/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090311.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, March 11, 2009, Vol. 13, No. 69 Headlines 511 DEVELOPMENT: Case Summary & 20 Largest Unsecured Creditors AF EVANS: U.S. Trustee Sets Creditors Meeting for April 6 AH&T INVESTMEST: Wants to Sell Primary Asset for $12 Million ALCOA INC: Mulls Ways to Raise Cash, May Sell Stake ALESCO FINANCIAL: Faces Delisting of Shares From NYSE APEX SILVER: Expects Confirmed Plan to Take Effect March 24 APPALACHIAN OIL: Allowed to Use Cash Collateral; 451 Workers Paid ARCH COAL: Moody's Gives Negative Outlook, Affirms 'Ba3' Rating ARCH COAL: S&P Puts 'BB' Corporate Rating on Negative CreditWatch ARVINMERITOR INC: Fitch Junks Issuer Default Rating from 'B-' AWESOME ACQUISITION: Moody's Affirms 'B2' Corproate Family Rating BAG 'N BAGGAGE: Court Holds Buyer in Contempt for Not Paying BANK OF AMERICA: Fights Nationalization Rumors, Hits Citigroup BERNARD L. MADOFF: May Plead Guilty of Fraud on Thursday BRAND ENERGY: S&P Changes Recovery Rating; Keeps 'B' Issue Rating BROWN SHOE: Cut by Moody's to 'B2' on Challenging Environment BRUNO'S SUPERMARKETS: Files CBA Rejection Motion to Complete Sale CARABEL EXPORT: Court OKs Auction; Continental is Lead Bidder CARABEL EXPORT: US Trustee Appoints 5-Member Creditors Committee CARE FOUNDATION: May Use NHI's Cash Collateral on Interim Basis CASELLA WASTE: Moody's Downgrades Corporate Family Rating to 'B2' CITIGROUP INC: Government Mulls Steps to Stabilize Bank CLEAR CHANNEL: Headed For Restructuring, Says Moody's; Now Caa3 CLEARWIRE CORP: William Morrow to Replace Benjamin Wolff as CEO CHANGING WORLD: Weil Gotshal Has $830,000 Claim for Failed IPO CHARYS HOLDING: Court Declines to Stay Ch. 11 Plan Pending Appeal CONGOLEUM CORP: Hopes to Confirm Plan by Yearend or Early 2010 CONGOLEUM CORP: Obtains Covenant Relief From Lender DELPHI CORP: Packard Unit to Lay Off 200 Workers in Warren, Ohio DELPHI CORP: Releases Full Year/4th Qtr. 2008 Financial Results DELPHI CORP: Retiree Groups Challenge Termination of OPEB DELPHI CORP: Seeks to Amend JPMorgan L/C Reimbursement Agreement ECLIPSE AVIATION: New Eclipse & Eclipse to Submit Competing Bids EDUCATIONAL RESOURCES: Make and Hold Lenders' Claims Due April 10 EMPACT MEDICAL: Involuntary Chapter 11 Case Summary EZEQUIEL ALCALA: Section 341(a) Meeting Slated for April 7 FIRST AMERICANS: Accounts at Five Points Bank Frozen FIRST DATA: S&P Downgrades Corporate Credit Rating to 'B' FLEETWOOD ENTERPRISES: Files for Chapter 11, Closes Travel Trailer FLEETWOOD ENTERPRISES: Case Summary & 20 Largest Unsec. Creditors FLYING J: Has $10 Million Loan for Pipeline Operations FOAMEX INT'L: Creditors Committee Wants Documents Produced FOAMEX INT'L: Section 341 Meeting Scheduled for April 2, 2009 FRIEDMAN'S INC: Solicits Unsecured Creditors' Votes for Plan FRONTIER AIRLINES: Dallas Airport, et al., Defend Claims FRONTIER AIRLINES: Rejects Deals With Sprint Solutions & Qwest FRONTIER AIRLINES: Salient Terms of $40MM Republic Airways Loan FULL HOUSE: Case Summary & Seven Largest Unsecured Creditors G.I. JOE'S: Receives Interim Approval to Access DIP Financing G.I. JOE'S: Acting U.S. Trustee Sets 341(a) Meeting for April 16 GENERAL GROWTH: Running on Fumes on Forbearances; Fitch Dumps IDR GREEN VALLEY: Voluntary Chapter 11 Case Summary GREENBRIER COS: S&P Downgrades Corporate Credit Rating to 'B-' HARRAH'S ENTERTAINMENT: Makes Tender Offer for $2.8-Bil. Notes ILX RESORTS: Receives Delisting Notification From NYSE ISOLAGEN INC: To Run Out of Cash in 3 Weeks; Bankruptcy an Option JAMIE VERGARA: Case Summary & 20 Largest Unsecured Creditors JAY HOSTETTER: U.S. Trustee Sets Creditors Meeting for March 23 JOSEPH DIEKEMPER: Wife Sentenced to Two Years of Probation KERYX BIOPHARMACEUTICALS: To Appeal Nasdaq Delisting Notice L.A. SPAS: Lenders to Auction Pledged Stock on March 24 LEEWARD OPERATORS: Involuntary Chapter 11 Case Summary LEHMAN BROTHERS: Balks at Examiner-JPMorgan Info Sharing Deal LEHMAN BROTHERS: CES Aviation Sells Sikorsky S-76C+ Helicopter LEHMAN BROTHERS: Court OKs Jones Day Firm's as Special Counsel LEHMAN BROTHERS: Court Permits LBI Trustee to Return Funds LEHMAN BROTHERS: Examiner Can Hire Duff & Phelps Fin'l Advisors LEHMAN BROTHERS: LCPI Seeks to Bar iStar From Amending Loan Terms LEHMAN BROTHERS: Names William Fox as Chief Financial Officer LEHMAN BROTHERS: Seeks Approval of LCPI Deal with Metlife LEHMAN BROTHERS: Seeks Authority to Hire Huron as Tax Consultants LEHMAN BROTHERS: Swiss Liquidators Take Lead Role for Unit LYONDELL CHEMICAL: Taps Carlton, Halleland as Special Counsel LYONDELL CHEMICAL: Taps Kelley Drye as Counsel on Insurance LYONDELL CHEMICAL: Panel May Retain Brown Rudnick as Counsel LYONDELL CHEMICAL: Panel May Retain Mesirow as Financial Advisors LYONDELL CHEMICAL: PJ Solomon May be Panel's Investment Bankers MANASSEH BUILDING: Case Summary & 10 Largest Unsecured Creditors MAGNA ENTERTAINMENT: May Borrow $13.3 Million from Affiliate MAGNA ENTERTAINMENT: Receives Notice Of Delisting From Nasdaq MAGNA ENTERTAINMENT: Taps AlixPartners as Restructuring Advisors MAGNA ENTERTAINMENT: Wants to Hire KCC as Claims & Noticing Agent MASONITE INT'L: Presents Projections; Negotiating Chapter 11 Plan MASONITE INT'L: Reports 19.8% Decline in 2008 Sales MEADOWBROOK FARMS: Will File for Chapter 7 Bankruptcy Protection MERCEDES HOMES: Gets Court Nod to Access Cash Collateral MERISANT WORLDWIDE: Proposes 2009 Employee Incentive Plan MI DEVELOPMENTS: Moody's Reviews Senior Debentures on Magna Filing MICRON TECHNOLOGY: S&P Pares Rating on $1.3 Bil. Notes to 'B-' MILACRON INC: Files for Bankruptcy, to Sell Biz to Investors MILACRON INC: Case Summary & 35 Largest Unsecured Creditors MME LLC: U.S. Trustee Sets Section 341(a) Meeting for April 9 MONACO COACH: Negotiates with Lenders on Use of Cash Collateral NAILITE INT'L: Auction Sale of All Assets Scheduled for April 8 PACIFIC ENERGY: Owes $452 Million to Secured Creditors PACIFIC ENERGY: Can Access $9.5 Million DIP Facility on Interim PARTY CITY: Section 341(a) Meeting Slated for April 7 in Calif. PHILADELPHIA NEWSPAPERS: Gets Court OK to Spend Up to $1.15MM PLANET ORGANIC: In Talks With Lenders for Covenant Relief PORT BARRE: S&P Downgrades Rating on $185 Mil. Facilities to 'B' QUEBECOR WORLD: Plan Filing Period Extended Until Month-end QUEBECOR WORLD: Sued by Former Affiliate Over Name Use REC PLANTATION: Fitch Affirms Ratings on 2016 Floating-Rate Notes ROBBINS BROS: Wants to Hire William Blair as Investment Banker SIRIUS XM: Posts $248.5 Million Net Loss in Fourth Quarter 2008 SPANSION INC: Can Use Lenders' Cash Collateral Until March 29 SPANSION INC: Court Approves Protocol to Limit Securities Trading SPANSION INC: Gets Court OK to Hire Epiq as Claims & Notice Agent SPANSION INC: Hires Sitrick as Communications Consultants SPANSION INC: Receives Delisting Notice From NASDAQ ST. LOUIS INDUSTRIAL: Moody's Downgrades Ratings on 2009A Bonds ST MARY'S HOSPITAL: Case Summary & 20 Largest Unsecured Creditors SUNSET AVIATION: Files Chapter 7 Liquidation in Delaware SYNCORA GUARANTEE: Moody's Downgrades Insurance Rating to 'Ca' TAPIA DAIRY: Voluntary Chapter 11 Case Summary TARGUS GROUP: Moody's Keeps 'Caa1' Rating; Gives Negative Outlook TARGUS GROUP: S&P Withdraws 'CCC+' Corporate Credit Rating TELEPLUS WORLD: Section 341(a) Meeting Set For April 13 TNS INC: Moody's Affirms Corporate Family Rating at 'B1' TRUMP ENTERTAINMENT: Court Sets May 28 as General Claims Bar Date TRUMP ENTERTAINMENT: TCI Files Schedules of Assets & Liabilities TUSCANY HEIGHTS: Case Summary & 12 Largest Unsecured Creditors VERASUN ENERGY: Plan Filing Period Extended Until May 31 VERASUN ENERGY: To Assume and Assign 1,500 Contracts to Buyer VINCENT PITTS: Section 341(a) Meeting Set for March 31 VISKASE COS: S&P Raises Corporate Credit Rating to 'CCC+' VISTEON CORPORATION: Fitch Downgrades Issuer Default Rating to 'C' W.R. GRACE: Court Approves Disclosure Statement YELLOWSTONE CLUB: Court OKs Auction; Lender Moves Plan Deadline YELLOWSTONE CLUB: Court OKs CrossHarbor as Stalking Horse Bidder * NewOak Capital Names Edward Napoli as Managing Director * Upcoming Meetings, Conferences and Seminars ********* 511 DEVELOPMENT: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: 511 Development Corp 1020 Manhattan Beach Blvd., Ste. 102 Manhattan Beach, CA 90266 Bankruptcy Case No.: 09-15196 Type of Business: The Debtor engages in custom home development. Chapter 11 Petition Date: March 9, 2009 Court: Central District of California (Los Angeles) Judge: Barry Russell Debtor's Counsel: Thomas C. Corcovelos, Esq. 1001 Sixth Street, Suite 150 Manhattan Beach, CA 90266 Tel: (310) 374-0116 Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $10 million The Debtor's Largest Unsecured Creditors: Entity Claim Amount ------ ------------ KLM Engineering $97,873 Contractors 416 Monterey Blvd. Hemosa Beach, CA 90254 Law Offices of Patricia Painter $61,452 1874 S. Pacific Coast Highway, No. 703 Redondo Beach, CA 90277 LR Cabinets $53,361 405 W. Walnut St. Gardena, CA 90248 Ferguson Enterprises $50,913 De Light Ville $48,050 B&M Mobile $46,838 G-Mac Electric $41,962 Warren Lee Company $40,500 Baker Burton & Lundy $33,311 Lou Mascola Landscape $25,671 A-Z Carpentry/Alex Rodriguez $18,500 California Reflections $17,189 Accurate Fabrication/Charles $15,250 Adamson Carpet Pros. $14,200 MCM Construction & Design Company $12,600 Magic Plumbing $12,000 Brite Carpet, Tile & Stone Care $10,500 Residential Elevators $9,050 Custom Heating & Air $8,650 A&D Plastering $8,100 The petition was signed by Robert Michael Davis, president and director of the company. AF EVANS: U.S. Trustee Sets Creditors Meeting for April 6 --------------------------------------------------------- The U.S. Trustee for Region 17 will convene a meeting of creditors in A.F. Evans Company, Inc.'s Chapter 11 case on April 6, 2009, at 11:30 a.m., at the Office of the U.S. Trustee, 1301 Clay St., Room 680N, Oakland, California. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Oakland, California, A.F. Evans Company, Inc. -- http://www.afevans.com/-- is a property developer. The Debtor filed for Chapter 11 protection on March 5, 2009, (Bank. N.D. Calif. Case No.: 09-41727) Eric A. Nyberg, Esq. at Kornfield, Nyberg, Bendes and Kuhner represents the Debtor in its restructuring efforts. The Debtor estimated assets of less than $50,000 and estimated debts of $100 million to $500 million. AH&T INVESTMEST: Wants to Sell Primary Asset for $12 Million ------------------------------------------------------------ AH&T Investments, LC, asks the U.S. Bankruptcy Court for the Eastern District of Virginia to approve the sale of its 62.33- acres of real estate located in South Hampton and Shippensburg, Pennsylvania, which is its primary asset. The Debtor tells the Court that it entered into a certain Contract of Sale on 9, 2008, for the sale of the property to Todd E. Mummert, Paul S. Bawice and Thomas Liott for the purchase price of $12,000,000. Sale will be made free and clear of all liens and interests, with said liens attaching to the proceeds of sale. The property is subject to these liens: a) Tax lien in favor of Cumberland County in the approximate amount of $157,893; b) A first deed of trust lien in favor of BB&T Bank in the approximate amount of $3,895,468; and c) A second deed of trust lien in favor of BB&T Bank in the approximate amount of $1,268,425. The Debtor tells the Court the sale price exceeds the total value of all liens. AH&T Investments, LLC is an investment company in Haymarket, Virginia. The company filed for Chapter 11 relief of December 23, 2008 (Bankr. E.D. Virginia Case No. 08-18034). David R. Young, Jr., Esq., represents the Debtor as counsel. When the Debtor filed for protection from its creditors, it listed assets of between $10 million and $50 million, and debts of between $1 million and $10 million. ALCOA INC: Mulls Ways to Raise Cash, May Sell Stake --------------------------------------------------- Robert Guy Matthews and Anjali Cordeiro at The Wall Street Journal reports that Alcoa Inc. CEO Klaus Kleinfeld said Tuesday that he would look at all options to raise cash for the Company to survive the current downturn. "It would be absolutely wise to look at all cash-generating opportunities. It would be foolish to leave any of these things out," WSJ quoted Mr. Kleinfeld as saying. The measures, says WSJ, could include selling a stake to another company. According to the report, Mr. Kleinfeld didn't say that Alcoa had plans to sell a stake and has declined to name prospective partners. WSJ relates that Alcoa, which enjoyed the benefits of a boom in the commodity price cycle for years, has been laid low by a sharp drop in the price of aluminum. WSJ states that Alcoa has recently disclosed asset sales, salary freezes, a 15% cut in its work force, and a 50% reduction in capital spending, which according to Mr. Kleinfeld helped preserve cash and leave the firm "well protected" against an extended downturn. According to WSJ, investors remain wary, and Alcoa shares have dropped more than 80% in over six months to $6.12 on Tuesday. In Alcoa would try to balance its responsibility to shareholders with its need to conserve cash, WSJ says, citing Mr. Kleinfeld. The report quoted him as saying, "I would neither buy back debt nor shares at this time." Mr. Kleinfeld said that Alcoa wouldn't rule out cutting its dividend if necessary to preserve an adequate cushion of cash, WSJ states. Alcoa Inc. -- http://www.alcoa.com/-- is the world leader in the production and management of primary aluminum, fabricated aluminum and alumina combined. Alcoa serves the aerospace, automotive, packaging, building and construction, commercial transportation and industrial markets, bringing design, engineering, production and other capabilities of Alcoa's businesses to customers. In addition to aluminum products and components including flat-rolled products, hard alloy extrusions, and forgings, Alcoa also markets Alcoa(R) wheels, fastening systems, precision and investment castings, and building systems. The company operates in 34 countries and has been named one of the top most sustainable corporations in the world at the World Economic Forum in Davos, Switzerland. As of September 30, 2008, Alcoa had $39.0 billion in total assets and $21.2 billion in total liabilities. As reported by the Troubled Company Reporter on February 17, 2009, Moody's Investors Service downgraded Alcoa Inc's senior unsecured ratings to Baa3 from Baa1, its short-term rating to Prime-3 from Prime-2, its rating on its shelf registration for senior unsecured debt to (P)Baa3 from (P)Baa1 and its preferred stock rating to Ba2 from Baa3. At the same time Moody's downgraded Alcoa Trust 1's shelf registration rating for preferred stock to (P)Ba1 from (P)Baa2. The rating outlook is stable. ALESCO FINANCIAL: Faces Delisting of Shares From NYSE ----------------------------------------------------- Alesco Financial Inc. disclosed that on October 10, 2008, it was notified by the New York Stock Exchange that it was not in compliance with an NYSE continued listing standard applicable to its common stock. The standard requires that the average closing price of any listed security not fall below $1.00 per share for any consecutive 30 trading-day period. On October 15, 2008, the company notified the NYSE of its intent to cure this deficiency. Under the NYSE rules, the company has six months from the date of the NYSE notice to comply with the NYSE minimum share price standard. If it is not compliant by that date, its common stock will be subject to suspension and delisting by the NYSE. After exploring different alternatives for curing the deficiency and restoring compliance with the continued listing standards, Alesco currently expects to effectuate a 1 for 10 reverse split of its common stock. Its common stock remains listed on the NYSE under the symbol "AFN." The NYSE's continued listing standards also require that its average market capitalization be at least $25 million over any 30 consecutive trading day period and that it maintains its REIT status. The company also said that on February 26, 2009, the NYSE submitted to the Securities and Exchange Commission an immediately effective rule filing which suspends the NYSE's $1 minimum price requirement on a temporary basis, initially through June 30, 2009. The NYSE filing also extends until the same date the NYSE's current easing of the average global market capitalization standard from $25 million to $15 million. In addition to being delisted due to the company's failure to comply with any of these continued listing standards, the company will also likely be delisted if it fails to meet any of the NYSE's other listing standards. Last week, Alesco announced financial results for the three-months and 12-months ended December 31, 2008. Alesco reported a GAAP net loss for the three-months ended December 31, 2008 of $212.5 million as compared to a net loss of $729.3 million for the three- months ended December 31, 2007. Alesco's net loss for the three- month period ended December 31, 2008, included a loss of $137.4 million due to interest rate hedging activities, net of minority interest, and an impairment charge of $101.0 million on leveraged loans included in an on-balance sheet warehouse credit facility, partially offset by a gain of $14.1 million due to the repurchase and retirement of a portion of the company's convertible debt. The company reported a GAAP net loss for the 12-months ended December 31, 2008 of $144.7 million as compared to a net loss of $1.3 billion for the 12-months ended December 31, 2007. The company's net loss for the 12-month period ended December 31, 2008 included a loss of $197.1 million due to interest rate hedging activities, net of minority interest, including charges of $48.6 million due to the reclassification into the income statement of MBS related cash-flow hedging losses that were previously included in accumulated other comprehensive loss, partially offset by a gain of $58.0 million due to the repurchase and retirement of a portion of the Company's convertible debt. As of December 31, 2008, Alesco's consolidated financial statements include $86.0 million of available, unrestricted cash and cash equivalents. Management has evaluated the company's current and forecasted liquidity and continues to monitor evolving market conditions. Future investment alternatives and operating activities will continue to be evaluated against anticipated current and longer term liquidity demands. The realized tax losses that Alesco has experienced during 2008, including those resulting from the failure of IndyMac Bancorp and losses on MBS in our Kleros Real Estate portfolio eliminated Alesco's taxable income for the year ending December 31, 2008. Management will continue to consider projections regarding Alesco's taxable income and liquidity position and decisions regarding future dividends are subject to the review and approval of its board of directors. Common Stock Repurchase During the three-month and 12-month period ended December 31, 2008, Alesco repurchased 112,800 and 742,396 shares of common stock for $100,000 and $700,000, at a weighted-average price of $1.02 and $1.00 per share, respectively. Merger Agreement On February 20, 2009, Aleso and Cohen Brothers, LLC -- which does business as Cohen & Company -- entered into a definitive merger agreement. Alesco's Board of Directors and Cohen & Company's Board of Managers each unanimously approved the transaction. Cohen & Company will merge with a subsidiary of Alesco and will survive the merger as a subsidiary of Alesco. In the merger, members of Cohen & Company will have the option to exchange each of their membership units in Cohen & Company for either 0.57372 shares of Alesco common stock, or 0.57372 replacement units of membership interest in Cohen & Company which may be exchanged into shares of Alesco in the future. Holders of common stock of Alesco will continue to hold their shares of Alesco. Subsequent to the merger, Alesco will continue to be a publicly traded entity and is expected to operate as a C-Corp for tax purposes. Pursuant to the merger agreement, Alesco will complete a 1 for 10 reverse split of its common stock. It is currently expected that former shareholders of Alesco will own 62.4% of the shares of Alesco's common stock immediately after the merger and former unit holders of Cohen & Company will hold the balance; however, the actual percentages will not be known until members of Cohen & Company have made their elections to receive either Alesco common stock or replacement units of Cohen & Company. If all Cohen & Company membership interests were to be converted into Alesco shares in the future, current Alesco shareholders would own 38.5%, and former Cohen & Company members would own 61.5%, of the combined company. Cohen & Company will be treated as the acquirer for accounting purposes. The transaction, which is expected to close during the second half of 2009, is subject to a number of closing conditions, including the receipt of third party consents and other conditions set forth in the definitive merger agreement. In addition, the transaction is subject to approval by the affirmative vote of a majority of the votes cast by holders of Alesco common stock, provided that the number of votes cast on the matter is over 50% of the votes entitled to be cast on the proposal. A meeting of Alesco stockholders to consider and vote on the transaction is expected to be held in the second half of 2009. About Alesco Financial Alesco Financial Inc. -- http://www.alescofinancial.com/-- is a specialty finance REIT headquartered in Philadelphia, Pennsylvania. Alesco is externally managed by Cohen & Company Management, LLC, a subsidiary of Cohen & Company, an alternative investment management firm, which, since 2001, has provided financing to small and mid-sized companies in financial services, real estate and other sectors. APEX SILVER: Expects Confirmed Plan to Take Effect March 24 ----------------------------------------------------------- The United States Bankruptcy Court for the Southern District of New York on March 4, 2009, entered an order confirming Apex Silver Mines Limited's Joint Plan of Reorganization. The Company expects the Plan to be effective on or about March 24, 2009 when a series of transactions contemplated by the Plan, including the sale of the San Cristobal mine, are completed. Pursuant to the Plan, the Company will sell to Sumitomo Corporation the Company's remaining direct and indirect interests in the San Cristobal mine, including its 65% interest in Minera San Cristobal, for a cash purchase price of $27.5 million, plus $2.5 million in expense reimbursements and the assumption of certain liabilities, pursuant to the Purchase and Sale Agreement dated January 12, 2009, among ASMC, certain other wholly owned subsidiaries of the Company, Sumitomo and one of Sumitomo's wholly owned subsidiaries. In addition, under the terms of the Purchase Agreement and the Plan, the Company will be released from liabilities associated with the San Cristobal mine, including its guarantee of San Cristobal's indebtedness. The Company presently anticipates that the Purchase Agreement will be consummated on or about March 24, 2009 in conjunction with, and as a condition to, the Company's emergence from bankruptcy pursuant to the Plan. As a condition to the closing of the Purchase Agreement, ASMC will enter into a Management Services Agreement with Sumitomo under which it will provide certain management services to the San Cristobal mine following consummation of the Purchase Agreement and emergence from Chapter 11 proceedings. ASMC will receive an annual fee of approximately $6.0 million, and a potential annual incentive fee of $1.5 million. The Management Agreement will have an initial term of twelve months and thereafter may be terminated by the Company with twelve months prior notice or by Sumitomo with six months prior notice. If terminated by Sumitomo, ASMC will be entitled to a $1.0 million termination fee. Under the Plan, Golden Minerals Company, a new Delaware corporation, will hold the Company's assets upon emergence, and the Company will be liquidated in accordance with Cayman Islands law. The current equity holders of the Company will receive no recovery under the Plan and the ordinary shares of Apex Silver Mines Limited will be cancelled through the liquidation process. Under the Plan holders of the Company's outstanding $290 million of 4.0% and 2.875% Convertible Senior Subordinated Notes due 2024 will be entitled to receive a pro rata distribution of (i) common stock of Golden Minerals Company, and (ii) approximately $45 million in cash plus any other cash or cash equivalents held by the Company in excess of $15 million (plus a reserve for certain projected reorganization expenses), and the Subordinated Notes will be cancelled. Other unsecured creditors will receive cash payments for their claims, up to a maximum recovery of $10,000 per claim, or a pro rata distribution of common stock of Golden Minerals Company. Approximately three million shares of common stock of Golden Minerals Company will be issued to holders of the Subordinated Notes and other unsecured creditors under the Plan. In addition to managing the San Cristobal mine, the business strategy of Golden Minerals Company will focus on the advancement of exploration activities on certain properties within a broad portfolio of 45 exploration properties in South America and Mexico. Two of these properties are in intermediate to advanced stages of exploration: the El Quevar silver project in Argentina and the Zacatecas silver and base metals project in Mexico. Golden Minerals Company will also seek to leverage the experience and skills of the management team by performing mine services, including feasibility studies and project development strategies; engineering, construction and procurement management; environmental permitting and corporate social responsibility support; technical support; and operations management. In addition, Golden Minerals Company will actively pursue growth through strategic opportunities, including acquisitions, joint ventures and asset consolidations that can bring synergy to existing assets and leverage the strengths of the management team. The common stock of Golden Minerals Company is expected to commence trading over-the-counter when the Plan becomes effective following the Company's emergence from bankruptcy. The Company expects that Golden Minerals Company will pursue a listing on a U.S. national securities exchange and the Toronto Stock Exchange. Golden Minerals Company will be the successor to the Company for purposes of reporting under the U.S. securities laws. About Apex Silver Mines Headquartered in Denver, Colorado, Apex Silver Mines Limited -- http://www.apexsilver.com-- explores and develops silver and other mineral properties in Central and South America. The Company is based in George Town, Cayman Islands. The Company and its affiliate, Apex Silver Mines Corporation, filed for Chapter 11 protection on January 12, 2009 (Bankr. S.D. N.Y. Lead Case No. 09-10182). James L. Bromley, Esq., and Sean A. O'Neal, Esq., at Cleary Gottlieb Steen & Hamilton LLP, represent the Debtors in their restructuring efforts. The proposed Davis Graham & Stubbs LLP as special purpose counsel; Jefferies & Co, Inc. as financial advisor; and Epiq Bankruptcy Solutions LLC as claims agent. When the Debtors filed for protection from their creditors, they listed assets and debts between $500 million to $1 billion each. APPALACHIAN OIL: Allowed to Use Cash Collateral; 451 Workers Paid ----------------------------------------------------------------- NET News Service reports that the Hon. Marcia Parsons of the U.S. Bankruptcy Court for the Eastern District of Tennessee has allowed Appalachian Oil Co. to use cash collateral to pay workers, overdue health insurance premiums, and utility deposits. According to NET News, Appalachian Oil paid its 451 workers on Monday. NET News relates that a creditor has asked during a meeting of unsecured creditors where Appalachian Oil's money went during a and how Appalachian Oil went from profitability to bankruptcy within 16 months after being acquired by Titan Global Holdings. NET News states that Titan Global CEO Bryan Chance assured U.S. Trustee Patricia Foster that he and his team are near at securing "debtor in possession" financing so that Appalachian Oil can reorganize and put gas and products back into its 58 stores. Ms. Foster, according to the report, has asked whether Titan Global was considering selling the stores if the DIP financing didn't come through. The report quoted Mr. Chance, "We would entertain that, but I don't think given the financial climate that we're in it would achieve the desired outcome for Greystone Business Credit or the unsecured creditors." Mr. Chance implied that a sale might not bring enough cash to pay off Appalachian Oil's debts, the report says. According to NET News, Mr. Chance blamed Appalachian Oil's collapse mostly on the rapid decline in oil prices last year and how that affected the Company's relationship with Greystone Business Credit, which has a $11 million secured claim against the Company. Greystone Business collected $2.8 million in fees and another $1.7 million in interest from Appalachian Oil revenues, along with principal payments, the report states, citing Mr. Chance. Mr. Chance, NET News relates, said that much of the collateral for Appalachian Oil's loan with Greystone Business was based on the value of the Company's gasoline holdings, which has dropped along with gas prices. Greystone Business started holding part of Appalachian Oil receipts in a "lock box" rather than returning them to the Company, leaving the Company with one-third less cash than it should have had, NET News says, citing Mr. Chance. The report states that Appalachian Oil then started having trouble paying its bills, securing gas, and providing fuel to 160 independent convenience stores. The company, according to the report: -- revoked its contracts with the independents in December 2008, -- ran out of gas in its own stores in January 2009, and -- hasn't added any new products inside the stores. Citing Mr. Chance, NET News states that prospective suppliers of these goods have become more interested in helping Appalachian Oil after learning about Greystone Business' role in the company's financial struggles. The report quoted Mr. Chance as saying, "After they understand that Appalachian Oil was at its core a profitable company ... and understand the fees and interest and other problems we'd had with our senior lender, they wanted to help." Mr. Foster, according to NET News, asked Mr. Chance about more than $3.5 million in transfer payments from Appalachian Oil to Titan Global that were made between February 2008 and February 1, 2009. Those payments were necessary because while the Company under former owner James MacLean was a private company, Titan Global is a public company with public filings, auditing, financial analysis, and other expenses, the report says, citing Mr. Chance. The report quoted Mr. Chance as saying, "These expenses simply relate to the parent company." Judge Parsons will hold a final hearing on April 7 on the use of cash collateral, NET News reports. Mr. Chance expects that Titan Global would have DIP financing long before the hearing, according to NET News. NET News relates that Mr. Chance said that he hopes for a hearing allowing a DIP agreement by Friday. The stores are on reduced hours, bringing in $20,000 or so a day in total deposits, "and it's diminishing each day," the report quoted Mr. Chance as saying. About Appalachian Oil Bountville, Tennessee-based Appalachian Oil Co. is a fuel distributor and operator of 60 convenience stores. It has 22.5 million-gallon terminal serving customers in six states. As reported by the Troubled Company Reporter on February 12, 2009, Appalachian Oil sought Chapter 11 protection before the U.S. Bankruptcy Court for the Eastern District of Tennessee on February 9, 2009. The Company's creditors with the biggest unsecured claims are BP Plc's Amoco/BP, owed $2.41 million, and fuel distributor Crescent Oil Co., owed $1.64 million. ARCH COAL: Moody's Gives Negative Outlook, Affirms 'Ba3' Rating --------------------------------------------------------------- Moody's Investors Service lowered Arch Coal, Inc.'s outlook to negative and affirmed its Ba3 Corporate Family Rating and B1 (LGD4, 63%) senior unsecured rating. These actions follow Arch's announcement that it has agreed to acquire the Jacob's Ranch mine in the Powder River Basin from Rio Tinto. The lowering of the outlook reflects the potential strain on Arch's liquidity as it currently anticipates financing the $761 million purchase price with a combination of internally generated cash flow from operations, borrowings under its $800 million revolving credit facility, and possibly other debt instruments. Absent a new debt issue, the acquisition will significantly strain Arch's liquidity as the company does not have committed bank financing in place to fund this transaction at this time and revolver availability alone is insufficient. At December 31, 2008, Arch had approximately $595 million of availability under its revolver and approximately $71 million of cash. Moody's anticipate that Arch will have limited free cash flow generation in the first half of 2009 and will most likely need to arrange new financing to bridge the funding gap at a time when access to financing is challenging. If the transaction goes ahead without a significant portion of the acquisition cost being financed from new financing sources, the potential strain on Arch's liquidity could lead to a downgrade of the CFR. If the acquisition is financed from new sources that leave the company with solid liquidity, the outlook would likely be restored to stable. Notwithstanding the financing and liquidity risk, Arch, with this acquisition, will benefit from a very high contracted level of sales from Jacobs Ranch and its own future production and a significant, low-cost presence in the PRB. Arch estimates that it would derive incremental full year pro forma EBITDA of approximately $145 million to $165 million from Jacob's Ranch in 2009. Also, with approximately 42 million tons of additional annual production from a mine that borders Arch's Black Thunder mine, the transaction will offer opportunities for synergies. Jacobs Ranch however, has a relatively short reserve life of approximately 9 years, highlighting the importance of successfully bidding on future PRB leases. Approximately 100% of Jacobs Ranch's projected 2009 production is under contract, as well as more than 75% in 2010 and approximately 50% in 2011. On a combined basis, Arch will have approximately 90% of production contracted for 2009, 60% contracted for 2010 and 30% contracted for 2011. Arch's Ba3 corporate family rating reflects the high ongoing capex, including cash expenditures needed to acquire reserves in the PRB, and the resultant negative free cash flow, its elevated leverage following the acquisition, and the considerable dependence on one mining complex, Black Thunder, which will have more concentrated operations following the transaction. The rating also considers the inherent volatility in coal prices and the embedded geological and operational risks of coal mining. The rating favorably reflects Arch's large reserves and production base, relatively stable operating profile, its significant size and scale, its low-cost surface mining operations in the PRB, and a diversified customer base. Outlook Actions: Issuer: Arch Coal, Inc. -- Outlook, Changed To Negative From Stable Issuer: Arch Western Finance LLC -- Outlook, Changed To Negative From Stable Moody's last rating action on Arch was to affirm its Ba3 rating in August 2005. Headquartered in St. Louis, Missouri, Arch Coal, Inc. is one of the largest coal companies in the U.S. and had revenues of approximately $3.0 billion in 2008. ARCH COAL: S&P Puts 'BB' Corporate Rating on Negative CreditWatch ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it placed its ratings on St. Louis-based Arch Coal Inc., including its 'BB' corporate credit rating, on CreditWatch with negative implications. The placement follows Arch's announcement that it has agreed to purchase Rio Tinto PLC's Jacobs Ranch mine in the Powder River Basin of Wyoming for $761 million. Arch currently anticipates financing this transaction with a combination of internally generated cash flow from operations, borrowings under the company's $800 million revolving credit facility, and possibly other debt securities. Based on its initial analysis, S&P has determined that if the acquisition closes as currently proposed, and market conditions remain in line with S&P's expectations, S&P would lower the corporate credit rating on Arch to 'BB-' from 'BB' and the outlook would be stable. "The one notch downgrade would reflect our assessment that S&P consider the company's willingness to fund a large acquisition with debt to be aggressive in light of the uncertain global operating environment and currently unsettled credit markets," said Standard & Poor's credit analyst Maurice Austin. This is important because Arch's credit profile has only recently reached the level consistent with its 'BB' rating, and this acquisition would weaken the company's credit measures. Standard & Poor's will monitor the progress that the parties make toward closing the transaction, including regulatory approvals, and assess any potential changes to the proposed capital structure and operating environment that could affect the ratings. ARVINMERITOR INC: Fitch Junks Issuer Default Rating from 'B-' ------------------------------------------------------------- Fitch Ratings has downgraded ArvinMeritor's Issuer Default Rating and outstanding debt ratings: -- IDR to 'CCC' from 'B-'; -- Senior secured bank facility to 'B/RR1' from 'BB-/RR1'; -- Senior unsecured notes to 'CC/RR5' from 'B-/RR4'. The ratings remain on Rating Watch Negative pending resolution of potential federal government aid to General Motors and the associated impact on industry production. The Watch Negative is also based on ARM's eroding margins, persistent negative cash flows, the potential need for covenant relief in mid-2009 and related liquidity concerns. The downgrades affect approximately $1.7 billion of debt. Fitch expects that ARM could violate its covenants for the quarter ending June 30, 2009, due to the likelihood of deteriorating profits and the probable need for increased drawings on the credit facility. The credit agreement calls for the secured leverage ratio to be no greater than 2.5 times (x) through March 31, 2009, but it tightens to 2.0x after that date. To date, lending groups have worked with auto suppliers to provide covenant relief during the downturn, but the potential need for additional capital at ARM and tight collateral coverage, rather than simply covenant relief, provides a more significant hurdle. Fitch notes that the U.S. accounts receivable securitization facility contains financial covenants equivalent to those of the credit agreement, exacerbating concerns about ARM's ability to retain existing capital access. The downgrade of ARM's IDR is also based on the severe weakening of commercial truck demand in Europe occurring in 2009, expectations of continued weakness in already-weak commercial vehicle U.S. demand from depressed 2008 levels, and financial stress among ARM's customers in this segment. ARM receives approximately two-thirds of its revenue from its commercial vehicle systems group. In addition, ARM's light vehicle systems segment is expected to experience operating losses in 2009 due to severe production cutbacks in the U.S. and a steep decline in global production. Given the current market environment, ARM is