/raid1/www/Hosts/bankrupt/TCR_Public/090121.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, January 21, 2009, Vol. 13, No. 20
Headlines
ACCENTIA BIOPHARMACEUTICALS: U.S. Trustee Appoints 5-Member Panel
ACCENTIA BIOPHARMACEUTICALS: Files Schedules of Assets and Debts
ACTIGA CORPORATION: Steve Bajic Resigns from Board of Directors
ADVANCED GROWING: Auditor Raises Going Concern Doubt
AMERICAN INT'L: Names Monika Machon as Chief Investment Officer
AMERICAN INT'L: Win Neuger to Leave Chief Investment Officer Post
AMERICAN INT'L: Bally Total to Maintain Insurance Program
AMACORE GROUP: Inks Securities Purchase Deal with Vicis Capital
AMACORE GROUP: Sells 400 Shares of Pref. Stock to Vicis Capital
APEX SILVER: Wants Court to Set February 19 as Claims Bar Date
APEX SILVER: Files Disclosure Statement and Chapter 11 Plan
APEX SILVER: Seeks to Employ Jefferies as Financial Advisors
APEX SILVER: Seeks to Employ Walkers as Cayman Counsel
APEX SILVER: Seeks to Hire Davis Graham as Special Corp. Counsel
ASARCO: Inks $3MM Pact Relating to Missouri Superfund Site Cleanup
ASARCO LLC: Asks Court to Disallow 7 Bondholder Claims
ASSET FAMILY: Court Dismisses Case as a Bad Faith Filing
ATLANTIC WINE: September 30 Balance Sheet Upside-Down by $87,500
AURA SYSTEMS: Posts $2.5 Mil. Net Loss in Quarter Ended Nov. 30
AZTEC OIL: Nov. 30 Balance Sheet Upside Down by $1.9 Million
BALLY TOTAL: Seeks to Shield CEO Sheehan From Rival's Lawsuit
BALLY TOTAL: Gets Court Okay to Walk Away From Leases & Contracts
BALLY TOTAL: Gets Court Nod to Maintain AIG Insurance Program
BALLY TOTAL: Can Use Lenders' Cash Collateral Until January 28
BANK OF AMERICA: Former Merrill Board Members Criticize CEO
BANK OF AMERICA: Needs More Than $80BB in New Equity Capital
BANK OF AMERICA: Obtains $20,000,000,000 Funding from Treasury
BANKERS OF RUPTCY: Court Dismisses Debtor's Chapter 11 Case
BERNARD L. MADOFF: Frank DiPascali to be Point Man in Fraud Case
BH S&B: Steve & Barry Buyer Opposes Creditors' Discovery Requests
BIOHEART INC: Receives NASDAQ Non-Compliance Notice
CALIFORNIA STATE: State Workers May Not Get Paychecks in February
CEMTREX INC: Auditor Raises Going Concern Doubt
CHECKER MOTORS: Wants More Time to File Schedules and Statements
CHEMTURA CORP: May Tumble Into Bankruptcy, Bloomberg Says
CHRISTO BARDIS: May Employ Kirkman Blaine as Special Tax Counsel
CHRYSLER LLC: Discloses Non-Binding Agreement With Fiat
CIRCUIT CITY: Gets Nod on Liquidation; All US Stores to Be Closed
CIRCUIT CITY: Submits First Batch of Leases to be Rejected
CIRCUIT CITY: Panel Seeks to Retain Pachulski as Lead Counsel
CIRCUIT CITY: Panel Seeks to Retain Tavenner as Local Counsel
CIRTRAN CORP: CEO Iehab Hawatmeh Assumes Interim CFO Role
CIT GROUP: Cuts Quarterly Dividend by 80% to Save $22.8 Million
CITIGROUP INC: Cuts Common-Stock Dividend to 1 Cent From 16 Cents
CNS RESPONSE: Auditor Raises Going Concern Doubt
COBALIS CORP: Chapter 11 Bankruptcy Case Will be Discharged
ECLIPSE AVIATION: Depositors Want New Owners to Finish Planes
ENCAP GOLF: Says Dismissal of Case Will Hurt Parties, Public
ENTERPRISES MGT: Case Summary & 20 Largest Unsecured Creditors
ERIC SINGLETON: Voluntary Chapter 11 Case Summary
GEORGIA GULF: May Tumble Into Bankruptcy, Bloomberg Says
GOODY'S LLC: Ad Hoc Committee Wants Chapter 11 Case Dismissed
GOODY'S LLC: Can Access Lenders' Cash Collateral on Interim
GOODY'S LLC: Logan & Company Approved as Claims Agent
GREATER ATLANTIC: Auditor Raises Going Concern Doubt
GREATER CHINA: Auditor Raises Going Concern Doubt
HAWAIIAN TELCOM: Use of Cash Collateral Approved on Final Basis
HAWAIIAN TELCOM: Files Schedules of Assets and Debts
HAWAIIAN TELCOM: Files Statement of Financial Affairs
HAWAIIAN TELCOM: HawTel Unit Files Schedules of Assets and Debts
HAWAIIAN TELCOM: HawTel Unit Files Statement of Financial Affairs
HAWAIIAN TELCOM: Government Wants Access to Financial Reports
HSBC: Knight Vinke Wants Unit to File for Bankruptcy
INEOS GROUP: May Tumble Into Bankruptcy, Bloomberg Says
IRVINE SENSORS: Faces Delisting; Auditor Has Going Concern Doubt
IVOICE INC: Posts $284,945 Net Loss in Quarter Ended September 30
LAGARDE INC: Dydacomp Acquires Co. for $2.78 Million
LEHMAN BROTHERS: Ex-Federal Prosecutor A. Valukas Named Examiner
LYONDELL CHEMICAL: 3 Other Chemical Makers May Also Fall
LYONDELL CHEMICAL: Schedules Filing Deadline Moved to February 20
MARKETING WORLDWIDE: Auditor Raises Going Concern Doubt
MERCURY COMPANIES: Plan Filing Period Extended to February 23
MERCURY COMPANIES: May Sell Share in Title Plant to Metro Title
MERCURY COMPANIES: Taps Manatt Phelps as Special Counsel
MERRILL LYNCH: Former Board Members Criticize CEO on BofA Deal
MITEK SYSTEMS: Auditor Raises Going Concern Doubt
NEW ORLEANS PORTABLE: Files for Bankruptcy Protection
NEW YORK TIMES: Reaches Deal for $250MM Unsecured Loan from Slim
NORTEL NETWORKS: Court Restricts Trading in Securities
OTTER TAIL: Auditor Raises Going Concern Doubt
PATIENT SAFETY: Appoints David Bruce as President and CEO
SEAN & SHENASSA: Case Summary & Largest Unsecured Creditor
SPORTS COLLECTIBLES: Court Sets Feb. 16 As Claims Bar Date
STAR TRIBUNE: Lists $493.2MM in Assets, $661.1MM in Liabilities
STAR TRIBUNE: Pioneer to Deliver Paper in Western Wisconsin
STATE STREET: Shares Fall 55%; Needs Funding, Analysts Say
STEN CORPORATION: Auditor Raises Going Concern Doubt
SYNTAX-BRILLIAN: Files Liquidating Plan and Disclosure Statement
SYNTAX-BRILLIAN: Panel Taps Anthony Ostlund for D&O Actions
TARRAGON CORP: Seeks to Employ Cole Schotz as Bankruptcy Counsel
TARRAGON CORP: Taps Jones Day as Special Corporate Counsel
TRIBUNE CO: Obtains Approval of Motions on Business Operations
TROPICANA ENTERTAINMENT: Seeks OK of Solicitation, Voting Protocol
TROPICANA ENTERTAINMENT: Court Scraps Panel's Bid to File Own Plan
TROPICANA ENTERTAINMENT: US Trustee Opposes Fox Rothschild Hiring
TROPICANA ENTERTAINMENT: Justice Stein Wants Sale Deadline Moved
VALCOM INC: Auditor Raises Going Concern Doubt in FY 2008 Report
VARSITY GOLD: Case Summary & 20 Largest Unsecured Creditors
VIKING SYSTEMS: Reduces CEO's Annual Salary to $1 to Cut Costs
WALL HOMES: Files for Bankruptcy Due to Home Sales Decline
WALL HOMES: Case Summary & 20 Largest Unsecured Creditors
* Hahn & Hessen Appoints Ford and Schnitzer as New Partners
* Upcoming Meetings, Conferences and Seminars
*********
ACCENTIA BIOPHARMACEUTICALS: U.S. Trustee Appoints 5-Member Panel
-----------------------------------------------------------------
Donald F. Walton, the United States Trustee for Region 21,
appointed five creditors to serve on the official committee of
unsecured creditors in Accentia Biopharmaceuticals, Inc., and its
debtor-affiliates' jointly administered Chapter 11 cases.
The Creditors Committee members are:
a) Joshua Thomas, Portfolio Manager
Midsummer Investment, Ltd.
295 Madison Avenue, 38th Floor
New York, NY 10017
Tel: (212) 624-5034
Fax: (212) 624-5040
email: jt@midsummercapital.com
b) Dale Willenbring, Portfolio Manager
Whitebox Hedged High Yield Managers, LP
3033 Excelsior Boulevard
Minneapolis, MN 55416
Tel: (612) 253-6068
Fax: (612) 253-6100
dwillenbring@whiteboxadvisors.com
c) Michael Clateman, Managing Director
Rockmore Investment Master Fund, Ltd.
c/o Rockmore Capital, LLC
150 E. 58th Street, 28th Floor
New York, NY 10155
Tel: (212) 258-2305
Fax: (212) 258-2315
email: mc@rockmorecapital.com
d) Jarret Disbrow, President
Arbor Pharmaceuticals, Inc.
4505 Falls of Neuse Road, Suite 420
Raleigh, NC 27609
Tel: (919) 792-1701
Fax: (919) 875-3237
email: jdisbrow@arborpharma.com
e) George Smith, Senior VP
American Defense International (ADI), Inc.
1100 New York Avenue, N.W., Suite 630
Washington, D.C. 20005
Tel: (202) 589-0020
Fax: (202) 589-0630
email: gsmith@americandefense.net
Headquartered in Tampa, Florida, Accentia BioPharmaceuticals Inc.
(Nasdaq: ABPI) -- http://www.accentia.net/-- is a vertically
integrated biopharmaceutical company focused on the development
and commercialization of drug candidates that are in late-stage
clinical development and typically are based on active
pharmaceutical ingredients that have been previously approved by
the FDA for other indications. The company's lead product
candidate is SinuNase(TM), a novel application and formulation of
a known therapeutic to treat chronic rhinosinusitis.
Additionally, the company has acquired the majority ownership
interest in Biovest International Inc. and a royalty interest in
Biovest's lead drug candidate, BiovaxID(TM) and any other biologic
products developed by Biovest. The company also has a specialty
pharmaceutical business, which markets products focused on
respiratory disease and an analytical consulting business that
serves customers in the biopharmaceutical industry.
Accentia Biopharmaceuticals and nine affiliates filed for
Chapter 11 protection on November 10, 2008 (Bankr. M. D. Florida,
Lead Case No. 08-17795). Charles A. Postler, Esq., and Elena P.
Ketchum, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa,
Florida, represent the Debtors as counsel. The Official Committee
of Unsecured Creditors selected Paul J. Battista, Esq., at
Genovese Joblove & Battista, P.A. as its counsel. As of
June 30, 2008, the Debtors had total assets of $134,919,728 and
total debts of $77,627,355.
ACCENTIA BIOPHARMACEUTICALS: Files Schedules of Assets and Debts
----------------------------------------------------------------
Accentia Biopharmaceuticals, 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 $97,205,869
C. Property Claimed as
Exempt
D. Creditors Holding $25,319,219
Secured Claims
E. Creditors Holding $665
Unsecured Priority
Claims
F. Creditors Holding $30,175,587
Unsecured Non-priority
Claims
----------- -----------
TOTAL $97,205,869 $55,495,472
Headquartered in Tampa, Florida, Accentia BioPharmaceuticals Inc.
(Nasdaq: ABPI) -- http://www.accentia.net/-- is a vertically
integrated biopharmaceutical company focused on the development
and commercialization of drug candidates that are in late-stage
clinical development and typically are based on active
pharmaceutical ingredients that have been previously approved by
the FDA for other indications. The company's lead product
candidate is SinuNase(TM), a novel application and formulation of
a known therapeutic to treat chronic rhinosinusitis.
Additionally, the company has acquired the majority ownership
interest in Biovest International Inc. and a royalty interest in
Biovest's lead drug candidate, BiovaxID(TM) and any other biologic
products developed by Biovest. The company also has a specialty
pharmaceutical business, which markets products focused on
respiratory disease and an analytical consulting business that
serves customers in the biopharmaceutical industry.
Accentia Biopharmaceuticals and nine affiliates filed for
Chapter 11 protection on November 10, 2008 (Bankr. M. D. Florida,
Lead Case No. 08-17795). Charles A. Postler, Esq., and Elena P.
Ketchum, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa,
Florida, represent the Debtors as counsel. The Official Committee
of Unsecured Creditors selected Paul J. Battista, Esq., at
Genovese Joblove & Battista, P.A. as its counsel.
ACTIGA CORPORATION: Steve Bajic Resigns from Board of Directors
---------------------------------------------------------------
Actiga Corporation disclosed in a regulatory filing that effective
Dec. 31, 2008, Steve Bajic resigned from his position as a member
of the board of directors. There were no disagreements between
Mr. Bajic and the company.
Based in Riverside, California, Actiga Corporation (OTCBB: AGAC) -
- http://www.qmotions.com/-- terminated its dog day care services
after it merged with QMotions Inc. on Jan. 14, 2008. The company
currently develops, manufactures, distributes, markets and sells
motion-based controllers for video games and Online video games.
Actiga Corporation's balance sheet at Sept. 30, 2008, showed total
assets of $1,762,469 and total liabilities of $4,336,552,
resulting in a stockholders' deficit of $2,574,083.
For three months ended Sept. 30, 2008, the company reported a net
loss of $1,238,043 compared with a net loss of $429,799 for the
same period in the previous year.
In the nine-month period, the company incurred a net loss of
$3,848,527 compared with a net loss of $1,209,866 for the same
period in the previous year.
ADVANCED GROWING: Auditor Raises Going Concern Doubt
----------------------------------------------------
Porter Keadle Moore, LLP, in Atlanta, Georgia, in a letter dated
January 13, 2009, to the Board of Directors of Advanced Growing
Systems, Inc., expressed substantial doubt about the company's
ability to continue as a going concern. The firm audited the
consolidated balance sheets of Advanced Growing Systems, Inc., and
subsidiaries as of September 30, 2008, and the related
consolidated statements of operations, stockholders' equity and
cash flows for the year then ended.
Porter Keadle Moore pointed out that the company has suffered
negative cash flows from operations since inception. "This raises
substantial doubt about the company's ability to continue as a
going concern."
The company posted a net loss of $7,819,855 for the year ended
September 30, 2008, compared with a net loss of $6,578,107 for the
same period a year earlier.
As of September 30, 2008, the company's balance sheet showed total
assets of $3,093,322, total liabilities of $5,290,738, minority
interest of $380, and total stockholders' deficit of $2,197,796.
Chris J. Nichols, principal executive officer, and Dan K. Dunn,
principal financial officer disclosed in a regulatory filing dated
January 13, 2009, that the company has outstanding convertible
promissory notes that it anticipates will be converted to common
stock or paid off during fiscal 2009. The company has also
entered into two short-term notes amounting to $1,250,000 with two
different private investment companies.
The company has two subsidiaries -- Advanced Nurseries, Inc., and
Organic Growing Systems, Inc. ANI has continued a line of credit
facility that is calculated upon the receivables. OGSI entered
into a receivable factoring agreement. "The closure of ANI will
also reduce the cash requirements on the company. Management
believes that substantially all short-term debt will either be
converted to equity or restructured into a long term debt
instrument. These transactions, along with the increase in sales
for OGSI and the commitments from third party lenders will assist
the company in its growth and it will be able to sustain its
capital and operating requirements for the next fiscal year."
"While we believe that we will be successful in obtaining the
necessary financing to fund our operations, there can be no
assurances that such additional funding will be achieved and that
we will succeed in our future operations. These matters raise
substantial doubt about the Company's ability to continue as a
going concern."
A full-text copy of the company's annual report is available for
free at: http://researcharchives.com/t/s?3846
About Advanced Growing
Advanced Growing Systems, Inc., was merged into an inactive public
shell, Non-Lethal Weapons, Inc., on June 30, 2006. The company
has two subsidiaries -- Advanced Nurseries, Inc., and Organic
Growing Systems, Inc. ANI's operations consist of a wholesale
group of commercial nurseries located in the Southeastern United
States. As of September 30, 2007, ANI had three operating
nurseries located in the Atlanta, Georgia metropolitan areas of
Alpharetta, Braselton and Marietta. In September of 2008, the
Board of Directors approved a plan to close all operations of ANI
and have begun a voluntary liquidation of the remaining assets of
the subsidiary. OGSI produces and markets an organic fertilizer
with a manufacturing facility in Monticello, Mississippi, which
was acquired in 2007, with its sales and operational office in
Alpharetta, Georgia.
AMERICAN INT'L: Names Monika Machon as Chief Investment Officer
---------------------------------------------------------------
American International Group, Inc., has named Monika M. Machon AIG
Senior Vice President and Chief Investment Officer, responsible
for insurance company portfolio management across all asset
classes, succeeding Win J. Neuger. Mr. Neuger will continue as
AIG Investments Chairman and Chief Executive Officer, while
leading the management team of the external client asset
management business that AIG intends to sell. Ms. Machon will
report directly to AIG Chairperson and Chief Executive Officer
Edward J. Liddy.
Jeffrey J. Hurd, who is currently AIG Investments Senior Managing
Director, Chief Administrative Officer and General Counsel, has
been named Senior Vice President and head of Asset Management
Restructuring, responsible for the sale of AIG's external asset
management business and the restructuring of AIG's asset
management function. He will report to AIG Vice Chairman Paula R.
Reynolds. Mr. Hurd will retain his current responsibilities prior
to the sale.
"These changes will allow AIG to proceed quickly and thoughtfully
with the sale of the external client asset management and life
insurance businesses. In addition, under Monika's leadership, we
will build on our commitment to a strong asset management function
for AIG," said Mr. Liddy.
Ms. Machon joined AIG in 1998 and is presently the global head of
Fixed Income for AIG Investments and serves as Chairperson of the
Board of AIG Investments Europe Ltd. Previously, she was
portfolio manager and head of emerging markets debt. Ms. Machon
has more than 27 years of broad fixed income experience in the
U.S. and overseas. Mr. Hurd joined AIG in 1998 in the Corporate
Legal Department, and was named General Counsel of AIG Investments
in 2003.
About AIG
Based in New York, American International Group, Inc. (AIG) is the
leading international insurance organization with operation in
more than 130 countries and jurisdictions. AIG companies serve
commercial, institutional and individual customers through the
most extensive worldwide property-casualty and life insurance
networks of any insurer. In addition, AIG companies are leading
providers of retirement services, financial services and asset
management around the world. AIG's common stock is listed on the
New York Stock Exchange, as well as the stock exchanges in Ireland
and Tokyo.
During the third quarter of 2008, requirements to post collateral
in connection with AIG Financial Products Corp.'s credit default
swap portfolio and other AIGFP transactions and to fund returns of
securities lending collateral placed stress on AIG's liquidity.
AIG's stock price declined from $22.76 on Sept. 8, 2008, to $4.76
on Sept. 15, 2008. On that date, AIG's long-term debt ratings
were downgraded by Standard & Poor's, a division of The McGraw-
Hill Companies, Inc., Moody's Investors Service and Fitch Ratings,
which triggered additional requirements for liquidity. These and
other events severely limited AIG's access to debt and equity
markets.
On Sept. 22, 2008, AIG entered into an $85 billion revolving
credit agreement with the Federal Reserve Bank of New York and,
pursuant to the Fed Credit Agreement, AIG agreed to issue 100,000
shares of Series C Perpetual, Convertible, Participating Preferred
Stock to a trust for the benefit of the United States Treasury.
At Sept. 30, 2008, amounts owed under the facility created
pursuant to the Fed Credit Agreement totaled $63 billion,
including accrued fees and interest.
Since Sept. 30, AIG has borrowed additional amounts under the
Fed Facility and has announced plans to sell assets and businesses
to repay amounts owed in connection with the Fed Credit Agreement.
In addition, subsequent to Sept. 30, 2008, certain of AIG's
domestic life insurance subsidiaries entered into an agreement
with the NY Fed pursuant to which the NY Fed has borrowed, in
return for cash collateral, investment grade fixed maturity
securities from the insurance subsidiaries.
On Nov. 10, 2008, the U.S. Treasury agreed to purchase, through
its Troubled Asset Relief Program, $40 billion of newly issued AIG
perpetual preferred shares and warrants to purchase a number of
shares of common stock of AIG equal to 2% of the issued and
outstanding shares as of the purchase date. All of the proceeds
will be used to pay down a portion of the Federal Reserve Bank of
New York credit facility. The perpetual preferred shares will
carry a 10% coupon with cumulative dividends.
AIG and the Fed also agreed to revise the existing FRBNY credit
facility. The loan terms were extended from two to five years to
give AIG time to complete its planned asset sales in an orderly
manner. The equity interest that taxpayers will hold in AIG,
coupled with the warrants, will total 79.9%.
At Sept. 30, 2008, AIG had $1.022 trillion in total consolidated
assets and $950.9 billion in total debts. Shareholders' equity
was $71.18 billion, including the addition of $23 billion of
consideration received for preferred stock not yet issued.
AMERICAN INT'L: Win Neuger to Leave Chief Investment Officer Post
-----------------------------------------------------------------
Win Neuger will leave his post as American International Group
Inc.'s chief investment officer, Serena Ng and Liam Pleven at The
Wall Street Journal report, citing people familiar with the
matter.
According to WSJ, Mr. Neuger supervised AIG's investment
operation. Sources said that Mr. Neuger would focus on a narrower
role as the unit he will head is being prepared for sale, WSJ
states. Citing the sources, the report says that Mr. Neuger will
continue to oversee AIG's business of managing assets for external
clients like pension funds, which the firm is putting up for sale.
Mr. Neuger, according to the report, will keep his position as AIG
Investments' chief executive and chairperson. AIG, the report
states, has logged significant losses in the investment operations
that Mr. Neuger oversaw.
WSJ relates that AIG is selling assets, including the third-party
management business, to repay a loan of $60 billion from the
federal government.
UBS to Buy Commodity-Index Business
WSJ states that UBS AG said it will purchase AIG's commodity-index
business, including the rights to the Dow Jones-AIG Commodity
Index. According to the report, UBS said that it will pay
$15 million on closing and $135 million more over the next 18
months, depending on performance.
About American International Group
Based in New York, American International Group, Inc. (AIG), is
the leading international insurance organization with operation in
more than 130 countries and jurisdictions. AIG companies serve
commercial, institutional and individual customers through the
most extensive worldwide property-casualty and life insurance
networks of any insurer. In addition, AIG companies are leading
providers of retirement services, financial services and asset
management around the world. AIG's common stock is listed on the
New York Stock Exchange, as well as the stock exchanges in Ireland
and Tokyo.
During the third quarter of 2008, requirements to post collateral
in connection with AIG Financial Products Corp.'s credit default
swap portfolio and other AIGFP transactions and to fund returns of
securities lending collateral placed stress on AIG's liquidity.
AIG's stock price declined from $22.76 on Sept. 8, 2008, to $4.76
on Sept. 15, 2008. On that date, AIG's long-term debt ratings
were downgraded by Standard & Poor's, a division of The McGraw-
Hill Companies, Inc., Moody's Investors Service and Fitch Ratings,
which triggered additional requirements for liquidity. These and
other events severely limited AIG's access to debt and equity
markets.
On Sept. 22, 2008, AIG entered into an $85 billion revolving
credit agreement with the Federal Reserve Bank of New York and,
pursuant to the Fed Credit Agreement, AIG agreed to issue 100,000
shares of Series C Perpetual, Convertible, Participating Preferred
Stock to a trust for the benefit of the United States Treasury.
At Sept. 30, 2008, amounts owed under the facility created
pursuant to the Fed Credit Agreement totaled $63 billion,
including accrued fees and interest.
Since Sept. 30, AIG has borrowed additional amounts under the
Fed Facility and has announced plans to sell assets and businesses
to repay amounts owed in connection with the Fed Credit Agreement.
In addition, subsequent to Sept. 30, 2008, certain of AIG's
domestic life insurance subsidiaries entered into an agreement
with the NY Fed pursuant to which the NY Fed has borrowed, in
return for cash collateral, investment grade fixed maturity
securities from the insurance subsidiaries.
On Nov. 10, 2008, the U.S. Treasury agreed to purchase, through
its Troubled Asset Relief Program, $40 billion of newly issued AIG
perpetual preferred shares and warrants to purchase a number of
shares of common stock of AIG equal to 2% of the issued and
outstanding shares as of the purchase date. All of the proceeds
will be used to pay down a portion of the Federal Reserve Bank of
New York credit facility. The perpetual preferred shares will
carry a 10% coupon with cumulative dividends.
AIG and the Fed also agreed to revise the existing FRBNY credit
facility. The loan terms were extended from two to five years to
give AIG time to complete its planned asset sales in an orderly
manner. The equity interest that taxpayers will hold in AIG,
coupled with the warrants, will total 79.9%.
At Sept. 30, 2008, AIG had $1.022 trillion in total consolidated
assets and $950.9 billion in total debts. Shareholders' equity
was $71.18 billion, including the addition of $23 billion of
consideration received for preferred stock not yet issued.
AMERICAN INT'L: Bally Total to Maintain Insurance Program
---------------------------------------------------------
In connection with the operation of their businesses, Bally Total
Fitness Holding Corp. and its affiliates are required to carry
various insurance policies with certain insurance affiliates of
American International Group, Inc., including workers'
compensation, automobile liability, commercial general liability
and umbrella commercial general liability.
The Debtors' Existing Insurance Program consists of:
(a) Workers' Compensation Program with National Union Fire
Insurance Company of Pittsburg, PA, an AIG affiliate,
which provides coverage for claims arising from
December 15, 2006 through December 15, 2008;
(b) an auto liability insurance program with American Home
Assurance, an AIG affiliate, which provides coverage for
claims from December 15, 2006 through December 15, 2008;
and
(c) General Liability Program with Lexington Insurance
Company, an AIG affiliate, as well as National Union, for
claims arising from October 1, 2006 to December 15, 2008.
The coverage period for the Debtors' existing insurance program
ended on December 15, 2008. However, the coverage and programs
continue under its policies and claimants are allowed to assert
claims for injuries incurred during the coverage period.
The Debtors state that they have remained current on their
obligations under the Existing Insurance Program, and do not
believe they are in default of any provision under the policy.
Against this backdrop, the Debtors sought and obtained authority
from the U.S. Bankruptcy Court for the Southern District of New
York to assume the Existing Insurance Programs, and to enter into
a renewal insurance program with AIG's affiliates pursuant to
Section 365 of the Bankruptcy Code. Judge Burton Lifland
permitted the Debtors to execute all documentation necessary to
assume the Existing Insurance Program. The Debtors are also
allowed to enter into the Renewal Insurance Program, and into
further extensions or renewals of the Program without further
Court order.
In the event of a default by the Debtors under the Insurance
Programs, AIG and its affiliates are authorized to exercise all
contractual rights in accordance with the terms of the Insurance
Programs, without further Court order.
The Court has lifted the automatic stay to allow AIG to exercise
its rights, in the event of a default, to cancel the Insurance
Programs, to foreclose on any collateral, and to receive and
apply the unearned or returned premiums to the Debtors'
outstanding obligations.
Meanwhile, the Debtors sought and obtained the Court's permission
to honor the terms of their insurance policies, and maintain and
renew postpetition financing of insurance premiums. The Court
held that the Debtors may pay prepetition premiums necessary to
maintain insurance coverage and surety bonds in current effect, in
the ordinary course of business, as are necessary to avoid
cancellation, default, or impairment to the Policies and Surety
Bonds. The Court directed all banks and financial institutions to
receive, process, honor, and pay all checks and electronic payment
requests when presented for payment.
The Debtors maintain various insurance policies providing
coverage for property, general liability, excess liability,
workers' compensation, automobile liability, earthquake
liability, commercial crime coverage, and directors' and
officers' liability, among others.
According to Kenneth H. Eckstein, Esq., at Kramer Levin Naftalis
& Frankel LLP, in New York, the Policies are essential to the
preservation of the Debtors' businesses, property, and assets.
The insurance coverage is required by various regulations, laws,
and contracts that govern the Debtors' commercial activity. The
annual aggregate premiums for the Policies total $9,000,000.
In addition, in connection with the Debtors' business operations,
they are required to maintain numerous surety bonds. Several
states require the Debtors to maintain surety bonds in connection
with consumer protection laws, and certain utility providers also
require surety bonds for the provision of services. The Surety
Bonds total approximately $8,293,740. Mr. Eckstein says that the
Debtors pay $168,510 in annual premiums to maintain those Surety
Bonds. Without the Surety Bonds, he says, the Debtors may be in
violation of state law, and will consequently be unable to
operate health clubs in those states.
About Bally Total Fitness
Based in Chicago, Illinois, Bally Total Fitness Holding Corp.
(Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates
fitness centers in the U.S., with over 375 facilities located in
26 states, Mexico, Canada, Korea, China and the Caribbean under
the Bally Total Fitness(R), Bally Sports Clubs(R) and Sports Clubs
of Canada (R) brands.
Bally Total and its affiliates filed for Chapter 11 protection
7on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after
obtaining requisite number of votes in favor of their pre-
packaged chapter 11 plan. Joseph Furst, III, Esq. at Latham &
Watkins, L.L.P. represents the Debtors in their restructuring
efforts. As of June 30, 2007, the Debtors had US$408,546,205 in
total assets and US$1,825,941,54627 in total liabilities.
The Debtors filed their Joint Prepackaged Plan & Disclosure
Statement on July 31, 2007. The Court confirmed the Plan in Sept.
2007. The Plan was declared effective Oct. 1, 2007.
Bally Total Fitness Holding Corp. and its debtor-affiliates and
subsidiaries again filed voluntary petitions under Chapter 11 on
Dec. 3, 2008 (Bankr. S. D. N. Y., Lead Case No. 08-14818). Their
counsel is Kenneth H. Eckstein, Esq. at Kramer Levin Naftalis &
Frankel LLP, in New York. As of September 30, 2008, the Company
(including non-debtor affiliates) had consolidated assets totaling
approximately $1.376 billion and recorded consolidated liabilities
totaling approximately $1.538 billion.
Bankruptcy Creditors' Service, Inc., publishes Bally Bankruptcy
News. The newsletter provides gavel-to-gavel coverage of the
chapter 11 proceedings of Bally Total Fitness Holding Corp. and
its debtor-affiliates (http://bankrupt.com/newsstand/or 215/945-
7000)
About American International Group
Based in New York, American International Group, Inc. (AIG), is
the leading international insurance organization with operation in
more than 130 countries and jurisdictions. AIG companies serve
commercial, institutional and individual customers through the
most extensive worldwide property-casualty and life insurance
networks of any insurer. In addition, AIG companies are leading
providers of retirement services, financial services and asset
management around the world. AIG's common stock is listed on the
New York Stock Exchange, as well as the stock exchanges in Ireland
and Tokyo.
During the third quarter of 2008, requirements to post collateral
in connection with AIG Financial Products Corp.'s credit default
swap portfolio and other AIGFP transactions and to fund returns of
securities lending collateral placed stress on AIG's liquidity.
AIG's stock price declined from $22.76 on Sept. 8, 2008, to $4.76
on Sept. 15, 2008. On that date, AIG's long-term debt ratings
were downgraded by Standard & Poor's, a division of The McGraw-
Hill Companies, Inc., Moody's Investors Service and Fitch Ratings,
which triggered additional requirements for liquidity. These and
other events severely limited AIG's access to debt and equity
markets.
On Sept. 22, 2008, AIG entered into an $85 billion revolving
credit agreement with the Federal Reserve Bank of New York and,
pursuant to the Fed Credit Agreement, AIG agreed to issue 100,000
shares of Series C Perpetual, Convertible, Participating Preferred
Stock to a trust for the benefit of the United States Treasury.
At Sept. 30, 2008, amounts owed under the facility created
pursuant to the Fed Credit Agreement totaled $63 billion,
including accrued fees and interest.
Since Sept. 30, AIG has borrowed additional amounts under the
Fed Facility and has announced plans to sell assets and businesses
to repay amounts owed in connection with the Fed Credit Agreement.
In addition, subsequent to Sept. 30, 2008, certain of AIG's
domestic life insurance subsidiaries entered into an agreement
with the NY Fed pursuant to which the NY Fed has borrowed, in
return for cash collateral, investment grade fixed maturity
securities from the insurance subsidiaries.
On Nov. 10, 2008, the U.S. Treasury agreed to purchase, through
its Troubled Asset Relief Program, $40 billion of newly issued AIG
perpetual preferred shares and warrants to purchase a number of
shares of common stock of AIG equal to 2% of the issued and
outstanding shares as of the purchase date. All of the proceeds
will be used to pay down a portion of the Federal Reserve Bank of
New York credit facility. The perpetual preferred shares will
carry a 10% coupon with cumulative dividends.
AIG and the Fed also agreed to revise the existing FRBNY credit
facility. The loan terms were extended from two to five years to
give AIG time to complete its planned asset sales in an orderly
manner. The equity interest that taxpayers will hold in AIG,
coupled with the warrants, will total 79.9%.
At Sept. 30, 2008, AIG had $1.022 trillion in total consolidated
assets and $950.9 billion in total debts. Shareholders' equity
was $71.18 billion, including the addition of $23 billion of
consideration received for preferred stock not yet issued.
AMACORE GROUP: Inks Securities Purchase Deal with Vicis Capital
---------------------------------------------------------------
The Amacore Group, Inc., disclosed in a filing with the Securities
and Exchange Commission that it entered into a Securities Purchase
and Exchange Agreement with Vicis Capital Master Fund.
On Nov. 6, 2008, the company and Vicis had entered into an
informal agreement with respect to the purchase by Vicis of
250 shares of the company's Series I Convertible Preferred Stock,
par value $0.001 per share and a warrant to acquire 28,125,000
shares of the company's Class A Common Stock, par value $0.001 per
share. The company disclosed that it anticipated that it would
subsequently enter into definitive written agreements with Vicis
in connection with the Purchase.
The company received the $2,500,000 purchase price payment on
Nov. 6, 2008. The Shares and Warrant were issued upon execution
of the Agreement. Shares of Series I Preferred Stock are
convertible into shares of the company's Class A Common Stock and
have rights and preferences senior to certain other classes and
series of the company's capital stock.
In addition, the company exchanged 694.6 shares of its Series D
Convertible Preferred Stock, par value $.001 per share with an
aggregate stated value of $6,946,000 together with accrued but
unpaid dividends thereon equal to $807,376 for 775.34 shares of
the company's newly designated Series J Convertible Preferred
Stock, par value $.001 per share. The company also exchanged
139 shares of its Series E Convertible Preferred Stock, par value
$.001 per share with a stated value of $1,390,000 together with
accrued but unpaid dividends thereon equal to $168,209 for
155.82 shares of the company's newly designated Series K
Convertible Preferred Stock, par value $.001 per share.
Shares of Series J Preferred Stock and Series K Preferred Stock
are convertible into shares of the company's Class A Common Stock
and have rights and preferences senior to certain other classes
and series of the company's capital stock. Vicis exercised its
conversion rights with respect to all of the Exchange Shares on
Dec. 31, 2008.
In connection with the Securities Purchase and Exchange Agreement,
the company and Vicis also entered into these agreements:
-- Warrant agreement setting forth the terms of the Warrant.
The Warrant is exercisable for five years at an exercise
price of $0.375 per share, subject to adjustment for
certain events, and has a cashless exercise feature.
-- Registration rights agreement granting Vicis certain
"piggyback" registration rights with respect to the shares
of Class A Common Stock or other company securities into
which the Shares, Warrant and Exchange Shares may be
converted.
-- First Amendment to Registration Rights Agreements amending
certain registration rights agreements between the company
and Vicis dated on or about July 11, 2006, Nov. 30, 2006,
Jan. 30, 2007, April 1, 2007, March 28, 2007, and Oct. 15,
2007, by adding a liquidated damages provision to each
Amended Registration Rights Agreement that will apply in
the event the registration statement required to be filed
pursuant to such Amended Registration Rights Agreement is
not filed and declared effective by the SEC at least 90
days prior to the maturity date, or after being declared
effective, ceases to be effective at any time prior to the
nine-month anniversary of the effectiveness date, the
company will pay in cash as liquidated damages to Vicis an
amount equal to 2.0% of the aggregate stated value of the
acquired shares then held by Vicis for each calendar month,
or portion thereof, from the Event Date until the
applicable Event is cured.
-- First Amendment to Warrant amending certain warrants dated
March 13, 2008, April 30, 2008, June 2, 2008, Sept. 30,
2008, and Oct. 6, 2008, pursuant to which Vicis may
purchase an aggregate of 180,000,00 shares of the company's
Class A Common Stock, by eliminating Vicis' right under
each Amended Warrant to require the company to redeem all
or any portion of the Amended Warrant upon a change of
control of the company.
As a result of these transactions, Vicis now owns 889,128,950
shares of the issued and outstanding shares of the company's Class
A Common Stock. In addition, Vicis owns 850 shares of Series I
Preferred Stock, 1,200 shares of the company's Series G
Convertible Preferred Stock and 400 Shares of the company's Series
H Convertible Preferred Stock. Vicis also owns warrants to
acquire 400,000 shares of the company's Class A Common Stock at an
exercise price of $2.40 per share and, as a result of these
transactions, warrants to acquire 208,125,000 shares of the
company's Class A Common Stock exercisable at a current exercise
price of $0.375 per share.
A full-text copy of the Securities Purchase And Exchange Agreement
is available for free at:
http://ResearchArchives.com/t/s?3834
A full-text copy of the Warrant to Purchase Shares of Class A
Common Stock is available for free at:
http://ResearchArchives.com/t/s?3835
A full-text copy of the Registration Rights Agreement is available
for free at:
http://ResearchArchives.com/t/s?3836
A full-text copy of the First Amendment To Registration Rights
Agreement is available for free at:
http://ResearchArchives.com/t/s?3837
A full-text copy of the First Amendment To Warrant is available
for free at:
http://ResearchArchives.com/t/s?3838
Amendments to Articles of Incorporation or Bylaws;
Change In Fiscal Year.
On Dec. 31, 2008, the company filed with the Delaware Secretary of
State a Certificate of Designation of Series J Convertible
Preferred Stock designating 775.34 shares of Series J Preferred
Stock and a Certificate of Designation of Series K Convertible
Preferred Stock designating 155.82 shares of Series K Preferred
Stock. Each share of Series J Preferred Stock and Series K
Preferred Stock has a stated value of $10,000 per share.
Generally, the rights and preferences of the Series J Preferred
Stock and Series K Preferred Stock are the same with certain
exceptions.
Rank. With respect to the distribution of assets upon
liquidation, dissolution or winding up the Series J Preferred
Stock and the Series K Preferred Stock rank:
i) prior to all classes of the company's common stock;
ii) prior to all other series of the company's authorized
preferred stock;
iii) prior to any class or series of capital stock of the
company created after the designation of the Series J
Preferred Stock or the Series K Preferred Stock, as
applicable, which does not, by its terms, rank senior to or
pari passu with the Series J Preferred Stock or the Series
K Preferred Stock, as applicable.
The Series J Preferred Stock and the Series K Preferred Stock rank
pari passu with each other, the company's Series D Convertible
Preferred Stock, Series E Convertible Preferred Stock, Series G
Convertible Preferred Stock, Series H Convertible Preferred Stock,
Series I Preferred Stock and any class or series of capital stock
of the company created after the designation of the Series J
Preferred Stock or the Series K Preferred Stock, as applicable,
that, by its terms, ranks on parity with the Series J Preferred
Stock or the Series K Preferred Stock, as applicable. The Series
J Preferred Stock and the Series K Preferred Stock, as applicable,
rank junior to any class or series of capital stock of the company
created after the designation of the Series J Preferred Stock or
the Series K Preferred Stock, as applicable, that, by its terms,
ranks senior to the Series J Preferred Stock or the Series K
Preferred Stock, as applicable.
Cumulative Preferred Dividends. Prior to payment of any dividend
to the holders of any Junior Security, holders of the Series J
Preferred Stock and the Series K Preferred Stock are entitled to
receive cumulative dividends payable on the Stated Value at a rate
of 6% per annum. Subject to certain limitations, dividends are
payable quarterly. Unpaid accumulated dividends accrue interest
at a rate of 6% per annum.
Liquidation Rights. In the event of a liquidation, dissolution or
winding up of the company, before any distribution is made to the
holders of any Junior Security, the holders of the Series J
Preferred Stock and the Series K Preferred Stock are entitled to
be paid out of the assets of the company an amount equal to the
Stated Value plus the aggregate amount of any accumulated, but
unpaid, dividends declared with respect to the Series J Preferred
Stock and the Series K Preferred Stock.
Voting Rights. Except as otherwise required by law, holders of
the Series J Preferred Stock and the Series K Preferred Stock do
not have voting rights.
Optional Conversion. Each share of Series J Preferred Stock and
Series K Preferred Stock is convertible at any time, at the option
of the holder thereof, into shares of Class A Common Stock. The
number of shares of Class A Common Stock into which the Series J
Preferred Stock is convertible is equal to the Stated Value
divided by $0.01. The number of shares of Class A Common Stock
into which the Series K Preferred Stock is convertible is equal to
the Stated Value divided by $0.02. The Conversion Price is
subject to adjustment for certain events, including the payment of
a dividend payable in capital stock of the company, any stock
split, combination, or reclassification and certain issuances of
Class A Common Stock or securities convertible into or exercisable
for Class A Common Stock at a price per share or conversion price
less than the then applicable Conversion Price.
In the event of certain corporate changes, including any
consolidation or merger in which the company is not the surviving
entity, sale or transfer of all or substantially all of the
company's assets, certain share exchanges and certain
distributions of property or assets to the holders of Class A
Common Stock, the holders of the Series J Preferred Stock and the
Series K Preferred Stock have the right to receive upon
conversion, in lieu of shares of Class A Common Stock otherwise
issuable, such securities and/or other property as would have been
issued or payable as a result of such corporate change with
respect to or in exchange for the Class A Common Stock issuable
upon conversion of the Series J Preferred Stock and the Series K
Preferred Stock.
Mandatory Conversion. If on July 15, 2011, any share of the
Series J Preferred Stock and the Series K Preferred Stock remains
outstanding and a registration statement covering the resale of
all of the Class A Common Stock underlying the shares of the
Series J Preferred Stock and the Series K Preferred Stock is
effective and has been effective for 90 days prior to such date,
the company must convert each share of the Series J Preferred
Stock and the Series K Preferred Stock into Class A Common Stock
at the then applicable Conversion Price.
Required Holder Approval. So long as any shares of the Series J
Preferred Stock and the Series K Preferred Stock are outstanding,
the company may not, without the prior approval of the holders of
a majority of the then outstanding shares of the Series J
Preferred Stock and the Series K Preferred Stock, as applicable:
i) amend the rights, preferences or privileges of the Series J
Preferred Stock and the Series K Preferred Stock;
ii) amend or waive any provision of the company's Certificate
of Incorporation, as amended, in a way that would alter the
rights, preferences or privileges of the the Series J
Preferred Stock and the Series K Preferred Stock;
iii) create any Senior Securities; or
iv) enter into any agreement with respect to the foregoing
clauses (i) through (iii).
