Labor Deal with Maintenance Staff ------------------------------------------------------------------ Frontier Airlines' aircraft appearance agents and maintenance cleaners represented by the International Brotherhood of Teamsters have ratified the long-term labor agreement with the airline, Frontier said in a statement dated December 17, 2008. The Agreement, which Frontier and the Teamsters reached on November 26, modified the terms of the existing collective bargaining agreement concerning the Appearance Agents and Maintenance Cleaners, which covers the period from September 16, 2005 through September 16, 2015. Among other things, the Agreement will provide Frontier with wage concessions. Specifically, the wage rates for all Aircraft Appearance Agents and Maintenance Cleaners represented by the Teamsters will be reduced between 1% and 6% during certain periods until December 12, 2012. Pursuant to the Agreement, the Teamsters will have an allowed general non-priority unsecured claim for $472,196 against the Debtors under Section 502 of the Bankruptcy Code. "I want to express my gratitude to our Aircraft Appearance Agents and Maintenance Cleaners for their willingness to make sacrifices to help in our restructuring efforts and eventual growth and sustainability," Frontier President and CEO Sean Menke stated. "This agreement, like the concessions made by the majority of our employee groups, is vital to Frontier's cost-reduction efforts ahead of our emergence from Chapter 11," he added. The Teamsters represents 119 Aircraft Appearance Agents and 4 Maintenance Cleaners at Frontier. About Frontier Airlines Inc. Headquartered in Denver, Colorado, Frontier Airlines Inc. -- http://www.frontierairlines.com/-- provides air transportation for passengers and freight. It operates jet service carriers linking Denver, Colorado hub to 46 cities coast-to-coast, 8 cities in Mexico, and 1 city in Canada, as well as provide service from other non-hub cities, including service from 10 non-hub cities to Mexico. The Debtor and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008, (Bankr. S.D. N.Y. Case No. 08-11297 thru 08-11299.) Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. (Frontier Airlines Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FRONTIER AIRLINES: Inks Long Term Pact with Pilots -------------------------------------------------- Frontier Airlines, Inc., has reached a tentative agreement for long-term wage and benefits concessions with leaders of the Frontier Airlines Pilots Association on December 19, 2008, the carrier said in an official statement. The Agreement, which has been approved by the FAPA Board of Directors, will go before the union membership for a ratification vote. "Our pilots have been the epitome of professionalism throughout this process, and for that, I thank them," said Frontier President and CEO Sean Menke, calling the Tentative Agreement "a big step forward for us." "It is important that all of our employees are on board and moving in the same direction during our restructuring efforts," Mr. Menke noted. According to FAPA President John Stemmler, the Union "[understands] the challenges Frontier faces right now and our membership has worked to support Frontier through the entire process." Mr. Stemmler added that the Tentative Agreement "minimizes the damage to our contract, preserves our company's collaborative culture, and will give Frontier its best chance to survive in the near term and flourish in the long term." If the agreement is approved by the FAPA union membership, Frontier will have secured concessions from all of its represented employees -- a critical milestone in the company's ongoing restructuring efforts. To recall, in November 2008, the Court authorized the Debtors to enter into, and perform under a Pilot Extension Agreement with FAPA, subsequent to the ratification of the FAPA membership in June 2008, of certain tentative pacts that provided for temporary wage and benefit concessions to help Frontier in its attempt to, among other things, secure debtor-in-possession financing. The Extension Agreement extended the wage concessions agreed to under the Pilot Interim Agreement through December 1, 2008. About Frontier Airlines Inc. Headquartered in Denver, Colorado, Frontier Airlines Inc. -- http://www.frontierairlines.com/-- provides air transportation for passengers and freight. It operates jet service carriers linking Denver, Colorado hub to 46 cities coast-to-coast, 8 cities in Mexico, and 1 city in Canada, as well as provide service from other non-hub cities, including service from 10 non-hub cities to Mexico. The Debtor and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008, (Bankr. S.D. N.Y. Case No. 08-11297 thru 08-11299.) Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. (Frontier Airlines Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FRONTIER AIRLINES: Court OKs Rejection of Pepsi Center Sponsorship ------------------------------------------------------------------ Frontier Airlines Inc. obtained approval from the U.S. Bankruptcy Court for the Southern District of New York to reject an agreement to sponsor teams that play in Denver's Pepsi Center arena, including the Colorado Avalanche, Denver Nuggets, Colorado Crush and the Colorado Mammoth lacrosse team. The Court also approved Frontier's rejection of its beverage agreement with Coca-Cola Enterprises, Inc. As reported by the Troubled Company Reported on Dec. 11, 2008, in a document filed with the Court, Frontier proposed to reject effective Dec. 4, its Agreement for Sponsorship and Promotion Rights dated July 1, 2006, with Kroenke Arena Company LLC. Objections are still due Dec. 15. The rejection plan was filed as a notice before the U.S. Bankruptcy Court for the Southern District of New York. The rejection may be approved absent objections. According to Bloomberg's Christopher Scinta, the Avalanche and Nuggets are owned by billionaire Stan Kroenke, who also co-owns the National Football League's St. Louis Rams and has a stake in English Premier League soccer club Arsenal. Frontier had a package sponsorship to advertise in the arena and provide travel to the teams, said spokeswoman Lindsey Purves, who did not disclose the value of the deal. Bloomberg notes that while Frontier is withdrawing advertising from the Pepsi Center, the carrier will now serve PepsiCo products on its planes after rejecting a contract with Coca-Cola Enterprises Inc., Ms. Purves said. About Frontier Airlines Inc. Headquartered in Denver, Colorado, Frontier Airlines Inc. -- http://www.frontierairlines.com/-- provides air transportation for passengers and freight. It operates jet service carriers linking Denver, Colorado hub to 46 cities coast-to-coast, 8 cities in Mexico, and 1 city in Canada, as well as provide service from other non-hub cities, including service from 10 non-hub cities to Mexico. The Debtor and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008, (Bankr. S.D. N.Y. Case No. 08-11297 thru 08-11299.) Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. (Frontier Airlines Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) GENERAL DATACOMM: Can't File Annual Report on Time -------------------------------------------------- General Datacomm Industries, Inc., advised the Securities and Exchange Commission that it won't be able to timely file its annual report on Form 10-K for the fiscal year ended September 30, 2008, without unreasonable effort or expense. William G. Henry, Vice President, Finance and Administration Chief Financial Officer of the company, explained that the company has limited financial resources and has been negotiating with its audit firm for its fees for the audit. "This has delayed the preparation of the Form 10-K. The [company] plans to file its annual report on Form 10-K, excluding financial statements, and its unaudited financial statements on Form 8-K, on or before the fifteenth calendar day following the original due date of the Form 10-K. The [company] plans to file an amended Form 10-K upon completion of the audit," Mr. Henry said. On December 8, 2008, the company finalized an amendment of its subsidiary's mortgage loan with Atlas Partners Mortgage Investors, LLC, for the purpose of extending the maturity of such mortgage loan from July 31, 2009 to July 31, 2010. As consideration for the extension, the interest rate was increased effective January 1, 2009, to 30-day LIBOR plus 8% from 30-day LIBOR plus 6%, the minimum 30-day LIBOR was set at 4%, and an extension fee of $45,000 is payable August 1, 2009. All other terms and conditions remain the same. On November 10, 2008, the company sold additional receivables with a face value of $256,140 for an aggregate purchase price of $250,000 to Howard S. Modlin, its Chief Executive Officer, pursuant to the same terms and conditions as the Receivable Sales Agreement dated October 24, 2008. The company sold additional receivables with a face value of $256,228 for an aggregate purchase price of $250,000 to Mr. Modlin on November 25, and additional $230,625 in receivables in December 2008. The company has indicated that, subject to Mr. Modlin's agreement, it may sell additional receivables from time-to-time to Mr. Modlin but there can be no assurance of any such transactions or the extent thereof. About General DataComm Based in Naugatuck, Connecticut, General DataComm Industries Inc. (Other OTC: GNRD.PK) -- http://www.gdc.com/-- provides secure, NEBS-compliant networking for telcos, governments and businesses. GDC's solutions help customers to bridge technologies, maximize their investments in existing voice and data networks, and transition to the newest network architectures. GDC's product offerings enable legacy and DSL network access; bandwidth management, multiprotocol label switching (MPLS), voice over IP (VoIP), Ethernet, power over Ethernet (PoE), and wireless networking, and are supported by services for network installation, maintenance, operations, repair, enterprise security management and complete network outsourcing. Going Concern Doubt Eisner LLP, in New York, expressed substantial doubt about General DataComm Industries Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Sept. 30, 2007. The auditing firm reported that the company has both a working capital and stockholders' deficit at Sept. 30, 2007, and has no current ability to obtain new financing. The company has no current ability to borrow additional funds. It must, therefore, fund operations from cash balances, cash generated from operating activities and any cash that may be generated from the sale of non-core assets such as real estate and others. The company has $28,306,954 of debentures including accrued interest which mature on Oct. 1, 2008, which it is presently unable to pay. For the quarterly period ended June 30, 2008, the company reported $10,138,000 in total assets and $42,333,000 in total liabilities, resulting in $32,195,000 in stockholders' deficit. GENERAL GROWTH: Picks Weil Gotshal as New Bankruptcy Counsel ------------------------------------------------------------ General Growth Properties Inc. has replaced Sidley Austin LLP with Weil, Gotshal & Manges LLP as its bankruptcy counsel, Kris Hudson at The Wall Street Journal reports, citing people familiar with the matter. According to WSJ, General Growth hasn't filed for Chapter 11 protection, but is considering doing so if it fails to sell assets or secure an agreement on deadline extensions with its lenders. The report says that General Growth is struggling to restructure or postpone payment on $27 billion in debt as large installments of it come due in the coming months. Weil Gotshal, says WSJ, has worked on the bankruptcy cases of Lehman Brothers Holdings Inc., Bethlehem Steel Corp., and Marvel Entertainment Group. According to the report, Weil Gotshal also advises General Motors Corp. and Extended Stay Hotels Inc. Citing people familiar with the matter, WSJ relates that General Growth will also hire Kirkland & Ellis LLP as bankruptcy counsel for some of its subsidiaries. Goldman Sachs Group Inc., Morgan Stanley, and Deutsche Bank AG, are working as advisers for General Growth, WSJ states. WSJ says Paul, Weiss, Rifkind, Wharton & Garrison LLP will assist holders of some of the $600 million in General Growth bonds coming due in March and April 2009 in negotiations with General Growth. Citing a person familiar with the matter, Dan Wilchins and Ilaina Jonas at Reuters relates that hedge fund Pershing Square Capital Management, is betting that General Growth will file for bankruptcy. Pershing Square has a 7.5% stake in General Growth, says the report. Pershing Square, according to Reuters, said that General Growth's real problem is its maturing debt -- two loans totaling $900 million, set to mature at the start of December. Reuters relates that lenders extended that deadline to February 2009, adding to the $2.49 billion of other debt due in 2009. Pershing Square believes that General Growth is having trouble refinancing its debt due to difficulties in the commercial mortgage market in the weeks after Lehman Brothers' Chapter 11 filing, Reuters states. Citing a person familiar with the matter, the report says that General Growth has problems with liquidity rather than solvency. Based in Chicago, Illinois, General Growth Properties, Inc. (NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S. mall owner with 200-plus shopping malls in 44 states. General Growth is a self-administered and self-managed real estate investment trust. General Growth owns, manages, leases and develops retail rental property, primarily shopping centers. Substantially all of its properties are located in the United States, but the company also has retail rental property operations and property management activities -- through unconsolidated joint ventures -- in Brazil and Turkey. Its Master Planned Communities segment includes the development and sale of residential and commercial land, primarily in large-scale projects in and around Columbia, Maryland; Houston, Texas; and Summerlin, Nevada, as well as the development and sale of its one residential condominium project located in Natick (Boston), Massachusetts. General Growth said in a regulatory filing Sept. 30 that its potential inability to address its 2008 or 2009 debt maturities in a satisfactory fashion raises substantial doubts as to its ability to continue as a going concern. General Growth had $29.6 billion in total assets and $27.3 billion in total liabilities as at Sept. 30. * * * As reported by the Troubled Company Reporter on Dec. 11, 2008, Fitch Ratings, has downgraded the Issuer Default Ratings and outstanding debt ratings of General Growth Properties to 'C' from 'B'. GENERAL MOTORS: Board of Directors Approves Amendment of Bylaws -------------------------------------------------------------- General Motors Corporation disclosed in a regulatory filing that its board of directors approved amendments to the company's Bylaws effective immediately. Section 2.4, which establishes the process for calling a special meeting of the board well as the timing of notice of a special meeting, was amended to add that the secretary of the company may provide less than 24 hours notice if the notice is reasonable under the circumstances. In addition, Section 2.5, which sets the quorum for meetings of the board, was amended to provide that one third of the whole board constitutes a quorum at a regular or special meeting of the board for which directors receive notice at least 24 hours in advance and that for a special meeting for which directors received less than 24 hours' notice, a majority of the whole board constitutes a quorum. A full-text copy of the BYLAWS as of Dec. 19, 2008, is available for free at http://ResearchArchives.com/t/s?3736 Neil Irwin at the Washington Post reports that the U.S. Treasury Department keeps leeway in the U.S. auto aid. The Washington Post relates that the Treasury "will determine the form, terms, and conditions of any investment made pursuant to this program [Automotive Industry Financing Program] on a case-by-case basis." 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. GINN-LA CONDUIT: Files for Chapter 7 Liquidation ------------------------------------------------ Jeff Ostrowski at Palm Beach Post reports that Ginn Resorts has filed Chapter 7 petitions for Ginn-LA CS Borrower LLC and Ginn-LA Conduit Lender Inc., due to the housing downturn. Palm Beach Post relates that Ginn-LA CS and Ginn-LA Conduit owe Credit Suisse $675 million. The report says that Ginn Resorts defaulted on loan payments in June 2008 and had been in talks with its lender since then. The loan covered Tesoro, Quail West, Ginn sur Mer in the Bahamas and Laurelmor in North Carolina, the report states. According to the report, Ginn Resorts said that it found a new owner for Laurelmor and entered into a joint venture with the lender to complete Ginn sur Mer. Gin said in a statement that Tesoro will continue operations under the supervision of the bankruptcy court and a court-appointed trustee until the property is sold. Ginn-LA Conduit Lender Inc. is based in Celebration, Florida. It is a subsidiary of Ginn Resorts. GINN-LA CS: Files for Chapter 7 Liquidation ------------------------------------------- Jeff Ostrowski at Palm Beach Post reports that Ginn Resorts has filed Chapter 7 petitions for Ginn-LA CS Borrower LLC and Ginn-LA Conduit Lender Inc., due to the housing downturn. Palm Beach Post relates that Ginn-LA CS and Ginn-LA Conduit owe Credit Suisse $675 million. The report says that Ginn Resorts defaulted on loan payments in June 2008 and had been in talks with its lender since then. The loan covered Tesoro, Quail West, Ginn sur Mer in the Bahamas and Laurelmor in North Carolina, the report states. According to the report, Ginn Resorts said that it found a new owner for Laurelmor and entered into a joint venture with the lender to complete Ginn sur Mer. Gin said in a statement that Tesoro will continue operations under the supervision of the bankruptcy court and a court-appointed trustee until the property is sold. Ginn-LA CS Borrower, LLC was formed in 2006 by affiliates of Lubert Adler funds and the Ginn Companies to acquire and develop four resort or private club projects in Grand Bahama Island, Naples and Port St. Lucie, Florida and Boone, North Carolina. GMAC LLC: Ezra Merkin May Leave Chairperson Post at Unit -------------------------------------------------------- David Welch at BusinessWeek reports that the U.S. Treasury Department, the new biggest shareholder at GMAC Financial Services, is expected to appoint a new chairperson of the board of directors, replacing J. Ezra Merkin. According to BusinessWeek, GMAC has secured at a $6 billion bailout package from the federal government. In return, the government will be able to decide on restructuring the GMAC board, BusinessWeek relates. The Treasury Department, says the report, is likely to cut in half the number of directors in GMAC, leaving seven directors in the company. GMAC spokesperson Gina Proia confirmed the planned change in the board, the report states. BusinessWeek relates that Mr. Merkin wouldn't remain under the new board structure. Mr. Merkin is facing a lawsuit by New York University for his involvement in the Bernard Madoff fraud, the report says. New York University, according to the report, claimed that Mr. Merkin fed funds from the college to Bernard Madoff's firm and that he concealed Mr. Madoff's fraudulent practices from the university. Mr. Merkin also had decided that he wasn't going to stay after the Treasury Department took a bigger hand in GMAC, BusinessWeek reports, citing a source familiar with the matter. Most of the executives appointed to the board by owners General Motors Corp. and Cerberus Capital Management would be taken out, BusinessWeek states, citing sources familiar with the situation. A source said that Cerberus, which has four executives on the GMAC board, will get one voting director on the new board, according to BusinessWeek. GM will have one nonvoting executive of the GMAC board, from having four voting executives, BusinessWeek reports. GM President and Chief Operating Officer Frederick A. Henderson or GM Treasurer Walter Borst will likely stay in the GMAC board, the report says, citing people familiar with the situation. 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: S&P Downgrades Selected Ratings to 'SD' From 'CC' ----------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered selected ratings on GMAC LLC and its subsidiary Residential Capital LLC, including lowering the long-term counterparty credit rating to 'SD' (selective default) from 'CC' for both entities. The ratings were removed from CreditWatch, where they were placed with negative implications on Nov. 20, 2008. This action follows the company's completion of an exchange offer for certain bonds of both GMAC LLC and Residential Capital LLC that, for the reasons cited below, is characterized pursuant to S&P's criteria as a distressed debt exchange. "The downgrade reflects the fact that the exchange offer paid less than face value to certain bondholders and left untendered bonds in a subordinated position to the new notes," said Standard & Poor's credit analyst John K. Bartko. In S&P's view, the exchange, along with the recent approval of GMAC LLC as a bank holding company, enhances its liquidity and capital positions. GMAC LLC will now have access to various support programs available to bank holding companies. Still, S&P believes the exchange and the application for bank holding company status illustrate the gravity of the company's financial position. S&P expects to reassess its rating on GMAC LLC and Residential Capital LLC in the near term, factoring into S&P's assessment, among other considerations, the new liability structure, cash flow projections, and the company's overall business strategy. HARRAH'S ENTERTAINMENT: Affiliate Issues $214MM of 10% Sr. Notes ---------------------------------------------------------------- Harrah's Operating Company, Inc., disclosed in a regulatory filing with the Securities and Exchange Commission that it: i) issued $214,800,000 aggregate principal amount of 10.0% second-priority senior secured notes due 2015 and $847,621,000 aggregate principal amount of 10.0% second- priority senior secured notes due 2018, which mature on Dec. 15, 2015, and Dec. 15, 2018, pursuant to an indenture, dated as of Dec. 24, 2008, among the company, Harrah's Entertainment, Inc. and U.S. Bank National Association, as trustee; and ii) entered into a collateral agreement, dated as of Dec. 24, 2008, among the company, certain subsidiaries of the company party thereto and U.S. Bank, as collateral agent. The Indenture and the Collateral Agreement provide that the notes are guaranteed by the Harrah's Entertainment and are secured on a second-priority basis by substantially all of the assets of the company and the assets of the Subsidiary Pledgors of the company that have pledged their assets to secure the company's obligations under the senior secured credit facilities. The company will pay interest on the notes at 10.0% per annum, semiannually to holders of record at the close of business on June 1 or December 1 immediately preceding the interest payment date on June 15 and December 15 of each year, commencing on June 15, 2009. The company may redeem the notes, in whole or part, at any time prior to Dec. 15, 2012, with respect to the 2015 notes, and Dec. 15, 2013, with respect to the 2018 notes at a price equal to 100% of the principal amount of the notes redeemed plus accrued and unpaid interest to the redemption date and a "make-whole premium." The company may redeem the notes, in whole or in part, on or after Dec. 15, 2012, with respect to the 2015 notes, and Dec. 15, 2013, with respect to the 2018 notes at the redemption prices set forth in the Indenture. At any time before Dec. 15, 2011, the company may choose to redeem up to 35% of the principal amount of each of the 2015 notes and the 2018 notes at a redemption price equal to 110.000% of the face amount thereof with the net proceeds of one or more equity offerings so long as at least 50% of the aggregate principal amount of the notes at maturity issued of the applicable series remains outstanding afterwards. On Dec. 24, 2008, Harrah's Operating and Harrah's Entertainment entered into a registration rights agreement with Citigroup Global Markets Inc., as lead dealer manager and Banc of America Securities LLC, as joint dealer manager in connection with the notes, pursuant to the dealer manager agreement among the company, the Harrah's Entertainment and the Dealer Managers dated Nov. 14, 2008, relating to the exchange offer for the notes and the related guarantee. Subject to the terms of the Registration Rights Agreement, the company and the Harrah's Entertainment will use their commercially reasonable efforts to register with the SEC notes having substantially identical terms as the notes as part of offers to exchange freely tradable exchange notes for notes within 365 days after the issue date of the notes. The company and the Harrah's Entertainment will use their commercially reasonable efforts to cause each exchange offer to be completed within 30 business days after the effectiveness target date. If Harrah's Operating and Harrah's Entertainment fail to meet these targets, the annual interest rate on the applicable series of notes will increase by 0.25%. The annual interest rate on the notes will increase by an additional 0.25% for each subsequent 90- day period during which the registration default continues, up to a maximum additional interest rate of 1.0% per year over the applicable interest rate, which is 11.00% for both series of notes. If the registration default is corrected, the applicable interest rate of such notes will revert to the original level. A full-text copy of the Registration Rights Agreement is available for free at http://ResearchArchives.com/t/s?371e About Harrah's Entertainment Las Vegas, Nevada-based Harrah's Entertainment, Inc. -- http://www.harrahs.com-- operates nearly 40 casinos across the United States, primarily under the Harrah's(R), Caesars(R) and Horseshoe(R) brand names; Harrah's also owns the London Clubs International family of casinos and the World Series of Poker(R). Private equity firms Apollo Global Management and TPG Capital LP acquired Harrah's in January for $31 billion. At Sept. 30, 2008, the company's consolidated condensed balance sheets showed total assets of $37.0 billion, total liabilities of $33.4 billion and stockholders' equity of $3.6 billion. For three months ended Sept. 30, 2008, the company reported net loss of $129.7 million compared with net income of $244.4 million for the same period in the previous year. For nine months ended Sept. 30, 2008, the company posted net loss of $100.9 million compared with net income of $667.2 million for the same period in the previous year. The company's cash and cash equivalents, including funds borrowed during the quarter under its credit facilities, totaled about $1.0 billion at Sept. 30, 2008, compared with $654.7 million at Sept. 30, 2007. * * * As reported in the Troubled Company Reporter on Jan. 2, 2009, Standard & Poor's Ratings Services said it raised its corporate credit rating on Harrah's Entertainment Inc. and its subsidiary, Harrah's Operating Co. Inc. to 'B-' from 'SD'. At the same time, S&P raised its issue-level rating on the senior unsecured and subordinated debt issues of HET's subsidiaries to 'CCC' from 'D'. The recovery rating on these securities remains at '6', indicating S&P's expectation for negligible (0% to 10%) recovery for lenders in the event of a payment default. The rating outlook is negative. HARRAH'S ENTERTAINMENT: Board Amends Mgt. Equity Incentive Plan --------------------------------------------------------------- Harrah's Entertainment, Inc., disclosed in a regulatory filing with the Securities and Exchange Commission that the human resources committee of the board of directors has adopted an amendment to the Harrah's Management Equity Incentive Plan. The amendment provides for the issuance of options to purchase shares of Harrah's non-voting common stock with an exercise price of not less than fair market value on the grant date. On Dec. 11, 2008, the sole stockholder of the voting common stock of Harrah's approved the Harrah's 2009 Senior Executive Incentive Plan to be effective Jan. 1, 2009. The 2009 Plan replaces Harrah's 2005 Senior Executive Incentive Plan. The awards granted pursuant to the 2009 Plan are intended to qualify as performance- based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended. Eligibility to participate in the 2009 Plan is limited to senior executives of Harrah's and its subsidiaries who are, or at some future date may be, subject to Section 16 of the Securities Exchange Act of 1934, as amended. The Human Resources Committee of Harrah's will select the 2009 Plan participants for each performance period under the 2009 Plan. The 2009 Plan's performance goal will be based upon Harrah's earnings before interest, taxes, depreciation and amortization. The Human Resources Committee will establish the performance goal for the performance period and adopt targeted awards for Participants for such performance period. Subject to the foregoing and to the maximum award limitations, no awards will be paid for any period unless Harrah's achieves positive EBITDA. A full-text copy of the Management Equity Incentive Plan is available for free at http://ResearchArchives.com/t/s?3725 A full-text copy of the 2009 Senior Executive Incentive Plan is available for free at http://ResearchArchives.com/t/s?3726 In a separate filing, the company disclosed that on Dec. 3, 2008, Charles L. Atwood will retire from his positions as vice chairman and director of the company effective Dec. 19, 2008. About Harrah's Entertainment Las Vegas, Nevada-based Harrah's Entertainment, Inc. -- http://www.harrahs.com-- operates nearly 40 casinos across the United States, primarily under the Harrah's(R), Caesars(R) and Horseshoe(R) brand names; Harrah's also owns the London Clubs International family of casinos and the World Series of Poker(R). Private equity firms Apollo Global Management and TPG Capital LP acquired Harrah's in January for $31 billion. At Sept. 30, 2008, the company's consolidated condensed balance sheets showed total assets of $37.0 billion, total liabilities of $33.4 billion and stockholders' equity of $3.6 billion. For three months ended Sept. 30, 2008, the company reported net loss of $129.7 million compared with net income of $244.4 million for the same period in the previous year. For nine months ended Sept. 30, 2008, the company posted net loss of $100.9 million compared with net income of $667.2 million for the same period in the previous year. The company's cash and cash equivalents, including funds borrowed during the quarter under its credit facilities, totaled approximately $1.0 billion at Sept. 30, 2008, compared to $654.7 million at Sept. 30, 2007. * * * As reported in the Troubled Company Reporter on Jan. 2, 2009, Standard & Poor's Ratings Services said it raised its corporate credit rating on Harrah's Entertainment Inc. and its subsidiary, Harrah's Operating Co. Inc. to 'B-' from 'SD'. At the same time, S&P raised its issue-level rating on the senior unsecured and subordinated debt issues of HET's subsidiaries to 'CCC' from 'D'. The recovery rating on these securities remains at '6', indicating S&P's expectation for negligible (0% to 10%) recovery for lenders in the event of a payment default. The rating outlook is negative. HARRAH'S ENTERTAINMENT: Completes $2.1BB Notes Exchange Offering ---------------------------------------------------------------- Harrah's Entertainment, Inc., disclosed the final results of the private exchange offers of its subsidiary, Harrah's Operating Company, Inc. to exchange certain of HOC's outstanding debt securities for up to $2.1 billion aggregate principal amount of: i) new 10.00% Second-Priority Senior Secured Notes due 2015 of HOC, for Old Notes maturing between 2010 and 2013; and ii) new 10.00% Second-Priority Senior Secured Notes due 2018, for Old Notes maturing between 2015 and 2018. The Exchange Offers, which are subject to the terms and conditions described in the confidential offering memorandum dated Nov. 14, 2008, expired at midnight, New York City time, on Dec. 19, 2008. As of the Expiration Date, approximately $6 billion aggregate principal amount of Old Notes have been validly tendered. In addition, as of the Expiration Date, approximately $450 million aggregate principal amount of Old Notes maturing between 2010 and 2011 and participating in the Exchange Offers elected to receive $670 in cash in lieu of each $1,000 principal amount of New 2015 Second Lien Notes that they otherwise would receive in the Exchange Offers. Based on the principal amount of Old Notes validly tendered, approximately $200 million aggregate principal amount of New 2015 Second Lien Notes will be issued in exchange for Old Notes maturing between 2010 and 2013, approximately $850 million aggregate principal amount of New 2018 Second Lien Notes will be issued in exchange for Old Notes maturing between 2015 and 2018 and approximately $290 million in cash will be paid to holders of Old 2010-2011 Notes. The table shows the principal amount of each series of Old Notes tendered for exchange only (with no election to receive cash in lieu of New Notes), the principal amount of each series of Old 2010-2011 Notes tendered with an election to receive $670 in cash in lieu of each $1,000 principal amount of New 2015 Second Lien Notes and the total principal amount of each series of Old Notes tendered in the Exchange Offers and the principal amount of each series of Old Notes accepted in the Exchange Offers. A. Old Notes: 5.50% Senior Notes due 2010 Principal Amount Tendered for Exchange Only: 62,732,000 Principal Amount Tendered for Cash in lieu of New Notes: 308,539,000 Total Principal Amount Tendered: 371,271,000 Principal Amount Accepted: 371,271,000 B. Old Notes: 7.875% Senior Subordinated Notes due 2010 Principal Amount Tendered for Exchange Only: 7,356,000 Principal Amount Tendered for Cash in lieu of New Notes: 56,458,000 Total Principal Amount Tendered: 63,814,000 Principal Amount Accepted: 63,814,000 C. Old Notes: 8.0% Senior Notes due 2011 Principal Amount Tendered for Exchange Only: 10,172,000 Principal Amount Tendered for Cash in lieu of New Notes: 9,480,000 Total Principal Amount Tendered: 19,652,000 Principal Amount Accepted: 19,652,000 D. Old Notes: 8.125% Senior Subordinated Notes due 2011 Principal Amount Tendered for Exchange Only: 16,447,000 Principal Amount Tendered for Cash in lieu of New Notes: 74,613,000 Total Principal Amount Tendered: 91,060,000 Principal Amount Accepted: 91,060,000 E. Old Notes: 5.375% Senior Notes due 2013 Principal Amount Tendered for Exchange Only: 221,388,000 Principal Amount Tendered for Cash in lieu of New Notes: - Total Principal Amount Tendered: 221,388,000 Principal Amount Accepted: 221,388,000 F. Old Notes: 5.625% Senior Notes due 2015 Principal Amount Tendered for Exchange Only: 405,167,000 Principal Amount Tendered for Cash in lieu of New Notes: - Total Principal Amount Tendered: 405,167,000 Principal Amount Accepted: 136,026,000 G. Old Notes: 6.5% Senior Notes due 2016 Principal Amount Tendered for Exchange Only: 294,369,000 Principal Amount Tendered for Cash in lieu of New Notes: - Total Principal Amount Tendered: 294,369,000 Principal Amount Accepted: 98,780,000 G. Old Notes: 5.75% Senior Notes due 2017 Principal Amount Tendered for Exchange Only: 417,550,000 Principal Amount Tendered for Cash in lieu of New Notes: - Total Principal Amount Tendered: 417,550,000 Principal Amount Accepted: 140,194,000 H. Old Notes: 10.75%/11.5% Senior Toggle Notes due 2018 Principal Amount Tendered for Exchange Only: 1,160,732,000 Principal Amount Tendered for Cash in lieu of New Notes: - Total