/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090202.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, February 2, 2009, Vol. 13, No. 32 Headlines 146-148 CORTLANDT: Voluntary Chapter 11 Case Summary A.H. BELO: Bank Syndicate Extends Credit Facility to April 2011 ALERIS INTERNATIONAL: S&P Cuts Corporate Credit Rating to 'CCC-' AMERICAN INT'L: In Talks With Gov't on Backstopping of Assets AMERICAN INTERNATIONAL: SVP Disclosed Ownership of 2,970 Shares AMERICAN MEDIA: Bondholders Take 95% Stake; Debt Exchange Done AMERICAN MEDIA: Newspapers Hit By Revenue Declines, Recession ANIL MIGLANI: Voluntary Chapter 11 Case Summary ANTHONY TARTAGLIE: Voluntary Chapter 11 Case Summary APEX SILVER: Receives Notice of Delisting From NYSE ARG ENTERPRISES: Final DIP Hearing Scheduled Today ATA AIRLINES: Court to Set Confirmation Hearing Schedule ATA AIRLINES: To Get $500,000 Rent Payment From AirTan ATA AIRLINES: To Sell L1011 Aircraft to Barq for $1.55 Million ATMADJIAN DIAMOND: Voluntary Chapter 11 Case Summary BANC OF AMERICA: Fitch Downgrades Ratings on Two Classes to Low-B BANK OF AMERICA: Brian Moynihan Faces Compensation Questions BELO CORP: S&P Downgrades Corporate Credit Rating to 'BB-' BERNARD L. MADOFF: Banks to Transfer $535MM From Co.'s Accounts BERNARD L. MADOFF: Former Merrill Officials Invested in Co. BERNARD L. MADOFF: No Proof on Workers' Awareness of Fraud BERNARDO ORTIZ: Voluntary Chapter 11 Case Summary BHASIN ARVIND: Involuntary Chapter 11 Case Summary BIG WEST: S&P Withdraws 'D' Corporate Credit Ratings BROOKLYN CENTER: Case Summary & Four Largest Unsecured Creditors BONTEN MEDIA: Moody's Comments on Recent Bond Repurchase BROADSTRIPE LLC: U.S. Trustee Forms Six-Member Creditors Panel BRANSON DELI: Voluntary Chapter 11 Case Summary BURLINGTON COAT: S&P Keeps B- Corp. Credit Rating; Outlook Neg. CAJUN FITNESS: Voluntary Chapter 11 Case Summary CANADIAN TRUST: Restructuring Plan Fully Implemented CANADIAN TRUST: Bank of New York Mellon Appointed as ABCP Trustee CENTRAL ILLINOIS: Moody's Affirms 'Ba1' Issuer Ratings CENTURY ALUMINUM: $100 Mil. Offering Won't Affect Moody's Ratings CHEVROLET BUICK: Voluntary Chapter 11 Case Summary CINCINNATI BELL: Wells Fargo Discloses 7.21% Equity Stake CLEARWATER NATURAL: U.S. Trustee Forms 3-Member Creditors Panel COLONIAL BANK: Fitch Places, Not Affirms, 'F3' ST Deposits CONTECH LLC: Files for Chapter 11 Bankruptcy in Michigan CONTECH LLC: Case Summary & 20 Largest Unsecured Creditors COUNTRYWIDE HOME: Moody's Downgrades Ratings on 144 Tranches CPI PLASTICS: Selling Assets; Feb. 24 Deadline for Offers Set CRC HEALTH: Moody's Gives Negative Outlook; Affirms 'B2' Ratings CSC INVESTMENTS: Voluntary Chapter 11 Case Summary DAE AVIATION: Moody's Junks Probability of Default Rating DAVID MALTZ: Voluntary Chapter 11 Case Summary DONALD SHMALTZ: Voluntary Chapter 11 Case Summary DOUBLE JJ: Court Allows Bank to Foreclose on Firm DOVCOFAB LLC: Voluntary Chapter 11 Case Summary ENERLUME ENERGY: Paul Belliveau Discloses Ownership of Shares EVATONE INC: To Stop Optical Disc Manufacturing at Largo Facility FANNIE MAE: To Extend Eviction Suspension Through February 28 FANNIE MAE: Will Work With NACA to Prevent Foreclosures FIDELITY BANKERS: March 24 Hearing Set for Liquidating Plan FIRST DOMINION: March 24 Hearing Set to Approve Liquidating Plans FORD MOTOR: $5.9 Bil. Net Loss Won't Affect Moody's 'Caa3' Rating FORD MOTOR: Won't Help Visteon in Its Financial Problems FORD MOTOR: Plans to Draw Facility Won't Affect S&P's Junk Rating FOUNTAIN POWERBOATS: Receives Non-Compliance Notice From NYSE FREDDIE MAC: To Extends Eviction Suspension Through February 28 FREDDIE MAC: In Talks With NACA on Foreclosure Prevention Pact FULTON HOMES: Will Honor Home Warranties GATEHOUSE MEDIA: Seeks to Amend $1.195 Billion Credit Facility GATEHOUSE MEDIA: Settles Suit vs. New York Times GATEHOUSE MEDIA: Newspapers Hit By Revenue Declines, Recession GENERAL GROWTH: Forbearance on Two Loans Moved to March 15 GENERAL MOTORS: Bondholders May Get 20% of Firm's Equity GENERAL MOTORS: Seeks to Avoid Multibillion-Dollar Tax Burden GENERAL MOTORS: Secures $884 Million from US Treasury Department GLENN LEONARD: Voluntary Chapter 11 Case Summary GLOBAL AIRCRAFT: Files for Bankruptcy to Complete 363 Asset Sale GMAC COMMERCIAL: Fitch Downgrades Rating on $19 Mil. Notes to B- GOODY'S LLC: U.S. Trustee Forms Seven-Member Creditors Committee HAYES LEMMERZ: Gets Covenant Relief; Can't Say It Won't Default HEARST CORP: Unit Buys Ziff Davis Media's 1UP Digital HEARST CORPORATION: Newspapers Hit By Revenue Declines, Recession INDEPENDENT BANK: Moody's Downgrades Bank Strength Rating to 'D' INTELSTAT SUBSIDIARY: S&P Assigns Issue-Level Rating at 'BB-' INTERSTATE BAKERIES: Bid to Reject Trademark License Pact Opposed INTERSTATE BAKERIES: Exit Loan OK'd As Emergence Deadline Nears INTERSTATE BAKERIES: March 4 Hearing on Bid to Amend Schedules INTERSTATE BAKERIES: Settles $11,100,000 in EPA Claims JACKSON HOSPITALITY: Voluntary Chapter 11 Case Summary JERRY DONALDSON: Voluntary Chapter 11 Case Summary JOURNAL REGISTER: Newspapers Hit By Revenue Declines, Recession KATHY COX: Creditors Eye $1MM Prize Money for 3 Public Schools KELLY-RASCH: Voluntary Chapter 11 Case Summary KESCO DYNAMICS: Voluntary Chapter 11 Case Summary KESCO DYNAMICS: Sec. 341 Meeting on March 5 in Atlanta LANDRY'S RESTAURANTS: S&P Retains Negative Watch on Low-B Ratings LANDRY'S RESTAURANTS: S&P Retains Negative Watch on Low-B Ratings LAWRENCE WIEDEMANN: Voluntary Chapter 11 Case Summary LAWRENCE WIEDEMANN: Sec. 341 Meeting on March 2 in New Orleans LEE ENTERPRISES: Gets Feb. 6 Extension of Covenant Waiver LEE ENTERPRISES: Newspapers Hit By Revenue Declines, Recession LENNAR CORPORATION: Posts $1.1BB Net Loss for Year Ended Nov. 30 MAGNETBANK: Utah Bank Fails & FDIC to Pay All Insured Deposits MARVIN GARDENS: Voluntary Chapter 11 Case Summary MASONITE INT'L: Mum About Jan. 30 Expiration of Forbearance Pact MEDCAP HOLDING: Moody's Junks Rating on $32.380 Million Certs. METOKOTE CORPORATION: Moody's Downgrades Corporate Rating to 'B3' MIGENIX INC: Files Short Form Prospectus & Signs UTC Agreement MORGAN STANLEY: Fitch Affirms 'B-' Rating on $15.9 Mil. Class L MORRIS PUBLISHING: Taps Lazard Freres as Financial Adviser NATIONAL MESSAGING: To Hold Bulk Sale of Assets on February 16 NEW YORK TIMES: Newspapers Hit By Revenue Declines, Recession NEW YORK TIMES: Reports 10.8% Decrease in Q4 Revenues NEW YORK TIMES: Retains Goldman for Sale of Red Sox Stake NEW YORK TIMES: Settles Suit Filed by Gatehouse Media NEWCASTLE INVESTMENT: Gets Continued Listing Notice from NYSE NEXCEN BRANDS: BTMU Loan Amended; Interest on Class B Notes Cut NORANDA ALUMINUM: Power Outage Cues S&P's Rating Cut to 'CCC+' NORTEL NETWORKS: 4-Man Panel Named; Sec. 341 Meeting on Feb. 19 NORTEL NETWORKS: Court Okays Hiring of Epiq as Notice Agent NORTEL NETWORKS: Objections to Chapter 15 Petition Due Feb. 13 NORTEL NETWORKS: Seeks to Hire Morris Nichols as Delaware Counsel NOVADEL PHARMA: NYSE Alternext Extends Compliance Deadline OCALA NATIONAL: Florida Bank Fails & FDIC Named as Receiver OPPENHEIMER HOLDINGS: Moody's Lowers Corp. Family Rating to 'B2' ORLEANS HOMEBUILDERS: Gets Feb. 6 Waiver Under Credit Facility OSHKOSH CORPORATION: Moody's Lowers Corp. Family Rating to 'B2' OSHKOSH CORP: S&P Downgrades Corporate Credit Rating to 'B' PAETEC HOLDING: Wayzata Discloses 8.6% Equity Stake PARADISE BUSINESS: Voluntary Chapter 11 Case Summary PFF BANCORP: Tontine Financial, et. al. Disclose No Equity Stake PHENIX CFO: Moody's Downgrades Ratings on Debt Instruments PHH ALTERNATIVE: Moody's Downgrades Ratings on 34 Tranches PILGRIM'S PRIDE: Seeks to Hire Gardere Wynne as Counsel PILGRIM'S PRIDE: Court OKs Lazard Employment as Investment Banker PILGRIM'S PRIDE: Gets Court Okay to Hire Kurtzman as Claims Agent PILGRIM'S PRIDE: Proposes Securities Trading Protocol PITTSBURGH CORNING: Files Modified 3rd Amended Bankruptcy Plan PITTSBURGH CORNING: Comments on Filing of Amended Bankruptcy Plan PNL PUBLICATIONS: Voluntary Chapter 11 Case Summary PONTIAC MICHIGAN: Fitch Takes Rating Actions on Securities PROPEX INC: Gets Interim OK to Borrow Up to $30-Mil. From Wayzata PROPEX INC: Drops Bid for Extension of Solicitation Period QTC MANAGEMENT: S&P Downgrades Corporate Credit Rating to 'B' RADNET MANAGEMENT: S&P Gives Stable Outlook; Holds 'B' Rating RANDY'S EXPRESS: Voluntary Chapter 11 Case Summary RD MOTORS: Voluntary Chapter 11 Case Summary RED HAT: S&P Raises Corporate Credit Rating to 'BB' from 'BB-' RENEW ENERGY: Case Summary & 25 Largest Unsecured Creditors RICHMOND'S ENTERPRISE: Voluntary Chapter 11 Case Summary RICKY DEJAGER: Voluntary Chapter 11 Case Summary RISKMETRICS GROUP: Moody's Affirms 'Ba3' Corp. Family Rating RITE AID: Renews Receivables Financing Deal Until January 2010 RYLAND GROUP: Signs 4th Amendment to Credit Pact With JPMorgan RYLAND GROUP: Posts $396,585,000 Net Loss for Year Ended Dec. 31 SEMGROUP LP: Seeks June 17 Extension of Removal Periods SEMGROUP LP: SemCap Unit Seeks May 20 Lease Disposition Deadline SEMGROUP LP: Creditors Panel May Hire Cole Schotz as Co-Counsel SEMGROUP LP: Creditors Panel May Hire Ogilvy as Canadian Counsel SINCLAIR BROADCAST: Moody's Cuts Corporate Family Rating to 'B1' SMURFIT-STONE: Calpine Corrugated Can Use Cash Collateral SMURFIT-STONE: Gets Court Okay to Hire Epiq as Claims Agent SMURFIT-STONE: Gets Green Light to Borrow $550 Mil. From JPMorgan SMURFIT-STONE: Gets Interim Approval to Use Lenders' Collateral SPARTANS INC: Has Two Prospective Buyers for Nashua Headquarters SPHERIS INC: S&P Withdraws 'B-' Corporate Credit Rating SPRINT NEXTEL: Gets Go-Signal to End Services to Tweeter Opco ST. ANN HOSPICE: Voluntary Chapter 11 Case Summary STATION CASINOS: May File for Bankruptcy Protection STEPHEN ANDO: Voluntary Chapter 11 Case Summary SUBURBAN FEDERAL: Maryland Bank Fails & FDIC Named Receiver SUN-TIMES MEDIA: Arbitrator Awards CN$51-Mil. to CanWest SUN-TIMES MEDIA: Board Elects Graham W. Savage as Director SUN-TIMES MEDIA: Davidson Kempner Wins Control of Board SYNCORA GUARANTEE: S&P Downgrades Issuer Credit Rating to 'CC' SYRACUSE FUNDING: Moody's Junks Ratings on EUR6.438 Mil. Notes TAURINO SERVICES: Voluntary Chapter 11 Case Summary TELETOUCH COMMUNICATIONS: Signs Retailer Pact With T-Mobile USA THOMAS RICKS: Case Summary & Five Largest Unsecured Creditors THREE RIVERS: Voluntary Chapter 11 Case Summary TWEETER OPCO: Court Directs Wells Fargo to Release Funds TWEETER OPCO: Court Permits Nextel to Terminate Services TWEETER OPCO: Trustee May Retain Dilworth as Bankruptcy Counsel TWEETER OPCO: Trustee Seeks to Hire Miller Coffey as Accountants UNISYS CORP: Fitch Junks Issuer Default Rating from 'BB-' UNITED COMPONENTS: S&P Downgrades Corporate Credit Rating to 'B-' UNTHINKABLE INC: Files for Chapter 11 Bankruptcy Protection US SHIPPING: Gets Feb. 10 Extension for Waivers to Credit Pact US SHIPPING: S&P Withdraws 'D' Corporate Credit Rating USG CORP: S&P Downgrades Corporate Credit Rating to 'B+' VARGAS REALTY: Case Summary & 10 Largest Unsecured Creditors VENOM INC.: Voluntary Chapter 11 Case Summary VISTEON CORP: Ford Won't Help Former Unit Solve Financial Problems VITRO SAB: Will Miss US$44.8MM in Interest Payments This Week WASHINGTON MUTUAL: Seeks April 24 Extension of Exclusive Periods WASHINGTON MUTUAL: Seeks March 10 Extension to Decide on Leases WASHINGTON MUTUAL: To Sell FTV Investments to IVF for $3.2MM WASHINGTON MUTUAL: US Trustee, JPMorgan React to Bar Date Request WAYNE MCGEE: Voluntary Chapter 11 Case Summary WELLMAN INC: Emerges From Bankruptcy; Becomes Private Company WISONSIN STEEL: Voluntary Chapter 11 Case Summary YRC WORLDWIDE: Completes First Phase of Financing Transaction ZIFF DAVIS: Sells 1UP Digital to Hearst Corp. Unit * Federal Reserve Develops Policy to Modify Mortgages * Newspaper Industry Hit By Revenue Declines, Recession * BOND PRICING: For the Week of Jan. 26 - Jan. 30, 2009 ********* 146-148 CORTLANDT: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: 146-148 Cortlandt Street LLC 139 Cortlandt Street Sleepy Hollow, NY 10591 Bankruptcy Case No.: 09-22104 Chapter 11 Petition Date: January 23, 2009 Court: United States Bankruptcy Court Southern District of New York (White Plains) Judge: Adlai S. Hardin Jr. Debtor's Counsel: George W. Echevarria, Esq. 100 Executive Boulevard Ossining, NY 10562 Tel: (914) 923-3600 Fax: (914)923-2556 Email: gwechevarr@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of 20 largest unsecured creditors. The petition was signed by Cirilo Rodriguez, Managing Member of the company. A.H. BELO: Bank Syndicate Extends Credit Facility to April 2011 --------------------------------------------------------------- Newspaper publisher A. H. Belo Corporation (NYSE: AHC) said that its bank syndicate has approved an amendment to the Company's revolving credit facility. The amendment is effective January 30, 2009 and extends the maturity of the credit facility through April 30, 2011. The amended $50 million facility, which is subject to a borrowing base, provides the necessary working capital flexibility required to navigate through the current economic environment. Among other things, the amendment: * Creates an asset-based revolving credit facility secured by all personal property assets of the company and its active subsidiaries and certain specified real property * Establishes minimum quarterly adjusted EBITDA covenant requirements in 2009 and a fixed charge coverage ratio covenant in 2010 of 1.0 to 1.0 * Allows capital expenditures and investments of up to $16.0 million per year (in total) * Allows A. H. Belo to pay dividends when the company's fixed charge coverage ratio exceeds 1.2 to 1.0 and the aggregate availability under the credit facility exceeds $15.0 million * Sets pricing at LIBOR plus a spread of 375 basis points * Contains other covenants including limitations on indebtedness, liens, and asset sales "A. H. Belo is focused on expense management and streamlining processes to operate more profitably," said Robert W. Decherd, chairman, president and Chief Executive Officer. "Given current trends in advertising revenues we are reviewing all facets of our operations with the goal of reducing costs whenever possible. This work does not occur overnight and I believe the amendment to our credit facility provides adequate financial flexibility and the necessary runway for A. H. Belo to realign its operations." About A. H. Belo A. H. Belo Corporation (NYSE: AHC) headquartered in Dallas, Texas, is a distinguished newspaper publishing and local news and information company that owns and operates four daily newspapers and a diverse group of Web sites. A. H. Belo publishes The Dallas Morning News, Texas' leading newspaper and winner of eight Pulitzer Prizes since 1986; The Providence Journal, the oldest continuously-published daily newspaper in the U.S. and winner of four Pulitzer Prizes; The Press-Enterprise (Riverside, CA), serving southern California's Inland Empire region and winner of one Pulitzer Prize; and the Denton Record-Chronicle. The company publishes various specialty publications targeting niche audiences, young adults and the fast-growing Hispanic market. The Company's partnerships and/or investments include the Yahoo! Newspaper Consortium and Classified Ventures, owner of cars.com. A. H. Belo also owns direct mail and commercial printing businesses. Additional information is available at http://www.ahbelo.com/ ALERIS INTERNATIONAL: S&P Cuts Corporate Credit Rating to 'CCC-' ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its ratings including its corporate credit rating on Beachwood, Ohio- based Aleris International Inc. to 'CCC-' from 'CCC+'. The rating remains on CreditWatch with negative implications, where it was placed Nov. 12, 2008. "The downgrade reflects the combination of very weak end-market demand and low aluminum prices, a trend S&P expects to continue in the near term, given the weak U.S. economy and low level of construction activity," said Standard & Poor's credit analyst Maurice Austin. As a result, the borrowing base governing its asset-based credit facility has likely decreased as volumes have continued to decline. This, combined with the voluntarily reduction in the size of its ABL by $250.0 million in late 2008, significantly reduces the company's already strained liquidity position during a period of market uncertainty. The continued CreditWatch listing reflects S&P's concern that, absent improved market conditions, Aleris' liquidity will continue to erode, necessitating incremental capital in order for management to fund its ongoing obligations. AMERICAN INT'L: In Talks With Gov't on Backstopping of Assets ------------------------------------------------------------- Liam Pleven at The Wall Street Journal reports that American International Group Inc. is in talks with the government about backstopping some of its troubled assets. WSJ quoted AIG vice chairperson Paula Reynolds as saying, "We're looking at a broader array of recapitalization options. We both realize that the environment's changing and we have to adjust to that environment." WSJ relates that the backstopping of assets would be similar to government guarantees on Citigroup Inc.'s troubled assets. This could lessen some of the pressure on AIG from distressed assets still on its books and the government wouldn't have to lay out as much money upfront, the report says. The government has bought AIG assets rather than backstopped them, according to the report. According to WSJ, AIG is considering selling units through initial public offerings. Citing Ms. Reynolds, WSJ states that AIG could adjust its roster of units for sale. "We might sell some things that aren't for sale, and we might not sell some things that are for sale," the report quoted her as saying. The Government Accountability Office, according to WSJ, said that it has started a study to "assess any impact of the assistance to AIG on insurance markets and to determine, to the extent possible, whether the rescue package has achieved its desired goals." The study was launched as requested by two members of the Congress, who said that "there have been troubling reports that market distortions may be occurring in the commercial property casualty market" due to government federal aid. An AIG spokesperson said that the firm will cooperate with the study, WSJ relates. AIG Appoints Anastasia Kelly as Vice Chairperson AIG has named Anastasia D. Kelly -- the company's AIG Executive Vice President, General Counsel and Senior Regulatory, and Compliance Officer -- has been named Vice Chairperson, reporting to AIG Chairperson and CEO Edward J. Liddy. Ms. Kelly assumes responsibility for the Communications, Corporate Affairs and Human Resources functions, in addition to her present responsibilities for Global Legal, Compliance, and Regulatory matters. Mr. Liddy said, "With the alignment of policy functions under Stasia's leadership and the recent organization of administrative functions under Vice Chairman Richard Booth and asset disposition functions under Vice Chairman Paula Reynolds AIG's corporate activities are better positioned to achieve our goals of repaying American taxpayers and restoring AIG's financial health." Ms. Kelly joined AIG in September 2006. She was previously Executive Vice President and General Counsel of MCI/WorldCom, where she served as the chief legal officer from 2003 until MCI/WorldCom's merger with Verizon early in 2006. Before that, Stasia served as General Counsel of Sears, Roebuck and Fannie Mae, and was a partner at Wilmer Hale in Washington, D.C. 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 INTERNATIONAL: SVP Disclosed Ownership of 2,970 Shares --------------------------------------------------------------- Monika M. Machon, senior vice president of American International Group Inc. disclosed in a Form 3 filing with the Securities and Exchange Commission that she may be deemed to directly own 2,970 shares of the company's common stock. As Troubled Company Reporter on Jan. 21, 2009, AIG has named Ms. Machon as SVP and chief investment officer, responsible for insurance company portfolio management across all asset classes, succeeding Win J. Neuger. Ms. Machon also disclosed direct ownership of the company's other securities. Title of Derivative Security Number of Shares ---------------------------- ---------------- Restricted Stock Unit 500 Restricted Stock Unit 2,910 Restricted Stock Unit 4,207 Restricted Stock Unit 1,500 Restricted Stock Unit 1,200 Stock Option (Right to Buy) 1,000 Stock Option (Right to Buy) 1,750 Stock Option (Right to Buy) 300 Stock Option (Right to Buy) 1,000 Stock Option (Right to Buy) 1,250 Stock Option (Right to Buy) 1,750 Stock Option (Right to Buy) 500 Stock Option (Right to Buy) 400 As of Oct. 31, 2008, there were 2,689,938,313 shares outstanding of the company's common stock. A full-text copy of the Form 3 filing is available for free at: http://ResearchArchives.com/t/s?38c7 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 MEDIA: Bondholders Take 95% Stake; Debt Exchange Done -------------------------------------------------------------- American Media Inc.'s operating subsidiary, American Media Operations, Inc., said Feb. 1 that it had completed its financial restructuring with the successful completion of the cash tender offers for its outstanding senior subordinated notes and receipt of requisite consents in the related consent solicitations in respect of an aggregate of approximately $570 million of its outstanding senior subordinated notes, consisting of (1) $414,544,000 aggregate principal amount of 10 1/4% Series B Senior Subordinated Notes due 2009 and (2) $155,454,000 aggregate principal amount of 8 7/8% Senior Subordinated Notes due 2011. The Tender Offer and Consent Solicitation expired at 8:00 a.m., New York City time, on January 29, 2009. Approximately 96.6% of the 2009 Notes and 95.2% of the 2011 Notes were validly tendered and accepted for payment and consents were delivered with respect to all such Existing Notes. Holders who tendered 2009 Notes received total consideration equal to $807.56 for each $1,000 principal amount of 2009 Notes validly tendered and not validly withdrawn. Holders who tendered 2011 Notes received total consideration equal to $756.32 for each $1,000 principal amount of 2011 Notes validly tendered and not validly withdrawn. AMOI also received the requisite consents in the related Consent Solicitations in order to execute and deliver the supplemental indentures to effect the proposed amendments to the Existing Notes and the indentures pursuant to which the Existing Notes were issued. AMOI also completed its private placement of $21,245,380 of 9% Senior PIK Notes due 2013 and $300,000,000 of 14% Senior Subordinated Notes due 2013, and its parent, AMI, completed its offering of 5,694,480 shares of its common stock. With the successful completion of these transactions, AMOI's bondholders now own 95% of AMI's common stock, and AMI's debt has been reduced by $227.2 million. AMOI Chairman and CEO David J. Pecker said, "This is a major step forward for American Media. We now have the capital structure in place to strategically, financially and operationally fully realize the potential of our brands. We will continue to balance our future investments with a disciplined financial mindset to maximize the return for our company." J.P. Morgan Securities Inc. was the dealer manager for the Tender Offers and solicitation agent for the Consent Solicitations and can be contacted at (212) 357-0775 (collect). MacKenzie Partners, Inc. acted as the information agent and tabulation agent, and may be contacted at (800) 322-2885 (toll free) and (212) 929-5500 (collect). About American Media American Media, Inc. is the leading publisher of celebrity journalism and health and fitness magazines in the U.S. These include Star, Shape, Men's Fitness, Fit Pregnancy, Natural Health, and The National Enquirer. In addition to print properties, AMI owns Distribution Services, Inc., the country's #1 in-store magazine merchandising company. AMERICAN MEDIA: Newspapers Hit By Revenue Declines, Recession ------------------------------------------------------------- Robert W. Decherd, president and chairman of A.H. Belo Corp., which publishes The Dallas Morning News, said in a Jan. 30 letter that the rapid deterioration in the U.S. economy has changed the nature and urgency of re-thinking the company's business model -- "just as every newspaper publisher and companies in virtually every American industry are compelled to do." The past two months saw the demise of two major players in the industry. Tribune Co., which own leading papers, including the Los Angeles Times and Chicago Tribune, etc., having collective paid circulation totaling 2.2 million copies daily and 3.3 million copies on Sundays, filed for bankruptcy on Dec. 8, 2008. While Tribune had a wide portfolio, which included television and radio broadcasting, the Internet, and other entertainment offering, including the Chicago Cubs baseball team, it blamed its bankruptcy filing on the unprecedented decline in the newspaper publishing industry, which decline exacerbated by the current recession. The Star Tribune newspaper, which has the highest daily circulation in the state of Minnesota, and 15th largest daily newspaper in the United States, sought bankruptcy protection on Jan. 15 due to its worsening financial conditions and its heavy debt burden. "The domestic newspaper industry has been crippled by an unprecedented and severe decline in advertising revenue," said The Star Tribune Company CFO David W. Montgomery, in a document explaining Star Tribune's bankruptcy filing. "While this decline has been occurring for several years, the decline has been accelerated and exacerbated by the recession and the dislocation of the credit markets." Aside from Star Tribune and Tribune Co., other newspaper owners have been hit by the decline in advertisement revenues although they have been able to avert bankruptcy filing, so far. Advertising, Circulation Down Comparing figures provided by the Audit Bureau of Circulations for six-month periods ending Sept. 30, 2008, and March 31, 2008, daily circulation for the top 30 newspapers in the U.S. are down 5.27%: Daily Circulation For Six Months Ended -------------------- 09/30/08 03/31/08 % Change -------- -------- -------- 1 USA Today 2,293,310 2,284,219 0.40% 2 The Wall Street Journal 2,011,999 2,069,463 -2.78% 3 The New York Times 1,000,665 1,077,256 -7.11% 4 Los Angeles Times 739,147 773,884 -4.49% 5 Daily News - New York, NY 632,595 703,137 -10.03% 6 New York Post 625,421 702,488 -10.97% 7 Washington Post 622,714 673,180 -7.50% 8 Chicago Tribune 516,032 541,663 -4.73% 9 Houston Chronicle 448,271 494,131 -9.28% 10 The Arizona Republic - Phoenix 413,332 413,332 0.00% 11 Newsday - Melville, NY 377,517 379,613 -0.55% 12 San Francisco Chronicle 339,430 370,345 -8.35% 13 Dallas Morning News 338,933 368,313 -7.98% 14 The Boston Globe 323,983 350,605 -7.59% 15 Star Tribune - Minneapolis, MN 322,360 345,130 -6.60% 16 The Star-Ledger - Newark, NJ 316,280 334,150 -5.35% 17 The Chicago Sun-Times 313,176 330,280 -5.18% 18 The Plain Dealer - Cleveland, OH 305,529 326,907 -6.54% 19 The Philadelphia Inquirer 300,674 322,362 -6.73% 20 Detroit Free Press 298,243 316,007 -5.62% 21 The Oregonian - Portland, OR 283,321 312,274 -9.27% 22 The Atlanta Journal-Constitution 274,999 308,944 -10.99% 23 The San Diego Union-Tribune 269,819 304,399 -11.36% 24 St. Petersburg Times 268,935 288,669 -6.84% 25 The Sacramento Bee 253,249 268,755 -5.77% 26 The Indianapolis Star 244,796 255,303 -4.12% 27 St. Louis Post-Dispatch 240,796 255,057 -5.59% 28 The Kansas City Star 239,358 252,785 -5.31% 29 The Orange County (CA) Register 236,270 250,724 -5.76% 30 The Mercury News - San Jose, CA 224,199 240,223 -6.67% -------- -------- ------ 15,075,353 15,913,598 -5.27% Mr. Montgomery, Star Tribune's CEO, said that with respect to the newspaper industry, print classified advertising dropped by more than 25% in the first half of 2008 alone, representing a $1.8 billion loss in revenue for domestic newspapers. The industry, he added, has suffered historic declines in circulation, which have not only resulted in decreased circulation revenue, but have also acted as a further catalyst for declines in advertising revenue. He noted that much of a newspaper's more profitable print advertising sales are tied to circulation, which advertisers use as a proxy for readership. As circulation has declined, newspapers have been compelled to charge less for these ads. Chandler Bigelow III, Tribune's senior vice president and chief financial officer, said that while the company's newspaper advertising revenue continues to be in line with other large metropolitan newspapers, newspaper advertising revenue generally is in significant decline, down industry-wide 15% to 20% in 2007 in major metropolitan markets, and down industry-wide nearly $2 billion, or 18%, in the third quarter of 2008. Gannett Co., Inc., which owns the U.S.'s most read newspaper, USA Today, and 84 other newspapers, said its publishing segment operating revenues were $1.4 billion for the quarter of 2008, compared with $1.7 billion in the fourth quarter of 2007, an 18.6% decline. Advertising revenues were $963.4 million compared with $1.2 billion in the fourth quarter of 2007. At USA TODAY, advertising revenues were 18.5% lower in the fourth quarter compared to the fourth quarter in 2007. Gannett said that its results were reflective of "unprecedented turmoil in the economies of both the U.S. and the UK and in the financial market", although the results of its broadcasting and digital segments were largely unchanged. New York Times Co. disclosed that in the fourth quarter of 2008 total revenues decreased 10.8% to $772.1 million, as advertising revenues decreased 17.6%. The New York Times publisher said revenues decreased mainly due to lower print advertising. "The disruptions of the global economy are affecting all businesses and industries, especially companies, such as ours, that generate a significant portion of their revenues from advertising," said Janet L. Robinson, NYT president and CEO. Cablevision Systems Corporation, which bought Newsday from Tribune Co. in July 2008, has yet to reveal its fourth quarter results on Feb. 23. It recorded $73,468,000 in revenues from its newspaper publishing group in three months ended Sept. 30, 2008. Other firms are scheduled to release their fourth quarter results on these dates: Company Earnings Release Date ------- -------------------- News Corporation 02/05/09 Washington Post Co. 02/25/09 Cablevision 02/23/09 A.H. Belo Corp. 02/17/09 Sun-Times Media Group 03/09/09 The McClatchy Company 02/05/09 Journal Register Co. 02/02/09 Gatehouse Media Inc. 03/09/09 American Media Inc. __/__/09 Firms that are privately held, like Hearst Corporation, owner of the San Francisco Chronicle, do not publicly disclose their financial results. Rising Internet Traffic Cutting Print Revenues Various reports say that newspaper revenues have been decreasing, as readers have shifted to the Web. According to Bloomberg, rising Internet use have hurt magazines and newspapers. While overall revenues fell, New York Times' Internet businesses, which include NYTimes.com, About.com, Boston.com and other company Web sites, increased 6.5% to $351.7 million in 2008 from $330.2 million in 2007, and Internet advertising revenues increased 9.3% to $308.8 million from $282.5 million. In total, Internet businesses accounted for 12.0% of the company's revenues in the fourth quarter versus 11.0% in the 2007 fourth quarter. Lee Enterprises Incorporated (NYSE: LEE), which runs 49 daily newspapers, including the St. Louis Post-Dispatch, said that Circulation revenues dropped 4.5% to $47.56 million. Combined print and online advertising revenue dropped 15.2% to $184.6 million, with retail advertising down 9.8%, and classified down 27.1%. More Writedowns While the Washington Post Co. (NYSE:WPO) has yet to reveal its quarterly results, it announced on Jan. 15 a regular quarterly dividend of $2.15 per share, payable on Feb. 6, 2009. On Jan. 23, Washington Post said it would take a $70 million impairment charge after concluding that the estimated fair value of its online lead generation business is less than its reported carrying value. Reuters notes that the Post is one of several U.S. newspaper publishers that have written down the value of their properties as advertising revenue shrinks. According to Reuters, The New York Times, Lee Enterprises (LEE.N) and McClatchy Co. (MNI.N) and other publishers have written down billions of dollars in the past several years. In fiscal 2008, Lee Enterprises recorded after-tax non-cash charges totaling $893.7 million to reduce the carrying value of goodwill, other assets and the company's investment in TNI Partners. On Jan. 28, American Media Operations, Inc., operating subsidiary of American Media Inc., leading publisher of celebrity journalism and health and fitness magazines in the U.S., said it is in the process of performing impairment testing of its tradenames and goodwill. AMOI expects to record impairment charges for its titles of between $200 million and $220 million with respect to certain of its tradenames and goodwill. Heavy Debt Burden, Liquidity Problems Aside from declining revenues, some of the newspaper publishers were highly leveraged, limiting their flexibility and ability to address liquidity constraints. At that time of its bankruptcy filing Tribune Co. owed $13 billion in total funded debt. Starting June 30, 2008, Star Tribune stopped making payments scheduled quarterly interest, which reached $20 million as of its bankruptcy petition in January 2009. While Star Tribune had $26.9 million in cash as of Dec. 31, 2008, its liabilities reached $661.1 million, including $392.5 million owed on its first lien debt and $96 million owed on its second loan debt, paling in comparison to assets of only $493.2 million. Lee Enterprises also is trying to renegotiate $306 million in debt that it assumed when it bought Pulitzer Inc. in 2005. Of that, $142.5 million is due in April and Lee's auditors have said Lee can't afford to pay it, the St. Louis Post-Dispatch said. GateHouse Media, Inc., which has 92 daily newspapers with total paid circulation of approximately 834,000, announced Jan. 28 that it is seeking to amend its $1.2 billion senior secured credit facility. The amendment would, among other things, allow the company to repurchase outstanding term loans under the facility at prices below par through a modified Dutch auction through December 31, 2011. The company is seeking the consent of the requisite lenders by 5:00 pm (Eastern Time) Monday, February 2, 2009, in order to effect the amendment American Media, publisher of celebrity journalism and health and fitness magazines including Star, Shape and the National Enquirer, made tender offers for $570 million of its outstanding senior subordinated notes, which comprise (i) $400,000,000 principal amount of 10.25% Series B Senior Subordinated Notes due 2009 and $14,544,000 aggregate principal amount of 10.25% Series B Senior Subordinated Notes due 2009, and (ii) $150,000,000 aggregate principal amount of 8 7/8% Senior Subordinated Notes due 2011 and $5,454,000 aggregate principal amount of 8 7/8% Senior Subordinated Notes due 2011. American Media, through its AMOI subsidiary will exchange those Notes with (a) $21,245,380 principal amount of 9% senior PIK notes due 2013, (b) $300,000,000 principal amount of the company's 14% senior subordinated notes due 2013, and (c) 5,700,000 shares of Media's common stock, representing 95% of American Media's outstanding shares of common stock. The offer expired Jan. 29. As of Jan. 9, AMOI has entered into agreements with holders of 81% of the outstanding aggregate principal amount of the 2009 Notes and 69% of the outstanding aggregate principal amount of the 2011 Notes. The tender offer conditioned upon, among other things, receipt of tenders and related consents by holders of at least 98% of each series of the Existing Notes. Pursuant to forbearance agreements, holders of the Existing Notes have agreed to forbear until 5:00 p.m., New York City time, on February 4, 2009, from exercising any remedies under the indentures governing the Existing Notes as a result of AMOI's. Sun-Times Media Group, Inc. (Pink Sheets: SUTM), which owns the Chicago Sun-Times, informed investors on Jan. 29 that an arbitrator has awarded CanWest Global Communications Corp., a Canadian media company, CN$51 million, exclusive of interest and costs, in connection with a dispute relating to CanWest's purchase of newspaper assets from Sun-Times Media in 2000. On Dec. 19, 2003, CanWest pursued arbitration, in connection with its claim that Sun-Times owed CN$84.0 million related to the transaction. As of Sept. 30, 2008, the company had a reserve established in respect of the arbitration in the amount of CN$15 million. A previously established escrow account funded by the company containing approximately CN$22 million may be available to pay any final arbitration award. The Chicago Tribune noted that as of Sept. 30, Sun-Times Media had cash of $99.8 million, but the company faces a number of tax and other liabilities. After a big write-down of intangible assets during the third quarter, Sun- Times' negative worth, or negative shareholder equity, widened to $321.7 million, the Chicago Tribune said. In Jan. 28, Washington Post said it's selling $400 million in fixed-rate notes at a price of 99.614% of par for an effective yield of 7.305% per annum. The ten-year notes will have a coupon of 7.25% per annum, payable semi-annually on February 1 and August 1, beginning August 1, 2009. The company intends to use the net proceeds from the sale of the notes to repay $400 million of notes that mature on February 15, 2009. Sale of Assets, Job Cuts to Stem Losses A.H. Belo's Mr. Decherd said in his Jan. 30 letter to employees that the decline in advertising revenues for the newspaper industry and all media persists, and that the key for the company is to generate and preserve cash. He stated that the company needs to reduce its workforce as the revenue trends do not support or require the same number of people the company has employed. The reduction will "probably be in the range of 500 jobs." He added that the company would suspend the A. H. Belo Savings Plan match and will cut reimbursements policies to employees. "Similarly, it is no longer reasonable for the Company to provide free parking in downtown Dallas," he said. A monthly charge of $40 will take effect May 1, 2009 for all downtown Dallas surface lots owned by the company. On Jan. 9, Hearst Corp. announced that it is offering for sale the Seattle Post-Intelligencer and its interest in a joint operating agreement under which the P-I and The Seattle Times are published. Hearst said that should a sale not occur within 60 days, it will pursue options, "including a move to a digital-only operation with a greatly reduced staff or a complete shutdown of all operations." "In no case will Hearst continue to publish the P-I in printed form following the conclusion of this process." The P-I, which Hearst has owned since 1921, has had operating losses since 2000. The P-I lost approximately $14 million in 2008 and its forecast anticipates a greater loss in 2009. Hearst also denied speculations it is interested in acquiring The Seattle Times. On Jan. 28, 2009, The New York Times Co., which also owns the International Herald Tribune and The Boston Globe, announced that it has retained Goldman, Sachs & Co. as its financial advisor to explore the possible sale of its 17.75% ownership interest in New England Sports Ventures, LLC. NESV owns the Boston Red Sox, Fenway Park and adjacent real estate, approximately 80 percent of New England Sports Network, the top rated regional cable sports network in the country delivered to more than four million homes throughout New England and nationally via satellite, and 50 percent of Roush Fenway Racing, a leading NASCAR team. Tribune Co., which is in the U.S. Bankruptcy Court for the District of Delaware to delever its balance sheet, is arranging the sale of its Chicago Cubs baseball team. Times Publishing Co., which publishes the St. Petersburg Times, one of the most respected regional newspapers in the U.S., is exploring the sale of Congressional Quarterly, Inc. Based in Washington, D.C., Congressional Quarterly publishes news and information on politics, public policy and legislative activity at the federal, state and local levels. The McClatchy Company, which has 30 daily newspapers, including The Miami Herald, The Sacramento Bee, and the Fort Worth Star- Telegram, said that it will suspend its quarterly dividend after paying the first quarter 2009 dividend for the foreseeable future in order to preserve cash for debt repayment. The first quarter 2009 dividend of nine cents per share is half the per share dividend paid in the 2008 first quarter. On Jan. 30, Editor & Publisher reported that the Journal Register Co. announced the sale of The Hershey (Pa.) Chronicle to The Sun in Hummelstown, Pa. On Jan. 7, Journal Register said it has signed an agreement with Central Connecticut Communications regarding a sale of The Bristol Press, The Herald of New Britain and The Sunday Herald Press from Journal Register Company. The sale includes the assets of the papers' web sites and of three nearby weeklies, the Wethersfield Post, the Newington Town Crier and the Rocky Hill Post. As of November 2008, JRC owned 22 daily newspapers and approximately 300 non-daily publications. Some Newspapers to Reach End According to a blog by Douglas A. McIntyre posted Jan. 11 at 24/7 Wall St., twelve major media brands are likely to close in 2009, as Journal Register and Gatehouse, and McClatchy have struggled. It noted that The Seattle Post-Intelligencer, Denver's Rocky Mountain News, The Miami Herald and the San Francisco Chronicle are on the block, and may be shut if no buyers emerge. The New York Daily News and The New York Observer are also at risk, according to the report. The United Press International Inc. reported Jan. 9 that Sun- Times Media said it would close 12 weekly newspapers to cut expenses as advertising revenues have fallen. The 12 suburban newspapers scheduled to close are part of 51 newspapers published by Pioneer Press, which the Sun-Times purchased in 1989. The newspapers, scheduled to fold Jan. 15, cover mostly the northwest suburbs of Chicago, Crain's Chicago Business reported Friday. According to CT Business Journal, Journal Register closed 16 newspapers in Connecticut in December. The papers affected include the Branford Review, Clinton Recorder, Hamden Chronicle, Milford Weekly, North Haven Post, Shelton Weekly, Stratford Bard, West Haven News, Wallingford Voice, East Haven Advertiser and others. Hanging In the Balance While Tribune Co., and Star Tribune have filed for bankruptcy, other newspaper publishers' fate are hanging in the balance. American Media's revolving facility, of which $60 million is outstanding and the term loan facility, of which $439.6 million is owed, both will mature on February 1, 2009 if the company has more than $25.0 million of the 10.25% Series B Senior Subordinated Notes due May 1, 2009 outstanding on February 1, 2009. According to Crain's New York, John Page, senior analyst at Moody's, said it was unclear what the banks would do with the company if an agreement couldn't be reached with bondholders. "It's a difficult environment to be selling assets," he said. In its form 10-Q for the third quarter of 2008, American Media Operations said if it is unable to extend or refinance the Notes, the 2006 Credit Agreement will likely mature early and the Company will not have sufficient funds to repay such indebtedness. "In such event, the Company may have to liquidate assets on unfavorable terms, or be unable to continue as a going concern, and incur additional costs associated with bankruptcy." Lee Enterprises' waiver of covenant conditions related to the $306 million Pulitzer Notes debt of its subsidiary St. Louis Post- Dispatch LLC expire Feb. 6, 2009. The Pulitzer Notes mature in April 2009. Lee says discussions with lenders continue. The struggles of the newspaper industry have also resulted to pulp- and paper-related bankruptcies. Paperboard and paper-based packaging Smurfit-Stone Corp., filed for Chapter 11 on Jan. 26, and Corp. Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Magazine printer, Quebecor World Inc., and pulp mill operator Pope & Talbot Inc., have also sought bankruptcy protection in Canada and the U.S. About American Media Headquartered in Boca Raton, Florida, American Media, Inc., is a publisher of celebrity journalism and health and fitness magazines in the U.S., including Star, Shape, Men's Fitness, Fit Pregnancy, Natural Health, and The National Enquirer. In addition to print properties, AMI owns Distribution Services, Inc., the country's number one in-store magazine merchandising company. ANIL MIGLANI: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Anil Miglani Shivani Miglani 10416 Shepherds Crook Court Potomac, MD 20854 Bankruptcy Case No.: 09-11128 Chapter 11 Petition Date: January 23, 2009 Court: United States Bankruptcy Court District of Maryland (Greenbelt) Debtor's Counsel: Michael Steven Fried, Esq. Air Rights Building 4550 Montgomery Avenue, Suite 710 North Bethesda, MD 20814 Tel: (301) 656-8525 Fax: (301) 656-8528 Email: mfried@friedlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mdb09-11128.pdf The petition was signed by Anil Miglani and Shivani Miglani. ANTHONY TARTAGLIE: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Anthony L. Tartaglia, Jr. 14538 Tamiami Trail North Port, FL 34287 Bankruptcy Case No.: 09-11349 Chapter 11 Petition Date: January 22, 2009 Court: United States Bankruptcy Court District of New Jersey (Newark) Debtor's Counsel: Vincent D. Commisa, Esq. 600 South Livingston Avenue, Suite 206 Livingston, NJ 07039-5415 Tel: (973) 533-1144 Total Assets: $2,241,150 Total Debts: $1,700,000 The Debtor did not file a list of its 20 largest unsecured creditors together with its petition. The petition was signed by Anthony L. Tartaglia, Jr. of the company. APEX SILVER: Receives Notice of Delisting From NYSE --------------------------------------------------- Apex Silver Mines Limited (NYSE Alternext US: SIL) has received notice from NYSE Alternext US LLC stating that: (i) the Company continues not to be in compliance with Section 1003(a)(iv) of the Company Guide in that it has sustained losses that are so substantial in relation to its overall operations or existing financial resources, or its financial condition has become so impaired that it appears questionable, in the opinion of the Exchange, as to whether it will be able to continue operations or meet its obligations as they mature; (ii) the Company has become subject to Section 1003(c)(iii) of the Company Guide which states that the Exchange will normally consider delisting securities whenever advice has been received, deemed by the Exchange to be authoritative, that the security is without value, and (iii) the Exchange intends to strike the ordinary shares of the Company from the Exchange by filing a delisting application with the Securities and Exchange Commission. The delisting application is expected to be filed on or after February 2, 2009. The Company does not expect that it will appeal the Exchange's decision to delist the ordinary shares. The Company anticipates that upon delisting of the ordinary shares, the ordinary shares will commence trading in the over-the- counter market. The delisting of the ordinary shares from the Exchange will not affect the Company's reporting obligations under the rules of the Securities and Exchange Commission. 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. The Debtors delivered to the Hon. James M. Peck a proposed joint Chapter 11 plan of reorganization and disclosure statement explaining the plan on Jan. 15, 2009. The Court will convene a hearing Feb. 4, 2009, at 2:00 p.m., to consider the adequacy of the disclosure statement explaining the plan. Hearing to consider confirmation of the Debtors' plan is set for March 4, 2009, at 2:00 p.m. ARG ENTERPRISES: Final DIP Hearing Scheduled Today -------------------------------------------------- ARG Enterprises Inc. and its affiliated debtors will present on Feb. 2, 2009, at 10:00 p.m., before the Hon. Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware for final approval of their request to obtain $71.5 million in debtor- in-possession financing under the postpetition financing senior secured superpriority credit agreement dated Jan. 16, 2009, with Pecus ARG Parallel LLC, as administrative and collateral agent. On Jan. 16, 2009, Judge Carey authorized the Debtors to access $12 million in postpetition financing on the interim basis. He also authorized the Debtors to use cash collateral to secure repayment of secured loans to the lenders. Summary of certain significant terms and condition of the DIP credit agreement: Maximum Credit: $71.5 million total commitment: approximately $4.836 million to fund Agreed Budget expenses in excess of cash flow; approximately $2.125 million to fund DIP facility expenses and prepetition term and revolver interest; approximately $13.245 million to fund letter of credit obligations; approximately $41.696 million in rolled-up prepetition obligations; and the remainder for future borrowings as a reserve. Interim Credit: $12.0 million maximum credit to be extended to the debtors from the Court's entry of the interim order through entry of the final order. Interest Rate: 10% Default Rate: 12% Fees: closing fee of $100,000; termination fee of $100,000; commitment fee, due on the first day of each month during the term of the DIP credit agreement, of 0.5% per annum on the average daily unused amount of the commitment availability. Maturity Date: The earliest of (a) March 17, 2009, (b) 30 days after the entry of the interim order if the final order has not been entered prior to the expiration of 30 day period, (c) the date on which the Court enters an order authorizing an alternative transaction, (d) the date on which all obligations become due as the result of an acceleration pursuant to Section 11.04, and (e) the substantial consummation of a plan of reorganization that is confirmed pursuant to an order entered by the Court in any of the Chapter 11 Cases. Use of Proceeds: Proceeds of the DIP loans will be used to pay for the operating expenses of the Debtors and other costs and expenses of administration of the Chapter 11 Cases in accordance with the agreed budget. Superpriority Claims: The DIP Lenders are granted allowed super- priority administrative claims, which claims will have priority in right of payment over any and all other obligations, liabilities and indebtedness of the Debtors. Carve-Out: $600,000 for Debtors' Professionals; $150,000 for committee professionals, reduced dollar- for-dollar by any payments actually made to the professionals. The DIP agreement contains customary and appropriate events of defaults. Failure to achieve any of these sale milestones constitutes an event of default: a) an order of the Bankruptcy Court in form and substance acceptable to Lenders (the "Bid Procedures Order") establishing the Bid Procedures entered on or before February 2,2009; b) (i) the holding of a hearing by the Court regarding the sale of all or substantially all of the assets of the Debtors in accordance with the bid procedures order and the asset purchase agreement by March 4, 2009 and (ii) an order of the Court, in form and substance acceptable to DIP lenders, evidencing the approval described in the foregoing clause entered before March 4, 2009; or c) the closing of the asset sale before March 17, 2009. Prepeptition Secured Debt The Debtors are obligated to Pecus ARG Main LLC and Pecus ARG Parallel LLC, as assignees of the lender parties to that certain credit agreement dated July 11, 2005, between Wells Fargo Foothill Inc., as arranger and administrative agent, and American Restaurant Group Inc. As of their bankruptcy filing, about $53.1 million was outstanding under the prepetition credit agreement composed of: i) a $17.9 million in advances under a revolving credit facility; ii) a $20.0 million under a term B loan, approximately $10.5 million of overadvances; and iii) a $4.7 million of accrued, unpaid and capitalized interest and fees. In addition, approximately $13.2 million has been reserved for outstanding letters of credit issued under the revolver. Under the agreement, the prepetition obligations are secured by substantially all of the Debtors' assets. A full-text copy of the senior secured superpriority credit agreement dated Jan. 16, 2009, is available for free at: http://ResearchArchives.com/t/s?38f3 A full-text copy of the DIP budget is available for free at: http://ResearchArchives.com/t/s?38f3 About ARG Enterprises Headquartered in Philadelphia, Pennsylvania, ARG Enterprises Inc. -- http://www.argenterprises.com-- owns and operates the Black Angus Steakhouse chain of casual steakhouse restaurants, which specialize in 100% all-natural Black Angus steak and prime rib. The Debtors have 69 restaurants located in seven western states: Alaska, Arizona, California, Hawaii, New Mexico, Nevada and Washington. The Company and two of its affiliates filed for Chapter 11 petition on Jan. 15, 2009 (Bankr. D. Del. Lead Case No. 09-10171). Adam G. Landis, Esq., Kerri K. Mumford, Esq., and Landon Ellis, Esq., at Landis Rath & Cobb LLP, represent the Debtors in their restructuring efforts. The Debtors proposed CRG Partners Group LLC as their restructuring advisor; KPMG Corporate Finance LLC and KPMG CF Realty LLC as special real estate advisors; and Kurtzman Carson Consultants LLC as claims and noticing agent. The U.S. Trustee for Region 3 has not appointed creditors to serve on an Official Committee of Unsecured Creditors for the Debtors' Chapter 11 cases. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million each. ATA AIRLINES: Court to Set Confirmation Hearing Schedule -------------------------------------------------------- Judge Basil Lorch III of the United States Bankruptcy Court for the Southern District of Indiana will set and notify counsel for ATA Airlines Inc. of the confirmation hearing date with respect to its Chapter 11 Plan of Reorganization, discloses a minute entry/order filed in Court. Judge Lorch approved the disclosure statement explaining ATA's Plan, as per modifications as stated on the record, at a hearing held January 12, 2009. The Court held that the Disclosure Statement contains adequate information that would help holders of claims and equity interests make an informed judgment about the airline's Plan. At the confirmation hearing, the Court will consider approval of ATA's Plan which provides for the global settlement of claims among the airline, the Creditors Committee, Global Aero Logistics, Jefferies Finance, JPMorgan Chase Bank, five labor unions representing the airline's employees, and non-unionized employees. The Plan also provides for ATA's reorganization pursuant to the issuance of the membership interest in the reorganized company to Southwest Airlines Co. Under the Plan, ATA Airlines proposes to pay unsecured creditors about 1.3 percent of their claims totaling almost $420 million while it proposed to pay secured creditors about 13.9 percent of their claims totaling $365 million. Secured creditors agreed to share proceeds from potential lawsuits against suppliers that could yield as much as $12.2 million in damages under the proposed plan. ATA Airlines filed its proposed plan barely two weeks after the Court approved the bid proposal of Southwest Airlines to purchase its assets, including its takeoff and landing slots at LaGuardia Airport in New York, for $7.5 million. The sale can't go through until a final plan is approved by the Court. Southwest Airlines' bid proposal requires ATA Airlines to have its Chapter 11 plan confirmed by the Court by March 2, 2009. Meanwhile, ATA Airlines has said that it obtained permission from its secured lenders to use their cash collateral until April 10 or the effective date of its chapter 11 plan. About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., was a diversified passenger airline operating in two principal business lines -- a low cost carrier providing scheduled passenger service that leverages a code share agreement with Southwest Airlines; and a charter operator that focused primarily on providing charter service to the U.S. government and military. ATA is a wholly owned subsidiary of New ATA Acquisition, Inc. -- a wholly owned subsidiary of New ATA Investment, Inc., which in turn, is a wholly owned subsidiary of Global Aero Logistics Inc. ATA Acquisition also owns another holding company subsidiary, World Air Holdings, Inc., which it acquired through merger on Aug. 14, 2007. World Air Holdings owns and operates two other airlines, North American Airlines and World Airways. ATA Airlines and its affiliates filed for Chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). The Honorable Basil H. Lorch III confirmed the Debtors' plan of reorganization on Jan. 31, 2006. The Debtors' emerged from bankruptcy on Feb. 28, 2006. Global Aero Logistics acquired certain of ATA's operations after its first bankruptcy. The remaining ATA affiliates that were not substantively consolidated in the company's first bankruptcy case were sold or otherwise liquidated. ATA Airlines filed for Chapter 22 on April 2, 2008 (Bankr. S.D. Ind. Case No. 08-03675), citing the unexpected cancellation of a key contract for ATA's military charter business, which made it impossible for ATA to obtain additional capital to sustain its operations or restructure the business. ATA discontinued all operations subsequent to the bankruptcy filing. ATA's Chapter 22 bankruptcy petition lists assets and liabilities each in the range of $100 million to $500 million. The Debtor is represented in its Chapter 22 case by Haynes and Boone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel. The United States Trustee for Region 10 appointed five members to the Official Committee of Unsecured Creditors. Otterbourg, Steindler, Houston & Rosen, P.C., serves as bankruptcy counsel to the Committee. FTI Consulting, Inc., acts as the panel's financial advisors. The Court gave ATA Airlines Inc. until Feb. 26, 2009, to file its Chapter 11 plan and April 27, 2009, to solicit acceptances of that plan. ATA Airlines submitted to the Court its Chapter 11 Plan of Reorganization and accompanying Disclosure Statement on Dec. 12, 2008, two weeks after it completed the sale of its key assets to Southwest Airlines Inc. Bankruptcy Creditors' Service, Inc., publishes ATA Airlines Bankruptcy News. The newsletter tracks the chapter 11 case of ATA Airlines, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) ATA AIRLINES: To Get $500,000 Rent Payment From AirTan ------------------------------------------------------ ATA Airlines Inc. and AirTran Airways Inc. ask the U.S. Bankruptcy Court for the Southern District of Indiana to approve their settlement agreement requiring AirTran to pay the rent due under their lease contracts. Under the deal, AirTran is only required to pay $500,000 out of the $770,400, which it incurred from leasing 12 of ATA Airlines' take-off and landing slots at LaGuardia Airport in New York. The companies also agreed to release each other from all claims under the lease contracts, which will terminate immediately after ATA Airlines receives the payment. The companies reached the settlement in light of the impending sale of ATA Airlines' business to Southwest Airlines Co. The 12 slots in LaGuardia Airport are among the assets comprising the airline's business that will be sold to Southwest Airlines as part of the transaction. Goodyear Deal Meanwhile, the Court approved a settlement agreement between ATA Airlines Inc. and its supplier The Goodyear Tire & Rubber Company. The Court authorized ATA Airlines to pay Goodyear $340,000 from the $1.5 million worth of proceeds that the airline generated from the sale of wheel assemblies. The payment serves as full settlement of claims that Goodyear may assert against the airline. ATA Airlines is also authorized to transfer to its general operating account the remaining funds after the payment. Airliance Deal ATA Airlines also obtained Court approval of its agreement with Airliance Materials LLC, to settle their dispute over the ownership of certain DC-10 spare parts. Under the settlement, ATA Airlines agreed to return to Airliance Materials the inventory of spare parts which Airliance provided to the airline prior to its bankruptcy. ATA Airlines also agreed to pay $65,000 to Airliance Materials on account of its mechanics' lien claim on 139 spare parts that it received from the bankrupt company for repair. In exchange, Airliance Materials will return the 139 spare parts to ATA Airlines and will waive its contingent claim of $563,000 for the estimated value of the inventory, after the airline fulfills its obligations under the settlement deal. Airliance Materials also agreed to "recharacterize" its statutory secured claim of $84,148 for unpaid services to a general unsecured claim. Repair Costs ATA Airlines also seeks permission to pay claims of companies from where it tapped repair services for its equipment prior to the bankruptcy filing. A list of the companies, equipment and claims sought to be paid is available for free at: http://bankrupt.com/misc/ATARepairCost.pdf The airlines says it intends to sell the equipment at an auction and want them returned by the companies contemporaneously with the payment of their claims. It says the sum owing to the companies is far lower than the total proceeds the airline may generate from the sale of the equipment. "The [companies] have mechanic lien claims on the equipment that would have to be satisfied from the proceeds of any sale of the equipment," ATA Airlines says. It further notes that the proposed payment would not change the priority or the amount payable to its creditors but just the timing of payment to the companies and, therefore, would not "prejudice" any of its creditors. About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., was a diversified passenger airline operating in two principal business lines -- a low cost carrier providing scheduled passenger service that leverages a code share agreement with Southwest Airlines; and a charter operator that focused primarily on providing charter service to the U.S. government and military. ATA is a wholly owned subsidiary of New ATA Acquisition, Inc. -- a wholly owned subsidiary of New ATA Investment, Inc., which in turn, is a wholly owned subsidiary of Global Aero Logistics Inc. ATA Acquisition also owns another holding company subsidiary, World Air Holdings, Inc., which it acquired through merger on Aug. 14, 2007. World Air Holdings owns and operates two other airlines, North American Airlines and World Airways. ATA Airlines and its affiliates filed for Chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). The Honorable Basil H. Lorch III confirmed the Debtors' plan of reorganization on Jan. 31, 2006. The Debtors' emerged from bankruptcy on Feb. 28, 2006. Global Aero Logistics acquired certain of ATA's operations after its first bankruptcy. The remaining ATA affiliates that were not substantively consolidated in the company's first bankruptcy case were sold or otherwise liquidated. ATA Airlines filed for Chapter 22 on April 2, 2008 (Bankr. S.D. Ind. Case No. 08-03675), citing the unexpected cancellation of a key contract for ATA's military charter business, which made it impossible for ATA to obtain additional capital to sustain its operations or restructure the business. ATA discontinued all operations subsequent to the bankruptcy filing. ATA's Chapter 22 bankruptcy petition lists assets and liabilities each in the range of $100 million to $500 million. The Debtor is represented in its Chapter 22 case by Haynes and Boone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel. The United States Trustee for Region 10 appointed five members to the Official Committee of Unsecured Creditors. Otterbourg, Steindler, Houston & Rosen, P.C., serves as bankruptcy counsel to the Committee. FTI Consulting, Inc., acts as the panel's financial advisors. The Court gave ATA Airlines Inc. until Feb. 26, 2009, to file its Chapter 11 plan and April 27, 2009, to solicit acceptances of that plan. ATA Airlines submitted to the Court its Chapter 11 Plan of Reorganization and accompanying Disclosure Statement on Dec. 12, 2008, two weeks after it completed the sale of its key assets to Southwest Airlines Inc. Bankruptcy Creditors' Service, Inc., publishes ATA Airlines Bankruptcy News. The newsletter tracks the chapter 11 case of ATA Airlines, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) ATA AIRLINES: To Sell L1011 Aircraft to Barq for $1.55 Million -------------------------------------------------------------- ATA Airlines Inc. seeks permission from the U.S. Bankruptcy Court for the Southern District of Indiana to sell its aircraft to Barq Aviation for $1.55 million. ATA Airlines is selling its three remaining aircraft identified as Lockheed L1011-500 (Tail No. N162AT; Manufacturer's Serial No. 1220) for $250,000; Lockheed L1011-500 (Tail No. N163AT; Manufacturer's Serial No. 1229) for $500,000; and Lockheed L1011- 500 (Tail No. N164AT; Manufacturer's Serial No. 1238) for $800,000). The proposed sale came more than a month after ATA Airlines received bid proposals from Barq and another company to purchase the aircraft. The other bidder reportedly (i) offered a lower price and declined to match the offer of Barq, and (ii) did not post a deposit as required by the court-approved procedures implemented by ATA Airlines for the solicitation of bids for the aircraft. "The proposed sale is consistent with [ATA Airlines'] business judgment and is in the business interest of the bankruptcy estate and its creditors," Terry Hall, Esq., at Baker & Daniels LLP, in Indianapolis, Indiana, relates. Ms. Hall says the sale would be structured in a way to allow ATA Airlines to maintain operational control over one aircraft until the confirmation of its Chapter 11 plan, adding that it would enable the airline to maintain its airline operating certificate until the closing of the sale of its business to Southwest Airlines Co. Ms. Hall says, however, that ATA Airlines is still accepting bids for the aircraft to maximize the sale price, and that an auction will be conducted at the Jan. 28 hearing on the proposed sale if it receives bids from other interested buyers. Barq has already posted a deposit for $760,000, which will be credited against the amount payable to ATA Airlines at the closing of the sale. BofA, Victorville Object The proposed sale of the aircraft drew flak from Bank of America N.A. and Victorville Aerospace LLC, both of which allegedly hold liens on the aircraft. Bank of America says that ATA Airlines did not mention how much of the net sale proceeds it would earmark to pay its debt to the bank. As of January 23, the airline allegedly owes more than $728,000 to Bank of America on account of the loans that it availed from the bank. ATA Airlines offered as collateral its two aircraft -- L1011-500 (Tail No. N162AT) and Lockheed L1011- 500 (Tail No. N163AT) -- to secure its payment of the loans. Meanwhile, Victorville says it will not object to the proposed sale so long as its lien on the three aircraft is protected. Victorville asserts lien on the aircraft on account of the maintenance services it provided to ATA Airlines, which allegedly have not yet been paid. Victorville is allegedly owed about $407,594. Aircraft-Related Assets Sold to DSC The Court has authorized ATA Airlines to sell its aircraft-related assets to DSC Trading LLC for $94,800. The assets consist of expendable items that have not been sold by DSC Trading for the airline under their agreement signed way back in 2005. ATA Airlines signed the agreement to commission DSC Trading to sell the assets on consignment. Under the deal, DSC Trading will pay the assets in three equal installments of $31,600. It will also turn over to ATA Airlines $74,458 that it earned from similar items that were sold under their consignment agreement. The purchase price merely represents a recovery of about 3.5% of ATA Airlines' acquisition cost for the assets, which is lower than the 7.7% recovery it made when it sold similar items at an auction conducted by Starman Bros. Auctions Inc. The airline, however, does not expect getting a higher recovery from the sale of the assets through an auction, citing the inability of DSC Trading to sell the assets over the past year. About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., was a diversified passenger airline operating in two principal business lines -- a low cost carrier providing scheduled passenger service that leverages a code share agreement with Southwest Airlines; and a charter operator that focused primarily on providing charter service to the U.S. government and military. ATA is a wholly owned subsidiary of New ATA Acquisition, Inc. -- a wholly owned subsidiary of New ATA Investment, Inc., which in turn, is a wholly owned subsidiary of Global Aero Logistics Inc. ATA Acquisition also owns another holding company subsidiary, World Air Holdings, Inc., which it acquired through merger on Aug. 14, 2007. World Air Holdings owns and operates two other airlines, North American Airlines and World Airways. ATA Airlines and its affiliates filed for Chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). The Honorable Basil H. Lorch III confirmed the Debtors' plan of reorganization on Jan. 31, 2006. The Debtors' emerged from bankruptcy on Feb. 28, 2006. Global Aero Logistics acquired certain of ATA's operations after its first bankruptcy. The remaining ATA affiliates that were not substantively consolidated in the company's first bankruptcy case were sold or otherwise liquidated. ATA Airlines filed for Chapter 22 on April 2, 2008 (Bankr. S.D. Ind. Case No. 08-03675), citing the unexpected cancellation of a key contract for ATA's military charter business, which made it impossible for ATA to obtain additional capital to sustain its operations or restructure the business. ATA discontinued all operations subsequent to the bankruptcy filing. ATA's Chapter 22 bankruptcy petition lists assets and liabilities each in the range of $100 million to $500 million. The Debtor is represented in its Chapter 22 case by Haynes and Boone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel. The United States Trustee for Region 10 appointed five members to the Official Committee of Unsecured Creditors. Otterbourg, Steindler, Houston & Rosen, P.C., serves as bankruptcy counsel to the Committee. FTI Consulting, Inc., acts as the panel's financial advisors. The Court gave ATA Airlines Inc. until Feb. 26, 2009, to file its Chapter 11 plan and April 27, 2009, to solicit acceptances of that plan. ATA Airlines submitted to the Court its Chapter 11 Plan of Reorganization and accompanying Disclosure Statement on Dec. 12, 2008, two weeks after it completed the sale of its key assets to Southwest Airlines Inc. Bankruptcy Creditors' Service, Inc., publishes ATA Airlines Bankruptcy News. The newsletter tracks the chapter 11 case of ATA Airlines, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) ATMADJIAN DIAMOND: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Atmadjian Diamond, Inc. d/b/a 18 Karati 510 W. 6th Street, Suite 1034 Los Angeles, CA 90014 Bankruptcy Case No.: 09-11534 Chapter 11 Petition Date: January 26, 2009 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Ellen Carroll Debtor's Counsel: David B Golubchik, Esq. Levene Neale Bender Rankin & Brill LLP 10250 Constellation Blvd Ste 1700 Los Angeles, CA 90067 Tel: (310) 229-1234 Email: dbg@lnbrb.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-11534.pdf The petition was signed by Arte Atmadjian, President of the company. BANC OF AMERICA: Fitch Downgrades Ratings on Two Classes to Low-B ----------------------------------------------------------------- Fitch Ratings downgrades five classes of Banc of America Large Loan, Inc., series 2005-MIB1 and assigns Rating Outlooks: -- $30.3 million class G from 'A+' to 'A-'; Outlook Negative; -- $25.3 million class H from 'A' to 'BBB+'; Outlook Negative; -- $28.8 million class J from 'BBB+' to 'BBB-'; Outlook Negative; -- $30.9 million class K from 'BBB-' to 'BB'; Outlook Negative; -- $30 million class L from 'BBB-' to 'B-/DR1'. In addition, Fitch affirms these classes and assigns Rating Outlooks: -- $195.9 million class A-1 at 'AAA'; Outlook Stable; -- $224.7 million class A-2 at 'AAA'; Outlook Stable; -- Interest-only class X-1B at 'AAA'; Outlook Stable; -- Interest-only class X-2 at 'AAA'; Outlook Stable; -- Interest-only class X-3 at 'AAA'; Outlook Stable; -- Interest-only class X-5 at 'AAA'; Outlook Stable; -- $43 million class B at 'AAA'; Outlook Stable; -- $51.2 million class C at 'AAA'; Outlook Stable; -- $30.3 million class D at 'AA+'; Outlook Negative; -- $30.3 million class E at 'AA'; Outlook Negative; -- $30.3 million class F at 'AA-'; Outlook Negative. Interest-only classes X-1A and X-4 have paid in full. Rake Classes K-LH, X-LHK, L-LH, X-LHL, M-LH, X-LHM, N-LH, X-LHN, L-1-RC, L-2- RC, M-1-RC, and M-2-RC were not rated by Fitch, and have paid in full. The downgrades are due to a decline in performance of five loans (16.7%) which are considered to have below investment-grade shadow ratings. These loans are: Liberty Properties (5.35%), La Cumbre Plaza (3.66%), Radisson Resort (3.30%), The Shops at Grand Avenue (3.08%) and The Pointe Apartments (1.30%). The Liberty Properties loan is secured by a portfolio of five industrial/office buildings located in Worchester and Dedham, Massachusetts. Occupancy of the portfolio as of September 2008 had declined to 63.8% from 81.1% at issuance. The loan matures in March 2009 and has one remaining one-year extension option. The La Cumbre Plaza loan is secured by an open-air shopping center located in Santa Barbara, California. While occupancy and revenues are in-line with issuance, expenses have increased in excess of 25% since issuance. The loan matures in August of 2009 and has no remaining extension options. The Radisson Resort is a 718-room resort hotel located in Kissimmee, Florida. The hotel has experienced a decline in performance as tourism in the area has suffered due to the economic downturn. As of the trailing 12 months ended October 2008, occupancy had declined to 69.5% from 75.8% at issuance. Additionally, as of Sept. 30, 2008 expenses had increased approximately 20% from issuance. The loan matures in September 2009 and has no remaining extension options. Given the decline in performance and the current lending environment, a default at maturity is likely. The Shops at Grand Avenue loan is secured by an urban shopping center in downtown Milwaukee, Wichita. As of October 2008 the occupancy of the property had declined to 59.0% from 78.6% at issuance. The loan matures September 2009 and has two remaining one-year extensions. The Pointe Apartments loan is secured by a 360-unit apartment complex located in Stone Mountain, Georgia. The loan was transferred to the special servicer due to imminent default and the special servicer is pursuing foreclosure. In addition to the senior loan, which is included in the trust, there is $5,450,000 B-note. The loan remains current and the Fitch value does not indicate losses. The Westin New York at Times Square (30.9%) is the largest loan in the transaction. It is secured by an 863-room, Class A, full- service hotel located in Manhattan's Times Square. When the hotel opened in 2002, it was Manhattan's largest newly-constructed hotel in 17 years. The loan is performing in-line with issuance. The loan had a Fitch stressed debt service coverage ratio of 1.73 times as of September 2008 compared to 1.72x at issuance. The DSCRs for the loans are calculated based on a Fitch adjusted net cash flow and a stressed debt service based on the current loan balances and a hypothetical mortgage constant. The loan matures on March 11, 2009, and has three one-year extension options. The borrower has indicated that it plans to extend the loan. The Toys R' Us - DE Portfolio (22.6%), the second largest loan, is collateralized by a portfolio of owner-occupied, triple-net leased stores that comprise 7.5 million square feet in 26 states. The loan has experienced stable performance and occupancy has not changed since issuance. The loan is within the second of three one-year extension options, and matures on Aug. 9, 2009. The third-largest loan is secured by the USX Tower (19.3%), a 2.3 million sf office building located in Pittsburgh, Pennsylvania. Occupancy has improved since issuance, with an October 2008 lease rate of 93.9% compared to 81% at issuance. The loan is within the second of three one-year extension options, and matures on Sept. 9, 2009. As of the January 2009 remittance, the pool's collateral balance had paid down 40.2% to $751 million from $1.26 billion at issuance. Seven loans have paid in full since issuance and 11 loans remain outstanding. Fitch remains concerned about the transaction's maturity risk. Three loans (8%) have no remaining extension options and mature in the second half of 2009 or January 2010. Six loans (58%) mature in 2009 and have one remaining 1- year extension option. Two loans (34%) mature in 2009 and have two or more remaining 1-year extensions. BANK OF AMERICA: Brian Moynihan Faces Compensation Questions ------------------------------------------------------------ Dan Fitzpatrick and Susanne Craig at The Wall Street Journal report that Brian Moynihan, who took John Thain's place as global banking and global wealth and investment management at Bank of America Corp., was met with questions about compensation and other topics. According to WSJ, Mr. Moynihan is struggling with worker dissatisfaction due to: -- high-level executive exits, -- cultural friction between Merrill Lynch and BofA, and -- a decision to award billions of dollars in bonuses to Merrill Lynch employees before the deal was completed On Jan. 1, 2009. WSJ relates that the questions include the possible cuts in compensation, which could include plans to defer some bonuses of investment-banking workers. Citing a person familiar with the matter, WSJ states that the 2008 of some of the BofA investment- banking employees could be delayed until an unspecified date. The report says that this could worsen the divide between Merrill Lynch and BofA workers, as Merrill Lynch already gave out 2008 bonuses. Mr. Moynihan introduced his leadership team and advised workers on how to talk with their clients in a time of economic uncertainty, WSJ reports. 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. BELO CORP: S&P Downgrades Corporate Credit Rating to 'BB-' ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and issue-level ratings on Dallas, Texas-based Belo Corp. The corporate credit rating was lowered to 'BB-' from 'BB', and the rating outlook is stable. "The downgrade reflects our concern about weakening prospects for Belo's revenue and EBITDA during the recession, coupled with the probability that the company will need to amend its credit agreement in early 2009 to loosen its financial covenants," explained Standard & Poor's credit analyst Deborah Kinzer. S&P's expectation of a sharp decline in local and national ad revenue in 2009, particularly in the absence of significant political ad revenue, would result in an even more precipitous drop in EBITDA. Despite Belo's efforts to pay down debt, headroom under its leverage covenant could disappear rapidly if it does not amend its credit agreement. The company's unadjusted debt to EBITDA was 4.1x as of Sept. 30, 2008, and maximum leverage under its credit agreement is 5.75x, tightening to 5.00x in the first quarter of 2009. As of Sept. 30, 2008, Belo had about $1.14 billion of debt outstanding. High margins in broadcasting result in dramatic declines in EBITDA during business downturns, and correspondingly rapid increases in leverage, even with respectable efforts to reduce debt. The rating reflects Belo's high financial leverage from the retention of all outstanding indebtedness after the Feb. 8, 2008 spinoff of its newspaper business, the vulnerability of TV broadcasting's revenues to economic cycles, earnings volatility between election and non-election years, and competition from alternative media. The company's strong station portfolio, diversification among network affiliations, and good cash flow and high EBITDA margins relative to peers partially offset these factors. In the first nine months of 2008, Belo's EBITDA declined 5.2% from the same period of 2007, on a 4.4% decline in revenue. Higher political advertising and retransmission consent revenue was insufficient to offset the decline in local and national ad revenue, especially from automotive advertisers and from weakness in the Phoenix, Arizona market. Cost reductions from a hiring freeze and staff cutbacks only partly offset the lower revenues. The EBITDA margin for the 12 months ended Sept. 30, 2008, was 35%, which is relatively good in a peer comparison. The company's TV operations have historically generated good discretionary cash flow. The conversion rate of EBITDA into discretionary cash flow has typically been about 25%, but S&P believes that the company could have difficulty maintaining this level of conversion in 2009. Belo's lease-adjusted debt to EBITDA was 4.1x for the 12 months ended Sept. 30, 2008, and lease-adjusted EBITDA coverage of interest was 3.1x. The company was comfortably in compliance with its financial covenants, including the scheduled tightening in the first quarter of 2009. However, S&P believes that declining ad revenues and EBITDA could lead to a significant narrowing of covenant headroom in the first half of 2009. Amending the credit agreement will likely significantly increase the pricing on Belo's bank borrowings. BERNARD L. MADOFF: Banks to Transfer $535MM From Co.'s Accounts --------------------------------------------------------------- Christopher Scinta at Bloomberg News reports that Bank of New York Mellon Corp. and JPMorgan Chase & Co. have agreed with Irving Picard, the trustee for Bernard L. Madoff Investment Securities LLC, to transfer $535 million from the brokerage's account. Court documents say that Bank of New York will transfer about $301.4 million, while JPMorgan said it will transfer about $233.5 million, to Mr. Picard by Feb. 6, 2009. Mr. Picard will indemnify the banks against any claims brought as a result of the transfers, the documents state. Bloomberg relates that the Hon. Burton Lifland of the U.S. Bankruptcy Court for the Southern District of New York will hold a hearing on the agreements on Feb. 4, 2009. Citing a Federal Bureau of Investigation agent, Bloomberg reports that Bernard Madoff told workers that his money-management business was a separate entity and that it had been insolvent for years. Mr. Madoff, according to court documents, said that and that he had $200 million to $300 million left from that business that he planned to distribute to workers, family members, and friends. Bloomberg relates that a person familiar with the matter said that Mr. Picard and lawyers from his firm, Baker Hostetler LLP, are reviewing records with the help of Mr. Madoff's former employees. The court, says Bloomberg, authorized Mr. Picard to confiscate assets and records, demand documents, summon witnesses, and enter Mr. Madoff's residences around the world. 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 $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. BERNARD L. MADOFF: Former Merrill Officials Invested in Co. ----------------------------------------------------------- Randall Smith at The Wall Street Journal reports that people familiar with the matter said that former Merrill Lynch CEOs Daniel Tully and David Komansky, and former Merrill Lynch investment-banking chief Barry Friedberg invested in hedge funds with Bernard L. Madoff Investment Securities LLC exposure run by former Merrill Lynch brokerage chief John Steffens. While Merrill Lynch and Morgan Stanley turned some customers away from Bernard Madoff as their "due diligence" teams couldn't understand Mr. Madoff's obscure investment strategy, Mr. Steffens had exposure to Mr. Madoff fraud through investments made by funds run by Spring Mountain Capital LP, WSJ states. The report says that Mr. Steffens' Spring Mountain, which he created with top Bernard L. Madoff investor J. Ezra Merkin in 2001, invested in three funds led by Ezra Merkin, one of which Mr. Steffens said he was aware of heavy Bernard L Madoff Investment exposure. Mr. Merkin, Mr. Steffens' partner at Spring Mountain, operated three funds that invested with Mr. Madoff, all of which Spring Mountain invested in, WSJ relates. The funds are: -- Ascot Partners LP, -- Gabriel Capital Corp., and -- Ariel Fund Ltd. A Spring Mountain official estimated that the $35 million the company invested in Bernard L. Madoff Investment was 4.4% of the Spring Mountain's $800 million in hedge-fund fund-of-funds investments, WSJ states. The Bernard L. Madoff Investment was 7% of one fund, Spring Mountain Capital Partners QP I, the report says, citing an investor. WSJ relates that Mr. Steffens disclosed plans to close down the Spring Mountain funds of hedge funds ten days after the Madoff fraud was revealed, due to a number of reasons that included redemption requests from customers and withdrawal limits by some funds in which Spring Mountain invested, made worse by the fraud. According to WSJ, it isn't clear how much money the Merrill executives had invested. The report states that Mr. Steffens said that his funds had generally outperformed the stock-market indexes since inception and in 2008. 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 $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. BERNARD L. MADOFF: No Proof on Workers' Awareness of Fraud ---------------------------------------------------------- Tom Lauricella, Amir Efrati, and Aaron Lucchetti at The Wall Street Journal report that no evidence has surfaced that a group of Bernard L. Madoff Investment Securities LLC employees who played key roles with clients knew about the alleged fraud. According to WSJ, this group of employees kept track of Mr. Madoff's investment clients, set up new accounts, and monitored client balances. This group, says WSJ, dispatched checks or wired money when customers withdrew funds and provided the clients "with market color on how the portfolio was invested." Citing people familiar with the matter, WSJ states that several Bernard L. Madoff Investment workers have been subpoenaed by regulators seeking documents about their dealings with defrauded investors. Sources said that investigators don't believe Mr. Madoff committed the fraud alone, although Mr. Madoff said that he acted alone in defrauding the investors, WSJ relates. WSJ reports that the 17th floor of the Lipstick Building housed Mr. Madoff's secretive investment operations, involving: -- Frank DiPascali Jr., who investigators said supervised the day-to-day dealings with investment clients and is a focus of their probe; -- Robert Cardile, a Madoff veteran who briefly had worked in Madoff's main stock-trading operation with Mr. Madoff's sons Mark and Andrew. Mr. Cardile married Mr. DiPascali's sister; -- Eric Lipkin was a second-generation Madoff employee; his father had worked for decades at the company in the stock-trading operation, although in one instance he acted as trustee on an account for a Madoff investor. He dealt with some investment-advisory clients and handled payroll for the Madoff firm. A source said that Mr. Lipkin hasn't received a subpoena; -- JoAnn Crupi, who processed client requests in the investment-advisory business. People familiar with the matter said that she kept track of money being wired in and out of Madoff's accounts. She handled accounts for individual investors as well as institutional clients, like "feeder funds" that would channel in huge sums of money from investors around the world; -- Erin Reardon, who handled the $12 million family account of Minnesota investor Boyer Palmer, among other clients. When Mr. Madoff's arrest became public, Mr. Palmer's son unsuccessfully tried to withdraw their Madoff money through Ms. Reardon; and -- Annette Bongiorno, a Madoff veteran who sources say handled a number of Mr. Madoff's oldest investment- advisory clients. Among them was Ron Tavlin, an investor from Minneapolis whose family has kept money at the Madoff firm for more than 30 years. 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 $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. BERNARDO ORTIZ: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Bernardino Ortiz-Santiago Vera Ann Burrell Street d/b/a El Meson Del Caribe PO Box 1265 Caguas, PR 00726 Bankruptcy Case No.: 09-00376 Chapter 11 Petition Date: January 25, 2009 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Jacqueline Hernandez Santiago, Esq. Jacqueline Hernandez Santiago PO Box 366431 San Juan, PR 00936-6431 Tel: (787) 751-1836 Email: Quiebras1@Gmail.Com Total Assets: $3,502,100 Total Debts: $1,738,811 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/prb09-00376.pdf The petition was signed by Bernardo Ortiz-Santiago and Vera Ann Burrell Street. BHASIN ARVIND: Involuntary Chapter 11 Case Summary -------------------------------------------------- Alleged Debtor: Bhasin Arvind Kaur aka Sethi Arvind Kaur aka Sethi Arvind aka Behl Arvind Kaur aka Singh Arvind Kaur aka Mediwell, Inc. aka Singh Arvind aka Arvind K. Sethi MD, Inc. 2701 Marina Point Ln. Elk Grove, CA 95758 Case Number: 09-21224 Involuntary Petition Date: January 26, 2009 Court: Eastern District of California (Sacramento) Judge: Christopher M. Klein Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Ravdeep Singh Bhasin statement of facts $908,150 PO Box 582542 Elk Grove, CA 95758 BIG WEST: S&P Withdraws 'D' Corporate Credit Ratings ---------------------------------------------------- Standard & Poor's Ratings Services said that it withdrew its 'D' corporate credit rating and other ratings on Big West Oil LLC at the request of the company. BROOKLYN CENTER: Case Summary & Four Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Brooklyn Center Leased Housing Assoc LP 2900 Northway Drive, Suite 201 Brooklyn Center, MN 55430 Bankruptcy Case No.: 09-40476 Chapter 11 Petition Date: January 29, 2009 Court: District of Minnesota (Minneapolis) Judge: Robert J. Kressel Debtor's Counsel: Joseph W. Dicker, Esq. joe@joedickerlaw.com Joseph W. Dicker PA 1406 West Lake Street, Suite 208 Minneapolis, MN 55408 Tel: (612) 827-5941 Fax: (612) 822-1873 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 ------ --------------- ------------ Brooklyn Center Housing LLC bank loan $3,000,000 2900 Northway Drive, Suite 201 Brooklyn Center, MN 55430 Centerpoint Energy $200 P.O. Box 1144 Minneapolis, MN 55440 Xcel Eenergy $100 P.O. Box 9477 Minneapolis, MN 55484-9477 Coin Mach $100 P.O. Box 27288 New York, NY 10087-7288 The petition was signed by Brooklyn Center Housing LLC, general partner. BONTEN MEDIA: Moody's Comments on Recent Bond Repurchase -------------------------------------------------------- Moody's commented that the recent bond repurchase by Bonten Media Group, Inc. does not impact its Caa1 corporate family or stable outlook. Bonten completed the repurchase of a portion of its 9 / 9 3/4% Senior Subordinated Toggle Notes due 2015 in a private transaction. Moody's most recent action on Bonten was the downgrade of its corporate family and probability of default ratings to Caa1 from B3 on November 12, 2008. Formed in November 2006 by Diamond Castle Holdings, LLC, to acquire and operate local television stations in the United States, Bonten operates sixteen full power, low power and digital television stations in eight markets (including stations operated via JSA/JOA agreements with Esteem Broadcasting). It maintains headquarters in New York, New York, and its annual revenue is approximately $50 million. BROADSTRIPE LLC: U.S. Trustee Forms Six-Member Creditors Panel -------------------------------------------------------------- Robert A. DeAngelis, the United States Trustee for Region 3, appointed six creditors to serve on an official committee of unsecured creditors of Broadstripe LLC and its debtor-affiliates. The members of the committee are: 1) James Cable, LLC Attn: Dan Shoemaker 901 Tower Drive, Ste. 310 Troy, Michigan 48098 Tel: (248) 641-1770 Fax: (248) 641-1631 2) Tailwind Communications, Inc. Attn: James R. Balkovic, President 2509 Gettysburg Road Camp Hill, PA 17011 Tel: (717) 975-7814 Fax: (717) 975-8949 3) Decibels, Inc. Attn: Dennis Snyder P.O. Box 518 Spanaway, WA 98387 Tel: (253) 473-5855 Fax: (253) 565-1888 4) Adams Cable Equipment, Inc. Attn: Christian Adams P.O. Box 25687 Overland Park, KS 66225 Tel: (913) 888-5100 ext. 5101 5) Cintas Corporation Attn: Jim Johnson 6800 Cintas Blvd. Mason, OH 45262 Tel: (614) 777-1701 Fax: (614) 777-1702 6) TCR Sports Broadcasting Holding, LLP Attn: Michael Joseph Haley 333 W. Camden Street Baltimore, MD. 21201 Tel: (410) 547-3080 Fax: (410) 547-3099 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Broadstripe LLC Headquartered in Chesterfield, Missouri, Broadstripe LLC -- http://www.broadstripe.com-- provide videos and telephone services to consumers and business in Maryland, Michigan, Washington and Oregon. The company and fives of its affiliates filed for Chapter 11 protection on January 2, 2009 (Bankr. D. Del. Lead Case No. 09-10006). Ashby & Geddes, and Gardere Wynne Sewell LLP represent the Debtors in their restructuring efforts. The Debtors proposed FTI Consulting Inc. as their restructuring consultant, and Epiq Bankruptcy Consultants LLC as their claims agent. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million in their filing. BRANSON DELI: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Branson Deli Acquisition, LLC 932 N Garland Ave. Fayetteville, AR 72701 Bankruptcy Case No.: 09-70225 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Stephen Duane Mansfield 08-74034 Chapter 11 Petition Date: January 20, 2009 Court: United States Bankruptcy Court Western District of Arkansas (Fayetteville) Judge: Ben T. Barry Debtor's Counsel: Stanley V. Bond, Esq. Attorney at Law P.O. Box 1893 Fayetteville, AR 72701-1893 Tel: (479) 444-0255 Fax: (479) 444-7141 Email: attybond@me.