Optional Redemption of the Series K Preferred Stock. The company
may redeem all, but not less than all, of the shares of Series K
Preferred Stock outstanding if:
a) the closing trading price of the Class A Common Stock
exceeds $.50 per share for 15 trading days during any 20
trading day period; and
b) there is at the time of such redemption, and has been for
the period specified in (a), an effective registration
statement covering the resale of the shares of Class A
Common Stock underlying the Series K Preferred Stock by
paying cash in exchange for each share to be redeemed in an
amount equal to 150% of the Stated Value, less all
dividends paid thereon. The company does not have a
redemption right with respect to the Series J Preferred
Stock.
A full-text copy of the Certificate of Designation Series J
Convertible Preferred Stock is available for free at:
http://ResearchArchives.com/t/s?3832
A full-text copy of the Certificate of Designation Series K
Convertible Preferred Stock is available for free at:
http://ResearchArchives.com/t/s?3833
As a result of the Purchase and conversion of the Exchange Shares,
Vicis owns 889,128,950 shares, or 88.1%, of the issued and
outstanding shares of the company's Class A Common Stock and the
total issued and outstanding shares of the company's voting
securities.
About Amacore Group Inc.
Based in Tampa, Florida, The Amacore Group Inc. (OTC BB: ACGI) --
http://www.amacoregroup.com/-- provides health-related membership
benefit programs, insurance programs, and other innovative and
high-quality solutions to individuals, families and employer
groups nationwide.
Through its wholly owned subsidiary, LifeGuard Benefit Solutions
Inc., Amacore now has the ability to provide administrative and
back-office services to other healthcare companies in addition to
expanding its own call center capability through its wholly-owned
subsidiary, JRM Benefits Consultants LLC and US Heath Benefits
Group Inc., a call center-based marketing company. Zurvita Inc.,
Amacore's newly formed, wholly-owned subsidiary specializing in
direct to consumer multi-level marketing, provides yet another
channel for Amacore's ever-increasing range of healthcare and
healthcare-related products.
As of September 30, the company had $18,523,198 in total assets,
and $25,359,274 in total liabilities, resulting in $6,836,076 in
stockholders' deficit.
At Sept. 30, 2008, the company also had negative working
capital of $6,353,348 and an accumulated deficit of $108,102,196.
For the three months ended September 30, the company had a net
loss of $11,175,656. For the nine months ended September 30, the
company had a net loss of $29,849,189.
Going Concern Doubt
As reported by the Troubled company Reporter on June 17, 2008, the
company believes that existing conditions raise substantial doubt
about the company's ability to continue as a going concern. The
company cited sustained operating losses in recent years.
AMACORE GROUP: Sells 400 Shares of Pref. Stock to Vicis Capital
---------------------------------------------------------------
The Amacore Group, Inc., disclosed in a filing with the Securities
and Exchange Commission that the company and Vicis Capital Master
Fund had entered into definitive written agreements.
On Jan. 7, 2009, the company entered into an informal agreement
with Vicis Capital Master Fund for the purchase by Vicis of
(a) 400 shares of the company's Series I Convertible Preferred
Stock, par value $0.001 per share for an aggregate cash purchase
price of $4,000,000 and (b) a warrant to acquire 45,000,000 shares
of the company's Class A Common Stock, par value $0.001 per share.
The Informal Agreement is subject to the execution of definitive
written agreements. The company received the $4,000,000 purchase
price payment on Jan. 7, 2009.
On Jan. 13, 2009, the company entered into a Securities Purchase
Agreement with Vicis formalizing the Purchase.
In connection with the Agreement, the company and Vicis also
entered into a warrant agreement setting forth the terms of the
Warrant and a registration rights agreement granting Vicis certain
"piggyback" registration rights with respect to the shares of
Class A Common Stock or other company securities into which the
Shares and Warrant may be converted.
Vicis owns 1,250 shares of Series I Preferred Stock. In addition,
Vicis owns 1,200 shares of the company's Series G Convertible
Preferred Stock and 400 Shares of the company's Series H
Convertible Preferred Stock. Vicis also holds approximately 88%
of the company's issued and outstanding Class A Common Stock. In
addition, Vicis owns warrants to acquire 400,000 shares of the
company's Class A Common Stock at an exercise price of $1.25 per
share and, as a result of these transactions, warrants to acquire
253,125,000 shares of the company's Class A Common Stock
exercisable at a current exercise price of $0.375 per share.
A full-text copy of the Securities Purchase Agreement is available
for free at:
http://ResearchArchives.com/t/s?3849
A full-text copy of the Warrant to Purchase Shares of Class A
Common Stock is available for free at:
http://ResearchArchives.com/t/s?384a
A full-text copy of the Registration Rights Agreement is available
for free at:
http://ResearchArchives.com/t/s?384b
Shares of Series I Preferred Stock have rights and preferences
senior to certain other classes and series of the company's
capital stock. Each Share has a stated value of $10,000 and is
convertible at any time, at the option of the holder, into that
number of shares of Class A Common Stock equal to the Stated Value
divided by $5.00. The Conversion Price is subject to adjustment
for certain events (e.g., stock splits, combinations, dividends,
distributions, reclassifications, merger or other corporate change
and dilutive issuances). In addition, if on Nov. 7, 2009, the
then-in-effect Conversion Price is less than the then-current
market price of the company's Class A Common Stock, then the
Conversion Price will be reduced to such Current Market Price.
The Warrant is exercisable for five years at an exercise price of
$0.375 per share, subject to adjustment for certain events, and
has a cashless exercise feature.
About Amacore Group Inc.
Based in Tampa, Florida, The Amacore Group Inc. (OTC BB: ACGI) --
http://www.amacoregroup.com/-- provides health-related membership
benefit programs, insurance programs, and other innovative and
high-quality solutions to individuals, families and employer
groups nationwide.
Through its wholly owned subsidiary, LifeGuard Benefit Solutions
Inc., Amacore now has the ability to provide administrative and
back-office services to other healthcare companies in addition to
expanding its own call center capability through its wholly-owned
subsidiary, JRM Benefits Consultants LLC and US Heath Benefits
Group Inc., a call center-based marketing company. Zurvita Inc.,
Amacore's newly formed, wholly-owned subsidiary specializing in
direct to consumer multi-level marketing, provides yet another
channel for Amacore's ever-increasing range of healthcare and
healthcare-related products.
As of September 30, the company had $18,523,198 in total assets,
and $25,359,274 in total liabilities, resulting in $6,836,076 in
stockholders' deficit.
At Sept. 30, 2008, the company also had negative working
capital of $6,353,348 and an accumulated deficit of $108,102,196.
For the three months ended September 30, the company had a net
loss of $11,175,656. For the nine months ended September 30, the
company had a net loss of $29,849,189.
Going Concern Doubt
As reported by the Troubled company Reporter on June 17, 2008, the
company believes that existing conditions raise substantial doubt
about the company's ability to continue as a going concern. The
company cited sustained operating losses in recent years.
APEX SILVER: Wants Court to Set February 19 as Claims Bar Date
--------------------------------------------------------------
Apex Silver Mines Limited and its affiliate, Apex Silver Mines
Corporation, ask the Hon. James M. Peck of the United States
Bankruptcy Court for the Southern District of New York to set
Feb. 19, 2009, as deadline for creditors and governmental units to
file proofs of claim.
All proofs of claim must be delivered to:
Apex Silver Mines Limited Claims Processing Center
c/o Epiq Bankruptcy Solutions, LLC
FDR Station
P.O. Box 5069
New York, NY 10150-5069
-- or --
Epiq Bankruptcy Solutions, LLC
Attn: Apex Silver Mines Limited Claims Processing
757 Third Avenue, 3rd Floor
New York, NY 10017
A hearing is set for Jan. 26, 2009, at 12:00 p.m., to consider the
Debtors' request. Objections to the request will also be
entertained on that day.
About Apex Silver Mines
Headquartered in Denver, Colorado, Apex Silver Mines Limited --
http://www.apexsilver.com-- explores and develops silver and
other mineral properties in Central and South America. The company
is based in George Town, Cayman Islands. The company and its
affiliate, Apex Silver Mines Corporation, filed for Chapter 11
protection on January 12, 2009 (Bankr. S.D. N.Y. Lead Case No.
09-10182). James L. Bromley, Esq., and Sean A. O'Neal, Esq., at
Cleary Gottlieb Steen & Hamilton LLP, represent the Debtors in
their restructuring efforts. The proposed Davis Graham & Stubbs
LLP as special purpose counsel; Jefferies & Co, Inc. as financial
advisor; and Epiq Bankruptcy Solutions LLC as claims agent. When
the Debtors filed for protection from their creditors, they listed
assets and debts between $500 million to $1 billion each.
APEX SILVER: Files Disclosure Statement and Chapter 11 Plan
-----------------------------------------------------------
Apex Silver Mines Limited and its affiliate, Apex Silver Mines
Corporation, delivered to the Hon. James M. Peck of the United
States Bankruptcy Court for the Southern District of New York a
proposed joint Chapter 11 plan of reorganization and disclosure
statement explaining the plan on Jan. 15, 2009.
The Debtors, Sumitomo Corporation and holders of subordinated
notes concluded that recoveries to creditors would be maximized by
the Debtors' continued operations as a going concern under the
terms of the plan. The Debtors have agreed on the principle terms
of the plan with Sumitomo, the supporting senior lenders and the
subordinated noteholders that hold more than 70% of the
outstanding subordinated notes.
Overview of the Plan
The Plan contemplates, among other things:
i) payment in full in cash either on or after the plan's
effective date to holders of allowed:
a) administrative expense claims;
b) priority tax claims;
c) other priority claims; and
d) other secured claims;
ii) waiver of DIP facility financing claims, subject to the
terms and conditions of the DIP financing facility;
iii) waiver and release of allowed senior claims;
iv) pro rata (a)distribution to the holders of allowed
subordinated note claims of the cash allocation and
(b) issuance to the holders of allowed subordinated note
claims of the new common stock, subject to reduction in an
amount equal to any distributions made to holders of
allowed general unsecured claims and subject to dilution
under the management incentive plan;
v) depending on the election of each holder of a general
unsecured claim
a) payment of Cash equal to the amount of an allowed
general unsecured claim if such allowed general
unsecured claim is a convenience claim, or cash equal to
$10,000 if such allowed general unsecured claim is a
general unsecured claim in excess of $10,000; or
b) a pro rata share of new common stock to be issued under
the plan, subject to a reduction in an amount equal to
any distributions made to holders of subordinated note
claims and subject to dilution under the Management
incentive plan
vi) waiver and release of Sumitomo general unsecured claims;
and
vii) no recovery for holders of statutory subordinated claims or
old equity interests.
The plan further provides for the limited substantive
consolidation of the Debtors' estates, but solely for purposes of
voting on the plan by Class 5 claims and making distributions to
holders of claims in such class under the Plan. On the plan's
effective date:
i) all assets and liabilities of the Debtors will, solely for
voting and distribution purposes for Class 5 Claims, be
treated as if they were merged;
ii) each Class 5 Claim against the Debtors will be deemed a
single Class 5 Claim against and a single obligation of the
Debtors;
iii) any Class 5 Claims filed or to be Filed in the Chapter 11
Cases will be deemed Class 5 claims against the Debtors;
iv) all transfers, disbursements and distributions to Class 5
claims made by any Debtor pursuant to the plan will be
deemed to be made by the Debtors;
v) all intercompany claims by, between, and among the Debtors
and affiliates will, solely for voting and distribution
purposes for Class 5 claims, be eliminated; and
vi) any obligation of the Debtors as to Class 5 claims will be
deemed to be one obligation of all of the Debtors.
Holders of Classes 3, 4, 5 and 6 are are entitled to vote to
accept or reject the plan.
The plan classifies interests against and liens in the Debtors in
eight groups. The classification of treatment of interest and
claims are:
Treatment of Claims
Type Estimated Estimated
Class of Claims Treatment Amount Recovery
----- --------- --------- --------- ---------
unclassified administrative 100%
claims
unclassified priority tax 100%
claims
unclassified DIP financing $35,000,000 0%
1 other priority unimpaired 100%
claims
2 other secured unimpaired 100%
claims
3 senior claims impaired $146,250,000 0%
4 subordinated impaired $290,000,000 unstated
note claims
5 general impaired unstated unstated
unsecured
claim
6 Sumitomo impaired NA 0%
general
unsecured
claims
7 statutory impaired NA 0%
subordinated
claims
8 old equity impaired NA 0%
interests
The Debtor will present on Feb. 4, 2009, at 2:00 p.m., before
Judge Peck to consider the adequacy of the disclosure statement
explaining the plan. Objections, if any, are due Jan. 31, 2009.
Hearing to consider confirmation of the Debtors' plan is set for
March 4, 2009, at 2:00 p.m.
A full-text copy of the Debtors' proposed Chapter 11 plan of
reorganization is available for free at:
http://ResearchArchives.com/t/s?3843
A full-text copy of the Debtors' disclosure statement is available
for free at:
http://ResearchArchives.com/t/s?3844
About Apex Silver Mines
Headquartered in Denver, Colorado, Apex Silver Mines Limited --
http://www.apexsilver.com-- explores and develops silver and
other mineral properties in Central and South America. The company
is based in George Town, Cayman Islands. The company and its
affiliate, Apex Silver Mines Corporation, filed for Chapter 11
protection on January 12, 2009 (Bankr. S.D. N.Y. Lead Case No.
09-10182). James L. Bromley, Esq., and Sean A. O'Neal, Esq., at
Cleary Gottlieb Steen & Hamilton LLP, represent the Debtors in
their restructuring efforts. The proposed Davis Graham & Stubbs
LLP as special purpose counsel; Jefferies & Co, Inc. as financial
advisor; and Epiq Bankruptcy Solutions LLC as claims agent. When
the Debtors filed for protection from their creditors, they listed
assets and debts between $500 million to $1 billion each.
APEX SILVER: Seeks to Employ Jefferies as Financial Advisors
------------------------------------------------------------
Apex Silver Mines Limited and Apex Silver Mines Corporation seek
permission from the U.S. Bankruptcy Court for the Southern
District of New York to employ Jefferies & Company as their
financial advisors, nunc pro tunc to the Petition Date.
The Debtors worked closely with Jefferies in the prepetition
period. The Debtors engaged Jefferies in July 2008 to act as
their financial advisor with respect to the restructuring of their
debt, potential capital raises and M&A marketing efforts. As a
result of the prepetition engagement of Jefferies by the Debtors,
Jefferies has become familiar with the Debtors' business
operations, capital structure, financing documents and other
material information, and is able to assist the Debtors in their
restructuring efforts.
Jefferies provides a broad range of corporate advisory services to
its clients including, without limitation, services pertaining to:
(i) general financial advice, (ii) mergers, acquisitions, and
divestitures, (iii) special committee assignments, (iv) capital
raising and (v) corporate restructurings. Jefferies and its senior
professionals have extensive experience in the reorganization and
restructuring of troubled companies, both out-of-court and in
chapter 11 proceedings. The employees of Jefferies have advised
debtors, creditors, equity constituencies and purchasers in many
reorganizations. Since 2001, these professionals have been
involved in over 125 restructurings representing over $125 billion
in restructured debt.
Richard Nevins, managing director at Jefferies, attests that his
Firm (a) is a "disinterested person" as that term is defined in
section 101(14) of the Bankruptcy Code, as modified by section
1107(b), and (b) does not hold or represent an interest adverse to
the Debtors' estates.
The Debtor proposes to pay the Firm for its services according to
these terms:
-- Jefferies is to be paid a monthly non-refundable fee of
$150,000 for the remainder of the term of the retainer;
and
-- Upon the consummation of any restructuring a $2,275,000
fee.
Prior to the Petition Date, Jefferies received $975,000 in fees
and $95,358.15 in expenses from the Debtors, for prepetition
services rendered and expenses incurred in advising the Debtors.
Jefferies has informed the Debtors that it has already received
payment on account of any fees that accrued prepetition. As of the
Petition Date, Jefferies is owed approximately $18,092.86 for
expenses. To the extent that the payments made to Jefferies prior
to the Petition Date are insufficient to satisfy such expenses,
Jefferies hereby waives any claim for payment thereof.
The Engagement Letter includes an indemnification provision that
is customary in scope. The Debtors believe the Indemnity
Provision is a reasonable term and condition of Jefferies'
engagement.
Headquartered in Denver, Colorado, Apex Silver Mines Limited --
http://www.apexsilver.com-- explores and develops silver and
other mineral properties in Central and South America. The
company and its affiliate, Apex Silver Mines Corporation, filed
for Chapter 11 protection on January 12, 2009 (Bankr. S.D. N.Y.
Lead Case No. 09-10182). James L. Bromley, Esq., and Sean A.
O'Neal, Esq., at Cleary Gottlieb Steen & Hamilton LLP, represent
the Debtors in their restructuring efforts. The proposed Davis
Graham & Stubbs LLP as special purpose counsel; Jefferies & Co,
Inc. as financial advisor; and Epiq Bankruptcy Solutions LLC as
claims agent. When the Debtors filed for protection from their
creditors, they listed assets and debts between $500 million to
$1 billion each.
APEX SILVER: Seeks to Employ Walkers as Cayman Counsel
------------------------------------------------------
Apex Silver Mines Limited and Apex Silver Mines Corporation seek
to employ Walkers as Section 327(e) special counsel to provide
advice to the Debtors relating to Cayman law and the parallel
Cayman proceedings, and to instigate, undertake and oversee those
proceedings, nunc pro tunc to the Petition Date.
The Firm's hourly rates are:
Partners $750 - 850
Associates $350 - 675
Beginning in November 2008, Walkers has represented the Debtors
regarding Cayman corporate law and related matters. Over the
course of its relationship with the Debtors, Walkers has become
thoroughly familiar with the Debtors' businesses and affairs.
Guy Locke, Esq., a partner at Walkers, will provide primary
representation to the Debtors.
Mr. Locke attests that his Firm has not represented, and does not
have any connection with, the Debtors, their creditors, equity
security holders or any other parties in interest in any matters
relating to the Debtors or their estates.
The Firm currently represents certain of the Debtors' creditors,
equity holders and other parties in interest in matters wholly
unrelated to these proceedings. Walkers has fully informed the
Debtors of its ongoing representation of such entities, and the
Debtors have consented to the Firm's continued representation of
these entities in matters unrelated to these proceedings. The
Debtors believe that Walkers' current and future representation of
these entities will not in any way adversely affect the Firm's
representation of the Debtors.
Headquartered in Denver, Colorado, Apex Silver Mines Limited --
http://www.apexsilver.com-- explores and develops silver and
other mineral properties in Central and South America. The
company and its affiliate, Apex Silver Mines Corporation, filed
for Chapter 11 protection on January 12, 2009 (Bankr. S.D. N.Y.
Lead Case No. 09-10182). James L. Bromley, Esq., and Sean A.
O'Neal, Esq., at Cleary Gottlieb Steen & Hamilton LLP, represent
the Debtors in their restructuring efforts. The proposed Davis
Graham & Stubbs LLP as special purpose counsel; Jefferies & Co,
Inc. as financial advisor; and Epiq Bankruptcy Solutions LLC as
claims agent. When the Debtors filed for protection from their
creditors, they listed assets and debts between $500 million to
$1 billion each.
APEX SILVER: Seeks to Hire Davis Graham as Special Corp. Counsel
----------------------------------------------------------------
Apex Silver Mines Limited and Apex Silver Mines Corporation seek
permission from the U.S. Bankruptcy Court for the Southern
District of New York to employ Davis Graham & Stubbs LLP as their
special counsel, nunc pro tunc to the Petition Date.
Davis Graham will provide them with general corporate advice, SEC-
related advice, potential litigation matters, claims
reconciliation, and related matters.
Christopher L. Richardson, Esq., a partner at Davis Graham, will
provide primary representation to the Debtors.
Davis Graham's hourly rates are:
Partners $260 - 500
Associates $180 - 325
Paralegals $125 - 175
Mr. Richardson attests that his Firm and its professionals have
not represented, and do not have any connection with, the Debtors,
their creditors, equity security holders or any other parties in
interest in any matters relating to the Debtors or their estates.
Deborah Friedman, Senior Vice President and General Counsel of
Apex, is a partner at Davis Graham who took a leave of absence
from the firm to join Apex in July of 2007. When she left Davis
Graham, her partnership status changed to that of a partner on
leave of absence. Although she is still a partner at Davis
Graham, she has no involvement in day-to-day activities or
decisions at the firm. She has not received any compensation from
the firm since January 15, 2008 when she received a share of the
firm's income based on her partial year with the firm in 2007.
While she no longer receives any share of the firm's income as a
partner on leave of absence, she, along with other partners,
maintains a capital account at the firm. During the second week
of December 2008, Ms. Friedman and the other partners in the firm
received fixed rate interest payments on their capital accounts.
Mr. Richardson says the Firm currently represents, or has
represented within the last six years, certain of the Debtors'
creditors and other potential parties in interest in matters
wholly unrelated to these proceedings. In particular, Davis
Graham represents or has represented, in matters wholly unrelated
to the Bankruptcy Cases, Ernst & Young, LP, Federal Express
Corporation, Interactive Business Systems, Inc., JPMorgan Chase
Bank, N.A., N.M. Rothschild & Sons Limited, Washington Group
International, AIG Insurance, HSBC Bank USA, Wells Fargo Bank,
N.A, Wells Fargo & Company, R.R. Donnelley & Sons Company, Hein &
Associates, Barclays Bank PLC, Oppenheimer Funds, Inc., Royal and
Sun Alliance, Credit Suisse First Boston, Banco Nacional de
Mexico, Deutsche Bank and Goldman Sachs. Davis Graham has fully
informed the Debtors of its ongoing representation of such
entities, and the Debtors have consented to the Firm's continued
representation of these entities in matters unrelated to these
proceedings. The Debtors believe that Davis Graham's current and
future representation of these entities will not in any way
adversely affect the Firm's representation of the Debtors.
Headquartered in Denver, Colorado, Apex Silver Mines Limited --
http://www.apexsilver.com-- explores and develops silver and
other mineral properties in Central and South America. The
company and its affiliate, Apex Silver Mines Corporation, filed
for Chapter 11 protection on January 12, 2009 (Bankr. S.D. N.Y.
Lead Case No. 09-10182). James L. Bromley, Esq., and Sean A.
O'Neal, Esq., at Cleary Gottlieb Steen & Hamilton LLP, represent
the Debtors in their restructuring efforts. The proposed Davis
Graham & Stubbs LLP as special purpose counsel; Jefferies & Co,
Inc. as financial advisor; and Epiq Bankruptcy Solutions LLC as
claims agent. When the Debtors filed for protection from their
creditors, they listed assets and debts between $500 million to
$1 billion each.
ASARCO: Inks $3MM Pact Relating to Missouri Superfund Site Cleanup
------------------------------------------------------------------
ASARCO LLC asks the U.S. Bankruptcy Court for the Southern
District of Texas to approve a compromise and settlement with:
* The Doe Run Resources Corporation, doing business as The Doe
Run Company,
* DII Industries, LLC,
* Cyprus Amax Minerals Company,
* Homestake Lead Company of Missouri,
* Teck Cominco American Incorporated, and
* BP America, Inc.,
The settlement relates to the Viburnum Trend Haul Roads Site
located in Reynolds, Iron, and Dent Counties, in Missouri.
The VTHR Site is an alleged zone with elevated lead
concentrations along a series of roadways located in Reynolds,
Iron, and Dent Counties, Missouri, over which ASARCO, BP and the
VTHR Claimants hauled lead concentrate and lead ore at various
times and in varying amounts between one or more mines, mills,
and smelters in the area, including the Glover Smelter and other
smelters and points of transshipment in Missouri.
The United States Environmental Protection Agency has identified
ASARCO, BP, and the VTHR Claimants as potentially responsible
parties under the Comprehensive Environmental Response
Compensation and Liability Act for recovery of costs to
investigate and remediate the VTHR Site in 2004.
The key terms of the parties' settlement agreement are:
(a) The VTHR Claimants and BP will jointly have one finally
allowed general unsecured claim aggregating $3,000,000,
which will not be subject to subordination to other
general unsecured claims or to reduction or
reconsideration;
(b) BP and the VTHR Claimants have additionally agreed that:
* all distributions or recoveries related to the Allowed
Claim will be paid to the VTHR Claimants;
* the VTHR Claimants will be entitled to cast the sole
ballot or vote relating to the Allowed Claim in
conjunction with voting on any plan of reorganization or
liquidation submitted to creditors for voting in the
Debtors' reorganization cases; and
* BP will be entitled to and is granted a credit against
any liability to the VTHR Claimants with regard to the
VTHR Site in an amount equal to one-half of the cash
actually received by the VTHR Claimants on account of
the Allowed Claim, and net cash received by the VTHR
Claimants on account of any non-cash distributions on
the Allowed Claim;
(c) ASARCO releases BP and the VTHR Claimants, jointly and
severally, from any claims arising out of or in any way
connected with the VTHR Site;
(d) BP and the VTHR Claimants release ASARCO from any claims
arising out of or in any way connected with the VTHR Site;
and
(e) There will be no releases of claims between the VTHR
Claimants and BP. All rights, claims and defenses of the
VTHR Claimants and BP against one another are expressly
preserved. They also reserve the right to assert and
defend claims against one another with respect to any
liability of BP to the VTHR Claimants with regard to the
VTHR Site.
ASARCO asserts the VTHR Settlement is reasonable, fair and
equitable. It saves significant attorney's fees and expenses
that would otherwise be expended in prosecuting the estimation of
issues relating to the VTHR Site. It will also allow valuable
Court time to be allocated to contested claims under the case
management order, ASARCO adds.
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on Aug. 9, 2005 (Bankr.
S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L.
Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P.,
and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and
Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C.,
represent the Debtor in its restructuring efforts. Lehman
Brothers Inc. provides the ASARCO with financial advisory services
and investment banking services. Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.
When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.
ASARCO LLC has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525). They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774
to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
The Debtors submitted to the Court a joint plan of reorganization
and disclosure statement on July 31, 2008. The plan incorporates
the sale of substantially all of the Debtors' assets to Sterlite
Industries, Ltd., for US$2,600,000,000.
Americas Mining Corporation, an affiliate of Grupo Mexico SAB de
CV, submitted a reorganization plan to retain its equity interest
in ASARCO LLC, by offering full payment to ASARCO's creditors in
connection with ASARCO's Chapter 11 case. AMC would provide up to
US$2.7 billion in cash as well as a US$440 million guarantee to
assure payment of all allowed creditor claims, including payment
of liabilities relating to asbestos and environmental claims.
AMC's plan is premised on the estimation of the approximate
allowed amount of the claims against ASARCO.
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the chapter 11 proceeding
undertaken by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ASARCO LLC: Asks Court to Disallow 7 Bondholder Claims
------------------------------------------------------
ASARCO LLC asks Judge Richard Schmidt of the U.S. Bankruptcy Court
for the Southern District of Texas to disallow Claim Nos. 18575,
18576, 18587, 18588, 18589, 18590 and 18591. The Claims, which
were asserted by different bondholders, arose under ASARCO's seven
series of unsecured long-term bond debt.
The Claims and the bondholders are:
(1) Claim No. 18575, including Claim Nos. 10415 and 18291,
were filed by Wilmington Trust Company under the 8.5%
Debentures Due 2025;
(2) Claim No. 18576, including Claim Nos. 189 and 18293, were
filed by Wells Fargo Bank under the ASARCO Incorporated
7.875% Debentures due 2013;
(3) Claim No. 18590, including Claim No. 10222, were filed by
Deutsche Bank Trust Company Americas under the Industrial
Development Authority of the County of Gila, Arizona
Debentures due 2027;
(4) Claim No. 18589, including Claim No. 10219, were filed by
Deutsche Bank Trust Company Americas under Lewis and Clark
County, Montana Debentures due 2027;
(5) Claim No. 18588, including Claim No. 10221, were filed by
Deutsche Bank Trust Company Americas under Nueces River
Authority Debentures due 2027;
(6) Claim No. 18587, including Claim No. 10218, were filed by
Deutsche Bank Trust Company Americas under the Lewis and
Clark County, Montana Debentures due 2033; and
(7) Claim No. 18591, including Claim No. 10220, were filed by
Deutsche Bank Trust Company Americas under Nueces River
Authority Debentures due 2018.
The Bondholders asserted claims for not only the principal and
prepetition accrued interest owing under the bonds, but also
approximately $225,000,000 in postpetition interest, interest on
prepetition and postpetition interest, pre-payment "no-call"
damages, and prepayment premiums, ASARCO informs the Court.
ASARCO anticipates that the Bondholders will oppose any future
amended plan of reorganization that does not provide for the
allowance or payment of their Claims. Although ASARCO does not
object to the allowance of claims for the principal and
prepetition accrued interest due under the bonds, it disputes all
claims pertaining to the postpetition interest, interest-on-
interest, pre-payment no-call damages, and pre-payment premium.
ASARCO, therefore, informs Judge Schmidt that it submits the
objection to the Claims to facilitate plan confirmation process;
and address in advance of the confirmation hearing a potential
objection to the Debtors' amended plan.
Judge Schmidt will commence a hearing on March 2, 2009, to
consider ASARCO's objection.
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on Aug. 9, 2005 (Bankr.
S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L.
Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P.,
and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and
Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C.,
represent the Debtor in its restructuring efforts. Lehman
Brothers Inc. provides the ASARCO with financial advisory services
and investment banking services. Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.
When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.
ASARCO LLC has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525). They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774
to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
The Debtors submitted to the Court a joint plan of reorganization
and disclosure statement on July 31, 2008. The plan incorporates
the sale of substantially all of the Debtors' assets to Sterlite
Industries, Ltd., for US$2,600,000,000.
Americas Mining Corporation, an affiliate of Grupo Mexico SAB de
CV, submitted a reorganization plan to retain its equity interest
in ASARCO LLC, by offering full payment to ASARCO's creditors in
connection with ASARCO's Chapter 11 case. AMC would provide up to
US$2.7 billion in cash as well as a US$440 million guarantee to
assure payment of all allowed creditor claims, including payment
of liabilities relating to asbestos and environmental claims.
AMC's plan is premised on the estimation of the approximate
allowed amount of the claims against ASARCO.
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the chapter 11 proceeding
undertaken by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ASSET FAMILY: Court Dismisses Case as a Bad Faith Filing
--------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
has approved Yellow Funding Corp.'s request for the dismissal of
Asset Family Co., LLC's Chapter 11 case as a bad faith filing,
without prejudice to the refiling of the case by the Debtor's
principal, John Gordon Jones.
Yellow Funding Corp., is the holder of a note secured by a deed of
trust of the Debtor's real property located at 2700 Benedict
Canyon, in Beverly Hills, California. Yellow Funding told the
Court that the property was transferred by Mr. Jones to the Debtor
one day before the scheduled foreclosure sale of the property.
The Debtor has no unsecured creditors, and is exclusively owned by
Mr. Jones. The transfer was for no consideration.
Based in Encino, California, Asset Family Co., LLC filed for
Chapter 11 relief on Oct. 16, 2008 (Bankr. C.D. Calif. Case No.
08-18110). Barry K. Rothmamn, Esq., at the Law offices of Barry
K. Rothman, represents 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
$1 million and $10 million.
ATLANTIC WINE: September 30 Balance Sheet Upside-Down by $87,500
----------------------------------------------------------------
Atlantic Wine Agencies Inc.'s balance sheet at Sept. 30, 2008,
showed total assets of $0, total current liabilities of $87,500
and stockholders' deficit of $87,500. The Company had disclosed
assets of $2,473,149 ad debts of $2,255,425 as of March 31, 2008.
On September 22, 2008, the Company entered into a material
definitive agreement with Fairhurst Properties, S.A. Fairhurst is
a company owned 100% by the Company?s former principal shareholder
and Chief Executive Officer. The spin-out agreement provides for
the ?split-off? of all the Company?s interests in two wholly-owned
subsidiaries, Mount Rozier Properties (Pty) Ltd. and Mount Rozier
Estate (Pty) Ltd. These wholly owned subsidiaries owned all the
assets of the Company. In exchange for the assets surrendered and
spun-off, Fairhurst assumed all of the debt and obligations of the
subsidiary.
For three months ended Sept. 30, 2008, the company posted net loss
of $224,410 compared with net loss $92,797 for the same period in
the previous year.
For six months ended Sept. 30, 2008, net loss of $519,100 compared
with net loss of $258,619 for the same period in the previous
year.
For the six-months ended Sept. 30, 2008, net cash used to fund
operating activities aggregated $87,500, there was no net cash
utilized by investing activities aggregated and net cash provided
by financing activities aggregated $87,500. By way of comparison,
for the six-months ended Sept. 30, 2008, net cash used to fund
operating activities aggregated $356,266, net cash utilized by
investing activities aggregated $73,646 and net cash provided by
financing activities aggregated $446,795.
A full-text copy of the 10-Q is available for free at
http://ResearchArchives.com/t/s?3839
About Atlantic Wine
Based in Somerset West, South Africa, Atlantic Wine Agencies Inc.
(OTC BB: AWNA.OB) -- http://www.atlanticwineagencies.com/-- was
incorporated in the State of Florida as New England Acquisitions,
Inc., on April 8, 2001. On Jan. 13, 2004, the company changed its
name to Atlantic Wine Agencies. The company, through its two
wholly owned subsidiaries, Mount Rozier Estates (Pty) Limited and
Mount Rozier Properties (Pty) Limited, owns a vineyard in the
Stellenbosch region of Western Cape, South Africa. The vineyard
and surrounding properties consist of 80.9 hectares of arable land
for viticultural as well as residential and commercial purposes.
Going Concern Doubt
Meyler & company, LLC, in Middletown, New Jersey, expressed
substantial doubt about Atlantic Wine Agencies Inc.'s ability to
continue as a going concern after auditing the company's
consolidated financial statements for the year ended March 31,
2008.
The auditing firm disclosed that the company has incurred
cumulative losses of $8,511,289 since inception, has negative
working capital of $2,013,073, and has existing uncertain
conditions the company faces relative to its ability to obtain
capital and operate successfully.
AURA SYSTEMS: Posts $2.5 Mil. Net Loss in Quarter Ended Nov. 30
---------------------------------------------------------------
Aura Systems, Inc., and subsidiaries reported that net revenues
for the three months ended November 30, 2008, increased $203,351
to $1,065,172 from $861,821 in the three months ended Nov. 30,
2007, an increase of 24%.
"Cost of goods decreased $228,641 (32%) to $492,837 in the Third
Quarter FY2009 from $721,478 in the Third Quarter FY2008,
primarily as a result of the product mix sold.
"Engineering, research and development expenses increased $83,647
(18%) to $556,779 in the Third Quarter FY2009 from $473,132 in the
Third Quarter FY 2008. The increase in the current year period is
primarily attributable to the acquisition of our facility on an
operating lease, in Georgia.
"Selling, general and administrative expense increased $453,843
(27%) to $2,114,238 in the Third Quarter FY2009 from $1,660,395 in
the Third Quarter FY2008. Approximately $210,000 (46%) of the
increase was attributable to the acquisition of our Georgia
facility. Additionally, approximately $74,000 of the increase is
attributable to the expensing of employee options granted in
FY2008. The balance of the increase is due to the increase in
personnel and expenses in the sales and marketing area as we
worked to expand our customer base.
"Net interest expense in the Third Quarter FY2009 increased
$383,313 to $422,306, from $38,993 in the Third Quarter FY2008.
The increase is attributable to a beneficial conversion expense on
our secured notes of $368,900, the interest expense on the 7%
Convertible notes that were incurred in January and June, 2008,
the interest on the 10% demand note due to a member of our Board
of Directors, and the interest on the demand notes due to others,
partially offset by a reduction in the interest on our secured
convertible notes as these notes have now been paid off.
"Our net loss for the Third Quarter FY2009 increased $488,582 to
$2,520,759 from $2,032,177 in the Third Quarter FY2008, primarily
as a result of the acquisition of our facility in Georgia, the
charge for the scrapping of obsolete inventory, the charge for the
expensing of options and the increased interest expense."
For the nine months ended November 30, 2008, and the year ended
February 29, 2008, the company incurred a net loss of $7,384,720
and $8,960,486 respectively, on net revenues of $1,891,157 and
$2,849,331, respectively.
Acting Chief Financial Officer Melvin Gagerman disclosed in a
regulatory filing dated January 14, 2009, that as a result of the
company's losses from operations, there is substantial doubt about
the company's ability to continue as a going concern. "Our
ability to continue as a going concern is dependent upon the
successful achievement of profitable operations, the ability to
generate sufficient cash from operations, and the ability to
obtain financing resources to meet our obligations and our
operating needs. There is no assurance that [these] efforts will
be successful."
As of November 30, 2008, the company's balance sheet showed total
assets of $5,363,813, total liabilities of $4,398,125, and total
stockholders' equity of $965,688.
A full-text copy of the company's quarterly report is available
for free at: http://researcharchives.com/t/s?383f
About Aura Systems
Aura Systems, Inc., designs, assembles and sells the AuraGen(R),
its patented mobile power generator that uses the engine of a
vehicle as the prime driver to generate electric power. The
AuraGen(R) delivers on-location, plug-in electricity for any end
use, including industrial, commercial, recreational and military
applications. To date, thousands of AuraGen(R) units have been
sold in numerous industries, including recreational, utilities,
telecommunications, emergency and rescue, public works, oil and
gas, government and the military.
However, the company has not yet achieved a level of AuraGen(R)
sales sufficient to generate positive cash flow. Accordingly, the
company has depended on repeated infusions of cash in order to
maintain liquidity as it has sought to develop sales.
AZTEC OIL: Nov. 30 Balance Sheet Upside Down by $1.9 Million
------------------------------------------------------------
Aztec Oil & Gas, Inc., incurred a net loss of $527,509 for the
three months ended November 30, 2008, compared with a net loss of
$210,870 for the three months ended November 30, 2007. The
increase was primarily attributable to the increase in general and
administrative expenses and impairment on oil and gas properties,
according to CEO & Chairman Franklin C Fisher, Jr., and Chief
Financial Officer Larry A. Hornbrook, in a regulatory filing dated
January 14, 2009.
Aztec Oil has an accumulated deficit of $6,604,216, a working
capital deficit of $1,552,147, total assets of $1,738,557, total
liabilities of $1,767,315, minority interest of $1,939,125, and
total stockholders' deficit of $1,967,883 as of November 30, 2008.
"These conditions raise substantial doubt as to Aztec's ability to
continue as a going concern," Mr. Fisher and Mr. Hornbrook said.
CSI Energy, LP, a company controlled by Mr. Fisher, has committed
to funding any operating deficits for the current year.
As of November 30, 2008, the company had $91,901 in cash as
compared to $290,323 as of August 31, 2008. The company has
limited financial resources available, which has had an adverse
impact on the company's liquidity, activities and operations.
These limitations have adversely affected the company's ability to
obtain certain projects and pursue additional business. "We may
have to borrow money from shareholders or issue debt or equity or
enter into a strategic arrangement with a third party. There can
be no assurance that additional funds will be available to us,"
Mr. Fisher and Mr. Hornbrook said.
"Aztec has not demonstrated profitability to date and anticipates
that it will continue to incur net losses for the foreseeable
future. The extent of these losses will depend, in part, on the
amount of expenditures the company incurs in executing its
business strategy. Aztec . . . expects that its operating expenses
will increase as it hones its new business strategy, especially in
the areas of acquisitions. Thus, Aztec will need to generate
additional revenues to achieve profitability. To the extent that
increases in its operating expenses precede or are not
subsequently followed by commensurate increases in revenues, or
that Aztec is unable to adjust operating expense levels
accordingly, the company's business, results of operations and
financial condition would be materially and adversely affected.
There can be no assurances that the company can achieve or sustain
profitability or that the company's operating losses will not
increase in the future."
A full-text copy of the company's quarterly report is available
for free at: http://researcharchives.com/t/s?383e
About Aztec Oil
Aztec Oil & Gas, Inc., is a Houston-based, oil and gas exploration
and production company focusing on numerous areas in the U.S.
BALLY TOTAL: Seeks to Shield CEO Sheehan From Rival's Lawsuit
-------------------------------------------------------------
Bally Total Fitness of Greater New York, Inc., and its debtor-
affiliates, asks the U.S. Bankruptcy Court for the Southern
District of New York to issue an injunction, pursuant to Section
105(a) of the Bankruptcy Code:
(i) extending the automatic stay to an action pending in the
United States District Court for the Northern District
of Illinois against Michael Sheehan, the Debtors' chief
executive officer; or
(ii) in the alternative, if the automatic stay applies by its
own terms to the pending Illinois action against
Mr. Sheehan, enforcing the automatic stay.
Before joining Bally Total Fitness, Mr. Sheehan worked at 24 Hour
Fitness for approximately eight years. According to Kenneth H.
Eckstein, Esq., at Kramer Levin Naftalis & Frankel LLP, in New
York, 24 Hour Fitness is a commercial operator of fitness centers
in the United States, and a competitor of Bally Total Fitness.
On June 23, 2008, Mr. Sheehan resigned from 24 Hour Fitness and
accepted the position of chief executive officer with Bally Total
Fitness, effective July 1, 2008.
On June 26, 2008, 24 Hour Fitness and its parent, 24 Hour
Worldwide, Inc., filed an action against Mr. Sheehan in the
Superior Court of the State of California, County of Contra
Costa, for misappropriation of trade secrets, breach of an
alleged covenant not to compete and of confidentiality
obligations contained in the employment agreement, breach of
provisions of a stockholder's agreement, and unfair business
practices. 24 Hour Fitness sought both preliminary and permanent
injunctions barring Mr. Sheehan from working at Bally Total
Fitness, competing with 24 Hour Fitness, and using, disclosing or
retaining any of 24 Hour Fitness's alleged trade secrets and
confidential information.
The 24 Hour Fitness Entities also filed a complaint against Bally
Total Fitness and Mr. Sheehan in the Federal District Court in
Chicago, for misappropriation of trade secrets and breach of
fiduciary duty. The 24 Hour Fitness entities alleged that Mr.
Sheehan used 24 Hour Fitness' property and resources, a 4-
gigabyte "flash drive" for his personal benefit and that of Bally
Total Fitness. Moreover, they alleged that Mr. Sheehan spent
time paid by 24 Hour Fitness, to supervise the assembly of 11
binders containing detailed earnings information for every 24
Hour Fitness club location, an interview with the Debtors'
management and members of the Board of Directors, and generally
assembled a working knowledge of confidential 24 Hour Fitness
information.
On October 24, 2008, the 24 Hour Fitness Entities commenced a
third action against Bally Total Fitness and Mr. Sheehan, in the
Northern District of Illinois, for violation of the Computer
Fraud and Abuse Act, misappropriation of trade secrets, and
breach of fiduciary duty. In this action, 24 Hour Fitness
abandoned its claims for injunctive relief barring Mr. Sheehan's
employment with Debtors.
The Debtors and Mr. Sheehan filed a notice of pendency of cases
under Chapter 11 of the Bankruptcy Code on December 10, 2008, in
the Third Action. However, on December 19, 2008, 24 Hour Fitness
filed a First Amended Complaint in the Third Action, naming the
Debtors and Mr. Sheehan as defendants.
Mr. Eckstein maintains that as an officer of Bally Total Fitness,
Mr. Sheehan is entitled to indemnification from the Debtors
against all liability and loss suffered and expenses, including
attorneys' fees, reasonably incurred in the Third Action.