Principal Amount Tendered: 1,160,732,000 Principal Amount Accepted: 350,000,000 I. Old Notes: 10.75% Senior Notes due 2016 Principal Amount Tendered for Exchange Only: 2,965,925,000 Principal Amount Tendered for Cash in lieu of New Notes: - Total Principal Amount Tendered: 2,965,925,000 Principal Amount Accepted: 732,264,000 All Old Notes not accepted for exchange in the Exchange Offers will be returned to the tendering holder or, if tendered through the facilities of the Depositary Trust Company, credited to the relevant account at DTC, in accordance with their procedures. HOC anticipates that the settlement date for the Exchange Offers will be Dec. 24, 2008. After the settlement date, Harrah's or HOC may from time to time seek to retire or purchase HOC's outstanding debt through cash purchases and/or exchanges, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, HOC's liquidity requirements, contractual restrictions and other factors. The amounts involved may be material. The New Second Lien Notes will not be registered at issuance under the Securities Act of 1933, as amended, or any other applicable securities laws and, unless so registered, the New Second Lien Notes may not be offered, sold, pledged or otherwise transferred within the United States or to or for the account of any U.S. person, except pursuant to an exemption from the registration requirements thereof. Accordingly, the New Second Lien Notes were offered and will be issued only to qualified institutional buyers and to certain non-U.S. investors located outside the United States in a private transaction in reliance upon an exemption from the registration requirements of the Securities Act. The Exchange Offers are made only by, and pursuant to, the terms set forth in the Offering Memorandum, and the information in this press release is qualified by reference to the Offering Memorandum and the accompanying letter of transmittal. HOC will enter into a registration rights agreement pursuant to which, under certain circumstances, it will agree to file an exchange offer registration statement or a shelf registration statement with respect to the New Second Lien Notes. About Harrah's Entertainment Las Vegas, Nevada-based Harrah's Entertainment, Inc. -- http://www.harrahs.com-- operates nearly 40 casinos across the United States, primarily under the Harrah's(R), Caesars(R) and Horseshoe(R) brand names; Harrah's also owns the London Clubs International family of casinos and the World Series of Poker(R). Private equity firms Apollo Global Management and TPG Capital LP acquired Harrah's in January for $31 billion. At Sept. 30, 2008, the company's consolidated condensed balance sheets showed total assets of $37.0 billion, total liabilities of $33.4 billion and stockholders' equity of $3.6 billion. For three months ended Sept. 30, 2008, the company reported net loss of $129.7 million compared with net income of $244.4 million for the same period in the previous year. For nine months ended Sept. 30, 2008, the company posted net loss of $100.9 million compared with net income of $667.2 million for the same period in the previous year. The company's cash and cash equivalents, including funds borrowed during the quarter under its credit facilities, totaled approximately $1.0 billion at Sept. 30, 2008, compared to $654.7 million at Sept. 30, 2007. * * * As reported in the Troubled Company Reporter on Jan. 2, 2009, Standard & Poor's Ratings Services said it raised its corporate credit rating on Harrah's Entertainment Inc. and its subsidiary, Harrah's Operating Co. Inc. to 'B-' from 'SD'. At the same time, S&P raised its issue-level rating on the senior unsecured and subordinated debt issues of HET's subsidiaries to 'CCC' from 'D'. The recovery rating on these securities remains at '6', indicating S&P's expectation for negligible (0% to 10%) recovery for lenders in the event of a payment default. The rating outlook is negative. ICEWEB INC: Auditor Raises Going Concern Doubt ---------------------------------------------- Sherb & Co., LLP, in Boca Raton, Florida, in a letter dated December 26, 2008, to the Board of Directors of IceWEB, Inc., expressed substantial doubt about the company's ability to continue as a going concern. The firm audited the consolidated balance sheet of IceWEB Inc. and subsidiaries as of September 30, 2008, and the related consolidated statements of operations, changes in stockholders' deficit and cash flows for the years ended September 30, 2008 and 2007. "The company had net losses of $6,245,793 and $2,850,123 respectively, for the years ended September 30, 2008 and 2007. These matters raise substantial doubt about the company's ability to continue as a going concern." The company has an accumulated deficit of $20,131,957 at September 30, 2008. Mark B. Lucky, chief financial officer and principal financial and accounting officer, disclosed in a regulatory filing that the company is not in compliance with debt covenants under its Financing Agreements with Sand Hills Finance LLC. "Management has established plans intended to increase the sales of the company's products and services. Management intends to seek new capital from new equity securities offerings to provide funds needed to increase liquidity, fund growth, and implement its business plan. However, no assurances can be given that the company will be able to raise any additional funds." In a press release, IceWEB said that for fiscal 2008, it reported sales of $16,294,423 as compared to net revenues of $18,732,069 for fiscal 2007, a decrease of $2,437,646 or approximately 13%. Of its total net revenues for fiscal 2008, approximately $14,886,699 is attributable to third party product sales by its IceWEB Solutions Group, approximately $982,049 is attributable to its sale of storage products, and approximately $425,676 is attributable to revenues from its online products and services. Gross profit increased to $2,226,794 in fiscal 2008, from $1,920,795 in fiscal 2007, an increase of 15.9%. Gross margin percent improved from 10.25% to 13.67%. The improvement in margins is attributable to the sale of higher margin storage products and improving margins in the hardware and software solutions business. The fiscal 2008 net loss included the impact of the acquisition of Inline Corporation, which contributed $1,244,105 to the loss. In addition, non-cash expenses included depreciation and amortization of $575,498, share-based compensation of $1,573,363, and amortization of deferred compensation expense of $910,930. John R. Signorello, chairman and chief executive officer of IceWEB, Inc., stated, "In 2008, we invested in our future -- while simultaneously lowering overhead expenses -- by acquiring INLINE Corporation, a data storage company. Over the course of the year, we continued to make strategic product and marketing investments to enhance our efforts into the fast-growing GIS markets. Our IT Solutions business compliments our storage efforts and is targeted for both the defense and civilian agency sides of the Federal Government market places. We anticipate 2009 to be a year in which our 2008 investments will yield significantly improved gross margins and fuel our growth in GIS and other fast growth storage markets." As of September 30, 2008, the company's balance sheet showed total assets of $5,939,328 and total liabilities of $10,105,121, resulting in total stockholders' deficit of $4,165,793. A full-text copy of the company's annual report is available for free at: http://researcharchives.com/t/s?3729 About IceWEB, Inc. Through its own suite of proprietary offerings and in partnership with numerous global technology leaders, IceWEB, Inc. delivers high-performance storage solutions, advanced hardware, software, and online services to U.S. government agencies, enterprise companies, small to medium sized businesses (SMB) and tech-savvy consumers. INDYMAC BANK: Must Repurchase $1BB Home Mortgages, Says Fannie -------------------------------------------------------------- Fannie Mae believes that IndyMac Bank has obligations to repurchase about $1 billion of home mortgages that failed to meet Fannie Mae's standards, Damian Paletta and James R. Hagerty at The Wall Street Journal report, citing people familiar with the matter. According to WSJ, banks that sell loans to Fannie Mae or Freddie Mac must make "representations and warranties" that those loans meet certain quality standards, or the lenders can be forced to buy the loans back. The report says that IndyMac Bank started selling the bulk of its loans to Fannie Mae and Freddie Mac in the second half of 2007. Citing a Fannie Mae spokesperson, WSJ relates that the company is working with the Federal Deposit Insurance Corp. -- which is selling IndyMac Bank -- to resolve the issue. "We are awaiting information from the FDIC," the report quoted the spokesperson as saying. 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. JACKPINE FOREST: Files for Bankruptcy; Lays off Over 100 Workers ---------------------------------------------------------------- Erin Hitchcock at Williams Lake Tribune reports that Jackpine Forest Group in Williams Lake has filed for bankruptcy protection. According to Williams Lake Tribune, former Jackpine Group President and CEO Gian Singh Sandhu said that more than 100 people have been laid off, including himself. The report quoted him as saying, "Basically everybody is laid off, other than the security people. The market conditions are the way they are. We didn't see an opportunity to have an improvement." Williams Lake Tribune relates that PricewaterhouseCoopers Inc. was appointed as trustee of the estate, subject to the affirmation by the creditors. A meeting for creditors has been set for Jan. 19, 2009, in Vancouver, Williams Lake Tribune states. The report says that Jackpine Forest listed 107 creditors, who hold more than $22 million in secured and unsecured investments. Jackpine Forest Products Ltd. -- http://www.jackpinegroup.com-- was established in 1987 by a trio of venturesome entrepreneurs looking to secure a promising future. The Sandhu family with the assistance of two venture capital corporations acquired the assets of a small sawmill in Williams Lake, B.C., Canada. With the advent of the Small Business Forest Enterprise Program, the company ventured into the value added sector of the forest industry. A new remanufacturing and value added plant was built in 1989 to produce a host of value added products for the North American and the Pacific Rim markets. JOHNSON BROADCASTING: Files Schedules of Assets and Liabilities --------------------------------------------------------------- Johnson Broadcasting Inc. filed with the U.S. Bankruptcy Court for the Southern District of Texas its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property B. Personal Property $7,759,501 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $3,907,816 E. Creditors Holding Unsecured Priority Claims $98,025 F. Creditors Holding Unsecured Non-priority Claims $10,227,147 ----------- ----------- TOTAL $7,759,501 $14,232,988 Based in Houston, Texas, Johnson Broadcasting Inc. and Johnson Broadcasting of Dallas Inc. own and operate television stations in Texas. Johnson Broadcasting Inc. and Johnson Broadcasting of Dallas Inc. filed separate petitions for Chapter 11 relief on Oct. 13, 2008 (Bankr. S.D. Texas Lead Case No. 08-36583). John James Sparacino, Esq., and Timothy Alvin Davidson, II, Esq., at Andrews and Kurth, represents the Debtors as counsel. LAND INVESTORS: Moody's Downgrades Corporate Family Rating to 'Ca' ------------------------------------------------------------------ Moody's Investors Service lowered the ratings of November 2005 Land Investors, LLC, including its corporate family rating to Ca from Caa1, its first lien debt to Caa3 from B3, and its second lien debt to C from Caa3. The ratings outlook is negative. The downgrades and negative outlook reflect the difficult liquidity situation facing the consortium of four homebuilders comprising NLV (Olympia, Standard Pacific, American West, and Astoria Homes). While three of the four builders were able to afford the mandatory lot takedowns scheduled for December 2008, the fourth builder was not. As a result, the lending group granted a temporary waiver on December 17, 2008 that lasts until February 27, 2009. This deferred takedown in February plus two additional scheduled takedowns in March and June of 2009, totaling approximately $20 million of payments for each of the four builders, exacerbate the extreme lot oversupply situation existing in Las Vegas currently as well as add an unneeded financial burden to each of the four builders. In addition, the takedown price, established at the time the consortium was formed, reflects a more robust housing environment with substantially higher appraised land values than exist today. Thus, even if all of the 2009 lot takedowns were made on a timely basis, which appears increasingly unlikely, the outlook for further lot sales and principal amortization, after the mandatory schedules have been met, is grim. These ratings were changed: -- Corporate family rating lowered to Ca from Caa1 -- Probability of default rating lowered to Ca from Caa1 -- First lien debt rating lowered to Caa3 (LGD3,31%) from B3 (LGD3, 34%) -- Second lien debt rating lowered to C (LGD5,85%) from Caa3 (LGD5, 87%) The last rating action was on December 26, 2007, when NLV's corporate family rating was lowered to Caa1 from B2, with comparable reductions in the ratings of the various issues of debt. NLV's previous ratings were assigned by evaluating factors that Moody's believed were relevant to the company's risk profile, such as the company's (i) sponsorship/ownership, (ii) level of presales vs. spec sales, (iii) inflection point in its development cycle, and (iv) capital withdrawals. These attributes were compared against other issuers within NLV's core industry, and the company's ratings were believed to be comparable to those of other issuers with similar credit risk. November 2005 Land Investors, LLC is a single-purpose entity that was formed to bid on 2,675 acres of land in the City of North Las Vegas, Nevada at a U.S. Bureau of Land Management auction that was held in November 2005. As the successful bidder at a price of $639 million, NLV has been constructing major community infrastructure, preparing to bring a portion of the property to "super pad" status for its four individual members: affiliates of the Olympia group of companies (which is acting as the project manager), Standard Pacific Corp. (rated B2 negative), Astoria Homes, and American West Homes, as well as to D.R. Horton, Inc. Although not a party to the joint venture structure formed by NLV or to the bank credit agreement used to finance the structure, D.R. Horton purchased approximately 20% of the acreage for $127.8 million and has paid a portion of its 20% pro rata share of total development expenses. D.R. Horton has sold its land to a third party. LEHMAN BROTHERS: Seeks July 13 Extension to File Ch. 11 Plan ------------------------------------------------------------ Lehman Brothers Holdings, Inc., asks the U.S. Bankruptcy Court for the Southern District of New York to give it additional time to file its chapter 11 plan and solicit votes for that plan. Lehman Brothers wants the deadline for filing its chapter 11 plan extended to July 13, 2009 from Jan. 13, 2009, and the deadline for soliciting votes from creditors stretched out to Sept. 16, 2009 from March 16, 2009. "Reviewing the assets and liabilities that comprise Lehman's consolidated balance sheet of over $600 billion respectively requires significant time and effort," Lori Fife, Esq., at Weil Gotshal & Manges, in New York, said in court papers. "Those efforts are complicated by the globally integrated structure under which Lehman operated and closed down," Ms. Fife said. She pointed out that the insolvencies of the bankrupt company's foreign units and the departure of about 10,000 employees left the company and its professionals "with the colossal hurdle of establishing a competent workforce to discharge their responsibilities." Ms. Fife also said that Lehman must also review about 1.5 million derivative contracts, dissect billions of dollars of intercompany transactions and coordinate with the administrators of foreign insolvency proceedings involving its units, before a chapter 11 plan can be proposed. According to The Wall Street Journal, financial advisory firm Alvarez & Marsal had determined after a three-month internal study that billions were potentially lost as a result of Lehman Brothers Holdings Inc.'s rush into bankruptcy. According to the report, Lehman may have eroded as much as $75 billion of its value. Bankruptcy Law360 reported the U.S. Pension Benefit Guaranty Corp. is fighting back against attempts by Lehman's unsecured creditors committee to intervene in the dispute over whether the PBGC can end the Debtor's pension plan. The PBGC has filed a motion to strike a joinder recently brought by the official committee of unsecured creditors, who were supporting Lehman's opposition to the PBGC's request. In a separate report, Bankruptcy Law360 said General Electric Corporate Financial Services Inc. sought relief from an automatic stay to terminate trades potentially worth hundreds of millions of dollars. According to the report, GE's request relates to a $775 million secured credit facility GE provided. A hearing to consider approval of the proposed extension is scheduled for Jan. 14, 2009. Creditors and other concerned parties have until Jan. 9, 2009 to file their objections. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers led in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offered a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman filed for chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No.: 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16 (Case No. 08-13600). Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the United States District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act in the case captioned Securities Investor Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV- 8119 (GEL). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI Barclays Bank Plc has agreed, subject to U.S. Court and relevant regulatory approvals, to acquire Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only $2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units of Lehman Brothers Holdings, Inc., which has filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion ($33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. (Lehman Brothers Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). LEHMAN BROTHERS: Sec. 341(a) Meeting Scheduled for Jan. 29 ---------------------------------------------------------- A meeting of creditors of Lehman Brothers Holdings, Inc., and its units will be held on Jan. 29, 2009 at 10:00 a.m. (prevailing Eastern Time), at the Hilton New York Mercury Ballroom, 1335 Avenue of the Americas, in New York. The meeting, which is required under Section 341(a) of the Bankruptcy Code, offers creditors a one-time opportunity to examine a bankrupt company's representative under oath about its financial affairs and operations that would be of interest to the general body of creditors. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers led in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offered a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman filed for chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No.: 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16 (Case No. 08-13600). Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the United States District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act in the case captioned Securities Investor Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV- 8119 (GEL). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI Barclays Bank Plc has agreed, subject to U.S. Court and relevant regulatory approvals, to acquire Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only $2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units of Lehman Brothers Holdings, Inc., which has filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion ($33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. (Lehman Brothers Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). LEHMAN BROTHERS: Court Formally Approves Neuberger Sale ------------------------------------------------------- Judge James M. Peck has formally approved the purchase of the business by executives of Lehman Brothers Holdings, Inc.'s investment management unit. The management group submitted a bid that is $176 million more than the bid submitted by Bain Capital LLC and Hellman & Friedman LLC, Bloomberg News reported. According to Bloomberg, citing Lori Fife, Esq., Lehman's counsel, the deal provides $922 million in proceeds to Lehman's estate before a break-up fee of $52.5 million. According to Judge Peck's order, any objections to the sale that have not been withdrawn, waived or settled, or not otherwise resolved are deemed denied and overruled. As reported by the Troubled Company Reporter on December 9, 2008, LBHI and NBSH Acquisition, LLC, an entity formed by executives at Lehman Brothers Holdings' Neuberger Berman unit, won the bidding for Lehman's investment management unit, beating other competing bids including the joint bid by Bain Capital Partners and Hellman & Friedman. The Debtors and LBHI and NBSH Acquisition, LLC have signed an asset purchase agreement. A copy of the NBSH Asset Purchase Agreement is available for free at http://bankrupt.com/misc/Lehman_NB_APA.pdf The NBSH APA provides that the agreement may be terminated if, the Bankruptcy Court does not approve the sale by January 31, 2009, or if closing is not consummated by June 30, 2009. The investment management unit, which has assets of about $160 billion as of Nov. 30, includes the Neuberger Berman money- management business, former Lehman's private funds investments group and asset-management unit. LBHI said in a filing with the Securities and Exchange Commission that in light of the terms of its prior asset purchase agreement with IMD Parent, LLC, the entity formed by Bain and Hellman, it has paid a termination fee to IMD. As a result of its decision to select another bidder, it has paid IMD, pursuant to the IMD APA, a $52.5 million termination fee plus reimbursement of its reasonable and documented fees and expenses incurred in connection with the proposed acquisition. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers led in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offered a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman filed for chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No.: 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16 (Case No. 08-13600). Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the United States District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act in the case captioned Securities Investor Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV- 8119 (GEL). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI Barclays Bank Plc has agreed, subject to U.S. Court and relevant regulatory approvals, to acquire Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only $2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units of Lehman Brothers Holdings, Inc., which has filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion ($33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. (Lehman Brothers Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). LEHMAN BROTHERS: Sues Whitworth to Foreclose on Property -------------------------------------------------------- Lehman Brothers Holdings, Inc., filed a foreclosure lawsuit against a developer holding 156 acres in Palm Beach County, according to a report by the South Florida Business Journal. Lehman Brothers granted Whitworth Estates OUD Acquisition a $45 million mortgage on the property after the Miami-based developer bought the property for $44.4 million from Ascot Development. The site, along West Atlantic Avenue west of Delray Beach, had been approved for the construction of 380 homes which has not started. The foreclosure lawsuit was filed on Dec. 8, 2008 in Palm Beach County Circuit Court. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers led in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offered a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman filed for chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No.: 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16 (Case No. 08-13600). Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the United States District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act in the case captioned Securities Investor Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV- 8119 (GEL). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI Barclays Bank Plc has agreed, subject to U.S. Court and relevant regulatory approvals, to acquire Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only $2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units of Lehman Brothers Holdings, Inc., which has filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion ($33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. (Lehman Brothers Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). LEHMAN BROTHERS: Court OKs Settlement of Barclays' $7-Bil. Claim ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved a settlement among JPMorgan Chase Bank, Barclays Capital and James Giddens, the court-appointed trustee for Lehman Brothers Inc. Prior to the decision, the Official Committee of Unsecured Creditors and Royal Bank America filed their objections to the proposed deal. The Creditors Committee said that the settlement seeks the Court's imprimatur of the trustee and the banks' "depiction of the facts and circumstances surrounding the sale transaction without any documentary support." Meanwhile, Royal Bank complained that the trustee did not show why transferring billions of dollars of cash and securities to Barclays Capital is "reasonable, appropriate and in the best interest of LBI's estate." The Court, in a separate order, also authorized the trustee and the banks to file under seal a list of LBI's securities that will be transferred to the U.K. bank. The list contains the securities of LBI held in an account at JPMorgan that will be transferred to Barclays Capital as part of their settlement agreement. The list reportedly constitutes confidential commercial information that would be disadvantageous to Barclays Capital if disclosed in public. James W. Giddens, as trustee for the SIPA liquidation of the business of Lehman Brothers Inc., had said that the Settlement eliminates the risk of a claim in the amount of not less than $7 billion by Barclays. He warned that if the claim were brought, it can be anticipated that a right to pre-judgment interest would also be claimed. Even at a relatively modest 6% rate (the CPLR currently specifies 9%), approximately $35 million per month of interest might be claimed to accrue while the issue remains unresolved. The settlement would avoid these risks in return for settlement consideration in an amount substantially less than the potential exposure. Parties' Negotiations During the week of September 15, 2008, following the chapter 11 filing of Lehman Brothers Holdings, Inc., its brokerage unit, LBI, continued to operate. As described by the New York Fed, this was a "carefully thought out decision" designed to "facilitate an orderly wind-down" of LBI, and was supported by New York Fed financing of LBI's payroll and operations. This financing was on a fully secured basis, supported by LBI collateral. By Sept. 17, the New York Fed had funded to LBI $46.22 billion in cash and Treasury securities against $50.62 billion in collateral. On September 17, 2008, Barclays agreed to replace the New York Fed in funding LBI -- that is, to "step into the shoes of the Fed." The parties understood this to mean that Barclays would provide funding through a reverse repurchase transaction using essentially the same securities that had been pledged by LBI to the New York Fed (the "Fed Portfolio"). The form of transaction selected by Barclays to effectuate the substitute funding for LBI was a reverse repurchase transaction between Barclays and LBI, entered into on Sept. 18, 2008. Pursuant to the Replacement Transaction, LBI was to provide Barclays with $49.7 billion in securities in exchange for $45 billion in cash. This ratio was consistent with the ratio of cash to securities used in the earlier repurchase agreement between LBI and the New York Fed. On Sept. 18, 2008, Barclays initiated the process of transferring $45 billion to fund LBI overnight. A series of funds transfers were made using the Fedwire Funds Service, which is operated by the New York Fed. By early evening of that date, the entire sum of $45 billion had been transferred by Barclays to LBI. Notwithstanding that both Depository Trust and Clearing Corporation and the Fedwire Securities Service remained open for hours past their normal closing times on Sept. 18 in an effort to complete the delivery of the Fed Portfolio to Barclays, operational issues interfered with the ability to transfer all of the securities. When DTCC closed at 11 p.m. on September 18th, Barclays had received $42.7 billion of the approximately $49.7 billion in securities it was expecting under the terms of the Replacement Transaction. LBI therefore agreed, either late on the night of Sept. 18th or early in the morning of Sept. 19, 2008, to transfer $7 billion in cash to Barclays at an account at JPMorgan. The expectation at that time was that, the next day, LBI would transfer the remaining securities originally due under the Replacement Transaction, and Barclays would transfer the Subject Funds to LBI. The transfer of the remaining securities was discussed on Friday Sept. 19 and into the weekend, but did not occur. On Sept. 19, SIPC commenced this proceeding and the Court approved the Purchase Agreement. The parties then entered into the Clarification Letter to the Purchase Agreement, dated Sept. 20, 2008. The closing pursuant to the Purchase Agreement occurred early on Monday, Sept., 22, 2008. In the meantime, JPMorgan caused the Subject Funds to be transferred to an LBI account at JPMorgan. The Clarification Letter provided that the Replacement Transaction was terminated, and that the securities that had actually been delivered were "deemed to constitute part of the Purchased Assets" under the Purchase Agreement. Accordingly, LBI would have no further obligation to "repurchase" those securities under the repo and Barclays would not be obligated to deliver such securities back to LBI. Barclays asserts that, at the time the Clarification Letter was finalized, Barclays believed that the $7 billion in cash was in its account at JPMorgan, and did not learn until Sept. 23 that the Subject Funds were not in Barclays' account at JPMorgan. As set forth in the accompanying affidavits, it is asserted that these events left Barclays without the full consideration it had contracted for under the Replacement Transaction and the Purchase Agreement. Barclays had neither the $7 billion nor its equivalent value in securities that were originally to have been delivered pursuant to the Replacement Transaction. Settlement Terms The LBI Estate faces claims related to its retention of both the remainder of the Fed Portfolio and the Subject Funds. After negotiations, the parties reached a settlement. The proposed settlement would convey to Barclays cash and securities having a lesser value, due to "market events" since September 17. The cash portion of the settlement consideration (leaving out distributions received since Sept. 19) is the sum of $1.25 billion and $7.1 million, which is $5.743 billion less than the amount that might be claimed. The securities portion of the settlement consideration, although difficult to value with precision, is today worth "substantially less" than $5.743 billion. The difference creates a settlement discount for the LBI Estate. The principal terms of the proposed Settlement Agreement are: (a) Barclays will receive (i) (x) the undelivered Fed Portfolio securities that have not been liquidated by JPMorgan, together with (y) all principal and interest payments and any other distributions on the Settlement Consideration Fed Portfolio Securities (including, without limitation, the proceeds at maturity of any securities) attributable to the period on and after September 18, 2008, and (ii) $7,103,500 (representing the proceeds of certain Fed Portfolio Securities that initially were understood to be among the Settlement Consideration Fed Portfolio Securities but in fact have been liquidated by JPMorgan), plus, in the case of each of (i)(y) and (ii), interest accrued thereon from the time of receipt to the time of payment at the effective fed funds rate from time to time during such period. (b) To partially account for the undelivered Fed Portfolio Securities that will not be delivered to Barclays as part of the Settlement Securities (because they have been liquidated by JP Morgan) and the decline in value of the Settlement Securities since September 19, 2008, Barclays is to receive $1.25 billion in cash. (c) Barclays will receive $14,942,678 (representing principal and interest payments, and any other distributions, on the Delivered Securities attributable to the period on and after September 18, 2008 which were received in LBI and/or JPMorgan accounts and not heretofore paid to Barclays), plus interest accrued thereon from the time of receipt to the time of payment at the effective fed funds rate from time to time during such period. (d) The Settlement Securities and Settlement Payment will be remitted to Barclays from LBI accounts at JPMorgan. To facilitate the settlement, JPMorgan has agreed to release all liens on the Settlement Securities and Settlement Payment. (e) The $7 billion of cash in LBI's account is acknowledged to have been applied against LBI's clearance advance obligations to JPMorgan, and the Settlement Securities, Settlement Payment is not applied to such obligations. (f) The parties will execute mutual limited releases A full-text copy of the parties' settlement agreement, dated December 5, 2008, is available at: http://bankrupt.com/misc/Lehman_JPM_7B_Deal.pdf About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers led in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offered a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman filed for chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No.: 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16 (Case No. 08-13600). Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the United States District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act in the case captioned Securities Investor Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV- 8119 (GEL). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI Barclays Bank Plc has agreed, subject to U.S. Court and relevant regulatory approvals, to acquire Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only $2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units of Lehman Brothers Holdings, Inc., which has filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion ($33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. (Lehman Brothers Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). LEHMAN BROTHERS: Court Approve Settlement with French Units ----------------------------------------------------------- Lehman Brothers Holdings, Inc., obtained approval from the U.S. Bankruptcy Court for the Southern District of New York of a settlement agreement with three French affiliates that operate Lehman's investment business in France. The three affiliates are: (i) Banque Lehman Brothers S.A., (ii) Lehman Brothers Conseil S.A., and (iii) Lehman Brothers Services S.N.C. LBHI also obtained authority to vote, in its capacity as a shareholder of BLB, for the sale of BLB's business to Banque Nomura France and the voluntary dissolution of BLB, both of which are predicated, inter alia, upon the implementation of the Settlement Agreement. The Settlement Agreement would cut the claims of Banque Lehman against the bankrupt company from EUR178 million to EUR93.2 million. Banque Lehman's claim stems from the cash management system of Lehman Brothers Holdings, which reportedly left the unit without funds after its parent company filed for bankruptcy on Sept. 15. Meanwhile, Lehman Brothers asserts more than EUR76 million against Banque Lehman and another EUR8 million against LBS as of Sept. 12. Its claims related to its employee incentive plan and pre-bankruptcy intercompany loans. The settlement was reached after extensive talks between Alvarez & Marsal Inc., and Alain Bachelot, the administrator appointed by the French Banking Commission to run the units. Sale of Banque Lehman The approval of the Settlement Agreement is also a precondition for the sale of Banque Lehman to Banque Nomura France, the only bidder for the unit. Banque Nomura is a unit of Japan's largest brokerage, Nomura Holdings Inc., the same firm that bought Lehman Brothers Holdings' Asian, European and Middle Eastern businesses for US$2 billion. Attorney for Lehman Brothers Holdings, Richard Krasnow of Weil Gotshal & Manges, in New York, said the sale would significantly reduce Banque Lehman's debts since it requires Banque Nomura to assume its liabilities in return for the employees, business information technology, commercial records and other assets it would gain from Banque Lehman. The reduction in Banque Lehman's debt would also benefit Lehman Brothers Holdings, given the latter's potential exposure under a support letter dated June 15, 1994, wherein it committed to Banque de France and the Commission Bancaire to provide its French unit with financial support. "The combination of the [sale] and the settlement agreement will facilitate Banque Lehman's ability to wind down its affairs through a solvent liquidation which entails a cooperative and orderly process for negotiating with creditors and minimizing liabilities, rather than through an insolvent liquidation, which is likely to result if the settlement agreement is not approved," Mr. Krasnow said. The key terms of the Settlement Agreement are: (1) Lehman Brothers Holdings waives its claims in their entirety. (2) Banque Lehman waives its claim other than its remaining claim of EUR93,212,114, which is the net amount resulting from a netting of Lehman Brothers Holdings' claims against Banque Lehman's claims. Lehman Brothers Holdings retains the right to object to the remaining claim while Banque Lehman retains the burden of proving that the EUR93,212,114 is an allowed claim. (3) Alain Bachelot, acting administrator for Banque Lehman and its subsidiaries, will use his best efforts to settle all of Banque Lehman's liabilities with assets other than its remaining claim. Banque Lehman's recovery from Lehman Brothers Holdings ' estate on account of its remaining claim is limited to the lesser of the actual recovery Banque Lehman would receive, and the amount by which Banque Lehman's liabilities exceed its other assets. (4) Once the amount, if any, by which Banque Lehman's Liabilities exceed its other assets is determined, Mr. Bachelot will send a notice to Lehman Brothers Holdings stating the amount and providing supporting documents. Thereafter, the administrator has a right to sell all or a portion of the remaining claim for consideration of up to the amount by which Banque Lehman's liabilities exceed its other assets. (5) Banque Lehman waives any claims it has against Lehman Brothers Holdings on account of the bankrupt company's commitment to provide financial support. In the context of its liquidation and the withdrawal of its banking license, Banque Lehman also agrees to obtain from Banque de France or the Commission Bancaire the formal termination of the support letter with no residual claim, right or recourse whatsoever against Lehman Brothers Holdings as of the effective date of The withdrawal of its banking license. (6) Until the support letter becomes void and may no longer be exercised by Banque de France or the Commission Bancaire, Banque Lehman will neither sell the remaining claim nor receive any recoveries from Lehman Brothers Holdings on account of that claim. If Banque de France or the Commission Bancaire exercises any rights under the support letter, Banque Lehman will waive any rights it may have on account of the remaining claim. (7) Conditions precedent include: * approval by the Court prior to Dec. 23 of the Settlement Agreement and Lehman Brothers' vote in Banque Lehman's shareholder meetings in favor of the sale of the French unit's business and its liquidation; * approval by Banque Lehman's corporate bodies prior to Jan. 20, 2009, of the sale; and * approval by the Commercial Court of Paris in conciliation proceedings pursuant to Article L. 611-8-11 of the French Commercial Code, prior to Jan. 20, 2009, of the Settlement Agreement. The Settlement Agreement also provides that the rights and obligations of the signatories will be null and void if these conditions are not met or waived: (1) Lehman Brothers Holdings and the chairman in office of Banque Lehman do not vote in favor of the liquidation at the general meeting of shareholders of BLB on or prior to June 30, 2009; (2) the shareholders of LBS and LBC do not vote in favor of the voluntary dissolution of the two companies on or prior to June 30, 2009; (3) the withdrawal of the banking license of Banque Lehman by The French Comite des Etablissements de credit et des Enterprises d' Investissement does not take effect on or prior to June 30, 2009, or if Banque de France or the Commission Bancaire exercises its right under the support letter prior to the date on which the withdrawal has become effective; and (4) the formal approval of the settlement agreement by the Commercial Court of Paris has not become a final order within 10 days of its receipt. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers led in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offered a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman filed for chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No.: 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16 (Case No. 08-13600). Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the United States District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act in the case captioned Securities Investor Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV- 8119 (GEL). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI Barclays Bank Plc has agreed, subject to U.S. Court and relevant regulatory approvals, to acquire Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only $2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units of Lehman Brothers Holdings, Inc., which has filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion ($33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. (Lehman Brothers Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). LEHMAN BROTHERS: LBI Trustee Wants to Probe Former Officers ----------------------------------------------------------- James Giddens, trustee for the liquidation of Lehman Brothers Inc., sought approval from the U.S. Bankruptcy Court for the Southern District of New York to issue subpoenas to former and current officers and directors of the company. The move was part of the trustee's ongoing investigation into what caused the liquidation of LBI under the Securities Investor Protection Act. The trustee specifically wants the officers and employees investigated about: (1) the cause of LBI's collapse; (2) potential claims of LBI against its officers, directors, employees and others; (3) the facts, circumstances and propriety of the transfer of LBI subsidiaries to Lehman Brothers Holdings, including the negotiations of the terms of the transfer, the means for valuing the subsidiaries, the selection of those performing the valuation, and the financial and operational impact from the transfers on the liquidation process; (4) the financial and operational impact of LBI's relationships with its clearing banks, the Depository Trust Clearing Corporation and its holders of collateral on the liquidation process; (5) the facts, circumstances and propriety of inter-company transfers of cash, securities and liabilities among LBI and other Lehman units before and after they filed for bankruptcy; (6) the financial and operational impact of LBI's prime brokerage relationships on the liquidation process; (7) the operational hurdles and financial impact from the transfer of LBI's customer accounts to others; (8) the effect of other financial transactions involving the transfer to or from LBI of assets and liabilities on the ability to liquidate the debtor and the transfer of customer accounts; and (9) LBI's record-keeping practices before and after the bankruptcy filing of Lehman Brothers Holdings and its units. Attorney for the trustee, James Kobak of Hughes Hubbard & Reed, in New York, said that while some of the witnesses have provided the information voluntarily, the issuance of the subpoena is necessary to complete the investigation. "The trustee anticipates that certain other witnesses will refuse to voluntarily appear for an examination," Mr. Kobak said in court papers. He said the issuance of subpoenas would also compel the officers and directors to produce a set of documents relevant to the investigation. It is not yet clear who among the officials would receive a subpoena. Lehman Brothers is already the subject of federal criminal probes launched by U.S. attorneys in Brooklyn, Manhattan, and New Jersey, according to a report by Bloomberg. The investigations are focusing in part on Lehman's role in the $330 billion auction-rate securities market and possible crimes associated with its $6 billion June stock issue, according to the report. Proposed Procedures In connection with the issuance of subpoenas, Mr. Kobak also asked for approval to implement this set of procedures: (1) Witnesses are directed to produce, on a rolling basis, all documents responsive to the trustee's subpoena within 10 days after service of the subpoena, unless otherwise agreed by the trustee, subject to any documents withheld under a claim of privilege; (b) If a witness withholds any documents based upon a claim of privilege, he is obligated to provide counsel for the trustee with a privilege log containing the information required under Rule 7026(a)(5) of the Federal Rules of Bankruptcy Procedure, within 10 days after service of the Subpoena, unless otherwise agreed by the trustee; and (c) The witness is directed to submit to oral examination upon notice within 15 days from the service of a deposition subpoena. A hearing to consider approval of the trustees ' request is scheduled for Jan. 14, 2009. Creditors and other concerned parties have until Jan. 9, 2009 to file their objections. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers led in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offered a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman filed for chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No.: 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16 (Case No. 08-13600). Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the United States District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act in the case captioned Securities Investor Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV- 8119 (GEL). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI Barclays Bank Plc has agreed, subject to U.S. Court and relevant regulatory approvals, to acquire Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only $2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units of Lehman Brothers Holdings, Inc., which has filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion ($33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. (Lehman Brothers Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). LEHMAN BROTHERS: Seeks to Sell Interest in Loan to Thompson ----------------------------------------------------------- Lehman Brothers Holdings sought approval from the U.S. Bankruptcy Court for the Southern District of New York to sell its interest in a mezzanine loan secured by a property located at 816 Congress Avenue in Austin, Texas to one or more funds managed by Thompson National Properties. Contemporaneous with sale, LB 816 Congress, a subsidiary of Lehman Brothers Holdings, will transfer its interest in 816 Congress Holdings LLC to TNP. The Proposed Sale In July 2007, Lehman Brothers Holdings originated loans of $90,560,000 consisting of a $73,775,000 senior loan commitment to 816 Congress Owner LLC and the mezzanine loan to 816 Congress Mezzanine LLC, which is owned by a joint venture between LB 816 Congress LLC and Grubb and Ellis Realty Investors. Thereafter, Lehman Brothers transferred its interest in the senior loan to Swedbank. Pursuant to this financing, 816 Congress Owner, which is a subsidiary of 816 Congress Mezzanine, purchased an office building located at 816 Congress Ave., in Austin, Texas. The building serves as collateral for the senior Loan and the mezzanine loan. Lehman says that to date, the building has underperformed relative to its expectations. Prior to a recently executed lease with Teachers Retirement System of Texas, the building's occupancy rate stood at 70%. This weak performance is linked to a decline in both the national and regional commercial real estate markets. Second quarter 2008 vacancy in Austin's central business district increased from 15.5% to 16.1% and a recent forecast from prominent developer Cushman and Wakefield predicts further downward pressure on rental rates as demand for office space fails to keep pace with the 1.8 million square feet of local office space becoming available by the end of 2008, only 5% of which is pre-leased. In addition, the building faces lease roll-over of 45% over the next five years, likely requiring substantial outlays for lease commissions and tenant improvements, and exposing Lehman Brothers Holdings to the possibility of having to make substantial concessions in the negotiation of replacement leases. While the lease with TRS has raised the occupancy rate to 81%, it will also consume about $4,000,000 of the remaining $7,500,000 of available loan proceeds of the senior loan and the mezzanine loan allocated for tenant improvements and leasing commissions. Based on a conservative assumption of 65% in-place tenants renewal, and tenant improvement assumptions of $25 per square foot for new tenants and $10.25 per square foot for renewal tenants, Lehman Brothers Holdings projects an additional $8,600,000 in tenant improvement or leasing commission costs over the next five years. Since the remaining mezzanine loan proceeds total about $3,500,000, Lehman Brothers Holdings projects a $5 million budget shortfall and, potentially, an equity capital call of about $5 million. As a result, Lehman Brothers Holdings determined to explore potential exit strategies. The Marketing Process Beginning in late winter of 2008, Lehman Brothers Holdings engaged in a marketing process to sell the mezzanine loan, inclusive of about $2,336,713 in future funding obligations. The process began with a review by Lehman Brothers Holdings of its database of interested parties. From this review, it identified about 400 potential deal partners who were notified of the opportunity to purchase the mezzanine loan. Based on the responses to those initial inquiries, the bankrupt company followed up with discussions of the proposed terms of the transaction with about 25 potential deal partners. The majority of these discussions, however, were cursory either because of the building's poor performance relative to its leverage, or because of its location. Ultimately, Lehman Brothers Holdings received three competitive bids: Bidder Value of Bid ------ ------------ TNP $88,050,000 Trigate $77,956,099 Granite Properties $78,132,937 Lehman Brothers Holdings selected the bid submitted by TNP because it provided the highest implied value and also relieved Lehman of its interest in 816 Congress Holdings, thus cutting off any liability for further funding obligations. Lehman believes it is significant since additional funding would be required to preserve its interest in the mezzanine loan. The sale agreement dated Dec. 16, 2008 provides these salient terms and conditions: (1) The purchase by TNP is on an "as is" basis without any representation, warranty or recourse, other than the basic representations that are set out in the sale agreement. A summary of the transactions in the sale agreement is available without charge at: http://bankrupt.com/misc/Lehman_Thomson_Sale_Summary.pdf (2) The purchase by TNP of LB 816 Congress' equity interest in 816 Congress Holdings is conditioned on TNP acquiring Grubb and Ellis' equity in 816 Congress Holdings and the approval of Swedbank, the senior loan holder. A hearing to consider approval of the proposed sale is scheduled for Jan. 14. Creditors and other concerned parties have until Jan. 9 to file their objections. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers led in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offered a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman filed for chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No.: 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16 (Case No. 08-13600). Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the United States District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act in the case captioned Securities Investor Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV- 8119 (GEL). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI Barclays Bank Plc has agreed, subject to U.S. Court and relevant regulatory approvals, to acquire Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only $2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units of Lehman Brothers Holdings, Inc., which has filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion ($33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. (Lehman Brothers Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). LEVEL 3: S&P Corrects December 29 Rating Press Release ------------------------------------------------------ Standard & Poor's Ratings Services provides that its Dec. 29, 2008, report on Level 3 Communications Inc. had incomplete information regarding future expectations for the company's corporate credit rating. Standard & Poor's Ratings Services said on Dec. 29 that it lowered its corporate credit rating on Level 3 to 'SD' (selective default) from 'CC'. In addition, S&P lowered the ratings on the company's 6% convertible subordinated notes due 2010 and 2.875% convertible senior notes due 2010 to 'D' from 'C'. At the same time, S&P removed these ratings from CreditWatch, where they were placed with negative implications on Nov. 18, 2008, following Level 3's announcement of tender offers for three convertible debt issues due in 2009 and 2010. The 'C' issue rating on the company's 6% convertible subordinated notes due 2009 remains on CreditWatch with negative implications until the below-par tender offer for this issue, which was extended until Dec. 30, 2008, is completed. Following the completion of this offer, S&P will lower the issue rating on these notes to 'D'. "These rating actions follow the completion of below-par debt tender offers for two of the three issues," said Standard & Poor's credit analyst Susan Madison, "and Standard & Poor's viewed these offers as distressed and, as such, tantamount to default." "We expect to raise Level 3's corporate credit rating to 'B-' with a stable outlook once all the tender transactions have been completed," added Ms. Madison, "since the company's near-term liquidity position will improve." At that point, S&P would also raise the issue-level ratings on debt that remains outstanding for the three tendered issues, and resolve the negative CreditWatch on all remaining issues based on their respective recovery prospects. LEVEL 3: S&P Downgrades Rating on Convertible 2009 Notes to 'D' --------------------------------------------------------------- Standard & Poor's Ratings Service said it lowered its issue rating on Broomfield Colorado-based Level 3 Communications Inc.'s 6% convertible subordinated notes due 2009 to 'D' from 'C'. At the same time, S&P removed the ratings from CreditWatch with negative implications, where they were placed on Nov. 18, 2008, following the announcement of below-par tender offers for three convertible debt issues maturing in 2009 and 2010. This rating action follows the Dec. 30, 2008, completion of the tender offer for the 2009 notes which Standard & Poor's viewed as distressed, and, as such, tantamount to default. The corporate credit rating on Level 3 Communications Inc. which was lowered on Dec. 29, 2008, following the completion of tender offers for two note issues maturing in 2010, remains at 'SD' (selective default). The issue ratings on all other debt issued by Level 3 Communications and its wholly owned subsidiary, Level 3 Financing Inc., remain on CreditWatch with negative implications, pending S&P's assessment of pro forma recovery prospects for each issue. "Now that all tender offers are complete, S&P expects to raise Level 3's corporate credit rating to 'B-' with a stable outlook and resolve the CreditWatch for all issue ratings in the very near term," said Standard & Poor's credit analyst Susan Madison. LIVE CURRENT: Posts $3 Million Net Loss in Quarter Ended Sept. 30 ----------------------------------------------------------------- Live Current Media Inc. has generated a consolidated net loss of $3,050,207 for the three months ended and $7,015,015 for the nine months ended September 30, 2008 and realized a negative cash flow from operating activities of $535,186 and $4,193,802 for the three and nine months ended September 30, 2008, respectively. "These net losses included incorporation and start up expenses for the Global Cricket Venture of $1,010,023 for the three month period ended September 30, 2008, which were expensed in the quarter due to uncertainty regarding reimbursement of these costs by the GCV as previously anticipated. From the beginning of the fiscal year to September 30, 2008, the company has increased its accumulated deficit to $9,540,693 from $2,525,678," CEO and Chairman of the Board C. Geoffrey Hampson disclosed in a regulatory filing dated November 14, 2008. At September 30, 2008, the company had negative working capital of $2,281,798 compared with positive working capital of $5,930,413 at December 31, 2007. The company has maintained stockholders' equity of $3,648,342. As of September 30, the company's balance sheet showed total assets of $6,985,340 and total liabilities of $3,336,998. Mr. Hampson related that the company's ability to continue as a going-concern is in substantial doubt as it is dependent on the continued financial support from its investors, the ability of the company to raise equity financing and the attainment of profitable operations and further share issuances to meet the company's liabilities as they become payable, including its commitments for the Global Cricket Venture. The outcome of these matters is dependant on factors outside of the company's control and cannot be predicted at this time. Mr. Hampson added that the company's last seven reported quarters have experienced substantial losses. Management expects to continue to incur losses in the coming quarters as planned general and administrative and marketing expenditures increase to support growth and drive increased revenues. The company may also seek to explore new business opportunities, including the building or acquisition of a distribution center or warehouse in the United States to enhance its fragrance fulfillment capability and improve gross margins. These acquisitions may require additional cash beyond what is currently available and such funds may be raised by future equity or debt financings, and through the sale of non- strategic domain name assets. "Management is pursuing opportunities to increase cash flows, however there is no certainty that these opportunities will generate sufficient cash flows to support the company's activities in the future in view of changing market conditions, technological innovations and legal and regulatory requirements. For the remainder of 2008 and into 2009, management expects to expend significant funds as additional marketing costs, which it believes will translate into higher revenue growth, as well as to fund costs related to the Global Cricket Venture. There is no certainty that the profit margins the company may generate going forward, as well as any successful raising of working capital, will be sufficient to offset the anticipated marketing, GCV costs, and other expenditures and may result in net cash outflow for 2008 and 2009." "Management has actively curtailed some operations and growth activities in an effort to reduce costs and preserve cash on hand. Management has also investigated options to sell some domain names in order to address short term liquidity needs. As a result, the company entered into an agreement with Palo Alto-based Arbor Advisors, LLC, on October 1, 2008, to sell six of its non-core but highly valuable dot-com domain names from the company's portfolio of more than 800 domains. Management anticipates that strategic sales of these domain names, if successful, will provide the company with additional cash to meet its working capital and fund Cricket related expenditures and general operating capital needs over the next 12 to 18 months. There can be no assurances that any sales of domain names on terms acceptable to the company will occur." The company generates revenues from (1) the sale of third-party products and services over the Internet; (2) "pay-per-click" advertising revenue; (3) selling advertising on media rich websites with relevant content; and (4) the sale or lease of domain name assets. A full-text copy of the company's quarterly report is available for free at: http://researcharchives.com/t/s?373c About Live Current Live Current Media Inc. -- http://www.livecurrent.com/-- builds, owns and operates some of the most powerful and engaging content and commerce destinations on the Internet, including http://www.perfume.com/and http://www.cricket.com/ Through subject-specific DestinationHubs(TM), Live Current properties connect people to each other and to the information, brands, and products they are passionate about. Live Current has headquarters in Vancouver, Canada with a location in Seattle, WA and is publicly traded on the NASD OTCBB (LIVC). LYONDELLBASELL: Defers Payments to Jan. 4, CRO Awaits Ch. 11 ------------------------------------------------------------ LyondellBasell Industries AF SCA obtained permission from lenders to postpone $280 million in payments due for the conversion of bridge loans into extended loans. In an filing with the Securities and Exchange Commission Lyondell Chemical Company said that its indirect parent LyondellBasell Industries and LyondellBasell Finance Company entered into an agreement with the lenders under the Bridge Loan Agreement originally dated as of December 20, 2007, as amended and restated as of April 30, 2008 and October 17, 2008, between, among others, LyondellBasell Finance Company, as borrower, LyondellBasell Industries as a guarantor, certain subsidiaries of LyondellBasell Industries, including Lyondell Chemical and certain of its subsidiaries, as subsidiary guarantors, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman Sachs Credit Partners L.P., Citigroup Global Markets Inc., ABN AMRO Incorporated and UBS Securities LLC, as Joint Lead Arrangers and Bookrunners. Pursuant to the Second Fee Letter Modification Agreement, the Lenders agreed (i) to further postpone the payment date for $160 million of fees payable under an agreement related to the Bridge Loan Agreement -- which had been initially postponed from December 19, 2008 to December 29, 2008 -- and (ii) to postpone interest payments in an approximate aggregate amount of $121 million which were due on December 29 and December 31, 2008, to December 31, 2008. On December 31, 2008, the parties entered into an amendment to the Second Fee Letter Modification Agreement further postponing the payment date for the Postponed Payments to January 4, 2009. LyondellBasell has yet to provide updates on the payments. AlixPartners Staff to Be CRO Upon Bankruptcy Filing In connection with entering into the Second Fee Letter Modification Agreement, the board has approved and is in the process of retaining Kevin M. McShea of AlixPartners, LLP as Chief Restructuring Officer of LyondellBasell and its subsidiaries. Mr. McShea will serve as CRO pursuant to an Interim Management and Restructuring Services Agreement, between the Lyondell Chemical and AP Services, LLC, a subsidiary of AlixPartners, a corporate turnaround, performance improvement and financial advisory firm. Under the Services Agreement AP Services is to provide temporary staff and services to the company during its restructuring process. Mr. McShea's appointment will become effective upon formal entry of an order by the Bankruptcy Court approving the services agreement. In serving as CRO, Mr. McShea would be employed and compensated by AP Services and would not receive compensations directly from the Company or participate in the Company's benefit plans. Under terms of the Services Agreement, the company will compensate AP Services for Mr. McShea's services at a rate of $730 per hour, will indemnify Mr. McShea to the extent of most favorable indemnities provided by the Company to any of its directors and officers and will cause Mr. McShea to be covered by the Company's directors and officers insurance. In addition to receiving fees for Mr. McShea's services, under terms of the Services Agreement, AP Services will be entitled to compensation and specified hourly rates for the services of other temporary staff that it supplies to the Company and a contingent success fee of up to $7.0 million if the Company confirms a plan of reorganization that becomes effective or completes one or more transactions that transfers a significant portion of the business as a going concern. Mr. McShea will report to, among others, the independent directors of the Supervisory Board of Parent. Mr. McShea, 54, is a Managing Director of AlixPartners and associated with AP Services. He has been a Managing Director of AlixPartners during the past two years. During that time, his principal assignments with AlixPartners were as follows: From October 2006 until April 2007 he led an operational improvement project for a major operation of Celestica, Inc., a Canadian based, global electronics manufacturer. From June 2008 until December 2008, he led an operational and financial turnaround team for Patheon, Inc. a global pharmaceutical manufacturer. From March 2008 until July 2008, Mr. McShea served as the Chief Restructuring Officer for Hilex-Poly Inc. a US based manufacturing concern in a Chapter 11 filing. From January, 2003 to October 2006, Mr. McShea served as an independent contractor to a New York city based turnaround and restructuring firm RKG Osnos. His primary assignment was as chief restructuring officer of Nexpak Inc., a media packaging company, leading the company through its Chapter 11 reorganization process. According to various reports, the company also has hired advisers, including Evercore and New York law firm Cadwalader, Wickersham & Taft LLP, to advise it on its restructuring efforts. Revolving Credit Extension Denied; Chapter 11 Filing an Option Lyondell Chemicals also disclosed that on Dec. 30, 2008, it made a demand for a credit extension under the Revolving Credit Agreement originally dated as of March 27, 2008, as amended, with LyondellBasell, Basell Finance Company B.V. and A.I. International S.a.r.l., an affiliate of the Access Group. The Revolving Credit Agreement provided for a senior unsecured $750 million, eighteen-month revolving credit facility, which may be extended by mutual agreement of the parties. Lyondell and a subsidiary of the Basell Group are borrowers under the facility. The $750 million revolving credit facility is in addition to the existing credit facilities available to LyondellBasell Industries, and is provided by Access Industries Holdings, LLC, an affiliate of Access Industries, which indirectly owns LyondellBasell Industries. A.I. International, however, denied the request for a credit extension. Lyondell Chemicals disagree with the basis for this denial. Lyondell said that its markets have been experiencing a softening of demand combined with an unprecedented fall in raw material costs. "The recent unprecedented fall in commodity prices and the consequent reduction in our borrowing base, as well as recent changes in demand from our customers have placed severe demands on our liquidity." The company says that it continues to work collaboratively with the Lenders and other parties relating to the extension of payment dates and the restructuring of its debt obligations. The company has also hired advisors to assist in evaluating its strategic options, which include the possibility of filing for protection under Chapter 11 of the U.S. Bankruptcy Code. $11.5 billion in Funded Debt Lyondell disclosed in its latest quarterly results that it has $27.12 billion in assets and $228 million stockholders' deficit as of Sept. 30, 2008. It incurred a $232 million net loss in the three months ended Sept. 30, 2008, compared to a $206 net profit during the same period in 2007. LyondellBasell's long-term debt includes credit facilities and debt obligations maintained by Lyondell's wholly owned subsidiaries, Equistar and Millennium, and by Lyondell Chemical without its consolidated subsidiaries. As of Sept. 30, loans, notes, debentures and other long-term debt due to banks and other unrelated parties consisted of: (in millions) ---------- Bank credit facilities: LCC senior secured credit facility: Term loan A due 2013 $1,447 Term loan B due 2014 ($67 million of discount) 7,427 $1-Bil. revolving credit facility 728 Lyondell $1.6-Bil. Inventory-based credit facility 1,163 Accounts receivable securitization programs 53 LCC notes and debentures: Debentures due 2010, 10.25% ($3MM of premium) 103 Debentures due 2020, 9.8% ($3MM of discount) 222 Senior Unsecured Notes due 2014, 8% - - Senior Unsecured Notes due 2016, 8.25% - - Equistar notes and debentures: Senior Notes due 2008, 10.125% - - Senior Notes due 2011, 10.625% - - Debentures due 2026, 7.55% ($20MM of discount) 130 Notes due 2009, 8.75% - - Millennium notes and debentures: Senior Debentures due 2026, 7.625% ($69MM of discount) 172 Convertible Senior Debentures due 2023, 4% - - Other debt 1 ------- Total $11,446 S&P Cuts Rating to Selective Default According to Bloomberg's Bill Rochelle, Standard & Poor's interpreted the action as "the first step of the distressed group's restructuring efforts." In the future, S&P sees the likelihood of "additional material concessions by creditors and/or payment defaults." For a company with $26 billion in debt, S&P predicts "substantial principal losses for some creditors." S&P has downgraded the long-term corporate credit rating of the company to "SD" or "Selective Default" from "B-" a junk rating. In response to the S&P ratings release, Lyondell said, "Standard & Poor's definition of 'selected default' related to our corporate credit rating should not be misinterpreted to suggest that LyondellBasell is currently in default of its bank agreements. As they stated in their press release, 'This is a default in our opinion according to our definitions and criteria.' LyondellBasell is not currently in default according to its agreements with its lenders." About LyondellBasell LyondellBasell