/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090310.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, March 10, 2009, Vol. 13, No. 68 Headlines ANDERSON NEWS: Publishers Ask for Chapter 7 Trustee ARIEL FUND: Seeks Lift of Restraining Order in NY University Suit ASARCO LLC: Confirms Deal for Sale of Operating Assets to Sterlite ASARCO LLC: Americas Mining Seeks Disposition of Tax Sharing Pact ASARCO LLC: Parent Drops 5th Circuit Appeal on USW Labor Pact ASARCO LLC: Seeks to Void Air Permits on Closure of El Paso Plant AUTOBACS STORES: To Conduct Own GOB Sales for 12 Stores BANK OF AMERICA: Merrill Lynch Discovers Irregularity in Trading BANK OF AMERICA: Andrew Cuomo Wants Bonus Recipients Disclosure BEARINGPOINT INC: Taps Wiley Rein as Government Contracts Counsel BEAZER HOMES: Projected Weak Cash Flow Cues Moody's Junk Rating BELL BUSINESS: Case Summary & 33 Largest Unsecured Creditors BELO CORPORATION: S&P Gives Negative Outlook; Affirms BB- Rating BERNARD L. MADOFF: Ariel Asks Court to Lift Restraining Order BERRY PETROLEUM: S&P Retains Negative Watch on 'BB-' Corp. Rating BROWN SHOE: S&P Downgrades Corporate Credit Rating to 'B' BUDGET WASTE: To Seek Creditor Protection Under CCAA BUFFETS HOLDING: Existing Lenders to Participate in Exit Financing CANADIAN SUPERIOR: Gets CCAA Protection Until March 25 CAPMARK FINANCIAL: S&P Puts Servicer Rankings on Negative Watch CASH TECHNOLOGIES: Receives Delisting Notice From NYSE CDX GAS: Wants Interim Nod to Use Cash Collateral Until March 27 CELLU TISSUE: S&P Puts 'B' Corp. Credit Rating on Negative Watch CHANGING WORLD TECH: Files for Chapter 11 in New York CINRAM INTERNATIONAL: S&P Cuts Corporate Credit Rating to 'B' CIRCUIT CITY: Seeks to Sell Trademarks, InterTAN to Bell Canada CIRCUIT CITY: Canada Creditors Could Recover 100%, Says Monitor CHALLENGER ENERGY: Receives Delisting Letter From NYSE Alternext CIRCUIT CITY: One Liberty Records $5.2MM Charge on Rejected Leases COLLINS & AIKMAN: S&P Puts B+ Neg. Watch on Debt-EBITDA Concerns COTT CORP: Appoints Jerry Fowden to Board of Directors DE CORO LIMITED: Financial Woes Cue Chapter 15 Filing DE CORO LIMITED: Voluntary Chapter 15 Case Summary DELTA AIR LINES: Renames Airport Lounges as Delta Sky Clubs DIAMOND GLASS: Reaches Plan Confirmation Settlement EARTH BIOFUELS: Board Stops Reverse Split of Common Stock EMPORIA PREFERRED I: Moody's Has Not Withdrawn Ratings on Notes EMPORIA PREFERRED III: Moody's Hasn't Withdrawn Notes Ratings ENERGY PARTNERS: Gets Non-Compliance Notice From MMS EXACT SCIENCES: Receives NASDAQ Non-Compliance Notice FIRST INDUSTRIAL: S&P Downgrades Corporate Credit Rating to 'BB' FORD MOTOR: Union Okays Cost-Cutting Changes in Labor Agreement GENERAL GROWTH: Rouse Unit Seeks Forbearance From Noteholders GENERAL GROWTH: Defers Payment of Unsec. Debt to Keep Liquidity GENERAL MOTORS: Republican Lawmakers Want Federal Aid Stopped GOODYEAR TIRE: Fitch Affirms Issuer Default Rating to 'BB-' HARGRAY COMMUNICATIONS: Moody's Affirms 'B2' Corp. Family Rating HARMAN INTERNATIONAL: S&P Affirms Corporate Credit Rating to BB+ HARRAH'S ENTERTAINMENT: S&P Downgrades Corp. Credit Rating to CC HARRAH'S OPERATING: S&P Cuts Corp. Credit Rating to 'CC' HEREFORD BIOFUELS: Parent to "Go Dark" and Deregister With SEC HOVNANIAN ENTERPRISES: Weak Cash Flow Cues Moody's Junk Rating INSITE VISION: To Appeal NYSE Decision to Delist Shares INTERLAKE MATERIAL: Gets Court OK to Sell Biz to Mecalux for $30MM INTERNATIONAL COAL: S&P Affirms Corporate Credit Rating at 'B-' JOHN KING: Court Dismisses Chapter 7 Bankruptcy Case KINGSLEY CAPITAL: Files Second Amended Disclosure Statement LANDAMERICA ASSESSMENT: Case Summary & 20 Top Unsecured Creditors LEUCADIA NATIONAL: Moody's Cuts Rating on $98 Mil. Notes to 'B2' LYONDELL CHEMICAL: Houston Refining Unit Sues Koch for $11.3MM LYONDELL CHEMICAL: Sues Air Products on Attempt to Get Payment LYONDELL CHEMICAL: To Cease Filing Reports with the SEC LYONDELL CHEMICAL: ConocoPhillips Appeals Injunction Order LYONDELL CHEMICAL: Reject Lease Agreements, 3 Pipeline Pacts MAGNA ENTERTAINMENT: Receives Interim OK to Access $62MM Facility MAGNA ENTERTAINMENT: Taps Weil Gotshal as Lead Bankruptcy Counsel MAGNA ENTERTAINMENT: Wants Miller Buckfire as Investment Banker MAGNA ENTERTAINMENT: Wants to Hire Richards Layton as Co-Counsel MCCLATCHY CO: Cuts 15% of Jobs & Reduces Exec Bonuses Under Plan MDRNA INC: Receives Delisting Notice From NASDAQ MEDIACOM COMMUNICATIONS: Receives Letter from Nasdaq MERISANT WORLDWIDE: Proposes Incentives for 437 Key Employees METROPOLITAN NASHVILLE: Moody's Assigns Rating on $33.6MM Bonds MONACO COACH: Wants to Access Lenders' Cash Collateral MONACO COACH: Seeks Omni Management as Claims Agent MORTGAGES LTD: Hearing on Disclosure Statement Set for April 6 MOTOROLA INC: Ex-CFO Paul Liska Says He Was Wrongfully Terminated MUVICO THEATERS: May File for Bankruptcy Protection NAVISTAR INT'L: Will Present 1st Quarter Results on March 11 NAVISITE INC: Nasdaq to Hear Appeal on Delisting on April 23 NELSON RE: Moody's Reviews 'B3' Rating on Class G Notes NEW YORK TIMES: Inks $225MM Sale-Leaseback for Part of HQ Building NEXSTAR BROADCASTING: Says Revenues Up 12% in 4th Quarter 2008 NOVA BIOSOURCE: Receives Additional Notice From NYSE NORTEL NETWORKS: Wins Court Nod to Award Non-Executive Bonuses OCEAN VILLAGE: Case Summary & Six Largest Unsecured Creditors PACIFIC ENERGY: Files for Chapter 11 to Facilitate Restructuring PACIFIC ENERGY: Case Summary & 35 Largest Unsecured Creditors PALATIN TECHNOLOGIES: Listing Compliance Plan Accepted by NYSE PANDA ETHANOL: To "Go Dark" and Deregister With the SEC PILGRIM'S PRIDE: Committee Sues Cobank to Invalidate Liens PLASTECH ENGINEERED: Reko Gets $1.2MM for Pre-Bankruptcy Goods PLIANT CORP: Deregisters Series AA Preferred Stock PSYCHIATRIC SOLUTIONS: Moody's Puts Ba3 Rating on $200MM Revolver REDCORP VENTURES: Obtains CCAA Protection Until April 3 REDCORP VENTURES: Files Chapter 15 Petition in Seattle RICHARD BOKAVICH: Puts Dealership on Sale After Bankruptcy Filing RIVER WEST MEDICAL: Files for Chapter 11 Bankruptcy Protection RIVIERA HOLDINGS: Moody's Junks Corporate Family Rating from 'B3' ROBBINS BROS: Taps Deloitte FAS as Bankruptcy Reporting Advisor ROBBINS BROS: Taps Omni Management as Claims and Noticing Agent ROBBINS BROS: Wants to Hire Pachulski Stang as Bankruptcy Counsel ROBBINS BROS: Seeks to Employ Deloitte Tax As Advisors SIRIUS XM RADIO: Liberty Media Closes Investment SMITH MOUNTAIN: Failure to Find Buyer Leads to Bankruptcy SMURFIT-STONE: Creditors Seek Return of Pre-Bankruptcy Deliveries SMURFIT-STONE: Gets Go-Signal to Hire Lazard As Investment Banker SMURFIT-STONE: Required to Obtain Workers' Insurance in Florida SMURFIT-STONE: To Walk Away From 31 Leases & 78 Contracts SOLSTICE LLC: Files for Chapter 11 in Manhattan SOLSTICE LLC: Case Summary & 20 Largest Unsecured Creditors SPIRE CORP: Receives Notice of Non-Compliance from Nasdaq STANDARD PACIFIC: Weak Cash Flow Cues Moody's Junk Rating from B2 STERLING MINING: In Talks with Minco to Settle Lease Dispute STRUCTURAL INVESTMENTS: Involuntary Chapter 11 Case Summary THIELE MANUFACTURING: In Dispute With Union After Chap. 11 Filing VALLEJO CITY: Loses $4.2MM Economic Dev't Administration Grant VICORP RESTAURANTS: Wants Plan Filing Period Extended to June 4 VISTEON CORP: Fitch Downgrades Issuer Default Rating to 'C' WHIRLPOOL CORP: S&P Assigns 'BB+' Subordinated Debt Rating WHOLE FOODS: Federal Trade Settlement Won't Affect Moody's Rtngs. WOOD STRUCTURES: Files for Chapter 11 in Portland, Maine YANKEE CANDLE: Jan. 3 Balance Sheet Upside-Down by $2.82 Million YELLOWSTONE CLUB: Court Defers Plan Process Until April 1 YOUNG BROADCASTING: Gets Final Approval to Use Cash Collateral * Hearing on BAPCPA's 7-Month Lease Rule Set for March 11 * Junk Default Rate Rises to 5.2% in February, Says Moody's * Moody's Comments on Deep Discount Substitution Amendments * Greenhill Forms Financing Advisory & Restructuring Group * Large Companies With Insolvent Balance Sheets ********* ANDERSON NEWS: Publishers Ask for Chapter 7 Trustee --------------------------------------------------- Four publishing companies owed a combined $37.5 million asked the U.S. Bankruptcy Court, District of Delaware to appoint an interim trustee in Anderson News LLC's Chapter 7 case. The publishers, Hachette Book Group, HarperCollins Publishers, Random House Inc., and Simon & Schuster Inc., were the same entities that filed an involuntary Chapter 7 petition for Anderson news. Anderson News has 20 days from the petition date to object to the bankruptcy filing. According to Bloomberg's Bill Rochelle, the publishers say they learned on Feb. 19 that Anderson was shutting down and the assets would be applied to a secured loan from Sun Trust Bank. The creditors say the bank loan is $60 million. The publishers, Mr. Rochelle says, want a trustee to take over immediately because they don't know what's happening with $200 million of inventory. Anderson News LLC is a sales and marketing company for books and magazines. ARIEL FUND: Seeks Lift of Restraining Order in NY University Suit ----------------------------------------------------------------- Zachery Kouwe at The New York Times reports that lawyers for J. Ezra Merkin have asked the Hon. Richard Lowe of the New York State Supreme Court to modify a temporary restraining order restricting Ariel Fund Ltd., from recouping losses it suffered from its investment with Bernard L. Madoff Investment Securities LLC. According to NY Times, the lawyers for Ariel Fund at Schulte, Roth & Zabel requested for a court hearing to lift or modify the restraining order because they were unable to work out a compromise with New York University. The NY Times relates that the university has filed a lawsuit against Ariel Fund for investing with Mr. Madoff. Chad Bray at The Wall Street Journal reports the university is seeking the appointment of a receiver for Ariel Fund and that any improper payments to Mr. Merkin be returned and his deferred compensation not be paid. NY Times quoted Mr. Merkin's lawyers as saying, "Simply stated, there is no legal or factual basis for this Court or Plaintiff to interfere with the operations of the Fund -- which, as noted, has not been adjudicated liable for anything, and, indeed, is not even alleged to be liable." NY Times states that Judge Lowe extended the restraining order in February, barring Mr. Merkin from selling any of the $700 million in assets remaining in Ariel Fund and other funds controlled by his firm, Gabriel Capital. The restraining order, says the report, was originally put in place on December 24, 2008. Since then, Mr. Merkin hadn't been able to pay expenses including rent, telephone bills, year-end bonuses, and health insurance premiums for his workers, the report state. According to the report, Judge Lowe then amended the restraining order in January 2009 to allow Ariel Fund to pay some of its bills. WSJ states that Howard Schiffman, the attorney for Ariel Fund, has described the company as being "hamstrung" by the order, as it places "severe restrictions" on the fund's ability to operate and the university has been unwilling to agree to a modification in the order. NY Times relates that Mr. Merkin's lawyers said that the restraining order is preventing Ariel Fund from paying its lawyers to file claims with the Securities Investor Protection Corporation, which is liquidating Bernard L. Madoff Investment. NY Times, citing the lawyers, states that the restraining order also stops Ariel Fund from paying advisers to help liquidate the remaining non-Madoff assets in the fund. The lawyers also complained that Ariel Fund couldn't pay legal counsel to help it cooperate with continuing investigations into the Madoff fraud because of the order, the report states. Mr. Merkin said he will wind down the fund, WSJ reports. 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. About Ariel Fund Ariel Fund Ltd. is a hedge fund founded and controlled by J. Ezra Merkin. ASARCO LLC: Confirms Deal for Sale of Operating Assets to Sterlite ------------------------------------------------------------------ ASARCO LLC reported that it has signed a new agreement to sell substantially all of its operating assets to Sterlite (USA), Inc., a subsidiary of Sterlite Industries (India) Ltd. and Vedanta Resources plc. The sale price is $1.1 billion cash plus a senior secured, non-interest bearing promissory note for $600 million, payable over nine years. The principal amount of the note is subject to adjustment post-closing based on a reconciliation of ASARCO's working capital. The operating assets to be sold include three copper mines, associated mills and SX-EW plants in Arizona; a copper smelter in Arizona; and a copper refinery, rod and cake plants and precious metals plant in Texas. The sale is part of ASARCO's plan to reorganize under chapter 11 of the U.S. bankruptcy code. Two letters of credit totaling $100 million, issued by ABM AMRO Chicago for the benefit of ASARCO, secure this agreement. An additional $25 million letter of credit will be issued if the bankruptcy court approves the disclosure statement for ASARCO's reorganization plan. Sterlite Industries (India) Ltd. guarantees the purchaser's performance under the new agreement. Upon closing, ASARCO will release Sterlite from any claims arising out of the first purchase and sale agreement signed in May 2008. "Reaching this agreement in such difficult economic times is a tribute to our Board of Directors and principal creditor groups," said Joseph F. Lapinsky, President and Chief Executive Officer of ASARCO. "It is satisfying to see months of negotiations finally bear fruit in an agreement that achieves value for all concerned," he continued. Until the bankruptcy court approves certain portions of the new agreement, ASARCO is permitted to solicit and negotiate other offers under a "go shop" provision. Following court approval, a "no shop" restriction goes into effect; but ASARCO's Board of Directors retains a "fiduciary out," enabling it to consider and pursue any superior alternative proposed transaction. ASARCO expects this court approval to occur by April 15, 2009. The entire agreement is subject to later approval of the bankruptcy court in connection with the confirmation of ASARCO's plan of reorganization, which will enable ASARCO to conclude its chapter 11 case. ASARCO is an integrated copper mining, smelting and refining company based in Tucson, AZ with approximately 2,500 employees. Formerly known as American Smelting and Refining Company, ASARCO is 110 years old and currently is the third largest copper producer in the United States. It sold 237,000 tons of refined copper in 2008 and had revenues of approximately $1.9 billion. ASARCO's mines currently have estimated reserves of approximately 5 million tons of contained copper. Sterlite Industries is an Indian non-ferrous metals and mining company with interests and operations in aluminum, copper, zinc and lead. It is a subsidiary of Vedanta Resources plc, a London- based diversified FTSE 100 metals and mining group company. Barclays Capital acted as financial advisor and Baker Botts L.L.P. acted as legal advisor to ASARCO in this transaction. RBS Securities, a part of the RBS Group, acted as financial advisor and Shearman & Sterling acted as legal advisor to Sterlite in this transaction. 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: Americas Mining Seeks Disposition of Tax Sharing Pact ----------------------------------------------------------------- Americas Mining Corporation and Asarco Incorporated renewed a request asking the U.S. Bankruptcy Court for the Southern District of Texas to compel ASARCO LLC to assume or reject the parties' tax sharing agreement, pursuant to Section 365(d)(2) of the Bankruptcy Code. Asarco Inc. ("The Parent") and ASARCO LLC are parties to a tax sharing agreement dated January 22, 2004, which governs the parties' rights and obligations vis a vis each other with regard to taxes. Specifically, the Parent pays taxes and receives tax refunds on behalf of ASARCO LLC and its subsidiaries. In turn, ASARCO LLC is obligated to reimburse the Parent for ASARCO LLC's taxes. ASARCO LLC is also entitled to receive refunds, less certain professional fees, related to its business operations. The parties' tax liabilities constitute substantial obligations each year. Charles A. Beckham, Jr., Esq., at Haynes and Boone, LLP, in Houston, Texas, relates that the Parent filed the original request to compel ASARCO LLC to take a position on the TSA and to achieve certainty in the Parent's own tax planning. The Court subsequently denied the original request, but stated that it might want to rethink the issue in the future. Since that time, three tax years, 2006 through 2008, have come and gone. Judge Richard S. Schmidt fixed September 19, 2008, as the bar date for parties to file administrative claims. To comply with the Administrative Claims Bar Date, the Parent timely filed its administrative claim for taxes for years the 2006, 2007 and 2008, aggregating $514,000,000, which is the same number used by ASARCO LLC in its projections of liabilities. On January 9, 2009, the Debtor filed an objection to the Parent's Claim No. 18571. To resolve the Parent's Administrative Claim, the Court and the Parent need to know what position ASARCO LLC intends to take with respect to the TSA, hence, the renewed request, Mr. Beckham relates. "The Debtor has vacillated on the issue of whether to assume or reject the TSA for two and a half years, clearly in an effort to preserve the alternatives of relying on the TSA to claim ownership of tax refunds and rejecting the TSA to avoid its tax liability for future years," Mr. Beckham tells the Court. "Given the pending litigation and the substantial time that has gone by, Debtor has had ample opportunity to weight its options," he avers. The uncertainty of the issue continues to interfere with the Parent's ability to engage in effective tax planning, Mr. Beckham notes. Hence, the Parent urges the Court to compel ASARCO LLC to assume or reject the TSA, so that the tax issues can be resolved between the parties once and for all. AMC Wants TSA-Related Requests Consolidated Americas Mining and ASARCO Incorporated also ask the Court to consolidate: (1) The Adversary Proceeding initiated by ASARCO LLC against AMC and other defendants relating to a Tax Sharing Agreement between AMC and ASARCO LLC; (2) The Parent's renewed request to compel the Debtors to assume or reject the TSA pursuant to Section 365(d)(2) of Bankruptcy Code; and (3) ASARCO LLC's objection to the Parent's Claim No. 18571. Mr. Beckham relates that each of the matters for consolidation concerns the parties' rights and obligations with regard to taxes, and is contingent upon or inherently related to the TSA. As ASARCO LLC has previously acknowledged in its own briefing, Mr. Beckham reiterates that the matters are "closely intertwined," and the resolution of one matter will inevitably impact, or possibly moot, the other matters. He maintains that consolidation of the subject disputes is appropriate as it is expected to effect a just, expeditious and complete resolution of the parties' disputes over taxes and tax refunds. Deciding the issues in one consolidated proceeding will avoid the potential harm of which ASARCO LLC complained when the Parent filed the original request to compel in 2006, Mr. Beckham asserts. ASARCO LLC previously expressed concern that a decision to assume or reject the TSA is premature because the tax refund adversary proceeding had not been resolved, and that the parties had not yet had the opportunity to gain "clarity on the TSA." "But two and a half years have passed since the initial Motion to Compel was filed, and the parties have briefed the TSA repeatedly in the Tax Refund Adversary, giving the Court the opportunity to make a fully informed decision about which party is the rightful owner of the Tax Refund," Mr. Beckham points out. "The Court should not decide these issues in a vacuum - it should address and resolve all three matters at once, in a just and expeditious manner, through consolidation," he continues. 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: Parent Drops 5th Circuit Appeal on USW Labor Pact ------------------------------------------------------------- Charles R. Fulbruge III, Clerk of the U.S. Court of Appeals for the Fifth Circuit, at the direction of the Appellate Court, ordered that appellant Asarco Incorporated's unopposed request to dismiss the appeal, pursuant to Rule 42.4 of the Fifth Circuit, is granted without prejudice to the right of either party to reinstate the appeal within 180 days. Mr. Fulbruge noted that an additional period of 180 days from the "expirational date" will be allowed for applying for relief from a dismissal with prejudice resulting from mistake, inadvertence or excusable neglect of counsel or a pro se litigant. Asarco Incorporated previously notified the U.S. District Court for the Southern District of Texas that it would take an appeal to the Appellate Court from the final judgment entered by the District Court, affirming the order of the U.S. Bankruptcy Court for the Southern District of Texas holding that (i) ASARCO LLC properly exercised its reasonable business judgment by entering into the new collective bargaining agreement with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, and (ii) the New CBA does not constitute a sub rosa plan of reorganization. In January 2007, the United Steelworkers and a coalition of other unions reached a tentative agreement with ASARCO on a new contract covering 1,600 hourly workers. Union members had continued working for over a year without a contract and struck ASARCO for 19 weeks in 2005. With copper prices at record highs, union members agreed to a one-year contract with a wage-freeze to gain assurances that if one or more of the company's operations were sold, the buyers would retain the employees and bargain new labor agreements. The agreement includes: -- a single agreement covering five locations and the coalition of unions, expiring on June 30, 2010; -- strong successorship protections in the event of a sale of the company; -- substantial union influence over any plan of reorganization of the company; -- restrictions on the company's ability to outsource work; -- a requirement that the company remain neutral in future union organizing campaigns and will grant recognition on the basis of a card-check; -- at least one and most likely two union-nominated members on the company's board of directors, upon its emergence from bankruptcy; -- commitments that the company will invest in the business and that no money can be taken out of the company unless strict standards are met; -- $3,000 ratification bonus; -- $1.00 per hour wage increase, retroactive to January 1, 2007; -- $1.00 per hour wage increases, effective September 30, 2008, and 2009; -- quarterly bonuses tied to the price of copper; -- a 20% increase in the pension formula; -- no increase in active health care or drug contributions; -- a new SUB Plan and insurance continuation for employees who are laid off; -- improvement in other benefit plans; and -- restoration of most of the health care benefits for previous retirees whose benefits were cut unilaterally by ASARCO in August 2003, and a sizeable reduction in monthly contributions. Approximately 1,600 employees are covered by the agreement at five locations in Arizona and Texas. Contracts covering approximately 800 hourly employees originally expired on July 1, 2004, between ASARCO and unions at the company's facilities in Amarillo, Texas; Hayden, Arizona; Sahuarita, Arizona, (Mission mine) and Marana, Arizona, (Silver Bell mine). The labor agreement between ASARCO and unions covering approximately 800 hourly employees at the company's Ray Copper mine originally expired on July 1, 2005. The unions representing workers at ASARCO included the United Steelworkers, International Brotherhood of Electrical Workers, Machinists, Boilermakers, Teamsters, Operating Engineers, Millwrights and Pipefitters. 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 Void Air Permits on Closure of El Paso Plant ----------------------------------------------------------------- In a letter to the Texas Commission on Environmental Quality, Thomas L. Aldrich, ASARCO LLC's vice president of environmental affairs, asks the TCEQ Air Permits Division to void four of ASARCO's air permits and pending applications: (1) Air Quality Permit No. 20345; (2) Air Quality Permit No. 4151; (3) Pending Application to Renew Air Quality Permit No. 4151; and (4) Pending Application for Federal Operating Permit No. 2871. "For the immediate future, Asarco will continue to maintain personnel on-site to oversee remediation and plant closure activities. Asarco has been communicating regularly with TCEQ's Remediation Division about on-site remediation efforts, and the Company will continue to do so," Mr. Aldrich wrote. ASARCO released a statement on February 3, 2009, informing the Texas Commission on Environmental Quality that it does not intend to reopen its El Paso, Texas Copper Plant. ASARCO noted that the decision is based on the dramatic downturn of the world economy in the last six months. TCEQ Says $52-Mil. Cleanup Budget is Sufficient Ramon Bracamontes of the El Paso Times reports that TCEQ is confident that the $52 million budget is sufficient to address clean-up efforts on the site in light of current site conditions and waste characterization. Sen. Shapleigh and other concern citizens of El Paso, however, said that the budget may not be enough. If ASARCO does not put aside enough money, taxpayers would end up paying to clean up the Debtor's mess, Sen. Shapleigh was quoted by the El Paso Times. Sen. Shapleigh also said that he would continue to fight to obtain documents from TCEQ over its dealings with ASARCO. Texans Celebrate ASARCO Plant Closure The office of Texas Senator Eliot Shapleigh, together with various El Paso civic organizations, celebrated their success in opposing the reopening of ASARCO LLC's El Paso, Texas Cooper Plant last February 21, 2009. The event was dubbed "A Day in the Sun: Adios Asarco, Hello Future," held at the University of Texas at El Paso campus. Students for Reform, Get the Lead Out Coalition and neighborhood associations, along with Sen. Shapleigh's, among others hosted the event. "Now, we can move to a new era of better jobs, clean skies and healthier neighborhoods. Winning this battle with ASARCO is as important to our future as creating the medical school. Since the 1880's, ASARCO has defined our past -- now our talent and aspirations will define our future," Sen. Shapleigh wrote on his Web site. According to the El Paso Times, during the celebration, students gave presentations on proposed uses for ASARCO LLC's property, including using the property for a stadium, creating a large inner-city park space, building a renewable energy plant at the land, and creating a research park for the UTEP campus. "Our future is going to be decided on what we do with this site," Sen. Shapleigh is quoted by El Paso Times. "We didn't come this far to be left with a permanently polluted site that has no uses," he added. 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) AUTOBACS STORES: To Conduct Own GOB Sales for 12 Stores ------------------------------------------------------- Bill Rochelle of Bloomberg reports that Strauss Discount Auto is closing 12 of its 86 stores. According to his report, rather than hire a liquidator, the company, formally named Autobacs Strauss Inc., decided to run its own going-out-of-business sales to conclude by May 31. Headquartered in South River, New Jersey, Autobacs Strauss Inc. -- http://www.straussauto.com/-- sells after-market automotive parts and accessories, and operate automotive service centers located in New York, New Jersey, Philadelphia, Bethlehem and Pennsylvania. The Debtor operate 86 retail store locations and has about 1,450 employees. The Debtor filed for Chapter 11 protection on Feb. 4, 2009, (Bankr. D. Del. Case No.: 09-10358). Edward J. Kosmowski, Esq. at Young Conaway Stargatt & Taylor, LLP represents the Debtor in its restructuring efforts. As of Jan. 3, 2009, the Debtor had total assets of $75,000,000 and total debts of $72,000,000. BANK OF AMERICA: Merrill Lynch Discovers Irregularity in Trading ---------------------------------------------------------------- Marietta Cauchi at The Wall Street Journal reports that Merrill Lynch said on Friday that it had informed regulators that it found an irregularity during a recent review of its trading positions. The New York Times relates that risk officers discovered three weeks ago that a London currency trader who had recorded a trading profit of $120 million for the fourth quarter may instead have lost a large amount. The Financial Times relates that Merrill Lynch has suspended the currency trader after he ran up suspected losses of more than $400 million and trades on Norwegian and Swedish currencies went wrong. According to Luke Baker at Reuters, the losses will cause more financial headaches for Bank of America. Merrill Lynch said in a statement, "Senior managers of the business are focused on the issue and believe the risks surrounding possible losses are under control." The New York Times notes that Bank of America was probing whether Merrill Lynch had delayed booking trading losses until hefty bonuses were approved and the buyout deal was sealed. WSJ relates that unexpected losses at Merrill Lynch have hurt Bank of America's share price and spurred calls for the resignation of CEO Kenneth Lewis. Reuters relates that Irish regulators said that they were investigating the "mispricing of trades" at Merrill Lynch's London branch. The regulators, says the report, heard of the issue in February. The report states that Ireland's regulator said it was liaising with the financial authorities in Britain and the U.S. Merrill Lynch, WSJ states, said that it was working with authorities to investigate the issue. About Bank of America Bank of America is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk- management products and services. The company provides unmatched convenience in the United States, serving more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, nearly 18,700 ATMs and award-winning online banking with nearly 29 million active users. Following the acquisition of Merrill Lynch on January 1, 2009, Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to more than 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients in more than 40 countries. Bank of America Corporation stock is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange. The bank needed the government's financial help in completing its acquisition of Merrill Lynch. Merrill Lynch & Co. Inc. -- http://www.ml.com/-- is a wealth management, capital markets and advisory companies with offices in 40 countries and territories. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. Merrill Lynch owns approximately half of BlackRock, one of the world's largest publicly traded investment management companies with more than $1 trillion in assets under management. Merrill Lynch's operations are organized into two business segments: Global Markets and Investment Banking (GMI) and Global Wealth Management (GWM). BANK OF AMERICA: Andrew Cuomo Wants Bonus Recipients Disclosure --------------------------------------------------------------- Chad Bray at The Wall Street Journal reports that the New York Attorney General Andrew Cuomo and U.S. House Financial Services Committee Chairperson Barney Frank have demanded that Bank of America Corp. immediately submit information on individuals who received bonuses of $1 million or more at Merrill Lynch & Co. last year. WSJ notes that Mr. Cuomo's office is investigating disclosures related to the timing and nature of more than $3.6 billion in bonus payments made before BofA's merger with Merrill Lynch closed in 2008. WSJ states that Messrs. Cuomo and Frank said in a letter to BofA CEO Kenneth Lewis that the bank distributed a pool of more than $3.3 billion in bonuses. Mr. Cuomo's office, according to WSJ, has subpoenaed BofA for a list of individuals who received bonuses and the amount of those awards. WSJ relates that BofA has asked a judge in New York to restrict Mr. Cuomo in disclosing details about who received bonuses at Merrill Lynch and the testimony given by former Merrill Lynch CEO John A. Thain. Citing BofA, WSJ says that publicly releasing details about who received bonuses and how much the awards were would cause the bank harm and put it at a competitive disadvantage. BofA, WSJ reports, has previously said it has offered to provide the bonus data if Mr. Cuomo's office would agree to a confidentiality agreement. WSJ relates that Mr. Cuomo's office has declined to do so. WSJ quoted Messrs. Cuomo and Frank as saying, "We believe that as a matter of transparency and disclosure, taxpayers have a right to know where their tax dollars go once received by TARP recipients. Accordingly, all TARP recipient institutions should disclose individualized executive bonus information to taxpayers." According to WSJ, BofA has received $45 billion from the government program, including $10 billion that Merrill Lynch was slated to receive if the merger had failed. "The March 9 letter is far broader, and goes beyond Merrill Lynch to include all TARP recipients, including Bank of America. Bank of America has continued to offer to share Merrill Lynch bonus information with the New York Attorney General's office subject to a reasonable confidentially agreement," BofA said in a statement. About Bank of America Bank of America is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk- management products and services. The company provides unmatched convenience in the United States, serving more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, nearly 18,700 ATMs and award- winning online banking with nearly 29 million active users. Following the acquisition of Merrill Lynch on January 1, 2009, Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to more than 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients in more than 40 countries. Bank of America Corporation stock is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange. The bank needed the government's financial help in completing its acquisition of Merrill Lynch. Merrill Lynch & Co. Inc. -- http://www.ml.com/-- is a wealth management, capital markets and advisory companies with offices in 40 countries and territories. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. Merrill Lynch owns approximately half of BlackRock, one of the world's largest publicly traded investment management companies with more than $1 trillion in assets under management. Merrill Lynch's operations are organized into two business segments: Global Markets and Investment Banking (GMI) and Global Wealth Management (GWM). BEARINGPOINT INC: Taps Wiley Rein as Government Contracts Counsel ----------------------------------------------------------------- BearingPoint, Inc., and its affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Wiley Rein LLP as their special government contracts counsel. Wiley Rein will provide services related to: a) handling every aspect of government contracting, including prime contracts, sub-contracts, teaming agreements, alliance agreements, bid protests; existing and potential claims and disputes; terminations; false claims litigation; mergers and acquisitions; suspension and debarment matters; compliance programs, audits and reviews; internal and other investigations; "data rights" and intellectual property; cost accounting; general government contracts counseling; and employment issues uniquely affecting government contractors, and b) all other necessary legal services and advice, including, without limitation, preparation of all required fee applications and related filings. Alexander M. Laughlin, a partner at Wiley Rein, tells the Court that the firm's billing rates are: Partners $460 - $860 Counsel and Consultants $205 - $625 Associates $285 - $465 Legal Support Personnel $125 - $250 Mr. Laughlin adds that as of the petition date, the Debtors had $99,003 in outstanding fees owed to the firm, to which it applied a $75,000 security retainer paid on Feb. 12, 2009, and extended a $987 credit to the Debtors, leaving an unpaid prepetition amount of $23,0156. Mr. Laughlin assures the Court that Wiley Rein is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Laughlin can be reached at: Wiley Rein LLP 7925 Jones Branch Drive, Suite 6200 McLean, VA 22102 Tel: (703) 905-2800 Fax: (703) 905-2820 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. BEAZER HOMES: Projected Weak Cash Flow Cues Moody's Junk Rating --------------------------------------------------------------- Moody's Investors Service lowered all of the ratings of Beazer Homes USA, Inc., including the company's corporate family rating to Caa2 from B2 and senior unsecured notes to Caa2 from B3. The speculative grade liquidity assessment was affirmed at SGL-3, and the ratings outlook is negative. This concludes the review for downgrade process that was initiated on February 4, 2009. The downgrades reflect Moody's expectation that Beazer's cash flow performance will weaken considerably in 2009 and be followed by an even weaker 2010. The easy part of cash flow generation is now largely behind the company. With the forbidding homebuilding environment, i.e., reduced deliveries, shrunken backlogs, declining prices, and stubbornly high cancellations, the company will be hard pressed to shift its cash flow generation from harvesting the balance sheet to making operations more lean and efficient and edging toward profitability. The downgrades also consider that while the company's revenue run rate has deteriorated by over 80% since fiscal 2006 and net worth by even more, total homebuilding debt has inched down over this time period by only about 12%, thus driving fully adjusted debt leverage to close to 87%. Moody's anticipates that the thin net worth buffer of about $298 million will be further reduced by continuing impairment charges during the year and possibly challenge covenant compliance later this year or early next year. Moody's is also projecting that the company will continue generating operating losses well into 2010. Finally, there remains the lingering uncertainty over the extent of the company's ultimate exposure to the ongoing investigations of its mortgage origination business by the US Attorney's Office in the Western District of North Carolina and by various other federal and state agencies as well as to the unquantifiable potential charges for the myriad lawsuits that have been filed against the company pertaining to securities class actions, ERISA claims, and derivative shareholder actions. At the same time, the ratings are supported by the company's unrestricted cash position at December 31, 2008, of about $437 million, which has been subsequently augmented by an approximate $168 million income tax refund, and by the absence of any material near-term debt maturities. The negative outlook reflects the expectation of Moody's Corporate Finance Group that housing market conditions will worsen in 2009, the year 2009 will be one of greatly reduced deliveries (making it the fourth year in a row of sharply declining deliveries), the bottom is not yet visible, government actions will be helpful largely at the margin, liquidity will remain tight and lender behavior uncertain. Going forward, the ratings could be lowered further if the company were to engage in a distressed bond exchange and/or deplete its cash reserves either through sharper-than-expected operating losses or through a sizable investment or other transaction. 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 reduce debt leverage to a more manageable 60 - 70% target level. These rating actions were taken: -- Corporate family rating lowered to Caa2 from B2; -- Probability of default rating lowered to Caa2 from B2; -- Senior unsecured notes lowered to Caa2 (LGD4, 61%) from B3 (LGD4, 61%); -- Speculative grade liquidity assessment affirmed at SGL-3. All of Beazer's debt is guaranteed by its principal operating subsidiaries. Headquartered in Atlanta, Georgia, Beazer Homes USA, Inc. is one of the country's ten largest single-family homebuilders with operations in 17 states. Homebuilding revenues and consolidated net income for fiscal 2008 were approximately $2.1 billion and ($952) million, respectively. BELL BUSINESS: Case Summary & 33 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Bell Business Associates, L.L.C. 10500 E. Lost Canyon Dr. #8 Scottsdale, AZ 85255 Bankruptcy Case No.: 09-04003 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Scottsdale Auto Salon LLC 09-03998 Chapter 11 Petition Date: March 5, 2009 Court: District of Arizona (Phoenix) Judge: George B. Nielsen Jr. Debtor's Counsel: Warren J. Stapleton, Esq. wstapleton@omlaw.com Osborn Maledon PA 2929 N. Central Avenue, Suite 2100 Phoenix, AZ 85012 Tel: (602) 640-9354 Fax: (602) 640-2088 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million A. Bell Business' Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Legacy Bank Rent Receivable $12,000,000 15100 N. 78th Way, Ste 101 from Scottsdale Scottsdale, AZ 85260 Auto Salon LLC; Secured: $1,343,481 Legacy Bank Business $12,000,000 15100 N. 78th Way, Ste 101 equipment, Scottsdale, AZ 85260 fixtures, inventory, etc. at carwash facility; secured: $2,200,000 Legacy Bank Carwash facility $12,000,000 15100 N. 78th Way, Ste at 9393 E. Bell Scottsdale, AZ 85260 Road at Scottsdale, Arizona; Secured: $6,800,000 Interim Capital, LLC Business $2,000,000 50 Portland Pier, Suite 400 equipment, Portland, ME 04101 fixtures, inventory, etc. at carwash; Secured: $2,200,000; senior lien: $12,000,000 RTM Commercial Builders, Construction $275,000 Inc. contract Basic Metals Industries, LLC Carwash facility; $50,418 Secured: $6,800,000; senior lien: $12,000,000 Apache Pipelines, Inc. Carwash facility; $22,563 Secured: $6,800,000; senior lien: $12,054,514 Maricopa County Treasurer Real property $17,735 taxes. Harleysville Insurance Insurance $10,242 Company premiums due PO Box 410045 Salt Lake City, UT 84141-0045 O'Brien's Tile, LLC Carwash facility $4,096 P.O. Box 1417 P.O. at 9393 E. Bell Gilbert, AZ 85299 Road at Scottsdale, Arizona; Secured: 6,800,000; Senior lien: 12,050,418 Maricopa County Treasurer Personal property $3,467 taxes Abalos and Associates, PLLC Accounting $3,300 C. Arnold Curry Loans $521 Cara J. Curry Loans $140 B. A full-text copy of Scottsdale Auto's list of 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/azb09-03998.pdf The petition was signed by C. Arnold Curry, manager. BELO CORPORATION: S&P Gives Negative Outlook; Affirms BB- Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Dallas, Texas-based Belo Corp. to negative from stable. The 'BB-' corporate credit rating on the company was affirmed. At the same time, S&P revised the recovery rating on Belo's senior unsecured debt to '5', indicating S&P's expectation of modest (10% to 30%) recovery for debtholders in the event of a payment default, from '3'. The issue-level rating on this debt was lowered to 'B+' (one notch lower than the 'BB-' corporate credit rating on the company) from 'BB-', in accordance with Standard & Poor's notching criteria for a '5' recovery rating. The recovery rating revision and issue rating downgrade reflect the amendment of Belo's credit agreement, so that lenders now benefit from guarantees by Belo's material domestic subsidiaries, thereby subordinating the company's bonds, which are not guaranteed. "The negative corporate credit rating outlook reflects our concern that despite the relaxation of financial covenants in the amended credit agreement, Belo's revenue and EBITDA could deteriorate over the next several quarters so that the cushion of compliance could become very thin, necessitating another amendment or waiver," said Standard & Poor's credit analyst Deborah Kinzer. "Our expectation of a sharp decline in local and national ad revenue in 2009, particularly in the absence of significant political ad revenue, would result in an even more precipitous drop in EBITDA." Despite Belo's efforts to pay down debt, S&P is concerned that headroom under its new leverage covenant could evaporate. The company's unadjusted debt to EBITDA was 4.3x as of Dec. 31, 2008. Maximum leverage under its amended credit agreement is 6.25x through the second quarter of 2010, then tightening to 5.75x in the third quarter and to 5.00x by year-end 2010. As of Dec. 31, 2008, Belo had about $1.1 billion of debt outstanding. High margins in broadcasting result in dramatic declines in EBITDA during business downturns, and correspondingly rapid increases in leverage, even with respectable efforts to reduce debt. The rating reflects Belo's high financial leverage from the retention of all outstanding indebtedness after the Feb. 8, 2008 spinoff of its newspaper business, the vulnerability of TV broadcasting's revenues to economic cycles, earnings volatility between election and non-election years, and competition from alternative media. The company's strong station portfolio, diversification among network affiliations, good cash flow, and high EBITDA margins relative to peers partially offset these factors. BERNARD L. MADOFF: Ariel Asks Court to Lift Restraining Order ------------------------------------------------------------- Zachery Kouwe at The New York Times reports that lawyers for J. Ezra Merkin have asked the Hon. Richard Lowe of the New York State Supreme Court to modify a temporary restraining order restricting Ariel Fund Ltd., from recouping losses it suffered from its investment with Bernard L. Madoff Investment Securities LLC. According to NY Times, the lawyers for Ariel Fund at Schulte, Roth & Zabel requested for a court hearing to lift or modify the restraining order because they were unable to work out a compromise with New York University. The NY Times relates that the university has filed a lawsuit against Ariel Fund for investing with Mr. Madoff. Chad Bray at The Wall Street Journal reports the university is seeking the appointment of a receiver for Ariel Fund and that any improper payments to Mr. Merkin be returned and his deferred compensation not be paid. NY Times quoted Mr. Merkin's lawyers as saying, "Simply stated, there is no legal or factual basis for this Court or Plaintiff to interfere with the operations of the Fund -- which, as noted, has not been adjudicated liable for anything, and, indeed, is not even alleged to be liable." NY Times states that Judge Lowe extended the restraining order in February, barring Mr. Merkin from selling any of the $700 million in assets remaining in Ariel Fund and other funds controlled by his firm, Gabriel Capital. The restraining order, says the report, was originally put in place on December 24, 2008. Since then, Mr. Merkin hadn't been able to pay expenses including rent, telephone bills, year-end bonuses, and health insurance premiums for his workers, the report state. According to the report, Judge Lowe then amended the restraining order in January 2009 to allow Ariel Fund to pay some of its bills. WSJ states that Howard Schiffman, the attorney for Ariel Fund, has described the company as being "hamstrung" by the order, as it places "severe restrictions" on the fund's ability to operate and the university has been unwilling to agree to a modification in the order. NY Times relates that Mr. Merkin's lawyers said that the restraining order is preventing Ariel Fund from paying its lawyers to file claims with the Securities Investor Protection Corporation, which is liquidating Bernard L. Madoff Investment. NY Times, citing the lawyers, states that the restraining order also stops Ariel Fund from paying advisers to help liquidate the remaining non-Madoff assets in the fund. The lawyers also complained that Ariel Fund couldn't pay legal counsel to help it cooperate with continuing investigations into the Madoff fraud because of the order, the report states. Mr. Merkin said he will wind down the fund, WSJ reports. About Ariel Fund Ariel Fund Ltd. is a hedge fund founded and controlled by J. Ezra Merkin. 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. BERRY PETROLEUM: S&P Retains Negative Watch on 'BB-' Corp. Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings, including its 'BB-' corporate credit rating, on exploration and production company Berry Petroleum Co. remain on CreditWatch with negative implications where they were placed on Dec. 29, 2008. However, S&P notes several recent positive developments. "On Feb. 19, 2009, Berry received amendments on its revolving credit facility that ease its financial covenants. Given the weaker than expected EBITDA generation in 2009, due to weak commodity prices and concerns regarding Berry's cash flow generation, Berry would have had limited cushion under its debt to EBITDA covenant", said Standard & Poor's credit analyst Aniki Saha-Yannopoulos. Berry has resumed its production that was shut-in and also received amendments from its lenders that include relaxing the minimum total funded debt to EBITDAX (EBITDA plus exploration costs) ratio. Subsequently, on March 3, 2009, Berry announced that it has entered into an agreement to sell its assets in the Denver-Julesberg basin for $154 million. Berry has resumed its production and has started selling its oil on short-term contracts. Differentials for the California crude had narrowed to $8 currently from the $14 area in year-end 2008, thus improving cash flow. Currently Big West owes Berry almost $38.5 million in pre-petition claims for previous production. Berry has written off this receivable. However, Berry has parent guarantees from Big West Oil LLC and Flying J Inc up to $75 million each. BROWN SHOE: S&P Downgrades Corporate Credit Rating to 'B' --------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its corporate credit rating on St. Louis-based Brown Shoe Co. Inc. to 'B' from 'BB-'. At the same time, S&P lowered the issue-level rating on the company's senior unsecured notes to 'B-' from 'B+'. S&P removed all ratings from CreditWatch, where they were placed with negative implications on Feb. 25, 2009. The outlook is negative. "The downgrade reflects weaker-than-expected performance, significant deterioration of credit protection metrics, and expectations for ongoing challenges given the difficult retail environment," said Standard & Poor's credit analyst David Kuntz. BUDGET WASTE: To Seek Creditor Protection Under CCAA ---------------------------------------------------- BWI Holdings, Inc., on Wednesday said Budget Waste Alberta, Ltd., its wholly owned subsidiary in Canada, is suffering the same types of financial issues as so many other businesses, including shortage of affordable credit from banks and slow or failed payment from customers as a consequence of the global financial crisis. To insure that the assets and business of Budget Waste are properly protected for our shareholders, the BWI Holdings board of directors has elected to seek protection for Budget Alberta from creditors under the Companies Creditors' Agreement Act in Canada to reorganize the business. BWI Holdings, the public parent company in the U.S., is not part of the CCAA proceedings. BWI Holdings said Budget Alberta has sufficient cash on hand to fund ongoing operations, and its business will continue without interruption. This decision to file for creditor protection is being implemented by Budget Alberta because of the extremely high interest rates Budget Alberta has been paying on equipment leases that have been in place for some time and Budget Alberta's challenge with attempting to secure refinancing of these leases with bank debt or other financings at current market rates in an environment where lenders are not lending. Under CEO Jim Can, the company embarked on an ambitious turnaround in 2008 that involved cutting costs, eliminating expenses, reducing payroll, and focusing on key markets, all of which allowed Budget Alberta to begin operating on a positive cash flow basis. However, as the global recession deepened, Budget Alberta's customers began delaying payments, some have gone out of business altogether without paying Budget, and the downturn in housing construction and oil & gas projects, typical market strongholds for Budget Alberta, all have led to a severe tightening of cash. "Budget Waste, Inc. must secure sound financial footing," said Jim Can, CEO. "This step to give us protection from claims of creditors and to allow Budget Alberta to restructure its debt is imperative so that Budget Waste can build on its core strengths and be focused and financially sound in the coming months and years." About BWI Holdings BWI Holdings, Inc. -- http://www.budgetwaste.com/-- is holding company with its primary subsidiary, a waste solutions company located in Western Canada, that provides complete waste and recycling services to commercial, industrial, construction, homebuilding, oilfield and residential clients. With its broad range of innovative services, Budget offers its customers more value than other companies and competitive rates. BUFFETS HOLDING: Existing Lenders to Participate in Exit Financing ------------------------------------------------------------------ Buffets Holdings Inc., and its affiliates will seek approval of revised solicitation materials in connection with its Chapter 11 plan. The hearing is slated for March 11. On December 16, 2008, Buffets obtained approval of the explanatory disclosure statement to its first amended Chapter 11 plan and sent solicitation packages to creditors. Holders of impaired claims voted overwhelmingly in favor of the first amended plan. The confirmation hearing on the Plan was scheduled for February 3, however, as of that date, Buffets was unable to finalize its exit financing commitments. On February 20, Buffets filed a second amended plan and disclosure statement that is aimed to solve its problems with its exit financing. The latest version of the Plan gives secured creditors the ability to participate in a new exit loan facility. Faced with significant challenges in obtaining exit financing, the Debtors entered into an engagement letter with Credit Suisse Securities (USA) LLC for purposes of engaging Credit Suisse to act as sole lead arranger, sole bookrunner, sole administrative agent and sole collateral agent for a senior secured exit credit facility providing gross cash proceeds in an aggregate amount of at least $120,000,000. Given the current state of credit markets, the Debtors, in consultation with their advisors, determined that it would be difficult to obtain third-party commitments for Exit Facilities sufficient to adequately fund the operations of the Reorganized Debtors and make required Plan payments on the Effective Date, without participation from at least some of the Debtors' existing lenders. Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware on March 4 authorized Buffets to (i) enter into an engagement letter with Credit Suisse, for purposes of engaging Credit Suisse to act as sole lead arranger, sole bookrunner, sole administrative agent and sole collateral agent for the Exit Facility; and (ii) use estate funds to pay Credit Suisse a non-refundable $1 million structuring fee, which is creditable against fees payable to Credit Suisse in the event of a successful closing of the Facility, and reasonable out-of-pocket expenses. Revised Plan & Disclosure Statement The Second Amended Plan no longer provides for the Class 2 Rollover Facility Claims to be automatically satisfied by a new Second Lien Exit Facility. Rather, the Second Amended Plan now contemplates that holders of Rollover Facility Claims will receive shares ofNew BRHI Common Stock with an anticipated value equal to the value of their Allowed Rollover Facility Claims. Alternatively, the Second Amended Plan gives holders of Rollover Facility Claims the option to receive a replacement debt obligation as part of the Second Lien Exit Facility in either full or partial satisfaction of their Allowed Rollover Facility Claims, but only if such holders of Rollover Facility Claims commit to participate in the funding of the First Lien Exit Facility in an amount equal to or greater than 20% of their Allowed Rollover Facility Claims. In addition, the Second Amended Plan establishes a new class of claims -- the Class 3B PF Letter of Credit Facility Claims -- to further clarify the treatment for the holders of such claims. Because the Second Amended Plan provides for potentially a greater number of Claims to be satisfied through the receipt of shares of the New BRHI Common Stock, the structure of the Second Amended Plan will in all likelihood change the percentages of ownership of shares of New BRHI Common Stock to be received by holders of Pre- Petition Secured Credit Facility Claims in Class 3A, Senior Note Claims in Class 5, and General Unsecured Claims in Class 6. However, to the extent that holders of Class 2 Rollover Facility Claims will receive shares of New BRHI Common Stock under the Second Amended Plan, rather than replacement debt obligations pursuant to the Second Lien Exit Facility, the Reorganized Debtors will have a proportionately smaller debt load on the Effective Date than was contemplated in the First Amended Plan and a proportionately higher total equity value. Accordingly, the Approximate Recovery to holders of Claims in the Technically Modified Classes will remain the same, and holders of Claims in the Technically Modified Classes will not be negatively impacted by the modifications set forth in the Second Amended Plan. The value per share of New BRHI Common Stock will remain the same because each dollar of Rollover Facility Claims that is satisfied by additional shares of New BRHI Common Stock will result in a corresponding decrease in the amount of outstanding debt. The Debtors will seek approval of the Revised Disclosure Statement on March 11. The Revised Disclosure Statement is substantially similar to the Initial Disclosure Statement, other than with respect to matters relating to the treatment of the Affected Classes and the conforming changes to the description of treatment of claims in the Technically Modified Classes. A copy of the Revised Disclosure Statement is available at: April 30 Confirmation Hearing Buffets' Secured Super-Priority Debtor in Possession Credit Agreement dated as of January 22, 2009, matures April 30, 2009, and may be extended with the consent of lenders May 31, 2009. To maximize the value of the estates and successfully reorganize the Debtors' business under the time frames dictated by the DIP Credit Agreement, it is critical that the Debtors press forward with a fast-paced confirmation process. Accordingly, the Debtors propose this confirmation timeline: -- December 16, 2008: Voting Record Date for Affected Classes; -- March 14, 2009: Deadline to mail Revised Solicitation Packages; -- April 10, 2009: Deadline for holders of Claims in Affected Classes to object to confirmation of the Second Amended Plan; -- April 10, 2009: Extended Voting Deadline for holders of Claims in Affected Classes; and -- April 17, 2009: Hearing to confirm the Second Amended Plan. Sean T. Greecher, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington Delaware, relates this timeline is critical to the success of the Debtors' Second Amended Plan, which is supported by representatives of each of the Affected Classes, including the Administrative Agent for the Debtors' pre-petition lenders, as well as the Committee. "Indeed, a prompt progression to confirmation of the Second Amended Plan is necessary to meet the deadlines set forth in the DIP Credit Agreement and is key to attracting necessary exit financing commitments." Judge Walrath has extended Buffets' exclusive period to solicit acceptances of its Chapter 11 plan until April 30. About Buffets Holdings Headquartered in Eagan, Minnesota, Buffets Holdings Inc. -- http://www.buffet.com/-- is the parent company of Buffets, Inc., which operates 626 restaurants in 39 states, comprised of 615 steak-buffet restaurants and eleven Tahoe Joe's Famous Steakhouse restaurants, and franchises sixteen steak-buffet restaurants in six states. The restaurants are principally operated under the Old Country Buffet, HomeTown Buffet, Ryan's and Fire Mountain brands. Buffets, Inc. employs approximately 37,000 team members and serves approximately 200 million customers annually. The company and all of its subsidiaries filed Chapter 11 protection on Jan. 22, 2008 (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). Joseph M. Barry, Esq., M. Blake Cleary, Esq., and Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as claims and balloting agent. The U.S Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. The Committee selected Otterbourg Steindler Houston & Rosen PC and Pachulski Stang Ziehl Young & Jones as counsels. The Debtors' balance sheet as of Sept. 19, 2007, showed total assets of $963,538,000 and total liabilities of $1,156,262,000. As reported in the Troubled Company Reporter on Feb. 26, 2008, the Court granted on February 22, 2008, final approval of the Debtors' debtor-in-possession credit facility, consisting of $85 million of new funding and $200 million carried over from the company's prepetition credit facility. Bankruptcy Creditors' Service, Inc., publishes Buffets Holdings Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Buffets Holdings Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CANADIAN SUPERIOR: Gets CCAA Protection Until March 25 ------------------------------------------------------ Canadian Superior Energy Inc. on Friday said its application to the Court of Queen's Bench of Alberta for an Order under the Companies' Creditors Arrangement Act (Canada) was successful, allowing the Company to prepare a plan of arrangement for its creditors, and staying all claims and actions against the Company and its assets. The Order was made under section 11 of the CCAA and it is in effect until March 25, 2009, at which time the matter will be reviewed by the court. While the Order is in effect the Company will work with a court- appointed Monitor and it will continue to implement a plan of arrangement for its creditors, which includes the initiative to sell an undivided 25% or larger interest in its "Intrepid" Block 5(c) in Trinidad and Tobago. Scotia Waterous has been retained as the Company's advisor for the sale and the marketing process is well underway. The Company has said there's a high level of interest in this asset expressed by several of the most prominent oil and gas companies in the world. A successful sale of the Trinidad asset should allow the Company to re-structure in an organized manner and reemerge from CCAA in due course. Calgary, Alberta-based Canadian Superior Energy Inc. -- http://www.cansup.com-- is a diversified global energy company engaged in the exploration and production of oil and natural gas, and liquefied natural gas projects, with operations offshore Trinidad and Tobago, offshore Nova Scotia, Canada, in Western Canada, in the United States and in North Africa. Canadian Superior has approximately 20,000 shareholders worldwide, including some of the top institutional shareholders in North America. CAPMARK FINANCIAL: S&P Puts Servicer Rankings 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 Capmark Services 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. commercial 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. CASH TECHNOLOGIES: Receives Delisting Notice From NYSE ------------------------------------------------------ Cash Technologies, Inc., received on February 25, 2009, a letter from NYSE Alternext US notifying the Company that the Exchange intends to file a delisting application with the SEC due to the Company's failure to meet certain continued listing requirements of the Exchange. The letter acknowledges that the Company has met 5 of the 6 listing criteria cited by the Exchange in its letter dated November 1, 2007, including the requirement to maintain $6,000,000 in shareholders' equity, but states that in the opinion of the Exchange the Company continues to be "financially impaired," a violation of Section 1003(a)(iv) of the Company Guide. The letter also cited violations of certain other listing criteria, including Company Guide Sections 704, 1003(d) and 132(e), which refer to the failure to hold an annual meeting in 2008 and provide certain information, Section 1003(f)(v), which is the failure to effect a reverse split of the Company's stock and Section 1002(b), which is the Exchange's opinion that the Company's reduced market cap makes "further dealings on the Exchange inadvisable." The Company believes that it has met the objective financial criteria of the Exchange and that the cited financial violations are subjective and fail to adequately consider the Company's significant recent improvements in revenues and shareholders' equity. Nevertheless, the Company has decided that it will not appeal the decision and intends to trade on the OTC Bulletin Board market for several reasons: (a) The Company has annually incurred a six-figure expense from Exchange listing fees, additional listing application fees, legal, accounting and transaction structuring expenses which it will not have to incur on the OTCBB; (b) Management believes that the Company's stock price will be determined by investors based primarily on financial performance without regard to its listing on any exchange and that the Company's uncertain listing status has itself contributed to the Company's low stock price; (c) Management believes that given the Company's expected growth over the next year, the drastic reverse split demanded by the Exchange is not in the best interest of the Company's shareholders. The Company will trade on the Exchange until March 12, 2009, following which trading is expected to resume on the OTCBB subject to the completion of the necessary administrative procedures. Bruce Korman, CEO of Cash Technologies, stated, "The delisting notice prompted a decision that we had been considering for many months based on the relative benefits and costs of being listed on NYSE Alternext US, formerly the Amex. We've determined that as a Bulletin Board company our resources can be better utilized, growing our operations and completing pending transactions that are expected to produce significant profitability. When it is appropriate, we will consider applying for listing on the NASDAQ Capital Market. In the meantime we are confident that our investors' interests will be well served on the OTC Bulletin Board." About Cash Technologies Headquartered in Los Angeles, Cash Technologies, Inc. (NYSE Alternext US: TQ) -- http://www.cashtechnologies.com/-- develops and markets innovative data processing solutions in the healthcare and financial services industries. Going Concern Doubt Vasquez & Company LLP expressed substantial doubt about Cash Technologies Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended May 31, 2007. The auditing firm noted that the company has suffered significant recurring losses and is in immediate need of substantial working capital to continue its business and operations. CDX GAS: Wants Interim Nod to Use Cash Collateral Until March 27 ---------------------------------------------------------------- CDX Gas, LLC, et al., ask the U.S. Bankruptcy Court for the Southern District of Texas for authority, on an interim basis, to use cash collateral of lenders backed by first and second priority liens on their assets. The Debtors want permission to use cash for a three-week period, from and after March 7, 2009, and through and including March 27, upon the Court's entry of an interim order. The Debtors also seek authority to use Cash Collateral, on a final basis, from and after March 27, through and including June 12. The Debtors tell the Court that they have an immediate need for the use of Cash Collateral to continue the operation of their businesses. The use of Cash Collateral will be in accordance with the terms of the First Final Order, and in the amounts proposed in the proposed Interim Budget. As reported in the Troubled Company Reporter on January 14, the Court granted final approval to the Debtors' use of the Secured Lenders' Cash Collateral until March 6, 2009. As in the First Final order, as adequate protection for the use of Collateral and/or Cash Collateral and any diminution in value of the Collateral: a) the First Lien Secured Parties are granted valid and perfected replacement security interests in all of the Debtors' personal and real property, which lien shall be a first and prior lien, subject only to valid and perfected liens existing as of the petition date and the Carve-out. b) The Firt Lien Secured Parties are also granted allowed superpriority administrative claims, junior only to the Carve-Out, allowed Chapter 7 administrative claims, and priority claims of the U.S. Trustee. c) The Second Lien Lenders are granted valid and perfected security interests in the Replacement Collateral, which lien shall be a second-priority lien, subject only to the replacement security interests granted to the First Lien Secured Parties and valid and perfected liens existing as of the petition date and the Carve-Out. d) The Second Lien Lenders are also granted, allowed superpriority administrative claims (junior in priority only to allowed Chapter 7 administrative claims, superpriority administrative claims granted to the First Lien Secured Parties, and priority claims of the U.S. Trustee). A full-text copy of the Debtor's proposed Cash Collateral Budget, is available at: http://bankrupt.com/misc/CDXGas.ProposedInterimBudget.pdf Based in Houston, Texas, CDX Gas LLC -- http://www.cdxgas.com/-- is an independent gas company that explores, develops, and produces onshore North American unconventional natural gas resources located in coal, shale, and tight gas sandstone formations. The Company and 19 of its affiliates filed for Chapter 11 protection on Dec. 12, 2008 (Bankr. S.D. Tex. Lead Case No. 08-37922). Harry Allen Perrin, Esq., John E. Mitchell, Esq., and Michaela Christine Crocker, Esq., at Vinson Elkins LLP, represent the Debtors in their restructuring efforts. In their schedules, the Debtors listed total assets of $996,308,606 and total debts of $831,259,526. CELLU TISSUE: S&P Puts 'B' Corp. Credit Rating on Negative Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it placed its ratings, including the 'B' corporate credit rating, on Alpharetta, Georgia-based Cellu Tissue Holdings Inc. on CreditWatch with negative implications. "The CreditWatch listing reflects our heightened concerns regarding Cellu Tissue's ability to refinance its $222 million senior secured notes due March 2010, particularly given tight credit market conditions and the company's highly leveraged financial profile", said Standard & Poor's credit analyst Andy Sookram. In addition, if Cellu Tissue is unable to refinance the notes by December 2009, borrowings under the company's revolving credit facility (otherwise due June 2011) accelerate and immediately become due. Still, the company was in compliance with covenants under its existing credit facility at Nov. 27, 2008 and S&P expects it to remain in compliance in the near term despite challenging economic conditions. In addition, liquidity is currently adequate, with about $28 million available on its $60 million borrowing-based revolving credit facility due June 2011. Leverage has improved, with debt to third-quarter (ended Nov. 27, 2008) run-rate EBITDA, which included a full period of earnings contribution from Atlantic Paper & Foil, of around 4.3x. S&P believes the company's credit measures will remain in line with S&P's expectations as lower input costs and acquisition related synergies help offset sale price pressures associated with the weak economic conditions. S&P understands from management that the company is already working on the refinancing with its investment bankers. S&P will meet with management shortly to discuss the details of its plans to refinance the $222 million senior notes before December 2009. CHANGING WORLD TECH: Files for Chapter 11 in New York ----------------------------------------------------- Changing World Technologies Inc. has filed for Chapter 11 before the U.S. Bankruptcy Court for the Southern District of New York, looking for more financing. The company was forced into bankruptcy after a botched initial public offering in February, and after design and construction problems with its demonstration plant in Missouri, according to Bloomberg's Bill Rochelle. Changing World Technologies CEO Brian S. Appel told the Securities and Exchange Commission on February 12 that "due to prevailing market conditions", it would no longer pursue an initial public offering for its shares. Bloomberg relates that the company owes $1 million to the law firm Weil Gotshal & Manges LLP on account of legal fees. The loan is secured by all the assets. Weil Gotshal is not the company's bankruptcy counsel. The report adds that the debt to Weil Gotshal is secured by all the assets. An additional $2 million is owing on secured promissory notes. The lenders agreed to allow the company to use cash representing collateral for the lenders' claims. Changing World Technologies Inc., developed a process for making diesel fuel and fertilizer from animal and food-processing waste. The company has a demonstration plant in Missouri with a capacity of producing as much as 9 million gallons of diesel fuel a year. As of Jan. 31, the company had assets of $30.4 million and liabilities of $8.2 million. CINRAM INTERNATIONAL: S&P Cuts Corporate Credit Rating to 'B' ------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its long-term corporate credit and senior secured debt ratings on Scarborough, Ontario-based Cinram International Inc. to 'B' from 'B+'. The outlook is negative. "The downgrade reflects our concerns about the reduced headroom and Cinram's ability to comply with the financial covenants in its credit facilities," said Standard & Poor's credit analyst Greg Pau. "We believe this situation is a result of EBITDA shrinkage, declining prospects in Cinram's core multimedia product replication and distribution business, and the difficulties the company faces in expanding into businesses with better growth prospects," Mr. Greg Pau added. In addition, S&P believes that the uncertainty in demand in the current economic recession and Cinram's need to refinance its maturing debt in May 2011 could add further challenges to the company's credit profile. These factors are partially offset, in S&P's view, by Cinram's strong market position as the world's largest manufacturer of prerecorded multimedia products and possible debt reduction through proceeds from asset disposal and working-capital improvements. Cinram's core business of multimedia product replication and distribution, which accounts for 75% of its 2008 revenue, is, in S&P's view, facing a fundamental decline because of the increasingly commodity-like nature of the product, competitive pressure from alternative distribution channels (such as pay-per- view TVs and Internet download technology), and frequent technology shifts. Standard & Poor's believes that these pressures have contributed to declining volume and lower selling prices for these products, both of which in turn have weakened Cinram's profitability and operating cash flow. In addition, S&P believes that the lack of product and customer diversities has limited Cinram's pricing power in this declining market despite the company's leading market position in the industry. S&P expects that these challenges could persist or even accelerate in the current economic recession because consumers' discretionary spending is generally more sensitive to economic conditions. The negative outlook reflects Standard & Poor's view of Cinram's challenges in complying with its covenants and in handling declining industry prospects, as well as the demand uncertainty in the current economic recession, and the refinancing risk the company faces in 2011. S&P could consider lowering its rating on Cinram if the company suffers a worse-than-expected decline in EBITDA in the next 12 months that could pose a renewed threat of covenant breach or if it becomes clear that Cinram is unable to refinance its debt as it nears maturity. Given the challenging business environment, S&P believes that revising the outlook to stable is unlikely in the coming year but could be possible if there is a material increase in covenant headroom or if the company reduces debt and refinances the debt that matures in 2011. CIRCUIT CITY: Seeks to Sell Trademarks, InterTAN to Bell Canada --------------------------------------------------------------- Circuit City Stores Inc. was scheduled to complete going-out-of- business sales for 567 stores early on March 8. It has, however, found a buyer for its Canadian stores. Circuit Stores Inc., and its affiliates seek approval from the U.S. Bankruptcy Court for the Eastern District of Virginia of the sale to Bell Canada unit 4458729 Canada Inc. of: (A) certain trade-marks and licensed trade-marks by debtor Circuit City Stores West Coast, Inc. and (B) the shares in Circuit City Global Sourcing Limited by debtor Ventoux International, Inc. (C) substantially all of the assets of InterTAN Canada Ltd. InterTAN Canada Ltd., which has sought bankruptcy protection in Canada under the Companies' Creditors Arrangement Act, have submitted a motion with the Ontario Superior Court of Justice, Commercial List, seeking approval of the sale transactions and related agreements. The transactions are memorialized in an asset purchase agreement by and among InterTAN, West Coast, and Ventoux, with, 4458729 Canada Inc. and Bell Canada. West Coast is a wholly-owned subsidiary of Circuit City and is the owner of certain trademarks which Canada Bell wishes to purchase (such as the name "The Source") and other trademarks which the Purchaser wishes to license (such as the right to use the name "Circuit City"). Ventoux is a wholly-owned subsidiary of Circuit City and is the owner of the shares of Circuit City Global Sourcing, Limited ("CCGS"), which sources private label products for InterTAN from offices in Asia, and which the Purchaser wishes to acquire. Asset Purchase Agreement In early 2008, Circuit City considered its strategic alternatives with respect to InterTAN Canada, and engaged Goldman, Sachs & Co. as its financial advisor to canvass the market with a view to pursuing a potential divestiture transaction. Although Goldman received significant expressions of interest from potential purchasers interested in an acquisition transaction concerning the business of InterTAN Canada as a stand-alone entity, no transaction was completed. Following their bankruptcy filing, InterTAN Canada and affiliate Tourmalet Corp. (referred in the CCAA proceedings as "applicants") engaged for assistance in conducting a going concern sale process. Rothschild contacted 87 prospective purchasers, both strategic and financial, located in Canada and the U.S., and sent 45 teaser documents to prospects. Four proposals were received from bidders by the January 23 extended deadline set by the Ontario Court. Circuit City and InterTAN Canada has determined that the Bell Canada Bid was the best overall bid received, both in terms of the proposed purchase price for the InterTAN Canada business and with respect to certainty of the Purchaser's ability to close the transaction. The salient terms of the Asset Purchase Agreement are: -- Canada Bell will make offers of employment to all of InterTAN's non-executive employees, assume all of the contracts of InterTAN's executive employees, and assume InterTAN's collective bargaining agreement. -- $15,000,000 of the purchase price will be deposited. -- The closing date is the later of June 30, 2009 and the date that is two business days after satisfaction of the closing conditions outlined in the APA. -- InterTAN will assign the Rogers Contract to Canada Bell. InterTAN currently sells products and services under an agreement with Rogers Wireless Inc. and Rogers Wireless Communications Inc. made as of June 21, 2001. The Rogers Contract will expire in accordance with its terms on December 31, 2009 if it is not terminated prior to that time by parties who may be entitled to do so. The consent of Rogers is required to assign the Rogers Contract to the Canada Bell. Intercompany Agreement In connection with the sale transaction, the U.S. Debtors and InterTAN Canada have agreed that, upon Closing, InterTAN Canada will make a payment of no more than US$15 million in the aggregate to West Coast and/or Ventoux, or as they may otherwise direct in writing, as consideration for Canada Bell's acquisition and/or license of U.S. assets. In addition, InterTAN Canada has agreed to make a loan out of the proceeds of the sale received from the Purchaser to Circuit City in an amount of up to CAD$35 million, on terms that are satisfactory to Circuit City, InterTAN Canada and the Monitor. The Loan would be subject to certain conditions precedent, including that such Loan be made pursuant to a loan agreement or promissory note, which agreement or promissory note must be approved by the U.S. Bankruptcy Court. About InterTAN Canada Ltd. Headquartered in Barrie, Ontario, InterTAN Canada -- a wholly owned subsidiary of Intertan Inc. -- is engaged in the business of selling consumer electronics in Canada under the trade name The Source By Circuit CitySM. InterTAN Canada's operations consist of approximately 750 retail stores and dealer outlets in Alberta, British Columbia, Manitoba, Newfoundland, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Quebec, Saskatchewan, and the Yukon. Additionally, InterTAN Canada maintains a Web site -- www.thesource.ca -- to sell consumer electronics and related products. Tourmalet Corp. is a Nova Scotia unlimited liability company that is an indirect, wholly-owned subsidiary of Circuit City. Tourmalet is a non-operating holding company whose sole asset is thepreferred stock of InterTAN, Inc., which is the sole shareholder of InterTAN. Circuit City is the Applicants' ultimate parent company. About Circuit City Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- is a specialty retailer of consumer electronics, home office products, entertainment software and related services. The company has two segments -- domestic and international. Circuit City Stores, Inc. (NYSE: CC) together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (E.D. Virg. Lead Case No. 08-35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of Aug. 31, 2008. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Circuit City Stores Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CIRCUIT CITY: Canada Creditors Could Recover 100%, Says Monitor --------------------------------------------------------------- Alvarez & Marsal Canada ULC, monitor of Circuit City Stores, Inc.'s Canadian-based subsidiaries in proceedings under the Companies' Creditors Arrangement Act, said it was engaged in discussions with Circuit City Stores, Inc., and its Canadian subsidiary InterTAN Canada Inc. in connection with their debtor- in-possession financing, and the proposed sale transaction. Circuit Stores Inc., have opted to liquidate their stores in the U.S. With respect to stores in Canada (which is owned an operated by InterTAN Canada), the parties have reached a deal to sell to Bell Canada: (A) certain trade-marks and licensed trade-marks by debtor Circuit City Stores West Coast, Inc. and (B) the shares in Circuit City Global Sourcing Limited by debtor Ventoux International, Inc. (C) substantially all of the assets of InterTAN Canada Ltd. To finance their bankruptcy cases, Circuit City Stores entered into a $1.1 billion postpetition financing facility. InterTAN was allowed by the Superior Court of Justice (Commercial List) to borrow $60 million from that facility. The U.S. Debtors have advised the U.S. Bankruptcy Court that they expect that they will generate sufficient net proceeds to fully pay their direct borrowings under the DIP Facility and to have cash in excess of 103% of the face amount of their outstanding letter of credit obligations on or before the week ending February 28, 2009. According to A&M, as of February 21, the full amount of the DIP Lenders' direct advances to the U.S. Debtors has been repaid and the U.S. Debtors hold cash of approximately US$215 million that is available to cash collateralize outstanding letters of credit totaling approximately US$83.7 million. Accordingly, it appears that the DIP Lenders will be paid in full in the Chapter 11 Proceedings, the Monitor says. A&M, however, notes that the U.S. Debtors have indicated that they have concerns that they may experience periods in which they need liquidity funding given that their access to future draws under the DIP Facility has been terminated. In its first report, the Monitor reported that management had estimated that the quantum of unsecured trade creditor claims that would be subject to the stay of proceedings contained in the Initial CCAA Stay Order (net of potential set-offs and excluding litigation claims and claims that InterTAN expected to pay while subject to these proceedings or to have assumed by a purchaser) totaled approximately $29.3 million. Currently InterTAN management's estimate is closer to approximately $31 million and this will be refined further as the Pre-Filing Claims Process unfolds. According to A&M, the Applicants' most recent cash flow projection that is filed with the Ontario Court estimated that the Applicants' liability under the DIP Facility will peak at approximately $32 million between this date and June 30, 2009. At this time, there are no known liabilities under the Directors' Charge contained in the Initial Order. With the U.S. Debtors having repaid the DIP Lenders in the Chapter 11, the Monitor says that that after satisfying the first four charges contained in, the Initial Order (including repayment of direct advances to InterTAN under the DIP Facility) and after payment of the U.S.$15 million payable to West Coast and Ventoux under the APA, it is expected that there will be significant remaining proceeds available to pay Canadian creditors on their claims. The Monitor notes that, in addition to the expected pre-filing claims, additional claims may arise under the Pre-Filing Claims Process. Although Canada Bell is assuming a number of liabilities under the APA (i.e. offers to all employees and no requirement to repudiate leases), which should significantly reduce the number of potential restructuring claims, there are a number of Excluded Liabilities which may result in additional claims in these CCAA Proceedings. The Monitor believes that, subject to the outcome of the Pre- Filing Claims Process and any process related to the adjudication of any restructuring claims which may arise in connection with the Sale Transaction, it appears likely at this time that the Applicants' unsecured creditors will be paid in full, following closing of the Sale Transaction. "To the extent that Canadian creditors are paid in full on their claims, any remaining proceeds will be distributed to InterTAN's shareholder on account of its equity." About Circuit City Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- is a specialty retailer of consumer electronics, home office products, entertainment software and related services. The company has two segments -- domestic and international. Circuit City Stores, Inc. (NYSE: CC) together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (E.D. Virg. Lead Case No. 08-35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of Aug. 31, 2008. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Circuit City Stores Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHALLENGER ENERGY: Receives Delisting Letter From NYSE Alternext ---------------------------------------------------------------- Challenger Energy Corp. on Monday said NYSE Alternext has issued a letter notifying Challenger of NYSE Alternext's intention to strike the common shares of Challenger from NYSE Alternext by filing a delisting application with the Securities and Exchange Commission. NYSE Alternext took this step in response to Challenger's announcement on February 27, 2009, that it had obtained an order for protection from creditors under the Companies' Creditors Arrangement Act (Canada), and cited Challenger's non-compliance with Sections 301 and 1003(a)(iv) of the NYSE Alternext US LLC Company Guide. On March 3, 2009, Challenger Energy said the NYSE has halted trading in its common shares and was reviewing a possible delisting. Challenger's shares continue to trade on the TSX Venture Exchange, where suspension and delisting is currently prevented by the CCAA Order. Calgary, Alberta, Canada-based Challenger Energy Corp. (CA:CHQ) -- http://www.challenger-energy.com/-- is an oil and gas exploration company focusing on exploration Block 5(c) offshore the Republic of Trinidad and Tobago. CIRCUIT CITY: One Liberty Records $5.2MM Charge on Rejected Leases ------------------------------------------------------------------ One Liberty Properties, Inc., recorded impairment charges of $5,231,000 against three of its former Circuit City properties during the fourth quarter of 2008. Circuit City, which had stores at five of One Liberty's properties, rejected two of its leases in December 2008 and the remaining three leases in March 2009. According to One Liberty, the national economic recession has taken its toll on the Company's tenants, particularly its retail tenants, and accordingly, on the Company. Last week, One Liberty reported that for the three months ended December 31, 2008, it had rental income of $10,954,000 and a net loss of $3,601,000 share. The principal reason for the loss is the recognition in the quarter of impairment charges against three properties aggregating $5,231,000. For the three months ended December 31, 2007, One Liberty had rental income of $9,346,000 and net income of $2,333,000. One Liberty reported rental income of $40,341,000 for the year ended December 31, 2008 as compared to $38,149,000 for the year ended December 31, 2007. One Liberty is a real estate investment trust and invests primarily in improved commercial real estate under long term net lease. About Circuit City Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- is a specialty retailer of consumer electronics, home office products, entertainment software and related services. The company has two segments -- domestic and international. Circuit City Stores, Inc. (NYSE: CC) together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (E.D. Virg. Lead Case No. 08-35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of Aug. 31, 2008. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Circuit City Stores Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) COLLINS & AIKMAN: S&P Puts B+ Neg. Watch on Debt-EBITDA Concerns ---------------------------------------------------------------- Standard & Poor's Ratings Services said it placed its ratings on Dalton, Georgia-based Collins & Aikman Floorcoverings Inc., including its 'B+' corporate credit rating, on CreditWatch with negative implications. The CreditWatch placement means that S&P could lower or affirm the ratings following the completion of S&P's review. As of Oct. 25, 2008, Collins & Aikman had about $256 million of total debt. "The CreditWatch listing reflects our concerns about the difficult operating environment that Collins & Aikman faces, and our expectation that credit measures will weaken over the near term," said Standard & Poor's credit analyst Rick Joy. "Although the company should start to see some benefits from lower input costs and expense controls, S&P believes Collins & Aikman still faces challenges from a weak economy and a significant deterioration in demand from corporate office customers," he continued. S&P is concerned that the company will be challenged to meaningfully improve credit protection measures in the near term, given S&P's expectation for continued softness in the U.S. commercial office industry and the overall weak economic environment. S&P estimates total debt to EBITDA has increased to about 4.9x for the 12 months ended Oct. 25, 2008. S&P believes that if sales decline by more than 10% and EBITDA margins declined by 100 basis points over the next year, leverage could increase to more than 6x. Standard & Poor's will meet with management to further discuss Collins & Aikman's operating trends and forecasts to resolve the CreditWatch listing. COTT CORP: Appoints Jerry Fowden to Board of Directors ------------------------------------------------------ The Board of Directors of Cott Corporation (NYSE: COT) (TSX: BCB), disclosed on March 4, 2009, changes to its Board of Directors. Jerry Fowden, Cott's recently appointed Chief Executive Officer, has been appointed to the Board of Directors, effective on March 2, 2009. In order to accommodate Mr. Fowden's appointment, Philip Livingston offered to step down from the Board, effective on March 2, 2009. Mr. Livingston has played a significant leadership role since his appointment to Cott's Board of Directors in 2003. A financial expert and former head of Financial Executives International, the leading membership association for chief financial officers, controllers and treasurers, Mr. Livingston served as head of Cott's Audit Committee for five years. He also served on Cott's Corporate Governance Committee. "The Board and I would like to offer our sincere appreciation to Phil for his service and contributions to the Board over the past five years," commented David Gibbons, Chairman of the Board of Directors. "Phil's financial expertise and management experience have been invaluable to the Board and to the committees on which he has served," continued Mr. Gibbons. About Cott Corporation Cott Corporation -- http://www.cott.com/-- is one of the world's largest non-alcoholic beverage companies and the world's largest retailer brand soft drink company. The Company commercializes its business in over 60 countries worldwide, with its principal markets being the United States, Canada, the United Kingdom and Mexico. Cott markets or supplies over 200 retailer and licensed brands, and Company-owned brands including Cott, RC, Vintage, Vess and So Clear. Its products include carbonated soft drinks, sparkling and flavored waters, energy drinks, sports drinks, juices, juice drinks and smoothies, ready-to-drink teas, and other non-carbonated beverages. * * * The Troubled Company Reporter reported on Feb. 3, 2009, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Mississauga, Ontario-based Cott Corp. to 'CCC+' from 'B-'. At the same time, S&P lowered the senior subordinated debt rating on wholly owned U.S. subsidiary Cott Beverages Inc. to 'CCC-' from 'CCC'. S&P also removed all ratings from CreditWatch with negative implications, where they were placed Feb. 26, 2008. The outlook is stable. The company's consolidating balance sheets as of September 27, 2008, showed total assets of $995.4 million, total liabilities of $682.3 million, minority interest of $18.2 million, and total shareholders' equity of $294.9 million. DE CORO LIMITED: Financial Woes Cue Chapter 15 Filing ----------------------------------------------------- James Wardell and Chan Wai Dune of CCIF Corporate Advisory Services Limited, the appointed provisional liquidators and foreign representatives of De Coro Limited, made a voluntary petition for De Coro under Chapter 15 before the United States Bankruptcy Court for the Middle District of North Carolina. The provisional liquidators are seeking for the entry of an order to recognize the company's Hong Kong proceedings pending before the High Court of the Hong Kong Special Administrative Region Court of First Instance Companies (Winding-Up) No. 03 of 2009 under the Hong Kong Companies Ordinance, Chapter 32 of the Laws of Hong Kong. In addition, the provisional liquidators commenced a Chapter 15 case to ensure that certain orders of the Hong Kong Court are enforced in the United States. Though the company was able to obtain as much as US$3,300,000 from the China Construction Bank in November 2008, it found itself out of available cash by December 2008 that result in its inability to pay wages to its 2,000 employees, according to Chrstine Myatt, Esq., at Nexsen Pruet PLLC. The company maintains an interest in these wholly owned subsidiaries: a) De Coro Sofa Industrial (Shenzhen) Co. Ltd., a company registered in the People's Republic of China with registered capital of US$25,000,000, which manufactures and sells sofas; b) De Coro Sofa Manufacturing (Shenzhen) Co. Ltd., a company registered in the PRC with registered capital of US$3,000,000, which manufactures and sells sofa legs; c) De Coro Sofa Furniture (Shenzhen) Co. Ltd., a company registered in the PRC with registered capital of US$1,300,000, which manufactures and sells sofas and related spare parts; d) De Coro Furniture (Huizhou) Co., Ltd., a company registered in the PRC with registered capital of US$10,000,000, which manufactures sofa related spare parts; e. De Coro USA Ltd., a company registered in the United States with registered capital of US$30,000, which carries on wholesale distribution of furniture in the United States; f) De Coro Europe, a company registered in France with registered capital of EUR7,700, which carries on wholesale distribution of furniture in Europe; and g) De Coro Italia S.R.L., a company registered in Italy with registered capital of EUR50,000, which was closed in December 2008. Headquartered in Fanling, Hong Kong, De Coro Limited engages principally in the production of leather upholstered furniture in China for export to international markets. The Debtor makes its products at its facility in the Longgang District of Shenzhen, China. The Debtor is a Hong Kong limited liability company incorporated on Dec. 11, 1996, under the Companies Ordinance (Cap. 32). DE CORO LIMITED: Voluntary Chapter 15 Case Summary -------------------------------------------------- Chapter 15 Petitioners: James Wardell and Chan Wai Dune Provisional Liquidators CCIF Corporate Advisory Services Limited Chapter 15 Debtor: De Coro Limited Room 416 Sun Ling Plaza 30 On Kui Street, On Luk Tsuen Fanling, Hong Kong China Chapter 15 Case No.: 09-10369 Type of Business: The Debtor engages principally in the production of leather upholstered furniture in China for export to international markets. The Debtor makes its products at its facility in the Longgang District of Shenzhen, China. The Debtor is a Hong Kong limited liability company incorporated on Dec. 11, 1996, under the Companies Ordinance (Cap. 32). Specifically, Debtor maintains an interest in the following wholly-owned subsidiaries: De Coro Sofa Industrial (Shenzhen) Co. Ltd.; De Coro Sofa Manufacturing (Shenzhen) Co. Ltd.; De Coro Sofa Furniture (Shenzhen) Co. Ltd.; De Coro Furniture (Huizhou) Co., Ltd.; De Coro USA Ltd.; De Coro Europe; De Coro Italia S.R.L. In addition, the Debtor's United States assets consist primarily of De Coro USA, which is incorporated in 1999. De Coro USA maintains is located at 1403 Eastchester Drive, Suite 104, High Point, North Carolina. Chapter 15 Petition Date: March 5, 2009 Court: Middle District of North Carolina (Greensboro) Judge: William L. Stocks Chapter 15 Petitioner's Counsel: Christine L. Myatt, Esq. cmyatt@npaklaw.com Nexsen Pruet, PLLC 701 Green Valley Rd., Suite 100 P.O. Box 3463 Greensboro, NC 27408 Tel: ((336) 373-1600 Estimated Assets: unstated Estimated Debts: unstated DELTA AIR LINES: Renames Airport Lounges as Delta Sky Clubs ----------------------------------------------------------- Delta Air Lines has changed the name for its more than 50 airport lounges worldwide as part of the merger with Northwest Airlines Corp. The new moniker, Delta Sky Club(TM), will replace the current Delta Crown Room Club and Northwest Airlines WorldClubs names. New Delta Sky Club signage will begin appearing in airports in early April and is expected to be completed by the end of 2009. "Creating the largest global lounge network under the Delta Sky Club brand is the first in a series of lounge changes designed to provide our customers with one consistent, world-class lounge experience," said Ranjan Goswami, Delta's director of Customer Experience. Throughout 2009, the lounges will continue to offer existing amenities, including complimentary beverages and snacks, personalized flight assistance, satellite TV, Wi-Fi access and other connectivity options. By early 2010, Delta plans to harmonize all Delta Sky Club offerings to provide customers with one consistent service and product experience, adopting customer favorites from both lounge programs. Crown Room Club and WorldClubs members may continue to use their current credentials and One-Day passes until the end of 2009, when the conversion of all Delta Sky Club locations will be complete. The introduction of Delta Sky Club is part of the airline's integration of Delta and Northwest operations worldwide following last year's merger. Other upcoming merger milestones include outfitting all pre-merger Northwest flight attendants, airport customer service agents and Delta Sky Club employees in Delta uniforms designed by Richard Tyler, as well introducing a consistent on-board experience, including food choices and in- flight entertainment, on Delta and Northwest flights. Delta Expands Pact With Midwest Delta Air Lines has entered into a multi-faceted alliance agreement with Midwest Airlines that will include reciprocity between the two airlines' frequent flyer programs, new joint marketing efforts and expanded access to airport lounges throughout North America. The agreement extends Midwest's long-standing marketing agreement with Northwest Airlines to the new Delta Air Lines, which acquired Northwest last year. Under the new agreement, Midwest and Delta frequent flyers will be able to earn or redeem frequent flyer miles on either airline's network through the Delta SkyMiles, Northwest WorldPerks and Midwest Miles programs. The addition of Delta's route system to the previously available Northwest network increases to 379 the number of frequent flyer destinations available to Midwest customers. It is expected that the new codeshare arrangement will go into effect in June 2009, while the frequent flyer portion of the agreement will go into effect later this year. As part of the agreement, both airlines have agreed to engage in expanded marketing and advertising campaigns to promote the new alliance with their frequent flyers. It will also expand the existing Midwest-Northwest airport club membership agreement to include Delta Sky Clubs in the near future. "This alliance with Delta, the world's largest airline, brings tremendous added value to our customers," said Timothy E. Hoeksema, Midwest chairman and chief executive officer. "Midwest customers now have access to the world's most extensive flight network, a worldwide alliance of airline partners and other valuable benefits of being associated with the power of the Delta brand." "Expanding our alliance relationships to include Midwest Airlines is another customer benefit created by Delta's merger with Northwest Airlines," said Richard Anderson, Delta's chief executive officer. "Delta and Midwest make natural alliance partners given both airlines' focus on delivering excellent service and a quality product. Midwest customers are known as some of the most loyal in the industry and we look forward to welcoming them and earning their trust onboard Delta flights from Milwaukee to Madrid to Manila." Midwest's existing codeshare agreement with Northwest Airlines will be phased out and replaced with the new Delta agreement. Both Delta and Northwest will be using the Midwest code on flights they operate on mutually agreed flights and city pairs. The Delta and Northwest codes will not be available for use by Midwest on the flights it operates. About Delta Air Lines With its acquisition of Northwest Airlines, Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or http://www.nwa.com/-- is now the world's largest airline. From its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its Northwest subsidiary and Delta Connection carriers offer service to more than 376 destinations worldwide in 66 countries and serves more than 170 million passengers each year. Delta's marketing alliances allow customers to earn and redeem either SkyMiles or WorldPerks on more than 16,000 daily flights offered by SkyTeam and other partners. The merger closed on October 29, 2008. Prior to the merger, Delta was the world's second-largest airline in terms of passengers carried and Northwest was the world's fourth largest airline. Northwest and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington, represented the Northwest Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors retained Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy counsel. When the Northwest Debtors filed for bankruptcy, they listed $14.4 billion in total assets and $17.9 billion in total debts. On May 21, 2007, the Court confirmed the Northwest Debtors' amended plan. That amended plan took effect May 31, 2007. (Northwest Airlines Bankruptcy News Issue No. 114; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). Delta and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provided the Delta Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provided the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, served as the Committee's financial advisors. On April 25, 2007, the Court confirmed the Delta Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. (Delta Air Lines Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DIAMOND GLASS: Reaches Plan Confirmation Settlement --------------------------------------------------- DG Liquidation Corp., known as Diamond Glass Inc. before it sold its assets to Luxembourg-based Belron SA for $53.4 million plus assumed debt, will appear before the U.S. Bankruptcy Court for the District of Delaware on March 25 to seek confirmation of its Chapter 11 liquidating plan. The company was scheduled for confirmation hearings in October 2008. As frequently happens in bankruptcy, unanticipated events delayed and complicated the process, Bloomberg's Bill Rochelle said. According to Mr. Rochelle, DG Liquidation is now set for confirmation, after it announced a settlement last week that will enable a guaranteed distribution of at least $2.2 million to unsecured creditors. About Diamond Glass Headquartered in Kingston, Pennsylvania, Diamond Glass Inc. -- http://www.diamongtriumph.com/or http://www.daimondtriumphglass.com/-- provided automotive glass replacement and repair services. Founded in 1923, Diamond Glass had more than 1,600 employees as of March 15. The company and and its debtor-affiliate DT Subsidiary Corp., filed for Chapter 11 bankruptcy petition on April 1, 2008 (Bankr. D. Del. Lead Case No. 08-10601). Michael P. Richman, Esq., at Foley & Lardner LLP, and Donald J. Bowman Jr., Esq., at Young Conaway Stargatt & Taylor LLP, represent the Debtors in their restructuring efforts. The U.S. Trustee for Region 3 appointed five creditors to serve on an Official Committee of Unsecured Creditors. John T. Carrol, III, Esq., and Jeffrey R. Waxman, Esq., at Cozen O'Connor, represent the Committee in this case. When the Debtors filed for bankruptcy protection, they listed assets of between $10 million and $50 million and debts of between $100 million and $500 million. EARTH BIOFUELS: Board Stops Reverse Split of Common Stock --------------------------------------------------------- Earth Biofuels, Inc., disclosed that the Board of Directors have decided not to pursue the reverse split of the Company's common stock as initially disclosed in its Schedule 14-C filed with the Securities and Exchange Commission on November 3, 2008. The Company has determined that, at this time, a reverse stock split may not be in the best interests of its shareholders. The original intent was to initiate an anti-dilutive measure, one that would decrease the number of shares outstanding and help to create a more orderly and healthy market for the trading of its stock. However, upon further review and after conducting a historical analysis of the overall effects of such a split, it has been decided that the result often produces downward pressure on the stock. Management believes it can produce the most shareholder value organically by focusing on expanding its business without modifying the Company's current capital structure. Headquartered in Dallas, Texas, Earth Biofuels Inc. (OTC BB: EBPF) -- http://www.earthbiofuels.com/-- is engaged in the domestic production, supply and distribution of alternative based fuels consisting of biodiesel and previously liquid natural gas and ethanol. Earth's primary bio-diesel operations are located in Oklahoma and Texas. Earth sold its subsidiary which produced LNG, at the end of the second quarter 2008, and restructured its debts with significant investors. At Sept. 30, 2008, the company's balance sheet showed total assets of $14.2 million and total liabilities of $147.9 million, resulting in stockholders' deficit of $133.7 million. For three months ended Sept. 30, 2008, the company posted net loss of $10.7 million compared with net loss of $35.4 million for the same period in the previous year. For nine months ended Sept. 30, 2008, the company posted net loss of $85.8 million compared with net loss of $95.0 million for the same period in the previous year. Going Concern Doubt Montgomery Coscia Greilich LLP, in Plano, Texas, expressed substantial doubt about Earth Biofuels Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's recurring operating losses and working capital deficit. The company has incurred significant losses from operations through June 30, 2008, and has limited financial resources. The company also has an accumulated deficit of $279.3 million, negative current ratios and negative tangible net worth at June 30, 2008. In addition, investors holding $52.5 million in senior unsecured notes filed with the bankruptcy courts a Chapter 7 Involuntary Liquidation against the company during the second quarter of 2007. However, on Nov. 14, 2007, the company negotiated and executed a settlement agreement with the above note holders. The agreement required the creditors to dismiss their petition of bankruptcy. EMPORIA PREFERRED I: Moody's Has Not Withdrawn Ratings on Notes --------------------------------------------------------------- Moody's Investors Service announced that it has not withdrawn, reduced or taken any other adverse action with respect to its current ratings on these notes issued by Emporia Preferred Funding I, Ltd., and Emporia Preferred Funding I, Corp., as a result of the execution of an assignment and assumption agreement dated as of February 27, 2009, between Emporia Capital Management, LLC, and an affiliate of Allied Capital Corporation evidencing the assignment by Emporia Management of its rights and