/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090218.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, February 18, 2009, Vol. 13, No. 48 Headlines AMERENENERGY GENERATING: Moody's Affirms Baa3 Unsecured Debt APEX CONSTRUCTION: Goes Bankrupt After Using Up Investors' Money AUTOBACS STRAUSS: Taps Young Conaway as Bankruptcy Attorneys BERNARD L. MADOFF: Irving Picard Subpoenas Jefferies & Other Firms BERNARD L. MADOFF: Santander Clients May Not Keep Bank Accounts CARITAS HEALTH: Has Until March 9 to File Schedules & Statements CARITAS HEALTH: Wants to Hire Epiq as Claims and Noticing Agent CENTRAL ILLINOIS LIGHT: Moody's Affirms Issuer Rating at Ba1 CENTRAL ILLINOIS PUBLIC SERVICE: Moody's Affirms Ba1 Rating CHARLESTON AFFORDABLE HOUSING: Voluntary Chapter 11 Case Summary CHECKER MOTORS: Files Schedules of Assets and Liabilities CHRYSLER LLC: Sends Viability Plan; Chapter 11 Last Option CILCORP INC: Moody's Affirms Corporate Rating at Ba1 CIRCUIT CITY: Wins Court Nod to Auction Remaining Store Leases CONEXANT SYSTEMS: Files Form 10-Q For Quarter Ended Jan. 2 CRISS BROTHERS: Voluntary Chapter 11 Case Summary D&A RESTAURANT: Voluntary Chapter 11 Case Summary DALE UPTEGROVE: Voluntary Chapter 11 Case Summary DAN MAHRU: Files for Bankruptcy, Owes As Much as $95 Million DAVID FIORI: Voluntary Chapter 11 Case Summary DYNACO CORP: Voluntary Chapter 11 Case Summary EMD GROUP: Voluntary Chapter 11 Case Summary ENTERPRISE ACQUISITION: Receives Non-Compliance Notice From NYSE FISCA OIL: Voluntary Chapter 11 Case Summary FLYING J: Big West's Idled Plant Released Ammonia Vapor FORWARD FOODS: Case Summary & 19 Largest Unsecured Creditors FRONTIER AIRLINES: Posts $1,126,000 Net Income for Q4 2008 GENERAL MOTORS: Saturn Dealers will Spin Off Into New Company GENERAL MOTORS: Viability Plan Requires Add'l $16.6B Govt. Funding GENERAL MOTORS: Sichuan Auto Wants to Buy Hummer Vehicle Unit GEORGE HOOVER: Voluntary Chapter 11 Case Summary GOTTSCHALKS INC: Proposes March 19 Auction for All Assets GOTTSCHALKS INC: Committee Taps Cooley Godward as Lead Counsel GSI GROUP: Gets Extension From Nasdaq to Regain Compliance HARRAH'S ENTERTAINMENT: Almost Bankrupt, Bondholders Sue HAWAIIAN TELCOM: Wants Plan Exclusivity Until July 30 HCA INC: Peter Stavros Resigns; Kenneth Freeman Joins Board HCA INC: Offering $300 Million Senior Secured Second Lien Notes HRP MYRTLE: Coastal Entertainment Wants Park, Tries to Block Sale ICFQ DESARROLLOS: Court OKs Banco Bilbao-Backed Case Dismissal INCENTRA SOLUTIONS: Wants Epiq as Claims and Solicitation Agent IMPLANT SCIENCES: Signs New 3-Year Employment Pact With G. Bolduc ILLINOIS POWER: Moody's Affirms Corporate Rating at Ba1 INCENTRA SOLUTIONS: Wants Karl Reed Guest as Special Counsel INCENTRA SOLUTIONS: Wants Pachulski Stang as Bankruptcy Counsel INTEGRATED MEDIA: Board Abandons Effort to Convert Debt to Equity JERRY MCWILLIS: May Use Cash Collateral Through March 31, 2009 K-CAD: Voluntary Chapter 11 Case Summary KEY PLASTICS: Ct Oks Sale of 3350 Farmtrail Property to Tekgard LANDMARK LUGGAGE: Voluntary Chapter 11 Case Summary LEAH LIGHTFOOT: Voluntary Chapter 11 Case Summary LEE'S RV CENTER: Voluntary Chapter 11 Case Summary LEVEL 3 COMMS: Posts $290 Million Net Loss in 2008 LIGHTWAVE ENTERPRISES: Voluntary Chapter 11 Case Summary LINENS 'N THINGS: Pens Deal with Quebecor World on Sale of Paper LUMINENT MORTGAGE: Wants Solicitation Period Extended to July 2 LUMINENT MORTGAGE: May Employ Protiviti as Financial Advisors LYONDELL CHEMICAL: Temporary Injunction Vs. Noteholders Extended MARC DREIER: Released on $10 Million Bail MBF HEALTHCARE: Receives Non-Compliance Notice From NYSE MIDWAY GAMES: Gets Access to Lenders' Cash Collateral MIDWAY GAMES: Creditors Blame Sumner Redstone for Co.'s Collapse MIDWAY GAMES: Wants Epiq Bankruptcy as Claims and Noticing Agent MODINE MANUFACTURING: Lenders Agree to Waive Covenant Default NAILITE INT'L: Liquidity Woes Blamed for Chapter 11 Bankruptcy NORTH AMERICAN: Delays Filing of Form 10-Q for Qrtr. Ended Dec. ORCHARDS VILLAGE: Files for Chapter 11 Bankruptcy Protection PARENT CO: Sells Trademarks to Toys "R" Us for $2.15 Million PAULINE PILATE: Voluntary Chapter 11 Case Summary POLAROID CORP: Creditors Object to Sale; Says Assets Undervalued PRESERVE LLC: April 30 Is Bar Date for Filing Proofs of Claim PRESERVE LLC: Asks Court to Extend Plan Filing Period to May 22 QUEBECOR WORLD: Seeks March 31 Extension of Lease Decision Period QUEBECOR WORLD: Seeks to Implement Settlement Pact with CRC QUEBECOR WORLD: Pens Deal on Sale of Paper by Linens 'n Things RICETTA'S INC: Voluntary Chapter 11 Case Summary RIVER ELKS: Can't Reorganize, Seeks Chapter 7 Conversion SAM STEVENS: Files for Bankruptcy; Must Tear Down House SANTA MONICA MEDIA: Receives Non-Compliance Notice From NYSE SHARE BUILDING: Files for Bankruptcy As Home Sales Fall SIRIUS XM: Secures Loan From Liberty, Avoids Bankruptcy SMITH MOUNTAIN: Voluntary Chapter 11 Case Summary STAR TRIBUNE: Seeks New Deals With Labor Unions STATION CASINOS: S. Blake Murchison Challenges Firm's Plan TERRY WOODS: Voluntary Chapter 11 Case Summary TODD PETERSON: Voluntary Chapter 11 Case Summary TRUMP ENTERTAINMENT: Back in Ch. 11 to Avoid Involuntary Petition TRUMP ENTERTAINMENT: Case Summary & 20 Largest Unsecured Creditors TULLY'S COFFEE: Posts $600,000 Net Loss in Quarter Ended Dec. 28 UNION ELECTRIC: Moody's Affirms Baa2 Issuer Rating WENTWORTH ENERGY: Files Second Amendment to Annual Report YELLOWSTONE CLUB: Rancho Mirage Used as Personal Loan Collateral YOUNG BROADCASTING: Wants to Hire Epiq as Claims & Noticing Agent YOUNG BROADCASTING: Wants Schedules' Deadline Moved to March 30 YOUNG BROADCASTING: Can Use Lender's Cash Collateral on Interim YRC WORLDWIDE: Finalizes Bank Amendment & Renews ABS Facility YRC WORLDWIDE: Gets $9 Million From Additional Sale Transaction YRC WORLDWIDE: Grants Union Workers Options to Buy 11.3MM Shares * Berkery & Seneca Financial Collaborate to Aid Troubled Firms * Five Attorneys Join Brown Rudnick as Partners * NewOak Capital Appoints Patrick Mooney as COO * Marwil, Thomas & Possinger Join Proskauer as Partners * Failed Banks in 2009 Now Total 13 * Destination Clubs Hit By Current Economic Turmoil * Consumer Confidence Nears 28-Year Low in January, says Reuters * Report: Auto Industry Gave $60 Trillion Since 1900 to Economy * President Barack Obama Signs Stimulus Plan Into Law * Upcoming Meetings, Conferences and Seminars ********* AMERENENERGY GENERATING: Moody's Affirms Baa3 Unsecured Debt ------------------------------------------------------------ Moody's Investors Service affirmed the ratings of Ameren Corporation (Baa3 Issuer Rating); Union Electric Company (d/b/a AmerenUE, Baa2 Issuer Rating); AmerenEnergy Generating Company (Baa3 senior unsecured); 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). The rating outlook of Ameren and all of its subsidiaries is stable. The ratings affirmation reflects Moody's view that Ameren's announcement on Friday that it was reducing its common dividend by 39% is a conservative, prudent, and credit positive action that will conserve cash and support financial coverage metrics. It will also better position the company to manage increasingly challenging business and credit market conditions for utilities going forward. Ameren, like many other investor owned utilities, has experienced higher operating and maintenance costs and increased environmental capital spending requirements in recent years. Moody's has cited Ameren's high dividend payout ratio as an credit constraining factor that has contributed to high levels of negative free cash flow and increased external financing needs at a time when financing costs have increased significantly. Ameren has indicated that its new dividend payout, which is more in line with average dividend payout levels in the utilities industry, will allow the company to conserve approximately $215 million of cash annually, reducing negative free cash flow and external debt financing needs considerably. The more conservative dividend payout should also help facilitate the renewal of Ameren's bank credit facilities, which include two $500 million facilities maturing at its Illinois utility subsidiaries on January 14, 2010 and a $1.15 billion credit facility maturing at the parent company on July 14, 2010. Although Ameren has been highly reliant on these credit facilities to finance working capital and capital expenditure needs in recent years, the company completed financings of $400 million at AmerenIP and $150 million at AmerenCILCO in the fourth quarter of 2008, reducing draws under the Illinois bank facilities materially. The cash conserved as a result of the dividend reduction should continue to reduce reliance on these bank credit facilities going forward and will likely be viewed favorably by banks considering renewing or entering into new facilities with Ameren and its subsidiaries, which is important considering currently constrained bank credit market conditions. The stable outlook on Ameren and its subsidiaries reflects recently constructive rate case outcomes at its utility subsidiaries, including the approval of a fuel adjustment clause at AmerenUE; the improving regulatory environments for investor owned utilities in both Illinois and Missouri; and Moody's expectation that financial and cash flow coverage metrics should remain adequate to maintain current rating levels. Moody's notes that the recent dividend reduction is supportive of these stable ratings outlooks and provides Ameren and its subsidiaries additional cushion at current rating levels. Negative rating action would still be considered if Ameren and its utilities do not enter into adequate liquidity arrangements well in advance of their current bank credit facility expiration dates in January and July of 2010, although this process should be facilitated by the dividend cut. 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; -- AmerenEnergy Generating Company's Baa3 senior unsecured debt; -- 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; -- CILCORP Inc.'s Corporate Family Rating at Ba1 and senior unsecured debt at Ba2 (LGD5, 74%); -- Central Illinois Light Company's Issuer Rating at Ba1, senior secured debt at Baa2 (LGD2, 19%) and preferred stock at Ba1 (LGD 4, 63%). 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 materially. 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. The last rating action on Ameren, Union Electric, Central Illinois Public Service, CILCORP, Central Illinois Light, and Illinois Power was on January 29, 2009, when the ratings were affirmed and the rating outlooks of Central Illinois Public Service, CILCORP, Central Illinois Light, and Illinois Power were changed to stable from positive. The last rating action on AmerenEnergy Generating Company was on August 13, 2008, when the rating was downgraded to Baa3 from Baa2. 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. APEX CONSTRUCTION: Goes Bankrupt After Using Up Investors' Money ---------------------------------------------------------------- Rob Piercy at KING 5 News reports that an investor has filed a lawsuit against Apex Construction, which filed for bankruptcy after money from investors ran out. Will Davis and several other investors formed an agreement with Apex Construction two years ago, wherein the investors would get loans and the company would construct the homes, KING 5 News relates. When the homes are sold, profits would be spilt between the investors and Apex Construction, KING 5 News states. According to the report, investors financed the entire price of construction and were told, worst case scenario, they would break even. The report quoted Mr. Davis as saying, "Original agreement with the builder said no money out of pocket." According to KING 5 News, an investor presented to the court an e- mail from the owners of Apex Construction, saying that money for the homes was going into a single account. Money for one investor's house was used to pay for the others' homes, KING 5 News states. The money ran out and homes were left unfinished, the report says. Investors who sued Apex Construction before it went bankrupt got some money back, KING 5 News states. For other investors, it would be unlikely that they would recover their money, says the report. AUTOBACS STRAUSS: Taps Young Conaway as Bankruptcy Attorneys ------------------------------------------------------------ Autobacs Strauss and its debtor-affiliate ask the United States Bankruptcy Court for the District of Delaware for permission to employ Young Conaway Stargatt & Taylor LLP as their attorneys. The firm will: a) provide legal advice with respect to the Debtors' powers and duties as debtor-in-possession in the continued operation of their business, and management of its properties; b) prepare and pursue confirmation of a plan and approval of a disclosure statement; c) prepare on behalf of the Debtors necessary applications, motions, answers, orders, reports, and other legal papers; d) appear in Court and to protect the interests of the Debtors before the Court; and e) perform all other legal services for the Debtors, which may be necessary and proper in these proceedings. The firm's principal attorneys and paralegal their current compensation rates: Professional Designation Hourly Rate ------------ ----------- ----------- M. Blake Cleary, Esq. partner $540 David R. Hurst, Esq. attorney $480 Edward J. Kosmowski, Esq. attorney $430 Jaime N. Luton, Esq. attorney $265 Debbie E. Laskin paralegal $210 M. Blake Cleary, a partner of the firm, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About Autobacs Strauss Inc. Headquartered in South River, New Jersey, Autobacs Strauss Inc. -- http://www.straussauto.com/-- sells after-market automotive parts and accessories, and operate automotive service centers located in New York, New Jersey, Philadelphia, Bethlehem and Pennsylvania. The Debtor operate 86 retail store locations and has about 1,450 employees. The Debtor filed for Chapter 11 protection on Feb. 4, 2009, (Bankr. D. Del. Case No.: 09-10358). Edward J. Kosmowski, Esq. at Young Conaway Stargatt & Taylor, LLP represents the Debtor in its restructuring efforts. As of Jan. 3, 2009, the Debtor had total assets of $75,000,000 and total debts of $72,000,000. BERNARD L. MADOFF: Irving Picard Subpoenas Jefferies & Other Firms ------------------------------------------------------------------ Court documents say that Irving Picard, the trustee seeking to liquidate Bernard L. Madoff Investment Securities LLC, has subpoenaed Jefferies & Co. The documents didn't disclose what information Mr. Picard is seeking. Mr. Picard, Bloomberg's Bill Rochelle adds, is seeking information from 13 brokers, stock exchange specialists and clearing brokers. Aside from Jefferies, the trustee is also seeking information from Chicago Board of Trade, LaBranche & Co., and ICE Clear US Inc., among other parties. Christopher Scinta at Bloomberg News relates that Judge Burton Lifland in Manhattan authorized Mr. Picard in January 2009 to issue subpoenas as part of a broad investigation of the Bernard L. Madoff Investment's assets and conduct. Mr. Picard, according to Bloomberg, said that he needs prompt access to information and subpoenas provide the only way to get it. Court documents say that anyone subpoenaed has 10 days to provide documents Mr. Picard requests, or argue that they are privileged information. According to court documents, they have 15 days to produce any witnesses for examination. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC was a market maker in U.S. 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: Santander Clients May Not Keep Bank Accounts --------------------------------------------------------------- Banco Santander SA told clients affected by the Bernard Madoff's Ponzi scheme that they would no longer have to maintain their bank accounts in Santander to be eligible for the preferred-stock swap, offered as part of the January package, Jose De Cordoba and Thomas Catan at The Wall Street Journal report, citing people familiar with the matter. Santander, according to WSJ, had the largest exposure to Mr. Madoff's funds of any commercial bank, with itts clients had losing EUR2.33 billion invested through its Geneva hedge fund, Optimal Investment Services SA. Santader's direct exposure to the fraud was EUR17 million, states the report. WSJ relates that Santander offered in January 2009 to return some of the money lost by clients in the Madoff fraud, saying that it would give victims the value of their original investments in the form of preferred stock paying a yearly interest rate of 2%. Santander, according to WSJ, said that it would swap out the shares in its stricken hedge funds if clients renounce their right to sue and pledge to maintain their current level of business with the bank. The report states that Santander told investors that it would redeem the shares in 10 years' time and that the shares would be listed on an exchange. Lawyers representing some of the Madoff victims said that the offer as inadequate, according to WSJ. A Santander spokesperson said on Monday that the bank's January compensation offer is nonnegotiable, the report says. WSJ states that some wealthy Santander customers are being given the possibility to use the preferred shares as collateral for a loan charging 3% annual interest. The report, citing investors who have received the new offer, says that the loan can amount to 85% of the clients' original investment in Madoff funds and can be taken by clients in cash or reinvested in bonds paying 6% interest. According to WSJ, people familiar with the matter said that about three-quarters of Santander customers have already signed up for the offer, and the bank hopes to get the majority to agree by the end of February. WSJ says that Santander's representatives have been offering a series of incentives to the bank's best customers to get them to sign up for the deal. WSJ reports that the attorneys for the Madoff fraud victims warned that the shares would fetch as little as 20% of their face value on the secondary market, but people familiar with the matter said that Santander assured that they will fetch closer to 40% on February 17. Santander, WSJ relates, said on Monday that it has asked market regulators to grant a two-year suspension of redemption requests for a real-estate investment fund. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC was a market maker in U.S. 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. CARITAS HEALTH: Has Until March 9 to File Schedules & Statements ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of New York has extended until March 9, 2009, the time within which Caritas Health Care, Inc., and its debtor-affiliates may file their schedules of assets and liabilities, statements of financial affairs and lists of executory contracts and unexpired leases. The Debtors related that the extension will allow the Debtors to: -- compile executory contracts; -- review records to determine outstanding liabilities to each individual creditor; -- identify all potential claimants to whom a bar date notice must be sent; and -- identify all payments that were made to creditors within the 90 day period prior to filing. The extension will also ensure the accuracy of the financial statements. Caritas Health Care Inc. is the owner of Mary Immaculate Hospital and St. John's Queens Hospital. Caritas, created by Wyckoff Heights Medical Center, purchased the two hospitals in a bankruptcy sale in early 2007 from St. Vincent Catholic Medical Centers of New York. St. John's has 227 generate acute-care beds while Mary Immaculate has 189. Caritas and eight affiliates filed for Chapter 11 on Feb. 6, 2009 (Bankr. E.D. N.Y., Lead Case No. 09-40901). Adam T. Berkowitz, Esq., at Proskauer Rose LLP, has been tapped as counsel. JL Consulting LLC is the Debtors' restructuring advisors. Caritas in its bankruptcy petition estimated assets of $50 million to $100 million, and debts of $100 million to $500 million. CARITAS HEALTH: Wants to Hire Epiq as Claims and Noticing Agent --------------------------------------------------------------- Caritas Health Care, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Eastern District of New York to employ Epiq Bankruptcy Solutions, LLC, as claims, noticing and balloting agent. Epiq will act as outside agent to the Bankruptcy Clerk in order to assume full responsibility of the distribution of notices and proof of claim forms, and the maintenance, secondary processing and docketing of all proofs of claim filed in the Debtors' Chapter 11 cases. In addition, Epiq will act as solicitation agent with respect to inter alia, the mailing of a disclosure statement, the plan and related ballots, and maintaining and tallying ballots in connection with the voting on the plan. Epiq will also assist the Debtors with: a) the preparation of the Debtors' schedules, statements of financial affairs, and master creditor lists, and any amendments thereto; b) the reconciliation and resolution of claims; and c) the preparation, mailing, tabulation of ballots of certain creditors for the purpose of voting to accept or reject a plan or plans of reorganization. Daniel C. McElhinney, executive director of Epiq Bankruptcy Solutions LLC, tells the Court that Epiq professionals standard rates are: Title Hourly Rate Average Rate ---- ----------- ------------ Clerk $40 - $60 $50 Case Manager (Level 1) $125 - $175 $142.50 IT Programming Consultant $140 - $190 $165 Case Manager (Level 2) $185 - $220 $202.50 Senior Case Manager $225 - $275 $247.50 Senior Consultant TBD TBD The level of senior consultant activity will vary by engagement. The usual average rate is $295 per hour. Mr. McElhinney also relates that Epiq received a $25,000 retainer. Mr. McElhinney assures the Court that Epiq is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Caritas Health Care Inc. Caritas Health Care Inc. is the owner of Mary Immaculate Hospital and St. John's Queens Hospital. Caritas, created by Wyckoff Heights Medical Center, purchased the two hospitals in a bankruptcy sale in early 2007 from St. Vincent Catholic Medical Centers of New York. St. John's has 227 generate acute-care beds while Mary Immaculate has 189. Caritas and eight affiliates filed for Chapter 11 on Feb. 6, 2009 (Bankr. E.D. N.Y., Lead Case No. 09-40901). Adam T. Berkowitz, Esq., at Proskauer Rose LLP, has been tapped as counsel. JL Consulting LLC is the Debtors' restructuring advisors. Caritas in its bankruptcy petition estimated assets of $50 million to $100 million, and debts of $100 million to $500 million. CENTRAL ILLINOIS LIGHT: Moody's Affirms Issuer Rating at Ba1 ------------------------------------------------------------ Moody's Investors Service affirmed the ratings of Ameren Corporation (Baa3 Issuer Rating); Union Electric Company (d/b/a AmerenUE, Baa2 Issuer Rating); AmerenEnergy Generating Company (Baa3 senior unsecured); 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). The rating outlook of Ameren and all of its subsidiaries is stable. The ratings affirmation reflects Moody's view that Ameren's announcement on Friday that it was reducing its common dividend by 39% is a conservative, prudent, and credit positive action that will conserve cash and support financial coverage metrics. It will also better position the company to manage increasingly challenging business and credit market conditions for utilities going forward. Ameren, like many other investor owned utilities, has experienced higher operating and maintenance costs and increased environmental capital spending requirements in recent years. Moody's has cited Ameren's high dividend payout ratio as an credit constraining factor that has contributed to high levels of negative free cash flow and increased external financing needs at a time when financing costs have increased significantly. Ameren has indicated that its new dividend payout, which is more in line with average dividend payout levels in the utilities industry, will allow the company to conserve approximately $215 million of cash annually, reducing negative free cash flow and external debt financing needs considerably. The more conservative dividend payout should also help facilitate the renewal of Ameren's bank credit facilities, which include two $500 million facilities maturing at its Illinois utility subsidiaries on January 14, 2010 and a $1.15 billion credit facility maturing at the parent company on July 14, 2010. Although Ameren has been highly reliant on these credit facilities to finance working capital and capital expenditure needs in recent years, the company completed financings of $400 million at AmerenIP and $150 million at AmerenCILCO in the fourth quarter of 2008, reducing draws under the Illinois bank facilities materially. The cash conserved as a result of the dividend reduction should continue to reduce reliance on these bank credit facilities going forward and will likely be viewed favorably by banks considering renewing or entering into new facilities with Ameren and its subsidiaries, which is important considering currently constrained bank credit market conditions. The stable outlook on Ameren and its subsidiaries reflects recently constructive rate case outcomes at its utility subsidiaries, including the approval of a fuel adjustment clause at AmerenUE; the improving regulatory environments for investor owned utilities in both Illinois and Missouri; and Moody's expectation that financial and cash flow coverage metrics should remain adequate to maintain current rating levels. Moody's notes that the recent dividend reduction is supportive of these stable ratings outlooks and provides Ameren and its subsidiaries additional cushion at current rating levels. Negative rating action would still be considered if Ameren and its utilities do not enter into adequate liquidity arrangements well in advance of their current bank credit facility expiration dates in January and July of 2010, although this process should be facilitated by the dividend cut. 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; -- AmerenEnergy Generating Company's Baa3 senior unsecured debt; -- 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; -- CILCORP Inc.'s Corporate Family Rating at Ba1 and senior unsecured debt at Ba2 (LGD5, 74%); -- Central Illinois Light Company's Issuer Rating at Ba1, senior secured debt at Baa2 (LGD2, 19%) and preferred stock at Ba1 (LGD 4, 63%). 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 materially. 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. The last rating action on Ameren, Union Electric, Central Illinois Public Service, CILCORP, Central Illinois Light, and Illinois Power was on January 29, 2009, when the ratings were affirmed and the rating outlooks of Central Illinois Public Service, CILCORP, Central Illinois Light, and Illinois Power were changed to stable from positive. The last rating action on AmerenEnergy Generating Company was on August 13, 2008, when the rating was downgraded to Baa3 from Baa2. 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. CENTRAL ILLINOIS PUBLIC SERVICE: Moody's Affirms Ba1 Rating ----------------------------------------------------------- Moody's Investors Service affirmed the ratings of Ameren Corporation (Baa3 Issuer Rating); Union Electric Company (d/b/a AmerenUE, Baa2 Issuer Rating); AmerenEnergy Generating Company (Baa3 senior unsecured); 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). The rating outlook of Ameren and all of its subsidiaries is stable. The ratings affirmation reflects Moody's view that Ameren's announcement on Friday that it was reducing its common dividend by 39% is a conservative, prudent, and credit positive action that will conserve cash and support financial coverage metrics. It will also better position the company to manage increasingly challenging business and credit market conditions for utilities going forward. Ameren, like many other investor owned utilities, has experienced higher operating and maintenance costs and increased environmental capital spending requirements in recent years. Moody's has cited Ameren's high dividend payout ratio as an credit constraining factor that has contributed to high levels of negative free cash flow and increased external financing needs at a time when financing costs have increased significantly. Ameren has indicated that its new dividend payout, which is more in line with average dividend payout levels in the utilities industry, will allow the company to conserve approximately $215 million of cash annually, reducing negative free cash flow and external debt financing needs considerably. The more conservative dividend payout should also help facilitate the renewal of Ameren's bank credit facilities, which include two $500 million facilities maturing at its Illinois utility subsidiaries on January 14, 2010 and a $1.15 billion credit facility maturing at the parent company on July 14, 2010. Although Ameren has been highly reliant on these credit facilities to finance working capital and capital expenditure needs in recent years, the company completed financings of $400 million at AmerenIP and $150 million at AmerenCILCO in the fourth quarter of 2008, reducing draws under the Illinois bank facilities materially. The cash conserved as a result of the dividend reduction should continue to reduce reliance on these bank credit facilities going forward and will likely be viewed favorably by banks considering renewing or entering into new facilities with Ameren and its subsidiaries, which is important considering currently constrained bank credit market conditions. The stable outlook on Ameren and its subsidiaries reflects recently constructive rate case outcomes at its utility subsidiaries, including the approval of a fuel adjustment clause at AmerenUE; the improving regulatory environments for investor owned utilities in both Illinois and Missouri; and Moody's expectation that financial and cash flow coverage metrics should remain adequate to maintain current rating levels. Moody's notes that the recent dividend reduction is supportive of these stable ratings outlooks and provides Ameren and its subsidiaries additional cushion at current rating levels. Negative rating action would still be considered if Ameren and its utilities do not enter into adequate liquidity arrangements well in advance of their current bank credit facility expiration dates in January and July of 2010, although this process should be facilitated by the dividend cut. 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; -- AmerenEnergy Generating Company's Baa3 senior unsecured debt; -- 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; -- CILCORP Inc.'s Corporate Family Rating at Ba1 and senior unsecured debt at Ba2 (LGD5, 74%); -- Central Illinois Light Company's Issuer Rating at Ba1, senior secured debt at Baa2 (LGD2, 19%) and preferred stock at Ba1 (LGD 4, 63%). 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 materially. 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. The last rating action on Ameren, Union Electric, Central Illinois Public Service, CILCORP, Central Illinois Light, and Illinois Power was on January 29, 2009, when the ratings were affirmed and the rating outlooks of Central Illinois Public Service, CILCORP, Central Illinois Light, and Illinois Power were changed to stable from positive. The last rating action on AmerenEnergy Generating Company was on August 13, 2008, when the rating was downgraded to Baa3 from Baa2. 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. CHARLESTON AFFORDABLE HOUSING: Voluntary Chapter 11 Case Summary ---------------------------------------------------------------- Debtor: Charleston Affordable Housing, Inc. 1150C Hungryneck Blvd., #C372 Mount Pleasant, SC 29464 Tel: (803) 577-4060 Bankruptcy Case No.: 09-01020 Chapter 11 Petition Date: February 12, 2009 Court: United States Bankruptcy Court District of South Carolina (Charleston) Judge: David R. Duncan Company Description: The debtor is a non-profit organization develops affordable housing in Charleston, South Carolina. Debtor's Counsel: R. Geoffrey Levy, Esq. 2300 Wayne Street Columbia, SC 29201 Tel: (803) 256-4693 Email: llfecf@levylawfirm.org Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Cathy M. Kleiman, executive director of the company. A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/scb09-01020.pdf CHECKER MOTORS: Files Schedules of Assets and Liabilities --------------------------------------------------------- Checker Motors Corporation filed with the U.S. Bankruptcy Court for the Western District of Michigan its schedules of assets and liabilities disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $2,309,600 B. Personal Property $16,635,924 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $1,949,220 E. Creditors Holding Unsecured Priority Claims $10,041 F. Creditors Holding Unsecured Nonpriority Claims $1,921,302 ----------- ------------ TOTAL $18,945,524 $3,880,563 About Checker Motors Headquartered in Kalamazoo, Michigan, Checker Motors Corporation was established by Morris Markin in 1922 through a merger of Commonwealth Motors and Markin Automobile Body. The Debtor, once the manufacturer of the famed Checker automobile (the iconic American taxi cab), is a Kalamazoo, Michigan-based automotive parts supplier that makes metal stampings and welded assemblies for various car and truck lines. The Company filed for Chapter 11 protection on January 16, 2009 (Bankr. W.D. Mich. Case No. 09-00358). Christopher A. Grosman, Esq., at Carson Fischer, P.L.C., represents the Debtor in its restructuring efforts. The Debtor proposed Plante & Moran as financial advisor; Kurtzman Carson Consultants LLC as claims, noticing and balloting agent; and McCarthy Smith Law Group as special counsel. An official committee of unsecured creditors has been appointed in the case. As of December 31, 2008, the Debtor had $22.3 million in assets and $20.1 million in debts. CHRYSLER LLC: Sends Viability Plan; Chapter 11 Last Option ---------------------------------------------------------- Chrysler LLC submitted as scheduled its viability plan to the U.S. Treasury, which plan provides that an orderly wind down under Chapter 11 would be its last alternative. Chrysler also said that it will need an additional $5 billion in Federal aid to be able to survive. To recall, on Dec. 31, 2008, the U.S. Treasury completed a transaction with General Motors Corp., under which the Treasury will provide GM with up to a total of $13.4 billion in a three- year loan from the Troubled Assets Relief Program, secured by various collateral. On January 2, 2009, the Treasury provided a three-year $4 billion loan to Chrysler Holding LLC. The Treasury has required Chrysler and GM to each submit by Feb. 17 a plan that would show the firm's long-term viability. The loan agreement provides for acceleration of the loan if those goals under the plan, which are subject to review by a designee of the U.S. President, are not met. Aside from Chryser, GM has also submitted its viability plan. Chrysler, in its February 17 viability plan submitted to Treasury Secretary Tim Geithner, said that its three alternatives are: (i) Stand Alone. Chrysler said that it can be viable on a stand alone basis in the short or mid-term with these assumptions: (a) its balance sheet is restructured to substantially reduce current debt and debt servicing requirements, (b) targeted concessions are obtained from all constituents, including unions, (c) additional U.S. government funding of $5 billion and DOE 136 funding of $6 billion, and (d) total U.S. auto industry sales of at least 10.1 million units (SAAR). To be viable on a longer term basis, Chrysler needs to pursue strategic partnerships/consolidation (ii) Strategic Partnership/Consolidation. Chrysler will be more viable with a strategic partner. Chrysler has signed a non-binding MOU with Fiat, which partnership will create additional free cash flow over the 2009-167 period. Fiat's proposal, however, is contingent upon Chrysler restructuring its debt, obtaining concessions and receiving adequate U.S. government funding. (iii) Orderly Wind Down. If Chrysler, among other things is not able to restructure its balance sheet, negotiate the targeted concessions from constituents, and receive additional $5 billion in government funding, its only alternative is to file for Chapter 11 as a first step in an orderly wind down. Ch. 11 Filing Absent Add'l. $5 Billion from Treasury Chrysler said that if it does not receive the additional $5 billion in government funding, its only alternative is to file for Chapter 11 as a first step in an orderly wind down. Chrysler stated that in the event of a bankruptcy filing, it would seek debtor-in-possession financing from both private sector lenders and the U.S. Government. "We believe the estimated size of the financing need is $24 billion over a two year period." Chrysler added that without adequate DIP financing, it estimates that: -- First lien lenders will only realize a 25% recovery. -- The U.S. government will recover five cents on the dollar. -- All other creditors will receive nothing. Chrysler also warned, "An orderly wind down will result in significant social impact, with 300,000 jobs lost at Chrysler and its suppliers and over 3,300 dealers falling. 