Industries -- http://www.lyondellbasell.com/-- is a refiner of crude oil; a significant producer of gasoline blending components; a global manufacturer of chemicals and polymers, including polyolefins and advanced polyolefins; and the leading developer and licensor of technologies for the production of polymers. Following the acquisition of Lyondell in 2007, LyondellBasell became the world's largest independent producer of polypropylene and advanced polyolefins products, a leading supplier of polyethylene, and a global leader in the development and licensing of polypropylene and polyethylene processes and related catalyst sales. The group is estimated to generate 2007 revenues of US$44 billion and EBITDA of US$4.1 billion reflecting strong performance of Lyondell and Basell businesses at the top of the cycle. As reported by the Troubled Company Reporter on Nov. 18, 2008, Moody's Investors Service downgraded the Corporate Family Rating of LyondellBasell Industries AF SCA to B3 from B1. The ratings on the first lien facilities have been downgraded to B1/ LGD 2(27) and the ratings on the legacy notes of Basell and Lyondell have been downgraded to Caa2, with various LGD rates. LBI has rearranged its USD 8 billion second lien facility into US$5.5 billion second lien facilities and USD 2.5 billion third lien facility. The new facilities have been rated Caa1/ LGD 5 (73) and Caa2/ LGD 5 (86) respectively. The outlook on the ratings remains negative. As reported by the TCR Europe on Nov. 26, 2008, Fitch Ratings downgraded Netherlands-based petrochemicals company Lyondell Basell Industries AF SCA's Long-term Issuer Default rating to 'B- '(B minus) from 'B+' while maintaining a Negative Outlook. At the same time, Fitch affirmed LBI's Short-term IDR at 'B'. MAGNA ENTERTAINMENT: Inks New Loan Agreement with MI Developments ----------------------------------------------------------------- Magna Entertainment Corp. entered into a new loan agreement with MI Developments Inc., the company's controlling shareholder. The New Loan Agreement provides for financing in an aggregate principal amount of up to $50 million to fund the company's operations and up to $75 million to fund the company's Laurel Park video lottery terminals license application and related matters and, if Laurel Park is awarded a VLT license, the construction of a temporary VLTs facility. A full-text copy of the 2008 LOAN AGREEMENT is available for free at http://ResearchArchives.com/t/s?3730 The terms of the New Loan Agreement were considered in conjunction with the Transaction Agreement by the Special Committee of MEC's board of directors consisting of Jerry D. Campbell, chairman, Anthony Campbell and William J. Menear. The Transaction Agreement was unanimously approved by MEC's board following a favorable recommendation of the special committee. The Special Committee retained independent legal and financial advisors to assist in its deliberations in respect of the Transaction Agreement. About Magna Entertainment Headquartered in Aurora, Ontario, Magna Entertainment Corp. (Nasdaq: MECA)(TSX: MEC.A) -- http://www.magnaentertainment.com/ -- acquires, develops, owns and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. The company also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. Net loss for the three months ended Sept. 30, 2008, was $48.4 million, an improvement of $1.5 million or 2.9% compared to the same period last year. Net loss for the nine months ended Sept. 30, 2008, was $116.1 million, an increase of $45.3 million or 64.0% compared to the same period last year. During the three months ended Sept. 30, 2008, cash used for operating activities of continuing operations was $26.5 million, which improved $4.0 million from cash used for operating activities of continuing operations of $30.5 million in the three months ended Sept. 30, 2007, due to an increase in cash provided from non-cash working capital balances. In the three months ended September 30, 2008, cash provided from non-cash working capital balances of $11.3 million is due to a decrease in accounts receivable at Sept. 30, 2008, compared to the respective balance at June 30, 2008. At Sept. 30, 2008, the company's balance sheet showed total assets of $1.1 billion, total liabilities of $891.0 million and shareholders' equity of $272.7 million. Going Concern Doubt As reported in the Troubled Company Reporter on March 20, 2008, Ernst & Young LLP in Toronto, Canada, expressed substantial doubt about Magna Entertainment Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years Dec. 31, 2007, and 2006. The auditing firm pointed to the company's recurring operating losses and working capital deficiency. MAGNA ENTERTAINMENT: Inks Recapitalization Transactions with MID ---------------------------------------------------------------- Magna Entertainment Corp. entered into a transaction agreement with MI Developments Inc., MEC's controlling shareholder, and entities affiliated with MEC's chairman and chief executive officer, Frank Stronach, to implement a proposed reorganization of MID that includes the spin-off of MEC to MID's existing shareholders. The Transaction Agreement contemplates, among other things, a multi-step series of proposed transactions designed to recapitalize and reposition MEC to enable it to pursue its strategy of horse racing, gaming and entertainment on a standalone basis. If the transactions contemplated by the Transaction Agreement are implemented, MEC will ultimately be controlled directly by the Stronach Group, MID will no longer have any ownership interest in MEC and MID will be prohibited from investing any additional funds into, or entering into any new transactions with, MEC without the approval of the minority MID Class A shareholders. MEC also has extended the maturity date of its $40 million senior secured revolving credit facility with a Canadian chartered bank from Nov. 28, 2008, to March 16, 2009, subject to certain acceleration provisions. MEC incurred a fee of $1.75 million in connection with the extension of the Senior Bank Facility. MEC disclosed that on Nov. 17, 2008, the Canadian chartered bank has extended the maturity date of its $40.0 million senior secured revolving credit facility to Nov. 28, 2008. The Transaction Agreement contemplates three stages of proposed transactions that, upon completion, will result in, among other things, these: Stage One -- Immediate Transactions -- new financing being made available to MEC by MID in an aggregate principal amount of up to $50 million to fund MEC's operations and up to $75 million to fund MEC's Laurel Park video lottery terminals license application and related matters and, if Laurel Park is awarded a slots license, the construction of a temporary slots facility; -- MID has extended to March 31, 2009, subject to certain acceleration provisions, (i) the maturity date of the existing bridge loan from an MID subsidiary, (ii) the repayment deadline for $100 million under the project financing facility from the MID Lender for Gulfstream Park and (iii) the date until which repayments under the Gulfstream Facility and the project financing facility from the MID Lender for Remington Park will not be subject to a make-whole payment; -- MEC has covenanted to use commercially reasonable efforts to sell or enter into joint ventures in respect of its assets, including its core racetrack assets; Stage Two -- Transactions after MID Shareholder Approval -- sales of real estate assets in California and Florida by MEC to MID for their fair market value; -- further extensions of the Bridge Loan, the New Loan First Tranche and the Gulfstream Facility $100 million repayment obligation to Dec. 14, 2009; -- an increase in the amount of the New Loan First Tranche by $25 million to up to $75 million; -- amendments to the New Loan First Tranche, the Bridge Loan, the Gulfstream Facility and the Remington Facility to, among other things, enable MEC to repay such facilities in full with, at MEC's option, cash and MEC Class A Subordinate Voting Stock; -- a forbearance agreement that prohibits new transactions between MID and MEC unless such transactions are approved by a majority of the minority holders of Class A Subordinate Voting Shares of MID; Stage Three -- Transactions after Retirement of Convertible Subordinated Notes -- provided that MEC has fully retired its outstanding 7.25% Convertible Subordinated Notes due Dec. 15, 2009, and 8.55% Convertible Subordinated Notes due June 15, 2010 by Dec. 14, 2009: -- all MEC indebtedness to MID will be repaid, at MEC's option, either in cash or MEC Class A Stock, and MID will distribute all such cash and MEC Class A Stock to MID's shareholders; -- MEC will sell to the Stronach Group $30 million of Class B Stock of MEC; and -- MEC will be controlled directly by the Stronach Group and MID will no longer have any ownership interest in MEC. Certain of the transactions are proposed to be effected by way of a statutory plan of arrangement involving MID, MEC and the Stronach Group that would be subject to approval by MID's shareholders and the Ontario Superior Court of Justice. MEC understands that MID's shareholder meeting to consider the reorganization proposal is expected to take place in the first quarter of 2009. The transactions proposed to be undertaken by MEC after MID shareholder approval and the retirement of the MEC Subordinated Notes are subject to regulatory approval, including the approval of the Toronto Stock Exchange. MEC Asset Sales and Joint Ventures Pursuant to the Transaction Agreement, MEC has agreed to use its commercially reasonable efforts to sell or enter into joint ventures in respect of its assets, including its core racetrack assets, that will result in MEC receiving net sale proceeds or joint venture payments sufficient to retire the MEC Subordinated Notes no later than Dec. 14, 2009. MID Loans to MEC The maturity dates and repayment deadlines under all existing loans from the MID Lender to MEC and its subsidiaries will be extended to March 31, 2009. In the event that the reorganization transaction does not receive the requisite MID shareholder approval or is abandoned or withdrawn, the maturity dates and repayment deadlines will be accelerated to thirty days after the event. In connection with the extension to March 31, 2009, of the Bridge Loan maturity date and the Gulfstream Facility $100 million repayment obligation, MEC incurred fees of $2.5 million and $2.0 million. MID will make available to MEC a new loan in two tranches. The New Loan First Tranche will be in the amount of up to $50 million and is intended to support MEC's operations through to the special meeting of MID's shareholders to consider the reorganization proposal. The funds are to be used solely to fund (i) operations, (ii) payments of principal or interest and other costs under the New Loan and under other loans provided by MID to MEC, (iii) mandatory payments of interest in connection with other of MEC's existing debt, (iv) maintenance capital expenditures and (v) capital expenditures required pursuant to the terms of MEC's joint venture arrangements with Forest City Enterprises in Florida and Caruso Affiliated in California. The New Loan First Tranche will mature on March 31, 2009, subject to the same accelerated maturity as described above for the existing loans. MEC incurred a fee of $1.0 million in connection with the New Loan First Tranche. The New Loan Second Tranche will be available for drawdown: i) in an amount of up to $45 million to fund the application by the MEC subsidiary that owns and operates Laurel Park in Anne Arundel County for a Maryland slots license, after MID's satisfaction with the slots license application and related matters; and ii) in an amount of up to an additional $30 million to fund the construction of the temporary slots facility at Laurel Park, after receipt of the Maryland slots license and after MID's satisfaction with the municipal approvals, design and construction of the temporary facility. At these time as the New Loan Second Tranche is made available, the New Loan will be guaranteed by The Maryland Jockey Club group of companies and secured by all of these companies' assets. The New Loan Second Tranche matures on Dec. 31, 2011, but will become due (i) 90 days after the Laurel Park slots application being denied or withdrawn, (ii) immediately on the closing of any sale of Laurel Park or (iii) immediately on the closing of any new debt financing in connection with Laurel Park slots. MEC will be required to repay the New Loan Second Tranche with any refunds of any fees if the Laurel Park slots application is denied or withdrawn. These proposed transactions are conditional upon MID shareholder approval being obtained at MID's meeting of shareholders to consider the reorganization proposal, expected to take place in the first quarter of 2009. MID Real Estate Purchases MID will purchase for cash from MEC development lands in Aventura and Ocala, Florida and Dixon, California, additional acreage in Palm Meadows, Florida and MEC's membership interest in, and land underlying, MEC's joint venture with Forest City Enterprises at Gulfstream Park. The purchase price for such real estate assets will be the fair market value of such assets as of the date hereof as determined by negotiation between the Special Committees of MID and MEC. MEC estimates the aggregate price will be approximately $100 - $120 million. MEC will use part of the proceeds from the asset sales to MID to repay its $40 million Senior Bank Facility and its $4.5 million bank term loan in connection with MEC's subsidiary AmTote International, Inc. MID Loans to MEC MID will: i. extend the maturity dates of the Bridge Loan, the New Loan First Tranche and the Gulfstream Facility $100 million repayment obligation to Dec. 14, 2009; ii. increase the amount of the New Loan First Tranche by $25 million to up to $75 million for use by MEC solely to contribute to the retirement of the MEC Subordinated Notes; and iii. amend all loans between MID and MEC to provide for (a) the deferral of interest and principal repayments until maturity or repayment, (b) the right of MEC to repay the loans either in cash or MEC Class A Stock and (c) the requirement that any proceeds received by MEC from equity raises, asset sales, joint ventures or other transactions be placed into an escrow account with MID. The conversion price for the loans will be $1.1519 per share, being the volume-weighted average price of the MEC Class A Stock on NASDAQ for the five trading days immediately preceding the date of this press release less a 15% discount. MID will hold the escrow funds as security for the loans to MEC, and MEC will be permitted to use the funds held in escrow solely (i) to prepay in cash, from time to time, in the following order of priority, the Gulfstream Facility, the Bridge Loan, the New Loan First Tranche and the Remington Facility and (ii) to retire all of the MEC Subordinated Notes. Any cash received by MID pursuant to a prepayment of the Gulfstream Facility, the Bridge Loan, the New Loan First Tranche or the Remington Facility will be distributed to MID shareholders, either as a special distribution or pursuant to an issuer bid for MID Class A Shares. MID Forbearance with MEC MID will agree that, other than pursuant to existing arrangements or as contemplated by the reorganization proposal, it will not, without the prior approval of the majority of the votes cast by minority holders of MID Class A Shares, (a) enter the horseracing or gaming business or enter into any transactions with entities in the horseracing or gaming business, (b) make any further debt or equity investment in, or otherwise give financial assistance to, MEC or (c) enter into any transactions with, or provide any services or personnel to, MEC except for enforcing its rights under the terms of existing arrangements and making non-material amendments, waivers or modifications thereto. Existing MEC Class B Stock Held by MID On the date on which MEC has retired all of the MEC Subordinated Notes, MID will sell to the Stronach Group 335,000 shares of MEC Class B Stock for $1.3552 per share, representing the volume- weighted average price of the MEC Class A Stock on NASDAQ. Conversion of MID Debt and Spin-off of MEC On the date that is 45 days after MEC's retirement of all of the MEC Subordinated Notes, all indebtedness owed by MEC and its subsidiaries to MID and its subsidiaries that has not been repaid in cash will be converted into MEC Class A Stock at the Loan Conversion Price. Soon as reasonably practicable thereafter, MID will spin off to holders of MID shares on a pro rata basis all the MEC Class A Stock received on conversion of the loans. Issuance of Stock to the Stronach Group by MEC MEC will issue to the Stronach Group at a price per share equal to the Loan Conversion Price (i) $30 million of MEC Class B Stock and (ii) at the option of the Stronach Group, an additional number of MEC Class B Stock that, together with the MEC Class B Stock sold to the Stronach Group by MID and those acquired from MEC, will represent a pro forma 60% voting interest in MEC. After the spin-off and the issuance of MEC Class B Stock to the Stronach Group, MEC will be controlled directly by the Stronach Group and MID will no longer have any ownership interest in MEC. The terms of the Transaction Agreement were considered by the Special Committee of MEC's board of directors consisting of Jerry D. Campbell, Chairman, Anthony Campbell and William J. Menear. The Transaction Agreement was unanimously approved by MEC's board after a favorable recommendation of the Special Committee. The Special Committee retained independent legal and financial advisors to assist in its deliberations in respect of the Transaction Agreement. The company said that there is no assurance that the transactions contemplated by the reorganization proposal, or any other transaction, will be completed. The transactions proposed to be undertaken following MID shareholder approval and the retirement of the MEC Subordinated Notes are subject to approval by the Toronto Stock Exchange. A full-text copy of the Transaction Agreement is available for free at http://ResearchArchives.com/t/s?372e A full-text copy of the Twentieth Amending Agreement is available for free at http://ResearchArchives.com/t/s?372f About Magna Entertainment Headquartered in Aurora, Ontario, Magna Entertainment Corp. (Nasdaq: MECA)(TSX: MEC.A) -- http://www.magnaentertainment.com/ -- acquires, develops, owns and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. The company also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. Net loss for the three months ended Sept. 30, 2008, was $48.4 million, an improvement of $1.5 million or 2.9% compared to the same period last year. Net loss for the nine months ended Sept. 30, 2008, was $116.1 million, an increase of $45.3 million or 64.0% compared to the same period last year. During the three months ended Sept. 30, 2008, cash used for operating activities of continuing operations was $26.5 million, which improved $4.0 million from cash used for operating activities of continuing operations of $30.5 million in the three months ended Sept. 30, 2007, due to an increase in cash provided from non-cash working capital balances. In the three months ended September 30, 2008, cash provided from non-cash working capital balances of $11.3 million is due to a decrease in accounts receivable at Sept. 30, 2008, compared to the respective balance at June 30, 2008. At Sept. 30, 2008, the company's balance sheet showed total assets of $1.1 billion, total liabilities of $891.0 million and shareholders' equity of $272.7 million. Going Concern Doubt As reported in the Troubled Company Reporter on March 20, 2008, Ernst & Young LLP in Toronto, Canada, expressed substantial doubt about Magna Entertainment Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years Dec. 31, 2007, and 2006. The auditing firm pointed to the company's recurring operating losses and working capital deficiency. MAXWELL COMMUNICATION: New York Court Closes Case After 17 Years ---------------------------------------------------------------- Reuters' Emily Chasan reports that Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York closed the bankruptcy case of Maxwell Communication Corp. on December 30, 2008, noting there were no further contested matters or adversary proceedings in the case. The bankruptcy case remained open for more than 17 years, the report notes, after the British media empire collapsed amid a string of frauds. According to Ms. Chasan, the Maxwell businesses were thrown into disarray after British publishing magnate Robert Maxwell died in November 1991 and evidence grew of alleged massive financial irregularities. "Pension fund assets of the public companies, Maxwell Communication Corp. and Mirror Group Newspapers, had allegedly been looted to prop up parts of the empire," Ms. Chasan reports. "Administrators and liquidators were appointed in Britain and the United States to recover sums for creditors. Many of Maxwell's key businesses were sold off at auction," Ms. Chasan adds. MERCURY COMANIES: Court Extends Bar Date to January 30, 2009 ------------------------------------------------------------ Pursuant to an order dated Dec. 10, 2008, the U.S. Bankruptcy Court for the District of Colorado extended to Jan. 30, 2009, at 5:00 p.m. Prevailing Mountain Time as the last date for filing claims against Mercury for any debt arising prior to Aug. 28, 2008. A signed, original, completed proof of claim, together with any supporting documentation, should be delivered to The Garden City Group, Inc. at the following address: Via Regular Mail: The Garden City Group, Inc. Attn: Mercury Companies, Inc. PO Box 9000 #6512 Merrick NY 11556-9000 Via Overnight Courier or Hand Delivery: The Garden City Group, Inc. Attn: Mercury Companies, Inc. 105 Maxess Road Melville NY 11747 so as to be received no later than 5:00 p.m. Prevailing Mountain Time on Jan. 30, 2009. Denver, Colorado-based Mercury Companies Inc. is a holding company primarily for subsidiaries that until recently were involved in the settlement services industry, including title services, escrow services, real estate services, mortgage services, mortgage document preparation, and settlement services software development. Mercury has since wound down or sold its operations. The company filed for Chapter 11 protection on Aug. 28, 2008. On Oct. 24, 2008, six direct and indirect subsidiaries of Mercury, Arizona Title Agency, Inc., Financial Title Company, Lenders Choice Title Company, Lenders First Choice Agency, Inc., Texas United Title, Inc., dba United Title of Texas and Title Guaranty Agency of Arizona, Inc., also filed voluntary Chapter 11 petitions, which cases are jointly administered with Mercury's (Bankr. D. Colo. Lead Case No. 08-23125). Daniel J. Garfield, Esq., and Michael J. Pankow, Esq., at Brownstein Hyatt Farber Schreck, represent the Debtors as counsel. Lars H. Fuller, Esq., and Douglas W. Jessop, Esq., at Jessop and Company, PC represent the Official Committee of Unsecured Creditors as counsel. MERCURY COMPANIES: Obtains Approval to Sell Aircraft to Global Jet ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Colarado approved the sale of Mercury Mercury Companies, Inc.'s 2002 Raytheon Aircraft Company 390, S/N/ RB-49, N25MC with Williams-Rolls model FJ44 2A Engines, Right S/N 105004, Left S/N 105033 and related ground support instruments and other personal property to Global Jet Management, LLC, free and clear of all liens, claims, interests and encumbrances, except that the lien of U.S. Bankcorp Equipment Finance, Inc., will attach to the proceeds of sale until the obligation to the Secured Lender is paid in full. As reported in the Troubled Company Reporter on Dec. 8, 2008, U.S. Bancorp Equipment Finance, Inc. financed the purchase of the aircraft in 2003. Denver, Colorado-based Mercury Companies Inc. is a holding company primarily for subsidiaries that until recently were involved in the settlement services industry, including title services, escrow services, real estate services, mortgage services, mortgage document preparation, and settlement services software development. Mercury has since wound down or sold its operations. The company filed for Chapter 11 protection on Aug. 28, 2008. On Oct. 24, 2008, six direct and indirect subsidiaries of Mercury, Arizona Title Agency, Inc., Financial Title Company, Lenders Choice Title Company, Lenders First Choice Agency, Inc., Texas United Title, Inc., dba United Title of Texas and Title Guaranty Agency of Arizona, Inc., also filed voluntary Chapter 11 petitions, which cases are jointly administered with Mercury's (Bankr. D. Colo. Lead Case No. 08-23125). Daniel J. Garfield, Esq., Michael J. Pankow, Esq., at Brownstein Hyatt Farber Schreck, LLP, and Kathleen A. Odle, Esq., at Sherman & Howard LLP, represent the Debtors as counsel. Douglas W. Jessop, Esq., and Lars H. Fuller, Esq., at Jessop and Company, PC represent the Official Committee of Unsecured Creditors as counsel. In its schedules, Mercury Companies, Inc. listed total assets of $21,820,135 and total debts of $63,553,229. MERCURY COMPANIES: Wants Plan Filing Period Extended to Feb. 23 --------------------------------------------------------------- Mercury Companies, Inc. asks the U.S. Bankruptcy Court for the District of Colorado to extend its exclusive periods to file a plan and solicit acceptances of said plan to Feb. 23, 2009, and April 24, 2009, respectively. Mercury has requested for the extensions to match the exclusive periods of its debtor subsidiaries. Mercury's initial 120-day exclusive period to file a plan expired on Dec. 26, 2008, and the attendant 180-day solicitation period expires on Feb. 24, 2009. Mercury tells the Court that the delay in forming the Creditors' Committee has limited its ability to work with its creditors to formulate a plan. In addition, Mercury relates that the bar date for filing proofs of claim is Jan. 30, 2009. Accordingly, Mercury will not have definitive knowledge of all claims against it until well after the original 120-day exclusivity period. Mercury adds that creditors will not be prejudiced by the extension because it will have continued liquidity and ability to pay current debts. Denver, Colorado-based Mercury Companies Inc. is a holding company primarily for subsidiaries that until recently were involved in the settlement services industry, including title services, escrow services, real estate services, mortgage services, mortgage document preparation, and settlement services software development. Mercury has since wound down or sold its operations. The company filed for Chapter 11 protection on Aug. 28, 2008. On Oct. 24, 2008, six direct and indirect subsidiaries of Mercury, Arizona Title Agency, Inc., Financial Title Company, Lenders Choice Title Company, Lenders First Choice Agency, Inc., Texas United Title, Inc., dba United Title of Texas and Title Guaranty Agency of Arizona, Inc., also filed voluntary Chapter 11 petitions, which cases are jointly administered with Mercury's (Bankr. D. Colo. Lead Case No. 08-23125). Daniel J. Garfield, Esq., and Michael J. Pankow, Esq., at Brownstein Hyatt Farber Schreck, represent the Debtors as counsel. Lars H. Fuller, Esq., and Douglas W. Jessop, Esq., at Jessop and Company, PC represent the Official Committee of Unsecured Creditors as counsel. MEXICAN RESTAURANT ASSOCIATES: Files for Chapter 7 Liquidation -------------------------------------------------------------- The Business Review reports that Mexican Restaurant Associates Inc. -- the corporate name of Garcia's Mexican Restaurant -- and its owner, Richard Lamprelli, have filed for Chapter 7 liquidation in the U.S. Bankruptcy Court for the Northern District of New York. Times Union relates that Garcia's Mexican closed in Nov. 30, 2008, after operating for 25 years. Mr. Lamparelli said that keeping the restaurant financially afloat had been difficult in recent months due to increasing costs for utilities, food, and other supplies, the report states. According to court documents, Garcia's Mexican listed $27,100 in assets and $347,332 in liabilities. The Business Review states that Garcia's Mexican has at least 55 creditors, and among the largest creditors is Sita-Ram & Sons LLC, which leased the restaurant an 8,500 square foot space. Mr. Lamparelli, court documents say, paid about $1,800 per month to lease the space, and has been in default of his lease since March 2008. Garcia's Mexican owes Sita-Ram about $68,300, The Business Review reports. Court documents say that Mr. Lamparelli, in his personal bankruptcy filing, listed $226,400 in personal assets, including: -- a sailboat, -- a Sea Doo jet ski, and -- a house in Scotia, which Mr. Lamparelli put on the market for $184,900. The Busniess Review states that Mr. Lamparelli listed about $429,000 in debts to at least 60 creditors. Mexican Restaurant Associates Inc., a.k.a. Garcia's Mexican Restaurant, opened on Central Avenue Halloween in 1983. The restaurant is owned and operated by Rick Lamparelli. Garcia's Mexican was originally was a franchisee of a national chain, "Garcia's of Scottsdale". MILLSTONE II: S&P Withdraws 'AAA' Rating on Class X Notes --------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'AAA' rating on the class X notes issued by Millstone II CDO Ltd., a cash flow high-grade structured finance transaction managed by Church Tavern Advisors LLC. The rating withdrawal follows the complete paydown of the class X notes on the Sept. 4, 2008, payment date pursuant to an event of default. Rating Withdrawn Millstone II CDO Ltd. Rating Balance (mil. $) ------ ---------------- Class To From Current Original ----- -- ---- -------------------- X NR AAA 0.000 10.500 Other Outstanding Ratings Millstone II CDO Ltd. Balance (mil. $) ---------------- Class Rating Current Original ----- ------ ------- -------- A-1M CCC/Watch Neg 1,110.199 1,125.000 A-1Q CCC/Watch Neg 206.743 209.500 A-2 CC 84.000 84.000 B CC 47.873 46.000 C CC 14.705 14.000 D CC 10.711 10.000 NR - Not rated. MOHAWK CO: Sells Equipment & Fixtures to Repay Creditors -------------------------------------------------------- Michael Coit at The Press Democrat reports that Mohawk Co. is selling off its equipment and fixtures at discounted prices to repay creditors. The Press Democrat quoted Fritz Moennighoff, the former owner who is directing the sale for the creditors, as saying, "It does seem like we're giving it away. But our objective is to get the building cleared because we have to be out of there." The Press Democrat relates that sales started in October 2008. The Press Democrat states that hundreds of items sold quickly, including: -- stamping products, -- engraving and sign material, and -- some of the store and office furniture. According to The Press Democrat, the Mohawk Company factory and store in Santa Rosa's Railroad Square still has dozens of furniture pieces, office equipment -- including paper cutters and computer systems, floor fans, and kitchen appliances -- parts bins, and metal shelving. The Press Democrat quoted Mr. Moennighoff as saying, "The biggest challenge is just sorting through the dozens and dozens of items to get things organized so that people could easily see what we had. We had a lot of stuff we simply had to dispose of because it was outdated or damaged." Mohawk Co. is a bankrupt sign business in Santa Rosa, California. MONOGEN INC: Selects Nancy Ross as Trustee Under CCAA ----------------------------------------------------- Canada-based MonoGen Inc. said that its U.S. subsidiary, MonoGen Inc., will pursue an out-of-court liquidation conducted by a common law Assignment for the Benefit of Creditors which it believes will permit the most efficient liquidation and provide the best structure to realize value for its stakeholders. The board of directors of MonoGen Canada has authorized MonoGen USA to enter into a trust agreement with Nancy Ross of High Ridge Partners Inc., as the assignee-trustee of all of MonoGen USA's remaining assets. MonoGen USA has transferred its assets to the assignee-trustee whose contractual duty is to liquidate these assets and distribute any proceeds to creditors. If the recovered value of these assets is not greater than the liabilities of both MonoGen USA and MonoGen Canada, then there will not be any residual value for shareholders of MonoGen Canada. Several employees of MonoGen USA will likely be retained by the assignee-trustee in limited capacities to assist in a continuing effort to sell the assets of MonoGen USA. MonoGen Canada said it has notified the holder of a significant convertible debenture that it Canada is in default on that debenture and in conjunction with these events it intends to make an assignment in bankruptcy pursuant to the Bankruptcy and Insolvency Act (Canada). In conjunction with action, all officers of MonoGen Canada and its subsidiaries will be terminated by MonoGen Canada's Board of Directors and all directors of MonoGen Canada and its subsidiaries will have resigned by the end of the day. About MonoGen Headquartered in Chicago, Illinois, MonoGen Inc. (TSX: MOG) operates a medical and diagnostics company providing cytological screening to healthcare industry. MPC CORP: To Cease Operations; Will Liquidate Remaining Assets -------------------------------------------------------------- On Dec. 31, 2008, MPC Corp. reported that it and all of its direct and indirect subsidiaries decided on Dec. 24, 2008, to discontinue operations and liquidate their remaining assets. On Dec. 29, 2008, MPC reduced the staff from approximately 280 employees to 50 employees who will execute the liquidation. Reuters relates that MPC blamed its Chapter 11 filing on unforeseen issues at integrating an acquisition and other manufacturing changes, which caused extensive losses. About MPC Corporation Headquartered in Nampa, Idaho, MPC Corporation -- http://www.mpccorp.com-- sells personal computer and provides computer softwares and hardwares to mid-size businesses, government agencies and education organizations. The Debtors acquired Gateway Professional Divison from Gateway Inc. and Gateway Technologies Inc. in October 1, 2007. The company and eight of its affiliates filed for Chapter 11 protection on Nov. 6, 2008 (Bankr. D. Del. Lead Case No. 08-12673). Richard A. Robinson, Esq., at Reed Smith LLP, represents the Debtors in their restructuring efforts. The Debtor selected Focus Management Group USA, LLC, as its financial advisor. As of June 30, 2008, the Debtors have $258.3 million in total assets and $277.8 million in total debts. MSX INTERNATIONAL: Decline in Earnings Cue Moody's Junk Rating -------------------------------------------------------------- Moody's Investors Service downgraded MSX International, Inc.'s corporate family rating to Caa1 from B3. Moody's also downgraded the $205 million 12.5% senior secured notes due 2012 that are obligations of various international subsidiaries to B3 from B2. The downgrade reflects Moody's concern over the company's decline in operating earnings for the nine months ended September 28, 2008 over the same period in 2007, the associated weakening in credit metrics over the same period, the potential for a further erosion in credit metrics, and its exposure to the automotive end-market (including OEM, dealers, and supplier customers) that is currently in a severe downturn. The downgrade also reflects Moody's concern over the financial condition of its largest customer Ford Motor Company (Caa3 corporate family rating, negative outlook), which accounts for approximately half of the company's sales and a large portion of its receivables. Notwithstanding these concerns, the rating derives some support from the company's recently implemented cost reduction initiatives as well as expectations for adequate liquidity over the next year. The ratings outlook was revised to negative from stable. These ratings were downgraded: MSX International, Inc. -- Corporate