Moreover, Mr. Eckstein insists, the Bankruptcy Court should
exercise its authority, pursuant to Section 105(a), to extend the
automatic stay to the continued prosecution of the Third Action
against Michael Sheehan, for so long as the Debtors remain in
bankruptcy.
About Bally Total Fitness
Based in Chicago, Illinois, Bally Total Fitness Holding Corp.
(Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates
fitness centers in the U.S., with over 375 facilities located in
26 states, Mexico, Canada, Korea, China and the Caribbean under
the Bally Total Fitness(R), Bally Sports Clubs(R) and Sports Clubs
of Canada (R) brands.
Bally Total and its affiliates filed for Chapter 11 protection
7on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after
obtaining requisite number of votes in favor of their pre-
packaged chapter 11 plan. Joseph Furst, III, Esq. at Latham &
Watkins, L.L.P. represents the Debtors in their restructuring
efforts. As of June 30, 2007, the Debtors had US$408,546,205 in
total assets and US$1,825,941,54627 in total liabilities.
The Debtors filed their Joint Prepackaged Plan & Disclosure
Statement on July 31, 2007. The Court confirmed the Plan in Sept.
2007. The Plan was declared effective Oct. 1, 2007.
Bally Total Fitness Holding Corp. and its debtor-affiliates and
subsidiaries again filed voluntary petitions under Chapter 11 on
Dec. 3, 2008 (Bankr. S. D. N. Y., Lead Case No. 08-14818). Their
counsel is Kenneth H. Eckstein, Esq. at Kramer Levin Naftalis &
Frankel LLP, in New York. As of September 30, 2008, the Company
(including non-debtor affiliates) had consolidated assets totaling
approximately $1.376 billion and recorded consolidated liabilities
totaling approximately $1.538 billion.
Bankruptcy Creditors' Service, Inc., publishes Bally Bankruptcy
News. The newsletter provides gavel-to-gavel coverage of the
chapter 11 proceedings of Bally Total Fitness Holding Corp. and
its debtor-affiliates (http://bankrupt.com/newsstand/or 215/945-
7000)
BALLY TOTAL: Gets Court Okay to Walk Away From Leases & Contracts
-----------------------------------------------------------------
Pursuant to Section 365 of the Bankruptcy Code, Bally Total
Fitness Holding Corp. and its debtor-affiliates sought and
obtained authority from the U.S. Bankruptcy Court for the Southern
District of New York to reject certain non-residential real
property leases and sub-leases, and executory contracts identified
as burdensome to the estates, effective to the later of the
relevant rejection date or the date of the surrender of the
premises.
The Debtors are also authorized to abandon any remaining property
on the premises. In the event of the abandonment of any
Remaining Property, any affected landlord may dispose of that
property in its discretion without the need for relief from the
automatic stay, without any liability to any third party, and
without prejudice to its right to assert any claims based on the
abandonment.
According to Kenneth H. Eckstein, Esq., at Kramer Levin Naftalis
& Frankel LLP, in New York, the Debtors have determined that they
will close 19 locations, where payment of rent is economically
burdensome and the revenues generated by those locations do not
justify keeping them open. The Debtors, in the exercise of their
business judgment, have decided to reject the leases associated
with the Closed Locations.
In addition, the Debtors have decided to reject Executory
Contracts related to their operations at the Closed Locations,
since those contracts will have no material economic value to the
Debtors or their estates once the locations are closed. Mr.
Eckstein clarified that two retail contracts to be rejected are
not directly related to the Leases.
A complete list of Leases and Executory Contracts to be rejected
is available for free at:
http://bankrupt.com/misc/BallyRejectedContracts01.pdf
Prior to the approval of the rejection, 525 West Middle Turnpike
Associates Limited Partnership, told the Court that the Debtors
defaulted on their monthly installments on November 1, 2008, and
December 1, 2008, due under a lease agreement dated October 3,
2007. West Middle said that the proposed order should be
clarified to state that the Debtors' timely performance of their
obligations will continue until the effective date of the
rejection. West Middle further proposed that it will have an
allowed administrative claim for use and occupancy from the
effective date of the rejection, through and including the date
on which the Debtors surrender the Premises.
The Court ruled that rejection of the leases will be effective to
the later of (i) the relevant Rejection Effective Date as
identified by the Debtors, or (ii) the date of the surrender of
the Premises.
The Debtors are directed to provide the landlord with a written
notice of unequivocal surrender of the Premises, and the return
of the keys, key codes and alarm codes associated with the lease.
More Unexpired Contracts Scrapped
The Debtors also sought and obtained the Court's authority to
reject four executory contracts, which are:
(1) agreements pertaining to indoor advertising at certain
of the Debtors' fitness clubs;
(2) agreements pertaining to dance instruction at one of the
Debtors' locations; and
(3) agreements pertaining to the employment of certain senior
management personnel.
According to Mr. Eckstein, the Debtors have reviewed the Executory
Contracts and have determined that they no longer hold value to
the Debtors' estates, and assumption of those agreements will be
detrimental to the Debtors' estates. The Executory Contracts are
for services that the Debtors no longer require, Mr. Eckstein
adds.
The Executory Contracts are:
Contract Counterparty Services Provided
-------- ------------ -----------------
Indoor Print Space AllOver Media Indoor Signage
Rental Agreement dated
September 23, 2008
Independent Contractor U-R Dancing Ballroom Dancing
Agreement dated Instructor
November 1, 2007
Employment Agreement Sandor Feher Regional Vice President
dated January 1, 2003 Employment Agreement
Employment Agreement Howard Reser Regional Vice President
dated January 1, 2003 Employment Agreement
Two Leases Rejected
Meanwhile, the Debtors seek the Court's authority to reject two
leases, effective as of January 31, 2009:
Counterparty Location of Premises
------------ --------------------
Joshua Green Corporation Bridle Trails
6601 132 Avenue NE
Kirkland, WA
Lupoi Properties Walnut Creek
2150 North Broadway
Walnut Creek, CA
According to Mr. Eckstein, the Debtors have already ceased
operations at the Lease Premises, and the Leases are due to expire
by their own terms.
The Debtors also seek to abandon the property on the Lease
Premises, since the cost of retrieving and reselling the
Abandoned Property exceeds any recovery for the Abandoned
Property.
About Bally Total Fitness
Based in Chicago, Illinois, Bally Total Fitness Holding Corp.
(Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates
fitness centers in the U.S., with over 375 facilities located in
26 states, Mexico, Canada, Korea, China and the Caribbean under
the Bally Total Fitness(R), Bally Sports Clubs(R) and Sports Clubs
of Canada (R) brands.
Bally Total and its affiliates filed for Chapter 11 protection
7on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after
obtaining requisite number of votes in favor of their pre-
packaged chapter 11 plan. Joseph Furst, III, Esq. at Latham &
Watkins, L.L.P. represents the Debtors in their restructuring
efforts. As of June 30, 2007, the Debtors had US$408,546,205 in
total assets and US$1,825,941,54627 in total liabilities.
The Debtors filed their Joint Prepackaged Plan & Disclosure
Statement on July 31, 2007. The Court confirmed the Plan in Sept.
2007. The Plan was declared effective Oct. 1, 2007.
Bally Total Fitness Holding Corp. and its debtor-affiliates and
subsidiaries again filed voluntary petitions under Chapter 11 on
Dec. 3, 2008 (Bankr. S. D. N. Y., Lead Case No. 08-14818). Their
counsel is Kenneth H. Eckstein, Esq. at Kramer Levin Naftalis &
Frankel LLP, in New York. As of September 30, 2008, the Company
(including non-debtor affiliates) had consolidated assets totaling
approximately $1.376 billion and recorded consolidated liabilities
totaling approximately $1.538 billion.
Bankruptcy Creditors' Service, Inc., publishes Bally Bankruptcy
News. The newsletter provides gavel-to-gavel coverage of the
chapter 11 proceedings of Bally Total Fitness Holding Corp. and
its debtor-affiliates (http://bankrupt.com/newsstand/or 215/945-
7000)
BALLY TOTAL: Gets Court Nod to Maintain AIG Insurance Program
-------------------------------------------------------------
In connection with the operation of their businesses, Bally Total
Fitness Holding Corp. and its affiliates are required to carry
various insurance policies with certain insurance affiliates of
American International Group, Inc., including workers'
compensation, automobile liability, commercial general liability
and umbrella commercial general liability.
The Debtors' Existing Insurance Program consists of:
(a) Workers' Compensation Program with National Union Fire
Insurance Company of Pittsburg, PA, an AIG affiliate,
which provides coverage for claims arising from
December 15, 2006 through December 15, 2008;
(b) an auto liability insurance program with American Home
Assurance, an AIG affiliate, which provides coverage for
claims from December 15, 2006 through December 15, 2008;
and
(c) General Liability Program with Lexington Insurance
Company, an AIG affiliate, as well as National Union, for
claims arising from October 1, 2006 to December 15, 2008.
The coverage period for the Debtors' existing insurance program
ended on December 15, 2008. However, the coverage and programs
continue under its policies and claimants are allowed to assert
claims for injuries incurred during the coverage period.
The Debtors state that they have remained current on their
obligations under the Existing Insurance Program, and do not
believe they are in default of any provision under the policy.
Against this backdrop, the Debtors sought and obtained authority
from the U.S. Bankruptcy Court for the Southern District of New
York to assume the Existing Insurance Programs, and to enter into
a renewal insurance program with AIG's affiliates pursuant to
Section 365 of the Bankruptcy Code. Judge Burton Lifland
permitted the Debtors to execute all documentation necessary to
assume the Existing Insurance Program. The Debtors are also
allowed to enter into the Renewal Insurance Program, and into
further extensions or renewals of the Program without further
Court order.
In the event of a default by the Debtors under the Insurance
Programs, AIG and its affiliates are authorized to exercise all
contractual rights in accordance with the terms of the Insurance
Programs, without further Court order.
The Court has lifted the automatic stay to allow AIG to exercise
its rights, in the event of a default, to cancel the Insurance
Programs, to foreclose on any collateral, and to receive and
apply the unearned or returned premiums to the Debtors'
outstanding obligations.
Meanwhile, the Debtors sought and obtained the Court's permission
to honor the terms of their insurance policies, and maintain and
renew postpetition financing of insurance premiums. The Court
held that the Debtors may pay prepetition premiums necessary to
maintain insurance coverage and surety bonds in current effect, in
the ordinary course of business, as are necessary to avoid
cancellation, default, or impairment to the Policies and Surety
Bonds. The Court directed all banks and financial institutions to
receive, process, honor, and pay all checks and electronic payment
requests when presented for payment.
The Debtors maintain various insurance policies providing
coverage for property, general liability, excess liability,
workers' compensation, automobile liability, earthquake
liability, commercial crime coverage, and directors' and
officers' liability, among others.
According to Kenneth H. Eckstein, Esq., at Kramer Levin Naftalis
& Frankel LLP, in New York, the Policies are essential to the
preservation of the Debtors' businesses, property, and assets.
The insurance coverage is required by various regulations, laws,
and contracts that govern the Debtors' commercial activity. The
annual aggregate premiums for the Policies total $9,000,000.
In addition, in connection with the Debtors' business operations,
they are required to maintain numerous surety bonds. Several
states require the Debtors to maintain surety bonds in connection
with consumer protection laws, and certain utility providers also
require surety bonds for the provision of services. The Surety
Bonds total approximately $8,293,740. Mr. Eckstein says that the
Debtors pay $168,510 in annual premiums to maintain those Surety
Bonds. Without the Surety Bonds, he says, the Debtors may be in
violation of state law, and will consequently be unable to
operate health clubs in those states.
About Bally Total Fitness
Based in Chicago, Illinois, Bally Total Fitness Holding Corp.
(Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates
fitness centers in the U.S., with over 375 facilities located in
26 states, Mexico, Canada, Korea, China and the Caribbean under
the Bally Total Fitness(R), Bally Sports Clubs(R) and Sports Clubs
of Canada (R) brands.
Bally Total and its affiliates filed for Chapter 11 protection
7on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after
obtaining requisite number of votes in favor of their pre-
packaged chapter 11 plan. Joseph Furst, III, Esq. at Latham &
Watkins, L.L.P. represents the Debtors in their restructuring
efforts. As of June 30, 2007, the Debtors had US$408,546,205 in
total assets and US$1,825,941,54627 in total liabilities.
The Debtors filed their Joint Prepackaged Plan & Disclosure
Statement on July 31, 2007. The Court confirmed the Plan in Sept.
2007. The Plan was declared effective Oct. 1, 2007.
Bally Total Fitness Holding Corp. and its debtor-affiliates and
subsidiaries again filed voluntary petitions under Chapter 11 on
Dec. 3, 2008 (Bankr. S. D. N. Y., Lead Case No. 08-14818). Their
counsel is Kenneth H. Eckstein, Esq. at Kramer Levin Naftalis &
Frankel LLP, in New York. As of September 30, 2008, the Company
(including non-debtor affiliates) had consolidated assets totaling
approximately $1.376 billion and recorded consolidated liabilities
totaling approximately $1.538 billion.
Bankruptcy Creditors' Service, Inc., publishes Bally Bankruptcy
News. The newsletter provides gavel-to-gavel coverage of the
chapter 11 proceedings of Bally Total Fitness Holding Corp. and
its debtor-affiliates (http://bankrupt.com/newsstand/or 215/945-
7000)
BALLY TOTAL: Can Use Lenders' Cash Collateral Until January 28
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
entered a fourth interim order authorizing Bally Total Fitness
Holding Corp. and its debtor-affiliates to use cash collateral
securing obligations to their lenders. The Court also scheduled a
final hearing on the Motion for January 28, 2009, at 10:00 a.m.
The Court authorized the Debtors to use Cash Collateral from the
Petition Date through the earlier of (a) the date a further order
is entered granting or denying the Motion and (b) 11:59 p.m.
Eastern Time, on January 29, 2009.
The Cash Collateral may be used during the Specified Period
solely up to the amounts, not to exceed 115% of the amounts set
forth in the Budget on a cumulative, aggregate rolling basis
measured weekly as of the close of business on Friday of each
week.
A full-text copy of Bally II's Fourth Interim Cash Collateral
Order is available for free at:
http://bankrupt.com/misc/Bally4thInterimCashColOrder.pdf
Based in Chicago, Illinois, Bally Total Fitness Holding Corp.
(Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates
fitness centers in the U.S., with over 375 facilities located in
26 states, Mexico, Canada, Korea, China and the Caribbean under
the Bally Total Fitness(R), Bally Sports Clubs(R) and Sports Clubs
of Canada (R) brands.
Bally Total and its affiliates filed for Chapter 11 protection
7on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after
obtaining requisite number of votes in favor of their pre-
packaged chapter 11 plan. Joseph Furst, III, Esq. at Latham &
Watkins, L.L.P. represents the Debtors in their restructuring
efforts. As of June 30, 2007, the Debtors had US$408,546,205 in
total assets and US$1,825,941,54627 in total liabilities.
The Debtors filed their Joint Prepackaged Plan & Disclosure
Statement on July 31, 2007. The Court confirmed the Plan in Sept.
2007. The Plan was declared effective Oct. 1, 2007.
Bally Total Fitness Holding Corp. and its debtor-affiliates and
subsidiaries again filed voluntary petitions under Chapter 11 on
Dec. 3, 2008 (Bankr. S. D. N. Y., Lead Case No. 08-14818). Their
counsel is Kenneth H. Eckstein, Esq. at Kramer Levin Naftalis &
Frankel LLP, in New York. As of September 30, 2008, the Company
(including non-debtor affiliates) had consolidated assets totaling
approximately $1.376 billion and recorded consolidated liabilities
totaling approximately $1.538 billion.
Bankruptcy Creditors' Service, Inc., publishes Bally Bankruptcy
News. The newsletter provides gavel-to-gavel coverage of the
chapter 11 proceedings of Bally Total Fitness Holding Corp. and
its debtor-affiliates (http://bankrupt.com/newsstand/or 215/945-
7000)
BANK OF AMERICA: Former Merrill Board Members Criticize CEO
-----------------------------------------------------------
Susanne Craig and Dan Fitzpatrick at The Wall Street Journal
report that some former members of Merrill Lynch & Co.'s board
have complained that CEO John Thain failed to fully inform them
that mounting losses at the bank threatened to derail the deal
with Bank of America until the federal government agreed to step
in.
Citing a person familiar with the matter, WSJ relates that Mr.
Thain was aware at a certain point in December that the deal could
be in trouble.
A source said that senior executives at BofA didn't learn of the
losses from Mr. Thain, but rather from the Merrill transition
team, WSJ states. Citing the source, the report says that BofA
senior executives sensed that Mr. Thain didn't appear to be fully
engaged in issues surrounding the deal just when the scope of
Merrill Lynch's losses was becoming apparent. According to the
report, the source said that Mr. Thain went on a vacation in the
middle of December and was pretty much out of touch after that.
Another source said that Mr. Thain was working and available while
in on vacation, the report states.
No board meeting was called to discuss the status of the deal, WSJ
relates.
Mr. Thain kept whatever information he had because he was worried
that developments might leak to the media and blow up the deal,
WSJ reports, citing a person familiar with the matter. Mr. Thain,
according to WSJ, has often complained that material information
at Merrill Lynch leaked to the news media.
The U.S. Treasury has agreed to invest $20 billion in Bank of
America from the Troubled Assets Relief Program in exchange for
preferred stock with an 8% dividend to the Treasury. Bank of
America will comply with enhanced executive compensation
restrictions and implement a mortgage loan modification program.
A summary of the funding terms is availabe at no charge at:
http://www.fdic.gov/news/news/press/2009/pr09004a.pdf
About Bank of America
Bank of America is one of the world's largest financial
institutions, serving individual consumers, small and middle
market businesses and large corporations with a full range of
banking, investing, asset management and other financial and risk-
management products and services. The company provides unmatched
convenience in the United States, serving more than
59 million consumer and small business relationships with more
than 6,100 retail banking offices, nearly 18,700 ATMs and award-
winning online banking with nearly 29 million active users.
Following the acquisition of Merrill Lynch on January 1, 2009,
Bank of America is among the world's leading wealth management
companies and is a global leader in corporate and investment
banking and trading across a broad range of asset classes serving
corporations, governments, institutions and individuals around the
world. Bank of America offers industry-leading support to more
than 4 million small business owners through a suite of
innovative, easy-to-use online products and services. The company
serves clients in more than 40 countries. Bank of America
Corporation stock is a component of the Dow Jones Industrial
Average and is listed on the New York Stock Exchange.
BANK OF AMERICA: Needs More Than $80BB in New Equity Capital
------------------------------------------------------------
Alistair Barr at MarketWatch -- citing Friedman, Billings, Ramsey
analyst Paul Miller -- reports that Bank of America Corp. must
have more than $80 billion in new common equity capital to support
the huge amount of assets on its balance sheet.
According to MarketWatch, Mr. Miller said that BofA started 2009
with $61.7 billion of tangible common equity, supporting
$2.4 trillion of tangible assets. Mr. Miller, MarketWatch states,
said that BofA probably needs to maintain a tangible equity ratio
of 6% to 9%. The report quoted Mr. Miller as saying, "It would
take over $80 billion of new common equity to reach even the low
end of the range, and we believe Bank of America simply is not
generating sufficient capital internally in this environment to
put a dent in this size capital hole."
MarketWatch relates that BofA lost $1.79 billion in the fourth
quarter 2008, and said that its newly acquired brokerage unit,
Merrill Lynch, lost more than $15 billion in the same period.
BofA shares dropped 29% to $5.10 on Tuesday, the lowest level
since late 1990, MarketWatch reports.
The U.S. government has entered into an agreement with Bank of
America to provide a package of guarantees, liquidity access and
capital as part of its commitment to support financial market
stability. Treasury and the Federal Deposit Insurance Corporation
will provide protection against the possibility of unusually large
losses on an asset pool of approximately $118 billion of loans,
securities backed by residential and commercial real estate loans,
and other such assets, all of which have been marked to current
market value. The large majority of these assets were assumed by
Bank of America as a result of its acquisition of Merrill Lynch.
The assets will remain on Bank of America's balance sheet. As a
fee for this arrangement, Bank of America will issue preferred
shares to the Treasury and FDIC. In addition and if necessary, the
Federal Reserve stands ready to backstop residual risk in the
asset pool through a non-recourse loan.
In addition, Treasury will invest $20 billion in Bank of America
from the Troubled Assets Relief Program in exchange for preferred
stock with an 8% dividend to the Treasury. Bank of America will
comply with enhanced executive compensation restrictions and
implement a mortgage loan modification program.
Treasury exercised this funding authority under the Emergency
Economic Stabilization Act's Troubled Asset Relief Program (TARP).
The investment was made under the Targeted Investment Program. The
objective of this program is to foster financial market stability
and thereby to strengthen the economy and protect American jobs,
savings, and retirement security.
A summary of the funding terms is availabe at no charge at:
http://www.fdic.gov/news/news/press/2009/pr09004a.pdf
About Bank of America
Bank of America is one of the world's largest financial
institutions, serving individual consumers, small and middle
market businesses and large corporations with a full range of
banking, investing, asset management and other financial and risk-
management products and services. The company provides unmatched
convenience in the United States, serving more than
59 million consumer and small business relationships with more
than 6,100 retail banking offices, nearly 18,700 ATMs and award-
winning online banking with nearly 29 million active users.
Following the acquisition of Merrill Lynch on January 1, 2009,
Bank of America is among the world's leading wealth management
companies and is a global leader in corporate and investment
banking and trading across a broad range of asset classes serving
corporations, governments, institutions and individuals around the
world. Bank of America offers industry-leading support to more
than 4 million small business owners through a suite of
innovative, easy-to-use online products and services. The company
serves clients in more than 40 countries. Bank of America
Corporation stock is a component of the Dow Jones Industrial
Average and is listed on the New York Stock Exchange.
BANK OF AMERICA: Obtains $20,000,000,000 Funding from Treasury
--------------------------------------------------------------
The U.S. government entered into an agreement on Friday with Bank
of America to provide a package of guarantees, liquidity access
and capital as part of its commitment to support financial market
stability.
Treasury and the Federal Deposit Insurance Corporation will
provide protection against the possibility of unusually large
losses on an asset pool of approximately $118 billion of loans,
securities backed by residential and commercial real estate loans,
and other such assets, all of which have been marked to current
market value. The large majority of these assets were assumed by
Bank of America as a result of its acquisition of Merrill Lynch.
The assets will remain on Bank of America's balance sheet. As a
fee for this arrangement, Bank of America will issue preferred
shares to the Treasury and FDIC. In addition and if necessary, the
Federal Reserve stands ready to backstop residual risk in the
asset pool through a non-recourse loan.
In addition, Treasury will invest $20 billion in Bank of America
from the Troubled Assets Relief Program in exchange for preferred
stock with an 8% dividend to the Treasury. Bank of America will
comply with enhanced executive compensation restrictions and
implement a mortgage loan modification program.
Treasury exercised this funding authority under the Emergency
Economic Stabilization Act's Troubled Asset Relief Program (TARP).
The investment was made under the Targeted Investment Program. The
objective of this program is to foster financial market stability
and thereby to strengthen the economy and protect American jobs,
savings, and retirement security.
Separately, the FDIC board announced that it will soon propose
rule changes to its Temporary Liquidity Guarantee Program to
extend the maturity of the guarantee from three to up to 10 years
where the debt is supported by collateral and the issuance
supports new consumer lending.
With these transactions, the U.S. government is taking the actions
necessary to strengthen the financial system and protect U.S.
taxpayers and the U.S. economy. As was stated in November when the
first transaction under the Targeted Investment Program was
announced, the U.S. government will continue to use all of our
resources to preserve the strength of our banking institutions and
promote the process of repair and recovery and to manage risks.
A summary of the funding terms is availabe at no charge at:
http://www.fdic.gov/news/news/press/2009/pr09004a.pdf
About Bank of America
Bank of America is one of the world's largest financial
institutions, serving individual consumers, small and middle
market businesses and large corporations with a full range of
banking, investing, asset management and other financial and risk-
management products and services. The company provides unmatched
convenience in the United States, serving more than 59 million
consumer and small business relationships with more than 6,100
retail banking offices, nearly 18,700 ATMs and award-winning
online banking with nearly 29 million active users. Following the
acquisition of Merrill Lynch on January 1, 2009, Bank of America
is among the world's leading wealth management companies and is a
global leader in corporate and investment banking and trading
across a broad range of asset classes serving corporations,
governments, institutions and individuals around the world. Bank
of America offers industry-leading support to more than 4 million
small business owners through a suite of innovative, easy-to-use
online products and services. The company serves clients in more
than 40 countries. Bank of America Corporation stock is a
component of the Dow Jones Industrial Average and is listed on the
New York Stock Exchange.
BANKERS OF RUPTCY: Court Dismisses Debtor's Chapter 11 Case
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
has dismissed Bankers of Ruptcy Hypothecaters & Wholesalers a
UBO's bankruptcy case, pursuant to Sec. 1112(b) of the Bankruptcy
Code, following a status conference in which the Debtor's counsel,
Benjamin B. Wasson, Esq., failed to appear.
The Court issued its status conference notice on Oct. 17, 2008.
The notice directed counsel for the Debtor to appear and serve
documents on parties and file a proof of service with the Court.
The status conference notice also provides that the Court may
dismiss or convert or appoint a Chapter 11 trustee if Debtor's
counsel fails to appear.
Ron Maroko, Esq., for the United States Trustee, and Gilfert
Jackson, purported trustee of the Debtor, attended the status
conference.
Based in Los Angeles, Bankers of Ruptcy Hypothecaters &
Wholesalers a U B O is an unincorporated business organization
engaged as pecuniary emancipators. The company filed for Chapter
11 relief on Oct. 16, 2008 (Bankr. C.D. Calif. Case No. 08-27335).
Benjamin B. Wasson, Esq., represents the Debtor as counsel. When
the Debtor filed for protection from its creditors, it listed
assets of $100 million to $500 million, and debts of
$10 million to $50 million.
BERNARD L. MADOFF: Frank DiPascali to be Point Man in Fraud Case
----------------------------------------------------------------
Aaron Lucchetti, Amir Efrati, and Tom Lauricella at The Wall
Street Journal report that Frank DiPascali Jr., a key lieutenant
to investor Bernard L. Madoff for more than 30 years, is a
potential point man in the investigation of the Madoff fraud.
Mr. DiPascali, according to WSJ, said that he led stock-options
trading and was the point man for investment-advisory clients who
were told he executed their trades. Citing people familiar with
the matter, WSJ relates that prosecutors are interested in
information Mr. DiPascali can provide about the Madoff operation -
- who knew about the fraud and where the money went.
According to WSJ, Mr. DiPascali hasn't been sued, and his
attorney, Marc Mukasey, said that his client had frequent contact
with investors.
WSJ states that Mr. DiPascali joined Mr. Madoff's operation in
1975, researching stocks for the Madoff firm's trading desk before
becoming a key lieutenant in a separate investment-advisory
business. Mr. DiPascali, according to WSJ, was one of the Madoff
firm's senior employees when Mr. Madoff was arrested.
Some of Mr. Madoff's investors would contact Mr. DiPascali
regarding their account by phone and fax in orders, WSJ says. WSJ
relates that a fax from Mr. DiPascali providing an investor with
instructions for wiring money was used as evidence in the Madoff
fraud case.
WSJ, citing people familiar with the matter, reports that Mr.
DiPascali supervised a group of half a dozen other workers
involved in taking and keeping track of client orders. According
to WSJ, investors said they spoke to these employees and would fax
orders if they needed to withdraw money, sometimes using Mr.
DiPascali's name as an alternate contact.
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
losses from Madoff's fraud were at least US$50 billion.
Also on Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S.
District Court for the Southern District of New York granted the
application of the Securities Investor Protection Corporation for
a decree adjudicating that the customers of BLMIS are in need of
the protection afforded by the Securities Investor Protection Act
of 1970. Irving H. Picard, Esq., was appointed as trustee for the
liquidation of BLMIS, and Baker & Hostetler LLP was appointed as
counsel.
BH S&B: Steve & Barry Buyer Opposes Creditors' Discovery Requests
-----------------------------------------------------------------
Bay Harbour Master Ltd. asks the U.S. Bankruptcy Court for the
Southern District of New York to deny the overly broad request for
information and disclosures by the official committee of unsecured
creditors of BH S&B Holdings LLC.
In August 2008, Bay Harbour and other parties placed $100 million
in the newly-formed BH S&B and related entities, and purchased the
assets of the bankrupt Steve and Barry's retail chain in
optimistic hopes that the business, shed of unprofitable locations
and with renegotiated leases and contracts, may survive and
prosper. In the months following the purchase, economic
conditions deteriorated far more sharply and rapidly than anyone
predicted, causing the Debtors to commence their own bankruptcy
cases and liquidate.
Israel Dahan, Esq., at Cadwalader, Wickersham & Taft LLP, notes
that at no time were any distributions made by BH S&B to its
equity holders, nor were any payments made to the second lien
lender in which a portion of the investment was made. In short,
the failure of the Debtors' business has resulted in the complete
and total loss of the investors' investments, Mr. Dahan points
out.
The Creditors Committee in its investigation of the Debtors' first
and second lien loans, have served discovery requests to Bay
Harbour, and other investors, which included York Capital
Management and Hilco Merchant Resources LLC. The Committee sought
"emergency" and "immediate" relief under the pretext of having to
fulfill its obligations to investigate the validity of the
obligations under, and liens securing, the Debtors' first and
second lien loans prior to the deadline established in the interim
order on the Debtors debtor-in-possession financing.
However, according to Mr. Dahan, the Committee, having obtained $1
million from the Debtors' first lien lenders earmarked solely for
their litigation fees, is seeking to subject Bay Harbour and the
other investors to extremely "overbroad, burdensome and expensive
discovery," without any explanation or justification.
According to Bay Harbour, the Creditors Committee has made no
attempt to demonstrate "good cause" for the overly broad and
extremely burdensome discovery it seeks from Bay Harbour and how
such discovery may possibly yield any benefit to the estates.
In addition, Bay Harbour points out that as the Committee is well
aware, the Committee and the Debtors waived all claims against the
first lien lenders in connection with the lenders' agreement to
endow the Committee's litigation expense fund. Further, the
Committee has already recognized that even the first lien loan is
undersecured; thus, any investigation of, or challenge to, the
second lien loan or liens would likely be futile and serve no
benefit to the estates. Accordingly, the broad discovery
requested by the Committee in its Motion, relating primarily to
the first and second lien loans, can serve no purpose and should
not be permitted, Mr. Dahan aserts.
Bay Harbour informs the Bankruptcy Court that Committee never even
attempted to contact it and engage in a "meet and confer" to
discuss the overly broad discovery requests.
About BH S&B
BH S&B Holdings LLC filed for bankruptcy protection together with
seven other affiliates on Nov. 19, 2008 (Bankr. S.D. N.Y. Lead
Case No. 08-14604). The seven debtor-affiliates are BH S&B
Distribution LLC, BH S&B Lico LLC, BH S&B Retail LLC, BHY S&B
Intermediate Holdco LLC, Cubicle Licensing LLC, Fashion Plate
Licensing LLC, and Heritage Licensing LLC.
BH S&B was formed by investment firms Bay Harbour Management and
York Capital Management in August 2008 to acquire the business
operations and assets of bankrupt retailer Steve & Barry's for
$163 million in August 2008. Steve and Barry's, based in Port
Washington, New York, was a specialty retailer of apparel and
accessories, selling, among other things, university apparel and
lifestyle brands, private-label casual clothing, and exclusive
celebrity endorsed apparel.
Steve & Barry's had 240 locations when it was bought and the new
owners had planned to cut that down to 173 stores. BH S&B had
intended to operate certain Steve & Barry's stores as going
concerns and to liquidate inventory at other locations. Since the
sale closing, however, for various reasons, including the general
health of the American economy and the state of the retail market
in particular, sales at all stores have been disappointing, and BH
S&B's revenue has suffered. As a result, BH S&B was not in
compliance with certain covenants under their senior secured
credit facility and had no prospects for continued financing of
their business as a going concern. In consultation with its
lenders, BH S&B decided the appropriate course of action to
maximize value for the benefit of all of its stakeholders was an
orderly liquidation in Chapter 11.
Bay Harbour Management is an SEC registered investment advisor
with significant experience in purchasing distressed companies
and effectuating their turnaround. The firm's holdings have
included the retailer Barneys New York, the facilities based CLEC
Telcove, and the former Aladdin Casino, now operating on the Las
Vegas strip as the Planet Hollywood Resort and Casino following
its rebranding and turnaround.
York Capital Management is an SEC registered investment advisor
with offices in New York, London, and Hong Kong with more than
$15 billion in assets under management. York Capital was founded
in 1991 and specializes in value oriented and event driven equity
and credit investments.
BH S&B is 100% owned by BHY S&B Intermediate Holdco LLC.
BH S&B and its affiliates' chapter 11 cases are presided over by
the Honorable Martin Glenn. Joel H. Levitin, Esq., and Richard A.
Stieglitz, Jr., Esq., at Cahill Gordon & Reindel LLP, in New York,
serve as bankruptcy counsel to BH S&B and its affiliates. RAS
Management Advisors LLC acts as restructuring advisors, and
Kurtzman Carson Consultants LLC as claims and notice agent
BIOHEART INC: Receives NASDAQ Non-Compliance Notice
---------------------------------------------------
Bioheart, Inc. (BHRT) received a letter from the Nasdaq Stock
Market on January 14, 2009 advising that, the Company does not
comply with Nasdaq Marketplace Rule 4350.
On January 13, 2009, the Company notified the Nasdaq Stock Market
that, solely due to a vacancy on the Company's Board of Directors
resulting from the resignation of a member of the Board, the
Company was not in compliance with Nasdaq Marketplace Rule
4350(c)(1), which requires that the Company maintain a majority of
independent directors.
Under Nasdaq Marketplace Rule 4350(c)(1), with respect to the
requirement to have a majority of independent directors, the
Company is required to regain compliance with such board
composition by the earlier of its next annual shareholders meeting
or January 7, 2010 provided, however, that if the next annual
shareholders meeting is held before July 6, 2009, then the Company
must evidence compliance no later than July 6, 2009.
If the Company does not regain compliance within the Compliance
Period, Nasdaq will provide the Company with written notification
that the Company's common stock will be delisted from the Nasdaq
Capital Market. At that time, the Company may appeal the
determination by the Nasdaq Staff to delist its common stock to a
Listing Qualifications Panel.
The Company is currently considering actions that may allow it to
regain compliance with Nasdaq continued listing standards and
maintain its Nasdaq listing. There is no assurance that the
Company will be able to take any of these actions or that any of
the actions will be sufficient to allow the Company's Nasdaq
listing to continue or for how long such listing will continue.
If the Company is unsuccessful in maintaining its Nasdaq listing,
then the Company may pursue listing and trading of the Company's
common stock on the Over-The-Counter Bulletin Board or another
securities exchange or association with different listing
standards than Nasdaq.
Based in Sunrise, Florida, Bioheart Inc. --
http://www.bioheartinc.com/-- develops intelligent devices and
biologics that help monitor, diagnose and treat heart failure and
cardiovascular diseases. Its lead product candidate, MyoCell(r),
is an innovative clinical muscle-derived stem cell therapy
designed to populate regions of scar tissue within a patient's
heart with new living cells for the purpose of improving cardiac
function in chronic heart failure patients. The Company's pipeline
includes multiple product candidates for the treatment of heart
damage, including Bioheart Acute Cell Therapy, an autologous,
adipose tissue-derived stem cell treatment for acute heart damage,
and MyoCell(r) SDF-1, a therapy utilizing autologous cells that
are genetically modified to express additional potentially
therapeutic growth proteins.
CALIFORNIA STATE: State Workers May Not Get Paychecks in February
-----------------------------------------------------------------
David M. Greenwald at California Progress Report states that the
state of California, facing unprecedented budget cuts this year,
may give state workers IOUs instead of paychecks in February.
According to the Progress Report, the legislature is paralyzed,
construction jobs have been frozen, and 238,000 state workers
workers are facing mandatory furloughs for two days a month or
take a 9% pay cut.
The Los Angeles Times reports that Gov. Arnold Schwarzenegger has
appointed three officials to state boards supervising unemployment
insurance appeals and waste disposal. The officials have six-
figure salaries, says The LA Times.
Gov. Schwarzenegger, says the Progress Report, requested that the
state payroll be reduced an additional 10%, including layoffs if
necessary.
CEMTREX INC: Auditor Raises Going Concern Doubt
-----------------------------------------------
Gruber & Company LLC in a letter dated December 29, 2008, to the
Board of Cemtrex Inc. and its subsidiary expressed substantial
doubt about the company's ability to continue as a going concern.
The firm audited the balance sheet of Cemtrex Inc. and its
subsidiary as of September 30, 2008 and 2007 and the related
statements of operations, stockholders equity and cash flows for
the years then ended.
Gruber & Company pointed out that the company has a negative
equity and negative working capital. "These items among others,
raises substantial doubt about its ability to continue as a going
concern."
As of September 30, 2008, the company's balance sheet showed total
assets of $2,238,252 and total liabilities of $3,613,501,
resulting in total stockholders' deficit of $1,375,249. At
September 30, 2008, the Company also had a working capital deficit
of $259,993.
For the year ended September 30, 2008, the company posted a net
income of $118,078 compared a net loss of $123,565 for the same
period a year earlier.
Arun Govil, chairman of the board, chief executive officer and
president; Renato Dela Rama, vice president of finance; and
Vandana Govil, secretary and director, disclosed in a regulatory
filing dated January 13, 2009, that the company's primary source
of operating funds since inception has been provided through note
and equity financing. The company intends to raise additional
capital through private debt and equity investors. "Management
has taken steps to improve the company's liquidity by raising
funds and seeking revenue sources through the development of
products through which the company may generate revenue. There
can be no assurance that the company will be successful in these
endeavors and therefore may have to consider other alternatives."
A full-text copy of the company's annual report is available for
free at: http://researcharchives.com/t/s?384d
About Cemtrex
Cemtrex, Inc., and its subsidiary, is engaged in manufacturing and
selling the most advanced instruments for emission monitoring of
particulate, opacity, mercury, sulfur dioxide, nitrogen oxides,
etc. Cemtrex also provides turnkey services for carbon creation
projects from abatement of greenhouse gases pursuant to Kyoto
protocol and assists project owners in selling of carbon credits
globally. The company's products are sold to power plants,
refineries, chemical plants, cement plants & other industries
including federal and state Governmental agencies. Through its
wholly-owned subsidiary Griffin Filters, the company designs,
manufactures and sells air filtration equipment and systems to
control particulate emissions from a variety of industries.
CHECKER MOTORS: Wants More Time to File Schedules and Statements
----------------------------------------------------------------
Checker Motors Corporation asks the Hon. James D. Gregg of the
United States Bankruptcy Court for the Western District of
Michigan for an additional thirty day days to file its schedules
of assets and liabilities, and statements of financial affairs.
The Debtor says it was unable to gather necessary information to
prepare and filed the schedules and statements given the size and
complexity of its business. The Debtor further said that certain
prepetition invoices have not yet been received and entered into
its financial accounting systems.
Headquartered in Kalamazoo, Michigan, Checker Motors Corporation
was established by Morris Markin in 1922 through a merger of
Commonwealth Motors and Markin Automobile Body. The Debtor, once
the manufacturer of the famed Checker automobile (the iconic
American taxi cab), is a Kalamazoo, Michigan-based automotive
parts supplier that makes metal stampings and welded assemblies
for various car and truck lines. The company filed for Chapter 11
protection on January 16, 2009 (Bankr. W.D. Mich. Case No.
09-00358). Christopher A. Grosman, Esq., at Carson Fischer,
P.L.C., represents the Debtor in its restructuring efforts. The
Debtor proposed Plante & Moran as financial advisor; Kurtzman
Carson Consultants LLC as claims, noticing and balloting agent;
and McCarthy Smith Law Group as special counsel. When the Debtor
filed for protection from their creditors, it listed
$24.5 million in assets and $21.8 million in debts as of Nov. 30,
2008.
CHEMTURA CORP: May Tumble Into Bankruptcy, Bloomberg Says
---------------------------------------------------------
Ineos Group Holdings, Georgia Gulf Corp. and Chemtura Corp. are
crashing on a mountain of takeover debt and may follow Lyondell
Chemical Co. into bankruptcy, trading in their bonds shows,
Bloomberg news says.
LyondellBasell, which in 2008 was still in the first year of being
a combined enterprise of Lyondell Chemical and Basell to create
the world's third-largest independent chemical company, sent its
U.S. units to Chapter 11 bankruptcy on Jan. 6 due to its declining
liquidity. Lyondell found itself seriously challenged by volatile
commodity markets and prices, changing consumer demand for oil
products and plastics, the deterioration of the credit markets,
and the substantial retrenchment of some of its largest direct and
indirect customers, including those in the automotive and
construction industries. According to Reuters, while
LyondellBasell had no near-term debt maturities it had "little
room for maneuver," with the scale of its debt and illiquid credit
markets. In the bankruptcy petition, Lyondell Chemicals estimated
that consolidated assets total $27.12 billion and debts total
$19.34 billion as of the petition date.
As to Ineos, Georgia Gulf and Chemtura, Bloomberg said the
combination of $11.7 billion in debt, frozen credit markets and
the global recession are forcing the companies to negotiate with
creditors to loosen terms of their loans. A glut in supplies that
drove prices of polypropylene down by half since October will make
it even harder for plastics makers to meet debt payments, just as
manufacturers in the Middle East add millions of tons of new
supplies.
"The most leveraged names are the first ones that are going
to run into problems," said Andrew Brady, a New York-based
analyst at CreditSights Inc., according to Bloomberg. "The market
knows they are struggling, and there is a huge risk of
bankruptcy."
Chemtura had disclosed $3.88 billion in assets and about $2.46
billion in debts as of Sept. 30, 2008. As of September 30, 2008,
total debt was 2.7 times adjusted earnings before interest, taxes,
depreciation and amortization. In February 2008, the company
repurchased $30 million of its then outstanding $400 million 7%
Notes Due 2009. The Notes mature in July 2009.
Georgia Gulf disclosed $2 billion in assets and debts of $1.89
billion as of Sept. 30, 2008. Georgia Gulf said that at Sept. 30,
2008 under its revolving credit facility, it had a maximum
borrowing capacity of $375.0 million with $6.5 million through
Lehman Commercial Paper Inc., a subsidiary of Lehman Brothers,
Inc. that is unavailable due to their current bankruptcy filing.
Net of outstanding letters of credit of $83.1 million and current
borrowings of $125.8 million, it had remaining availability of
$159.6 million.
Ineos' net debt was about EUR7.29 billion (US$9.67 billion) as of
Sept. 30, or 4.3 times EBITDA, Chief Financial Officer John Reece
said in a Jan. 15 interview, according to Bloomberg.
"That level of leverage is quite modest," Mr. Reece said. "Prior
to the credit crunch, four times leverage was considered
pretty conservative."
About Chemtura
Chemtura Corporation (Chemtura) is a global producer of specialty
chemicals and polymer products and supplier of home pool and spa
chemicals. The products are used in a variety of markets,
including automotive, transportation, construction, packaging,
agriculture, lubricants, plastics for durable and non-durable
goods, electronics and the home pool and spa chemical markets. The
segments of the Company include Polymer Additives, Performance
Specialties, Consumer Products, Crop Protection, and Other. On
January 31, 2008, the Company completed the sale of its fluorine
chemical business located at the Company?s El Dorado, Arkansas
facility. On February 29, 2008, the Company purchased the
remaining 46.5% outstanding shares of Baxenden Chemicals Limited
(Baxden). The Company completed the sale of its oleochemicals
business on February 29, 2008. On March 12, 2008, the Company
purchased the remaining 50% outstanding shares of GLCC Laurel,
LLC.