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/arwb09-70225.pdf The petition was signed by Stephen D. Mansfield, Manager of the company. BURLINGTON COAT: S&P Keeps B- Corp. Credit Rating; Outlook Neg. --------------------------------------------------------------- Standard & Poor's Ratings Services said it revised the outlook on Burlington Coat Factory Warehouse Corp. to negative from stable. Concurrently, S&P affirmed the 'B-' corporate credit rating on the company. "The outlook change reflects our concern that BCF's cushion over financial covenants of its senior term loan will significantly narrow in the fourth quarter of fiscal 2008 (May 29, 2009)," said Standard & Poor's credit analyst Diane Shane, "when the leverage covenant becomes more restrictive." Specifically, should debt levels remain at Nov. 29, 2008, levels and EBITDA remain unchanged on a trailing-12-month basis, EBITDA cushion over financial covenants would narrow to about 5% of EBITDA at year-end. CAJUN FITNESS: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Cajun Fitness, Inc. 1225 Church Point Hwy. Rayne, LA 70578 Bankruptcy Case No.: 09-50055 Chapter 11 Petition Date: January 23, 2009 Court: United States Bankruptcy Court Western District of Louisiana (Lafayette/Opelousas) Judge: Robert Summerhays Debtor's Counsel: Thomas E. St. Germain, Esq. 1414 NE Evangeline Thruway Lafayette, LA 70501 Tel: (337) 235-4001 Fax: (337) 235-4020 Email: ecf@weinlaw.com Total Assets: $444,225 Total Debts: $1,847,756 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/lawb09-50055.pdf The petition was signed by Jason Smith, President of the company. CANADIAN TRUST: Restructuring Plan Fully Implemented ---------------------------------------------------- The Pan-Canadian Investors Committee for Third-Party Structured Asset Backed Commercial Paper averred that the restructuring plan affecting $32 billion of third-party ABCP has been fully implemented as of January 21, 2009. Pursuant to the terms of the Plan, holders of Affected ABCP will have their short term commercial paper exchanged for longer term notes whose maturities match those of assets previously contained in the underlying conduits. Noteholders should expect to receive the new notes within three business days through normal CDS book entry procedures. The Investors Committee noted that as early as January 16, all of the principal legal documentation needed to implement the restructuring plan were being finalized and were being signed by all of the necessary parties. Final reconciliations and verifications were being conducted in mid-January 2009. "While no one could have predicted the scope and extent of the challenges that we've faced along the way, we continue to believe in the benefits of this restructuring and are pleased that we are arriving at its long-awaited and successful conclusion," Purdy Crawford, chair of the Investors Committee, had said of the Plan finalization. Mr. Justice Campbell of the Superior Court of Ontario granted the Plan Implementation Order on January 12, 2009. As of January 12, the Investors Committee also provided updates on (i) payment of interest to noteholders, and (ii) exchange of affected ABCP for new notes. * Payment of Interest to Noteholders The Investors Committee disclosed that the first payment made to Noteholders on January 12, 2009, on account of interest on their existing holdings of ABCP, or otherwise accruing in the ABCP conduits, has been determined for each Series of Affected ABCP. The initial payment -- representing interest that has accrued on ABCP between August 2007 and August 31, 2008, net of expenses, including restructuring costs and Reserves -- varies by Series pursuant to the provisions of the Plan. The first interest payment to Noteholders is expected to be made within three business days after the closing date of the restructuring. Further payments representing interest earned in the ABCP conduits for the period between September 1, 2008 and the closing date will also be made to Noteholders. The amount per Series of these further payments will not be known until after closing. It is expected that substantially all of the restructuring costs and reserves will have been deducted from the first installment and are therefore not expected to have an impact on the further payments to Noteholders. Payments will be made following the Monitor's review of the reconciliation of the financial data from September 1, 2008 by the Sponsors of the ABCP Conduits and the MAVs' administrator. * Exchange of affected ABCP for New Notes The proposed allocation and distribution of new Plan Notes will be effected through the normal book entry procedures of CDS Clearing and Depositary Services Inc., and its registered participants. Other than the remaining Noteholders holding physical certificates evidencing their ABCP, no further action is required by Noteholders. Noteholders who continue to hold ABCP in physical certificated form or are uncertain about any steps you are required to take, are advised to please contact the Monitor, Ernst & Young Inc., at 1-888-373-6213. * Other Information The Investors Committee also reported that there have been changes to the principal federal income tax consequences of the Plan to Noteholders since March 20, 2008. Noteholders are reminded to contact their own counsel, accountants and other professional advisors as to the legal, tax and other potential consequences of any purchase, sale or exchange of Affected ABCP or new Plan Notes. Pursuant to the January 12 order, the Canadian Court has also extended the stay protection from certain creditors under the Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended, to the earlier of January 31, 2009, and the Plan Implementation Date. Moreover, the Canadian Court ruled that the Monitor will be discharged and released from its responsibilities and obligations once it has completed its duties under the Plan. The Monitor is also authorized to carry out the Interest Payment Transactions and the Transfer of Assets and Flow of Funds Transactions for Aria Trust Series E, Encore Trust Series E, Opus Trust Series E and Symphony Trust Series E. A full-text copy of the Plan Implementation Order is available for free at http://ResearchArchives.com/t/s?3896 With respect to the full implementation of the restructuring plan, Mr. Crawford said in a public statement, "We are delighted to announce the successful completion after nearly a year and a half of arduous negotiations, legal challenges and compromise during ever changing credit market conditions. I want to thank all Committee Members for their dedication and hard work over this prolonged period, as well as investors and other stakeholders for their patience and understanding over the past 17 months as we worked through the many challenges associated with this restructuring." About Canadian Trust Apollo Trust, Apsley Trust, Aria Trust, Aurora Trust, Comet Trust, Devonshire Trust, Encore Trust, Gemini Trust, Ironstone Trust, MMAI-1 Trust, Newshore Canadian Trust, Opus Trust, Planet Trust, Rocket Trust, Selkirk Funding Trust, Silverstone Trust, Slate Trust, Structured Asset Trust, Structured Investment Trust III, Symphony Trust, Whitehall Trust are entities based in Canada that issue securities called third-party structured finance asset- backed commercial paper. As of Sept. 14, 2007, these 21 Canadian Trusts had approximately C$33 billion of outstanding ABCP. As reported by the Troubled Company Reporter on March 18, 2008, Justice Colin Campbell of the Ontario Superior Court of Justice granted an application filed on March 17 by The Pan-Canadian Investors Committee for Third-Party Structured ABCP under the provisions of the Companies' Creditors Arrangement Act. The Committee asked the Court to call a meeting of ABCP noteholders to vote on a plan to restructure 20 trusts affecting C$32 billion of notes. The trusts were covered by the Montreal Accord, an agreement entered by international banks and institutional investors on Aug. 16, 2007 to work out a solution for the ABCP crisis in Canada. Justice Campbell appointed Ernst & Young, Inc., as the Applicants' monitor, on March 17, 2008. (Canadian ABCP Trusts Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CANADIAN TRUST: Bank of New York Mellon Appointed as ABCP Trustee ----------------------------------------------------------------- The Bank of New York Mellon, through its subsidiary BNY Trust Company of Canada, has been appointed trustee, paying agent and registrar for the C$32 billion restructuring of Canada's non-bank sponsored asset-backed commercial paper market. The complex restructuring, which involves issuing new long-term notes to investors in exchange for their short-term paper, was developed by a group of major banks and investors with the backing of the Canadian government. In its role, the Bank will service the debt issues and process principal and interest payments for investors. The Bank will also serve as collateral agent and accounting agent on three separate pools of assets, in which the company will monitor collateral, prepare financial statements and assist with reporting requirements. "The Bank of New York Mellon is uniquely qualified to handle the diverse and complex requirements associated with this restructuring," Scott Posner, CEO of the company's Global Corporate Trust business, in a statement dated January 23. "We have worked closely with the Pan-Canadian Investors Committee to design and prepare a servicing platform that meets the challenging requirements of this transaction and look forward to working with all parties to implement an effective and successful restructuring." Corporate trust providers are appointed by corporations, municipal governments and other entities issuing debt to perform a variety of duties, including servicing and maintaining the debt issue, processing payments for investors, representing investors in defaults, and providing value-added services for complex debt structures. The Bank of New York Mellon and BNY Trust Company of Canada provide global trust and agency services to Canadian issuers interested in tapping the global capital markets, as well as any issuer looking to issue in the Canadian domestic capital markets. Overall, The Bank of New York Mellon's corporate trust business services $11.4 trillion in outstanding debt from 56 locations around the world. It services all major debt categories, including corporate and sovereign debt, mortgage-backed and asset- backed securities, collateralized debt obligations, derivative securities and international debt offerings. The Bank of New York Mellon Corporation is a global financial services company focused on helping clients manage and service their financial assets, operating in 34 countries and serving more than 100 markets. The company is a leading provider of financial services for institutions, corporations and high-net-worth individuals, providing superior asset management and wealth management, asset servicing, issuer services, clearing services and treasury services through a worldwide client-focused team. It has $20.2 trillion in assets under custody and administration and $928 billion in assets under management. Additional information is available at http://www.bnymellon.com About Canadian Trust Apollo Trust, Apsley Trust, Aria Trust, Aurora Trust, Comet Trust, Devonshire Trust, Encore Trust, Gemini Trust, Ironstone Trust, MMAI-1 Trust, Newshore Canadian Trust, Opus Trust, Planet Trust, Rocket Trust, Selkirk Funding Trust, Silverstone Trust, Slate Trust, Structured Asset Trust, Structured Investment Trust III, Symphony Trust, Whitehall Trust are entities based in Canada that issue securities called third-party structured finance asset- backed commercial paper. As of Sept. 14, 2007, these 21 Canadian Trusts had approximately C$33 billion of outstanding ABCP. As reported by the Troubled Company Reporter on March 18, 2008, Justice Colin Campbell of the Ontario Superior Court of Justice granted an application filed on March 17 by The Pan-Canadian Investors Committee for Third-Party Structured ABCP under the provisions of the Companies' Creditors Arrangement Act. The Committee asked the Court to call a meeting of ABCP noteholders to vote on a plan to restructure 20 trusts affecting C$32 billion of notes. The trusts were covered by the Montreal Accord, an agreement entered by international banks and institutional investors on Aug. 16, 2007 to work out a solution for the ABCP crisis in Canada. Justice Campbell appointed Ernst & Young, Inc., as the Applicants' monitor, on March 17, 2008. (Canadian ABCP Trusts Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CENTRAL ILLINOIS: Moody's Affirms 'Ba1' Issuer Ratings ------------------------------------------------------ Moody's Investors Service affirmed the ratings of Central Illinois Public Service Company (d/b/a AmerenCIPS; Ba1 Issuer Rating); CILCORP Inc. (Ba1 Corporate Family Rating); Central Illinois Light Company (d/b/a AmerenCILCO, Ba1 Issuer Rating); and Illinois Power Company (d/b/a AmerenIP, Ba1 Issuer Rating) and changed their rating outlooks to stable from positive. Moody's also affirmed the ratings of Ameren Corporation (Ameren, Baa3 Issuer Rating) and Union Electric Company (d/b/a AmerenUE, Baa2 Issuer Rating) with a stable outlook. The change in the rating outlooks of AmerenCIPS, CILCORP, AmerenCILCO, and AmerenIP to stable from positive considers the near-term expiration of their two $500 million bank credit facilities on January 14, 2010. Although Moody's expects that all or a portion of these bank credit facilities to be renewed at some point during 2009, constrained bank and credit market conditions make the timing, structure, pricing, tenor, and size of the renewed facilities more uncertain. As a result, Moody's does not view the standalone liquidity profile of Ameren's Illinois utility subsidiaries as being sufficient to support investment grade Issuer Ratings until new, preferably multi-year, bank facilities are put in place. Negative rating action could be considered if Ameren's Illinois utilities do not enter into adequate liquidity arrangements well in advance of the current facility expiration dates in January 2010. Moody's would consider positive rating action on Ameren's Illinois utilities if adequate liquidity facilities are executed. Parent company Ameren maintains a separate $1.15 billion facility that does not expire until July 14, 2010 that is only available to Ameren, Union Electric Company (d/b/a AmerenUE), and AmerenEnergy Generating Company. Although the Ameren Illinois utilities are able to access parent company funds through Ameren's regulated utility money pool arrangement, Moody's does not view this facility as being of sufficient size to meet the liquidity requirements of the entire Ameren organization on a permanent basis going forward. As with the Illinois credit facilities, Moody's would expect Ameren to also begin efforts to renew this credit facility by mid-2009, well in advance of its July 2010 expiration date. Ameren's Illinois utilities have been highly reliant on their bank credit facilities to finance working capital and capital expenditure needs in advance of long-term debt financings over the past several years. At September 30, 2008, approximately $832 million of the $1 billion total amount of these facilities was drawn, leaving only $168 million of availability. Unsettled credit market conditions have made long-term debt financings significantly more expensive for utilities in general; however, Ameren was able to complete financings of $400 million at AmerenIP and $150 million at AmerenCILCO in the fourth quarter of the year, which has reduced draws under the bank credit facilities significantly. Moody's expects Ameren to try to further decrease its reliance on their credit facilities during 2009 by completing additional long-term debt financings. Ameren has also announced capital expenditure reductions and deferrals for 2009, although virtually all of these cutbacks are at AmerenUE and AmerenEnergy Generating Company. In addition, Moody's notes that Ameren maintains one of the highest dividend payouts in the industry, exacerbating its external financing needs. The affirmation of the ratings of Ameren and AmerenUE with stable outlooks considers yesterday's constructive rate decision on AmerenUE's rate case proceedings, with the Missouri Public Service Commission approving a $162.8 million rate increase based on a 10.76% return on equity, or approximately two-thirds of AmerenUE's $250.8 million request. In addition, the Commission approved a fuel adjustment clause for AmerenUE, which Moody's views as credit supportive and a positive indication that the regulatory environment for investor-owned utilities in Missouri may be improving. Ratings affirmed with a stable outlook include: -- Ameren's Baa3 Issuer Rating and Prime-3 short-term rating for commercial paper. -- Union Electric Company's Baa1 senior secured, Baa2 Issuer Rating, Baa3 subordinated, Ba1 preferred stock, and Prime-3 short-term rating for commercial paper, -- Central Illinois Public Service Company's Baa3 senior secured debt, Ba1 Issuer Rating, and Ba3 preferred stock; -- Illinois Power Company's Baa3 senior secured debt, Ba1 Issuer Rating, and Ba3 preferred stock. Ratings affirmed with a stable outlook/LGD assessments revised: -- CILCORP Inc.'s Corporate Family Rating at Ba1 and senior unsecured debt at Ba2 (LGD5, 74%) from Ba2 (LGD5, 82%); -- Central Illinois Light Company's Issuer Rating at Ba1, senior secured debt at Baa2 (LGD2, 19%) from Baa2 (LGD2, 20%), and preferred stock at Ba1 (LGD 4, 63%) from Ba1 (LGD 4, 59%). For Central Illinois Light Company, the LGD model would suggest an Issuer Rating of Ba2 and a preferred stock rating of Ba2. The Ba1 rating assigned considers the pending tender offer for all of CILCORP's outstanding long-term debt, which has the potential to change the capital structure of the CILCORP corporate family considerably. Ratings and Loss Given Default assessments for CILCORP and its subsidiary Central Illinois Light Company have been determined in accordance with Moody's Loss-Given Default Methodology. More information on this methodology can be found at moodys.com/lgd. The last rating action on AmerenCIPS, CILCORP, AmerenCILCO, and AmerenIP was on August 29, 2007, when the ratings were confirmed and assigned a positive outlook. The last rating action on Ameren was on August 13, 2008, when its Issuer Rating was downgraded to Baa3 from Baa2 and its short-term rating for commercial paper was downgraded to Prime-3 from Prime-2. The last rating action on AmerenUE was on August 13, 2008, when its short-term rating for commercial paper was downgraded to Prime-3 from Prime-2. Ameren Corporation is a public utility holding company headquartered in St. Louis, Missouri. It is the parent company of Union Electric Company (d/b/a AmerenUE), Central Illinois Public Service Company (d/b/a AmerenCIPS), CILCORP Inc., Central Illinois Light Company (d/b/a AmerenCILCO); Illinois Power Company (d/b/a AmerenIP), and AmerenEnergy Generating Company. CENTURY ALUMINUM: $100 Mil. Offering Won't Affect Moody's Ratings ----------------------------------------------------------------- Moody's Investors Service commented that Century Aluminum Company's proposed $100 million equity offering, announced on January 27, 2009, would have no positive implications for the company's ratings, including the B2 corporate family rating and B3 senior unsecured note rating, which remain under review for possible downgrade. The prior rating action was on December 17, 2008, when Moody's downgraded Century Aluminum's corporate family rating to B2 from Ba3 and left the company on review for further possible downgrade. Headquartered in Monterey, California, Century Aluminum is the third largest primary aluminum producer in North America with ownership interests in four aluminum production facilities. The company had revenues of approximately $2 billion over the twelve month period ending September 30, 2008. CHEVROLET BUICK: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Chevrolet Buick Pontiac GMC of Milledgeville, Inc. 2401 N. Columbia Street Milledgeville, GA 31061 Bankruptcy Case No.: 09-50191 Chapter 11 Petition Date: January 21, 2009 Court: United States Bankruptcy Court Middle District of Georgia (Macon) Debtor's Counsel: Ward Stone, Jr., Esq. Stone & Baxter, LLP 577 Mulberry Street, Suite 800 Fickling and Co. Building Macon, GA 31201 Tel: (478) 750-9898 Fax: (478) 750-9899 Email: wstone@stoneandbaxter.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/gamb09-50191.pdf The petition was signed by Jack Winters, President of the company. CINCINNATI BELL: Wells Fargo Discloses 7.21% Equity Stake --------------------------------------------------------- Wells Fargo & Company disclosed in a regulatory filing dated January 27, 2009, that it may be deemed to beneficially own 16,617,937 shares of Cincinnati Bell Inc.'s common stock or 7.21% of the total shares outstanding. Wells Fargo added that it has: -- sole power to vote or to direct the vote of 15,648,007 shares; -- sole power to dispose or to direct the disposition of 16,342,536; and -- shared power to dispose or to direct the disposition of 45,481. On the other hand, Wells Capital Management disclosed that it no longer owns any shares of Cincinnati Bell's common stock. Wells Fargo & Company filed the Schedule 13G on behalf of these subsidiaries: -- Wells Capital Management Incorporated -- Wells Fargo Funds Management, LLC -- Peregrine Capital Management, Inc. -- Wells Fargo Bank, National Association -- Evergreen Investment Management Company, LLC -- Wachovia Securities, LLC. -- Calibre Advisory Services, Inc -- Wachovia Bank, National Association -- Delaware Trust Company, National Association -- Wachovia Securities Financial Network, LLC About Cincinnati Bell Headquartered in Cincinnati, Ohio, Cincinnati Bell Inc. (NYSE: CBB) -- http://www.cincinnatibell.com/-- provides integrated communications solutions-including local, long distance, data, Internet, and wireless services. In addition, the company provides office communications systems as well as complex information technology solutions including data center and managed services. Cincinnati Bell conducts its operations through three business segments: Wireline, Wireless, and Technology Solutions. * * * As reported in the Troubled Company Reporter dated Aug. 12, 2008, Fitch Ratings affirmed the company's 'B+' issuer default rating. As of September 30, 2008, the company's balance sheet showed total assets of $2,023,400,000 and total liabilities of $2,682,900,000, resulting in total shareowners' deficit of $659,500,000. CLEARWATER NATURAL: U.S. Trustee Forms 3-Member Creditors Panel --------------------------------------------------------------- Rirchard Clippard, the United States Trustee for Region 8, appointed three creditors to serve on an official committee of unsecured creditors of Clearwater Natural Resources LP and its debtor-affiliates. The members of the committee are: 1) Nelson Brothers, LLC, Interim Chair Jason K. Baker, as Controller 820 Shades Creek Parkway, Suite 2000 Birmingham, AL 35209 Tel: (205) 802-5341 Fax: (205) 803-5399 Jbaker@nelbro.com 2) Dyno Nobel Inc. Seth Hobby, Assoc. General Counsel Brent Pehrson, Credit Manager 2650 Decker Lake Blvd., Suite 300 Salt Lake City, UT 84119 Tel: (801) 328-6524 Fax: (801) 519-5627 seth.hobby@am.dynonobel.com brent.pehrson@am.dynonobel.com 3) Cook Tire Inc. Ted Cook, President 339 Old Whitley Rd. London, KY 40743 Tel: (606) 864-7721 Fax: (606) 864-7981 CookTireInc@windstream.net Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Clearwater Natural Headquartered in Kansas City, Missouri, Clearwater Natural Resources LP engages in coal mining in the Central Appalachian region. In August 2005, the company acquired 100% interest in Miller Bros. that became a wholly-owned operating subsidiary of the company. The company also acquired in October 2006 all interest in Knott Floyd Land Company, a medium scale coal mining company and its operations were subsequently consolidated into Miller. Through Miller, the company produces and sells coal from eleven mining operations in Eastern Kentucky and provide contracts mining services for two third-party owned mines located within the Appalachian region. The company and two of its affiliates, Clearwater Natural Resources LLC and Miller Bros. Coal LLC, filed for January 7, 2009 (Bankr. E.D. Kent. Lead Case No. 09-70011). Mary L. Fullington, Esq., at Wyatt, Tarrant & Combs LLP, and Vinson & Elkins LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Administar Services Group LLC as their restructuring efforts. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million each. COLONIAL BANK: Fitch Places, Not Affirms, 'F3' ST Deposits ---------------------------------------------------------- This amends a previous release issued. It corrects the rating designation for Colonial Bank, N.A.'s 'F3' short-term deposits, which are placed on Rating Watch Negative, not affirmed. Fitch Ratings has downgraded the ratings of the Colonial Bancgroup, Inc., and its subsidiaries, and placed the ratings on Rating Watch Negative. The degree of credit problems at CNB has accelerated beyond Fitch's expectations, with credit costs increasing beyond manageable levels, materially affecting the company's earnings, and causing net charge-offs to increase to 11.15% (annualized) for fourth-quarter 2008 (4Q'08). Although CNB has been aggressive in addressing its problem assets and has increased reserve levels, the downgrade largely reflects the prospect of prolonged credit stress, which Fitch believes will continue to hamper the company's performance and weigh heavily on its financial condition. The preponderance of credit concerns remains in CNB's residential real estate construction portfolio; the majority of the portfolio resides in the troubled Florida market, which drove non-performing assets to 4.83% at Dec. 31, 2008. The company did receive preliminary approval to participate in the Treasury's Capital Purchase Program, but it has yet to be funded. Receipt of the funds is contingent upon the company's ability to raise an additional $300 million in equity - a condition Fitch believes will be difficult to meet, considering the prevailing market environment. CNB has indicated that it is in the process of raising this external capital and has signed a non-binding letter of intent with a private equity firm (SunTx Capital Partners). Management anticipates completing the capital raising activities and accessing TARP capital funding by the end of 1Q'09. A positive resolution of the Negative Watch hinges upon CNB's receipt of the additional capital and the stabilization of asset quality deterioration. Conversely, should the company fail to raise the necessary capital and significant credit quality deterioration persist, multiple-notch downgrades would result. Fitch has downgraded these ratings and placed them on Rating Watch Negative: The Colonial BancGroup, Inc. -- Long-term Issuer Default Rating (IDR) to 'BB' from 'BBB-'; -- Short-term IDR to 'B' from 'F3'; -- Subordinated debt to 'BB-' from 'BB+' -- Individual to 'C/D' from 'C'. Colonial Bank, N.A. -- Long-term IDR to 'BB+' from 'BBB-'; -- Long-term deposits to 'BBB-' from 'BBB'; -- Short-term IDR to 'B' from 'F3'; -- Subordinated debt to 'BB' from 'BB+'; -- Individual to 'C/D' from 'C'. Colonial Capital Trust IV -- Preferred stock to 'BB' from 'BB+'. CBG Florida REIT -- Preferred stock to 'BB' from 'BB+'. Fitch has also placed this short-term rating on Rating Watch Negative: Colonial Bank, N.A. -- Short-term deposits 'F3'; In addition, Fitch has affirmed these ratings: Colonial BancGroup, Inc. -- Support '5'; -- Support Floor 'NF'. Colonial Bank, N.A. -- Support '5'; -- Support Floor 'NF'. CONTECH LLC: Files for Chapter 11 Bankruptcy in Michigan -------------------------------------------------------- Contech LLC voluntarily filed a petition under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Eastern District of Michigan commencing a reorganization proceeding. The company's operations in the United Kingdom are not included in the Chapter 11 filing. According to court documents filed with the Court, the company have been severely affected by the unprecedented challenges confronting the industry citing combination of extended shutdowns by major automotive makes that have now lasted into early 2009, delays or cancellations in new product due to steep decrease in consumer demand. The factors deteriorated the performance of the company and threatened its very survival. The Chapter 11 filing, which was made with the support of the company's key customers, will make it possible to relieve the company's strong underlying operations from significant debt obligations, sell certain non-core operations and address the unprecedented low volumes in the North American automotive industry by rationalizing its operational cost structure. The company said it is conducting normal business operations, and remains focused on serving its customers. In accordance with the Bankruptcy Code, suppliers are expected to be paid in full and under normal conditions for all goods and services provided after the filing. The company has filed various motions with the Bankruptcy Court designed to ensure that the company can continue to meet its obligations to its employees, suppliers and other creditors and ensure that there is no interruption in its business operations. Accordingly, the company believes that the Chapter 11 filing should not impact its day-to-day operations. To fund its continuing operations during the restructuring, the company is in discussions with its lenders and key customers to arrange interim financing. The company said it expects to conclude those negotiations shortly. Subject to Court approval, the company intends to utilize such capital, in addition to cash flow from operations, to fund its operations during its Chapter 11 reorganization process. "This action is an integral part of our ongoing efforts to restructure CONTECH and meet the challenges of the automotive industry going forward. We continue to work closely with our lenders and customers to reach a consensus on the remaining changes that are necessary," said Morris Rowlett, Chairman & Chief Executive Officer of CONTECH, LLC. "Over the past year, we have faced the same challenges many of our competitors and colleagues in the automotive industry have faced resulting from significantly reduced production levels at our largest customers." Mr. Rowlett confirmed that the Company. "Expects to proceed quickly and intends to emerge from these proceedings this year with a significantly improved balance sheet and greater operating flexibility. During this period, we will work closely with our suppliers and customers to ensure their continued satisfaction." "I am grateful for the steadfast support of our customers, suppliers, and of our employees throughout the entire process and I am confident in CONTECH's strong fundamentals going forward," Mr. Rowlett added. The company has engaged Huron Consulting Group, as financial advisor; Paul Hastings as legal advisors; and Kurtzman Carson Consultants as claims agent. Capital Structure The company's primary liabilities consist of (i) a first and second lien credit facility, and (ii) unsecured trade debt. A. Credit Agreements Under the credit and guaranty agreement dated April 16, 2007, among the company, The CIT Group/Business Credit Inc. and The Bank of New York, under which the banks provide $20 million in revolving loan and $70 million term loan to the company. The company's debt obligations are secured by a fist lien security interest on substantially all of the company's assets. In addition, the banks have advanced a $25 million in term loan in accordance to the second lien credit agreement dated April 16, 2007, to the company. The company's debt obligations are secured by a second lien security interest on substantially all of the company's assets. B. Trade Debts Due to the deterioration of the company's business operation, it has extended payments terms with many of its trade creditors but the situation with them substantially deteriorated when the company's bank accounts were seized by the banks and more than $1 million in payments to trade creditors were dishonored. About Contech LLC Headquartered in Portage, Michigan, Contech LLC -- http://www.contech-global.com/-- sells and supplies light-weight cast component for automotive OEM's and Tier I suppliers. The company also manufactures safety steel forged automotive components and tube fabrications through its Steel Products Group primarily for commercial truck OEM's. The company has approximately 1,000 employees. CONTECH LLC: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Contech LLC 950 Trade Centre Way, Suite 200 Portage, Michigan 49002 Bankruptcy Case No.: 09-42392 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Contech U.S., LLC 09-42392 MAG Contech, LLC 09-42409 Type of Business: The Debtors sell and supply light-weight cast component for automotive OEM's and Tier I suppliers. The Debtors also manufacture safety steel forged automotive components and tube fabrications through its Steel Products Group primarily for commercial truck OEM's. The The Debtors have approximately 1,000 employees. See: http://www.contech-global.com Chapter 11 Petition Date: January 30, 2009 Court: Eastern District of Michigan Debtors' Counsel: Richard A. Chesley, Esq. Kimberly D. Newmarch, Esq. Paul, Hastings, Janofsky & Walker LLP 191 North Wacker Drive, 30th Floor Chicago, IL 60606 Tel: (312) 499-6000 Fax: (312) 499-6100 http://www.paulhastings.com Debtors' Local Counsel: Robert A. Weisberg, Esq. Christopher A. Grosman, Esq. Carson Fischer, P.L.C. 4111 Andover Road West, 2nd Floor Bloomfield Hills, MI 48302-1924 Tel: (248) 644-4840 Fax: (248) 644-1832 http://www.carsonfischer.com/ Claims Agent: Kurtzman Carson Consultants LLC Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Superior Aluminum Alloys LLC trade debt $2,374,404 Attn: Pat Charlin 14214 Edgerton Road New Haven, IN 46774 Tel: (260) 749-7599 Fax: (260) 749-7598 Aleris International Inc. trade debt $1,112,913 Attn: Aaron Stankewicz PO Box 139 356 W. Garfield Avenue Coldwater, MI 49036 Tel: (800) 848-6850 Fax: (517) 278-7201 AK Tube LLC trade debt $1,078,905 Attn: John Sundheimer 3040 E. Broadway Walbridge, OH 43465 Tel: (419) 882-2919 Fax: (419) 661-4383 Witzernmann USA LLC trade debt $712,894 2200 Centerwood Drive Warren, MI 48091 Tel: (586) 756-1900 Fax: (586) 756-1700 Arkansas Aluminum Alloys Inc. trade debt $523,523 4400 Malvern Road Hot Springs, AR 71901 Tel: (800) 643-1302 Fax: (501) 262-3555 Alcan Primary Products Corp. trade debt $510,844 Attn: Bob Holden PO Box 73155-N Cleveland, OH 44193 Tel: (440) 423-6945 Fax: (440) 423-6668 Accu Die & Mold Inc. trade debt $451,969 Toyoda Machinery USA/JTekt trade debt $377,936 Beck Aluminum Corp. trade debt $376,688 Constellation New Energy-Gas trade debt $372,229 Division Charter Steel trade debt $362,710 Hanson Mold, Division of trade debt $344,620 Hanson International Quality Mold & Engineering trade debt $291,986 Aero Metals Inc. trade debt $264,633 Zurich North America trade debt $238,806 Art Kuhn Company trade debt $226,791 Midwest Die Corporation trade debt $218,494 Saegertown Manufacturing Corp. trade debt $218,188 Skilled Manufacturing Inc. trade debt $215,466 Magretech Inc. trade debt $214,616 The petition was signed by Morris C. Rowlett, chairman and chief executive officer. COUNTRYWIDE HOME: Moody's Downgrades Ratings on 144 Tranches ------------------------------------------------------------ Moody's Investors Service has downgraded 144 tranches and confirmed 2 tranches from 11 Countrywide Home Loans, Inc., deals issued in 2006. The collateral backing these transactions consists primarily of first-lien, adjustable-rate, Alt-A mortgage loans. The actions are triggered by rapidly increasing delinquencies, higher severities, slower prepayments and mounting losses in the underlying collateral. Additionally, the continued deterioration of the housing market has also contributed to the increased loss expectations for Alt-A pools. The actions listed below reflect Moody's updated expected losses on the Alt-A sector announced in a press release on January 22, 2009, and are part of Moody's on- going review process. Moody's final rating actions are based on current ratings, level of credit enhancement, collateral performance and updated pool- level loss expectations relative to current level of credit enhancement. Moody's took into account credit enhancement provided by seniority, cross-collateralization, excess spread, time tranching, and other structural features within the senior note waterfalls. Loss estimates are subject to variability and are sensitive to assumptions used; as a result, realized losses could ultimately turn out higher or lower than Moody's current expectations. Moody's will continue to evaluate performance data as it becomes available and will assess the pattern of potential future defaults and adjust loss expectations accordingly as necessary. Complete rating actions are: Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OC1 -- Cl. 1-A-1, Downgraded to Caa3, previously on 2/21/2006 Assigned Aaa -- Cl. 1-A-2, Downgraded to Ca, previously on 2/21/2006 Assigned Aaa -- Cl. 2-A-1, Confirmed at Aaa, previously on 2/21/2006 Assigned Aaa -- Cl. 2-A-2, Downgraded to Caa3, previously on 2/21/2006 Assigned Aaa -- Cl. 2-A-3A, Downgraded to Caa2, previously on 2/21/2006 Assigned Aaa -- Cl. 2-A-3B, Downgraded to Ca, previously on 2/21/2006 Assigned Aaa -- Cl. M-1, Downgraded to C, previously 3/12/2008 Downgraded to A2 -- Cl. M-2, Downgraded to C, previously 3/12/2008 Downgraded to B1 -- Cl. M-3, Downgraded to C, previously 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-4, Downgraded to C, previously 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-5, Downgraded to C, previously 3/12/2008 Downgraded to Ca -- Cl. M-6, Downgraded to C, previously 3/12/2008 Downgraded to Ca -- Cl. M-7, Downgraded to C, previously 3/12/2008 Downgraded to Ca Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OC10 -- Cl. 1-A, Downgraded to Caa3, previously on 9/17/2008 Ba1 Placed Under Review for Possible Downgrade -- Cl. 2-A-1, Downgraded to B3, previously on 9/17/2008 Aa2 Placed Under Review for Possible Downgrade -- Cl. 2-A-3, Downgraded to Ca, previously on 9/17/2008 Ba2 Placed Under Review for Possible Downgrade -- Cl. 2-A-2A, Downgraded to Caa3, previously on 9/17/2008 A1 Placed Under Review for Possible Downgrade -- Cl. 2-A-2B, Downgraded to Ca, previously on 9/17/2008 Ba3 Placed Under Review for Possible Downgrade -- Cl. M-1, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-2, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-3, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-4, Downgraded to C, previously on 3/12/2008 Downgraded to Caa1 and Placed Under Review for Possible Downgrade -- Cl. M-5, Downgraded to C, previously on 3/12/2008 Downgraded to Caa1 and Placed Under Review for Possible Downgrade -- Cl. M-6, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-7, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-8, Downgraded to C, previously on 11/6/2007 Downgraded to Ca Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OC11 -- Cl. 1-A, Downgraded to Caa3, previously on 7/17/2008 Downgraded to Ba1 -- Cl. 2-A-1, Downgraded to Ba2, previously on 7/17/2008 Downgraded to Aa3 -- Cl. 2-A-3, Downgraded to Ca, previously on 7/17/2008 Downgraded to Ba2 -- Cl. 2-A-2A, Downgraded to Caa3, previously on 7/17/2008 Downgraded to A1 -- Cl. 2-A-2B, Downgraded to C, previously on 7/17/2008 Downgraded to Ba3 -- Cl. M-1, Downgraded to C, previously on 3/12/2008 Downgraded to B2 and Placed Under Review for Possible Downgrade -- Cl. M-2, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-3, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-4, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-5, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-6, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-7, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-8, Downgraded to C, previously on 3/12/2008 Downgraded to Ca Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OC2 -- Cl. 1-A, Downgraded to Caa3, previously on 7/17/2008 Downgraded to A1 -- Cl. 2-A-1, Confirmed at Aaa, previously on 4/7/2006 Assigned Aaa -- Cl. 2-A-2, Downgraded to Caa1, previously on 4/7/2006 Assigned Aaa -- Cl. 2-A-3, Downgraded to Caa3, previously on 7/17/2008 Downgraded to A1 -- Cl. M-1, Downgraded to C, previously on 3/12/2008 Downgraded to B3 -- Cl. M-2, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-3, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-4, Downgraded to C, previously on 3/12/2008 Downgraded to Caa1 and Placed Under Review for Possible Downgrade -- Cl. M-5, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-6, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-7, Downgraded to C, previously on 3/12/2008 Downgraded to Ca Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OC3 -- Cl. 1-A-1, Downgraded to Caa3, previously on 9/17/2008 Aaa Placed Under Review for Possible Downgrade -- Cl. 1-A-2, Downgraded to Ca, previously on 9/17/2008 Baa1 Placed Under Review for Possible Downgrade -- Cl. 2-A-1, Downgraded to A1, previously on 9/17/2008 Aa1 Placed Under Review for Possible Downgrade -- Cl. 2-A-2, Downgraded to Caa2, previously on 9/17/2008 A2 Placed Under Review for Possible Downgrade -- Cl. 2-A-3, Downgraded to Caa3, previously on 9/17/2008 Baa1 Placed Under Review for Possible Downgrade -- Cl. M-1, Downgraded to C, previously on 9/17/2008 B3 Placed Under Review for Possible Downgrade -- Cl. M-2, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-3, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-4, Downgraded to C, previously on 3/12/2008 Downgraded to Caa1 and Placed Under Review for Possible Downgrade -- Cl. M-5, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-6, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-7, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-8, Downgraded to C, previously on 3/12/2008 Downgraded to Ca Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OC4 -- Cl. 1-A, Downgraded to Caa3, previously on 7/17/2008 Downgraded to A1 -- Cl. 2-A-1, Downgraded to Ba1, previously on 6/12/2006 Assigned Aaa -- Cl. 2-A-2A, Downgraded to Caa2, previously on 6/12/2006 Assigned Aaa -- Cl. 2-A-2B, Downgraded to Ca, previously on 7/17/2008 Downgraded to A1 -- Cl. 2-A-3, Downgraded to Caa3, previously on 7/17/2008 Downgraded to A1 -- Cl. M-1, Downgraded to C, previously on 3/12/2008 Downgraded to B3 -- Cl. M-2, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-3, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-4, Downgraded to C, previously on 3/12/2008 Downgraded to Caa1 and Placed Under Review for Possible Downgrade -- Cl. M-5, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-6, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-7, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-8, Downgraded to C, previously on 3/12/2008 Downgraded to Ca Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OC5 -- Cl. 1-A, Downgraded to Caa3, previously on 7/17/2008 Downgraded to Baa2 -- Cl. 2-A-1, Downgraded to A2, previously on 7/18/2006 Assigned Aaa -- Cl. 2-A-2A, Downgraded to Caa3, previously on 7/17/2008 Downgraded to A3 -- Cl. 2-A-2B, Downgraded to Caa2, previously on 7/18/2006 Assigned Aaa -- Cl. 2-A-2C, Downgraded to Ca, previously on 7/17/2008 Downgraded to Baa1 -- Cl. 2-A-3, Downgraded to Caa3, previously on 7/17/2008 Downgraded to Baa2 -- Cl. M-1, Downgraded to C, previously on 3/12/2008 Downgraded to B2 and Placed Under Review for Possible Downgrade -- Cl. M-2, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-3, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-4, Downgraded to C, previously on 3/12/2008 Downgraded to Caa1 and Placed Under Review for Possible Downgrade -- Cl. M-5, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-6, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-7, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-8, Downgraded to C, previously on 3/12/2008 Downgraded to Ca Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OC6 -- Cl. 1-A, Downgraded to Caa3, previously on 9/17/2008 Ba1 Placed Under Review for Possible Downgrade -- Cl. 2-A-1, Downgraded to B3, previously on 9/17/2008 Aa3 Placed Under Review for Possible Downgrade -- Cl. 2-A-2A, Downgraded to Caa3, previously on 9/17/2008 Aa1 Placed Under Review for Possible Downgrade -- Cl. 2-A-2B, Downgraded to Ca, previously on 9/17/2008 Ba3 Placed Under Review for Possible Downgrade -- Cl. 2-A-3, Downgraded to Caa3, previously on 9/17/2008 Ba2 Placed Under Review for Possible Downgrade -- Cl. M-1, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-2, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-3, Downgraded to C, previously on 3/12/2008 Downgraded to Caa1 and Placed Under Review for Possible Downgrade -- Cl. M-4, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-5, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-6, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-7, Downgraded to C, previously on 3/12/2008 Downgraded to Ca Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OC7 -- Cl. 1-A, Downgraded to Caa3, previously on 9/17/2008 Baa3 Placed Under Review for Possible Downgrade -- Cl. 2-A-1, Downgraded to Ba3, previously on 9/17/2008 Aa2 Placed Under Review for Possible Downgrade -- Cl. 2-A-2B, Downgraded to Ca, previously on 9/17/2008 Ba2 Placed Under Review for Possible Downgrade -- Cl. 2-A-2A, Downgraded to Caa3, previously on 9/17/2008 Aaa Placed Under Review for Possible Downgrade -- Cl. 2-A-3, Downgraded to Ca, previously on 9/17/2008 Ba1 Placed Under Review for Possible Downgrade -- Cl. M-1, Downgraded to C, previously on 3/12/2008 Downgraded to B2 and Placed Under Review for Possible Downgrade -- Cl. M-2, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-3, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-4, Downgraded to C, previously on 3/12/2008 Downgraded to Caa1 and Placed Under Review for Possible Downgrade -- Cl. M-5, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-6, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-7, Downgraded to C, previously on 3/12/2008 Downgraded to Ca Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OC8 -- Cl. 1-A-1, Downgraded to Caa3, previously on 9/17/2008 Baa2 Placed Under Review for Possible Downgrade -- Cl. 1-A-2, Downgraded to Caa3, previously on 9/17/2008 Aaa Placed Under Review for Possible Downgrade -- Cl. 1-A-3, Downgraded to Caa3, previously on 9/17/2008 Baa3 Placed Under Review for Possible Downgrade -- Cl. 2-A-1A, Downgraded to A1, previously on 9/17/2008 Aaa Placed Under Review for Possible Downgrade -- Cl. 2-A-1B, Downgraded to A1, previously on 9/17/2008 Aaa Placed Under Review for Possible Downgrade -- Cl. 2-A-1D, Downgraded to A1, previously on 9/17/2008 Aaa Placed Under Review for Possible Downgrade -- Cl. 2-A-1E, Downgraded to A3, previously on 9/17/2008 Aaa Placed Under Review for Possible Downgrade -- Cl. 2-A-2A, Downgraded to Caa3, previously on 9/17/2008 Aaa Placed Under Review for Possible Downgrade -- Cl. 2-A-2B, Downgraded to Caa3, previously on 9/17/2008 Aaa Placed Under Review for Possible Downgrade -- Cl. 2-A-2C, Downgraded to Ca, previously on 9/17/2008 Ba2 Placed Under Review for Possible Downgrade -- Cl. 2-A-3, Downgraded to Ca, previously on 9/17/2008 Ba1 Placed Under Review for Possible Downgrade -- Cl. M-1, Downgraded to C, previously on 3/12/2008 Downgraded to B2 and Placed Under Review for Possible Downgrade -- Cl. M-2, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-3, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-4, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-5, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-6, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-7, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-8, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-9, Downgraded to C, previously on 3/12/2008 Downgraded to Ca Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OC9 -- Cl. A-1, Downgraded to B3, previously on 7/17/2008 Downgraded to Aa3 -- Cl. A-2A, Downgraded to Caa3, previously on 7/17/2008 Downgraded to A1 -- Cl. A-2B, Downgraded to Ca, previously on 7/17/2008 Downgraded to Ba3 -- Cl. A-3, Downgraded to Ca, previously on 7/17/2008 Downgraded to Ba2 -- Cl. M-1, Downgraded to C, previously on 3/12/2008 Downgraded to B2 and Placed Under Review for Possible Downgrade -- Cl. M-2, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-3, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-4, Downgraded to C, previously on 3/12/2008 Downgraded to B3 and Placed Under Review for Possible Downgrade -- Cl. M-5, Downgraded to C, previously on 3/12/2008 Downgraded to Caa1 and Placed Under Review for Possible Downgrade -- Cl. M-6, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-7, Downgraded to C, previously on 3/12/2008 Downgraded to Ca -- Cl. M-8, Downgraded to C, previously on 3/12/2008 Downgraded to Ca The ratings on the notes were assigned by evaluating factors determined to be applicable to the credit profile of the notes, such as i) the nature, sufficiency, and quality of historical performance information regarding the asset class as well as for the transaction sponsor, ii) an analysis of the collateral, iii) an analysis of the policies, procedures and alignment of interests of the key parties to the transaction, most notably the originator and the servicer, iv) an analysis of the transaction's allocation of collateral cashflow and capital structure, v) an analysis of the transaction's governance and legal structure, and (vi) a comparison of these attributes against those of other similar transactions. CPI PLASTICS: Selling Assets; Feb. 24 Deadline for Offers Set ------------------------------------------------------------- Deloitte & Touche Inc., in its capacity as the Court-appointed interim receiver and receiver and manager of CPI Plastics Group Limited and its affiliates, CPI Plastics Group (Canada) Ltd., CPI Plastics Group, Inc., Crila Investments Inc., and Crila Plastics Industries, Inc., is inviting offers for the purchase of the business or assets of the companies. The Receiver's preference is for potential purchasers with a turn- key interest in all or substantially all of the operating assets of the companies. The Receiver will also consider offers for individual parcels of assets. All binding offers must be received by the Receiver no later than 5:00 p.m. EST, Feb. 24, 2009. For more information, Deloitte & Touche may be reached at: Deloitte & Touche Inc. Attn: Mr. Huey Lee, Vice President Brookfield Place 181 Bay Street, Suite 1400 Toronto, Ontario, M5J2V1 Canada Tel: (416) 501-4496 Fax: (416) 601-6690 email: huelee@deloitte.ca As reported in the Troubled Company Reporter on Jan. 22, 2009, CPI Plastics Group Ltd., the plastics maker based in Mississauga, Ontario, sought bankruptcy protection in Canada and the U.S., blaming the deepening U.S. recession and rising prices of raw materials, Bloomberg News reports. CPI Plastics, in its Chapter 15 petition, asked the U.S. Bankruptcy Court for the Eastern District of Wisconsin to enter an order requiring U.S. creditors be governed by its Canadian reorganization and blocking them from filing lawsuits. About CPI Plastics CPI Plastics Group Ltd. -- http://www.cpiplastics.com/-- is a Canadian-based plastics processor and a recognized international leader in thermoplastics profile design, engineering, processing and value added manufacturing. CPI is comprised of three key divisions. CPI's Outdoor Living Products Group manufactures and markets Eon(R) Decking and Fencing Systems, as well as high value- added cladding and accessory components to the outdoor hot tub industry. CPI's Film Products Group manufactures and markets the Rack Sack(R) household refuse management system and a wide range of branded and private label household and industrial refuse bags. CPI's Custom Products Group supplies leading OEM manufacturers with custom profile solutions to enhance quality, cost effectiveness and process ability. Based in Mississauga, Ontario and Pleasant Prairie, Wisconsin, the companies operate from six plants occupying 530,000 square feet of manufacturing space and housing over 135 extruders. CRC HEALTH: Moody's Gives Negative Outlook; Affirms 'B2' Ratings ---------------------------------------------------------------- Moody's Investors Service changed CRC Health Corporation's rating outlook to negative from stable. Moody's also downgraded CRC's Speculative Grade Liquidity rating to SGL-3 from SGL-2. Concurrently Moody's affirmed CRC's current long term ratings, including the company's B2 Corporate Family Rating. CRC's B2 Corporate Family Rating reflects the expectation that the company will continue to operate with very high leverage and modest interest coverage. Additionally, pressures on the operating performance of the youth division have impeded improvements in credit metrics. Additionally, the SGL-3 rating reflects the weakened but adequate liquidity position of the company, characterized by Moody's expectation of limited access to the remaining undrawn revolver and less certainty around the company's ability to comply with the financial covenants included in the credit agreement. The negative rating outlook reflects the company's weakened liquidity position and the expectation that CRC will face increasing difficulty in improving credit metrics in the near term due to limited free cash flow and operating difficulties in the youth segment, including the expectation that economic factors that have contributed to the shortfall in that division could be prolonged and deeper than originally contemplated. Following is a summary of Moody's rating actions. Ratings downgraded: -- Speculative Grade Liquidity Rating, to SGL-3 from SGL-2 Ratings affirmed/LGD assessments revised: -- Corporate Family Rating, B2 -- Probability of Default Rating, B2 -- $100 million senior secured revolving credit facility, to Ba3 (LGD2, 27%) from Ba3 (LGD2, 29%) -- $420 million senior secured term loan, to Ba3 (LGD2, 27%) from Ba3 (LGD2, 29%) -- $200 million senior subordinated notes, to Caa1 (LGD5, 78%) from Caa1 (LGD5, 80%) The rating outlook was changed to negative from stable. The last rating action was on January 24, 2008 when the ratings of CRC were affirmed. CRC's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record of tolerance for risk. These attributes were compared against other issuers both within and outside of CRC's core industry and CRC's ratings are believed to be comparable to those other issuers of similar credit risk. CRC is a wholly owned subsidiary of CRC Health Group, Inc. Headquartered in Cupertino, California, CRC owns and operates behavioral healthcare facilities and clinics specializing in the treatment of chemical dependency and other addiction diseases. At September 30, 2008, CRC operated 109 residential and outpatient treatment facilities in 22 states. The company also provides youth treatment services through residential schools, wilderness programs and weight loss programs. At September 30, 2008, youth treatment services were administered at 29 facilities in 10 states. CRC recognized revenue of approximately $479 million for the twelve months ended September 30, 2008. CSC INVESTMENTS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: CSC Investments, LLC 31 Allard Blvd. New Orleans, LA 70119 Bankruptcy Case No.: 09-10191 Chapter 11 Petition Date: January 23, 2009 Court: United States Bankruptcy Court Eastern District of Louisiana (New Orleans) Judge: Jerry A. Brown Debtor's Counsel: Robin R. DeLeo, Esq. 800 Ramon St. Mandeville, LA 70448 Tel: (985) 727-1664 Fax: (985) 727-4388 Email: jennifer@northshoreattorney.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/laeb09-10191.pdf The petition was signed by Valeton J. Dansereau. DAE AVIATION: Moody's Junks Probability of Default Rating --------------------------------------------------------- Moody's Investors Service lowered the Corporate Family and Probability of Default ratings of DAE Aviation Holdings, Inc. to Caa2 from B3. At the same time, the company's secured bank credit facility ratings were downgraded to B3 from B1 and the rating on the company's senior unsecured notes was lowered to Caa3 from Caa2. The rating action stems from Moody's concerns that DAE's current capital structure may not be sustainable amidst persistent and mounting broad economic challenges coupled with the company's thin liquidity. The outlook is negative. Ratings lowered: Issuer: DAE Aviation Holdings, Inc. * Corporate Family Rating, to Caa2 from B3 * Probability of Default Rating, to Caa2 from B3 * $100 million secured revolving credit to B3 (LGD-3, 30%) from B1 (LGD-3, 30%) * $479 million secured term loans to B3 (LGD-3, 30%) from B1 (LGD-3, 30%) * $325 million senior unsecured notes, to Caa3 (LGD5, 82%) from Caa2 (LGD-5, 82%) The global economic environment and credit market conditions have become more challenging since DAE's ratings were affirmed at B3 and its outlook changed to negative in July 2008. While the rating action at that time considered that the general aviation market in North America could be subject to additional pressures, these pressures have intensified in recent months. In Moody's opinion, lower regional and business jet activity is likely to result in reduced demand for DAE's maintenance, repair and overhaul services. Similar concerns prevail over the company's smaller business segments, which include aircraft completion and modification capabilities. As a result, DAE's financial performance through much of 2009 is expected to be below the agency's prior expectations. In turn, the company's ability to comply with forward covenants in its bank credit facility is uncertain, particularly towards the end of 2009 once pre-defined covenant step-downs occur. This may require that the company obtain additional external capital or relief from its banking syndicate at a time when credit is restrained. The negative outlook highlights the potential that default risks could heighten should negative operating trends accelerate, or covenant pressures continue without abatement. Moody's last rating action on DAE was on July 31, 2008 at which time the company's B3 rating was affirmed and its rating outlook was changed to negative from stable. DAE Aviation Holdings, Inc., with executive offices in Tempe, Arizona, is a 100%-owned subsidiary of Dubai Aerospace Enterprises LTD, and is a leading provider of maintenance, repair and overhaul, and aircraft completion & modification services to the regional, business, military and general aviation industries. The company was formed in 2007 through the acquisition of the MRO and FBOs of Standard Aero Holdings, Inc., and Piedmont/Hawthorne Holdings, Inc. (d/b/a Landmark Aviation) which was valued at approximately $1.9 billion. The FBO business was sold in February 2008. Annual revenue of the continuing MRO businesses is approximately $1.4 billion. DAVID MALTZ: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: David A. Maltz Freya J. Maltz 2 Navaho Drive Canton, MA 02021 Bankruptcy Case No.: 09-10416 Chapter 11 Petition Date: January 21, 2009 Court: United States Bankruptcy Court District of Massachusetts (Boston) Judge: William C. Hillman Debtor's Counsel: Alexander L. Cataldo, Esq. Alexander L. Cataldo, P.C. 894 Main Street Norwell, MA 02061 Tel: (781) 659-4849 Fax: (781) 659-7801 Email: alcpc@verizon.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mab09-10416.pdf The petition was signed by David A. Maltz and Freya J. Maltz. DONALD SHMALTZ: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Donald Edgar Schmaltz Robin Lucille Schmaltz d/b/a Eagle Consultant(s), Inc. d/b/a Eagle Consulting 3557 Sedgemoor Circle Carmel, IN 46032 Bankruptcy Case No.: 09-00568 Chapter 11 Petition Date: January 21, 2009 Court: United States Bankruptcy Court Southern District of Indiana (Indianapolis) Judge: Anthony J. Metz III Debtor's Counsel: L. Leona Frank, Esq. Frank Law Office, P.C. 8395 Keystone Crossing, Suite 104 Indianapolis, IN 46240 Tel: (317) 259-9400 Fax: (317) 259-7481 Email: franklawoffice@sbcglobal.net Total Assets: $1,999,931 Total Debts: $1,652,733 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/insb09-00568.pdf The petition was signed by Donald Edgar Schmaltz and Robin Lucille Schmaltz. DOUBLE JJ: Court Allows Bank to Foreclose on Firm ------------------------------------------------- The Associated Press reports that the Hon. Jeffrey Hughes of the U.S. Bankruptcy Court for the Western District of Michigan has ruled that a bank may foreclose on Double JJ Ranch Resort in western Michigan. WOOD-TV relates that a foreclosure sale can be held after April 13. According to The Muskegon Chronicle, Judge Hughes has approved an agreement between BankFirst and Thomas Bruinsma -- the bankruptcy trustee for Double JJ -- to hold a festival from July 3 to 5 at the resort near Rothbury. About Double JJ Double JJ Resort Ranch operates a resort in Rothbury, Michigan. The Debtor filed for Chapter 11 bankruptcy on July 18, 2008 (Bankr. W.D. Mich. 08-06296). Steven L. Rayman, Esq., at Rayman & Stone, and Michael S. McElwee, Esq., at Varnum, Riddering, Schmidt & Howlett, LLP, represents the Debtor as counsel. When the Debtor filed for protection from its creditors, it listed $0 to $50,000 in total assets, and $0 to $50,000 in total debts. DOVCOFAB LLC: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: DOVCOFAB, LLC 1700 Ridgely Street Baltimore, MD Bankruptcy Case No.: 09-10943 Chapter 11 Petition Date: January 21, 2009 Court: United States Bankruptcy Court District of Maryland (Baltimore) Judge: Duncan W. Keir Debtor's Counsel: Maria Ellena Chavez-Ruark, Esq. Tydings & Rosenberg, LLP 100 East Pratt Street 26th Floor Baltimore, MD 21202 Tel: (410) 752-9700 Fax: (410) 727-5460 Email: mruark@tydingslaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mdb09-10943.pdf The petition was signed by Robert W. Tisone, President and Secretary of the company. ENERLUME ENERGY: Paul Belliveau Discloses Ownership of Shares ------------------------------------------------------------- Paul M. Belliveau, a director of EnerLume Energy Management Corp., disclosed in a regulatory filing dated January 26, 2009, that it may be deemed to beneficially own shares of the company's common stock: Date Expiration No. of Security Exercisable Date Shares Price -------- ----------- ---------- ------ ----- 18% Convertible Unsecured Promissory Note 06/02/2009 06/02/2009 212,766 0.47 Warrants to Purchase Common Stock 12/02/2008 12/02/2013 50,000 0.54 About EnerLume Energy Headquartered in Hamden, Conn., EnerLume Energy Management Corp. (OTC BB: ENLU) -- http://www.enerlume.com/-- through its subsidiaries, provides energy management conservation products and services in the United States. Its focus is energy conservation, which includes a proprietary digital microprocessor for reducing energy consumption on lighting systems, and the installation and design of electrical systems, energy management systems, telecommunication networks, control panels and lighting systems. New York-based Mahoney Cohen & Company, CPA, P.C., raised substantial doubt about the ability of EnerLume Energy Management Corp., formerly Host America Corporation, to continue as a going concern after it audited the company's financial statements for the year ended June 30, 2008. The company has suffered recurring losses from continuing operations, has negative cash flows from operations, has a working capital and stockholders' deficiency at September 30, 2008 and is currently involved in litigation that can have an adverse effect on the company's operations. These conditions raise substantial doubt about the company's ability to continue as a going concern. As of September 30, 2008, the company's balance sheet showed total assets of $1,845,922 and total liabilities of $8,108,242, resulting in total stockholders' deficiency of $6,262,320. For the three months ended September 30, 2008 and 2007, the company posted net losses of $2,343,865 and $1,140,076. EVATONE INC: To Stop Optical Disc Manufacturing at Largo Facility ----------------------------------------------------------------- Tampa Bay Business Journal reports that Eva-tone Inc. will stop making optical disc at its Largo facility after the first quarter of this year. Eva-tone said in a statement that it decided to cease optical disc manufacturing due to the decline is CD and DVD sales. According to a statement by Eva-tone CEO Carl Evans, the company's optical disc manufacturing equipment is aging, and the company faced reinvesting in new technology or closing the division. Court documents say that overhead associated with optical disc manufacturing is more than half of Eva-tone's expenses. Tampa Bay Business relates that almost $12 million of Eva-tone's projected $28 million in 2008 revenue is from sales of optical disc products. According to Tampa Bay Business, Eva-tone is asking the court's permission to sell its optical disc segment. Eva-tone is forming a strategic alliance with a global provider of optical discs to provide discs for Eva-tone's existing accounts, Tampa Bay Business states. Headquartered in Clearwater, Florida, Eva-tone Inc. -- http://www.evatone.com-- offers audio duplication, compact disc and CD-ROM replication. The company filed for Chapter 11 protection on November 3, 2008 (Bankr. M.D. Fla. Case No. 08-17445). Rod Anderson, Esq., at Holland & Knight LLP, represents the Debtor. When the Debtor filed for protection from its creditors, it listed assets and debts between $10 million and $50 million each. FANNIE MAE: To Extend Eviction Suspension Through February 28 ------------------------------------------------------------- Fannie Mae will extend its suspension of evictions from Fannie Mae-owned single-family properties through Feb. 28, 2009. The suspension applies to all single-family properties including owner-occupied properties that have been foreclosed upon as well as foreclosed properties occupied by renters. Fannie Mae this month began implementing its National Real Estate Owned Rental Policy that allows qualified renters in Fannie Mae- owned foreclosed properties to stay in their homes. The new policy applies to renters occupying any type of single-family foreclosed properties at the time Fannie Mae acquires the property. Eligible renters will be offered a new month-to-month lease with Fannie Mae or financial assistance for their transition to new housing should they choose to vacate the property. The properties must meet state laws and local code requirements for a rental property. On behalf of the company, property managers are contacting renters in Fannie Mae-owned foreclosed properties to notify them of their options. Renters in Fannie Mae-owned properties can call 1-800-7-FANNIE for further information about their options. Citing some real estate agents, Nick Timiraos at The Wall Street Journal reports that the unwillingness of Fannie Mae and Freddie Mac to evict tenants from properties they inherit could slow the housing market's recovery. WSJ relates that Fannie Mae will rely on real estate agents in handling maintenance and rent collection for some of the properties. According to the report, the ages said that renting the homes could slow sales because homes don't sell as well with tenants living in them. WSJ quoted Brett Barry -- an agent with Realty Executives that sells properties that now include tenants eligible for a Fannie Mae lease -- as saying, "Fannie Mae is in the business of financing homes and selling them, but now this change is going to result in properties probably remaining on the market. Now, if someone calls me at 3 a.m. with a toilet malfunction or a roof leak, I'm responsible for handling that." According to WSJ, Fannie Mae and Freddie Mac will market the homes for sale while they are rented and leases will be transferred to the buyers. The policy might limit the pool of buyers to investors, and it could lead rental prices to dictate sale prices and further lessen values, WSJ states, citing real-estate agents. According to the report, real estate David Peeples said, "If you've got a house worth $350,000 and rent it for $1,200, no investor is going to buy that" because that monthly rent wouldn't cover the mortgage payments. "If we get a good renter and set the rental rate at a good market rate, then it really should be attractive to an investor," WSJ quoted Fannie Mae credit-loss management vice president Jason Allnutt as saying. WSJ reports that some property managers argue that it is better to have tenants in the homes than to leave them vacant. The report states that Betsy Morgan, Prudential Tropical Realty's supervisor of the Tampa residential-property management, said, "Homes will not sit there and quietly be destroyed, even if the tenant's a little sloppy in their upkeep." Fannie Mae Redemption Fannie Mae will redeem the principal amounts indicated for the following securities issues on the redemption dates indicated below at a redemption price equal to 100% of the principal amount redeemed, plus accrued interest thereon to the date of redemption: Principal Security Interest Maturity CUSIP Redemption Amount Type Rate Date Date $50,000,000 MTN 3.550% Feb. 9, 2011 3136F9PE7 Feb. 9, 2009 $50,000,000 MTN 3.050% Aug. 11, 2010 3136F8W43 Feb. 11, 2009 $500,000,000 MTN 3.125% Feb. 11, 2011 31398ANC2 Feb. 11, 2009 $250,000,000 MTN 4.250% Feb. 11, 2015 3136F8Y58 Feb. 11, 2009 Monthly Summery Report for December 2008 In December 2008, Fannie Mae provided $48.7 billion in liquidity to the market through Net Retained Commitments of $11.7 billion and $37.1 billion in MBS Issuances. Fannie Mae's Book of Business grew at a compound annualized rate of 9.7% in December. Gross Mortgage Portfolio grew at a compound annualized rate of 7.0%. Fannie Mae MBS and Other Guarantees grew at a compound annualized rate of 7.8%. The Conventional Single-Family Serious Delinquency Rate rose 24 basis points in November 2008 to 2.13%. The Multifamily Serious Delinquency Rate rose four basis points to 0.25% in November. The Effective Duration Gap on Fannie Mae's portfolio averaged one month in December 2008. Fannie Mae's monthly summary report is available at: http://ResearchArchives.com/t/s?38f8 About Freddie Mac The Federal Home Loan Mortgage Corporation -- (FHLMC) NYSE: FRE -- commonly known as Freddie Mac, is a stockholder-owned government- sponsored enterprise authorized to make loans and loan guarantees. Freddie Mac was created in 1970 to provide a continuous and low cost source of credit to finance America's housing. Freddie Mac conducts its business primarily by buying mortgages from lenders, packaging the mortgages into securities and selling the securities -- guaranteed by Freddie Mac -- to investors. Mortgage lenders use the proceeds from selling loans to Freddie Mac to fund new mortgages, constantly replenishing the pool of funds available for lending to homebuyers and apartment owners. About Fannie Mae The Federal National Mortgage Association -- (FNMA) (NYSE: FNM) -- commonly known as Fannie Mae, is a shareholder-owned U.S. government-sponsored enterprise. Fannie Mae has a federal charter and operates in America's secondary mortgage market, providing mortgage bankers and other lenders funds to lend to home buyers at low rates. Fannie Mae was created in 1938, under President Franklin D. Roosevelt, at a time when millions of families could not become homeowners, or risked losing their homes, for lack of a consistent supply of mortgage funds across America. The government established Fannie Mae to expand the flow of mortgage funds in all communities, at all times, under all economic conditions, and to help lower the costs to buy a home. In 1968, Fannie Mae was re-chartered by the U.S. Congress as a shareholder-owned company, funded solely with private capital raised from investors on Wall Street and around the world. Fannie Mae is the U.S. largest mortgage buyer, according to The New York Times. Conservatorship As reported by the Troubled Company Reporter, the U.S. government took direct responsibility for Fannie Mae and Freddie Mac, placing the government sponsored enterprises under conservatorship on September 7, 2008. James B. Lockhart, director of Federal Housing Finance Agency, said that Fannie Mae and Freddie Mac share the critical mission of providing stability and liquidity to the housing market. Between them, the Enterprises have $5.4 trillion of guaranteed mortgage-backed securities (MBS) and debt outstanding, which is equal to the publicly held debt of the United States. Among the key components of the conservatorship, the FHFA, as conservator, assumed the power of the Board and management. FANNIE MAE: Will Work With NACA to Prevent Foreclosures ------------------------------------------------------- James R. Hagerty at The Wall Street Journal reports that Fannie Mae has confirmed that it has reached an agreement to work with nonprofit Neighborhood Assistance Corp. of America to prevent foreclosures. The NACA, says WSJ, acts as an intermediary between borrowers and lenders. It already collaborates with Bank of America Corp., Wells Fargo & Co., and several other large lenders in reworking troubled mortgages, according to WSJ. The NACA examines borrowers' budgets to determine how much they can afford to pay for their mortgage and then reduces the interest rate and, in some cases, the principal, WSJ states. WSJ relates that Fannie Mae and NACA will rework home mortgages to make them easier to afford. The agreement between the two firms is one of several measures that Fannie Mae and Freddie Mac, are working on to stop the increase in foreclosures, the report says. NACA CEO Bruce Marks, according to WSJ, had described Fannie Mae a "major roadblock" to foreclosure-prevention efforts and led a protest outside that company's Washington headquarters in October 2008. Citing Mr. Marks, WSJ reports that NACA is negotiating a similar agreement with Freddie Mac. Fannie Mae and Freddie Mac, WSJ relate, own or guarantee almost half of home mortgages in the U.S. Fannie Mae and Freddie Mac must consult with the Federal Housing Finance Agency before proceeding with the NACA cooperation, WSJ states. Fannie Mae Redemption Fannie Mae will redeem the principal amounts indicated for the following securities issues on the redemption dates indicated below at a redemption price equal to 100 percent of the principal amount redeemed, plus accrued interest thereon to the date of redemption: Principal Security Interest Maturity CUSIP Redemption Amount Type Rate Date Date $500,000,000 MTN 3.550% Feb. 8, 2011 31398AMU3 Feb. 8, 2009 $25,000,000 MTN 4.000% Nov. 8, 2011 3136F9ME0 Feb. 8, 2009 About Freddie Mac The Federal Home Loan Mortgage Corporation -- (FHLMC) NYSE: FRE -- commonly known as Freddie Mac, is a stockholder-owned government- sponsored enterprise authorized to make loans and loan guarantees. Freddie Mac was created in 1970 to provide a continuous and low cost source of credit to finance America's housing. Freddie Mac conducts its business primarily by buying mortgages from lenders, packaging the mortgages into securities and selling the securities -- guaranteed by Freddie Mac -- to investors. Mortgage lenders use the proceeds from selling loans to Freddie Mac to fund new mortgages, constantly replenishing the pool of funds available for lending to homebuyers and apartment owners. About Fannie Mae The Federal National Mortgage Association -- (FNMA) (NYSE: FNM) -- commonly known as Fannie Mae, is a shareholder-owned U.S. government-sponsored enterprise. Fannie Mae has a federal charter and operates in America's secondary mortgage market, providing mortgage bankers and other lenders funds to lend to home buyers at low rates. Fannie Mae was created in 1938, under President Franklin D. Roosevelt, at a time when millions of families could not become homeowners, or risked losing their homes, for lack of a consistent supply of mortgage funds across America. The government established Fannie Mae to expand the flow of mortgage funds in all communities, at all times, under all economic conditions, and to help lower the costs to buy a home. In 1968, Fannie Mae was re-chartered by the U.S. Congress as a shareholder-owned company, funded solely with private capital raised from investors on Wall Street and around the world. Fannie Mae is the U.S. largest mortgage buyer, according to The New York Times. Conservatorship As reported by the Troubled Company Reporter, the U.S. government took direct responsibility for Fannie Mae and Freddie Mac, placing the government sponsored enterprises under conservatorship on September 7, 2008. James B. Lockhart, director of Federal Housing Finance Agency, said that Fannie Mae and Freddie Mac share the critical mission of providing stability and liquidity to the housing market. Between them, the Enterprises have $5.4 trillion of guaranteed mortgage-backed securities (MBS) and debt outstanding, which is equal to the publicly held debt of the United States. Among the key components of the conservatorship, the FHFA, as conservator, assumed the power of the Board and management. FIDELITY BANKERS: March 24 Hearing Set for Liquidating Plan ----------------------------------------------------------- The State Corporation Commission of the Commonwealth of Virginia, as Receiver of Fidelity Bankers Life Insurance Company Trust, now known as First Dominion Mutual Life Insurance Company announced that a hearing will be held before the Commission at 1300 East Main Street, 2nd Floor, Richmond, Virginia, on March 24, 2009, at 10:00 a.m., Eastern Time, to approve plans of liquidation for the company. All persons who intend to support or oppose the Plan of Liquidation are required, no later than 30 days before the hearing, to file with the Commission, and provide a copy to the Deputy Receiver, a notice of participation as respondent, which shall set forth a full statement of the basis of the support or opposition including: (i) a precise statement of the interest of the respondent; (ii) a statement of the specific relief sought, to the extent then known; (iii) the actual and legal basis for the relief sought; (iv) the substance of the anticipated testimony in support or opposition; and (v) a list of exhibits to be offered in support of, or in opposition to, the Plans of Liquidation. No later than 14 days before the hearing, prepared testimony and exhibits of each witness expecting to present direct testimony must be filed. For any questions, parties may call (888) 660-7083 or submit any questions or requests in writing to Fidelity Bankers Life Insurance Company Trust at P.O. Box 83438, in Lincoln, Nebraska 68501. Fidelity Bankers Life Insurance Company, an insurer domiciled in Virginia, was ordered into rehabilitation in May 1991. The receiver negotiated a plan with Hartford Life Insurance Company for restructuring and reinsuring the Fidelity Bankers policies, supported by the thirty-nine state life and health insurance guaranty associations affected by the insolvency. Hartford's assumption occurred in September of 1993. The seven-year plan ended in September 2000. FIRST DOMINION: March 24 Hearing Set to Approve Liquidating Plans ----------------------------------------------------------------- The State Corporation Commission of the Commonwealth of Virginia, as Receiver of Fidelity Bankers Life Insurance Company Trust, now known as First Dominion Mutual Life Insurance Company announced that a hearing will be held before the Commission at 1300 East Main Street, 2nd Floor, Richmond, Virginia, on March 24, 2009, at 10:00 a.m., Eastern Time, to approve plans of liquidation for the company. All persons who intend to support or oppose the Plan of Liquidation are required, no later than 30 days before the hearing, to file with the Commission, and provide a copy to the Deputy Receiver, a notice of participation as respondent, which shall set forth a full statement of the basis of the support or opposition including: (i) a precise statement of the interest of the respondent; (ii) a statement of the specific relief sought, to the extent then known; (iii) the actual and legal basis for the relief sought; (iv) the substance of the anticipated testimony in support or opposition; and (v) a list of exhibits to be offered in support of, or in opposition to, the Plans of Liquidation. No later than 14 days before the hearing, prepared testimony and exhibits of each witness expecting to present direct testimony must be filed. For any questions, parties may call (888) 660-7083 or submit any questions or requests in writing to Fidelity Bankers Life Insurance Company Trust at P.O. Box 83438, in Lincoln, Nebraska 68501. Fidelity Bankers Life Insurance Company, an insurer domiciled in Virginia, was ordered into rehabilitation in May 1991. The receiver negotiated a plan with Hartford Life Insurance Company for restructuring and reinsuring the Fidelity Bankers policies, supported by the thirty-nine state life and health insurance guaranty associations affected by the insolvency. Hartford's assumption occurred in September of 1993. The seven-year plan ended in September 2000. FORD MOTOR: $5.9 Bil. Net Loss Won't Affect Moody's 'Caa3' Rating ----------------------------------------------------------------- Moody's Investors Service said that Ford Motor Company's Caa3 Corporate Family Rating and Probability of Default rating, as well as its SGL-4 Speculative Grade Liquidity rating remain unchanged following the company's announcement of net losses of $5.9 billion for the fourth quarter of 2008 and $14.6 billion for the full year. Ford also announced that a $5.5 billion fourth quarter cash burn reduced its gross cash position to $13.4 billion, and that it will draw down $10.1 billion under its committed credit lines. The company has stated that a drawing under the lines will insure availability of the funds in the face of considerable instability and uncertainty within the capital markets. Moody's Caa3 and SGL-4 ratings continue to reflect the severe erosion in US and European automotive demand, the significant pace of cash consumption that Ford will experience through 2009, and the risk that the company will have to undertake some form of balance sheet restructuring in order to achieve the same UAW concessions that General Motors and Chrysler are likely to achieve as a result of the recently-approved government bailout loans. Such a balance sheet restructuring would likely entail a loss for bond holders and would be viewed by Moody's as a distressed exchange and consequently treated as a default for analytic purposes. Ford continues to maintain, based on its current planning assumptions, that it has sufficient automotive liquidity to fund its business plan and product investments, and that it does not need a bridge loan from the US government. A critical element of this liquidity profile is the $10.1 billion being drawn under its secured credit facility which has no financial covenants and no material adverse change provision. The current ratings anticipate that the drawing will be funded by the lenders. Should the funding not take place or should it be materially less that the $10.1 billion committed level, Ford could become more reliant on access to government loans to enhance its liquidity position. In such an event, Ford would be subject to similar balance sheet restructuring provisions as those facing GM and Chrysler, and its long-term rating would be lowered to Ca. The last rating action on Ford was a downgrade of the company's Corporate Family Rating to Caa3 from Caa1 on December 22, 2008. Ford Motor Company, headquartered in Dearborn, Michigan, is a leading global automotive manufacturer. FORD MOTOR: Won't Help Visteon in Its Financial Problems -------------------------------------------------------- Kimberly S. Johnson at The Associated Press reports that Ford Motor Co. CEO Alan Mulally said that it wouldn't come to the aid of one of its main parts dealers, Visteon Corp. As reported by the Troubled Company Reporter on Jan. 27, 2009, Visteon hired Kirkland & Ellis LLP as bankruptcy counsel and Rothschild Inc. as financial adviser to prepare for a possible bankruptcy filing. Visteon's hiring of the experts doesn't mean a bankruptcy filing is imminent. Visteon and its advisers are studying whether it should file for bankruptcy pre-emptively to conserve its cash. According to The AP, Visteon has laid off about 2,800 workers in recent months. Visteon, The AP relates, said earlier this month that it would shift 2,000 additional workers in Michigan to a four-day work week and reduce their salary. The AP states that Visteon delayed its fourth-quarter results. Visteon expects to report lower product sales for the quarter and full-year 2008 and is on track to lay off about 800 salaried workers by the end of the first fiscal quarter, The AP reports. The AP quoted Mr. Mulally as saying, "Visteon and Ford are clearly in a different place." Visteon supplies parts to other auto companies as well and "they have really diversified their portfolio," The AP says, citing Mr. Mulally. The AP says that Ford Motor has taken over plants that Visteon has failed to sell. Ford Motor, according to The AP, hired back workers and helped pay retiree benefits. According to The AP, Visteon is in danger of being delisted from the New York Stock Exchange. The AP relates that Visteon failed to meet a $75 million minimum market capitalization. About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * Moody's Investors Service in December 2008 lowered the Corporate Family Rating and Probability of Default Rating of Ford Motor Company to Caa3 from Caa1 and lowered the company's Speculative Grade Liquidity rating to SGL-4 from SGL-3. The outlook is negative. The downgrade reflects the increased risk that Ford will have to undertake some form of balance sheet restructuring in order to achieve the same UAW concessions that General Motors and Chrysler are likely to achieve as a result of the recently- approved government bailout loans. Such a balance sheet restructuring would likely entail a loss for bond holders and would be viewed by Moody's as a distressed exchange and consequently treated as a default for analytic purposes. FORD MOTOR: Plans to Draw Facility Won't Affect S&P's Junk Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Ford Motor Co. (CCC+/Negative/--) and related entities are not affected by Ford's announcement that it plans to immediately draw nearly all of its $10.6 billion revolving credit facility. In S&P's view, the action does not reflect an imminent danger of Ford's cash balances falling to dangerously low levels. However, it is consistent with S&P's previously stated view that cash outflows during 2009 -- in light of very weak global auto sales -- could eventually test the company's ability to maintain sufficient liquidity throughout 2009. Because of the minimal covenants in the bank facilities, S&P does not currently expect Ford to have problems remaining in compliance during 2009. S&P remains concerned about a potential bankruptcy by one or more of Ford's key suppliers, or several of its smaller suppliers, which could be precipitated by weak production volumes or by a bankruptcy by another Michigan-based automaker. Such an event could require Ford to use some of its liquidity. S&P's opinion remains that S&P could lower the ratings if S&P thought Ford's total liquidity (cash balances and availability under the currently fully drawn revolving credit facility) would drop below $10 billion by the end of 2009. As of the end of 2008, Ford had $13.4 billion in cash and equivalents prior to expected receipt of $10.1 billion from the revolving credit facility. S&P would also expect to lower the ratings if the company were to pursue a distressed debt exchange. Ford used $7.2 billion in cash from automotive operations in the fourth quarter, bringing its cash use for all of 2008 to a very large $19.5 billion. Of this amount, $9.4 billion was related to working capital changes, primarily the effect of declining production volumes on Ford's trade payables. S&P expects some moderation of this negative working capital effect in 2009, although S&P does not expect a substantial benefit from working capital because S&P believes this would require significant improvement in industry demand. S&P expects U.S. light-vehicle sales of 10.0 million units in 2009, a 24% drop from 2008 levels. FOUNTAIN POWERBOATS: Receives Non-Compliance Notice From NYSE ------------------------------------------------------------- Fountain Powerboat Industries, Inc., received notice from the NYSE Alternext US, successor to the American Stock Exchange, that it is not in compliance with the Exchange's standards for the continued listing of its common stock and, as a result, the Company has become subject to the Exchange's suspension and delisting procedures. On June 11, 2008, the Company received notice from the Exchange that its review of the Company's Form 10-Q for the period ending March 31, 2008, indicated that the Company was not in compliance with Section 1003(a)(iv) of the Company Guide and, as a result, it had become subject to the Exchange's suspension and delisting procedures. Specifically, the notice stated that the Company had sustained losses which were so substantial in relation to its overall operations or its existing financial resources, or its financial condition had become so impaired that it appeared questionable, in the opinion of the Exchange, whether the Company would be able to continue operations or meet its obligations as they mature. Subsequently, on November 5, 2008, the Company received notice from the Exchange, that, based on the Exchange's review of the Company's Annual Report on Form 10-K for the year ended June 30, 2008, the Company was not in compliance with an additional listing standard, Section 1003(a)(i) of the Company Guide, because its stockholders' equity was less than $2,000,000 and it had incurred losses from continuing operations and net losses in two of the Company's three most recent fiscal years. On January 26, 2009, the Company received notice from the Exchange, that, based on its review of information the Company submitted in response to the November notice, the Company has not made a reasonable demonstration of its ability to regain compliance with Section 1003(a)(i) of the Company Guide within the allotted amount of time. Additionally, the notice stated that the Company also is not in compliance with Section 1003(b)(i)(c) of the Company Guide because the aggregate market value of its publicly held shares has been less than $1,000,000 for more than 90 consecutive days. As a result, the Staff has determined that the Company is subject to immediate delisting proceedings and that, unless it appeals the Staff's determination by February 2, 2009, the Exchange will suspend trading in the Company's common stock and file an application with the Securities and Exchange Commission to strike the stock from listing and registration on the Exchange. In light of current economic conditions in general and, in particular, conditions within the marine industry, the Company does not believe it can regain compliance with the Exchange's continued listing standards in the near-term. As a result, the Company's Board of Directors has elected not to appeal the Staff's determination. Following the delisting of the common stock, the Company's outstanding shares will be quoted in the Pink Sheets under a new trading symbol. The Company will publicly announce the new symbol when it becomes known. About Fountain Powerboat Fountain Powerboat Industries, Inc. (NYSE Alternext US: FPB) -- http://www.fountainpowerboats.com/-- has its executive offices and manufacturing facilities along the Pamlico River in Beaufort County, North Carolina. The Company, through its wholly owned subsidiary, Fountain Powerboats, Inc., designs, manufactures and sells offshore sport boats, sport fishing boats and express cruisers that target the segment of the recreational power boat market where speed, performance, safety and quality are the main criteria for purchase. FREDDIE MAC: To Extends Eviction Suspension Through February 28 --------------------------------------------------------------- Freddie Mac will extend its suspension of evictions triggered by foreclosures on single family properties with Freddie Mac-owned mortgages through February 28, 2009. Freddie Mac is simultaneously launching a new strategy to offer qualified owner- occupants and tenants leases so they can rent the properties on a month-to-month basis after foreclosure. Freddie Mac CEO David M. Moffett said, "First and foremost, Freddie Mac's REO Rental Option is intended to help cushion the impact of foreclosure on families who own or rent homes with Freddie Mac-owned mortgages. At the same time keeping foreclosed properties occupied and in better repair will support local property values and promote a faster recovery in the housing market." Under the REO Rental Option, leases will be offered to current renters on a month-to-month basis at market rents or the rent amount they were paying prior to foreclosure, whichever is less. The rent for former owner-occupants will be the market rent, which will determined by the property management firm Freddie Mac contracted to manage the program. To qualify, current tenants and former owner-occupants must be able to demonstrate they have adequate income to pay the monthly rental amount. The home must also meet applicable building codes, or can be affordably brought into compliance, to be eligible. Freddie Mac will also explore loan modification options that may enable owner-occupants to retain ownership of their homes by reinstating their mortgage with modified terms. "In about half of all foreclosure sales there is no conversation between the borrower and the mortgage servicer about workouts. Before starting the eviction process, we want to ensure there is one last effort to achieve a workout," explained Ingrid Beckles, Senior Vice President of Default Asset Management at Freddie Mac. In 2008 Freddie Mac approved more than 87,485 workouts, enabling three out of five of its seriously delinquent borrowers to avoid foreclosure. Freddie Mac gives lenders servicing its mortgages broad authority to help troubled borrowers before they miss a payment through forbearance as well as provide permanent rate reductions, mortgage term extensions or other modifications to borrowers who are already delinquent. Freddie Mac workout options include the Streamlined Modification Program developed with Fannie Mae, the Federal Housing Finance Agency (FHFA), HOPE Now and 27 mortgage servicers to expedite loan modifications for eligible borrowers who have missed three or more mortgage payments. Citing some real estate agents, Nick Timiraos at The Wall Street Journal reports that the unwillingness of Fannie Mae and Freddie Mac to evict tenants from properties they inherit could slow the housing market's recovery. WSJ relates that Fannie Mae will rely on real estate agents in handling maintenance and rent collection for some of the properties. According to the report, the ages said that renting the homes could slow sales because homes don't sell as well with tenants living in them. WSJ quoted Brett Barry -- an agent with Realty Executives that sells properties that now include tenants eligible for a Fannie Mae lease -- as saying, "Fannie Mae is in the business of financing homes and selling them, but now this change is going to result in properties probably remaining on the market. Now, if someone calls me at 3 a.m. with a toilet malfunction or a roof leak, I'm responsible for handling that." According to WSJ, Fannie Mae and Freddie Mac will market the homes for sale while they are rented and leases will be transferred to the buyers. The policy might limit the pool of buyers to investors, and it could lead rental prices to dictate sale prices and further lessen values, WSJ states, citing real-estate agents. According to the report, real estate David Peeples said, "If you've got a house worth $350,000 and rent it for $1,200, no investor is going to buy that" because that monthly rent wouldn't cover the mortgage payments. "If we get a good renter and set the rental rate at a good market rate, then it really should be attractive to an investor," WSJ quoted Fannie Mae credit-loss management vice president Jason Allnutt as saying. WSJ reports that some property managers argue that it is better to have tenants in the homes than to leave them vacant. The report states that Betsy Morgan, Prudential Tropical Realty's supervisor of the Tampa residential-property management, said, "Homes will not sit there and quietly be destroyed, even if the tenant's a little sloppy in their upkeep." About Fannie Mae The Federal National Mortgage Association -- (FNMA) (NYSE: FNM) -- commonly known as Fannie Mae, is a shareholder-owned U.S. government-sponsored enterprise. Fannie Mae has a federal charter and operates in America's secondary mortgage market, providing mortgage bankers and other lenders funds to lend to home buyers at low rates. Fannie Mae was created in 1938, under President Franklin D. Roosevelt, at a time when millions of families could not become homeowners, or risked losing their homes, for lack of a consistent supply of mortgage funds across America. The government established Fannie Mae to expand the flow of mortgage funds in all communities, at all times, under all economic conditions, and to help lower the costs to buy a home. In 1968, Fannie Mae was re-chartered by the U.S. Congress as a shareholder-owned company, funded solely with private capital raised from investors on Wall Street and around the world. Fannie Mae is the U.S. largest mortgage buyer, according to The New York Times. About Freddie Mac The Federal Home Loan Mortgage Corporation -- (FHLMC) NYSE: FRE -- commonly known as Freddie Mac, is a stockholder-owned government- sponsored enterprise authorized to make loans and loan guarantees. Freddie Mac was created in 1970 to provide a continuous and low cost source of credit to finance America's housing. Freddie Mac conducts its business primarily by buying mortgages from lenders, packaging the mortgages into securities and selling the securities -- guaranteed by Freddie Mac -- to investors. Mortgage lenders use the proceeds from selling loans to Freddie Mac to fund new mortgages, constantly replenishing the pool of funds available for lending to homebuyers and apartment owners. Conservatorship As reported by the Troubled Company Reporter, the U.S. government took direct responsibility for Fannie Mae and Freddie Mac, placing the government sponsored enterprises under conservatorship on September 7, 2008. James B. Lockhart, director of Federal Housing Finance Agency, said that Fannie Mae and Freddie Mac share the critical mission of providing stability and liquidity to the housing market. Between them, the Enterprises have $5.4 trillion of guaranteed mortgage-backed securities (MBS) and debt outstanding, which is equal to the publicly held debt of the United States. Among the key components of the conservatorship, the FHFA, as conservator, assumed the power of the Board and management. FREDDIE MAC: In Talks With NACA on Foreclosure Prevention Pact -------------------------------------------------------------- James R. Hagerty at The Wall Street Journal reports that Neighborhood Assistance Corp. of America CEO Bruce Marks said that the nonprofit is negotiating with Freddie Mac on an agreement to prevent foreclosures. WSJ relates that NACA acts as an intermediary between borrowers and lenders. It already collaborates with Bank of America Corp., Wells Fargo & Co., and several other large lenders in reworking troubled mortgages, according to WSJ. The NACA examines borrowers' budgets to determine how much they can afford to pay for their mortgage and then reduces the interest rate and, in some cases, the principal, WSJ states. Fannie Mae, according to WSJ, has confirmed that it has reached the same foreclosure prevention agreement to work with NACA. The report states that Fannie Mae and NACA will rework home mortgages to make them easier to afford. The agreement between the two firms is one of several measures that Fannie Mae and Freddie Mac, are working on to stop the increase in foreclosures, the report says. Fannie Mae and Freddie Mac own or guarantee almost half of home mortgages in the U.S., according to WSJ. Fannie Mae and Freddie Mac must consult with the Federal Housing Finance Agency before proceeding with the NACA cooperation, WSJ states. About Fannie Mae The Federal National Mortgage Association -- (FNMA) (NYSE: FNM) -- commonly known as Fannie Mae, is a shareholder-owned U.S. government-sponsored enterprise. Fannie Mae has a federal charter and operates in America's secondary mortgage market, providing mortgage bankers and other lenders funds to lend to home buyers at low rates. Fannie Mae was created in 1938, under President Franklin D. Roosevelt, at a time when millions of families could not become homeowners, or risked losing their homes, for lack of a consistent supply of mortgage funds across America. The government established Fannie Mae to expand the flow of mortgage funds in all communities, at all times, under all economic conditions, and to help lower the costs to buy a home. In 1968, Fannie Mae was re-chartered by the U.S. Congress as a shareholder-owned company, funded solely with private capital raised from investors on Wall Street and around the world. Fannie Mae is the U.S. largest mortgage buyer, according to The New York Times. About Freddie Mac The Federal Home Loan Mortgage Corporation -- (FHLMC) NYSE: FRE -- commonly known as Freddie Mac, is a stockholder-owned government- sponsored enterprise authorized to make loans and loan guarantees. Freddie Mac was created in 1970 to provide a continuous and low cost source of credit to finance America's housing. Freddie Mac conducts its business primarily by buying mortgages from lenders, packaging the mortgages into securities and selling the securities -- guaranteed by Freddie Mac -- to investors. Mortgage lenders use the proceeds from selling loans to Freddie Mac to fund new mortgages, constantly replenishing the pool of funds available for lending to homebuyers and apartment owners. Conservatorship As reported by the Troubled Company Reporter, the U.S. government took direct responsibility for Fannie Mae and Freddie Mac, placing the government sponsored enterprises under conservatorship on September 7, 2008. James B. Lockhart, director of Federal Housing Finance Agency, said that Fannie Mae and Freddie Mac share the critical mission of providing stability and liquidity to the housing market. Between them, the Enterprises have $5.4 trillion of guaranteed mortgage-backed securities (MBS) and debt outstanding, which is equal to the publicly held debt of the United States. Among the key components of the conservatorship, the FHFA, as conservator, assumed the power of the Board and management. FULTON HOMES: Will Honor Home Warranties ---------------------------------------- J. Craig Anderson at The Arizona Republic reports that Fulton Homes Corp. has reassured clients that it would continue to honor its home warranties. The Arizona Republic quoted Fulton Homes CEO Doug Fulton as saying, "We filed Chapter 11 reorganization in order to continue operating without tremendous bank interference." Citing Mr. Fulton, The Arizona Republic states that Fulton Homes Sales Corp., which handles home sales and warranties, is a separate entity and isn't included in the bankruptcy. According to The Arizona Republic, Mr. Fulton said, "Of the many lenders we use to finance land acquisition and development, a distinct minority has taken action against Fulton Homes due principally to the current valuation of our land holdings." Court documents say that Fulton Homes owes $100 million to $500 million to more than 100 individual creditors, including Bank of America. The Arizona Republic relates that Fulton Homes listed $100 million to $500 million in assets. The Arizona Republic states that Fulton Homes has six months to draft a reorganization proposal and present it to creditors. Fulton Homes Corp. was founded more than 30 years ago by Ira Fulton, the father of the company's president Doug Fulton. The company has 21 communities in some stage of development, primarily in the far southeast and far northwest suburbs. Fulton Homes is one of the largest homebuilders in Arizona, according to its Web site. The Web site shows 21 projects around Phoenix. In its bankruptcy petition, Fulton Homes estimated that its assets and debt both exceed $100 million. As reported by the Troubled Company Reporter on Jan. 29, 2009, Fulton Homes Corp. filed for Chapter 11 bankruptcy protection on January 27, 2009, before the U.S. Bankruptcy Court for the District of Arizona. GATEHOUSE MEDIA: Seeks to Amend $1.195 Billion Credit Facility -------------------------------------------------------------- GateHouse Media, Inc. is seeking to amend its $1.195 billion senior secured credit facility. The amendment would, among other things, allow the company to repurchase outstanding term loans under the Facility at prices below par through a modified Dutch Auction through December 31, 2011. The Company is seeking the consent of the requisite lenders by 5:00 pm (Eastern Time) Monday, February 2, 2009, in order to effect the amendment. The company can give no assurance whether the amendment will be approved by the requisite lenders and, if approved, if and when the Company will effect any such repurchase. If the amendment is approved by the requisite lenders, the company will do the appropriate regulatory and informational filings. About Gatehouse Media GateHouse Media, Inc. -- http://www.gatehousemedia.com/-- headquartered in Fairport, New York, is one of the largest publishers of locally based print and online media in the United States as measured by its 97 daily publications. GateHouse Media currently serves local audiences of more than 10 million per week across 21 states through hundreds of community publications and local Web sites. As of September 30, 2008, the company reported $1.34 billion in total assets and $1.38 billion in total liabilities, resulting in $34.1 million in stockholders' deficit. The company reported total revenues of $171.6 million in the quarter, an increase of 6.4% over the third quarter of 2007. GATEHOUSE MEDIA: Settles Suit vs. New York Times ------------------------------------------------ GateHouse Media and The New York Times Company, parent of The Boston Globe and Boston.com, announced today that they have reached a settlement in the case of GateHouse Media Massachusetts I, Inc. v. The New York Times Company. Under the terms of the settlement, neither party paid damages or admitted any wrongdoing. Other terms agreed by the parties are: (1) Pursuant to discussions between appropriate technical personnel of the respective parties, GateHouse will implement one or more commercially reasonable technological solutions intended to prevent NYT's copying of any original content from GateHouse's Web sites and RSS feeds, including but not limited to its http://wickedlocal.com/Web sites, which NYT will not directly or indirectly circumvent. To the extent that the Solution(s) are ineffective, GateHouse may notify NYT in writing of the implementation of the Solution(s). If notification is received, NYT will acknowledge the notification and promptly refrain from any activity the Solution(s) was intended to prevent; (2) NYT will remove all GateHouse RSS feeds from the aggregation tool currently being used to copy and display GateHouse's original headlines and ledes on http://www.boston.com/yourtown Web sites, and will refrain from accessing the feeds for so long as GateHouse maintains any of the Solution(s); and (3) NYT will take reasonable commercial steps to ensure that all headlines and leeks originally published by GateHouse that are or have been existing and displayed on boston.com's yourtown Web sites, and all related source attributions, are removed from those Web sites and any related archives by no later than March 1, 2009. To the extent that such reasonable commercial steps are ineffective to remove the previously posted headlines and ledes, and GateHouse becomes aware of the presence of any such headlines and ledes still displayed on boston.com's yourtown Web sites, it may notify NYT in writing to demand the removal of the headlines and ledes. NYT will promptly take reasonable commercial steps to comply with those demands. Parties' Dispute GateHouse's lawsuit challenged the repeated conduct of defendant's boston.com since November 2008 in copying and displaying verbatim on boston.com's "YourTown" Web sites for the Boston suburbs of Needham, Newton and Waltham headlines and leading sentences from news articles taken from GateHouse's local newspapers and its hyper-local Web sites for each of those towns at WickedLocal.com. Boston.com has reproduced this information without GateHouse's authorization or consent, and has done so in a manner which confuses the public as to the original source of the information by passing off GateHouse's original content as its own and which completely relies on the expertise, experience, efforts, expenditures and resources of GateHouse. This is both copyright and trademark infringement, as well as unfair competition. The New York Times, in response, claimed that certain of GateHouse's own practices somehow qualify as copyright infringement. These in no way involve the predatory practice of copying a competitor's content on a daily basis to be offered as a substitute product to consumers and advertisers in the very same market, piggybacking on the competitor's resources, GateHouse said. GateHouse's President and Chief Operating Officer, Kirk Davis, said: "By trying to equate its conduct with legitimate and widespread linking practices which permeate the Internet, it is The New York Times' counterclaims that threaten those established practices as well as fair competition in online journalism. The simple reality is that The New York Times chose to disregard these principles with its serial copying and display of GateHouse's original content on the boston.com "YourTown" websites, which it has turned around and offered to readers in the same towns served by GateHouse's WickedLocal websites. We will defend these meritless counterclaims vigorously and consistent with controlling legal principles of fair use." About Gatehouse Media GateHouse Media, Inc. -- http://www.gatehousemedia.com/-- headquartered in Fairport, New York, is one of the largest publishers of locally based print and online media in the United States as measured by its 97 daily publications. GateHouse Media currently serves local audiences of more than 10 million per week across 21 states through hundreds of community publications and local Web sites. As of September 30, 2008, the company reported $1.34 billion in total assets and $1.38 billion in total liabilities, resulting in $34.1 million in stockholders' deficit. The company reported total revenues of $171.6 million in the quarter, an increase of 6.4% over the third quarter of 2007. About New York Times The New York Times Co. operates as a diversified media company in the United States. It operates in two segments, News Media and About Group. The company was founded in 1896. 