2-3 million jobs could be lost due to a follow-on collapse in the wider industry, resulting in a $150 billion reduction in U.S. government revenue over 3 years." Management's Recommendations: Stand-Alone Plan Chrysler's management recommends that the Company continue its "stand alone" plan while it pursues an alliance. According to the viability plan, a partnership with GM was the best option for the U.S. auto industry from financial and operational perspective "but they 'took it off the table'." Chrysler also investigated an alliance with Nissan but was only able to pursue and alliance with Fiat. However, the non-binding term sheet reached with Fiat is subject to conditions, including Chrysler being able to restructure its balance sheet. Status of Restructuring Chrysler said that it has made progress with respect to its plans to restructure its balance sheet and seek concessions from constituents: -- Chrysler has signed a tentative agreement with the United Auto Workers union with respect to competitive level compensation, among other things. -- Both shareholders (Cerberus and Daimler) have expressed willingness to (i) relinquish their equity, and (ii) convert 100% of their second lien debt for equity. -- Management has reduced filed cost by 27% or by $3.8 billion, reduced headcount by 35,000 (41%), and completed asset sales of $1 billion. -- Chrysler requested a 3% price reduction from suppliers effective April 1. Negotiations are in process. Chrysler's Debt Reductions Chrysler said that its debt composition and required debt reductions (in billions) are: Current Debt In Debt Tentative Add'l Loan Stand Alone Structure Concessions Needed Plan --------- ----------- ---------- ----------- 1st Lien - Lenders /Secured $6.9 -- -- $6.9 2nd Lien - Cerberus/Daimler/ Secured $2.0 $(2.0) -- -- 3rd Lien - Government/Secured $4.3 -- $5.3 $9.6 UAW - VEBA Loan/ Unsecured $10.6 $(5.3) -- $5.3 DOE/136 Loan - Government/Secured -- -- $6.0 $6.0 ----- ------ ------ ------ TOTALS $23.8 $(7.3) $11.3 $27.8 Required Debt & Debt Service Relief from Creditor Groups ($5.0) ------ Serviceable Debt TOTAL $22.8 ====== Chrysler said that alternatives to achieving the $5 billion in debt and debt service reductions are (i) common stock conversion, (i) preferred stock conversion, (iii) modified debt conversion, and (iv) cash out. Chrysler said that if the additional $5 billion of government funding is received and creditors agree to liability restructuring, it will pursue the alliance with Fiat. It will also diligently work to finalized negotiations with all other constituents and pursue a simultaneous closing with Fiat, U.S. Treasury, Daimler, Cerberus, the UAW and its creditors by March 31, 2009. A full-text copy of the Chrysler viability plan is available for free at: http://researcharchives.com/t/s?39a3 A full-text copy of GM's viability plan is available for free at: http://researcharchives.com/t/s?39a4 The Treasury Secretary, upon receipt of Chryser's and GM's viability plans, said, "I have received restructuring reports from both General Motors and Chrysler, and they have been posted on the Treasury Web site. NEC Director Summers and I will be convening the President's Task Force on Autos later this week to analyze the companies' plans and to solicit the full range of input from across the Administration on the restructuring necessary for these companies to achieve viability." About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Dec. 3, 2008, Dominion Bond Rating Service downgraded the ratings of Chrysler LLC, including Chrysler's Issuer Rating to CC from CCC (high). Chrysler's First Lien Secured Credit Facility and Second Lien Secured Credit Facility have also been downgraded to CCC and CC (low) respectively. All trends are Negative. The ratings action reflects Chrysler's challenge to maintain sufficient liquidity balances amid severe industry conditions that have deteriorated alarmingly over the past few months and are not expected to improve in the near term. With this ratings action, Chrysler is removed from Under Review with Negative Implications, where it was placed on Nov. 7, 2008. As reported in the Troubled Company Reporter on Aug. 11, 2008, Standard & Poor's Ratings Services lowered its ratings on Chrysler LLC, including the corporate credit rating, to 'CCC+' from 'B-'. On July 31, 2008, TCR said that Fitch Ratings downgraded the Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'. The Rating Outlook is Negative. The downgrade reflects Chrysler's restricted access to economic retail financing for its vehicles, which is expected to result in a further step-down in retail volumes. Lack of competitive financing is also expected to result in more costly subvention payments and other forms of sales incentives. Fitch is also concerned with the state of the securitization market and the ability of the automakers to access this market on an economic basis over the near term, given the steep drop in residual values, higher default rates, higher loss severity being experienced and jittery capital market. As reported in the TCR on Dec. 3, 2008, Dominion Bond Rating Service downgraded on Nov. 20, 2008, the ratings of Chrysler LLC, including Chrysler's Issuer Rating to CC from CCC (high). Chrysler's First Lien Secured Credit Facility and Second Lien Secured Credit Facility have also been downgraded to CCC and CC (low) respectively. All trends are Negative. The ratings action reflects Chrysler's challenge to maintain sufficient liquidity balances amid severe industry conditions that have deteriorated alarmingly over the past few months and are not expected to improve in the near term. With this ratings action, Chrysler is removed from Under Review with Negative Implications, where it was placed on Nov. 7, 2008. CILCORP INC: Moody's Affirms Corporate Rating at Ba1 ---------------------------------------------------- Moody's Investors Service affirmed the ratings of Ameren Corporation (Baa3 Issuer Rating); Union Electric Company (d/b/a AmerenUE, Baa2 Issuer Rating); AmerenEnergy Generating Company (Baa3 senior unsecured); 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). The rating outlook of Ameren and all of its subsidiaries is stable. The ratings affirmation reflects Moody's view that Ameren's announcement on Friday that it was reducing its common dividend by 39% is a conservative, prudent, and credit positive action that will conserve cash and support financial coverage metrics. It will also better position the company to manage increasingly challenging business and credit market conditions for utilities going forward. Ameren, like many other investor owned utilities, has experienced higher operating and maintenance costs and increased environmental capital spending requirements in recent years. Moody's has cited Ameren's high dividend payout ratio as an credit constraining factor that has contributed to high levels of negative free cash flow and increased external financing needs at a time when financing costs have increased significantly. Ameren has indicated that its new dividend payout, which is more in line with average dividend payout levels in the utilities industry, will allow the company to conserve approximately $215 million of cash annually, reducing negative free cash flow and external debt financing needs considerably. The more conservative dividend payout should also help facilitate the renewal of Ameren's bank credit facilities, which include two $500 million facilities maturing at its Illinois utility subsidiaries on January 14, 2010 and a $1.15 billion credit facility maturing at the parent company on July 14, 2010. Although Ameren has been highly reliant on these credit facilities to finance working capital and capital expenditure needs in recent years, the company completed financings of $400 million at AmerenIP and $150 million at AmerenCILCO in the fourth quarter of 2008, reducing draws under the Illinois bank facilities materially. The cash conserved as a result of the dividend reduction should continue to reduce reliance on these bank credit facilities going forward and will likely be viewed favorably by banks considering renewing or entering into new facilities with Ameren and its subsidiaries, which is important considering currently constrained bank credit market conditions. The stable outlook on Ameren and its subsidiaries reflects recently constructive rate case outcomes at its utility subsidiaries, including the approval of a fuel adjustment clause at AmerenUE; the improving regulatory environments for investor owned utilities in both Illinois and Missouri; and Moody's expectation that financial and cash flow coverage metrics should remain adequate to maintain current rating levels. Moody's notes that the recent dividend reduction is supportive of these stable ratings outlooks and provides Ameren and its subsidiaries additional cushion at current rating levels. Negative rating action would still be considered if Ameren and its utilities do not enter into adequate liquidity arrangements well in advance of their current bank credit facility expiration dates in January and July of 2010, although this process should be facilitated by the dividend cut. 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; -- AmerenEnergy Generating Company's Baa3 senior unsecured debt; -- 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; -- CILCORP Inc.'s Corporate Family Rating at Ba1 and senior unsecured debt at Ba2 (LGD5, 74%); -- Central Illinois Light Company's Issuer Rating at Ba1, senior secured debt at Baa2 (LGD2, 19%) and preferred stock at Ba1 (LGD 4, 63%). 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 materially. 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. The last rating action on Ameren, Union Electric, Central Illinois Public Service, CILCORP, Central Illinois Light, and Illinois Power was on January 29, 2009, when the ratings were affirmed and the rating outlooks of Central Illinois Public Service, CILCORP, Central Illinois Light, and Illinois Power were changed to stable from positive. The last rating action on AmerenEnergy Generating Company was on August 13, 2008, when the rating was downgraded to Baa3 from Baa2. 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. CIRCUIT CITY: Wins Court Nod to Auction Remaining Store Leases -------------------------------------------------------------- Circuit City Stores Inc., now liquidating the last 567 of its 721 stores, received approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to hold an auction for the leases at the remaining locations. A March 13 hearing will be held to approve lease sales, Bloomberg's Bill Rochelle said, citing the court docket. As reported by the Troubled Company Reporter on February 6, DJM Realty, a Gordon Brothers Group company, has been retained to exclusively manage the disposition of all remaining Circuit City Stores, Inc., real estate in the United States. In addition to marketing the remaining Circuit City store leases, DJM Realty will be marketing the distribution centers, office spaces and fee owned properties for sale. Circuit City is a specialty retailer of consumer electronics and related services. As of December 31, 2008, the domestic segment operated 567 stores in 153 U.S. media markets. Circuit City filed for Chapter 11 bankruptcy protection on November 10, 2008, and started liquidation sales on January 17, 2009. The engagement of DJM Realty, which is subject to bankruptcy court approval, anticipates a bid due on March 12, 2009. "Circuit City's real estate has begun to create interest among national and regional retailers and supermarkets. There are great opportunities for schools and other non-retail uses. Several buildings are free standing which offer opportunities for multiple uses. Several of the surplus properties are located in markets that are very difficult to enter, these markets include northern and southern California, the cities of New York, Chicago, Dallas and Houston including the neighboring suburbs," said Andy Graiser and Emilio Amendola, DJM Realty's Co-Presidents. The 578 leases that are available for assignment in this bankruptcy sale range from 16,844 - 82,555 square feet and are in these states: AL, AR, AZ, CA, CO, CT, DE, FL, GA, HI, ID, IL, IN, KS, KY, LA, MA, MD, ME, MI, MN, MO, MS, NC, NE, NH, NJ, NM, NV, NY, OH, OK, OR, PA, PR, RI, SC, TN, TX, UT, VA, VT, WA, WI, WV AND WY. In addition to the retail leases, DJM Realty is marketing 13 fee owned properties consisting of: 5 retail locations in Phoenix, Arizona; Moreno Valley, California; San Jose, California; Louisville, Kentucky; and Baltimore, Maryland, 1 service center in Lithia Springs, Georgia, 7 land parcels in Los Angeles, California; Marion, Illinois; Ardmore, Oklahoma; Lehigh, Pennsylvania; Florence, South Carolina; Richmond, Virginia; and Virginia Beach, Virginia. Circuit City property details will be available shortly at: http://www.djmrealty.com/ For more information please contact: James Avallone javallone@djmrealty.com Tel: (631) 927-0024 As reported by the Troubled Company Reporter, the Debtors failed to reach an agreement with creditors and lenders to structure a going-concern transaction. At a hearing held January 16, 2009, the Debtors obtained authority from the U.S. Bankruptcy Court for the Eastern District of Virginia to sell their business pursuant to an agency agreement with four liquidators: Great American Group WF LLC, Hudson Capital Partners LLC, SB Capital Group LLC, and Tiger Capital Group LLC -- the highest and best bidder for the Debtors' assets. The company has said it does not anticipate any value will remain from the bankruptcy estate for the holders of the company's common equity, although this will be determined in the continuing bankruptcy proceedings. InterTAN Canada Ltd., an indirect wholly-owned subsidiary of U.S.- based Circuit City Stores, noted that The Source by Circuit City stores across Canada remain open for business and are not included in the liquidation process announced by Circuit City. A full-text copy of the order approving the Sale, including the Agency Agreement, is available for free at: http://bankrupt.com/misc/CC_Order_SaleofAllAssets.pdf About DJM Realty Melville, New York-based DJM Realty, a Gordon Brothers Group company -- http://visitwww.djmrealty.com/ -- specializes in real estate dispositions, renegotiation of occupancy costs, acquisitions, valuations and capital solutions. DJM Realty has serviced the nation's most recognizable brands in healthy and distressed situations. Bankruptcy clients have included Linens 'n Things, Goody's, KB Toys, Kmart, The Sharper Image, Whitehall Jewelers, Bombay, The Wiz, and Winn-Dixie. DJM Realty was founded in 1992 and has offices in Los Angeles, Boston and Chicago. About Gordon Brothers Group Founded in 1903, Gordon Brothers Group -- http://www.gordonbrothers.com/is a global advisory, restructuring and investment firm specializing in the retail, consumer products, industrial, and real estate sectors. Gordon Brothers Group maximizes value for both healthy and distressed companies by purchasing or selling all categories of assets, appraising assets, providing debt financing, making private equity investments, and operating businesses for extended periods. Gordon Brothers Group conducts over $40 billion in transactions and appraisals annually. About Circuit City Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- is a specialty retailer of consumer electronics, home office products, entertainment software and related services. The company has two segments -- domestic and international. Circuit City Stores, Inc. (NYSE: CC) together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (E.D. Virg. Lead Case No.: 08-35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of Aug. 31, 2008. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Circuit City Stores Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CONEXANT SYSTEMS: Files Form 10-Q For Quarter Ended Jan. 2 ---------------------------------------------------------- Conexant Systems, Inc., filed with the Securities and Exchange Commission its Form 10-Q for the fiscal quarter ended January 2, 2009, on February 11, 2009. The Troubled Company Reporter reported on Feb. 4, 2009, that Conexant Systems issued a press release on January 29, 2009, disclosing financial results for the first quarter of fiscal 2009 that were in line with updated guidance provided on Dec. 15, 2008. The TCR reported that Revenues for the first quarter of fiscal 2009 were $86.5 million. Core gross margins were 54.1 percent of revenues. Core operating expenses were $43.5 million, and core operating income was $3.3 million. Core net loss from continuing operations was $2.9 million, or $0.06 per share. On a GAAP basis, gross margins were 53.4 percent of revenues. GAAP operating expenses were $46.5 million. GAAP operating loss was $0.4 million, and GAAP net loss from continuing operations was $10.5 million, or $0.21 per share. The company ended the quarter with $110.3 million in cash and cash equivalents, a sequential increase of approximately $4.4 million. For the quarter ended January 2, 2009, the company posted a net loss of $17.6 million. A full-text copy of the Company's Form 10-Q is available for free at: http://researcharchives.com/t/s?3992 The Company also filed on February 11, 2009, Amendment No. 2 of its Annual Report on Form 10-K for the year ended October 3, 2008. The Company filed Amendment No. 2 for the sole purpose of including conformed signatures of Deloitte & Touche LLP in each of D&T's reports. The Amendment also includes updated certifications of the Company's Chief Executive Officer and Chief Financial Officer required by Rules 13a-14(a) and 13a-14(b) under the Securities Exchange Act of 1934. The conformed signatures were not included in the Original Filing due to a clerical error in the Edgar conversion. A full-text copy of Amendment No. 2 to the Form 10-K is available for free at: http://researcharchives.com/t/s?3993 About Conexant Headquartered in Newport Beach, California, Conexant Systems, Inc. (NASDAQ: CNXT) -- http://www.conexant.com/-- has a comprehensive portfolio of innovative semiconductor solutions which includes products for Internet connectivity, digital imaging, and media processing applications. Outside the United States, the company has subsidiaries in Northern Ireland, China, Barbados, Korea, Mauritius, Hong Kong, France, Germany, the United Kingdom, Iceland, India, Israel, Japan, Netherlands, Singapore and Israel. As of January 2, 2009, the Company's balance sheet showed total assets of $419.8 million and total liabilities of $572.8 million, resulting in total shareholders' deficit of $152.9 million. The Company's net losses from continuing operations for fiscal 2008, 2007, and 2006 were $133.4 million, $221.2 million, and $97.1 million, respectively. CRISS BROTHERS: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Criss Brothers Partnership 3424 Kenilworth Avenue Bladensburg, MD 20710 Tel: (301) 277-3454 Fax: (301) 277-0384 Bankruptcy Case No.: 09-12383 Chapter 11 Petition Date: February 13, 2009 Court: United States Bankruptcy Court District of Maryland (Greenbelt) Judge: Paul Mannes Company Description: The debtor is a general building contractor providing siding and roofing installation or repair services, skylight installation, gutter or downspout services, architectural sheet metal work, ceiling erection or repair, chute installation, roofing and siding and sheet metal work services. Debtor's Counsel: Richard H. Gins, Esq. The Law Office of Richard H. Gins, LLC 3 Bethesda Metro Center, Suite 530 Bethesda, MD 20814 Tel: (301) 718-1078 Fax: (301) 718-8359 Email: richard@ginslaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Philip Cristaldi, managing partner of the company. A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/mdb09-12383.pdf D&A RESTAURANT: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: D & A Restaurant Enterprises LLC 100 South Water Street New Haven, CT 06519 Bankruptcy Case No.: 09-30340 Chapter 11 Petition Date: February 12, 2009 Court: United States Bankruptcy Court District of Connecticut (New Haven) Judge: Lorraine Murphy Weil Debtor's Counsel: Peter L. Ressler, Esq. Groob Ressler & Mulqueen 123 York Street, Suite 1B New Haven, CT 06511-0001 Tel: (203) 777-5741 Fax: (203) 777-4206 Email: ressmul@yahoo.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by David Stephen McCoart, managing member of the company. A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ctb09-30340.pdf DALE UPTEGROVE: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Dale Richard Uptegrove aka Ozark Wood Products, LLC aka Uptegrove Wood Products, LLC aka Pack Rat Storage aka Uptegrove Properties 11755 N. Farm Road 177 Fair Grove, MO 65648 Bankruptcy Case No.: 09-60244 Chapter 11 Petition Date: February 12, 2009 Court: United States Bankruptcy Court Western District of Missouri (Springfield) Debtor's Counsel: David E. Schroeder, Esq. David Schroeder Law Offices, PC 1524 East Primrose St., Suite A Springfield, MO 65804-7915 Tel: (417) 890-1000 Fax: (417) 886-8563 Email: bk1@dschroederlaw.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/mowb09-60244.pdf DAN MAHRU: Files for Bankruptcy, Owes As Much as $95 Million ------------------------------------------------------------ Tim Novak at Chicago Sun-Times reports that Dan Mahru has filed for bankruptcy. Sun-Times relates that Mr. Mahru said that he and his business partners, including Tony Rezko, owe as much as $95 million to creditors. Sun-Times states that Messrs. Mahru and Rezko separated a few years ago as development partners, but they're still facing dozens of lawsuits filed over housing developments they built. The report quoted Mr. Mahru as saying, "I couldn't handle all the multitude of lawsuits involving Mr. Rezko." Mr. Mahru, according to Sun-Times, estimates his personal debts at $50 million. According to Sun-Times, Mr. Mahru stopped paying the $1.5 million mortgage on his Glencoe home. Sun-Times states that the house is now in foreclosure. Sun-Times relates that Mr. Mahru owes $5.4 million on mortgages for his Automatic Ice company, which provides icemakers to restaurants and hotels, and more than $480,000 in legal fees to eight law firms -- including $5,075 to the law firm of Ald. Edward M. Burke (14th). Sun-Times reports that that Mr. Mahru's creditors include: -- a company owned by Nadhmi Auchi, the Iraq-born billionaire who took control of 62 acres in the South Loop that Messrs. Rezko and Mahru hoped to develop; -- Joseph Cacciatore, a lawyer and developer who claims he's owed $5 million from the South Loop project; -- John Thomas, a developer and FBI mole who helped authorities document the repeated visits former Gov. Rod Blagojevich and President Obama made to the offices where Messrs. Rezko and Mahru ran their Rezmar Corp.; and -- Fortunee Massuda, a podiatrist who invested millions in Rezmar projects. Sun-Times says that Mr. Mahru lists $48,971 in assets. Dan Mahru is a lawyer who became an ice peddler and real estate developer. DAVID FIORI: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: David Fiori, Jr. d/b/a Integrated Electronic Techonologies 2075 Byberry Road, Suite 104 Bensalem, PA 19020 Bankruptcy Case No.: 09-10960 Chapter 11 Petition Date: February 12, 2009 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Debtor's Counsel: Edmond M. George, Esq. Obermayer Rebmann Maxwell & Hippel, LLP 1617 John F. Kennedy Blvd. One Penn Center, Suite 1900 Philadelphia, PA 19103 Tel: (215) 665-3140 Email: edmond.george@obermayer.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/paeb09-10960.pdf DYNACO CORP: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Dynaco Corp. dba Dynaco dba Dynaco West dba Dynaco Acquisition 2500 E. Shady Grove Road Irving, TX 75060 Tel: (480) 968-2000 Fax: (480) 921-9830 Bankruptcy Case No.: 09-30920 Chapter 11 Petition Date: February 13, 2009 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Stacey G. Jernigan Company Description: Dynaco Corp. is a premier, high-reliability rigid-flex circuit manufacturer. Dynaco offers state-of-the-art fabrication of complex printed circuits and assemblies for quick turn prototype builds through volume manufacturing. See: http://www.dynacocorp.com/ Debtor's Counsel: Joyce W. Lindauer, Esq. Joyce W. Lindauer, Attorney at Law 8140 Walnut Hill Lane, Suite 301 Dallas, TX 75231 Tel: (972) 503-4033 Fax: (972) 503-4034 Email: courts@joycelindauer.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Steve L. Dutton, president of the Company. The Debtor did not file a list of its 20 largest unsecured creditors together with its petition. EMD GROUP: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: EMD Group of SW Florida, LLC P.O. Box 617 Lafayette Hill, PA 19444 Bankruptcy Case No.: 09-02543 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Windy City Grill of Vanderbilt Beach, LLC 09-02545 Windy City Grill of Daniel's Parkway, LLC 09-02547 Chapter 11 Petition Date: February 13, 2009 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Buddy D. Ford, Esq. 115 N. MacDill Avenue Tampa, FL 33609-1521 Tel: (813) 877-4669 Fax: (813) 877-5543 Email: Buddy@tampaesq.com Estimated Assets: $0 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Edward M. DeLeo, managing member of the Company. The Debtors did not file a list of their 20 largest unsecured creditors together with their petitions. ENTERPRISE ACQUISITION: Receives Non-Compliance Notice From NYSE ---------------------------------------------------------------- Enterprise Acquisition Corp. received on February 10, 2009, a deficiency letter from the NYSE Alternext US LLC indicating that it was not in compliance with Section 704 of the NYSE Alternext US Company Guide because Enterprise did not hold an annual meeting of its stockholders during the year ended December 31, 2008. Enterprise has been afforded the opportunity to submit a plan to the Exchange by March 10, 2009, advising the Exchange of actions taken, or to be taken, to bring Enterprise into compliance with Section 704 of the Company Guide by August 11, 2009. Enterprise intends to submit a plan to the Exchange by March 10, 2009, explaining that, pursuant to Enterprise's charter, it must consummate a business combination by November 7, 2009, or Enterprise will dissolve and liquidate. As a result, Enterprise will either hold an annual meeting of stockholders prior to November 7, 2009 or liquidate, in which case its securities would be delisted from the Exchange. If the plan is accepted, Enterprise will be able to continue its listing, during which time Enterprise will be subject to continued periodic review by the Exchange's staff. If the plan is not accepted, the Exchange could initiate delisting procedures against Enterprise. About Enterprise Acquisition Located in Boca Raton, Florida, Enterprise Acquisition Corp. (NYSE Alternext US, Units: EST.U, Common Stock: EST, Warrants: EST.WS) ("Enterprise") - http://www.enterpriseacq.com/-- is a blank check company formed for the purpose of acquiring, through a merger, capital stock exchange, asset acquisition or other similar business combination with one or more operating businesses. FISCA OIL: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: Fisca Oil Co., Inc. 4830 Rainbow Boulevard Westwood, KS 66205 Tel: (913) 236-7000 Bankruptcy Case No.: 09-21519 Chapter 11 Petition Date: February 12, 2009 Court: United States Bankruptcy Court Eastern District of Wisconsin (Milwaukee) Judge: Pamela Pepper Company Description: The Debtor operates a gasoline service station in Westwood, Kansas. Debtor's Counsel: Patrick B. Howell, Esq. 555 East Wells St., Suite 1900 Milwaukee, WI 53202 Tel: (414) 273-2100 Fax: (414) 223-5000 Email: phowell@whdlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by G. Paul Streckmann, CEO of the Company. A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/wieb09-21519.pdf FLYING J: Big West's Idled Plant Released Ammonia Vapor ------------------------------------------------------- According to Bloomberg News, Big West of California LLC, a subsidiary of Flying J Inc., said ammonia was released as a unit was idled at its Bakersfield, California, refinery. The ammonia vapor escaped as the phosam unit was being shut at 9:10 a.m. On Jan. 15, the company said in a filing with state regulators. Big West said Jan. 28 it was "winding down" operations at its Bakersfield plant after it was "unable to reach an agreement with suppliers or secure other solutions that would allow the refinery to continue to operate normally." Big West said it has contacted the United Steelworkers Local 219 to begin discussions regarding "the future of its contract with union employees at its Bakersfield Refinery.". Freed Greener, executive vice president of Big West, said: "Following the Chapter 11 filing on Dec. 22, 2008, we have not had the cash liquidity needed to purchase crude in the necessary types and quantities under the terms offered by suppliers. We are continuing to evaluate the full range of options, but we have been unsuccessful in our efforts thus far to find a workable solution. For now, we will be winding down refining operations at the facility as we continue to explore opportunities. We hope that this suspension will be short-lived, and are working very hard to find a solution that will allow resumption of operations. However, at this time, we cannot predict when that might occur." Big West of California LLC, owns and operates a 70,000 barrel per day refinery in Bakersfield, California. The refinery is supplied by local California crude oils produced in the San Joaquin Valley and the Los Angeles Basin. Big West of California primarily markets finished motor fuel products in the Bakersfield and Fresno areas. The refinery is also a large supplier of gas oil products to other refiners. About Flying J Headquartered in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com-- operate an oil company with operations in the filed of exploration and refining of petroleum products. The Debtors engage in online banking, card processing truck and trailer leasing, and payroll services. The Debtors also operate about 200 travel plazas in 41 states and six Canadian provinces. The company and six of its affiliates filed for Chapter 11 protection on Dec. 22, 2008 (Bankr. D. Del. Lead Case No. 08-13384). Kirkland & Ellis LLP represents the Debtors' in their restructuring efforts and Young, Conaway, Stargatt & Taylor LLP as their Delaware Counsel. The Debtors proposed The Blackstone Group LP as financial advisor and Epiq Bankruptcy Solutions LLC as claims agent. When the Debtors filed for protection from its creditors, they listed assets more than $1 billion and debts between $100 million to $500 million. FORWARD FOODS: Case Summary & 19 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Forward Foods LLC 2548 Business Parkway Minden, NV 89423 Bankruptcy Case No.: 09-10545 Type of Business: The Debtor makes and sells energy bars. Chapter 11 Petition Date: February 17, 2009 Court: District of Delaware (Delaware) Judge: Kevin J. Carey Debtor's Counsel: Bradford J. Sandler, Esq. bsandler@beneschlaw.com Benesch Friedlander Coplan & Aronoff 222 Delaware Avenue, Suite 801 Wilmington, DE 19801 Tel: (302) 442-7007 Fax: (302) 442-7007 Claims Notice and Balloting Agent: The Garden City Group Inc. Total Assets: $21,279,873 Total Debts: $25,364,230 The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ The CIT Group/Commercial secured: $5,125,000 Services, Inc. $1,344,473 Attn: Bertie Pujii 300 South Grand Avenue Inc. 14th Floor Los Angeles, CA 90071 Tel: (213) 576-4608 Next Proteins, Inc. $3,910,000 5750 Fleet Street Suite 100 Carlsbad, CA 92008 Tel: (760) 431-8152 Constantine Cannon $741,122 450 Lexington Avenue New York, NY 10017 Tel: (212) 350-2700 CH Robinson Worldwide $324,808 Gelita USA $196,584 Hire Dynamics LLC $152,171 Firmenich Inc. $123,092 Malnove Incorporated $99,812 of Utah Fonterra USA Inc. $98,360 Clasen Quality Coatings, Inc. $80,205 Golden Select Foods $75,884 Farbest-Tallman Foods Corp. $70,547 Premium Ingredients, Ltd. $68,174 St. Louis Lithographing Co. $68,119 American Casein Company $65,139 The Pantry, Inc. $64,944 Crossroad Ingredients LLC $59,342 Osio International, Inc. $52,377 Univar USA Inc. $50,761 The petition was signed by Nancy B. Huber, chief financial officer. FRONTIER AIRLINES: Posts $1,126,000 Net Income for Q4 2008 ---------------------------------------------------------- Frontier Airlines Holdings, Inc. filed with the Securities Exchange Commission on February 12, 2009, its quarterly report for the period ended December 31, 2008. Frontier reported a consolidated operating profit of $5.6 million and a net profit of $1.1 million. Excluding special items, the Company reported an operating profit of $14.3 million and a net profit of $7.6 million for the quarter. Special items for the quarter included: * non-cash mark-to-market losses on fuel hedge contracts of $8.7 million; * charges of $0.4 million on early extinguishment of debt; and * gain of $2.7 million in reorganization activities, including $8.1 million on the sale of four A319 aircraft and expenses of $5.4 million. Frontier's cash position increased to $69.1 million for the period ending December 2008. The Company realized net proceeds of $44.1 million from the sale of four aircraft during the quarter, which was offset by a decrease in working capital due to the traditionally low booking period at the end of the year. "These results truly buck the industry trends right now," said Frontier President and CEO Sean Menke. "This is also a testament to the sacrifices and hard work put forth by all of our employees. Despite significant competitive pressure and other economic factors, we have been able to reduce our operating expenses, increase revenues and maintain our high quality of service." Financial and restructuring highlights during the quarter include: * For the quarter, mainline unit costs, excluding fuel and a post-retirement curtailment gain in 2007, decreased 4.3 percent to 6.21 cents, despite a 16.0 percent reduction in mainline capacity, a 7.9 percent reduction in stage length and an average fleet utilization decrease of 7.2 percent * For the quarter year-over-year, mainline passenger unit revenue increased by 7.2 percent, and total mainline unit revenue increased by 10.2 percent * Load factor for the quarter improved 3.9 points versus the prior year period * Negotiated and secured long-term concessionary agreements with all represented labor groups * Successfully launched AirFairs, an innovative, customer- friendly fare structure that lets customers choose from one of three fare levels that best meets their specific travel needs * Among the industry leaders in key Department of Transportation performance metrics On February 10, 2009, Matthew Henry, Frontier's vice president and general counsel, cautioned that the Company's Fourth Quarter Report on Form 10-Q for the three months ended December 31, 2008, would be untimely filed. The Debtors were focused with transactions and other matters relating to their Chapter 11 cases, according to Mr. Henry. FRONTIER AIRLINES HOLDINGS, INC., AND SUBSIDIARIES Unaudited Consolidated Balance Sheets As of December 31, 2008 ASSETS CURRENT ASSETS: Cash and cash equivalents $69,055,000 Investment securities 0 Restricted cash and investments 114,683,000 Receivables, net 36,322,000 Prepaid expenses and other assets 18,539,000 Inventories, net 12,631,000 Deposits on fuel hedges 15,590,000 Assets held for sale 743,000 -------------- Total current assets 267,563,000 Property and other equipment, net 612,798,000 Security and other deposits 25,348,000 Aircraft pre-delivery payments 5,133,000 Restricted cash and investments 2,987,000 Deferred loan expenses and other assets 5,430,000 -------------- Total Assets $919,259,000 ============== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities not subject to compromise: CURRENT LIABILITIES: Accounts payable $42,479,000 Air traffic liability 133,005,000 Other accrued expenses 50,598,000 Current portion of long-term debt 0 Pre-delivery payment financing 0 Debtor-in-possession loan 30,000,000 Deferred revenue and other liabilities 28,828,000 -------------- Total current liabilities not subject to compromise 284,910,000 Long-term debt related to aircraft notes 0 Convertible notes 0 Deferred revenue and other liabilities 20,761,000 Other note payable 3,000,000 -------------- Total liabilities not subject to compromise 308,671,000 -------------- Liabilities subject to compromise 543,530,000 -------------- Total Liabilities 852,201,000 ============== STOCKHOLDERS' EQUITY: Preferred stock, no par value, authorized 1,000,000 shares; none issued 0 Common stock, no par value, stated value of $0.001 per share, authorized 100,000,000 shares; 36,945,744 shares issued and outstanding at December 31, 2008 37,000 Additional paid-in capital 196,879,000 Unearned ESOP shares 0 Accumulated other comprehensive loss, net 0 Retained deficit (129,858,000) -------------- Total Stockholders' Equity 67,058,000 -------------- Total Liabilities and Stockholders' Equity $919,259,000 ============== FRONTIER AIRLINES HOLDINGS, INC., AND SUBSIDIARIES Unaudited Consolidated Statement of Operations Three Months Ended December 31, 2008 Revenues: Passenger $282,238,000 Cargo 1,330,000 Other 17,413,000 -------------- Total revenues 300,981,000 Operating expenses: Flight operations 37,847,000 Aircraft fuel 115,186,000 Aircraft lease 28,746,000 Aircraft and traffic servicing 45,280,000 Maintenance 21,932,000 Promotion and sales 21,302,000 General and administrative 15,333,000 Operating expense -- regional partners 0 Post-retirement liability curtailment gain 0 Employee separation and other charges 0 Loss (gains) on sales of assets, net 78,000 Depreciation 9,706,000 -------------- Total operating expenses 295,410,000 -------------- Business interruption insurance proceeds 0 Operating income (loss) 5,571,000 Non-operating income (expense): Interest income 856,000 Interest expense (8,376,000) Loss from early extinguishment of debt (427,000) Other, net 632,000 -------------- Total non-operating expense, net (7,315,000) Income (Loss) before reorganization items and income tax expense (1,744,000) Reorganization expenses (2,651,000) -------------- Income (Loss) before income tax expense 907,000 Income tax expense (219,000) -------------- Net Income (Loss) $1,126,000 ============== FRONTIER AIRLINES HOLDINGS, INC., AND SUBSIDIARIES Unaudited Consolidated Statement of Cash Flow Nine Months Ended December 31, 2008 Cash flows from operating activities: Net Loss ($86,981,000) Adjustments to reconcile net loss to net cash and cash equivalents: Compensation expense under long-term incentive and employee stock ownership plans 1,622,000 Depreciation and amortization 33,590,000 Provisions recorded on inventories 1,133,000 Gains on disposal of equipment and other, net (8,594,000) Mark to market adjustments on derivative gains 16,892,000 Proceeds received from settlement of derivative contracts 10,278,000 Post-retirement reliability curtailment gain 0 Loss on early extinguishment of debt 990,000 Reorganization items 22,646,000 Changes in operating assets and liabilities: Restricted cash and investments (40,707,000) Receivables 18,441,000 Security and other deposits (16,183,000) Prepaid expenses and other assets 7,890,000 Inventories 4,745,000 Other assets (102,000) Accounts payable 11,439,000 Air traffic liability (93,013,000) Other accrued expenses and income tax payable (31,465,000) Deferred revenue and other liabilities 7,002,000 -------------- Net cash used by operating activities before reorganization (140,377,000) Cash flows from reorganization activities: Net cash used by reorganization activities (13,888,000) -------------- Total Net Cash used by operating activities (154,265,000) Cash flows from investing activities: Aircraft lease and purchase deposits made (4,725,000) Aircraft lease and purchase deposits returned 11,485,000 Proceeds from the sale of property and equipment assets held for sale 59,556,000 Sale of short-term investment 8,800,000 Capital expenditures (10,244,000) Proceeds from the sales of aircraft -- reorganization 194,300,000 -------------- Net cash provided by investing activities 259,172,000 Cash flows from financing activities: Net proceeds from issuance of common stock 0 Proceeds from DIP loan (postpetition) 30,000,000 Proceeds from long-term borrowings 0 Extinguishment of long-term borrowings (70,136,000) Principal payments on long-term borrowings (27,843,000) Principal payments on short-term borrowings (3,139,000) Payment of financing fees (2,170,000) Extinguishment of long-term debt -- reorganization item (83,401,000) -------------- Net cash used by financing activities (156,689,000) Net decrease in cash and cash equivalents (51,782,000) Cash and cash equivalents, beginning of period 120,837,000 -------------- Cash and cash equivalents, end of period $69,055,000 ============== Frontier 5th best in On-time Arrivals Frontier Airlines was hailed fifth best in on-time arrivals in 2008, out of 20 carriers in the United States, the Denver Business Journal says, citing a report from the Department of Transportation's Bureau's Transportation Statistics. Although Frontier's on-time records slipped in December 2008, its nationwide on-time arrival rate was 78.98 percent during the year. It also landed second in terms of market share at the Denver International Airport. Top ranking carriers include Hawaiian Airlines, which grabbed the top spot, followed by Southwest Airlines, US Airways and Pinnacle Airlines, Inc. For the full year 2008, the on-time rate increased to 76 percent, compared with 73.4 percent in 2007, the report noted. GENERAL MOTORS: Saturn Dealers will Spin Off Into New Company ------------------------------------------------------------- Kate Linebaugh at The Wall Street Journal reports that Dan Januska, the owner of Saturn of Scottsdale, said that Saturn dealers will spin off from General Motors Corp. into a new firm that will seek to sell third-party vehicles under the Saturn brand. The dealers would work with GM on how to structure the new entity for the next 60 days, WSJ states, citing Mr. Januska. According to WSJ, the dealers have been worried after GM said it needed to restructure the brand as part of plans submitted to the federal government in December 2008. Citing Mr. Januska, WSJ states that Saturn dealers will continue to purchase vehicles from GM for as long as they are produced. Mr. Januska said that the brand would be phased out in a few years, WSJ relates. GM said in a reorganization plan submitted to the government on Tuesday that it will produce new Saturns only for the current product line up which expires in 2011. WSJ quoted GM CEO Rick Wagoner as saying, "It's a good distribution network. If someone comes up with an offer, we're very open to that." WSJ, citing Mr. Januska, relates that under the plan, Saturn dealers would be open to selling vehicles made by Indian or Chinese manufacturers that would be sold as Saturns. "There are not a whole lot of alternatives. Someone is going to see the value of us and I don't know who it will be," the report quoted Mr. Januska 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: Viability Plan Requires Add'l $16.6B Govt. Funding ------------------------------------------------------------------ John D. Stoll, Sharon Terlep, and Alex P. Kellogg at The Wall Street Journal report that General Motors Corp. said that it will need an additional $16.6 billion in financial assistance from the U.S. government. GM, says WSJ, said could run out of money as soon as March if it doesn't get at least some of that funding. GM presented to the United States Department of Treasury on February 17 its reorganization plan detailing its long term viability. The plan, which provides a comprehensive review of key aspects of GM's restructuring, is the first of two status reports required by the loan agreement signed by GM and the U.S. Treasury on December 31, 2008. GM is taking a number of additional actions to reduce costs, streamline its business and improve its competitive position. Marketing and Revenue Improvement In the U.S., GM will focus on its core brands; Chevrolet, Cadillac, Buick, and GMC. Pontiac will serve as a focused brand with fewer entries, within the Buick-Pontiac-GMC channel. GM will have a total of 36 nameplates in 2012, down 25 percent from 2008 levels. The plan also provides additional detail on the Hummer, Saturn and Saab brands. GM expects to make a decision to sell or phase out the Hummer brand by March 31, with a final resolution expected no later than 2010. GM has conducted a strategic review of the global Saab business and has offered it for sale. Given the urgency of stemming sizeable cash demands associated with Saab operations, GM is requesting Swedish government support prior to any sale. The company has developed a specific proposal that would have the effect of capping GM's financial support, with Saab's operations effectively becoming an independent business entity January 1, 2010. While GM hopes to reach agreement with the Swedish government, the Saab Automobile AB subsidiary could file for reorganization as early as this month. GM's dealer count is also projected to be further reduced, from 6,246 in 2008 to 4,700 by 2012, and to 4,100 by 2014. Most of this reduction will take place in metro and suburban markets