/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090309.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, March 9, 2009, Vol. 13, No. 67 Headlines ABITIBIBOWATER INC: DBRS Assigns Default Recovery Ratings ACCURIDE CORP: Bank Debt Sells at Substantial Discount AF EVANS: Files for Chapter 11 Bankruptcy Protection AF EVANS: Case Summary & 18 Largest Unsecured Creditors AF EVANS: Interests in "Coventry Park" to be Auctioned April 6 AFFILIATED COMPUTER: Fitch Affirms 'BB' Issuer Default Rating AMERICAN ACHIEVEMENT: S&P Raises Corporate Credit Rating to CCC+ AMERICAN COMMUNITY MUTUAL: Cut to Non-Investment Grade by AM Best AMERICAN INTERNATIONAL: Racing Against Time to Divide Business AMERICAN INT'L: Bailout Beneficiaries Include Two Dozen Firms ASARCO LLC: Agrees to Sell Operate Assets to Sterlite for $1.7-Bil ASARCO LLC: Agree to Creditors Panel's Retention of Exponent ASARCO LLC: Seeks to Terminate Wachovia Letter of Credit ATP OIL: Bank Debt Gains in Secondary Market Trading AZTECA MOBILE: Files for Chapter 7 Bankruptcy, Owes $22.3 Million BANK OF NEW YORK: Moody's Upgrades Rating on Class B Bond to 'B3' BARNEY'S NEW YORK: S&P Gives Neg. Outlook; Affirms 'B-' Rating BARZEL INDUSTRIES: S&P Puts 'B' on Neg. Watch Due to Weak Market BEARINGPOINT INC: Sec. 341(a) Meeting of Creditors on March 24 BEARINGPOINT INC: Proposes Weil Gotshal Lead Bankruptcy Counsel BEARINGPOINT INC: Endorses Greenhill & Co as Financial Advisor BEARINGPOINT INC: Taps Fragomen Del Rey as Immigration Counsel BEARINGPOINT INC: Wants Sheppard Mullin as Special Counsel BERNARD L. MADOFF: Owner Waives Right to Jury Review on Charges BETHANY GROUP: Affiliates File for Chapter 11 Bankruptcy BH S&B: Court Sets March 30 Deadline for Filing Proofs of Claim BLOCKBUSTER INC: Bank Debt Continues Slide; Sells at Near 35% Off BRODER BROS: Hiring of Financial Advisor Cues S&P's Junk Rating CANWEST MEDIA: DBRS Junks Issuer and Debt Ratings CAPMARK FINANCIAL: S&P Puts 'B+' Rating on Negative Watch CARLOS JUSTO: Files for Personal Bankruptcy in Florida CC MEDIA: S&P Affirms 'B-' Long-Term Corporate Credit Rating CENGAGE LEARNING: Moody's Cuts Rating on $1.22 Bil. Notes to Caa2 CHARTER COMMUNICATIONS: Bank Debt Sells at Substantial Discount CHINATOWN BLOSSOM: Case Summary & Six Largest Unsecured Creditors CITIGROUP INC: DBRS Cuts Preferred Shares Rating to 'D' CLINT BALLINGER: Files Chapter 13; Evident Tech Not Part of Filing COMFORT CO: Emerges From Chapter 11 Bankruptcy COMMSCOPE INC: S&P Puts 'BB-' Corporate Rating on Negative Watch COMMUNITY HEALTH: Bank Debt Sells at Substantial Discount CONGOLEUM CORP: Court Stays Dismissal Order Pending Appeal CONSECO INC: A.M. Best Cuts Ratings to Non-Investment Grade CST INDUSTRIES: S&P Changes Outlook to Negative; Holds 'B' Rating DANA CORP: Bank Debt Continues Slide in Secondary Market Trading DANA CORP: Silver Point Discloses 10.1% Equity Stake DANA CORP: Sues Insurance Companies Over $7.4 Million Losses DELPHI CORP: Seeks Court Nod for Sale of Steering Biz to GM DELTA PETROLEUM: Moody's Pares Rating on $150 Mil. Notes to 'Ca' DENISE BANKSTON: Case Summary & 18 Largest Unsecured Creditors DEXIA MEDIA EAST: Bank Debt Sells at 55% Off Secondary Market DOLE FOOD: S&P Assigns 'B-' Rating on $325 Million 2014 Notes DOMTAR CORP: S&P Changes Outlook to Negative; Affirms 'BB' Rating EASTMAN KODAK: S&P Downgrades Corporate Credit Rating to 'B-' ECLIPSE AVIATION: Now in Ch. 7 Liquidation After Botched Sale EQUITRUST LIFE: A.M. Best Cuts FS Rating to Non-Investment Grade EUROFRESH INC: Moody's Downgrades Corporate Family Rating to 'Ca' EVERYTHING BUT WATER: Organizational Meeting to Form Panel Today EXCHANGE INSURANCE: A.M. Best Cuts Fin'l Strength Rating to Weak EZEQUIEL ALCALA: Voluntary Chapter 11 Case Summary FAIRPOINT COMMUNICATIONS: Bank Debt Sells at 47% Discount FIRST INDUSTRIAL REALTY: Moody's Cuts Senior Unsecured Ratings FORD MOTOR: Restructuring Has No Immediate Impact on DBRS Ratings FREEDOM BANK: Georgia Regulators Appoint FDIC as Receiver G.I. JOE'S: Aims to Keep Going Concern Value; Must Sell in 30 Days G.I. JOE'S: Case Summary & 28 Largest Unsecured Creditors G.I. JOE'S: Organizational Meeting to Form Panel on March 16 GAP INC: Moody's Withdraws 'Ba1' Corporate Family Rating GENERAL MOTORS: Hires Three Law Firms to Advise European Units GENERAL MOTORS: Canadian Union Agrees to Concessions With Firm GREAT REPUBLIC LIFE: A.M. Best Affirms & Withdraws Weak Ratings GSCP LP: Projected Low Earnings Cue Moody's Junk Rating from 'B3' HALLWOOD ENERGY: Gets Interim Okay to Use Cash Collateral HILL SWIM: In Foreclosure; Owes Over $9,000 in Property Taxes HAROLD TREGO: Meeting to Form Creditors' Panel on March 17 HCA INC: Bank Debt Continues Slide in Secondary Market Trading HOMEGOLD FINANCIAL: Jack Sterling Guilty of Deceiving Investors HUDSON PRODUCTS: Moody's Gives Negative Outlook; Holds B1 Rating HUGH BROOKS: Voluntary Chapter 11 Case Summary INDALEX HOLDING: Missed Interest Payment Cues Moody's 'D' Rating INDIANAPOLIS DOWNS: Moody's Downgrades Corporate Rating to 'Caa2' INDIGO JOE'S: Files for Chapter 11 Bankruptcy Protection INSIGHT HEALTH: Refinancing Cues S&P's Rating Downgrade to 'CCC' INTERPUBLIC GROUP: S&P Gives Stable Outlook; Affirms 'B+' Rating JAMES CROMWELL: Voluntary Chapter 11 Case Summary JAY HOSTETTER: Voluntary Chapter 11 Case Summary JOSEPH PREBUL: Trustee to Reveal Possible Bidders for Dealerships JOURNAL REGISTER: Proposes Management Bonuses if 450 More Jobs Cut JOURNAL REGISTER: "Golden Parachute" for Chief Exec. Questioned JOURNAL REGISTER: Shareholder R. Freeman Wants to Probe Finances LAWRENCE-MCFADDEN: Meeting to Form Creditors' Panel on March 13 LEAR CORP: Trading in Bank Debt Continues Slide; Now Near 70% Off LEHMAN BROTHERS: Elliott Associates May Force Hedging LEHMAN BROTHERS: Alvarez & Marsal Queries Barclays on Funds LEVEL 3: Moody's Confirms Corporate Family Rating at 'Caa1' LIBERTY MEDIA: DBRS Halts Ratings; May Have Dropped to "BB" LYONDELL CHEMICAL: Inks Amendment to Credit Agreements LYONDELL CHEMICAL: Gets Go-Signal to Use Cash Collateral LYONDELL CHEMICAL: Gets Green Light to Hire Cadwalader as Counsel LYONDELL CHEMICAL: Seeks to Tap Blank Rome as Special Counsel LYONDELL CHEMICAL: Seeks to Tap Gardere Wynne as Special Counsel MAGNA ENTERTAINMENT: May Sell Three More Horse Race Tracks M/I HOMES: Moody's Downgrades Corporate Family Rating to 'B3' MANITOWOC CO: Bank Debt Continues Slide; Trades at Near 30% Off MASONITE INT'L: Buy-Out Deal May Cost KKR $650 Million MICHAELS STORES: Bank Debt Continues Slide; Now Sells at 45% Off MME LLC: Case Summary & 11 Largest Unsecured Creditors MORGAN STANLEY: S&P Downgrades Rating on $3 Mil. Notes to 'C' MOVIE GALLERY: Plan Trustee Files Avoidance Suit vs. 22 Vendors NASDAQ OMX: Moody's Affirms Corporate Family Rating at 'Ba1' NAT'L STATES INSURANCE: A.M. Best Cuts FS Rating to Marginal NEIMAN MARCUS: Bank Debt Continues Slide; Sells at Near 40% Off NORTEL NETWORKS: Union Slams Firm for Reneging on Severance NOVA CHEMICALS: DBRS Puts 'B(high)' Ratings Under Review OXFORD INDUSTRIES: S&P Puts 'BB-' Rating on Negative CreditWatch PARTY CITY: Case Summary & 20 Largest Unsecured Creditors PILGRIM'S PRIDE: Seeks June 29 Extension of Lease Decision Period PILGRIM'S PRIDE: Court Extends Removal Deadline Amid Objections PILGRIM'S PRIDE: Inks Amendment to $450-Million DIP Facility PRIMUS GUARANTY: Moody's Downgrades Senior Debt Rating to 'B2' PS RACQUET: Vineyard Bank Allowed to Foreclose on Calif. Property QIMONDA NA: Wants to Hire Alvarez & Marsal as Financial Advisor REDCORP VENTURES: Voluntary Chapter 15 Case Summary REGAL JETS: Organizational Meeting to Form Panel on March 16 RESORTS ATLANTIC: Column Financial Can Foreclose on Firm ROBBINS BROS: Can Access Cash Collateral on Interim Basis ROBBINS BROS: Organizational Meeting to Form Panel on March 12 SEARS CANADA: DBRS Confirms Issuer Rating at 'BB' SECURITY BENEFIT: A.M. Best Cuts Ratings to Non-Investment Grade SENSATA TECHNOLOGIES: Moody's Downgrades Default Rating to 'Caa3' SHERRITT INT'L: DBRS Cuts Debt Rating to BB (high)-Negative SLOVENE NATIONAL: A.M. Best Cuts Ratings to Non-Investment Grade SLS INTERNATIONAL: Meeting to Form Creditors' Panel on March 17 SLS INT'L: To Convert Reorganization Case to Liquidation SMART BALANCE: Moody's Gives Negative Outlook; Keeps 'B1' Rating SMITTY'S BUILDING: March 31 Deadline to File Proofs of Claim Set SMURFIT-STONE CONTAINER: Fitch Withdraws D Issuer Default Rating SPANSION INC: May Use Cash Collateral Until March 23 SPANSION INC: Organizational Meeting to Form Panel on March 12 SPANSION INC: To Know Bankruptcy Exit Plan in 30 Days STANFORD INT'L: SEC Sued By Investors for Freezing Accounts STAR TRIBUNE: Matrix Says Union Not Blocking Reorganization STONE ENERGY: S&P Changes Outlook to Negative; Affirms 'B' Rating SUNWEST MANAGEMENT: May File for Chapter 11 Bankruptcy Protection TELEPLUS WORLD: Files for Chapter 11 Bankruptcy in Florida TELEPLUS WORLD: Case Summary & 17 Largest Unsecured Creditors TOUSA INC: Creditors Panel Seeks Standing to Sue Former Directors TOUSA INC: Court Extends Exclusivity Periods to June 22 TOUSA INC: Files Lawsuit Against SunTrust & Homeowners TOUSA INC: Gets Permission to Sell Partnership Stake to Lennar TROPICANA ENTERTAINMENT: Plans Going to Creditors for Vote U.S. MORTGAGE: Meeting to Form Creditors' Panel on March 11 UNITED AIR: Bank Debt Sells at 50% Discount in Secondary Market UNITED AMERICA: A.M. Best Assigns BB+ Rating on Preferred Stock UNITED METHODIST: S&P Puts Stable Outlook on Bonds' BB+ Rating US FOODSERVICE: Bank Debt Sells at 40% Off in Secondary Market VALASSIS COMMUNICATIONS: Bank Debt Sells at 28% Discount VINCENT PITTS: Voluntary Chapter 11 Case Summary VISTEON CORP: Slide Continues; Bank Debt Sells at 84% Discount VPB LLC: Lender Sets March 20 Auction of Village Place W.R. GRACE: Failed to Disclose Asbestos in Libby, Says Witness WEST CORP: Bank Debt Sells at 30% Discount in Secondary Market WHITE MOUNTAINS: A.M. Best Affirms "bb" Preferred Stock Rating WILDWOOD INDUSTRIES: Involuntary Chapter 11 Case Summary YANKEE CANDLE: Bank Debt Halts Slide, Sells at 38% Discount * 2006 Law Hurts Online Gambling Sites * A.M. Best Keeps Stable Outlook on U.S. Commercial Lines Market * A.M. Best: 2009 Global Non-Life Reinsurance Outlook Is Stable * Autopart Makers' Bank Debt Continues Slump in Secondary Market * House Passes "Cram Down" Legislation for Troubled Homeowners * Retailers' Bank Debt Continues Slump in Secondary Market * BOND PRICING -- For Week From March 2 - 6, 2009 ********* ABITIBIBOWATER INC: DBRS Assigns Default Recovery Ratings --------------------------------------------------------- Dominion Bond Rating Service on March 3, 2009, assigned default recovery ratings of RR1 to the secured debt of Abitibi Consolidated Company of Canada and RR4 to the unsecured debt of Abitibi Consolidated Inc. (Abitibi) and subsidiary companies. DBRS has also assigned default recovery ratings of RR1 to the secured debt of Bowater Inc. (Bowater) and subsidiaries and RR5 to the unsecured debt of Bowater Inc. and subsidiaries. Pursuant to DBRS's Leveraged Finance Rating Methodology, default ratings are the result of hypothetically stressing the Company's operations to the point of default, assessing the market value of the company as a going concern at the point of default, and then calculating the likelihood of recovering the company's secured and unsecured debt. A RR1 recovery rating anticipates a recovery of 90% to 100% of the principal, a RR4 recovery rating 30% to 50%, and a RR5 recovery rating 10% to 30%. The ratings of AbitibiBowater Inc. and its subsidiary companies remain Under Review with Negative Implications, where they were placed on October 30, 2008, due to the refinancing risk facing the Company over the near term, the direct result of the ongoing global credit crisis and deteriorating industry fundamentals. DBRS is concerned that substantial debt maturities and limited cash availability may adversely affect ABH's ability to successfully refinance debt maturities in the next 12 months. The successful completion of a recently announced exchange offer of second and third lien notes and the new issue of first lien notes by Bowater Finance would eliminate the near-term refinancing risk of one of ABH's subsidiaries. However, Abitibi-Consolidated Company of Canada still has a $347 million term loan due the end of March 2009, and a successful refinancing or repayment of this loan would be required to remove the Under Review with Negative Implications designation. The successful completion of the Bowater exchange offer would also necessitate a change in Bowater's recovery rating. The outlook for newsprint, market pulp and lumber markets, the key drivers of ABH's earnings and cash flows, remains bleak. The rate of decline in North American newsprint consumption has increased in recent months and will require aggressive production curtailments to support current product prices. Failure to keep supply close to demand would trigger another downward trend in prices that would negatively impact earnings and cash flows. In addition, reduced global economic activity has lowered demand for all paper and packaging products and the associated raw material, market pulp. Rapidly rising pulp inventories have negatively impacted pulp prices, a condition that is expected to be maintained through H12009, adding further pressure on corporate earnings. As a result, the near-term profitability outlook for ABH is negative as the benefits of a weaker Canadian dollar and stable, albeit low, lumber demand and prices (lumber demand and prices are close to trough levels for this cycle) are outweighed by the negative influence of weaker pulp and newsprint markets. ABH's credit profile is expected to worsen from 2008 levels. Rating actions: (1) Issuer: Abitibi-Consolidated Company of Canada Senior Secured Notes UR-Neg. B (high) -- Recovery Rating: RR1 (2) Issuer: Abitibi-Consolidated Company of Canada Senior Secured Term Loan UR-Neg. B (high) -- Recovery rating: RR1 (3) Issuer: Abitibi-Consolidated Company of Canada Notes UR-Neg. CCC (high) -- Recovery rating: RR4 (4) Issuer: Abitibi-Consolidated Company of Canada Senior Unsecured Exchange Notes UR-Neg. CCC (high) -- Recovery rating: RR4 (5) Issuer: Abitibi-Consolidated Inc. Issuer Rating UR-Neg. CCC (high) -- (6) Issuer: Abitibi-Consolidated Inc. Senior Unsecured Debt UR-Neg. CCC (high) -- Recovery rating: RR4 (7) Issuer: Bowater Canadian Forest Products Inc. Senior Debentures UR-Neg. CCC (high) -- Recovery rating: RR5 (8) Issuer: Bowater Inc. Issuer Rating UR-Neg. CCC (high) -- (9) Issuer: AbitibiBowater Inc. Issuer Rating UR-Neg. CCC -- ACCURIDE CORP: Bank Debt Sells at Substantial Discount ------------------------------------------------------ Participations in a syndicated loan under which Accuride is a borrower traded in the secondary market at 62.00 cents-on-the- dollar during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 5.60 percentage points from the previous week, the Journal relates. The loan matures on January 6, 2012. Accuride pays 225 basis points above LIBOR to borrow under the facility. The bank debt is not rated by Moody's. It carries a junk rating by Standard & Poor's. As reported by the Troubled Company Reporter on January 29, 2009, Accuride bank debt traded in the secondary market at 69.00 cents- on-the-dollar, an increase of 1.83 percentage points from the previous week. The bank debt used to carry Moody's B2 rating and Standard & Poor's B- rating. Syndicated loans of other auto parts suppliers also trade at substantial discount in the secondary market during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. Participations in a syndicated loan under which Dana Corp. is a borrower traded at 28.71 cents-on-the-dollar, a drop of 1.71 percentage points from the previous week. The loan matures on January 31, 2015. Dana Corp. pays 375 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's B+ rating. Visteon Corp. bank debt traded at 16.07 cents-on-the-dollar, a drop of 1.64 percentage points from the previous week. The loan matures on May 30, 2013. Visteon pays 300 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's B- rating. Lear Corp. bank debt traded in the secondary market at 31.17 cents-on-the-dollar, a drop of 3.40 percentage points from the previous week. The loan matures on March 29, 2012. Lear Corp. pays 250 basis points above LIBOR to borrow under the facility. The bank debt is not rated. About Accuride Corp. Accuride Corporation, headquartered in Evansville, Indiana, is a diversified North American manufacturer and supplier of commercial vehicle components. Principal products include wheels, wheel-end components and assemblies, truck body and chassis parts, and seating assemblies. Revenues in 2007 were approximately $1.0 billion. AF EVANS: Files for Chapter 11 Bankruptcy Protection ---------------------------------------------------- Blanca Torres at San Francisco Business Times reports that A.F. Evans Co. in Oakland said that it has sought bankruptcy protection under Chapter 11 due to dropping house prices and the credit crunch. Business Times quoted A.F. Evans CEO and Chairperson Art Evans, who also started the business, as saying, "The total collapse of the condo market and a couple other things that happened overwhelmed this company. We're not happy to (file for bankruptcy). We've been trying to sell properties to pay off debts for two years... This gives us time, it's all it does." Business Times states that the bankruptcy filing won't affect AF Evans' property management or senior housing subsidiaries. According to Business Times, A.F. Evans estimated that it has over $50 million in debts and that it will raise $35 million from selling properties and a portion of its interests in some properties. Business Times relates that A.F. Evans has three projects going through the entitlement process in San Francisco, which has cost the firm millions in fees and holding expenses. The report quoted Mr. Evans as saying, "We saw the problem coming. We would have worked our way through it had the market had not completely collapsed.... Going forward, we will be focused on property management, assisted living and on doing affordable housing. I will stay with the company until it's on its feet and emerges from bankruptcy healthy." AF Evans won't lay off any of its 550 workers, Business Times states. Development arm, A.F. Evans Development Inc., will keep looking for projects in the Bay Area, according to the report. A.F. Evans Co. is a developer in Oakland. AF EVANS: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------- Debtor: A.F. Evans Company, Inc. 1000 Broadway, Ste. 300 Oakland, CA 94607 Bankruptcy Case No.: 09-41727 Type of Business: The Debtor is a property developer. See: http://www.afevans.com/ Chapter 11 Petition Date: March 5, 2009 Court: Northern District of California (Oakland) Judge: Edward D. Jellen Debtor's Counsel: Eric A. Nyberg, Esq. e.nyberg@kornfieldlaw.com Kornfield, Nyberg, Bendes and Kuhner 1999 Harrison St. #2675 Oakland, CA 94612 Tel: (510) 763-1000 Estimated Assets: Less than $50,000 Estimated Debts: $100 million to $500 million The Debtor's Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Key Bank $10,861,539 PO Box 94831 Cleveland, OH 44101-4831 Union Bank $10,000,000 PO Box 30115 Los Angeles, CA 90030 US Bank $9,054,101 PO Box 790401 St. Louis, MO 63179 MW Housing Partners $8,637,394 1301 5th Ave, Ste 3100 Seattle, WA 98101 Trinity Housing Foundation $7,138,385 65 Civic Dr Pittsburg, CA 94565 Cushman King Investors LLP $3,000,000 1801 Oakland Blvd, #200 Walnut Creek, CA 94596 Central Valley $1,574,963 Community Bank 7100 N financial Dr., Suite 101 Fresno, CA 93720 William McClure $1,030,715 66 Balboa Ave. San Rafael, CA 94901 James E. Roberts Obayashi $827,507 Corp 20 Oak Court Danville, CA 94526 Alan Greenwald $822,559 1745 Vallejo St. San Francisco, CA 94123 AICCO, Inc. $723,125 1630 E. Shaw Ave., Suite 160 Fresno, CA 93710 Citizens Housing Corporation $499,196 Pyatok Architects, Inc. $478,245 Quintin McMahon $452,910 Cathay Bank Washington Lending $350,000 Division John Rimbach $335,365 John Robertson $328,534 Rjc & Associates Inc. $148,800 The petition was signed by Richard A Bell, executive vice president. AF EVANS: Interests in "Coventry Park" to be Auctioned April 6 -------------------------------------------------------------- CP III Evans, LLC, as secured creditor, disclosed in a legal notice that it will hold a public auction on Monday, April 6, 2009, at 10:00 a.m. Pacific Time at the offices of Manatt, Phelps & Phillips, LLP, One Embarcadero Center, 30th Floor, San Francisco, California 94111 of these ownership interests: a) a 62.802% Class B membership interest of A.F. Evans Company, Inc. in Coventry Park, LLC, which interest is subject to the senior security interest of Cushrex/Coventry Investors, L.P.; b) a 5.314% Class B membership interest of Arthur F. Evans in Coventry Park, LLC; c) a 100% ownership interest of A.F. Evans in 1550 Sutter, Inc. The sale will occur pursuant to the applicable provisions of the Uniform Commercial Code and the Pledge and Security Agreements in favor of secured creditor covering each interest in connection with a $3,000,000 loan made to the borrower. All interests relate to the ownership interest of an assisted living facility located at 1550 Sutter Street, San Francisco, California, commonly known as "Coventry Park". The interests will be sold on an "as is, with all faults" basis. Final bids must be submitted and received by April 6, 2009, at 10:00 a.m. Pacific Time to: Manatt, Phelps & Phillips, LLP Attention: Marv Pearlstein, Esq. Fax: (415) 291-7511 For more information, please fax Otten, Johnson, Neff & Ragonetti, P.C., attorneys for CP III, Attention: Michael Westover, Esq., or Andrew Schwatz, Esq., at (303) 825-6525. The fax must include the name of the party interested in bidding and the name, e-mail address and address of the person from such party that CP III can contact. Blanca Torres of the San Francisco Business times reported March 7, 2009, that A.F. Evans Company has filed for Chapter 11 bankruptcy. "The total collapse of the condo market and a couple other things that happened overwhelmed this company," said Art Evans, chief executive and chairman of the company. "We're not happy to (file for bankruptcy). We've been trying to sell properties to pay off debts for two years . This gives us time, it's all it does." According to the report, the company said the filing will not affect its property or senior housing subsidiaries. The company is not planning any layoffs. Based in Oakland, Calif., A.F. Evans Company, Inc. -- http://www.afevans.com/-- is a subdivider/developer of real estate. AFFILIATED COMPUTER: Fitch Affirms 'BB' Issuer Default Rating ------------------------------------------------------------- Fitch Ratings has revised the Rating Outlook on Affiliated Computer Services, Inc. to Positive and affirmed the ratings: -- Issuer Default Rating at 'BB'; -- Senior secured revolving credit facility at 'BB'; -- Senior secured term loan at 'BB'; -- Senior notes at 'BB-'. Approximately $3.4 billion of debt, including the $1 billion revolving credit facility, is affected by Fitch's action. The Positive Outlook reflects: -- The demonstrated resiliency of ACS' business model to the current U.S. recession, given the company's solid financial results for calendar 2008, including revenue, EBITDA and free cash flow growth of approximately 7%, 5% and 9%, respectively. -- Strong new contract bookings growth of 31% in calendar 2008 and record new business pipeline of $2.1 billion at year-end, both of which are key drivers of future revenue growth. ACS' pipeline also includes new opportunities in the U.S. federal market following the expiration of a non-competition agreement with Lockheed Martin Corporation in November 2008. -- Greatly reduced event risk in terms of debt-financed share repurchases due to the expiration on March 20, 2009 of an uncommitted term loan accordion feature with $2 billion remaining that served as ACS' primary funding vehicle for prior debt-financed share repurchases. Fitch expects no further term loan borrowings prior to expiration. -- Fitch's belief that the terms of the credit agreement also diminish future event risk associated with significant debt- financed share repurchases and/or acquisitions until the $1.8 billion term loan due March 2013 is repaid, including: -- Mandatory prepayments equal to 100% of the net proceeds from any permitted debt issuance, excluding refinancing of the existing senior notes; -- Maximum senior leverage ratio of 2.25 times (x) compared with Fitch's estimate of approximately 2x at Dec. 31, 2008; and -- Revolver borrowings for share repurchases are limited to a maximum of $350 million and any borrowings require minimum liquidity of $300 million, which is based on the summation of cash in excess of $50 million, if any, plus borrowings available under the revolving facility, prior to and after the revolver is drawn. The ratings are supported by ACS': -- Consistent FCF due to a significant recurring revenue base from long-term outsourcing contracts (85% of total revenue); -- Diverse business lines, several of which are insulated or countercyclical to U.S. economic growth, with minimal exposure (5%-10% of revenue) to discretionary IT spending, such as consulting; -- Solid growth prospects for the business process outsourcing services market (75% of total revenue); and -- Geographically diverse offshore delivery model that reduces the effect of currency fluctuations and/or salary inflation in individual offshore markets. Rating concerns center on: -- ACS' acquisitive nature, which could be partially debt- financed going forward, partly offset by an average deal size of $50 million - $100 million; -- Operating profit pressures in the Government segment due primarily to declines in electronic toll processing volume and project-based work in the transportation business (13% of total revenue); -- The ongoing Securities and Exchange Commission (SEC) and Department of Justice investigations relating to historical stock option grants, and several lawsuits relating to the attempted buyout transaction by founder and chairman Darwin Deason and Cerberus in 2007. The rating of 'BB-' for the senior notes incorporates the fact that the secured credit facilities have the sole rights to ACS' accounts receivable, which represented approximately 23% of total assets and 44% of tangible assets as of Dec. 31, 2008, despite the notes being equally and ratably secured with the senior secured credit facilities under the terms of the related indenture. The credit facility is secured by a first priority perfected pledge of all notes owned by the borrowers and guarantors, all capital stock of predominantly all domestic subsidiaries and certain foreign subsidiaries of ACS, and a first priority perfected security interest in all other assets owned by ACS, including tangible and intangible assets. As of Dec. 31, 2008, the financial covenant ratios contained in the credit facility were contingent upon the amount of covenant adjusted debt outstanding. CAD is defined as the aggregate principal amount of the initial term loan ($800 million) and incremental term loans utilized ($1 billion) for the repurchase of ACS' senior notes or equity, excluding any portion that is incurred in conjunction with the repurchase of the company's existing senior notes ($0). Subsequent to the expiration of the uncommitted term loan accordion feature on March 20, 2009, the financial covenant ratios become fixed since the amount of CAD outstanding ($1.8 billion) can no longer change. The financial covenants consist of bank-defined maximum consolidated senior leverage ratio of 2.25x, maximum consolidated total leverage ratio of 3.25x and minimum interest coverage covenant of 4.5x. Although total leverage (total debt/operating EBITDA) year-over-year was relatively unchanged at 2.1x as of Dec. 31, 2008, net leverage improved to 1.6x from 1.9x due to a higher cash balance and EBITDA growth. Fitch estimates interest coverage (operating EBITDA/ gross interest expense) increased to 7.8x for the latest 12 months ended Dec. 31, 2008 compared with 6.2x in the year-ago period due to EBITDA growth and lower market interest rates rather than debt reduction. Fitch believes ACS' liquidity is solid and was supported by approximately $567 million of cash at Dec. 31, 2008 and $859 million of availability on its $1 billion secured revolving credit facility expiring 2012, net of $67 million of borrowings and $74 million of letters of credit. The credit facility also includes an uncommitted accordion feature enabling ACS to increase the size of the revolver by up to $750 million for general corporate purposes under certain circumstances. Liquidity is further supported by ACS' consistent FCF, which increased to $480 million in calendar 2008 from $439 million in the prior year, despite the challenging economic environment. Fitch anticipates approximately $500 million of FCF in fiscal 2009 ending June 30, 2009. Total debt as of Dec. 31, 2008 was approximately $2.4 billion, consisting primarily of $1.8 billion of secured term loans due 2013 and $250 million of senior notes due in June 2010 and June 2015. ACS' near-term debt maturities are manageable as the next material debt obligations of $275 million occur in fiscal year 2010. However, if ACS' failure to timely file its 10-K for fiscal 2006 is ruled an event of default by an appeals court, Fitch believes ACS will utilize existing cash and incremental borrowings under its $1 billion revolver to refinance the $500 million of senior notes that would become immediately due at par value plus accrued interest. AMERICAN ACHIEVEMENT: S&P Raises Corporate Credit Rating to CCC+ ---------------------------------------------------------------- Standard & Poor's Ratings Services said it raised its corporate credit rating on Austin, Texas-based American Achievement Corp. to 'CCC+' from 'SD' (selective default). At the same time, S&P raised its issue-level rating on American Achievement Group Holding Corp.'s (the parent company of AAC) 12.75% senior PIK notes to 'CCC-' (two notches lower than the 'CCC+' corporate credit rating on AAC) from 'D'. The recovery rating on these securities remains at '6', indicating S&P's expectation for negligible (0%-10%) recovery for lenders in the event of a payment default. The rating outlook is negative. In addition, S&P lowered the issue-level rating on AAC Group Holding Corp.'s (the intermediate holding company of AAC) 10.25% senior discount notes to 'CCC-' (two notches lower than the 'CCC+' corporate credit rating on AAC) from 'CCC+'. The recovery rating on these securities remains at '6', indicating S&P's expectation for negligible (0%-10%) recovery for lenders in the event of payment default. S&P also lowered the issue-level rating on AAC's senior secured credit facility to 'B' (two notches higher than the 'CCC+' corporate credit rating on AAC) from 'BB-'. The recovery rating on these securities remains unchanged at '1', indicating S&P's expectation for very high (90%-100%) recovery for lenders in the event of a payment default. In addition, S&P lowered the issue-level rating on the 8.25% senior subordinated notes to 'CCC+' (at the same level as the corporate credit rating on AAC) from 'B'. The recovery rating remains unchanged at '4', indicating S&P's expectation for average (30%-50%) recovery for lenders in the event of a payment default. S&P removed all ratings from CreditWatch with negative implications, where they were placed on May 21, 2008. "The upgrade of AAC follows the conclusion of S&P's review of the company's capital structure after the repurchase of $104 million of the 12.75% senior PIK notes issued by AAC's parent company at an aggregate purchase price of $24 million," explained Standard & Poor's credit analyst Michael Listner. The purchase was at a substantial discount to the par amount of the outstanding issue, and the sellers of the notes, representing a majority in principal amount, consented to a second supplemental indenture which removed substantially all of the restrictive and reporting covenants under the original indenture. "As a result," said Mr. Listner, "we viewed the purchase as being tantamount to default given the distressed financial condition of the company and our concerns around AAC's ability to sustain its capital structure over the intermediate term." "Despite the reduction in consolidated leverage resulting from the PIK notes purchase, and historical stability in demand for commemorative products produced by AAC," said Mr. Listner, "the company is unlikely to reduce its highly leveraged financial profile over the intermediate term." S&P's measure of pro forma total consolidated leverage was 7.2x at November 2008. This is because S&P expects that cash flow available for debt repayment in fiscal years 2009 and 2010 will be matched or exceeded by capitalized interest on the remaining outstanding PIK notes at the parent company level. AMERICAN COMMUNITY MUTUAL: Cut to Non-Investment Grade by AM Best ----------------------------------------------------------------- A.M. Best Co. has downgraded the financial strength rating to B (Fair) from B+ (Good) and issuer credit rating to "bb" from "bbb-" of American Community Mutual Insurance Company (American Community) (Livonia, MI). The outlook for both ratings is negative. The downgrades reflect material unfavorable operating results in the last three years with corresponding decreases in surplus. The company's net losses resulted from inadequate product pricing, underwriting and reserving primarily within its group major medical segment in 2007. American Community's write-off of a discontinued information system in 2006 and a subsidiary, Precedent Insurance Company, in 2007 also contributed to the losses. Additionally, the lower surplus level includes two surplus notes representing a sizeable portion of the total amount. American Community's premium revenue and net income are derived primarily from marketing major medical products to individuals and employer groups chiefly in seven Midwestern states and Arizona. Although the company implemented a number of corrective actions over the past few years to improve its performance, A.M. Best expects its future operating results will be challenged by an increasingly competitive major medical market dominated by larger managed care carriers with deeper network discounts. AMERICAN INTERNATIONAL: Racing Against Time to Divide Business -------------------------------------------------------------- American International Group Inc. is racing against time, and bracing against a deteriorating global economy, to separate its operating businesses from the mounting debt of its corporate holding company, industry observers said in last week's issue of BestWeek U.S./Canada, according to A.M. Best Co. If the newest version of a federal rescue plan to keep the company solvent, unveiled last week, - now grown to a potential $180 billion in federal aid -- works, the result will be rebranded and independent insurance companies standing on their own, or sold to other companies, with the AIG name reserved for a holding company that holds only portfolios of toxic assets and debts, according to BestWeek. Also, in BestWeek Europe, Lloyd's has long been aware that currency movements can have subtle, and not so subtle, effects. But after a run of profitable years, both Lloyd's and the wider insurance market are healthy, and not unduly concerned about the pound's fall, noted Luke Savage, Lloyd's director of finance, risk management and operations. And in BestWeek U.S./Canada, a series of hearings convened by House Financial Services Committee Chairman Barney Frank, his Senate counterpart Chris Dodd, and the Obama administration have set April's G-20 meeting in London as a deadline to at least offer an outline of the plan to regulate systemic risk, but the list of questions they will have to answer grows longer each day. BestWeek is published by A.M. Best Co. for insurance professionals. To subscribe, please visit: http://www.ambest.com/sales/BestWeekor e-mail your request to customer_service@ambest.com A.M. Best Comments on Govt.'s Revised Plan for AIG A.M. Best on March 2 commented that all financial strength ratings and issuer credit ratings are unchanged for AIG and its subsidiaries. The rating outlooks remain negative. This comment takes into consideration the record loss of $61.7 billion posted by AIG in fourth quarter 2008 and the continued and steadfast financial support provided by the Federal Reserve Bank of New York (FRBNY) and the United States Department of the Treasury which, under a revised plan, provides AIG with additional capital and liquidity to enhance its capital structure, provide liquidity and assist in the divestiture of assets. Some of the main features of the revised plan include a new equity commitment to AIG from the U.S. Treasury of $30 billion, modified (equity-like) terms of AIG's Series D preferred equity, in-kind repayment of its senior secured lending facility with the FRBNY, securitizations, elimination of the LIBOR floor in its existing senior secured lending facility with the FRBNY and continued access to the remaining FRBNY facility. A.M. Best's decision to leave the ratings unchanged at this time reflects the continued commitment of the U.S. Government to support AIG's financial position, demonstrated by the new and revised plans announced recently. Despite the continued financial support of the government, the negative rating outlook reflects A.M. Best's concern regarding the billions of remaining notional exposure at the AIG Financial Products unit and the negative implications and challenges associated with AIG's "core" franchise, including the recent and potential employee turnover, continued market acceptance in the commercial casualty sector and the inherent competitive pressures brought on by professional insurance brokers and risk managers alike. Management believes plans to ultimately spin off a portion of AIG's core franchise property/casualty business should help to alleviate these concerns. In addition, a potential initial public offering of AIA and ALICO is being reviewed as an alternative path to monetization of these assets. The domestic life and retirement savings subsidiaries continue to face pressures as operating results are expected to erode from prior levels as a result of poor equity market performance, spread compression and lower sales. Additionally, overall distribution for the domestic life and retirement services has tempered due to various factors associated with the risks and reputation of the overall franchise. A.M. Best expects to finalize its annual review of AIG's statutory operating companies in the coming months. While AIG's secure rating is heavily weighted on the financial support provided by the U.S. Government, A.M. Best's review of AIG's operating entities goes beyond the government's involvement and its ability to stabilize AIG and protect the interests of policyholders. A.M. Best's view of AIG's financial flexibility and the fungibility of capital across the organization, as well as the adequacy of capital at the operating unit level, will need to be reflected in the rating evaluation of AIG's operating subsidiaries. In addition, trends in operating performance and business profile are further considerations that are a part of A.M. Best's published rating methodology. Deterioration in those areas may lead to a downgrade in the financial strength ratings and the issuer credit rating of the holding company. While the ratings may be downgraded, it is unlikely that the financial strength ratings assigned to the key operating companies will be downgraded below A- (Excellent) so long as the full commitment of the U. S. Government supporting AIG remains. AMERICAN INT'L: Bailout Beneficiaries Include Two Dozen Firms ------------------------------------------------------------- Serena Ng and Carrick Mollenkamp at The Wall Street Journal report that the beneficiaries of the government's bailout of American International Group Inc. include at least two dozen U.S. and foreign financial institutions. WSJ relates that legislators demanded that the Federal Reserve disclose names of financial firms that have received money from AIG. WSJ says that the government's financial assistance helped prevent AIG's counterparties from incurring immediate losses on mortgage-backed securities and other assets they had insured through the company. The bailout, states that report, provided AIG with cash to pay the banks collateral on the money-losing trades and bought out underlying mortgage-linked securities, many of which are currently worth less than half their original value. According to WSJ, institutions that have been paid $50 billion since the Federal Reserve first extended financial assistance to AIG include: -- Goldman Sachs Group Inc., which received $6 billion in payments between mid-September and December 2008; -- Deutsche Bank AG, which received $6 billion in payments between mid-September and December 2008; -- Merrill Lynch; -- Societe Generale SA; -- Morgan Stanley; -- Royal Bank of Scotland Group PLC; and -- HSBC Holdings PLC. WSJ notes that Federal Vice Chairpesron Donald Kohn had declined during a Senate Banking Committee hearing in Washington on Thursday to identify AIG's trading partners, saying that doing so would make people wary of doing business with AIG. According to the report, Mr. Kohn told lawmakers that he would take their requests to his colleagues. The Federal Reserve, says the report, is considering whether to disclose more details about the AIG transactions. AIG Faces Class Action Lawsuit From Tramont Guerra The Securities Law Firm of Tramont Guerra & Nunez, PA, said that AIG Medium Term Notes, Series AIG-FP investors are prospective members of class action lawsuit filed in the United States District Court for the Southern District of New York on January 15, 2009. AIG and major Wall Street firms were named parties to the class action lawsuit. The major Wall Street firms involved in the securities underwriting syndicate who were named parties included: -- Banc of America Securities, LLC; -- Citigroup Global Markets; -- UBS Securities, LLC; -- Barclays Capital, Inc.; -- Credit Suisse Securities (USA); and -- Morgan Stanley & Co. The class action lawsuit further alleges that AIG and the underwriting syndicate had "access to material non-public information" that represented adverse facts which were not disclosed. Prospective class members need to determine which legal process is more suitable for them to recover investment losses, a class action lawsuit or an individual securities arbitration claim filed with FINRA. The Wall Street firms which were involved with the underwriting of the public offerings are obligated to conduct due diligence of facts concerning the risks associated with the investment. Many investors were advised by their financial advisors that an investment in AIG Medium Term Notes were suitable for current income investment objectives. Recommendations of unsuitable investments and/or concentrated investments in the financial sector are both sales practice violations which form the basis of a securities arbitration claim filed with FINRA should an investor sustain damages (losses) as a result. In some cases, shareholders must "opt-out" as a class member in order to pursue a securities arbitration claim, otherwise this legal option is not available. The Securities Law Firm of Tramont Guerra & Nunez, PA, is a nationally recognized, Martindale Hubbell "AV" rated securities law firm. About American International Based in New York, American International Group, Inc. (AIG), is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. During the third quarter of 2008, requirements to post collateral in connection with AIG Financial Products Corp.'s credit default swap portfolio and other AIGFP transactions and to fund returns of securities lending collateral placed stress on AIG's liquidity. AIG's stock price declined from $22.76 on Sept. 8, 2008, to $4.76 on Sept. 15, 2008. On that date, AIG's long-term debt ratings were downgraded by Standard & Poor's, a division of The McGraw- Hill Companies, Inc., Moody's Investors Service and Fitch Ratings, which triggered additional requirements for liquidity. These and other events severely limited AIG's access to debt and equity markets. On Sept. 22, 2008, AIG entered into an $85 billion revolving credit agreement with the Federal Reserve Bank of New York and, pursuant to the Fed Credit Agreement, AIG agreed to issue 100,000 shares of Series C Perpetual, Convertible, Participating Preferred Stock to a trust for the benefit of the United States Treasury. At Sept. 30, 2008, amounts owed under the facility created pursuant to the Fed Credit Agreement totaled $63 billion, including accrued fees and interest. Since Sept. 30, AIG has borrowed additional amounts under the Fed Facility and has announced plans to sell assets and businesses to repay amounts owed in connection with the Fed Credit Agreement. In addition, subsequent to Sept. 30, 2008, certain of AIG's domestic life insurance subsidiaries entered into an agreement with the NY Fed pursuant to which the NY Fed has borrowed, in return for cash collateral, investment grade fixed maturity securities from the insurance subsidiaries. On Nov. 10, 2008, the U.S. Treasury agreed to purchase, through its Troubled Asset Relief Program, $40 billion of newly issued AIG perpetual preferred shares and warrants to purchase a number of shares of common stock of AIG equal to 2% of the issued and outstanding shares as of the purchase date. All of the proceeds will be used to pay down a portion of the Federal Reserve Bank of New York credit facility. The perpetual preferred shares will carry a 10% coupon with cumulative dividends. AIG and the Fed also agreed to revise the existing FRBNY credit facility. The loan terms were extended from two to five years to give AIG time to complete its planned asset sales in an orderly manner. The equity interest that taxpayers will hold in AIG, coupled with the warrants, will total 79.9%. At Sept. 30, 2008, AIG had $1.022 trillion in total consolidated assets and $950.9 billion in total debts. Shareholders' equity was $71.18 billion, including the addition of $23 billion of consideration received for preferred stock not yet issued. ASARCO LLC: Agrees to Sell Operate Assets to Sterlite for $1.7-Bil ------------------------------------------------------------------ Sterlite Industries (India) Limited, a subsidiary of Vedanta Resources plc, the London-based FTSE 100 metal and mining group, announced March 7 that it has signed a new agreement with ASARCO LLC for purchase of substantially all the operating assets of Asarco. The purchase consideration comprises (a) a cash payment of US$ 1.1 billion on closing; and (b) a senior secured non-interest bearing promissory note for US$600 million, payable over a period of nine years as follows: (i) US$ 20 million per year from the end of second year for a period of seven years; and (ii) a terminal payment of US$ 460 million at the end of the ninth year, totaling to US$ 600 million. In the event that the annual average of daily copper prices in a particular year increases beyond US$6,000 per tonne, the annual payment in that year will be proportionately increased subject to a maximum of US$ 66.67 million and the terminal payment in the ninth year will be correspondingly reduced, keeping the total payment at US$ 600 million. The principal amount of the Note will be adjusted for any variations in working capital on closing. The obligations under the Note are secured against the assets being acquired and are without any recourse to Sterlite. The agreement is subject to the approval of the U.S. Bankruptcy Court for the Southern District of Texas, Corpus Christi Division. Asarco, formerly known as American Smelting and Refining Company, is a 110 year old company and is currently the third largest copper producer in the United States of America. It sold approximately 237,000 tonnes of refined copper in 2008. Asarco's mines currently have estimated reserves of 5 million tonnes of contained copper. For the year ended December 31, 2008, Asarco had total revenues of nearly US$1.9 billion and profit before tax of US$ 393 million. The integrated assets to be acquired include three open-pit copper mines and associated mills and SX-EW in Arizona, USA, a copper smelter in Arizona, USA and a copper refinery, rod and cake plants and a precious metals plant in Texas, USA. The asset acquisition is on a cash free and debt free basis. Sterlite will assume operating liabilities but not legacy liabilities for asbestos and environmental claims for ceased operations. The consideration being paid is towards the gross fixed assets and working capital of Asarco. "We are happy that we have reached agreement with ASARCO on these new terms," said Mr. Anil Agarwal, Chairman, Sterlite. "This acquisition is in line with our strategy of leveraging our existing skills to become a diversified global copper producer and creating long term value for shareholders." Asarco is expected to create significant long term value for all stakeholders through: -- Leveraging Sterlite's proven operational and project skills to develop and optimise Asarco's mines and plants; -- Access to attractive mining assets with long life; -- Geographic diversification in the North American market; and -- Stable operating and financial platform for Asarco. RBS Securities acted as financial advisor and Shearman & Sterling acted as legal advisor to Sterlite in this transaction. Barclays Capital acted as financial advisor and Baker Botts L.L.P. acted as legal advisor to Asarco in this transaction. For further information, please contact: Sumanth Cidambi Director - Investor Relations Sterlite Industries (India) Limited sumanth.cidambi@vedanta.co.in Tel: +91 22 6646 1531 Sheetal Khanduja Manager - Investor Relations Sterlite Industries (India) Limited Sheetal.khanduja@vedanta.co.in Tel: +91 22 6646 1427 About Sterlite Industries Sterlite Industries is India's largest non-ferrous metals and mining company with interests and operations in aluminum, copper and zinc and lead. It is a subsidiary of Vedanta Resources plc, a Londonbased diversified FTSE 100 metals and mining group. Sterlite Industries' main operating subsidiaries are Hindustan Zinc Limited for its zinc and lead operations; Copper Mines of Tasmania Pty Limited for its copper operations in Australia; and Bharat Aluminum Company Limited for its aluminum operations. The company operates its own copper operations in India. The company has entered the commercial energy generation business and is in the process of setting up a 2,400MW independent power plant through its wholly owned subsidiary, Sterlite Energy Limited. Sterlite Industries is listed on the Bombay Stock Exchange and National Stock Exchange in India and the New York Stock Exchange in the United States. For more information, please visit www.sterlite- industries.com. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). The Debtors submitted to the Court a joint plan of reorganization and disclosure statement on July 31, 2008. The plan incorporates the sale of substantially all of the Debtors' assets to Sterlite Industries, Ltd., for US$2,600,000,000. Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, submitted a reorganization plan to retain its equity interest in ASARCO LLC, by offering full payment to ASARCO's creditors in connection with ASARCO's Chapter 11 case. AMC would provide up to US$2.7 billion in cash as well as a US$440 million guarantee to assure payment of all allowed creditor claims, including payment of liabilities relating to asbestos and environmental claims. AMC's plan is premised on the estimation of the approximate allowed amount of the claims against ASARCO. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Agree to Creditors Panel's Retention of Exponent ------------------------------------------------------------ In a negotiated order signed by Judge Richard S. Schmidt, ASARCO LLC and the Official Committee of Unsecured Creditors agree that the Creditors Committee may retain Exponent Inc. as environmental consultants to review proposed environmental settlements subject to these limitations: (a) At the Creditors Committee's direction, Exponent may evaluate ASARCO's proposed environmental settlements of five sites from the Custodial Sites Settlement Agreement filed with the Court on September 25, 2008, and five sites from the Miscellaneous Federal and State Sites Settlement Agreement filed with the Court on the same date for sites in which ASARCO settled for more than $6,000,000. ASARCO will make available to Exponent all information reasonably requested by Exponent or the Creditors Committee to evaluate ASARCO's basis for the proposed settlements; (b) Exponent may evaluate ASARCO's proposed settlement at the Omaha site filed with the Court on September 25, 2008. Exponent's evaluation will be limited to reviewing the expert reports filed during the estimation hearing, related testimony and exhibits relied upon by the experts, and the U.S. Environmental Protection Agency's October 2008 Record of Decision for the Omaha site, including supporting reports and appendices, and related documents obtained by Asarco Incorporated in connection with Freedom of Information Act litigation. The Creditors Committee will insure that Joyce Tsuji, Ph.D., does not participate in Exponent's review or communicate with Exponent personnel, who are conducting the review. Dr. Tsuji is a principal scientist within the Center for Toxicology and Mechanistic Biology of Exponent's Health Sciences practice; (c) Notwithstanding the limitations, the Creditors Committee will have the right to participate in all discovery, settlement discussions and hearings in connection with any request pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure to approve an environmental settlement. The Creditors Committee may seek the advice of Exponent in connection with those procedures as it deems necessary or advisable; (d) Exponent will provide the Creditors Committee with a budget for its review of the environmental settlements. The administration of the budget will be the sole responsibility of the Creditors Committee, which also agrees to add the Department of Justice as a notice party with respect to Exponent's fee applications. The Debtors and parties-in-interest retain all rights to object to the payment of professional fees of Exponent for any unnecessary or unreasonable services rendered and for any other grounds allowed under the Bankruptcy Code and Bankruptcy Rules; and (e) The Creditors Committee retains all rights to apply to the Court to expand the scope of Exponent's engagement, including having Exponent testify at a hearing in connection with any environmental settlements, should the Creditors Committee deem it necessary or advisable to do so to protect the interests of unsecured creditors. ASARCO and the Creditors Committee previously agreed to extend to February 25, 2009, the deadline for any party to file an objection to the application. No objection was filed. As reported by the Troubled Company Reporter on February 11, 2009, the Committee sought permission to retain Exponent, nunc pro tunc to January 12, 2009. Exponent Inc. will advise the Creditors Committee on ASARCO LLC's potential liability for certain unsettled environmental claims and will assist the Committee to determine the reasonableness of any proposed settlement reached by ASARCO and claimant.As the Creditors Committee's environmental consultant, Exponent Inc. will: (a) estimate remediation costs, restoration costs, natural resources damages costs, and asset retirement obligations at certain sites for which ASARCO has alleged liability, including certain: * custodial trust sites; * miscellaneous state and federal sites; and * residual sites. (b) assist the Creditors Committee in negotiations with various parties; (c) render expert testimony as required by the Creditors Committee; (d) assist the Creditors Committee in conducting discovery, preparing expert testimony or reports, and evaluating reports and testimony by other experts and consultants; and (e) render other advisory services as may be requested by the Creditors Committee. Exponent Inc. will be paid for its services on an hourly basis, in accordance with the firm's normal billing practices: Position Hourly Charge -------- ------------- Principal/Officer $260 - $600 Senior Manager $225 - $425 Manager $175 - $350 Senior Engineer/Scientist/Associate $140 - $250 Engineer/Scientist/Associate $100 - $205 Associate Technical/Research Specialist $80 - $195 Technical Assistant $60 - $125 Administrative/Non-technical Assistant $60 - $130 Dr. Mark W. Johns will be principally responsible for the consulting services to be provided by Exponent Inc. for the Committee's benefit. Dr. Johns is a principal scientist and his hourly rate is $300. Other members of Exponent Inc. that will assist Dr. Johns may include, among others, (i) Scott Shock, a managing engineer with an hourly rate of $195, and (ii) Mark Bryant, a managing engineer with an hourly rate of $205. In addition, Exponent Inc. will submit for reimbursement, all of its reasonable out-of-pocket expenses incurred in connection with its retention. Dr. Johns assures the Court that Exponent Inc. does not have or represent any interest materially adverse to the Debtors' or their bankruptcy estates, creditors, or interest holders; and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). The Debtors submitted to the Court a joint plan of reorganization and disclosure statement on July 31, 2008. The plan incorporates the sale of substantially all of the Debtors' assets to Sterlite Industries, Ltd., for US$2,600,000,000. Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, submitted a reorganization plan to retain its equity interest in ASARCO LLC, by offering full payment to ASARCO's creditors in connection with ASARCO's Chapter 11 case. AMC would provide up to US$2.7 billion in cash as well as a US$440 million guarantee to assure payment of all allowed creditor claims, including payment of liabilities relating to asbestos and environmental claims. AMC's plan is premised on the estimation of the approximate allowed amount of the claims against ASARCO. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Seeks to Terminate Wachovia Letter of Credit -------------------------------------------------------- ASARCO LLC seeks permission from Judge Richard S. Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas to terminate a letter of credit with Wachovia Bank, N.A., with respect to a site in Manchester, New Jersey. The site located in Manchester, New Jersey, previously owned by a ASARCO LLC's predecessor-in-interest from 1961 to 1986, mined minerals from dredged sand between 1973 and 1982. In October 1985, ASARCO and Heritage Minerals, Inc., entered into an agreement for the purchase of the Manchester Site and certain other assets from ASARCO. Heritage processed the tailings and continued operation of the Manchester plant until March 31, 1990. By February 6, 1990, ASARCO and Heritage entered into an agreement with respect to certain environmental issues at the Site, under which agreement Heritage agreed to conduct a clean-up of the Site and both parties agreed to allocate their liability with respect to clean-up costs by 1991. In 1993, Heritage, as operator, and Hovsons, Inc., as owner of the Site, executed an administrative consent order with the New Jersey Department of Environmental Protection to address contamination and environmental concerns at the Site. ASARCO subsequently signed a Consent Order pursuant to a June 1995 agreement with Heritage, which attempted to resolve some of their differences and allocate some of the costs with respect to contamination and environmental conditions at the Site. The 1995 Agreement differentiated costs at the Site between several categories, including one for shared costs. The Shared Costs refer to certain future costs of remediation, excluding certain costs related to "mining materials" that ASARCO and Heritage agreed to share. Under the 1995 Agreement, both ASARCO and Heritage were required to post a letter of credit for the purpose of guaranteeing to the other party its payment of its share of the Shared Costs. The 1995 Agreement further provided that if a party failed to renew the letter of credit, the other party could draw upon it and use the proceeds to pay for the Shared Costs. In this light, Wachovia Bank issued an Irrevocable Letter of Credit No. S811505, dated February 14, 2000, for $1,000,000 in favor of ASARCO as beneficiary. The LOC is set to expire July 21, 2009. Heritage has continued to renew the Letter of Credit up until the present. As part of its reorganization case, ASARCO reached an agreement with both Heritage and Hovsons, including NJDEP, regarding the Manchester Site. The Manchester Site Settlement Agreement appears to resolve all remaining claims against ASARCO at the Site, except for the LOC. Jack L. Kinzie, Esq., at Baker Botts L.L.P., in Dallas, Texas, avers that ASARCO does not have any outstanding costs owed to it by Heritage at the Site that would have been secured by the LOC. The Letter of Credit is no longer needed because all remaining claims against ASARCO at the Site, as well as the 1995 LOC Agreement, were resolved in the Manchester Settlement Agreement, Mr. Kinzie asserts. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). The Debtors submitted to the Court a joint plan of reorganization and disclosure statement on July 31, 2008. The plan incorporates the sale of substantially all of the Debtors' assets to Sterlite Industries, Ltd., for US$2,600,000,000. Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, submitted a reorganization plan to retain its equity interest in ASARCO LLC, by offering full payment to ASARCO's creditors in connection with ASARCO's Chapter 11 case. AMC would provide up to US$2.7 billion in cash as well as a US$440 million guarantee to assure payment of all allowed creditor claims, including payment of liabilities relating to asbestos and environmental claims. AMC's plan is premised on the estimation of the approximate allowed amount of the claims against ASARCO. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ATP OIL: Bank Debt Gains in Secondary Market Trading ---------------------------------------------------- Participations in a syndicated loan under which ATP Oil & Gas Corp. is a borrower traded in the secondary market at 54.50 cents- on-the-dollar during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 3.57 percentage points from the previous week, the Journal relates. The loan matures on December 30, 2013. ATP Oil pays 475 basis points above LIBOR to borrow under the facility. The bank debt is not rated. As reported by the Troubled Company Reporter, ATP Oil & Gas bank debt traded at 50.33 cents-on-the-dollar during the week ended February 20, 2009, a drop of 2.17 percentage points from the previous week. ATP Oil & Gas bank debt traded in the secondary market at 52.50 cents-on-the-dollar during the week ended February 13, 2009, representing a drop of 3.07 percentage points from the previous week. The bank loan traded at 56.25 cents-on-the-dollar during the week ended January 2, 2009, representing a drop of 2.08 percentage points from the previous week. ATP Oil & Gas Corp. -- http://www.atpog.com/-- is an international offshore oil and gas development and production company with operations in the Gulf of Mexico and the North Sea. The company trades publicly as "ATPG" on the NASDAQ Global Select Market. AZTECA MOBILE: Files for Chapter 7 Bankruptcy, Owes $22.3 Million ----------------------------------------------------------------- Kansas City Business Journal reports that Azteca Mobile LLC has filed for Chapter 7 bankruptcy. Business Journal relates that Azteca Mobile listed $1.9 million in assets and $22.3 million in liabilities. The company has almost 80 creditors, says the report. The company, according to the report, owes: -- more than $17 million to Azteca Movil SA de CV, -- almost $600,000 to Sprint Nextel Corp., -- $749,369 to Telcordia Technologies, -- $973,260 to Corporacion RBS SA de CV, and -- $2.33 million to Grupo Iusacell Celular SA de CV. Business Journal states that Azteca Mobile listed gross income of $1.62 million in 2008 and $1.03 million in 2007. The company has gross income of $247,035 so far this year, Business Journal says. According to Business Journal, Azteca Mobile appears had been selling its assets to pay its bills. Azteca Mobile, says Business Journal, sold its nearly 4,600-member subscriber base to Cozac Wireless for $91,900 in January 20, 2009. The next day, Azteca Mobile sold its trademarks and intellectual property in exchange for release of $564,405 in liability to Azteca Movil, and sold 6,591 handsets to Ready Wireless LLC for $99,788, Business Journal states. After the sales, Azteca Mobile made payments to creditors, including almost $1 million to Sprint Nextel in February, Business Journal reports. Azteca Mobile, court documents say, listed no secured creditors and said unsecured creditors would likely get nothing. Its CEO Daniel Dow's employment was terminated on January 31, according to Business Journal. Business Journal states that Azteca Mobile has an office lease at Corporate Woods that runs through November 1, 2009, at $5,827 a month. Overland Park-based Azteca Mobile LLC is owned by Adrian Steckel, CEO of Azteca America, the subsidiary of Mexican broadcaster TV Azteca SA de CV. Azteca Mobile targeted Hispanic customers with specific products for communicating between the United States and Mexico. BANK OF NEW YORK: Moody's Upgrades Rating on Class B Bond to 'B3' ----------------------------------------------------------------- Moody's Investors Service upgraded the global foreign currency rating of the Class B bonds to B3 from Caa1. This upgrade follows the upgrade of the government of Belize's foreign and local currency bond ratings to B3 from Caa1. The methodology used to rate the Class B bonds is to base the rating directly on the guarantee provided by the government of Belize (rated B3) and the support from the Development Finance Corporation. The government of Belize unconditionally and irrevocably guarantees the timely payment of principal and interest on the bonds. Other methodologies and factors that may have been considered in the process of rating these transactions can also be found at www.moodys.com on the Rating Methodology & Performance page. Moody's last rating action on the notes was on March 5, 2007, when Class B notes were upgraded to Caa1 from Caa3. Rating Action The complete rating action is: Issuer: The Bank of New York acting solely in its capacity as trustee. -- Class B notes upgraded to B3 (Global Scale, Foreign Currency) from Caa1 (Global Scale, Foreign Currency); previously on March 5, 2007 upgraded to Caa1 (Global Scale, Foreign Currency) from Caa3 (Global Scale, Foreign Currency). BARNEY'S NEW YORK: S&P Gives Neg. Outlook; Affirms 'B-' Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook on New York City-based Barney's New York Inc. to negative from stable. At the same time, S&P affirmed all other ratings on the company, including the 'B-' corporate credit rating. The outlook revision reflects S&P's expectations for increasing performance challenges for the company over the near term due to the deteriorating retail environment, particularly for upscale apparel. "After an extremely difficult 2008, S&P anticipates that operations will remain challenged over the near term, which is in line with S&P's expectations for other upscale department stores," said Standard & Poor's credit analyst David Kuntz. S&P expects revenues to decline over the next few quarters due to negative same-store sales, and S&P anticipates that margins are likely to be pressured by increased promotional activity and negative operating leverage. BARZEL INDUSTRIES: S&P Puts 'B' on Neg. Watch Due to Weak Market ---------------------------------------------------------------- Standard & Poor's Ratings Services said it placed its ratings on Norwood, Massachusetts-based Barzel Industries Inc. (formerly Novamerican Steel Inc.), including the 'B' long-term corporate credit and 'B-' secured debt ratings, on CreditWatch with negative implications. "We base the CreditWatch placement on our opinion that steel service center Barzel's operating performance is weakening along with the sharp deterioration in steel market conditions in North America," said Standard & Poor's credit analyst Donald Marleau. "Furthermore, the continuation of poor profitability and cash flow in first-half 2009 could pressure what S&P view as the company's adequate liquidity," Mr. Marleau added. A rapid reduction in steel prices and shipments, combined with the flow-through of high-cost inventory caused Barzel's operating profitability to decline sharply during the fourth quarter of 2008. S&P expects that market conditions will remain weak for the first half of 2009, at least, but believe that more stable steel prices and Barzel's shift to higher-value products and shorter lead times could improve earnings in the second half of 2009. Demand for steel has dropped significantly in North America, as slowing economic conditions have led to a contraction in manufacturing, particularly in the automotive sector. In response, Barzel has in the past year been reducing its sales to the troubled North American auto industry, and currently has minimal receivables exposure to the sector. Notwithstanding the sharp decline in operating profitability and heavy interest burden, Barzel reported US$41 million of free operating cash flow in fiscal 2008, mostly in the second half, as it liquidated high-cost inventory. As a result, liquidity is adequate for the ratings, with US$32.3 million of cash and availability under the company's asset-based revolving credit facility as of Jan. 30, 2009, supplemented by US$15.5 million in proceeds from the sale of certain Canadian assets effective Feb. 27, 2009. However, S&P believes that liquidity could deteriorate if profitability remains at current depressed levels through the first half of 2009, because Barzel's heavy interest burden would likely result in negative operating cash flow. Moreover, S&P believes that any combination of weak operating profitability, lower receivables and inventory, or increased borrowings under the revolver could cause the company to breach a 1x fixed-charge covenant that would come into effect if excess availability under the revolver (defined as eligible assets in the borrowing base minus amounts outstanding under the revolver) is less than US$20 million. Standard & Poor's expects to resolve the CreditWatch after assessing near-term steel demand, as S&P believes that steel throughput is the most significant driver of Barzel's profitability and liquidity. S&P could lower the ratings on Barzel if the company is unable to improve its profitability in first-half 2009 to a level that contributes to EBITDA interest coverage of above 1.3x on a last 12 month basis, which is a level S&P believes should ensure some free cash flow taking into account modest maintenance capital expenditures of US$6 million. In addition, the ratings on Barzel would be under pressure if the company risks breaching the covenant under its revolver, which S&P believes would have a serious effect on its liquidity after first-quarter 2009, potentially jeopardizing the US$18.1 million May 2009 interest payment on its US$315 million notes. BEARINGPOINT INC: Sec. 341(a) Meeting of Creditors on March 24 -------------------------------------------------------------- The first meeting of creditors in Bearingpoint, Inc., and its debtor-affiliates' bankruptcy cases will be held on March 24, 2009, at 2:00 p.m., at 80 Broad Street, Fourth Floor, New York, New York, 10004. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtors under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About BearingPoint Inc. BearingPoint, Inc. -- http://www.BearingPoint.com-- is one of the world's largest providers of management and technology consulting services to Global 2000 companies and government organizations in more than 60 countries worldwide. Based in McLean, Viginia, BearingPoint -- a former consulting arm of KPMG LLP -- has approximately 15,000 employees focusing on the Public Services, Commercial Services and Financial Services industries. BearingPoint professionals have built a reputation for knowing what it takes to help clients achieve their goals, and working closely with them to get the job done. The Company's service offerings are designed to help clients generate revenue, increase cost-effectiveness, manage regulatory compliance, integrate information and transition to "next-generation" technology. BearingPoint, Inc., fka KPMG Consulting, Inc., together with its units, filed for Chapter 11 on February 18, 2009 (Bankr. S.D. N.Y., Case No. 09-10691). Alfredo R. Perez, Esq. at Weil Gotshal & Manges LLP, has been tapped as counsel. Greenhill & Co., LLC, and AP Services LLC, have also been tapped as advisors. Davis Polk & Wardell is special corporate counsel. BearingPoint disclosed total assets of $1,762,689,000, and debts of $2,231,839,000 as of Sept. 30, 2008. Contemporaneous with their bankruptcy petitions, the Debtors filed a pre-packaged Joint Plan of Reorganization under Chapter to implement the terms of their agreement with the secured lenders. Under the Plan, the Debtors propose to exchange general unsecured claims for equity in the reorganized company. Existing shareholders are out of the money. The Plan and the explanatory disclosure statement remain subject to approval by the Bankruptcy Court. BEARINGPOINT INC: Proposes Weil Gotshal Lead Bankruptcy Counsel --------------------------------------------------------------- BearingPoint, Inc., and its affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Weil, Gotshal & Manges LLP as counsel. Weil Gotshal will: a. prepare on behalf of the Debtors, as debtors in possession, all necessary or appropriate motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtors' estates; b. to take all necessary or appropriate actions in connection with a plan or plans of reorganization and related disclosure statement and all related documents, and such further actions as may be required in connection with the administration of the Debtors' estates; c. take all necessary actions to protect and preserve the estates of the Debtors, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors' estates; and d. perform all other necessary legal services in connection with the prosecution of these chapter 11 cases. Alfredo R. Perez, member of the firm of Weil Gotshal, tells the Court that firm's customary hourly rates, subject to change from time to time, are: Members and Counsel $650 to $995 Associates $355 to $640 Paraprofessionals $155 to $310 Mr. Perez adds that prior to the petition date, Weil Gotshal received advances in the aggregate amount of $4,130,469 on account of services and expenses in connection therewith. As of the petition date, the fees and expenses incurred by the firm was $3,394,647. The precise amount will be determined upon the final recording of all time and expense charges. As of the petition date, the firm has a remaining credit balance of approximately $735,821 for additional professional services and expenses in connection with these Chapter 11 cases. After application of amounts for payment of any additional prepetition professional services and related expenses, the excess advance amounts will be held by Weil Gotshal as a retainer. Mr. Perez assures the Court that Weil Gotshal is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Perez can be reached at: Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153 Tel: +1 212 310 8000 Fax: +1 212 310 8007 About BearingPoint Inc. BearingPoint, Inc. -- http://www.BearingPoint.com-- is currently one of the world's largest providers of management and technology consulting services to Global 2000 companies and government organizations in more than 60 countries worldwide. Based in McLean, Va., BearingPoint -- a former consulting arm of KPMG LLP -- has approximately 15,000 employees focusing on the Public Services, Commercial Services and Financial Services industries. BearingPoint professionals have built a reputation for knowing what it takes to help clients achieve their goals, and working closely with them to get the job done. The Company's service offerings are designed to help clients generate revenue, increase cost-effectiveness, manage regulatory compliance, integrate information and transition to "next-generation" technology. BearingPoint, Inc. fka KPMG Consulting, Inc., together with its units, filed for Chapter 11 on February 18, 2009 (Bankr. S.D. N.Y., Case No. 09-10691). Alfredo R. Perez, Esq. at Weil Gotshal & Manges LLP, has been tapped as counsel. Greenhill & Co., LLC, and AP Services LLC, have also been tapped as advisors. Davis Polk & Wardell is special corporate counsel. BearingPoint disclosed total assets of $1,762,689,000, and debts of $2,231,839,000 as of Sept. 30, 2008. Contemporaneous with their bankruptcy petitions, the Debtors filed a pre-packaged Joint Plan of Reorganization under Chapter to implement the terms of their agreement with the secured lenders. Under the Plan, the Debtors propose to exchange general unsecured claims for equity in the reorganized company. Existing shareholders are out of the money. The Plan and the explanatory disclosure statement remain subject to approval by the Bankruptcy Court. BEARINGPOINT INC: Endorses Greenhill & Co as Financial Advisor -------------------------------------------------------------- BearingPoint, Inc., and its affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Greenhill & Co., LLC, as financial advisor and investment banker. Greenhill & Co. will: a. review the business, assets and operations of BearingPoint, Inc. and its historical and projected financial condition; b. assist the board of directors in assessing the Debtors' current and potential future equity value; c. review the strategic and capital needs of the Debtors, analyzing the alternatives for raising capital, refinancing or restructuring existing indebtedness and assisting the Debtors in designing and implementing an appropriate capital structure; d. evaluate and recommend financial and strategic alternatives with respect to a proposed (i) merger or sale of the Company as a whole; (ii) acquisition of a majority of the stock of the Debtors; (iii) reorganization, recapitalization or debt restructuring, tender or exchange offer; (iv) a sale of all or substantially all of the assets of the Debtors; or (v) the sale by the Debtors of any of its five principal business unites (EMEA, Asia Pacific, Public Services, Commercial Services, and Financial Services) or a majority of the assets of any the principal business unit including a debt refinancing or restructuring strategy for the Debtors' various series of subordinated debt, including its 5% convertible senior subordinated debentures due 2025; e. identify and contact selected qualified partners to a proposed Transaction that are approved in advance by the Debtors; f. advise the Board as to the timing, structure and pricing of a proposed Transaction; g. assist the Debtors in marketing, selling, negotiating and consummating a proposed Transaction; h. provide assistance to the Board regarding investor relation matters; and i. provide the other financial advisory and investment banking services as are customary for similar transactions and as may be mutually agreed upon by the board and Greenhill. Bradley A. Robins, managing director of Greenhill, tells the Court that the firm will receive: a. a retainer fee of $1,000,000 per quarter, payable in cash quarterly during the term of the Greenhill Agreement with the first payment due promptly after the date of the Greenhill Agreement, the second payment due on Jan. 1, 2009, and the remaining payments due on a quarterly basis thereafter for the remainder of the term of the Greenhill Agreement. One half of the Retainer Fees, to the extent paid, will be credited against any Transaction Fee if payable to Greenhill under the Greenhill Agreement. b. a transaction fee equal to $9 million, will be payable in cash if, during the term of the Greenhill Agreement or, if the Greenhill Agreement is terminated prior to the end of its stated term or expires other than if the Greenhill Agreement is terminated by Greenhill, within 12 months of the termination or expiration, a Transaction is consummated or a definitive agreement is entered into that subsequently results in a Transaction. c. reimbursement for travel and other out-of-pocket expenses incurred by Greenhill in performing its services hereunder, including the reasonable fees and expenses of legal counsel. Mr. Robins assures the Court that Greenhill is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About BearingPoint Inc. BearingPoint, Inc. -- http://www.BearingPoint.com-- is currently one of the world's largest providers of management and technology consulting services to Global 2000 companies and government organizations in more than 60 countries worldwide. Based in McLean, Va., BearingPoint -- a former consulting arm of KPMG LLP -- has approximately 15,000 employees focusing on the Public Services, Commercial Services and Financial Services industries. BearingPoint professionals have built a reputation for knowing what it takes to help clients achieve their goals, and working closely with them to get the job done. The Company's service offerings are designed to help clients generate revenue, increase cost-effectiveness, manage regulatory compliance, integrate information and transition to "next-generation" technology. BearingPoint, Inc. fka KPMG Consulting, Inc., together with its units, filed for Chapter 11 on February 18, 2009 (Bankr. S.D. N.Y., Case No. 09-10691). Alfredo R. Perez, Esq. at Weil Gotshal & Manges LLP, has been tapped as counsel. Greenhill & Co., LLC, and AP Services LLC, have also been tapped as advisors. Davis Polk & Wardell is special corporate counsel. BearingPoint disclosed total assets of $1,762,689,000, and debts of $2,231,839,000 as of Sept. 30, 2008. Contemporaneous with their bankruptcy petitions, the Debtors filed a pre-packaged Joint Plan of Reorganization under Chapter to implement the terms of their agreement with the secured lenders. Under the Plan, the Debtors propose to exchange general unsecured claims for equity in the reorganized company. Existing shareholders are out of the money. The Plan and the explanatory disclosure statement remain subject to approval by the Bankruptcy Court. BEARINGPOINT INC: Taps Fragomen Del Rey as Immigration Counsel -------------------------------------------------------------- BearingPoint, Inc., and its affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Fragomen, Del Rey, Bernsen & Loewy, LLP as special immigration counsel. Fragomen will provide advice and assistance on immigration matters including filing petitions and applications with the U.S. government and worldwide jurisdictions for temporary work visas and permanent residency for the Debtors' employees and their dependents. Fragomen will not act as bankruptcy counsel for the Debtors or represent the Debtors in the administration of these Chapter 11 cases. The Debtors do not anticipate any duplication of the services to be rendered by Fragomen and the services of the Debtors' bankruptcy counsel, Weil, Gotshal & Manges LLP, or any of the Debtors' other retained professionals in their bankruptcy cases. Hany Brollesy, a lawyer at Fragomen, tells the Court that the hourly rates of the firm's professionals are: Partner $350 - $450 Associate $200 - $300 The Debtors propose to continue to fund the attorney trust account to allow Fragomen to disburse certain government filings fees on behalf of the Debtors. In 2005, Fragomen established an attorney trust account in order to provide a mechanism by which Fragomen could expedite payment of all government fees because employment- based immigration petitions and applications require significant government filing fees. The Debtors fund the Trust Account that a minimum balance of $100,000 is maintained. There is approximately $63,000 in the Trust Account. Mr. Brollesy assures the Court that Fragomen is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Brollesy can be reached at: Fragomen, Del Rey, Bernsen & Loewy, LLP 7 Hanover Square New York, NY 10004-2756 Tel: +1 212 688 8555 Fax: +1 212 480 9930s About BearingPoint Inc. BearingPoint, Inc. -- http://www.BearingPoint.com-- is currently one of the world's largest providers of management and technology consulting services to Global 2000 companies and government organizations in more than 60 countries worldwide. Based in McLean, Va., BearingPoint -- a former consulting arm of KPMG LLP -- has approximately 15,000 employees focusing on the Public Services, Commercial Services and Financial Services industries. BearingPoint professionals have built a reputation for knowing what it takes to help clients achieve their goals, and working closely with them to get the job done. The Company's service offerings are designed to help clients generate revenue, increase cost-effectiveness, manage regulatory compliance, integrate information and transition to "next-generation" technology. BearingPoint, Inc. fka KPMG Consulting, Inc., together with its units, filed for Chapter 11 on February 18, 2009 (Bankr. S.D. N.Y., Case No. 09-10691). Alfredo R. Perez, Esq. at Weil Gotshal & Manges LLP, has been tapped as counsel. Greenhill & Co., LLC, and AP Services LLC, have also been tapped as advisors. Davis Polk & Wardell is special corporate counsel. BearingPoint disclosed total assets of $1,762,689,000, and debts of $2,231,839,000 as of Sept. 30, 2008. Contemporaneous with their bankruptcy petitions, the Debtors filed a pre-packaged Joint Plan of Reorganization under Chapter to implement the terms of their agreement with the secured lenders. Under the Plan, the Debtors propose to exchange general unsecured claims for equity in the reorganized company. Existing shareholders are out of the money. The Plan and the explanatory disclosure statement remain subject to approval by the Bankruptcy Court. BEARINGPOINT INC: Wants Sheppard Mullin as Special Counsel ---------------------------------------------------------- BearingPoint, Inc., and its affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Sheppard Mullin Richter & Hampton, LLP, as special counsel. Sheppard Mullin will provide on-going advice and representation in connection with the Debtors' government contracts business, including various regulatory and compliance matters, and certain on-going litigation, investigation and administrative proceedings related thereto. The Debtors propose to continue the employment of Jonathan S. Aronie, Esq., and the other legal professionals of Sheppard Mullin for the duration of the Debtors' bankruptcy cases and as needed while the Debtors' bankruptcy cases are pending before the Court. The continued retention of Sheppard Mullin will maintain continuity in the representation of the Debtors in existing litigation matters and pending administrative proceedings, and will ensure the Debtors' continued compliance with the applicable rules and regulations affecting the conduct of the Debtors' substantial government contracts business. The Debtors relates that Sheppard Mullin will not act as bankruptcy counsel for the Debtors or represent the Debtors in the administration of their chapter 11 cases. The Debtors do not anticipate any duplication of the services to be rendered to them by Sheppard Mullin and the services rendered and to be rendered to the Debtors by the Debtors' bankruptcy counsel, Weil, Gotshal & Manges LLP, or any of the Debtors' other retained professionals in these bankruptcy cases. Mr. Aronie, a member of Sheppard Mullin, tells the Court that the hourly rates for the work being performed for the Debtors by the firm is presented on a by-matter basis, for each matter open and active as of their Chapter 11 petition date: For the Court of Federal Claims Action Jonathan S. Aronie $529 Christopher M. Loveland $418 Louis D. Victorino $529 Marko W. Kipa $381 Jessica S. Mailman $381 Aleksander Lamvol $450 Daniel J. Marcinak $354 David F. Geneson $676 Sarah C. Lewis $239 Paul F. Giangiordano $202 For the Investigations Jonathan S. Aronie $520 Christopher E. Hale $377 Marko W. Kipa $381 All Other Matters Jonathan S. Aronie $529 Louis D. Victorino $529 Anne Perry $575 Keith Szeliga $441 Marko W. Kipa $381 Jessica S. Mailman $381 Daniel J. Marcinak $354 Mr. Aronie assures the Court that Sheppard Mullin is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Aronie can be reached at: Sheppard Mullin Richter & Hampton, LLP 1300 I Street, N.W., 11th Floor East Washington, DC 20005 Tel: (202) 218-0000 Fax: (202) 218-0020 About BearingPoint Inc. BearingPoint, Inc. -- http://www.BearingPoint.com-- is one of the world's largest providers of management and technology consulting services to Global 2000 companies and government organizations in more than 60 countries worldwide. Based in McLean, Viginia, BearingPoint -- a former consulting arm of KPMG LLP -- has approximately 15,000 employees focusing on the Public Services, Commercial Services and Financial Services industries. BearingPoint professionals have built a reputation for knowing what it takes to help clients achieve their goals, and working closely with them to get the job done. The Company's service offerings are designed to help clients generate revenue, increase cost-effectiveness, manage regulatory compliance, integrate information and transition to "next-generation" technology. BearingPoint, Inc. fka KPMG Consulting, Inc., together with its units, filed for Chapter 11 on February 18, 2009 (Bankr. S.D. N.Y., Case No. 09-10691). Alfredo R. Perez, Esq. at Weil Gotshal & Manges LLP, has been tapped as counsel. Greenhill & Co., LLC, and AP Services LLC, have also been tapped as advisors. Davis Polk & Wardell is special corporate counsel. BearingPoint disclosed total assets of $1,762,689,000, and debts of $2,231,839,000 as of Sept. 30, 2008. Contemporaneous with their bankruptcy petitions, the Debtors filed a pre-packaged Joint Plan of Reorganization under Chapter to implement the terms of their agreement with the secured lenders. Under the Plan, the Debtors propose to exchange general unsecured claims for equity in the reorganized company. Existing shareholders are out of the money. The Plan and the explanatory disclosure statement remain subject to approval by the Bankruptcy Court. BERNARD L. MADOFF: Owner Waives Right to Jury Review on Charges --------------------------------------------------------------- Bernard Madoff has waived his right to have a grand jury review the accusations against him, Amir Efrati and Chad Bray at The Wall Street Journal report, citing people involved in the case. "We've waived indictment and the case will proceed by information," WSJ quoted Daniel Horwitz, the attorney for Mr. Madoff, as saying. A trial is unlikely in cases where prosecutors don't seek a grand- jury indictment, WSJ says, citing criminal defense experts, because the grand-jury process functions as a kind of practice run that let prosecutors uncover more evidence to build their cases. According to the report, criminal defense attorney Charles A. Ross said, "I think that it's virtually impossible that a U.S. attorney from the Southern District of New York has agreed to file an information and will allow Mr. Madoff to go to trial on that. If there's going to be a trial in this case, they would file an indictment." WSJ, citing people familiar with the matter, relates that prosecutors would file additional charges against Mr. Madoff this week in connection with an alleged Ponzi scheme. According to WSJ, the sources said that Mr. Madoff appeared to be moving closer to a guilty plea. WSJ states that Mr. Madoff could plead guilty at an arraignment hearing on Thursday, or he could deny the charges at that time and seek a jury trial. Citing a person familiar with the matter, WSJ states that if Mr. Madoff pleads guilty, it wouldn't be part of a plea agreement under which he would face lesser charges or get a recommendation for lenient treatment from the U.S. attorney's office. Lawyers say that white-collar criminals often plead guilty with no deal in place, WSJ notes. According to the report, criminal defense lawyer and former prosecutor Christopher Clark said that in cases where a defendant won't cooperate against other individuals, and the government will only do a plea deal in which it recommends a long sentence, "you might as well take your chances with the judge." Citing lawyers, WSJ states that defendants, by pleading guilty, can argue that they've saved the government time and resources, making judges give them some leniency. Under the federal sentencing guidelines, Mr. Madoff could face 30 years to life in prison. 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 allegedly 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. BETHANY GROUP: Affiliates File for Chapter 11 Bankruptcy -------------------------------------------------------- Mark Mueller at Orange County Business Journal reports that Bethany Group affiliates have filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Central District of California. According to Business Journal, the bankruptcy filings are for several thousand apartments in three portfolios of properties in Maryland and Texas. Business Journal says that Bethany Group has a total of seven portfolios of apartments, totaling an estimated 15,000 apartments, but the other four portfolios aren't included in the bankruptcy filing. Bethany Group's lawyers said that secured debt on the three portfolios totals about $400 million, the report states. Citing the lawyers, the report says that Bethany Group's properties in Arizona, where some of the company's biggest holdings are, have not filed for bankruptcy protection. Reports in Maryland and Arizona say that Bethany Group workers weren't being paid, that there were mass layoffs at the firm, and that utilities for complexes were being turned off. The reports also mentioned tenant confusion. Bethany Group's lawyers, Business Journal reports, claimed that lenders had been cutting off the company from money needed to pay expenses. The Bethany Group -- http://www.thebethanygroup.ca/-- is a faith- based organization that operates a wide range of homes and services for older, disabled and vulnerable people, with varying levels of health care and hospitality services. The range of services offered by the organization include: continuing care, Rosehaven Provincial Program, designated assisted living, seniors supportive living, seniors lodges, seniors apartments, and a variety of housing programs for affordable family housing. BH S&B: Court Sets March 30 Deadline for Filing Proofs of Claim --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has set March 30, 2009, at 5:00 p.m. Prevailing Eastern Time, as the deadline for each person or entity to file proofs of claim in BH S&B Holdings LLC, and its debtor-affiliates' bankruptcy cases. Governmental units are given until May 18, 2009, at 5:00 p.m. Prevailing Eastern Time, to file proofs of claim in the Debtor's bankruptcy cases. Proofs of claim must be delivered so as to be received on or before the applicable Bar Date by the official noticing and claims agent in the Debtors' bankruptcy cases at this address: BH S&B Holdings Claims Processing Center c/o Kurtzman Carson Consultants LLC 2335 Alaska Avenue, Los Angeles, CA 90245 About BH S&B BH S&B Holdings LLC filed for bankruptcy protection together with seven other affiliates on Nov. 19, 2008 (Bankr. S.D. N.Y. Lead Case No. 08-14604). The seven debtor-affiliates are BH S&B Distribution LLC, BH S&B Lico LLC, BH S&B Retail LLC, BHY S&B Intermediate Holdco LLC, Cubicle Licensing LLC, Fashion Plate Licensing LLC, and Heritage Licensing LLC. BH S&B was formed by investment firms Bay Harbour Management and York Capital Management in August 2008 to acquire the business operations and assets of bankrupt retailer Steve & Barry's for $163 million in August 2008. Steve and Barry's, based in Port Washington, New York, was a specialty retailer of apparel and accessories, selling, among other things, university apparel and lifestyle brands, private-label casual clothing, and exclusive celebrity endorsed apparel. Steve & Barry's had 240 locations when it was bought and the new owners had planned to cut that down to 173 stores. BH S&B had intended to operate certain Steve & Barry's stores as going concerns and to liquidate inventory at other locations. Since the sale closing, however, for various reasons, including the general health of the American economy and the state of the retail market in particular, sales at all stores have been disappointing, and BH S&B's revenue has suffered. As a result, BH S&B was not in compliance with certain covenants under their senior secured credit facility and had no prospects for continued financing of their business as a going concern. In consultation with its lenders, BH S&B decided the appropriate course of action to maximize value for the benefit of all of its stakeholders was an orderly liquidation in Chapter 11. Bay Harbour Management is an SEC registered investment advisor with significant experience in purchasing distressed companies and effectuating their turnaround. The firm's holdings have included the retailer Barneys New York, the facilities based CLEC Telcove, and the former Aladdin Casino, now operating on the Las Vegas strip as the Planet Hollywood Resort and Casino following its rebranding and turnaround. York Capital Management is an SEC registered investment advisor with offices in New York, London, and Hong Kong with more than $15 billion in assets under management. York Capital was founded in 1991 and specializes in value oriented and event driven equity and credit investments. BH S&B is 100% owned by BHY S&B Intermediate Holdco LLC. BH S&B and its affiliates' chapter 11 cases are presided over by the Honorable Martin Glenn. Joel H. Levitin, Esq., and Richard A. Stieglitz, Jr., Esq., at Cahill Gordon & Reindel LLP, in New York, serve as bankruptcy counsel to BH S&B and its affiliates. RAS Management Advisors LLC acts as restructuring advisors, and Kurtzman Carson Consultants LLC as claims and notice agent. BLOCKBUSTER INC: Bank Debt Continues Slide; Sells at Near 35% Off ----------------------------------------------------------------- Participations in a syndicated loan under which Blockbuster Inc. is a borrower traded in the secondary market at 66.70 cents-on- the-dollar during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 2.50 percentage points from the previous week, the Journal relates. The loan matures on August 20, 2011. Blockbuster pays 375 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B1 rating and Standard & Poor's B rating. Syndicated loans of other retailers also trade at substantial discount in the secondary market during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. Participations in a syndicated loan under which Neiman Marcus Group Inc. is a borrower traded at 61.50 cents-on-the-dollar, a drop of 3.57 percentage points from the previous week. The loan matures on April 6, 2013. Neiman Marcus pays 175 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB rating. Participations in a syndicated loan under which Michaels Stores Inc. is a borrower traded at 54.08 cents-on-the-dollar, a drop of 2.28 percentage points from the previous week. The loan matures on October 31, 2013. Michaels Stores pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B2 rating and Standard & Poor's B rating. Yankee Candle bank debt trades at 61.80 cents-on-the-dollar, an increase of 1.63 percentage points from the previous week. The loan matures February 6, 2014. Yankee Candle pays 200 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB- rating. US Foodservice bank debt trades at 60.21 cents-on-the-dollar, a drop of 2.45 percentage points from the previous week. The loan matures July 3, 2014. US Foodservice pays 275 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B2 rating and Standard & Poor's N.R. rating. About Blockbuster Inc. Based in Dallas, Texas, Blockbuster Inc. is a leading global provider of in-home movie and game entertainment, with more than 7,500 stores throughout the Americas, Europe, Asia and Australia. The Company may be accessed worldwide at http://www.blockbuster.com/ * * * As reported by the Troubled Company Reporter on March 4, 2009, Blockbuster Inc. said it has no intention of filing for bankruptcy. The Company has hired the law firm of Kirkland & Ellis LLP to advise it with respect to its ongoing financing and capital raising initiatives. Blockbuster made a pitch to acquire Circuit City early last year, but withdrew the offer after completing due diligence. Circuit City has since filed for bankruptcy. The TCR said on March 6, 2009, that Standard & Poor's Ratings Services placed its ratings, including the 'B-' corporate credit rating, on Blockbuster on CreditWatch with negative implications. This action reflects S&P's concern regarding the company's ability to refinance the August 2009 maturity of its revolving credit and term loan A facilities. Fitch meanwhile expects Blockbuster will be able to repay the approximately $19 million outstanding on the term loan A and possibly renew its bank facility, although the terms will likely be more restrictive as Blockbuster is anticipated to report positive EBITDA and free cash flow generation for fiscal 2008. In the event the refinancing is not successful and Blockbuster's liquidity position is weakened, this will prompt Fitch to review the ratings on the company. BRODER BROS: Hiring of Financial Advisor Cues S&P's Junk Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its ratings, including the corporate credit rating, on Trevose, Pennsylvania-based Broder Bros. Co. to 'CCC' from 'B-'. The outlook is negative. The company had about $468 million of adjusted debt as of Sept. 30, 2008. The downgrade follows Broder's announcement that it hired a financial advisor to assist it in exploring financing and strategic alternatives, with respect to its long-term capital structure and S&P's belief that operating performance will continue to deteriorate over the near term, which will likely result in a further weakening of company credit measures. A significant proportion of Broder's customers participate in the highly cyclical and mature promotional products industry, which is highly vulnerable to the currently weak economy. As a result, S&P estimate that fiscal year ending Dec. 31, 2008, results will be much weaker than S&P had previously anticipated. The ratings on Broder reflect the company's highly leveraged financial profile, weakening liquidity position, vulnerability in a weak economy, and the highly competitive operating environment. The negative outlook reflects S&P's concerns that Broder may face challenges in reducing leverage and maintaining adequate liquidity under persistent difficult operating conditions. S&P believes that the company's already very high leverage and thin operating margins limit the company's financial flexibility. Given current weak economic conditions and declining sales volumes in the industry, S&P estimates that leverage for fiscal year ending Dec. 31, 2008, may approach the 13x area, assuming revenues are flat or decline slightly and EBITDA margins decline by 100 basis points. "Over the near term, if the company's operating results or credit protection measures weaken further, and/or if the company's liquidity position weakens, S&P may lower the ratings further," said Standard & Poor's credit analyst Bea Chiem. "A stable outlook is unlikely over the near term until Broder can stabilize performance and reduce leverage," she continued. S&P will review the ratings and discuss financial plans with management if the company revises its capital structure. CANWEST MEDIA: DBRS Junks Issuer and Debt Ratings ------------------------------------------------- Dominion Bond Rating Service has downgraded the Issuer Rating of Canwest Media Inc. to CCC from B (high) and its debt instrument ratings. At the same time, DBRS has downgraded Canwest Media's wholly owned subsidiary, Canwest Limited Partnership (Canwest LP). Canwest LP's Issuer Rating has been downgraded to CCC (high) from BB (low). The ratings have also been placed Under Review with Negative Implications pending the outcome of Canwest Media's negotiations with its banks regarding its secured credit facility. DBRS had originally placed Canwest Media and Canwest LP's ratings Under Review with Negative Implications on January 15, 2009. This followed the Company's Q1 F2009 results and outlook for F2009, stating that it may not be able to meet its financial leverage ratio covenants in F2009. As a result, DBRS was concerned that the Company's liquidity and financial risk profile could continue to be increasingly pressured. DBRS has downgraded its rating on Canwest Media's Secured Bank Debt to B from BB (high) and confirmed its recovery rating of RR1, indicating anticipated recovery prospects of 90% to 100%. DBRS has also downgraded the Company's Senior Subordinated Notes four notches to CCC (low) from B and confirmed its recovery rating of RR5, indicating anticipated recovery prospects of 10% to 30%. The downgrade of Canwest Media's Issuer Rating reflects two main factors. Firstly, DBRS believes that Canwest Media's financial flexibility is extremely limited as it is not currently in compliance with its bank covenants regarding its $300 million credit facility and negotiations with its banks remain ongoing, with recent waivers set to expire on February 27, 2009. Should the terms of this facility not be successfully renegotiated or some other solution be implemented in the near term to repay the nearly $100 million drawn under this facility, Canwest Media would be in a default position under this credit facility. Secondly, the pressure on the Company's underlying business remains significant given the dramatic economic pressure affecting the Canadian advertising market along with the ongoing structural changes in its conventional TV operations. Additionally, similar pressure is being felt at Canwest Media's subsidiaries, Canwest LP and TEN Network Holdings, which support Canwest Media's $1.1 billion of debt at this level with their distributions. DBRS expects distributions from both of these entities to decline in F2009 as a result of the pressure on their operations. While DBRS notes that Canwest Media has implemented some cost- cutting initiatives at its TV operations and at Canwest LP's newspaper operations and recently announced its plans to sell its second-tier conventional TV channels, these factors are not likely great enough to offset the Company's operating pressure and put Canwest Media onside with its debt covenants. DBRS notes that Canwest Media reset its debt covenants as part of its amended credit facility in November 2008. DBRS notes that any covenant headroom gained from these amendments has been completely eroded given that both economic conditions and the advertising market have weakened much faster than the Company had anticipated. DBRS has also downgraded the Issuer Rating of Canwest LP to CCC (high) from BB (low) and its Secured Bank Debt to B (low) from BB (high); the recovery rating of the Secured Bank Debt has been downgraded to RR3 from RR2, indicating anticipated recovery prospects of 50% to 70%. The lower recovery rating on is due to greater pressure expected on this business and a lower recovery multiple given lower multiples in the newspaper industry. DBRS has also downgraded Canwest LP's Senior Subordinated Notes to CCC (low) from B and confirmed its recovery rating at RR6 indicating anticipated recovery prospects of 0% to 10%. The downgrade of Canwest LP reflects the following: (1) the weakness in its newspaper operations that is pressuring its distributable cash flow; (2) high levels of debt at $1.5 billion, with modest financial flexibility; and (3) DBRS's view that a default at Canwest Media could ultimately indirectly affect Canwest LP. While the newspaper operations of Canwest LP tend to be highly cyclical, DBRS notes that the pace of the current pressure is significant (EBITDA down 29.1% in Q1 F2009). This was driven by a dramatic downturn in the Canadian economy and a significant slowdown in key advertising categories across the country such as automotive, retail and real estate. While Canwest LP has attempted to cut costs and continues to benefit from healthy online advertising growth, the benefit of these factors is not likely to keep pace with this pressure throughout F2009. As a result, both EBITDA and EBITDA margins are expected to be lower for Canwest LP in F2009. Additionally, DBRS is concerned that this operating pressure, coupled with high levels of debt, is likely to push Canwest LP closer to its financial covenants during F2009. Furthermore, the seasonal nature of the newspaper business could require additional borrowing throughout F2009. Finally, DBRS notes that while creditors at Canwest Media do not have recourse to the assets of the operating subsidiaries such as Canwest LP, a portion of its debt is secured by the shares of its operating companies. As such, should a restructuring occur at Canwest Media, this could indirectly affect Canwest LP as it could be part of an overall restructuring plan. DBRS notes that from a consolidated perspective Canwest Media has $4.1 billion of debt outstanding and gross debt-to-EBITDA for the 12 months ending November 30, 2008, of 7.08 times. As part of its review, DBRS expects to continue to monitor closely Canwest Media's negotiations with its banks and other means it takes to improve its liquidity and financial risk profile. At this stage, DBRS cannot rule out additional rating actions that could further lower the ratings of Canwest Media and Canwest LP. Rating actions: (1) Issuer: Canwest Media Inc. Issuer Rating UR-Neg. CCC -- (2) Issuer: Canwest Media Inc. Issuer Rating Downgraded CCC -- (3) Issuer: Canwest Media Inc. Secured Bank Debt UR-Neg. B -- RR1 (4) Issuer: Canwest Media Inc. Secured Bank Debt Downgraded B -- RR1 (5) Issuer: Canwest Media Inc. Senior Subordinated Notes UR-Neg. CCC (low) -- RR5 (6) Issuer: Canwest Media Inc. Senior Subordinated Notes Downgraded CCC (low) -- RR5 (7) Issuer: Canwest Limited Partnership Issuer Rating UR-Neg. CCC (high) -- (8) Issuer: Canwest Limited Partnership Issuer Rating Downgraded CCC (high) -- (9) Issuer: Canwest Limited Partnership Secured Bank Debt UR-Neg. B (low) -- RR3 (10) Issuer: Canwest Limited Partnership Secured Bank Debt Downgraded B (low) -- RR3 (11) Issuer: Canwest Limited Partnership Senior Subordinated Notes UR-Neg. CCC (low) -- RR6 (12) Issuer: Canwest Limited Partnership Senior Subordinated Notes Downgraded CCC (low) -- RR6 CAPMARK FINANCIAL: S&P Puts 'B+' Rating on Negative Watch --------------------------------------------------------- Standard & Poor's Ratings Services placed all of its servicer rankings affiliated with Capmark Financial Group on CreditWatch with negative implications. These CreditWatch placements follow the March 2, 2009, downgrade of Capmark Financial Group Inc., to 'B+' from 'BBB-' and the placement of the ratings on the company on CreditWatch negative. S&P has placed these Capmark-related servicer rankings on CreditWatch negative: -- In the U.S., S&P's STRONG commercial mortgage master servicer, primary servicer, and special servicer rankings on Capmark Finance Inc. -- In the U.K., S&P's STRONG commercial mortgage servicer ranking on CapmarkServices Ireland Ltd. and S&P's STRONG commercial mortgage special servicer ranking on Capmark Services U.K. Ltd. -- In Japan, S&P's ABOVE AVERAGE commercial mortgage master servicer and commercial mortgage primary servicer rankings on Premier Asset Management Co. -- In Canada, S&P's ABOVE AVERAGE commercial mortgage primary servicer ranking on Capmark Canada Ltd. All of the affected Capmark-related servicing entities remain on Standard & Poor's Select Servicer List, which looks at a number of factors, including maintaining a sufficient financial position. The current 'B+' corporate credit rating for Capmark Financial Group meets S&P's criteria for a sufficient financial position. In light of the corporate downgrade, however, S&P is monitoring each servicing entity's operational performance and ongoing ability to meet its respective advancing, reporting, and portfolio management duties. As part of S&P's ongoing servicing surveillance efforts, S&P maintain regular dialog with Standard & Poor's U.S. CMBS Surveillance group, as Capmark has a sizeable presence in the U.S. CMBS market. Specifically, Capmark serves as master or lead servicer on 112 Standard & Poor's rated CMBS deals with an aggregate pool balance of $123.2 billion. The company is also the named special servicer on 76 Standard & Poor's rated CMBS deals, 55 of which Capmark also serves as the master or lead servicer. The aggregate pool balance of the Standard & Poor's rated deals where Capmark is the named special servicer is $49.5 billion. The placement of the servicer rankings assigned to Capmark on CreditWatch negative will not at this time prompt actions on the Standard & Poor's rated CMBS deals. S&P will comment on the situation or take further action as warranted. In an unrelated action requested by Capmark, Standard & Poor's is withdrawing its AVERAGE commercial mortgage special servicer ranking on Capmark Canada Ltd., given that Capmark no longer has any CMBS special servicing assignments in Canada. As of Dec. 31, 2008, Capmark Finance Inc.'s total U.S. ommercial mortgage servicing portfolio comprised 34,032 loans with an unpaid principal balance of $250.2 billion. The company's total rated CMBS serviced portfolio in the U.S. comprised 17,557 loans totaling $134.3 billion across 481 deals. The company was the named special servicer on 116 rated CMBS deals covering 9,124 loans with an UPB of $48.4 billion. It was also the named special servicer on two rated CRE CDO transactions covering 54 loans with an UPB of $814 million. The company's active special servicing portfolio comprised 165 loans and 56 real estate owned properties with a balance of $1.56 billion (the specially serviced CMBS component was $1.15 billion covering 150 loans and 49 real estate owned properties). Inclusive of the U.K. and Japan, the global servicing portfolio for all Capmark entities comprised 49,729 loans with an unpaid principal balance of $362.1 billion of Dec. 31, 2008. CARLOS JUSTO: Files for Personal Bankruptcy in Florida ------------------------------------------------------ Oscar Pedro Musibay at South Florida Business Journal reports that Carlos Justo has filed for personal bankruptcy in the U.S. Bankruptcy Court for the Southern District of Florida. Court documents say that Mr. Justo has almost $700,000 in assets. Business Journal relates that Mr. Justo listed more than $20 million in debts. Business Journal states that Mr. Justo owes about: -- $6.45 million in back taxes from 2002 to 2005 to the Internal Revenue Service; -- $4 million to Gibraltar Private Bank; -- almost $2 million to City National Bank; -- more than $1 million to Great Florida Bank; -- almost $130,000 to the Fisher Island Club; and -- almost $3,800 to the Imperial at Brickell condo association. According to court documents, Mr. Justo's financial resources have been decreasing. Business Journal says that Mr. Justo's gross commission dropped to$713,298 in 2008, from $1.1 million in 2007. Mr. Justo, Business Journal relates, made $35,400 on commissions in the first 45 days of this year. Business Journal reports that Mr. Justo said that he expects to rebound by returning to sales and leaving real estate investing to others. Carlos Justo is a celebrity mansion broker. CC MEDIA: S&P Affirms 'B-' Long-Term Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services said it affirmed its 'B-' long- term corporate credit rating on San Antonio, Texas-based CC Media Holdings Inc. (which S&P analyzes on a consolidated basis with its operating subsidiary, Clear Channel Communications Inc.). The outlook is negative. S&P removed the ratings from CreditWatch, where they had been placed with negative implications on Feb. 13, 2009, due to S&P's expectation of weak operating performance and concerns regarding the company's ability to remain in compliance with financial covenants in 2009. "After anemic fourth-quarter 2008 results, S&P remain concerned about potential covenant violations in the fourth quarter of 2009 if EBITDA continues to decline at similar rates," said Standard & Poor's credit analyst Michael Altberg, "and cash balances are reduced due to discretionary cash flow deficits." As a result of extensive add-backs in the credit agreement covenant definitions, S&P estimate that the company could avoid a covenant breach in 2009 if EBITDA declines moderate in the second half of the year. CENGAGE LEARNING: Moody's Cuts Rating on $1.22 Bil. Notes to Caa2 ----------------------------------------------------------------- Moody's Investors Service lowered the rating of Cengage Learning Acquisitions, Inc.'s $1.22 billion 10.5% senior unsecured notes to Caa2 from Caa1. The downgrade reflects the reduced loss absorption cushion beneath the bonds driven by open market repurchases of Cengage Learning's 13.25% senior subordinate notes and the 13.75% senior unsecured PIK notes issued by Cengage Learning Holdco, Inc. LGD assessments were also updated to reflect the current debt mix. CL Holdco's B3 Corporate Family Rating, B3 Probability of Default rating and SGL-3 speculative grade liquidity rating are not affected and the rating outlook remains stable. Moody's has taken these rating actions: Downgrades: Issuer: Cengage Learning Acquisitions, Inc. -- 10.5% Senior Unsecured Notes, Downgraded to Caa2, LGD5 - 79% from Caa1, LGD5 -- 77% Loss Given Default Updates -- Senior Secured Bank Credit Facility, Changed to LGD3 - 31% from LGD2 -- 28% (B1 rating unchanged) Cengage Learning's B3 Corporate Family Rating reflects its relatively stable revenue and good cash flow generated from a strong market position and broad product offerings in higher education publishing, constrained by the very high leverage (debt- to-EBITDA is approximately 11.3x LTM 12/31/08 incorporating Moody's standard adjustments) following the July 2007 leveraged buy-out from The Thomson Corporation. The company's SGL-3 speculative grade liquidity rating indicates adequate liquidity through the first quarter of calendar 2010. Moody's believes the company has sufficient cash ($245 million at 12/31/08) and projected free cash flow of $100-$130 million (calendar 2009) to meet the 1% required term loan amortization ($40.7 million per year) and the approximate $56 million annualized coupon on the 13.25% senior subordinated notes that turns cash pay in January 2010. Moody's anticipates Cengage Learnings remains reliant on its $300 million revolver to manage its highly seasonal free cash flow. The stable rating outlook reflects Moody's expectation that the company will continue to maintain a comfortable cushion under its credit facility covenants. Moody's believes this leads to low near-term default risk and some flexibility for Cengage to execute its operating plans and cost reduction initiatives and absorb weakness in its more pro-cylical lines of business (library reference, K-12 school). Moody's anticipates the company will continue to generate modest free cash flow and make steady progress toward reducing debt-to-EBITDA to a 10.0x range by 2009. The last rating action was on June 1, 2007 when Moody's assigned CL Holdco a B3 CFR in conjunction with the leveraged buy-out from Thomson. Cengage Learning's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of Cengage Learning's core industry and Cengage Learning's ratings are believed to be comparable to those of other issuers of similar credit risk. Cengage Learning, headquartered in Stamford, Connecticut is a provider of learning products to colleges, universities, professors, students, libraries, reference centers, government agencies, corporations and professionals. Cengage Learning publishes college textbooks and reference materials, and supplements its print publications with software tools and training/assessment applications that support students and professionals in all phases of their careers. Annual revenue approximates $1.7 billion. CHARTER COMMUNICATIONS: Bank Debt Sells at Substantial Discount --------------------------------------------------------------- Participations in a syndicated loan under which Charter Communications is a borrower traded in the secondary market at 77.09 cents-on-the-dollar during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 2.37 percentage points from the previous week, the Journal relates. The loan matures on March 6, 2014. Charter Communications pays 200 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B1 rating and Standard & Poor's C rating. As reported by the Troubled Company Reporter on February 19, 2009, Charter Communications reached an agreement in principle with holders of certain of its subsidiaries' senior notes holding approximately $4.1 billion in aggregate principal amount of notes issued by Charter's subsidiaries, CCH I, LLC and CCH II, LLC. Pursuant to separate restructuring agreements, dated February 11, 2009, entered into with each Noteholder, Charter and its subsidiaries expect to file voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code by April 1, 2009, to implement a restructuring aimed at improving its capital structure. Meanwhile, participations in a syndicated loan under which Fairpoint Communications is a borrower traded in the secondary market at 53.50 cents-on-the-dollar during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 1.88 percentage points from the previous week, the Journal relates. The loan matures on March 31, 2015. Fairpoint pays 275 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB+ rating. About Charter Communications Headquartered in St. Louis, Missouri, Charter Communications Inc. (Nasdaq: CHTR) -- http://www.charter.com/-- is a broadband communications company and the third-largest publicly traded cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides broadband communications solutions to business organizations, the as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. * * * As reported by the Troubled Company Reporter on Nov. 11, 2008, Charter Communications' balance sheet at Sept. 30, 2008, showed total assets of $15.1 billion, total liabilities of $23.9 billion, resulting in a shareholders' deficit of $8.8 billion. In December, Fitch Ratings placed Charter Communications, Inc.'s 'CCC' Issuer Default Rating and the IDRs and individual issue ratings of Charter's subsidiaries on Rating Watch Negative. Approximately $21.1 billion of debt outstanding as of Sept. 30, 2008 is effected by Fitch's action. In addition, Moody's Investors Service lowered the Probability-of-Default Rating for Charter Communications to Ca from Caa2 and placed all ratings (other than the SGL3 Speculative Grade Liquidity Rating) for the company and its subsidiaries under review for possible downgrade. Standard & Poor's Ratings Services also lowered its corporate credit rating on Charter Communications to 'CC' from 'B-'. S&P said that the rating outlook is negative. CHINATOWN BLOSSOM: Case Summary & Six Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Chinatown Blossom Plaza, LLC 11611 San Vicente Blvd., Suite 800 Los Angeles, CA 90049 Bankruptcy Case No.: 09-15020 Type of Business: The Debtor is a real estate developer. Chapter 11 Petition Date: March 5, 2009 Court: Central District Of California (Los Angeles) Judge: Barry Russell Debtor's Counsel: Daniel J. Weintraub, Esq. dan@wsrlaw.net Weintraub & Selth APC 12121 Wilshire Bvd., Ste. 1300 Los Angeles, CA 90025 Tel: (310) 207-1494 Estimated Assets: Less than $50,000 Estimated Debts: $10 million to $50 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Horizon Development Consulting $162,300 101 California St., Suite 2450 San Francisco, CA 94111 Nakada & Associates, Inc. $137,603 523 West Sixth St., Suite 1200 Los Angeles, CA 90014-1218 Cox, Castle & Nicholson $127,495 2049 Century Park East, 28th Floor Los Angeles, CA 90067 Bell, Boyd & Lloyd, LLP $121,149 Allen, Matkins, Et Al. $82,018 Jeffer Mangels Butler & Marmaro, LLP $4,543 The petition was signed by Lawrence S. Bond, managing member. CITIGROUP INC: DBRS Cuts Preferred Shares Rating to 'D' ------------------------------------------------------- Dominion Bond Rating Service downgraded its ratings for Preferred Shares issued by Citigroup Inc. to D from BBB following the announcement that the Company intends to suspend dividend payments on its outstanding preferred shares. This suspension is linked with the Company's announced transaction to exchange common stock for up to $27.5 billion in preferred securities. Under DBRS policy, the suspension of dividend payments on non- cumulative perpetual preferred securities, such as those issued by Citigroup, results in a rating of D. The D rating will continue as long as the dividend payments on the Company's preferred shares remain suspended, and until such time as the rating is discontinued or reinstated by DBRS. The ratings on these instruments had been Under Review with Negative Implications since January 14, 2009, and remained there following the downgrade of Citigroup's ratings on January 23, 2009. Citigroup will continue to make scheduled payments on outstanding trust preferred and enhanced trust preferred securities. CLINT BALLINGER: Files Chapter 13; Evident Tech Not Part of Filing ------------------------------------------------------------------ Adam Sichko at The Business Review reports that Evident Technologies Inc. president and CEO Clint Ballinger has filed for protection under Chapter 13 of the U.S. Bankruptcy Code. According to Business Journal, Mr. Ballinger listed $540,000 in debts, mainly in two mortgages and at least six credit card bills. Court documents say that Mr. Ballinger has $389,000 in assets, most of which is connected to his house in Burnt Hills, appraised at $320,000. "This has nothing to do with the company. None. Zero. The company is fine. The company has done absolutely nothing wrong. This has nothing to do with me as CEO." Business Journal relates that Mr. Ballinger said in December that he was seeking $10 million to support Evident Technologies' newest venture, an energy research unit. Business Journal states that under Mr. Ballinger's proposed plan, a court-appointed trustee will have "supervision and control" of any future earnings or income, for purposes of paying off debts. Court documents say that Mr. Ballinger earned about $146,472 from Evident Technologies in the 2008 fiscal year. Business Review relates that Mr. Ballinger said in December 2008 that he expected annual revenue to reach $4 million. The court will hold a hearing on the April 2 in Albany the status of Mr. Ballinger's repayment plan and one of his mortgages, Business Journal says. Clint Ballinger co-founded the Troy, N.Y.-based Evident Technologies Inc. COMFORT CO: Emerges From Chapter 11 Bankruptcy ---------------------------------------------- Comfort Co., Inc., and Sleep Innovations have emerged from its voluntary Chapter 11 financial reorganization. The Debtors' pre- packaged Plan of Reorganization was confirmed by the United States Bankruptcy Court for the District of Delaware on February 4, 2009. "Today marks the start of an exciting new chapter for Sleep Innovations," said Rick Heller, Sleep Innovations Chief Executive Officer. "I am particularly pleased that in the face of the current economic environment we were able to complete our restructuring in five months. This is a testament to the hard work of the entire Sleep Innovations team, our lenders and legal and financial advisors. With a strengthened capital base, we are well-positioned to reach our full potential." As part of its emergence from Chapter 11, the Debtors have obtained $33 million in exit financing from their existing lenders. About Comfort Co. Headquartered in West Long Branch, New Jersey, Comfort Co., Inc. -- http://www.sleepinnovations.com/-- is a holding company that owns 100% of the common stock of Sleep Innovations, Inc., which, in turn, is the direct parent of Advanced Innovations East, LLC, Advanced Innovations West, LLC, Advanced Innovations Central, LLC and Advanced Urethane Technologies, Inc. Advanced Urethane is the direct parent of AUT Brehnam, Inc. AUT Dallas, Inc., AUT Lebanon, Inc., AUT Newburyport, Inc., and AUT West Chicago, Inc. The Debtors develop, manufacture, market and distribute foam comfort sleep products, which include pillows, mattresses and mattress toppers, for sale to major retailers in the United States, Canada, Mexico and other countries. The Debtors also manufacture and sell standard and specialty polyurethane foam products to end market users, such as manufacturers in the bedding, furniture, automotive, packaging, medical and consumer products industries. The Debtors filed for Chapter 11 relief on Oct. 3, 2008 (Bankr. D. Del. Lead Case No. 08-12305). Michael R. Lastowski, Esq., and Richard W. Riley, Esq., at Duane Morris LLP, in Wilmington, Delaware, Sommer Leigh Ross, Esq., at Duane Morris LLP, in Philadelphia, and Sheryl L. Toby, Esq., at Dykema Gossett, PLLC, represents the Debtors as counsel. In its bankruptcy petition, Comfort Co. estimated both assets and debts to be between $100 million and $500 million. COMMSCOPE INC: S&P Puts 'BB-' Corporate Rating on Negative Watch ---------------------------------------------------------------- Standard & Poor's Rating Services said it placed its ratings on Hickory, North Carolina-based CommScope Inc., including its 'BB-' corporate credit rating, on CreditWatch with negative implications. "These actions reflect the company's challenging operating environment, which resulted in meaningful declines in fourth- quarter revenue and EBITDA," said Standard & Poor's credit analyst Susan Madison. Standard & Poor's expects profitability will weaken further through the first quarter of 2009 and visibility for the latter half of the year remains limited. "The resulting deterioration in credit metrics," said Ms. Madison, "and S&P's expectations for reduced profitability in 2009 due to the weak economy, could make it difficult for the company to meet the current minimum financial covenants contained in its $2.5 billion senior secured credit facilities." At Dec. 31, 2008, amounts outstanding under the facilities consisted of $1.8 billion of term loan borrowings. COMMUNITY HEALTH: Bank Debt Sells at Substantial Discount --------------------------------------------------------- Participations in a syndicated loan under which Community Health is a borrower traded in the secondary market at 81.48 cents-on- the-dollar during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 3.41 percentage points from the previous week, the Journal relates. The loan matures May 1, 2014. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB rating. Based in Franklin, Tennessee, Community Health Systems, Inc. -- http://www.chs.net/-- is the largest publicly traded operator of hospitals in the United States in terms of number of facilities and net operating revenues. The company provides healthcare services through these hospitals that it owns and operates in non- urban and selected urban markets throughout the United States. The company also owns and operates home health agencies, including four home health agencies located in markets where it does not operate a hospital. Through its wholly owned subsidiary, Quorum Health Resources, LLC, the company provides management and consulting services to non-affiliated general acute care hospitals located throughout the United States. Effective July 25, 2007, Community Health completed its acquisition of Triad Hospitals, Inc. Of the 115 hospitals included in its continuing operations as of December 31, 2007, 43 of them were acquired as part of the acquisition of Triad. The acquisition of Triad also expanded the company's operations into five states where it previously did not own any facilities. CONGOLEUM CORP: Court Stays Dismissal Order Pending Appeal ---------------------------------------------------------- Judge Kathryn Ferguson of the U.S. Bankruptcy Court for the District of New Jersey has entered an order to stay her decision and order dismissing Congoleum Corp.'s bankruptcy case, Bankruptcy Law360 reports. The bankruptcy case dismissal is effective 20 days from the date of the ruling. As reported by the Troubled Company Reporter on March 4, 2009, Congoleum had indicated it will file an appeal on the ruling. Congoleum, if the ruling stands, will lose protection from creditors and be forced to deal with the asbestos claims in civil court, Reuters has said. Reuters also has reported that Congoleum's unsecured creditors filed an emergency motion seeking to stay the court's decision, pending results of the appeal. The TCR related March 4, 2009, that the Court granted the motion of First State Insurance Company and Twin City Fire Insurance Company for summary judgment denying the confirmation of the Amended Joint Plan of Reorganization of Congoleum Corp., et al., the Official Asbestos Claimants' Committee and the Official Committee of Bondholders, dated Nov. 14, 2008. In its decision, the Court found that there is no genuine issue as to any material fact and because of this, the insurers are entitled to summary judgment as a matter of law. On Feb. 26, 2009, the Court ordered the dismissal of the Debtors' case, effective 20 days from the date of the order. At the close of the Disclosure Statement hearing on Dec. 18, 2008, the Court ruled that the plan that had been recently filed would be the final one it would consider. All parties were given the opportunity to submit their positions, either for dismissal or conversion, to the Court. In its opinion regarding the motion of the insurers for summary judgement denying confirmation of the Amended Joint Plan of Reorganization, the Court made these observations: -- In the Court's first summary judgment opinion addressing confirmation, the Court noted that the pre-petition Claimant Agreement with Joseph Rice and Perry Weitz, referring to the treatment of $2 million in payments to Mr. Rice and Mr. Weitz, "provided for an even treatment of asbestos creditors and creates many of the confirmation problems that have plagued this case." Claimants' Counsel was able to exact this tribute from the Debtors because Sec. 524(g)(2)(B)(ii)((IV)(bb) requires that a Sec. 524(g) plan be approved by at least 75% of the voting claimants. Thus, from the Debtors' perspective, it would be difficult, if not impossible, for the Debtors to confirm a plan unless Claimants' Counsel delivered the votes of their clients. -- The inequality of distribution among asbestos claimants makes the plan unconfirmable. The Plan proponents contend that the Amended Joint Plan provides for equality of treatment because all of the asbestos personal injury claims are placed in the same class. While this is true, not all the creditors in Class 7 can avail themselves of the option available to asbestos claimants Kenneth Cook, Richard Arsenault and Edward Comstock. For truly equal treatment the plan could have provided that claimants Cook, Arsenault and Comstock must relinquish any prepetition payments and apply to the Plan Trust on the same terms as all other asbestos creditors. -- Cause exists under Sec. 1112(b)(5) for the dismissal of the Debtors' case because the Court has denied confirmation of every proposed plan, and has made clear its intent to deny any request for additional time to file a further amended plan. Cause can also be found under Sec. 1112(b)(1) because there is continuing loss or diminution of the estate in the form of mounting professional fees. Beyond the examples of cause enumerated in Sec.1112(b), the Court also finds cause exists to convert or dismiss based on the failed mediation attempts. This case had the benefit of extensive mediation sessions with two extremely capable jurists, one of whom had previously presided over the coverage action. The Court finds it quite telling that despite those efforts the parties could not be moved toward proposing a confirmable plan. -- The Court believes that dismissal, as opposed to conversion, is the more prudent course of action. The Debtors are able to pay their immediate expenses on a short term basis. Conversion would result in a convulsive disruption of both cash flow and employment. Conversion would also add a significant layer of expense, as a Chapter 7 Trustee would be forced to start from scratch evaluating all of the Debtors assets and liabilities, including some very complex litigation. Dismissal would leave the Debtors free to continue the ongoing coverage litigation in the state court and to negotiate in what the parties seem to agree is a tort litigation environment that has changed quite a bit since these Chapter 11s were filed. A full-text copy of the Court's opinion, dated Feb. 26, 2009, is available at: http://bankrupt.com/misc/Congoleum.OpinionSummaryJudgment.pdf As reported in the TCR on Jan. 16, 2009, Bill Rochelle of Bloomberg News said the two insurers argue the Plan does not satisfy the statutory requirements under Section 1129 of the Bankruptcy Code and therefore cannon be confirmed. The company may only be able to emerge from bankruptcy after obtaining confirmation of its plan. Mr. Rochelle detailed that although the revised Plan was intended to remedy defects the Court identified when it rejected the 12th amended plan in June and the 10th amended plan in February, the two insurance companies contend that the Plan still violates bankruptcy law by not treating all creditors alike. The insurers, the report adds, characterize the Plan as giving Congoleum a release from liability "for a minimal contribution" while the insurance companies "would be saddled with a wildly inflated liability." As reported by the TCR on Jan. 14, Owens-Illinois, Inc., filed with the Court a preliminary objection to the Plan filed by Congoleum, together with its official committee of bondholders, on Nov. 14, 2008. Owens-Illinois claimed that the plan trust, to be established on the effective date of the Plan, and which will assume liability for all Asbestos personal injury claims against Congoleum, fails to protect the interests of co-defendants in the Asbestos litigation. About Congoleum Based in Mercerville, New Jersey, Congoleum Corporation (AMEX:CGM) -- http://www.congoleum.com/-- manufactures and sells resilient sheet and tile floor covering products with a wide variety of product features, designs and colors. The company filed for chapter 11 protection on Dec. 31, 2003 (Bankr. N.J. Case No. 03- 51524) as a means to resolve claims asserted against it related to the use of asbestos in its products decades ago. Richard L. Epling, Esq., Robin L. Spear, Esq., and Kerry A. Brennan, Esq., at Pillsbury Winthrop Shaw Pittman LLP, and Paul S. Hollander, Esq., and James L. DeLuca, Esq., at Okin, Hollander & DeLuca, LLP, represent the Debtors. The Asbestos Claimants' Committee is represented by Peter Van N. Lockwood, Esq., and Ronald Reinsel, Esq., at Caplin & Drysdale, Chtd. The Bondholders' Committee is represented by Michael S. Stamer, Esq., and James R. Savin, Esq., at Akin Gump Strauss Hauer & Feld LLP. Nancy Isaacson, Esq., at Goldstein Isaacson, PC, represents the Official Committee of Unsecured Creditors. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, the Court-appointed Futures Claimants Representative, is represented by Roger Frankel, Esq., Richard Wyron, Esq., and Jonathan P. Guy, Esq., at Orrick Herrington & Sutcliffe LLP, and Stephen B. Ravin, Esq., at Forman Holt Eliades & Ravin LLC. American Biltrite, Inc. (AMEX: ABL), which owns 55% of Congoleum, is represented by Matthew Ward, Esq., Mark S. Chehi, Esq., Christopher S. Chow, Esq., and Matthew P. Ward, Esq., at Skadden Arps Slate Meagher & Flom. Congoleum, together with its bondholders, filed a revised plan of reorganization on Nov. 20, 2008. CONSECO INC: A.M. Best Cuts Ratings to Non-Investment Grade ----------------------------------------------------------- A.M. Best Co. on March 4, 2009, downgraded the financial strength rating (FSR) to B (Fair) from B+ (Good) and issuer credit ratings (ICR) to "bb" from "bbb-" for the key life/health subsidiaries of Conseco, Inc. (Conseco) (Carmel, IN) [NYSE: CNO]. Concurrently, A.M. Best has downgraded the ICR to "b-" from "b+" and all debt ratings of Conseco. All ratings have been placed under review with negative implications. The downgrades and under review status are largely based on Conseco's announcement on March 2, 2009, that it plans to delay the filing of its Annual Report on Form 10-K until on or before March 17, 2009. Conseco said it needs additional time to finalize the analysis and disclosure related to its investment portfolio in light of unprecedented market conditions. Additionally, Conseco was informed by its independent auditors that the potential exists for their audit opinion to include an explanatory paragraph regarding Conseco's ability to continue as a going concern. The ratings will remain under review pending A.M. Best's evaluation of additional information and analysis regarding Conseco's liquidity and debt covenant margins, primarily those that could be impacted by a significant amount of additional realized losses in the company's investment portfolio. The FSR has been downgraded to B (Fair) from B+ (Good) and the ICRs to "bb" from "bbb-" for these key life/health subsidiaries of Conseco, Inc.: -- Bankers Life and Casualty Company -- Colonial Penn Life Insurance Company -- Conseco Health Insurance Company -- Conseco Insurance Company -- Bankers Conseco Life Insurance Company -- Conseco Life Insurance Company -- Washington National Insurance Company These debt rating has been downgraded: Conseco, Inc. -- to "b-" from "b+" on $300 million 3.5% senior unsecured convertible debentures, due 2035 ($293 million in debentures outstanding) The ICR has been downgraded to "b-" from "b+" for Conseco, Inc. CST INDUSTRIES: S&P Changes Outlook to Negative; Holds 'B' Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on CST Industries Inc. to negative from stable. At the same time, S&P affirmed its ratings on the company, including the 'B' long- term corporate credit rating. "The outlook revision reflects increasing pressure on some of the company's end markets, including industrial markets relating to dry product storage tanks, which could adversely affect its near- term operating performance," said Standard & Poor's credit analyst Robyn Shapiro. "Given the company's modest headroom under its financial leverage covenant and the approaching covenant step- downs, S&P believes weakening performance could pressure covenants in 2009." The ratings on Kansas City, Kansas-based CST reflect the company's vulnerable business profile as a participant in the fragmented and competitive metal storage tank market. The ratings also reflect the company's highly leveraged financial profile and modest cash flow protection measures. CST designs, fabricates, and erects factory-coated bolted and welded tanks and aluminum geodesic domes for a variety of end markets, including water, wastewater, industrial, agricultural, and oilfield. The industrial end markets are more cyclical than the water and wastewater markets and the industry in general is characterized by rival technologies and by competition among numerous small players based on price, quality, and personal relationships. While the company has leading niche market shares, it participates in a large overall market (metal storage). A diverse customer base with low sales concentration somewhat offsets the risks associated with CST's narrow scope of operations. The company is exposed to the industrial production cycle, but has a meaningful share of the less-cyclical water and wastewater markets (which account for more than 50% of sales). The company has some geographic diversification, generating more than 30% of sales abroad, and management intends to further expand its sales reach to take advantage of opportunities in the international market. CST benefits from its technical expertise in engineering and tank coatings. The company is somewhat vulnerable to price increases for raw materials (particularly for steel), but has demonstrated an ability to pass through some cost increases to customers during periods of strong demand, with timing lags. The financial profile is highly leveraged. As of Dec. 31, 2008, total debt to EBITDA was about 5x and funds from operations to total debt was about 8%. Leverage is higher following the April 2008 debt-financed acquisition of Conservatek Industries Inc., a manufacturer and installer of aluminum covers. For the current rating, S&P expects total debt to EBITDA to be about 5x and FFO to total debt to be about 10%. The outlook is negative, reflecting the company's modest margin of financial covenant compliance. S&P could lower the ratings if the company violates its financial covenants and appears unlikely to obtain satisfactory relief. S&P could revise the outlook to stable if the company continues to generate free cash flow and S&P believes it can maintain about 15% headroom under financial covenants. DANA CORP: Bank Debt Continues Slide in Secondary Market Trading ---------------------------------------------------------------- Participations in a syndicated loan under which Dana Corp. is a borrower traded in the secondary market at 28.71 cents-on-the- dollar during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 1.71 percentage points from the previous week, the Journal relates. The loan matures on January 31, 2015. Dana Corp. pays 375 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's B+ rating. Syndicated loans of other auto parts suppliers also trade at substantial discount in the secondary market during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. Participations in a syndicated loan under which Visteon Corp. is a borrower traded at 16.07 cents-on-the-dollar, a drop of 1.64 percentage points from the previous week. The loan matures on May 30, 2013. Visteon pays 300 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's B- rating. Lear Corp. bank debt traded in the secondary market at 31.17 cents-on-the-dollar, a drop of 3.40 percentage points from the previous week. The loan matures on March 29, 2012. Lear Corp. pays 250 basis points above LIBOR to borrow under the facility. The bank debt is not rated. Accuride Corp. bank debt traded at 62.00 cents-on-the-dollar, a drop of 5.60 percentage points from the previous week. The loan matures on January 6, 2012. Accuride pays 225 basis points above LIBOR to borrow under the facility. The bank debt is not rated by Moody's. It carries a junk rating by Standard & Poor's. About Dana Holding Corporation Based in Toledo, Ohio, Dana Corporation -- http://www.dana.com/ -- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Dana has facilities in China in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. The company and its affiliates filed for chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Nov. 30, 2007, the Debtors listed $7,131,000,000 in total assets and $7,665,000,000 in total debts resulting in a shareholders' deficit of $534,000,000. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represented the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, served as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners served as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represented the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP served as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC served as counsel to the Official Committee of Non-Union Retirees. The Debtors filed their Joint Plan of Reorganization on Aug. 31, 2007. On Oct. 23, 2007, the Court approved the adequacy of the Disclosure Statement explaining their Plan. Judge Burton Lifland of the U.S. Bankruptcy Court for the Southern District of New York entered an order confirming the Third Amended Joint Plan of Reorganization of the Debtors on Dec. 26, 2007. The Debtors' Third Amended Joint Plan of Reorganization was deemed effective as of Jan. 31, 2008. Dana Corp., starting on the Plan Effective Date, operated as Dana Holding Corporation. (Dana Corporation Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the TCR on Jan. 15, 2009, Standard & Poor's Ratings Services lowered its ratings on Dana Holding Corp., including the corporate credit rating, which was lowered to 'B' from 'B+'. The ratings were also removed from CreditWatch, where they had been placed with negative implications on Nov. 13, 2008. The outlook is negative. "The downgrade reflects our view that very weak market conditions in most of its business segments in 2009 will hinder the company's post-bankruptcy restructuring efforts," said Standard & Poor's credit analyst Nancy Messer. "We expect revenues to be reduced by weak auto sales and production in North America, weak auto sales in Europe, and the U.S. recession, which has stalled the recovery of commercial truck sales. Lacking an expanding revenue base, S&P believes the benefit from Dana's ongoing initiative to optimize its manufacturing footprint will fall short of S&P's previous near-term expectations," she continued. For example, for the last three months of 2008, the seasonally adjusted annual rate of light-vehicle sales in the U.S. was below 11 million units, and S&P expects sales in 2009 to be 10 million units, 24% below 2008 actual sales. DANA CORP: Silver Point Discloses 10.1% Equity Stake ---------------------------------------------------- Silver Point Capital, L.P., Edward A. Mule, and Robert J. O'Shea, in a joint Schedule 13G filed with the U.S. Securities and Exchange Commission, disclosed holding shares of Dana Holding Common Stock through Silver Point Capital Fund, L.P. and Silver Point Capital Offshore Fund, Ltd., as of February 19, 2009: Dana Stock Beneficially Equity Stake Entity Owned in Dana ------ ------------ -------- Silver Point Capital, L.P. 10,698,337 10.1% Edward A. Mule 10,698,337 10.1% Robert J. O'Shea 10,698,337 10.1% The number of common stock reported as beneficially owned by Silver Point Capital, L.P. consists of 4,825,600 shares of common stock, plus 5,872,737 shares of common stock that may be acquired through conversion of shares of Dana's convertible preferred stock. Silver Point Capital, L.P. is the investment manager of Silver Point Capital Fund, L.P. and the Silver Point Capital Offshore Fund, Ltd. and by virtue of this status may be deemed to be the beneficial owner of the common stock held by the Fund and the Offshore Fund. Silver Point Capital Management, LLC is the general partner of Silver Point Capital, L.P. and as a result may be deemed to be the beneficial owner of the common stock held by the Fund and the Offshore Fund. Messrs. Edward A. Mule and Robert J. O'Shea are members of the Management and have voting and investment power with respect to the common stock held by the Fund and the Offshore Fund and may be deemed to be a beneficial owner of the common stock held by the Fund and the Offshore Fund. P. Schoenfeld Dumps Dana Shares In a Schedule 13G/A filed with the U.S. Securities and Exchange Commission, P. Schoenfeld Asset Management LP, disclosed the shares of Dana Holding Common Stock it and its affiliates beneficially own, as of February 19, 2009: Dana Stock Beneficially Equity Stake Entity Owned in Dana ------ ------------ -------- P. Schoenfeld Asset Management LP 2,892,918 2.84% P. Schoenfeld Asset Management GP LLC 2,892,918 2.84% Peter M. Schoenfeld 2,892,918 2.84% PSAM WorldArb Master Fund Ltd. 2,177,965 2.15% Rebound Portfolio Ltd. 267,227 0.27% Synapse I, LLC 66,494 0.07% Spartan Partners, L.P. 66,494 0.07% PSAM Texas Master Fund Ltd. 26,494 0.03% P. Schoenfeld previously disclosed holding 5.48% equity in Reorganized Dana. P. Schoenfeld Asset Management LP serves as the investment adviser to Spartan, WorldArb, Rebound, Texas and certain managed accounts with respect to the shares of Common Stock directly owned by each of the Accounts and has full discretion to make all investment decisions for the Accounts with respect to the shares of Common Stock directly owned by each of the Accounts. P. Schoenfeld Asset Management GP LLC, liability company serves as the general partner of PSAM. Mr. Peter M. Schoenfeld serves as the managing member of PSAM GP with respect to shares of Common Stock directly owned by the Accounts. Donald Smith Reports 9.99% Stake In a Schedule 13-G filed with the U.S. Securities and Exchange Commission, Donald Smith & Co., Inc., discloses that it is deemed to beneficially own 9,970,590 shares of Dana Holding Corp.'s common stock as of February 11, 2009. Donald Smith's shares represent 9.99% of 100,036,390 shares of Dana Holding's Common Stock outstanding as of November 1,2008. Mr. Smith has sole voting power is equivalent to 7,484,197 shares of Dana's common stock. Mr. Smith previously reported holding 2.7% equity stake in Dana Corp. Avenue Capital Discloses 6.8% Stake In a Schedule 13-G filed with the U.S. Securities and Exchange Commission, Avenue Capital Management II, L.P. disclosed the shares of Dana Common Stock that it and its affiliates beneficially own: Dana Stock Equity Beneficially Stake Entity Owned in Dana ------ ------------ ------- Avenue Capital Management II, L.P. 7,032,754.21 6.8% Avenue Capital Management II GenPar, LLC 7,032,754.21 6.8% Marc Lasry 7,032,754.21 6.8% The approximate percentages of shares of Common Stock reported as beneficially owned by Avenue Capital Management II, Avenue Capital Management II GenPar and Marc Lasry are based upon 100,036,390 shares of Dana Holding's Common Stock outstanding as of November 1, 2008. Avenue Capital Management II, L.P. is an investment banker to each of the Avenue Entities. Avenue Capital Management II GenPar, LLC is the General Partner of Avenue Capital Management II, L.P. and Marc Lasry is the Managing Member of Avenue Capital Management II GenPar, LLC. Davidson Kempner Unloads Dana Shares In a Schedule 13G/A filed with the U.S. Securities and Exchange Commission, Davidson Kempner Partners, L.P., disclosed that it and its affiliates beneficially own 0% of Dana Holding Common Stock as of February 17, 2009. Davidson Kempner held a 7.4% equity stake in Dana on March 10, 2008. About Dana Holding Corporation Based in Toledo, Ohio, Dana Corporation -- http://www.dana.com/ -- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Dana has facilities in China in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. The company and its affiliates filed for chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Nov. 30, 2007, the Debtors listed $7,131,000,000 in total assets and $7,665,000,000 in total debts resulting in a shareholders' deficit of $534,000,000. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represented the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, served as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners served as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represented the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP served as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC served as counsel to the Official Committee of Non-Union Retirees. The Debtors filed their Joint Plan of Reorganization on Aug. 31, 2007. On Oct. 23, 2007, the Court approved the adequacy of the Disclosure Statement explaining their Plan. Judge Burton Lifland of the U.S. Bankruptcy Court for the Southern District of New York entered an order confirming the Third Amended Joint Plan of Reorganization of the Debtors on Dec. 26, 2007. The Debtors' Third Amended Joint Plan of Reorganization was deemed effective as of Jan. 31, 2008. Dana Corp., starting on the Plan Effective Date, operated as Dana Holding Corporation. (Dana Corporation Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the TCR on Jan. 15, 2009, Standard & Poor's Ratings Services lowered its ratings on Dana Holding Corp., including the corporate credit rating, which was lowered to 'B' from 'B+'. The ratings were also removed from CreditWatch, where they had been placed with negative implications on Nov. 13, 2008. The outlook is negative. "The downgrade reflects our view that very weak market conditions in most of its business segments in 2009 will hinder the company's post-bankruptcy restructuring efforts," said Standard & Poor's credit analyst Nancy Messer. "We expect revenues to be reduced by weak auto sales and production in North America, weak auto sales in Europe, and the U.S. recession, which has stalled the recovery of commercial truck sales. Lacking an expanding revenue base, S&P believes the benefit from Dana's ongoing initiative to optimize its manufacturing footprint will fall short of S&P's previous near-term expectations," she continued. For example, for the last three months of 2008, the seasonally adjusted annual rate of light-vehicle sales in the U.S. was below 11 million units, and S&P expects sales in 2009 to be 10 million units, 24% below 2008 actual sales. DANA CORP: Sues Insurance Companies Over $7.4 Million Losses ------------------------------------------------------------ Dana Holdings Corp. sued Northern Trust Corp. and Provident Investment Counsel, Inc., over about $7,400,000 in losses tied to Dana's pension plans, The Detroit Free Press reported on February 21, 2009. The newspaper, quoting the complaint filed by Dana with the federal court in Toledo, Ohio, related that Northern Trust and Provident failed to reconcile discrepancies in Dana's plan records when the company switched investment advisers. Meanwhile, about 187 employees at Dana Holding Corporation's South Stockton, California, plant have signed up for representation by the United Automobile, Aerospace and Agricultural Implement Workers union, The Record reported on February 26, 2009. "They wanted to have a voice in the workplace," Jim Soldate, president of the UAW's Fremont-based Local 76, told The Record. According to the newspaper, concerns over seniority after a December 2008 layoff of about 70 at the plant convinced workers they needed the UAW's help. The plant's operational reduction from two shifts to one in December displaced some workers with more than a decade of service at the plant, while others with only a year or two of service were allowed to stay, the report said. "I just don't think it's fair," Romeo Cabocan, a production-line quality inspector who has worked at the plant for 11-1/2 years told The Record. "We understand with the economy, they've got to cut people, but they've got to do it fairly." DELPHI CORP: Seeks Court Nod for Sale of Steering Biz to GM ----------------------------------------------------------- Delphi Corp. has submitted to the U.S. Bankruptcy Court for the Southern District of New York a motion seeking approval of the transfer of its global steering business to General Motors Corp. Delphi filed the formal request three days after it released a statement on its new deal with its former parent on March 3. Judge Robert Drain will convene a hearing on the request on March 24, 2009. Objections are due March 17. The parties have reached a deal regarding GM's exercise of its option to purchase Delphi's global steering business, as contemplated under the amended Master Restructuring Agreement. The MRA, which original version was filed together with Delphi's proposed plan of reorganization, filed in September 2007, addresses, among other things, the scope of GM's existing and future business awards to Delphi and related pricing agreements and sourcing arrangements. Delphi, in its Motion, explains that while in December 2007, it has signed an asset purchase agreement for the steering and halftshaft business with Steering Solutions Corporation, an affiliate of Platinum Equity, LLC, the sale did not push through and the APA was mutually terminated on March 3, 2009. GM, subject to approval by the Treasury, will pay SSC a $5.5 million break-up fee. Delphi also said that concurrent with the negotiations regarding the Steering Business, it has negotiated certain arrangements wherein GM agreed to provide advances to Delphi up to $650 million with respect to payments GM would make upon the effectiveness of Delphi's key agreements with GM -- the MRA and Global Settlement Agreement. The GSA resolves outstanding issues among Delphi and GM that have arisen or may arise before Delphi's emergence from Chapter 11. Following the consummation of the Amended GSA and Amended MRA in September 2008, GM committed to make an additional $300 million in advances pursuant to section 364(b) of the Bankruptcy Code, which advances were coterminous with the term of Delphi's $4.35 billion DIP credit facility. Pursuant to an amendment executed on January 30, 3009 to the Debtors' DIP Accommodation Agreement entered with JPMorgan Chase Bank, N.A., administrative agent and required lenders under the DIP Facility, the Debtors were required to secure an additional $150 million in liquidity support from GM by March 24, 2009. The support form GM support might come in two parts, with $50 million provided by February 27, 2009 and the remaining $100 million by March 24, 2009. On February 27, 2009, GM and Delphi reached an agreement for GM to increase its commitment under the GM Arrangement to $350 million, which satisfied the condition under the Accommodation Amendment to reduction of the minimum liquidity covenant from $100 million to $50 million. GM conditioned the further $100 million increase in the GM-Delphi Agreement on finalizing an agreement in which GM could exercise its option under the Amended MRA to purchase the Steering Business. John Wm. Butler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, notes that in order to maximize available liquidity to the Debtors under the Accommodation Amendment and in consideration of the benefits as a result of the divestiture of the Steering Business, on March 3, 2009, the Debtors and GM executed an agreement in which the parties agreed that the conditions to GM's exercise of the MRA option were satisfied in consideration for revised and supplemented terms of the sale of the Steering Business. Having reached an agreement on the sale of the Steering Business, also on March 3, 2009, the Debtors and GM reached an agreement, subject to certain conditions, to increase GM's commitment under the GM-Delphi Agreement to $450 million. A copy of the Steering Option Exercise Agreement: http://bankrupt.com/misc/Delphi_GM_Steering.pdf About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. (Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Latin America, Africa and Middle East, with headquarters in Miramar, Florida, is one of GM's four regional business units. GM LAAM employs approximately 37,000 people in 18 countries and has manufacturing facilities in Argentina, Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and Venezuela. GM LAAM markets vehicles under the Buick, Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and Suzuki brands. As reported in the Troubled Company Reporter on Nov. 10, 2008, General Motors Corporation's balance sheet at Sept. 30, 2008, showed total assets of 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. DELTA PETROLEUM: Moody's Pares Rating on $150 Mil. Notes to 'Ca' ---------------------------------------------------------------- Moody's Investors Service downgraded Delta Petroleum Corporation's (Delta) $150 million 7% senior unsecured notes due 2015 to Ca (LGD 5, 78%) from Caa3 (LGD 5, 76%). Moody's also downgraded Delta's Corporate Family Rating to Caa3 from Caa2 and its Probability of Default Rating to Caa3 from Caa2. Delta's Speculative Grade Liquidity rating remains at SGL-4. The outlook is negative. The downgrade primarily reflects the lack of liquidity and the non-compliance with its bank credit facility. As a result, Delta has entered into a forbearance agreement with its bank lenders pursuant to which lenders agreed to forbear from exercising their rights under the credit agreement (including acceleration of the amounts due) arising as a result of Delta's non-compliance with certain covenants in the credit agreement, specifically the current ratio covenant of 1:1. Consequently, Delta intends to raise capital. The company anticipates issuing $175 million of convertible preferred. With the proceeds of a potential $175 million convertible preferred rights offering, Delta intends to reduce amounts outstanding under its $295 million borrowing base credit facility (100% drawn) to approximately $225 million, reduce other accounts payable which total approximately $159 million, and for working capital and general corporate purposes. Additionally, the downgrade reflects continued high and unsustainable costs and leverage. Specifically, Moody's estimates Delta's three year average all sources finding and development costs at $9.20, its leveraged full cycle costs estimated at $45.95/boe, and its Debt/PD boe reserves at $21.94. Concurrently, Delta's reserves have a high concentration risk, a continued reliance on an aggressive drilling program for growth that includes some very expensive and higher risk/higher reward wells which may continue to drive inconsistent results, even if successful. Finally, with only 20% of reserves proved developed, Moody's estimates that Delta will continue to need significant resources to develop its reserves potential. As a result, Delta will be forced to continue to sell assets to repay debt diverting cash from reserve monetization. Moody's will continue to assess: i) Delta's reserve potential and financial position in light of the company's 2008 drilling, land, and acquisition spending of $732 million and its anticipated $52 million 2009 drilling program; ii) Delta's ability to raise new equity or equivalent funding in the current market, in light of an upcoming borrowing base revolver re-determination date in April 2009; and iii) Delta's asset sale and/or joint venture program. The last rating action on Delta was on January 14, 2009, at which time the Corporate Family Rating and Probability of Default Rating were downgraded to Caa2 from Caa1and the Senior Unsecured Rating was downgraded to Caa3 from Caa2. Also, the ratings were placed on review for further downgrade. Delta Petroleum Corporation, headquartered in Denver, CO, is small US independent exploration and production company with a focus on the Gulf Coast, Columbia River Basin, and Rocky Mountain regions. DENISE BANKSTON: Case Summary & 18 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Denise M. Bankston 5029 Sweetwater Drive Benton, LA 71006 Bankruptcy Case No.: 09-10675 Chapter 11 Petition Date: March 5, 2009 Court: Western District of Louisiana (Shreveport) Debtor's Counsel: Robert W. Raley, Esq. rraley52@bellsouth.net Robert W. Raley 290 Benton Road Spur Bossier City, LA 71111 Tel: (318) 747-2230 Fax: (318) 747-0106 Estimated Assets: $50 million to $100 million Estimated Debts: $10 million to $50 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Community Trust Bank Bank Loan $2,350,000 1101 Roc Lane Premier Ruston, LA 71270 Aggregates, LLC Hess Management Equipment Loan $1,700,000 c/o Joseph Ward at Ward Premier and Conley, LLC Aggregates, LLC 527 E. Boston Street Ste 200 Covington, LA 70433 Diversified Financial Equipment Loan $1,463,500 Services Premier c/o Chip Naus at Wiener, Aggregates, LLC Weiss & Madison, Attorneys P.O. Box 21990 Shreveport, LA 71120 Alliance Bank Loans for $1,200,000 Sold to California Bank and Business B & S Trust New Directions P.O. Box 1507 LLC Salt Lake City, UT 84110 Ford Motor Credit B & S New $1,200,000 One American Road Directions, LLC P.O. Box 1739 Dearborn, MI 48121 GE Transportation Finance Equipment Loan $1,192,500 c/o Mary Cali at Shows, Calli Premier Berthelot, Walsh, LLP Aggregates, LLC PO Drawer 4425 Baton Rouge, LA 70821 Business First Bank Business Line of $989,264 5110 Corporate Blvd. Credit Baton Rouge, LA 70808 John Deere Credit Corp. Equipment Loan $941,000 c/o J. Michael Percy at Premier Stafford, Stewart, & Potter Aggregates, LLC 3112 Jackson Street Alexandria, LA 71301 Lehman Brothers Building Loan $825,000 25520 Commercentre Dr. BSD Real Estate, Lake Forest, CA 92630 LLC Red River Bank Jet Allegiance $737,000 601 Market Street Aviation, LLC Shreveport, LA 71101 Jalou Corp. Fuel Supplier $667,500 c/o James Lochridge at Preis Premier and Roy, PLC Aggregates, LLC P.O. Drawer 94-C Lafayette, LA 70509 Altec Capital Services Equipment Loan $667,000 P.O. B 100816 Premier Atlanta, GA 30384 Aggregates, LLC Altec Capital Services First Tennesse Bank National Airplane $620,000 Ass. B.S. Aviation LLC Metropolitan Division 165 Madison Memphis, TN 38103 First Guaranty Bank Bank Loan $592,800 P.O. Box 2009 Schmidt Built Hammond, LA 70404 Homes, LLC Bancorpsouth Business Line of $495,235 Credit LA Machinery Co., LLC Equipment Loan $496,500 Premier Aggregates, LLC Iberia Bank Business Line of $482,590 Credit Red River Bank Line of Credit $480,750 Titan Healthcare, LLC DEXIA MEDIA EAST: Bank Debt Sells at 55% Off Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Dexia Media East LLC is a borrower traded in the secondary market at 44.40 cents- on-the-dollar during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.78 percentage points from the previous week, the Journal relates. The loan matures on November 8, 2009. Dexia Media East pays 200 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B1 rating and Standard & Poor's B- rating. Dex Media East LLC is a subsidiary of Dex Media East, Inc. and an indirect wholly-owned subsidiary of Dex Media, which is a direct wholly-owned subsidiary of R.H. Donnelley Corporation. Dex Media East is the exclusive publisher of the "official" yellow pages and white pages directories for Qwest Corporation, the local exchange carrier of Qwest Communications International Inc., in Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota. DOLE FOOD: S&P Assigns 'B-' Rating on $325 Million 2014 Notes ------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B-' rating to Westlake Village, California-based Dole Food Co. Inc.'s proposed $325 million second-lien notes due 2014, with a recovery rating of '3', indicating the expectation of meaningful (50%-70%) recovery in the event of payment default. S&P expects that the company will use net proceeds from the issuance, together with borrowings under the revolving credit facility, to refinance its $345 million senior notes due May 1, 2009, and pay related fees, premiums, and expenses. Standard & Poor's also affirmed the existing ratings on the company, including the 'B-' corporate credit rating. The outlook is negative. S&P will consider an outlook revision to stable upon successful completion of the refinancing under reasonable terms. S&P will also withdraw its 'B-' rating on the 2009 notes upon repayment. As of Jan. 3, 2009, the company had about $2.2 billion of debt. The ratings on Dole reflect its highly leveraged financial profile and participation in the competitive, commodity-oriented, and volatile fresh produce industry, which is subject to seasonality, as well as political and economic risks. In addition to the May 2009 note maturity, the company also needs to address a bonding requirement related to a European Commission fine by April 30, 2009, and maturities in June 2010. "Given current difficult market conditions, S&P remain concerned about Dole's ability to successfully refinance the notes due May 2009," said Standard & Poor's credit analyst Alison Sullivan. In addition, Dole needs to address a bonding requirement related to the EC fine by April 30, 2009. S&P could lower the company ratings if Dole cannot refinance the 2009 notes on a timely basis, while maintaining adequate liquidity. "Alternatively, Standard & Poor's could revise the outlook to stable if the 2009 notes are successfully refinanced under reasonable terms, liquidity is sufficient, and operating trends continue to show improvement," she continued. DOMTAR CORP: S&P Changes Outlook to Negative; Affirms 'BB' Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said it revised the outlook on Domtar Corp. to negative from stable. At the same time, S&P affirmed the ratings, including the 'BB' long-term corporate credit rating, on Domtar. "We revised the outlook based our expectations of Domtar's weaker EBITDA generation in 2009 as demand for uncoated freesheet and pulp continues to decline," said Standard & Poor's credit analyst Jatinder Mall. The ratings on Domtar reflect S&P's view of the company's leading market position in the North American uncoated freesheet market and good cost profile. The ratings are constrained, however, by what S&P see as a steady decline in demand for UFS; volatile prices for commodity paper, pulp, and lumber products; and a weak lumber business. With about 34% of industry capacity, Domtar is the largest UFS manufacturer in North America. It has 4.1 million short tons of integrated fine paper capacity at 11 pulp and paper mills. Most of its paper capacity is in the U.S.; Domtar also manufactures and sells coated groundwood paper, pulp, and lumber. The negative outlook reflects Standard & Poor's expectations that product demand in all of Domtar's business segments will remain weak in the near term, placing pressure on its credit metrics. S&P could lower the ratings if market conditions do not improve and Domtar's EBITDA generation remains at fourth-quarter 2008 levels over the first half of 2009 leading to a leverage ratio of more than 4x. An upgrade is unlikely in the near term and would require a combination of Domtar improving profitability and further deleveraging to about 2.5x. EASTMAN KODAK: S&P Downgrades Corporate Credit Rating to 'B-' ------------------------------------------------------------- Standard & Poor's Rating Services said it lowered its ratings on Eastman Kodak Co., including lowering the corporate credit rating to 'B-' from 'B.' S&P removed the corporate credit rating from CreditWatch, where it was placed with negative implications on Nov. 3, 2008. The outlook is negative. "The downgrade reflects the company's high rate of cash consumption and concern that its cash balance could quickly diminish if substantial negative discretionary cash flow generation does not abate," said Standard & Poor's credit analyst Tulip Lim. The issue-level ratings remain on CreditWatch with negative implications, pending a review of the capital structure after the company addresses its covenant compliance on its secured credit facility with lenders. "We believe that the structure of the facility could change as a result of such discussions," added Ms. Lim. ECLIPSE AVIATION: Now in Ch. 7 Liquidation After Botched Sale ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware said that it would grant a motion by creditors to convert the bankruptcy case of Eclipse Aviation Corp. to Chapter 7 liquidation, Bloomberg's Bill Rochelle said. As reported by the TCR on February 27, 2009, citing an Associated Press report, Eclipse Aviation said that it won't object a motion filed by senior noteholders to convert the company's Chapter 11 reorganization case to Chapter 7 liquidation. The noteholders want "effective control" of Eclipse's assets. The Noteholders sought the conversion following the Company's failure to complete its planned $188 million sale to EclipseJet Aviation International Inc., an affiliate of ETIRC Aviation. About Eclipse Aviation Albuquerque, New Mexico-based Eclipse Aviation Corporation -- http://www.eclipseaviation.com/-- makes six-passenger planes powered by two Pratt & Whitney turbofan engines. The company and Eclipse IRB Sunport, LLC filed separate petitions for Chapter 11 relief on Nov. 25, 2008 (Bankr. D. Delaware Lead Case No. 08-13031). Daniel Guyder, Esq., John Kibler, Esq., and David C. Frauman, Esq., at Allen & Overy LLP, represent the Debtors as counsel. Joseph M. Barry, Esq., and Donald J. Bowman, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors as Delaware counsel. Eclipse Aviation Corporation listed assets of between $100 million and $500 million and debts of more than $1 billion. EQUITRUST LIFE: A.M. Best Cuts FS Rating to Non-Investment Grade ---------------------------------------------------------------- A.M. Best Co. downgraded on February 27, 2009, the financial strength rating (FSR) to B++ (Good) from A- (Excellent) and the issuer credit rating (ICR) to "bbb+" from "a-" of Farm Bureau Life Insurance Company (FB Life). A .M. Best also has downgraded the FSR to B+ (Good) from A- (Excellent) and the ICR to "bbb-" from "a-" of its affiliate, EquiTrust Life Insurance Company. Concurrently, A.M. Best has downgraded the ICR and debt ratings to "bb" from "bbb-" of FBL Financial Group, Inc. (FFG) [NYSE: FFG], the ultimate parent of FB Life and EquiTrust. All ratings have a negative outlook. All companies are located in West Des Moines, IA. The rating actions reflect FFG's significant level of unrealized losses in its investment portfolio, high level of real-estate linked assets, limited financial flexibility and high intangibles to equity, the rapid growth in annuity reserves within the organization and the losses reported in its 2008 GAAP results, due primarily to one-time deferred acquisition cost and sales inducement adjustments related to anticipated surrenders at EquiTrust Life. FFG reported a 53% decline in its GAAP equity between the third and fourth quarters of 2008 due to a significant increase in its accumulated other comprehensive loss. As these unrealized losses do not flow through statutory statements, the reported capital for the life insurance entities remained stable and increased modestly due to capital contributions and permitted practices in the state of Iowa. Nevertheless, A.M. Best is concerned with the magnitude of the unrealized losses relative to capital as the company continues to maintain a high exposure to real-estate linked assets, with high growth in its commercial mortgage portfolio over the last several years. While performing to date, a downturn in commercial real estate performance is anticipated given weak macroeconomic conditions. Rapid growth has led to heightened interest rate risk and a high level of intangibles to equity. In addition, A.M. Best believes that spread management will continue to be a challenge for FFG. The significant annuity growth experienced at EquiTrust has been supported through capital contributions from FFG, primarily from the issuance of debt and originally from ongoing dividend payments from FB Life to its parent. A.M. Best notes that additional leverage was added in 2008 through the fourth quarter issuance of a three-year $100 million note to affiliated companies. EquiTrust's interest-sensitive liabilities have shown significant growth, through sales of both indexed annuity products, and more recently, through sales of multi year guaranteed fixed annuities. While the company's risk-adjusted capitalization is presently viewed as adequate, continued rapid growth and further investment impairments would weaken its capital position. The ratings continue to recognize FB Life's more balanced business profile between life and annuity reserves, strong affinity within the Farm Bureau market and stable profitability trends. The ratings also recognize EquiTrust's rational product design, competent hedging programs and proactive market conduct and compliance programs. The negative outlook on the ratings reflects A.M. Best's concern with the reduced level of financial flexibility within the organization in the current unfavorable credit environment, the continued concern with potential future losses in its portfolio and an elevated level of surrenders. These debt ratings have been downgraded: FBL Financial Group Inc.-- -- to "bb" from "bbb-" on $75 million 5.85% senior unsecured notes, due 2014 -- to "bb" from "bbb-" on $100 million 5.875% senior unsecured notes, due 2017 EUROFRESH INC: Moody's Downgrades Corporate Family Rating to 'Ca' ----------------------------------------------------------------- Moody's Investors Service lowered the corporate family and senior unsecured bond ratings of Eurofresh, Inc. to Ca from Caa3. Moody's affirmed the company's probability of default rating at Ca and its senior subordinated discount notes at C. Moody's placed all ratings with the exception of the senior subordinated discount notes under review for possible downgrade. These rating actions reflect Moody's expectation that a restructuring of Eurofresh's liabilities is inevitable given a debt burden that is currently unsupportable from operations. LGD assessments are subject to adjustment. Ratings lowered and under review for possible downgrade: -- Corporate family rating to Ca from Caa3 -- $170 million senior unsecured discount notes due 2013 to Ca from Caa3 Ratings affrimed and under review for possible downgrade: -- Probability of default rating a Ca Rating affirmed: -- $44.17 million senior subordinated discount notes due 2014 at C Eurofresh did not make the January 2009 interest payment on its 11.5% Senior Notes due 2013, entering the grace period which has been extended to March 18, 2009. The company is evaluating strategic alternatives, including balance sheet recapitalization. Eurofresh is in negotiations with secured lenders and noteholders regarding its capital structure. Moody's review will focus on Eurofresh's liquidity and changes in its capital structure, if any. Moody's most recent rating action for Eurofresh on December 20, 2007 downgraded the company's ratings with a negative outlook. Based in Wilcox, Arizona, Eurofresh, Inc., is the country's largest producer of greenhouse tomatoes. Sales for the twelve months ended September 30, 2008 were approximately $179 million. EVERYTHING BUT WATER: Organizational Meeting to Form Panel Today ---------------------------------------------------------------- Roberta A. DeAngelis, Acting United States Trustee for Region 3, will hold an organizational meeting on March 9, 2009, at 11:00 a.m. in the bankruptcy case of Everything But Water LLC. The meeting will be held at J. Caleb Boggs Federal Building, 844 King Street, Room 5209 in Wilmington, Delaware. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. Based in Orlando, Florida, Everything But Water, LLC -- http://www.everythingbutwater.com/-- owns and operates a chain of women's swim and resort-wear stores in the United States. Everything But Water and its affiliate, Just Add Water, Inc., filed for Chapter 11 bankruptcy protection on February 25, 2009 (Bankr. D. Del. Case Nos. 09-10649 and 09-10650). Judge Mary F. Walrath presides over the case. Neil Raymond Lapinski, Esq., and Rafael Xavier Zahralddin-Aravena, Esq., at Elliott Greenleaf in Wilmington, serve as bankruptcy counsel. When it filed for bankruptcy, Everything But Water disclosed $50,001 to $100,000 in assets and $1,000,001 to $10,000,000 in debts. EXCHANGE INSURANCE: A.M. Best Cuts Fin'l Strength Rating to Weak ---------------------------------------------------------------- A.M. Best Co. downgraded on February 27, 2009, the financial strength rating to C (Weak) from B (Fair) and the issuer credit rating to "ccc" from "bb" of The Exchange Insurance Company Limited (Exchange) (United Kingdom). The ratings remain under review, but the implications of the review have been revised to negative from developing. The ratings of Exchange have been downgraded due to the continued failure to complete negotiations with external investors to raise additional capital. The downgrading of the ratings reflects the company's capacity to pay claims in the event of run-off given the increased likelihood that it will be placed into administration. Exchange continues to pursue negotiations to sell the company to potential investors. The ratings remain under review pending resolution of these discussions. Should these talks conclude successfully, an upgrade is possible. However, the company will require regulatory approval for a change of controller if negotiations are concluded successfully. EZEQUIEL ALCALA: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Ezequiel Alcala Tapia aka Ike Tapia dba Tapia Dairy 3913 Veribest Park Rd. Miles, TX 76861 Bankruptcy Case No.: 09-60048 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Tapia Dairy # 3, L.L.C. 09-60049 Tapia Pearsall, L.L.C. 09-60052 Chapter 11 Petition Date: March 5, 2009 Court: Northern District of Texas (San Angelo) Judge: Robert L. Jones Debtor's Counsel: Dana A. Ehrlich, Esq. danaehrlichlawoffice@yahoo.com Law Office of Dana Ehrlich P.O. Box 1831 San Angelo, TX 76902 Tel: (325) 655-5351 Fax: (325) 655-7089 Estimated Assets: $1 million to $10 million Estimated Debts: $10 million to $50 million The Debtors did not file a list of 20 largest unsecured creditors. FAIRPOINT COMMUNICATIONS: Bank Debt Sells at 47% Discount --------------------------------------------------------- Participations in a syndicated loan under which Fairpoint Communications is a borrower traded in the secondary market at 53.50 cents-on-the-dollar during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 1.88 percentage points from the previous week, the Journal relates. The loan matures on March 31, 2015. Fairpoint pays 275 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB+ rating. Meanwhile, participations in a syndicated loan under which Charter Communications is a borrower traded in the secondary market at 77.09 cents-on-the-dollar during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 2.37 percentage points from the previous week, the Journal relates. The loan matures on March 6, 2014. Charter Communications pays 200 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B1 rating and Standard & Poor's C rating. Charter and its subsidiaries expect to file voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code by April 1, 2009, to implement a restructuring aimed at improving its capital structure. As reported by the Troubled Company Reporter on February 19, 2009, Charter reached an agreement in principle with holders of certain of its subsidiaries' senior notes holding approximately $4.1 billion in aggregate principal amount of notes issued by Charter's subsidiaries, CCH I, LLC and CCH II, LLC. Headquartered in Charlotte, North Carolina, FairPoint Communications, Inc. provides a full range of communications services to residential and business customers including local and long distance voice, data, Internet, television and broadband. FairPoint Communications is traded on the New York Stock Exchange under the symbol FRP. FairPoint operates 32 local exchange companies in 18 states. With roughly 1.9 million access line equivalents, FairPoint is the eighth largest telecommunications company in the United States. FIRST INDUSTRIAL REALTY: Moody's Cuts Senior Unsecured Ratings -------------------------------------------------------------- Moody's Investors Service downgraded the ratings of First Industrial Realty Trust and First Industrial L.P. (senior unsecured debt to Baa3, from Baa2) and placed the ratings on review for possible downgrade. These ratings actions reflect the continued weakening of First Industrial's credit metrics and the breaching of certain benchmarks previously laid out by Moody's as likely to put negative pressure on the ratings. In addition, with a fully drawn line of credit, First Industrial has very little room within its liquidity profile for any operating difficulties. During its review Moody's will focus on First Industrial's performance. Moody's will also closely monitor the progress of First Industrial's refinancing efforts for its $125 million June 2009 maturity. In addition, First Industrial's ability to meet its financial covenants with respect to both its bond and bank line may erode if economic conditions in 2009 put negative pressure on its NOI and property sales. First Industrial's fixed charge coverage for Q4'08 was only 1.5X indicating a strong negative trend and far below the 2.5X criteria established by Moody's. Also, First Industrial's leverage measured as debt/EBITDA rose to 9.7X for Q4'08, much higher than the 6X level that Moody's viewed as prudent, which points to a downward trend for 2009. Moody's believes that the REIT's portfolio performance and credit profile will continue to be pressured by reduced tenant demand resulting from the recessionary economy. In addition, First Industrial will not be receiving as significant an upside from its joint ventures and merchant building activities as it had in prior years. Counterbalancing these challenges, First Industrial benefits from a well-diversified and largely (96%) unencumbered portfolio which performed well in 2008. Same property NOI growth was 1.5% for 2008 and even the weakest performance in the fourth quarter was positive with a 0.7% increase. The rating outlook would likely return to stable once First Industrial achieves and maintains a consistent credit profile encompassing effective leverage of approximately 60% and/or 6X debt/EBITDA, fixed charge coverage (including proceeds from merchant building and JV activities) of approximately 2.5X and secured debt under 10% of gross assets. However, Moody's does not expect this to happen in the near term. In addition, adequate liquidity and successful refinancing of upcoming debt maturities would be key for a stable outlook. A ratings downgrade could result from further declines in First Industrial's fixed charge coverage (including JV and merchant building proceeds) to below 2X over several quarters, a sustained increase in effective leverage to over 65% debt/gross assets or over 7X debt/EBITDA, or a rise in secured debt closer to 20% of gross assets. Any covenant breaches could also cause the ratings to be lowered, including a multiple-notch downgrade. These ratings were downgraded and placed on review for possible downgrade: * First Industrial L.P. -- Senior debt to Baa3 from Baa2; senior debt shelf to (P)Baa3 from (P)Baa2 * First Industrial Realty Trust, Inc. -- Preferred stock at to Ba1 from Baa3; preferred stock shelf to (P)Ba1 from (P)Baa3 Moody's last rating action with respect to First Industrial was on November 5, 2008, when Moody's affirmed the ratings of First Industrial L.P. at Baa2 (senior unsecured) and First Industrial Realty Trust, Inc. at Baa3 (preferred stock) and revised the rating outlook to negative. First Industrial Realty Trust, Inc. [NYSE: FR] is an industrial real estate investment trust that controls over 70 million square feet of warehouse, manufacturing and light industrial assets, in addition to over 680 acres of developable land in more than 30 markets in the United States and Canada. At December 31, 2008, First Industrial had $3.2 billion in assets and $864 million in book equity. FORD MOTOR: Restructuring Has No Immediate Impact on DBRS Ratings ----------------------------------------------------------------- Ford Motor Company last week announced a series of offers pertaining to the restructuring of its automotive debt obligations. Concurrently, the Company provided an update on its tentative agreements with the United Auto Workers regarding, among other items, future Voluntary Employee Beneficiary Association payments. While the attempted measures are viewed positively by Dominion Bond Rating Service, the rating agency said that, at present there are no resulting rating implications. DBRS notes there remains considerable execution risk with respect to every major component of the proposed debt restructuring. Additionally, DBRS further noted that Ford must also demonstrate continued progress with respect to other aspects (e.g., operations, cost and capacity reductions, product portfolio, etc.) of its attempted transformation. This progress will be all the more challenging in the face of global automotive industry conditions that appear to be deteriorating even more than l2008's severe downturn. The announcement is aimed at restructuring Ford's automotive debt. As of December 31, 2008, total automotive debt amounted to $25.8 billion. The Company, in conjunction with Ford Motor Credit Company LLC, announced various offers, with respect to the restructuring of these obligations. (1) Ford Credit announced a cash offer of up to $1.3 billion to purchase certain series of the senior unsecured notes. DBRS notes that the tender offer consideration varies from 27% to 52% of the respective face amounts (in each case supplemented by an early tender premium of 3%), with the highest consideration being offered to the 9.50% debentures due June 1, 2010. (2) Regarding the convertible notes, Ford is offering a common stock conversion supplemented by a cash premium, specifically each $1,000 principal amount of the convertible notes is subject to an offer of 108.6957 shares of Ford common stock plus an $80 cash premium. (3) Ford has announced its intention to defer future interest payments on these securities, beginning with the payment due April 15, 2009. The Company pointed out that it is permitted to defer such payment for up to 20 consecutive quarters. (4) Regarding the senior secured term loan debt, Ford Credit has announced a cash offer in the amount of $500 million to purchase these loans on an auction basis, with a price range of not less than 38% of par and nor greater that 47% of par. If the measures are successfully executed, Ford's debt and VEBA obligations would be materially reduced, providing the Company with significantly greater financial flexibility to weather the severe global automotive downturn. However, DBRS notes that, apart from its financial burden, several other aspects of Ford's attempted transformation remain. A key component of the Company's strategy entails an increased focus on Ford's core brands. As such, the Company completed the divestitures of several non-core brands, including Aston Martin, Jaguar and Land Rover. Ford has also reduced its stake in Mazda and is currently reviewing its options with respect to Volvo. As for product planning, while Ford will continue to offer a full assortment of vehicles (i.e., from small cars to large pickup trucks and sport utility vehicles (SUVs)), the Company will place an increased focus on small and midsize cars in response to the recent distinct shift in vehicle segmentation (i.e., away from larger vehicles and toward smaller, more fuel-efficient models). Finally, Ford has emphasized the strategic importance of Ford Credit, whose objective is to consistently support the sale of Ford vehicles. Ford retains whole ownership of Ford Credit. This is seen to be a distinct advantage vis-�-vis General Motors Corporation and Chrysler LLC, which no longer have total control of their respective captive finance companies. This gives Ford greater flexibility in supporting vehicle sales, particularly in the current environment of very tight credit conditions. DBRS acknowledges the progresses made by Ford as well as the strategic merits of the Company's announced initiatives, which, if successfully executed to a substantial degree, would likely have positive rating implications. However, DBRS is currently not taking any action with respect to the ratings, which have a Negative trend, in light of the significant cash burn of the automotive operations and the severe automotive industry conditions. Future rating action will depend on an aggregate assessment of the Company's progress in its transformation in the context of prevailing industry conditions. FREEDOM BANK: Georgia Regulators Appoint FDIC as Receiver --------------------------------------------------------- Freedom Bank of Georgia, based in Commerce, Georgia, was closed on March 6, 2009, by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Northeast Georgia Bank, of Lavonia, Georgia, to assume all of the deposits of Freedom Bank of Georgia. The four offices of Freedom Bank of Georgia reopened on March 9, 2009, as branches of Northeast Georgia Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. As of March 4, 2009, Freedom Bank of Georgia had total assets of approximately $173 million and total deposits of $161 million. In addition to assuming all of the deposits of the failed bank, Northeast Georgia Bank agreed to purchase approximately $167 million in assets at a discount of $13.65 million. The FDIC will retain the remaining assets for later disposition. The FDIC and Northeast Georgia Bank entered into a loss-share transaction. Northeast Georgia Bank will share in any losses on approximately $96.5 million in assets covered under the agreement. The loss-sharing arrangement is projected to maximize returns on the covered assets covered by keeping them in the private sector. The agreement is expected to minimize disruptions for loan customers as they will maintain a banking relationship. The FDIC estimates that the cost to the Deposit Insurance Fund will be $36.2 million. Northeast Georgia Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's Deposit Insurance Fund compared to alternatives. Freedom Bank of Georgia is the seventeenth FDIC-insured institution to fail in the nation this year. The last bank to fail in Georgia was FirstBank Financial Services, McDonough, on February 6, 2009. G.I. JOE'S: Aims to Keep Going Concern Value; Must Sell in 30 Days ------------------------------------------------------------------ G.I. Joe's Inc. filed, contemporaneous with its bankruptcy petition, documents seeking approval from the U.S. Bankruptcy Court for the District of Delaware to auction off all its assets on March 30. The Debtor appears to prefer bids that would keep the stores open, saying in an affidavit submitted together with its "first day" motions that it intends to honor gift cards totaling $2,070,000 so as not to erode customer base and damage going concern and sale value, and that it would solicit bids for a sale of as many of the stores as possible as a going concern. The Debtor, however, is contemplating a two-track sale process, with the other one contemplating going-out-of-business sales. In addition, the Debtors' secured lenders have required the company to close a deal for the sale of all its assets within 30 days. G.I. Joe's blamed its bankruptcy on weak retail sales brought about from the volatile credit markets, housing downturn and the global recession. It said it wasn't able to secure more loans from lenders. Wells Fargo Retail Finance, LLC, collateral agent for the Debtor's prepetition secured lenders, has committed to provide $51 million of debtor-in-possession financing to allow G.I. Joe's to complete a sale of its assets. Well Fargo is already owed $47 million for pre-bankruptcy secured loans. The Debtor also owes Crystal Capital Fund Management, L.P., $35.2 million on term loans backed by second priority liens on the same collateral. The bid procedures provide that a holder of a lien on assets of the Debtor will be permitted to credit bid pursuant to Section 363(k) of the Bankruptcy Code. The Debtor says that the DIP facility, which will provide borrowings of up to $1.2 million upon interim approval of the loans, and the use of cash collateral, which the lenders have consented, will allow the Debtor to meet their administrative and operation obligations during the early stages of the Chapter 11 cases, a "very critical period for preserving going concern values." G.I. Joe's is seeking approval of a sale process on this timetable: -- initial bids are due March 20, 2009. -- the selection of a bid or combination of bids as the stalking horse bid(s) on or before March 24, 2009; -- the execution of definitive documentation with respect to the stalking horse bids on or before March 27, 2009; -- receipt of final competing bids on or before March 27, 2009.l -- an auction on or before March 30, 2009; -- hearing to approve the sale to the winning bidder(s) on or before April 2, 2009; -- closing of the sale transactions on or before April 3, 2009. The stalking horse bidder will receive a $100,000 break-up fee, payable if the Debtor elects to pursue a sale with other bidders for the same assets. The Debtor believes that break-up fee to be less than 1% of the total anticipated sale proceeds. Patrick J. O'Malley of development Specialists Inc. has been tapped as chief restructuring officer and his firm has hired as financial advisors. Aside from the bid procedures, the Debtor has also filed a motion to reject a lease agreement with TRF Pacific LLC for premises located at 2620 Second Avenue, Seattle Washington. The Debtor said it had over 30 leases. About G.I. Joe's Headquartered Wilmington, Delaware, G.I. Joe's Holding Corporation -- http://www.joessports.com-- owns and operates retail stores selling sports apparel, and camping equipment and accessories. G.I Joe has more than 30 locations in Idaho, Oregon, and Washington. The G.I. Joe's Holding Corporation and G.I. Joe's Inc. filed for Chapter 11 protection on March 4, 2009 (Bankr. D. Del. Case Nos.: 09-10713 and 09-10714. Proskauer Rose LLP, represents the Debtors in their restructuring efforts. The Debtors proposed Steven M. Yoder, Esq., at Potter Anderson & Corroon LLP, as their Delaware counsel and Patrick J. O'Malley, at Development Specialist Inc., chief restructuring officer. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million. G.I. JOE'S: Case Summary & 28 Largest Unsecured Creditors --------------------------------------------------------- Debtor: G.I. Joe's Holding Corporation 1209 Orange Street Wilmington, DE 19801 Bankruptcy Case No.: 09-10713 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- G.I. Joe's Inc. 09-10714 Type of Business: The Debtors own and operate a retail store that sells sports apparel, and camping equipment and accessories. See: http://www.joessports.com/ Chapter 11 Petition Date: March 4,2009 Court: District of Delaware (Delaware) Debtors' Counsel: Proskauer Rose LLP 1585 Broadway New York, NY 10036-8299 Tel: (212) 969-3000 Fax: (212) 969-2900 http://www.proskauer.com/ Delaware Counsel: Steven M. Yoder, Esq. syoder@potteranderson.com Potter Anderson & Corroon LLP Hercules Plaza 1313 North Market Street Wilmington, DE 19801 Tel: (302) 984-6107 Fax: (302) 778-6107 Chief Restructuring Officer: Patrick J. O'Malley 26 Broadway New York, New York 10004-1840 Tel: (212) 425-4141 Fax: (212) 425-9141 Development Specialist Inc. http://www.dsi.biz/ Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million The Debtor's Largest Unsecured Creditors: Entity Claim Amount ------ ------------ DBA Baja Motorsports $1,164,629 PO Cox 33442 Charlotte, NC 28233-3442 4602 Ehammond Lane, Ste 101 Phoenix, AZ 85034-641i Tel: (602) 443-9160 Columbia Sportswear Co. $888,292 PO Box 535118 Atlanta, GA 30353-5118 14375 NW Science Park Drive Portland, OR 97229-5418 Tel: (503) 985-5953 Carhartt Incorporated $830,771 PO Box 600 5750 Mercury Drive Dearborn, MI 48121-0600 Tel: (313) 749-6681 Georgia Boot Rocky Brands $707,048 Security Chain Co. $661,928 Under Armour $647,873 Heater Corporation $507,352 All Sports Supply Inc $443,900 Browning $395,595 Diamondback/Raleigh $381,747 America New Balance Athletic Shoes $371,800 Easton Sports $366,288 Asics America Corporation $365,645 K2 Corporation $363,775 AMS $359,950 Dakine $345,067 Adidas Sales Inc $340,164 Federal Cartridge Company $336,242 Cannon Safe $335,412 Wolverine $332,647 Traeger Industries $322,554 Smith Sport Optics Inc. $298,636 Duofold/Hanesbrands Inc. $287,092 Madrona Watumull Inc. $269,182 Marmot Mountain LLC $231,554 Quiksilver Inc. $228,419 Seatile Seahawks $225,000 Brooks Sports Inc. $220,954 The petition was signed by Hal Smith, chief executive officer. G.I. JOE'S: Organizational Meeting to Form Panel on March 16 ------------------------------------------------------------ Roberta A. DeAngelis, Acting United States Trustee for Region 3, will hold an organizational meeting on March 16, 2009, at 1:30 p.m. in the bankruptcy case of G.I. Joe's Holding Corporation. The meeting will be held at J. Caleb Boggs Federal Building, 844 King Street, Room 5209 in Wilmington, Delaware. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. GAP INC: Moody's Withdraws 'Ba1' Corporate Family Rating -------------------------------------------------------- These ratings of Gap Inc. have been withdrawn: -- The Ba1 Corporate Family rating; -- The Ba1 Probability of Default Rating; -- The SGL-1 Speculative Grade Liquidity Rating. Moody's has withdrawn these ratings for business reasons. Moody's added that the ratings were withdrawn because this issuer has no rated debt outstanding. The last rating action on Gap Inc. was on February 5, 2007 when its corporate family rating was assigned at Ba1. GENERAL MOTORS: Hires Three Law Firms to Advise European Units -------------------------------------------------------------- Joseph Mapother at Bloomberg News reports that a GM Europe spokesperson said that General Motors Corp. and its German Adam Opel GmbH subsidiary have hired three law firms to advise on reorganization and insolvency options. Bloomberg relates that GM has hired Baker & McKenzie and Clifford Chance LLP to advise GM Europe, while the Opel spokesperson said that Wellensiek has been retained by the unit. The report quoted the spokesperson as saying, "For Opel, the primary reason is for advice on reorganizing." Bloomberg states that Carl-Peter Forster, GM's top executive in Europe, held talks with government officials in Berlin last week. According to the report, GM is offering as much as 50% of Opel to outside investors for EUR3.3 billion in public assistance. "The draft must be improved and clarified. We will help if the benefit for all people concerned is greater than the damage," the report quoted Chancellor Angela Merkel as saying. According to Bloomberg, Germany's Economy Minister Karl-Theodor zu Guttenberg will travel to the U.S. from March 15 to March 18 to discuss with GM executives on their plans for Opel. Minister Guttenberg, says Bloomberg will also meet with U.S. Treasury Secretary Timothy Geithner. Bondholders Doubt Viability Plan Can Save GM Citing a person familiar with the matter, John Hughes at Bloomberg News reports that GM bondholder representatives plan to tell the auto task force that the firm's viability proposal may not keep it out of bankruptcy. The source, according to Bloomberg, said that deep concessions are going to have to be made if GM is to remain in business. Nick Carey at Reuters relates that the task force interrogated GM's bondholders on the proposed terms of the debt-reduction deal. Reuters states that GM has been trying to complete deals with its bondholders and its major union to reduce some $28 billion in debt from its balance sheet to cut financing costs. Bloomberg says that the task force must decide by the end of March whether to give the firms as much as $21.6 billion more in aid or tip them into bankruptcy. The source said that the bondholders are discussing with the panel as to what additional steps the government can take and whether it can guarantee new debt, Bloomberg reports. Reuters quoted White House spokesperson Robert Gibbsas saying, "All the stakeholders involved are going to have to give in order to ensure that the restructuring takes place." Jim Flaherty Frets on Co.'s Possible Bankruptcy Reuters reports that Canadian Finance Minister Jim Flaherty is worried of General Motors Corp.'s possible bankruptcy even after receiving government aid. According to Reuters, Mr. Flaherty said in a news conference, "Of course it's a concern. It's a serious situation. That's why we've created a major stimulus package in the Canadian economy. This is not business as usual." Reuters relates that Mr. Flaherty said that mentioned troubles in Canada's media and steel industries as evidence of the severity of the economic situation. 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. GM's common stock was considered the stock market's bellwether for many years, hence the saying "What's good for GM is good for America." * * * 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: Canadian Union Agrees to Concessions With Firm -------------------------------------------------------------- Sharon Terlep at The Wall Street Journal reports that the Canadian Auto Workers union has agreed to sweeping concessions with General Motors Corp., after the company warned that it might stop operations in Canada. "There is no joy on our side of the bargaining table. This is the furthest thing we wanted to do, but the alternatives are worse.... We had to keep pace to make sure there were no reasons to move work from our plants to the United States. This will cause real hardships to are members and their families," WSJ quoted CAW President Ken Lewenza as saying. According to WSJ, CAW's agreement to the concessions cleared the way for GM to secure loans from the Canadian government. WSJ relates that the Canadian government had said that it wouldn't consider giving financial assistance to GM unless the union would agree to concessions. WSJ states that GM said it needs at least $6 billion in financial assistance from other governments this year in addition to up to $16.6 billion in additional aid from the U.S. WSJ notes that the new agreed concessions freezes wages for current employees and pension payments for retirees. It gives workers less time off and forgoes cost-of-living pay increases, says the report. Under the new deal, retirees will make co- payments for health care, the report states. GM's hourly workers in Canada will vote on the concessions this week, says WSJ. A majority of 10,000 votes for the concessions is required, according to the report. GM said in a statement that the labor deal will make its Canadian units more competitive and will help the firm execute its global viability plan. 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. GM's common stock was considered the stock market's bellwether for many years, hence the saying "What's good for GM is good for America." * * * 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. GREAT REPUBLIC LIFE: A.M. Best Affirms & Withdraws Weak Ratings --------------------------------------------------------------- A.M. Best Co. has affirmed the financial strength rating of C- (Weak) and issuer credit rating of "cc" of Great Republic Life Insurance Company (Great Republic) (Seattle, WA). The outlook for both ratings is negative. Consequently, A.M. Best has assigned a category NR-4 (Company Request) to the FSR and an "nr" to the ICR in response to a request from Great Republic's management to be removed from A.M. Best's interactive rating process. The rating affirmations reflect Great Republic's weak risk-based capital position and the challenges the company faces in managing its run-off long-term care business. Through the first nine months of 2008, Great Republic's capital and surplus increased as a result of a release of reserves. However, future business prospects remain uncertain for companies such as Great Republic that are competing against much larger and well-capitalized insurers for business and capital resources in a difficult economic environment. GSCP LP: Projected Low Earnings Cue Moody's Junk Rating from 'B3' ----------------------------------------------------------------- Moody's Investors Service has downgraded the senior debt rating of GSCP (NJ), L.P., to Caa1 from B3. The downgrade was driven by the rating agency's expectation for lower earnings and constrained financial flexibility resulting from devaluations of structured credit products and other funds managed by GSC. GSC is the borrowing entity of GSC Group, an asset management firm specializing in credit-based alternative investment strategies. The outlook on the rating remains negative. Moody's VP/Senior Credit Officer Matthew Noll commented, "GSC's credit profile depends on managed assets within its funds holding reasonable valuations; however, market weakness is expected to continue to pressure these valuations for the foreseeable future." Moody's noted that GSC has written down a significant number of its investments in its recovery (distressed private equity) and European mezzanine funds, as well as its US and European corporate credit CLOs to about half the values held at the beginning of 2008. In addition, the company's distributions from its stronger performing funds have been lower than anticipated due to market conditions for asset sales. "GSC is substantially dependent on realizing distributions from its funds for the debt service of its bank loan", commented Mr. Noll, "and its prospects for raising capital from investors for additional new funds will be a major challenge for the foreseeable future". Moody's added that GSC's bank agreement, which was amended in early 2008, subjects the company to more restrictive financial covenants in 2009 and thereafter; as a result, it is quite possible that the company will breach its covenants later this year. Furthermore, the rating agency believes that GSC's liquidity and cash flow will also be challenged over the next 12 months by a mandatory amortization of the bank loan and required equity contributions to its investment funds. GSC's rating outlook could be moved back to stable if the fund distributions and its management fee income stabilize in 2009, if there is no further deterioration in the performance of GSC's financial and liquidity profile, and if the company demonstrates successful capital raising for future alternative investment funds and executes on fund initiatives already in place. On the other hand, the rating agency said GSC could be further downgraded if distributions from its recovery funds were meaningfully below expectations, if higher corporate defaults would significantly impact the fees and distributions from GSC's corporate credit CLOs, if there is increased likelihood that the ABS CDOs will be forced to liquidate (which would further reduce GSC's management fees), or if the bank loan is not amended and the company breaches its financial covenants. GSC Group is a privately-held asset management firm focused on credit-based alternative investments for institutions and high net worth individuals. Headquartered in Florham Park, New Jersey, GSC's assets under management were $18 billion as of September 30, 2008. The last rating action on GSC was on April 17, 2008 when the company's senior debt rating was downgraded to B3 from B2 with a negative outlook. HALLWOOD ENERGY: Gets Interim Okay to Use Cash Collateral --------------------------------------------------------- Hallwood Energy, L.P., has been granted authority, on an interim basis, to use cash collateral. A final hearing on the use of cash collateral will be held on April 1, 2009. The ability to use cash collateral will allow Hallwood Energy to continue to operate for at least the next 30 days. In addition to being granted use of cash collateral, several other of the company's first day motions were granted, including its ability to continue to pay its employees and their benefits. The Board of Directors of Hallwood Energy Management, LLC, the general partner of Hallwood Energy, authorized the filing of Chapter 11 in order to protect its assets and maximize value for the benefit of creditors. Hallwood Energy intends to emerge from the Chapter 11 process stronger and more financially viable in the current environment. In addition, Hallwood Energy has selected James R. Latimer, III, of Blackhill Partners, LLC, as its Chief Restructuring Officer. Hallwood Energy intends to continue its relationship with FEI Shale, L.P., a subsidiary of Talisman Energy, under the agreement entered into by the companies in June, 2008. HILL SWIM: In Foreclosure; Owes Over $9,000 in Property Taxes ------------------------------------------------------------- Justin McClelland at Western-Star reports that Trustee Mike Shaffer said that the Hill Swim Club is in foreclosure. According to the Turtlecreek county auditor's Web site, the Hill Swim Club owes more than $9,000 in unpaid property taxes. Western-Star states that the township can file a lean against the property to try and recover their expenses for maintaining the site from whoever buys it. Western-Star relates that caring for the dilapidated swimming pool without incurring taxpayer expense has become a concern for Turtlecreek Twp. trustees. The report says that Hill Swim Club has fallen into disrepair after its owners, the Hunters, declared bankruptcy. Citing Mr. Shaffer, Western-Star states that the pump station of the club is disintegrating and while the fence line is secure, access to the pool is possible. Mr. Shaffer, according to the report, said that part of the main building is accessible but he was unsure when the pool had closed, although he estimated it had been at least two to three years ago. Western-Star reports that the township has received several complaints of tall grass and stagnant water around the pool and Mr. Shaffer said that the health department has been trying to address the stagnant water issue. "I don't want the township to have to be responsible for the maintenance of the property. But I don't want a nuisance in the area, either," Western-Star quoted trustee Dan Jones as saying. "It's not a bad piece of property. If it gets cleaned up, it would be a nice place for a house," Mr. Shaffer said, according to Western-Staff. The Hunter's Hill Swim Club operated a private swim club on Pearl Drive on the border of Turtlecreek and Franklin townships. Its grounds include a large, empty pool, an office and changing facility. The Philadelphia Court of Bankruptcy's records say that the pool voluntarily filed for Chapter 7 bankruptcy on May 17, 2004. HAROLD TREGO: Meeting to Form Creditors' Panel on March 17 ---------------------------------------------------------- Roberta A. DeAngelis, Acting United States Trustee for Region 3, will hold an organizational meeting on March 17, 2009, at 2:00 p.m. in the bankruptcy case of Harold E. Trego Construction, Inc. The meeting will be held at the Office of the United States Trustee, 833 Chestnut Street, Suite 501, in Philadelphia, Pennsylvania. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. Based in Exton, Pennsylvania, Harold E. Trego Construction, Inc., filed for bankruptcy on February 3, 2009 (Bankr. E.D. Pa. Case No. 09-10771). Judge Jean K. Fitzsimon presides over the case. Marc D. Collazzo, Esq., at Armstrong & Carosella, P.C., in West Chester, Pennsylvania, presides over the case. The Debtor disclosed $500,001 to $1,000,000 in assets and $1,000,001 to $10,000,000 in debts when it filed for bankruptcy. HCA INC: Bank Debt Continues Slide in Secondary Market Trading -------------------------------------------------------------- Participations in a syndicated loan under which HCA Inc. is a borrower traded in the secondary market at 80.63 cents-on-the- dollar during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 3.83 percentage points from the previous week, the Journal relates. The loan matures on November 6, 2013. HCA Inc. pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB rating. 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. HOMEGOLD FINANCIAL: Jack Sterling Guilty of Deceiving Investors --------------------------------------------------------------- Jeffrey Collins at The Associated Press reports that the South Carolina jury has found Jack Sterling, the former HomeGold Financial Inc. chairperson, guilty of securities fraud. The AP relates that the Hon. Edward Cottingham sentenced Mr. Sterling to five years in prison for his role in a bankruptcy that cost investors about $275 million. Prosecutors, according to The AP, had asked the court for a maximum 10-year sentence. The report states that Mr. Sterling's lawyers asked Judge Cottingham to let their client serve at least part of his sentence in home confinement, pointing out the jury's split verdict. "They clearly separated Jack Sterling from the other defendants," the report quoted Bart Daniel, one of the defense lawyers, as saying. Judge Cottingham said that some of Mr. Sterling's actions in the years before HomeGold Financial's bankruptcy in 2003 were troubling. The report quoted Judge Cottingham as saying, "Even as the doors were getting ready to close ... they were still accepting money from unsophisticated investors." According to The AP, Mr. Sterling was acquitted of a conspiracy charge. Judge Cottingham let Mr. Sterling remain free during any appeal as long as he put up a new $100,000 bond, says The AP. The report states that Mr. Daniel said that he wanted to review the trial transcript before deciding whether to appeal. The AP relates that the split verdicts and a note from jurors asking whether they could find Mr. Sterling "guilty of severe recklessness," appeared to indicate they decided that the former HomeGold Financial executive deceived investors by withholding information about bad decisions he made trying to save the company and its subsidiary, Carolina Investors. The AP states that the jurors didn't appear to think that Mr. Sterling lied directly to them or conspired with other executives to keep them in the dark. The AP relates that Carolina Investors was a successful small company that started in the 1960s by making small loans to people to purchase cemetery plots until it was taken over by HomeGold Financial in 1995. According to The AP, HomeGold Financial used the money from Carolina Investors to make high-risk mortgage loans nationwide. That market, says the report, began struggling in 1998. Within four years, HomeGold Financial owed more to Carolina Investors depositors than the company was worth, the report states. HomeGold Financial Inc. originated and sold residential mortgages to homebuyers with credit problems. HomeGold Financial and HomeGold Inc. filed for chapter 11 protection on March 31, 2003 (Bankr. D. S.C. Case No. 03-03865). William E. Calloway, Esq., at Robinson, Barton, McCarthy, Calloway & Johnson, P.A., represented the Debtors. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. HUDSON PRODUCTS: Moody's Gives Negative Outlook; Holds B1 Rating ---------------------------------------------------------------- Moody's Investors Service has changed the rating outlook on Hudson Products Holdings, Inc., to negative from stable. In a related action, Moody's affirmed all ratings on Hudson including the B1 corporate family rating and Ba3 ratings on the senior secured bank credit facility. The change in rating outlook reflects Moody's view that Hudson is facing a cyclical downturn, notably in North American end-markets, at a time when its financial leverage is considered elevated for the rating category. The negative outlook reflects Moody's belief that ongoing project delays and the slowing of new order trends will continue over the near term as capital spending plans of key customers are reconsidered in light of the precipitous drop in the price of oil, reduced demand for refined products globally and challenging credit market conditions. This shift in capital spending trends is expected to weigh on Hudson's operating margins and result in a modest decline in earnings during 2009. Accordingly, Moody's no longer anticipates that earnings growth will drive the de- leveraging of the balance sheet and cautions that leverage would not be sustainable at the current rating if the company's adequate liquidity profile were to deteriorate during 2009. The ratings outlook incorporates the expectation that Hudson will generate positive cash flow in 2009, increase cash balances during the year and maintain full availability under its revolver. Deviation from these expectations would likely lead to a ratings downgrade. These ratings were affirmed: -- B1 Corporate Family Rating; -- B1 Probability-of-default rating; -- Ba3 (LGD3, 30%) on the $30 million first lien revolving credit facility; and -- Ba3 (LGD3, 30%) rating on the $220 million first lien term loan B. The last rating action was on August 11, 2008 when the B1 corporate family rating was assigned. Hudson, headquartered in Sugar Land, Texas, is one of the world's leading heat transfer solutions companies providing air-cooled heat exchangers, axial-flow fans and related aftermarket hardware and support to the refinery, petrochemical, natural gas and power generation end-markets. Revenues for 2008 were $267 million HUGH BROOKS: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Hugh Lawrence Brooks Tammie Latheres Sims-Brooks 8336 Lakeshore Circle, #3824 Indianapolis, IN 46250 Bankruptcy Case No.: 09-02012 Chapter 11 Petition Date: February 26, 2009 Court: United States Bankruptcy Court Southern District of Indiana (Indianapolis) Judge: Frank J. Otte Debtor's Counsel: Eric C. Redman, Esq. Bator Redman Bruner Shive & Ludwig 151 N. Delaware St., Suite 1106 Indianapolis, IN 46204 Tel: (317) 685-2426 Email: ksmith@batorredman.com Total Assets: $289,830 Total Debts: $1,192,426 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/insb09-02012.pdf INDALEX HOLDING: Missed Interest Payment Cues Moody's 'D' Rating ---------------------------------------------------------------- Moody's Investors Service downgraded Indalex Holding Corp.'s probability of default rating to D from Ca while affirming all other ratings. The rating outlook remains negative. Moody's believes that Indalex did not make the interest payment on its $200 million 11.5% second priority senior secured notes, which was due on February 2, 2009, with a thirty-day grace period. Moody's deems a default to have occurred when an interest payment is not made by the end of a grace period, regardless of whether an Event of Default has been declared by note holders. The negative outlook reflects continued uncertainty regarding Indalex's viability as a going concern and the risk of a distressed exchange involving the notes or bondholder acceleration following the expiration of the grace period. These ratings were affected: -- Probability of Default Rating lowered to D from Ca -- Corporate Family Rating affirmed at Ca -- Senior Unsecured Note Rating affirmed at C (LGD 5; 75%) -- Speculative Grade Liquidity rating affirmed at SGL-4 -- Outlook remains negative The last rating action was on February 4, 2009, when the corporate family rating and probability of default ratings were downgraded to Ca from Caa2. Indalex Holding Corp. is an aluminum extruder that was acquired in 2006 by Sun Capital Partners from Honeywell International, Inc. Residential housing and transportation are the company's primary end markets. INDIANAPOLIS DOWNS: Moody's Downgrades Corporate Rating to 'Caa2' ----------------------------------------------------------------- Moody's Investors Service downgraded Indianapolis Downs, LLC's Corporate Family Rating and Probability of Default Rating to Caa2 from Caa1. Moody's also lowered the company's senior secured second lien notes to Caa2 from Caa1, and its third lien notes to Ca from Caa3. At the same time, Moody's assigned a B1 rating to Indianapolis Downs' existing $75 million delayed draw term loan and new $25 million revolving credit facility. The rating outlook is negative. This completes the review of Indianapolis Downs' ratings that commenced on November 3, 2008. The downgrade and negative outlook reflect Moody's heightened concern that Indianapolis Downs could develop issues with respect to liquidity and covenant compliance in late 2009 or early 2010 if it is unable to materially increase win per unit per day when its new racino facility opens in mid-March 2009. This is of particular concern given Moody's expectation that weak gaming demand conditions will continue -- and possibly get worse -- through 2009. An improvement in win per unit is also necessary for the company to succeed over the longer-term given its existing highly-leveraged capital structure. The B1 rating assigned to Indianapolis Downs' $100 million credit facility -- a relatively high rating compared to the company's Caa2 Corporate Family Rating -- acknowledges the credit facilities senior-most ranking in the capital structure, with a significant amount of effectively subordinated debt beneath it to satisfy the material amount of anticipated loss absorption to be realized by creditors of the firm. Ratings downgraded: -- Corporate Family rating to Caa2 from Caa1 -- Probability of Default rating to Caa2 from Caa1 -- Senior secured second lien notes to Caa2 (LGD4, 55%) from Caa1 (LGD4, 53%) -- Senior secured third lien notes to Ca (LGD6, 94%) from Caa3 (LGD6, 92 %) Ratings assigned: -- $25 million senior secured first lien revolver expiring 2011 -- at B1 (LGD1, 5%) -- $75 million senior secured first lien term loan due 2011 -- at B1 (LGD1, 5%) Moody's last rating action for Indianapolis Downs was on November 3, 2008 when the company's Corporate Family Rating and Probability of Default Rating were downgraded to Caa1 from B3. Indianapolis Downs, LLC owns and operates Indiana Downs, a 180- acre pari-mutuel horse racing facility located about 25 miles southeast of Indianapolis, Indiana in Shelbyville, Indiana. INDIGO JOE'S: Files for Chapter 11 Bankruptcy Protection -------------------------------------------------------- Puget Sound Business Journal reports that Joe's Sports, Outdoor and More has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware. Joe's Sports listed $100 million to $500 million in assets and $100 million to $500 million in liabilities, Puget Sound states. Court documents say that Joe's Sports said it has 1,000 to 5,000 creditors. Puget Sound relates that Joe's Food owes its top 30 creditors about $12.77 million. Puget Sound says that those creditors include: -- Baja Motorsports, owed $1.164 million; -- Columbia Sportswear Co., owed $888,292; -- Carhartt Inc., owed $830,771; -- Georgia Boot Rocky Brands, owed $707,048; and -- Security Chain Co., owed $661,928. Steven Yoder, Esq., at Potter Anderson & Corroon LLP assists the company in its restructuring effort, according to Puget Sound. Puget Sound relates that Joe's Sports President and CEO Hal Smith blamed the declining retail economy for the company's capital crunch. Mr. Smith said in a statement, "This restructuring process will allow us time to address our capital challenges so that we can potentially emerge as an even stronger company with a firm financial position." According to Puget Sound, Joe's Sports said it secured $50 million of debtor-in-possession financing from Wells Fargo Retail Finance, and that the financing is sufficient to cover the company's expenses while it reorganizes. California-based Joe's Sports, Outdoor and More operates 30 large format stores under the name Indigo Joe's Food & Services, Inc., selling outdoor and sporting goods throughout the Northwest. Indigo Joe's, dba Indigo Joe's Sports Pub & Restaurant, filed for Chapter 11 bankruptcy protection on April 16, 2008 (Bankr. C.D. Calif. Case No. 08-14103). INSIGHT HEALTH: Refinancing Cues S&P's Rating Downgrade to 'CCC' ---------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its corporate credit and issue-level ratings on Lake Forest, California-based InSight Health Services Corp. by two notches. S&P lowered the corporate credit rating to 'CCC' from 'B-', and the rating outlook is negative. "This action reflects our opinion that, despite adequate near-term liquidity," said Standard & Poor's credit analyst Cheryl E. Richer, "the company has not gained sufficient momentum to position itself for a successful refinancing of its floating-rate notes, which mature in November 2011." After increasing for two successive quarters, EBITDA declined in the second fiscal quarter of 2009 (ended Dec. 31, 2008). "While this may, in part, be explained by seasonal weakness, as well as the extended holiday weekends," said Ms. Richer, "the recession may have contributed to the poor results." This added headwind to the already challenging task of turning around the business creates additional risk. INTERPUBLIC GROUP: S&P Gives Stable Outlook; Affirms 'B+' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised the rating outlook on Interpublic Group of Companies Inc. to stable from positive. All ratings on the company, including the 'B+' corporate credit rating, were affirmed. "The outlook change reflects our concern that a prolonged recession and its effect on client budgets could exert pressure on Interpublic's revenue, EBITDA, cash flow, and credit measures, postponing upgrade potential until an economic recovery begins to materialize," said Standard & Poor's credit analyst Heather Goodchild. Interpublic achieved strong business wins, organic revenue growth, EBITDA margin expansion, and credit measure gains during 2008, but organic revenue contracted 2.2% in the fourth quarter, and S&P has become more concerned about deterioration in the economy and demand for advertising and marketing services in 2009. That said, cost reductions since 2006 and over the course of 2008 aided margin expansion and an increase in discretionary cash flow in the 2008 fourth quarter. Liquidity remains strong, conferring the ability to meet 2009 and 2010 maturities from a combination of discretionary cash flow and cash balances. The 'B+' rating reflects Interpublic's broad business mix of traditional advertising and marketing services, progress with profitability and cash flow measures in 2008, and S&P's concern about the severity of recessionary pressures (including the potential consequences of increased bad debt expense and possible liability exposure to media commitments for financially stressed clients). The company's good trend of business wins and organic revenue growth through much of 2008 and its very strong cash balances are additional considerations. JAMES CROMWELL: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: James Fitzgerald Cromwell Grace Chouinard Cromwell 6627 Alicant Drive Sugar Land, TX 77479 Bankruptcy Case No.: 09-31276 Chapter 11 Petition Date: February 26, 2009 Court: United States Bankruptcy Court Southern District of Texas (Houston) Debtor's Counsel: Margaret M. McClure, Esq. Law Office of Margaret M. McClure 909 Fannin, Suite 3810 Houston, TX 77010 Tel: (713) 658-0334 Fax: (713) 659-1333 Email: McClureMar@Aol.Com Total Assets: $2,568,734 Total Debts: $3,454,427 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/txsb09-31276.pdf JAY HOSTETTER: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Jay Hostetter 6140 Johnston Road Albany, NY 12203 dba Jay's Mobil Bankruptcy Case No.: 09-10557 Chapter 11 Petition Date: February 26, 2009 Court: United States Bankruptcy Court Northern District of New York (Albany) Judge: Robert E. Littlefield, Jr. Debtor's Counsel: Francis J. Brennan, Esq. Nolan & Heller, LLP 39 North Pearl Street Albany, NY 12207 Tel: (518) 449-3300 Email: fbrennan@nolanandheller.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/nynb09-10557.pdf JOSEPH PREBUL: Trustee to Reveal Possible Bidders for Dealerships ----------------------------------------------------------------- Lauren Gregory at Chattanooga Times Free Press reports that federal bankruptcy trustee Jerrold Farinash said that he will disclose this week which of 11 possible bidders will take over former auto mogul Joseph Prebul's dealerships in Chattanooga and Dalton. According to Chattanooga Times, Mr. Prebul filed for Chapter 7 bankruptcy protection for his Chapman Road, Brainerd Road, and Dalton-based dealerships in February, after he was charged with 11 counts of wire fraud for defrauding his brother-in-law in New York out of $7 million. The Hon. John C. Cook at the U.S. Bankruptcy Court Eastern District of Tennessee granted Mr. Farinash permission to keep the dealerships open until March 31, Chattanooga Times relates. Chattanooga Times states that Mr. Farinash said that he has been operating on the $207,000 that the court originally budgeted for the businesses but has collected additional revenue from day-to- day operations. Mr. Farinahs, Chattanooga Times reports, said that he will ask the court to put additional money into the businesses at a hearing this week. Mr. Farinash will also sell the "blue sky" rights to the dealerships and file paperwork related to the sale, according to Chattanooga Times says. Chattanooga Times relates that the deadline for bidders was last Monday. Offers from dealership owners in Chattanooga and Dalton were still rolling in as recently as Wednesday, the report states, citing Mr. Farinash. JOURNAL REGISTER: Proposes Management Bonuses if 450 More Jobs Cut ------------------------------------------------------------------ Journal Register Company hopes to emerge from bankruptcy in July 2009, with a de-levered balance sheet, pursuant to a pre-packaged Chapter 11 plan that contemplates zero recovery for unsecured creditors. It also aims to reduce labor costs by scrapping collective bargaining agreements with four unions. Management also intends to eliminate many non-daily publications and several newspapers, with the goal of making the company a leaner, more profitable enterprise. To do that, the company, however, believes it must provide 31 officers and key employees with incentives, citing that these employees are being asked to take on considerable additional responsibilities during a "challenging period". The company has acknowledged that they cannot provide bonuses to employees to compensate them for their enhanced responsibilities consistent with past practice. The company is thus, seeking approval from the U.S. Bankruptcy Court for the Southern District of New York of a management incentive plan. Pursuant to the MIP, the participants will receive bonuses if certain performance objectives are met -- minimum EBITDA, Chapter 11 emergence, and headcount reductions. After terminations of 140 "full time equivalent positions" were completed by December 31, 2008, the 31 "key employees" were paid a bonus aggregating $450,000. The MIP provides: -- If additional reductions in force -- totaling 450 full time equivalent positions -- are completed on or prior to March 31, 2009, the Key Employees will be entitled to an additional bonus, which may total $486,000, with an average bonus $15,700 per Key Employee. -- Key Employees will receive a bonus if "many non-daily publications and several daily publications" slated for elimination in the Oct. 15, 2008 business plan are shut in a timely manner. A maximum aggregate amount equal to $486,000 may be payable to the Key Employees if this objective is met by February 28, 2009. -- Key Employees will receive a third bonus of $486,000 if a minimum of $16 million of EBITDA is met for the fourth quarter of 2008 and the first quarter of 2009. -- Upon consummation of a Chapter 11 plan of reorganization of JRC, 10 Key Employees will be eligible to receive a bonus aggregating $253,000. Rachel C. Strickland, Esq., at Willkie Farr & Gallagher LLP, proposed counsel, in justifying the MIP, noted that, aside from the added responsibilities, the Key Employees continue to work against the backdrop of uncertainty of their continued employment and without assumed employment or severance agreements. Objections Not everyone agrees that the proposed bonuses or incentives are necessary. An anonymous employee of the Delaware County PA Times Newspaper said that the proposed $1.7 million in bonuses should be denied. The employee, who declined to divulge his name for fear of retribution, said that the bonuses are not justified given that some employees have been fired and the company is scrapping contracts with unions to reduce pay and benefits. The Attorney General for the State of Connecticut also objects, saying that the Motion cannot be properly evaluated under any standard because it lacks certain relevant information. "The Debtors should provide the names and respective positions of the 31 Key Employees so that a determination can be made as to which Key Employees are insiders," Attorney General Richard Blumenthal said. With respect to the EBITDA Objective, there is insufficient information to determine whether the earnings benchmark is reasonable and deserving of increased compensation or whether the EBITDA threshold is set so low that the bonuses are virtually guaranteed to be paid, the Attorney General added. Noting that there is only one month left in the six-month time period that will determine whether the EBITDA Objective has been met, the Attorney General says that if its true objective is motivation for future performance, it is difficult to see how bonuses linked to tasks that have already been completed or events that have already occurred will fulfill that function. "The Debtors' Plan provides that general unsecured creditors and equity holders will receive nothing," the Attorney General points out. "In the short time between the Petition Date and confirmation, it is highly unlikely that the Key Employees will be able to effect any tangible improvement to the treatment of unsecured creditors. In fact, there is a greater likelihood that the unsecured creditors will benefit if the $1,700,000 in proposed bonuses remains in the estate." About Journal Register Yardley, Pennsylvania-based Journal Register Company (PINKSHEETS: JRCO) -- http://www.JournalRegister.com-- owns 20 daily newspapers, more than 180 non-daily publications and operates over 200 individual Web sites that are affiliated with the Company's daily newspapers, non-daily publications and its network of employment Web sites. All of the Company's operations are strategically clustered in six geographic areas: Greater Philadelphia; Michigan; Connecticut; Greater Cleveland; and the Capital-Saratoga and Mid-Hudson regions of New York. The Company also owns JobsInTheUS, a network of 20 employment Web sites. The Company, along with its affiliates, filed for Chapter 11 bankruptcy protection on February 21, 2009 (Bankr. S.D. N.Y. Case No. 09-10769). Marc Abrams, Esq., Rachel C. Strickland, Esq., Shaunna D. Jones, Esq., and Jennifer J. Hardy, Esq., at Willkie Farr & Gallagher LLP, assist the company in its restructuring effort. The company's financial advisor is Lazard Freres & Co.. Its restructuring advisor is Conway, Del Genio, Gries & Co., LLC. Robert P. Conway is the Company's chief restructuring officer. The Company listed $100 million to $500 million in total assets and $500 million to $1 billion in total debts. JOURNAL REGISTER: "Golden Parachute" for Chief Exec. Questioned --------------------------------------------------------------- Journal Register Company has filed before the U.S. Bankruptcy Court for the Southern District of New York a proposal to pay $1.7 million in bonuses to 31 officers and key employees if certain objectives in their business plan are achieved. These objectives include the termination of additional 450 full time positions, an EBITDA of at least $16 million for the fourth quarter of 2008 and first quarter of 2009, and a Chapter 11 emergence without any specified deadline. A footnote in the motion filed in connection with the management incentive plan says that James Hall, the Debtors' Chief Executive Officer, is not a participant in the MIP. The Chapter 11 plan support agreement signed by JRC and JPMorgan Chase Bank, N.A., agent for certain secured lenders, mention a settlement payment and other payments provided for in an agreement signed by JRC and Mr. Hall a month before the bankruptcy filing. The Plan Support Agreement, which forms the basis of the secured lenders' support for JRC's Chapter 11 plan, provides that unsecured creditors and existing equity holders will have zero recovery, and the secured lenders will get the shares of stock of the reorganized JRC. The Chapter 11 Plan also contains that the Consenting Lenders (i.e. the lenders who signed the Plan Support Agreement), will elect the five seats of the board of directors of reorganized JRC, which board will elect the CEO. As for Mr. Hall, the existing CEO, the Plan Support Agreement provides: The Consenting Lenders and the Existing Agent shall not, as long as the Plan Support Agreement is in effect, initiate, participate or cooperate in any manner in any proceeding to avoid or seek disgorgement of, under chapter 5 of the Bankruptcy Code or otherwise, the "Settlement Payment" and the other payments provided for in that certain Transition and Separation Agreement between JRC and James Hall, dated as of January 20, 2009. The Separation Agreement, while mentioned in the Plan Support Agreement, was not mentioned in the Chapter 11 and Disclosure Statement filed with the Bankruptcy Court. "Meanwhile, before skipping out, CEO James Hall worked out a potentially lucrative departing bonus with the company's major lender. He started cashing out before he filed the company's bankruptcy papers - and secured a promise from lenders not to go after him later for the money," Paul Bass, wrote in a Feb. 26 article, titled "CEO Flies Off With Golden Parachute," to describe the transaction. An anonymous employee of the Delaware County PA Times Newspaper cited the Bass Article in a letter sent to Judge Allan Gropper. The letter asked Judge Gropper to deny approval of the $1.7 million in bonuses to executives. "I don't see how this pay for lack of performance can justify this compensation-they should be fired on the spot and get the same bonus I'd get for them firing me-nothing," the Employee said. He noted that while high ranking executives get bonuses, the "new restructuring boss" is going to scrap the collective bargaining agreements with union represented employees and cut their pay and benefits. He noted that in Europe, they get rid of all vestiges of the management that created the problem and not expect the employees to pay the price. The Employee declined to divulge his name for fear of retribution. JRC has filed with the Bankruptcy Court its statement of financial affairs, which requires a list of payments to creditors during the 90-days preceding the petition date (3b), and payments to creditors who are insiders during the one-year period preceding the petition date (3c). The list provides that Mr. Hall received $112,500 in salary on Feb. 1, 2008, and after that, $56,250 a month until December 15, 2008. Mr. Hall received payments totaling $873,229 for his salaries and business expenses during the one-year period ending Dec. 15, 2008. The list does not provide any info on payments to officers after December 2008. Public companies are required by the Securities and Exchange Commission to report in Form 8-K, a "current report" to announce major events that shareholders should know about, including under 5.02, "Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers". JRC did not disclose its entry into the Hall Separation Agreement with the SEC. Copies of the SOFA and the attached schedules are available at: http://bankrupt.com/misc/JRC_SOFA.pdf http://bankrupt.com/misc/JRC_SOFA3b.pdf http://bankrupt.com/misc/JRC_SOFA3c.pdf A copy of the Plan Support Agreement is available at: http://bankrupt.com/misc/JRC_PlanSupportPact.pdfLINK About Journal Register Yardley, Pennsylvania-based Journal Register Company (PINKSHEETS: JRCO) -- http://www.JournalRegister.com-- owns 20 daily newspapers, more than 180 non-daily publications and operates over 200 individual Web sites that are affiliated with the Company's daily newspapers, non-daily publications and its network of employment Web sites. All of the Company's operations are strategically clustered in six geographic areas: Greater Philadelphia; Michigan; Connecticut; Greater Cleveland; and the Capital-Saratoga and Mid-Hudson regions of New York. The Company also owns JobsInTheUS, a network of 20 employment Web sites. The company, along with its affiliates, filed for Chapter 11 bankruptcy protection on February 21, 2009 (Bankr. S.D. N.Y. Case No. 09-10769). Marc Abrams, Esq., Rachel C. Strickland, Esq., Shaunna D. Jones, Esq., and Jennifer J. Hardy, Esq., at Willkie Farr & Gallagher LLP, assist the company in its restructuring effort. The company's financial advisor is Lazard Freres & Co.. Its restructuring advisor is Conway, Del Genio, Gries & Co., LLC. Robert P. Conway is the Company's chief restructuring officer. The Company listed $100 million to $500 million in total assets and $500 million to $1 billion in total debts. JOURNAL REGISTER: Shareholder R. Freeman Wants to Probe Finances ---------------------------------------------------------------- The Associated Press relates that Journal Register Co. shareholder Richard Freeman has asked the court to let him examine the company's finances and to let him see a "transition and separation agreement" with CEO James Hall that hasn't been publicly disclosed. According to court documents, Mr. Hall signed the agreement on January 20, but remained CEO on February 20, when he signed an affidavit in support of the bankruptcy filing. Journal Register is seeking the court's permission to appoint Robert Conway as chief restructuring officer. Mr. Freeman said that he's concerned that Mr. Hall might have been given a "golden parachute", a substantial severance money, The AP states. "The shareholders are being asked to take it on the chin and lose their equity when the CEO, or former CEO, is inflating his golden parachute," the report quoted Mr. Freeman as saying. The AP reports that Journal Register's next bankruptcy hearing will be on March 17. About Journal Register Yardley, Pennsylvania-based Journal Register Company (PINKSHEETS: JRCO) -- http://www.JournalRegister.com-- owns 20 daily newspapers, more than 180 non-daily publications and operates over 200 individual Web sites that are affiliated with the Company's daily newspapers, non-daily publications and its network of employment Web sites. All of the Company's operations are strategically clustered in six geographic areas: Greater Philadelphia; Michigan; Connecticut; Greater Cleveland; and the Capital-Saratoga and Mid-Hudson regions of New York. The Company also owns JobsInTheUS, a network of 20 employment Web sites. The Company, along with its affiliates, filed for Chapter 11 bankruptcy protection on February 21, 2009 (Bankr. S.D. N.Y. Case No. 09-10769). Marc Abrams, Esq., Rachel C. Strickland, Esq., Shaunna D. Jones, Esq., and Jennifer J. Hardy, Esq., at Willkie Farr & Gallagher LLP assist the company in its restructuring effort. The company's financial advisor is Lazard FrSres & Co.. Its restructuring advisor is Conway, Del Genio, Gries & Co., LLC. Robert P. Conway is the company's chief restructuring officer. The company listed $100 million to $500 million in assets and $500 million to $1 billion in debts LAWRENCE-MCFADDEN: Meeting to Form Creditors' Panel on March 13 --------------------------------------------------------------- Roberta A. DeAngelis, Acting United States Trustee for Region 3, will hold an organizational meeting on March 13, 2009, at 10:00 a.m. in the bankruptcy case of The Lawrence-McFadden Co. The meeting will be held at the Office of the United States Trustee, 833 Chestnut Street, Suite 501, in Philadelphia, Pennsylvania. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. LEAR CORP: Trading in Bank Debt Continues Slide; Now Near 70% Off ----------------------------------------------------------------- Participations in a syndicated loan under which Lear Corp. is a borrower traded in the secondary market at 31.17 cents-on-the- dollar during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 3.40 percentage points from the previous week, the Journal relates. The loan matures on March 29, 2012. Lear Corp. pays 250 basis points above LIBOR to borrow under the facility. The bank debt is not rated. Syndicated loans of other auto parts suppliers also trade at substantial discount in the secondary market during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. Participations in a syndicated loan under which Visteon Corp. is a borrower traded at 16.07 cents-on-the-dollar, a drop of 1.64 percentage points from the previous week. The loan matures on May 30, 2013. Visteon pays 300 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's B- rating. Dana Corp. bank debt traded in the secondary market at 28.71 cents-on-the-dollar, a drop of 1.71 percentage points from the previous week. The loan matures on January 31, 2015. Dana Corp. pays 375 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's B+ rating. Accuride Corp. bank debt traded at 62.00 cents-on-the-dollar, a drop of 5.60 percentage points from the previous week. The loan matures on January 6, 2012. Accuride pays 225 basis points above LIBOR to borrow under the facility. The bank debt is not rated by Moody's. It carries a junk rating by Standard & Poor's. About Lear Corp. Based in Southfield, Michigan, Lear Corp. is a global automotive supplier, conducting business in two product operating segments: seating and electrical and electronic. The seating segment includes seat systems and the components. The electrical and electronic segment includes electrical distribution systems and electronic products, primarily wire harnesses, junction boxes, terminals and connectors, various electronic control modules, as well as audio sound systems and in-vehicle television and video entertainment systems. The assembly process with respect to the electrical and electronic segment is performed in low-cost labor sites in Mexico, Honduras, the Philippines, Eastern Europe and Northern Africa. Lear has divested substantially all of the assets of its interior segment, which included instrument panels and cockpit systems, headliners and overhead systems, door panels, flooring and acoustic systems and other interior products. * * * As reported by the Troubled Company Reporter on January 30, 2009, Lear Corp. had approximately $1.6 billion in cash and cash equivalents as of December 31, 2008, providing more than adequate resources to satisfy ordinary course business obligations, according to the Company. Lear had $6.8 billion in total assets, and $3.5 billion in reported debt as of December 31, 2008. In January, Moody's Investors Service lowered the Corporate Family and Probability of Default ratings of Lear, to Caa2 from B3. In a related action, the rating of the senior secured term loan was lowered to Caa1 from B2, and the rating on the senior unsecured notes was lowered to Caa2 from B3. The ratings remain on review for further possible downgrade. Standard & Poor's Ratings Services also lowered its corporate credit rating on Lear to 'B-' from 'B'. At the same time, S&P also lowered its issue-level ratings on the company's debt. The ratings remain on CreditWatch, where they had been placed with negative implications on Nov. 13, 2008. LEHMAN BROTHERS: Elliott Associates May Force Hedging ----------------------------------------------------- Lehman Brothers Holdings Inc. says that in the ordinary course, it entered into hedging transactions aimed to reduce the risk associated with market fluctuations that could cause the value in certain prepetition derivative contracts to deteriorate. LBHI had 900,000 pre-bankruptcy derivative contracts. LBHI in late January asked Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York to grant first priority liens to certain broker dealers in cash, securities, and other collateral that will be posted in connection with Institutional Futures Account Agreements, Prime Brokerage Account Agreements, and other related agreements that the Debtors may enter into with the Broker Dealers. The official committee of unsecured creditors objected to the Motion, noting that it "does not contemplate any Committee or court oversight with respect to the hedging transactions." Other parties including Elliott Associates LP also moved for the denial of the proposal to the extent LBHI intends to utilize any of their securities or bonds as collateral in the proposed hedging transactions. The Debtors, Elliott adds, have failed to disclose: (a) the current value of the derivatives to be preserved, (b) the value of each Debtor's assets to be put at risk by being pledged to hedge derivative contracts, and (c) the types of Hedging Transactions and documents the Debtors will enter into for each Debtor. Elliott said that while it "sympathizes with the Debtors' desire to have the flexibility to lock in gains in their open in- the-money derivative positions in certain circumstances" it firmly believes that the Committee needs to be involved in the process to ensure that the Debtors' stakeholders' interests are protected. Elliott holds public debt of LBHI, open trade positions with Lehman Commercial Paper Inc., is party to derivative contracts with Lehman Brothers Commodity Services and Lehman Brothers Special Financing, and as a result, is a substantial creditor of such Debtors. In a document submitted to the Court on March 4, 2009, Elliott complains that despite the urgency cited by Lehman in its Hedging Motion, it subsequently adjourned the hearing on the Motion to March 11 because LBHI and the Committee could not agree on what, if any, oversight responsibilities the Committee would have over the Hedging Transactions. "In other words, while the Debtors admitted in the Hedging Motion that they need to enter into Hedging Transactions to avoid risk and to preserve the value of their derivatives contracts, they have risked that very value rather than allow the Committee to have an effective ability to monitor and approve/disapprove Hedging Transactions," says counsel, Martin J. Bienenstock, Esq., at Dewey & Leboeuf LLP. In the meantime, there is a complete lack of information available to the Debtors' stakeholders concerning the value of the derivative contracts, how that value relates to the overall value of the Debtors' estates and the types of Hedging Transactions proposed by the Debtors, Mr. Bienenstock points out. Creditors, he says, are left to make educated guesses about how much of the estates' property has been put at risk, or perhaps permanently lost, on account of the Debtors' delay in obtaining Court permission to enter into Hedging Transactions in an effort to avoid Committee oversight. Accordingly, if the Debtors adjourn the Hedging Motion again or refuse to cooperate with the Committee, Elliott will file an emergency motion requesting the Court to grant the Committee the authority to direct the Debtors to enter into Hedging Transactions and the responsibility of overseeing such Transactions, Mr. Bienenstock tells the Court. "If the Debtors determine to go forward with an appropriate protocol with the Committee, the Debtors should prioritize hedging positions in those products (such as rates and commodities) which are not directly correlated with the "cash" credit positions elsewhere in the estate (such as corporate loans, bonds and commercial real estate)." About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers led in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offered a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman filed for chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16 (Case No. 08-13600). Several other affiliates followed thereafter. Lehman Brothers Finance AG, also known as Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court in Manhattan on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., listed estimated assets of more than US$1 billion and estimated liabilities of more than US$1 billion. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the United States District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act in the case captioned Securities Investor Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV- 8119 (GEL). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI Barclays Bank Plc has agreed, subject to U.S. Court and relevant regulatory approvals, to acquire Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units of Lehman Brothers Holdings, Inc., which has filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion ($33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Alvarez & Marsal Queries Barclays on Funds ----------------------------------------------------------- The Financial Times reported that Lehman Brothers Holdings Inc.'s liquidator asked Barclays Plc to explain what happened to $3.3 billion in bonus money and other liabilities acquired from the failed U.S. bank, Steven McPherson of Bloomberg reported. Bloomberg relates that on Feb. 19 Bryan Marsal, Lehman's chief executive officer and head of Alvarez & Marsal, the firm running the liquidation, wrote to Barclays asking about the funds. Mr. Marsal estimated that Barclays paid only $700 million of $2 billion in bonuses and severance set aside for transferred employees, the newspaper said. According to the source, On February 23, Jonathan Hughes, general council of Barclays Capital, responded, saying his company was open to discussion, but rejected any change to the original takeover agreement, the report said, citing people close to the situation. "Alvarez & Marsal's position is completely without merit, baseless and serious misunderstandings of the facts, besides the matters were approved by a New York bankruptcy court in September" Barclays said, according to the FT report. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers led in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offered a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman filed for chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16 (Case No. 08-13600). Several other affiliates followed thereafter. Lehman Brothers Finance AG, also known as Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court in Manhattan on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., listed estimated assets of more than US$1 billion and estimated liabilities of more than US$1 billion. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the United States District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act in the case captioned Securities Investor Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV- 8119 (GEL). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI Barclays Bank Plc has agreed, subject to U.S. Court and relevant regulatory approvals, to acquire Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units of Lehman Brothers Holdings, Inc., which has filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion ($33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEVEL 3: Moody's Confirms Corporate Family Rating at 'Caa1' ----------------------------------------------------------- Moody's Investors Service confirmed Level 3 Communications, Inc.'s (Level 3) Caa1 corporate family rating while downgrading the company's probability of default rating to Caa2 from Caa1 and positioning the ratings outlook as negative. Concurrently, the company's SGL-2 speculative grade liquidity rating (indicating good near-term liquidity) was affirmed, and, owing to changes in the company's consolidated waterfall of liabilities stemming from recent tender offer activity as well as the PDR revision, certain ratings and loss given default assessments for individual debt instruments were adjusted (see ratings listing below). The rating actions conclude a review initiated on November 24, 2008. While Level 3's current liquidity position is more than adequate to satisfy near-term requirements, there is significant potential of it deteriorating steadily and materially over the next five to seven quarters as the company addresses maturing indebtedness and there is little perceived safety margin should cash generation unexpectedly subside. In addition, the company will not be able to address 100% of the debt balance coming due in 2011 (and beyond) without accessing the capital markets for funding. This combination of potentially weak liquidity and uncertainties as to Level 3's ability to repay or refinance debt coming due in 2011 (and beyond) causes the PDR to be elevated beyond normal expectations for a company with Level 3's business attributes and cash flow profile. In addition to being a key component of the Caa1 CFR assessment, this is also the primary driver underpinning the negative ratings outlook. Longer term, in the absence of a default due to some liquidity- driven event (including another prospective distressed exchange), Level 3 has an intuitively appealing business plan. As a company with Internet protocol expertise and an IP-enabled network, should Level 3 successfully weather ongoing financial market dislocation and liquidity rationing, it is well positioned to benefit from expanding bandwidth demand and the conversion of telephony to IP- based capacity. In addition, should the approximately $700 million of debt due in 2009 and 2010 be fully repaid (presumably with current excess cash balances), Level 3 will continue to de- leverage (and, in fact, accelerate the recent de-leveraging trend). At present, however, the ratings' impact of longer-term fundamentals is a somewhat secondary consideration. Pending normalization of capital markets access or a substantial cash infusion, expectations of deteriorating liquidity combined with uncertain refinancing prospects will be the primary rating drivers. Rating Actions and Loss Given Default Assessment Adjustments: Issuer: Level 3 Communications, Inc. -- Corporate family rating, confirmed at Caa1 -- Probability of default rating, downgraded to Caa2 from Caa1 -- Speculative grade liquidity rating, unchanged at SGL-2 -- Senior Unsecured Regular Bond/Debenture, downgraded to Caa3 (LGD5, 73%) from Caa2 (LGD5, 82%) -- Senior Unsecured Conv. Bond/Debenture, downgraded to Caa3 (LGD5, 73%) from Caa2 (LGD5, 82%) -- Senior Unsecured Conv. Sub. Bond/Debenture, unchanged at Caa3 with the LGD assessment revised to (LGD5, 84%) from (LGD6, 94%) Issuer: Level 3 Financing, Inc. -- Senior Secured Bank Credit Facility, unchanged at B1with the LGD assessment revised to (LGD1, 3%) from (LGD1, 7%) -- Senior Unsecured Regular Bond/Debenture, unchanged at Caa1with the LGD assessment revised to (LGD3, 33%) from (LGD3, 49%) Outlook Actions: Issuers: Level 3 Communications, Inc. and Level 3 Financing, Inc. -- Outlook changed to negative from under review down Moody's most recent rating action concerning Level 3 was taken on January 8, 2009, at which time the company's PDR was adjusted to Ca/LD and it was announced that the then ongoing ratings review would continue. The company's CFR remained unchanged at Caa1. Headquartered in Broomfield, Colorado, Level 3 Communications, Inc., is a publicly traded international communications company with one of the world's largest communications and Internet backbones. LIBERTY MEDIA: DBRS Halts Ratings; May Have Dropped to "BB" ----------------------------------------------------------- Dominion Bond Rating Service on March 5, 2009, discontinued its rating of Liberty Media LLC, a wholly owned subsidiary of Liberty Media Corporation. The rating has been discontinued without resolution of the Under Review with Negative Implications status that was initiated on September 4, 2008, as Liberty Media has not completed its distribution of the shares of Liberty Entertainment to its shareholders. DBRS continues to believe that this transaction would have resulted in DBRS lowering Liberty Media's rating from the current BBB (low) level into the BB range, given the lower asset coverage. DBRS said the action is unrelated to Liberty Media's credit profile. LYONDELL CHEMICAL: Inks Amendment to Credit Agreements ------------------------------------------------------ Gerald O'Brien, vice president and general counsel of Lyondell Chemical Company, disclosed in a regulatory filing with the Securities and Exchange Commission, that on March 3, 2009, the Debtors entered into Amendment No. 2 and Waiver to the Credit Agreement, dated as of December 20, 2007, as amended and restated as of April 30, 2008 -- the Prepetition Senior Credit Agreement -- adding certain transition provisions with respect to Roll-Up Loans. A full-text copy of Amendment No. 2 and Waiver to the Prepetition Senior Credit Agreement dated as of March 3, 2009, is available for free at: http://idea.sec.gov/Archives/edgar/data/842635/000119312509046278/ dex101.htm A full-text copy of the DIP Term Facility Credit Agreement dated as of March 3, 2009, is available for free at: http://idea.sec.gov/Archives/edgar/data/842635/000119312509046278/ dex102.htm A full-text copy of the DIP ABL Facility Credit Agreement dated as of March 3, 2009, is available for free at: http://idea.sec.gov/Archives/edgar/data/842635/000119312509046278/ dex103.htm As reported by the Troubled Company Reporter on March 2, 2009, Judge Robert E. Gerber of the United States Bankruptcy Court for the Southern District of New York has approved, on a final basis, the terms of Lyondell Chemical's $8,015,000,000 debtor-in- possession financing package -- the largest in history. The DIP financing includes two senior secured superpriority credit agreements: -- a $6.5 billion term loan, comprising $3.25 billion in new loans and a $3.25 billion roll-up of existing loans -- the Term Facility; and -- a $1.54 billion asset-backed lending facility -- the ABL Facility. Judge Gerber has initially deferred ruling on the Debtors' DIP Financing at the hearing scheduled last February 25, 2008, to further hear arguments regarding the DIP Motion, Bloomberg News said. The Judge directed Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York, counsel for Citibank, N.A, to give more information regarding the repercussions of the DIP loans' deadlines. Judge Gerber also heard arguments for seven hours from the objecting parties, Bloomberg noted. According to Lyondell's official statement, the Court's Final Approval will allow the company access to an additional $1.083 billion of the DIP financing and will make an additional EUR260 million available to LyondellBasell entities that are organized outside of the United States. To recall, the Debtors received on Jan. 8, 2009, interim authorization to use up to $3.682 billion of its DIP funding, including EUR440 million for LyondellBasell's non-U.S. entities. The DIP lenders include a combination of banks and investment firms, like hedge funds and private equity firms. "These funds will support the uninterrupted operation of our businesses worldwide, giving confidence to our many suppliers and allowing us to continue serving the needs of our global customers," said Volker Trautz, chief executive officer of LyondellBasell Industries. "This final approval of our DIP credit agreements means that we can turn our full attention to the task of emerging from Chapter 11 protection with a new capital structure and a strengthened business platform." The maturity date of the DIP Facilities is December 15, 2009, subject to (i) the earlier occurrence of (a) the consummation of a plan of reorganization by the Debtors, or (b) acceleration of the loans under the Term Facility or the ABL Facility, and (ii) in the case of the Term Facility, the extension of the Term Facility. The Debtors, as borrowers, are subject to significant (i) affirmative covenants, including financial reporting to the lenders and satisfaction of certain milestones with respect to timing of events in the Bankruptcy Cases, and (ii) negative covenants, including financial covenants with respect to minimum cumulative consolidated EBITDAR, minimum liquidity and limitations on capital expenditures and limitations on indebtedness, liens and investments. The DIP Facilities contain customary representations and warranties and events of default. Loans outstanding under the DIP Facilities accrue interest on the outstanding principal amount at a rate per annum equal to: (a) a prime rate based floating rate for dollar denominated loans -- the Base Rate Loans -- or a LIBOR based floating rate for euro denominated loans -- the Eurocurrency Rate Loans, plus (b) the applicable margin spread for the loans. The applicable margin per annum spread is (i) 9.00% on Base Rate Loans and 10.00% on Eurocurrency Rate Loans with respect to New Money Loans, (ii) 2.69% on Base Rate Loans and 3.69% on Eurocurrency Rate Loans with respect to Roll-Up Loans, and (iii) 6.00% on Base Rate Loans and 7.00% on Eurocurrency Rate Loans with respect to ABL Facility loans. Under the Final DIP Order, the Court approved the "Carve-Out", which means (i) all fees required to be paid to the Clerk of the Bankruptcy Court and to the Office of the United States Trustee pursuant to 28 U.S.C. Section 1930(a), (ii) all reasonable fees and expenses incurred by a trustee under Section 726(b) of the Bankruptcy Code in an amount not exceeding $10,000,000, and (iii) after the occurrence and during the continuance of an Event of Default, an amount not exceeding $25,000,000 in the aggregate, which amount may be used subject to the terms of the Final DIP Order, to pay any fees or expenses incurred by the Debtors and any professionals of any statutory committees appointed in the Cases that remain unpaid. Judge Gerber held that the DIP Liens will not be subject or subordinate to (i) any lien or security interest that is avoided and preserved for the benefit of the Debtors and their estates under Section 551 of the Bankruptcy Code, (ii) any liens arising after the Petition Date, including, without limitation, any liens or security interests granted in favor of any federal, state, municipal or other governmental unit, commission, board or court for any liability of the Debtors or (iii) any intercompany or affiliate liens of the Debtors, other than any valid, perfected, enforceable and unavoidable postpetition liens that may have arisen or arise in favor of Elgin Joliet and Eastern Railway Company -- now known as Gary Railway -- or its designees pursuant to the applicable agreements or tariffs in connection with its transportation and storage work for the Debtors in an amount not to exceed $2,800,000. The procedures for making allocations of the New Money DIP Loans set forth in the New Money Loan Commitment Procedures Memorandum and the New Money Loan Commitment Standard Terms, substantially in the form filed with the Court on February 23, 2009, are approved, the Court said. Allocations of the New Money DIP Loans made by the Term DIP Agent in accordance with the Procedures will be final and binding. The amendment to Annex V of the DIP Term Sheet, which sets forth the method of allocation for the New Money DIP Loans, substantially in the form filed with the Court on February 23, 2009, is also approved. GIM Cogeneration LLC To address some of the DIP objections filed in Court, the Final DIP Order provides, among other things, that the DIP Agents, for their own benefit and the benefit of the applicable DIP Lenders, are granted a lien in the Cogen Site -- as defined in the Second Amended and Restated Site Lease Agreement dated December 15, 1999, between Equistar Chemicals, LP and GIM Channelview Cogeneration, LLC, as assignee of Reliant Energy Services Channelview LLC -- and easements appurtenant thereto, junior and subordinate to any of GIM Channelview Cogeneration, LLC's rights and estates in the Cogen Site and easements, including any of its rights and estates under the Lease Agreement and the agreements creating the appurtenant easements. This includes GIM's possessory interests in the Cogen Site, any easements appurtenant to the Cogen Site, and any other rights, estates or related interests. Nothing will affect or modify the rights and obligations of the Debtors with respect to the Lease Agreement, including their rights and obligations under the Bankruptcy Code. GIM is authorized to file or record that certain Subordination and Attornment Agreement dated on or prior to the closing of the Term DIP Credit Agreement and the ABL DIP Credit Agreement, by and among GIM, Citibank, N.A., as ABL Facility Agent and Lender, and UBS AG, Stamford Branch, as Term Facility Agent and Lender. The DIP Agents are granted a lien in any proceeds that may be generated from the assumption and assignment or other disposition, if any, of the rights of Equistar Chemicals, LP, as landlord, under the Lease Agreement, and the DIP Lenders are not granted a lien in GIM's rights and estates under the Lease Agreement or any easements appurtenant to the Cogen Site. The DIP Agents agree that nothing will impact, affect, or attempt to modify any of GIM's rights under the Second Amended and Restated Energy Supply Agreement dated December 15, 1999, between Equistar Chemicals, LP and GIM Channelview Cogeneration, LLC, as assignee of Reliant Energy Services Channelview LLC, or the Second Amended and Restated Steam Supply Agreement dated December 15, 1999 between Equistar Chemicals, LP and GIM Channelview Cogeneration, LLC, also as assignee of Reliant Energy Services. The DIP Lenders are granted a lien in the Supply Agreements, including any payments that may be due, now or in the future, from GIM to the Debtors under the Supply Agreements, subject to all of the terms and conditions of the Supply Agreements including any of GIM's rights of netting, set-off or recoupment. 2015 Notes The Court ruled that nothing contained in the DIP Documents or the Final DIP Order will or be deemed to: (a) constitute an amendment, modification or supplement to the Indenture for the $615,000,000 83/8 % Senior Notes Due 2015 and EUR500,000,000 83/8 % Senior Notes Due 2015, dated as of August 10, 2005, as amended from time to time, or the documents executed and delivered in connection with the 2015 Indenture; (b) constitute a finding or determination that the DIP Documents or the Final DIP Order would or would not constitute a violation of, or a default under, the 2015 Documents or the 2015 Notes; or (c) constitute an admission by the 2015 Trustee or the holders of the 2015 Notes. A full-text copy of the Final DIP Order is available for free at: http://bankrupt.com/misc/Lyondell_FinalDIPOrder.pdf Prior to the Court's entry of the Final DIP Order, the Debtors filed with the Court: * final schedules to the DIP Term Loan Agreement on February 25, 2009, a full-text copy of which is available for free At: http://bankrupt.com/misc/933_FinalSchedsreTermLoanAgr.pdf * final schedules to the ABL Revolving Credit Agreement on February 25, 2009, a full-text copy of which is available for free at: http://bankrupt.com/misc/933_FinalSchedsreTermLoanAgr.pdf * draft of an Amendment No. 2 and Waiver to Credit Agreement to the Credit Agreement on February 26, 2009, a full-text copy of which is available for free at: http://bankrupt.com/misc/961_DraftAmndmentNo.2.pdf * revised proposed final DIP Financing order on February 27, 2009 based on input from and accommodations reached with several parties-in-interest, a full-text copy of which is available for free at: http://bankrupt.com/misc/Lyondell_RevPropFinDIPOrd.pdf Court Overrules Objections In addressing the various DIP objections, counsel for the Debtors, George A. Davis, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, explained that ABN AMRO Bank, a member of the ABL and Term Facilities, has determined to drop out because it disagrees with the manner in which the other 13 lenders have decided to document the Roll-up Loan. Mr. Davis noted that this is an entirely intercreditor dispute as ABN's objection raises no question whatsoever about compliance with Section 364 of the Bankruptcy Code. More importantly, he said, the other 13 lenders have agreed to fill the funding commitments from which ABN is walking away. Mr. Davis added that the Official Committee of Unsecured Creditors did not point to a single action that the Debtors could have done to reduce their borrowing. He explained that the Debtors evaluated their operations and borrowing needs and could not, at this time, make material changes. Moreover, the liens of The Bank of New Mellon, indenture trustee under indentures between Lyondell Chemical Company and Equistar Chemicals LP, are being primed, and as adequate protection, is receiving liens subordinate to the DIP Financing on all of the Debtors' assets. A summary of the Debtors' response to the DIP objections is available for free at: http://bankrupt.com/misc/Lyondell_DIPObjsSummary.pdf Robert A. Bartell, managing director of Duff & Phelps, LLC, an investment and banking firm retained by Cadwalader Wickersham also avers that BoNY's financial advisor's conclusions is based upon incomplete or outdated date or flawed calculation methodology. Citibank, N.A., as administrative agent for the ABL DIP Facility, for its part, noted that the DIP maturity date of December 15, 2009 is appropriate given the state of the credit markets and the inability of the Debtors to furnish reliable long-term performance forecasts and the sheer size of the DIP Credit Facility. As to the Committee's objection to granting of liens from avoidance action proceeds, Mr. Huebner clarified that the avoidance proceeds are property of the estates that must be paid to creditors in accordance with statutory priorities. Linda H. Martin, Esq., at Simpson Thacher & Bartlett LLP, in New York, counsel for UBS AG, Stamford Branch, as administrative agent under the DIP Term Loan Agreement, contended that the undeniable weight of the evidence shows that the DIP Financing is reasonable and necessary to allow the Debtors to obtain postpetition financing. Mr. Martin pointed out that BoNY and the prepetition noteholders are adequately protected for the priming of their liens, through the receipt of a substantially broader collateral base, the existence of an equity cushion, and additional forms of relief that will result in the realization of the indubitable equivalent of the noteholders' prepetition lien. UBS sought and obtained the Court's approval to partially file under seal a copy of its DIP Objection with respect to GIM and permit access to the DIP Objection only to the Debtors' counsel, the United States Trustee for Region 2 and parties to the stipulation. Consequently, Law Debenture Trust Company of New York filed a supplement to its DIP objection citing various case law, while the Committee filed with the Court the deposition transcript of David A. Jaffe, a director in the Asset-Based Finance Group for Citigroup Global Markets Inc.'s, a copy of which is accessible for free at: http://bankrupt.com/misc/Lyondell_JaffeDeposition.pdf Greif, Inc., withdrew its objection to the Debtors' DIP Financing, without citing the reason for its withdrawal. Judge Gerber ruled that any objections with respect to the entry of the Final DIP Order that have not been withdrawn, waived or settled, and all reservations of rights, are denied and overruled. Judge Gerber said he approved the loan despite his concerns about the one-year deadline, unusual for a company of Lyondell's size, Bloomberg says. The Judge said he only approved it subject to new terms that will give him flexibility about when he holds hearings, citing the "terrible economic times" that have increased his case load. Reuters said Judge Gerber found that the DIP agreement had been "negotiated in good faith", but asked that certain deadlines be given more flexibility given that six weeks have already lapsed in the one-year duration of the loan. Specifically, hearings for milestones like the approval of Lyondell's rough plan of reorganization will be extended by about a week, and the Dec. 15 maturity date, will be adjusted by a like amount, notes Bloomberg. "If lenders don't like it, they can file me a new plan," Judge Gerber said, Bloomberg says. In addition, Gerber said he had added provisions to the loan which would "make clear" his "neutrality" on disputes ABN Amro had with other creditors. Judge Gerber said the covenants were "reasonable," as were its fees, given the economic conditions, according to reports. 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) LYONDELL CHEMICAL: Gets Go-Signal to Use Cash Collateral -------------------------------------------------------- Lyondell Chemical Company and its affiliates sought and obtained approval from Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York to use any Cash Collateral in which the Senior Facility Prepetition Agent, any Senior Facility Prepetition Secured Lender, the Bridge Prepetition Agent, any Bridge Prepetition Secured Lender, any Indenture Trustee or any Noteholder may have an interest. The Court directed these Parties to promptly to turn over to the Debtors all Cash Collateral received or held by them, provided that the Parties are granted adequate protection and, except on the terms and conditions of the Final DIP Order, the Debtors will be enjoined and prohibited from at any time using the Cash Collateral. Judge Robert E. Gerber of the United States Bankruptcy Court for the Southern District of New York approved the cash collateral use in his order approving, on a final basis, the terms of Lyondell Chemical's $8,015,000,000 debtor-in-possession financing package - - the largest in history. The Debtors' right to use Cash Collateral, and the Adequate Protection Parties' consent to use of Cash Collateral, will terminate automatically (i) on the Termination Date with respect to the Cash Collateral that is ABL DIP Collateral and (ii) on the Maturity Date with respect to Cash Collateral that is Term DIP Collateral. The Adequate Protection Parties are entitled to adequate protection of their interest in their prepetition collateral, including the Cash Collateral, subject to any rights of the Creditors' Committee or other party-in-interest to assert a Lender Claim, for and equal in amount to the aggregate diminution in the value of the Adequate Protection Parties' interest in the Prepetition Collateral during the Cases, including, without limitation, any diminution during the Cases resulting from the sale, lease or use by the Debtors of Cash Collateral and any other Prepetition Collateral, the priming of the Adequate Protection Parties' security interests and liens in the Prepetition Collateral by the DIP Agents and the DIP Lenders pursuant to the DIP Documents and the Final Order, and the imposition of the automatic stay pursuant to section 362 of the Bankruptcy Code. No Adequate Protection Party will be entitled to adequate protection with respect to any diminution in the value of that Adequate Protection Party's interest in its Prepetition Collateral resulting from any successful Avoidance Action or other Lender Claim against, or Avoidance Proceeds recovered from, that Adequate Protection Party. 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) LYONDELL CHEMICAL: Gets Green Light to Hire Cadwalader as Counsel ----------------------------------------------------------------- Lyondell Chemical Company and its affiliates sought and obtained authority from Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York to employ Cadwalader, Wickersham & Taft LLP as their bankruptcy counsel. As reported by the Troubled Company Reporter on February 16, 2009, as the Debtors' counsel, Cadwalader will: * advise the Debtors of their rights, powers, and duties as debtors and debtors-in-possession in the continued management and operation of their businesses and properties; * prepare, on behalf of the Debtors, all necessary and appropriate applications, motions, draft orders, and other documents, and review all financial and other reports to be filed in the Debtors' Chapter 11 cases; * advise the Debtors concerning, and prepare responses to, applications, motions, and other pleadings, notices, and other papers that may be filed and served in the Debtors' bankruptcy cases; * advise the Debtors concerning actions that they might take to collect and recover property for the benefit of their estates; * review the nature and validity of any liens asserted against the Debtors' property and advise the Debtors concerning the enforceability of those liens; * advise and assist the Debtors in connection with any potential asset dispositions; * advise the Debtors concerning executory contracts and unexpired lease assumptions, assignments and rejections; * assist the Debtors in reviewing, estimating, and resolving claims asserted against their estates; * commence and conduct any and all litigation necessary or appropriate to assert rights held by the Debtors, protect assets of their estates, or otherwise further the goal of completing a successful reorganization; * advise and assist the Debtors in connection with the solicitation and confirmation of a plan of reorganization and related documents; * advise and assist the Debtors in the preparation and filing of various documents required in compliance with the U.S. securities laws; and * perform all other necessary legal services in connection with the Debtors' Chapter 11 cases and other general corporate matters concerning the Debtors' businesses. The Debtors will pay Cadwalader's professionals according to these customary hourly rates: Title Rate per Hour ----- ------------- Partners $650 to $1050 Counsel $335 to $930 Legal Assistants $170 to $385 Pursuant to Section 330(a) of the Bankruptcy Code, the Debtors will also reimburse Cadwalader of actual, necessary expenses and other charges. Since December 2008, Cadwalader has received $4,181,903 for its prepetition services, which amount has been applied against professional services rendered by the firm prior to the Petition Date. As of the Petition Date, Cadwalader is holding an advance payment retainer of $6 million for professional services and expenses to be rendered to or incurred for the Debtors. Deryck A. Palmer, Esq., partner at Cadwalader, notes that his firm, its members, counsel and associates: -- are not creditors, equity holders or insiders of the Debtors; -- are not and was not, within two years before the Petition Date, a director, officer or employee of the Debtors; -- do not have an interest materially adverse to the interests of the Debtors' estates or of any class of creditors or equity security holders; -- have not represented any party-in-interest in connection with matters relating to the Debtors, although Cadwalader has certain relationships with other parties-in-interest and other professionals in connection with unrelated matters; and -- are not related to any the Judge in the Debtors' cases, or to the United States Trustee for Region 2. Although not relevant in concluding Cadwalader's "disinterestedness," Mr. Palmer further discloses that: * Cadwalader may currently represent entities which hold certain of the Debtors' debt in beneficial accounts on behalf of unidentified parties. * Since note debt is traded in the commercial markets, Cadwalader may be unaware of the actual holder of the debt of the Debtors. * Cadwalader has represented, may currently represent, and may in the future represent entities with respect to matters involving legal and regulatory authorities which may be involved in the Debtors' Chapter 11 cases. * Cadwalader has not, does not, and will not represent any of the entities in matters related to the Debtors' Chapter 11 cases. According to Mr. Palmer, Cadwalader represented Leonard Blavatnik, chairman and principal shareholder of the Access Group, in connection with certain trust and estate planning matters, during the period between October 30, 2007 and May 22, 2008. In addition, ConocoPhillips CO and ExxonMobil Chemical Corp. are counterparties to contracts with the Debtors, and parties to Heartland Automotive's creditors' committee which Cadwalader represents. Since Cadwalader represents the Heartland committee as a whole, Cadwalader does not believe its representation of the Debtors in matters adverse to particular members of the Heartland Committee interferes with Cadwalader being disinterested. However, Cadwalader can be adverse to Conoco Phillips and Exxon, Mr. Palmer discloses. A copy of Cadwalader's client match list is available for free at: http://bankrupt.com/misc/Lyondell_CadwaladerClientsList.pdf Based on those disclosures, Mr. Palmer avers that Cadwalader is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. 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) LYONDELL CHEMICAL: Seeks to Tap Blank Rome as Special Counsel ------------------------------------------------------------- Lyondell Chemical Company and its affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Blank Rome LLP as their special counsel, nunc pro tunc to January 6, 2009. Before the Petition Date, Blank Rome served as the Debtors' litigation counsel with respect to methyl tertiary butyl ether products liability lawsuits. As special counsel, Blank Rome will: (1) as the Debtors' coordinating national defense counsel with respect to MTBE lawsuits: * coordinate the collection and indexing of documents from MTBE cases filed in state and federal courts; * interview and prepare the Debtors' employee Witnesses in connection with MTBE lawsuits; and * respond to discovery requests and drafting and filing all motions and pleadings in MTBE Lawsuits. (2) serve as defense counsel for Debtor Equistar Chemicals, LP, in a commercial lawsuit filed by ICC Chemical Corporation, which is currently pending in the U.S. District Court, Southern District of New York; (3) serve as defense counsel for Debtor Lyondell Chemical Company in an arbitration demand asserted by an unidentified claimant for which an arbitration hearing is being scheduled; (4) serve as defense counsel for Debtor Millennium Petrochemicals Inc. in a products liability action filed by Small Tube Manufacturing, which is currently pending in the U.S. District Court for the Eastern District of Pennsylvania; (5) serve as bankruptcy counsel for Equistar, an unsecured creditor and trade vendor in the Chapter 11 case of Wellman, Inc., which is pending in the U.S. Bankruptcy Court for the Southern District of New York; (6) serve as Delaware bankruptcy counsel for Equistar, an interested party in the Chapter 11 case of Reliant Energy Inc., which is currently pending in the U.S. Bankruptcy Court for the District of Delaware; (7) serve as Delaware bankruptcy counsel for Equistar, a creditor in the Chapter 11 case of Flying J Inc., which is pending in the Delaware Bankruptcy Court; and (8) serve as Delaware bankruptcy counsel for Equistar, a creditor in the Chapter 11 case of Hilex Poly Co., which is pending in the Delaware Bankruptcy Court. The Debtors will pay Blank Rome's professionals according to their customary hourly rates: Title Rate per Hour ----- ------------- Partner $425 to $785 Associates and Counsel $245 to $485 Paraprofessionals $105 to $280 The Debtors will also reimburse Blank Rome for necessary, out-of- pocket expenses incurred. Alan J. Hoffman, Esq., a partner at Blank Rome, says that as of the Petition Date, Blank Rome is an unsecured creditor of the Debtors for $454,204 for prepetition fees and expenses. However, his firm does not hold or represent any interest adverse to the Debtors on matters relating to the engagement, and is a "disinterested person" as that term is defined under Section 101(14) of the Bankruptcy Code. 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) LYONDELL CHEMICAL: Seeks to Tap Gardere Wynne as Special Counsel ---------------------------------------------------------------- Lyondell Chemical Company and its affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Gardere Wynne Sewell LLP as their special counsel, nunc pro tunc to January 6, 2009. Before the Petition Date, Gardere Wynne represented the Debtors on toxic tort and related environmental litigation. By this application, Gardere Wynne will: * represent the Debtors at trial and in connection with appeals; * provide litigation support to the Debtors and other outside counsel through investigating and developing historical witnesses and other persons with knowledge of relevant facts of products manufactured by the Debtors and the processes used in the manufacture; * source, investigate and collect information and documents necessary to develop and discern the Debtors' corporate histories and respond to discovery in pending litigation; * retain and consult with expert consultants all issues relevant to the Debtors' toxic tort and related environmental litigation products and processes employed in the manufacture of those productions; * advise and consult where necessary and appropriate on matters relating to potential, existing and anticipated future claims against the Debtors; * monitor, advise, consult and assist the Debtors with respect to public policy issues in order to reduce the Debtors' litigation concerns and risks, especially in the lead pigment or paint matters; and * provide advice to the Debtors regarding emerging issues that may affect the Debtors' operations and working with the Debtors to develop and implement strategies to effectively address those emerging issues. The emerging issues include toxic emissions, accounting for those emissions and their dispersion, and evaluating and preparing top address arguments that those emissions are capable of producing injuries and damages inside and outside the Debtors' facilities. The Debtors will pay Gardere Wynne's professionals according to their customary hourly rates: Title Rate per Hour ----- ------------- Partners $380 to $595 Associates $230 to $350 Paralegals $155 to $180 The Debtors will pay Richard O. Faulk, Esq., who will have primary responsibility in the engagement, according to his customary billing rate of $595 per hour. The Debtors will reimburse Gardere Wynne its expenses incurred. Gardere Wynne has agreed to receive payment of fees and reimbursement of expenses not exceeding $150,000 for each month that the Chapter 11 proceedings remain pending, the Debtors note. Mr. Faulk, a partner at Gardere Wynne, relates that upon review, his firm does not represent, has not represented and will not represent the Debtors' secured lenders, the Debtors, Debtor affiliates and Non-Debtor Affiliates, the Debtors' officers and directors, the Debtors' principal equity holders, the Debtors' insurance carriers, significant creditors, and the Debtors' common carriers. He, however, notes that the certain of the parties-in-interest are former or current clients of Gardere Wynne on matters unrelated to the Debtors' Chapter 11 cases. Mr. Faulk adds that the Debtors owe Gardere Wynne $464,030 for prepetition services, however, there are no prepetition claims against the Debtors held by his firm. Accordingly, Mr. Faulk assures the Court that Gardere Wynne is a "disinterested person" as that term is defined under Section 101(14). 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) MAGNA ENTERTAINMENT: May Sell Three More Horse Race Tracks ---------------------------------------------------------- Hannah Cho at Baltimore Sun Reporter reports that Magna Entertainment Corp. may sell its Laurel Park, Pimlico Race Course, and Santa Anita Park. As reported by the Troubled Company Reporter on March 6, 2009, Magna Entertainment, together with certain of its wholly- owned subsidiaries, entered into an agreement with MI Developments Inc., to sell its interests associated with these assets: -- Golden Gate Fields; -- Gulfstream Park, including MEC's interest in The Village at Gulfstream Park(TM), a joint venture with Forest City; -- Palm Meadows Training Center; -- Lone Star Park; -- AmTote International; -- XpressBet(R); and -- a holdback note associated with the sale of The Meadows. Baltimore Sun relates that Magna Entertainment chairperson and CEO Frank Stronach was asked whether Pimlico, Laurel, and Santa Anita Park would be sold. "If the price is right," the report quoted Mr. Stronach as saying. According to Baltimore Sun, Magna Entertainment said that operations at the company will continue while it seeks to sell assets and restructure. Baltimore Sun states that Jockey Club president and chief operating officer Tom Chuckas expects no interruption at Laurel and Pimlico. Baltimore Sun quoted Mr. Chuckas as saying, "I'm hopeful that the Chapter 11 restructuring will take the immediate pressure off the operations." About Magna Entertainment Based in Aurora, Ontario, Magna Entertainment Corp. -- http://www.magnaent.com/-- is North America's largest owner and operator of horse racetracks, based on revenue. The Company develops, owns and operates horse racetracks and related pari- mutuel wagering operations, including off-track betting facilities. MEC also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. MEC owns and operates AmTote International, Inc., a provider of totalisator services to the pari-mutuel industry, XpressBet(R), a national Internet and telephone account wagering system, as well as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a fifty percent interest in HorseRacing TV(R), a 24-hour horse racing television network, and TrackNet Media Group LLC, a content management company formed for distribution of the full breadth of MEC's horse racing content. At Sept. 30, 2008, the company's balance sheet showed total assets of $1.1 billion, total liabilities of $891.0 million and shareholders' equity of $272.7 million. Magna Entertainment and its affiliates filed for Chapter 11 bankruptcy protection on March 5, 2009 (Bankr. D. Delaware Case No. 09-10720). Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP assist the Debtors in their restructuring effort. The Debtors' claims agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors listed $1,049,387,000 in assets and $958,591,000 in liabilities. M/I HOMES: Moody's Downgrades Corporate Family Rating to 'B3' ------------------------------------------------------------- Moody's Investors Service lowered all of the ratings of M/I Homes, Inc., including the company's corporate family rating to B3 from B2, senior unsecured notes rating to Caa1 from B3, and preferred stock to Caa3 from Caa2. The speculative grade liquidity assessment was affirmed at SGL-3, and the ratings outlook is negative. This concludes the review for downgrade that was initiated on February 4, 2009. These rating actions were taken: -- Corporate family rating lowered to B3 from B2; -- Probability of default rating lowered to B3 from B2; -- $200 million senior unsecured notes rating lowered to Caa1 (LGD4, 61%) from B3 (LGD4, 60%); -- $100 million preferred stock rating lowered to Caa3 (LGD6, 99%) from Caa2 (LGD6, 99%); Speculative grade liquidity rating affirmed at SGL-3. The downgrades reflect Moody's expectation that M/I Homes' cash flow performance, though still expected to be positive, will decline in 2009 from 2008 levels. In 2010, Moody's projects the cash flow generation to deteriorate further and it could even turn negative. The downgrades also reflect the company's eroding tangible net worth base due to negative operating income and impairments. The company has a $100 million tangible net worth covenant in its credit facility. Albeit the company should have adequate room under the covenant in 2009, Moody's projects the cushion under the covenant to narrow significantly in 2010. Finally, Moody's is projecting that the company will continue generating operating losses well into 2010. The ratings are supported by the M/I Homes' debt leverage vis-�- vis its peers. The company's debt to capitalization stood at 46.5% at December 31, 2008 (as adjusted per Moody's Standard Analytical Adjustments). The ratings are also supported by the absence of any material near term debt maturities. The company's $150 million revolving credit facility matures in October 2010 and $200 million senior unsecured notes mature in April 2012. The negative outlook reflects the expectation of Moody's Corporate Finance Group that housing market conditions will worsen in 2009 and that the bottom is not yet visible. Furthermore, liquidity will remain tight and 2009 will be a year of greatly reduced deliveries. Going forward, the ratings could be lowered further if the company's cash flow generation were to weaken significantly, cushion under the company's tangible net worth covenant narrows meaningfully, and/or if the company were to engage in a distressed bond exchange. The outlook could stabilize if the company were to generate sizable amounts of operating cash flow (after excluding contributions, if any, from tax refunds) and build its cash balance. Moody's most recent announcement concerning the ratings for M/I Homes was on February 4, 2009, at which time Moody's put all of the company's ratings on review for possible downgrade. The principal methodology used in rating M/I Homes was Moody's U.S. Homebuilding Industry rating methodology, which can be found at www.moodys.com in the Credit Policy & Methodologies directory, in the Ratings Methodologies subdirectory (December 2004, document #90996). Headquartered in Columbus, Ohio and begun in 1976, M/I Homes, Inc. sells homes under the trade names M/I Homes and Showcase Homes, with homebuilding operations located in Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Chicago, Illinois; Tampa and Orlando, Florida; Charlotte and Raleigh, North Carolina; and the Virginia and Maryland suburbs of Washington, D.C. Homebuilding revenues and consolidated net income for the fiscal year ended December 31, 2008 were approximately $594 million and ($250) million, respectively. MANITOWOC CO: Bank Debt Continues Slide; Trades at Near 30% Off --------------------------------------------------------------- Participations in a syndicated loan under which Manitowoc Co. Inc. is a borrower traded in the secondary market at 73.07 cents-on- the-dollar during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 2.93 percentage points from the previous week, the Journal relates. The loan matures April 14, 2014. Manitowoc pays 350 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba2 rating and Standard & Poor's BB+ rating. Headquartered in Maniwotoc, Wisconsin, The Manitowoc company Inc. (NYSE: MTW) -- http://www.manitowoc.com/-- provides lifting equipment for the global construction industry, including lattice-boom cranes, tower cranes, mobile telescopic cranes, and boom trucks. As a leading manufacturer of ice-cube machines, ice/beverage dispensers, and commercial refrigeration equipment, the company offers the broadest line of cold-focused equipment in the foodservice industry. In addition, the company is a provider of shipbuilding, ship repair, and conversion services for government, military, and commercial customers throughout the maritime industry. The company has regional offices in Mexico and Brazil * * * As reported by the Troubled Company Reporter on March 5, 2009, Standard & Poor's Ratings Services revised its rating outlook on The Manitowoc Co. Inc. to negative from stable. All ratings are affirmed, including the 'BB' long-term corporate credit rating. "This action reflects increased concern that Manitowoc's near-term debt reduction plans may be affected by lower-than-expected proceeds from an asset divestiture required by regulators to complete the acquisition of Enodis in late 2008," said Standard & Poor's credit analyst John R. Sico. The Company has stated it could violate certain debt covenants during the second half of 2009. S&P is concerned the Company may not meet covenants on its credit facilities that step down from 4.0x currently to 3.75x by Dec. 31, 2009. On July 31, 2008, TCR reported that Moody's Investors Service affirmed the Ba2 Corporate Family and Probability of Default ratings of Manitowoc following its announced syndication of a new credit facility to fund its acquisitions of Enodis plc. Moody's also assigned a Ba2 rating to the proposed US$2.925 billion senior secured bank credit facility and lowered the senior unsecured notes to B1 from Ba3. The outlook remains stable. MASONITE INT'L: Buy-Out Deal May Cost KKR $650 Million ------------------------------------------------------ Kohlberg Kravis Roberts & Co., may lose $650 million in investments in Masonite International Corp. after the Canadian door manufacturer undergoes a debt restructuring. According to Financial Post, three years ago, Masonite cut a $3.1-billion deal with U.S.-based KKR to privatize the firm. Back then, the company was posting $2.5 billion in annual sales. Now the entire equity in the firm has been wiped out with news that Masonite arranged a $2-billion debt-to-equity swap with its senior secured lenders and a committee of bondholders. Karen Mazurkewich of Financial post reports that the senior secured debtholders will own 97.5% of the company. The bondholders have been given a sweetener of 2.5% equity plus warrants if they accept a deal in which the senior lenders are "clearly under water," according to one restructuring expert. The debt-to-equity swap still faces a vote, but if it proceeds, KKR and its partners will see its US$650-million go up in smoke, Financial post said. It's one of the most expensive mistakes by a private equity firm in Canada, said Financial Post. Kevin Morley, chairman of the asset-based lending group at Ogilvy Renault, as cited by the report said, "The need to convert debt to equity is becoming increasingly commonplace. These kinds of deals aren't unusual considering the debt loads these types of companies are holding". Since the credit freeze, buyout firms are seeing their highly leveraged portfolio companies submerge. It's the latest in what bankruptcy experts say will be a whiteout for companies purchased by private equity at the height of the credit bubble, the report added. About Masonite International Based in Ontario, Canada, Masonite International Corporation -- http://www.masonite.com/-- (TSE:MHM) is a vertically integrated producer, manufacturing key components of doors, including composite molded and veneer door facings, glass door lites and cut stock. The company provides these products to its customers in more than 70 countries around the world. The company is a wholly owned subsidiary of Masonite International Inc. It offers a range of interior and exterior doors. Masonite Canada operates Masonite International's Canadian subsidiaries, well as certain other non- United States subsidiaries. * * * As reported in the Troubled Company Reporter on Sept. 1, 2008, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on Masonite International Inc. (Masonite) and its subsidiaries, Masonite International Corp. and Masonite US Corp., to 'CCC+' from 'B-'. S&P also lowered the senior secured debt rating on Masonite to 'B' from 'B+'. The ratings remain on CreditWatch with negative implications, where they were placed April 18, 2008. As reported by the Troubled Company Reporter, Masonite entered into a further extension, to February 9, 2009, of its forbearance agreements with its bank lenders and with holders of a majority of the senior subordinated notes due 2015 issued by two of the Company's subsidiaries. MICHAELS STORES: Bank Debt Continues Slide; Now Sells at 45% Off ---------------------------------------------------------------- Participations in a syndicated loan under which Michaels Stores Inc. is a borrower traded in the secondary market at 54.08 cents- on-the-dollar during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 2.28 percentage points from the previous week, the Journal relates. The loan matures on October 31, 2013. Michaels Stores pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B2 rating and Standard & Poor's B rating. Syndicated loans of other retailers also trade at substantial discount in the secondary market during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. Participations in a syndicated loan under which Blockbuster Inc. is a borrower traded at 66.70 cents-on-the-dollar, a drop of 2.50 percentage points from the previous week. The loan matures on August 20, 2011. Blockbuster pays 375 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B1 rating and Standard & Poor's B rating. Participations in a syndicated loan under which Neiman Marcus Group Inc. is a borrower traded at 61.50 cents-on-the-dollar, a drop of 3.57 percentage points from the previous week. The loan matures on April 6, 2013. Neiman Marcus pays 175 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB rating. Yankee Candle bank debt trades at 61.80 cents-on-the-dollar, an increase of 1.63 percentage points from the previous week. The loan matures February 6, 2014. Yankee Candle pays 200 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB- rating. US Foodservice bank debt trades at 60.21 cents-on-the-dollar, a drop of 2.45 percentage points from the previous week. The loan matures July 3, 2014. US Foodservice pays 275 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B2 rating and Standard & Poor's N.R. rating. Based in Irving, Texas, Michaels Stores, Inc. is North America's largest specialty retailer of arts, crafts, framing, floral, wall decor, and seasonal merchandise for the hobbyist and do-it- yourself home decorator. As of December 1, 2008, the Company owns and operates 1,014 Michaels stores in 49 states and Canada, and 163 Aaron Brothers stores. MME LLC: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------ Debtor: MME, LLC 6620 SO Tenaya, Suite 200 Las Vegas, NV 89113 Bankruptcy Case No.: 09-12931 Chapter 11 Petition Date: March 4, 2009 Court: District of Nevada (Las Vegas) Judge: Mike k. Nakagawa Debtor's Counsel: kelly J. Brinkman, esq. kbrinkman@gooldpatterson.com Goold Patterson Ales & Day 4496 S. Pecos Road Las Vegas, NV 89121 Tel: (702) 436-2600 Fax : (702) 436-2650 Estimated Assets: $1 million to $10 million Estimated Debts: $10 million to $50 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ New South Federal Bank A&D Loan $18,000,000 Attn: Chris Zoercher Joel Bodiford Betsy Reynolds 210 Automation Way Birmingham, AL 35210 Tier One Bank A&D Loan $11,000,000 Attn: Tim Laphen P.O. Box 83009 1235 N. Street Lincoln, NE 68508-2083 Focus Property Group common area $365,254 Attn: Larry Bross Tom Devore 3455 Cliff Shadows Pkwy. Suite 220 Las Vegas, NV 89129 Landtek LLC Attn: James E. Smyth, II 3800 Howard Hughes Parkway, 7th Floor Las Vegas, NV 89169 Office of the County property taxes $49,078 Association Clark County Treasurer semi-annual $46,379 SID MS Concnrete Retention amount $45,000 Badger Construction Retention amount $40,000 Mountains Edge Co-op Marketing and $35,000 Maravilla at Mountains Edge Capital Reserve $15,305 Edge Homeowner's Association Mountains Edge Master HOA Fees $10,000 Brown & Brown Insurance Insurance Broker unknown The petition was signed by David R. McEntire, president of Amstar Homes Inc. and member of MME LLC. MORGAN STANLEY: S&P Downgrades Rating on $3 Mil. Notes to 'C' ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on Morgan Stanley ACES SPC's series 2006-8 $3.0 million class A-5 secured fixed-rate notes to 'C' from 'CCC-' and placed it on CreditWatch with negative implications. The rating on the class A-5 notes is linked to the lowest rating of (i) the reference obligation, Bowater Inc.'s 6.5% senior unsecured notes due June. 15, 2013 ('C/Watch Neg'); (ii) the guarantor under related swap and forward agreements, Morgan Stanley (A/Negative/A-1); and (iii) the underlying securities, BA Master Credit Card Trust II's series 2001-B class A certificates due 2013 ('AAA'). The rating action on the class A-5 notes reflects the Feb. 10, 2009, lowering of S&P's rating on Bowater Inc.'s 6.5% senior unsecured notes due June 15, 2013, to 'C' and its placement on CreditWatch with negative implications. MOVIE GALLERY: Plan Trustee Files Avoidance Suit vs. 22 Vendors --------------------------------------------------------------- William Kaye, as Plan Administrator and Litigation Trustee of the Movie Gallery Litigation Trust, filed with the U.S. Bankruptcy Court for the Southern District of New York complaints for the avoidance of preferential transfers, recovery of property, disallowance of claims, and prejudgment interest against 22 vendors: (1) Telekenex, Inc. (2) Venevision International, Inc, Venevision International Productions, Inc. (3) Intense Industries, Inc. (4) BCW Diversified, Inc. (5) Officemax Incorporated (6) Archer Corporation (7) Boston America Corp. (8) Billsoft, Inc. (9) Custom Cabling Solutions, Inc. (10) Mastermedia, LLC (11) Vesdia Corporation (12) TY, Inc. (13) Peach Interactive, Inc., Peach Mobile, Inc., Peach International, Inc. (14) Tri-State Sheet Metal, Inc. (15) Formula Telecom Solutions, Inc. (16) Conditioned Air Mechanical Services, Inc. (17) Drivesafe (18) Gamers Factory Incorporated (19) HDMI Leasing, LLC (20) Hilco Real Estate, LLC (21) National Datacast, Inc. (22) U.S. Maintenance, Inc. doing business as Daystar USM; and Tower Cleaning Systems The MG Trustee's proposed counsel, Craig B. Young, Esq., at LeClairRyan, in Alexandria, Virginia, notes that within 90 days prior to the Petition Date, the Debtors made transfers to these vendors at these amounts: Transferee Transfer Amount ---------- --------------- Officemax $1,289,819 Gamers Factory 433,858 Telekenex 221,801 National Datacast 177,000 U.S. Maintenance 168,453 Formula Telecom 110,250 Conditioned Air 68,632 Vesdia 64,865 Peach 31,725 Mastermedia 31,683 Drivesafe 25,640 Intense Industries 21,293 Billsoft 21,108 BCW 19,826 Archer 19,077 Boston America 18,576 TY 14,638 Tri-State 14,534 Custom Cabling 13,603 Venevision 12,656 Hilco 10,036 HDMI Leasing 10,000 Mr. Young says that the Transfers were on account of antecedent debts owed by the Debtors to the Vendor Transferees. However, the Debtors were insolvent when they made those Transfers as debtors are presumed to be insolvent during the 90 days preceding the filing of Chapter 11 petitions. Thus, the Transfers enabled the Vendor Transferees to receive more than they would have received if the Debtors' Chapter 11 cases have been cases under Chapter 7, if the Transfers had not been made, and the Vendor Transferees received payment on the debts to the extent provided by the Bankruptcy Code. According to Mr. Young, the MG Trustee is entitled to an order and judgment that the Transfers are avoided under Section 547. Moreover, since the Vendor Transferees are the initial transferees, the MG Trustee is entitled to recover for the estates the proceeds or value of the Transfers under Section 550. The MG Trustee is, thus, entitled to an order and judgment under Section 550 that the proceeds or value of the Transfers is recovered for the benefit of the estates, Mr. Young asserts. He further notes that in line with Section 502(d), if the Vendor Transferees are liable for any avoidable transfer under Section 547, then any claims held by the Vendor Transferees against the Debtors' estates must be disallowed unless and until the Vendor Transferees pay the amount of the Transfers to the MG Trustee. The Vendor Transferees have neither returned nor paid the value of any of the Transfers, and thus their claims against the Debtors should be disallowed, Mr. Young says. Mr. Young further notes that the MG Trustee made demands upon the Vendor Transferees for the return of the Transfers on Sept. 11, 2008, but the Vendor Transferees have failed or refused to return the Transfers. Accordingly, the MG Trustee is entitled to a grant of prejudgment interest on the value of the Transfers from September 11, 2008, until the entry of final judgment in the adversary proceedings to compensate the estates for the delay arising from the Defendants' refusal to return the Transfers. By these Complaints, MG Trustee asks the Court to enter judgment for: (i) a determination that the Transfers are avoidable as preferential transfers under Section 547, and MG Trustee is entitled to recover those Transfers under Section 550; (ii) disallowance of all of Vendor Transferees' claims against the Debtors' estates under Section 502(d), unless and until the amount of judgment for avoidance and recovery of the Transfers is paid by the Vendor Transferees to the MG Trustee; (iii) costs incurred in the Adversary Complaints including attorneys' fees; and (iv) for judgment interest on the judgment amount to the fullest extent allowed by applicable law. The MG Trustee reserves the right to bring any and all other causes of action that it may maintain against the Vendor Transferees, including causes of action arising from transactions set forth in the Complaints, to the extent discovery in the adversary proceedings or further investigation by the MG Trustee reveals further causes of action. About Movie Gallery Headquartered in Dothan, Alabama, Movie Gallery Inc. -- http://www.moviegallery.com/-- is the second largest North American video rental company with approximately 3,300 stores located in all 50 U.S. states and Canada operating under the brands Movie Gallery, Hollywood Video and Game Crazy. Since MGI's initial public offering in August 1994, the Company has grown from 97 stores to its present size through acquisitions and new store openings. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853). Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represented the Debtors. Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak Rock LLP, were the Debtors' local counsel. The Debtors' claims & balloting agent was Kurtzman Carson Consultants LLC. When the Debtors' filed for protection from their creditors, they listed total assets of US$891,993,000 and total liabilities of US$1,419,215,000. The Official Committee of Unsecured Creditors has selected Robert J. Feinstein, Esq., James I. Stang, Esq., Robert B. Orgel, Esq., and Brad Godshall, Esq., at Pachulski Stang Ziehl & Jones LLP, as its lead counsel, and Brian F. Kenney, Esq., at Miles & Stockbridge PC, as its local counsel. The U.S. Bankruptcy Court for the Eastern District of Virginia confirmed the Debtors' Second Amended Chapter 11 Plan of Reorganization on April 9, 2008. The Debtors emerged from bankruptcy on May 20, 2008. (Movie Gallery Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/ or 215/945-7000) NASDAQ OMX: Moody's Affirms Corporate Family Rating at 'Ba1' ------------------------------------------------------------ Moody's Investors Service affirmed the ratings of NASDAQ OMX (corporate family at Ba1) with a positive outlook. Moody's said that 2008 was a transformative year for the NASDAQ OMX franchise. First, management consummated the merger between NASDAQ and OMX. Then, in the summer, NASDAQ OMX acquired the Philadelphia and Boston Stock Exchanges. Finally, in the fall, NASDAQ OMX acquired the derivatives clearing and trading operations of Nord Pool. "Our positive outlook reflects the increased scale and diversification of NASDAQ OMX, as well as management's progress during 2008 integrating its recently acquired platforms" said Peter Nerby, a Senior Vice-President at Moody's. The rating agency noted that NASDAQ OMX's pro-forma cash expenses (excluding compensation and merger costs) dropped to $79.9 million in 4Q08 from $106.5 million in 4Q07. These cost saves strengthen NASDAQ OMX's ability to manage through an environment of depressed trading volumes. The cost saves contributed to an expansion in the EBITDA margin to 48% in 2008 from 43% in 2007. Over the longer term, management at the NASDAQ OMX has executed on a strategy to create economies of scale in processing trade volumes, while steadily reengineering its businesses. A cornerstone of that plan was the 2005 acquisition of INET, which allowed the NASDAQ OMX to reclaim some of the market share in trading of NASDAQ-listed securities and allowed management to move all public equity trading onto the scalable INET platform. Moody's said a primary hurdle to an upgrade to investment grade has been management's past propensity to lever the firm in pursuit of its strategic goals. "Margin compression and pursuit of scale is driving rapid consolidation of exchanges," Nerby observed. "Management has increased leverage to participate in this consolidation". For the rating to reach investment grade, NASDAQ OMX management must continue to reduce leverage and have the discipline to maintain it at lower levels. For example, demonstrating an ability to maintain a Debt/EBITDA ratio of below 3xs through the cycle could support an upgrade. A further concern is the continuing fierce competition that NASDAQ OMX faces for cash equities order flow from traditional exchange rivals, new trading platforms as well as from the major global investment banks. Electronification has boosted overall volumes in many markets, but margins have compressed and the severity of the capital market crisis and global economic downturn makes the outlook for trading volumes highly uncertain for 2009 and 2010. As a result, Moody's expects reduced net trading revenues for NASDAQ OMX in 2009, with uncertain prospects for recovery in 2010. However, even with lower revenues, Moody's expects the firm to produce earnings and cash flows consistent with the Ba1 rating. "Over the past several years, NASDAQ OMX has learned to adapt to the price competition in the United States" Nerby said. For example, NASDAQ has increased its matched market share of NYSE- listed securities (22.2% in 2008, up from 17.1% one year earlier) even as the firm has lost matched share in NASDAQ securities (43.2% in 2008 down from 46.1% one year earlier). The last rating action on NASDAQ OMX was on February 27, 2008, when the ratings were upgraded to Ba1 and the positive outlook was initially assigned. The NASDAQ OMX reported $319.9 million of net income in 2008. NAT'L STATES INSURANCE: A.M. Best Cuts FS Rating to Marginal ------------------------------------------------------------ A.M. Best Co. downgraded on February 27, 2009, the financial strength rating to C++ (Marginal) from B- (Fair) and issuer credit rating to "b" from "bb-" of National States Insurance Company (National States) (St. Louis, MO). The outlook for these ratings has been revised to negative from stable. These rating actions reflect National States' expected weak year- end risk-adjusted capital position and sizeable operating loss. Adverse experience on its South Florida home health care block was the primary reason for the company's poor 2008 operating results. National States is also reliant on receiving timely and appropriate rate increases, which continues to be challenging in Florida. National States has taken a number of corrective steps, including expansion of its accident and health products into the Midwest and sustaining modest growth in the capital intensive whole life business. National States had previously increased its reinsurance to support its capital position and discontinued its graded benefit life product and stand-alone home health care product sales in its unprofitable South Florida segment. A.M. Best believes the company will be challenged to return to profitability near term. NEIMAN MARCUS: Bank Debt Continues Slide; Sells at Near 40% Off --------------------------------------------------------------- Participations in a syndicated loan under which Neiman Marcus Group Inc. is a borrower traded in the secondary market at 61.50 cents-on-the-dollar during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 3.57 percentage points from the previous week, the Journal relates. The loan matures on April 6, 2013. Neiman Marcus pays 175 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB rating. Syndicated loans of other retailers also trade at substantial discount in the secondary market during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. Participations in a syndicated loan under which Michaels Stores Inc. is a borrower traded at 54.08 cents-on-the-dollar, a drop of 2.28 percentage points from the previous week. The loan matures on October 31, 2013. Michaels Stores pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B2 rating and Standard & Poor's B rating. Participations in a syndicated loan under which Blockbuster Inc. is a borrower traded at 66.70 cents-on-the-dollar, a drop of 2.50 percentage points from the previous week. The loan matures on August 20, 2011. Blockbuster pays 375 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B1 rating and Standard & Poor's B rating. Yankee Candle bank debt trades at 61.80 cents-on-the-dollar, an increase of 1.63 percentage points from the previous week. The loan matures February 6, 2014. Yankee Candle pays 200 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB- rating. US Foodservice bank debt trades at 60.21 cents-on-the-dollar, a drop of 2.45 percentage points from the previous week. The loan matures July 3, 2014. US Foodservice pays 275 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B2 rating and Standard & Poor's N.R. rating. About Neiman Marcus Headquartered in Dallas, Texas, Neiman Marcus Inc.'s -- http://www.neimanmarcusgroup.com/-- operations include the Specialty Retail Stores segment and the Direct Marketing segment. The Specialty Retail Stores segment consists primarily of Neiman Marcus and Bergdorf Goodman stores. The Direct Marketing segment conducts both online and print catalog operations under the Neiman Marcus, Horchow and Bergdorf Goodman brand names. * * * As reported by the Troubled Company Reporter on March 5, 2009, Fitch Ratings affirmed the Issuer Default Rating on Neiman Marcus, Inc. and its subsidiary, The Neiman Marcus Group, Inc. at 'B' and revised the Rating Outlook to Negative from Stable. NMG had $3 billion of debt outstanding as of Jan. 31, 2009. The TCR said February 9, 2009, that Standard & Poor's Ratings Services placed its ratings on six department store companies, including Neiman Marcus ("B+"), on CreditWatch with negative implications. "The CreditWatch listings and negative outlooks reflect our deepening concern about the impact of the U.S. recession on the increasingly troubled department store sector," said Standard & Poor's credit analyst Diane Shand, "which felt the full brunt of the declining U.S. economy and weakening consumer confidence in 2008." The recession is likely to worsen through the first half of 2009 given weakening employment, the still-poor housing market, and continuing turmoil in financial markets. NORTEL NETWORKS: Union Slams Firm for Reneging on Severance ----------------------------------------------------------- Dave Coles, president of the Communications, Energy and Paperworkers Union of Canada, has criticized Nortel Networks Corp. for hiding behind bankruptcy legislation to avoid paying their employees severance. Nortel, according to Mr. Coles, "should be ashamed for reneging on signed severance agreements with its laid off workers while paying off its big-business creditors first. These employees gave Nortel its good name, stood by the company in bad times and were promised they would be treated fairly." Mr. Coles is speaking out on behalf of Nortel workers already laid off and of hundreds of other Canadian Nortel employees who will be laid off in coming months without any severance whatsoever. He believes the laid off workers have been far too polite in their correspondence with their ex-employer. Mr. Coles believes that that is probably because their severance agreements prohibit them from speaking negatively about the company. "Not only are they being treated badly by a greedy employer, but they have had their own mouths duct-taped shut. Very little is being done to protect workers who are the victims of this recession. The federal government should step in now with a stimulus package for workers, not just for banks and big business. And it should ensure that companies like Nortel are forced to pay their employees first, not make them go to the back of the line," Mr. Coles said. Mr. Coles stated, "Aside from the moral argument, the corporate community is doing itself a disservice by giving workers in the high-tech industry the back of the hand. It is sending a signal that R&D is not valued in Canada, and knowledge workers will pick up on that cue very quickly." Mr. Coles notes that thanks to the labour movement's hard-fought amendments to Canada's bankruptcy legislation, which came into effect last July, the collective agreements of unionized workers cannot be altered and any severance provisions are protected. The layoff at Quebecor World, also under bankruptcy protection, is a case in point, where CEP members received the severance they were entitled to under their collective agreements. CEP represents workers in the telecommunications sector, and is the largest union in other key sectors or the economy, namely forestry, energy and media. About Nortel Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. Nortel Networks Corp., Nortel Networks Inc. and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NOVA CHEMICALS: DBRS Puts 'B(high)' Ratings Under Review -------------------------------------------------------- Dominion Bond Rating Service has placed the B (high) Issuer and Unsecured Notes & Debentures ratings of NOVA Chemicals Corporation (NOVA or the Company) Under Review with Developing Implications and removed them from Under Review with Negative Implications, where they were placed on January 30, 2008. The change in rating status follows the announcement that NOVA and International Petroleum Investment Company, a state enterprise wholly owned by the Government of the Emirate of Abu Dhabi (not rated by DBRS), have entered into an agreement providing for the all-cash acquisition of 100% of the outstanding shares of the Company for $6.00 per share (roughly $500 million). The acquisition is subject to approval by at least two-thirds of NOVA's shareholders and necessary regulatory approvals, and the Company's Board of Directors has unanimously approved the agreement. The proposed transaction is positive for NOVA on several fronts, and the bid price represents a substantial premium (348%) to its closing share price on February 20, 2009. DBRS views the significant premium paid for NOVA as a reflection of the strength of its asset base, namely, its world-class Joffre, Alberta, chemical complex, and the low valuation of the Company stemming from the liquidity issues it faces over the near and medium term. A rating action is currently not warranted as the agreement is subject to closing conditions, and more information, expected over the coming month, is required regarding the Company's ultimate legal and capital structure. As part of the agreement, IPIC has agreed to a $250 million credit backstop facility, which increases NOVA's liquidity position. The Company has not indicated whether the credit backstop facility, which exceeds the $200 million in new financing required for covenant relief to June 30, 2009, will meet the requirements under its main credit facilities for covenant relief to June 30, 2009. However, NOVA also announced that it has secured $150 million in new financing in the form of a revolving credit facility with Export Development Canada ($100 million) and a syndicate of three banks ($50 million); this provides covenant relief to June 1, 2009, and has effectively removed the refinancing risk associated with the Company's maturing 7.4% $250 million debentures due April 1, 2009. The Company continues to face large debt maturities through 2010, and outstanding bonds do not have a change of control clause. DBRS requires additional information regarding NOVA's strategy in terms of how future maturities will be addressed. Upon completion of the agreement, NOVA would operate as an independent chemicals and plastics company, but benefit from being part of a much larger, financially stronger entity from continued investments in the business and longer-term growth opportunities. IPIC is a leading investor in the field of petroleum and energy, primarily in Europe, the Middle East and Asia, with an investment portfolio of roughly $14 billion. OXFORD INDUSTRIES: S&P Puts 'BB-' Rating on Negative CreditWatch ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it placed its ratings on Oxford Industries Inc., including the 'BB-' corporate credit rating, on CreditWatch with negative implications, meaning that S&P could affirm or lower the ratings following S&P's review. The Atlanta, Ga.