obligations as collateral manager to Allied Capital: -- U.S. $280,140,000 Class A Delayed Draw First Priority Senior Floating Rate Notes Due 2018, previously on October 12, 2005 assigned Aaa; -- U.S. $36,615,000 Class B-1 Second Priority Senior Floating Rate Notes Due 2018, Aa2 Under Review for Possible Downgrade; previously on March 4, 2009 Aa2 Placed Under Review for Possible Downgrade; -- U.S. $5,000,000 Class B-2 Second Priority Senior Fixed Rate Notes Due 2018, Aa2 Under Review for Possible Downgrade; previously on March 4, 2009 Aa2 Placed Under Review for Possible Downgrade; -- U.S. $24,360,000 Class C Third Priority Subordinated Deferrable Floating Rate Notes Due 2018, A2 Under Review for Possible Downgrade; previously on March 4, 2009 A2 Placed Under Review for Possible Downgrade; -- U.S. $24,360,000 Class D Fourth Priority Subordinated Deferrable Floating Rate Notes Due 2018, Baa2 Under Review for Possible Downgrade; previously on March 4, 2009 Baa2 Placed Under Review for Possible Downgrade; -- U.S. $8,000,000 Class E-1 Fifth Priority Subordinated Deferrable Floating Rate Notes Due 2018, Ba2 Under Review for Possible Downgrade; previously on March 4, 2009 Ba2 Placed Under Review for Possible Downgrade; -- U.S. $5,195,000 Class E-2 Fifth Priority Subordinated Deferrable Fixed Rate Notes Due 2018, Ba2 Under Review for Possible Downgrade; previously on March 4, 2009 Ba2 Placed Under Review for Possible Downgrade; -- U.S. $4,000,000 Combination Notes Due 2018, Ba1 Under Review for Possible Downgrade; previously on March 4, 2009 Ba1 Placed Under Review for Possible Downgrade; -- U.S. $25,000,000 Class I Combination Securities Due 2018 previously on October 12, 2005 assigned Aaa; -- U.S. $2,288,000 Class II Combination Securities Due 2018 previously on October 12, 2005 assigned Aaa. In arriving at its conclusion, Moody's reviewed documentation relating to the transfer of rights and duties set forth in the Collateral Manager documents from Emporia Management to Allied Capital. Moody's also conducted an on-site operations review of Allied Capital. Allied Capital and its affiliates currently manage 11 additional collateralized loan obligations with over $4.3 billion of combined assets. EMPORIA PREFERRED III: Moody's Hasn't Withdrawn Notes Ratings ------------------------------------------------------------- Moody's Investors Service announced that it has not withdrawn, reduced or taken any other adverse action with respect to its current ratings on these notes issued by Emporia Preferred Funding III, Ltd., and Emporia Preferred Funding III, LLC, as a result of the execution of an assignment and assumption agreement dated as of February 27, 2009, between Emporia Capital Management, LLC, and an affiliate of Allied Capital Corporation evidencing the assignment by Emporia Management of its rights and obligations as collateral manager to Allied Capital: -- U.S. $100,000,000 Class A-1 First Priority Senior Notes Due 2021, previously on March 15, 2007 assigned Aaa; -- U.S. $40,000,000 Class A-2 First Priority Senior Revolving Notes Due 2021, previously on March 15, 2007 assigned Aaa; -- U.S. $132,580,000 Class A-3 First Priority Delayed Draw Senior Notes Due 2021, previously on March 15, 2007 assigned Aaa; -- U.S. $26,845,000 Class B Second Priority Senior Notes Due 2021, Aa2 Under Review for Possible Downgrade; previously on March 4, 2009 Aa2 Placed Under Review for Possible Downgrade; -- U.S. $37,170,000 Class C Third Priority Subordinated Deferrable Notes Due 2021, A2 Under Review for Possible Downgrade; previously on March 4, 2009 A2 Placed Under Review for Possible Downgrade; -- U.S. $20,650,000 Class D Fourth Priority Subordinated Deferrable Notes Due 2021, Baa2 Under Review for Possible Downgrade; previously on March 4, 2009 Baa2 Placed Under Review for Possible Downgrade; -- U.S. $18,585,000 Class E Fifth Priority Subordinated Deferrable Notes Due 2021, Ba2 Under Review for Possible Downgrade; previously on March 4, 2009 Ba2 Placed Under Review for Possible Downgrade. In arriving at its conclusion, Moody's reviewed documentation relating to the transfer of rights and duties set forth in the Collateral Manager Documents from Emporia Management to Allied Capital. Moody's also conducted an on-site operations review of Allied Capital. Allied Capital and its affiliates currently manage 11 additional collateralized loan obligations with over $4.3 billion of combined assets. ENERGY PARTNERS: Gets Non-Compliance Notice From MMS ---------------------------------------------------- On March 5, 2009, Energy Partners, Ltd., was notified by the United States Department of the Interior, Minerals Management Service that an Incident of Noncompliance had been issued as a result of the Company's failure to provide supplemental bonds or other security in the amount of $16.7 million that was due by February 27, 2009, to guarantee performance of the Company's obligations to abandon wells, remove platforms and facilities, and clear the seafloor of obstructions on leases with associated lease obligations. The INC states that the Company's failure to correct this INC by the close of business on March 27, 2009 will result in a shut-in of the Company's outer continental shelf facilities located on and outer continental shelf wells associated with South Pass Block 27 and South Pass Block 28 that are located in federal waters. Energy Partners Ltd. (NYSE: EPL) -- http://www.eplweb.com/-- is an independent oil and natural gas exploration and production company based in New Orleans, Louisiana. Founded in 1998, the company's operations are focused along the U.S. Gulf Coast, both onshore in south Louisiana and offshore in the Gulf of Mexico. * * * As reported in the Troubled Company Reporter on March 3, 2008, Moody's Investors Service downgraded Energy Partners Ltd.'s Corporate Family Rating to Caa1 from B3, its Probability of Default to Caa1 from B3, and the ratings on its $300.0 million senior unsecured fixed rate notes and $150.0 million senior unsecured floating rate notes to Caa2 (LGD 4, 67%) from Caa1 (LGD 4, 65%). The downgrade reflects EPL's continued weak capital productivity, especially as evidenced by its 2007 results, negative sequential quarterly production trends, and continued high financial leverage. The rating outlook remains negative. The TCR reported on March 2, 2009, Standard & Poor's Ratings Services said it lowered its corporate credit rating on independent exploration and production firm Energy Partners Ltd. to 'CCC+' from 'B-'. The outlook is negative. EXACT SCIENCES: Receives NASDAQ Non-Compliance Notice ----------------------------------------------------- EXACT Sciences Corporation received on March 6, 2009, notice from the Listing Qualifications Staff of The NASDAQ Stock Market that the Company no longer satisfies Marketplace Rule 4310(c)(3), which requires a listed security to maintain a minimum $35 million in market value of listed securities, or stockholders' equity of at least $2.5 million for continued listing on The NASDAQ Capital Market. The Staff's notice has no effect on the Company's listing at this time. In accordance with Marketplace Rule 4310(c)(8)(C), the Company has been provided a period of 90 calendar days, through June 4, 2009, to regain compliance with the Rule. The Company will evidence compliance with the Rule if it maintains a minimum $35 million market value of its common stock for at least 10 consecutive business days or stockholders' equity of at least $2.5 million. If the Company has not regained compliance with the Rule by June 4, 2009, the Staff will issue a letter notifying the Company that its common stock is subject to delisting. At that time, the Company may appeal the Staff's determination to a Listings Qualifications Panel, which appeal will stay any delisting action by the Staff pending the Listing Qualifications Panel's consideration of the matter. The Company is exploring options to regain compliance. On January 27, 2009, EXACT consummated a strategic relationship with Genzyme Corporation for total cash proceeds of up to $24.5 million, including $22.65 million received at closing, with an additional $1.85 million to be received by July 2010, contingent upon the non-occurrence of certain events. Based on current expectations and operating assumptions, EXACT believes that its cash resources should last into 2011. About EXACT Sciences Marlborough, Massachusetts-based EXACT Sciences Corporation (EXAS) uses applied genomics to develop patient-friendly screening technologies for use in the detection of cancer. EXACT has established a strategic relationship with Genzyme to, among other things, facilitate the development of the Company's next- generation stool-based DNA (sDNA) technology. EXACT maintains an exclusive license agreement in the United States and Canada with Laboratory Corporation of America(R) Holdings (LabCorp(R)) for certain intellectual property relating to sDNA screening. Stool- based DNA technology is included in the colorectal cancer screening guidelines of the American Cancer Society and the U.S. Multi-Society Task Force on Colorectal Cancer (a group comprised of representatives from the American College of Gastroenterology, American Gastroenterological Association, and American Society for Gastrointestinal Endoscopy), and the American College of Radiology. FIRST INDUSTRIAL: S&P Downgrades Corporate Credit Rating to 'BB' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit ratings on First Industrial Realty Trust Inc. and on First Industrial L.P. to 'BB' from 'BBB-'. At the same time, S&P lowered its rating on First Industrial's senior unsecured notes to 'BB' from 'BBB-', lowered S&P's rating on the company's preferred stock to 'B' from 'BB', and placed all of S&P's ratings on First Industrial on CreditWatch with negative implications. The actions affect roughly $1.565 billion of senior notes and $275 million of preferred stock. "The downgrades were driven by our concern surrounding First Industrial's June 15, 2009, $125 million senior note maturity, as the company's essentially fully drawn credit facility significantly limits refinancing options, especially since the company has only $25 million in cash on hand," said credit analyst George Skoufis. "Additional demands on the company's capital include roughly $16 million in unfunded costs to complete its development pipeline." Standard & Poor's expects to resolve the CreditWatch placements in the next 90 days, and the outcome depends on S&P's assessment of First Industrial's prospects for raising capital. For the near term, S&P will focus on the company's ability to meet its June debt maturity. For the longer term, S&P will assess the REIT's ability to reduce its credit facility balance and improve liquidity. S&P will also consider the company's ability to remain in compliance with all debt covenants, as S&P believes operating conditions are likely to remain challenging into 2010. U.S. REIT Preliminary Review Results In Two Downgrades And Nine CreditWatch Placements (NEW YORK (Standard & Poor's) March 6, 2009)Standard & Poor's Ratings Services recently took rating actions on 10 U.S. real estate investment trusts: S&P lowered its ratings on two companies and placed S&P's ratings on nine companies on CreditWatch with negative implications. These actions affect roughly 16% of S&P's rated 62-company universe and were prompted by continued constrained access to debt and equity capital for many REITs and S&P's concern that sharply deteriorating economic conditions will result in greater pressure on portfolio-level cash flows than previously contemplated. In the current environment, S&P remain very highly focused on REIT liquidity and balance sheet strength. In S&P's view, heavy credit revolver usage (in excess of 50%), weak debt service coverage, and an over-reliance on earnings from fee-driven and/or asset sales activity are key areas of focus. With regard to REIT common dividend coverage, S&P would view even the modest funding of a dividend shortfall with debt as a negative credit factor, given the balance-sheet implications and the need for REITs to preserve precious liquidity in the current environment. From a property fundamentals standpoint, most sectors will come under stress this year, though to varying degrees. The sharp curtailment in consumer spending since last fall is hitting retailers hard, which has increased tenant default risk for retail and net-lease REIT portfolios. Retrenching and/or contracting commercial tenants will pressure occupancy and rents for office and industrial landlords. And recently accelerating job losses may now have a negative impact on the currently better-positioned multifamily and self-storage sectors. While S&P considers most healthcare REIT property portfolios to be currently fairly defensively postured, even this asset class could come under pressure if government and private insurer reimbursement schemes are meaningfully altered. As it stands now, S&P believes that the downside scenario that S&P considered last fall (see "The Recession May Bring More Negative Rating Actions To U.S. REITs And Real Estate Operating Companies," published Nov. 7, 2008) may be coming to pass. At that time, S&P took negative rating actions on 19 companies. Now, with the recession shaping up to be deeper and longer than S&P originally modeled for, S&P believes more REIT ratings will come under pressure. While S&P believes the bulk of the REITs that S&P rate face relatively manageable 2009 capital needs, 2010 and 2011 could be more challenging, absent an improvement in capital market conditions and/or a nearer-term economic turnaround. Despite these broader negative trends facing the sector, S&P continue to evaluate each rated REIT on its own merits and believe most companies remain highly focused on maintaining and/or improving their liquidity positions. While property transaction volumes have contracted substantially on a national level, the generally higher quality of REIT property holdings has enabled many companies to continue to sell assets and source attractively priced secured mortgage financing. In addition, development pipelines are contracting (which should reduce future funding needs) and a number of REITs are either cutting their dividends or considering stock dividends in an effort to retain more capital. S&P also acknowledges that the current capital and asset pricing dislocations in the market will eventually present very attractive investment opportunities for those REITs with dry powder. Most of the companies affected by S&P's recent rating actions (see list below) previously carried negative outlooks. With respect to the nine CreditWatch actions, S&P expects to completes its analyses and resolve the placements within the month, in conjunction with a full review of all U.S. REIT ratings. Please see RatingsDirect for complete, company-specific articles that address each of S&P's rating actions. S&P will publish additional REIT ratings commentary in early April and S&P will hold a teleconference to discuss S&P's broader U.S. REIT ratings perspective on Thursday April 9, 2009. Creditwatch Listings Property Focus To From -------- -- ---- Apartment Investment & Management Co. Multifamily BB+/Watch Neg BB+/Stable BRE Properties Inc. Multifamily BBB/Watch Neg BBB/Stable Capital Net Lease Automotive LLC (auto) BB/Watch Neg BB/Neg Colonial Properties Multifamily BBB-/Watch Neg BBB- /Neg Developers Diversified Realty Corp. Retail BBB-/Watch Neg BBB- /Neg Hospitality Properties Trust Net Lease (hotel) BBB/Watch Neg BBB/Neg ProLogis Industrial BBB-/Watch Neg BBB- /Neg UDR Inc. Multifamily BBB/Watch Neg BBB/Stable Rating Changes Property Focus To From -------- -- ---- Camden Property Trust Multifamily BBB/Stable BBB+/Neg First Industrial Industrial BB/Watch Neg BBB- /Neg FORD MOTOR: Union Okays Cost-Cutting Changes in Labor Agreement --------------------------------------------------------------- Matthew Dolan at The Wall Street Journal reports that union workers at Ford Motor Co. have agreed to sweeping cost-cutting changes in their labor contract. According to WSJ, Ford Motor and the United Automobile Workers union agreed in February to: -- changes on work rules, -- cuts on cost-of-living wage increases, and -- replacement of up to half of Ford Motor's cash obligation to a retiree health-care fund with the company's stock. WSJ relates that the concessions were substantial, but the margin for contract ratification wasn't very close. Citing the UAW, WSJ notes that 59% of production workers and 58% of skilled-trades employees voted for the agreement. UAW President Ron Gettelfinger said in a statement, "Once again, UAW members have stepped up to make the difficult decisions necessary to deal with the reality of the current economy, the deteriorating auto industry as a whole and specifically the negative impact the economic climate is having on Ford Motor Co. As we have stated many times, in order to succeed, shared sacrifice will be required from all stakeholders, including executives, directors, shareholders, bondholders, dealers and suppliers." Ford Motor officials said last week that they would try to cut up to $10.4 billion in debt, or 40% of the company's total, WSJ states. Ford Motor, under its offer, would pay debt holders $280 in cash and stock for every $1,000 they have in bonds, or about 28 cents on the dollar, according to the report. Ford Motor's CEO and the executive chairperson of the board had voluntarily given up 30% of their salaries through 2010. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported by the Troubled Company Reporter on March 6, 2009, Standard & Poor's Ratings Services said it lowered its corporate credit rating on Ford Motor Co. to 'CC' from 'CCC+'. S&P also lowered the issue-level ratings on the company's senior secured term loan, senior unsecured debt, and subordinated debt, while leaving the issue-level rating on Ford's senior secured revolving credit facility unchanged. In addition, the counterparty credit ratings and issue-level ratings on Ford Motor Credit Co. (Ford Credit) and FCE Bank PLC remain unchanged. The outlooks on Ford and Ford Credit are negative. Moody's Investors Service in December 2008 lowered the Corporate Family Rating and Probability of Default Rating of Ford Motor Company to Caa3 from Caa1 and lowered the company's Speculative Grade Liquidity rating to SGL-4 from SGL-3. The outlook is negative. The downgrade reflects the increased risk that Ford will have to undertake some form of balance sheet restructuring in order to achieve the same UAW concessions that General Motors and Chrysler are likely to achieve as a result of the recently- approved government bailout loans. Such a balance sheet restructuring would likely entail a loss for bond holders and would be viewed by Moody's as a distressed exchange and consequently treated as a default for analytic purposes. GENERAL GROWTH: Rouse Unit Seeks Forbearance From Noteholders ------------------------------------------------------------- General Growth Properties, Inc. said its subsidiary, The Rouse Company LP, launched a solicitation to obtain consents from the holders of TRCLP's unsecured notes -- five series with an aggregate outstanding principal amount of approximately $2.25 billion at December 31, 2008 -- to forbear from exercising remedies with respect to various payment and other defaults under the notes through December 31, 2009. "This is a significant step in our ongoing efforts to reach a plan with our lenders to develop a long-term solution to the Company's maturing debt" said Adam Metz, Chief Executive Officer. "We developed this forbearance working together with the financial and legal advisors to an ad hoc committee of holders of TRCLP Notes the members of which hold, in the aggregate, approximately 41% of TRCLP Notes. The material terms of the forbearance are: -- Consenting holders of TRCLP's 3.625% Notes due March 15, 2009, and TRCLP's 8% Notes due April 30, 2009, would agree to forbear from exercising their remedies with respect to TRCLP's failure to pay such notes at scheduled maturity. -- Consenting holders of the 3.625% Notes due March 15, 2009 and the 8% Notes due April 30, 2009, as well as of TRCLP's 7.20% Notes due 2012, its 5.375% Notes due 2013 and its 6.75% Notes due 2013, would agree to forbear from Exercising their remedies with respect to TRCLP's failure to pay cash interest on these notes during the forbearance period (interest would continue accrue on such notes at the applicable contractual rate but will not be paid in cash and instead would be added to the principal amount of the notes). -- Consenting holders would agree to forbear from exercising their remedies with respect to certain other potential defaults and cross-defaults under the indentures governing the TRCLP Notes. -- Consenting holders of all series of TRCLP Notes would receive a quarterly consent fee of $0.625 in cash for each $1,000 principal amount of notes. -- TRCLP would agree to restrictions on various actions, including restrictions on certain fundamental changes, incurrence of debt and liens, asset sales and issuances of capital stock by subsidiaries, dividends and other restricted payments and investments, transactions with affiliates, as well as limitations on certain kinds of capital expenditures. -- TRCLP would also agree to provide the representative of the ad hoc committee with certain information, including cash flow budgets, business plans and terms sheets for a comprehensive restructuring plan (to include out-of-court and in-court restructuring alternatives) and will undertake to work with the ad hoc committee's advisors to commence implementation of such a restructuring plan. -- It is intended that the forbearance arrangement become effective on March 16, 2009 and would continue in effect through December 31, 2009 unless terminated early in accordance with its terms. Termination events would include certain bankruptcy events relating to TRCLP, breaches by TRCLP of its obligations under the forbearance agreement, certain cross-default events relating to other debt obligations of TRCLP and GGP, and the failure of GGP and TRCLP to reach agreement with the ad hoc committee on the terms of a comprehensive restructuring plan by the end of July 2009. -- Conditions to the effectiveness of the forbearance arrangement include these minimum acceptance levels for each series of the Notes: * 90% for the 3.625% Notes due March 15, 2009 and the 8% Notes due April 30, 2009; * 75% for the 7.20% Notes due 2012, the 5.375% Notes due 2013 and the 6.75% Notes due 2013. -- The consent solicitation will expire at 5:00 p.m. (New York City time) on March 16, 2009, unless extended in accordance with the terms of the solicitation. The Company noted that the forbearance agreement will not be binding on non-consenting holders, and non-consenting holders will not be entitled to receive the consent fee. The Company also stated that it does not intend to make any payments of principal or interest with respect to any TRCLP Notes, including those held by non-consenting holders, during the forbearance period, and that, non-consenting holders will continue to have whatever rights and remedies are available to them under the indentures governing the TRCLP Notes and applicable law. General Growth also stated that it was working with the lenders under its 2006 Corporate Credit Agreement -- $1.99 billion term loan and $590 million revolving credit facility at December 31, 2008 -- to obtain an extension of the forbearance agreement currently in place with respect to that facility through December 31, 2009, on terms that are similar to those in the forbearance agreement with the holders of TRCLP Notes. It is a condition precedent to the effectiveness of the forbearance agreement for the TRCLP Notes that such a forbearance for the Corporate Credit Agreement be in place. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. (NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self-administered and self-managed real estate investment trust. General Growth said in a regulatory filing Sept. 30 that its potential inability to address its 2008 or 2009 debt maturities in a satisfactory fashion raises substantial doubts as to its ability to continue as a going concern. * * * As reported by the Troubled Company Reporter on Dec. 11, 2008, Fitch Ratings, has downgraded the Issuer Default Ratings and outstanding debt ratings of General Growth Properties to 'C' from 'B'. GENERAL GROWTH: Defers Payment of Unsec. Debt to Keep Liquidity --------------------------------------------------------------- General Growth Properties, Inc., disclose that the Company and its subsidiary, The Rouse Company LP, continue to be in default on substantial amounts of debt, some of which has already matured. As stated in the Company's Annual Report on Form 10-K for the year ended December 31, 2008, as of December 31, 2008, GGP had $1.18 billion in past due debt and additional $4.09 billion of debt that could be accelerated by its lenders. This amount does not include the TRCLP notes or an additional approximately $340 million of project-level debt that has become due in March 2009. This debt, combined with credit market conditions and other risks associated with the Company's financial difficulties, pose a significant threat to the Company's liquidity. As a result, General Growth has concluded that it is prudent to defer cash interest payments on its unsecured corporate debt obligations for the remainder of 2009 to provide liquidity while attempting to negotiate a consensual restructuring of its balance sheet. The consent solicitation seeking forbearance from the holders of the TRCLP Notes and the discussions with the lenders under the 2006 Corporate Credit Agreement are elements of the Company's attempt to implement this strategy. The Company anticipates entering into discussions with its other major unsecured creditor groups, including the holders of the Company 3.98% Exchangeable Senior Notes ($1.55 billion outstanding at December 31, 2008) and the trust preferred securities issued by GGP Capital Trust I ($200 million outstanding at December 31, 2008) concerning forbearances similar to that contemplated by the consent solicitation for the TRCLP Notes in the near future if the consent solicitation is successful. However, if the Company is unable to obtain forbearances from these creditor groups, or if substantial amounts of the Company's debt are accelerated as a result of a default, the Company may be forced to seek protection under the Bankruptcy Code. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. (NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self-administered and self-managed real estate investment trust. General Growth said in a regulatory filing Sept. 30 that its potential inability to address its 2008 or 2009 debt maturities in a satisfactory fashion raises substantial doubts as to its ability to continue as a going concern. * * * As reported by the Troubled Company Reporter on Dec. 11, 2008, Fitch Ratings, has downgraded the Issuer Default Ratings and outstanding debt ratings of General Growth Properties to 'C' from 'B'. GENERAL MOTORS: Republican Lawmakers Want Federal Aid Stopped ------------------------------------------------------------- Nadine Elsibai at Bloomberg News reports that Republican lawmakers said that the Congress should stop providing General Motors Corp. with federal assistance and let the firm go bankrupt if necessary. Bloomberg relates that Senator John McCain described bankruptcy as the best thing that could happen to GM. Citing Mr. McCain, Bloomberg states that GM could reorganize and renegotiate its labor contracts to come out "stronger, better, leaner." According to Bloomberg, Senator Richard Shelby said that "subsidization of anything for very long never works.... The automobile business -- those companies, Chrysler, Ford and General Motors -- they're in deep trouble. I've suggested they go into Chapter 11. That's where they belong. And they could reorganize." The government shouldn't give GM any more funds "until General Motors shows that they can be a viable company for the long term.... Anything short of that is just throwing good money after bad," Bloomberg quoted House Minority Leader John Boehner as saying. House Speaker Nancy Pelosi, Bloomberg relates, told reporters at a weekly press briefing last week, "Any money we give to the auto industry must be a lifeline, not life support. This isn't endless. But there has to be a sign of viability. And this needs to happen, and it needs to happen soon." Bloomberg quoted GM spokesperson Renee Rashid-Merem as saying, "As we've demonstrated through a series of actions, GM is moving quickly and aggressively to restructure the business, and achieving that outside of court remains the best solution for GM and its constituents." GM, as part of a restructuring required to keep $13.4 billion in U.S. loans, is cutting executive pay and will lay off about 47,000 workers this year, Bloomberg says. Bloomberg notes that the Federal Reserve's Term Asset-Backed Securities Loan Facility program may help struggling automakers raise cash to make loans to consumers. The report states that TALF's aim is to bring investors back to the market for bonds backed by auto loans, credit cards, student loans, and small businesses. The Federal Reserve, according to the report, said that it will begin disbursing TALF funds on March 25 to boost the market for consumer and small business loans. Stock Drop Worsens Bankruptcy Fears Dow Jones Newswires reports that GM shares further dropped as much as 32% to $1.27 on Friday, a level not seen since 1933. "We've rated [GM bonds] underperform since February, but we now believe a bankruptcy is more likely and the potential recovery even harder to determine," Dow Jones quoted GimmeCredit analyst Shelly Lombard as saying. Dow Jones relates that President Barack Obama gathered his auto task force in a closed-door session after GM raised still more bankruptcy concerns. As reported by the Troubled Company Reporter on March 6, 2009, Deloitte & Touche LLP, which GM's Audit Committee retained to audit the Company's consolidated financial statements and the effectiveness of internal controls, as of and for the year ended December 31, 2008, said that there is substantial doubt about the Company's ability to continue as a going concern. According to Dow Jones, the "ominous retreat" increased the bankruptcy chatter that has hurt the stock for months. If GM and its bondholders don't come up with a plan to convert two-thirds of the company's debt into equity, the task force would likely force the firm to file for bankruptcy than move the March 31 deadline, Dow Jones says, citing Ms. Lombard. Task Force to Visit GM, Chrysler & Ford Neil King Jr. and John D. Stoll at The Wall Street Journal report that the task force will visit the headquarters of GM, Chrysler LLC, and Ford Motor Co. in Detroit. The group has been gathering information about GM and Chrysler after they submitted rescue plans to the Treasury Department, WSJ relates. The report states that Treasury Department advisers Steven Rattner and Ron Bloom, who are leading the auto task force, will seek to clarify lingering questions surrounding the companies' rescue plans, which many analysts have criticized as overly optimistic. The task force, says WSJ, will meet with the United Auto Workers union to discuss its willingness for: -- deep compromises over wages, -- staff cutbacks, and -- funding for its retiree health plan. The Associated Press relates that the U.S. government said on Friday that it was trying to determine "how to be the best partner" for the struggling auto industry as its task force met Friday to review the status of GM and Chrysler. The AP states that cabinet-level members of the panel, led by Treasury Secretary Timothy Geithner and White House economic adviser Larry Summers, were at the White House to review restructuring plans from GM and Chrysler. "Team is looking through those plans and figuring out how to be the best partner in what's next for the auto industry," The AP quoted Robert Gibbs, the White House press secretary, as saying. GM Plans Payment-Assurance Program Robert Sherefkin and David Barkholz at Automotive News report that GM told its parts suppliers that it will roll out a payment- assurance program that it hopes the task force will approve this month. GM estimates that program to cost the government about $4.5 billion, according to the report. The report states that the company is trying to ease suppliers who are worried that a bankruptcy might freeze payments for parts delivered. The report says that GM is aiming to launch the program on March 31. According to Automotive News, suppliers would use the insurance to persuade banks to continue to lend them working capital against receivables owed for parts delivery. Automotive News states that suppliers could demand cash on delivery for parts, without credit insurance. This would increase GM's cash problems, the report says. German Gov't Aid to Opel to Take Weeks Tony Czuczka and Chris Malpass at Bloomberg relates that Economy Minister Karl-Theodor zu Guttenberg said after talks with GM executives that any decision on the German government aid for Opel division will take weeks. The report quoted Minister Guttenberg as saying, "General Motors has understood that there are still a series of open questions and they agree to answer the open questions. We also agreed that we're talking about a process that takes weeks." The German government had said that Opel's overhaul plan isn't enough to grant the GM unit's request for EUR3.3 billion in financial assistance. "There are many detailed questions that we will answer," Bloomberg quoted Carl-Peter Forster, Opel's top executive in Europe, as saying. GM, to try to win European aid, may give up as much as 50% of its Opel unit, Bloomberg says, citing Mr. Forster. According to the report, Opel's supervisory board agreed to transform the company into a separate legal entity. 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. GOODYEAR TIRE: Fitch Affirms Issuer Default Rating to 'BB-' ----------------------------------------------------------- Fitch Ratings affirms The Goodyear Tire & Rubber Company and its subsidiary Goodyear Dunlop Tires Europe B.V.'s ratings: GT: -- Issuer Default Rating at 'BB-'; -- $1.5 billion first lien credit facility at 'BB+'; -- $1.2 billion second lien term loan at 'BB+'; -- Senior unsecured debt at 'B+'. GDTE: -- EUR505 million European secured credit facilities at 'BB+'. The Rating Outlook is revised to Negative from Stable. The ratings cover approximately $5 billion of outstanding debt. The revision of the Rating Outlook to Negative reflects Fitch's estimates of the impact that the weakening global economy and auto industry will have on GT's financial results, cash flow, and balance sheet. Credit concerns include significant expected cash usage this year, contracting margins, declining volumes, substantial underfunded pension liabilities, raw material cost increases in the first half, high leverage, and execution risk of GT's cash savings strategies. Additionally, Fitch is concerned about labor contracts which expire this year and the possibility that Sumitomo Rubber Industries will exit its alliance with GT. Fitch could review GT's ratings for a possible downgrade should these concerns impact the company's long term financial position. Factors supporting the ratings include GT's strong liquidity position, cost reduction actions, reduced OPEB liabilities, global diversification, and a focused marketing strategy that has helped improve brand strength and revenues per tire. The first half of 2009 could be especially difficult for GT with reduced volumes and high raw material costs which could potentially lead to a high cash burn rate in this period. GT is reducing its current first quarter tire production by 12 million units, which represents 25% of first quarter 2008 tire sales. GT forecasts raw material costs to increase 15% to 18% in the first half of 2009, which Fitch estimates could increase costs by $590 million, which should be partially offset by price and mix improvements. Fitch believes volume pressure in the second half of the year will remain, but raw material costs could be reduced substantially and cost savings realized. GT has a good record of increasing prices to stay ahead of raw material cost increases, and production rationalization within the industry could help support industry tire prices. At the end of 2008, Fitch calculates GT had a liquidity position of approximately $1.86 billion, consisting of $1.894 billion of cash and equivalents and $817 million in aggregate of domestic and European available revolvers, less $265 million of short-term debt and $582 million of current maturities of long-term debt. In the past GT has commented that it needs about $1 billion of cash to meet working capital needs and overseas funding requirements through its operating cycle. More than 50% of GT's cash holdings are outside the United States. GT's $1.5 billion domestic bank revolver due 2013 has $700 million drawn on it and $497 million of letters of credit against it currently which cannot exceed $800 million. This bank revolver is subject to a borrowing base which could decrease the availability of the facility and is subject to a covenant that requires consolidated EBITDA to Consolidated Interest Expenses not to be less than 2.0 times (x) on a rolling four-quarter basis if the sum of domestic cash plus availability under the revolver is less than $150 million. GDTE's EUR505 million first-lien credit facility due 2012 has $182 million drawn on it and $10 million of LOCs against it. This facility is subject to a covenant that requires consolidated Net Debt of GDTE (net of cash in excess of $100 million) to Consolidated EBITDA of GDTE not to exceed 3.0x. Fitch estimates that GT could use a significant amount of cash in 2009 as a result of required pension contributions, capital expenditures and debt maturities. Capital expenditures are likely to be in the range of $700-800 million in 2009. Cash requirements in 2009 in addition to capital expenditures and increased pension contributions (discussed below) include cash interest expense of approximately $315 million to $335 million, OPEB contributions which the company estimates at less than $70 million, and cash charges related to restructuring actions which Fitch estimates at over $100 million. GT also has a $498 million debt maturity in December. If the debt markets open before the end of the year, Fitch believes GT will attempt to issue additional debt to help fund this maturity and strengthen the company's liquidity position. Fitch estimates that GT might need to increase debt in 2010 as well if end markets remain depressed. GT has an additional $975 million of debt that matures in 2011. Pension contributions will continue to be a significant use of cash at GT in 2009 and 2010. GT's global pension funds plan asset balance lost 32.5% of their value in 2008; the U.S. portion lost 35% of its value, leading to the U.S. year-end funded status of only 57.6% ($2.1 billion underfunded) compared to 87.3% in 2007. This performance negates the $1.1 billion OPEB liability reduction from GT's $1 billion 2008 contribution to an independent voluntary employees' beneficiary association. GT estimates that pension contributions in 2009 will be in the $350 million to $400 million range, and contributions could rise to $550 million to $600 million in 2010. At the end of 2008 equities accounted for 64% of GT's U.S. pension plan assets, exposing GT to additional funding risk given the performance in the markets so far in 2009. Fitch's expectations for significant cash usage at GT in 2009 incorporate GT's plans to reduce costs and cash expenditures in some areas. In response to the current market environment GT is reducing cash usage in 2009 through the fourth and final year of its four point cost reduction program, which could achieve cost savings of $700 million for the year. Additionally, GT is reducing its capital expenditures by approximately $250 - 350 million in 2009 from $1.049 billion last year, and it is targeting inventory reduction of over $500 million. It is possible that GT reduces costs further in 2009 through additional actions including announced capacity reduction initiatives that are not part of GT's original savings plan, additional low cost country sourcing efforts, and workforce reductions. GT's debt-to-EBITDA ratio has increased to 3.5 times (x) as of Dec. 31, 2008 from 3.0x at the end of 2007. In 2008 the company's EBITDA margins contracted to 7.2% from 8% in 2007. Fitch expects GT's leverage will continue to rise in 2009 as a result of lower revenues and declining margins. Beginning in September 2009 SRI can inform GT of its intent to exit the alliance for cause pursuant to the terms of the alliance agreement. SRI must provide notice of its intention to exit the alliance within three months of the date the exit rights become available to SRI. SRI's alliance ownership includes 25% of GT Dunlop tires North America and GT Dunlop Tires Europe as well as 75% of GT's business in Japan. The alliance gives SRI purchasing leverage and technology sharing with GT. Fitch believes the suspension of the exit rights will likely be renewed for an additional multi year term, but should SRI exercise any rights to exit the alliance, the payment process would likely extend into 2010. The rating difference between GT's secured debt and its IDR reflects the benefit of significant collateral support. GT's first lien credit facility and the second line term loan are given the same ratings due to Fitch's opinion that the collateral package provides sufficient coverage to both facilities even in the case of the first lien revolver being fully drawn. The difference between the unsecured debt and the IDR reflects the unsecured debt's junior position in the capital structure, as well as credit concerns previously described. HARGRAY COMMUNICATIONS: Moody's Affirms 'B2' Corp. Family Rating ---------------------------------------------------------------- Moody's Investors Service affirmed the B2 corporate family and probability of default ratings for Hargray Communications Group, Inc., Credit metrics for 2008 and projected metrics for 2009 are somewhat unfavorable compared to Moody's expectations as of the original rating assignment in June 2007 but remain appropriate for a B2 corporate family rating. Furthermore, Hargray benefits from adequate liquidity to manage the higher leverage, and the under performance has not threatened near term compliance with bank financial covenants, in Moody's opinion. The outlook remains stable and a summary of the actions follows. Hargray Communications Group, Inc. -- Senior Secured First Lien Bank Credit Facility, Affirmed B1, LGD3, 33% -- Senior Secured Second Lien Bank Credit Facility, Affirmed Caa1, LGD5, 86% -- Affirmed B2 Corporate Family Rating -- Affirmed B2 Probability of Default Rating -- Outlook: Stable Hargray's B2 corporate family rating reflects the pressure on its cash flow from increasing competition and the maturity of its core wireline voice business, although its ability to offer a variety of services (including voice, video, and high speed data) positions it well against its competitors. The primarily debt funded acquisition of the company by a private equity sponsor contributed to high leverage (slightly over 6 times debt-to- EBITDA), and currently weak growth prospects (due primarily to reduced real estate development activity and sales) limit Hargray's ability to reduce leverage or to generate meaningful free cash flow. Furthermore, margins remain below peers, and the geographic concentration and lack of scale pose risk. The company benefits from its integrated telecommunications model and upgraded telephony and cable plant, which mitigates the impact of rapid technological change in the industry. Hargray's directory publishing business also provides a high margin, relatively stable stream of cash flow, albeit with low to negative growth prospects over the long term. Moody's most recent rating action concerning Hargray ratings occurred on June 22, 2007, at which time Moody's revised LGD point estimates based on a change in the deal structure from the one proposed earlier in June 2007. Hargray Communications Group, Inc. operates rural telephone companies providing voice, high speed data and video services to Hilton Head Island, South Carolina (also its headquaters) and surrounding regions. It serves as the incumbent local exchange carrier and incumbent cable operator in various territories in South Carolina, and also operates as a competitive local exchange carrier in nearby regions in South Carolina. The company also has a directory publishing business. Quadrangle Group acquired Hargray from its founding family in June 2007. Its revenue for the trailing twelve months ended December 31, 2008, was approximately $135 million. HARMAN INTERNATIONAL: S&P Affirms Corporate Credit Rating to BB+ ---------------------------------------------------------------- Standard & Poor's Ratings Services said it has revised its outlook on Harman International Industries Inc. to negative from stable and affirmed its 'BB+' corporate credit rating and all debt issue ratings on the company. "The outlook revision reflects S&P's view that deterioration in the global auto markets in the year ahead will hurt Harman's revenues, earnings, and cash flows in 2009," said Standard & Poor's credit analyst Nancy Messer. "Harman's financial performance in the second fiscal 2009 quarter, ended Dec. 31, 2008, was below S&P's expectations. As a result, S&P expects the gap between the company's credit measures and S&P's expectations for its measures to diminish," she continued. The rating affirmation is based on the company's liquidity profile, leading market position in branded auto audio and infotainment products, well-recognized brand names in audio products, and leadership in the production of sophisticated audio technology for the automotive market. Harman's weak business risk profile reflects lower profitability for the 12 months ended Dec. 31, 2008. The company's margins eroded significantly during the second fiscal quarter. Profitability declined because of lower contributions margins from new launches (the company had a record number of launches--seven-- in fiscal 2008) and underabsorption of costs because of a significant 24% sales decline year over year, resulting from the global economic weakness. The company's ongoing restructuring efforts to rationalize its cost basis -- begun in mid-2007, when new management was installed -- have been overtaken by the magnitude of the global economic downturn and its negative effect on revenues and cost absorption. Still, S&P is concerned about the business's profit potential despite ongoing restructuring efforts, given Harman's dependence on technological innovation and focus on premium vehicles. To restore auto segment margins, Harman has implemented major restructuring initiatives in engineering, manufacturing, and logistics operations. The company expects the programs to produce $400 million in annualized savings by fiscal 2011. The company has well-recognized brand names in audio products, such as Harman/Kardon, JBL, and Infinity; a leading market position in branded auto audio and infotainment products, as well as in general audio equipment for professional use; and fair geographic diversity. As a leader in the production of sophisticated audio technology for the automotive market, Harman must continually innovate to maintain its competitive standing. For the remainder of fiscal 2009, S&P believes Harman will continue to face weak production volumes in the auto market globally, which accounts for about 70% of the company's revenues. Demand for light vehicles has fallen dramatically in recent months, and the outlook for Harman's key European automakers remains weak. Harman's auto products are found primarily on premium vehicles. S&P views Harman's financial risk profile as aggressive. A new senior management team was installed after a failed 2007 LBO attempt by Kohlberg Kravis Roberts & Co. L.P. and the retirement of founder Sidney Harman in 2008. In S&P's opinion, the current management team is focused on operational improvements and committed to maintaining a stable financial risk profile. Still, KKR, which holds the $400 million convertible notes, controls one seat on the Harman board of directors. S&P does not expect KKR to make a second LBO attempt, given a standstill agreement, but its presence in the corporate governance structure raises the risk that financial policies could change in the future. Harman's credit measures were adequate for the rating as of Dec. 31, 2008, but S&P believes these ratios will decline because of deterioration in its European market. S&P's credit measure targets reflect S&P's expectation that EBITDA will decline sharply in fiscal 2009 because of the weak global economy that offers no indication of when demand for light vehicles might recover. Still, the rating reflects Harman's ongoing restructuring program, which could lead to improved EBITDA margins in fiscal 2011 in its automotive segment because of a rationalized global footprint that should reduce manufacturing and engineering costs. The negative outlook reflects S&P's opinion that pressure on Harman's earnings and cash flow from the deteriorating global auto markets could outpace the benefit to profitability of restructuring initiatives and recently launched new programs. S&P could lower the ratings if the company's operational cash outflows, after capital spending, exceed $30 million for any four consecutive quarters in the year ahead. This could occur if revenue declines more than S&P expects or operational inefficiencies arise. In the year ahead, S&P expects Harman to demonstrate it can achieve and sustain adjusted annualized EBITDA of at least $200 million, given its pension- and lease-adjusted total debt of $678 million as of Dec. 31, 2008, even if this does not occur in fiscal 2009. S&P expects earnings and cash flow for fiscal 2010 to improve, after a very weak 2009, as cost savings and launch activity begin to benefit earnings. S&P does not expect the company to pursue transforming acquisitions or large dividend payouts in the year ahead that could pressure credit ratios. Although highly unlikely in the near term, S&P could revise the outlook to stable if Harman returns to historical levels of double-digit adjusted EBITDA margins, despite S&P's view that the weak global economy and deteriorating production volumes for its European auto customers will significantly pressure earnings in fiscal 2009. Still, Harman could achieve improved margins if ongoing restructuring initiatives are sufficient to offset earnings pressures. S&P's view of the company's prospective financial policies would be an important aspect of any positive rating change. HARRAH'S ENTERTAINMENT: S&P Downgrades Corp. Credit Rating to CC ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Las Vegas-based Harrah's Entertainment Inc. and its wholly owned subsidiary, Harrah's Operating Co. Inc., to 'CC' from 'CCC'. The rating outlook is negative. At the same time, S&P lowered the issue-level rating on each of HOC's outstanding senior secured second-priority and senior unsecured debt issues to 'C', from 'CCC-' and 'CC', respectively. S&P also lowered the issue-level rating on Caesars Entertainment Inc.'s subordinated debt issues to 'C' from 'CC'. In addition, S&P placed the 'B-' issue-level rating for HOC's senior secured first-lien credit facilities on CreditWatch with negative implications. These actions follow Harrah's announcement that it is offering to exchange up to $2.8 billion of new 10% senior secured second- priority notes due 2018 for a portion (or potentially all in some cases) of each of the outstanding senior unsecured and subordinated notes in the company's capital structure. In some cases, an exchange for the new notes would represent a substantial discount to the par amount of the outstanding issue. In addition, the terms of the exchange offer allow holders of notes maturing in 2015, 2016, and 2017 the option to receive cash pursuant to a cash tender of up to $150 million (at a substantial discount to par) offered by Harrah's BC Inc., a wholly owned subsidiary of HET. Concurrent with the exchange offers and HBC's tender offer, investors, including Apollo Global Management LLC and TPG Capital L.P., are launching a $250 million cash tender offer (at a substantial discount to par) for HOC's existing 10% second- priority senior secured notes due 2015 and 2018, which were placed as part of Harrah's December 2008 exchange offer. The investor group also intends to amend the offer to include the new notes immediately upon settlement of the exchange offers and HBC's tender offer. S&P views the exchange and tender offers as being tantamount to default given the distressed financial condition of the company and S&P's previously stated concerns around Harrah's ability to service its current capital structure over the next several quarters absent this exchange offer. S&P lowered its corporate credit rating on the company to 'CCC' on Feb. 17, 2009, following Harrah's announcement that it had submitted borrowing requests for the remaining amount available under its $2 billion revolving credit facility. This was based on S&P's belief that the company's ability to service its capital structure and remain in compliance with its bank covenants was in doubt, given S&P's expectation for EBITDA to decline in the low- to mid-teens percentage area in 2009. Upon consummation of the transaction, S&P would lower its ratings on the existing senior secured second-priority, senior unsecured, and subordinated debt issues that participate in the exchange or tender to 'D', and the corporate credit rating to 'SD' (selective default). As soon as is possible thereafter, S&P will reassess Harrah's capital structure and assign new ratings based on the amount of notes successfully tendered. "It is our preliminary expectation that, in the event the exchange succeeds, the corporate credit rating would likely be in the 'CCC' category following the consummation of the exchange transactions," said Standard & Poor's credit analyst Ben Bubeck. S&P recognizes that the post-exchange capital structure could eliminate, or at least substantially reduce, Harrah's debt maturities over the next few years, in addition to meaningfully lowering the company's outstanding debt. However, Harrah's ability to successfully service its debt obligations over the intermediate term would still rely on a substantial moderation of the revenue and cash flow declines recently observed in the gaming sector. In the event the exchange is successful, however, the company would likely have greater capacity to weather the current downturn over at least the next several quarters. Due to the high variability of the post-exchange capital structure, S&P is not yet assigning a rating to the new notes. However, S&P does expect that, in the event the exchange offer is even modestly successful, the recovery rating on the existing second-priority notes would be revised to '6', indicating S&P's expectation of negligible (0% to 10%) recovery for lenders in the event of a payment default, from '5'. Given the potential that all of HOC's subsidiaries that pledge their assets to secure the new notes could also guarantee the new notes, S&P believes the new notes would have priority over the existing