CHRISTO BARDIS: May Employ Kirkman Blaine as Special Tax Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of California
granted Debtors Christo and Sara Bardis authority to employ Wagner
Kirkman Blaine Klomparens & Youmans LLP as special tax and real
estate counsel to the Debtors during the pendency of their
Chapter 11 case.
As the Debtors' special tax and real estate counsel, Wagner
Kirkman will:
a) advise and assist the Debtors with respect to the Debtors'
general tax-related transactions, including matters
pertaining to the over 100 special purpose entities most of
which were formed for a specific project related to building
homes or developing land;
b) advise and counsel the Debtors in connection with any
contemplated restructuring, including the drafting of
appropriate documents with respect thereto and counsel the
Debtors in connection with the closing of such restructuring;
c) advise and counsel the Debtors with respect to general real
estate matters arising in bankruptcy;
d) perform functions typically within the scope of a chief legal
officer or general counsel; and
e) perform the full range of services normally associated with
the above matters.
Wagner Kirkman's professionals currently charge:
Partners $345 to $435/hour
Principals $275 to $300/hour
Associates $175 to $300/hour
Belan K. Wagner, Esq., a partner at Wagner Kirkman, assured the
Court that the firm does not represent or hold any interest which
is adverse to the Debtors or their estate with respect to the
matters on which Wagner Kirkman is to be employed.
Real estate broker Christo Bardis filed a voluntary petition under
Chapter 11 of the United States Bankruptcy Code in the United
States Bankruptcy Court for the Eastern District of California,
Sacramento, on Oct. 15, 2008 (Case No. 08-34878). Mr. Bardis
is co-founder of homebuilder Reynen & Bardis Communities. David
M. Meegan, Esq., at Meegan, Hanschu & Kassenbrock, represents Mr.
Bardis as counsel.
Partner John D. Reynen filed for bankruptcy on April 23, 2008, in
Sacramento (Case No. 08-25145) to avert Bank of the West's
foreclosure of his personal property securing a $26 million loan.
Messrs. Reynen and Bardis guaranteed at least $740 million used by
their company that was obtained from several creditors but failed
to repay the loan, according to the Troubled Company Reporter on
April 25, 2008.
Mr. Bardis owes as much as $582,593,701 in loans to his unsecured
creditors including, among others, Wells Fargo Bank owed
$81,082,143; Indymac Bank owed $70,233,564; Comerica owed
$52,235,143.
Mr. Reynen disclosed in its filing assets between $50 million and
$100 million, and debts between $500 million and $100 million. He
owes $286,616,222 to his unsecured creditors including Lennar
Rennaissance Inc. asserting $47,000,000 in trade debt; Wells Fargo
asserting $29,387,928 in bank loan; and Indymac Bank asserting
$26,833,087 in bank loan.
Howard S. Nevins, Esq., at Hefner, Stark & Marols, LLP, in
Sacramento, California, represents Mr. Reynen.
Both cases are assigned to the Hon. Christopher M. Klein.
CHRYSLER LLC: Discloses Non-Binding Agreement With Fiat
-------------------------------------------------------
Stacy Meichtry and John Stoll at The Wall Street Journal report
that Chrysler LLC and Fiat SpA disclosed a non-binding agreement
on a possible technology sharing and manufacture of Fiat's small
cars in the U.S.
As reported by the Troubled Company Reporter on Jan. 20, 2009,
Fiat is in talks with Chrysler about acquiring a stake in the U.S.
car maker and forming a partnership to let the Italian auto maker
build and sell its small cars in the U.S. Fiat is likely to take
a 35% stake in Chrysler by the middle of the year.
WSJ relates that Chrysler would be able to add low-emission, fuel
efficient models to its fleet by using Fiat technology, while Fiat
would have access to Chrysler's U.S. dealership network.
Fiat, under the terms of the deal, would gain three of the seats
on Chrysler's seven-seat board, WSJ states, citing people familiar
with the matter. The sources said that Fiat, if it meets certain
goal for improving Chrysler's operations within 12 months of the
agreement, would have the option buying an additional 20% of
Chrysler for about $25 million.
WSJ says that if Fiat and Chrysler proceed with a legally binding
deal, the two companies will quickly be under pressure to
demonstrate that the alliance can make Chrysler viable. Chrysler
has received $4 billion in emergency loans from the U.S. Treasury
Department. WSJ relates that to meet the U.S. Treasury
Department's terms for loans and to qualify for an additional
$3 billion in government aid, Chrysler must submit a plan by
Feb. 17 that shows how it intends to return to profitability.
Citing JP Morgan auto analyst Himanshu Patel, WSJ reports that the
Fiat-Chrysler partnership should let Fiat leverage its existing
small-vehicle architectures and engines in the North America
market at minimal cost. Mr. Patel, according to the report, said
that Fiat's "willingness to dance with Chrysler may provide
Washington just enough cover to lend Chrysler additional funds."
United Auto Workers President Ron Gettelfinger said in a statement
that the partnership "offers Chrysler new opportunities to compete
in the U.S. market and the global marketplace." WSJ relates that
Mr. Gettelfinger said that he expects the alliance to preserve
"good-paying manufacturing jobs for our communities" and that the
union expects to have a "voice" in shaping the partnership.
The alliance with Fiat could help save thousands of auto dealers
that rely on Chrysler for revenue, WSJ states, citing Sen. Bob
Corker. "Chrysler is at a disadvantage because it only sells here
in the United States. It needs to be combined into an entity that
has abilities worldwide," WSJ quoted Sen. Corker as saying.
About Chrysler LLC
Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- a unit of Cerberus Capital
Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R)
brand vehicles and products. The company has dealers worldwide,
including Canada, Mexico, U.S., Germany, France, U.K., Argentina,
Brazil, Venezuela, China, Japan and Australia.
* * *
As reported in the Troubled Company Reporter on Dec. 3, 2008,
Dominion Bond Rating Service downgraded the ratings of Chrysler
LLC, including Chrysler's Issuer Rating to CC from CCC (high).
Chrysler's First Lien Secured Credit Facility and Second Lien
Secured Credit Facility have also been downgraded to CCC and CC
(low) respectively. All trends are Negative. The ratings action
reflects Chrysler's challenge to maintain sufficient liquidity
balances amid severe industry conditions that have deteriorated
alarmingly over the past few months and are not expected to
improve in the near term. With this ratings action, Chrysler is
removed from Under Review with Negative Implications, where it was
placed on Nov. 7, 2008.
As reported in the Troubled Company Reporter on Aug. 11, 2008,
Standard & Poor's Ratings Services lowered its ratings on Chrysler
LLC, including the corporate credit rating, to 'CCC+' from 'B-'.
On July 31, 2008, TCR said that Fitch Ratings downgraded the
Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'. The
Rating Outlook is Negative. The downgrade reflects Chrysler's
restricted access to economic retail financing for its vehicles,
which is expected to result in a further step-down in retail
volumes. Lack of competitive financing is also expected to result
in more costly subvention payments and other forms of sales
incentives. Fitch is also concerned with the state of the
securitization market and the ability of the automakers to access
this market on an economic basis over the near term, given the
steep drop in residual values, higher default rates, higher loss
severity being experienced and jittery capital market.
As reported in the TCR on Dec. 3, 2008, Dominion Bond Rating
Service downgraded on Nov. 20, 2008, the ratings of Chrysler LLC,
including Chrysler's Issuer Rating to CC from CCC (high).
Chrysler's First Lien Secured Credit Facility and Second Lien
Secured Credit Facility have also been downgraded to CCC and CC
(low) respectively. All trends are Negative. The ratings action
reflects Chrysler's challenge to maintain sufficient liquidity
balances amid severe industry conditions that have deteriorated
alarmingly over the past few months and are not expected to
improve in the near term. With this ratings action, Chrysler is
removed from Under Review with Negative Implications, where it was
placed on Nov. 7, 2008.
CIRCUIT CITY: Gets Nod on Liquidation; All US Stores to Be Closed
-----------------------------------------------------------------
Circuit City Stores, Inc. has joined the ranks of failed
retailers. At a hearing held January 16, 2009, the U.S.
Bankruptcy Court for the Eastern District of Virginia granted
Circuit City permission to sell their business pursuant to an
agency agreement dated January 15, 2009, with four liquidators:
Great American Group WF LLC, Hudson Capital Partners LLC, SB
Capital Group LLC, and Tiger Capital Group LLC -- the highest and
best bidder at the Jan. 15 auction.
The Court authorized the Debtors to conduct the Sale at the
stores and distribution centers identified in the Agency
Agreement in accordance with the Agreement terms. No bulk sale,
"going-out-of-business", or similar law will prohibit the Debtors
or the four liquidators -- the Agent -- from taking any action
contemplated by the Agency Agreement, Judge Kevin R. Huennekens
said.
A full-text copy of the order approving the Sale, including the
Agency Agreement, is available for free at:
http://bankrupt.com/misc/CC_Order_SaleofAllAssets.pdf
The Debtors have told the Court that they remain hopeful that they
will receive a bid contemplating a "going concern transaction" in
lieu of store closing sales and the sale of their miscellaneous
assets, including leases.
According to The Wall Street Journal, Circuit City told the Court
at the Jan. 16 hearing that an auction to sell itself as a going
concern had failed to garner bidders, leaving it no choice but to
accept bids from the four liquidators.
"We are extremely disappointed by this outcome," said James A.
Marcum, vice chairman and acting president and chief executive
officer for Circuit City Stores, Inc., in a statement.
"Regrettably for the more than 30,000 employees of Circuit City
and our loyal customers, we were unable to reach an agreement
with our creditors and lenders to structure a going-concern
transaction in the limited timeframe available, and so this is
the only possible path for our company."
The Journal's Miguel Bustillo notes that people close to the
Debtors said private-equity firm Golden Gate Capital was
interested in buying the entire company late Thursday evening,
but was unable to convince creditors to give it even a few extra
days to study the retailer's finances. Creditors were unwilling
to grant the time because they concluded Circuit City was
inevitably finished.
"We were in deep negotiations, but those negotiations broke down.
There was an inability to get a deal structured in time," Circuit
City spokesman Bill Cimino said, according to the report.
The economic slump, tightening credit and widespread job losses in
the U.S. have forced several retailers to file for bankruptcy in
the past year. According to Bloomberg News, Howard Davidowitz,
chairman of retail consulting and investment-banking firm
Davidowitz & Associates Inc. in New York, said as many as 21 more
may be threatened. Bloomberg also says sales at U.S. retailers
fell for the sixth straight month in December, the longest string
of declines in records going back to 1992, according to a Commerce
Department report.
Circuit City joins the likes of Linens 'N Things, Steve & Barry's,
The Sharper Image, Goody's LLC, and Tweeter that eventually
decided to liquidate.
InterTAN Canada Ltd., an indirect wholly-owned subsidiary of U.S.-
based Circuit City Stores, however, confirmed that The Source by
Circuit City stores across Canada remain open for business and are
not included in the liquidation process announced by Circuit City.
The court-approved Agency Agreement directed the parties to
commence Store Closing Sales at the Debtors remaining 567 U.S.
stores on January 17, 2009, and the Agent to complete the Sale at
the Closing Locations, and vacate all of the Closing Location
premises, on or before March 31, 2009.
The Debtors said they will provide more details in the near term
about the plans for the liquidation of the stores and other
assets; the status of the company's Web site and firedogSM
services operations; the status of its Canadian operations; and
plans for the company's bankruptcy proceedings.
The Journal says Circuit City will be marking down goods by 10%
to 30% with higher discounts as the expected April closing
approaches.
The Court held that gift certificates, gift cards, and
merchandise credits issued by the Debtors prior to the
commencement of the sale will be accepted and honored by the
Agent during the sale. The Debtors will reimburse the Agent for
any gift certificates, gift cards, and merchandise credits
honored during the sale, as part of the weekly sale
reconciliation process.
The Debtors pointed out that they do not anticipate any value
will remain from the bankruptcy estate for the holders of the
company's common equity, although this will be determined in the
continuing bankruptcy proceedings.
Prior to the Court's entry of its order, several creditors and
parties-in-interest tried to block the sale by filing objections
asking the Court to deny the request. The objecting parties are:
-- Arlington ISD, et al., and Lewisville Independent School
District;
-- Carousel Center Company, L.P., EklecCo NewCo, LLC, and
Fingerlakes Crossing, LLC.;
-- Cellco Partnership, doing business as Verizon Wireless;
-- Children's Discovery Centers of America, Inc.;
-- CIM/Birch St., Inc.;
-- Cormark, Inc.;
-- DL Peterson Trust, as assignee of PHH Vehicle Management
Services, LLC.;
-- FM Facility Maintenance, formerly known as IPT, LLC;
-- Hagan Properties, Inc.;
-- Henrico County, Virginia;
-- Old Republic Insurance Company;
-- Palm Beach County Tax Collector;
-- Riverside, California;
-- Rossmoor Shops, LLC, Benenson Capital Company, Cardinal
Capital Partners, Fayetteville Developers, LLC, The Balogh
Companies, and Westfield, LLC;
-- SAP Retail Inc. and Business Objects; and
-- T. J. Maxx of CA, LLC.
Judge Huennekens ruled that all objections to the request that
have not been withdrawn, waived, settled, or specifically
addressed are overruled in all respects on the merits.
About Circuit City
Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- is a specialty
retailer of consumer electronics, home office products,
entertainment software and related services. The company has two
segments -- domestic and international.
Circuit City Stores, Inc. (NYSE: CC) together with 17 affiliates
filed a voluntary petition for reorganization relief under Chapter
11 of the Bankruptcy Code on November 10 (E.D. Virg. Lead Case
No.: 08-35653). InterTAN Canada, Ltd., which runs Circuit City's
Canadian operations, also sought protection under the Companies'
Creditors Arrangement Act in Canada.
Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, are the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, are the Debtors' local counsel. The
Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc., and Rotschild Inc.
as financial advisors. The Debtors' Canadian general
restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman
Carson Consultants LLC is the Debtors' claims and voting agent.
The Debtors disclosed total assets of $3,400,080,000 and debts of
$2,323,328,000 as of Aug. 31, 2008.
Bankruptcy Creditors' Service, Inc., publishes Circuit City
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
undertaken by Circuit City Stores Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CIRCUIT CITY: Submits First Batch of Leases to be Rejected
----------------------------------------------------------
Circuit City Stores, Inc., and its affiliates filed with the U.S.
Bankruptcy Court for the Eastern District of Virginia their first
omnibus motion, seeking permission to:
(a) reject certain unexpired leases of real property,
effective as of December 12, 2008; and
(b) abandon any equipment, furniture or fixtures located at
the premises covered by the Leases to avoid any
postpetition administrative costs.
The Leases are comprised primarily of leases of property and
facilities at which the Debtors had intended, but have cancelled
plans, to open new stores during fiscal years 2009, 2010 and
2011, as well as a certain surplus facilities that the Debtors
have identified since the Petition Date as not beneficial to the
bankruptcy estates. A schedule of the Leases is available at no
charge at:
http://bankrupt.com/misc/CC_1stOmnibusRejection_RealProperty.pdf
Currently, the Debtors have no operations in the leased
facilities and have no other productive use for the Premises,
reveals Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher
& Flom, LLP, in Wilmington, Delaware. However, he notes, the
Debtors may be obligated to pay rent under the Leases. Thus, by
rejecting the Leases at this time, the Debtors will avoid
incurring unnecessary administrative charges for facilities that
provide no tangible benefit to the Debtors' bankruptcy estates,
he points out.
Through the Leases' rejection, the Debtors will be relieved from
paying rent, taxes, insurance, maintenance and other related
charges associated with the Leases, Mr. Galardi asserts. He adds
that the resulting savings from the rejection will increase the
Debtors' future cash flow and assist them in managing their
estates.
Hence, the Debtors believe that the proposed rejection and
abandonment is in the best interests of their estates, creditors,
and other parties-in-interest.
Objections
Several parties to certain Leases file separate objections to the
proposed rejection:
-- Carmax Business Services, LLC
-- Cole CC Kennesaw GA, LLC; and
-- Food Lion, LLC.
The objecting parties ask the Court to, among other things,
compel the Debtors to satisfy their obligations under the Leases
first.
About Circuit City
Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- is a specialty
retailer of consumer electronics, home office products,
entertainment software and related services. The company has two
segments -- domestic and international.
Circuit City Stores, Inc. (NYSE: CC) together with 17 affiliates
filed a voluntary petition for reorganization relief under Chapter
11 of the Bankruptcy Code on November 10 (E.D. Virg. Lead Case
No.: 08-35653). InterTAN Canada, Ltd., which runs Circuit City's
Canadian operations, also sought protection under the Companies'
Creditors Arrangement Act in Canada.
Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, are the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, are the Debtors' local counsel. The
Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc., and Rotschild Inc.
as financial advisors. The Debtors' Canadian general
restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman
Carson Consultants LLC is the Debtors' claims and voting agent.
The Debtors disclosed total assets of $3,400,080,000 and debts of
$2,323,328,000 as of Aug. 31, 2008.
Bankruptcy Creditors' Service, Inc., publishes Circuit City
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
undertaken by Circuit City Stores Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CIRCUIT CITY: Panel Seeks to Retain Pachulski as Lead Counsel
-------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in the
bankruptcy cases of Circuit City Stores, Inc., seeks authority
from the U.S. Bankruptcy Court for the Eastern District of
Virginia to retain Pachulski Stang Ziehl & Jones LLP, as its lead
counsel, nunc pro tunc to November 18, 2008.
The Committee notes that Pachulski Stang has over 55 attorneys
with a practice concentrated on reorganization, bankruptcy,
litigation and commercial issues. The Firm's attorneys, the
Committee says, have extensive experience representing creditors'
committees, debtors, creditors, trustees and others in a wide
variety of bankruptcy cases. Based on these facts, the Committee
believes that the Firm is well-qualified to render the services
the Committee seeks.
As lead counsel for the Committee, Pachulski Stang will assist,
advise and represent the Committee:
a. in its consultations with the Debtors regarding the
administration of the Chapter 11 cases;
b. in analyzing the Debtors' assets and liabilities,
investigating the extent and validity of liens and
participating in and reviewing any proposed asset sales,
any asset dispositions, financing arrangements and cash
collateral stipulations or proceedings;
c. in any manner relevant to reviewing and determining the
Debtors' rights and obligations under leases and other
executory contracts;
d. in investigating the acts, conduct, assets, liabilities and
financial condition of the Debtors, the Debtors' operations
and the desirability of the continuance of any portion of
those operations, and any other matters relevant to the
case or to the formulation of a plan;
e. in its participation in the negotiation, formulation and
drafting of a plan of liquidation or reorganization;
f. in understanding its powers and its duties under the
Bankruptcy Code and the Bankruptcy Rules and in performing
other services as are in the interests of those represented
by the Committee; and
g. in the evaluation of claims and on any litigation matters,
including avoidance actions.
The Firm will also advise the Committee on the issues concerning
the appointment of a trustee or examiner under Section 1104 of
the Bankruptcy Code.
The principal attorneys and paralegals presently designated to
represent the Committee and their current standard hourly rates
are:
Richard M. Pachulski $815
Robert J. Feinstein $775
Jeffrey N. Pomerantz $625
Stanley E. Goldich $625
John D. Fiero $595
Jason S. Pomerantz $495
David A. Abadir $350
Beth D. Dassa $205
Pachulski Stang will be reimbursed for all reasonable out-of-
pocket expenses incurred in connection with the Debtors' Chapter
11 cases.
Robert J. Feinstein, Esq., a partner at Pachulski Stang, asserts
that the Firm is a "disinterested person" as that term is defined
in Section 101(14) of the Bankruptcy Code, and that the Firm does
not have an interest materially adverse to the interest of the
Debtors' estates or of any class of creditors or equity security
holders.
Mr. Feinstein discloses that the Firm presently represents:
* the liquidating trust in the bankruptcy case filed by
Dunmore Homes, Inc.
* Pension Benefit Guaranty Corporation, Fujifilm, and Hisense
USA Corporation or their affiliates in matters unrelated to
the Debtors and their Chapter 11 Cases.
* Gordon Brothers Retail Partners LLC and Great American Group
or their affiliates in matters unrelated to the Debtors
and their Chapter 11 Cases.
* Fox Home Entertainment or their affiliates in matters
unrelated to the Debtors and their Chapter 11 Cases.
Moreover, Mr. Feinstein says, prior to the Firm being selected as
counsel to the Committee, the Firm represented Optoma Technology,
Inc. and Fox Home Entertainment in the Debtors' Chapter 11 cases.
Now that the Firm is serving as counsel to the Committee, the
Firm is withdrawing from their engagements with these parties and
will no longer represent them.
The Firm is presently adverse to unsecured creditor and Committee
member Hewlett Packard in cases several unrelated to the Debtors
and their Chapter 11 Cases, Mr. Feinstein continues. "The Firm
represents the debtor in Fleming Companies, Inc. which has
recently settled a preference action with Hewlett Packard. In
another matter, the Firm represents Fujifilm Medical Systems in
an unrelated products liability action against Hewlett Packard."
In addition, the Firm represents Alert Cellular LC in an action
against unsecured creditor and Committee member Simon Property
Group, a lessor of property to the Debtors, Mr. Feinstein
explains.
However, he says, no potential conflict exists regarding the
Firm's prior representation of these creditors.
Mr. Feinstein further notes that a partner at the Firm, Richard
Pachulski, is a managing member of Rubin Pachulski Properties 36,
LLC. RPP36 is an investment vehicle and indirectly owns a
portion of all the properties it manages. RPP36 is also the
management company for the property located at 1839 South La
Cienega Boulevard, in Los Angeles, California, that is leased to
Circuit City Stores West Coast, Inc. The La Cienega lease
expires on August 31, 2009.
About Circuit City
Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- is a specialty
retailer of consumer electronics, home office products,
entertainment software and related services. The company has two
segments -- domestic and international.
Circuit City Stores, Inc. (NYSE: CC) together with 17 affiliates
filed a voluntary petition for reorganization relief under Chapter
11 of the Bankruptcy Code on November 10 (E.D. Virg. Lead Case
No.: 08-35653). InterTAN Canada, Ltd., which runs Circuit City's
Canadian operations, also sought protection under the Companies'
Creditors Arrangement Act in Canada.
Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, are the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, are the Debtors' local counsel. The
Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc., and Rotschild Inc.
as financial advisors. The Debtors' Canadian general
restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman
Carson Consultants LLC is the Debtors' claims and voting agent.
The Debtors disclosed total assets of $3,400,080,000 and debts of
$2,323,328,000 as of Aug. 31, 2008.
Bankruptcy Creditors' Service, Inc., publishes Circuit City
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
undertaken by Circuit City Stores Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CIRCUIT CITY: Panel Seeks to Retain Tavenner as Local Counsel
-------------------------------------------------------------
The Official Committee of Unsecured Creditors in Circuit City
Stores, Inc., and its affiliates' cases seeks authority from the
U.S. Bankruptcy Court for the Eastern District of Virginia to
retain Tavenner & Beran, PLC as its local counsel, retroactive to
November 18, 2008.
Tavenner & Beran is expected to assist Pachulski Stang Ziehl &
Jones LLP, the Debtors' lead counsel, in connection with the
Debtors' Chapter 11 cases.
The Committee notes that members of Tavenner & Beran have had a
Virginia practice and have played significant roles in cases in
this region of similar or greater size and complexity. Tavenner
& Beran is also familiar with the local rules of the Court,
including but not limited to the requirements associated with the
electronic nature of the Chapter 11 cases.
In exchange for its services, the firm will be paid based on its
hourly rates of $315 to $325 for partners, and $85 to $95 for
paralegals. The Debtors' case will be handled primarily by Lynn
L. Tavenner, whose current hourly rate is $325 and Paula S.
Beran, whose current hourly rate is $315. Any necessary
paralegal services will be performed primarily by David L.
Leadbeater, whose current hourly rate is $95.
Tavenner & Beran will also be reimbursed for all out-of-pocket
expenses.
Lynn L. Tavenner, Esq., a member of Tavenner & Beran, discloses
that her firm is not connected with the Debtors, their creditors,
other parties-in-interest or the United States Trustee and does
not represent and has not represented, any other parties other
than the Committee. However, Ms. Tavenner notes that:
(i) she is a member of the panel of Chapter 7 trustees
appointed to serve before the United States Bankruptcy
Court for the Eastern District of Virginia;
(ii) a former employee of the law firm of Tavenner &
Beran, Shannon Franklin-Pecoraro, is currently
employed with the Richmond Office of the Office of
the United States Trustee;
(iii) Tavenner & Beran has worked -- and is currently working
-- with Protiviti, Inc. and Jefferies & Company, the
Committee's proposed financial advisors, on matters
unrelated to the Chapter 11 cases;
(iv) Tavenner & Beran has worked, and is currently working,
with McGuireWoods LLP, the Debtors' counsel, on matters
unrelated to the Chapter 11 cases;
(v) Tavenner & Beran has worked with the Debtors' financial
advisor, FTI Consulting, on matters unrelated to the
Chapter 11 cases;
(vi) Tavenner & Beran has served or is currently serving
as debtor's counsel in cases unrelated to the Debtors'
Chapter 11 cases where one or more of the creditors in
the Chapter 11 cases are also creditors in the Unrelated
Cases; and
(vii) Members of Tavenner & Beran are personal friends with
one or more current or former employees of Circuit City
Stores, Inc.
Ms. Tavenner assures the Court that her firm does not represent
any interest materially adverse to the Committee, the Debtors'
estate, or their creditors with respect to the matters upon which
it is to be engaged. Accordingly, Tavenner & Beran is a
"disinterested person" within the meaning of Sections 101(14) and
327 of the Bankruptcy Code.
About Circuit City
Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- is a specialty
retailer of consumer electronics, home office products,
entertainment software and related services. The company has two
segments -- domestic and international.
Circuit City Stores, Inc. (NYSE: CC) together with 17 affiliates
filed a voluntary petition for reorganization relief under Chapter
11 of the Bankruptcy Code on November 10 (E.D. Virg. Lead Case
No.: 08-35653). InterTAN Canada, Ltd., which runs Circuit City's
Canadian operations, also sought protection under the Companies'
Creditors Arrangement Act in Canada.
Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, are the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, are the Debtors' local counsel. The
Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc., and Rotschild Inc.
as financial advisors. The Debtors' Canadian general
restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman
Carson Consultants LLC is the Debtors' claims and voting agent.
The Debtors disclosed total assets of $3,400,080,000 and debts of
$2,323,328,000 as of Aug. 31, 2008.
Bankruptcy Creditors' Service, Inc., publishes Circuit City
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
undertaken by Circuit City Stores Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CIRTRAN CORP: CEO Iehab Hawatmeh Assumes Interim CFO Role
---------------------------------------------------------
CirTran Corporation disclosed in a regulatory filing that David
Harmon resigned as chief financial officer, in order to accept a
position with another organization. Iehab Hawatmeh, president and
CEO of the company, accepted Mr. Harmon's resignation.
The company has begun a search for a new CFO. Until such time as
a new CFO has been hired, Mr. Hawatmeh will act in dual roles of
CEO and CFO.
Headquartered in Salt Lake City, Utah, CirTran Corporation (OTC
BB: CIRC) -- http://www.CirTran.com/-- is an international, full-
service contract manufacturer. CirTran's operations include:
CirTran-Asia, a subsidiary with principal offices in ShenZhen,
China, which manufactures high-volume electronics, fitness
equipment, and household products for the multi-billion-dollar
direct response industry; CirTran Online, which offers products
directly to consumers through major retail web sites, and CirTran
Beverage, which has partnered with Play Beverages LLC to introduce
the Playboy Energy Drink(TM).
CirTran Corporation's balance sheet at Sept. 30, 2008, showed
total assets of $14,765,109 and total liabilities of $17,330,711,
resulting in a stockholders' deficit of $2,565,602.
CirTran also reported net loss of $2,258,414 for the three months
ended Sept. 30, 2008, as compared to net income of $82,898 for the
same period of the previous year.
For the first nine months of 2008, CirTran's net loss decreased
14% to $2,981,427, as compared to $3,463,510 for the comparable
period in 2007.
Liquidity and Financing Arrangements
The company has a history of substantial losses from operations,
and of using rather than providing cash in operations. During the
first half of 2008, the company has used, rather than provided,
cash in our operations. As of June 30, 2008, its monthly cash
operating costs plus interest expense payable in cash averaged
approximately $250,000 per month.
In conjunction with its efforts to improve its results of
operations the company is also seeking infusions of capital from
investors, and is seeking sources to repay its existing
convertible debentures. In its current financial condition,
it is unlikely that it will be able to obtain additional debt
financing at a reasonable cost. Even if the company did acquire
additional debt, it would be required to devote additional cash
flow to servicing the debt, and either securing the debt with
assets, or paying a premium cost. Accordingly, the company is
looking to obtain equity financing to meet its anticipated capital
needs. There can be no assurance that it will be successful in
obtaining such capital. If it issues additional shares for equity
or in connection with debt, this will dilute the value of its
common stock and existing shareholders' positions.
There can be no assurance that it will be successful in obtaining
more debt and equity financing in the future or that its results
of operations will materially improve in either the short or the
long term. If the company fails to obtain the financing and
improve its results of operations, it will be unable to meet
its obligations as they become due. That would raise substantial
doubt about its ability to continue as a going concern.
CIT GROUP: Cuts Quarterly Dividend by 80% to Save $22.8 Million
---------------------------------------------------------------
Kathy Shwiff at The Wall Street Journal reports that CIT Group
Inc. has cut its quarterly dividend by 80% to 2 cents a share to
save $22.8 million a quarter.
WSJ relates that CIT Group has been suffering from increasing
credit losses and write-downs at its vendor-finance business. The
report says that CIT Group depends on its ability to raise money
in the capital markets to pay for the loans it makes to businesses
and individuals. Its access to funding evaporated in March 2008,
making the company drain a $7.3 billion credit line, according to
the report. CIT then started slimming down, unloading its home-
lending business in July 2008, the report states.
According to WSJ, CIT Group raised $1.15 billion of regulatory
capital through a note exchange.
CIT Group said last week that it would post a wider-than-expected
fourth-quarter loss, WSJ states.
CIT Group Inc. is a leading global commercial and consumer finance
company, founded in 1908. CIT has more than $70 billion in
managed assets. CIT offers these services: vendor financing,
factoring, equipment and transportation financing, Small Business
Administration loans, and asset-based lending. The company's
global headquarters are in New York City, and the company has more
than 7,300 employees in locations throughout North America,
Europe, Latin America, and Asia Pacific.
In 2008 CIT Group agreed to become a bank holding company in order
to receive TARP money of $2.3 billion dollars.
CITIGROUP INC: Cuts Common-Stock Dividend to 1 Cent From 16 Cents
-----------------------------------------------------------------
Jay Miller at The Wall Street Journal reports that Citigroup Inc.,
as required by the federal government's $20 billion bailout,
reduced its common-stock dividend to 1 cent from 16 cents.
WSJ relates that the government bailout prevented Citigroup from
paying a dividend of more than 1 cent for three years. The report
says that the dividend cut, based on Citigroup's 5.45 billion
shares outstanding at the end of 2008, will conserve $817.5
million in capital per quarter.
According to WSJ, Citigroup will put peripheral or ailing
businesses and assets in an isolated division called Citi
Holdings, while the rest of the company will consist of
Citigroup's investment bank, credit-card division, private bank,
and regional banking operations.
Citigroup has reported $8.29 billion loss for the fourth quarter
of 2008, and unveiled plans to split into two entities.
About Citigroup
Based in New York, Citigroup Inc. (NYSE: C) --
http://www.citigroup.com-- is organized into four major segments
-- Consumer Banking, Global Cards, Institutional Clients Group,
and Global Wealth Management. Citi had $2.0 trillion in total
assets on $1.9 trillion in total liabilities as of Sept. 30, 2008.
As reported in the Troubled Company Reporter on Nov. 25, 2008, the
U.S. government entered into an agreement with Citigroup to
provide a package of guarantees, liquidity access, and capital.
As part of the agreement, the U.S. Treasury and the Federal
Deposit Insurance Corporation will provide protection against the
possibility of unusually large losses on an asset pool of
approximately $306 billion of loans and securities backed by
residential and commercial real estate and other such assets,
which will remain on Citigroup's balance sheet. As a fee for this
arrangement, Citigroup will issue preferred shares to the Treasury
and FDIC. In addition and if necessary, the Federal Reserve will
backstop residual risk in the asset pool through a non-recourse
loan.
CNS RESPONSE: Auditor Raises Going Concern Doubt
------------------------------------------------
Cacciamatta Accountancy Corporation in Irvine, California, in a
letter dated January 13, 2009, to the Board of Directors of CNS
Response, Inc., expressed substantial doubt about the company's
ability to continue as a going concern.
The firm audited the consolidated balance sheets of CNS Response,
Inc., and its subsidiaries as of September 30, 2008 and 2007, and
the related consolidated statements of operations, changes in
stockholders' equity and cash flows for each of the years in the
two-year period ended September 30, 2008.
Cacciamatta pointed out that the company's continued operating
losses and limited capital raise substantial doubt about its
ability to continue as a going concern.
As of September 30, 2008, the company's balance sheet showed total
assets of $2,633,500, total current liabilities of $1,454,300,
total long-term liabilities of $126,300 and total stockholders'
equity of $1,052,900. For the years ended September 30, 2008 and
2007, the company posted net losses of $5,371,500 and $3,279,100,
respectively.
Chief Executive Officer Leonard J. Brandt disclosed in a
regulatory filing dated January 13, 2009, that the company has a
limited operating history and its operations are subject to
certain risks and uncertainties frequently encountered by rapidly
evolving markets. "These risks include the failure to develop or
supply technology or services, the ability to obtain adequate
financing, competition within the industry and technology trends."
"To date, the company has financed its cash requirements primarily
from debt and equity financings. It will be necessary for the
company to raise additional funds. The company's liquidity and
capital requirements depend on several factors, including the rate
of market acceptance of its services, the ability to expand and
retain its customer base, its ability to execute its current
business plan and other factors. The company is currently
exploring additional sources of capital but there can be no
assurances that any financing arrangement will be available in
amounts and terms acceptable to the company."
A full-text copy of the company's annual report is available for
free at: http://researcharchives.com/t/s?3854
About CNS Response
CNS Response, Inc., utilizes a patented system that guides
psychiatrists and other physicians to determine a proper treatment
for patients with mental, behavioral or addictive disorders. The
company also intends to identify, develop and commercialize new
indications of approved drugs and drug candidates for this patient
population. In addition, as a result of its acquisition of Neuro-
Therapy Clinic, P.C., on January 11, 2008, the company provides
behavioral health care services.
COBALIS CORP: Chapter 11 Bankruptcy Case Will be Discharged
-----------------------------------------------------------
Ocmetro.com reports that a federal court in Santa Ana has allowed
Cobalis Corp. to introduce anti-allergy medication PreHistin. The
report states that this would allow Cobalis to be discharged from
its Chapter 11 bankruptcy.
According to Ocmetro.com, PreHistin will be launched in February.
The report says that it would bring in more than $10 billion to
Cobalis per year by 2010 and will be launched in February.
Cobalis Corp.'s develops and commercializes medical products,
primarily related to allergic diseases. The company filed for
Chapter 11 in November 2007.
ECLIPSE AVIATION: Depositors Want New Owners to Finish Planes
-------------------------------------------------------------
Aero-News reports that 24 depositors whose Eclipse 500 jets were
left unfinished on the production line when Eclipse Aviation filed
for bankruptcy, have gone to the U.S. Bankruptcy Court for the
District of Delaware, asking that the eventual owners of the
assets of the company be required to finish their planes at the
originally contracted price.
As reported by the Troubled Company Reporter on Jan. 16, 2009, the
auction for Eclipse Aviation's assets was cancelled after the
company failed to attract any qualified bids by the Jan. 13
deadline. Eclipse Aviation consulted with the Ad Hoc Committee of
Senior Secured Noteholders and the Official Committee of Unsecured
Creditors, and determined that there were no qualified bids. The
lack of bids lets Eclipse Aviation's largest shareholder, ETIRC
Aviation, to proceed with plans to buy the bankrupt company.
Aero-News relates that those holding deposits on Eclipse 500
serial numbers 261-296 assert that they are the legal owners of
the aircraft, and not Eclipse Aviation, as they have already paid
10% and, in almost all cases, 60% deposits against the planes.
The terms of ETIRC's proposed sale, which is being considered by
the Court, state that the planes would revert to ETIRC's
ownership, the report says.
Albuquerque, New Mexico-based Eclipse Aviation Corporation --
http://www.eclipseaviation.com/-- makes six-passenger planes
powered by two Pratt & Whitney turbofan engines. The company and
Eclipse IRB Sunport, LLC filed separate petitions for Chapter 11
relief on Nov. 25, 2008 (Bankr. D. Delaware Lead Case No.
08-13031). Daniel Guyder, Esq., John Kibler, Esq., and David C.
Frauman, Esq., at Allen & Overy LLP, represent the Debtors as
counsel. Joseph M. Barry, Esq., and Donald J. Bowman, Esq., at
Young Conaway Stargatt & Taylor, LLP, represent the Debtors as
Delaware counsel. Eclipse Aviation Corporation listed assets of
between $100 million and $500 million and debts of more than
$1 billion.
ENCAP GOLF: Says Dismissal of Case Will Hurt Parties, Public
------------------------------------------------------------
Bankruptcy Law360 reports that EnCap Golf Holdings LLC and its
unsecured creditors committee are pushing back against Wachovia
Bank N.A.'s effort to get EnCap's bankruptcy dismissed for failing
to offer a confirmable plan. The report says the Debtors and the
Committee argue that dismissing the case would hurt the parties
involved and the public. The report says Encap told the U.S.
Bankruptcy Court for the District of New Jersey that the
bankruptcy was necessary so that EnCap could complete its project.
On Dec. 3, 2008, the Troubled Company Reporter said that Wachovia
Bank renewed its attempt to have the Debtors' cases dismissed,
asserting that Encap failed to file a confirmable plan. In June
2008, Wachovia and other banks that hold mortgages on EnCap's
785-acre property asked the Bankruptcy Court to dismiss EnCap's
bankruptcy as a "bad faith" filing. Judge Novalyn Winfield had
rejected the request and denied Wachovia's bid to have the cases
converted to Chapter 7 liquidation.
About EnCap Golf
Headquartered in East Rutherford, New Jersey, EnCap Golf
Holdings, LLC, a subsidiary of Cherokee Investment Partners of
North Carolina, develops closed landfills and other brownfield
properties into golf courses.
The company and its affiliate, NJM Capital LLC, filed for
Chapter 11 protection on May 8, 2008 (Bankr. D. N.J. Lead Case
No. 08-18581). Michael D. Sirota, Esq., at Cole, Schotz, Meisel,
Forman & Leonard, P.A., in Hackensack, New Jersey, represents the
Debtors. The U.S. Trustee for Region 3 appointed five creditors
to serve on an Official Committee of Unsecured Creditors.
Greenberg Traurig LLP represents the Committee in this case. The
Debtors' schedules disclose total assets of $70,056,038 and total
liabilities of $458,587,968.
The Debtors filed their chapter 11 plan on September 30, 2008.
Trump Organization delivered a competing plan the following day.
ENTERPRISES MGT: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Enterprise Management Solutions, Inc.
600 Cleveland Street, Suite 1050
Clearwater, FL 33755
Bankruptcy Case No.: 09-00815
Type of Business: The Debtor offers information technology
services.
See: http://www.emscorporation.com/
Chapter 11 Petition Date: January 19, 2009
Court: Middle District of Florida (Tampa)
Debtor's Counsel: Angelina E. Lim, Esq.
angelinal@jpfirm.com
Johnson Pope Bokor Ruppel & Burns LLP
911 Chestnut Street
Clearwater, FL 33756-5643
Tel: (727) 461-1818
Estimated Assets: $100,000 to $1 million
Estimated Debts: $1 million to $100 million
The Debtor's Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
BMC Software $544,468
2101 City West Blvd.
Houston, TX 77042
Health First $300,206
3300 Fiske Blvd.
Rockledge, FL 32955
William B. Cockayne $232,671
2182 Shaw Lane
Orlando, FL 32814
JetBlue $199,419
Turner $184,237
Landesk $173,864
Syniverse $142,776
Ryder $134,667
Charley DiSalvo $112,480
Joe Fiorello $65,016
Tyco Macom $62,142
Cooper $57,178
Presidio $56,778
Mike Sell $50,176
RightStart Systems $46,193
Sigma Tek $42,983
Cayman Island Gov't $33,506
Bank of America $31,170
Rollins $28,652
Perceptis $20,220
The petition was signed by Adam Alonso, chief executive officer.
ERIC SINGLETON: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Eric Singleton
dba Deer Valley Drive Holding Company I, LLC
dba Deer Valley Drive Holding Company II, LLC
dba City Creek Property Holdings, LLC
dba City Creek Property Management, LLC
Colette Singleton
dba Deer Valley Drive Holdings II, LLC
413 North Virgina Street
Salt Lake City, UT 84103
Bankruptcy Case No.: 09-20422
Chapter 11 Petition Date: January 19, 2009
Court: District of Utah (Salt Lake City)
Debtor's Counsel: Jeremy D. Eveland, Esq.
Eveland & Associates, PLLC
8833 South Redwood Road, Suite C-2
West Jordan, UT 84088
Tel: (801) 676-5506
Fax: (801) 676-5508
jeremy@evelandlawfirm.com
Estimated Assets: $1 million to $10 million
Estimated Debts: $10 million to $50 million
The Debtor did not file a list of 20 largest unsecured creditors.
GEORGIA GULF: May Tumble Into Bankruptcy, Bloomberg Says
--------------------------------------------------------
Ineos Group Holdings, Georgia Gulf Corp. and Chemtura Corp. are
crashing on a mountain of takeover debt and may follow Lyondell
Chemical Co. into bankruptcy, trading in their bonds shows,
Bloomberg news says.
LyondellBasell, which in 2008 was still in the first year of being
a combined enterprise of Lyondell Chemical and Basell to create
the world's third-largest independent chemical company, sent its
U.S. units to Chapter 11 bankruptcy on Jan. 6 due to its declining
liquidity. Lyondell found itself seriously challenged by volatile
commodity markets and prices, changing consumer demand for oil
products and plastics, the deterioration of the credit markets,
and the substantial retrenchment of some of its largest direct and
indirect customers, including those in the automotive and
construction industries. According to Reuters, while
LyondellBasell had no near-term debt maturities it had "little
room for maneuver," with the scale of its debt and illiquid credit
markets. In the bankruptcy petition, Lyondell Chemicals estimated
that consolidated assets total $27.12 billion and debts total
$19.34 billion as of the petition date.
As to Ineos, Georgia Gulf and Chemtura, Bloomberg said the
combination of $11.7 billion in debt, frozen credit markets and
the global recession are forcing the companies to negotiate with
creditors to loosen terms of their loans. A glut in supplies that
drove prices of polypropylene down by half since October will make
it even harder for plastics makers to meet debt payments, just as
manufacturers in the Middle East add millions of tons of new
supplies.
"The most leveraged names are the first ones that are going
to run into problems," said Andrew Brady, a New York-based
analyst at CreditSights Inc., according to Bloomberg. "The market
knows they are struggling, and there is a huge risk of
bankruptcy."