unable to divest its light-vehicle systems operations at this time; this segment is expected to produce operating losses and a deteriorating competitive position through 2009, given the low margins in the business and the sharp drop in near-term global production. Fitch believes that the light-vehicle systems group will exacerbate balance sheet and liquidity deterioration in 2009. Weakness across global end markets over the next twelve months indicates that ARM is expected to remain cash flow negative over this period and that leverage will increase. In the CVS segment, the economic slowdown in the U.S. will hurt Class 8 volumes, and the impact of any pre-buy ahead of new emissions standards in 2010 may be muted. Deteriorating economic conditions in Europe could offset underlying operating improvement that has enhanced recent margin performance. Although the U.S. truck market is coming off a deep downturn in orders, weakening global economic conditions, a stressed customer base and limited fleet financing availability will continue to hamper any rebound in demand. These factors are expected to more than offset ARM's efforts to reduce costs and preserve cash. Initiatives include headcount reductions, planned decreases for capital expenditures in FY09 versus FY08, salary reductions and the suspension of the dividend. ARM's $664 million secured revolving credit facility is collateralized by assets which include eligible US accounts receivable, inventory, property, plant and equipment, intellectual property and the company's investment in all or a portion of certain wholly-owned subsidiaries. As of Sept. 30, 2008 the collateral was valued at $850 million. However, the collateral fell to $688 million as of Dec. 31, 2008. ARM has two overseas facilities: the EUR125 million Swedish accounts receivable securitization facility and the EUR125 million French factoring facility. Both facilities extend through October 2009. Other liquidity needs for the company are met through the U.S. accounts receivable facility which allows for the utilization of up to $175 million; the facility expires in September 2009. Additionally, the company has other uncommitted factoring facilities in Europe. ARM makes extensive use of these short-term receivable securitization and factoring facilities. At Dec. 31, 2008, ARM had $499 million outstanding under these facilities, including $93 million (on-balance sheet) under a committed facility in the U.S. and $406 million under committed and uncommitted facilities in which are primarily in Europe (off- balance sheet). Of the European facilities, $320 million was outstanding under $350 million of committed facilities, and $86 million was outstanding under uncommitted lines. Inability to renew these securitization facilities could force extensive utilization of the company's revolving credit agreement and materially affect the ARM's liquidity position. Given the state of the banking industry, capital markets and the automotive industry it remains uncertain as to the availability of these lines going forward. Under ARM's U.S. facility at Dec. 31, 2008, approximately $185 million in receivables were pledged as collateral for $93 million in proceeds. ARM's maturity schedule is modest until the bank agreement matures in 2011, but it could further chip away at available liquidity if the company does not return to positive cash flow in the near term. ARM's pension is moderately underfunded in dollar terms, although asset deterioration in 2008 could require incremental contributions over the next several years. At the end of 1Q'09, ARM had $158 million of cash on the balance sheet and $523 million available on its secured revolving credit facility. During 1Q'09, ARM had $77 million of unsecured notes mature and Fitch believes the company funded the retirement of the notes with additional drawing on its revolver. The Recovery Ratings reflect Fitch's expectations under a scenario in which distressed enterprise value is allocated to various debt classes. The secured lenders recovery rating remains RR1 which indicates a 91-100% recovery based on collateral coverage of the amount permitted to be drawn. The unsecured notes are downgraded from RR4 to RR5 indicating a recovery in the range of 11-30% in the event of a default. The RR was lowered for the unsecured rating given the deterioration of the automotive environment and significant devaluation of global automotive asset values. AWESOME ACQUISITION: Moody's Affirms 'B2' Corproate Family Rating ----------------------------------------------------------------- Moody's Investors Service revised Awesome Acquisition Company, LP's rating outlook to negative from stable, while affirming all its current ratings including the Corporate Family Rating of B2. The change of outlook reflects Moody's expectation that Awesome's financial leverage and interest coverage would remain weak for the B2 rating over the intermediate term due to the negative pressure on revenue growth and profitability resulting from the recessionary economy, compounded by the high leverage deployed in the capital structure. Its key credit metrics (incorporating Moody's analytic adjustments) are weak for its rating, as evidenced by debt/EBITDA of 6.5x and EBITA/Interest of 1.2x in 2008. Given the expected slowdown in revenue growth and EBITDA expansion against the backdrop of a deepening recession, such ratios are likely to remain weak within the rating horizon. Although CiCi's pizza buffet concept focusing on value offerings has generally fared better than higher-priced full service restaurant chains, it's not immune to the recession as consumers cut back on dining out. In addition, the pizza limited-service segment remains as one of the most competitive and fragmented sub- sectors in the restaurant industry. CiCi's same store sales growth turned negative in 2008 and is expected to remain pressured into 2009. Moody's expects the revenues and profitability of CiCi's franchisees, the core of the company's operations, will remain challenged due to the declining guest traffic and volatile commodity prices. Moody's also expects an increase in franchisee unit closures and fewer new openings in 2009, resulting in slowdown in net unit expansion exacerbating the negative top line pressure. The affirmation of B2 CFR, however, incorporates the company's reasonable scale, substantial average unit volumes, above average margins, committed franchisee pipeline, and adequate liquidity. The affirmation also recognizes the relative stability in EBITDA despite exposure to volatile commodity inputs such as cheese, in part owing to its earnings stream's reliance on royalties as well as pass-through pricing mechanism built in its JMC distribution unit. The rating action is: Ratings affirmed: -- Corporate family rating - B2 -- Probability of default rating -- B2 -- $100.6 million guaranteed first lien senior secured term loan rated B1/ LGD-3 -- $15 million guaranteed first lien senior secured revolver rated B1 / LGD-3 -- $40 million second lien senior secured term loan rated Caa1 / LGD-5 -- Rating outlook: revised to negative from stable The most recent rating action on Awesome occurred on May 15, 2007 when Moody's assigned first time rating of B2 CFR to the company. Please refer to an updated credit opinion on Moodys.com. Awesome Acquisition Company, LP, headquartered in Coppell, Texas, is a holding company with two separate and distinct operations, CiCi Enterprises and JMC Restaurant Distribution. CiCi's is an owner, operator and franchisor of CiCi's Pizza, a buffet style, all you want, restaurant with a pizza centric menu. JMC is the distribution arm of the company and services CiCi's operation exclusively. For the year-ended December 31, 2008, sales were approximately $210 million. BAG 'N BAGGAGE: Court Holds Buyer in Contempt for Not Paying ------------------------------------------------------------ At the behest of the estates of Bag'n Baggage Ltd., the U.S. Bankruptcy Court for the Northern District of Texas in Dallas has held the buyer of the Debtor's assets in contempt for not paying adjustments in the purchase price. Bag'n Baggage closed its 30 luggage stores, sold its assets, and changed its name to Baggage Liquidation Ltd., following the sale. According to Bloomberg's Bill Rochelle, the Court previously declared that $515,000 was owing as an inventory adjustment on the $10.5 million purchase approved in June. The buyer, the report says, unsuccessfully argued that the quick procedures utilized by the bankruptcy court weren't correct and didn't afford due process. The buyer will be required to appear in Court on March 25 if it fails to make the payment. About Bag'n Baggage Bag'n Baggage -- http://www.bagnbaggage.com/-- is a retailer of travel and business gear for more than 35 years. The company and its stores offer luggage and travel goods including Tumi, Hartmann, Victorinox, Rimowa. The company operates 34 stores in upscale malls and lifestyle centers located in 11 states -- including Texas, Florida, California, Arizona, Washington, Massachusetts, North Carolina, Virginia, Pennsylvania, Nevada and Hawaii -- trading under the names Bagn Baggage, Malm Luggage, Niccolo & Mafeo and Houston Trunk Factory. Bag'n Baggage and related entity, 900 Corp., filed for Chapter 11 Bankruptcy protection on May 4, 2008, in the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division (Case Nos. 08- 32096 and 08-32097). The Debtors are represented by Carol E. Jendrzey, Esq., Lindsey Doherty Graham, Esq., and Mark Edward Andrews, Esq., at Cox Smith Matthews, Inc., in San Antonio, Texas. The U.S. Trustee for Region 6 has appointed seven creditors to serve on an Official Committee of Unsecured Creditors. Michael Klein, Esq., at Cooley Godward Kronish, LLP, represents the Committee in these cases. The Debtor disclosed $13,281,246 in total assets, and $19,760,470 in total debts in schedules filed with the Court. BANK OF AMERICA: Fights Nationalization Rumors, Hits Citigroup -------------------------------------------------------------- Dan Fitzpatrick at The Wall Street Journal reports that Bank of America Corp. is trying to differentiate itself from Citigroup Inc., as shares of big banks drop in the face of speculation that they might be nationalized by the government. WSJ notes that BofA's shares are down 55% since January 16, 2009, when details emerged of a new federal rescue plan for the bank similar to the one provided to Citigroup. WSJ states that the share price declined another 21% to $3.14 last week, before rising 19% on Monday, to close at $3.75. WSJ relates that BofA CEO Kenneth Lewis, in a series of internal memorandums to the bank's managers and in media appearances over the past two weeks, has implicitly attacked Citigroup's performance, while repeatedly insisting that, unlike Citigroup, BofA needs no more government money. Fees generated from BofA's base of 59 million retail and small-business clients will let the bank earn its way out of the crisis, WSJ says, citing Mr. Lewis. WSJ quoted Mr. Lewis as saying, "We need to help keep these facts straight in the public debate as the market appears to be moving in part based on rumor, innuendo and falsehoods propagated by the misinformed. I see no reason why a company that is profitable, with capital and liquidity levels that are very strong, and that continues to lend actively, should be considered for nationalization." People familiar with the matter said that while predicting during a February 20 discussion with top managers that BofA won't be nationalized, Mr. Lewis hinted that the nationalization fate might befall an unnamed competitor that operates in most of the same business lines, WSJ relates. According to WSJ, BofA made $4 billion for the full year 2008, while losing $1.79 billion in the fourth quarter 2008. WSJ notes that while BofA's Tier 1 capital ratio is 9.15%, which surpasses regulatory minimums, another capital ratio called tangible common equity remains thin at 2.83%. BofA, says WSJ, made $115 billion in new loans in the fourth quarter 2008, but outstanding loan balances dropped 1.2%. Citigroup spokesperson Shannon Bell, according to WSJ, defended the bank's business model, saying that it is positioning the bank "to capitalize on global growth trends." WSJ quoted BofA spokesperson Robert Stickler as saying, "We have been, from Ken on down, working very hard to help people understand the difference" between the two banks. Analysts expect a profit in 2009 from BofA, while for Citigroup, "the consensus is they will not," WSJ reports, citing Mr. Stickler. BofA, according to WSJ, is now the largest U.S. bank by assets and it expects to produce more than $100 billion in revenue Doubts remain inside BofA as to whether the bank can survive the crisis without more help from the government despite Mr. Lewis' assertions, says WSJ, citing a person familiar with the matter. 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). BERNARD L. MADOFF: May Plead Guilty of Fraud on Thursday -------------------------------------------------------- Amir Efrati at The Wall Street Journal reports that Bernard Madoff is expected to plead guilty to fraud charges on Thursday. WSJ relates that federal prosecutors released a document that charged Mr. Madoff with 11 felony counts including securities fraud, money laundering, perjury, and making false filings with the U.S. Securities and Exchange Commission. WSJ states that the document was filed by prosecutors in lieu of a grand jury indictment, which Mr. Madoff waived. Investigation is continuing and "the filing of these charges does not end the matter," Lev Dassin, acting U.S. attorney for the Southern District of New York, said in a statement. According to WSJ, information in the document could end investors' hopes of cash retrieval from Mr. Madoff. The report says that the investors were hoping that Mr. Madoff stocked away a large cache of money that could be retrieved and returned to them, but prosecutors said that much of the money might have ended up as payments to other investors over time. The prosecutors, WSJ relates, claimed that Mr. Madoff didn't buy securities, but he used "most of the funds to meet periodic redemption requests of other investors," taking some of the incoming funds as "commissions," which he used to support his market-making and proprietary trading businesses," and from which he and others received millions of dollars in benefits." Citing prosecutors, WSJ states that Mr. Madoff "promised certain clients annual returns in varying amounts up to at least 46%" to urge new clients to invest with him. WSJ, citing prosecutors, reports that Mr. Madoff allegedly told clients on December 1, 2008, that they had almost $65 billion, significantly more than the $50 billion figure referenced when prosecutors first charged Mr. Madoff on December 11, 2008. The prosecutors said that Bernard L. Madoff Investment only had a "small fraction" of that $65 billion figure, WSJ relates. The prosecutors said that the financial statements that Mr. Madoff filed with the SEC and showed to clients and prospective clients were fraudulent, and as of November 30, 2008, he had about 4,800 active client accounts, according to the report. As far back as 2002, Mr. Madoff moved more than $250 million of client money from his U.S. operation to Madoff Securities International, a proprietary securities-trading firm that he controlled in London, to create the appearance that he was making trades in Europe on behalf of clients, WSJ states, citing prosecutors. The prosecutors claimed that he used the funds to buy property and services for personal use and benefit, WSJ relates. Irving H. Picard, the court-appointed trustee for Bernard L. Madoff Investment Securities LLC, "has an obligation to all investors to maximize the common pool of assets," WSJ states, citing Steve Harbeck, president of Securities Investor Protection Corp., an industry-funded group that pays investor claims when brokerage firms fail. According to the report, Mr. Harbeck said that Mr. Picard would likely work on clawing back some investors' gains. The report says that Mr. Picard has recovered $1 billion in assets. 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. Mr. Madoff, if found guilty of all counts, would be imprisoned for 150 years, but legal experts expect the actual sentence to be much lower and would still be an effective life sentence for the 70- year-old defendant, WSJ notes. Mr. Madoff, WSJ relates, would also face millions of dollars in possible criminal fines. The report says that Mr. Madoff has been free on bail since his arrest on December 11, 2008. There was no plea agreement with Mr. Madoff in which leniency in sentencing might be recommended, the report states, citing prosecutors. BRAND ENERGY: S&P Changes Recovery Rating; Keeps 'B' Issue Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its recovery ratings on Brand Energy & Infrastructure Services' $905 million first-lien facilities to '4' from '3', indicating S&P's expectation of average (30%-50%) recovery in the event of payment default. At the same time, Standard & Poor's affirmed its 'B' issue rating (the same as the corporate credit rating) on the company. The first-lien facilities consist of a $755 million term loan facility, a $125 million revolving credit facility, and a $25 million synthetic letter of credit facility. The $375 million second-lien credit facility consists of one part issued in the U.S. and another in Canada. Standard & Poor's lowered its issue rating on the $180 million second-lien term loan of the Canadian subsidiary Aluma Systems Inc. to 'B+' from 'BB-', one notch higher than the corporate credit rating on the parent company. S&P revised the recovery rating to'2', which indicates S&P's strong expectation of substantial (70%-90%) recovery in the event of a payment default, from '1'. S&P also affirmed the 'CCC+' ratings (two notches below the corporate credit rating) on the $195 million U.S.-issued second-lien term loan. The recovery rating is '6'. These ratings indicate S&P's expectation of negligible (0%-10%) recovery in the event of a payment default. "The ratings on Brand Energy & Infrastructure Services reflect the company's highly leveraged financial profile, exposure to the volatile energy sector, and customer concentration risk," said Standard & poor's credit analyst Aniki Saha-Yannopoulos. "The company's position as the largest provider of specialty multi- craft services in North America, its long-term customer relationships, and its strong maintenance component of about 65% of revenues mitigate these factors." As of Sept. 30, 2008, Brand's total adjusted debt was about $1.1 billion, including operating leases. Standard & Poor's Ratings Services considers Brand's business profile to be vulnerable. Brand's work access services are highly dependent on the volatile energy sector--particularly refineries and Canadian oil sands, and, to a lesser extent, utilities. Customer concentration is also a concern; Brand's top 10 customers contributed about 30% of the company's total revenues in 2007. However, maintenance work, along with long-term customer relationships, a high contract renewal rate, and a high variable cost profile allows Brand to quickly cut costs and provide some stability to earnings and cash flows. The acquisitions of Protherm Services Group LLC and Industrial Specialists LLC in late 2007 allow Brand to diversify its operations geographically and to offer specialty craft services. Given the current cancellations or delays in capital projects including the Canadian oil sands, the diversity of services offered is expected to provide some protection against the current volatility in the industry. The stable outlook on Brand is based on S&P's expectations that the company will continue to maintain its credit measures within the ratings category and that its entry into specialty craft services will provide some revenue stability in the current market conditions. An outlook revision to positive is unlikely in the near term given the industry conditions and the company's financial metrics. The outlook may be revised to negative or ratings may be lowered should management pursue aggressive financial policies or if operations deteriorate such that debt to EBITDA increases at more than 6x or fixed-charge coverage drops to less than 1.5x. BROWN SHOE: Cut by Moody's to 'B2' on Challenging Environment ------------------------------------------------------------- Moody's Investors Service downgraded Company, Inc.'s ratings, including its corporate family and probability of default ratings to B2 from Ba3, and the rating on its senior unsecured notes to B3 from B1. The ratings outlook is negative. Concurrently, Moody's affirmed Brown Shoe's SGL-3 speculative grade liquidity rating. The downgrades reflect the significant decline in Brown Shoe's operating performance, cash flow and credit metrics in the fourth quarter of 2008, and weak outlook for 2009. Brown shoe's operating performance and credit metrics deteriorated rapidly in the fourth quarter of 2008 due to the accelerated decline in consumer spending during the quarter. Earnings decreased due to increased promotions at retail, and higher markdowns in wholesale. Free cash flow turned negative, leading to increased revolver borrowing at the end of the year. Despite the company's plans to generate positive operating profit and free cash flow (as defined by the company) on improved gross margins and cost cutting initiatives, Moody's is concerned that execution risk remains high, as does the risk for continued contraction through 2009. The affirmation of the SGL-3 speculative grade liquidity rating reflects Moody's opinion that the company's near term liquidity should remain adequate. Balance sheet cash ($87 million as of January 31, 2009) and ample availability under its asset based revolver appear sufficient to cover capital spending and dividends over the next twelve months. The company's credit facility was recently amended to increase its size to $380 million and extend the expiration to January 2014. The company also continues to have numerous qualitative strengths that support the rating, including its moderate size, national footprint, credible market position, and solid portfolio of brand names. The ratings outlook is negative, reflecting Brown Shoe's weak credit metrics and the challenging retail environment. Additional downgrades could stem from any erosion in liquidity or cash flow, or further material declines in operating performance and credit metrics, such as gross margin contraction outside expectations or EBITA/Interest falling near 1.0x. The ratings could be stabilized over time if free cash flow turns meaningfully positive, debt/EBITDA is sustained near 6.0x and EBITA/Interest approaches 1.5x. These ratings were downgraded: -- Corporate family rating to B2 from Ba3; -- Probability-of-default rating to B2 from Ba3; -- Senior unsecured notes due 2012 to B3 (LGD5, 76%) from B1 (LGD4, 69%). This rating was affirmed: -- Speculative Grade Liquidity Rating at SGL-3 The prior rating action on Brown Shoe was on October 20, 2008, when Moody's affirmed the company's Ba3 CFR and changed the outlook to stable from positive. Brown Shoe Company, Inc., headquartered in St. Louis, Missouri, is a retailer and wholesaler of footwear. About 70% of its revenue is generated by its retail stores, which consist of 1,425 Famous Footwear, Naturalizer, and F.X. LaSalle stores in the U.S. and Canada, and its e-commerce businesses. Its portfolio of branded footwear includes (but is not limited to); Naturalizer, LifeStride, Connie, Buster Brown, Brown Shoe, E. Aigner, Via Spiga, Franco Sarto, Dr. Scholl's, and Carlos Santana. * * * Moody's Investors Service downgrade matches the demotion given out March 6 by Standard & Poor's, Bloomberg's Bill Rochelle said. BRUNO'S SUPERMARKETS: Files CBA Rejection Motion to Complete Sale ----------------------------------------------------------------- Bruno's Supermarkets, LLC, has taken a procedural step to facilitate a sales process that the company believes could preserve jobs at Bruno's and FOOD WORLD locations. Bruno's filed a motion that is technically described as a motion to reject the collective bargaining agreements between Bruno's and the United Food & Commercial Workers. The filing asks the U.S. Bankruptcy Court for the Northern District of Alabama to allow Bruno's to make changes to the labor agreements with its Teammates that will make a sale of some or all of the company's store locations easier, which will ultimately preserve jobs. The motion was made following extensive discussions over several months between Bruno's and the UFCW regarding the Company's current collective bargaining agreements (CBAs). Impending court deadlines for completing a sale necessitated the motion filing. The UFCW represents nearly two-thirds of Bruno's Teammates. Bruno's non-unionized Teammates and other grocery store employees have already made significant sacrifices in their terms and conditions of employment, but Bruno's and the UFCW have been unable to reach agreement on modified CBAs. Under the terms of the proposed modified CBAs, union Teammates would still receive financial and other benefits that non-union Teammates do not receive. The current CBAs also include a "successorship clause," requiring any purchaser of the Company's stores to assume the CBAs and all the obligations they contain. During its pre- and post-petition conversations with potential acquirers, the Company and its financial advisors were in contact with unionized and non- unionized companies. Bruno's has determined that this clause is an impediment to serious conversations with many potential acquirers. The Company also believes that modifying the CBAs increases the likelihood for additional potential acquirers to come forward. If Bruno's is unable to reach sale agreements, it will be forced to pursue other courses of action available in a bankruptcy process, including liquidation. "We want to preserve jobs. Our motion is intended facilitate a process that we believe will do just that at our Bruno's and FOOD WORLD locations," said Jim Grady, Chief Restructuring Officer for Bruno's. "What we're proposing would help in our restructuring efforts and makes it more likely that both union and non-union Teammates will retain their jobs through a sale to a strategic buyer. We intend to continue working with the UFCW and remain committed to reaching a resolution that facilitates a sale while recognizing the Union's role as authorized representative for many of our Teammates." "In the meantime, our doors remain open and our focus will remain, as always, on offering the service, quality and community commitment that make Bruno's and FOOD WORLD the most desirable shopping destinations. I want to express my sincere gratitude to all of our Teammates, their continued hard work and dedication is a key reason we are so important to the communities we serve," Mr. Grady stated. Bruno's made the filing under Section 1113 of the U.S. Bankruptcy Code. Under the Code, the Court will likely schedule a hearing to be held approximately 14 days from today and would be expected to rule within 30 days following the commencement of the hearing. The Company will continue to try to reach an agreement with the union before such a court hearing. The Company noted that if the Court approves its filing, it has no immediate plans to alter wages and benefits other than to potentially make adjustments that were previously agreed to by the UFCW. About Bruno's Supermarkets, LLC Bruno's Supermarkets, LLC, is a privately held company headquartered in Birmingham, Alabama. Bruno's is the parent company of the Bruno's, Food World, and FoodMax grocery store chains, which includes 23 Bruno's, 41 Food World, and 2 FoodMax locations in Alabama and the Florida panhandle. Founded in 1933, Bruno's has operated as an independent company since 2007 after undergoing several transitions and changes in ownership starting in 1995. Bruno's filed voluntary Chapter 11 petitions on Feb. 5, 2009. Bruno's has retained Alvarez & Marsal, a restructuring and corporate advisory firm, to assist the company throughout the restructuring process. Burr & Forman LLP is the Debtor's lead counsel. Najjar Denaburg, P.C. is its conflicts counsel. CARABEL EXPORT: Court OKs Auction; Continental is Lead Bidder ------------------------------------------------------------- Upon the motion of Carabel Export & Import, Inc. d/b/a Italceramica, et al., the U.S. Bankruptcy Court for the District of Puerto Rico approved on March 6, 2009: i) the bidding procedures for the sale of the Debtors' assets to Continental Tiles, Inc., which is the stalking horse bidder, or to the bidder submitting the highest or otherwise best bid at the auction; ii) the sale of the assets to the successful bidder at the auction sale to be conducted as provided in the Bidding Procedures; and iii) the stipulation between Westernbank and the Debtors for the use of Cash Collateral. Continental, the Stalking Horse Bidder, the stock of which is held by the Debtors' president's father, Mr. Heli Rivera, has submitted a bid of $2,500,000 for the Debtors' assets. The assets to be sold include all of the Debtors' merchandise inventory, machinery and equipment, and all other known assets, as well as the "Italceramica", "National Ceramics" and "Caribbean Marble & Granite" Trade Name, logos and their domain. The Court has set a sale hearing for April 7, 2009, at 10:30 a.m. The bid deadline is March 31, 2009. Responses or objections, to any of the relief requested by the Debtors, including the entry of the Sale Order, shall be filed with the Bankruptcy Court so as to received on or before 4:00 p.m. on April 6, 2009, and served on the Notice Parties not later than the close of business on April 3, 2009. Agreement with Westernbank Pursuant to the agreement with Westernbank, the Debtors are permitted to use Cash Collateral of Westernbank in an amount not to exceed $250,000 per month, up to and including April 15, 2009, and solely to satisfy the expenses included in a budget. All payments and expenses from the Cash Collateral shall be subject to the approval of Pedro Morazanni, from Zayas & Morazzani, as the Monitor of Westernbank's Collateral. In addition to the $250,000, Westernbank also authorizes the Debtors to use Cash Collateral in an amount not to exceed $30,000, to satisfy postpetition, allowed and unpaid professional fees of the Debtors' counsel and accountant. Furthermore, all of the proceeds of the sale up to the amount of the Westernbank Claim shall go to Westernbank, through a plan of liquidation, subject a Carve-Out in the amount of $60,000 for the fees of the Debtors' professionals plus any amounts which are required for the payment of the U.S. Trustee fees. As of the petition date, the Debtors owed Westernbank approximately $18,577,639 under the Financing Agreements. The Debtors' obligations under the Financing Agreements is secured by a first priority security interest over substantially all of the assets of the Debtors. Auction Sale Pursuant to the Asset Purchase Agreement between Debtors and Continental, the auction sale, if necessary, will be conducted on or before April 6, 2009, at 10:00 a.m. prevailing eastern time at the offices of O'neill & Borges, American International Plaza, 250 Munoz Street, Suite 800, in San Juan, PR 00918-1913. Approved Bidding Procedures To become a Qualified Bidder for the purchase of the Debtors' assets, a potential bidder must provide satisfactory evidence of committed financing reasonably sufficient to ascertain said bidder's ability to close the sale on or before April 15, 2009. A potential bidder must submit an executed Agreement on substantially the same terms as set forth in the Asset Purchase Agreement marked to show changes thereto, which are not conditioned on obtaining financing and contain an offer to purchase the assets for no less than $100,000 in excess of the purchase price set forth in the Asset Purchase Agreement. Qualified Bids must be accompanied by a cash deposit of $125,000, which deposit shall be forfeited as liquidated damages if the Potential Bidder is selected as the successful bidder at the auction, approved by the Bankruptcy Court and fails or refuses to close for reasons other than the Sellers' default.. A full-text copy of the Approved Bidding Procedures is available at: http://bankrupt.com/misc/CarabelExport.BiddingProcedures.pdf A full-text copy of the Asset Purchase Agreement between the Debtors and Continental Tiles, Inc., dated as of March 4, 2009, is available at: http://bankrupt.com/misc/CarabelExport.APA.pdf Based in Caguas, Puerto Rico, Carabel Export and Import Inc., dba ItalCeramica, and its affiliates filed separate Chapter 11 petitions on December 30, 2008 (Bankr. D. P.R. Lead Case No. 08-08956). The Hon. Enrique S. Lamoutte oversees the case. Charles Alfred Cuprill, Esq., in San Juan, represents the Debtors. When it filed for bankruptcy, Carabel disclosed $14,544,289 in total assets, and $26,957,250 in total debts. CARABEL EXPORT: US Trustee Appoints 5-Member Creditors Committee ---------------------------------------------------------------- Donald F. Walton, the United States Trustee for Region 21, appointed 5 creditors to serve on the Official Committee of Unsecured Creditors in Carabel Export and Import, Inc. and its debtor-affiliates' jointly administered Chapter 11 cases. The Creditors Committee members are: a) Italcrafts (Fincrafts S.p.A) c/o Mr. Faraci Massimo Via Sacco e Vanzetti 22/24/26 Fiorano Modenese (Mo), Italy 41042 Tel: +39 0536 838911 Fax: +39 0536 831205 Email: giordani@italcrafts.it b) American Supply, Inc. 400 Alton Road TI Miami Beach, FL 33139-6702 c/o Kayla Feliciano Ruiz, Esq. Union Plaza, Suite 311 416 Ponce de Leon Ave. San Juan, P.R. 00918-3430 Tel: (787) 751-8999 (787) 763-7760 Email: kfeliciano@tcmrslaw.com c) Luis Sanchez Diez, S.A. c/o Mr. Luis Miguel Segura Sanchez - Administrator Campet 10 PO Box 57 Alicante-Spain, Novelda Spain 3660 Tel: 34 965 60 17 90 Fax: 34 965 60 10 93 Email: admin@lsd.es d) Pamesa Ceramica SL c/o Mr. Jose Antonio Subies Casanova - Sales Area Manager Camino de Alcora N.8 Almazora (Castellon), Spain 12550 Tel: 34 964 50 75 11 Fax: 34 964 52 27 16 Email: jasubies@pamesa.com e) Unicom SRL c/o Mr. Antonio Poggi - President Via Flumendosa, 7 41042 Spezzano di Fiorano Modenise (Mo), Italy Tel: +39 0536 9266011 Fax: +39 0536 926026 Email: antonio.poggi@unicomstarker.com Based in Caguas, Puerto Rico, Carabel Export and Import Inc., dba ItalCeramica, and its affiliates filed separate Chapter 11 petitions on December 30, 2008 (Bankr. D. P.R. Lead Case No. 08-08956). The Hon. Enrique S. Lamoutte oversees the case. Charles Alfred Cuprill, Esq., in San Juan, represents the Debtors. When it filed for bankruptcy, Carabel disclosed $14,544,289 in total assets, and $26,957,250 in total debts. CARE FOUNDATION: May Use NHI's Cash Collateral on Interim Basis --------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Tennessee has granted Care Foundation of America, Inc., et al., permission to use cash collateral of National Health Investors, Inc., on an interim basis, pending a final hearing, in accordance with a budget. To secure any diminution in the value of NHI's interest, if any, as a result of the Debtors' use of Cash Collateral during the interim cash collateral period, NHI is granted a replacement lien in all post petition lease payments received by the Debtors. The final hearing on the use of Cash Collateral will be held on March 17, 2009, at 9:00 a.m. A full-text copy of the Debtors' Cash Projections for January - September 2009 is available at: http://bankrupt.com/misc/CareFoundation.CashCollateralBudget.pdf Based in Nashville, Tennessee, Care Foundation of America, Inc. is a nonprofit/tax-exempt organization. The Debtor and five (5) of its debtor-affiliates filed separate petitions for Chapter 11 relief on December 31, 2008 (Bankr. M.D. Tenn. Lead Case No. 08-12367). David E. Lemke, Esq., at Waller Landsden Dortch & Davis, represents the Debtors as counsel. When the Debtors filed for protection from their creditors, they listed total assets of between $50,000,000 and $100,000,000, and total debts of between $1,000,00 and $10,000,000. CASELLA WASTE: Moody's Downgrades Corporate Family Rating to 'B2' ----------------------------------------------------------------- Moody's Investors Service downgraded its debt ratings of Casella Waste Systems, Inc. -- corporate family and probability of default, each to B2 from B1, senior subordinated to Caa1 from B3. The outlook is negative. "The downgrade of the ratings follows the inability to restore coverage and leverage metrics to levels indicative of the B1 rating category," said Moody's analyst, Jonathan Root. Moody's anticipates that EBIT to Interest of about 1.0 time could be a ceiling for this metric over the intermediate term. The interest burden is likely to increase following the planned refinancing of the credit facility. "Additionally, pressure on volumes from the effects of continuing weak economic conditions could offset or limit sought-after gains from more disciplined pricing and cost management programs, resulting in Debt to EBITDA being sustained at an elevated level approaching the mid-five times range," said Root. The combination of the financial effects of the refinancing and weaker demand could also reverse some or all of the recent improvements in free cash flow that Casella has achieved. The negative outlook reflects Moody's belief that the current challenging economic conditions could further pressure earnings in upcoming periods. The credit metric profile could face additional pressure because the debt service requirements of a new credit agreement arranged in the current credit market environment are likely to increase relative to those of the existing credit agreement. The negative outlook also contemplates that cushion with the financial covenants of the existing credit facility is trending negatively, such that Casella could potentially need to seek relief from one or more of the covenants prior to the end of calendar 2009, in the event it does not timely complete the planned refinancing. The B2 corporate family rating reflects the expectation that Casella's operations should produce a level of funds from operations that covers debt service obligations with modest cushion. Leading positions in many of its markets, the increased focus on cost reductions and the intent to enhance yield should help to mitigate pressure on earnings and cash flows that could occur over the near term as volumes remain under pressure. These more disciplined management practices should also help to mitigate pressure on the credit profile that Moody's anticipates will result from the higher interest burden of the refinanced credit agreement. The B2 rating also considers that free cash flow is likely to remain modest, which could limit flexibility to de-lever the capital structure. The ratings could be downgraded if Casella does not timely complete the refinancing of its credit facility or if the cushion with this facility's financial covenants erodes prior to the completion of its refinancing. FFO + Interest to Interest that approaches 2.0 times could result in a downgrade as could Debt to EBITDA that approaches 6.0 times. The outlook could be changed to stable if Casella timely completes the planned refinancing, with debt terms that do not cause EBIT to Interest to be sustained below 1.0 time or Retained Cash Flow to Debt below nine percent. Sustained free cash flow to debt above 4.0%, EBIT to Interest above 1.2 times or Debt to EBITDA below 5.2 times could also result in the stabilization of the outlook. The last rating action was on February 20, 2008 when the outlook was changed to negative from stable. Downgrades: Issuer: Casella Waste Systems, Inc. -- Probability of Default Rating, Downgraded to B2 from B1 -- Corporate Family Rating, Downgraded to B2 from B1 -- Senior Subordinated Regular Bond/Debenture, Downgraded to Caa1 from B3 LGD Assessments: Issuer: Casella Waste Systems, Inc. -- Senior Subordinated Regular Bond/Debenture, Upgraded to LGD5, 84% from LGD5, 85% Casella Waste Systems, Inc. based in Rutland, Vermont, is a vertically-integrated regional solid waste services company that provides collection, transfer, disposal and recycling services to residential, industrial and commercial customers, primarily in the eastern United States. CITIGROUP INC: Government Mulls Steps to Stabilize Bank ------------------------------------------------------- U.S. government officials are discussing what steps they might need to take to stabilize Citigroup Inc. once its problems get worse, Damian Paletta, Jon Hilsenrath, and David Enrich at The Wall Street Journal report, citing people familiar with the matter. According to WSJ, the sources said that the Treasury Department, Office of the Comptroller of the Currency, Federal Reserve, and Federal Deposit Insurance Corp. called Citigroup executives over the weekend amid rumors about the discussions and said that the talks were geared toward future planning. The officials, the report states, denied any new rescue. WSJ says that Federal Reserve Chairperson Ben Bernanke told the Senate during a hearing last week that the government doesn't have a template for winding down a company of Citigroup's size and complexity. "I'd like to challenge the Congress to give us a framework, where we can resolve a multinational complicated financial conglomerate like Citigroup, like AIG, or others, if that became necessary," WSJ quoted Mr. Bernanke as saying. The sources said that regulators are trying to make sure that they are prepared if Citigroup gets worse, which they aren't expecting, WSJ relates. U.S. officials are conducting "stress tests" on the largest banks to determine their long-term viability under tough economic scenarios, WSJ states. According to WSJ, Citigroup executives said that they haven't detected signs of corporate clients or trading partners withdrawing their business, though its shares is almost at $1 apiece, closing Monday at $1.05 on the New York Stock Exchange. Citigroup, WSJ relates, has assured that it has a strong liquidity position and that its capital levels are among the highest in the banking industry. The current price doesn't reflect the company's capital position and earnings power, WSJ states, citing Citigroup CEO Vikram Pandit. About Citigroup Based in New York, Citigroup (NYSE: C) -- http://www.citigroup.com -- is organized into four major segments -- Consumer Banking, Global Cards, Institutional Clients Group, and Global Wealth Management. Citigroup had $2.0 trillion in total assets on $1.9 trillion in total liabilities as of Sept. 30, 2008. As reported in the Troubled Company Reporter on Nov. 