second-priority notes. The 'B-' issue-level rating on the first-lien credit facilities will remain on CreditWatch until the conclusion of S&P's review following the completion of the exchange offer, once the post- exchange capital structure becomes clear. HARRAH'S OPERATING: S&P Cuts Corp. Credit Rating to 'CC' -------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Las Vegas-based Harrah's Entertainment Inc. and its wholly owned subsidiary, Harrah's Operating Co. Inc., to 'CC' from 'CCC'. The rating outlook is negative. At the same time, S&P lowered the issue-level rating on each of HOC's outstanding senior secured second-priority and senior unsecured debt issues to 'C', from 'CCC-' and 'CC', respectively. S&P also lowered the issue-level rating on Caesars Entertainment Inc.'s subordinated debt issues to 'C' from 'CC'. In addition, S&P placed the 'B-' issue-level rating for HOC's senior secured first-lien credit facilities on CreditWatch with negative implications. These actions follow Harrah's announcement that it is offering to exchange up to $2.8 billion of new 10% senior secured second- priority notes due 2018 for a portion (or potentially all in some cases) of each of the outstanding senior unsecured and subordinated notes in the company's capital structure. In some cases, an exchange for the new notes would represent a substantial discount to the par amount of the outstanding issue. In addition, the terms of the exchange offer allow holders of notes maturing in 2015, 2016, and 2017 the option to receive cash pursuant to a cash tender of up to $150 million (at a substantial discount to par) offered by Harrah's BC Inc., a wholly owned subsidiary of HET. Concurrent with the exchange offers and HBC's tender offer, investors, including Apollo Global Management LLC and TPG Capital L.P., are launching a $250 million cash tender offer (at a substantial discount to par) for HOC's existing 10% second- priority senior secured notes due 2015 and 2018, which were placed as part of Harrah's December 2008 exchange offer. The investor group also intends to amend the offer to include the new notes immediately upon settlement of the exchange offers and HBC's tender offer. S&P views the exchange and tender offers as being tantamount to default given the distressed financial condition of the company and S&P's previously stated concerns around Harrah's ability to service its current capital structure over the next several quarters absent this exchange offer. S&P lowered its corporate credit rating on the company to 'CCC' on Feb. 17, 2009, following Harrah's announcement that it had submitted borrowing requests for the remaining amount available under its $2 billion revolving credit facility. This was based on S&P's belief that the company's ability to service its capital structure and remain in compliance with its bank covenants was in doubt, given S&P's expectation for EBITDA to decline in the low- to mid-teens percentage area in 2009. Upon consummation of the transaction, S&P would lower its ratings on the existing senior secured second-priority, senior unsecured, and subordinated debt issues that participate in the exchange or tender to 'D', and the corporate credit rating to 'SD' (selective default). As soon as is possible thereafter, S&P will reassess Harrah's capital structure and assign new ratings based on the amount of notes successfully tendered. "It is our preliminary expectation that, in the event the exchange succeeds, the corporate credit rating would likely be in the 'CCC' category following the consummation of the exchange transactions," said Standard & Poor's credit analyst Ben Bubeck. S&P recognizes that the post-exchange capital structure could eliminate, or at least substantially reduce, Harrah's debt maturities over the next few years, in addition to meaningfully lowering the company's outstanding debt. However, Harrah's ability to successfully service its debt obligations over the intermediate term would still rely on a substantial moderation of the revenue and cash flow declines recently observed in the gaming sector. In the event the exchange is successful, however, the company would likely have greater capacity to weather the current downturn over at least the next several quarters. Due to the high variability of the post-exchange capital structure, S&P is not yet assigning a rating to the new notes. However, S&P does expect that, in the event the exchange offer is even modestly successful, the recovery rating on the existing second-priority notes would be revised to '6', indicating S&P's expectation of negligible (0% to 10%) recovery for lenders in the event of a payment default, from '5'. Given the potential that all of HOC's subsidiaries that pledge their assets to secure the new notes could also guarantee the new notes, S&P believes the new notes would have priority over the existing second-priority notes. The 'B-' issue-level rating on the first-lien credit facilities will remain on CreditWatch until the conclusion of S&P's review following the completion of the exchange offer, once the post- exchange capital structure becomes clear. HEREFORD BIOFUELS: Parent to "Go Dark" and Deregister With SEC -------------------------------------------------------------- Panda Ethanol, Inc., said that by March 30, 2009, it intends to file a Form 15 with the Securities and Exchange Commission to deregister its common stock under Section 12(g) of the Securities Exchange Act of 1934, as amended, and suspend the company's reporting obligations under Sections 13(a) and 15(d) of the Exchange Act. Upon the filing of the Form 15, the company's obligation to file periodic and current reports with the SEC, including Forms 10-K, 10-Q and 8-K, will be immediately suspended. The company is eligible to file Form 15 because its common stock is held of record by less than 300 persons. Darol Lindloff, the chief executive officer of Panda Ethanol, stated that "after evaluating and discussing the options before the company, especially in light of the bankruptcy filings by our Hereford subsidiaries, the company's board of directors has determined that the benefits of remaining a reporting public company were outweighed by the financial costs of complying with the associated regulatory requirements. As a result, the board has concluded that going dark is in the best interest of the company and its stockholders." On January 23, 2009, the company's subsidiaries holding and managing its Hereford ethanol refinery filed voluntary petitions for relief under Chapter 11 of United States Bankruptcy Code. The company does not anticipate that it or its shareholders will receive any proceeds from the sale of the Hereford facility. The company will continue to manage construction and operations at the Hereford facility during the bankruptcy cases. However, the company no longer has control of the facility and could be replaced as manager upon completion of the sale of the Hereford facility. The company is currently assessing its options with respect to future operations or projects. Due to current economic and market conditions, activities on the company's other development projects are on hold. In connection with the deregistration process, the company's common stock will no longer be eligible for quotation on the OTC Bulletin Board. The company anticipates that its shares of common stock will be quoted on the Pink Sheets, but there can be no assurance that any broker will make a market in the company's common stock. Holders of restricted shares of the company's common stock should be aware that once the company suspends its reporting obligations under the Exchange Act, such holders will no longer be permitted to rely on Rule 144 under the Securities Act of 1933, as amended, to effect public resales of such common stock. Rule 144(i) prohibits the use of Rule 144 for the resale of securities that were issued by a company that was a shell company at or before the time of issuance and that is not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act. The company's predecessor, Cirracor, Inc., was a shell company. About Hereford Biofuels Holdings Hereford Biofuels Holdings, based in Dallas, Texas, and three affiliates filed for Chapter 11 bankruptcy on January 23, 2009 (Bankr. N.D. Tex. Case No. 09-30452). Judge Stacey G. Jernigan presides over the case. Gregory M. Gordon, Esq., at Jones Day, serves as the Debtors' bankruptcy counsel. When it filed for bankruptcy, Hereford Biofuels disclosed $50 million to $100 million in assets and $100 million to $500 million in debts. About Panda Ethanol Headquartered in Dallas, Texas, Panda Ethanol Inc. (OTC BB: PDAE) -- http://www.pandaethanol.com-- is currently developing six 115 million gallon-per-year denatured ethanol projects located in Texas, Colorado and Kansas. Four of these facilities will each generate the steam used in the ethanol manufacturing process by gasifying upwards of 1 billion pounds of cattle manure per year. Panda is currently constructing its first biomass-fueled refinery in Hereford, Texas and anticipates ethanol production to commence during the third quarter of 2008. Once complete, the Hereford facility will be one of the most fuel-efficient ethanol refineries in the nation and the largest biomass-fueled ethanol plant in the United States. Panda Ethanol's founder is Panda Energy International, a privately held company which has built more than 9,000 MW of electric generation capacity at a cost of $5 billion. HOVNANIAN ENTERPRISES: Weak Cash Flow Cues Moody's Junk Rating -------------------------------------------------------------- Moody's Investors Service lowered the ratings of Hovnanian Enterprises, Inc., including the company's corporate family rating to Caa1 from B3, second lien senior secured notes to B1 from Ba3, senior unsecured notes to Caa2 from Caa1, senior sub notes to Caa3 from Caa2, and preferred stock to Ca from Caa3. The third lien senior secured notes were confirmed at B3 and the speculative grade liquidity assessment was affirmed at SGL-2. The ratings outlook is negative. This concludes the review for downgrade process that was initiated on February 4, 2009. The downgrades reflect Moody's expectation that Hovnanian's cash flow performance will weaken considerably in 2009 and be followed by an even weaker 2010. Even though Hovnanian was the second-to- last in the industry to turn cash flow positive on a trailing twelve month basis, it will be among the first in the industry to once again turn cash flow negative, beginning this year, after excluding the contribution from tax loss refunds. In addition, the downgrades consider the thin net worth buffer of about $263 million (after giving 50% equity credit to the preferred stock), which Moody's anticipates will be further reduced by continuing impairment charges. As a result, debt leverage, already greatly elevated at an adjusted 91%, is likely to climb even further. Finally, Moody's is projecting that the company will continue generating sizable quarterly operating losses well into 2010. At the same times, the ratings are supported by the company's comfortable current cash position of about $842 million, covenant compliance flexibility, and absence of any material near term debt maturities. The negative outlook reflects the expectation of Moody's Corporate Finance Group that housing market conditions will worsen in 2009, the bottom is not yet visible, government actions will be helpful largely at the margin, liquidity will remain tight and lender behavior uncertain, and 2009 will be a year of greatly reduced deliveries. Going forward, the ratings could be lowered further if the company were to engage in a distressed bond exchange, violate the only remaining covenant in its revised covenant package, and/or deplete its cash reserves either through sharper-than-expected operating losses or through a sizable investment or other transaction. 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 reduce debt leverage to a more manageable 60 - 70% target level. These rating actions were taken: -- Corporate family rating lowered to Caa1 from B3; -- Probability of default rating lowered to Caa1 from B3; -- Second lien senior secured notes lowered to B1 (LGD2, 22%) from Ba3 (LGD2, 24%); -- Third lien senior secured notes confirmed at B3 (LGD3, 35%) from B3 (LGD3, 45%); -- Senior unsecured notes lowered to Caa2 (LGD4, 65%) from Caa1 with an (LGD5, 71%); -- Senior subordinated notes ratings lowered to Caa3 (LGD6, 93%) from Caa2 (LGD6, 93%); -- Preferred stock rating lowered to Ca (LGD6, 97 %) from Caa3 (LGD6, 97%); -- Speculative grade liquidity assessment affirmed at SGL-2. The substantial upnotching of the rating on the second lien senior secured notes reflect their second lien status and well secured priority position in the capital structure. All of K. Hovnanian Enterprise's debt is guaranteed by its parent company, Hovnanian Enterprises, Inc., and its restricted operating subsidiaries. Established in 1959 and headquartered in Red Bank, New Jersey, Hovnanian Enterprises, Inc. designs, constructs and markets single-family detached homes and attached condominium apartments and townhouses. Homebuilding revenues and consolidated net income (before preferred dividends) for fiscal 2008 were $3.3 billion and -$1.1 billion, respectively. INSITE VISION: To Appeal NYSE Decision to Delist Shares ------------------------------------------------------- InSite Vision Incorporated (NYSE Alternext US:ISV) reported Wednesday that NYSE Alternext US LLC has notified InSite that it has not accepted the plan that the company filed in January with regard to how it intends to regain compliance with Sections 1003(a)(i) and (ii) of the Exchange's Company Guide by June 15, 2010, that InSite no longer complies with the Exchange's continued listing standards and that as a result the Company's common stock is subject to being delisted from the Exchange. InSite has appealed this determination and requested an oral hearing before a committee of the Exchange, which it expects to be heard within the next 45 days. In addition, the staff of the Exchange notified InSite that pursuant to Section 1003(f)(v) of the Company Guide, the staff believes that a reverse stock split is appropriate in view of the fact that InSite's common stock has been selling for a substantial period of time at a low price per share and that the low selling price of its common stock over the aforementioned period constituted an additional deficiency with respect to the Exchange's continued listing requirements. On December 19, 2008, InSite received notice from the Exchange, advising the company that it is not in compliance with certain of the Exchange's continued listing standards as set forth in part 10 of the Exchange's Company Guide. Specifically, the Exchange stated that the company was not in compliance with Section 1003(a)(i) of the Company Guide because InSite's stockholders' equity is less than the required $2,000,000 and it has losses from continuing operations and net losses in two of its three most recent fiscal years, and is not in compliance with Section 1003(a)(ii) of the Company Guide because InSite's stockholders' equity is less than the required $4,000,000 and it has losses from continuing operations and net losses in three of its four most recent fiscal years. InSite intends to continue working with the Exchange toward resolution of this issue in order to regain compliance with the Exchange's listing standards by June 15, 2010. If InSite fails to gain acceptance of its plan, the Exchange may initiate delisting proceedings. If the Exchange accepts InSite's plan based on appeal, InSite may be able to continue its listing through June 15, 2010 or such other period as is determined by the Exchange, during which time it will be subject to periodic review to determine if it is making progress consistent with the plan. If the Company does not regain compliance by June 15, 2010, or if the Company does not make progress consistent with the plan during the plan period, the Exchange may initiate delisting procedures. There can be no assurance that the hearing will be decided in favor of InSite, or that the Company's plan will be acceptable to the Exchange or that if such plan is acceptable to the Exchange, that the Company will be able to make progress consistent with such plan. About InSite Vision Based in Alameda, California, InSite Vision -- http://www.insitevision.com-- is committed to advancing new and superior ophthalmological products for unmet eyecare needs. InSite is recognized for the discovery and development of novel ocular pharmaceutical products based on its DuraSite(R) bioadhesive polymer core technology, an innovative platform that extends the duration of drug delivery on the eye's surface thereby reducing frequency of treatment and improving the efficacy of topically delivered drugs. By formulating the well-established antibiotic azithromycin in DuraSite, InSite developed the lowest-dosing ocular antibiotic available to the United States ophthalmic market, AzaSite(R) (azithromycin ophthalmic solution) 1%. AzaSite is marketed by Inspire Pharmaceuticals in the United States for the treatment of bacterial conjunctivitis (pink eye) and by international partners in South Korea, four countries in South America, Turkey and China. INTERLAKE MATERIAL: Gets Court OK to Sell Biz to Mecalux for $30MM ------------------------------------------------------------------ Interlake Material Handling Inc. has obtained permission to sell its business for $30 million to Mecalux SA, Spain's largest maker of warehouse equipment, Bloomberg's Bill Rochelle reported. There were no competing bids at auction, according to the report. Interlake Material and its affiliated debtors earlier won approval from the Court to auction off on March 4 substantially all of their assets. The Debtors, on Dec. 31, 2008, signed a contract with Mecalux USA, Inc., and Mecalux Mexico S.A. de C.V., and have agreed to sell their assets to Mecalux for $30,000,000, absent higher and better bids for those assets. Other bids for the assets were due March 2. Interlake Material has hired an auctioneer to sell the equipment in three plants that aren't being sold to Mecalux SA. About Interlake Material Headquatered in Naperville, Illinois, Interlake Material Handling Inc. -- http://www.interlake.com-- makes steel storage racks in the United States. The company and three of its affiliates filed for protection on January 5, 2009 (Bankr. D. Del. Lead Case No. 09-10019). Winston & Strawn LLP represents the Debtors in their restructuring efforts. The Debtors proposed Young, Conaway, Stargatt & Taylor LLP, as their local counsel; Lake Pointe Advisors LLC and Huron Consulting Services LLC as financial advisors; and Kurtzman Carson Consultants LLC as claims agent. When the Debtors filed for protection from their creditors, they listed assets between $50 million and $100 million, and debts between $100 million and $500 million. INTERNATIONAL COAL: S&P Affirms Corporate Credit Rating at 'B-' --------------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its 'B-' corporate credit rating on Scott Depot, West Virginia-based International Coal Group LLC and removed all ratings from CreditWatch where they were placed with negative implications on Feb. 13, 2009. The outlook is negative. "The affirmation and CreditWatch removal reflect the company's recent announcement that it had successfully entered into an amendment of its $100 million credit facility to ease certain debt covenants during 2009," said Standard & Poor's credit analyst Sherwin Brandford. The company had sought covenant relief because of the combination of weaker-than-expected fourth-quarter performance, customer deferrals of higher-priced metallurgical coal shipments, and the tightening of covenant requirements effective Jan. 1, 2009. However, with required covenant levels governing the amended credit facility tightening each quarter during 2009, ICG's operating performance will need to improve materially from current levels to remain in compliance. Specifically, the maximum leverage covenant, which has been amended to 4.5x for the 12 months ending March 31, 2009, declines for the four consecutive quarters that follow, eventually stabilizing at 2.75x for the 12- month periods ending after Jan. 1, 2010. In addition, the company is currently required to maintain minimum liquidity, defined as cash and revolver availability, of $25 million, which increases to $40 million at Jan. 1, 2010. The rating on ICG reflects the company's modest size, high cost profile, meaningful exposure to the difficult operating environment of Central Appalachia, and limited liquidity. The rating also reflects the company's significant near term capital expenditure program and the current conditions of its mines because of underspending by its predecessors during past bankruptcies. Still, W.L. Ross & Co., the partial owner of ICG, remains committed to ensuring adequate liquidity at ICG during the completion of the ongoing capital spending program. JOHN KING: Court Dismisses Chapter 7 Bankruptcy Case ---------------------------------------------------- The Hon. Thomas Bennett of the U.S. Bankruptcy Court for the Northern District of Alabama has denied John A. King's petition for Chapter 7 bankruptcy protection, Paul J. Nyden at The Charleston Gazette reports. According to The Charleston Gazette, Judge Nyden learned that Mr. King has been hiding from the Court at least $670,000 in assets he held in the Bone Maker Trust, one of several accounts Mr. King created. Judge Nyden then ruled that Mr. King can no longer use his federal bankruptcy filing to eliminate debts or protect himself from financial claims and lawsuits, The Charleston Gazette says. The Charleston Gazette relates that Mr. King submitted a Chapter 7 bankruptcy petition on December 4, 2007, saying that he had no cash, no checking or savings accounts, no firearms, no clothing, no furs, and no jewelry of any value. Mr. King, according to The Charleston Gazette, said that he had no monthly income, hadn't collected pension benefits and the he had no monthly expenses. The report says that Mr. King listed $125,204 in liabilities and $500 in assets, the value of his 1993 Volvo. The Charleston Gazette reports that on September 19, 2008, Mr. King filed an amended personal property schedule in the Court, listing $52,547 in assets, including $49,747 in pension benefits, $2,000 in a trust fund, and the $500 Volvo. Birmingham News relates that Mr. King revealed to the Court on Wednesday that he had deposited paychecks into his mother's bank account and still had hundreds of thousands of dollars in the Bone Maker Trust. Judge Bennett, according to the Birmingham News, told Mr. King, "It occurs to me that you've structured your affairs so that your creditors would have great difficulty in reaching into your income as a doctor." Judge Bennett said that he didn't believe most of what Mr. King said during the bankruptcy proceedings, the report states. The Charleston Gazette states that former clients Renee Blackman, who has filed a lawsuit with Misty Shepherd against Mr. King, claimed that the Debtor inflicted unnecessary pain while treating her. According to the report, Ms. Shepherd alleged that Mr. King caused major medical problems by overdosing her with prescription drugs. Mr. King, The Charleston Gazette relates, has an ongoing dispute with the Internal Revenue Service, which claimed that Mr. King owes about $1,001,933 in federal income taxes. The report says that U.S. Attorney Alice H. Martin filed in February a motion to force Mr. King to pay those back taxes. Judge Bennett, states the report, ruled in favor of the IRS on February 24, after Mr. King failed to show up for the hearing on February 19. Mr. King filed an appeal of Judge Bennett's order, claiming he didn't receive the letter informing him about the hearing until February 20, according to the report. John A. King generated 124 medical malpractice lawsuits during his seven months on the staff of Putnam General Hospital. KINGSLEY CAPITAL: Files Second Amended Disclosure Statement ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Colorado has scheduled a hearing on April 21, 2009, at 1:30 p.m. to consider the adequacy of the disclosure statement explaining Kingsley Capital, Inc.'s amended Plan of Reorganization. Objections, if any, to the Disclosure Statement will be made in writing and filed with the Court not less than 10 days prior to the hearing on the adequacy of the Disclosure Statement. Kingsley Capital filed with the Court on February 20 a Second Amended Disclosure Statement explaining its Amended Plan of Reorganization. The Plan anticipates the orderly collection of the College Partnership assets, the ordinary course sale or refinancing of the Ramona Property, and the ordinary course development and sale of the minerals, for distribution to creditors pursuant to the priority provisions of the Bankruptcy Code. Given the status of potential sales in the following months that should result in payment in full of all creditors with interest, the Debtor believes that its Plan is in the best interests of the creditors and the Interest holders. The Plan segregates the various claims against and interests in the Debtors into 10 classes: Class 1 San Diego Secured Claim Class 2 Fidelity Secured Claim Class 3 National Legal Secured Claim Class 4 John Grace/New Horizons Secured Claim Class 5 Burg Simpson Secured Claim Class 6 Priority Non-Tax Claims Class 7 General Unsecured Claims Class 8 Insider General Unsecured Claims Class 9 New Horizon Claims Class 10 Interests Claims in Classes 3 through 9 are all impaired under the Plan and are conclusively presumed to have accepted the Plan. Classes 1, 2 and 10 are unimpaired under the Plan and are conclusively presumed to have accepted the Plan. The holder of the Allowed Claim of John Grace or New Horizons, LLC (whichever is the proper holder) under Class 4 for $850,000, that is secured by a third priority lien encumbering the Ramona Property, will retain its lien with the same validity it held prior to the filing of the Bankruptcy Case, but shall otherwise be treated as part of the Class 9 Claim. General Unsecured Claims under Class 7 will receive their Pro Rata share of Available Cash not used to pay Allowed Administrative Claims, Allowed Professional Fee Claims, Allowed Class 6 Priority Non-Tax Claims, or Allowed Priority Unsecured Tax Claims. At least 33% of the Allowed Class 7 Claims must be paid on or before the date that is one year after the Effective Date, at least 66% in the aggregate of the Allowed Class 7 Claims must be paid on or before the date that is two years after the Effective Date, and the Allowed Class 7 Claims must be paid in full on or before the date that is three years after the Effective Date, The Debtor believes that the amount of Allowed Claims in Class 7 will approximate $440,000. As soon as reasonably practical following the date upon which the Debtor has either paid in full or reserved for the payment of all Allowed Administrative Claims, Professional Fee Claims and Priority Non-Tax Claims and all Claims in Class 6, Claimants with Allowed Class 9 Claims will be entitled to receive 15% of Available Cash. Once the Allowed Class 7 Claims have been paid in full with interest, Claimants with Allowed Class 9 Claims shall become entitled to receive distributions of 50% of Available Cash. Once the Allowed Class 8 Claims have been paid in full with interest, Claimants with Allowed Class 9 Claims shall become entitled to receive Distributions of All Available Cash until the Allowed Class 9 Claims are paid in full. A full-text copy of the Debtor's Second Amended Plan, as filed with the Court on February 20, 2009, is available at: http://bankrupt.com/misc/KingsleyCapital.2ndAmendedDS.pdf Denver, Colorado-based Kingsley Capital Inc. filed for Chapter 11 relief on May 23, 2008 (Bankr. D. Colo. Case No. 08-17152). Christian C. Onsager, Esq., David M. Rich, Esq., and Michael J. Guyerson, Esq., at Onsager, Staelin & Guyerson LLC, represent the Debtor as counsel. The Debtor filed on June 9, 2008, its schedules of assets and schedules, disclosing total assets of $10,356,146 and total liabilities of $5,028,840. LANDAMERICA ASSESSMENT: Case Summary & 20 Top Unsecured Creditors ----------------------------------------------------------------- Debtor: LandAmerica Assessment Corporation aka National Assessment Corporation 5600 Cox Road Glen Allen, VA 23060 Bankruptcy Case No.: 09-31453 Debtor-affiliates filing subject to Chapter 11 petitions on Nov. 26, 2008: Entity Case No. ------ -------- LandAmerica Financial Group Inc. 08-35994 LandAmerica 1031 Exchange Services Inc. 08-35995 Type of Business: The Debtor and its affiliates provide products and services that facilitate the purchase, sale, transfer, and financing of residential and commercial real estate to a broad-based customer group including: residential and commercial property buyers and sellers, real estate agents and brokers, developers, attorneys, mortgage brokers and lenders, and title insurance agents. The Debtor and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. Based on title premium revenue, the Debtor is one of the largest title insurance underwriters in the United States. In addition to their core title insurance business, the Debtor and its affiliates also provides a comprehensive suite of other products and services for residential and commercial real estate transactions, including appraisals, home inspections, warranties, title search, examination, escrow, and closing services. Chapter 11 Petition Date: March 6, 2009 Court: Eastern District of Virginia (Richmond) Judge: Kevin R. Huennekens Debtor's Counsel: John H. Maddock III, Esq. jmaddock@mcguirewoods.com McGuireWoods LLP One James Center, 901 E. Cary St. Richmond, VA 23219-4030 Tel: (804) 775-1178 Estimated Assets: $10 million to $50 million Estimated Debts: $500,000 to $1 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ BVT Institutional arbitration award $2,613,424 Investments, Inc. and U.S. Retail Income Fund, VIII-D L.P. c/o T. Tucker Hobgood Johnson Hobgood Rutherford LLC 600 Galleria Parkway Suite 950 Atlanta, GA 30339 Tel: (770) 333-9933 Fax: (770) 563-8330 Metroplaza Associates lease agreement $14,915 Attn: Anna/Accounting Office 1200 Wood Avenue South Suite 603 Iselin, New Jersey 08830 Tel: (732) 603-7002 Fax: (732) 494-5198 Miles& Stockbridge PC legal services $13,555 Attn: E. Hutchinson Robbins, Jr. 10 Light Street Baltimore, Maryland 21202 Tel: (410) 727-6464 Fax: (410) 385-3700 Commercial Realty & lease agreement $12,300 Resources Corp. 8000-8008 Corporat LLC trade debt $9,466 Morgan Lewis & Bockius legal services $9,438 Stites & Harbison PLLC legal services $8,796 Managed Business services deal $8,104 Solutions, L.L.C. trade debt $7,500 Seyfarth Shaw LLP legal services $5,784 Martin & Associates trade debt $5,100 Environmental Services GloriousSun Robert Martin LLC trade debt $4,851 Kennedy Wilson Properties lease agreement $4,555 Nasim Ahmed trade debt $4,290 Staples Business Advantage supplies $3,628 Dept. BC Group trade debt $3,125 Geologic trade debt $2,800 John Komar trade debt $2,675 Patti Weber trade debt $2,550 Richard Deluna trade debt $2,400 The petition was signed by G. William Evans, president and chief financial officer. LEUCADIA NATIONAL: Moody's Cuts Rating on $98 Mil. Notes to 'B2' ---------------------------------------------------------------- Moody's Investors Service has downgraded the debt rating of Leucadia National Corporation and has placed the ratings on review for further possible downgrade. These ratings have been downgraded and placed on review for further possible downgrade: -- $98 million 8.65% junior subordinated debentures due 2027 downgraded to B2 (LGD6, 96%) from B1 (LGD6, 96%); -- $221 million 3.75% convertible senior Sub notes due 2014 downgraded to B2 (LGD6, 92%) from B1 (LGD6, 90%); -- $100 million 7.75% senior notes due 2013 downgraded to Ba3 (LGD4, 51%) from Ba2 (LGD3, 46%); -- $375 million 7% senior global notes due 2013 downgraded to Ba3 (LGD4, 51%) from Ba2 (LGD3, 46%); -- $500 million 7.13% senior global notes due 2017 downgraded to Ba3 (LGD4, 51%) from Ba2 (LGD3, 46%); -- $500 million 8.13% senior notes due 2015 downgraded to Ba3 (LGD4, 51%) from Ba2 (LGD3, 46%); -- Senior, subordinated, and preferred debt shelf, downgraded to (P) Ba3, (P) B2, and (P) B2 from (P) Ba2, (P) B1, and (P) B1, respectively. The downgrade and the review is prompted by the weak operating environment for Leucadia's various business units, substantial decline in current asset values, and the recent and anticipated performance for the company's operations and investments. Moody's believes that various businesses may pressure Leucadia's cash flow generation as they experience further sales and margin pressure. The review is prompted by the company's weak operating performance and the weakened outlook for its business units and for its investments. The review will focus on: (i) the ability of its investments to generate positive cash flow; (2) the ability to profitably monetize its investments, (iii) the company's projected liquidity. The last rating action was September 24, 2007 when Moody's Investors Service assigned a Ba2 rating to Leucadia National Corporation's $500 million senior notes. Moody's also assigned a (P) Ba2, (P) B1, (P) B1 to the company's senior, subordinated, and preferred debt shelf, respectively, and affirmed existing ratings. Leucadia National Corporation, based in New York City, is a diversified investment company engaged in a variety of businesses, including manufacturing, telecommunications, property management and services, gaming entertainment, real estate activities, medical product development and winery operations. The Company also has significant investments in the common stock of two public companies that are accounted for at fair value, one of which is a full service investment bank and the other an independent auto finance company. The company also owns equity interests in operating businesses and investment partnerships which are accounted for under the equity method of accounting, including a broker-dealer engaged in making markets and trading of high yield and special situation securities, land based contract oil and gas drilling, real estate activities and development of a copper mine in Spain. In 2008 Leucadia generated approximately $1 billion in revenues. LYONDELL CHEMICAL: Houston Refining Unit Sues Koch for $11.3MM -------------------------------------------------------------- Houston Refining, LP, one of the debtor-affiliates of bankrupt Lyondell Chemical Company, has filed a complaint before the U.S. Bankruptcy Court for the Southern District of New York seeking to recover $11,339,925 against Koch Supply & Trading, LP, which payment became due on January 9, 2009. In December 2008, the Debtor and Koch Supply entered into a Feedstock Sale Agreement wherein the Debtor sells reformer feed to Koch Trading, and Koch Supply must pay for the reformer fee within three days of receipt of the invoice. The Debtor and Koch Supply also entered into: * a Refined Products Sale Agreement in which the Debtor sells to Koch Trading nonoxygenated conventional gasoline and Koch Supply is required to pay for the non-oxygenated conventional gasoline within two days of receipt of the invoice; and * two Feedstock Sale Agreements wherein the Debtor sells high sulfur vacuum gas oil. Under the Feedstock Agreements, Koch Supply must pay for the vacuum oil gas within three days of receipt of each invoice. The total amount due and owing under the invoices for: (1) the Feedstock Sale Agreement through the Petition Date is $2,117,800; (2) the Refined Products Sale Agreement which became due on January 15, 2009, is $3,970,129; (c) the Feedstock Sale Agreements, as of January 16, 2009, is $5,222,924. Koch Supply is also obligated to the Debtor for a $29,071 demurrage fee that accrued as of October 10, 2008, and which remained unpaid. To the extent the Agreements are executory pursuant to Section 365 of the Bankruptcy Code, the agreements have neither been assumed nor rejected, and the Debtor continues to perform under the agreements, asserts Andrew M. Troop, Esq., at Cadwalader, Wickersham & Taft LLP, in New York. The Debtor, thus, reserves its rights and claims under the Agreements, including for any product delivered to Koch Supply under the agreements since the Petition Date. Mr. Troop says that the total unpaid aggregate amount due and owing to the Debtor from Koch Supply is $11,339,925. The total amount is not contingent or subject to dispute. He asserts that Koch Supply has refused, and despite demand, continues to refuse, to pay the Debtor. He adds that the amount owed to the Debtor for the Products delivered through the Petition Date and for the Demurrage Fee is considered matured debt under Section 542(b) and Koch Supply is in violation of Section 542(b) for failing to pay the matured debt to the Debtor. He says that the Agreements, which give rise to Koch Supply's obligation to pay the Demurrage Fee, constitute valid, binding and enforceable contracts between the Debtor and Koch Supply. Mr. Troop further notes that Koch Supply's failure and refusal to remit to the Debtor the amounts due under the Agreements constitutes a breach of each of those agreements. Accordingly, the Debtors ask for judgment: (i) declaring that the Debtor is owed a matured debt for $11,339,925 by Koch Supply and that Koch Supply is in violation under Section 542(b) because it has not paid its debt to the Debtor; (ii) directing that Koch Supply turn over to the Debtor the amount it owes to the Debtor; (iii) declaring that Koch is in violation of Sections 362(a)(3) and 362(a)(7); and (iv) awarding the Debtor its costs and expenses, including attorneys' fees incurred in order to obtain compliance by Koch Supply with its obligations under 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: Sues Air Products on Attempt to Get Payment -------------------------------------------------------------- Lyondell Chemical Company filed a complaint with the U.S. Bankruptcy Court for the Southern District of New York against Air Products L.P., Air Products LLC, Air Products Chemicals Europe, B.V., and Air Products and Chemicals, Inc., for these parties' improper attempt to collect settlement payments under a settlement agreement with non-debtor affiliate Lyondell Chimie TDI, SCA, and its managing entities, Lyondell France Holdings SAS and Lyondell Chimie France SAS. Air Products and Olin Corporation entered into an agreement in which Olin purchased from Air Products dinitrotoluene or DNT and processed the DNT in Olin's plant in Lake Charles, Louisiana. The DNT Agreement, including the ownership of the Lake Charles Facility, was assigned to ARCO Chemical Company and then to Lyondell. In 2005, Air Products and Air Products Europe and Lyondell and Lyondell Chimie entered into an agreement wherein Lyondell and Lyondell Chimie purchased toluenediamine or TDA used in Lyondell Chimie's manufacture of product at its Pont De Claix, France facility from Air Products and Air Products Europe. Subsequent to Lyondell's announcement of ceasing its (i) operations at Lake Charles Facility and (ii) purchase of DNT from Air Products, Air Products filed a lawsuit against Lyondell in the Supreme Court of New York alleging that Lyondell had repudiated the DNT Agreement and owed Air Products liquidated damages under the DNT Agreement. Lyondell denied Air Products' allegations and asserted a counterclaim alleging that Air Products owed Lyondell damages for breach of the DNT Agreement. The Settlement Agreement In June 2007, Lyondell and Air Products settled the DNT Lawsuit by entering into a settlement agreement which provides, among others, mutual releases under the DNT Lawsuit and the Counterclaim. Lyondell also agreed to make initial settlement payment to Air Products for $49,000,000 on June 8, 2007. Lyondell is required to make four additional settlement payments for: (i) $10,000,000 on January 31, 2008, (ii) $10,000,000 on January 30, 2009, (iii) $10,000,000 on January 29, 2010, and (iv) $10,000,000 on January 31, 2011. Consequently, Lyondell and Air Products terminated the DNT Agreement. Lyondell, Air Products, and Lyondell Chimie also amended the TDA Contract in which Air Products and Air Products Europe are required to pay a credit volume rebate if ever the TDA purchased by Lyondell and Lyondell Chimie is greater than 25,000 metric tons. After its payment of the Initial Settlement Amount, Lyondell filed a stipulation of dismissal with respect to the DNT Lawsuit. Lyondell also made to Air Products the 2008 Additional Settlement Payment, which has been reduced to $6,891,110 based on a rebate owed to Lyondell. On January 5, 2009, Air Products LLC issued an invoice to LyondellBasell Industries AF S.C.A. regarding the Additional Settlement Payment scheduled for January 30, 2009, for $7,639,930, which has been reduced pursuant to the rebate under the TDA Amendment. Lyondell informed Air Products that it cannot pay the 2009 Additional Settlement Payment due to its bankruptcy case. Without informing Lyondell Chimie, Air Products filed a request for garnishment of credits in the Court of First Instance of Aix en Provence, Bouche du Rhone, France, seeking to garnish Lyondell Chimie's assets for $27,639,930 because Lyondell Chimie was jointly obligated to pay the 2009 Additional Settlement Payment as well as the future additional settlement payments. In separate requests, Air Products also sought garnishment of Lyondell Chimie's parent companies' assets for $27,639,930 asserting that their being general partners to Lyondell Chimie jointly obligated them to the 2009 and future settlement payments. By garnishment orders in February 2009, the Court of First Instance authorized Air Products to garnish all amounts held by Lyondell Chimie up to $27,639,930 with Citibank International PLC in Paris, France and the Lyondell Chimie Parents up to $27,639,930 with Citibank and Bank of America in Paris, France. At the time of the Garnishment Orders served upon Citibank, (i) Lyondell Chimie's account with EUR196,961, Lyondell Chimie France SAS' account with EUR287,973 and Lyondell France Holdings SAS' account with EUR46,708 have been frozen and inaccessible. Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, points out that given the non-involvement of Lyondell Chimie and the Lyondell Chimie Parents to the DNT Lawsuit, the Settlement Agreement or the Additional Settlement Payments, Air Products improperly seeks to avoid the effect of the automatic stay by obtaining payment from Lyondell Chimie and the Lyondell Chimie Parents, instead of from the Debtors. Similarly, Air Products' initiation of the Garnishment Requests attempts to improperly control assets of the Debtors' estates in violation of the automatic stay and the order enforcing the automatic stay in the Chapter 11 proceedings, he argues. Applicable non-bankruptcy law precludes collection of a joint debt in an action against a single party, Mr. Ellenberg asserts. Accordingly, the Debtors are entitled to a preliminary and permanent injunction enforcing the automatic stay under Section 362 of the Bankruptcy Code to enjoin Air Products from continuing to garnish the assets of, or from seeking to obtain a final judgment against, Lyondell Chimie and the Lyondell Chimie Parents based on the Settlement Agreement, he says. Mr. Ellenberg stresses that Lyondell Chimie and the Lyondell Chimie Parents do not possess assets sufficient to satisfy the Garnishment Orders, and to fund a defense to any actions taken by Air Products to obtain or pay a final judgment with respect to the Settlement Agreement. If Air Products is permitted to pursue its garnishment actions, it would result to Lyondell Chimie and Lyondell Chimie Parents' involuntary foreign insolvency filings, which could result to liquidation. The potential loss of control to a foreign liquidator would be disastrous to the Debtors' reorganization efforts, Mr. Ellenberg asserts. Moreover, if Air Products is permitted to pursue their claims against Lyondell Chimie and the Lyondell Chimie Parents, a finding of liability in Air Products' favor would likely give rise to contribution and indemnity claims by Lyondell Chimie and the Lyondell Chimie Parents against the Debtors. Any valid claims of Air Products can be dealt with in the course of the Debtors' Chapter 11 cases, he says. For those reasons, Mr. Ellenberg continues, any harm suffered by Air Products is greatly outweighed by the harm suffered by the Debtors in the absence of an injunction. According, Lyondell asks the Court for: (a) a declaration that it is solely responsible for making payments under the settlement agreement or that Air Products cannot pursue settlement amounts due under the Settlement Agreement in an action in which the Debtors are not a party; and (b) an order granting a preliminary and permanent injunction pursuant to Sections 362 and 105, enjoining Air Products from taking any further actions to attach the assets of, or to obtain a final judgment against Lyondell Chimie and the Lyondell Chimie Parents concerning the Settlement Agreement. 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: To Cease Filing Reports with the SEC ------------------------------------------------------- Gerald O'Brien, vice president and general counsel of Lyondell Chemical Co., disclosed in a regulatory filing with the Securities and Exchange Commission that Lyondell does not have any securities registered under Section 12 of the Securities Exchange Act of 1934 and is not required to file reports under Section 13 or Section 15(d) of the Exchange Act. Lyondell has previously voluntarily filed reports required under the Exchange Act, he says. However, the Company has determined that "it will cease making such filings." Information which the Company determines to make publicly available in the future will be made available on the Company's Web site at http://www.lyondellbasell.comor in the Company's and its Debtor Affiliates' filings with the Bankruptcy Court, Mr. O'Brien notes. 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: ConocoPhillips Appeals Injunction Order ---------------------------------------------------------- ConocoPhillips Company informed the U.S. Bankruptcy Court for the Southern District of New York in the bankruptcy cases of Lyondell Chemical Company and its debtor-affiliates that it will take an appeal to the U.S. District Court for the Southern District of New York from Judge Robert Gerber's order entered on February 26, 2009, granting preliminary injunction in favor of the Debtors' non-debtor affiliates, and Judge Gerber's bench decision regarding the Injunction Order. The Bankruptcy Court granted the preliminary injunction sought by Lyondell Chemical Company preventing certain creditors from proceeding against its parent company, LyondellBasell Industries AF S.C.A. Judge Gerber enjoined the parties from commencing involuntary insolvency proceedings in foreign countries -- against LBI until April 27, 2009, or for a period of 60 days. George A. Davis, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, asserts that pursuant to the U.S. Court of Appeals for the Second Circuit's decision in In re Lomas Financial Corporation, 932 F. 2d 147, the Injunction Order is a final order and appealable as of right under Section 158 of the Judiciary and Judicial Procedures Code because no further hearing is contemplated with respect to the Debtors' entitlement to the Injunction Order. To the extent that the Injunction Order is an extension of Section 362 of the Bankruptcy Code, it is analogous to a permanent injunction and thus final, he said. The Second Circuit also opined that to the extent the Injunction Order is issued under Section 105, it is appealable as a final order of limited duration, he added. In an official statement, LyondellBasell said the injunction would provide it with time to evaluate all available options for protecting its worldwide businesses, and would allow it to move forward with the reorganization of its worldwide businesses without the threat of having assets eroded by certain claims against entities outside of bankruptcy protection. The injunction prevents various creditors from enforcing pre- petition guarantees that were issued by LyondellBasell Industries AF S.C.A. for obligations of entities included in Chapter 11 protection. The injunction also prevents holders of record and beneficial owners of the 8 3/8% Senior Notes due 2015 issued by LyondellBasell Industries AF S.C.A. from, among other things, taking any action to accelerate the maturity of these notes. Judge Gerber held that some of the damage the Debtors fear is a matter of serious concern. He held that an injunction for 60 days should be sufficient to permit the filing of voluntary insolvency proceedings in the U.S. or abroad, to protect the Debtors from the disruption of their integrated European operations and a default on their DIP Financing facilities. Judge Gerber added that the 60-day injunction will result in little, if any, material prejudice to the enjoined parties. Judge Gerber pointed out that in light of LBI's inability to pay the principal and interest that would be due under the 2015 Notes upon acceleration, Wilmington Trust, the indenture trustee or the 2015 Noteholders could attempt to commence involuntary insolvency proceedings against LBI in Luxembourg and the Netherlands. Similarly, Judge Gerber said, LBI lacks the liquid assets to defend itself from any guaranty claims. In separate declarations, Marc Mehlen, Esq., the Debtors' counsel in Luxembourg, the Debtors' Dutch counsel, Jelle Hoflan, Esq., had stated that it's entirely possible (i) under Luxembourg law, that as a result of the attachment order obtained by ConocoPhillips in the Netherlands and the Guaranty Claims against LBI, insolvency proceedings against LBI could be opened in Luxembourg, either as a result of an involuntary proceeding commenced by an LBI creditor or a filing made by the general manager of LBI, and (ii) that as a result of the attachment order obtained by ConocoPhillips in the Netherlands, an involuntary proceeding against LBI could shortly be commenced in the Netherlands. Judge Gerber held that there is no assurance that the DIP Lenders would or would not waive a default resulting from an insolvency proceeding of the Non-Debtor Affiliates. Judge Gerber is sure however that if the DIP Lenders exercise their rights upon a default, the Debtors would have a resulting loss of liquidity that would force them to liquidate their business, lay off thousands of employees, and shut down their facilities. As to the issue of bond posting, Judge Gerber explained that the brief duration of the preliminary injunction and the lack of likelihood that either the Guaranty Claimants or the 2015 Noteholders could recover anything during the 60-day period in which they would be enjoined, leads him to believe that the chances of those parties suffering any injury that they should be protected against are remote. Subject to the parties' right to be heard on fine-tuning the injunction, Judge Gerber will also be enjoining, as conditions to granting the requested injunction: (i) the transfer or encumbrance by LBI of the Basell Funding Stock; (ii) the transfer, encumbrance, release, settlement, compromise of LBI's receivables; and (iii) payments outside of the ordinary course. Judge Gerber ruled that if Access Industries and its affiliates fail to file with the Court immediately, tolling agreements with respect to any causes of action that might exist, relating to avoidance actions from transfers by LBI to Access Group, any defendant may seek to vacate the preliminary injunction on three business-day notice. Judge Gerber permitted ConocoPhillips to take necessary actions to perfect the security interest that might result from its attachment, as would be permitted under Chapter 11 and Section 546(b); provided that ConocoPhillips may not take any steps to enforce any lien or attachment that would result, or intercept the transmission of any cash or assets to enforce its rights. In the event of any LBI insolvency proceeding under the laws of U.S. or any foreign country, Judge Gerber will not relieve ConocoPhillips of any exposure it might have relating to the avoidance of preferences or preferential transfers. Moreover, the injunction will not prevent any consensual workout of LBI debt, or filing of a voluntary reorganization plan. The injunction was granted following a hearing before Judge Gerber on February 23, 2009. Prior to the hearing, additional objections were filed by ConocoPhillips Company, Deutsche Bank AG, London Branch, and Nalco Company. Delia J. White and Steven Bennett also filed declarations in support of Centerpoint Energy Services, Inc.'s and Cokinos Natural Gas Co.'s objections to the injunction. However, Judge Gerber overruled all objections to the Injunction Motion. The Court had previously issued a temporary restraining order on February 6, which was subsequently extended on February 13 and then again on February 23. A full-text copy of Judge Gerber's bench decision on the Debtors' injunction request is available for free at: http://bankrupt.com/misc/Lyondell_InjunctionRuling.pdf Vineet Bhatia, Esq., at Susman Godfrey L.L.P., in Houston, Texas, proposed counsel to the Debtors, submitted to the Court on February 26, 2009, a notice voluntarily dismissing the Debtors' complaint with respect to these defendants: * Anadarko Energy Services Company * Houston Pipe Line Company LP * Deutsche Asset Management * Koch Supply & Trading LP * Koch Supply & Trading Sarl * Analytic Investors LLC * Provident Investment Counsel Inc. * The Midland Co. * Sonatrach Mr. Bhatia says that the dismissed Defendants have not filed an answer or motion for summary judgment. On March 3, 2009, a notice voluntarily dismissing the Debtors' complaint with respect to Eurizon Capital SGR SpA was also filed. Parties Enter into Tolling Agreement In compliance with the Injunction Order, the Debtors, LBI and Access Group entered into a tolling agreement with respect any and all causes of action that might exist, on behalf of either LBI or its creditors, arising under either state law or federal law permitting the avoidance of any preferential or fraudulent transfers by LBI to any member of Access Group. The parties stipulate that: (A) all applicable statutes of limitations and other time-based defenses to Avoidance Actions are tolled as of February 26, 2009, to and including April 27, 2009, as to any Avoidance Actions which would not have been barred had any Avoidance Actions been filed in court as of February 26, 2009. (B) the time elapsed between February 26, 2009, and April 27, 2009, will be excluded from any computation of time for purposes of any time-based argument or defense based on statutes of limitations, laches, estoppel, waiver, and any other time-based defense or right in an Avoidance Action. The running of any statute of limitations applicable to any Avoidance Action will commence again after April 27, 2009, unless there is an extension of the tolling period. Parties Respond to Injunction Bench Ruling In separate letters, Columbus Hill Overseas Ltd. and Columbus Hill Partners, L.P., parties to Intercreditor Agreements with the Debtors, and Wilmington Trust Company, trustee to the 2015 Notes and indentures with the Debtors, wrote to Judge Gerber to clarify certain points made in the Injunction Bench Ruling and the Injunction Order. Columbus Hill and Wilmington note that the Injunction Bench Ruling cited instances in which the 2015 Noteholders' rights vis-a-vis other creditors, and payments to the 2015 Noteholders that would be subject to turnover. Columbus Hill and Wilmington say that those instances are based on the 2007 Intercreditor Agreement and the Indenture and do not affect the Injunction Bench Ruling or the Injunction Order. However, in order to preserve their rights, Columbus Hill and Wilmington ask the Court to clarify and to add in the Injunction Bench Ruling and Injunction Order a reservation of rights with respect to the 2015 Intercreditor Agreement, 2007 Intercreditor Agreement and the Indenture and all potential claims under applicable law. 