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. GATEHOUSE MEDIA: Newspapers Hit By Revenue Declines, Recession -------------------------------------------------------------- Robert W. Decherd, president and chairman of A.H. Belo Corp., which publishes The Dallas Morning News, said in a Jan. 30 letter that the rapid deterioration in the U.S. economy has changed the nature and urgency of re-thinking the company's business model -- "just as every newspaper publisher and companies in virtually every American industry are compelled to do." The past two months saw the demise of two major players in the industry. Tribune Co., which own leading papers, including the Los Angeles Times and Chicago Tribune, etc., having collective paid circulation totaling 2.2 million copies daily and 3.3 million copies on Sundays, filed for bankruptcy on Dec. 8, 2008. While Tribune had a wide portfolio, which included television and radio broadcasting, the Internet, and other entertainment offering, including the Chicago Cubs baseball team, it blamed its bankruptcy filing on the unprecedented decline in the newspaper publishing industry, which decline exacerbated by the current recession. The Star Tribune newspaper, which has the highest daily circulation in the state of Minnesota, and 15th largest daily newspaper in the United States, sought bankruptcy protection on Jan. 15 due to its worsening financial conditions and its heavy debt burden. "The domestic newspaper industry has been crippled by an unprecedented and severe decline in advertising revenue," said The Star Tribune Company CFO David W. Montgomery, in a document explaining Star Tribune's bankruptcy filing. "While this decline has been occurring for several years, the decline has been accelerated and exacerbated by the recession and the dislocation of the credit markets." Aside from Star Tribune and Tribune Co., other newspaper owners have been hit by the decline in advertisement revenues although they have been able to avert bankruptcy filing, so far. Advertising, Circulation Down Comparing figures provided by the Audit Bureau of Circulations for six-month periods ending Sept. 30, 2008, and March 31, 2008, daily circulation for the top 30 newspapers in the U.S. are down 5.27%: Daily Circulation For Six Months Ended -------------------- 09/30/08 03/31/08 % Change -------- -------- -------- 1 USA Today 2,293,310 2,284,219 0.40% 2 The Wall Street Journal 2,011,999 2,069,463 -2.78% 3 The New York Times 1,000,665 1,077,256 -7.11% 4 Los Angeles Times 739,147 773,884 -4.49% 5 Daily News - New York, NY 632,595 703,137 -10.03% 6 New York Post 625,421 702,488 -10.97% 7 Washington Post 622,714 673,180 -7.50% 8 Chicago Tribune 516,032 541,663 -4.73% 9 Houston Chronicle 448,271 494,131 -9.28% 10 The Arizona Republic - Phoenix 413,332 413,332 0.00% 11 Newsday - Melville, NY 377,517 379,613 -0.55% 12 San Francisco Chronicle 339,430 370,345 -8.35% 13 Dallas Morning News 338,933 368,313 -7.98% 14 The Boston Globe 323,983 350,605 -7.59% 15 Star Tribune - Minneapolis, MN 322,360 345,130 -6.60% 16 The Star-Ledger - Newark, NJ 316,280 334,150 -5.35% 17 The Chicago Sun-Times 313,176 330,280 -5.18% 18 The Plain Dealer - Cleveland, OH 305,529 326,907 -6.54% 19 The Philadelphia Inquirer 300,674 322,362 -6.73% 20 Detroit Free Press 298,243 316,007 -5.62% 21 The Oregonian - Portland, OR 283,321 312,274 -9.27% 22 The Atlanta Journal-Constitution 274,999 308,944 -10.99% 23 The San Diego Union-Tribune 269,819 304,399 -11.36% 24 St. Petersburg Times 268,935 288,669 -6.84% 25 The Sacramento Bee 253,249 268,755 -5.77% 26 The Indianapolis Star 244,796 255,303 -4.12% 27 St. Louis Post-Dispatch 240,796 255,057 -5.59% 28 The Kansas City Star 239,358 252,785 -5.31% 29 The Orange County (CA) Register 236,270 250,724 -5.76% 30 The Mercury News - San Jose, CA 224,199 240,223 -6.67% -------- -------- ------ 15,075,353 15,913,598 -5.27% Mr. Montgomery, Star Tribune's CEO, said that with respect to the newspaper industry, print classified advertising dropped by more than 25% in the first half of 2008 alone, representing a $1.8 billion loss in revenue for domestic newspapers. The industry, he added, has suffered historic declines in circulation, which have not only resulted in decreased circulation revenue, but have also acted as a further catalyst for declines in advertising revenue. He noted that much of a newspaper's more profitable print advertising sales are tied to circulation, which advertisers use as a proxy for readership. As circulation has declined, newspapers have been compelled to charge less for these ads. Chandler Bigelow III, Tribune's senior vice president and chief financial officer, said that while the company's newspaper advertising revenue continues to be in line with other large metropolitan newspapers, newspaper advertising revenue generally is in significant decline, down industry-wide 15% to 20% in 2007 in major metropolitan markets, and down industry-wide nearly $2 billion, or 18%, in the third quarter of 2008. Gannett Co., Inc., which owns the U.S.'s most read newspaper, USA Today, and 84 other newspapers, said its publishing segment operating revenues were $1.4 billion for the quarter of 2008, compared with $1.7 billion in the fourth quarter of 2007, an 18.6% decline. Advertising revenues were $963.4 million compared with $1.2 billion in the fourth quarter of 2007. At USA TODAY, advertising revenues were 18.5% lower in the fourth quarter compared to the fourth quarter in 2007. Gannett said that its results were reflective of "unprecedented turmoil in the economies of both the U.S. and the UK and in the financial market", although the results of its broadcasting and digital segments were largely unchanged. New York Times Co. disclosed that in the fourth quarter of 2008 total revenues decreased 10.8% to $772.1 million, as advertising revenues decreased 17.6%. The New York Times publisher said revenues decreased mainly due to lower print advertising. "The disruptions of the global economy are affecting all businesses and industries, especially companies, such as ours, that generate a significant portion of their revenues from advertising," said Janet L. Robinson, NYT president and CEO. Cablevision Systems Corporation, which bought Newsday from Tribune Co. in July 2008, has yet to reveal its fourth quarter results on Feb. 23. It recorded $73,468,000 in revenues from its newspaper publishing group in three months ended Sept. 30, 2008. Other firms are scheduled to release their fourth quarter results on these dates: Company Earnings Release Date ------- -------------------- News Corporation 02/05/09 Washington Post Co. 02/25/09 Cablevision 02/23/09 A.H. Belo Corp. 02/17/09 Sun-Times Media Group 03/09/09 The McClatchy Company 02/05/09 Journal Register Co. 02/02/09 Gatehouse Media Inc. 03/09/09 American Media Inc. __/__/09 Firms that are privately held, like Hearst Corporation, owner of the San Francisco Chronicle, do not publicly disclose their financial results. Rising Internet Traffic Cutting Print Revenues Various reports say that newspaper revenues have been decreasing, as readers have shifted to the Web. According to Bloomberg, rising Internet use have hurt magazines and newspapers. While overall revenues fell, New York Times' Internet businesses, which include NYTimes.com, About.com, Boston.com and other company Web sites, increased 6.5% to $351.7 million in 2008 from $330.2 million in 2007, and Internet advertising revenues increased 9.3% to $308.8 million from $282.5 million. In total, Internet businesses accounted for 12.0% of the company's revenues in the fourth quarter versus 11.0% in the 2007 fourth quarter. Lee Enterprises Incorporated (NYSE: LEE), which runs 49 daily newspapers, including the St. Louis Post-Dispatch, said that Circulation revenues dropped 4.5% to $47.56 million. Combined print and online advertising revenue dropped 15.2% to $184.6 million, with retail advertising down 9.8%, and classified down 27.1%. More Writedowns While the Washington Post Co. (NYSE:WPO) has yet to reveal its quarterly results, it announced on Jan. 15 a regular quarterly dividend of $2.15 per share, payable on Feb. 6, 2009. On Jan. 23, Washington Post said it would take a $70 million impairment charge after concluding that the estimated fair value of its online lead generation business is less than its reported carrying value. Reuters notes that the Post is one of several U.S. newspaper publishers that have written down the value of their properties as advertising revenue shrinks. According to Reuters, The New York Times, Lee Enterprises (LEE.N) and McClatchy Co. (MNI.N) and other publishers have written down billions of dollars in the past several years. In fiscal 2008, Lee Enterprises recorded after-tax non-cash charges totaling $893.7 million to reduce the carrying value of goodwill, other assets and the company's investment in TNI Partners. On Jan. 28, American Media Operations, Inc., operating subsidiary of American Media Inc., leading publisher of celebrity journalism and health and fitness magazines in the U.S., said it is in the process of performing impairment testing of its tradenames and goodwill. AMOI expects to record impairment charges for its titles of between $200 million and $220 million with respect to certain of its tradenames and goodwill. Heavy Debt Burden, Liquidity Problems Aside from declining revenues, some of the newspaper publishers were highly leveraged, limiting their flexibility and ability to address liquidity constraints. At that time of its bankruptcy filing Tribune Co. owed $13 billion in total funded debt. Starting June 30, 2008, Star Tribune stopped making payments scheduled quarterly interest, which reached $20 million as of its bankruptcy petition in January 2009. While Star Tribune had $26.9 million in cash as of Dec. 31, 2008, its liabilities reached $661.1 million, including $392.5 million owed on its first lien debt and $96 million owed on its second loan debt, paling in comparison to assets of only $493.2 million. Lee Enterprises also is trying to renegotiate $306 million in debt that it assumed when it bought Pulitzer Inc. in 2005. Of that, $142.5 million is due in April and Lee's auditors have said Lee can't afford to pay it, the St. Louis Post-Dispatch said. GateHouse Media, Inc., which has 92 daily newspapers with total paid circulation of approximately 834,000, announced Jan. 28 that it is seeking to amend its $1.2 billion senior secured credit facility. The amendment would, among other things, allow the company to repurchase outstanding term loans under the facility at prices below par through a modified Dutch auction through December 31, 2011. The company is seeking the consent of the requisite lenders by 5:00 pm (Eastern Time) Monday, February 2, 2009, in order to effect the amendment American Media, publisher of celebrity journalism and health and fitness magazines including Star, Shape and the National Enquirer, made tender offers for $570 million of its outstanding senior subordinated notes, which comprise (i) $400,000,000 principal amount of 10.25% Series B Senior Subordinated Notes due 2009 and $14,544,000 aggregate principal amount of 10.25% Series B Senior Subordinated Notes due 2009, and (ii) $150,000,000 aggregate principal amount of 8 7/8% Senior Subordinated Notes due 2011 and $5,454,000 aggregate principal amount of 8 7/8% Senior Subordinated Notes due 2011. American Media, through its AMOI subsidiary will exchange those Notes with (a) $21,245,380 principal amount of 9% senior PIK notes due 2013, (b) $300,000,000 principal amount of the company's 14% senior subordinated notes due 2013, and (c) 5,700,000 shares of Media's common stock, representing 95% of American Media's outstanding shares of common stock. The offer expired Jan. 29. As of Jan. 9, AMOI has entered into agreements with holders of 81% of the outstanding aggregate principal amount of the 2009 Notes and 69% of the outstanding aggregate principal amount of the 2011 Notes. The tender offer conditioned upon, among other things, receipt of tenders and related consents by holders of at least 98% of each series of the Existing Notes. Pursuant to forbearance agreements, holders of the Existing Notes have agreed to forbear until 5:00 p.m., New York City time, on February 4, 2009, from exercising any remedies under the indentures governing the Existing Notes as a result of AMOI's. Sun-Times Media Group, Inc. (Pink Sheets: SUTM), which owns the Chicago Sun-Times, informed investors on Jan. 29 that an arbitrator has awarded CanWest Global Communications Corp., a Canadian media company, CN$51 million, exclusive of interest and costs, in connection with a dispute relating to CanWest's purchase of newspaper assets from Sun-Times Media in 2000. On Dec. 19, 2003, CanWest pursued arbitration, in connection with its claim that Sun-Times owed CN$84.0 million related to the transaction. As of Sept. 30, 2008, the company had a reserve established in respect of the arbitration in the amount of CN$15 million. A previously established escrow account funded by the company containing approximately CN$22 million may be available to pay any final arbitration award. The Chicago Tribune noted that as of Sept. 30, Sun-Times Media had cash of $99.8 million, but the company faces a number of tax and other liabilities. After a big write-down of intangible assets during the third quarter, Sun- Times' negative worth, or negative shareholder equity, widened to $321.7 million, the Chicago Tribune said. In Jan. 28, Washington Post said it's selling $400 million in fixed-rate notes at a price of 99.614% of par for an effective yield of 7.305% per annum. The ten-year notes will have a coupon of 7.25% per annum, payable semi-annually on February 1 and August 1, beginning August 1, 2009. The company intends to use the net proceeds from the sale of the notes to repay $400 million of notes that mature on February 15, 2009. Sale of Assets, Job Cuts to Stem Losses A.H. Belo's Mr. Decherd said in his Jan. 30 letter to employees that the decline in advertising revenues for the newspaper industry and all media persists, and that the key for the company is to generate and preserve cash. He stated that the company needs to reduce its workforce as the revenue trends do not support or require the same number of people the company has employed. The reduction will "probably be in the range of 500 jobs." He added that the company would suspend the A. H. Belo Savings Plan match and will cut reimbursements policies to employees. "Similarly, it is no longer reasonable for the Company to provide free parking in downtown Dallas," he said. A monthly charge of $40 will take effect May 1, 2009 for all downtown Dallas surface lots owned by the company. On Jan. 9, Hearst Corp. announced that it is offering for sale the Seattle Post-Intelligencer and its interest in a joint operating agreement under which the P-I and The Seattle Times are published. Hearst said that should a sale not occur within 60 days, it will pursue options, "including a move to a digital-only operation with a greatly reduced staff or a complete shutdown of all operations." "In no case will Hearst continue to publish the P-I in printed form following the conclusion of this process." The P-I, which Hearst has owned since 1921, has had operating losses since 2000. The P-I lost approximately $14 million in 2008 and its forecast anticipates a greater loss in 2009. Hearst also denied speculations it is interested in acquiring The Seattle Times. On Jan. 28, 2009, The New York Times Co., which also owns the International Herald Tribune and The Boston Globe, announced that it has retained Goldman, Sachs & Co. as its financial advisor to explore the possible sale of its 17.75% ownership interest in New England Sports Ventures, LLC. NESV owns the Boston Red Sox, Fenway Park and adjacent real estate, approximately 80 percent of New England Sports Network, the top rated regional cable sports network in the country delivered to more than four million homes throughout New England and nationally via satellite, and 50 percent of Roush Fenway Racing, a leading NASCAR team. Tribune Co., which is in the U.S. Bankruptcy Court for the District of Delaware to delever its balance sheet, is arranging the sale of its Chicago Cubs baseball team. Times Publishing Co., which publishes the St. Petersburg Times, one of the most respected regional newspapers in the U.S., is exploring the sale of Congressional Quarterly, Inc. Based in Washington, D.C., Congressional Quarterly publishes news and information on politics, public policy and legislative activity at the federal, state and local levels. The McClatchy Company, which has 30 daily newspapers, including The Miami Herald, The Sacramento Bee, and the Fort Worth Star- Telegram, said that it will suspend its quarterly dividend after paying the first quarter 2009 dividend for the foreseeable future in order to preserve cash for debt repayment. The first quarter 2009 dividend of nine cents per share is half the per share dividend paid in the 2008 first quarter. On Jan. 30, Editor & Publisher reported that the Journal Register Co. announced the sale of The Hershey (Pa.) Chronicle to The Sun in Hummelstown, Pa. On Jan. 7, Journal Register said it has signed an agreement with Central Connecticut Communications regarding a sale of The Bristol Press, The Herald of New Britain and The Sunday Herald Press from Journal Register Company. The sale includes the assets of the papers' web sites and of three nearby weeklies, the Wethersfield Post, the Newington Town Crier and the Rocky Hill Post. As of November 2008, JRC owned 22 daily newspapers and approximately 300 non-daily publications. Some Newspapers to Reach End According to a blog by Douglas A. McIntyre posted Jan. 11 at 24/7 Wall St., twelve major media brands are likely to close in 2009, as Journal Register and Gatehouse, and McClatchy have struggled. It noted that The Seattle Post-Intelligencer, Denver's Rocky Mountain News, The Miami Herald and the San Francisco Chronicle are on the block, and may be shut if no buyers emerge. The New York Daily News and The New York Observer are also at risk, according to the report. The United Press International Inc. reported Jan. 9 that Sun- Times Media said it would close 12 weekly newspapers to cut expenses as advertising revenues have fallen. The 12 suburban newspapers scheduled to close are part of 51 newspapers published by Pioneer Press, which the Sun-Times purchased in 1989. The newspapers, scheduled to fold Jan. 15, cover mostly the northwest suburbs of Chicago, Crain's Chicago Business reported Friday. According to CT Business Journal, Journal Register closed 16 newspapers in Connecticut in December. The papers affected include the Branford Review, Clinton Recorder, Hamden Chronicle, Milford Weekly, North Haven Post, Shelton Weekly, Stratford Bard, West Haven News, Wallingford Voice, East Haven Advertiser and others. Hanging In the Balance While Tribune Co., and Star Tribune have filed for bankruptcy, other newspaper publishers' fate are hanging in the balance. American Media's revolving facility, of which $60 million is outstanding and the term loan facility, of which $439.6 million is owed, both will mature on February 1, 2009 if the company has more than $25.0 million of the 10.25% Series B Senior Subordinated Notes due May 1, 2009 outstanding on February 1, 2009. According to Crain's New York, John Page, senior analyst at Moody's, said it was unclear what the banks would do with the company if an agreement couldn't be reached with bondholders. "It's a difficult environment to be selling assets," he said. In its form 10-Q for the third quarter of 2008, American Media Operations said if it is unable to extend or refinance the Notes, the 2006 Credit Agreement will likely mature early and the Company will not have sufficient funds to repay such indebtedness. "In such event, the Company may have to liquidate assets on unfavorable terms, or be unable to continue as a going concern, and incur additional costs associated with bankruptcy." Lee Enterprises' waiver of covenant conditions related to the $306 million Pulitzer Notes debt of its subsidiary St. Louis Post- Dispatch LLC expire Feb. 6, 2009. The Pulitzer Notes mature in April 2009. Lee says discussions with lenders continue. The struggles of the newspaper industry have also resulted to pulp- and paper-related bankruptcies. Paperboard and paper-based packaging Smurfit-Stone Corp., filed for Chapter 11 on Jan. 26, and Corp. Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Magazine printer, Quebecor World Inc., and pulp mill operator Pope & Talbot Inc., have also sought bankruptcy protection in Canada and the U.S. About GateHouse Media GateHouse Media, Inc. -- http://www.gatehousemedia.com/-- headquartered in Fairport, New York, is one of the largest publishers of locally based print and online media in the United States as measured by its 97 daily publications. GateHouse Media currently serves local audiences of more than 10 million per week across 21 states through hundreds of community publications and local Web sites. As of September 30, 2008, the company reported $1.34 billion in total assets and $1.38 billion in total liabilities, resulting in $34.1 million in stockholders' deficit. The company reported total revenues of $171.6 million in the quarter, an increase of 6.4% over the third quarter of 2007. GENERAL GROWTH: Forbearance on Two Loans Moved to March 15 ---------------------------------------------------------- General Growth Properties, Inc. has entered into Amended and Restated Forbearance and Waiver Agreements with its syndicates of lenders for the 2006 Senior Credit Agreement and the Secured Portfolio Facility which extend the forbearance periods from January 30, 2009, until March 15, 2009. Under the terms of the amended Forbearance Agreements, the Company agreed to certain additional restrictions and covenants, and the lenders agreed that certain possible future cross-defaults related to the Company's mortgage indebtedness will not cause an immediate termination of the Forbearance Agreements. General Growth has payment deadlines of two debts -- $2.6 billion credit line and a $900 million mortgage on two Las Vegas malls. General Growth senior management and advisers met with lenders in New York on January 12, 2009. Management outlined during the meeting separate scenarios under which the company would operate while in bankruptcy protection, and the company struggling with its debt burden outside of bankruptcy court. Kris Hudson at The Wall Street Journal, citing people familiar with the matter, had said General Growth CEO Adam Metz, President Thomas Nolan, and advisers related that in bankruptcy court, General Growth would save money by forgoing interest payments on its unsecured debt but would also incur costs from the bankruptcy process and big tax bills if it liquidates its holdings; outside bankruptcy court, General Growth could determine its own path. Representatives of 10 banks put on an advisory committee to represent the 180 lenders in General Growth's $2.6 billion credit facility, WSJ reported. According to the report, these lenders include: -- Eurohypo AG, -- Bank of America Corp., -- Wachovia Corp., -- Emigrant Savings Bank, -- Credit Agricole SA's Caylon investment-banking unit, and -- Citigroup Inc. General Growth is facing two dozen separate loans totaling more than $2 billion that will expire in 2009. WSJ has noted that General Growth must pay off in March and April the $600 million in bonds owed by a subsidiary that holds the malls that General Growth added in its 2004 acquisition of rival Rouse Co. Analysts including Green Street Advisors Inc.'s Jim Sullivan, expect a bankruptcy filing by the company, according to WSJ. The sources, WSJ said, said that a bankruptcy filing by General Growth isn't imminent. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. (NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S. mall owner with 200-plus shopping malls in 44 states. General Growth is a self-administered and self-managed real estate investment trust. General Growth owns, manages, leases and develops retail rental property, primarily shopping centers. Substantially all of its properties are located in the United States, but the company also has retail rental property operations and property management activities -- through unconsolidated joint ventures -- in Brazil and Turkey. Its Master Planned Communities segment includes the development and sale of residential and commercial land, primarily in large-scale projects in and around Columbia, Maryland; Houston, Texas; and Summerlin, Nevada, as well as the development and sale of its one residential condominium project located in Natick (Boston), Massachusetts. General Growth said in a regulatory filing Sept. 30 that its potential inability to address its 2008 or 2009 debt maturities in a satisfactory fashion raises substantial doubts as to its ability to continue as a going concern. General Growth had $29.6 billion in total assets and $27.3 billion in total liabilities as at Sept. 30. * * * As reported by the Troubled Company Reporter on Dec. 11, 2008, Fitch Ratings, has downgraded the Issuer Default Ratings and outstanding debt ratings of General Growth Properties to 'C' from 'B'. GENERAL MOTORS: Bondholders May Get 20% of Firm's Equity -------------------------------------------------------- General Motors Corp. bondholders may get 20% of the firm's equity as part of a planned debt-to-equity exchange that would decrease the company's debt load, Reuters reports, citing JPMorgan Chase & Co. As reported by the Troubled Company Reporter on Jan. 27, 2009, GM is under pressure to reach a deal with its bondholders. Under the terms of a $13.4 billion loan granted by the Treasury, GM must agree with a group of bondholders by February 17 on a plan to cut debt by at least two-thirds -- via conversion to equity, new debt or both. It has until April 30 to implement a deal. Reuters relates that GM and its bondholders have each hired advisers on how to complete the debt exchange. According the report, GM expects that the debt exchange will cut its unsecured U.S. debt to $9 billion from almost $28 billion. GM would discuss its plan to get bondholders to swap debt for equity on Feb. 17 and that the firm is "working with the bondholders committee now," Reuters states, citing company spokesperson Julie Gibson. GM would present its viability plan to Congress on that date, Reuters says. Citing JPMorgan analysts, Reuters relates that bondholders would get around 35% of the par value of their bonds and come away with a 20% equity stake in the company, assuming that 50% of GM's bonds are exchanged. Reuters quoted analysts Eric Selle and Atiba Edwards as saying, "We believe the equity upside combined with a takeout premium in an exchange make these bonds attractive. We view the upside (driven by stabilization of U.S. sales volumes and liquidity enhancement measures) on the bonds as much higher and more likely than the downside of a potential bankruptcy .... We believe the threat of bankruptcy will have to return in order for GM to achieve the required restructuring goals ... we are doubtful bondholders will exchange without a positive incentive (i.e. government guarantees of the exchanged notes)." JPMorgan, according to Reuters, has placed a hold recommendation on GM's unsecured debt. "We maintain our hold recommendation on GMAC's bonds as we believe overall economic conditions and the fate of GM may outweigh recent government support actions," the report quoted JPMorgan as saying. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Latin America, Africa and Middle East, with headquarters in Miramar, Florida, is one of GM's four regional business units. GM LAAM employs approximately 37,000 people in 18 countries and has manufacturing facilities in Argentina, Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and Venezuela. GM LAAM markets vehicles under the Buick, Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and Suzuki brands. As reported in the Troubled Company Reporter on Nov. 10, 2008, General Motors Corporation's balance sheet at Sept. 30, 2008, showed total assets of US$110.425 billion, total liabilities of US$170.3 billion, resulting in a stockholders' deficit of US$59.9 billion. * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on General Motors Corp. to 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. S&P said that the outlook is negative. Fitch Ratings, as reported in the Troubled Company Reporter on Nov. 11, 2008, placed the Issuer Default Rating of General Motors on Rating Watch Negative as a result of the company's rapidly diminishing liquidity position. Given the current liquidity level of US$16.2 billion and the pace of negative cash flows, Fitch expects that GM will require direct federal assistance over the next quarter and the forbearance of trade creditors in order to avoid default. With virtually no further access to external capital and little potential for material asset sales, cash holdings are expected to shortly reach minimum required operating levels. Fitch placed these on Rating Watch Negative: -- Senior secured at 'B/RR1'; -- Senior unsecured at 'CCC-/RR5'. As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corp. and General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. Economy. GENERAL MOTORS: Seeks to Avoid Multibillion-Dollar Tax Burden ------------------------------------------------------------- General Motors Corp. is seeking the help of the U.S. Treasury Department and Congress to try avoiding a multibillion-dollar tax burden that a new restructuring plan could bring, John D. Stoll at The Wall Street Journal reports, citing people familiar with the matter. According to WSJ, GM could face an income-tax bill of as much as $7 billion due to a plan to give much of its outstanding stock to debtholders, the United Auto Workers union, and the federal government. The government has used in the past rules that limit the ability of firms to use distressed-asset transactions to avoid paying taxes, WSJ states. WSJ relates that Congressional leaders said that they are open to cooperating with GM. The report says that GM could get relief from the taxes by having a provision on income tax included in an economic-stimulus package being considered by Congress. Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Latin America, Africa and Middle East, with headquarters in Miramar, Florida, is one of GM's four regional business units. GM LAAM employs approximately 37,000 people in 18 countries and has manufacturing facilities in Argentina, Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and Venezuela. GM LAAM markets vehicles under the Buick, Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and Suzuki brands. As reported in the Troubled Company Reporter on Nov. 10, 2008, General Motors Corporation's balance sheet at Sept. 30, 2008, showed total assets of US$110.425 billion, total liabilities of US$170.3 billion, resulting in a stockholders' deficit of US$59.9 billion. * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on General Motors Corp. to 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. S&P said that the outlook is negative. Fitch Ratings, as reported in the Troubled Company Reporter on Nov. 11, 2008, placed the Issuer Default Rating of General Motors on Rating Watch Negative as a result of the company's rapidly diminishing liquidity position. Given the current liquidity level of US$16.2 billion and the pace of negative cash flows, Fitch expects that GM will require direct federal assistance over the next quarter and the forbearance of trade creditors in order to avoid default. With virtually no further access to external capital and little potential for material asset sales, cash holdings are expected to shortly reach minimum required operating levels. Fitch placed these on Rating Watch Negative: -- Senior secured at 'B/RR1'; -- Senior unsecured at 'CCC-/RR5'. As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corp. and General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. Economy. GENERAL MOTORS: Secures $884 Million from US Treasury Department ---------------------------------------------------------------- General Motors Corporation disclosed in a regulatory filing with the Securities and Exchange Commission that it entered into a loan and security agreement with the United States Department of the Treasury. Pursuant to the agreement, GM borrowed $884 million from the UST and applied the proceeds of the loan to purchase the New GMAC Equity. On Dec. 29, 2008: a) GM entered into a membership interest subscription agreement with GMAC LLC and FIM Holdings LLC, the other common equity owner of GMAC, under which GM agreed to purchase additional membership interests in; and b) GM accepted a commitment letter from the UST pursuant to which the UST committed to provide to GM a loan to fund GM's purchase of the New GMAC Equity. As a result of GM's purchase of the New GMAC Equity on Jan. 16, 2009, GM's common equity interest in GMAC increased from 49% to 59.86%. The loan under the Facility is scheduled to mature on Jan. 16, 2012, unless the maturity date is accelerated as provided in the Loan Agreement. Except for the collateral securing the Facility, certain exchange rights the UST has with respect to the New GMAC Equity and the absence of guarantors, the material terms of the Facility are substantially similar to the terms of the Loan and Security Agreement, dated as of Dec. 31, 2008, by and between GM, as borrower, certain of its domestic subsidiaries, as guarantors, and the UST, as lender. The information and reporting requirements that GM is required to satisfy under the Loan Agreement will be deemed to have been satisfied if the information and reporting requirements pursuant to the corresponding provisions of the Dec. 31, 2008, Loan Agreement have been complied with. Collateral for the Loan consists of GM's entire 59.86% common equity interest in GMAC, which includes the New GMAC Equity, and GM's preferred membership interest in GMAC. This collateral was pledged pursuant to an Equity Pledge Agreement, dated as of Jan. 16, 2009, made by GM's subsidiaries, GM Finance Co. Holdings LLC and GM Preferred Finance Co. Holdings LLC, as pledgors, in favor of the UST. The UST also has the right to exchange GM's obligations in respect of the Loan for the New GMAC Equity, in satisfaction of GM's obligations outstanding under the Loan at any time, on a pro rata basis. There are no guarantors of the Loan. The proceeds of the Loan were used by GM to purchase the New GMAC Equity in furtherance of GMAC's successful effort to become a bank holding company under the Bank Holding Company Act of 1956, as amended. Pursuant to GM's understanding with the UST and the commitments made by GM to the Federal Reserve, the New GMAC Equity will, prior to March 24, 2009, be placed into one or more trusts of which GM will be the beneficiary. The UST will hold exclusive right to appoint the trustee of the Treasury Trust, who will be independent of GM, and who will have authority to vote and dispose of the New GMAC Equity held in the Treasury Trust. Of GM's remaining equity in GMAC, GM will hold 9.9% of the equity directly and any excess interest will, prior to March 24, 2009, be placed into a trust established by GM of which GM will be the beneficiary. GM will appoint the trustee of the GM Trust, who will be independent from GM, be approved by the Federal Reserve and who will have sole authority to vote and dispose of the GMAC equity contained in the GM Trust. GM has committed to the Federal Reserve that it will reduce its ownership interest, including interests as to which it is the beneficiary under the Treasury Trust and the GM Trust, in GMAC to less than 10% of the voting and total equity of GMAC by Dec. 24, 2011. In addition to GM's commitment to reduce its ownership interest in GMAC, GM made a number of other commitments to the Federal Reserve that are similar to those relied upon by the Federal Reserve to ensure that a company could not exercise a controlling influence over a bank or bank holding company, including a commitment that GM will not, on or before March 24, 2009, have or seek to have any representation on the board of managers of GMAC, other than for one non-voting observer, and that GM's veto rights under the GMAC LLC Agreement will be terminated. Based on GM's commitments to the Federal Reserve, GM is not permitted to use its current ownership of 59.86% of GMAC's common equity to exercise any controlling influence over GMAC, including the GMAC Board of Managers or the business activities of GMAC. A full-text copy of the Loan And Security Agreement is available for free at: http://ResearchArchives.com/t/s?38d6 A full-text copy of the Equity Pledge Agreement is available for free at: http://ResearchArchives.com/t/s?38d7 On Jan. 21, 2009, GM borrowed an additional $5.4 billion under the Dec. 31, 2008, Loan Agreement. GM was scheduled to borrow the $5.4 billion under the Dec. 31, 2008, Loan Agreement on Jan. 16, 2009; however, GM and the UST agreed to change the borrowing date to Jan. 21, 2009. Additionally, because Congress approved the second half of funds allocated pursuant to the Troubled Asset Relief Program, the remaining $4 billion under the Dec. 31, 2008, Loan Agreement will become available for GM to borrow on Feb. 17, 2009, subject to satisfaction of the borrowing conditions under the Dec. 31, 2008 Loan Agreement. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Latin America, Africa and Middle East, with headquarters in Miramar, Florida, is one of GM's four regional business units. GM LAAM employs approximately 37,000 people in 18 countries and has manufacturing facilities in Argentina, Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and Venezuela. GM LAAM markets vehicles under the Buick, Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and Suzuki brands. As reported in the Troubled Company Reporter on Nov. 10, 2008, General Motors Corporation's balance sheet at Sept. 30, 2008, showed total assets of US$110.425 billion, total liabilities of US$170.3 billion, resulting in a stockholders' deficit of US$59.9 billion. * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on General Motors Corp. to 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. S&P said that the outlook is negative. Fitch Ratings, as reported in the Troubled Company Reporter on Nov. 11, 2008, placed the Issuer Default Rating of General Motors on Rating Watch Negative as a result of the company's rapidly diminishing liquidity position. Given the current liquidity level of US$16.2 billion and the pace of negative cash flows, Fitch expects that GM will require direct federal assistance over the next quarter and the forbearance of trade creditors in order to avoid default. With virtually no further access to external capital and little potential for material asset sales, cash holdings are expected to shortly reach minimum required operating levels. Fitch placed these on Rating Watch Negative: -- Senior secured at 'B/RR1'; -- Senior unsecured at 'CCC-/RR5'. As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corp. and General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. Economy. GLENN LEONARD: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Glenn Stanley Leonard 832 N Maple St Burbank, CA 91505 Bankruptcy Case No.: 09-11344 Chapter 11 Petition Date: January 23, 2009 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Barry Russell Debtor's Counsel: Troy A. Stewart, Esq. 2020 El Arbolita Dr Glendale, CA 91208 Tel: (626) 616-9474 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-11344.pdf The petition was signed by Glenn Stanley Leonard. GLOBAL AIRCRAFT: Files for Bankruptcy to Complete 363 Asset Sale ---------------------------------------------------------------- Global Aircraft Solutions, Inc., reached an agreement with its senior secured lender to sell substantially all its assets in accordance with Sec. 363 of the United States Bankruptcy Code, subject to higher and better bids and an auction process. Under the terms of the agreement, the Company's senior secured lender will also hire most of Global's employees at the time it purchases Company assets, thereby preserving jobs in this challenging economic environment. In order to carry out the 363 Sale, Global has elected to file a voluntary Chapter 11 petition in the U.S. Bankruptcy Court for the Arizona District. Global and its senior secured lender expect operations to continue as usual up to, during, and subsequent to the acquisition of Company assets and hiring of the Company's employees by the senior secured lender. In order to insure a seamless transition, the Company's senior lender has committed to provide a debtor-in-possession revolving loan in an amount of up to one million dollars. Global's other secured and unsecured creditors have not yet agreed on the sale or the sale process. However, the Company believes the process can be approved by the Court without their agreement as, in the Company's business judgment, it ensures the going concern value of assets, and provides for higher and better bids to be entertained. The protocol of the 363 Sale provides for competing bids, leaving open the possibility that the assets of the Company may be purchased by a bidder other than the Company's senior secured lender. Global's Chief Restructuring Officer, S. Scott Webb, stated, "It's no secret that the industry has been hard hit, and many companies are struggling. The fact that this organization has obtained short term financing and a well-funded buyer in one of the most difficult credit markets since the great depression speaks volumes about the organization and its prospects. These accomplishments immediately strengthen our position in the marketplace, as we now have the financial backing to meet or exceed the expectations of our customers, vendors and workforce alike." Default on Victory Park Obligations As reported by the Troubled Company Reporter, Global Aircraft Solutions and its subsidiaries Hamilton Aerospace Technologies, Inc., World Jet Corporation and Hamilton Aerospace S.A. de C.V. on December 19, 2008, failed to make required payments of principal due under three non-convertible secured debentures and two senior secured notes, all with Victory Park Master Fund, Ltd. in the total amount of $7,121,316. As of December 19, 2008, the aggregate accrued and unpaid interest under the Victory Park Loans amounted to $258,109.84. The Victory Park Loans provide that a failure to pay any amount of principal, interest or late charges when due, if such failure continues for a period of at least five business days, constitutes an "Event of Default." Upon the occurrence of an Event of Default, among other things, the Interest Rate of the Victory Park Loans is increased to 25% per annum. The company is currently in default for failure to make required payments of interest under the Victory Park Loans. As of December 19, 2008, the aggregate accrued but unpaid default interest under the Victory Park Loans is an amount equal to $426,282.71. Unless the Lender agrees to modify the Victory Park Loans or alternative financing can be obtained, the company will also default on the requirement to pay the principal amounts due under the Victory Park Loans. On December 22, 2008, the companies received a notice of default from the Lender. The notice demands, among other things, immediate payment of all current outstanding principal, interest and other amounts due under the Victory Park Loans. Director Resignation On December 21, 2008, Michael Hannley notified Global that due to increased demands on his time resulting from challenges facing the financial industry, he could no longer devote the time necessary to serve on Global's Board of Directors. Accordingly, Mr. Hannley tendered, and Global accepted, his resignation from Global's Board of Directors effective immediately. Hiring of Professionals On January 14, 2009, Global retained Big Four CPAs, Inc. to act as a consultant with respect its restructuring negotiations with its creditors. S. Scott Webb, a principal of Big Four CPAs, Inc. was tapped to become, effective immediately, the Chief Restructuring Officer for Global and its affiliates and subsidiaries. The term of the agreement is the earlier of December 31, 2010, or written notice of termination by either party. Compensation includes a fee of $12,500 per month, plus expenses, plus a success fee equal to 3% of any net operating cash flow of Global for calendar years 2009 and 2010. On January 12, 2009, the Board of Directors of Global authorized the employment of the law offices of Lane & Nach, P.C., to represent Global relating to its negotiations with its major creditors to arrive at a resolution of outstanding issues, which may include restructuring through a formal proceeding. Third Quarter Results For the three months ended September 30, 2008, the company posted a net loss of $3,180,156. Gordon Hamilton, chief executive officer and director, John Sawyer, president, chief operating officer and director, and Patricia Graham, interim chief financial officer, had noted that the company has incurred recurring losses from operations, which include substantial inventory write downs due to declining market values and significant allowances taken against the company's outstanding accounts receivable. Various events of default have occurred and are continuing under secured debentures with Victory Park. "Victory Park has not consented to or waived any past, present or future defaults under the debentures or related transaction documents. Victory Park, however, is currently examining the situation and actively working with the company in an effort to resolve the matter, while it considers all of its rights, powers, privileges and remedies under the debentures and related transaction documents." Mr. Hamilton, Mr. Sawyer and Ms. Graham had pointed out that there is substantial doubt that the company will be able to repay this indebtedness on the due date. "Management has instituted a cost reduction program that includes reductions in management salaries, in labor and fringe benefit costs, in discretionary spending and has instituted more efficient management techniques for contract approval, collection of receivables, cash management and targeted marketing efforts. Management believes these factors will contribute toward achieving profitability." As of September 30, 2008, the company's balance sheet showed total assets of $23,782,299, total liabilities of $17,314,653, and total stockholders' equity of $6,467,646. A full-text copy of the company's quarterly report is available for free at: http://researcharchives.com/t/s?36f7 About Global Aircraft Solutions Headquartered in Tucson, Arizona, Global Aircraft Solutions -- http://www.globalaircraftsolutions.com-- provides parts support and maintenance, repair and overhaul (MRO) services for large passenger jet aircraft to scheduled and charter airlines and aviation leasing companies. Hamilton Aerospace and World Jet, both divisions of Global Aircraft Solutions, operate from adjacent facilities comprising about 25 acres located at Tucson International Airport. These facilities include hangars, workshops, warehouses, offices and other buildings. Notable customers include G.A. Telesis, AfriJet, Zero G, Swift Air, Pamir Airways, Wind Rose Aviation, Jetran International, the Mexican Presidential Fleet, SEDENA, Canadian North Airlines, Iraqi Airways, Ryan International Airlines, and Alant Soyuz. GMAC COMMERCIAL: Fitch Downgrades Rating on $19 Mil. Notes to B- ---------------------------------------------------------------- Fitch Ratings downgrades GMAC Commercial Mortgage Securities, Inc., series 1998-C2: -- $19.0 million class K to 'B-' from 'BB-'and assigned a distressed recovery rating of 'DR1'. -- $25.3 million class L to 'C/DR6' from 'CC/DR3'. Fitch also affirms and assigns Rating Outlooks to these classes: -- Interest-only class X at 'AAA'; Outlook Stable; -- $56.5 million class D at 'AAA'; Outlook Stable; -- $38.0 million class E at 'AAA'; Outlook Stable; -- $88.6 million class F at 'AAA'; Outlook Stable; -- $44.3 million class G at 'AAA'; Outlook Stable; -- $19.0 million class H at 'A'; Outlook Stable; -- $19.0 million class J at 'BB+'; Outlook Stable. The $11.2 million class M remains at 'C/DR6'. Classes A-1, A-2, B and C have paid in full. The downgrades are the result of an increase in expected losses on specially serviced assets coupled with the recent transfer to special servicing of nine single-tenant properties occupied by Circuit City. Rating Outlooks reflect the likely direction of any rating changes over the next one to two years. As of the January 2009 distribution date, the transaction's principal balance decreased 87.3% to $320.8 million compared to $2.53 billion at issuance. Fourteen of the remaining loans (27.3%) have defeased. Fitch has identified 26 Loans of Concern (27.6%), which includes 15 specially serviced assets (18.0%) with significant losses anticipated. The specially serviced assets include nine recently transferred single-tenant properties (10.1%) occupied by Circuit City, which has filed for bankruptcy and plans to liquidate in early 2009. These eight retail and one industrial warehouse properties are located in various states. In addition, another loan secured by a Circuit City occupied retail property (1.2%), located in Cortlandt, New York, has not transferred to special servicing as of January 2009. Fitch expects all the loans backed by Circuit City-occupied properties to incur a loss upon liquidation. The largest remaining loan (7.0%) is secured by a portfolio of industrial warehouse facilities located throughout Connecticut. The servicer reported September 2008 occupancy was 90.2% with a debt service coverage ratio of 1.38 times (x). The loan is scheduled to mature in 2023. The second largest loan (3.9%) is secured by a 639-unit multifamily property in Boulder, Colorado. The servicer reported September 2008 occupancy was 78.5% with a DSCR of 2.12x. The loan is scheduled to mature in 2028, however, the loan has an anticipated repayment date of February 2009. The borrower does not expect to payoff the loan at the ARD. GOODY'S LLC: U.S. Trustee Forms Seven-Member Creditors Committee ---------------------------------------------------------------- Roberta A. DeAngelis, the United States Trustee for Region 3, appointed seven creditors to serve on an official committee of unsecured creditors of Goody's LLC. The members of the committee are: 1) Quebecor World (USA) Inc. Attn: Jacqueline De Buck 999 De Maisonneuve West, Suite 110 Montreal, Quebec, H3A 3L4 Tel: (514) 877-5135 Fax: (514) 648-4046 2) Triangle S.C. LLC Attn: Marshall A. Bernstein, Esq. 136 Harbor Drive Jersey City, NJ 07305 Tel: (201) 332-3333 Fax: (201) 526-0160 3) All Star Apparel Attn: Tim McCallum 205 Playa Del Sur Avenue La Jolla, CA 92037, Tel: (858) 205-7827 Fax: (858) 225-3544 4) VF Jeanswear Limited Partnership dba Lee Company Attn: Michael Wade Durant Roger Keith Poplin 335 Church Ct. Greensboro, NC 27401 Tel: (336) 332-3400 Fax: (336) 332-5408 5) Alfred Dunner Inc. Attn: Raymond Barrick 1411 Broadway New York, NY 10018 Tel: (212) 944-6660 Fax: (212) 221-4518 6) Homedics, Inc. Attn: Richard G. Hoffman 3000 Pontiac Trail Commerce Twp., MI 48390 Tel: (248) 863-3000 Fax: (248) 863-3127 7) Chaps/Warnaco Attn: Therese Sinko 470 Wheelers Farms Rd. Milford, CT 06461 Tel: (203) 301-7240 Fax: (203) 301-7976 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. 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. HAYES LEMMERZ: Gets Covenant Relief; Can't Say It Won't Default --------------------------------------------------------------- Hayes Lemmerz International, Inc., and its subsidiaries, HLI Operating Company, Inc. and Hayes Lemmerz Finance LLC - Luxembourg S.C.A. on January 29, 2009, entered into Amendment No. 1 to its Second Amended and Restated Credit Agreement dated as of May 30, 2007, with the lenders and issuers from time to time party thereto, Citicorp North America, Inc., as Administrative Agent and Documentation Agent; and Deutsche Bank Securities Inc., as Syndication Agent. The Amendment favorably modifies the leverage ratio and interest coverage ratio covenants for the fourth quarter of fiscal 2008 and for each quarter of fiscal 2009. In light of the extremely difficult industry and economic conditions, no assurance can be given that the Company will be able to satisfy the amended covenants. The revised covenants are: Fiscal Quarter Ending Leverage Ratio Interest Coverage Ratio --------------------- -------------- ----------------------- January 31, 2009 5.50 2.25 April 30, 2009 5.75 1.75 July 31, 2009 7.00 1.55 October 31, 2009 7.25 1.35 January 31, 2010 5.50 2.15 The Amendment increases the applicable margin to 6.00% on Eurocurrency loans and to 5.25% on base rate loans and establishes a EURIBOR floor of 3.50% and a LIBOR floor of 2.50%. The amendment also reduces the maximum amount of permitted capital expenditures to $50 million for fiscal 2009, permits the company to exchange its existing 8.25% senior notes due 2015 for new second lien debt; requires the Company to use the proceeds from asset sales to prepay the term loan, limits the ability of the Company to make voluntary prepayments of revolving loans, and makes a number of other changes to the Credit Agreement. The Company has also agreed to pay certain fees in connection with the amendment, including a 50 basis point fee to each of the lenders approving the amendment. "This amendment provides Hayes Lemmerz with additional financial flexibility as we continue to take aggressive actions to reduce costs and preserve cash in response to extremely difficult industry and economic conditions. We appreciate the continuing support of our lending group during these difficult times," said Curtis Clawson, President, CEO and Chairman of the Board. In light of the extremely difficult industry and economic conditions, no assurance can be given that the Company will be able to satisfy the amended covenants. About Hayes Lemmerz International Based in Northville, Michigan, Hayes Lemmerz International Inc. (Nasdaq: HAYZ) -- http://www.hayes-lemmerz.com/-- is a supplier of automotive and commercial highway wheels, brakes and powertrain components. Hayes Lemmerz International, Inc. is a world leading global supplier of automotive and commercial highway wheels. The Company has 23 facilities and approximately 7,000 employees worldwide. * * * In January, the three major ratings agencies slashed Hayes-Lemmerz International Inc.'s ratings. Standard & Poor's Ratings Services lowered its corporate credit rating on automotive wheel manufacturer Hayes Lemmerz International Inc. to 'B-' from 'B'. At the same time, S&P also lowered its issue-level ratings on the company's debt. All ratings on the company remain on CreditWatch with negative implications, where they were placed on Nov. 14, 2008. "The downgrades reflect our view that declining auto sales and production in North America and Europe during 2009 could lead to higher leverage and thin liquidity as Hayes struggles to reduce its negative free operating cash flow over the next several quarters," said Standard & Poor's credit analyst Gregg Lemos Stein. Fitch Ratings downgraded the Issuer Default Ratings and outstanding debt ratings of Hayes Lemmerz and subsidiaries to non- investment grade. Moody's Investors Service lowered the Corporate Family and Probability of Default ratings of HLI Operating Company, Inc., a wholly-owned subsidiary of Hayes Lemmerz International, to Caa1 from B3. Moody's also lowered these ratings: HLI Operating Company's senior secured bank facilities to B3 from B2; and Hayes Lemmerz Finance's (Luxembourg S.a.r.l.) secured term loan and synthetic letter of credit facility to B3 from B2, and its senior unsecured notes to Caa3 from Caa2. The ratings remain under review for further downgrade. HEARST CORP: Unit Buys Ziff Davis Media's 1UP Digital ----------------------------------------------------- Ziff Davis Media said it has sold 1UP Digital Network, including 1UP.com, MyCheats.com, GameVideos.com and GameTab.com to UGO Entertainment, a division of Hearst Corporation Ziff Davis Media's EGM Magazine will be discontinued. The January 2009 issue will be the final printed issue. "We believe this is a smart transaction for Ziff Davis Media that places these market leading assets and teams in a great environment poised for further success. The transaction allows us to pay down debt and shift our full focus to our core PCMag Digital Network business. We thank our 1UP team members for their contributions and wish them the best of success into the future", said Ziff Davis Media CEO Jason Young. "Since we started UGO 11 years ago, we have served the gamer community and built a world-class online publishing platform," said J Moses, CEO of UGO Entertainment. "The acquisition of 1UP, with its authentic voice, tenured editorial personalities and bustling user community, allows us to expand our base of quality content and represents a major step forward in UGO's mission to become the leader in the games space." Ziff Davis Media recently announced the launch of the PCMag Digital Network reflecting a move to a 100% digital position for its flagship brand. The PCMag Digital Network leverages its quality content and audience to offer marketers a unique combination of solutions that enable strong brand positioning, while driving measurable response results. More announcements about the future growth and expansion of The Network will be issued in the coming months. GCA Savvian Advisors acted as exclusive financial advisor to Ziff Davis Media on the transaction. About the PCMag Digital Network The PCMag Digital Network - http://www.PCMag.com-- is one of the world's best-known publishers of leading technology-based digital content products. Its flagship property, PCMag.com, delivers comprehensive labs-based product reviews and the world-renowned PCMag Editors' Choice Awards, the most trusted buying recommendations for technology products and services across the globe. Reaching more than seven million highly engaged technology buyers and influencers, PCMag Digital Network provides contextual marketing solutions that drive results. Brands within the Network also include ExtremeTech, Gearlog, Appscout, Smart Device Central, GoodCleanTech, DL.TV, Cranky Geeks, and PCMagCast. The Network's content is delivered worldwide to readers across a multiple platform of Web sites, e-newsletters, Webcasts, broadband video, software downloads and RSS feeds to users in more than 20 countries. About Hearst Corporation Hearst Corporation -- http://www.hearst.com/-- is a diversified communications company. Its major interests include 16 daily and 49 weekly newspapers, including the Houston Chronicle, San Francisco Chronicle and Albany Times Union; as well as interests in an additional 43 daily and 72 non-daily newspapers owned by MediaNews Group, which include the Denver Post and Salt Lake Tribune; nearly 200 magazines around the world, including Cosmopolitan and O, The Oprah Magazine; 28 television stations through Hearst-Argyle Television which reach a combined 18% of U.S. viewers; ownership in leading cable networks, including Lifetime Television, A&E Television Networks, The History Channel and ESPN; as well as business publishing, Internet businesses, television production, newspaper features distribution and real estate. About Ziff Davis Headquartered in New York City, Ziff Davis Media, Inc. -- http://www.ziffdavis.com/-- and its affiliates are integrated media companies serving the technology and videogame markets. They are information services and marketing solutions providers of technology media, including publications, Websites, conferences, events, eSeminars, eNewsletters, custom publishing, list rentals, research and market intelligence. Their US-based media properties reach over 22 million people per month at work, home and play. They operate in three segments: the Consumer Tech Group, which includes PC Magazine and pcmag.com; the Enterprise Group, which includes eWEEK and eweek.com, and the Game Group, which includes Electronic Gaming Monthly and 1up.com. The company and six debtor-affiliates filed for bankruptcy protection on March 5, 2008 (Bankr. S.D. N.Y. Case No. 08-10768). Carey D. Schreiber, Esq., at Winston & Strawn, LLP, represents the Debtors in their restructuring efforts. The Court confirmed the Debtors' Second Amended Plan of Reorganization on June 17, 2008. The Debtors emerged from bankruptcy protection on July 1, 2008. HEARST CORPORATION: Newspapers Hit By Revenue Declines, Recession ----------------------------------------------------------------- Robert W. Decherd, president and chairman of A.H. Belo Corp., which publishes The Dallas Morning News, said in a Jan. 30 letter that the rapid deterioration in the U.S. economy has changed the nature and urgency of re-thinking the company's business model -- "just as every newspaper publisher and companies in virtually every American industry are compelled to do." The past two months saw the demise of two major players in the industry. Tribune Co., which own leading papers, including the Los Angeles Times and Chicago Tribune, etc., having collective paid circulation totaling 2.2 million copies daily and 3.3 million copies on Sundays, filed for bankruptcy on Dec. 8, 2008. While Tribune had a wide portfolio, which included television and radio broadcasting, the Internet, and other entertainment offering, including the Chicago Cubs baseball team, it blamed its bankruptcy filing on the unprecedented decline in the newspaper publishing industry, which decline exacerbated by the current recession. The Star Tribune newspaper, which has the highest daily circulation in the state of Minnesota, and 15th largest daily newspaper in the United States, sought bankruptcy protection on Jan. 15 due to its worsening financial conditions and its heavy debt burden. "The domestic newspaper industry has been crippled by an unprecedented and severe decline in advertising revenue," said The Star Tribune Company CFO David W. Montgomery, in a document explaining Star Tribune's bankruptcy filing. "While this decline has been occurring for several years, the decline has been accelerated and exacerbated by the recession and the dislocation of the credit markets." Aside from Star Tribune and Tribune Co., other newspaper owners have been hit by the decline in advertisement revenues although they have been able to avert bankruptcy filing, so far. Advertising, Circulation Down Comparing figures provided by the Audit Bureau of Circulations for six-month periods ending Sept. 30, 2008, and March 31, 2008, daily circulation for the top 30 newspapers in the U.S. are down 5.27%: Daily Circulation For Six Months Ended -------------------- 09/30/08 03/31/08 % Change -------- -------- -------- 1 USA Today 2,293,310 2,284,219 0.40% 2 The Wall Street Journal 2,011,999 2,069,463 -2.78% 3 The New York Times 1,000,665 1,077,256 -7.11% 4 Los Angeles Times 739,147 773,884 -4.49% 5 Daily News - New York, NY 632,595 703,137 -10.03% 6 New York Post 625,421 702,488 -10.97% 7 Washington Post 622,714 673,180 -7.50% 8 Chicago Tribune 516,032 541,663 -4.73% 9 Houston Chronicle 448,271 494,131 -9.28% 10 The Arizona Republic - Phoenix 413,332 413,332 0.00% 11 Newsday - Melville, NY 377,517 379,613 -0.55% 12 San Francisco Chronicle 339,430 370,345 -8.35% 13 Dallas Morning News 338,933 368,313 -7.98% 14 The Boston Globe 323,983 350,605 -7.59% 15 Star Tribune - Minneapolis, MN 322,360 345,130 -6.60% 16 The Star-Ledger - Newark, NJ 316,280 334,150 -5.35% 17 The Chicago Sun-Times 313,176 330,280 -5.18% 18 The Plain Dealer - Cleveland, OH 305,529 326,907 -6.54% 19 The Philadelphia Inquirer 300,674 322,362 -6.73% 20 Detroit Free Press 298,243 316,007 -5.62% 21 The Oregonian - Portland, OR 283,321 312,274 -9.27% 22 The Atlanta Journal-Constitution 274,999 308,944 -10.99% 23 The San Diego Union-Tribune 269,819 304,399 -11.36% 24 St. Petersburg Times 268,935 288,669 -6.84% 25 The Sacramento Bee 253,249 268,755 -5.77% 26 The Indianapolis Star 244,796 255,303 -4.12% 27 St. Louis Post-Dispatch 240,796 255,057 -5.59% 28 The Kansas City Star 239,358 252,785 -5.31% 29 The Orange County (CA) Register 236,270 250,724 -5.76% 30 The Mercury News - San Jose, CA 224,199 240,223 -6.67% -------- -------- ------ 15,075,353 15,913,598 -5.27% Mr. Montgomery, Star Tribune's CEO, said that with respect to the newspaper industry, print classified advertising dropped by more than 25% in the first half of 2008 alone, representing a $1.8 billion loss in revenue for domestic newspapers. The industry, he added, has suffered historic declines in circulation, which have not only resulted in decreased circulation revenue, but have also acted as a further catalyst for declines in advertising revenue. He noted that much of a newspaper's more profitable print advertising sales are tied to circulation, which advertisers use as a proxy for readership. As circulation has declined, newspapers have been compelled to charge less for these ads. Chandler Bigelow III, Tribune's senior vice president and chief financial officer, said that while the company's newspaper advertising revenue continues to be in line with other large metropolitan newspapers, newspaper advertising revenue generally is in significant decline, down industry-wide 15% to 20% in 2007 in major metropolitan markets, and down industry-wide nearly $2 billion, or 18%, in the third quarter of 2008. Gannett Co., Inc., which owns the U.S.'s most read newspaper, USA Today, and 84 other newspapers, said its publishing segment operating revenues were $1.4 billion for the quarter of 2008, compared with $1.7 billion in the fourth quarter of 2007, an 18.6% decline. Advertising revenues were $963.4 million compared with $1.2 billion in the fourth quarter of 2007. At USA TODAY, advertising revenues were 18.5% lower in the fourth quarter compared to the fourth quarter in 2007. Gannett said that its results were reflective of "unprecedented turmoil in the economies of both the U.S. and the UK and in the financial market", although the results of its broadcasting and digital segments were largely unchanged. New York Times Co. disclosed that in the fourth quarter of 2008 total revenues decreased 10.8% to $772.1 million, as advertising revenues decreased 17.6%. The New York Times publisher said revenues decreased mainly due to lower print advertising. "The disruptions of the global economy are affecting all businesses and industries, especially companies, such as ours, that generate a significant portion of their revenues from advertising," said Janet L. Robinson, NYT president and CEO. Cablevision Systems Corporation, which bought Newsday from Tribune Co. in July 2008, has yet to reveal its fourth quarter results on Feb. 23. It recorded $73,468,000 in revenues from its newspaper publishing group in three months ended Sept. 30, 2008. Other firms are scheduled to release their fourth quarter results on these dates: Company Earnings Release Date ------- -------------------- News Corporation 02/05/09 Washington Post Co. 02/25/09 Cablevision 02/23/09 A.H. Belo Corp. 02/17/09 Sun-Times Media Group 03/09/09 The McClatchy Company 02/05/09 Journal Register Co. 02/02/09 Gatehouse Media Inc. 03/09/09 American Media Inc. __/__/09 Firms that are privately held, like Hearst Corporation, owner of the San Francisco Chronicle, do not publicly disclose their financial results. Rising Internet Traffic Cutting Print Revenues Various reports say that newspaper revenues have been decreasing, as readers have shifted to the Web. According to Bloomberg, rising Internet use have hurt magazines and newspapers. While overall revenues fell, New York Times' Internet businesses, which include NYTimes.com, About.com, Boston.com and other company Web sites, increased 6.5% to $351.7 million in 2008 from $330.2 million in 2007, and Internet advertising revenues increased 9.3% to $308.8 million from $282.5 million. In total, Internet businesses accounted for 12.0% of the company's revenues in the fourth quarter versus 11.0% in the 2007 fourth quarter. Lee Enterprises Incorporated (NYSE: LEE), which runs 49 daily newspapers, including the St. Louis Post-Dispatch, said that Circulation revenues dropped 4.5% to $47.56 million. Combined print and online advertising revenue dropped 15.2% to $184.6 million, with retail advertising down 9.8%, and classified down 27.1%. More Writedowns While the Washington Post Co. (NYSE:WPO) has yet to reveal its quarterly results, it announced on Jan. 15 a regular quarterly dividend of $2.15 per share, payable on Feb. 6, 2009. On Jan. 23, Washington Post said it would take a $70 million impairment charge after concluding that the estimated fair value of its online lead generation business is less than its reported carrying value. Reuters notes that the Post is one of several U.S. newspaper publishers that have written down the value of their properties as advertising revenue shrinks. According to Reuters, The New York Times, Lee Enterprises (LEE.N) and McClatchy Co. (MNI.N) and other publishers have written down billions of dollars in the past several years. In fiscal 2008, Lee Enterprises recorded after-tax non-cash charges totaling $893.7 million to reduce the carrying value of goodwill, other assets and the company's investment in TNI Partners. On Jan. 28, American Media Operations, Inc., operating subsidiary of American Media Inc., leading publisher of celebrity journalism and health and fitness magazines in the U.S., said it is in the process of performing impairment testing of its tradenames and goodwill. AMOI expects to record impairment charges for its titles of between $200 million and $220 million with respect to certain of its tradenames and goodwill. Heavy Debt Burden, Liquidity Problems Aside from declining revenues, some of the newspaper publishers were highly leveraged, limiting their flexibility and ability to address liquidity constraints. At that time of its bankruptcy filing Tribune Co. owed $13 billion in total funded debt. Starting June 30, 2008, Star Tribune stopped making payments scheduled quarterly interest, which reached $20 million as of its bankruptcy petition in January 2009. While Star Tribune had $26.9 million in cash as of Dec. 31, 2008, its liabilities reached $661.1 million, including $392.5 million owed on its first lien debt and $96 million owed on its second loan debt, paling in comparison to assets of only $493.2 million. Lee Enterprises also is trying to renegotiate $306 million in debt that it assumed when it bought Pulitzer Inc. in 2005. Of that, $142.5 million is due in April and Lee's auditors have said Lee can't afford to pay it, the St. Louis Post-Dispatch said. GateHouse Media, Inc., which has 92 daily newspapers with total paid circulation of approximately 834,000, announced Jan. 28 that it is seeking to amend its $1.2 billion senior secured credit facility. The amendment would, among other things, allow the company to repurchase outstanding term loans under the facility at prices below par through a modified Dutch auction through December 31, 2011. The company is seeking the consent of the requisite lenders by 5:00 pm (Eastern Time) Monday, February 2, 2009, in order to effect the amendment American Media, publisher of celebrity journalism and health and fitness magazines including Star, Shape and the National Enquirer, made tender offers for $570 million of its outstanding senior subordinated notes, which comprise (i) $400,000,000 principal amount of 10.25% Series B Senior Subordinated Notes due 2009 and $14,544,000 aggregate principal amount of 10.25% Series B Senior Subordinated Notes due 2009, and (ii) $150,000,000 aggregate principal amount of 8 7/8% Senior Subordinated Notes due 2011 and $5,454,000 aggregate principal amount of 8 7/8% Senior Subordinated Notes due 2011. American Media, through its AMOI subsidiary will exchange those Notes with (a) $21,245,380 principal amount of 9% senior PIK notes due 2013, (b) $300,000,000 principal amount of the company's 14% senior subordinated notes due 2013, and (c) 5,700,000 shares of Media's common stock, representing 95% of American Media's outstanding shares of common stock. The offer expired Jan. 29. As of Jan. 9, AMOI has entered into agreements with holders of 81% of the outstanding aggregate principal amount of the 2009 Notes and 69% of the outstanding aggregate principal amount of the 2011 Notes. The tender offer conditioned upon, among other things, receipt of tenders and related consents by holders of at least 98% of each series of the Existing Notes. Pursuant to forbearance agreements, holders of the Existing Notes have agreed to forbear until 5:00 p.m., New York City time, on February 4, 2009, from exercising any remedies under the indentures governing the Existing Notes as a result of AMOI's. Sun-Times Media Group, Inc. (Pink Sheets: SUTM), which owns the Chicago Sun-Times, informed investors on Jan. 29 that an arbitrator has awarded CanWest Global Communications Corp., a Canadian media company, CN$51 million, exclusive of interest and costs, in connection with a dispute relating to CanWest's purchase of newspaper assets from Sun-Times Media in 2000. On Dec. 19, 2003, CanWest pursued arbitration, in connection with its claim that Sun-Times owed CN$84.0 million related to the transaction. As of Sept. 30, 2008, the company had a reserve established in respect of the arbitration in the amount of CN$15 million. A previously established escrow account funded by the company containing approximately CN$22 million may be available to pay any final arbitration award. The Chicago Tribune noted that as of Sept. 30, Sun-Times Media had cash of $99.8 million, but the company faces a number of tax and other liabilities. After a big write-down of intangible assets during the third quarter, Sun- Times' negative worth, or negative shareholder equity, widened to $321.7 million, the Chicago Tribune said. In Jan. 28, Washington Post said it's selling $400 million in fixed-rate notes at a price of 99.614% of par for an effective yield of 7.305% per annum. The ten-year notes will have a coupon of 7.25% per annum, payable semi-annually on February 1 and August 1, beginning August 1, 2009. The company intends to use the net proceeds from the sale of the notes to repay $400 million of notes that mature on February 15, 2009. Sale of Assets, Job Cuts to Stem Losses A.H. Belo's Mr. Decherd said in his Jan. 30 letter to employees that the decline in advertising revenues for the newspaper industry and all media persists, and that the key for the company is to generate and preserve cash. He stated that the company needs to reduce its workforce as the revenue trends do not support or require the same number of people the company has employed. The reduction will "probably be in the range of 500 jobs." He added that the company would suspend the A. H. Belo Savings Plan match and will cut reimbursements policies to employees. "Similarly, it is no longer reasonable for the Company to provide free parking in downtown Dallas," he said. A monthly charge of $40 will take effect May 1, 2009 for all downtown Dallas surface lots owned by the company. On Jan. 9, Hearst Corp. announced that it is offering for sale the Seattle Post-Intelligencer and its interest in a joint operating agreement under which the P-I and The Seattle Times are published. Hearst said that should a sale not occur within 60 days, it will pursue options, "including a move to a digital-only operation with a greatly reduced staff or a complete shutdown of all operations." "In no case will Hearst continue to publish the P-I in printed form following the conclusion of this process." The P-I, which Hearst has owned since 1921, has had operating losses since 2000. The P-I lost approximately $14 million in 2008 and its forecast anticipates a greater loss in 2009. Hearst also denied speculations it is interested in acquiring The Seattle Times. On Jan. 28, 2009, The New York Times Co., which also owns the International Herald Tribune and The Boston Globe, announced that it has retained Goldman, Sachs & Co. as its financial advisor to explore the possible sale of its 17.75% ownership interest in New England Sports Ventures, LLC. NESV owns the Boston Red Sox, Fenway Park and adjacent real estate, approximately 80 percent of New England Sports Network, the top rated regional cable sports network in the country delivered to more than four million homes throughout New England and nationally via satellite, and 50 percent of Roush Fenway Racing, a leading NASCAR team. Tribune Co., which is in the U.S. Bankruptcy Court for the District of Delaware to delever its balance sheet, is arranging the sale of its Chicago Cubs baseball team. Times Publishing Co., which publishes the St. Petersburg Times, one of the most respected regional newspapers in the U.S., is exploring the sale of Congressional Quarterly, Inc. Based in Washington, D.C., Congressional Quarterly publishes news and information on politics, public policy and legislative activity at the federal, state and local levels. The McClatchy Company, which has 30 daily newspapers, including The Miami Herald, The Sacramento Bee, and the Fort Worth Star- Telegram, said that it will suspend its quarterly dividend after paying the first quarter 2009 dividend for the foreseeable future in order to preserve cash for debt repayment. The first quarter 2009 dividend of nine cents per share is half the per share dividend paid in the 2008 first quarter. On Jan. 30, Editor & Publisher reported that the Journal Register Co. announced the sale of The Hershey (Pa.) Chronicle to The Sun in Hummelstown, Pa. On Jan. 7, Journal Register said it has signed an agreement with Central Connecticut Communications regarding a sale of The Bristol Press, The Herald of New Britain and The Sunday Herald Press from Journal Register Company. The sale includes the assets of the papers' web sites and of three nearby weeklies, the Wethersfield Post, the Newington Town Crier and the Rocky Hill Post. As of November 2008, JRC owned 22 daily newspapers and approximately 300 non-daily publications. Some Newspapers to Reach End According to a blog by Douglas A. McIntyre posted Jan. 11 at 24/7 Wall St., twelve major media brands are likely to close in 2009, as Journal Register and Gatehouse, and McClatchy have struggled. It noted that The Seattle Post-Intelligencer, Denver's Rocky Mountain News, The Miami Herald and the San Francisco Chronicle are on the block, and may be shut if no buyers emerge. The New York Daily News and The New York Observer are also at risk, according to the report. The United Press International Inc. reported Jan. 9 that Sun- Times Media said it would close 12 weekly newspapers to cut expenses as advertising revenues have fallen. The 12 suburban newspapers scheduled to close are part of 51 newspapers published by Pioneer Press, which the Sun-Times purchased in 1989. The newspapers, scheduled to fold Jan. 15, cover mostly the northwest suburbs of Chicago, Crain's Chicago Business reported Friday. According to CT Business Journal, Journal Register closed 16 newspapers in Connecticut in December. The papers affected include the Branford Review, Clinton Recorder, Hamden Chronicle, Milford Weekly, North Haven Post, Shelton Weekly, Stratford Bard, West Haven News, Wallingford Voice, East Haven Advertiser and others. Hanging In the Balance While Tribune Co., and Star Tribune have filed for bankruptcy, other newspaper publishers' fate are hanging in the balance. American Media's revolving facility, of which $60 million is outstanding and the term loan facility, of which $439.6 million is owed, both will mature on February 1, 2009 if the company has more than $25.0 million of the 10.25% Series B Senior Subordinated Notes due May 1, 2009 outstanding on February 1, 2009. According to Crain's New York, John Page, senior analyst at Moody's, said it was unclear what the banks would do with the company if an agreement couldn't be reached with bondholders. "It's a difficult environment to be selling assets," he said. In its form 10-Q for the third quarter of 2008, American Media Operations said if it is unable to extend or refinance the Notes, the 2006 Credit Agreement will likely mature early and the Company will not have sufficient funds to repay such indebtedness. "In such event, the Company may have to liquidate assets on unfavorable terms, or be unable to continue as a going concern, and incur additional costs associated with bankruptcy." Lee Enterprises' waiver of covenant conditions related to the $306 million Pulitzer Notes debt of its subsidiary St. Louis Post- Dispatch LLC expire Feb. 6, 2009. The Pulitzer Notes mature in April 2009. Lee says discussions with lenders continue. The struggles of the newspaper industry have also resulted to pulp- and paper-related bankruptcies. Paperboard and paper-based packaging Smurfit-Stone Corp., filed for Chapter 11 on Jan. 26, and Corp. Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Magazine printer, Quebecor World Inc., and pulp mill operator Pope & Talbot Inc., have also sought bankruptcy protection in Canada and the U.S. About Hearst Corporation Hearst Corporation -- http://www.hearst.com/-- is a diversified communications company. Its major interests include 16 daily and 49 weekly newspapers, including the Houston Chronicle, San Francisco Chronicle and Albany Times Union; as well as interests in an additional 43 daily and 72 non-daily newspapers owned by MediaNews Group, which include the Denver Post and Salt Lake Tribune; nearly 200 magazines around the world, including Cosmopolitan and O, The Oprah Magazine; 28 television stations through Hearst-Argyle Television which reach a combined 18% of U.S. viewers; ownership in leading cable networks, including Lifetime Television, A&E Television Networks, The History Channel and ESPN; as well as business publishing, Internet businesses, television production, newspaper features distribution and real estate. INDEPENDENT BANK: Moody's Downgrades Bank Strength Rating to 'D' ---------------------------------------------------------------- Moody's Investors Service downgraded the ratings of Independent Bank (bank financial strength to D from C-, deposits to Ba2/Not- Prime from Baa1/Prime-2, other senior obligations to Ba3/Not-Prime from Baa1/Prime-2, and issuer rating to Ba3 from Baa1). Following the rating action, the outlook is negative. Independent Bank is the lead subsidiary of Ionia, Michigan-based Independent Bank Corporation. The holding company is unrated. Moody's said the downgrade reflects its view that Independent's overall credit profile has weakened as a result of continued asset quality deterioration, particularly in its commercial real estate and residential mortgage portfolios, and the impact of that on the bank's financial performance. Moody's added that the rating action incorporates the likelihood that credit costs will remain high in the medium-term, which would delay Independent's return to profitability and substantially weaken its capital position. In Moody's view, Independent's diminished credit profile is commensurate with a bank financial strength rating of D. At December 31, 2008, Independent's nonperforming assets totaled 6% of loans plus other real estate owned and 75% of tangible common equity (including 25% equity credit for TARP preferred stock) plus loan loss reserves. The high level of nonperformers was largely driven by deterioration in Independent's commercial real estate portfolio, which accounted for over 60% of total nonperformers. Within that portfolio, the land, land development, and construction categories accounted for close to 40% of total nonperformers, despite representing only 6% of total loans. The negative outlook reflects the possibility that the protracted downturn in the Michigan economy could lead to further weakening in Independent's credit profile over the medium-term. In Moody's view, the outlook for the Michigan economy, which was weak prior to the credit downturn, has worsened, and will continue to put pressure on Independent's asset quality, profitability, and capital. A prolonged period of reporting poor results could challenge Independent's franchise stability, added the rating agency. The negative outlook also considers the possibility that Moody's assumptions regarding expected losses in Independent's loan portfolio could rise if economic conditions deteriorate beyond current expectations. Moody's last rating action on Independent was on February 28, 2008, when it downgraded the bank's ratings (bank financial strength to C- from C, long-term deposits to Baa1 from A3). Independent Bank Corporation is headquartered in Ionia, Michigan and reported assets of $3.0 billion at December 31, 2008. INTELSTAT SUBSIDIARY: S&P Assigns Issue-Level Rating at 'BB-' ------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned a 'BB-' issue- level rating and a '1' recovery rating to Intelsat Subsidiary Holding Co. Ltd.'s (Intelsat Subholdco) proposed 8.875% senior notes due 2015. The '1' recovery rating indicates the expectations for very high (90%-100%) recovery in the event of a payment default. Proceeds from the new debt will be used to purchase any of the Intelsat Ltd. notes that will be tendered in the Jan. 14, 2009, tender offer and for general corporate purposes. In addition, S&P is lowering the issue-level rating on Intelsat Intermediate Holding Co. Ltd.'s 9.5% senior discount notes due 2015 to 'CCC+' from 'B-'. S&P revised the recovery rating on the notes to '6' from '5'. The '6' recovery rating indicates the expectations for negligible (0%-10%) recovery in the event of a payment default. The downgrade of this issue is due to the issuance of the new Intelsat Subholdco bond. S&P has affirmed all other ratings on Intelsat and its subsidiaries. The outlook is stable. "We believe Intelsat's aggressive leverage could constrain its ability to react to changes in its business, especially given the greater financial flexibility at its principal fixed-service satellite competitors," said Standard & Poor's credit analyst Naveen Sarma. INTERSTATE BAKERIES: Bid to Reject Trademark License Pact Opposed ----------------------------------------------------------------- Lewis Brother Bakeries Incorporated and Chicago Baking Company dispute a request of Interstate Bakeries Corporation and its debtor-affiliates to reject reject a license agreement with LBB and CBC, effective as of December 5, 2008. LBB and CBC asked the U.S. Bankruptcy Court for the Western District of Missouri to deny the Debtors' request. The License Agreement, dated as of December 27, 2006, is hinged upon an asset purchase agreement under which the Debtors sold to LBB and CBB certain assets in their business operations in Chicago and Illinois. Under the License Agreement, the Debtors granted LBB and CBC "a perpetual, royalty-free, assignable, transferable, exclusive but in no event sublicensable, license to use IBC-owned trademarks in certain territories." According to IBC's counsel, Paul M. Hoffman, Esq., at Stinson Morrison Hecker LLP, in Kansas City, Missouri, the License Agreement should be rejected because it "deprives the Debtors of the opportunity to sell, or license to other licensee, the same goods covered by the Trademarks in the Territory," and is therefore not necessary to the Debtors' ongoing operations. Mr. Hoffman said the parties' entry into the Agreements is in compliance with the antitrust decree entered by the United States District Court for the Northern District of Illinois, relating to an antitrust action by the federal government against the Debtors, labeled U.S. v. Interstate Bakeries Corporation and Continental Baking Company (N.D. Case No. 95 C 4194). He said the Antitrust Decree expired by its own terms in 2006. Mr. Hoffman also noted that LBB and CBC will not be able to use Section 365(n) of the Bankruptcy Code to continue using the Trademarks after the rejection of the License Agreement, because the provision does not apply to trademarks. However, he added, in the event that the License Agreement is rejected, LBB and CBC will have the opportunity to file a rejection claim in the Debtors' cases to collect on any amounts from the Debtors on account of the Rejection. Mr. Hoffman pointed out that the License Agreement is an executory contract under Section 365(a) of the Bankruptcy Code because of these "unperformed obligations" on the part of the Debtors: * not to use the marks within the geographic area reserved to LBB and CBC; * to notify LBB and CBC of claims by or against third parties; and * to indemnify LBB and CBC. Not An Executory Contract In their objection, LBB and CBC argue that following many years and a substantial amount of money advertising and expanding the Trademarks, they will suffer significant damages if they are otherwise unable to use the Trademarks. Eric L. Johnson, Esq., at Spencer Fane Britt & Browne, in Kansas City, Missouri, tells the Missouri Bankruptcy Court that the License Agreement in substance was a sale of property rather than a typical trademark license, which sale left no material obligations for the parties to perform, and for which LBB and CBC paid approximately $8 million. Conversely, the License Agreement is not an executory contract because the parties' unperformed obligations are minimal, says Mr. Johnson. The Debtors' request to reject the License Agreement allows them to "improperly reverse" a 10-year-old sale at the expense of LBB and CBC, and thereby seize trademark rights that could be worth millions of dollars, in violation of Section 365 of the Bankruptcy Code, Mr. Johnson points out, citing In re Bluman, 125 B.R. 359, 363 (Bankr. E.D.N.Y. 1991). LBB and CBC have commenced an adversary proceeding seeking the Court's declaratory judgment that the License Agreement is not an executory contract which the Debtors can reject or assume and assign under Section 365. Leslie A. Greathouse, Esq., at Spencer Fane Britt & Browne LLP, in Kansas City, Missouri, on behalf of LBB and CBC, said in the complaint that despite LBB and CBC's several attempts to obtain clarification from the Debtors, the Debtors are uncertain as to whether they will treat the License Agreement as an executory contract, or intend to reject or assume and assign the License Agreement, under their Amended New Plan of Reorganization. Mr. Greathouse said Section 365 provides that an executory contract is "a contract under which the obligation of both the bankrupt and the other party to the contract are so far unperformed that the failure of either to complete performance would constitute a material breach excusing the performance of the other," Ms. Greathouse said, pointing the Court to In re Craig, 144 F.3d 593, 596 (8th Cir. 1998). Because IBC granted LBB and CBC a License, for which LBB and IBC fully paid all consideration due under the Asset Purchase Agreement, LBB and CBC have fully performed their obligations under the License Agreement, Mr. Greathouse noted. Moreover, IBC entered into the Agreements so that it could comply with the Antitrust Decree, he continued . Therefore, IBC would have fully performed its material obligations under the License Agreement pursuant to the Antitrust Decree; otherwise, IBC would have violated the Antitrust Decree. The Debtors have said LBC and CBC's complaints are without merit, and insisted the License Agreement is an executory contract. The hearing to consider the Debtors' request to reject their lease agreement with Lewis Brothers Bakeries Incorporated and Chicago Baking Company has been continued to April 15, 2009. About Interstate Bakeries Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh-baked bread and sweet goods, under various national brand names, including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and Drake's(R). Currently, IBC employs more than 25,000 people and operates 45 bakeries, as well as approximately 800 distribution centers and approximately 800 bakery outlets throughout the country. The company and eight of its subsidiaries and affiliates filed for chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6% senior subordinated convertible notes due Aug. 15, 2014) in total debts. The Debtors first filed their Chapter 11 Plan and Disclosure Statement on Nov. 5, 2007. On Jan. 30, 2008, the Debtors received court approval of the disclosure statement explaining their first amended plan. IBC did not receive any qualifying alternative proposals for funding its plan in accordance with the court- approved alternative proposal procedures. The Debtors, on Oct. 4, 2008, filed another Plan, which contemplates IBC's emergence from Chapter 11 as a stand-alone company. The filing of the Plan was made in connection with the plan funding commitments, on Sept. 12, 2008, from an affiliate of Ripplewood Holdings L.L.C. and from Silver Point Finance, LLC, and Monarch Master Funding Ltd. On December 5, 2008, the Bankruptcy Court confirmed IBC's Amended New Joint Plan of Reorganization. The plan was filed October 31, 2008. The exit financings that form the basis for the Plan are reflected in corresponding debt and equity commitments. Bankruptcy Creditors' Service, Inc., publishes Interstate Bakeries Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by Interstate Bakeries Corporation and its eight affiliated debtors. (http://bankrupt.com/newsstand/or 215/945-7000) INTERSTATE BAKERIES: Exit Loan OK'd As Emergence Deadline Nears --------------------------------------------------------------- Judge Jerry Venters of the U.S. Bankruptcy Court for the Western District of Missouri authorized Interstate Bakeries Corporation and its debtor-affiliates to enter into the amended key terms of the asset-based senior secured revolving credit facility to be structured, arranged and syndicated by General Electric Capital Corporation and GE Capital Markets. At the hearing held January 29, 2009, the Court allowed the Debtors to execute and perform their obligations under the definitive documentation of the Amended ABL Facility, including all collateral and security documents and intercreditor agreements. Counsel for the Debtors, J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP, in Chicago, Illinois, said both sides continue to work on closing the financing, which he said could happen "soon," reports The Associated Press. The Debtors now have less than 9 days to get the revisions documented and sign-offs by all of the lenders and investors. On February 9, 2009, IBC's access to credit expires, as do the commitments from those who agreed to invest or lend nearly $600 million so the company can operate upon its emergence from bankruptcy, notes KansasCity.com. Once those documents are complete, the company can shed bankruptcy and begin operating as a new company. The Revised ABL Facility was agreed in principle between the Debtors and the ABL Commitment Parties on January 26, 2009. Essentially, it calls for the reduction of the Commitment Amount from $125,000,000 to $105,000,000. Under the Revised ABL Facility, the ABL Facility lenders will receive a first priority lien and security interest on certain real property collateral that was previously unencumbered. Additionally, the ABL Facility Lenders will not receive a junior lien and security interest in certain cash deposited by the Debtors in order to cash collateralize outstanding letters of credit. Prior to its Amendment, the Original ABL Facility was approved by the Court in October 2008, along with (i) a term loan facility for $344,000,000 with Silver Point Finance LLC and Monarch Master Funding, Ltd., and (ii) a third priority secured term loan financing facility for $142,300,000, under which Prepetition Lender Claimholders will receive Pro Rata share of the New Third Lien Term Loan in exchange for the Claims. The Funding Agreements outline the capital structure for Reorganized IBC upon its emergence from Chapter 11. The Debtors admitted early this month that reaching the final Funding Agreements contemplated under the Commitments from investors was taking more time and was more complex than what they had hoped for, due to a difficult environment in the financial markets. IBC CEO Craig Jung has noted that the ABL Facility was "the last significant obstacle" to IBC's emergence. As required by the Commitments, IBC must emerge from Chapter 11 by February 9, 2009. IBC has been in bankruptcy since 2004. About Interstate Bakeries Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh-baked bread and sweet goods, under various national brand names, including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and Drake's(R). Currently, IBC employs more than 25,000 people and operates 45 bakeries, as well as approximately 800 distribution centers and approximately 800 bakery outlets throughout the country. The company and eight of its subsidiaries and affiliates filed for chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6% senior subordinated convertible notes due Aug. 15, 2014) in total debts. The Debtors first filed their Chapter 11 Plan and Disclosure Statement on Nov. 5, 2007. On Jan. 30, 2008, the Debtors received court approval of the disclosure statement explaining their first amended plan. IBC did not receive any qualifying alternative proposals for funding its plan in accordance with the court- approved alternative proposal procedures. The Debtors, on Oct. 4, 2008, filed another Plan, which contemplates IBC's emergence from Chapter 11 as a stand-alone company. The filing of the Plan was made in connection with the plan funding commitments, on Sept. 12, 2008, from an affiliate of Ripplewood Holdings L.L.C. and from Silver Point Finance, LLC, and Monarch Master Funding Ltd. On December 5, 2008, the Bankruptcy Court confirmed IBC's Amended New Joint Plan of Reorganization. The plan was filed October 31, 2008. The exit financings that form the basis for the Plan are reflected in corresponding debt and equity commitments. Bankruptcy Creditors' Service, Inc., publishes Interstate Bakeries Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by Interstate Bakeries Corporation and its eight affiliated debtors. (http://bankrupt.com/newsstand/ or 215/945-7000) INTERSTATE BAKERIES: March 4 Hearing on Bid to Amend Schedules -------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Missouri will convene a hearing on March 4, 2009, to consider U.S. Bank National Association's request to compel Interstate Bakeries Corp. and its affiliates to amend their schedules of assets and liabilities. U.S. Bank told the Court that the Debtors failed to separately identify in their Schedules filed in November 2004, the assets and liabilities of each bankruptcy estate. The Bank added that the Debtors each filed Schedules that aggregate substantially all of their assets and liabilities, in violation of Section 521(b) of the Bankruptcy Code. U.S. Bank is the indenture trustee for the holders of the 6% Senior Subordinated Notes due August 15, 2014, issued by Interstate Bakeries Corporation and guaranteed by each