where dealership overcapacity is most prevalent. The result will be a smaller, but healthier GM dealer network. Technology/Regulation Compliance As indicated in the December 2, 2008 plan, GM is moving ahead aggressively with plans to improve the fuel efficiency of its vehicles and develop a broad range of advanced propulsion technologies. The company is investing significantly in alternative fuel and advanced propulsion technologies in the 2009- 2012 timeframe, supporting the expansion of GM's hybrid offerings and development of the Chevrolet Volt's extended-range electric vehicle technology. Cost Reduction and Operational Actions In order to improve capacity utilization and cost competitiveness, GM has consolidated its manufacturing footprint considerably by closing 12 manufacturing facilities in the U.S. between 2000 and 2008. Given the current very difficult market conditions, GM will close an additional 14 facilities by 2012, five more than were included in the December 2, 2008 plan. Agreements with the UAW concerning several items have been completed and are now being implemented. First, a special attrition program has been negotiated to assist restructuring efforts by reducing excess employment costs through voluntary attrition of the current hourly workforce. Second, the UAW and GM's management have suspended the JOBS program. The program provided full income and benefit protection in lieu of layoff for an indefinite period of time. In addition, GM and the UAW have reached a tentative agreement relative to additional wage and benefit changes. Outside of the U.S., GM has accelerated restructuring plans for its Canadian, European and Asia-Pacific operations, all of which will be funded from sources outside the U.S. Discussions are well advanced with the Canadian Federal and Ontario governments regarding long-term financial assistance to execute the restructuring actions necessary for long-term viability and with the Canadian Auto Workers (CAW) union on achieving competitive labor costs. The CAW has committed to achieving an hourly cost structure that is consistent with what is ultimately negotiated with the UAW. Progress has also been made with the Canadian Federal and Ontario governments toward an agreement focused on maintaining proportional levels of manufacturing in Canada and on providing GMCL with a level of long-term financial assistance that is proportional to the total support provided to GM by the U.S. government. GMCL is continuing dialogue with its unions and the Canadian government with a target to finalize both agreements in March 2009. Europe is a highly competitive environment that is unprofitable for many vehicle manufacturers, and has a relatively costly restructuring environment. GM has engaged its European labor partners to achieve $1.2 billion in cost reductions, which include several possible closures or spinoffs of manufacturing facilities in high cost locations. In addition, GM is restructuring its sales organization to become more brand focused and better optimize its advertising. GM is also in discussions with the German government for operating and balance sheet support. A sustainable strategy for GM's European operations may include support from partnerships with the German government and/or other European governments. The company expects to resolve solvency issues for its European operations prior to March 31, 2009. GM is reconsidering the pace of its expansion in the Asia Pacific region. As such, some of the proposed capacity expansion projects and product programs in the region are no longer financially feasible and will not proceed without financial support from either the respective governments or from other partners. GM is holding discussions with its stakeholders to address the required support. Capitalization Approximately $27 billion in unsecured public liabilities currently on the company's balance sheet will be converted to a combination of new debt and equity, for a net debt reduction of at least $18 billion. Negotiations are progressing with advisors of the ad hoc bondholder committee. Term sheets have been exchanged and due diligence regarding GM's restructuring has commenced. The company anticipates that the bond exchange offer will commence in late March, consistent with requirements in the U.S. Treasury loan documents. Under the term sheet proposal, a substantial majority of the pro-forma equity in GM would be distributed to exchanging bondholders and the UAW VEBA. Discussions with representatives of the UAW VEBA have also been progressing, and due diligence is also proceeding with respect to reaching agreement to convert at least half of future VEBA payments to equity. The UAW is willing to discuss the VEBA situation with government officials prior to signing any such term sheet. Closing of the conversion of VEBA obligations and unsecured debt to equity should be complete in May of this year. Government Funding To complete its aggressive restructuring and fund its ongoing operations amid an uncertain economic environment, GM is requesting the U.S. government to consider funding the company with a combination of secured term loans, revolving credit, and preferred equity. In the December 2 submission, GM indicated that under a U.S. downside volume scenario, the company would need funding support of approximately $18 billion. In addition, GM assumed that the $4.5 billion U.S. secured revolver credit facility would be renewed when it matures in 2011. In the current baseline forecast, near-term industry volumes are similar to the December 2 downside scenario, and so GM's forecast indicates the company will need the $18 billion that was requested in December. In addition, based on current credit market conditions, it cannot be assumed that the company will be able to rollover the $4.5 billion revolver in 2011. Therefore, GM is requesting federal funding support of $22.5 billion under its current baseline industry volume scenario. If the U.S. industry deteriorates further, a scenario depicted in the company's new, lower downside volume scenario with U.S. industry volume of 9.5 million units in 2009 and 11.5 million units in 2010, GM would require further federal funding, estimated currently at an additional $7.5 billion, which could bring total Government support up to $30 billion by 2011. Under the company's baseline outlook, repayment of federal support is expected to begin in 2012. Additional financial support might be required in 2013 and 2014 if GM has to make contributions to our U.S. pension funds. In an update to the December 2, 2008 submission, recent valuations indicate that GM's U.S. pension plans are currently under-funded as of December 31, 2008. At this point, it is premature to conclude whether the company will need to make additional pension contributions, as the funded status of the pension plan is subject to many variables, including asset returns and discount rates. GM is currently analyzing its pension funding strategies. During 2009-2014, GM also is requesting funding support from the governments of Canada, Germany, the United Kingdom, Sweden, and Thailand, and has included an estimate of $6 billion in funding support by 2010 to provide liquidity specifically for GM's operations in these countries. Possible Bankruptcy The plan also discusses the issue of bankruptcy as a potential option for restructuring, concluding it would be a highly risky, extremely costly and time-consuming process. This reaffirms management's position that bankruptcy is not in the best interests of GM or its stakeholders. The overriding risks are the significant impact a bankruptcy would have on the company's revenue stream and the resulting huge debtor-in-possession funding support that would be required from the government, as such funding is not available from traditional sources in today's market conditions. Accordingly, accomplishing GM's restructuring out of court remains by far the best approach for all constituents. WSJ relates that GM believes bankruptcy would be more costly and drawn out than a government-funded restructuring, as it might need as much as $100 billion in financing from the government if it were to go through the traditional bankruptcy process. Details on the plan is available for free at: http://bankrupt.com/misc/GMRestructuringPlan.pdf Projected EBIT Breakeven Point GM's viability plan actions result in projected GM North America (GMNA) earnings before interest and taxes (EBIT) breakeven point of 11.5-12.0 million units in the U.S., compared to the 12.5-13.0 million unit range indicated in the December 2, 2008 plan. The operating and balance sheet improvements outlined in GM's viability plan are forecasted to result in a significant enterprise value and positive net present value, positive adjusted EBIT in 2010 and positive operating cash flow for its North American operations in the same year. Overall adjusted operating cash flows are expected to approach breakeven levels in 2011, and improve to more than $6 billion in the 2012-2014 period, reflecting both the full effect of GM's global restructuring initiatives and recovering industry volumes. Following the steep decline in U.S. industry sales in December 2008 and January 2009, GM responded by further lowering its forecast for 2009 U.S. industry sales to 10.5 million units (57.5 million units globally) for viability planning purposes. These industry planning volumes are more conservative than those being used by most other industry sources. 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: Sichuan Auto Wants to Buy Hummer Vehicle Unit ------------------------------------------------------------- Sichuan Auto Industry Group Co. wants to buy General Motor Corp.'s Hummer sport-utility vehicle unit, Shanghai Daily reports, citing people familiar with the matter. According to Shanghai Daily, GM CEO Rick Wagoner has said that GM was considering options for Hummer, including a sale. Shanghai Daily quoted GM's Shanghai-based spokesperson Henry Wong as saying, "Meetings and discussions with potential investors are ongoing. We will not discuss whom the potential investors are." Citing sources, Bloomberg News relates that Sichuan Auto may pay up to $500 million for the Hummer. The sources said that Sichuan Auto will get financing from state-owned banks, Shanghai Daily states. Shanghai Daily reports that Sichuan Auto sales official Zhou Liya has denied any knowledge of the firm's bidding for Hummer. Bankruptcy Option Josh Mitchell at Dow Jones Newswires relates that Rep. Sander Levin said on Monday that the government has told GM to address the possibility of firm's eventually filing for bankruptcy protection in its progress report, which would also describe will restructure to ensure its long-term viability. The report quoted Rep. Levin as saying, "They've been asked to address the issue of bankruptcy in their plan but not to have that as an alternative plan. That's my understanding." According to Dow Jones, Rep. Levin said that he and other auto- industry allies in the Congress believe that a bankruptcy filing by an automaker would be disastrous to the auto industry and the economy. GM Won't Leave Saab Unprotected, Says Swedish Gov't Citing a Swedish senior government official, Love Liman at Reuters reports that the Swedish government is confident that GM won't leave its Swedish carmaker Saab unprotected under the terms of a restructuring plan it will submit to the U.S. government. Reuters relates that the Swedish government is offering GM state support as the company plans to sell its Saab unit as part of a possible Chapter 11 bankruptcy filing that would create a new firm. According to Reuters, the Swedish government is in talks with GM to stop the sale. According to Reuters, Swedish Industry Ministry state secretary Joran Hagglund said that he didn't expect GM's restructuring plan to include a proposal for Saab and other non-core assets to be liquidated or sold under protection of a bankruptcy court. Mr. Hagglund, Reuters says, has denied a report from public service broadcaster SVT that talks between the government and GM had collapsed. "It is of course the case that GM has a fair bit on its hands back home, which affects how much time and effort they can put into this. But we are continuing the discussions and we will have to see how they formulate the plan that they are to present tomorrow [Tuesday]," Reuters quoted Mr. Hagglund as saying. U.S. Gov't Urged to Push Carmakers Into Bankruptcy Michael J. de la Merced at The New York Times relates that Edward I. Altman, a Max L. Heine professor of finance at New York University's Stern School of Business, is calling for the Obama administration to push the automakers into bankruptcy, which could ensure that taxpayers remain first in line for repayment. Citing a person familiar with the matter, The NY Times states that the Treasury Department has hired Rothschild, and two law firms, Cadwalader, Wickersham & Taft and Sonnenchein, Nath & Rosenthal, as advisers to ensure that taxpayers would be the first ones to get repaid. According to The NY Times, Mr. Altman proposes that the government force GM into bankruptcy, then provide debtor-in-possession financing for the firm, probably through a bank or finance firm like General Electric's GE Capital. 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 $170.3 billion, resulting in a stockholders' deficit of $59.9 billion. * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on General Motors Corp. to 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. S&P said that the outlook is negative. Fitch Ratings, as reported in the Troubled Company Reporter on Nov. 11, 2008, placed the Issuer Default Rating of General Motors on Rating Watch Negative as a result of the company's rapidly diminishing liquidity position. Given the current liquidity level of 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. GEORGE HOOVER: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: George F. Hoover dba Ivy Land Company 1945 East Day Island Blvd. West Tacoma, WA 98466 Bankruptcy Case No.: 09-40939 Chapter 11 Petition Date: February 13, 2009 Court: United States Bankruptcy Court Western District of Washington (Tacoma) Judge: Paul B. Snyder Debtor's Counsel: William L. Beecher, Esq. Beecher & Conniff 1703-C Dock St. Tacoma, WA 98402 Tel: (253) 627-0132 Email: billbeecher@beecherandconniff.com Total Assets: $2,609,183 Total Debts: $3,310,871 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/wawb09-40939.pdf GOTTSCHALKS INC: Proposes March 19 Auction for All Assets --------------------------------------------------------- Gottschalks Inc. asks the United States Bankruptcy Court District of Delaware to approve proposed bidding procedures for the sale of substantially of its assets including the assumption and assignment of lease and executor contracts. The sale of all of the Debtor's assets is subject to competitive bidding and auction. The Debtor proposes March 12, 2009, as deadline for interested buyers to submit their offers. The Debtor wants to hold the auction on March 17, 2009, at 10:00 a.m., at the offices of Richards, Layton & Finger, P.A., at One Rodney Square, 920 North King Street in Wilmington, Delaware. The Debtor requests a hearing to take place on March 19, 2009, at 2:00 p.m., to consider approval of the sale. The Debtor assures the Court that the proposed sale procedures will enable it to conduct the auction in a fair and controlled manner. The auction process is essential to maintain and maximize the value of its assets, the Debtor points out. The sale of the Debtor's assets is expected to close by March 27, 2009. Bloomberg's Bill Rochelle notes that the financing for Gottschalks' reorganization requires selling the assets within 65 days of the Chapter 11 filing. A full-text copy of the Debtor's sale bidding procedures is available for free at: http://ResearchArchives.com/t/s?398e A full-text copy of the Debtor's executory contracts is available for free at: http://ResearchArchives.com/t/s?398f A full-text copy of the Debtor's sale guidelines is available for free at: http://ResearchArchives.com/t/s?3990 About Gottschalks Inc. Headquartered in Fresno, California, Gottschalks Inc. -- http:// www.gottschalks.com -- runs the Gottschalks regional department store chain, currently operating 58 department stores and three specialty apparel stores in six western states, including California (38), Washington (7), Alaska (5), Oregon (5), Nevada (1) and Idaho (2). Gottschalks offers better to moderate brand- name fashion apparel, cosmetics, shoes, accessories and home merchandise. The Debtor offers corporate information and selected merchandise on its Web site. The Company filed for Chapter 11 protection on January 14, 2009 (Bankr. D. Del. Case No. 09-10157). O'Melveny & Myers LLP represents the Debtor in its Chapter 11 case. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., will serve as the Debtors' co- counsel. The Debtors selected Kurtzman Carson Consultants LLC as its claims agent. The U.S. Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $288,438,000 in total assets and $197,072,000 in total debts as of Jan. 3, 2009. GOTTSCHALKS INC: Committee Taps Cooley Godward as Lead Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors of Gottschalks Inc. asks the Hon. Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware for permission to retain Cooley Godward Kronish LLP as its lead counsel. The firm will: a) attend the meetings of the Committee; b) review financial information furnished by the Debtor to the Committee; c) negotiate a budget and the use of cash collateral and availability provided by DIP financing; d) review and investigate the liens of purported secured parties; e) confer with the Debtor's management and counsel; f) coordinate efforts to sell or reorganize assets of the Debtor in a manner that maximizes the value for unsecured creditors; g) review the Debtor's schedules and statement of financial affairs and business plan ; h) advise the Committee as to the ramifications regarding all of the Debtor's activities and motions before this Court; i) file appropriate pleadings on behalf of the Committee; j) review and analyze the Debtor's financial advisor's work product and reports to the Committee; k) provide the Committee with legal advice in relation to this case; 1) prepare various applications and memoranda of law submitted to the Court for consideration and handle all other matters relating to the representation of the Committee that may arise; m) assist the Committee in negotiations with the Debtor and other parties in interest on an exit strategy for this case; and n) perform such other legal services for the Committee as may be necessary or proper in these proceedings. The firm's professionals and their compensation rates are: Professional Designation Hourly Rate ------------ ----------- ----------- Lawrence C. Gottlieb, Esq. Partner $880 Jay R. Indyke, Esq. Partner $785 Gustavo Ordonez, Esq. Associate $555 Michael A. Klein, Esq. Associate $485 Lesley Kroupa, Esq. Associate $390 Nicholas M. Santoiemma, Esq. Associate $295 Lawrence C. Gottleib, Esq., attorney of the firm, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About Gottschalks Headquartered in Fresno, California, Gottschalks Inc. -- http://www.gottschalks.com-- is a regional department store chain, currently operating 58 department stores and three specialty apparel stores in six western states, including California (38), Washington (7), Alaska (5), Oregon (5), Nevada (1) and Idaho (2). Gottschalks offers better to moderate brand- name fashion apparel, cosmetics, shoes, accessories and home merchandise. The company filed for Chapter 11 protection on January 14, 2009 (Bankr. D. Del. Case No. 09-10157). O'Melveny & Myers LLP represents the Debtor in its restructuring efforts. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., will serve as the Debtors' co-counsel. The Debtors selected Kurtzman Carson Consultants LLC as claims agent. The U.S. Trustee for Region 3 appointed seven creditors serve on an Official Committee of Unsecured Creditors. In its bankruptcy petition, Gottschalk listed $288,438,000 in total assets and $197,072,000 in total debts as of Jan. 3, 2009. GSI GROUP: Gets Extension From Nasdaq to Regain Compliance ---------------------------------------------------------- GSI Group Inc. said The Nasdaq Stock Market has granted to the Company an extension until May 4, 2009, to regain compliance with Nasdaq listing standards. On November 13, 2008, the Company received a letter from Nasdaq indicating that the Company was not in compliance with Nasdaq Marketplace Rule 4310(c)(14), due to the failure to timely file its Quarterly Report on Form 10-Q for the three month period ended September 26, 2008. As requested by Nasdaq, on January 12, 2009, the Company timely submitted to Nasdaq a compliance plan, which was subsequently supplemented on February 6, 2009, outlining the Company's planned actions to regain compliance with the Rule. Based on Nasdaq's further review of the plan, on February 11, 2009, Nasdaq gave the Company notice indicating that it has granted the Company an extension until May 4, 2009, to file its Quarterly Report with the Securities and Exchange Commission and regain compliance with the Rule. Failure to file the Quarterly Report on or prior to May 4, 2009 could result in the Company's common shares being delisted from Nasdaq. The Company's Audit Committee is working diligently to complete its previously announced review of sales transactions in the Company's Semiconductor Systems Segment, along with other sales transactions that contain arrangements with multiple deliverables, for fiscal years 2006, 2007 and 2008 so that the Company can complete the preparation and filing of its Quarterly Report . In the meantime, the Company's securities will continue to be listed on Nasdaq. About GSI Group Based in Bedford, Massachusetts, GSI Group Inc. supplies precision technology to the global medical, electronics, and industrial markets and semiconductor systems. GSI Group Inc.'s common shares are listed on Nasdaq (GSIG). HARRAH'S ENTERTAINMENT: Almost Bankrupt, Bondholders Sue -------------------------------------------------------- Oskar Garcia at The Associated Press reports that bondholders S. Blake Murchison and Willis Shaw have filed a lawsuit against Harrah's Entertainment Inc. and its board of directors in the U.S. District Court in Delaware. According to The AP, the plaintiffs claimed that Harrah's Entertainment is on the verge of bankruptcy and debt default and that the firm would leave them "in the lurch." Court documents say that the complainants' attorney, Joseph A. Rosenthal, said, "In an effort to ensure that only a limited class of individuals and entities reap the rewards of their debt investments in Harrah's to the detriment of other investors, defendants have completed bond tender offers that benefit those select individuals an entities to the exclusion of all others." Harrah's Entertainment said in a regulatory filing last week that it asked for $740 million from its banks under what remains of its $2 billion secured credit facility, according to The AP. The report says that Harrah's Entertainment also said that it would cut manager salaries by 5% and suspend company matches for employee retirement benefits. "Current economic conditions require that we act with speed and resolve. It is our hope that in the long term this action will benefit the stability of the company, and as a result all the affected employees individually," the company said in a statement. Harrah's Entertainment said that it hoped to reconsider those decisions once the economy strengthens, The AP states. About Harrah's Entertainment Las Vegas, Nevada-based Harrah's Entertainment, Inc. -- http://www.harrahs.com-- operates nearly 40 casinos across the United States, primarily under the Harrah's(R), Caesars(R) and Horseshoe(R) brand names; Harrah's also owns the London Clubs International family of casinos and the World Series of Poker(R). Private equity firms Apollo Global Management and TPG Capital LP acquired Harrah's in January for $31 billion. At Sept. 30, 2008, the company's consolidated condensed balance sheets showed total assets of $37.0 billion, total liabilities of $33.4 billion and stockholders' equity of $3.6 billion. For three months ended Sept. 30, 2008, the company reported net loss of $129.7 million compared with net income of $244.4 million for the same period in the previous year. For nine months ended Sept. 30, 2008, the company posted net loss of $100.9 million compared with net income of $667.2 million for the same period in the previous year. The company's cash and cash equivalents, including funds borrowed during the quarter under its credit facilities, totaled approximately $1.0 billion at Sept. 30, 2008, compared to $654.7 million at Sept. 30, 2007. * * * As reported by the Troubled Company Reporter on Jan. 6, 2009, Moody's Investors Service raised Harrah's Entertainment, Inc.'s Probability of Default rating to Caa1/LD from Ca reflecting the closing of HET's debt exchange transaction. Moody's affirmed Harrah's other ratings and adjusted the loss given default assessments to reflect the new post-debt exchange capital structure. In approximately three business days, Moody's will remove the LD designation from the PD rating. The TCR reported on January 2, 2009, that Standard & Poor's Ratings Services said it raised its corporate credit rating on Harrah's Entertainment Inc. and its subsidiary, Harrah's Operating Co. Inc. to 'B-' from 'SD'. At the same time, S&P raised its issue-level rating on the senior unsecured and subordinated debt issues of HET's subsidiaries to 'CCC' from 'D'. The recovery rating on these securities remains at '6', indicating S&P's expectation for negligible (0% to 10%) recovery for lenders in the event of a payment default. The rating outlook is negative. HAWAIIAN TELCOM: Wants Plan Exclusivity Until July 30 ----------------------------------------------------- Hawaiian Telcom Communications Inc. asks the U.S. Bankruptcy Court for the District of Hawaii to extend its exclusive period to file a Chapter 11 plan until July 30. Bloomberg's Bill Rochelle said this is the first request for an extension by Hawaiian Telcom. The proposal is scheduled for hearing on March 12. The exclusivity motion, according to Mr. Rochelle, indicates that the Company has been working "to address the myriad of creditor concerns" while continuing "their analysis of restructuring alternatives." Based in Honolulu, Hawaii, Hawaiian Telecom Communications, Inc. -- http://www.hawaiiantel.com/-- operates a telecommunications company, which offers an array of telecommunications products and services including local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. The company and seven of its affiliates filed for Chapter 11 protection on Dec. 1, 2008 (Bankr. D. Del. Lead Case No. 08- 13086). As reported by the Troubled Company Reporter on December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware approved the transfer of the Chapter 11 cases to the U.S. Bankruptcy Court for the District of Hawaii before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005). Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard Freres & Co. LLC as investment banker; Zolfo Cooper Management LLC as business advisor; Deloitte & Touche LLP as independent auditors; and Kurztman Carson Consultants LLC as notice and claims agent. An official committee of unsecured creditors has been appointed in the case. The committee is represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii. When the Debtors filed for protection from their creditors, they listed total assets of $1,352,000,000 and total debts of $1,269,000,000 as of Sept. 30, 2008. Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Hawaiian Telcom Communications, Inc. and seven of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) HCA INC: Peter Stavros Resigns; Kenneth Freeman Joins Board ----------------------------------------------------------- On February 6, 2009, Peter M. Stavros notified the Board of Directors of HCA Inc. that he would resign from the Company's Board of Directors effective immediately. In connection with the resignation of Mr. Stavros from the Company's Board of Directors, on February 6, 2009, the Company's Board of Directors appointed Kenneth W. Freeman to serve as a member of the Company's Board of Directors effective immediately. Mr. Freeman will serve on the Company's Patient Safety and Quality of Care Committee. Mr. Freeman has been a member of the general partner of Kohlberg Kravis Roberts & Co. LLP since 2007 and joined the firm as Managing Director in May 2005. From May 2004 to December 2004, Mr. Freeman was Chairman of Quest Diagnostics Incorporated, and from January 1996 to May 2004, he served as Chairman and Chief Executive Officer of Quest Diagnostics Incorporated. From May 1995 to December 1996, Mr. Freeman was President and Chief Executive Officer of Corning Clinical Laboratories, the predecessor company to Quest Diagnostics. Prior to that, he served in various general management and financial roles with Corning Incorporated. Mr. Freeman currently serves as a director of Accellent, Inc. and Masonite Corporation. Mr. Freeman was appointed as a director to fill the vacancy created by Mr. Stavros' resignation pursuant to the Amended and Restated Limited Liability Company Agreement of Hercules Holding II, LLC, which gives KKR the right to appoint three managers to the Company's Board of Directors. About HCA Inc. Headquartered in Nashville, Tennessee, HCA Inc. -- http://www.hcahealthcare.com/-- is the nation's leading provider of healthcare services. As of June 30, 2008, HCA operated 169 hospitals and 107 freestanding surgery centers, including eight hospitals and eight freestanding surgery centers operated through equity method joint ventures. * * * As reported in the Troubled Company Reporter on May 23, 2008, Fitch Ratings affirmed HCA Inc.'s Issuer Default Rating at 'B'; Secured bank credit facility at 'BB/RR1'; and Senior unsecured notes at 'CCC+/RR6'. The TCR also reported on January 8, 2009, that Participations in a syndicated loan under which HCA Inc. is a borrower traded in the secondary market at 77.05 cents-on-the-dollar during the week ended January 2, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 3.11 percentage points from the previous week, the Journal relates. HCA Inc. pays interest at 225 points above LIBOR. The bank loan matures on November 6, 2013. The bank loan carries Moody's Ba3 rating and Standard & Poor's BB rating. HCA INC: Offering $300 Million Senior Secured Second Lien Notes --------------------------------------------------------------- On February 11, 2009, HCA Inc. said it intends to offer to sell $300 million aggregate principal amount of senior secured second lien notes due 2017. HCA intends to use the net proceeds from the offering to repay existing indebtedness, which may include borrowings under HCA's term loan, revolving and asset-based senior secured credit facilities. To the extent that proceeds from the offering are not used to repay obligations under HCA's senior secured credit facilities, such proceeds may used to repay other existing senior unsecured indebtedness. The Notes have not been registered under the Securities Act of 1933, as amended, and, unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws. HCA will seek amendments to its asset-based revolving credit facility and its term loan and revolving credit facilities and related documentation to permit, among other things, HCA to incur additional indebtedness secured by a lien that ranks equally with the lien securing the term loan and revolving credit facilities, so long as such additional indebtedness is used to repay other indebtedness secured on a similar basis. There is no assurance that HCA will obtain any of these amendments or certainty regarding the cost or terms that will be required to obtain such amendments. Headquartered in Nashville, Tennessee, HCA Inc. -- http://www.hcahealthcare.com/-- is the nation's leading provider of healthcare services. As of June 30, 2008, HCA operated 169 hospitals and 107 freestanding surgery centers, including eight hospitals and eight freestanding surgery centers operated through equity method joint ventures. * * * As reported in the Troubled Company Reporter on May 23, 2008, Fitch Ratings affirmed HCA Inc.'s Issuer Default Rating at 'B'; Secured bank credit facility at 'BB/RR1'; and Senior unsecured notes at 'CCC+/RR6'. The TCR also reported on January 8, 2009, that Participations in a syndicated loan under which HCA Inc. is a borrower traded in the secondary market at 77.05 cents-on-the-dollar during the week ended January 2, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 3.11 percentage points from the previous week, the Journal relates. HCA Inc. pays interest at 225 points above LIBOR. The bank loan matures on November 6, 2013. The bank loan carries Moody's Ba3 rating and Standard & Poor's BB rating. HRP MYRTLE: Coastal Entertainment Wants Park, Tries to Block Sale ----------------------------------------------------------------- Joel Allen at Carolinalive.com reports that Coastal Entertainment, LLC, has tried to block the sale of HRP Myrtle Beach Holdings LLC's Hard Rock Park to FPI MB Entertainment, LLC. According to court documents, Coastal Entertainment said that they have the money on hand to buy Hard Rock Park. As reported by the Troubled Company Reporter on February 12, 2009, the Chapter 7 trustee of HRP Myrtle, taking back his earlier proposal to abandon Hard Rock Park after he received a $25 million bid for the theme park, filed a motion before the U.S. Bankruptcy Court for the District of Delaware seeking authority to sell the park on February 17. FPI MB said it would reduce the price by $1 million if the sale wouldn't be completed by February 20. The price would drop an additional $50,000 for every other day the closing is delayed. FPI MB Entertainment has put down a $2.3 million down payment for Hard Rock and is hoping to close the sale by February 20, if possible. Carolinalive.com relates that Coastal Entertainment claimed that it hasn't been given the opportunity to negotiate with the bankruptcy trustee, or submit its own higher and better offer. According to court documents, Coastal Entertainment's bid isn't contingent on financing. The sale to Coastal Entertainment could be able to close the sale immediately, court documents say. A group led by local water park owner Mark Lazarus has also expressed interest in acquiring Hard Rock Park but hasn't submitted a bid, Carolinalive.com reports. Mr. Lazarus said that he has no idea who Coastal Entertainment is, but he's trying to find out, states the report. Hard Rock International, Carolinalive.com relates, has also filed an objection to the sale. According to the report, Hard Rock International wants to make sure whoever buys the park won't be able to keep the Hard Rock name. Based in Myrtle Beach, South Carolina, HRP Myrtle Beach Holdings, LLC -- owns and operates Hard Rock Park, a rock-n-roll theme park in Myrtle Beach, South Carolina, under a long-term license agreement with Hard Rock Cafe International (USA), Inc. The company and six of its affiliates filed for Chapter 11 protection on Sept. 24, 2008 (Bankr. D. Del. Lead Case No. 08-12193). Steven Goodwin will serve as the Debtors' chief executive officer. The U.S. Trustee for Region 3 has not appointed creditors to serve on an Official Committee of Unsecured Creditors. Richards, Layton & Finger represents the Debtors as counsel. Dorsey & Whitney LLP represents the Officiala Committee of Unsecured Creditors as counsel. When the Debtors filed for protection from their creditors, they listed assets and debts of between $100 million and $500 million each. The case was converted to liquidation proceedings under Chapter 7 in January 2009. ICFQ DESARROLLOS: Court OKs Banco Bilbao-Backed Case Dismissal -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Puerto Rico approved on Feb. 6, 2009, the joint motion of ICFQ Desarrollos Carraizo, Inc., and creditor Banco Bilbao Vizcaya Argentaria Puerto Rico ("BBVA") for the dismissal of the Debtor's Chapter 11 case. In their motion, dated Jan. 29, 2009, the Debtor and BBVA told the Court that they have reached an agreement to settle all controversies between them, including BBVQ's claim for collection of money and mortgage foreclosure, the Debtor's counterclaim against BBVA, both of which were filed before the Court of First Instance of Puerto Rico, and the relief of stay pending in the Bankruptcy Court. Pursuant to the terms of the settlement, the parties agreed that the dismissal be with a prohibition for the Debtor to file any subsequent petition for relief under the Bankruptcy Code for a period of 7 months from the entry of the order of dismissal. Notice was given to the five creditors in the Debtor's bankruptcy case and the U.S. Trustee, and there were no objections received. Per order of the Court, the Debtor is enjoined, under pain of civl contempt, from filing another petition for Chapter 11 protection in any court with subject matter and personal jurisdiction for the next seven months. Based Caguas, Puerto Rico, real estate developer ICFQ Desarrollos Carraizo, Inc., filed for Chapter 11 protection on July 3, 2008 (Bankr. D. P.R. Case No. 08-04351). Charles A. Cuprill, P.S.C., Law Offices, serves as the Debtor's bankruptcy counsel. When the Debtor filed for protection from its creditors, it listed estimated assets of $55,985,918 and debts of $3,687,843. INCENTRA SOLUTIONS: Wants Epiq as Claims and Solicitation Agent --------------------------------------------------------------- Incentra Solutions, Inc., and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the District of Delaware to employ Epiq Bankruptcy Solutions LLC as official claims and solicitation agent of the Court. Epiq will: i) perform certain noticing functions; ii) assist the Debtors in analyzing and reconciling proofs of claim filed against the Debtors' estates; and iii) assist the Debtors in balloting in connection with any proposed Chapter 11 plan. Additionally, Epiq will mail the Debtors' disclosure statement, the plan and ballots and maintain and tally ballots in connection with the voting of the plan. Daniel C. McElhinney, executive director of Epiq Bankruptcy Solutions LLC, tells the Court that Epiq was paid a $25,000 retainer. There are no amounts owed to Epiq as of the petition date Mr. McElhinney assures the Court that Epiq is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Incentra Solutions, Inc. Headquartered in Boulder, Colorado, Incentra Solutions, Inc. http://www.incentra.com/-- provides information technology services. The Debtor and its debtor-affiliates filed for Chapter 11 protection on Feb. 4, 2009, (Bankr. D. Del. Lead Case No.: 09- 10370) Pachulski Stang Ziehl & Jones LLP represents the Debtors in their restructuring efforts. The Debtors listed estimated assets of $92,494,615 and estimated debts of $80,301,104. IMPLANT SCIENCES: Signs New 3-Year Employment Pact With G. Bolduc ----------------------------------------------------------------- The Troubled Company Reporter reported on Jan 22, 2009, that the Board of Directors of Implant Sciences Corporation appointed Glenn D. Bolduc as the President and Chief Executive Officer, and a director, of the Company, effective January 1, 2009. Mr. Bolduc has served as the Company's Chief Financial Officer since July 2008, a position that Mr. Bolduc continues to hold. On February 6, 2009, the Company entered into a new three-year employment agreement with Mr. Bolduc pursuant to which Mr. Bolduc receives a base salary of $275,000 per year, commencing as of January 1, 2009. After the third year, the agreement will automatically renew for additional one-year periods unless notice of non-renewal is given by either party. The Company may terminate the agreement at any time without cause, on 30 days' prior written notice. The agreement, however, provides for payment of 12 months' salary and a pro rata portion of any bonus compensation earned during the year of termination, as well as the continuation of certain benefits, as separation payments in the event that Mr. Bolduc's employment is terminated by the Company without "cause" or Mr. Bolduc resigns for "good reason". Mr. Bolduc's base salary is subject to annual review, and any increases will be made in the discretion of the Board of Directors upon the recommendation of the Compensation Committee. The agreement also provides for Mr. Bolduc to be eligible to receive incentive compensation in an amount of up to $137,000 for the fiscal year ending June 30, 2009, upon the achievement of certain performance milestones established by the Board of Directors. Incentive compensation, if any, for subsequent fiscal years will be based on performance milestones to be established by mutual agreement between the Company and Mr. Bolduc within 60 days after the commencement of each such fiscal year. In connection with his new employment agreement, Mr. Bolduc has been granted an incentive option under the Company's 2004 Stock Option Plan to purchase 680,000 shares of the Company's common stock, par value $.10 per share, with an exercise price of $.17 per share. The option vests in equal annual installments over a three-year period commencing on January 1, 2010. The right to exercise the option will accelerate in full immediately prior to any transaction or series of sequenced events in which all or substantially all of the Company's assets or common stock are sold to or merged with a third party or third parties or in the event that Mr. Bolduc's employment is terminated by the Company without cause or Mr. Bolduc resigns for good reason. A full-text copy of Glenn Bolduc's Employment Agreement is available for free at: http://researcharchives.com/t/s?3995 About Implant Sciences Wakefield, Massachusetts-based Implant Sciences Corporation (NYSE Alternext US: IMX) -- http://www.implantsciences.com/-- develops, manufactures and sells sophisticated sensors and systems for the Security, Safety and Defense industries. The Company has developed proprietary technologies used in its commercial portable and bench-top explosive trace detection systems which ship to a growing number of locations domestically and internationally. Going Concern Doubt UHY LLP on Oct. 14, 2008, expressed substantial doubt about Implant Sciences Corporation's ability to continue as a going concern after auditing the company's consolidated financial statements for the fiscal year ended June 30, 2008 and 2007. The auditing firm pointed to the company's recurring losses from operations. At Sept. 30, 2008, the company's balance sheet showed total assets of $13,681,000, total liabilities of $11,268,000 and stockholders' equity of $2,413,000. The TCR reported on Feb. 9, 2009, that Implant Sciences Corporation received on Feb. 2, a notice from the NYSE Alternext US, LLC indicating that the Exchange intends to initiate proceedings to delist the Company's common stock. The Company has appealed this determination and requested an oral hearing before the Exchange's listing qualifications panel. ILLINOIS POWER: Moody's Affirms Corporate Rating at Ba1 ------------------------------------------------------- Moody's Investors Service affirmed the ratings of Ameren Corporation (Baa3 Issuer Rating); Union Electric Company (d/b/a AmerenUE, Baa2 Issuer Rating); AmerenEnergy Generating Company (Baa3 senior unsecured); 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). The rating outlook of Ameren and all of its subsidiaries is stable. The ratings affirmation reflects Moody's view that Ameren's announcement on Friday that it was reducing its common dividend by 39% is a conservative, prudent, and credit positive action that will conserve cash and support financial coverage metrics. It will also better position the company to manage increasingly challenging business and credit market conditions for utilities going forward. Ameren, like many other investor owned utilities, has experienced higher operating and maintenance costs and increased environmental capital spending requirements in recent years. Moody's has cited Ameren's high dividend payout ratio as an credit constraining factor that has contributed to high levels of negative free cash flow and increased external financing needs at a time when financing costs have increased significantly. Ameren has indicated that its new dividend payout, which is more in line with average dividend payout levels in the utilities industry, will allow the company to conserve approximately $215 million of cash annually, reducing negative free cash flow and external debt financing needs considerably. The more conservative dividend payout should also help facilitate the renewal of Ameren's bank credit facilities, which include two $500 million facilities maturing at its Illinois utility subsidiaries on January 14, 2010 and a $1.15 billion credit facility maturing at the parent company on July 14, 2010. Although Ameren has been highly reliant on these credit facilities to finance working capital and capital expenditure needs in recent years, the company completed financings of $400 million at AmerenIP and $150 million at AmerenCILCO in the fourth quarter of 2008, reducing draws under the Illinois bank facilities materially. The cash conserved as a result of the dividend reduction should continue to reduce reliance on these bank credit facilities going forward and will likely be viewed favorably by banks considering renewing or entering into new facilities with Ameren and its subsidiaries, which is important considering currently constrained bank credit market conditions. The stable outlook on Ameren and its subsidiaries reflects recently constructive rate case outcomes at its utility subsidiaries, including the approval of a fuel adjustment clause at AmerenUE; the improving regulatory environments for investor owned utilities in both Illinois and Missouri; and Moody's expectation that financial and cash flow coverage metrics should remain adequate to maintain current rating levels. Moody's notes that the recent dividend reduction is supportive of these stable ratings outlooks and provides Ameren and its subsidiaries additional cushion at current rating levels. Negative rating action would still be considered if Ameren and its utilities do not enter into adequate liquidity arrangements well in advance of their current bank credit facility expiration dates in January and July of 2010, although this process should be facilitated by the dividend cut. 