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: Reject Lease Agreements, 3 Pipeline Pacts ------------------------------------------------------------ Pursuant to Sections 105, 365 and 502(b)(6) of the Bankruptcy Code, Lyondell Chemical Company seeks authority from the U.S. Bankruptcy Court for the Southern District of New York to reject five unexpired non-residential property leases: * a lease agreement between Evening Star Associates and Lyondell Chemical Company for office space in Washington, D.C.; * a lease agreement between Monticello Limited and Lyondell Chemical Europe Inc. for office space in Windsor, England; * a lease agreement between Regus Schuman BVBA and Lyondell Chemical Products Europe LLC for office space in Brussels, Belgium; * a lease agreement between Shav Associates c/o Alfieri Property Mgmt. and Millennium America Inc for office space in Red Bank, New Jersey; and * a sublease agreement between Log-Net, Inc. and Millennium America Inc. for the Red Bank Lease. The Leases will expire on these dates: Lease Date Rent ----- ---- ---- Washington Lease December 31, 2009 $8,721/month Red Bank Lease March 31, 2009 $53,993/month Windsor Lease October 24, 2009 EUR23,564/quarter Brussels Lease December 31, 2009 EUR2,199/month Red Bank SubLease March 30, 2009 $40,770/month All rents are payable in advance, while some of the leases assert additional rent for operating expenses and taxes or late payments. The Red Bank Sublease results in a loss of $13,233 each month for the Debtors, Andrew M. Troop, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, discloses. He relates that the premises under the Windsor Lease were vacated before the Petition Date. The premises under the Brussels Lease and Washington Lease are no longer being used by the Debtors with the remaining furniture being removed. Moreover, Millennium America already vacated the premises under the Red Bank Lease when it entered into the Red Bank Sublease, but Log-Net continues to occupy the sublet premises. Upon review, the Debtors determined that the Leases are no longer necessary to their ongoing business operations or efforts to reorganize successfully. Moreover, the Debtors' ongoing obligations under the Leases impose an undue burden on their estates. The Debtors seek to reject the (i) Windsor Lease nunc pro tunc to January 6, 2009; (ii) Brussells Lease and Washington Lease as of the date of the approval of the Motion or nunc pro tunc to the date on which the Debtors provide the landlords to the Leases notice of vacating the premises; and (iii) Red Bank Lease and Sublease as of the date of the approval of the Motion. The Debtors also ask the Court that, if any of the Debtors have deposited amounts with a counterparty to any Lease Agreement as a security deposit, or if a counterparty to any Lease owes any of the Debtors any amount pursuant to the Lease, the counterparty will not be permitted to set off or otherwise use the amounts from the deposit or other similar arrangement, or other amount owed to Debtors, without the prior order of the Court. Debtors Reject 3 Pipeline Agreements The Debtors also seek the Court's authority to reject three pipeline agreements, nunc pro tunc to January 6, 2009: * a lease agreement between Equistar Chemicals LP and ARCO Midcon LLC, and its related documents; * an option agreement between Equistar and ARCO and its related documents; and * an operating agreement between Equistar and ARCO and its related documents. Mr. Troop relates that the Debtors' operations include a vast network of production facilities and pipelines by which they produce and transport chemical products, including ethylene, propylene, butadiene and benzene. In order to transport the ethylene between their own facilities, as well as to customers, the Debtors lease pipelines throughout their areas of operation. Equistar has entered into certain agreements with ARCO regarding a certain pipeline. The Lease Agreement and Option Agreement expire on December 31, 2023, while the Operating Agreement expires on December 31, 2009. Mr. Troop discloses that the Pipeline Agreements require Equistar to pay between $210,000 and $230,000, on a monthly basis, to ARCO, of which $205,000 is for payments under the Lease Agreement and the remaining portion for variable payments under the Operating Agreement of about $5,000 per month. The Debtors determined that the Agreements are not necessary to their ongoing business operations or are burdensome to their estates and the rejection of the Agreements will enhance their reorganization efforts and reduce further cash demands. The Debtors further ask that if any of them deposited amounts with ARCO as a security deposit or pursuant to another similar agreement or if ARCO owes any of the Debtors any amount pursuant to the Pipeline Agreements or other agreements between the same parties, ARCO will not be permitted to set off or use the amounts from the deposit or other amount owed to the Debtors, without prior Court order. 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: Receives Interim OK to Access $62MM Facility ----------------------------------------------------------------- Magna Entertainment Corp. and certain of its subsidiaries, obtained interim approval from the U.S. Bankruptcy Court for the District of Delaware to: i) access debtor-in-possession financing up to an aggregate amount of $62.5 million ; ii) use cash collateral; iii) grant security interests and priority liens to the Debtors' prepetition lender; and iv) grant adequate protection to the Debtors' prepetition secured lenders. The Debtors and MID Island sf. are parties to a (i) Credit Agreement dated Dec. 1, 2008, (ii) Bridge Loan Agreement dated Sept. 12, 2007, (iii) Loan Agreement dated July 22, 2005, (iv) Third Amended and Restated Gulfstream Loan Agreement dated Dec. 22, 2006. The loan agreements are secured by either first or more junior liens in substantially all of the Debtors' assets. As of the petition date, the aggregate principal amounts outstanding under the (i) 2008 Loan Agreement was approximately $51.8 million; (ii) Bridge Loan Agreement was $125.0 million; (iii) Remington Construction Loan Agreement was $22.8 million; and Gulfstream Agreement was $169.2 million. Salient terms of the DIP financing agreement are: Borrower: Magna Entertainment Corp. Guarantors: The Santa Anita Companies, Inc. Southern Maryland Agricultural Association Los Angeles Turf Club, Incorporated MEC Land Holdings (California) Inc. Pacific Racing Association MEC Maryland Investments, Inc. Gulfstream Park Racing Association Inc. MEC Dixon, Inc. 30000 Maryland Investments LLC Laurel Racing Assoc., Inc. GRPA Commercial Enterprises Inc. GPRA Thoroughbred Training Center, Inc. Pimlico Racing Association, Inc. MEC Holdings (USA) Inc. Remington Park, Inc. Prince George's Racing, Inc. Sunshine Meadows Racing, Inc. Thistledown, Inc. Southern Maryland Racing, Inc. The Maryland Jockey Club of Baltimore City, Inc. Maryland Jockey Club, Inc. AmTote International, Inc. Laurel Racing Association Limited Partnership Lambertson Truex, LLC DIP Lender: MID Island sf. Security: The DIP Credit Facility, Advances and all other obligations will be secured on the Collateral as: (i) to the extent of any unencumbered assets of the Debtor or any of the guarantor, the DIP liens will be first priority liens, subject only to the Carved- Out Expenses, provide, however, that the unencumbered assets will not include (a) any proceeds or property recovered in respect of avoidance actions; and (b) property that has been consigned to the Debtors and properly perfected under the uniform commercial code, and with required notice to the prepetition secured lenders; (ii) as to any assets of the Debtor or any guarantor in which the DIP lender or any subsidiary other affiliate thereof has a perfected first priority lien, the DIP liens will be the first priority consensual priming liens, subject only to the Carve-out Expenses and permitted liens; and (iii) as to all other assets of the Debtor and guarantors that are subject to non-primed liens, the DIP liens will be junior to any non-primed liens and subject to the Crave-Out Expenses up to the carve-Out Amount. Obligations of the Debtor and guarantors under the DIP Credit Facility will be ranked as super-priority administrative expense claims and senior to all administrative expenses, subject only to the Carve-Out. DIP Facility: Secured non-revolving loans in an aggregate principal amount not to exceed $62.5 million. The commitment will be made available in two tranches: (i) up to $21.7 million from time to time from the date of the entry of the interim order up to the maturity date and (ii) up to $40.8 million from time to time from the date of the entry of the final order up to the maturity date. Carve-Out: Professional Fees and disbursements of the Debtors and statutory committees incurred and allowed on and after the petition date and prior to the occurrence of an event of default plus payment of fees in an aggregate amount not to exceed $4,500,000. Interest: Non-Default Interest Rate: LIBOR plus 12.00% per annum Default Interest Rate: Applicable rate plus 2.00% per annum Fees: Arrangement Fee: (i) 3.00% of the amount of Tranche 1 Credit Commitment to be paid after entry of the interim order from the initial Tranche 1 advance and (ii) 3.00% of the Tranche 2 Credit Commitment to be paid after the entry of the final order. Commitment Fee: 1.00% per annum of the unutilized amount under the DIP Credit Commitment to be paid on the last Banking Day of each fiscal quarter and on the maturity date. Maturity: Earliest to occur of: (i) 6 months from the date the of the DIP Credit Agreement, (ii) 45 days after the date on which the Chapter 11 cases were filed with the Bankruptcy Court if the by date no final order has been entered, (iii) the acceleration of all or any portion of the obligations, and (iv) the effective date of the confirmed plan of reorganization; provided, however, that, in connection with the subsection (i) above, the maturity date will be automatically extended for one month in the event that a Chapter 11 plan has been confirmed by the Bankruptcy Court, but has not yet been consummated. The DIP agreement contains customary and appropriate events of default. As adequate protection for the prepetition MID secured lender's prepetition secured loans will include (i) replacement liens subject only to the (A) DIP Liens, (B) the permitted liens, and (C) the Carve-Out, (ii) superiority administrative claims that will be junior to the DIP superiority claims and the Carve-Out, (iii) payment of its reasonable legal fees and expenses, and (iv) payment of all interest, fees and expenses on account of prepetition loan obligation owing to the prepetition MID secured lender. Adequate protection for the other secured lenders' prepetition secured loans will include (i) replacement liens subject to the (A) DIP liens, (B) the permitted liens, and (C) the Carve-Out, (ii) payment of interest, fees and expenses on account of prepetition loan obligations owing to the oether secured lenders. A full-text copy of the Debtors' debtor-in-possession credit, guaranty and security agreement dated March 5, 2009, is available for free at: http://bankrupt.com/misc/Magna_DIP_Agreement.pdf The Court also authorized the Debtors to access the cash collateral their prepretition secured lenders as: MID Island sf., PNC Bank National Association, Wells Fargo Bank N.A., Bank of Montreal acting through its Chicago lending office and BMO Nesbitt Burns, Inc. and SunTrust Bank. The Debtors will use the cash collateral for working capital needs and fund the Debtors' reorganization efforts. About Magna Entertainment Based in Aurora, Ontario, Magna Entertainment Corp. 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. * * * As reported by the Troubled Company Reporter on March 2, 2009, Magna received written notice from its lenders that Pimlico Racing Association, Inc., Laurel Racing Association Limited Partnership, Laurel Racing Assoc., Inc. and The Maryland Jockey Club of Baltimore City, Inc., each a subsidiary of MEC, are in default under the PNC Bank, National Association loan agreement for failure to comply with certain financial covenants relating to the financial position and results of operation of MJC and related entities. PNC Bank informed MEC that it has chosen not to exercise its rights and remedies under such loan agreement at this time as a consequence of this event of default, but may choose to do so at any time in the future without any further written notice. MEC also has not met certain financial covenants under its loan agreements with Wells Fargo Bank, National Association and a Canadian chartered bank with which MEC has a US$40 million credit facility. The lenders have not exercised their default-related rights under their respective loan agreements. As reported in the TCR on March 20, 2008, Ernst & Young LLP in Toronto, Canada, expressed substantial doubt about Magna Entertainment Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years Dec. 31, 2007, and 2006. The auditing firm pointed to the company's recurring operating losses and working capital deficiency. On February 19, 2009, MI Developments Inc., the Company's controlling shareholder, decided not to proceed with its reorganization proposal, which includes the spin-off of MEC to MID's existing shareholders. In accordance with the terms of certain of MEC's loan agreements, the maturity date of the first tranche of the new loan that a subsidiary of MID made available to MEC on December 1, 2008, in connection with the reorganization proposal; the maturity date of the bridge loan from MID Lender; and the deadline for repayment of US$100 million under the Gulfstream project financing facility from MID Lender has been accelerated to March 20, 2009. The maturity date of the second tranche of the New Loan has already been accelerated to May 13, 2009. As of February 18, 2009, there is roughly US$48.5 million outstanding under the first tranche of the New Loan, roughly US$0.7 million outstanding under the second tranche of the New Loan and roughly US$126.2 million outstanding under the bridge loan. In accordance with its terms, the maturity date of MEC's US$40 million credit facility with a Canadian chartered bank will also accelerate to March 5, 2009. If MEC is unable to repay its obligations when due or satisfy required covenants in its loan agreements, substantially all of its other current and long-term debt will also become due on demand as a result of cross-default provisions within loan agreements, unless MEC is able to obtain waivers, modifications or extensions. In the event MEC is unsuccessful in its efforts to raise additional funds, through an alternative transaction with MID, assets sales, by taking on additional debt or by some other means, MEC will not be able to meet such obligations. On March 2, 2009, The Toronto Stock Exchange indicated that the Listings Committee of the TSX determined to delist the Company's Class A Subordinate Voting Shares effective at the close of market on April 1, 2009. The delisting was imposed for failure by MEC to meet the continued listing requirements of the TSX, as detailed in Part VII of The TSX Company Manual. MAGNA ENTERTAINMENT: Taps Weil Gotshal as Lead Bankruptcy Counsel ----------------------------------------------------------------- Magna Entertainment Corp. and certain of its subsidiaries, seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Weil, Gotshal & Manges LLP as counsel. Weil Gotshal will: a) take all necessary action to protect and preserve the Debtors' estates, 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; b) prepare on behalf of the Debtors, as debtors-in-possession, all necessary motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtors' estates; c) take all necessary actions in connection with a Chapter 11 plan and related disclosure statement and all related documents, and further actions as may be required in connection with the administration of the Debtors' estates; and d) perform all other necessary legal services in connection with the prosecution of these Chapter 11 cases. The Debtors relate that Weil Gotshal and Richards, Layton & Finger, P.A., the Debtors' co-counsel, have discussed a division of responsibilities regarding the representation and will make every effort to avoid and minimize duplication of services in these Chapter 11 cases. Brian S. Rosen, member of Weil Gotshal, tells the Court that the hourly rates of professionals are: Members/Counsel $650 - $950 Associates $335 - $640 Paraprofessionals $150 - $290 Mr. Rosen assures the Court that WG&M is a "disinterested person' as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Rosen 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 Magna Entertainment Based in Aurora, Ontario, Magna Entertainment Corp. 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. * * * As reported by the Troubled Company Reporter on March 2, 2009, Magna received written notice from its lenders that Pimlico Racing Association, Inc., Laurel Racing Association Limited Partnership, Laurel Racing Assoc., Inc. and The Maryland Jockey Club of Baltimore City, Inc., each a subsidiary of MEC, are in default under the PNC Bank, National Association loan agreement for failure to comply with certain financial covenants relating to the financial position and results of operation of MJC and related entities. PNC Bank informed MEC that it has chosen not to exercise its rights and remedies under such loan agreement at this time as a consequence of this event of default, but may choose to do so at any time in the future without any further written notice. MEC also has not met certain financial covenants under its loan agreements with Wells Fargo Bank, National Association and a Canadian chartered bank with which MEC has a US$40 million credit facility. The lenders have not exercised their default-related rights under their respective loan agreements. As reported in the TCR on March 20, 2008, Ernst & Young LLP in Toronto, Canada, expressed substantial doubt about Magna Entertainment Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years Dec. 31, 2007, and 2006. The auditing firm pointed to the company's recurring operating losses and working capital deficiency. On February 19, 2009, MI Developments Inc., the Company's controlling shareholder, decided not to proceed with its reorganization proposal, which includes the spin-off of MEC to MID's existing shareholders. In accordance with the terms of certain of MEC's loan agreements, the maturity date of the first tranche of the new loan that a subsidiary of MID made available to MEC on December 1, 2008, in connection with the reorganization proposal; the maturity date of the bridge loan from MID Lender; and the deadline for repayment of US$100 million under the Gulfstream project financing facility from MID Lender has been accelerated to March 20, 2009. The maturity date of the second tranche of the New Loan has already been accelerated to May 13, 2009. As of February 18, 2009, there is roughly US$48.5 million outstanding under the first tranche of the New Loan, roughly US$0.7 million outstanding under the second tranche of the New Loan and roughly US$126.2 million outstanding under the bridge loan. In accordance with its terms, the maturity date of MEC's US$40 million credit facility with a Canadian chartered bank will also accelerate to March 5, 2009. If MEC is unable to repay its obligations when due or satisfy required covenants in its loan agreements, substantially all of its other current and long-term debt will also become due on demand as a result of cross-default provisions within loan agreements, unless MEC is able to obtain waivers, modifications or extensions. In the event MEC is unsuccessful in its efforts to raise additional funds, through an alternative transaction with MID, assets sales, by taking on additional debt or by some other means, MEC will not be able to meet such obligations. On March 2, 2009, The Toronto Stock Exchange indicated that the Listings Committee of the TSX determined to delist the Company's Class A Subordinate Voting Shares effective at the close of market on April 1, 2009. The delisting was imposed for failure by MEC to meet the continued listing requirements of the TSX, as detailed in Part VII of The TSX Company Manual. MAGNA ENTERTAINMENT: Wants Miller Buckfire as Investment Banker --------------------------------------------------------------- Magna Entertainment Corp. and certain of its subsidiaries seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Miller Buckfire & Co., LLC, as investment banker and financial advisor. Miller Buckfire will provide necessary investment banking and financial advisory services. Specifically, the firm will: a) familiarize with the assets and operations of the Debtors; b) analyze the current liquidity and projected cash flows of the Debtors; c) examine and seek to implement potential strategic alternatives to address the liquidity constraints and covenant issues facing the Debtors; d) assist the Debtors in developing and evaluating alternative means to meet near-term liquidity requirements; e) develop materials for, and participate in numerous meetings of the Debtors' board of directors; f) assist the Debtors and their professionals in developing the budget used for purposes of securing debtor-in- possession financing; and g) assist the Debtors in structuring and negotiating the debtor-in-possession financing. Marc D. Puntus, managing director at Miller Buckfire, tells the Court that the firm will be paid: a) a monthly advisory fee of $150,000 provided that 50% of all monthly advisory fees paid beginning in the 7th month of its engagement will be credited against any restructuring transaction fee. b) a restructuring transaction fee, contingent upon the consummation of a restructuring and payable at the closing thereof, equal to $5,000,000, provided, however, that, under certain circumstances, the restructuring transaction fee payable at closing will be equal to $2,500,000. c) a sale transaction fee, payable if the Debtors consummate a sale, and equal to $1.0% of the aggregate consideration, payable upon the closing of the sale; provided that 50% of any sale transaction fee will be credited against the restructuring transaction fee. d) a financing fee, payable if the Debtors consummate any financing and equal to: i) 1.0% of the gross proceeds of any indebtedness issued that is secured by a first lien; ii) 2.0% of the gross proceeds of any indebtedness issued that is secured by a second or more junior lien; iii) 3.0% of the gross proceeds of any indebtedness issued that is unsecured; and iv) 4.0% of the gross proceeds of any equity or equity- linked securities or obligations issued. Mr. Puntus adds that Miller Buckfire will not be paid any financing fee in connection with a debtor-in-possession financing or any other financing provided by MI Developments, Inc. or its affiliates. Prior to the petition date, Miller Buckfire received total monthly fees of $750,000 and 48,747 for reimbursement of expenses incurred from Oct. 23, 2008, through the petition date and for future expenses. Miller Buckfire also received a retainer of $150,000. In total, Miller Buckfire received $948,747 prior to the petition date. Mr. Puntus assures the Court that Miller Buckfire is a "disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code. About Magna Entertainment Based in Aurora, Ontario, Magna Entertainment Corp. 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. * * * As reported by the Troubled Company Reporter on March 2, 2009, Magna received written notice from its lenders that Pimlico Racing Association, Inc., Laurel Racing Association Limited Partnership, Laurel Racing Assoc., Inc., and The Maryland Jockey Club of Baltimore City, Inc., each a subsidiary of MEC, are in default under the PNC Bank, National Association loan agreement for failure to comply with certain financial covenants relating to the financial position and results of operation of MJC and related entities. PNC Bank informed MEC that it has chosen not to exercise its rights and remedies under such loan agreement at this time as a consequence of this event of default, but may choose to do so at any time in the future without any further written notice. MEC also has not met certain financial covenants under its loan agreements with Wells Fargo Bank, National Association and a Canadian chartered bank with which MEC has a US$40 million credit facility. The lenders have not exercised their default-related rights under their respective loan agreements. As reported in the TCR on March 20, 2008, Ernst & Young LLP in Toronto, Canada, expressed substantial doubt about Magna Entertainment Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years Dec. 31, 2007, and 2006. The auditing firm pointed to the company's recurring operating losses and working capital deficiency. On February 19, 2009, MI Developments Inc., the Company's controlling shareholder, decided not to proceed with its reorganization proposal, which includes the spin-off of MEC to MID's existing shareholders. In accordance with the terms of certain of MEC's loan agreements, the maturity date of the first tranche of the new loan that a subsidiary of MID made available to MEC on December 1, 2008, in connection with the reorganization proposal; the maturity date of the bridge loan from MID Lender; and the deadline for repayment of US$100 million under the Gulfstream project financing facility from MID Lender has been accelerated to March 20, 2009. The maturity date of the second tranche of the New Loan has already been accelerated to May 13, 2009. As of February 18, 2009, there is roughly US$48.5 million outstanding under the first tranche of the New Loan, roughly US$0.7 million outstanding under the second tranche of the New Loan and roughly US$126.2 million outstanding under the bridge loan. In accordance with its terms, the maturity date of MEC's US$40 million credit facility with a Canadian chartered bank will also accelerate to March 5, 2009. If MEC is unable to repay its obligations when due or satisfy required covenants in its loan agreements, substantially all of its other current and long-term debt will also become due on demand as a result of cross-default provisions within loan agreements, unless MEC is able to obtain waivers, modifications or extensions. In the event MEC is unsuccessful in its efforts to raise additional funds, through an alternative transaction with MID, assets sales, by taking on additional debt or by some other means, MEC will not be able to meet such obligations. On March 2, 2009, The Toronto Stock Exchange indicated that the Listings Committee of the TSX determined to delist the Company's Class A Subordinate Voting Shares effective at the close of market on April 1, 2009. The delisting was imposed for failure by MEC to meet the continued listing requirements of the TSX, as detailed in Part VII of The TSX Company Manual. MAGNA ENTERTAINMENT: Wants to Hire Richards Layton as Co-Counsel ---------------------------------------------------------------- Magna Entertainment Corp. and certain of its subsidiaries, seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Richards, Layton & Finger, P.A. as co-counsel. RL&F will: a) advise the Debtors of their rights, powers and duties as debtors and debtors-in-possession; b) take all necessary action to protect and preserve the Debtors' estates, including the prosecution of actions on the Debtors' behalf, the defense of any action 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; c) prepare on behalf of the Debtors all necessary motions, applications, answers, orders, reports and papers in connection with the administration of the Debtors' estates; and d) perform all other necessary legal services in connection with the Chapter 11 cases. The Debtors relate that Weil, Gotshal & Manges LLP, the Debtors' lead counsel, and RL&F have discussed a division of responsibilities regarding the representation and will make every effort to avoid and minimize duplication of services in these Chapter 11 cases. Mark D. Collins, a director at RL&F, tells the Court that these individuals will have the primary responsibility in these Chapter 11 cases and their hourly rates are: Mark D. Collins $610 Maris J. Finnegan $300 L. Catherine Good $275 Barbara J. Witters $185 Mr. Collins adds that prior to the petition date, RL&F received a total retainer of $100,000 in connection with the Debtors' Chapter 11 cases. A portion of this payment has been applied to outstanding balances existing as of the petition date. The Debtors propose that the retainer monies paid and not expended for perpetition services and disbursements be treated as an evergreen retainer to be held bu RL&F as security throughout the Debtors' Chapter 11 cases. Mr. Collins assures the Court that RL&F is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Collins can be reached at: Richards, Layton & Finger, P.A. One Rodney Square 920 North King Street Wilmington, DE 19801 Tel: (302) 651-7700 Fax: (302) 651-7701 About Magna Entertainment Based in Aurora, Ontario, Magna Entertainment Corp. 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. * * * As reported by the Troubled Company Reporter on March 2, 2009, Magna received written notice from its lenders that Pimlico Racing Association, Inc., Laurel Racing Association Limited Partnership, Laurel Racing Assoc., Inc. and The Maryland Jockey Club of Baltimore City, Inc., each a subsidiary of MEC, are in default under the PNC Bank, National Association loan agreement for failure to comply with certain financial covenants relating to the financial position and results of operation of MJC and related entities. PNC Bank informed MEC that it has chosen not to exercise its rights and remedies under such loan agreement at this time as a consequence of this event of default, but may choose to do so at any time in the future without any further written notice. MEC also has not met certain financial covenants under its loan agreements with Wells Fargo Bank, National Association and a Canadian chartered bank with which MEC has a US$40 million credit facility. The lenders have not exercised their default-related rights under their respective loan agreements. As reported in the TCR on March 20, 2008, Ernst & Young LLP in Toronto, Canada, expressed substantial doubt about Magna Entertainment Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years Dec. 31, 2007, and 2006. The auditing firm pointed to the company's recurring operating losses and working capital deficiency. On February 19, 2009, MI Developments Inc., the Company's controlling shareholder, decided not to proceed with its reorganization proposal, which includes the spin-off of MEC to MID's existing shareholders. In accordance with the terms of certain of MEC's loan agreements, the maturity date of the first tranche of the new loan that a subsidiary of MID made available to MEC on December 1, 2008, in connection with the reorganization proposal; the maturity date of the bridge loan from MID Lender; and the deadline for repayment of US$100 million under the Gulfstream project financing facility from MID Lender has been accelerated to March 20, 2009. The maturity date of the second tranche of the New Loan has already been accelerated to May 13, 2009. As of February 18, 2009, there is roughly US$48.5 million outstanding under the first tranche of the New Loan, roughly US$0.7 million outstanding under the second tranche of the New Loan and roughly US$126.2 million outstanding under the bridge loan. In accordance with its terms, the maturity date of MEC's US$40 million credit facility with a Canadian chartered bank will also accelerate to March 5, 2009. If MEC is unable to repay its obligations when due or satisfy required covenants in its loan agreements, substantially all of its other current and long-term debt will also become due on demand as a result of cross-default provisions within loan agreements, unless MEC is able to obtain waivers, modifications or extensions. In the event MEC is unsuccessful in its efforts to raise additional funds, through an alternative transaction with MID, assets sales, by taking on additional debt or by some other means, MEC will not be able to meet such obligations. On March 2, 2009, The Toronto Stock Exchange indicated that the Listings Committee of the TSX determined to delist the Company's Class A Subordinate Voting Shares effective at the close of market on April 1, 2009. The delisting was imposed for failure by MEC to meet the continued listing requirements of the TSX, as detailed in Part VII of The TSX Company Manual. MCCLATCHY CO: Cuts 15% of Jobs & Reduces Exec Bonuses Under Plan ---------------------------------------------------------------- The McClatchy Company has provided additional details about its restructuring plan. On Feb. 5, 2009, at the time of its fourth quarter earnings release, McClatchy announced that given the unprecedented deterioration in revenues and with no visibility of an improving economy, the company was developing a plan to reduce costs. On Monday, the company said it plans to reduce its workforce by approximately 15% or 1,600 full-time equivalent employees as the company accelerates efforts to manage through an increasingly poor national economic environment. The headcount reductions will be achieved through severance programs, attrition and further consolidations and outsourcing of some business functions. The company expects to incur an estimated $30 million of severance costs in connection with these reductions. The workforce reductions will begin by the end of the first quarter of 2009. The plan also involves wage reductions across the company for additional savings. McClatchy's February announcement noted that Gary Pruitt, McClatchy's chairman and chief executive officer, declined his 2008 and 2009 bonuses and other executive officers did not receive bonuses for 2008. Yesterday, the company announced that Mr. Pruitt's base salary will be reduced by 15%, other executive officers' salaries will be cut by 10%, and no bonuses will be paid to any executive officers for 2009. In addition, the company has reduced the cash compensation, including retainers and meeting fees, paid to its directors by approximately 13%, and the directors declined any stock awards for 2008 and 2009. "We have been transitioning steadily from a traditional newspaper company to a hybrid print and online, news and advertising company for some time," Pruitt said. "The effects of the current national economic downturn make it essential that we move even faster to realign our workforce and make our operations more efficient. We previously discussed a plan to reach a targeted level of cost savings, but given the worsening economy, we must do more. I'm sorry we have to take these actions, but we believe they are necessary. "While painful, we know these actions are working. Evidence of our cost reduction efforts can be found in our results. Excluding severance and other benefit charges related to our previously announced restructuring plans, cash expenses were down 14.4% in the fourth quarter of 2008 and were down 11.5% in all of 2008." The headcount reductions will affect virtually every area of the organization, but each newspaper will determine how best to implement the savings in its market, while retaining its strategic focus on sales, news and online operations. McClatchy said the company would work to ensure a smooth transition during the downsizing, providing severance packages to affected employees. About The McClatchy Company Headquartered in Sacramento, California, The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, with 30 daily newspapers, approximately 50 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local websites in each of its markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, the Charlotte Observer, and The (Raleigh) News & Observer. McClatchy also owns a portfolio of premium digital assets, including 14.4% of CareerBuilder, an online job site, and 25.6% of Classified Ventures, a newspaper industry partnership that offers the auto website, cars.com, and the rental site, apartments.com. * * * As of December 28, 2008, McClatchy had $3.52 billion in total assets, including $4.99 million in cash and cash equivalents, and $3.12 billion in total liabilities, including $347.5 million in total current liabilities. The Company has $31.0 million of public notes maturing in April 2009 which are expected to be refinanced on a long-term basis by drawing on the Company's revolving credit facility. On September 17, 2008, Moody's Investor Services downgraded the Company's corporate credit rating to `B2' from `Ba2'. On February 6, 2009, Standard & Poor's lowered its corporate credit rating on the Company to `CCC+' from `B', with a negative rating outlook. The ratings on the Company's bonds were lowered from `CCC+' to `CCC-'. The Troubled Company Reporter said Feb. 10, 2009, that Fitch Ratings downgraded the Issuer Default Rating and outstanding debt ratings of McClatchy: -- Issuer Default Rating to 'CCC' from 'B-'; -- Senior secured credit facility to 'CCC/RR4' from 'B+/RR2'; -- Senior secured term loan to 'CCC/RR4' from 'B+/RR2'; -- Senior unsecured notes/debentures to 'C/RR6' from 'CCC/RR6'. There is no Rating Outlook assigned. Approximately $2.1 billion of debt is affected by the action. MDRNA INC: Receives Delisting Notice From NASDAQ ------------------------------------------------ MDRNA, Inc. received a NASDAQ Staff Determination on March 4, 2009 indicating that the Company has not regained compliance with Marketplace Rule 4450(a)(3) within the extension period granted to the Company through March 3, 2009. Marketplace Rule 4450(a)(3) requires a minimum $10.0 million in stockholders' equity for continued listing on The NASDAQ Global Market. In response to the March 4 letter, MDRNA requested an oral hearing before a NASDAQ Listing Qualifications Panel to review the Staff Determination and believes it will be able to show compliance with the requirement at the time of the hearing. "We remain confident that our strategy and plan to rebuild shareholder value and regain compliance are sound and we are committed to remaining on the NASDAQ Global Market," stated J. Michael French, President and CEO. "We will continue to advance our technologies, enhance our intellectual property, and establish additional pharmaceutical collaborations that will further validate our scientific approach to siRNA therapeutics and provide the financial resources necessary for success." About MDRNA Inc. Bothell, Washington-based MDRNA, Inc. (MRNA) -- http://www.mdrnainc.com-- is a biotechnology company focused on the development and commercialization of therapeutic products based on RNA interference (RNAi). MEDIACOM COMMUNICATIONS: Receives Letter from Nasdaq ---------------------------------------------------- On March 6, 2009, Mediacom Communications Corporation (Nasdaq: MCCC) disclosed that it received a letter from The Nasdaq Stock Market on March 2, 2009 indicating that due to the resignation of Craig S. Mitchell on February 13, 2009, the Company's audit committee now has only two independent members rather than at least three independent members as required by the Nasdaq's audit committee requirements in Marketplace Rule 4350. Nasdaq's rules, however, allow the Company until at least August 12, 2009 to add a third independent member to the audit committee. As previously announced, Mr. Mitchell resigned from the Company's Board of Directors under the terms of the recently completed acquisition by the Company of the shares of its common stock owned by an affiliate of Morris Communications. The Company expects to appoint a new director to fill the vacancy created by Mr. Mitchell's resignation by August 12, 2009. Mark Stephan, the Company's chief financial officer, said that "Craig Mitchell was an outstanding member of the audit committee and we appreciate his contributions over the years. We intend to use the time allowed by the Nasdaq's rule to find the right person to fill the vacancy." Based in Middletown, New York, Mediacom Communications Corporation (Nasdaq: MCCC) -- http://www.mediacomcc.com/-- is a cable television company focused on serving the smaller cities and towns in the United States. The company offers a wide array of broadband products and services, including traditional video services, digital television, video-on-demand, digital video recorders, high-definition television, high-speed Internet access and phone service. * * * As disclosed in the Troubled Company Reporter on June 3, 2008, Fitch Ratings affirmed the 'B' Issuer Default Rating for Mediacom Communications Corporation and its wholly owned subsidiaries Mediacom LLC and Mediacom Broadband LLC. In addition Fitch assigned a 'BB/RR1' rating to Mediacom Broadband LLC's $300 million incremental term loan E. Lastly, Fitch has upgraded Mediacom LLC's senior unsecured debt to 'B-/RR5' from 'CCC+/RR6'. Approximately $3.2 billion of debt as of March 31, 2008 is affected. The Rating Outlook for all of Mediacom's ratings is Stable. As reported in the Troubled Company Reporter on March 6, 2008, Moody's Investors Service affirmed its 'B1' corporate family rating for Mediacom Communications Corp.. The rating outlook remains stable. As of December 31, 2008, the Company's balance sheet showed total assets of $3,718,989,000 and total liabilities of $4,065,633,000, resulting in total stockholders' deficit of $346,644,000. MERISANT WORLDWIDE: Proposes Incentives for 437 Key Employees ------------------------------------------------------------- Merisant Worldwide Inc. seeks approval from the U.S. Bankruptcy Court for the District of Delaware to launch an incentive program for 437 executives and other key employees. According to Bloomberg's Bill Rochelle, the proposed incentive plan is a scaled down version of what was in effect before the bankruptcy filing in January. Mr. Rochelle adds that the program is to cover seven top executives and 430 other employees. If the company meets the target for financial performance, the cost will be $2.3 million for the executives and $5.5 million for other workers. If performance exceeds the target, the awards could be larger. The Court will convene a hearing to consider the proposal on March 24. About Merisant Worldwide Headquartered in Chicago, Illinois, Merisant Worldwide Inc. -- http://www.merisant.com/-- sell low-calorie tabletop sweetener. The Debtor's brands are Equal(R) and Canderel(R). The Debtor has principal regional offices in Mexico City, Mexico; Neuchatel, Switzerland; Paris, France; and Singapore. In addition, the Debtor owns and operates manufacturing facilities in Manteno, Illinois, and Zarate, Argentina, and own processing lines that are operated exclusively for the Debtor at plants located in Bergisch and Stendal, Germany and Bangkrason, Thailand. As of March 28, 2008, the Debtor has 20 active direct and indirect subsidiaries, including five subsidiaries in the United States, six subsidiaries in Europe, five subsidiaries in Mexico, Central America and South America, and three subsidiaries in the Asia Pacific region, including Australia and India. Furthermore, the Debtor's Swiss subsidiary holds a 50% interest in a joint venture in the Philippines. Merisant Worldwide holds 100% interest in Merisant Company. The company and five of its units filed for Chapter 11 protection on January 9, 2009 (Bankr. D. Del. Lead Case No. 09-10059). Sidley Austin LLP represents the Debtors' in their restructuring efforts. Young, Conaway, Stargatt & Taylor LLP represents the Debtors' as co-counsel. Blackstone Advisory Services LLP is the Debtors' financial advisor. Epiq Bankruptcy Solutions, LLC is the Debtors' Claims and Noticing Agent. Winston & Strawn LLP represents the Official Committee of Unsecured Creditors as counsel. Ashby & Geddes, P.A. is the Committee's Delaware counsel. The Debtors have $331,077,041 in total assets and $560,742,486 in total debts as of Nov. 30, 2008. METROPOLITAN NASHVILLE: Moody's Assigns Rating on $33.6MM Bonds --------------------------------------------------------------- Moody's Investors Service has assigned an A2 underlying rating to $33.6 million of Metropolitan Nashville Airport Authority Airport Improvement Revenue Refunding Bonds, Series 2009A. The rating outlook is negative and is based on the weakened position of bondholder security from debt service reserves funded by FGIC (rated Caa1, negative outlook) sureties and the airport's limited liquidity position -- making replacement of the surety policies or cash funding of debt service reserve requirements difficult. The authority operates the Nashville International Airport and the John C. Tune Airport. Use Of Proceeds: The Series 2009A bonds will provide funds for Phase II of the airport's terminal renovation project, cover the costs of issuance, and fund the debt service reserve account. Legal Security: Net general revenues of the authority. The Series 2009A bonds are expected to be supported by a debt service reserve that will be funded with cash to maximum annual debt service for those bonds. Interest Rate Derivatives: The authority entered into a floating- to-fixed rate interest swap in connection with the issuance of the Series 1993 Bonds and the agreement is term is equal to the term of the bonds. The authority agreed to pay a fixed rate of 4.49% on a notional amount equal to the principal amount of the bonds, initially $53.5 million, now $31.8 million. The counterparty in the transaction, Societe Generale (Aa2/P-1), agreed to pay the interest rates borne by the variable rate Series 1993 Bonds. The fair value of the swap on February 20, 2008 was a liability of $2.69 million. The swap was transferred on identical terms to match the Series 2008A bonds that refunded the Series 1993 bonds that originally matched the swap. The swap will no longer be insured as FGIC has agreed to remove the insurance policy supporting the swap. There are no collateral posting requirements for MNAA. The regular swap payments, as well as any required termination payments, are considered operating expenses and precede debt service payments in the flow of funds. In conjunction with the Series 2008B bonds, MNAA entered into a floating-to-fixed interest rate swap agreement with Fifth Third Bank(A1/P-1, ratings under review for downgrade) at a notional amount that matches the Series 2008B bonds, approximately $27.6 million. As part of the agreement the authority agreed to pay a fixed rate of 3.32% and Fifth Third Bank agreed to pay the SIFMA swap rate. Collateral posting thresholds for MNAA are $2.5 million at A3 or above, $1.5 million at Baa1 through Baa3, and zero below Baa3. The fair market value of the swap on February 20, 2008 was $1.2 million in favor of the bank. The regular swap payments are considered operating expenses and precede debt service payments in the flow of funds, but any required termination payments would be considered a subordinate indebtedness. Strengths * Airport has dominant air market share in Nashville metropolitan area, providing service to a large, stable metropolitan area with a very low $3.15 cost per enplanement; * Pattern of stable enplanement growth demonstrates strong demand for origin and destination (O&D) traffic * Aggressive debt amortization and declining debt service after 2012 with limited additional debt expected to meet capital requirements provides the airport with significant financial flexibility Challenges * Reliance on FGIC sureties to fulfill $42.26 million of debt service reserve requirements on outstanding debt significantly diminishes bondholder security * Bondholder protection from rate covenant and additional bonds test are below average for similarly rated airports * Concentration in a single air carrier, Southwest Airlines, for 52% of enplanements Recent Developments The debt service reserve fund that supports all of the authority's debt except the Series 2008A&B bonds and the Series 2003 Passenger Facility Charge bonds remains the major concern supporting the negative outlook. The outlook was assigned in May 2008 based on the weakening position of bondholder security from the FGIC surety policies that fulfilled the $42.3 million debt service reserve requirement, and the airport's limited liquidity position. FGIC was rated Baa3 with ratings on review for possible downgrade at the time and its rating has since fallen to Caa1 with a negative outlook, making the surety even weaker than before. MBIA, which has recently restructured its financial guarantor insurance operation into two separate entities MBIA Corp. (rated B3, ratings under review for possible downgrade) and MBIA Illinois (rated Baa1, ratings under review for possible upgrade), has agreed to reinsure portions of FGIC liabilities including this surety. The former FGIC policies have been placed within MBIA Illinois. MBIA's reinsurance agreement does not currently meet Moody's requirements for a credit substitution, therefore Moody's does not currently apply MBIA ratings to this surety. The airport has taken positive steps to provide additional support to bondholders by opening a $15 million line of credit with First Tennessee Bank, N.A. (rated A3/P-2, negative outlook), which can only be used for the purpose of paying shortfalls in debt service requirements. This instrument does not completely replace the loss of value in the debt service reserve fund surety because it is not legally pledged to bondholders and it is significantly smaller than the debt service reserve fund requirement. But it does provide bondholders a layer of protection that was not present before and Moody's believes it demonstrates the airport's interest in addressing the weakened position faced by bondholders as a result of the deterioration of FGIC's credit ratings. Moody's also notes that the airport expects to fulfill the debt service reserve requirement of the Series 2009A bonds with cash, further reducing the risks, particularly to holders of the Series 2009A bonds. The airport would be unable to cash fund the reserve requirements with its $31.5 million of unrestricted cash and reserves. The airport has experienced enplanement declines similar in magnitude to those seen across the U.S. Enplanements at the airport decreased -4.0% in FY 2008 and are down 7.6% for the first six months of FY2009. Moody's believes the airport's residual rate agreement with its air carriers and its satisfactory financial position insulates it from activity declines of this nature. Steeper or continued enplanement declines could place negative pressure on the rating. The airport continues to provide a relatively low cost environment for its air carriers with a $3.15 cost per enplanement in FY 2008. Debt service requirements escalate from approximately $34 million in 2009 to approximately $45 million in 2012, which could pressure cost per enplanement higher. However, the airport maintains a $25 million surplus of previously collected PFCs that it has agreed to allocate toward future debt service requirements. Use of these funds will moderate the impact of the high debt service requirements and airport management expects cost per enplanement to only increase by approximately $1 over that time. The high debt service requirements over the next few years are a result of the authority's aggressive debt amortization scheduling. The sharp reduction in debt service requirements after 2012 provides the airport with substantial financial flexibility in the coming years. The airport's current capital program is based mainly on projects the authority expects to fund with other sources. Most projects will not be pursued unless they are covered by Federal grant funds. Some limited projects funded by the airport may go forward if the cost recovery is expected to be on a short horizon. The airport has also been contemplating a consolidated rental car facility that would be funded with the customer facility charge that is already being collected. That project is at 99% design and is ready to move forward, but the authority is deferring it until additional funding can be found or economic conditions improve. The current bonds will fund Phase II of the airport's terminal renovation project, including upgrades to terminal systems, elevators and escalators, bathrooms, airline holdroom finishes, and ticket counters. Phase I of the renovation added new terminal space for passenger security screening as well as concession areas. The airport has already seen a benefit from this upgrade as year-to-date concession revenue is outpacing FY 2008 by approximately 9% for food sales and 4% for news and gift sales. Outlook The negative outlook reflects the weakened bondholder security due to $42.3 million of debt service reserves funded by FGIC surety policies and the airport's limited liquidity position relative to its level of financial risk. What Could Change the Rating - UP Strong enplanement growth leading to wider financial margins and improved liquidity, in conjunction with a strengthening of debt service reserve funds, could provide upward pressure on the rating. What could change the rating--DOWN A continued weakening of the debt service reserve funds supporting the outstanding airport revenue bonds, additional stress on liquidity through increased use of variable rate debt, or revenue reduction from decreased enplanement levels could negatively pressure the rating. Key Indicators: * Type of Airport: O&D * Rate Making Methodology: Residual * FY2008 Enplanements: 4,739,000 * 5-Year Enplanement CAGR 2003-2008: 3.5% * FY 2008 vs. FY 2003 Enplanement growth: 13.7% * FY 2008 vs. FY 2007 Enplanement growth: -4.0% * % O&D vs. Connecting, FY 2008 (5 YR AVG): 84% (84%) * Largest Carrier by Enplanements (FY2008 share): Southwest (52%) * Airline Cost per Enplaned Passenger, FY 2008 (5 YR AVG): $3.15 ($4.25) * Debt per Enplaned Passenger, FY 2008 (5 YR AVG): $42 ($38) * Bond Ordinance Debt Service Coverage, FY 2008 (5 YR AVG): 1.38x (1.40x) * Utilization Factor, FY 2008 (5 YR AVG): 2.7 (2.6) Rated Debt: * Series 1995 Airport Revenue Bonds, $42.78million, A2 * Series 1998A&C Airport Revenue Bonds, $24.0 million, A2 * Series 2001A Airport Revenue Bonds, $ 56.0 million, A2 * Series 2003B Airport Revenue Bonds, $17.6 million, A2 * Series 2008A&B Airport Improvement Variable Rate Demand Revenue Bonds, $59.4 million, A2 * Passenger Facility Charge and Airport Revenue Bonds, Series 2003, $15.1 million, Aa2/VMIG1 (VRDO/LOC with SunTrust expires July 23, 2012) The last rating action was on May 29, 2008 when the ratings on the Series 2008 Bonds were assigned, other parity bond ratings were affirmed and the rating outlook was changed to negative. The Metropolitan Nashville Aviation Authority bond ratings were assigned by evaluating factors believed to be relevant to the credit profile of the issuer such as i) the business risk and competitive position of the issuer versus others within its industry or sector, ii) the capital structure and financial risk of the issuer, iii) the projected performance of the issuer over the near to intermediate term, iv) the issuer's history of achieving consistent operating performance and meeting budget or financial plan goals, v) the nature of the dedicated revenue stream pledged to the bonds, vi) the debt service coverage provided by such revenue stream, vii) the legal structure that documents the revenue stream and the source of payment, and viii) and the issuer's management and governance structure related to payment. MONACO COACH: Wants to Access Lenders' Cash Collateral ------------------------------------------------------ Monaco Coach Corporation and its debtor-affiliates ask the Hon. Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware for permission to access, on the interim, cash collateral securing repayment of secured loans to their prepetition secured lenders including Bank of America N.A. and Ableco Finance LLC. The Debtors and the secured lenders are parties to credit agreements dated Nov. 6, 2008. The Debtors owe $35,662,000 to BofA and $36,987,000 to Ableco Finance as of March 4, 2009. Proceeds of the cash collateral will only be used to pay expenses when due in accordance to the proposed budget. The secured lenders will be granted replacement security interest and liens in all of the Debtors' postpetition assets as adequate protection. The replacement liens will be deemed valid and perfected by operation of law immediately upon entry of the interim order. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, tells the Court the secured lenders and the Debtors were unable to negotiate the final terms of either the debtor-in-possession financing or the use of cash collateral. However, the parties were able to iron out the terms of the interim order to prevent the immediate and irreparable harm that would occur if the Debtors failed to obtain cash. A full-text copy of the Debtors' cash collateral budget is available for free at http://ResearchArchives.com/t/s?3a29 Headquartered in Coburg, Oregon, Monaco Coach Corporation -- http://www.monacocoach.com-- makes recreational vehicles including Monaco, Holiday Rambler, Beaver, Safari and R-Vision brands. The company and 11 of its affiliates filed for Chapter 11 protection on March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10750). Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Debtors in their restructuring efforts. The Debtors have $442,115,000 in total assets and $208,822,000 in total debts as of Sept. 27, 2008. MONACO COACH: Seeks Omni Management as Claims Agent --------------------------------------------------- Monaco Coach Corporation and it debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware for permission to employ Omni Management Group LLC as their claims, balloting, noticing and administrative agent. The firm will: a) prepare and serve required notices in this Chapter 11 case, including: -- notice of the commencement of this Chapter 11 case and the initial meeting of creditors under section 341 (a) of the Bankruptcy Code; -- notice of the claims bar date ; -- notices of objections to claims; -- notices of any hearings on a disclosure statement and confirmation of a plan of reorganization; and -- other miscellaneous notices as the Debtor or Court may deem necessary or appropriate for an orderly administration of this Chapter 11 case. b) file with the Clerk's Office a certificate or affidavit of service that includes (i) a copy of the notice served, (ii) an alphabetical list of persons on whom the notice was served, along with corresponding addresses and (iii) the date and manner of service; c) maintain copies of all proofs of claim and proofs of interest filed in this case; d) maintain official claims registers in this case by docketing all proofs of claim and proofs of interest in a claims database that includes the following information for each such claim or interest asserted: -- the name and address of the claimant or interest holder and any agent thereof, if the proof of claim or proof of interest was filed by an agent; -- the date the proof of claim or proof of interest was received by the firm or the Court; -- the claim number assigned to the proof of claim or proof of interest; and -- the asserted amount and classification of the claim. e) implement necessary security measures to ensure the completeness and integrity of the claims registers; f) transmit to the Clerk's Office a copy of the claims registers on a weekly basis, unless requested by the Clerk's Office on a more or less frequent basis; g) maintaining an up-to-date mailing list for all entities that have filed proofs of claim or proofs of interest and making such list available upon request to the Clerk's Office or any party in interest; h) provide access to the public for examination of the proofs of claim or proofs of interest filed in this case without charge during regular business hours; i) record all transfers of claims pursuant to Rule 3001 (e) of the Federal Rules of Bankruptcy Procedure and provide notice of such transfers as required by Bankruptcy Rule 3001(e), if directed to do so by the Court; j) comply with applicable federal, state, municipal and local statues, ordinances, rules, regulations, orders and other requirements in connection with its activities in this case; k) provide temporary employees to process claims, as necessary; 1) comply with such further conditions and requirements as the Clerk's Office or the Court may at any time prescribe; m) act as balloting agent for any plan of reorganization filed by the Debtor; and n) provide other claims processing, noticing, balloting, and related administrative services as may be requested from time to time by the Debtor. The firm's professionals will charge the Debtors at these rates: Designation Hourly Rates ----------- ------------ Senior Consultants $195-$295 Programmers $130-$200 Consultants and Project Specialist $75-$140 Clerical Support $75-$65 Robert L. Berger, a member of the firm, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the United States Bankruptcy Code. Headquartered in Coburg, Oregon, Monaco Coach Corporation -- http://www.monacocoach.com-- makes recreational vehicles including Monaco, Holiday Rambler, Beaver, Safari and R-Vision brands. The company and 11 of its affiliates filed for Chapter 11 protection on March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10750). Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Debtors in their restructuring efforts. The Debtors have $442,115,000 in total assets and $208,822,000 in total debts as of Sept. 27, 2008. MORTGAGES LTD: Hearing on Disclosure Statement Set for April 6 -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona has scheduled a hearing for April 6, 2009, at 3:00 p.m. to consider whether Mortgages Ltd.'s Disclosure Statement in support of its Chapter 11 Plan of Reorganization, dated March 4, 2009, contains sufficient information to allow creditors to vote on the Plan. Pursuant to the Plan, investors will retain their note and deed-of -trust interests in the ML Loans in which they invested. A reorganized ML now known as Phoenix Loan Services, LLC, to be owned by ML's investors and creditors, will continue to service the loans. A separate trust ("ML Trust") will be formed to liquidate certain of the Debtor's assets, and to handle litigation matters. The Debtor believes the Plan protects both invests and creditors and allows them to be part of an on-going business and not just a liquidation. Funds to emerge from bankruptcy will be provided in the form of debt or equity by what is referred to as the Emergence Capital Source, which will be disclosed prior Confirmation in a Plan Supplement. PLS will be a limited liability company managed by a 5-member board of directors, at least three of which will be completely independent without any investment or relational interest to the Debtor. After the confirmation of the Plan, Investors and Allowed Unsecured creditors of the company will receive most of the "interest spread" and other fees due when borrowers pay their loans or the property securing the loans is foreclosed. The cost of servicing the loans will also be significantly reduced to benefit Investors. On January 6, 2009, the Court terminated the Exclusivity Period. The Investor's Committee had earlier filed a Plan. Claimants who are entitled to vote can cast a ballot for or against either or both Plans. Votes will be tabulated and ultimately, the Court will have to decide which plan is legally confirmable. Classification and Treatment of Claims Administrative Claims and Priority Tax Claims, pursuant to Sec. 1123(a)(1) of the Bankruptcy Code, are not classified. Allowed Administrative Claims will be paid in full. Allowed Priority Tax Claims will receive deferred cash payments over a period of 5 years, with interest. The Plan segregates the various claims and interests into 16 classes: Class 1: Priority Non-Tax Claims Class 2: Secured Tax Claims Class 3: Stratera Secured Claims Class 4: Artemis Secured Claims Class 5: Arizona Bank Secured Claim Class 6: Radical Bunny, LLC Secured Claim Class 7: Mechanic's Lien Claims Class 8: VTL Claims Class 9: Administrative Convenience Class Class 10: Radical Bunny Unsecured Class Class 11: Rev Op Investers Class Class 12: Other Investor Class Class 13: General Unsecured Claims Class 14: Borrowers' Claims Class 15: Subordinated Claims Class 16: Equity Interests The Debtor believes that except for Classes 1, 2, 3, 4, 7, 8, and 9, all Classes are impaired and therefore can vote on the Plan. The holders of Allowed Unsecured Claims under Class 13 other than those holding Claims in any of the other Classes will receive for every $1,000 of its Allowed Unsecured Claim 1) an interest in ML Trust equal to the amount of their Allowed Unsecured Claim and 2) a share of membership interest in PLS (provided, however, that no fractional shares will be issued and will be cancelled without compensation). The holder of the Class 5 Arizona Bank Secured Claims will retain its liens on the Troon and Fountain Hills property and will receive one of the following treatments, at the sole option of the Debtor: (i) Reinstatement of its Allowed Secured Claim, (ii) payment of Cash, (ii) surrender by the Debtor of the collateral, or (iv) other treatment agreed to in writing. On the Plan's Effective Date, Radical Bunny, LLC, under Class 6, will receive the Debtor's interest in the ML Owned Notes and Deeds of Trust, in full satisfaction of its Allowed Secured Claim. The Unsecured Claim of Radical Bunny under Class 10 will receive an Allowed Claim as an unsecured creditor equal to $125 million, which will receive the same treatment as Allowed Claims provided to holders of Class 13. In addition Radical Bunny will be granted a priority distribution from the ML Trust of $35 million resulting from certain Causes of Action against SM Coles Revocable Trust, SM Coles, LLC and the probate estate of Scott M. Coles. In addition to retaining their respective interests in the ML Loans, the Rev Op Investors under Class 11 will receive Allowed Claims as unsecured creditors equal to their Investor Deficiency, which will receive the same treatment as Allowed Claims provided to holders of Class 13. In addition to retaining their respective interests in the ML Loans, the Class 12 Other Investor Class referring to Investors other than those with Claims under Class 10 (Radical Bunny) and 11 (Rev Op Investors), will receive an Allowed Unsecured Claim equal to ten percent (10%) of the principal balance due at the Emergence Date on their respective ML Loans, which will receive the same treatment as Allowed Claims provided to holders of Class 13. The holders of Borrowers' Claims under Class 14 that have been timely asserted in this Bankruptcy Case, pursuant to an adversary proceeding initiated before the Bankruptcy Court and a final order after all appeals have been exhausted, will be entitled to setoff the amount of their Allowed Claims against the principal, interest, and fees owed on their respective ML Loans. If the Borrower is not determined to have a right of setoff against the ML Loan but is determined to have an Allowed Claim, then that Allowed Claim will receive and be paid as a Class 13 General Unsecured Claim. Holders of an Allowed Securities Claim under Class 15 will be subordinated to the Allowed Claims in Classes 10 to 13 pursuant to section 510(b) of the Bankruptcy Code. As of the Effective Date, all Equity Interests under Class 16 in the Debtor will be cancelled and extinguished, and holders of Equity Interests will receive nothing under the Plan and are deemed to have rejected the Plan. "Cramdown" Provisions Section 1129 of the Bankruptcy Code provides for a plan to be confirmed each of the impaired classes of claims or interests must have accepted the Plan. However, if at least one impaired class accepts the Plan and certain additional requirements are met, then Sec. 1129 of the Bankruptcy Code allows the Plan Sponsors to seek to confirm the Plan over the negative vote of one or more classes of claims or interests, as long as the Plan does not "discriminate unfairly" and that it is "fair and equitable" with respect to each impaired class that rejected the Plan. The Debtor believes the Plan satisfies the statutory criteria required by Sec. 1129(b) of the Code, and the Debtor intends to request confirmation of the Plan in the event it is rejected by any impaired class. A full-text copy of Mortgages Ltd.'s disclosure statement, dated March 4, 2009, is available for free at: http://bankrupt.com/misc/MortgagesLtd.DisclosureStatement.pdf As previously reported, the Investors Committee filed its Plan of Reorganization on January 21, 2009, after the Debtor's exclusive rights to propose its own exit plan expired. Pursuant to said plan, investors would control the real-estate loans that Mortgages made to developers. Holders of Class 11 General Unsecured Claims will be beneficaries of the Liquidating Trust to be established on the Effective Date of the Plan in accordance with the Plan. Claims and portions thereof that are treated in Class 11 and are beneficiaries of the Liquidating Trust become Channeled Claims unless they choose the Opt-Out Provision under the Plan. A full-text copy of the disclosure statement explaining the Investors Committee's Plan of Reorganization for Mortgages Ltd. is available for free at: http://bankrupt.com/misc/MortgagesLtdDS.InvestorsCommitteePlan.pdf About Mortgages Ltd. Phoenix, Arizona-based Mortgages Ltd. -- http://www.mtgltd.com/ -- acted as a full service private lender prior to filing for bankruptcy. Through its licensed broker dealer, Mortgages Ltd. Securities, ML received money raised from approximately 2,700 investors for placement into loans secured by real estate located solely in Arizona. These accredited investors financed the lending operations of ML and received as collateral for their funding direct fractional interests in "pass through" loans and deeds of trust or membership interests in "Opportunity Funds" which held fractionalized interests in loans and deeds of trust. Mortgages Ltd. was the subject of an involuntary chapter 7 petition dated June 20, 2008, filed by KGM Builders Inc. -- a contractor for Grace Communities, a borrower of the company -- in the U.S. Bankruptcy Court for the District of Arizona. Central & Monroe LLC and Osborn III Partners LLC, divisions of Grace Communities, sought the appointment of an interim trustee for Mortgages Ltd. in the chapter 7 proceeding. Mortgages Ltd. is also facing lawsuits filed by Grace Communities and Rightpath Limited Development Group for its alleged failure to fully fund loans. Mortgages Ltd. denied the charges. It has filed a motion to dismiss the Rightpath suit. The Debtor's case was converted to a chapter 11 proceeding on June 24, 2008 (Bankr. D. Ariz. Case No. 08-07465). Judge Sarah Sharer Curley presides over the case. Carolyn Johnsen, Esq., and Bradley Stevens, Esq., at Jennings, Strouss & Salmon P.L.C., replaced Todd A. Burgess, Esq., at Greenberg Traurig LLP, as counsel to the Debtor. As of Dec. 31, 2007, the Debtor had total assets of $358,416,681 and total debts of $350,169,423. MOTOROLA INC: Ex-CFO Paul Liska Says He Was Wrongfully Terminated ----------------------------------------------------------------- Sara Silver at The Wall Street Journal has noticed that Motorola Inc.'s regulatory filing on the dismissal of Paul Liska as chief financial officer provided an explanation that differed from its original account of the dismissal. Motorola said in a filing with the U.S. Securities and Exchange Commission on February 3, 2009, that Edward J. Fitzpatrick, the company's senior vice president and corporate controller, has been named to the additional role of acting chief financial officer, effective immediately, replacing Mr. Liska, former chief financial officer. The company has initiated a search to identify a replacement. "We appreciate the contributions Paul made toward the company's planned separation and in managing our cost- reduction activities," said Greg Brown, Motorola's president & co-chief executive officer and CEO of Broadband Mobility Solutions, and Sanjay Jha, co-chief executive officer and CEO of Mobile Devices. Mr. Fitzpatrick is senior vice president and corporate controller, responsible for accounting, financial reporting, budgeting, financial controls, compliance with Sarbanes-Oxley and Securities and Exchange Commission (SEC) rules, and financial operations. Previously, Mr. Fitzpatrick was corporate vice president of finance for the Home & Networks Mobility business. Prior to that position, he served as vice president and controller for the Networks & Enterprise and the Government & Enterprise Mobility Solutions businesses. Prior to joining Motorola, he was a senior manager at Price Waterhouse. According to WSJ, Motorola disclosed Mr. Liska's dismissal after posting a $3.58 billion quarterly loss. Citing a person familiar with the matter, WSJ relates that on February 20, 2009, Mr. Liska filed a wrongful termination lawsuit against Motorola in the Circuit Court of Cook County, Illinois, according to a person familiar with the matter. Mr. Liska said in a statement last week that he was surprised to learn that he had been fired for cause. Motorola, WSJ relates, said on February 3 that it was replacing Mr. Liska because it had postponed the spinoff of its troubled cellphone unit. Motorola said in a press release that it "appreciated" Mr. Liska's contributions and Mr. Brown praised Mr. Liska on the investor call. "He [Mr. Liska] did a lot of good work here and helped us get a lot of the heavy lifting done around this separation and preparation for separation...and he was also very helpful in getting after...cost reduction initiatives. That said, I think the business environment's changed, and given the environmental changes, we thought the change was appropriate at this time as well in that position," WSJ quoted Mr. Brown as saying. Mr. Liska said in a statement that he was fired on January 29, shortly after a board meeting. "For approximately the next three weeks, I and my attorney had been told I was terminated without cause. Neither I nor my attorney have been contacted about this 180-degree change in Motorola's representation concerning my dismissal," Mr. Liska said in the statement. Motorola said in a SEC filing last week that Mr. Liska was "involuntarily terminated for cause" on February 19 and asked that he repay a $400,000 cash signing bonus. The filing, says WSJ, defined "cause" in many different ways, but didn't specify which, if any, might apply in this instance. In the filing, Motorola accused Mr. Liska of: -- failing to substantially perform duties; -- engaging in any malfeasance, dishonesty or fraud; -- gross misconduct; or -- breaching one or more restrictive covenants. "All I can tell you is that Motorola is in full compliance with all financial-reporting requirements and our financial statements have been reviewed by KPMG," the firm's auditors, WSJ quoted a company spokesperson as saying. About Motorola Based in Schaumburg, Illinois, Motorola Inc. (MOT) -- http://www.motorola.com/-- develops communications infrastructure, enterprise mobility solutions, digital set-tops, cable modems, mobile devices and Bluetooth accessories. A Fortune 100 company with global presence and impact, Motorola had sales of $36.6 billion in 2007. In December 2008, Standard & Poor's Ratings Services lowered its ratings on three Motorola Inc.-related transactions to "BB+" and removed them from CreditWatch, where they were placed with negative implications on Jan. 28, 2008. As reported by the Troubled Company Reporter on February 5, 2009, some investors said that Motorola Inc. should scale back the cellphone business. Motorola is struggling to stem losses in the cellphone division after canceling plans to spin off the unit. Motorola's cellphone sales dropped 51% in the fourth quarter 2008. While Motorola's other divisions were profitable, the cellphone division posted an operating loss of $595 million. MUVICO THEATERS: May File for Bankruptcy Protection --------------------------------------------------- Elaine Walker at The Miami Herald reports that Muvico Theaters is facing eviction at several locations and may have to file for bankruptcy protection. According to Miami Herald, Muvico is in litigation over increasing financial problems. Muvico, according to Miami Herald, hasn't made payments on a $60 million line of credit for more than four months or on leases for five theaters held by affiliates of the real estate investment trust, iStar Financial. Miami Herald notes that iStar is seeking to be recognized as the theater chain's lawful owner. iStar, says the report, also seeks to prevent Muvico from filing for bankruptcy protection. Miami Herald reports that another landlord has sued to evict Muvico from its theaters in Davie, Pompano Beach and Tampa. According to Miami Herald, Muvico Theaters wasn't behind on rent at those facilities, but the landlord claimed that the chain told him in November 2008 that it might consider filing for bankruptcy. Court documents say that Muvico had been in talks early this year about selling some of its theaters to a national theater chain and using the money to repay iStar. Based in Fort Lauderdale, Florida, Muvico Entertainment, L.L.C. -- http://www.muvico.com/-- is a growing chain of premium, megaplex motion picture theaters in the United States. The company currently operates 248 screens in 13 locations located in Florida, Maryland, and Illinois. Muvico has ten complexes in Florida. Muvico has also expanded out of the state Florida to include complexes in Maryland (see Arundel Mills), Memphis, Tennessee, the Chicago Metropolitan Area (Rosemont), and soon East Rutherford, New Jersey. Muvico theaters are known for the themes that several theaters have, such as the Egyptian theme, the '50s drive-in theme, the French opera house theme. They are also known for the Premier Bar, which is currently at Centro Ybor 20, Parisian 20, Coconut Point 16, and the Boynton Beach 14 locations. The Palace 20 goes even further with a full-scale restaurant on top of the theater, with the Rosemont theater featuring a similar concept. NAVISTAR INT'L: Will Present 1st Quarter Results on March 11 ------------------------------------------------------------ Navistar International Corporation, the nation's largest combined commercial truck, school bus and mid-range diesel engine producer, will present via live web cast its fiscal 2009 first quarter financial results on Wednesday, March 11, 2009. A live webcast is scheduled at approximately 5:00 PM EDT. Speakers on the webcast will include Daniel C. Ustian, Chairman, President and Chief Executive Officer, and other company leaders. The web cast can be accessed through a link on the investor relations page of Navistar's Web site at: http://ir.navistar.com/events.cfm Investors are advised to log on to the Web site at least 15 minutes prior to the start of the webcast to allow sufficient time for downloading any necessary software. The webcast will be available for replay at the same address approximately three hours following its conclusion, and will remain available for a period of 10 days. Based in Warrenville, Illinois, Navistar International Corporation (NYSE: NAV) -- http://www.navistar.com/-- produces International(R) brand commercial and military vehicles, MaxxForce(TM) brand diesel engines, IC brand school and commercial buses, and Workhorse(R) brand chassis for motor homes and step vans, and is a private label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. Navistar is also a provider of truck and diesel engine parts. Another affiliate offers financing services. The Troubled Company Reporter reported on January 7, 2009, that Navistar had $10.3 billion in total assets and $11.7 billion in total liabilities, resulting in $1.4 billion in stockholders' deficit as of October 31. The company also had $2.3 billion in accumulated deficit as of October 31. The TCR reported on June 2, 2008, that Fitch Ratings affirmed and simultaneously removed from Rating Watch Negative the ratings for Navistar International Corporation and Navistar Financial Corp. to reflect progress in filing audited financial statements. The ratings are: Navistar International Corp. -- Issuer Default Rating 'BB-'; -- Senior unsecured bank facility 'BB-'. Navistar Financial Corp. -- IDR 'BB-'; -- Senior unsecured bank lines 'BB-'. The TCR also reported on Feb. 25, 2008 that Standard & Poor's Ratings Services removed its 'BB-' corporate credit ratings on Navistar International Corp. and subsidiary Navistar Financial Corp. from CreditWatch with negative implications, where they were placed Jan. 17, 2006. NAVISITE INC: Nasdaq to Hear Appeal on Delisting on April 23 ------------------------------------------------------------ NaviSite, Inc., has been granted an appeals hearing before the Nasdaq Listing Qualifications Panel on April 23, 2009, to present a plan to regain compliance with the Nasdaq Marketplace Rule 4310(c)(3) for continued listing of its common stock on the Nasdaq Capital Market. The Company received a notification letter from the Nasdaq Listing Qualifications Staff on February 24, 2009, indicating that, unless the Company requested a hearing before the Panel, the Company's common stock would be delisted because the Company was not in compliance with the Rule. The delisting notice has no effect on the listing of the Company's common stock at this time. The Rule requires the Company to have a minimum of $2,500,000 in stockholders' equity, $35,000,000 market value of listed securities or $500,000 of net income from continuing operations for the most recently completed fiscal year or two of the three most recently completed fiscal years. The delisting notice has no effect on the listing of the Company's common stock at this time. On November 6, 2008, the Company received notice from the Nasdaq Listing Qualifications Staff that the Company was not in compliance with the Rule. The Staff granted the Company an extension until February 19, 2009, to regain compliance with the Rule. The Company did not regain compliance with the Rule on or prior to February 19, 2009 and, accordingly, on February 24, 2009, it received the delisting notice. The Company requested a hearing before the Panel to address the deficiency, which stayed any action with respect to the Staff determination until the Panel renders a decision subsequent to the hearing, and received confirmation of the hearing for April 23, 2009, at which the Company intends to present a plan to regain compliance with the Rule. While the Company expects that its plan will be sufficient to evidence regaining compliance, there can be no assurance that the Company's request for continued listing will be granted. About NaviSite Based in Andover, Massachusetts, NaviSite Inc. -- http://www.navisite.com/-- provides enterprise hosting and application solutions. Customers depend on NaviSite for managed application services, application development, implementation and management on its web infrastructure platforms in 16 state-of-the- art data centers supported by more than 650 professionals. NELSON RE: Moody's Reviews 'B3' Rating on Class G Notes ------------------------------------------------------- Moody's Investors Service has placed Nelson Re Ltd.'s Class G Notes (rated B3) on review for possible downgrade. Nelson Re issued the notes in June 2008 as a way for noteholders to provide excess-of-loss reinsurance to Glacier Reinsurance AG for U.S. hurricane or U.S. earthquake events. The review for downgrade follows a recent announcement that Glacier Re has incurred approximately $100 million of gross claims related to Hurricane Ike. This is an upward revision from the $65 million initially reported in November 2008 as industry loss estimates have also been revised upward. Glacier Re is currently evaluating the extent to which it has reinsurance protection for these losses, including any potential loss payment obligation from Nelson Re Ltd. under the Class G Reinsurance Agreement. Moody's review will focus on the degree of certainty around Glacier Re's loss estimates, what portion of losses qualify as Subject Business (as deemed by Glacier Re), and what Loss Adjustment Factor(s) will be applied to subject losses. The Loss Adjustment Factors can differ by state. The rating agency noted that Hurricane Ike's complex footprint will likely complicate the loss settlement process for all reinsurers. Hurricane Ike has caused losses in nine states ranging from Texas to Pennsylvania. Various sources estimate that onshore insured losses could range as high as $18 billion and offshore losses could be as high as $6 billion. Moody's does not rate Glacier Re. This rating has been placed on review for downgrade: * Nelson Re Ltd. -- $67.5 million Class G Series 2008-I Principal-at-Risk Variable Rate Notes at B3. The last rating action occurred on June 6, 2008 when Moody's assigned ratings to Nelson Re's Class G, H, and I notes. NEW YORK TIMES: Inks $225MM Sale-Leaseback for Part of HQ Building ------------------------------------------------------------------ The New York Times Company and investment firm W. P. Carey & Co. LLC have entered into a sale-leaseback transaction for $225 million for part of the space that the Times Company owns in its New York headquarters. The purchase was made by W. P. Carey and two of its publicly-held, non-traded REIT affiliates, CPA(R):16 - Global and CPA(R):17 - Global. The transaction encompasses 21 floors, or approximately 750,000 rentable square feet, currently occupied by the Times Company. The 52-story building, designed by Italian architect Renzo Piano and completed in 2007, is located on Eighth Avenue, between 40th and 41st Streets. "W. P. Carey was able to clearly understand our Company, our facility and our objectives," said Janet L. Robinson, president and CEO, the Times Company. "Its history and outstanding reputation in the sale-leaseback industry gave us the confidence that it would be the right firm with which to do this transaction." "W. P. Carey continues to provide - as it has for more than 35 years - sale-leaseback financing to companies in all stages of the credit cycle," noted Gordon F. DuGan, president and CEO, W. P. Carey. "We are proud to work with such a world-class media company and to purchase such a world-class asset. Today's economic environment presents incredible challenges and opportunities, and we look forward to adhering diligently to the defensive, risk management-driven investment strategy that has provided historically solid performance." The lease term is 15 years and there is an option for the Times Company to repurchase the condominium interest for $250 million during the 10th year of the lease term. The rental payment will be $24 million for the first year and will escalate through the term of the lease. The Times Company plans to use the proceeds to retire long-term debt. The Times Company was advised by Andrew Sachs and Michael Rotchford of Cushman & Wakefield. W. P. Carey & Co. LLC (WPC) -- http://www.wpcarey.com-- is an investment management company that provides long-term sale- leaseback and build-to-suit financing for companies worldwide and manages a global investment portfolio worth approximately $10 billion. Publicly traded on the New York Stock Exchange (WPC), W. P. Carey and its CPA(R) series of income-generating, non-traded REITs help companies and private equity firms unlock capital tied up in real estate assets. The W. P. Carey Group's investments are highly diversified, comprising contractual agreements with approximately 300 long-term corporate obligors spanning 28 industries and 14 countries. About The New York Times The New York Times Co., a leading media company with 2008 revenues of $2.9 billion, includes The New York Times, the International Herald Tribune, The Boston Globe, 16 other daily newspapers, WQXR- FM and more than 50 Web sites, including NYTimes.com, Boston.com and About.com. The company was founded in 1896. * * * As reported in the Troubled Company Reporter on Dec. 4, 2008, the NY Times cut its quarterly dividend by 74%, as part of an effort to conserve cash. The NY Times said that it took steps to lower debt and increase liquidity, including reevaluating its assets. The NY Times has laid off employees, merged sections of the NY Times and Globe to reduce printing costs, and consolidated New York area printing plants this year. As reported by the TCR on January 26, 2009, Moody's Investors Service downgraded The New York Times Company's senior unsecured rating to Ba3 from Baa3, the commercial paper rating to Not Prime from Prime-3, and assigned the company a Ba3 Corporate Family Rating, Ba3 Probability of Default Rating, and SGL-3 speculative- grade liquidity rating. The commercial paper rating will be withdrawn. The rating actions conclude the review for downgrade initiated on October 23, 2008. The rating outlook is negative. The TCR said January 22 that Standard & Poor's Ratings Services indicated its rating and outlook on The New York Times Co. (BB- /Negative/--) are not affected by the company's announcement of a private financing agreement with Banco Inbursa and Inmobiliaria Carso for an aggregate amount of $250 million -- $125 million each -- in senior unsecured notes due 2015 with detachable warrants. The senior unsecured notes have a coupon of 14.053%, of which the company may elect to pay 3% in kind, and will rank equally and ratably on a senior unsecured basis with all senior unsecured obligations of the company. Carlos Slim Helu and members of his family own Inmobiliaria Carso (which currently holds 6.9% of the company's class A shares) and are the main shareholders of Grupo Financiero Inbursa S.A B. de C.V., which is the parent company of Banco Inbursa. The New York Times had said proceeds would be used to pay down existing debt, including its $400 million revolver due May 2009 (under which a modest amount is currently outstanding). NEXSTAR BROADCASTING: Says Revenues Up 12% in 4th Quarter 2008 -------------------------------------------------------------- Nexstar Broadcasting Group, Inc. last week reported record financial results for the fourth quarter ended December 31, 2008. Net revenue for the quarter ended December 31, 2008 rose 12.3% to $80.3 million from $71.6 million in the fourth quarter of 2007. Broadcast cash flow totaled $34.7 million in the fourth quarter of 2008, a 23.3% increase from $28.2 million in the same period in 2007. EBITDA increased 25.6% to $30.3 million for the fourth quarter of 2008, compared with $24.1 million in the fourth quarter of 2007, while fourth quarter 2008 free cash flow totaled $7.3 million. For the 2008 full year, net revenue was $284.9 million, an $18.1 million increase over $266.8 million for 2007. Broadcast cash flow in 2008 was $111.7 million compared to $98.5 million for 2007. EBITDA totaled $96.2 million for 2008 compared to $85.1 million for 2007, while free cash flow totaled $26.3 million in 2008. The Company has yet to file its Annual Report on Form 10-K with the Securities and Exchange Commission. Perry A. Sook, Chairman, President and Chief Executive Officer of Nexstar Broadcasting Group, Inc., commented, "Nexstar's double digit fourth quarter net revenue growth highlights strong year- over-year increases in political, retransmission consent and e- MEDIA revenues which helped to offset the impact of the current economy and soft general advertising environment. Fourth quarter net revenue of $80.3 million included approximately $16.6 million of net political advertising revenue and full year 2008 net political advertising revenue reached $28.0 million, in line with our expectations. In 2008, e-MEDIA revenue increased 100% over 2007 levels while full year retransmission consent revenue rose 27% to $21.8 million. "On February 19, Nexstar announced renewed and new multi-year retransmission consent agreements which will contribute more than $75 million in revenues to the Company over the lives of these agreements. Approximately one third of this revenue is expected to be realized in 2009. "We are projecting another year of significant e-MEDIA revenue growth based on the full year benefits of approximately fifteen revenue generating applications that we are now offering across all markets in our platform. We'll also launch Nexstar's community portal e-MEDIA offerings in any new markets that we enter. "Our pending and de-leveraging acquisitions of WCWJ-TV in Jacksonville, Florida and KARZ-TV in Little Rock, Arkansas will also contribute to offsetting the impact of lower political revenues and ongoing industry softness in 2009. In light of the current economic conditions and the absence of significant political revenues this year, Nexstar is taking steps to reduce expenses on all fronts at both the station and corporate levels. "Fourth quarter and full year 2008 cap ex spending was approximately $12.7 million and $30.8 million, respectively, with approximately $10.8 million and $24.4 million of these respective amounts allocated to digital conversions. The Company will incur approximately $5.4 million of capital expenditures in early 2009 to complete the remaining stations' digital television requirements." Outstanding Debt The Company's total net debt at December 31, 2008 was $646.3 million, compared to $665.0 million at December 31, 2007. The total net debt consists of $356.2 million of bank debt, $190.8 million of senior subordinated 7% notes, $37.3 million of senior subordinated 12% PIK notes and $77.8 million of 11.375% senior discount notes, less cash on hand of $15.8 million. During the fourth quarter, the Company repurchased approximately $7.5 million of the 7% senior subordinated notes, resulting in a $2.9 million pre-tax gain. The purchase of these notes was funded with cash flows from operations. As defined in the Company's credit agreement, consolidated total net debt was $609.7 million at December 31, 2008. The Company's total leverage ratio at December 31, 2008 was 6.18x compared to a permitted leverage covenant of 6.50x. Total interest expense in the fourth quarter of 2008 was $12.4 million, compared to $13.8 million for the same period in 2007. Cash interest expense for the fourth quarter of 2008 was $10.7 million, compared to $10.0 million for the same period in 2007. Debt Exchange On February 27, 2009, Nexstar Broadcasting, Inc., an indirect subsidiary of Nexstar Broadcasting Group, commenced an offer to exchange up to $143.6 million aggregate principal amount of its outstanding $191.51 million in aggregate principal amount of 7% Senior Subordinated Notes due 2014 in exchange for (i) up to $143.6 million in aggregate principal amount of Nexstar Broadcasting's 7% Senior Subordinated PIK Notes due 2014 (the "New Notes"), to be guaranteed by each of the existing guarantors to the Old Notes, and (ii) cash. The exchange offer is being conducted upon the terms and subject to the conditions set forth in the Offering Memorandum dated February 27, 2009 and the related letter of transmittal. The exchange offer is subject to certain conditions, including the minimum tender condition, that Nexstar Broadcasting receive valid tenders, not validly withdrawn, of at least $114.9 million of the aggregate principal amount of Old Notes. Documents relating to the exchange offer will only be distributed to holders of Old Notes who complete and return a letter of eligibility confirming that they are within the category of eligible investors for this private offer. Pending Acquisition On January 28, 2009, Nexstar Broadcasting Group entered into a definitive agreement to acquire the assets of WCWJ-TV, the CW affiliate serving the Jacksonville, Florida market, from Media General, Inc. This acquisition marks Nexstar's entree into the State of Florida and will represent the 52nd television station that the Company owns or for which it provides sales, programming or other services. Additionally, the Company's acquisition of KARZ-TV (formerly KWBF-TV) in Little Rock, Arkansas, which was announced on October 7, 2008, was approved on February 26 by the bankruptcy court and closing will occur before the end of March. Guidance Given the uncertain economic environment, the Company has elected to discontinue the practice of providing quarterly guidance for net revenue, station operating expenses and corporate overhead. About Nexstar Broadcasting Group Upon the completion of announced transactions, Nexstar Broadcasting Group will own, operate, program or provide sales and other services to 52 television stations in 30 markets in the states of Illinois, Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania, Louisiana, Arkansas, Alabama, New York and Florida. Nexstar's television station group includes affiliates of NBC, CBS, ABC, FOX, MyNetworkTV and The CW and pro-forma for the completion of all announced transactions, reaches approximately 10 million U.S. television households or approximately 8.8% of all U.S. television households. * * * As reported by the Troubled Company Reporter on December 3, 2008, pursuant to the company's Form 10-Q, as of September 30, 2008, Nexstar's balance sheet shows $665.2 million in total assets, $809.5 million in total liabilities, resulting in $144.3 million in stockholders' deficit. As disclosed in the Troubled Company Reporter on July 4, 2008, Standard & Poor's Ratings Services lowered its corporate credit rating on Nexstar Broadcasting Group Inc. to 'B-' from 'B' and removed the ratings from CreditWatch, where they were placed with negative implications on April 11, 2008. At the same time, S&P lowered the ratings on the company's senior secured credit facilities to 'B+' from 'BB-', and the rating on its unsecured debt to 'CCC' from 'CCC+'. The outlook is stable. NOVA BIOSOURCE: Receives Additional Notice From NYSE ---------------------------------------------------- Nova Biosource Fuels, Inc., said that on February 27, 2009, it received an additional notice from NYSE Alternext US LLC, formerly known as the American Stock Exchange, indicating that the Company was not in compliance with Section 1003(a)(iv) of the NYSE Alternext US LLC Company Guide, formerly the American Stock Exchange Company Guide, in that it has sustained losses which are so substantial in relation to its overall operations or its existing financial resources, or its financial condition has become so impaired that it appears questionable, in the opinion of the Exchange, as to whether the Company will be able to continue operations or meet its obligations as they mature. To maintain its Exchange listing, the Company must submit a plan of compliance by March 30, 2009, advising the Exchange how it intends to regain compliance with Section 1003(a)(iv) of the Company Guide by August 27, 2009. The Corporate Compliance Department of the Exchange will evaluate the plan and make a determination as to whether the Company has made a reasonable demonstration in the plan of an ability to regain compliance with the continued listing standards within the specified timeframe, in which case the plan will be accepted. If the plan is accepted, the Company may be able to continue its listing during the plan period up to August 11, 2009, during which time it will be subject to periodic review to determine whether it is making progress consistent with the plan. If the Company does not submit a plan, if the Company submits a plan that is not accepted or if the plan is accepted but the Company is not in compliance with the continued listing standards at the conclusion of the plan period or does not make progress consistent with the plan during the plan period, the Company may become subject to delisting proceedings in accordance with Section 1010 and Part 12 of the Company Guide. In addition, the Exchange notified the Company that, since October 22, 2008, the Company's common stock has been trading below $0.25 per share and closed at $0.06 on February 26, 2009. The Exchange Staff is concerned that, as a result of its low selling price, the Company's common stock may not be suitable for auction market trading. Therefore, in accordance with Section 1005(f)(v) of the Company Guide, the Exchange notified the Company that it deems it appropriate under the circumstances for the Company to effect a reverse stock split to address its low selling price. If a reverse stock split is not completed in a reasonable amount of time, the Exchange may consider suspending dealings in, or removing from the list, the Company's common stock. There can be no assurance that the Company will be able to effectuate a reverse stock split within the time frame deemed satisfactory by the Exchange or, if effectuated, if a reverse stock split will result in an increase in the selling price of the Company's common stock in an amount sufficient to satisfy the requirements of Section 1005(f)(v) of the Company Guide. About Nova Biosource Fuels Nova Biosource Fuels, Inc. -- http://www.novabiosource.com-- is an energy company that refines and markets ASTM D6751 quality biodiesel and related co-products through the deployment of its proprietary, patented process technology, which enables the use of a broader range of lower cost feedstocks. Nova owns two biodiesel refineries: one in Seneca, Illinois with a nameplate capacity of 60 million gallons per year and one in Clinton, Iowa with a nameplate capacity of 10 million gallons per year. NORTEL NETWORKS: Wins Court Nod to Award Non-Executive Bonuses -------------------------------------------------------------- Nortel Networks Inc. and its affiliates obtained approval from the U.S. Bankruptcy Court for the District of Delaware to implement an incentive plan for all key employees and a retention plan for non- insider employees. Payments under the Key Employee Incentive Plan will be tied to the achievement of three milestones (i) the "North American objectives" of the Nortel companies' cost reduction plan; (ii) the parameters that may result in a leaner and more focused organization; and (iii) the later of the confirmation of the Debtors' plan of reorganization or the Canadian debtors' plan of restructuring and arrangement. The aggregate potential payout under the KEIP will be $23 million by the Nortel Companies (which includes non-debtors), of which up to $14.6 million will be paid by the Debtors. About 880 employees of the Nortel companies -- 446 of whom are employees of the Debtors -- will be covered by the Key Employee Retention Plan. The Debtors are estimated to pay $12.4 million of the $22 million expect to be paid under the KERP. The Court approved the KEIP with respect to officers but excludes members of Nortel's senior leadership team. These excluded employees are the 92 senior managers of Nortel, Bloomberg's Bill Rochelle reported. According to his report, the Debtors will seek approval to pay incentives to the senior managers at a hearing on March 20. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. Nortel Networks Corp., Nortel Networks Inc. and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) OCEAN VILLAGE: Case Summary & Six Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Ocean Village LLC 638 Camino de Los Mares, Ste. H130-488 San Clemente, CA 92673 Bankruptcy Case No.: 09- 11930 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Farm Fresh Ranch Market 08-19738 Type of Business: The Debtors operate a grocery stores and supermarkets. Chapter 11 Petition Date: March 6, 2009 Court: Central District Of California (Santa Ana) Judge: Theodor Albert Debtor's Counsel: William M. Burd, Esq. Burd & Naylor 200 West Santa Ana Blvd., Suite 400 Santa Ana, CA 92701 Tel: (714) 708-3900 Fax: (714) 708-3949 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 ------ --------------- ------------ Stanford Sign & Awning Inc. lawsuit $35,038 256 Faivre Street Chula Vista, CA 91911 Razcool HVAC $16,822 3307 Los Olivos Lane La Crescenta, CA 91214 David J. Harter legal services $5,000 13681 Newport Avenue #8-608 Ferrucci Law Group legal services $5,000 Target Fire Protection fire sprinkler $5,000 Andy's Glass repairs $960 The petition was signed by Ayoub Sesar, managing member. PACIFIC ENERGY: Files for Chapter 11 to Facilitate Restructuring ---------------------------------------------------------------- Pacific Energy Resources Ltd. (TSX: PFE) and its wholly owned subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. The filing was precipitated by the dramatic decrease in the market price of oil over the past five months. Combined with the Company's pre-existing level of debt related to past acquisitions and poor capital market conditions, the Company's liquidity and cash flow is insufficient to operate its business and invest in its oil producing assets to increase production. Faced with these constraints, the Company and its subsidiaries filed petitions for reorganization under chapter 11 to facilitate access to an immediate source of liquidity as it works to restructure its debt In connection with the filing, the Company is seeking customary authority from the Bankruptcy Court that will enable it to continue operating its business in the ordinary course of business. The requested approvals include requests for the authority to make wage and salary payments and continue various benefits for employees. In addition, the Company has negotiated a commitment for $40 million in debtor-in-possession financing. The DIP facility wraps and replaces two of the Company's three asset-based credit facilities and is being provided by the lenders of the two credit facilities that are being replaced. Upon Court approval, the DIP financing combined with the Company's operating revenue will provide sufficient liquidity to fund working capital, meet ongoing obligations and ensure that normal operations continue without interruption during its restructuring. About Pacific Energy Resources Based in Long Beach, California, Pacific Energy Resources Ltd. (TSX: PFE) -- http://www.PacEnergy.com/-- is an oil and gas exploration and production company. PACIFIC ENERGY: Case Summary & 35 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Pacific Energy Resources Ltd. 111 West Ocean Boulevard, Suite 1240 Long Beach, CA 90802 Bankruptcy Case No.: 09-10785 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Petrocal Acquisition Corp. 09-10786 Pacific Energy Alaska Holdings, LLC 09-10787 Carneros Acquisition Corp. 09-10788 Pacific Energy Alaska Operating LLC 09-10789 San Pedro Bay Pipeline Company 09-10790 Carneros Energy, Inc. 09-10791 Gotland Oil, Inc. 09-10792 Type of Business: The Debtors engage in the acquisition and development of oil and gas properties, primarily in the United States. See: http://www.pacenergy.com Chapter 11 Petition Date: March 8, 2009 Court: District of Delaware (Delaware) Judge: Kevin J. Carey Debtor's Counsel: James E. O'Neill, Esq. jo'neill@pszyj.com Kathleen P. Makowski, Esq. kmakowski@pszjlaw.com Laura Davis Jones, Esq. ljones@pszjlaw.com Pachulski Stang Ziehl & Jones LLP 919 N. Market Street, 17th Floor Wilmington, DE 19899-8705 Tel: (302) 652-4100 Fax: (302) 652-4400 Corporate Counsel: Rutan & Tucker LLP Special Oil and Gas Counsel: Schully, Roberts, Slattery & Marino Canadian Counsel: Devlin Jensen Financial Advisor: Zolfo Cooper Investment Bankers: Lazard Freres & Co. LLC and Albrecht & Associates Inc. Noticing and Claim Agent: Omni Management Group LLC Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Forest Oil Corporation loan $31,670,000 707 17th St., Ste. 3600 Denver, CO 80802 Tel: (303) 812-1400 Fax: (303) 812-1445 Marathon Oil Company trade debt $2,952,447 14194 Collection Center Drive Chicago, IL 60693 Tel: (866) 925-6093 Bateman & Co. loan $1,000,000 P.O. Box 792 Cayman Islands, KY-1301 Occidental Petroleum loan $1,000,000 Attn: Mike Gooding 10889 Wilshire Blvd. Los Angeles, CA 90024 Tel: (661) 869-8031 Energy Capital trade debt $974,529 Solutions Attn: Brad Nelson 2651 N. Starwood Ste. 410 Dallas, TX 75201 Tel: (214) 219-8200 Fax: (214) 219-8206 Digitel Data Joint trade debt $503,605 Attn: Angela Hui 10811 Wes1view Center Drive Suite 100 Bldg C Houston, TX 77043-2739 Tel: (832) 351-8022 Fax: (832) 351-8795 AFCO trade debt $317,832 General Petroleum trade debt $205,504 A&E Welding trade debt $142,734 Universal Sodexho trade debt $73,288 Wilson Adam trade debt $69,900 Whale Building LLC trade debt $60,311 John Guzman Crane trade debt $52,640 South Coast Air trade debt $52,324 National Oilwell trade debt $51,072 Sulzer Pumps (US) Inc. Trade debt $46,961 Cameron Surface trade debt $37,360 Systems Landmark Square Co. Trade debt $31,367 LLC ESS Support Services trade debt $30,622 Beecher Carlson trade debt $26,515 The O'brien's Group Inc. Trade debt $25,500 Cook Inlet Region Inc. Trade debt $23,992 The Industrial Company trade debt $23,698 XTO Energy trade debt $23,341 R&T Pacific Associates trade debt $18,004 Marine Preservation trade debt $14,989 Coffman Engineers trade debt $14,813 Prudential insurance $13,940 Udelhoven Oilfield trade debt $12,429 System Bakersfield Pipe & Supply trade debt $12,136 Petros Jackueline trade debt $12,079 B.O.P. Products, LLC trade debt $12,037 TSX Inc. Trade debt $11,802 Cispri trade debt $11,705 Pollard Wireline trade debt $11,490 The petition was signed by Darren Katic, president. PALATIN TECHNOLOGIES: Listing Compliance Plan Accepted by NYSE -------------------------------------------------------------- Palatin Technologies, Inc., reported that its exchange listing compliance plan submitted on January 23, 2009 has been accepted by the NYSE Alternext US LLC. On December 30, 2008, Palatin received notice from the Exchange that it was not in compliance with certain continued listing requirements under Sections 1003(a)(ii) and (iii) of the Exchange's Company Guide related to historical operating losses and shareholders' equity levels. On February 27, 2009, the Exchange notified Palatin that it had accepted Palatin's plan for regaining compliance with the continued listing requirements of Sections 1003(a)(ii) and (iii), and that Palatin's listing on the Exchange was being continued pursuant to an extension. Palatin may be able to continue its listing on the Exchange during the plan period through June 23, 2010, subject to periodic review by the Exchange to determine if Palatin is making progress consistent with the plan. Failure to make progress consistent with the plan or to regain compliance with the continued listing standards by June 23, 2010 could result in Palatin's shares being delisted from the Exchange. If Palatin's common stock was ultimately delisted from the Exchange, it would be expected to trade on the over-the-counter market, such as the OTC Bulletin Board securities market, a regulated quotation service that provides quotes, sale prices and volume information in over-the- counter equity securities. About Palatin Technologies Cranbury, New Jersey-based Palatin Technologies, Inc. (NYSE Alternext US: PTN) -- http://www.palatin.com-- is a biopharmaceutical company focused on discovering and developing targeted, receptor-specific small molecule and peptide therapeutics. PANDA ETHANOL: To "Go Dark" and Deregister With the SEC ------------------------------------------------------- Panda Ethanol, Inc., said that by March 30, 2009, it intends to file a Form 15 with the Securities and Exchange Commission to deregister its common stock under Section 12(g) of the Securities Exchange Act of 1934, as amended, and suspend the company's reporting obligations under Sections 13(a) and 15(d) of the Exchange Act. Upon the filing of the Form 15, the company's obligation to file periodic and current reports with the SEC, including Forms 10-K, 10-Q and 8-K, will be immediately suspended. The company is eligible to file Form 15 because its common stock is held of record by less than 300 persons. Darol Lindloff, the chief executive officer of Panda Ethanol, stated that "after evaluating and discussing the options before the company, especially in light of the bankruptcy filings by our Hereford subsidiaries, the company's board of directors has determined that the benefits of remaining a reporting public company were outweighed by the financial costs of complying with the associated regulatory requirements. As a result, the board has concluded that going dark is in the best interest of the company and its stockholders." On January 23, 2009, the company's subsidiaries holding and managing its Hereford ethanol refinery filed voluntary petitions for relief under Chapter 11 of United States Bankruptcy Code. The company does not anticipate that it or its shareholders will receive any proceeds from the sale of the Hereford facility. The company will continue to manage construction and operations at the Hereford facility during the bankruptcy cases. However, the company no longer has control of the facility and could be replaced as manager upon completion of the sale of the Hereford facility. The company is currently assessing its options with respect to future operations or projects. Due to current economic and market conditions, activities on the company's other development projects are on hold. In connection with the deregistration process, the company's common stock will no longer be eligible for quotation on the OTC Bulletin Board. The company anticipates that its shares of common stock will be quoted on the Pink Sheets, but there can be no assurance that any broker will make a market in the company's common stock. Holders of restricted shares of the company's common stock should be aware that once the company suspends its reporting obligations under the Exchange Act, such holders will no longer be permitted to rely on Rule 144 under the Securities Act of 1933, as amended, to effect public resales of such common stock. Rule 144(i) prohibits the use of Rule 144 for the resale of securities that were issued by a company that was a shell company at or before the time of issuance and that is not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act. The company's predecessor, Cirracor, Inc., was a shell company. About Hereford Biofuels Holdings Hereford Biofuels Holdings, based in Dallas, Texas, and three affiliates filed for Chapter 11 bankruptcy on January 23, 2009 (Bankr. N.D. Tex. Case No. 09-30452). Judge Stacey G. Jernigan presides over the case. Gregory M. Gordon, Esq., at Jones Day, serves as the Debtors' bankruptcy counsel. When it filed for bankruptcy, Hereford Biofuels disclosed $50 million to $100 million in assets and $100 million to $500 million in debts. About Panda Ethanol Headquartered in Dallas, Texas, Panda Ethanol Inc. (OTC BB: PDAE) -- http://www.pandaethanol.com-- is currently developing six 115 million gallon-per-year denatured ethanol projects located in Texas, Colorado and Kansas. Four of these facilities will each generate the steam used in the ethanol manufacturing process by gasifying upwards of 1 billion pounds of cattle manure per year. Panda is currently constructing its first biomass-fueled refinery in Hereford, Texas and anticipates ethanol production to commence during the third quarter of 2008. Once complete, the Hereford facility will be one of the most fuel-efficient ethanol refineries in the nation and the largest biomass-fueled ethanol plant in the United States. Panda Ethanol's founder is Panda Energy International, a privately held company which has built more than 9,000 MW of electric generation capacity at a cost of $5 billion. PILGRIM'S PRIDE: Committee Sues Cobank to Invalidate Liens ---------------------------------------------------------- The official committee of unsecured creditors for Pilgrim's Pride Corp., has commenced a complaint against Cobank ABC, saying the Denver-based bank didn't make the proper filings to have a valid secured claim covering equipment located at plants in 11 states, Bloomberg's Bill Rochelle reported. According to the report, the committee's complaint recites how the bank filed notice of the secured claim in Delaware when it was required by state law to file notices in each state where the equipment is located. 