of the other Debtors, in the principal amount of $100,000,000. The Debtors have amended and supplemented their Schedules from time to time, but have indicated each time that each Schedule is submitted collectively on behalf of Interstate Bakeries Corp. and all of the Debtor Subsidiaries, Clark T. Whitmore, Esq., at Maslon Edelman Borman & Brand, LLP, in Minneapolis, Minnesota, told the Court. The Debtors' failure to accurately set forth the assets and liabilities of each Debtor's separate bankruptcy estate represents an inappropriate impediment to the Indenture Trustee's ability to evaluate its claims on behalf of the Noteholders vis- a-vis other general unsecured claims owed solely by Interstate Brands Corp. or another one of the Debtor Subsidiaries singly, Mr. Whitmore said. Other creditors are likewise prevented by the combined Schedules from assessing their relative position in the cases and thus unable to evaluate the propriety of their treatment under any proposed plan of reorganization, Mr. Whitmore said. U.S. Bank has repeatedly requested information from the Debtors that should have been set forth in the original Schedules, and or an amendment to the original Schedules, Mr. Whitmore said. While the Debtors have provided certain selective information on a confidential basis, they have yet to provide all of the information that they are required to set forth in their Schedules to all creditors, Mr. Whitmore said. In January 2005, the Debtors won Court approval to execute documentation relating to their prepetition corporate reorganization. As part of the Corporate Reorganization, Interstate Bakeries transferred to IBC Services Corp. three real properties and all related personal property and contracts; and to Interstate Brands Corp. (i) all real property, tangible personal property and accounts receivable related to manufacturing, wholesale and retail sales and distribution operations; (ii) all contracts and other agreements in the name of Brands West; and (iii) all stock in Mrs. C's. Interstate Brands transferred to IBC Sales Corporation (i) all real property, personal property, accounts receivable, and contracts or other agreements related to wholesale and retail sales and distribution operations; (ii) stock in Mrs. C's; and (iii) stock in IBC Trucking Corporation. By way of the reorganization transaction: (i) the assets of Interstate Bakeries consist of all of the Debtors' interests in intellectual property and the headquarters facility in Kansas City, Missouri; (ii) the assets of Interstate Brands include all of the real property, tangible personal property, accounts receivable, and contracts or other agreements related to manufacturing and plant operations as well as employment and related contracts like the union labor contracts and employee benefits agreements; (iii) the assets of IBC Sales include all property related to wholesale and retail sales, with the exception of trucks; and (iv) the assets of IBC Services Corp. include three real properties and all related personal property and contracts. Although the Debtors represented to the Court in the Corporate Reorganization Motion that the execution of the Remaining Reorganization Documents was related to "the appropriate allocation of certain assets and liabilities among the Debtors," the Debtors have not yet amended their Schedules after the execution of the Remaining Reorganization Documents to reflect the proper allocation of assets among Interstate Bakeries or the Debtor Subsidiaries, Mr. Whitmore said. About Interstate Bakeries Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh-baked bread and sweet goods, under various national brand names, including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and Drake's(R). Currently, IBC employs more than 25,000 people and operates 45 bakeries, as well as approximately 800 distribution centers and approximately 800 bakery outlets throughout the country. The company and eight of its subsidiaries and affiliates filed for chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6% senior subordinated convertible notes due Aug. 15, 2014) in total debts. The Debtors first filed their Chapter 11 Plan and Disclosure Statement on Nov. 5, 2007. On Jan. 30, 2008, the Debtors received court approval of the disclosure statement explaining their first amended plan. IBC did not receive any qualifying alternative proposals for funding its plan in accordance with the court- approved alternative proposal procedures. The Debtors, on Oct. 4, 2008, filed another Plan, which contemplates IBC's emergence from Chapter 11 as a stand-alone company. The filing of the Plan was made in connection with the plan funding commitments, on Sept. 12, 2008, from an affiliate of Ripplewood Holdings L.L.C. and from Silver Point Finance, LLC, and Monarch Master Funding Ltd. On December 5, 2008, the Bankruptcy Court confirmed IBC's Amended New Joint Plan of Reorganization. The plan was filed October 31, 2008. The exit financings that form the basis for the Plan are reflected in corresponding debt and equity commitments. Bankruptcy Creditors' Service, Inc., publishes Interstate Bakeries Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by Interstate Bakeries Corporation and its eight affiliated debtors. (http://bankrupt.com/newsstand/ or 215/945-7000) INTERSTATE BAKERIES: Settles $11,100,000 in EPA Claims ------------------------------------------------------ In March 2005, the United States government, on behalf of the Environmental Protection Agency, filed Claim No. 7721 for $11,100,000, against Interstate Brands Corporation, asserting (i) unreimbursed environmental response costs incurred by the United States at the Hows Comer Superfund Site located in Plymouth, Maine, and (ii) response costs to be incurred in the future by the United States at the Site, pursuant to the Comprehensive Environmental Response, Compensation and Liability. To resolve the Claim, the Debtors and EPA entered into a stipulation under which Claim No. 7721 will be allowed for $84,020 as a general unsecured nonpriority claim, in accordance with the terms of any plan of reorganization that is confirmed and becomes effective in the Debtors' cases. Distributions with respect to the Claim will either be: (a) deposited in site-specific special accounts within the EPA Hazardous Substance Superfund to be retained and used to conduct or finance response actions at or in connection with the particular site for which a claim has been allowed, or be transferred by EPA to the EPA Hazardous Substance Superfund; or (b) deposited into the EPA Hazardous Substance Superfund. Payment on the EPA Claim will be made by Electronic Funds Transfer to the U.S. Department of Justice lockbox bank, in accordance with instructions provided by the United States to the Debtors after execution of the Settlement Agreement. Any EFTs received at the U.S. D.O.J. Lockbox Bank after 11:00 A.M., Eastern Time, will be credited on the next day. Only the amount of cash received by EPA -- or the net cash received by EPA on account of any non-cash distributions -- from the Debtors under the Settlement Agreement for EPA's Allowed Claim, and not the total amount of the Allowed Claim, will be credited by EPA to its account for the Site. Only the amount of the credit will reduce the liability of non-settling potentially responsible parties to EPA for the Site. The "matters addressed" in the Stipulation include: -- all response actions taken or to be taken and all response costs incurred or to be incurred, at or in connection with the Site, by the United States or any other person, other than claims, if any, by the state of Maine; and -- damages for injury to, destruction of, or loss of natural resources, including the reasonable cost of assessing the damages. The United States will be deemed to have withdrawn the EPA Claim. Furthermore, it covenants not to bring a civil action or take administrative action against the Debtors, conditioned upon the Debtors' complete and satisfactory performance of their obligations under the Stipulation. Similarly, the Debtors covenant not to sue, and agree not to assert any claims or causes of action against, the United States with respect to the Site, including, but not limited to, any direct or indirect claim for reimbursement from the Hazardous Substance Superfund, any claims against the United States, and any claims arising out or response activities at the Site. The Stipulation is without prejudice to the United States' rights to assert claims (i) against the Debtors based on their failure to meet a requirement of the Settlement Agreement, and (ii) for any site other than in Plymouth. In addition, the United States reserves the right to withdraw or withhold its consent if the public comments regarding the Stipulation disclose facts or considerations which indicate that the Stipulation is inappropriate, or improper, or inadequate. Representing the Debtors, Paul M. Hoffmann, Esq., at Stinson Morrison Hecker LLP, in Kansas City, Missouri, notes that the Stipulation must be lodged with the U.S. Bankruptcy Court for the Western District of Missouri for at least 30 days in order to provide an opportunity for public comment. Specifically, the notice of the Lodging of the Stipulation will be published in the Federal Register and the U.S. Department of Justice and will receive comments for a period of 30 days. If the United States continues to consent to this decree after the close of the Comment Period, the Debtors seek the Court's final approval of the Stipulation, which will resolve the United States' Claim against Debtors regarding the Site, Mr. Hoffman says. Judge Venters will convene a hearing to consider approval of the Stipulation on March 4, 2009. About Interstate Bakeries Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh-baked bread and sweet goods, under various national brand names, including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and Drake's(R). Currently, IBC employs more than 25,000 people and operates 45 bakeries, as well as approximately 800 distribution centers and approximately 800 bakery outlets throughout the country. The company and eight of its subsidiaries and affiliates filed for chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6% senior subordinated convertible notes due Aug. 15, 2014) in total debts. The Debtors first filed their Chapter 11 Plan and Disclosure Statement on Nov. 5, 2007. On Jan. 30, 2008, the Debtors received court approval of the disclosure statement explaining their first amended plan. IBC did not receive any qualifying alternative proposals for funding its plan in accordance with the court- approved alternative proposal procedures. The Debtors, on Oct. 4, 2008, filed another Plan, which contemplates IBC's emergence from Chapter 11 as a stand-alone company. The filing of the Plan was made in connection with the plan funding commitments, on Sept. 12, 2008, from an affiliate of Ripplewood Holdings L.L.C. and from Silver Point Finance, LLC, and Monarch Master Funding Ltd. On December 5, 2008, the Bankruptcy Court confirmed IBC's Amended New Joint Plan of Reorganization. The plan was filed October 31, 2008. The exit financings that form the basis for the Plan are reflected in corresponding debt and equity commitments. Bankruptcy Creditors' Service, Inc., publishes Interstate Bakeries Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by Interstate Bakeries Corporation and its eight affiliated debtors. (http://bankrupt.com/newsstand/ or 215/945-7000) JACKSON HOSPITALITY: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Jackson Hospitality, LLC 1525 Ellis Ave. Jackson, MS 39204 Bankruptcy Case No.: 09-00204 Chapter 11 Petition Date: January 23, 2009 Court: United States Bankruptcy Court Southern District of Mississippi (Jackson) Debtor's Counsel: Stephen Fernand Babin, Esq. Stephen F. Babin 400 Poydras St., Suite 1600 New Orleans, LA 70130 Tel: (504) 599-1200 Fax: (504) 599-1212 Email: babins@ag.state.la.us Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of 20 largest unsecured creditors together with its petition. JERRY DONALDSON: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Jerry J. Donaldson 700 Weybridge Circle Severna Park, MD 21146 Bankruptcy Case No.: 09-11126 Debtor-affiliates filing separate Chapter 11 petition: Entity Case No. ------ -------- Evelyn Donaldson 08-13270 Chapter 11 Petition Date: January 23, 2009 Court: United States Bankruptcy Court District of Maryland (Baltimore) Judge: Nancy V. Alquist Debtor's Counsel: Richard B. Rosenblatt, Esq. The Law Offices of Richard B. Rosenblatt 30 Courthouse Square Ste. 302 Rockville, MD 20850 Tel: (301) 838-0098 Email: rrosenblatt@rosenblattlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mdb09-11126.pdf The petition was signed by Jerry J. Donaldson. JOURNAL REGISTER: Newspapers Hit By Revenue Declines, Recession --------------------------------------------------------------- Robert W. Decherd, president and chairman of A.H. Belo Corp., which publishes The Dallas Morning News, said in a Jan. 30 letter that the rapid deterioration in the U.S. economy has changed the nature and urgency of re-thinking the company's business model -- "just as every newspaper publisher and companies in virtually every American industry are compelled to do." The past two months saw the demise of two major players in the industry. Tribune Co., which own leading papers, including the Los Angeles Times and Chicago Tribune, etc., having collective paid circulation totaling 2.2 million copies daily and 3.3 million copies on Sundays, filed for bankruptcy on Dec. 8, 2008. While Tribune had a wide portfolio, which included television and radio broadcasting, the Internet, and other entertainment offering, including the Chicago Cubs baseball team, it blamed its bankruptcy filing on the unprecedented decline in the newspaper publishing industry, which decline exacerbated by the current recession. The Star Tribune newspaper, which has the highest daily circulation in the state of Minnesota, and 15th largest daily newspaper in the United States, sought bankruptcy protection on Jan. 15 due to its worsening financial conditions and its heavy debt burden. "The domestic newspaper industry has been crippled by an unprecedented and severe decline in advertising revenue," said The Star Tribune Company CFO David W. Montgomery, in a document explaining Star Tribune's bankruptcy filing. "While this decline has been occurring for several years, the decline has been accelerated and exacerbated by the recession and the dislocation of the credit markets." Aside from Star Tribune and Tribune Co., other newspaper owners have been hit by the decline in advertisement revenues although they have been able to avert bankruptcy filing, so far. Advertising, Circulation Down Comparing figures provided by the Audit Bureau of Circulations for six-month periods ending Sept. 30, 2008, and March 31, 2008, daily circulation for the top 30 newspapers in the U.S. are down 5.27%: Daily Circulation For Six Months Ended -------------------- 09/30/08 03/31/08 % Change -------- -------- -------- 1 USA Today 2,293,310 2,284,219 0.40% 2 The Wall Street Journal 2,011,999 2,069,463 -2.78% 3 The New York Times 1,000,665 1,077,256 -7.11% 4 Los Angeles Times 739,147 773,884 -4.49% 5 Daily News - New York, NY 632,595 703,137 -10.03% 6 New York Post 625,421 702,488 -10.97% 7 Washington Post 622,714 673,180 -7.50% 8 Chicago Tribune 516,032 541,663 -4.73% 9 Houston Chronicle 448,271 494,131 -9.28% 10 The Arizona Republic - Phoenix 413,332 413,332 0.00% 11 Newsday - Melville, NY 377,517 379,613 -0.55% 12 San Francisco Chronicle 339,430 370,345 -8.35% 13 Dallas Morning News 338,933 368,313 -7.98% 14 The Boston Globe 323,983 350,605 -7.59% 15 Star Tribune - Minneapolis, MN 322,360 345,130 -6.60% 16 The Star-Ledger - Newark, NJ 316,280 334,150 -5.35% 17 The Chicago Sun-Times 313,176 330,280 -5.18% 18 The Plain Dealer - Cleveland, OH 305,529 326,907 -6.54% 19 The Philadelphia Inquirer 300,674 322,362 -6.73% 20 Detroit Free Press 298,243 316,007 -5.62% 21 The Oregonian - Portland, OR 283,321 312,274 -9.27% 22 The Atlanta Journal-Constitution 274,999 308,944 -10.99% 23 The San Diego Union-Tribune 269,819 304,399 -11.36% 24 St. Petersburg Times 268,935 288,669 -6.84% 25 The Sacramento Bee 253,249 268,755 -5.77% 26 The Indianapolis Star 244,796 255,303 -4.12% 27 St. Louis Post-Dispatch 240,796 255,057 -5.59% 28 The Kansas City Star 239,358 252,785 -5.31% 29 The Orange County (CA) Register 236,270 250,724 -5.76% 30 The Mercury News - San Jose, CA 224,199 240,223 -6.67% -------- -------- ------ 15,075,353 15,913,598 -5.27% Mr. Montgomery, Star Tribune's CEO, said that with respect to the newspaper industry, print classified advertising dropped by more than 25% in the first half of 2008 alone, representing a $1.8 billion loss in revenue for domestic newspapers. The industry, he added, has suffered historic declines in circulation, which have not only resulted in decreased circulation revenue, but have also acted as a further catalyst for declines in advertising revenue. He noted that much of a newspaper's more profitable print advertising sales are tied to circulation, which advertisers use as a proxy for readership. As circulation has declined, newspapers have been compelled to charge less for these ads. Chandler Bigelow III, Tribune's senior vice president and chief financial officer, said that while the company's newspaper advertising revenue continues to be in line with other large metropolitan newspapers, newspaper advertising revenue generally is in significant decline, down industry-wide 15% to 20% in 2007 in major metropolitan markets, and down industry-wide nearly $2 billion, or 18%, in the third quarter of 2008. Gannett Co., Inc., which owns the U.S.'s most read newspaper, USA Today, and 84 other newspapers, said its publishing segment operating revenues were $1.4 billion for the quarter of 2008, compared with $1.7 billion in the fourth quarter of 2007, an 18.6% decline. Advertising revenues were $963.4 million compared with $1.2 billion in the fourth quarter of 2007. At USA TODAY, advertising revenues were 18.5% lower in the fourth quarter compared to the fourth quarter in 2007. Gannett said that its results were reflective of "unprecedented turmoil in the economies of both the U.S. and the UK and in the financial market", although the results of its broadcasting and digital segments were largely unchanged. New York Times Co. disclosed that in the fourth quarter of 2008 total revenues decreased 10.8% to $772.1 million, as advertising revenues decreased 17.6%. The New York Times publisher said revenues decreased mainly due to lower print advertising. "The disruptions of the global economy are affecting all businesses and industries, especially companies, such as ours, that generate a significant portion of their revenues from advertising," said Janet L. Robinson, NYT president and CEO. Cablevision Systems Corporation, which bought Newsday from Tribune Co. in July 2008, has yet to reveal its fourth quarter results on Feb. 23. It recorded $73,468,000 in revenues from its newspaper publishing group in three months ended Sept. 30, 2008. Other firms are scheduled to release their fourth quarter results on these dates: Company Earnings Release Date ------- -------------------- News Corporation 02/05/09 Washington Post Co. 02/25/09 Cablevision 02/23/09 A.H. Belo Corp. 02/17/09 Sun-Times Media Group 03/09/09 The McClatchy Company 02/05/09 Journal Register Co. 02/02/09 Gatehouse Media Inc. 03/09/09 American Media Inc. __/__/09 Firms that are privately held, like Hearst Corporation, owner of the San Francisco Chronicle, do not publicly disclose their financial results. Rising Internet Traffic Cutting Print Revenues Various reports say that newspaper revenues have been decreasing, as readers have shifted to the Web. According to Bloomberg, rising Internet use have hurt magazines and newspapers. While overall revenues fell, New York Times' Internet businesses, which include NYTimes.com, About.com, Boston.com and other company Web sites, increased 6.5% to $351.7 million in 2008 from $330.2 million in 2007, and Internet advertising revenues increased 9.3% to $308.8 million from $282.5 million. In total, Internet businesses accounted for 12.0% of the company's revenues in the fourth quarter versus 11.0% in the 2007 fourth quarter. Lee Enterprises Incorporated (NYSE: LEE), which runs 49 daily newspapers, including the St. Louis Post-Dispatch, said that Circulation revenues dropped 4.5% to $47.56 million. Combined print and online advertising revenue dropped 15.2% to $184.6 million, with retail advertising down 9.8%, and classified down 27.1%. More Writedowns While the Washington Post Co. (NYSE:WPO) has yet to reveal its quarterly results, it announced on Jan. 15 a regular quarterly dividend of $2.15 per share, payable on Feb. 6, 2009. On Jan. 23, Washington Post said it would take a $70 million impairment charge after concluding that the estimated fair value of its online lead generation business is less than its reported carrying value. Reuters notes that the Post is one of several U.S. newspaper publishers that have written down the value of their properties as advertising revenue shrinks. According to Reuters, The New York Times, Lee Enterprises (LEE.N) and McClatchy Co. (MNI.N) and other publishers have written down billions of dollars in the past several years. In fiscal 2008, Lee Enterprises recorded after-tax non-cash charges totaling $893.7 million to reduce the carrying value of goodwill, other assets and the company's investment in TNI Partners. On Jan. 28, American Media Operations, Inc., operating subsidiary of American Media Inc., leading publisher of celebrity journalism and health and fitness magazines in the U.S., said it is in the process of performing impairment testing of its tradenames and goodwill. AMOI expects to record impairment charges for its titles of between $200 million and $220 million with respect to certain of its tradenames and goodwill. Heavy Debt Burden, Liquidity Problems Aside from declining revenues, some of the newspaper publishers were highly leveraged, limiting their flexibility and ability to address liquidity constraints. At that time of its bankruptcy filing Tribune Co. owed $13 billion in total funded debt. Starting June 30, 2008, Star Tribune stopped making payments scheduled quarterly interest, which reached $20 million as of its bankruptcy petition in January 2009. While Star Tribune had $26.9 million in cash as of Dec. 31, 2008, its liabilities reached $661.1 million, including $392.5 million owed on its first lien debt and $96 million owed on its second loan debt, paling in comparison to assets of only $493.2 million. Lee Enterprises also is trying to renegotiate $306 million in debt that it assumed when it bought Pulitzer Inc. in 2005. Of that, $142.5 million is due in April and Lee's auditors have said Lee can't afford to pay it, the St. Louis Post-Dispatch said. GateHouse Media, Inc., which has 92 daily newspapers with total paid circulation of approximately 834,000, announced Jan. 28 that it is seeking to amend its $1.2 billion senior secured credit facility. The amendment would, among other things, allow the company to repurchase outstanding term loans under the facility at prices below par through a modified Dutch auction through December 31, 2011. The company is seeking the consent of the requisite lenders by 5:00 pm (Eastern Time) Monday, February 2, 2009, in order to effect the amendment American Media, publisher of celebrity journalism and health and fitness magazines including Star, Shape and the National Enquirer, made tender offers for $570 million of its outstanding senior subordinated notes, which comprise (i) $400,000,000 principal amount of 10.25% Series B Senior Subordinated Notes due 2009 and $14,544,000 aggregate principal amount of 10.25% Series B Senior Subordinated Notes due 2009, and (ii) $150,000,000 aggregate principal amount of 8 7/8% Senior Subordinated Notes due 2011 and $5,454,000 aggregate principal amount of 8 7/8% Senior Subordinated Notes due 2011. American Media, through its AMOI subsidiary will exchange those Notes with (a) $21,245,380 principal amount of 9% senior PIK notes due 2013, (b) $300,000,000 principal amount of the company's 14% senior subordinated notes due 2013, and (c) 5,700,000 shares of Media's common stock, representing 95% of American Media's outstanding shares of common stock. The offer expired Jan. 29. As of Jan. 9, AMOI has entered into agreements with holders of 81% of the outstanding aggregate principal amount of the 2009 Notes and 69% of the outstanding aggregate principal amount of the 2011 Notes. The tender offer conditioned upon, among other things, receipt of tenders and related consents by holders of at least 98% of each series of the Existing Notes. Pursuant to forbearance agreements, holders of the Existing Notes have agreed to forbear until 5:00 p.m., New York City time, on February 4, 2009, from exercising any remedies under the indentures governing the Existing Notes as a result of AMOI's. Sun-Times Media Group, Inc. (Pink Sheets: SUTM), which owns the Chicago Sun-Times, informed investors on Jan. 29 that an arbitrator has awarded CanWest Global Communications Corp., a Canadian media company, CN$51 million, exclusive of interest and costs, in connection with a dispute relating to CanWest's purchase of newspaper assets from Sun-Times Media in 2000. On Dec. 19, 2003, CanWest pursued arbitration, in connection with its claim that Sun-Times owed CN$84.0 million related to the transaction. As of Sept. 30, 2008, the company had a reserve established in respect of the arbitration in the amount of CN$15 million. A previously established escrow account funded by the company containing approximately CN$22 million may be available to pay any final arbitration award. The Chicago Tribune noted that as of Sept. 30, Sun-Times Media had cash of $99.8 million, but the company faces a number of tax and other liabilities. After a big write-down of intangible assets during the third quarter, Sun- Times' negative worth, or negative shareholder equity, widened to $321.7 million, the Chicago Tribune said. In Jan. 28, Washington Post said it's selling $400 million in fixed-rate notes at a price of 99.614% of par for an effective yield of 7.305% per annum. The ten-year notes will have a coupon of 7.25% per annum, payable semi-annually on February 1 and August 1, beginning August 1, 2009. The company intends to use the net proceeds from the sale of the notes to repay $400 million of notes that mature on February 15, 2009. Sale of Assets, Job Cuts to Stem Losses A.H. Belo's Mr. Decherd said in his Jan. 30 letter to employees that the decline in advertising revenues for the newspaper industry and all media persists, and that the key for the company is to generate and preserve cash. He stated that the company needs to reduce its workforce as the revenue trends do not support or require the same number of people the company has employed. The reduction will "probably be in the range of 500 jobs." He added that the company would suspend the A. H. Belo Savings Plan match and will cut reimbursements policies to employees. "Similarly, it is no longer reasonable for the Company to provide free parking in downtown Dallas," he said. A monthly charge of $40 will take effect May 1, 2009 for all downtown Dallas surface lots owned by the company. On Jan. 9, Hearst Corp. announced that it is offering for sale the Seattle Post-Intelligencer and its interest in a joint operating agreement under which the P-I and The Seattle Times are published. Hearst said that should a sale not occur within 60 days, it will pursue options, "including a move to a digital-only operation with a greatly reduced staff or a complete shutdown of all operations." "In no case will Hearst continue to publish the P-I in printed form following the conclusion of this process." The P-I, which Hearst has owned since 1921, has had operating losses since 2000. The P-I lost approximately $14 million in 2008 and its forecast anticipates a greater loss in 2009. Hearst also denied speculations it is interested in acquiring The Seattle Times. On Jan. 28, 2009, The New York Times Co., which also owns the International Herald Tribune and The Boston Globe, announced that it has retained Goldman, Sachs & Co. as its financial advisor to explore the possible sale of its 17.75% ownership interest in New England Sports Ventures, LLC. NESV owns the Boston Red Sox, Fenway Park and adjacent real estate, approximately 80 percent of New England Sports Network, the top rated regional cable sports network in the country delivered to more than four million homes throughout New England and nationally via satellite, and 50 percent of Roush Fenway Racing, a leading NASCAR team. Tribune Co., which is in the U.S. Bankruptcy Court for the District of Delaware to delever its balance sheet, is arranging the sale of its Chicago Cubs baseball team. Times Publishing Co., which publishes the St. Petersburg Times, one of the most respected regional newspapers in the U.S., is exploring the sale of Congressional Quarterly, Inc. Based in Washington, D.C., Congressional Quarterly publishes news and information on politics, public policy and legislative activity at the federal, state and local levels. The McClatchy Company, which has 30 daily newspapers, including The Miami Herald, The Sacramento Bee, and the Fort Worth Star- Telegram, said that it will suspend its quarterly dividend after paying the first quarter 2009 dividend for the foreseeable future in order to preserve cash for debt repayment. The first quarter 2009 dividend of nine cents per share is half the per share dividend paid in the 2008 first quarter. On Jan. 30, Editor & Publisher reported that the Journal Register Co. announced the sale of The Hershey (Pa.) Chronicle to The Sun in Hummelstown, Pa. On Jan. 7, Journal Register said it has signed an agreement with Central Connecticut Communications regarding a sale of The Bristol Press, The Herald of New Britain and The Sunday Herald Press from Journal Register Company. The sale includes the assets of the papers' web sites and of three nearby weeklies, the Wethersfield Post, the Newington Town Crier and the Rocky Hill Post. As of November 2008, JRC owned 22 daily newspapers and approximately 300 non-daily publications. Some Newspapers to Reach End According to a blog by Douglas A. McIntyre posted Jan. 11 at 24/7 Wall St., twelve major media brands are likely to close in 2009, as Journal Register and Gatehouse, and McClatchy have struggled. It noted that The Seattle Post-Intelligencer, Denver's Rocky Mountain News, The Miami Herald and the San Francisco Chronicle are on the block, and may be shut if no buyers emerge. The New York Daily News and The New York Observer are also at risk, according to the report. The United Press International Inc. reported Jan. 9 that Sun- Times Media said it would close 12 weekly newspapers to cut expenses as advertising revenues have fallen. The 12 suburban newspapers scheduled to close are part of 51 newspapers published by Pioneer Press, which the Sun-Times purchased in 1989. The newspapers, scheduled to fold Jan. 15, cover mostly the northwest suburbs of Chicago, Crain's Chicago Business reported Friday. According to CT Business Journal, Journal Register closed 16 newspapers in Connecticut in December. The papers affected include the Branford Review, Clinton Recorder, Hamden Chronicle, Milford Weekly, North Haven Post, Shelton Weekly, Stratford Bard, West Haven News, Wallingford Voice, East Haven Advertiser and others. Hanging In the Balance While Tribune Co., and Star Tribune have filed for bankruptcy, other newspaper publishers' fate are hanging in the balance. American Media's revolving facility, of which $60 million is outstanding and the term loan facility, of which $439.6 million is owed, both will mature on February 1, 2009 if the company has more than $25.0 million of the 10.25% Series B Senior Subordinated Notes due May 1, 2009 outstanding on February 1, 2009. According to Crain's New York, John Page, senior analyst at Moody's, said it was unclear what the banks would do with the company if an agreement couldn't be reached with bondholders. "It's a difficult environment to be selling assets," he said. In its form 10-Q for the third quarter of 2008, American Media Operations said if it is unable to extend or refinance the Notes, the 2006 Credit Agreement will likely mature early and the Company will not have sufficient funds to repay such indebtedness. "In such event, the Company may have to liquidate assets on unfavorable terms, or be unable to continue as a going concern, and incur additional costs associated with bankruptcy." Lee Enterprises' waiver of covenant conditions related to the $306 million Pulitzer Notes debt of its subsidiary St. Louis Post- Dispatch LLC expire Feb. 6, 2009. The Pulitzer Notes mature in April 2009. Lee says discussions with lenders continue. The struggles of the newspaper industry have also resulted to pulp- and paper-related bankruptcies. Paperboard and paper-based packaging Smurfit-Stone Corp., filed for Chapter 11 on Jan. 26, and Corp. Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Magazine printer, Quebecor World Inc., and pulp mill operator Pope & Talbot Inc., have also sought bankruptcy protection in Canada and the U.S. About Journal Register Headquartered in Yardley, Pennsylvania, Journal Register Company (PINKSHEETS:JRCO) -- http://www.journalregister.com-- owns and operates 27 daily newspapers and 368 non-daily publications as of Dec. 31, 2006. The company also operates 239 individual websites that are affiliated with the company's daily newspapers, non-daily publications and its network of employment websites. All of the company's operations are clustered in seven geographic areas: Greater Philadelphia, Michigan, Connecticut, Greater Cleveland, New England, and the Capital-Saratoga and Mid-Hudson regions of New York. The company owns JobsInTheUS, a network of 19 employment websites and three commercial printing operations. The company's total paid circulation is approximately 616,000 daily, 635,000 Sunday and its total non-daily distribution is approximately 6.4 million. * * * As reported by the Troubled Company Reporter on Aug 5, 2008, Standard & Poor's Ratings Services withdrew its ratings on Journal Register Co., including the 'D' corporate credit rating. S&P lowered the ratings on July 25, 2008, after the company announced that it had entered into a forbearance agreement with lenders, which included a provision whereby interest under the credit agreement will accrue and will not be paid for the period July 24, 2008 through Oct. 31, 2008. S&P viewed this event as a meaningful departure from the original terms of the credit agreement, resulting in a 'D' corporate credit and issue-level ratings under its criteria. As reported by the TCR on Aug. 4, 2008, Moody's Investors Service downgraded Journal Register company's Probability of Default rating to D from Caa3 and its Corporate Family rating to Ca from Caa2. The rating outlook is stable. Moody's plans to withdraw all of Journal Register's ratings shortly. KATHY COX: Creditors Eye $1MM Prize Money for 3 Public Schools -------------------------------------------------------------- Ben Smith at The Atlanta Journal-Constitution reports that a lawyer representing Kathy Cox's creditors confirmed that his clients are considering making a claim on the $1 million game show prize that Georgia schools Superintendent Kathy Cox won from "Are You Smarter than a 5th Grader?" for charity. According to The Atlanta Journal, Karen White, Ms. Cox's attorney, said that the bankruptcy trustee representing creditors has asked for records concerning the prize money. "Whether he will ultimately assert that the state has a superior legal right to that of the [school fund's] legal right, I don't know," the report quoted Ms. White as saying. The Atlanta Journal relates that Fidelity Investments, the investment firm hired to create an account for distributing the money to three public schools for blind and deaf students, has returned the $1 million game show prize that Georgia schools Superintendent Kathy Cox won for charity. Fidelity Investments didn't want to become involved in the bankruptcy case The Atlanta Journal says, citing Ms. White. Ms. Cox, according to the report, said that the money was returned to Fox Broadcasting Co. in December 2008. It isn't clear when, or if, the schools will get the $1 million Ms. Cox won in August 2008, The Atlanta Journal relates, citing Ms. White. Ms. Cox said in a statement that she still wants the money to benefit the Georgia Academy for: -- the Blind in Macon; -- the Georgia School for the Deaf in Cave Spring; and -- the Atlanta Area School for the Deaf in Clarkston. The Atlanta Journal quoted Ms. Cox as saying, "It's sad that banks and lawyers are standing in the way of making that happen. I'm hopeful that this money will still end up where it belongs." About Kathy Cox Kathy Cox is a former Fayette County teacher and legislator now in her second term as schools chief. She oversees a state system of 1.7 million students and an education budget of $9.5 billion, most of which it passes to local systems. As reported by the Troubled Company Reporter on Nov. 26, 2008, Ms. Cox and her husband John have filed for Chapter 7 bankruptcy. Ms. Cox listed above $3.5 million in liabilities and less than $650,000 in assets. Most of the debt comes from Mr. Cox's Pebble Hill Homes, a business he started in Fayetteville in 2001. Ms. Cox, who makes about $125,000 a year, has no role in Pebble Hill but is a co-signer on loans for it. Almost $2.9 million of the $3.5 million in debts are unsecured. KELLY-RASCH: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Kelley-Rasch Enterprises, LLC 2256 Wickerwood Cove Memphis, TN 38119 Bankruptcy Case No.: 09-20720 Chapter 11 Petition Date: January 22, 2009 Court: United States Bankruptcy Court Western District of Tennessee (Memphis) Judge: Jennie D. Latta Debtor's Counsel: Russell W. Savory, Esq. 88 Union Avenue, 14th Floor Memphis, TN 38103 Tel: (901) 523-1110 Email: russell.savory@gwsblaw.com Total Assets: $1,673,853 Total Debts: $2,409,595 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/tnwb09-20720.pdf The petition was signed by Catherine K. Rasch, Managing Memberof the company. KESCO DYNAMICS: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Kesco Dynamics, Inc. 80 Monroe Crossing Cartersville, GA 30120 Bankruptcy Case No.: 09-40236 Debtor-affiliate filing separate chapter 11 petition: Affiliate Case Number --------- ----------- Kesco Southeast, Inc. 09-40237 Chapter 11 Petition Date: January 21, 2009 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Judge: Mary Grace Diehl Debtor's Counsel: David G. Bisbee, Esq. Law Office of David G. Bisbee 2929 Tall Pines Way Atlanta, GA 30345 Tel: (770) 939-4881 Fax: (770) 783-8595 Email: bisbeed@bellsouth.net Total Assets: $4,157,500 Total Debts: $5,224,307 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ganb09-40236.pdf The petition was signed by Tammy Conn, the company's president. KESCO DYNAMICS: Sec. 341 Meeting on March 5 in Atlanta ------------------------------------------------------ The United States Trustee in Atlanta, Georgia, will covene a meeting of creditors in the bankruptcy cases of Kesco Dynamics, Inc., and Kesco Southeast, Inc., on March 5, 2009, at 3:00 p.m. at Hearing Room 365 in Atlanta. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtors' bankruptcy cases. Attendance by the Debtors' creditors at the meeting is welcome, but not required. The Sec. 341(a) meeting offers the creditors a one-time opportunity to examine the Debtors' representative under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. Based in Cartersville, Georgia, Kesco Dynamics, Inc. and Kesco Southeast, Inc., filed for Chapter 11 protection on January 21, 2009 (Bankr. N.D. Ga. Lead Case No. 09-40236). The Hon. Mary Grace Diehl presides over the case. David G. Bisbee, Esq., in Atlanta, represents the Debtors as counsel. Kesco Dynamics disclosed $4,157,500 in total assets and $5,224,307 in total debts when it filed for bankruptcy. LANDRY'S RESTAURANTS: S&P Retains Negative Watch on Low-B Ratings ----------------------------------------------------------------- Standard & Poor's Ratings Services announced that its ratings on Houston-based Landry's Restaurants Inc. will remain on CreditWatch with negative implications, where they were placed on Jan. 28, 2008. At the same time, S&P lowered the ratings on the company's unrestricted subsidiary, Las Vegas-based Golden Nugget Inc. S&P lowered the corporate credit rating on Golden Nugget to 'B-' from 'B', and its ratings also remain on CreditWatch with negative implications. Additionally, S&P lowered the issue-level ratings on Golden Nugget's first-lien credit facility to 'B-' from 'BB-'. S&P also revised the recovery rating on these loans to '3' from '1'. The '3' recovery rating indicates S&P's expectation of meaningful (50%-70%) recovery for lenders in the event of a payment default. In addition, S&P lowered the issue-level rating on Golden Nugget's $165 million second-lien term loan to 'CCC' from 'B-'. S&P revised the recovery rating on these loans to '6' from '5'. The '6' recovery rating indicates S&P's expectation of negligible (0%- 10%) recovery for lenders in the event of a payment default. Upon the closure of Landry's pending recapitalization transactions, S&P expects to take these ratings actions: Affirm Landry's 'B' corporate credit rating with a stable outlook. Assign a '1' recovery to Landry's amended and restated $210 million senior secured facility consisting of a $160 million term loan and a $50 million revolving credit facility. The '1' recovery rating indicates S&P's expectation of very high (90%- 100%) recovery of principle in the event of default and also dictates an issue-level rating of 'BB-', two notches above the corporate credit rating on the company. Assign a '3' recovery rating to Landry's new $270 million senior secured notes. The '3' recovery rating indicates S&P's expectation of meaningful (50%-70%) recovery of principle in the event of default and also dictates an issue-level rating of 'B', the same as the corporate credit rating.Affirm Golden Nugget's ratings, including the 'B-' corporate credit rating, with a negative outlook. The proceeds of Landry's new debt will be used to refinance its current debt. "The downgrade of Golden Nugget stems from our concerns about the company's increased leverage during a weak operating environment," said Standard & Poor's credit analyst Charles Pinson-Rose, "and about its ability to remain in compliance with its covenants (absent financial support from its parent, Landry's) in 2009 and 2010." LANDRY'S RESTAURANTS: S&P Retains Negative Watch on Low-B Ratings ----------------------------------------------------------------- Standard & Poor's Ratings Services announced that its ratings on Houston-based Landry's Restaurants Inc. will remain on CreditWatch with negative implications, where they were placed on Jan. 28, 2008. At the same time, S&P lowered the ratings on the company's unrestricted subsidiary, Las Vegas-based Golden Nugget Inc. S&P lowered the corporate credit rating on Golden Nugget to 'B-' from 'B', and its ratings also remain on CreditWatch with negative implications. Additionally, S&P lowered the issue-level ratings on Golden Nugget's first-lien credit facility to 'B-' from 'BB-'. S&P also revised the recovery rating on these loans to '3' from '1'. The '3' recovery rating indicates S&P's expectation of meaningful (50%-70%) recovery for lenders in the event of a payment default. In addition, S&P lowered the issue-level rating on Golden Nugget's $165 million second-lien term loan to 'CCC' from 'B-'. S&P revised the recovery rating on these loans to '6' from '5'. The '6' recovery rating indicates S&P's expectation of negligible (0%- 10%) recovery for lenders in the event of a payment default. Upon the closure of Landry's pending recapitalization transactions, S&P expects to take these ratings actions: Affirm Landry's 'B' corporate credit rating with a stable outlook. Assign a '1' recovery to Landry's amended and restated $210 million senior secured facility consisting of a $160 million term loan and a $50 million revolving credit facility. The '1' recovery rating indicates S&P's expectation of very high (90%- 100%) recovery of principle in the event of default and also dictates an issue-level rating of 'BB-', two notches above the corporate credit rating on the company. Assign a '3' recovery rating to Landry's new $270 million senior secured notes. The '3' recovery rating indicates S&P's expectation of meaningful (50%-70%) recovery of principle in the event of default and also dictates an issue-level rating of 'B', the same as the corporate credit rating.Affirm Golden Nugget's ratings, including the 'B-' corporate credit rating, with a negative outlook. The proceeds of Landry's new debt will be used to refinance its current debt. "The downgrade of Golden Nugget stems from our concerns about the company's increased leverage during a weak operating environment," said Standard & Poor's credit analyst Charles Pinson-Rose, "and about its ability to remain in compliance with its covenants (absent financial support from its parent, Landry's) in 2009 and 2010." LAWRENCE WIEDEMANN: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Lawrence Dupuy Wiedemann 249 Citrus Road River Ridge, LA 70123 Bankruptcy Case No.: 09-10163 Chapter 11 Petition Date: January 21, 2009 Court: United States Bankruptcy Court Eastern District of Louisiana (New Orleans) Judge: Elizabeth W. Magner Debtor's Counsel: Emile L. Turner, Jr., Esq. 424 Gravier Street New Orleans, LA 70130 Tel: (504) 586-9120 Email: eltjr01@bellsouth.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/laeb09-10163.pdf LAWRENCE WIEDEMANN: Sec. 341 Meeting on March 2 in New Orleans -------------------------------------------------------------- The United States Trustee in New Orleans, Louisiana, will covene a meeting of creditors in the bankruptcy case of Lawrence Dupuy Wiedemann on March 2, 2009, at 2:00 p.m. at F. Edward Hebert Federal Building, Room 111, 600 S. Maestri Street. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtors' bankruptcy cases. Attendance by the Debtors' creditors at the meeting is welcome, but not required. The Sec. 341(a) meeting offers the creditors a one-time opportunity to examine the Debtors' representative under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. Based in River Ridge, Louisiana, Lawrence Dupuy Wiedemann filed for Chapter 11 protection on January 21, 2009 (Bankr. E.D. La. Case No. 09-10163). The Hon. Elizabeth W. Magner presides over the case. Emile L. Turner, Jr., Esq., in New Orleans, represents the Debtors as counsel. The Debtor disclosed both estimated assets and debts to be between $1,000,001 and $10,000,000 in its petition. LEE ENTERPRISES: Gets Feb. 6 Extension of Covenant Waiver --------------------------------------------------------- Lee Enterprises, Incorporated, has received an extension of a waiver of covenant conditions related to the $306 million Pulitzer Notes debt of its subsidiary St. Louis Post-Dispatch LLC. The waiver has been extended until Feb. 6, 2009, while financing discussions continue. The Pulitzer Notes mature in April 2009. As reported by the Troubled Company Reporter on January 19, 2009, the waiver had been scheduled to expire January 16, but was extended until January 30. The Pulitzer Notes mature in April 2009. Carl Schmidt, Lee vice president, chief financial officer and treasurer, said, "Lee and its lenders continue to work diligently to effect an extension of the Pulitzer Notes, and to make longer term changes to our bank credit agreement to maintain the company's liquidity." Without such a waiver extension by the holders of the Pulitzer Notes, Lee would be in technical default of several provisions under its applicable debt agreements. An event of default would allow the Pulitzer Noteholders, with notice, to exercise certain remedies granted by the various debt agreements, including acceleration of the maturity of Lee's debt. The waiver contains a provision that will allow it to be withdrawn with 48 hours notice. Lee Enterprises -- http://www.lee.net/-- is a premier provider of local news, information and advertising in primarily midsize markets, with 49 daily newspapers and a joint interest in four others, online sites and more than 300 weekly newspapers and specialty publications in 23 states. Lee's markets include St. Louis, Mo.; Lincoln, Neb.; Madison, Wis.; Davenport, Iowa; Billings, Mont.; Bloomington, Ill.; and Tucson, Ariz. Lee stock is traded on the New York Stock Exchange under the symbol LEE. LEE ENTERPRISES: Newspapers Hit By Revenue Declines, Recession -------------------------------------------------------------- Robert W. Decherd, president and chairman of A.H. Belo Corp., which publishes The Dallas Morning News, said in a Jan. 30 letter that the rapid deterioration in the U.S. economy has changed the nature and urgency of re-thinking the company's business model -- "just as every newspaper publisher and companies in virtually every American industry are compelled to do." The past two months saw the demise of two major players in the industry. Tribune Co., which own leading papers, including the Los Angeles Times and Chicago Tribune, etc., having collective paid circulation totaling 2.2 million copies daily and 3.3 million copies on Sundays, filed for bankruptcy on Dec. 8, 2008. While Tribune had a wide portfolio, which included television and radio broadcasting, the Internet, and other entertainment offering, including the Chicago Cubs baseball team, it blamed its bankruptcy filing on the unprecedented decline in the newspaper publishing industry, which decline exacerbated by the current recession. The Star Tribune newspaper, which has the highest daily circulation in the state of Minnesota, and 15th largest daily newspaper in the United States, sought bankruptcy protection on Jan. 15 due to its worsening financial conditions and its heavy debt burden. "The domestic newspaper industry has been crippled by an unprecedented and severe decline in advertising revenue," said The Star Tribune Company CFO David W. Montgomery, in a document explaining Star Tribune's bankruptcy filing. "While this decline has been occurring for several years, the decline has been accelerated and exacerbated by the recession and the dislocation of the credit markets." Aside from Star Tribune and Tribune Co., other newspaper owners have been hit by the decline in advertisement revenues although they have been able to avert bankruptcy filing, so far. Advertising, Circulation Down Comparing figures provided by the Audit Bureau of Circulations for six-month periods ending Sept. 30, 2008, and March 31, 2008, daily circulation for the top 30 newspapers in the U.S. are down 5.27%: Daily Circulation For Six Months Ended -------------------- 09/30/08 03/31/08 % Change -------- -------- -------- 1 USA Today 2,293,310 2,284,219 0.40% 2 The Wall Street Journal 2,011,999 2,069,463 -2.78% 3 The New York Times 1,000,665 1,077,256 -7.11% 4 Los Angeles Times 739,147 773,884 -4.49% 5 Daily News - New York, NY 632,595 703,137 -10.03% 6 New York Post 625,421 702,488 -10.97% 7 Washington Post 622,714 673,180 -7.50% 8 Chicago Tribune 516,032 541,663 -4.73% 9 Houston Chronicle 448,271 494,131 -9.28% 10 The Arizona Republic - Phoenix 413,332 413,332 0.00% 11 Newsday - Melville, NY 377,517 379,613 -0.55% 12 San Francisco Chronicle 339,430 370,345 -8.35% 13 Dallas Morning News 338,933 368,313 -7.98% 14 The Boston Globe 323,983 350,605 -7.59% 15 Star Tribune - Minneapolis, MN 322,360 345,130 -6.60% 16 The Star-Ledger - Newark, NJ 316,280 334,150 -5.35% 17 The Chicago Sun-Times 313,176 330,280 -5.18% 18 The Plain Dealer - Cleveland, OH 305,529 326,907 -6.54% 19 The Philadelphia Inquirer 300,674 322,362 -6.73% 20 Detroit Free Press 298,243 316,007 -5.62% 21 The Oregonian - Portland, OR 283,321 312,274 -9.27% 22 The Atlanta Journal-Constitution 274,999 308,944 -10.99% 23 The San Diego Union-Tribune 269,819 304,399 -11.36% 24 St. Petersburg Times 268,935 288,669 -6.84% 25 The Sacramento Bee 253,249 268,755 -5.77% 26 The Indianapolis Star 244,796 255,303 -4.12% 27 St. Louis Post-Dispatch 240,796 255,057 -5.59% 28 The Kansas City Star 239,358 252,785 -5.31% 29 The Orange County (CA) Register 236,270 250,724 -5.76% 30 The Mercury News - San Jose, CA 224,199 240,223 -6.67% -------- -------- ------ 15,075,353 15,913,598 -5.27% Mr. Montgomery, Star Tribune's CEO, said that with respect to the newspaper industry, print classified advertising dropped by more than 25% in the first half of 2008 alone, representing a $1.8 billion loss in revenue for domestic newspapers. The industry, he added, has suffered historic declines in circulation, which have not only resulted in decreased circulation revenue, but have also acted as a further catalyst for declines in advertising revenue. He noted that much of a newspaper's more profitable print advertising sales are tied to circulation, which advertisers use as a proxy for readership. As circulation has declined, newspapers have been compelled to charge less for these ads. Chandler Bigelow III, Tribune's senior vice president and chief financial officer, said that while the company's newspaper advertising revenue continues to be in line with other large metropolitan newspapers, newspaper advertising revenue generally is in significant decline, down industry-wide 15% to 20% in 2007 in major metropolitan markets, and down industry-wide nearly $2 billion, or 18%, in the third quarter of 2008. Gannett Co., Inc., which owns the U.S.'s most read newspaper, USA Today, and 84 other newspapers, said its publishing segment operating revenues were $1.4 billion for the quarter of 2008, compared with $1.7 billion in the fourth quarter of 2007, an 18.6% decline. Advertising revenues were $963.4 million compared with $1.2 billion in the fourth quarter of 2007. At USA TODAY, advertising revenues were 18.5% lower in the fourth quarter compared to the fourth quarter in 2007. Gannett said that its results were reflective of "unprecedented turmoil in the economies of both the U.S. and the UK and in the financial market", although the results of its broadcasting and digital segments were largely unchanged. New York Times Co. disclosed that in the fourth quarter of 2008 total revenues decreased 10.8% to $772.1 million, as advertising revenues decreased 17.6%. The New York Times publisher said revenues decreased mainly due to lower print advertising. "The disruptions of the global economy are affecting all businesses and industries, especially companies, such as ours, that generate a significant portion of their revenues from advertising," said Janet L. Robinson, NYT president and CEO. Cablevision Systems Corporation, which bought Newsday from Tribune Co. in July 2008, has yet to reveal its fourth quarter results on Feb. 23. It recorded $73,468,000 in revenues from its newspaper publishing group in three months ended Sept. 30, 2008. Other firms are scheduled to release their fourth quarter results on these dates: Company Earnings Release Date ------- -------------------- News Corporation 02/05/09 Washington Post Co. 02/25/09 Cablevision 02/23/09 A.H. Belo Corp. 02/17/09 Sun-Times Media Group 03/09/09 The McClatchy Company 02/05/09 Journal Register Co. 02/02/09 Gatehouse Media Inc. 03/09/09 American Media Inc. __/__/09 Firms that are privately held, like Hearst Corporation, owner of the San Francisco Chronicle, do not publicly disclose their financial results. Rising Internet Traffic Cutting Print Revenues Various reports say that newspaper revenues have been decreasing, as readers have shifted to the Web. According to Bloomberg, rising Internet use have hurt magazines and newspapers. While overall revenues fell, New York Times' Internet businesses, which include NYTimes.com, About.com, Boston.com and other company Web sites, increased 6.5% to $351.7 million in 2008 from $330.2 million in 2007, and Internet advertising revenues increased 9.3% to $308.8 million from $282.5 million. In total, Internet businesses accounted for 12.0% of the company's revenues in the fourth quarter versus 11.0% in the 2007 fourth quarter. Lee Enterprises Incorporated (NYSE: LEE), which runs 49 daily newspapers, including the St. Louis Post-Dispatch, said that Circulation revenues dropped 4.5% to $47.56 million. Combined print and online advertising revenue dropped 15.2% to $184.6 million, with retail advertising down 9.8%, and classified down 27.1%. More Writedowns While the Washington Post Co. (NYSE:WPO) has yet to reveal its quarterly results, it announced on Jan. 15 a regular quarterly dividend of $2.15 per share, payable on Feb. 6, 2009. On Jan. 23, Washington Post said it would take a $70 million impairment charge after concluding that the estimated fair value of its online lead generation business is less than its reported carrying value. Reuters notes that the Post is one of several U.S. newspaper publishers that have written down the value of their properties as advertising revenue shrinks. According to Reuters, The New York Times, Lee Enterprises (LEE.N) and McClatchy Co. (MNI.N) and other publishers have written down billions of dollars in the past several years. In fiscal 2008, Lee Enterprises recorded after-tax non-cash charges totaling $893.7 million to reduce the carrying value of goodwill, other assets and the company's investment in TNI Partners. On Jan. 28, American Media Operations, Inc., operating subsidiary of American Media Inc., leading publisher of celebrity journalism and health and fitness magazines in the U.S., said it is in the process of performing impairment testing of its tradenames and goodwill. AMOI expects to record impairment charges for its titles of between $200 million and $220 million with respect to certain of its tradenames and goodwill. Heavy Debt Burden, Liquidity Problems Aside from declining revenues, some of the newspaper publishers were highly leveraged, limiting their flexibility and ability to address liquidity constraints. At that time of its bankruptcy filing Tribune Co. owed $13 billion in total funded debt. Starting June 30, 2008, Star Tribune stopped making payments scheduled quarterly interest, which reached $20 million as of its bankruptcy petition in January 2009. While Star Tribune had $26.9 million in cash as of Dec. 31, 2008, its liabilities reached $661.1 million, including $392.5 million owed on its first lien debt and $96 million owed on its second loan debt, paling in comparison to assets of only $493.2 million. Lee Enterprises also is trying to renegotiate $306 million in debt that it assumed when it bought Pulitzer Inc. in 2005. Of that, $142.5 million is due in April and Lee's auditors have said Lee can't afford to pay it, the St. Louis Post-Dispatch said. GateHouse Media, Inc., which has 92 daily newspapers with total paid circulation of approximately 834,000, announced Jan. 28 that it is seeking to amend its $1.2 billion senior secured credit facility. The amendment would, among other things, allow the company to repurchase outstanding term loans under the facility at prices below par through a modified Dutch auction through December 31, 2011. The company is seeking the consent of the requisite lenders by 5:00 pm (Eastern Time) Monday, February 2, 2009, in order to effect the amendment American Media, publisher of celebrity journalism and health and fitness magazines including Star, Shape and the National Enquirer, made tender offers for $570 million of its outstanding senior subordinated notes, which comprise (i) $400,000,000 principal amount of 10.25% Series B Senior Subordinated Notes due 2009 and $14,544,000 aggregate principal amount of 10.25% Series B Senior Subordinated Notes due 2009, and (ii) $150,000,000 aggregate principal amount of 8 7/8% Senior Subordinated Notes due 2011 and $5,454,000 aggregate principal amount of 8 7/8% Senior Subordinated Notes due 2011. American Media, through its AMOI subsidiary will exchange those Notes with (a) $21,245,380 principal amount of 9% senior PIK notes due 2013, (b) $300,000,000 principal amount of the company's 14% senior subordinated notes due 2013, and (c) 5,700,000 shares of Media's common stock, representing 95% of American Media's outstanding shares of common stock. The offer expired Jan. 29. As of Jan. 9, AMOI has entered into agreements with holders of 81% of the outstanding aggregate principal amount of the 2009 Notes and 69% of the outstanding aggregate principal amount of the 2011 Notes. The tender offer conditioned upon, among other things, receipt of tenders and related consents by holders of at least 98% of each series of the Existing Notes. Pursuant to forbearance agreements, holders of the Existing Notes have agreed to forbear until 5:00 p.m., New York City time, on February 4, 2009, from exercising any remedies under the indentures governing the Existing Notes as a result of AMOI's. Sun-Times Media Group, Inc. (Pink Sheets: SUTM), which owns the Chicago Sun-Times, informed investors on Jan. 29 that an arbitrator has awarded CanWest Global Communications Corp., a Canadian media company, CN$51 million, exclusive of interest and costs, in connection with a dispute relating to CanWest's purchase of newspaper assets from Sun-Times Media in 2000. On Dec. 19, 2003, CanWest pursued arbitration, in connection with its claim that Sun-Times owed CN$84.0 million related to the transaction. As of Sept. 30, 2008, the company had a reserve established in respect of the arbitration in the amount of CN$15 million. A previously established escrow account funded by the company containing approximately CN$22 million may be available to pay any final arbitration award. The Chicago Tribune noted that as of Sept. 30, Sun-Times Media had cash of $99.8 million, but the company faces a number of tax and other liabilities. After a big write-down of intangible assets during the third quarter, Sun- Times' negative worth, or negative shareholder equity, widened to $321.7 million, the Chicago Tribune said. In Jan. 28, Washington Post said it's selling $400 million in fixed-rate notes at a price of 99.614% of par for an effective yield of 7.305% per annum. The ten-year notes will have a coupon of 7.25% per annum, payable semi-annually on February 1 and August 1, beginning August 1, 2009. The company intends to use the net proceeds from the sale of the notes to repay $400 million of notes that mature on February 15, 2009. Sale of Assets, Job Cuts to Stem Losses A.H. Belo's Mr. Decherd said in his Jan. 30 letter to employees that the decline in advertising revenues for the newspaper industry and all media persists, and that the key for the company is to generate and preserve cash. He stated that the company needs to reduce its workforce as the revenue trends do not support or require the same number of people the company has employed. The reduction will "probably be in the range of 500 jobs." He added that the company would suspend the A. H. Belo Savings Plan match and will cut reimbursements policies to employees. "Similarly, it is no longer reasonable for the Company to provide free parking in downtown Dallas," he said. A monthly charge of $40 will take effect May 1, 2009 for all downtown Dallas surface lots owned by the company. On Jan. 9, Hearst Corp. announced that it is offering for sale the Seattle Post-Intelligencer and its interest in a joint operating agreement under which the P-I and The Seattle Times are published. Hearst said that should a sale not occur within 60 days, it will pursue options, "including a move to a digital-only operation with a greatly reduced staff or a complete shutdown of all operations." "In no case will Hearst continue to publish the P-I in printed form following the conclusion of this process." The P-I, which Hearst has owned since 1921, has had operating losses since 2000. The P-I lost approximately $14 million in 2008 and its forecast anticipates a greater loss in 2009. Hearst also denied speculations it is interested in acquiring The Seattle Times. On Jan. 28, 2009, The New York Times Co., which also owns the International Herald Tribune and The Boston Globe, announced that it has retained Goldman, Sachs & Co. as its financial advisor to explore the possible sale of its 17.75% ownership interest in New England Sports Ventures, LLC. NESV owns the Boston Red Sox, Fenway Park and adjacent real estate, approximately 80 percent of New England Sports Network, the top rated regional cable sports network in the country delivered to more than four million homes throughout New England and nationally via satellite, and 50 percent of Roush Fenway Racing, a leading NASCAR team. Tribune Co., which is in the U.S. Bankruptcy Court for the District of Delaware to delever its balance sheet, is arranging the sale of its Chicago Cubs baseball team. Times Publishing Co., which publishes the St. Petersburg Times, one of the most respected regional newspapers in the U.S., is exploring the sale of Congressional Quarterly, Inc. Based in Washington, D.C., Congressional Quarterly publishes news and information on politics, public policy and legislative activity at the federal, state and local levels. The McClatchy Company, which has 30 daily newspapers, including The Miami Herald, The Sacramento Bee, and the Fort Worth Star- Telegram, said that it will suspend its quarterly dividend after paying the first quarter 2009 dividend for the foreseeable future in order to preserve cash for debt repayment. The first quarter 2009 dividend of nine cents per share is half the per share dividend paid in the 2008 first quarter. On Jan. 30, Editor & Publisher reported that the Journal Register Co. announced the sale of The Hershey (Pa.) Chronicle to The Sun in Hummelstown, Pa. On Jan. 7, Journal Register said it has signed an agreement with Central Connecticut Communications regarding a sale of The Bristol Press, The Herald of New Britain and The Sunday Herald Press from Journal Register Company. The sale includes the assets of the papers' web sites and of three nearby weeklies, the Wethersfield Post, the Newington Town Crier and the Rocky Hill Post. As of November 2008, JRC owned 22 daily newspapers and approximately 300 non-daily publications. Some Newspapers to Reach End According to a blog by Douglas A. McIntyre posted Jan. 11 at 24/7 Wall St., twelve major media brands are likely to close in 2009, as Journal Register and Gatehouse, and McClatchy have struggled. It noted that The Seattle Post-Intelligencer, Denver's Rocky Mountain News, The Miami Herald and the San Francisco Chronicle are on the block, and may be shut if no buyers emerge. The New York Daily News and The New York Observer are also at risk, according to the report. The United Press International Inc. reported Jan. 9 that Sun- Times Media said it would close 12 weekly newspapers to cut expenses as advertising revenues have fallen. The 12 suburban newspapers scheduled to close are part of 51 newspapers published by Pioneer Press, which the Sun-Times purchased in 1989. The newspapers, scheduled to fold Jan. 15, cover mostly the northwest suburbs of Chicago, Crain's Chicago Business reported Friday. According to CT Business Journal, Journal Register closed 16 newspapers in Connecticut in December. The papers affected include the Branford Review, Clinton Recorder, Hamden Chronicle, Milford Weekly, North Haven Post, Shelton Weekly, Stratford Bard, West Haven News, Wallingford Voice, East Haven Advertiser and others. Hanging In the Balance While Tribune Co., and Star Tribune have filed for bankruptcy, other newspaper publishers' fate are hanging in the balance. American Media's revolving facility, of which $60 million is outstanding and the term loan facility, of which $439.6 million is owed, both will mature on February 1, 2009 if the company has more than $25.0 million of the 10.25% Series B Senior Subordinated Notes due May 1, 2009 outstanding on February 1, 2009. According to Crain's New York, John Page, senior analyst at Moody's, said it was unclear what the banks would do with the company if an agreement couldn't be reached with bondholders. "It's a difficult environment to be selling assets," he said. In its form 10-Q for the third quarter of 2008, American Media Operations said if it is unable to extend or refinance the Notes, the 2006 Credit Agreement will likely mature early and the Company will not have sufficient funds to repay such indebtedness. "In such event, the Company may have to liquidate assets on unfavorable terms, or be unable to continue as a going concern, and incur additional costs associated with bankruptcy." Lee Enterprises' waiver of covenant conditions related to the $306 million Pulitzer Notes debt of its subsidiary St. Louis Post- Dispatch LLC expire Feb. 6, 2009. The Pulitzer Notes mature in April 2009. Lee says discussions with lenders continue. The struggles of the newspaper industry have also resulted to pulp- and paper-related bankruptcies. Paperboard and paper-based packaging Smurfit-Stone Corp., filed for Chapter 11 on Jan. 26, and Corp. Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Magazine printer, Quebecor World Inc., and pulp mill operator Pope & Talbot Inc., have also sought bankruptcy protection in Canada and the U.S. About Lee Enterprises Lee Enterprises is a premier provider of local news, information and advertising in primarily midsize markets, with 49 daily newspapers and a joint interest in four others, online sites and more than 300 weekly newspapers and specialty publications in 23 states. Lee's markets include St. Louis, Mo.; Lincoln, Neb.; Madison, Wis.; Davenport, Iowa; Billings, Mont.; Bloomington, Ill.; and Tucson, Ariz. Lee stock is traded on the New York Stock Exchange under the symbol LEE. For more information about Lee, please visit www.lee.net. LENNAR CORPORATION: Posts $1.1BB Net Loss for Year Ended Nov. 30 ---------------------------------------------------------------- Stuart A. Miller, president, chief executive officer and director of Lennar Corporation, disclosed in a regulatory filing dated January 26, 2009, that the company posted a net loss of $1.1 billion for the year ended November 30, 2008, compared to a net loss of $1.9 billion for the same period in 2007. According to Mr. Miller, the current year net loss was attributable to weakness in the housing market that has persisted during 2008 and has impacted all of the company's operations. "Our gross margin percentage increased due to our lower inventory basis and continued focus on repositioning our product and reducing construction costs, despite Statement of Financial Accounting Standards No. 144, Accounting for the Impairment of Long-lived Assets, valuation adjustments and a decrease in the average sales price of homes delivered during 2008, compared to 2007. Our 2008 results were also impacted by a non-cash SFAS 109, Accounting for Income Taxes, valuation allowance of $730.8 million recorded against our deferred tax assets." Mr. Miller relates that revenues from home sales decreased 56% in the year ended November 30, 2008, to $4.2 billion from $9.5 billion in 2007. Revenues were lower primarily due to a 51% decrease in the number of home deliveries and a 9% decrease in the average sales price of homes delivered in 2008. New home deliveries, excluding unconsolidated entities, decreased to 15,344 homes in the year ended November 30, 2008 from 31,582 homes last year. In the year ended November 30, 2008, new home deliveries were lower in each of our homebuilding segments and Homebuilding Other, compared to 2007. The average sales price of homes delivered decreased to $270,000 in the year ended November 30, 2008 from $297,000 in 2007, due to reduced pricing. Sales incentives offered to homebuyers were $48,700 and $48,000 per home delivered, respectively, in the years ended November 30, 2008 and 2007." "The housing market continues to be compromised by the most significant domestic economic downturn in recent history. General economic pressures continue to drive down the volume and prices of homes being sold, as rising levels of foreclosures add inventory to an already saturated marketplace. Overall consumer sentiment has continued to deteriorate, resulting in fewer potential home purchasers willing to enter the market. These conditions have fostered a competitive need amongst homebuilders to drive pricing downward through the use of incentives, price reductions and incentivized brokerage fees. Although there is optimism that the new administration taking federal office will offer stimulus to fix the sliding housing environment, we currently do not have visibility as to when these deteriorating market conditions will subside. Whether or not there is additional federal stimulus, there could be further deterioration in market conditions, which may lead to additional valuation adjustments in the future." "In midst of this environment, we remained balance sheet focused with great emphasis on liquidity and positioning ourselves for future opportunities. We continued to reduce overhead in an effort to be 'right-sized' for anticipated lower volume levels in fiscal 2009. In addition, we continued to carefully manage our inventory levels through curtailing land purchases, reducing home starts and adjusting prices to deliver completed homes." "We also have diligently worked on restructuring, repositioning and reducing our joint ventures. We have reduced the number of joint ventures in which we participate to 116 unconsolidated joint ventures at November 30, 2008, compared to 270 unconsolidated joint ventures at the peak in 2006. We have also reduced our net recourse indebtedness exposure with regard to joint ventures to $392.5 million at November 30, 2008, compared to $1.1 billion at the peak in 2006." "In 2009, cash generation will continue to be our top priority. We will convert inventory to cash and reduce both our land purchases and homebuilding starts. In addition, we will reduce our cash outflows by continuing to right-size our overhead to improve our selling, general and administrative expenses as a percentage of revenues." As of November 30, 2008, the company's balance sheet showed total assets of $7,424,898, total liabilities of $4,636,145 and total stockholders' equity of $2,623,007. About Lennar Corp. Based in Miami, Fla., Lennar Corporation (NYSE: LEN and LEN.B) -- http://www.lennar.com/-- builds affordable, move-up and retirement homes primarily under the Lennar brand name. Lennar's Financial Services segment provides primarily mortgage financing, title insurance and closing services for both buyers of the company's homes and others. * * * As reported by the Troubled Company Reporter on June 11, 2008, Moody's Investors Service lowered all of the ratings of Lennar Corporation, including its corporate family rating to Ba3 from Ba1 and the ratings on its various issues of senior unsecured notes to Ba3 from Ba1. At the same time, a speculative grade liquidity rating of SGL-2 was assigned. The ratings outlook remains negative. As reported by the TCR on Dec. 16, 2008, Fitch Ratings downgraded Lennar Corp.'s Issuer Default Ratings and outstanding debt ratings: -- IDR to 'BB+' from 'BBB-'; -- Senior unsecured to 'BB+' from 'BBB-'; -- Unsecured bank credit facility to 'BB+' from 'BBB-'; -- Short Term IDR from 'F3' to 'B'; -- Commercial Paper from 'F3' to 'B'. Fitch said the rating outlook remains negative. MAGNETBANK: Utah Bank Fails & FDIC to Pay All Insured Deposits -------------------------------------------------------------- The Federal Deposit Insurance Corporation (FDIC) approved the pay- out of insured deposits of MagnetBank based in Salt Lake City, Utah. The bank was closed Fri., Jan. 30, 2009, by the Utah Department of Financial Institutions and the FDIC was named receiver. After an extensive marketing process, the FDIC was unable to find another financial institution to take over the banking operations of MagnetBank. As a result, checks to the retail depositors for their insured funds will be mailed on Mon., Feb. 2, 2009. Brokered deposits will be wired once brokers provide the FDIC with the necessary documents to determine if any of their clients exceed the insurance limits. Customers who placed money with brokers should contact them directly for more information about the status of their funds. MagnetBank, as of December 2, 2008, had total assets of $292.9 million and total deposits of $282.8 million. It is estimated that the bank did not have any uninsured funds. MagnetBank is the fourth FDIC-insured institution to fail this year and the first in Utah since Bank of Ephraim, was closed on June 25, 2004. MARVIN GARDENS: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Marvin Gardens, Inc. 5845 Quail Ave. Las Vegas, Nv 89118 Bankruptcy Case No.: 09-10967 Chapter 11 Petition Date: January 26, 2009 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Mike K. Nakagawa Debtor's Counsel: David J. Winterton, Esq. 211 N. Buffalo Dr. #A Las Vegas, NV 89145 Tel: (702) 363-0317 Email: david@davidwinterton.com Total Assets: $5,250,100 Total Debts: $3,125,150 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nvb09-10967.pdf The petition was signed by Jeffrey R. Selliner, President of the company. MASONITE INT'L: Mum About Jan. 30 Expiration of Forbearance Pact ---------------------------------------------------------------- Masonite International, Inc., has yet to announce whether it has obtained another extension of its forbearance agreement with its lenders. On January 16, 2009, Masonite International announced that it has entered into a further extension, to January 30, 2009, of the forbearance agreement dated September 16, 2008, with its bank lenders. As a result of its financial performance for the quarters ended June 30, and September 30, 2008, Masonite was not in compliance as of such dates with certain financial covenants contained in its credit facility, which constituted an event of default under the credit facility. The financial covenants relate to EBITDA metrics and reflect the challenging conditions in the U.S. housing industry. Masonite is engaged in ongoing negotiations with lenders that are party to the credit facility regarding a potential amendment to the terms of the credit facility. There is no assurance that the negotiations with lenders will result in an amendment acceptable to Masonite and to its lenders. A copy of the Second Amendment to the Forbearance Agreement is available at: http://researcharchives.com/t/s?38fb Under terms of the forbearance agreement entered into in September 2008, which is effective upon Masonite's payment of certain fees, neither the administrative agent nor the lenders will (i) take action to accelerate the maturity of or terminate the company's revolving credit facility or to otherwise enforce payment of the company's obligations under the credit agreement, or (ii) exercise any other rights and remedies available to them under the credit agreement or applicable law. The forbearance agreement applies to the non-compliance of the covenants as of June 30 and, provisionally, any such non-compliance as of September 30, 2008. The original forbearance agreement was scheduled to expire November 13, 2008, but was twice extended. As of June 30, 2008, the company had $241 million in cash on hand. "The goal of the current discussions we are having with our lenders is to help ensure that we have an appropriate capital structure to support our long-term strategic plan and business objectives, both today and in the future," said Fred Lynch, President and Chief Executive Officer of Masonite, in a September 2008 news release. "With our excellent market position, strong brand, industry-leading products, and the most capable team in the industry, we believe we are well-positioned to take advantage when the market rebounds. In the meantime, we remain focused on delivering the highest value door products to our customers around the world." Masonite has also entered into a separate forbearance agreement with holders of a majority of the senior subordinated notes due 2015 issued by two of the company's subsidiaries. That forbearance agreement is effective through January 31, 2009. Combination Pact with Stile Canada Masonite International Corporation entered into a combination agreement in December 2004, with Stile Canada, an entity controlled by affiliates of Kohlberg Kravis Roberts & Co. L.P., which was subsequently amended, pursuant to which on April 6, 2005, Stile Canada acquired all of the common shares of Masonite International at a purchase price of C$42.25 per share in cash. Following the Transaction, Masonite International was amalgamated with Stile Canada to form Masonite Canada Corporation, which then transferred all of the common shares of Masonite Holdings, Inc., which is the parent company of Masonite International Corporation's U.S. subsidiaries, to Stile U.S. Following the transfer, Masonite Holdings, Inc. was merged with and into Stile U.S., and the surviving corporation was renamed Masonite Corporation. Masonite Canada Corporation was subsequently renamed Masonite International Corp. In connection with the Acquisition: -- Masonite U.S. and Masonite Canada entered into senior secured credit facilities, consisting of a $1.175 billion term loan facility, with The Bank of Nova Scotia, as Administrative Agent and as Canadian Administrative Agent, and the lending syndicate, the proceeds of which were used to pay the consideration in the Transaction and related costs and expenses, and a $350.0 million revolving credit facility, a portion of which is available for the issuance of letters of credit and the proceeds of which may be used solely for general corporate purposes; and -- Masonite U.S. and Masonite Canada entered into a $770.0 million senior subordinated loan facility with The Bank of Nova Scotia, as Administrative Agent and as Canadian Administrative Agent, and the lending parties. Masonite's $1.175BB Term Loan & $350MM Revolver According to the company's annual report for the year ended December 31, 2007, the eight-year $1.175 billion term loan is due April 6, 2013, and has an original interest rate of LIBOR plus 2.00% that amortizes at 1% per year. The $350 million revolving credit facility interest rate is subject to a pricing grid ranging from LIBOR plus 1.75% to LIBOR plus 2.50%. As of December 31, 2007, the revolving credit facility carried an interest rate of LIBOR plus 2.50%. The senior secured credit facilities provide for the payment to the lenders of a commitment fee on the average daily undrawn commitments under the revolving credit facility at a range from 0.375% to 0.50% per annum, a fronting fee on letters of credit of 0.125%, and a letter of credit fee ranging from 1.75% to 2.50% (less the 0.125% fronting fee). The senior secured credit facilities require the company to meet a minimum interest coverage ratio of 1.65 times Adjusted EBITDA and a maximum leverage ratio of 7.0 times Adjusted EBITDA as of December 31, 2007. These ratios will be adjusted over the passage of time, ultimately reaching a minimum interest coverage ratio of 2.2 times Adjusted EBITDA, and a maximum leverage ratio of 4.75 times Adjusted EBITDA. In addition, the senior secured credit facilities contain certain restrictive covenants which, among other things, limit the incurrence of additional indebtedness, investments, dividends, transactions with affiliates, asset sales, acquisitions, mergers and consolidations, prepayments of other indebtedness, liens and encumbrances and other matters customarily restricted in such agreements. They also contain certain customary events of default, subject to grace periods, as appropriate. The company is permitted to incur up to an additional $300 million of senior secured term debt under the senior secured credit facilities so long as no default or event of default under the new senior secured credit facilities has occurred or would occur after giving effect to such incurrence, and certain other conditions are satisfied. The net debt to Adjusted EBITDA calculation measures the debt the company has on its balance sheet against its Adjusted EBITDA over the last 12 months. This ratio increased from 5.96:1.0 at December 31, 2006 to 6.00:1.0 at December 31, 2007. The company's cash interest coverage ratio measures its Adjusted EBITDA as a multiple of its cash interest expense over the last 12 months. This ratio was unchanged from the prior year at 1.91:1.0. Masonite's $770MM Sr. Sub. Notes Due 2015 The $770 million senior subordinated loan initially carried an interest rate of LIBOR plus 6.00% and increased over time to a maximum interest rate of 11% per annum, which was reached in the second quarter of 2006. On October 6, 2006, the senior subordinated loan was repaid in full by the automatic issuance of a new debt obligation comprising a Senior Subordinated Term Loan. After October 6, 2006, the majority of the lenders elected to convert their holdings of the Senior Subordinated Term Loan to Senior Subordinated Notes due 2015, which bear interest 11%, and are subject to registration rights. About Masonite International Corporation Based in Ontario, Canada, Masonite International Corporation -- http://www.masonite.com/-- (TSE:MHM) is a vertically integrated producer, manufacturing key components of doors, including composite molded and veneer door facings, glass door lites and cut stock. The company provides these products to its customers in more than 70 countries around the world. The company is a wholly owned subsidiary of Masonite International Inc. It offers a range of interior and exterior doors. Masonite Canada operates Masonite International's Canadian subsidiaries, well as certain other non- United States subsidiaries. * * * As reported in the Troubled Company Reporter on Sept. 1, 2008, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on Masonite International Inc. (Masonite) and its subsidiaries, Masonite International Corp. and Masonite US Corp., to 'CCC+' from 'B-'. S&P also lowered the senior secured debt rating on Masonite to 'B' from 'B+'. The ratings remain on CreditWatch with negative implications, where they were placed April 18, 2008. MEDCAP HOLDING: Moody's Junks Rating on $32.380 Million Certs. -------------------------------------------------------------- Moody's Investors Service downgraded the rating of Medcap Holding V, LLC, Certificates of Participation, Sparks Regional Medical Center Lease, Series 2002: * Certificates of Participation, $32,380,000, downgraded to Caa1 from B2; previously downgraded to B2 from Baa3 and placed on review for possible downgrade on November 17, 2008 Moody's downgraded the bonds to align the rating with the current rating of Sparks Regional Medical Center (long term debt rating Caa1, negative outlook). Moody's downgraded SRMC on January 28, 2009. The notes are secured by a mortgage on 19 medical office facilities leased by Sparks. The lease is guaranteed by Sparks Health System and Sparks Medical Foundation, which are affiliated physician organizations. The lease expires on June 30, 2017, subject to an option to extend. The transaction is structured with a residual value insurance policy issued by R.V.I. America Insurance Company (financial strength rating at A3 -- stable outlook). The facilities are located in Arkansas and Oklahoma. The ratings on the notes were assigned by evaluating factors determined to be applicable to the credit profile of the notes, such as: i) the nature, sufficiency and quality of historical performance information regarding the asset class as well as for the transaction sponsor; ii) an analysis of the collateral being securitized; iii) an analysis of the policies, procedures and alignment of interests of the key parties to the transaction, most notably the originator and the servicer; iv) an analysis of the transaction's governance and legal structure; and vi) a comparison of these attributes against those of other similar transactions. In rating this transaction, Moody's used its credit-tenant lease financing rating methodology. Under Moody's CTL approach, the rating of a transaction's certificates is primarily based on the senior unsecured debt rating (or the corporate family rating) of the tenant, usually an investment grade rated company, leasing the real estate collateral supporting the bonds. This tenant's credit rating is the key factor in determining the probability of default on the underlying lease. The lease generally is "bondable", which means it is an absolute net lease, yielding fixed rent paid to the trust through a lock-box, sufficient under all circumstances to pay in full all interest and principal of the loan. The leased property should be owned by a bankruptcy-remote, special purpose borrower, which grants a first lien mortgage and assignment of rents to the securitization trust. The dark value of the collateral, which assumes the property is vacant or "dark", is then examined; the dark value must be sufficient, assuming a bankruptcy of the tenant and rejection of the lease, to support the expected loss consistent with the certificates' rating. The certificates' rating will change as the senior unsecured debt rating (or the corporate family rating) of the tenant may change. Moody's also considers the overall structure and legal integrity of the transaction. METOKOTE CORPORATION: Moody's Downgrades Corporate Rating to 'B3' ----------------------------------------------------------------- Moody's Investors Service downgraded MetoKote's Corporation Corporate Family Rating and first lien senior secured credit facilities to B3 from B2. The Probability of Default rating was also lowered to Caa1 from B3. The company's rating outlook was revised to negative from stable. John Zhao, Moody's analyst stated, "We expect that MetoKote's run- rate credit metrics over the next 6-12 months would no longer support a B2 rating." The downgrade and negative outlook reflects the intensifying challenges facing MetoKote's top-line due to a precipitous and potentially prolonged decline in production volume in the automotive industry in North America. Although in recent years the company has diversified its industry concentration with the auto sector, it still generates roughly 49% of sales from automotive end markets (approximately 27% from Detroit-3 auto makers). In Moody's opinion, MetoKote should experience significant margin deterioration due to the pace and magnitude of these anticipated volume declines in the coming year given its relatively high operating leverage. The company's pricing protection mechanism, built into some of its contracts, is unlikely to fully offset this severe volume reduction per Moody's estimate. Therefore, the company will likely experience considerable strain to profitability, liquidity, and covenant compliance in the intermediate term. Tempering the above credit risks are the company's modest financial leverage and its leading position in the niche outsourced industrial coating market. MetoKote's liquidity profile is expected to be adequate capturing Moody's expectation of breakeven free cash flow that should cover its capital expenditure and other fixed charges over the next twelve months. However, the company's liquidity profile could be tempered by the tightening financial covenants. In particular, Moody's notes that the company leverage covenant cushion would likely erode appreciably from current levels as its top-line and profitability soften over the next four quarters. In addition, MetoKote's liquidity could become constrained if the working capital needs increase abruptly and substantially, such as if its account receivables collection gets disrupted or delayed due to potential bankruptcy filings of its major customers. These ratings are affected: * Corporate Family Rating -- downgraded to B3 from B2 * Probability of Default Rating -- downgraded to Caa1 from B3 * First-lien Senior Secured Credit Facility -- downgraded to B3 (LGD-3, 35%) from B2 (LGD-3, 33%) The rating outlook is negative. The last rating action was on March 16, 2005 when the company's CFR was lowered to B2 from B1. MetoKote provides a full suite of outsourced industrial coating services to manufacturers in North America, Europe, and Brazil. The company offers solutions either within a customer's facility or at one of MetoKote's regional facilities. End markets served include automotive, heavy truck, agriculture, construction, metal furniture, appliances, and consumer products. For the trailing twelve month period ended July 31, 2008, the company's global operations generated approximately $222 million in revenue. MIGENIX INC: Files Short Form Prospectus & Signs UTC Agreement -------------------------------------------------------------- MIGENIX Inc. is distributing to the holders of its outstanding common shares of record at 5:00 pm, Toronto time, on February 2, 2009, rights to subscribe for units of the Corporation. Each Unit will consist of one common share and one Common Share purchase warrant. Each Warrant will entitle the Holder to purchase one Common Share at a price of $0.10 per Common Share at any time before 5:00 pm, Toronto time, on the date that is 12 months following the closing of the Offering. The Rights are fully transferable within Canada and will be evidenced by certificates in registered form. Each Holder is entitled to one Right for each Common Share held on the Record Date. Two Rights entitle the holder, thereof to purchase one Unit of the Corporation at a price of $0.05 per Unit prior to 5:00 p.m., Toronto time, on February 26, 2009. No fractional Units will be issued. Rights not exercised before the Expiry Time on the Expiry Date will be void and of no value. Holders who exercise their Basic Subscription Right in full are entitled to subscribe for additional Units, if available, pursuant to an additional subscription privilege. The company filed a Short Form Prospectus with the U.S. Securities and Exchange Commission on January 26, 2009. A full-text copy of the Short Form Prospectus is available for free at: http://researcharchives.com/t/s?38de Exclusive Option Agreement On January 27, 2009, MIGENIX disclosed that it entered into an exclusive option agreement with United Therapeutics Corporation in respect of MIGENIX's drug candidate celgosivir. Pursuant to the option agreement, MIGENIX will conduct certain specified preclinical work to further characterize and investigate the utility of celgosivir in the treatment of viral infections. UTC has agreed to fund the cost of this work as well as certain other costs related to celgosivir. Upon completion of the specified preclinical work and delivery of a final report of the results by MIGENIX, UTC may, at its sole discretion, exercise an option to license the rights to celgosivir for use in the prevention and treatment of viral diseases. If the option is exercised by UTC, MIGENIX could receive up to US$18 million in milestone payments, consisting of an upfront payment, two development milestone payments and two territorial regulatory approval milestone payments, as well as single digit royalties paid upon future sales of celgosivir. In the event that UTC exercises its option under the option agreement, UTC has agreed to assume all future costs related to the development and commercialization of celgosivir. MIGENIX anticipates that that UTC's option to exercise will run into the third quarter of calendar 2009. About United Therapeutics Corporation United Therapeutics Corporation -- http://www.unither.com/--is a biotechnology company focused on the development and commercialization of unique products to address the unmet medical needs of patients with chronic and life-threatening cardiovascular and infectious diseases and cancer. About MIGENIX Headquartered in Vancouver, British Columbia, Canada, MIGENIX Inc. -- http://www.migenix.com/-- is a biopharmaceutical company engaged in the research, development and commercialization of drugs for the treatment of infectious diseases to advance therapy, improve health and enrich lives. The Troubled Company Reporter reported on Jan. 6, 2009, that MIGENIX Inc. incurred significant losses since inception and as at October 31, 2008, had working capital of approximately C$0.7 million and an accumulated deficit of approximately C$143.4 million. "The company's current financial resources are expected to be sufficient for operations to February 2009. The company's ability to realize the carrying value of its assets is dependent on successfully advancing its technologies to market through the drug development and approval processes and ultimately achieving future profitable operations, the outcome of which cannot be predicted at this time, or in the alternative being able to sell the assets for proceeds for their carrying value or greater," President & CEO James DeMesa disclosed in a regulatory filing with the U.S. Securities and Exchange Commission. As of October 31, 2008, the company's balance sheet showed total assets of C$3,675,000 and total liabilities of C$8,930,000, resulting in total shareholders' deficit of C$5,255,000. For the three months ended October 31, 2008, MIGENIX incurred a loss of C$3.3 million and for the six months ended October 31, 2008, the loss is C$6.0 million. MORGAN STANLEY: Fitch Affirms 'B-' Rating on $15.9 Mil. Class L --------------------------------------------------------------- Fitch Ratings affirms Morgan Stanley Capital I Inc., series 1998- WF2 and assigns Rating Outlooks: -- Interest only class X at 'AAA'; Outlook Stable; -- $17 million class D at 'AAA'; Outlook Stable; -- $21.2 million class E at 'AAA'; Outlook Stable; -- $21.2 million class F at 'AAA'; Outlook Stable; -- $23.9 million class G at 'AAA'; Outlook Stable; -- $10.6 million class H at 'AA'; Outlook Stable; -- $8 million class J at 'A'; Outlook Stable; -- $8 million class K at 'BB+'; Outlook Stable; and -- $15.9 million class L at 'B-' Outlook Stable. The $5.3 million class M remains at 'CCC/DR2'. Fitch does not rate the $2.5 million class N certificates. Classes A-1, A-2, B and C have been paid in full. The affirmations reflect stable credit enhancement due to scheduled amortization and steady performance of the outstanding loans. As of the January 2009 distribution date, the pool's aggregate balance has been reduced 87.4%, to $133 million from $1.06 billion at issuance. One loan is currently defeased (9.1%). Fitch has identified three Loans of Concern (3.4%), including one specially serviced asset (1.4%). The specially serviced asset is a real estate owned. The loan is secured by a retail property located in Lansing, Michigan that has remained 100% vacant since 2002. Recent valuations of the asset indicate losses upon liquidation. The largest Loan of Concern (1.4%) is secured by retail property in Indianapolis, Indiana. The property continues to struggle with leasing vacant space in a soft market. Occupancy as of September 2008 was 70%. The largest remaining loan (30.1%) is an office property located in Washington, D.C. The fully amortizing loan is scheduled to mature in 2023 and had a servicer reported YE 2007 debt service coverage ratio of 1.61 times. The second largest remaining loan (12.5%) is secured by a hotel in San Diego, California. The loan is scheduled to mature in 2013 and had a servicer reported YE 2007 DSCR of 1.78x. The pool has limited near term maturity, with approximately 2.9% of the pool maturing in 2010 and only 1.1% in 2011. Of the loans remaining in the pool, approximately 52.5% are fully amortizing on either 15 or 25 year schedules. MORRIS PUBLISHING: Taps Lazard Freres as Financial Adviser ---------------------------------------------------------- Mark Fitzgerald at Editor and Publisher reports that Morris Publishing Group, LLC, said that it hired Lazard Freres & Co. LLC as financial adviser. Morris Publishing, according to Editor and Publisher, is struggling under debt. Morris Publishing must sell sufficient assets to repay its loans in full, according to the report. The report states that the sales or at least letters of intent must be complete by March 31, 2009, while deals must be wrapped up by May 30. According to a statement by Morris Publishing, the company also hired Neal, Gerbert & Eisenberg LLP, a law firm with a well- regarded bankruptcy practice. Morris Publishing Chairperson William S. Morris III said in a statement, "These firms will assist us in evaluating our strategic options regarding Morris Publishing's existing capital structure." Morris Publishing Group, LLC -- http://morriscomm.com/divisions/morris_publishing_group/index.shtm l -- was formed in 2001 and assumed the operations of the newspaper business segment of its parent, Morris Communications Co., LLC, a privately held media company based in Augusta, Georgia. The company has a concentrated presence in the Southeast, with four signature holdings: The Florida Times-Union (Jacksonville), The Augusta Chronicle, Savannah (Georgia) Morning News and Athens (Georgia) Banner-Herald. Morris Publishing owns and operates 13 daily newspapers as well as nondaily newspapers, city magazines and free community publications in the Southeast, Midwest, Southwest and Alaska. As reported by the Troubled Company Reporter on Nov. 18, 2008, Standard & Poor's Ratings Services lowered its corporate credit rating on Morris Publishing Group LLC to 'CCC' from 'CCC+'. S&P said that the rating outlook is negative. S&P's credit analyst Liz Fairbanks said that the rating downgrade reflects S&P's concern that, even with the covenant relief provided in the most recent executed amendment, the company would be unable to sustain its current capital structure over the next several quarters. The amendment stipulates that the