Chemtura had disclosed $3.88 billion in assets and about $2.46
billion in debts as of Sept. 30, 2008. As of September 30, 2008,
total debt was 2.7 times adjusted earnings before interest, taxes,
depreciation and amortization. In February 2008, the company
repurchased $30 million of its then outstanding $400 million 7%
Notes Due 2009. The Notes mature in July 2009.
Georgia Gulf disclosed $2 billion in assets and debts of $1.89
billion as of Sept. 30, 2008. Georgia Gulf said that at Sept. 30,
2008 under its revolving credit facility, it had a maximum
borrowing capacity of $375.0 million with $6.5 million through
Lehman Commercial Paper Inc., a subsidiary of Lehman Brothers,
Inc. that is unavailable due to their current bankruptcy filing.
Net of outstanding letters of credit of $83.1 million and current
borrowings of $125.8 million, it had remaining availability of
$159.6 million.
Ineos' net debt was about EUR7.29 billion (US$9.67 billion) as of
Sept. 30, or 4.3 times EBITDA, Chief Financial Officer John Reece
said in a Jan. 15 interview, according to Bloomberg.
"That level of leverage is quite modest," Mr. Reece said. "Prior
to the credit crunch, four times leverage was considered
pretty conservative."
About Georgia Gulf
Georgia Gulf Corporation is a manufacturer and international
marketer of two integrated chemical product lines, chlorovinyls
and aromatics. The Company?s primary chlorovinyls products are
chlorine, caustic soda, vinyl chloride monomer (VCM), vinyl resins
and vinyl compounds. Its aromatics products are cumene, phenol and
acetone. The Company has four business segments: chlorovinyls;
window and door profiles, and moldings products; outdoor building
products, and aromatics. The chlorovinyls segment includes
chlorine, caustic soda, VCM and vinyl resins and compounds. Its
vinyl-based building and home improvement products are marketed
primarily under the Royal Group brand names, and are managed
within two segments, window and door profiles and moldings
products, and outdoor building products, which include siding,
pipe and pipe fittings, deck, fence and rail products, and outdoor
storage buildings. The aromatics segment includes cumene and the
co-products phenol and acetone
GOODY'S LLC: Ad Hoc Committee Wants Chapter 11 Case Dismissed
-------------------------------------------------------------
The Ad Hoc Committee of Unsecured Creditors of Goody's LLC and its
debtor-affiliates asks the Hon. Christopher S. Sontchi of the
United States Bankruptcy Court for the District of Delaware to
dismiss the Debtors' Chapter 11 cases.
The Committee tells the Court that the confirmed plan of
Goody's Family Clothing Inc. were not substantially consummated
because the Debtors' failed to make the required payments to
administrative, priority and other unsecured claimants. The
Committee alleges that the Debtors is now attempting to run and
hide from more than $10 million of accrued but unpaid
administrative debt from the first bankruptcy case.
According to the Committee, the Debtors' majority shareholder
Prentice Capital Management abused the protection provided by the
Chapter 11 to avoid substantial obligations outstanding under the
the plan, which became effective less than three months ago and
remains pending before the Court.
The Ad Hoc Committee consists of Quebecor World (USA) Inc., Lee
Company, All Stare Apparel, Alfred Dunner Inc., Chaps/Warnaco,
Homedics Inc., Hybrid Promotions LLC, Capelli of New York, MJ
Fashion/Hypnotik, Logo Chair, and Russell Athletic Sportswear.
About Goody's LLC
Headquartered in Wilmington, Delaware, Goody's LLC --
http://www.shopgoodys.com-- Goody's Family Clothing
Inc. -- http://www.shopgoodys.com/-- operates chains of clothing
stores. The company and 13 of its affiliates filed for Chapter 11
protection on January 13, 2009 (Bankr. D. Del. Lead Case No.
09-10124). M. Blake Cleary, Esq., at Young, Conaway, Stargatt &
Taylor LLP, represents the Debtors in their restructuring efforts.
The Debtor proposed Bass Berry & Sims PLC and Skadden Arps Slate
Meagher & Flom LLP as their special counsel; FTI Consulting Inc.
as financial advisor; and Hilco Merchant Resources LLC and Gordon
Brothers Retail Partners LLC as liquidation agent.
The company is owned by Goody's Holdings Inc., a non-debtor
entity. As of May 31, 2008, the company operated 355 stores in
several states with approximately 9,868 personnel of which 170
employees are covered under a collective bargaining agreement.
The company and 19 of its affiliates filed for Chapter 11
protection on June 9, 2008 (Bankr. D. Del. Lead Case No.
08-11133). Gregg M. Galardi, Esq., and Marion M. Quirk, Esq.,
at Skadden Arps Slate Meagher & Flom LLP, and Paul G. Jennings,
Esq., at Bass, Berry & Sims PLC, represented the Debtors. The
Debtors selected Logan and Company Inc. as their claims agent.
The company emerged from bankruptcy Oct. 20, 2008, after closing
more than 70 stores.
When the Debtors filed for protection from their creditors for the
second time, they listed assets and debts between
$100 million to $500 million each.
GOODY'S LLC: Can Access Lenders' Cash Collateral on Interim
-----------------------------------------------------------
The Hon. Christopher S. Sontchi of the United States Bankruptcy
Court for the United States Bankruptcy Court for the District of
Delaware authorized Goody's LLC and its affiliated debtors to
access, on an interim basis, cash collateral securing repayment of
secured loan to petition secured lenders.
The Debtors said they have the urgent need for use of cash
collateral to pay operating expenses including payroll as
reflected in the budget -- including the liquidation of their
assets through an orderly going out of business sales. The Debtor
said they have minimal cash on hand and limited accounts
receivables.
As adequate protection, the prepetition lenders will be granted
valid, continuing and automatically perfected first priority
security interest and replacement liens in and upon all of the
Debtors' properties and assets.
A full-text copy of the Debtors' cash collateral budget is
available for free at: http://ResearchArchives.com/t/s?3848
About Goody's LLC
Headquartered in Wilmington, Delaware, Goody's LLC --
http://www.shopgoodys.com-- Goody's Family Clothing
Inc. -- http://www.shopgoodys.com/-- operates chains of clothing
stores. The company and 13 of its affiliates filed for Chapter 11
protection on January 13, 2009 (Bankr. D. Del. Lead Case No.
09-10124). M. Blake Cleary, Esq., at Young, Conaway, Stargatt &
Taylor LLP, represents the Debtors in their restructuring efforts.
The Debtor proposed Bass Berry & Sims PLC and Skadden Arps Slate
Meagher & Flom LLP as their special counsel; FTI Consulting Inc.
as financial advisor; and Hilco Merchant Resources LLC and Gordon
Brothers Retail Partners LLC as liquidation agent.
The company is owned by Goody's Holdings Inc., a non-debtor
entity. As of May 31, 2008, the company operated 355 stores in
several states with approximately 9,868 personnel of which 170
employees are covered under a collective bargaining agreement.
The company and 19 of its affiliates filed for Chapter 11
protection on June 9, 2008 (Bankr. D. Del. Lead Case No.
08-11133). Gregg M. Galardi, Esq., and Marion M. Quirk, Esq.,
at Skadden Arps Slate Meagher & Flom LLP, and Paul G. Jennings,
Esq., at Bass, Berry & Sims PLC, represented the Debtors. The
Debtors selected Logan and Company Inc. as their claims agent.
The company emerged from bankruptcy Oct. 20, 2008, after closing
more than 70 stores.
When the Debtors filed for protection from their creditors for the
second time, they listed assets and debts between
$100 million to $500 million each.
GOODY'S LLC: Logan & Company Approved as Claims Agent
-----------------------------------------------------
The Hon. Christopher S. Sontchi of the United States Bankruptcy
Court for the United States Bankruptcy Court for the District of
Delaware authorized Goody's LLC and its affiliated debtors to
employ Logan & Company Inc. as their claims, notice, balloting and
distribution agent.
The firm is expected to:
a) transmit certain notices to creditors and parties in
interest in these cases;
b) receive, docket, maintain, copy and transmit proofs of claim
in these cases;
c) oversee the distribution of solicitation material;
d) receive, review and tabulate ballots; and
e) perform other administrative tasks.
The firm will be paid standard prices for its services, expense
and supplies including any necessary out-of-pocket expenses
incurred under the service agreement.
Kathleen M. Logan, president of the firm, assures the Court that
the firm does not hold any interests adverse to the Debtors'
estate and their creditors and is a "disinterested person" as
defined in Section 101(14) of the Bankruptcy Code.
A full-text copy the services agreement is available for free
At: http://ResearchArchives.com/t/s?384c
About Goody's LLC
Headquartered in Wilmington, Delaware, Goody's LLC --
http://www.shopgoodys.com-- Goody's Family Clothing
Inc. -- http://www.shopgoodys.com/-- operates chains of clothing
stores. The company and 13 of its affiliates filed for Chapter 11
protection on January 13, 2009 (Bankr. D. Del. Lead Case No.
09-10124). M. Blake Cleary, Esq., at Young, Conaway, Stargatt &
Taylor LLP, represents the Debtors in their restructuring efforts.
The Debtor proposed Bass Berry & Sims PLC and Skadden Arps Slate
Meagher & Flom LLP as their special counsel; FTI Consulting Inc.
as financial advisor; and Hilco Merchant Resources LLC and Gordon
Brothers Retail Partners LLC as liquidation agent.
The company is owned by Goody's Holdings Inc., a non-debtor
entity. As of May 31, 2008, the company operated 355 stores in
several states with approximately 9,868 personnel of which 170
employees are covered under a collective bargaining agreement.
The company and 19 of its affiliates filed for Chapter 11
protection on June 9, 2008 (Bankr. D. Del. Lead Case No.
08-11133). Gregg M. Galardi, Esq., and Marion M. Quirk, Esq.,
at Skadden Arps Slate Meagher & Flom LLP, and Paul G. Jennings,
Esq., at Bass, Berry & Sims PLC, represented the Debtors. The
Debtors selected Logan and Company Inc. as their claims agent.
The company emerged from bankruptcy Oct. 20, 2008, after closing
more than 70 stores.
When the Debtors filed for protection from their creditors for the
second time, they listed assets and debts between
$100 million to $500 million each.
GREATER ATLANTIC: Auditor Raises Going Concern Doubt
----------------------------------------------------
BDO Seidman, LLP, in Richmond, Virginia, in a letter dated
January 12, 2009, to the Board of Directors and Stockholders of
Greater Atlantic Financial Corp. expressed substantial doubt about
the company's ability to continue as a going concern. The firm
audited the consolidated statements of financial condition of
Greater Atlantic Financial Corp. and its subsidiaries as of
September 30, 2008 and 2007 and the related consolidated
statements of operations, stockholders' equity (deficit),
comprehensive income (loss) and cash flows for each of the two
years in the period ended September 30, 2008.
BDO Seidman pointed out that the company's bank subsidiary
currently does not meet capital requirements required by a Cease
and Desist Order issued by the Office of Thrift Supervision and
has not been able to raise additional capital to meet those
requirements. In addition, the company does not expect to regain
profitability in the foreseeable future due to restrictions on the
company's lending activities placed by the Cease and Desist Order.
Without a waiver by the OTS or amendment or modification of the
Cease and Desist Order, the bank could be subject to further
regulatory enforcement action, including, without limitation, the
issuance of additional cease and desist orders on the bank's
lending activities or placing of the bank in conservatorship or
receivership. "Together, these matters raise substantial doubt as
to the company's ability to continue as a going concern."
"The company continues actively to market itself, seeking either
to be acquired or to obtain a capital infusion in order to meet
the conditions of the Cease and Desist Order. We cannot assure
you that our efforts will be successful," Carroll E. Amos, chief
executive officer, president and director, disclosed in a
regulatory filing dated January 12, 2009.
As of September 30, 2008, the company's balance sheet showed total
assets of $202,407,000 and total liabilities of $206,001,000,
resulting in total stockholders' deficit of $3,594,000.
For the year ended September 30, 2008, the company posted a net
loss of $10,910,000 compared with a net income of $951,000 a year
earlier. "The $11.9 million increase in the net loss over the
comparable period one-year ago was primarily the result of an
increase in the provision for loan losses and decreases in net
interest income and non-interest income and an increase in non-
interest expense. The ongoing net losses from operations remain a
consistent problem for management because the loan production
needed to maintain the retail branch network has not been
attained, and the limitations in the Cease and Desist Order
restricting the bank's lending in the commercial, commercial real
estate and construction areas adversely affect the ability of the
bank to return to profitability."
A full-text copy of the company's annual report is available for
free at: http://researcharchives.com/t/s?3841
About Greater Atlantic
Greater Atlantic Financial Corp. is a bank holding company whose
principal activity is the ownership and management of Greater
Atlantic Bank. The bank originates commercial, mortgage and
consumer loans and receives deposits from customers located
primarily in Virginia, Washington, D.C. and Maryland. The bank
operates under a federal bank charter and provides full banking
services.
GREATER CHINA: Auditor Raises Going Concern Doubt
-------------------------------------------------
Michael T. Studer CPA P.C., in Freeport, New York, in a letter
dated January 12, 2009, to the Board of Directors and Stockholders
of Greater China Media and Entertainment Corp. expressed
substantial doubt about the company's ability to continue as a
going concern.
The firm audited the consolidated balance sheets of Greater China
Media and Entertainment Corp. and subsidiaries as of
September 30, 2008 and 2007 and the related consolidated
statements of operations, stockholders' equity, and cash flows for
the years then ended.
According to Michael T. Studer, the company's present financial
situation raises substantial doubt about its ability to continue
as a going concern.
At September 30, 2008, the company had negative working capital of
$1,274,708. For the years ended September 30, 2008 and 2007, the
company incurred net losses of $1,008,243 and $943,356,
respectively. "These factors create substantial doubt as to the
company's ability to continue as a going concern. The company
plans to raise additional capital and to establish profitable
business operations. However, there is no assurance that the
company will be successful in accomplishing these objectives,"
Jake Wei, president, principal executive officer and a member of
the board of directors, disclosed in a regulatory filing dated
January 13, 2009.
As of September 30, 2008, the company's balance sheet showed total
assets of $2,342,216, total liabilities of $1,985,322, minority
interests of $143,038 and total stockholders' equity of $213,856
A full-text copy of the company's annual report is available for
free at: http://researcharchives.com/t/s?3845
About Greater China
Greater China Media and Entertainment Corp. is involved in media
and entertainment activities in the People's Republic of China.
HAWAIIAN TELCOM: Use of Cash Collateral Approved on Final Basis
---------------------------------------------------------------
Judge Lloyd King of the U.S. Bankruptcy Court for the District of
Hawaii entered a final order on January 15, 2009, allowing
Hawaiian Telcom Communications, Inc., and its debtor-affiliates to
use of the cash collateral securing obligations to their lenders,
for the continued operation of the Debtors' businesses. The Cash
Collateral consists of all funds of the Debtors as of the Petition
Date, and its proceeds received postpetition.
Goldman Sachs Objection
Goldman Sachs Bank USA tried to block the approval of the Debtors'
request. Goldman Sachs argued that it is a secured creditor in
the Debtors' Chapter 11 cases, and that it was not given notice of
the Cash Collateral Motion, nor was its interest granted adequate
protection under Section 363 of the Bankruptcy Code.
Simon Klevansky, Esq., at Klevansky, Piper, van Etten, LLP, in
Honolulu, Hawaii, said the Debtors' obligations are qualified
under a guarantee and collateral agreement with Goldman Sachs, as
"obligations" to Goldman Sachs Capital Markets, L.P., an affiliate
of Goldman Sachs Credit Partners, L.P. GS Credit Partners was a
lender under the Prepetition Credit Agreement, he noted.
Under the Guarantee and Collateral Agreement, "obligations"
include the due and punctual payment of each loan party under
each swap agreement in effect on, or entered into after, the
effective date, with any counterparty that is a lender or its
affiliate. The amounts of the obligations must be reduced by the
amount of any cash deposits securing the swap agreement.
Mr. Klevansky said that under the Cash Collateral Interim Order,
the Prepetition Secured Parties excluded secured swap
counterparties, including Goldman Sachs. He argued that there is
no principled basis for the Debtors to discriminate against the
secured interest of secured swap counterparties. Unless the
Court prohibits the use of Cash Collateral or conditions the Cash
Collateral use upon providing Goldman Sachs with adequate
protection equal to that provided to the Prepetition Secured
Parties, Mr. Klevansky said, Goldman Sachs Bank will suffer
irreparable damage due to the loss of value of its collateral,
since the Prepetition Liens becomes subordinated to the Adequate
Protection Liens granted by the Interim Order.
Goldman Sachs said the Final Cash Collateral Order should clarify
that it be provided with treatment substantially similar to those
of the Prepetition Secured Parties, since their rights and
entitlements are not greater than those of Goldman Sachs Bank.
Debtors Respond, Call Witnesses
At the hearing on January 8, 2009, the Debtors called on two
witnesses:
* Robert Reich, chief financial officer of Hawaiian Telecom
Communications, Inc.; and
* Kevin Nystrom, chief operating officer of Hawaiian Telecom
Communications, Inc.
Mr. Reich testified on the Debtors' need to use funds in their
investment and depository accounts to fund business operations
during the pendency of the Chapter 11 cases. He also attested on
the amounts in and liens on those accounts, the importance of a
consensual use of funds, and the Debtors' challenges during the
initial stages of their bankruptcy.
Mr. Reich and Mr. Nystrom both testified with regard to the
Debtors' arms-length, prepetition negotiations with the secured
lenders.
In response to the objections, the Debtors argue that while their
operations in Chapter 11 will be easier if the Prepetition
Lenders did not have interest in the cash, it does not support
the assertion of the objecting parties, including the Official
Committee of Unsecured Creditors and the Noteholders.
The Debtors believe that their remaining cash as of the Petition
Date is the proceeds of collateral in which the Prepetition
Lenders had valid, perfected security interests. The Debtors
contended that the overwhelming majority of their cash as of the
Petition Date is the Cash Collateral, and access to that Cash is
necessary to their continued operations. The Debtors also
believe that litigating with the Prepetition Lenders regarding
liens on a relatively small amount of cash is not a prudent use
of their resources.
In support of the Debtors' request, the Prepetition Lenders told
the Court that the proposed final cash collateral order should be
approved in its entirety and without modification.
James N. Duca, Esq., at Lyons Brandt Cook & Hiramatsu, in
Honolulu, Hawaii, argued that the Prepetition Lenders' adequate
protection obligations pursuant to the Cash Collateral Order are
necessary, appropriate, and adequate forms of protection against
the diminution in value of the Cash Collateral. In exchange for
these protections, the Prepetition Lenders have consented to the
Debtors' use of their cash collateral, in order to fund their
business operations and reorganization.
With respect to the objection previously filed by the Committee,
the Prepetition Lenders remind the Court that together with the
Debtors and Noteholders, they have negotiated the terms of the
Interim Cash Collateral Order to expedite the process of
reorganizing or selling the Debtors' business, while providing
the Prepetition Lenders with protection from the risk in funding
the Debtors. Thus, the Committee's objection, as well as the
other objections to the Cash Collateral Motion, should be
overruled as "a thinly veiled effort" of backing away from a
judicially-approved stipulation, the Prepetition Lenders told the
Court.
Cash Collateral Budget
Judge King held that the Debtors may use the Cash Collateral as
set forth in their budget, until the earlier of February 28, 2009,
or the occurrence of termination events, which include, among
others:
* the Debtors' failure to comply with the Final Cash
Collateral Order;
* modification of the Order without the prior written consent
of the Prepetition Agent;
* the cumulative aggregate cash disbursements under the Budget
line items "Purchases excluding CAPEX" and "NonNGTV CAPEX"
exceeds the cumulative total disbursements by these
percentages:
Week Ending Percentage
----------- ----------
January 2, 2009 140%
January 9, 2009 130%
January 16, 2009 125%
January 23, 2009 120%
January 30, 2009,
and each week thereafter 115%
* the cumulative aggregate cash disbursements under the Budget
line item "NGTV CAPEX" exceeds the cumulative total
disbursements by these percentages:
Week Ending Percentage
----------- ----------
January 2, 2009 140%
January 9, 2009 130%
January 16, 2009 125%
January 23, 2009 120%
January 30, 2009,
and each week thereafter 115%
* the commencement of an action against any Prepetition
Secured Party with respect to prepetition financing
documents;
* any relief from the automatic stay granted to any holder of
security interest, lien, or setoff with respect to any of
the Debtors' assets exceeding $1,000,000 in value;
* except as permitted by the First Day Orders, a payment of
any Debtor of prepetition claims exceeding $10,000
individually or $100,000 in the aggregate; and
* a dismissal of, or conversion into Chapter 7, of the Chapter
11 cases.
Administrative claims will not be charged against the Cash
Collateral, without prior written notice of the Prepetition
Agent. The Prepetition Secured Parties are entitled to adequate
protection of their interest in the Cash Collateral for the
amount equal to the value of their interest in the Collateral.
A full-text copy of the Debtors' Final Cash Collateral Order is
available for free at:
http://bankrupt.com/misc/HawTelFinalCashCollOrder.pdf
About Hawaiian Telecom
Based in Honolulu, Hawaii, Hawaiian Telecom Communications, Inc.
-- http://www.hawaiiantel.com/-- operates a telecommunications
company, which offers an array of telecommunications products and
services including local and long distance service, high-speed
Internet, wireless services, and print directory and Internet
directory services.
The company and seven of its affiliates filed for Chapter 11
protection on Dec. 1, 2008 (Bankr. D. Del. Lead Case No.
08-13086). As reported by the Troubled Company Reporter on
December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court
for the District of Delaware approved the transfer of the Chapter
11 cases to the U.S. Bankruptcy Court for the District of Hawaii
before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005).
Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J.
Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in
their restructuring efforts. The Debtors proposed Lazard Freres &
Co. LLC as investment banker; Zolfo Cooper Management LLC as
business advisor; Deloitte & Touche LLP as independent auditors;
and Kurztman Carson Consultants LLC as notice and claims agent.
An official committee of unsecured creditors has been appointed in
the case. The committee is represented by Christopher J. Muzzi,
Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu,
Hawaii.
When the Debtors filed for protection from their creditors, they
listed total assets of $1,352,000,000 and total debts of
$1,269,000,000 as of Sept. 30, 2008.
Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
undertaken by Hawaiian Telcom Communications, Inc. and seven of
its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
HAWAIIAN TELCOM: Files Schedules of Assets and Debts
----------------------------------------------------
Hawaiian Telcom Inc. filed with the U.S. Bankruptcy Court for the
District of Hawaii its schedules of assets and liabilities,
disclosing:
A. Real Property
Main Company Building $42,821,776
Moanalua Base Yard & Supply 14,448,232
HILO Central Office 7,613,605
Punahou Central Office 4,416,531
Kamuekl Co Bldg 4,116,395
Wailuku Central Office 3,800,358
Lihue Central Office 3,299,870
Soda Creek Central Office 2,960,464
Waikiki Central Office 2,669,010
Kapaa Central Office 2,644,916
Kakaako Central Office 2,550,234
Lihue Base Yard 2,196,640
Mililani Central Office 1,873,398
Moanalua Central Office 1,828,296
AIEA Central Office 1,731,046
Kalihi Central Office 1,683,720
Wailua Homesteads - RSC 1,669,363
Kaimuki Central Office 1,589,915
Kihei Central Office 1,569,040
Pearl City Central Office 1,561,677
North Kihei RSU 1,557,145
Wailua Houselots - RSC 1,478,009
Waikiloa Central Office 1,468,958
Wahiawa Central Office 1,328,007
Kula Central Office 1,284,120
Kahaluu BaseYard 1,264,980
Princeville Central Office 1,224,442
Makakilo Central Office 1,189,504
Waipahu Centrtal Office 1,184,729
Kona Central Office 1,156,473
Royal Kunia Central Office 1,085,744
Lanai Central Office 1,055,725
Others 34,493,763
Elements and Rights of Way Undetermined
B. Personal Property
B.1 Cash on hand
Aikan Cafe - Change funds 14,880
B.2 Bank accounts
First Hawaiian Bank 6,238,617
Bank of Hawaii 1,338,155
JP Morgan Chase Bank 24,115
B.3 Security deposits 0
B.4 Household goods 0
B.5 Collectibles 0
B.6 Wearing apparel 0
B.7 Furs and jewelry 0
B.8 Firearms, sports, and other equipment 0
B.9 Interests in Insurance Policies 0
B.10 Annuities 0
B.11 Interests in education IRA 0
B.12 Interests in IRA, ERISA or other pension plans 0
B.13 Business interests and stocks
Hawaiian Telecom Insurance Company 1,159,403
B.14 Interests in partnerships 0
B.15 Government and corporate bonds 0
B.16 Accounts receivable
Hawaiian Telecom Services Company 198,287,785
Hawaiian Telecom Communications, Inc. 154,984,936
Customers 62,136,283
B.17 Alimony 0
B.18 Other liquidated debts 0
B.19 Equitable or future interests 0
B.20 Other contingent & unliquidated claims 0
B.21 Intellectual property Unknown
B.22 Patents Unknown
B.23 Licenses, franchises, and intangibles Unknown
B.24 Customer lists Unknown
B.25 Vehicles 1,606,631
B.26 Boats 0
B.27 Aircraft and accessories 0
B.28 Office equipment, furnishings and supplies
Software 45,153,286
Computer Equipment 5,579,796
Other Work Equipment 5,410,624
B.29 Machinery
Network Equipment 281,719,704
Central Office Equipment 240,151,421
Other Miscellaneous 2,545,751
B.30 Inventory 4,286,577
B.31 Animals 0
B.32 Crops 0
B.33 Farming equipment 0
B.34 Farm supplies 0
B.35 Other personal property 0
TOTAL SCHEDULED ASSETS $1,167,454,045
========================================================
C. Property Claimed as Exempt
D. Secured Claim
Goldman Sachs Bank USA $7,218,246
JP Morgan Chase Bank NA 7,218,246
Lehman Commercial Paper Inc. 89,800,000
Lehman Commercial Paper Inc. 484,700,000
E. Unsecured Priority Claims
Alan B. Oshima 19,320
F. Unsecured Non-priority Claims
Hawaiian Telcom Services Company Inc. 291,810,083
U.S. Bank, NA
-- as indenture trustee of Senior Secured
Fixed Rate Notes due 2013 211,375,000
-- as indenture trustee of Senior Secured
Floating Rate Notes due 2013 157,601,750
Deutsche Bank Int'l. Natl Trust Company 150,937,500
Hawaiian Telcom Communications Inc. 137,810,083
HYP Media Finance LLC 3,569,172
Others 21,502,310
See http://bankrupt.com/misc/HawTelSAL_UnsecuredNonPrio.pdf
TOTAL SCHEDULED LIABILITIES $1,563,561,711
========================================================
HAWAIIAN TELCOM: Files Statement of Financial Affairs
-----------------------------------------------------
Hawaiian Telcom, Inc. Senior Vice President, Chief Financial
Officer and Treasurer Robert F. Reich relates that the Company
generated income from the operation of its business two years
immediately preceding 2008:
Source Period Amount
------ ------ ------------
Access Year 2006 $151,619,565
Year 2007 $144,377,613
Jan. to Nov. 30, 2008 $124,887,023
Ancillary Year 2006 $14,710,713
Year 2007 $13,382,324
Jan. to Nov. 30, 2008 $11,575,912
Local Service Year 2006 $210,502,932
Year 2007 $225,310,921
Jan. to Nov. 30, 2008 $178,034,304
The Company also earned income other than from employment or the
operation of its business during the two years immediately
preceding the Petition Date:
Source Period Amount
------ ------ ------------
Interest Year 2006 $303,426
Year 2007 $194,578
Jan. to Nov. 2008 $358,622
Proceed from
sale of land Year 2007 $331,000
Within 90 days before the Petition Date, the Company made
payments to certain creditors and insiders, a list of which is
available for free at:
http://bankrupt.com/misc/HawTel3b_Creditors.pdf
http://bankrupt.com/misc/HawTel3c_Insiders.pdf
Mr. Reich discloses that Hawaiian Telcom Inc. is a party to 59
lawsuits and administrative proceedings, a list of which is
available for free at:
http://bankrupt.com/misc/HawTel4a_Lawsuits.pdf
The Company paid these amounts for consultation concerning debt
consolidation, relief under the bankruptcy law or preparation of
a petition in bankruptcy within one year immediately preceding
the Petition Date:
Firm Payment
---- -------
Zolfo Cooper LLC $4,559,142
Kirkland & Ellis LLP 2,601,759
Lazard Freres & Co. LLC 834,186
Ernst & Young LLP 266,446
Kurtzman Carson Consultants 100,000
Klehr, Harrison, Harvey, 150,000
Branzburg & Ellers LLP
Within two years immediately preceding the Petition Date, the
Debtor transferred these properties either absolutely or as
security:
Transferee Date Property
--------- ---- --------
1192 Alakea LLC 11/14/2008 Subdivided parcel
valued at $1,000,000
Norman/Bonita Smith 11/14/2007 Raw land worth $331,000
Mr. Reich discloses that from March 7, 2008, until the present,
he supervises the upkeep of the Company's books of account and
records. These records have been audited by Deloitte & Touche
LLP, within two years immediately preceding the Petition Date, he
avers.
These shareholders, officers and directors directly or indirectly
owns, controls, or holds 5% or more of the voting or equity
securities of the Company:
Name Title
---- -----
Hawaiian Telecom Shareholder (100%)
Communications, Inc.
Eric K. Yeaman Director, President, CEO
Kevin J. Nystrom Chief Operating Officer
Robert F. Reich Sr. VP, CFO, Treasurer
Ryan F. Suzuki Assistant treasurer
Rose M. Hauser Senior VP, Chief Information Officer
John T. Komeiji Senior VP and general counsel
Craig T. Inouye Senior VP Sales
Geoffrey W.C. Loui Senior VP Strategy and marketing
Michael F. Eld Senior VP Network services
John K. Duncan VP and Controller
Francis K. Mukai VP, Associate Gen. Counsel, Secretary
Galen K. Haneda VP Business sales
James LaClair VP Service centers
Jeffery A. Hoffman VP Financial planning and analysis
Steven P. Golden VP External affairs
William G. Chung VP Human Resources & Labor Relations
Alan M. Oshima Director
The Company's parent corporation, Hawaiian Telcom Holdco, Inc.,
holds taxpayer-identification number 84-1659868, for taxpayer
purposes within six years immediately prior to its bankruptcy
filing.
HAWAIIAN TELCOM: HawTel Unit Files Schedules of Assets and Debts
----------------------------------------------------------------
Hawaiian Telecom Communications, Inc., delivered to the U.S.
Bankruptcy Court for the District of Hawaii its schedules of
assets and liabilities, disclosing:
A. Real Property $0
B. Personal Property
B.1 Cash on hand 0
B.2 Bank accounts
First Hawaiian Bank 0
JP Morgan Chase Bank 17,552
Wells Fargo 68,219,150
B.3 Security deposits 0
B.4 Household goods 0
B.5 Collectibles 0
B.6 Wearing apparel 0
B.7 Furs and jewelry 0
B.8 Firearms, sports, and other equipment 0
B.9 Interests in Insurance Policies 0
B.10 Annuities 0
B.11 Interests in education IRA 0
B.12 Interests in IRA, ERISA or other pension plans 0
B.13 Business interests and stocks
Hawaiian Telcom Inc. 1,000,733,857
Hawaiian Telcom Services Company 393,957,362
B.14 Interests in partnerships 0
B.15 Government and corporate bonds 0
B.16 Accounts receivable
Hawaiian Telcom Services Company 3,775,001
Hawaiian Telcom Inc. 137,810,083
B.17 Alimony 0
B.18 Other liquidated debts 0
B.19 Equitable or future interests 0
B.20 Other contingent & unliquidated claims 0
B.21 Intellectual property 0
B.22 Patents Unknown
B.23 Licenses, franchises, and intangibles 0
B.24 Customer lists 0
B.25 Vehicles 0
B.26 Boats 0
B.27 Aircraft and accessories 0
B.28 Office equipment, furnishings and supplies 0
B.29 Machinery 0
B.30 Inventory 0
B.31 Animals 0
B.32 Crops 0
B.33 Farming equipment 0
B.34 Farm supplies 0
B.35 Other personal property 0
TOTAL SCHEDULED ASSETS $1,604,513,005
========================================================
C. Property Claimed as Exempt $0
D. Secured Claim
Goldman Sachs Bank USA 7,218,246
JP Morgan Chase Bank NA 7,218,246
Lehman Commercial Paper Inc. 89,800,000
Lehman Commercial Paper Inc. 484,700,000
E. Unsecured Priority Claims 0
F. Unsecured Non-priority Claims
Deutsche Bank National Trust Company 160,937,500
Hawaiian Telcom Inc. 154,984,935
Hawaiian Telcom Services Company Inc 290,618,526
JPMorgan Chase Bank NA 100,000
US Bank NA 157,601,750
US Bank NA 211,375,000
TOTAL SCHEDULED LIABILITIES $1,564,554,204
========================================================
HAWAIIAN TELCOM: HawTel Unit Files Statement of Financial Affairs
-----------------------------------------------------------------
Robert F. Reich, Hawaiian Telcom Inc.'s senior vice president,
chief financial officer, and treasurer, disclosed that Hawaiian
Telcom Communications, Inc., generated interest income during the
two years immediately preceding the Petition Date:
Source Period Amount
------ ------ ----------
Interest Year 2006 $0
Year 2007 $1,348,017
Jan. to Nov. 2008 $914,416
Mr. Reich notes that the Company paid $8,638,480 to its
creditors, within 90 days before the Petition Date:
Creditor Amount Paid
-------- -----------
Lehman Commercial Paper Inc $6,925,563
Goldman Sachs Capital Markets 856,440
JP Morgan Chase Bank 856,471
The Company did not make payments to any insider as well as on
account of consumer debts within the same period.
Mr. Reich supervises the Company's books of account and records
as of March 2008. The Company's records have been audited by
Deloitte & Touche LLP, within two years immediately preceding the
Petition Date.
These shareholders, officers and directors directly or indirectly
owns, controls, or holds 5% or more of the voting or equity
securities of the Company:
Name Title
---- -----
Hawaiian Telecom Shareholder (100%)
Communications, Inc.
Eric K. Yeaman Director, President, CEO
Kevin J. Nystrom Chief operating officer
Robert F. Reich Senior VP, CFO, Treasurer
Rose M. Hauser Senior VP, Chief Information Officer
John T. Komeiji Senior VP and general counsel
Craig T. Inouye Senior VP Sales
Geoffrey W.C. Loui Senior VP Strategy and marketing
Michael F. Edl Senior VP Network services
John K. Duncan VP and Controller
Francis K. Mukai VP, Associate Gen. Counsel, Secretary
William G. Chung VP Human Resources & Labor Relations
Walter A. Dods Jr. Director, chairman
James A. Attwood Jr. Director, vice chairman
Stephen C. Gray Director, vice chairman
Alan M. Oshima Director
Matthew P. Boyer Director
William E. Kennard Director
Raymond A. Ranelli Director
The Company's parent corporation, Hawaiian Telcom Holdco, Inc.,
holds taxpayer-identification number 84-1659868, for taxpayer
purposes within six years immediately prior to its bankruptcy
filing.
HAWAIIAN TELCOM: Government Wants Access to Financial Reports
-------------------------------------------------------------
The State of Hawaii, on behalf of the Public Utilities Commission,
the Department of Commerce and Consumer Affairs, Consumer Advocate
and the Department of the Attorney General, tells the U.S.
Bankruptcy Court for the District of Hawaii that they should be
granted full and complete access to the schedules and statements
filed by Hawaiian Telcom Communications and its affiliates,
portions of which are sought to be filed under seal.
The Hawaii state agencies maintain that they have the right to
access any information that the Debtors will file with the Court,
whether or not the information was filed under seal. The Hawaii
state agencies propose that this provision be included in any
order approving the Motion:
"1. The Motion is granted, except that all of the documents
so filed shall be provided in full, to the (1) Office of
the United States Trustee, (2) the professionals engaged
by the Official Unsecured Creditors' Committee, (3) the
State of Hawaii, Public Utilities Commission, (4) the
State of Hawaii Consumer Advocate, and (5) the State of
Hawaii, Department of the Attorney General."
The Debtors sought permission to file under seal certain portions
of their schedules of assets and liabilities identifying Customer
Contracts, Technology Contracts and Non-Disclosure Agreements.
The Debtors explained that in the ordinary course of business,
they take measures to keep the existence and the subject matter of
certain contracts confidential. The Confidential Contracts
include:
(1) Customer Contracts, which include contracts with
residential contracts, business customers and government
agencies. The existence of Customer Contracts is highly
sensitive commercial information as these contracts
comprise the Debtors' entire customer lists.
(2) Technology Contracts, which include agreements under which
the Debtors obtain from or provide to counterparties rights
in specialized software, patents and other technology.
(3) Non-Disclosure Agreements, which include agreements under
which the Debtors and counterparties have agreed to not
disclose confidential information.
Nicholas C. Dreher, Esq., at Cades Schutte LLP, in Honolulu,
Hawaii, the Debtors' proposed counsel, said disclosure of the
existence of the Confidential Contracts could put the Debtors
at a severe competitive disadvantage and diminish the value of
the Debtors' estates. Moreover, he said, disclosure of certain
contracts would be in breach of those contracts and with respect
to certain government contracts, would even raise security
concerns.
The Debtors also intend to file under seal affidavits and
certificates of services identifying the subject Confidential
Contracts.
The Debtors will make the Confidential Information available to
the Office of the U.S. Trustee for the District of Hawaii, the
professionals of the Official Committee of Unsecured Creditors
and the professionals for the steering committee of secured
lenders.
About Hawaiian Telecom
Based in Honolulu, Hawaii, Hawaiian Telecom Communications, Inc.
-- http://www.hawaiiantel.com/-- operates a telecommunications
company, which offers an array of telecommunications products and
services including local and long distance service, high-speed
Internet, wireless services, and print directory and Internet
directory services.
The company and seven of its affiliates filed for Chapter 11
protection on Dec. 1, 2008 (Bankr. D. Del. Lead Case No.
08-13086). As reported by the Troubled Company Reporter on
December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court
for the District of Delaware approved the transfer of the Chapter
11 cases to the U.S. Bankruptcy Court for the District of Hawaii
before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005).
Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J.
Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in
their restructuring efforts. The Debtors proposed Lazard Freres &
Co. LLC as investment banker; Zolfo Cooper Management LLC as
business advisor; Deloitte & Touche LLP as independent auditors;
and Kurztman Carson Consultants LLC as notice and claims agent.
An official committee of unsecured creditors has been appointed in
the case. The committee is represented by Christopher J. Muzzi,
Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu,
Hawaii.
When the Debtors filed for protection from their creditors, they
listed total assets of $1,352,000,000 and total debts of
$1,269,000,000 as of Sept. 30, 2008.
Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
undertaken by Hawaiian Telcom Communications, Inc. and seven of
its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
HSBC: Knight Vinke Wants Unit to File for Bankruptcy
----------------------------------------------------
Helen Power and Lilly Peel at Times Online reports that investor
Knight Vinke proposed that HSBC put its Household unit, under
bankruptcy to avoid an expensive rights issue or government
bailout.
According to Times Online, HSBC dismissed the proposal, but will
consider making a cash call in the coming months. The report says
that some analysts HSBC could ask for GBP13.5billion from
shareholders.
Citing Knight Vinke, Times Online states that HSBC should refuse
to pay the bondholders that fund Household's business, which would
save the bank an estimated $35 billion. Times Online quoted
Knight Vinke's CEO Eric Knight as saying, "Why should HSBC's
shareholders take all the pain when these [Household] bondholders
are unsecured?"
Times Online relates that HSBC said that the proposal was
unrealistic, as it would hinder the bank's ability to raise money
from American bondholders. According to the report, a source
said, "If HSBC did this they would be counting themselves out of
any future big U.S. bond issue. And they would probably have
their US banking license revoked."
If HSBC needed capital it would ask investors through a rights
issue to help to provide a cushion to get through the credit
crunch, Times Online reports, citing sources. Morgan Stanley and
Goldman Sachs, according to Times Online, said that they believe
HSBC would have to raise up to $20 billion.
HSBC might have to launch a deeply discounted rights issue that
could lead the bank's share price to drop to GBP400, Times Online
reports, citing Mr. Knight. Times Online relates that HSBC shares
ended at GBP535 on Friday.
HSBC Finance Corporation is a financial services company and a
member of the HSBC Group. It is the sixth-largest issuer of
MasterCard and Visa credit cards in the United States. HSBC
Finance Corporation was formed from the legal entity that had been
known as Household International, and is now is expanding its
consumer finance model via the HSBC Group to Brazil, India,
Argentina and elsewhere.
HSBC Finance Corporation's subsidiaries primarily provide middle-
market consumers real estate secured loans, auto finance loans,
MasterCard and Visa credit card loans, private label credit cards,
personal non-credit card loans and specialty insurance products.
INEOS GROUP: May Tumble Into Bankruptcy, Bloomberg Says
-------------------------------------------------------
Ineos Group Holdings, Georgia Gulf Corp. and Chemtura Corp. are
crashing on a mountain of takeover debt and may follow Lyondell
Chemical Co. into bankruptcy, trading in their bonds shows,
Bloomberg news says.
LyondellBasell, which in 2008 was still in the first year of being
a combined enterprise of Lyondell Chemical and Basell to create
the world's third-largest independent chemical company, sent its
U.S. units to Chapter 11 bankruptcy on Jan. 6 due to its declining
liquidity. Lyondell found itself seriously challenged by volatile
commodity markets and prices, changing consumer demand for oil
products and plastics, the deterioration of the credit markets,
and the substantial retrenchment of some of its largest direct and
indirect customers, including those in the automotive and
construction industries. According to Reuters, while
LyondellBasell had no near-term debt maturities it had "little
room for maneuver," with the scale of its debt and illiquid credit
markets. In the bankruptcy petition, Lyondell Chemicals estimated
that consolidated assets total $27.12 billion and debts total
$19.34 billion as of the petition date.
As to Ineos, Georgia Gulf and Chemtura, Bloomberg said the
combination of $11.7 billion in debt, frozen credit markets and
the global recession are forcing the companies to negotiate with
creditors to loosen terms of their loans. A glut in supplies that
drove prices of polypropylene down by half since October will make
it even harder for plastics makers to meet debt payments, just as
manufacturers in the Middle East add millions of tons of new
supplies.
"The most leveraged names are the first ones that are going
to run into problems," said Andrew Brady, a New York-based
analyst at CreditSights Inc., according to Bloomberg. "The market
knows they are struggling, and there is a huge risk of
bankruptcy."
Chemtura had disclosed $3.88 billion in assets and about $2.46
billion in debts as of Sept. 30, 2008. As of September 30, 2008,
total debt was 2.7 times adjusted earnings before interest, taxes,
depreciation and amortization. In February 2008, the company
repurchased $30 million of its then outstanding $400 million 7%
Notes Due 2009. The Notes mature in July 2009.
Georgia Gulf disclosed $2 billion in assets and debts of $1.89
billion as of Sept. 30, 2008. Georgia Gulf said that at Sept. 30,
2008 under its revolving credit facility, it had a maximum
borrowing capacity of $375.0 million with $6.5 million through
Lehman Commercial Paper Inc., a subsidiary of Lehman Brothers,
Inc. that is unavailable due to their current bankruptcy filing.