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; -- AmerenEnergy Generating Company's Baa3 senior unsecured debt; -- 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; -- CILCORP Inc.'s Corporate Family Rating at Ba1 and senior unsecured debt at Ba2 (LGD5, 74%); -- Central Illinois Light Company's Issuer Rating at Ba1, senior secured debt at Baa2 (LGD2, 19%) and preferred stock at Ba1 (LGD 4, 63%). 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 materially. 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. The last rating action on Ameren, Union Electric, Central Illinois Public Service, CILCORP, Central Illinois Light, and Illinois Power was on January 29, 2009, when the ratings were affirmed and the rating outlooks of Central Illinois Public Service, CILCORP, Central Illinois Light, and Illinois Power were changed to stable from positive. The last rating action on AmerenEnergy Generating Company was on August 13, 2008, when the rating was downgraded to Baa3 from Baa2. 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. INCENTRA SOLUTIONS: Wants Karl Reed Guest as Special Counsel ------------------------------------------------------------ Incentra Solutions, Inc., and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the District of Delaware to employ Karl Reed Guest as special transactional and operations counsel. Mr. Guest will render these services for the Debtors: a) general transactional matters; b) sales and customer contracts; c) vendor contracts; d) human resources; e) corporate governance; f) non-bankruptcy compliance with filing and reporting requirements; g) negotiation and preparation of any purchase agreement for the Debtors or the Debtors' assets; h) general review and assistance in compiling Debtors' informations required by general bankruptcy counsel; and i) other legal services as may be specifically directed by the Debtors from time to time. Mr. Guest, the sole practitioner in the Law Offices of Karl Reed Guest, tells the Court that his hourly rate is $375. Mr. Guest adds that he received a $50,000 retainer. To the best of the Debtors' knowledge, Karl Reed Guest is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Incentra Solutions Headquartered in Boulder, Colorado, Incentra Solutions, Inc. http://www.incentra.com/-- provides information technology services. The Debtor and its debtor-affiliates filed for Chapter 11 protection on Feb. 4, 2009, (Bankr. D. Del. Lead Case No.: 09- 10370). Pachulski Stang Ziehl & Jones LLP represents the Debtors in their restructuring efforts. In their bankruptcy petition, the Debtors listed assets of $92,494,615 and debts of $80,301,104. INCENTRA SOLUTIONS: Wants Pachulski Stang as Bankruptcy Counsel --------------------------------------------------------------- Incentra Solutions, Inc., and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the District of Delaware to employ Pachulski Stang Ziehl & Jones LLP as counsel. PSZ&J will: a) provide legal advice with respect to the Debtors' powers and duties as debtors in possession in the continued operation of their business and management of their property; b) prepare in behalf of the Debtors necessary applications, motions, answers, orders and other legal papers; c) appear in Court on behalf of the Debtors and in order to protect the interests of the Debtors before the Court; d) prepare and pursue confirmation of a plan and approval of a disclosure statement; and e) perform all other legal services for the Debtors that may be necessary and proper in these proceedings. The Debtors proposes to pay PSZ&J compensation on a hourly basis, plus reimbursement of actual, necessary expenses and other charges incurred. The principal lawyers and paralegals designated to represent the Debtors and their standard hourly rates are: David J. Baton $695 Jeffrey N. Pomerantz $675 John D. Fiero $625 Bruce Grohsgal $595 Joshua M. Fried $535 Werner Disse $495 Jonathan J. Kim $495 Patricia Jeffries $225 Mr. Grohsgal tells the Court that PSZ&J received $400,000 in connection with its prepetition representation of the Debtors. PSZ&J is current as of the petition date, but has not yet completed a final reconciliation of its prepetition fees and expenses as of the petition date. Upon the final reconciliation of the amount actual expended prepetition, any balance remaining from the payment will be credited to the Debtors and utilized as PSZ&J retainer to apply to postpetition fees and expenses. Mr. Grohsgal assures the Court that PSZ&J is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Grohsgal can be reached at: Pachulski Stang Ziehl & Jones LLP 919 N. Market Street, 16th Floor Wilmington, DE 19899-8705 Tel: (302) 778-6403 Fax: (302) 652-4400 About Incentra Solutions Headquartered in Boulder, Colorado, Incentra Solutions, Inc. http://www.incentra.com/-- provides information technology services. The Debtor and its debtor-affiliates filed for Chapter 11 protection on Feb. 4, 2009, (Bankr. D. Del. Lead Case No.: 09- 10370). Pachulski Stang Ziehl & Jones LLP represents the Debtors in their restructuring efforts. In their bankruptcy petition, the Debtors listed assets of $92,494,615 and debts of $80,301,104. INTEGRATED MEDIA: Board Abandons Effort to Convert Debt to Equity ----------------------------------------------------------------- On February 11, 2009, the board of directors of Integrated Media Holdings, Inc., resolved to abandon its one year long effort to convert substantial preexisting debt to equity and to increase the number of shares the corporation is authorized to issue in order to facilitate growth financing and potential acquisitions because of repeated comments from the Securities and Exchange Commission staff in response to the corporation's information statement. As a result of the change, the board of directors further resolved to amend its pending information statement on Form 14C to reflect only the reincorporation from Delaware to Nevada and the resulting change of corporate name to Arrayit Corporation. All the original terms and conditions of the corporation's existing debt and the number of shares the corporation is authorized to issue will remain unchanged. Headquartered in Sunnyvale, Calif., Integrated Media Holdings Inc. (OTC BB: IMHI) -- http://www.arrayit.com/-- is a holding company. Through its merger with TeleChem International Inc., the company has undertaken a new strategic and business direction to become primarily a biotechnology company. TeleChem's business activities are in the life sciences, chemical trading and disease diagnostics areas. TeleChem's chemicals division provides customers with the raw materials required for plastics, water soluble fertilizers, and alternative fuels. TeleChem entered the biotechnology sector with the creation of the Arrayit(R) Life Sciences Division in 1996. Because of the public interest in the Human Genome Project and microarray technology, TeleChem focused on microarray products and services for the research, pharmaceutical and diagnostics markets. Going Concern Doubt Malone & Bailey, PC, in Houston, expressed substantial doubt about Integrated Media Holdings Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's recurring losses, negative working capital, and stockholders' deficit. Integrated Media Holdings Inc.'s consolidated balance sheet at September 30, 2008, showed $1,246,655 in total assets and $11,948,848 in total liabilities, resulting in a $10,702,193 stockholders' deficit. JERRY MCWILLIS: May Use Cash Collateral Through March 31, 2009 -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Utah granted Jerry A. McWillis, Janet Kay McWillis, and J.A.M. Family Limited Partnership authority to collect all rents generated from the Maplewood apartments and the Golden Acres apartments and deposit those funds into the existing debtor-in-possession account maintained at Key Bank. The Debtors are also authorized to collect all rents generated from the warehouse properties leased to Cachet Candle Company and to deposit those funds in to the DIP Account. The Court's order will be effective through March 31, 2009. From the DIP Account, the Debtors are authorized to: (A) Pay the ordinary and necessary operating expenses for the Apartments, together with any renovation costs that are first authorized by Bank of America, in writing. (B) Pay personal living expenses, both past and future, according to a budget, so long as the aggregate total of the expenses does not exceed $4,443 per month. (C) Allocate 71% of the Personal Expenses to the cash collateral generated from the Apartments, pro rata between Maplewood and Garden Acres. (D) Allocate 29% of the Personal Expenses to the cash collateral generated from the Warehouse. (E) On a monthly basis, but no later than the 15th day of the month, and after payment of all expenses, the Debtors shall remit 80% of any amounts held in the DIP Account to Bank of America and Assurity Life Insurance Company, the creditors holding the senior cash collateral interest in the respective cash collateral, pro rata. Bank of America and Granite Credit Union are granted a first and second priority postpetition security interest and replacement lien, respectively, in all of the Debtors' postpetition accounts, etc., acquired by the Debtors after the petition dates for the McWillises and for JAM, relating solely to the Maplewood and Garden Acres properties. The security interests and liens of Bank of America will be valid and superior to all other interests or liens of creditors of the estate of the Debtors in the Maplewood and Garden Acres properties, as adequate protection for any loss as a result of the use of Bank of America's cash collateral. The McWillises will redesignate the beneficiaries of their life insurance policies to pay the indemnity therefore to the surviving debtor. If the redesignation does not occur within 10 days, the McWillises will not have authority to use cash collateral to pay the premiums on the policies. Assurity Life Insurance Company is granted a first priority postpetition interest and replacement lien in all of the Debtors' postpetition accounts, etc., acquired by the McWillises or JAM after the petition dates for the McWillises and for JAM, relating solely to the Warehouse. The security interests and liens of Assurity Life Insurance Company shall be valid and superior to all other interests or liens of creditors of the estate of the Debtors in the Warehouse, as adequate protection for any loss as a result of the use of Assurity Life Insurance Company's cash collateral. The Debtors were also ordered to file a plan and disclosure statement on or before March 31, 2009. About Jerry A. McWillis Jerry A. McWillis and Janet Kaye McWillis, of Salt Lake City, dba J.A.M. Family Limited Partnership, filed for Chapter 11 relief on Oct. 9, 2008 (Bankr. D. Utah Case No. 08-26934). Salt Lake City- based J.A.M. Family Limited Parnership filed for Chapter 11 relief on Oct. 27, 2008 (Bankr. D. Utah Case No. 08-27426). On Feb. 4, 2009, the Court approved the consolidation of these cases under Case No. 08-26934 (Jerry McWillis and Janet Kaye McWillis). Anna W. Drake, Esq., at Anna W. Drake, P.C., represents the Debtors as counsel. When Jerry McWillis and Janet Kaye McWillis filed for protection from their creditors, they listed total assets and total debts of between $10 million and $50 million each. When J.A.M. Family Limited Partnership filed for protection from its creditors, it listed total assets and total debts of between $1 million to $10 million each. K-CAD: Voluntary Chapter 11 Case Summary ---------------------------------------- Debtor: K-Cad, Inc. 111 5th St. P.O. Box 267 Usk, WA 99180 Tel: (509) 445-1294 Bankruptcy Case No.: 09-00671 Chapter 11 Petition Date: February 12, 2009 Court: United States Bankruptcy Court Eastern District of Washington (Spokane/Yakima) Company Description: The debtor operates a gasoline service station in Usk, Washington. Debtor's Counsel: Dale L. Russell, Esq. Russell Law Firm P.O. Box 1225 Deer Park, WA 99006-1225 Tel: (509) 276-5014 Fax: (509) 276-7161 Email: ethelruss@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by G. Paul Streckmann, CEO of the company. A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/waeb09-00671.pdf KEY PLASTICS: Ct Oks Sale of 3350 Farmtrail Property to Tekgard --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaward granted Key Plastics L.L.C. and Key Plastics Finance Corp. authority to: i) assume the Asset Purchase Agreement between Key Plastics L.L.C. and International Auction & Appraisal Services LLC dated Nov. 17, 2008, and the 3350 Farmtrail Purchase Agreement between Key Plastics and Tekgard, Inc., dated Nov. 3, 2008; ii) sell Key Plastics's interests in the real property and certain personal property located at 3350 Farmtrail Road, York, Pennsylvania (the "3350 Farmtrail Property") to Tekgard, Inc. pursuant to the purchase agreement dated Nov. 3, 2008 (the "3350 Farmtrail Purchase Agreement"), free and clear of all liens, claims and encumbrances; iii) sell Key Plastics interests in certain equipment located on the 3350 Farmtrail Property (the "3350 Farmtrail Assets") to International Auction & Appraisal Services LLC under the purchase and sale agreement dated Nov. 17, 2008 (the "Asset Purchase Agreement"), free and clear of liens; iv) sell any remaining unsold assets from the York Plant not sold by International Auction at scrap value; and iv) if necessary, abandon any Remaining Property not sold by International Auction or the Debtors that is of inconsequential value and benefit to the estates. In their motion, the Debtors told the Court that the assumption of the two prepetition contracts -- the Asset Purchase Agreement and the 3350 Farmtrail Agreement -- will allow Key Plastics to sell property and assets which they have determined are not integral to their ongoing business operations at fair market value, thereby benefiting the Debtors' estates. Key Plastics related that the 3350 Farmtrail Property and the 3350 Farmtrail Assets are no longer necessary for the operation of the Debtor's business because Key Plastics is closing its plant, in York, Pennsylvania. Pursuant to the Asset Purchase Agreement, Key Plastics agreed to sell the 3350 Farmtrail Assets to International Auction for a total purchase price of $225,000. Said amount was paid to Key Plastics on Dec. 12, 2008. Additionally, in the Asset Purchase Agreement, International Auction agreed to sell certain items and equipment, including, a jewel press, vision inspection station, conveyor system, bezel unloaD station, barcode reader and an automated lubrication station, consigned to International Auction by Key Plastics at an auction, which initially commenced on Dec. 16, 2008. Pursuant to the 3350 Farmtrail Purchase Agreement, Key Plastics agreed to sell to Tekgard its interests in the 3350 Farmtrail Property for a total purchase price of $1,515,000. As reported in the Troubled Company Reporter on Feb 10, 2009, the Court confirmed on Jan. 29, 2009, the Debtors' prepackaged plan, concluding the Key Plastics' second trek through Chapter 11. A full-text copy of the Jan. 29, 2009 confirmation order by the U.S. Bankruptcy Court for the District of Delaware is available for free at: http://bankrupt.com/misc/KeyPlastics_Conf_Ord.pdf About Key Plastics Headquartered in Northville, Michigan, Key Plastics LLC -- http://www.keyplastics.com/-- supplies plastic components to the automotive industry. The company has 24 manufacturing facilities located in the United States, Canada, Mexico, Germany, Portugal, Spain, the Czech Republic, France, Slovakia, Italy and China. According to Bloomberg News, the company filed for bankruptcy in March 23, 2000, in Detroit and emerged a year later under the ownership of private-equity firm Carlyle. The company and Key Plastics Finance Corp. filed separate petitions for Chapter 11 relief on Dec. 15, 2008 (Bankr. D. Del. Case Lead Case No. 08-13324). Mark D. Collins, Esq., at Richards Layton & Finger PA; and Stephen A. Youngman, Esq., and Martin A. Sosland, Esq., at Weil, Gotschall & Manges LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million each. As reported in the Troubled Company Reporter on Feb 10, 2009, the Court confirmed on Jan. 29, 2009, the Debtors' prepackaged plan, concluding the Key Plastics' second trek through Chapter 11. LANDMARK LUGGAGE: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Landmark Luggage & Gifts, LLC dba Passport Luggage dba Backpack Express 2165 N.W. 108th St., Ste. F Clive, IA 50325 Tel: (515) 278-2004 Fax: (515) 278-1137 Bankruptcy Case No.: 09-00444 Chapter 11 Petition Date: February 12, 2009 Court: United States Bankruptcy Court Southern District of Iowa (Des Moines) Judge: Lee M. Jackwig Company Description: The debtor sells luggage, briefcases, laptop cases, duffels and travel accessories. See: http://www.landmarkluggage.com/ Debtor's Counsel: Donald F. Neiman, Esq. 801 Grand Avenue, Suite 3700 Des Moines, IA 50309-8004 Tel: (515) 246-5877 Fax: (515) 246-5808 Email: neiman.donald@bradshawlaw.com Total Assets: $622,481 Total Debts: $1,670,485 The petition was signed by Robert Jurgensmeier, vice president of the company. A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/iasb09-00444.pdf LEAH LIGHTFOOT: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Leah Diamand Lightfoot Nathaniel L. Lightfoot 1023 Loggerhead Lane Sugarloaf Key, FL 33042-3151 Bankruptcy Case No.: 09-12454 Chapter 11 Petition Date: February 12, 2009 Court: United States Bankruptcy Court Southern District of Florida (Miami) Debtor's Counsel: D. Jean Ryan, Esq. P.O. Box 561507 Miami, FL 33256 Tel: (305) 275-2733 Email: ryandunncourtmail@ryan-dunn.com Total Assets: $1,255,775 Total Debts: $1,647,330 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/flsb09-12454.pdf LEE'S RV CENTER: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Lee's RV Center Inc. 7247 State Road 46 East Batesville, IN 47006 Tel: (800) 232-3841 Fax: (812) 934-0234 Bankruptcy Case No.: 09-90374 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Roger Lee 09-90375 Chapter 11 Petition Date: February 12, 2009 Court: United States Bankruptcy Court Southern District of Indiana (New Albany) Judge: Basil H. Lorch III Company Description: The Debtor, doing business as Lee's Country RV, is one of Indiana's largest RV dealerships and has been selling RV's since 1989. See: http://www.leescountryrv.com Debtor's Counsel: Neil C. Bordy, Esq. Seiller Waterman LLC 462 S 4th Street, Suite 2200 Louisville, KY 40202-3459 Tel: (502) 584-7400 Email: bordy@derbycitylaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Roger Lee, president of the Company. A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/insb09-90374.pdf LEVEL 3 COMMS: Posts $290 Million Net Loss in 2008 -------------------------------------------------- Level 3 Communications, Inc. (NASDAQ: LVLT) reported consolidated revenue of $1.05 billion for the fourth quarter 2008, compared to consolidated revenue of $1.10 billion for the fourth quarter 2007. For the full year 2008, consolidated revenue increased to $4.30 billion, compared to $4.27 billion in 2007. Net income for the fourth quarter 2008 was $44 million, or $0.03 per basic share and ($0.03) per diluted share, compared with a net loss of $91 million, or ($0.06) per share for the fourth quarter 2007. The net loss for 2008 was $290 million, or ($0.19) per share, compared to a net loss of $1.11 billion, or ($0.73) per share in 2007. Consolidated Adjusted EBITDA was $323 million in the fourth quarter 2008, which included a net benefit of $52 million from four adjustments: $86 million benefit from a reduction in estimated asset retirement obligations, $14 million charge for patent litigation expenses, $12 million in severance charges for employee workforce reductions, and $8 million in real estate lease impairment charges. Without the benefit of these Fourth Quarter 2008 Adjustments, Consolidated Adjusted EBITDA increased to $271 million in the fourth quarter 2008, compared to $246 million for the fourth quarter 2007. For the full year 2008, without the benefit of the Fourth Quarter 2008 Adjustments, Consolidated Adjusted EBITDA was $988 million, compared to $824 million for the full year 2007. "In the fourth quarter, we delivered strong Consolidated Adjusted EBITDA growth, and generated significant positive Free Cash Flow," said James Crowe, CEO of Level 3. "In addition, the capital markets transactions we completed during the quarter meaningfully strengthened our balance sheet." Communications Business Revenue Total Communications Revenue for the fourth quarter 2008 was $1.03 billion, versus $1.08 billion for the fourth quarter 2007. Total Communications Revenue for 2008 was $4.23 billion, compared to $4.20 billion in 2007. Core Communications Services Core Communications Services revenue, which includes Core Network Services and Wholesale Voice Services, was $966 million in the fourth quarter 2008, a 2 percent increase compared to Normalized Core Communications Services revenue of $944 million in the fourth quarter 2007. Fourth quarter Core Communications Services revenue was negatively affected by approximately $14 million, due to the strengthening of the U.S. dollar against European currencies. For the full year 2008, Normalized Core Communications Services revenue grew 7.2 percent to approximately $3.85 billion, compared to $3.59 billion for the full year 2007. In 2008, Normalized full year Core Communications Services revenue, grew approximately 7.6 percent, assuming constant currency rates from the third quarter 2008 to the fourth quarter 2008. Other Communications Services Other Communications Services revenue was $68 million in the fourth quarter 2008, a decline of 47 percent compared to the fourth quarter 2007, resulting from expected declines in SBC contract revenue and managed modem revenue. Deferred Revenue The communications deferred revenue balance was $887 million at the end of the fourth quarter 2008, compared to $938 million at the end of the fourth quarter 2007 and $910 million at the end of the third quarter 2008. The deferred revenue balance declined quarter over quarter due to a combination of amortization and negative effects of the strengthening dollar against European currencies. Cost of Revenue Communications cost of revenue for the fourth quarter 2008 decreased to $414 million, versus $444 million in the fourth quarter 2007. Communications cost of revenue was $425 million in the third quarter 2008. For the full year 2008, communications cost of revenue was $1.74 billion, compared to $1.77 billion for the full year 2007. Communications gross margin was 60.0 percent for the fourth quarter 2008, compared to 59.0 percent in the fourth quarter 2007. Communications gross margin was 58.8 percent for the full year 2008, compared to 57.9 percent for the full year 2007. Selling, General and Administrative Expenses Communications SG&A expenses were $301 million for the fourth quarter 2008. Excluding the $64 million in net benefit from the $86 million ARO adjustment, the $14 million in litigation expenses and the $8 million in lease impairments, Communications SG&A would have been $365 million, compared to $439 million for the fourth quarter 2007 and $388 million for the third quarter 2008. Communications SG&A expenses include $17 million, $50 million, and $18 million of non-cash compensation expense for the fourth quarter 2008, the fourth quarter 2007 and the third quarter 2008, respectively. Excluding non-cash compensation expense and the net benefit of $64 million as described above, Communications SG&A was $348 million in the fourth quarter 2008, an 11 percent reduction compared to $389 million in the fourth quarter 2007 and a 6 percent reduction compared to $370 million in the third quarter 2008. Communications SG&A expenses, excluding non-cash compensation and the net $64 million benefit from the ARO adjustment, the litigation expense and the lease impairments in the fourth quarter 2008, were $1.49 billion for 2008, a 7 percent reduction versus $1.60 billion for 2007. Adjusted EBITDA Communications Adjusted EBITDA increased to $324 million for the fourth quarter 2008, or $272 million excluding the net $52 million benefit from the Fourth Quarter 2008 Adjustments. This compares to $246 million for the fourth quarter 2007. Communications Adjusted EBITDA margin, excluding the Fourth Quarter 2008 Adjustments, improved to 26.3 percent for the fourth quarter 2008, versus 22.7 percent for the fourth quarter 2007. Communications Adjusted EBITDA excludes non-cash compensation expense and includes severance and restructuring charges. Severance and restructuring charges were $12 million for the fourth quarter 2008, $5 million for the fourth quarter 2007 and $2 million for the third quarter 2008. Communications Adjusted EBITDA, excluding Fourth Quarter 2008 Adjustments, was $987 million for the full year 2008, an increase of 20 percent compared to $823 million for the full year 2007. Consolidated Cash Flow and Liquidity During the fourth quarter 2008, Unlevered Cash Flow was $251 million, versus $146 million for the fourth quarter 2007. Consolidated Free Cash Flow was $124 million for the fourth quarter 2008, compared to $41 million for the fourth quarter 2007. For the full year 2008, Unlevered Cash Flow was $480 million compared to $89 million in 2007. Consolidated Free Cash Flow was negative $36 million in 2008 compared to negative $402 million in 2007. Capital expenditures were $449 million for the full year 2008 compared to $633 million in 2007. As of Dec. 31, 2008, the company had cash and cash equivalents of approximately $768 million. Balance Sheet Improvements During the fourth quarter 2008, the company completed tender offers for its 2.875% Convertible Senior Notes due 2010, 6% Convertible Subordinated Notes due 2010, and 6% Convertible Subordinated Notes due 2009. In conjunction with the tender offers, the company completed its offering of $400 million of 15% Convertible Senior Notes due 2013. In 2008, through the combination of these tender offers, cash repurchases and debt for equity exchanges, the company reduced its outstanding debt due 2009 through 2012 by $639 million and its total debt due by $239 million. "We are pleased with the progress we made on improving the balance sheet during the fourth quarter," said Sunit Patel, CFO of Level 3. "We were able to reduce our near term maturities and increase our cash balance. As a result, we now expect to be able to pay all of our remaining 2009 and 2010 debt with cash on hand." 2009 Business Outlook "In the near-term, our reported revenues are being negatively affected due to several factors: the general economic environment driving churn in our enterprise business as well as usage declines; known disconnects from some key wholesale customers; typical seasonality in our Vyvx broadcast business; and recent weakness in pound sterling rates that affect our reported European revenues," said Mr. Patel. "While we expect near-term pressure on revenues, we are confident in our ability to deliver growth in Consolidated Adjusted EBITDA in 2009 from the $988 million reported in 2008 and continued improvement in Free Cash Flow generation. We expect to be Free Cash Flow positive for the full year 2009. "Our capital expenditures in 2009 will be significantly lower than 2008 and in line with revenue growth which has been slowing over the second half of 2008." Effective Jan. 1, 2009, the company will adopt FASB Position APB 14-1, which mandates a change in accounting for certain convertible debt instruments. As a result of this change, the company expects GAAP interest expense to be $550 to $575 million in 2009 compared to $534 million in 2008. In 2009, the company expects net cash interest expense to be approximately $510 million. Summary "The actions we took during 2008 have improved our financial outlook and we are confident about the strength of our financial position in these difficult times" said Mr. Crowe. "Given the uncertain economic outlook, we remain focused on assuring our cost structure is appropriate for a wide range of potential revenue growth rates; on improving credit quality; and on ensuring we are positioned to take advantage of the opportunities that will emerge as the longer term positive fundamentals of our business displace short-term challenges." A full-text copy of the company's press release and selected financial data is available for free at: http://researcharchives.com/t/s?398d About Level 3 Communications Headquartered in Broomfield, Colorado, Level 3 Communications Inc. (Nasdaq: LVLT) -- http://www.level3.com/-- is a provider of fiber-based communications services. Level 3 offers a portfolio of metro and long haul services over an end-to-end fiber network, including transport, data, Internet, content delivery and voice. At Dec. 31, 2008, the company's balance sheet showed total assets of $9.63 billion, total liabilities of $8.76 billion and stockholders' equity of $876 million. * * * As reported in the Troubled Company Reporter on Jan. 12, 2009, Moody's Investors Service adjusted Level 3 Communications, Inc.'s probability of default rating to Ca/LD subsequent to the company completing tender offer transactions that were interpreted, for ratings purposes (and as was contemplated in Moody's November 24, 2008 press release that addressed the ratings' impact of the tender offer), as constituting a distressed exchange that is tantamount to a default. As was then noted, the PDR will be temporarily repositioned to Ca/LD to reflect the limited default that has occurred; the PDR will be repositioned (back to Caa1, under review for downgrade) after three business days. LIGHTWAVE ENTERPRISES: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Lightwave Enterprises, Inc. 1999 Mt. Read Boulevard, Building 2 Rochester, NY 14615 Tel: (585) 426-0910 Bankruptcy Case No.: 09-20317 Chapter 11 Petition Date: February 12, 2009 Court: United States Bankruptcy Court Western District of New York (Rochester) Company Description: Lightwave Enterprises, Inc., provides customers with extensive optical design, and manufacturing expertise and capability under one roof. See: http://www.leioptics.com/ Debtor's Counsel: John A. Belluscio, Esq. 400 Wilder Building 1 East Main St. Rochester, NY 14614 Tel: (585) 454-4635 Email: jbelluscio@choiceonemail.