-based apparel company had about $395 million in adjusted debt as of Nov. 2, 2008. "The CreditWatch placement follows the company's announcement of weak preliminary results and expected noncash impairment charge of goodwill and other intangible assets of $275 million to $325 million for the fourth-quarter ended Jan. 31, 2009," said Standard & Poor's credit analyst Bea Chiem. While S&P had expected that year-end results would be lower than the previous year due to the weak economy and retail environment, S&P believes that credit metrics may be weaker than S&P's previous expectations, including Oxford's maintenance of leverage below 4x. S&P estimate that leverage may increase to the 4x-4.5x area if operating margins deteriorate by at least 100 basis points or more for the fiscal year ending Jan. 31, 2009, an increase from 3.5x for the 12 months ended Nov. 1, 2008. Standard & Poor's will monitor developments and meet with Oxford's management to review the company's ongoing operating strategies and financial policy. "Our resolution of the CreditWatch listing will focus on Oxford's ability to improve its operating business trends and financial metrics," she continued. PARTY CITY: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Party City of San Diego 11465 Carmel Mountain Road San Diego, CA 92128 Bankruptcy Case No.: 09-02734 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Franchise Management Services, Inc. 09-02738 AIKO Party, Inc. 09-02739 Party City of Temecula 09-02741 Party City of Clairemont 09-02743 Party City of Murrieta, Inc. 09-02744 Party City of Lemon Grove, Inc. 09-02747 Chapter 11 Petition Date: March 4, 2009 Court: Southern District of California (San Diego) Judge: James W. Meyers Debtor's Counsel: Christopher Celentino, Esq. ccelentino@duanemorris.com Duane Morris LLP 101 W. Broadway, Suite 900 San Diego, CA 92101 Tel: (619) 744-2246 Fax: (619) 744-2201 Estimated Assets: Less than $50,000 Estimated Debts: $1 million to $10 million A full-text copy of the Debtors' list of 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/califsb09-02734.pdf The petition was signed by Jason Craig, president. PILGRIM'S PRIDE: Seeks June 29 Extension of Lease Decision Period ----------------------------------------------------------------- Pursuant to Section 365(d)(4)(B), Pilgrim's Pride Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Texas to extend until June 29, 2009, their lease decision deadline to afford them more time to analyze whether assumption or rejection of the real property leases is appropriate in their Chapter 11 cases. Section 365(d)(4) of the Bankruptcy Code provides that the Debtors must assume or reject their non-residential real property leases by the earlier of (a) 120 days after the Petition Date, or (b) the date of entry of an order confirming a Chapter 11 plan of reorganization. If the Debtors fail to make an election with regards to any specific Real Property Lease by the lease decision deadline, the leases will be "deemed rejected." The Debtors' current lease decision deadline is March 31, 2009. The Debtors are party to about 76 real property leases. The Debtors, because of the complexity and size and their Chapter 11 cases, do not believe that it will be possible to make an informed decision as to whether to assume or reject all real property leases by March 31, 2009, as required by Section 364(d)(4). Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, in Dallas, Texas, however, tells the Court that the Debtors have already begun the process of evaluating their executory contracts and real property leases to see which ones should be amended and which ones are rejected. Absent the extension of the lease decision period, the real property leases will be subject to premature forfeiture, Mr. Youngman says. Forfeiture of the Debtors' interest in the real property leases would cause significant disruption to the Debtors' core operations and harm all of the Debtors' stakeholders, he points out. By contrast, the extension requested will allow the Debtors to make prudent business decisions regarding their future needs for leased real property, he explains. Furthermore, Mr. Youngman contends that because the Debtors are current, and intend to remain current, on their postpetition obligations under the Real Property Leases, the requested extension will not prejudice the lessors of the Real Property Leases. About Pilgrim's Pride Corp. Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. In addition, the company owns 34 processing plants in the United States and 3 processing plants n Mexico. The processing plants are supported by 42 hatcheries, 31 feed mills and 12 rendering plants in the United States and 7 hatcheries, 4 feed mills and 2 rendering plants in Mexico. Moreover, the company owns 12 prepared food production facilities in the United States. The company employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico, and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. Pilgrim's Pride Corp. and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No. 08-45664). The Debtors' operations in Mexico and certain operations in the United States were not included in the filing and continue to operate as usual outside of the Chapter 11 process. Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. The Debtors have also tapped Baker & McKenzie LLP as special counsel. Lazard Freres & Co., LLC is the company's investment bankers and William K. Snyder of CRG Partners Group LLC as chief restructuring officer. The company's claims and noticing agent is Kurtzman Carson Consulting LLC. A nine-member committee of unsecured creditors has been appointed in the case. As of December 27, 2008, the Company had $3,215,103,000 in total assets, $612,682,000 in total current liabilities, $225,991,000 in total long-term debt and other liabilities, and $2,253,391,000 in liabilities subject to compromise. Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride Bankruptcy News. The newsletter tracks the chapter 11 proceeding of Pilgrim's Pride Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PILGRIM'S PRIDE: Court Extends Removal Deadline Amid Objections --------------------------------------------------------------- Judge Michael Lynn of the U.S. Bankruptcy Court for the Northern District of Texas granted the request of Pilgrim's Pride Corporation and its affiliates for extension of the period within which the Debtors may remove prepetition civil actions until the date an order is entered confirming any reorganization plan in the Debtors' Chapter 11 cases. The plaintiffs in the Fair Labor Standards Act multidistrict litigation, and Teresa Boshell, tried to block approval of the Debtors' request: (a) FLSA Plaintiffs The FLSA Plaintiffs of the multidistrict litigation pending in the U.S. District Court for the Western District of Arkansas, El Dorado Division, argue that to allow the Debtors additional time beyond what is provided for in Rule 9027(a)(2) will unduly prejudice the interests of the Plaintiffs while accruing no significant benefit to the Debtors. Representing the Plaintiffs, Joseph Postnikov, Esq., at Goodrich Postnikoff & Petrococchi, LLP, in Forth Worth, Texas, emphasized that as provided for in Rule 9027(a)(2), if the claim or cause of action is pending when a case under the Bankruptcy Code is commenced, a notice of removal may be filed only within the longest of: -- 90 days after the Petition Date; -- 30 days after entry of an order terminating a stay, if the claim or cause of action has been stayed under Section 362 of the Bankruptcy Code; or -- 30 days after a trustee qualifies in a Chapter 11 reorganization case but not later than 180 days of the order for relief. For purposes of the hearing on the Debtors' motion, the FLSA plaintiffs filed with the Western Arkansas District Court their Witness and Exhibit list pursuant to Sections 105(a) and 362 of the Bankruptcy Code. (b) Teresa Boshell Ms. Boshell points out that the requested extension affects the prepetition personal injury lawsuit she filed against Gold Kist Russellville in the Circuit Court for Walker County, Alabama. The Debtors assumed the operations of Gold Kist Russellville pursuant to the Debtors' acquisition of Gold Kist, Inc., in 2006. Ms. Boshell says she has more than $954,000 in damages for medical expenses, about $638,000 for lost past and future wages. Ms. Boshell tells the Court that she would be filing a motion in the U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division, to lift the automatic stay to allow prosecution of her personal injury action to resolution. If the lift stay motion is granted, discussions on her Personal Injury complaint is critical for purposes of judicial economy as the Circuit Court will be hearing pre-trial motions, Ms. Boshell asserts. Ms. Boshell argues that allowing the Debtors additional time to remove the Personal Injury Lawsuit beyond the time set forth in Bankruptcy Rule 9027(a) will unduly prejudice her interests. (c) Codey Wheeler, Don Davis and Davey Williams Messrs. Wheeler, Davis and Davey do not object to the extension motion to the extent that the Debtors only seek to extend their time to determine which cases they will seek to remove to the Bankruptcy Court. However, Messrs. Wheeler, Davis and Davey do not consent to the removal of their pending lawsuits against the Debtors because the Bankruptcy Court is not the appropriate venue to adjudicate the lawsuits. Thus, Messrs. Wheeler, Davis and Davey preserve their rights to seek: -- a remand of their lawsuits against the Debtors to the courts in which the lawsuits are currently proceeding; -- relief from the automatic stay to have their lawsuits proceed to final judgment before the court in which they are currently pending; and -- withdrawal of the reference to have their lawsuits adjudicated by the U.S. District Court for the Northern District of Texas. Messrs. Wheeler, Davis and Davey further say that they do not consent to the enlargement or revival of any time to remove cases that expired before the Debtors filed the Motion. With respect to the FLSA MDL Litigation, Judge Lynn extended the Removal Period to the earlier of: (i) the date an order is entered confirming any Chapter 11 plan in the Debtors' Chapter 11 cases; or (ii) 30 days after entry of an order granting relief from the stay imposed by Section 362 of the Bankruptcy Code with respect to the FLSA MDL Litigation. About Pilgrim's Pride Corp. Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. In addition, the company owns 34 processing plants in the United States and 3 processing plants n Mexico. The processing plants are supported by 42 hatcheries, 31 feed mills and 12 rendering plants in the United States and 7 hatcheries, 4 feed mills and 2 rendering plants in Mexico. Moreover, the company owns 12 prepared food production facilities in the United States. The company employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico, and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. Pilgrim's Pride Corp. and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No. 08-45664). The Debtors' operations in Mexico and certain operations in the United States were not included in the filing and continue to operate as usual outside of the Chapter 11 process. Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. The Debtors have also tapped Baker & McKenzie LLP as special counsel. Lazard Freres & Co., LLC is the company's investment bankers and William K. Snyder of CRG Partners Group LLC as chief restructuring officer. The company's claims and noticing agent is Kurtzman Carson Consulting LLC. A nine-member committee of unsecured creditors has been appointed in the case. As of December 27, 2008, the Company had $3,215,103,000 in total assets, $612,682,000 in total current liabilities, $225,991,000 in total long-term debt and other liabilities, and $2,253,391,000 in liabilities subject to compromise. Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride Bankruptcy News. The newsletter tracks the chapter 11 proceeding of Pilgrim's Pride Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PILGRIM'S PRIDE: Inks Amendment to $450-Million DIP Facility ------------------------------------------------------------ Pilgrim's Pride Corporation said in a regulatory filing with the U.S. Securities and Exchange Commission that it entered into a First Amendment on February 26, 2009, to the Amended and Restated Postpetition Credit Agreement dated December 31, 2008, among the company, as borrower, certain subsidiaries of the company, as guarantors, Bank of Montreal, as agent, and the lenders party thereto. The Amendment modifies the definition of "EBITDAR" in the Credit Agreement to include, and permit the company to incur, certain costs and charges, not to exceed $35 million, related to the idling of the company's processing plants in Douglas, Georgia; El Dorado, Arkansas; and Farmerville, Louisiana. A full-text copy of the First DIP Amendment is available for free At: http://ResearchArchives.com/t/s?3a21 About Pilgrim's Pride Corp. Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. In addition, the company owns 34 processing plants in the United States and 3 processing plants in Mexico. The processing plants are supported by 42 hatcheries, 31 feed mills and 12 rendering plants in the United States and 7 hatcheries, 4 feed mills and 2 rendering plants in Mexico. Moreover, the company owns 12 prepared food production facilities in the United States. The company employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico, and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. Pilgrim's Pride Corp. and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No. 08-45664). The Debtors' operations in Mexico and certain operations in the United States were not included in the filing and continue to operate as usual outside of the Chapter 11 process. Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. The Debtors have also tapped Baker & McKenzie LLP as special counsel. Lazard Freres & Co., LLC, is the company's investment bankers and William K. Snyder of CRG Partners Group LLC as chief restructuring officer. The company's claims and noticing agent is Kurtzman Carson Consulting LLC. A nine-member committee of unsecured creditors has been appointed in the case. As of December 27, 2008, the Company had $3,215,103,000 in total assets, $612,682,000 in total current liabilities, $225,991,000 in total long-term debt and other liabilities, and $2,253,391,000 in liabilities subject to compromise. Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride Bankruptcy News. The newsletter tracks the chapter 11 proceeding of Pilgrim's Pride Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PRIMUS GUARANTY: Moody's Downgrades Senior Debt Rating to 'B2' -------------------------------------------------------------- Moody's Investors Service has downgraded the senior unsecured debt and issuer ratings of Primus Guaranty, Ltd., to B2, from Ba3. Moody's said that the downgrade of Primus Guaranty's ratings was prompted by continued credit deterioration at its main operating company, Primus Financial Products LLC, and resulting uncertainty about the group's strategic direction going forward. The outlook for the ratings is negative. According to Moody's, the credit profile of Primus Financial's single name CDS portfolio deteriorated significantly during the fourth quarter of 2008, with exposures rated below investment grade increasing by roughly 40% to $1.6 billion. The firm's portfolio is heavily exposed to the finance, insurance and real estate sectors, all of which have been severely affected by the current economic crisis. Moody's noted that the estimated expected loss associated with Primus Financial's CDS portfolio is roughly equivalent to its equity, indicating that the value of Primus Guaranty's investment in its subsidiary may be limited to future premium income, which is currently estimated at $280 million, net of operating expenses. The rating agency said that Primus Guaranty's liquidity was fairly strong at year-end 2008, with cash and investments of $77 million relative to remaining holding company debt of $109 million. Moody's noted, however, that the company's contemplated acquisitions of structured credit assets could somewhat reduce holding company liquidity going forward. Primus is contemplating a range of strategic initiatives, including a restructuring of its CDS portfolio and investments in the asset management space. Moody's said that the lack of current business volume, coupled with the possibility of substantial additional deterioration at Primus Financial increases the level of uncertainty associated with the future strategic profile and direction of the company. The rating agency indicated that it could further revise its rating if Primus were to pursue a strategy that would adversely affect the risks to its senior creditors. The outlook for the ratings is negative, reflecting the potential for further credit deterioration in the group's CDS portfolio. The last rating action for Primus Guaranty was taken on November 25, 2008, when Moody's downgraded the firm's senior debt and issuer ratings from Ba1 to Ba3 with a negative outlook. List Of Rating Actions These ratings have been downgraded with a negative outlook: * Primus Guaranty, Ltd. -- senior unsecured debt to B2 from Ba3; issuer rating to B2 from Ba3. Primus Guaranty, Ltd. is a publicly traded holding company based in Bermuda. It is the parent of Primus Financial Products, LLC, a credit derivatives product company that provides credit protection against obligations of corporate and sovereign issuers, and structured credits. PS RACQUET: Vineyard Bank Allowed to Foreclose on Calif. Property ----------------------------------------------------------------- Vineyard Bank, which holds a $12.5 million mortgage on a property owned by PS Racquet Club Properties LLC was allowed by the U.S. Bankruptcy Court for the Central District of California to foreclose on the property, Bloomberg's Bill Rochelle reported. The report adds that Vineyard said the property, which is located in Palm Springs, California, was worth $9.9 million. The company, however, had said that if construction on the property were finished and the units sold, the property would be worth $42.5 million. Los Angeles, California-based PS Racquet Club Properties LLC filed for Chapter 11 on October 28, 2008 (Bankr. C.D. Calif., Case No. 08-28120). Carolyn A. Dye, Esq., was tapped as counsel. In its bankruptcy petition, it disclosed assets of $42,610,500 and debts of $15,198,678. QIMONDA NA: Wants to Hire Alvarez & Marsal as Financial Advisor --------------------------------------------------------------- Qimonda North America Corp. and Qimonda Richmond LLC, U.S. subsidiaries of German semiconductor memory product maker Qimonda AG, seek permission from the U.S. Bankruptcy Court for the District of Delaware to employ Alvarez & Marsal North America, LLC as restructuring and financial advisor. A&M will: a) assist the Debtors in the preparation of financial disclosures required by the Court, including the schedules of assets and liabilities, the statement of financial affairs and monthly operating reports; b) assist the Debtors with information and analyses required pursuant to any postpetition debtor-in-possession financings; c) assist with the identification and implementation of short- term cash management procedures; d) assist with the identification of executory contracts and leases and performance of cost/benefit evaluations with respect to the assumption or rejection of each; e) assist in the Debtors' management team and counsel focused on the coordination of resources related to the ongoing reorganization effort; f) assist in the preparation of financial information for distribution to creditors and others, including, but not limited to, cash flow projections and budgets, cash receipts and disbursement analysis, analysis of various asset and liability accounts, and analysis of proposed transactions for which Court approval is sought; g) attend meetings and assistance in discussions with potential investors, banks and other secured lenders, any official committees appointed in these Chapter 11 cases, the United States Trustee, other parties in interest and professionals hired by the same, as requested; h) analyze creditor claims by type, entity, and individual claim, including assistance with development of databases, as necessary, to track the claims; i) assist in the preparation of information and analysis necessary for the confirmation of a plan of reorganization in these Chapter 11 cases, including information contained in a disclosure statement; j) assist in the evaluation and analysis of potential avoidance actions, including fraudulent conveyances and preferential transfers; and k) render other general business consulting or other assistance as Debtors' management or counsel may deem necessary that are consistent with the role of a financial advisor and not duplicative of services provided by other professionals in these proceedings. William H. Runge, III, managing director of Alvarez & Marsal North America, LLC, tells the Court the firm's professionals hourly rates are: Managing Director $625 - $850 Directors/Senior Directors $450 - $625 Associates/Senior Associates $300 - $450 Administration/ Analysts $225 - $300 These professionals are expected to have primary responsibility in the Debtors' cases and their hourly rates are: William H. Runge, III $675 Cory Schupp $500 Paulo Motoki $450 Kyle Sturgeon $350 A&M received various retainers in connection with preparing for the filing of these Chapter 11 cases. The unapplied residual retainer, estimated to approximately $300,000, will constitute a general retainer for postpetition services, will not be segregated by A&M in a separate account, and will be held until the end of these Chapter 11 cases and applied to A&M's finally approved fees in these proceedings. No amounts are due as of the petition date. Furthermore, A&M will receive incentive compensation of between $1,000,000 to $1,500,000 for its services in addition to the compensation. Mr. Runge adds that A&M will be entitled to the incentive fee of $1,000,000 upon the earlier of (x) the consummation of a Chapter 11 plan of reorganization for all of the Debtors; and (y) the consummation of a sale, transfer, or other disposition of all or substantially all of the assets or equity of the debtors in one or more transactions approved in these Chapter 11 cases. In either case, A&M will be entitled to an additional $500,000 if either plan or sale occurs by Dec. 31, 2009. Mr. Runge assures the Court that A&M is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Qimonda AG Qimonda AG (NYSE: QI) -- http://www.qimonda.com/-- is a leading global memory supplier with a diversified DRAM product portfolio. The company generated net sales of EUR1.79 billion in financial year 2008 and had -- prior to its announcement of a repositioning of its business -- approximately 12,200 employees worldwide, of which 1,400 were in Munich, 3,200 in Dresden and 2,800 in Richmond (Virginia, USA). The company provides DRAM products with a focus on infrastructure and graphics applications, using its power saving technologies and designs. Qimonda is an active innovator and brings high performance, low power consumption and small chip sizes to the market based on its breakthrough Buried Wordline technology. Qimonda AG, filed an application with the local court in Munich, Germany, on January 23, 2009, to open insolvency proceedings. QAG's U.S. units, Qimonda North America Corp. and Qimonda Richmond LLC, filed for Chapter 11 before the Delaware bankruptcy court on February 20 (Bankr. D. Del., Lead Case No. 09-10589). Mark D. Collins, Esq., at Richards Layton & Finger PA, has been tapped as counsel. In its bankruptcy petition, Qimonda estimated assets and debts of more than US$1 billion. REDCORP VENTURES: Voluntary Chapter 15 Case Summary --------------------------------------------------- Chapter 15 Petitioner: KPMG Inc. 777 Dunsmuir Street P.O. Box 10426 Vancouver, BC V7Y 1K3 Tel: (604) 646-6332 Fax: (604) 691-3036 Chapter 15 Debtor: Redcorp Ventures Ltd. and Redfern Resources Ltd. 1281 West Georgia Street, Suite 800 Vancouver BC V6E 3J7 CANADA Chapter 15 Case No.: 09-12019 Type of Business: The Debtor is a mineral exploration and development company with active projects in British Columbia, Canada and Portugal. See: http://www.redcorp-ventures.com/ Chapter 15 Petition Date: March 5, 2009 Court: Western District of Washington (Seattle) Judge: Karen A. Overstreet Chapter 15 Petitioner's Counsel: Mary Jo Heston, Esq. hestonm@lanepowell.com Lane Powell PC 1420 5th Ave., Ste. 4100 Seattle, WA 98101 Tel: (206) 223-7000 Estimated Assets: $50 million to $100 million Estimated Debts: $100 million to $500 million REGAL JETS: Organizational Meeting to Form Panel on March 16 ------------------------------------------------------------ Roberta A. DeAngelis, Acting United States Trustee for Region 3, will hold an organizational meeting on March 16, 2009, at 9:30 a.m. in the bankruptcy case of Regal Jets LLC. The meeting will be held at J. Caleb Boggs Federal Building, 844 King Street, Room 2112 in Wilmington, Delaware. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. Based in Dallas, Texas, Regal Jets, LLC, filed for bankruptcy on February 25, 2009 (Bankr. D. Del. Case No. 09-10648). Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP in Wilmington, represents the Debtor. When it filed for bankruptcy, the Debtor reported $10 million to $50 million in assets, and $100 million to $500 million in debts. RESORTS ATLANTIC: Column Financial Can Foreclose on Firm -------------------------------------------------------- Wayne Parry at The Associated Press reports that New Jersey casino regulators told Column Financial that it can start foreclosure proceedings against Resorts Atlantic City. The AP says that Paul O'Gara, Column Financial's lawyer, said that his client could initiate foreclosure proceedings within a few days. Column Financial and Resorts Atlantic, The AP relates, said that they hope to continue talks on an agreement to restart loan payments. The AP states that Resorts Atlantic's 2009 budget doesn't include money for interest payments on the loan. According to The AP, the state Casino Control Commission also ruled that Column Financial and its loan servicers, Trimont Real Estate Advisors, can't take control of Resorts Atlantic City until the commission decides that they need a state casino license. The report states that the commission rejected Column Financial's request to take control of Resorts Atlantic's bank accounts. The AP reports that Resorts Atlantic had argued that Column Financial doesn't have a casino license. The AP relates that the poor economy made Resorts Atlantic default on its bank loan payments in November. Nicholas Ribis, one of Resorts Atlantic's co-owners, said that the company wants to avoid Chapter 11 bankruptcy protection, The AP says. The report quoted Mr. Ribis as saying, "Nine months ago we started to see a very, very bad slide in business in New Jersey. That accelerated in the fourth quarter. Our intent has been to try to find a way through this. We don't want a bankruptcy where the lifeblood of your company is sucked out by administrators, fees and lawyers. We've tried hard to reach a resolution that makes sense for everybody." A foreclosure lawsuit wouldn't change anything at the casino, The AP states, citing Mr. Ribis. The lawsuit would be filed in state Superior Court, according to the report. Resorts Atlantic, The AP relates, agreed to put $15 million in a reserve account to make sure it has sufficient cash on hand to run its daily operations. Las Vegas-based Resorts Atlantic City was opened in May 1978. The casino has been operating under a state-appointed conservator since December 2007, when the casino commission stripped its former owners of their casino license. ROBBINS BROS: Can Access Cash Collateral on Interim Basis --------------------------------------------------------- The Hon. Peter J. Walsh of the United States Bankruptcy Court for the District of Delaware authorized Robbins Bros. Corporation to access, on an interim basis, cash collateral securing repayment of secured loans to its prepetition lenders until May 3, 2009. The Debtor has named Wells Fargo Bank National Association, Paradox Syndication LLC, and Western Presidio Capital IV LP and WPC Entrepreneur Fund II LP who have interest in the cash collateral. Each entity is a party to a certain loan agreement dated Jan. 19, 2007, with the Debtor. Proceeds of the cash collateral will be used to provide funding on the Debtor's operations pending the consummation of the sale of substantially all of its assets including the payment of its employees, professional fees and expenses. The Debtor said it will not make expenditures of cash collateral more than 15%. The secured lenders will be granted replacement liens in all of the Debtor's postpetition assets as adequate protection. A hearing is set for March 25, 2009, at 11:00 a.m., at 824 North Market Street, 6th floor, Courtroom No. 2 in Wilmington, Delaware, to consider final approval of the request. Objections, if any, are due March 19, 2009. A full-text copy of the Debtor's cash collateral budget is available for free at: http://ResearchArchives.com/t/s?3a23 Headquartered in Azusa, California, Robbins Bros. Corporation aka William Pitt Inc. -- http://www.robbinsbros.com-- sells Jewelries. The company filed for Chapter 11 protection on March 3, 2009 (Bankr. D. Del. Case No. 09-10708). Bruce Grohsgal, Esq., at Pachulski, Stang, Ziehl Young & Jones, represents the Debtor in its restructuring efforts. Omni Management Group LLC will serve as the Debtor's claims, noticing and balloting agent; Deloitte Financial Advisory Services LLP, bankruptcy reporting advisor; William Blair & Company, L.L.C., investment banker; and Deloitte Tax LLP, tax advisor. When the Debtor filed for protection from their creditors, it listed assets and debts between $50 million and $100 million each. ROBBINS BROS: Organizational Meeting to Form Panel on March 12 -------------------------------------------------------------- Roberta A. DeAngelis, Acting United States Trustee for Region 3, will hold an organizational meeting on March 12, 2009, at 1:00 p.m. in the bankruptcy case of Robbins Bros. Corporation. The meeting will be held at J. Caleb Boggs Federal Building, 844 King Street, Room 5209, in Wilmington, Delaware. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About Robbins Bros. Based in Azusa, California, Robbins Bros. Corporation, aka William Pitt, Inc. or William Pitt, LLC -- http://www.robbinsbros.com/-- sells jewelries. Robbins Bros. filed for Chapter 11 bankruptcy protection on March 3, 2009 (Bankr. D. Del. Case No. 09-10708). Judge Peter J. Walsh presides over the case. Bruce Grohsgal, Esq., at Pachulski, Stang, Ziehl Young & Jones in Wilmington, serves as bankruptcy counsel. Omni Management Group LLC, serves as the Debtor's claims and noticing agent. Deloitte Financial Advisory Services LLP serves as the Debtor's bankruptcy reporting advisors. William Blair & Company, L.L.C. acts as the Debtor's investment bankers. Deloitte Tax LLP serves as the Debtor's tax advisers. The Debtor disclosed $50 million to $100 million in both assets and debts when it filed for bankruptcy. SEARS CANADA: DBRS Confirms Issuer Rating at 'BB' ------------------------------------------------- Dominion Bond Rating Service discontinued Sears Canada Inc.'s Revolving Term Facility (RTF) rating and confirmed the Company's Issuer and Medium-Term Notes (MTN) ratings at BB and BBB, respectively. Sears Canada's secured, three-year, C$200 million RTF expired in December 2008. The RTF had been solely used to support the Company's offshore merchandise purchasing program and has been replaced by a US$120 million letter of credit facility. When the Company's three-year RTF was established in 2005 as a secured facility, Sears Canada's unsecured MTN noteholders were also granted security in all assets of the Company and its material subsidiaries on a pari passu basis to the RTF providers. At that time, DBRS's ratings were amended to reflect the change in status of the MTN, from an unsecured to secured basis and thereafter the MTN were referred to as Secured Notes. With non- renewal of the RTF (which expired in December 2008), all security interests have now been discharged and the MTN or Secured Notes have reverted to their original unsecured structure, per the Trust Indenture dated December 22, 1998. The MTN are no longer governed by financial covenants, however MTN noteholders still benefit from a negative pledge and covenants limiting the sale of assets. The confirmation of the remaining ratings is based on the view that the above changes do not materially affect the overall credit risk profile of the Company. Although the MTN are now unsecured, their priority position remains unchanged -- the majority of Sears Canada indebtedness is now on an unsecured basis with no major secured creditor ahead of the MTN noteholders. Sears Canada's total debt at January 31, 2009, was C$364.6 million, consisting mostly of MTN ($300 million maturing in 2010), with the remainder made up of joint venture debt and capital leases. Secondly, DBRS continues to believe that Sears Canada's creditors can expect a full recovery on a going-concern basis. DBRS's view is based on its previously completed recovery analysis -- see DBRS report dated September 19, 2008. In DBRS' analysis, Sears Canada's strong asset recovery value was estimated based on: 1) the Company's brand and license values; 2) its real estate portfolio; 3) its relatively low debt levels; and 4) its short bond maturities (2010). In addition, DBRS believes that the near- term recovery would be enhanced by the Company's large cash balances ($819.8 million at January 31, 2009 -- excluding restricted amounts). DBRS notes however, that in addition to the elimination of financial covenants, negative covenants limiting distributions are also no longer present. While this increases the risk of funds being redirected to majority shareholder Sears Holdings Corporation (Sears Holdings), DBRS remains comfortable that the recovery value excluding cash balances would still provide sufficient coverage to support the RR1 rating (i.e. 90% - 100% recovery). Lastly, Sears Canada continues to perform relatively well despite the current economic environment and continued decline in performance at majority shareholder Sears Holdings Corp. For the 52 weeks ended January 31, 2009 Sears Canada reported operating EBITDA (before unusual items) of C$517.0 million on sales of C$5.733 billion, compared with operating EBITDA and sales of C$521.6 million and C$5.845 billion respectively for the comparable prior period. Same store sales were down 1.6% compared to last year on a comparable basis. DBRS notes that Sears Canada reported an 11.3% increase in EBITDA through Q3 F2009, however an increasingly difficult retail environment in Q4 helped reverse those gains for the full year. While results were down slightly for the year, Sears Canada's performance remains very acceptable when considering the decline in consumer spending and overall retail sector results. In contrast, Sears Holdings Corporation's performance continues to deteriorate. For the year ended January 31, 2009, comparable store sales declined 8% in 2008, resulting in full year revenues declining to US$46.8 billion from US$50.7 billion in the prior year. Sears Holdings realized net income (excluding unusual items) of US$215 million compared with US$806 million in the prior year. While Sears Canada's ratings continue to be driven by: 1) the influence of struggling majority shareholder Sears Holdings on the day-to-day decision-making and operation of Sears Canada (i.e., cost-cutting and reduced capital investment); and 2) the possibility that Sears Holdings could remove significant cash flow and/or capital from Sears Canada, there is not necessarily a direct relationship between the ratings of the two companies. At this time DBRS continues to believe Sears Canada's BB Issuer Rating adequately reflects the risk associated with Sears Holdings. However, DBRS will continue to monitor the declining performance and management strategy at Sears Holdings for potential impact on Sears Canada's ratings over the longer-term. Rating actions: (1) Issuer: Sears Canada Inc. Issuer Rating Confirmed BB Stb -- (2) Issuer: Sears Canada Inc. Medium-Term Notes Confirmed BBB Stb RR1 (3) Issuer: Sears Canada Inc. Revolving Term Facility Disc.-Repaid Discontinued -- SECURITY BENEFIT: A.M. Best Cuts Ratings to Non-Investment Grade ---------------------------------------------------------------- A.M. Best Co. downgraded on February 27, 2009, the financial strength rating to B (Fair) from B++ (Good) and issuer credit ratings to "bb" from "bbb+" of Security Benefit Life Insurance Company (SBL) (Topeka, KS) and its wholly owned subsidiary, First Security Benefit Life Insurance and Annuity Company of New York (FSBL) (White Plains, NY). Concurrently, A.M. Best has downgraded the debt rating to "b+" from "bbb-"on the existing surplus notes of SBL. All ratings have been removed from under review and assigned a negative outlook. SBL and FSBL are operating insurance companies of Security Benefit Corporation (SBC Group), an intermediate parent company that is ultimately owned by Security Benefit Mutual Holding Company (Topeka, KS). These rating actions reflect A.M. Best's belief that SBC Group will incur a material decline in its consolidated GAAP equity and statutory capital and surplus funds due to continued deterioration in the value of its collateralized debt obligations (CDO) investments. A.M. Best also notes very high levels of goodwill and intangibles relative to its modest stockholders' equity, declining GAAP and statutory financial results, significant declines in its separate account business due to the U.S. equity market turmoil and a high level of affiliated investments on SBL's balance sheet and surplus notes backing its statutory capital and surplus funds. A.M. Best expects a higher level of realized investment losses for 2008, given that these CDOs represent exposure to subprime residential mortgages and other structured credits. SBC Group's balance sheet contains a high level of goodwill and intangible assets resulting from the 2008 acquisition of an asset management company, Rydex Investments (Rydex). A.M. Best expects a large decline in the group's separate account business and the related fee income from assets under management due to the continuing equity market volatility in the United States. On a statutory basis, SBL's capital and surplus funds also have declined significantly in 2008 as a result of realized and unrealized investment losses from its fixed income and stock portfolios. A.M. Best also notes that SBL's statutory capital and surplus funds are supported by $150 million in surplus notes owed to private investors and affiliated investments represent a measurable portion of invested assets. Partially offsetting rating factors include SBL's long established presence in the 403(b) plan marketplace, an insignificant exposure to commercial mortgages and commercial mortgage-backed securities, generally stable fixed annuity liabilities with surrender protection, strong third-party administration operation and a large base of assets under management and administration. Additionally, A.M. Best notes that SBC Group continues its efforts to raise new capital to strengthen SBL's statutory surplus position. These debt ratings have been downgraded: Security Benefit Life Insurance Company-- -- to "b+" from "bbb-" on $50 million 8.75% surplus notes, due 2016 -- to "b+-" from "bbb-" on $100 million 7.45% surplus notes, due 2033 SENSATA TECHNOLOGIES: Moody's Downgrades Default Rating to 'Caa3' ----------------------------------------------------------------- Moody's Investors Service lowered the Probability of Default rating of Sensata Technologies B.V. to Caa3 from Caa2. All other existing ratings of the company have been affirmed, including the Caa2 Corporate Family Rating. The Speculative Grade Liquidity rating remains SGL-3 and the outlook remains negative. The downgrade of the company's PDR reflects Sensata's recent announcement of the commencement of two separate Dutch auction cash tender offers. One auction is to purchase the maximum aggregate principal amount of the company's 8% senior notes due 2014 for $40 million. The second auction is to purchase the maximum aggregate principal of the company's 9% senior subordinated notes due 2016 and 11.25% senior subordinated notes for $10 million. In both instances, the cash tender offer is substantially below par. Moody's would view this exchange, as proposed, to be a distressed exchange. As a result, the downgrade of the PDR reflects the increased likelihood of this event taking place. Moody's will classify this exchange as a limited default and will likely change the PDR to Caa2/LD upon the closing of the modified Dutch auction tender. These ratings/assessments were affected by this action: -- Corporate family rating affirmed at Caa2; -- Probability of default rating lowered to Caa3 from Caa2; -- Senior secured credit facility affirmed at B3 (LGD2, 29%); -- $450 million senior unsecured notes due 2014 affirmed at Caa3 (LGD5, 75%); -- EUR141 million senior subordinate notes due 2014 affirmed at Ca (LGD6, 91%); -- EUR245 million senior subordinate notes due 2016 affirmed at Ca (LGD6, 91%); and, The company's speculative grade liquidity rating affirmed at SGL- 3. The last rating action was on February 25, 2009 at which time Moody's downgraded the Corporate Family Rating to Caa2. Sensata Technologies B.V., incorporated under the laws of The Netherlands and headquartered in Attleboro, Massachusetts, designs and manufactures sensors and electronic controls. Sensata is a global designer, manufacturer, and marketer of customized and highly-engineered sensors and control products. Revenues for FY08 totaled about $1.4 billion. SHERRITT INT'L: DBRS Cuts Debt Rating to BB (high)-Negative ----------------------------------------------------------- Dominion Bond Rating Service downgraded Sherritt International Corporation's Senior Unsecured Debt to BB (high) from BBB (low) and placed the rating Under Review with Negative Implications following the Company's February 25, 2009 announcement of significantly deteriorating operating performance in its Metals and Oil and Gas units in Q4 2008 and a large increase in the cost estimate of its Ambatovy Project (Ambatovy). The rating downgrade is the result of Sherritt's rising non- Ambatovy-related debt in 2008 and poor results from the Company's Metals and Oil and Gas operations, which have led to poorer credit metrics and increased financial risk. The Company has been placed Under Review with Negative Implications in view of Sherritt's limited access to credit and a poor business outlook for 2009. In addition to facing the need to resolve funding for Ambatovy, Sherritt is expected to come under additional financial strains in 2009. If the Company is required to use its cash resources to fund operating units that face steep declines in product prices, or to meet funding requirements for Ambatovy, credit metrics can be expected to deteriorate to a point that they may not support the BB (high) rating, leading to further rating actions. Sherritt (40% interest) and its Ambatovy partners Sumitomo Corporation, Korea Resources Corporation and SNC-Lavalin Inc. (60% interest) have announced an approximate 30% increase in the capital cost estimate for the development of Ambatovy in Madagascar to US$4.5 billion (100% basis), excluding any accrued financing charges. The Company and its partners have a US$2.1 billion project loan facility for Ambatovy in place, but with the significant increase in estimated costs, this facility will not be sufficient to complete the project. Drawdowns on project financing totaled US$1,070 million (100% basis) as at December 31, 2008, and project construction is estimated to be 44% complete. Sherritt has unexpectedly indicated that it expects Ambatovy construction to proceed as planned, rather than to slow down the project to limit near-term funding needs. During 2009, Sherritt forecasts Ambatovy capital expenditures of US$1.8 billion (100% basis), US$0.6 billion of which is expected to be funded by project financing drawdowns. Sherritt's share of the remaining 2009 expenditures (US$480 million) is only partially fundable from its remaining partner loan facility (an estimated US$173 million not drawn at year-end 2008), meaning that the Company will have to provide approximately US$307 million in funding from other sources or else its interest in the project will be negatively impacted. Sherritt has indicated that it is engaged in advanced discussions with its partners on a mechanism to fund the remaining equity component of the capital cost without jeopardizing Sherritt's balance sheet strength and liquidity. If a funding mechanism can be agreed upon, it is likely to significantly reduce the cash flow the Company can expect from Ambatovy. If Sherritt utilizes its cash resources and available non-project financing capacity to fund its Ambatovy needs, the Company's financial flexibility would be severely restricted at a time of difficult market conditions for some of its operating units. In addition, Sherritt reported deteriorating results from existing operations, with a net loss of $290 million for 2008, including $571 million of writedowns taken in the fourth quarter, compared with earnings of $89 million in 2007. EBITDA for 2008 was $581 million, down 23% from 2007. For the fourth quarter of 2008, Sherritt lost $592 million, largely driven by write downs. Fourth-quarter EBITDA showed a loss of $1.5 million and, before corporate and other costs of $3.2 million, was only $4.1 million, down from the $201 million per- quarter average seen in the first three quarters of 2008. Positive results in the Company's Coal and Power segments were offset by losses in Metals and Oil and Gas, where commodity prices dropped significantly. Additionally, Sherritt lost approximately 26% of its Cuban oil production when the Cuban government unexpectedly terminated Block 7 leases on Cuba's north coast held by Peberco Ltd. (Peberco) and farmed into by Sherritt. Although Sherritt has received approximately US$60 million from Peberco as a result of the lease termination, oil production from Cuba will decline in 2009. Sherritt feels that the termination of the Peberco lease was the result of a specific agreement between the Cuban state oil company and Peberco, and that it will not affect leases directly held by Sherritt and its subsidiaries. With nickel, cobalt and oil prices currently well below fourth- quarter 2008 levels and lower oil production, DBRS expects 2009 net cash contributions from its Cuba-related Metals and Oil and Gas segments to be minimal. Additionally, Sherritt has indicated that the expansion program at its Power operations in Cuba will continue, utilizing cash flow from that unit. This will leave Sherritt's Canadian Coal unit to cover corporate overhead, financing and other costs in 2009. Coal performed well in 2008, with EBITDA from Prairie Coal Operations of $160 million and Mountain Coal Operations of $37 million. The EBITDA contribution from Prairie Operations is expected to increase in 2009, as it was acquired only part way through 2008. Prices and volumes for coal from Prairie Operations are expected to remain steady in 2009. Contributions from Mountain Operations are more volatile due to the nature of the international markets they serve. Coal Operations' 2009 capital plan includes completing an activated carbon project at Prairie Operations for approximately $27 million and re-opening a mine at Mountain Operations, estimated to cost between $8 million and $10 million excluding equipment leases anticipated, in addition to sustaining capital for both divisions. DBRS expects that cash from the Coal segment will be able to cover these capital costs, as well as corporate overhead, financing and other costs in 2009, providing some additional liquidity to the Company. If Coal fails to live up to expectations, or if other divisions need any cash input, credit metrics will deteriorate, leading to a potential downgrade. Sherritt's cash-on-hand was $501 million and its liquid short-term investments were $107 million at year-end 2008 and the Company has indicated that it is in compliance with financial covenants. The Company has short-term revolving credit facilities that are subject to renewal in 2009. These facilities can provide up to $200 million in borrowing capacity, depending on working capital and other measures. The main facility includes a covenant that requires the Company's debt-to-EBITDA ratio to be less than 2.65:1 at the end of each quarter. Current capacity of these facilities is estimated at $160 million, and the Company has indicated that $97 million was drawn in mid-February 2009. These facilities provide Sherritt with a significant portion of non-project- specific borrowing capacity. The expected reduction in 2009 EBITDA, as a result of declining commodity prices, may make the renewal of these facilities more difficult or expensive, resulting in reduced liquidity for the Company. Resolution of the Under Review with Negative Implications status of Sherritt's rating can be expected if the Company can successfully arrange financing for Ambatovy that does not draw on current liquidity resources; successfully renew or replace its maturing short-tem credit facilities; and demonstrate sufficient cash generation from operations to preserve existing financial flexibility. SLOVENE NATIONAL: A.M. Best Cuts Ratings to Non-Investment Grade ---------------------------------------------------------------- A.M. Best Co. downgraded on February 27, 2009, the financial strength rating to B (Fair) from B+ (Good) and issuer credit rating to "bb" from "bbb-" of Slovene National Benefit Society (Slovene) (Imperial , PA). The outlook has been revised to negative from stable. Slovene, founded in 1904, is a fraternal insurance society organized to foster and maintain Slovene heritage and culture. These rating actions are based on Slovene's material decline in its unassigned funds, which resulted from realized investment losses, other than temporary impairment (OTTI) charges and a significant increase in unrealized investment losses in its fixed income portfolio. A.M. Best notes that the large amount of unrealized losses could have a potential negative impact on Slovene's capital and surplus position going forward. Additionally, the ratings reflect Slovene's high level of exposure to interest-sensitive fixed annuity liabilities and their impact on the risk-adjusted capitalization as measured by Best's Capital Adequacy Ratio. In addition, a significant portion of the fixed annuity reserves are without surrender charges and may be vulnerable to disintermediation risk, which in turn could further pressure Slovene's investment portfolio and surplus funds. Partially offsetting these negative factors are Slovene's long- established presence as a fraternal benefit society, its continuing initiatives to improve marketing and product profile to enhance its membership base and its consistently positive but fluctuating and modest statutory operating results. SLS INTERNATIONAL: Meeting to Form Creditors' Panel on March 17 --------------------------------------------------------------- Roberta A. DeAngelis, Acting United States Trustee for Region 3, will hold an organizational meeting on March 17, 2009, at 10:00 a.m. in the bankruptcy case of SLS International Inc. The meeting will be held at J. Caleb Boggs Federal Building, 844 King Street, Room 2112 in Wilmington, Delaware. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. Based in Ozark, Missouri, SLS International, Inc. filed for bankruptcy on March 3, 2009 (Bankr. D. Del. Case No. 09-10696). Judge Kevin Gross presides over the case. Frederick Brian Rosner, Esq., at Messana Rosner & Stern, LLP, in Wilmington, serves as bankruptcy counsel. The Debtor disclosed $2,703,309 in total assets, and $5,661,504 in total debts when it filed for bankruptcy. SLS INT'L: To Convert Reorganization Case to Liquidation -------------------------------------------------------- SBJ reports that SLS International, Inc., is planning to file for Chapter 7 liquidation. Court documents say that SLS International filed a Chapter 11 bankruptcy petition in the U.S. Bankruptcy Court for the District of Delaware on Tuesday. SLS International relates that SLS International wants to sell its assets in 60 days. According to court documents, SLS International will convert its reorganization case to Chapter 7. SBJ states that SLS International has $2.7 million in assets and $5.7 million in estimated debts. SLS International, court documents say, has 100 to 199 creditors, including: -- Best Buy Co., -- Sherwood America, and -- Top Loyal Electronics Co. According to SBJ, SLS International's owner John Gott took the company public in 2001 and grew it quickly, earning it a spot among SBJ's Dynamic Dozen -- the area's 12 fastest-growing area companies -- in 2006. SBJ relates that Mr. Gott a failed to enter the retail market, sending SLS International's stock tumbling until it was delisted from the American Stock Exchange. Ozark-based SLS International, Inc. -- http://www.sls- international.com/ -- helps clients overcome cultural and linguistic boundaries. It offers one-stop, high quality translation and localization services in all varieties of Spanish. SLS International filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware on March 3, 2009 (Bankr. D. Delaware Case No. 09-10696). Frederick Brian Rosner, Esq., at Messana Rosner & Stern, LLP, assists the company in its restructuring effort. The company listed $2,703,309.00 in assets and $5,661,504.00 in debts. SMART BALANCE: Moody's Gives Negative Outlook; Keeps 'B1' Rating ---------------------------------------------------------------- Moody's Investors Service changed the rating outlook of Smart Balance, Inc., to negative from stable. The company's corporate family and probability of default ratings were affirmed at B1. Moody's lowered Smart Balance's first lien debt ratings to B1 from Ba3, and its speculative grade liquidity rating to SGL-3 from SGL- 2. The company's second lien debt rating was affirmed. Ratings affirmed: -- Smart Balance, Inc. -- Corporate family rating at B1 -- Probability of default rating at B1 GFA Brands, Inc.: -- $10 million (original $40 million) 2nd lien Term Loan maturing in November 2014 at B3 (LGD5, 88%) Rating lowered Smart Balance, Inc. -- Speculative grade rating to SGL-3 from SGL-2 GFA Brands, Inc. -- $20 million 1st lien revolving credit agreement expiring in May 2013 to B1 (LGD3, 43%) from Ba3 (LGD3, 42%) -- $59.5 million (original $120 million) 1st lien Term Loan B maturing in May 2014 to B1 (LGD3, 43%) from Ba3 (LGD3, 42%) The rating outlook was changed to negative, incorporating Moody's concern that softening consumer demand will pressure profit margins, precluding additional leverage improvements and will likely result in modest covenant cushion at the end of 2009. Concern about the extent of covenant cushion at the end of 2009 was the primary factor in the downgrade of the company's SGL rating. Smart Balance's SGL-3 rating reflects the expectation that the company will generate relatively stable earnings and cash flow, albeit at growth levels lower than in fiscal 2008. Moody's anticipates that free cash flow will be sufficient to fund working capital and modest capital expenditures and scheduled debt payments over the next 12 months. Smart Balance maintains a $20 million revolving credit facility expiring in May 2013. There were no outstanding borrowings under the revolving credit as of December 31, 2008. The ratings on the company's senior secured first lien debt instruments were lowered, due to the higher level of priority payables in this growing company. Moody's most recent rating action for Smart Balance on May 6, 2008 upgraded the company's long-term ratings, including its corporate family and probability of default ratings to B1 from B3, assigned a stable outlook and affirmed the speculative grade liquidity rating of SGL-2; these actions followed two capital transactions that significantly reduced debt. Headquartered in Paramus, New Jersey, Smart Balance, Inc. is a marketer of margarine and several other packaged food products sold within the functional food category under the Smart Balance and Earth Balance brands. The company's products are designed to provide specific dietary characteristics and benefits to consumers. Revenues for fiscal year 2008 exceeded $221 million. SMITTY'S BUILDING: March 31 Deadline to File Proofs of Claim Set ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Virginia has established March 31, 2009, at 5:00 p.m. EST as the last day for each person or entity to file a proof of claim against Smitty's Building Supply, Inc. and its debtor-affiliates. Governmental units have until July 6, 2009, at 5:00 p.m. to file proofs of claim against any of the Debtors. Proofs of claim must be filed so as to be received on or before the applicable Bar Dates to: Smitty's Building Supply, Inc. Claims Processing Center c/o Epiq Bankruptcy Solutions, LLC FDR Station, P.O. Box 5112 New York, NY 1010-5112 If by overnight or hand delivery: Smitty's Building Supply, Inc. Claims Processing Center c/o Epiq Bankruptcy Solutions, LLC 757 Third Avenue, 3rd Floor New York, NY 10017 About Smitty's Building Headquartered in Alexandria, Virginia, Smitty's Building Supply Inc. supplies building materials in Washington, D.C. The company and three of its affiliates filed for Chapter 11 protection on Jan. 5, 2009 (Bankr. D. Del. Lead Case No. 09-10040). Andrew J. Currie, Esq., Lawrence A. Katz, Esq., Kristen Burgers, Esq., and Abby W. Clifton, Esq., at Venable LLP, represent the Debtors in their restructuring efforts. Epiq Bankruptcy Solutions LLC serves as the Debtors' claims agent. The U.S. Trustee has appointed an official committee of unsecured creditors in the case. LeClairRyan, A Professional Corportion represents the Creditors Committee as counsel. When the company filed for protection from their creditors, they listed assets and debts between $10 million and $50 million each. SMURFIT-STONE CONTAINER: Fitch Withdraws D Issuer Default Rating ---------------------------------------------------------------- Fitch Ratings has withdrawn all ratings for Smurfit-Stone Container Corporation following the Jan. 26, 2009 downgrade of SSCC's Issuer Default Rating to 'D' which coincided with the company's voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Code. The company's Canadian subsidiaries similarly filed for reorganization under the Companies' Creditors Arrangement Act. Fitch has withdrawn SSCC's ratings: -- IDR 'D'; -- Secured bank debt rated 'CCC/RR2'; -- Senior unsecured debt rated 'C/RR6'; -- Preferred stock rated 'C/RR6'. SSCC is a North American producer in the corrugated box markets with 14 paper mills and 122 corrugated container plants. SPANSION INC: May Use Cash Collateral Until March 23 ---------------------------------------------------- Spansion Technology Inc. was given temporary authorization by the U.S. Bankruptcy Court for the District of Delaware to use as much as $150 million cash until a final hearing March 23, a Bloomberg report said. According to Bloomberg's Bill Rochelle, the company told the judge at the hearing on its bid to use lenders' cash collateral that it should know within 30 days whether the business will be sold or reorganized, with the noteholders becoming the new stockholders. Spansion Inc.'s prepetition secured debt structure is comprised of (1) a secured revolving credit facility, (2) Senior Secured Floating Rate Notes Due 2013, and (3) a credit line with UBS Bank USA. As of February 22, 2009, there were $702 million in principal and approximately $8 million in accrued interest outstanding under these debt issuances. Excluding trade debt, Spansion's prepetition unsecured debt includes (1) 11.25% Senior Notes Due 2016, and (2) 2.25% Exchangeable Senior Subordinated Debentures Due 2016. As of February 22, 2009, $457 million in principal and $18 million in accrued interest were outstanding under these debt issuances. The Senior Credit Facility and the FRNs are secured by liens on substantially all of the Debtors' assets, including the Debtors' "cash collateral" as that term is defined in Section 363 of the Bankruptcy Code. Thus, the Debtors do not have any unencumbered cash with which to operate their businesses. The Debtors have proposed that for the use of the cash collateral, they will provide adequate protection to the "Secured Parties" to secure the Prepetition Liens in connection with the Debtors' use of Cash Collateral in which the Secured Parties have an interest, and the diminution in the value of the Secured Parties' interest in the Collateral. About Spansion Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc. and four affiliates filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09- 10690). Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. As of Sept. 30, 2008, Spansion disclosed total assets of $3,840,000,000, and total debts of $2,398,000,000. SPANSION INC: Organizational Meeting to Form Panel on March 12 -------------------------------------------------------------- Roberta A. DeAngelis, Acting United States Trustee for Region 3, will hold an organizational meeting on March 12, 2009, at 11:00 a.m. in the bankruptcy cases of Spansion Inc. and its affiliates. The meeting will be held at The DoubleTree Hotel, 700 King Street, Salon C, in Wilmington, Delaware. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About Spansion Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc. and four affiliates filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del., Lead Case No. 09- 10690). Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. As of Sept. 30, 2008, Spansion disclosed total assets of $3,840,000,000, and total debts of $2,398,000,000. SPANSION INC: To Know Bankruptcy Exit Plan in 30 Days ----------------------------------------------------- Spansion Inc. should know in about 30 days whether it will sell itself, or attempt to reorganize on its own and leave court protection, a company lawyer said. According to Bloomberg news, attorney Gregory O. Lunt told U.S. Bankruptcy Judge Kevin Carey at a hearing in Wilmington, Delaware, that the company is talking to potential buyers at the same time that it's preparing to reorganize by cutting debt and added, "Right now we are exploring both options. The company is also talking to noteholders about various reorganization possibilities, including swapping debt they are owed for equity in the company". Noteholder attorney Robert Stark told Carey his clients have been talking to the company for several weeks. About Spansion Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc. and four affiliates filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del., Lead Case No. 09- 10690). Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. As of Sept. 30, 2008, Spansion disclosed total assets of $3,840,000,000, and total debts of $2,398,000,000. STANFORD INT'L: SEC Sued By Investors for Freezing Accounts ----------------------------------------------------------- Stanford Group Co.'s court-appointed receiver and federal regulators were accused in a lawsuit of violating investors' rights under the U.S. Constitution by freezing their accounts without charging them with wrongdoing, Laurel Brubaker Calkins of Bloomberg reports. The report relates that the SEC sued Robert Allen Stanford, two associates and three affiliated companies on Feb. 17, accusing them of orchestrating an $8 billion fraud through the sale of certificates of deposit by Antigua-based Stanford International Bank. U.S. District Judge David Godbey in Dallas froze all of Stanford's personal and corporate assets and named the Dallas receiver for companies controlled by Texas financier R. Allen Stanford, Ralph Janvey, as receiver. Clients of Stanford have filed a complaint against the SEC and Mr. Janvey before the federal court in Houston in order to gain access to the frozen funds. The 21 plaintiffs include a Texas cotton farmer, the head of a greyhound adoption agency and a Houston oilfield services entrepreneur who claim they can't pay bills or operate businesses without access to the frozen funds. Houston attorney Michael Stanley, who filed the complaint, as cited by Bloomberg, said in an interview, "This was an unlawful taking of the Stanford clients' assets and they are being severely damaged. Even if the government gave their accounts back tomorrow, they'd be worth less than what they were when the government seized them". According to Bloomberg, hundreds of investors have filed motions asking Judge Godbey to release at least some investors' funds. According to the report, at a hearing in Dallas federal court on March 2, Mr. Janvey told Judge Godbey he is working on a plan to release Stanford mutual-fund accounts and investment accounts valued at less than $100,000, with some exceptions, as early as March 16. "Saying they'll get their money back in two weeks isn't soon enough, and we're not sure he's going to give their accounts back then. Seed needs to be planted, dogs need to be fed and employees need to be paid right now," Attorney Stanley stressed. Mr. Janvey cautioned Judge Godbey that he may recover only a fraction of Stanford's stated $8 billion in assets, said Bloomberg. Mr. Janvey, as cited by the report, told Judge Godbey, "It could be in the hundreds of millions of dollars, not billions. The Stanford companies face liquidity problems and are in 'dire' financial condition." He added that a significant percentage of Stanford clients may have invested in fraudulent products and schemes, which could delay the release of funds deemed tainted by investigators. A constitutional law professor at the University of Houston Law Center, Leslie Griffin, said, "The investors are using an untested legal theory in an attempt to unlock their funds or recover damages. It is a novel theory, and it may just be too early to bring a constitutional takings claim. When it gets to how the money gets divided and whether it goes here or there, then they may have a claim.'' Bloomberg's Ms. Calkins also reported that Bob Lawless, business law professor at University of Illinois College of Law, said, "The receiver isn't the one who made the investors lose money. That's like blaming the hospital for an illness. The investors blaming the court for Stanford's insolvency is misplaced frustration." Receiver to Release $250,000 Accounts The Stanford Group Co. receiver will begin releasing frozen investor accounts containing less than $250,000, so long as they aren't linked to an $8 billion fraud investigation, according to court papers. Bloomberg's Laurel Brubaker Calkins relates that Ralph Janvey, court-appointed receiver for companies controlled by Texas financier R. Allen Stanford, filed a request with a Dallas judge to begin releasing roughly 12,000 frozen accounts worth about $500 million as early as March 9. U.S. District Judge David Godbey froze all of Stanford's corporate and personal assets and appointed Mr. Janvey, a Dallas lawyer, as receiver for the companies. Mr. Janvey said he has been working with "clearing agents, brokers and other interested parties, including but not limited to Pershing," to determine the best way to let customers transfer their accounts to other institutions. Mr. Janvey, as cited by Bloomberg, said by March 9 he will post on his Web site, www.stanfordfinancialreceivership.com, on "specific steps customers with released accounts must follow to transfer their accounts to other brokers and thereby gain access to funds in their accounts." He specifically declined to release larger accounts or those in four categories, including: accounts owned by Stanford shareholders, directors and "certain employees"; accounts owned for the benefit of Stanford companies; accounts containing investment assets managed by Stanford companies; and accounts with "secure unpaid balances owed by customers or non-purpose loans made to customers." According to the report, Mr. Janvey also stressed that additional accounts linked by "social security number, address or other similar indicators" to the accounts in the four categories that are not being released would also remain frozen. Based on his review of the Stanford entities' financial condition, Mr. Janvey said he believes "that Stanford probably will not be able to continue operating as a broker dealer. Accordingly, customers will not be able to gain access to their accounts through Stanford." About SIBL Domiciled in Antigua, Stanford International Bank Limited -- http://www.stanfordinternationalbank.com/-- is a member of Stanford Private Wealth Management, a global financial services network with US$51 billion in deposits and assets under management or advisement. Stanford Private Wealth Management serves more than 70,000 clients in 140 countries. The U.S. Securities and Exchange Commission on Feb. 17, charged Robert Allen Stanford and three of his companies for orchestrating a fraudulent, multi-billion dollar investment scheme centering on an US$8 billion Certificate of Deposit program. The SEC also charged SIBL chief financial officer James Davis as well as Laura Pendergest- Holt, chief investment officer of Stanford Financial Group (SFG), in the enforcement action. STAR TRIBUNE: Matrix Says Union Not Blocking Reorganization ----------------------------------------------------------- R. Michael Fox -- the president of Matrix Associates, a Minneapolis-based consulting firm that specializes in business turnarounds and which represents pressmen at The Star Tribune -- said in court documents that the union is being wrongly portrayed as a hindrance to the company's successful reorganization. As reported by the Troubled Company Reporter on February 24, 2009, The Star Tribune asked the U.S. Bankruptcy Court for the Southern District of New York to cancel the labor contract for its 116- member pressmen's union and impose a measure that would save the newspaper about $3.5 million per year. Financial consultant Paul Huffard of Blackstone Advisory Services described The Star Tribune's financial situation as dire. The Star Tribune is seeking $20 million in annual savings from its 800 unionized workers and $10 million from its smaller nonunion workforce as it tries to restructure $477 million in debt that remains from a $530 million acquisition of the Star Tribune by Avista Capital Partners two years ago, David Phelps at The Star Tribune Company reports. Mr. Phelps relates that Mr. Fox said that there is concern that the $3.5 million in concessions that The Star Tribune's management wants from Local 1M of the International Brotherhood of Teamsters, which represents 116 pressroom employees, will only be the first round of contract cuts. Mr. Fox said in court documents, "To the best of our knowledge, the union [1M] is indeed negotiating but is wary with good reason. There is a high probability that no matter what concessions the union provides, the company will be back asking for more in short order." Mr. Fox, according to court documents, said that indebtedness of The Star Tribune's owner is blocking the company's reorganization and that the company has spent unspecified but large amounts of corporate funds on legal fees and outside advisers. Citing Mr. Fox, Mr. Phelps relates that the company hasn't provided enough financial information for Matrix to analyze the company's business prospects coming out of bankruptcy. Mr. Phelps states that Mr. Fox questioned the sufficiency of financing for The Star Tribune's self-funded health insurance plan and whether work-rule changes in the manning levels of the newspaper's presses would make the workplace more dangerous. The Star Tribune spokesperson Ben Taylor said that the company will be responding to the employees' filings this week, according to Mr. Phelps. The court will hold a hearing on a variety of bankruptcy-related matters on Wednesday, Mr. Phelps says. 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. STONE ENERGY: S&P Changes Outlook to Negative; Affirms 'B' Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook on independent exploration and production firm Stone Energy Corp. to negative from stable and affirmed its 'B' corporate credit rating on the company. "The outlook revision reflects our expectation that the company's borrowing base on its $700 million revolving credit facility could be re-determined at a lower bank lending price deck," said Standard & Poor's credit analyst Kenneth Cox. "This could cause liquidity to tighten at Stone." The revolving credit facility currently has a $625 million borrowing base, and as of Dec. 31, 2008, approximately $154 million was available. "The ratings on Stone reflect expectations of weak commodity prices, a small reserve base that is highly concentrated in the mature U.S. Gulf of Mexico shelf region, and a short reserve life," added Mr. Cox. As of Dec. 31, 2008, Lafayette, La.-based Stone had $825 million in long-term debt, or $993.8 million when fully adjusted for operating leases and asset retirement obligations. The outlook is negative. Stone's borrowing base will be re- determined on May 1, 2009. Although the amount of the revision of the borrowing base has not been specified, any reduction in the company's liquidity could pressure the ratings unless the outstanding amount under the revolver can be reduced. Further pressuring the rating is S&P's view that depressed commodity prices in 2009 will hurt cash flow during the year, impairing Stone's ability to significantly improve liquidity and reduce debt. S&P could lower the rating if liquidity tightens considerably, or if excessive capital spending in a protracted low commodity price environment adversely affects Stone's cash flows in 2009. In addition, S&P could lower ratings if weaker-than-expected production and elevated cost structure trends persist. Given S&P's view of the company's business risk profile, S&P does not expect to carry out any positive ratings actions for the remainder of 2009. Some factors supporting this view include the company's relatively small scale of operations, its current high geographic concentration in the U.S. Gulf of Mexico shelf region, its short reserve life, and the weakened industry outlook given the expectation of lower commodity prices in 2009. SUNWEST MANAGEMENT: May File for Chapter 11 Bankruptcy Protection ----------------------------------------------------------------- Michael Rose at Statesman Journal reports that Sunwest Management Inc. might file for Chapter 11 bankruptcy protection. Court documents say that the latest proposal to retain money for bankrupt founder Jon Harder's creditors and rescue Sunwest Management calls for the company to file a Chapter 11 bankruptcy petition. Statesman Journal relates that a court must approve the proposal, which was drafted by Mr. Harder's attorneys, the unsecured creditors committee, Sunwest Management officials, and others. According to Statesman Journal, the proposal under consideration would place Mr. Harder's estate and Sunwest Management into jointly administered Chapter 11 bankruptcy proceedings. Statesman Journal says that a new management committee representing creditors would review Sunwest Management's operations. Mr. Harder would form with Sunwest Management executives Darryl Fisher and Wally Gutzler a new entity called Sunwest Restructuring LLC, which would direct Sunwest Management's restructuring, Statesman Journal states. According to Statesman Journal, Mr. Fisher, Sunwest Management's chief operating officer, might also file for bankruptcy and have the proceeding rolled into the jointly administered Sunwest Management bankruptcies. "It is anticipated that Fisher will file a Chapter 11 petition in the very near future," court documents say. Mr. Fisher was willing to do whatever is necessary to restructure Sunwest Management and a personal Chapter 11 filing for was a possibility, Statesman Journal relates, citing Sunwest Management spokesperson Steven Stradley. Statesman Journal states that Mr. Stradley said that Sunwest Management will emerge from its current crisis as a smaller but viable company. Salem, Oregon-based Sunwest Management Inc. -- http://www.sunwestmanagement.com/-- manages 275 assisted-living facilities in 36 states. Sunwest Management was founded in 1991 with a portfolio of three properties: two retirement communities and one skilled nursing community. It has a network of regional managers that handles various services from accounting to operations. Sunwest Management has put 10 assisted living centers -- two in Oregon -- into Chapter 11 bankruptcy. Briarwood Retirement and Assisted Living Community LLC, which owns a retirement center in Springfield, and Century Fields Retirement and Assisted Living Community LLC, which owns a center in Lebanon, filed for Chapter 11 on Aug. 19, 2008. On Aug. 17, 2008, eight Sunwest-affiliated LLCs filed for Chapter 11 bankruptcy protection from creditors in Tennessee. TELEPLUS WORLD: Files for Chapter 11 Bankruptcy in Florida ---------------------------------------------------------- Teleplus World Corp. filed a voluntary petition for relief under Chapter 11 of the United States Code with the United States Bankruptcy Court for the Southern District of Florida. The company intends to continue maintaining normal operations during this period. The company received on March 4, 2009, a notice of default from the former shareholders of Teleplus Connect Corp., an Ontario Canada corporation, in connection with and pursuant to the share purchase agreement dated March 28, 2005, by and among the company, Teleplus Connect and the vendors for failure to pay amounts due to the vendors under the agreement, according to Marius Silvasan, chief executive officer of the company. The notice of default and the filing of the Chapter 11 Petition constitute or may constitute an even of default or otherwise trigger or may trigger repayment and other obligations, rights and remedies under certain instrument and agreements relating to direct financial obligations of the company, Mr. Silvasan said. As a result of such an event of default or triggering event, all obligations under the debt documents by the terms of the debt documents, became due and payable. The company believes that any efforts to enforce such payment obligations and other obligations, rights and remedies against the company under the debt documents are stayed as a result of the Chapter 11 filing, Mr. Silvasan added. The company owes the vendors the aggregate outstanding balance is $1,740,000 Canadian dollars, or $1,498,391 USD, as of Feb. 28, 2009. YA Global Investments In addition, the company's convertible debenture dated July 3, 2007, in the original principal amount of $3,000,000 issued to YA Global Investments, L.P. fka Cornell Capital Partners LP due July 3, 2010, which has an outstanding balance of approximately $1,807,616 as of Feb. 28, 2009. The company's convertible debenture dated July 28, 2006, in the original principal amount of $3,000,000 issued to YA Global due July 28 2009, which has an outstanding balance of approximately $3,778,356 as of Feb. 28, 2009. The company's convertible debentures dated Dec. 12, 2005, in the original principal amounts of $5,850,000 and $3,375,000, respectively, issued to YA Global due Dec. 12, 2008, which have an aggregate outstanding balance of approximately $8,400,617 as of Feb. 28, 2009. The aggregate outstanding balance owed to YA Global under the debentures is $13,986,589, as of Feb. 28, 2009. Other than its obligation to YA Global, the company owes $2,000,000 to Salamon Brothers in Lawrence, New York, and $1,498,391 to a lender group consist Steve and Melanie Kerekes, Jim Oattes, Grace Debrabandere, Jim and Monica Reddon, and Tome and Jane Davis. When the company filed for protection from its creditors, it listed $10,825,743 in total assets and $21,244,618 in total debts. South Florida Business Journal reported on March 6, 2006, that TelePlus World shares closed up one one-hundredth of a cent to three one-hundredths of a cent. Phillip M. Hudson III, Esq., of Arnstein & Lehr, represents the company. About Teleplus World Headquartered in Miami-Lakes, Florida, Teleplus World Corp. (OTCBB: TLPE) -- http://www.teleplusworld.com-- provides telecommunications products and services including local lines, long distance, toll free and high speed internet services to customers in 53 distinct centrex serving areas. TELEPLUS WORLD: Case Summary & 17 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Teleplus World, Corp. 4960 NW 165th Street, Unit B24 Miami-Lakes, FL 33014 Bankruptcy Case No.: 09-13799 Type of Business: The Debtor provides telecommunications products and services including local lines, long distance, toll free and high speed internet services to customers in 53 distinct centrex serving areas. See: http://www.teleplusworld.com/en/ Chapter 11 Petition Date: March 5, 2009 Court: Southern District of Florida (Miami) Judge: Robert A Mark Debtor's Counsel: Phillip M. Hudson, III, Esq. pmhudson@arnstein.com 200 S. Biscayne Blvd., Suite 3600 Miami, FL 33131 Tel: (305) 374-3330 Fax: (305) 374-4744 The Debtor's financial condition as of February 28, 2009: Total Assets: $10,825,743 Total Debts: $21,244,618 The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ YA Global Investments LP $13,986,589 101 Hudson Street, Ste 3700 Jersey City, NJ 07320 Howard Salamon dba $2,000,000 Salamon Brothers 20 Margaret Avenue Lawrence, NY 11559 Lender Group consist of $1,498,391 Steve and Melanie Kerekes, Jim Oattes, Grace Debrabandere, Jim and Monica Reddon, and Tome and Jane Davis Visioneer Holdings Group Inc. $300,000 Brightpoint North America LP $64,670 Beinstock & Michael P.C. $59,343 PKF $37,270 Sunera LLC $35,236 Kirkpatrick Lockhart Preston Gates $16,049 Ellis Broadridge $9,189 Gordon Chow Management Ltd. $9,000 Hakan Wretsell $4,500 Nick Shamy $3,700 Thompson Financial LLC $3,230 Young Conway Stargatt & Taylor $3,211 Michael Karpheden $2,250 UPS Supply Chain Solutions $57 The petition was signed by Marlus Silvasan, chief executive officer and chairman. TOUSA INC: Creditors Panel Seeks Standing to Sue Former Directors ----------------------------------------------------------------- The Official Committee of Unsecured Creditors in the bankruptcy cases of TOUSA Inc. asks the U.S. Bankruptcy Court for the Southern District of Florida to grant it standing to pursue certain claims and causes of action against certain members of the board of directors of the direct and indirect wholly owned subsidiaries of TOUSA, Inc., and Technical Olympic, S.A. The Committee says it intends to file an action against the directors of the Debtors' subsidiaries, including Konstantinos Stengos, Antonio Mon, Tommy McAden, Andreas Stengos, George Stengos, Larry Horner, William Hasler, Michael Poulos, Marianna Stengou, Susan Parks, J. Bryan Whitworth, Paul Berkowitz, Candace Corra, Russell Devendorf, Brian Konderik, Tom McAndrew, Dave Schoenborn, Gordon Stewart, and Stephen Wagman. Patricia A. Redmond, Esq., at Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., in Miami, Florida, relates that in order to fund the acquisition of Transeatern Properties, Inc., TOUSA Homes LP and Falcone/Ritchie LLC created a series of special purpose subsidiaries, which entered into three credit agreements with a consortium of lenders to borrow up to $675 million. Subsequently, the Transeastern Lenders filed lawsuits against the TOUSA Borrowers, alleging potential defaults and events of default under the Transeastern Credit Agreements. In order to resolve the litigation, the directors of the Debtor subsidiaries agreed to enter into settlement in which the TOUSA Borrowers are required to pay: -- $421,522,193 to The CIT Group/Business Credit for the benefit of the Transeastern Lenders, with a penalty of $140,000 per day for any late payments; and -- more than $49 million to the Falcone Entities in exchange for the takedown of certain properties. The Transeastern Settlement, which closed on July 31, 2007, released all claims by the Transeastern Lenders against the TOUSA Borrowers. In order to fund the settlement payments, TOUSA and Homes LP borrowed $500 million in term loans from a consortium of lenders led by Citicorp North Americas, Inc., as administrative agent. Ms. Redmond argues that the Debtor subsidiaries were not obligated to the Transeastern Debt and were not parties to the Prepetition Transeastern Litigation or the Transeastern Settlement, but the Directors caused them to become co-borrowers and guarantors under the New Debt by signing a consent obliging the Debtor subsidiaries to become co-borrowers and guarantors. She contends that the July 2007 Transaction damaged the Debtor subsidiaries by: (i) diminishing their value through the incurrence of the secured New Debt in order to satisfy existing obligations of TOUSA and Homes LP; and (ii) subordinating the interests of the Debtor subsidiaries' existing creditors in their assets to the New Lenders. She asserts that the Directors have not deliberated about the July 2007 Transaction even though the incurrence of the liability was against the interests of the Debtor subsidiaries and their creditors. She argues that the Directors should have considered the interests of the creditors of the Debtor subsidiaries given the economic condition at that time and the financial situation the Debtor subsidiaries were in, which were insolvent or nearing insolvency during the July 2007 Transaction. Moreover, she tells the Court, the Committee believes it futile to demand the Debtors to prosecute against the Directors since some of them are currently serving as directors of the Debtors. The Committee alleges claims against the Directors arising from breach of their fiduciary duties by approving the July 2007 Transaction in bad faith, with gross negligence and recklessness, and through intentional or willful misconduct by acting solely in the interest of TOUSA's shareholders. The Committee asserts claims against Technical Olympic for aiding the breaches of fiduciary duty committed by the Directors to make a final unjustifiable effort to increase the value of its then valueless equity interests in TOUSA. According to the Committee, at the time of the July 2007 Transaction, Technical Olympic owned a majority of TOUSA's stock and controlled the TOUSA board of directors. Ms. Redmond asserts that the Committee is the appropriate party to prosecute the Claims because its very purpose is to defend the interest of the creditors of the Debtors' estates. She avers that the unsecured creditors have the paramount stake in the outcome of the litigation relating to the Claims and that the Committee is more likely to pursue the litigation than any other party, given that the Debtors are still controlled by Technical Olympic and some of the Directors. More importantly, the Committee emphasizes that the potential recovery from the Claims represents a substantial pool of assets that may be used to satisfy the liabilities of the Debtors' estates to unsecured creditors, including about $100 million in directors and officers' insurance. The Committee does not believe that the expenses to be incurred relating to the prosecution of the Claims will exceed the potential recovery from the Debtors' estates. Although litigation costs are a factor to consider, the Committee must only tell the Court that the prosecution of the Claims represents a sensible expenditure of the estates' resources, Ms. Redmond avers. A draft of the Committee complaint against the Directors is available for free at: http://bankrupt.com/misc/TOUSA_ComplntvDirectrs.pdf The Committee also asks the Court for permission to file under seal its Motion for Standing to Prosecute the Claims. It has filed a redacted version of the Motion for Standing documents on the Court's public docket pursuant to the Stipulated Protective Order to which the Committee and certain lenders of the Debtors are party to. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No. 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger Singerman, to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008, (Bankr. S.D. Fla. Case No.: 08-20746). It listed assets between $1 million and $10 million, and debts between $1 million and $10 million. The Official Committee of Unsecured Creditors hired Patricia A. Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff & Sitterson, P.A., as its local counsel. TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets of $1,734,422,756 and total liabilities of $2,300,053,979. Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by TOUSA Inc. and its affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) TOUSA INC: Court Extends Exclusivity Periods to June 22 ------------------------------------------------------- The U. S. Bankruptcy Court for the Southern District of Florida has extended the Exclusive Plan Filing Period of TOUSA Inc. and its affiliates, through and including June 22, 2009, and the Debtors' Exclusive Solicitation Period, through and including August 22, 2009. The Debtors previously told the Court that the extension of their Exclusive Periods would ensure their continued progress toward a viable Chapter 11 plan. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No. 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger Singerman, to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008, (Bankr. S.D. Fla. Case No.: 08-20746). It listed assets between $1 million and $10 million, and debts between $1 million and $10 million. The Official Committee of Unsecured Creditors hired Patricia A. Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff & Sitterson, P.A., as its local counsel. TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets of $1,734,422,756 and total liabilities of $2,300,053,979. Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by TOUSA Inc. and its affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) TOUSA INC: Files Lawsuit Against SunTrust & Homeowners ------------------------------------------------------ Tousa Homes, Inc., doing business as Engle Homes South Florida, initiated before the U.S. Bankruptcy Court for the Southern District of Florida separate adversary proceedings against SunTrust Bank, as escrow agent, and these parties: 1. Sandi I. and Edna Weber 2. Brian C. and Deborah Lynn 3. Lee S and Shelly R. Gorodetsky 4. Hezi and Maria C. Borba Under the individual Complaints, the Debtor seeks for the return of certain property of its estate pursuant to Sections 541 and 542 of the Bankruptcy Code and Rule 7001 of the Federal Rules of Bankruptcy Procedure. The Webers and the Debtor entered into a contract, wherein the Debtor was to sell and construct a residence for the Webers at 16076 Glencrest Avenue, Delray Beach, in Palm Beach County, Florida for $422,390. The Webers paid a $43,550 deposit for the Residence and the Deposit was placed in an escrow account with SunTrust. The Debtor completed construction of the Residence and scheduled for its closing in April 2008. The Lynns and the Debtor entered into a contract, wherein the Debtor was to sell and construct a residence for the Lynns at 15604 Glencrest Avenue, Delray Beach, in Palm Beach County, Florida for $797,600. The Lynns paid a $79,800 deposit, which was placed in an escrow account with SunTrust. The Debtor completed construction of the Residence and scheduled for its closing in December 2006. The Gorodetskys and the Debtor entered into a contract, wherein the Debtor was to sell and construct a residence for the Gorodetskys at 8774 NW 37th Place, Cooper City, in Broward County, Florida, for $681,990. The Gorodetskys paid a $69,989 deposit and the Deposit was placed in an escrow account with SunTrust. The Debtor completed construction of the Residence and scheduled for its closing in September 2008. The Borbas and the Debtor entered into a contract in which the Debtor was to sell and construct of a residence for the Borbas at 3849 NW 88 Terrace, Cooper City, in Broward County, Florida, for $876,490. The Borbas paid a $87,650 deposit and the Deposit was placed in an escrow account with SunTrust. The Debtor completed construction of the Residence and scheduled for its closing in September 2008. However, Tousa Homes notes that the Webers, the Lynns, the Gorodetskys, and the Borbas failed to close on the Residences constructed by the Debtor and refused to consummate purchase of the Residences. James P.S. Leshaw, Esq., at Greenberg Traurig, P.A., in West Palm Beach, Florida, relates that under the Contracts, the Debtor is entitled to retain the Deposits as liquidated damages upon the Potential Purchasers' breach of the Contracts. The Contracts require the Potential Purchasers to purchase the Residences. Thus, the Potential Purchasers' failure to close on the Residences and failure to purchase the Residences constitute a default under the Contracts, Mr. Leshaw asserts. The Debtor has suffered and continues to suffer damages as a result of the Potential Purchasers' breach of the Contracts, he points out. Pursuant to Section 541(a)(1) of the Bankruptcy Code, the Deposits are a property of the Debtor's estate by virtue of the Potential Purchasers' default under the Contracts. The Debtor is entitled to a declaratory judgment that the Deposits are property of its estate under Section 541, Mr. Leshaw contends. Moreover, under Section 542(a), the Deposits are not of inconsequential value or benefit to the Debtor's estate. The Debtor thus asserts that it is entitled to an order and judgment under Section 542 directing SunTrust, as escrow agent, to release and turnover the Deposits to the Debtor. Accordingly, the Debtor asks the Court to: (a) declare that the Deposits are a property of its estate under Section 541; (b) enter a judgment against the Potential Purchasers with respect to the Deposits, plus interest; (c) direct SunTrust, as escrow agent, to release the escrowed Deposits, plus all accrued interest; and (d) rule against the Potential Purchasers by awarding the Debtor of its attorney's fees and costs pursuant to Section 501.01375 of the Revised Florida Statutes. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No. 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger Singerman, to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008, (Bankr. S.D. Fla. Case No.: 08-20746). It listed assets between $1 million and $10 million, and debts between $1 million and $10 million. The Official Committee of Unsecured Creditors hired Patricia A. Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff & Sitterson, P.A., as its local counsel. TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets of $1,734,422,756 and total liabilities of $2,300,053,979. Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by TOUSA Inc. and its affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) TOUSA INC: Gets Permission to Sell Partnership Stake to Lennar -------------------------------------------------------------- TOUSA Inc. and its affiliates sought and obtained permission from the U.S. Bankruptcy Court for the Southern District of Florida to allow TOUSA Homes, Inc., and Newmark Homes, LP, Inc., to enter into an agreement with Lennar Texas Holding Company and Lennar Homes of Texas Land and Construction Ltd. to effectuate the sale and transfer to the Lennar members of the TOUSA members' partnership interests in Newmark/Lennar Central Texas, L.P. In August 2006, pursuant to a limited partnership agreement, TOUSA Homes, Newmark Homes, Lennar Texas, and Lennar Homes formed the Newmark/Lennar Partnership for the acquisition and development of real estate in Texas. The Partnership completes infrastructure and horizontal development in residential communities and markets those finished lots to third parties. The Partnership may sell lots to Newmark Homes and Lennar Homes, as long as the non-purchaser parties of the Partnership agree to the sales. Neither Newmark Homes nor Lennar Homes has bought any lots from the Partnership. TOUSA Homes and Lennar Texas, as general partners, also agreed to perform certain management services for the Partnership under an Administrative Services Agreement in which they agreed to perform certain management services for the Partnership as general partners. The Partnership has access to a $35 million revolving loan from Colonial Bank, N.A, and the general partners are required to repay the Revolver Loan. The TOUSA Members, however, have failed to comply with certain terms of the Revolver Loan, which constituted events of default. Thus, Colonial Bank refused to permit further draws on the Revolver Loan. Accordingly, TOUSA, Inc. guaranteed performance of the Partnership's completion obligations under the Revolver Loan and assumed payment for all direct and indirect costs incurred pursuant to a Completion and Repayment Agreement. TOUSA Inc. further agreed to pay, when due, half of the Partnership's obligations to Colonial Bank in the event of any bankruptcy on the part of the Partnership. TOUSA Inc. and Lennar Corp. also executed an Environmental Indemnity in favor of Colonial Bank. Paul Steven Singerman, Esq., at Berger Singerman, P.A., in Miami, Florida, told the Court that although development of the initial section of lots under the Newmark/Lennar Partnership is 90% finished, the Debtors estimate that it would require further investment of $100,000 to finalize that initial section for sale. Given Colonial Bank's refusal of further financing, any financing needs must be supplied by the TOUSA Members or the Lennar Members as cash advances. The Lennar Members have made or are to make cash advances of $250,000 and $300,000 to the Partnership that may be treated as loans under the Partnership Agreement. The Debtors, however, have determined that a cash investment in the Partnership is not prudent based on their analyses of the prospects for the Partnership's real estate developments, current market conditions, their current cash needs and business plan, according to Mr. Singerman. More importantly, he points out, the Debtors are not in the position to fund future required capital investments under the Partnership Agreement and the funding made by Lennar Members are loans to the Partnership, which would have to be repaid before recovery is available to the TOUSA Members on account of their equity interests under the Partnership. Against this backdrop, the Debtors have decided that the Newmark/Lennar Partnership is no longer a valuable asset of their estates. Accordingly, the TOUSA Members agreed to sell their interests in the Partnership to the Lennar Members. The parties subsequently reached an agreement with respect to the decision of the TOUSA Members to sell interests. The salient terms of the parties' Agreement are: (a) TOUSA Homes and Newmark Homes will sell their interests in the Partnership to Lennar Homes and Lennar Texas for $250,000. At the closing, TOUSA Homes and Newmark Homes will execute assignments of the partnership interests to the Lennar Members through forms of conveyance. The TOUSA Members and the Lennar Members have agreed to exchange mutual releases. (b) TOUSA, Inc., Lennar Corp. and Colonial will enter into a Loan Modification Agreement, which amends certain terms of the Revolver Loan, effective after the sale of the TOUSA Members' interests to the Lennar Members. The parties also agree to exchange mutual releases under the Environmental Indemnity and Completion Agreement. (c) The TOUSA Members and the Lennar Members will amend the Partnership Agreement to reflect the TOUSA Members' withdrawal from the Partnership. Moreover, the parties will amend a Certificate of Formation of the Partnership to reflect that TOUSA Homes is no longer a general partner under the Partnership and to reflect the name change of the Partnership to Lennar Central Texas, L.P. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No. 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger Singerman, to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008, (Bankr. S.D. Fla. Case No.: 08-20746). It listed assets between $1 million and $10 million, and debts between $1 million and $10 million. The Official Committee of Unsecured Creditors hired Patricia A. Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff & Sitterson, P.A., as its local counsel. TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets of $1,734,422,756 and total liabilities of $2,300,053,979. Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by TOUSA Inc. and its affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) TROPICANA ENTERTAINMENT: Plans Going to Creditors for Vote ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has approved the separate disclosure statements filed by Tropicana Entertainment LLC and 26 other debtors; and Tropicana Las Vegas Holdings, LLC, and six debtor affiliates in relation to their bankruptcy plans. In that light, the LandCo Debtors (Tropicana Las Vegas, et al.) and Opco Debtors (Tropicana Entertainment, et al.) may now begin distributing ballots for their respective Chapter 11 plans. Judge Kevin Carey has set this timeline for each of the OpCo and LandCo Plans: -- March 10 as the record date for the purpose of determining claims that are entitled to receive solicitation packages. -- April 17, as the voting deadline for the Plan. -- April 20 as the deadline for filing objections to the Plan. -- April 27, 2009 at 10:00 a.m. as the first day of the confirmation hearing. According to the LandCo Disclosure Statement, the LandCo Plan provides for 0% to 12.3% recovery by unsecured creditors, the cancellation of existing stock and zero recovery for stockholders. Holders of the LandCo Credit Facility Claims will receive full recovery for the first $358,000,000 to $378,000,000, but zero recovery for a deficiency claim of $65 million to $85 million. A copy of the LandCo Disclosure Statement, as first amended, is available at http://researcharchives.com/t/s?3a25 For the OpCo Plan, unsecured claims totaling up to $330,200,000 will receive less than 1% recovery, and also the cancellation of all equity interests. Holders of the OpCo Credit Facility claims aggregating $552 million to $707 million will receive full recovery. A copy of the Opco Disclosure Statement, as first amended, is available at http://researcharchives.com/t/s?3a24 About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC filed for Chapter 11 protection on May 5, 2008, (Bankr. D. Del. Case No. 08-10856). Its debtor- affiliates filed for separate Chapter 11 petitions but with no case numbers assigned yet. Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) U.S. MORTGAGE: Meeting to Form Creditors' Panel on March 11 ----------------------------------------------------------- Roberta A. DeAngelis, Acting United States Trustee for Region 3, will hold an organizational meeting on March 11, 2009, at 2:00 p.m. in the bankruptcy case of U.S. Mortgage Corp. aka CU National Mortgage. The meeting will be held at the United States Trustee's Office, One Newark Center, 14th Floor, Room 1401, in Newark, New Jersey. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. UNITED AIR: Bank Debt Sells at 50% Discount in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which UAL Corporation's United Air Lines subsidiary is a borrower traded in the secondary market at 50.15 cents-on-the-dollar during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 1.96 percentage points from the previous week, the Journal relates. The loan matures on February 13, 2013. United pays 200 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's B+ rating. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on July 29, 2008, Standard & Poor's Ratings Services lowered its ratings on UAL Corp. and subsidiary United Air Lines Inc. (both rated B- /Negative/--), including lowering the long-term corporate credit ratings on both entities to 'B-' from 'B', and removed the ratings from CreditWatch, where they had been placed with negative implications May 22, 2008, as part of an industrywide review. The outlook is negative. UNITED AMERICA: A.M. Best Assigns BB+ Rating on Preferred Stock --------------------------------------------------------------- A.M. Best Co. assigned on March 6, 2009, indicative debt ratings of "bbb" to senior unsecured debt, "bbb-" to subordinated securities and "bb+" to preferred stock, which may be issued under United America Indemnity, Ltd.'s (UAI) (Georgetown, Cayman Islands) [NASDAQ: INDM] recently filed shelf registration statement. Proceeds from securities issued under the shelf registration statement will be used for general corporate purposes. The outlook assigned to these ratings is stable. The issuer credit rating of "bbb" of UAI is unchanged. Despite UAI's disappointing fourth quarter 2008 earnings announcement (including $84 million of goodwill impairments) and sharp decline in its shareholders' equity in 2008, its financial leverage ratios, as measured by its debt-to-equity and debt-to- capital ratios of approximately 19.3% and 16.2%, respectively, remain moderate and well within A.M. Best's established guidelines for its current ratings. The indicative credit ratings assigned anticipate that UAI will continue to manage its financial leverage conservatively. Furthermore, these indicative ratings also take into consideration UAI's planned $100 million rights offering, which was announced on March 4, 2009. This rights offering is expected to be completed by April 6, 2009, and will be fully back-stopped by Fox Paine & Company, UAI's largest shareholder. Any shares that are not subscribed pursuant to this rights offering will be purchased by Fox Paine & Company. Proceeds will be used for strategic initiatives, to enhance liquidity to provide financial flexibility and for other corporate purposes. As of year-end 2008, UAI maintained cash and cash equivalent investments totaling approximately $292.6 million, which provides adequate liquidity. Interest coverage and cash flows also are in line with expectations. Once completed, the $100 million rights offering should further enhance UAI's liquidity and overall leverage ratios. UNITED METHODIST: S&P Puts Stable Outlook on Bonds' BB+ Rating -------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook to stable from negative on debt issued by New Jersey Economic Development Authority for United Methodist Homes of New Jersey. At the same time, Standard & Poor's affirmed its 'BB+' long-term rating on the authority's $99.2 million series 1998, 1999, 2003, and 2008A bonds issued for UMH. The outlook revision largely reflects management's decision not to proceed with a $40 million project to rebuild Francis Asbury Manor. The stable outlook is further supported by adequate liquidity, which has held up despite the market downturn. The 'BB+' rating reflects weak operating earnings for the entire system coupled with some concern that soft year-to-date occupancies and the opening of additional units at Bristol Glen may further pressure year-to-date operations. UMH also demonstrates continued solid nonoperating earnings that drive good excess margins and an adequate balance sheet characterized by solid liquidity, although this strength is partly offset by extremely high leverage. In addition, UMH has geographic and service line dispersion throughout the state of New Jersey. "The stable outlook reflects our expectations that, without additional debt and project risk associated with the replacement of Francis Asbury Manor, UMH's financial profile should stabilize at the current rating level," said Standard & Poor's credit analyst Cynthia Keller Mcdonald. "Slight operating losses are acceptable at this rating level as long as UMH maintains healthy liquidity balances, although continued reliance on nonoperating revenue is a negative rating factor," said Ms. Keller Macdonald. A lower rating or outlook change could be possible if the Francis Asbury Manor project is resurrected or if operating losses escalate in light of soft volumes. A return to an investment- grade rating is not likely in the absence of a longer record of positive operations at the system level. UMH owns or operates 10 long-term-care facilities throughout New Jersey. A pledge of gross revenues and mortgages on the obligated group facilities secure the bonds. UMH is not a party to any swaps at this time. US FOODSERVICE: Bank Debt Sells at 40% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which US Foodservice is a borrower traded in the secondary market at 60.21 cents-on-the- dollar during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 2.45 percentage points from the previous week, the Journal relates. The loan matures July 3, 2014. US Foodservice pays 275 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B2 rating and Standard & Poor's N.R. rating. Syndicated loans of other retailers also trade at substantial discount in the secondary market during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. Participations in a syndicated loan under which Neiman Marcus Group Inc. is a borrower traded at 61.50 cents-on-the-dollar, a drop of 3.57 percentage points from the previous week. The loan matures on April 6, 2013. Neiman Marcus pays 175 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB rating. Participations in a syndicated loan under which Michaels Stores Inc. is a borrower traded at 54.08 cents-on-the-dollar, a drop of 2.28 percentage points from the previous week. The loan matures on October 31, 2013. Michaels Stores pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B2 rating and Standard & Poor's B rating. Blockbuster Inc. bank debt traded at 66.70 cents-on-the-dollar, a drop of 2.50 percentage points from the previous week. The loan matures on August 20, 2011. Blockbuster pays 375 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B1 rating and Standard & Poor's B rating. Yankee Candle bank debt trades at 61.80 cents-on-the-dollar, an increase of 1.63 percentage points from the previous week. The loan matures February 6, 2014. Yankee Candle pays 200 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB- rating. US Foodservice, headquartered in Rosemont, Illinois, is the United States' second largest distributor of food and related products to more than 250,000 customers, including restaurants, healthcare facilities, hotels, schools and governmental facilities. The Company employs more than 26,000 associates and operates more than 60 distribution centers, offering more than 300,000 fresh, frozen, dry and nonfood products from every major national brand and a robust offering of its own exclusive brands. VALASSIS COMMUNICATIONS: Bank Debt Sells at 28% Discount -------------------------------------------------------- Participations in a syndicated loan under which Valassis Communications is a borrower traded in the secondary market at 72.33 cents-on-the-dollar during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 2.50 percentage points from the previous week, the Journal relates. The loan matures on March 2, 2014. Valassis pays 175 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba2 rating and Standard & Poor's B+ rating. About Valassis Communications Valassis Communications, Inc. -- http://www.valassis.comor http://www.redplum.com-- is a media and marketing services company, serving more than 15,000 advertisers. Its RedPlum media portfolio delivers value on a weekly basis to over 100 million shoppers across a multi-media platform - in-home, in-store and in- motion. Headquartered in Livonia, Michigan with approximately 7,000 associates in 28 states and nine countries, Valassis is recognized for its associate and corporate citizenship programs, including its America's Looking for Its Missing Children(R) program. Valassis companies include Valassis Direct Mail, Inc., Valassis Canada, Promotion Watch, Valassis Relationship Marketing Systems, LLC and NCH Marketing Services, Inc. * * * As reported by the Troubled Company Reporter on February 24, 2009, Valassis Communications received notice from the New York Stock Exchange on Feb. 20, 2009, that it was not in compliance with certain continued listing standards applicable to its common stock. The notice indicates that Valassis is below criteria because both the average market capitalization of its common stock over a consecutive 30 trading-day period was less than $75 million and its stockholder equity was less than $75 million. The TCR said January 19, 2009, that Standard & Poor's Ratings Services lowered its corporate credit rating on Valassis Communications to 'B' from 'B+'. This rating, as well as all issue-level ratings on Valassis, was removed from CreditWatch, where it was placed with negative implications on Nov. 6, 2008. The rating outlook is negative. VINCENT PITTS: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Vincent Y. Pitts 4911 Lake Court Country Club Hills, IL 60478 Bankruptcy Case No.: 09-06250 Chapter 11 Petition Date: February 26, 2009 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Susan Pierson Sonderby Debtor's Counsel: Debra J. Vorhies Levine Law Offices of Debra V. Levine 53 W. Jackson Boulevard, Suite 909 Chicago, IL 60604 Tel: (312) 259-5970 Fax: (773) 244-0094 Email: debravlevine@yahoo.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ilnb09-06250.pdf VISTEON CORP: Slide Continues; Bank Debt Sells at 84% Discount -------------------------------------------------------------- Participations in a syndicated loan under which Visteon Corp. is a borrower traded in the secondary market at 16.07 cents-on-the- dollar during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 1.64 percentage points from the previous week, the Journal relates. The loan matures May 30, 2013. Visteon pays 300 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's B- rating. Syndicated loans of other auto parts suppliers also trade at substantial discount in the secondary market during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. Dana Corp. bank debt traded in the secondary market at 28.71 cents-on-the-dollar, a drop of 1.71 percentage points from the previous week. The loan matures on January 31, 2015. Dana Corp. pays 375 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's B+ rating. Lear Corp. bank debt traded in the secondary market at 31.17 cents-on-the-dollar, a drop of 3.40 percentage points from the previous week. The loan matures on March 29, 2012. Lear Corp. pays 250 basis points above LIBOR to borrow under the facility. The bank debt is not rated. Accuride Corp. bank debt traded at 62.00 cents-on-the-dollar, a drop of 5.60 percentage points from the previous week. The loan matures on January 6, 2012. Accuride pays 225 basis points above LIBOR to borrow under the facility. The bank debt is not rated by Moody's. It carries a junk rating by Standard & Poor's. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is an automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Mich. (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. * * * As reported by the Troubled Company Reporter on February 27, 2009, Visteon, for fourth quarter 2008, posted a net loss of $328 million on sales from continuing operations of $1.7 billion. For fourth quarter 2007, Visteon reported a net loss of $43 million on sales of $2.9 billion. For the full year 2008, Visteon reported a net loss of $663 million on sales of $9.5 billion compared with a net loss of $372 million on sales of $11.3 billion for full year 2007. As of Dec. 31, 2008, Visteon had $5.26 billion in total assets, $1.71 billion in current liabilities, $2.61 billion in long-term debt. Visteon also had $627 million in employee benefit obligations, including pension obligations; $404 million in postretirement benefits other than pensions; $139 million in deferred income tax obligations; $365 million in other non-current liabilities; and $264 million in minority interests in consolidated subsidiaries. Visteon has an $869 million shareholders' deficit. The TCR said on Jan. 14, 2009, that Standard & Poor's Ratings Services lowered its corporate credit rating on Visteon Corp. to 'CCC' from 'B-' and removed all the ratings from CreditWatch, where they had been placed on Nov. 13, 2008, with negative implications. The outlook is negative. At the same time, S&P also lowered its issue-level ratings on the company's debt. The TCR reported on Nov. 27, 2008, that Moody's Investors Service lowered Visteon Corporation's corporate family and probability of default ratings to Caa2, and Caa1, respectively. In a related action, Moody's also lowered the ratings of Visteon's senior secured term loan to B3 from Ba3, unguaranteed senior unsecured notes to Caa3 from Caa2, and guaranteed senior unsecured notes to Caa2 from Caa1. Visteon's Speculative Grade Liquidity remains SGL-3. The outlook is negative. Bankruptcy Filing Imminent The TCR, citing The Wall Street Journal, said in January that Visteon has hired Kirkland & Ellis LLP as legal counsel and Rothschild Inc. as financial adviser to prepare for a possible bankruptcy filing. According to the Journal's John D. Stoll and Jeffrey McCracken, people familiar with the matter said that Visteon and its advisers are studying whether it should file for bankruptcy pre-emptively to conserve its cash. VPB LLC: Lender Sets March 20 Auction of Village Place ------------------------------------------------------ CF PB Lender, LLC, an Illinois limited liability company, as secured party, disclosed in a legal notice dated February 27, 2009, that it will offer at a public auction sale on March 20, 2009, at 11:00 a.m. Eastern Daylight Time, the 100% membership interest and other pledged collateral of VPB, LLC, in Village Place Brookhaven, LLC. The auction sale will be held at the offices of McKenna Long & Aldridge, LLP, 303 Peachtree Street, NE, Suite 5300, Atlanta, Georgia 30308. The pledged collateral is pursuant to a Pledge and Security Agreement from Debtor to Wrightwood Capital Lender LLC, the original secured party, dated as of January 18, 2007, as assigned to the secured party. Based on information provided by the Debtor and Village Place Brookhaven, it is its understanding of the secured party that Village Place Brookhaven owns (in fee) and operates the mixed used development of office, residental and retail condominium units located at the NE corner of Dresden Drive and Caldwell Road, DeKalb County, Atlanta, Georgia, commonly known as Village Place Brookhaven. The project is and, after the sale has been conducted, will continue to be subject to mortgage liens totalling approximately $17,424,837 as of Feb. 1, 2009. As of February 1, 2009, the total amount of the indebtedness, exclusive of attorneys' fees and costs, was approximately $4,855,085. At the auction sale, the membership interest will be offered as a single asset and not in parts or as separate assets. Sale shall be on an "as is, where is" basis. A bid deposit equaal to 10% of a successful bid will be required to be paid by cashier's check or by wire transfer on the day of the sale. The balance of the purchase price will be due at closing, which shall take place not later that 5 business days after the sale. For information concerning the sale, please contact: McKenna Long & Aldridge LLP 303 Peachtree Street, NE Suite 5300 Atlanta, Georgia 30308 Tel: (404) 527-8411 W.R. GRACE: Failed to Disclose Asbestos in Libby, Says Witness -------------------------------------------------------------- Bloomberg's Amy Linn and Bob Van Voris report that a key witness in the criminal trial of W.R. Grace & Co. testified that no one from the company disclosed that 21 acres of Libby, Montana, land it sold her and her husband was contaminated with asbestos. W.R. Grace and its former executives face charges of conspiring to expose residents to the tainted vermiculite, and hiding the dangers and obstructing a government cleanup. Bloomberg relates that the witness, Lerah Parker, told jurors in a trial in federal court in Missoula, Montana, about a conversation with Alan Stringer, the former Grace mine manager in Libby. In the spring of 2000, after learning from news coverage and government officials that asbestos-laced vermiculite on their property was a serious health risk, Ms. Parker related calling Mr. Stringer, a friend, and asked him to meet her for coffee. "I needed to know for sure if he knew," Ms. Parker told the court, breaking into tears. "I said, 'I want you to tell me honestly as my friend: In selling us the property, did you know -- did you know this was going to happen to us?' And Alan just looked at me, put his cup of coffee down, and he left. And I knew he'd been lying to us all this time." Ms. Parker and her husband, Mel, who also testified, have both been diagnosed with asbestos-related lung disease. Mr. Stringer, one of seven former Grace Officials charged in the criminal case in 2005, died in 2007 of non-asbestos-related cancer. According to the source, the government alleges that "hundreds if not thousands" of people are suffering asbestos-related illnesses in Libby, where Grace mined and processed vermiculite ore from 1963 until it closed the mine in 1990. The individual defendants face the possibility of five years in prison if convicted of conspiracy. Two are charged with violating the Clean Air Act. Grace, in bankruptcy since 2001, has promised to pay creditors and people hurt by its asbestos products $3.9 billion under its reorganization proposal. If convicted, the company may be forced to pay almost $1.3 billion in fines and restitution, government lawyers told a bankruptcy court in Delaware. Physician Alan Whitehouse, a pulmonologist who is an expert in asbestos-related illness, testified about what he called an "epidemic" of disease he's found among residents in the Libby area. Since the 1990s, Dr. Whitehouse has been diagnosing lung disease in and around Libby, a northwest Montana town of about 2,500 people, helping to pinpoint asbestosis and mesothelioma, a rare and deadly cancer. Dr. Whitehouse, as cited by the report, told the court, "Before the 1980s, it would be a rare day when I saw even one case of mesothelioma. We're in an area where there's a lot of asbestos exposure and the highest mesothelioma rate in the nation, and it's simply due to the fact that there's so much asbestos floating around". Dr. Whitehouse added that he saw as many as 11 people with mesothelioma in and around Libby who didn't either work in the mine or live with a miner. Judge Molloy granted a defense objection to the statement and struck it from the record, the report says. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 13, 2004. On Jan. 13, 2005, they filed an Amended Plan and Disclosure Statement. The hearing to consider the adequacy of the Debtors' Disclosure Statement began on Jan. 21, 2005. The Debtors' exclusive period to file a chapter 11 plan expired on July 23, 2007. Estimation of W.R. Grace's asbestos personal injury liabilities commenced on Jan. 14, 2008. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) WEST CORP: Bank Debt Sells at 30% Discount in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which West Corp. is a borrower traded in the secondary market at 70.56 cents-on-the- dollar during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 2.59 percentage points from the previous week, the Journal relates. West Corp. pays 237.5 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B1 rating and Standard & Poor's BB- rating. As reported by the Troubled Company Reporter on February 23, 2009, the bank debt traded in the secondary market at 75.50 cents-on- the-dollar during the week ended February 20, 2009, a drop of 1.96 percentage points from the previous week. Founded in 1986 and headquartered in Omaha, Nebraska, West Corporation -- http://www.west.com/-- provides outsourced communication solutions to many of the world's largest companies, organizations and government agencies. West has a team of 41,000 employees based in North America, Europe and Asia. WHITE MOUNTAINS: A.M. Best Affirms "bb" Preferred Stock Rating -------------------------------------------------------------- A.M. Best Co. has affirmed the financial strength ratings (FSR) of A- (Excellent) and issuer credit ratings (ICR) of "a-" of White Mountains Reinsurance Company of America (White Mountains Re America) (New York, NY) and White Mountains Re Bermuda Ltd. (White Mountains Re Bermuda). Both companies are subsidiaries of White Mountains Re Group, Ltd. (White Mountains Re Group), a downstream intermediate holding company of White Mountains Insurance Group, Ltd. (White Mountains) [NYSE: WTM]. A.M. Best also has affirmed the ICR and senior debt ratings of "bbb-" on $400 million 6.375% senior unsecured notes and the preferred stock rating of "bb" on $250 million fixed/floating perpetual non-cumulative preference shares of White Mountains Re Group. The outlook for all ratings is stable. All companies are domiciled in Hamilton, Bermuda, unless otherwise specified. The rating affirmations reflect the importance of the companies to White Mountains, the enhanced risk management strategy and excellent level of risk-adjusted capitalization, offset by net operating losses in 2008. These operating losses predominately resulted from significant net realized and unrealized capital losses from investments, higher natural catastrophe losses and charges that resulted from the strengthening of prior accident years' loss reserves. In 2008, White Mountains Re Group increased prior year loss reserves by $80 million after a comprehensive review in the second quarter. The ratings also reflect the importance of the growth and profitability of the automobile insurance business assumed from one of White Mountains Re Group's affiliated companies. White Mountains Re Bermuda was recapitalized by White Mountains Re Group in 2007 to expand the group's global reinsurance operating platform and build a stronger presence in the Bermuda reinsurance marketplace. WILDWOOD INDUSTRIES: Involuntary Chapter 11 Case Summary -------------------------------------------------------- Alleged Debtor: Wildwood Industries, Inc. 903 Morrissey Drive Bloomington, IL 61701 Case Number: 09-70602 Type of Business: The Debtor provides paper mill services. Involuntary Petition Date: March 5, 2009 Court: Central District of Illinois (Springfield) Judge: Mary P. Gorman Petitioner's Counsel: Alex Darcy, Esq. adarcy@askounisdarcy.com Thomas V Askounis, Esq. taskounis@askounisdarcy.com Askounis & Darcy, PC 401 North Michigan Avenue, Suite 550 Chicago, IL 60611 Tel: (312) 784-2400 Fax: (312) 784-2410 --- and --- Gabriel Reilly-Bates, Esq. gbates@shefskylaw.com Shefsky & Froelich 111 E. Wacker Avenue #2800 Chicago, IL 60611 Tel: (312) 836-4162 Fax: (312) 275-7638 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Lyon Financial Services, Inc. breach of contract; $1,489,277 dba US Bancorp Business unsecured: $13,475 Equipment Finance Group 1310 Madrid road, Suite 100 Marshall, MN 56258 U.S. Bancorp Equipment breach of contract; $2,146,760 Finance, Inc. fka U.S. unsecured: $13,475 Bancorp Leasing & Financial 13010 SW 68th Parkway Portland, OR 97223 Velocity Financial Group breach of contract; $4,256,188 Inc., individually and unsecured: $13,475 as attorney-in-fact for Velocity Lease Funding LLC 10255 W. Higgins Road Suite 630 Rosemont, IL 60018 First Premier Capital, LLC breach of contract; $7,383,230 5201 Eden Avenue, Suite 180 unsecured: $13,475 Edina, M 55436 YANKEE CANDLE: Bank Debt Halts Slide, Sells at 38% Discount ----------------------------------------------------------- Participations in a syndicated loan under which Yankee Candle is a borrower traded in the secondary market at 61.80 cents-on-the- dollar during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.63 percentage points from the previous week, the Journal relates. The loan matures February 6, 2014. Yankee Candle pays 200 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB- rating. As reported by the Troubled Company Reporter, the bank debt traded in the secondary market at 54.70 cents-on-the-dollar during the week ended January 16, 2009, an increase of 2.30 percentage points from the previous week. Syndicated loans of other retailers also trade at substantial discount in the secondary market during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. Participations in a syndicated loan under which Neiman Marcus Group Inc. is a borrower traded at 61.50 cents-on-the-dollar, a drop of 3.57 percentage points from the previous week. The loan matures on April 6, 2013. Neiman Marcus pays 175 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB rating. Participations in a syndicated loan under which Michaels Stores Inc. is a borrower traded at 54.08 cents-on-the-dollar, a drop of 2.28 percentage points from the previous week. The loan matures on October 31, 2013. Michaels Stores pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B2 rating and Standard & Poor's B rating. Blockbuster Inc. bank debt traded at 66.70 cents-on-the-dollar, a drop of 2.50 percentage points from the previous week. The loan matures on August 20, 2011. Blockbuster pays 375 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B1 rating and Standard & Poor's B rating. US Foodservice bank debt traded at 60.21 cents-on-the-dollar, a drop of 2.45 percentage points from the previous week. The loan matures July 3, 2014. US Foodservice pays 275 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B2 rating and Standard & Poor's N.R. rating. Headquartered in South Deerfield, Massachusetts, Yankee Candle Company designs, manufactures, and distributes premium scented candles in the U.S. * 2006 Law Hurts Online Gambling Sites -------------------------------------- Kara Deniz at Ecommerce Journal reports that the law that the U.S. Congress passed in 2006 that prevents banks and financial institutions from letting their clients make deposits at online gambling sites has made it difficult for most players. According to Ecommerce Journal, the 2006 law made it illegal to gamble online for individuals. As it appeared to be difficult to detect players of online gambling sites, it was decided to just go after the companies and financial institutions that allow the deposits, Ecommerce Journal states. Since the law was implemented, online gambling sites have to use other depositing methods like e-cash options and wire transfers, Ecommerce Journal relates. Ecommerce Journal says that many online casinos have become bankrupt due to the ban. According to the report, about 75% of the companies' profits and incomes used to come from U.S. clients. Ecommerce Journal states that under the current economic conditions, the 2006 gambling law may have to be repealed so that the government can start collecting taxes from online wagering profits. The Ecommerce Journal notes that there is a bill on the House may reexamine the prohibition. * A.M. Best Keeps Stable Outlook on U.S. Commercial Lines Market ---------------------------------------------------------------- A.M. Best Co. said on March 4, 2009, it has completed its assessment of the U.S. commercial market and continues to view the outlook as stable despite the ongoing soft period in the cycle, a contracting economy and the existence of a financial market crisis. For commercial lines, most key indicators suggest rates will continue to be soft and competitive well into 2009. However, that being said, continued turmoil in the financial markets together with credit tightening and low investment yields has many believing that the end of the soft market could be near. In 2009, Best expects an overall slowing of rate decreases and a flattening of rates for most lines of business. For the vast majority of commercial lines insurers, investment impairments and mark to market adjustments have been manageable, as balance sheets remain relatively intact with capital levels that remain appropriate for their ratings. On the other hand, earnings prospects for commercial lines insurers are likely to be dimmed by slower growth and less business opportunities via lower payrolls (unemployment / construction) and a decline in gross receipts (slower economic growth). Weaker investment earnings and moderating cash flows are also likely to impact future earnings prospects due to the decline in new money yields. A.M. Best does not expect rating actions to move profoundly in one direction, with the number of upgrades/positive outlooks and downgrades/negative outlooks to be fairly balanced over the next year. A.M. Best believes the overall commercial lines segment will continue to maintain adequate balance sheet strength, profitability and liquidity in 2009. Additionally, with a modest semblance of stability, price levels continue to support reasonable profitability. * A.M. Best: 2009 Global Non-Life Reinsurance Outlook Is Stable --------------------------------------------------------------- A.M. Best Co. is maintaining a stable outlook in 2009 for the global reinsurance sector for the third consecutive year. This current outlook implies that the majority of 2009 reinsurer rating actions are likely to be affirmations with only a modest number of anticipated rating or outlook changes. Factors that support this view are sound underlying operating earnings generated over the most recent timeframe, assessment that management teams have demonstrated underwriting discipline and our view that the risk-adjusted capital adequacy of the segment is currently adequate relative to existing ratings with sufficient cushion to absorb a normal level of catastrophic activity. On a total return basis, 2008 margins were compressed largely as the result of drastically rising credit spreads and severely depressed asset valuations. From an underwriting perspective, despite one of the worst catastrophe years on record, the majority of reinsurers generated combined ratios below 100%, demonstrating strong underwriting discipline. Factors that could lead to an outlook change from stable to negative for the segment include the segment's ability to maintain current pricing discipline and to manage aggregate exposures, as well as the potential for further drains on capital should the negative investment trend continue or worsen. The playing field of underwriting opportunities perhaps has shifted back to traditional reinsurance underwriting, given the removal of capacity from the market as a result of the confluence of a global capital market crisis and severe catastrophe losses. Additionally, financial flexibility has been adversely affected by a near-freeze in capital markets, which has led to an exceptionally high cost of capital. The issuance of insurance linked securitizations has also declined. Due to these factors, A.M. Best expects that the demand for reinsurance should increase in 2009, largely for capital relief purposes. More than ever in 2009 the challenge will be for reinsurers to ensure that business is written at acceptable rates and to write business that can be supported by their respective balance sheets. Enterprise Risk Management (ERM) was firmly tested in 2008 as a combination of the worst global economic crisis of a lifetime coupled with significant catastrophe losses severely tested the enterprise-risk frameworks recently established by companies in the reinsurance sector. It is apparent that in large part natural catastrophe losses were contained within probable maximum loss estimates, despite several carriers increasing loss estimates for Hurricane Ike during the fourth quarter. Reinsurers did get a break from higher client retentions and the fact that, absent the Ike and Gustav losses, record catastrophe loss experience within the U.S. mostly comprised a large number of smaller events that were contained at the primary level. The magnitude of investment losses was a surprise to many as several reinsurance companies experienced a pronounced reduction in capitalization. Additionally, although the credit crunch began at the onset of the subprime meltdown in August of 2007, it did not prevent many reinsurers undertaking share buyback programs. With the benefit of hindsight, it appears that some management teams did not consider the opportunity cost of managing short-term share price values relative to the turn in the market cycle that accelerated in the latter part of 2008. The over-arching issue facing reinsurers is that the wells are dryer going into 2009, as capital is not expected to flow into the industry in a meaningful way, even if a considerable industry-wide catastrophe where to occur. This represents a different position compared with other cycle inflection points, for example, following the World Trade Center tragedy and Hurricane Katrina when new capital poured into the segment. The January 2009 renewal highlighted cedants' resistance to price increases with meaningful rate hikes confined mostly to peak-zone catastrophe risks. It is expected that catastrophe-exposed property risks will continue to experience pricing increases with casualty accounts turning at a slower rate. The renewals through July 1 will likely be impacted by the changes to the Florida Hurricane Catastrophe Fund, which should increase the demand for reinsurance. While there are expected to be underwriting opportunities in 2009, reinsurers must be careful when deploying capital due to constrained financial flexibility given the present hurdles for carriers wishing to access capital markets at a reasonable price. However, for carriers that have successfully managed capital and have strong ERM practices, operating results for 2009 are expected to be favorable, providing opportunities to replenish capital that was lost in 2008. * Autopart Makers' Bank Debt Continues Slump in Secondary Market ---------------------------------------------------------------- Syndicated loans of auto parts suppliers trade at substantial discount in the secondary market during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. Participations in a syndicated loan under which Visteon Corp. is a borrower traded in the secondary market at 16.07 cents-on-the- dollar during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 1.64 percentage points from the previous week, the Journal relates. The loan matures May 30, 2013. Visteon pays 300 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's B- rating. Van Buren Township, Michigan-based Visteon posted a net loss of $328 million on sales from continuing operations of $1.7 billion for fourth quarter 2008. For fourth quarter 2007, Visteon reported a net loss of $43 million on sales of $2.9 billion. For the full year 2008, Visteon reported a net loss of $663 million on sales of $9.5 billion compared with a net loss of $372 million on sales of $11.3 billion for full year 2007. As of Dec. 31, 2008, Visteon had $5.26 billion in total assets, $1.71 billion in current liabilities, $2.61 billion in long-term debt. Visteon also had $627 million in employee benefit obligations, including pension obligations; $404 million in postretirement benefits other than pensions; $139 million in deferred income tax obligations; $365 million in other non-current liabilities; and $264 million in minority interests in consolidated subsidiaries. Visteon has an $869 million shareholders' deficit. The TCR, citing The Wall Street Journal, said in January that Visteon has hired Kirkland & Ellis LLP as legal counsel and Rothschild Inc. as financial adviser to prepare for a possible bankruptcy filing. According to the Journal's John D. Stoll and Jeffrey McCracken, people familiar with the matter said that Visteon and its advisers are studying whether it should file for bankruptcy pre-emptively to conserve its cash. Lear Corp. bank debt traded in the secondary market at 31.17 cents-on-the-dollar, a drop of 3.40 percentage points from the previous week. The loan matures on March 29, 2012. Lear Corp. pays 250 basis points above LIBOR to borrow under the facility. The bank debt is not rated. Based in Southfield, Michigan, Lear had roughly $1.6 billion in cash and cash equivalents as of December 31, 2008, providing more than adequate resources to satisfy ordinary course business obligations, according to the Company. Lear had $6.8 billion in total assets, and $3.5 billion in reported debt as of December 31, 2008. In January, Moody's Investors Service lowered the Corporate Family and Probability of Default ratings of Lear, to Caa2 from B3. In a related action, the rating of the senior secured term loan was lowered to Caa1 from B2, and the rating on the senior unsecured notes was lowered to Caa2 from B3. The ratings remain on review for further possible downgrade. Standard & Poor's Ratings Services also lowered its corporate credit rating on Lear to 'B-' from 'B'. At the same time, S&P also lowered its issue-level ratings on the company's debt. The ratings remain on CreditWatch, where they had been placed with negative implications on November 13, 2008. Dana Corp. bank debt traded at 28.71 cents-on-the-dollar, a drop of 1.71 percentage points from the previous week. The loan matures on January 31, 2015. Dana Corp. pays 375 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's B+ rating. Based in Toledo, Ohio, Dana emerged from Chapter 11 bankruptcy in January 2008. In January 2009, Standard & Poor's Ratings Services lowered its ratings on Dana Holding Corp., including the corporate credit rating, which was lowered to 'B' from 'B+'. The ratings were also removed from CreditWatch, where they had been placed with negative implications on November 13, 2008. The outlook is negative. "The downgrade reflects our view that very weak market conditions in most of its business segments in 2009 will hinder the company's post-bankruptcy restructuring efforts," said Standard & Poor's credit analyst Nancy Messer. "We expect revenues to be reduced by weak auto sales and production in North America, weak auto sales in Europe, and the U.S. recession, which has stalled the recovery of commercial truck sales. Lacking an expanding revenue base, S&P believes the benefit from Dana's ongoing initiative to optimize its manufacturing footprint will fall short of S&P's previous near-term expectations," she continued. For example, for the last three months of 2008, the seasonally adjusted annual rate of light-vehicle sales in the U.S. was below 11 million units, and S&P expects sales in 2009 to be 10 million units, 24% below 2008 actual sales. Accuride bank debt traded at 62.00 cents-on-the-dollar during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 5.60 percentage points from the previous week, the Journal relates. The loan matures on January 6, 2012. Accuride pays 225 basis points above LIBOR to borrow under the facility. The bank debt is not rated by Moody's. It carries a junk rating by Standard & Poor's. Accuride Corporation, headquartered in Evansville, Indiana, is a diversified North American manufacturer and supplier of commercial vehicle components. Principal products include wheels, wheel-end components and assemblies, truck body and chassis parts, and seating assemblies. Revenues in 2007 were approximately $1.0 billion. * House Passes "Cram Down" Legislation for Troubled Homeowners -------------------------------------------------------------- Greg Hitt at The Wall Street Journal reports that the House has approved a "cram down" legislation that would let troubled homeowners ask bankruptcy judges for relief from mortgage debts. WSJ relates that President Barack Obama has agreed with giving judges new authority to modify mortgages, and other supporters of the move say that the proposal to give courts cram-down authority could spur mortgage servicers to move aggressively to help borrowers to avoid having modified loans forced on them by a judge. According to WSJ, much of the financial-services industry is against the proposal because it would create uncertainty in an already troubled market and force them to raise the cost of lending. This convinced some Democrats to block an earlier version of the bill, says the report. The Democrats, according to the report, argued that greater efforts were needed to maker sure that homeowners make good-faith attempts to work with their lenders, before going into bankruptcy. WSJ notes that the revised mortgage legislation was approved on Thursday. * Retailers' Bank Debt Continues Slump in Secondary Market ---------------------------------------------------------- Syndicated loans of retailers trade at substantial discount in the secondary market during the week ended March 6, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. Participations in a syndicated loan under which Blockbuster Inc. is a borrower traded in the secondary market at 66.70 cents-on- the-dollar, a drop of 2.50 percentage points from the previous week. The loan matures on August 20, 2011. Blockbuster pays 375 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B1 rating and Standard & Poor's B rating. Based in Dallas, Texas, Blockbuster last week clarified that it has no intention of filing for bankruptcy. The Company has hired the law firm of Kirkland & Ellis LLP to advise it with respect to its ongoing financing and capital raising initiatives. Blockbuster made a pitch to acquire Circuit City early last year, but withdrew the offer after completing due diligence. Circuit City has since filed for bankruptcy. The TCR said on March 6, 2009, that Standard & Poor's Ratings Services placed its ratings, including the 'B-' corporate credit rating, on Blockbuster on CreditWatch with negative implications. This action reflects S&P's concern regarding the company's ability to refinance the August 2009 maturity of its revolving credit and term loan A facilities. Fitch meanwhile expects Blockbuster will be able to repay the approximately $19 million outstanding on the term loan A and possibly renew its bank facility, although the terms will likely be more restrictive as Blockbuster is anticipated to report positive EBITDA and free cash flow generation for fiscal 2008. In the event the refinancing is not successful and Blockbuster's liquidity position is weakened, this will prompt Fitch to review the ratings on the company. Participations in a syndicated loan under which Neiman Marcus Group Inc. is a borrower traded at 61.50 cents-on-the-dollar, a drop of 3.57 percentage points from the previous week. The loan matures on April 6, 2013. Neiman Marcus pays 175 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB rating. Michaels Stores Inc. bank debt traded at 54.08 cents-on-the- dollar, a drop of 2.28 percentage points from the previous week. The loan matures on October 31, 2013. Michaels Stores pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B2 rating and Standard & Poor's B rating. Yankee Candle bank debt trades at 61.80 cents-on-the-dollar, an increase of 1.63 percentage points from the previous week. The loan matures February 6, 2014. Yankee Candle pays 200 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB- rating. US Foodservice bank debt trades at 60.21 cents-on-the-dollar, a drop of 2.45 percentage points from the previous week. The loan matures July 3, 2014. US Foodservice pays 275 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B2 rating and Standard & Poor's N.R. rating. Early in February, Standard & Poor's Ratings Services placed its ratings on six department store companies on CreditWatch with negative implications: (1) Dillard's Inc. Corporate Credit Rating From B+/Watch Neg/-- To B+/Stable/-- (2) Macy's Inc. Corporate Credit Rating From BBB-/Watch Neg/A-3 To BBB-/Negative/A-3 (3) Neiman Marcus Group Inc. Corporate Credit Rating From B+/Watch Neg/-- To B+/Negative/-- (4) Nordstrom Inc. Corporate Credit Rating From A-/Watch Neg/A-2 To A-/Negative/A-2 (5) Penney (J.C.) Co. Inc. Corporate Credit Rating From BBB-/Watch Neg/-- To BBB-/Negative/-- (6) Sears Holdings Corp. Corporate Credit Rating From BB-/Watch Neg/-- To BB-/Negative/-- S&P changed the outlook on three department store companies to negative from stable. (1) Bon-Ton Stores Inc. Corporate Credit Rating From B-/Negative/-- To B-/Stable/-- (2) Kohl's Corp. Corporate Credit Rating From BBB+/Negative/-- To BBB+/Stable/-- (3) Saks Inc. Corporate Credit Rating From B/Negative/-- To B/Stable/-- Bon-Ton Stores, Kohl's Corp., and Saks Inc. have negative outlooks, but are not on CreditWatch because S&P does not believe S&P will lower the ratings in the near term. "The CreditWatch listings and negative outlooks reflect our deepening concern about the impact of the U.S. recession on the increasingly troubled department store sector," said Standard & Poor's credit analyst Diane Shand, "which felt the full brunt of the declining U.S. economy and weakening consumer confidence in 2008." The recession is likely to worsen through the first half of 2009 given weakening employment, the still-poor housing market, and continuing turmoil in financial markets. Standard & Poor's expects department store operators to plan inventories, expenses, and store growth conservatively in 2009 in an effort to protect margins. Nevertheless, most companies' margins are likely to erode as a result of weak consumer demand, lack of sales leverage, and promotional activity. Ms. Shand added, "We expect declining profitability to hurt the credit profiles of the rated department stores enough in some cases to result in downgrades." However, rating changes are not necessarily a foregone conclusion as a result of these CreditWatch placements and negative outlooks. CreditWatch listings should be resolved within 90 days. S&P will take into account management's strategies, financial policies, and liquidity (including their ability to remain in compliance with financial covenants). S&P added the companies that are more highly leveraged for a particular rating category are likely to have more downside potential. Steps taken by companies to forgo discretionary capital spending and to reduce costs in an effort to preserve balance-sheet strength should be viewed favorably. * BOND PRICING -- For Week From March 2 - 6, 2009 ------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- 155 E TROPICANA 8.75% 4/1/2012 40.88 ABITIBI-CONS FIN 7.88% 8/1/2009 27.00 ACE CASH EXPRESS 10.25% 10/1/2014 14.38 AHERN RENTALS 9.25% 8/15/2013 32.25 ALABAMA POWER 5.50% 10/1/2042 70.00 ALERIS INTL INC 9.00% 12/15/2014 1.10 ALERIS INTL INC 10.00% 12/15/2016 1.00 ALION SCIENCE 10.25% 2/1/2015 20.00 ALLIED CAP CORP 6.00% 4/1/2012 14.25 ALLIED CAP CORP 6.63% 7/15/2011 20.82 AMD 7.75% 11/1/2012 52.00 AMER AXLE & MFG 5.25% 2/11/2014 22.43 AMER AXLE & MFG 7.88% 3/1/2017 16.50 AMER CAP STRATEG 8.60% 8/1/2012 31.50 AMER GENL FIN 3.00% 7/15/2009 81.97 AMER GENL FIN 3.05% 6/15/2010 35.00 AMER GENL FIN 3.10% 3/15/2009 66.25 AMER GENL FIN 3.10% 6/15/2009 40.00 AMER GENL FIN 3.10% 7/15/2009 76.80 AMER GENL FIN 3.30% 7/15/2009 87.23 AMER GENL FIN 3.30% 11/15/2009 50.00 AMER GENL FIN 3.30% 6/15/2010 58.00 AMER GENL FIN 3.35% 5/15/2009 90.40 AMER GENL FIN 3.40% 10/15/2009 79.33 AMER GENL FIN 3.45% 4/15/2010 40.00 AMER GENL FIN 3.60% 4/15/2009 94.72 AMER GENL FIN 3.80% 4/15/2009 60.00 AMER GENL FIN 3.85% 9/15/2009 91.85 AMER GENL FIN 3.88% 10/1/2009 68.00 AMER GENL FIN 3.88% 10/15/2009 66.49 AMER GENL FIN 3.88% 11/15/2009 81.00 AMER GENL FIN 3.90% 9/15/2009 74.81 AMER GENL FIN 3.90% 4/15/2010 54.47 AMER GENL FIN 3.90% 4/15/2011 24.00 AMER GENL FIN 4.00% 6/15/2009 80.49 AMER GENL FIN 4.00% 8/15/2009 78.37 AMER GENL FIN 4.00% 9/15/2009 60.00 AMER GENL FIN 4.00% 11/15/2009 59.00 AMER GENL FIN 4.00% 11/15/2009 40.00 AMER GENL FIN 4.00% 11/15/2009 67.98 AMER GENL FIN 4.00% 12/15/2009 65.17 AMER GENL FIN 4.00% 12/15/2009 65.33 AMER GENL FIN 4.00% 12/15/2009 50.00 AMER GENL FIN 4.00% 3/15/2011 36.55 AMER GENL FIN 4.00% 4/15/2012 20.00 AMER GENL FIN 4.05% 5/15/2010 21.00 AMER GENL FIN 4.10% 1/15/2010 49.22 AMER GENL FIN 4.10% 5/15/2010 26.25 AMER GENL FIN 4.10% 1/15/2011 45.00 AMER GENL FIN 4.13% 1/15/2010 62.01 AMER GENL FIN 4.15% 11/15/2010 41.00 AMER GENL FIN 4.15% 12/15/2010 26.00 AMER GENL FIN 4.15% 1/15/2011 40.76 AMER GENL FIN 4.20% 8/15/2009 34.25 AMER GENL FIN 4.20% 10/15/2009 35.00 AMER GENL FIN 4.20% 11/15/2009 30.00 AMER GENL FIN 4.20% 10/15/2010 44.75 AMER GENL FIN 4.25% 11/15/2009 68.32 AMER GENL FIN 4.25% 10/15/2010 43.64 AMER GENL FIN 4.30% 3/15/2009 98.75 AMER GENL FIN 4.30% 5/15/2009 45.00 AMER GENL FIN 4.30% 6/15/2009 86.75 AMER GENL FIN 4.30% 9/15/2009 75.07 AMER GENL FIN 4.30% 6/15/2010 80.24 AMER GENL FIN 4.30% 7/15/2010 47.90 AMER GENL FIN 4.30% 9/15/2010 44.50 AMER GENL FIN 4.30% 10/15/2011 34.03 AMER GENL FIN 4.35% 6/15/2009 86.07 AMER GENL FIN 4.35% 6/15/2009 94.50 AMER GENL FIN 4.35% 9/15/2009 74.85 AMER GENL FIN 4.35% 3/15/2010 57.17 AMER GENL FIN 4.40% 5/15/2009 75.00 AMER GENL FIN 4.40% 7/15/2009 60.00 AMER GENL FIN 4.40% 12/15/2010 22.00 AMER GENL FIN 4.40% 12/15/2011 19.00 AMER GENL FIN 4.40% 4/15/2012 20.00 AMER GENL FIN 4.50% 7/15/2009 60.00 AMER GENL FIN 4.50% 9/15/2009 65.00 AMER GENL FIN 4.50% 3/15/2010 57.03 AMER GENL FIN 4.50% 8/15/2010 23.00 AMER GENL FIN 4.50% 11/15/2010 30.00 AMER GENL FIN 4.50% 11/15/2011 37.24 AMER GENL FIN 4.55% 10/15/2009 79.00 AMER GENL FIN 4.60% 11/15/2009 13.08 AMER GENL FIN 4.60% 8/15/2010 32.00 AMER GENL FIN 4.60% 9/15/2010 22.00 AMER GENL FIN 4.60% 10/15/2010 43.69 AMER GENL FIN 4.60% 1/15/2012 65.47 AMER GENL FIN 4.63% 5/15/2009 87.35 AMER GENL FIN 4.63% 9/1/2010 36.00 AMER GENL FIN 4.63% 3/15/2012 49.00 AMER GENL FIN 4.65% 8/15/2010 61.00 AMER GENL FIN 4.70% 12/15/2009 65.28 AMER GENL FIN 4.70% 10/15/2010 43.23 AMER GENL FIN 4.75% 3/15/2009 99.39 AMER GENL FIN 4.75% 6/15/2010 30.00 AMER GENL FIN 4.75% 8/15/2010 20.00 AMER GENL FIN 4.75% 5/15/2011 38.84 AMER GENL FIN 4.80% 8/15/2009 78.63 AMER GENL FIN 4.80% 9/15/2011 37.58 AMER GENL FIN 4.85% 3/15/2009 99.38 AMER GENL FIN 4.85% 3/15/2009 99.39 AMER GENL FIN 4.85% 10/15/2009 71.88 AMER GENL FIN 4.85% 12/15/2009 77.99 AMER GENL FIN 4.88% 5/15/2010 41.80 AMER GENL FIN 4.88% 6/15/2010 68.63 AMER GENL FIN 4.88% 7/15/2012 33.00 AMER GENL FIN 4.90% 12/15/2009 82.58 AMER GENL FIN 4.90% 3/15/2011 38.93 AMER GENL FIN 4.90% 3/15/2012 35.08 AMER GENL FIN 4.95% 11/15/2010 25.75 AMER GENL FIN 5.00% 9/15/2009 86.25 AMER GENL FIN 5.00% 1/15/2010 34.00 AMER GENL FIN 5.00% 6/15/2010 78.84 AMER GENL FIN 5.00% 9/15/2010 35.00 AMER GENL FIN 5.00% 10/15/2010 26.00 AMER GENL FIN 5.00% 11/15/2010 43.50 AMER GENL FIN 5.00% 12/15/2010 50.88 AMER GENL FIN 5.00% 12/15/2010 23.00 AMER GENL FIN 5.00% 12/15/2010 33.97 AMER GENL FIN 5.00% 1/15/2011 24.00 AMER GENL FIN 5.00% 1/15/2011 51.70 AMER GENL FIN 5.00% 3/15/2011 28.00 AMER GENL FIN 5.00% 6/15/2011 39.35 AMER GENL FIN 5.00% 10/15/2011 24.26 AMER GENL FIN 5.00% 12/15/2011 36.90 AMER GENL FIN 5.00% 3/15/2012 36.56 AMER GENL FIN 5.00% 8/15/2012 22.00 AMER GENL FIN 5.10% 6/15/2009 92.93 AMER GENL FIN 5.10% 9/15/2009 78.63 AMER GENL FIN 5.10% 9/15/2010 45.46 AMER GENL FIN 5.10% 3/15/2011 54.97 AMER GENL FIN 5.10% 1/15/2012 37.02 AMER GENL FIN 5.15% 6/15/2009 97.50 AMER GENL FIN 5.15% 9/15/2009 75.43 AMER GENL FIN 5.20% 6/15/2010 65.50 AMER GENL FIN 5.20% 9/15/2010 60.10 AMER GENL FIN 5.20% 5/15/2011 20.00 AMER GENL FIN 5.20% 12/15/2011 40.00 AMER GENL FIN 5.20% 5/15/2012 33.50 AMER GENL FIN 5.25% 6/15/2009 86.36 AMER GENL FIN 5.25% 6/15/2009 86.36 AMER GENL FIN 5.25% 7/15/2010 37.70 AMER GENL FIN 5.25% 4/15/2011 39.77 AMER GENL FIN 5.25% 6/15/2011 60.15 AMER GENL FIN 5.25% 9/15/2012 34.59 AMER GENL FIN 5.30% 6/15/2009 86.56 AMER GENL FIN 5.35% 6/15/2010 45.51 AMER GENL FIN 5.35% 7/15/2010 52.50 AMER GENL FIN 5.35% 9/15/2011 53.00 AMER GENL FIN 5.35% 8/15/2012 35.74 AMER GENL FIN 5.38% 9/1/2009 69.33 AMER GENL FIN 5.38% 10/1/2012 34.87 AMER GENL FIN 5.40% 6/15/2011 38.35 AMER GENL FIN 5.40% 6/15/2011 38.35 AMER GENL FIN 5.45% 9/15/2009 75.44 AMER GENL FIN 5.45% 6/15/2011 38.36 AMER GENL FIN 5.45% 10/15/2011 30.00 AMER GENL FIN 5.50% 6/15/2009 86.41 AMER GENL FIN 5.50% 12/15/2010 42.16 AMER GENL FIN 5.50% 4/15/2011 32.09 AMER GENL FIN 5.50% 6/15/2012 36.17 AMER GENL FIN 5.50% 7/15/2012 23.00 AMER GENL FIN 5.50% 8/15/2012 35.88 AMER GENL FIN 5.50% 12/15/2012 25.00 AMER GENL FIN 5.50% 12/15/2012 35.08 AMER GENL FIN 5.60% 6/15/2011 38.50 AMER GENL FIN 5.63% 8/17/2011 40.00 AMER GENL FIN 5.85% 9/15/2012 31.70 AMER GENL FIN 6.00% 7/15/2011 32.81 AMER GENL FIN 6.00% 10/15/2014 23.00 AMER GENL FIN 6.00% 11/15/2014 8.07 AMER GENL FIN 6.25% 7/15/2010 79.31 AMER GENL FIN 6.25% 7/15/2011 38.92 AMER GENL FIN 6.25% 7/15/2011 20.00 AMER GENL FIN 6.75% 7/15/2011 40.02 AMER GENL FIN 7.75% 9/15/2010 46.51 AMER GENL FIN 7.85% 8/15/2010 65.00 AMER GENL FIN 7.90% 9/15/2010 46.64 AMER GENL FIN 8.00% 8/15/2010 55.00 AMER GENL FIN 8.10% 9/15/2011 37.84 AMER GENL FIN 8.13% 8/15/2009 80.00 AMER GENL FIN 8.15% 8/15/2011 55.00 AMER GENL FIN 8.20% 9/15/2011 37.98 AMER GENL FIN 8.38% 8/15/2011 40.74 AMER GENL FIN 8.45% 10/15/2009 73.00 AMER GENL FIN 8.85% 9/15/2013 33.40 AMER GENL FIN 9.00% 9/15/2013 33.65 AMER INTL GROUP 6.25% 3/15/2037 10.00 AMER MEDIA OPER 8.88% 1/15/2011 30.00 AMER MEDIA OPER 10.25% 5/1/2009 35.00 AMERICREDIT CORP 0.75% 9/15/2011 37.75 AMES TRUE TEMPER 10.00% 7/15/2012 39.50 AMR CORP 10.13% 6/15/2011 47.75 AMR CORP 10.40% 3/15/2011 52.00 AMR CORP 10.42% 3/15/2011 60.00 AMR CORP 10.45% 3/10/2011 52.00 ANTHRACITE CAP 11.75% 9/1/2027 19.94 APPLETON PAPERS 9.75% 6/15/2014 18.00 ARCO CHEMICAL CO 9.80% 2/1/2020 7.50 ARCO CHEMICAL CO 10.25% 11/1/2010 10.00 ARVIN INDUSTRIES 7.13% 3/15/2009 96.50 ARVINMERITOR 8.13% 9/15/2015 22.00 ARVINMERITOR 8.75% 3/1/2012 22.00 ASARCO INC 7.88% 4/15/2013 23.50 ASBURY AUTO GRP 3.00% 9/15/2012 40.25 ASHTON WOODS USA 9.50% 10/1/2015 19.50 AT HOME CORP 0.52% 12/28/2018 0.06 ATHEROGENICS INC 1.50% 2/1/2012 11.00 AVENTINE RENEW 10.00% 4/1/2017 17.00 AVIS BUDGET CAR 7.63% 5/15/2014 19.00 AVIS BUDGET CAR 7.75% 5/15/2016 18.00 BANK NEW ENGLAND 9.88% 9/15/1999 5.38 BANK OF AMER CRP 7.80% 2/15/2010 97.05 BANKUNITED CAP 3.13% 3/1/2034 8.00 BARRINGTON BROAD 10.50% 8/15/2014 12.50 BEAZER HOMES USA 4.63% 6/15/2024 31.00 BEAZER HOMES USA 6.50% 11/15/2013 30.09 BEAZER HOMES USA 6.88% 7/15/2015 21.00 BEAZER HOMES USA 8.13% 6/15/2016 23.00 BEAZER HOMES USA 8.38% 4/15/2012 30.50 BEAZER HOMES USA 8.63% 5/15/2011 42.88 BELL MICROPRODUC 3.75% 3/5/2024 15.63 BELL MICROPRODUC 3.75% 3/5/2024 18.00 BLOCKBUSTER INC 9.00% 9/1/2012 41.50 BON-TON DEPT STR 10.25% 3/15/2014 12.75 BORDEN INC 7.88% 2/15/2023 3.50 BORDEN INC 8.38% 4/15/2016 2.00 BORDEN INC 9.20% 3/15/2021 6.00 BOWATER INC 6.50% 6/15/2013 13.50 BOWATER INC 9.00% 8/1/2009 25.50 BOWATER INC 9.38% 12/15/2021 19.75 BOWATER INC 9.50% 10/15/2012 10.50 BRODER BROS CO 11.25% 10/15/2010 19.25 BROOKSTONE CO 12.00% 10/15/2012 48.50 BUFFALO THUNDER 9.38% 12/15/2014 7.75 BURLINGTON COAT 11.13% 4/15/2014 24.00 CALLON PETROLEUM 9.75% 12/8/2010 45.00 CAPITALSOURCE 1.63% 3/15/2034 99.00 CAPMARK FINL GRP 7.38% 5/10/2012 17.13 CAPMARK FINL GRP 7.80% 5/10/2017 15.50 CARAUSTAR INDS 7.25% 5/1/2010 50.38 CARAUSTAR INDS 7.38% 6/1/2009 50.50 CCH I LLC 9.92% 4/1/2014 2.50 CCH I LLC 10.00% 5/15/2014 2.63 CCH I LLC 11.13% 1/15/2014 2.50 CCH I/CCH I CP 11.00% 10/1/2015 8.00 CCH I/CCH I CP 11.00% 10/1/2015 8.00 CELL GENESYS INC 3.13% 11/1/2011 40.00 CELL THERAPEUTIC 5.75% 12/15/2011 14.50 CENTRAL EUROPEAN 3.00% 3/15/2013 28.68 CHAMPION ENTERPR 7.63% 5/15/2009 91.00 CHAPARRAL ENERGY 8.50% 12/1/2015 26.00 CHAPARRAL ENERGY 8.88% 2/1/2017 26.00 CHARMING SHOPPES 1.13% 5/1/2014 16.50 CHARTER COMM HLD 9.63% 11/15/2009 62.25 CHARTER COMM HLD 10.00% 5/15/2011 12.98 CHARTER COMM HLD 11.13% 1/15/2011 5.06 CHARTER COMM HLD 11.75% 5/15/2011 2.00 CHARTER COMM INC 6.50% 10/1/2027 5.50 CHENIERE ENERGY 2.25% 8/1/2012 18.75 CIRCUS CIRCUS 7.63% 7/15/2013 5.00 CIT GROUP INC 3.38% 4/1/2009 95.99 CIT GROUP INC 4.13% 11/3/2009 79.00 CIT GROUP INC 5.05% 11/15/2010 58.32 CITADEL BROADCAS 4.00% 2/15/2011 30.00 CITIGROUP INC 6.20% 3/15/2009 99.50 CITIZENS REPUB 5.75% 2/1/2013 28.25 CLAIRE'S STORES 9.25% 6/1/2015 21.25 CLAIRE'S STORES 10.50% 6/1/2017 17.25 CLEAR CHANNEL 4.25% 5/15/2009 85.00 CLEAR CHANNEL 4.40% 5/15/2011 13.25 CLEAR CHANNEL 4.50% 1/15/2010 37.50 CLEAR CHANNEL 4.90% 5/15/2015 10.00 CLEAR CHANNEL 5.00% 3/15/2012 12.00 CLEAR CHANNEL 5.50% 9/15/2014 9.00 CLEAR CHANNEL 5.50% 12/15/2016 10.50 CLEAR CHANNEL 5.75% 1/15/2013 10.00 CLEAR CHANNEL 6.25% 3/15/2011 14.25 CLEAR CHANNEL 6.88% 6/15/2018 9.00 CLEAR CHANNEL 7.25% 10/15/2027 9.00 CLEAR CHANNEL 7.65% 9/15/2010 30.00 CLEAR CHANNEL 10.75% 8/1/2016 18.38 CMP SUSQUEHANNA 9.88% 5/15/2014 2.00 COEUR D'ALENE 1.25% 1/15/2024 47.50 COLONIAL BANK 8.00% 3/15/2009 97.25 COMMSC-CALL03/09 1.00% 3/15/2024 99.73 COMPUCREDIT 3.63% 5/30/2025 23.83 CONEXANT SYSTEMS 4.00% 3/1/2026 43.03 CONSTAR INTL 11.00% 12/1/2012 2.25 COOPER-STANDARD 7.00% 12/15/2012 12.00 COOPER-STANDARD 8.38% 12/15/2014 12.00 CREDENCE SYSTEM 3.50% 5/15/2010 29.25 DAYTON SUPERIOR 13.00% 6/15/2009 59.50 DECODE GENETICS 3.50% 4/15/2011 5.00 DECODE GENETICS 3.50% 4/15/2011 4.38 DELPHI CORP 6.50% 8/15/2013 2.50 DELPHI CORP 8.25% 10/15/2033 1.00 DEVELOPERS DIVER 3.50% 8/15/2011 44.25 DEX MEDIA INC 8.00% 11/15/2013 6.25 DEX MEDIA WEST 5.88% 11/15/2011 24.75 DEX MEDIA WEST 8.50% 8/15/2010 43.13 DEX MEDIA WEST 9.88% 8/15/2013 14.50 DOWNEY FINANCIAL 6.50% 7/1/2014 0.50 DOWNSTREAM DEVEL 15.50% 10/4/2016 32.38 DUANE READE INC 9.75% 8/1/2011 53.00 DUNE ENERGY INC 10.50% 6/1/2012 25.00 E*TRADE FINL 8.00% 6/15/2011 47.17 ENERGY PARTNERS 9.75% 4/15/2014 25.00 ENERGY XXI GULF 10.00% 6/15/2013 38.00 EOP OPERATING LP 4.25% 3/15/2009 99.05 EOP OPERATING LP 7.00% 7/15/2011 38.93 EPIX MEDICAL INC 3.00% 6/15/2024 32.50 EQUISTAR CHEMICA 7.55% 2/15/2026 7.00 EVERGREEN SOLAR 4.00% 7/15/2013 25.75 FELCOR LODGING 9.00% 6/1/2011 58.00 FERRO CORP 6.50% 8/15/2013 31.00 FGIC CORP 6.00% 1/15/2034 7.88 FIBERTOWER CORP 9.00% 11/15/2012 30.00 FINISAR CORP 2.50% 10/15/2010 52.38 FINLAY FINE JWLY 8.38% 6/1/2012 0.10 FIRST DATA CORP 4.50% 6/15/2010 55.00 FIRST DATA CORP 4.70% 8/1/2013 25.12 FIRST DATA CORP 4.85% 10/1/2014 25.00 FONTAINEBLEAU LA 11.00% 6/15/2015 5.25 FORD HOLDINGS 9.30% 3/1/2030 20.75 FORD HOLDINGS 9.38% 3/1/2020 24.69 FORD MOTOR CO 6.50% 8/1/2018 17.75 FORD MOTOR CO 7.70% 5/15/2097 19.00 FORD MOTOR CO 7.75% 6/15/2043 19.21 FORD MOTOR CO 8.88% 1/15/2022 20.00 FORD MOTOR CO 8.90% 1/15/2032 22.86 FORD MOTOR CO 9.22% 9/15/2021 21.28 FORD MOTOR CO 9.50% 9/15/2011 32.71 FORD MOTOR CRED 4.30% 3/20/2009 99.00 FORD MOTOR CRED 4.50% 3/20/2009 92.00 FORD MOTOR CRED 4.70% 4/20/2009 94.00 FORD MOTOR CRED 4.80% 7/20/2009 89.00 FORD MOTOR CRED 4.90% 5/20/2009 84.59 FORD MOTOR CRED 4.90% 9/21/2009 83.92 FORD MOTOR CRED 4.90% 10/20/2009 72.91 FORD MOTOR CRED 4.90% 10/20/2009 72.76 FORD MOTOR CRED 4.95% 10/20/2009 71.70 FORD MOTOR CRED 5.00% 8/20/2009 86.00 FORD MOTOR CRED 5.00% 8/20/2009 79.50 FORD MOTOR CRED 5.00% 9/21/2009 77.96 FORD MOTOR CRED 5.00% 9/21/2009 74.69 FORD MOTOR CRED 5.00% 10/20/2009 65.00 FORD MOTOR CRED 5.00% 1/20/2011 50.53 FORD MOTOR CRED 5.00% 2/22/2011 40.00 FORD MOTOR CRED 5.05% 9/21/2009 84.46 FORD MOTOR CRED 5.10% 8/20/2009 85.25 FORD MOTOR CRED 5.10% 11/20/2009 76.00 FORD MOTOR CRED 5.10% 2/22/2011 40.10 FORD MOTOR CRED 5.15% 11/20/2009 68.62 FORD MOTOR CRED 5.15% 11/20/2009 66.25 FORD MOTOR CRED 5.15% 1/20/2011 37.21 FORD MOTOR CRED 5.20% 3/21/2011 40.91 FORD MOTOR CRED 5.20% 3/21/2011 34.66 FORD MOTOR CRED 5.25% 12/21/2009 66.39 FORD MOTOR CRED 5.25% 1/20/2010 71.84 FORD MOTOR CRED 5.25% 2/22/2011 42.90 FORD MOTOR CRED 5.25% 3/21/2011 34.23 FORD MOTOR CRED 5.25% 3/21/2011 40.83 FORD MOTOR CRED 5.30% 3/21/2011 48.88 FORD MOTOR CRED 5.30% 4/20/2011 40.00 FORD MOTOR CRED 5.35% 5/20/2009 86.00 FORD MOTOR CRED 5.35% 12/21/2009 78.40 FORD MOTOR CRED 5.35% 2/22/2011 45.00 FORD MOTOR CRED 5.40% 6/22/2009 82.50 FORD MOTOR CRED 5.40% 12/21/2009 66.15 FORD MOTOR CRED 5.40% 1/20/2011 51.13 FORD MOTOR CRED 5.40% 9/20/2011 31.17 FORD MOTOR CRED 5.40% 10/20/2011 34.00 FORD MOTOR CRED 5.40% 10/20/2011 35.50 FORD MOTOR CRED 5.45% 4/20/2011 47.43 FORD MOTOR CRED 5.45% 10/20/2011 34.50 FORD MOTOR CRED 5.50% 6/22/2009 90.08 FORD MOTOR CRED 5.50% 1/20/2010 70.74 FORD MOTOR CRED 5.50% 2/22/2010 71.00 FORD MOTOR CRED 5.50% 2/22/2010 55.90 FORD MOTOR CRED 5.50% 2/22/2010 73.00 FORD MOTOR CRED 5.50% 4/20/2011 34.50 FORD MOTOR CRED 5.50% 9/20/2011 37.00 FORD MOTOR CRED 5.55% 6/21/2010 61.29 FORD MOTOR CRED 5.55% 8/22/2011 42.00 FORD MOTOR CRED 5.55% 9/20/2011 38.85 FORD MOTOR CRED 5.60% 4/20/2011 33.00 FORD MOTOR CRED 5.60% 8/22/2011 30.63 FORD MOTOR CRED 5.60% 9/20/2011 31.59 FORD MOTOR CRED 5.60% 11/21/2011 40.00 FORD MOTOR CRED 5.60% 11/21/2011 44.00 FORD MOTOR CRED 5.65% 12/20/2010 48.50 FORD MOTOR CRED 5.65% 7/20/2011 33.00 FORD MOTOR CRED 5.65% 11/21/2011 30.89 FORD MOTOR CRED 5.65% 12/20/2011 44.00 FORD MOTOR CRED 5.70% 1/15/2010 71.00 FORD MOTOR CRED 5.70% 3/22/2010 63.97 FORD MOTOR CRED 5.70% 5/20/2011 47.45 FORD MOTOR CRED 5.70% 12/20/2011 45.50 FORD MOTOR CRED 5.75% 1/20/2010 69.67 FORD MOTOR CRED 5.75% 3/22/2010 53.22 FORD MOTOR CRED 5.75% 6/21/2010 49.49 FORD MOTOR CRED 5.75% 10/20/2010 49.83 FORD MOTOR CRED 5.75% 12/20/2011 35.94 FORD MOTOR CRED 5.75% 2/21/2012 37.29 FORD MOTOR CRED 5.75% 2/20/2014 25.00 FORD MOTOR CRED 5.75% 2/20/2014 27.50 FORD MOTOR CRED 5.80% 11/22/2010 44.57 FORD MOTOR CRED 5.80% 8/22/2011 49.02 FORD MOTOR CRED 5.85% 5/20/2010 49.71 FORD MOTOR CRED 5.85% 6/21/2010 51.59 FORD MOTOR CRED 5.85% 7/20/2010 40.00 FORD MOTOR CRED 5.85% 1/20/2012 28.00 FORD MOTOR CRED 5.90% 7/20/2011 42.00 FORD MOTOR CRED 5.95% 5/20/2010 60.08 FORD MOTOR CRED 6.00% 2/22/2010 55.54 FORD MOTOR CRED 6.00% 6/21/2010 49.14 FORD MOTOR CRED 6.00% 10/20/2010 48.50 FORD MOTOR CRED 6.00% 10/20/2010 46.00 FORD MOTOR CRED 6.00% 12/20/2010 60.00 FORD MOTOR CRED 6.00% 1/20/2012 43.00 FORD MOTOR CRED 6.00% 1/21/2014 27.50 FORD MOTOR CRED 6.00% 3/20/2014 18.65 FORD MOTOR CRED 6.00% 3/20/2014 21.72 FORD MOTOR CRED 6.00% 3/20/2014 21.78 FORD MOTOR CRED 6.00% 3/20/2014 19.32 FORD MOTOR CRED 6.00% 11/20/2014 27.10 FORD MOTOR CRED 6.00% 11/20/2014 19.75 FORD MOTOR CRED 6.00% 11/20/2014 18.75 FORD MOTOR CRED 6.05% 7/20/2010 58.00 FORD MOTOR CRED 6.05% 9/20/2010 47.28 FORD MOTOR CRED 6.05% 6/20/2011 41.50 FORD MOTOR CRED 6.05% 3/20/2012 24.35 FORD MOTOR CRED 6.05% 2/20/2014 21.25 FORD MOTOR CRED 6.05% 4/21/2014 23.00 FORD MOTOR CRED 6.05% 12/22/2014 18.76 FORD MOTOR CRED 6.10% 6/20/2011 35.00 FORD MOTOR CRED 6.10% 2/20/2015 20.00 FORD MOTOR CRED 6.15% 7/20/2010 47.95 FORD MOTOR CRED 6.15% 9/20/2010 46.63 FORD MOTOR CRED 6.15% 5/20/2011 40.00 FORD MOTOR CRED 6.20% 5/20/2011 34.64 FORD MOTOR CRED 6.20% 6/20/2011 48.00 FORD MOTOR CRED 6.20% 4/21/2014 18.00 FORD MOTOR CRED 6.20% 3/20/2015 20.63 FORD MOTOR CRED 6.25% 6/20/2011 33.50 FORD MOTOR CRED 6.25% 6/20/2011 32.71 FORD MOTOR CRED 6.25% 12/20/2013 19.75 FORD MOTOR CRED 6.25% 4/21/2014 25.00 FORD MOTOR CRED 6.25% 1/20/2015 21.64 FORD MOTOR CRED 6.30% 5/20/2010 68.25 FORD MOTOR CRED 6.30% 5/20/2014 21.33 FORD MOTOR CRED 6.30% 5/20/2014 27.50 FORD MOTOR CRED 6.35% 9/20/2010 53.80 FORD MOTOR CRED 6.35% 9/20/2010 57.78 FORD MOTOR CRED 6.35% 4/21/2014 26.00 FORD MOTOR CRED 6.50% 8/20/2010 48.50 FORD MOTOR CRED 6.50% 12/20/2013 22.00 FORD MOTOR CRED 6.50% 2/20/2015 21.85 FORD MOTOR CRED 6.50% 3/20/2015 20.75 FORD MOTOR CRED 6.55% 8/20/2010 51.19 FORD MOTOR CRED 6.65% 10/21/2013 21.76 FORD MOTOR CRED 6.65% 6/20/2014 21.00 FORD MOTOR CRED 6.75% 10/21/2013 20.00 FORD MOTOR CRED 6.75% 6/20/2014 24.10 FORD MOTOR CRED 6.80% 6/20/2014 24.00 FORD MOTOR CRED 6.80% 6/20/2014 20.88 FORD MOTOR CRED 6.80% 3/20/2015 25.49 FORD MOTOR CRED 6.85% 9/20/2013 21.77 FORD MOTOR CRED 6.85% 5/20/2014 23.99 FORD MOTOR CRED 6.85% 6/20/2014 25.50 FORD MOTOR CRED 6.95% 4/20/2010 52.39 FORD MOTOR CRED 6.95% 5/20/2014 21.85 FORD MOTOR CRED 7.00% 7/20/2010 49.00 FORD MOTOR CRED 7.00% 8/15/2012 23.00 FORD MOTOR CRED 7.05% 9/20/2013 29.13 FORD MOTOR CRED 7.10% 9/20/2013 21.00 FORD MOTOR CRED 7.10% 9/20/2013 23.00 FORD MOTOR CRED 7.15% 8/20/2010 45.93 FORD MOTOR CRED 7.25% 3/22/2010 54.00 FORD MOTOR CRED 7.25% 10/25/2011 48.02 FORD MOTOR CRED 7.35% 3/20/2015 25.75 FORD MOTOR CRED 7.38% 10/28/2009 82.00 FORD MOTOR CRED 7.38% 2/1/2011 48.50 FORD MOTOR CRED 7.50% 8/20/2032 18.50 FORD MOTOR CRED 7.88% 6/15/2010 62.00 FORD MOTOR CRED 8.63% 11/1/2010 60.28 FORD MOTOR CRED 9.75% 9/15/2010 66.00 FORD MOTOR CRED 9.88% 8/10/2011 59.50 FOX ACQUISITION 13.38% 7/15/2016 32.75 FRANKLIN BANK 4.00% 5/1/2027 1.38 FREESCALE SEMICO 8.88% 12/15/2014 17.75 FREESCALE SEMICO 10.13% 12/15/2016 14.50 FRONTIER AIRLINE 5.00% 12/15/2025 15.00 G-I HOLDINGS 10.00% 2/15/2006 1.60 GENCORP INC 2.25% 11/15/2024 42.00 GENCORP INC 4.00% 1/16/2024 62.00 GENERAL MOTORS 6.75% 5/1/2028 9.88 GENERAL MOTORS 7.13% 7/15/2013 13.30 GENERAL MOTORS 7.20% 1/15/2011 15.00 GENERAL MOTORS 7.38% 5/23/2048 8.00 GENERAL MOTORS 7.40% 9/1/2025 11.00 GENERAL MOTORS 7.70% 4/15/2016 13.00 GENERAL MOTORS 8.10% 6/15/2024 12.00 GENERAL MOTORS 8.25% 7/15/2023 10.02 GENERAL MOTORS 8.38% 7/15/2033 12.56 GENERAL MOTORS 8.80% 3/1/2021 12.00 GENERAL MOTORS 9.40% 7/15/2021 11.00 GENERAL MOTORS 9.45% 11/1/2011 10.00 GENWORTH FINL 6.15% 11/15/2066 13.00 GEORGIA GULF CRP 7.13% 12/15/2013 33.00 GEORGIA GULF CRP 9.50% 10/15/2014 20.00 GEORGIA GULF CRP 10.75% 10/15/2016 3.00 GGP LP 3.98% 4/15/2027 8.28 GMAC LLC 4.25% 3/15/2009 88.75 GMAC LLC 4.90% 10/15/2009 65.00 GMAC LLC 4.90% 10/15/2009 64.50 GMAC LLC 4.95% 10/15/2009 65.00 GMAC LLC 5.00% 8/15/2009 67.34 GMAC LLC 5.00% 8/15/2009 67.00 GMAC LLC 5.00% 9/15/2009 66.00 GMAC LLC 5.00% 9/15/2009 66.00 GMAC LLC 5.00% 9/15/2009 60.00 GMAC LLC 5.00% 10/15/2009 65.00 GMAC LLC 5.05% 7/15/2009 67.75 GMAC LLC 5.10% 7/15/2009 66.30 GMAC LLC 5.10% 8/15/2009 67.00 GMAC LLC 5.10% 9/15/2009 69.00 GMAC LLC 5.20% 11/15/2009 66.00 GMAC LLC 5.20% 11/15/2009 68.00 GMAC LLC 5.25% 7/15/2009 74.00 GMAC LLC 5.25% 7/15/2009 64.00 GMAC LLC 5.25% 8/15/2009 67.00 GMAC LLC 5.25% 8/15/2009 67.00 GMAC LLC 5.25% 11/15/2009 45.00 GMAC LLC 5.25% 11/15/2009 64.00 GMAC LLC 5.25% 1/15/2014 19.25 GMAC LLC 5.30% 1/15/2010 53.58 GMAC LLC 5.35% 11/15/2009 64.00 GMAC LLC 5.35% 12/15/2009 63.00 GMAC LLC 5.35% 12/15/2009 63.00 GMAC LLC 5.35% 1/15/2014 21.00 GMAC LLC 5.40% 12/15/2009 63.00 GMAC LLC 5.40% 12/15/2009 60.00 GMAC LLC 5.50% 1/15/2010 55.64 GMAC LLC 5.63% 5/15/2009 88.75 GMAC LLC 5.70% 10/15/2013 20.75 GMAC LLC 5.70% 12/15/2013 20.00 GMAC LLC 5.75% 1/15/2010 57.00 GMAC LLC 5.85% 2/15/2010 53.00 GMAC LLC 5.85% 5/15/2013 21.79 GMAC LLC 5.85% 6/15/2013 26.27 GMAC LLC 5.85% 6/15/2013 28.04 GMAC LLC 5.90% 12/15/2013 24.50 GMAC LLC 6.00% 4/15/2009 94.25 GMAC LLC 6.00% 1/15/2010 57.00 GMAC LLC 6.00% 2/15/2010 63.00 GMAC LLC 6.00% 2/15/2010 55.00 GMAC LLC 6.00% 11/15/2013 22.75 GMAC LLC 6.00% 12/15/2013 18.79 GMAC LLC 6.00% 3/15/2019 16.00 GMAC LLC 6.00% 9/15/2019 18.50 GMAC LLC 6.05% 3/15/2010 62.50 GMAC LLC 6.15% 3/15/2010 53.00 GMAC LLC 6.15% 9/15/2013 28.00 GMAC LLC 6.25% 3/15/2013 32.75 GMAC LLC 6.25% 7/15/2013 23.38 GMAC LLC 6.25% 10/15/2013 23.00 GMAC LLC 6.25% 11/15/2013 17.58 GMAC LLC 6.25% 5/15/2019 15.77 GMAC LLC 6.30% 3/15/2013 26.85 GMAC LLC 6.30% 10/15/2013 17.98 GMAC LLC 6.30% 11/15/2013 32.00 GMAC LLC 6.35% 5/15/2013 22.56 GMAC LLC 6.38% 8/1/2013 24.00 GMAC LLC 6.40% 3/15/2013 33.00 GMAC LLC 6.40% 12/15/2018 15.05 GMAC LLC 6.45% 2/15/2013 28.28 GMAC LLC 6.50% 6/15/2009 71.65 GMAC LLC 6.50% 3/15/2010 51.50 GMAC LLC 6.50% 7/15/2012 27.25 GMAC LLC 6.50% 2/15/2013 32.00 GMAC LLC 6.50% 3/15/2013 21.50 GMAC LLC 6.50% 4/15/2013 15.00 GMAC LLC 6.50% 5/15/2013 20.62 GMAC LLC 6.50% 11/15/2018 13.86 GMAC LLC 6.60% 8/15/2016 18.00 GMAC LLC 6.60% 6/15/2019 18.07 GMAC LLC 6.63% 10/15/2011 35.50 GMAC LLC 6.65% 2/15/2013 33.25 GMAC LLC 6.65% 6/15/2018 18.75 GMAC LLC 6.70% 6/15/2009 76.84 GMAC LLC 6.70% 7/15/2009 75.00 GMAC LLC 6.70% 5/15/2014 19.39 GMAC LLC 6.70% 5/15/2014 20.80 GMAC LLC 6.70% 6/15/2014 26.91 GMAC LLC 6.70% 8/15/2016 17.50 GMAC LLC 6.70% 6/15/2019 20.25 GMAC LLC 6.75% 9/15/2011 35.10 GMAC LLC 6.75% 10/15/2011 28.00 GMAC LLC 6.75% 10/15/2011 26.11 GMAC LLC 6.75% 7/15/2012 28.00 GMAC LLC 6.75% 9/15/2012 22.87 GMAC LLC 6.75% 9/15/2012 25.00 GMAC LLC 6.75% 10/15/2012 25.00 GMAC LLC 6.75% 4/15/2013 20.79 GMAC LLC 6.75% 4/15/2013 28.58 GMAC LLC 6.75% 6/15/2014 17.00 GMAC LLC 6.75% 7/15/2016 21.63 GMAC LLC 6.75% 8/15/2016 19.00 GMAC LLC 6.75% 3/15/2018 17.26 GMAC LLC 6.75% 5/15/2019 19.50 GMAC LLC 6.75% 3/15/2020 16.37 GMAC LLC 6.80% 7/15/2009 66.88 GMAC LLC 6.80% 11/15/2009 59.88 GMAC LLC 6.80% 12/15/2009 65.00 GMAC LLC 6.80% 2/15/2013 26.00 GMAC LLC 6.80% 4/15/2013 24.00 GMAC LLC 6.85% 7/15/2009 86.67 GMAC LLC 6.85% 10/15/2009 64.87 GMAC LLC 6.88% 10/15/2012 29.50 GMAC LLC 6.88% 4/15/2013 19.88 GMAC LLC 6.88% 8/15/2016 17.59 GMAC LLC 6.88% 7/15/2018 14.07 GMAC LLC 6.90% 6/15/2009 73.39 GMAC LLC 6.90% 12/15/2009 74.50 GMAC LLC 6.90% 6/15/2017 13.90 GMAC LLC 6.90% 8/15/2018 21.00 GMAC LLC 6.95% 8/15/2009 88.00 GMAC LLC 7.00% 7/15/2009 76.25 GMAC LLC 7.00% 8/15/2009 62.73 GMAC LLC 7.00% 9/15/2009 63.50 GMAC LLC 7.00% 9/15/2009 69.00 GMAC LLC 7.00% 10/15/2009 71.50 GMAC LLC 7.00% 10/15/2009 69.00 GMAC LLC 7.00% 11/15/2009 62.88 GMAC LLC 7.00% 11/15/2009 76.50 GMAC LLC 7.00% 12/15/2009 64.00 GMAC LLC 7.00% 12/15/2009 66.00 GMAC LLC 7.00% 1/15/2010 56.10 GMAC LLC 7.00% 3/15/2010 50.30 GMAC LLC 7.00% 10/15/2011 36.00 GMAC LLC 7.00% 9/15/2012 25.00 GMAC LLC 7.00% 10/15/2012 24.00 GMAC LLC 7.00% 11/15/2012 27.00 GMAC LLC 7.00% 12/15/2012 32.98 GMAC LLC 7.00% 1/15/2013 20.72 GMAC LLC 7.00% 6/15/2017 19.50 GMAC LLC 7.00% 7/15/2017 21.50 GMAC LLC 7.00% 2/15/2018 17.00 GMAC LLC 7.00% 2/15/2018 21.50 GMAC LLC 7.00% 3/15/2018 19.50 GMAC LLC 7.00% 5/15/2018 15.00 GMAC LLC 7.00% 8/15/2018 14.17 GMAC LLC 7.05% 10/15/2009 64.00 GMAC LLC 7.05% 3/15/2018 17.25 GMAC LLC 7.05% 4/15/2018 12.59 GMAC LLC 7.10% 9/15/2012 25.00 GMAC LLC 7.10% 1/15/2013 24.00 GMAC LLC 7.10% 1/15/2013 23.88 GMAC LLC 7.13% 8/15/2009 68.78 GMAC LLC 7.13% 8/15/2012 27.00 GMAC LLC 7.13% 12/15/2012 24.88 GMAC LLC 7.13% 10/15/2017 19.50 GMAC LLC 7.15% 8/15/2009 66.76 GMAC LLC 7.15% 8/15/2010 60.00 GMAC LLC 7.15% 11/15/2012 26.00 GMAC LLC 7.20% 8/15/2009 67.00 GMAC LLC 7.20% 10/15/2017 17.75 GMAC LLC 7.20% 10/15/2017 17.88 GMAC LLC 7.25% 11/15/2009 65.00 GMAC LLC 7.25% 1/15/2010 66.87 GMAC LLC 7.25% 8/15/2012 24.48 GMAC LLC 7.25% 12/15/2012 25.00 GMAC LLC 7.25% 12/15/2012 26.38 GMAC LLC 7.25% 9/15/2017 18.00 GMAC LLC 7.25% 9/15/2017 17.88 GMAC LLC 7.25% 9/15/2017 12.16 GMAC LLC 7.25% 1/15/2018 17.96 GMAC LLC 7.25% 4/15/2018 19.00 GMAC LLC 7.25% 4/15/2018 13.04 GMAC LLC 7.25% 8/15/2018 17.50 GMAC LLC 7.25% 9/15/2018 19.00 GMAC LLC 7.30% 12/15/2017 17.25 GMAC LLC 7.30% 1/15/2018 16.83 GMAC LLC 7.30% 1/15/2018 14.41 GMAC LLC 7.35% 4/15/2018 13.98 GMAC LLC 7.38% 11/15/2016 20.00 GMAC LLC 7.40% 12/15/2017 20.88 GMAC LLC 7.50% 10/15/2012 28.95 GMAC LLC 7.50% 11/15/2016 16.00 GMAC LLC 7.50% 8/15/2017 17.00 GMAC LLC 7.50% 11/15/2017 11.00 GMAC LLC 7.50% 11/15/2017 16.50 GMAC LLC 7.50% 12/15/2017 19.50 GMAC LLC 7.55% 8/15/2010 53.00 GMAC LLC 7.63% 11/15/2012 26.00 GMAC LLC 7.70% 8/15/2010 66.00 GMAC LLC 7.75% 10/15/2012 30.00 GMAC LLC 7.75% 10/15/2017 20.25 GMAC LLC 7.85% 8/15/2010 45.50 GMAC LLC 7.88% 11/15/2012 26.33 GMAC LLC 8.00% 6/15/2010 65.00 GMAC LLC 8.00% 6/15/2010 35.00 GMAC LLC 8.00% 6/15/2010 54.00 GMAC LLC 8.00% 7/15/2010 57.50 GMAC LLC 8.00% 7/15/2010 67.79 GMAC LLC 8.00% 9/15/2010 58.75 GMAC LLC 8.00% 8/15/2015 16.00 GMAC LLC 8.00% 10/15/2017 20.00 GMAC LLC 8.00% 11/15/2017 17.25 GMAC LLC 8.05% 4/15/2010 51.00 GMAC LLC 8.13% 11/15/2017 12.55 GMAC LLC 8.20% 7/15/2010 46.30 GMAC LLC 8.25% 9/15/2012 20.27 GMAC LLC 8.40% 4/15/2010 52.50 GMAC LLC 8.40% 8/15/2015 25.10 GMAC LLC 8.50% 5/15/2010 54.14 GMAC LLC 8.50% 10/15/2010 64.02 GMAC LLC 8.50% 10/15/2010 48.50 GMAC LLC 8.50% 8/15/2015 28.00 GMAC LLC 9.00% 7/15/2015 22.00 GRAHAM PACKAGING 8.50% 10/15/2012 43.13 GREAT ATLA & PAC 5.13% 6/15/2011 51.00 GREAT LAKES CHEM 7.00% 7/15/2009 45.00 HAIGHTS CROSS OP 11.75% 8/15/2011 38.63 HANNA (MA) CO 6.52% 2/23/2010 51.25 HARRAHS OPER CO 5.38% 12/15/2013 10.00 HARRAHS OPER CO 5.50% 7/1/2010 31.00 HARRAHS OPER CO 5.63% 6/1/2015 9.25 HARRAHS OPER CO 5.75% 10/1/2017 8.75 HARRAHS OPER CO 6.50% 6/1/2016 8.00 HARRAHS OPER CO 8.00% 2/1/2011 23.83 HARRAHS OPER CO 10.00% 12/15/2015 34.00 HARRAHS OPER CO 10.75% 2/1/2016 15.25 HARRAHS OPER CO 10.75% 2/1/2016 13.50 HARRAHS OPER CO 10.75% 2/1/2018 10.00 HARRY & DAVID OP 9.00% 3/1/2013 15.50 HAWAIIAN TELCOM 9.75% 5/1/2013 5.75 HAWAIIAN TELCOM 12.50% 5/1/2015 1.50 HAWKER BEECHCRAF 8.50% 4/1/2015 20.00 HAWKER BEECHCRAF 9.75% 4/1/2017 14.00 HEADWATERS INC 2.50% 2/1/2014 19.00 HEADWATERS INC 2.88% 6/1/2016 14.55 HERTZ CORP 6.25% 3/15/2009 99.58 HERTZ CORP 6.35% 6/15/2010 60.05 HERTZ CORP 7.40% 3/1/2011 36.70 HERTZ CORP 7.63% 6/1/2012 39.50 HEXION US/NOVA 9.75% 11/15/2014 15.06 HILTON HOTELS 7.20% 12/15/2009 87.00 HILTON HOTELS 7.50% 12/15/2017 11.50 HILTON HOTELS 8.25% 2/15/2011 14.38 HINES NURSERIES 10.25% 10/1/2011 14.50 HOECHST C-TENDER 7.13% 3/15/2009 99.00 HUTCHINSON TECH 3.25% 1/15/2026 25.63 IDEARC INC 8.00% 11/15/2016 1.50 INCYTE CORP 3.50% 2/15/2011 48.45 INCYTE CORP LTD 3.50% 2/15/2011 51.46 INN OF THE MOUNT 12.00% 11/15/2010 9.00 INTCOMEX INC 11.75% 1/15/2011 33.00 INTL LEASE FIN 4.38% 11/1/2009 81.44 INTL LEASE FIN 4.88% 9/1/2010 67.25 INTL LEASE FIN 6.38% 3/15/2009 99.95 ISTAR FINANCIAL 5.13% 4/1/2011 41.00 ISTAR FINANCIAL 5.15% 3/1/2012 32.00 ISTAR FINANCIAL 5.38% 4/15/2010 44.90 ISTAR FINANCIAL 5.50% 6/15/2012 35.00 ISTAR FINANCIAL 5.65% 9/15/2011 40.00 ISTAR FINANCIAL 5.70% 3/1/2014 27.00 ISTAR FINANCIAL 5.80% 3/15/2011 40.00 ISTAR FINANCIAL 5.95% 10/15/2013 27.00 ISTAR FINANCIAL 6.00% 12/15/2010 52.50 ISTAR FINANCIAL 6.50% 12/15/2013 27.00 ISTAR FINANCIAL 8.63% 6/1/2013 37.55 JAZZ TECHNOLOGIE 8.00% 12/31/2011 22.25 JEFFERSON SMURFI 7.50% 6/1/2013 7.25 JEFFERSON SMURFI 8.25% 10/1/2012 7.38 K HOVNANIAN ENTR 6.25% 1/15/2015 26.00 K HOVNANIAN ENTR 6.38% 12/15/2014 26.50 K HOVNANIAN ENTR 6.50% 1/15/2014 22.88 K HOVNANIAN ENTR 7.50% 5/15/2016 24.00 K HOVNANIAN ENTR 7.75% 5/15/2013 24.07 K HOVNANIAN ENTR 8.00% 4/1/2012 38.00 K HOVNANIAN ENTR 8.63% 1/15/2017 25.50 K HOVNANIAN ENTR 8.88% 4/1/2012 32.75 KAISER ALUMINUM 12.75% 2/1/2003 4.00 KELLWOOD CO 7.63% 10/15/2017 5.00 KELLWOOD CO 7.88% 7/15/2009 45.00 KEMET CORP 2.25% 11/15/2026 14.50 KEYSTONE AUTO OP 9.75% 11/1/2013 20.75 KIMBALL HILL INC 10.50% 12/15/2012 0.00 KKR FINANCIAL 7.00% 7/15/2012 25.00 KNIGHT RIDDER 4.63% 11/1/2014 14.00 KNIGHT RIDDER 5.75% 9/1/2017 13.50 KNIGHT RIDDER 6.88% 3/15/2029 10.00 KNIGHT RIDDER 7.13% 6/1/2011 13.00 KNIGHT RIDDER 7.15% 11/1/2027 14.25 KNIGHT RIDDER 9.88% 4/15/2009 90.00 KRATON POLYMERS 8.13% 1/15/2014 25.00 LANDAMERICA 3.13% 11/15/2033 10.00 LANDAMERICA 3.25% 5/15/2034 14.50 LANDRY'S RESTAUR 9.50% 12/15/2014 97.18 LAZYDAYS RV 11.75% 5/15/2012 31.88 LAZYDAYS RV 11.75% 5/15/2012 4.90 LEAR CORP 5.75% 8/1/2014 21.00 LEAR CORP 8.50% 12/1/2013 16.00 LEAR CORP 8.75% 12/1/2016 15.90 LECROY CORP 4.00% 10/15/2026 38.60 LEHMAN BROS HLDG 1.50% 3/23/2012 9.50 LEHMAN BROS HLDG 3.95% 11/10/2009 12.00 LEHMAN BROS HLDG 4.00% 4/16/2019 6.00 LEHMAN BROS HLDG 4.25% 1/27/2010 12.75 LEHMAN BROS HLDG 4.38% 11/30/2010 12.00 LEHMAN BROS HLDG 4.50% 7/26/2010 11.90 LEHMAN BROS HLDG 4.50% 8/3/2011 5.00 LEHMAN BROS HLDG 4.70% 3/6/2013 8.80 LEHMAN BROS HLDG 4.80% 2/27/2013 5.50 LEHMAN BROS HLDG 4.80% 3/13/2014 11.50 LEHMAN BROS HLDG 4.80% 6/24/2023 7.50 LEHMAN BROS HLDG 5.00% 1/14/2011 12.00 LEHMAN BROS HLDG 5.00% 1/22/2013 5.06 LEHMAN BROS HLDG 5.00% 2/11/2013 5.00 LEHMAN BROS HLDG 5.00% 3/27/2013 5.25 LEHMAN BROS HLDG 5.00% 6/26/2015 4.25 LEHMAN BROS HLDG 5.00% 8/5/2015 7.86 LEHMAN BROS HLDG 5.00% 12/18/2015 2.50 LEHMAN BROS HLDG 5.00% 5/28/2023 7.56 LEHMAN BROS HLDG 5.00% 5/30/2023 7.25 LEHMAN BROS HLDG 5.00% 6/10/2023 7.00 LEHMAN BROS HLDG 5.00% 6/17/2023 6.50 LEHMAN BROS HLDG 5.10% 1/28/2013 7.00 LEHMAN BROS HLDG 5.10% 2/15/2020 7.75 LEHMAN BROS HLDG 5.15% 2/4/2015 10.15 LEHMAN BROS HLDG 5.20% 5/13/2020 4.67 LEHMAN BROS HLDG 5.25% 2/6/2012 12.00 LEHMAN BROS HLDG 5.25% 2/11/2015 7.50 LEHMAN BROS HLDG 5.25% 3/8/2020 6.00 LEHMAN BROS HLDG 5.25% 5/20/2023 7.00 LEHMAN BROS HLDG 5.35% 2/25/2018 2.22 LEHMAN BROS HLDG 5.35% 3/13/2020 4.50 LEHMAN BROS HLDG 5.35% 6/14/2030 1.00 LEHMAN BROS HLDG 5.38% 5/6/2023 3.33 LEHMAN BROS HLDG 5.40% 3/6/2020 5.00 LEHMAN BROS HLDG 5.40% 3/20/2020 8.56 LEHMAN BROS HLDG 5.40% 3/30/2029 7.50 LEHMAN BROS HLDG 5.40% 6/21/2030 7.25 LEHMAN BROS HLDG 5.45% 3/15/2025 7.25 LEHMAN BROS HLDG 5.45% 4/6/2029 7.25 LEHMAN BROS HLDG 5.45% 2/22/2030 7.25 LEHMAN BROS HLDG 5.45% 7/19/2030 3.70 LEHMAN BROS HLDG 5.45% 9/20/2030 5.87 LEHMAN BROS HLDG 5.50% 4/4/2016 9.90 LEHMAN BROS HLDG 5.50% 2/4/2018 2.72 LEHMAN BROS HLDG 5.50% 2/19/2018 4.00 LEHMAN BROS HLDG 5.50% 11/4/2018 7.06 LEHMAN BROS HLDG 5.50% 2/27/2020 7.50 LEHMAN BROS HLDG 5.50% 8/19/2020 7.50 LEHMAN BROS HLDG 5.50% 3/14/2023 3.78 LEHMAN BROS HLDG 5.50% 4/8/2023 7.25 LEHMAN BROS HLDG 5.50% 4/15/2023 7.50 LEHMAN BROS HLDG 5.50% 4/23/2023 9.17 LEHMAN BROS HLDG 5.50% 8/5/2023 7.50 LEHMAN BROS HLDG 5.50% 10/7/2023 3.90 LEHMAN BROS HLDG 5.50% 1/27/2029 4.00 LEHMAN BROS HLDG 5.50% 2/3/2029 2.20 LEHMAN BROS HLDG 5.50% 8/2/2030 5.00 LEHMAN BROS HLDG 5.55% 2/11/2018 8.10 LEHMAN BROS HLDG 5.55% 3/9/2029 4.15 LEHMAN BROS HLDG 5.55% 1/25/2030 7.50 LEHMAN BROS HLDG 5.55% 9/27/2030 4.01 LEHMAN BROS HLDG 5.55% 12/31/2034 7.18 LEHMAN BROS HLDG 5.60% 1/22/2018 6.00 LEHMAN BROS HLDG 5.60% 2/17/2029 4.88 LEHMAN BROS HLDG 5.60% 2/24/2029 7.56 LEHMAN BROS HLDG 5.60% 3/2/2029 7.50 LEHMAN BROS HLDG 5.60% 2/25/2030 7.56 LEHMAN BROS HLDG 5.60% 5/3/2030 9.20 LEHMAN BROS HLDG 5.63% 1/24/2013 13.50 LEHMAN BROS HLDG 5.63% 3/15/2030 1.65 LEHMAN BROS HLDG 5.65% 11/23/2029 3.00 LEHMAN BROS HLDG 5.65% 8/16/2030 6.50 LEHMAN BROS HLDG 5.65% 12/31/2034 7.25 LEHMAN BROS HLDG 5.70% 1/28/2018 7.06 LEHMAN BROS HLDG 5.70% 2/10/2029 5.47 LEHMAN BROS HLDG 5.70% 4/13/2029 8.50 LEHMAN BROS HLDG 5.70% 9/7/2029 7.50 LEHMAN BROS HLDG 5.70% 12/14/2029 7.25 LEHMAN BROS HLDG 5.75% 4/25/2011 12.00 LEHMAN BROS HLDG 5.75% 7/18/2011 13.13 LEHMAN BROS HLDG 5.75% 5/17/2013 13.50 LEHMAN BROS HLDG 5.75% 3/27/2023 9.05 LEHMAN BROS HLDG 5.75% 9/16/2023 11.39 LEHMAN BROS HLDG 5.75% 10/15/2023 7.46 LEHMAN BROS HLDG 5.75% 10/21/2023 5.00 LEHMAN BROS HLDG 5.75% 11/12/2023 4.50 LEHMAN BROS HLDG 5.75% 11/25/2023 7.50 LEHMAN BROS HLDG 5.75% 12/16/2028 8.56 LEHMAN BROS HLDG 5.75% 12/23/2028 7.56 LEHMAN BROS HLDG 5.75% 8/24/2029 8.60 LEHMAN BROS HLDG 5.75% 9/14/2029 7.50 LEHMAN BROS HLDG 5.75% 10/12/2029 1.83 LEHMAN BROS HLDG 5.75% 3/29/2030 8.10 LEHMAN BROS HLDG 5.80% 9/3/2020 9.50 LEHMAN BROS HLDG 5.80% 10/25/2030 7.81 LEHMAN BROS HLDG 5.85% 11/8/2030 3.96 LEHMAN BROS HLDG 5.88% 11/15/2017 14.00 LEHMAN BROS HLDG 5.90% 5/4/2029 7.25 LEHMAN BROS HLDG 5.90% 2/7/2031 2.38 LEHMAN BROS HLDG 5.95% 12/20/2030 11.25 LEHMAN BROS HLDG 6.00% 7/19/2012 10.00 LEHMAN BROS HLDG 6.00% 1/22/2020 7.16 LEHMAN BROS HLDG 6.00% 2/12/2020 7.20 LEHMAN BROS HLDG 6.00% 1/29/2021 7.20 LEHMAN BROS HLDG 6.00% 10/23/2028 8.17 LEHMAN BROS HLDG 6.00% 11/18/2028 3.77 LEHMAN BROS HLDG 6.00% 5/11/2029 8.60 LEHMAN BROS HLDG 6.00% 7/20/2029 7.50 LEHMAN BROS HLDG 6.00% 4/30/2034 7.50 LEHMAN BROS HLDG 6.00% 7/30/2034 7.32 LEHMAN BROS HLDG 6.00% 2/21/2036 6.50 LEHMAN BROS HLDG 6.00% 2/24/2036 7.50 LEHMAN BROS HLDG 6.00% 2/12/2037 7.50 LEHMAN BROS HLDG 6.05% 6/29/2029 1.12 LEHMAN BROS HLDG 6.10% 8/12/2023 7.56 LEHMAN BROS HLDG 6.15% 4/11/2031 8.30 LEHMAN BROS HLDG 6.20% 9/26/2014 13.00 LEHMAN BROS HLDG 6.20% 6/15/2027 7.50 LEHMAN BROS HLDG 6.20% 5/25/2029 3.21 LEHMAN BROS HLDG 6.25% 2/5/2021 5.00 LEHMAN BROS HLDG 6.25% 2/22/2023 7.00 LEHMAN BROS HLDG 6.30% 3/27/2037 5.00 LEHMAN BROS HLDG 6.40% 10/11/2022 6.50 LEHMAN BROS HLDG 6.50% 2/28/2023 8.00 LEHMAN BROS HLDG 6.50% 3/6/2023 7.20 LEHMAN BROS HLDG 6.50% 10/18/2027 5.98 LEHMAN BROS HLDG 6.50% 10/25/2027 7.25 LEHMAN BROS HLDG 6.50% 1/17/2033 8.04 LEHMAN BROS HLDG 6.50% 12/22/2036 7.50 LEHMAN BROS HLDG 6.50% 2/13/2037 7.00 LEHMAN BROS HLDG 6.50% 6/21/2037 7.25 LEHMAN BROS HLDG 6.50% 7/13/2037 7.00 LEHMAN BROS HLDG 6.60% 10/3/2022 8.01 LEHMAN BROS HLDG 6.63% 1/18/2012 10.00 LEHMAN BROS HLDG 6.63% 7/27/2027 12.50 LEHMAN BROS HLDG 6.75% 7/1/2022 2.47 LEHMAN BROS HLDG 6.75% 11/22/2027 7.35 LEHMAN BROS HLDG 6.75% 3/11/2033 8.71 LEHMAN BROS HLDG 6.75% 10/26/2037 3.68 LEHMAN BROS HLDG 6.80% 9/7/2032 6.38 LEHMAN BROS HLDG 6.85% 8/16/2032 5.00 LEHMAN BROS HLDG 6.85% 8/23/2032 7.25 LEHMAN BROS HLDG 6.88% 5/2/2018 13.75 LEHMAN BROS HLDG 6.88% 7/17/2037 0.01 LEHMAN BROS HLDG 6.90% 9/1/2032 5.00 LEHMAN BROS HLDG 7.00% 5/12/2023 7.50 LEHMAN BROS HLDG 7.00% 9/27/2027 13.50 LEHMAN BROS HLDG 7.00% 10/4/2032 7.50 LEHMAN BROS HLDG 7.00% 7/27/2037 9.10 LEHMAN BROS HLDG 7.00% 9/28/2037 4.00 LEHMAN BROS HLDG 7.00% 11/16/2037 4.35 LEHMAN BROS HLDG 7.00% 12/28/2037 8.09 LEHMAN BROS HLDG 7.00% 1/31/2038 8.70 LEHMAN BROS HLDG 7.00% 2/1/2038 7.75 LEHMAN BROS HLDG 7.00% 2/7/2038 10.13 LEHMAN BROS HLDG 7.00% 2/8/2038 4.75 LEHMAN BROS HLDG 7.00% 4/22/2038 4.60 LEHMAN BROS HLDG 7.05% 2/27/2038 9.00 LEHMAN BROS HLDG 7.10% 3/25/2038 4.00 LEHMAN BROS HLDG 7.25% 2/27/2038 7.25 LEHMAN BROS HLDG 7.25% 4/29/2038 4.00 LEHMAN BROS HLDG 7.35% 5/6/2038 7.00 LEHMAN BROS HLDG 7.73% 10/15/2023 9.10 LEHMAN BROS HLDG 7.88% 11/1/2009 11.75 LEHMAN BROS HLDG 7.88% 8/15/2010 13.50 LEHMAN BROS HLDG 8.05% 1/15/2019 8.06 LEHMAN BROS HLDG 8.50% 8/1/2015 10.00 LEHMAN BROS HLDG 8.50% 6/15/2022 8.09 LEHMAN BROS HLDG 8.75% 12/21/2021 1.12 LEHMAN BROS HLDG 8.75% 2/6/2023 4.00 LEHMAN BROS HLDG 8.80% 3/1/2015 10.00 LEHMAN BROS HLDG 8.92% 2/16/2017 10.00 LEHMAN BROS HLDG 9.50% 12/28/2022 8.00 LEHMAN BROS HLDG 9.50% 1/30/2023 8.50 LEHMAN BROS HLDG 9.50% 2/27/2023 4.00 LEHMAN BROS HLDG 10.00% 3/13/2023 7.88 LEHMAN BROS HLDG 10.38% 5/24/2024 6.16 LEHMAN BROS HLDG 11.00% 10/25/2017 5.00 LEHMAN BROS HLDG 11.00% 6/22/2022 7.55 LEHMAN BROS HLDG 11.50% 9/26/2022 6.60 LEHMAN BROS HLDG 12.12% 9/11/2009 8.63 LEHMAN BROS HLDG 18.00% 7/14/2023 7.13 LEHMAN BROS INC 7.50% 8/1/2026 1.00 LEINER HEALTH 11.00% 6/1/2012 0.53 LEVEL 3 COMM INC 11.50% 3/1/2010 50.00 LITHIA MOTORS 2.88% 5/1/2014 89.50 LITTLE TRAV BAY 10.25% 2/15/2014 29.88 LOCAL INSIGHT 11.00% 12/1/2017 22.75 LOEHMANNS CAP 12.00% 10/1/2011 45.38 LOEHMANNS CAP 13.00% 10/1/2011 46.38 MAGMA DESIGN 2.00% 5/15/2010 62.50 MAGNA ENTERTAINM 7.25% 12/15/2009 31.50 MAGNA ENTERTAINM 8.55% 6/15/2010 20.50 MAJESTIC STAR 9.50% 10/15/2010 25.06 MAJESTIC STAR 9.75% 1/15/2011 3.00 MANDALAY RESORT 6.38% 12/15/2011 37.75 MANDALAY RESORT 6.50% 7/31/2009 55.00 MANDALAY RESORTS 9.38% 2/15/2010 17.25 MASONITE CORP 11.00% 4/6/2015 2.75 MEDIANEWS GROUP 6.38% 4/1/2014 4.25 MEDIANEWS GROUP 6.88% 10/1/2013 4.25 MERCER INTL INC 9.25% 2/15/2013 35.00 MERISANT CO 9.50% 7/15/2013 3.00 MERIX CORP 4.00% 5/15/2013 24.50 MERRILL LYNCH 12.00% 3/26/2010 18.44 METALDYNE CORP 11.00% 6/15/2012 11.29 MGM MIRAGE 6.00% 10/1/2009 47.00 MGM MIRAGE 6.75% 9/1/2012 37.00 MGM MIRAGE 6.75% 4/1/2013 21.50 MGM MIRAGE 8.38% 2/1/2011 9.25 MGM MIRAGE 8.50% 9/15/2010 42.50 MICHAELS STORES 10.00% 11/1/2014 34.00 MICHAELS STORES 11.38% 11/1/2016 24.00 MILLENNIUM AMER 7.63% 11/15/2026 3.75 MOHEGAN TRIBAL 6.38% 7/15/2009 76.00 MOHEGAN TRIBAL 6.88% 2/15/2015 25.00 MOHEGAN TRIBAL 7.13% 8/15/2014 30.90 MOHEGAN TRIBAL 7.13% 8/15/2014 29.63 MOHEGAN TRIBAL 8.00% 4/1/2012 33.50 MOHEGAN TRIBAL 8.38% 7/1/2011 41.00 MOMENTIVE PERFOR 11.50% 12/1/2016 19.00 MORRIS PUBLISH 7.00% 8/1/2013 6.00 MRS FIELDS 10.00% 10/24/2014 25.00 MTR GAMING GROUP 9.00% 6/1/2012 50.25 MTR GAMING GROUP 9.75% 4/1/2010 74.00 NATL FINANCIAL 0.75% 2/1/2012 34.44 NCI BLDG SYSTEMS 2.13% 11/15/2024 72.00 NCO GROUP INC 11.88% 11/15/2014 10.00 NEFF CORP 10.00% 6/1/2015 20.13 NELNET INC 5.13% 6/1/2010 64.50 NELNET INC 7.40% 9/29/2036 14.13 NETWORK COMMUNIC 10.75% 12/1/2013 15.00 NEW PLAN EXCEL 7.40% 9/15/2009 80.26 NEW PLAN EXCEL 7.50% 7/30/2029 16.00 NEW PLAN REALTY 6.90% 2/15/2028 10.33 NEW PLAN REALTY 6.90% 2/15/2028 9.00 NEW PLAN REALTY 7.65% 11/2/2026 16.00 NEW PLAN REALTY 7.97% 8/14/2026 17.00 NEWARK GROUP INC 9.75% 3/15/2014 15.00 NEWPAGE CORP 10.00% 5/1/2012 24.50 NEWPAGE CORP 12.00% 5/1/2013 13.00 NORTEK INC 8.50% 9/1/2014 14.00 NORTEK INC 10.00% 12/1/2013 35.50 NORTH ATL TRADNG 9.25% 3/1/2012 19.50 NORTHERN TEL CAP 7.88% 6/15/2026 10.00 NTK HOLDINGS INC 0.00% 3/1/2014 12.00 NUVEEN INVEST 5.00% 9/15/2010 51.75 NUVEEN INVEST 5.50% 9/15/2015 15.00 NUVEEN INVESTM 10.50% 11/15/2015 21.90 OLD EVANGELINE 13.00% 3/1/2010 78.13 OSI RESTAURANT 10.00% 6/15/2015 24.75 OUTBOARD MARINE 9.13% 4/15/2017 3.00 PALM HARBOR 3.25% 5/15/2024 18.50 PANOLAM INDUSTRI 10.75% 10/1/2013 10.00 PARK PLACE ENT 7.50% 9/1/2009 60.25 PARK PLACE ENT 7.88% 3/15/2010 32.00 PARK PLACE ENT 8.13% 5/15/2011 23.50 PEGASUS SOLUTION 10.50% 4/15/2015 24.13 PILGRIMS PRIDE 9.25% 11/15/2013 7.00 PILGRIM'S PRIDE 8.38% 5/1/2017 25.00 PINNACLE AIRLINE 3.25% 2/15/2025 74.50 PLIANT CORP 11.63% 6/15/2009 40.25 PLY GEM INDS 9.00% 2/15/2012 17.50 PLY GEM INDS 11.75% 6/15/2013 40.00 POLYONE CORP 8.88% 5/1/2012 36.50 POPE & TALBOT 8.38% 6/1/2013 0.60 POWERWAVE TECH 1.88% 11/15/2024 22.50 POWERWAVE TECH 3.88% 10/1/2027 17.00 PREGIS CORP 12.38% 10/15/2013 39.63 PRIMUS TELECOM 3.75% 9/15/2010 3.88 PRIMUS TELECOM 8.00% 1/15/2014 5.00 PRIMUS TELECOMM 14.25% 5/20/2011 32.19 QUALITY DISTRIBU 9.00% 11/15/2010 39.00 QUANTUM CORP 4.38% 8/1/2010 44.50 RADIAN GROUP 7.75% 6/1/2011 41.12 RADIO ONE INC 6.38% 2/15/2013 14.73 RADIO ONE INC 8.88% 7/1/2011 32.00 RAFAELLA APPAREL 11.25% 6/15/2011 13.50 RAIT FINANCIAL 6.88% 4/15/2027 29.45 RATHGIBSON INC 11.25% 2/15/2014 18.88 READER'S DIGEST 9.00% 2/15/2017 8.50 REAL MEX RESTAUR 10.00% 4/1/2010 75.25 REALOGY CORP 10.50% 4/15/2014 20.50 REALOGY CORP 12.38% 4/15/2015 10.75 RECKSON OPERATNG 7.75% 3/15/2009 99.50 RENTECH INC 4.00% 4/15/2013 19.50 RESIDENTIAL CAP 8.00% 2/22/2011 35.00 RESIDENTIAL CAP 8.50% 6/1/2012 23.85 RESIDENTIAL CAP 8.50% 4/17/2013 15.00 RESIDENTIAL CAP 8.38% 6/30/2010 35.00 RESIDENTIAL CAP 8.50% 5/15/2010 65.75 RESTAURANT CO 10.00% 10/1/2013 48.00 RH DONNELLEY 6.88% 1/15/2013 3.63 RH DONNELLEY 6.88% 1/15/2013 3.63 RH DONNELLEY 6.88% 1/15/2013 3.63 RH DONNELLEY 8.88% 1/15/2016 5.25 RH DONNELLEY 8.88% 10/15/2017 5.50 RH DONNELLEY INC 11.75% 5/15/2015 13.75 RITE AID CORP 6.88% 8/15/2013 18.75 RITE AID CORP 6.88% 12/15/2028 12.75 RITE AID CORP 7.70% 2/15/2027 15.05 RITE AID CORP 8.13% 5/1/2010 59.25 RITE AID CORP 8.50% 5/15/2015 22.70 RITE AID CORP 8.63% 3/1/2015 22.50 RITE AID CORP 9.25% 6/1/2013 9.75 RITE AID CORP 9.38% 12/15/2015 26.19 RITE AID CORP 9.50% 6/15/2017 22.00 RIVER ROCK ENT 9.75% 11/1/2011 48.00 RJ TOWER CORP 12.00% 6/1/2013 1.00 ROUSE CO LP/TRC 6.75% 5/1/2013 29.59 ROUSE COMPANY 5.38% 11/26/2013 27.25 ROUSE COMPANY 7.20% 9/15/2012 31.00 SABRE HOLDINGS 7.35% 8/1/2011 39.00 SALEM COMM HLDG 7.75% 12/15/2010 50.00 SECURUS TECH 11.00% 9/1/2011 64.50 SEQUA CORP 11.75% 12/1/2015 14.96 SIMMONS CO 7.88% 1/15/2014 14.00 SINCLAIR BROAD 3.00% 5/15/2027 59.00 SINCLAIR BROAD 6.00% 9/15/2012 37.50 SIRIUS SATELLITE 3.25% 10/15/2011 44.00 SIRIUS SATELLITE 9.63% 8/1/2013 43.56 SIX FLAGS INC 4.50% 5/15/2015 15.25 SIX FLAGS INC 8.88% 2/1/2010 28.00 SIX FLAGS INC 9.63% 6/1/2014 16.50 SIX FLAGS INC 9.75% 4/15/2013 12.00 SMURFIT-STONE 8.00% 3/15/2017 7.00 SONIC AUTOMOTIVE 5.25% 5/7/2009 75.00 SONIC AUTOMOTIVE 8.63% 8/15/2013 30.97 SPACEHAB INC 5.50% 10/15/2010 51.10 SPECTRUM BRANDS 7.38% 2/1/2015 20.63 SPECTRUM BRANDS 12.50% 10/2/2013 24.94 SPHERIS INC 11.00% 12/15/2012 31.50 STALLION OILFIEL 9.75% 2/1/2015 9.38 STANDARD MTR 6.75% 7/15/2009 72.37 STANDRD PAC CORP 5.13% 4/1/2009 100.00 STANLEY-MARTIN 9.75% 8/15/2015 29.00 STATION CASINOS 6.00% 4/1/2012 29.50 STATION CASINOS 6.50% 2/1/2014 2.20 STATION CASINOS 6.63% 3/15/2018 5.25 STATION CASINOS 6.88% 3/1/2016 2.50 STONE CONTAINER 8.38% 7/1/2012 7.25 STRATEGIC HOTEL 3.50% 4/1/2012 34.44 SWIFT TRANS CO 12.50% 5/15/2017 11.00 TEKNI-PLEX INC 12.75% 6/15/2010 73.50 TENNECO AUTOMOT 8.63% 11/15/2014 13.00 TENNECO INC 8.13% 11/15/2015 16.00 TERPHANE HLDING 12.50% 6/15/2009 85.63 TERPHANE HLDING 12.50% 6/15/2009 85.63 TETON ENERGY COR 10.75% 6/18/2013 36.05 THORNBURG MTG 8.00% 5/15/2013 18.00 TIMES MIRROR CO 6.61% 9/15/2027 2.50 TIMES MIRROR CO 7.25% 3/1/2013 3.25 TIMES MIRROR CO 7.25% 11/15/2096 4.25 TIMES MIRROR CO 7.50% 7/1/2023 0.70 TOUSA INC 7.50% 3/15/2011 1.00 TOUSA INC 9.00% 7/1/2010 2.00 TOYS R US 7.63% 8/1/2011 37.99 TOYS R US 7.88% 4/15/2013 32.50 TOYS R US DEL 8.75% 9/1/2021 15.00 TRANS-LUX CORP 8.25% 3/1/2012 35.20 TRANSMERIDIAN EX 12.00% 12/15/2010 6.50 TRAVELPORT LLC 11.88% 9/1/2016 32.00 TRIBUNE CO 4.88% 8/15/2010 3.63 TRIBUNE CO 5.25% 8/15/2015 3.50 TRIBUNE CO 5.67% 12/8/2008 3.00 TRICO MARINE 3.00% 1/15/2027 14.00 TRICO MARINE SER 6.50% 5/15/2028 32.27 TRIMAS CORP 9.88% 6/15/2012 48.50 TRONOX WORLDWIDE 9.50% 12/1/2012 10.50 TRUE TEMPER 8.38% 9/15/2011 37.25 TRUMP ENTERTNMNT 8.50% 6/1/2015 10.50 TRW AUTOMOTIVE 7.00% 3/15/2014 28.09 TUBE CITY IMS 9.75% 2/1/2015 16.00 UAL CORP 4.50% 6/30/2021 38.92 UAL CORP 5.00% 2/1/2021 59.88 UNION CARBIDE 6.70% 4/1/2009 99.51 UNISYS CORP 6.88% 3/15/2010 40.00 UNISYS CORP 8.00% 10/15/2012 21.75 UNISYS CORP 8.50% 10/15/2015 24.05 UNISYS CORP 12.50% 1/15/2016 27.00 UNITED COMPONENT 9.38% 6/15/2013 39.50 UNIV CITY DEVEL 11.75% 4/1/2010 74.25 UNIV CITY FL HLD 8.38% 5/1/2010 70.00 UNIVERSAL FOODS 6.50% 4/1/2009 91.50 UNIVISION COMM 7.85% 7/15/2011 55.00 US AIRWAYS GROUP 7.00% 9/30/2020 59.68 US CONCRETE INC 8.38% 4/1/2014 38.02 US LEASING INTL 6.00% 9/6/2011 12.52 US SHIPPING PART 13.00% 8/15/2014 34.50 USFREIGHTWAYS 8.50% 4/15/2010 50.50 VENOCO INC 8.75% 12/15/2011 52.50 VERASUN ENERGY 9.38% 6/1/2017 3.06 VERENIUM CORP 5.50% 4/1/2027 25.50 VERSO PAPER 11.38% 8/1/2016 17.50 VESTA INSUR GRP 8.75% 7/15/2025 1.00 VICORP RESTAURNT 10.50% 4/15/2011 3.00 VISTEON CORP 7.00% 3/10/2014 4.00 VISTEON CORP 8.25% 8/1/2010 6.00 VISTEON CORP 12.25% 12/31/2016 7.99 VITESSE SEMICOND 1.50% 10/1/2024 50.03 WASH MUT BANK NV 5.55% 6/16/2010 22.17 WASH MUTUAL INC 8.25% 4/1/2010 55.00 WATERFORD GAMING 8.63% 9/15/2014 27.13 WCI COMMUNITIES 4.00% 8/5/2023 2.10 WCI COMMUNITIES 6.63% 3/15/2015 3.19 WCI COMMUNITIES 9.13% 5/1/2012 0.50 WILLIAM LYONS 7.50% 2/15/2014 13.00 WILLIAM LYONS 7.63% 12/15/2012 17.00 WILLIAM LYONS 10.75% 4/1/2013 12.00 WIMAR OP LLC/FIN 9.63% 12/15/2014 1.76 WOLVERINE TUBE 10.50% 4/1/2009 81.00 XM SATELLITE 9.75% 5/1/2014 29.84 XM SATELLITE 10.00% 12/1/2009 75.00 XM SATELLITE 10.00% 12/31/2009 38.00 XM SATELLITE 13.00% 8/1/2013 46.79 ********* 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 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 ***