Net of outstanding letters of credit of $83.1 million and current
borrowings of $125.8 million, it had remaining availability of
$159.6 million.
Ineos' net debt was about EUR7.29 billion (US$9.67 billion) as of
Sept. 30, or 4.3 times EBITDA, Chief Financial Officer John Reece
said in a Jan. 15 interview, according to Bloomberg.
"That level of leverage is quite modest," Mr. Reece said. "Prior
to the credit crunch, four times leverage was considered
pretty conservative."
About INEOS Group
INEOS Group is a diversified chemical company consisting of
several businesses. Product lines include ethylene oxide-based
specialty and intermediate chemicals, fluorochemicals used as
refrigerants and propellants, and phenol and acetate products.
INEOS Chlor makes chlor-alkali chemicals, and INEOS Films and
Compounds manufactures PVC and PET films. INEOS Group was formed
in 1998 after a management buyout led by CEO Jim Ratcliffe, who
controls the group. Ratcliffe has placed INEOS among the world's
top chemical companies (with ExxonMobil, Dow, and BASF) through
his many and varied acquisitions.
IRVINE SENSORS: Faces Delisting; Auditor Has Going Concern Doubt
----------------------------------------------------------------
Irvine Sensors Corporation (IRSN) received a written notice from
The Nasdaq Stock Market on January 14, 2009 indicating that the
Company fails to comply with the minimum stockholders' equity,
market value and net income from continuing operations
requirements for continued listing set forth in Nasdaq Marketplace
Rule 4310(c)(3) because the Company's stockholders' equity is
below the Nasdaq minimum stockholders' equity listing requirement
of $2,500,000, the market value of the Company's listed securities
is below the Nasdaq minimum market value listing requirement of
$35,000,000 and the Company's net income from continuing
operations is below the Nasdaq minimum listing requirement of
$500,000 for the most recently completed fiscal year or two of the
three most recently completed fiscal years.
Separately from the Nasdaq notice, Irvine Sensors' independent
registered public accounting firm, Grant Thornton LLP, has
included an explanatory paragraph in their audit opinion for the
fiscal year ended September 28, 2008, and included in the
Company's Annual Report on Form 10-K filed on January 12, 2009,
that expresses doubt about the Company's ability to continue as a
going concern based on its current financial resources, among
other factors. Irvine Sensors acknowledges it needs to raise
additional capital this year.
The Company has until January 29, 2009 to provide Nasdaq with a
specific plan to achieve and sustain compliance with the Nasdaq
Capital Market listing requirements, including the time frame for
completion of such plan. The Company is preparing its plan for
submittal to Nasdaq by the specified date. If the Nasdaq Staff
determines that the Company's plan does not adequately address the
issues noted above, the Nasdaq Staff will provide written notice
that the Company's securities will be delisted. At that time, the
Company may appeal the Nasdaq Staff's determination to delist its
securities to a Nasdaq Listing Qualifications Panel.
Irvine Sensors Corporation -- http:www.irvine-sensors.com --
headquartered in Costa Mesa, California, is a vision systems
company engaged in the development and sale of miniaturized
infrared and electro-optical cameras, image processors and stacked
chip assemblies and research and development related to high
density electronics, miniaturized sensors, optical interconnection
technology, high speed network security, image processing and low-
power analog and mixed-signal integrated circuits for diverse
systems applications.
IVOICE INC: Posts $284,945 Net Loss in Quarter Ended September 30
-----------------------------------------------------------------
iVoice Inc. disclosed total net loss for the three months ended
Sept. 30, 2008, of $284,945 compared with a net loss of $975,582
for the same period in the previous year. iVoice disclosed the
results in a filing with the Securities and Exchange Commission.
Net income from continuing operations for the nine months ending
Sept. 30, 2008, was $509,265. The net loss from continuing
operations for the nine months ending Sept. 30, 2007, was
$1,114,419. The increase in net income of $1,623,684 was due to
the increased gain on revaluation of derivatives, on the repayment
of the underlying debt, and the reduced amortization of the
discount on debt offset by lower sales, increased operating
expenses and increased interest expenses, as the result of those
factors.
Net loss from discontinued operations for the nine months ended
Sept. 30, 2007, was $753,238. This operation had been
experiencing reduced product sales and had curtailed spending to
better manage their available resources.
As required by APB Opinion No. 18, the company is required to
record minority shareholders' interest in net income of iVoice
Technology. For the nine months ended Sept. 30, 2008, iVoice
Technology reported a net loss of $145,759 and as such, the
company recorded no minority shareholders' interest for the
period.
The company had cash and cash equivalents at Sept. 30, 2008, of
$3,213,452 compared with $79,919 at Dec. 31, 2007.
The company's balance sheet at Sept. 30, 2008, showed total assets
of $11,262,581, total liabilities of $9,529,936 and stockholders'
equity of $1,732,645.
A full-text copy of the 10-Q filing is available for free at:
http://ResearchArchives.com/t/s?3850
Going Concern Doubt
The company has incurred substantial accumulated deficits, has an
obligation to deliver an indeterminable amount of common stock due
on derivative liabilities and has completed the process of
spinning out the five operating subsidiaries. These issues raise
substantial doubt about the company's ability to continue as
a going concern. Therefore, recoverability of a major portion of
the recorded asset amounts shown in the accompanying balance
sheets is dependent upon continued operations of the company,
which in turn, is dependent upon the company's ability to raise
capital and generate positive cash flow from operations.
About iVoice Inc.
Based in Matawan, New Jersey, iVoice Inc. (OTC BB: IVOI) --
http://www.ivoice.com/-- does not have significant operations.
It intends to merge with an operating entity. Previously, the
company developed and marketed over the counter non-prescription
healthcare products.
The company has formed or acquired a variety of subsidiaries which
have then been spun off to shareholders via special dividends;
spin offs have included Trey Resources, iVoice Technology, Deep
Field Technology, and SpeechSwitch. iVoice's long term plan,
however, revolves around development and licensing of proprietary
speech enabled technologies and applications that it holds patents
for.
LAGARDE INC: Dydacomp Acquires Co. for $2.78 Million
----------------------------------------------------
Kansas City Business Journal reports that Dydacomp said that it
had completed its purchase of LaGarde Inc. for an estimated
$2.78 million.
Kansas City Business relates that LaGarde's sale price could
change as the deal consists of:
-- a $300,000 upfront cash payment,
-- a yearlong earnout based on revenue from the company's
StoreFront.net assets, and
-- a yearlong 50% commission of the license fees from the
sale of Dydacomp software to LaGarde customers.
According to Kansas City Business, LaGarde will continue operating
locally.
Dydacomp CEO John Healy said in a statement, "Dydacomp's core
purpose is to make conducting and growing commerce easier for our
clients. This acquisition allows us to extend the reach of that
mission to StoreFront.net's user base, giving them access to the
extensive resources that we have to offer as a market leader."
Overland Park-based LaGarde Inc. filed for Chapter 11 bankruptcy
protection on Nov. 7, 2008. LaGarde owes more than $1.1 million
to its 20 largest unsecured creditors and $2 million to Square 1
Bank. LaGarde listed $3.72 million in liabilities and
$20.4 million in assets. LaGarde's assets include separate
$10 million claims against Greensoft Solutions Inc. for "tortious
interference," business disparagement, and breach of contract, and
against Whelan for breach of fiduciary duty, Kansas City Business
Journal states.
LEHMAN BROTHERS: Ex-Federal Prosecutor A. Valukas Named Examiner
----------------------------------------------------------------
Former federal prosecutor Anton Valukas of the firm Jenner & Block
LLP has been selected by Diana J. Adams, the United States Trustee
for Region 2, to lead an independent investigation of the events
leading to Lehman Brothers Holdings Inc.'s collapse and the claims
creditors owed more than $613 billion may pursue.
The U.S. Trustee named an examiner at the direction of the U.S.
Bankruptcy Court for the Southern District of New York. The Court
has approved the U.S. Trustee's selection.
The Walt Disney Company in October 2008 filed a request for an
appointment of an examiner who will, among other things,
investigate pre-bankruptcy transactions between Lehman Brothers
Holdings Inc., and its affiliates. After negotiations, Lehman
Brothers reached an agreement with Walt Disney regarding an
examiner's appointment and the scope of the trustee's
investigation.
Alvarez & Marsal, which oversees Lehman's wind-down proceedings,
slammed New York State Comptroller Thomas DiNapoli's call for the
replacement of Lehman Brothers Holdings' board of directors and
Richard Fuld Jr., chairman and former chief executive officer, by
a trustee. Alvarez & Marsal said that, contrary to the
Comptroller's accusations, Lehman was a victim of a financial
tsunami that was beyond its control and that Lehman executives
took appropriate action to strengthen Lehman's financial
conditions before its bankruptcy filing in Sept. 2008.
"The Lehman case needs sunshine from an independent and
learned voice," said Martin Bienenstock, counsel to Walt Disney,
Bloomberg News reported. "We are thrilled the U.S. Trustee moved
so quickly and proposed a great lawyer from a great firm to serve
as examiner."
Mr. Valukas is the chairman of the Illinois-based Jenner & Block
LLP and a partner in Jenner & Block's litigation department.
"Throughout my legal career of over 40 years, I have led numerous
investigations of Fortune 500 companies and large international
corporations involving potential financial misconduct, accounting
irregularities, ethical issues, and alleged corporate fraud." He
also held several positions with the United States Department of
Justice, including United States Attorney for the Northern
District of Illinois (1985-1989), First Assistant United States
Attorney (1975-1976), Chief of Special Prosecutions Division
(1974), and Assistant United States
Attorney (1970-1974).
Judge James Peck said that an examiner will instill "confidence
and trust" among those involved in Lehman's bankruptcy case.
He rules that the Examiner's duties will include an investigation
as to:
(1) Whether Lehman Brothers Commercial Corporation or any
other entity that currently is an LBHI Chapter 11 debtor
subsidiary or affiliate has any administrative claims
against LBHI resulting from LBHI's cash sweeps of cash
balances, if any, from September 15, 2008, through the
date that that LBHI affiliate commenced its Chapter 11
case.
(2) All voluntary and involuntary transfers to, and
transactions with, affiliates, insiders and creditors of
LBCC or its affiliates, in respect of foreign exchange
transactions and other assets that were in the possession
or control of LBHI Affiliates at any time commencing on
September 15, 2008, through the day that each LBHI
Affiliate commenced its Chapter 11 case.
(3) Whether any LBHI Affiliate has colorable claims against
LBHI for potentially insider preferences arising under the
Bankruptcy Code or state law.
(4) Whether any LBHI Affiliate has colorable claims against
LBHI or any other entities for potentially voidable
transfers or incurrences of debt, under the Bankruptcy
Code or otherwise applicable law.
(5) Whether there are more colorable claims for breach of
fiduciary duties and aiding or abetting any breaches
against the officers and directors of LBCC and other
Debtors arising in connection with the financial condition
of the Lehman enterprise prior to LBHI's Petition Date.
(6) Whether assets of any LBHI Affiliates, other than Lehman
Brothers, Inc., were transferred to Barclays Capital Inc.
as a result of the sale to Barclays Capital Inc. that was
approved by a Court order, and whether consequences to
any LBHI Affiliate as a result of the consummation of the
transaction created colorable causes of action that inure
to the benefit of the creditors of that LBHI subsidiary or
affiliate.
(7) The inter-company accounts and transfers among LBHI and
its direct and indirect subsidiaries, including but not
limited to LBI, LBIE, Lehman Brothers Special Finance and
LBCC, during the 30-day period preceding the commencement
of the Chapter 11 cases by each debtor on September 15,
2008, or thereafter as the Examiner deems relevant to the
Investigation.
(8) The transactions and transfers, including but not limited
to the pledging or granting of collateral security
interest among the debtors and the prepetition lenders and
financial participants including but not limited to,
JPMorgan Chase, Citigroup, Inc., Bank of America, the
Federal Reserve Bank of New York and others.
(9) The transfer of the capital stock of certain subsidiaries
of LBI on or about September 19, 2008, to Lehman ALI Inc.
(10) The events that occurred from September 4, 2008, through
September 15, 2008 or prior thereto that may have resulted
in commencement of the LBHI chapter 11 case.
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.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc. and its various
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
LYONDELL CHEMICAL: 3 Other Chemical Makers May Also Fall
--------------------------------------------------------
Ineos Group Holdings, Georgia Gulf Corp. and Chemtura Corp. are
crashing on a mountain of takeover debt and may follow Lyondell
Chemical Co. into bankruptcy, trading in their bonds shows,
Bloomberg news says.
LyondellBasell, which in 2008 was still in the first year of being
a combined enterprise of Lyondell Chemical and Basell to create
the world's third-largest independent chemical company, sent its
U.S. units to Chapter 11 bankruptcy on Jan. 6 due to its declining
liquidity. Lyondell found itself seriously challenged by volatile
commodity markets and prices, changing consumer demand for oil
products and plastics, the deterioration of the credit markets,
and the substantial retrenchment of some of its largest direct and
indirect customers, including those in the automotive and
construction industries. According to Reuters, while
LyondellBasell had no near-term debt maturities it had "little
room for maneuver," with the scale of its debt and illiquid credit
markets. In the bankruptcy petition, Lyondell Chemicals estimated
that consolidated assets total $27.12 billion and debts total
$19.34 billion as of the petition date.
As to Ineos, Georgia Gulf and Chemtura, Bloomberg said the
combination of $11.7 billion in debt, frozen credit markets and
the global recession are forcing the companies to negotiate with
creditors to loosen terms of their loans. A glut in supplies that
drove prices of polypropylene down by half since October will make
it even harder for plastics makers to meet debt payments, just as
manufacturers in the Middle East add millions of tons of new
supplies.
"The most leveraged names are the first ones that are going
to run into problems," said Andrew Brady, a New York-based
analyst at CreditSights Inc., according to Bloomberg. "The market
knows they are struggling, and there is a huge risk of
bankruptcy."
Chemtura had disclosed $3.88 billion in assets and about $2.46
billion in debts as of Sept. 30, 2008. As of September 30, 2008,
total debt was 2.7 times adjusted earnings before interest, taxes,
depreciation and amortization. In February 2008, the company
repurchased $30 million of its then outstanding $400 million 7%
Notes Due 2009. The Notes mature in July 2009.
Georgia Gulf disclosed $2 billion in assets and debts of $1.89
billion as of Sept. 30, 2008. Georgia Gulf said that at Sept. 30,
2008 under its revolving credit facility, it had a maximum
borrowing capacity of $375.0 million with $6.5 million through
Lehman Commercial Paper Inc., a subsidiary of Lehman Brothers,
Inc. that is unavailable due to their current bankruptcy filing.
Net of outstanding letters of credit of $83.1 million and current
borrowings of $125.8 million, it had remaining availability of
$159.6 million.
Ineos' net debt was about EUR7.29 billion (US$9.67 billion) as of
Sept. 30, or 4.3 times EBITDA, Chief Financial Officer John Reece
said in a Jan. 15 interview, according to Bloomberg.
"That level of leverage is quite modest," Mr. Reece said. "Prior
to the credit crunch, four times leverage was considered
pretty conservative."
About LyondellBasell
Basell AF and Lyondell Chemical Company merged operations in 2007
to form LyondellBasell Industries --
http://www.lyondellbasell.com/-- the world's third largest
independent chemical company. Lyondellbasell produces
polypropylene and advanced polyolefins products, is a leading
supplier of polyethylene, and a global leader in the development
and licensing of polypropylene and polyethylene processes and
related catalyst sales.
LyondellBasell became saddled with debt as part of the
$12.7 billion merger. About a year after completing the merger,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code on January 6, 2009, to facilitate a restructuring
of the company's debts. The case is In re Lyondell Chemical
Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023).
Seventy-nine Lyondell entities, including Equistar Chemicals, LP,
Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt
Industries, Inc., filed for Chapter 11. LyondellBasell is not
part of the bankruptcy filing. LyondellBasell's non-U.S.
operating entities are also not included in the Chapter 11 filing.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities.
Lyondell Chemicals estimated that consolidated assets total
$27.12 billion and debts total $19.34 billion as of the bankruptcy
filing date. (Lyondell Bankruptcy News; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
LYONDELL CHEMICAL: Schedules Filing Deadline Moved to February 20
-----------------------------------------------------------------
At the behest of Lyondell Chemical Company and its affiliates, the
U.S. Bankruptcy Court for the Southern District of New York
extended for another 30 days the Debtors' January 21, 2009
deadline to file schedules of assets and liabilities, and
statement of financial affairs.
Given the size and complexity of their businesses, the Debtors
explained to the Court that they have a significant amount of
information to accumulate to prepare their schedules of assets and
liabilities and statements of financial affairs. The Debtors will
have to prepare the Schedules and Statements for no fewer than 79
entities with operations and creditors located throughout the
world.
The Debtors' proposed counsel, Deryck A. Palmer, Esq., at
Cadwalader, Wickersham & Taft LLP, in New York, asserts that
while the Debtors are mobilizing their professionals in the
preparation of the Schedules and Statements, resources are
strained and the Debtors did not have ample time to gather and
analyze the information necessary in preparing their Schedules
and Statements prior to the Petition Date. Moreover, the
Debtors' primary focus thus far has been preparing for the filing
of their Chapter 11 cases, he says.
Mr. Palmer stresses that taking into account the amount of work
entailed in completing the Schedules and Statements and the
competing demands upon the Debtors' employees and professionals
to assist in efforts to stabilize the Debtors' businesses, the
Debtors likely will not be able to complete the Schedules and
Statements properly and accurately within the required 15-day
time period provided for under Rule 1007(c) of the Federal Rules
of Bankruptcy Procedure, and Section 521 of the Bankruptcy Code.
Mr. Palmer further says converting the Debtors' data into the
required matrix format would be unduly burdensome and would
increase the risk of error with respect to the transfer of those
information from the computer systems maintained by the Debtors
or their agents.
If the Debtors' application to retain a claims agent is approved,
the Claims Agent will, among others, assist with compiling a
creditor database from the Debtors' computer records and complete
mailing of notices to the creditors. The Debtors, with the help
of the Claims Agent, anticipate to have completed a consolidated
creditors' list within 30 days. The Debtors add that since the
Claims Agent will receive an electronic list of creditors, filing
a separate list of all creditors would serve no purpose. Thus,
the Debtors also seek the Court's authority to waive the
requirement under Rule 1007(a)(1) to file a list of the Debtors'
creditors.
The Debtors further ask the Court to approve, and direct
the Claims Agent to serve, a notice disclosing the Debtors'
Chapter 11 filing so that entities will receive the notice no
later than five days after the Debtors' receipt of the time and
date of the creditors' meeting pursuant to Section 341 of the
Bankruptcy Code.
About LyondellBasell
Basell AF and Lyondell Chemical Company merged operations
in 2007 to form LyondellBasell Industries --
http://www.lyondellbasell.com/-- the world's third largest
independent chemical company. Lyondellbasell produces
polypropylene and advanced polyolefins products, is a leading
supplier of polyethylene, and a global leader in the development
and licensing of polypropylene and polyethylene processes and
related catalyst sales.
LyondellBasell became saddled with debt as part of the
$12.7 billion merger. About a year after completing the merger,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code on January 6, 2009, to facilitate a restructuring
of the company's debts. The case is In re Lyondell Chemical
Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023).
Seventy-nine Lyondell entities, including Equistar Chemicals, LP,
Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt
Industries, Inc., filed for Chapter 11. LyondellBasell is not
part of the bankruptcy filing. LyondellBasell's non-U.S.
operating entities are also not included in the Chapter 11 filing.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities.
Lyondell Chemicals estimated that consolidated assets total
$27.12 billion and debts total $19.34 billion as of the bankruptcy
filing date.
Bankruptcy Creditors' Service, Inc., publishes Lyondell
Bankruptcy News. The newsletter provides gavel-to-gavel
coverage of the chapter 11 proceedings commenced by 79 U.S. and
European affiliates of LyondellBasell Industries, including
Equistar Chemicals, LP, and Lyondell Chemical Company.
(http://bankrupt.com/newsstand/or 215/945-7000)
MARKETING WORLDWIDE: Auditor Raises Going Concern Doubt
-------------------------------------------------------
RBSM LLP, in New York, in a letter dated January 13, 2009, to the
Board of Directors of Marketing Worldwide Corporation expressed
substantial doubt about the company's ability to continue as a
going concern. The firm audited the consolidated balance sheets
of Marketing Worldwide Corporation and its wholly owned
subsidiaries as of September 30, 2008 and 2007 and the related
consolidated statements of operations, deficiency in stockholders'
equity and cash flows for each of the two years in the period
ended September 30, 2008.
RBSM pointed out that the company has a generated negative cash
outflows from operating activities, experienced recurring net
operating losses, is in default of certain covenants under its
senior credit facility, and is dependent on securing additional
equity and debt financing to support its business efforts. "These
factors raise substantial doubt about the company's ability to
continue as a going concern."
"During the years ended September 30, 2008 and 2007, the company
incurred a loss of $2,590,188 and $6,922,646. The company's
existence is dependent upon management's ability to develop
profitable operations. In addition, at September 30, 2008, the
company was in default on its line of credit agreement with its
primary secured lender. Management is devoting substantially all
of its efforts to developing new markets for its products in the
United States and Europe and reducing costs of operations, but
there can be no assurance that the company's efforts will be
successful. In order to improve the company's liquidity, the
company's management is actively pursuing additional equity
financing through discussions with lenders, investment bankers and
private investors. There can be no assurance the company will be
successful in its effort to secure additional debt or equity
financing," Michael Winzkowski, chief executive officer, disclosed
in a regulatory filing dated January 13, 2009.
As of September 30, 2008, the company's balance sheet showed total
assets of $7,660,347, total liabilities of $4,061,166, interest in
non-controlling entity of $134,298, Series A convertible preferred
stock, $0.001 par value, of $3,499,950, and total stockholders'
deficiency of $35,067.
A full-text copy of the company's annual report is available for
free at: http://researcharchives.com/t/s?3842
About Marketing Worldwide
Headquartered in Howell, Michigan, Marketing Worldwide Corporation
operates in a niche of the supply chain for new passenger motor
vehicles in the United States, Canada and Europe. It is a designer
and manufacturer of accessories for the customization of cars,
sport utility vehicles and light trucks. The company provides
design services and delivers its products to large global
automobile manufacturers and its Vehicle Processing Centers in the
US, Canada, Mexico and Europe.
MERCURY COMPANIES: Plan Filing Period Extended to February 23
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Colorado extended
Mercury Companies, Inc.'s exclusive periods to file a
plan and solicit acceptances of said plan to Feb. 23, 2009, and
April 24, 2009, respectively.
As reported in the Troubled Company Reporter on Jan. 5, 2009,
Mercury 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 told the Court that the delay in forming the Creditors'
Committee limited its ability to work with its creditors to
formulate a plan. In addition, Mercury related 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 added 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.
MERCURY COMPANIES: May Sell Share in Title Plant to Metro Title
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Colorado approved
the request of Mercury Companies, Inc., and Arizona Title Agency,
Inc. (AZTA) for the sale of AZTA's share of common stock of Title
Plant Corporation and related personal property, free and clear of
any and all liens, claims, and encumbrances, to Metro Title Agency
of AZ, LLC, for the purchase price of $300,000.
Mercury Companies, Inc. and AZTA told the Court that the offer of
Metro Title Agency was the only offer received by them and that
the sale will generate significant proceeds for AZTA's bankruptcy
estate.
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: Taps Manatt Phelps as Special Counsel
--------------------------------------------------------
Mercury Companies, Inc., and subsidiaries Financial Title Company,
Lender's First Choice Agency, Inc., and Lenders Choice Title
Company ask the U.S. Bankruptcy Court for the District of Colorado
for authority to employ Manatt, Phelps & Phillips, LLP as the
Debtors' special litigation counsel, nunc pro tunc to
Jan. 14, 2009.
As the Debtors' special litigation counsel, Manatt Phelps will
defend the Debtors in an action pending in the Superior Court of
the State of California, County of Alameda, entitled State Labor
Commissioner, Division of Labor Standards Enforcement, Department
of Industrial Relations, State of California v. Alliance Title
Company, Inc., Mercury Companies, Inc., Financial Title Company,
Lenders Choice Title Co., Lender's First Choice Agency, Inc., and
Jerrold Hauptman, Case No. RG 08369762 (the Action).
In the Action, the California Labor Commissioner is seeking
approximately $20 million in damages from the Debtors for alleged
unpaid wages and statutory penalties.
Vikki L. Vander Woude, an attorney at Manatt Phelps, assures the
Court that the firm does not hold or represent any interest
advesrse to the Debtors or their estates as to the matters for
which Manatt Phelps has been retained to represent the Debtors.
Manatt Phelps' professionals currently bill:
Sharon Bauman, Esq. $595 per hour
Sandi King, Esq. $620 per hour
Vikki L. Vander Woude, Esq. $550 per hour
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.
MERRILL LYNCH: Former Board Members Criticize CEO on BofA Deal
--------------------------------------------------------------
Susanne Craig and Dan Fitzpatrick at The Wall Street Journal
report that some former members of Merrill Lynch & Co.'s board
have complained that CEO John Thain failed to fully inform them
that mounting losses at the bank threatened to derail the deal
with Bank of America until the federal government agreed to step
in.
Citing a person familiar with the matter, WSJ relates that Mr.
Thain was aware at a certain point in December that the deal could
be in trouble.
A source said that senior executives at BofA didn't learn of the
losses from Mr. Thain, but rather from the Merrill transition
team, WSJ states. Citing the source, the report says that BofA
senior executives sensed that Mr. Thain didn't appear to be fully
engaged in issues surrounding the deal just when the scope of
Merrill Lynch's losses was becoming apparent. According to the
report, the source said that Mr. Thain went on a vacation in the
middle of December and was pretty much out of touch after that.
Another source said that Mr. Thain was working and available while
in on vacation, the report states.
No board meeting was called to discuss the status of the deal, WSJ
relates.
Mr. Thain kept whatever information he had because he was worried
that developments might leak to the media and blow up the deal,
WSJ reports, citing a person familiar with the matter. Mr. Thain,
according to WSJ, has often complained that material information
at Merrill Lynch leaked to the news media.
The U.S. Treasury has agreed to invest $20 billion in Bank of
America from the Troubled Assets Relief Program in exchange for
preferred stock with an 8% dividend to the Treasury. Bank of
America will comply with enhanced executive compensation
restrictions and implement a mortgage loan modification program.
A summary of the funding terms is availabe at no charge at:
http://www.fdic.gov/news/news/press/2009/pr09004a.pdf
About Merrill Lynch
Merrill Lynch & Co. Inc. -- http://www.ml.com/-- is a wealth
management, capital markets and advisory companies with offices in
40 countries and territories. As an investment bank, it is a
leading global trader and underwriter of securities and
derivatives across a broad range of asset classes and serves as a
strategic advisor to corporations, governments, institutions and
individuals worldwide. Merrill Lynch owns approximately half of
BlackRock, one of the world's largest publicly traded investment
management companies with more than $1 trillion in assets under
management. Merrill Lynch's operations are organized into two
business segments: Global Markets and Investment Banking (GMI) and
Global Wealth Management (GWM). GMI provides service global
markets and origination products and services to corporate,
institutional, and government clients around the world. GWM
creates and distributes investment products and services for
individuals, small- and mid-size businesses, and employee benefit
plans.
As reported by the Troubled Company Reporter on September 15,
2008, Merrill has had tens of billions of dollars worth of risky,
illiquid assets carried on balance sheets that were leveraged at a
debt-to-equity ratio of more than 20 to one in the past 15 months.
The Wall Street Journal said that when the crisis started, the
assets kept deteriorating in value and couldn't easily be sold,
eating into the firm's capital cushion. Merrill's balance sheet
topped $900 billion recently, WSJ added. As reported by the TCR
on October 21, 2008, Merrill disclosed a
net loss from continuing operations for the third quarter of 2008
of $5.1 billion, compared with a net loss from continuing
operations of $2.4 billion for the third quarter of 2007.
Merrill's net loss for the third quarter of 2008 was
$5.2 billion, compared with a net loss of $2.2 billion, for the
year-ago quarter.
MITEK SYSTEMS: Auditor Raises Going Concern Doubt
-------------------------------------------------
Mayer Hoffman McCann P.C. in San Diego, California, in a letter
dated January 13, 2009, to the Board of Directors and Stockholders
Mitek Systems, Inc., expressed substantial doubt about the
company's ability to continue as a going concern.
The firm audited the balance sheet of Mitek Systems, Inc., as of
September 30, 2008 and 2007, and the related statements of
operations, stockholders' equity, and cash flows for the years
then ended.
Mayer Hoffman pointed out that the company has incurred recurring
operating losses and negative cash flows from operations. "These
conditions raise substantial doubt about the company's ability to
continue as a going concern."
The company incurred net losses of approximately $749,000 and
$384,000 for the years ended September 30, 2008 and 2007,
respectively, and has an accumulated deficit of approximately
$13.5 million as of September 30, 2008. Cash used for operations
increased from approximately $206,000 in 2007 to $399,000 in 2008.
Cash used in investing activities during the twelve months ended
September 30, 2008 was approximately $397,000, compared to
approximately $34,000 in the same period in fiscal 2007. The
company has a cash balance of approximately $1.3 million as of
September 30, 2008.
According to President and Chief Executive Officer James B.
DeBello, based on its current operating plan, the company's
existing working capital may not be sufficient to meet the cash
requirements to fund its planned operating expenses, capital
expenditures, and working capital requirements through
September 30, 2009, without additional sources of cash and the
deferral, reduction or elimination of significant planned
expenditures. The company may need to raise significant
additional funds to continue its operations. In the absence of
positive cash flows from operations, the company may be dependent
on its ability to secure additional funding through the issuance
of debt or equity instruments. If adequate funds are not
available, the company may be forced to significantly curtail its
operations or to obtain funds through entering into additional
collaborative agreements or other arrangements that may be on
unfavorable terms. "These factors raise substantial doubt about
the company's ability to continue as a going concern."
The company is taking expense reduction measures to conserve cash
and has retained an investment banking firm to explore strategic
alternatives.
On January 9, 2009, the company implemented a plan to decrease its
operating expenses by reducing its workforce in light of the
economic contraction of the financial services market into which
the company primarily sells its products. The staff reduction
included general and administrative, sales and marketing and
technical staff. The company has diligently maintained key
resources to adequately pursue new sales opportunities and support
its operations. The company's management does not believe that
these reductions will impair the company's ability to develop its
ImageNet Mobile Deposit application and other mobile capture
products, or to provide technical support to its current and
prospective customers.
As of September 30, 2008, the company's balance sheet showed total
assets of $2,781,381, total liabilities of $1,449,767 and total
stockholders' equity of $1,331,614.
A full-text copy of the company's annual report is available for
free at: http://researcharchives.com/t/s?384f
Resignations
On January 13, 2009, Tesfaye Hailemichael, chief financial
officer, vice president, treasurer and secretary of Mitek Systems,
Inc., tendered his resignation from all offices with the company
to pursue other interests, effective January 14, 2009. Mr.
Hailemichael's resignation was not the result of any disagreement
with the policies or practices of the company or related to any
accounting or financial disputes. The Board of Directors of the
company appointed James B. DeBello, the company's president and
chief executive officer, as acting chief financial officer and
secretary of the company to replace Mr. Hailemichael, effective
January 14, 2009. Mr. DeBello will also continue his current
responsibilities as President and Chief Executive Officer.
Mr. DeBello has been a director of the company since November
1994. He has been President and Chief Executive Officer of the
company since May 2003. Previously he was Chief Executive Officer
of AsiaCorp Communications, Inc., a wireless data infrastructure
and software company, from July 2001 to May 2003. He was Venture
Chief Executive Officer for IdeaEdge Ventures, Inc., a venture
capital company, from June 2000 to June 2001. From May 1999 to
May 2000 he was President, Chief Operating Officer and a member of
the Board of Directors of CollegeClub.com, an Internet company.
From November 1998 to April 1999 he was Chief Operating Officer of
WirelessKnowledge, Inc., a joint venture company formed between
Microsoft and Qualcomm, Inc. Before that, from November 1996 to
November 1998, Mr. DeBello held positions as Vice President,
Assistant General Manager and General Manager of Qualcomm, Inc.'s
Eudora Internet Software Division, and Vice President of Product
Management of Qualcomm, Inc.'s Subscriber Equipment Division. Mr.
DeBello holds a B.A., magna cum laude and MBA from Harvard
Business School and was a Rotary Scholar at the University of
Singapore where he studied economics and Chinese.
About Mitek Systems
Mitek Systems, Inc., is primarily engaged in the development and
sale of software solutions. During its most recent completed
fiscal year, its business was primarily focused on document image
processing and image analytics. The company's business also
focuses on intelligent character recognition and forms processing
technology, products and services used in the financial services
markets. The company also develops fraud detection and prevention
products, which find signatures on any document and, using
patented algorithms, convert them into compact numeric codes,
which are then compared against one or more reference codes of
trusted signatures for highly accurate signature verification.
Most recently, the company has been expanding its business focus
to include a software product that captures and reads data from
mobile devices using its proprietary technology. This software
product is called Mobile Capture. Mobile Capture technology
converts a camera-equipped mobile phone into a mobile scanner that
has the ability to read and extract data from any digital photo or
video image.
NEW ORLEANS PORTABLE: Files for Bankruptcy Protection
-----------------------------------------------------
WWLTV.com reports that New Orleans Portable Storage filed for
bankruptcy protection in the U.S. Bankruptcy Court for the Western
District of North Carolina on Jan. 13, 2009.
Eyewitness News relates that on Jan. 14, New Orleans Portable's
warehouse was locked and unattended, with hundreds of storage
crates in the parking lot. WWLTV.com states that most of the
storage crates were unlocked and empty and some of them marked
with customers' names.
Citing New Orleans Portable CEO Mike Lowe, Eyewitness News says
that containers containing any customer goods should be locked
inside the warehouse, while outside containers should be empty.
Mr. Lowe, according to WWLTV.com, said that going inside the
warehouse won't be possible, until the company's bankruptcy issue
can be settled.
Mr. Lowe said that New Orleans Portable is seeking for a new
owner, WWLTV.com reports.
According to WWLTV.com, Smartbox is collaborating with a court-
appointed lawyer in the bankruptcy case to get clients their
valuables.
New Orleans Portable Storage is a Harahan, Louisiana-based
franchise of the national company Smartbox owned by Charlie
Fonville. The franchise is independently owned and operated.
NEW YORK TIMES: Reaches Deal for $250MM Unsecured Loan from Slim
----------------------------------------------------------------
The New York Times Company said Jan. 19, 2009, that it had entered
into a private financing agreement with Banco Inbursa, S. A.,
Institucion de Banca Multiple, Grupo Financiero Inbursa and
Inmobiliaria Carso for an aggregate amount of $250 million
($125 million each) in senior unsecured notes due 2015 with
detachable warrants. The notes will rank equally and ratably on a
senior unsecured basis with all senior unsecured obligations of
The New York Times Company.
"This agreement provides us with increased financial flexibility
to continue to execute on our long-term strategy," said Janet L.
Robinson, president and CEO. "The proceeds from this transaction
will be used to refinance existing debt, including amounts
currently borrowed under a revolving credit facility that matures
in May 2009. We continue to explore other financing initiatives
and are focused on reducing our total debt through the cash we
generate from our businesses and the decisive steps we have taken
to reduce costs, lower capital spending, decrease our dividend and
rebalance our portfolio of assets."
"We are very pleased to expand our strong relationship with The
New York Times Company," said Arturo Elias, director of
Inmobiliaria Carso. "We believe that with the strength of The New
York Times brand, its national and international reach, its
potential for digital expansion and most of all, its world-class
news and information, the Company will continue to be a leader in
the media industry."
The notes have a coupon of 14.053%, of which the Company may elect
to pay 3% in kind. The notes are callable beginning three years
from the issue date at 105% of par, with subsequent call prices
declining ratably to par.
Banco Inbursa and Inmobiliaria Carso also received detachable
warrants for an aggregate amount of 15.9 million Class A shares
(50% each), at a strike price of $6.3572. The warrants expire in
January 2015.
Mr. Carlos Slim Helu and members of his family are the main
shareholders of Grupo Financiero Inbursa, S.A B. de C.V., which is
the parent company of Banco Inbursa, and are the owners of
Inmobiliaria Carso, which currently holds 6.9% of the Times
Company's Class A shares.
SunTrust Robinson Humphrey, Inc. was the sole placement agent for
this transaction, and Goldman Sachs advised the Company.
$250-Mil. Loan Provides Breathing Room
According to Bloomberg News, New York Times Co.'s $250 million
loan from Mexican billionaire Carlos Slim gives the Company more
time to sell assets and revive flagging advertising sales.
The extra time comes at a cost of as much as $35 million in annual
interest for the six-year debt, the report said, citing Barclays
Capital Research. Bloomberg said that puts an additional burden
on a company that has already cut jobs, reduced its dividend and
begun pursuing the sale of its stake in the Boston Red Sox and
other properties to raise cash.
"While it provides some breathing room, this investment
doesn't solve the longer-term issues facing the newspaper
industry," said Fitch Ratings analyst Mike Simonton in Chicago,
according to Bloomberg. "It will be even more challenging for the
company to generate positive free cash flow in 2009 with this new,
heavy interest burden."
About New York Times
The New York Times Company (NYSE: NYT), a leading media company
with 2007 revenues of $3.2 billion, includes The New York Times,
the International Herald Tribune, The Boston Globe, 16 other daily
newspapers, WQXR-FM and more than 50 Web sites, including
NYTimes.com, Boston.com and About.com. The Company's core purpose
is to enhance society by creating, collecting and distributing
high-quality news, information and entertainment.
As reported in the Troubled Company Reporter on Dec. 4, 2008, The
NY Times cut its quarterly dividend by 74%, as part of an effort
to conserve cash. The NY Times said that it took steps to lower
debt and increase liquidity, including reevaluating its assets.
The NY Times has laid off employees, merged sections of the NY
Times and Globe to reduce printing costs, and consolidated New
York area printing plants this year.
NORTEL NETWORKS: Court Restricts Trading in Securities
------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
has entered an order that imposes substantial restrictions on
trading in (i) common shares of Nortel Networks Corporation, and
(ii) these series of preferred shares of Nortel Networks Limited,
and any other series of preferred shares into which they may be
converted:
-- Cumulative Redeemable Class A Preferred Shares Series 5, and
-- Non-cumulative Redeemable Class A Preferred Shares Series 7.
The order also notifies owners of claims against Nortel Networks
Inc. and its affiliates of potential future debt trading
restrictions and notice and information requirements.
Bookham Has $4.3MM in Nortel Receivables
Bookham, Inc., said Nortel Networks, directly and through
Flextronics, is a key customer of Bookham and important to its
success and growth. On January 14, 2009, Nortel confirmed to
Bookham that business would continue on ordinary terms during the
course of the bankruptcy proceeding. Bookham expects to sell
product to Nortel and to be paid for future shipments on an on-
going basis throughout the course of the bankruptcy and to
maintain its relationship as a key supplier to Nortel. Bookham is
pleased that Nortel has addressed its contract with Flextronics at
the very first stage of its bankruptcy to ensure the viability of
this important component of the Nortel supply chain and the
relationship with Bookham. Bookham has approximately $4.3 million
in open receivables from Nortel as of January 14, 2009, and
Bookham will pursue its rights to be paid these amounts consistent
with the applicable bankruptcy laws.
Bookham provides high performance optical products, spanning from
components to advanced subsystems. The company designs and
manufactures a broad range of solutions tailored for the
telecommunications optical infrastructure and other selected
markets, including industrial, life sciences, semiconductor, and
scientific. Bookham is headquartered in San Jose, Calif., with
leading edge chip fabrication facilities in the U.K. and
Switzerland, and manufacturing sites in the USA and China.
Broken Arrow, Oklahoma-based XETA Technologies said that it has
been in touch with officials at Nortel following Nortel's
bankruptcy filing. On a contractual basis, XETA provides
maintenance services to large enterprise customers on behalf of
Nortel. XETA estimates that the current annualized value of these
contracts is approximately $3 million, which XETA will continue to
support. In addition, XETA estimates that it has approximately
$500,000 in accounts receivable due from Nortel that precedes the
date of Nortel's bankruptcy filing, the balance of which is
current; and approximately $100,000 in January services not billed
as of the date of the filing. XETA is in active conversations
with Nortel regarding its ongoing contractual relationships and
current accounts receivable.
In its public statements, Nortel has said that it has sufficient
cash on hand to fund ongoing operations and that it expects
operations to continue without interruption.
About Nortel Networks
Headquartered in Ontario, Canada, Nortel Networks Corporation
(NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next-
generation technologies, for both service provider and enterprise
networks, support multimedia and business-critical applications.
Nortel's technologies are designed to help eliminate today's
barriers to efficiency, speed and performance by simplifying
networks and connecting people to the information they need, when
they need it. Nortel does business in more than 150 countries
around the world. Nortel Networks Limited is the principal direct
operating subsidiary of Nortel Networks Corporation.
Nortel Networks Corp., Nortel Networks Inc. and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young has been appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group. The Monitor also sought recognition of the CCAA
Proceedings in the Bankruptcy Court under Chapter 15 of the
Bankruptcy Code.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary
Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll
& Rooney PC, in Wilmington, Delaware, serves as Chapter 15
petitioner's counsel.
Certain of Nortel's European subsidiaries have also made
consequential filings for creditor protection. The Nortel
Companies related in a press release that Nortel Networks UK
Limited and certain subsidiaries of the Nortel group incorporated
in the EMEA region have each obtained an administration order
from the English High Court of Justice under the Insolvency Act
1986. The applications were made by the EMEA Subsidiaries under
the provisions of the European Union's Council Regulation (EC)
No. 1346/2000 on Insolvency Proceedings and on the basis that
each EMEA Subsidiary's centre of main interests is in England.
Under the terms of the orders, representatives of Ernst & Young
LLP have been appointed as administrators of each of the EMEA
Companies and will continue to manage the EMEA Companies and
operate their businesses under the jurisdiction of the English
Court and in accordance with the applicable provisions of the
Insolvency Act.
Several entities, particularly, Nortel Government Solutions
Incorporated and Nortel Networks (CALA) Inc., have material
operations and are not part of the bankruptcy proceedings.
As of September 30, 2008, Nortel Networks Corp. reported
consolidated assets of $11.6 billion and consolidated liabilities
of $11.8 billion. The Nortel Companies' U.S. businesses are
primarily conducted through Nortel Networks Inc., which is the
parent of majority of the U.S. Nortel Companies. As of
September 30, 2008, NNI had assets of about $9 billion and
liabilities of $3.2 billion, which do not include NNI's guarantee
of some or all of the Nortel Companies' about $4.2 billion of
unsecured public debt.
Bankruptcy Creditors' Service, Inc., publishes Nortel Networks
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
and ancillary foreign proceedings undertaken by Nortel Networks
Corp. and its various affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
OTTER TAIL: Auditor Raises Going Concern Doubt
----------------------------------------------
Boulay, Heutmaker, Zibell & Co. P.L.L.P., in Minneapolis,
Minnesota, in a letter dated January 13, 2009, to the Board of
Directors of Otter Tail Ag Enterprises, LLC, expressed substantial
doubt about the company's ability to continue as a going concern.
The firm audited the balance sheets of Otter Tail Ag Enterprises,
LLC as of September 30, 2008 and 2007 and the related statements
of operations and cash flows for the years ended September 30,
2008 and 2007 and the changes in members' equity for the years
ended September 30, 2008 and 2007.