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Rexford R. Fisher, Sr., CEO of the Company. The Debtor did not file a list of its 20 largest unsecured creditors together with its petition. LINENS 'N THINGS: Pens Deal with Quebecor World on Sale of Paper ---------------------------------------------------------------- Debtor Quebecor World (USA), Inc., and Linens 'n Things, Inc., are parties to a letter of commitment and a printing services agreement. QWUSA filed a $1,935,513 claim against Linens 'n Things in Linens' bankruptcy case pending before the U.S. Bankruptcy Court for the District of Delaware on account of the printing services provided by QWUSA to Linens' prior to Linens' Petition Date. QWUSA alleges that it is owed an additional $20,000 for prepetition services provided to Linens and asserts a $21,147 claim for postpetition services. Linens has also filed proofs of claim against QWUSA and all of its affiliated debtor entities in an unliquidated amount. QWUSA asserts that its Claims are secured by a valid security interest in certain paper that is currently in its possession under the Agreements. Linens disputes that the QWUSA Lien is valid, perfected and enforceable and asserts, among other things, that the Paper is property of Linens' estate in Linens' bankruptcy case. To effectuate the expeditious sale of the Paper, the Parties entered into an interim agreement and agreed in the ordinary course of business that the proceeds of the Sale would be held in a joint escrow account, and distributed pursuant to the terms of the Letter Agreement. Judge Peck of the U.S. Bankruptcy Court for the Southern District of New York, who is overseeing QWUSA's bankruptcy case, approved the parties' stipulation. The stipulation provides that: (a) the parties will be bound by the terms of the Letter Agreement and satisfy the conditions and requirements provided in the Letter Agreement; (b) QWUSA consents to the Sale of the Paper by Linens and has agreed to cooperate to prepare the Paper for Sale; (c) Linens agrees that with respect to all Paper where the Sale of the Paper is not consummated within 90 days of the date of the Letter Agreement, or the later date as agreed to by QWUSA in writing, the Paper will become the property of QWUSA free and clear of any interest Linens alleges in the Paper or any proceeds from the Paper and QWUSA may dispose of the Paper in any manner it may determine; and (d) upon the consummation of the Sale of the Paper, all cash received from the Sale will be disbursed in this manner: * LNT will promptly pay to QWUSA from the first available sums received on account of the Sale Proceeds $21,147 for the Postpetition Claim; * the balance of the Sale Proceeds, after payment of the Postpetition Claim, will be divided between the Parties, and QWUSA will be paid 20% of the Sale Proceeds and Linens will be paid 80% of the Sale Proceeds; and * Linens will pay QWUSA from Linens' Share 80% of the expenses QWUSA has incurred in preparing the Paper for Sale, which expenses will be calculated by multiplying the aggregate tons of the Paper sold by $20 per ton or by $10 per ton. QWUSA's Prepetition Claim will be reduced by QWUSA's Share less 20% of the expenses QWUSA has incurred in preparing the Paper for Sale. The Stipulation is subject to approval by the Delaware Bankruptcy Court. About Linens 'n Things, Inc. Headquartered in Clifton, New Jersey, Linens 'n Things, Inc. -- http://www.lnt.com/-- is the second largest specialty retailer of home textiles, housewares and home accessories in North America. As of Sept. 30, 2008, Linens 'n Things operated 411 stores in 47 states and seven provinces across the United States and Canada. The company is a destination retailer, offering one of the broadest and deepest selections of high quality brand-name as well as private label home furnishings merchandise in the industry. Linens 'n Things has some 585 superstores (33,000 sq. ft. and larger), emphasizing low-priced, brand-name merchandise, in more than 45 states and about seven Canadian provinces. Brands include Braun, Krups, Calphalon, Laura Ashley, Croscill, Waverly, and the company's own label. Linens 'n Things was acquired by private equity firm Apollo Management in 2006. On May 2, 2008, these Linens entities filed chapter 11 petition (Bankr. D. Del.): Linens Holding Co. (08-10832), Linens 'n Things, Inc. (08-10833), Linens 'n Things Center, Inc. (08-10834), Bloomington, MN., L.T., Inc. (08-10835), Vendor Finance, LLC (08- 10836), LNT, Inc. (08-10837), LNT Services, Inc. (08-10838), LNT Leasing II, LLC (08-10839), LNT West, Inc. (08-10840), LNT Virginia LLC (08-10841), LNT Merchandising company LLC (08-10842), LNT Leasing III, LLC (08-10843), and Citadel LNT, LLC (08-10844). Judge Christopher S. Sontchi presides over the case. Mark D. Collins, Esq., John H. Knight, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., are Linens 'n Things' bankruptcy counsel. The Debtors' special corporate counsel are Holland N. O'Neil, Esq., Ronald M. Gaswirth, Esq., Stephen A. McCaretin, Esq., Randall G. Ray, Esq., and Michael S. Haynes, Esq., at Morgan, Lewis & Bockius, LLP. The Debtors' restructuring management services provider is Conway Del Genio Gries & Co., LLC. The Debtors' CRO and Interim CEO is Michael F. Gries, co-founder of Conways Del Genio Gries & Co., LLC. The Debtors' claims agent is Kurtzman Carson Consultants, LLC. The Debtors' consultants are Asset Disposition Advisors, LLC, and Protivit, Inc. The Debtors' investment bankers are Financo, Inc., and Genuity Capital Markets. (Bankruptcy News About Linens 'n Things; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). LUMINENT MORTGAGE: Wants Solicitation Period Extended to July 2 --------------------------------------------------------------- Luminent Mortgage Capital, Inc., et al., ask the U.S. Bankruptcy Court for the District of Maryland to extend the exclusive period during which the Debtors have the exclusive right to solicit acceptances of their amended Chapter 11 Plan, from March 4, 2009, thorugh and including July 2, 2009. The Debtors tell the Court that they are negotiating with the Official Committee of Unsecured Creditors, Wells Fargo and Arco Capital Corp. for additional amendments to the Amended Chapter 11 Plan. As reported in the Troubled Company Reporter on Jan. 8, 2009, the Debtors filed with the Court their First Amended Joint Plan of Reorganization and Disclosure Statement explaining said Plan. The Plan provides for, among other things, the conversion of Luminent Mortgage Capital, Inc. from a publicly traded real estate investment trust into a private asset management company and the issuance of the Reorganized Equity Units and the Reorganized Preferred Equity Units to certain classes of Creditors, the payment in full of all Allowed Other Secured Claims, and the cancellation of all outstanding Interests in the Debtors. General Unsecured Claims Against Luminent under Classes 4(a) and (b), with estimated allowed Claims of $297,054,107, are impaired under Plan. Holders of Allowed 4(a) Claims will receive their Ratable Portion of (i) the Unsecured Distribution Fund, and (ii) 41% of the Reorganized Equity Units, taking into account the Holders in Classes (4)(b) and 5(b) to determine such Ratable Portion. Holders of Allowed Class 4(b) Claims will receive their Ratable Portion of 41% of the Reorganized Equity Units, taking into account the holders of Allowed Claims in Classes (4)(a) and 5(b) to determine such Ratable Portion. About Luminent Mortgage Luminent Mortgage Capital, Inc. (OTCBB: LUMCE) is a real estate investment trust, or REIT, which, together with its subsidiaries, has historically invested in two core mortgage investment strategies. Under its Residential Mortgage Credit strategy, the company invests in mortgage loans purchased from selected high- quality providers within certain established criteria as well as subordinated mortgage-backed securities and other asset-backed securities that have credit ratings below AAA. Under its Spread strategy, the company invests primarily in U.S. agency and other highly-rated single-family, adjustable-rate and hybrid adjustable- rate mortgage-backed securities. Luminent and nine of its subsidiary debtors filed separate petitions for Chapter 11 relief on Sept. 5, 2008 (Bankr. D. Md. Lead Case No. 08-21389). Joel I. Sher, Esq., at Shapiro Sher Guinot & Sandler, represents the Debtors as counsel. The U.S. Trustee for Region 4 appointed creditors to serve on an Official Committee of Unsecured Creditors. Jeffrey Neil Rothleder, Esq., at Arent Fox LLP, represents the Creditors Committee as counsel. In its operating report for the month of September 2008, Luminent Mortgage Capital, Inc. reported $1,960,516 in total assets and $374,868,632 in total liabilities, resulting in a $372,908,116 stockholders' deficit. Full-text copies of the Debtors' operating report for September 2008 are available for free at: http://researcharchives.com/t/s?345b At March 31, 2008, Luminent Mortgage Capital, Inc.'s consolidated balance sheet showed $3,757,205,000 in total assets, $3,980,417,000 in total liabilities, and $223,212,000 in stockholders' deficit. LUMINENT MORTGAGE: May Employ Protiviti as Financial Advisors ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Maryland has granted Luminent Mortgage Capital, Inc., et al., authority to employ Protiviti Inc. as financial advisor to the Debtors, nunc pro tunc to Sept. 9, 2008. As reported in the Troubled Company Reporter on Oct. 31, 2008, Protiviti will: a) assist the Debtors in filing and obtaining approval of a disclosure statement and confirmation of the Debtors' plan of reorganization; d) prepare cash flow projections and valuations of the Debtors' businesses as required in connection with the Debtors' disclosure statement and confirmation of the Debtors' plan of reorganization; c) offer testimony regarding the financial condition of the Debtors, administration or recovery of estates and other matters to protect the interest of the Debtors' estates; The firm's professionals and their compensation rates are: Professionals Hourly Rates ------------- ------------ Guy A. Davis $460 Suzanne B. Roski $440 Alicia A. Loza $330 Eric M. Massell $220 Linda B. Seay $190 Guy A. Davis, a managing director at Protiviti, Inc., told the Court that the firm does not hold any interest adverse to the Debtors' estate and their creditors, and that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Luminent Mortgage Luminent Mortgage Capital, Inc. (OTCBB: LUMCE) is a real estate investment trust, or REIT, which, together with its subsidiaries, has historically invested in two core mortgage investment strategies. Under its Residential Mortgage Credit strategy, the company invests in mortgage loans purchased from selected high- quality providers within certain established criteria as well as subordinated mortgage-backed securities and other asset-backed securities that have credit ratings below AAA. Under its Spread strategy, the company invests primarily in U.S. agency and other highly-rated single-family, adjustable-rate and hybrid adjustable- rate mortgage-backed securities. Luminent and nine of its subsidiary debtors filed separate petitions for Chapter 11 relief on Sept. 5, 2008 (Bankr. D. Md. Lead Case No. 08-21389). Joel I. Sher, Esq., at Shapiro Sher Guinot & Sandler, represents the Debtors as counsel. The U.S. Trustee for Region 4 appointed creditors to serve on an Official Committee of Unsecured Creditors. Jeffrey Neil Rothleder, Esq., at Arent Fox LLP, represents the Creditors Committee as counsel. In its operating report for the month of September 2008, Luminent Mortgage Capital, Inc. reported $1,960,516 in total assets and $374,868,632 in total liabilities, resulting in a $372,908,116 stockholders' deficit. Full-text copies of the Debtors' operating report for September 2008 are available for free at: http://researcharchives.com/t/s?345b At March 31, 2008, Luminent Mortgage Capital, Inc.'s consolidated balance sheet showed $3,757,205,000 in total assets, $3,980,417,000 in total liabilities, and $223,212,000 in stockholders' deficit. LYONDELL CHEMICAL: Temporary Injunction Vs. Noteholders Extended ---------------------------------------------------------------- Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York has scheduled another hearing on Lyondell Chemical Co's request to enjoin noteholders from pursing actions against its parent LyondellBasell Industries AF SCA and European affiliates. Bloomberg's Bill Rochelle said that at the Feb. 13 hearing, Judge Gerber said he needs to hear more testimony at another hearing within 10 days. In the meantime, he continued a temporary injunction stopping creditor actions against the non-filed parent and affiliates, the report said. Lyondell has commenced an adversary proceeding against Wilmington Trust Company, Wachovia Bank, N.A., and 150 other parties to extend the automatic stay under Section 362(a) of the Bankruptcy Code to stop them from asserting claims or attempting to exercise remedies against non-debtor holding company LBIAF or any non- debtor affiliates based on guaranty issued by a non-debtor affiliate for alleged debts arising under $1 billion in notes. Wilmington Trust is the trustee under an indenture providing for the $615,000,000 of 8-3/8% notes due in 2015 and EUR500,000,000 of 8-3/8% senior notes due in 2015 issued by the LBIAF affiliate. The noteholders are opposing the proposal. Wilmington Trust, the indenture trustee for the noteholders, argues that Lyondell is asking the bankruptcy judge to impose an injunction over creditors not within the court's jurisdiction. As reported by the Troubled Company Reporter on February 11, 2009, the United States Bankruptcy Court for the Southern District of New York has entered a temporary restraining order against any creditor of Lyondell Chemical or its co-debtor affiliates and subsidiaries from proceeding against LBIAF. The temporary injunction also restrains holders of record and beneficial owners of the EUR500 million and $615 million 8-3/8% Senior Notes due 2015 issued by LBIAF from, among other things, taking any action to accelerate the maturity of such notes. Lyondell Chemical's filing for Chapter 11 automatically stayed lawsuits against the Debtors. However, LyondellBasell Industries and its certain European affiliates have not filed for Chapter 11. Involuntary Insolvency In its request for injunction, Lyondell Chemical told the Court that allowing the noteholders to accelerate all amounts outstanding under the notes could precipitate an involuntary insolvency proceeding against LBIAF, which in turn will cause a default under its debtor-in-possession financing. Pursuant to an indenture, dated as of August 10, 2005, Nell AF S.A.R.L., the predecessor in interest to LBIAF, issued $615,000,000 and EUR500,000,000 of 8-3/8% senior notes due 2015. The 2015 Notes are guaranteed on a senior subordinated basis by certain of LBIAF's subsidiaries. A preliminary injunction is necessary to stay the indenture trustee for the 2015 Notes and all holders of record and beneficial holders of such notes, and all persons or entities acting in concert with any of them, from taking action against LBIAF or its non-debtor affiliate guarantors with respect to the 2015 Notes, asserts David Peterson, Esq., at Susman Godfrey L.L.P., in Houston, Texas. Mr. Peterson explains that the Debtors' bankruptcy filing triggered an event of default under the 2015 Indenture; upon an event of default, the indenture trustee or the holders of 25% or more of the 2015 Notes have the right to declare all principal and accrued interest to be due and payable and the trustee may exercise or direct the exercise of certain remedies against LBIAF. Under the terms of the 2015 Indenture and pursuant to an intercreditor agreement with the Debtors' senior creditors and the 2015 Noteholders, the 2015 Noteholders are subject to certain limitations on payment, and enforcing their rights against the 2015 Guarantors, although not against LBIAF. Upon notification of a default under the 2015 Notes, the 2015 Noteholders and indenture trustee may only take enforcement action in respect of the guarantees after the passage of a period of time (179 days) or the occurrence of certain events. According to a January 15, 2009, article in Debt Service Wire, certain holders of the 2015 Notes also hold credit default swaps as a hedge on the 2015 Notes and are allegedly attempting to gather holders of 25% in amount of the 2015 Notes and accelerate the 2015 Notes in order to trigger a payout under the 2015 CDS. Mr. Peterson explains that acceleration of the 2015 Notes may force LBIAF to commence a restructuring proceeding. Additionally, it is possible that due to an acceleration of the 2015 Notes, certain holders of the 2015 Notes could attempt to commence an involuntary bankruptcy proceeding against LBIAF in Luxembourg, the Netherlands or elsewhere. He avers that a filing by or against LBIAF would be disastrous to the Debtors' reorganization efforts because, among other reasons, the commencement of an involuntary insolvency proceeding against LBIAF would constitute a default under both the Debtors' postpetition financing facility and the Debtors' forbearance agreements with their prepetition senior secured and bridge lenders. "In short, allowing the 2015 Noteholders to take any act to accelerate the maturity of or otherwise enforce any rights in respect of the 2015 Notes could imperil the Debtors' chances of successfully reorganizing and thus irreparably harm the Debtors at a very early stage in the chapter 11 cases," Mr. Peterson concludes. "Accordingly, as a necessary measure that would serve the best interests of the Debtors' estates and creditors, the Court should enjoin the exercise of contractual or legal remedies against LBIAF or its non-debtor subsidiaries with respect to the 2015 Notes until confirmation of a plan of reorganization in these cases." Holders of 2015 Notes The entities believed by the Debtors to be holders of record or beneficial holders of the 2015 Notes are: Advantus Capital Management Inc.; AEGON Asset Management NV (Netherlands); AEGON USA Investment Management LLC; AllianceBernstein LP; American Money Management Corp.; Amerisure Insurance; Analytic Investors LLC; Banc of America Securities Ltd.; Barclays Fixed Income; Barclays Global Investors; Bawag PSK Invest GmbH; BlackRock Financial Management Inc.; Blue Cross Blue Shield of Michigan; BlueMountain Capital Management; BNY Mellon Private Wealth; BOA Securities Ltd.; California STRS; Clearstream Banking; City National Bank; Cominvest Asset Management GmbH; Cr,dit Suisse Asset Management Americas; CS Securities LLC; CS Securities (Europe) Limited; CS Securities (Switzerland) LLC; DBAG London Global; Delaware Investment Advisers; Deutsche Asset Management (DeAM); Deutsche Bank Securities; Employers Insurance Co. of Nevada Inc.; Eurizon Capital SGR SpA; Euroclear SA; F&C Asset Management plc; Federated Investors Inc.; Fidelity Management & Research Co.; Fifth Third Asset Management; Fort Washington Investment Advisors Inc.; Fortis Investment Management SA (Luxembourg); GE Asset Management; Goldman Sachs Asset Management LP; Greenwich Street Advisors; Henderson Global Investors Limited; HSBC Global Asset Management (UK) Limited; Hugheson Limited; ING Investment Management LLC; Jones Heward Investment Counsel Inc.; JP Morgan Clearing Corp.; The Lafayette Life Insurance Co.; Legg Mason Partners Fund Advisor LLC; Liberty Mutual Insurance Co.; Loomis, Sayles & Co., LP; M&G Investment Management Ltd.; Mediolanum Asset Management Limited; Metzler Investment GmbH; MFC Global Investment Management (US) LLC; The Midland Co.; Morgan Stanley Investment Management Inc.; Mutual of America Capital Management Corp.; Mutual of Omaha Insurance Co.; Nationwide Insurance Co. (Office of Investments); New Jersey Division of Investments; New York Life Investment Management LLC; NOBO & Retail Accounts; Nomura Asset Management Co., Ltd.; Nomura Corporate Research & Asset Management; Northern Trust Investments NA; Ohio PERS; Ohio STRS; Pioneer Investment Management (Ireland) Ltd.; Pioneer Investment Management Inc.; PPM America Inc.; Provident Investment Counsel Inc.; Prudential Investment Management-Fixed Income; Pyramis Global Advisors LLC; Sankaty Advisors LLC; Standish Mellon Asset Management Co., LLC; State Street Global Advisors (SSgA); Stichting Pensioenfonds ABP; Stone Harbor Investment Partners LP; STW Fixed Income Management; Teacher Retirement System of Texas; Teachers Advisors Inc.; UBS AG; USAA Investment Management Co.; Wells Capital Management; Western Asset Management Co. (WAMCO); White Mountains Advisors LLC. A full-text copy of the temporary restraining order and other relevant documents is available for free at: http://chapter11.epiqsystems.com/lyondellbasellindustries About Lyondell Chemical Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries -- http://www.lyondellbasell.com/-- the world's third largest independent chemical company. Lyondellbasell produces polypropylene and advanced polyolefins products, is a leading supplier of polyethylene, and a global leader in the development and licensing of polypropylene and polyethylene processes and related catalyst sales. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. About a year after completing the merger, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code on January 6, 2009, to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc., filed for Chapter 11. LyondellBasell is not part of the bankruptcy filing. LyondellBasell's non-U.S. operating entities are also not included in the Chapter 11 filing. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MARC DREIER: Released on $10 Million Bail ----------------------------------------- Marc S. Dreier was released on $10 million bond. According to Bloomberg News, Mr. Dreier left the Metropolitan Correctional Center in downtown Manhattan February 13 and was driven to his midtown Manhattan home, where he'll be confined under guard pending trial. The report relates that under the terms of his bail, Mr. Dreier will be subject to electronic monitoring and watched around the clock by armed security guards to ensure he doesn't flee. The U.S. District Court for the Southern District of New York previously required a $20 million bail for Mr. Dreier but later agreed to lower the bond to $10 million. Mr. Dreier's lawyer had appealed the bond, citing that Mr. Dreier couldn't afford to pay $20 million. Bloomberg earlier reported that prosecutors have asked the judge to deny bail to Mr. Dreier. The report relates that assistant U.S. Attorney Jonathan Streeter claimed that Mr. Dreier had promised to give his son Hamptons properties worth $12.5 million after the latter agreed to spend the summer with him. Mr. Streeter, according to the report, said statements made by Mr. Dreier to the receiver of his law firm, Dreier LLP, aren't "credible" and that Dreier still may have assets hidden overseas. Mr. Dreier had said that his assets have been frozen by the U.S. government and that he isn't a risk to flee the country. Mr. Dreier, founder of Dreier LLP, which has sought Chapter 11 protection, has been accused of stealing $400 million from the firm's clients. In December, the U.S. Securities and Exchange Commission claimed Mr. Dreier stole $38 million from an escrow account set up to hold money for the unsecured creditors of 360networks (USA) Inc., which the firm represented in bankruptcy court. Mr. Dreier was arrested for the charges. Mr. Dreier on Feb. 2 pleaded not guilty to the charges against him. He was indicted by a federal grand jury on Jan. 29 before the U.S. District Court for conspiracy, securities fraud and wire fraud. Mark Pomerantz, which promptly took over the firm as receiver, after the filing of charges against Mr. Dreier, has been sued by Stephanie Leibert, who was an associate or junior attorney of the firm, for requiring her to work for two weeks prior to Dreier LLP's bankruptcy filing without payment. She said, according to Bloomberg, that she and other lawyers at the firm were required to continue working at the firm until they were fired Dec. 15 without being paid. About Marc S. Dreier Marc Dreier founded New York-based law firm Dreier LLP -- http://www.dreierllp.com/-- in 1996. On Dec. 8, 2008, the U.S. Securities and Exchange Commission filed a suit, alleging that Mr. Dreier made fraudulent offers and sales of securities in several cities, selling fake promissory notes to hedge and other private investment funds. The SEC asserted that Mr. Dreier also distributed phony financial statements and audit opinions, and recruited accomplices in connection with that scheme. Mr. Dreier has been charged by the U.S. government for conspiracy, securities fraud and wire fraud before the U.S. District Court for the Southern District of New York (Manhattan) (Case No. 09-cr-00085-JSR). Dreier LLP filed for Chapter 11 on Dec. 16, 2008 (Bankr. S. D. N.Y., Case No. 08-15051). Judge Robert E. Gerber handles the case. Stephen J. Shimshak, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, has been retained as counsel. The Debtor listed assets between $100 million to $500 million, and debts between $10 million to $50 million in its filing. Wachovia Bank National Association, Sheila M. Gowan as trustee for Chapter 11 estate of Dreier LLP, and Steven J. Reisman as postconfirmation representative of the bankruptcy estate of 360networks (USA) Inc. signed a petition that sent Mr. Dreier to bankruptcy under Chapter 7 on Jan. 26, 2009 (Bankr. S.D. N.Y., Case No. 09-10371). MBF HEALTHCARE: Receives Non-Compliance Notice From NYSE -------------------------------------------------------- MBF Healthcare Acquisition Corp. received on February 10, 2009, a notice from the NYSE Alternext US LLC indicating that it was not in compliance with Section 704 of the NYSE Alternext US Company Guide because MBF did not hold an annual meeting of its stockholders during the year ended December 31, 2008. MBF has been afforded the opportunity to submit a plan to the Exchange by March 10, 2009, advising the Exchange of actions taken, or to be taken, to bring MBF into compliance with Section 704 of the Company Guide by August 11, 2009. MBF intends to submit a plan to the Exchange by March 10, 2009 explaining that, pursuant to the MBF's charter, it must consummate a business combination by April 23, 2009, or MBF will dissolve and liquidate. As a result, MBF will either hold an annual meeting of stockholders prior to April 23, 2009 or liquidate, in which case its securities would be delisted from the Exchange. If the plan is accepted, MBF will be able to continue its listing, during which time MBF will be subject to continued periodic review by the Exchange's staff. If the plan is not accepted, the Exchange could initiate delisting procedures against MBF. About MBF Healthcare Acquisition Coral Gables, Florida-based MBF Healthcare Acquisition Corp. (NYSE Alternext US:MBH) (NYSE Alternext US, Units: "MBH.U", Common Stock: "MBH," Warrants: "MBH.WS") is a special purpose acquisition company formed for the purpose of acquiring, through a merger, capital stock exchange, stock purchase, asset acquisition or other similar business combination, one or more operating businesses in the healthcare industry. MIDWAY GAMES: Gets Access to Lenders' Cash Collateral ----------------------------------------------------- Midway Games Inc. and its debtor-affiliates won approval from the United States Bankruptcy Court for the District of Delaware for authority to use cash collateral securing repayment of secured loan to Acquisition 100 Holdings Subsidiary LLC. According to Bill Rochelle of Bloomberg News, the Court approved Midway's request despite objections by holders of some of the $150 million, who balked at the some of the protections Midway proposed for the secured lender who is also the controlling shareholder. The Debtors told the Court that they have an immediate need to access and use cash collateral to preserve the value of their business during the initial stages of their Chapter 11 cases. Access to cash collateral, according to them, is necessary to provide liquidity and avoid immediate harm to their estates and creditors. The Debtors provided a cash collateral budget which contains projected expenditures during the period Feb. 12, 2009, until May 10, 2009. A full-text copy of the cash collateral budget is available for free at: http://ResearchArchives.com/t/s?397c As adequate protection, Acquisition 100 will receive (i) payment of accrued and unpaid prepetition interest under the prepetition facility as well as current postpetition interest under the prepetition facility at the non-default rate of interest under a certain loan and security agreement, and (ii) payment of out-of- pocket expenses for reasonable professional fees and disbursements. Several holders of 7.125% senior convertible notes due 2026 and 6% senior convertible notes due 2025 -- including Highbridge International LLC, Tennenbaum Capital Partners LLC, Magnetar Financial LLC and Lanphier Cpital Inc. -- protest that Acquisition 100 is substantially oversecured and should not receive anything more than replacement liens against the Debtors' assets. About Midway Games Headquartered in Chicago, Illinois, Midway Games Inc. -- http://www.midway.com-- develops video games and sell them primarily in North America, Europe, Asia and Australia. The company and nine of its affiliates filed for Chapter 11 protection on Feb. 12, 2009 (Bankr. D. Del. Lead Case No. 09-10465). David W. Carickhoff, Jr., Esq., Michael David Debaecke, Esq., and Victoria A. Guilfoyle, Esq., at Blank Rome LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard as their investment banker, Dewey & LeBoeuf LLP as special counsel, and Epiq Bankruptcy Solutions LLC as claims agent. The Debtors' financial condition as of Sept. 30, 2008, showed $167,523,000 in total assets and $281,033,000 in total debts. MIDWAY GAMES: Creditors Blame Sumner Redstone for Co.'s Collapse ---------------------------------------------------------------- Michael Thompson at Ars Technica reports that Midway Games Inc.'s creditors have told the U.S. Bankruptcy Court for the District of Delaware that Sumner Redstone crippled their financial recovery options when he sold his shares in the company. According to Ars Technica, the creditors filed a motion in the court on Friday, explaining the background of the financial problems in Midway Games. The report says that the creditors are mainly concerned that Mr. Redstone might have acted improperly. Citing Wedbush-Morgan analyst Michael Pachter, Ars Technica relate that the change of ownership "triggered rules that wiped out tax losses, accelerated default provisions on the unsecured debt, and impaired Midway's ability to refinance." Ars Technica states that Midway Games had a great deal less debt, but the publisher proceeded to take out three loans from Mr. Redstone's groups, which increased the firm's debt to Mr. Redstone to about $90 million. The creditors are also concerned about Mr. Redstone's dealings with Mark Thomas, who bought the shares, according to Ars Technica. The debt the creditors now hold is unsecured, says Ars Technica. Mr. Thomas, Ars Technica relates, has secured debt, which means that Mr. Thomas would get paid first while other creditors would be left out. The report says that Mr. Thomas could still make a healthy profit, even if Midway Games is shut down and its assets are sold. "[Thomas stands] to reap an enormous, almost unprecedented windfall... if paid in full... the Thomas Parties will recover some 30,000 percent on their $100,000 investment within a matter of a few months... The Thomas Parties' return stands in stark contrast to the tens, or potentially even hundreds, of millions of dollars... that the Redstone-Thomas transaction may have stolen from [other creditors]," the creditors said, according to court documents. About Midway Games Headquartered in Chicago, Illinois, Midway Games Inc. -- http://www.midway.com-- develops video games and sell them primarily in North America, Europe, Asia and Australia. The company and nine of its affiliates filed for Chapter 11 protection on Feb. 12, 2009 (Bankr. D. Del. Lead Case No. 09-10465). David W. Carickhoff, Jr., Esq., Michael David Debaecke, Esq., and Victoria A. Guilfoyle, Esq., at Blank Rome LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard as their investment banker, Dewey & LeBoeuf LLP as special counsel, and Epiq Bankruptcy Solutions LLC as claims agent. The Debtors' financial condition as of Sept. 30, 2008, showed $167,523,000 in total assets and $281,033,000 in total debts. MIDWAY GAMES: Wants Epiq Bankruptcy as Claims and Noticing Agent ---------------------------------------------------------------- Midway Games Inc. and its debtor-affiliates seek authority from the United States Bankruptcy Court for the District of Delaware to employ Epiq Bankruptcy Solutions, LLC, as claims, noticing, and balloting agent. Epiq will: a) perform certain noticing functions; b) assist the Debtors in analyzing and reconciling proofs of claim filed against the Debtors' estates; and c) assist the Debtors with balloting in connection with any proposed Chapter 11 plan. Daniel C. McElhinney, executive director of Epiq, tells the Court that the firm's professionals standard rates are: Title Hourly Rate Average Rate ----- ----------- ------------ Clerk $40 - $60 $50 Case Manager (Level 1) $125 - $175 $142.50 IT Programming Consultant $140 - $190 $165 Case Manager (Level 2) $185 - $220 $202.50 Senior Case Manager $225 - $275 $247.50 Senior Consultant TBD TBD The level of senior consultant activity will vary by engagement. The usual average rate is $295 per hour. Mr. McElhinney assures the Court that Epiq is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Midway Games Headquartered in Chicago, Illinois, Midway Games Inc. -- http://www.midway.com-- develops video games and sell them primarily in North America, Europe, Asia and Australia. The company and nine of its affiliates filed for Chapter 11 protection on Feb. 12, 2009 (Bankr. D. Del. Lead Case No. 09-10465). David W. Carickhoff, Jr., Esq., Michael David Debaecke, Esq., and Victoria A. Guilfoyle, Esq., at Blank Rome LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard as their investment banker, Dewey & LeBoeuf LLP as special counsel, and Epiq Bankruptcy Solutions LLC as claims agent. The Debtors' financial condition as of Sept. 30, 2008, showed $167,523,000 in total assets and $281,033,000 in total debts. MODINE MANUFACTURING: Lenders Agree to Waive Covenant Default ------------------------------------------------------------- Modine Manufacturing Company has reached agreement with its primary lenders and note holders on a waiver of defaults that existed at December 31, 2008, and amendments to its revolving credit and note purchase agreements. Under the amended agreements, the existing quarterly leverage and interest expense coverage ratio covenants are temporarily replaced by a minimum adjusted earnings before interest, taxes, depreciation and amortization level for the fourth quarter of fiscal 2009 and each quarter during fiscal 2010, with the leverage and interest expense coverage ratio becoming effective for the fourth quarter of fiscal 2010. The minimum adjusted EBITDA level requirements, beginning in the fourth quarter of fiscal 2009, are: For the quarter ended March 31, 2009 ($25,000,000) For the two consecutive quarters ended June 30, 2009 ($22,000,000) For the three consecutive quarters ended September 30, 2009 ($14,000,000) For the four consecutive quarters ended December 31, 2009 $1,750,000 For the four consecutive quarters ended March 31, 2010 $35,000,000 In contemplation of the uncertainty that exists around the severity and duration of the global recession, the minimum adjusted EBITDA level requirements were established with a range of approximately $10 million to $20 million of cushion at each quarter end to allow for variability in the Company's projected results. The Company believes that this cushion is sufficient and that it will be able to maintain compliance with the minimum adjusted EBITDA levels through the end of fiscal 2010. Under the amended agreements, the Company has securitized certain assets, accepted other restrictive covenants, and will have to pay higher interest costs as described in the credit amendments. "As we focus on preserving cash and liquidity, we are pleased we were able to complete this amendment process," said Bradley C. Richardson, Executive Vice President - Corporate Strategy and Chief Financial Officer. "We believe these amended agreements, which are structured based on our assumptions about operating in a recessionary environment, will provide the company sufficient liquidity to execute our plans and consistently maintain our day- to-day business activities." On Tuesday, Modine reported its financial results for the third quarter of fiscal 2009: -- Sales volumes, excluding the impact of foreign currency exchange rates, declined 15 percent as a result of the weakening economy, instability in the global financial markets, and a corresponding downturn in the company's vehicular markets; -- Gross margin declined 300 basis points reflecting the decline in sales volumes, the underabsorption of fixed costs in the company's manufacturing facilities as the result of declining sales volumes, and a shift in product mix toward lower margin business; -- Impairment charges totaled $27.3 million and restructuring and repositioning charges totaled $27.2 million; -- Tax valuation allowance charges of $7.0 million were recorded against certain net deferred tax assets; -- A total of $8.7 million in revenue was recognized from the licensing of Modine-specific fuel cell technology to Bloom Energy and performance of transition services; -- Operating cash flows increased $19.8 million in the first nine months of fiscal 2009 compared to the prior year as a result of strong working capital management; -- Net debt has decreased by $5.3 million since March 31, 2008; and -- In light of the current volatility in the global economy and the impact in the markets, Modine is withdrawing its fiscal 2009 earnings guidance. The Company has implemented or is implementing: -- A 30% reduction in global senior leadership; -- A 25% workforce reduction in its Racine, Wisconsin, headquarters with a comparable reduction planned in its European headquarters; -- A targeted reduction of its direct costs proportional to the volume declines within its manufacturing facilities globally; -- Implementation of a 20% reduction in manufacturing overhead in North America with a similar reduction planned in Europe; -- A capital spending limit of $65 million in fiscal 2010, significantly below the company's recent historical levels; -- Rigorous working capital discipline through the active, customer-supported management of accounts receivable, as well as inventory management; and -- The suspension of the company's quarterly cash dividend as part of its near-term focus on preserving cash and liquidity." Modine President and Chief Executive Officer Thomas A. Burke said, "The weakening global economy and severe downturn in the vehicular markets have contributed to significant sales volume declines and margin compression, particularly in Europe. Despite these unprecedented conditions, we generated strong cash flow during the first nine months of fiscal 2009 with net debt declining since March 31, 2008. We continue to take aggressive actions to address our business performance and lower our underlying cost structure in light of the near-term economic outlook. We have secured a waiver of defaults and amendments to our company's debt agreements that provide us the liquidity needed to execute on our plans. At the same time, we are encouraged by recent new program opportunities in our thermal management product segments and, with the assistance of outside advisors, are actively refocusing our product portfolio to ensure we have the right products, processes and technologies for the future. With renewed support from our creditors, actions we are taking to align our cost structure to the market demands, and a more focused technology portfolio, we are confident Modine is solidly positioned to weather this recession." "In response to the near-term adverse conditions facing the company and our recent business performance, we continue to execute aggressively on the strategies of our four-point plan, which includes manufacturing realignment, portfolio rationalization, selling, general and administrative expense reduction, and capital allocation discipline," said Bradley C. Richardson, Executive Vice President - Corporate Strategy and Chief Financial Officer. "We have introduced a short-term emphasis on maximizing cash flow and are proceeding with a number of decisive measures to position the company to attain a more competitive cost base, improve our longer term competitiveness and more effectively capitalize on growth opportunities in our core thermal management markets." About Modine Modine Manufacturing Company -- http://www.modine.com/-- with fiscal 2008 adjusted revenues of $1.9 billion, specializes in thermal management systems and components, bringing highly engineered heating and cooling technology and solutions to diversified global markets. Modine products are used in light, medium and heavy-duty vehicles, heating, ventilation and air conditioning equipment, off-highway and industrial equipment, refrigeration systems, and fuel cells. The company employs approximately 7,900 people at 33 facilities worldwide in 15 countries. NAILITE INT'L: Liquidity Woes Blamed for Chapter 11 Bankruptcy -------------------------------------------------------------- Nailite International Inc. has filed for bankruptcy under Chapter 11 of Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware citing lack of liquidity resulting in its failure to pay the principal and interest owed to National City Bank under the credit agreement dated April 2003. The bank notified the company that the credit agreement has been terminated and the balance of the obligations has been accelerated. The bank said an administrative hold has been placed upon all deposit account of the company on Jan. 6, 2009. Tim Self, chief financial officer of the Company, blamed overall condition of the economy and the downturn in the domestic housing market for the Chapter 11 filing have overwhelmed the company's ability to satisfy its financial obligations. Mr. Self said housing starts were down 64% from the fourth quarter of 2007 while the company's earning decreased 176%. The company is now in talks with Premier Exteriors Holdings LP to provide debtor-in-possession facility to sustain the company's operations. Premier Exteriors purchased all of the rights of National City Bank under the agreement including the obligations of the company. The company has assets and debts between $50 million to $100 million, court document confirmed. The company owes $11,912,382 to Fiberboard RDV Corporation, $431,417 to Muehlstein, and $363,424 to Heritage Plastics Inc. About Nailite International Headquartered in Miami, Florida, Nailite International Inc. -- http://www.nailiteinternational.com -- produces injection polypropylene based cedar and masonry replica siding. The Debtor supplies residential construction and remodeling markets through various building materials and siding distributors. NORTH AMERICAN: Delays Filing of Form 10-Q for Qrtr. Ended Dec. --------------------------------------------------------------- North American Technologies Group Inc. disclosed in a regulatory filing dated February 11, 2009, that the resignation of its controller in 2008 has extended the time and effort necessary to compile and provide to the Company's independent accountants all documentation necessary to complete the audit for the fiscal year ended September 28, 2008 and, consequently, to prepare the Company's financial statements for the three months ended December 28, 2008. The Company believes it will be able to provide full information to its independent accountants so that the audit of its annual financial statements will be complete and the Form 10- KSB will be filed soon. The Form 10-Q for the first quarter will be filed promptly after that. The anticipated net loss of $1,149,821 for the three months ended December 28, 2008 will reflect a total change of $210,268 from the net loss of $939,553 for the three months ended December 30, 2007. This anticipated difference is primarily due to an increase in gross profit of $10,505 offset by an increase in selling, general and administrative expenses of $60,469 and an increase in interest expense of $164,421. North American Technologies Group Inc. (OTC BB: NATK) -- http://www.natk.com/-- is principally engaged in the manufacturing and marketing of engineered composite railroad crossties through its 100% owned subsidiary TieTek LLC. The company's composite railroad crosstie is a direct substitute for wood crossties, but with a longer expected life and with several environmental advantages. As reported in the Troubled Company Reporter on Sept. 11, 2008, North American Technologies Group Inc.'s consolidated balance sheet at June 29, 2008, showed $19,360,095 in total assets and $24,479,280 in total liabilities, resulting in a $5,119,185 stockholders' deficit. ORCHARDS VILLAGE: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------------ Cami Joner at Columbian.com reports that Orchards Village Investments, LLC, has filed for Chapter 11 bankruptcy protection. Columbian.com relates that Orchards Village said that its business has been hit hard by the recession. The economic downturn has made it hard for seniors to sell their homes and move into Orchards Village's rental units, says The Oregonian. According to The Oregonian, Orchards Village will retain Regency Pacific Inc., which manages its senior complex. The bankruptcy filing won't affect daily operations, Columbian.com reports, citing Orchards Village. Portland, Oregon-based Orchards Village Investments, LLC, operates a housing community. It opened a 107-unit center in 2006 at 10011 N.E. 118th Avenue in the Orchards area of Vancouver to provide independent and assisted living and Alzheimer. About 66.4%, or 71 units out of 107 units, are occupied at Orchards Village which cost $16.4 million to build. About 60 people work at the complex. The company filed for Chapter 11 bankruptcy protection on February 13, 2009 (Bankr. D. Ore. Case No. 09-30893). Anita G. Manishan, Esq., who has an office in Portland, Oregon, assists the company in its restructuring effort. The company listed $10 million to $50 million in assets and $10 million to $50 million in debts. PARENT CO: Sells Trademarks to Toys "R" Us for $2.15 Million ------------------------------------------------------------ The Parent Co. was authorized by the U.S. Bankruptcy Court for the District of Delaware to sell its assets last week. The Company sold: -- its trademarks, trade names and Web sites to Toys "R" Us Inc. for $2.15 million -- other assets to another buyer for $738,000. In December 2008, The Parent Company, a commerce, content and new media company for growing families, filed for bankruptcy protection and began to explore strategic alternatives, including a sale of some or all the company's businesses. Terms of the transaction were not disclosed. "eToys.com is a highly respected brand with a rich heritage of innovation and growth, and we look forward to championing the next phase of its evolution," said Jerry Storch, Chairperson and CEO of Toys"R"Us. "We believe the acquisition of eToys.com, together with BabyUniverse.com and ePregnancy.com, will advance our leadership in the toy and baby products sectors and position the company for strong market share growth. We are committed to providing loyal customers of these sites with an enhanced online experience, while continuing to offer a differentiated merchandise assortment and the service excellence they have come to expect." eToys.com and BabyUniverse.com offer a broad assortment of toys and juvenile products. Both sites have earned accolades from industry groups and customers alike for their outstanding customer service. ePregnancy.com is an established recognized platform for the delivery of content and new media resources to a national audience of expectant parents. All three Web sites will continue to operate under their current domain names. Toys"R"Us will assume responsibility for all operations of the sites including merchandising, site management, distribution and marketing. About Toys"R"Us Toys"R"Us, Inc. -- http://www.Toysrus.com-- is a retailer of toy and baby products. Currently it sells merchandise through more than 1,550 stores, including 846 Toys"R"Us and Babies"R"Us stores in the U.S., more than 700 international stores in 33 countries, which includes licensed and franchise stores, and through its Internet site. About The Parent Company Headquartered in Denver, Colorado The Parent Company -- http://www.etoys.com-- sells toys and children's products through its websites. Debtor-affiliate Parent Company is publicly traded on the NASDAQ under the ticker symbol KIDS. The Debtors lease two distribution centers in Blairs, Virginia, which holds inventory and ship products, and Ringgold, Virginia, which is used primarily for ship-alone items off-site storage. The company and eight of its affiliates filed for Chapter 11 protection on December 28, 2008 (Bankr. D. Del. Lead Case No. 08-13412). Laura Davis Jones, Esq., and Michael Seidl, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtors. The Debtors proposed Clear Thinking Group LLC as financial advisor; Omni Management Group LLC as claims agent; and Gibson & Rechan LLC as chief restructuring officer. When the Debtors filed for protection from their creditors, they listed $20,633,447 in total assets and $35,722,280 in total debts. PAULINE PILATE: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Pauline Pilate 1432 Crittenden Street NW Washington, DC 20011 Bankruptcy Case No.: 09-00110 Chapter 11 Petition Date: February 12, 2009 Court: United States Bankruptcy Court District of Columbia (Washington D.C.) Debtor's Counsel: Jeffrey M. Sherman Semmes Bowen & Semmes 1001 Connecticut Ave., Suite 1100 Washington, DC 20036 Tel: (202) 822-8250 Email: jsherman@semmes.