family rating to Caa1 from B3; -- Probability-of-default rating to Caa1 from B3. MSX International Business Services France, SAS, MSX International UK PLC, and MSX International GmbH -- $205 million 12.5% senior secured notes due 2012 to B3 (LGD3, 40%) from B2 (LGD3, 34%). The negative ratings outlook reflects Moody's concern that challenging end-market conditions may continue to pressure MSXI's operating performance over the medium-term. The last rating action was on March 9, 2007, when Moody's upgraded MSXI's corporate family rating to B3 from Caa1 and revised the ratings outlook to stable from negative. Headquartered in Warren, Michigan, MSX International, Inc. is a global provider of outsourced integrated business solutions, focused primarily on warranty management, dealer process improvement, and human capital solutions, to automobile and truck OEMs, dealers, suppliers, and ancillary service providers in Europe, the Americas and Asia-Pacific. NEVADA UENO: Chapter 11 Bankruptcy Filing Surprises Investors ------------------------------------------------------------- Las Vegas Review-Journal Nevada Ueno Mita LLC has filed for Chapter 11 bankruptcy protection, surprising its investors. According to The Review-Journal, Nevada Ueno's creditors include OneCap Holding and OneCap Mortgage and its assignees. Court documents say that Nevada Ueno's principal assets are in Laughlin. The Review-Journal states that Nevada Ueno has $50 million to $100 million in assets and $10 million to $50 million in liabilities. Nevada Uneno may have secured loans funded with investor money, The Review-Journal states. Las Vegas, Nevada-based Nevada Ueno Mita LLC, f.k.a. OneCap Partners 2 LLC, is a single asset real estate debtor. The company filed for Chapter 11 protection on Dec. 26, 2008 (Bankr. D. Nev. Case No. 08-25487). Michael J. Dawson, Esq., who has an office as Las Vegas, Nevada, assists the company in its restructuring effort. The company listed assets of $50 million to $100 million and debts of $10 million to $50 million. NORTHWEST AIRLINES: Delta Reluctant on NWA Dreamliner Orders ------------------------------------------------------------ As part of integrating its fleet with Northwest Airlines Corp.'s, Delta Air Lines, Inc., is eyeing to scale back Northwest's 787 Dreamliner orders from Boeing Co., and expand its own order for the 777-200LR. Specifically, Delta intends to purchase six Boeing 777-200LRs, six 737-700s and eight Bombardier CRJ-900s. Northwest has had 18 of the Dreamliner aircraft -- which guarantees exceptional fuel efficiency -- on order, Freep.com reported on November 28, 2008. Delta officials have disclosed that Boeing is reassessing a new date -- from the original August 2008 schedule -- for the firm delivery of its first 787 Dreamliners to Northwest. Delta president and Northwest CEO Ed Bastian told Freep.com that the airline already has the aircraft that "will fly almost any mission in the world," and declined to comment on the status of Northwest's Dreamliner orders. The Dreamliner costs between $146 million and $200 million, according to the report. About Delta Air Lines With its acquisition of Northwest Airlines, Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or http://www.nwa.com/-- is now the world's largest airline. From its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its Northwest subsidiary and Delta Connection carriers offer service to more than 376 destinations worldwide in 66 countries and serves more than 170 million passengers each year. Delta's marketing alliances allow customers to earn and redeem either SkyMiles or WorldPerks on more than 16,000 daily flights offered by SkyTeam and other partners. The merger closed on October 29, 2008. Prior to the merger, Delta was the world's second-largest airline in terms of passengers carried and Northwest was the world's fourth largest airline. Northwest and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington, represented the Northwest Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors retained Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy counsel. When the Northwest Debtors filed for bankruptcy, they listed $14.4 billion in total assets and $17.9 billion in total debts. On May 21, 2007, the Court confirmed the Northwest Debtors' amended plan. That amended plan took effect May 31, 2007. (Northwest Airlines Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). Delta and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provided the Delta Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provided the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, served as the Committee's financial advisors. On April 25, 2007, the Court confirmed the Delta Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. (Delta Air Lines Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). OCCULOGIX INC: September 30 Balance Sheet Upside-Down by $3MM ------------------------------------------------------------- OccuLogix, Inc.'s balance sheet at Sept. 30, 2008, showed total assets of $13,444,798 and total liabilities of $16,591,545, resulting in a stockholders' deficit of $3,146,747. OccuLogix Inc. reported consolidated financial results for the three months ended Sept. 30, 2008. For three months ended Sept. 3, 2008, the company reported a net loss of $2,282,952 compared with a net loss of $20,688,296 for the same period in the previous year. For nine months ended Sept. 30, 2008, the company posted a net loss of $7,097,008 compared with a net loss of $28,264,384 for the same period in the previous year. As of Sept. 30, 2008, OccuLogix had cash and cash equivalents, and short-term investments of $2.5 million. The company noted that this amount does not include any of the proceeds from the $2.2 million private placement that it disclosed on Oct. 6, 2008. On Oct. 7, 2008, the company effected a 1:25 reverse stock split. A full-text copy of the 10-Q filing is available for free at http://ResearchArchives.com/t/s?3717 About OccuLogix Inc. Headquartered in Mississauga, Ontario, Canada, OccuLogix Inc. (Nasdaq: OCCX; TSX: OC) -- http://www.occulogix.com/-- is a healthcare company focused on ophthalmic devices for the diagnosis and treatment of age-related eye diseases. Going Concern Doubt Ernst & Young LLP, in Toronto, Canada, expressed substantial doubt about OccuLogix Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm pointed to the company's recurring operating losses and working capital deficiency. ONCOVISTA INNOVATIVE: Sept. 30 Balance Sheet Upside Down by $7.5MM ------------------------------------------------------------------ Oncovista Innovative Therapies, Inc.'s September 30, 2008, balance sheet showed total assets of $1,089,766 and total liabilities of $8,629,203, resulting in total stockholders' deficit of $7,539,437. Alexander L. Weis, Ph.D., chairman of the board of directors and chief executive officer, and J. Michael Edwards, chief financial officer, disclosed in a regulatory filing dated November 14, 2008, that the company has a net loss of approximately $5.8 million and net cash used in operations of approximately $3.2 million for the nine months ended September 30, 2008, a working capital deficit of approximately $3.8 million, and an accumulated deficit of approximately $21.9 million at September 30, 2008. "Our net loss increased by approximately $769,000, or 71%, to approximately $1.8 million for the three months ended September 30, 2008 from a net loss of approximately $1.1 million for the three months ended September 30, 2007." "The ability of the company to continue as a going concern is dependent on management's ability to further implement its strategic plan, resolve its liquidity problems, principally by obtaining additional debt or equity financing, and generate additional revenues from collaborative agreements or sale of pharmaceutical products. The company is also in default on certain loans, notes, and related accrued interest aggregating $125,627 at September 30, 2008. The company believes its current available cash along with anticipated revenues may be insufficient to meet its cash needs for the near future. There can be no assurance that financing will be available in amounts or terms acceptable to the company, if at all." "We expect to continue to incur losses from operations in 2008. Our ability to continue as a going concern depends on the success of management's plans to bridge [these] cash shortfalls, including: -- Aggressively seeking investment capital; -- Furthering the development of our product pipeline; -- Advancing scientific progress in our research and development; -- Continuing to monitor and implement cost control initiatives to conserve cash; and -- Entering into distribution agreements to increase sales of diagnostic kits." A full-text copy of the company's quarterly report is available for free at: http://researcharchives.com/t/s?373a About Oncovista Innovative Oncovista Innovative Therapies, Inc., is a biopharmaceutical company commercializing diagnostic tests for metastatic tumors, as well as developing targeted anticancer therapies by utilizing tumor-associated biomarkers. The company has developed diagnostic kits for breast, colon, ovarian, bladder and prostate cancers, and currently market diagnostic kits in Europe for the detection of circulating tumor cells (CTCs) in patients with breast and colon cancer. The company believes it is positioned to leverage its ownership in its diagnostics company, AdnaGen, to realize short- term revenues from sales of AdnaGen's CE-marked diagnostic kits in Europe, while utilizing the diagnostic technology to guide and expedite its anticancer drug development efforts. PARENT COMPANY: Faces Nasdaq Delisting Due to Chapter 11 Filing --------------------------------------------------------------- The Parent Company said the Nasdaq Stock Market notified the company that its shares will be delisted from the Nasdaq Global Market as a result of the company's filing for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code before the United States Bankruptcy Court for the District of Delware on Dec. 28, 2008 The company said it does not intend to take any further action to appeal Nasdaq's decision, and therefore it is expected that the its common stock will be delisted effective after the close of trading on Jan. 7, 2009. About The Parent Company Headquartered in Denver, Colorado The Parent Company -- http://www.etoys.com -- sells toys and children's products through its websites. 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. The company and eight of its affiliates filed for Chapter 11 protection on December 28, 2008 (Bankr. D. Del. Lead Case No. 08-13412). Laura Davis Jones, Esq., and Michael Seidl, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtors. The Debtors proposed Clear Thinking Group LLC as financial advisor; Omni Management Group LLC as claims agent; and Gibson & Rechan LLC as chief restructuring officer. When the Debtors filed for protection from their creditors, they listed $20,633,447 in total assets and $35,722,280 in total debts. PHIBRO ANIMAL: S&P Keeps 'B' Corp. Credit Rating; Outlook Neg. -------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlook on Ridgefield Park, New Jersey-based Phibro Animal Health Corp. to negative, from stable. At the same time, Standard & Poor's affirmed its 'B' corporate credit and other ratings on Phibro. The outlook revision reflects S&P's increased concerns regarding the company's high debt leverage and continued weak cash flow generation in a potentially weakening operating environment. "The ratings on Phibro reflect its low margins, concentrated position in the animal feed additives industry, and its high debt leverage," said Standard & Poor's credit analyst Arthur Wong. Phibro's primary business is manufacturing and marketing a diverse line of animal health and nutrition products for livestock, such as medicated and nutritional feed additives. For the quarter ended Sept. 30, 2008, roughly 79% of the company's revenues were from its animal health and nutrition segments, with distribution and industrial chemicals accounting for the balance. Phibro manufactures a wide range of medicated feed additives and nutritional feed additives, such as antibiotics, antibacterials, and anticoccidials, for the international poultry, swine, and cattle markets. The company is the third-largest participant in the niche worldwide animal feed additives industry. For the quarter ended Sept. 30, 2008, sales in Phibro's core animal health segment grew 22%, to about $110 million, compared to the same quarter in 2007. The growth has been due to a combination of mainly higher pricing, cost increases, and higher volumes. Phibro has been able to pass along a portion of its raw material price increases in the form of higher pricing, thus preserving its EBITDA margins of roughly 9%. However, cost control will continue to be a major theme at Phibro, as the company's ability to pass along pricing increases may be challenged in the near term. In particular, the poultry industry continues to struggle. Commodity prices for soybean and corn, used in chicken feed, have fallen, but prices remain relatively high. Furthermore, excess production has kept retail prices for chicken low, further pressuring the poultry industry. Lower production in the future could lead to lower demand for Phibro's products. Phibro's liquidity is considered adequate. The company has over $25 million available under its credit facility as of Sept. 30, 2008 and has about $9.6 million of cash. Additionally, Phibro is in compliance with its financial covenants on its senior credit facility, under which Phibro needs to maintain a maximum senior secured leverage ratio, minimum consolidated EBITDA, and minimum fixed charge coverage ratio. The company does not face any significant debt maturities until Aug. 1, 2013, when its $160 million in senior notes come due. PROGRESSIVE GAMING: S&P's Corporate Credit Rating Tumbles to 'D' ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its corporate credit rating on Progressive Gaming International Corporation to 'D' from 'CCC'. "The downgrade follows PGIC's 8K filing of Dec. 24, 2008, in which it said its management team is cooperating with its senior secured lender to conduct a sale of substantially all of PGIC's assets pursuant to a Notification of Disposition of Collateral received on Dec. 17, 2008," said Standard & poor's credit analyst Melissa Long. The sale of collateral will occur on Jan. 15, 2009, to the highest qualified bidder, unless PGIC redeems the collateral at any time before the sale by paying all obligations in the amount of about $17 million (before certain adjustments of about $1.1 million) and all reasonable expenses of the agent. PGIC had violated covenants under its senior credit facilities for the quarter ended Sept. 30, 2008. On Nov. 7, 2008, PGIC's senior lender issued an acceleration notice for the company's senior secured revolving credit facility and term loan. Subsequent to this, the lenders entered into a forbearance agreement which expired on Nov. 21, 2008. The ratings were lowered ratings to 'D' because the forbearance agreement between the lenders and PGIC has expired without the loans being repaid, and because the lenders are now pursuing recovery through the sale of collateral. Following this action, the ratings have been withdrawn. PULTE HOMES: Amends Credit Agreement with JPMorgan Chase, et. al. ----------------------------------------------------------------- Pulte Homes, Inc., entered into the Third Amendment to Third Amended and Restated Credit Agreement. The Amendment was entered with the lenders, guarantors, administrative agent, and others listed therein, with JPMorgan Chase Bank, N.A. serving as Administrative Agent. The amendment, among other things: -- decreases the borrowing capacity from $1.6 billion to $1.2 billion; -- establishes certain Liquidity Reserve Accounts in the event the company fails to satisfy an interest coverage test; -- reduces the credit facility's uncommitted accordion feature from $2.25 billion to $1.75 billion; and -- amends these financial covenants: -- debt to capitalization ratio limit, which has been raised to a fixed 55%; -- tangible net worth, to (i) $2.0 billion, plus (ii) 50% of net profits for each quarter subsequent to Sept. 30, 2008, plus (iii) the amount of any reduction or reversal in deferred tax valuation allowances for each quarter subsequent to Sept. 30, 2008; A full-text copy of the Third Amendment to Third Amended And Restated Credit Agreement is available for free at http://ResearchArchives.com/t/s?3731 About Pulte Homes Based in Bloomfield Hills, Michigan, Pulte Homes Inc. (NYSE: PHM) -- http://www.pulte.com/-- is one of America's home building companies with operations in 50 markets and 26 states. During its 58-year history, the company has delivered more than 500,000 new homes. Pulte Mortgage LLC is also a nationwide lender offering Pulte customers a wide variety of loan products and superior service. For the quarter ended Sept. 30, 2008, Pulte reported a net loss of $280.4 million compared with a $787.9 million net loss for the prior year third quarter. For the nine months ended Sept. 30, 2008, Pulte' net loss was $1.1 billion compared with a $1.4 billion net loss for the prior year period. The company has been reporting consecutive quarters of losses beginning Dec. 31, 2006. * * * As reported in the Troubled Company Reporter on Dec. 16, 2008, Fitch Ratings has downgraded Pulte Homes, Inc.'s Issuer Default Rating and outstanding debt ratings: (i) IDR to 'BB+' from 'BBB-'; (ii) senior unsecured to 'BB+' from 'BBB-'; and (iii) unsecured bank credit facility to 'BB+' from 'BBB-'. PULTE HOMES: Board Suspends Payment of Regular Quarterly Dividend ----------------------------------------------------------------- Pulte Homes, Inc., disclosed in a regulatory filing with the Securities and Exchange Commission that its board of directors has discontinued the regular quarterly dividend on the company's common stock beginning with the first quarter of 2009 due to an ongoing decline in economic conditions. This action is in line with the company's objective of conserving cash as it continues to navigate through a very difficult business environment. The company's board of directors also declared a regular quarterly dividend of $.04 per share on the company's common stock payable Jan. 2, 2009, to shareholders of record at the close of business on Dec. 22, 2008. In a separate filing, Francis J. Sehn notified the Nominating and Governance Committee of Pulte Homes, Inc., of his resignation as a member of the board of directors of the company, effective Dec. 31, 2008. Mr. Sehn intends to continue to serve as a director until such time. About Pulte Homes Based in Bloomfield Hills, Michigan, Pulte Homes Inc. (NYSE: PHM) -- http://www.pulte.com/-- is one of America's home building companies with operations in 50 markets and 26 states. During its 58-year history, the company has delivered more than 500,000 new homes. Pulte Mortgage LLC is also a nationwide lender offering Pulte customers a wide variety of loan products and superior service. For the quarter ended Sept. 30, 2008, Pulte reported a net loss of $280.4 million compared with a $787.9 million net loss for the prior year third quarter. For the nine months ended Sept. 30, 2008, Pulte' net loss was $1.1 billion compared with a $1.4 billion net loss for the prior year period. The company has been reporting consecutive quarters of losses beginning Dec. 31, 2006. * * * As reported in the Troubled Company Reporter on Dec. 16, 2008, Fitch Ratings has downgraded Pulte Homes, Inc.'s Issuer Default Rating and outstanding debt ratings: (i) IDR to 'BB+' from 'BBB-'; (ii) senior unsecured to 'BB+' from 'BBB-'; and (iii) unsecured bank credit facility to 'BB+' from 'BBB-'. QUICK-MED TECH: Sept. 30 Balance Sheet Upside Down by $3.4 Million ------------------------------------------------------------------ Quick-Med Technologies, Inc.'s balance sheet as of September 30, 2008, showed total assets of $1,194,363 and total liabilities of $4,685,876, resulting in total stockholders' deficit of $3,491,513, a portion of which is due to non-cash stock compensation expense and non-cash interest expense from certain notes payable conversions. At September 30, 2008, the company had a negative working capital of $58,536 that primarily consists of: (a) cash of $39,829; (b) accounts receivable of $677,698; (c) accounts payable of $687,107; (d) accrued expenses of $49,671; and (e) unearned revenue of $39,285. For the three months ended September 30, 2008, the company posted a net loss of $6,772, compared with a net loss of $779,253 for the same period a year earlier. This decrease is primarily attributable to an increase in revenues, decreases in research and development, general and administrative expenses, and licensing and patent expenses, offset by an increase in cost of revenues. J. Ladd Greeno, chief executive officer and principal executive officer, and Nam H. Nguyen, chief financial officer, in a regulatory filing dated November 14, 2008, related that the company's auditors have issued a going concern opinion on its audited financial statements for the fiscal years ended June 30, 2008 and 2007 as it has experienced recurring losses and negative cash flows from operations in these periods. "In addition, we have a net capital deficiency. These matters raise substantial doubt about our ability to continue as a going concern." "Total cash on hand at September 30, 2008 was $39,829 as compared with $72,817 at June 30, 2008. Subsequent to the quarter ended, we have collected the entire outstanding receivable balance of approximately $678,000 at September 30, 2008. As of October 31, 2008, we received a total of $50,000 to combine with $100,000 previous borrowings into a 2008 senior secured convertible note 3 from our Chairman." A full-text copy of the company's quarterly report is available for free at: http://researcharchives.com/t/s?3734 About Quick-Med Quick-Med Technologies, Inc., is a life sciences company focused on developing proprietary, broad-based technologies in the consumer, healthcare, and industrial markets. The company's strategy is to further develop its core technologies as well as develop future technologies. The company will attempt to commercialize these technologies through strategic licensing partnership agreements, joint ventures, or co-development agreements. It does not intend to manufacture or distribute final products; instead, it will seek partnership arrangements and license agreements with third parties to develop products that use Quick-Med's technologies and who will perform the manufacturing, marketing, and distribution functions associated with Quick-Med's technologies. RADICAL BUNNY: Court Appoints G. Grant Lyon as Ch. 7 Trustee ------------------------------------------------------------ Andrew Johnson at The Arizona Republic reports that the United States Bankruptcy Court for the District of Arizona has appointed G. Grant Lyon as trustee for Radical Bunny LLC. The Arizona Republic relates that Cathy Baker, Laing Kandel, and Steven Friedberg -- who forced Radical Bunny into bankruptcy in October -- claimed that Radical Bunny primary manager Tom Hirsch blocked access to information about the company's finances. These investors have been asking for a trustee to be appointed, says the report. They said that having an independent trustee running the company will help search out key issues, including whether Radical Bunny will be treated as a secured or unsecured creditor in Mortgages Ltd.'s bankruptcy, the report states, citing Carlos Arboleda, the attorney for the three investors. Many investors filed more than 400 letters in the Court, opposing the appointment of a trustee and saying that Mr. Hirsch should run Radical Bunny because he was familiar with the company's operations, The Arizona Republic states. The report says that these investors were worried that a trustee would diminish potential recoveries because such expenses are paid with money from the firm's bankruptcy estate. Based in Phoenix, Arizona, Radical Bunny LLC is a real-estate financier. On the Web: http://radicalbunny.com/ As reported by the Troubled Company Reporter on Oct. 13, 2008, three investors -- Cathy Baker of Chandler; Laing Kandel of Brooklyn, New York; and Steven Friedberg -- filed an involuntary petition under Chapter 7 of the Bankruptcy Code against Radical Bunny LLC in the United States Bankruptcy Court for the District of Arizona. RECYCLED PAPER: Files for Chapter 11 to Close Asset Sale to Rival ----------------------------------------------------------------- Recycled Paper Greetings, Inc. filed a petition for Chapter 11 bankruptcy protection to complete the sale its business to American Greetings Corporation. American Greetings said Dec. 30, 2008, the agreement providing for the acquisition contemplates that the transaction will be effected pursuant to a so-called "pre-packaged" Chapter 11 reorganization. The reorganization plan is supported by Recycled Paper's secured creditors. Trade creditors are expected to be paid in full under the plan. The parties hope to complete the Chapter 11 reorganization process by the end of American Greetings' first fiscal quarter, although there can be no assurance that this will be the case. Consideration for the acquisition will include a combination of $54.7 million of new 7.375% notes due in 2016 and up to $18.4 million of cash in addition to the $44.2 million investment ($67.1 million of principal) previously made by American Greetings during July 2008. The anticipated Chapter 11 reorganization process of Recycled Paper is expected to provide American Greetings meaningful tax benefits compared to alternative acquisition structures. American Greetings has also agreed to provide up to $10 million Debtor-in- Possession financing to Recycled Paper Greetings. According to Bloomberg's Bill Rochelle, Recycled Paper entered into a forbearance agreement after missing an April 15 interest payment owing on second-lien notes due 2010. Other debt includes a $20 million revolving credit and a $120 million first-lien term loan. Recycled Paper's equity sponsor is Monitor Clipper Partners. Last year, Monitor Clipper invested another $15 million following an initial $130 million investment in 2005, Mr. Rochelle said, citing Moody's Investors Service. American Greetings said that the acquisition of Recycled Paper enhances its humor and alternative greeting card offerings. American Greetings plans to continue using the Recycled Paper Greetings name. American Greetings Chief Executive Officer Zev Weiss said, "The acquisition of Recycled Paper Greetings will be an excellent addition to our current product offering. This transaction will give American Greetings an enlarged product design capability and a compelling product offering that is expected to delight consumers and enhance productivity for our retail partners." Advisors to American Greetings for the transaction included Imperial Capital, LLC and Jones Day. About American Greetings For more than 100 years, American Greetings Corporation (NYSE: AM) has been a manufacturer and retailer of innovative social expression products that assist consumers in enhancing their relationships. The Company's major greeting card brands are American Greetings, Carlton Cards and Gibson, and other paper product offerings include DesignWare party goods, American Greetings and Plus Mark gift-wrap and boxed cards and Date Works calendars. American Greetings also has the largest collection of electronic greetings on the Web, including cards available at AmericanGreetings.com through AG Interactive, Inc., the Company's online division. AG Interactive also offers digital photo sharing and personal publishing at PhotoWorks.com and Webshots.com and a one-stop source for online graphics, animations, and more at Kiwee.com. In addition to its product lines, American Greetings also creates and licenses popular character brands through the American Greetings Properties group. Headquartered in Cleveland, Ohio, American Greetings generates annual revenue of approximately $1.8 billion, and its products can be found in retail outlets domestically and worldwide, including Company-owned American Greetings and Carlton Cards stores. For more information on the Company, visit http://corporate.americangreetings.com. About Recycled Paper Recycled Paper is a Chicago-based preeminent creator and designer of humorous greeting cards with annual net sales of approximately $80 million. Recycled Paper's humor cards are distributed primarily through mass retail partners, drug stores and specialty retail stores. RECYCLED PAPER: Case Summary & 30 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Recycled Paper Greetings, Inc. 111 N. Canal Street, Suite 700 Chicago, Illinois 60606 Bankruptcy Case No.: 09-10002 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- RPG Holdings, Inc. 09-10001 Recycled Paper Greetings Canada, Inc. 09-10003 Barnyard Industries, Inc. 09-10004 Type of Business: The Debtors design, manufacture, and distribute greetings cards and social expression products throughout the U.S. and Canada. RPG is the third largest greeting card company in North America. Chapter 11 Petition Date: January 2, 2009 Court: District of Delaware Judge: Kevin Gross Debtor's Counsel: Michael F. Walsh, Esq. Rachel Ehrlich Albanese, Esq. Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153 Tel: (212) 310-8000 Fax: (212) 310-8007 http://www.weil.com Debtors' Local Counsel: Mark D. Collins, Esq. Chun I. Jang, Esq. Lee E. Kaufman, Esq. Richards, Layton & Finger, P.A. One Rodney Square 920 North King Street Wilmington, DE 19801 Tel: (302) 651-7700 Fax: (302) 651-7701 http://www.rlf.com Financial and Restructuring Advisor: Rothschild Inc. Claims and Noticing Agent: Kurtzman Carson Consultants 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 ------ --------------- ------------ Target trade debt $3,626,009 Attn: Lee Ann Kealy (763) 440-2739 7000 Target Parkway North Brooklyn Park, MN 55445 Walgreen Company trade debt $1,127,145 Attn: Angela Fruits 200 Wilmot Road Deerfield, IL 60015-4616 Tel: (217) 554-8891 Quality Color Graphics trade debt $407,913 Attn: Bonnie 1855 Greenleaf Avenue Elk Grove, IL 60007 Tel: (847) 981-9910 x6861 American Greetings trade debt $398,740 Unisource Worldwide trade debt $221,926 National Envelope trade debt $216,479 Drape Creative Inc. trade debt $170,774 Fedex trade debt $161,028 Cost Plus Inc. trade debt $160,476 The Royal Group trade debt $155,155 Philipp Friedmann professional $142,755 services Michael Keiser trade debt $142,755 Universal Presentation trade debt $122,459 Concepts Spencer Gifts LLC trade debt $120,262 Beck International Inc. trade debt $116,181 Alper Services LLC trade debt $90,000 Duff & Phelps LLC trade debt $79,414 Sedona Staffing services $61,979 Wegmans Food Markets Inc. trade debt $60,579 Barnes & Noble College trade debt $55,349 Bookstore Farworks Inc. trade debt $51,763 Gregg Builders landlord $51,361 UPS trade debt $50,656 Standard & Poor's debt monitoring $50,000 EMP Media LLC trade debt $48,068 Bjorkman Borthers trade debt $43,495 Melinda Gordon trade debt $42,354 CGLIC-Bloomfield EASC services $39,335 (CIGNA) The petition was signed by chief financial officer Edward Stassen. RHODES COMPANIES: Moody's Downgrades Corp. Family Rating to 'Ca' ---------------------------------------------------------------- Moody's Investors Service lowered all the ratings of The Rhodes Companies, LLC, including the company's corporate family rating to Ca from Caa2, the rating on the senior secured first-lien term loan to Caa3 from Caa1, and the rating on the senior secured second-lien term loan to C from Ca. The ratings outlook is negative. The downgrades and negative outlook reflect the grim liquidity situation confronting the company. While cash flow from operations is modestly positive, it is insufficient to continue covering required debt service payments, thus causing the company to continue burning cash. The temporary waiver from covenant performance that the company received last spring via the second amendment to its credit agreement will expire on June 29, 2009, making it likely that the company will be in default at that time unless a comprehensive restructuring plan is completed before that date. When the daunting industry and economic challenges facing all homebuilders is overlaid on the pronounced weakness in Las Vegas housing, there is no guarantee that any financial restructuring plan outside of bankruptcy would be acceptable to the diverse lending group. Going forward, the ratings could be reduced again if the company is unable to obtain additional covenant relief. The ratings outlook could stabilize if the company were to obtain substantial and long-term covenant relief and were to reverse the current weakness in cash flow generation. These ratings for Rhodes were lowered: -- Corporate family rating, lowered to Ca from Caa2; -- Probability of Default rating, lowered to Ca from Caa2; -- Senior Secured First Lien Term Loan, lowered to Caa3 (LGD3, 41%) from Caa1 (LGD3, 40%); -- Senior Secured Second Lien Term Loan, lowered to C (LGD6, 91%) from Ca (LGD-5, 89%). Moody's most recent announcement concerning the ratings for Rhodes was on December 3, 2007, at which time Moody's lowered the company's corporate family rating to Caa2 from B2, with similar reductions in the ratings on the different issues of debt. Headquartered in Las Vegas, Nevada, The Rhodes Companies, LLC and its co-borrowers (Heritage Land Company, LLC and Rhodes Ranch General Partnership) comprise the largest private community developer and homebuilder in Las Vegas. Revenues and net income including charges (essentially pretax income including charges, since the company pays no income taxes) for the trailing twelve months ended September 30, 2008 were $158 million and ($133) million, respectively. SCANTEK MEDICAL: Files for Chapter 11 Bankruptcy in New Jersey -------------------------------------------------------------- Scantek Medical, Inc., filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code before the United States Bankruptcy Court District of New Jersey. The company said it has shipped 35,000 units of its BreastCare(TM)/BreastAlert(TM) Differential Temperature Sensor product to a medical equipment supplier for hospitals and doctors in Brazil. The purchaser paid $100,000 to date, and will pay the balance of the purchase price 180 days after its receipt of the units. The purchaser's obligation to pay the balance of the purchase price is secured by a standby letter of credit. About Scantek Medical Headquartered in Mountain Lakes, New Jersey, Scantek Medical Inc. (Pink Sheets: SKML) develops, produces, and distributes BeastCare(TM)/BreastAlert(TM) Differential Temperature Sensor product. The company has subsidiaries in Brazil and Hungary. SCANTEK MEDICAL: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Scantek Medical, Inc. PO Box 307 Mountain Lakes, NJ 07046 Bankruptcy Case No.: 08-35593 Type of Business: The Debtor develops, produces, and distributes BeastCare(TM)/BreastAlert(TM) Differential Temperature Sensor product. The company has subsidiaries in Brazil and Hungary. Chapter 11 Petition Date: December 24, 2008 Court: District of New Jersey (Newark) Judge: Morris Stern Debtor's Counsel: Wayne M. Greenwald, Esq. Wayne Greenwald, PC 475 Park Avenue South, 26th Floor New York, NY 10016 Tel: (212) 983-1922 Estimated Assets: Less than $50,000 Estimated Debts: $10 million to $50 million The Debtor's Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Zsigmon L. Sagi $3,501,256 PO Box 307 Mountain Lakes, NJ 07046 Ballydine $1,908,045 Hong Kong China Accordant Holdings LLC $1,690,730 853 East Valley Blvd., Ste 200 San Gabriel, CA 91776 Mintz & Fraade PC $1,322,675 488 Madison Avenue, 11th Floor New York, NY 10022 Patricia Furness $1,118,490 PO Box New Jersey Rubin Family Trust $820,175 25 Highlands Blvd. Huntington