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. As part of the agreement, the U.S. Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of approximately $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup will issue preferred shares to the Treasury and FDIC. In addition and if necessary, the Federal Reserve will backstop residual risk in the asset pool through a non-recourse loan. CLEAR CHANNEL: Headed For Restructuring, Says Moody's; Now Caa3 --------------------------------------------------------------- Moody's Investors Service has downgraded Clear Channel Communications, Inc.'s Corporate Family Rating and Probability-of- Default Rating to Caa3 from B2. Moody's also downgraded the Company's senior secured credit facilities to Caa2 from B1 and all senior unsecured notes to Ca from Caa1. In addition, Moody's downgraded Clear Channel's speculative grade liquidity rating to SGL-4 from SGL-2. The ratings downgrade reflects Moody's belief that there is a high probability that the company will violate its secured 9.5x leverage covenant this year, and that when this occurs, a debt restructuring will be likely. The outlook has been revised to negative. This rating action concludes the review initiated on February 6, 2009. Late in the third quarter of 2008, Moody's revised its view regarding 2009 broadcasting industry revenue declines versus 2008 to between 15% and 20%, and outdoor advertising down between 7% and 10%. Subsequently, Moody's took rating actions that reflected revenue assumptions at the low end of these ranges. Under these assumptions, Clear Channel appeared to have sufficient headroom within its very liberal bank credit agreement covenants to withstand the cyclical decline at least through 2009. However, in February 2009, Moody's adjusted Moody's revenue decline assumptions to reflect Moody's concerns that cyclical weakness for both radio broadcasting stations and outdoor advertising would be somewhat worse than Moody's low-end assumption for 2009. As a result, Moody's current assumption for Clear Channel's 2009 revenue decline was raised to the upper teens, which reflects the high end of Moody's range for radio, and outdoor advertising revenues declining by about 15%. This would result in reported EBITDA margins declining to the low 20% range and debt-to-EBITDA leverage growing to 12x (Moody's adjusted) or over 17x on a reported basis by the end of 2009. Based on these assumptions, it appears that Clear Channel will likely be in violation of its secured debt leverage covenants in 2009. "With a capital structure that was highly speculative from its inception, the company's ability to continue as a going concern is completely dependant upon remaining in compliance with its covenants," stated Neil Begley, Senior Vice President of Moody's Investors Service. "But in the current economic environment, compliance will be very challenging, and as a result, such a capital structure will not likely be sustainable," Moody's believe that there are three possible scenarios, with the highest probability associated with the first two which reflect a covenant breach, and both leading to certain debt restructuring. The first consists of the senior secured bank debt holders forcing an immediate restructuring to eliminate additional capital leakage to fund over $320 million of annual junior debt holder cash interest repayments as well as about $384 million of junior debt maturities in 2010. This scenario would result in a restructuring while the company still has a large cash balance (in Moody's view, the $500 million May 2009 debt maturity is likely to be repaid before a covenant breach, with proceeds from the delayed draw secured term loan facility), and recovery for the senior secured debt would be greater before the cash balance declines and junior debt maturities are repaid. The second scenario consists of the company successfully receiving a waiver of its covenant breach or covenant relief via an amendment. In Moody's view, the company would likely be given only limited relief of the covenant and could require a second request within a few quarters. Moody's believes that there would be a significant cash fee paid to the banks, and an upward adjustment in the borrowing rate on the first amendment request, as well as on subsequent requests. Moody's estimate that in this scenario, the company would burn through nearly $400 million of cash before the impact of the higher interest cost, which could reduce 2009 year end cash to under $1.5 billion. In addition, based on Moody's assumption of flat revenues in 2010, significantly higher interest costs, negative cash flow of nearly $800 million, and about $400 million in debt maturities (Moody's assumes that the company no longer has access to the delayed draw term loan for the residual $134 million third quarter maturity), the company would end 2010 with under $300 million in cash and face over $1 billion of debt maturities in 2011. In Moody's opinion, this would be too much for the company to overcome without a robust recovery which would need to almost double 2010 EBITDA in order to meet the company's cash needs, which Moody's believe unlikely. The third scenario, with a low probability of occurring, in Moody's view, assumes that the company does not violate its bank agreement covenant, which would require the company to have a total revenue decline under 15% in 2009, flat or growing revenues in 2010, and a certain recovery in 2011. Though the company still faces nearly $3 billion of debt maturities through 2013 (net of $633 million of repayments from the company's committed delayed draw term loan facility), it should have sufficient cash to meet these maturities. However, 2014 maturities are very significant and would likely require the company to possess materially lower leverage in order to be able to refinance them. Moody's subscribers can find further details in the Clear Channel Credit Opinion published on Moodys.com Moody's has taken these rating actions: Issuer: Clear Channel Communications, Inc. * Corporate Family Rating -- Downgraded to Caa3 from B2 * Probability of Default Rating -- Downgraded to Caa3 from B2 * Senior Secured Revolving Facility -- Downgraded to Caa2 (LGD 3, 37%) from B1 (LGD 3, 33%) * Senior Secured Tranche A Term Loan Facility -- Downgraded to Caa2 (LGD 3, 37%) from B1 (LGD 3, 33%) * Senior Secured Tranche B Term Loan Facility -- Downgraded to Caa2 (LGD 3, 37%) from B1 (LGD 3, 33%) * Senior Secured Tranche C Term Loan Facility -- Downgraded to Caa2 (LGD 3, 37%) from B1 (LGD 3, 33%) * Senior Secured Delayed Draw Term Loan 1 Facility -- Downgraded to Caa2 (LGD 3, 37%) from B1 (LGD 3, 33%) * Senior Secured Delayed Draw Term Loan 2 Facility -- Downgraded to Caa2 (LGD 3, 37%) from B1 (LGD 3, 33%) * Senior Cash Pay Notes due 2016 -- Downgraded to Ca (LGD 4, 67%) from Caa1 (LGD 5, 79%) * Senior Toggle Notes due 2016 -- Downgraded to Ca (LGD 4, 67%) from Caa1 (LGD 5, 79%) * Senior Unsecured Bonds - Downgraded to Ca (LGD 6, 92%) from Caa1 (LGD 6, 91%) * Speculative Grade Liquidity Rating -- Downgraded to SGL-4 from SGL-2 * Outlook -- To Negative from Ratings Under Review Moody's last rating action was on February 6, 2009, when all ratings of Clear Channel were placed under review for possible downgrade. Clear Channel Communications, Inc., headquartered in San Antonio, Texas, is a global media and entertainment company specializing in mobile and on-demand entertainment and information services for local communities and premiere opportunities for advertisers. The Company's businesses include radio and outdoor displays. Clear Channel's revenues for the year ended December 31, 2008 was approximately $6.7 billion. * * * Bloomberg's Bill Rochelle notes that Moody's is now three grades more pessimistic than the downgrade issued in February by Standard & Poor's. S&P, Mr. Rochelle said, was predicting that earnings before interest, taxes, depreciation and amortization will be "materially worse" in the fourth quarter than in the third when EBITDA was down 16 percent. Clear Channel was acquired in July by Bain Capital Partners LLC and Thomas H. Lee Partners LP in a $24.5 billion leveraged buyout. The company completed a tender offer in December repurchasing some of its notes at deep discounts. San Antonio-based Clear Channel had a BBB- investment grade rating from S&P before the company's announcement in Oct. 2006 that it was exploring strategic alternatives. After Bain and Lee increased the price in November 2006, S&P lowered the rating to junk at BB+. The rating went down three more grades in April 2007 and again in June. CLEARWIRE CORP: William Morrow to Replace Benjamin Wolff as CEO --------------------------------------------------------------- Clearwire Corp.'s board of directors has moved to broaden and enhance the company's leadership team by naming telecom industry veteran William T. Morrow as CEO. Mr. Morrow brings nearly 30 years of operational management experience in the communications services industry. Co-Founder and current CEO Benjamin G. Wolff will continue with the Company as Co-Chairman, a position he will share with current Chairman Craig O. McCaw. "Bill Morrow has developed a global reputation in the telecommunications industry as a highly regarded executive with an extraordinary track record of success in U.S., Europe and Japan. Years of experience in key positions with great companies such as AirTouch and Vodafone have given Bill a great perspective on achieving operating efficiencies and enhancing value creation to profitably build and scale businesses," said Craig O. McCaw, Founder and Chairman. Mr. McCaw continued, "Ben Wolff has routinely made the impossible, possible. He has been instrumental in leading the company from its inception to the point that it is at today, raising more than $6 billion in equity and debt financing, structuring partnerships with key industry leaders, and building and operating the world's largest multi-megabit wireless broadband network spanning four countries and serving nearly 500,000 customers. I can't say enough great things about Ben both as a person and a leader. He also has the wisdom and foresight to recognize that in these unprecedented times, a company can't have too much talent. Together, we have recruited Bill Morrow to lead the Clearwire team. As Co-Chairman, now Ben will be able to dedicate more of his time to Clearwire's strategic direction and transactional opportunities." "The chance to lead Clearwire at a time when the company sits on the cusp of doing something truly remarkable -- to change the way people connect to and use the Internet -- was not one to be missed," said Mr. Morrow. "Clearwire's business model and unique assets have us well positioned to meet the rapidly growing demand for mobile broadband services. I'm excited at the prospect of working with everyone at Clearwire as we execute our plan to build a mobile WiMAX network covering up to 120 million people in more than 80 markets by 2010." Morrow brings to Clearwire a global track record of success in corporate leadership positions in Europe, Japan, and the U.S. He recently served as President and CEO of Pacific Gas & Electric in San Francisco where he oversaw operations and successfully directed an overhaul aimed at improving the company's efficiency, supply chain and customer focus. Prior to PG&E, Morrow served in a number of senior executive positions at international mobile communications group Vodafone Ltd. and Vodafone Group PLC, including Chief Executive Officer of Vodafone, Europe, Chief Executive Officer of Vodafone UK Ltd. and President of Vodafone KK in Japan. He also served as President of Japan Telecom Co. and held senior executive positions with wireless telecommunications carrier AirTouch International. "I am looking forward to working with Bill, the board of directors and the rest of the Clearwire team, as we strive to realize the full potential of the business opportunity in front of us," said Mr. Wolff. "It is hard to imagine a person that could be better suited than Bill to lead the company into its next phase of growth." As Co-Chairman, Mr. Wolff will focus on Clearwire's strategic and financing opportunities. In addition, he will continue to serve on the Executive Committee and board of CTIA, and he will also continue in his role as President of Craig O. McCaw's investment company, Eagle River. About Clearwire Headquartered in Kirkland, Washington, Clearwire Corporation (NASDAQ:CLWR) -- http://www.clearwire.com-- offers a suite of advanced high-speed Internet services to consumers and businesses. The company is building the first, nationwide 4G mobile Internet wireless network, bringing together an unprecedented combination of speed and mobility. Clearwire's open all-IP network, combined with significant spectrum holdings, provides unmatched network capacity to deliver next-generation broadband access. Strategic investors include Intel Capital, Comcast, Sprint, Google, Time Warner Cable, and Bright House Networks. Clearwire currently provides mobile WiMAX-based service, to be branded Clear(TM), in two markets and provides pre-WiMAX communications services in 50 markets across the U.S. and Europe. Headquartered in Kirkland, Washington, additional information about Clearwire is available at. As reported by the Troubled Company Reporter on January 26, 2009, Standard & Poor's Rating Services said it assigned its 'B-' corporate credit rating to Kirkland, Washington-based wireless carrier Clearwire Corp. The outlook is stable. Its units have junk ratings in Moody's Investors Service. As reported by the Troubled Company Reporter on January 26, 2009, Moody's assigned first-time ratings to Clearwire Communications LLC (corporate family rating of Caa1 and speculative grade liquidity rating of SGL-2) with a negative outlook. The ratings for Clearwire reflect the company's high financial and business risk given the start-up nature of its operations. In addition, while Clearwire will operate as an independent company, Moody's believe that there will be significant challenges to developing the business, in part due to the diverse objectives of its strategic investors. Moody's assigned these first time ratings/assessments were assigned: Clearwire Communications LLC: * Corporate Family Rating -- Caa1 * Probability of Default Rating -- Caa2 * Speculative Grade Liquidity Rating -- SGL-2 * Rating Outlook -- Negative Clearwire Legacy LLC and Clearwire XOHM LLC (Co-Borrowers): * $1.234 Billion Senior Secured Term Loan due May 2011 -- B3 (LGD-2, 24%) * $179 Million Incremental Sprint Term Loan due May 2011 -- Caa3 (LGD-5, 70%) CHANGING WORLD: Weil Gotshal Has $830,000 Claim for Failed IPO -------------------------------------------------------------- David McLaughlin posted at The Wall Street Journal's Bankruptcy Beat blog that Changing World Technologies Inc. owed Weil, Gotshal & Manges about $830,000. Weil Gotshal, according to Mr. McLaughlin, holds a $1 million promissory note for payment of legal fees and expenses tied to Changing World's initial public offering in February 2009, which failed to lure investors. Mr. McLaughlin says that Weil will be raking in a stream of tidy profits for years to come as the financial crisis pushes more and more companies into bankruptcy. About Weil Weil, Gotshal & Manges -- http://www.weil.com/-- is an international law firm headquartered in New York City. It is one of the largest and most highly regarded law firms in the world, with approximately 1,300 lawyers and gross annual revenue in excess of $1.7 billion. About Changing World West Hempstead, New York-based Changing World Technologies, Inc. - - http://www.changingworldtech.com/-- and its affiliates filed for Chapter 11 bankruptcy protection on March 4, 2009 (Bankr. S.D. N.Y. Case No. 09-10977). Patrick J. Orr, Esq., and Tracy L. Klestadt, Esq., at Klestadt & Winters, LLP, represent the Debtors in their restructuring efforts. The Debts listed $1 million to $100 million in assets and $1 million to $100 million in debts. CHARYS HOLDING: Court Declines to Stay Ch. 11 Plan Pending Appeal ----------------------------------------------------------------- The U.S. Bankruptcy Court, District of Delaware declined to issue a stay, pending appeal, of its confirmation order on Charys Holding Co.'s Chapter 11 plan. As reported by the TCR on March 2, the Bankruptcy Court affirmed that Charys Holding's Chapter 11 plan satisfies the statutory requirements for confirmation under Section 1129 of the Bankruptcy Code. The former owner of a business purchased by Charys, however, wanted the plan held up while he took an appeal on the confirmation order, Bloomberg's Bill Rochelle reported. The Chapter 11 Plan, according to Mr. Rochelle, provides for these terms: -- Convertible noteholders will recover 32.5% in the form of 94% of the new stock plus $20 million in secured notes maturing in four years and paying 15% interest. -- Unsecured creditors with $107 million in claims are expected to recover 15 cents on the dollar, from a liquidating trust created under the Plan; -- Holders of subordinated claims and equity interests in Charys won't recover anything. A full-text copy of the First Amended Joint Plan of Reorganization is available for free at http://ResearchArchives.com/t/s?37e8 A full-text copy of the Disclosure Statement is available for free at http://ResearchArchives.com/t/s?37e9 About Charys Holding Headquartered in Atlanta, Georgia, Charys Holding Co., Inc. -- http://www.charys.com/-- provides remediation & reconstruction and wireless communications & data infrastructure. The company and its affiliated debtor, Crochet & Borel Services, Inc., filed for Chapter 11 protection on Feb. 14, 2008 (Bankr. Del. Lead Case No. 08-10289). Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Lydia T. Protopapas, Esq., at Weil, Gotshal & Manges LLP, represent the Debtors as counsel. Chun I. Jang, Esq., Mark D. Collins, Esq., and Paul N. Heath, Esq., at Richards, Layton & Finger, P.A., represent the Debtors as Delaware counsel. Matthew S. Barr, Esq., at Milbank, Tweed, Hadley & McCloy, LLP represents the Official Committee of Unsecured Creditors as counsel. Chad A. Fights, Esq., and Gregory W. Werkheiser, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Committee as Delaware counsel. Chary's Holdings Co. Inc. reported total assets of $242.7 million and total liabilities of $378.6 million in its operating report for August 2008. CONGOLEUM CORP: Hopes to Confirm Plan by Yearend or Early 2010 -------------------------------------------------------------- Congoleum Corporation on Tuesday provided an update on recent developments in its Chapter 11 reorganization. On Thursday, February 26, 2009, the Bankruptcy Court ruled that certain issues in its most recently proposed reorganization plan did not comply with the Bankruptcy Code. The Bankruptcy Court also issued an order dismissing the case, stating that "the real benefit to the bankruptcy estate of dismissal of this case is that it will force the parties to follow through on an appeal that will resolve these issues once and for all." Congoleum and the other proponents of the plan immediately filed an appeal of the decision, and on Tuesday, March 3, 2009, the Bankruptcy Court stayed this dismissal order to permit the parties to complete the appellate process, noting that "The Court's intention is not and has never been to force Congoleum to cease operations." Roger Marcus, Congoleum CEO, commented: "We believe the events of the past few days are positive steps in our efforts to resolve the obstacles that have delayed our progress towards emerging from bankruptcy. Our case involves a few complex issues. The Bankruptcy Court encouraged an appeal so that a higher Court can rule on these matters and provide guidance on how to address them. We look forward to receiving that direction so we can move forward with a confirmable plan. The Bankruptcy Court also limited activity in the bankruptcy case while the appeal is pursued which should reduce our legal costs during the appeal process." Mr. Marcus also commented, "Our attorneys are already preparing the necessary appeal papers, and I am hopeful we are on a path that could lead to confirmation of a plan before the end of 2009 or early 2010. In the mean time, we remain focused on maintaining a sound operational and financial footing, despite the current economic conditions." About Congoleum Based in Mercerville, New Jersey, Congoleum Corporation (AMEX:CGM) -- http://www.congoleum.com/-- manufactures and sells resilient sheet and tile floor covering products with a wide variety of product features, designs and colors. The company filed for chapter 11 protection on Dec. 31, 2003 (Bankr. N.J. Case No. 03- 51524) as a means to resolve claims asserted against it related to the use of asbestos in its products decades ago. Richard L. Epling, Esq., Robin L. Spear, Esq., and Kerry A. Brennan, Esq., at Pillsbury Winthrop Shaw Pittman LLP, and Paul S. Hollander, Esq., and James L. DeLuca, Esq., at Okin, Hollander & DeLuca, LLP, represent the Debtors. The Asbestos Claimants' Committee is represented by Peter Van N. Lockwood, Esq., and Ronald Reinsel, Esq., at Caplin & Drysdale, Chtd. The Bondholders' Committee is represented by Michael S. Stamer, Esq., and James R. Savin, Esq., at Akin Gump Strauss Hauer & Feld LLP. Nancy Isaacson, Esq., at Goldstein Isaacson, PC, represents the Official Committee of Unsecured Creditors. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, the Court-appointed Futures Claimants Representative, is represented by Roger Frankel, Esq., Richard Wyron, Esq., and Jonathan P. Guy, Esq., at Orrick Herrington & Sutcliffe LLP, and Stephen B. Ravin, Esq., at Forman Holt Eliades & Ravin LLC. American Biltrite, Inc. (AMEX: ABL), which owns 55% of Congoleum, is represented by Matthew Ward, Esq., Mark S. Chehi, Esq., Christopher S. Chow, Esq., and Matthew P. Ward, Esq., at Skadden Arps Slate Meagher & Flom. Congoleum, together with its bondholders, filed a revised plan of reorganization on Nov. 20, 2008. CONGOLEUM CORP: Obtains Covenant Relief From Lender --------------------------------------------------- Roger Marcus, CEO of Congoleum Corp., disclosed that the company's working capital lender remains supportive of the company through its bankruptcy proceedings and market conditions. According to Mr. Marcus, the lender has agreed, subject to court approval, to a modification of the company's financing arrangement to adjust covenants in light of the environment and the company's current performance. The agreement was filed with the court on March 7, 2009. Congoleum has taken an appeal from the order of the U.S. Bankruptcy Court for the District of New Jersey dismissing its bankruptcy cases. According to Mr. Marcus, "Our attorneys are already preparing the necessary appeal papers, and I am hopeful we are on a path that could lead to confirmation of a plan before the end of 2009 or early 2010. In the mean time, we remain focused on maintaining a sound operational and financial footing, despite the current economic conditions." Congoleum, however, remains wary that actual results would differ materially from expected and historical results. According to Congoleum, factors that could cause actual results to differ from expectations include: (i) the future cost and timing of estimated asbestos liabilities and payments, (ii) the availability of insurance coverage and reimbursement from insurance companies that underwrote the applicable insurance policies for the Company for asbestos-related claims, (iii) the costs relating to the execution and implementation of any plan of reorganization pursued by Congoleum, (iv) timely reaching agreement with other creditors, or classes of creditors, that exist or may emerge, (v) satisfaction of the conditions and obligations under Congoleum's outstanding debt instruments, (vi) the response from time to time of Congoleum's and its controlling shareholder's, American Biltrite Inc.'s, lenders, customers, suppliers and other constituencies to the ongoing process arising from Congoleum's strategy to settle its asbestos liability, (vii) Congoleum's ability to maintain debtor-in-possession financing sufficient to provide it with funding that may be needed during the pendency of its Chapter 11 case and to obtain exit financing sufficient to provide it with funding that may be needed for its operations after emerging from the bankruptcy process, in each case, on reasonable terms, (viii) timely obtaining sufficient creditor and court approval -- including the results of any relevant appeals -- of any reorganization plan pursued by Congoleum, and the court overruling any objections to the plan that may be filed, (ix) compliance with the United States Bankruptcy Code, including Section 524(g), (x) costs of, developments in, and the outcome of insurance coverage litigation pending in New Jersey state court involving Congoleum and certain insurers, (xi) the possible adoption of another party's plan of reorganization which may prove to be unfeasible, (xii) increases in raw material and energy prices or disruption in supply, (xiii) increased competitive activity from companies in the flooring industry, some of which have greater resources and broader distribution channels than Congoleum, (xiv) increases in the costs of environmental compliance and remediation or the exhaustion of insurance coverage for such expenses, (xv) unfavorable developments in the national economy or in the housing industry in general, including developments arising from the war in Iraq and Afghanistan and from the tightening of credit availability, (xvi) shipment delays, depletion of inventory and increased production costs resulting from unforeseen disruptions of operations at any of Congoleum's facilities or distributors, (xvii) product warranty costs, (xviii) changes in distributors of Congoleum's products, and (xix) Congoleum's interests may not be the same as its controlling shareholder, American Biltrite Inc. In any event, if Congoleum is not successful in obtaining sufficient creditor and court approval of a plan of reorganization, such failure would have a material adverse effect upon its business, results of operations and financial condition. About Congoleum Based in Mercerville, New Jersey, Congoleum Corporation (AMEX:CGM) -- http://www.congoleum.com/-- manufactures and sells resilient sheet and tile floor covering products with a wide variety of product features, designs and colors. The company filed for chapter 11 protection on Dec. 31, 2003 (Bankr. N.J. Case No. 03- 51524) as a means to resolve claims asserted against it related to the use of asbestos in its products decades ago. Richard L. Epling, Esq., Robin L. Spear, Esq., and Kerry A. Brennan, Esq., at Pillsbury Winthrop Shaw Pittman LLP, and Paul S. Hollander, Esq., and James L. DeLuca, Esq., at Okin, Hollander & DeLuca, LLP, represent the Debtors. The Asbestos Claimants' Committee is represented by Peter Van N. Lockwood, Esq., and Ronald Reinsel, Esq., at Caplin & Drysdale, Chtd. The Bondholders' Committee is represented by Michael S. Stamer, Esq., and James R. Savin, Esq., at Akin Gump Strauss Hauer & Feld LLP. Nancy Isaacson, Esq., at Goldstein Isaacson, PC, represents the Official Committee of Unsecured Creditors. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, the Court-appointed Futures Claimants Representative, is represented by Roger Frankel, Esq., Richard Wyron, Esq., and Jonathan P. Guy, Esq., at Orrick Herrington & Sutcliffe LLP, and Stephen B. Ravin, Esq., at Forman Holt Eliades & Ravin LLC. American Biltrite, Inc. (AMEX: ABL), which owns 55% of Congoleum, is represented by Matthew Ward, Esq., Mark S. Chehi, Esq., Christopher S. Chow, Esq., and Matthew P. Ward, Esq., at Skadden Arps Slate Meagher & Flom. Congoleum, together with its bondholders, filed a revised plan of reorganization on Nov. 20, 2008. DELPHI CORP: Packard Unit to Lay Off 200 Workers in Warren, Ohio ---------------------------------------------------------------- Delphi Packard Electric will be eliminating 200 salaried workers in its Warren, Ohio plant, effective May 1, 2009, the Tribune Chronicle reports. Delphi spokesperson told the Tribune Chronicle that local management has been informed of the job cuts. Delphi Packard is making the decision to effectuate the lay offs to align its business to be more competitive in the future, the Tribune Chronicle quotes Ms. Valdez as saying. Delphi Packard employs 1,175 salaried workers in Ohio, including Warren, North River Road complex, Vienna, the Champion Tech Center and Rootstown, according to the news source. Delphi Packard hourly workers will not be affected by the job cuts as they have a labor agreement with the company. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. (Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELPHI CORP: Releases Full Year/4th Qtr. 2008 Financial Results --------------------------------------------------------------- Delphi Corp. filed its fiscal year 2008 financial results with the U.S. Securities and Exchange Commission on March 3, 2009. The company reported $3.037 billion in net income for the year ended December 31, 2008. Delphi Chief Executive Officer and President Rodney O'Neal elaborates that the increased net income reflects the reorganization gains related to Delphi's settlements with General Motors Corporation of $5.687 billion recorded during 2008, including $5.332 billion related to the Amended GM-Delphi Global Settlement Agreement and $355 million related to the GM- Delphi Amended Master Restructuring Agreement. Excluding the impact of the GM settlement gains, net loss for 2008 would have been $2.7 billion, compared to a net loss of $3.065 billion in 2007. Loss from discontinued operations was $19 million for 2008, compared to $757 million for 2007. The loss from discontinued operations for 2008 was primarily the result of an unfavorable adjustment of $50 million for estimated proceeds to be received for the assets-held-for sale of the Steering Business, primarily as a result of the continued uncertainty regarding the finalization of negotiations related to that sale. Net cash provided by operating activities totaled $236 million for the year ended December 31, 2008, net cash used in operating activities totaled $289 million for the same period in 2007, and net cash provided by operating activities totaled $9 million for the same period in 2006. Cash flow from operating activities during 2008 reflects the net cash received from GM, totaling $1.1 billion, as a result of the effectiveness of the Amended GSA and MRA. Mr. O'Neal avers that in 2008, Delphi's operational challenges intensified as a result of the continued downturn in general economic conditions, including reduced consumer spending and confidence, high oil prices and the credit market crisis. Through the end of the third quarter of 2008, Delphi continued to be challenged by commodity cost increases, most notably copper, aluminum, petroleum-based resin products, steel and steel scrap, and fuel charges. Mr. O'Neil relates that significant issues continue to impact Delphi's financial performance, including: * a competitive global vehicle production environment for original equipment manufacturers resulting in the reduced number of motor vehicles that its customers produce annually and pricing pressures; * increasingly volatile commodity prices; * U.S. labor legacy liabilities and non-competitive wage and benefit levels; and * restrictive collectively bargained labor agreement provisions, which have inhibited Delphi's responsiveness to market conditions. Specifically, Mr. O'Neal avers, Delphi's sales to GM have declined since its spinoff from GM due to declining GM North America production, the impact of customer-driven price reductions, and GM's diversification of its supply base and ongoing changes in our content per vehicle and the product mix purchased. In light of the current economic climate in the global automotive industry and the global recession, Delphi believes revenue in the first and second quarter of 2009 will be significantly lower compared to revenue in 2008. The Company expects its Accommodation Agreement with its lenders and its Partial Accelerated Payment Agreement with GM to provide it with sufficient short-term U.S. liquidity to support its working capital requirements and operations through May 2009. In addition, Mr. O'Neal says, Delphi intends to meet the minimum funding standards under Section 412 of the Bankruptcy Code with respect to the pension plans upon emergence from Chapter 11. A full-text copy of Delphi's Form 10-K report for the fiscal year ended December 31, 2008, is available at the SEC at: http://ResearchArchives.com/t/s?3a1a Delphi Corporation, et al. Unaudited Consolidated Balance Sheet As of December 31, 2008 (in Millions) ASSETS Current assets: Cash and cash equivalents $959 Restricted cash 403 Accounts receivable, net: General Motors and affiliates 822 Other customers 1,572 Inventories, net: 1,285 Other current assets 613 Assets held for sale 497 -------- TOTAL CURRENT ASSETS 6,151 Long-term assets: Property, net 3,397 Investment in affiliates 303 Goodwill 62 Other 393 -------- TOTAL LONG-TERM ASSETS 4,155 -------- TOTAL ASSETS $10,306 ======== LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Notes payable, current portion of long-term debt $554 DIP financing 3,620 Accounts payable 1,771 Accrued liabilities 2,171 Liabilities held for sale 313 -------- TOTAL CURRENT LIABILITIES 8,429 Long-term liabilities: Other long-term debt 55 Employee benefit plan obligations 552 Other 973 -------- TOTAL LONG-TERM LIABILITIES 1,580 Liabilities subject to compromise 14,583 -------- TOTAL LIABILITIES 24,592 -------- Minority interest 139 Stockholders' deficit: Common stock 6 Additional paid-in capital 2,747 Accumulated deficit (12,064) Accumulated other comprehensive loss (5,108) Treasury stock, at cost (3.2 million shares) (6) -------- TOTAL STOCKHOLDERS' DEFICIT (14,425) -------- TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $10,306 ======== Delphi Corporation, et al. Unaudited Consolidated Statement of Operations Year Ended December 31, 2008 (In Millions) Net sales: General Motors and affiliates $5,525 Other customers 12,535 -------- Total net sales 18,060 -------- Operating expenses: Cost of sales 17,068 Gross margin 992 U.S. employee workforce transition program charges 78 GM settlement - MRA (254) Depreciation and amortization 827 Long-lived asset impairment charges 37 Goodwill impairment charges 325 Selling general and administrative 1,460 Securities and ERISA litigation charge - -------- Total Operating Expenses 19,451 -------- Operating loss (1,481) Interest expense (437) Loss on extinguishment of debt (49) Other (expense) income, net 69 Reorganization items 5,147 Income tax benefit (expense) (166) Minority Interest, net of tax (28) Equity income (loss), net of tax 1 Loss from discontinued operations, net of tax 3,056 Cumulative effect of accounting change, net of tax (19) -------- NET INCOME $3,037 ======== Delphi Corporation, et al. Unaudited Consolidated Statement of Cash Flows Year Ended December 31, 2008 (In Millions) Cash flows from operating activities: Net income $3,037 Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 827 Long-lived asset impairment charges 362 Deferred income taxes (15) Pension and other postretirement benefit expenses 611 Equity income (1) Reorganization items (5,147) GM settlement (254) GM warranty settlement (107) U.S. employee workforce transition prog. charges 78 Loss on extinguishment of debt 49 Securities & ERISA litigation charge - Loss on liquidation/deconsolidation of investment - Loss on assets held for sale, net of gain on sale of investment 9 Changes in operating assets and liabilities: Accounts receivable, net 1,361 Inventories, net 476 Other assets 245 Accounts payable (1,009) Accrued and other long-term liabilities (512) Other, net (197) U.S. employee workforce transition program payments, net of reimbursement by GM (219) Pension contributions (383) Other postretirement benefit payments (216) Receipts (payments) for reorganization items (1,115) Dividends from equity investments 11 Discontinued operations 115 -------- Net cash used in operating activities 236 Cash flows from investing activities: Capital expenditures (797) Proceeds from sale of non-U.S. trade bank notes 219 Proceeds from divestitures and sale of property 216 Increase in restricted cash (230) Other, net (37) Discontinued operations (110) -------- Net cash used in investing activities (739) Cash flows from financing activities: Proceeds from amended and restated DIP facility 3,528 Proceeds from refinanced DIP facility - Repayments of borrowings under DIP facility (2,746) Net repayments of borrowings under refinanced DIP facility - Repayments of borrowings under prepetition term loan - Repayments of borrowings under prepetition revolving credit facility - Repayments under cash overdraft - Net borrowings (repayments) under other debt pacts (203) Accommodation agreement issuance costs (58) Dividend payments of consolidated affiliates