company's parent, Morris Communications, must sign a letter of intent to consummate a transaction that would generate sufficient funds to prepay all loans under the credit agreement or refinance the facility. S&P is concerned that the company may file for bankruptcy protection to reduce its debt outstanding. According to the TCR on Oct. 21, 2008, Moody's Investors Service downgraded Morris Publishing's corporate family rating to Caa3 from B3, probability of default rating to Caa3 from Caa1, senior secured credit facility to B3 from Ba3 and senior subordinated notes to Ca from Caa1. The downgrades reflect Moody's belief that newspaper advertising revenue pressure and the recent amendment to the senior secured credit facility requiring the company to consummate a transaction in order to generate sufficient proceeds to prepay in full or repurchase at par outstanding loans under the credit facility by May 30, 2009, have heightened the risk of default. NATIONAL MESSAGING: To Hold Bulk Sale of Assets on February 16 -------------------------------------------------------------- National Messaging Solutions, Inc. notifies creditors that a bulk sale is to be made on or about Feb. 16, 2009, of its trade name, goodwill, equipment and other property located at its chief executive office at 1803 Holly Ave., Suite 101, Darlen, as well as its other business addresses at 1017 Burlington Ave., Downers Grove, and 40 Shuman Boulevard, Naperville, all in Illinois. The sale will take place through Macon County Title, LLC (Agent), 143 N. Water Street, Decantur, in Illinois and the last date for filing claims with the Agent shall be Feb. 12, 2009. National Messaging Solutions, Inc. -- http://www.nmessaging.com/- - is a communications company, offering connections and commerce to the largest list of carriers around the globe. The company has has been in wireless/mobile technology since its inception in the U.S. in or around 1990. National Messaging Solutions, Inc. is headquartered in Illinois. NEW YORK TIMES: Newspapers Hit By Revenue Declines, Recession ------------------------------------------------------------- Robert W. Decherd, president and chairman of A.H. Belo Corp., which publishes The Dallas Morning News, said in a Jan. 30 letter that the rapid deterioration in the U.S. economy has changed the nature and urgency of re-thinking the company's business model -- "just as every newspaper publisher and companies in virtually every American industry are compelled to do." The past two months saw the demise of two major players in the industry. Tribune Co., which own leading papers, including the Los Angeles Times and Chicago Tribune, etc., having collective paid circulation totaling 2.2 million copies daily and 3.3 million copies on Sundays, filed for bankruptcy on Dec. 8, 2008. While Tribune had a wide portfolio, which included television and radio broadcasting, the Internet, and other entertainment offering, including the Chicago Cubs baseball team, it blamed its bankruptcy filing on the unprecedented decline in the newspaper publishing industry, which decline exacerbated by the current recession. The Star Tribune newspaper, which has the highest daily circulation in the state of Minnesota, and 15th largest daily newspaper in the United States, sought bankruptcy protection on Jan. 15 due to its worsening financial conditions and its heavy debt burden. "The domestic newspaper industry has been crippled by an unprecedented and severe decline in advertising revenue," said The Star Tribune Company CFO David W. Montgomery, in a document explaining Star Tribune's bankruptcy filing. "While this decline has been occurring for several years, the decline has been accelerated and exacerbated by the recession and the dislocation of the credit markets." Aside from Star Tribune and Tribune Co., other newspaper owners have been hit by the decline in advertisement revenues although they have been able to avert bankruptcy filing, so far. Advertising, Circulation Down Comparing figures provided by the Audit Bureau of Circulations for six-month periods ending Sept. 30, 2008, and March 31, 2008, daily circulation for the top 30 newspapers in the U.S. are down 5.27%: Daily Circulation For Six Months Ended -------------------- 09/30/08 03/31/08 % Change -------- -------- -------- 1 USA Today 2,293,310 2,284,219 0.40% 2 The Wall Street Journal 2,011,999 2,069,463 -2.78% 3 The New York Times 1,000,665 1,077,256 -7.11% 4 Los Angeles Times 739,147 773,884 -4.49% 5 Daily News - New York, NY 632,595 703,137 -10.03% 6 New York Post 625,421 702,488 -10.97% 7 Washington Post 622,714 673,180 -7.50% 8 Chicago Tribune 516,032 541,663 -4.73% 9 Houston Chronicle 448,271 494,131 -9.28% 10 The Arizona Republic - Phoenix 413,332 413,332 0.00% 11 Newsday - Melville, NY 377,517 379,613 -0.55% 12 San Francisco Chronicle 339,430 370,345 -8.35% 13 Dallas Morning News 338,933 368,313 -7.98% 14 The Boston Globe 323,983 350,605 -7.59% 15 Star Tribune - Minneapolis, MN 322,360 345,130 -6.60% 16 The Star-Ledger - Newark, NJ 316,280 334,150 -5.35% 17 The Chicago Sun-Times 313,176 330,280 -5.18% 18 The Plain Dealer - Cleveland, OH 305,529 326,907 -6.54% 19 The Philadelphia Inquirer 300,674 322,362 -6.73% 20 Detroit Free Press 298,243 316,007 -5.62% 21 The Oregonian - Portland, OR 283,321 312,274 -9.27% 22 The Atlanta Journal-Constitution 274,999 308,944 -10.99% 23 The San Diego Union-Tribune 269,819 304,399 -11.36% 24 St. Petersburg Times 268,935 288,669 -6.84% 25 The Sacramento Bee 253,249 268,755 -5.77% 26 The Indianapolis Star 244,796 255,303 -4.12% 27 St. Louis Post-Dispatch 240,796 255,057 -5.59% 28 The Kansas City Star 239,358 252,785 -5.31% 29 The Orange County (CA) Register 236,270 250,724 -5.76% 30 The Mercury News - San Jose, CA 224,199 240,223 -6.67% -------- -------- ------ 15,075,353 15,913,598 -5.27% Mr. Montgomery, Star Tribune's CEO, said that with respect to the newspaper industry, print classified advertising dropped by more than 25% in the first half of 2008 alone, representing a $1.8 billion loss in revenue for domestic newspapers. The industry, he added, has suffered historic declines in circulation, which have not only resulted in decreased circulation revenue, but have also acted as a further catalyst for declines in advertising revenue. He noted that much of a newspaper's more profitable print advertising sales are tied to circulation, which advertisers use as a proxy for readership. As circulation has declined, newspapers have been compelled to charge less for these ads. Chandler Bigelow III, Tribune's senior vice president and chief financial officer, said that while the company's newspaper advertising revenue continues to be in line with other large metropolitan newspapers, newspaper advertising revenue generally is in significant decline, down industry-wide 15% to 20% in 2007 in major metropolitan markets, and down industry-wide nearly $2 billion, or 18%, in the third quarter of 2008. Gannett Co., Inc., which owns the U.S.'s most read newspaper, USA Today, and 84 other newspapers, said its publishing segment operating revenues were $1.4 billion for the quarter of 2008, compared with $1.7 billion in the fourth quarter of 2007, an 18.6% decline. Advertising revenues were $963.4 million compared with $1.2 billion in the fourth quarter of 2007. At USA TODAY, advertising revenues were 18.5% lower in the fourth quarter compared to the fourth quarter in 2007. Gannett said that its results were reflective of "unprecedented turmoil in the economies of both the U.S. and the UK and in the financial market", although the results of its broadcasting and digital segments were largely unchanged. New York Times Co. disclosed that in the fourth quarter of 2008 total revenues decreased 10.8% to $772.1 million, as advertising revenues decreased 17.6%. The New York Times publisher said revenues decreased mainly due to lower print advertising. "The disruptions of the global economy are affecting all businesses and industries, especially companies, such as ours, that generate a significant portion of their revenues from advertising," said Janet L. Robinson, NYT president and CEO. Cablevision Systems Corporation, which bought Newsday from Tribune Co. in July 2008, has yet to reveal its fourth quarter results on Feb. 23. It recorded $73,468,000 in revenues from its newspaper publishing group in three months ended Sept. 30, 2008. Other firms are scheduled to release their fourth quarter results on these dates: Company Earnings Release Date ------- -------------------- News Corporation 02/05/09 Washington Post Co. 02/25/09 Cablevision 02/23/09 A.H. Belo Corp. 02/17/09 Sun-Times Media Group 03/09/09 The McClatchy Company 02/05/09 Journal Register Co. 02/02/09 Gatehouse Media Inc. 03/09/09 American Media Inc. __/__/09 Firms that are privately held, like Hearst Corporation, owner of the San Francisco Chronicle, do not publicly disclose their financial results. Rising Internet Traffic Cutting Print Revenues Various reports say that newspaper revenues have been decreasing, as readers have shifted to the Web. According to Bloomberg, rising Internet use have hurt magazines and newspapers. While overall revenues fell, New York Times' Internet businesses, which include NYTimes.com, About.com, Boston.com and other company Web sites, increased 6.5% to $351.7 million in 2008 from $330.2 million in 2007, and Internet advertising revenues increased 9.3% to $308.8 million from $282.5 million. In total, Internet businesses accounted for 12.0% of the company's revenues in the fourth quarter versus 11.0% in the 2007 fourth quarter. Lee Enterprises Incorporated (NYSE: LEE), which runs 49 daily newspapers, including the St. Louis Post-Dispatch, said that Circulation revenues dropped 4.5% to $47.56 million. Combined print and online advertising revenue dropped 15.2% to $184.6 million, with retail advertising down 9.8%, and classified down 27.1%. More Writedowns While the Washington Post Co. (NYSE:WPO) has yet to reveal its quarterly results, it announced on Jan. 15 a regular quarterly dividend of $2.15 per share, payable on Feb. 6, 2009. On Jan. 23, Washington Post said it would take a $70 million impairment charge after concluding that the estimated fair value of its online lead generation business is less than its reported carrying value. Reuters notes that the Post is one of several U.S. newspaper publishers that have written down the value of their properties as advertising revenue shrinks. According to Reuters, The New York Times, Lee Enterprises (LEE.N) and McClatchy Co. (MNI.N) and other publishers have written down billions of dollars in the past several years. In fiscal 2008, Lee Enterprises recorded after-tax non-cash charges totaling $893.7 million to reduce the carrying value of goodwill, other assets and the company's investment in TNI Partners. On Jan. 28, American Media Operations, Inc., operating subsidiary of American Media Inc., leading publisher of celebrity journalism and health and fitness magazines in the U.S., said it is in the process of performing impairment testing of its tradenames and goodwill. AMOI expects to record impairment charges for its titles of between $200 million and $220 million with respect to certain of its tradenames and goodwill. Heavy Debt Burden, Liquidity Problems Aside from declining revenues, some of the newspaper publishers were highly leveraged, limiting their flexibility and ability to address liquidity constraints. At that time of its bankruptcy filing Tribune Co. owed $13 billion in total funded debt. Starting June 30, 2008, Star Tribune stopped making payments scheduled quarterly interest, which reached $20 million as of its bankruptcy petition in January 2009. While Star Tribune had $26.9 million in cash as of Dec. 31, 2008, its liabilities reached $661.1 million, including $392.5 million owed on its first lien debt and $96 million owed on its second loan debt, paling in comparison to assets of only $493.2 million. Lee Enterprises also is trying to renegotiate $306 million in debt that it assumed when it bought Pulitzer Inc. in 2005. Of that, $142.5 million is due in April and Lee's auditors have said Lee can't afford to pay it, the St. Louis Post-Dispatch said. GateHouse Media, Inc., which has 92 daily newspapers with total paid circulation of approximately 834,000, announced Jan. 28 that it is seeking to amend its $1.2 billion senior secured credit facility. The amendment would, among other things, allow the company to repurchase outstanding term loans under the facility at prices below par through a modified Dutch auction through December 31, 2011. The company is seeking the consent of the requisite lenders by 5:00 pm (Eastern Time) Monday, February 2, 2009, in order to effect the amendment American Media, publisher of celebrity journalism and health and fitness magazines including Star, Shape and the National Enquirer, made tender offers for $570 million of its outstanding senior subordinated notes, which comprise (i) $400,000,000 principal amount of 10.25% Series B Senior Subordinated Notes due 2009 and $14,544,000 aggregate principal amount of 10.25% Series B Senior Subordinated Notes due 2009, and (ii) $150,000,000 aggregate principal amount of 8 7/8% Senior Subordinated Notes due 2011 and $5,454,000 aggregate principal amount of 8 7/8% Senior Subordinated Notes due 2011. American Media, through its AMOI subsidiary will exchange those Notes with (a) $21,245,380 principal amount of 9% senior PIK notes due 2013, (b) $300,000,000 principal amount of the company's 14% senior subordinated notes due 2013, and (c) 5,700,000 shares of Media's common stock, representing 95% of American Media's outstanding shares of common stock. The offer expired Jan. 29. As of Jan. 9, AMOI has entered into agreements with holders of 81% of the outstanding aggregate principal amount of the 2009 Notes and 69% of the outstanding aggregate principal amount of the 2011 Notes. The tender offer conditioned upon, among other things, receipt of tenders and related consents by holders of at least 98% of each series of the Existing Notes. Pursuant to forbearance agreements, holders of the Existing Notes have agreed to forbear until 5:00 p.m., New York City time, on February 4, 2009, from exercising any remedies under the indentures governing the Existing Notes as a result of AMOI's. Sun-Times Media Group, Inc. (Pink Sheets: SUTM), which owns the Chicago Sun-Times, informed investors on Jan. 29 that an arbitrator has awarded CanWest Global Communications Corp., a Canadian media company, CN$51 million, exclusive of interest and costs, in connection with a dispute relating to CanWest's purchase of newspaper assets from Sun-Times Media in 2000. On Dec. 19, 2003, CanWest pursued arbitration, in connection with its claim that Sun-Times owed CN$84.0 million related to the transaction. As of Sept. 30, 2008, the company had a reserve established in respect of the arbitration in the amount of CN$15 million. A previously established escrow account funded by the company containing approximately CN$22 million may be available to pay any final arbitration award. The Chicago Tribune noted that as of Sept. 30, Sun-Times Media had cash of $99.8 million, but the company faces a number of tax and other liabilities. After a big write-down of intangible assets during the third quarter, Sun- Times' negative worth, or negative shareholder equity, widened to $321.7 million, the Chicago Tribune said. In Jan. 28, Washington Post said it's selling $400 million in fixed-rate notes at a price of 99.614% of par for an effective yield of 7.305% per annum. The ten-year notes will have a coupon of 7.25% per annum, payable semi-annually on February 1 and August 1, beginning August 1, 2009. The company intends to use the net proceeds from the sale of the notes to repay $400 million of notes that mature on February 15, 2009. Sale of Assets, Job Cuts to Stem Losses A.H. Belo's Mr. Decherd said in his Jan. 30 letter to employees that the decline in advertising revenues for the newspaper industry and all media persists, and that the key for the company is to generate and preserve cash. He stated that the company needs to reduce its workforce as the revenue trends do not support or require the same number of people the company has employed. The reduction will "probably be in the range of 500 jobs." He added that the company would suspend the A. H. Belo Savings Plan match and will cut reimbursements policies to employees. "Similarly, it is no longer reasonable for the Company to provide free parking in downtown Dallas," he said. A monthly charge of $40 will take effect May 1, 2009 for all downtown Dallas surface lots owned by the company. On Jan. 9, Hearst Corp. announced that it is offering for sale the Seattle Post-Intelligencer and its interest in a joint operating agreement under which the P-I and The Seattle Times are published. Hearst said that should a sale not occur within 60 days, it will pursue options, "including a move to a digital-only operation with a greatly reduced staff or a complete shutdown of all operations." "In no case will Hearst continue to publish the P-I in printed form following the conclusion of this process." The P-I, which Hearst has owned since 1921, has had operating losses since 2000. The P-I lost approximately $14 million in 2008 and its forecast anticipates a greater loss in 2009. Hearst also denied speculations it is interested in acquiring The Seattle Times. On Jan. 28, 2009, The New York Times Co., which also owns the International Herald Tribune and The Boston Globe, announced that it has retained Goldman, Sachs & Co. as its financial advisor to explore the possible sale of its 17.75% ownership interest in New England Sports Ventures, LLC. NESV owns the Boston Red Sox, Fenway Park and adjacent real estate, approximately 80 percent of New England Sports Network, the top rated regional cable sports network in the country delivered to more than four million homes throughout New England and nationally via satellite, and 50 percent of Roush Fenway Racing, a leading NASCAR team. Tribune Co., which is in the U.S. Bankruptcy Court for the District of Delaware to delever its balance sheet, is arranging the sale of its Chicago Cubs baseball team. Times Publishing Co., which publishes the St. Petersburg Times, one of the most respected regional newspapers in the U.S., is exploring the sale of Congressional Quarterly, Inc. Based in Washington, D.C., Congressional Quarterly publishes news and information on politics, public policy and legislative activity at the federal, state and local levels. The McClatchy Company, which has 30 daily newspapers, including The Miami Herald, The Sacramento Bee, and the Fort Worth Star- Telegram, said that it will suspend its quarterly dividend after paying the first quarter 2009 dividend for the foreseeable future in order to preserve cash for debt repayment. The first quarter 2009 dividend of nine cents per share is half the per share dividend paid in the 2008 first quarter. On Jan. 30, Editor & Publisher reported that the Journal Register Co. announced the sale of The Hershey (Pa.) Chronicle to The Sun in Hummelstown, Pa. On Jan. 7, Journal Register said it has signed an agreement with Central Connecticut Communications regarding a sale of The Bristol Press, The Herald of New Britain and The Sunday Herald Press from Journal Register Company. The sale includes the assets of the papers' web sites and of three nearby weeklies, the Wethersfield Post, the Newington Town Crier and the Rocky Hill Post. As of November 2008, JRC owned 22 daily newspapers and approximately 300 non-daily publications. Some Newspapers to Reach End According to a blog by Douglas A. McIntyre posted Jan. 11 at 24/7 Wall St., twelve major media brands are likely to close in 2009, as Journal Register and Gatehouse, and McClatchy have struggled. It noted that The Seattle Post-Intelligencer, Denver's Rocky Mountain News, The Miami Herald and the San Francisco Chronicle are on the block, and may be shut if no buyers emerge. The New York Daily News and The New York Observer are also at risk, according to the report. The United Press International Inc. reported Jan. 9 that Sun- Times Media said it would close 12 weekly newspapers to cut expenses as advertising revenues have fallen. The 12 suburban newspapers scheduled to close are part of 51 newspapers published by Pioneer Press, which the Sun-Times purchased in 1989. The newspapers, scheduled to fold Jan. 15, cover mostly the northwest suburbs of Chicago, Crain's Chicago Business reported Friday. According to CT Business Journal, Journal Register closed 16 newspapers in Connecticut in December. The papers affected include the Branford Review, Clinton Recorder, Hamden Chronicle, Milford Weekly, North Haven Post, Shelton Weekly, Stratford Bard, West Haven News, Wallingford Voice, East Haven Advertiser and others. Hanging In the Balance While Tribune Co., and Star Tribune have filed for bankruptcy, other newspaper publishers' fate are hanging in the balance. American Media's revolving facility, of which $60 million is outstanding and the term loan facility, of which $439.6 million is owed, both will mature on February 1, 2009 if the company has more than $25.0 million of the 10.25% Series B Senior Subordinated Notes due May 1, 2009 outstanding on February 1, 2009. According to Crain's New York, John Page, senior analyst at Moody's, said it was unclear what the banks would do with the company if an agreement couldn't be reached with bondholders. "It's a difficult environment to be selling assets," he said. In its form 10-Q for the third quarter of 2008, American Media Operations said if it is unable to extend or refinance the Notes, the 2006 Credit Agreement will likely mature early and the Company will not have sufficient funds to repay such indebtedness. "In such event, the Company may have to liquidate assets on unfavorable terms, or be unable to continue as a going concern, and incur additional costs associated with bankruptcy." Lee Enterprises' waiver of covenant conditions related to the $306 million Pulitzer Notes debt of its subsidiary St. Louis Post- Dispatch LLC expire Feb. 6, 2009. The Pulitzer Notes mature in April 2009. Lee says discussions with lenders continue. The struggles of the newspaper industry have also resulted to pulp- and paper-related bankruptcies. Paperboard and paper-based packaging Smurfit-Stone Corp., filed for Chapter 11 on Jan. 26, and Corp. Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Magazine printer, Quebecor World Inc., and pulp mill operator Pope & Talbot Inc., have also sought bankruptcy protection in Canada and the U.S. About New York Times The New York Times Co. operates as a diversified media company in the United States. It operates in two segments, News Media and About Group. The company was founded in 1896. 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. NEW YORK TIMES: Reports 10.8% Decrease in Q4 Revenues ----------------------------------------------------- The New York Times Company reported fourth-quarter 2008 earnings per share from continuing operations of $0.19, including $0.10 per share for severance costs and a non-cash charge totaling $0.07 per share for the write-down of assets, compared with $0.37 EPS in the fourth quarter of 2007, which included $0.07 per share for severance costs and non-cash charges totaling $0.07 per share for the write-down of assets. Fourth-quarter 2008 operating profit from continuing operations decreased to $63.3 million from $101.5 million in the 2007 fourth quarter. Excluding depreciation and amortization and the special items noted below, operating profit from continuing operations decreased to $118.5 million from $159.2 million in the 2007 fourth quarter. "The disruptions of the global economy are affecting all businesses and industries, especially companies, such as ours, that generate a significant portion of their revenues from advertising," said Janet L. Robinson, president and CEO. "In this time of unprecedented change, we are responding strategically and creatively to manage our businesses and prepare for our future, while preserving the flexibility to navigate this difficult period. You have seen that in our decisions to restructure our cost base, to preserve capital by reducing our dividend, and to improve our financial position by completing the transaction announced last week. And you see that daily in how we are responding to the present realities of our markets. "As the economy deteriorated in the quarter, advertisers significantly reduced their spending. After growing almost 15 percent in the first nine months of last year, digital advertising decreased 3.5 percent in the fourth quarter as online marketers cut back on display ads in response to worsening business conditions. Despite the deepening recession, our circulation revenues increased 3.7 percent as a result of higher prices at The New York Times, The Boston Globe and our smaller newspapers. This is a testament to the value our readers believe we bring to them. "Our cost performance was exceptional in the quarter, as operating costs fell 8.5 percent. For the year, operating costs dropped 4.7 percent or approximately $136 million, despite significantly higher newsprint prices. Earlier this month, we completed the closure of our retail and newsstand distribution business in the New York metropolitan area. This is expected to improve operating results by approximately $27 million on an annual basis, excluding one-time costs. Many other expense reduction initiatives, such as the consolidation of our Boston printing facilities, are planned for 2009. "As we look ahead, we believe advertisers will continue to be cautious with their budgets, particularly in the early part of this year. To date in January the rate of decline in print advertising revenue has accelerated from what we saw in December, while that of digital is similar to last month. During this difficult time in our business and the economy, executing well on our strategy of providing outstanding journalism, developing new revenue streams, restructuring our cost base and improving our financial flexibility will help us meet the challenges we face." Special Items Fourth-quarter 2008 results from continuing operations included: * A non-cash charge of $19.2 million ($10.7 million after tax, or $.07 per share) for the write-down of an intangible asset at The International Herald Tribune, whose results are included in The New York Times Media Group. Fourth-quarter 2007 results from continuing operations included: * A non-cash charge of $11.0 million ($6.4 million after tax, or $.04 per share) for the write-down of an intangible asset at the Worcester Telegram & Gazette, whose results are included in the New England Media Group, and * A non-cash charge of $7.1 million ($4.1 million after tax, or $.03 per share) for the write-down of our 49 percent investment in Metro Boston LLC, which publishes a free daily newspaper in the Greater Boston area. This charge is included in "Net income/(loss) from joint ventures" in our Condensed Consolidated Statements of Operations. These items total a loss of $18.1 million ($10.5 million after tax, or $.07 per share) in the fourth quarter of 2007. Comparisons Unless otherwise noted, all comparisons are for the fourth quarter of 2008 to the fourth quarter of 2007. The results of the Broadcast Media Group, which was sold in the second quarter of 2007, are reported within discontinued operations. This release includes non-GAAP financial measures, and the exhibits include a discussion of management's use of these non- GAAP financial measures and reconciliations to the most comparable GAAP financial measures. Fourth-Quarter Results from Continuing Operations Revenues Total revenues decreased 10.8 percent to $772.1 million from $865.8 million. Advertising revenues decreased 17.6 percent; circulation revenues increased 3.7 percent; and other revenues declined 2.5 percent. Revenues decreased mainly due to lower print advertising. Operating Costs Operating costs decreased 8.5 percent to $689.6 million from $753.2 million. Depreciation and amortization decreased 23.0 percent to $36.0 million from $46.7 million primarily because certain assets at The New York Times Media Group reached the end of their depreciation period during the first nine months of 2008. Severance costs were $24.1 million ($13.7 million after tax, or $.10 per share), which included $19.9 million for the closure of City & Suburban (C & S), the Company's retail and newsstand distribution subsidiary that was closed in early January. In the fourth quarter of 2007, the Company had $17.8 million ($10.1 million after tax, or $.07 per share) in severance costs. Excluding depreciation and amortization and severance costs, operating costs decreased 8.6 percent to $629.5 million from $688.8 million, mainly due to lower compensation costs and benefits expense. At year-end 2008, the number of full-time equivalent employees at the Company was down approximately 9 percent from the prior year. Newsprint expense increased 11.0 percent, stemming from a 33.3 percent increase in prices, offset in part by a 22.3 percent decrease in consumption. Fourth-Quarter Business Segment Results News Media Group Total News Media Group revenues decreased 11.1 percent to $742.2 million from $835.0 million. Advertising revenues decreased 18.4 percent, mainly due to weakness in print advertising at all of the Company's major properties. Circulation revenues increased 3.7 percent, primarily because of higher prices at each of the Company's media groups, partially offset by volume declines. Other revenues decreased 2.9 percent primarily due to lower direct mail advertising services and lower commercial printing revenues at the New England Media Group. Total News Media Group operating costs decreased 8.0 percent to $657.9 million from $714.9 million. Excluding depreciation and amortization and severance costs, operating costs decreased 8.1 percent to $603.3 million from $656.2 million, mainly as a result of the items noted in the operating costs section above. Operating profit for the News Media Group decreased 40.3 percent to $65.2 million from $109.1 million. Excluding special items, operating profit before depreciation and amortization decreased 28.7 percent to $114.8 million from $161.0 million. About Group Total About Group revenues decreased 2.9 percent to $29.8 million from $30.7 million, due to a decrease in display advertising. Total About Group operating costs increased 3.6 percent to $19.8 million from $19.1 million. Excluding depreciation and amortization, operating costs increased 8.9 percent to $16.6 million from $15.3 million, mainly because of investments in new revenue initiatives that resulted in higher marketing costs. Depreciation and amortization was lower, primarily because an asset reached the end of its amortization period in the second quarter of 2008. Operating profit declined 13.8 percent to $10.0 million from $11.6 million. Operating profit before depreciation and amortization decreased 14.6 percent to $13.2 million from $15.4 million, mainly due to lower display advertising revenue. Corporate Corporate costs were $11.8 million compared with $19.2 million in the prior-year fourth quarter mainly due to lower stock-based compensation and benefits expense. Other Financial Data Internet Revenues Internet businesses include NYTimes.com, About.com, Boston.com and other company Web sites. In the fourth quarter, the Company's Internet revenues decreased 2.9 percent to $92.5 million from $95.2 million in the fourth quarter of 2007, and Internet advertising revenues declined 3.5 percent to $81.9 million from $84.9 million. For the year, the Company's Internet revenues increased 6.5 percent to $351.7 million from $330.2 million in 2007, and Internet advertising revenues increased 9.3 percent to $308.8 million from $282.5 million. In total, Internet businesses accounted for 12.0 percent of the Company's revenues in the fourth quarter versus 11.0 percent in the 2007 fourth quarter. For the year, Internet businesses accounted for 11.9 percent of the Company's revenues versus 10.3 percent of total revenues in 2007. Joint Ventures Net income from joint ventures was $1.8 million in the fourth quarter of 2008 and $17.1 million for the full year of 2008 compared with a net loss from joint ventures of $10.6 million in the fourth quarter of 2007 and $2.6 million for the full year of 2007. In 2008, the paper mills in which the Company has equity interests benefited from higher paper prices. The third quarter of 2008 included a charge of $5.6 million and the fourth quarter of 2007 included a charge of $7.1 million for the write-down of the Company's 49 percent investment in Metro Boston LLC. Interest Expense-net Interest expense-net increased to $12.3 million from $10.9 million, primarily as a result of less capitalized interest. Income Taxes The Company had income tax expense of $25.1 million for the fourth quarter of 2008 and an income tax benefit of $5.7 million for the full year of 2008. In 2007, the Company had income tax expense of $27.4 million for the fourth quarter and $76.1 million for the full year. The Company's effective income tax rate was 47.4 percent in the fourth quarter and 8.0 percent for the full year of 2008 compared with 34.3 percent in the fourth quarter and 41.2 percent for the full year of 2007. The fourth-quarter effective income tax rate was unfavorably affected by non-deductible losses on investments in corporate- owned life insurance policies. For the full year, the effective income tax rate was unfavorably affected by non-deductible losses on investments in corporate-owned life insurance policies and a non-deductible goodwill impairment charge. Cash and Total Debt At the end of the quarter, cash and cash equivalents were approximately $57 million and total debt was approximately $1.1 billion. The Company's current sources of short-term funding are its revolving credit agreements under which it had approximately $380 million in borrowings outstanding at the end of the quarter. Capital Expenditures In the fourth quarter, total capital expenditures were approximately $32 million and for the full year, capital expenditures totaled approximately $127 million. Pension Obligations Due to significant declines in the equity markets in 2008, the Company's funded status of its qualified pension plans has been adversely affected. At the end of 2008, the Company's underfunded pension obligation is estimated to be approximately $625 million. Assuming the equity markets do not sufficiently recover, the discount rate does not increase and there is no further legislative relief, the Company will be required to fund this deficiency over a seven-year period. The Company expects there will be no contributions required in 2009 because of its pension funding credits. The Company will also continue to assess whether to make discretionary contributions after considering the funded status of its plans, movements in the discount rate, investment performance and other factors. Expectations For 2009, the Company expects depreciation and amortization to be $140 to $150 million, which includes accelerated depreciation of approximately $5 million related to the closing of its printing plant in Billerica, Mass. It projects capital expenditures to be approximately $80 million, including about $27 million for a plant consolidation and a systems project at the News Media Group. About New York Times The New York Times Co. operates as a diversified media company in the United States. It operates in two segments, News Media and About Group. The company was founded in 1896. 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. NEW YORK TIMES: Retains Goldman for Sale of Red Sox Stake --------------------------------------------------------- The New York Times Company has retained Goldman, Sachs & Co. as its financial advisor to explore the possible sale of the Company's 17.75% ownership interest in New England Sports Ventures, LLC. NESV owns the Boston Red Sox, Fenway Park and adjacent real estate, approximately 80% of New England Sports Network, the top rated regional cable sports network in the country delivered to more than four million homes throughout New England and nationally via satellite, and 50% of Roush Fenway Racing, a leading NASCAR team. The Times Company acquired its interest in NESV in February 2002. Interested parties should contact Gregory Lee at Goldman, Sachs & Co. (telephone 212-902-7584). About New York Times The New York Times Co. operates as a diversified media company in the United States. It operates in two segments, News Media and About Group. The company was founded in 1896. 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. NEW YORK TIMES: Settles Suit Filed by Gatehouse Media ----------------------------------------------------- GateHouse Media and The New York Times Company, parent of The Boston Globe and Boston.com, announced today that they have reached a settlement in the case of GateHouse Media Massachusetts I, Inc. v. The New York Times Company. Under the terms of the settlement, neither party paid damages or admitted any wrongdoing. Other terms agreed by the parties are: (1) Pursuant to discussions between appropriate technical personnel of the respective parties, GateHouse will implement one or more commercially reasonable technological solutions intended to prevent NYT's copying of any original content from GateHouse's Web sites and RSS feeds, including but not limited to its http://wickedlocal.com/Web sites, which NYT will not directly or indirectly circumvent. To the extent that the Solution(s) are ineffective, GateHouse may notify NYT in writing of the implementation of the Solution(s). If notification is received, NYT will acknowledge the notification and promptly refrain from any activity the Solution(s) was intended to prevent; (2) NYT will remove all GateHouse RSS feeds from the aggregation tool currently being used to copy and display GateHouse's original headlines and ledes on http://www.boston.com/yourtown Web sites, and will refrain from accessing the feeds for so long as GateHouse maintains any of the Solution(s); and (3) NYT will take reasonable commercial steps to ensure that all headlines and leeks originally published by GateHouse that are or have been existing and displayed on boston.com's yourtown Web sites, and all related source attributions, are removed from those Web sites and any related archives by no later than March 1, 2009. To the extent that such reasonable commercial steps are ineffective to remove the previously posted headlines and ledes, and GateHouse becomes aware of the presence of any such headlines and ledes still displayed on boston.com's yourtown Web sites, it may notify NYT in writing to demand the removal of the headlines and ledes. NYT will promptly take reasonable commercial steps to comply with those demands. Parties' Dispute GateHouse's lawsuit challenged the repeated conduct of defendant's boston.com since November 2008 in copying and displaying verbatim on boston.com's "YourTown" Web sites for the Boston suburbs of Needham, Newton and Waltham headlines and leading sentences from news articles taken from GateHouse's local newspapers and its hyper-local Web sites for each of those towns at WickedLocal.com. Boston.com has reproduced this information without GateHouse's authorization or consent, and has done so in a manner which confuses the public as to the original source of the information by passing off GateHouse's original content as its own and which completely relies on the expertise, experience, efforts, expenditures and resources of GateHouse. This is both copyright and trademark infringement, as well as unfair competition. The New York Times, in response, claimed that certain of GateHouse's own practices somehow qualify as copyright infringement. These in no way involve the predatory practice of copying a competitor's content on a daily basis to be offered as a substitute product to consumers and advertisers in the very same market, piggybacking on the competitor's resources, GateHouse said. GateHouse's President and Chief Operating Officer, Kirk Davis, said: "By trying to equate its conduct with legitimate and widespread linking practices which permeate the Internet, it is The New York Times' counterclaims that threaten those established practices as well as fair competition in online journalism. The simple reality is that The New York Times chose to disregard these principles with its serial copying and display of GateHouse's original content on the boston.com "YourTown" websites, which it has turned around and offered to readers in the same towns served by GateHouse's WickedLocal websites. We will defend these meritless counterclaims vigorously and consistent with controlling legal principles of fair use." About Gatehouse Media GateHouse Media, Inc. -- http://www.gatehousemedia.com/-- headquartered in Fairport, New York, is one of the largest publishers of locally based print and online media in the United States as measured by its 97 daily publications. GateHouse Media currently serves local audiences of more than 10 million per week across 21 states through hundreds of community publications and local Web sites. As of September 30, 2008, the company reported $1.34 billion in total assets and $1.38 billion in total liabilities, resulting in $34.1 million in stockholders' deficit. The company reported total revenues of $171.6 million in the quarter, an increase of 6.4% over the third quarter of 2007. About New York Times The New York Times Co. operates as a diversified media company in the United States. It operates in two segments, News Media and About Group. The company was founded in 1896. 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. NEWCASTLE INVESTMENT: Gets Continued Listing Notice from NYSE ------------------------------------------------------------- Newcastle Investment Corp. received on January 26, 2009, a notification from the New York Stock Exchange that the Company was not in compliance with one of the NYSE's continued listing standards, which requires that the average closing price of the Company's common shares equal at least $1.00 per share over a 30 consecutive trading-day period. Under NYSE rules, the Company has a period of six months to bring its average common share price above $1.00 per share in order to avoid the delisting of its common shares. The Company's common stock will continue to be listed on the NYSE during this interim period, subject to compliance with other NYSE requirements and the NYSE's right to reevaluate continued listing determinations. In accordance with the NYSE's rules, in order to maintain the listing of its common shares, the Company will notify the NYSE within 10 business days of receipt of the non-compliance notice, of its intent to cure this deficiency. The non-compliance notice pertains only to the Company's common shares and does not pertain to any series of the Company's preferred shares, which remain listed on the NYSE. About Newcastle Investment Newcastle Investment Corp. -- http://www.newcastleinv.com/-- invests in real estate debt and other real estate related assets. Newcastle is organized and conducts its operations to qualify as a real estate investment trust for federal income tax purposes. Newcastle is managed by an affiliate of Fortress Investment Group LLC, a global alternative asset manager with approximately $34.3 billion in assets under management as of September 30, 2008. NEXCEN BRANDS: BTMU Loan Amended; Interest on Class B Notes Cut --------------------------------------------------------------- NexCen Brands, Inc., entered into an amendment of its credit facility with BTMU Capital Corporation. The amendment reduces the interest rate on the Class B Notes, the outstanding balance for which total approximately $41.7 million, to 8% per year effective January 20, 2009, through July 31, 2011, the maturity date on the Notes. As a result of the interest rate change, the Company anticipates interest expense reductions of approximately $2.2 million in 2009, $2.8 million in 2010 and $1.5 million in 2011. Prior to the amendment, the interest rate on the Class B Notes was 12% from August 15, 2008, through July 31, 2009, then 15% from August 1, 2009, through maturity of the Notes. In addition to the change in interest rate on the Class B Notes, the amendment also gives the Company greater operating flexibility by: (i) reducing the debt service coverage ratio for 2009; (ii) allowing certain funds paid by supply vendors to be excluded from debt service obligations and capital expenditure limitations; (iii) narrowing the covenant causing a manager event of default upon NexCen filing a qualified financial statement to exclude the 2008 fiscal year; and (iv) eliminating the requirement for valuation reports for fiscal year 2008 unless requested by BTMUCC. Kenneth J. Hall, Chief Executive Officer of NexCen Brands, stated, "We are extremely pleased with the continued support of our lender. The amended terms of our credit facility with BTMUCC reduce our interest rate and annual interest expense through 2011. Importantly, with the divestitures of Waverly and Bill Blass last quarter, we have reduced the Company's debt by $34 million, or 24%, to approximately $142 million as of December 31, 2008. We anticipate a meaningful reduction in interest expense in 2009 based on the Company's reduced debt level, the reduced interest rate on the Class B Notes and the dramatic drop in LIBOR. We have made significant progress in our revised business strategy focusing on franchising and continue to strengthen the financial position of the Company." About NexCen Brands NexCen Brands Inc. (PINK SHEETS: NEXC.PK) -- http://www.nexcenbrands.com/-- acquires and manages global brands, generating revenue through licensing and franchising. The company own and license the Bill Blass and Waverly brands, well as seven franchised brands. Two franchised brands -- The Athlete's Foot and Shoebox New York -- sell retail footwear and accessories. Five are quick-service restaurants -- Marble Slab Creamery, MaggieMoo's, Pretzel Time, Pretzelmaker, and Great American Cookies. The company licenses and franchises its brands to a network of leading retailers, manufacturers and franchisees that generate $1.3 billion in retail sales in more than 50 countries around the world. The franchisees operate approximately 1,900 franchised stores. Franchisee support and training is provided at NexCen University, a state-of-the-art facility located in Atlanta. * * * The company believes that there is substantial doubt about its ability to continue as a going concern, and pending completion of an independent review, that this substantial doubt also may have existed at the time the company filed its 2007 10-K. The audit committee of the company's Board of Directors has retained independent counsel to conduct an independent review of the situation. The company has concluded that its 2007 financial statements should no longer be relied upon and no reliance should be placed upon KPMG's audit report dated March 20, 2008, or its report dated March 20, 2008, on the effectiveness of internal control over financial reporting as of Dec. 31, 2007. NexCen also announced that it is actively exploring all strategic alternatives to enhance its liquidity, including potential capital market transactions, the possible sale of one or more of its businesses, and discussions with the company's lender. In addition, the company will take immediate steps to reduce operating expenses. NORANDA ALUMINUM: Power Outage Cues S&P's Rating Cut to 'CCC+' -------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its ratings on Franklin, Tennessee-based Noranda Aluminum Holding Corp. and Noranda Aluminum Acquisition Corp. The corporate credit rating on Noranda Aluminum Holding was lowered to 'CCC+' from 'B'. All ratings remain on CreditWatch with negative implications where they were initially placed on Nov. 12, 2008. "The downgrade and continued CreditWatch listing follows the company's announcement that its smelter in New Madrid, Missouri experienced a power outage, affecting approximately 75% of the plant capacity," said Standard & Poor's credit analyst Sherwin Brandford. "While the company expects partial capacity to be phased back in as 2009 progresses, it does not expect full capacity to be restored for up to 12 months. In addition, the cost of the outage is yet to be determined." This, combined with S&P's expectation that the difficult operating conditions in the aluminum market are likely to persist during this period, leads us to expect the company's overall financial profile to weaken materially. Though S&P believes the company will likely seek to conserve liquidity by continuing to pay-in- kind (PIK) its $510 million notes due 2015 and $220 million notes due 2014, S&P believes its currently adequate liquidity position could deteriorate rapidly. In addition, by electing to continue to PIK its notes, the company's highly leveraged capital structure will become increasingly strained due to higher debt levels. In resolving S&P's CreditWatch listing, S&P will meet with management and review both the operational and financial impact that the reduced capacity relating to the smelter shut-down will have on the company and its liquidity position. NORTEL NETWORKS: 4-Man Panel Named; Sec. 341 Meeting on Feb. 19 --------------------------------------------------------------- Roberta DeAngelis, the Acting United States Trustee for Region 3, appointed four members to the Official Committee of Unsecured Creditors in the Chapter 11 cases of Nortel Networks Inc. and its debtor affiliates. The Creditors Committee members are: (1) The Bank of New York Mellon Attn: Martin Feig, V.P. 101 Barclay Street- 8 West New York, NY 10286 Phone: 212-815-5383 Fax: 732-667-4756 (2) Flextronics Corporation Attn: Terry Zale 305 Interlocken Pkwy. Broomfield, CO 80021 Phone: 720-251-5194 (3) Airvana, Inc. Attn: Jeffrey D. Glidden 19 Alpha Road Chelmsford, MA 01824 Phone: 978-250-2628 Fax: 978-250-3911 (4) Pension Benefit Guaranty Corporation Attn: Jennifer Messina 1200 K Street N.W., Washington DC 20005 Phone: 202-326-4000 ex 3209 Fax: 202-842-2643 Pursuant to Section 1103 of the Bankruptcy Code, the Creditors Committee may: -- consult with the Debtors concerning the administration of the bankruptcy cases; -- investigate the acts, conduct, assets, liabilities, and financial condition of the Debtors, their business operations and the desirability of the continuance of the business, and any other matter relevant to the case or to the formulation of a plan of reorganization for the Debtors; -- participate in the formulation of a plan, advise its constituents regarding the Creditors Committee's determinations as to any plan formulated, solicit votes accepting or rejecting the plan, and file with the Court the results of the solicitation; -- request the appointment of a trustee or examiner; and -- perform other services in the interest of its constituents. The Creditors Committee may retain counsel, accountants or other agents to represent or perform services for the panel. Sec. 341 Meeting on February 19 The U.S. Trustee's office in Wilmington also will convene a meeting of Nortel creditors on February 19, 2:00 P.M., at J. Caleb Boggs Federal Building, 2nd Floor, Room 2112, in Wilmington, Delaware. This is the first meeting required under Section 341(a) of the Bankruptcy Code in the Debtors' bankruptcy cases. Attendance by the Debtors' creditors at the meeting is welcome, but not required. The Sec. 341(a) meeting offers the creditors a one-time opportunity to examine the Debtors' representative under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. NYSE to Delist Nortel Stock In a January 23, 2009 regulatory filing with the U.S. Securities and Exchange Commission, the New York Stock Exchange Inc. relates that it intends to remove the entire class of common stock of Nortel Networks Corporation from listing and registration on NYSE at the opening of business on February 2, 2009. "The common stock is no longer suitable for continued listing and trading on [NYSE]. [NYSE's] action is being taken in view of the company's January 14, 2009 announcement that it, together with certain of its subsidiaries, voluntarily filed for creditor protection under the Companies' Creditors Arrangement Act (CCAA) in Canada as well as in the United States," NYSE said. NYSE has also noted that Nortel Networks is below compliance with its minimum share price standard. Nortel Networks has formally waived its right to a hearing on the delisting of the common stock. 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) NORTEL NETWORKS: Court Okays Hiring of Epiq as Notice Agent ----------------------------------------------------------- Nortel Networks Inc. and its debtor-affiliates obtained permission from the Hon. Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware to employ Epiq Bankruptcy Solutions, LLC, as their claims, noticing and balloting agent. The Debtors anticipate that a large number of creditors and other parties-in-interest in their bankruptcy cases may impose administrative and other burdens upon the Bankruptcy Court and the Clerk's Office. The Debtors believe Epiq's hiring will relieve the Court and the Clerk's Office of those burdens. As claims, noticing and balloting agent to the Debtors, Epiq will: (a) prepare and serve required notices in the Debtors' Chapter 11 cases, including: -- the notice under Section 341(a) of the Bankruptcy Code; -- the notice of bar date for filing claims against the Debtors; -- notice of hearings on a disclosure statement and confirmation of a plan of reorganization; and -- other miscellaneous notices to any entities, as the Debtors or the Court may deem necessary for an orderly administration of these bankruptcy cases. (b) within five business days after the mailing of a particular notice, file with the Clerk's Office a declaration of service that includes a copy of the notice involved, an alphabetical list of persons to whom the notice was served and the date and manner of service; (c) comply with applicable federal, state, municipal and local statutes, ordinances, rules, regulations, orders and other requirements; (d) promptly comply with further conditions and requirements as the Clerk's Office or Court may at anytime prescribe; (e) provide claims recordation services and maintain the official claims register; (f) provide balloting and solicitation services, including preparing ballots, producing personalized ballots and tabulating creditor ballots on a daily basis; (g) provide other noticing, disbursing and related administrative services as may be required from time to time by the Debtors; and (h) provide assistance with certain data processing and ministerial administrative functions, including the Debtors' Schedules of Assets and Liabilities and Statements of Financial Affairs and master creditor list, and the processing and reconciliation of claims. The Debtors propose to pay Epiq its fees and expenses upon submission of monthly invoices that will summarize the services for which compensation is sought. The Debtors seek that the fees and expenses of which Epiq incurred or will incur be treated as an administrative expense and will be paid without the need for Epiq to file any fee applications or otherwise seek Court approval. Daniel C. McElhinney, executive director of Epiq, assures the Court that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code and holds no interest adverse to the Debtors and their estates for matters on which it is to be employed. 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) NORTEL NETWORKS: Objections to Chapter 15 Petition Due Feb. 13 -------------------------------------------------------------- Ernst & Young Inc., as monitor and authorized foreign representative of Nortel Networks Corporation and certain of its affiliates in proceedings under the Companies' Creditors Arrangement Act pending in the Ontario Superior Court of Justice (Commercial List), filed petitions under Chapter 15 of the U.S. Bankruptcy Court in the U.S. Bankruptcy Court for the District of Delaware seeking: (i) recognition of the Canadian CCAA proceedings as foreign proceedings; and (ii) enforcement of the Ontario Court's Initial Order dated January 14, 2009 in the United States. Parties-in-interest may file and serve any objection to the Chapter 15 Petitions no later than Feb. 13, 2009, at 4:00 p.m. (EST), with: (1) Office of the Clerk of the Court 824 North Market Street, Third Floor Wilmington, Delaware 19801 (2) Allen & Overy LLP 1221 Avenue of the Americas New York, NY 10020 Attn: Ken Coleman (3) Buchanan Ingersoll & Rooney 1000 West Street, Suite 1410 Wilmington, Delaware 19801 The U.S. Bankruptcy Court will convene a hearing on the Chapter 15 Petitions on Feb. 20, 12:00 p.m. (EST), at 824 North Market Street, Fifth Floor, in Wilmington, Delaware. Mary F. Caloway, Esq., at Buchanan Ingersoll & Rooney, in Wilmington, Delaware, asserts that the Canadian Proceedings are entitled to recognition as foreign main proceedings under Chapter 15 of the Bankruptcy Code for these reasons: (1) The Canadian Proceedings are foreign proceedings within the meaning of Section 101(23) of the Bankruptcy Code, and are foreign main proceedings within the meaning of Section 1502(4) of the Bankruptcy Code, because the Canadian Proceedings are pending in the location of each member of the Canadian Nortel Group's center of main interest. (2) The Monitor is a person within the meaning of Section 101(41). (3) The Monitor is a foreign representative within the meaning of Section 101(24). (4) The Chapter 15 Petitions were filed in accordance with Section 1504 with respect to each member of the Canadian Nortel Group. (5) The Chapter 15 Petitions meet the requirements of Section 1515 of the Bankruptcy Code with respect to each member of the Canadian Nortel Group. Venue is proper in the District of Delaware, Ms. Caloway avers. The Canadian Nortel Group's principal asset in the United States is NNL's stock in NNI, a Delaware corporation and a wholly owned subsidiary of NNL. Without the Bankruptcy Court's recognition of the foreign main proceedings, the Canadian Nortel Group will be unable to complete the restructuring of its business, Ms. Caloway says. The Monitor obtained permission from the Canadian Court to apply for recognition of the Applicants' insolvency proceedings as "foreign main proceedings" in the United States under Chapter 15. "All courts, tribunals, regulatory and administrative bodies are respectfully requested to make such orders and to provide such assistance to the Applicants and to the Monitor, as an officer of this Court, as may be necessary or desirable to give effect to this order, to grant representative status to the Monitor in any foreign proceeding or to assist the Applicants and the Monitor and their respective agents in carrying out the terms of this order," the Canadian Court noted in its January 14, 2009 Initial Order. The Canadian Court has also issued an order recognizing the proceedings commenced by the U.S.-based Nortel companies under Chapter 11 of the Bankruptcy Code as "foreign proceedings." Honorable Justice Morawetz recognized the automatic stay in effect on the Nortel companies in the U.S. proceedings pursuant to Section 362 of the Bankruptcy Code. "Such stay of proceedings shall be in full force and effect in Canada as if such stay of proceedings had been ordered by this Court," Honorable Justice Morawetz held. Meanwhile, the Nortel Companies sought and obtained approval from both the Canadian and the U.S. Bankruptcy Courts to implement a set of protocol to govern and facilitate the administration of cross border matters among the U.S. Debtors and the Canadian Debtors. Nortel Vice-President John Doolittle asserts that the protocol will, among other things, promote orderly and efficient administration of the Applicants' cases filed before the Canadian Court as well as those of their U.S.-based affiliates before the U.S. Bankruptcy Court. "The cross-border insolvency protocol establishes a protocol for communication and cooperation between the Canadian and U.S. Courts while confirming their independence. The protocol establishes procedures for filing the materials, joint hearings and the retention and compensation of professionals in Canada and the U.S.," Mr. Doolittle says. The protocol allows the Canadian Court and the U.S. Bankruptcy Court to: (1) communicate with one another with respect to any procedural matter relating to the Applicants' CCAA Insolvency Proceedings; (2) coordinate activities in the Insolvency Proceedings so that the subject matter of any particular action, lawsuit, request, application, contested matter or other proceeding is determined in a single court; and (3) conduct hearings with respect to any cross-border matter or the interpretation and implementation of the protocol where both consider that a joint hearing is necessary or advisable. A full-text copy of the Nortel Cross-Border Insolvency Protocol is available without charge at: http://bankrupt.com/misc/NortelCross-BorderProtocol.pdf 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) NORTEL NETWORKS: Seeks to Hire Morris Nichols as Delaware Counsel ----------------------------------------------------------------- Nortel Networks Inc. and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the District of Delaware to employ Morris, Nichols, Arsht & Tunnell LLP, as their Delaware and general bankruptcy counsel effective as of the Petition Date. The Debtors selected Morris Nichols because of the firm's specialized knowledge of bankruptcy laws and procedures in Delaware. As the Debtors' Delaware bankruptcy counsel, Morris Nichols is expected to: (1) represent the Debtors, provide the Debtors advice, and prepare legal papers on behalf of the Debtors in the areas of debtor-in-possession, corporate law, real estate employee benefits, business and commercial litigation, tax, debt, restructuring, bankruptcy and asset dispositions; (2) protect and preserve the Debtors' estates by prosecuting actions on the Debtors' behalf, defending any actions commenced against them, conducting negotiations concerning litigation involving the Debtors, and filing objections to claims asserted against their estates; (3) prepare or coordinate preparation, on behalf of the Debtors as debtors-in-possession, of necessary motions, applications and other legal papers in connection with the administration of their Chapter 11 cases; (4) counsel the Debtors with regard to their rights and obligations as debtors-in-possession; and (5) provide other legal services. In return for its services, Morris Nichols will be paid at these hourly rates: Partners $525 - $725 Associates $265 - $415 Paraprofessionals $190 - $205 Case clerks $125 Morris Nichols will also be reimbursed for actual and necessary expenses it incurred and will incur in connection with its employment. The Firm acknowledges that it received a $300,000 retainer from the Debtors prior to the Petition Date. Derek Abbott, Esq., a partner at Morris Nichols, assures the Court that his firm is a "disinterested person" under Section 101(14) of the Bankruptcy Code. Mr. Abbott declares that his firm does not have interests adverse to the Debtors' estate or their creditors. 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) NOVADEL PHARMA: NYSE Alternext Extends Compliance Deadline ---------------------------------------------------------- NovaDel Pharma Inc. received notice from the NYSE Alternext US LLC that the NYSE Alternext US has granted the Company an extension until April 17, 2009 to regain compliance with Section 1003(a)(iv) of the NYSE Alternext US Company Guide. The Company's deadline to regain compliance with Sections 1003(a)(i), (ii) and (iii) of the NYSE Alternext US Company Guide remains November 16, 2009. On May 14, 2008, the Company received notice from the NYSE Alternext US indicating that the Company was not in compliance with Section 1003(a)(iii) and Section 1003(a)(iv) of the NYSE Alternext US Company Guide. On August 6, 2008, the Company issued a press release to announce that the NYSE Alternext US has accepted the Company's plan to regain compliance with continued listing standards of the NYSE Alternext US Company Guide. The Company's plan was submitted on June 12, 2008. On June 27, 2008, the Company received notice from the NYSE Alternext US indicating that the Company was not in compliance with Section 1003(a)(ii) of the NYSE Alternext US Company Guide. On September 16, 2008, the Company received notice from the NYSE Alternext US indicating that the Company was not in compliance with Section 1003(a)(i) of the NYSE Alternext US Company Guide. The Company will be subject to periodic review by the NYSE Alternext US staff during the extension period. Failure to make progress consistent with the plan or to regain compliance with the continued listing standards by the end of the extension period could result in the Company being delisted from the NYSE Alternext US. Consistent with the plan submitted to the NYSE Alternext US, the Company continues to pursue licensing opportunities and other strategic partnerships to fund its current and future development activities, while maintaining tight control over its expenditures. However, there can be no assurance that the Company will be able to make progress consistent with the Company's plan to regain compliance with NYSE Alternext US's continued listing standards in a timely manner. Based in Flemington, New Jersey, NovaDel Pharma Inc. (NYSE Alternext: NVD) -- http://www.novadel.com/-- is a specialty pharmaceutical company developing oral spray formulations for a broad range of marketed drugs. J.H. Cohn LLP, in Roseland, N.J., expressed substantial doubt about NovaDel Pharma Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm pointed to the company's recurring losses from operations and negative cash flows from operating activities. OCALA NATIONAL: Florida Bank Fails & FDIC Named as Receiver ----------------------------------------------------------- Ocala National Bank based in Ocala, Florida, was closed on Fri., Jan. 30, 2009, by the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with CenterState Bank of Florida based in Winter Haven, Florida, to assume all of the deposits of the Ocala National Bank. The four locations of Ocala National will reopen on Mon., Feb. 2, 2009, as branches of CenterState. Depositors of the failed bank will automatically become depositors of CenterState Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. As of December 31, 2008, Ocala National Bank had total assets of $223.5 million and total deposits of $205.2 million. In addition to assuming all of the failed bank's deposits for a premium of 1.7 percent, CenterState agreed to purchase approximately $23.5 million in assets. The FDIC will retain the remaining assets for later disposition. Ocala National also had approximately $17.2 million in brokered deposits that are not part of today's transaction. The FDIC will pay the brokers directly for the amount of their insured funds. Customers who have placed money with these brokers should contact them directly for more information. The transaction is the least costly resolution option, and the FDIC estimates the cost to its Deposit Insurance Fund will be $99.6 million. Ocala National is the sixth FDIC-insured institution to be closed this year. Ocala National Bank is the first bank to fail in Florida since Freedom Bank, Bradenton, on October 31, 2008. OPPENHEIMER HOLDINGS: Moody's Lowers Corp. Family Rating to 'B2' ---------------------------------------------------------------- Moody's Investors Service downgraded to B2 from B1 the corporate family rating of Oppenheimer Holdings, Inc., and E.A. Viner International Co., Oppenheimer's US subsidiary. The rating outlook is negative. This concludes the rating review commenced on October 31, 2008. According to Moody's, the principal reason for the downgrade is the weak operating performance of the company over the last several quarters, and the resultant weakening in its most important credit metrics. Specifically, Oppenheimer's core EBITDA for 2008, as calculated by Moody's, was a negative $7 million, reflecting both a very challenging operating environment and a higher expense base following the acquisition of CIBC's US Capital Markets business early in 2008. During its rating review, Moody's evaluated Oppenheimer's prospects for maintaining its cash flow leveraged (Debt/Core EBITDA) at 5x or below. Oppenheimer has reduced its long-term indebtedness by $15 million in the fourth quarter of 2008 and is likely to reduce its run-rate of expenses in 2009, including both company-wide compensation and technology-related expenses stemming from the aforementioned acquisition. Nonetheless, the challenging operating environment makes it unlikely that Oppenheimer will be able to generate sufficient levels of earnings to maintain cash- flow leverage at under 5x. Specifically, the market-driven decline in assets under management and a sharp decline in customer margin loans (a trend being observed at most retail brokers), should continue to weigh negatively on asset management and interest revenue. Similarly, depressed levels of deal-making activity among small-cap and middle-market firms -- Oppenheimer's specialty -- make the outlook for the company's investment banking and capital markets segments challenging. On the positive side, Oppenheimer was able to renegotiate its leverage covenants in the fourth quarter which provides much- needed financial flexibility going forward. The company's credit profile is supported by its Private Client franchise, which remains relatively healthy, albeit affected by the cyclical headwinds in the equity markets. Also, Moody's noted that Oppenheimer's adequate liquidity profile, liquid balance sheet and reasonable tangible equity cushion are factors supporting the B2 corporate family rating. The rating outlook is negative reflecting the challenging operating environment faced by the company. Additionally, the uncertainty around the ultimate resolution of the pending regulatory complaint against Oppenheimer in the state of Massachusetts in relation to its auction-rate securities sales practices is a potential risk to Oppenheimer's liquidity or capital adequacy that would be negative for the rating. The last rating action on Oppenheimer was on October 31, 2008 when Moody's placed the company's corporate family rating on review for a possible downgrade. Oppenheimer Holdings, Inc. is a Canadian holding company that operates a regulated U.S. broker-dealer and reported net loss of $21 million in 2008. These ratings were downgraded: Oppenheimer Holdings, Inc.: * Corporate Family Rating to B2 from B1 E.A. Viner International Co.: * $48 million seven year bank facility to B2 from B1 ORLEANS HOMEBUILDERS: Gets Feb. 6 Waiver Under Credit Facility -------------------------------------------------------------- Orleans Homebuilders, Inc., received a limited waiver from its lenders under the Company's Second Amended and Restated Revolving Credit Line Agreement. The effect of this waiver is to provide a period during which certain covenants in the Credit Facility are waived through and including February 6, 2009, which includes a waiver of a breach of a covenant related to the Company's outstanding borrowings exceeding its then available borrowing base. The Company has been engaged in discussions with its lenders regarding an amendment to the Credit Facility and has agreed in principal with certain lenders to the terms of such an amendment. The terms agreed upon in principal will have the effect of increasing the Company's ability to borrow under the Credit Facility and will modify certain covenants through maturity. Currently, the Company anticipates completing and executing the formal documentation for that amendment prior to the termination of the waiver period. While the Company currently anticipates that the formal documentation for the amendment will be completed and executed prior to the termination of the waiver period, there can be no assurance that the Company will be able to do so or be able to do so on terms acceptable to the Company. Jeffrey P. Orleans, Chief Executive Officer, stated that "The current homebuilding environment is a challenging one; however, we are managing through it. Thanks to the support of our lender group, we obtained this limited waiver and are in the process of completing an amendment which will assist us in managing our business appropriately." The Company currently anticipates having its second quarter earnings call and filing its Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2008 on or before Monday, February 16, 2009. A formal announcement of the second quarter earnings call date and time will follow. About Orleans Homebuilders, Inc. Orleans Homebuilders, Inc. -- http://www.orleanshomes.com-- develops, builds and markets high-quality single-family homes, townhouses and condominiums. It has operations in Southeastern Pennsylvania; Central and Southern New Jersey; Orange County, New York; Charlotte, Raleigh and Greensboro, North Carolina; Richmond and Tidewater, Virginia; Chicago, Illinois; and Orlando, Florida. The Company's Charlotte, North Carolina operations also include adjacent counties in South Carolina. Orleans Homebuilders, Inc.'s balance sheet at Sept. 30, 2008, showed total assets of $668.4 million, total liabilities of $607.4 million and stockholders' equity of about $64 million. For three months ended Sept. 30, 2008, the company posted net loss of $21.9 million compared with net loss of $2.0 million for the same period in the previous year. As of Sept. 30, 2008, the company had $29,344 of borrowing capacity under its secured revolving credit facility, subject to borrowing base availability. At Sept. 30, 2008, the company had borrowings in excess of availability of $6,487. In connection with entering into its Second Amended Credit Agreement, the company made payments on its credit facility of $19,000, giving the company availability of $12,513 immediately after these net repayments. A majority of its debt is variable rate, based on the 30-day LIBOR rate, and therefore, the company is exposed to market risk in connection with interest rate changes. At Sept. 30, 2008, the 30-day LIBOR rate of interest was 3.92625%. The LIBOR rate has since decreased and as of Oct. 31, 2008, was 2.58125%. OSHKOSH CORPORATION: Moody's Lowers Corp. Family Rating to 'B2' --------------------------------------------------------------- Moody's Investors Service downgraded the ratings of Oshkosh Corporation -- Corporate Family and Probability of Default Rating to B2 from Ba3 and the rating for the senior secured bank credit facility to B2 from Ba3. The company's speculative grade liquidity rating is lowered to SGL-3 from SGL-2. These rating actions follow the company's recent announcement reducing its fiscal 2009 (ending September 2009) outlook for several of its businesses and that the company will need to seek financial covenant relief under its credit agreements. Oshkosh's ratings remain under review for possible downgrade pending resolution of the negotiations with its banks. The downgrade reflects an expectation of further erosion in Oshkosh's credit metrics due to deterioration across several of the company's business units, with the access equipment business being the most severely affected. The global construction industry, the main driver of Oshkosh's access equipment unit, is undergoing a severe contraction and Moody's believes that it will remain weak at least through 2009. Operating margins within that unit are under pressure due to reduced demand, higher raw material costs, and adverse product mix. Oshkosh's commercial segment, which produces vehicle bodies such as concrete mixers and waste removal trucks, is also being negatively impacted by softening demand for its products due to the economic slowdown in North America and Western Europe. The company's defense unit and its fire and emergency businesses have not been as adversely impacted as the access equipment and commercial businesses. The company is experiencing lower margins on contracts for Department of Defense tactical vehicles and lower margins from a weaker product mix in the fire and emergency segment, which could be stressed further from smaller municipal government budgets. Oshkosh is pursuing restructuring initiatives and working capital improvements, attempting to minimize the negative impact of this downturn on its operating margins and cash generation. The company has announced staffing reductions totaling 7% of its workforce, which is on top of a 10% reduction announced earlier in 2008, and is closing underutilized facilities. Notwithstanding these efforts, Oshkosh's operating performance is likely to trend towards credit metrics that were previously identified by the rating agency as being potentially in-line with a lower rating. These metrics include debt/EBITDA over 5.0x and EBIT/interest expense below 2.0x (all ratios adjusted per Moody's methodology). Moody's believes that Oshkosh will continue to face a difficult economic environment through 2009 and that for the foreseeable future the company's credit metrics are unlikely to support a rating higher than a B2 corporate family rating. Moody's lowered Oshkosh's speculative grade liquidity rating to SGL-3 from SGL-2 due to the erosion of the company's liquidity profile resulting from the business deterioration. Cash generation will be below Moody's prior expectations and the company has indicated that it could be in violation of a financial covenant beginning at the end of 2Q09 (March 31, 2009). Moody's notes that Oshkosh is presently negotiating with its bank group for financial covenant relief. As of December 31, 2008 the company had approximately $260 million of cash balances and no outstanding balances under its $550 million revolving credit facility. Moody's review is focusing on the company's ability to negotiate financial covenant relief with its bank group and the resulting impact on the company's liquidity profile. The review will consider the company's ability to implement restructuring actions to enhance operating cash flow, and its ability to retaining access to its $550 million revolving credit facility and maintain adequate headroom under revised covenants. These ratings/assessments were affected by this action: -- Corporate family rating lowered to B2 from Ba3; -- Probability of default rating lowered to B2 from Ba3; and, -- $3.25 billion (originally $3.65 billion) first lien senior secured bank credit facility lowered to B2 (LGD3, 45%) from Ba3 (LGD3, 49%). The company's speculative grade liquidity rating lowered to SGL-3 from SGL-2. The last rating action was on November 4, 2008 at which time Moody's affirmed the Ba3 corporate family rating, but changed the outlook to negative from stable. Oshkosh Corporation, headquartered in Oshkosh, Wichita, is a leading designer, manufacturer and marketer of access equipment including aerial work platforms and telehandlers and a broad range of specialty vehicles and vehicle bodies. Last twelve month revenues through December 31, 2008 approximated $7.1 billion. OSHKOSH CORP: S&P Downgrades Corporate Credit Rating to 'B' ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Oshkosh Corp., including the corporate credit rating to 'B' from 'BB-', and placed the ratings on CreditWatch with negative implications. At the same time, S&P lowered the issue-level rating on Oshkosh's senior secured credit facilities to 'B+' (one notch above the corporate credit rating) from 'BB+', and placed the rating on CreditWatch with negative implications. S&P revised the recovery rating on the senior secured facilities to '2' from '1', indicating the expectation of substantial (70%-90%) recovery in the event of a payment default. The company had total balance sheet debt of about $2.7 billion at Dec. 31, 2008. "The downgrade reflects the company's weaker-than-expected operating performance and its announcement that it will seek to amend financial covenants under its credit facility," said Standard & Poor's credit analyst Dan Picciotto. In order to obtain covenant relief, the company is likely to experience higher interest costs which would further weaken credit measures. The ratings reflect the Oshkosh, Wisconsin-based company's highly leveraged financial profile, which more than offsets its leading business positions in key segments of the specialty vehicle market and good product and end market diversity. Oshkosh is a leading designer, manufacturer, and marketer of a broad range of specialty commercial, fire and emergency, and military vehicles. The company maintains leadership positions in heavy-duty rescue vehicles, severe-duty tactical trucks, custom and commercial pumpers, severe-duty plow and snow removal vehicles, concrete mixers, refuse truck bodies, and tow trucks. It is the also the world's largest aerial work platform manufacturer. As a result of the JLG acquisition in late 2006, Oshkosh expanded its product, end-market, and geographic diversity. The company generated revenue by segment as follows through in fiscal 2008: access equipment (43%), defense (26%), fire and emergency (17%), and commercial (14%). Oshkosh's operating margin (before depreciation and amortization) is likely to fall below the approximate 10% level achieved in the trailing 12 months in conjunction with anticipated lower sales volumes in fiscal 2009. The weaker global economic environment has had a pronounced effect on the company's access equipment segment whose sales decreased 40% in the fiscal first quarter. The defense segment may provide some offset to this weakness but overall results are expected to be meaningfully lower. Standard & Poor's views Oshkosh financial risk profile as highly leveraged. Oshkosh's debt (adjusted for operating leases and postretirement benefit obligations) to EBITDA was about 4.2x and funds from operations to adjusted debt was about 13% at Dec. 31, 2008. However, S&P expects these measures to deteriorate in the coming year as worsening operating performance is not expected to be fully offset by debt repayments. In resolving the CreditWatch S&P will monitor developments related to the company's plan to seek an amendment to financial covenants from lenders. If Oshkosh is able to receive adequate relief from lenders in a timely fashion, S&P would expect to affirm the ratings. If the company is delayed in amending its covenants or if S&P considers relief to be inadequate, S&P could lower the ratings further. PAETEC HOLDING: Wayzata Discloses 8.6% Equity Stake --------------------------------------------------- In a regulatory filing with the Securities and Exchange Commission, 2 companies disclosed that they may be deemed to beneficially own shares of companies PAETEC Holding Corp.'s common stock: Shares Beneficially Company Owned Percentage ------- ------------ ---------- Wayzata Investment Partners LLC 12,380,643 8.6% Patrick J. Halloran 12,380,643 8.6% The number of shares of the company's common stock outstanding on Nov. 7, 2008 was 144,024,837. A full-text copy of the SCHEDULE 13G is available for free at http://ResearchArchives.com/t/s?38ce Headquartered in Fairport, New York, PAETEC Holding Corp. (NASDAQ GS: PAET) -- http://www.paetec.com/-- provides large, medium-sized and, to a lesser extent, small business end-user customers in metropolitan areas with a package of integrated communications services that includes local and long distance voice, data, and broadband Internet access services. PAETEC Holding had approximately 3,900 employees as of March 1, 2008. As of March 1, 2008, excluding the effect of the McLeodUSA merger, PAETEC Holding had in service 124,261 digital T1 transmission lines, which represented the equivalent of 2,982,264 telephone lines, for over 30,000 business customers in a service area encompassing 53 of the top 100 metropolitan statistical areas. * * * As reported in the Troubled company Reporter on Aug. 12, 2008 Standard & Poor's Rating Services revised its outlook on Fairport, N.Y.-based competitive local exchange carrier (CLEC) PAETEC Holding Corp. to stable from positive following the company's announcement that 2008 revenue and EBITDA would fall short of its original guidance. S&P affirmed all ratings, including the 'B' corporate credit rating. Total operating lease-adjusted debt is approximately $1.2 billion. PAETEC Holding Corp. still carries Moody's Investors Service's Caa1 senior unsecured debt rating assigned on June 21, 2007. PARADISE BUSINESS: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Paradise Business Services, LLC d/b/a Allegra Print & Imaging 2502 W. 15th Street Panama City, FL 32401 Bankruptcy Case No.: 09-50029 Chapter 11 Petition Date: January 23, 2009 Court: United States Bankruptcy Court Northern District of Florida (Panama City) Debtor's Counsel: Louis L. Long, Jr., Esq. Chesser & Barr, P.A. 1201 Eglin Parkway Shalimar, FL 32579 Tel: (850) 651-9944 Fax: (850) 651-9867 Email: long@chesserbarr.com Total Assets: $434,042 Total Debts: $1,185,511 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flnb09-50029.pdf The petition was signed by Jerome C. Pariseau, Managing Member of the company. PFF BANCORP: Tontine Financial, et. al. Disclose No Equity Stake ---------------------------------------------------------------- In a regulatory filing with the Securities and Exchange Commission 4 companies disclosed that they may be deemed to beneficially own no shares of PFF Bancorp, Inc.' common stock, $0.01 par value. Shares Beneficially Company Owned Percentage ------- ------------ ---------- Tontine Financial Partners, L.P. 0 0% Tontine Management, L.L.C. 0 0% Tontine Overseas Associates, L.L.C. 0 0% Jeffrey L. Gendell 0 0% The company had 22,625,261 shares of common stock, par value $0.01 per share, outstanding as of Oct. 31, 2008. A full-text copy of the SCHEDULE 13G/A is available for free at http://ResearchArchives.com/t/s?38d9 PFF Bancorp Inc. -- https://www.pffbank.com -- operates a community bank provides an array of financial services. PFF Bancorp, Inc. and its debtor-affiliates files for Chapter 11 protection on Dec. 5, 2008, (Bankr. D. Del. Case No.: 08-13127 to 08-13131) Paul Noble Heath, Esq. at Richards, Layton & Finger PA represents the Debtor in their restructuring efforts. Kurtzman Carson Consultants LLC serves as the Debtors' Claims Agent. When they filed for protection from their creditors, the Debtors listed total assets of $7,779,964 and estimated liabilities of $131,730,000. PHENIX CFO: Moody's Downgrades Ratings on Debt Instruments ---------------------------------------------------------- Moody's Investors Service announced that it has downgraded debt instruments issued by Phenix CFO Ltd: EUR 120,000,000 Credit Facility provided by Natixis -- Current Rating: Baa1, on review for possible downgrade -- Prior Rating: A3, on review for possible downgrade EUR 60,000,000 Class S Floating Rate Notes due 2013 -- Current Rating: Baa1, on review for possible downgrade -- Prior Rating: A3, on review for possible downgrade EUR 24,000,000 Class M1 Floating Rate Notes due 2013 -- Current Rating: B2, on review for possible downgrade -- Prior Rating: Ba1, on review for possible downgrade EUR 15,000,000 Class M2 Floating Rate Notes due 2013 -- Current Rating: Caa2, on review for possible downgrade -- Prior Rating: Ba3, on review for possible downgrade EUR 21,000,000 Class M3 Floating Rate Notes due 2013 -- Current Rating: Ca, on review for possible downgrade -- Prior Rating: Caa1, on review for possible downgrade Originally rated on 10 February 2006, Phenix CFO Ltd is a collateralized fund obligation backed by equity interests in a diversified fund of hedge funds. The fund is managed by Allianz Alternative Asset Management (formerly AGF Alternative Asset Management S.A.). The last rating action on the affected securities was on December 22, 2008 when several debt tranches were downgraded and all debt tranches remained on review for possible downgrade. The rating actions reflect concern over the vehicle's ability to liquidate portfolio assets under stressed market conditions within the covenanted timeframe. Moody's incorporated an increase in suspensions and gating of redemptions within hedge funds at the underlying portfolio level into its rating analysis. A negative annual drift of 5% was utilized to reflect the recent downward trend in the returns of portfolios of hedge funds. A single factor volatility assumption of 12% was used to simulate the NAV process along with the standard volatility stresses as described in the rating methodology listed below. PHH ALTERNATIVE: Moody's Downgrades Ratings on 34 Tranches ---------------------------------------------------------- Moody's Investors Service has downgraded 34 tranches from 3 PHH deals. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, Alt-A mortgage loans. The actions are triggered by rapidly increasing delinquencies, higher severities, slower prepayments and mounting losses in the underlying collateral. Additionally, the continued deterioration of the housing market has also contributed to the increased loss expectations for Alt-A pools. The actions listed below reflect Moody's updated expected losses on the Alt-A sector announced in a press release on January 22, 2009, and are part of Moody's on- going review process. Moody's final rating actions are based on current ratings, level of credit enhancement, collateral performance and updated pool- level loss expectations relative to current level of credit enhancement. Moody's took into account credit enhancement provided by seniority, cross-collateralization, excess spread, time tranching, and other structural features within the senior note waterfalls. Loss estimates are subject to variability and are sensitive to assumptions used; as a result, realized losses could ultimately turn out higher or lower than Moody's current expectations. Moody's will continue to evaluate performance data as it becomes available and will assess the pattern of potential future defaults and adjust loss expectations accordingly as necessary. Complete rating actions are: Issuer: PHH Alternative Mortgage Trust, Series 2007-1 -- Cl. I-A-1, Downgraded to B3; previously on 02/07/07 Assigned Aaa -- Cl. I-A-2, Downgraded to Caa1; previously on 02/07/07 Assigned Aaa -- Cl. I-A-3, Downgraded to Caa3; previously on 02/07/07 Assigned Aaa -- Cl. I-M-1, Downgraded to C; previously on 02/07/07 Assigned Aa2 -- Cl. I-M-2, Downgraded to C; previously on 04/29/08 Downgraded to Baa2 -- Cl. I-M-3, Downgraded to C; previously on 04/29/08 Downgraded to B1 and Placed Under Review for Possible Downgrade -- Cl. I-M-4, Downgraded to C; previously on 04/29/08 Downgraded to Ca Issuer: PHH Alternative Mortgage Trust, Series 2007-2 -- Cl. 1-A-1, Downgraded to Baa3; previously on 05/09/07 Assigned Aaa -- Cl. 1-A-2, Downgraded to B2; previously on 05/09/07 Assigned Aaa -- Cl. 1-A-3, Downgraded to B3; previously on 05/09/07 Assigned Aaa -- Cl. 1-A-4, Downgraded to B3; previously on 05/09/07 Assigned Aaa -- Cl. 1-A-5, Downgraded to Caa3; previously on 05/09/07 Assigned Aaa -- Cl. 2-A-1, Downgraded to B3; previously on 05/09/07 Assigned Aaa -- Cl. 2-A-2, Downgraded to B3; previously on 05/09/07 Assigned Aaa -- Cl. 2-A-3, Downgraded to B3; previously on 05/09/07 Assigned Aaa -- Cl. 2-A-4, Downgraded to B3; previously on 05/09/07 Assigned Aaa -- Cl. 2-A-5, Downgraded to B3; previously on 05/09/07 Assigned Aaa -- Cl. 2-A-6, Downgraded to B3; previously on 05/09/07 Assigned Aaa -- Cl. 3-A-1, Downgraded to B3; previously on 05/09/07 Assigned Aaa -- Cl. 3-A-2, Downgraded to Ca; previously on 05/09/07 Assigned Aaa -- Cl. 4-A-1, Downgraded to B3; previously on 05/09/07 Assigned Aaa -- Cl. 1-M-1, Downgraded to C; previously on 05/09/07 Assigned Aa2 -- Cl. 1-M-2, Downgraded to C; previously on 04/29/08 Downgraded to Baa3 -- Cl. 1-M-3, Downgraded to C; previously on 04/29/08 Downgraded to B1 and Placed Under Review for Possible Downgrade -- Cl. 1-M-4, Downgraded to C; previously on 04/29/08 Downgraded to Ca -- Cl. II-M, Downgraded to C; previously on 05/09/07 Assigned Aa2 Issuer: PHH Alternative Mortgage Trust, Series 2007-3 -- Cl. A-1, Downgraded to B2; previously on 07/16/07 Assigned Aaa -- Cl. A-2, Downgraded to B3; previously on 07/16/07 Assigned Aaa -- Cl. A-3, Downgraded to B3; previously on 07/16/07 Assigned Aaa -- Cl. A-4, Downgraded to Caa3; previously on 07/16/07 Assigned Aaa -- Cl. M-1, Downgraded to C; previously on 07/16/07 Assigned Aa2 -- Cl. M-2, Downgraded to C; previously on 07/16/07 Assigned A2 -- Cl. M-3, Downgraded to C; previously on 04/29/08 Downgraded to Baa3 -- Cl. M-4, Downgraded to C; previously on 04/29/08 Downgraded to B1 and Placed Under Review for Possible Downgrade The ratings on the notes were assigned by evaluating factors determined to be applicable to the credit profile of the notes, such as i) the nature, sufficiency, and quality of historical performance information regarding the asset class as well as for the transaction sponsor, ii) an analysis of the collateral, iii) an analysis of the policies, procedures and alignment of interests of the key parties to the transaction, most notably the originator and the servicer, iv) an analysis of the transaction's allocation of collateral cashflow and capital structure, v) an analysis of the transaction's governance and legal structure, and (vi) a comparison of these attributes against those of other similar transactions. PILGRIM'S PRIDE: Seeks to Hire Gardere Wynne as Counsel ------------------------------------------------------- Pilgrim's Pride Corp. and its affiliates seek permission from the U.S. Bankruptcy Court for the Northern District of Texas to employ Gardere Wynne Sewell LLP as special litigation counsel nunc pro tunc to its bankruptcy filing. The Debtors seek to employ Gardere to provide all necessary professional legal services as special counsel with regard to non-bankruptcy-related litigation, investigation and insurance coverage matters that Gardere was handling for the Debtors prior to the Petition Date, including but not limited to matters in which the Debtors are plaintiffs or claimants, and for any new insurance coverage, investigation and litigation matters that the Debtors, in their business judgment, determine to employ Gardere to handle after the Petition Date. Stephen Youngman, Esq., at Weil, Gotshal & Manges LLP, in Dallas, Texas, tells the Court, that the Debtors' decision to employ Gardere is based on several factors: (i) Gardere is well qualified to act as special litigation counsel in the areas for which it has been asked to provide legal services; (ii) prior to the Petition Date, Gardere actively represented the Debtors and their affiliates with regard to various matters, including matters for which the Debtors need postpetition services; and (iii) the Debtors believe that representation by Gardere in these matters, subsequent to the Commencement Date, was and is in the best interest of the estates. Gardere attorneys, Mr. Youngman says, are intimately familiar with the Debtors' litigation, investigation and insurance coverage matters due to their representation of the Debtors in these matters prior to the Petition Date. The Debtors believe that the employment of Gardere as special litigation counsel for the Debtors will enable them to avoid the unnecessary expense otherwise attendant to having another law firm familiarize itself with the Debtors? businesses in connection with these matters, Mr. Youngman asserts. For its services, Gardere will be compensated according to its standard hourly rates and will be reimbursed for all the necessary and reasonable out-of-pocket expenses it incurred. Gardere's hourly rates are: Professional Hourly Rate ------------ ----------- Partner $380 to $750 Associates $210 to $445 Paraprofessionals $95 to $210 Stephen L. Moll, Esq., a partner at Gardere Wynne Sewell LLP, assures the Court that his firm does not represent or hold any interest adverse to the Debtors or their estates, and his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Mr. Moll discloses that the Debtors paid Gardere $1,813,750 during the one year prior to the Petition Date. Gardere also received a $200,000 retainer on October 27, 2008, of which retainer $31,922 remained as of the Petition Date. Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. In addition, the company owns 34 processing plants in the United States and 3 processing plants n Mexico. The processing plants are supported by 42 hatcheries, 31 feed mills and 12 rendering plants in the United States and 7 hatcheries, 4 feed mills and 2 rendering plants in Mexico. Moreover, the company owns 12 prepared food production facilities in the United States. The company employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico, and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. Pilgrim's Pride Corp. and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No. 08-45664). The Debtors' operations in Mexico and certain operations in the United States were not included in the filing and continue to operate as usual outside of the Chapter 11 process. Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. The Debtors have also tapped Baker & McKenzie LLP as special counsel. Lazard Freres & Co., LLC is the company's investment bankers and William K. Snyder of CRG Partners Group LLC as chief restructuring officer. The company's claims and noticing agent is Kurtzman Carson Consulting LLC. At Sept. 27, 2008, the company's balance sheet showed total assets of $3,298,709,000, total liabilities of $2,946,968,000 and stockholders' equity of $351,741,000. A nine-member committee of unsecured creditors has been appointed in the case. Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride Bankruptcy News. The newsletter tracks the chapter 11 proceeding of Pilgrim's Pride Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PILGRIM'S PRIDE: Court OKs Lazard Employment as Investment Banker ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorizes Pilgrim's Pride Corporation and its affiliates to employ Lazard Freres & Co., LLC, as their investment banker nunc pro tunc to the Petition Date. Lazard will be compensated in accordance with the Court's and Lazard's counsel's covenants on the record at the hearing. As reported by the Troubled Company Reporter on January 20, 2009, according to William Snyder, the Debtors' chief restructuring officer, Lazard's professionals have worked closely with the Debtors' management and other professionals and have become well- acquainted with the Debtors' operations, debt structure, creditors, business and operations, and related matters. As the Debtors' investment banker, Lazard will assist in the evaluation of strategic alternatives and render general restructuring advice and investment banking services to the Debtors in connection with the Debtors' Chapter 11 cases. Prior to Court approval, The Bank of Montreal, as the Prepetition BMO Lenders' and the DIP Lenders' agent, disagreed with the Debtors' application for the employment of Lazard, unless the order providing for the employment specifically provide that Lazard's compensation will be pursuant to the provisions of Section 330. BMO said any success fee, restructuring fee or the like for Lazard or any other party must be subject to further review by the Court as to actual value contributed and the opportunity of creditors including the DIP Agent and the Prepetition BMO Agent, to object if appropriate. Among other things, Lazard will: * review and analyze the Debtors' business, operations and financial projections; * evaluate the Debtors' potential debt capacity in light of its projected cash flows; * assist in the determination of a capital structure for the Debtors; * assist in the determination of a range of values for the Debtors on a going concern basis; * advise the Debtors on tactics and strategies for negotiating with the stakeholders; * render financial advice to the Debtors and participating in meetings or negotiations with the stakeholders or rating agencies or other appropriate parties in connection with any restructuring; * advise the Debtors on the timing, nature and terms of new securities, other consideration or other inducements to be offered pursuant to the restructuring; * assist the Debtors in preparing documentation within Lazard's area of expertise that is required in connection with the restructuring; * advise and assist the Debtors in evaluating and obtaining potential DIP Financing. For its services, the Debtors had proposed these payment terms for Lazard: (a) a $250,000 monthly fee payable on execution of an engagement letter and on the same day of each month thereafter until the earlier of the completion of the Restructuring or the termination of Lazard's engagement; (b) in the event that a Restructuring or a majority Sale Transaction is consummated, a fee of $6,500,000, payable upon the consummation of the Restructuring or Majority Sale Transaction; (c) in event of any Minority Asset Sale Transaction, a fee, payable upon consummation of the Minority Asset Sale Transaction, based on the Aggregate Consideration calculated; (d) in connection with any debtor-in-possession financing received by the Debtors, a fee of $1,000,000, payable upon the execution of a commitment letter or other similar document in respect of that financing; (e) the ability to credit certain fees against others will only apply if all the fees provided for are approved in their entirety by the Court; (f) in addition to any fees that may be payable to Lazard and, regardless of whether any transaction occurs, prompt reimbursement to Lazard for all (1) reasonable expenses and (2) other reasonable expenses, including expenses of counsel, if any; and (g) the indemnification, contribution and related obligation of the Indemnification Agreement. A full-text copy of Lazard's Engagement and Indemnification Agreement is available for free at: http://bankrupt.com/misc/PPC_Engage_Indemn.pdf Prior to the Petition Date, the Debtors have paid Lazard $750,000,000 in full payment of the Monthly Fees payable to date and have reimbursed Lazard for $284 in expenses billed to the Debtors on October 23, 2008. In addition, the Debtors paid Lazard $1,000,000 for the DIP Fee associated with the pending DIP financing. The Debtors also provided Lazard with a $15,000 retainer for reimbursement of Lazard's expenses incurred but not yet billed to the Debtors, due to the need to process or receive invoices or other typical delays. Lazard Managing Director David M. Aronson assures the Court that his firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code and does not hold or represent an interest materially adverse to the Debtors or their estates. Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. In addition, the company owns 34 processing plants in the United States and 3 processing plants n Mexico. The processing plants are supported by 42 hatcheries, 31 feed mills and 12 rendering plants in the United States and 7 hatcheries, 4 feed mills and 2 rendering plants in Mexico. Moreover, the company owns 12 prepared food production facilities in the United States. The company employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico, and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. Pilgrim's Pride Corp. and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No. 08-45664). The Debtors' operations in Mexico and certain operations in the United States were not included in the filing and continue to operate as usual outside of the Chapter 11 process. Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. The Debtors have also tapped Baker & McKenzie LLP as special counsel. Lazard Freres & Co., LLC is the company's investment bankers and William K. Snyder of CRG Partners Group LLC as chief restructuring officer. The company's claims and noticing agent is Kurtzman Carson Consulting LLC. At Sept. 27, 2008, the company's balance sheet showed total assets of $3,298,709,000, total liabilities of $2,946,968,000 and stockholders' equity of $351,741,000. A nine-member committee of unsecured creditors has been appointed in the case. Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride Bankruptcy News. The newsletter tracks the chapter 11 proceeding of Pilgrim's Pride Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PILGRIM'S PRIDE: Gets Court Okay to Hire Kurtzman as Claims Agent ----------------------------------------------------------------- Pilgrim's Pride Corp. and its affiliates sought and obtained permission from the U.S. Bankruptcy Court for the Northern District of Texas to employ Kurtzman Carson Consulting LLC as claims and noticing agent in connection with their Chapter 11 cases. Pursuant to the Services Agreement, KCC will: * notify all potential creditors of the filing of the Debtors' Chapter 11 cases and of the setting of the first meeting of creditors pursuant to Section 341(a) of the Bankruptcy Code; * prepare and serve motions, applications, requests for relief, hearing agendas, and related documents on behalf of the Debtors in the Chapter 11 cases; * assist the Debtors' preparation of their schedules of assets and liabilities and their statements of financial affairs, listing, among other things, their known creditors and the amounts owed thereto and maintain an official copy; * maintain a copy service or electronic from which parties may obtain copies of relevant documents in these cases * notify all potential creditors of the existence and amount of their respective claims as set forth in the schedules; * furnish a form for the filing of proofs of claim, after approval of the notice and form by the Court, and provide notice of the bar date for filing proofs of claim; * file with the Clerk's Office a copy of the bar date notice, a list of persons to whom it was mailed, and the date the notice was mailed; and * docket all claims received, maintaining the official claims register for the Debtors on behalf of the Clerk's office, and provide the Clerk's Office with a certified duplicate unofficial Claims Register on a monthly basis, unless otherwise directed. Subject to the Court's approval, KCC will be compensated and reimbursed for its services rendered and expenses incurred in connection with the Debtors' Chapter 11 cases, pursuant to the Services Agreement. The Services Agreement however, did not specify the rate of compensation due to KCC. The payment is based on the KCC Fee Structure, which is not presented in the Agreement. Michael J. Frisberg, Director of Restructuring Services of KCC, has said that KCC is a "disinterested person" as the term is defined in Section 1019(14) of the Bankruptcy Code, as modified by Section 1107(b) of the Bankruptcy Code. Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. In addition, the company owns 34 processing plants in the United States and 3 processing plants n Mexico. The processing plants are supported by 42 hatcheries, 31 feed mills and 12 rendering plants in the United States and 7 hatcheries, 4 feed mills and 2 rendering plants in Mexico. Moreover, the company owns 12 prepared food production facilities in the United States. The company employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico, and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. Pilgrim's Pride Corp. and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No. 08-45664). The Debtors' operations in Mexico and certain operations in the United States were not included in the filing and continue to operate as usual outside of the Chapter 11 process. Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. The Debtors have also tapped Baker & McKenzie LLP as special counsel. Lazard Freres & Co., LLC is the company's investment bankers and William K. Snyder of CRG Partners Group LLC as chief restructuring officer. The company's claims and noticing agent is Kurtzman Carson Consulting LLC. At Sept. 27, 2008, the company's balance sheet showed total assets of $3,298,709,000, total liabilities of $2,946,968,000 and stockholders' equity of $351,741,000. A nine-member committee of unsecured creditors has been appointed in the case. Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride Bankruptcy News. The newsletter tracks the chapter 11 proceeding of Pilgrim's Pride Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PILGRIM'S PRIDE: Proposes Securities Trading Protocol ----------------------------------------------------- Pursuant to Sections 105(a) and 362 of the Bankruptcy Code, Pilgrim's Pride Corp. and its affiliates seek authority from the U.S. Bankruptcy Court for the Northern District of Texas to establish procedures to protect the potential value of their consolidated net operating tax loss carryforwards and certain other tax attributes, including their "built-in" losses. The proposed procedures are applicable to the common stock of Pilgrim's Pride, and any options or similar interests to acquire those common stocks. The Debtors estimate that as of January 17, 2009, they have incurred consolidated NOLs in excess of $600,000,000. In addition, the aggregate tax basis of the Debtors' assets may exceed the value of the assets, resulting in a net "built-in" loss. The Debtors' consolidated NOL carryforwards are valuable assets of their estates because the Internal Revenue Code generally permits corporations to carry forward NOLs to offset future income, thereby reducing their tax liability in future periods. The Debtors' excess tax basis is a valuable asset because it may reduce the Debtors' future taxable income through increased operating deductions capital loss deductions or it may offset any subsequent capital appreciation in the assets. Furthermore, even after taking into account any anticipated cancellation of debt impact on the Debtors, the Debtors' remaining Tax Attributes might translate into substantial future tax savings over time. These savings would enhance the Debtors' cash position for the benefit of all parties in interest and significantly contribute to the Debtors' efforts toward a successful reorganization. Proposed Securities Trading Procedures The procedures set out certain restrictions and notification requirements, to be effective nunc pro tunc to January 17, 2009. Parties-in-interest will be notified of the Procedures, if and once approved by the Court, through service of (i) notice which will describe the restrictions and notification requirements, and (ii) a copy of the order granting the relief requested in this Motion. The Debtors propose that: (1) Any person or entity that beneficially owns, at any time on or after January 17, 2009, PPC Common Stock in an amount sufficient to qualify the person or entity as a "Substantial Equityholder will file with the Court, and serve on the Debtors and Debtors' counsel, a Notice of Substantial Stock Ownership. (2) At least 30 calendar days prior to the proposed date of any transfer of equity securities that would result in an increase or decrease in the amount of PPC Common Stock beneficially owned by any person or Entity who as of January 17, 2009, is or subsequently becomes or a Substantial Equityholder or that would result in a person or Entity becoming or ceasing to be a Substantial Equityholder, that person, Entity or Substantial Equityholder will file with the Court a Notice of Intent to Purchase or Sell PPC Common Stock. (3) The Debtors will 25 calendar days after the filing of an Equity Trading Notice to file with the Court and serve on a Proposed Equity Transferee or a Proposed Equity Transferor, an objection to any proposed transfer of PPC Common Stock. (4) If the Debtors file an Equity Objection by the Equity Objection Deadline, then the Proposed Equity Acquisition or Disposition Transaction will not be effective unless approved by a final and non-appealable Court order. (5) If the Debtors do not file an Equity Objection by the Equity Objection Deadline, or if the Debtors provide written authorization to the Proposed Equity Transferor approving the Proposed Equity Acquisition or Disposition Transaction, prior to the Equity Objection Deadline, then that Transaction may proceed solely as specifically described in the Equity Trading Notice. (6) Effective as of January 17, 2009, until further order of the Court to the contrary, any acquisition, disposition or other transfer of PPC Common Stock in violation of the procedures set forth herein will be null and void ab initio as an act in violation of the automatic stay under Section 362. A "Substantial Equityholder" is any person or entity that beneficially owns at least 3,517,648 shares of PPC common stock representing approximately 4.75% of all issued and outstanding shares of PPC common stock. "Beneficial ownership" will be determined in accordance with applicable rules under Section 382 of the Tax Code, the U.S. Department of Treasury regulations, and rulings issued by the Internal Revenue Service, and, thus, to the extent provided in those rules, from time to time will include (i) direct and indirect ownership, (ii) ownership by a holder's family members and any group of persons acting pursuant to a formal or informal understanding to make a coordinated acquisition of stock, and (iii) in certain cases, the ownership of an Option to acquire PPC Common Stock. An "Option" to acquire stock includes any contingent purchase, warrant, convertible debt, put, stock subject to risk of forfeiture, contract to acquire stock, or similar interest regardless of whether it is contingent or otherwise not currently exercisable; and for the avoidance of doubt, by operation of the definition of beneficial ownership, an owner of an Option to acquire PPC Common Stock may be treated as the owner of that PPC Common Stock. Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. In addition, the company owns 34 processing plants in the United States and 3 processing plants n Mexico. The processing plants are supported by 42 hatcheries, 31 feed mills and 12 rendering plants in the United States and 7 hatcheries, 4 feed mills and 2 rendering plants in Mexico. Moreover, the company owns 12 prepared food production facilities in the United States. The company employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico, and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. Pilgrim's Pride Corp. and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No. 08-45664). The Debtors' operations in Mexico and certain operations in the United States were not included in the filing and continue to operate as usual outside of the Chapter 11 process. Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. The Debtors have also tapped Baker & McKenzie LLP as special counsel. Lazard Freres & Co., LLC is the company's investment bankers and William K. Snyder of CRG Partners Group LLC as chief restructuring officer. The company's claims and noticing agent is Kurtzman Carson Consulting LLC. At Sept. 27, 2008, the company's balance sheet showed total assets of $3,298,709,000, total liabilities of $2,946,968,000 and stockholders' equity of $351,741,000. A nine-member committee of unsecured creditors has been appointed in the case. Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride Bankruptcy News. The newsletter tracks the chapter 11 proceeding of Pilgrim's Pride Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PITTSBURGH CORNING: Files Modified 3rd Amended Bankruptcy Plan -------------------------------------------------------------- Pittsburgh Corning Corporation filed a Modified Third Amended Plan of Reorganization with the United States Bankruptcy Court for the Western District of Pennsylvania on January 29, 2009, which will resolve certain current and future asbestos claims against Corning Incorporated and PPG Industries, Inc., arising from PCC products or activities. Pittsburgh Corning is owned 50% by Corning Incorporated and 50% by PPG Industries. The Plan is subject to the approval of the federal bankruptcy court in Pittsburgh, and a favorable vote of the asbestos claimants voting on the Plan. Pittsburgh Corning filed for Chapter 11 Bankruptcy protection in 2000. In its news statement, PPG Industries says that under the terms of the amended plan, all current and future personal injury claims against PPG relating to exposure to asbestos-containing products manufactured, distributed or sold by Pittsburgh Corning will be channeled to a trust for resolution. The amended plan is subject to court approval and appeals processes, after which it would become effective and payments to the trust by PPG and its participating insurers would begin according to a modified PPG settlement arrangement that is part of the amended plan. In 2002, PPG entered into a settlement arrangement relating to asbestos claims. The company has reserved approximately $900 million for that settlement arrangement. Under the modified settlement arrangement, PPG's obligation is currently $735 million for claims that will be channeled to the trust. PPG will retain the approximately $165 million difference as a reserve for asbestos-related claims that will not be channeled to the trust. "This amended plan addresses the issues raised by the court in its 2006 opinion on the matter, and while we continue to believe PPG is not responsible for injuries caused by Pittsburgh Corning products, this amended plan would permanently resolve PPG's asbestos liabilities associated with Pittsburgh Corning," said James C. Diggs, PPG senior vice president, general counsel and secretary. "We believe the modified settlement arrangement and the remaining reserve are very advantageous for the company because the vast majority of PPG's asbestos-related claims will be paid or otherwise resolved by the trust." Under the modified settlement arrangement, PPG's obligation to the trust consists of cash payments over a 15-year period totaling $825 million, about 1.4 million shares of PPG stock or cash equivalent, and its shares in Pittsburgh Corning and Pittsburgh Corning Europe. The obligation under the modified settlement arrangement at December 31, 2008 totals $735 million or approximately $460 million net of the associated tax benefit. PPG's obligation under the modified settlement arrangement includes the net present value of the cash payments of $825 million, which will be adjusted quarterly to reflect the accretion of interest. In addition, PPG's participating historical insurance carriers will make cash payments to the trust of approximately $1.6 billion in a series of payments ending in 2027. Since the filing of the Pittsburgh Corning bankruptcy in 2000, interested parties, including PPG, have engaged in extensive negotiations, made numerous filings with the court and participated in many hearings on this matter. In December 2006, the court denied confirmation of the previous amended reorganization plan for Pittsburgh Corning, on the basis that the plan was too broad in the treatment of allegedly independent asbestos claims not associated with Pittsburgh Corning. PPG believes this amended plan meets the court's concerns. In a separate statement, Corning says its contributions to the settlement trust will begin after certain conditions are met, and the Plan is approved and no longer subject to appeal. The approval process could take one year or longer, Corning says. About PPG Industries Pittsburgh, Pennsylvania-based PPG Industries, Inc. -- http://www.ppg.com/-- is a global supplier of paints, coatings, chemicals, optical products, specialty materials, glass and fiber glass. The company has more than 140 manufacturing facilities and equity affiliates and operates in more than 60 countries. Sales in 2008 were $15.8 billion. PPG shares are traded on the New York Stock Exchange (symbol: PPG). About Corning Corning Incorporated -- http://www.corning.com/-- makes specialty and ceramics for more than 150 years. Its products include glass substrates for LCD televisions, computer monitors and laptops; ceramic substrates and filters for mobile emission control systems; optical fiber, cable, hardware & equipment for telecommunications networks; optical biosensors for drug discovery; and other advanced optics and specialty glass solutions for a number of industries including semiconductor, aerospace, defense, astronomy and metrology. About Pittsburgh Corning Pittsburgh Corning Corporation filed for Chapter 11 bankruptcy protection in 2000 (Bankr. W.D. Pa. Case No. 00-22876). The Hon. Judith K. Fitzgerald presides over the case. The Bankruptcy Court authorized the retention of Reed Smith LLP as counsel for the Debtor under a general retainer, and the retention of Deloitte & Touche LLP as accountants for the Debtor. The United States Trustee appointed a Committee of Unsecured Trade Creditors on April 28, 2000. The Bankruptcy Court authorized the retention of Leech, Tishman, Fuscaldo & Lampl, LLC as counsel to the Committee of Unsecured Trade Creditors, and Pascarella & Wiker, LLP as financial advisor. The United States Trustee appointed a Committee of Asbestos Creditors on April 28, 2000. The Bankruptcy Court authorized the retention of these professionals by the Committee of Asbestos Creditors: (i) Caplin & Drysdale, Chartered as Committee Counsel; (ii) Campbell & Levine as local counsel; (iii) Anderson Kill & Olick, P.C. as special insurance counsel; (iv) Legal Analysis Systems, Inc. as Asbestos-Related Bodily Injury Consultant; (v) L. Tersigni Consulting, P.C. as financial advisor, and (vi) Professor Elizabeth Warren, as a consultant to Caplin & Drysdale, Chartered. On February 16, 2001, the Court approved the appointment of Lawrence Fitzpatrick as the Future Claimants' Representative. The Bankruptcy Court authorized the retention of Meyer, Unkovic & Scott LLP as his counsel, Young Conaway Stargatt & Taylor, LLP as his special counsel, and Analysis, Research and Planning Corporation as his claims consultant. In December 2006, the Bankruptcy Court denied confirmation of an earlier version of the plan, citing that the plan was too broad in addressing independent asbestos claims that were not associated with the Debtor. PITTSBURGH CORNING: Comments on Filing of Amended Bankruptcy Plan ----------------------------------------------------------------- PPG Industries Inc. said January 30, 2009, that an amended plan of reorganization has been filed in the United States Bankruptcy Court for Pittsburgh Corning Corporation. PPG, Industries has owned 50% of PC since 1937. In December 2006, a U.S. Bankruptcy Court for the Western District of Pennsylvania issued a decision denying confirmation of the previous amended plan of reorganization for PC on the basis that the plan was too broad in addressing independent asbestos claims that were not associated with PC. PPG believes that the amended plan addresses the issues raised by the court in the December 2006 ruling. Under the modified settlement agreement, the present value of PPG's cash obligation will be reduced from $900 million, which was originally entered into in 2002, to $735 million for claims that will be channeled to a trust. PPG will retain the approximately $165 million difference as a reserve for asbestos-related claims that will not be channeled to the trust. In addition to the cash payment, PPG will contribute 1.4 million shares of its stock and convey the stock it owns in PC to the trust. PPG's participating historical insurance carriers would make cash payments to the trust of approximately $1.6 billion. Fitch Ratings says the modified settlement agreement is a positive step in resolving the company's asbestos litigation. The amended plan is subject to approval by a federal bankruptcy court and the agreement has to be accepted by the various claimants. Once the plan becomes effective, payments to the trust would begin according to the modified agreement. With $1 billion of cash on the balance sheet at the end of 2008, PPG has sufficient liquidity to meet the payments required under the modified settlement agreement. Fitch will continue to monitor the progress of PC's reorganization plan as well as potential independent asbestos claims against PPG that may not be addressed in the amended PC plan. Founded in 1883, PPG is a global supplier of coatings, glass, fiberglass, and chemicals. The company has manufacturing facilities and equity affiliates in more than 60 countries. PPG is the world's largest producer of transportation coatings and a leading maker of industrial and packaging coatings, architectural coatings, aircraft transparencies, flat and fabricated glass, continuous-strand fiberglass, and chlor-alkali and specialty chemicals. PNL PUBLICATIONS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: PNL Publications, Inc. dba Beard Printing 3627 Sandhurst Drive York, PA 17406 Bankruptcy Case No.: 09-00419 Chapter 11 Petition Date: January 23, 2009 Court: United States Bankruptcy Court Middle District of Pennsylvania (Harrisburg) Judge: Mary D. France Debtor's Counsel: Lawrence V. Young, Esq. CGA Law Firm 135 North George Street York, PA 17401 Tel: (717) 848-4900 Fax: (717) 843-9039 Email: lawyoung@cgalaw.com Total Assets:$2,910,354 Total Debts: $4,098,702 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/pamb09-00419.pdf The petition was signed by Daniel K. Beard, Jr., President of the company. PONTIAC MICHIGAN: Fitch Takes Rating Actions on Securities ---------------------------------------------------------- Fitch Ratings has taken these rating actions on securities issued by the Pontiac, Michigan General Building Authority and its related Tax Increment Finance Authorities: Pontiac General Building Authority: -- $1.2 million limited tax general obligation LTGO) bonds, series 2002 (2002 GBA LTGO bonds) downgraded to 'CCC' from 'B-' and placed on Rating Watch Negative; Pontiac Tax Increment Finance Authority Area No. 2: -- $5.1 million tax increment revenue bonds, series 2002 (2002 TIFA No. 2 bonds), 'CCC' rating unchanged and placed on Rating Watch Negative; Pontiac Tax Increment Finance Authority Area No. 3: -- $4.9 million tax increment revenue bonds, series 2002 (2002 TIFA No. 3 bonds) downgraded to 'B' from 'BB-', and placed on Rating Watch Negative. The Rating Watch Negative for all three credits is tied to uncertainty regarding General Motors Corporation's (Issuer Default Rating rated 'C' by Fitch) numerous facilities and employees within the city and the TIFAs. The downgrade for the 2002 GBA LTGO bonds reflects the city's exposure to GM as its largest employer and taxpayer (approximately 26% of the fiscal 2009 property tax base), significant economic weakening due to increasing unemployment and a declining tax base, and a long-standing structural budget deficit in the general fund. The rating also incorporates the fact that these LTGO debt service obligations are expected to be paid from TIFA No. 2 revenues. Should those revenues decline further, Fitch believes that allocating general fund resources for debt service would pose a significant challenge. While the city projects a modest general fund surplus for the current fiscal year, a deficit in 2009, or failure to adopt a balanced fiscal 2010 budget with realistic revenue and expenditure assumptions could lead to additional negative rating pressure. The city's economic and financial conditions declined considerably over the past year, driven partially by layoffs at GM. In November 2008, the city's unemployment rate increased to 19.8%, and preliminary estimates for fiscal 2010 indicate taxable assessed value declines of between 5% and 6%. The general fund cumulative deficit grew to $-7.1 million, or -14.1% of total spending, at the end of fiscal 2008. In light of the ongoing challenges, a state-appointed Financial Management Review Team (the review team) entered into a consent agreement (the agreement) with the city last June. Key provisions of the agreement include quarterly financial reports to the state, a 90-day limitation on inter-fund borrowing, and the development of consensus revenue estimates at an annual conference between the Mayor and the city council. The review team continues to meet quarterly to assess the city's compliance with the agreement and its overall condition. At any time, the review team could deem the city out of compliance, and move towards appointment of an Emergency Fiscal Manager, to take over the city's management and finances. The rating on Pontiac's 2002 TIFA No. 2 bonds reflects the significant exposure to GM, and a structural operating deficit that has not been adequately addressed. Based on fiscal 2008 tax base information provided by the city, GM-owned properties represented approximately 58% of the TIFA No. 2 tax base, and GM suppliers represented another 6.3%. Audited gross fiscal 2008 revenues of $3.7 million provides a slim 1.03 times coverage of maximum annual debt service, inclusive of TIFA No. 2's various parity debt service obligations. MADS occurs in 2009, with debt service declining notably after that. In addition, TIFA No. 2 ended fiscal 2008 with another annual operating deficit, its fourth in the past five years. Fund balance declined to just $800,000 at the end of 2008 and a further operating deficit in the current year could leave TIFA No. 2 with virtually no reserves. Fitch does note that preliminary financial reports provided by the city indicate that through the second quarter of fiscal 2009, TIFA non-debt service related expenditures appear to be significantly below budget. The downgrade of Pontiac's 2002 TIFA No. 3 bonds reflects the recent decline in the captured tax base, and the likelihood of further declines as the city's housing market continues to weaken. This significant credit risk is somewhat offset by TIFA No. 3's adequate debt service coverage, an historical pattern of operating surpluses, and a sizable fund balance reserve of over $2 million. Based on fiscal 2008 tax base data provided by the city, captured value for TIFA No. 3 declined 1.7%, to $129.6 million. Fitch expects the declines in captured value to continue for several more years, reflecting the high proportion of residential properties in TIFA No. 3 (42% of the fiscal 2007 tax base). LoanPerformance data for the entire city as of 3Q'08 indicates twice the national exposure to subprime loans (52% vs. 26%) and nearly double the foreclosure rate (19% vs. 11%). In addition to the concerns relating to GM, any indication of operating deficits in TIFA No. 3 could lead to further negative rating pressure. Located 31 miles from Detroit in Oakland County, Michigan, Pontiac's wealth levels remain very low, as per capita money income is 43% of the county, 63% of the state, and 60% of the nation. The city's debt levels are moderately high with direct debt equal to $1,182 per capita, or 2% of market value. These ratios include all tax-supported debt obligations of the city including debt currently paid by TIFA No. 2, but further secured with the city's LTGO pledge, or the city's share of Distributable State Aid. PROPEX INC: Gets Interim OK to Borrow Up to $30-Mil. From Wayzata ----------------------------------------------------------------- Judge John C. Cook of the U.S. Bankruptcy Court for Eastern District of Tennessee has authorized Propex Inc. and its ffiliates, on an interim basis, to borrow up to $30 million from Wayzata Investment Partners LLC, acting as sole administrative agent, and Wayzata Opportunities Fund II, L.P., and certain other lenders. The Court will convene a final hearing on February 9, 2009, at 1:30 p.m. EST, to consider the Debtors' request. The new lending facility envisions a sale of substantially all of Propex's assets as going concerns on or before March 24, 2009. Propex stated at the court hearings that Wayzata is interested as a bidder in an auction process for substantially all of the companies' assets, with the buyer continuing the operations of Propex after the sale and assuming certain liabilities, such as the employees of the ongoing operations and satisfying ongoing obligations to vendors and employees. Wayzata Facility Forces Liquidation of Propex, Committee, et al., Assert Before the Court entered its Interim DIP ruling, the Official Committee of Unsecured Creditors, Pension Benefit Guaranty Corporation, the U.S. Trustee, and Black Diamond Capital Management, Inc., expressed their opposition to the 2009 DIP Facility. The Objectors asserted that they were not given adequate notice of the Replacement DIP Motion. The Objectors complained that the Replacement DIP Motion lacked fundamental due process as the Credit Agreement did not include a proposed form of the DIP order, a DIP budget and numerous other basic documents. James R. Savin, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, counsel for the Committee, contended the proposed postpetition financing should not be approved for these reasons: (i) It dictates the terms of the Debtors' reorganization in that it forces the immediate liquidation of the Debtors' assets. (ii) It significantly alters all creditors' rights with respect to the Debtors' assets in that, once the proposed financing facility is approved, creditors and parties-in- interest have no meaningful opportunity to oppose the sale of the Debtors' assets without jeopardizing the Debtors' postpetition financing. (iii) It requires the Debtors to liquidate all of their assets immediately, leaving nothing left to reorganize. The Committee said that the proposed financing facility inappropriately forces the Debtors to liquidate their assets in a short period of time without any showing that a sale will maximize value. According to the Committee, the proposed financing seeks to transfer to the DIP Lender -- a party with no fiduciary obligations to the Debtors' creditors -- the power to determine the course of the Chapter 11 cases. In this light, prosecution of the Replacement DIP Motion constitutes a violation of the Debtors' fiduciary obligations to their estates, Mr. Savin argued. Pension Benefit Guaranty Corporation, an agency that administers a defined benefit pension plan termination insurance programs under Title IV of the Employee Retirement Income Security Act of 1974, asserted that any collateralization of non-Debtor assets is not permitted under the Bankruptcy Code because the interest in the property is not part of the estate. By providing the lenders with a lien on the assets of the Debtors' foreign subsidiaries, the DIP financing would put the lenders ahead of other creditors, PBGC asserted. Black Diamond Capital affirmed that it represents a majority in amount of the Debtors' outstanding senior secured debt. Black Diamond asked the Court to deny the Replacement DIP Motion to the extent that the Debtors cannot adequately protect the prepetition senior lenders. Black Diamond contended that either as a going concern or in liquidation, the value of the Debtors' assets will not yield enough to pay their creditors in full. Black Diamond added that the representation in the DIP Motion that the DIP Lenders have refused to extend the maturity date of the existing DIP facility was inaccurate. Black Diamond's objection was supported by Schultze Asset Management Inc., Denali Capital LLC, Aladdin Capital Management, LLC, Eaton Vance Capital, GECC, and Regiment Capital. For his part, Richard B. Clippard, the U.S. Trustee for Region 8, asserted that the Debtors' agreement with the DIP Lenders to have a sale of the assets no later than April 24, 2009, discourages potential purchasers and gives little time for due diligence by other potential purchasers. Mr. Clippard contended that the Replacement DIP Motion changes the entire course of the Debtors' case from working toward a consensual plan to working toward a quick sale to the company providing DIP Financing. Moreover, the Replacement DIP Motion should be denied for failing to provide 20 days' notice to parties-in-interest, the U.S. Trustee added. The Debtors submitted to the Court a proposed DIP order on January 21, 2009, to address some of the objections. Furthermore, the January 22, 2009 hearing was continued to January 28 to give parties-in-interest adequate time to review the proposed DIP Financing. Pension Benefit subsequently withdrew its objections, saying that it has settled its objections with the Debtors. Debtors React to Objections The Debtors maintained that the 2009 DIP Facility will allow them to conduct an orderly sale process for their assets, thereby maximizing the value of the prepetition lenders' collateral. Henry J. Kaim, Esq., at King & Spalding LP, in Houston, Texas, emphasized that Wayzata's proposal provided the only alternative for the Debtors to exit their cases as continued going-concerns and thereby preserve thousands of jobs. Without additional funds under the 2009 DIP Facility, the Debtors' opportunity to maintain their operations in light of declining liquidity would be scarce and liquidation likely would be forthcoming, Mr. Kaim told the Court. In further support of the fairness and adequacy of the 2009 DIP Facility, the Debtors noted that although the Creditors Committee and Black Diamond have posed objections to the 2009 DIP Facility, neither they nor any other party has proposed an alternative, committed financing arrangement which provides the Debtors and their assets with more favorable terms. "In essence, approval of the objections leads only to one conclusion: no financing for the Debtors and an inevitable liquidation of the Debtors' assets, risks thousands of jobs and creates the very real potential for a significant increase in unsecured claims," Mr. Kaim said. With regards to the Committee's objections, Mr. Kaim clarified said that the 2009 DIP Financing Agreement does not identify an ultimate buyer and purchase price of the Debtors' assets. Instead, sufficient time will be alloted for marketing the Debtors' assets and conducting a bidding process, which will assure that, when the Debtors do file their Section 363 motion with the Court, the highest and best price obtainable for the Debtors' assets will be presented to the Court and creditors, he said. Black Diamond Presents Alternative Financing In a supplemental objection, Black Diamond told the Court that it was prepared to provide the Debtors with the financing substantially the same terms as proposed by Wayzata, but with two significant improvements: (i) Black Diamond would provide existing prepetition lenders with an opportunity to participate in the Black Diamond loan, with the expectation that this would help garner additional support among prepetition lenders for the Black Diamond DIP Loan; and (ii) Black Diamond offered to eliminate the Exit Fee as described in Wayzata DIP Agreement and noted that better economics would benefit the Debtors and all of creditors generally. The proposed Wayzata Exit Fee could total as much as 3% of the proposed loan or $1,950,000. William L. Norton III, Esq., at Bradley Arant Boult Cummings LLP, in Nashville, Tennessee, told Judge Cook that Black Diamond contacted the Debtors to discuss the proposal, but the Debtors refused to negotiate claiming it was prohibited from doing so by certain exclusivity provisions contained in the non-binding terms sheet that they had with Wayzata. Given that Black Diamond is willing to provide the Debtors with financing on better terms, Mr. Norton asserted that the Replacement DIP motion should be denied; the Black Diamond DIP loan should be approved; and the Court should admonish the Debtors for failing to satisfy their obligations as debtors-in- possession. Immediate Liquidity Warranted on Propex's Operations, Court Held Upon review of the parties' arguments, Judge Cook opined that good cause has been shown for entry of an Interim DIP Order. He held that the Debtors will be irreparably harmed absent immediate liquidity. The Court thus permitted that the Debtors, on January 29, 2009, to enter into the Wayzata DIP Documents. Objections to the Interim DIP Order not otherwise resolved or withdrawn are overruled. All of the DIP Obligations under the 2009 Facility constitute allowed claims against the Debtors with priority over and all administrative expenses and all other claims against the Debtors, subject only to the payment of the Carve-Out, Judge Cook ruled. As security for the DIP obligations, the 2009 DIP Lenders are granted first lien on all of the Debtors' unencumbered property, liens priming the Prepetition Lenders' liens, and liens senior to certain other liens. Judge Cook authorizes the Debtors to use a part of the 2009 Loan Proceeds to pay in full their existing obligations under the January 2008 Credit Facility with BNP Paribas Securities Corp., as administrative agent, and certain other lenders. As of January 23, 2009, the total amount outstanding under the 2008 DIP Facility is $32,774,377, plus $420,000 in cash used to cash collateralize letters of credits issued by BNP Paribas. Upon full payment of the 2008 Facility Obligations: (a) the Debtors and their estates will not have any additional remaining liabilities with respect to the 2008 Facility; (b) the 2008 Facility will immediately be terminated and will be of no further force or effect; and (c) any and all security interest, liens and other interest granted to the Lenders under the 2008 Facility and the 2008 DIP Order will immediately be released and terminated. Without prejudice to the rights of the Creditors Committee to prosecute its claims against the Prepetition Agent in Adversary Proceeding No. 08-01136 and the present appeal of the Bankruptcy Court Order confirming liens granted in the Debtors' cases, the Debtors reaffirm that (i) they were indebted and liable to the Prepetition Lenders with respect to a $230 million prepetition loan; and that (ii) they do not release any claims, counterclaims, causes of action, defenses or set-off rights against the Prepetition Lenders. The 2009 Facility requires the Debtors, as part of their Chapter 11 process, to: (a) file, no later than February 10, 2009, (i) a motion for approval of bidding procedures with respect to a proposed sale of substantially all of their assets under Section 363 of the Bankruptcy Code to a potential stalking horse bidder or other successful bidder, and (ii) a motion for authority to enter into that proposed asset sale; (b) obtain Court approval of the Bid Procedures no later than March 4, 2009; (c) conduct an auction in accordance with the Bid Procedures to determine the winning bidder, no later than March 23, 2009; and (d) obtain Court approval of the sale of substantially all of their assets no later than March 24, 2009. The Debtors are authorized to pay, without the need for further Court approval, all reasonable out-of-pocket expenses of the DIP Lenders in connection with the 2009 DIP Facility. A full-text copy of the Wayzata Interim DIP Order can be accessed for free at http://bankrupt.com/misc/Propex_InterimDIP.pdf Cash Collateral Judge Cook also authorized the Debtors to use cash collateral of their Prepetition Lenders, on an interim basis, pursuant to and limited by the provisions of a DIP Budget. The Debtors' use of Cash Collateral will automatically terminate on the date that is the earlier of 10 days after an Event of Default under the DIP Facility or the maturity of the 2009 DIP Facility, the Court held. The Prepetition Lenders are entitled to adequate protection of their interest in the Prepetition Collateral in an amount equal to the aggregate diminution in value of their Prepetition Collateral, the Court ruled. To secure the Debtors' Adequate Protection Obligations, the Prepetition Lenders are granted valid, perfected replacement security interests in and liens on all the Collateral, subject and subordinate only to certain permitted Prepetition Liens; DIP Lenders' Liens; and the Carve-Out. The Debtors are directed to provide the Prepetition Lenders and the Official Committee of Unsecured Creditors with copies of all written reports, information and other materials delivered to the DIP Lenders pursuant to the 2009 DIP Facility. About Propex Inc. Headquartered in Chattanooga, Tennessee, Propex Inc. -- http://www.propexinc.com/-- produces geosynthetic, concrete, furnishing, and industrial fabrics and fiber. It also produces primary and secondary carpet backing. Propex operates in North America, Europe, and Brazil. The company and its debtor-affiliates filed for Chapter 11 protection on Jan. 18, 2008 (Bankr. E.D. Tenn. Case No. 08-10249). The Debtors have selected Edward L. Ripley, Esq., Henry J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in Houston, Texas, to represent them. The Official Committee of Unsecured Creditors have tapped Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld, LLP, in New York, to be its counsel. Propex Inc., and its affiliates delivered to the Court a Joint Plan of Reorganization and Disclosure Statement on October 29, 2008. Propex's exclusive period to solicit acceptances of the Plan expires Dec. 29, 2008. As of June 29, 2008, the Debtors' balance sheet showed total assets of US$562,700,000, and total debts of US$551,700,000. The Debtors have filed their Disclosure Statement and Plan of Reorganization on October 29, 2008. Bankruptcy Creditors' Service, Inc., publishes Propex Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by Propex Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PROPEX INC: Drops Bid for Extension of Solicitation Period ---------------------------------------------------------- Propex Inc. and its affiliates withdrew their request for an extension of the period within which they have the exclusive right for the solicitation of acceptances for their Plan of Reorganization on January 21, 2009. No reason was stated for the withdrawal. As reported by the Troubled Company Reporter on January 20, 2009, the Debtors ask the U.S. Bankruptcy Court for the Eastern District of Tennessee to extend their exclusive period to solicit acceptances of their Plan of Reorganization through April 23, 2009, to coincide with and compliment their new replacement postpetition financing facility. The Debtors' current Exclusive Solicitation Period was set to expire on January 31, 2009. In their request, the Debtors said they need more time for the Solicitation Period as they still have unresolved contingencies in their bankruptcy cases. The Debtors' current DIP Lenders have declined to extend the terms of the Debtors' existing DIP Facility, set to mature on January 23, 2009. In this light, the Debtors' attention has been focused on obtaining a new DIP Facility with Wayzata Investment Partners LLC in an amount in excess of the current DIP Facility and on substantially similar terms, Henry J. Kaim, Esq., at King & Spalding, LLP, in Houston, Texas, explained. The Wayzata DIP Facility provides for maturity date of April 23, 2009. Moreover, the Debtors relate that they recently got Court authority to execute an exit financing term sheet with Wayzata, and are moving towards integrating the exit term sheet into their plan discussions. Mr. Kaim adds that additional time is necessary for the Debtors to finalize the terms of their proposed exit from Chapter 11 and provide creditors with reasonable amount of time to review the terms of the exit plan, as well as cast ballots and seek confirmation of the amended plan of reorganization. "The new DIP Facility with Wayzata provides the appropriate platform to re-energize the exit process," Mr. Kaim says. Mr. Kaim further contends that "cause" exists to extend the Debtors' Solicitation Period, considering the size and complexity of their businesses and the unprecedented credit freeze and economic downturn, not only in the United States, but around the world. The Debtors emphasize that they are not seeking to "hide-out" in Chapter 11 for the purpose of pressuring their creditors to unreasonable demands. To the contrary, Mr. Kaim says, the Debtors are attempting to reorganize and obtain confirmation as soon as possible. About Propex Inc. Headquartered in Chattanooga, Tennessee, Propex Inc. -- http://www.propexinc.com/-- produces geosynthetic, concrete, furnishing, and industrial fabrics and fiber. It also produces primary and secondary carpet backing. Propex operates in North America, Europe, and Brazil. The company and its debtor-affiliates filed for Chapter 11 protection on Jan. 18, 2008 (Bankr. E.D. Tenn. Case No. 08-10249). The Debtors have selected Edward L. Ripley, Esq., Henry J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in Houston, Texas, to represent them. The Official Committee of Unsecured Creditors have tapped Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld, LLP, in New York, to be its counsel. Propex Inc., and its affiliates delivered to the Court a Joint Plan of Reorganization and Disclosure Statement on October 29, 2008. Propex's exclusive period to solicit acceptances of the Plan expires Dec. 29, 2008. As of June 29, 2008, the Debtors' balance sheet showed total assets of US$562,700,000, and total debts of US$551,700,000. The Debtors have filed their Disclosure Statement and Plan of Reorganization on October 29, 2008. Bankruptcy Creditors' Service, Inc., publishes Propex Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by Propex Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) QTC MANAGEMENT: S&P Downgrades Corporate Credit Rating to 'B' ------------------------------------------------------------- Standard & Poor's Rating Services said that it lowered its ratings on Diamond Bar, California-based QTC Management Inc. The corporate credit rating was lowered to 'B' from 'B+'. At the same time, the issue rating on the company's $15 million first-lien revolving credit facility and $140 million senior secured term loan due 2012 was lowered to 'B' from 'B+'. The recovery rating on the debt was unchanged at '3'. The action reflects concern regarding tightening covenant levels in 2009. "While the company's base business has been performing within expectations and continues to generate free cash flow, significant covenant step-downs in the credit agreement may challenge the company to loosen these financial constraints in a difficult lending environment," said Standard & Poor's credit analyst Alain Pelanne. The outlook is negative. The rating on outsourced disability exam provider QTC continues to reflect the company's vulnerabilities tied to its narrow business focus, heavy reliance on three government agency customers, and aggressive financial risk profile. These factors partly are offset by its established positions with several key government agencies, strong margins, and scalable business model. QTC performs medical examinations under contract on a fee-for- service basis with about 15 different government agencies and offices, including the Department of Veterans Affairs, the Department of Labor, and the Social Security Administration, among others. The company's largest contract is with the VA, which represents a significant portion of its revenues and, therefore, poses a significant customer concentration risk. Heightened political and public attention on the needs of disabled veterans helps underscore the importance of QTC's role in the care received by veterans, as the company assists government agencies process disability claims on a more timely basis. However, this focus also increases the risk of a new technological or process solution entering the marketplace, underscoring the risk of operating in such a niche industry. While QTC's size makes it the largest provider of its services in the industry, individual contracts remain vulnerable to bidding at expiration, especially if the company doesn't perform to pre- negotiated levels of quality and timeliness. It is also possible that smaller competitors could try to win contracts by cutting their prices. The company has deleveraged meaningfully since the time of its LBO in 2005, and its lease-adjusted leverage currently stands in the mid4x area, versus over 6x in 2005. However, liquidity may be limited by the expected tightness in covenants if the company is forced to go to lenders for an amendment. RADNET MANAGEMENT: S&P Gives Stable Outlook; Holds 'B' Rating ------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised the outlook on Los Angeles, California-based RadNet Management Inc. to stable from positive. This action reflects S&P's view that RadNet's financial risk profile will not improve sufficiently within the next 12 months to warrant an upgrade. While RadNet made recent acquisitions at attractive multiples, incremental capital and operating leases (which S&P view as off-balance-sheet debt) associated with these transactions have diminished the rate of previously anticipated financial improvement. In addition, Standard & Poor's also affirmed the ratings on RadNet. The 'B' rating on RadNet, the wholly-owned operating subsidiary of RadNet Inc., reflects the fragmented and competitive nature of the diagnostic imaging industry, relatively low barriers to entry, reimbursement risk, and the company's considerable dependence (in California) on an affiliated entity, Beverly Radiology Medical Group, for its professional staffing. Adjusted for operating leases, debt leverage is high. BRMG supplies the majority of RadNet's California medical professionals through a contractual arrangement that extends through 2014. Because of the interdependence and common ownership among RadNet, RadNet Inc., and BRMG, Standard & Poor's views them as a consolidated entity for rating purposes. The outlook is stable. The company's goal is to bring down its 4.7x leverage, per its bank loan calculations, to about 4x. While the company's goal is to bring down its 4.7x leverage (per its bank loan calculations) to about 4x over the next couple of quarters, S&P believes that RadNet will be challenged to generate the earnings and free cash flow to do so. Still, EBITDA growth tied to recent acquisitions, combined with debt paydown, could bolster credit prospects. "Accordingly, S&P could restore the positive outlook, if S&P gain confidence that adjusted debt leverage will remain near 4.5x on a sustained basis," said Standard & Poor's credit analyst Cheryl E. Richer. This could happen if, for example, debt declined by $50 million, possibly resulting from a 100-basis-point improvement in operating margins and organic growth of more than 4%. "While prospects for a downgrade appear unlikely, lower procedure volume or reimbursement cuts that would limit EBITDA growth to under 3% could put the company in danger of breaching its debt covenants," she continued. RANDY'S EXPRESS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Randy's Express Service, Inc. 8545 Pecan Avenue Rancho Cucamonga, CA 91786 Bankruptcy Case No.: 09-11196 Chapter 11 Petition Date: Januawy 26, 2009 Court: United States Bankruptcy Court Central District of California (Riverside) Judge: Richard M. Neiter Debtor's Counsel: Stephen R. Wade, Esq. The Law Offices of Stephen R Wade 400 N. Mountain Ave. Ste. 214B Upland, CA 91786 Tel: (909) 985-6500 Fax: (909) 985-2865 Email: dp@srwadelaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-11196.pdf The petition was signed by Rany Orr, President of the company. RD MOTORS: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: RD Motors, Inc. 8200 W. Colfax Avenue Lakewood, CO 80214 Bankruptcy Case No.: 09-10952 Chapter 11 Petition Date: January 23, 2009 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Elizabeth E. Brown Debtor's Counsel: Jeffrey Weinman, Esq. 730 17th St., Ste. 240 Denver, CO 80202 Tel: (303) 572-1010 Email: jweinman@epitrustee.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of 20 largest unsecured creditors together with its petition. The petition was signed by Ronald M. Drake, President of the company. RED HAT: S&P Raises Corporate Credit Rating to 'BB' from 'BB-' -------------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its corporate credit rating on Raleigh, North Carolina-based Red Hat, Inc. to 'BB' from 'BB-', reflecting the company's consistent operating performance and improved capital structure. The outlook is stable. "The ratings reflect Red Hat's relatively narrow business profile and modest operating scale, as well as rapid technology evolution," said Standard & Poor's credit analyst Martha Toll- Reed. S&P believes these concerns partly are offset by barriers to entry provided by the large number of independent software and hardware vendors which certify their products to work with Red Hat, as well as liquidity, balance sheet strength and cash flow that are good for the rating level. Red Hat provides open-source operating and middleware software and related services predominantly to large enterprise customers. The company sells subscriptions for its operating and middleware products, entitling the customer to support and software updates. Red Hat supplements its software business with training and consulting services, and it has a small presence in the desktop and embedded operating systems markets. The company works with a global open-source community of software developers, which it uses to reduce the cost and development time of its Linux-based software. RENEW ENERGY: Case Summary & 25 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Renew Energy LLC fka Jefferson Junction LLC fka Jefferson Grain Processors, LLC fka OPM of Jefferson LLC N5355 Junction Road Jefferson, WI 53549 312-715-5000 Bankruptcy Case No.: 09-10491 Type of Business: The Debtor operates an ethanol plant facility. See: http://www.renewenergyllc.com/ Chapter 11 Petition Date: January 30, 2009 Court: Western District of Wisconsin (Madison) Judge: Robert D. Martin Debtor's Counsel: Christopher Combest, Esq. ccombest@quarles.com Quarles & Brady LLP 500 W. Madison Street, Suite 3700 Chicago, IL 60661 Tel: (312) 715-5091 Fax: (312) 632-1727 Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Olsen's Mill, Inc. Corn $20,021,575 Attn: Paul Olsen N2084 State Road 49 Auroraville, WI 54923 Tel: (920) 361-4420 Utica Energy Trade Debt $3,927,281 Attn: Dan Clark Insurance Premiums 4995 State Road 91 and Claims Oshkosh, WI 54904-9416 processing WI Dept of Transportation Loan $2,810,000 Attn: John Sobotik 4802 Sheboygan Ave., Rm. 115B PO Box 791 Madison, WI 53707 Tel: (608) 267-6734 C.R. Meyer and Sons Co. Construction $959,937 Attn: Pete LeCompte Engineers 895 W. 20th Ave. Oshkosh, WI 54903 Tel: (920) 235-3419 Integrys Energy Services, Inc. Natural Gas $7 53,415 Attn: Tim Schmitt 124 W. Broadway, Suite 300 Madison, WI 53716 Tel: (608) 222-5183 Barr-Rosin, Inc. Provider of Dyer $741,611 Attn: Colin Crankshaw for Production - 255 38th Ave. Equipment St. Charles, IL 60174 Tel: (630) 584-4406 Danisco USA, Inc. Chemicals $654,329 Attn: Jodi Henderson 2600 Kennedy Drive Beloit, WI 53511 Tel: (608) 365-4526 American Exchanger Services Construction $576,694 Inc. Contractors Attn: Joe Bruno 11811 W. Whitaker Ave. Greenfield, WI 53228 Tel: (414) 433-4839 Cereal Process Technologies Design $559,831 Attn: Steve Rosen Engineering Firm 7777 Walnut Grove Rd. PO Box 24 Memphis, TN 38120 Tel: (314) 291-8595 Milport Enterprises Chemicals $518,844 Attn: Jon Denman 2829 South 5th Court Milwaukee, WI 53207 Tel: (414) 769-0167 Energy Management Corp. Exec. Management $509,793 Attn: Dan Clark Salaries, 4995 State Road 91 Benefits & fees Oshkosh, WI 54904-9416 Tel: (920) 230-3845 Delta-T Design $306,942 Engineering Town of Aztalan Property Taxes $262,670 Plains Marketing Canada, L.P. Supplier $231,180 WE Energies Terry Cerni Electric/Natural $211,021 - Legal Dep't Gas Alltech, Inc. Chemicals $186,700 RMT, Inc. Environmental $102,798 Watertech of America, Inc. Boiler Chemical $85,767 Powerhouse Equipment & Boiler Lease $79,500 Engineering Co., Inc. Centrisys Equipment $76,358 Tyco Valve Systems Replacement Parts $72,224 Arkema, Inc. Parts provider $72,143 Great Lakes Mechanical General $68,175 Contractor Chicago Freight Car Leasing Car Lease $59,791 Cargill, Inc. Ag Business $49,036 The petition was signed by Jeffrey M. White, chief executive officer. RICHMOND'S ENTERPRISE: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Richmond's Enterprise, Inc. a/k/a Jeffrey Richmond a/k/a Jacqulyn McPherson a/k/a Brenda Richmond 115 Horace Street Dayton, OH 45402 Bankruptcy Case No.: 09-30277 Chapter 11 Petition Date: January 22, 2009 Court: United States Bankruptcy Court Southern District of Ohio (Dayton) Debtor's Counsel: Alfred Wm. Schneble, III, Esq. Phillips Law Firm, Inc. 9521 Montgomery Road Cincinnati, OH 45242 Tel: (513) 985-2500 Fax: (513) 985-2503 Email: bud@phillipslawfirm.com Total Assets: $3,941,843 Total Debts: $3,383,527 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ohsb09-30277.pdf The petition was signed by Jeffery Richmond, President of the company. RICKY DEJAGER: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Ricky Lee DeJager d/b/a DeJager Construction & Log Homes d/b/a Crestview Homes 116 Okie Dokie Lane Yankton, SD 57078 Bankruptcy Case No.: 09-40031 Chapter 11 Petition Date: January 23, 2009 Court: United States Bankruptcy Court District of South Dakota (Southern (Sioux Falls)) Debtor's Counsel: Laura L. Kulm Ask, Esq. Gerry & Kulm Ask, Prof LLC PO Box 966 Sioux Falls, SD 57101-0966 Tel: (605) 336-6400 Fax: (605) 336-6842 Email: ask@sgsllc.com Total Assets: $1,000,001 to $10,000,000 Total Debts: $1,000,001 to $10,000,000 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/sdb09-40031.pdf The petition was signed by Ricky Lee DeJager and Carolyn Dawn De Jager. RISKMETRICS GROUP: Moody's Affirms 'Ba3' Corp. Family Rating ------------------------------------------------------------ Moody's Investors Service affirmed the Ba3 Corporate Family Rating of RiskMetrics Group Holdings LLC (RiskMetrics Holdings) and changed the rating outlook to positive from stable. "The positive outlook considers the company's track record of solid revenue and earnings growth since the acquisition of Institutional Shareholder Services, Inc. in early 2007 and the expectation of further profit growth in 2009 despite difficult conditions in the financial sector," stated Lenny Ajzenman, Vice President and Senior Credit Officer. The Ba3 CFR also reflects leading market positions in risk management and corporate governance end markets, very good liquidity and a stable, subscription-based business model. Credit metrics are strong for the Ba3 rating category, with significant cushion in cash flow metrics. However, the ratings are principally constrained by the limited size of its earnings base, concentration of its customer base in the financial sector and concern that a difficult environment for financial sector clients could lead to declining retention rates and slower new subscription sales. These ratings were affirmed: * Corporate Family Rating, Ba3 * Probability of Default rating, B1 * $25 million first lien revolver due 2013, Ba3 (LGD 3, 33%) * $300 million first lien term loan due 2014, Ba3 (LGD 3, 33%) The last rating action on RiskMetrics was on February 1, 2008 at which time Moody's upgraded the CFR to Ba3 from B1, concluding a review for possible upgrade initiated on January 16, 2008. On January 30, 2008, the company's parent holding company, RiskMetrics Group, Inc. completed an initial public offering of its common stock at a price of $17.50 per share. Based in New York, RiskMetrics is a leading provider of risk management and corporate governance products and services to participants in the global financial markets. The company generally provides it products and services across multiple asset classes, markets and geographies to a customer base that includes asset managers, hedge funds, pension funds, banks, insurance companies, financial advisors and corporations. RITE AID: Renews Receivables Financing Deal Until January 2010 -------------------------------------------------------------- Rite Aid Corporation disclosed in a regulatory filing with the Securities and Exchange Commission that the company entered into an additional Amendment with the parties that provides for a renewal of the commitments under the Receivables Financing Agreement for a 364-day period, commencing Jan. 22, 2009, and ending Jan. 21, 2010. On Jan. 15, 2009, the company entered into an amendment to its Receivables Financing Agreement, by and among Rite Aid Funding II, CAFCO, LLC, CRC FUNDING, LLC, Falcon Asset Securitization Company LLC, Variable Funding Capital Company LLC, as the investors, Citibank, N.A., JPMorgan Chase Bank, N.A. and Wachovia Bank, National Association, as the banks, Citicorp North America, Inc., as program agent, CNAI, JPMorgan and Wachovia, as investor agents, Rite Aid Hdqtrs. Funding, Inc., as collection agent, and certain other parties thereto as originators, extending their commitment to the Receivables Financing Agreement, which had been scheduled to expire on Jan. 15, 2009, to Jan. 22, 2009. Under the terms of the Receivables Financing Agreement dated as of Sept. 21, 2004, Rite Aid sells substantially all of its eligible third party pharmaceutical receivables to a special purpose entity and retains servicing responsibility. The assets of the SPE are not available to satisfy the creditors of any other person, including any of the company's affiliates. These agreements provide for the company to sell, and for the SPE to purchase, these receivables. The SPE then transfers interests in these receivables to various commercial paper vehicles. Under the terms of the securitization agreements, the total amount of interest in receivables that can be transferred to the CPVs is $650 million. The amounts available to the company under the Receivables Financing Agreement are dependant upon a formula that takes into account such factors as write-off history, receivable concentrations and other adjustments. Adjustments to the formula are at the discretion of the CPVs. If any of the CPVs fail to renew their commitment under these agreements, the company has access to a backstop facility, which is backed by the banks under the securitization agreement, and which expires in September 2010, to provide receivable financing to the company. Similar to the Receivables Financing Agreement, amounts available under the backstop facility would be dependent upon a formula that takes into account such factors as default history, obligor concentrations and potential dilution and adjustments to the formula would be at the discretion of the banks. The company continues to have access to the backstop facility, which expires in September 2010. The CPVs have the discretion under the Receivables Financing Agreement to adjust the amount of transferred receivables permitted to be outstanding at any one time based on a formula that takes into account a number of factors, including obligor concentrations, and under the Renewal Amendment, the CPVs have lowered certain concentration limits which will result in a step- down in borrowing availability beginning Jan. 22, 2009, of approximately $100 million and an additional step-down of approximately $100 million beginning Feb. 20, 2009. To replace the loss of borrowing availability under the Receivables Financing Agreement, the company has executed a Commitment Letter with Citigroup Global Markets Inc., pursuant to which Citi will act as sole lead arranger and sole bookrunning manager on a new second priority accounts receivable securitization term loan. The Second Lien Facility will be up to $200 million, of which Citi has already committed to provide $100 million of the Second Lien Facility and arrange on a best efforts basis a syndicate to provide up to an additional $100 million. Citi's obligations with respect to the syndication continue through the earlier of (a) the closing of the Second Lien Facility and (b) Feb. 20, 2009. There can be no assurance that these efforts will be successful or that the Second Lien Facility will be in an aggregate amount in excess of the currently committed $100 million facility. Amounts outstanding under the Second Lien Facility will be secured by second priority liens on the eligible third party pharmaceutical receivables securing the Existing Facility. The Second Lien Facility is expected to close on or about Feb. 20, 2009, and mature on Sept. 14, 2010. The company has four primary sources of liquidity: (i) cash and cash equivalents, (ii) cash provided by operating activities, (iii) the sale of accounts receivable under its receivable securitization agreements and (iv) the revolving credit facility under its senior secured credit facility. Based upon its current levels of operations, planned improvements in its operating performance, the approval by its stockholders of the proposed reverse stock split and the opportunities that it believes the acquisition of Brooks Eckerd provides, the company believes that cash flow from operations together with available borrowings under the senior secured credit facility, sales of accounts receivable under the Existing Facility and the new Second Lien Facility that has been committed to by Citi and other sources of liquidity will be adequate to meet its requirements for working capital, debt service and capital expenditures for the foreseeable future. A full-text copy of the Amendment No. 10 to Receivables Financing Agreement is available for free at: http://ResearchArchives.com/t/s?38cb A full-text copy of the COMMITMENT LETTER is available for free at: http://ResearchArchives.com/t/s?38cc In connection with the Commitment Letter and syndication of the Second Lien Facility, certain information relating to the third party pharmaceutical receivables transferred under the Receivables Financing Agreement is being provided to potential participants in the Second Lien Facility. A full-text copy of the ADDITIONAL RECEIVABLES DATA is available for free at http://ResearchArchives.com/t/s?38cd About Rite Aid Corporation Headquartered in Camp Hill, Pennsylvania, Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- is a drugstore chain with more than 5,000 stores in 31 states and the District of Columbia. * * * As reported in the Troubled Company Reporter on Jan. 26, 2009, Moody's Investors Service downgraded the long term ratings of Rite Aid Corporation, including its probability of default and corporate family ratings to Caa2 from Caa1, with a negative outlook. Moody's also affirmed Rite Aid's speculative grade liquidity rating at SGL-4. The downgrade acknowledges the near to medium term pressures that Rite Aid's liquidity faces should it be unable to generate very significant improvements in its free cash flow (which is currently negative). The downgrade also reflects Moody's opinion that the current capital structure is likely unsustainable at the company's current level of operating performance. RYLAND GROUP: Signs 4th Amendment to Credit Pact With JPMorgan -------------------------------------------------------------- On January 22, 2009, The Ryland Group, Inc., entered into the Fourth Amendment to Credit Agreement, among the company, J.P. Morgan Chase Bank, N.A., as Agent, and the lenders listed therein, which amended its $550.0 million unsecured revolving credit facility. The Amendment, among other things: a) decreased the company's borrowing availability from $550.0 million to $200.0 million; b) changed the definition of consolidated tangible net worth and reduced the base amount for the minimum consolidated tangible net worth covenant default limit to $300.0 million; c) amended the leverage ratio restriction to be no more than 55 percent; d) agreed to establish certain liquidity reserve accounts in the event the company fails to satisfy an interest coverage test and an adjusted cash flow from operations to interest incurred test; e) changed the restriction of the company's book value of unsold land to 1.20x its consolidated tangible net worth; f) changed the borrowing base to allow for 100 percent use of unrestricted cash in excess of $25.0 million, less any drawn balances on the revolving credit facility; g) established a requirement for the company to cash collateralize a pro rata share of a defaulting lender's letter of credit and swing line exposure; h) established an annual common stock cash dividend limit of $10.0 million; and i) increased the pricing grid, which is based on the company's leverage ratio and public debt rating, as well as the interest coverage ratio. The Credit Agreement's maturity date of January 2011 remains unchanged and the uncommitted accordion feature has been reduced to $300.0 million. Pro forma Pro rata Existing Commitment For Lender Share Commitment 4th Amendment ------ -------- ---------- ------------- JPMORGAN/ WASHINGTON MUTUAL BANK 13.3216% $73,268,636.97 $26,643,140.72 REGIONS BANK 4.4111 24,261,138.07 8,822,232.03 BANK OF AMERICA, N.A. 8.8222 48,522,276.14 17,644,464.05 BANK OF IRELAND 1.9850 10,917,512.13 3,970,004.41 BARCLAYS BANK PLC 6.6167 36,391,707.10 13,233,348.04 CALYON NY BRANCH 2.6467 14,556,682.84 5,293,339.21 CHANG HWA COMMERCIAL BANK LTD. 0.8822 4,852,227.61 1,764,446.40 CITICORP NORTH AMERICA INC. 8.8222 48,522,276.14 17,644,464.05 CITY NATIONAL BANK, N.A. 2.2056 12,130,569.04 4,411,116.01 COMERICA BANK 3.0878 16,982,796.64 6,175,562.41 COUNTRYWIDE BANK, N.A. 6.6167 36,391,707.10 13,233,348.04 FIRST COMMERCIAL BANK 0.8822 4,852,227.61 1,764,446.40 GUARANTY BANK 5.7345 31,539,479.49 11,468,901.63 MALAYAN BANK BERHAD 0.4411 2,426,113.81 882,223.20 NATIXIS, SA 3.0878 16,982,796.64 6,175,562.41 PNC 3.9700 21,835,024.26 7,940,008.82 THE ROYAL BANK OF SCOTLAND PLC 8.8222 48,522,276.14 17,644,464.05 SUNTRUST BANK, INC. 5.2933 29,113,365.68 10,586,678.43 UBS AG 3.5289 19,408,910.45 7,057,785.62 WACHOVIA BANK, N.A. 8.8222 48,522,276.14 17,644,464.05 --------- -------------- -------------- 100% $550,000,000.00 $200,000,000.00 A full-text copy of the Fourth Amendment is available for free at: http://researcharchives.com/t/s?38e1 About Ryland Group Based in Calabasas, California and founded in 1967, The Ryland Group Inc. (NYSE: RYL) -- http://www.ryland.com/-- is one of the nation's largest homebuilders and a leading mortgage-finance company. The company currently operates in 28 markets across the country and has built more than 275,000 homes and financed more than 230,000 mortgages since its founding in 1967. * * * As of December 31, 2008, the company's balance sheet showed total assets of $1,862,988,000, total liabilities of $1,123,810,000, minority interest of $13,816,000, resulting in total stockholders' equity of $725,362,000. As reported in the Troubled Company Reporter on Dec. 16, 2008, Fitch Ratings has downgraded Ryland Group, Inc.'s issuer default rating and outstanding debt ratings: (i) IDR to 'BB' from 'BB+'; (ii) senior unsecured to 'BB' from 'BB+'; and (iii) unsecured bank credit facility to 'BB' from 'BB+'. The rating outlook remains negative. The TCR reported on Nov. 28, 2008, that Moody's Investors Service downgraded all of the ratings of The Ryland Group, Inc., including its corporate family rating to Ba3 from Ba2, its probability of default rating to Ba3 from Ba2, and its senior notes rating to Ba3 from Ba2. At the same time, Moody's affirmed the company's speculative grade liquidity rating at SGL-3. The outlook remains negative. RYLAND GROUP: Posts $396,585,000 Net Loss for Year Ended Dec. 31 ---------------------------------------------------------------- The Ryland Group, Inc., disclosed in a regulatory filing dated January 28, 2009, the results for its fourth quarter ended December 31, 2008. -- Cash from operations totaled $78.7 million for the quarter ended December 31, 2008; -- Cash balance of $423.3 million as of December 31, 2008; -- Current tax receivable of $160.7 million as of December 31, 2008; -- Net debt-to-total capital ratio was 33.6 percent at December 31, 2008; -- Pretax charges for inventory valuation and other adjustments were $48.9 million, option deposits and feasibility write-offs were $6.2 million, and losses from land sales totaled $19.7 million for the fourth quarter of 2008; -- Loss of $1.40 per share for the quarter ended December 31, 2008, included inventory valuation adjustments, write-offs, and impairments to goodwill and joint ventures, compared to a loss of $4.80 per share for the same period in 2007; -- Consolidated revenues of $528.2 million for the quarter ended December 31, 2008, reflected a decrease of 38.6 percent from the quarter ended December 31, 2007; -- Housing gross profit margins averaged 10.2 percent, excluding inventory valuation adjustments and write-offs, for the quarter ended December 31, 2008, compared to 14.0 percent for the same period in 2007. Including the inventory valuation adjustments, housing gross profit margins averaged 0.1 percent for the fourth quarter of 2008, compared to negative 15.3 percent for the same period in 2007; -- Selling, general and administrative expenses, as a percentage of homebuilding revenue, were 11.7 percent for the fourth quarter of 2008, compared to 10.2 percent for the fourth quarter of 2007. Excluding severance, relocation, model abandonment and goodwill impairment costs and charges, selling, general and administrative expenses, as a percentage of revenue, were 9.1 percent for the fourth quarter of 2008; -- Closings totaled 1,964 units for the quarter ended December 31, 2008, reflecting a 35.8 percent decrease from the same period in the prior year; -- New orders in the fourth quarter of 2008 declined 65.3 percent to 554 units from 1,596 units in the fourth quarter of 2007; -- Inventory of houses started and unsold decreased by 22.4 percent to 639 units at December 31, 2008, from 823 units at December 31, 2007. Results for the Fourth Quarter of 2008 For the fourth quarter ended December 31, 2008, the company reported a consolidated net loss of $59.9 million, or $1.40 per diluted share, compared to a loss of $201.9 million, or $4.80 per diluted share, for the same period in 2007. The company had inventory and other valuation adjustments, including goodwill and joint venture impairments, and option deposit and feasibility write-offs that totaled $55.1 million during the fourth quarter ended December 31, 2008. The homebuilding segments reported a pretax loss of $82.7 million during the fourth quarter of 2008, compared to a pretax loss of $211.3 million for the same period in 2007. This reduction was primarily due to lower inventory valuation adjustments and write-offs, partially offset by a decline in closings and margins and higher losses from land sales. Homebuilding revenues decreased 38.0 percent to $513.5 million for the fourth quarter of 2008, compared to $828.8 million for the same period in 2007. This decline was primarily attributable to closings totaling 1,964 units for the fourth quarter ended December 31, 2008, reflecting a 35.8 percent decrease from closings totaling 3,061 units for the same period in the prior year, and to an 8.6 percent reduction in the average closing price of a home, which declined to $246,000 for the quarter ended December 31, 2008, from $269,000 for the same period in 2007. Homebuilding revenues for the fourth quarter of 2008 included $29.6 million from land sales, which contributed a net loss of $19.7 million to pretax losses, compared to $5.9 million from land sales for the fourth quarter of 2007, which contributed a net loss of $223,000 to pretax losses. New orders of 554 units for the quarter ended December 31, 2008, represented a decrease of 65.3 percent, compared to new orders of 1,596 units for the same period in 2007. For the fourth quarter of 2008, new order dollars declined 66.9 percent to $122.0 million from $368.7 million for the fourth quarter of 2007. Backlog at the end of the fourth quarter of 2008 decreased 47.5 percent to 1,559 units from 2,969 units at September 30, 2008, and declined 45.7 percent from 2,869 units at the end of the fourth quarter of 2007. At December 31, 2008, the dollar value of the company's backlog was $407.1 million, reflecting a decrease of 47.0 percent from September 30, 2008, and a decline of 48.2 percent from December 31, 2007. Housing gross profit margins averaged 10.2 percent, excluding inventory valuation adjustments and write-offs, for the quarter ended December 31, 2008, compared to 14.0 percent for the same period in 2007. This decrease was primarily due to price reductions related to home deliveries for the fourth quarter of 2008. Including the inventory valuation adjustments, housing gross profit margins averaged 0.1 percent for the fourth quarter of 2008, compared to negative 15.3 percent for the same period in 2007. The gross profit margin from land sales was negative 66.5 percent for the fourth quarter ended December 31, 2008, compared to negative 3.8 percent for the same period in 2007. Selling, general and administrative expenses, as a percentage of homebuilding revenue, were 11.7 percent for the fourth quarter of 2008, compared to 10.2 percent for the fourth quarter of 2007. This increase was primarily attributable to a decline in revenues, as well as to severance, relocation, model abandonment and goodwill impairment costs and charges that collectively totaled $13.5 million, partially offset by lower marketing and advertising costs per unit. Excluding these costs and charges, selling, general and administrative expenses, as a percentage of revenue, were 9.1 percent for the fourth quarter of 2008, compared to 9.9 percent for the same period in 2007. Selling, general and administrative expense dollars for the fourth quarter ended December 31, 2008, decreased $24.5 million from the same period in the prior year. The homebuilding segments capitalized all interest incurred during the fourth quarters ended December 31, 2008 and 2007. Corporate expenses were $10.8 million for the fourth quarter of 2008, compared to $10.9 million for the same period in the prior year. Losses in the market value of investments included within the company's 2008 and 2007 benefit plans totaled $3.1 million and $2.4 million, respectively, and were recognized in corporate expenses. During the fourth quarter of 2008, the company provided $78.7 million of cash from operations, used $2.4 million for investing activities and provided $2.1 million from financing activities. The company's financial services segment, which includes mortgage, title, escrow and insurance services, reported pretax earnings of $5.0 million for the fourth quarter of 2008, compared to pretax earnings of $16.3 million for the same period in 2007. This decrease was primarily attributable to a 34.5 percent decline in the number of mortgages originated due to a slowdown in the homebuilding market and to a 6.2 percent decrease in average loan size, as well as to a $3.7 million decline in sales of insurance renewal rights in the fourth quarter of 2008, compared to the fourth quarter of 2007. The capture rate of mortgages originated for homebuilding customers of the company was 81.0 percent for the fourth quarter of 2008, compared to 78.5 percent for the same period in 2007. Annual Results for 2008 For the twelve months ended December 31, 2008, the company reported a consolidated net loss of $396.6 million, or $9.33 per diluted share, compared to a loss of $333.5 million, or $7.92 per diluted share, for the same period in 2007. The company had inventory and other valuation adjustments, including goodwill and joint venture impairments, and option deposit and feasibility write-offs that totaled $328.3 million, as well as a noncash income tax charge of $143.8 million related to its deferred tax valuation allowance, for the twelve months ended December 31, 2008. The homebuilding segments reported a pretax loss of $385.9 million during the twelve months ended December 31, 2008, compared to a pretax loss of $425.0 million for the same period in 2007. This decrease was primarily due to lower inventory valuation adjustments and write-offs, partially offset by a decline in closings and margins and higher losses from land sales. Homebuilding revenues decreased 35.4 percent to $1.9 billion for the twelve months ended December 31, 2008, compared to $3.0 billion for the same period in 2007. This decline was primarily attributable to closings totaling 7,352 units for the twelve months ended December 31, 2008, reflecting a 28.8 percent decrease from closings totaling 10,319 units for the same period in the prior year, and to an 11.6 percent decline in the average closing price of a home, which declined to $252,000 for the twelve-month period ended December 31, 2008, from $285,000 for the same period in 2007. Homebuilding revenues for the twelve months ended December 31, 2008, included $55.0 million from land sales, which contributed a net loss of $25.8 million to pretax losses, compared to $21.2 million from land sales for the same period in 2007, which contributed a net gain of $2.2 million to pretax losses. New orders of 6,042 units for the twelve months ended December 31, 2008, represented a decrease of 32.7 percent, compared to new orders of 8,982 units for the same period in 2007. For the twelve months ended December 31, 2008, new order dollars declined 39.2 percent to $1.5 billion from $2.4 billion for the same period in the prior year. Housing gross profit margins averaged 11.6 percent, excluding inventory and joint venture valuation adjustments and write-offs, for the twelve months ended December 31, 2008, compared to 17.1 percent for the same period in 2007. This decrease was primarily due to price reductions and increased sales incentives related to home deliveries for the twelve months of 2008. Including the inventory valuation and other adjustments, housing gross profit margins averaged negative 3.2 percent for the twelve months ended December 31, 2008, compared to negative 0.4 percent for the same period in 2007. The gross profit margin from land sales was negative 47.0 percent for the twelve months ended December 31, 2008, compared to 10.3 percent for the same period in 2007. Selling, general and administrative expenses, as a percentage of homebuilding revenue, were 13.1 percent for the twelve months ended December 31, 2008, compared to 11.9 percent for the same period in the prior year. This increase was primarily attributable to a decline in revenues, as well as to severance, relocation, model abandonment and goodwill impairment costs and charges that collectively totaled $25.9 million, partially offset by lower marketing and advertising costs per unit. Excluding these costs and charges, selling, general and administrative expenses, as a percentage of revenue, were 11.7 percent for the year ended December 31, 2008, compared to 11.0 percent for the same period in 2007. For the twelve months ended December 31, 2008, selling, general and administrative expense dollars decreased $101.1 million from the same period in the prior year. The homebuilding segments capitalized all interest incurred during the twelve-month periods ended December 31, 2008 and 2007. Corporate expenses were $42.3 million for the twelve months ended December 31, 2008, compared to $35.6 million for the same period in the prior year. This increase was primarily due to a $5.7 million rise in losses within the market value of investments included in the company's benefit plans. The company's financial services segment, which includes mortgage, title, escrow and insurance services, reported pretax earnings of $23.0 million for the twelve months ended December 31, 2008, compared to pretax earnings of $40.9 million for the same period in 2007. This decrease was primarily attributable to a 26.4 percent decline in the number of mortgages originated due to a slowdown in the homebuilding markets, a 10.1 percent decrease in average loan size and a $2.5 million decline in sales of insurance renewal rights in 2008, compared to 2007, partially offset by a $1.7 million gain related to the 2008 implementation of Staff Accounting Bulletin No. 109, which requires that servicing rights related to interest rate lock commitments be recorded at fair value. The capture rate of mortgages originated for the company's homebuilding customers was 82.2 percent for the twelve months ended December 31, 2008, compared to 78.8 percent for the same period in 2007. Overall Effective Tax Rate The company's effective tax benefit rate was 2.3 percent for the year ended December 31, 2008, compared to an effective tax benefit rate of 20.6 percent for the same period in 2007. This decrease was primarily due to the company's deferred tax valuation allowance. Due to the uncertainty of current market conditions, the company is unable to provide precise annual effective rate guidance at this time. Subsequent Events Subsequent to December 31, 2008, these events occurred: -- The company amended its $550.0 million revolving credit facility by reducing its borrowing capacity to $200.0 million and by modifying several of its covenants, which included changing the definition of its consolidated tangible net worth covenant; amending its leverage ratio; changing the borrowing base; and establishing certain liquidity reserve accounts in the event the company fails to satisfy an interest coverage test and an adjusted cash flow from operations to interest incurred test. The Credit Agreement's maturity date of January 2011 remains unchanged and the uncommitted accordion feature has been reduced to $300.0 million from $1.5 billion. -- Ryland Mortgage Company entered into a repurchase agreement with Guaranty Bank and Buyers, which provides for borrowings up to $60.0 million in funding for its mortgage origination operations. The RMC Repurchase Agreement contains representations, warranties, covenants and provisions defining events of default, which require RMC to maintain a minimum net worth and certain financial ratios. This repurchase facility matures in January 2010. -- The company repurchased $46.6 million of its senior notes at a significant discount in the open market. A full-text copy of the company's financial statements is available for free at: http://researcharchives.com/t/s?38e2 About Ryland Group Based in Calabasas, California and founded in 1967, The Ryland Group Inc. (NYSE: RYL) -- http://www.ryland.com/-- is one of the nation's largest homebuilders and a leading mortgage-finance company. The company currently operates in 28 markets across the country and has built more than 275,000 homes and financed more than 230,000 mortgages since its founding in 1967. * * * As of December 31, 2008, the company's balance sheet showed total assets of $1,862,988,000, total liabilities of $1,123,810,000, minority interest of $13,816,000, resulting in total stockholders' equity of $725,362,000. As reported in the Troubled Company Reporter on Dec. 16, 2008, Fitch Ratings has downgraded Ryland Group, Inc.'s issuer default rating and outstanding debt ratings: (i) IDR to 'BB' from 'BB+'; (ii) senior unsecured to 'BB' from 'BB+'; and (iii) unsecured bank credit facility to 'BB' from 'BB+'. The rating outlook remains negative. The TCR reported on Nov. 28, 2008, that Moody's Investors Service downgraded all of the ratings of The Ryland Group, Inc., including its corporate family rating to Ba3 from Ba2, its probability of default rating to Ba3 from Ba2, and its senior notes rating to Ba3 from Ba2. At the same time, Moody's affirmed the company's speculative grade liquidity rating at SGL-3. The outlook remains negative. SEMGROUP LP: Seeks June 17 Extension of Removal Periods ------------------------------------------------------- Pursuant to Section 105(a) of the Bankruptcy Code and Rule 9006(b) of the Federal Rules of Bankruptcy Procedure, SemGroup L.P. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend until June 17, 2009, the period within which all Debtors, including SemCap, L.L.C., and SemGroup Holdings, L.P., may remove actions pending on or before the Petition Date. The Debtors obtained an extension of the Removal Period until February 17, 2009. With respect to SemCap and SemGroup Holdings, the deadline to remove civil actions expired on January 20, 2009. Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, explains that the Debtors need additional time for review and determine which lawsuits to remove. He says the Debtors have focused on stabilizing their businesses and ensuring a smooth transition into Chapter 11, and evaluating their assets for potential sale. Extending the Removal Period will permit the Debtors to timely review and properly evaluate their pending litigation matters, without prejudice to any counterparty, Mr. Collins tells the Court. The Court will convene a hearing on February 5, 2009, to consider the Debtors' request. By application of Rule 9006-2 of the Local Rules of Bankruptcy Practice and Procedures of the United States Bankruptcy Court for the District of Delaware, the Removal Period is automatically extended through the conclusion of that hearing. About SemGroup LP SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland, and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on Nov. 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SEMGROUP LP: SemCap Unit Seeks May 20 Lease Disposition Deadline ---------------------------------------------------------------- Debtors SemCap, L.L.C., and SemGroup Holdings, L.P., have until February 19, 2009, to decide whether to assume or reject unexpired non-residential real property leases. Pursuant to Section 365(d)(4) of the Bankruptcy Code, the Debtors ask the U.S. Bankruptcy Court for the District of Delaware to extend until May 20, 2009, their lease decision deadline. Section 365(d)(4)(A)-(B) provides that an unexpired real property lease under which the debtor is the lessee will be deemed rejected, and the trustee will immediately surrender that lease to the lessor, if the trustee does not assume or reject the unexpired lease by the earlier of (i) the date that is 120 days after the Petition Date, or (ii) the date of the entry of an order confirming a plan of reorganization. The same statute provides that the Court may also extend the Lease Decision Period prior to the expiration of the deadline for cause. According to Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, the extension of the Lease Decision Period will be in the best interests of the Debtors' estates, since the extension affords them the opportunity to complete a thorough review of the Unexpired Leases to be assumed, assigned, or rejected. Since the Petition Date, the Debtors have focused on stabilizing their businesses and ensuring a smooth transition into Chapter 11, and evaluating their assets for potential sale. Extending the Lease Decision Period to May 20, 2009, enables them to maximize the value of their estates by avoiding unnecessary administrative costs associated with the unexpired leases, Mr. Collins asserts. The Court will convene a hearing on February 5, 2009, to consider the Debtors' request. About SemGroup LP SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland, and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on Nov. 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SEMGROUP LP: Creditors Panel May Hire Cole Schotz as Co-Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized the Official Committee of Unsecured Creditors in SemGroup L.P.'s and its affiliates bankruptcy cases to retain Cole, Schotz, Meisel, Forman & Leonard, P.A., as co-counsel nunc pro tunc to November 4, 2008. Cole Schotz will: (a) advise the Committee with respect to its rights, duties and powers in the Debtors' Chapter 11 cases; (b) assist and advise the Committee in its consultation with the Debtors relative to the administration of their Chapter 11 cases; (c) assist the Committee in analyzing the claims of the Debtors' creditors and the Debtors' capital structure; (d) assist the Committee in its investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors and of the operation of the Debtors' businesses; (e) assist the Committee in its investigation of the liens and claims of the Debtors' prepetition lenders and the prosecution of any claims or causes of action revealed by that investigation; (f) assist the Committee in its analysis of, and negotiations with, the Debtors, the Committee or any third party concerning matters related to, among other things, the assumption or rejection of certain leases of non- residential real property and executory contracts, asset dispositions, financing of other transactions and the terms of one or more plans of reorganization for the Debtors and accompanying disclosure statements and related plan documents; (g) assist and advise the Committee in communicating with unsecured creditors regarding significant matters in the Debtors' Chapter 11 cases; (h) represent the Committee at hearings and other proceedings; (i) review and analyze applications, orders, statements of operations and schedules filed with the Court and advise the Committee as to their propriety; (j) assist the Committee in preparing pleadings and applications as may be necessary in furtherance of the Committee's interests and objectives; (k) prepare, on behalf of the Committee, any pleadings, including, without limitation, motions, memoranda, complaints, adversary complaints, objections or comments in connection with any of the foregoing; and (l) perform other legal services as may be required or are otherwise deemed to be in the interests of the Committee in accordance with the Committee's powers and duties. Cole Schotz will be paid according to its customary hourly rates. The Committee anticipates that these professionals will take a lead in representing the Committee: Norman L. Pernick, Esq. $650 J. Kate Stickles, Esq. $480 Karen M. McKinley, Esq. $315 Pauline Z. Ratkowiak, paralegal $190 Cole Schotz will also be reimbursed of any necessary out-of- pocket expenses. Mr. Pernick, Esq., a member of Cole Schotz, ascertains that his firm does not represent any interest adverse to the Committee, Debtors or their estates. He adds that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Deal on Firm's Fees Pursuant to the agreement reached by the Debtors, the Official Committee of Unsecured Creditors, and Bank of America, N.A., during the December 9, 2008, hearing, Cole, Schotz, Meisel, Forman & Leonard, P.A., submitted a revised proposed order. In addition, the revised proposed order states that the Debtors will be authorized to use Cash Collateral in accordance with the terms of the 13-Week Budget, as modified to permit the compensation of Cole Schotz' fees and expenses: -- up to the first $75,000 per month in the aggregate amount of professional fees and expenses incurred by the OPC professional will be paid from the Prepetition Secured Parties' Cash Collateral; -- all professional fees and expenses incurred by the OPC Professionals in excess of $75,000 per month in the aggregate will be paid from the Prepetition Secured Parties' Cash Collateral; -- each dollar of the Prepetition Secured Parties' Cash Collateral used by the Debtors to pay professional fees and expenses incurred by the OPC Professional in excess of $75,000 per month in the aggregate will result in a dollar-for-dollar diminution in favor of the Prepetition Secured Parties; and -- the Debtors will repay the OPC Diminution Claim from the first proceeds of any Producer recoveries in the bankruptcy cases. About SemGroup L.P. SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland, and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq. at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on Nov. 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SEMGROUP LP: Creditors Panel May Hire Ogilvy as Canadian Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized the Official Committee of Unsecured Creditors in SemGroup L.P.'s and its affiliates bankruptcy cases to retain Ogilvy Renault LLP, as its Canadian counsel, effective August 26, 2008. As Canadian counsel, Ogilvy will: (a) advise the Committee with respect to its rights, duties and powers in the Chapter 11 cases as they relate to the CCAA Proceedings; (b) assist and advise the Committee in its consultations with the CCAA Applicants relative to the administration of the Chapter 11 cases insofar as they relate to the CCAA Proceedings; (c) assist the Committee in analyzing the claims of the Debtors' Canadian creditors and the CCAA Applicants' capital structure and in negotiating with those creditors; (d) assist the Committee in its investigation of the acts, conduct, assets, liabilities, intercompany relationships, and claims and financial condition of the CCAA Applicants, the existence of estate causes of action and the operation of the CCAA Applicants' businesses; (e) assist the Committee in investigating interests of United States creditors in Canadian assets; and protecting, preserving and maximizing the value of the Debtors' assets insofar as they relate to the Canadian Proceedings; (f) assist the Committee in its analysis of, and negotiations with, the Canadian Debtors or any third party concerning matters related to, among other things, the terms of one or more plans of reorganization for the Canadian Debtors and accompanying disclosure statements and related plan documents; (g) assist and advise the Committee as to its communications to the general creditor body regarding significant matters in the Chapter 11 cases as they relate to the Canadian Proceedings; (h) represent the Committee at all hearings and other proceedings, insofar as they relate to the Canadian Proceedings, unless attendance by the Committee's main counsel would be more efficient; (i) review and analyze applications, orders, statements of operations and schedules filed with the Canadian Court and advise the Committee as to their propriety, and to the extent deemed appropriate by the Committee, support, join or object thereto; (j) advise and assist the Committee with respect to any Canadian legislative, regulatory or governmental activities; (k) assist the Committee in preparing pleadings and applications as may be necessary in furtherance of the Committee's interests and objectives insofar as they relate to the Canadian Proceedings; (l) prepare, on behalf of the Committee, any pleadings, including without limitation, motions, memoranda, complaints, adversary complaints, objections or comments in connection with any of the Canadian Proceedings or Canadian claims against the Debtors; and (m) perform other legal services as may be required or are otherwise deemed to be in the interests of the Committee in accordance with its powers and duties as set forth in the Bankruptcy Code, Bankruptcy Rules or other applicable law. Ogilvy will be compensated according to its customary hourly rates. The Committee expects that certain Ogilvy professionals will take a lead in the Debtors' bankruptcy cases: Professional Hourly Rates ------------ ------------ Derrick Tay, Esq. $950 Mario Forte, Esq. $750 Orestes Pasparakis, Esq. $590 Jennifer Stam, Esq. $500 Mario Forte, Esq., a partner at Ogilvy, ascertains that his firm does not represent any interest adverse to the Creditors' Committee, the Debtors, or their estates. He also attests that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The Committee asked that Ogilvy's retention be approved effective as of August 26, 2008, as this is the date the Committee retained the firm and the firm commenced providing services on behalf of the Committee. Unfortunately, Bonnie Glantz Fatell, Esq., at Blank Rome LLP, in Wilmington, Delaware, explains that adapting Ogilvy's conflicts process to apply to Chapter 11, as well as negotiating a constructive communication and cooperation initiative with the Canadian Debtors caused a delay in filing the retention application. As of December 19, 2008, Ogilvy has incurred approximately $200,000 of fees. Going forward, Ogilvy's fees will be included in any forecasts submitted to the Debtors concerning the Committee's legal fees in an amount currently estimated to be approximately $75,000 per month, Ms. Fatell said. The Creditors' Committee serves as a fiduciary to all unsecured creditors of the Debtors, its counsel,. A substantial portion of the unsecured creditors include entities holding claims against the Canadian Debtors, including about $600,000,000 of bonds guaranteed by certain of the Canadian Debtors. Thus, the Committee and the Canadian Debtors have recently agreed on an initiative of constructive cooperation and communication. To that end, the Canadian Debtors have recently acknowledged a subcommittee of the Creditors' Committee representing, as a fiduciary, those creditors that have acknowledged Canadian Debtor claims. Moreover, Ms. Fatell said the activities of the Canadian Debtors directly impact all unsecured creditors of the Debtors' estates, including through an overlap of secured bank debt claims and proposed transactions involving the Debtors' assets used or to be used in Canadian operations. The Debtors and the administrative agent for the Debtors' prepetition secured lenders have been actively engaged in the Canadian Companies' Creditors Arrangement Act Proceedings and have charged the Debtors' Chapter 11 estates the costs incurred in connection with that engagement. Bank of America objected to the application, arguing that the Committee's retention of a Canadian counsel is not appropriate since creditors in Canadian insolvency proceedings are not generally entitled to an estate paid professional. BofA asserted that the Committee failed to cite any authority permitting a creditors' committee to retain counsel in a foreign insolvency proceeding. The connection between the Debtors' Chapter 11 cases and the Canadian proceedings does not justify the retention, and expenses associated with the retention, BofA asserted. BofA further argued that retention nunc pro tunc to August 26, 2008, is not warranted, four months after the commencement of the Canadian proceedings. The Application failed to disclose the particular circumstances warranting retroactive approval of the retention, and this should be denied, BofA insisted. Judge Brendan Linehan Shannon found that Ogilvy represents no adverse interest to the Debtors, and allowed the retention. BofA and the Committee have reached an agreement with respect to the budget allocated for the retention of Ogilvy. With respect to the three-month period commencing January 8, 2009, though and including April 8, 2009, Ogilvy will be permitted to incur fees and expenses not exceeding $150,000, which amount will not be applicable to any fees and expenses incurred prior to the specified period. Following the expiration of the Three-Month Term, Ogilvy's retention will terminate subject to extension pursuant to further Court order, upon the consent of the Committee, the Office of the U.S. Trustee, and BofA. All fees and expenses incurred by Ogilvy to investigate the claims and liens of the Prepetition Secured Parties will be applied against the $250,000 aggregate limit of the Prepetition Collateral, Loans under the DIP Agreement, the Collateral or the Carve-Out as these terms are defined in the Final DIP Order. The agreement between the Committee and BofA were contained in a revised proposed order submitted by the Committee through a certification of counsel. About SemGroup L.P. SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland ,and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq. at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on Nov. 