Station, NY 11746 Louis Gottlieb $675,321 439 Links Drive Roslyn, NY 11576 Weiner Goodman & Co. $557,149 10 Industrial Way E. Eatontwon, NJ 07724 Canal Jeans $552,249 c/o Ira Russack 2236 Norstrand Avenue Brooklyn, NY 11210 DC Consultants $489,560 Gerald Goodman $350,000 Malir Enterprises Corp. $346,987 Zurow Investments SA $346,987 Kilham Management $346,987 Ira Russack $314,029 Life Medical Technologies $266,532 Inc. Jeffrey Izzo $180,000 Law Offices of Edward C $170,000 Kramer PC The petition was signed by Patricia B. Furness, president and director of the company. SINGLE TOUCH: Auditor Raises Going Concern Doubt ------------------------------------------------ Weaver & Martin LLC in Kansas City, Missouri, in a letter dated December 29, 2008, to the Board of Directors and Stockholders Single Touch Systems, Inc., expressed substantial doubt about the company's ability to continue as a going concern. The firm audited the consolidated balance sheet of Single touch Systems, Inc., as of September 30, 2008, and the related consolidated statements of operations, changes in shareholders' deficit and cash flows for the year then ended. "The company has suffered recurring losses and had negative cash flows from operations that raise substantial doubt about the company's ability to continue as a going concern." President Anthony Macaluso disclosed in a regulatory filing that the company has accumulated operating losses since its inception on May 31, 2000. In addition, the company has used ongoing working capital in its operations. At September 30, 2008, current liabilities exceed current assets by $1,475,243, and its accumulated deficit amounted to $87,643,509. "In view of current matters, the continuation of the company's operations is dependent on revenue from its licensing of its technologies and related services advancements made by its officers, and the raising capital through the sale of its equity instruments or issuance of debt. Management believes that these sources of funds will allow the company to continue as a going concern through 2008. However, no assurances can be made that current or anticipated future sources of funds will enable the company to finance future periods' operations. In light of these circumstances, substantial doubt exists about the company's ability to continue as a going concern," Mr. Macaluso said. For the year ended September 30, 2008, the company posted a net loss of $11,123,003, compared with a net loss of $15,550,049 a year earlier. As of September 30, 2008, the company's balance sheet showed total assets of $1,582,482 and total liabilities of $2,067,214, resulting in total stockholders' deficit of $484,732. A full-text copy of the company's annual report is available for free at: http://researcharchives.com/t/s?372a About Single Touch Single Touch Systems Inc. was incorporated in Delaware on May 31, 2000, under its original name, Hosting Site Network, Inc. to provide businesses with Internet services. On May 12, 2008, the company changed its name to Single Touch Systems Inc. On July 24, 2008, the company acquired all of the outstanding shares of Single Touch Interactive, Inc., a company incorporated in the state of Nevada on April 2, 2002. Single Touch Systems, Inc. is now engaged in the business of wireless application development, publishing and distribution. Single Touch Interactive is a provider of customized wireless solutions. SUNRISE SENIOR: Enters Into Standstill Agreement with Natixis ------------------------------------------------------------- On December 24, 2008, Sunrise Senior Living, Inc., entered into a Pre-Negotiation and Standstill Agreement by and among the company, two of its subsidiaries, Sunrise Hannover Senior Living GmbH & Co. KG and Sunrise Hannover GmbH, and Natixis, London Branch, in its capacity as agent and security trustee for certain lenders under: (i) a loan agreement, dated March 13, 2006, by and among the Agent, OpCo and certain lenders thereto, and (ii) a loan agreement, dated March 13, 2006, by and among the Agent, PropCo and certain lenders thereto. In connection with the Loans, the company and the Agent entered into (i) a funding obligation agreement, dated June 26, 2006, with PropCo and (ii) a funding obligation agreement, dated June 26, 2006, with OpCo pursuant to which the company provided certain guarantees to the Agent in respect of the Loans. On December 18, 2008, the Agent sent to the company a demand letter requesting that the company pay an amount equal to the cash flow deficit of EUR 11,224,376 pursuant to the Funding Obligations. Pursuant to the terms of the Standstill Agreement, the Agent agreed, inter alia, to commence discussions and negotiations with the company and the Borrower relating to certain obligations of the company and the Borrower under the Loans and the Funding Obligations, and to not commence or prosecute any action or proceeding to enforce its demand for payment by the company of the Cash Flow Deficit during the period commencing on December 24, 2008, and ending on the later of (i) 60 calendar days after the date of the Standstill Agreement and (ii) the termination date of an agreement, if any, that the company intends to enter into with Bank of America, N.A. relating to its credit facility with that bank. In any event, the Standstill Agreement will automatically terminate upon the occurrence of an event of default, and will expire on March 31, 2009, at the latest. A full-text copy of the Pre-Negotiation and Standstill Agreement is available for free at: http://researcharchives.com/t/s?3728 The company, the Borrower and the Agent also entered into a Standstill Agreement dated December 23, 2008, which agreement is governed by the laws of the Federal Republic of Germany, pursuant to which the Agent agreed, inter alia, not to enforce any of its acceleration and prepayment rights under the Loans during the period commencing on December 23, 2008, and ending on the later of (i) 60 calendar days after the date of the Borrower Standstill Agreement and (ii) the termination date of an agreement, if any, that the company intends to enter into with Bank of America, N.A., relating to its credit facility with that bank. In any event, the Borrower Standstill Agreement will automatically terminate upon the occurrence of an event of default and will expire on March 31, 2009, at the latest. A full-text copy of the Borrower Standstill Agreement is available for free at: http://researcharchives.com/t/s?3727 Amendment to Annual Report On December 30, 2008, Sunrise Senior Living filed its second amendment to its Annual Report on Form 10-K for the fiscal year ended December 31, 2007. Among others, the company reflected its non-compliance with certain covenants related to its Bank Credit Facility. The financial statements of PS Germany Investment (Jersey) Limited Partnership have been revised to include a discussion of the company's non-compliance with certain covenants related to its Bank Credit Facility and a discussion of subsequent events occurring between September 10, 2008 and December 23, 2008. The Partnership's auditor said that the non-compliance raises substantial doubt about the Partnership's ability to continue as a going concern. Tiffany Tomasso Will Head European Operations Tiffany Tomasso, the company's chief operating officer, moved from her role and became head of European operations effective December 22, 2008. "Strengthening our core business remains our focus and that includes closer oversight of our European portfolios," said Mark Ordan, Sunrise's chief executive officer. "I am confident, with Tiffany's executive leadership, we will continue to see improvement in our UK and German communities." Daniel Schwartz, senior vice president of North American Operations, and Kurt Conway, senior vice president of Sales and Marketing, will now report to Mr. Ordan. "Sunrise is the brand leader in the industry, with some of the strongest operating metrics of any senior-living company," added Mr. Ordan. "Our experienced U.S. and Canadian operations leaders, in combination with Tiffany's oversight of Europe, make Sunrise well positioned to become a leaner, stronger, growing company." About Sunrise Senior Living Sunrise Senior Living, a McLean, Va.-based company -- http://www.sunriseseniorliving.com-- employs approximately 40,000 people. As of September 30, 2008, Sunrise operated 448 communities in the United States, Canada, Germany and the United Kingdom, with a combined capacity for approximately 55,000 residents. At quarter end, Sunrise also had 34 communities under construction in these countries with a combined capacity for 4,277 additional residents. Sunrise offers a full range of personalized senior living services, including independent living, assisted living, care for individuals with Alzheimer's and other forms of memory loss, as well as nursing, rehabilitative and hospice care. SUNWEST MANAGEMENT: Lawsuits Lead to CEO's Bankruptcy Filing ------------------------------------------------------------ Michael Rose at StatesmanJournal.com reports that Sunwest Management Inc.'s company founder and CEO Jon Harder filed for Chapter 11 bankruptcy on Jan. 1, 2009. StatesmanJournal.com relates that Mr. Harder's personal bankruptcy was due to lawsuits filed against Mr. Harder and other company executives. Citing Sunwest officials, the report states that a court ruling led to the "garnishment" of Mr. Harder's accounts and more "judgments" are expected to follow. Mr. Harder said in a statement, "The bankruptcy process is the best chance to see that everyone who is owed money is treated fairly as we work through some very complex legal and financial issues." Sunwest officials, according to StatesmanJournal.com, said that Mr. Harder and other Sunwest principals borrowed heavily and currently owe $2 billion in debt secured by real estate. Sunwest said in a statement that consulting firm Hamstreet & Associates is now running the business. StatesmanJournal.com relates that a newly constituted independent board with no previous ties to Sunwest will be in place by Jan. 15, 2009. Citing Maren Cohn at Hamstreet & Associates, StatesmanJournal.com says that the restructuring effort will try to save the most profitable properties and cut off the worst performing ones from Sunwest's operation. The report quoted Ms. Cohn as saying, "We don't want to do a general sell-off of assets. We want to preserve quality assets for the restructuring effort." According to the report, proceeds from the sale will be under the control of turnaround consultant and chief restructuring officer Clyde Hamstreet. Ms. Cohn said that Sunwest's top three principals -- Darryl Fisher, Wally Gutzler and Harder -- have surrendered the right to share in any sale proceeds, StatesmanJournal.com states. The funds will go to benefit creditors and investors, the report says, citing Ms. Cohn. Salem, Oregon-based Sunwest Management Inc. -- http://www.sunwestmanagement.com/-- manages 275 assisted-living facilities in 36 states. Sunwest Management was founded in 1991 with a portfolio of three properties: two retirement communities and one skilled nursing community. It has a network of regional managers that handles various services from accounting to operations. Sunwest Management has put 10 assisted living centers -- two in Oregon -- into Chapter 11 bankruptcy. Briarwood Retirement and Assisted Living Community LLC, which owns a retirement center in Springfield, and Century Fields Retirement and Assisted Living Community LLC, which owns a center in Lebanon, filed for Chapter 11 on Aug. 19, 2008. On Aug. 17, 2008, eight Sunwest-affiliated LLCs filed for Chapter 11 bankruptcy protection from creditors in Tennessee. SUPERIOR AIR: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Superior Air Parts, Inc., Debtor 621 South Royal Lane, Suite 100 Coppell, TX 75019 Bankruptcy Case No.: 08-36705 Type of Business: The Debtor makes aircraft piston for Lycoming and Continental engines. See: http: www.superiorairparts.com Chapter 11 Petition Date: December 31, 2008 Court: Northern District of Texas (Dallas) Judge: Barbara J. Houser Debtor's Counsel: Stephen A. Roberts, Esq. stephen.roberts@strasburger.com Strasburger & Price, LLP 600 Congress Ave., Ste. 1600 Austin, TX 78701 Tel: (512)499-3600 Fax: (512)499-3660 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Mahle Engine Components USA Trade Debt $378,278 60428 Marne Road Atlantic, IA 50022-8291 Terry Rogers Fax: (712) 243-1553 Rodovia Arnald Julio Mauerbert Trade Debt $145,888 c/o Jose Ademir de Souza 4000 Distrito Industrial Nova Odessa - SP Brasil Caixa Postal 91, CEP 13460-000 Tel: +55 19 3466 981 ECK Industries Inc. Trade Debt $119,696 Dennis Hawkins 1602 North 8th Street Manitowoc, WI 54221-0967 Fax 251-625-2241 Airsure Limited Trade Debt $62,500 Helio Precision Products Trade Debt $55,998 Hartford Aircraft Products Trade Debt $37,854 Crane Cams Trade Debt $37,607 ACE Grinding & Machine Co. Trade Debt $36,632 Genesee Stamping & Fabricating Trade Debt $30,470 Corley Gasket Co. Trade Debt $29,430 Lynden International Trade Debt $28,282 Saturn Fasteners Inc. Trade Debt $26,866 Automatic Screw Machine Trade Debt $26,725 AOPA Pilot Trade Debt $25,109 Combustion Technologies Inc. Trade Debt $23,432 Champion Aerospace Inc. Trade Debt $23,397 Ruhrtaler Gesenkschmiede Trade Debt $22,435 Ohio Gasket & Shim Trade Debt $21,782 Gerhardt Gear Trade Debt $21,324 Knappe & Koester Inc. Trade Debt $15,750 The petition was signed by president and chief executive officer Kent Abercrombie. TONGLI PHARMACEUTICALS: Still Seeking to Refinance $1 Million Note ------------------------------------------------------------------ Tongli Pharmaceuticals (USA), Inc., as of September 30, 2008, has a deficiency in working capital of $1,438,583 and is in default on its bank loan of $1,009,216. "The uncertainties caused by these conditions raise substantial doubt as to the Company's ability to continue as a going concern," Chief Executive Officer Yao Mingli and Chief Financial Officer Yao Yuan disclosed in a regulatory filing dated November 13, 2008. According to CEO Yao Mingli and CFO Yao Yuan, the note is collateralized by real estate assets owned by the company's Chairman. "The note has been in default since June 30, 2007, and we are negotiating a refinance of the note." "The company is currently profitable and 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 or equity financing. The company is attempting to negotiate new terms with the bank and, as of September 30, 2008, the bank has not taken any action against the company. There can be no assurance that any of these efforts will be fruitful." "The development of our business through September 30, 2008, resulted in an accumulated deficit of $888,608. We funded that deficit by means of a bank loan and loans from the members of our management and entities related to our Chairman." "Our need to have raw materials available when needed causes us to advance cash to suppliers. This drain on our cash will remain unless we secure a proprietary source of the volatile herbs that are a large portion of our raw materials. The growth of our company will require capital. Currently, we have budgeted $3.5 million for capital improvements. We intend to pursue a two prong search for capital: on the one hand seeking debt to be secured by our facility and equipment, which has a book value of $7.2 million and is free of liens; on the other hand approaching international equity markets for debt or equity investments. To date we have no commitment from any source for the funds we require." The company's September 30 balance sheet showed total assets of $9,361,709, total liabilities of $2,546,022, and total shareholders' equity of $6,815,687. The company earned $487,036 for the three months ended September 30, 2008. A full-text copy of the company's quarterly report is available for free at: http://researcharchives.com/t/s?3733 About Tongli Pharmaceuticals Tongli Pharmaceuticals (USA), Inc., through a wholly owned subsidiary, Harbin Tianmu Pharmaceuticals Co., Ltd., develops, produces and sells a wide variety of Chinese drugs and healthcare products in The Peoples Republic of China. TP was formerly known as American Tony Pharmaceutical, Inc. The name change became effective on October 30, 2008, and was done to better represent the origin and ongoing business of the company. On August 12, 2008, American Tony completed a reverse merger with Aim Smart Corporation, a dormant public shell. Under the terms of the merger agreement, the former American Tony shareholders exchanged their shares for Aim Smart shares so that, upon the closing of the merger, the former American Tony shareholders owned 96.7% of the outstanding shares of Aim Smart. Aim Smart changed its name to American Tony prior to the change to TP. TROPICANA INN: Wants to Employ William Cooper as Special Counsel ---------------------------------------------------------------- Tropicana Inn Investors, LLC, asks the U.S. Bankruptcy Court for the District of Nevada for authority to employ the law offices of William E. Cooper as special counsel. William E. Cooper, Esq., will provide legal services in these proceedings: (a) Onyx, Las Vegas, LLC v. Tropicana Inn Investors, LLC, Case No.: A 566762, Dept. No. XIII, Eighth District Court, Clark County, Nevada; (b) In re Tropicana Inn Investors, LLC, Case No.: BK-S-08-18719-MKN, United States Bankruptcy Court, District of Nevada; and the arbitration proceedings between Tropicana Inn Investors, LLC and Summit Builders. The Debtor tells the Court that Mr. Cooper is disinterested and does not have any conflict with the estate or the current administration. The Debtor has agreed to advance Mr. Cooper an initial deposit of $25,000 as retainer for the payment of attorney's fees and costs. As compensation for his services, Mr. Cooper bills at $350 per hour. As reported in the Troubled Company Reporter on Dec. 15, 2008, Tropicana Inn Investors, LLC, filed with the Court on Dec. 10, 2008, a Plan of Reorganization under Chapter 11 of the Bankruptcy Code and Disclosure Statement containing a summary of the Plan and related matters. Pursuant to the Plan, the Debtor will offer individuals an opportunity to own up to a 1/12th fractional ownership in the Onyx. The Debtor will increase its amenity offerings by reconfiguring one of the 63 units as a boutique dining venue on site. The remaining units will be offered in a blend of the hotel condominium units and as fractional resort interests. Under the Plan, all 9 classes are impaired and are entitled to vote to accept or reject the Plan. About Tropicana Inn Investors Las Vegas, Nevada-based Tropicana Inn Investors, LLC is the developer of Onyx, a 63-unit luxury condominium project in Las Vegas, Nevada. The $28 million mid-rise project was announced in 2005 as an affordable alternative to the high rises that were being constructed near the Strip. Units at Onyx ranged from 740 square feet to 2,300 square feet and were priced from $400,000 to more than $900,000. On Aug. 4, 2008, seven (7) creditors filed an involuntary petition for Chapter 11 relief against the Debtor (Bankr. D. Nev. Case No. 08-18719). David E. Doxey, Esq., and David J. Winterton, Esq., at David J. Winterton & Assoc., Ltd. represent the Debtor as counsel. TRUMP ENTERTAINMENT: Reaches Forbearance Pact With Lenders ---------------------------------------------------------- Trump Entertainment Resorts Inc. has reached a forbearance agreement with lenders and note holders. Trump Entertainment Resorts Holdings, L.P., and Trump Entertainment Resorts Funding, Inc., didn't make the interest payment due Dec. 1, 2008, on their 8.5% Senior Secured Notes due 2015. As reported by the Troubled Company Reporter on Dec. 1, 2008, Trump Entertainment and its subsidiaries Trump Entertainment Resorts Holdings, L.P., and Trump Entertainment Resorts Funding, Inc., said that, as part of a strategy to maintain sufficient liquidity, the company would forego making the $53.1 million interest payment due Dec. 1, 2008, on the company's 8.5% Senior Secured Notes due 2015. Trump Entertainment has obtained a forbearance agreement from the holders of an aggregate of approximately 70% of the outstanding principal amount of the Notes, pursuant to which the holders have agreed to forbear from exercising their rights and remedies under the indenture governing the notes relating to the missed interest payment, and from directing the trustee under the indenture from exercising any such rights and remedies on the holders' behalf, until Jan. 21, 2009, unless certain events occur. Trump Entertainment has also obtained a forbearance agreement from the lenders under the company's $490 million senior secured term loan agreement, pursuant to which the lenders have agreed to forbear from exercising certain of their rights and remedies that may exist as a result of the missed interest payment on the Notes, until Jan. 21, 2009, unless certain events occur. Trump Entertainment remains in discussions with its lenders and certain note holders regarding a possible restructuring of the company's capital structure. There can be no assurance that any agreement with respect to any restructuring will be reached or, if any agreement is reached. Kristen A. Lee at The Associated Press reports that as of Sept. 30, Trump Entertainment had $1.72 billion in liabilities. Trump Entertainment founder, chairperson, and largest stockholder Donald Trump said in a telephone interview with The AP that he didn't know if the company would be forced to seek Chapter 11 bankruptcy protection if the negotiations fail. According to The AP, Trump Entertainment will sell one of its three casinos, the Trump Marina Hotel Casino, by May 2009 to Coastal Development LLC for about $270 million. Gimme Credit analyst Kim Noland said in December 2008 that she expected Trump Entertainment to offer bondholders a debt exchange or opt for a prepackaged bankruptcy at the end of the December grace period, The AP reports. "Trump cannot cut expenses as fast as revenue is declining at its three Atlantic City casinos. And the sale of the Trump Marina to Coastal is not assured in an environment where financing is very difficult to obtain," the report quoted Ms. Noland as saying. About Trump Entertainment Resorts Inc. Based in Atlantic City, New Jersey, Trump Entertainment Resorts Inc. (NASDAQ: TRMP) -- http://www.trumpcasinos.com/-- owns and operates three casino hotel properties in Atlantic City, New Jersey, which include Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino, and Trump Marina Hotel Casino. The company conducts gaming activities and provides customers with casino resort and entertainment. Donald Trump is a shareholder of the company and, as its non- executive Chairman, is not involved in the daily operations of the company. The company is separate and distinct from Mr. Trump's privately held real estate and other holdings, which the company understands encompasses substantially all of his net worth. Trump Entertainment Resorts, Inc.'s balance sheets as of September 30, 2008, showed $2,076,280,000 in total assets; $196,207,000 in total current liabilities, $1,715,247,000 in long-term debt, net of current maturities, $70,641,000 in deferred income taxes, $27,681,000 in other long-term liabilities, and $21,623,000 in minority interest; $44,881,000 in stockholders' equity; and $421,328,000 in accumulated deficit. The company reported consolidated net losses of $139,143,000 for the three months ended September 30, 2008, compared to $6,626,000 in net income for the same period last year. * * * As reported by the Troubled Company Reporter on Dec. 3, 2008, Standard & Poor's Ratings Services lowered its corporate credit rating on Atlantic City-based Trump Entertainment Resorts Holdings L.P. to 'D' from 'CCC'. In addition, the issue-level rating on the senior secured notes co-issued by TER and Trump Entertainment Resorts Funding Inc. was lowered to 'D' from 'CCC-'. As reported by the TCR on Dec. 3, 2008, Moody's Investors Service lowered Trump Entertainment Resorts Holdings, LP's ratings in response to the company's announcement that it wouldn't make the $53.1 million Dec. 1, 2008 interest payment on its 8.5% senior secured notes due 2015 as part of a strategy to preserve liquidity. These ratings were lowered: -- Probability of default rating to Ca from Caa2 -- Corporate family rating to Ca from Caa1 -- $1.25 billion senior secured notes due 2015 to Ca (LGD4, 64%) from Caa2 (LGD4, 53%) UAL CORP: Expects 2.5%-3.5% YoY Revenue for 4th Quarter 2008 ------------------------------------------------------------ UAL Corp, the holding company of United Air Lines, Inc., filed with the U.S. Securities and Exchange Commission on December 17, 2008, an investor update related to its financial and operational outlook for the fourth quarter of 2008. Revenue Paul R. Lovejoy, senior vice president, general counsel and secretary of UAL, relates that fourth quarter 2008 mainline passenger unit revenue is expected to increase between 2.5% and 3.5% year-over-year excluding the impact of Mileage Plus accounting charges. Including the impact of the Mileage Plus accounting charges, mainline PRASM is expected to increase between 0.3% and 0.7% year-over-year. Mr. Lovejoy says that fourth quarter consolidated PRASM is expected to increase between 3% and 4% year-over-year excluding the impact of Mileage Plus accounting charges. Including the impact of the Mileage Plus accounting charges, consolidated PRASM is expected to increase between .2% and 1.2% year-over-year. Accounting for the charge in expiration policy from 36 to 18 months for inactive Mileage Plus accounts, which was announced in January 2007 and became effective on December 31, 2007, added $121 million of non-cash revenue to UAL's consolidated passenger revenue for the fourth quarter of 2007. Mr. Lovejoy relates that UAL expects that deferred revenue accounting for the Mileage Plus program will reduce consolidated passenger revenue by $61 million in the fourth quarter of 2008 as opposed to UAL's best estimate using previous incremental cost method. Deferred revenue accounting decreased consolidated passenger revenue by $61 million in the fourth quarter of 2007. UAL also estimates that cargo, mail and other revenue will be between $370 million and $380 million for the quarter, including UAFC sales of $3 million. Fuel According to Mr. Lovejoy, UAL's estimated mainline fuel consumption for the fourth quarter is 491 million gallons. Furthermore, UAL expects these fuel prices based on the closing curve on December 11, 2008: Three months Ending Mainline Fuel Price (price per gallon) Dec. 31, 2008 ------------------------------------- ------------------- Mainline fuel price including taxes and $2.55 excluding impact of hedges Mainline fuel price including taxes and 2.85 Cash net gains or losses on settled hedges Mainline fuel price including taxes 3.63 and impact of net mark-to-market losses on settled and unsettled hedges UAL's estimated collateral provisions at various crude oil prices based on its hedge portfolio as of December 11, 2008 are: Change in Cash Collateral Price of Crude Oil, ($ per barrel) per $5 per barrel charge ---------------------------------- ------------------------- $115 above no collateral required $70 above but below $115 $70 million above $50, but below $70 65 million below $50 50 million Non-Operating Income Expense UAL estimates that non-operating expense between $120 million to $130 million for the fourth quarter, excluding the impact of any fuel hedging gains or losses that may be recorded in the non- operating income or expense line. Furthermore, UAL anticipates that $222 million in cash fuel hedging losses and $86 million in non-cash net mark-to-market fuel hedging losses will be recorded in the non-operating income at the end of the fourth quarter based on November 11th closing forward curve prices. Mr. Lovejoy points out that UAL's actual gain or loss will be determined based on market prices prevailing at the end of the fourth quarter. Impairment, Severance and Similar Charges UAL anticipates that it will record accounting charges in the fourth quarter associated with its previously announced capacity reductions. Mr. Lovejoy relates that UAL is unable to accurately estimate the amounts of those charges. Liquidity UAL expects to end fourth-quarter with unrestricted cash, cash equivalents and short-term investments for $2 billion, restricted cash for $0.3 billion, and posted fuel hedge collateral of $0.9 billion. The fuel hedge collateral deposit estimates are based on December 11th closing forward curve prices. Actual fuel hedge collateral will be determined based on market price prevailing at the end of the quarter. Mr. Lovejoy says that UAL is currently pursuing certain additional liquidity initiatives that are expected to close in the early of 2009. Mr. Lovejoy concludes that UAL expects to have an effective tax rate of zero for the fourth quarter of 2008 and thus will not record a tax benefit for the quarter. A full-text copy of UAL's Investor Update is available for free at http://ResearchArchives.com/t/s?3688 About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News, Issue No. 171; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on July 29, 2008, Standard & Poor's Ratings Services lowered its ratings on UAL Corp. and subsidiary United Air Lines Inc. (both rated B- /Negative/--), including lowering the long-term corporate credit ratings on both entities to 'B-' from 'B', and removed the ratings from CreditWatch, where they had been placed with negative implications May 22, 2008, as part of an industrywide review. The outlook is negative. UAL CORP: Sells Jets to Boost Liquidity; Pilots Still Reject CEO ---------------------------------------------------------------- UAL Corporation (Nasdaq: UAUA), the holding company whose primary subsidiary is United Airlines, announced in December 2008 a sale and leaseback transaction that added approximately $150 million of cash to the company's unrestricted liquidity. The company sold 15 Boeing 757 aircraft to East Shore Aircraft, LLC, a wholly owned subsidiary of Wayzata Opportunities Fund II, LP, for approximately $150 million. United Airlines will lease these aircraft back from East Shore Aircraft, LLC, and will continue to operate and maintain the aircraft. With the completion of this transaction, United has raised more than $250 million of the $300 million of additional liquidity the company has said it expects to raise in the fourth quarter of 2008, on top of nearly $1.4 billion the company raised in the third quarter of this year. Pilots See No Signs of Improvement Despite UAL's announcement of its added liquidity, pilots for United Airlines said that UAL will not improve under the help of its present CEO. According to the AirLine Pilots Association, International, under CEO Glenn Tilton's watch, United Airlines in 2008 clearly failed in its efforts to regain its former stature as the world's preeminent airline. Over the past year, the airline has been plagued by an appalling lack of leadership and vision among Mr. Tilton and his executives. Mr. Tilton and his executives have kept United Airlines mired in financial and operational stagnation ever since it exited bankruptcy nearly three years ago. ALPA said that based upon Mr. Tilton's past performance, the pilots see no signs that things are going to get better in the future under his watch. During Mr. Tilton's tenure, the pilots point out, it has been apparent that United does not have a strategy that will enable it to take charge of its destiny. According to ALPA, a look at the Mr. Tilton record over the past year tells the story of missed opportunities, lack of leadership and dismal performance: * UAL posted a $779 million third quarter loss, $519 million attributable to poor fuel hedges. The miscalculation on the fuel hedge is especially disappointing, considering Mr. Tilton came to United from Chevron Texaco, one of the nation's largest oil companies. * UAL posted a $542 million loss for the first quarter, $305 million higher than the first quarter of the previous year. * UAL lost $151 million in the second quarter. With noncash accounting expenses, including a $2.3 billion charge for goodwill impairment and $82 million in severance costs, the airline reported a $2.7 billion loss during the quarter. * During a time when the industry was attempting to consolidate, United Airlines and Mr. Tilton were jilted by both Delta and Continental. Delta, which considered a marriage with United, chose Northwest instead. Continental, which appeared to be on the verge of an announced merger with UAL in April, left Mr. Tilton standing at the altar at the last minute after calling off talks. * Desperate for a merger partner -- ANY merger partner -- Mr. Tilton attempted to steer United Airlines straight into the arms of US Airways, an airline known for problems in its management, its service, and among its employees. Only an outcry from the Air Line Pilots Association and the subsequent negative reaction from the financial community prevented Mr. Tilton from embarking on the potentially suicidal mission of a merger with US Airways. * United announced in June that it was going to ground "fuel Inefficient" aircraft, despite having no plans to replace them with newer, more efficient planes. This decision was based on then record-high fuel prices. Oil prices now are at a four-year low. On its present course and by the end of 2009, Mr. Tilton will have shrunk United's fleet by 20%. This is yet another example that Mr. Tilton and his executives didn't learn a major lesson from bankruptcy: You cannot shrink to profitability; you must have a strategy for growing the company. * While United Airlines was losing money, Mr. Tilton furloughed pilots and other employees, cutting back on service and asking passengers to pay more for less. Mr. Tilton's compensation package was reported at $10.3 million. This includes salary, stock grants, options and other added extras. Mr. Tilton's $10.3 million compensation package dwarfs that of the CEOs of United?s competitors: American Airlines CEO, $4.6 million; Southwest Airlines CEO, $1.3 million; JetBlue CEO, $514,000. * UAL doubled the fee it charges passengers for checking a second bag, essentially raising taxes on passengers and encouraging them to go elsewhere. * United announced in August that it would discontinue complimentary meal service in coach on many flights to and from Europe as a way to cut costs, only to reverse those plans after passengers protested. The reversal was an embarrassment to Mr. Tilton and his executives, and it displayed how out of touch they are with our passengers. * In a clear and stinging rebuke from the pilots and other employees, United Airlines' "2008 Employee Survey" showed that UAL employees don?t trust, respect or have faith in the management of United Airlines. Only 38% of United Airlines expressed "Pride in United," compared with the average Fortune 500 Company, where 84% of employees express pride in their employer. Also, 70% of United employees said they were dissatisfied with their jobs, 73% are looking for new jobs and 77% do not think United is a great place to work. "2008 alone proves that Mr. Tilton's so-called leadership at United is a failure," said Captain Wallach. "[Mr.] Tilton's body of work during his tenure at United Airlines speaks for itself. It simply is not working. The pilots recognize it. The employees recognize it. The passengers certainly recognize it. The investment community recognizes it. It's time for the United Board of Directors to realize it. United Airlines must free itself from failed leadership and lack of vision so that it can become, once again, the airline for which pilots and employees are proud to work, and on which passengers will want to fly." About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News, Issue No. 171; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on July 29, 2008, Standard & Poor's Ratings Services lowered its ratings on UAL Corp. and subsidiary United Air Lines Inc. (both rated B- /Negative/--), including lowering the long-term corporate credit ratings on both entities to 'B-' from 'B', and removed the ratings from CreditWatch, where they had been placed with negative implications May 22, 2008, as part of an industrywide review. The outlook is negative. UAL CORP: May Deepen Partnership with Continental Airlines ---------------------------------------------------------- United Air Lines, Inc. may deepen its partnership with Continental Airlines by linking up on fuel purchasing and consolidating ticket counters, Joshua Freed of The Associated Press reports, citing UAL Corp., Chairman and Chief Executive Officer Glenn Tilton. Mr. Tilton confirmed to AP that a meeting of top executives from the Star Alliance is under way discussing cost saving measures like ground handling, fuel servicing, de-icing, and catering. He cited that not all those initiatives may be realized but could end up saving airlines a significant portion of the money they would have saved had they merged, the report said. Mr. Freed disclosed that United and Continental had talks but results have not been announced. Assuming a United-Continental partnership comes through, the report noted that United and Continental would still compete on domestic U.S. service, and discussions about cost-saving initiatives would stay away from anything as close as "bright line of pricing" as Mr. Tilton put it in the interview. Jaan Albrecht, Star Alliance chief executive officer added that Continental would leave the SkyTeam alliance and join Star Alliance in 2009, reports AP. Ted Bolema, a former Justice Department anti-trust attorney and current principal at Anderson Economic told AP that arrangements as contemplated by the United-Continental partnership may be legally tricky but the carriers may consult with the DOJ. Bill Hensel Jr. of the Houston Chronicle confirmed that Continental and United are discussing how to mesh their frequent flier programs, purchasing, information technology and even airport lounge networks and other facilities as stated by Mark Erwin, Continental senior vice president for corporate development and alliances to Houston Chronicle. Although a merger is speculated to be on the works, Bob Mann of R.W. Mann & Associates, told Houston Chronicle that the ongoing talks do not constitute a merger but by combining forces where they can, for the airlines to get some benefits without experiencing a lot of the disruption that a formal merger can cause. Continental has also filed with the government final comments for an antitrust immunity with United and carriers that belong to Star Alliance as Continental intends to leave the SkyTeam Alliance, the Report noted. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News, Issue No. 171; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on July 29, 2008, Standard & Poor's Ratings Services lowered its ratings on UAL Corp. and subsidiary United Air Lines Inc. (both rated B- /Negative/--), including lowering the long-term corporate credit ratings on both entities to 'B-' from 'B', and removed the ratings from CreditWatch, where they had been placed with negative implications May 22, 2008, as part of an industrywide review. The outlook is negative. About Continental Airlines Based in Houston, Texas, Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/-- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 3,000 daily departures throughout the Americas, Europe and Asia, serving 140 domestic and 139 international destinations. More than 550 additional points are served via SkyTeam alliance airlines. With more than 46,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with Continental Express, carries approximately 69 million passengers per year. * * * The Troubled Company Reporter said on Aug. 13, 2008, that Standard & Poor's Ratings Services took various actions on its ratings on Continental Airlines Inc. (B/Negative/B-3). S&P affirmed its 'B' long-term corporate credit rating, 'B-3' short-term corporate credit rating, all ratings on unsecured debt and on selected enhanced equipment trust certificates. S&P lowered S&P's ratings on other enhanced equipment trust certificates, particularly those secured by regional jets, and raised other ratings. All ratings were removed from CreditWatch, where they were placed with negative implications May 22, 2008, as part of an industrywide review. The rating outlook is negative. Continental Airlines, Inc. reported a working capital deficit of US$202 million, with current assets of US$4.713 billion and current liabilities of US$4.915 billion. At Dec. 31, 2007, the Company had a positive working capital of US$112 million, with US$4.561 billion in current assets and US$4.449 billion in current liabilities. As of Sept. 30, 2008, the Company had US$2.9 billion in unrestricted cash, cash equivalents and short-term investments, which is US$83 million higher than at Dec. 31, 2007. At Sept. 30, 2008, the Company also had US$164 million of restricted cash, cash equivalents and short-term investments, which is primarily collateral for estimated future workers' compensation claims, credit card processing contracts, letters of credit and performance bonds. Restricted cash, cash equivalents and short- term investments at Dec. 31, 2007, totaled US$179 million. Additionally, the Company held student loan-related auction rate securities reported as long-term investments at Sept. 30, 2008 with a par value of US$147 million and a fair value of US$130 million. UAL CORP: To Face Antitrust Charges In New Zealand -------------------------------------------------- According to Tracy Withers of Bloomberg News, United Air Lines, Inc., is named in the proceedings commenced by Commerce Commission, an anti-trust regulatory board in New Zealand, against certain airlines for alleged participation in a cartel and unfair increase of prices. Commerce Commission, in an e-mailed statement to Bloomberg, stated that airlines "colluded to raise the price of freighting cargo by imposing fuel surcharges for more than seven years." The proceedings are assigned in the High Court of Auckland. The Commerce Commission report further stated that airlines allegedly entered into an illegal agreement in 1999 and imposed fuel surcharges between 2000 and 2006. Airlines are also believed to have conspired in fixing prices through imposition of a security surcharge in line with the U.S. terrorist attacks in 2001, Bloomberg noted from the Commerce Commission. Paula Rebstock, chairman of Commerce Commission was quoted by Bloomberg as saying that the "alleged collusion will have caused extensive harm to the New Zealand economy and resulted to increased costs for exporters and importers and higher overall prices for many consumer goods." The other airlines being investigated are British Airways Plc, Cargolux International Airlines SA, Emirates Airline, PT Garuda Indonesia, Japan Airlines International Ltd., Malaysian Airlines Systems Bhd., Korean Air Lines Co. and Thai Airways International Plc. As other airlines are negotiating with the Commission, an early resolution may be possible, Bloomberg said. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News, Issue No. 171; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on July 29, 2008, Standard & Poor's Ratings Services lowered its ratings on UAL Corp. and subsidiary United Air Lines Inc. (both rated B- /Negative/--), including lowering the long-term corporate credit ratings on both entities to 'B-' from 'B', and removed the ratings from CreditWatch, where they had been placed with negative implications May 22, 2008, as part of an industrywide review. The outlook is negative. UAL CORP: To Implement 250 More Job Cuts in January --------------------------------------------------- United Air Lines, Inc., has warned the Association of Flight Attendants of 250 more job cuts to be implemented in January 2009, reports Julie Johnsson of the Chicago Tribune. According to the report, United told the AFA it would "decide whether it needs the deeper cuts by Jan. 9, after it finalized its latest flight schedule." United earlier disclosed it will furlough 1,190 workers as it reduces flight capacity to cope with the economic downturn. Tribune said 700 mechanics, 490 customer service representative and 380 pilots may be laid off based on information announced internally. Tribune added that United will close its Seattle base for Boeing 737 as of March 2009. In an announcement posted on its Web site, United's AFA confirmed the additional 250 furlough, adding that, "Our Contract Section 21.A.4. requires all Voluntary Furloughs to be rebid if it is necessary to extend the specified duration or if there is a further reduction in personnel." About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News, Issue No. 171; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on July 29, 2008, Standard & Poor's Ratings Services lowered its ratings on UAL Corp. and subsidiary United Air Lines Inc. (both rated B- /Negative/--), including lowering the long-term corporate credit ratings on both entities to 'B-' from 'B', and removed the ratings from CreditWatch, where they had been placed with negative implications May 22, 2008, as part of an industrywide review. The outlook is negative. UNITED ENERGY: Posts $293,783 Net Loss in Quarter Ended Sept. 30 ---------------------------------------------------------------- United Energy Corp. reported a net loss of $293,783 for the three months ended September 30, 2008. "During the past two fiscal years ended March 31, 2008 and 2007, we have recorded aggregate losses from continuing operations of $4,313,181 and have incurred total negative cash flows from operations of $4,027,022 for the same two-year period. During the six months ended September 30, 2008, the company experienced a net loss from operations of $617,458 and a negative cash flow from operations $415,168," Ronal Wilen, chief executive officer, and James McKeever, interim chief financial officer, disclosed in regulatory filing dated November 14, 2008. "As of September 30, 2008, the company had $354,011 in cash and cash equivalents, as compared to $858,575 at March 31, 2008. The $504,564 decrease in cash and cash equivalents was due to net cash used in operations of $415,168, net cash used in investing activities of $88,676 and net cash used in financing activities of $720. Cash used in investing activities consisted of fixed asset purchases of $82,267 and patent purchases of $7,294, offset by employee loans of $885. Cash used in financing activities consisted of preferred stock dividends of $720." "As of September 30, 2008 the company's backlog included $74,206 of chemical sales. Backlog represents products that the company's customers have committed to purchase. The company's backlog is subject to fluctuations and is not necessarily indicative of future sales." According to Mr. Wilen and Mr. McKeever, these matters raise substantial doubt about the company's ability to continue as a going concern. "Our continued existence is dependent upon several factors, including raising additional capital through equity or debt financing, increased sales volumes, collection of existing receivables and the ability to achieve profitability from the sale of our product lines. In order to increase our cash flow, we are continuing our efforts to stimulate sales and cut back expenses not directly supporting our sales and marketing efforts. There can be no assurance that we will be successful in stimulating sales or reducing expenses to levels sufficient to generate cash flow sufficient to fund our anticipated liquidity requirements. There also can be no assurance that available financing will be available, or if available, that such financing will be on terms acceptable to us." As of September 30, 2008, the company's balance sheet showed total assets of $1,279,615, total current liabilities of $515,780, and total shareholders' equity of $763,835. A full-text copy of the company's quarterly report is available for free at: http://researcharchives.com/t/s?373d About United Energy United Energy Corp. develops and distributes environmentally friendly specialty chemical products with applications in several industries and markets. Its current line of products includes its K-Line of Chemical Products for the oil industry and related products. Through its wholly owned subsidiary, Green Globe Industries, Inc., the company provides the U.S. military with a variety of solvents, paint strippers and cleaners under its trade name "Qualchem." Green Globe is a qualified supplier for the U.S. military and has sales contracts currently in place with no minimum purchase requirements, which are renewable at the option of the U.S. Military. V2K INTERNATIONAL: Auditor Raises Going Concern Doubt ----------------------------------------------------- Cordovano and Honeck LLP, in Englewood, Colorado, in a letter dated December 10, 2008, to the Board of Directors and Shareholders of V2K International, Inc., expressed substantial doubt about the company's ability to continue as a going concern. The firm audited the balance sheet of V2K International, Inc., as of September 30, 2008, and the related statements of operations, changes in stockholders' deficit and cash flows for the year ended September 30, 2008. The firm pointed out that the company has suffered recurring losses, has a working capital deficit at September 30, 2008, and has an accumulated deficit of $3,291,434 as of September 30, 2008. "These conditions raise substantial doubt about its ability to continue as a going concern." President Victor J. Yosha disclosed in a regulatory filing that management recognizes that the company must generate additional resources to enable it to continue operations. "Management intends to raise additional financing through debt financing and equity financing or through other means that it deems necessary, with a view to moving forward and sustaining a prolonged growth in its strategy phases. However, no assurance can be given that the company will be successful in raising additional capital. Further, even if the company raises additional capital, there can be no assurance that the company will achieve profitability or positive cash flow. If management is unable to raise additional capital and expected significant revenues do not result in positive cash flow, the company will not be able to meet its obligations and may have to cease operations." The company's net loss for the year ended September 30, 2008, was $986,279, compared with a net loss of $1,014,351 for the year ended September 30, 2007, a decrease in the net loss of $28,072. "At September 30, 2008, we had a working capital deficit of $1,151,926 compared with a deficiency of $366,059 at September 30, 2007. While our current assets decreased by $210,695, our current liabilities increased by $575,172. The most significant decreases in current assets were with respect to notes receivable, which decreased by $79,696, and cash, both non-restricted and restricted, which decreased by a total of $234,528. The decrease in cash was due to our operating loss. The most significant increases in current liabilities were as a result of an increase in bridge loan of $731,453, and an increase of $150,000 on the line of credit. These increases were partially offset by a reduction in accounts payable and accrued expenses of $178,453, $75,206 in note payable-other, and $81,247 in unearned income," Mr. Yosha said. As of September 30, 2008, the company's balance sheet showed total assets of $1,092,941 and total liabilities of $2,187,770, resulting in total shareholders' deficit of $1,094,829. A full-text copy of the company's annual report is available for free at: http://researcharchives.com/t/s?372d About V2K International V2K International, Inc. -- through its wholly-owned subsidiaries, V2K Window Fashions, Inc., V2K Technology, Inc., and V2K Manufacturing, Inc. -- sells and supports franchises in the residential and commercial window fashion industry, develops and licenses proprietary software that allows users to decorate windows for both residential and commercial customers, and acts as the primary supplier of soft window treatments to our franchisees by managing strategic alliances with outside vendors. Marketing Source International LLC will endeavor to generate revenues by acting as a product development and sales agent for overseas window covering manufacturers. VINEYARD NATIONAL: Posts $28.6 Million Net Loss in 3rd Quarter -------------------------------------------------------------- On November 17, 2008, Vineyard National Bancorp (NASDAQ: VNBC), parent company of Vineyard Bank, N.A., filed its quarterly report on Form 10-Q with the Securities and Exchange Commission, which includes, among other things, its results of operations for the three and nine months ending September 30, 2008. "We reported a net loss for the three and nine months ended September 30, 2008 of $28.6 million and $109.8 million, respectively, compared to net income of $5.5 million and $17.0 million for the same periods in 2007, respectively. The net loss for the three and nine months ended September 30, 2008 was due primarily to $21.4 million and $88.8 million, respectively, in provision for loan losses principally associated with our land and tract construction loan portfolios," Chief Executive Officer Glen C. Terry and Executive Vice President and Chief Financial Officer Gordon Fong said. "We have continued our strategy to significantly reduce our loan production levels and achieved a net contraction of our balance sheet. Overall, we have contracted our balance sheet by $384.5 million, or 15.5%, during the nine months ended September 30, 2008, from $2.5 billion at December 31, 2007, to $2.1 billion at September 30, 2008." "At September 30, 2008, we had $1.8 billion in loans, net of unearned income and $8.4 million of loans held-for-sale. Loans, net of unearned income decreased $205.2 million during the first nine months of 2008 largely as a result of $637.2 million of payoffs and principal payments and $75.4 million in charge-offs, offset by $488.2 million of disbursements, primarily on existing loans. At September 30, 2008, our gross loan portfolio, excluding loans held-for-sale was comprised of 45.5% construction and land loans, 28.2% commercial real estate loans, 10.2% residential real estate loans, 11.0% commercial loans, and 5.1% consumer loans. The majority of our loans are originated in our primary market areas throughout Southern and Northern California. The loans held-for-sale at September 30, 2008 consisted of $0.9 million of tract construction loans and $7.5 million of land loans." "Total deposits at September 30, 2008 were $1.6 billion, down $315.0 million from their $1.9 billion level at December 31, 2007. During the nine months ended September 30, 2008, money market accounts decreased by $422.6 million while we have increased our brokered time deposits by $236.4 million. Our deposit portfolio at September 30, 2008 was comprised of 77.3% in time certificate of deposits, including brokered time deposits, 13.9% in savings deposits (which include money market, NOW, and savings deposits) and 8.8% in demand deposits." "We believe substantial doubt exists as to our ability to continue as a going concern. We have determined that significant additional sources of liquidity and capital will be required for us to continue operations through 2008 and beyond. We have previously engaged financial advisors to assist the Company in its efforts to raise additional capital and explore strategic alternatives to address our current and expected liquidity and capital deficiencies. To date, those efforts have been unsuccessful. As a result of our financial condition, our regulators are continually monitoring our liquidity and capital adequacy. Based on their assessment of our ability to continue to operate in a safe and sound manner, our regulators may take other and further actions, including assumption of control of the Bank, to protect the interests of depositors insured by the FDIC. As of September 30, 2008, the company's balance sheet showed total assets of $2,098,742,000, total liabilities of $2,096,216, and total stockholders' equity of $2,526,000. A full-text copy of the company's quarterly report is available for free at: http://researcharchives.com/t/s?371f About Vineyard National Bancorp Vineyard National Bancorp is a $2.1 billion bank holding company headquartered in Corona and the parent company of Vineyard. Vineyard, also headquartered in Corona, operates through sixteen full-service banking centers and two regional financial centers in the counties of Los Angeles, Marin, Monterey, Orange, Riverside, San Bernardino, San Diego, Santa Clara and Ventura, Calif. The company's common stock is traded on the NASDAQ Global Market System under the symbol "VNBC." WALDEN RESERVE: To Auction 5,835-Acre Property in Tennessee ----------------------------------------------------------- Walden Reserve, LLC, asks the U.S. Bankruptcy Court for the District of Kansas to authorize the sale of its fee simple interest in certain real property located in Cumberland County, Tennessee consisting of approximately 5,835 acres of land, free and clear of all liens, interests and encumbrances, and approve the terms and conditions of the auction sale. Any such liens will attach to the proceeds of the sale of the assets. The Debtor tells the Court that it has determined in its business judgment, in the event that it is not able to file a confirmable plan, that the sale of the real property is the best method for satisfying its lenders and generating the highest value for its assets when considering the time constraints imposed by its creditors and the Bankruptcy Code. The real property will be offered in individual tracts, combinations or as a whole as allowed by state and county planning and zoning regulations. Acceptance of any auction bid is subject to approval by the Debtor and the Court prior to closing. Pursuant to the Bidding Procedures, the auction sale will be held no later than March 15, 2009. Westchester Auctions, who has been granted the exclusive right to sell the real property, has agreed to advance certain expenses associated with the cost of the sale, including the construction of a road to provide better visibility, and has requested that they retain an 8% buyer's premium and obtain a lien on the proceeds of sale with a higher priority of all creditors. Pursuant to the proposed bidding procedures, 10% of the accepted bid will be paid as down payment upon execution of an Agreement to Purchase. The remainder of the purchase price will be payable in cash at closing, which will take place within 30 days following the auction. About Walden Reserve Based in Overland Park, Kansas, Walden Reserve, LLC, formerly doing business as Renegade Mountain Partners LLC, is a real estate developer in the State of Tennessee. The Debtor filed for chapter 11 protection on May 28, 2008 (D. Kan. Case No. 08-21230). Colin N. Gotham, Esq., at Evans & Mullinix, P.A., represents the Debtor in its restructuring efforts. Scott J. Goldstein, Esq., at Spencer, Fane, Britt & Browne, represents the Committee of Unsecured Creditors as counsel. When the Debtor filed for protection from its creditors, it listed total assets of $14,637,288 and total debts of $7,085,320. WATERBROOK PENINSULA: Court Extends DIP Loan for Add'l 30 Days -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida approved Waterbrook Peninsula LLC's request to extend the existing postpetition financing of $3,021,000 from National City Bank under the existing budget by an additional 30 days, through and including Dec. 30, 2008, without prejudice to such other and further extension as the Court may grant by separate order. The terms of the funding would remain the same, except for the 30- day extension. The Debtor asserted that the extension is necessary in order to operate its business, manage its financial affairs and further advance the construction of certain improvements on real property toward obtaining a certificate of occupancy. The Debtor added that it also intends to use the additional time to reach an agreement with National City Bank about how the case ought to proceed including, if possible, exit from bankruptcy. Based in Deerfield Beach, Florida, Waterbrook Peninsula LLC is the developer of a residential development, "Peninsula on the Intracoastal," located at 2649 North Federal Highway, Boynton Beach, Florida. The company filed for Chapter 11 protection on June 25, 2008 (Bankr. S.D. Fla. Case No. 08-18603). Scott A. Underwood, Esq., and Thomas M. Messana, Esq., at Messana, Weinstein & Stern, P.A., represent the Debtor as counsel. When the Debtor filed for protection from its creditors, it listed assets of between $10 million and $50 million, and debts of between $10 million to $50 million. WAVERLY GARDENS: May Employ HTG Consultants as Valuation Expert --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Tennessee granted Waverly Gardens of Memphis, LLC, and Kirby Oaks Integra, LLC, dba Waverly Glen, permission to employ HTG Consultants, LLC, a licensed appraiser, as their valuation expert. As the Debtors' valuation expert, HTG will advise the Debtors and provide, if necessary, expert testimony in connection with issues in connection with their cases, including the Debtors' motion to use cash collateral and objections filed by First Tennessee Bank, N.A. and in connection with valuation issues that may arise in connection with confirmation of a plan of reorganization. David S. Passero, a principal at HTG, assured the Court that the firm does not represent or hold any interest adverse to the Debtors or their estates, and that it is a "disinterested person" as defined under Sec. 101(14) of the Bankruptcy Code. HTG has agreed to undertake the appraisal of the Debtors' real property and business for a fee of $18,000 plus travel and out of pocket expense, plus additional compensation at the rate of $300 for expert testimony. About Waverly Garden Memphis, Tennessee-based Waverly Gardens of Memphis, LLC -- http://www.waverlygardens.com/-- owns and operates an independent living facility comprised of 19 interconnected single story modular structures on an 11.5 acre site. Kirby Oaks Integra, LLC, dba. Waverly Glen, owns and operates a 52 unit assisted living facility, with Alzeheimer's unit. The Debtors filed separate petitions for Chapter 11 relief on Oct. 2, 2008 (Bankr. W.D. Tenn. Lead Case No. 08-30218). Michael P. Coury, Esq., at Farris Bobango Branan PLC, represents the Debtors as counsel. When Waverly Gardens filed for protection from its creditors, it listed assets of between $10 million to $50 million, and debts of $1 million to $10 million. When Waverly Glen filed for protection from its creditors, it listed assets and debts of between $1 million and $10 million each. WILLIAM LYON: Moody's Downgrades Corporate Family Rating to 'Caa3' ------------------------------------------------------------------ Moody's Investors Service lowered all of the ratings of William Lyon Homes, including the company's corporate family rating to Caa2 from Caa1 and senior notes ratings to Caa3 from Caa2. The ratings outlook is negative. The downgrade and negative outlook reflect Moody's expectation that the company's cash flow from operations in 2009, in its strictest sense (i.e., without any boost from tax refunds), is likely to be only breakeven at best. In addition, compliance with the recently relaxed bank covenants could still be challenging if impairments and other charges continue apace, which is what Moody's Corporate Finance Group is projecting for 2009, especially in light of the company's heavy concentration in California and lesser concentrations in Arizona and Nevada. Debt leverage, while expected to come down temporarily from the currently elevated level of 78.6% as a result of recent and projected near-term debt repayments, is likely to trend even higher as impairment charges take their toll. Furthermore, the company's lot supply, at greater than seven years, is at the higher end of the industry average while all six of the company's separate bank credit facilities expire in various months during 2009. Going forward, the ratings could come under additional pressure if the company were to begin generating substantial negative free cash flow, were to require, but be unable to attain, additional covenant relief, or were unable to renew more than a token amount of its current bank credit facility. The outlook and ratings could benefit if the company were to begin generating substantial free cash flow, managed to staunch the operating losses before impairments, complied with bank covenants handily, and began reducing debt leverage on a sustained basis. These ratings were changed: -- Corporate Family Rating lowered to Caa2 from Caa1; -- Probability of Default Rating lowered to Caa2 from Caa1; -- Senior Unsecured Notes, lowered to Caa3 (LGD5, 72%) from Caa2 (LGD5, 82%). Moody's most recent announcement concerning the ratings for William Lyon Homes was on December 3, 2007, at which time Moody's lowered the company's corporate family rating to Caa1 from B2 and the ratings on the senior unsecured notes to Caa2 from Caa1. Begun in 1956 and headquartered in Newport Beach, California, William Lyon Homes designs, builds, and sells single family detached and attached homes in California, Arizona and Nevada. Consolidated homebuilding revenues and net income including charges for the last twelve months ended September 30, 2008 were $826 million and $(267) million, respectively. * Fitch Updates Quantitative Insurer Ratings on 8 Life Insurers --------------------------------------------------------------- Fitch Ratings has updated its Quantitative Insurer Financial Strength ratings for these eight life insurers, as highlighted at the end of the release. -- Pennsylvania Life Insurance Company; -- Destiny Health Insurance Company; -- Forethought Life Assurance Company; -- Cooperativa De Seguros De Vida Puerto Rico; -- Safehealth Life Insurance Company; -- First Health Life & Health Insurance Company; -- Penn Treaty Network America Insurance Company; -- Standard Life Insurance Company of Indiana. Fitch's rating actions are: Pennsylvania Life Insurance Company(NAIC Code 67660) -- Q-IFS downgraded to 'BBBq' from 'Aq'. Destiny Health Insurance Company(NAIC Code 89003) -- Q-IFS downgraded to 'CCCq' from 'Bq'. Forethought Life Assurance Company(NAIC Code 79677) -- Q-IFS downgraded to 'Bq' from 'BBBq'. Cooperativa De Seguros De Vida Puerto Rico(NAIC Code 79715) -- Q-IFS downgraded to 'BBq' from 'BBBq'. Safehealth Life Insurance Company(NAIC Code 79014) -- Q-IFS, rated 'BBq', is withdrawn. First Health Life & Health Insurance Company(NAIC Code 90328) -- Q-IFS, rated 'BBBq', is withdrawn. Penn Treaty Network America Insurance Company(NAIC Code 63282) -- Q-IFS, rated 'Bq', is withdrawn. Standard Life Insurance Company of Indiana(NAIC Code 69051) -- Q-IFS, rated 'BBBq', is withdrawn. * S&P Says High-Yield Issuance Ends 2008 on Sour Note ----------------------------------------------------- Credit quality among U.S. speculative-grade issuers continued to deteriorate in November and early December, with 131 downgrades to just 10 upgrades since the end of October, said an article published by Standard & Poor's. The article says that negative bias, the percentage of issuers on CreditWatch negative or with a negative outlook, has climbed to 37.5%, near a six-year high. Distressed exchanges have increased in the last few months as firms attempt to stave off bankruptcy and garner better terms. There were 11 defaults in November, which pushed the 12-month- trailing speculative-grade default rate up to 3.15% from 2.86% in October. There were eight defaults in the first half of December. "We expect defaults to continue to rise over the coming months," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. Currently, 15% of the speculative-grade parent issuers are rated 'B-', and 9% are rated 'CCC+' or lower. "We expect that the 12-month-trailing issuer-based high-yield default rate will rise by September 2009 to 7.6% based on a baseline scenario or 9.6% based on a pessimistic scenario, which is growing ever more likely," Ms. Vazza added. The Standard & Poor's high-yield composite index rose to 1,713 basis points on Dec. 23, 2008, up from 1,590 bps at the end of November and 1,383 bps at the end of October as investors continue to shun risky assets in favor of Treasuries. Much of the recent move in high-yield bond spreads has stemmed from the unprecedented drop in Treasury yields and less to do with a decline in high- yield bond prices. Indeed, the five-year Treasury yield has fallen to 1.35% on Dec. 19, down from 2.8% at the end of October. S&P anticipates that the first quarter of 2009 might hold more of the same for secondary trading levels and high-yield primary markets. Ms. Vazza noted that, "Until there is some continued improvement in investment-grade bond spreads, it would be hard to expect much of a rally in high-yield. However, as Treasuries tighten to such low levels, portfolio managers could tiptoe into riskier assets in the first quarter of the year. For primary markets, S&P expects that high-yield issuance will remain limited, as high funding costs and limited investor demand will keep firms on the sidelines." * Treasury Releases Guidelines for Targeted Investment Program -------------------------------------------------------------- The United States Department of the Treasury released on January 2, 2009, the program description for the Targeted Investment Program under which the Citigroup investment that was announced on Nov. 23 was made. The program description is required by Section 101(d) of the Emergency Economic Stabilization Act. Other EESA program descriptions are posted at: http://www.treasury.gov/initiatives/eesa/program-descriptions/ American Bankruptcy Institute notes that Treasury gave itself wide latitude in aiding U.S. automakers under the formal guidelines for its bailout of the industry. Guidelines for Targeted Investment Program Treasury will determine eligibility of participants and allocation of resources under the Emergency Economic Stabilization Act pursuant to the Targeted Investment Program. Financial Institutions (as defined in EESA) will be considered for participation in the Targeted Investment Program on a case-by-case basis. There is no deadline for participation in this program. Justification The program's objective is to foster financial market stability and thereby to strengthen the economy and protect American jobs, savings, and retirement security. Treasury noted that in an environment of high volatility and severe financial market strains, the loss of confidence in a financial institution could result in significant market disruptions that threaten the financial strength of similarly situated financial institutions and thus impair broader financial markets and pose a threat to the overall economy. The resulting financial strains could threaten the viability of otherwise financially sound businesses, institutions, and municipalities, resulting in adverse spillovers on employment, output, and incomes. Eligibility Considerations In determining whether an institution is eligible for participation, Treasury may consider, among other things: 1. The extent to which destabilization of the institution could threaten the viability of creditors and counterparties exposed to the institution, whether directly or indirectly; 2. The extent to which an institution is at risk of a loss of confidence and the degree to which that stress is caused by a distressed or illiquid portfolio of assets; 3. The number and size of financial institutions that are similarly situated, or that would be likely to be affected by destabilization of the institution being considered for the program; 4. Whether the institution is sufficiently important to the nation's financial