to minority shareholders (47) Other, net - Discontinued operations (9) -------- Net cash used in financing activities 465 -------- Effect of exchange rate fluctuations on cash & cash equivalents (39) -------- Decrease in cash and cash equivalents (77) Cash and cash equivalents at beginning of period (1,036) -------- Cash and cash equivalents at end of period $959 ======== 2008 Fourth Quarter Financial Data Delphi Corp. and its affiliates submitted to the Bankruptcy Court on March 4, 2009, a consolidated operating report for the quarter ended December 31, 2008. The Debtors clarify that financial data on the non-debtor entities, principally non-U.S. affiliates, are excluded from their 2008 4th quarter financial report. Delphi Corporation, et al. Quarterly Operating Report Condensed Combined DIP Balance Sheet As of December 31, 2008 (in millions) ASSETS Cash and cash equivalents $231 Restricted cash 355 Accounts receivable, net: General Motors affiliates 670 Other third parties 385 Non-Debtor affiliates 249 Notes receivable from non-Debtor affiliates 77 Inventories, net 493 Other current assets 204 Assets held for sale 333 ------- Total current assets 2,997 Long-term assets: Property, net 1,182 Investments in affiliates 251 Investment in non-Debtor affiliates 1,104 Goodwill 37 Notes receivable from non-Debtor affiliates 1,429 Other 183 ------- Total long-term assets 4,186 ------- Total assets $7,183 ======= LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities not subject to compromise: Short-term debt 3,635 Accounts payable 551 Accounts payable to non-Debtor affiliates 535 Accrued liabilities 1,318 Liabilities held for sale 149 ------- Total current liabilities not subject to compromise 6,188 Long-term liabilities not subject to compromise: Long-term debt 20 Employee benefit plan obligations and other 736 ------- Total long-term liabilities not subject to compromise 756 Liabilities subject to compromise 14,664 ------- Total liabilities 21,608 ------- Stockholder's deficit: Total stockholders' deficit (14,425) ------- Total liabilities and stockholders' deficit $7,183 ======= Delphi Corporation, et al. Quarterly Operating Report Condensed Combined DIP Statement of Operations Three Months Ended December 31, 2008 (in millions) Net sales: General Motors and affiliates $864 Other customers 675 Non-Debtor affiliates 61 ------- Total net sales 1,600 Operating Expenses: Cost of sales 1,718 U.S. Employee workforce transition prog. charges 2 GM settlement - Depreciation and amortization 99 Long-lived asset impairment charge 2 Goodwill impairment charge 16 Selling, general and administrative 207 ------- Total operating expenses 2,044 ------- Operating loss (444) Interest expense (111) Loss on extinguishment of debt - Other income, net (23) Reorganization items: GM settlement - Professional fees and other, net (8) Income tax expense (11) Equity income from non-consolidated affiliates, net of tax - ------- Loss from continuing operations (597) Loss from discontinued operations, net of tax (42) Equity income from non-Debtor affiliates, net of tax (402) ------- Net (loss) income ($1,041) ======= Delphi Corporation, et al. Quarterly Operating Report Condensed Combined DIP Statement of Cash Flows Three Months Ended December 31, 2008 (in millions) Cash flows from operating activities: Net cash provided by operating activities ($397) ------- Cash flows from investing activities: Capital expenditures (51) Proceeds from sale of property 8 Proceeds from divestitures 9 Increase in restricted cash (305) Return of investment from non-Debtor affiliates (4) other, net (48) Discontinued operations 35 ------- Net cash used in investing activities (357) ------- Cash flows from financing activities: Net borrowings under amended and restated (95) DIP facility 2 Other (58) ------- Net cash provided by financing activities (151) ------- Decrease in cash and cash equivalents (905) ------- Cash and cash equivalents at beginning of period 1,136 ------- Cash and cash equivalents at end of period $231 ======= The Debtors' Quarterly Operating Report also included exhibits on a payroll schedule, a payroll tax schedule, a schedule on other taxes and a disbursement schedule. A full-text copy of the Delphi Quarterly Operating Report for the quarter ended December 2008 is available for free at: http://ResearchArchives.com/t/s?3a2b About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. (Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELPHI CORP: Retiree Groups Challenge Termination of OPEB --------------------------------------------------------- An official committee of eligible salaried retirees and other non- union salaried retirees of Delphi Corp. have taken an appeal to the U.S. District Court for the Southern District of New York on February 25, 2009, from Bankruptcy Judge Robert D. Drain's order authorizing termination of Debtors' Salaried Other Post- Retirements Benefits Program effective April 1, 2009. The Delphi Salaried Retirees Association and other non-union retiree groups want to the District Court to review whether the U.S. Bankruptcy Court for the Southern District of New York committed irreversible error in: -- concluding that the protections of Section 1114 do not apply to the Debtors' Salaried OPEB Termination Motion that the Debtors reserved the right to amend or modify; -- denying Salaried Retirees' motions to appoint an official Retiree Committee pursuant to Section 1114(d) where the Debtors sought to terminate retiree benefits pursuant to Section 1114(a) with less than eight weeks' notice; and -- authorizing the Debtors to terminate employee retiree benefit plans and programs that the Debtors reserved the right to amend or modify, where the Debtors admittedly failed to propose fair and equitable modifications to the benefit plans in accordance with Section 1114(f) prior to seeking to terminate those plans, in violation of Section 1114(e). In a separate filing, the DSRA asked the Bankruptcy Court to stay the Salaried OPEB Order pending resolution of the Appeal. Neil Goteiner, Esq., at Farella Braun & Martel LLP, in San Francisco, California, said although the DSRA is asking the District Court to expedite the Appeal, it will not be possible to have the Appeal heard and decided before the salaried retirees' benefits are terminated. He said if the Bankruptcy Court refuses to stay the OPEB Order, the DSRA will be seriously and irreparably harmed by: (i) the lack of an official retirees' committee under Section 1114(d) to represent its interests and negotiate over consensual modifications to the retiree benefit plans; (ii) the inability to protect against unilateral termination of all benefits with very little notice as prohibited by Section 1114(e); (iii) the loss of all subsidies for health and life insurance benefits; (iv) the Debtors' failure to propose Section 1114(f) modifications to the benefit plans that are necessary, but less harmful to DSRA than outright termination, and fair and equitable within Section 1114(g); and (v) the risk of benefit loss, including inadvertent loss of benefits, because retirees are unaware their benefits will lapse. Mr. Goteiner also said the stay is necessary to permit the appointed Section 1114 Committee to have the opportunity to negotiate some modifications of the Salaried OPEB Order with the Debtors in return for giving up appeal rights on behalf of the salaried retirees. The retiree groups have opposed the Debtors' bid to terminate OPEB without following Section 1114 of the Bankruptcy Code. As reported by the Troubled Company Reporter on February 26, 2009, Judge Drain gave tentative approval on the Debtors' request after witnesses for Delphi testified the cuts were vital to its survival because its lenders demanded them. The Court authorized Delphi to terminate medical, drug, dental and vision benefits for the 15,000 retired salaried workers. Judge Drain, however, called for the formation of a committee representing salaried retirees and gave the group a $200,000 budget to be paid by Delphi. As reported by the TCR on March 3, 2009, citing Bloomberg News, the Committee and its lawyer can search for and present evidence to Judge Drain at a March 11 hearing on the issue of whether the retirees already had vested health-care benefits the Court couldn't cut off summarily. "If [Judge] Drain decides the benefits weren't vested, his ruling from Feb. 25 indicates Delphi will be allowed to terminate the retirees' health benefits on March 31. [Judge] Drain also authorized the committee to negotiate a settlement with Delphi," Bloomberg said. In compliance with the Court's initial order on the Salaried OPEB Motion, Mr. Goteiner, Esq., informed the Court that the Retiree Committee has been engaged in discussions with the Debtors over modifications of the Salaried OPEB Order to preserve the retirees' effective access to a plan to preserve Health Coverage Tax Credit eligibility in light of the need to have a benefit program that avoids lapse of coverage and take into account the Debtors' cash flow pressures. According to Mr. Goteiner, the Retiree Committee has coordinated with the objecting parties at the February 24, 2009 hearing regarding appeal from the Salaried OPEB Order and the Retiree Committee's right to settle any appeal timely filed by the objecting parties in return for the Debtors' concessions for the benefit of retirees. He noted that the Retiree Committee has discovered documents that illustrate vesting rights, namely the 1974, 1980 and 1985 summary plan descriptions, and other official documents given to the Affected Retirees, including personal benefit summaries, memoranda and life insurance letters from the Debtors. Mr. Goteiner maintained that the threshold issue remains on whether the Debtors need to follow the statutory guidelines set forth in Section 1114. "However," he contended, "it seems the exact scenario that Section 1114 was designed to prevent is happening in these proceedings and the Affected Retirees are put in a position where they have to prove the ultimate issue that their benefits are vested before they were able to take any meaningful discovery or avail themselves of the protections granted under Section 1114." He asserted that, "This scenario represents a fundamental violation of Section 1114 and exposes the most vulnerable group in a bankruptcy, unrepresented retirees, to losing their retirement benefits before they ever have a chance to defend themselves." Mr. Goteiner stressed that based on the Summary Plan Descriptions and other related documents, there is no doubt that the Affected Retirees were promised lifetime benefits at GM's cost and without any reservation of rights from 1974 until 1985, an obligation of which the Debtors have taken over. It was only in 1985 that GM added the unilateral termination language, he said. He cited that the Retiree Committee even found specific subsets of retirees who may have separate claims to vested benefits: (1) GM's Frigadaire Division retirees, who were promised Lifetime benefits by GM and subsequently, GM's obligations were transferred to the Debtors; (2) American Axle & Manufacturing retirees, who never worked for the Debtors yet GM somehow transferred its obligations for the group to the Debtors; and (3) retirees who might be eligible under the February 17, 2009 American Recovery and Reinvestment Act. The ARRA contains provisions relating to Consolidated Omnibus Budget Reconciliation Act, including that (i) if an individual is terminated from employment between September 1, 2008, and December 31, 2009, then the COBRA premiums are capped at 35% of the premium, and (ii) if former employees paid more than 35% of the COBRA premium during that time period, then the group plan must refund the amount the individual paid that exceeded the 35% cap. The retiree groups asked the Court to revise its provisional OPEB Order and require the Debtors to follow process set out by Section 1114. Any revision does not pre-judge any result, Mr. Goteiner said, but merely grants the Affected Retirees the statutory protections entitled to them under Section 1114 and allows them a meaningful opportunity to present a defense and to negotiate with the Debtors to protect the retirement benefits they worked for as employees. "At best, the revision would allow the delay needed to establish a national plan via a voluntary employee benefits association to transition employees from a struggling company's incompetence to a retiree self managed program," Mr. Goteiner said. Six salaried retirees also filed separate letters objecting to the Salaried OPEB Motion: * Eugene P. Bovenzi * Debra Jean and Michael Bruce Cooley * Rick De Vilbiss * Steve Puckett * Margaret Marshall DSRA Comments on Bid to Appoint Non-Union Retiree Panel Before the Court entered its ruling on the Debtors' Salaried OPEB Motion, the Delphi Salaried Retirees Association conditionally joined in the request of Paul Higgins, James Conger, Doug A. Kittle, Joni Walls, and certain other non-union salaried retirees of the Debtors for the appointment of an official non-union retiree committee pursuant to Section 1114(d) of the Bankruptcy Code. The DSRA, however, objects to Higgins, et al.'s Motion to the extent that: (i) it is the U.S. Trustee for Region 2 and not the Bankruptcy Court that is responsible for appointing the committee under Section 1114(d); (ii) while the U.S. Trustee could be enlisted to assist in the committee's formation, the DSRA is an existing retiree organization of more than 2,200 members already mobilized to protect the Debtors' salaried retirees' benefits and represents 1/3 of the salaried retirees; and (iii) a retiree committee should be broadly representative of all retirees, including those who were employed long enough to have received commitments for lifetime benefits. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. (Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELPHI CORP: Seeks to Amend JPMorgan L/C Reimbursement Agreement ---------------------------------------------------------------- Delphi Corporation and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the Southern District of New York to enter into an amended and restated reimbursement agreement with respect to certain letters of credit with JPMorgan Chase Bank, N.A., as issuing bank, and providing certain protections to JPMorgan. The Debtors were entitled to seek the issuance of letters of credit from the DIP Lenders and the DIP Administrative Agent, JPMorgan, under their Second Amended and Restated DIP Credit Agreement before December 12, 2008, or the date the DIP Accommodation Agreement was made effective. Upon the effectivity of the DIP Accommodation Agreement, the Debtors could no longer obtain additional loans or LOCs under the DIP Facilities. They were, however, allowed to replace or continue outstanding LOCs that existed before December 12, 2008, when they expire for $125 million, and those LOCs may be secured by first priority liens on cash collateral for $135 million. Thus, since the Accommodation Agreement Effective Date, the Debtors have obtained or continued LOCs from JPMorgan, as issuing bank, for use in the ordinary course of their businesses. The LOCs the Debtors have obtained from JPMorgan as of Dec. 12, 2008, aggregate $13.55 million, according to John Wm. Butler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois. Overall, the Debtors have $93 million in outstanding LOCs under their DIP Credit Facilities, he adds. The Debtors aver that they expect the need to obtain more LOCs for the second quarter of 2009 and beyond. The Debtors note that the LOCs issued by JPMorgan is subject to a reimbursement agreement, by which the Debtors have provided cash collateral equal to 105% of the amount of all unmatured and contingent LOCs issued or continued as a security for their obligations under the LOCs. JPMorgan has also sought certain protections that would have been available to a lender who had issued a LOC under the DIP Credit Facilities. In an event of default under the DIP Credit Facilities, the automatic stay would be modified to permit the lender to exercise remedies available. The Debtors' LOC Facility, however, is now separate from the DIP Credit Facilities and JPMorgan, as the issuing bank, would not exercise remedies on behalf of the LOCs. JPMorgan is the only bank issuing LOCs on the Debtors' behalf, Mr. Butler clarifies. Accordingly, to allow the Debtors to continue to obtain LOCs, the Debtors and JPMorgan entered into an Amended and Restated Reimbursement Agreement. The salient terms of the Amended Reimbursement Agreement are: (a) Should there be an event of default under the Amended Reimbursement Agreement or a Future Reimbursement Agreement: -- JPMorgan would have the right to immediately exercise the applicable default-related remedies available under the agreement without having to seek relief from the automatic stay, provided that JPMorgan gives the Debtors a five-day notice before exercising any rights or remedies against the collateral securing the Debtors' obligations under the agreement; and -- the only argument for the Debtors to oppose the exercise of remedies is to dispute that an event of default had occurred and is continuing under the agreement. (b) Upon the occurrence of an Event of Default under the Amended Reimbursement Agreement, JPMorgan would be permitted to apply cash collateral to the payment of all relevant obligations. (c) In the event JPMorgan has foreclosed on the cash collateral and the aggregate amount of the LOCs issued under the Amended Reimbursement Agreement is reduced due to the expiration or termination of the LOCs, JPMorgan, after applying cash to the payment of drawn LOCs, will hold only up to 105% of the aggregate amount of the LOCs remaining and excess funds will be returned to the Debtors periodically. (d) As an added protection, the Debtors and JPMorgan have agreed to carve the Amended Reimbursement Agreement out of the definition of "Loan Documents" under the DIP Credit Facilities, thereby removing the risk of a DIP Facility cross-default should there be a Reimbursement Agreement Event of Default. Mr. Butler elaborates that the Amended Reimbursement Agreement and any order approving the Agreement would not affect LOCs issued before the Accommodation Effective Date because those LOCs were issued under the DIP Credit Facilities and JPMorgan, as DIP Agent, can enforce the rights of the issuers of those LOCs. To the extent the DIP Agent agrees to permit the LOCs that were in effect before the Accommodation Effective Date to continue beyond their expiration dates that were in effect on the Accommodation Effective Date, then those LOCs would become LOCs under the Amended Reimbursement Agreement upon their extension. Mr. Butler also clarifies that the Debtors' request will not have any impact on the seniority or priority of liens granted under the DIP Accommodation Agreement Order. The LOCs in favor of JPMorgan, aggregating $135 million, are granted first priority liens and the LOC Cash Collateral will not be subject to the DIP Carve Out. Moreover, he points out, to avoid confusion of JPMorgan's role as DIP Agent and as a LOC Issuing Bank, JPMorgan's LOC cash collateral will be deposited in an account apart from the other DIP Credit Facilities cash collateral. A hearing to consider the Debtors' request has been set for March 24, 2009. Objections are due no later than March 17. Objecting Lenders Waive Rights to Appeal Meanwhile, a group of 31 Tranche C DIP Lenders of Delphi Corp., Greywolf Capital Management, L.P., M.D. Sass Re/Enterprise Portfolio Company, L.P., Calyon New York Branch, and the Ad Hoc Group of five Tranche A & B DIP Lenders objected to Delphi and its affiliates' request to: -- supplement a DIP facility refinancing order issued by the U.S. Bankruptcy Court for the Southern District of New York and -- enter into an Accommodation Agreement with JPMorgan Chase Bank, N.A., as administrative agent, and certain participating lenders. The Court approved the Debtors' Accommodation Agreement Motion on December 3, 2008. John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, noted that the Objecting Lenders have certain procedural rights with respect to the DIP Accommodation Order, including the right to seek a stay, the right to appeal, and the right to seek consideration. In fact, the Objecting Lenders have considered exercising those rights. The Debtors, however, told the Court that they seek to avoid the distraction and expense of defending against the exercise of any of those appellate rights and the uncertainty of any proceedings. After engaging in discussions with the Debtors, the Objecting Lenders agreed to settle their objections to the Accommodation Motion and waive their Appellate Rights. In return, the Debtors agreed to pay, as administrative expense, the actual costs and reasonable expenses incurred by the Objecting Lenders in connection with their objections to the Accommodation Motion. Judge Robert D. Drain has approved the parties' Stipulation. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. (Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) ECLIPSE AVIATION: New Eclipse & Eclipse to Submit Competing Bids ---------------------------------------------------------------- Heather Clark at The Associated Press report that New Eclipse Acquisition LLC and Eclipse Owners Group want to acquire Eclipse Aviation Corp. Citing New Eclipse and Eclipse Owners, The AP relates that another firm is interested in Eclipse Aviation's assets. According to The AP, New Eclipse wants to relaunch production of the Eclipse 500 in 2011, but will charge current clients for upgrades to their jets. The AP relates that Eclipse Owners called New Eclipse's and the unnamed party's plans "predatory" because they would charge owners too much money to upgrade the jets. The AP states that Eclipse Owners hopes to acquire assets that would let it upgrade and service jets or to partner with an entity that would maintain the long-term reliability of the aircraft. Phil Friedman -- chief officer of Harlow Aerostructures who has formed New Eclipse -- said that he had put in a tentative bid for Eclipse Aviation before the auction in January 2009, says The AP. According to the report, that auction was won by Eclipse Aviation's largest shareholder. Mr. Friedman, the report states, said that he didn't formally bid on Eclipse Aviation after a disagreement over how certain assets were valued. The AP relates that Mr. Friedman proposes to sell new jets for around $2.4 million and produce around 100 jets per year, not the 1,000 jets a year that Eclipse Aviation had proposed in its early years. The report quoted Mr. Friedman as saying, "Once the price goes up, the demand will fall. They thought the high volume would drive the price down. My experience is the economies of scale are not that large." According to The AP, Mr. Friedman said that he will present another proposal to Eclipse Owners that he hopes will urge them to team up. Mr. Friedman said that New Eclipse cannot honor promises from the previous company, The AP states. Mr. Friedman said that he could hire about 600 people by 2011, according the report. The AP reports that more than 800 former Eclipse Aviation workers have sued the Company, seeking 60 days' worth of back wages and benefits because they were furloughed without notice. The lawsuit, says The AP, was filed in the federal court in Delaware for employees furloughed on February 18, 2009, in Albuquerque, Albany, New York, and Gainesville, Florida. Citing Eclipse Aviation's engineering department configuration analyst Annette Varela, The AP relates that since Eclipse Aviation filed for Chapter 11 in November 2008, managers continued to tell employees that funding would save the Company. "We heard nothing about letting us go. They said the sale's pending, nothing about that it wasn't going to go through," the report quoted Ms. Varela as saying. About Eclipse Aviation Albuquerque, New Mexico-based Eclipse Aviation Corporation -- http://www.eclipseaviation.com/-- makes six-passenger planes powered by two Pratt & Whitney turbofan engines. The company and Eclipse IRB Sunport, LLC filed separate petitions for Chapter 11 relief on Nov. 25, 2008 (Bankr. D. Delaware Lead Case No. 08-13031). Daniel Guyder, Esq., John Kibler, Esq., and David C. Frauman, Esq., at Allen & Overy LLP, represent the Debtors as counsel. Joseph M. Barry, Esq., and Donald J. Bowman, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors as Delaware counsel. Eclipse Aviation Corporation listed assets of between $100 million and $500 million and debts of more than $1 billion. EDUCATIONAL RESOURCES: Make and Hold Lenders' Claims Due April 10 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Massachusetts approved on March 4, 2009, the motion of The Education Resources Institute, Inc., for the rejection of its existing loan origination and guaranty agreements with BAC International Credit Corporation, CHELA Financial/USA, Inc., Citibank, Consumers Bank, Educational Finance Group, L.L.P., Maine Educational Loan Authority, Mellon Banak (DE) National Association, Star Bank, N.A., United Bank and Trust Co., Young Americans Bank and Zions First National Bank and its affiliates (collectively, the "Make and Hold Lenders"). As per the Court's order, each Make and Hold Lender and each successor and assign of any Make and Hold Lender is required to file a proof of claim so that said proof of claim is actually received on or before 5:00 p.m. Eastern Daylight Time, April 10, 2009, by the Debtor's claims agent, EPIQ Bankruptcy Solutions, LLC at: a) If by first-class mail: TERI Claims Processing c/o EPIQ Bankruptcy Solutions, LLC FDR Station, P.O. Box 5011 New York, NY 10150-5011 b) If by hand delivery or overnight mail: EPIQ Bankruptcy Solutions, LLC Attn: TERI Claims Processing 757 Third Avenue 3rd Floor, NY 10017 About Education Resources Headquartered in Boston, Massachussetts, The Education Resources Institute Inc. -- http://www.teri.org/-- aka Boston Systems Resources Inc., Brockton Education Opportunity Center, TERI, TERI College Access, TERI College Access Centers and TERI Marketing Services Inc., is a nonprofit organization that promotes educational opportunities for all through its college access and loan guarantee activities. Founded in 1985, TERI is a guarantor of private or non-government student loans with more than $17 billion in outstanding guarantees. The Debtor filed for Chapter 11 petition on April 7, 2008 (Bankr. D. Mass. Case No. 08-12540.) Daniel Glosband, Esq., Gina L. Martin, Esq., at Goodwin Procter LLP represent the Debtor in its restructuring efforts. The Debtor's Conflicts Counsel is Craig and Macauley PC. Grant Thornton LLP, acts as financial advisors, and Citigroup Global Markets Inc. acts as investment banker. Its Claims Agent is Epiq Bankruptcy Solutions LLC. When the Debtor filed for protection from its creditors, it listed estimated assets of more that $1 billion and estimated debts of $500,000 to $1 billion. EMPACT MEDICAL: Involuntary Chapter 11 Case Summary --------------------------------------------------- Alleged Debtor: Empact Medical Services, Inc. 5499 Murfreesboro Road, Suite B Lavergne, TN 37086 Tel: (615) 223-1777 Case Number: 09-02638 Type of Business: The Debtor offers medical services. See: http://www.empactmedical.com/ Involuntary Petition Date: March 9, 2009 Court: Middle District of Tennessee (Nashville) Petitioner's Counsel: William R. O'Bryan, Jr., Esq. wobryan@millermartin.com Miller & Martin, PLLC 1200 One Nashville PL 150 Fourth Ave N. Nashville, TN 37219 Tel: (615) 244-9270 Fax: (615) 256-8197 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Elizabeth Gail DeBusk money owed $42,759 12320 Hogwood Road Milton, TN 37118 Deborah Hailey money owed $12,659 110 Deer Cv. Oakland, TN 38060 Mike Dennison repairs $22,206 1268 S. Lowry St. Smyrna, TN 37167 EZEQUIEL ALCALA: Section 341(a) Meeting Slated for April 7 ---------------------------------------------------------- The U.S. Trustee for Region 7 will convene a meeting of creditors in Ezequiel Alcala Tapia's Chapter 11 case on April 7, 2009, at 2:00 p.m., at the Federal Building, 33 E. Twohig St., Room 102A, San Angelo, Texas. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Miles, Texas, Ezequiel Alcala Tapia aka Ike Tapia and dba Tapia Dairy and its debtors-affiliates filed for Chapter 11 protection on March 5, 2009, (Bankr. N. D. Tex. Case No.: 09- 60048 to 09-60052) Dana A. Ehrlich, Esq. represents the Debtors in their restructuring efforts. The Debtors listed estimated assets on $1 million to $10 million and estimated debts of $10 million to $50 million. FIRST AMERICANS: Accounts at Five Points Bank Frozen ---------------------------------------------------- Jean Ortiz at The Associated Press reports that First Americans Insurance Service's accounts at Five Points Bank in Grand Island have been frozen. According to The AP, First Americans and its three principals are being investigated for an alleged Ponzi scheme. The AP states that authorities are investigating how First Americans lost more than $100 million. The AP relates that Bob Craig, the attorney for First Americans, said that his client is trying to move the accounts to another bank and resume payments. The AP says that First Americans must file a statement of financial affairs to the U.S. Bankruptcy Court by March 21. That deadline, according to the report, has been pushed back previously. Mr. Craig said that First Nations Compensation Plan has been pulled into the fray, despite its status as a viable insurance company, halting claim payments, The AP states. Mr. Craig, according to the report, said that First Nations is operated out of the same Grand Island offices as First Americans and the same people are involved. Citing Mr. Craig, the report says that First Nations hasn't filed for bankruptcy. "First Nations Compensation Plan is a viable company, and once it straightens out this banking issue will continue to provide the products and make the payments," The AP quoted Mr. Craig as saying. Grand Island, Nebraska-based First Americans Insurance Service, Inc. -- http://www.fais.com/-- operates an insurance company. First Americans filed for Chapter 11 bankruptcy protection on Jan. 12, 2009 (Bankr. D. Neb. Case No. 09-40067). Robert F. Craig, Esq., at Robert F. Craig, P.C., assists the company in its restructuring effort. The company listed $1 million to $10 million in assets and $100 million to $500 million in liabilities. FIRST DATA: S&P Downgrades Corporate Credit Rating to 'B' --------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its corporate credit rating on Greenwood Village, Colorado-based First Data Corp. to 'B' from 'B+'. The outlook is stable. "Although S&P believes First Data's strong business profile and stable historical operating performance can support higher-than- typical leverage for the rating, the prior rating had incorporated S&P's expectation that EBITDA growth would drive leverage below 9x for fiscal 2009," said Standard & Poor's credit analyst Martha Toll-Reed. The downgrade reflects S&P's expectation that global economic weakness will pressure First Data's revenue and EBITDA levels, and preclude a sustained improvement in First Data's debt protection metrics in the near term. The ratings reflect First Data's highly leveraged capital structure, and modest free cash flow generation following the September 2007 LBO. With annual revenues in excess of $8.5 billion for the 12 months ended Sept. 30, 2008, First Data retains what S&P believes is a leading presence in credit card and merchant processing services, supported by high barriers to entry, significant recurring revenues, and a broad customer base. First Data reported revenues of $2.2 billion in the quarter ended Sept. 30, 2008, up about 4% from the prior year. Weakness in First Data's financial services segment was offset by continued strength in merchant services and good international growth. Adjusted EBITDA margins remained strong in the high 20% range. The company's debt to EBITDA ratio (adjusted for operating leases and including holding company pay-in-kind notes) -- 9.5x as of September 2008 -- remains very high for the rating. EBITDA interest coverage is less than 1.5x, and cash flow from operations to total debt is in the low single digits. Given the deterioration in the economic environment since September 2008, S&P expects that pressure on the company's revenues and operating performance could result in moderate deterioration in credit metrics during 2009, rather than further improvement. FLEETWOOD ENTERPRISES: Files for Chapter 11, Closes Travel Trailer ------------------------------------------------------------------ Fleetwood Enterprises, Inc., filed voluntary Chapter 11 petitions for itself and certain operating subsidiaries in the U.S. Bankruptcy Court for the Central District of California in Riverside. The filings do not include any of the company's foreign or non-operating entities. Fleetwood's motor home and manufactured housing businesses will continue to operate while the company seeks buyers for these business units. While Fleetwood believes it has sufficient cash to operate its businesses in the immediate term, the company is also in advanced discussions with its senior secured lenders for new, debtor-in-possession financing to supplement existing working capital. As of Jan. 25, 2009, the company had bank cash of approximately $23.0 million, excluding cash remaining in non-filing entities, principally its captive insurance subsidiary. Filing at this time preserves Fleetwood's right to revisit its Dec. 12, 2008 Exchange Offer, in which the company issued its 14% senior secured notes. Under Chapter 11, the company has a 90-day period from the Offer's effective date in which to revisit the terms; that period will expire shortly. Terms of the senior notes effectively restricted the company from seeking investment in its businesses in view of subsequent deterioration in the market. The filing also facilitates the closing of Fleetwood's travel trailer division, which the company has commenced. This division accounted for losses of $65.3 million in 2007 and $16.8 million in 2008. The division closing affects three manufacturing facilities and two service facilities employing approximately 675 people. The company is also laying off an additional 65 corporate associates. "Although we made substantial progress in restructuring this division and improved the product offering, current market conditions proved too severe to continue the turnaround," stated Elden L. Smith, Fleetwood's president and chief executive officer. "We appreciate the past support of the travel trailer dealers and our associates." The bankruptcy filing follow three years of restructuring that management undertook in the face of worsening market conditions and, more recently, unprecedented credit restrictions affecting both dealers and customers. Management's actions included selling two non-core businesses, restructuring and decentralizing operations, reducing headcount company-wide by more than 70%, and adding new distribution points and a modular division. Despite these efforts, however, management determined that a Court reorganization would offer the best means of addressing the company's existing debt structure and ongoing losses in travel trailers, which cannot be supported in the current economy. "We will use the Chapter 11 process to more rapidly restructure our overhead, pursue potential buyers, and definitively resolve our debt issues," Mr. Smith said. "Fleetwood is one of the most widely recognized names in our industries, with strong market share, an extensive dealer network and enthusiastic customer support. As important as these assets are, we must take additional steps in response to today's deepening economic challenges. "We appreciate the support of our loyal dealers and customers. We want to assure them that we intend to continue doing business in motor homes and manufactured housing while we complete the processes before us. We will work with our dealers to support the continued sales of Fleetwood motor homes and manufactured homes." Mr. Smith went on to say that "The RV industry has sound long-term prospects, as RVers remain faithful to the lifestyle, and we anticipate a strong rebound when the financing environment stabilizes and consumer confidence improves. In our manufactured housing business, we see growth opportunities that arise from positive demographic trends, the growing need for affordable housing in this country, and commercial modular applications, particularly for the military which represents an important segment of our market. We will be able to compete more effectively now that financing advantages of site-built homes over manufactured homes have narrowed. We are taking steps to ensure our businesses will be ready when the current markets turn up again." Fleetwood has filed first-day motions that ask the Court to approve, among other things, payment of employee wage and benefit charges that were incurred before the petition was filed, and the continuation of certain sales incentive programs, warranty service, cash collateral, and cash management systems. The company is working with its largest national lender, Bank of America, to continue to provide competitive RV dealer and consumer financing during the reorganization period. "The vast majority of our suppliers and dealers should see no disruption in our business," Mr. Smith emphasized. "We will continue to support our current and future product development and manufacturing." The company's consolidated balance sheet as of Oct. 26. 