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SINCLAIR BROADCAST: Moody's Cuts Corporate Family Rating to 'B1' ---------------------------------------------------------------- Moody's Investors Service downgraded Sinclair Broadcast Group, Inc.'s Corporate Family Rating and Probability of Default Rating, each to B1 from Ba3, and the company's speculative-grade liquidity rating to SGL-3 from SGL-1. Associated debt ratings were lowered as detailed below and LGD assessments were updated to reflect the current debt mix. The rating outlook is negative. Moody's has taken these rating actions: Downgrades: Issuer: Sinclair Broadcast Group, Inc. -- Corporate Family Rating, Downgraded to B1 from Ba3 -- Probability of Default Rating, Downgraded to B1 from Ba3 -- Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-1 -- 4.875% Senior Convertible Notes, Downgraded to B3, LGD5 - 78% from B1, LGD5 - 79% Issuer: Sinclair Television Group, Inc -- Senior Secured Bank Credit Facility, Downgraded to Ba1, LGD2 - 12% from Baa3, LGD2 - 11% -- 8% Senior Subordinated Notes, Downgraded to B1, LGD4 - 52% from Ba3, LGD4 - 50% Outlook Actions: Issuer: Sinclair Broadcast Group, Inc. -- Outlook, Changed To Negative From Stable Issuer: Sinclair Television Group, Inc -- Outlook, Changed To Negative From Stable The downgrades reflect heightened refinancing risk associated with Sinclair's $345 million 3% convertible notes and $150 million 4.875% convertible notes that are putable at par in May 2010 and January 2011, respectively. Moody's expects Sinclair's leverage will increase considerably in 2009 as a result of the advertising downturn, which combined with tight credit markets will make it challenging to refinance or lead to a sizable increase in cash interest expense. In Moody's opinion, Sinclair will continue to generate free cash flow in 2009 and 2010, but not at a level that, combined with unused committed capacity on the $175 million revolver, is sufficient to fund the potential put obligations. Moody's thus believes Sinclair could be at heightened risk of a default or distressed exchange if access to new capital remains limited. The downgrade of the speculative grade liquidity rating to SGL-3 from SGL-1, in particular, largely reflects Moody's expectation that the company's free cash flow generation (after dividends) could fall below the requisite $26 million mandatory term loan amortization level in 2009, assuming the dividend policy remains unchanged. Sinclair has sufficient unused capacity under the revolver (approximately $77 million as of 9/30/08, assuming the $6.4 million commitment from Lehman Brothers remains unfunded) to fund any such shortfall in covering the amortization. Moody's expects Sinclair to generate approximately $15-20 million of free cash flow in 2009 as cost management, retransmission fee growth, and lower capital spending will partially mitigate the anticipated advertising decline. In Moody's opinion, Sinclair's free cash flow would be closer to $60-70 million if the dividend were reduced in the first half of 2009, and this would be sufficient to cover the required term loan amortization. The liquidity rating could be SGL-2 in such a scenario. Given the aforementioned refinancing issues, however, the liquidity rating would likely be downgraded to SGL-4 in the April 2009 time frame if the May 2010 puts are not refinanced by that date. Moody's believes Sinclair will maintain ample cushion with respect to its three financial maintenance covenants under in its bank credit facility, including the ability to absorb EBITDA declines that may be considerably higher than a currently expected 30-35% drop in 2009. The negative rating outlook reflects Moody's concern that an advertising downturn lasting beyond 2009 or one that is deeper than anticipated, or a continuation of the dividend payment policy at current levels, could sustain leverage at elevated levels and further pressure Sinclair's ability to refinance the 2010/2011 puts and an additional $775 million of debt maturing in 2011 and 2012. The last rating action was on July 12, 2007 when Moody's affirmed Sinclair's Ba3 CFR and PDR ratings and upgraded Sinclair's speculative grade liquidity rating to SGL-1 from SGL-2. Sinclair, headquartered in Baltimore, Maryland, is a television broadcaster, operating 58 television stations in 35 markets. Sinclair generated revenue of approximately $757 million for the trailing twelve months ended September 30, 2008. SMURFIT-STONE: Calpine Corrugated Can Use Cash Collateral --------------------------------------------------------- The Hon. Brendan Linehan Shannon of the U.S. Bankruptcy Court for the District of Delaware granted interim authority to Calpine Corrugated, LLC -- Smurfit-Stone Container Corporation's debtor- affiliate -- to use the cash collateral securing prepetition loan obligations to Union Bank of California, N.A. and The CIT Group/Equipment Financing, Inc. The Court will consider final approval of the Debtors' Request on February 23, 2009, at 10:00 a.m. (EST). Parties have until February 17 to file objections. Prior to the Petition Date, Calpine Corrugated funded its operations through: (a) a Loan and Security Agreement dated as of March 30, 2006, wherein Union Bank agreed to make available to Calpine Corrugated a revolving line of credit in the maximum amount of $12,000,000 for working capital purposes -- the Prepetition Revolving Loan. (b) an Amended and Restated Credit Agreement dated as of July 28, 2008, wherein CIT advanced $40,350,000 in term loans to Calpine Corrugated to finance the purchase and installation of certain machinery and equipment -- the Prepetition Term Loan. As of the Petition Date, the outstanding principal amount of the revolving debt under the Prepetition Revolving Loan was approximately $9.2 million, and the outstanding principal amount of the term loans under the Prepetition Term Loan was approximately $36.8 million. Proposed counsel for the Debtors, James F. Conlan, Esq., at Sidley Austin LLP, in Chicago, Illinois, says the CIT Prepetition Obligations are secured by liens and security interests on substantially all assets and property of Calpine Corrugated, including, without limitation, the Cash Collateral and all its proceeds. The Union Bank Prepetition Obligations are secured by liens and security interests on all accounts, inventory, and certain general intangibles of Calpine Corrugated and all its proceeds. Pursuant to an Intercreditor Agreement dated as of March 30, 2006, Union Bank and CIT expressly acknowledged and agreed, among other things, that (i) the liens and security interests of CIT in the Union Bank Collateral will be subject to and subordinate to the liens and security interests of Union Bank in the Union Bank Collateral, but only to the extent that all obligations of Calpine Corrugated under the Union Bank Credit Agreement are not in excess of $12,000,000; and (ii) Union Bank will not have or claim any liens or security interests in any assets of Calpine Corrugated other than the Union Bank Collateral. On July 29, 2008, Smurfit-Stone Container Enterprises, Inc., acquired a 90% equity interest in Calpine Corrugated, for which Smurfit-Stone Container Corporation is the primary containerboard supplier. As part of the acquisition, SSCE agreed to guarantee the Prepetition Obligations, which totaled approximately $46 million as of the Petition Date, on an unsecured basis. Mr. Conlan asserts that Calpine Corrugated has an immediate and critical need to use Cash Collateral in order to preserve and protect the value of its assets. Calpine Corrugated will require use of the Cash Collateral over the next five weeks in order to conduct its day-to-day operations including, but not limited to, the payment of salaries, wages and benefits to, or on behalf of, Calpine Corrugated's employees, the purchase of supplies, the payment of various overhead expenses, the provision of services necessary for their business and ongoing administrative expenses in the Chapter 11 Cases. Calpine Corrugated's cash needs through February 28, 2009, are set forth in a 5-week interim budget, a full-text copy of which is available for free at: http://bankrupt.com/misc/SmurfCalpine5WkBudget.pdf Without the continued use of Cash Collateral, Calpine Corrugated's estate and creditors would suffer immediate and irreparable harm, Mr. Conlan explains. Calpine Corrugated's use of the Cash Collateral is essential for the operation of its business and the management and preservation of its property. The Prepetition Lenders and Debtors have negotiated at arm's-length and in good faith regarding Calpine Corrugated's use of Cash Collateral to fund its operations during a five-week budget period, Mr. Conlan relates. As a result of these negotiations, the Debtors are hopeful that the Prepetition Lenders will consent to Calpine Corrugated's use of its Cash Collateral during the Budget Period. Pursuant to the Interim Order, Calpine Corrugated may use Cash Collateral solely in accordance with the Budget during the period beginning on January 27, 2009, and ending on February 28, 2009. As adequate protection against diminution in the value of Union Bank's interests in the Union Bank Collateral, Union Bank is granted (a) replacement security interests in and liens upon all of the Union Bank Collateral, and (b) a superpriority administrative expense claim under Section 507(b) of the Bankruptcy Code. As adequate protection against diminution in the value of CIT's interests in the CIT Collateral, CIT is granted: (a) replacement security interests in and liens and mortgages upon (i) any and all presently owned and hereafter acquired personal property, real property and all other assets of Calpine Corrugated and its estate, together with any proceeds thereof, and (ii) subject to entry of the Final Order, the proceeds of avoidance actions under Sections 544, 547, 548 or 550 of the Bankruptcy Code in Calpine Corrugated's Chapter 11 case, and (b) a superpriority administrative expense claim under Section 507(b) of the Bankruptcy code. A full-text copy of the Court's Interim Order is available for free at http://bankrupt.com/misc/SmurfCalpineIntCashCoORD.pdf About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The company employs approximately 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the company reported approximately $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed to reorganize under Chapter 11 on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. According to Bloomberg News, Smurfit-Stone joins other pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corp. Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC, acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: Gets Court Okay to Hire Epiq as Claims Agent ----------------------------------------------------------- Smurfit-Stone Container Corp. and its debtor-affiliates sought and obtained authority from the U.S. Bankruptcy Court for the District of Delaware to employ Epiq Bankruptcy Solutions LLC as claims, noticing, and balloting agent. Based on Epiq's considerable experience in providing similar services in large Chapter 11 cases, the Debtors believe that Epiq is eminently qualified to serve as their Claims Agent. The Debtors submit that their estates, creditors, parties-in- interest, and the Court will benefit as a result of Epiq's experience and cost-effective methods. As claims agent, Epiq will undertake actions including, but not limited to: (a) notifying all potential creditors of the filing of the Chapter 11 petitions and of the setting of the first meeting of creditors, pursuant to Section 341(a) of the Bankruptcy Code; (b) notifying all potential creditors of the last date for the filing of proofs of claim and furnishing a form for filing a proof of claim to creditors and parties-in-interest; (c) filing affidavits of service for all mailings performed by Epiq, including a copy of each notice, a list of persons to whom the notice was mailed, and the date mailed; (d) maintaining an official copy of the Debtors' Schedules, listing creditors and amounts owed; (e) docketing all claims filed and maintaining the official claims register on behalf of the Clerk and providing to the Clerk an exact duplicate of the claims register; (f) specifying in the claims register for each claim docket (i) the claim number assigned, (ii) the date received, (iii) the name and address of the claimant, (iv) the filed amount of the claim, if liquidated and (v) the allowed amount of the claim; (g) recording all transfers of claims and providing notices of the transfer as required pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedure; (h) maintain the official mailing list of all entities that have requested service of pleadings in the Chapter 11 cases; (i) maintain the official mailing list of all entities that have filed a proof of claim or proof of interest, which lists will be available upon request of the Clerk's Office; (j) notifying all potential creditors and parties-in-interest of any hearings on a disclosure statement and confirmation of a plan of reorganization; (k) mailing the Debtors' disclosure statement, plan, ballots and any other related solicitation materials to holders of impaired claims and equity interests; (l) receiving and tallying ballots and responding to inquiries respecting voting procedures and the solicitation of votes on the plan; (m) providing any other distribution services as are necessary or required; and (n) providing other claims processing, noticing, and related administrative services as may be requested from time to time by the Debtors, including, but not limited to, maintaining a Web site for the limited purpose of disseminating publicly-available information about the Debtors' Chapter 11 cases like copies of notices and key pleadings and establishing a toll-free call center to operate during the early days of the Chapter 11 cases to provide publicly-available information about the cases. Epiq will be paid monthly and the Debtors will pay Epiq for all materials necessary for Epiq's performance, other than computer hardware and software, and any noteworthy out of pocket expenses including, without limitation, transportation, long distance communications, printing, postage and related items. As part of the overall compensation payable to Epiq, the Debtors have agreed to certain indemnification obligations. The Debtors will indemnify Epiq to the extent permitted by applicable law for any claim arising from, related to, or in connection with Epiq's performance. Epiq will not be entitled to indemnification, contribution, or reimbursement for services other than for the Claims Agent Services, unless the services and the indemnification, contribution, or reimbursement are approved by the Court. Daniel C. McElhinney, the executive director of Epiq, says Epiq has conducted a thorough analysis of its contacts with each of the Debtors and the significant potential creditors and parties-in- interest in the Chapter 11 cases. He adds that to the best of his knowledge, neither Epiq nor any of its personnel have any relationship with the Debtors that would impair Epiq's ability to serve as Claims Agent. However, Mr. McElhinney says that Epiq may have relationships with certain of the Debtors' creditors as vendors or in connection with cases in which Epiq serves or has served in a neutral capacity as claims and noticing agent for another Chapter 11 debtor. "To the best of my knowledge, such relationships are completely unrelated to these chapter 11 cases," Mr. McElhinney says. Furthermore, Mr. McElhinney says that Epiq personnel may have relationships with certain of the Debtors' creditors or other parties-in-interest. However, to the best of his knowledge, the relationships, to the extent they exist, are of a personal financial nature and completely unrelated to the Debtors' Chapter 11 cases. Accordingly, Epiq is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code, he says. About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The company employs approximately 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the company reported approximately $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed to reorganize under Chapter 11 on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. According to Bloomberg News, Smurfit-Stone joins other pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corp. Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC, acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: Gets Green Light to Borrow $550 Mil. From JPMorgan ----------------------------------------------------------------- Smurfit-Stone Container Corporation and its debtor affiliates obtained permission, on an interim basis, from the U.S. Bankruptcy Court for the District of Delaware to borrow up to an aggregate principal amount of $550,000,000 under the $750,000,000 debtor-in- possession credit agreement with JPMorgan Chase Bank, N.A., as U.S. administrative agent and collateral agent. The Court will convene a hearing on February 23, 2009, at 10:00 a.m. (EST), to consider entry of a final order and final approval of the DIP Facility. Parties have until February 17 to file objections to the Request. Need for DIP Financing The $750,000,000 DIP Facility consists of: -- a $400,000,000 U.S. term loan, -- a $35,000,000 Canadian term loan, -- a $250,000,000 U.S. revolving loan, and -- a $65,000,000 Canadian revolving loan. Prior to the Petition Date, says proposed counsel for the Debtors, James F. Conlan, Esq., at Sidley Austin LLP, in Chicago, Illinois, the Debtors funded their operations with four different types of debt financing: (a) a senior secured bank financing comprised of term loans and revolving credit facilities. The aggregate amount of Pre-Petition Secured Debt outstanding as of the Petition Date was approximately $1.2 billion. (b) long-term debt comprised of five series of unsecured notes, which have an aggregate principal amount outstanding of $2.275 billion -- the Senior Note Debt -- as of the Petition Date. (c) two accounts receivable securitization facilities -- one in the United States and one in Canada. As of the Petition Date, receivables sold by the Debtors, in which they have a residual interest, secure approximately $350 million and $38 million in obligations related to the U.S. Securitization Facility and the Canadian Securitization Facility. (d) as of the Petition Date, the Debtors were obligated on approximately $284 million of tax-exempt utility systems bonds, industrial revenue bonds and similar bonds. Mr. Conlan said the Debtors require additional working capital financing in order to preserve and maintain their business. The Debtors also sought to replace the Securitization Facilities because both facilities will automatically "unwind" as a result of their bankruptcy filings. Because of the structure of the Securitization Facilities, the Debtors would be denied access to the proceeds of approximately $537 million in accounts receivable unless and until the obligations under the Securitization Facilities have been satisfied. Mr. Conlan said in papers filed in Court that the Debtors are seeking to advance funds from the DIP Facility to the appropriate parties under the Securitization Facilities so that those parties may retire the outstanding obligations under the Securitization Facilities and the Debtors, in turn, may regain access to the receivables that are currently subject to the Securitization Facilities. "The Debtors' short-term liquidity will be significantly enhanced if the Debtors are permitted to refinance or defease the outstanding obligations under the Securitization Facilities and regain ownership of the Sold Receivables," Mr. Conlan said. Mr. Conlan said the Debtors have determined that the DIP Facility offered the best option -- and indeed the only available, viable option -- for DIP financing. Mr. Conlan said that toward the end of 2008, the Debtors' advisors initially contacted about 25 potential lenders regarding possible out-of-court financing, but it soon became apparent that the Debtors would not be able to secure that sort of financing in the current lending market in the time period available to them, particularly in light of their liquidity position and their significant leverage. Under the proposed DIP Credit Agreement, loan proceeds -- in a manner substantially consistent with a 13-week cash flow projection prepared by the Debtors -- will be used for, among other things, working capital, letters of credit and capital expenditures, general corporate purposes of the Debtors, the refinancing in full or defeasance of Indebtedness outstanding under the Securitization Facilities, and payment of related costs, fees and expenses, including the costs of administration of the Cases. A full-text copy of the Debtors' preliminary 13-week cash flow projections is available for free at: http://bankrupt.com/misc/SmurfCashFlowForecast.pdf "The DIP Facility constitutes a new money financing arrangement and does not involve any roll-up of the Debtors' prepetition obligations under the Pre-Petition Financing Agreements," Mr. Conlan said. Terms of JPMorgan Facility The salient terms of the $750,000,000 DIP Credit facility are: A. Borrowers Smurfit-Stone Container Enterprises, Inc. as the U.S. Borrower. Smurfit-Stone Container Canada Inc. as the Canadian Borrower. B. Guarantors Obligations of U.S. Borrower: Smurfit-Stone Container Corporation, each of the other U.S. Debtors -- other than SMBI, Inc. -- and SSC Canada. Obligations of Canadian Borrower: SSCC, each of the other U.S. Debtors and each of the Canadian Debtors. C. Administrative Agent and Lenders: JPMorgan Chase Bank, N.A. will serve as U.S. administrative agent and U.S. collateral agent, and through its Toronto Branch, as Canadian administrative agent and Canadian collateral agent under the DIP Facility, in each case for a syndicate of financial institutions and other lenders selected by the CoLead Arrangers in consultation with the Borrowers. C. Co-Lead Arrangers; Joint Bookrunners; and Co-Documentation Agents: J.P. Morgan Securities Inc., and Deutsche Bank Securities Inc. will act as co-lead arrangers. J.P. Morgan, DBSI, GE Capital Markets, Inc. and Banc of America Securities LLC will act as joint bookrunners. General Electric Capital Corporation and Bank of America, N.A. will act as co-documentation agents. D. Syndication Agent: DBSI D. Commitment and Availability: A total commitment of up to U.S. $750 million, including: -- a senior secured asset-based revolving credit facility in an aggregate principal amount of $250 million made available to the U.S. Borrower and the Canadian Borrower -- of which amount $100 million will be available during the Interim Period; -- a senior secured asset-based term loan facility in an aggregate principal amount of $400 million made available to the U.S. Borrower, a senior secured asset-based revolving credit facility in an aggregate principal amount of $65 million -- of which amount $15 million will be available during the Interim Period, made available to the Canadian Borrower and the U.S. Borrower; and -- a senior secured asset-based term loan facility in an aggregate principal amount of $35 million made available to the Canadian Borrower. Borrowings, both revolving and term, will be repaid in full. E. Termination Date The Commitments will terminate, at the earliest of: (a) the date that is (i) 12 months after commencement of the Chapter 11 cases, (ii) 15 months after commencement of the Cases upon effectiveness of the Fifteen Month Facility Extension Option, and (iii) 18 months after commencement of the Cases upon effectiveness of the Eighteen Month Facility Extension Option -- the Maturity Date; (b) 45 days after the entry of the Interim Order if the Final Order has not been entered prior to the expiration of the 45-day period -- the Prepayment Date; (c) the effective date of a Reorganization Plan that is confirmed or sanctioned pursuant to an order of the Bankruptcy Court or the Canadian Court, as the case may be, in the Cases; and (d) the acceleration of the Loans and the termination of the Commitments in accordance with the Credit Agreement. F. Interest Rate For borrowings in U.S. dollars: (a) 5.5% plus the greater of (i) 4.5% and (ii) the Alternate Base Rate or, (b) at the Borrower's option, 6.5% plus the greater of (i) 3.5% and (ii) the Adjusted LIBOR rate for interest periods of 1, 3 or 6 months; interest will be payable monthly in arrears, at the end of any interest period and on the Termination Date. For borrowings in Canadian dollars: (a) 5.5% plus the greater of (i) 4.5% and (ii) the Canadian Prime Rate or, (b) at the Canadian Borrower's option, 6.5% plus the greater of (i) 3.5% and (ii) the BI A Rate for terms of approximately 1, 3 or, subject to availability, 6 months. A customary acceptance fee will be payable at the outset of any fixed rate Canadian dollar borrowing. If the Fifteen Month Facility Extension Option is exercised, interest will accrue on the outstanding amount of the obligations under the Credit Agreement at 1.0% above the rate applicable immediately prior to the extension. If the Eighteen Month Facility Extension Option is exercised, interest will accrue on the outstanding amount of the obligations under the Credit Agreement at 1.0% above the rate applicable immediately prior to the extension. G. Default Interest Upon the occurrence and during the continuance of any Event of Default, interest will accrue on the outstanding amount of the obligations and will be payable on demand at 2.0% above the then applicable rate. H. Commitment Fee 1% per annum on the unused portion of the Revolving Facility commitments. The issuance of Letters of Credit will be treated as usage of the applicable Revolving Facility. The fees will be payable monthly in arrears during the term of the Facility. I. Letter of Credit Fees 6.5% per annum on the outstanding face amount of each Letter of Credit, plus customary fees for fronting, issuance, amendments and processing. A full-text copy of the DIP Credit Facility is available for free at http://bankrupt.com/misc/SmurfDIPCreditAgmt.pdf Fee Letters Must be Filed Under Seal In connection with the provision of the proposed DIP Facility, the Debtors have, as is customary, agreed to pay certain fees and expenses to JPMorgan pursuant to certain separate, confidential, fee letters. A broad publication of the Fee Letters would be inappropriate and materially harmful to JPMorgan's business, both parties say. They assert that the highly-sophisticated and proprietary methodology for calculating the Fees should remain strictly confidential because the process of calculating the fees is at the core of JPMorgan's business know-how. JPMorgan and the Debtors sought Court approval to file the Fee Letters under seal. Interim DIP Order Pending a final order with respect to the DIP Request, the Court issued an interim order authorizing the Debtors to borrow up to an aggregate principal amount of $550,000,000, consisting of: * a $400,000,000 U.S. term loan for borrowings by SSSCE; * a $35,000,000 Canadian term loan for borrowings by SSC Canada; * $100,000,000 U.S. revolving loan for borrowings by SSCE and/or SSC Canada; and * $15,000,000 Canadian revolving loan for borrowings by SSCE and/or SSC Canada. Under the Interim DIP Order, Judge Brendan Linehan Shannon held that no more than $100,000 of the proceeds of the Loans or the DIP Collateral may be used by any statutory committee of unsecured creditors to investigate, and by the monitor in the Canadian Cases to review, the Pre-Petition Liens and claims of the Pre-Petition Agent and the Pre-Petition Lenders. The DIP Agents are granted security interests and liens. However, no U.S. Debtor will be required to pledge in excess of 65% of the capital stock of its direct Foreign Subsidiaries -- other than capital stock of SSC Canada -- or any of the capital stock of any indirect Foreign Subsidiaries. In addition, SSCE is authorized to use proceeds of advances under the DIP Credit Agreement and prepetition cash collateral to make a capital contribution to Stone Receivables LLC, who in turn, will make a capital contribution to SSCE Funding, LLC. This will provide SSCE Funding with funds necessary to pay the Redemption Price pursuant to a Series 2004 Indenture Supplement to a Master Indenture, dated as of November 23, 2004, between SSCE Funding and Deutsche Bank Trust Company Americas as indenture trustee. "The authorization we received from the court is an important and positive first step in our reorganization and allows us to operate in a business as usual mode," said Patrick J. Moore, Smurfit-Stone chairman and CEO. "We are focused on providing our customers with quality goods and services . . . We are moving forward to restructure our debt and develop a capital structure more suited to support our long-term growth and profitability," added. A full-text copy of the Interim DIP Order is available for free At: http://bankrupt.com/misc/SmurfIntDIPORD.pdf About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The company employs approximately 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the company reported approximately $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed to reorganize under Chapter 11 on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. According to Bloomberg News, Smurfit-Stone joins other pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corp. Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC, acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: Gets Interim Approval to Use Lenders' Collateral --------------------------------------------------------------- The Hon. Brendan Linehan Shannon of the U.S. Bankruptcy Court for the District of Delaware granted, on an interim basis, Smurfit- Stone Container Corporation and its affiliates permission to use the cash collateral securing obligations to prepetition lenders. The Court will consider final approval of the Debtors' request on February 23, 2009, at 10:00 a.m. (EST). Parties have until February 17 to file objections. Smurfit-Stone Container Enterprises, Inc., and its wholly-owned subsidiary, Smurfit-Stone Container Canada, Inc., are borrowers under a Credit Agreement, dated as of November 1, 2004, with JPMorgan Chase Bank and several other financial institutions. Under the Prepetition Credit Agreements, Smurfit-Stone Container Corporation guaranteed all of the obligations of SSCE -- the Prepetition U.S. Obligations -- while certain material subsidiaries of SSC Canada, as well as SSCC and SSCE, guaranteed the obligations of SSC Canada -- the Prepetition Canadian Obligations. The Prepetition U.S. Obligations are secured by liens on substantially all of the assets of SSCC and SSCE, as well as by the capital stock of SSCE and 65% of the capital stock of SSC Canada. The Prepetition Canadian Obligations are secured by liens on substantially all of the assets of SSC Canada and the Pre-Petition Canadian Guarantors, pledges of all of the capital stock of the Prepetition Canadian Guarantors, and the liens and stock pledges securing the Prepetition U.S. Obligations. The Debtors' material assets that do not constitute collateral under the Prepetition Credit Agreements consist primarily of three mills and approximately 30 corrugated container facilities. "It is vital to the success of the Debtors' reorganization efforts that they immediately obtain access to sufficient postpetition financing and access to cash collateral," says proposed counsel for the Debtors, James F. Conlan, Esq., at Sidley Austin LLP, in Chicago, Illinois. The Court directed the Prepetition Secured Parties to promptly to turn over to the Debtors all Cash Collateral received or held by them, provided that the Prepetition Secured Parties are granted adequate protection. The Debtors' right to use the Cash Collateral will terminate upon occurrence (i) of a event of default in the Debtors' DIP Credit Agreement, and (ii) of the termination of the DIP Credit Agreement. Judge Shannon said nothing will authorize the disposition of any assets of the Debtors or their estates outside the ordinary course of business or other resulting proceeds, except as permitted in the DIP Facility and the DIP Credit Agreement. As adequate protection for the interest of the Prepetition Secured Parties in the Prepetition Collateral on account of the granting of the DIP Liens, subordination to the Carve Out, the Debtors' use of Collateral, including Cash Collateral, and other decline in value arising out of the automatic stay or the Debtors' use, sale, or lease of the Prepetition Collateral, or otherwise, the Prepetition Secured Parties will receive: (a) Prepetition Replacement Liens (b) Prepetition Superpriority Claim (c) Adequate Protection Payment The DIP Liens and DIP Superpriority Claims on the one hand, and the Prepetition Liens, the Prepetition Replacement Liens and the Prepetition Superpriority Claims, on the other, are subordinate only to the Non-Primed Liens and the Priority Liens, and these items, in the event of the occurrence and during the continuance of an Event of Default or a Default or both: * with respect to U.S. Loan Parties and their Cases and assets, (i) the payment of allowed and unpaid professional fees and disbursements incurred by (a) the U.S. Loan Parties and (b) any statutory committees appointed in the Cases of the U.S. Loan Parties, in an aggregate amount of items (a) and (b) not in excess of the lesser of (I) $4,000,000, and (II) $6,500,000, and (ii) the payment of fees pursuant to 28 U.S.C. Section 1930 and to the Clerk of the Bankruptcy Court and -- the Carve-Out; * the CCAA DIP Lenders' Charge in the assets of the Canadian Loan Parties in the Canadian Cases will be subject to the Canadian Court ordered administration charge in an aggregate amount not in excess of $1,000,000 for the payment of (a) allowed and unpaid professional fees and disbursements incurred by professionals retained by the Canadian Loan Parties and (b) allowed and unpaid professional fees and disbursements of the monitor in the Canadian Cases including allowed and unpaid legal fees and expenses of its counsel; * the CCAA DIP Lenders' Charge in the assets of the Canadian Loan Parties in the Canadian Cases will also be subject to the Canadian Court ordered directors charge in an amount not exceeding $8,600,000, securing the Canadian Loan Parties' obligation to indemnify the officers and directors of the Canadian Loan Parties for personal liability. About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The company employs approximately 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the company reported approximately $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed to reorganize under Chapter 11 on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. According to Bloomberg News, Smurfit-Stone joins other pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corp. Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC, acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SPARTANS INC: Has Two Prospective Buyers for Nashua Headquarters ---------------------------------------------------------------- The Spartan Junior Drum and Bugle Corps, Inc., has received two buy offers for its Nashua headquarters, Andrew Wolfe at the Nashua Telegraph reports, citing lawyers in the company's bankruptcy case. According to Nashua Telegraph, the lawyers said that the bank holding the mortgage might settle for less than it's owed. The report says that the bank and The Spartan agreed during a hearing before the Hon. Michael Deasy of the United States Bankruptcy Court for the District of New Hampshire to continue working together to avoid foreclosure of the property at 73 E. Hollis Street, Nashua. Andrew Wolfe at Nashuatelegraph.com relates that the hearing was initially set for Wednesday last week, but a snowfall delayed it until last Thursday. The Spartans, says Nashuatelegraph, owe more than $815,000 on the mortgage for the property, estimated to worth around $800,000. Based in Nashua, New Hampshire, The Spartan Junior Drum and Bugle Corps, Inc., dba Spartans, Inc., filed for chapter 11 protection on November 25, 2008 (Bankr. D. N.H. Case No. 08-13492). Eleanor Wm. Dahar, Esq., in Manchester, New Hampshire, acts as bankruptcy counsel. When it filed for bankruptcy, the Debtor disclosed $1,001,031 in total assets, and $1,067,880 in total debts. SPHERIS INC: S&P Withdraws 'B-' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services said that it has withdrawn its 'B-' corporate credit rating on Franklin, Tennessee-based medical transcription services provider Spheris Inc. S&P also withdrew its 'CCC' issue-level rating and '6' recovery rating on the company's $125 million senior subordinated notes due 2012. S&P withdrew the ratings at the company's request. Ratings List Spheris Inc. Ratings Withdrawn To From ----------------- -- ---- Corporate credit rating NR B-/Negative/-- $125 Million Sr. notes NR CCC (Recovery: 6) SPRINT NEXTEL: Gets Go-Signal to End Services to Tweeter Opco ------------------------------------------------------------- Judge Mary Walrath of the U.S. Bankruptcy Court for the District of Delaware lifted the automatic stay imposed in the bankruptcy cases of Tweeter Opco LLC and its affiliates to permit Nextel, doing business as Sprint, to terminate telecommunication services it provided to the Opco Debtors. Nextel has provided the Opco Debtors wireless telecommunication services to the Opco Debtors on 216 wireless telephones since before the Petition Date. Nextel said the Opco Debtors breached their obligations by failing to make the required monthly payments. Nextel said the Opco Debtors deposited $283,500 into an interest- bearing segregated escrow account for the purpose of providing utility providers with adequate assurance of payment for postpetition utility services. Nextel wants George L. Miller, the Chapter 7 trustee overseeing the liquidation proceedings of the Opco Debtors, to pay it $18,120 from the segregated deposit account for the unpaid postpetition utility services it provided to the Opco Debtors. Nextel said the Chapter 7 trustee's counsel has confirmed that the Opco Debtors are no longer using the telecommunication services. The Chapter 7 Trustee has indicated that he consents to the modification of the automatic stay for the purpose of terminating Nextel's telecommunication services, but reserves all rights with respect to any claims against the estates. No objections to Nextel's Lift Stay Motion were filed, according to Brett D. Fallon, Esq., at Morris James, LLP, in Wilmington, Delaware. About Sprint Nextel Sprint Nextel Corp. -- http://www.sprint.com/-- offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint Nextel is widely recognized for developing, engineering and deploying innovative technologies, including two robust wireless networks serving about 54 million customers at the end of the fourth quarter 2007; industry-leading mobile data services; instant national and international walkie- talkie capabilities; and a global Tier 1 Internet backbone. The Wall Street Journal reports that Sprint Nextel Corp. will lay off 14% of its work force, to be completed by the end of the first quarter. About Tweeter Opco Tweeter Opco, LLC, was formed in July 2007 to acquire the business operations and assets of Tweeter Home Entertainment Group, Inc. Tweeter Opco filed for Chapter 11 protection on Nov. 5, 2008 (Bankr. D. Del. Case No. 08-12646). Chun I. Jang, Esq., and Cory D. Kandestin, Esq., at Richards, Layton & Finger, P.A., assisted the company in its restructuring effort. The company listed assets of $50 million to $100 million and debts of $50 million to $100 million. Judge Mary Walrath of the U.S. Bankruptcy Court for the District of Delaware converted the Opco Debtors' Chapter 11 cases to Chapter 7 liquidation proceedings effective as of December 5, 2008. George L. Miller from the accounting firm Miller Coffey Tate has been appointed to serve as trustee of the Chapter 7 proceedings of Tweeter Opco, LLC, and its affiliates. About Tweeter Home Based in Canton, Mass., Tweeter Home Entertainment Group Inc. -- http://www.tweeter.com/-- retails mid-to high-end audio and video consumer electronics products. Tweeter and seven of its affiliates filed for chapter 11 Protection on June 11, 2007 (Bankr. D. Del. Case Nos. 07-10787 through 07-10796). Gregg M. Galardi, Esq., Mark L. Desgrosseilliers, Esq., and Sarah E. Pierce, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the Debtors. Kurtzman Carson Consultants LLC acted as the Debtors' claims and noticing agent. Bruce Grohsgal, Esq., William P. Weintraub, Esq., and Rachel Lowy Werkheiser, Esq., at Pachulski Stang Ziehl & Jones LLP; and Scott L. Hazan, Esq., Lorenzo Marinuzzi, Esq., and Todd M. Goren, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represented the Official Committee of Unsecured Creditors. As of Dec. 21, 2006, Tweeter had total assets of $258,573,353 and total debts of $190,417,285. The Debtors' exclusive period to file a plan of reorganization expired on June 5, 2008. Bankruptcy Creditors' Service, Inc., publishes Tweeter Bankruptcy News. The newsletter tracks the bankruptcy proceedings of Tweeter Home Entertainment Group, Inc., and its affiliates, and the subsequent bankruptcy cases of its buyer, Tweeter Opco LLC. (http://bankrupt.com/newsstand/or 215/945-7000) ST. ANN HOSPICE: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: St. Ann Hospice Home Care 1612 W. Glenoaks Blvd Glendale, CA 91201 Tel: (818) 247-6671 Bankruptcy Case No.: 09-11526 Type of Business: The debtor is in the health care business. Chapter 11 Petition Date: January 26, 2009 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Barry Russell Debtor's Counsel: Asbet A. Issakhanian, Esq. 520 E. Wilson #200 Glendale, CA 91206 Tel: (818) 247-6671 Fax: (818) 551-5487 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/azb09-00557.pdf STATION CASINOS: May File for Bankruptcy Protection --------------------------------------------------- Pierre Paulden and Jonathan Keehner at Bloomberg News report that Station Casinos Inc. may go bankrupt, after Colony Capital LLC added more than $2 billion of loans and bonds to Station Casinos' books. Colony Capital, Bloomberg relates, took Station Casinos private in 2007 and used loans and bonds to complete the $8.8 billion deal with the casino company's founding family. Citing Ms. Holloway, Bloomberg says that the extra leverage puts Station Casinos at risk of breaking terms of bank debt. Bloomberg quoted Deutsche Bank analyst Andrew Zarnett as saying, "Private equity believed these assets could be burdened with considerable amounts of debt, but failed to take into account true cost of capital and other fixed charges that these assets need to maintain the physical plant. There is no doubt that they also failed to take into account the likelihood of a recession." Moody's Investors Service analyst Peggy Holloway, Bloomberg relates, said, "From a liquidity perspective, they are on the brink of bankruptcy. It depends on their ability to negotiate with lenders and willingness to amend the debt." According to Bloomberg, loans for the Station Casinos buyout include $900 million from Deutsche Bank AG and JPMorgan Chase & Co. Bloomberg states that Wachovia Corp., Natixis Bank, BNP Paribas, and Bank of Nevada also provided loans. According to Bloomberg, Station Casinos admitted in November 2008 that it was at risk of breaching covenants in a credit agreement by the end of 2008. CreditSights Inc. analyst Chris Snow said that Station Casinos has probably breached the covenants, Bloomberg relates. Station Casinos has a bond payment due Feb. 1, Bloomberg states, citing Mr. Snow. Mr. Snow, according to the report, said that the payment is for $450 million of 6.5% notes due in 2014. Bloomberg reports that in December 2008, Station Casinos failed to convince bondholders to swap securities for debt that was worth less and came due later. Station Casinos then tried to borrow the $257 million remaining of its $650 million credit line, the report says. According to the report, Mr. Snow said that taking the cash from the bank line is "an indication they expected to breach." Bond pricing service Financial Industry Regulatory Authority Trace, Bloomberg relates, said that trading of the securities has dropped to 2.5 cents on the dollar, from 70 cents in February 2008. Bloomberg states that Station Casinos has $900 million of bank loans, $2.3 billion of bonds, and a $2.475 billion commercial mortgage-backed facility. CMA Datavision said that the cost to protect Station Casinos' bonds from default for five years using credit derivatives rose 1.6 percentage points to a record 81.13% upfront and 5% last year, according to Bloomberg. The report says that it would cost $8.1 million initially and $500,000 a year to protect $10 million of bonds for five years. Mr. Zarnett, says Bloomberg, recommended that investors avoid Station Casino's debt due to "deteriorating fundamentals, upside down balance sheets, lack of liquidity, high leverage and potential breach of covenants." Moody's said that Station Casinos has the worst liquidity rating, at SGL-4, Bloomberg relates. Station Casinos, Inc. -- http://www.stationcasinos.com/-- is headquartered in Las Vegas, Nevada, and operates 17 properties in the Las Vegas, North Las Vegas, and Henderson area. Station Casinos' Las Vegas-area properties include Red Rock Casino and the two-month old Aliante Station. The company was founded in 1991 by Tom Barrack. STEPHEN ANDO: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Stephen Ando Paull Contractors, Inc. 95 Turnpike St. West Bridgewater, MA 02379 Bankruptcy Case No.: 09-10428 Chapter 11 Petition Date: January 21, 2009 Court: United States Bankruptcy Court District of Massachusetts (Boston) Judge: Joan N. Feeney Debtor's Counsel: Andrew M. Osborne, Esq. Osborne & Fonte 20 Eastbrook Road, Suite 304 Dedham, MA 02026 Tel: (781) 326-3875 Fax: (781) 326-4113 Email: ozzvis@yahoo.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mab09-10428.pdf The petition was signed by Stephen A. Paull, President of the company. SUBURBAN FEDERAL: Maryland Bank Fails & FDIC Named Receiver ----------------------------------------------------------- Suburban Federal Savings Bank based in Crofton, Maryland, was closed on Fri., Jan. 30, 2009, by the Office of Thrift Supervision, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Bank of Essex, Tappahannock, Virginia, to assume all of the deposits of Suburban Federal. The failed bank's seven offices reopened on Sat., Jan. 31, 2009, as branches of Bank of Essex, with depositors of Suburban Federal automatically becoming depositors of Bank of Essex. As of September 30, 2008, Suburban Federal had total assets of approximately $360 million and total deposits of $302 million. In addition to assuming all of the failed bank's deposits, Bank of Essex agreed to purchase approximately $348 million in assets at a discount of $45 million. The FDIC will retain the remaining assets for later disposition. The FDIC and Bank of Essex entered into a loss-share transaction. Bank of Essex will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is expected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers as they will maintain a banking relationship. The FDIC estimates that the cost to the Deposit Insurance Fund will be $126 million. Bank of Essex's acquisition of all deposits was the "least costly" resolution for the FDIC's Deposit Insurance Fund compared to alternatives. Suburban Federal is the fifth bank to fail in the nation this year. The last bank to be closed in Maryland was Second National Federal Savings Bank, Salisbury, on December 4, 1992. SUN-TIMES MEDIA: Arbitrator Awards CN$51-Mil. to CanWest -------------------------------------------------------- Sun-Times Media Group, Inc. (Pink Sheets: SUTM) has received the decision of an arbitrator in a dispute between the Company and CanWest Global Communications Corp., a Canadian media company. On December 19, 2003, CanWest commenced notices of arbitration against Sun-Times Media relating to CanWest's purchase of newspaper assets from the Company in 2000. CanWest claimed Sun-Times Media and certain of its subsidiaries owed CanWest CN$84.0 million related to the transaction. Sun-Times Media contested CanWest's claim. The arbitrator's decision includes an award in favor of CanWest in the amount of approximately CB$51 million. The award is exclusive of interest and costs, which will be determined at a later date. As of September 30, 2008, Sun-Times Media had a reserve established under "Accounts payable and accrued expenses" on its balance sheet in respect of the arbitration for CN$15 million. A previously established escrow account funded by the company containing approximately CN$22 million may be available to pay any final arbitration award. Sun-Times Media is evaluating its options with respect to the arbitration award, including the possibility of an appeal upon the completion of the arbitration, and is in the process of assessing the likely impact of any final arbitration award on the Company's financial condition. About Canwest Global Communications Corp. Based in Winnipeg, Manitoba, Canwest Global Communications Corp. (TSX: CGS and CGS.A,) -- http://www.canwest.com/-- an international media company, is Canada's largest media company. In addition to owning the Global Television Network, Canwest is Canada's largest publisher of English language daily newspapers and owns, operates or holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, Web sites and radio stations and networks in Canada, New Zealand, Australia, Turkey, Indonesia, Singapore, the United Kingdom and the United States. About Sun-Times Media Group Sun-Times Media Group, Inc. -- http://www.thesuntimesgroup.com/-- owns media properties including the Chicago Sun-Times and Suntimes.com as well as newspapers and Web sites serving more than 200 communities across Chicago. SUN-TIMES MEDIA: Board Elects Graham W. Savage as Director ---------------------------------------------------------- Sun-Times Media Group, Inc.'s board of directors has elected Graham W. Savage as a director. Mr. Savage had previously served as a Director for the company from July 24, 2003 to January 16, 2009, and served as a member of the Company's Special Committee that investigated and resolved a number of legal issues facing the Company. In addition, Mr. Savage served as chairman of the Company's Audit Committee from January 31, 2006 to January 16, 2009. Mr. Savage, 59, served for 21 years, including seven years as the Chief Financial Officer, at Rogers Communications Inc., a major Toronto-based media and communications company. Mr. Savage currently serves as Chairman of Callisto Capital LP, a merchant banking firm based in Toronto. He also serves as a director and the chairman of the audit committees for both Canadian Tire Corporation, Limited, a Canadian public reporting company, and Cott Corporation, a United States public reporting company. Mr. Savage has also served on numerous other boards of directors. About Sun-Times Media Group Sun-Times Media Group, Inc. -- http://www.thesuntimesgroup.com/-- owns media properties including the Chicago Sun-Times and Suntimes.com as well as newspapers and Web sites serving more than 200 communities across Chicago. SUN-TIMES MEDIA: Davidson Kempner Wins Control of Board ------------------------------------------------------- Sun-Times Media Group, Inc. (Pink Sheets: SUTM) has determined that Davidson Kempner Capital Management LLC has delivered to the Company valid consents from holders of a majority of Sun-Times Media Group Class A Common Stock to reconstitute of the Company's Board of Directors, effective as of January 16, 2009. The Company reached this determination with the assistance of an independent inspector, IVS Associates, Inc. The Company's Board of Directors is now comprised of Jeremy L. Halbreich, Michael E. Katzenstein, Robert A. Poile and Robert A. Schmitz. As reported by the Chicago Tribune on Jan. 17, Davidson Kempner declared victory of its aims to seek control of Sun-Times Media's board through a mail solicitation. Although officials had encouraged shareholders to resist Davidson Kempner's "ill- conceived" effort to take over the board, they have also affirmed the company's existing directors intend to "accept the decision of stockholders, whatever that decision may be." Davidson, which held a 5.9% Sun-Times Media stake, had vowed to replace three directors of the Chicago-based parent of the Chicago Sun-Times and dozens of other publications with Davidson representatives if it won the fight. According to the report, Only Robert Poile, representing Polar Securities, another big shareholder, would remain on the board. Davidson Kempner wanted the new board to replace Sun-Times Media Chief Executive Cyrus Freidheim Jr. About Sun-Times Media Group Sun-Times Media Group, Inc. -- http://www.thesuntimesgroup.com/-- owns media properties including the Chicago Sun-Times and Suntimes.com as well as newspapers and Web sites serving more than 200 communities across Chicago. SYNCORA GUARANTEE: S&P Downgrades Issuer Credit Rating to 'CC' -------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its issuer credit and financial strength ratings on Syncora Guarantee Inc. to 'CC' from 'B'. Standard & Poor's also said that it removed these ratings from CreditWatch, where they were placed on Nov. 18, 2008, with developing implications. The outlook is negative. The downgrade is the result of Standard & Poor's recent update to its distressed exchange criteria. This update includes the commutation of credit default swaps by bond insurers. Once a distressed offer or commutation is announced or otherwise anticipated, S&P lowers the issuer credit and financial strength ratings to reflect the risk of nonpayment under a financial guarantee policy. S&P generally lowers the ratings to 'CC' and assign a negative outlook, reflecting the possible 'SD' issuer credit rating upon completion of the commutation. Syncora has announced that it has entered into an agreement with 17 bank counterparties to commute, terminate, amend, or restructure existing CDS and financial guarantee contracts. Standard & Poor's has taken into consideration the company's lack of meaningful advancement on the restructuring and slow progress in its negotiations with counterparties of its CDO of ABS exposure. If Syncora experiences further adverse loss development on its COD of ABS or on its 2005-2007 vintage RMBS exposure, the company could fall below the NYID minimum surplus requirement. It is unclear if the NYID would grant an additional release of contingency reserves to bolster surplus. The outlook is negative, reflecting the possible 'SD' issuer credit rating following the commutation and the lack of progress management has made on its commutation strategy. If management is not successful in its negotiations to develop strategic alternatives for problematic credits in its insured portfolio, S&P believes the financial position of the company would be impaired to a point that could lead to regulatory intervention. If management is successful in its commutation negotiations, S&P would lower the rating to 'SD'. After the commutation is complete, S&P could raise the rating if management presents a reasonably viable strategy to strengthen the company's financial positions and protect policyholders. SYRACUSE FUNDING: Moody's Junks Ratings on EUR6.438 Mil. Notes -------------------------------------------------------------- Moody's Investors Service announced that it has downgraded these debt securities issued by Syracuse Funding EUR Limited: EUR 36,290,000 Class A Floating Rate Notes due 2018 -- Current Rating: Aa1, on review for downgrade -- Prior Rating: Aa1 EUR 5,686,000 Class B Floating Rate Notes due 2018 -- Current Rating: Aa2, on review for downgrade -- Prior Rating: Aa2 EUR 4,013,000 Class C Floating Rate Notes due 2018 -- Current Rating: Baa1, on review for downgrade -- Prior Rating: A1 EUR 6,438,000 Class D Floating Rate Notes due 2018 -- Current Rating: Caa1, on review for downgrade -- Prior Rating: Baa1 The last rating action on the affected securities was on December 22, 2008 when the Senior Credit Facility and Class A Notes were downgraded from Aaa to Aa1. The rating actions reflect concern over the vehicle's ability to liquidate portfolio assets under stressed market conditions within the covenanted timeframe. Moody's incorporated an increase in suspensions and gating of redemptions within hedge funds at the underlying portfolio level into its rating analysis. A negative annual drift of 5% was utilized to reflect the recent downward trend in the returns of portfolios of hedge funds. A single factor volatility assumption of 6% was used to simulate the NAV process along with the standard volatility stresses as described in the rating methodology listed below. TAURINO SERVICES: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Taurisano Services, GP 150 S. Independence Mall West, Suite 1042 Philadelphia, PA 19106 Bankruptcy Case No.: 09-10461 Chapter 11 Petition Date: Court: United States Bankruptcy Court Judge: January 23, 2009 Debtor's Counsel: Allen B. Dubroff, Esq. 101 Greenwood Avenue, Fifth Floor Jenkintown, PA 19046 Tel: (215) 635-7200 Fax: (215) 635-7212 Email: adubroff@fsalaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of 20 largest unsecured creditors together with its petition. The petition was signed by Massimo Taurisano, Managing Partner of the company. TELETOUCH COMMUNICATIONS: Signs Retailer Pact With T-Mobile USA --------------------------------------------------------------- Teletouch Communications, Inc., has signed an Exclusive Retailer Agreement with T-Mobile USA, Inc. (NYSE: DT), a leading national wireless carrier. The three-year agreement provides for Teletouch to open, operate and manage high-volume mall locations, with the company's first five new locations opening in major markets in Oklahoma, starting immediately. Further discussions are underway to explore possible expansion opportunities in a variety of other markets, including Texas and the ten Southeastern states that Teletouch previously served as a wireless messaging provider for many years. "We are excited to work with T-Mobile USA to expand our retail distribution, leveraging our current Texas-based core wireless business into new markets across the country. While other U.S. wireless carriers are rationalizing their post-merger, over- saturated retail channels and shuttering company and agent stores, T-Mobile has a strong focus and support team geared to growing its authorized dealer and third-party retailer channels nationwide," stated T.A. "Kip" Hyde, Jr., President and COO of Teletouch. "We understand GSM-network-based cellular communications very well, having been in the business since its inception in the 1980's, and are pleased that T-Mobile has chosen us to help support its retail growth plans." Amy McCune, T-Mobile USA Regional Vice President, added, "As T- Mobile continues to grow and expand its national retail operations, it is imperative that we choose retailers that have the knowledge, experience and capability of providing the very highest levels of customer service. We're pleased to work with Teletouch, as they have demonstrated over many years their commitment to delivering exceptional customer service and building long-term customer relationships with customers." About T-Mobile USA, Inc. Based in Bellevue, Wash., T-Mobile USA, Inc. -- http://www.T-Mobile.com/-- is the U.S. operation of Deutsche Telekom AG's Mobile Communications Business, and a wholly owned subsidiary of T-Mobile International, one of the world's leading companies in mobile communications. By the end of the third quarter of 2008, 127 million mobile customers were served by the mobile communication segments of the Deutsche Telekom group -- 32.1 million by T-Mobile USA -- all via a common technology platform based on GSM, the world's most widely used digital wireless standard. T-Mobile's innovative wireless products and services help empower people to connect to those who matter most. Multiple independent research studies continue to rank T-Mobile among the highest in numerous regions throughout the U.S. in wireless customer care and call quality. T-Mobile is a federally registered trademark of Deutsche Telekom AG. About Teletouch Communications For over 40 years, Teletouch Communications, Inc. -- http://www.teletouch.com/-- has offered a comprehensive suite of telecommunications products and services including cellular, two- way radio, GPS-telemetry, wireless messaging and public safety/emergency response vehicle products and services throughout the U.S. With over 80,000 wireless customers, Teletouch's wholly- owned subsidiary, Progressive Concepts, Inc. (PCI), is a leading provider of ATT Mobility(R) (NYSE: T) services (voice, data and entertainment), as well as other mobile, portable and personal electronics products and services to individuals, businesses and government agencies. In a letter dated January 16, 2009, BDO Seidman, LLP, in Houston, Texas, pointed out that the company has suffered recurring losses from operations and negative cash flows from operations and has a working capital deficit and a net capital deficiency which raise substantial doubt about its ability to continue as a going concern. As of May 31, 2008, the company's balance sheet showed total assets of $28,569,000 and total liabilities of $37,321,000, resulting in total shareholders' deficit of $8,752,000. For the years ended May 31, 2008, and 2007, the company posted net losses of $3,075,000 and $8,079,000. THOMAS RICKS: Case Summary & Five Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Thomas Mecham Ricks 5655 W. Floating Feather Eagle, ID 83616 Bankruptcy Case No.: 09-00215 Chapter 11 Petition Date: January 29, 2009 Court: District of Idaho (Boise) Judge: Jim D. Pappas Debtor's Counsel: Thomas G. Walker, Esq. twalker@cosholaw.com Cosho Humphrey LLP P.O. Box 9518 Boise, ID 83707-9518 Tel: (208) 639-5607 Fax: (2080 639-5609 Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $10 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Doug Swenson State Court $2,231,250 Kastera, LLC litigation pending 1550 S. Tech Ln. over contract Meridian, ID 83642 dispute Tel: (208) 472-0300 Wells Fargo Financing Bank Credit card $10,258 PO Box 5943 purchases Sioux Falls, SD 57117-5943 D.L. Evans Bank Credit card $6,265 PO Box 30495 purchases Tampa, FL 33630 800-325-3678 Wells Fargo Credit card $3,288 PO Box 10347 purchases Des Moines, IA 50306 Wells Fargo Bank Line of credit $2,068 PO Box 95225 Albuquerque, NM 87199-5225 THREE RIVERS: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Three Rivers Companies, LLC #200 4463 Cherokee St. Acworth, GA 30101 Bankruptcy Case No.: 09-61430 Chapter 11 Petition Date: January 20, 2009 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Judge: Paul W. Bonapfel Debtor's Counsel: Joel S. Wadsworth, Esq. The Wadsworth Firm 2625 Piedmont Rd., NE, Suite 56-304 Atlanta, GA 30324 Tel: (404) 261-2122 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of 20 largest unsecured creditors. The petition was signed by John Campbell, Managing Member of the company. TWEETER OPCO: Court Directs Wells Fargo to Release Funds -------------------------------------------------------- Judge Mary Walrath of the U.S. Bankruptcy Court for the District of Delaware directed Wells Fargo Retail Finance, LLC, to release to the Chapter 7 trustee, George L. Miller, $130,000 as payment of the December 2008 and January 2009 rent of Tweeter Opco LLC and its affiliates' corporate headquarters and for the preparation of the Schedules of Assets and Liabilities and Statements of Financial Affairs. Wells Fargo is the agent for the First Lien Lenders. Schultze Agency Services, LLC, as agent for the Opco Debtors' Second Lien Lenders, made the request. Schultze asked the Court to amend the order converting the Chapter 11 cases of the Opco Debtors into Chapter 7 proceedings, to allow Wells Fargo to turn over $100,000 of the approximate $2,000,000 it is holding to the Chapter 7 Trustee. The Court has previously ordered payment of the December rent and the filing of Schedules and Statements. However, the Chapter 7 Conversion Order requires Wells Fargo to hold onto all cash collateral until further Court order. Karen B. Skomorucha, Esq., at Ashby & Geddes, P.A., in Wilmington, Delaware, informed the Court that no objections were filed against Schultze's request. In its order, the Court clarified that as adequate protection to Wells Fargo with respect to the release of its collateral, it will be released and discharged of any Section 506(c) claims that would otherwise be allowed against Wells Fargo, solely on a dollar-for- dollar basis to the extent that the obligations paid with the $130,000 are not chargeable to Wells Fargo under Section 506(c) of the Bankruptcy Code. About Tweeter Opco Tweeter Opco, LLC, was formed in July 2007 to acquire the business operations and assets of Tweeter Home Entertainment Group, Inc. Tweeter Opco filed for Chapter 11 protection on Nov. 5, 2008 (Bankr. D. Del. Case No. 08-12646). Chun I. Jang, Esq., and Cory D. Kandestin, Esq., at Richards, Layton & Finger, P.A., assisted the company in its restructuring effort. The company listed assets of $50 million to $100 million and debts of $50 million to $100 million. Judge Mary Walrath of the U.S. Bankruptcy Court for the District of Delaware converted the Opco Debtors' Chapter 11 cases to Chapter 7 liquidation proceedings effective as of December 5, 2008. George L. Miller from the accounting firm Miller Coffey Tate has been appointed to serve as trustee of the Chapter 7 proceedings of Tweeter Opco, LLC, and its affiliates. About Tweeter Home Based in Canton, Mass., Tweeter Home Entertainment Group Inc. -- http://www.tweeter.com/-- retails mid-to high-end audio and video consumer electronics products. Tweeter and seven of its affiliates filed for chapter 11 Protection on June 11, 2007 (Bankr. D. Del. Case Nos. 07-10787 through 07-10796). Gregg M. Galardi, Esq., Mark L. Desgrosseilliers, Esq., and Sarah E. Pierce, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the Debtors. Kurtzman Carson Consultants LLC acted as the Debtors' claims and noticing agent. Bruce Grohsgal, Esq., William P. Weintraub, Esq., and Rachel Lowy Werkheiser, Esq., at Pachulski Stang Ziehl & Jones LLP; and Scott L. Hazan, Esq., Lorenzo Marinuzzi, Esq., and Todd M. Goren, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represented the Official Committee of Unsecured Creditors. As of Dec. 21, 2006, Tweeter had total assets of $258,573,353 and total debts of $190,417,285. The Debtors' exclusive period to file a plan of reorganization expired on June 5, 2008. Bankruptcy Creditors' Service, Inc., publishes Tweeter Bankruptcy News. The newsletter tracks the bankruptcy proceedings of Tweeter Home Entertainment Group, Inc., and its affiliates, and the subsequent bankruptcy cases of its buyer, Tweeter Opco LLC. (http://bankrupt.com/newsstand/or 215/945-7000) TWEETER OPCO: Court Permits Nextel to Terminate Services -------------------------------------------------------- Judge Mary Walrath of the U.S. Bankruptcy Court for the District of Delaware lifted the automatic stay imposed in the bankruptcy cases of Tweeter Opco LLC and its affiliates to permit Nextel, doing business as Sprint, to terminate telecommunication services it provided to the Opco Debtors. Nextel has provided the Opco Debtors wireless telecommunication services to the Opco Debtors on 216 wireless telephones since before the Petition Date. Nextel said the Opco Debtors breached their obligations by failing to make the required monthly payments. Nextel said the Opco Debtors deposited $283,500 into an interest- bearing segregated escrow account for the purpose of providing utility providers with adequate assurance of payment for postpetition utility services. Nextel wants George L. Miller, the Chapter 7 trustee overseeing the liquidation proceedings of the Opco Debtors, to pay it $18,120 from the segregated deposit account for the unpaid postpetition utility services it provided to the Opco Debtors. Nextel said the Chapter 7 trustee's counsel has confirmed that the Opco Debtors are no longer using the telecommunication services. The Chapter 7 Trustee has indicated that he consents to the modification of the automatic stay for the purpose of terminating Nextel's telecommunication services, but reserves all rights with respect to any claims against the estates. No objections to Nextel's Lift Stay Motion were filed, according to Brett D. Fallon, Esq., at Morris James, LLP, in Wilmington, Delaware. About Sprint Nextel Sprint Nextel Corp. -- http://www.sprint.com/-- offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint Nextel is widely recognized for developing, engineering and deploying innovative technologies, including two robust wireless networks serving about 54 million customers at the end of the fourth quarter 2007; industry-leading mobile data services; instant national and international walkie- talkie capabilities; and a global Tier 1 Internet backbone. The Wall Street Journal reports that Sprint Nextel Corp. will lay off 14% of its work force, to be completed by the end of the first quarter. About Tweeter Opco Tweeter Opco, LLC, was formed in July 2007 to acquire the business operations and assets of Tweeter Home Entertainment Group, Inc. Tweeter Opco filed for Chapter 11 protection on Nov. 5, 2008 (Bankr. D. Del. Case No. 08-12646). Chun I. Jang, Esq., and Cory D. Kandestin, Esq., at Richards, Layton & Finger, P.A., assisted the company in its restructuring effort. The company listed assets of $50 million to $100 million and debts of $50 million to $100 million. Judge Mary Walrath of the U.S. Bankruptcy Court for the District of Delaware converted the Opco Debtors' Chapter 11 cases to Chapter 7 liquidation proceedings effective as of December 5, 2008. George L. Miller from the accounting firm Miller Coffey Tate has been appointed to serve as trustee of the Chapter 7 proceedings of Tweeter Opco, LLC, and its affiliates. About Tweeter Home Based in Canton, Mass., Tweeter Home Entertainment Group Inc. -- http://www.tweeter.com/-- retails mid-to high-end audio and video consumer electronics products. Tweeter and seven of its affiliates filed for chapter 11 Protection on June 11, 2007 (Bankr. D. Del. Case Nos. 07-10787 through 07-10796). Gregg M. Galardi, Esq., Mark L. Desgrosseilliers, Esq., and Sarah E. Pierce, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the Debtors. Kurtzman Carson Consultants LLC acted as the Debtors' claims and noticing agent. Bruce Grohsgal, Esq., William P. Weintraub, Esq., and Rachel Lowy Werkheiser, Esq., at Pachulski Stang Ziehl & Jones LLP; and Scott L. Hazan, Esq., Lorenzo Marinuzzi, Esq., and Todd M. Goren, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represented the Official Committee of Unsecured Creditors. As of Dec. 21, 2006, Tweeter had total assets of $258,573,353 and total debts of $190,417,285. The Debtors' exclusive period to file a plan of reorganization expired on June 5, 2008. Bankruptcy Creditors' Service, Inc., publishes Tweeter Bankruptcy News. The newsletter tracks the bankruptcy proceedings of Tweeter Home Entertainment Group, Inc., and its affiliates, and the subsequent bankruptcy cases of its buyer, Tweeter Opco LLC. (http://bankrupt.com/newsstand/or 215/945-7000) TWEETER OPCO: Trustee May Retain Dilworth as Bankruptcy Counsel --------------------------------------------------------------- George Miller, as trustee overseeing the Chapter 7 proceedings of Tweeter Opco LLC and its affiliates, have sought and obtained permission from the U.S. Bankruptcy Court for the District of Delaware to retain Dilworth Paxson LLP as his counsel. As counsel to the Chapter 7 Interim Trustee, Dilworth will: (a) provide legal advice with respect to Mr. Miller's powers and duties; (b) prepare necessary applications, pleadings, briefs, memoranda and other documents and reports; (c) represent Mr. Miller at all hearings and adversary proceedings; (d) represent Mr. Miller in his dealings with the estates' creditors; and (e) perform all other legal services. According to Mr. Miller, Dilworth has not received any payments from the Opco Debtors' bankruptcy estates in the 90 days prior to the Petition Date. Dilworth will be paid for its services based on the firm's hourly rates: Partners $355-$675 Associates $200-$290 Paralegals $120-$130 Moreover, Mr. Miller proposes that Dilworth be reimbursed actual and necessary expenses it incurred or incurs, including telephone, photocopying, travel, business meals, computerized research, messengers, couriers, postage, and witness fees. Peter C. Hughes, a partner of Dilworth Paxson LLP, ascertains that his firm does not have interest adverse to the estate in the matters in which it is to be engaged. In a Supplemental Affidavit, Mr. Hughes says Peter C. Hughes, Esq., at Dilworth Paxson LLP, has told the Court that his firm has conducted a conflict check in relation to its retention as counsel to the Chapter 7 trustee of the Opco Debtors' liquidation proceedings. Mr. Hughes discloses that as of December 23, 2008, his firm ascertained that it has represented AT&T, Benefits Concepts, Brian Jones, Patrick Burns, Michael Burns, Derrick Campbell, D&M Holdings, Denon Electronics, Denon Parts, Robert Edwards, David Green, George Granoff, Christopher Harrison, Michael Hunt, Stephen Jackson for the period from 2003 through 2007 in matters unrelated to the Opco Debtors' cases. Mr. Hughes adds that in 2008, his firm represented Bank of America, PNC Bank, ADP Inc., Aqua Pennsylvania, Capmark Finance, the City of Philadelphia, the Commonwealth of Pennsylvania, CNA Insurance, Federal Realty Investment Trust, GE Capital, GES Exposition Services, and International Micro Industries, Inc., in matters unrelated to the Opco Debtors' cases. Certain attorneys at Dilworth gave pre-bankruptcy advice to Reed Slogoff, Esq., general counsel to Pearl Properties, regarding a lease termination dispute with one or more of the Opco Debtors. Mr. Hughes assures the Court that Dilworth will not represent Pearl Properties with respect to the Debtors' current bankruptcy cases. In a Second Supplemental Affidavit, Mr. Hughes says that in 2008, Dilworth Paxson represented Kimco Realty Corporation, KYW, Merrill Lynch, JP Morgan Chase, Philadelphia Inquirer, and Philadelphia Newspapers, Inc., in various litigations. Moreover, Mr. Hughes told the Court that from 2003 through 2007, Dilworth represented Ronald Johnston, Matthew Johnson, James Keating, Kravco Company, David Miller, Michael Miller, Linda Murray, PECO, PECO Energy Company, David Phillips, William Phillips, PSE&G, Daniel Ryan, Michael Scott, Charles Smith, Gregory Smith, David Thomas, Verizon, Verizon Communications, Verizon Wireless, Thomas Watkins and Bruce Young, on matters unrelated to the Debtors' bankruptcy cases. In addition, Mr. Hughes notes, his Firm currently represents Wells Fargo Corporate Trust Services, in connection with various bond issuances in which Wells Fargo acts as bond trustee. No objection has been filed with respect to the Dilworth Retention Application, Mr. Hughes noted. About Tweeter Opco Tweeter Opco, LLC, was formed in July 2007 to acquire the business operations and assets of Tweeter Home Entertainment Group, Inc. Tweeter Opco filed for Chapter 11 protection on Nov. 5, 2008 (Bankr. D. Del. Case No. 08-12646). Chun I. Jang, Esq., and Cory D. Kandestin, Esq., at Richards, Layton & Finger, P.A., assisted the company in its restructuring effort. The company listed assets of $50 million to $100 million and debts of $50 million to $100 million. Judge Mary Walrath of the U.S. Bankruptcy Court for the District of Delaware converted the Opco Debtors' Chapter 11 cases to Chapter 7 liquidation proceedings effective as of December 5, 2008. George L. Miller from the accounting firm Miller Coffey Tate has been appointed to serve as trustee of the Chapter 7 proceedings of Tweeter Opco, LLC, and its affiliates. About Tweeter Home Based in Canton, Mass., Tweeter Home Entertainment Group Inc. -- http://www.tweeter.com/-- retails mid-to high-end audio and video consumer electronics products. Tweeter and seven of its affiliates filed for chapter 11 Protection on June 11, 2007 (Bankr. D. Del. Case Nos. 07-10787 through 07-10796). Gregg M. Galardi, Esq., Mark L. Desgrosseilliers, Esq., and Sarah E. Pierce, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the Debtors. Kurtzman Carson Consultants LLC acted as the Debtors' claims and noticing agent. Bruce Grohsgal, Esq., William P. Weintraub, Esq., and Rachel Lowy Werkheiser, Esq., at Pachulski Stang Ziehl & Jones LLP; and Scott L. Hazan, Esq., Lorenzo Marinuzzi, Esq., and Todd M. Goren, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represented the Official Committee of Unsecured Creditors. As of Dec. 21, 2006, Tweeter had total assets of $258,573,353 and total debts of $190,417,285. The Debtors' exclusive period to file a plan of reorganization expired on June 5, 2008. Bankruptcy Creditors' Service, Inc., publishes Tweeter Bankruptcy News. The newsletter tracks the bankruptcy proceedings of Tweeter Home Entertainment Group, Inc., and its affiliates, and the subsequent bankruptcy cases of its buyer, Tweeter Opco LLC. (http://bankrupt.com/newsstand/or 215/945-7000) TWEETER OPCO: Trustee Seeks to Hire Miller Coffey as Accountants ---------------------------------------------------------------- George L. Miller, the Chapter 7 trustee for the estate of Tweeter Opco, LLC, and its debtor affiliates, seeks authority from the U.S. Bankruptcy Court for the District of Delaware to retain Miller Coffey Tate LLP as his accountants, pursuant to Section 327(a) and 328(a) of the Bankruptcy Code. As Mr. Miller's accountants, Miller Coffey will provide: (a) general accounting and tax advisory services to the Chapter 7 Trustee regarding the administration of the Opco Debtors' bankruptcy estates; (b) review and assistance in the preparation and filing of any tax returns, any assistance regarding any existing and future I.R.S. examinations and any all other tax assistance as may be requested from time to time; (c) interpretation and analysis of financial materials, including accounting, tax, statistical, financial and economic data, regarding the Opco Debtors and other relevant parties; (d) analysis of the Opco Debtor's books and records regarding potential avoidance actions; (e) analysis and advice regarding additional accounting, financial, valuation and related issues that may arise in the course of the Opco Debtors' Chapter 7 proceedings; (f) assistance to the Chapter 7 Trustee's attorneys in the preparation and evaluation of any potential litigation; (g) assistance to the Chapter 7 Trustee in identifying and securing the assets and records of the estate and provide forensic and valuation services, if required, concerning property and transaction of the Opco Debtors; (h) testimony on various matters; and (i) other services that are appropriate and proper in the Opco Debtors' Chapter 7 cases. Mr. Miller is a member and partner of the Miller Coffey firm. Miller Coffey will be paid for its services on an hourly basis and will be reimbursed for actual, necessary expenses and charges it incurred or incurs. The Firm's 2008 employee hourly rates are: Partners and Principals $300 to $490 Managers $235 to $295 Senior Accountants $170 to $230 Staff Accountants $90 to $165 Matthew R. Tomlin, a partner of Miller Coffey Tate LLP, assures the Court that his firm does not hold or represent any interest materially adverse to the Opco Debtors and their estates. He maintains that the Firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About Tweeter Opco Tweeter Opco, LLC, was formed in July 2007 to acquire the business operations and assets of Tweeter Home Entertainment Group, Inc. Tweeter Opco filed for Chapter 11 protection on Nov. 5, 2008 (Bankr. D. Del. Case No. 08-12646). Chun I. Jang, Esq., and Cory D. Kandestin, Esq., at Richards, Layton & Finger, P.A., assisted the company in its restructuring effort. The company listed assets of $50 million to $100 million and debts of $50 million to $100 million. Judge Mary Walrath of the U.S. Bankruptcy Court for the District of Delaware converted the Opco Debtors' Chapter 11 cases to Chapter 7 liquidation proceedings effective as of December 5, 2008. George L. Miller from the accounting firm Miller Coffey Tate has been appointed to serve as trustee of the Chapter 7 proceedings of Tweeter Opco, LLC, and its affiliates. About Tweeter Home Based in Canton, Mass., Tweeter Home Entertainment Group Inc. -- http://www.tweeter.com/-- retails mid-to high-end audio and video consumer electronics products. Tweeter and seven of its affiliates filed for chapter 11 Protection on June 11, 2007 (Bankr. D. Del. Case Nos. 07-10787 through 07-10796). Gregg M. Galardi, Esq., Mark L. Desgrosseilliers, Esq., and Sarah E. Pierce, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the Debtors. Kurtzman Carson Consultants LLC acted as the Debtors' claims and noticing agent. Bruce Grohsgal, Esq., William P. Weintraub, Esq., and Rachel Lowy Werkheiser, Esq., at Pachulski Stang Ziehl & Jones LLP; and Scott L. Hazan, Esq., Lorenzo Marinuzzi, Esq., and Todd M. Goren, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represented the Official Committee of Unsecured Creditors. As of Dec. 21, 2006, Tweeter had total assets of $258,573,353 and total debts of $190,417,285. The Debtors' exclusive period to file a plan of reorganization expired on June 5, 2008. Bankruptcy Creditors' Service, Inc., publishes Tweeter Bankruptcy News. The newsletter tracks the bankruptcy proceedings of Tweeter Home Entertainment Group, Inc., and its affiliates, and the subsequent bankruptcy cases of its buyer, Tweeter Opco LLC. (http://bankrupt.com/newsstand/or 215/945-7000) UNISYS CORP: Fitch Junks Issuer Default Rating from 'BB-' --------------------------------------------------------- Fitch Ratings has downgraded the Issuer Default Rating and outstanding debt ratings of Unisys Corp. and removed them from Rating Watch Negative: -- IDR to 'CCC' from 'BB-'; -- Secured credit facility to 'B+/RR1' from 'BB+'; -- Senior unsecured debt to 'CCC/RR4' from 'BB-'. Fitch originally placed Unisys on Rating Watch Negative on Feb. 20, 2008 following the company's announcement that it was exploring certain portfolio rationalization and other actions intended to enhance stockholder value. The Rating Outlook is Negative. The ratings and Negative Rating Outlook reflect: -- Fitch's expectations for significant negative free cash flow in 2009 due to the deteriorating macroeconomic environment, especially in the U.S. and U.K., which are Unisys' two largest markets, accounting for approximately 43% and 14% of total revenue, respectively; -- Unisys' weak liquidity profile due to Fitch's expectations for materially negative free cash flow at least through 2009 and the unresolved renewal of the company's $275 million senior secured revolving credit facility, which expires in May 2009. As of Sept. 30, 2008, total liquidity was approximately $706 million, consisting of $494 million of cash and approximately $212 million of availability under the credit facility, net of $63 million of outstanding letters of credit. Furthermore, Unisys has a $150 million accounts receivable securitization facility expiring in May 2011, but the facility was nearly fully utilized at Sept. 30, 2008, with only $5.5 million of remaining availability, assuming sufficient eligible receivables. The facility includes a material adverse change clause, change of control provision, cross default ($25 million), minimum fixed charge coverage ratio and maintenance of certain ratios related to the sold receivables. The facility is subject to termination on Feb. 28, 2010 if the company fails to refinance or extend the maturity date of the 6.875% senior notes due 2010 beyond May 16, 2011. -- The strong possibility of further restructuring actions and associated cash payments for severance beyond what was previously announced in December 2008, which Fitch believes are increasingly necessary given the deteriorating economic environment. Similar to prior economic downturns, Fitch expects demand for Unisys' consulting and systems integration services and servers, especially high-end ClearPath servers, to decline materially. In the absence of significant headcount reductions, Fitch believes Unisys' gross profit margin is likely to contract significantly in 2009 led by the Services business, given its high degree of operating leverage. Employee salaries, the largest expense in the Services business, are relatively fixed in the short- term, resulting in significant profit margin pressure when revenue declines. In the relatively brief recession of 2001, Unisys' Services revenue declined approximately 6% compared with 2000, but gross profit declined nearly 27% as the cost of services remained flat year-over-year. -- Significant revenue generated from the challenged financial services industry. In addition to declining hardware sales to the FSI, Fitch believes revenue from existing FSI outsourcing contracts is likely to remain pressured due to lower transaction volumes on business process outsourcing contracts. Furthermore, new FSI outsourcing contract signings greater than $25 million declined nearly 29% in 2008, the lowest amount since 2001, according to Technology Partners International, Inc. Fitch expects new FSI contract signings to remain pressured in 2009. -- Fitch's belief that Technology segment revenues could decline in excess of 25% year-over-year in 2009 led by declining ClearPath server revenues due to industry-wide weakness in server sales attributable to the weak macroeconomic environment, ongoing turmoil in the financial services industry, a key market for the company, and continued secular declines in ClearPath and associated maintenance revenue. -- Unisys' significant exposure to discretionary consulting and systems integration engagements, which account for 31% of Unisys' Services revenue and 28% of total revenue. -- Weak credit ratings and sharply declining stock price, both of which could pressure new long-term commercial outsourcing contract signings. The Recovery Ratings for Unisys reflect recovery expectations under a distressed scenario, as well as Fitch's expectation that the enterprise value of Unisys, and hence recovery rates for its creditors, will be maximized in a restructuring scenario (as a going concern) rather than a liquidation scenario, considering the attractiveness of Unisys' long-term services contracts. In deriving a distressed enterprise value, Fitch applies a 35% discount to an estimated operating EBITDA of approximately $450 million, the majority of which is expected to be derived from the services business, assuming a normalized industry average margin. Fitch then applies a 3x distressed EBITDA multiple, considering lack of revenue growth, margin pressures and significant restructuring to obtain an average industry profit margin. As is standard with Fitch's recovery analysis, the revolver is assumed to be fully drawn and cash balances fully depleted to reflect a stress event. The 'RR1' for Unisys' secured bank facility reflects Fitch's belief that 100% recovery is likely. The 'RR4' for Unisys' senior unsecured debt reflects Fitch's belief that 30%-50% recovery is realistic. Total debt is approximately $1.1 billion, consisting primarily of: -- $300 million of senior unsecured notes due March 2010; -- $400 million of senior unsecured notes due October 2012; -- $250 million of senior unsecured notes due December 2016; -- $150 million of senior unsecured notes due October 2015. UNITED COMPONENTS: S&P Downgrades Corporate Credit Rating to 'B-' ----------------------------------------------------------------- Standard & Poor's Ratings Services said it has lowered its corporate credit rating on Evansville, Indiana-based United Components Inc. to 'B-' from 'B'. The outlook is negative. The downgrade reflects UCI's tight liquidity and very aggressive leverage. "Given our expectations for the duration and depth of the U.S. recession and our view of the negative effect it will have on aftermarket revenues, S&P no longer expect UCI to achieve lease- adjusted total debt to EBITDA of 5x or less in the year ahead," said Standard & Poor's credit analyst Nancy Messer. Furthermore, the company is negotiating an extension on its $65.5 million revolving credit facility, which expires in June of this year, in a time when S&P expects credit markets to remain tight. Although S&P believes the company will successfully extend or replace its revolving commitment, changes could result: the borrowing cost could rise, the commitment size may be reduced, and the covenants could be tighter. In addition, S&P continues to believe the company must be recapitalized or sold in the next few years because its capital structure includes payment-in-kind notes, which become cash pay in 2012. UCI has these debt maturities coming up -- $190 million of term loan debt in 2012, $230 million of 9.375% senior subordinated notes in June 2013, and $288 million of PIK notes issued by UCI Holdco Inc., UCI's indirect parent company, that become cash pay in March 2012. S&P believes the company's modest cash flow generation is insufficient to materially reduce debt in the near term. Although the aftermarket business has been countercyclical historically, S&P believes the depth of this recession is likely to pressure drivers to drive less and spend less on vehicle maintenance in the intermediate term. The ratings on UCI reflect its highly leveraged financial risk profile and weak business risk profile as an automotive aftermarket supplier. UCI, with annual revenues of about $1 billion, is one of the largest pure-play aftermarket auto suppliers in the highly fragmented North American automotive market, although it is smaller than some diversified competitors. UCI had total debt of $856 million at Sept. 30, 2008. S&P's assessment of UCI's business risk profile reflects the highly competitive character of the automotive aftermarket and the company's concentrated customer base. Its largest customer, AutoZone Inc. (BBB/Stable/A-2), is the nation's largest automotive aftermarket retailer and accounts for about 28% of UCI's sales. Of UCI's revenues, 85% are derived from the aftermarket (both traditional channels and retailers) and 15% from the original equipment manufacturing and service markets. Most of UCI's products are nondiscretionary purchases, but demand for these products is reduced when consumers curtail driving during recessions or when gas prices rise. UCI's sales are narrowly focused: consumable filters, which have a relatively short life cycle, account for 39% of revenues; fuel pumps, 24%; water pumps, 22%; and engine-management products, 15%. Positive factors include UCI's strong market positions, its good brands, and the fact that aftermarket sales, in general, are more stable than new-vehicle sales. Financial results for the first nine months of 2008 were depressed by the U.S. recession, which-with its rising unemployment and tight credit conditions-has seriously reduced consumer confidence and spending on discretionary items. In addition, the gasoline price spike in 2008 led consumers to drive fewer miles, ultimately lowering vehicle maintenance requirements. UCI's financial results were also hurt by high energy prices and commodity costs in 2008. The negative trend continued in the third quarter; sales declined by $12.6 million, or 5.5% year over year, to $218 million. Liquidity is very tight. S&P believes UCI must renegotiate its revolving credit line in the next few months because the commitment expires in June 2009, even though this credit line is rarely drawn. The outlook is negative. UCI remains aggressively leveraged because of pressures on EBITDA and cash flow, combined with accretion of the Holdco PIK notes, which S&P view as debt of the operating company. The likelihood of the company's reducing its high leverage by a material amount remains low in the year ahead because S&P believes the weak U.S. economy will limit revenues and profitability in 2009. S&P could lower the ratings if the economy worsens, leading to persistently weak consumer demand or resistance to commodity cost recovery by customers, creating conditions for lower EBITDA and lack of free cash flow. This could result if EBITDA were to fall to $115 million, a 15% reduction from the $136 million reported for the trailing 12 months ended Sept. 30, 2008. S&P could also lower the ratings if the company's liquidity is compromised by its inability to refinance its revolving credit line in the months ahead. S&P would likely lower the rating if the company were to undertake a distressed exchange of debt. S&P could revise the outlook to stable if the economy rebounds in the near term, but S&P views this as unlikely. Upside rating potential is constrained by the company's very aggressive leverage in combination with approaching debt maturities and lackluster profitability. UNTHINKABLE INC: Files for Chapter 11 Bankruptcy Protection ----------------------------------------------------------- Crain's New York Business relates that Unthinkable Inc. has filed for Chapter 11 bankruptcy protection. Court documents say that Unthinkable lists $1 million to $100 million in liabilities and $100,001 to $1 million in between. The report says that Unthinkable has less than 50 creditors. According to court documents, Unthinkable President Randi Matalon said, "The Debtor is filing the within emergency Chapter 11 petition because its department store customer base has ceased paying it on time and it cannot currently pay its vendors and utilities." Unthinkable Inc. owns contemporary sportswear label Claude Brown. It also owns a vintage fabric firm and a women's weekend line of loungewear. US SHIPPING: Gets Feb. 10 Extension for Waivers to Credit Pact -------------------------------------------------------------- U.S. Shipping Partners, L.P. and its lenders amended January 29, 2009, the Waiver and Fourth Amendment to Third Amended and Restated Credit Agreement, dated as of October 20, 2008, to extend the lenders' waiver of any potential defaults under the financial covenants in the Partnership's senior credit agreement for the quarters ended September 30, 2008 and December 31, 2008 through February 10, 2009. Prior to this extension the waiver was to expire on January 31, 2009. In accordance with the terms of a Forbearance Agreement entered into with holders of a majority-in-interest of the outstanding loans under the senior credit agreement on December 30, 2008, U.S. Shipping is currently engaged in good faith negotiations with the administrative agent and the lenders regarding restructuring and strategic alternatives. "There can be no assurance that the Partnership's negotiations with the lenders will be successful, or that the lenders will not declare all outstanding obligations under the senior credit agreement to be immediately due and payable and pursue their rights and remedies under the senior credit agreement upon termination of the Forbearance Agreement on February 10, 2009." A copy of the Extension of Waiver and Fourth Amendment is available for free at: http://researcharchives.com/t/s?38fa As previously reported by the Troubled Company Reporter, U.S. Shipping did not pay the principal or interest payment due on December 31, 2008, under its senior credit agreement. As a result, an event of default has occurred under the senior credit agreement. According to the regulatory filing, lenders holding a majority-in- interest of the outstanding loans may at any time direct the administrative agent to declare all outstanding obligations under the senior credit agreement to be immediately due and payable and to pursue their rights and remedies under the senior credit agreement. At December 31, 2008, an aggregate of $332.6 million was outstanding under the senior credit agreement. U.S. Shipping, subsequently entered into the forbearance agreement with holders of a majority-in-interest of the outstanding loans under the senior credit agreement. A copy of the Forbearance Agreement is available at: http://researcharchives.com/t/s?378c The Forbearance Agreement will terminate on the earliest to occur of (i) 5:00 p.m. (Eastern time) on February 10, 2009; (ii) the occurrence and continuance of any event of default other than the U.S. Shipping's failure to make the December 31, 2008 principal and interest payments under the senior credit facility and (iii) the failure by U.S. Shipping to comply with any of the provisions of the Agreement. During the term of the Forbearance Agreement, U.S. Shipping has agreed to engage in good faith negotiations with the administrative agent and the lenders regarding restructuring and strategic alternatives, which will include a possible sale of the business. Failure of U.S. Shipping to conduct good faith negotiations will constitute an event of default and result in a termination of the Forbearance Agreement. The lenders' prior waiver of any potential defaults under the financial covenants set forth in the senior credit agreement for the quarters ended September 30, 2008, and December 31, 2008, will expire January 31, 2009, which will result in the occurrence of an event of default under the senior credit agreement, and a termination of the Forbearance Agreement, absent an additional waiver or agreement to forbear by the lenders. U.S. Shipping said there can be no assurance that the lenders will not accelerate the outstanding obligations and pursue their remedies under the senior credit agreement after January 31, 2009. In addition, U.S. Shipping said that its failure to make the Dec. 31, 2008 principal and interest payments under the senior credit facility constitutes an event of default under its interest rate swap agreements. As a result, the counterparty to each interest rate swap agreement may, upon prior notice, elect to terminate such agreement early. If U.S. Shipping's interest rate swap agreement with the administrative agent is early terminated, the firm estimates it would owe approximately $14.9 million under such agreement. If its interest rate swap agreement with Lehman Brothers Special Financing Inc. is early terminated, U.S. Shipping estimates it would owe approximately $9.9 million under the agreement. U.S. Shipping acknowledges that there can be no assurance that the counterparties to these interest rate swap agreements will not early terminate the agreements and seek payment of these obligations. Due to the Forbearance Agreement, however, the counterparties would be unable to require the administrative agent to foreclose on U.S. Shipping's assets during the term of the Forbearance Agreement. U.S. Shipping is due to make an interest payment Feb. 15 on a second-lien loan, Bloomberg's Bill Rochelle reports. About U.S. Shipping Partners L.P. U.S. Shipping Partners L.P. is a leading provider of long-haul marine transportation services for refined petroleum, petrochemical and commodity chemical products in the U.S. domestic "coastwise" trade. Its existing fleet consists of twelve tank vessels: five integrated tug barge units; one product tanker; three chemical parcel tankers and three ATBs. U.S. Shipping has embarked on a capital construction program to build additional ATBs and, through a joint venture, additional tank vessels that upon completion will result in U.S. Shipping having one of the most modern versatile fleets in service. For additional information about U.S. Shipping Partners L.P., please visit http://www.usslp.com/ US SHIPPING: S&P Withdraws 'D' Corporate Credit Rating ------------------------------------------------------ Standard & Poor's Ratings Services withdrew its 'D' corporate credit and other ratings on U.S. Shipping Partners L.P. S&P lowered all ratings on U.S. Shipping to 'D' on Jan. 6, 2009, after the company's announcement on Jan. 5, 2009, that it was in default under the terms of its senior credit agreement, after failing to make principal and interest payments due on Dec. 31, 2008. USG CORP: S&P Downgrades Corporate Credit Rating to 'B+' -------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its ratings on USG Corp. The corporate credit rating was lowered to 'B+' from 'BB-'. All ratings were removed from CreditWatch, where they were placed with negative implications on Oct. 29, 2008. The outlook is negative. "The downgrade reflects our expectation that USG's operating results will continue to be strained during the next several quarters due to contracting commercial construction activity and the ongoing depressed level of housing, resulting in reduced wallboard and ceiling time and grid demand," said Standard & Poor's credit analyst Thomas Nadramia. "As a result, S&P expects that the company's liquidity position, which S&P deem to currently be adequate for the rating at more than $500 million, could somewhat narrow during 2009." S&P estimates discretionary cash flow generation (after capital spending) in the range of negative $50 million to negative $100 million (assuming the realization of $125 million in cost savings and reduced capital expenditures of $50 million or less). In the event market conditions deteriorate more-than-expected, the company's operating losses would likely increase, resulting in liquidity narrowing further despite the company's efforts to conserve cash. "The ratings on Chicago, Illinois-based USG Corp. reflect the company's limited product diversity, the extreme price volatility of gypsum wallboard, its primary product, and the highly cyclical demand for its products," added Mr. Nadramia. "These factors are somewhat tempered by the company's leading position in the U.S. gypsum wallboard and ceiling system markets and adequate liquidity." Although the company maintains a leading market position in the highly competitive gypsum wallboard industry, its earnings and cash flow are subject to wide volatility in both volume and pricing as the industry depends largely on remodeling and new residential construction. As a result, the prolonged housing slowdown has hurt the company's operating results as wallboard demand has fallen for three consecutive years to 7.2 billion square feet from 9.0 bsf during the prior-year period and 10.8 bsf during 2006, constituting a 50% decline from peak to trough. At the same time, current average wallboard prices have declined to $119 msf compared with a peak price of $188 msf during third-quarter 2006, an approximately 37% decline, during this period. In addition to price and volume considerations, fluctuations in energy and paper costs also can meaningfully impact earnings and cash flow. The negative outlook reflects S&P's expectation that despite near- term prospects for end-market demand for wallboard remaining bleak given an anticipated further decline in housing starts and weaker commercial construction activity in 2009. In addition, the ratings depend on management's commitment to maintaining ample liquidity to protect creditors against the negative effects of earnings and cash flow volatility. As a result, while USG's operating performance and metrics may worsen in the near term, S&P expects the company to maintain sufficient liquidity until there is a sustained rebound in wallboard volumes and prices, which S&P does not expect until late 2009 at the earliest. A lower rating is possible if operating conditions are materially weaker than currently expected, causing USG's liquidity cushion to deteriorate. Specifically, if total available liquidity, comprised of cash balances and availability under its revolving credit facility were to fall to less than $250 million, a negative rating action could occur. Although unlikely in the next year, S&P could revise the outlook to stable if the housing recovery begins sooner than expected, and the company's financial risk profile does not suffer any further deterioration. VARGAS REALTY: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Vargas Realty Enterprises, Inc. aka Vargas Realty 140 W. 111th St. New York, NY 10026-4215 Bankruptcy Case No.: 09-10402 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Noble Realty Corp. 09-10403 V & R Realty Corp. 09-10406 E.R. Properties, Inc. 09-10407 Type of Business: Vargas is a real estate agent & manager and operates a travel agency. Chapter 11 Petition Date: January 29, 2009 Court: Southern District of New York (Manhattan) Judge: Stuart M. Bernstein Debtor's Counsel: Carl E. Person, Esq. 325 West 45th Street, Suite 201 New York, NY 10036-3803 Tel: (212) 307-4444 Total Assets: $2,064,500 Total Debts: $10,138,250 The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Crown Financial Solutions LLC financial service $500,000 135 Kinnelon Road Kinnelon, NJ 07405-2333 Tel: (973) 285-3223 Fidelity Trust Realty Inc. financial service $38,250 100 W. 113th Street New York, NY 10026-3013 Tel: (917) 493-1500 Manuel Duran, Jr. contract $0 21-41 Lenox Avenue New York, NY 10026-3819 Tel: (917) 405-4663 CFA Capital Partners LLC indemnification $0 Peter Skyllas $0 Fernando Mateo contract $0 21-41 MD, Jr. LLC $0 New York Road Runners contract $0 Andrew Lichenstein Inc. $0 Lamar Companies advertising $0 contract The petition was signed by Victor Vargas, president and chief executive officer. VENOM INC.: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Venom, Inc., Venom, Inc. d/b/a Gold's Gym 200 West Ridge Pike Conshohocken, PA 19428 Bankruptcy Case No.: 09-10445 Chapter 11 Petition Date: January 22, 2009 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Debtor's Counsel: Robert M. Bovarnick, Esq. Law Offices of Robert M. Bovarnick Two Penn Center Plaza 1500 JFK Blvd., Suite 1310 Philadelphia, PA 19102 Tel: (215) 568-4480 Email: rmb@rbovarnick.