Boulay Heutmaker pointed out that the company has incurred an
accumulated deficit of $8.7 million as of September 30, 2008.
"Based on the company's operating plan, its existing working
capital is not sufficient to meet the cash requirements to fund
the company's planned operating expenses, capital expenditures,
and working capital requirements through September 30, 2009,
without additional sources of cash and the deferral, reduction or
elimination of significant planned expenditures. These conditions
raise substantial doubt about its ability to continue as a going
concern."
As of September 30, 2008, the company's balance sheet showed total
assets of $126,293,160, total current liabilities of $12,478,776,
Long-term debt of $77,323,865, and members' equity of $36,490,519.
For the year ended September 30, 2008, the company posted a net
loss of $8,654,075 compared with a net income of $539,309 for the
same period a year earlier.
Anthony Hicks, chief executive officer and chief financial
officer, disclosed in a regulatory filing dated January 13, 2009,
that the company operated half of the fiscal year in development
stage, therefore having substantial operating expenses with
limited income; the projected loss for fiscal 2008 was an
operational loss of $1.8 million. "Commodity prices were a
significant influence on the viability of the company achieving
its financial objectives, and record high prices during the summer
that coincided with the company's first full production quarter
after commissioning and performance testing led to operational
losses in the quarter, which was also its last quarter of the
fiscal year. This major commodity (corn) is influenced by
external factors beyond our control which lead to higher than
normal market pricing. To secure product for fiscal 2009 the
company executed a number of forward purchase contracts. The
global financial situation caused major reductions in commodity
prices, leaving a shortfall between contract and present market
value. Not only did the market influence the company's input
costs, but also output prices. This gave rise to a situation
whereby the company had commitments that it was required to honor
but could not obtain the required return to justify its carrying
value. In recognition, the company has recorded an amount to
reflect its best estimate between then present market value and
the future realization."
According to Mr. Hicks, the company's plan to address the expected
shortfall of working capital is to generate additional funds
through a combination of raising equity by having a planned
capital campaign, along with evaluating improved technologies to
either earn additional revenue or reduce operating costs. "If the
company is unsuccessful in raising additional funds or revenues
from either of these sources, it will defer, reduce, or eliminate
certain planned expenditures. The company will continue to
consider other funding sources. There can be no assurance that
the company will be able to obtain any sources of funding on
acceptable terms, or at all."
A full-text copy of the company's annual report is available for
free at: http://researcharchives.com/t/s?3847
About Otter Tail
Otter Tail Ag Enterprises, LLC, a Minnesota limited liability
company, was organized with the intention of developing, owning
and operating a 55 million gallon per year capacity dry-mill
ethanol plant near Fergus Falls, Minnesota. The company was in
the development stage until March 2008, when the company commenced
operations.
PATIENT SAFETY: Appoints David Bruce as President and CEO
---------------------------------------------------------
Patient Safety Technologies disclosed in a regulatory filing that
David Bruce has joined the company as its president and chief
executive officer. Mr. Bruce will also join the board of
directors. William Adams, the company's former CEO will remain
involved with the company as a consultant.
Mr. Bruce brings a breadth of experience successfully managing the
growth of medical device businesses. Most recently, Mr. Bruce was
the CEO of EP MedSystems, Inc., a developer of electrophysiology
devices, which was recently acquired by St. Jude Medical. Prior
to EP MedSystems, he was the General Manager of the intracardiac
echo group of Siemens Medical.
Mr. Bruce will receive an initial annual base salary of $325,000
and he is eligible to receive an incentive bonus each fiscal year
in the amount of not less than 25% of his annual base salary for
the year, with the payment of the bonus based on Mr. Bruce's
achievement of performance objectives established by the company's
board of directors each fiscal year. The Agreement also provides
for certain severance arrangements for Mr. Bruce, beginning six
months after the effective date of the Agreement. In the event
that Mr. Bruce's employment is terminated without cause the
company is required to pay Mr. Bruce (1) all accrued but unpaid
compensation; (2) severance payments based on his annual base
salary for a period of twelve months; (3) a pro-rated bonus for
the year in which termination occurred; and (4) payment of, or
reimbursement for, the continuation of his health and welfare
benefits coverage pursuant to COBRA for a 12-month period after
the termination or resignation date.
Pursuant to the Agreement, the company will also grant Mr. Bruce
incentive stock options to purchase 2,000,000 shares of the
company? common stock. The exercise price of the options will be
the average closing price of the company's common stock for the
ten trading days prior to the effective date of the Agreement.
Upon the six-month anniversary of the effective date of the
Agreement, 250,000 Shares subject to the Option will vest and
become exercisable and thereafter, the remaining shares will vest
over a forty-two month period at the rate of 1/48th of the total
shares per month. In addition, upon a change of control of the
company that occurs during his employment, any unvested options
will become fully vested and Mr. Bruce will receive a cash payment
of two times his current base salary.
Regarding joining the company, Mr. Bruce stated, "The Safety-
Sponge(TM) System addresses a persistent problem that costs U.S.
hospitals a conservatively estimated $700 million annually --
retained surgical sponges. With key adopters continuing to show
outstanding results, this proven system is well positioned to
achieve widespread adoption and allow our customers to not only
offer a higher standard of patient care but enable them to save
money in the process."
The company also disclosed that Richard Bertran resigned as
president of SurgiCount Medical, Inc., the company's subsidiary,
effective Jan. 6, 2009. Mr. Bertran's departure from the company
arose from his desire to pursue other career opportunities.
About Patient Safety
Headquartered in Los Angeles, Patient Safety Technologies Inc.
(OTC BB: PSTX.OB) -- http://www.patientsafetytechnologies.com/--
through its wholly owned subsidiary, SurgiCount Medical Inc., is a
developer and manufacturer of patient safety products including
the Safety-Sponge(TM) System. The system helps in reducing the
number of retained sponges and towels in patients during surgical
procedures ans allows for faster and more accurate counting of
surgical sponges.
At Sept. 30, 2008, the company's balance sheet showed total assets
of $8,807,000, total liabilities of $8,255,000 and stockholders'
equity of $552,000.
For three months ended Sept. 30, 2008, the company reported net
income of $224,000 compared with net loss of $1,920,000 for the
same period in the previous year.
For the nine months ended Sept. 30, 2008, the company posted net
loss of $3,745,000 compared with net loss of$5,121,000 for the
same period in the previous year.
Going Concern Doubt
Squar, Milner, Peterson, Miranda & Williamson, LLP, in San Diego,
expressed substantial doubt about Patient Safety Technologies
Inc.'s ability to continue as a going concern after auditing the
company's consolidated financial statements for the year ended
Dec. 31, 2007. The auditing firm reported that the company has
reported recurring losses from operations through Dec. 31, 2007,
and has a significant accumulated deficit and a significant
working capital deficit at Dec. 31, 2007.
At Sept. 30, 2008, the company has an accumulated deficit of
approximately $40.4 million and a working capital deficit of
approximately $5.1 million. For the nine months ended Sept. 30,
2008, the company incurred a loss of approximately $3.8 million
and has used approximately $3.0 million in cash in its operations.
Further, the company has just begun to generate a material amount
of revenues from sales of the company?s patient safety products.
These conditions raise substantial doubt about the company?s
ability to continue as a going concern. The company has relied on
liquidating investments and short-term debt financings to fund a
large portion of its operations. In order to ensure the continued
viability of the company, additional financing must be obtained
and profitable operations must be achieved in order to repay the
existing short-term debt and to provide a sufficient source of
operating capital. No assurances can be made that the company
will be successful obtaining a sufficient amount of additional
financing to continue to fund its operations or that the company
will achieve profitable operations and positive cash flow from its
patient safety products.
Defaults Upon Senior Securities
The company is in the process of attempting to restructure these
debts:
-- On May 1, 2006, the company entered into a secured
promissory note with Herbert Langsam, a Class II Director of
the company, in the principal amount of $500 thousand. This
note was due to be repaid on Nov. 1, 2006.
-- On Nov. 13, 2006, the company entered into a secured
promissory note with Mr. Langsam in the principal amount of
$100,000. This note was due to be repaid on May 13, 2007.
-- On Nov. 1, 2006, the company entered into a convertible
promissory note with Michael G. Sedlak in the principal
amount of $71,000. This note was due to be repaid on
Jan. 31, 2008.
SEAN & SHENASSA: Case Summary & Largest Unsecured Creditor
----------------------------------------------------------
Debtor: Sean & Shenassa 26 LLC
11911 San Vicente Blvd., Suite 255
Los Angeles, CA 90049
Bankruptcy Case No.: 09-00346
Chapter 11 Petition Date: January 14, 2009
Court: Southern District of California (San Diego)
Judge: James W. Meyers
Debtor's Counsel: Raymond R. Lee, Esq.
leesd@aol.com
Suppa, Trucchi & Henein, LLP
3055 India Street
San Diego, CA 92103
Tel: (619) 297-7330
Estimated Assets: unstated
Estimated Debts: unstated
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
San Diego Gas & Electric utilities unknown
The petition was signed by Shahram Elyaszadeh, managing member.
SPORTS COLLECTIBLES: Court Sets Feb. 16 As Claims Bar Date
----------------------------------------------------------
The Honorable Mary F. Walrath directs, in accordance with Rules
3002(a) and 3003(c)(3) of the Federal Rules of Bankruptcy
Procedure, that all creditors of SPORTS COLLECTIBLES ACQUISITION
CORPORATION, d/b/a BC SPORTS COLLECTIBLES, except governmental
units, holding claims that arose on or before September 21, 2008,
(including claims pursuant to section 503(b)(9) of the Bankruptcy
Code) are required to file, on or before 5:00 p.m. (prevailing
Eastern Time) on February 16, 2009, a separate, completed and
executed proof of claim form conforming substantially to Official
Bankruptcy Form No. 10 against the Debtor.
All governmental units holding claims that arose on or before the
Petition Date are required to file, on or before 5:00 p.m.
(prevailing Eastern Time) on March 20, 2009, a separate, completed
and executed proof of claim form conforming substantially to
Official Bankruptcy Form No. 10 against the Debtor.
Each proof of claim form must specifically set forth the full name
of the Debtor against which the claim is asserted and the proper
case number of the Debtor's chapter 11 case. Each proof of claim
form must be filed by delivering one original and one copy of each
proof of claim form so that it is received at or before 5:00 p.m.
(prevailing Eastern Time) on the General Bar Date or Government
Bar Date (whichever is applicable) by the Debtor's Claims Agent,
at one of these addresses:
BC Sports
c/o Delaware Claims Agency L.L.C.
Claims Department
P.O. Box 515
Wilmington, DE 19899
- or -
Delaware Claims Agency L.L.C.
Attn: BC Sports Claims Department
230 N. Market Street
Wilmington, DE 19801.
Any creditor who is required to file a proof of claim but fails to
do so on or before 5:00 p.m. (prevailing eastern time) on
February 16, 2009 (with respect to the general bar date) or on of
before March 20, 2009 (with respect to the government bar date)
shall be forever barred, estopped and enjoined from asserting such
claim (or filing a proof of claim with respect thereto), and the
debtor against which the creditor was required to have filed a
proof of claim and any such debtor's property shall be forever
discharged from any and all indebtedness or liability with respect
to such claim, and such holder shall not be permitted to vote on
any plan of reorganization or participate in any distribution in
the debtor's chapter 11 case on account of such claim.
Based in West Chester, Pennsylvania, Sports Collectibles
Acquisition Corp. -- http://www.bcsports.com-- operates 45
retail stores located in regional shopping malls around the United
States. The company offers sports related merchandise and
apparel. The company filed for Chapter 11 protection on
Sept. 21, 2008 (Bankr. D. Del. Case No. 08-12170). Andrew C.
Kassner, Esq. and Howard A. Cohen, Esq. at Drinker Biddle & Reath
LLP represent the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors it listed assets of
$10 million to $50 million and debts of $10 million to
$50 million.
STAR TRIBUNE: Lists $493.2MM in Assets, $661.1MM in Liabilities
---------------------------------------------------------------
Newsandtech.com reports that The Star Tribune Co. has listed
$493.2 million in assets and $661.1 million in debts.
According to Newsandtech.com, AbitibiBowater Inc. is Star
Tribune's largest creditor, with over $1 million claim.
Newsandtech.com relates that Star Tribune owes GP Plastics Corp.
$128,398, and Agfa about $127,659. Newsandtech.com states that
other industry vendors listed as creditors are:
-- SAP, holding $87,579 claim;
-- Clickability Inc., $83,748;
-- Vmix, $53,865;
-- VoicePort LLC, $53,148;
-- Adicio, $47,184; and
-- Gabriels Technology Solutions, $39,335.
Star Tribune said that it owed a number of commercial printers,
including American Color Graphics in Atlanta, Newsandtech.com
relates.
The Star Tribune Company -- http://www.startribune.com-- operates
the largest newspaper in the state of Minnesota and published
seven days each week in an edition for the Minneapolis-Saint Paul
metropolitan area. The company is based in Minneapolis,
Minnesota. The company filed for Chapter 11 bankruptcy protection
on Jan. 15, 2009 (Bankr. S.D. N.Y. Case No. 09-10245). Marshall
Scott Huebner, Esq., at Davis Polk & Wardwell assists the company
in its restructuring effort. Blackstone Group LP is Star
Tribune's financial advisor. Star Tribune's conflict counsel is
Curtis, Mallet-Prevost, Colt & Mosle LLP. Its claims agent is
Garden City Group Inc.
STAR TRIBUNE: Pioneer to Deliver Paper in Western Wisconsin
-----------------------------------------------------------
Nicole Garrison-Sprenger at Pioneerpress.com reports that Pioneer
Press delivery drivers will start distributing Star Tribune in
western Wisconsin and parts of Washington County in February.
Citing Pioneer Press publisher Guy Gilmore, Pioneerpress.com
relates that the partnership eliminates redundancies, as the Star
Tribune already distributes in Washington County and western
Wisconsin. The report quoted him as saying, "Instead of having
two contractors travel the same roads, you can have one. That
savings is something that can help both companies."
According to Pioneerpress.com, Star Tribune drivers would continue
to deliver newspapers to depots. Citing a union official, the
report states that Pioneer Pres drivers, instead of independent
contractors, would pick up the newspapers and deliver them to
homes. The report quoted Mike Bucsko -- chairperson of the Inter-
Plant Council, a coalition of unions at Twin Cities papers -- as
saying, "It's strictly a business decision to make. The Star
Tribune obviously is paying the Pioneer Press and the Pioneer
Press is reaping the financial rewards."
The Star Tribune Company -- http://www.startribune.com-- operates
the largest newspaper in the state of Minnesota and published
seven days each week in an edition for the Minneapolis-Saint Paul
metropolitan area. The company is based in Minneapolis,
Minnesota. The company filed for Chapter 11 bankruptcy protection
on Jan. 15, 2009 (Bankr. S.D. N.Y. Case No. 09-10245). Marshall
Scott Huebner, Esq., at Davis Polk & Wardwell assists the company
in its restructuring effort. Blackstone Group LP is Star
Tribune's financial advisor. Star Tribune's conflict counsel is
Curtis, Mallet-Prevost, Colt & Mosle LLP. Its claims agent is
Garden City Group Inc.
STATE STREET: Shares Fall 55%; Needs Funding, Analysts Say
----------------------------------------------------------
State Street Corp., the world's largest money manager for
institutions, fell the most since 1984 in New York trading after
unrealized bond losses almost doubled, Bloomberg News said
Jan. 20.
In the fourth quarter of 2008, State Street reported earnings of
$0.15 per share on net income of $65 million, compared with a net
income of $223 million, or $0.57 per share in the fourth quarter
of 2007.
State Street also disclosed that "reflecting the ongoing
illiquidity in the markets" at December 31, 2008, the after-tax,
unrealized mark-to-market losses in the investment portfolio
increased to $6.3 billion, up $3.0 billion from September 30,
2008, and in the State Street-administered asset-backed commercial
paper conduits increased to $3.6 billion up $1.4 billion from
September 30, 2008.
State Street, according to Bloomberg News, fell as much as 55% in
New York Stock Exchange composite trading on Jan. 20, wiping out
$8.7 billion of market value and dragging the stock market lower.
It lost $17.33, or 48%, to $19.02 at 12:13 p.m.
According to Bloomberg, analysts have said that State Street may
have to raise capital. "We believe there will be increased
pressure on the company to raise common equity in the near future
to maintain its credit ratings," Gerard Cassidy, an analyst with
RBC Capital Markets in Portland, Maine, wrote in a research note.
In an earlier interview, Cassidy called a common equity ratio
below 2 percent "something investors frown upon."
State Street announced full-year 2008 earnings of $3.89 per share
on net income of $1.620 billion compared with $3.45 per share on
net income of $1.261 billion in 2007. Ronald E. Logue, chairman
and CEO of State Street, said that due to present industry-wide
challenges, the company expects operating earnings per share to
also be approximately flat with 2008, below its long-term goal of
10% to 15% growth.
With respect to losses in its investment portfolio, State Street
said that since year-end the unrealized after-tax losses in the
investment portfolio have improved $400 million to $5.9 billion as
of January 16, 2009.
Fourth Quarter Results
State Street said in a Jan. 20 filing with the Securities and
Exchange Commission that during the fourth quarter of 2008, it
recorded a $306 million charge in connection with a restructuring
plan. The plan is intended to reduce our operating costs,
including through global workforce reductions that are expected to
be substantially completed by the end of the first quarter of
2009, in order to support our long-term growth while aligning the
organization to meet the challenges and opportunities presented by
the current market environment. As reported by the Troubled
Company Reporter on Dec. 8, 2008, State Street announced in
December that it will lay off about 6% of its global workforce, or
about 1,600 to 1,800 employees.
State Street said Jan. 20 that the aggregate net asset value of
the unregistered cash collateral pools underlying its securities
lending program on Dec. 31, 2008, was $122 billion, compared with
$194 billion at the same point in 2007.
State Street said that as of December 31, 2008, there were $5.45
billion of after-tax net unrealized losses associated with its
portfolio of investment securities available for sale and held to
maturity that were recorded in other comprehensive income in
consolidated shareholders' equity. In addition to these
unrealized losses, there were $870 million of after-tax unrealized
losses associated with securities held to maturity that were not
required under GAAP to be recorded in other comprehensive income.
It said that as 2008 progressed, rating agencies imposed an
increasing number of downgrades and credit watches on the
securities in its investment portfolio, which contributed to the
decline in market values.
In October 2008, the U.S. Treasury invested $2 billion in State
Street pursuant to the TARP capital purchase program.
Lehman Exposure
State Street disclosed that it had had indemnification obligations
with respect to customer repurchase agreements with Lehman
Brothers Holdings Inc. In the case of some of its customers that
entered into repurchase agreements with a U.S. based Lehman
affiliate, State Street indemnified obligations totaling $1
billion and, following the bankruptcy of Lehman, paid this amount
to our customers. Upon such payments, State took possession of
the collateral, consisting of commercial real estate obligations,
that was subject to its customers' repurchase agreements. State
Street established a reserve of $200 million to cover the
difference between the estimated fair value of the collateral at
the time and the payment it made to customers. State Street
acknowledged that upon disposition or maturity of the collateral,
the loss incurred may be greater than $200 million.
In addition, State Street appointed Lehman as sub-custodian or
prime broker for some of it custody customers and some investment
funds managed by State Street Global Advisors, or SSgA. As of
September 15, 2008, the date Lehman was placed in administration,
State Street custody customers had claims against Lehman of
approximately $325 million, and it investment funds had claims
against Lehman of approximately $312 million, both in connection
with Lehman's role as a sub-custodian or prime broker.
About State Street
State Street Corporation (NYSE: STT) is the world's leading
specialist in providing institutional investors with investment
servicing, investment management and investment research and
trading services. With $12.04 trillion in assets under custody and
$1.44 trillion in assets under management at December 31, 2008,
State Street operates in 27 countries and more than 100 geographic
markets worldwide and employs 28,475 worldwide.
In June 2008, Fitch Ratings affirmed to 'B' each individual rating
of State Street Corp. and State Street Bank and Trust Company. In
response to State Street's announced workforce reductions in
December 2008, Fitch said that the Rating Outlook remains
Negative, reflecting various business pressures facing the
company.
STEN CORPORATION: Auditor Raises Going Concern Doubt
----------------------------------------------------
Virchow, Krause & Company, LLP, in Minneapolis, Minnesota, in a
letter dated January 9, 2009, to the Stockholders, Audit Committee
and Board of Directors of STEN Corporation and its subsidiaries
expressed substantial doubt about the company's ability to
continue as a going concern.
The firm audited the consolidated balance sheets of STEN
Corporation and its subsidiaries as of September 28, 2008, and
September 30, 2007, and the related consolidated statements of
operations, stockholders' equity (deficit) and cash flows for the
years then ended.
Virchow Krause pointed out that the company has suffered recurring
losses from operations and has a working capital deficiency.
"These factors raise substantial doubt about its ability to
continue as a going concern."
As of September 28, 2008, the company's balance sheet showed total
assets of $18,225,137 and total liabilities of $19,589,678,
resulting in total stockholders' deficit of $1,364,541. For the
years ended September 28, 2008, and September 30, 2007, the
company posted net losses of $8,021,386 and $2,205,714,
respectively.
Chief Executive Officer Kenneth W. Brimmer disclosed in a
regulatory filing dated January 12, 2009, that the company
incurred losses from continuing operations before taxes of
$5,435,061 and $2,753,542 for the years ended September 28, 2008,
and September 30, 2007, respectively. "The company's liquidity is
largely a function of the amount available to borrow on its senior
credit facility. The amount available to borrow on the senior
credit facility is the direct result of the collections and aging
on its auto installment notes receivable. The company has
analyzed the historic collections and projected a reduced level of
sales activity at its three retail locations. This analysis
indicates that the company will begin to generate positive
operating cash flow beginning in the first quarter and its
operations will generate cash to reduce the senior indebtedness."
On January 2, 2009, the company filed a Form 8-K with the
Securities and Exchange Commission reporting its plan to
discontinue its offering of renewable unsecured subordinated notes
and at that time, STEN also disclosed the suspension of individual
note repayments. "At January 2, 2009, there were approximately
$7.3 million in unsecured subordinated notes outstanding. The
company has acknowledged that an event of default has occurred
regarding certain specific subordinated notes. Non-payment of any
note may result in an event of default under our agreement with
Valens U.S. SPV I, LLC, giving Valens the right to accelerate its
entire note and foreclose on all of the assets of the consolidated
company businesses. The decision to suspend note repayments was
the result of a cash short fall that occurred at the end of
December. The liquidity issue arose because of lower than
projected cash flow from our auto finance receivables near
December 31, 2008. Unexpectedly poor collection results limited
the amount of cash available on the Valens facility, reducing our
liquidity below planned levels. The company decided on January 2,
2009, to discontinue the note offering and to suspend payment of
principal and interest on the subordinated notes while it assesses
alternatives to strengthen its liquidity."
"Valens has not notified us that it is exercising any right to
accelerate its debt. While there is no assurance the senior
lender will not conclude to exercise these rights, we are
currently working cooperatively with Valens to develop and
implement a revised business plan. Given Valens' rights under the
senior credit facility, the company believes any plan it develops
must have the support of Valens to succeed. The company believes
its used car finance business is a viable enterprise and it is the
company's intention to take every possible step to enhance the
viability of this business as part of a plan to fund future debt
repayments."
"As a result of implementing these steps, the company believes it
will have sufficient resources to meet its operating requirements
over the next 12 months."
A full-text copy of the company's annual report is available for
free at: http://researcharchives.com/t/s?384e
About STEN Corporation
STEN Corporation, and its subsidiaries, is a diversified business,
primarily focused on its financing business through STEN Financial
Corporation.
SYNTAX-BRILLIAN: Files Liquidating Plan and Disclosure Statement
----------------------------------------------------------------
Syntax-Brillian Corporation and its debtor-affiliates filed with
U.S. Bankruptcy Court for the District of Delaware a Chapter 11
Liquidating Plan and a disclosure statement containing information
necessary for holders or interests to make an informed judgment
about the Plan.
Only impaired classes of claims or interests may vote to accept or
reject the Debtors' Liquidating Plan. Under the Plan, holders of
claims in Classes 1, 2, 3 and 4 are unimpaired and therefore
deemed to accept the Plan. Holders of claims Classes 5 and 6 are
impaired and are the only ones entitled to vote on the Plan.
Holders of Equity interests in Class 7 are deemed to reject the
Plan and are not entitled to vote.
Holders of Equity interests in Class 7 are deemed to reject the
Plan and are not entitled to vote.
Plan is in the Best Interests of the Estates
The Debtors believe the Plan affords creditors the potential for
the greatest realization on the Debtors' assets and, therefore, is
in the best interests of the estates. If the Plan is not
confirmed, the only viable alternatives are dismissal of the
Chapter 11 cases or conversion to Chapter 7 of the Bankruptcy
Code. The Debtors believe that neither of these alternatives is
preferable to confirmation and consummation of the Plan.
Plan Summary
The Plan contemplates the complete liquidation of the assets of
the Debtors, the creation of a liquidation trust and a "lender
trust" and distribution of all proceeds resulting therefrom. In
general, certain of the Debtors' assets will vest in the Lender
Trust for disposition by a lender trustee for the benefit of the
Lender beneficiaries thereof. All other assets of the estates
will vest in the Liquidation Trust for disposition by the
Liquidation Trustee for the benefit of the beneficiaries thereof.
Pursuant to the Plan, upon the Plan's Effective Date, the Debtors'
estates and all of the debts of all of the Debtors will be
substantively consolidated for purposes of treating claims
including for voting, confirmation and distribution purposes.
Classification and Treatment of Claims and Equity Interests
A. Unclassified Claims
Allowed Administrative Claims will be paid in full on the Plan's
Effective Date.
The Liquidating Trust Funding will be paid in full from the
proceeds of the Liquidation Trust Assets. The amount to be paid
with respect to said funding is referred to as the "Liquidation
Trust Funding Reimbursement." The Liquidation Trust Funding
Reimbursement will be paid in Cash in full prior to the payment of
any Claims of the Liquidation Trust Beneficiaries, all as more
fully provided in the Liquidation Trust Agreement, but after the
payment of Allowed Administrative Claims and Allowed Priority
Claims.
The Lender Trust Funding, including all amounts funded by any of
the Prepetition Lenders or DIP Lenders to the Lender Trust, will
constitute Claims payable from the proceeds of the Lender Trust
Assets. The amount to be paid with respect to said funding is
referred to as the "Lender Trust Funding Reimbursement." The
Lender Trust Funding Reimbursement will be paid in full in Cash
after the payment of all Allowed Administrative Claims and Allowed
Priority Claims, but prior to the payment of any other Claims of
the Lender Trust Beneficiaries, all as more fully provided in the
Lender Trust Agreement.
Each Holder of an Allowed DIP Facility Claim will receive its Pro
Rata distributions from the lender Trust until the earlier of such
time as (x) the DIP Facility Claims are paid in full or (y) the
Lender Trust Assets are exhausted.
B. Classified Claims
Class Claim Status Voting Right
----- ----- ------ ------------
1 Non-Tax Priority Claims Unimpaired Deemed to
accept
2 Priority Tax Claims Unimpaired Deemed to
accept
3 Secured Tax Claims Unimpaired Deemed to
accept
4 Other Secured Claims Unimpaired Deemed to
accept
5 Prepetition Credit Unimpaired Entitled to
vote
Facility Claims
6 General Unsecured Claims Impaired Entitled to
vote
7 Equity Interests Impaired Deemed to
reject
Each Holder of an Non-Tax Priority Claim under Class 1 and each
Holder of a Priority Tax Claim under Class 2 will be paid (i) in
full, in Cash on the Plan's Effective Date, or (ii) if such
Allowed Non-Tax Priority Claim or Allowed Priority Tax Claim is
allowed after the Plan's Effective Date, as soon as practicable
thereafter from the Lender Trust Funding; or (iii) on such other
day as agreed to by the Lender Trustee and the creditor, or as
otherwise ordered by the Bankruptcy Court.
Secured Tax Claims under Class 3 will be paid in full, in Cash on
the Plan's Effective Date, or if allowed after the Plan's
Effective Date, as soon as practicable thereafter from the Lender
Trust Funding; or at the option of the Proponents, over a period
not to exceed six years from the date of assessment, together with
interest thereon at such a rate as may be required under the
Bankruptcy Code.
Unless otherwise agreed to by the Holder of an Allowed Other
Secured Claims under Class 4 and the Proponents, the collateral
subject to the Allowed Other Secured Claim will be abandoned to
the creditor as of the Plan's Effective Date in full satisfaction
of the Allowed Secured Claim.
Holders of Allowed Prepetition Credit Facility Claims under Class
5 will receive (i) after payment in full of Allowed DIP Facility
Claims, Allowed Administrative Claims, the Lender Trust Funding
Reimbursement and Allowed Claims in Classes 1 through 4, their Pro
Rata distributions from the Lender Trust until the Lender Trust
Assets are exhausted and (ii) as to the Prepetition Lender Agreed
Deficiency Claim their Pro Rata distributions from the Liquidation
Trust until the Liquidation Trust Assets are exhausted.
Holders of Allowed General Unsecured Claims under Class 6 will
receive, after payment in full of expenses of the Liquidation
Trust, and after payment in full of the Liquidation Trust Funding
Reimbursement, their Pro Rata (including the Pre-Petition Lender
Agreed Deficiency Claim) distributions from the Liquidation Trust.
On the Plan's Effective Date, Class 7 Equity Interests will be
cancelled and the Holders thereof will receive no distribution on
account of their Equity Interests.
Plan Implementation
1. The Liquidation Trust
On the Plan's Effective Date, the Debtors and the Liquidation
Trustee will execute the Liquidation Trust Agreement and will take
all other steps necessary to establish the Liquidation Trust.
The Liquidation Trust Funding amount will be provided by the DIP
Lenders in the initial amount of $250,000 or such other greater
amount as may be agreed to by the DIP Lenders and the Committee of
Unsecured Creditors appointed in the Debtors' cases.
The Liquidation Trust will terminate as soon as practicable, but
in no event later than the fifth (5th) anniversary of the Plan's
Effective Date. The Bankruptcy Court, upon motion by a party-in-
interest, may extend the term of the Liquidation Trust for a
finite period, if such extension is necessary to liquidate the
Liquidation Trust Assets or for other good cause.
2. The Lender Trust
On the Plan's Effective Date, the Debtors, the Prepetition Lenders
and the Lender Trustee will execute the Lender Trust Agreement and
will take all other steps necessary to establish the Lender Trust
in accordance with the Plan.
The Lender Trust Funding Amount will be provided by the
Prepetition Lenders in the initial amount agreed to by the DIP
Lenders and the Lender Trustee, provided that the Lender
Trust Funding Amount will be sufficient to make distributions to
Holders of Allowed Administrative Claims and Holders of Allowed
Claims in Classes 1, 2, 3, and 4 to the extent not otherwise
satisfied on the Effective Date.
The Lender Trust will terminate as soon as practicable, but in no
event later than the fifth (5th) anniversary of the Plan's
Effective Date; provided, however, that, on or prior to the date
of such termination, the Bankruptcy Court, upon motion by a party-
in-interest, may extend the term of the Lender Trust for a finite
period, if such an extension is necessary to liquidate the Lender
Trust Assets or for other good cause.
"Cramdown" Provisions of the Bankruptcy Code
Because Holders of Equity Interests in Class 7 are deemed to have
rejected the Plan, the Proponents are seeking confirmation of the
Plan as to Class 7, and as to any other class that votes to reject
the Plan, pursuant to Section 1129(b) of the Bankruptcy Code.
A plan may be confirmed under the cramdown provisions if, in
addition to satisfying all other requirements of Section 1129(a)
of the Bankruptcy Code, it (i) "does not discriminate unfairly"
and (ii) is "fair and equitable," with respect to each class of
claims or interests that is impaired under, and has not accepted,
the plan.
A full-text copy of the Debtors' Disclosure Statement, dated
Jan. 16, 2009, in support of their Chapter 11 Liquidating Plan, is
available for free at:
http://bankrupt.com/misc/Syntax-BrillianDisclosureStatement.pdf
About Syntax-Brillian
Based in Tempe, Arizona, Syntax-Brillian Corporation (Nasdaq:
BRLC) -- http://www.syntaxbrillian.com/-- and its affiliated
debtors, Syntax-Brillian SPE, Inc. and Syntax Groups Corp. design,
develop, and distribute high-definition televisions (HDTVs)
utilizing liquid crystal display (LCD) and, formerly, liquid
crystal (LCoS) technologies. The Debtors sell their HDTVs under
the Olevia brand name. SBC is also the sole shareholder of
Vivitar Corp., a suplier of film cameras and a line of digital
imaging products, including digital cameras.
The Debtors filed separate petitions for Chapter 11 relief on
July 8, 2008 (Bankr. D. Del. Lead Case No. 08-11407). Nancy A.
Mitchell, Esq., Allen G. Kadish, Esq., and John W. Weiss, Esq., at
Greenberg Traurig LLP in New York, represent the Debtors as
counsel. Victoria Counihan, Esq., at Greenburg Traurig LLP in
Wilmington, Delaware, represents the Debtors as Delaware counsel.
Five members compose the Official Committee of Unsecured
Creditors. Epiq Bankruptcy Solutions, LLC is the Debtors'
balloting, notice, and claims agent.
Syntax-Brillian cut a deal to sell its business assets to Olevia
International Group LLC. On Sept. 10, 2008, OIG told the
Bankruptcy Court that it won't pursue the deal, contending that
the Debtors irreparably breached various covenants and
representations contained in the Purchase Agreement, causing
various Closing Conditions to fail, and rendering it unable to
comply with its obligations under the Purchase Agreement. OIG
also accused the Debtors of violating their sale contract by
losing business from Target Corp., the Debtors' main customer.
The following day, the Debtors filed a lawsuit asking the Court to
compel Olevia International to complete the purchase. On
Oct. 10, the Bankruptcy Court denied OIG's emergency request to
excuse it from its obligations. OIG has taken an appeal of that
order.
When the Debtors filed for protection from their creditors, they
listed total assets of $175,714,000 and total debts of
$259,389,000.
SYNTAX-BRILLIAN: Panel Taps Anthony Ostlund for D&O Actions
-----------------------------------------------------------
The official committee of unsecured creditors appointed in Syntax-
Brillian Corporation, and its debtor-affiliates' bankruptcy cases,
seeks the authority of the U.S. Bankruptcy Court for the District
of Delaware to retain Anthony Ostlund Baer Louwagie & Ross, P.A.
as its co-counsel in commencing and prosecuting the D&O Actions,
nunc pro tunc to Nov. 25, 2008.
Anthony Ostlund also serves as conflicts counsel to the Debtors.
On Nov. 25, 2008, the Court granted the Committee standing to
prosecute actions on behalf of the Debtors' estates against the
Debtors' Directors and Officers. In said order, the Committee is
authorized to retain Anthony Ostlund as co-counsel to the
Committee in commencing and prosecuting any and all claims and
causes of action against the Debtors' present or former directors
and officers that constitute property of the Debtors' eatates (the
"D&O Actions"). This request is filed in furtherance of the
authorization contained in the D&O Order.
John B. Orestain, Esq., a shareholder at Anthony Ostlund, assures
the Court that the firm does not hold or represent any interest
adverse to the Debtors or their estates, and that the firm is a
"disinterested person" as that term is defined in Sec. 101(14) of
the Bankruptcy Code.
The firm's professional fees as the Committee's co-counsel were
not disclosed in the motion.
About Syntax-Brillian
Based in Tempe, Arizona, Syntax-Brillian Corporation (Nasdaq:
BRLC) -- http://www.syntaxbrillian.com/-- and its affiliated
debtors, Syntax-Brillian SPE, Inc. and Syntax Groups Corp. design,
develop, and distribute high-definition televisions (HDTVs)
utilizing liquid crystal display (LCD) and, formerly, liquid
crystal (LCoS) technologies. The Debtors sell their HDTVs under
the Olevia brand name. SBC is also the sole shareholder of
Vivitar Corp., a suplier of film cameras and a line of digital
imaging products, including digital cameras.
The Debtors filed separate petitions for Chapter 11 relief on
July 8, 2008 (Bankr. D. Del. Lead Case No. 08-11407). Nancy A.
Mitchell, Esq., Allen G. Kadish, Esq., and John W. Weiss, Esq., at
Greenberg Traurig LLP in New York, represent the Debtors as
counsel. Victoria Counihan, Esq., at Greenburg Traurig LLP in
Wilmington, Delaware, represents the Debtors as Delaware counsel.
Five members compose the Official Committee of Unsecured
Creditors. Pepper Hamilton, LLP represents the Committee as
counsel. Epiq Bankruptcy Solutions, LLC is the Debtors'
balloting, notice, and claims agent.
Syntax-Brillian cut a deal to sell its business assets to Olevia
International Group LLC. On Sept. 10, 2008, OIG told the
Bankruptcy Court that it won't pursue the deal, contending that
the Debtors irreparably breached various covenants and
representations contained in the Purchase Agreement, causing
various Closing Conditions to fail, and rendering it unable to
comply with its obligations under the Purchase Agreement. OIG
also accused the Debtors of violating their sale contract by
losing business from Target Corp., the Debtors' main customer.
The following day, the Debtors filed a lawsuit asking the Court to
compel Olevia International to complete the purchase. On
Oct. 10, the Bankruptcy Court denied OIG's emergency request to
excuse it from its obligations. OIG has taken an appeal of that
order.
When the Debtors filed for protection from their creditors, they
listed total assets of $175,714,000 and total debts of
$259,389,000.
TARRAGON CORP: Seeks to Employ Cole Schotz as Bankruptcy Counsel
----------------------------------------------------------------
Tarragon Corporation and its debtor-affiliates have employed Cole,
Schotz, Meisel, Forman & Leonard, P.A., as their bankruptcy
counsel to render these services:
(a) advise the Debtors of their rights, powers and duties as
debtors-in-possession in continuing to operate and manage
their businesses and assets;
(b) prepare such administrative and procedural applications
and motions as may be required for the sound conduct of
the cases, including, but not limited to, the Debtors'
schedules and statement of financial affairs;
(c) review and object to claims;
(d) advise the Debtors concerning, and assisting in the
negotiation and documentation of, debtor-in-possession
financing, debt restructuring and related transactions;
(e) review the nature and validity of agreements relating to
the Debtors' businesses and properties and advise the
Debtors in connection therewith;
(f) review the nature and validity of liens asserted against
the Debtors and advise as to the enforceability of the
liens;
(g) advise the Debtors concerning the actions they might take
to collect and recover property for the benefit of their
estates;
(h) prepare on the Debtors' behalf all necessary and
appropriate applications, motions, pleadings, orders,
notices, petitions, schedules, and other documents, and
review all financial and other reports to be filed in
the Debtors' Chapter 11 cases;
(i) advise the Debtors concerning, and preparing responses
to, applications, motions, pleadings, notices and other
papers which may be filed in the Debtors' Chapter 11
cases;
(j) counsel the Debtors in connection with the formulation,
negotiation and promulgation of a plan of reorganization
and related documents;
(k) represent the Debtors in their appeal to the Bergen
County Board of Taxation of added and omitted assessments
for the 2007 tax year imposed on roughly 100 to 150 units
in One Hudson Park, a condominium located in Edgewater,
New Jersey, for the period of time that one of the
Debtors, Tarragon Edgewater Associates, LLC, owned those
units; and
(l) perform all other legal services for and on behalf of the
Debtors which may be necessary or appropriate in the
administration of their Chapter 11 cases and fulfillment
of their duties as debtors-in-possession.
The Debtors ask the U.S. Bankruptcy Court for the District of New
Jersey to approve the engagement.
The Debtors selected Cole Schotz because of the firm's
considerable experience in business reorganizations and in other
areas of law applicable to these Chapter 11 proceedings, as well
as Cole Schotz's involvement in the Debtors' pre-petition
restructuring efforts and resulting familiarity with the Debtors'
businesses, financial affairs and capital structure.
The Debtors propose to compensate Cole Schotz pursuant to its
customary hourly rates:
Members $350 - $675
Associates $240 - $385
Paralegals $135 - $220
During the 90-day period before the Petition Date, Cole Schotz
received $1,355,287 from the Debtors for contemporaneous services
rendered and disbursements and other charges incurred, all in
accordance with the terms and conditions of the Debtors' pre-
petition engagement agreement with the Firm. As a result of those
payments, Cole Schotz does not hold any claim against the Debtors
for pre-petition services rendered.
Before the Petition Date, the Debtors provided Cole Schotz with a
$448,901.19 retainer.
Michael D. Sirota, Esq., a shareholder at Cole Schotz, attests
that neither his firm nor its professionals have any connection
with the Debtors, their creditors, any other party-in-interest,
their current attorneys or professionals, the United States
Trustee or any person employed in the Office of the United States
Trustee. Moreover, neither the firm nor its profesionals hold or
represent any entity having an adverse interest in the Debtors'
Chapter 11 cases, although Cole Schotz has in the past worked
with, continues to work with and has mutual clients with certain
law firms who may represent parties-in-interest in these cases.
About Tarragon Corporation
New York-based Tarragon Corporation (NasdaqGS:TARR) --
http://www.tarragoncorp.com/-- is a leading developer of
multifamily housing for rent and for sale. Tarragon's operations
are concentrated in the Northeast, Florida, Texas, and Tennessee.
Tarragon and its affiliates filed for Chapter 11 protection on
January 12, 2009 (Bankr. D. N.J. Case No. 09-10555). The Hon.
Donald H. Steckroth presides over the case.
Michael D. Sirota, Esq., Warren A. Usatine, Esq., and Felice R.
Yudkin, Esq., at Cole Schotz Meisel Forman & Leonard, P.A.,
represent the Debtor as bankruptcy counsel. Kurztman Carson
Consultants LLC serves as notice and claims agent. As of
September 30, 2008, the Debtors had $840,688,000 in total assets
and $1,035,582,000 in total debts.
TARRAGON CORP: Taps Jones Day as Special Corporate Counsel
----------------------------------------------------------
Tarragon Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for District of New Jersey as their special
corporate, securities and transactional counsel.
Before the Petition Date, Jones Day actively represented Tarragon
on various types of corporate, securities and transactional
matters including, but not limited to, capital raising activities;
disclosure and other issues arising under federal securities laws;
acquisitions; dispositions; joint ventures; and corporate
governance and other general corporate advice, including certain
contingency planning activities. Over the course of its
representation, Jones Day has become familiar with Tarragon's
complex corporate structure, legal positions and business
operations.
The Debtors anticipate that they will require the continued
services of Jones Day.
The Firm's hourly rates are:
-- Partners
James E. O'Bannon $700
Edward B. Winslow $600
Stephen E. Hall $625
-- Associates
Joey T. May $475
Jacob C. Tiedt $400
Edward B. Winslow, Esq., a partner at Jones Day, attests that
Jones Day does not hold or represent any interest adverse to the
Debtors, their creditors or any other parties in interest herein
with respect to the matters on which Jones Day is to be employed.
During the 90-day period before the Petition Date, Jones Day
received $491,855.17 from the Debtors for services rendered and
disbursements and other charges incurred. Jones Day does not have
a claim against the Debtors as of the Petition Date. The Debtors
have not provided Jones Day with any retainer in connection with
their representation of the Debtors during these Chapter 11 cases.
About Tarragon Corporation
New York-based Tarragon Corporation (NasdaqGS:TARR) --
http://www.tarragoncorp.com/-- is a leading developer of
multifamily housing for rent and for sale. Tarragon's operations
are concentrated in the Northeast, Florida, Texas, and Tennessee.