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/dcb09-00110.pdf POLAROID CORP: Creditors Object to Sale; Says Assets Undervalued ---------------------------------------------------------------- Creditors of Polaroid Corp. have filed objections with the U.S. Bankruptcy Court for the District of Minnesota to the proposed sale of the Debtor's assets, including its brand name and trademarks, to an afiliate of Genii Capital, a Luxembourg-based private equity firm, for $42 million and the assumption of certain liabilities. As reported in the Troubled Company Reporter on Jan. 30, 2009, Polaroid Holding Company has entered into a "stalking horse" Asset Purchase Agreement with PHC Acquisitions. The auction will be held in March. Citing court papers, Emily Chasan of Reuters reports that Polaroid received four bids for the assets of the company. The Debtor determined that PHC was the highest and best offer. The Official Committee of Unsecured Creditors of Petters Group said that the proposed bid procedures, which require bidders to submit bids for substantially all of the assets of the Debtor as one block, limit the "bidding field", and that the liquidation value of the assets would be superior to the offer of PHC, as that would permit the trademarks to be sold separately. Sovereign Bancorp told the Court that the mid-range value of the trademarks is approximately $300 million. Acorn Capital Group also objected to the sale, citing that Polaroid's inventory, artwork and accounts receivables are valued at almost $64 million and that the Debtor's potential legal claims against other companies places its value at well over the PHC bid submitted by PHC. The creditors also objected to the $1.2 million Break-up Fee proposed to be paid to PHC should it lose its bid. About Polaroid Corporation Polaroid Corporation -- http://www.polaroid.com-- makes and sells films, cameras, and other imaging products. The company and 20 of its affiliates first filed for bankruptcy protection on October 12, 2001 (Bankr. D. Del. Lead Case No. 01-10864). Skadden, Arps, Slate, Meagher & Flom LLP represented the Debtors in their previous restructuring efforts. At that time, the company blamed steep decline in its revenue and the resulting impact on its liquidity. On June 28, 2002, the U.S. Bankruptcy Court for the District of Dealware approved the purchase of substantially all of Polaroid's business by One Equity Partners. The bid provides for cash consideration of $255 million plus a 35% interest in the new company for unsecured creditors. Polaroid Corp., together with 11 affiliates, filed its second voluntary petition for Chapter 11 on Dec. 18, 2008 (Bankr. D. Minn., Lead Case No. 08-46617). Judge Gregory F. Kishel handles the Chapter 22 case. James A. Lodoen, Esq., at Lindquist & Vennum P.L.L.P, is the Debtors' counsel. According to the company, the financial structuring process and the second bankruptcy filing are the result of events at Petters Group Worldwide, which has owned Polaroid since 2005. The founder of Petters Group and certain associates are currently under investigation for alleged acts of fraud that have compromised the financial condition of Polaroid and other entities owned by Petters Group. The company and its leadership team are not subjects of the ongoing investigation involving Petters Group. PRESERVE LLC: April 30 Is Bar Date for Filing Proofs of Claim ------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California has set April 30, 2009, as the bar date for creditors of and holders of ownership interests in Preserve, LLC, to file proofs of claims against or proofs of interests in the Debtor's estate. For claims of governmental units, proofs of claim must be filed (a) before 180 days after the date of the Order for Relief in this case, or by (b) April 30, 2009, whichever is later. In addition to filing proofs of claim with the Clerk of the Bankruptcy Court, a copy of the completed proof of claim must be mailed to the attorneys for the Debtor at this address: Broker & Associates Professional Corporation Attn: Jeffrey W. Broker, Esq. 18191 Von Karman Avenue, Suite 470 Irvine, CA 92612-7114 Riverside, California-based The Preserve, LLC, is in the business of acquiring and making real estate investments. The Company filed for Chapter 11 relief on Sept. 25, 2008 (Bankr. C. D. Calif. No. 08-23006). Jeffrey W. Broker, Esq., at Broker & Associates Professional Corporation assists the Company in its restructuring efforts. The Company listed assets of $100 million to $500 million and debts of $10 million to $50 million. PRESERVE LLC: Asks Court to Extend Plan Filing Period to May 22 --------------------------------------------------------------- The Preserve, LLC, asks the U.S. Bankruptcy Court for the Central District of California to extend its exclusive period to file a Plan until May 22, 2009, and its exclusive period to solicit acceptances of that plan until July 22, 2009. The Debtor tells the Court that its ability to file a confirmable plan of reorganization is impeded by the pendency of the "Point Center Litigation" in that its disputed, contingent and unliquidated claim needs to be determined in order for the Debtor to properly formulate its treatment under a Plan. In addition, the extension will permit the Debtor to negotiate in good faith with creditors and parties in interest regarding a Chapter 11 Plan. The Point Center Litigation is presently before the Bankruptcy Court, having been referred by the U.S. District Court. The Point Center Litigation arose as a result of a dispute with Point Center as to the nature, extent and validity of its claimed interest in the approximately 700 acres of real property within the "Legacy Highlands" project which is the Debtor's most valuable asset. The Legacy Highlands project is a master planned community set within the rolling hills of West Beaumont, in Riverside County, California. The Debtor disputes the Point Center Claim. In addition, the Debtor disputes that 46 hectares of land possibly within the legal description of the deed of trust securing the Point Center Claim was intended to be security for the loan arranged by Point Center. Riverside, California-based The Preserve, LLC, is in the business of acquiring and making real estate investments. The Company filed for Chapter 11 relief on Sept. 25, 2008 (Bankr. C. D. Calif. No. 08-23006). Jeffrey W. Broker, Esq., at Broker & Associates Professional Corporation assists the Company in its restructuring efforts. The Company listed assets of $100 million to $500 million and debts of $10 million to $50 million. QUEBECOR WORLD: Seeks March 31 Extension of Lease Decision Period ----------------------------------------------------------------- Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, have until February 28, 2009, to decide whether to assume or reject four leases of non-residential real property. In this regard, the Debtors ask Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York to extend the lease decision deadline until the date of the confirmation of a plan of reorganization with respect to the lease entered into with the Industrial Development Board of Dyer County for the property located at 2030 Sylvan Road, in Dyersburg, Tennessee. The Debtors also ask the Court to extend until March 31, 2009, their lease decision deadline with respect to two leases: * Pfizer, Inc.'s lease with Debtor Quebecor World (USA), Inc., for a property located at 150 East 42nd World (USA), 11th Floor, in New York; and * RAI, Inc.'s lease with Debtor Quebecor Printing RE, Inc., for a property at 12821 West Bluemound Road, in Brookfield, Wisconsin. Prior to the Lease Extension Deadline applicable to the Subject Leases, the Debtors will continue to timely perform all of their obligations under the Subject Leases, as required by Section 365(d)(3) of the Bankruptcy Code. Accordingly, approval of the Lease Extension Deadline as applicable to the Subject Leases is appropriate and warranted. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW) -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina and the British Virgin Islands. Ernst & Young, Inc., the monitor of Quebecor World Inc., and its affiliates' reorganization proceedings under the Canadian Companies' Creditors Arrangement Act, filed a petition under Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court for the Southern District of New York on September 30, 2008, on behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The chapter 15 case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at Allen & Overy LLP, in New York, serves as counsel to the chapter 15 petitioner. QWI and certain of its subsidiaries commenced the CCAA proceedings before the Quebec Superior Court (Commercial Division) on January 20, 2008. The following day, 53 of QWI's U.S. subsidiaries, including Quebecor World (USA), Inc., filed petitions under Chapter 11 of the U.S. Bankruptcy Code. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy before the U.S. Bankruptcy Court for the Southern District of New York (Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP, represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. QWI is the only entity involved in the CCAA proceedings that is not a Debtor in the Chapter 11 Cases. As of June 30, 2008, Quebecor World's unaudited consolidated balance sheet showed total assets of US$3,412,100,000 total liabilities of US$4,326,500,000 preferred shares of US$62,000,000 and total shareholders' deficit of US$976,400,000. The Hon. Robert Mongeon of the Quebec Superior Court has extended until Dec. 14, 2008, the stay under the Canadian Companies' Creditors Arrangement Act. Bankruptcy Creditors' Service, Inc., publishes Quebecor World Bankruptcy News. The newsletter tracks the proceedings initiated by Quebecor World Inc. and its U.S. and Non-U.S. subsidiaries under the U.S. Bankruptcy Code and the Companies' Creditors Arrangement Act in Canada. (http://bankrupt.com/newsstand/or 215/945-7000) QUEBECOR WORLD: Seeks to Implement Settlement Pact with CRC ----------------------------------------------------------- Quebecor World, Inc., and its subsidiaries that filed insolvency proceedings under the Canadian Companies' Creditors Arrangement Act, ask The Honorable Judge Robert Mongeon of the Quebec Superior Court of Justice to approve a settlement agreement and release QWI entered into with CRC Information Systems, Inc. In April 1986, BCE PubliTech, Inc., a corporate predecessor of QWI, entered into an end-user license agreement with CRC under which CRC has agreed to provide specified computer programs and related materials for use by QWI. In 2003, QWI commenced an action in Ontario, Canada, against CRC seeking a declaration that QWI could use CRC's software in more than one location and that no further amounts were owing under the License. CRC counterclaimed against QWI alleging breach of the License, copyright infringement and misappropriation of trade secrets. CRC sought a declaration for damages of more than $20 million. Contemporaneously, CRC commenced an action in Arizona against Quebecor World (USA), Inc., asserting the same allegations. Ultimately, as a result of negotiations, QWI, QWUSA, and CRC were able to settle their dispute and, in November 2007, executed minutes of the settlement. The settlement provides that in exchange for a payment of $1.6 million, all of the litigation and possible claims relating to the use of the Software and the terms for the future use of the Software under the License would be resolved. The payment is payable in three installments: $400,000 on November 23, 2007, $400,000 on December 14, 2007, and $800,000 on January 31, 2008. As of January 21, 2008, QWI had made the first two payments to CRC totaling $800,000, resulting in an outstanding balance of $800,000. Although QWI, QWUSA, and CRC were able to settle their dispute regarding their respective rights and obligations under the License Agreement, a new dispute between QWI and CRC arose as to the non-payment of the final installment and its effect on the agreements provided under the November 2007 Settlement. Ernst & Young Inc., the Court-appointed monitor of the CCAA Applicants, relates that QWI needs the CRC Software to continue its current operations, as well as its post-CCAA operations and continued access to and unimpeded use of the Software is therefore require. Accordingly, QWI, QWUSA, and CRC continued discussions and have now reached a further agreement, which required QWI to pay $400,000 as full and final settlement, instead of the $800,000 under the November 2007 Settlement. In exchange for the payment, QWI would obtain: (a) a full and final release and settlement of all allegations as to the infringement of the License, misuse of trade secrets and unfair competition made in both the Ontario and Arizona actions; and (b) modifications to the terms of the License to provide for the ongoing use of the Software by QWI and any of its affiliates or subsidiaries. The CCAA Monitor says it is in the best interest of the CCAA Applicants for the settlement to be approved. The Monitor says it has reviewed and approved the terms of the settlement. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW) -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina and the British Virgin Islands. Ernst & Young, Inc., the monitor of Quebecor World Inc., and its affiliates' reorganization proceedings under the Canadian Companies' Creditors Arrangement Act, filed a petition under Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court for the Southern District of New York on September 30, 2008, on behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The chapter 15 case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at Allen & Overy LLP, in New York, serves as counsel to the chapter 15 petitioner. QWI and certain of its subsidiaries commenced the CCAA proceedings before the Quebec Superior Court (Commercial Division) on January 20, 2008. The following day, 53 of QWI's U.S. subsidiaries, including Quebecor World (USA), Inc., filed petitions under Chapter 11 of the U.S. Bankruptcy Code. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy before the U.S. Bankruptcy Court for the Southern District of New York (Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP, represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. QWI is the only entity involved in the CCAA proceedings that is not a Debtor in the Chapter 11 Cases. As of June 30, 2008, Quebecor World's unaudited consolidated balance sheet showed total assets of US$3,412,100,000 total liabilities of US$4,326,500,000 preferred shares of US$62,000,000 and total shareholders' deficit of US$976,400,000. The Hon. Robert Mongeon of the Quebec Superior Court has extended until Dec. 14, 2008, the stay under the Canadian Companies' Creditors Arrangement Act. Bankruptcy Creditors' Service, Inc., publishes Quebecor World Bankruptcy News. The newsletter tracks the proceedings initiated by Quebecor World Inc. and its U.S. and Non-U.S. subsidiaries under the U.S. Bankruptcy Code and the Companies' Creditors Arrangement Act in Canada. (http://bankrupt.com/newsstand/or 215/945-7000) QUEBECOR WORLD: Pens Deal on Sale of Paper by Linens 'n Things -------------------------------------------------------------- Debtor Quebecor World (USA), Inc., and Linens 'n Things, Inc., are parties to a letter of commitment and a printing services agreement. QWUSA filed a $1,935,513 claim against Linens 'n Things in Linens' bankruptcy case pending before the U.S. Bankruptcy Court for the District of Delaware on account of the printing services provided by QWUSA to Linens' prior to Linens' Petition Date. QWUSA alleges that it is owed an additional $20,000 for prepetition services provided to Linens and asserts a $21,147 claim for postpetition services. Linens has also filed proofs of claim against QWUSA and all of its affiliated debtor entities in an unliquidated amount. QWUSA asserts that its Claims are secured by a valid security interest in certain paper that is currently in its possession under the Agreements. Linens disputes that the QWUSA Lien is valid, perfected and enforceable and asserts, among other things, that the Paper is property of Linens' estate in Linens' bankruptcy case. To effectuate the expeditious sale of the Paper, the Parties entered into an interim agreement and agreed in the ordinary course of business that the proceeds of the Sale would be held in a joint escrow account, and distributed pursuant to the terms of the Letter Agreement. Judge Peck of the U.S. Bankruptcy Court for the Southern District of New York, who is overseeing QWUSA's bankruptcy case, approved the parties' stipulation. The stipulation provides that: (a) the parties will be bound by the terms of the Letter Agreement and satisfy the conditions and requirements provided in the Letter Agreement; (b) QWUSA consents to the Sale of the Paper by Linens and has agreed to cooperate to prepare the Paper for Sale; (c) Linens agrees that with respect to all Paper where the Sale of the Paper is not consummated within 90 days of the date of the Letter Agreement, or the later date as agreed to by QWUSA in writing, the Paper will become the property of QWUSA free and clear of any interest Linens alleges in the Paper or any proceeds from the Paper and QWUSA may dispose of the Paper in any manner it may determine; and (d) upon the consummation of the Sale of the Paper, all cash received from the Sale will be disbursed in this manner: * LNT will promptly pay to QWUSA from the first available sums received on account of the Sale Proceeds $21,147 for the Postpetition Claim; * the balance of the Sale Proceeds, after payment of the Postpetition Claim, will be divided between the Parties, and QWUSA will be paid 20% of the Sale Proceeds and Linens will be paid 80% of the Sale Proceeds; and * Linens will pay QWUSA from Linens' Share 80% of the expenses QWUSA has incurred in preparing the Paper for Sale, which expenses will be calculated by multiplying the aggregate tons of the Paper sold by $20 per ton or by $10 per ton. QWUSA's Prepetition Claim will be reduced by QWUSA's Share less 20% of the expenses QWUSA has incurred in preparing the Paper for Sale. The Stipulation is subject to approval by the Delaware Bankruptcy Court. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW) -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina and the British Virgin Islands. Ernst & Young, Inc., the monitor of Quebecor World Inc., and its affiliates' reorganization proceedings under the Canadian Companies' Creditors Arrangement Act, filed a petition under Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court for the Southern District of New York on September 30, 2008, on behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The chapter 15 case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at Allen & Overy LLP, in New York, serves as counsel to the chapter 15 petitioner. QWI and certain of its subsidiaries commenced the CCAA proceedings before the Quebec Superior Court (Commercial Division) on January 20, 2008. The following day, 53 of QWI's U.S. subsidiaries, including Quebecor World (USA), Inc., filed petitions under Chapter 11 of the U.S. Bankruptcy Code. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy before the U.S. Bankruptcy Court for the Southern District of New York (Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP, represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. QWI is the only entity involved in the CCAA proceedings that is not a Debtor in the Chapter 11 Cases. As of June 30, 2008, Quebecor World's unaudited consolidated balance sheet showed total assets of US$3,412,100,000 total liabilities of US$4,326,500,000 preferred shares of US$62,000,000 and total shareholders' deficit of US$976,400,000. The Hon. Robert Mongeon of the Quebec Superior Court has extended until Dec. 14, 2008, the stay under the Canadian Companies' Creditors Arrangement Act. Bankruptcy Creditors' Service, Inc., publishes Quebecor World Bankruptcy News. The newsletter tracks the proceedings initiated by Quebecor World Inc. and its U.S. and Non-U.S. subsidiaries under the U.S. Bankruptcy Code and the Companies' Creditors Arrangement Act in Canada. (http://bankrupt.com/newsstand/or 215/945-7000) RICETTA'S INC: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Ricetta's, Inc. 29 Western Avenue South Portland, ME 04106 Tel: (207) 878-8778 Fax: (207) 775-7906 Bankruptcy Case No.: 09-20166 Chapter 11 Petition Date: February 12, 2009 Court: United States Bankruptcy Court District of Maine (Portland) Company Description: The debtor operates a restaurant specializing in pizza and pasta. See: http://www.ricettas.com/ Debtor's Counsel: Jeffrey T. Piampiano, Esq. Drummond Woodsum & MacMahon 84 Marginal Way, Suite 600 Portland, ME 04101-2480 Tel: (207) 772-1941 Fax: (207) 772-3627 Email: jpiampianoecf@dwmlaw.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Ronald A. Stephan, Jr., president of the company. A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/meb09-20166.pdf RIVER ELKS: Can't Reorganize, Seeks Chapter 7 Conversion -------------------------------------------------------- River Elks, L.L.C., asks the U.S. Bankruptcy Court for the District of Arizona to convert its Chapter 11 case to one under Chapter 7 of the Bankruptcy Code. The Debtor tells the Court that its case was filed as a single asset real estate case and since the automatic stay has been lifted by the Court, the Debtor no longer has any real property to develop, and therefore would be unable to propose a viable plan of reorganization under Chapter 11 of the Bankruptcy Code. Prior to conversion, all quarterly fees due the U.S. Trustee will be paid. Based in Scottsdale, Ariz., River Elks, LLC is a real estate developer. The company filed a petition for Chapter 11 on June 18, 2008 (D. Ariz. Case No. 08-07340). Joel F. Newell, Esq., at Carmichael & Powell, P.C., represents the Debtor as counsel. When the Debtor filed for protection from its creditors, it listed total assets of $12,580,050, and total debts of $9,053,589. SAM STEVENS: Files for Bankruptcy; Must Tear Down House ------------------------------------------------------- Seth Slabaugh at The Star Press reports that Sam D. Stevens has declared bankruptcy, and has been ordered by the unsafe building hearing authority to tear down his collapsing house at 714 N. Elm Street. The Star Press quoted Don Broyles, who lives next door to Mr. Stevens' house, as saying, "The rear of the home is collapsing. The rear wall of the house has bowed out and could collapse with no notice at all." The report says that the house has been vacant for several years. According to The Star Press, the authority has imposed $5,000 in civil penalties against Mr. Stevens that hasn't been paid. The Star Press quoted Gretchen Cheesman, the director of the authority, as saying, "I'd like for him [Mr. Stevens] to pay for the demolition instead of the city -- if I can find him. If he's out of bankruptcy, we can go after him for the civil penalties plus demolition costs plus administrative fees." The house will be demolished this year, The Star Press relates. SANTA MONICA MEDIA: Receives Non-Compliance Notice From NYSE ------------------------------------------------------------ Santa Monica Media Corporation received notice from the NYSE Alternext US, LLC, indicating that it was below certain additional continued listing standards of the Exchange, specifically that the Company had not held an annual meeting of stockholders in 2008, as set forth in Section 704 of the Exchange's Company Guide. The notification from the Exchange indicates that the Company has until March 10, 2009, to submit a plan advising the Exchange of action it has taken, or will take, that would bring the Company into compliance with all continued listing standards by August 11, 2009. Upon receipt of the Company's plan, which the Company anticipates filing with the Exchange prior to the March 10, 2009 deadline, the Exchange will evaluate the plan and make a determination as to whether the Company has made a reasonable demonstration in the plan of an ability to regain compliance with the continued listing standards, in which case the plan will be accepted. If accepted, the Company will be able to continue its listing, during which time the Company will be subject to continued periodic review by the Exchange's staff. If the Company's plan is not accepted, the Exchange could initiate delisting procedures against the Company. Los Angeles, California-based Santa Monica Media Corporation (NYSE Alternext US: MEJ.U, MEJ, MEJ.WS) is a blank check company organized for the purpose of acquiring through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination one or more operating businesses in the in the communications, media, gaming or entertainment industry. SHARE BUILDING: Files for Bankruptcy As Home Sales Fall ------------------------------------------------------- Share Building Products, Inc., sought bankruptcy protection from creditors as home sales in Wisconsin fell more than 19 percent last year, Bloomberg News reported. Based in Germantown, Wisconsin, Share Building Products, Inc. makes stone veneer used in the construction of homes, apartments and office buildings. Share Building filed for Chapter 11 bankrutpcy on Feb. 13, 2009 (Bankr. E.D. Wi, Case No. 09-21553). The company tapped Jonathan V. Goodman, Esq. as counsel. In its bankruptcy petition, it estimated assets and debts of $10 million to $50 million. SIRIUS XM: Secures Loan From Liberty, Avoids Bankruptcy ------------------------------------------------------- SIRIUS XM Radio Inc. and Liberty Media Corporation have entered into agreements pursuant to which Liberty will invest an aggregate of $530 million in the form of loans to SIRIUS XM and its subsidiaries and receive an equity interest in SIRIUS XM. Under the terms of the agreements, the investments will be funded in two separate phases: -- The first phase includes a $280 million senior secured loan from Liberty to SIRIUS XM, $250 million of which set to be funded on February 17. The proceeds of that loan will be used by SIRIUS XM to repay $171.6 million of its maturing 2�% Convertible Notes due February 17, 2009, and the balance will be used for general corporate purposes, including working capital and transaction costs. The loan will bear interest at a rate of 15%, mature in December 2012, and be secured by the assets securing SIRIUS XM's existing term credit agreement. -- The second phase provides an additional loan of $150 million to XM Satellite Radio, SIRIUS XM's wholly owned subsidiary. Liberty has also agreed to offer to purchase up to $100 million of the loans outstanding under XM Satellite Radio's existing credit facilities from the lenders. Upon completion of the second phase of the Liberty investments, SIRIUS XM will issue Liberty an aggregate of 12.5 million shares of preferred stock convertible into 40% of the common stock of SIRIUS XM. In addition, Liberty will receive seats on the SIRIUS XM Board of Directors proportionate to its equity ownership. It is expected that John Malone and Greg Maffei will join the SIRIUS XM Board of Directors. Liberty's obligation to consummate the second phase of its investment is subject to various closing conditions. Mel Karmazin, Chief Executive Officer of SIRIUS XM Radio, said, "We are pleased to have come to this agreement with Liberty Media, particularly in light of today's challenging credit markets. Liberty's investment is an important validation of what SIRIUS XM has already achieved and a vote of confidence in what we will achieve. This agreement enables Sirius XM to continue to develop the opportunities first outlined in the merger of Sirius and XM. By strengthening our capital structure and enhancing our financial flexibility, this investment allows us to continue providing the great content and innovative programming our subscribers know and love." "We are excited to be investing in SIRIUS XM. We have been impressed with the company, its operations and management team," said Greg Maffei, president and CEO of Liberty. "SIRIUS XM's ability to grow subscribers and revenue in a difficult financial and auto market is indicative of how listeners view this as a "must have" service." The agreements, and the transactions contemplated by the agreements, do not constitute a change in control for SIRIUS XM under its outstanding debt instruments and are not subject to the approval of the Federal Communications Commission. The receipt by Liberty of voting stock is subject to expiration of the applicable waiting period under the Hart-Scott-Rodino Act. Important details of the agreements relating to this investment will be available on a Current Report on Form 8-K which SIRIUS XM expects to file with the Securities and Exchange Commission. Liberty has advised that its investment will be attributed to the Liberty Capital group and is not expected to affect the timing of the previously announced split-off of a portion of Liberty Entertainment. About Liberty Media Liberty Media Corporation owns interests in electronic retailing, media, communications and entertainment businesses. Those interests are attributed to three tracking stock groups: (1) the Liberty Interactive group, which includes Liberty's interests in QVC, Provide Commerce, Backcountry.com, BUYSEASONS, Bodybuilding.com, IAC/InterActiveCorp, and Expedia, (2) the Liberty Entertainment group, which includes Liberty's interests in The DIRECTV Group, Inc., Starz Entertainment, FUN Technologies, Inc., GSN, LLC, WildBlue Communications, Inc., and Liberty Sports Holdings LLC, and (3) the Liberty Capital group, which includes all businesses, assets and liabilities not attributed to the Interactive group or the Entertainment group including its subsidiaries Starz Media, LLC, Atlanta National League Baseball Club, Inc., and TruePosition, Inc., and minority equity investments in Time Warner Inc. and Sprint Nextel Corporation. About Sirius XM Radio Headquartered in New York, Sirius XM Radio Inc. (SIRI) -- http://www.sirius.com/-- formerly Sirius Satellite Radio Inc., is a satellite radio provider. The company offers over 130 channels to its subscribers, 69 channels of 100% commercial-free music and 65 channels of sports, news, talk, entertainment, traffic, weather, and data content. Its primary source of revenue is subscription fees, with most of its customers subscribing to SIRIUS on either an annual, semi-annual, quarterly or monthly basis. The company derives revenue from activation fees, the sale of advertising on its non-music channels, and the direct sale of SIRIUS radios and accessories. Various brands of SIRIUS radios are Best Buy, Circuit City, Costco, Crutchfield, Sam's Club, Target and Wal-Mart. * * * As reported by the Troubled Company Reporter on Jan. 20, 2009, Standard & Poor's Ratings Services said it lowered its corporate credit rating on Sirius XM Radio Inc. to 'CCC' from 'CCC+'. S&P also lowered the issue-level ratings on the debt of Sirius XM Radio Inc. and of Sirius' unrestricted subsidiaries, XM Satellite Radio Holdings Inc. and XM Satellite Radio Inc., which remain on CreditWatch, though the implications are revised to negative from developing. S&P could affirm or lower the issue-level ratings pending S&P's review of additional information and follow-up discussions with management. The outlook is negative. New York City-based Sirius XM had total debt outstanding of $3.37 billion as of Sept. 30, 2008. SMITH MOUNTAIN: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Smith Mountain Lake Partners LLC 101 Duncraig Dr., Suite 108 Lynchburg, VA 24502 Bankruptcy Case No.: 09-60435 Chapter 11 Petition Date: February 12, 2009 Court: United States Bankruptcy Court Western District of Virginia (Lynchburg) Judge: William E. Anderson Debtor's Counsel: Darren T. Delafield, Esq. P.O. Box 5085 Roanoke, VA 24012-5085 Tel: (540) 366-8665 Fax: (540) 366-8663 Email: delafieldpc@verizon.net Total Assets: $6,500,001 Total Debts: $7,002,943 The petition was signed by James G. Fields, executive director of the company. A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/vawb09-60435.pdf STAR TRIBUNE: Seeks New Deals With Labor Unions ----------------------------------------------- Sharon Schmickle at MinnPost reports that The Star Tribune Co. is seeking new deals with its labor unions. MinnPost relates that Andrew Staab, a St. Paul attorney who represents members of union Teamsters Local 1M, said that the union's negotiating committee will meet this week to evaluate the offer. According to MinnPost, Star Tribune had started to cut it workforce through layoffs and voluntary buyouts more than a year before it filed for bankruptcy. The report says that employees represented by the Newspaper Guild agreed to more than $2 million a year in concessions in July 2008 in a three-year contract. The unions rejected Star Tribune's request for deeper give backs in the weeks before the newspaper's bankruptcy filing, the report states. Citing Mr. Staab, MinnPost says the unions' representatives have signed confidentiality agreements that prevent them from disclosing details of Star Tribune's proposals to employees. Mr. Staab said that union members "have seen the offer and there has been a lot of grumble, grumble," according to the report. "We need to come back with a counterproposal or something. We can't just flat out reject it, based on the fact that bankruptcy law allows for the company to put it on a fast track for contract abrogation. The Star Tribune is not in bankruptcy because of its labor costs, but unfortunately the bankruptcy code allows for labor costs to be an easy target," MinnPost quoted Mr. Staab as saying. Unions, according to MinnPost, believe that the debt that was acquired when Avista Capital Partners purchased Star Tribune in 2007 was mainly to blame for the newspaper's financial problems. The report says that Avista Capital put up $100 million of the $530 million it paid for Star Tribune and borrowed the rest. MinnPost relates that the Hon. Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York ruled in January that Star Tribune can spend money at its disposal to make its payroll and pay vendors, suppliers, and others engaged in the "orderly continuation" of the business. According to the report, Judge Drain has twice put off a final hearing on that "cash collateral" arrangement. A February 13 hearing has been rescheduled for February 23, the report states. According to David Brauer at MinnPost, Star Tribune's co-owner, chairperson, and publisher, Chris Harte, was reported in January as among several suitors for the Austin American Statesman. Court documents say that Mr. Harte owns 4.11% of Star Tribune. About Star Tribune Headquartered in Minneapolis, Minnesota, The Star Tribune Company -- http://www.startribune.com-- operate the largest newspaper in the U.S. state of Minnesota and published seven days each week in an edition for the Minneapolis-Saint Paul metropolitan area. The company and its affiliate, Star Tribune Holdings Corporation, filed for Chapter 11 protection on January 15, 2009 (Bankr. S.D. N.Y. Lead Case No. 09-10245). Marshall Scott Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. The Debtors proposed Blackstone Group LP as their financial advisor; and Curtis, Mallet-Prevost, Colt & Mosle LLP as conflict counsel; and Garden City Group Inc. as claims agent. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million to $500 million each. STATION CASINOS: S. Blake Murchison Challenges Firm's Plan ---------------------------------------------------------- The Associated Press reports that bondholder S. Blake Murchison has filed a lawsuit against Station Casinos Inc. in the U.S. District Court in Las Vegas, challenging the company's debt restructuring plan. The AP relates that Station Casinos said earlier in February that it will exchange high-cost debt for low-cost debt and a $244 million capital infusion. Station Casinos, says The AP, will to have the transaction approved through a prepackaged bankruptcy filing. As reported by the Troubled Company Reporter on February 4, 2009, Station Casinos is negotiating a pre-packaged Chapter 11 plan. According to The AP, Mr. Murchison claimed that the plan would harm him and other bondholders. The AP states that G. Mark Albright and Martin Muckleroy, the attorneys for Mr. Murchison, are seeking class-action status for the lawsuit. About Station Casinos Station Casinos, Inc. is the leading provider of gaming and entertainment to the residents of Las Vegas, Nevada. Station's properties are regional entertainment destinations and include various amenities, including numerous restaurants, entertainment venues, movie theaters, bowling and convention/banquet space, as well as traditional casino gaming offerings such as video poker, slot machines, table games, bingo and race and sports wagering. Station owns and operates Palace Station Hotel & Casino, Boulder Station Hotel & Casino, Texas Station Gambling Hall & Hotel, Sunset Station Hotel & Casino, Santa Fe Station Hotel & Casino, Red Rock Casino Resort Spa, Fiesta Rancho Casino Hotel, Fiesta Henderson Casino Hotel, Wild Wild West Gambling Hall & Hotel, Wildfire Casino Rancho, Wildfire Casino Boulder, formerly known as Magic Star Casino, Gold Rush Casino and Lake Mead Casino. Station also owns a 50% interest in Green Valley Ranch Station Casino, Aliante Station Casino & Hotel, Barley's Casino & Brewing Company, The Greens and Renata's Casino in Henderson, Nevada and a 6.7% interest in the joint venture that owns the Palms Casino Resort in Las Vegas, Nevada. In addition, Station manages Thunder Valley Casino near Sacramento, California on behalf of the United Auburn Indian Community. TERRY WOODS: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Terry R. Woods Angela J. Woods 2318 Alexander Farms Ct. Marietta, GA 30064 Bankruptcy Case No.: 09-63879 Chapter 11 Petition Date: February 13, 2009 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Judge: Mary Grace Diehl Debtor's Counsel: Eric E. Thorstenberg, Esq. 6065 Roswell Rd., Suite 621 Atlanta, GA 30328 Tel: (404) 843-8491 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/ganb09-63879.pdf TODD PETERSON: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Todd J. Peterson aka Todd Jordan Peterson aka Todd Peterson 20 Winthrop Avenue Riverside, CT 06878 Bankruptcy Case No.: 09-50241 Chapter 11 Petition Date: February 13, 2009 Court: United States Bankruptcy Court District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: Ira B. Charmoy, Esq. Zeldes Needle & Cooper 1000 Lafayette Blvd. Bridgeport, CT 06601 Tel: (203) 333-9441 Fax: (203) 333-1489 Email: icharmoy@znclaw.com Total Assets: $2,716,170 Total Debts: $2,712,579 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/ctb09-50241.pdf TRUMP ENTERTAINMENT: Back in Ch. 11 to Avoid Involuntary Petition ----------------------------------------------------------------- Trump Entertainment Resorts Inc. and its affiliates filed petitions for Chapter 11 protection from creditors before the U.S. Bankruptcy Court for the District of New Jersey on February 17, 2009. This is Trump's third bankruptcy filing, and second in three and a half years. Trump Entertainment last filed for bankruptcy on Nov. 21, 2004, and obtained confirmation of a reorganization plan on April 11, 2005. The filing did not include any "first day" motions. The Company, however, said in a statement that it has requested court approval to continue to pay its vendors in the normal course of business. Additionally, the Company is not seeking debtor-in-possession financing as it currently has adequate cash resources to fund its ongoing business operations. There can be no assurance that any agreement with respect to any plan of reorganization will be reached or, if any agreement is reached, as to the terms thereof, the Company added in its statement. The Company filed for bankruptcy after holders of 8.5% senior secured notes due 2015 indicated that they are preparing to file an involuntary petition against Trump Entertainment and its affiliates upon expiration of their forbearance agreement. The Company sought forbearance from lenders after it missed a $53 million interest payment due Dec. 1, 2008, on the Senior Notes. The Company's board said that it is in the best interest of the Company and its stakeholders to file a voluntary petition under Chapter 11 before an involuntary bankruptcy petition is filed. According to Bloomberg News, Trump Entertainment has been hit by lower gambling revenues, as annual gambling revenues in Atlantic City, New Jersey, plunged the most on record. John Burke, the Company's chief financial officer, said the casinos are "overleveraged" and experienced a decline in revenue resulting from the "dramatic downturn" in the economy and competition. According to The Wall Street Journal, the bondholders group includes hedge funds Avenue Capital Group of New York and Contrarian Capital Management of Greenwich, Conn., and other holders. Donald Trump, the WSJ reported, said Feb. 13 that he'd resign as chairman of the board due to disagreements with the noteholders, including the plans to send the Company to bankruptcy. The resignation, Bloomberg said, two days before the Company's bankruptcy filing, could threaten to kill the $270 million sale of its Trump Marina Casino. The price of the sale includes the settlement of a lawsuit Trump Entertainment filed against the property's buyer, Richard T. Fields. The Company said that it had $2,055,555,000 in assets and $1,737,726,000 in debts as of Dec. 31, 2008. In addition to $1.25 billion second-lien notes, debt includes $489 million in first- lien bank debt where Beal Bank serves as agent. There is $33.2 million in trade debt and $6 million in liabilities on leases, Bloomberg's Bill Rochelle said, citing the Company's CFO. The Company, in its bankruptcy petition, said that it estimates that funds will be available for distribution to unsecured creditors, who are behind in priority over administrative expense claimants and creditors who have collateral. The 20 largest unsecured creditors are owed about $1.32 billion, court papers show. U.S. Bank NA, as agent for noteholders, is listed as the largest unsecured creditor with a claim for $1.31 billion. Donald Trump, Morgan Stanley & Co., Franklin Mutual advisers, LLC, and Sam Chang, each own 5% or more of the 31,718,376 shares of stock issued by the Company. Donald Trump, which reportedly has a 28% stake in the Company, has personally guaranteed $250 million of the Company's $1.25 billion of bond debt, The Wall Street Journal said. In its new Chapter 11 case, Trump Entertainment will tap: -- Weil, Gotshal & Manges LLP and McCarter & English LLP as attorneys; -- Ernst & Young LLP for auditing and tax related services; and -- Lazard Freres & Co LLC as financial advisors. Judge Judith H. Wizmur has been assigned to take Trump's case. Mr. Trump's Privately Held Real Estate Not Part of Filing Trump Entertainment Resorts, Inc., owns, through its interest in Trump Entertainment Resorts Holdings, L.P., and operates three casino resort properties: Trump Taj Mahal Casino Resort and Trump Plaza Hotel and Casino, located on the Boardwalk in Atlantic City, New Jersey, and Trump Marina Hotel Casino, located in Atlantic City's Marina District. Donald Trump is a shareholder of the Company and is not involved in its daily operations. The Company notes that it is separate and distinct from Mr. Trump's privately held real estate and other holdings, which the Company understands encompasses substantially all of his net worth. The Company's chief executive officer, Mark Juliano, noted, "We are focused on our goal of successfully restructuring our company to reduce our debt in order to strengthen our balance sheet during this difficult economic period. This filing will result in no immediate change in our daily operations, and we expect to make no changes regarding our operating structure or philosophy. Importantly, our customers will not be affected by this filing, and there will be no change to our TrumpONE or other marketing programs. We remain focused on operating as efficiently as possible in this strained economic environment, and we appreciate the ongoing dedication of our team towards our mutual goal of building a successful company together." About Trump Entertainment Resorts Inc. Based in Atlantic City, New Jersey, Trump Entertainment Resorts Inc. (NASDAQ: TRMP) -- http://www.trumpcasinos.com/-- owns and operates three casino hotel properties in Atlantic City, New Jersey, which include Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino, and Trump Marina Hotel Casino. The company conducts gaming activities and provides customers with casino resort and entertainment. Donald Trump is a shareholder of the company and, as its non- executive Chairman, is not involved in the daily operations of the company. The company is separate and distinct from Mr. Trump's privately held real estate and other holdings, which the company understands encompasses substantially all of his net worth. As reported in the Troubled Company Reporter on Nov. 12, 2008, Trump Entertainment Resorts, Inc. reported that for three months ended Sept. 30, 2008, its net loss was 139.1 million compared to net income of $6.6 million for the same period in the previous year. For nine months ended Sept. 30, 2008, the company's net loss was $187.6 million compared to net loss of $15.0 million for the same period in the previous year. * * * Trump Entertainment Resorts Inc.'s 8-1/2% senior secured notes due 2015 carry Moody's Investors Service's Caa1 rating which was placed in April 2008 and Standard & Poor's CCC+ rating which was placed in May 2008. TRUMP ENTERTAINMENT: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: TCI 2 Holdings, LLC fka Trump Casinos II, Inc. fka Trump Casinos II, Inc. 15 South Pennsylvania Avenue Atlantic City, NJ 08401 Bankruptcy Case No.: 09-13654 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Trump Entertainment Resorts, Inc. 09-13655 Trump Entertainment Resorts Holding, L.P. 09-13656 Trump Entertainment Resorts Funding, Inc. 09-13658 Trump Entertainment Resorts Development Company 09-13659 Trump Taj Mahal Associates, LLC 09-13660 Trump Plaza Associates, LLC 09-13661 Trump Marina Associates, LLC 09-13662 TER Management Co., LLC 09-13663 TER Development Co., Inc. 09-13664 Related Information: The Debtors (NASDAQ: TRMP) own and operate three casino hotel properties in Atlantic City, New Jersey, which include Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino, and Trump Marina Hotel Casino. The company conducts gaming activities and provides customers with casino resort and entertainment. Donald Trump is a shareholder of the company and, as its non-executive Chairman, is not involved in the daily operations of the company. The company is separate and distinct from Mr. Trump's privately held real estate and other holdings, which the company understands encompasses substantially all of his net worth. As reported in the Troubled Company Reporter on Nov. 12, 2008, Trump Entertainment Resorts, Inc. reported that for three months ended Sept. 30, 2008, its net loss was 139.1 million compared to net income of $6.6 million for the same period in the previous year. For nine months ended Sept. 30, 2008, the Company's net loss was $187.6 million compared to net loss of $15.0 million for the same period in the previous year. At Sept. 30, 2008, the Company's balance sheet showed total assets of $2.07 billion, total liabilities of $2.03 billion and shareholders' deficit of about $44.8 million. The Wall Street Journal says that Trump Entertainment has a total of $1.25 billion in bond debt, and has about $500 million in bank debt. See: http://www.trumpcasinos.com/ Chapter 11 Petition Date: February 17, 2009 Court: District of New Jersey (Camden) Judge: Judith H. Wizmur Debtors' Counsel: Charles A. Stanziale, Jr., Esq. cstanziale@mccarter.com McCarter & English, LLP Four Gateway Center 100 Mulberry Street Newark, NJ 07102 Tel: (973) 622-4444 Fax: (973) 624-7070 Auditor and Accountant: Ernst & Young LLP Financial Advisor: Lazard Freres & Co. LLC Estimated Assets: $2,055,555,000 as of Dec. 31, 2008 Estimated Debts: $1,737,726,000 as of Dec. 31, 2008 The Debtors' Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ U.S. Bank National Association $1,310,896,699 Corporate Trust Services PD-OR-P6TD 555 SW Oak Street Portland, OR 97204 Bovis Lend Lease, Inc. $7,474,413 821 Alexander Road Princeton, NJ 08540 Thermal Energy Limited 1 $1,864,212 1825 Atlantic Avenue Atlantic City, NJ 08401 Hess Corporation $1,363,403 PO Box 25218 Lehigh, PA 25218 Casino Control Fund $1,146,345 Tennessee Avenue and Boardwalk Atlantic City, NJ 08401 Bally Gaming Inc. $482,057 Atlantic Limousine Inc. $320,124 Amerihealth Casualty Services $263,792 Sysco Food Services of Phila $261,832 LLC Otis Elevator Co $242,611 Accents/KF Investments $197,733 WMS Gaming Inc. $178,352 IGT, Inc. $175,117 Atlantic City Linen Supply Inc. $155,366 Sales Corp. $150,920 Horizon Blue Cross Blue $150,861 Shield of New Jersey Agilysys NV LLC $145,764 Clear Channel Outdoor, Inc. $141,835 Conner Strong Companies Inc. $124,404 Harco Industries Inc. USA $119,691 The petition was signed by John P. Burke, chief financial officer. TULLY'S COFFEE: Posts $600,000 Net Loss in Quarter Ended Dec. 28 ---------------------------------------------------------------- On February 11, 2009, Tully's Coffee Corporation disclosed its revenues and operating results for the third quarter of its 2009 fiscal year, which ended December 28, 2008. Tully's reported a net loss of $600,000 for the Third Quarter Fiscal 2009 as compared to the net loss of $2,423,000 for the Third Quarter Fiscal 2008, an improvement of $1,823,000 or 75.2%. "We continue our positive earnings trends during the past quarter," said Carl Pennington, President of Tully's. "Improving operations continues to pay off, especially in difficult economic times." During the thirty-nine weeks ended December 28, 2008, Tully's opened 28 new retail outlets, including its first two outlets in Singapore through a joint venture partnership in Asia, Tully's Coffee Asia Pacific, LP. At December 28, 2008, there were 165 U.S. Tully's stores -- 83 company-operated and 82 franchised -- compared to 146 U.S. stores a year earlier. Retail sales decreased $2.1 million compared to the same period last year, primarily due to the sale and subsequent franchising of five company-owned stores in Southern California in August 2008, unexpected snow and inclement weather in our core retail market of Seattle over the holiday's and Boeing's strike accompanied by the additional two week plant closure during the holiday's that negatively impacted business. On February 6, 2009 the company filed a definitive proxy statement with the Securities and Exchange Commission setting a March 16, 2009 special shareholder meeting to approve the proposed asset sale of the Wholesale business unit to Green Mountain Coffee Roasters, Inc. As of December 28, 2008, the Company's balance sheet showed total assets of $24,569,000, total liabilities of $37,656,000 and minority interest of $6,000,000, resulting in total stockholders' deficit of $13,087,000. Additional information about Tully's Third quarter 2009 results is contained in its Quarterly Report on Form 10-Q that was filed with the U.S. Securities and Exchange Commission on February 11, 2009, which available for free at: http://researcharchives.com/t/s?397d About Tully's Coffee Headquartered in Seattle, Tully's Coffee Corporation -- http://www.tullys.com/-- is a specialty retailer and wholesaler of fully handcrafted roasted, gourmet coffees. Going Concern Doubt As reported in the Troubled Company Reporter on Sept. 24, 2008, Moss Adams LLP of Seattle, Washington, expressed substantial doubt about Tully's Coffee Corporation's ability to continue as a going concern after auditing the company's consolidated financial statements for the periods ended March 30, 2008, and April 1, 2007. The firm reported that the company has incurred recurring operating losses, an accumulated, and total stockholders' and working capital deficit. UNION ELECTRIC: Moody's Affirms Baa2 Issuer Rating -------------------------------------------------- Moody's Investors Service affirmed the ratings of Ameren Corporation (Baa3 Issuer Rating); Union Electric Company (d/b/a AmerenUE, Baa2 Issuer Rating); AmerenEnergy Generating Company (Baa3 senior unsecured); 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). The rating outlook of Ameren and all of its subsidiaries is stable. The ratings affirmation reflects Moody's view that Ameren's announcement on Friday that it was reducing its common dividend by 39% is a conservative, prudent, and credit positive action that will conserve cash and support financial coverage metrics. It will also better position the company to manage increasingly challenging business and credit market conditions for utilities going forward. Ameren, like many other investor owned utilities, has experienced higher operating and maintenance costs and increased environmental capital spending requirements in recent years. Moody's has cited Ameren's high dividend payout ratio as an credit constraining factor that has contributed to high levels of negative free cash flow and increased external financing needs at a time when financing costs have increased significantly. Ameren has indicated that its new dividend payout, which is more in line with average dividend payout levels in the utilities industry, will allow the company to conserve approximately $215 million of cash annually, reducing negative free cash flow and external debt financing needs considerably. The more conservative dividend payout should also help facilitate the renewal of Ameren's bank credit facilities, which include two $500 million facilities maturing at its Illinois utility subsidiaries on January 14, 2010 and a $1.15 billion credit facility maturing at the parent company on July 14, 2010. Although Ameren has been highly reliant on these credit facilities to finance working capital and capital expenditure needs in recent years, the company completed financings of $400 million at AmerenIP and $150 million at AmerenCILCO in the fourth quarter of 2008, reducing draws under the Illinois bank facilities materially. The cash conserved as a result of the dividend reduction should continue to reduce reliance on these bank credit facilities going forward and will likely be viewed favorably by banks considering renewing or entering into new facilities with Ameren and its subsidiaries, which is important considering currently constrained bank credit market conditions. The stable outlook on Ameren and its subsidiaries reflects recently constructive rate case outcomes at its utility subsidiaries, including the approval of a fuel adjustment clause at AmerenUE; the improving regulatory environments for investor owned utilities in both Illinois and Missouri; and Moody's expectation that financial and cash flow coverage metrics should remain adequate to maintain current rating levels. Moody's notes that the recent dividend reduction is supportive of these stable ratings outlooks and provides Ameren and its subsidiaries additional cushion at current rating levels. Negative rating action would still be considered if Ameren and its utilities do not enter into adequate liquidity arrangements well in advance of their current bank credit facility expiration dates in January and July of 2010, although this process should be facilitated by the dividend cut. 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; -- AmerenEnergy Generating Company's Baa3 senior unsecured debt; -- 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; -- CILCORP Inc.'s Corporate Family Rating at Ba1 and senior unsecured debt at Ba2 (LGD5, 74%); -- Central Illinois Light Company's Issuer Rating at Ba1, senior secured debt at Baa2 (LGD2, 19%) and preferred stock at Ba1 (LGD 4, 63%). 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 materially. 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. The last rating action on Ameren, Union Electric, Central Illinois Public Service, CILCORP, Central Illinois Light, and Illinois Power was on January 29, 2009, when the ratings were affirmed and the rating outlooks of Central Illinois Public Service, CILCORP, Central Illinois Light, and Illinois Power were changed to stable from positive. The last rating action on AmerenEnergy Generating Company was on August 13, 2008, when the rating was downgraded to Baa3 from Baa2. 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. WENTWORTH ENERGY: Files Second Amendment to Annual Report --------------------------------------------------------- Wentworth Energy, Inc., filed with the Securities and Exchange Commission on February 11, 2009, Amendment No. 2 to its Annual Report. The Company retroactively restated certain amounts as a result of: 1. On November 14, 2007, the Company amended several of its stock option agreements to remove all service conditions, effectively accelerating the remaining unrecognized compensation. In accordance with Statement of Financial Accounting Standards No. 123(R), the fair value of a stock- based award is measured on the grant date and the compensation cost is recognized over the requisite service period. However, the amount of compensation cost recognized at any date must at least equal the portion of the value of the award that is not contingent upon either a service condition or a performance condition at that date. Upon execution of the Amendments, the full amount of unrecognized compensation expense, totaling $12.6 million, was accelerated and has been recorded in the fourth quarter of 2007. Amendment No. 2 also includes changes from the original Form 10- KSB filed on April 14, 2008. The Company previously reported these changes in amended Form 10-KSB/A Amendment No. 1. They retroactively restated certain amounts as a result of: 1. In connection with the October 2007 debt restructuring the Company improperly allocated a $20.9 million increase in the fair value of its derivative liabilities to debt discount. It was subsequently determined that only $3.8 million should have been allocated to debt discount, with the remainder of the increase in fair value attributed to loss on derivative contracts. 2. An adjustment to amortization expense related to the senior secured convertible notes was required. 3. Series B warrants with a fair value of $4.6 million were improperly included in derivative liabilities. A full-text copy of Amendment No. 2 is available for free at: http://researcharchives.com/t/s?3994 Headquartered in Palestine, Texas, Wentworth Energy Inc. (OTC BB: WNWG) -- http://www.wentworthenergy.com/-- is an independent exploration and production company focused on developing North American oil and natural gas reserves. The company owns a 27,557- acre mineral block in east central Freestone County and west central Anderson County in the active East Texas Basin, as well as an active oil and gas contract drilling company, Barnico Drilling Inc., which has serviced East Texas drilling demand since the late 1970s. Going Concern Doubt Hein & Associates LLP, in Dallas, expressed substantial doubt aobut Wentworth Energy Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's significant recurring losses from operations and working capital deficiency. Wentworth Energy's balance sheet at Sept. 30, 2008, showed total assets of $38,124,971 and total liabilities of $33,320,771, and a stockholders' equity of $4,804,200. For three months ended Sept. 30, 2008, the company reported net loss of 3,750,198 compared to net loss of $1,958,376 for the same period in the previous year. For nine months ended Sept. 30, 2008, the company earned $3,270,952 compared to net income of $65,361,213 for the same period in the previous year. YELLOWSTONE CLUB: Rancho Mirage Used as Personal Loan Collateral ---------------------------------------------------------------- Keith Matheny at The Desert Sun reports that Yellowstone Mountain Club LLC owner Edra Blixseth's creditors said that she has used the Rancho Mirage estate as collateral for $50 million in personal loans since August 2008, even though the property is tied up in the Yellowstone Club's bankruptcy case. According to The Desert Sun, Ms. Blixseth got the Porcupine Creek, Rancho Mirage home, and a golf course on more than 230 acres after a divorce settlement with her husband Tim in August 2008. The report says that she also acquired almost $400 million in debts. The Desert Sun relates that creditors asked the bankruptcy court last week to stop Ms. Blixseth from using Porcupine Creek and other assets of her corporations as collateral for loans. The bankruptcy court, The Desert Sun reports, said in January 2009, "According to Ms. Blixseth's testimony on January 13, Blixseth Group Inc. cannot generally pay its debts as they come due, has liquidity problems and is unable to make its payroll obligations for the employees at Ms. Blixseth's residence known as Porcupine Creek." Creditors claimed in a complaint filed to the court that Ms. Blixseth used Porcupine Creek as collateral for a loan, two days after that testimony. Creditors, says The Desert Sun, have accused financial firm Credit Suisse of making a fraudulent $375 million loan in 2005 that largely ended up in the Blixseths' pockets. According to court documents, at least $12 million of the money was used to pay off the then-existing debt on Porcupine Creek. The Desert Sun states that Ms. Blixseth's spokesperson said that the loan was issued before his client was in charge. Tim Blixseth said in a statement that payments on the loan were made on time while he was in charge, calling the creditors' motion to file a lawsuit "baseless." About Yellowstone Club Yellowstone Mountain Club LLC -- http://www.theyellowstoneclub.com/-- is a private golf and ski community with more than 350 members, including Bill Gates and Dan Quayle. It is located near Big Sky, Montana. It was founded in 1999. As reported in the Troubled Company Reporter on Nov. 13, 2008, Yellowstone Club filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Montana. In its bankruptcy petition, it listed debts of more than $360 million. YOUNG BROADCASTING: Wants to Hire Epiq as Claims & Noticing Agent ----------------------------------------------------------------- Young Broadcasting, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to employ Epiq Bankruptcy Solutions LLC as claims and noticing agent and voting and tabulation agent. Epiq will serve as the Court's outside agent. In addition, Epiq will assist with, among other things, noticing creditors and interest holders in connection with the hearings to determine the adequacy of the Debtors' proposed disclosure statement and confirmation of the plan, and other noticing related thereto that may be required. Epiq will also assist the Debtors with the preparation of the Debtors' schedules, statements of financial affairs and master creditor list, and any amendment thereto. Daniel C. McElhinney, executive director of Epiq Bankruptcy Solutions LLC, tells the Court that Epiq professionals standard rates are: Title Hourly Rate Average Rate ----- ----------- ------------ Clerk $40 - $60 $50 Case Manager (Level 1) $125 - $175 $142.50 IT Programming Consultant $140 - $190 $165 Case Manager (Level 2) $185 - $220 $202.50 Senior Case Manager $225 - $275 $247.50 Senior Consultant TBD TBD The level of senior consultant activity will vary by engagement. The usual average rate is $295 per hour. In an effort to reduce the administrative expenses related to Epiq's retention, the Debtors seek to pay Epiq's fees and expenses without formal fee applications being filed by Epiq. Mr. McElhinney assures the Court that Epiq is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Young Broadcasting Young Broadcasting, Inc. -- http://www.youngbroadcasting.com/-- owns 10 television stations and the national television representation firm, Adam Young Inc. Five stations are affiliated with the ABC Television Network (WKRN-TV - Nashville, TN, WTEN-TV - Albany, NY, WRIC-TV - Richmond, VA, WATE-TV - Knoxville, TN, and WBAY-TV -Green Bay, WI), three are affiliated with the CBS Television Network (WLNS-TV - Lansing, MI, KLFY-TV - Lafayette, LA and KELO- TV - Sioux Falls, SD), one is affiliated with the NBC Television Network (KWQC-TV - Davenport, IA) and one is affiliated with MyNetwork (KRON-TV - San Francisco, CA). In addition, KELO- TV-Sioux Falls, SD is also the MyNetwork affiliate in that market through the use of its digital channel capacity. The Debtor and its debtor-affiliates filed for Chapter 11 protection on February 13, 2009 (Bankr. S.D. N.Y. Lead Case No.: 09-10645). Jo Christine Reed, Esq. at Sonnenschein Nath & Rosenthal LLP represents the Debtors in their restructuring efforts. The Debtors proposed UBS Securities LLC as consultant; Ernst & Young LLP as sccountant; Epiq Bankruptcy Solutions LLC as claims agent; and David Pauker chief restructuring officer. The Debtors listed total assets of $575,600,070 and total debts of $980,425,190. YOUNG BROADCASTING: Wants Schedules' Deadline Moved to March 30 --------------------------------------------------------------- Young Broadcasting, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to extend until March 30, 2008, their deadline to file schedule of assets and liabilities, statements of financial affairs, schedules of current income and expenditures, statements of executory contracts and unexpired leases and lists of equity security holders. The Debtors relate that they will not be able to complete the schedules and statements properly and accurately within the prescribed time. Given the size and complexity of their businesses, the Debtors have a significant amount of information to accumulate to prepare their Schedules and Statements. To complete the Schedules and Statements, the Debtors' employees and professional advisors must review many documents and electronic records in locations across the United States. This process will consume many hours of the Debtors' employees' and professionals' time to complete. The Debtors add that the extension will provide sufficient time to fulfill their obligation to file the Schedules and Statements without unduly distracting them from critical operational issues. About Young Broadcasting Young Broadcasting, Inc. -- http://www.youngbroadcasting.com/-- owns 10 television stations and the national television representation firm, Adam Young Inc. Five stations are affiliated with the ABC Television Network (WKRN-TV - Nashville, TN, WTEN-TV - Albany, NY, WRIC-TV - Richmond, VA, WATE-TV - Knoxville, TN, and WBAY-TV -Green Bay, WI), three are affiliated with the CBS Television Network (WLNS-TV - Lansing, MI, KLFY-TV - Lafayette, LA and KELO- TV - Sioux Falls, SD), one is affiliated with the NBC Television Network (KWQC-TV - Davenport, IA) and one is affiliated with MyNetwork (KRON-TV - San Francisco, CA). In addition, KELO- TV-Sioux Falls, SD is also the MyNetwork affiliate in that market through the use of its digital channel capacity. The Debtor and its debtor-affiliates filed for Chapter 11 protection on February 13, 2009 (Bankr. S.D. N.Y. Lead Case No.: 09-10645). Jo Christine Reed, Esq. at Sonnenschein Nath & Rosenthal LLP represents the Debtors in their restructuring efforts. The Debtors proposed UBS Securities LLC as consultant; Ernst & Young LLP as sccountant; Epiq Bankruptcy Solutions LLC as claims agent; and David Pauker chief restructuring officer. The Debtors listed total assets of $575,600,070 and total debts of $980,425,190. YOUNG BROADCASTING: Can Use Lender's Cash Collateral on Interim --------------------------------------------------------------- Young Broadcasting Inc. and its debtor-affiliates asked the United States Bankruptcy Court for the Southern District of New York for approval to use cash collateral securing repayment of secured loan to Wachovia Bank, National Association. The Bankruptcy Court on Feb. 17 entered an interim order authorizing the Debtors to use cash collateral of their prepetition lender. Final hearing on the request will be on March 4, 2009. The proceeds of the cash collateral will be used for general corporate purposes, costs and expenses related to the Chapter 11 cases in accordance with budget. Access to cash collateral will terminate on March 5, 2009 or in the event of default. As adequate protection, the lender will be granted (i) additional replacement security interests and liens in the prepetition collateral, (ii) allowed superpriority administrative expense claim, and reimbursement of its professional fees, among other things. The Debtors and Wachovia Bank are parties to a fourth amended and restated credit agreement dated May 3, 2005, secured by substantially all of the Debtors' assets. Approximately $338.1 million was outstanding under the facility as of the Debtors' bankruptcy filing. A full-text copy of the Debtors' cash collateral budget is available for free at http://ResearchArchives.com/t/s?398c About Young Broadcasting Young Broadcasting, Inc. -- http://www.youngbroadcasting.com/-- owns 10 television stations and the national television representation firm, Adam Young Inc. Five stations are affiliated with the ABC Television Network (WKRN-TV - Nashville, TN, WTEN-TV - Albany, NY, WRIC-TV - Richmond, VA, WATE-TV - Knoxville, TN, and WBAY-TV -Green Bay, WI), three are affiliated with the CBS Television Network (WLNS-TV - Lansing, MI, KLFY-TV - Lafayette, LA and KELO- TV - Sioux Falls, SD), one is affiliated with the NBC Television Network (KWQC-TV - Davenport, IA) and one is affiliated with MyNetwork (KRON-TV - San Francisco, CA). In addition, KELO- TV-Sioux Falls, SD is also the MyNetwork affiliate in that market through the use of its digital channel capacity. The Debtor and its debtor-affiliates filed for Chapter 11 protection on February 13, 2009 (Bankr. S.D. N.Y. Lead Case No.: 09-10645). Jo Christine Reed, Esq. at Sonnenschein Nath & Rosenthal LLP represents the Debtors in their restructuring efforts. The Debtors proposed UBS Securities LLC as consultant; Ernst & Young LLP as sccountant; Epiq Bankruptcy Solutions LLC as claims agent; and David Pauker chief restructuring officer. The Debtors listed total assets of $575,600,070 and total debts of $980,425,190. YRC WORLDWIDE: Finalizes Bank Amendment & Renews ABS Facility ------------------------------------------------------------- On February 12, 2009, YRC Worldwide Inc. (NASDAQ: YRCW) finalized an amendment with the company's lenders of its credit facilities and renewed its asset-backed securitization facility two months prior to maturity. "We are pleased with the banks' support of our strategic actions and their confidence in our ability to improve our financial position," stated Tim Wicks, Executive Vice President and CFO of YRC Worldwide. "We feel good about the amendment that we reached and the flexibility it will provide us to help weather this economic recession." Credit Agreement Amendment On February 12, 2009, the Company and certain of its subsidiaries entered into Waiver and Amendment No. 2 to the Credit Agreement with the lenders and agents party thereto, which amends the Credit Agreement, dated as of August 17, 2007, among the parties thereto. The Credit Agreement continues to provide the Company with a $950 million senior revolving credit facility, including sublimits available for borrowings under certain foreign currencies and for letters of credit, and a senior term loan in an aggregate outstanding principal amount of approximately $111.5 million. The Credit Agreement Amendment removes the Company's right to request an increase in the commitments under the Credit Agreement. The salient terms of the Credit Agreement Amendment includes: * Maturity Date The Credit Agreement expires, and the revolving credit facility and term loan mature, on August 17, 2012, or such earlier date as the requisite lenders give notice if: -- $50 million or more of the amount required to be satisfied in cash in respect of YRC Regional Transportation, Inc.'s 8-1/2% Guaranteed Notes due April 15, 2010 -- USF Notes -- remains outstanding on or after March 1, 2010, or -- $50 million or more of the amount required to be satisfied in cash in respect of the Company's 5% Contingent Convertible Senior Notes due 2023 remains outstanding on or after June 25, 2010. * Fees and Interest Rate The Credit Agreement Amendment increases the interest rate spread for loans bearing interest by reference to the LIBOR rate from a current spread of 160 basis points for revolving loans and 200 basis points for term loans to 650 basis points for both revolving loans and term loans, and implements a new LIBOR rate floor of 350 basis points. The Credit Agreement Amendment also increases the interest rate spread for loans bearing interest by reference to the alternate base rate from a current spread of 75 basis points to 550 basis points, and implements a new alternate base rate floor equal to the one-month LIBOR rate plus 100 basis points. The Company expects interest expense, excluding commitment fees, to increase $38.5 million annually with this amendment assuming current borrowings. The commitment fee payable to the lenders party to the Credit Agreement increased from a current rate of 40 basis points to 100 basis points. In connection with the Credit Agreement Amendment, the Company paid fees to the consenting lenders equal to approximately $8.0 million. * Affirmative Covenants The affirmative covenants contained in the Credit Agreement Amendment are substantially similar to the affirmative covenants contained in the Credit Agreement as it existed prior to the Credit Agreement Amendment. The Credit Agreement Amendment: -- provides that proceeds from the Credit Agreement may not be used to refinance, repay, settle, support or otherwise satisfy any outstanding indebtedness -- other than industrial revenue bonds in an aggregate amount not to exceed $7 million; -- requires the Company to fully complete the process of winding up, liquidating or dissolving YRC Assurance in all respects by March 14, 2009 or such longer period as the administrative agent may agree in its sole discretion. * Financial Covenants For 2009 and 2010, the Credit Agreement Amendment replaces the prior financial covenants with three other financial covenants: -- Minimum Liquidity, which continues for the life of the Credit Agreement The Company must maintain Liquidity equal to or greater than $100 million at all times, and Liquidity will be tested on each business day. -- Minimum Consolidated EBITDA The Company will not permit Consolidated EBITDA for any period to be less than: Minimum Consolidated Period EBITDA ------ --------------- For the fiscal quarter ending on June 30, 2009 $45,000,000 For the two consecutive fiscal quarters ending on September 30, 2009 $130,000,000 For the three consecutive fiscal quarters ending December 31, 2009 $180,000,000 For the four consecutive fiscal quarters ending March 31, 2010 $205,000,000 For the four consecutive fiscal quarters ending June 30, 2010 $205,000,000 For the four consecutive fiscal quarters ending September 30, 2010 $215,000,000 For the four consecutive fiscal quarters ending December 31, 2010 $240,000,000 -- Maximum Capital Expenditures The Company will not, nor will it permit any subsidiary of the Company to, incur or make any capital expenditures in excess of (i) $150 million for the four consecutive fiscal quarters ending December 31, 2009 and (ii) $235 million for the four consecutive fiscal quarters ending December 31, 2010. * Modifications to Existing Financial Covenants The Credit Agreement Amendment modifies the two financial covenants that were contained in the Credit Agreement prior to giving effect to the Credit Agreement Amendment: -- The Company will not permit the Consolidated Interest Coverage Ratio as of the end of any test period ending on or about March 31, 2011 and as of the end of each other test period ending thereafter to be less than 2.50 to 1.00, which was the level that was set forth in the Credit Agreement prior to giving effect to the Credit Agreement Amendment. -- The Company will not permit the Total Leverage Ratio as of the end of any test period ending on or about March 31, 2011 and as of the end of each other test period ending thereafter to exceed 3.50 to 1.00, which was the level that was set forth in the Credit Agreement prior to giving effect to the Credit Agreement Amendment. * Liens The Credit Agreement Amendment reduced the general lien basket from $150 million to $30 million outstanding at any time. ABS Facility Amendment On February 12, 2009, the Company amended its asset-backed securitization facility. The amended ABS Facility will expire on February 11, 2010. The ABS Facility continues to permit financings of up to $500 million based on the characteristics of the Company's accounts receivable and the reserve requirements of the receivables purchasers. The amendment to the ABS Facility includes: -- The ABS Facility Amendment implements increased reserve requirements applicable to the accounts receivable. After applying the new reserve requirements, the total capacity under the ABS Facility decreased by approximately $28.8 million as a result of such new reserve requirements. -- The cost of funding under the ABS Facility increased. -- The letters of credit sublimit decreased from $125 million to $105 million. -- The ABS Facility Amendment implements the Minimum Consolidated EBITDA, Maximum Capital Expenditures and Minimum Liquidity financial covenants that are consistent with the Credit Agreement Amendment. -- YRC Assurance Co. Ltd., the Company's wholly owned subsidiary and captive insurance company domiciled in Bermuda, was investing in accounts receivable through the ABS Facility to support the capital requirements that Bermuda law requires YRC Assurance to maintain to issue insurance policies to other Company subsidiaries. The Company desired to utilize these receivables to finance its general corporate purposes rather than to finance YRC Assurance's capital requirements. Therefore, YRC Assurance withdrew from the ABS Facility by selling back approximately $159 million of its ownership interests in the accounts receivables to Yellow Roadway Receivables Funding Corporation, a special purpose entity and wholly owned subsidiary of the Company. YRRFC then sold the ownership interests in the accounts receivable purchased from YRC Assurance to the bank parties to the ABS Facility. These bank parties will now finance the Company for general corporate purposes by reinvesting in this pool of accounts receivable. YRC Assurance will no longer be a purchaser or a co-agent party to the ABS Facility and will commute existing intercompany insurance policies due to the reduction in the capital it is required to maintain by regulation for these policies. The Company may incur additional U.S. federal income taxes as a result of this transaction. -- In connection with the ABS Facility Amendment, the Company paid fees to the consenting bank parties equal to approximately $3.8 million. An additional fee equal to approximately $10.0 million will become due September 30, 2009 if the ABS Facility has not been terminated by such date and the Company does not have a corporate credit rating of B/B2 or better from Standard & Poor's and Moody's Investors Service, Inc., respectively, by such date. The Company's corporate credit ratings currently are CCC/Caa3, respectively. Based upon the Credit Agreement Amendment and the renewal of the ABS Facility, the Company expects that its interest expense in the first quarter of 2009 will be approximately $45 million and for the full year of 2009 will be approximately $120 to $130 million. A full-text copy of the Amendments is available for free at: http://researcharchives.com/t/s?3991 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'.) On February 2, the TCR reported that 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 roughly $101 million of proceeds and expects to receive roughly $50 million more in the second closing. 