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/paeb09-10445.pdf The petition was signed by John DePrince, Treasurer of the company. VISTEON CORP: Ford Won't Help Former Unit Solve Financial Problems ------------------------------------------------------------------ Kimberly S. Johnson at The Associated Press reports that Ford Motor Co. CEO Alan Mulally said that it wouldn't come to the aid of one of its main parts dealers, Visteon Corp. As reported by the Troubled Company Reporter on Jan. 27, 2009, Visteon hired Kirkland & Ellis LLP as bankruptcy counsel and Rothschild Inc. as financial adviser to prepare for a possible bankruptcy filing. Visteon's hiring of the experts doesn't mean a bankruptcy filing is imminent. Visteon and its advisers are studying whether it should file for bankruptcy pre-emptively to conserve its cash. According to The AP, Visteon has laid off about 2,800 workers in recent months. Visteon, The AP relates, said earlier this month that it would shift 2,000 additional workers in Michigan to a four-day work week and reduce their salary. The AP states that Visteon delayed its fourth-quarter results. Visteon expects to report lower product sales for the quarter and full-year 2008 and is on track to lay off about 800 salaried workers by the end of the first fiscal quarter, The AP reports. The AP quoted Mr. Mulally as saying, "Visteon and Ford are clearly in a different place." Visteon supplies parts to other auto companies as well and "they have really diversified their portfolio," The AP says, citing Mr. Mulally. The AP says that Ford Motor has taken over plants that Visteon has failed to sell. Ford Motor, according to The AP, hired back workers and helped pay retiree benefits. According to The AP, Visteon is in danger of being delisted from the New York Stock Exchange. The AP relates that Visteon failed to meet a $75 million minimum market capitalization. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is an automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company also has corporate offices in Shanghai, China; and Kerpen, Germany; the company has facilities in 26 countries and employs approximately 38,500 people. As reported in the Troubled Company Reporter on Nov. 4, 2008, Visteon Corporation's balance sheet at Sept. 30, 2008, showed total assets of US$5.9 billion and total liabilities of US$6.4 billion, resulting in shareholders' deficit of roughly US$530 million. The company reported a net loss of US$188 million on total sales of US$2.11 billion. For third quarter 2007, Visteon reported a net loss of US$109 million on sales of US$2.55 billion. Visteon reported a net loss of US$335 million for the first nine months of 2008, compared with a net loss of US$329 million for the same period a year ago. * * * The Troubled Company Reporter said on Jan. 14, 2009, that Standard & Poor's Ratings Services lowered its corporate credit rating on Visteon Corp. to 'CCC' from 'B-' and removed all the ratings from CreditWatch, where they had been placed on Nov. 13, 2008, with negative implications. The outlook is negative. At the same time, S&P also lowered its issue-level ratings on the company's debt. TCR reported on Nov. 27, 2008, that Moody's Investors Service lowered Visteon Corporation's corporate family and probability of default ratings to Caa2, and Caa1, respectively. In a related action, Moody's also lowered the ratings of Visteon's senior secured term loan to B3 from Ba3, unguaranteed senior unsecured notes to Caa3 from Caa2, and guaranteed senior unsecured notes to Caa2 from Caa1. Visteon's Speculative Grade Liquidity remains SGL-3. The outlook is negative. VITRO SAB: Will Miss US$44.8MM in Interest Payments This Week ------------------------------------------------------------- Vitro SAB said it will miss US$44.8 million in interest payments due this week on US$1 billion of bonds to preserve cash to run its operations, Thomas Black of Bloomberg News reports. According to the report, the company, in a statement to the Securities and Exchange Commission, said four counterparties to Vitro's derivative investments provided notice of default prompting Vitro to announce it will skip the two payments due Feb. 2. "Vitro intends to maintain its operations and continue its business relationships with its customers and suppliers as it seeks to achieve a restructuring of its indebtedness," Bloomberg quoted the company as saying. The company, the report says, ran into debt trouble because lower glass demand cut profit just as Vitro racked up losses by using derivatives to lock in natural gas prices last summer, when the fuel was hitting a high of US$13.577 per million British thermal units. Bloomberg News notes Vitro said the unnamed counterparties demanded payment of US$293 million related to the losses, creating an "event of default" under the derivative agreements. The company said it had losses related to derivative investments of US$358 million at the end of December, not counting accrued interest, the report relates. Bloomberg News says Vitro said that 30 days after missing the payment, it will be in default of its US$700 million of bonds maturing in 2017 and US$300 million of bonds due in 2012. The company will also default on US$216 million of notes due in 2013, the report added. "Vitro sees this as a temporary measure to allow the necessary time to negotiate with all parties involved," Vitro said in the regulatory filing obtained by Bloomberg News. About Vitro Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV: VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is a global glass producer, serving the construction and automotive glass markets and glass containers needs of the food, beverage, wine, liquor, cosmetics and pharmaceutical industries. * * * As reported by the Troubled Company Reporter-Latin America on January 28, 2009, Moody's Investors Service downgraded Vitro, S.A.B. de C.V.'s senior unsecured debt and corporate family ratings to Ca from Caa1. The ratings outlook is negative. Fitch Ratings also downgraded these ratings for Vitro, S.A.B. de C.V.: -- Long-term Issuer Default Rating to 'CC' from 'B-'; -- Long-term local currency IDR to 'CC' from 'B-'; -- US$300 million senior notes due 2012 to 'CC/RR4' from 'B- /RR4'; -- US$225 million senior notes due 2013 to 'CC/RR4' from 'B- /RR4'; -- US$700 million senior notes due 2017 to 'CC/RR4' from 'B- /RR4'. WASHINGTON MUTUAL: Seeks April 24 Extension of Exclusive Periods ---------------------------------------------------------------- Section 1121(b) of the Bankruptcy Code provides for an initial 120-day period after the Petition Date during which Washington Mutual Inc. and its debtor-affiliate, WMI Investment Corp., have the exclusive right to file a Chapter 11 plan. Section 1121(c)(3) provides that, if a debtor proposes a plan within the exclusive filing period, it has a period of 180 days after the Petition Date to obtain acceptances of the plan. Exclusive Periods are intended to afford Chapter 11 debtors a full and fair opportunity to propose a consensual reorganization plan and solicit acceptances of it without the deterioration and disruption of their business that might be caused by the filing of competing plans by non-debtor parties. Section 1121(d) provides that a court may, for cause, extend or reduce a debtor's exclusive plan period up to 18 months, and the exclusive solicitation period up to 20 months, after the Petition Date. By this motion, the Debtors ask the U.S. Bankruptcy Court for the District of Delaware to extend their Exclusive Plan Filing Period by 90 days through April 24, 2009, and their Exclusive Solicitation Period to June 23, 2009. "The Debtors' cases are both large and complex and thus, warrant an extension of the Exclusive Periods," Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, emphasizes. Given outstanding debt obligations totaling more than $7 billion, the Debtors' cases constitute the largest bank failure in history, he relates. Moreover, the seizure of all of Washington Mutual Bank's assets by the Federal Deposit Insurance Corporation, as well as the subsequent sale of all those assets to JPMorgan Chase -- which almost completely stripped the Debtors of their employees and business records -- significantly complicated the Debtors' otherwise straightforward restructuring or liquidation. The Seizure and the Sale caused uncertainty about the legal status of some of the Debtors' most significant assets, including several billions of dollars originally on deposit with WMB and WMBfsb, he adds. Mr. Collins avers that despite the challenges, the Debtors have made significant progress in the administration of their cases. Among others, the Debtors: -- hired several former WMB employees for successful access to their business records; -- filed their schedules of assets and liabilities and statements of financial affairs; and -- entered into an agreement with JPMorgan Chase concerning the payment of most of the vendors with which WaMu has contracts. The Debtors tell the Court they are currently in the process of addressing a number of significant legal and economic issues affecting their assets and potential liabilities, which resolution is essential for the formulation of their Chapter 11 plan. Accordingly, an extension of the Exclusive Periods would allow for the continuation of the progress the Debtors have achieved, Mr. Collins asserts. The Debtors clarify that they do not intend to delay the bankruptcy process or to pressure creditors to accede to an unfair plan by virtue of their Exclusive Period extension request. The Debtors add they have consulted and coordinated with the Official Committee of Unsecured Creditors and major creditor constituencies on every major issue relating to their cases. Judge Mary Walrath will convene a hearing on February 17, 2009, to consider the Debtors' request. Objections, if any, must be filed by February 10. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over Sept. 25 by U.S. government regulators. The next day, WaMu and its debtor-affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. (Washington Mutual Inc. Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) WASHINGTON MUTUAL: Seeks March 10 Extension to Decide on Leases --------------------------------------------------------------- Section 365(d)(4)(A) of the Bankruptcy Code provides that if a debtor does not assume or reject an unexpired lease or an executory contract by the initial period of 120 days after the Petition Date, the Court may extend the period prior to the expiration of the 120-day period, for 90 days on the request of the debtor for cause. As of January 20, 2009, Washington Mutual, Inc. and affiliate WMI Investment Corp. are parties to multiply real property leases: Lease Landlord Lease Expiration -------- ----- ---------- BMR International II L.L.C. CA office space lease 02/28/2011 Washington Mutual Bank, FA NY office space lease 09/30/2012 Second and Union, LLC WA office space lease 08/31/2016 Batac Corporation FL office space lease 08/31/2012 PGA Plaza Associates, Ltd. 20 Parking spaces 12/31/2011 Given the seizure of the Federal Deposit Insurance Corporation of all the assets of Washington Mutual Bank and the subsequent sale of substantially all of WMB's assets to JPMorgan Chase, the Debtors relate that they have dedicated substantial time and effort to obtaining access to their business records for the administration of their cases, including information relating to their executory contracts and unexpired leases. "Thus, the Debtors need additional time to analyze their real property needs," Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, says. Accordingly, the Debtors ask the U.S. Bankruptcy Court for the District of Delaware to extend the period within which they may assume or reject unexpired non-residential real property leases and executory contracts to March 10, 2009. The Debtors need more time to evaluate each of their Leases and to determine the terms of any proposed assumption and assignment to JPMorgan Chase, the proposed assignee of certain of the Leases, Mr. Collins reiterates. Mr. Collins contends that no lessor will suffer harm or prejudice as a result of the Debtors' extension request because in an event of any Lease Assumption or Assignment, the lessors will receive the direct economic benefit of uninterrupted tenancy and any cure payments paid in connection with the Assumption. In addition, he points out, the Debtors and JPMorgan have timely performed all postpetition obligations under the Leases with respect to all undisputed lease payments, as required by Section 365(d)(3) of the Bankruptcy Code. Moreover, the Debtors assure the Court that they intend to continue to perform their obligations during the extension period until that time any of the Leases are either rejected, assumed, or assumed and assigned to third parties. The Debtors, however, note they have not satisfied all postpetition amounts in connection with a Seattle, Washington lease they are a party to, for which resolution is "currently being negotiated." The Debtors aver they have served a copy of their Lease Decision Extension Motion to the U.S. Trustee, the counsel for the Official Committee of Unsecured Creditors, the Office of Thrift Supervision, the FDIC, and the affected lessors. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over Sept. 25 by U.S. government regulators. The next day, WaMu and its debtor-affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. (Washington Mutual Inc. Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) WASHINGTON MUTUAL: To Sell FTV Investments to IVF for $3.2MM ------------------------------------------------------------ Pursuant to Investment Sale Procedures approved by the U.S. Bankruptcy Court for the District of Delaware, Washington Mutual Inc and WMI Investment Corp. notified the Court that they intend to sell their limited partnership interests with related capital commitments in so-called FTV Funds for $3,463,900, consisting of: FTV Fund Partnership Purchase Price -------------------- -------------- Financial Technology Ventures (Q), L.P. $599,978 Financial Technology Ventures II (Q), L.P. 2,700,000 FTVentures III, L.P. 163,922 The Debtors will sell the FTV Assets to Industry Ventures Fund V, L.P., a limited partner in certain of the FTV Funds, free and clear of all liens under Section 363(f) of the Bankruptcy Code. In addition to the $3,463,900 cash purchase price, Industry Ventures Fund has agreed to assume the Debtors' unfunded commitments with respect to the FTV Funds for $6.9 million. As of September 30, 2008, the Debtors' aggregate capital account balance for the FTV Funds was $8.5 million, according to Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, tells the Court. Pursuant to the FTV Purchase and Sale Agreement, the closing with respect to each Interest will take place within three days after the later of: (a) the date on which all the Closing Deliveries have been made, which include the Debtors' delivery to Industry Ventures Fund of: -- a Transfer Agreement, which provides for the consent of the Debtors' general partner to the assignment and transfer of the Interest in the Partnership; -- a Court order approving the Sale, and entitling Industry Ventures Fund of the protection afforded by Section 363(m) of the Bankruptcy Code; -- all other documents relating to the Sale; or (b) the Debtors' compliance with the Court-approved Notice and Objection Procedures. With respect to each Partnership, the Purchase Price will be: (i) increased by an amount equal to the aggregate contributions to the capital of the Partnership during the period beginning on September 30, 2008, and ending on the Closing Date; and (ii) reduced by an amount equal to the aggregate distributions received by the Debtors from the Partnership from September 30, 2008 to the Closing Date. Any Distribution other than cash and cash equivalents will be valued at the value placed on the property by the general partner of the Partnership at the time of the Distribution. The parties contemplate upon each Closing, the Sale will be deemed effective as of September 30, 2008. A full-text copy of the FTV Purchase Pact is available for free at http://bankrupt.com/misc/WaMu_FTVFundsPurchaseAgreement.pdf In an official statement emailed to Bloomberg News, WaMu said that it also is "in discussions with a number of parties relating to its interests, as a limited partner, in seven other venture capital funds." WaMu noted that the Sales are consistent with its ongoing effort to maximize the value of the Debtors' estate for the benefit their creditors. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over Sept. 25 by U.S. government regulators. The next day, WaMu and its debtor-affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. (Washington Mutual Inc. Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) WASHINGTON MUTUAL: US Trustee, JPMorgan React to Bar Date Request ----------------------------------------------------------------- Roberta A. DeAngelis, the Acting United States Trustee for Region 3, and JPMorgan Chase Bank, N.A., raised issues regarding the request of Washington Mutual, Inc. and WMI Investment Corp. asking the U.S. Bankruptcy Court for the District of Delaware to establish March 31, 2009, as the deadline for all persons or entities, including Governmental Units, to file prepetition proofs of claim against them in their Chapter 11 cases. The U.S. Trustee says that she is "mindful" of the administrative burden associated with the filing of proofs of claim by the Debtors' creditor body, which consists of approximately 7,000 claims that are listed in the Debtors' schedules as employee compensation and benefit claims. Ms. DeAngelis acknowledges that the Claims are listed as contingent, liquidated and disputed because Washington Mutual Bank may be primarily liable for the plan-related obligations in light of the Debtors' records, which reflect that certain of the plan-related liabilities were attributable to, or listed on, WMB's books. In addition, she says, it is unclear whether JPMorgan Chase, as WMB's acquirer, assumed some or all of the scheduled obligations. Ms. DeAngelis adds that she is "presently considering the Debtors' position with regard to the manner in which Employee Claims have been scheduled." She points out that "[l]iability schedules are designed to minimize the administrative burden on the creditor body by giving claimants an opportunity to determine whether they agree with the Debtors' assessment of their claims." The U.S. Trustee reserves the right to assert an objection. JPMorgan Chase insists that it needs more time to continue its ongoing efforts to understand and evaluate the claims and assets it has acquired from the Federal Deposit Insurance Corporation in its capacity as receiver for WMB. Adam G. Landis, Esq., at Landis Rath & Cobb LLP, in Wilmington, Delaware, tells the Court that setting the Claims Bar Date to March 31, 2009, would be "shoehorning" the complex issues regarding jurisdiction, competing insolvency regimes, ownership of assets and setoff rights into the claims adjudication process in the Debtors' cases. Mr. Landis relates that JPMorgan Chase's acquisition of WMB entailed integration efforts with respect to the acquired assets and liabilities, and customers and employees. In the same manner, JPMorgan Chase has been segregating its own assets and liabilities from those of the Debtors' estates. Mr. Landis adds that in accordance with Court-approved procedures, JPMorgan has had to adopt a "painstaking process" of providing dual notice to the FDIC and to the Debtors with respect to vendor stipulations and the Debtors' assertion of ownership. Moreover, an initial review of the Debtors' Schedules confounds, rather than clarifies, issues relating to JPMorgan Chase because the Debtors assert interests in property that clearly should belong to the buyer of the receivership assets, Mr. Landis contends. Against this backdrop, JPMorgan Chase asks Judge Mary Walrath to deny the Debtors' request, or exempt it from any bar date that the Court may set. JPMorgan proposes that a status conference be held after March 31, 2009, to determine an applicable bar date for it. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over Sept. 25 by U.S. government regulators. The next day, WaMu and its debtor-affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. (Washington Mutual Inc. Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) WAYNE MCGEE: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Wayne P. McGee 4063 Alemeda Crescent Paducah, KY 42001 Bankruptcy Case No.: 09-50067 Chapter 11 Petition Date: January 22, 2009 Court: United States Bankruptcy Court Western District of Kentucky (Paducah) Debtor's Counsel: Todd A. Farmer, Esq. Stout, Farmer & King, PLLC 329 N. 5th Street PO Box 7766 Paducah, KY 42002-7766 Tel: (270) 443-4431 Fax: (270) 443-4631 Email: todd@sfk-law.com Total Assets: $1,497,270 Total Debts: $5,586,500 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/kywb09-50067.pdf The petition was signed by Wayne P. McGee. WELLMAN INC: Emerges From Bankruptcy; Becomes Private Company ------------------------------------------------------------- Wellman, Inc. has completed the necessary requirements to emerge from bankruptcy and has filed a "Notice of Effective Date" with the Bankruptcy Court for the Southern District of New York. Wellman has emerged as a private company with Sola, Ltd. and BlackRock Financial Management, Inc. investing $35 million in exchange for 50% of the voting power of Reorganized Wellman. The remaining 50% voting power has been provided to the old first and second lien holders in consideration for extinguishing their pre- petition debt. In addition, Reorganized Wellman has entered into a $35 million revolving credit facility with CIT which is secured by a first lien on substantially all of Wellman's assets. Proceeds from the Plan Sponsors and exit facility are to repay amounts borrowed under its Debtor in Possession Credit Agreement, pay certain deferred financing fees, administrative expenses, priority claims, cure payments and professional fees. Wellman filed a restructuring plan before the Bankruptcy Court on June 25, 2008. Judge Stuart Benstein later confirmed Wellman Inc.'s plan, as reported by the Troubled Company Reporter on January 13, 2009. First-lien creditors get an estimated 30% of their claims while second-lien holders will get an estimated 10% under the plan. Moreover, under the plan, the first and second lien holders will receive Third Lien Convertible Notes in the reorganized company in exchange for their prepetition claims. These Notes can be converted into 50% of Reorganized Wellman. The Plan Sponsor, SOLA LTD, will provide the Company with $35 million in cash in exchange for $40 million of Second Lien Convertible Notes. These Notes can be converted into 50% of Reorganized Wellman. Keith R. Phillips, Wellman's Chief Financial Officer, stated, "I would like to thank Sola, Ltd., BlackRock Financial Management, Inc., and CIT for providing us the funding we require in this difficult credit market. We are emerging with a strong financial foundation and sufficient liquidity to meet our customers' needs. We look forward to working with our customers and suppliers to provide them with significant value." Reorganized Wellman has a new Board of Directors consisting of 7 members including its President and Chief Executive Officer, Mark Ruday. Reorganized Wellman expects to maximize its financial position as a result of its singular focus on the PET resin industry and the value it provides to its customers, while it minimizes costs and working capital. During Wellman's bankruptcy it structurally changed its business by selling or closing many of its unprofitable operations and consolidated all of its PET resin production into its world class Pearl River facility located in Hancock County Mississippi. As a result of this change, the Company was able to significantly reduce its manufacturing costs, lower its working capital and streamline its organizational structure. Mark Ruday, Wellman's President and Chief Executive Officer, stated, "This has been a long and difficult process. I would like to thank all of our customers, vendors, creditors, employees, directors, stakeholders and advisors for working with us to complete our reorganization and emerge from bankruptcy. With our sole focus on the PET Resins industry and strong capital structure, we look forward to continuing to have mutually beneficial relationships with all of our constituencies." About Wellman Inc. Headquartered in Fort Mill, South Carolina, Wellman Inc. ([OTC]: WMANQ.OB) -- http://www.wellmaninc.com/-- manufactures and markets packaging and engineering resins used in food and beverage packaging, apparel, home furnishings and automobiles. They manufacture resins and polyester staple fiber a three major production facilities. The company and its debtor-affiliates filed for Chapter 11 protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No. 08-10595). Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in New York City, represented the Debtors. Lazard Freres & Co., LLC, acted as the Debtors' financial advisors and investment bankers. Conway, Del Genio, Gries & Co., LLC, was retained as the Debtors' chief restructuring advisor. The United States Trustee for Region 2 appointed seven members to the Official Committee of Unsecured Creditors. Mark R. Somerstein, Esq., at Ropes & Gray LLP, served as the Committee's bankruptcy counsel. FTI Consulting, Inc., served as the panel's financial advisors. Wellman Inc., in its bankruptcy petition, listed total assets of $124,277,177 and total liabilities of $600,084,885, as of Dec. 31, 2007, on a stand-alone basis. Debtor-affiliate ALG, Inc., listed assets between $500 million and $1 billion on a stand-alone basis at the time of the bankruptcy filing. Debtor- affiliates Fiber Industries Inc., Prince Inc., and Wellman of Mississippi Inc., listed assets between $100 million and $500 million at the time of their bankruptcy filings. On a consolidated basis, Wellman Inc., and its debtor-affiliates listed $512,400,000 in total assets and $730,500,000 in liabilities as of June 30, 2008. Bankruptcy Creditors' Service, Inc. publishes Wellman Bankruptcy News. The newsletter tracks the chapter 11 case of Wellman Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) WISONSIN STEEL: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Wisconsin Steel Industries, Inc. 1225 South 41st Street Milwaukee, WI 53215 Bankruptcy Case No.: 09-20670 Chapter 11 Petition Date: January 22, 20009 Court: United States Bankruptcy Court Eastern District of Wisconsin (Milwaukee) Judge: James E. Shapiro Debtor's Counsel: Leonard G. Leverson, Esq. Leverson & Metz S.C. 225 East Mason Street, Suite 100 Milwaukee, WI 53202 Tel: (414) 271-8503 Email: lgl@levmetz.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/wieb09-20670.pdf The petition was signed by Theodore E. Dolhun, President of the company. YRC WORLDWIDE: Completes First Phase of Financing Transaction ------------------------------------------------------------- YRC Worldwide Inc. closed the first part of the sale and financing leaseback transaction from a contract with NATMI Truck Terminals, LLC entered on December 19, 2008. The company received approximately $101 million of proceeds and expects to receive approximately $50 million more in the second closing. "This is one of many significant steps in the initiatives to improve our liquidity," stated Tim Wicks, Executive Vice President and CFO of YRC Worldwide. "We are pleased with our strong working relationship with NATMI and how quickly we have been able to complete this first step. We remain encouraged by our progress on the next phases. These transactions are a key component of the discussions with our banks, which remain very productive." In the company's waivers filed with the SEC on January 22, 2009, it stated that it now has the ability to use the proceeds from this transaction for operating purposes, which is the company's current intention. The company will account for the proceeds as a financing transaction, therefore, the assets remain on the books and a lease obligation will be recorded as long-term debt. The company will recognize the lease payments through interest expense with no impact to depreciation expense. As reported by the Troubled Company Reporter on January 19, 2009, YRC obtained waivers under its credit facilities. The company previously announced discussions with its banking group to modify certain terms of its credit facilities, including changes to its leverage ratio, in addition to early renewal of its asset-backed securitization facility. The company's banking group provided waivers for the credit facilities until mid-February 2009 to allow sufficient time to amend the facilities and renew the ABS without a delay in reporting the company's 2008 results scheduled for after market on January 29, 2009. Given that YRC canceled its tender offer in late December and retained the $250 million of cash drawn on the revolver in October 2008, the company expects its total debt to exceed 3.5 times (a limit established in its credit facilities) its trailing 12 months earnings before interest, taxes, depreciation and amortization as of December 31, 2008. At December 31, 2008, the company had around $300 million of cash and expects to generate additional cash from sale and leaseback transactions, including its pending transaction for $150 million, and proceeds from sales of excess facilities, while reducing its 2009 equipment purchases due to the integration of its national companies. The company also recently announced ratification of a 10% reduction in union wages that is targeted to result in annual cost savings of $220 to $250 million in addition to the $75 to $85 million in savings from non-union compensation reductions that were effective January 1, 2009. When combining these cost savings with the planned run rate of $200 million of operating income from the integration of the Yellow Transportation and Roadway networks, the company expects to improve its operating performance by around $500 million going into 2010. The company has cautioned that its expectations regarding a bank amendment and the date of the bank amendment are only its expectations regarding this matter. Whether the company and its banks actually enter into an amendment is entirely dependent on the outcome of their discussions and approval of a majority in interest of the participating banks. About YRC Worldwide Inc. Headquartered in Overland Park, Kansas, YRC Worldwide Inc. -- http://www.yrcw.com/-- a Fortune 500 company and one of the largest transportation service providers in the world, is the holding company for a portfolio of brands including Yellow Transportation, Roadway, Reimer Express, YRC Logistics, New Penn, USF Holland, USF Reddaway, and USF Glen Moore. The enterprise provides global transportation services, transportation management solutions and logistics management. The portfolio of brands represents a comprehensive array of services for the shipment of industrial, commercial and retail goods domestically and internationally. YRC Worldwide employs approximately 58,000 people. * * * As reported in the Troubled Company Reporter on Jan. 9, 2009, Standard & Poor's Ratings Services revised the implications of its CreditWatch review of YRC Worldwide Inc. (CC/Watch Dev/--) to developing from negative. The revision follows news of the Overland Park, Kansas-based trucking company's terminated debt tender offer and negotiations with its bank group to modify terms on its revolving credit and asset backed securitization facilities. On January 13, the TCR said Fitch Ratings downgraded the Issuer Default Ratings and debt ratings of YRC (IDR to 'CCC' from 'B'; Secured credit facilities to 'B/RR1' from 'BB/RR1'; and Senior unsecured to 'C/RR6' from 'CCC+/RR6') and its subsidiary, YRC Regional Transportation, Inc. (IDR to 'CCC' from 'B'; and Senior secured notes to 'C/RR6' from 'CCC+/RR6'.) ZIFF DAVIS: Sells 1UP Digital to Hearst Corp. Unit -------------------------------------------------- Ziff Davis Media said it has sold 1UP Digital Network, including 1UP.com, MyCheats.com, GameVideos.com and GameTab.com to UGO Entertainment, a division of Hearst Corporation Ziff Davis Media's EGM Magazine will be discontinued. The January 2009 issue will be the final printed issue. "We believe this is a smart transaction for Ziff Davis Media that places these market leading assets and teams in a great environment poised for further success. The transaction allows us to pay down debt and shift our full focus to our core PCMag Digital Network business. We thank our 1UP team members for their contributions and wish them the best of success into the future", said Ziff Davis Media CEO Jason Young. "Since we started UGO 11 years ago, we have served the gamer community and built a world-class online publishing platform," said J Moses, CEO of UGO Entertainment. "The acquisition of 1UP, with its authentic voice, tenured editorial personalities and bustling user community, allows us to expand our base of quality content and represents a major step forward in UGO's mission to become the leader in the games space." Ziff Davis Media recently announced the launch of the PCMag Digital Network reflecting a move to a 100% digital position for its flagship brand. The PCMag Digital Network leverages its quality content and audience to offer marketers a unique combination of solutions that enable strong brand positioning, while driving measurable response results. More announcements about the future growth and expansion of The Network will be issued in the coming months. GCA Savvian Advisors acted as exclusive financial advisor to Ziff Davis Media on the transaction. About the PCMag Digital Network The PCMag Digital Network - http://www.PCMag.com-- is one of the world's best-known publishers of leading technology-based digital content products. Its flagship property, PCMag.com, delivers comprehensive labs-based product reviews and the world-renowned PCMag Editors' Choice Awards, the most trusted buying recommendations for technology products and services across the globe. Reaching more than seven million highly engaged technology buyers and influencers, PCMag Digital Network provides contextual marketing solutions that drive results. Brands within the Network also include ExtremeTech, Gearlog, Appscout, Smart Device Central, GoodCleanTech, DL.TV, Cranky Geeks, and PCMagCast. The Network's content is delivered worldwide to readers across a multiple platform of Web sites, e-newsletters, Webcasts, broadband video, software downloads and RSS feeds to users in more than 20 countries. About Hearst Corporation Hearst Corporation -- http://www.hearst.com/-- is a diversified communications company. Its major interests include 16 daily and 49 weekly newspapers, including the Houston Chronicle, San Francisco Chronicle and Albany Times Union; as well as interests in an additional 43 daily and 72 non-daily newspapers owned by MediaNews Group, which include the Denver Post and Salt Lake Tribune; nearly 200 magazines around the world, including Cosmopolitan and O, The Oprah Magazine; 28 television stations through Hearst-Argyle Television which reach a combined 18% of U.S. viewers; ownership in leading cable networks, including Lifetime Television, A&E Television Networks, The History Channel and ESPN; as well as business publishing, Internet businesses, television production, newspaper features distribution and real estate. About Ziff Davis Headquartered in New York City, Ziff Davis Media, Inc. -- http://www.ziffdavis.com/-- and its affiliates are integrated media companies serving the technology and videogame markets. They are information services and marketing solutions providers of technology media, including publications, Websites, conferences, events, eSeminars, eNewsletters, custom publishing, list rentals, research and market intelligence. Their US-based media properties reach over 22 million people per month at work, home and play. They operate in three segments: the Consumer Tech Group, which includes PC Magazine and pcmag.com; the Enterprise Group, which includes eWEEK and eweek.com, and the Game Group, which includes Electronic Gaming Monthly and 1up.com. The company and six debtor-affiliates filed for bankruptcy protection on March 5, 2008 (Bankr. S.D. N.Y. Case No. 08-10768). Carey D. Schreiber, Esq., at Winston & Strawn, LLP, represents the Debtors in their restructuring efforts. The Court confirmed the Debtors' Second Amended Plan of Reorganization on June 17, 2008. The Debtors emerged from bankruptcy protection on July 1, 2008. * Federal Reserve Develops Policy to Modify Mortgages ----------------------------------------------------- Sudeep Reddy at The Wall Street Journal reports that the Federal Reserve has come up with a new policy to alter mortgages tied to assets it acquired through recent federal bailouts. Citing Federal Reserve Chairperson Ben Bernanke, WSJ states that the goal of the policy is to "avoid preventable foreclosures" on residential mortgage assets that the central bank held, owned or controlled. The report says that the Treasury Department, in collaboration with the Federal Reserve and other agencies, is expected to disclose broader housing-relief efforts in coming weeks. WSJ says that modifications on the mortgages could include: -- reduction of a mortgage's interest rate, -- an extension on the loan, -- a deferral or reduction of the loan principal or other changes. According to WSJ, it is yet unclear how many mortgages could be modified through the new policy, which applies to $84 billion of assets that the Federal Reserve holds in connection with its financial assistance to Bear Stearns Cos. and American International Group Inc. The Board of Governors has approved the new policy, says WSJ. WSJ relates that the new policy fulfills a requirement of a legislation authorizing the $700 billion financial-sector rescue, which directs government agencies to implement a plan to "maximize assistance for homeowners" and to use their authority to encourage servicers of the underlying mortgages to lessen foreclosures. According to the report, many of the mortgage assets don't fall under the requirements dictated by the bailout legislation. Citing Mr. Bernanke, the report says that the Federal Reserve "has decided to apply this policy more widely" to the assets pledged as collateral in the rescues. * Newspaper Industry Hit By Revenue Declines, Recession ------------------------------------------------------- Robert W. Decherd, president and chairman of A.H. Belo Corp., which publishes The Dallas Morning News, said in a Jan. 30 letter that the rapid deterioration in the U.S. economy has changed the nature and urgency of re-thinking the company's business model -- "just as every newspaper publisher and companies in virtually every American industry are compelled to do." The past two months saw the demise of two major players in the industry. Tribune Co., which own leading papers, including the Los Angeles Times and Chicago Tribune, etc., having collective paid circulation totaling 2.2 million copies daily and 3.3 million copies on Sundays, filed for bankruptcy on Dec. 8, 2008. While Tribune had a wide portfolio, which included television and radio broadcasting, the Internet, and other entertainment offering, including the Chicago Cubs baseball team, it blamed its bankruptcy filing on the unprecedented decline in the newspaper publishing industry, which decline exacerbated by the current recession. The Star Tribune newspaper, which has the highest daily circulation in the state of Minnesota, and 15th largest daily newspaper in the United States, sought bankruptcy protection on Jan. 15 due to its worsening financial conditions and its heavy debt burden. "The domestic newspaper industry has been crippled by an unprecedented and severe decline in advertising revenue," said The Star Tribune Company CFO David W. Montgomery, in a document explaining Star Tribune's bankruptcy filing. "While this decline has been occurring for several years, the decline has been accelerated and exacerbated by the recession and the dislocation of the credit markets." Aside from Star Tribune and Tribune Co., other newspaper owners have been hit by the decline in advertisement revenues although they have been able to avert bankruptcy filing, so far. Advertising, Circulation Down Comparing figures provided by the Audit Bureau of Circulations for six-month periods ending Sept. 30, 2008, and March 31, 2008, daily circulation for the top 30 newspapers in the U.S. are down 5.27%: Daily Circulation For Six Months Ended -------------------- 09/30/08 03/31/08 % Change -------- -------- -------- 1 USA Today 2,293,310 2,284,219 0.40% 2 The Wall Street Journal 2,011,999 2,069,463 -2.78% 3 The New York Times 1,000,665 1,077,256 -7.11% 4 Los Angeles Times 739,147 773,884 -4.49% 5 Daily News - New York, NY 632,595 703,137 -10.03% 6 New York Post 625,421 702,488 -10.97% 7 Washington Post 622,714 673,180 -7.50% 8 Chicago Tribune 516,032 541,663 -4.73% 9 Houston Chronicle 448,271 494,131 -9.28% 10 The Arizona Republic - Phoenix 413,332 413,332 0.00% 11 Newsday - Melville, NY 377,517 379,613 -0.55% 12 San Francisco Chronicle 339,430 370,345 -8.35% 13 Dallas Morning News 338,933 368,313 -7.98% 14 The Boston Globe 323,983 350,605 -7.59% 15 Star Tribune - Minneapolis, MN 322,360 345,130 -6.60% 16 The Star-Ledger - Newark, NJ 316,280 334,150 -5.35% 17 The Chicago Sun-Times 313,176 330,280 -5.18% 18 The Plain Dealer - Cleveland, OH 305,529 326,907 -6.54% 19 The Philadelphia Inquirer 300,674 322,362 -6.73% 20 Detroit Free Press 298,243 316,007 -5.62% 21 The Oregonian - Portland, OR 283,321 312,274 -9.27% 22 The Atlanta Journal-Constitution 274,999 308,944 -10.99% 23 The San Diego Union-Tribune 269,819 304,399 -11.36% 24 St. Petersburg Times 268,935 288,669 -6.84% 25 The Sacramento Bee 253,249 268,755 -5.77% 26 The Indianapolis Star 244,796 255,303 -4.12% 27 St. Louis Post-Dispatch 240,796 255,057 -5.59% 28 The Kansas City Star 239,358 252,785 -5.31% 29 The Orange County (CA) Register 236,270 250,724 -5.76% 30 The Mercury News - San Jose, CA 224,199 240,223 -6.67% -------- -------- ------ 15,075,353 15,913,598 -5.27% Mr. Montgomery, Star Tribune's CEO, said that with respect to the newspaper industry, print classified advertising dropped by more than 25% in the first half of 2008 alone, representing a $1.8 billion loss in revenue for domestic newspapers. The industry, he added, has suffered historic declines in circulation, which have not only resulted in decreased circulation revenue, but have also acted as a further catalyst for declines in advertising revenue. He noted that much of a newspaper's more profitable print advertising sales are tied to circulation, which advertisers use as a proxy for readership. As circulation has declined, newspapers have been compelled to charge less for these ads. Chandler Bigelow III, Tribune's senior vice president and chief financial officer, said that while the company's newspaper advertising revenue continues to be in line with other large metropolitan newspapers, newspaper advertising revenue generally is in significant decline, down industry-wide 15% to 20% in 2007 in major metropolitan markets, and down industry-wide nearly $2 billion, or 18%, in the third quarter of 2008. Gannett Co., Inc., which owns the U.S.'s most read newspaper, USA Today, and 84 other newspapers, said its publishing segment operating revenues were $1.4 billion for the quarter of 2008, compared with $1.7 billion in the fourth quarter of 2007, an 18.6% decline. Advertising revenues were $963.4 million compared with $1.2 billion in the fourth quarter of 2007. At USA TODAY, advertising revenues were 18.5% lower in the fourth quarter compared to the fourth quarter in 2007. Gannett said that its results were reflective of "unprecedented turmoil in the economies of both the U.S. and the UK and in the financial market", although the results of its broadcasting and digital segments were largely unchanged. New York Times Co. disclosed that in the fourth quarter of 2008 total revenues decreased 10.8% to $772.1 million, as advertising revenues decreased 17.6%. The New York Times publisher said revenues decreased mainly due to lower print advertising. "The disruptions of the global economy are affecting all businesses and industries, especially companies, such as ours, that generate a significant portion of their revenues from advertising," said Janet L. Robinson, NYT president and CEO. Cablevision Systems Corporation, which bought Newsday from Tribune Co. in July 2008, has yet to reveal its fourth quarter results on Feb. 23. It recorded $73,468,000 in revenues from its newspaper publishing group in three months ended Sept. 30, 2008. Other firms are scheduled to release their fourth quarter results on these dates: Company Earnings Release Date ------- -------------------- News Corporation 02/05/09 Washington Post Co. 02/25/09 Cablevision 02/23/09 A.H. Belo Corp. 02/17/09 Sun-Times Media Group 03/09/09 The McClatchy Company 02/05/09 Journal Register Co. 02/02/09 Gatehouse Media Inc. 03/09/09 American Media Inc. __/__/09 Firms that are privately held, like Hearst Corporation, owner of the San Francisco Chronicle, do not publicly disclose their financial results. Rising Internet Traffic Cutting Print Revenues Various reports say that newspaper revenues have been decreasing, as readers have shifted to the Web. According to Bloomberg, rising Internet use have hurt magazines and newspapers. While overall revenues fell, New York Times' Internet businesses, which include NYTimes.com, About.com, Boston.com and other company Web sites, increased 6.5% to $351.7 million in 2008 from $330.2 million in 2007, and Internet advertising revenues increased 9.3% to $308.8 million from $282.5 million. In total, Internet businesses accounted for 12.0% of the company's revenues in the fourth quarter versus 11.0% in the 2007 fourth quarter. Lee Enterprises Incorporated (NYSE: LEE), which runs 49 daily newspapers, including the St. Louis Post-Dispatch, said that Circulation revenues dropped 4.5% to $47.56 million. Combined print and online advertising revenue dropped 15.2% to $184.6 million, with retail advertising down 9.8%, and classified down 27.1%. More Writedowns While the Washington Post Co. (NYSE:WPO) has yet to reveal its quarterly results, it announced on Jan. 15 a regular quarterly dividend of $2.15 per share, payable on Feb. 6, 2009. On Jan. 23, Washington Post said it would take a $70 million impairment charge after concluding that the estimated fair value of its online lead generation business is less than its reported carrying value. Reuters notes that the Post is one of several U.S. newspaper publishers that have written down the value of their properties as advertising revenue shrinks. According to Reuters, The New York Times, Lee Enterprises (LEE.N) and McClatchy Co. (MNI.N) and other publishers have written down billions of dollars in the past several years. In fiscal 2008, Lee Enterprises recorded after-tax non-cash charges totaling $893.7 million to reduce the carrying value of goodwill, other assets and the company's investment in TNI Partners. On Jan. 28, American Media Operations, Inc., operating subsidiary of American Media Inc., leading publisher of celebrity journalism and health and fitness magazines in the U.S., said it is in the process of performing impairment testing of its tradenames and goodwill. AMOI expects to record impairment charges for its titles of between $200 million and $220 million with respect to certain of its tradenames and goodwill. Heavy Debt Burden, Liquidity Problems Aside from declining revenues, some of the newspaper publishers were highly leveraged, limiting their flexibility and ability to address liquidity constraints. At that time of its bankruptcy filing Tribune Co. owed $13 billion in total funded debt. Starting June 30, 2008, Star Tribune stopped making payments scheduled quarterly interest, which reached $20 million as of its bankruptcy petition in January 2009. While Star Tribune had $26.9 million in cash as of Dec. 31, 2008, its liabilities reached $661.1 million, including $392.5 million owed on its first lien debt and $96 million owed on its second loan debt, paling in comparison to assets of only $493.2 million. Lee Enterprises also is trying to renegotiate $306 million in debt that it assumed when it bought Pulitzer Inc. in 2005. Of that, $142.5 million is due in April and Lee's auditors have said Lee can't afford to pay it, the St. Louis Post-Dispatch said. GateHouse Media, Inc., which has 92 daily newspapers with total paid circulation of approximately 834,000, announced Jan. 28 that it is seeking to amend its $1.2 billion senior secured credit facility. The amendment would, among other things, allow the company to repurchase outstanding term loans under the facility at prices below par through a modified Dutch auction through December 31, 2011. The company is seeking the consent of the requisite lenders by 5:00 pm (Eastern Time) Monday, February 2, 2009, in order to effect the amendment American Media, publisher of celebrity journalism and health and fitness magazines including Star, Shape and the National Enquirer, made tender offers for $570 million of its outstanding senior subordinated notes, which comprise (i) $400,000,000 principal amount of 10.25% Series B Senior Subordinated Notes due 2009 and $14,544,000 aggregate principal amount of 10.25% Series B Senior Subordinated Notes due 2009, and (ii) $150,000,000 aggregate principal amount of 8 7/8% Senior Subordinated Notes due 2011 and $5,454,000 aggregate principal amount of 8 7/8% Senior Subordinated Notes due 2011. American Media, through its AMOI subsidiary will exchange those Notes with (a) $21,245,380 principal amount of 9% senior PIK notes due 2013, (b) $300,000,000 principal amount of the company's 14% senior subordinated notes due 2013, and (c) 5,700,000 shares of Media's common stock, representing 95% of American Media's outstanding shares of common stock. The offer expired Jan. 29. As of Jan. 9, AMOI has entered into agreements with holders of 81% of the outstanding aggregate principal amount of the 2009 Notes and 69% of the outstanding aggregate principal amount of the 2011 Notes. The tender offer conditioned upon, among other things, receipt of tenders and related consents by holders of at least 98% of each series of the Existing Notes. Pursuant to forbearance agreements, holders of the Existing Notes have agreed to forbear until 5:00 p.m., New York City time, on February 4, 2009, from exercising any remedies under the indentures governing the Existing Notes as a result of AMOI's. Sun-Times Media Group, Inc. (Pink Sheets: SUTM), which owns the Chicago Sun-Times, informed investors on Jan. 29 that an arbitrator has awarded CanWest Global Communications Corp., a Canadian media company, CN$51 million, exclusive of interest and costs, in connection with a dispute relating to CanWest's purchase of newspaper assets from Sun-Times Media in 2000. On Dec. 19, 2003, CanWest pursued arbitration, in connection with its claim that Sun-Times owed CN$84.0 million related to the transaction. As of Sept. 30, 2008, the company had a reserve established in respect of the arbitration in the amount of CN$15 million. A previously established escrow account funded by the company containing approximately CN$22 million may be available to pay any final arbitration award. The Chicago Tribune noted that as of Sept. 30, Sun-Times Media had cash of $99.8 million, but the company faces a number of tax and other liabilities. After a big write-down of intangible assets during the third quarter, Sun- Times' negative worth, or negative shareholder equity, widened to $321.7 million, the Chicago Tribune said. In Jan. 28, Washington Post said it's selling $400 million in fixed-rate notes at a price of 99.614% of par for an effective yield of 7.305% per annum. The ten-year notes will have a coupon of 7.25% per annum, payable semi-annually on February 1 and August 1, beginning August 1, 2009. The company intends to use the net proceeds from the sale of the notes to repay $400 million of notes that mature on February 15, 2009. Sale of Assets, Job Cuts to Stem Losses A.H. Belo's Mr. Decherd said in his Jan. 30 letter to employees that the decline in advertising revenues for the newspaper industry and all media persists, and that the key for the company is to generate and preserve cash. He stated that the company needs to reduce its workforce as the revenue trends do not support or require the same number of people the company has employed. The reduction will "probably be in the range of 500 jobs." He added that the company would suspend the A. H. Belo Savings Plan match and will cut reimbursements policies to employees. "Similarly, it is no longer reasonable for the Company to provide free parking in downtown Dallas," he said. A monthly charge of $40 will take effect May 1, 2009 for all downtown Dallas surface lots owned by the company. On Jan. 9, Hearst Corp. announced that it is offering for sale the Seattle Post-Intelligencer and its interest in a joint operating agreement under which the P-I and The Seattle Times are published. Hearst said that should a sale not occur within 60 days, it will pursue options, "including a move to a digital-only operation with a greatly reduced staff or a complete shutdown of all operations." "In no case will Hearst continue to publish the P-I in printed form following the conclusion of this process." The P-I, which Hearst has owned since 1921, has had operating losses since 2000. The P-I lost approximately $14 million in 2008 and its forecast anticipates a greater loss in 2009. Hearst also denied speculations it is interested in acquiring The Seattle Times. On Jan. 28, 2009, The New York Times Co., which also owns the International Herald Tribune and The Boston Globe, announced that it has retained Goldman, Sachs & Co. as its financial advisor to explore the possible sale of its 17.75% ownership interest in New England Sports Ventures, LLC. NESV owns the Boston Red Sox, Fenway Park and adjacent real estate, approximately 80 percent of New England Sports Network, the top rated regional cable sports network in the country delivered to more than four million homes throughout New England and nationally via satellite, and 50 percent of Roush Fenway Racing, a leading NASCAR team. Tribune Co., which is in the U.S. Bankruptcy Court for the District of Delaware to delever its balance sheet, is arranging the sale of its Chicago Cubs baseball team. Times Publishing Co., which publishes the St. Petersburg Times, one of the most respected regional newspapers in the U.S., is exploring the sale of Congressional Quarterly, Inc. Based in Washington, D.C., Congressional Quarterly publishes news and information on politics, public policy and legislative activity at the federal, state and local levels. The McClatchy Company, which has 30 daily newspapers, including The Miami Herald, The Sacramento Bee, and the Fort Worth Star- Telegram, said that it will suspend its quarterly dividend after paying the first quarter 2009 dividend for the foreseeable future in order to preserve cash for debt repayment. The first quarter 2009 dividend of nine cents per share is half the per share dividend paid in the 2008 first quarter. On Jan. 30, Editor & Publisher reported that the Journal Register Co. announced the sale of The Hershey (Pa.) Chronicle to The Sun in Hummelstown, Pa. On Jan. 7, Journal Register said it has signed an agreement with Central Connecticut Communications regarding a sale of The Bristol Press, The Herald of New Britain and The Sunday Herald Press from Journal Register Company. The sale includes the assets of the papers' web sites and of three nearby weeklies, the Wethersfield Post, the Newington Town Crier and the Rocky Hill Post. As of November 2008, JRC owned 22 daily newspapers and approximately 300 non-daily publications. Some Newspapers to Reach End According to a blog by Douglas A. McIntyre posted Jan. 11 at 24/7 Wall St., twelve major media brands are likely to close in 2009, as Journal Register and Gatehouse, and McClatchy have struggled. It noted that The Seattle Post-Intelligencer, Denver's Rocky Mountain News, The Miami Herald and the San Francisco Chronicle are on the block, and may be shut if no buyers emerge. The New York Daily News and The New York Observer are also at risk, according to the report. The United Press International Inc. reported Jan. 9 that Sun- Times Media said it would close 12 weekly newspapers to cut expenses as advertising revenues have fallen. The 12 suburban newspapers scheduled to close are part of 51 newspapers published by Pioneer Press, which the Sun-Times purchased in 1989. The newspapers, scheduled to fold Jan. 15, cover mostly the northwest suburbs of Chicago, Crain's Chicago Business reported Friday. According to CT Business Journal, Journal Register closed 16 newspapers in Connecticut in December. The papers affected include the Branford Review, Clinton Recorder, Hamden Chronicle, Milford Weekly, North Haven Post, Shelton Weekly, Stratford Bard, West Haven News, Wallingford Voice, East Haven Advertiser and others. Hanging In the Balance While Tribune Co., and Star Tribune have filed for bankruptcy, other newspaper publishers' fate are hanging in the balance. American Media's revolving facility, of which $60 million is outstanding and the term loan facility, of which $439.6 million is owed, both will mature on February 1, 2009 if the company has more than $25.0 million of the 10.25% Series B Senior Subordinated Notes due May 1, 2009 outstanding on February 1, 2009. According to Crain's New York, John Page, senior analyst at Moody's, said it was unclear what the banks would do with the company if an agreement couldn't be reached with bondholders. "It's a difficult environment to be selling assets," he said. In its form 10-Q for the third quarter of 2008, American Media Operations said if it is unable to extend or refinance the Notes, the 2006 Credit Agreement will likely mature early and the Company will not have sufficient funds to repay such indebtedness. "In such event, the Company may have to liquidate assets on unfavorable terms, or be unable to continue as a going concern, and incur additional costs associated with bankruptcy." Lee Enterprises' waiver of covenant conditions related to the $306 million Pulitzer Notes debt of its subsidiary St. Louis Post- Dispatch LLC expire Feb. 6, 2009. The Pulitzer Notes mature in April 2009. Lee says discussions with lenders continue. The struggles of the newspaper industry have also resulted to pulp- and paper-related bankruptcies. Paperboard and paper-based packaging Smurfit-Stone Corp., filed for Chapter 11 on Jan. 26, and Corp. Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Magazine printer, Quebecor World Inc., and pulp mill operator Pope & Talbot Inc., have also sought bankruptcy protection in Canada and the U.S. About GateHouse Media GateHouse Media, Inc. -- http://www.gatehousemedia.com/-- headquartered in Fairport, New York, is one of the largest publishers of locally based print and online media in the United States as measured by its 97 daily publications. GateHouse Media currently serves local audiences of more than 10 million per week across 21 states through hundreds of community publications and local Web sites. As of September 30, 2008, the company reported $1.34 billion in total assets and $1.38 billion in total liabilities, resulting in $34.1 million in stockholders' deficit. The company reported total revenues of $171.6 million in the quarter, an increase of 6.4% over the third quarter of 2007. About Journal Register Headquartered in Yardley, Pennsylvania, Journal Register Company (PINKSHEETS:JRCO) -- http://www.journalregister.com-- owns and operates 27 daily newspapers and 368 non-daily publications as of Dec. 31, 2006. The company also operates 239 individual websites that are affiliated with the company's daily newspapers, non-daily publications and its network of employment websites. All of the company's operations are clustered in seven geographic areas: Greater Philadelphia, Michigan, Connecticut, Greater Cleveland, New England, and the Capital-Saratoga and Mid-Hudson regions of New York. The company owns JobsInTheUS, a network of 19 employment websites and three commercial printing operations. The company's total paid circulation is approximately 616,000 daily, 635,000 Sunday and its total non-daily distribution is approximately 6.4 million. * * * As reported by the Troubled Company Reporter on Aug 5, 2008, Standard & Poor's Ratings Services withdrew its ratings on Journal Register Co., including the 'D' corporate credit rating. S&P lowered the ratings on July 25, 2008, after the company announced that it had entered into a forbearance agreement with lenders, which included a provision whereby interest under the credit agreement will accrue and will not be paid for the period July 24, 2008 through Oct. 31, 2008. S&P viewed this event as a meaningful departure from the original terms of the credit agreement, resulting in a 'D' corporate credit and issue-level ratings under its criteria. As reported by the TCR on Aug. 4, 2008, Moody's Investors Service downgraded Journal Register company's Probability of Default rating to D from Caa3 and its Corporate Family rating to Ca from Caa2. The rating outlook is stable. Moody's plans to withdraw all of Journal Register's ratings shortly. About American Media Headquartered in Boca Raton, Florida, American Media, Inc., is a publisher of celebrity journalism and health and fitness magazines in the U.S., including Star, Shape, Men's Fitness, Fit Pregnancy, Natural Health, and The National Enquirer. In addition to print properties, AMI owns Distribution Services, Inc., the country's number one in-store magazine merchandising company. About Hearst Corporation Hearst Corporation -- http://www.hearst.com/-- is a diversified communications company. Its major interests include 16 daily and 49 weekly newspapers, including the Houston Chronicle, San Francisco Chronicle and Albany Times Union; as well as interests in an additional 43 daily and 72 non-daily newspapers owned by MediaNews Group, which include the Denver Post and Salt Lake Tribune; nearly 200 magazines around the world, including Cosmopolitan and O, The Oprah Magazine; 28 television stations through Hearst-Argyle Television which reach a combined 18% of U.S. viewers; ownership in leading cable networks, including Lifetime Television, A&E Television Networks, The History Channel and ESPN; as well as business publishing, Internet businesses, television production, newspaper features distribution and real estate. About New York Times The New York Times Co. operates as a diversified media company in the United States. It operates in two segments, News Media and About Group. The company was founded in 1896. 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. About Lee Enterprises Lee Enterprises is a premier provider of local news, information and advertising in primarily midsize markets, with 49 daily newspapers and a joint interest in four others, online sites and more than 300 weekly newspapers and specialty publications in 23 states. Lee's markets include St. Louis, Mo.; Lincoln, Neb.; Madison, Wis.; Davenport, Iowa; Billings, Mont.; Bloomington, Ill.; and Tucson, Ariz. Lee stock is traded on the New York Stock Exchange under the symbol LEE. For more information about Lee, please visit http://www.lee.net/ * BOND PRICING: For the Week of Jan. 26 - Jan. 30, 2009 ------------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- 155 E TROPICANA 8.75% 4/1/2012 43.13 ABITIBI-CONS FIN 7.88% 8/1/2009 71.50 ACE CASH EXPRESS 10.25% 10/1/2014 18.63 ADVANTA CAP TR 8.99% 12/17/2026 5.50 AFFINITY GROUP 9.00% 2/15/2012 45.50 AFFINITY GROUP 9.00% 2/15/2012 45.00 AHERN RENTALS 9.25% 8/15/2013 16.00 ALABAMA POWER 5.50% 10/1/2042 48.88 ALERIS INTL INC 10.00% 12/15/2016 16.30 AMBASSADORS INTL 3.75% 4/15/2027 29.50 AMD 5.75% 8/15/2012 31.25 AMD 7.75% 11/1/2012 35.75 AMER AXLE & MFG 5.25% 2/11/2014 29.00 AMER AXLE & MFG 7.88% 3/1/2017 21.00 AMER CAP STRATEG 6.85% 8/1/2012 43.00 AMER GENL FIN 3.88% 10/1/2009 89.14 AMER GENL FIN 4.63% 9/1/2010 67.00 AMER GENL FIN 4.88% 5/15/2010 73.58 AMERIQUAL GROUP 9.50% 4/1/2012 42.38 AMES TRUE TEMPER 10.00% 7/15/2012 33.25 AMR CORP 10.13% 6/15/2011 47.75 AMR CORP 10.40% 3/10/2011 42.50 AMR CORP 10.42% 3/15/2011 60.00 AMR CORP 10.45% 3/10/2011 60.00 ANTHRACITE CAP 11.75% 9/1/2027 30.15 ANTIGENICS 5.25% 2/1/2025 24.32 APPLETON PAPERS 9.75% 6/15/2014 22.50 ARCO CHEMICAL CO 10.25% 11/1/2010 25.75 ASARCO INC 7.88% 4/15/2013 36.00 ASBURY AUTO GRP 3.00% 9/15/2012 33.00 ASSURED GUARANTY 6.40% 12/15/2066 12.00 ATHEROGENICS INC 1.50% 2/1/2012 11.30 ATHEROGENICS INC 4.50% 9/1/2008 8.25 ATHEROGENICS INC 4.50% 3/1/2011 8.50 AVENTINE RENEW 10.00% 4/1/2017 22.10 AVIS BUDGET CAR 7.63% 5/15/2014 32.25 BANK NEW ENGLAND 8.75% 4/1/1999 5.13 BANK NEW ENGLAND 9.88% 9/15/1999 5.38 BANKUNITED CAP 3.13% 3/1/2034 20.50 BARRINGTON BROAD 10.50% 8/15/2014 6.75 BEAZER HOMES USA 4.63% 6/15/2024 42.50 BEAZER HOMES USA 8.38% 4/15/2012 40.50 BEAZER HOMES USA 8.63% 5/15/2011 50.50 BELL MICROPRODUC 3.75% 3/5/2024 18.00 BON-TON DEPT STR 10.25% 3/15/2014 17.00 BON-TON DEPT STR 10.25% 3/15/2014 14.00 BORDEN INC 8.38% 4/15/2016 4.75 BORDEN INC 9.20% 3/15/2021 5.00 BOWATER INC 6.50% 6/15/2013 19.00 BOWATER INC 9.00% 8/1/2009 29.47 BOWATER INC 9.38% 12/15/2021 15.00 BOWATER INC 9.50% 10/15/2012 18.50 BROADVIEW NETWRK 11.38% 9/1/2012 50.01 BRODER BROS CO 11.25% 10/15/2010 22.50 BUFFALO THUNDER 9.38% 12/15/2014 9.97 BURLINGTON COAT 11.13% 4/15/2014 31.00 CALLON PETROLEUM 9.75% 12/8/2010 52.00 CAPMARK FINL GRP 5.88% 5/10/2012 36.00 CARAUSTAR INDS 7.25% 5/1/2010 50.25 CARAUSTAR INDS 7.38% 6/1/2009 60.24 CCH I LLC 9.92% 4/1/2014 2.50 CCH I LLC 10.00% 5/15/2014 3.97 CCH I LLC 10.00% 5/15/2014 14.75 CCH I LLC 11.13% 1/15/2014 2.50 CCH I LLC 12.13% 1/15/2015 1.98 CCH I LLC 13.50% 1/15/2014 6.03 CCH I/CCH I CP 11.00% 10/1/2015 18.00 CCH I/CCH I CP 11.00% 10/1/2015 16.50 CCH I/CCH I CP 11.00% 10/1/2015 20.63 CCH I/CCH I CP 11.00% 10/1/2015 20.63 CCH II/CCH II CP 10.25% 1/15/2010 42.62 CCH II/CCH II CP 10.25% 9/15/2010 59.50 CCH II/CCH II CP 10.25% 9/15/2010 58.00 CELL GENESYS INC 3.13% 11/1/2011 40.00 CELL THERAPEUTIC 4.00% 7/1/2010 6.00 CHAMPION ENTERPR 2.75% 11/1/2037 12.75 CHAMPION ENTERPR 7.63% 5/15/2009 85.50 CHAPARRAL ENERGY 8.50% 12/1/2015 23.50 CHAPARRAL ENERGY 8.88% 2/1/2017 23.00 CHARTER COMM HLD 9.63% 11/15/2009 79.98 CHARTER COMM HLD 10.00% 4/1/2009 87.63 CHARTER COMM HLD 10.00% 5/15/2011 12.98 CHARTER COMM HLD 10.75% 10/1/2009 11.93 CHARTER COMM HLD 11.13% 1/15/2011 5.06 CHARTER COMM HLD 11.75% 1/15/2010 43.37 CHARTER COMM HLD 11.75% 5/15/2011 2.00 CHARTER COMM HLD 12.13% 1/15/2012 2.25 CHARTER COMM HLD 13.50% 1/15/2011 2.25 CHARTER COMM INC 6.50% 10/1/2027 3.50 CHENIERE ENERGY 2.25% 8/1/2012 15.00 CIRCUS CIRCUS 7.63% 7/15/2013 36.50 CITADEL BROADCAS 4.00% 2/15/2011 49.00 CITIGROUP INC 3.63% 2/9/2009 100.01 CLAIRE'S STORES 9.25% 6/1/2015 25.00 CLAIRE'S STORES 10.50% 6/1/2017 19.50 CLEAR CHANNEL 4.40% 5/15/2011 31.85 CLEAR CHANNEL 4.50% 1/15/2010 57.00 CLEAR CHANNEL 4.90% 5/15/2015 17.25 CLEAR CHANNEL 5.00% 3/15/2012 19.00 CLEAR CHANNEL 5.50% 9/15/2014 15.00 CLEAR CHANNEL 5.50% 12/15/2016 16.72 CLEAR CHANNEL 5.75% 1/15/2013 18.94 CLEAR CHANNEL 6.25% 3/15/2011 29.00 CLEAR CHANNEL 6.88% 6/15/2018 15.00 CLEAR CHANNEL 7.25% 10/15/2027 14.79 CLEAR CHANNEL 7.65% 9/15/2010 64.00 CLEAR CHANNEL 10.75% 8/1/2016 19.63 CMP SUSQUEHANNA 9.88% 5/15/2014 4.13 COEUR D'ALENE 1.25% 1/15/2024 39.88 COEUR D'ALENE 3.25% 3/15/2028 27.25 COLONIAL BANK 8.00% 3/15/2009 89.50 COMPUCREDIT 3.63% 5/30/2025 29.00 CONEXANT SYSTEMS 4.00% 3/1/2026 43.03 CONSTAR INTL 11.00% 12/1/2012 4.00 COOPER-STANDARD 8.38% 12/15/2014 25.00 CREDENCE SYSTEM 3.50% 5/15/2010 24.00 CYMER INC 3.50% 2/15/2009 99.63 DAYTON SUPERIOR 13.00% 6/15/2009 58.00 DECODE GENETICS 3.50% 4/15/2011 5.25 DECODE GENETICS 3.50% 4/15/2011 5.00 DELPHI CORP 6.50% 8/15/2013 2.50 DELPHI CORP 8.25% 10/15/2033 0.50 DEVELOPERS DIVER 3.50% 8/15/2011 46.00 DEX MEDIA INC 8.00% 11/15/2013 15.00 DEX MEDIA WEST 8.50% 8/15/2010 64.00 DEX MEDIA WEST 8.50% 8/15/2010 64.25 DEX MEDIA WEST 9.88% 8/15/2013 29.25 DOLE FOODS CO 8.63% 5/1/2009 94.00 DOLLAR GENERAL 8.63% 6/15/2010 56.63 DR HORTON 8.00% 2/1/2009 99.20 DRIVETIME AUTO 11.25% 7/1/2013 44.00 DUANE READE INC 9.75% 8/1/2011 53.00 DUNE ENERGY INC 10.50% 6/1/2012 35.50 E*TRADE FINL 8.00% 6/15/2011 58.00 EL PASO CORP 6.38% 2/1/2009 100.00 ENERGY PARTNERS 9.75% 4/15/2014 32.75 EOP OPERATING LP 7.00% 7/15/2011 38.93 EPIX MEDICAL INC 3.00% 6/15/2024 35.25 FGIC CORP 6.00% 1/15/2034 9.63 FIBERTOWER CORP 9.00% 11/15/2012 22.95 FINISAR CORP 2.50% 10/15/2010 49.88 FINLAY FINE JWLY 8.38% 6/1/2012 4.00 FIRST DATA CORP 4.50% 6/15/2010 55.00 FIRST DATA CORP 4.70% 8/1/2013 25.12 FIRST DATA CORP 5.63% 11/1/2011 37.15 FLOTEK INDS 5.25% 2/15/2028 28.00 FONTAINEBLEAU LA 11.00% 6/15/2015 9.63 FORD HOLDINGS 9.30% 3/1/2030 18.50 FORD HOLDINGS 9.38% 3/1/2020 18.71 FORD MOTOR CO 7.40% 11/1/2046 18.50 FORD MOTOR CO 7.70% 5/15/2097 18.50 FORD MOTOR CO 7.75% 6/15/2043 19.50 FORD MOTOR CO 8.88% 1/15/2022 21.10 FORD MOTOR CO 8.90% 1/15/2032 19.77 FORD MOTOR CO 9.22% 9/15/2021 23.00 FORD MOTOR CO 9.50% 9/15/2011 41.50 FORD MOTOR CO 9.95% 2/15/2032 16.00 FORD MOTOR CO 9.98% 2/15/2047 20.00 FORD MOTOR CRED 4.30% 3/20/2009 86.45 FORD MOTOR CRED 4.50% 2/20/2009 99.00 FORD MOTOR CRED 4.50% 3/20/2009 80.57 FORD MOTOR CRED 4.70% 4/20/2009 98.71 FORD MOTOR CRED 4.75% 4/20/2009 61.41 FORD MOTOR CRED 4.90% 10/20/2009 75.80 FORD MOTOR CRED 5.00% 8/20/2009 92.53 FORD MOTOR CRED 5.00% 9/21/2009 89.25 FORD MOTOR CRED 5.00% 1/20/2011 23.26 FORD MOTOR CRED 5.00% 2/22/2011 30.86 FORD MOTOR CRED 5.10% 8/20/2009 83.50 FORD MOTOR CRED 5.10% 11/20/2009 76.00 FORD MOTOR CRED 5.10% 2/22/2011 54.00 FORD MOTOR CRED 5.20% 3/21/2011 47.87 FORD MOTOR CRED 5.20% 3/21/2011 31.78 FORD MOTOR CRED 5.25% 6/22/2009 92.25 FORD MOTOR CRED 5.25% 2/22/2011 48.14 FORD MOTOR CRED 5.25% 3/21/2011 47.40 FORD MOTOR CRED 5.25% 3/21/2011 53.52 FORD MOTOR CRED 5.25% 9/20/2011 45.59 FORD MOTOR CRED 5.30% 4/20/2011 31.76 FORD MOTOR CRED 5.35% 12/21/2009 76.00 FORD MOTOR CRED 5.35% 2/22/2011 48.25 FORD MOTOR CRED 5.40% 1/20/2011 48.25 FORD MOTOR CRED 5.40% 9/20/2011 47.50 FORD MOTOR CRED 5.40% 10/20/2011 42.00 FORD MOTOR CRED 5.45% 6/21/2010 39.69 FORD MOTOR CRED 5.45% 4/20/2011 47.43 FORD MOTOR CRED 5.45% 10/20/2011 43.86 FORD MOTOR CRED 5.50% 6/22/2009 86.50 FORD MOTOR CRED 5.50% 1/20/2010 64.00 FORD MOTOR CRED 5.50% 2/22/2010 65.19 FORD MOTOR CRED 5.50% 4/20/2011 53.00 FORD MOTOR CRED 5.50% 9/20/2011 32.50 FORD MOTOR CRED 5.55% 6/21/2010 62.00 FORD MOTOR CRED 5.55% 9/20/2011 43.30 FORD MOTOR CRED 5.60% 12/20/2010 53.00 FORD MOTOR CRED 5.60% 4/20/2011 40.00 FORD MOTOR CRED 5.60% 8/22/2011 21.01 FORD MOTOR CRED 5.60% 11/21/2011 44.00 FORD MOTOR CRED 5.65% 12/20/2010 50.00 FORD MOTOR CRED 5.65% 5/20/2011 25.00 FORD MOTOR CRED 5.65% 7/20/2011 46.91 FORD MOTOR CRED 5.65% 12/20/2011 44.00 FORD MOTOR CRED 5.65% 1/21/2014 27.00 FORD MOTOR CRED 5.70% 1/20/2012 41.87 FORD MOTOR CRED 5.75% 1/20/2010 68.00 FORD MOTOR CRED 5.75% 3/22/2010 70.00 FORD MOTOR CRED 5.75% 8/22/2011 44.70 FORD MOTOR CRED 5.75% 12/20/2011 37.07 FORD MOTOR CRED 5.75% 2/21/2012 32.00 FORD MOTOR CRED 5.75% 2/20/2014 21.02 FORD MOTOR CRED 5.80% 8/22/2011 45.75 FORD MOTOR CRED 5.85% 5/20/2010 60.20 FORD MOTOR CRED 5.85% 6/21/2010 29.40 FORD MOTOR CRED 5.85% 7/20/2011 39.20 FORD MOTOR CRED 5.85% 1/20/2012 40.59 FORD MOTOR CRED 5.90% 7/20/2011 51.27 FORD MOTOR CRED 5.90% 7/20/2011 45.77 FORD MOTOR CRED 6.00% 6/21/2010 43.04 FORD MOTOR CRED 6.00% 10/20/2010 53.00 FORD MOTOR CRED 6.00% 12/20/2010 30.50 FORD MOTOR CRED 6.00% 3/20/2014 20.20 FORD MOTOR CRED 6.05% 7/20/2010 55.15 FORD MOTOR CRED 6.05% 6/20/2011 39.00 FORD MOTOR CRED 6.10% 6/20/2011 32.00 FORD MOTOR CRED 6.15% 9/20/2010 60.00 FORD MOTOR CRED 6.15% 5/20/2011 46.32 FORD MOTOR CRED 6.20% 5/20/2011 47.89 FORD MOTOR CRED 6.20% 6/20/2011 44.70 FORD MOTOR CRED 6.25% 8/20/2010 50.00 FORD MOTOR CRED 6.25% 6/20/2011 50.00 FORD MOTOR CRED 6.25% 6/20/2011 46.55 FORD MOTOR CRED 6.25% 1/20/2015 26.33 FORD MOTOR CRED 6.25% 3/20/2015 25.00 FORD MOTOR CRED 6.60% 3/20/2012 17.59 FORD MOTOR CRED 6.75% 10/21/2013 45.07 FORD MOTOR CRED 6.85% 5/20/2014 19.52 FORD MOTOR CRED 6.85% 6/20/2014 26.60 FORD MOTOR CRED 7.00% 7/1/2010 62.00 FORD MOTOR CRED 7.00% 7/20/2010 57.62 FORD MOTOR CRED 7.10% 9/20/2010 39.00 FORD MOTOR CRED 7.30% 1/23/2012 45.24 FORD MOTOR CRED 7.30% 4/20/2015 22.00 FORD MOTOR CRED 7.40% 8/21/2017 20.76 FORD MOTOR CRED 7.50% 4/25/2011 71.28 FREESCALE SEMICO 8.88% 12/15/2014 31.38 FREESCALE SEMICO 10.13% 12/15/2016 21.10 FREESCALE SEMICO 10.13% 12/15/2016 32.50 FREMONT GEN CORP 7.88% 3/17/2009 49.00 FRONTIER AIRLINE 5.00% 12/15/2025 17.50 G-I HOLDINGS 10.00% 2/15/2006 1.60 GENCORP INC 4.00% 1/16/2024 64.50 GENERAL MOTORS 6.75% 5/1/2028 12.00 GENERAL MOTORS 7.13% 7/15/2013 17.00 GENERAL MOTORS 7.20% 1/15/2011 18.73 GENERAL MOTORS 7.38% 5/23/2048 14.57 GENERAL MOTORS 7.40% 9/1/2025 11.77 GENERAL MOTORS 7.70% 4/15/2016 32.20 GENERAL MOTORS 8.10% 6/15/2024 13.73 GENERAL MOTORS 8.25% 7/15/2023 14.50 GENERAL MOTORS 8.38% 7/15/2033 14.25 GENERAL MOTORS 8.80% 3/1/2021 13.30 GENERAL MOTORS 9.40% 7/15/2021 16.15 GENERAL MOTORS 9.45% 11/1/2011 25.08 GENWORTH GLOBAL 5.65% 7/15/2016 13.00 GENWORTH GLOBAL 6.10% 4/15/2033 15.00 GEORGIA GULF CRP 7.13% 12/15/2013 33.00 GEORGIA GULF CRP 9.50% 10/15/2014 18.00 GEORGIA GULF CRP 10.75% 10/15/2016 5.00 GGP LP 3.98% 4/15/2027 9.07 GMAC LLC 4.05% 2/15/2009 95.26 GMAC LLC 4.10% 3/15/2009 99.00 GMAC LLC 4.10% 3/15/2009 95.00 GMAC LLC 4.25% 2/15/2009 89.50 GMAC LLC 4.25% 2/15/2009 97.00 GMAC LLC 4.50% 4/15/2009 96.60 GMAC LLC 4.85% 5/15/2009 94.00 GMAC LLC 4.90% 10/15/2009 83.75 GMAC LLC 5.00% 8/15/2009 89.06 GMAC LLC 5.00% 8/15/2009 81.00 GMAC LLC 5.00% 9/15/2009 78.17 GMAC LLC 5.00% 9/15/2009 89.02 GMAC LLC 5.00% 9/15/2009 81.15 GMAC LLC 5.00% 10/15/2009 80.00 GMAC LLC 5.05% 7/15/2009 89.14 GMAC LLC 5.25% 5/15/2009 92.88 GMAC LLC 5.25% 8/15/2009 83.71 GMAC LLC 5.25% 11/15/2009 82.22 GMAC LLC 5.35% 6/15/2009 92.17 GMAC LLC 5.35% 12/15/2009 83.00 GMAC LLC 5.70% 10/15/2013 12.14 GMAC LLC 5.85% 2/15/2010 76.27 GMAC LLC 6.00% 3/15/2009 93.38 GMAC LLC 6.00% 2/15/2010 65.00 GMAC LLC 6.00% 4/1/2011 63.50 GMAC LLC 6.00% 7/15/2013 30.36 GMAC LLC 6.05% 3/15/2009 92.50 GMAC LLC 6.05% 3/15/2010 69.60 GMAC LLC 6.10% 5/15/2009 44.75 GMAC LLC 6.15% 4/15/2009 93.42 GMAC LLC 6.15% 3/15/2010 74.02 GMAC LLC 6.15% 11/15/2013 30.17 GMAC LLC 6.25% 6/15/2009 54.26 GMAC LLC 6.25% 3/15/2013 34.93 GMAC LLC 6.25% 7/15/2013 20.87 GMAC LLC 6.30% 6/15/2009 83.91 GMAC LLC 6.30% 7/15/2009 84.72 GMAC LLC 6.38% 6/15/2010 65.00 GMAC LLC 6.40% 3/15/2013 32.00 GMAC LLC 6.45% 2/15/2013 35.50 GMAC LLC 6.50% 6/15/2009 71.65 GMAC LLC 6.50% 3/15/2013 30.50 GMAC LLC 6.50% 5/15/2013 36.05 GMAC LLC 6.50% 6/15/2013 25.00 GMAC LLC 6.60% 6/15/2012 20.00 GMAC LLC 6.60% 6/15/2019 10.87 GMAC LLC 6.63% 10/15/2011 44.60 GMAC LLC 6.75% 9/15/2011 43.07 GMAC LLC 6.75% 10/15/2011 45.00 GMAC LLC 6.75% 10/15/2011 42.36 GMAC LLC 6.75% 7/15/2012 41.00 GMAC LLC 6.75% 9/15/2012 38.00 GMAC LLC 6.75% 9/15/2012 40.00 GMAC LLC 6.75% 10/15/2012 40.50 GMAC LLC 6.75% 4/15/2013 14.00 GMAC LLC 6.75% 4/15/2013 14.00 GMAC LLC 6.80% 11/15/2009 73.31 GMAC LLC 6.80% 12/15/2009 20.89 GMAC LLC 6.80% 2/15/2013 31.00 GMAC LLC 6.85% 7/15/2009 80.00 GMAC LLC 6.88% 4/15/2013 36.50 GMAC LLC 7.00% 2/15/2009 84.39 GMAC LLC 7.00% 7/15/2009 86.19 GMAC LLC 7.00% 9/15/2009 82.50 GMAC LLC 7.00% 10/15/2009 79.00 GMAC LLC 7.00% 11/15/2009 78.69 GMAC LLC 7.00% 11/15/2009 84.50 GMAC LLC 7.00% 1/15/2010 50.53 GMAC LLC 7.00% 10/15/2011 42.50 GMAC LLC 7.00% 9/15/2012 41.00 GMAC LLC 7.00% 1/15/2013 34.62 GMAC LLC 7.00% 2/15/2018 10.61 GMAC LLC 7.05% 10/15/2009 80.00 GMAC LLC 7.10% 9/15/2012 41.00 GMAC LLC 7.10% 1/15/2013 33.75 GMAC LLC 7.13% 8/15/2012 39.85 GMAC LLC 7.13% 12/15/2012 37.85 GMAC LLC 7.15% 8/15/2010 70.13 GMAC LLC 7.15% 11/15/2012 35.75 GMAC LLC 7.25% 1/15/2010 66.87 GMAC LLC 7.25% 8/15/2012 41.00 GMAC LLC 7.25% 12/15/2012 41.25 GMAC LLC 7.25% 12/15/2012 35.65 GMAC LLC 7.50% 10/15/2012 35.75 GMAC LLC 7.55% 8/15/2010 30.00 GMAC LLC 7.63% 11/15/2012 32.88 GMAC LLC 7.70% 8/15/2010 35.00 GMAC LLC 7.70% 8/15/2010 66.00 GMAC LLC 7.75% 10/15/2012 40.00 GMAC LLC 7.85% 8/15/2010 60.00 GMAC LLC 7.88% 11/15/2012 40.10 GMAC LLC 8.00% 7/15/2010 65.00 GMAC LLC 8.00% 9/15/2010 30.00 GMAC LLC 8.00% 8/15/2015 16.00 GMAC LLC 8.25% 9/15/2012 20.27 GMAC LLC 8.40% 8/15/2015 25.10 GMAC LLC 8.40% 8/15/2015 15.10 GMAC LLC 8.50% 5/15/2010 68.00 GMAC LLC 8.50% 8/15/2015 17.00 GRAHAM PACKAGING 8.50% 10/15/2012 40.13 GREAT LAKES CHEM 7.00% 7/15/2009 50.00 HAIGHTS CROSS OP 11.75% 8/15/2011 33.75 HANNA (MA) CO 6.52% 2/23/2010 70.06 HARRAHS OPER CO 5.38% 12/15/2013 21.20 HARRAHS OPER CO 5.50% 7/1/2010 59.50 HARRAHS OPER CO 5.63% 6/1/2015 16.90 HARRAHS OPER CO 5.75% 10/1/2017 15.00 HARRAHS OPER CO 6.50% 6/1/2016 17.00 HARRAHS OPER CO 8.00% 2/1/2011 37.20 HARRAHS OPER CO 10.75% 2/1/2016 23.89 HARRY & DAVID OP 9.00% 3/1/2013 30.00 HAWAIIAN TELCOM 9.75% 5/1/2013 7.25 HAWAIIAN TELCOM 12.50% 5/1/2015 1.63 HAWKER BEECHCRAF 9.75% 4/1/2017 20.50 HEADWATERS INC 2.88% 6/1/2016 38.50 HERTZ CORP 7.40% 3/1/2011 53.52 HEXION US/NOVA 9.75% 11/15/2014 11.00 HILTON HOTELS 7.50% 12/15/2017 13.10 HINES NURSERIES 10.25% 10/1/2011 8.00 HUMAN GENOME 2.25% 10/15/2011 36.56 HUMAN GENOME 2.25% 8/15/2012 31.00 HUTCHINSON TECH 3.25% 1/15/2026 30.05 IDEARC INC 8.00% 11/15/2016 5.75 IDEARC INC 8.00% 11/15/2016 4.61 INCYTE CORP 3.50% 2/15/2011 51.25 INDALEX HOLD 11.50% 2/1/2014 10.88 INN OF THE MOUNT 12.00% 11/15/2010 20.50 INTCOMEX INC 11.75% 1/15/2011 40.00 INTL LEASE FIN 6.38% 3/15/2009 98.25 ISOLAGEN INC 3.50% 11/1/2024 15.00 ISTAR FINANCIAL 5.13% 4/1/2011 44.00 ISTAR FINANCIAL 5.13% 4/1/2011 47.50 ISTAR FINANCIAL 5.38% 4/15/2010 62.75 ISTAR FINANCIAL 5.50% 6/15/2012 40.00 ISTAR FINANCIAL 5.65% 9/15/2011 41.00 ISTAR FINANCIAL 5.80% 3/15/2011 42.50 ISTAR FINANCIAL 6.00% 12/15/2010 51.50 JAZZ TECHNOLOGIE 8.00% 12/31/2011 10.00 JEFFERSON SMURFI 7.50% 6/1/2013 13.50 JEFFERSON SMURFI 8.25% 10/1/2012 11.25 K HOVNANIAN ENTR 6.25% 1/15/2015 25.50 K HOVNANIAN ENTR 6.50% 1/15/2014 30.00 K HOVNANIAN ENTR 7.75% 5/15/2013 23.53 K HOVNANIAN ENTR 8.00% 4/1/2012 38.75 K HOVNANIAN ENTR 8.63% 1/15/2017 30.92 K HOVNANIAN ENTR 8.88% 4/1/2012 31.00 KAISER ALUMINUM 12.75% 2/1/2003 4.90 KELLWOOD CO 7.63% 10/15/2017 6.26 KELLWOOD CO 7.88% 7/15/2009 45.00 KEMET CORP 2.25% 11/15/2026 20.24 KEMET CORP 2.25% 11/15/2026 20.13 KEYSTONE AUTO OP 9.75% 11/1/2013 38.00 KKR FINANCIAL 7.00% 7/15/2012 36.00 KNIGHT RIDDER 4.63% 11/1/2014 16.06 KNIGHT RIDDER 5.75% 9/1/2017 19.00 KNIGHT RIDDER 6.88% 3/15/2029 18.75 KNIGHT RIDDER 7.13% 6/1/2011 30.66 KNIGHT RIDDER 7.15% 11/1/2027 20.00 KNIGHT RIDDER 9.88% 4/15/2009 90.00 LANDAMERICA 3.13% 11/15/2033 15.75 LANDAMERICA 3.25% 5/15/2034 14.50 LAZYDAYS RV 11.75% 5/15/2012 10.00 LAZYDAYS RV 11.75% 5/15/2012 43.75 LEAR CORP 5.75% 8/1/2014 24.06 LEAR CORP 8.50% 12/1/2013 24.00 LEAR CORP 8.75% 12/1/2016 19.50 LEAR CORP 8.75% 12/1/2016 21.50 LECROY CORP 4.00% 10/15/2026 37.25 LEHMAN BROS HLDG 3.95% 11/10/2009 12.31 LEHMAN BROS HLDG 4.00% 4/16/2019 6.84 LEHMAN BROS HLDG 4.25% 1/27/2010 13.50 LEHMAN BROS HLDG 4.38% 11/30/2010 12.17 LEHMAN BROS HLDG 4.50% 7/26/2010 10.65 LEHMAN BROS HLDG 4.50% 8/3/2011 5.00 LEHMAN BROS HLDG 4.70% 3/6/2013 1.05 LEHMAN BROS HLDG 4.80% 2/27/2013 5.50 LEHMAN BROS HLDG 4.80% 3/13/2014 12.00 LEHMAN BROS HLDG 4.80% 6/24/2023 8.00 LEHMAN BROS HLDG 5.00% 1/14/2011 13.06 LEHMAN BROS HLDG 5.00% 1/22/2013 5.06 LEHMAN BROS HLDG 5.00% 2/11/2013 4.56 LEHMAN BROS HLDG 5.00% 3/27/2013 5.00 LEHMAN BROS HLDG 5.00% 6/26/2015 4.25 LEHMAN BROS HLDG 5.00% 8/5/2015 5.00 LEHMAN BROS HLDG 5.00% 12/18/2015 5.00 LEHMAN BROS HLDG 5.00% 5/28/2023 7.60 LEHMAN BROS HLDG 5.00% 5/30/2023 7.88 LEHMAN BROS HLDG 5.00% 6/10/2023 3.00 LEHMAN BROS HLDG 5.00% 6/17/2023 5.60 LEHMAN BROS HLDG 5.10% 1/28/2013 6.56 LEHMAN BROS HLDG 5.10% 2/15/2020 2.02 LEHMAN BROS HLDG 5.15% 2/4/2015 5.00 LEHMAN BROS HLDG 5.20% 5/13/2020 6.06 LEHMAN BROS HLDG 5.25% 2/6/2012 10.65 LEHMAN BROS HLDG 5.25% 2/11/2015 7.50 LEHMAN BROS HLDG 5.25% 3/8/2020 6.00 LEHMAN BROS HLDG 5.25% 5/20/2023 8.00 LEHMAN BROS HLDG 5.35% 2/25/2018 2.50 LEHMAN BROS HLDG 5.35% 3/13/2020 4.56 LEHMAN BROS HLDG 5.35% 6/14/2030 5.00 LEHMAN BROS HLDG 5.38% 5/6/2023 3.33 LEHMAN BROS HLDG 5.40% 3/6/2020 7.10 LEHMAN BROS HLDG 5.40% 3/20/2020 6.75 LEHMAN BROS HLDG 5.40% 3/30/2029 4.56 LEHMAN BROS HLDG 5.40% 6/21/2030 7.50 LEHMAN BROS HLDG 5.45% 3/15/2025 3.50 LEHMAN BROS HLDG 5.45% 4/6/2029 5.06 LEHMAN BROS HLDG 5.45% 2/22/2030 6.00 LEHMAN BROS HLDG 5.45% 7/19/2030 4.50 LEHMAN BROS HLDG 5.45% 9/20/2030 1.08 LEHMAN BROS HLDG 5.50% 4/4/2016 8.52 LEHMAN BROS HLDG 5.50% 2/4/2018 1.88 LEHMAN BROS HLDG 5.50% 2/19/2018 4.50 LEHMAN BROS HLDG 5.50% 11/4/2018 5.00 LEHMAN BROS HLDG 5.50% 2/27/2020 6.00 LEHMAN BROS HLDG 5.50% 8/19/2020 7.50 LEHMAN BROS HLDG 5.50% 3/14/2023 7.50 LEHMAN BROS HLDG 5.50% 4/8/2023 7.50 LEHMAN BROS HLDG 5.50% 4/15/2023 6.00 LEHMAN BROS HLDG 5.50% 4/23/2023 3.89 LEHMAN BROS HLDG 5.50% 8/5/2023 5.25 LEHMAN BROS HLDG 5.50% 10/7/2023 5.10 LEHMAN BROS HLDG 5.50% 1/27/2029 7.35 LEHMAN BROS HLDG 5.50% 2/3/2029 2.20 LEHMAN BROS HLDG 5.50% 8/2/2030 7.50 LEHMAN BROS HLDG 5.55% 2/11/2018 3.00 LEHMAN BROS HLDG 5.55% 3/9/2029 7.00 LEHMAN BROS HLDG 5.55% 1/25/2030 7.50 LEHMAN BROS HLDG 5.55% 9/27/2030 3.27 LEHMAN BROS HLDG 5.55% 12/31/2034 6.06 LEHMAN BROS HLDG 5.60% 1/22/2018 6.00 LEHMAN BROS HLDG 5.60% 2/17/2029 7.50 LEHMAN BROS HLDG 5.60% 2/24/2029 2.35 LEHMAN BROS HLDG 5.60% 3/2/2029 1.08 LEHMAN BROS HLDG 5.60% 2/25/2030 2.78 LEHMAN BROS HLDG 5.60% 5/3/2030 5.00 LEHMAN BROS HLDG 5.63% 1/24/2013 14.00 LEHMAN BROS HLDG 5.63% 3/15/2030 2.35 LEHMAN BROS HLDG 5.65% 11/23/2029 7.50 LEHMAN BROS HLDG 5.65% 8/16/2030 6.00 LEHMAN BROS HLDG 5.65% 12/31/2034 7.50 LEHMAN BROS HLDG 5.70% 1/28/2018 4.75 LEHMAN BROS HLDG 5.70% 2/10/2029 2.56 LEHMAN BROS HLDG 5.70% 4/13/2029 2.22 LEHMAN BROS HLDG 5.70% 9/7/2029 2.14 LEHMAN BROS HLDG 5.70% 12/14/2029 4.50 LEHMAN BROS HLDG 5.75% 4/25/2011 12.20 LEHMAN BROS HLDG 5.75% 7/18/2011 10.50 LEHMAN BROS HLDG 5.75% 5/17/2013 11.50 LEHMAN BROS HLDG 5.75% 3/27/2023 5.00 LEHMAN BROS HLDG 5.75% 10/15/2023 7.50 LEHMAN BROS HLDG 5.75% 10/21/2023 5.00 LEHMAN BROS HLDG 5.75% 11/12/2023 4.50 LEHMAN BROS HLDG 5.75% 11/25/2023 4.00 LEHMAN BROS HLDG 5.75% 12/16/2028 5.00 LEHMAN BROS HLDG 5.75% 12/23/2028 7.50 LEHMAN BROS HLDG 5.75% 8/24/2029 5.00 LEHMAN BROS HLDG 5.75% 9/14/2029 3.56 LEHMAN BROS HLDG 5.75% 10/12/2029 3.78 LEHMAN BROS HLDG 5.75% 3/29/2030 7.25 LEHMAN BROS HLDG 5.80% 9/3/2020 7.50 LEHMAN BROS HLDG 5.80% 10/25/2030 3.89 LEHMAN BROS HLDG 5.85% 11/8/2030 3.58 LEHMAN BROS HLDG 5.88% 11/15/2017 8.94 LEHMAN BROS HLDG 5.90% 5/4/2029 7.13 LEHMAN BROS HLDG 5.90% 2/7/2031 2.38 LEHMAN BROS HLDG 5.95% 12/20/2030 2.29 LEHMAN BROS HLDG 6.00% 7/19/2012 12.00 LEHMAN BROS HLDG 6.00% 1/22/2020 7.16 LEHMAN BROS HLDG 6.00% 2/12/2020 5.00 LEHMAN BROS HLDG 6.00% 1/29/2021 8.00 LEHMAN BROS HLDG 6.00% 10/23/2028 2.53 LEHMAN BROS HLDG 6.00% 11/18/2028 7.50 LEHMAN BROS HLDG 6.00% 5/11/2029 5.23 LEHMAN BROS HLDG 6.00% 7/20/2029 8.00 LEHMAN BROS HLDG 6.00% 4/30/2034 7.88 LEHMAN BROS HLDG 6.00% 7/30/2034 7.50 LEHMAN BROS HLDG 6.00% 2/21/2036 7.35 LEHMAN BROS HLDG 6.00% 2/24/2036 2.05 LEHMAN BROS HLDG 6.00% 2/12/2037 7.50 LEHMAN BROS HLDG 6.05% 6/29/2029 1.12 LEHMAN BROS HLDG 6.10% 8/12/2023 3.89 LEHMAN BROS HLDG 6.15% 4/11/2031 7.50 LEHMAN BROS HLDG 6.20% 9/26/2014 13.00 LEHMAN BROS HLDG 6.20% 6/15/2027 7.17 LEHMAN BROS HLDG 6.20% 5/25/2029 3.00 LEHMAN BROS HLDG 6.25% 2/5/2021 7.13 LEHMAN BROS HLDG 6.25% 2/22/2023 6.00 LEHMAN BROS HLDG 6.30% 3/27/2037 6.00 LEHMAN BROS HLDG 6.40% 10/11/2022 3.00 LEHMAN BROS HLDG 6.40% 12/19/2036 9.75 LEHMAN BROS HLDG 6.50% 2/28/2023 7.91 LEHMAN BROS HLDG 6.50% 3/6/2023 5.00 LEHMAN BROS HLDG 6.50% 9/20/2027 4.00 LEHMAN BROS HLDG 6.50% 10/18/2027 7.25 LEHMAN BROS HLDG 6.50% 10/25/2027 3.10 LEHMAN BROS HLDG 6.50% 11/15/2032 7.06 LEHMAN BROS HLDG 6.50% 1/17/2033 7.16 LEHMAN BROS HLDG 6.50% 12/22/2036 6.00 LEHMAN BROS HLDG 6.50% 2/13/2037 6.06 LEHMAN BROS HLDG 6.50% 6/21/2037 7.13 LEHMAN BROS HLDG 6.50% 7/13/2037 3.00 LEHMAN BROS HLDG 6.60% 10/3/2022 5.50 LEHMAN BROS HLDG 6.60% 6/18/2027 6.00 LEHMAN BROS HLDG 6.63% 1/18/2012 11.50 LEHMAN BROS HLDG 6.63% 7/27/2027 3.50 LEHMAN BROS HLDG 6.75% 7/1/2022 4.33 LEHMAN BROS HLDG 6.75% 11/22/2027 7.35 LEHMAN BROS HLDG 6.75% 3/11/2033 7.50 LEHMAN BROS HLDG 6.75% 10/26/2037 7.10 LEHMAN BROS HLDG 6.80% 9/7/2032 6.75 LEHMAN BROS HLDG 6.85% 8/16/2032 6.75 LEHMAN BROS HLDG 6.85% 8/23/2032 7.25 LEHMAN BROS HLDG 6.88% 5/2/2018 13.00 LEHMAN BROS HLDG 6.90% 9/1/2032 5.00 LEHMAN BROS HLDG 7.00% 5/12/2023 2.10 LEHMAN BROS HLDG 7.00% 9/27/2027 13.00 LEHMAN BROS HLDG 7.00% 10/4/2032 4.00 LEHMAN BROS HLDG 7.00% 7/27/2037 6.75 LEHMAN BROS HLDG 7.00% 9/28/2037 3.33 LEHMAN BROS HLDG 7.00% 11/16/2037 6.00 LEHMAN BROS HLDG 7.00% 12/28/2037 6.33 LEHMAN BROS HLDG 7.00% 1/31/2038 6.50 LEHMAN BROS HLDG 7.00% 2/1/2038 5.00 LEHMAN BROS HLDG 7.00% 2/7/2038 3.55 LEHMAN BROS HLDG 7.00% 2/8/2038 7.13 LEHMAN BROS HLDG 7.00% 4/22/2038 4.60 LEHMAN BROS HLDG 7.05% 2/27/2038 9.00 LEHMAN BROS HLDG 7.25% 2/27/2038 3.00 LEHMAN BROS HLDG 7.25% 4/29/2038 2.87 LEHMAN BROS HLDG 7.35% 5/6/2038 5.00 LEHMAN BROS HLDG 7.73% 10/15/2023 4.00 LEHMAN BROS HLDG 7.88% 11/1/2009 13.25 LEHMAN BROS HLDG 7.88% 8/15/2010 11.50 LEHMAN BROS HLDG 8.00% 3/17/2023 8.63 LEHMAN BROS HLDG 8.05% 1/15/2019 7.25 LEHMAN BROS HLDG 8.50% 8/1/2015 13.10 LEHMAN BROS HLDG 8.50% 6/15/2022 5.25 LEHMAN BROS HLDG 8.75% 12/21/2021 1.12 LEHMAN BROS HLDG 8.75% 2/6/2023 4.00 LEHMAN BROS HLDG 8.80% 3/1/2015 9.90 LEHMAN BROS HLDG 8.92% 2/16/2017 7.00 LEHMAN BROS HLDG 9.50% 12/28/2022 3.25 LEHMAN BROS HLDG 9.50% 1/30/2023 2.50 LEHMAN BROS HLDG 9.50% 2/27/2023 5.00 LEHMAN BROS HLDG 10.00% 3/13/2023 4.00 LEHMAN BROS HLDG 10.38% 5/24/2024 2.10 LEHMAN BROS HLDG 11.00% 10/25/2017 6.06 LEHMAN BROS HLDG 11.00% 6/22/2022 4.15 LEHMAN BROS HLDG 11.50% 9/26/2022 4.75 LEHMAN BROS HLDG 18.00% 7/14/2023 7.13 LEHMAN BROS INC 7.50% 8/1/2026 1.00 LEVEL 3 COMM INC 2.88% 7/15/2010 68.25 LIFECARE HOLDING 9.25% 8/15/2013 36.74 LITHIA MOTORS 2.88% 5/1/2014 88.28 LOCAL INSIGHT 11.00% 12/1/2017 25.00 LOEHMANNS CAP 12.00% 10/1/2011 49.38 LOEHMANNS CAP 13.00% 10/1/2011 50.25 MAGMA DESIGN 2.00% 5/15/2010 57.75 MAGNA ENTERTAINM 7.25% 12/15/2009 31.50 MAGNA ENTERTAINM 8.55% 6/15/2010 40.13 MAJESTIC STAR 9.50% 10/15/2010 29.00 MAJESTIC STAR 9.75% 1/15/2011 4.50 MASONITE CORP 11.00% 4/6/2015 8.50 MERISANT CO 9.50% 7/15/2013 5.90 MERITOR AUTO 6.80% 2/15/2009 99.25 MERIX CORP 4.00% 5/15/2013 24.50 MERRILL LYNCH 12.00% 3/26/2010 19.40 METALDYNE CORP 11.00% 6/15/2012 5.05 MICHAELS STORES 11.38% 11/1/2016 31.00 MILLENNIUM AMER 7.63% 11/15/2026 6.94 MOMENTIVE PERFOR 11.50% 12/1/2016 24.50 MORRIS PUBLISH 7.00% 8/1/2013 8.75 MRS FIELDS 10.00% 10/24/2014 27.50 MTR GAMING GROUP 9.00% 6/1/2012 50.25 MTR GAMING GROUP 9.75% 4/1/2010 74.00 MUZAK LLC 9.88% 3/15/2009 87.70 MUZAK LLC/FIN 10.00% 2/15/2009 79.00 NATL FINANCIAL 0.75% 2/1/2012 23.00 NAVISTAR FINL CP 4.75% 4/1/2009 88.00 NEFF CORP 10.00% 6/1/2015 20.13 NELNET INC 5.13% 6/1/2010 64.75 NETWORK COMMUNIC 10.75% 12/1/2013 27.01 NEW PAGE CORP 10.00% 5/1/2012 39.25 NEW PLAN EXCEL 7.40% 9/15/2009 70.00 NEW PLAN EXCEL 7.50% 7/30/2029 14.00 NEW PLAN REALTY 6.90% 2/15/2028 10.33 NEW PLAN REALTY 6.90% 2/15/2028 15.68 NEW PLAN REALTY 7.65% 11/2/2026 12.00 NEW PLAN REALTY 7.68% 11/2/2026 19.00 NEW PLAN REALTY 7.97% 8/14/2026 10.00 NEWARK GROUP INC 9.75% 3/15/2014 15.00 NEWPAGE CORP 10.00% 5/1/2012 35.00 NEWPAGE CORP 12.00% 5/1/2013 27.20 NORTEK INC 8.50% 9/1/2014 29.75 NORTEK INC 8.50% 9/1/2014 22.25 NORTH ATL TRADNG 9.25% 3/1/2012 22.50 NORTHERN TEL CAP 7.88% 6/15/2026 10.00 NTK HOLDINGS INC 0.00% 3/1/2014 13.00 NUVEEN INVEST 5.00% 9/15/2010 61.00 NUVEEN INVEST 5.50% 9/15/2015 25.27 NUVEEN INVESTM 10.50% 11/15/2015 29.00 OLIN CORP 6.75% 6/15/2016 14.88 OLIN CORP 9.13% 12/15/2011 37.75 OSCIENT PHARM 3.50% 4/15/2011 9.25 OSI RESTAURANT 10.00% 6/15/2015 27.38 OSI RESTAURANT 10.00% 6/15/2015 17.75 PALM HARBOR 3.25% 5/15/2024 33.00 PANOLAM INDUSTRI 10.75% 10/1/2013 37.75 PARK PLACE ENT 7.50% 9/1/2009 60.25 PARK PLACE ENT 7.88% 3/15/2010 57.94 PARK PLACE ENT 8.13% 5/15/2011 47.63 PARK PLACE ENT 8.13% 5/15/2011 45.88 PILGRIM'S PRIDE 8.38% 5/1/2017 13.50 PILGRIMS PRIDE 9.25% 11/15/2013 6.00 PLIANT CORP 11.13% 9/1/2009 15.00 PLY GEM INDS 9.00% 2/15/2012 27.00 POLYONE CORP 8.88% 5/1/2012 41.03 POPE & TALBOT 8.38% 6/1/2013 0.60 POWERWAVE TECH 1.88% 11/15/2024 17.35 POWERWAVE TECH 3.88% 10/1/2027 14.50 PREGIS CORP 12.38% 10/15/2013 40.50 PREM ASSET 04-04 4.13% 3/12/2009 92.75 PRESIDENTIAL LFE 7.88% 2/15/2009 100.00 PRIMUS TELECOM 3.75% 9/15/2010 3.88 PRIMUS TELECOM 8.00% 1/15/2014 9.50 PRIMUS TELECOM 12.75% 10/15/2009 2.00 PRIMUS TELECOMM 14.25% 5/20/2011 28.00 PROLOGIS 7.88% 5/15/2009 57.00 PROVIDENCE SERV 6.50% 5/15/2014 28.00 QUALITY DISTRIBU 9.00% 11/15/2010 29.50 QUANTUM CORP 4.38% 8/1/2010 37.50 QUANTUM CORP 4.38% 8/1/2010 37.52 RADIAN GROUP 7.75% 6/1/2011 50.50 RADIAN GROUP 7.75% 6/1/2011 53.25 RADIO ONE INC 6.38% 2/15/2013 24.00 RADIO ONE INC 8.88% 7/1/2011 30.50 RAFAELLA APPAREL 11.25% 6/15/2011 50.50 RATHGIBSON INC 11.25% 2/15/2014 21.88 RAYOVAC CORP 8.50% 10/1/2013 8.70 READER'S DIGEST 9.00% 2/15/2017 9.25 REAL MEX RESTAUR 10.00% 4/1/2010 75.50 REALOGY CORP 10.50% 4/15/2014 24.50 REALOGY CORP 12.38% 4/15/2015 13.46 REALOGY CORP 12.38% 4/15/2015 13.25 REEBOK INTL LTD 2.00% 5/1/2024 67.00 RENTECH INC 4.00% 4/15/2013 26.00 RESIDENTIAL CAP 8.00% 2/22/2011 36.07 RESIDENTIAL CAP 8.38% 6/30/2010 51.00 RESIDENTIAL CAP 8.50% 6/1/2012 33.88 RESIDENTIAL CAP 8.88% 6/30/2015 36.00 RESIDENTIAL CAP 8.38% 6/30/2010 50.00 RESIDENTIAL CAP 8.50% 5/15/2010 68.00 REXNORD CORP 10.13% 12/15/2012 11.50 RH DONNELLEY 6.88% 1/15/2013 12.38 RH DONNELLEY 6.88% 1/15/2013 8.51 RH DONNELLEY 6.88% 1/15/2013 8.51 RH DONNELLEY 8.88% 1/15/2016 10.00 RH DONNELLEY 8.88% 10/15/2017 10.52 RH DONNELLEY 8.88% 10/15/2017 11.00 RH DONNELLEY INC 11.75% 5/15/2015 32.13 RITE AID CORP 6.88% 8/15/2013 24.50 RITE AID CORP 6.88% 12/15/2028 17.85 RITE AID CORP 7.70% 2/15/2027 12.25 RITE AID CORP 8.13% 5/1/2010 57.00 RITE AID CORP 8.63% 3/1/2015 27.50 RITE AID CORP 9.25% 6/1/2013 28.13 RITE AID CORP 9.50% 6/15/2017 27.50 RJ TOWER CORP 12.00% 6/1/2013 2.00 ROTECH HEALTHCA 9.50% 4/1/2012 21.00 ROUSE CO LP/TRC 6.75% 5/1/2013 31.63 ROUSE COMPANY 3.63% 3/15/2009 54.92 ROUSE COMPANY 7.20% 9/15/2012 34.13 ROUSE COMPANY 8.00% 4/30/2009 34.50 SABRE HOLDINGS 8.35% 3/15/2016 26.50 SABRE HOLDINGS 7.35% 8/1/2011 39.00 SALEM COMM HLDG 7.75% 12/15/2010 59.75 SEITEL INC 9.75% 2/15/2014 36.00 SERVICEMASTER CO 7.10% 3/1/2018 35.00 SERVICEMASTER CO 7.25% 3/1/2038 19.00 SIMMONS CO 7.88% 1/15/2014 18.00 SINCLAIR BROAD 3.00% 5/15/2027 60.00 SIRIUS SATELLITE 2.50% 2/15/2009 81.13 SIRIUS SATELLITE 2.50% 2/15/2009 84.50 SIRIUS SATELLITE 3.25% 10/15/2011 17.63 SIRIUS SATELLITE 9.63% 8/1/2013 23.48 SIX FLAGS INC 4.50% 5/15/2015 16.50 SIX FLAGS INC 8.88% 2/1/2010 32.27 SIX FLAGS INC 9.63% 6/1/2014 21.00 SIX FLAGS INC 9.75% 4/15/2013 19.56 SMURFIT-STONE 8.00% 3/15/2017 11.38 SONIC AUTOMOTIVE 5.25% 5/7/2009 91.00 SONIC AUTOMOTIVE 8.63% 8/15/2013 41.00 SPACEHAB INC 5.50% 10/15/2010 52.00 SPANSION LLC 11.25% 1/15/2016 7.81 SPECTRUM BRANDS 7.38% 2/1/2015 20.00 SPHERIS INC 11.00% 12/15/2012 30.50 STALLION OILFIEL 9.75% 2/1/2015 19.63 STANLEY-MARTIN 9.75% 8/15/2015 28.00 STATION CASINOS 6.00% 4/1/2012 20.00 STATION CASINOS 6.50% 2/1/2014 5.10 STATION CASINOS 6.63% 3/15/2018 2.50 STATION CASINOS 6.88% 3/1/2016 2.94 STATION CASINOS 7.75% 8/15/2016 19.50 STONE CONTAINER 8.38% 7/1/2012 12.69 SWIFT TRANS CO 12.50% 5/15/2017 10.88 TEKNI-PLEX INC 10.88% 8/15/2012 57.00 TEKNI-PLEX INC 12.75% 6/15/2010 73.50 TENNECO AUTOMOT 8.63% 11/15/2014 29.00 TERPHANE HLDING 12.50% 6/15/2009 81.63 TERPHANE HLDING 12.50% 6/15/2009 81.63 TETON ENERGY COR 10.75% 6/18/2013 36.05 THORNBURG MTG 8.00% 5/15/2013 16.59 TIMES MIRROR CO 6.61% 9/15/2027 1.50 TIMES MIRROR CO 7.25% 3/1/2013 2.25 TIMES MIRROR CO 7.25% 11/15/2096 4.25 TIMES MIRROR CO 7.50% 7/1/2023 3.00 TOUSA INC 9.00% 7/1/2010 5.06 TOUSA INC 9.00% 7/1/2010 4.75 TOYS R US 7.63% 8/1/2011 38.00 TOYS R US DEL 8.75% 9/1/2021 15.00 TRANS-LUX CORP 8.25% 3/1/2012 35.00 TRANSMERIDIAN EX 12.00% 12/15/2010 10.00 TRAVELPORT LLC 11.88% 9/1/2016 31.50 TRIBUNE CO 4.88% 8/15/2010 3.75 TRIBUNE CO 5.25% 8/15/2015 2.05 TRIBUNE CO 5.67% 12/8/2008 2.00 TRONOX WORLDWIDE 9.50% 12/1/2012 14.38 TRUE TEMPER 8.38% 9/15/2011 30.00 TRUMP ENTERTNMNT 8.50% 6/1/2015 15.00 UAL CORP 5.00% 2/1/2021 55.63 UNISYS CORP 6.88% 3/15/2010 62.75 UNISYS CORP 8.00% 10/15/2012 36.00 UNITED COMPONENT 9.38% 6/15/2013 34.50 UNITED MERCH&MFG 3.50% 3/31/2022 1.00 UNIV CITY FL HLD 8.38% 5/1/2010 55.00 US LEASING INTL 6.00% 9/6/2011 25.00 US SHIPPING PART 13.00% 8/15/2014 21.75 USAUTOS TRUST 5.10% 3/3/2011 16.00 USFREIGHTWAYS 8.50% 4/15/2010 58.00 VALASSIS COMM 8.25% 3/1/2015 26.25 VENOCO INC 8.75% 12/15/2011 49.50 VERASUN ENERGY 9.38% 6/1/2017 12.00 VERENIUM CORP 5.50% 4/1/2027 20.63 VERSO PAPER 11.38% 8/1/2016 26.50 VESTA INSUR GRP 8.75% 7/15/2025 1.00 VIRGIN RIVER CAS 9.00% 1/15/2012 27.75 VISTEON CORP 7.00% 3/10/2014 4.59 VISTEON CORP 8.25% 8/1/2010 11.31 VISTEON CORP 12.25% 12/31/2016 12.13 VITESSE SEMICOND 1.50% 10/1/2024 46.00 WASH MUT BANK NV 5.55% 6/16/2010 24.00 WASH MUTUAL INC 8.25% 4/1/2010 45.00 WCI COMMUNITIES 4.00% 8/5/2023 5.06 WCI COMMUNITIES 6.63% 3/15/2015 9.00 WCI COMMUNITIES 7.88% 10/1/2013 6.31 WCI COMMUNITIES 9.13% 5/1/2012 1.00 WDAC SUBSIDIARY 8.38% 12/1/2014 30.88 WILLIAM LYON 7.50% 2/15/2014 20.00 WILLIAM LYON 7.63% 12/15/2012 32.63 WILLIAM LYON 7.63% 12/15/2012 20.00 WILLIAM LYON 10.75% 4/1/2013 20.00 WIMAR OP LLC/FIN 9.63% 12/15/2014 1.76 WOLVERINE TUBE 10.50% 4/1/2009 78.20 XM SATELLITE 10.00% 12/1/2009 38.50 XM SATELLITE 10.00% 12/31/2009 38.13 XM SATELLITE 13.00% 8/1/2013 24.25 YOUNG BROADCSTNG 8.75% 1/15/2014 0.26 YOUNG BROADCSTNG 10.00% 3/1/2011 0.20 ********* 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, Sheryl Joy P. Olano, Carlo Alejandro B. Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2009. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***