Tarragon and its affiliates filed for Chapter 11 protection on
January 12, 2009 (Bankr. D. N.J. Case No. 09-10555). The Hon.
Donald H. Steckroth presides over the case.
Michael D. Sirota, Esq., Warren A. Usatine, Esq., and Felice R.
Yudkin, Esq., at Cole Schotz Meisel Forman & Leonard, P.A.,
represent the Debtor as bankruptcy counsel. Kurztman Carson
Consultants LLC serves as notice and claims agent. As of
September 30, 2008, the Debtors had $840,688,000 in total assets
and $1,035,582,000 in total debts.
TRIBUNE CO: Obtains Approval of Motions on Business Operations
--------------------------------------------------------------
Tribune Company says the United States Bankruptcy Court for the
District of Delaware has approved several motions related to
business operations and procedural matters.
In addition to other favorable rulings related to business
operations, the company is now able to:
-- Enter into a joint agreement with Dow Jones & Co. under
which the Chicago Tribune Company will print the daily
and weekend editions of The Wall Street Journal and
Barron's in the Midwest region,
-- Make certain pre-petition contributions to 16 union
pensions,
-- Pay vendors who delivered goods within 20 days prior to
the company's Dec. 8, 2008, Chapter 11 filing,
-- Pay certain commissions earned prior to Dec. 8, 2008.
The court also approved several procedural motions, including
final approval of the extension of a pre-existing $300 million
securitization facility.
TROPICANA ENTERTAINMENT: Seeks OK of Solicitation, Voting Protocol
------------------------------------------------------------------
Tropicana Entertainment, LLC and its debtor-affiliates are seeking
approval by the U.S. Bankruptcy Court for the District of Delaware
of:
(1) the Disclosure Statement explaining their plan of
reorganization;
(2) proposed solicitation and notice procedures;
(3) certain voting and tabulation procedures;
(4) the confirmation notice and objection procedures; and
(5) procedures associated with the rights offering, including
a subscription form.
As reported by the Troubled Company Reporter, the Tropicana Opco
and LandCo debtors filed with the Court separate reorganization
plans on January 8, 2009, and Disclosure Statements explaining
each plan three days later.
Under the Plans, the company's balance sheet would be
substantially deleveraged, leaving reorganized Tropicana with a
serviceable amount of debt and positive cash flow to ensure that
Tropicana can successfully work its way through the economic
downturn and into a more stable, growth-oriented future.
If confirmed, the Plans would cancel the company's long-term
indebtedness and convert a substantial portion of the debt into
ownership stakes in two emergent entities: one referred to in the
plan as OpCo that is comprised of 10 casinos and resorts in the
Tropicana portfolio, including the properties in Atlantic City,
New Jersey and Evansville, Indiana; and the other referred to as
LandCo that is comprised of the Tropicana casino property in Las
Vegas. Under the plan, the secured component of the
$2,300,000,000 OpCo indebtedness is to be converted to common
stock and the unsecured component cancelled. All of the
$442,000,000 LandCo secured debt is to be converted to equity.
In addition, the Plans call for Tropicana to retire the
$67,000,000 outstanding under its debtor in possession financing
facility and pay in full certain allowed administrative and tax
claims. All of the ownership interests of former owner William
Yung and his affiliates will be cancelled and neither Mr. Yung nor
any entity affiliated with Mr. Yung will own any equity in the
reorganized Tropicana.
The OpCo and LandCo Debtors state that their Disclosure Statements
contain the pertinent information necessary for holders of
Impaired Claims to make an informed decision about their Plans.
A full-text copy of the OpCo Debtors' proposed Solicitation
Procedures is available at no charge at:
http://bankrupt.com/misc/Tropi_OpCoProposedSolicProc.pdf
Copies of the proposed forms of Ballots and Master Ballots,
including voting instructions, are available for free at:
http://bankrupt.com/misc/Tropi_OpCoSampleBallots.pdf
http://bankrupt.com/misc/Tropi_OpCoSampleMasterBallots.pdf
A copy of the LandCo Debtors' proposed Solicitation Procedures is
available for free at:
http://bankrupt.com/misc/Tropi_LandCoProposedSolicProc.pdf
Copies of the forms of Ballots, as well as the voting
instructions, can be accessed for free at:
http://bankrupt.com/misc/Tropi_LandCoSampleBallots.pdf
Rights Offering Procedures
Pursuant to the OpCo Plan, eligible holders of OpCo Noteholder
Unsecured Claims have the right to subscribe for shares of
Reorganized OpCo Common Stock priced at the "Total Enterprise
Value," provided that the OpCo Debtors receive subscriptions of
at least $100,000,000 in accordance to the Plan.
The Rights Offering will only be made to holders of Class 5 OpCo
Noteholder Unsecured Claims that are "Accredited Investors."
To avoid the costs and burdens of a second solicitation, the OpCo
Debtors seek to combine the Rights Offering solicitation with the
Solicitation Package for Eligible Holders of OpCo Noteholder
Unsecured Claims.
The OpCo Debtors ask the Court to approve these uniform Rights
Offering procedures:
(a) Each Eligible Holder of OpCo Noteholder Unsecured Claims
must return a duly completed subscription form to the
Securities Voting Agent so the form is actually received
on or before the voting deadline.
(b) After the confirmation date and before the effective date
of the OpCo Plan, the OpCo Debtors will send to any
Eligible Holder that has submitted a duly completed
Subscription Form by the Rights Offering Expiration Date,
an invoice setting forth the Rights Offering payment date.
The Holder must then pay or arrange for payment to the
Securities Voting Agent on or before the Rights Offering
Payment Date of the purchase price.
(c) If the Securities Voting Agent does not receive (1) a duly
completed Subscription Form on or before the Rights
Offering Expiration Date, and (2) payment of the purchase
price on or before the Rights Offering Payment Date, the
Holder is deemed to have relinquished and waived its right
to participate in the Rights Offering.
Michael W. Romanczuk, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, says the Rights Offering is contingent on
receiving aggregate subscriptions of at least $100,000,000 and
will not be completed if insufficient subscriptions are not
received. If the Rights Offering receives aggregate
subscriptions of at least $100,000,000, then on the Plan
Effective Date, the OpCo Debtors will consummate the Rights
Offering by transferring the Rights Offering payments and issuing
Reorganized OpCo Common Stock to the subscribing Holders.
A full-text copy of the Subscription Form is available for free
at http://bankrupt.com/misc/Tropi_OpCoSubscriptionForm.pdf
The Court will convene a hearing on February 17, 2009, to
consider the Debtors' request. Any party who wishes to file an
objection to the request has until February 10 to do so.
The OpCo and LandCo Debtors also have filed with the Court an
amended copy of their financial projections, a copy of which is
available for free at:
http://bankrupt.com/misc/Tropi_AmendedFinancialProjections_OpCoDS.
pdf
http://bankrupt.com/misc/Tropi_AmendedFinancialProjections_LandCoD
S.pdf
About Tropicana Entertainment
Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC --
http://www.tropicanacasinos.com/-- is an indirect subsidiary of
Tropicana Casinos and Resorts. The company is one of the largest
privately-held gaming entertainment providers in the United
States. Tropicana Entertainment owns eleven casino properties in
eight distinct gaming markets with premier properties in Las
Vegas, Nevada, and Atlantic City, New Jersey.
Tropicana Entertainment LLC filed for Chapter 11 protection on
May 5, 2008, (Bankr. D. Del. Case No. 08-10856). Its debtor-
affiliates filed for separate Chapter 11 petitions but with no
case numbers assigned yet. Kirkland & Ellis LLP and Mark D.
Collins, Esq., at Richards Layton & Finger, represent the Debtors
in their restructuring efforts. Their financial advisor is Lazard
Ltd. Their notice, claims, and balloting agent is Kurtzman Carson
Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors'
Web site administration agent. AlixPartners LLP is the Debtors'
restructuring advisor.
Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell
LLP represent the Official Committee of Unsecured Creditors in
this case. Capstone Advisory Group LLC is financial advisor to
the Creditors' Committee.
Bankruptcy Creditors' Service, Inc., publishes Tropicana
Bankruptcy News. The newsletter tracks the chapter 11
restructuring proceedings commenced by Tropicana Entertainment
LLC and its affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
TROPICANA ENTERTAINMENT: Court Scraps Panel's Bid to File Own Plan
------------------------------------------------------------------
Judge Kevin Carey of the U.S. Bankruptcy Court for the District of
Delaware denied the request of the Official Committee of Unsecured
Creditors in the bankruptcy cases of Tropicana Entertainment LLC
for the modification of the Debtors' exclusivity periods so it may
file its own bankruptcy exit plan for the Debtors.
Tropicana Bankruptcy News says the Committee's request was denied
for "reasons stated in open court."
The Committee asked the Court to:
(1) modify the Debtors' exclusive periods to file a plan of
reorganization and to solicit acceptances, solely with
respect to the Creditors Committee;
(2) authorize it to file its own plan of reorganization and an
accompanying disclosure statement; and
(3) place any disclosure statement and plan filed by the
Creditors Committee on the same approval track as any of
those filed by the Debtors to the extent the Debtors file
a plan on or before January 12, 2009.
"The perfect storm of credit markets in crisis and a failing
economy have left the Debtors at the mercy of the OpCo Lenders
and the LandCo Lenders, whose adequate protection payments likely
will choke off the Debtors' liquidity before Memorial Day,"
Thomas F. Driscoll III, Esq., at Morris, Nichols, Arsht & Tunnell
LLP, in Wilmington, Delaware, who represents the panel, said.
The Creditors Committee had said it expects the Debtors to file a
"plan essentially turning over the keys to the banks and giving
unsecured creditors a token recovery, if any.
Mr. Driscoll said the Creditors Committee needs relief from
Debtors' Exclusivity to pursue its own plan as the Debtors "have
been left little choice but to do their bank lenders' bidding."
The Creditors Committee said the Debtors "should be fighting with
everything they have to regain the Tropicana Atlantic City Assets
and obtain access to its cash flow, retain the Tropicana Las
Vegas, find new DIP financing, and strongly consider a 'cram-up'
plan of reorganization, all of which would buy the Debtors more
time to ride out the storm and allow the Debtors' estates to
recognize the significant value that is trapped in the enterprise
due to the current difficulties in the exit financing markets."
The panel asserted that to rehabilitate the Tropicana brand, the
Debtors should refrain from precipitously filing any plan of
reorganization and seek an appropriate extension of exclusivity in
the hope that in the coming months the credit markets will thaw
and reasonably priced exit financing will become available,
particularly with the prospect of reorganizing around "cash-
producing" Casino Evansville and the Tropicana Atlantic City
Assets.
According to Mr. Driscoll, the Creditors Committee is concerned
that due to the pressures of the OpCo Lenders and the state of
the gaming markets, the Debtors may be forced to sell the
Tropicana Atlantic City at far below fair market value; and due
to the dwindling EBITDA experienced by the Tropicana Las Vegas
during these challenged markets, the Debtors may hand over all
equity in Tropicana Las Vegas, which lies at the center of the
Tropicana portfolio, to the LandCo Lenders at half of its actual
value.
As reported by the Troubled Company Reporter, the Tropicana Opco
and LandCo debtors filed with the Court separate reorganization
plans on January 8, 2009, and Disclosure Statements explaining
each plan three days later. If confirmed, the Plans would cancel
the company's long-term indebtedness and convert a substantial
portion of the debt into ownership stakes in two emergent
entities: one referred to in the plan as OpCo that is comprised of
10 casinos and resorts in the Tropicana portfolio, including the
properties in Atlantic City, New Jersey and Evansville, Indiana;
and the other referred to as LandCo that is comprised of the
Tropicana casino property in Las Vegas. Under the plan, the
secured component of the $2,300,000,000 OpCo indebtedness is to be
converted to common stock and the unsecured component cancelled.
All of the $442,000,000 LandCo secured debt is to be converted to
equity.
In addition, the Plans call for Tropicana to retire the
$67,000,000 outstanding under its debtor in possession financing
facility and pay in full certain allowed administrative and tax
claims. All of the ownership interests of former owner William
Yung and his affiliates will be cancelled and neither Mr. Yung nor
any entity affiliated with Mr. Yung will own any equity in the
reorganized Tropicana.
Objections
Several parties-in-interest objected to the Committee's bid:
(1) Lenders Steering Committee
On behalf of the steering committee of lenders under a Credit
Agreement dated January 3, 2007, as amended, among the Debtors,
the Lenders, and Credit Suisse, as administrative agent and
collateral agent, Michael R. Lastowski, Esq., at Duane Morris
LLP, in Wilmington, Delaware, argued that disagreement over plan
values and other terms of a plan is not a valid basis for
terminating the Debtors' Exclusivity Period.
Mr. Lastowski said the Creditors Committee is entitled to, and
will have, its day in Court to litigate disputes about the value
of the Debtors' assets in connection with the confirmation of the
Debtors' plan of reorganization. He argued that the Creditors
Committee is attempting to use that issue to hinder the plan
process and to use the resulting delay against all other
constituencies in the Debtors' Chapter 11 cases.
Mr. Lastowski said the Creditors Committee is incorrect on its
assertion that the Debtors' pending liquidity crisis is caused
solely by their payment of adequate protection payments. He said
the Debtors will run out of cash regardless of whether they
continue making adequate protection payments, due to their
declining revenues and substantial restructuring-related expenses.
He noted that under the Creditors Committee's proposed scheme, the
secured lenders will bear all of the risk of further deterioration
in value of their collateral while the Committee alone stands to
benefit from all of the benefits of future appreciation. "There
would be nothing but risk for the secured lenders, and nothing but
reward for the Creditors Committee," Mr. Lastowski said.
(2) Debtors
Though the Creditors Committee contends that it is seeking a
modification of the Debtors' Exclusivity Periods for "limited
purposes," these limited purposes are entirely at odds with
Section 1121 of the Bankruptcy Code and have no legal
justification, Lee Kaufman, Esq., at Richards, Layton & Finger,
P.A., in Wilmington, Delaware, argued on the Debtors' behalf. "At
its core, the Creditors Committee's Motion is a 'leverage ploy' to
create more drawn out and expensive confirmation process," he
says.
The additional cost and delay and the Debtors' diligent
reorganization efforts and progress to formulate their own plans
mandate the denial of the Creditors Committee's Motion, Mr.
Kaufman said.
(3) Credit Suisse, Onex Corp.
Credit Suisse said the Creditors Committee Motion should be denied
because, among other things, (a) the Creditors Committee has no
legal authority, (b) equity dictates that if the Court were to
determine to terminate the Debtors' Exclusive Periods, all
creditors should have equal rights to propose, file and solicit
acceptances of a reorganization plan, (c) granting the Motion
would prejudice the LandCo Lenders, and (d) the Motion is replete
with false statements.
Onex Corporation, on behalf of itself and certain of its
affiliates, supported the arguments made by Credit Suisse. Onex
Corp. owns claims under the LandCo secured credit agreement.
Not a Delay Tactic
In response to the objections, Mr. Driscoll said the Committee has
already invested significant time and resources considering the
terms of a competing plan, and has prepared a draft plan of
reorganization to be filed with the Court when its request is
approved.
Mr. Driscoll said any incremental fees or expenses associated with
a competing plan would be minimal. Mr. Driscoll said it can
hardly be suggested that (1) the inclusion of the Creditors
Committee's competing plan and accompanying disclosure statement
in the same envelope as the Debtors' solicitation materials, and
(2) the contemporaneous pursuit of discovery on factual and legal
issues would result in significant incremental expenses or result
in delay.
Moreover, Mr. Driscoll said that the Objectors' suggestion that
unsecured creditors must wait until the eleventh hour to exercise
their rights and seek judicial intervention is implausible. He
added that the Objectors' contentions that the Creditors Committee
is employing a delay tactic and that the adequate protection
payments are not the primary drain on the Debtors' cash flow are
unfounded.
About Tropicana Entertainment
Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC --
http://www.tropicanacasinos.com/-- is an indirect subsidiary of
Tropicana Casinos and Resorts. The company is one of the largest
privately-held gaming entertainment providers in the United
States. Tropicana Entertainment owns eleven casino properties in
eight distinct gaming markets with premier properties in Las
Vegas, Nevada, and Atlantic City, New Jersey.
Tropicana Entertainment LLC filed for Chapter 11 protection on
May 5, 2008, (Bankr. D. Del. Case No. 08-10856). Its debtor-
affiliates filed for separate Chapter 11 petitions but with no
case numbers assigned yet. Kirkland & Ellis LLP and Mark D.
Collins, Esq., at Richards Layton & Finger, represent the Debtors
in their restructuring efforts. Their financial advisor is Lazard
Ltd. Their notice, claims, and balloting agent is Kurtzman Carson
Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors'
Web site administration agent. AlixPartners LLP is the Debtors'
restructuring advisor.
Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell
LLP represent the Official Committee of Unsecured Creditors in
this case. Capstone Advisory Group LLC is financial advisor to
the Creditors' Committee.
Bankruptcy Creditors' Service, Inc., publishes Tropicana
Bankruptcy News. The newsletter tracks the chapter 11
restructuring proceedings commenced by Tropicana Entertainment
LLC and its affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
TROPICANA ENTERTAINMENT: US Trustee Opposes Fox Rothschild Hiring
-----------------------------------------------------------------
Roberta A. DeAngelis, the Acting United States Trustee for
Region 3, objects to the retention of Fox Rothschild LLP as the
Official Committee of Unsecured Creditors' New Jersey regulatory
and gaming counsel, nunc pro tunc to October 6, 2008. Ms.
DeAngelis reports that the Firm currently represents the Debtors
as an ordinary course professional.
On behalf of the U.S. Trustee, Richard L. Schepacarter, Esq.,
argues that the Creditors Committee's retention of Fox Rothschild
is prohibited under Section 1103(b) of the Bankruptcy Code as the
Firm currently represents the Debtors, an entity having an
adverse interest to that of the Committee in connection with
these Chapter 11 cases.
Mr. Schepacarter informs the Court that Fox Rothschild represents
the Debtors in various labor and employment matters and several
immigration matters as well as non-Debtor Tropicana Atlantic
City. However, Fox Rothschild now proposes to represent the
Creditor Committee's interests vis-a-vis Tropicana Atlantic City
and the Debtors with respect to Tropicana Atlantic City's
property and the proceedings pending before the New Jersey Casino
Control Commission.
"Given that such matters create more than just a potential
conflict, Fox Rothschild's multiple representation of the
[Creditors] Committee, the Debtors, and a non-debtor entity who
is adverse to a committee member (and whose assets appear to be
the lynchpin of any reorganization plan), the Application must be
denied," Mr. Schepacarter argues.
In its request, Committee Chairperson Bradley Takahashi of
Franklin Mutual Advisers, LLC, said the Committee needs to retain
special counsel, particularly with respect to New Jersey gaming
laws, due to the pending conservatorship related to the Tropicana
Atlantic City and all other assets of Adamar of New Jersey, Inc.,
and the proceedings pending before the New Jersey Casino Control
Commission. As demonstrated by the Debtors' preliminary business
plan, the Atlantic City Assets comprise the centerpiece of the
Debtors' reorganization efforts, Mr. Takahashi said. The proposed
sale of the Atlantic City Assets by the state-appointed trustee
Justice Gary Stein, he said, is at a price far below fair market
value and will result in the loss of hundreds of millions of
dollars to unsecured creditors.
In the event that the Atlantic City Assets are retained, it is
also necessary for Fox Rothschild to advise the Creditors
Committee with respect to any regulatory issues that may arise
during the course of the Debtors' Chapter 11 cases, Mr. Takahaski
added.
The Committee is proposing that Fox Rothschild will be paid
according to its customary hourly rates, as adjusted from time to
time:
Partners and special counsel $350 - $675
Associates $215 - $350
Paralegals $100 - $250
The firm will also be reimbursed for actual and necessary
expenses incurred for the benefit of the Debtors.
William J. Downey, Esq., a partner at Fox Rothschild, disclosed
that his Firm has represented and currently represents:
(a) the Debtors, as an ordinary course professional with
respect to labor and employment matters and several
immigration matters;
(b) Tropicana Atlantic City, in matters unrelated to the
Debtors' Chapter 11 cases; and
(c) certain creditors, including certain members of the
Creditors Committee.
Other interested parties include Wilmington Trust Company, Bear
Stearns & Co. Inc., Barclays Capital, and Credit Suisse.
Mr. Downey has attested Fox Rothschild does not hold or represent
any interest adverse to the Creditors Committee or its members
with respect to the matters upon which the Firm is to be
retained. Mr. Downey said the Firm's representation of current or
former clients, who may be potential parties-in-interest of the
Debtors, concern matters unrelated to the Debtors' Chapter 11
cases, except as otherwise provided. Fox Rothschild will not
represent any of those entities in connection with the Debtors or
their bankruptcy cases, he assures the Court.
Fox Rothschild is a disinterested person, as the term is defined
in Section 101(14) of the Bankruptcy Code, Mr. Downey said.
About Tropicana Entertainment
Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC --
http://www.tropicanacasinos.com/-- is an indirect subsidiary of
Tropicana Casinos and Resorts. The company is one of the largest
privately-held gaming entertainment providers in the United
States. Tropicana Entertainment owns eleven casino properties in
eight distinct gaming markets with premier properties in Las
Vegas, Nevada, and Atlantic City, New Jersey.
Tropicana Entertainment LLC filed for Chapter 11 protection on
May 5, 2008, (Bankr. D. Del. Case No. 08-10856). Its debtor-
affiliates filed for separate Chapter 11 petitions but with no
case numbers assigned yet. Kirkland & Ellis LLP and Mark D.
Collins, Esq., at Richards Layton & Finger, represent the Debtors
in their restructuring efforts. Their financial advisor is Lazard
Ltd. Their notice, claims, and balloting agent is Kurtzman Carson
Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors'
Web site administration agent. AlixPartners LLP is the Debtors'
restructuring advisor.
Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell
LLP represent the Official Committee of Unsecured Creditors in
this case. Capstone Advisory Group LLC is financial advisor to
the Creditors' Committee.
Bankruptcy Creditors' Service, Inc., publishes Tropicana
Bankruptcy News. The newsletter tracks the chapter 11
restructuring proceedings commenced by Tropicana Entertainment
LLC and its affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
TROPICANA ENTERTAINMENT: Justice Stein Wants Sale Deadline Moved
----------------------------------------------------------------
Tropicana Atlantic City's conservator, retired New Jersey Supreme
Court Justice Gary S. Stein, is asking the New Jersey Casino
Control Commission to extend the current deadline to sell the
Tropicana Atlantic Casino from January 21, 2008, to February 4,
2009, pressofAtlanticCity.com reported.
According to NJ Commission spokesman Daniel Heneghan, Justice
Stein "needs more time to wrap up talks with Cordish [Co.] before
he comes before the commission in February for its approval of
the proposed sale agreement."
In papers filed with the NJ Commission, Justice Stein revealed
that Cordish has lowered its initial offer of $700,000,000 in
cash and notes or $575,000,000 in cash because Tropicana Atlantic
City's 2008 cash flow fell below the projections, PAC related.
Justice Stein declined to comment and Cordish could not be
reached for comment, PAC said.
Justice Stein plans to sell Tropicana Atlantic City in a
bankruptcy auction. Other entities would have an opportunity to
make higher offers for the casino.
Mr. Heneghan noted that if the NJ Commission approves Justice
Stein's request during its January 21, 2009 meeting, it will be
the fifth time the Commission will have granted a sale deadline
extension.
PAC also noted that the fees for Justice Stein and his
professionals have reached $3,000,000 in late November 2008.
About Tropicana Entertainment
Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC --
http://www.tropicanacasinos.com/-- is an indirect subsidiary of
Tropicana Casinos and Resorts. The company is one of the largest
privately-held gaming entertainment providers in the United
States. Tropicana Entertainment owns eleven casino properties in
eight distinct gaming markets with premier properties in Las
Vegas, Nevada, and Atlantic City, New Jersey.
Tropicana Entertainment LLC filed for Chapter 11 protection on
May 5, 2008, (Bankr. D. Del. Case No. 08-10856). Its debtor-
affiliates filed for separate Chapter 11 petitions but with no
case numbers assigned yet. Kirkland & Ellis LLP and Mark D.
Collins, Esq., at Richards Layton & Finger, represent the Debtors
in their restructuring efforts. Their financial advisor is Lazard
Ltd. Their notice, claims, and balloting agent is Kurtzman Carson
Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors'
Web site administration agent. AlixPartners LLP is the Debtors'
restructuring advisor.
Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell
LLP represent the Official Committee of Unsecured Creditors in
this case. Capstone Advisory Group LLC is financial advisor to
the Creditors' Committee.
Bankruptcy Creditors' Service, Inc., publishes Tropicana
Bankruptcy News. The newsletter tracks the chapter 11
restructuring proceedings commenced by Tropicana Entertainment
LLC and its affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
VALCOM INC: Auditor Raises Going Concern Doubt in FY 2008 Report
----------------------------------------------------------------
Moore & Associates Chartered, in Las Vegas, Nevada, in a letter
dated January 10, 2009, to the Board of Directors of Valcom, Inc.,
expressed substantial doubt about the company's ability to
continue as a going concern after auditing the consolidated
balance sheets of Valcom, Inc., as of September 30, 2008, and
2007, and the related consolidated statements of operations,
stockholders' equity and cash flows for the years then ended.
The firm pointed out that the company has incurred significant
annual losses, which have resulted in an accumulated deficit of
$17,733,106 at September 30, 2008, which raises substantial doubt
about its ability to continue as a going concern.
As of September 30, 2008, the company's balance sheet showed total
assets of $1,186,870, total liabilities $1,132,779 and total
stockholders' equity $54,091. The company posted a net loss
$433,816 for the year ended September 30, 2008.
Vince Vellardita, chief executive officer and and chief financial
officer, disclosed in a regulatory filing dated January 13, 2009,
that the company has not yet established an ongoing source of
revenues sufficient to cover its operating costs and allow it to
continue as a going concern. "The ability of the company to
continue as a going concern is dependent on the company increasing
sales to the point it becomes profitable. The company may need to
raise additional capital for marketing to increase its sales. If
the company is unable to increase sales sufficiently or obtain
adequate capital, it could be forced to cease operation."
"Management plans to increase sales by increasing its marketing
program and to obtain additional capital from the private
placement of shares of its common stock. However, management
cannot provide any assurances that the company will be successful
in accomplishing any of its plans."
A full-text copy of the company's annual report is available for
free at: http://researcharchives.com/t/s?3840
About Valcom
As of September 30, 2008, ValCom, Inc., had five subsidiaries: (1)
Valencia Entertainment International, LLC; (2) Half Day Video,
Inc.; (3) ValCom Studios, Inc. (80% Equity Interest); (4) New Zoo
Revue LLC (50% Interest); (5) ValCom Broadcasting, LLC (45% Equity
Interest). The company is a diversified entertainment company
with four divisions: studio rental, film production division, live
theatre division, TV stations and broadcasting.
The company filed a voluntary petition for reorganization under
Chapter 11 on July 16, 2007 (Bankr. C.D. Calif. Case No. 07-
15984). Joseph L. Pittera, Esq., represented the Debtor in its
restructuring efforts. The Hon. Ernest M. Robles of the United
States Bankruptcy Court for the Central District of California
confirmed a second amended Chapter 11 plan of liquidation filed by
Valcom Inc. on June 14, 2008. The company emerged from bankruptcy
on August 5, 2008.
VARSITY GOLD: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Varsity Gold, Inc., Debtor
459 N. Gilbert, Suite B-220
Gilbert, AZ 85234
Bankruptcy Case No.: 09-00771
Chapter 11 Petition Date: January 16, 2009
Court: District of Arizona (Phoenix)
Judge: Randolph J. Haines
Debtor's Counsel: Robert J. Miller, Esq.
rjmiller@bryancave.com
Bryan Cave LLP
Two N. Central Avenue, Suite 2200
Phoenix, AZ 85004
Tel: (602) 364-7000
Fax: (602) 364-7070
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
------ --------------- ------------
Otis Spunkmeyer, Inc. trade $4,063,706
7900 Collection Drive
Chicago, IL 60693
Tel: (510) 667-3856
Rapit Printing trade $553,290
1415 1st. Ave.
Saint Paul, MN 55112
Tel: (651) 633-4600
S'Kool Smartz trade $382,703
P.O. Box 896
Terrell, TX. 75160
Tel: (972) 563-8919
Access VG, LLC trade $302,043
Galbut & Hunter trade $132,229
Cardsource trade $108,217
Chicago Partners trade $77,171
Fundraising Manager trade $76,898
Travel Tags trade $57,816
United Health Care trade $38,528
American Bank bank loan $33,949
All-4-Fun trade $30,212
United Parcel Service trade $29,890
Phoenix Staff LLC trade $29,451
Danadi Consulting trade $24,415
Black Lowe & Grahm trade $22,603
Quma Learning trade $19,896
Western America Commercial trade $14,698
LLC
Big Kahuna Inflatables LLC trade $13,950
OC Tanner trade $13,275
The petition was signed Randy M. Lebedoff, senior vice president
and general counsel.
VIKING SYSTEMS: Reduces CEO's Annual Salary to $1 to Cut Costs
--------------------------------------------------------------
Viking Systems, Inc., and William C. Bopp, the company's chief
executive officer and chairman of the board, further amended
Mr. Bopp's Jan. 4, 2008 Executive Employment Agreement to reduce
his annual base salary from $39,000 per year to $1 per year,
effective Nov. 2, 2008.
Mr. Bopp offered to reduce his salary in conjunction with other
expense reduction initiatives being implemented by the company.
The remaining terms of the Executive Employment Agreement remain
the same, as amended on Feb. 27, 2008.
A full-text copy of the AMENDMENT No. 2 TO EXECUTIVE EMPLOYMENT
AGREEMENT is available for free at:
http://ResearchArchives.com/t/s?3851
Based in Westborough, Massachusetts, Viking Systems Inc. (OTC BB:
VKNG) -- http://www.vikingsystems.com/-- is a worldwide
developer, manufacturer and marketer of visualization solutions
for complex minimally invasive surgery. The company partners
with medical device companies and healthcare facilities to provide
surgeons with proprietary visualization systems enabling minimally
invasive surgical procedures, which reduce patient trauma and
recovery time.
At Sept. 30, 2008, the company's balance sheet showed total assets
of $4,223,718, total liabilities of $2,309,806 and stockholders'
equity of $1,913,912.
For three months ended Sept. 30, 2008, the company posted net loss
of $43,599 compared with net loss of $6,231,238 for the same
period in the previous year.
For nine months ended Sept. 30, 2008, the company net loss of
$5,055,726 compared with net loss of $12,041,671 for the same
period in the previous year.
From Jan. 1, 2004, through Sept. 30, 2008, the company raised net
proceeds of $10,750,000 through the sale of common and preferred
stock in private placements and approximately $13,600,000 through
the issuance of convertible notes and debentures. As of
Sept. 30, 2008, the company has cash of $371,475.
Going Concern Doubt
Squar, Milner, Peterson, Miranda & Williamson, LLP, in San Diego,
expressed substantial doubt about Viking Systems Inc.'s ability to
continue as a going concern after auditing the company's financial
statements for the year ended Dec. 31, 2007, and 2006. The
auditing firm reported that the company has incurred significant
recurring net losses and negative cash flows from operating
activities through Dec. 31, 2007.
WALL HOMES: Files for Bankruptcy Due to Home Sales Decline
----------------------------------------------------------
Wall Homes Inc. and an affiliate filed for Chapter 11 protection
from creditors before the U.S. Bankruptcy Court for the Northern
District of Texas.
"The nationwide decline in home sales caused a significant
reduction in the amount of capital available to the companies,"
Chief Financial Officer Darris McClure said in court papers,
according to Bloomberg News. "Additionally, some lenders began to
sweep sales proceeds from the closing table" that the companies
used to fund operations, he said.
Mr. McClure said Wall's equity partners, Warburg Pincus Private
Equity VIII LP and Jen I LP, unsuccessfully tried to work out an
arrangement with the lenders prior to the filing, Bloomberg said.
According to the report, New York-based Warburg Pincus owns 73% of
Wall Home Inc.'s outstanding common stock and 82% of the
outstanding preferred stock.
In its bankruptcy petition, the company listed assets of less than
$1 million and debt of less than $50 million. Its Wall Homes
Texas unit listed assets of less than $500 million and debt of
less than $50 million.
Wall Homes Inc. is an Arlington, Texas-based homebuilder. Wall
Homes was founded in 2005 by Steve Wall with financing from
Warburg Pincus Private Equity VIII LP. The company built
subdivisions in the Dallas-Fort Worth, San Antonio, Austin and
Houston areas. It constructed a north Texas home for ABC
Television's reality show "Extreme Makeover: Home Edition."
WALL HOMES: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Wall Homes, Inc.
fka Endeavor Homes, Inc.
dba The Endeavor Group, Inc.
5470 LBJ Freeway, Suite 900
Dallas, TX 75240
Bankruptcy Case No.: 09-30362
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Wall Homes Texas LLC 09-30363
Type of Business: The Debtors operate a homebuilding company.
Chapter 11 Petition Date: January 17, 2009
Court: Northern District of Texas (Dallas)
Judge: Barbara J. Houser
Debtors' Counsel: Aaron Michael Kaufman, Esq.
akaufman@coxsmith.com
Mark Edward Andrews, Esq.
mandrews@coxsmith.com
Cox Smith Matthews Incorporated
1201 Elm St., Ste. 3300
Dallas, TX 75270
Tel: (214) 698-7821
Fax: (214) 698-7899
Estimated Assets: Less than $50,000
Estimated Debts: $10 million to $50 million
The Debtors' Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
AFCO Credit Corporation $82,344
110 William Street, 29th Floor
New York, NY 10038
Baker Botts $38,063
2001 Ross Avenue
Dallas, TX 75202-2980
Ernst & Young $28,200
Great American Insurance $13,765
Companies
Office Depot Inc. $11,055
Constellation New Energy $6,093
McLaughlin Design Studio Inc. $3,600
Shannon Gracey Ratliff & Miller $2,749
LLP
AT&T $2,199
Aramark Uniform Services Inc. $1,559
ADP Inc. $1,475
FedEx $1,166
The Stewart Organization $920
Pro Star $889
KS2 Technologies Inc. $862
CDW Direct $841
GE Capital (Sam's Club) $572
Progressive Concepts $360
Cintas First Aide and Safety $342
2001 Green Oaks Ltd. unknown
The petition was signed by Stephen T. Wall, president and
chief executive officer of the company.
* Hahn & Hessen Appoints Ford and Schnitzer as New Partners
-----------------------------------------------------------
The New York based law firm of Hahn & Hessen LLP said Daniel M.
Ford and Edward L. Schnitzer have been made partners in the Firm,
effective January 1, 2009. Mr. Ford and Mr. Schnitzer were
formerly senior associates with the Firm.
"We are delighted to have Dan and Ed as members of the Firm," said
Managing Partner, Steven J. Seif. "Dan has gained an impressive
level of experience in all aspects of commercial lending
transactions. Ed, with his extensive courtroom experience, has
become a highly effective bankruptcy litigator, as well as one of
the Firm's leading experts in preference actions." Seif added,
"The addition of Ed and Dan to the partnership positions the Firm
to provide a higher level of leadership in Hahn & Hessen's
traditional areas of service to our clients."
Mr. Ford represents financial institutions and borrowers in
structuring, negotiating and closing a wide variety of domestic
and cross-border financing transactions. Prior to joining the
firm in 2004, Mr. Ford practiced as an associate in the Bank
Finance Group with White & Case LLP. A 2000 magna cum laude
graduate of Case Western Reserve University School of Law, Mr.
Ford was a member of the Law Review and was elected to the Order
of the Coif.
Mr. Schnitzer represents creditors, unsecured creditor committees,
debtors and trustees, with a concentrated expertise in all levels
of bankruptcy-related litigation. He began his career as an
Assistant District Attorney in Bronx County, arguing cases before
the Appellate Division, New York Court of Appeals, Southern
District of New York, and the Second Circuit, and thereafter
served as a Staff Attorney with the Division of Enforcement of the
Securities and Exchange Commission. A 1997 graduate of Columbia
University School of Law, and a Harlan Fiske Stone Scholar, he has
been with the Firm since 2001.
Founded in 1931, Hahn & Hessen LLP -- http://www.hahnhessen.com--
is a full service commercial firm serving primarily financial
institutions and creditors holding distressed debt. It has
received substantial recognition for its unique capabilities in
those situations where the creditworthiness of a client's existing
or potential borrower, counterparty or customer is of concern.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Jan. 21-22, 2009
TURNAROUND MANAGEMENT ASSOCIATION
Corporate Governance Meetings
Bellagio, Las Vegas, Nevada
Contact: www.turnaround.org
Jan. 22-23, 2009
TURNAROUND MANAGEMENT ASSOCIATION
Distressed Investing Conference
Bellagio, Las Vegas, Nevada
Contact: www.turnaround.org
Jan. 22-24, 2009
AMERICAN BANKRUPTCY INSTITUTE
Rocky Mountain Bankruptcy Conference
Westin Tabor Center, Denver, Colorado
Contact: 1-703-739-0800; http://www.abiworld.org/
Feb. 5-7, 2009
AMERICAN BANKRUPTCY INSTITUTE
Caribbean Insolvency Symposium
Westin Casurina, Grand Cayman Island, AL
Contact: 1-703-739-0800; http://www.abiworld.org/
Feb. 25-27, 2009
AMERICAN BANKRUPTCY INSTITUTE
Valcon
Four Seasons, Las Vegas, Nevada
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 13, 2009
AMERICAN BANKRUPTCY INSTITUTE
Bankruptcy Battleground West
Beverly Wilshire, Beverly Hills, California
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 14-16, 2009
AMERICAN BANKRUPTCY INSTITUTE
Conrad Duberstein Moot Court Competition
St. John's University School of Law, New York City
Contact: 1-703-739-0800; http://www.abiworld.org/
Apr. 1-4, 2009
AMERICAN BANKRUPTCY INSTITUTE
27th Annual Spring Meeting
Gaylord National Resort & Convention Center,
National Harbor, Md.
Contact: 1-703-739-0800; http://www.abiworld.org/
Apr. 16-19, 2009
COMMERICAL LAW LEAGUE OF AMERICA
2009 Chicago/Spring Meeting
Westin Hotel on Michigan Ave., Chicago, Ill.
Contact: (312) 781-2000; http://www.clla.org/
Apr. 17-18, 2009
NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES
NABT Spring Seminar
The Peabody, Orlando, Florida
Contact: http://www.nabt.com/
Apr. 20, 2009
AMERICAN BANKRUPTCY INSTITUTE
Consumer Bankruptcy Conference
John Adams Courthouse, Boston, Massachusetts
Contact: 1-703-739-0800; http://www.abiworld.org/
Apr. 27-28, 2009
TURNAROUND MANAGEMENT ASSOCIATION
Corporate Governance Meetings
Intercontinental Hotel, Chicago, Illinois
Contact: www.turnaround.org
Apr. 28-30, 2009
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
Intercontinental Hotel, Chicago, Illinois
Contact: www.turnaround.org
May 1, 2009
AMERICAN BANKRUPTCY INSTITUTE
Nuts and Bolts for Young Practitioners
Alexander Hamilton Custom House, New York City
Contact: 1-703-739-0800; http://www.abiworld.org/
May 4, 2009
AMERICAN BANKRUPTCY INSTITUTE
New York City Bankruptcy Conference
New York Marriott Marquis, New York City
Contact: 1-703-739-0800; http://www.abiworld.org/
May 7-8, 2009
RENASSANCE AMERICAN MANAGEMENT, INC.
6th Annual Conference on
Distressted Investing - Europe
The Le Meridien Piccadilly Hotel, London, U.K.
Contact: 1-903-595-3800 or
http://www.renaissanceamerican.com/
May 7-10, 2009
AMERICAN BANKRUPTCY INSTITUTE
27th Annual Spring Meeting
Gaylord National Resort & Convention Center
National Harbor, Maryland
Contact: http://www.abiworld.org/
May 12-15, 2009
AMERICAN BANKRUPTCY INSTITUTE
Litigation Skills Symposium
Tulane University, New Orleans, La.
Contact: http://www.abiworld.org/
May 14-16, 2009
ALI-ABA
Chapter 11 Business Reorganizations
Langham Hotel, Boston, Massachusetts
Contact: http://www.ali-aba.org
June 11-14, 2009
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa
Traverse City, Michigan
Contact: http://www.abiworld.org/
June 21-24, 2009
INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY &
BANKRUPTCY PROFESSIONALS
8th International World Congress
TBA
Contact: http://www.insol.org/
July 16-19, 2009
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Mt. Washington Inn
Bretton Woods, New Hampshire
Contact: http://www.abiworld.org/
July 29-Aug. 1, 2009
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Conference
The Westin Hilton Head Island Resort & Spa,
Hilton Head Island, S.C.
Contact: http://www.abiworld.org/
Aug. 6-8, 2009
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Conference
Hotel Hershey, Hershey, Pa.
Contact: http://www.abiworld.org/
Sept. 10-11, 2009
AMERICAN BANKRUPTCY INSTITUTE
Complex Financial Restructuring Program
Hyatt Regency Lake Tahoe, Incline Village, Nevada
Contact: http://www.abiworld.org/
Sept. 10-12, 2009
AMERICAN BANKRUPTCY INSTITUTE
17th Annual Southwest Bankruptcy Conference
Hyatt Regency Lake Tahoe, Incline Village, Nevada
Contact: http://www.abiworld.org/
Oct. 2, 2009
AMERICAN BANKRUPTCY INSTITUTE
ABI/GULC "Views from the Bench"
Georgetown University Law Center, Washington, D.C.
Contact: http://www.abiworld.org/
Oct. 5-9, 2009
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Desert Ridge, Phoenix, Arizona
Contact: 312-578-6900; http://www.turnaround.org/
Oct. 20, 2009
AMERICAN BANKRUPTCY INSTITUTE
NCBJ/ABI Educational Program
Paris Las Vegas, Las Vegas, Nev.
Contact: http://www.abiworld.org/
Dec. 3-5, 2009
AMERICAN BANKRUPTCY INSTITUTE
21st Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, California
Contact: 1-703-739-0800; http://www.abiworld.org/
Apr. 29-May 2, 2010
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
June 17-20, 2010
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa, Traverse City, Michigan
Contact: 1-703-739-0800; http://www.abiworld.org/
July 7-10, 2010
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Ocean Edge Resort, Brewster, Massachusetts
Contact: 1-703-739-0800; http://www.abiworld.org/
July 14-17, 2010
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Conference
The Ritz-Carlton Amelia Island, Amelia, Fla.
Contact: http://www.abiworld.org/
Aug. 5-7, 2010
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hyatt Regency Chesapeake Bay, Cambridge, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 4-8, 2010
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
JW Marriott Grande Lakes, Orlando, Florida
Contact: http://www.turnaround.org/
Dec. 2-4, 2010
AMERICAN BANKRUPTCY INSTITUTE
22nd Annual Winter Leadership Conference
Camelback Inn, Scottsdale, Arizona
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 31-Apr. 3, 2011
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
June 9-12, 2011
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa
Traverse City, Michigan
Contact: http://www.abiworld.org/
Dec. 1-3, 2011
AMERICAN BANKRUPTCY INSTITUTE
23rd Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, California
Contact: 1-703-739-0800; http://www.abiworld.org/
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via
e-mail to conferences@bankrupt.com are encouraged.
Last Updated: Jan. 5, 2009
*********
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.
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