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 TCR on January 19, 2009, YRC obtained waivers under its credit facilities until February 17. The company is in 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. YRC WORLDWIDE: Gets $9 Million From Additional Sale Transaction --------------------------------------------------------------- YRC Worldwide Inc., on February 13, 2009, closed on an additional portion of the sale and financing leaseback transaction pursuant to the transaction with NATMI Truck Terminals, LLC. The Company received approximately $9 million of proceeds at the February 13 closing. The Company has extended the inspection period for the NAT Transaction to mid-March 2009 for the remaining subject facilities. The Company expects to close on the remaining subject facilities in early to mid-March 2009, subject to the satisfaction of normal and customary due diligence and related conditions, including NATMI's right to elect not to acquire any of the remaining subject facilities in its sole discretion during the inspection period. On December 19, 2008, YRC Worldwide entered into a Real Estate Sales Contract with NATMI Truck Terminals, LLC, to sell and simultaneously lease back a pool of the Company's facilities located throughout the United States. The aggregate purchase price for the subject facilities is approximately $150.4 million. Initial annual lease payments will be approximately $21.1 million in the aggregate, subject to annual increases based on changes in the Consumer Price Index. The initial lease term for each facility will be 10 years, with renewal options to extend the term of each lease by up to an additional 30 years. During the lease term for each facility, as it may be extended, the Company will have a right of first offer in the event NATMI proposes to sell the facility. The Company has previously entered into other sale- leaseback transactions with NATMI in the ordinary course of business. 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'.) On February 2, the TCR reported that 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 roughly $101 million of proceeds and expects to receive roughly $50 million more in the second closing. 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 TCR on January 19, 2009, YRC obtained waivers under its credit facilities until February 17. The company is in 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. YRC WORLDWIDE: Grants Union Workers Options to Buy 11.3MM Shares ---------------------------------------------------------------- YRC Worldwide Inc. had previously disclosed that the union employees represented by the International Brotherhood of Teamsters voted to modify the National Master Freight Agreement, effective April 1, 2008 through March 31, 2013, with YRC Inc., USF Holland Inc. and New Penn Motor Express Inc., to, among other things, reduce wages paid under the NMFA by 10 percent. On February 12, 2009, the Company delivered a certification to the Teamsters, in accordance with the modified NMFA, that no event or condition exists that constitutes a default under the Company's credit facility, or which upon notice, lapse of time or both would, unless cured or waived, become or lead to such a default. The Company stated that the affected union employees will receive the right to participate in the equity of the Company through a vehicle that economically functions as a warrant or similar instrument to purchase 15 percent of the Company's common stock. Consistent with this statement, the Company and the Teamsters have agreed to implement a Union Employee Option Plan and a Union Employee Stock Appreciation Right Plan. Pursuant to the Stock Option Plan, on February 12, 2009, the Company granted to its union employees who are employed by bargaining units who have ratified the wage reduction, options to purchase up to an aggregate of 11,394,758 shares of the Company's common stock at an exercise price equal to $3.74 per share, which was the closing price per share of the Company's common stock on the NASDAQ Stock Market on that date. The options will vest in full on the first anniversary of the grant date, and will be exercisable for 10 years following the date of grant, subject to the terms of the Stock Option Plan. The options were granted subject to shareholder approval and will not be effective until the Stock Option Plan is approved by the shareholders of the Company. The Company expects to submit the Stock Option Plan to a vote by its shareholders at a meeting of the shareholders later this year, most likely its annual meeting of shareholders, which is usually held in May of each year. If the shareholders of the Company do not approve the Stock Option Plan, the options granted under the Stock Option Plan will automatically terminate. Pursuant to the SAR Plan, on February 12, 2009, the Company granted to its Union Employees stock appreciation rights with respect to up to 11,394,758 shares of the Company's common stock at an exercise price equal to $3.74 per share, which was the closing price per share of the Company's common stock on the NASDAQ Stock Market on that date. Each Union Employee received one SAR under the SAR Plan for each option that the Union Employee received under the Stock Option Plan. Each SAR provides the Union Employee the right to receive a cash payment from the Company equal to the closing price of the Company's common stock on the date of exercise less the exercise price of the SAR. The SARs will vest in full on the first anniversary of the grant date, and will be exercisable for 10 years following the date of grant, subject to the terms of the SAR Plan. If the shareholders of the Company approve the Stock Option Plan, the SARs granted under the SAR Plan will automatically terminate. Based on the February 12, 2009 closing price of the Company's common stock of $3.74 per share, the aggregate fair value of the union equity grants is approximately $30 million and would be recognized as a one-time accounting charge on the grant date. Under the SAR Plan, the aggregate fair value of the union equity grants would be re-measured at the end of each quarter using the closing share price of the Company's common stock at that time. If the shareholders of the Company approve the Stock Option Plan, the aggregate fair value of the union equity grants would be fixed using the closing share price of the Company's common stock on the date of shareholder approval. 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'.) On February 2, the TCR reported that 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 roughly $101 million of proceeds and expects to receive roughly $50 million more in the second closing. 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 TCR on January 19, 2009, YRC obtained waivers under its credit facilities until February 17. The company is in 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. * Berkery & Seneca Financial Collaborate to Aid Troubled Firms -------------------------------------------------------------- Berkery, Noyes & Co., LLC, and Seneca Financial Group have formed a strategic partnership to advise companies seeking restructuring services in the global information, media, health, and pharmaceutical industries, as well as education, financial, B2B, marketing services, and related technology areas. Armed with deep market knowledge, the partners will work with companies to develop new business models to reflect the realities of the current economic and financial marketplace, as well as restructure balance sheets that are over-leveraged by today's standards. John Shea, Chief Operating Officer of Berkery Noyes commented: "Given today's economic environment, we anticipate a growing need for our brand of on-the-ground advisory service. A company's successful restructuring hinges upon having a team comprised of professionals who understand a business and its industry in a granular sense and have the capability to devise and implement a successful restructuring plan." "The fundamentals of the restructuring business have changed in profound ways over the past three years. Today's bankruptcy code makes it very difficult for a company to successfully reorganize under the court's supervision," said James Harris, founder and CEO of Seneca. "Bankruptcy may no longer be the right answer. Given current conditions, companies would be well advised to examine other options to transform their businesses into more efficient generators of cash flow," he added. James Harris founded Seneca Financial Group in 1993 to focus exclusively on restructuring advisory services. Seneca's previous engagements include: Texaco, Federated Department Stores, LTV Corporation, Pacific Gas & Electric, Parmalat and America West Airlines. Prior to founding Seneca, Mr. Harris was a Managing Director at Lehman Brothers and headed the firm's restructuring advisory services. Prior to joining Lehman in 1982, Mr. Harris was a senior lending officer at Citibank N.A. where he worked with Mr. Shea. Berkery, Noyes & Co., LLC has completed over 450 M&A transactions since its founding by Joseph Berkery in 1988. Since its inception, Berkery Noyes has focused its efforts on the information and media industries. During that time, Berkery Noyes has worked with private owners, private equity firms and public companies to assess value and complete transactions to realize value. Berkery Noyes' has worked with The McGraw-Hill Companies, Thomson Reuters, United Business Media, Reed Elsevier, Pearson and Wolters Kluwer. John Shea, Chief Operating Officer of Berkery Noyes, will be leading the marketing effort of the partnership. His contact information is as follows: * Five Attorneys Join Brown Rudnick as Partners ----------------------------------------------- Brown Rudnick, a premier international law firm, has elected five attorneys to the partnership: Sunni P. Beville, Michael J. Camilleri, Christopher J. Carolan, Robert L. Murray and Neill Shrimpton. Among the new partners is one British lawyer practicing in Brown Rudnick's London office, as well as attorneys from the Boston, New York, and Hartford offices. Brown Rudnick's CEO Joseph F. Ryan commented, "Each of our new partners has distinguished him or herself as a skilled lawyer, dedicated client service provider, and good corporate citizen. Their elevation to the Firm's Partnership is in recognition of the value they bring to our Firm, our clients and the community. We are fortunate to have each of them as partners." Ms. Beville concentrates her practice on the representation of official and ad hoc committees of creditors and equity holders in chapter 11 bankruptcy cases and out-of-court restructuring matters. This practice includes all aspects of the bankruptcy process, including contested plan confirmation hearings, contested relief from stay and cash collateral hearings, and fraudulent conveyance and preference litigation. Ms. Beville also assists institutions in the distressed debt and claims trading industry by facilitating the claims resolution and allowance process for claim holders in chapter 11 cases and advises institutions with respect to status and treatment of claims against debtors in chapter 11 cases. She also advises distressed companies and their equity holders with respect to restructuring debt and equity both in the Chapter 11 context and out-of-court restructuring opportunities. Mr. Camilleri represents Fortune 500 corporations, developers, retailers, not-for-profit organizations, universities, hospitals, restaurants, and other clients in all aspects of commercial real estate development. Mr. Camilleri's practice includes the areas of leasing, acquisitions, dispositions, zoning and land use, development, financing, military housing privatization projects and affordable housing. He has worked with clients to obtain zoning and land use approvals before municipal agencies throughout the State of Connecticut, and has worked with various state and federal agencies on behalf of his clients. Mr. Carolan has extensive experience representing institutional lenders and borrowers in a variety of domestic and international syndicated and unsyndicated debt financings across a variety of industries, including retail finance, commodities finance, project finance, corporate & acquisition finance, real estate, and film finance. Mr. Carolan also has experience restructuring distressed debt and counseling clients on a variety of workout related issues. His practice involves advising secured lenders on intercreditor arrangements and collateral security issues involving inventory, accounts receivable, and real estate. Mr. Murray represents both public and private clients in all stages of development. He assists clients in a variety of matters, including business formation, venture capital financings, mergers and acquisitions, securities law compliance and other commercial and financial transactions. Mr. Murray also works with holders of debt of distressed companies to facilitate out-of-court restructuring opportunities. Mr. Shrimpton practices in all areas of commercial litigation and arbitration. He has represented clients in disputes in all divisions of the High Court, the Court of Appeal and the Privy Council, and pursuant to the rules of many arbitration institutions. Mr. Shrimpton has a wide range of experience acting for individuals and organizations, such as investors, hedge funds, manufacturing companies, public utility companies, construction companies and companies listed on the FTSE 100. About Brown Rudnick LLP Brown Rudnick -- http://www.brownrudnick.com/-- is an international law firm with offices in the United States and Europe. The firm represents clients from around the world, providing business-focused solutions that address today's ever- changing, ever-demanding competitive marketplace. With an entrepreneurial and collaborative mindset, Brown Rudnick offers a broad slate of capabilities and talents in areas that include: Bankruptcy & Corporate Restructuring, Corporate & Securities, Intellectual Property, Complex Litigation, Real Estate, Government Contracts, Government Law & Strategies, Energy, Finance, and Health Law. * NewOak Capital Appoints Patrick Mooney as COO ----------------------------------------------- NewOak Capital has appointed of Patrick Mooney as Chief Operating Officer, coordinating internal operations and system and processes build-out. "With the expansion of NewOak Capital advisory efforts, development of robust analytical platform, and business infrastructure, it became very critical to develop a proven management structure. Patrick Mooney is tasked to lead such an effort," says Ron D'Vari, CEO of NewOak Capital. We are very pleased to be able to continue attracting senior professionals such as Patrick to the team," says James Frischling, President. "We've grown exponentially since our launch this past summer and Patrick will play a key role in the governance of our firm." Patrick Mooney has 23 years of experience at Bear Stearns,Thomson TradeWeb and SIFMA (SIA & BMA). At Bear Sterns, he drove the firm's strategic foothold in Fixed Income & Derivatives trading segments while building and transitioning various businesses by facilitating integration of operations, legal, compliance, accounting, and risk management teams into firm's infrastructure as well as trading, capital analysis, budgeting, and management reporting systems. At TradeWeb, he assessed emerging trends, seized profit growth opportunities, and leveraged bottom-up approach to extend product visibility and gaining market acceptance. About NewOak Capital NewOak is an advisory, asset management, and capital markets firm organized to serve institutions in response to challenges arising from the global credit markets. It provides analysis, valuation, restructuring, risk transfer, and management solutions and services to financial institutions and investors to support their portfolio and corporate needs. NewOak Capital employs 16 senior professionals with an average of 17 years of experience in the fixed-income markets in addition to 17 junior and support staff. It specializes in residential and commercial mortgage loans and securities, REITs, asset-backed securities, structured corporate securities (CSOs/CLOs), and distressed financial companies with exposure. NewOak employs a differentiated framework, an integrated "see-through" analytics platform, and a team of experienced professionals with diversified investment and modeling expertise to provide client solutions. * Marwil, Thomas & Possinger Join Proskauer as Partners ------------------------------------------------------- Proskauer Rose LLP, a global law firm with 800 lawyers worldwide, announced the expansion of its Chicago office and Bankruptcy & Restructuring Practice Group with the addition of partners Jeff J. Marwil, Mark K. Thomas and Paul V. Possinger. Formerly partners in Winston & Strawn's Restructuring and Insolvency Group, which Mr. Marwil co-chaired, they comprise one of the country's leading bankruptcy and workout teams. With a long history of representing distressed clients of all types, from hedge funds and sophisticated institutional investors to upper- tier public and private companies, they bring a formidable presence in the market to Proskauer's growing Chicago office as well as its international Bankruptcy and Restructuring Practice Group, which also includes lawyers in New York, Boston, Los Angeles, London, Paris, Hong Kong and Sao Paulo. "Jeff, Mark and Paul add a new dimension to our bankruptcy and restructuring practice that extends our ability to address the increasingly complex needs of our corporate clients in this extremely challenging economic environment," said Allen I. Fagin, Chairman of Proskauer Rose. "Among others, our roster of private investment fund clients will be especially well served by the counsel and experience this new team brings to the table." According to Steven R. Gilford, head of Proskauer's Chicago office, the addition of the well-regarded trio highlights the firm's commitment to Chicago and the opportunities of the market. "As we stated when we opened the office last April, we plan to be a player in this market," said Mr. Gilford. "This well-respected and high-profile group gives us a platform for even broader growth. They are also an excellent fit for us culturally, reflecting the same professional values and dedication to collaboration that the firm has always embraced." Mr. Marwil brings over 20 years of experience in the bankruptcy, workout and corporate restructuring areas. He currently serves as sole managing member of the Bayou Group in its Chapter 11 cases and has devoted significant attention to other hedge funds in distress, including restructurings, wind-downs and liquidations. He also represents hedge funds, managers/advisers and sophisticated fund-of-fund and pension plan investors in hedge fund restructurings, wind-downs and complex litigation matters. In addition, Mr. Marwil has long-term and extensive experience representing public and private companies in restructuring complex capital structures and reorganizing their financial affairs and business operations. Mr. Thomas represents lenders, debtors and borrowers in Chapter 11 bankruptcy cases and out-of-court workouts and restructurings. He has handled workouts and bankruptcies involving both public and private companies and represents secured lenders and syndicated loan agents in workouts, restructurings and bankruptcies as well as assisting bank groups in providing debtor-in-possession financing facilities and bankruptcy exit financing. Mr. Thomas has also represented sellers and buyers of distressed businesses and assets in transactions both in and outside of bankruptcy. Mr. Possinger's practice focuses on corporate reorganizations, creditors' rights and bankruptcy matters. He primarily represents financially troubled entities and senior, second-lien and mezzanine lenders in and out of bankruptcy in debt restructuring and reorganization, workouts, asset and going concern sales and litigation. He has acted as lead counsel to Chapter 11 debtors, official creditor and equity committees, boards of directors and other fiduciaries, hedge funds and fund investors, lenders and repurchase counterparties and has also represented warehouse and repurchase lenders and subprime mortgage investors in insolvency matters relating to the recent subprime lending and financial market crises. Proskauer's Bankruptcy & Restructuring Practice Group advises clients on the full spectrum of insolvency-related matters, playing a major role in complex, interdisciplinary cases impacting a range of sectors from entertainment and insurance to labor and private investment and other major institutional funds. Opened in April 2008, the firm's Chicago office represents major corporations, with an emphasis on insurance litigation for policyholders and bankruptcy and restructuring matters as well as general commercial litigation. About Proskauer Rose Proskauer Rose, founded in 1875, is an international law firm providing a wide variety of legal services to clients worldwide from offices in Boca Raton, Boston, Chicago, Hong Kong, London, Los Angeles, New Orleans, New York, Newark, Paris, Sao Paulo, and Washington, D.C. The firm has wide experience in all areas of practice important to businesses and individuals including corporate finance, mergers and acquisitions, general commercial litigation, corporate governance matters, conducting internal corporate investigations, white collar criminal defense, private equity and fund formation, patent and intellectual property litigation and prosecution, labor and employment law, real estate transactions, bankruptcy and reorganizations, trusts and estates, and taxation. Its clients span industries including chemicals, entertainment, financial services, health care, information technology, insurance, internet, lodging and gaming, manufacturing, media and communications, pharmaceuticals, real estate investment, sports, and transportation. The firm can be found online at http://www.proskauer.com. * Failed Banks in 2009 Now Total 13 ----------------------------------- As of mid-February, nine U.S. banks have failed this year. Twenty-five banks insured by the Federal Deposit Insurance Corporation were closed for the entire 2008. The banks closed this year by regulators are: Bank Closing Date ---- ------------ Pinnacle Bank of Oregon, Beaverton, OR 02/13/09 Corn Belt Bank and Trust Company, Pittsfield, IL 02/13/09 Riverside Bank of the Gulf Coast, Cape Coral, FL 02/13/09 Sherman County Bank, Loup City, NE 02/13/09 County Bank, Merced, CA 02/06/09 Alliance Bank, Culver City, CA 02/06/09 FirstBank Financial Services, McDonough, GA 02/06/09 Ocala National Bank, Ocala, FL 01/30/09 Suburban Federal Savings Bank, Crofton, MD 01/30/09 MagnetBank, Salt Lake City, UT 01/30/09 1st Centennial Bank, Redlands, CA 01/23/09 Bank of Clark County, Vancouver, WA 01/16/09 National Bank of Commerce, Berkeley, IL 01/16/09 The Federal Deposit Insurance Corporation was appointed as receiver for the closed banks. To protect the depositors, the FDIC entered into a purchase and assumption agreement with various banks to assume all of the deposits of the closed banks: Buyer's FDIC Cost Assumed to Insurance Deposits Fund Closed Bank Buyer (millions) (millions) ----------- ---- ---------- ----------- Pinnacle Bank Washington Trust Bank $64.0 $12.1 Corn Belt Bank Carlinville Nat'l Bank $142.4 $100.0 Riverside Bank TIB Bank $281.4 $201.5 Sherman County Heritage Bank $85.1 $28.0 County Bank Westamerica Bank $1,300.0 $135.0 Alliance Bank California Bank & Trust $951.0 $206.0 FirstBank Regions Bank $279.0 $111.0 Ocala National CenterState Bank $205.2 $99.6 Suburban Federal Bank of Essex $302.0 $126.0 MagnetBank -- None -- 1st Centennial First California Bank $302.1 $227.0 Bank of Clark Umpqua Bank $523.6 $120-145 Nat'l Commerce Republic Bank of Chicago $402.1 $97.1 County Bank, based in Merced, California, as of February 2, 2009, County Bank had total assets of approximately $1.7 billion and total deposits of $1.3 billion. Westamerica Bank, based in San Rafael, California, assumed all of the failed bank's deposits, including those from brokers, and purchased all of County Bank's assets. Other buyers, however, opted to purchase only the insured deposits of the failed banks and excluded brokered deposits and other assets by the banks. Alliance Bank, for example, had total assets of approximately $1.14 billion, but California Bank & Trust agreed to purchase approximately $1.12 billion in assets at a discount of $9.9 million. The FDIC retained the remaining assets for later disposition. Regions Bank, based in Birmingham, Alabama, agreed to purchase about $17 million of FirstBank's assets totaling $337 million. MagnetBank based in Salt Lake City, Utah, as of December 2, 2008, had total assets of $292.9 million and total deposits of $282.8 million. As of Feb. 1, after an extensive marketing process, the FDIC was unable to find another financial institution to take over the banking operations of MagnetBank. MagnetBank was the first bank in Utah to fail since Bank of Ephraim, was closed on June 25, 2004. According to a Feb. 13 report by The New York Times, the FDIC faces tough choices with respect to loans and property collected as it struggles to manage $15 billion worth of loans and property left from failed banks. The report adds that if still-to-be-sold assets from IndyMac Bancorp of California, whose demise last year was the fourth-largest bank failure, are included, the number jumps to $40 billion. In July 2008, the federal government seized Indymac, which had total assets of $32,010,000,000 and total deposits of $19,060,000,000 as of March 31, 2008, after beyond normal cash withdrawals cued a liquidity crisis at the bank. A successor institution, IndyMac Federal Bank, FSB, a conservatorship, was created by the FDIC to continue to provide banking services in communities served by the former IndyMac Bank. A complete list of banks that failed since 2000 is available at: http://www.fdic.gov/bank/individual/failed/banklist.html * Destination Clubs Hit By Current Economic Turmoil --------------------------------------------------- Destinations clubs have been hit by the current recession, Michelle Higgins of The New York Times reports. "Home values have dropped, new credit has dried up and membership sales have plummeted, leaving many of the clubs with more bills than income." According to the report, destination clubs previously thrived due to growing demand, and rising real estate prices gave the clubs more equity to take on more debt. By 2007, revenue reached $610 million and membership 5,900, according to data from Ragatz Associates, a resort consulting firm and SherpaReport.com, which tracks the industry. "But when the economy fell apart, it largely took the destination clubs' business model with it," Ms. Higgins reported. In November 2008, Yellow Stone Mountain Club LLC filed for Chapter 11 bankruptcy in Montana, citing a cash crunch and a poor real- estate market. Yellowstone Club -- http://www.theyellowstoneclub.com/-- is a private golf and ski community with more than 350 members, including Bill Gates and Dan Quayle. It is located near Big Sky, Montana. It was founded in 1999. In late January, High Country Club, which was founded in 2005 and quickly grew to about 375 members, filed for Chapter 7 bankruptcy, listing hundreds of creditors and debt totaling about $25 million, Ms. Higgins relates. She adds that smaller clubs, like the 140- member Portofino and the 150-member Lusso, with residences that averaged more than $3.5 million, also filed for bankruptcy last year. Ms. Higgins added that large destination clubs like Ultimate Escapes and Quintess sought a $22 million assessment, and charged higher dues, to keep their businesses going. * Consumer Confidence Nears 28-Year Low in January, says Reuters ---------------------------------------------------------------- According to the Reuters/University of Michigan Surveys of Consumers, consumer confidence continued to hover near its half century low, showing no signs of significant change during the past six months. "Nearly all consumers anticipate the deepest and longest recession in the post-WWII era, but few consumers now expect the economy to sink into a 1930's style depression," according to Richard Curtin, the Director of the Reuters/ University of Michigan Surveys of Consumers. "A recovery in consumer spending will require fiscal stimulus that effectively promotes job and income growth, monetary policies that restore credit flows, and actions that reestablish economic confidence," Mr. Curtin said. The Index of Consumer Sentiment was 61.2 in the January 2009 survey, just above the 60.1 in December but substantially below last January's 78.4 and the cyclical peak of 96.9 set in January 2007. Presidential honeymoons have typically translated optimistic expectations for policy changes into early gains in consumer confidence, and the recent surveys indicate a small gain since the November low of 55.3. The Index of Consumer Expectations, a closely watched component of the Index of Leading Economic Indicators, was 57.8 in January, just ahead of the 54.0 in December and well below last January's 68.1 and the January 2007 cyclical peak of 87.6. Fast spreading unemployment is the chief concern of consumers. News of steep job losses were reported by an all-time record number of consumers in the January survey, rising above the levels recorded in the early 1980's when the unemployment rate was above 10%. Consumers anticipated that the economy would remain too weak to stem an expected rise in joblessness in the next year or so. Overall, consumers expected the national unemployment rate to rise to nearly 9.0% by year-end 2009. A copy of the entire press release is available for free at: https://customers.reuters.com/community/university/default.aspx? About Thomson Reuters Thomson Reuters is the world's leading source of intelligent information for businesses and professionals. We combine industry expertise with innovative technology to deliver critical information to leading decision makers in the financial, legal, tax and accounting, scientific, healthcare and media markets, powered by the world's most trusted news organization. With headquarters in New York and major operations in London and Eagan, Minnesota, Thomson Reuters employs more than 50,000 people in 93 countries. Thomson Reuters shares are listed on the New York Stock Exchange (NYSE: TRI); Toronto Stock Exchange (TSX: TRI); London Stock Exchange (LSE: TRIL); and Nasdaq (NASDAQ: TRIN). For more information, go to www.thomsonreuters.com. About ISR Established in 1948, the Institute for Social Research (ISR) is among the world's oldest social science research organizations, and a world leader in the development and application of social science methodology. The Institute conducts some of the most widely-cited surveys in the nation, including the Reuters/University of Michigan Surveys of Consumers, the American National Election Studies, the Monitoring the Future Study, the Panel Study of Income Dynamics, the Health and Retirement Study, and the National Survey of Black Americans and the World Values Surveys. ISR is also home to the Inter-University Consortium for Political and Social Research (ICPSR), the world's largest computerized social science data archive. * Report: Auto Industry Gave $60 Trillion Since 1900 to Economy --------------------------------------------------------------- DBusiness magazine is sending individual copies of its March/April 2009 issue to President Obama, members of the White House staff, every U.S. Representative and Senator, members of the newly-formed Presidential Task Force on Autos, along with various Department secretaries this morning, marking the beginning of the second round of Congressional financing discussions for the American auto industry. Nationally renowned economist David Littmann has penned an exclusive analysis of the U.S. auto industry's contribution to the nation's economy from 1900 through 2008. This special report from Littmann, longtime chief economist of Comerica Bank, evaluates for the first time the rise of Detroit's auto industry and quantifies a major portion of the value it added to our nation's GDP -- $60 trillion (in today's dollars). That number doesn't include wartime arms and defense that Detroit and its supplier base have contributed to the nation's security, safety, and prosperity during World War I, World War II, and every other international conflict. Based on the first-of-its-kind analysis, it is the opinion of DBusiness magazine's editorial staff that the federal government has a moral obligation to spare the Big Three automakers from bankruptcy action. In fact, the editorial staff believes the federal government should nationalize one or all three of the automakers before a bankruptcy filing is submitted. The Big Three automakers, along with their financial arms and suppliers, are asking for an estimated $50 billion in loans from the federal government to survive the global economic meltdown. But that loan amount is minuscule when compared to the $60 trillion the U.S. auto industry has contributed to the national economy since 1900. In fact, $50 billion is but .083% of $60 trillion. In addition, the special report cites the current direct and indirect employment of the U.S. auto industry, a number estimated to be 16,050,000 jobs. The March/April 2009 issue of DBusiness magazine is available on newsstands March 3. DBusiness is published by Hour Media, publishers of the award- winning Hour Detroit and numerous other magazines. To subscribe to DBusiness, call 866-660-MAGS (6248) or visit http://www.dbusiness.com/ * President Barack Obama Signs Stimulus Plan Into Law ----------------------------------------------------- Laura Meckler at The Wall Street Journal reports that President Barack Obama signed the $787 billion economic stimulus package into law on Tuesday. As reported by the Troubled Company Reporter on February 16, 2009, the Congress approved the $787.2 billion stimulus package, which is a mix of government spending and tax cuts, after 246 Democrats voted in favor of the plan, after a month of debate. Three Senate Republicans had joined with 57 Senate Democrats in support of the package, while 38 Republicans voted against it. The White House estimates that the stimulus plan will create or preserve about 3.5 million jobs. Administration officials admitted that they gave up some "economic punch" to get the bill passed. The report says that a $70 billion measure holding 26 million middle-income Americans harmless from the alternative minimum tax was kept in at the request of Senate Republican backers of the bill. According to the TCR, a third of the stimulus package involves tax cuts for business and individuals, including: a $400 payroll-tax holiday for employees, an expanded child tax credit, and more generous tax breaks for college expenses. New incentives would also be provided for those who buy automobiles and for first-time homebuyers. Over the next two years, billions of dollars will be used to expand unemployment benefits, to help cash-strapped states avoid cuts in education and health care for the poor, and for job- creating investments in scientific research, green technologies, and road construction, among other things. A $250 one-time payment would be made to millions of retirees, while employees who have been laid off would receive new subsidies to continue their health-care coverage. WSJ relates that Congressional Republicans who opposed the bill were disappointed by the final outcome. House Minority Leader John Boehner said in a statement, "The flawed bill the president will sign today [February 17] is a missed opportunity, one for which our children and grandchildren will pay a hefty price." Sources, according to WSJ, predict that the stimulus package will save or create about 3.5 million jobs. WSJ reports that about $282 billion is devoted to tax cuts, including breaks for individuals and businesses. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Feb. 25-27, 2009 AMERICAN BANKRUPTCY INSTITUTE Valcon Four Seasons, Las Vegas, Nevada Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 2, 2009 ASSOCIATION OF INSOLVENCY AND RESTRUCTURING ADVISORS Chicago Regional Conference Union League Club of Chicago, Chicago, Illinois Contact: 1-541-858-1665; http://www.airacira.org/ Mar. 13, 2009 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West Beverly Wilshire, Beverly Hills, California Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 14-16, 2009 AMERICAN BANKRUPTCY INSTITUTE Conrad Duberstein Moot Court Competition St. John's University School of Law, New York City Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 1-4, 2009 AMERICAN BANKRUPTCY INSTITUTE 27th Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 16-19, 2009 COMMERICAL LAW LEAGUE OF AMERICA 2009 Chicago/Spring Meeting Westin Hotel on Michigan Ave., Chicago, Ill. Contact: (312) 781-2000; http://www.clla.org/ Apr. 17-18, 2009 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES NABT Spring Seminar The Peabody, Orlando, Florida Contact: http://www.nabt.com/ Apr. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE Consumer Bankruptcy Conference John Adams Courthouse, Boston, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 27-28, 2009 TURNAROUND MANAGEMENT ASSOCIATION Corporate Governance Meetings Intercontinental Hotel, Chicago, Illinois Contact: www.turnaround.org Apr. 28-30, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Intercontinental Hotel, Chicago, Illinois Contact: www.turnaround.org May 1, 2009 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts for Young Practitioners Alexander Hamilton Custom House, New York City Contact: 1-703-739-0800; http://www.abiworld.org/ May 4, 2009 AMERICAN BANKRUPTCY INSTITUTE New York City Bankruptcy Conference New York Marriott Marquis, New York City Contact: 1-703-739-0800; http://www.abiworld.org/ May 7-8, 2009 RENASSANCE AMERICAN MANAGEMENT, INC. 6th Annual Conference on Distressted Investing - Europe The Le Meridien Piccadilly Hotel, London, U.K. Contact: 1-903-595-3800 or http://www.renaissanceamerican.com/ May 7-10, 2009 AMERICAN BANKRUPTCY INSTITUTE 27th Annual Spring Meeting Gaylord National Resort & Convention Center National Harbor, Maryland Contact: http://www.abiworld.org/ May 12-15, 2009 AMERICAN BANKRUPTCY INSTITUTE Litigation Skills Symposium Tulane University, New Orleans, La. Contact: http://www.abiworld.org/ May 14-16, 2009 ALI-ABA Chapter 11 Business Reorganizations Langham Hotel, Boston, Massachusetts Contact: http://www.ali-aba.org June 11-14, 2009 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ June 21-24, 2009 INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY & BANKRUPTCY PROFESSIONALS 8th International World Congress TBA Contact: http://www.insol.org/ July 16-19, 2009 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Mt. Washington Inn Bretton Woods, New Hampshire Contact: http://www.abiworld.org/ July 29-Aug. 1, 2009 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Westin Hilton Head Island Resort & Spa, Hilton Head Island, S.C. Contact: http://www.abiworld.org/ Aug. 6-8, 2009 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Conference Hotel Hershey, Hershey, Pa. Contact: http://www.abiworld.org/ Sept. 10-11, 2009 AMERICAN BANKRUPTCY INSTITUTE Complex Financial Restructuring Program Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 2, 2009 AMERICAN BANKRUPTCY INSTITUTE ABI/GULC "Views from the Bench" Georgetown University Law Center, Washington, D.C. Contact: http://www.abiworld.org/ Oct. 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Oct. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Paris Las Vegas, Las Vegas, Nev. Contact: http://www.abiworld.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 29-May 2, 2010 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 17-20, 2010 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 7-10, 2010 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Ocean Edge Resort, Brewster, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2010 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Ritz-Carlton Amelia Island, Amelia, Fla. Contact: http://www.abiworld.org/ Aug. 5-7, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE 22nd Annual Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 31-Apr. 3, 2011 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 9-12, 2011 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. Last Updated: Feb. 9, 2009 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to: http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, 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 ***