and economic system that a loss of confidence in the firm's financial position could potentially cause major disruptions to credit markets or payments and settlement systems, destabilize asset prices, significantly increase uncertainty, or lead to similar losses of confidence or financial market stability that could materially weaken overall economic performance; and 5. The extent to which the institution has access to alternative sources of capital and liquidity, whether from the private sector or from other sources of government funds. In making these judgments, Treasury will obtain and consider information from a variety of sources, and will take into account recommendations received from the institution's primary regulator, if applicable, or from other regulatory bodies and private parties that could provide insight into the potential consequences if confidence in a particular institution deteriorated. Form, Terms, and Conditions of Treasury Investment Treasury will determine the form, terms, and conditions of any investment made pursuant to this program on a case-by-case basis in accordance with the considerations mandated in EESA. Treasury may invest in any financial instrument, including debt, equity, or warrants, that the Secretary of the Treasury determines to be a troubled asset, after consultation with the Chairman of the Board of Governors of the Federal Reserve System and notice to Congress. Treasury will require any institution participating in this program to provide Treasury with warrants or alternative consideration, as necessary, to minimize the long-term costs and maximize the benefits to the taxpayers in accordance with EESA. Treasury will also require any institution participating in the program to adhere to rigorous executive compensation standards. In addition, Treasury will consider other measures, including limitations on the institution's expenditures, or other corporate governance requirements, to protect the taxpayers' interests. These program guidelines are being published in accordance with the requirements of Section 101(d) of EESA. * BOND PRICING: For the Week of Dec. 29 - Jan. 2, 2009 ------------------------------------------------------ Company Coupon Maturity Bid Price ------- ------ -------- --------- ABITIBI-CONS FIN 7.88% 8/1/2009 65.88 ACE CASH EXPRESS 10.25% 10/1/2014 27.63 ADVANTA CAP TR 8.99% 12/17/2026 5.50 AHERN RENTALS 9.25% 8/15/2013 18.00 AIRTRAN HOLDINGS 7.00% 7/1/2023 58.95 ALABAMA POWER 5.50% 10/1/2042 48.88 ALERIS INTL INC 10.00% 12/15/2016 16.50 AMBASSADORS INTL 3.75% 4/15/2027 29.50 AMD 5.75% 8/15/2012 34.00 AMER GENL FIN 3.88% 10/1/2009 78.50 AMER GENL FIN 4.00% 3/15/2011 47.00 AMER GENL FIN 4.63% 5/15/2009 85.00 AMER GENL FIN 4.63% 9/1/2010 60.46 AMER GENL FIN 4.88% 5/15/2010 52.00 AMER GENL FIN 5.63% 8/17/2011 52.00 AMES TRUE TEMPER 10.00% 7/15/2012 38.00 AMR CORP 4.50% 2/15/2024 98.00 AMR CORP 9.20% 1/30/2012 38.00 AMR CORP 10.40% 3/10/2011 42.50 ANTIGENICS 5.25% 2/1/2025 24.32 ARCO CHEMICAL CO 9.80% 2/1/2020 11.75 ARCO CHEMICAL CO 10.25% 11/1/2010 14.00 ASBURY AUTO GRP 3.00% 9/15/2012 33.00 ASSURED GUARANTY 6.40% 12/15/2066 12.00 ATHEROGENICS INC 1.50% 2/1/2012 8.00 ATHEROGENICS INC 4.50% 9/1/2008 8.25 ATHEROGENICS INC 4.50% 3/1/2011 8.50 ATLANTIC MUTUAL 8.15% 2/15/2028 17.25 AVENTINE RENEW 10.00% 4/1/2017 18.50 AVIS BUDGET CAR 7.63% 5/15/2014 30.90 BALLY TOTAL FITN 14.00% 10/1/2013 1.00 BANK NEW ENGLAND 8.75% 4/1/1999 5.13 BANK NEW ENGLAND 9.88% 9/15/1999 4.13 BANKUNITED CAP 3.13% 3/1/2034 10.00 BEARINGPOINT INC 4.10% 12/15/2024 19.85 BEAZER HOMES USA 4.63% 6/15/2024 43.00 BEAZER HOMES USA 8.38% 4/15/2012 37.50 BEAZER HOMES USA 8.63% 5/15/2011 45.22 BELL MICROPRODUC 3.75% 3/5/2024 18.00 BLOCKBUSTER INC 9.00% 9/1/2012 50.80 BOISE CASCADE CO 7.35% 2/1/2016 22.00 BON-TON DEPT STR 10.25% 3/15/2014 14.25 BON-TON DEPT STR 10.25% 3/15/2014 10.50 BORDEN INC 8.38% 4/15/2016 8.30 BORDEN INC 9.20% 3/15/2021 5.00 BOWATER INC 6.50% 6/15/2013 7.00 BOWATER INC 9.00% 8/1/2009 29.02 BOWATER INC 9.38% 12/15/2021 10.25 BOWATER INC 9.50% 10/15/2012 10.25 BRODER BROS CO 11.25% 10/15/2010 26.50 BRUNSWICK CORP 5.00% 6/1/2011 60.04 BUFFETS INC 12.50% 11/1/2014 0.26 BURLINGTON COAT 11.13% 4/15/2014 27.00 CALLON PETROLEUM 9.75% 12/8/2010 52.25 CAPITALSOURCE 1.63% 3/15/2034 94.00 CAPMARK FINL GRP 5.88% 5/10/2012 34.50 CAPMARK FINL GRP 6.30% 5/10/2017 30.23 CARAUSTAR INDS 7.25% 5/1/2010 48.50 CARAUSTAR INDS 7.38% 6/1/2009 59.00 CCH I LLC 9.92% 4/1/2014 4.50 CCH I LLC 10.00% 5/15/2014 4.13 CCH I LLC 10.00% 5/15/2014 26.63 CCH I LLC 11.13% 1/15/2014 6.38 CCH I/CCH I CP 11.00% 10/1/2015 20.00 CCH I/CCH I CP 11.00% 10/1/2015 16.00 CCH I/CCH I CP 11.00% 10/1/2015 30.13 CCH I/CCH I CP 11.00% 10/1/2015 30.13 CCH II/CCH II CP 10.25% 1/15/2010 41.38 CCH II/CCH II CP 10.25% 9/15/2010 49.00 CCH II/CCH II CP 10.25% 9/15/2010 40.00 CCH II/CCH II CP 10.25% 10/1/2013 32.75 CCH II/CCH II CP 10.25% 10/1/2013 38.00 CELL GENESYS INC 3.13% 11/1/2011 32.85 CHAMPION ENTERPR 2.75% 11/1/2037 12.75 CHAMPION ENTERPR 7.63% 5/15/2009 82.88 CHAPARRAL ENERGY 8.50% 12/1/2015 40.00 CHAPARRAL ENERGY 8.88% 2/1/2017 24.50 CHARTER COMM HLD 9.63% 11/15/2009 79.98 CHARTER COMM HLD 10.00% 4/1/2009 88.84 CHARTER COMM HLD 10.00% 5/15/2011 12.48 CHARTER COMM HLD 10.75% 10/1/2009 11.93 CHARTER COMM HLD 11.13% 1/15/2011 51.00 CHARTER COMM HLD 11.75% 5/15/2011 18.00 CHARTER COMM INC 6.50% 10/1/2027 1.62 CHENIERE ENERGY 2.25% 8/1/2012 16.00 CIRCUS CIRCUS 7.63% 7/15/2013 38.45 CITADEL BROADCAS 4.00% 2/15/2011 49.00 CLAIRE'S STORES 9.25% 6/1/2015 20.50 CLAIRE'S STORES 10.50% 6/1/2017 14.10 CLEAR CHANNEL 4.25% 5/15/2009 85.00 CLEAR CHANNEL 4.40% 5/15/2011 27.13 CLEAR CHANNEL 4.50% 1/15/2010 56.00 CLEAR CHANNEL 4.90% 5/15/2015 13.40 CLEAR CHANNEL 5.00% 3/15/2012 18.00 CLEAR CHANNEL 5.50% 9/15/2014 13.00 CLEAR CHANNEL 5.50% 12/15/2016 11.50 CLEAR CHANNEL 5.75% 1/15/2013 16.42 CLEAR CHANNEL 6.25% 3/15/2011 31.48 CLEAR CHANNEL 6.88% 6/15/2018 11.00 CLEAR CHANNEL 7.25% 10/15/2027 17.37 CLEAR CHANNEL 7.65% 9/15/2010 67.00 CLEAR CHANNEL 10.75% 8/1/2016 20.75 CMP SUSQUEHANNA 9.88% 5/15/2014 4.13 COEUR D'ALENE 1.25% 1/15/2024 27.00 COEUR D'ALENE 3.25% 3/15/2028 32.38 COMPUCREDIT 3.63% 5/30/2025 28.25 CONEXANT SYSTEMS 4.00% 3/1/2026 45.00 CONSTAR INTL 11.00% 12/1/2012 4.00 COOPER-STANDARD 7.00% 12/15/2012 39.50 COOPER-STANDARD 8.38% 12/15/2014 21.00 CREDENCE SYSTEM 3.50% 5/15/2010 19.25 DAYTON SUPERIOR 13.00% 6/15/2009 100.50 DECODE GENETICS 3.50% 4/15/2011 1.00 DELPHI CORP 6.50% 8/15/2013 1.50 DELPHI CORP 8.25% 10/15/2033 0.00 DELTA PETROLEUM 7.00% 4/1/2015 17.13 DEVELOPERS DIVER 3.50% 8/15/2011 43.50 DEVELOPERS DIVER 3.50% 8/15/2011 43.62 DEX MEDIA INC 8.00% 11/15/2013 17.95 DEX MEDIA WEST 8.50% 8/15/2010 63.81 DEX MEDIA WEST 8.50% 8/15/2010 63.38 DEX MEDIA WEST 9.88% 8/15/2013 24.00 DOLE FOODS CO 8.63% 5/1/2009 98.76 DOLLAR GENERAL 8.63% 6/15/2010 54.88 DR HORTON 5.00% 1/15/2009 99.00 DUANE READE INC 9.75% 8/1/2011 49.50 DUNE ENERGY INC 10.50% 6/1/2012 31.00 DVI INC 9.88% 2/1/2004 8.88 ENERGY PARTNERS 8.75% 8/1/2010 66.50 ENERGY PARTNERS 9.75% 4/15/2014 33.00 EOP OPERATING LP 4.75% 3/15/2014 15.64 EOP OPERATING LP 6.80% 1/15/2009 98.50 EOP OPERATING LP 7.00% 7/15/2011 30.07 EPIX MEDICAL INC 3.00% 6/15/2024 30.25 EQUISTAR CHEMICA 7.55% 2/15/2026 5.04 FGIC CORP 6.00% 1/15/2034 10.50 FIBERTOWER CORP 9.00% 11/15/2012 22.13 FINLAY FINE JWLY 8.38% 6/1/2012 6.00 FIRST DATA CORP 4.50% 6/15/2010 65.17 FLOTEK INDS 5.25% 2/15/2028 26.40 FONTAINEBLEAU LA 11.00% 6/15/2015 10.13 FORD HOLDINGS 9.30% 3/1/2030 27.00 FORD MOTOR CO 7.40% 11/1/2046 27.95 FORD MOTOR CO 7.75% 6/15/2043 29.12 FORD MOTOR CO 8.88% 1/15/2022 27.80 FORD MOTOR CO 9.22% 9/15/2021 23.12 FORD MOTOR CO 9.50% 9/15/2011 43.00 FORD MOTOR CO 9.95% 2/15/2032 27.48 FORD MOTOR CO 9.98% 2/15/2047 24.88 FORD MOTOR CRED 4.25% 1/20/2009 90.95 FORD MOTOR CRED 4.30% 3/20/2009 86.45 FORD MOTOR CRED 4.35% 2/20/2009 91.73 FORD MOTOR CRED 4.40% 1/20/2009 87.93 FORD MOTOR CRED 4.45% 4/20/2009 80.13 FORD MOTOR CRED 4.50% 3/20/2009 80.57 FORD MOTOR CRED 4.60% 1/20/2009 97.69 FORD MOTOR CRED 4.70% 4/20/2009 80.10 FORD MOTOR CRED 4.80% 7/20/2009 58.00 FORD MOTOR CRED 4.90% 5/20/2009 69.16 FORD MOTOR CRED 4.90% 9/21/2009 72.19 FORD MOTOR CRED 4.90% 10/20/2009 51.80 FORD MOTOR CRED 4.90% 10/20/2009 72.36 FORD MOTOR CRED 4.95% 10/20/2009 76.00 FORD MOTOR CRED 5.00% 8/20/2009 77.50 FORD MOTOR CRED 5.00% 8/20/2009 75.89 FORD MOTOR CRED 5.00% 9/21/2009 78.00 FORD MOTOR CRED 5.00% 9/21/2009 72.33 FORD MOTOR CRED 5.00% 1/20/2011 23.26 FORD MOTOR CRED 5.00% 2/22/2011 30.86 FORD MOTOR CRED 5.10% 7/20/2009 53.87 FORD MOTOR CRED 5.10% 8/20/2009 77.75 FORD MOTOR CRED 5.10% 2/22/2011 32.75 FORD MOTOR CRED 5.15% 11/20/2009 74.32 FORD MOTOR CRED 5.15% 11/20/2009 67.07 FORD MOTOR CRED 5.15% 11/20/2009 71.10 FORD MOTOR CRED 5.20% 7/20/2009 80.05 FORD MOTOR CRED 5.20% 3/21/2011 31.78 FORD MOTOR CRED 5.20% 3/21/2011 35.92 FORD MOTOR CRED 5.25% 6/22/2009 82.31 FORD MOTOR CRED 5.25% 12/21/2009 58.00 FORD MOTOR CRED 5.25% 1/20/2010 64.00 FORD MOTOR CRED 5.25% 2/22/2011 35.27 FORD MOTOR CRED 5.25% 3/21/2011 38.00 FORD MOTOR CRED 5.25% 3/21/2011 52.00 FORD MOTOR CRED 5.30% 3/21/2011 30.00 FORD MOTOR CRED 5.30% 4/20/2011 31.76 FORD MOTOR CRED 5.35% 5/20/2009 78.62 FORD MOTOR CRED 5.35% 12/21/2009 60.00 FORD MOTOR CRED 5.35% 2/22/2011 35.14 FORD MOTOR CRED 5.40% 6/22/2009 73.74 FORD MOTOR CRED 5.40% 12/21/2009 50.00 FORD MOTOR CRED 5.40% 1/20/2011 56.39 FORD MOTOR CRED 5.40% 9/20/2011 28.00 FORD MOTOR CRED 5.40% 10/20/2011 33.39 FORD MOTOR CRED 5.45% 4/20/2011 28.68 FORD MOTOR CRED 5.50% 6/22/2009 61.00 FORD MOTOR CRED 5.50% 6/22/2009 80.50 FORD MOTOR CRED 5.50% 1/20/2010 41.15 FORD MOTOR CRED 5.50% 2/22/2010 66.72 FORD MOTOR CRED 5.50% 2/22/2010 40.66 FORD MOTOR CRED 5.50% 2/22/2010 59.17 FORD MOTOR CRED 5.50% 4/20/2011 23.80 FORD MOTOR CRED 5.50% 9/20/2011 32.50 FORD MOTOR CRED 5.50% 10/20/2011 40.73 FORD MOTOR CRED 5.55% 6/21/2010 59.95 FORD MOTOR CRED 5.55% 8/22/2011 37.00 FORD MOTOR CRED 5.55% 9/20/2011 34.00 FORD MOTOR CRED 5.60% 12/20/2010 43.00 FORD MOTOR CRED 5.60% 4/20/2011 34.00 FORD MOTOR CRED 5.60% 8/22/2011 44.63 FORD MOTOR CRED 5.60% 9/20/2011 43.25 FORD MOTOR CRED 5.60% 11/21/2011 18.38 FORD MOTOR CRED 5.60% 11/21/2011 41.00 FORD MOTOR CRED 5.65% 12/20/2010 45.00 FORD MOTOR CRED 5.65% 5/20/2011 25.00 FORD MOTOR CRED 5.65% 7/20/2011 46.91 FORD MOTOR CRED 5.65% 11/21/2011 26.42 FORD MOTOR CRED 5.65% 11/21/2011 30.50 FORD MOTOR CRED 5.70% 3/22/2010 61.35 FORD MOTOR CRED 5.70% 5/20/2011 36.23 FORD MOTOR CRED 5.70% 12/20/2011 38.00 FORD MOTOR CRED 5.75% 1/20/2010 66.83 FORD MOTOR CRED 5.75% 3/22/2010 61.86 FORD MOTOR CRED 5.75% 6/21/2010 38.00 FORD MOTOR CRED 5.75% 10/20/2010 36.00 FORD MOTOR CRED 5.75% 8/22/2011 43.55 FORD MOTOR CRED 5.75% 12/20/2011 37.07 FORD MOTOR CRED 5.75% 2/21/2012 32.00 FORD MOTOR CRED 5.80% 1/12/2009 98.75 FORD MOTOR CRED 5.80% 8/22/2011 37.00 FORD MOTOR CRED 5.85% 5/20/2010 50.00 FORD MOTOR CRED 5.85% 6/21/2010 29.40 FORD MOTOR CRED 5.85% 7/20/2010 50.00 FORD MOTOR CRED 5.90% 7/20/2011 30.78 FORD MOTOR CRED 5.90% 2/21/2012 18.20 FORD MOTOR CRED 5.95% 5/20/2010 46.00 FORD MOTOR CRED 6.00% 6/21/2010 43.04 FORD MOTOR CRED 6.00% 10/20/2010 28.50 FORD MOTOR CRED 6.00% 10/20/2010 43.00 FORD MOTOR CRED 6.00% 12/20/2010 30.50 FORD MOTOR CRED 6.00% 1/20/2012 21.73 FORD MOTOR CRED 6.00% 3/20/2014 24.26 FORD MOTOR CRED 6.00% 11/20/2014 24.75 FORD MOTOR CRED 6.05% 7/20/2010 34.02 FORD MOTOR CRED 6.05% 9/20/2010 45.00 FORD MOTOR CRED 6.05% 2/20/2014 26.50 FORD MOTOR CRED 6.05% 12/22/2014 26.25 FORD MOTOR CRED 6.05% 12/22/2014 26.00 FORD MOTOR CRED 6.05% 2/20/2015 22.50 FORD MOTOR CRED 6.10% 6/20/2011 32.00 FORD MOTOR CRED 6.10% 2/20/2015 23.08 FORD MOTOR CRED 6.15% 7/20/2010 40.31 FORD MOTOR CRED 6.15% 9/20/2010 39.28 FORD MOTOR CRED 6.15% 5/20/2011 28.34 FORD MOTOR CRED 6.20% 5/20/2011 34.00 FORD MOTOR CRED 6.20% 6/20/2011 44.70 FORD MOTOR CRED 6.20% 4/21/2014 19.27 FORD MOTOR CRED 6.20% 3/20/2015 23.28 FORD MOTOR CRED 6.25% 6/20/2011 36.50 FORD MOTOR CRED 6.25% 6/20/2011 36.10 FORD MOTOR CRED 6.25% 1/20/2015 26.33 FORD MOTOR CRED 6.30% 3/22/2010 45.78 FORD MOTOR CRED 6.30% 5/20/2010 60.00 FORD MOTOR CRED 6.30% 5/20/2014 27.01 FORD MOTOR CRED 6.35% 9/20/2010 46.23 FORD MOTOR CRED 6.35% 9/20/2010 39.00 FORD MOTOR CRED 6.40% 8/20/2010 36.79 FORD MOTOR CRED 6.50% 8/20/2010 46.30 FORD MOTOR CRED 6.50% 2/20/2015 20.82 FORD MOTOR CRED 6.50% 3/20/2015 21.67 FORD MOTOR CRED 6.55% 8/20/2010 31.00 FORD MOTOR CRED 6.65% 10/21/2013 27.32 FORD MOTOR CRED 6.65% 6/20/2014 15.33 FORD MOTOR CRED 6.75% 10/21/2013 32.24 FORD MOTOR CRED 6.75% 6/20/2014 17.50 FORD MOTOR CRED 6.80% 6/20/2014 27.00 FORD MOTOR CRED 6.80% 3/20/2015 13.54 FORD MOTOR CRED 6.85% 5/20/2014 24.75 FORD MOTOR CRED 6.85% 6/20/2014 27.00 FORD MOTOR CRED 6.95% 4/20/2010 57.13 FORD MOTOR CRED 6.95% 5/20/2014 25.32 FORD MOTOR CRED 7.00% 7/20/2010 58.65 FORD MOTOR CRED 7.00% 8/15/2012 36.00 FORD MOTOR CRED 7.05% 9/20/2013 28.40 FORD MOTOR CRED 7.10% 9/20/2010 39.00 FORD MOTOR CRED 7.15% 8/20/2010 53.00 FORD MOTOR CRED 7.15% 8/20/2010 52.00 FORD MOTOR CRED 7.25% 3/22/2010 45.00 FORD MOTOR CRED 7.38% 10/28/2009 85.72 FORD MOTOR CRED 7.40% 8/21/2017 20.76 FREESCALE SEMICO 10.13% 12/15/2016 43.01 FREMONT GEN CORP 7.88% 3/17/2009 38.50 GENCORP INC 4.00% 1/16/2024 68.45 GENERAL MOTORS 6.75% 5/1/2028 15.54 GENERAL MOTORS 7.13% 7/15/2013 23.95 GENERAL MOTORS 7.20% 1/15/2011 25.03 GENERAL MOTORS 7.38% 5/23/2048 16.97 GENERAL MOTORS 7.40% 9/1/2025 19.00 GENERAL MOTORS 7.70% 4/15/2016 20.04 GENERAL MOTORS 8.10% 6/15/2024 17.50 GENERAL MOTORS 8.25% 7/15/2023 20.00 GENERAL MOTORS 8.38% 7/15/2033 20.95 GENERAL MOTORS 8.80% 3/1/2021 18.75 GENERAL MOTORS 9.40% 7/15/2021 16.00 GENERAL MOTORS 9.45% 11/1/2011 13.38 GENWORTH FINL 6.15% 11/15/2066 9.00 GENWORTH GLOBAL 5.65% 7/15/2016 13.00 GENWORTH GLOBAL 6.10% 4/15/2033 15.00 GEORGIA GULF CRP 7.13% 12/15/2013 30.25 GEORGIA GULF CRP 9.50% 10/15/2014 31.00 GEORGIA GULF CRP 10.75% 10/15/2016 26.50 GGP LP 3.98% 4/15/2027 9.59 GMAC LLC 4.50% 4/15/2009 91.50 GMAC LLC 4.60% 4/15/2009 89.72 GMAC LLC 4.70% 5/15/2009 89.23 GMAC LLC 4.85% 5/15/2009 95.00 GMAC LLC 4.90% 10/15/2009 72.00 GMAC LLC 4.90% 10/15/2009 39.15 GMAC LLC 5.00% 8/15/2009 81.00 GMAC LLC 5.10% 7/15/2009 72.00 GMAC LLC 5.25% 5/15/2009 92.00 GMAC LLC 5.25% 6/15/2009 87.41 GMAC LLC 5.25% 7/15/2009 37.00 GMAC LLC 5.25% 8/15/2009 82.50 GMAC LLC 5.25% 11/15/2009 66.18 GMAC LLC 5.25% 1/15/2014 20.05 GMAC LLC 5.35% 6/15/2009 87.76 GMAC LLC 5.40% 5/15/2009 85.50 GMAC LLC 5.40% 6/15/2009 85.56 GMAC LLC 5.40% 12/15/2009 75.12 GMAC LLC 5.50% 6/15/2009 90.11 GMAC LLC 5.50% 1/15/2010 51.00 GMAC LLC 5.70% 6/15/2013 14.52 GMAC LLC 5.70% 10/15/2013 12.14 GMAC LLC 5.70% 12/15/2013 9.94 GMAC LLC 5.75% 1/15/2009 98.05 GMAC LLC 5.75% 1/15/2010 70.10 GMAC LLC 5.75% 1/15/2014 14.50 GMAC LLC 5.85% 2/15/2010 29.86 GMAC LLC 5.85% 6/15/2013 12.00 GMAC LLC 5.85% 6/15/2013 11.44 GMAC LLC 5.90% 1/15/2019 13.25 GMAC LLC 6.00% 4/15/2009 66.86 GMAC LLC 6.00% 1/15/2010 70.50 GMAC LLC 6.00% 12/15/2011 76.13 GMAC LLC 6.00% 9/15/2019 45.00 GMAC LLC 6.00% 9/15/2019 38.00 GMAC LLC 6.05% 8/15/2019 11.68 GMAC LLC 6.05% 10/15/2019 31.00 GMAC LLC 6.10% 4/15/2009 92.00 GMAC LLC 6.10% 4/15/2009 98.67 GMAC LLC 6.10% 11/15/2013 41.80 GMAC LLC 6.10% 9/15/2019 33.46 GMAC LLC 6.15% 4/15/2009 92.44 GMAC LLC 6.15% 3/15/2010 69.25 GMAC LLC 6.15% 9/15/2013 12.50 GMAC LLC 6.15% 11/15/2013 15.50 GMAC LLC 6.15% 12/15/2013 39.23 GMAC LLC 6.15% 8/15/2019 36.08 GMAC LLC 6.15% 9/15/2019 11.00 GMAC LLC 6.15% 10/15/2019 43.50 GMAC LLC 6.25% 5/15/2009 89.67 GMAC LLC 6.25% 6/15/2009 87.51 GMAC LLC 6.25% 7/15/2013 20.87 GMAC LLC 6.25% 10/15/2013 14.05 GMAC LLC 6.25% 7/15/2019 11.26 GMAC LLC 6.30% 10/15/2013 14.00 GMAC LLC 6.30% 8/15/2019 31.94 GMAC LLC 6.35% 7/15/2019 34.00 GMAC LLC 6.35% 7/15/2019 12.50 GMAC LLC 6.38% 6/15/2010 14.86 GMAC LLC 6.38% 1/15/2014 26.71 GMAC LLC 6.40% 11/15/2019 36.92 GMAC LLC 6.45% 2/15/2013 17.00 GMAC LLC 6.50% 6/15/2009 71.65 GMAC LLC 6.50% 10/15/2009 77.18 GMAC LLC 6.50% 3/15/2010 67.48 GMAC LLC 6.50% 5/15/2012 19.50 GMAC LLC 6.50% 7/15/2012 12.50 GMAC LLC 6.50% 2/15/2013 36.26 GMAC LLC 6.50% 6/15/2013 25.00 GMAC LLC 6.50% 8/15/2013 15.00 GMAC LLC 6.50% 11/15/2013 45.00 GMAC LLC 6.50% 11/15/2018 14.50 GMAC LLC 6.55% 12/15/2019 45.00 GMAC LLC 6.55% 12/15/2019 45.00 GMAC LLC 6.60% 6/15/2019 10.87 GMAC LLC 6.65% 10/15/2018 10.21 GMAC LLC 6.65% 2/15/2020 15.00 GMAC LLC 6.70% 6/15/2009 39.50 GMAC LLC 6.70% 5/15/2014 10.91 GMAC LLC 6.70% 5/15/2014 28.50 GMAC LLC 6.75% 9/15/2011 46.13 GMAC LLC 6.75% 10/15/2012 14.00 GMAC LLC 6.75% 4/15/2013 14.00 GMAC LLC 6.75% 4/15/2013 14.00 GMAC LLC 6.75% 6/15/2014 13.75 GMAC LLC 6.75% 12/1/2014 64.00 GMAC LLC 6.75% 3/15/2018 10.60 GMAC LLC 6.75% 11/15/2018 12.91 GMAC LLC 6.75% 6/15/2019 39.25 GMAC LLC 6.75% 6/15/2019 26.87 GMAC LLC 6.80% 7/15/2009 74.17 GMAC LLC 6.80% 11/15/2009 35.00 GMAC LLC 6.80% 12/15/2009 20.89 GMAC LLC 6.85% 7/15/2009 80.00 GMAC LLC 6.85% 10/15/2009 80.25 GMAC LLC 6.90% 6/15/2017 28.22 GMAC LLC 6.95% 6/15/2017 36.14 GMAC LLC 7.00% 8/15/2009 78.09 GMAC LLC 7.00% 9/15/2009 38.00 GMAC LLC 7.00% 10/15/2009 68.05 GMAC LLC 7.00% 10/15/2009 42.00 GMAC LLC 7.00% 11/15/2009 67.77 GMAC LLC 7.00% 11/15/2009 67.03 GMAC LLC 7.00% 1/15/2010 50.53 GMAC LLC 7.00% 3/15/2010 54.90 GMAC LLC 7.00% 10/15/2012 27.00 GMAC LLC 7.00% 2/15/2018 10.61 GMAC LLC 7.13% 8/15/2009 77.00 GMAC LLC 7.15% 8/15/2010 27.00 GMAC LLC 7.15% 11/15/2012 15.50 GMAC LLC 7.20% 8/15/2009 66.75 GMAC LLC 7.25% 9/15/2017 37.00 GMAC LLC 7.55% 8/15/2010 30.00 GMAC LLC 7.70% 8/15/2010 54.50 GMAC LLC 7.70% 8/15/2010 35.00 GMAC LLC 7.85% 8/15/2010 56.24 GMAC LLC 7.88% 11/15/2012 15.50 GMAC LLC 8.00% 6/15/2010 16.25 GMAC LLC 8.00% 6/15/2010 59.90 GMAC LLC 8.00% 6/15/2010 60.35 GMAC LLC 8.00% 7/15/2010 63.49 GMAC LLC 8.00% 9/15/2010 30.00 GMAC LLC 8.00% 8/15/2015 16.00 GMAC LLC 8.00% 10/15/2017 16.50 GMAC LLC 8.00% 11/15/2017 22.63 GMAC LLC 8.05% 4/15/2010 66.97 GMAC LLC 8.13% 9/15/2009 82.30 GMAC LLC 8.20% 7/15/2010 60.00 GMAC LLC 8.25% 9/15/2012 20.27 GMAC LLC 8.40% 4/15/2010 55.00 GMAC LLC 8.40% 8/15/2015 15.10 GMAC LLC 8.40% 8/15/2015 25.10 GMAC LLC 8.50% 5/15/2010 69.00 GMAC LLC 8.50% 10/15/2010 54.35 GMAC LLC 8.50% 8/15/2015 17.00 GMAC LLC 8.65% 8/15/2015 14.00 GMAC LLC 8.88% 6/1/2010 65.00 GMAC LLC 9.00% 7/15/2020 27.00 GRAPHIC PACKAGE 8.63% 2/15/2012 37.63 HAIGHTS CROSS OP 11.75% 8/15/2011 34.25 HARRAHS OPER CO 5.38% 12/15/2013 24.45 HARRAHS OPER CO 5.50% 7/1/2010 63.00 HARRAHS OPER CO 5.63% 6/1/2015 18.00 HARRAHS OPER CO 5.75% 10/1/2017 14.00 HARRAHS OPER CO 6.50% 6/1/2016 13.25 HARRAHS OPER CO 7.50% 1/15/2009 98.93 HARRAHS OPER CO 8.00% 2/1/2011 36.00 HARRAHS OPER CO 10.75% 2/1/2016 27.88 HARRY & DAVID OP 9.00% 3/1/2013 32.50 HAWAIIAN TELCOM 9.75% 5/1/2013 10.00 HAWAIIAN TELCOM 12.50% 5/1/2015 1.63 HAWKER BEECHCRAF 9.75% 4/1/2017 26.01 HEADWATERS INC 2.88% 6/1/2016 47.55 HERTZ CORP 6.35% 6/15/2010 69.00 HERTZ CORP 7.40% 3/1/2011 42.00 HERTZ CORP 7.63% 6/1/2012 44.00 HERTZ CORP 9.00% 11/1/2009 100.00 HEXION US/NOVA 9.75% 11/15/2014 22.00 HILTON HOTELS 7.50% 12/15/2017 11.02 HINES NURSERIES 10.25% 10/1/2011 27.10 HUMAN GENOME 2.25% 10/15/2011 31.00 HUMAN GENOME 2.25% 8/15/2012 24.94 HUTCHINSON TECH 3.25% 1/15/2026 27.50 IDEARC INC 8.00% 11/15/2016 7.75 IDEARC INC 8.00% 11/15/2016 8.75 INDALEX HOLD 11.50% 2/1/2014 10.88 INN OF THE MOUNT 12.00% 11/15/2010 39.63 INTCOMEX INC 11.75% 1/15/2011 47.75 INTL LEASE FIN 6.38% 3/15/2009 98.99 ISOLAGEN INC 3.50% 11/1/2024 15.00 ISTAR FINANCIAL 4.88% 1/15/2009 97.00 ISTAR FINANCIAL 5.13% 4/1/2011 41.95 ISTAR FINANCIAL 5.13% 4/1/2011 38.50 ISTAR FINANCIAL 5.15% 3/1/2012 39.00 ISTAR FINANCIAL 5.38% 4/15/2010 58.70 ISTAR FINANCIAL 5.50% 6/15/2012 32.00 ISTAR FINANCIAL 5.65% 9/15/2011 36.70 ISTAR FINANCIAL 5.80% 3/15/2011 31.00 ISTAR FINANCIAL 5.95% 10/15/2013 23.40 ISTAR FINANCIAL 6.00% 12/15/2010 49.00 ISTAR FINANCIAL 6.50% 12/15/2013 29.50 ISTAR FINANCIAL 8.63% 6/1/2013 37.25 JAZZ TECHNOLOGIE 8.00% 12/31/2011 20.06 JEFFERSON SMURFI 7.50% 6/1/2013 18.06 JEFFERSON SMURFI 8.25% 10/1/2012 20.88 K HOVNANIAN ENTR 6.25% 1/15/2015 24.94 K HOVNANIAN ENTR 6.38% 12/15/2014 27.25 K HOVNANIAN ENTR 6.50% 1/15/2014 26.13 K HOVNANIAN ENTR 7.50% 5/15/2016 23.50 K HOVNANIAN ENTR 7.75% 5/15/2013 21.00 K HOVNANIAN ENTR 8.00% 4/1/2012 28.88 K HOVNANIAN ENTR 8.63% 1/15/2017 25.06 K HOVNANIAN ENTR 8.88% 4/1/2012 30.20 KAR HOLDINGS 10.00% 5/1/2015 31.00 KELLWOOD CO 7.63% 10/15/2017 10.00 KELLWOOD CO 7.88% 7/15/2009 45.00 KEMET CORP 2.25% 11/15/2026 18.50 KEYSTONE AUTO OP 9.75% 11/1/2013 38.50 KNIGHT RIDDER 4.63% 11/1/2014 15.13 KNIGHT RIDDER 5.75% 9/1/2017 12.00 KNIGHT RIDDER 6.88% 3/15/2029 12.50 KNIGHT RIDDER 7.13% 6/1/2011 22.88 KNIGHT RIDDER 7.15% 11/1/2027 20.00 KNIGHT RIDDER 9.88% 4/15/2009 90.00 LANDAMERICA 3.13% 11/15/2033 16.00 LANDAMERICA 3.25% 5/15/2034 16.00 LAZYDAYS RV 11.75% 5/15/2012 11.88 LEAR CORP 8.50% 12/1/2013 39.00 LEHMAN BROS HLDG 3.95% 11/10/2009 8.00 LEHMAN BROS HLDG 4.00% 8/3/2009 6.00 LEHMAN BROS HLDG 4.00% 4/16/2019 2.00 LEHMAN BROS HLDG 4.25% 1/27/2010 8.50 LEHMAN BROS HLDG 4.38% 11/30/2010 7.75 LEHMAN BROS HLDG 4.50% 7/26/2010 6.77 LEHMAN BROS HLDG 4.50% 8/3/2011 9.35 LEHMAN BROS HLDG 4.70% 3/6/2013 1.05 LEHMAN BROS HLDG 4.80% 2/27/2013 2.00 LEHMAN BROS HLDG 4.80% 3/13/2014 9.43 LEHMAN BROS HLDG 4.80% 6/24/2023 1.11 LEHMAN BROS HLDG 5.00% 1/14/2011 5.87 LEHMAN BROS HLDG 5.00% 1/22/2013 3.38 LEHMAN BROS HLDG 5.00% 2/11/2013 4.56 LEHMAN BROS HLDG 5.00% 3/27/2013 2.00 LEHMAN BROS HLDG 5.00% 6/26/2015 4.25 LEHMAN BROS HLDG 5.00% 8/5/2015 4.50 LEHMAN BROS HLDG 5.00% 12/18/2015 3.25 LEHMAN BROS HLDG 5.00% 5/28/2023 4.00 LEHMAN BROS HLDG 5.00% 5/30/2023 2.06 LEHMAN BROS HLDG 5.00% 6/10/2023 1.44 LEHMAN BROS HLDG 5.00% 6/17/2023 1.67 LEHMAN BROS HLDG 5.10% 1/28/2013 1.89 LEHMAN BROS HLDG 5.10% 2/15/2020 2.02 LEHMAN BROS HLDG 5.20% 5/13/2020 1.14 LEHMAN BROS HLDG 5.25% 2/6/2012 10.00 LEHMAN BROS HLDG 5.25% 2/11/2015 2.22 LEHMAN BROS HLDG 5.25% 3/8/2020 1.67 LEHMAN BROS HLDG 5.25% 5/20/2023 1.34 LEHMAN BROS HLDG 5.35% 2/25/2018 1.81 LEHMAN BROS HLDG 5.35% 3/13/2020 4.56 LEHMAN BROS HLDG 5.35% 6/14/2030 1.11 LEHMAN BROS HLDG 5.38% 5/6/2023 4.60 LEHMAN BROS HLDG 5.40% 3/6/2020 4.56 LEHMAN BROS HLDG 5.40% 3/20/2020 4.67 LEHMAN BROS HLDG 5.40% 3/30/2029 4.56 LEHMAN BROS HLDG 5.40% 6/21/2030 2.22 LEHMAN BROS HLDG 5.45% 3/15/2025 2.33 LEHMAN BROS HLDG 5.45% 4/6/2029 2.00 LEHMAN BROS HLDG 5.45% 2/22/2030 2.08 LEHMAN BROS HLDG 5.45% 7/19/2030 1.40 LEHMAN BROS HLDG 5.45% 9/20/2030 5.97 LEHMAN BROS HLDG 5.50% 4/4/2016 8.25 LEHMAN BROS HLDG 5.50% 2/4/2018 2.33 LEHMAN BROS HLDG 5.50% 2/19/2018 4.50 LEHMAN BROS HLDG 5.50% 11/4/2018 1.02 LEHMAN BROS HLDG 5.50% 2/27/2020 1.00 LEHMAN BROS HLDG 5.50% 8/19/2020 1.10 LEHMAN BROS HLDG 5.50% 3/14/2023 2.85 LEHMAN BROS HLDG 5.50% 4/8/2023 5.00 LEHMAN BROS HLDG 5.50% 4/15/2023 2.78 LEHMAN BROS HLDG 5.50% 4/23/2023 1.15 LEHMAN BROS HLDG 5.50% 8/5/2023 5.25 LEHMAN BROS HLDG 5.50% 10/7/2023 1.68 LEHMAN BROS HLDG 5.50% 1/27/2029 8.00 LEHMAN BROS HLDG 5.50% 2/3/2029 7.06 LEHMAN BROS HLDG 5.50% 8/2/2030 1.10 LEHMAN BROS HLDG 5.55% 2/11/2018 1.00 LEHMAN BROS HLDG 5.55% 3/9/2029 3.18 LEHMAN BROS HLDG 5.55% 1/25/2030 3.21 LEHMAN BROS HLDG 5.55% 9/27/2030 2.05 LEHMAN BROS HLDG 5.55% 12/31/2034 3.50 LEHMAN BROS HLDG 5.60% 1/22/2018 3.44 LEHMAN BROS HLDG 5.60% 9/23/2023 10.00 LEHMAN BROS HLDG 5.60% 2/17/2029 3.00 LEHMAN BROS HLDG 5.60% 2/24/2029 4.75 LEHMAN BROS HLDG 5.60% 3/2/2029 2.44 LEHMAN BROS HLDG 5.60% 2/25/2030 1.85 LEHMAN BROS HLDG 5.60% 5/3/2030 1.35 LEHMAN BROS HLDG 5.63% 1/24/2013 10.00 LEHMAN BROS HLDG 5.63% 3/15/2030 3.15 LEHMAN BROS HLDG 5.65% 11/23/2029 2.67 LEHMAN BROS HLDG 5.65% 8/16/2030 1.05 LEHMAN BROS HLDG 5.65% 12/31/2034 1.50 LEHMAN BROS HLDG 5.70% 1/28/2018 2.40 LEHMAN BROS HLDG 5.70% 2/10/2029 1.56 LEHMAN BROS HLDG 5.70% 4/13/2029 2.22 LEHMAN BROS HLDG 5.70% 9/7/2029 4.50 LEHMAN BROS HLDG 5.70% 12/14/2029 1.64 LEHMAN BROS HLDG 5.75% 4/25/2011 7.50 LEHMAN BROS HLDG 5.75% 7/18/2011 8.25 LEHMAN BROS HLDG 5.75% 5/17/2013 7.00 LEHMAN BROS HLDG 5.75% 3/27/2023 3.90 LEHMAN BROS HLDG 5.75% 10/15/2023 2.13 LEHMAN BROS HLDG 5.75% 10/21/2023 2.25 LEHMAN BROS HLDG 5.75% 11/12/2023 2.10 LEHMAN BROS HLDG 5.75% 11/25/2023 1.10 LEHMAN BROS HLDG 5.75% 12/16/2028 4.35 LEHMAN BROS HLDG 5.75% 12/23/2028 2.83 LEHMAN BROS HLDG 5.75% 8/24/2029 1.40 LEHMAN BROS HLDG 5.75% 9/14/2029 3.00 LEHMAN BROS HLDG 5.75% 10/12/2029 2.00 LEHMAN BROS HLDG 5.75% 3/29/2030 3.00 LEHMAN BROS HLDG 5.80% 9/3/2020 2.57 LEHMAN BROS HLDG 5.80% 10/25/2030 2.50 LEHMAN BROS HLDG 5.85% 11/8/2030 3.58 LEHMAN BROS HLDG 5.88% 11/15/2017 8.00 LEHMAN BROS HLDG 5.90% 5/4/2029 2.22 LEHMAN BROS HLDG 5.90% 2/7/2031 2.05 LEHMAN BROS HLDG 5.95% 12/20/2030 2.29 LEHMAN BROS HLDG 6.00% 7/19/2012 9.25 LEHMAN BROS HLDG 6.00% 1/22/2020 2.00 LEHMAN BROS HLDG 6.00% 2/12/2020 2.18 LEHMAN BROS HLDG 6.00% 1/29/2021 2.06 LEHMAN BROS HLDG 6.00% 10/23/2028 2.37 LEHMAN BROS HLDG 6.00% 11/18/2028 2.44 LEHMAN BROS HLDG 6.00% 5/11/2029 3.18 LEHMAN BROS HLDG 6.00% 7/20/2029 2.22 LEHMAN BROS HLDG 6.00% 4/30/2034 3.25 LEHMAN BROS HLDG 6.00% 7/30/2034 1.67 LEHMAN BROS HLDG 6.00% 2/21/2036 1.44 LEHMAN BROS HLDG 6.00% 2/24/2036 1.55 LEHMAN BROS HLDG 6.00% 2/12/2037 4.00 LEHMAN BROS HLDG 6.05% 6/29/2029 1.12 LEHMAN BROS HLDG 6.10% 8/12/2023 5.75 LEHMAN BROS HLDG 6.15% 4/11/2031 3.43 LEHMAN BROS HLDG 6.20% 9/26/2014 11.00 LEHMAN BROS HLDG 6.20% 6/15/2027 4.16 LEHMAN BROS HLDG 6.20% 5/25/2029 2.38 LEHMAN BROS HLDG 6.25% 2/5/2021 2.50 LEHMAN BROS HLDG 6.25% 2/22/2023 1.70 LEHMAN BROS HLDG 6.30% 3/27/2037 1.10 LEHMAN BROS HLDG 6.40% 10/11/2022 5.50 LEHMAN BROS HLDG 6.40% 12/19/2036 9.75 LEHMAN BROS HLDG 6.50% 2/28/2023 4.13 LEHMAN BROS HLDG 6.50% 3/6/2023 1.50 LEHMAN BROS HLDG 6.50% 9/20/2027 4.00 LEHMAN BROS HLDG 6.50% 10/18/2027 2.75 LEHMAN BROS HLDG 6.50% 10/25/2027 1.00 LEHMAN BROS HLDG 6.50% 11/15/2032 7.06 LEHMAN BROS HLDG 6.50% 1/17/2033 2.89 LEHMAN BROS HLDG 6.50% 12/22/2036 8.75 LEHMAN BROS HLDG 6.50% 2/13/2037 2.00 LEHMAN BROS HLDG 6.50% 6/21/2037 2.22 LEHMAN BROS HLDG 6.50% 7/13/2037 5.50 LEHMAN BROS HLDG 6.60% 10/3/2022 4.00 LEHMAN BROS HLDG 6.60% 6/18/2027 6.00 LEHMAN BROS HLDG 6.63% 1/18/2012 6.50 LEHMAN BROS HLDG 6.63% 7/27/2027 3.50 LEHMAN BROS HLDG 6.75% 12/28/2017 1.00 LEHMAN BROS HLDG 6.75% 7/1/2022 2.46 LEHMAN BROS HLDG 6.75% 11/22/2027 3.00 LEHMAN BROS HLDG 6.75% 3/11/2033 2.00 LEHMAN BROS HLDG 6.75% 10/26/2037 3.18 LEHMAN BROS HLDG 6.80% 9/7/2032 3.00 LEHMAN BROS HLDG 6.85% 8/16/2032 2.24 LEHMAN BROS HLDG 6.85% 8/23/2032 1.90 LEHMAN BROS HLDG 6.88% 5/2/2018 9.55 LEHMAN BROS HLDG 6.88% 7/17/2037 1.00 LEHMAN BROS HLDG 6.90% 9/1/2032 2.80 LEHMAN BROS HLDG 6.90% 6/20/2036 7.50 LEHMAN BROS HLDG 7.00% 5/12/2023 2.10 LEHMAN BROS HLDG 7.00% 9/27/2027 10.00 LEHMAN BROS HLDG 7.00% 10/4/2032 2.22 LEHMAN BROS HLDG 7.00% 7/27/2037 4.00 LEHMAN BROS HLDG 7.00% 9/28/2037 4.00 LEHMAN BROS HLDG 7.00% 11/16/2037 3.00 LEHMAN BROS HLDG 7.00% 12/28/2037 2.70 LEHMAN BROS HLDG 7.00% 1/31/2038 2.08 LEHMAN BROS HLDG 7.00% 2/1/2038 3.56 LEHMAN BROS HLDG 7.00% 2/7/2038 3.55 LEHMAN BROS HLDG 7.00% 2/8/2038 3.00 LEHMAN BROS HLDG 7.00% 4/22/2038 3.00 LEHMAN BROS HLDG 7.05% 2/27/2038 3.50 LEHMAN BROS HLDG 7.25% 2/27/2038 3.00 LEHMAN BROS HLDG 7.25% 4/29/2038 2.87 LEHMAN BROS HLDG 7.35% 5/6/2038 4.75 LEHMAN BROS HLDG 7.73% 10/15/2023 4.00 LEHMAN BROS HLDG 7.88% 11/1/2009 9.95 LEHMAN BROS HLDG 7.88% 8/15/2010 7.90 LEHMAN BROS HLDG 8.00% 3/17/2023 8.63 LEHMAN BROS HLDG 8.05% 1/15/2019 4.56 LEHMAN BROS HLDG 8.50% 8/1/2015 7.00 LEHMAN BROS HLDG 8.50% 6/15/2022 5.25 LEHMAN BROS HLDG 8.75% 12/21/2021 1.12 LEHMAN BROS HLDG 8.75% 2/6/2023 4.00 LEHMAN BROS HLDG 8.80% 3/1/2015 6.00 LEHMAN BROS HLDG 8.92% 2/16/2017 7.00 LEHMAN BROS HLDG 9.50% 12/28/2022 2.25 LEHMAN BROS HLDG 9.50% 1/30/2023 2.00 LEHMAN BROS HLDG 9.50% 2/27/2023 5.15 LEHMAN BROS HLDG 10.00% 3/13/2023 4.00 LEHMAN BROS HLDG 10.38% 5/24/2024 2.10 LEHMAN BROS HLDG 11.00% 10/25/2017 2.00 LEHMAN BROS HLDG 11.00% 6/22/2022 4.15 LEHMAN BROS HLDG 11.00% 3/17/2028 9.70 LEHMAN BROS HLDG 11.50% 9/26/2022 4.75 LEHMAN BROS HLDG 12.12% 9/11/2009 8.63 LEHMAN BROS HLDG 18.00% 7/14/2023 4.25 LEHMAN BROS INC 7.50% 8/1/2026 1.00 LEVEL 3 COMM INC 5.25% 12/15/2011 40.50 LEVEL 3 COMM INC 6.00% 3/15/2010 71.75 LIFECARE HOLDING 9.25% 8/15/2013 39.75 LITHIA MOTORS 2.88% 5/1/2014 83.50 LOCAL INSIGHT 11.00% 12/1/2017 25.00 MAGMA DESIGN 2.00% 5/15/2010 57.75 MAGNA ENTERTAINM 7.25% 12/15/2009 31.50 MAGNA ENTERTAINM 8.55% 6/15/2010 40.13 MAJESTIC STAR 9.50% 10/15/2010 30.00 MAJESTIC STAR 9.75% 1/15/2011 1.15 MANDALAY RESORTS 9.38% 2/15/2010 75.30 MASONITE CORP 11.00% 4/6/2015 8.50 MERISANT CO 9.50% 7/15/2013 5.90 MERISANT CO 9.50% 7/15/2013 13.13 MERIX CORP 4.00% 5/15/2013 25.25 MERRILL LYNCH 4.13% 1/15/2009 100.01 MERRILL LYNCH 7.41% 3/9/2011 83.00 MERRILL LYNCH 12.00% 3/26/2010 18.46 METALDYNE CORP 10.00% 11/1/2013 20.75 METALDYNE CORP 11.00% 6/15/2012 12.33 MGM MIRAGE 8.38% 2/1/2011 62.50 MICHAELS STORES 11.38% 11/1/2016 36.55 MILLENNIUM AMER 7.63% 11/15/2026 3.25 MOMENTIVE PERFOR 11.50% 12/1/2016 29.50 MORRIS PUBLISH 7.00% 8/1/2013 8.00 MTR GAMING GROUP 9.00% 6/1/2012 45.13 MUZAK LLC 9.88% 3/15/2009 87.10 MUZAK LLC/FIN 10.00% 2/15/2009 79.50 NATL FINANCIAL 0.75% 2/1/2012 18.00 NAVISTAR FINL CP 4.75% 4/1/2009 88.00 NEBRASKA BOOK CO 8.63% 3/15/2012 45.00 NEFF CORP 10.00% 6/1/2015 15.00 NELNET INC 5.13% 6/1/2010 58.50 NELNET INC 7.40% 9/29/2036 10.00 NETWORK COMMUNIC 10.75% 12/1/2013 27.01 NEW PAGE CORP 10.00% 5/1/2012 39.88 NEW PLAN EXCEL 4.50% 2/1/2011 26.50 NEW PLAN EXCEL 5.13% 9/15/2012 25.00 NEW PLAN EXCEL 7.40% 9/15/2009 30.69 NEW PLAN EXCEL 7.50% 7/30/2029 8.00 NEW PLAN REALTY 6.90% 2/15/2028 9.73 NEW PLAN REALTY 7.65% 11/2/2026 12.00 NEW PLAN REALTY 7.68% 11/2/2026 6.00 NEW PLAN REALTY 7.97% 8/14/2026 7.00 NEWARK GROUP INC 9.75% 3/15/2014 5.00 NEWPAGE CORP 10.00% 5/1/2012 41.00 NEWPAGE CORP 12.00% 5/1/2013 25.00 NORTEK INC 8.50% 9/1/2014 23.00 NORTH ATL TRADNG 9.25% 3/1/2012 36.25 NORTHERN TEL CAP 7.88% 6/15/2026 12.45 NTK HOLDINGS INC 0.00% 3/1/2014 21.38 NUVEEN INVEST 5.00% 9/15/2010 48.00 NUVEEN INVEST 5.50% 9/15/2015 15.50 NUVEEN INVESTM 10.50% 11/15/2015 22.00 OLIN CORP 6.75% 6/15/2016 9.75 OLIN CORP 9.13% 12/15/2011 25.50 OSCIENT PHARM 3.50% 4/15/2011 9.25 OSI RESTAURANT 10.00% 6/15/2015 22.00 OSI RESTAURANT 10.00% 6/15/2015 25.50 PALM HARBOR 3.25% 5/15/2024 35.00 PANOLAM INDUSTRI 10.75% 10/1/2013 34.88 PARK PLACE ENT 7.50% 9/1/2009 35.10 PARK PLACE ENT 7.88% 3/15/2010 65.50 PARK PLACE ENT 8.13% 5/15/2011 48.38 PARK PLACE ENT 8.13% 5/15/2011 49.00 PHIBRO ANIMAL 13.00% 8/1/2014 38.63 PILGRIM'S PRIDE 8.38% 5/1/2017 4.00 PILGRIMS PRIDE 9.25% 11/15/2013 1.00 PINNACLE AIRLINE 3.25% 2/15/2025 66.50 PLIANT CORP 11.13% 9/1/2009 16.13 PLY GEM INDS 9.00% 2/15/2012 17.00 POPE & TALBOT 8.38% 6/1/2013 1.00 POWERWAVE TECH 1.88% 11/15/2024 19.77 POWERWAVE TECH 3.88% 10/1/2027 19.21 PREGIS CORP 12.38% 10/15/2013 40.50 PRESIDENTIAL LFE 7.88% 2/15/2009 95.00 PRIMUS TELECOM 3.75% 9/15/2010 4.00 PRIMUS TELECOM 8.00% 1/15/2014 6.96 PRIMUS TELECOM 12.75% 10/15/2009 2.00 PRIMUS TELECOMM 14.25% 5/20/2011 15.50 PROLOGIS 7.88% 5/15/2009 57.00 PROVIDENCE SERV 6.50% 5/15/2014 17.50 QUALITY DISTRIBU 9.00% 11/15/2010 15.00 QUANTUM CORP 4.38% 8/1/2010 41.45 RADIAN GROUP 7.75% 6/1/2011 42.38 RADIAN GROUP 7.75% 6/1/2011 45.09 RADIO ONE INC 8.88% 7/1/2011 51.00 RAFAELLA APPAREL 11.25% 6/15/2011 39.50 RAIT FINANCIAL 6.88% 4/15/2027 33.31 RATHGIBSON INC 11.25% 2/15/2014 22.25 RAYOVAC CORP 8.50% 10/1/2013 8.70 READER'S DIGEST 9.00% 2/15/2017 7.63 REALOGY CORP 10.50% 4/15/2014 12.67 REALOGY CORP 12.38% 4/15/2015 14.00 REEBOK INTL LTD 2.00% 5/1/2024 67.00 RESIDENTIAL CAP 8.00% 2/22/2011 10.00 RESIDENTIAL CAP 8.38% 6/30/2010 28.25 RESIDENTIAL CAP 8.38% 6/30/2010 20.50 RESIDENTIAL CAP 8.50% 6/1/2012 14.50 RESIDENTIAL CAP 8.50% 4/17/2013 14.00 RESIDENTIAL CAP 8.88% 6/30/2015 14.50 RESIDENTIAL CAP 8.88% 6/30/2015 14.75 RESIDENTIAL CAP 8.50% 5/15/2010 35.00 REXNORD CORP 10.13% 12/15/2012 11.50 RH DONNELLEY 6.88% 1/15/2013 12.25 RH DONNELLEY 6.88% 1/15/2013 12.50 RH DONNELLEY 6.88% 1/15/2013 13.13 RH DONNELLEY 8.88% 1/15/2016 19.17 RH DONNELLEY 8.88% 10/15/2017 14.25 RH DONNELLEY 8.88% 10/15/2017 14.00 RH DONNELLEY INC 11.75% 5/15/2015 24.63 RITE AID CORP 6.88% 8/15/2013 25.00 RITE AID CORP 7.70% 2/15/2027 14.00 RITE AID CORP 8.13% 5/1/2010 90.00 RITE AID CORP 8.50% 5/15/2015 24.00 RITE AID CORP 9.25% 6/1/2013 32.75 RJ TOWER CORP 12.00% 6/1/2013 2.50 ROTECH HEALTHCA 9.50% 4/1/2012 21.00 ROUSE CO LP/TRC 6.75% 5/1/2013 35.38 ROUSE COMPANY 3.63% 3/15/2009 50.25 ROUSE COMPANY 7.20% 9/15/2012 30.00 ROUSE COMPANY 8.00% 4/30/2009 40.50 SABRE HOLDINGS 8.35% 3/15/2016 20.12 SABRE HOLDINGS 7.35% 8/1/2011 27.96 SCOTIA PAC CO 7.11% 1/20/2014 28.50 SEARS ROEBUCK AC 6.70% 4/15/2012 60.62 SEITEL INC 9.75% 2/15/2014 34.81 SEQUA CORP 11.75% 12/1/2015 36.13 SERVICEMASTER CO 7.25% 3/1/2038 19.00 SIMMONS CO 7.88% 1/15/2014 29.50 SINCLAIR BROAD 3.00% 5/15/2027 54.05 SIRIUS SATELLITE 2.50% 2/15/2009 80.50 SIRIUS SATELLITE 3.25% 10/15/2011 18.17 SIRIUS SATELLITE 9.63% 8/1/2013 20.34 SIX FLAGS INC 4.50% 5/15/2015 9.00 SIX FLAGS INC 8.88% 2/1/2010 14.75 SIX FLAGS INC 9.63% 6/1/2014 11.76 SIX FLAGS INC 9.75% 4/15/2013 15.00 SMURFIT-STONE 8.00% 3/15/2017 21.22 SONIC AUTOMOTIVE 5.25% 5/7/2009 93.00 SONIC AUTOMOTIVE 8.63% 8/15/2013 38.00 SPACEHAB INC 5.50% 10/15/2010 58.20 SPANSION LLC 2.25% 6/15/2016 6.13 SPECTRUM BRANDS 7.38% 2/1/2015 19.25 STALLION OILFIEL 9.75% 2/1/2015 24.63 STANLEY-MARTIN 9.75% 8/15/2015 28.00 STATION CASINOS 6.00% 4/1/2012 18.00 STATION CASINOS 6.50% 2/1/2014 6.00 STATION CASINOS 6.63% 3/15/2018 8.00 STATION CASINOS 6.88% 3/1/2016 5.63 STATION CASINOS 7.75% 8/15/2016 19.00 STONE CONTAINER 8.38% 7/1/2012 18.45 SUNGARD DATA SYS 3.75% 1/15/2009 99.25 SWIFT TRANS CO 12.50% 5/15/2017 8.50 TEKNI-PLEX INC 12.75% 6/15/2010 73.25 TERPHANE HLDING 12.50% 6/15/2009 79.13 TERPHANE HLDING 12.50% 6/15/2009 79.13 THORNBURG MTG 8.00% 5/15/2013 20.00 THORNBURG MTGE 12.00% 3/31/2015 5.38 TIMES MIRROR CO 6.61% 9/15/2027 5.00 TIMES MIRROR CO 7.25% 3/1/2013 4.50 TIMES MIRROR CO 7.25% 11/15/2096 2.00 TIMES MIRROR CO 7.50% 7/1/2023 2.00 TOUSA INC 9.00% 7/1/2010 1.00 TOYS R US 7.63% 8/1/2011 47.00 TRANS-LUX CORP 8.25% 3/1/2012 35.00 TRANSMERIDIAN EX 12.00% 12/15/2010 35.50 TRAVELPORT LLC 9.88% 9/1/2014 37.25 TRAVELPORT LLC 11.88% 9/1/2016 28.00 TRAVELPORT LLC 11.88% 9/1/2016 33.50 TRIBUNE CO 4.88% 8/15/2010 6.28 TRIBUNE CO 5.25% 8/15/2015 4.50 TRIBUNE CO 5.67% 12/8/2008 2.00 TRONOX WORLDWIDE 9.50% 12/1/2012 10.00 TRUE TEMPER 8.38% 9/15/2011 34.00 TRUMP ENTERTNMNT 8.50% 6/1/2015 8.00 UAL CORP 5.00% 2/1/2021 50.50 UNISYS CORP 6.88% 3/15/2010 52.00 UNISYS CORP 8.00% 10/15/2012 31.00 UNISYS CORP 8.50% 10/15/2015 35.00 UNISYS CORP 12.50% 1/15/2016 33.17 UNITED MERCH&MFG 3.50% 3/31/2022 1.00 UNIV CITY DEVEL 11.75% 4/1/2010 63.50 UNIV CITY FL HLD 8.38% 5/1/2010 46.00 UNIVISION COMM 7.85% 7/15/2011 52.56 UNO RESTAURANT 10.00% 2/15/2011 43.63 US LEASING INTL 6.00% 9/6/2011 14.20 US SHIPPING PART 13.00% 8/15/2014 25.88 USFREIGHTWAYS 8.50% 4/15/2010 50.00 VALASSIS COMM 6.63% 1/15/2009 99.00 VALASSIS COMM 8.25% 3/1/2015 27.00 VALASSIS COMM 8.25% 3/1/2015 27.00 VENOCO INC 8.75% 12/15/2011 47.00 VERASUN ENERGY 9.38% 6/1/2017 11.50 VERSO PAPER 11.38% 8/1/2016 29.75 VESTA INSUR GRP 8.75% 7/15/2025 1.00 VIRGIN RIVER CAS 9.00% 1/15/2012 43.75 VISTEON CORP 7.00% 3/10/2014 12.25 VISTEON CORP 8.25% 8/1/2010 27.00 VITESSE SEMICOND 1.50% 10/1/2024 51.00 WASH MUT BANK NV 5.55% 6/16/2010 19.50 WASH MUT BANK NV 5.95% 5/20/2013 0.01 WASH MUTUAL INC 4.20% 1/15/2010 67.00 WASH MUTUAL INC 4.63% 4/1/2014 21.00 WASH MUTUAL INC 7.25% 11/1/2017 22.00 WASH MUTUAL INC 8.25% 4/1/2010 21.75 WCI COMMUNITIES 4.00% 8/5/2023 8.13 WCI COMMUNITIES 6.63% 3/15/2015 9.00 WCI COMMUNITIES 7.88% 10/1/2013 6.31 WELLS FARGO CO 3.55% 5/1/2009 89.00 WILLIAM LYON 7.50% 2/15/2014 15.00 WILLIAM LYON 7.63% 12/15/2012 30.50 WILLIAM LYON 7.63% 12/15/2012 9.93 WILLIAM LYON 10.75% 4/1/2013 33.63 WIMAR OP LLC/FIN 9.63% 12/15/2014 0.94 WOLVERINE TUBE 10.50% 4/1/2009 84.00 XM SATELLITE 10.00% 12/1/2009 37.38 XM SATELLITE 13.00% 8/1/2013 23.75 YOUNG BROADCSTNG 8.75% 1/15/2014 2.08 YOUNG BROADCSTNG 10.00% 3/1/2011 1.00 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. 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 2009. 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 ***