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) PLASTECH ENGINEERED: Reko Gets $1.2MM for Pre-Bankruptcy Goods -------------------------------------------------------------- Reko International Group Inc. disclosed that during its fiscal second quarter ended January 31, 2009, it received a US$1,200,000 settlement from the bankrupt estate of Plastech Engineered Products, Inc. and its affiliates. The settlement related to the Company's claims for deliveries made immediately prior to Plastech filing for Chapter 11 in the U.S. and for administrative claims, representing goods shipped to Plastech after its bankruptcy filing. Approximately US$400,000 of the settlement proceeds related to recoveries previously made by Reko against its accounts receivable insurer and as such were repaid to the accounts receivable insurer. While the settlement concluded Reko's dealings with the bankrupt estate of Plastech, the Company still maintains its secured claims against Chrysler, Ford and GM, related to shipments with Plastech. The settlement proceeds represent only a portion of the Company's accounts receivable due from Plastech and the Company remains exposed to credit risk attached to the remaining accounts receivable balances of US$942,000, the majority of which relate to post-petition purchase orders. The Company currently maintains reserves against this balance, which on a net basis represents management's current best estimate of the net realizable value on the Plastech balances. Based in Windsor, Ontario, Reko designs and manufactures a variety of engineered products and services for original equipment manufacturers and their Tier 1 suppliers. Thes products include plastic injection moulds, fixtures, gauges, lean cell factory automation, high precision custom machining, and assemblies. Customers are typically OEMs or their Tier 1 suppliers and are predominantly in the automotive market. Divisions of Reko are generally invited to bid upon programs comprised of a number of custom products used by the customer to produce a complete assembly or product. About Plastech Engineered Based in Dearborn, Michigan, Plastech Engineered Products, Inc. -- http://www.plastecheng.com/-- is a full-service automotive supplier of interior, exterior and underhood components. It designs and manufactures blow-molded and injection-molded plastic products primarily for the automotive industry. Plastech's products include automotive interior trim, underhood components, bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company, and Toyota, as well as Johnson Controls, Inc. Plastech is a privately held company and is the largest family- owned company in the state of Michigan. The company is certified as a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in the midwestern and southern United States. The company's products are sold through an in-house sales force. The company and eight of its affiliates filed for Chapter 11 protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C., represented the Debtors in their restructuring efforts. The Debtors chose Jones Day as their special corporate and litigation counsel. Lazard Freres & Co. LLC served as the Debtors' investment bankers, while Conway, MacKenzie & Dunleavy provided financial advisory services. The Debtors also employed Donlin, Recano & Company as their claims and noticing agent. Joel D. Applebaum, Esq., at Clark Hill PLC, represented the Official Committee of Unsecured Creditors. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. The Debtors filed their Plan of Liquidation on August 11, 2008. As reported by the Troubled Company Reporter on December 22, 2008, the Court confirmed Plastech's Fifth Amended Joint Plan of Liquidation. The Plan became effective in accordance with its terms on December 31, 2008. (Plastech Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). PLIANT CORP: Deregisters Series AA Preferred Stock -------------------------------------------------- On March 4, 2009, Pliant Corporation filed a Form 15 with the Securities and Exchange Commission to deregister its Series AA preferred stock and suspend its reporting obligations under the Securities Exchange Act of 1934. The Company will cease filing all periodic reports and forms, including Forms 10-K, 10-Q, and 8-K, with the SEC. As a result, the Company's Series AA preferred stock will cease to be eligible to trade on the Over-the-Counter Bulletin Board. Headquartered in Schaumburg, Illinois, Pliant Corporation produces polymer-based films and flexible packaging products for food, beverage, personal care, medical, agricultural and industrial applications. The company has operations in Australia, New Zealand, Germany, and Mexico. The Debtor and 10 of its affiliates filed for Chapter 11 protection on Jan. 3, 2006 (Bankr. D. Del. Lead Case No. 06- 10001). James F. Conlan, Esq., at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway Stargatt & Taylor, represented the Debtors in their restructuring efforts. The Debtors tapped McMillan Binch Mendelsohn LLP, as their Canadian bankruptcy counsel. As of Sept. 30, 2005, the company had $604,275,000 in total assets and $1,197,438,000 in total debts. The Debtors emerged from chapter 11 protection on July 19, 2006. Pliant Corp. and its affiliates again filed for Chapter 11 after reaching terms of a pre-packaged restructuring plan. The voluntary petitions were filed Feb. 11, 2009 (Bank. D. Del. Case Nos. 09-10443 through 09-10451). The Hon. Mary F. Walrath presides over the cases. Jessica C.K. Boelter, Esq., at Sidley Austin LLP, in Chicago, Illinois, and Edmon L. Morton, Esq., at Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, provide bankruptcy counsel to the Debtors. Epiq Bankruptcy Solutions LLC acts as claims and noticing agent. As of September 30, 2008, the Debtors had $688,611,000 in total assets and $1,032,631,000 in total debts. PSYCHIATRIC SOLUTIONS: Moody's Puts Ba3 Rating on $200MM Revolver ----------------------------------------------------------------- Moody's Investors Service assigned a Ba3 (LGD3, 30%) rating to Psychiatric Solutions, Inc.'s new $200 million revolver tranche maturing in 2011. Moody's also affirmed all the current ratings of PSI, including the company's existing revolver tranche maturing in December 2009, which has been reduced to $100 million from $300 million. The rating outlook is stable. The affirmation of PSI's B1 Corporate Family Rating reflects the modest leverage for the rating category, strong cash flow and interest coverage and stable free cash flow generation. However, the rating remains constrained by the risks associated with the company's continuing strategy of using incremental debt for acquisitions. Additionally, while the recent transaction mitigates some of the refinancing risk associated with the December 2009 maturity of its revolver, Moody's believe that the company will likely have to access additional capital to restore additional liquidity and continue to grow though acquisitions at the same pace as it has historically. Moody's rating actions are summarized below. Ratings assigned: -- $200 million senior secured revolving credit facility due 2011, Ba3 (LGD3, 30%) Ratings affirmed/LGD Assessments revised: -- Senior secured revolving credit facility due 2009 (reduced to $100 million from $300 million), to Ba3 (LGD3, 30%) from Ba3 (LGD3, 33%) -- Senior secured term loan due 2012, to Ba3 (LGD3, 30%) from Ba3 (LGD3, 33%) -- Senior subordinated notes due 2015 to B3 (LGD5, 85%) from B3 (LGD5, 87%) -- Corporate Family Rating, B1 -- Probability of Default Rating, B1 Moody's last rating action was on May 9, 2007, when PSI's ratings were affirmed. PSI, headquartered in Franklin, Tennessee, provides a continuum of behavioral health programs to critically ill children, adolescents and adults through its operation of owned or leased psychiatric inpatient facilities. PSI also manages free-standing psychiatric inpatient facilities for government agencies and psychiatric inpatient units within medical and surgical hospitals owned by others. The company recognized approximately $1.8 billion in revenue for the year ended December 31, 2008. REDCORP VENTURES: Obtains CCAA Protection Until April 3 ------------------------------------------------------- Redcorp Ventures Ltd. said that after consideration of all available alternatives, its Board of Directors has determined that it is in the best interests of all of its stakeholders for it and its wholly-owned subsidiary, Redfern Resources Ltd., to seek court protection from creditors under the Companies' Creditors Arrangement Act (Canada). Redcorp and Redfern sought and were granted such protection by order of the Supreme Court of British Columbia on March 4, 2009. The Court has granted CCAA protection for an initial period of 30 days, expiring on April 3, 2009. Redcorp and Redfern will seek other ancillary relief to protect their assets in other jurisdictions. While under CCAA protection, creditors and others are stayed from enforcing any rights against Redcorp and Redfern and the Companies can attempt to restructure their affairs. The implications for Redcorp and Redfern's creditors and other stakeholders will not be known until the terms of the restructuring plan have been determined and the restructuring process is complete. The Companies determined to seek protection under the CCAA because their current financial situation does not permit either company to meet its current and future obligations to holders of Redcorp's senior secured notes, to HSBC Bank Canada in respect of repayment of an $85 million loan facility, and to outstanding commitments to contractors, suppliers and vendors. The Companies have identified a shortfall in available funding to complete the Tulsequah Mine project principally due to an increase in capital expenditures resulting from, amongst other reasons, significant and costly delays in obtaining all necessary permits from regulatory authorities. The cost increase was previously announced on February 17, 2009. In addition to the capital cost increase, Redfern was unable to obtain all of its required permits for barge operations by March 1, 2009, such permits being the milestones toward achieving financing under certain of its existing financing arrangements as announced on October 15, 2008. Redcorp intends to continue its day to day operations during the CCAA restructuring process including identifying and securing the funds necessary to complete the mine build. KPMG Inc. was appointed Monitor under the Order. Inquiries may be directed to: Attention: Mr. Anthony Tillman KPMG Inc. 777 Dunsmuir Street, PO Box 10426 Vancouver, BC V7Y 1K3 Telephone: (604) 646-6332 Facsimile: (604) 691-3036 Email: atillman@kpmg.ca A copy of the Order will be made available on the Monitor's Web site at http://www.kpmg.ca/redcorp Redcorp Ventures Ltd. (CA:RDV) -- http://www.redcorp-ventures.com and http://www.redfern.bc.ca-- is a Vancouver, British Columbia- based mineral exploration and development company with active projects in British Columbia, Canada and Portugal. REDCORP VENTURES: Files Chapter 15 Petition in Seattle ------------------------------------------------------ Redcorp Ventures Ltd. filed a Chapter 15 petition on March 5 before the U.S. Bankruptcy Court for the Western District of Washington. Redcorp is asking the U.S. Bankruptcy to order that its proceedings in under the Companies' Creditors Arrangement Act as the "foreign main proceeding." Redcorp also seeks a stay of all claims and actions against it in the U.S. Redcorp Ventures (TSX:RDV) said March 4 that after consideration of all available alternatives, its Board of Directors has determined that it is in the best interests of all of its stakeholders for it and its wholly-owned subsidiary, Redfern Resources Ltd.,to seek court protection from creditors under the Companies' Creditors Arrangement Act (Canada). Redcorp and Redfern sought and were granted such protection by order of the Supreme Court of British Columbia on March 4. The Court has granted CCAA protection for an initial period of 30 days, expiring on April 3, 2009. Accordingly, Redcorp and Redfern will seek other ancillary relief to protect their assets in other jurisdictions. While under CCAA protection, creditors and others are stayed from enforcing any rights against Redcorp and Redfern and the Companies can attempt to restructure their affairs. The implications for Redcorp and Redfern's creditors and other stakeholders will not be known until the terms of the restructuring plan have been determined and the restructuring process is complete. The Companies determined to seek protection under the CCAA because their current financial situation does not permit either company to meet its current and future obligations to holders of Redcorp's senior secured notes, to HSBC Bank Canada in respect of repayment of an $85 million loan facility, and to outstanding commitments to contractors, suppliers and vendors. The Companies have identified a shortfall in available funding to complete the Tulsequah Mine project principally due to an increase in capital expenditures resulting from, amongst other reasons, significant and costly delays in obtaining all necessary permits from regulatory authorities. The cost increase was previously announced on February 17, 2009. In addition to the capital cost increase, Redfern was unable to obtain all of its required permits for barge operations by March 1, 2009, such permits being the milestones toward achieving financing under certain of its existing financing arrangements as announced on October 15, 2008. Redcorp intends to continue its day to day operations during the CCAA restructuring process including identifying and securing the funds necessary to complete the mine build. KPMG Inc. was appointed Monitor under the Order. Enquiries may be directed to: Attention: Mr. Anthony Tillman KPMG Inc. 777 Dunsmuir Street, PO Box 10426 Vancouver, BC V7Y 1K3 Telephone: (604) 646-6332 Facsimile: (604) 691-3036 Email: atillman@kpmg.ca A copy of the Order will be made available on the Monitor's Web site at www.kpmg.ca/redcorp. Redcorp Ventures Ltd. is a Vancouver-based mineral exploration and development company with active projects in British Columbia, Canada and Portugal. Further information on Redcorp and the Tulsequah Project can be obtained on the Company's website at www.redcorp-ventures.com and at Redfern's website at www.redfern.bc.ca. RICHARD BOKAVICH: Puts Dealership on Sale After Bankruptcy Filing ----------------------------------------------------------------- Christine McConville at Boston Herald reports that South Shore Imported Cars Inc. has put itself up for sale after owners Richard and Rose Bokavich filed for Chapter 11 bankruptcy protection in February. Court documents say that the Debtors hired Jill Beresford as crisis-management consultant in January to stabilize South Shore. Boston Herald relates that a month later, Sovereign Bank filed a lawsuit against South Shore in the Plymouth Superior Court for breach of contract, seeking $6.5 million in damages. The report says that Sovereign Bank financed car sales for South Shore. Ford Credit, Ford Motor Co.'s credit arm, also sued South Shore in February, claiming that the Bokaviches owed it almost $5 million for "failing to remit" sales proceeds, Boston Herald states. The Ford credit arm provided a credit line to South Shore Volvo, the report states. According to Boston Herald, Ms. Beresford asked the court in the Ford Credit case to let South Shore stay open to facilitate a sale and keep its 58 workers working. Ms. Beresford said in court documents, "South Shore desires to wind down its affairs in an orderly fashion." South Shore, according to court documents, has received an offer to purchase the Volvo dealership. Dennis Port, Massachusetts-based Richard and Rose Bokavich run South Shore Volvo in Norwell and Chrysler, Jeep, Dodge, and Volkswagen showrooms in Hanover. The Debtors filed for Chapter 11 bankruptcy protection on February 17, 2009 (Bankr. D. Mass. Case No. 09-11186). Christopher J. Panos, Esq., at Craig and Macauley, P.C., assists the Debtors in their restructuring efforts. The Debtors listed $10 million to $50 million in assets and $10 million to $50 million in liabilities. RIVER WEST MEDICAL: Files for Chapter 11 Bankruptcy Protection -------------------------------------------------------------- Greg Garland at 2theadvocate.com reports that Shiloh Health Services has filed a Chapter 11 bankruptcy petition for River West Medical Center in the U.S. Bankruptcy Court for the Eastern District of Louisiana. Bradley L. Drell, the attorney for River West Medical, decided not to contest an involuntary bankruptcy petition that a group of the hospital's creditors filed on February 6, 2theadvocate.com relates. The report quoted Mr. Drell as saying, "We have essentially consented to put River West into voluntary Chapter 11. We've asked the judge to enter an order doing that." Citing Mr. Drell, 2theadvocate.com states that a health-care ombudsman appointed by the court in February will continue to monitor the quality of care. 2theadvocate.com relates that James R. Cheek, Shiloh Health's principal owner, wants River West Medical to continue to stay open and continue to operate under another owner, if not under Shiloh Health. The report quoted Mr. Drell as saying, "If a buyer would come along, they would have to consider that. I can't say Shiloh will continue to operate it, but someone will." According to 2theadvocate.com, Iberville Parish President J. Mitchell Ourso Jr. has talked about making the hospital a parish- controlled facility. 2theadvocate.com states that Bryan Bogle, River West Medical's former CEO, has also been working with local physicians and state and local officials to try to keep the hospital open. 2theadvocate.com says that River West Medical's former owner, Community Health Services, claimed that it is owed $3.3 million. Other unsecured claims, according to the report, include: -- $2.5 million owed to the U.S. Internal Revenue Service; -- $370,921 owed to GE Healthcare Finance; and -- $184,277 owed to Correct Care Inc. River West Medical Center is a hospital in Plaquemine, Louisiana. RIVIERA HOLDINGS: Moody's Junks Corporate Family Rating from 'B3' ----------------------------------------------------------------- Moody's Investors Service downgraded Riviera Holdings Corporation's Corporate Family Rating, Probability of Default Rating, and senior secured ratings to Caa2 from B3. The ratings were also placed on review for further possible downgrade. The downgrade reflects several key factors that will continue to negatively impact Riviera's ability to service its debt over the next twelve months, most notably the company's significant exposure to the Las Vegas Strip gaming market which will likely see further declines in comparable month gaming revenues through 2009. The downgrade also anticipates that leverage will increase further as a result of continued weak demand trends. Although Riviera has not yet made available its fourth quarter 2008 earnings, the company's year end 2008 leverage could exceed 8 times. Debt/EBITDA for the 12-month period ended September 31, 2008, was already high, at about 7.5 times. Also of concern is Riviera's weak liquidity profile. The company currently has no access to its revolver, and only has a relatively small cash balance as its only form of liquidity. The review for further possible downgrade considers Moody's view that without a very significant improvement in operating results, Riviera's capital structure is not sustainable in its current form, and may require some form of restructuring that involves some level of impairment. The review also incorporates the company's receipt of a notice of technical default on March 3, 2009 by Wachovia Bank. The notice cites Riviera's non-compliance with the requirement to provide a Deposit Account Control Agreement from each of the company's depository banks as requested by Wachovia. Moody's review will focus on Riviera's near-term liquidity position and ability to stem further deterioration in its cash balances and cash flow. The review will also focus on the company's success with respect to curing the technical default. Ratings lowered and placed on review for further possible downgrade: -- Corporate Family Rating to Caa2 from B3 -- Probability of Default Rating to Caa2 from B3 -- $225 million term loan to Caa2 from B3 -- $20 million revolving credit facility to Caa2 from B3 The last rating action for Riviera was on November 12, 2008, when Moody's downgraded the company's Corporate Family Rating, Probability of Default Rating, and senior secured ratings to B3 from B2. Riviera Holdings Corporation owns and operates the Riviera Hotel and Casino on the Las Vegas Strip and the Riviera Black Hawk Casino in Black Hawk, Colorado. Riviera generates annual net revenue of approximately $180 million. ROBBINS BROS: Taps Deloitte FAS as Bankruptcy Reporting Advisor --------------------------------------------------------------- Robbins Bros. Corporation asks authority from the U.S. Bankruptcy Court for the District of Delaware to employ Deloitte Financial Advisory Services LLP as bankruptcy reporting advisor. Deloitte FAS will assist the Debtor in the: a. development of filing strategy; b. development of the creditor matrix; c. development of cash control procedures; d. preparation of necessary schedules, budgets and court related reporting, including the statement of financial affairs, the schedules of assets and liabilities and the monthly operating reports; e. development of the court required records retention process; f. development of a claims administration process; g. other agreed upon tasks as requested by the Debtor. Curtis A. McClam, a principal of Deloitte FAS, tells the Court that the hourly rates of professionals working in this case are: Partner/Principal/Director $770 - $875 Senior Manager $725 - $760 Manager $625 - $655 Senior Consultant $470 - $500 Consultant $375 - $400 Paraprofessional $290 Mr. McClam adds that Deloitte FAS was paid an initial $65,000 prepetition retainer. The Debtor has paid Deloitte FAS a total of approximately $188,000 prior to the petition date, consisting of the retainer and replenishments thereof. Deloitte FAS has been paid prepetition approximately $123,000 to replenish the retainer. There are no amounts owing to Deloitte FAS as of the Petition Date. The balance of the retainer of approximately $39,000 will be applied to Deloitte FAS's postpetition fees and expenses. Mr. McClam assures the Court that Deloitte FAS is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Robbins Bros. Corporation Headquartered in Azusa, California, Robbins Bros. Corporation -- http://www.robbinsbros.com/-- aka William Pitt, Inc. sells jewelries. The Debtors filed for Chapter 11 protection on arch 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. The Debtor selected Omni Management Group LLC to serve as Claims, Noticing and Balloting Agent, Deloitte Financial Advisory Services LLP to serve as Bankruptcy Reporting Advisor, William Blair & Company, L.L.C. to serve as Investment Banker and Deloitte Tax LLP to serves as Tax Advisor. The Debtor listed estimated assets of $50 million to $100 million and estimated debts of $50 million to $100 million. ROBBINS BROS: Taps Omni Management as Claims and Noticing Agent --------------------------------------------------------------- Robbins Bros. Corporation asks authority from the U.S. Bankruptcy Court for the District of Delaware to employ Omni Management Group, LLC, as claims, balloting, noticing and administrative agent and as agent of the Bankruptcy Court. Omni will manage and address the administrative issues that likely will arise in this case. In addition, in connection with any plan of reorganization proposed by the Debtor, Omni will act as solicitation agent with respect to, inter alia, the mailing of a disclosure statement, the plan and related ballots, and maintaining and tallying ballots in connection with the voting on the Plan. Robert L. Berger, a member of Omni fka Robert L. Berger & Associates, Inc., tells the Court that the hourly rates of professionals assigned in this case are: Senior Consultants $195 - $295 Consultants and Project Specialists $75 - $140 Programers $130 - $200 Clerical Support $35 - $65 In the 90 days prior to the petition date, Omni received a $29,5OO prepetition retainer from the Debtor, and incurred fees and expenses of approximately $6,000. There are no amounts owed to Omni as of the petition date. Omni is currently holding the $23,5OO remaining amount of the retainer. Mr. Berger assures the Court that Omni is a "disinterested person' as that term is defined in Section 101(14) of the Bankruptcy Code. About Robbins Bros. Corporation Headquartered in Azusa, California, Robbins Bros. Corporation -- http://www.robbinsbros.com/-- aka William Pitt, Inc. sells jewelries. The Debtors filed for Chapter 11 protection on arch 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. The Debtor selected Omni Management Group LLC to serve as Claims, Noticing and Balloting Agent, Deloitte Financial Advisory Services LLP to serve as Bankruptcy Reporting Advisor, William Blair & Company, L.L.C. to serve as Investment Banker and Deloitte Tax LLP to serves as Tax Advisor. The Debtor listed estimated assets of $50 million to $100 million and estimated debts of $50 million to $100 million. ROBBINS BROS: Wants to Hire Pachulski Stang as Bankruptcy Counsel ----------------------------------------------------------------- Robbins Bros. Corporation asks authority from the U.S. Bankruptcy Court for the District of Delaware to employ Pachulski Stang Ziehl & Jones LLP as counsel. Pachulski will: a. provide legal advice with respect to the Debtor's powers and duties as debtor in possession in the continued operation of their business and management of its property; b. preparing on behalf of the Debtor necessary applications, motions, answers, orders, reports, and other legal papers; c. appear in Court on behalf of the Debtor and in order to protect the interests of the Debtor before the Court; d. prepare and pursue confirmation of a plan and approval of a disclosure statement; and e. perform all other legal services for the Debtor that may be necessary and proper in these proceedings. Pachulski's professionals working in this case and their hourly rates are: Jeffrey N. Pomerantz $675 Bruce Grohsgal $595 Werner Disse $495 Jonathan Kim $495 Beth Dassa $225 Mr. Grohsgal, a partner at Pachulski, tells the Court that his firm has received payments from the Debtor during the year prior to the petition date in the amount of $1,070,000, including the Debtor's aggregate filing fees for these cases, in connection with its prepetition representation of the Debtor. Upon final reconciliation of any balance remaining from the prepetition payments to the firm will be credited to the Debtor and utilized as the firm's retainer to apply to postpetition fees and expenses. Mr. Grohsgal assures the Court that Pachulski is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Grohsgal can be reached at: 919 North Market Street, 17th Floor Wilmington, DE 19899-8705 Tel: (302) 652-4100 Fax: (302) 652-4400 About Robbins Bros. Corporation Headquartered in Azusa, California, Robbins Bros. Corporation -- http://www.robbinsbros.com/-- aka William Pitt, Inc. sells jewelries. The Debtors filed for Chapter 11 protection on arch 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. The Debtor selected Omni Management Group LLC to serve as Claims, Noticing and Balloting Agent, Deloitte Financial Advisory Services LLP to serve as Bankruptcy Reporting Advisor, William Blair & Company, L.L.C. to serve as Investment Banker and Deloitte Tax LLP to serves as Tax Advisor. The Debtor listed estimated assets of $50 million to $100 million and estimated debts of $50 million to $100 million. ROBBINS BROS: Seeks to Employ Deloitte Tax As Advisors ------------------------------------------------------ Robbins Bros. Corporation asks authority from the U.S. Bankruptcy Court for the District of Delaware to employ Deloitte Tax LLP as tax advisor. Deloitte Tax will: a. develop an understanding of the Debtor's operational and federal/state tax history; b. work with the Debtor to prepare estimated tax basis balance sheets and summary of tax attributes; c. discuss potential restructuring alternatives with the Debtor and its advisors; d. develop a tax model with ability to determine how potential structuring alternatives will impact the Debtor and its shareholders currently and prospectively, particularly with respect to the recognition of income from discharge of indebtedness and reduction of attributes; in addition, consider non-income tax issues such as transfer taxes; e. work with the Debtor's management and advisors to develop a proposal to the creditors and provide negotiation support; and f. working with the Debtor's management and advisors to implement the ultimate structure, including an analysis of financing and other transaction documents for tax implications, and analyzing professional fees and other transaction costs to maximize deductions. Dominic Kracht, a principal of Deloitte Tax LLP, tells the Court that Deloitte Tax's hourly rates represent an approximate 25% discount from its standard billing rates. The hourly rates by personnel classification are: Partner/Director $640 Senior Manager $545 Manager $470 Senior Consultant $375 Deloitte Tax was paid an initial prepetition retainer of $25,000. The Debtor paid Deloitte Tax approximately $84,000 prior to the petition date, which consisted of the Retainer and replenishments thereof. There are no amounts owing to Deloitte Tax as of the Petition Date. The balance of approximately $22,000 will be applied to Deloitte Tax's postpetition fees and expenses. Mr. Kracht assures the Court that Deloitte Tax is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Robbins Bros. Corporation Headquartered in Azusa, California, Robbins Bros. Corporation -- http://www.robbinsbros.com/-- aka William Pitt, Inc. sells jewelries. The Debtors filed for Chapter 11 protection on arch 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. The Debtor selected Omni Management Group LLC to serve as Claims, Noticing and Balloting Agent, Deloitte Financial Advisory Services LLP to serve as Bankruptcy Reporting Advisor, William Blair & Company, L.L.C. to serve as Investment Banker and Deloitte Tax LLP to serves as Tax Advisor. The Debtor listed estimated assets of $50 million to $100 million and estimated debts of $50 million to $100 million. SIRIUS XM RADIO: Liberty Media Closes Investment ------------------------------------------------ On March 6, 2009, SIRIUS XM Radio Inc. (NASDAQ: SIRI) and Liberty Media Corporation (NASDAQ: LINTA, LINTB, LCAPA, LCAPB, LMDIA, LMDIB) disclosed the closing of the second, and final, phase of the previously announced investment by Liberty in SIRIUS XM. Mel Karmazin, Chief Executive Officer of SIRIUS XM Radio, said, "We are excited to have closed the second and final phase of our investment agreement with Liberty Media. It is an example of the confidence our lenders and Liberty have in our business model. These transactions resolve all of the uncertainty surrounding the company's and its subsidiaries' debt maturing in 2009. Having addressed our near-term financial obligations, we remain focused on continuing to deliver on all the promise of the merger of SIRIUS and XM -- a more efficient company offering the best programming through new packages to more subscribers." "We are pleased to have completed the second phase of this investment," said Greg Maffei, president and CEO of Liberty. "This closing allows Liberty to align itself with one of the most exciting companies in media today." SIRIUS XM also announced that XM Satellite Radio, a wholly owned subsidiary of SIRIUS XM, amended and extended its existing $350 million credit facilities. XM Satellite Radio's existing term loan and revolving loan have been rolled into a single term loan facility. As previously agreed, Liberty has purchased $100 million aggregate principal amount from the lenders. Liberty has committed to loan an additional $150 million to XM Satellite Radio, to be used to repay a portion of the outstanding principal amount of 10% Convertible Notes due December 1, 2009, of XM Satellite Radio Holdings Inc. Under the existing terms of their agreement, SIRIUS XM has issued Liberty an aggregate of 12.5 million shares of new preferred stock convertible into 40% of the common stock of SIRIUS XM. J.P. Morgan Securities acted as financial advisor to SIRIUS XM in connection with the transactions. UBS and Lazard Freres & Co. LLC acted as financial advisors to Liberty Media Corporation. About Sirius XM Radio Headquartered in New York, Sirius XM Radio Inc. (SIRI) -- http://www.sirius.com/-- formerly Sirius Satellite Radio Inc., is a satellite radio provider. The company offers over 130 channels to its subscribers, 69 channels of 100% commercial-free music and 65 channels of sports, news, talk, entertainment, traffic, weather, and data content. Its primary source of revenue is subscription fees, with most of its customers subscribing to SIRIUS on either an annual, semi-annual, quarterly or monthly basis. The company derives revenue from activation fees, the sale of advertising on its non-music channels, and the direct sale of SIRIUS radios and accessories. Various brands of SIRIUS radios are Best Buy, Circuit City, Costco, Crutchfield, Sam's Club, Target and Wal-Mart. * * * As reported by the Troubled Company Reporter on Jan. 20, 2009, Standard & Poor's Ratings Services said it lowered its corporate credit rating on Sirius XM Radio Inc. to 'CCC' from 'CCC+'. S&P also lowered the issue-level ratings on the debt of Sirius XM Radio Inc. and of Sirius' unrestricted subsidiaries, XM Satellite Radio Holdings Inc. and XM Satellite Radio Inc., which remain on CreditWatch, though the implications are revised to negative from developing. S&P could affirm or lower the issue-level ratings pending S&P's review of additional information and follow-up discussions with management. The outlook is negative. New York City-based Sirius XM had total debt outstanding of $3.37 billion as of Sept. 30, 2008. SMITH MOUNTAIN: Failure to Find Buyer Leads to Bankruptcy --------------------------------------------------------- Courtney Cutright at The Roanoke Times reports that Smith Mountain Lake Partners LLC has filed for Chapter 11 bankruptcy protection after failing to find buyers for the Sunset Cay residential real estate. According to The Roanoke Times, Smith Mountain filed for Chapter 11 protection in February 2009 in the U.S. Bankruptcy Court for the Western District of Virginia, listing liabilities in excess of $7 million and assets of $6.5 million. Smith Mountain, says The Roanoke Times, owes StellarOne Bank about $8.1 million. The report states that StellarOne filed civil suits in Bedford County Circuit Court against six co-signers on the $8.1 million debt. Court documents say that Smith Mountain hasn't paid StellarOne "a penny" since June 2008. Citing Jim Fields of Smith Mountain, The Roanoke Times relates that the bankruptcy filing won't affect The Shoppes at Sunset Cay and the former Campers Paradise site. These properties, according to the report, will be affected: -- nine lots with residential dwellings, -- 22 undeveloped lots, -- 28 undeveloped residential acres, and -- seven underdeveloped commercial acres. The Roanoke Times relates that Mr. Fields, of Forest, and his wife, Linda, each own 23% of the shares in Smith Mountain. Court documents say that the largest shareholder, Sue Kelly, owns 30% of the company. According to court documents, Ms. Kelly gave an unsecured loan of more than $766,000 to Smith Mountain. Lynchburg, Virginia-based Smith Mountain Lake Partners LLC is a limited liability company developing homes at Sunset Cay in Moneta. The company filed for Chapter 11 bankruptcy protection on February 12, 2009 (Bankr. Va. Case No. 09-60435). Darren T. Delafield, Esq., who has an office in Roanoke, Virginia, assists the company in its restructuring effort. The company listed $6,500,001 in assets and $7,002,943 in liabilities. SMURFIT-STONE: Creditors Seek Return of Pre-Bankruptcy Deliveries ----------------------------------------------------------------- Pursuant to Sections 503(b)(9) and 546(c) of the Bankruptcy Code, 36 creditors of Smurfit-Stone Container Corp. and its debtor- affiliates seek the return of goods that were delivered to the Debtors within the 45-day period before the Petition Date: Amount Creditors Asserted --------- -------- Sun Automation, Inc. $1,600,614 Kemira Chemical, Inc. 927,340 Finnchem USA, Inc. 866,197 PPG Industries, Inc. 725,618 Publix Super Markets, Inc. 557,543 Nalco Company 543,190 Massey Coal Sales Company 451,010 Shrieve Chemical Company 419,118 Office Paper Systems, Inc. 376,558 Atlantic Coated Papers Ltd. 350,442 David Cutler Industries, Ltd. 317,865 Speqtrum 317,167 Canal Wood LLC 302,659 Mitsubishi Heavy Industries America, Inc. 276,445 Esko Graphics, Inc. 178,789 Pinecrest Timber Company 150,184 Carotek, Inc. 126,054 Calpine Containers, Inc. 124,485 Edelstein Diversified Specialties, Ltd.; 119,201 Echotape USA, Inc.; and Edelstein Diversified Co. Ltd. Crop Production Services, Inc. 115,747 Papco, Inc. 94,792 The Cline Company 66,552 VSP Technologies 55,165 Luzenac America, Inc. 54,971 Southern Fasteners and Supply, Inc. 50,275 Metso Automation USA, Inc. 43,572 29,793 Budnick Converting, Inc. 42,636 Air Products and Chemicals, Inc. 3,117 Peak Technologies, Inc. See http://bankrupt.com/misc/PeakTechRecClaims.pdf DCP Midstream Marketing LLC See http://bankrupt.com/misc/DCPReclamation.pdf Sun Chemical Corporation See http://bankrupt.com/misc/SunChemicalReclamation.pdf Corn Products International, Inc. See http://bankrupt.com/misc/CornProdReclamation.pdf Xerium Technologies, Inc., et al. See http://bankrupt.com/misc/XeriumReclamation.pdf Chicago Electric Sales, Inc. See http://bankrupt.com/misc/ChicagoElectricReclamation.pdf GLV, Inc. See http://bankrupt.com/misc/SmurfGLVInc.pdf Shell Energy North America (US) LP Invoices not included in filing In separate filings, eight creditors seek allowance and immediate payment of their administrative expenses pursuant to Section 503(b)(9) of the Bankruptcy Code, relating to the prior delivery of goods to the Debtors 20 days before the Petition Date and in the ordinary course of business. The Creditors are: Amount Creditors Asserted --------- -------- Kentucky Cumberland Coal Company 972,877 General Chemical Performance Products LLC 154,407 Henkel Corporation 109,967 Berman Printing Company 94,306 International Baler Corporation 68,870 Balfour Timber Company, Inc. 65,666 Wilmington Paper Corp. 16,245 RGT Logistics LLC 14,502 Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The company employs approximately 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the company reported approximately $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed to reorganize under Chapter 11 on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. According to Bloomberg News, Smurfit-Stone joins other pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corp. Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC, acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: Gets Go-Signal to Hire Lazard As Investment Banker ----------------------------------------------------------------- Smurfit-Stone Container Corp. and its debtor-affiliates sought and obtained authority from the U.S. Bankruptcy Court for the District of Delaware to employ Lazard Freres & Co. LLC to perform investment banking and financial advisory services for the Debtors in their Chapter 11 cases, nunc pro tunc to the Petition Date. The Debtors submitted that there were no objections to their request. As reported by the Troubled Company Reporter on February 12, 2009, the Debtors disclosed that since November 11, 2008, Lazard has provided general investment banking and financial advice in connection with the Debtors' attempts to complete a strategic restructuring, reorganization or recapitalization, and to prepare for the commencement of the Chapter 11 cases. In providing prepetition services to the Debtors, Lazard's professionals have worked closely with the Debtors' management and other professionals and have become well acquainted with the Debtors' operations. As investment banker, Lazard will: (a) review and analyze the Debtors' business, operations and financial projections; (b) evaluate the Debtors' potential debt capacity in light of its projected cash flows; (c) assist in the determination of a capital structure for the Debtors; (d) assist in the determination of a range of values for the Debtors on a going concern basis; (e) advise the Debtors on tactics and strategies for negotiating with the Stakeholders; (f) render financial advice to the Debtors and participate in meetings or negotiations with the Stakeholders or rating agencies or other appropriate parties in connection with any restructuring; (g) advise the Debtors on the timing, nature and terms of new securities, other consideration or other inducements to be offered pursuant to the restructuring; (h) advise and assist the Debtors in evaluating potential financing transactions, subject to Lazard's agreement to act, and, if asked, execute appropriate agreements, on behalf of the Debtors, contact potential sources of capital as the Debtors may designate and assist the Debtors in implementing the Financing; (1) assist the Debtors in preparing documentation within Lazard's area of expertise that is required in connection with the Restructuring; (j) if mutually agreed by Lazard and the Debtors, assist the Debtors in identifying and evaluating candidates for a potential Sale Transaction, advise the Debtors in connection with negotiations and aid in the consummation of a Sale Transaction; (k) attend meetings of the Debtors' Board of Directors and its committees with respect to matters on which Lazard has been engaged to advise the Debtors; (l) provide testimony, as necessary, with respect to matters on which Lazard has been engaged to advise the Debtors in any proceeding before the Bankruptcy Court; and (m) provide the Debtors with other financial restructuring advice. Since 1990, Lazard's professionals have been involved in over 250 restructurings, representing over $1,000 billion in debtors' assets, including the Chapter 11 cases of: * Adelphia Communications Corporation; * Calpine Corporation; * Lehman Brothers Holdings, Inc.; * Tropicana Entertainment, LLC; * Movie Gallery, Inc.; * New Century TRS Holdings, Inc.; * Northwest Airlines Inc.; * Owens Coming Corp.; * Vertis Holdings, Inc.; * WCI Communities, Inc.; and * Wellman, Inc. The Debtors will pay Lazard: (a) a monthly fee of $250,000, payable on the 11th day of each month until the earlier of the consummation of a restructuring or the termination of Lazard's engagement. All Monthly Fees paid in excess of $1,000,000 will be credited against any restructuring fee, financing fee, or, if applicable, sale transaction fee payable; provided, that, the credit will be reduced pro tanto to the extent that fees are not approved by the Bankruptcy Court; (b) restructuring fee equal to $9,000,000 upon consummation of any restructuring; (c) fee, payable upon consummation of a financing for which the Debtors and Lazard agreed in writing. One-half of any financing fee paid will be credited against any restructuring fee subsequently payable; and (d) sale transaction fee upon consummation based on the aggregate consideration calculated. One-half of any fee paid will be credited against any Restructuring Fee subsequently payable. For the avoidance of any doubt, more than one fee may be paid; provided that in no event will the aggregate of all fees payable to Lazard exceed $13,000,000. In addition to any fees that may be payable to Lazard and, regardless of whether any transaction occurs, the Debtors will promptly reimburse Lazard for all reasonable expenses and other reasonable fees and expenses. The Debtors will indemnify, hold harmless and reimburse Lazard and its affiliates and directors, officers, members, employees, agents and controlling persons of both the firm and its affiliates for any loss, claim, damage, liability or expense relating to, arising out of or in connection with Lazard's engagement by the Debtors. However, the Debtors will not be required to indemnify any Indemnified Party for any loss, claim, damage, liability or expense that is finally adjudicated by a court of competent jurisdiction to have primarily resulted from the Indemnified Party's willful misconduct, bad faith or gross negligence. David Kurtz, a managing director of Lazard, said his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code and (b) does not hold or represent an interest adverse to the Debtors' estates. About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The company employs approximately 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the company reported approximately $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed to reorganize under Chapter 11 on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. According to Bloomberg News, Smurfit-Stone joins other pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corp. Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC, acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: Required to Obtain Workers' Insurance in Florida --------------------------------------------------------------- Florida Self-Insurers Guaranty Association, Inc. asks the U.S. Bankruptcy Court for the District of Delaware to require Smurfit- Stone Container Corp. and its debtor-affiliates to obtain workers' compensation insurance for their Florida workers' compensation claims that will arise on or after February 25, 2009. In the State of Florida, an employer must either obtain and keep insurance for payment of workers' compensation claims under Chapter 440 of the Florida Statutes or it must be self-insured pursuant to the provisions of applicable state law. Theodore J. Tacconelli, Esq., at Ferry Joseph & Pearce P.A., in Wilmington, Delaware, relates that the Debtors have chosen to be self-insured for the payment of Florida workers' compensation claims. Accordingly, the Debtor has become a member of the Florida Self-Insurers Guaranty Association, Inc., as required by state law. FSIGA exists to guarantee the payment of workers' compensation claims to the employees of self-insured members by and through the creation of an insolvency fund which is operated and controlled by FSIGA. Mr. Tacconelli points out that pursuant to Florida Statutes, once a member files for bankruptcy protection, that member is an insolvent member. Therefore, FSIGA and the Fund are obligated to guarantee the payment of workers' compensation claims to the Debtor's employees in the state of Florida only for incidents and injuries which occurred before the Petition Date or within 30 days of the Petition Date. Mr. Tacconelli contends that failure to maintain adequate workers' compensation insurance will subject the Debtors' estate to administrative claims if employees suffer an injury on the job postpetition. The latest actuarial estimate on March 31, 2008, reveals that the existing prepetition workers' compensation claims of the Debtor for its Florida employees total $5,523,515, Mr. Tacconelli says. To secure the obligations of the Debtor owed to its Florida employees and FSIGA, Mr. Tacconelli relates that FSIGA holds a letter of credit issued by JP Morgan Chase amounting to $5,523,515. The Debtor carries excess insurance for workers' compensation claims within the state of Florida, but the retention under the policy is $1,500,000 per incident. Mr. Tacconelli explains that for any one incident, excess insurance does not begin to cover the claim until payments by the Debtors toward the claim exceed $1,500,000. In light of the lack of coverage of the FSIGA insolvency fund, the current amount of security deposit held by FSIGA, Mr. Tacconelli contends that there is no "appropriate insurance" for claims which occur on or after February 25, 2009, and the estate and its Florida employees are at risk. About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The company employs approximately 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the company reported approximately $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed to reorganize under Chapter 11 on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. According to Bloomberg News, Smurfit-Stone joins other pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corp. Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC, acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: To Walk Away From 31 Leases & 78 Contracts --------------------------------------------------------- Smurfit-Stone Container Corp. and its debtor-affiliates sought and obtained authority from the U.S. Bankruptcy Court for the District of Delaware to reject more than 60 executory contracts and 14 unexpired leases of nonresidential real property. In a separate request, the Debtors seek permission to reject 17 leases and 18 executory contracts. The Debtors said the Rejected Contracts constitute agreements that are no longer beneficial or necessary to the Debtors' business operations while the Rejected Leases are no longer used by the Debtors and have already been vacated. A schedule of the 60 Executory Contracts is available for free at: http://bankrupt.com/misc/SmurfRejCons.pdf A copy of the 18 Executory Contracts is available for free at: http://bankrupt.com/misc/SmurfContracts2.pdf A schedule of the 14 Leases is available for free at: http://bankrupt.com/misc/SmurfRejLeases.pdf A copy of the 17 Leases is available for free at: http://bankrupt.com/misc/SmurfLeases2.pdf 200 Hollister and Cabot Responds Prior to the Court's ruling, 200 Hollister Associates LLC, the landlord of a lease which the Debtors seek to reject, notified the Court that, in one of the exhibits, the Debtors set Hollister II Associates LLC as the landlord of the Lease. Robert J. Katzenstein, Esq., at Smith Katzenstein & Furlow LLP, in Wilmington, Delaware, said 200 Hollister acquired the Lease from Hollister II, therefore 200 Hollister is the real counterparty in interest with respect to the Lease. Mr. Katzenstein told the Court that 200 Hollister takes no position with respect to the Debtors' request to reject the Lease, however, 200 Hollister opposed the Debtors' request to reject the Lease effective as of February 5, 2009, the date the Debtors' request was filed. Although the Debtors previously vacated the premises covered by the Lease, Mr. Katzenstein noted that the Lease was not terminated. Accordingly, he argued that retroactive rejection of the Lease would prejudice 200 Hollister because it would impose an obligation to pay costs associated with the property, like real estate taxes and insurance, during a period in which 200 Hollister has been legally prohibited form capitalizing on its ownership interest in the property. For these reasons, 200 Hollister asked the Court that if it authorizes the Debtors to reject the Lease, the rejection should be made effective as of the date the Court's order is entered. Cabot Acquisition LLC, another party to a certain unexpired nonresidential real property lease which the Debtors are currently seeking to reject, also asked the Court that any order rejecting leases of unexpired nonresidential property must not be retroactive. They also asked the Debtors to immediately surrender possession of the Cabot Lease to Cabot. Judge Brendan Linehan Shannon authorized the Debtors to reject the Leases and Executory Contracts effective as of February 5, 2009. However, with respect to the 200 Hollister and Cabot Leases, the Leases are deemed rejected as of February 23, 2009. About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The company employs approximately 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the company reported approximately $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed to reorganize under Chapter 11 on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. According to Bloomberg News, Smurfit-Stone joins other pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corp. Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC, acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SOLSTICE LLC: Files for Chapter 11 in Manhattan ----------------------------------------------- Solstice LLC and affiliates filed Chapter 11 petitions on March 5 in the U.S. Bankruptcy Court for the Southern District of New York. According to Bloomberg, Solstice has 94 members who paid a refundable deposit as much as $1.95 million each. Annual dues are up to $86,000. Membership deposits represent debt of $61.6 million. Bloomberg's Bill Rochelle relates the company exhausted its cash and is in default on a $23.6 million loan from Fortress Credit Funding IV LP. Mr. Rochelle, citing a court filing, said Fortress is giving the company 160 days to pay down some of the debt by selling four properties and 10 months to refinance. Solstice intends to finance its Chapter 11 case with $1.3 million loaned by 23 members, Bloomberg added. Based in San Francisco, California, Solstice LLC and affiliates operate luxury destination homes and a yacht in the U.S., Europe and Latin American. Solstice disclosed $67.8 million in assets against liabilities totaling $106 million. SOLSTICE LLC: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Solstice, LLC dba Solstice Collection 1 Beach Street, 1st Floor San Francisco, CA 94133 Bankruptcy Case No.: 09-11010 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- 163 Charles Street No. 4 New York, LLC 09-11011 163 Charles Street No. 5 New York, LLC 09-11012 Parallel Aspen, LLC 09-11013 Parallel Management LLC 09-11014 Sea Vision I, LLC 09-11015 Solstice Management, LLC 09-11016 Solstice Ownership I, LLC 09-11017 Solstice Ownership II, LLC 09-11018 Solstice Ownership III, LLC 09-11019 Solstice Ownership IV, LLC 09-11020 Solstice Ownership V, LLC 09-11021 Solstice Ownership VI, LLC 09-11022 Solstice Ownership VII, LLC 09-11023 Parallel I LLC 09-11024 Type of Business: The Debtor operates a resort property club. Chapter 11 Petition Date: March 5, 2009 Court: Southern District of New York (Manhattan) Judge: Robert E. Gerber Debtor's Counsel: Arthur Jay Steinberg, Esq. asteinberg@kslaw.com King & Spalding LLP 1185 Avenue of the Americas New York, NY 10036 Tel: (212) 556-2100 Fax: (212) 556-2222 Estimated Assets: $500,000 to $1 million Estimated Debts: $50 million to $100 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ David Grieve. Jim McCullough, Trade debt $1,437,000 Dennis Higgs, Jo hn Hoffman, John Williams Attn: Peter Wohlfeiler 465 First Street West Second Floor Sonoma, CA 95476-6660 Tel: (707) 935 -3700 Winston & Strawn LLP Legal services $1,220,486 36236 Treasury Center Chicago, IL 60694 Tel: (312) 558-5600 Andrew Harper Trade debt $1,008,000 Andrew Harper Travel, Inc. 600 Congress Avenue Suite 1400 Austin, TX 78701 Tel: (512) 904-7320 The 2M Group Trade debt $952,152 30 Liberty Ship Way Suite 3330 Sausalito. CA 94965 (415) 331-3338 Cas par Schuebbe Contract for $286,864 purchase Passport to Italy Trade debt $178,051 Ben Sinnott Loan $150,000 McColl Partners Trade debt $126,745 Moller Willrich Architecture Trade debt $117,428 and Design The Wolff Company Consultant $75,117 Fees Banca Nazionale del Lavaro Bank charge $69,980 Victoria Sebastiani, Trustee Rent $58,075 American Express Trade debt $57,772 Chase Card Services Trade debt $43,700 Two Man Crew, Inc. Trade debt $41,967 Novogradac & Company Accounting $39,137 Summit Engineering, Inc. Trade debt $32,822 The Soho Hotel Rent $32,081 Banca Popular di Roma Bank charge $29,965 Weinstock & Scavo P.C. Legal lees $22,190 The petition was signed by Carolyn Rockafellow, chief executive officer. SPIRE CORP: Receives Notice of Non-Compliance from Nasdaq --------------------------------------------------------- Spire Corporation received on March 3, 2009, a Staff Determination Letter from The Nasdaq Stock Market indicating that the Company has not regained compliance with Nasdaq Marketplace Rule 4450(b)(1)(A) as the market value of the Company's common stock has remained below the minimum $50,000,000 required for continued inclusion on The Nasdaq Global Market. Accordingly, its common stock is subject to delisting from The Nasdaq Global Market. The Company has requested a hearing before a Nasdaq Listing Qualifications Panel to review the Staff Determination. The request for a hearing will stay the Staff Determination and, as a result, the Company's common stock will remain listed on The Nasdaq Global Market until the Panel issues its decision after the hearing. There can be no assurance the Panel will grant the Company's request for continued listing. The Company expects to regain compliance with alternative continued listing requirements upon the filing of its Annual Report on Form 10-K for 2008, whereby the Company believes it will meet both (i) Marketplace Rule 4450(b)(1)(B), which alternatively requires total assets and total revenue of at least $50,000,000 each for the most recently completed fiscal year or two of the three most recently completed fiscal years and (ii) Marketplace Rule 4450(a)(3), which alternatively requires stockholders' equity of at least $10 million. About Spire Corporation Based in Bedford, Massachusetts, Spire Corporation -- http://www.spirecorp.com/-- is a global solar company providing turnkey production lines and capital equipment to manufacture photovoltaic modules worldwide. Spire Semiconductor provides processing technology for Spire's silicon solar cell manufacturing lines and offers custom gallium arsenide cells for solar concentrator systems. STANDARD PACIFIC: Weak Cash Flow Cues Moody's Junk Rating from B2 ----------------------------------------------------------------- Moody's Investors Service lowered all of the ratings of Standard Pacific Corp., including the company's corporate family rating to Caa1 from B2, senior unsecured notes to Caa1 from B2, and senior sub notes to Caa3 from Caa1. The speculative grade liquidity assessment was affirmed at SGL-3, and the ratings outlook is negative. This concludes the review for downgrade process that was initiated on February 4, 2009. The downgrades reflect Moody's expectation that Standard Pacific's cash flow performance will weaken considerably in 2009 and be followed by an even weaker 2010. While the company has already picked the low hanging fruit with regard to its cash flow generation (i.e., by greatly reducing inventory and spec builds), the company faces the additional pressure of having to collapse certain of its joint ventures and bring onto its books both the land and the debt of these joint ventures. Exacerbating these pressures is the fact that the company came in below its minimum operating cash flow to interest coverage ratio during its fourth quarter that ended December 31, 2008, thus requiring the setting aside of about $121 million of its roughly $625 million of year- end cash. In addition, the company faces debt maturities for each of the next seven years. The downgrades also consider that while the company's revenue run rate has deteriorated by about 75% since 2005 and net worth by even more, total homebuilding debt has barely budged over this time period, thus driving debt leverage to about 81%. Moody's anticipates that the thin net worth buffer of about $380 million will be further reduced by continuing impairment charges during the year. Finally, Moody's is projecting that the company will continue generating operating losses well into 2010. At the same time, the ratings are supported by the company's unrestricted current cash position of about $500 million, which will be augmented by an approximate $114 million income tax refund, and absence of any material covenant compliance requirements, save for the cash flow coverage test. The negative outlook reflects the expectation of Moody's Corporate Finance Group that housing market conditions will worsen in 2009, the bottom is not yet visible, government actions will be helpful largely at the margin, liquidity will remain tight and lender behavior uncertain, and 2009 will be a year of greatly reduced deliveries. Going forward, the ratings could be lowered further if the company were to engage in a distressed bond exchange and/or deplete its cash reserves either through sharper-than-expected operating losses or through a sizable investment or other transaction. 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 reduce debt leverage to a more manageable 60 - 70% target level. These rating actions were taken: -- Corporate family rating lowered to Caa1 from B2; -- Probability of default rating lowered to Caa1 from B2; -- Senior unsecured notes lowered to Caa1 (LGD4, 50%) from B2 (LGD4, 53%); -- Senior subordinated notes ratings lowered to Caa3 (LGD6, 95%) from Caa1 (LGD-6, 93%); -- Speculative grade liquidity affirmed at SGL-3. All of Standard Pacific's debt is guaranteed by its principal operating subsidiaries. Headquartered in Irvine, California and begun in 1966, Standard Pacific Corp. constructs and sells single-family attached and detached homes, with homebuilding operations located in California, Texas, Arizona, Colorado, Florida, North and South Carolina, and Nevada. Homebuilding revenues and consolidated net income (before allocation to preferred stockholders) for 2008 were approximately $1.5 billion and ($1.2) billion, respectively. STERLING MINING: In Talks with Minco to Settle Lease Dispute ------------------------------------------------------------ Minco Silver Corporation discloses that it is working closely with counsel to Sterling Mining Company and the Trustee in Bankruptcy to expeditiously resolve all of the outstanding issues surrounding a lease to the Sunshine Mine. As reported by the Troubled Company Reporter on February 6, 2009, Sterling Mining said it was considering all alternatives available to it to guard its assets and preserve value for its shareholders including the filing of a reorganization case under the Bankruptcy Laws and in accordance with Idaho corporate law. Sterling Mining at that time clarified news articles indicating that the Company had "lost" the lease on the Sunshine Mine located near Kellogg, Idaho, and the owner of the Mine, Sunshine Precious Metals intended to repossess the property. Sterling Mining said that SPMI has in the past and continues to claim that material defaults have occurred in several provisions of the mining lease. These allegations, Sterling Mining said, have been responded to in a timely manner and the Company does not believe that any of the defaults are material or non-curable, although these issues will ultimately likely be determined through the judicial process. The Company said it was maintaining a small crew at the mine on a 24- hour basis for security and basic maintenance. About Minco Silver Based in Vancouver, British Columbia, Minco Silver Corporation (CA:MSV: news , chart , profile ) is a TSX listed company focusing on the acquisition and development of silver dominant projects. The Company owns 90% interest in the world class Fuwan Silver Deposit, situated along the northeast margin of the highly prospective Fuwan Silver Belt. About Sterling Mining Based in Coeur d'Alene, Idaho, Sterling Mining Company (OTCBB:SRLM and FSE:SMX) -- http://www.SterlingMining.com/-- is a mineral resource development and exploration company. The Company has a long term lease on the Sunshine Mine in North Idaho's Coeur d'Alene Mining District. The Sunshine Mine is comprised of 5,930 patented and unpatented acres, and historically produced over 360 million ounces of silver from 1884 until its closure in early 2001. Sterling Mining leased the Sunshine mine in June 2003, along with a mill, extensive mining infrastructure and equipment, a large land package, and a database encompassing a long history of exploration, development and production. As of September 30, 2008, Sterling Mining had $31.9 million in total assets, and $13.2 million in total current liabilities and $1.6 million in total long-term liabilities. Sterling Mining filed for bankruptcy protection on March 3, 2009 (Bankr. D. Idaho Case No. 09-20178). Bruce A. Anderson, Esq., at Elsaesser Jarzabek Anderson Marks & Elliott in Coeur d'Alene, as bankruptcy counsel. STRUCTURAL INVESTMENTS: Involuntary Chapter 11 Case Summary ----------------------------------------------------------- Alleged Debtor: Structural Investments & Planning VII, LLC 5125 E. Thomas Road Phoenix, AZ 85016 Case Number: 09- 03942 Involuntary Petition Date: March 5, 2009 Court: District of Arizona (Phoenix) Judge: Eileen W. Hollowell Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Peter Workum monies loaned $20,000 4301 N 21st St. #42 Phoenix, AZ 85016 Greg Harrington monies loaned $10,000 2210 Blake St., Lot 303 Denver, CO 80204 Ralph Klein consulting fees $5,500 2251 N. Rampart #332 Las Vegas, NV 89128 THIELE MANUFACTURING: In Dispute With Union After Chap. 11 Filing ----------------------------------------------------------------- Shawn Piatek at The Tribune-Democrat reports that Thiele Manufacturing, LLC, is facing five separate unfair labor charges from the United Mine Workers District 2. The union filed the charges against Thiele Manufacturing with the National Labor Relations Board, according to The Tribune-Democrat. Thiele Manufacturing has filed for Chapter 11 bankruptcy protection in December 2008, court documents say. The Tribune- Democrat relates that the bankruptcy filing came two months after Thiele Manufacturing laid off its union labor force of about 60 employees. The Triune-Democrat states that Ed Begovich, international representative for the union, said that the charges against Thiele Manufacturing include: -- failure to bargain in good faith, -- attempt to directly deal with union employees, -- coercion and intimidation of employees, and -- failure to provide requested information. Almost 30 workers have been called back to work at Thiele Manufacturing since the middle of December, The Tribune-Democrat says, citing Mr. Begovich. According to the report, Mr. Begovich said that Thiele Manufacturing hasn't respected bargained rules on calling workers back to work based upon seniority, and instead has started advertising for and hiring employees off the street for positions that could be filled by union workers remaining on furlough. The Tribune-Democrat states that the employees continue to operate without a contract. The union, says the report, has accused Thiele Manufacturing of patently refusing to recognize grievances filed by members of the bargaining unit. About Thiele Manufacturing Pittsburgh, Pennsylvania-based Thiele Manufacturing, LLC, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Western District of Pennsylvania on December 19, 2008 (Bankr. W.D. Pa. Case No. 08-28469). Richard R. Tarantine, Esq., who has an office in Pittsburgh, Pennsylvania, assists the company in its restructuring effort. The company listed $1,000,001 to $10,000,000 in assets and $1,000,001 to $10,000,000 in liabilities. VALLEJO CITY: Loses $4.2MM Economic Dev't Administration Grant -------------------------------------------------------------- The Vallejo city's bus transit center project has lost a $4.2 million Economic Development Administration grant, Jessica A. York at Vallejo Times-Herald reports, citing Public Works Director Gary Leach. According to the Times-Herald, Vallejo requested last year a funding for a planned Vallejo Station bus transit center project. The Times-Herald, citing Economic Development Program Manager Susan McCue, relates that the application was rejected due to the city's bankruptcy. Mr. McCue, according to the report, said that city officials want the federal agency to cite specific regulations that allowed the rejection. "It's a great project that we thought was going to work out. We obviously have requested the policy, the regulation, that they are relying upon to deny it based on our bankruptcy," the report quoted Mr. McCue as saying. Mr. McCue said that the grant would have required matched funding from state and regional transportation dollars, but none from Vallejo, the Times-Herald reports. Vallejo spent more than $3 million on bankruptcy-related costs through December 2008, says the Times-Herald. The report states that the city would spend $2 million in fiscal year 2009-2010, in addition to the $1.2 million budgeted for the rest of the current fiscal year. About the City of Vallejo Vallejo -- http://www.ci.vallejo.ca.us/GovSite-- is a city in Solano County. As of the 2000 census, the city had a total population of 116,760. It is located in the San Francisco Bay Area on the northern shore of San Pablo Bay. The City is a charter city organized and exercising governmental functions under its charter and the laws and constitution of the state. Its governing body is its City Council. The City filed for protection under Chapter 9 of the U.S. Bankruptcy Code on May 23, 2008 (Bankr. E.D. Calif. Case No. 08-26813). Marc A. Levinson, Esq., and Norman C. Hile, Esq., at Orrick, Herrington & Sutcliffe LLP in Sacramento, California, represent the City. According to Vallejo's comprehensive annual report for the year ended June 30, 2007, the city has $983 million in assets and $358 million in debts. (Vallejo Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). VICORP RESTAURANTS: Wants Plan Filing Period Extended to June 4 --------------------------------------------------------------- VI Acquisition Corp. and VICORP Restaurants, Inc., ask the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive periods to file a plan until June 4, 2009, and their exclusive period to solicit acceptances of a plan until July 31, 2009. This is the Debtors' third motion for the extension of their exclusive periods to file and solicit acceptances of a plan. The Debtors say they require additional time in which to conclude the sale of substantially all of their assets and to work with the Official Committee of Unsecured Creditors and creditor constituencies toward the formation of a plan. Headquartered in Denver, Colorado, VICORP Restaurants, Inc. and VI Acquisition Corp. -- http://www.vicorpinc.com/-- operate family- dining restaurants under the Village Inn and Bakers Square brands. The Debtors also operate 3 pie production facilities that produce pies that are offered in the Debtors' restaurants and are sold to select third-party customers including supermarkets and other restaurant chains. The Debtors filed separate petitions for Chapter 11 relief on April 3, 2008 (Bankr. D. Del. Lead Case No. 08-10623). Kimberly Ellen Connolly Lawson, Esq., Kurt F. Gwynne, Esq., and Richard A. Robinson, Esq., at Reed Smith LLP, Ann C. Cordo, Esq., and Donna L. Culver, Esq., at Morris Nichols Arsht & Tunnell, and Joseph E. Cotterman, Esq., at Gallagher & Kennedy, P.A., represent the Debtors as counsel. The Debtors selected The Garden City Group, Inc. as their claims agent. Abhilash M. Raval, Esq., Dennis Dunne, Esq., and Samuel Khalil, Esq., at Milbank Tweed Hadley & McCloy LLP, Domenic E. Pacitti, Esq., and Michael W. Yurkewicz, Esq., at Klehr Harrison Harvey Branzburg & Ellers, represent the Official Committee of Unsecured Creditors of the Debtors. When the Debtors filed for protection from their creditors, they listed estimated assets of $100 million to $500 million and debts of $100 million to $500 million. VISTEON CORP: Fitch Downgrades Issuer Default Rating to 'C' ----------------------------------------------------------- Fitch Ratings has downgraded the Issuer Default Rating (IDR) of Visteon Corporation to 'C' from 'CC', indicating that a default is imminent or inevitable. The ratings have been removed from Rating Watch Negative, where they were placed on Dec. 11, 2008. The continuing decline in global automotive production is expected to result in continued negative cash flows at Visteon for at least the next year, further draining the company's limited excess liquidity. Visteon has virtually no access to external sources of new capital, and existing sources are constricting. Visteon has a maturity of $207 million in senior unsecured notes in 2010, and Fitch expects some form of default to occur (either a coercive debt exchange or a Chapter 11 filing). Visteon experienced a 43% reduction in fourth quarter revenues due to the accelerating decline in global automotive production and currency effects. Global sales and production trends point to little improvement through 2009. Fitch projects that Visteon will likely be unable to generate free cash flow sufficient to cover required capital expenditures and interest over the near term. Visteon had cash of $1.2 billion at Dec. 31, 2008, but liquidity is likely to become strained in 2009 due to continued operating losses, restructuring costs, cash needed on hand to run the business, cash held in overseas or joint-venture operations, and intra-period/seasonal cash swings. Liquidity has become more strained as availability under the company's ABL and receivable securitization facilities has declined due to a decline in the value or amount of eligible collateral. Fitch expects that similar to Delphi, Visteon could experience a substantial dismantling of its domestic operations with little or no recoveries projected for unsecured debt holders. Original equipment manufacturers are likely to quickly re-source, re-direct or repossess equipment and contracts necessary to ensure a continued supply of parts in the event that a financial restructuring is not smoothly accomplished. Given the condition of the industry, the lack of external capital, and the lack of viability of a large portion of Visteon's domestic business, there is a higher than average likelihood of a more disruptive bankruptcy process. Although Ford may be forced to commit financing to ensure continued production at key Visteon operations -- through the repurchase of various assets, assisted sales, etc. -- Fitch expects any support to be targeted and insufficient to finance a broader restructuring. Although the federal government task force appears to be looking at various forms of financial assistance to the auto supply base, Fitch does not expect any direct form of financial assistance to Visteon that would substantially defer Visteon's expected financial restructuring. Fitch expects that the ABL holders will achieve full recovery (RR1) based on collateral coverage. Availability under the facility has been reduced in line with declining collateral values (receivables, inventories and certain domestic PP&E) thereby providing protection to outstanding loans. Secured term loan holders are expected to recover only 30%-50% of face values as the lack of financial covenants provided little protection for lenders during the recent past as Visteon and the industry experienced deep financial stress, a steep decline in operating performance, and a drop in asset values. A large portion of recovery values is expected to arise from overseas joint- venture holdings, although these values have also declined in line with the global automotive production downturn. Recovery values are also expected to be impacted by other non-debt, on and off- balance sheet claimants such as the PBGC and the UAW. Fitch rates Visteon: Visteon -- ABL facility assigned 'B-/RR1'; -- Senior secured term loan downgraded to 'C/RR4' from 'CC/RR4'; -- Senior unsecured notes affirmed at 'C/RR6'. WHIRLPOOL CORP: S&P Assigns 'BB+' Subordinated Debt Rating ---------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its preliminary 'BBB-' senior unsecured debt rating to Whirlpool Corp.'s well-known seasoned issuer shelf registration for debt securities filed on Feb. 19, 2009 in accordance with Rule 415 of the SEC. At the same time, S&P assigned its preliminary 'BB+' subordinated debt rating to Whirlpool for securities filed under the same shelf registration. The ratings on Whirlpool reflect its strong brand recognition, global leadership position in the mature and concentrated major appliance industry, and geographic diversity. S&P believes exposure to deteriorating economic conditions in key markets will likely hamper the company's operating performance, resulting in weakened credit measures over the near term. Ratings List Whirlpool Corp. Corp. credit rating BBB-/Stable/A-3 Ratings Assigned Senior unsecured debt rating (prelim) BBB- Subordinated debt rating (prelim) BB+ WHOLE FOODS: Federal Trade Settlement Won't Affect Moody's Rtngs. ----------------------------------------------------------------- Moody's Investors Service said the announcement by Whole Foods Market, Inc., that it has reached a settlement agreement resolving the Federal Trade Commission antitrust challenge to Whole Food's August 2007 acquisition of Wild Oats Markets, Inc has no immediate impact on Whole Foods' Ba3 Corporate Family Rating or the negative outlook. Moody's last rating action on Whole Foods was on March 4, 2009, when the company's Corporate Family Rating was confirmed at Ba3 with a negative rating outlook. Whole Food Markets, Inc. is the world's largest natural and organic food retailer. The company currently generates annual revenue of about $8 billion. WOOD STRUCTURES: Files for Chapter 11 in Portland, Maine -------------------------------------------------------- Wood Structures Inc. has filed for Chapter 11 protection before the U.S. Bankruptcy Court for the District of Maine (Portland). Wood Structures filed after the secured lender, Orix Financial Corp., declared the Company in default under a $28.9 million secured debt, Bloomberg's Bill Rochelle reported. According to the report, the company filed a motion seeking authorization to use the cash representing collateral for Orix's loan. Wood Structures recorded a loss of $5.7 million on sales of $79.7 million in 2008. In its bankruptcy petition, the company estimated assets of less than $10 million and debt exceeding $10 million. The Biddeford, Maine-based Wood Structures Inc. is a manufacturer of trusses and other wood products for residential and commercial construction. YANKEE CANDLE: Jan. 3 Balance Sheet Upside-Down by $2.82 Million ---------------------------------------------------------------- Yankee Holding Corp. and subsidiaries had $1.372 billion in total assets, and $1.375 billion in total liabilities, resulting in $2.82 million in stockholders' deficit as of January 3, 2009. Yankee Holding and The Yankee Candle Company, Inc. last week announced financial results for the fourth quarter and full year ended January 3, 2009. Total revenue for the fourth quarter was $264.3 million, a 7.2% decrease from the prior year fourth quarter. The fourth quarter of fiscal 2008 consisted of 14 weeks as compared to 13 weeks for the fourth quarter of fiscal year 2007. Comparing similar 13 week periods, total revenue decreased by 11.9%. The Company said the decrease in revenue was a result of the deteriorating economic environment, a decrease in sales in Home Specialty Channel within its Domestic Wholesale business, driven by the bankruptcy of Linens-N-Things and to a lesser extent a decrease in Retail comparable store sales of 9.4%. The Company completed its annual impairment testing of goodwill and indefinite-lived intangible assets as of November 1, 2008. Based on the analysis, the Company determined that the carrying value of each of its four reporting units exceeded their fair value. This was primarily caused by a decline in the Company's estimated future discounted cash flows for each reporting unit driven by the current adverse economic market conditions. As a result of this analysis, the Company recorded an impairment charge of $462.6 million which included $375.2 million for goodwill and $87.4 million for tradenames during the fourth quarter ended January 3, 2009. The impairment does not have any impact on the Company's liquidity, covenant compliance, or borrowing capacity. The Company incurred a net loss of $398.9 million for the fourth quarter of 2008 compared with net income of $38.7 million in the fourth quarter of 2007. Excluding the goodwill and tradename asset impairment, and expenses and purchase accounting adjustments related to its 2007 merger, fourth quarter 2008 net income was $32.0 million compared to $40.5 million for the prior year quarter. During the fourth quarter of 2008, the Company incurred negative EBITDA of $376.9 million compared to positive EBITDA of $103.7 million generated for the prior year quarter. Adjusted EBITDA for the quarter was $99.2 million, or 37.5% of sales, compared to $103.6 million, or 36.4% of sales, for the prior year quarter, a decrease of 4.2%. Fiscal Year 2008 Results Total revenue for the 2008 fiscal year was $713.7 million, a 3.1% decrease from the 2007 fiscal year. The 2008 fiscal year consisted of 53 weeks as compared to 52 weeks for the fiscal year 2007. Comparing similar 52 week periods, total sales decreased by 5.0%. Retail sales were $410.3 million for the year ended January 3, 2009, a $2.6 million or 0.6% increase from the year ended December 29, 2007. For the year ended January 3, 2009, the Company incurred a net loss of $409.3 million compared with net income of $2.7 million for the year ended December 29, 2007. Net income prior to the impact of the goodwill and tradename asset impairment, and expenses and purchase accounting adjustments related to the Merger was $28.5 million for the year ended January 3, 2009, compared to net income of $48.8 million for the year ended December 29, 2007. For the year ended January 3, 2009, the Company incurred negative EBITDA of $293.7 million compared to positive EBITDA of $139.4 million for the year ended December 29, 2007. The decrease in EBITDA was driven primarily by the goodwill and tradename impairment and restructuring charge in 2008 while transaction related expenses and purchase accounting adjustments associated with the Merger negatively impacted prior year results. For the year ended January 3, 2009, Adjusted EBITDA was $184.6 million or 25.9% of sales compared to $197.0 million or 26.7% of sales for the year ended December 29, 2007, a decrease of 6.3%. Craig Rydin, Chairman and Chief Executive Officer, commented, "Given the unprecedented macroeconomic environment, which impacted consumer purchasing behavior during the important fourth quarter, our teams worked very hard to mitigate the challenges we and other consumer facing companies were faced with. We proactively focused on productivity initiatives and a reduction in our expenses and cost structure, while we concurrently focused our efforts on optimizing profitable revenue. While these economic and consumer spending headwinds ultimately caused us to fall short of our internal revenue projections, we believe our efforts enabled us to nonetheless achieve relatively strong performance in this challenging environment, particularly with respect to adjusted EBITDA, cashflow and debt reduction." About Yankee Candle Based in South Deerfield, Massachusetts, The Yankee Candle Company, Inc. designs, manufactures, and is a wholesaler and retailer of premium scented candles. Yankee has a 39-year history of offering distinctive products and marketing them as affordable luxuries and consumable gifts. The Company sells its products through a North American wholesale customer network of 19,689 store locations, a growing base of Company owned and operated retail stores (491 located in 43 states as of January 3, 2009 including 28 Illuminations stores), direct mail catalogs, its Internet Web sites -- http://www.yankeecandle.com, http://www.illuminations.comand http://www.aromanaturals.com Outside of North America, the Company sells its products primarily through its subsidiary, Yankee Candle Company (Europe), Ltd., which has an international wholesale customer network of 2,994 store locations and distributors covering approximately 23 countries. Yankee Holding Corp. is a holding company formed in connection with the Company's Merger with an affiliate of Madison Dearborn Partners, LLC on February 6, 2007, and is now the parent company of The Yankee Candle Company, Inc. YELLOWSTONE CLUB: Court Defers Plan Process Until April 1 --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Montana has postponed to April 1 the hearing in connection with Yellowstone Mountain Club LLC's Chapter 11 plan. The Bankruptcy Court was expected to consider approval of the disclosure statement to the Chapter 11 plan on March 4, but unfolding events required the Court to alter the schedule, Bloomberg's Bill Rochelle said. The Plan contemplated the sale of Yellowstone's project to private-equity investor CrossHarbor Capital Partners LLC or whoever made the highest offer at auction. According to Mr. Rochelle, before the hearing, Credit Suisse Group AG, as agent for existing secured lenders owed $307 million, filed a motion asking the Court to determine the amount and validity of its claim. Credit Suisse says the disclosure statement can't be approved until the Court has determined how much of the claim is valid. The Court, Mr. Rochelle says, scheduled an April 1 hearing to fix the amount of the secured Credit Suisse claim. Credit Suisse also said in a court filing that the proposed plan isn't confirmable because it assumes the claim is invalid. The official committee of unsecured creditors of Yellowstone filed a lawsuit on March 3 aimed at invaliding the Credit Suisse claim while recovering $146 million Yellowstone paid on what was originally $375 million in loans, Mr. Rochelle says. The complaint cites the loan agreement as saying $352 million of the loan, made in September 2005, wouldn't be used for Yellowstone itself. The complaint contends Credit Suisse knew the loan would be used for the personal benefit of the owners, Timothy Blixseth and his wife Edra Blixseth, or companies they controlled. Yellowstone has lost its exclusive rights to file a plan. About Yellowstone Club Located near Big Sky, Montana, Yellowstone Mountain Club LLC -- http://www.theyellowstoneclub.com/-- is a private golf and ski community with more than 350 members, including Bill Gates and Dan Quayle. The Company was founded in 1999. As reported in the Troubled Company Reporter on Nov. 13, 2008, Yellowstone Club filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Montana. In its bankruptcy petition, it listed debts of more than $360 million. YOUNG BROADCASTING: Gets Final Approval to Use Cash Collateral -------------------------------------------------------------- Young Broadcasting Inc., obtained final approval from the U.S. Bankruptcy Court for the Southern District of New York to use cash representing collateral for secured lenders' claims, Bloomberg's Bill Rochelle said. According to Bloomberg, the company said that its $21.4 million cash would be sufficient to support operations without a need for outside financing. Pursuant to a fourth amended and restated credit agreement dated May 3, 2005, Young Broadcasting owes Wachovia Bank, National Association, $338.1 million in loans, secured by substantially all of the Debtor's assets. The Debtor also owes $484 million on subordinated notes. As adequate protection, Young Broadcasting said it will grant Wachovia (i) additional replacement security interests and liens in the prepetition collateral, (ii) allowed superpriority administrative expense claim, and reimbursement of its professional fees, among other things. About Young Broadcasting Young Broadcasting, Inc. -- http://www.youngbroadcasting.com/-- owns 10 television stations and the national television representation firm, Adam Young Inc. Five stations are affiliated with the ABC Television Network (WKRN-TV - Nashville, TN, WTEN-TV - Albany, NY, WRIC-TV - Richmond, VA, WATE-TV - Knoxville, TN, and WBAY-TV -Green Bay, WI), three are affiliated with the CBS Television Network (WLNS-TV - Lansing, MI, KLFY-TV - Lafayette, LA and KELO- TV - Sioux Falls, SD), one is affiliated with the NBC Television Network (KWQC-TV - Davenport, IA) and one is affiliated with MyNetwork (KRON-TV - San Francisco, CA). In addition, KELO- TV-Sioux Falls, SD is also the MyNetwork affiliate in that market through the use of its digital channel capacity. The Debtor and its debtor-affiliates filed for Chapter 11 protection on February 13, 2009 (Bankr. S.D. N.Y. Lead Case No.: 09-10645). Jo Christine Reed, Esq. at Sonnenschein Nath & Rosenthal LLP represents the Debtors in their restructuring efforts. The Debtors proposed UBS Securities LLC as consultant; Ernst & Young LLP as sccountant; Epiq Bankruptcy Solutions LLC as claims agent; and David Pauker chief restructuring officer. The Debtors listed total assets of $575,600,070 and total debts of $980,425,190. * Hearing on BAPCPA's 7-Month Lease Rule Set for March 11 --------------------------------------------------------- Bloomberg's Bill Rochelle reports that a congressional hearing on whether to modify or eliminate the requirement for assuming or rejecting real-estate leases within 210 days of a Chapter 11 filing was rescheduled to March 11 from March 3. In April 2005, Congress revised the Bankruptcy Code to counter abuses in the bankruptcy system. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 shortened debtors' time to decide on whether to assume or reject leases to a mere seven months, disallowed periodic extensions of the debtors' exclusive periods to file a plan of reorganization, and limited bonuses to managers through the key employee retention programs. "BAPCPA's numerous creditor-friendly amendments and modifications have profoundly impacted the Chapter 11 process, to the point that it is nearly impossible for retailers to reorganize, regardless of the prevailing national and international economic conditions," said Lawrence C. Gottlieb, Michael Klein, Ronald R. Sussman, in an article titled BAPCPA's Effects on Retail Chapter 11s Are Profound. The article notes that BACPCA amended Section 365(d)(4) to require debtors to assume or reject their real property leases within 120 says of filing, subject to an additional 90-day court-approved extension. Extensions beyond this initial 210-day period cannot be granted without the consent of the landlord, regardless of the size of the retailer. According to Bankruptcy Creditors Service, Inc., many retailers filed for bankruptcy with a prospect for reorganizing, but ended up closing their stores and liquidating inventory. Retailers covered by BCSI that were unable to keep their business or sell their business as a going concern include Circuit City Stores, Inc., Linens 'n Things, Inc., Mervyn's LLC, Sharper Image and Levitz. The mere 210-day period to decide on the leases, among other changes, provided by the BAPCPA is viewed in some quarters as causing retailers to begin liquidating unnecessarily within three months into Chapter 11, Bloomberg's Bill Rochelle said. Bob Duffy, senior managing director at FTI, said in an article posted at www.turnaround.org, that BAPCPA critics contend that the shortened timetable have had a chilling effect on lenders' willingness to commit normal debtor-in-possession financing to a debtor. By accelerating the timetable to reject store leases, BAPCPA has unwittingly put at risk the value of a retail debtor's two largest sources of collateral: inventory and store leases that can be assigned. Alan D. Smith, Esq., at Perkins Coie LLP, in an article posted at The Journal Corporate Renewal, said that while the 210-day period may be long enough to determine which leases are under market and thus more valuable for assignment/sale purposes, it often is not nearly enough time to determine whether a debtor will survive in its current form, whether it must reduce its operations in certain geographic or other markets and, most significantly, which locations will be most attractive to potential purchasers of the business. Robert L. Eisenbach III, Esq., at Cooley Godward Kronish LLP, said that in the past, retailers usually evaluated sales at stores for at least one holiday shopping season, and sometimes two, before deciding whether to retain the store. Now a retailer has only seven months to make that decision. Pre-BAPCPA, debtors initially had only 60 days to decide on leases, but they were allowed to seek extensions without any statutory limitation. Mr. Smith added prior to the BAPCPA, many retail and other debtors also raised significant amounts of money by selling "lease designation rights" to one of a handful of real estate groups that specialized in that arena. In such a sale, a debtor obtained cash and relief from post-petition rent obligations immediately because the designation rights buyer assumed the obligation to pay all regularly recurring occupancy costs. "BAPCPA effectively killed that market," Mr. Smith said. He noted that even if a debtor could easily identify surplus locations, the Section 365(d)(4) does not provide enough time to produce a meaningful return on most real estate portfolio. * Junk Default Rate Rises to 5.2% in February, Says Moody's ----------------------------------------------------------- Moody's Investors Service said March 5 that the global junk bond default rate rose to 5.2% in February from 4.8% in January. Measured by dollar amount, the default rate in February was 6.7%. Thirteen of the 17 defaulters were in the U.S. Moody's predicts that the junk default rate will top out at 15.3% in the fourth quarter. Reuters said that pushing defaults higher were several major bankruptcies as a global credit crisis and recession took a toll. According to the report, among defaulters were Aleris International, BearingPoint Inc , Muzak LLC, Pliant Corp and Spectrum Brands , all of which filed for bankruptcy protection. "The high level of uncertainty surrounding the potential length and severity of the current global economic downturn implies similarly high uncertainty for model-based forecasts of default rates," Kenneth Emery, Moody's director of corporate default research, said in a statement. * Moody's Comments on Deep Discount Substitution Amendments ----------------------------------------------------------- In response to inquiries from the managers of collateralized loan obligation transactions seeking to amend their indentures to permit deep discount obligation substitutions, Moody's Investors Service confirmed that certain types of DDO substitution proposals may not have a negative impact on the ratings of the associated CLOs. The term "deep discount obligation" refers to assets that are purchased by a CLO at a price significantly below par. DDOs are generally defined in CLO indentures as (1) loans purchased below 80% of par, regardless of their ratings, or (2) loans purchased below 85% of par if rated below B3. Typical provisions in CLOs effectively limit DDO purchases by requiring the CLO to account for DDOs at their purchase price for the purpose of calculating over collateralization ratios. Whether an obligation is a DDO is considered on an asset-by-asset basis, and not by averaging the prices of several assets purchased at the same date. These provisions are intended to mitigate potential adverse selection and to facilitate the proper operation of the over collateralization and cash diversion mechanisms in the CLOs. However, the current dislocation in the loan market has created a situation in which a loan price of 80% to 85% no longer signals a deep discount relative to the average market price. CLO indentures sometimes restrict the ability of managers to substitute one DDO for another. However, in its June 24, 2004 publication, CDO Rating Factors vol. 1 no. 5 entitled "Haircuts for Excess Caa Assets and Deep Discount Obligations," Moody's describes certain price, rating and concentration limits which it believes are likely to be sufficient to ordinarily protect a transaction from significant potential increases in credit risk due to sales or substitutions of DDOs. The primary drivers for this conclusion are: * The primary incentive for effecting a DDO substitution is to maintain or improve the portfolio credit quality by selling an asset that the collateral manager believes is deteriorating and may default, and replacing it with another asset that the manager believes will perform better. * The main credit risks to DDO substitution are: * The manager may unintentionally purchase a new asset that ultimately performs worse than the existing asset. * The manager may intentionally use DDO substitution to artificially build par in the CLO through adverse selection and allow excess spread to be released to the equity, thereby circumventing the structural mechanisms intended to divert cash flows to senior notes upon par deterioration. * By purchasing a single asset at a price at or above that of the existing asset and at a rating at or above that of the existing asset, the risk that the new asset will have credit performance that is worse than the existing asset is mitigated, especially when combined with the more overarching incentive to maintain or improve the portfolio as described above. While the new asset may ultimately perform worse than the substituted asset, there should be no clear indication to the collateral manager at the time of the substitution that this will be the case. * By limiting the amount of substitutions and by limiting substitutions to single-asset-for-single-asset substitutions at the same or higher price, the risk of potential adverse selection to artificially inflate the overcollateralization ratio is also mitigated. Moody's anticipates that most amendments that are in line with the DDO substitution provisions in its June 2004 publication should not, in and of themselves, result in downgrades or withdrawals of its ratings at the time of such amendments. However, the credit implications of each amendment will be considered on an individual basis. In addition, Moody's may consider, on a case-by-case basis, other CLO amendments to allow for DDO substitutions that do not conform to some or all of the conditions discussed in its June 2004 publication. Each amendment will be assessed as to whether or not Moody's expects it to have a negative ratings impact. Many CLO documents (to which Moody's is never a party) specify that, in order to amend the documents, the issuer must obtain an opinion from the rating agencies that the proposed amendment would not in and of itself result in the related ratings being downgraded or withdrawn at the time of the amendment. This type of provision is typically referred to in the CLO indenture as a "rating agency confirmation," or "RAC". Moody's is never obligated to provide a RAC and the decision whether or not to issue a RAC lies entirely within Moody's sole discretion. Before providing a RAC for a proposed DDO substitution amendment, the proposal will be reviewed by a Moody's credit committee which will consider, among other things, the performance of the specific CLO and collateral manager and the specifics of the proposed amendment and the particular structure of the CLO. A RAC is purely an opinion as of the point in time at which the RAC is provided, that the proposed amendment in isolation does not introduce sufficient additional credit risk so as to negatively impact the related ratings. In other words, it does not consider the impact of other factors on the ratings, such as collateral deterioration. Also, the RAC does not address any other, non- credit related impact that the amendment might have. Moody's further emphasizes that a RAC is not a substitute for noteholder consent or for independent analyses by noteholders of the impact on them of any proposed amendment. * Greenhill Forms Financing Advisory & Restructuring Group ---------------------------------------------------------- Greenhill & Co., Inc., announced a significant expansion of its capability to advise clients globally on a wide variety of financing matters, including debt restructurings, by adding senior bankers in New York and London. Signifying the broad scope of financing advice needed by clients in the current economic environment, the Firm is establishing a Financing Advisory & Restructuring Group, which will incorporate the Firm's historic restructuring advisory activities as well as these additional recruits. "The continued market turmoil is increasingly causing companies to seek independent advice on financing matters. This can range from advice on potential financing and refinancing opportunities to advice on major restructurings, including in bankruptcy. These senior additions, combined with the resources we already have committed to this area and further additions we expect to make, position us to be a major player in what is sure to be a wave of complex refinancings and restructurings that will last for years to come," said Robert F. Greenhill, Chairman. "While we made a large number of senior additions to the Firm in 2008, the flow of talented bankers looking to move to Greenhill has further accelerated since year end. It is increasingly apparent that our simple, transparent, client focused business model is the platform of choice for top tier investment bankers who want to focus on advising their clients. We intend to continue to use this period of turmoil at our major competitors to extend our advisory capability to new industry sectors, new geographies and, in this case, advice on new types of situations," said Scott L. Bok and Simon A. Borrows, Co-Chief Executive Officers. Including these additions, the Firm's total Managing Directors count stands at 51, up 46% since the beginning of 2008. Ken Goldsbrough has 29 years of banking and investment banking experience. Most recently, he spent four years at GE Capital, where he led a team providing debt and equity to European telecom, media and technology companies. Prior to his time at GE he spent 16 years at Banque Paribas and previously worked at Dresdner Kleinwort Benson and Standard Chartered. "One of the unique features of Greenhill has been our global reach and diversity of revenue across geographies. We are focused on building out a significant European capability in financing advisory and restructuring alongside our North American capability," said Mr. Borrows. Andrew Kramer has 16 years experience working with companies and related parties in distressed situations across a wide range of industries, culminating in his becoming Head of Restructuring for the Americas at UBS. He also worked previously at Credit Suisse. In addition to his experience in restructurings, he has significant experience in leveraged finance, equity and M&A. "Andy's leveraged finance and equity experience, as well as his restructuring expertise, will add an important dimension to our advisory capabilities," said Mr. Bok. Greenhill & Co., Inc. is an independent investment bank that provides financial advice on significant mergers, acquisitions, restructurings and other financial matters; assists private funds in raising capital from investors; and manages merchant banking funds. It acts for clients located throughout the world from its offices in New York, London, Frankfurt, Toronto, Tokyo, Chicago, Dallas and San Francisco. * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Share- Total Total Holders Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ ------ ------ ABSOLUTE SOFTWRE ABT CN 107 (7) 24 ARBITRON INC ARB US 200 (14) (39) AUTOZONE INC AZO US 5,235 (187) 112 BLOUNT INTL BLT US 500 (44) 128 BOEING CO BA US 53,779 (1,294) (4,961) BOEING CO BAB BB 53,779 (1,294) (4,961) CABLEVISION SYS CVC US 9,383 (5,354) (438) CENTENNIAL COMM CYCL US 1,432 (1,021) 101 CHENIERE ENERGY CQP US 1,979 (352) 139 CHENIERE ENERGY LNG US 2,922 (354) 510 CHOICE HOTELS CHH US 328 (138) (15) CLOROX CO CLX US 4,398 (403) (389) COCA-COLA ENTER CCE US 15,589 (31) (491) CV THERAPEUTICS CVTX US 364 (222) 246 DELTEK INC PROJ US 193 (54) 35 DISH NETWORK-A DISH US 6,460 (1,949) (882) DOMINO'S PIZZA DPZ US 464 (1,425) 105 DUN & BRADSTREET DNB US 1,586 (851) (213) EMBARQ CORP EQ US 8,371 (608) (6) ENERGY SAV INCOM SIF-U CN 552 (423) (162) EXELIXIS INC EXEL US 255 (23) (1) EXTENDICARE REAL EXE-U CN 1,806 (30) 95 FERRELLGAS-LP FGP US 1,510 (12) (114) GARTNER INC IT US 1,093 (21) (238) HEALTHSOUTH CORP HLS US 1,998 (700) (64) IMAX CORP IMX CN 238 (91) 41 IMAX CORP IMAX US 238 (91) 41 IMS HEALTH INC RX US 2,087 (153) 231 INDEVUS PHARMACE IDEV US 256 (136) 8 INTERMUNE INC ITMN US 172 (125) 114 ION MEDIA NETWOR IION US 1,137 (1,621) 96 LINEAR TECH CORP LLTC US 1,494 (310) 992 MEAD JOHNSON-A MJN US 1,372 (1,346) (1,870) MEDIACOM COMM-A MCCC US 3,719 (347) (274) MOODY'S CORP MCO US 1,773 (994) (584) NATIONAL CINEMED NCMI US 569 (476) 86 NAVISTAR INTL NAV US 10,390 (1,495) 1,660 NPS PHARM INC NPSP US 202 (208) 90 OCH-ZIFF CAPIT-A OZM US 2,224 (173) N.A. OSIRIS THERAPEUT OSIR US 137 (5) 71 OVERSTOCK.COM OSTK US 172 (3) 40 PALM INC PALM US 661 (151) (40) QWEST COMMUNICAT Q US 20,182 (1,449) (883) REGAL ENTERTAI-A RGC US 2,600 (242) (93) RENAISSANCE LEA RLRN US 57 (5) (15) SALLY BEAUTY HOL SBH US 1,489 (720) 365 SONIC CORP SONC US 818 (55) (9) SUCCESSFACTORS I SFSF US 170 (5) 3 TAUBMAN CENTERS TCO US 3,072 (163) N.A. THERAVANCE THRX US 236 (135) 166 UAL CORP UAUA US 19,461 (2,465) (2,420) UNITED RENTALS URI US 4,191 (29) 276 VERIFONE HOLDING PAY US 840 (38) 308 VERIFONE HOLDING VF2 GR 840 (38) 308 VERIFONE HOLDING PAY IT 840 (38) 308 WEIGHT WATCHERS WTW US 1,107 (888) (270) WESTERN UNION WU US 5,578 (8) 528 WR GRACE & CO GRA US 3,876 (354) 965 YUM! BRANDS INC YUM US 6,527 (108) (771) ********* 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 ***