2008, showed assets of $558.3 million and liabilities of $518.0 million. For the last fiscal year, the company showed annual revenues of approximately $1.7 billion. At the time of the filing, there were no defaults and no outstanding borrowings on the company's secured credit facility other than $61.7 million of undrawn letters of credit to support the company's performance of certain contracts and obligations. In addition, the company had structured debt consisting of $81.4 million in aggregate principal amount of the 14% senior secured notes and $151.3 million of 6% trust preferred securities, respectively. The company expects to incorporate the impact of the filing on its fiscal third quarter results and file its Form 10Q as soon as it is completed. Fleetwood is being advised by its legal counsel, Gibson Dunn & Crutcher LLP; its investment banker, Greenhill & Co., LLC; and its financial advisor, FTI Consulting, Inc. Founded in 1950, Fleetwood Enterprises, Inc. (FLTW) -- http://www.fleetwood.com/-- and its various subsidiaries produce, distribute, and service recreational vehicles and manufactured housing. Fleetwood continues to employ more than 3,000 people in 15 plants located in 10 states. Fleetwood's products are primarily marketed through extensive independent dealer networks throughout the United States and Canada. The company is headquartered in Riverside, Calif. FLEETWOOD ENTERPRISES: Case Summary & 20 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Fleetwood Enterprises, Inc. 3125 Myers Street Riverside, CA 92513 Tel: (951) 351-3500 Bankruptcy Case No.: 09-14254 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Fleetwood Holdings Inc. 09-14255 Continental Lumber Products, Inc. 09-14262 Fleetwood General Partner of Texas, Inc. 09-14268 Fleetwod Home Centers of Nevada 09-14272 Fleetwood Home Centers of Texas, Inc. 09-14277 Fleetwood Homes Investment, Inc. 09-14282 Fleetwood Homes of Arizona, Inc. 09-14293 Fleetwood Homes of California, Inc. 09-14314 Fleetwood Homes of Florida, Inc. 09-14319 Fleetwood Homes of Georgia, Inc. 09-14321 Fleetwood Homes of Idaho, Inc. 09-14322 Kings Holdings 09-14323 Fleetwood Homes of Indiana, Inc. 09-14325 Fleetwood Homes of Kentucky, Inc. 09-14327 Fleetwood Homes of Mississippi, Inc. 09-14330 Fleetwood Homes of North Carolina, Inc. 09-14334 Fleetwood Homes of Oregon, Inc. 09-14337 Fleetwood Homes of Pennsylvania, Inc. 09-14346 Type of Business: The Debtors produce recreational vehicles and manufactured homes. The Debtors have about 9,000 associates working in facilities strategically located throughout the nation. See: http://www.fleetwood.com Chapter 11 Petition Date: March 10, 2009 Court: Central District Of California (Riverside) Judge: Sheri Bluebond Debtor's Counsel: Craig Millet, Esq. cmillet@gibsondunn.com Gibson, Dunn & Crutcher LLP 4 Park Plaza #1400 Irvine, CA 92614 Tel: (949) 451-3986 Fax: (949) 475-4651 Auditor: Ernst & Young LLP Consultant FTI Consulting Inc. Financial Advisor: Greenhill & Co. LLC Estimated Assets: $500 million to $1 billion Estimated Debts: $500 million to $1 billion The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bank of America Letters of Credit $62,191,000 Attn: Todd Eggertsen 55 S. Lake Avenue, Suite 900 Pasadena CA, 91101 Tel: (626) 584-4520 Caspian Capital Management 6% Convertible $32,425,550 LCC Trust Preferred Attn: Benoit Jacquin Securities 745 Fifth Avenue 28th Floor New York, NY 10151 Tel: (212) 692-2052 Fax: (212) 867-9328 Angelo, Gordon & Co., LP 6% Convertible $20,000,000 Attn: Todd Arden Trust Preferred 245 Park Avenue Securities 28th Floor New York, NY 10167 Tel: (775) 832-6250 Fax: (773) 832-6266 Zazove Associates, LLC 6% Convertible $12,970,200 Attn: Gene T. Pretti Trust Preferred 1001 Tahoe Boulevard Securities Incline Village, NV 89451 Riva Ridge Capital Management 6% Convertible $9,000,000 55 5th Avenue Trust Preferred New York, NY 10003 Securities Tel: (212) 206-0144 Goldman Sachs & Company, Inc. 6% Convertible $8,268,900 Attn: Michelle Breyer Trust Preferred One New York Plaza Securities New York, NY 10004 Tel: (212) 357-5501 Fax: (212)357-1100 Ctfs - Citrus Park LLC Operating Leases $6,608,718 Attn: Linda Weber 18012 Sky Park Circle Suite 200 Irvine, CA 92614-6429 Tel: (949) 798-8100 Fax: (949) 798-5904 Gabriel Capital, LP 6% Convertible $5,250,000 Attn: Michael Autera Trust Preferred 450 Park Avenue Securities 32nd Floor New York, NY 10022 Tel: (212) 838-7200 Fax: (212) 838-9603 Morgan Stanley & Co 6% Convertible $5,250,000 Attn: James Kemeny Trust Preferred 1585 Broadway Securities New York, NY 10036 Tel: (212) 761-1536 Fax: (212) 761-0086 UMB Investment Advisors 6% Convertible $4,898,000 Attn: Gregory Jerzyk Trust Preferred 1010 Grand Boulevard Securities Kansas City, MO 64106 Tel: (816) 860-7000 Fax: (816) 860-4642 Pershing Inc 6% Convertible $4,882,250 Attn: Deniss Wallestad Trust Preferred One Pershing Plaza Securities Jersey City, NJ 07399 Tel: (201) 413-2000 Fax: (201) 413-0934 Mellon Bank 6% Convertible $4,500,000 500 Grant Street Trust Preferred Pittsburgh, PA 15219 Securities Tel: (412) 234-5000 Fax: (412) 234-4025 Oppenheimer & Co. Inc. 6% Convertible $3,504,050 125 Broad Street Trust Preferred 14th Floor Securities New York, NY 10004 Tel: (212) 668-8000 Fax: (212) 943-8278 Oaktree Capital Management LLC 6% Convertible $3,500,000 Attn: George Leiva Trust Preferred 333 South Grand Avenue Securities 28th Floor Los Angeles, CA 90071 Tel: (213) 830-6433 Fax: (213) 830-6393 Royce & Associates LLC 6% Convertible $3,500,000 Attn: Charles Royce Trust Preferred 1414 Avenue of Americas Securities New York, NY 10019 Tel: (212) 486-1445 Fax: (212) 752-8875 Raven Investment Company 6% Convertible $2,625,000 Limited Trust Preferred 21 Dai Fu Street Tai Securities Po Industrial Estate New Territories Honk Kong Jefferies & Company, Inc. 6% Convertible $2,565,000 Attn: Robert Schenosky Trust Preferred 520 Madison Avenue Securities 12th Floor New York, NY 10022 Tel: (212) 284-2120 Fax: (212) 284-2111 Parque Industrial El Dorado Guarantee $2,500,000 S.A.De C.V. Attn: Jose Luis Faus Sotelo 10.5 de la Carretera a San Luis Rio Colorado Mexacali Baja California Mexico Tel: (760) 690-1328 Fax: 011-686-842-71-42 Loeb Partners Corp 6% Convertible $2,500,000 Attn: Frederick Fruitman Trust Preferred 61 Broadway 2400 Securities New York, NY 10006 Tel: (212) 483-7060 Fax: (212) 425-7090 GAMCO Investors, Inc. 6% Convertible $1,932,500 Attn: William Selby Trust Preferred One Corporate Center 401 Securities Theodore Fremd Avenue Rye, NY 10580 Tel: (914) 921-5010 Fax: (914) 921-5392 The petition was signed by Andrew M. Griffiths, senior vice president and chief financial officer. FLYING J: Has $10 Million Loan for Pipeline Operations ------------------------------------------------------ Flying J Inc. received from the U.S. Bankruptcy Court for the District of Delaware final approval of a $10 million revolving credit financing from Merrill Lynch Commodities Inc. According to Bloomberg's Bill Rochelle, Flying J will use the proceeds to buy product enabling its pipeline subsidiary to operate. The Debtor is seeking out a buyer for the Longhorn pipeline running 700 miles from Houston to El Paso, Texas. Flying J acquired the pipeline in August 2006. Another Bloomberg report said that Flying J won permission to use cash, reserved as collateral for lenders, to help sell the pipeline. Bloomberg's Steven Church said that Judge Mary Walrath approved the request after lenders who helped finance the pipeline withdrew their objections, saying they hoped a quick sale would make their concerns moot, Bloomberg reported. The Bloomberg report added that the company wants a partner or a buyer for its non-operating refinery in Bakersfield, California, owned by affiliate Big West Oil LLC. About Flying J Headquartered in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com-- operate an oil company with operations in the field of exploration and refining of petroleum products. The Debtors engage in online banking, card processing, truck and trailer leasing, and payroll services. The Debtors also operate about 200 travel plazas in 41 states and six Canadian provinces. The company and six of its affiliates filed for Chapter 11 protection on Dec. 22, 2008 (Bankr. D. Del. Lead Case No. 08-13384). Kirkland & Ellis LLP represents the Debtors' in their restructuring efforts and Young, Conaway, Stargatt & Taylor LLP as their Delaware Counsel. The Debtors proposed The Blackstone Group LP as financial advisor and Epiq Bankruptcy Solutions LLC as claims agent. When the Debtors filed for protection from its creditors, they listed assets more than $1 billion and debts between $100 million to $500 million. FOAMEX INT'L: Creditors Committee Wants Documents Produced ---------------------------------------------------------- The Official Committee of Unsecured Creditors of Foamex International, Inc., et. al, asks the U.S. Bankruptcy Court for the District of Delaware to authorize the examination of the Debtors and to order the Debtor to produce certain documents and information, pursuant to Bankruptcy Rule 2004 and Local Rule 2004- I. The Committee says that the Debtors have failed to respond to its requests for the production of information and documents which it needs to facilitate its review and evaluation and reasonableness of the relief sought through the Debtors' "first day" motions filed in the Chapter 11 cases. The Committee tells the Court that it was compelled to file this discovery request due to the March 16th final hearing date on the aforementioned first day motions and the Committee's March 11, 2009 objection deadline. A full-text copy of the list of documents being requested from Debtor is available at: http://bankrupt.com/misc/FoamexInt'l.DocumentRequests.pdf About Foamex International Foamex International Inc. (FMXL) -- http://www.foamex.com/-- headquartered in Media, PA, produces polyurethane foam-based solutions and specialty comfort products. The company services the bedding, furniture, carpet cushion and automotive markets and also manufactures high-performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The company and eight affiliates first filed for chapter 11 protection on September 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). On February 2, 2007, the U.S. Bankruptcy Court for the District of Delaware confirmed the Debtors' Second Amended Joint Plan of Reorganization. The Plan became effective and the company emerged from chapter 11 bankruptcy on February 12, 2007. Foamex missed $7.3 million in interest payments due at the end of the Jan. 21 grace periods on the Company's $325 million first-lien term loan and the $47 million second-lien term loan. On February 18, 2009, Foamex International Inc. and seven affiliates filed separate voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 09-10560). The Hon. Kevin J. Carey presides over the cases. Ira S. Dizengoff, Esq., Phillip M. Abelson, Esq., and Brian D. Geldert, Esq., at Akin Gump Strauss Hauer in New York; and Mark E. Felger, Esq., and Jeffrey R. Waxman, Esq., at Cozen O'Connor, in Wilmington, Delaware, serve as bankruptcy counsel. Investment Banker is Houlihan Lokey; accountant is McGladrey & Pullen LLP, and claims and noticing agent is Epiq Bankruptcy Solutions LLC. As of September 28, 2008, the Debtors had $363,821,000 in total assets, and $379,710,000 in total debts. FOAMEX INT'L: Section 341 Meeting Scheduled for April 2, 2009 ------------------------------------------------------------- The first meeting of creditors in Foamex International Inc. and its debtor-affiliates' bankruptcy cases will be held on April 2, 2009, at 2:00 p.m. (ET), at the 2nd Floor, Room 2112, J. Caleb Boggs Federal Building, 844 North King Street, in Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtors under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. About Foamex International Foamex International Inc. (FMXL) -- http://www.foamex.com/-- headquartered in Media, PA, produces polyurethane foam-based solutions and specialty comfort products. The company services the bedding, furniture, carpet cushion and automotive markets and also manufactures high-performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The company and eight affiliates first filed for chapter 11 protection on September 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). On February 2, 2007, the U.S. Bankruptcy Court for the District of Delaware confirmed the Debtors' Second Amended Joint Plan of Reorganization. The Plan became effective and the company emerged from chapter 11 bankruptcy on February 12, 2007. Foamex missed $7.3 million in interest payments due at the end of the Jan. 21 grace periods on the Company's $325 million first-lien term loan and the $47 million second-lien term loan. On February 18, 2009, Foamex International Inc. and seven affiliates filed separate voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 09-10560). The Hon. Kevin J. Carey presides over the cases. Ira S. Dizengoff, Esq., Phillip M. Abelson, Esq., and Brian D. Geldert, Esq., at Akin Gump Strauss Hauer in New York; and Mark E. Felger, Esq., and Jeffrey R. Waxman, Esq., at Cozen O'Connor, in Wilmington, Delaware, serve as bankruptcy counsel. Investment Banker is Houlihan Lokey; accountant is McGladrey & Pullen LLP, and claims and noticing agent is Epiq Bankruptcy Solutions LLC. As of September 28, 2008, the Debtors had $363,821,000 in total assets, and $379,710,000 in total debts. FRIEDMAN'S INC: Solicits Unsecured Creditors' Votes for Plan ------------------------------------------------------------ Friedman's Inc. and Crescent Jewelers took the next step toward concluding their successful liquidations on Tuesday when they began soliciting the votes of more than 7,000 unsecured creditors in support of their joint chapter 11 plan of liquidation. In addition, large ads were published Tuesday in USA Today and Women's Wear Daily notifying creditors of their projected recoveries and the upcoming confirmation hearing on the joint plan. The disclosure statement that accompanies the joint plan estimates a distribution of 31.6% to Friedman's unsecured creditors and 22.6% to Crescent's, with likely initial distributions in May of this year of 22.6% and 22.3%. Significant distributions to creditors were not always anticipated. When the debtors' auction process broke down in April 2008, less than three months after these cases had been commenced, administrative insolvency, which would have left nothing for creditors, seemed inevitable. But Friedman's and Crescent abandoned the auction process and liquidated themselves at the urging of the Creditors' Committee, and their choice has been vindicated. The disclosure statement filed in December 2008 projected recoveries to unsecured creditors of 29.5% and 21.5%, respectively, and even those projected recoveries have grown recently as the results of ongoing asset recoveries and claims objections exceed expectations. Lee E. Buchwald, President of Buchwald Capital Advisors LLC and the Debtors' CEO, President, and sole Director, attributes the unanticipated significant recoveries to several factors, including the efforts of Moses & Singer, counsel to the Creditors' Committee, in negotiating a global settlement with Harbinger, the Debtors' private equity sponsor; the recommendation of Consensus Advisors, financial advisor to the Creditors' Committee, to have a self liquidation instead of selling the assets to a liquidator when the auction broke down; the successful liquidation of assets under the supervision of Mr. Buchwald, Steve Moore, the Debtors' then-CRO, and a dedicated management team; and the efforts of Stevens & Lee, Debtors' counsel brought in by Mr. Buchwald, who were instrumental in guiding the Debtors during the critical phases of the asset disposition and plan negotiation process. According to Mr. Buchwald, the timetable for plan confirmation provides an April 7 deadline for unsecured creditors to vote on the joint plan, with a confirmation hearing to be held in the United States Bankruptcy Court for the District of Delaware on April 20. The plan trusts which will be established under the joint plan to administer the remaining assets and make distributions to creditors will be established in early May with Mr. Buchwald as plan trustee, and unsecured creditors can expect to receive their initial distributions by mid-May. About Friedman's Inc. Addison, Texas-based Friedman's Inc. -- http://www.friedmans.com/ -- and -- http://www.crescentonline.com/-- prior to the filing of their bankruptcy cases, comprised a leading specialty jewelry retail company. On Jan. 14, 2005, Friedman's and eight of its affiliates filed for Chapter 11 in the United States Bankruptcy Court for the Southern District of Georgia, Case No. 05-40129. On Nov. 23, 2005, the Court confirmed the Debtors' Amended Plan and that Plan became effective on Dec. 9, 2005. Crescent Jewelers, the largest jewelry retailer on the West Coast, filed for Chapter 11 protection on Aug. 12, 2004 (Bankr. N.D. Calif. Case No. 04-44416). On July 13, 2006, the California Bankruptcy Court confirmed Crescent Jewelers' Second Amended Plan of Reorganization. On July 28, 2006, Friedman's acquired Crescent's equity in Crescent's own chapter 11 bankruptcy case in California. Crescent became a wholly owned subsidiary of Friedman's. On Jan. 22, 2008, five parties declaring claims aggregating $9,081,199, filed an involuntary Chapter 7 petition against Friedman's. The petitioners were Rosy Blue, Inc.; Rosy Blue Jewelry Inc.; Jay Gems, Inc., dba Jewelmark; Simply Diamonds Inc.; and Paul Winston-Eurostar LLC. As of commencement of these cases, Friedman's operated 388 stores in 20 states with over 2,890 employees while Crescent Jewelers operated 85 stores in 3 states with over 600 employees. Friedman's and Crescent Jewelers filed for chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case Nos. 08-10161 and 08-10179). The Debtors were originally represented by Athanasios E. Agelakopoulos, Esq., and Paul M. Rosenblatt, Esq., at Kilpatrick Stockton LLP; Chun I. Jang, Esq., Jason M. Madron, Esq., Mark D. Collins, Esq., and Michael Joseph Merchant, Esq., at Richards, Layton & Finger, P.A. On June 2, 2008, the Court entered orders allowing Kilpatrick Stockton LLP and Richards, Layton & Finger, P.A. to withdraw as bankruptcy counsel to the Debtors, and the Court subsequently authorized the Debtors to retain Stevens & Lee, P.C. as general bankruptcy counsel. David M. Green, Esq., Jocelyn Keynes, Esq., and Nicholas F. Kajon, Esq., at Stevens & Lee, P.C., in New York; and John D. Demmy, Esq., at Stevens & Lee, P.C., in Wilmington, Delaware, serve as counsel to the Debtors. The Debtors' professionals also include Rothschild, Inc. as investment banker and financial advisor; Retail Consulting Services, Inc. as real estate and lease consultants; ASK Financial as special counsel to review, analyze, and prosecute preference claims; Grant Thornton LLP as Tax Advisors; and KZC Services, LLC's Salvatore LoBiondo, Jr. as Chief Restructuring Officer, and Charles Carnaval as Director of Restructuring. The Official Committee of Unsecured Creditors appointed in the Debtors' cases is represented by Christopher J. Caruso, Esq., Alan Kolod, Esq., Lawrence L. Ginsburg, Esq., at Moses & Singer LLP in New York; and Charlene D. Davis, Esq., at Bayard, P.A., in Wilmington, Delaware. The Committee also retained Consensus Advisors as its financial advisors. On April 10, 2008, the Court approved the sale to Whitehall Jewelers, Inc., and a joint venture led by Great American Group LLC to sell to Whitehall the inventory and related property at 78 of the Debtors' stores, and to assume and assign to Whitehall the leases with respect to those 78 stores. On June 30, 2008, the liquidation of the balance of the Debtors' assets through store closing sales were concluded. As of Dec. 28, 2007, the Debtors listed total assets of $245,787,000 and total liabilities of $171,877,000. FRONTIER AIRLINES: Dallas Airport, et al., Defend Claims -------------------------------------------------------- Various parties that filed claims in the bankruptcy cases of Frontier Airlines, Inc., and its affiliates challenge the Debtors' objection to their claims. Dallas Fort Worth International Airport Board, the operator of the international airport located in the Dallas/FortWorth area of Texas, filed a claim in November 2008 for $339,479 against Frontier Airlines, Inc. Sabre, Inc., filed its claim for $695,174 in October 2008. To the extent the Debtors asserted the reassignment of DFWIAB's and Sabre's Claims to the Debtors' Case No. 08-11297, the Claimants do not oppose the Debtors' Objection. They, however, object to any alteration in the amount or nature of their Claims. To address the Debtors' contention that their claims lack sufficient documentation, Servisair USA Inc., formerly known as Penauille USA Servisair, Inc., and Jett Care ATL, LLC, provided the Court with specific invoice numbers and additional details relating to their claims. Servisair's Claim No. 1135 totaling $1,480,688 -- comprised of (i) $126,917 as a priority claim and (ii) $1,353,771 as an unsecured claim -- arose from costs relating to the de-icing of Frontier's aircraft at Denver International Airport, ground handling at Dallas-Fort Worth International Airport and Houston International Airport, and related service fees. Jett Care also reflected in its response the corrected amounts with respect to these Claims, on account of on-call maintenance checks and service checks: Claim No. Claim Amount --------- ------------ 207 $23,482 625 22,507 Best Western Ramkota Hotel in Rapid City, South Dakota, contends that its claim against the Debtors for $17,282 is valid. The Claim accounts for a contract with Frontier's subsidiary Lynx Aviation, in relation to a four-room accommodation for their flight crews for 12 months. Sun Microsystems, Inc. notified the Court and parties-in-interest that it has withdrawn with prejudice, its Claim No. 318 for $28,358. The Debtors disputed Claim No. 318 because it has been amended and superseded by a later-filed claim. About Frontier Airlines Inc. Headquartered in Denver, Colorado, Frontier Airlines Inc. -- http://www.frontierairlines.com/-- provides air transportation for passengers and freight. It operates jet service carriers linking Denver, Colorado hub to 46 cities coast-to-coast, 8 cities in Mexico, and 1 city in Canada, as well as provide service from other non-hub cities, including service from 10 non-hub cities to Mexico. Frontier Airlines and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008, (Bankr. S.D. N.Y. Case No. 08-11297 thru 08-11299.) Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Frontier Airlines Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FRONTIER AIRLINES: Rejects Deals With Sprint Solutions & Qwest -------------------------------------------------------------- Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York authorized Frontier Airlines Holdings, Inc., and its debtor-affiliates to reject their Custom Service Agreement, as amended, with Sprint Solutions, Inc., as of February 20, 2009. To the extent provided in Section 362 of the Bankruptcy Code and without further order of the Court, all counterparties to the Rejected Agreement are prohibited from setting off or otherwise utilizing any amounts deposited by the Debtors with the counterparty as a security deposit or pursuant to another similar arrangement. The Debtors have also filed a certificate of no objection to their Rejection Notice. Meanwhile, pursuant to the Debtors' Court-approved procedures for the rejection of executory contracts and unexpired leases, the Debtors notified parties-in-interest that they are rejecting their Qwest CPE Master Agreement, as amended, with Qwest Interprise America, Inc., as of March 6, 2009. Objections to the Rejection Notice, if any, must be filed by March 16, 2009. Absent any objections, the Agreement will be deemed rejected pursuant to Section 365(a) of the Bankruptcy Code. About Frontier Airlines Inc. Headquartered in Denver, Colorado, Frontier Airlines Inc. -- http://www.frontierairlines.com/-- provides air transportation for passengers and freight. It operates jet service carriers linking Denver, Colorado hub to 46 cities coast-to-coast, 8 cities in Mexico, and 1 city in Canada, as well as provide service from other non-hub cities, including service from 10 non-hub cities to Mexico. Frontier Airlines and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008, (Bankr. S.D. N.Y. Case No. 08-11297 thru 08-11299.) Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Frontier Airlines Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FRONTIER AIRLINES: Salient Terms of $40MM Republic Airways Loan --------------------------------------------------------------- Frontier Airlines Holdings, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to authorize them to enter into, and perform under: (1) an Amended and Restated DIP Credit Facility among the Debtors as borrowers, and Republic Airways Holdings, Inc., as DIP lender; and (2) a settlement agreement, as contained in the Term Sheet among the Debtors, Republic Airways and Republic Airlines, which provides for the allowance of two unsecured claims by Republic Airlines, each in the amount of $150,000,000. As reported by the Troubled Company Reporter, Frontier Airlines received on March 4, 2009, a firm commitment for $40,000,000 in postpetition debtor-in-possession financing from Republic Airways, an airline holding company based in Indianapolis, Indiana. The Court permitted the Debtors in September 2008, to obtain a secured superpriority DIP credit financing of up to $75,000,000 on a final basis, from a lender group of three major creditors, consisting of Republic Airways, Credit Suisse Securities (USA) LLC, and AQR Capital, LLC, with Wells Fargo Bank Northwest, National Association, as the administrative and collateral agent for the Lenders. Frontier has received a total of $30 million in DIP funding from Republic, as well as Credit Suisse Securities and AQR Capital, in August 2008. "Republic Airways has offered to step into the shoes of the Lender Group and provide continued DIP financing through December 1, 2009, on improved terms as compared to the Existing DIP Credit Facility, including an additional $10 million commitment, lower interest rates and a lower fee," Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York, said. "Since filing for Chapter 11 protection, we have lowered our unit costs, right-sized the operation to adjust for a challenging economic climate, improved our unit revenue performance and customer product satisfaction with the introduction of AirFairs and maintained sufficient liquidity to execute upon our business plan," Sean Menke, Frontier President and Chief Executive Officer, said in a Company statement. "This financing commitment is a tremendous vote of confidence in the Company's plan and validates our employees' significant efforts during the restructuring. This new DIP facility refinances the existing DIP loan that matures in April 2009, increases the available financing compared to the expiring DIP loan and preserves our financial stability as we seek a plan sponsor to emerge from bankruptcy later this year," Mr. Menke added. Republic President and Chief Executive Officer Bryan Bedford commended the employees and management team at Frontier "for their comprehensive efforts to restructure their airline amid very difficult economic circumstances." "We believe Frontier is on the right path to emerge from bankruptcy this summer as a very efficient, low-cost airline," Mr. Bedford said. Terms of the New DIP Facility According to Mr. Huebner, the terms of the Amended and Restated DIP Credit Facility are more favorable to the Debtors than were the terms of the Existing DIP Credit Facility. Moreover, the Existing DIP Credit Facility matures on April 1, 2009, making its replacement imminent and necessary. Certain of the principal differences between the New and Existing DIP Credit Facilities include: Existing DIP Amended and Restated Term Credit Facility DIP Credit Facility ---- --------------- -------------------- DIP Lender(s) Republic Airways Republic Airways Holdings, Inc.; Holdings, Inc. Credit Suisse, Cayman Islands Branch; AQR Capital, LLC; CNH Partners, LLC; CNH Diversified Opportunities Master Account, L.P.; and their permitted assigns Outside April 1, 2009 December 1, 2009 Maturity Date Loan Amount $30,000,000 $40,000,000 Minimum $15,000,000 $20,000,000 Unrestricted Cash on Hand Interest Rate Either (1) 14.00% is Either (i) 13.00% paid in cash, or (ii) if paid in cash, or 16.00% if paid in kind (ii) 15.00% if paid in kind Negative Covenants N/A Permits the Disposition of up to Four A318 aircraft and retention of up to $1.2 million of proceeds Permits the Borrowers to enter into operating leases for up to four additional A320 aircraft. Permits the Borrowers to acquire up to three Q400 aircraft. Permits the sale or leaseback of Q400 engines, subject to applying 50% of the net cash proceeds to prepay outstanding Loans. Prepayment Fee 1% 0% Commitment Fee $1,500,000 $1,000,000 Carve-Out $18,000,000 $13,000,000 Mandatory 50% of the net cash 75% of the net cash Prepayment proceeds of the sale proceeds of the sale of aircraft, spare of aircraft, spare parts and certain other parts and certain assets required to be other assets applied to prepay the required to be loans applied to prepay the loans Conditions N/A Payment of the Commitment Fee. Payment of PIK interest accrued through closing date. Payment of fees and expenses, capped at $125,000. Mr. Huebner maintained that the liquidity provided under the Amended and Restated DIP Credit Facility will enable the Debtors to pay their employees, vendors and suppliers and operate their businesses. Moreover, the availability of credit under the Amended and Restated DIP Credit Facility will provide customers, vendors, suppliers and other parties with confidence in the Debtors that will enable and encourage them to continue and resume ongoing relationships with the Debtors. Accordingly, the implementation of the Amended and Restated DIP Credit Facility will preserve and enhance the value of the Debtors' assets and enterprise for the benefit of all parties-in- interest. It will also be viewed favorably by the Debtors' employees and outside parties and thereby help promote the Debtors' successful reorganization, Mr. Huebner contended. Mr. Huebner noted that the costs associated with the Amended and Restated DIP Credit Facility are appropriate and consistent with market rates, including the Commitment Fee of $1,000,000 and a commitment to reimburse Republic Airways' fees and expenses in an amount not to exceed $125,000. The Amended and Restated DIP Credit Facility has been extended in express reliance upon the protections offered by, and should be entitled to the full protection of Section 364(e) of the Bankruptcy Code, he added. Republic Airlines Claims Settlement In May 2008, Republic Airlines filed Claim Nos. 1373 and 1374 against the Debtors, each asserting $215,137,197, pursuant to the Debtors' rejection of Airline Services Agreement 2007 with Republic Airlines and Republic Airways as of June 22, 2008. As a condition precedent to Republic Airways' agreement to provide Frontier with needed DIP financing, the Debtors seek to settle Republic Airlines' Claims. Specifically, the Debtors, Republic Airways and Republic Airlines ask the Court to approve these terms under the Claims Settlement, in accordance with Section 502(b) of the Bankruptcy Code: (a) Republic Airlines will have allowed prepetition, general, non-priority unsecured claims against the Debtors each in the amount of $150,000,000, provided that Republic Airlines agrees that its damages equal $150,000,000 in the aggregate and will not be entitled to recover more than $150,000,000 of value on account of the Allowed Claims. (b) The Debtors will waive and release any and all their counterclaims or defenses against Republic Airlines; and (c) Republic Airlines and Republic Airways have agreed that except for the Allowed Claims, Republic Airlines and its affiliates will not have any claim or cause of action against the Debtors, arising out of or relating to the Airline Services Agreement or any related agreement. Mr. Huebner informed Judge Drain that the terms of the Amended and Restated DIP Facility have gained the approval of the Statutory Committee of Unsecured Creditors, which actively and constructively participated in negotiations with Republic Airways. A full-text copy of the Term Sheet governing the Amended and Restated DIP Financing is available for at no charge at: http://bankrupt.com/misc/FrontierDIP_TermSheet.pdf Objections to the Debtors' request, if any, must be filed by March 20, 2009. The Court will convene a hearing on March 20 to consider approval of the DIP Motion. About Frontier Airlines Inc. Headquartered in Denver, Colorado, Frontier Airlines Inc. -- http://www.frontierairlines.com/-- provides air transportation for passengers and freight. It operates jet service carriers linking Denver, Colorado hub to 46 cities coast-to-coast, 8 cities in Mexico, and 1 city in Canada, as well as provide service from other non-hub cities, including service from 10 non-hub cities to Mexico. Frontier Airlines and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008, (Bankr. S.D. N.Y. Case No. 08-11297 thru 08-11299.) Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Frontier Airlines Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FULL HOUSE: Case Summary & Seven Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Full House Enterprises LP 1954 Placentia Ave., Ste. 109 Costa Mesa, CA 92627 Bankruptcy Case No.: 09-11952 Type of Business: The Debtor offers miscellaneous personal services. Chapter 11 Petition Date: March 9, 2009 Court: Central District Of California (Santa Ana) Judge: Robert N. Kwan Debtor's Counsel: Anne Wells, Esq. wellsanne@earthlink.net Futter-Wells PC 2463 Ashland Avenue Santa Monica, CA 90405 Tel: (310) 450-6857 Fax: (310) 450-9106 Estimated Assets: $1 million to $100 million Estimated Debts: $1 million to $100 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bank of America trade debt $31,109 PO Box 851001 Dallas, TX 75285 Tel: (800) 626-2558 McKay Roofing trade debt $8,290 PO Box 600221 San Diego, CA 92160 Tel: (619) 258-7888 Manatt Phelps legal services $3,000 695 Town Center 14th floor Costa Mesa, CA 92626 Andersen Air Conditioning trade debt $1,808 Spruce Facilities Management trade debt $1,605 Prestige Property Serv. trade debt $1,497 Lon T. Stephens legal services $1,000 Mark Marrow trade debt $950 Greater San Diego Air trade debt $737 Vortex trade debt $549 Pacific Crest Electric trade debt $356 Rancho Vista Landscaping Inc. trade debt $300 Tri-City Patrol trade debt $330 Easterday Building Maintenance trade debt $287 Ware Disposal trade debt $234 Westcon Elevator trade debt $125 Moonlight Services trade debt $80 The petition was signed by David Arnold, managing member. G.I. JOE'S: Receives Interim Approval to Access DIP Financing ------------------------------------------------------------- G.I. Joe's Holding Corporation and G.I. Joe's Inc. obtained interim approval from the U.S. Bankruptcy Court for the District of Delaware to: a) obtain credit and incur debt from Wells Fargo Retail Finance, LLC up to an aggregate committed amount of $51,210,577, for a period until the date of the further interim hearing, including the partial roll-up of the outstanding balance of the prepetition facility, secured by first priority, valid, priming, perfected and enforceable liens on property of the Debtors' estate, subject only to permitted prior liens, and with priority, over all other administrative expenses; b) establish the financing arrangement, including partial roll-up of the outstanding balance of the prepetition facility with Wells Fargo Retail Finance, LLC, as administrative agent and collateral agent, and the revolving credit lenders and incur DIP obligations; c) use the proceeds of the DIP facility solely for (a) working capital and general corporate purposes; (b) payment of costs of administration of these cases; (c) upon entry of this interim order, all prepetition letters of credit issued under the perpetition financing agreements will be deemed issued under the DIP financing agreement; and (d) payment in full of the prepetition debt in accordance with the terms of this interim order and the DIP financing agreements. WFRF and the Debtors are party to the prepetition revolving loans dated as of Feb 1, 2007. As of the petition date, G.I. Opco was indebted under the prepetition senior financing agreements (a) pursuant to the prepetition revolving loans in the approximate principal amount of $47,269,149, plus letters of credit in the approximate amount of $108,000; and (b) pursuant to the prepetition term loans in the approximate principal amount of $1,210,577; plus interest accrued and accruing, costs, expenses, fees, other legal charges and other obligations, including, without limitation, on account of cash management, credit card, depository, investment, hedging and other banking or financial services. The Debtors believe that the value of their assets on a net orderly liquidation basis exceeds the outstanding balance of the prepetition senior facility, net of any claims secured by, prior liens on the Debtors' assets. Salient terms of the DIP financing agreement are: Borrower: G.I. Joe's Inc. DIP Lender: Wells Fargo Retail Finance, LLC DIP Facility: A senior revolving credit facility in a committed amount up to $51,210,577. Security: Subject to the Carve-Out and permitted prior liens (i) the DIP financing agreement and (ii) all other obligations under or in respect of the DIP financing agreement will be entitled to (a) super priority claims status and (b) will be secured by (i) a first priority perfected security interest in all of the existing and after acquired real and personal, tangible and intangible assets of G.I. Opco, with priority over all other liens except any liens otherwise permitted by the prepetition financing agreements. Carve-Out: (a) allowed administrative expenses, and (b) allowed reasonable fees and expenses of attorneys and financial advisors employed by the Debtors up to an aggregate amount not to exceed the sum of (i) $675,000; (ii) any additional amounts for fees and expenses for case professionals in any supplemental budget for the two week period beyond April 3, 2009, as agreed to be the DIP agent, in an aggregate amount not to exceed $62,500 per week; (iii) any additional amounts as subsequently agreed to be the Debtors, the case professionals and the DIP agent; and (iv) the IB success fee, provided that the fees and expenses are approved by this Court, or the lesser amount as so approved. Interest: A fluctuating rate per annum equal to the Base Rate plus (a) 2.25% for the DIP revolver, and (b) 2.75% of the DIP Term Loan. Default Rate Interest: 2.00% over the applicable Interest Rate Ratification and Amendment Fees: $450,000, full earned and payable to the DIP Lender on the termination date subject to reduction. Maturity: The earlier to occur of: (a) the revolving credit maturity date; or (b) the termination date, which includes, among other things, the closing of a transaction; or (c) the occurrence and continuance of an event of default under DIP financing agreement. The DIP agreement contains customary and appropriate events of default. The DIP agent was granted first priority priming, valid, perfected and enforceable liens, subject only to Carve-Out and the permitted prior liens, upon all of the Debtors' real and personal property except for avoidance actions. The DIP agent was also granted superiority administrative claim status in respect of all DIP obligations, subject to the Carve- Out. A full-text copy of the Debtors' debtor-in-possession credit, guaranty and security agreement dated March 4, 2009, is included as Exhibit A (page 25) of the DIP motion, and is available for free at: http://bankrupt.com/misc/GIJoes_DIP_motion.pdf Cash Collateral The Debtors were also authorized to access the cash collateral of Crystal Capital Fund Management, L.P. and to grant the prepetition agent the perpetition replacement liens and prepetition superiority claims as adequate protection. Also prior to the petition date, Crystal Capital and certain other lenders made certain tranche B term loans pursuant to (a) the loan and security agreement dated as of Feb. 1, 2007, and (b) all other agreements, documents, notes, certificates and instruments executed and delivered with, to, in favor of the Term Loan B lenders. As of the petition date, G.I. Opco was indebted under the prepetition term loan B financing agreements in the approximate amount of $35,266,366; plus interest accrued and accruing, costs, expenses, fees, other charges and other obligations. The prepetition secured parties have a security interest and lien in cash collateral, including on all amounts in deposit in G.I. Opco's banking, checking, or other deposit accounts and all proceeds of prepetition collateral. About G.I. Joe's Holding Corporation Headquartered Wilmington, Delaware, G.I. Joe's Holding Corporation -- http://www.joessports.com-- owns and operates retail stores selling sports apparel, and camping equipment and accessories. G.I Joe has more than 30 locations in Idaho, Oregon, and Washington. The G.I. Joe's Holding Corporation and G.I. Joe's Inc. filed for Chapter 11 protection on March 4, 2009 (Bankr. D. Del. Case Nos.: 09-10713 and 09-10714. Proskauer Rose LLP, represents the Debtors in their restructuring efforts. The Debtors proposed Steven M. Yoder, Esq., at Potter Anderson & Corroon LLP, as their Delaware counsel and Patrick J. O'Malley, at Development Specialist Inc., chief restructuring officer. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million. G.I. JOE'S: Acting U.S. Trustee Sets 341(a) Meeting for April 16 ---------------------------------------------------------------- Roberta DeAngelis, Acting U.S. Trustee of Region 3, will convene a meeting of creditors in G.I. Joe's Holding Corporation and its debtor-affiliates' Chapter 11 cases on April 16, 2009, at 10:00 a.m., at J. Caleb Boggs Federal Building, 2nd Floor, Room 2112, Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered Wilmington, Delaware, G.I. Joe's Holding Corporation -- http://www.joessports.com-- owns and operates retail stores selling sports apparel, and camping equipment and accessories. G.I Joe has more than 30 locations in Idaho, Oregon, and Washington. The G.I. Joe's Holding Corporation and G.I. Joe's Inc. filed for Chapter 11 protection on March 4, 2009 (Bankr. D. Del. Case Nos.: 09-10713 and 09-10714. Proskauer Rose LLP, represents the Debtors in their restructuring efforts. The Debtors proposed Steven M. Yoder, Esq., at Potter Anderson & Corroon LLP, as their Delaware counsel and Patrick J. O'Malley, at Development Specialist Inc., chief restructuring officer. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million. GENERAL GROWTH: Running on Fumes on Forbearances; Fitch Dumps IDR ----------------------------------------------------------------- Rouse Company LP bondholders are likely to see term reductions due to the nonpayment of principal at maturity on two series of notes maturing in the coming months, according to Fitch Ratings, which has maintained the Rating Watch Negative status on Rouse's 'C' Issuer Default Rating (IDR) and downgraded the IDR and outstanding debt ratings of General Growth Properties (GGP) to 'RD' from 'C'. Fitch has also removed GGP from Rating Watch Negative. An 'RD' rating denotes 'Restricted Default' status. The downgrade of GGP is consistent with Fitch's updated definitions for its rating scales for entities at different stages of distress. The rating downgrade follows General Growth Properties' entry into multiple forbearance agreements upon a payment default with its syndicates of lenders for its revolving credit facility and term loan entered into in 2006 and its secured mortgage loan facility entered into in 2008. 'RD' ratings indicate an issuer that has experienced an uncured payment default on a material financial obligation but has otherwise not entered into bankruptcy filings, administration, receivership, liquidation or other formal winding- up procedures. The downgrade in GGP's rated obligations to 'C/RR5' from 'CC/RR5' is consistent with Fitch's revised Recovery Ratings (RRs) matrix for IDRs in the low speculative category. Fitch has maintained Rouse's 'C' IDR on Rating Watch Negative based on GGP's announcement that Rouse launched a consent solicitation to holders of Rouse's unsecured notes to forbear from exercising remedies with respect to various payment and other defaults under the unsecured notes through Dec. 31, 2009. Fitch views this consent solicitation as a coercive debt exchange, as it would result in a material reduction in terms to bondholders due to the nonpayment of principal at maturity with regard to notes maturing in April and May 2009, and nonpayment of cash interest on all of Rouse's unsecured notes until at least Dec. 31, 2009. Absent the consent solicitation, there is a high probability of a Rouse bankruptcy or insolvency over the near term, resulting in the consent solicitation being coercive (de facto necessary even if voluntary). The downgrade in Rouse's rated obligations to 'C/RR5' from 'CC/RR5' is consistent with Fitch's revised RRs matrix for IDRs in the low speculative category. GGP is a Chicago-based real estate investment trust (REIT) engaged in acquiring, developing, renovating and managing regional malls in major and middle markets throughout the United States. GGP also has investments in commercial office buildings and community development projects purchased in connection with the Rouse acquisition in 2004. As of Dec. 31, 2008, GGP owned interests in over 200 million square feet of properties and had $33.8 billion in total undepreciated book assets. Fitch has taken these rating actions: * General Growth Properties, Inc. -- IDR to 'RD' from 'C'. * GGP Limited Partnership -- IDR to 'RD' from 'C'; -- Revolving credit facility to 'C/RR5' from 'CC/RR5'; -- Term loan to 'C/RR5' from 'CC/RR5'; -- Exchangeable senior notes to 'C/RR5' from 'CC/RR5'; -- The indicative rating on GGP Limited Partnership's perpetual preferred stock remains at 'C/RR6' * The Rouse Company LP -- IDR maintained at 'C'; -- Senior unsecured notes to 'C/RR5' from 'CC/RR5'. -- The Rouse Company LP IDR remains on Rating Watch Negative pending resolution of the consent solicitation, which expires on March 16, 2009. GREEN VALLEY: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Green Valley Growers, Inc. 16821 FM 1097 E. Willis, TX 77378 Bankruptcy Case No.: 09-31630 Type of Business: The Debtor is a wholesale grower of blooming tropical, palms, perennials, crape myrtles, ferns, grasses, trees, ground covers, topiaries, and ornamental shrubs. See: http://www.greenvalleygrowers.net/ Chapter 11 Petition Date: March 9, 2009 Court: Southern District of Texas (Houston) Judge: Letitia Z. Clark Debtor's Counsel: Alan D. Bynum, Esq. alanbynum@msn.com Rolston & Bynum 1445 North Loop West, Suite 100 Houston, TX 77008-1654 Tel: (713) 223-0032 Total Assets: $18,567,174 Total Debts: $20,653,605 The Debtor did not file a list of 20 largest unsecured creditors. The petition was signed by Wayne Massey, president. GREENBRIER COS: S&P Downgrades Corporate Credit Rating to 'B-' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on The Greenbrier Cos. Inc., including the long-term corporate credit rating to 'B-' from 'B+'. The outlook is negative. "The downgrade reflects our concerns regarding the railcar manufacturer's upcoming operating performance due to deteriorating conditions in the new railcar market," said Standard & Poor's credit analyst Robyn Shapiro. S&P expects new railcar production to decline significantly in 2009 compared to 2008 and, as a result, Greenbrier's credit metrics are likely to worsen to levels outside S&P's expectations for the 'B+' rating. Given the company's thin margin of financial covenant compliance and approaching covenant step-downs, weakening operating performance could pressure covenants in the near term. The ratings on Lake Oswego, Oregon-based Greenbrier reflect the company's weak business risk profile stemming from the cyclicality of the freight car manufacturing industry; the dramatic decline in demand for new railcars as a result of slower economic growth and weaker carloadings; and limited customer diversity. The company also has a highly leveraged financial risk profile, marked by increased debt balances as a result of recent acquisitions. With sales of more than $1 billion, Greenbrier is organized in three segments: manufacturing (about 50% of sales), refurbishment and parts (about 40%), and leasing and services (8%). These businesses are focused largely on the manufacturing of intermodal and conventional railcars and marine vessels, as well as the repair, refurbishment, maintenance, and leasing of railcars. Greenbrier is the leading domestic intermodal railcar manufacturer, commanding a roughly 60% market share. The company also has good market positions in boxcars and flat cars, and has begun to branch out into other car types, such as tank cars and covered hoppers. Greenbrier benefits from its relatively more stable refurbishment and parts business, which the company has increased through several recent acquisitions. The leasing of Greenbrier's relatively small fleet of about 9,000 railcars helps diversify the company's operations, as does providing management services for about 146,000 railcars. The repair and refurbishment, marine, and leasing and services businesses are more stable and provide higher margins than the railcar manufacturing unit. Overall profitability is weak, with a consolidated operating margin (before depreciation and amortization) of roughly 9% as of Nov. 30, 2008, down from 13% in 2006. The outlook is negative, reflecting the company's thin margin of financial covenant compliance. S&P could lower the ratings further if the company violates or appears likely to violate its financial covenants and seems unlikely to obtain satisfactory relief. S&P could revise the outlook to stable if the company establishes a track record of free cash flow generation and maintains at least 15% headroom under financial covenants. HARRAH'S ENTERTAINMENT: Makes Tender Offer for $2.8-Bil. Notes -------------------------------------------------------------- Harrah's Entertainment Inc., announced another tender offer to complement the swap in November when senior unsecured and subordinated debt were exchanged for second-lien notes maturing in 2015, Bloomberg's Bill Rochelle said. The new private offer, Bloomberg relates, is for $2.8 billion in new second-lien notes maturing in 2018 in exchange for 10 different issues of senior and subordinated notes. The new tender offer, according to the report, also provides for these terms: -- Priority is being given to the holders of earlier-maturing debt. -- Participants have the option of receiving as much as $150 million cash instead of the new notes. -- Holders of the new second-lien notes of 2015 and 2018 can participate in an offer to sell up to $676 million of the existing notes for $250 million. -- The tender offer expires April 1. -- Those who tender by March 18 receive extra consideration. According to Mr. Rochelle, Harrah's in February drew down the remaining $740 million on its $2 billion revolving credit. Harrah's Entertainment was acquired in January 2008 by Apollo Management LP and TPG Inc. in a $27.2 billion transaction. Standard & Poor's said on March 6 that Harrah's rating likely would be in the vicinity of CCC if the offers are successful because they would "eliminate, or at least substantially reduce, Harrah's debt maturities over the next few years. About Harrah's Entertainment Las Vegas, Nevada-based Harrah's Entertainment, Inc. -- http://www.harrahs.com-- operates nearly 40 casinos across the United States, primarily under the Harrah's(R), Caesars(R) and Horseshoe(R) brand names; Harrah's also owns the London Clubs International family of casinos and the World Series of Poker(R). Private equity firms Apollo Global Management and TPG Capital LP acquired Harrah's in January for $31 billion. At Sept. 30, 2008, the company's consolidated condensed balance sheets showed total assets of $37.0 billion, total liabilities of $33.4 billion and stockholders' equity of $3.6 billion. For three months ended Sept. 30, 2008, the company reported net loss of $129.7 million compared with net income of $244.4 million for the same period in the previous year. For nine months ended Sept. 30, 2008, the company posted net loss of $100.9 million compared with net income of $667.2 million for the same period in the previous year. The company's cash and cash equivalents, including funds borrowed during the quarter under its credit facilities, totaled approximately $1.0 billion at Sept. 30, 2008, compared to $654.7 million at Sept. 30, 2007. * * * As reported by the TCR on March 10, 2009, 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. ILX RESORTS: Receives Delisting Notification From NYSE ------------------------------------------------------ ILX Resorts Incorporated received a letter from NYSE Alternext on March 6, 2009 indicating the Exchange's intent to suspend trading and delist the Company's common stock. The Exchange has determined the Company is not in compliance with Section 1003(a)(iv) of the Company Guide due to its recent filing of Chapter 11 under the U.S. Bankruptcy Code and Section 1002(b) due to low market capitalization of the common stock. The Company does not intend to appeal the determination. The Company plans to apply to be quoted on the Pink Quote system. Based in Sedona, Arizona, ILX Resorts Incorporated (NYSE Alternext: ILX) -- http://www.ilxresorts.com/-- acquires, develops, and operates premier timeshare resorts primarily in the western United States that provide its owners with extraordinary vacation experiences. ILX's portfolio of world-class properties includes eight resorts in Arizona, one in Indiana, one in Colorado, one in San Carlos, Mexico and land in Puerto Penasco, Mexico and Sedona, Arizona, both of which are in the final planning stages. Through Premiere Vacation Club, the Company has acquired, and continues to acquire, inventory at the Carriage House in Las Vegas and in addition has acquired inventory at the Scottsdale Camelback Resort in Scottsdale, Arizona. ILX Resorts, Inc. and its affiliates filed for bankruptcy protection on March 2, 2009 (Bankr. D. Ariz. Case No. 09-03594). Judge Redfield T. Baum presides over the cases. John J. Hebert, Esq., at Shughart Thomson & Kilroy, P.C., serves as the Debtors' counsel. As of September 30, 2008, ILX Resorts had $73.6 million in total assets and $43.2 million in total liabilities. ISOLAGEN INC: To Run Out of Cash in 3 Weeks; Bankruptcy an Option ----------------------------------------------------------------- Isolagen, Inc., on March 9 issued a press release that it has reached a "significant regulatory milestone" after submitting to the U.S. Food and Drug Administration a biologics license application for Isolagen Therapy(TM), a novel, first-in-class cellular therapy for the treatment of wrinkles/nasolabial folds, to the U.S. Food and Drug Administration. At the bottom of the release, however, the company said that it currently estimates that its unrestricted, available cash resources will allow it to continue in operation for approximately three weeks. The company said it continues to pursue potential financing alternatives and potential strategic partnership discussions. However, if these alternatives don't work out, the company said it could file for bankruptcy or cease operations. "However, there can be no assurance that any such potential financing alternative will be completed on terms acceptable to the Company, or successfully completed at all," the release stated. "Further, there can be no assurance that any potential strategic partnership discussions will be completed on terms acceptable to the Company, or completed at all. If the Company does not obtain additional funding, or anticipate additional funding in the very near future, the company may enter into bankruptcy, and possibly cease operations." The company currently has a debt liability of approximately $89.7 million related to its 3.5% subordinated notes, which could be called due, at the option of the note holders, as early as November 2009. Interest on the notes is due semiannually on May 1 and November 1. The company added that it is pursuing the potential sale of its 57% ownership interest in Agera Laboratories, Inc. It says there can be no assurance that a sale of this ownership interest will be completed on terms acceptable to the Company, or successfully completed at all. About Isolagen Inc. Isolagen(TM), Inc. (Amex: ILE) is an aesthetic and therapeutic company committed to developing and commercializing scientific advances and innovative technologies. The company's technology platform includes the Isolagen Process(TM), a cell processing system for skin and tissue rejuvenation which is currently in clinical development for a broad range of aesthetic and therapeutic applications including wrinkles, acne scars, burns and periodontal disease. Isolagen also commercializes a scientifically-advanced line of skincare systems through its majority-owned subsidiary, Agera(R) Laboratories, Inc. For additional information, please visit www.isolagen.com. JAMIE VERGARA: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Jamie Ruben Vergara 8747 Crestgate Circle Orlando, FL 32819 Bankruptcy Case No.: 09-02751 Chapter 11 Petition Date: March 9, 2009 Debtor-affiliates subject to Chapter 11 petitions on Oct. 9, 2008: Entity Case No. ------ -------- Heritage Ford Mercury Inc. 08-9286 Middle Tennessee, RV, LLC 08-9283 Court: Middle District of Florida (Orlando) Debtor's Counsel: Lawrence M. Kosto, Esq. lkosto@kostoandrotella.com Kosto & Rotella PA Post Office Box 113 Orlando, FL 32802 Tel: (407) 425-3456 Fax: (407) 423-9002 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Chrysler Floor Plan $8,000,000 10300 Boggy Creek Rd, Ste. l00 Orlando, FL 32804 U.S. Bank August 2005 $7,660,710 333 Broadway Personal Guaranty; Paducah, KY 42002 Claim Secured by Assets of Heritage Ford Lincoln Mercury Chrysler Financial 5800 Crossings $4,700,000 10300 Boggy Creek Road Blvd., Nashville, Ste. 100 Ste.l00 Tennessee Real Orlando, FL 32824 Estate: $4,800,000; working capital: $1,200,000; secured: $6,000,000 Bank of Lincoln 1427, 1429 and $2,800,000 P.O. Box 778 1431 Interstate Fayetteville, TN 37334 Drive, Cookeville TN 38501 Personal Guaranty; secured: 2,200,000; senior senior: $1,450,000 U.S. Bank February 2006 $1,804,134 333 Broadway Personal Guaranty; Paducah, KY42002 Claim secured by Assets of Middle Tennessee, RV, LLC Putnam 1st Mercantile Bank 1427, 1429 and $1,450,000 200 W. Jackson Street 1431 Interstate Cookeville, TN 38501 38501 Drive, Cookeville; secured: $2,200,000 Chrysler Credit Capital Loan $1,200,000 10300 Boggy Creek Road Suite l00 Orlando, FL 32824 Regions/Amsouth 490 Neal Street, $985,000 North Building 2nd Cookeville, TN; Birmingham, AL 35244 Commercial Property 1 Acre; secured: $1,800,000 Textron Financial Corp. Personal Guaranty $792,173 c/o Gary Grooms 401 Commerce Street, Ste. 800 Nashville, TN 37219 Comm Bk Cumb 1117 East Spring $736,124 P.O. Box 3708 Street, Cookevill, Jamestown, TN 38556 38501; secured: $1,500,000 Chase Mortgage 8747 Crestgage $536,117 P.O. Box 9001871 Circle, Oriando, Louisville, KY 40290 Florida; secured: $750,000 Comm Bk Cumb 490 Neal Street, $349,510 420 E. Central Avenue Cookeville, TN; Jamestown, TN 38556 Commercial Property 1 Acre; secured: $1,800,000; senior lien: $985,000 Region/AmSouth 6840 Hochad Dr. $240,077 Orlando, FL 32819; secured: $320,000 Taylor Bean & Whitaker 104 Eighteen $225,739 101 NE 2nd Street Grande Place, Ocala, FL 34470 Cookeville, TN; secured: $320,000 Regions/Amsouth 8747 Crestgage $150,329 North Building 2nd Circle, Orlando, Birmingham, AL 35244 Florida; secured: $750,000; senior lien: $536,117 Tennessee Department of Sales & Use Tax $150,000 Revenue Vergara Group, 500 Deaderick Street LLC; Nashville, TN 37242 Regions Bank 490 Neal Street, $97,587 Cookeville, TN; Commercial Property 1 Acre; secured: $1,800,000; senior lien: $1,356,226 Tennesse Department of Sales and Tax Use $91,604 Revenue for Middle 500 Deaderick Street Tennessee RV, Nashville, TN 37242 LLC Tennesse Department of Sales and Use Tax $88,750 Revenue for Heritage 500 Deaderick Street Ford Lincoln- Nashville, TN 37242 Mercury LLC Young & Young, VI, Inc. February 12, 2005 $186,990 Personal Guaranty JAY HOSTETTER: U.S. Trustee Sets Creditors Meeting for March 23 --------------------------------------------------------------- The U.S. Trustee of Region 2, will convene a meeting of creditors in Jay Hostetter's Chapter 11 case on March 23, 2009, at 10:00 a.m., at 74 Chapel Street, Hearing Room 101, Ground Floor, Albany, New York. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Albany, New York, Jay Hostetter dba Jay's Mobil filed for Chapter 11 protection on February 26, 2009, (Bankr. N.D. NY Case No.: 09-10557) Francis J. Brennan, Esq. at Nolan & Heller, LLP represents the Debtor in its restructuring efforts. The Debtor has estimated assets of $1,000,001 to $10,000,000 and estimated debts of $1,000,001 to $10,000,000. JOSEPH DIEKEMPER: Wife Sentenced to Two Years of Probation ---------------------------------------------------------- Bnd.com reports that U.S. District Court Judge G. Patrick Murphy has sentenced Margaret Diekemper, accused with her husband of conspiring to hide assets in a bankruptcy case. According to Bnd.com, Ms. Diekemper and his husband Joseph were charged in June 2008 with committing fraud in connection with a multi-million dollar bankruptcy case. They allegedly hid an expensive tractor behind a false wall of a barn near Keyesport, Illinois, says the report. Court documents say that Judge Murphy also prohibited Ms. Diekemper from seeing her husband. Diekemper had faced 46 to 57 months in prison as part of a plea arrangement, Bnd.com relates. The Associated Press reported in October 2008 that the Diekempers filed for bankruptcy in 2004, claiming assets of $1.7 million and liabilities of almost $5 million, although bankruptcy officials and the bank managing their property suspected that they weren't telling the truth. According to The AP, that bank took out in April 2007 a large ad in the Carlyle Union Banner warning that anyone helping the Diekempers hide their possessions could be breaking the law. KERYX BIOPHARMACEUTICALS: To Appeal Nasdaq Delisting Notice ----------------------------------------------------------- Keryx Biopharmaceuticals, Inc., has requested a hearing to appeal to a Listings Qualification Panel the determination of The Nasdaq Stock Market to delist the company's common stock from The Nasdaq Capital Market due to noncompliance with Nasdaq Marketplace Rule 4310(c)(3), which requires the company to have a minimum of $2,500,000 in stockholders' equity, or $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, for continued listing on The Nasdaq Capital Market. A hearing request by the company automatically postpones the delisting of the company's securities pending issuance of the Panel's decision. The company expects to have a hearing date scheduled in the next 45 days. The Staff of The Nasdaq Stock Market previously granted the company a 105-day extension to regain compliance with Marketplace Rule 4310(c)(3). In an appeal, the company will be asking that the Panel provide additional time to regain compliance with Nasdaq Marketplace Rule 4310(c)(3). There can be no assurance that such a request will be granted or that the Panel will permit the company to continue to list its common stock on The Nasdaq Capital Market. If the company is delisted from The Nasdaq Capital Market, its common stock may be traded over-the-counter on the OTC Bulletin Board or in the "pink sheets." These alternative markets, however, are generally considered to be less efficient than the Nasdaq Capital Market. Many over-the-counter stocks trade less frequently and in smaller volumes than securities traded on the Nasdaq markets, which would likely have a material adverse effect on the liquidity and value of the company's common stock. About Keryx Biopharmaceuticals Keryx Biopharmaceuticals, Inc. (KERX), is focused on the acquisition, development and commercialization of medically important, novel pharmaceutical products for the treatment of life-threatening diseases, including renal disease and cancer. Keryx is headquartered in New York City. L.A. SPAS: Lenders to Auction Pledged Stock on March 24 ------------------------------------------------------- Patriot Capital Funding, Inc., as Agent for the Lenders under that certain Credit Agreement dated as of October 28, 2004, as amended, between the Lenders and L.A. Spas, Inc., as Borrower, will offer for sale the stock of Borrower owned by Daniel Gardenswartz, Mark Vidergauz, Bradley de Koning, Sage Capital Partners - I.A., L.P., Peterson Parners III, L.P. and ShoeInvest II, L.P. The stock secures the obligations of Borrower to the Lenders. Borrowers are in default of said obligations in an amount not less than $13,177,000. The stock represents all of the issued and oustanding stock of Borrower, subject only to any issued and outstanding management management incentive stock and options. The stocks will be sold in a single block on an "as is, where is" basis at one or more public sales to be held at the offices of Goldberg Kohn, 55 East Monroe Street, Suite 3300, Chicago, Illinois at 10:00 a.m. on March 24, 2009. The minimum bid for the stock will be $100,000. Prospective bidders may reach Mr. Timothy Hassler at (203) 429- 2700. To obtain copies of the confidentiality agreement and qualified investor letter, please contact counsel to the Agent at this address: Goldberg Kohn Attn: Erin Casey, Esq. Fax: 312 (863)-7464 Email: erin.casey@goldbergkohn.com LEEWARD OPERATORS: Involuntary Chapter 11 Case Summary ------------------------------------------------------ Alleged Debtor: Leeward Operators LLC Agent for Service of Process Michael F. Miley 201-A Travis Street Lafayette, LA 70503 Case Number: 09-50260 Involuntary Petition Date: March 9, 2009 Court: Western District of Louisiana (Lafayette/Opelousas) Petitioner's Counsel: Michael A. Crawford, Esq. mike.crawford@taylorporter.com P.O. Box 2471 Baton Rouge, LA 70821 Tel: (225) 381-0201 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ A & T Well Service, Inc. Oilfield services $427,971 c/o Kenneth Addison Vice President 1094 Bergeron Rigs Road Breaux Bridge, LA 70517 Innovative Energy Services Oilfield services $270,962 Inc. c/o William W. Cason General Counsel 8100 Groschke Rd., Ste. A-1 Houston, TX 77084 Eaton Oil Tools, Inc. Oilfield services $267,931 c/o G. Edward Eaton Secretary/General Manager P. O. Box 1050 Broussard, LA 70518 LEHMAN BROTHERS: Balks at Examiner-JPMorgan Info Sharing Deal ------------------------------------------------------------- Lehman Brothers Holdings, Inc., and its affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to deny a stipulation between JPMorgan Chase Bank, N.A., and Anton Valukas, the court-appointed examiner, setting forth the guidelines for the sharing of information in connection with the Examiner's investigation in the Debtors' collapse. Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York has authorized the Examiner to issue subpoenas to LBHI officers, its units and other officials involved in the investment bank's transactions. The Examiner wants the LBHI officials subpoenaed to compel them to produce the documents and serve as witnesses in connection with his investigation into what caused the collapse of LBHI. The officials would be investigated particularly about the inter- company transfers among LBHI and its units a month before their bankruptcy. The Debtors argue that the Examiner's information sharing protocol with JPMorgan is prejudicial to the Debtors if they are denied access to the information subject to the stipulation. L. P. Harrison 3rd, Esq., at Curtis, Mallet-Prevost, Colt & Mosle LLP, in New York, points out that J.P. Morgan's intention to designate all information that identifies specific securities, loans, instruments or other properties of the Debtors that are currently held and maintained by the bank as "highly confidential" is problematic. According to Mr. Harrison, J.P. Morgan's designation of this information as highly confidential will prevent the examiner from sharing the information with the Debtors and will preclude them from participating in or reviewing the results of the examiner's investigation where the information may be used. He further says that it will also prohibit the examiner from filing with the Court the information or documents containing the information except under seal. "While the Debtors recognize that they are not and will not be bound by the terms of the stipulation, the effect of the terms of the stipulation will be detrimental and highly prejudicial to the Debtors," says Mr. Harrison says. "The Debtors will not even be permitted to make use of such information once an examination or investigation by the examiner has concluded since the stipulation provides that all highly confidential information be destroyed at the termination of the examiner's examination," Mr. Harrison says. Mr. Harrison relates it has contacted the Examiner in an attempt to resolve the Debtors' concerns with the stipulation, however, their concerns remain unresolved. Examiner Responds In a statement, Mr. Valukas maintains that the proposed order he negotiated with J.P. Morgan allows him to conduct his investigation without unreasonable restrictions. "Among other provisions, the proposed order narrowly defines which materials can be deemed highly confidential by J.P.Morgan, provides a mechanism for the examiner to challenge J.P.Morgan's confidentiality designations if they are not justified," Patrick Trostle, Esq., at Jenner & Block LLP, in New York, argues on behalf of the examiner. Mr. Trostle maintains that the proposed order also provides a mechanism for gaining permission to use even highly confidential documents for witnesses not otherwise entitled to see the documents, and for seeking relief from the Court if additional access cannot be resolved consensually. According to Mr. Trostle, the Debtors' concerns are belied by their recognition that they are not even bound by the confidentiality restrictions between the examiner and J.P. Morgan. "The proposed protective order between the examiner and J.P. Morgan does not limit the Debtors from pursuing any type of discovery against J.P. Morgan, or prevent the Debtors from negotiating or litigating any disputes over their access to J.P. Morgan documents," Mr. Trostle says. Mr. Trostle adds that the Examiner has agreed to remove and has obtained a concession from JPMorgan to remove a provision in the proposed order that would have required the examiner to return or destroy the J.P.Morgan's documents at the conclusion of the investigation. J.P. Morgan, in a statement, expressed support for Mr. Valukas, saying that nothing in their agreement impairs the Debtors' ability to seek information from the bank or even to seek disclosure of information provided to the examiner. Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: CES Aviation Sells Sikorsky S-76C+ Helicopter -------------------------------------------------------------- CES Aviation V, LLC, a debtor-affiliate of Lehman Brothers Holdings, Inc., seeks authority from the U.S. Bankruptcy Court for the Southern District of New York to sell a Sikorsky S-76C+ helicopter, which was used to facilitate business transportation for the Debtors' employees prior to their bankruptcy filing. Attorney for the Debtors, Shai Waisman, Esq., at Weil Gotshal & Manges LLP, in New York, says there is a need to sell the aircraft as soon as possible in light of the continuing decline of market for pre-owned aircraft. Based on a market summary report provided by JETNET, an independent aircraft market database source, the price for a Sikorsky S-76 series helicopter has decreased by nearly $4,000,000 in the four-month period between September 2008 and January 2009 alone -- from a high of $8,600,000 to a low of $4,750,000. "[CES Aviation] is in active discussions with parties interested in purchasing the Sikorsky S-76C+ and believes it shortly may be in a position to execute a sale and purchase agreement," Mr. Waisman says. Mr. Waisman says that should CES Aviation and the potential buyer agree on the price, CES Aviation will negotiate and execute a formal agreement with that buyer for the sale of the aircraft. He points out, however, that the sale of the aircraft will remain subject to higher and better offers, and will proceed in accordance with these procedures: (1) Upon the filing of the motion for approval of the aircraft, the Debtors will provide a notice of the motion to any party that has expressed interest in any of their aviation assets within the past year, and certain other logical or likely bidders. The Debtors will have the notice and the motion published on their court-approved claims and noticing agent's website. (2) CES Aviation will proceed to negotiate with any interested party. Should it locate and successfully negotiate with a purchaser, it will give notice of the proposed sale no later than 10 days prior to the sale hearing on March 25, 2009. The notice will also be published on their court- approved claims and noticing agent's website. (3) The notice must (i) identify the buyer, the purchase price, and the deposit; (ii) identify the salient provisions of the sale agreement; (iii) separately disclose any provision as may be required by the guidelines for the conduct of asset sales, adopted by the Court's General Order M-331; and (iv) state any other relevant terms of the proposed sale. (4) Any party interested in submitting a higher offer for the aircraft must contact CES Aviation for a copy of the sale agreement and submit (i) an offer in the form of the sale agreement, changed only to modify, where appropriate, the name of the purchaser, an increased purchase price, and an increased deposit to reflect an amount equal to five percent of the modified purchase price and (ii) a deposit in the amount included in the offer. A higher offer must be submitted to and received by CES Aviation, with a copy to Weil Gotshal no later than 72 hours prior to any sale hearing. CES Aviation retains the right to determine, in its sole discretion, the highest or other best bid, and to reject any bid. (5) A party interested in the aircraft may contact CES Aviation's broker Bloomer deVere at any time prior to the deadline for submitting bids. Mr. Waisman says any agreement for the sale of the aircraft will require CES Aviation to pay all outstanding pre-bankruptcy invoices and unpaid maintenance contracts. As of March 5, 2009, CES Aviation is responsible for paying certain outstanding invoices totaling $6,854. These invoices reportedly reflect flight support activity expenses incurred in the ordinary course of business of operating the aircraft, the nonpayment of which could result in a lien on the aircraft. Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Court OKs Jones Day Firm's as Special Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has authorized Lehman Brothers Holdings Inc. and its debtor- affiliates to employ Jones Day as their special counsel. As reported by the Troubled Company Reporter on February 25, 2009, as special counsel, Jones Day will: (1) assist Lehman Brothers Holdings, Inc., in relation to any issues arising in the Asia Pacific region, principally in Hong Kong, The Philippines, Taiwan, Japan and Australia, as a result of their bankruptcy cases in the United States; (2) assist and advise LBHI with respect to the insolvency proceedings of Lehman Brothers Australia Holdings Pty Limited in Australia; (3) assist LBHI and its U.S.-based units in asserting claims in the Japanese Civil Rehabilitation proceedings of Lehman Brothers Japan KK, Lehman Brothers Commercial Mortgage KK and Sunrise Finance KK in Japan; (4) advise LBHI in connection with claims that may be asserted against it relating to Lehman Brothers Japan Holdings KK; (5) advise LBHI and its units with respect to distressed debt transactions in Taiwan, China, The Philippines and Thailand, and its acquisition and financing of real estate assets in Taiwan; (6) represent certain Lehman units through various "third parties" in the sale of their Sunrise Project and the changes to their corporate registrations required by the departure of the members of the Boards of their operating companies to Nomura; (7) continue representing LBHI in the lawsuit it filed against John Kontrabecki in the U.S. Bankruptcy Court of the Northern District of California, and in related bankruptcy cases; and (8) represent LBHI and its affiliated debtors in connection with their businesses and operations in India. Attorney for LBHI, Richard Krasnow, Esq., at Weil Gotshal & Manges LLP, in New York, says the Debtors selected Jones Day because of the firm's extensive experience as well as its familiarity with the business operations of LBHI and its units. Jones Day has represented various Lehman entities in the United States, the Asia Pacific Rim and Australia with respect to various litigation, securities, insolvency, commercial, real estate and other matters, Mr. Krasnow says. He adds that Jones Day has also represented certain Lehman units since 2002 on more than one hundred distressed debt transactions in Taiwan, China, The Philippines and Thailand. In exchange for its services, the Debtors will pay Jones Day these hourly rates: Professionals Rates ------------- ----------- Partners $575 - $900 Counsel $525 - $550 Associates $200 - $475 Paralegals $190 - $225 Jones Day will also be reimbursed of the expenses it may incur in connection with its employment. Simon Powell, Esq., a partner at Jones Day, attests that his firm does not represent or hold interest adverse to LBHI and its affiliated debtors with respect to its duties as special counsel. The Debtors certified that no objection to the Jones Day employment application was timely filed. Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Court Permits LBI Trustee to Return Funds ---------------------------------------------------------- James Giddens, trustee for Lehman Brothers Inc., obtained approval from the U.S. Bankruptcy Court for the Southern District of New York of stipulations with various parties concerning the return of funds erroneously transferred to LBI's bank accounts: Parties Amount ------- ----------- Lehman Brothers Secondary $107,161 Opportunities Pooling L.P. Lehman Brothers Secondary $51,697 Opportunities Holdings LLC Lehman Brothers Secondary $606,023 Holdings LP Barclays Capital Inc. $1,000,333 Lance Funston $250,000 SEB Enskilda, Inc. $5,433,056 LBCIP Linn Holdings LP $1,707,510 Lehman Brothers Co-Investment $44,298 Group, L.P. Lehman Brothers Co-Investment $16,921 Capital Partners, L.P. Samuel Sebastiani $172,666 H/2 Special Opportunities Ltd. $660,287 Merrill Lynch Capital Services, Inc. $286,000 J.P. Morgan Trust Company of $4,600,000 Delaware & Mary Ann Stein Aloha Enterprises Inc. $134,903 Lupa Insurance Company, Ltd. $340,000 State Street Bank & Trust Company $4,308,176 FGRK Canadian Trust CAD$70,653 Mr. Giddens is awaiting the Court's approval of the stipulations he entered into with these parties: Parties Amount ------- ----------- State Street Bank Boston $3,057,548 Pepsi Cola MFG. Co. 71,384 Hogan & Hartson LLP 479,923 Maddington S.A. 159,180 Lehman Brothers Special Financing Inc. 3,155,681 Wilmington Trust Co. 25,000 Steven Goldman, Azita Etaati 57,252 John Miller IV 91,299 Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Examiner Can Hire Duff & Phelps Fin'l Advisors --------------------------------------------------------------- Anton Valukas, the examiner appointed in the bankruptcy cases of Lehman Brothers Holdings Inc. and its debtor-affiliates, obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Duff & Phelps LLC as his financial advisors. As financial adviser, Duff & Phelps will investigate, gather and analyze documents and information related to the scope of the Examiner's investigation, and do financial and accounting analyses as needed and directed by the Examiner. Duff & Phelps will also advise and assist the Examiner in discharging his duties as well as in preparing his report. Duff & Phelps will be paid for its services at these hourly rates: Managing Directors $805 - $920 Directors $720 - $865 Vice-Presidents $580 - $695 Senior Associates $435 - $525 Analysts $305 - $365 Research Analysts $195 Administrative Personnel $120 The firm will also be reimbursed of its expenses and will be indemnified for any damages or losses incurred in connection with its employment. Attorney for the Examiner, Patrick Trostle, Esq., at Jenner & Block LLP, in New York, says Duff & Phelps has agreed to reduce its standard hourly rates by 10% in light of the public interest involved in the services it will be providing to the examiner. In a declaration, Allen Pfeiffer, Esq., managing director of Duff & Phelps, attests his firm does not have any interest materially adverse to the Debtors' estates, their creditors and equity security Holders. He adds that Duff & Phelps is a "disinterested person" under Section 101(14) of the Bankruptcy Code. Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: LCPI Seeks to Bar iStar From Amending Loan Terms ----------------------------------------------------------------- Lehman Commercial Paper, Inc., asks the U.S. Bankruptcy Court for the Southern District of New York to prohibit iStar Financial Inc. from amending their unsecured credit agreements. However, LCPI sought and obtained Court authority to file under seal: -- LCPI's application prohibiting iStar Financial from amending their unsecured credit agreements; and -- a copy of LCPI's complaint against iStar that it submitted on February 26, 2009 before the Court. LCPI says the documents contain confidential information, which, if disclosed, may harm iStar Financial. LCPI is one of the lenders to iStar Financial under two revolving credit agreements. The complaint seeks a declaration that a proposed amendment of iStar's credit agreement and possible bond or note exchanges constitute a violation of the automatic stay provisions as well as an unauthorized transfer. Attorney for LCPI, L. P. Harrison 3rd, Esq., at Curtis Mallet- Prevost Colt & Mosle LLP, in New York, said that the documents contain highly sensitive information that iStar may consider proprietary and confidential. "Disclosure of the facts underlying the confidential documents may expose iStar to a substantial commercial and competitive disadvantage in the future when conducting business or negotiating and entering into similar agreements with other parties," Mr. Harrison said. Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Names William Fox as Chief Financial Officer ------------------------------------------------------------- William Fox, a specialist at Alvarez & Marsal, will be the new chief financial officer of Lehman Brothers Holdings Inc., according to Emily Chasan at Reuters, citing the company's spokeswoman as the source. Mr. Fox will replace David Coles, a managing director at Alvarez & Marsal, who has been serving as chief financial officer of LBHI since late September 2008. Mr. Coles will reportedly move to another assignment. Mr. Fox has been serving in a senior financial role at LBHI since its bankruptcy filing on September 15, 2008. His appointment will be fully effective after clearance of regulatory approvals, Reuters reported. Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Seeks Approval of LCPI Deal with Metlife --------------------------------------------------------- Lehman Brothers Holdings Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to approve a settlement agreement between Lehman Commercial Paper, Inc., and The Metropolitan Life Insurance Company. The agreement would allow LCPI and MetLife to settle their dispute by amending the documents that MetLife executed with Variable Funding Trust 2007-1 and Variable Funding Trust 2008-1, including the Note Purchase Agreements. Under the Note Purchase Agreements, both securitization trusts are required to issue notes to MetLife, which in return, agreed to provide a variable rate senior secured revolving credit facility of up to $500 million to each trust. Repayment of the notes are guaranteed by Lehman Brothers Holdings Inc., and are secured by collateral in the form of mortgage loans that LCPI sold and assigned to VFT 2007, and participations in corporate loans that it sold and assigned to VFT 2008. As a result of LBHI's bankruptcy filing, an "event of default" occurred under the Note Purchase Agreements, allegedly entitling MetLife to exercise remedies with respect to the notes and the collateral. Since the bankruptcy filing, LCPI has also failed to transfer some of the payments it has received from the borrowers under the mortgage loans to VFT 2007, and under the corporate loans to VFT 2008. "Given the current market conditions for loans, if the mortgage loans or the participations were sold at this time, such sales would, in LCPI's view, likely result in such collateral being sold at a significant discount to its par value or its intrinsic value," Jacqueline Marcus, Esq., at Weil Gotshal & Manges LLP, in New York, says on behalf of the Debtors. "As a result, it would be unlikely that LCPI's estate would realize any value from its ownership of interests in the trusts," Ms. Marcus says. In light of the consequences of an immediate sale of the collateral, the Debtors determined that the best means of maximizing the value of the collateral is through the settlement with MLIC, which will be memorialized in revisions to the documents. The salient terms of the settlement are: (1) The term of VFT 2008 is extended to June 30, 2010, while the term of VFT 2007 is extended to December 31, 2009, with the possibility of a further extension if certain conditions are satisfied. (2) With respect to VFT 2008, MetLife's position is improved through the delivery of assignments to Bank of New York to be held in escrow. MetLife will only be able to exercise remedies with respect to such assignments if LCPI defaults under the amended documents. (3) LCPI will work to terminate all unfunded revolver commitments under the VFT 2008. (4) All collections held by LCPI with respect to the collateral since the bankruptcy filing, net of the fees and expenses of MetLife and the collateral trustee that are payable pursuant to the collateral agreements, will be paid by LCPI to the trusts to be used for the contemporaneous payment or prepayment of the notes. Any deficiency at maturity or acceleration of the notes issued by either of the trusts will be added to the balance of the other Trust's secured note obligations. Any excess collateral, including cash, after payment of either trust's notes is to be held as collateral for the other trust's notes until all notes are paid in full, provided that in the case of cash or subsequent sales of the collateral yielding cash, such amounts should be contemporaneously used to prepay notes. (5) MetLife will waive any prepayment penalties on the notes. The parties will waive all pre-existing defaults and events of default under the Note Purchase Agreements upon the execution and delivery of the documentation evidencing the amendment and acceleration of the notes will be rescinded at such time. (6) If an event of default under either of the trusts or any of the documents occurs after the effective date, neither LBHI nor any Debtor will allege that the automatic stay applies with respect to MetLife's pursuit of its remedies under such trust. A hearing to consider approval of the settlement will be held on March 25, 2009. Creditors and other concerned parties have until March 12 to file their objections. Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Seeks Authority to Hire Huron as Tax Consultants ----------------------------------------------------------------- Lehman Brothers Holdings Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for authority to employ Huron Consulting Group as their tax services providers effective January 23, 2009. The Debtors tapped the consulting firm to provide personnel to work with their internal tax department and prepare for the filing of tax returns. About six to 20 personnel will be assigned for the job and will be directly supervised by Jacqueline O'Neil, managing director of Huron Consulting. The Debtors will pay Huron Consulting's according to these hourly rates: Managing Director $325 - $730 Director $225 - $620 Manager $185 - $575 Associate $185 - $345 Analyst $125 - $245 The Debtors will also reimburse Huron Consulting at a single blended billing rate of $145 per hour based on its estimation of the amount of effort and the experience required for providing those services. The firm will also be reimbursed of its expenses and will be indemnified for any losses or damages incurred in connection with its employment. In case Huron Consulting is required to provide tax services other than those contemplated under their engagement agreement with the Debtors, the firm will be paid for those services at these rates: Tax Managing Director $350 Tax Senior Director $250 Tax Manager $185 Tax Associate $125 Robert Pawlak, a managing director of Huron Consulting, assures the Court that his firm "neither holds nor represents an interest adverse to the Debtors or their estates with respect to the matters on which Huron is to be employed." Richard P. Krasnow, Esq., at Weil, Gotshal & Manges LLP, in New York, told the Court through a certification of counsel, that no objection to the employment application was timely filed or received. Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Swiss Liquidators Take Lead Role for Unit ---------------------------------------------------------- Lehman Brothers Holdings Inc., which filed the largest Chapter 11 case in September 2008, is now willing for the European liquidators to take on the main role in the liquidation of its Switzerland-based unit Lehman Brothers Finance AG, Bloomberg's Bill Rochelle said. LBHI sent its Swiss unit to Chapter 11 on Oct. 3 in order to protect the assets of the unit. According to Bill Rochelle, Lehman is now saying that the Chapter 11 case should be dismissed, and its Chapter 15 petition for LBF be granted. If the Chapter 15 petition is approved, the liquidation in Switzerland will be recognized as the "foreign main proceeding." Creditor actions in the U.S. against LBF will be barred, and creditors will be required to file their claims before the Swiss court. In a document sent to the U.S. Bankruptcy Court for the Southern District of New York, LBHI and its affiliates said they do not oppose the request of PricewaterhouseCoopers AG, Zurich. On the contrary, the Debtors said they support the commencement of the Chapter 15 case of Lehman Brothers Finance SA and the recognition of LBFS' bankruptcy proceeding in Switzerland as a foreign main proceeding under the Swiss Financial Market Supervisory Authority, with PwC as the duly appointed Bankruptcy Liquidator of LBF. However, the Debtors complain that certain circumstances surrounding the filing of LBF's Chapter 11 Petition may have been inaccurately described by PwC. Despite the inaccuracies, the Debtors and PwC nevertheless appear to agree that: (a) the filing of a Chapter 11 petition was necessary to protect LBF's assets in the United States; and (b) under the totality of the circumstances, including the pendency of the Swiss Bankruptcy, it would be more appropriate that the Chapter 11 case of LBF be dismissed and supplanted by a Chapter 15 case, in which the Swiss Bankruptcy is duly recognized as a foreign main proceeding. The Debtors recognize that FINMA qualifies under Section 1502(3) of the U.S. Bankruptcy Code as a "foreign court," since it is the administrative agency with regulatory authority over LBF, and that FINMA has appointed PwC to be the Bankruptcy Liquidators of LBF. The Debtors also agree that PwC is the appropriate party to be recognized as LBF's foreign representative in the Chapter 15 case. Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: Taps Carlton, Halleland as Special Counsel ------------------------------------------------------------- Lyondell Chemical Company and its affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to employ, as their special counsel, nunc pro tunc to January 6, 2009: (1) Mark Carlton, Esq.; and (2) Halleland Lewis Nilan & Johnson P.A. Mr. Carlton, prior to the Petition Date, served as counsel to Debtor Millennium Holdings LLC in lead pigment/lead paint related cases. The Debtors intend to continue Mr. Carlton's services to manage these aspects of the lead paint litigation: * the liability docket for cases brought by both governmental entities alleging public nuisance causes of action and individuals alleging personal injury and property damage causes of action; * the coverage case in which Millennium is defending claims by its carriers that the carriers are not responsible for any liabilities that may result from the liability cases; and * the indemnity claim asserted by Millennium against ICI arising out of ICI's 1986 acquisition of The Glidden Company. The Debtors will pay Mr. Carlton according to his customary billing rate of $195 to $200 per hour. Moreover, Mr. Carlton is given $20,556 per month as retainer and is reimbursed of any expenses incurred. Mr. Carlton will also reimbursed for necessary expenses. Mr. Carlton assures the Court that he does not represent or hold an interest adverse to the Debtors' Chapter 11 cases. He says that he is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. Halleland Engagement Before the Petition Date, Halleland represented the Debtors in connection with lead pigment or paint claims asserted against the Debtor Millennium Holdings LLC. By this application, Halleland will provide these services to the Debtors: * defense of Millennium in McCloud v. Millenium; * pursuit of defense costs in State of Rhode Island v. LIA et al.; * monitoring and participation in defense of other pending matters; and * work on indemnity and insurance coverage matters. The Debtors will pay Halleland professionals their customary billing rates: Title Rate per Hour ----- ------------- Shareholders $320 to $600 Special counsel and $320 to $450 Contract attorneys Associates $250 to $350 Paralegals $165 to $120 Litigation support $100 to $180 Professionals The Debtors will reimburse Halleland for necessary expenses incurred. Michael T. Nilan, Esq., a shareholder at Halleland, says that Halleland did not represent, has not represented and will not represent the Debtors' secured lenders, the Debtors, Debtor affiliates and Non-Debtor Affiliates, the Debtors' officers and directors, the Debtors' principal equity holders, the Debtors' insurance carriers, significant creditors, the Debtors' common carriers and other parties-in-interest on matters related to the Debtors' Chapter 11 cases. He however notes that the certain of the parties-in-interest are former or current clients of Halleland on matters unrelated to the Debtors' Chapter 11 cases. Mr. Nilan avers that Halleland is a "disinterested person" as that term is defined under Section 101(14) of the Bankruptcy Code. About Lyondell Chemical Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries -- http://www.lyondellbasell.com/-- the world's third largest independent chemical company. Lyondellbasell produces polypropylene and advanced polyolefins products, is a leading supplier of polyethylene, and a global leader in the development and licensing of polypropylene and polyethylene processes and related catalyst sales. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. About a year after completing the merger, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code on January 6, 2009, to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc., filed for Chapter 11. LyondellBasell is not part of the bankruptcy filing. LyondellBasell's non-U.S. operating entities are also not included in the Chapter 11 filing. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: Taps Kelley Drye as Counsel on Insurance ----------------------------------------------------------- Lyondell Chemical Company and its affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to employ employ Kelley Drye & Warren LLP as their special counsel, nunc pro tunc to January 6, 2009. Before the Petition Date, Kelly Drye has represented Debtors Millennium Holdings, LLC, and Millennum Inorganic Chemicals, Inc., with respect to lead paint insurance coverage and other insurance-related matters. For this reason, the Debtors intend to hire Kelley Drye to continue to represent them in insurance coverage matters related to lead paint and in other insurance coverage matters. The Debtors will pay Kelley Drye professionals according to their customary hourly rates: Title Rate per Hour ----- ------------- Partners $510 to $775 Associates $280 to $450 Paralegals $200 to $210 The Debtors will also reimburse Kelley Drye for necessary out-of- pocket expenses incurred. John E. Heintz, Esq., a partner at Kelley Drye, notes that his firm currently represents trade creditors of the Debtors, including Ineos Olefins & Polymers, Kolmar Americas Inc., Tata Consultancy Services, Ltd., and Tata America International Corp. on matters unrelated to the Debtors' Chapter 11 proceedings. In addition, Kelley Drye is advising Becton, Dickinson and Company, a customer of the Debtors. He says that Kelley Drye did not represent, has not represented and will not represent the Debtors' secured lenders, the Debtors, Debtor affiliates and Non- Debtor Affiliates, the Debtors' officers and directors, the Debtors' principal equity holders, the Debtors' insurance carriers, significant creditors, the Debtors' common carriers and other parties-in-interest. He however notes that the certain of the parties-in-interest are former or current clients of Kelley Drye on matters unrelated to the Debtors' Chapter 11 cases. Mr. Heintz notes that the Debtors owe Kelley Drye $412,106 for prepetition services. However, he assures the Court that his firm is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. About Lyondell Chemical Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries -- http://www.lyondellbasell.com/-- the world's third largest independent chemical company. Lyondellbasell produces polypropylene and advanced polyolefins products, is a leading supplier of polyethylene, and a global leader in the development and licensing of polypropylene and polyethylene processes and related catalyst sales. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. About a year after completing the merger, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code on January 6, 2009, to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc., filed for Chapter 11. LyondellBasell is not part of the bankruptcy filing. LyondellBasell's non-U.S. operating entities are also not included in the Chapter 11 filing. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: Panel May Retain Brown Rudnick as Counsel ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York has authorized the Official Committee of Unsecured Creditors in the bankruptcy cases of Lyondell Chemical Company and its affiliates to retain Brown Rudnick LLP as its counsel, nunc pro tunc to January 16, 2009. As the Committee's counsel, Brown Rudnick will: * assist and advise the Committee in its discussions with the Debtors and other parties-in-interest regarding the overall administration of the Chapter 11 cases; * represent the Committee at Court hearings and communicate with the Committee regarding the matters heard, issues raised and decisions and considerations of the Court; * assist and advise the Committee in its examination and analysis of the conduct of the Debtors' affairs; * review and analyze pleadings, orders, schedules and other documents filed and to be filed with the Court by interested parties in the Debtors' cases; advising the Committee as to the necessity, propriety, and impact of the foregoing upon these bankruptcy proceedings; and consenting or objecting to pleadings or orders on behalf of the Committee, as appropriate; * assist the Committee in preparing those applications, motions, memoranda, proposed orders, and other pleadings as may be required in support of the positions taken by the Committee, including all trial preparation as may be necessary; * confer with other professionals retained by the Debtors and the Committee and other parties-in-interest; * coordinate the receipt and dissemination of information prepared by and received from the Debtors' or the Committee's professionals; * participate in examinations of the Debtors and other witnesses in order to analyze and the Debtors' assets and financial condition, and determine whether the Debtors have made any avoidable transfers of property, or causes of action exist on behalf of the Debtors' estates; * negotiate and formulate a plan of reorganization for the Debtors; and * assist the Committee generally in performing other services as may be required for the discharge of the Committee's duties pursuant to Section 1103 of the Bankruptcy Code. Brown Rudnick's professionals will be paid according to the firm's customary hourly rates: Title Rate per Hour ----- ------------- Partners $515 to $950 Associates $325 to $605 Paraprofessionals $100 to $295 Brown Rudnick will also be reimbursed for its out-of-pocket expenses under Sections 330 and 331 of the Bankruptcy Code, and Rule 2016 of the Federal Rules of Bankruptcy Procedure. Edward S. Weisfelner, Esq., at Brown Rudnick, avers that his firm conducted a conflicts search to ascertain its connections to the Debtors and their Chapter 11 cases. He asserts that Brown Rudnick has been representing these entities in matters that are not materially adverse to the Debtors' estates: (i) American Railcar Inc., in connection with the amounts owed to it by Lyondell Chemical Company and Equistar Chemicals, LP and certain limited executory contract matters; and (ii) American Railcar Leasing LLC, in connection with its leases of railcars to Lyondell Chemical Company and Equistar Chemicals, LP. Subsequent to the Petition Date, Brown Rudnick provided general advice regarding the Debtors' capital structure, consequences of the Chapter 11 filings, and features of the 2015 and 2027 notes to Cyrus Opportunities Master Fund II, Ltd. The representation was later terminated, Mr. Weisfelner discloses. Notwithstanding all those disclosures, Mr. Weisfelner believes that Brown Rudnick is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. About Lyondell Chemical Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries -- http://www.lyondellbasell.com/-- the world's third largest independent chemical company. Lyondellbasell produces polypropylene and advanced polyolefins products, is a leading supplier of polyethylene, and a global leader in the development and licensing of polypropylene and polyethylene processes and related catalyst sales. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. About a year after completing the merger, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code on January 6, 2009, to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc., filed for Chapter 11. LyondellBasell is not part of the bankruptcy filing. LyondellBasell's non-U.S. operating entities are also not included in the Chapter 11 filing. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: Panel May Retain Mesirow as Financial Advisors ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has authorized the Official Committee of Unsecured Creditors in the bankruptcy cases of Lyondell Chemical Company and its affiliates to retain Mesirow Financial Consulting, LLC as its financial advisors, as of January 20, 2009. Mesirow will provide: * assistance in the review of reports or filings as required by the Bankruptcy Court or the United States Trustee, including schedules of assets and liabilities, statements of financial affairs and monthly operating reports; * review and analysis of legal entity relationships, including with respect to issues which may be raised regarding substantive consolidation and accounting for intercompany transactions and balances, including off sheet balance sheet liabilities; * review of the Debtors' financial information, including analyses of cash receipts and disbursements, financial statement items and proposed transactions for which Court approval is sought; * evaluation of potential employee retention and severance plans; * review and analysis of pension funding and related liabilities; * analysis of assumption and rejection issues regarding executory contracts and leases; * validation of the Debtors' proposed business plans and the business and financial condition of the Debtors' generally; * advice and assistance to the Committee in negotiations and meeting with the Debtors, the bank lenders and other stakeholders; * advice and assistance on the tax consequences of proposed plans of reorganization; * assistance with the claims resolution procedures, including analyses of creditors' claims by type of entity; * review and analysis of potential fraudulent transfers, including transaction and forensic analysis; * litigation consulting services and expert witness testimony regarding confirmation issues, avoidance actions or other matters; * review and analysis of exit financing, including cash collateral analysis and cash flow validation; and * other functions as requested by the Committee or its counsel to assist the Committee in these Chapter 11 cases. Mesirow's professionals will be paid according to these customary hourly rates: Level Rate per Hour ----- ------------- Senior managing director, managing $670 to $710 director and director Senior vice president $580 to $640 Vice president $470 to $540 Senior associate $370 to $440 Associate $220 to $320 Paraprofessional $150 Mesirow will be reimbursed for necessary out-of-pocket fees incurred. Larry Lattig, senior managing director of Mesirow Financial, avers that based on a review of parties-in-interest in the Debtors' Chapter 11 cases, his firm: * is not a creditor, an equity security holder, or an insider of the Debtors; * is not and was not, within two years before the Petition Date, a director, officer or employees of the Debtors; and * does not have an interest materially adverse to the interests of the estates or of any class of creditors or equity security holders. Mr. Lattig says Mesirow is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. About Lyondell Chemical Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries -- http://www.lyondellbasell.com/-- the world's third largest independent chemical company. Lyondellbasell produces polypropylene and advanced polyolefins products, is a leading supplier of polyethylene, and a global leader in the development and licensing of polypropylene and polyethylene processes and related catalyst sales. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. About a year after completing the merger, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code on January 6, 2009, to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc., filed for Chapter 11. LyondellBasell is not part of the bankruptcy filing. LyondellBasell's non-U.S. operating entities are also not included in the Chapter 11 filing. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: PJ Solomon May be Panel's Investment Bankers --------------------------------------------------------------- The Official Committee of Unsecured Creditors in the bankruptcy cases of Lyondell Chemical Company and its affiliates sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to retain Peter J. Solomon Company as investment bankers, nunc pro tunc to January 20, 2009. As the Committee's investment banker, PJSC will: * advise and assist the Committee in assessing the operating and financial performance of and strategies for the Debtors; * review and analyze the business plan and financial projections prepared by the Debtors, through testing and comparing those assumptions to historical and industry trends; * advise and assist the Committee in evaluating debtor-in- possession financing, cash collateral and exit financing; * advise and assist the Committee in assessing the valuation of the Debtors and their assets, including valuations proposed by any interested party and providing expert testimony relating to valuation, if required; * advise and assist the Committee in evaluating the Debtors' assets and liabilities; * advise the Committee regarding restructuring of the Debtors' existing loans; * advise and assist the Committee in developing, evaluating, structuring and negotiating the terms and conditions of any potential plans of reorganization; * advise and assist in negotiations, on behalf of the Committee, with the Debtors or any constituency involved in the Chapter 11 cases, including participation in meetings and conferences; * advise and assist the Committee in assessing the value of any debt or securities that may be issued to unsecured debt holders or others in conjunction with a plan; * provide testimony with regard to the proposed recoveries to unsecured debt holders under a Plan; * advise the Committee, upon its request, in connection with one or more possible transactions, or series or combination of transactions between the Debtors and a third party, in the transfer of their businesses or any portion of their assets including in, among others, (i) a sale or exchange of capital stock or assets with or without a purchase option, (ii) a merger or consolidation, (ii) a tender or exchange offer, a leveraged buy-out, (iv) the formation of a joint venture or partnership; and * render other financial advisory and investment banking services as may be agreed upon by PJSC and the Committee. PJSC will be paid a monthly advisory fee that will include: (i) $175,000, pro-rated for the period from January 20, 2009, to January 31, 2009; (ii) $175,000 for each of February, March and April, 2009; (iii) $225,000 for each of May, June and July 2009; and (iv) $250,000 for each month during the term of PJSC's employment, payable in advance on the first business day of each month. PJSC will be reimbursed for any actual and necessary costs and expenses incurred in connection with its retention. Anders J. Maxwell, managing director at PJSC, cites that PJSC does not hold or represent an interest adverse to the Debtors' estates. Accordingly, PJSC is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code, he says. 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) MANASSEH BUILDING: Case Summary & 10 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Manasseh Building Group, Inc. aka MBG aka Pacific Planning and Design 212 N. Kanan Road Oak Park, CA 91377 Bankruptcy Case No.: 09-12507 Type of Business: The Debtor operates a real estate company. Chapter 11 Petition Date: March 9, 2009 Court: Central District Of California (San Fernando Valley) Judge: Geraldine Mund Debtor's Counsel: Joseph A. Eisenberg, Esq. jae@jmbm.com Jeffer, Mangels, Butler & Marmaro LLP 1900 Avenue of The Stars, 7th Floor Los Angeles, CA 90067 Tel: (310) 203-8080 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Nancy Salamar Trade debt $50,000 29105 Laro Dr. Agoura, CA 91301 Tel: (818) 879-1649 WinWholesale Trade debt $12,094 PO Box 530957 Atlanta, GA 30353-0957 Tel: (916) 685-3399 Capital One Trade debt $8,187 PO Box 30285 Salt Lake City, UT 84130-0285 Tel: (800) 867-0904 California Capital Insurance Trade debt $7,118 Group Tri-Star Trade debt $1,603 Chase Trade debt $1,577 Crown Disposal Co. Inc. Trade debt $508 Orkin Pest Control Trade debt $298 Apartment Owners Ass. of Trade debt $143 California Delta Fire Protection & Trade debt $135 Equipment The petition was signed by Stephen W. Gregorchuk, president. MAGNA ENTERTAINMENT: May Borrow $13.3 Million from Affiliate ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has authorized Magna Entertainment Corp., to borrow, on the interim, $13.3 million from affiliate MI Developments Inc., Bloomberg's Bill Rochelle said. Magna Entertainment had proposed to access $62.5 million in debtor-in-possession loans from MID. Some creditors, however, objected and questioned whether the affiliate should be the lender, Bloomberg reported. MID is the majority shareholder and is a creditor owed $372 million. As reported by the TCR on March 6, the Debtors solicited offers for DIP financing but MID would not consent to any DIP facility that primed its prepetition liens. MEC thus engaged MID in extensive arm's-length negotiations with respect to the terms and conditions of a debtor-in-possession facility. The DIP Facility has been memorialized in a Debtor-in-Possession Credit Agreement, dated as of March 5, 2009, which provides: -- MID has agreed to provide up to $62.5 million of debtor-in- possession financing, with a maturity six months following interim approval thereof: -- The financing will be provided in two tranches, upon interim and final approval of the DIP Agreement, and will be accomplished through monthly draws. -- Interest will accrue with respect to amounts drawn at the rate of LlBOR plus 12%. -- Provisions of the Facility are designed to assist and promote the sale of certain assets. Magna Entertainment and its affiliates, and MID entered into a Purchase Agreement, dated March 5, 2009, which establishes MID as a "stalking horse" and contemplates an extensive sale process led by Miller Buckfire to realize the highest and best offer for the Purchased Assets, as defined in the Purchase Agreement, which include among others: (a) the common stock of Pacific Racing Association, Gulfstream Park Racing Association Inc., GPRA Thoroughbred Training Center, Inc., and AmTote International, to be issued on the date upon which all the conditions to effectiveness of a chapter 11 plan, in form and substance satisfactory to the Debtors and MID, which has been confirmed by the Bankruptcy Court in accordance with Section 1129 of the Bankruptcy Code, have been satisfied or waived; (b) MEC's joint venture interest in The Village at Gulfstream Park; and (c) certain stock and interests belonging to non-Debtor subsidiaries of Magna Entertainment. As consideration for the Purchased Assets, MID has agreed to (a) apply $135,629,000 owing by Magna to MID; and (b) pay $44,300,000 in cash. 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. MEC and 24 affiliates filed Chapter 11 petitions on March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10720). Judge Mary F. Walrath presides over the cases. Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, in New York; and L. Katherine Good, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, serve as the Debtors' bankruptcy counsel. Miller Buckfire & Co. LLC acts as the Debtors' financial advisors and Kurtzman Carson Consultants LLC acts as the Debtors' noticing and claims agent. As of December 31, 2008, the Debtors had $1,049,387,000 in total assets and $958,591,000 in total debts. MAGNA ENTERTAINMENT: Receives Notice Of Delisting From Nasdaq ------------------------------------------------------------- Magna Entertainment Corp. received notification from The Nasdaq Stock Market indicating that Nasdaq staff had determined, in accordance with Marketplace Rules 4300, 4450(f) and IM-4300, that the company's securities will be delisted from Nasdaq as a result of, among other things, MEC's announcement that it filed a voluntary petition for relief under Chapter 11 in the United States. MEC does not intend to appeal Nasdaq's delisting decision and, accordingly, the trading of MEC's Class A Subordinate Voting Stock will be suspended at the opening of business on March 16, 2009. 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. MEC and 24 affiliates filed Chapter 11 petitions on March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10720). Judge Mary F. Walrath presides over the cases. Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, in New York; and L. Katherine Good, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, serve as the Debtors' bankruptcy counsel. Miller Buckfire & Co. LLC acts as the Debtors' financial advisors and Kurtzman Carson Consultants LLC acts as the Debtors' noticing and claims agent. As of December 31, 2008, the Debtors had $1,049,387,000 in total assets and $958,591,000 in total debts. MAGNA ENTERTAINMENT: Taps AlixPartners as Restructuring Advisors ---------------------------------------------------------------- Magna Entertainment Corp. and certain of its subsidiaries, obtained authority from the U.S. Bankruptcy Court for the District of Delaware to employ AlixPartners, LLP to perform restructuring advisory services. AlixPartners will: a) assist with the Debtors bankruptcy filing under Chapter 11 of the U.S. Bankruptcy Code; b) assist the Debtor with preparing and filing of the bankruptcy schedules and statements of financial affairs; c) assist with the overall claims and contracts resolution process and provide both the Debtors and its counsel access to the claims and contracts data; d) provide various bankruptcy consulting services throughout the case, as necessary; e) work at the direction of the Debtor and counsel to assist with planning and directing Chapter 11 related communications to employees, vendors, customers and parties in interest; f) be available for testimony as necessary; and g) assist with other matters as may be requested that fall within AlixPartners' expertise and that are mutually agreeable. The Debtors and AlixPartners intend that all the services provided will be (a) appropriately directed by the Debtors so as to avoid duplicative efforts among the other professionals retained in the case and (b) performed in accordance with applicable standards of the profession. Meade Monger, managing director of AlixPartners, tells the Court that the discounted hourly rates for professionals working in these cases are: Managing Directors $595 Directors $485 Vice Presidents $395 Associates $295 Analysts $195 Paraprofessionals $120 Mr. Monger adds that the Debtors do not owe AlixPartners any amount for services performed or expenses incurred prior to the petition date. During 90 days prior to petition date, AlixPartners received $252,069. In addition, AlixPartners received an advance retainer of $150,000. Mr. Monger assures the Court that AlixPartners 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 KCC as Claims & Noticing Agent ----------------------------------------------------------------- Magna Entertainment Corp. and its subsidiaries, obtained authority from the U.S. Bankruptcy Court for the District of Delaware to employ Kurtzman Carson Consultants LLC as claims and noticing agent and as agent of the Bankruptcy Court. KCC is expected to: a) notify all potential creditors of the filing of the Debtors' Chapter 11 cases and the date of the first meeting of creditors and further provide notices of: the claims bar date, objections to claims and transfer of claims, hearings on confirmation of a Plan/disclosure statement, hearings on motions filed by United States Trustee, and the transfer of claims; b) within 7 days of the service of documents, filing with the Court, a copy of the notice served with a certificate of service, indicating the name and address of each party served; c) prepare and serve motions, applications, requests for relief, hearing agendas, and related documents on behalf of the Debtors in these Chapter 11 cases; d) assist in the Debtors' preparation of the schedules of assets and liabilities and their statements of financial affairs, listing, among other things, the Debtors' known creditors and amounts owed thereto and maintain an official copy of same; e) maintain a copy service from which parties may obtain copies of relevant documents in these cases; f) notify all potential creditors of the existence and amount of their claims as set forth in the schedules; g) furnish a form for the filing of proofs of claim, after approval of the notice and form by this court, and provide notice for the bar date for filing proofs of claim; h) file with the Clerk's Office a copy of the bar date notice, a list of persons to whom it was mailed, and the date the notice was mailed; i) docket all claims received, maintain a separate official claims register for each Debtor in this jointly administered case on behalf of the Clerk's Office, and provide the Clerk's Office with a certified duplicate unofficial claims registers on a monthly basis, unless otherwise directed; j) specify in the applicable claims registers certain information for each claim docketed; k) implement necessary security measures to ensure the completeness and integrity of the claims registers; l) relocate, by messenger, all of the actual proofs of claim with the Court, if necessary to KCC, not less than weekly; m) record all transfers of claims and provide any notices of the transfers required ny Bankruptcy Rule 3001; n) notify the claims registers pursuant to applicable orders of this Court and file quarterly updated claims registers with the Court, but if there has been no claims activity, the claims agent may file a certification of no claim activity; o) allow public access to claims and the claims registers at no charge; p) upon completion of the docketing process for all claims received to date by the Clerk's Office, turning over to the Clerk's Office copies of the claims registers for review by the Clerk's Office; q) maintain the official mailing lists for each Debtor of all entities that have filed a proof of claim, which list will be made available upon request by a party in interest or the Clerks' Office; r) establish and maintain a case website with case information, including key dates, service lists, and free access to the case docket within three days of docketing; s) if requested, assist with, among other things, the solicitation and the calculation of votes and distributions as required in furtherance of confirmation and consummation of a Chapter 11 Plan; t) 30 days prior to the close of the cases, assist counsel for the Debtors in submitting an order dismissing KCC as the Court's outside agent and terminate the services of KCC upon completion of its duties and responsibilities and upon closing of these cases; and u) otherwise fulfill all duties set forth in Local Rule 2002-1(f). The Court also authorized the Debtors to compensate KCC in accordance with the service agreement, upon the receipt of detailed invoices and to reimburse KCC for all reasonable and necessary expenses without the necessity for KCC to file application for compensation or reimbursement with the Court. Michael J. Frishberg, vice president of corporate restructuring Services of KCC, told the Court that to date, there are no outstanding amounts owed to KCC by the Debtors. Mr. Frishberg assured the Court that KCC 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. MASONITE INT'L: Presents Projections; Negotiating Chapter 11 Plan ----------------------------------------------------------------- In connection with the negotiations between Masonite International Inc. and a steering committee representing its senior secured lenders and an ad-hoc committee representing holders of its senior subordinated notes due 2015 relating to the restructuring transaction, the company provided the senior secured lending steering committee and subordinated note holders' committee with certain non-public financial information under confidentiality agreements by and between the company and such senior secured lenders and senior subordinated note holders. The confidentiality agreements require that the company disclose certain of the non- public information provided to them. The information provided by the company included projections of the company's operations and financial conditions from 2009 through 2013, prepared as of February 2009. The company does not, as a matter of course, publicly disclose projections. The projections were not prepared with the view to public disclosure and are included in this current report only because such information was made available to the senior secured lenders steering committee and senior subordinated note holders committee. Accordingly, the company does not intend to, and disclaims any obligation to (a) furnish updated projections, (b) include such updated information in any documents which the company may file with the Securities and Exchange Commission or (c) otherwise make such updated information publicly available. The financial information presented relating to the 12 months ended December 31, 2008, has been provided for indicative purposes only, is preliminary and remains subject to change, including potential adjustments in connection with the audit procedures being performed by the company's independent public accountants. The projections are based on a variety of estimates and assumptions which may not be realized and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the company's control. In particular, the projections are based on these key assumptions: -- the company's ability to maintain sufficient working capital to self-fund operations or access to financing sources to fund any deficiencies, including the company's ability to complete the proposed restructuring transaction and gain consent from its lenders to decrease the size of the company's outstanding debt obligation, the existence of stable foreign exchange and capital markets, and the continuing support of trade creditors and the ability to obtain enhanced trade credit support. -- current and projected market conditions in each of the company's respective markets, including assumptions regarding stabilization of the market for raw materials and the company's ability to pass along any increases in raw material costs to its customers if increases occur. -- an estimate of the company's ability to maintain and grow its existing product lines and customer relationships in 2009 and beyond, including the timing of such growth in both its North American and Rest of World segments based on the pace of global economic recovery. -- cost savings opportunities at its manufacturing operations, including the ability to rationalize and exit certain low margin products, the ability to optimize its manufacturing footprint through rationalizing excess capacity in certain of its operations, and the ability to achieve cost savings related to manufacturing and purchasing efficiencies. Some of the assumptions may not materialize, and events and circumstances occurring subsequent to the date on which these projections were prepared may be different from those assumed or may be unanticipated, and thus may affect financial and operating results in a material manner. In addition, the projections do not contemplate outcomes where the company is unable to complete the proposed restructuring transaction and pursues alternative options such as a prolonged Chapter 11 filing or a partial or full break- up and sale of its various operations. Accordingly, it is expected that there will be differences between actual and projected results, and actual results may be materially different from those set forth. The projections were not prepared with a view to compliance with the published guidelines of the Commission regarding projections, nor were they prepared in accordance with the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial projections. Moreover, the company's accountants have not examined or applied any procedures to the projections in accordance with standards established by the American Institute of Certified Public Accountants and express no opinion or assurance on their reasonableness, accuracy or achievability. The projections do not include adjustments that may be required to the company's financials statements as a result of the adoption of "fresh start" accounting. As reported by the Troubled Company Reporter, the company reached an agreement in principle with members of a steering committee representing its senior secured lenders and representatives of an ad-hoc committee representing holders of its senior subordinated notes due 2015 on the terms of a restructuring plan that will enable the company to significantly reduce its outstanding debt and create an appropriate capital structure to support the company's long-term strategic plan and business objectives. Support for the plan is currently being solicited by the company from its broader lender and bondholder constituencies. If approved by the requisite percentages of the lender and bondholder groups and implemented as proposed, the restructuring plan will enable Masonite to reduce its total funded debt by nearly $2 billion, from $2.2 billion to up to $300 million upon consummation of the plan. The debt reduction would reduce annual cash interest costs by approximately $145 million and provide Masonite with greater liquidity and financial flexibility as it continues to take aggressive action to address challenges created by the downturn in the global housing and credit markets. Under terms of the agreement in principle, Masonite's existing Senior Secured Obligations would be converted on a pro rata basis, subject to the election of each existing holder of Senior Secured Obligations, into: (i) a new senior secured term loan of up to $200 million, (ii) a new second-lien PIK Loan of up to $100 million, and/or (iii) 97.5% of the common equity of a reorganized Masonite subject to dilution for warrants issued to the Senior Subordinated Noteholders and management equity or options. Senior Subordinated Notes would be converted to 2.5% of the common equity in Masonite plus warrants for 17.5% of the common stock of the company, subject to dilution for management equity or options. It is anticipated that the restructuring would be implemented by means of a "pre-negotiated" Plan of Reorganization filed in conjunction with voluntary Chapter 11 proceedings in the United States and similar proceedings under the Companies' Creditors Arrangement Act (CCAA) in Canada. The legal proceedings would be initiated upon receipt of approvals for the restructuring plan from the requisite percentages of the lender and bondholder constituencies. Masonite noted that pre-negotiated restructuring plans typically require only 90 to 120 days to effectuate. The implementation of the agreement in principle is subject to closing conditions. About Masonite International Based in Ontario, Canada, Masonite International Corporation -- http://www.masonite.com/-- (TSE:MHM) is a vertically integrated producer, manufacturing key components of doors, including composite molded and veneer door facings, glass door lites and cut stock. The company provides these products to its customers in more than 70 countries around the world. The company is a wholly owned subsidiary of Masonite International Inc. It offers a range of interior and exterior doors. Masonite Canada operates Masonite International's Canadian subsidiaries, well as certain other non- United States subsidiaries. * * * As reported in the Troubled Company Reporter on Sept. 1, 2008, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on Masonite International Inc. (Masonite) and its subsidiaries, Masonite International Corp. and Masonite US Corp., to 'CCC+' from 'B-'. S&P also lowered the senior secured debt rating on Masonite to 'B' from 'B+'. The ratings remain on CreditWatch with negative implications, where they were placed April 18, 2008. As reported by the Troubled Company Reporter, Masonite entered into a further extension, to February 9, 2009, of its forbearance agreements with its bank lenders and with holders of a majority of the senior subordinated notes due 2015 issued by two of the Company's subsidiaries. MASONITE INT'L: Reports 19.8% Decline in 2008 Sales --------------------------------------------------- Masonite International Inc. announced on Monday unaudited financial information for the fourth quarter and full year 2008. Masonite said 2008 sales were $390.3 million, a decline of 19.8% compared to sales of $486.8 million in the fourth quarter of 2007. Operating EBITDA decreased 66.5% to $13.2 million from $39.4 million in the fourth quarter of 2007. Operating EBITDA in the fourth quarter of 2008 decreased to $13.2 million from $39.4 million in the prior year primarily due to lower sales volumes and higher levels of materials cost inflation that were not fully offset by price increases and a reduction in selling, general and administration expenses of $11.3 million versus the prior year. In the fourth quarter of 2008, cash decreased $14.0 million as cash flow was negatively impacted by the contraction of trade payable terms of approximately $37.1 million, and $7.0 million relating to professional advisor fees associated with pursuing a resolution to the company's capital structure. Fourth quarter cash flow was also impacted by the non-payment of accrued interest in the amount of $42.9 million related to the payment blockage on the senior subordinated notes. The company also entered into a new Accounts Receivables Securitization program which generated approximately $12.5 million of cash flow. For the 12 months ended December 31, 2008, the company reported consolidated sales of $1.8 billion, a decline of 16.5% compared to sales of $2.2 billion in the 12 months of 2007. Operating EBITDA decreased 49.3% to $138.1 million from $272.4 million in the 12 months of 2007. Operating EBITDA decreased by 49.3%, or $134.3 million in 2008, primarily due to significantly lower volumes caused by declining housing starts and repair, renovation and remodeling activity, as well as the loss of the Home Depot regions. Additionally, inflation on materials and other costs were not fully passed onto customers due to competitive dynamics aggravated by the weak market conditions. Significant productivity in manufacturing and selling, general administrative costs partially offset the decline in EBITDA from lower volumes and higher inflation. In 2008, cash increased by $152.5 million, influenced significantly by the draw on the company's revolving credit facility of $336 million offset by approximately $55.8 million of trade payables terms contraction, $39.6 million repaid as a result of changes in the company's accounts receivable securitization programs, $42.4 million paid for contractually required acquisitions and distributions to minority interest shareholders, $28.7 million related to operational restructuring and $13.7 million related to forbearance and professional fees related to the company's Capital Restructuring activities. Cash flow benefited from the non-payment of accrued interest in the amount of $42.9 million related to the payment blockage on the senior subordinated notes in October 2008. The company was not in compliance with the financial covenants contained under its senior secured credit agreement as at December 31, 2008. Restructuring Plan As reported by the Troubled Company Reporter, the company said March 3, 2009, that it has reached an agreement in principle with members of a steering committee representing its senior secured lenders and representatives of an ad-hoc committee representing holders of its senior subordinated notes due 2015 on the terms of a restructuring plan that will enable the company to significantly reduce its outstanding debt and create an appropriate capital structure to support the company's long-term strategic plan and business objectives. Support for the plan is currently being solicited by the company from its broader lender and bondholder constituencies. If approved by the requisite percentages of the lender and bondholder groups and implemented as proposed, the restructuring plan will enable Masonite to reduce its total funded debt by nearly $2 billion, from $2.2 billion to up to $300 million upon consummation of the plan. The debt reduction would reduce annual cash interest costs by approximately $145 million and provide Masonite with greater liquidity and financial flexibility as it continues to take aggressive action to address challenges created by the downturn in the global housing and credit markets. Under terms of the agreement in principle, Masonite's existing Senior Secured Obligations would be converted on a pro rata basis, subject to the election of each existing holder of Senior Secured Obligations, into: (i) a new senior secured term loan of up to $200 million, (ii) a new second-lien PIK Loan of up to $100 million, and/or (iii) 97.5% of the common equity of a reorganized Masonite subject to dilution for warrants issued to the Senior Subordinated Noteholders and management equity or options. Senior Subordinated Notes would be converted to 2.5% of the common equity in Masonite plus warrants for 17.5% of the common stock of the company, subject to dilution for management equity or options. It is anticipated that the restructuring would be implemented by means of a "pre-negotiated" Plan of Reorganization filed in conjunction with voluntary Chapter 11 proceedings in the United States and similar proceedings under the Companies' Creditors Arrangement Act (CCAA) in Canada. The legal proceedings would be initiated upon receipt of approvals for the restructuring plan from the requisite percentages of the lender and bondholder constituencies. Masonite noted that pre-negotiated restructuring plans typically require only 90 to 120 days to effectuate. The implementation of the agreement in principle is subject to closing conditions. About Masonite International Based in Ontario, Canada, Masonite International Corporation -- http://www.masonite.com/-- (TSE:MHM) is a vertically integrated producer, manufacturing key components of doors, including composite molded and veneer door facings, glass door lites and cut stock. The company provides these products to its customers in more than 70 countries around the world. The company is a wholly owned subsidiary of Masonite International Inc. It offers a range of interior and exterior doors. Masonite Canada operates Masonite International's Canadian subsidiaries, well as certain other non- United States subsidiaries. * * * As reported in the Troubled Company Reporter on Sept. 1, 2008, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on Masonite International Inc. (Masonite) and its subsidiaries, Masonite International Corp. and Masonite US Corp., to 'CCC+' from 'B-'. S&P also lowered the senior secured debt rating on Masonite to 'B' from 'B+'. The ratings remain on CreditWatch with negative implications, where they were placed April 18, 2008. As reported by the Troubled Company Reporter, Masonite entered into a further extension, to February 9, 2009, of its forbearance agreements with its bank lenders and with holders of a majority of the senior subordinated notes due 2015 issued by two of the Company's subsidiaries. MEADOWBROOK FARMS: Will File for Chapter 7 Bankruptcy Protection ---------------------------------------------------------------- David Mercer at The Associated Press reports that Meadowbrook Farms will file for Chapter 7 bankruptcy protection. Meadowbrook Farms estimated it owed farmers more than $5 million in February 2009, The AP says. According to The AP, hog farmer Bob Johnson said Monday that he and other members of Meadowbrook Farms' board voted last week to enter the Company bankruptcy and liquidate the cooperative. There's little hope that Meadowbrook Farms could find an investor or lender to bail it out, the report states, citing Mr. Johnson. The AP relates that Meadowbrook Farms laid off the 600 workers in its Rantoul processing plant in December 2008. The Company, says the report, had hoped to reopen and bring workers back. The AP reports that Meadowbrook Farms' bank and the U.S. Department of Agriculture has denied requests for a loan or other help. Meadowbrook Farms CEO Richard Klene said that he is still trying to find a multimillion-dollar loan or an investor to keep the Company alive, The AP states. The report quoted him as saying, "I'm not trying to buy time, I'm trying to save 625 jobs." Messrs. Johnson and Klene and other cooperative officials said that Meadowbrook Farms collapsed mainly due to a deal with Triad Foods, The AP relates. Citing Meadowbrook Farms officials, The AP states that Triad Foods backed out of a contract in 2008 to purchase hogs and have filed a lawsuit against the Company. According to the report, Triad Foods denied the allegation and accused Meadowbrook Farms of failing to live up to the terms of the contract. Belleville-based Meadowbrook Farms is a hog-farming cooperative that opened in 2002. Meadowbrook Farms has more than 100 members and hog suppliers. MERCEDES HOMES: Gets Court Nod to Access Cash Collateral -------------------------------------------------------- Mercedes Homes Inc. has received authorization from the U.S. U.S. Bankruptcy Court for the Southern District Florida in West Palm Beach, to use its secured lenders' cash collateral. Mercedes Homes may use the cash collateral until a hearing on April 9, Bloomberg's Bill Rochelle said. Mercedes, Bloomberg relates, owes almost $159 million to a first- lien lender, and (i) more than $70 million on a secured revolving loan Headquartered in Melbourne, Florida, Mercedes Homes Inc. -- http://www.mercedeshomes.com-- operates a homebuilding company that was established in 1983 by Howard Buescher, a 23-year veteran of the homebuilding business and his daughter Susan Girard. The company employs approximately 400 people who sell, and construct, homes of distinctive quality in over 80 communities in Florida, Texas and North and South Carolina. The company and 10 of its affiliates filed for Chapter 11 protection on Jan. 26, 2009 (Bankr. S.D. Fla. Lead Case No. 09- 11191). Tina M. Talarchyk, Esq., at Squire, Sanders & Dempsey, LLP, represents the Debtors in their restructuring efforts. The Debtors proposed Richard M. Williamson and Alvarez & Marsal North American LLC as their chief restructuring officer, Odyssey Capital Group LLC as valuation expert, Michael P. Kahn & Associates LLC as financial advisor and Kurtzman Carson Consultants LLC as claims and noticing agent. When the Debtors filed for protection from their creditors, they listed assets and debts between $1 million to $10 million each. M. Bryant Gatrell, Esq., at Moore & Van Allen PLLC, represents the agent for the Debtors' prepetition first lien facilities. Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Exelrod, LLP, represents the agent for the Debtors' prepetition second lien facility. MERISANT WORLDWIDE: Proposes 2009 Employee Incentive Plan --------------------------------------------------------- Merisant Worldwide, Inc., et al., ask the U.S. Bankruptcy Court for the District of Delaware to authorize the implementation of the Debtors' Fiscal 2009 Incentive Plan for the Debtors' 7 executives and approximately 460 other eligible employees. The Debtors also ask the Court to authorize the payment of any incentive bonuses earned under the 2009 Incentive Plan as administrative expenses of the Debtors' estates, pursuant to Sec. 503(b)(1)(A) of the Bankruptcy Code. The Debtors tell the Court that the relief requested is essential to the successful reorganization of the Debtors and is in the best interests of the Debtors' estates and creditors. Under the 2009 Incentive Plan, the employee may earn either an Enterprise Incentive Bonus or a Manufacturing Incentive Bonus, but not both. Executives will be eligible only for Enterprise Incentive Bonuses, which is based on the company achieving a threshold percentage of the company performance target. Manufacturing Incentive Bonuses is based on the company achieving its performance targets and the operating goals for the manufacturing location at which the employee works. The quarterly incentive structure in the 2009 Incentive Plan is summarized below: Quarterly Quarterly Percent of Quarterly Percent Evaluation Date Annual EBITDA Target Payout of Target Bonus March, 2009 16% 15% June, 2009 23% 20% September, 2009 28% 25% December, 2009 32% 40% A hearing is scheduled for March 24, 2009, 2:00 p.m. at U.S. Bankruptcy Court, 824 Market St., 6th Fl., Courtroom #2, in Wilmington, Delaware. 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. MI DEVELOPMENTS: Moody's Reviews Senior Debentures on Magna Filing ------------------------------------------------------------------ Moody's Investors Service placed the senior debentures of MI Developments Inc. (Ba1) on review for possible downgrade. Moody's rating action reflects the persistent financial issues causing Magna Entertainment Corp. to file for Chapter 11 bankruptcy protection on March 5, 2009 and the accelerated pressures in the automotive sector. MID has a 54% equity stake and controls 96% of the votes of MEC. MID's cash flows are derived from long-term triple-net leases, substantially all of them to MID's former parent, Magna International, Inc. (unrated), from which MID was spun off in 2003. In its review, Moody's will assess the ultimate structure of MID and MEC as a result of the bankruptcy and the effects on MID's portfolio and credit metrics. Moody's will also closely monitor Magna's performance as MID has acute tenant and portfolio concentration in manufacturing and automotive assembly properties in the midst of a weak automotive industry, which Moody's expects will face significant operating pressures. Alternative users for certain properties, should MID need to release them, may be limited. MID announced on March 5, 2009 that MEC and certain of MEC's subsidiaries filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code. MID has agreed to provide a six- month secured debtor-in-possession financing facility to MEC (DIP Financing) in the amount of US$62.5 million, to be used to fund MEC's operational needs, together with interest and fees payable to secured creditors (including an estimated US$26.2 million to MID). The DIP financing contemplates that MEC will sell all of its assets through an auction process. MID has also entered into a "Stalking Horse Bid" agreement with MEC to purchase certain assets for US$195 million, with $136 million to be satisfied through a credit bid of MID's existing loans to MEC, $44 million in cash and $15 million through the assumption of a capital lease. Both the DIP Financing and the Stalking Horse Bid are subject to the approval of the U.S. Bankruptcy Court. MID would retain and develop any non-racing real estate assets it acquires from MEC in the Chapter 11 auction process and all horse racing or gaming assets would be segregated from MID's real estate business and held in one or more new wholly-owned subsidiaries of MID (Raceco) that would be self-sustaining and non-recourse to MID's real estate business. Following the completion of the Chapter 11 process, MID would enter into a forbearance agreement, which would restrict transactions between its real estate business and Raceco. By December 31, 2011, MID would either sell or spin off Raceco to shareholders, if it were pro forma profitable and self-sustaining, or cease racing and gaming operations at Raceco and either sell or develop all of Raceco's remaining assets. MID is a real estate operating company that owns, develops and manages industrial and commercial real estate properties located in North America and Europe. The MEC holding has been a credit weakness, since MEC's cash flows are more volatile and seasonal than the stable cash flows of MID. MID does not guarantee any of MEC's debt, but has extended multiple loans to MEC and MEC's subsidiaries. An upgrade is unlikely in the medium term. A return to a stable outlook would be based upon successfully resolving MEC's Chapter 11 bankruptcy process with no negative implications for MID's financial metrics or portfolio, and clarity surrounding the impact of the automotive business pressures on its Magna leases. The rating could come under pressure should MID experience a substantive weakening in credit metrics with fixed charge coverage consistently trending below 3x, a significant deterioration in the automotive industry that would force Magna to close a substantial number of its properties leased to MID, as well as further CEO and director turnover that increases Moody's concerns about corporate governance matters. These ratings were placed on review for possible downgrade: * MI Developments Inc. -- Unsecured debt at Ba1; unsecured debt shelf at (P)Ba1. Moody's last rating action with respect to MI Developments was on November 19, 2008 when Moody's downgraded the senior unsecured ratings to Ba1, from Baa3, with a stable outlook. MI Developments Inc., a real estate operating company headquartered in Aurora, Ontario, Canada, is engaged in the ownership, development, management, leasing and acquisition of industrial and commercial real estate properties located in North America and Europe. Virtually all of its income-producing properties are under lease to Magna International Inc. or its subsidiaries. MID also acquires land that it intends to develop for mixed-use and residential projects and holds a controlling interest in Magna Entertainment Corp., an owner and operator of horse racetracks and supplier, via simulcasting, of live racing content to the inter-track, off-track and account wagering markets. At September 30, 2008, MI Developments had US$2.8 billion in assets on a consolidated basis and US$1.7 billion in equity. MICRON TECHNOLOGY: S&P Pares Rating on $1.3 Bil. Notes to 'B-' -------------------------------------------------------------- Standard & Poor's Ratings Services has lowered its issue-level and recovery ratings on Micron Technology Inc.'s unsecured debt issue. The issue-level rating on the company's $1.3 billion senior unsecured convertible notes has been lowered to 'B-' (one notch lower than the corporate credit rating on Micron), from 'B'. The recovery rating has been changed to '5' from '4', indicating the expectation for modest (10% to 30%) recovery in the event of a payment default. The change to the issue-level and recovery ratings is the result of the company entering into a new 300 million Singapore Dollar secured term loan shortly after the publication of S&P's last recovery report. The amount of the additional secured, priority debt reduces S&P's estimated residual enterprise value available to unsecured debtholders to the extent that S&P's expected recovery for the rated unsecured debt is now in the 10% to 30% range. S&P has not made changes to its simulated default scenario assumptions. Ratings List Micron Technology Inc. Corporate credit rating B/Negative/-- Ratings Downgraded To From -- ---- $1.3 bil. Sr. Un Sec. Nts B- B Recovery rating 5 4 MILACRON INC: Files for Bankruptcy, to Sell Biz to Investors ------------------------------------------------------------ Milacron Inc. has reached an agreement in principle with Avenue Capital Group and certain funds or accounts managed by DDJ Capital Management LLC -- which together hold approximately 78% of the company's 11-1/2% Senior Notes -- in connection with a comprehensive financial restructuring of the company. $80-Mil. DIP Loan from Avenue Capital, DDJ The proposed restructuring includes a commitment by Avenue Capital and DDJ to enter into an $80 million debtor-in-possession term loan facility, which will provide Milacron with $40 million in new funds. It also contemplates that Avenue Capital and DDJ, together with eligible Noteholders who accept an invitation to participate in the transaction, would purchase substantially all of the company's assets. In return for the assets, the agreement contemplates that, among other things, the participating Noteholders will repay the full debtor-in-possession facilities, including a new revolver, assume certain of the company's ordinary course liabilities and provide additional consideration to Noteholders who do not participate in the acquisition. The acquisition is intended to permit Milacron to continue as a going concern with substantially less debt. Bankruptcy Filings in Ohio, Canada Despite aggressive cost reduction and ongoing capacity rationalization over the past several years, severely reduced sales and orders in recent months -- precipitated by the ongoing credit crisis and deteriorating global economic conditions -- have impacted liquidity to the point that Milacron elected to voluntarily file for Chapter 11 protection in the Southern District of Ohio in Cincinnati and an ancillary proceeding in Canada. The filings enable Milacron to implement the restructuring and continue to operate its business in the normal course. The filings include Milacron's Canadian and U.S. operations only and should not affect the company's European, Asian or any other non-North American operations. "Pursuit of these transactions is a positive step that is in the best interests of the company, our employees, customers, suppliers and other constituents," said Dave Lawrence, Milacron president and chief executive officer. "Avenue Capital and DDJ's continued support is indicative of their faith in Milacron's brands, products and people, each helping to create value in the marketplace. This process will allow the business to withstand current economic conditions as part of a new enterprise with a healthy balance sheet." $55,000,000 DIP Loan from GECC In addition to the $80 million DIP facility with Avenue Capital and DDJ, Milacron has received a $55 million DIP revolving credit facility from General Electric Capital Corporation, which replaces the company's pre-petition revolver. Availability under the new revolver is subject to a borrowing base formula. The DIP facilities are subject to approval by the bankruptcy court. "We appreciate the ongoing loyalty and support of our employees," Lawrence said. "Their dedication and hard work are critical to our success and integral to the future of the company. I would also like to thank our customers, suppliers and business partners for their continued support during this process." The agreement in principle is subject to certain conditions, including execution and delivery of a mutually satisfactory definitive asset purchase agreement as well as bankruptcy court approval. Upon execution of a definitive purchase agreement, Milacron will solicit competing bids from other potential purchasers and conduct a sales process approved by the bankruptcy court. Milacron's assets would be sold to the bidder submitting the highest and best offer. First incorporated in 1884, Milacron Inc. (Pink Sheets:MZIA) -- http://www.milacron.com/-- is a global supplier of plastics- processing technologies and industrial fluids, with major manufacturing facilities in North America, Europe and Asia. MILACRON INC: Case Summary & 35 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Milacron Inc., Debtor 4165 Half Acre Road Batavia, OH 45103 Bankruptcy Case No.: 09-11235 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Cimcool Industrial Products Inc. 09-11236 Milacron Marketing Company 09-11237 Milacron Plastics Technologies Group, Inc. 09-11238 D-M-E Company, Inc. 09-11239 Milacron Canada Ltd. 09-11241 Milacron Capital Holdings B.V. 09-11244 Type of Business: The Debtor supplies plastics-processing technologies and industrial fluids, with major manufacturing facilities in North America, Europe and Asia. First incorporated in 1884, Milacron is also manufactures synthetic water- based industrial fluids used in metalworking applications. See: http://www.milacron.com Chapter 11 Petition Date: March 10, 2009 Court: Southern District of Ohio (Cincinnati) Judge: J. Vincent Aug Jr. Debtor's Counsel: Kim Martin Lewis, Esq. kim.lewis@dinslaw.com Patrick Burns, Esq. patrick.burns@dinslaw.com Dinsmore & Shohl LLP 255 East Fifth Street Cincinnati, OH 45202 Tel: (513) 977-8458 Counsel to the CCAA Proceeding: Torys LLP Restructuring and Financial Advisor: Conway, Del Genio, Gries & Co., LLC Banker and Financial Advisor: Rothschild Inc. Claims Agent: Kurtzman Carson Consultants LLC CCAA Monitor: RSM Richter Inc. Estimated Assets: $500 million to $1 billion Estimated Debts: $500 million to $1 billion The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Fanuc Trade Debt $6,699,000 Osamu Kawamonzen Overseas Sales Division 3580 Shibokusa Aza-komanba Yamanshi 401-05, Japan Bosch Rexroth Corp. Trade Debt $757,805 Parveen Gupta 2315 City Line Road Bethleham, PA 18017 McSwain Mfg. Corp. Trade Debt $706,969 Ken Bertrand 189 Container Place Cincinnati, OH 45246 Polimold Industrial S/A Trade Debt $616,360 Estrada Dos Casa 4585-B Alvarenga SBCAMPO - SP Brazil CEP 09840-000 Wittmann, Inc. Trade Debt $523,385 Dave Preusse One Technology Park Dr. Torrington, CT 06790-2594 Chen Hsong Machinery Trade Debt $489,510 Viox Services Inc. Trade Debt $392,232 Arcelormittal (ISG) Trade Debt $388,419 Ort Tool and Die Corp. Trade Debt $379,535 Lamina Bronze Trade Debt $351,521 K.S. Mould Parts Co., Ltd. Trade Debt $347,154 Fitzpatrick Mfg. Co. Trade Debt $219,095 DC Repair Inc. Jim O'Neal Trade Debt $213,855 JH Industries Inc Trade Debt $203,701 ADGO Enginering & CN Trade Debt $197,620 Univar USA Inc. Trade Debt $195,200 Tempco Electric Heater Trade Debt $193,102 Maguire Products Trade Debt $185,924 Xaloy Trade Debt $176,736 Crowe Horwath LLP Trade Debt $172,305 Rex Materials Group Trade Debt $171,635 Oracle Corporation Trade Debt $164,801 Ohio Screw Products Trade Debt $163,690 Maruto Hasegawa Trade Debt $163,475 Aetna, Inc Trade Debt $163,185 Eaton Hydraulic Trade Debt $161,898 Utensili Super Abrasivi Trade Debt $160,000 Leemah Holdings Ltd. Trade Debt $156,334 Hotset Corp. Trade Debt $153,260 South Shore Tool & Die Trade Debt $153,106 Milwaukee Gear Trade Debt $152,789 Arizona Chemical Corp. Trade Debt $147,032 Edro Specialty Steels Inc. Trade Debt $146,932 Douce Hydro Inc. Trade Debt $146,216 Siemens Energy & Auto Trade Debt $140,911 Uddeholm K K Trade Debt $137,363 Industrial Motion Co Trade Debt $132,535 Multiject LLC Trade Debt $131,728 Pension Benefit Guaranty Unknown Corporation The petition was signed by David E. Lawrence, president and chief executive officer. MME LLC: U.S. Trustee Sets Section 341(a) Meeting for April 9 ------------------------------------------------------------- The U.S. Trustee of Region 17, will convene a meeting of creditors in MME, LLC's Chapter 11 case on April 9, 2009, at 3:00 p.m., at 300 Las Vegas Blvd., South, Room 1500, Las Vegas, Nevada. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Las Vegas, Nevada, MME, LLC filed for Chapter 11 protection on March 4, 2009, (Bankr. D. Nev. Case No.: 09-12931 Kelly J. Brinkman, Esq. at Goold Patterson Ales & Day represents the Debtor in its restructuring efforts. The Debtor has estimated assets of $1 million to $10 million and estimated debts of $10 million to $50 million. MONACO COACH: Negotiates with Lenders on Use of Cash Collateral --------------------------------------------------------------- Monaco Coach Corp., said it has negotiated an agreement with the secured lenders Bank of America N.A. and Ableco Finance LLC to use cash representing collateral for the lenders' secured claims, Bill Rochelle of Bloomberg reported, citing the company's "first day" motions. Monaco Coach wrote in papers submitted to the U.S. Bankruptcy Court for the District of Delaware that it is still in discussions for a secured loan to finance the Chapter 11 reorganization intended to sell the business. Bank of America, as agent, is owed $36.8 million on a working capital loan while Ableco, as agent, is owed $36 million on a term loan. Chief Financial Officer P. Martin Daley, Bloomberg relates, said bankruptcy became necessary in view of declining consumer demand and the difficulty purchasers encounter in finding financing. A fired worker filed a class-action complaint seeking damages for the mass layoffs earlier this month. About Monaco Coach Monaco Coach Corporation (PINKSHEETS: MCOA), a leading national manufacturer of motorized and towable recreational vehicles, is ranked as the number one producer of diesel-powered motorhomes. Dedicated to quality and service, Monaco Coach is a leader in innovative RVs designed to meet the needs of a broad range of customers with varied interests and offers products that appeal to RVers across generations. Headquartered in Coburg, Oregon, with manufacturing facilities in Oregon and Indiana, the Company offers a variety of RVs, from entry-level priced towables to custom-made luxury models under the Monaco, Holiday Rambler, Safari, Beaver, McKenzie, and R-Vision brand names. The Company operates motorhome-only resorts in California, Florida, Nevada and Michigan. As of September 27, 2008, the Company had $442.1 million in total assets and $208.8 million in total liabilities. Monaco Coach Corporation and its affiliates filed for Chapter 11 on March 5 (Bankr. D. Del., Lead Case No. 09-10750). Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, was tapped as counsel. NAILITE INT'L: Auction Sale of All Assets Scheduled for April 8 --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved proposed procedures for the sale of substantially all of the assets of Nailite International, Inc., at an auction on April 8. The Court will convene a sale hearing on April 13. On February 26, 2009, the Debtor entered into an asset purchase agreement with Premier Exterios, LLC. Premier Exteriors proposed to acquire the assets for a total purchase consideration, calculated as of the Closing Date, equal to: (i) obligations in the amount of $8.0 million outstanding as of the Petiton Date including the outstanding principal balance of the Notes, plus the amount of any accrued and unpaid interest payable through the Auction Date; plus (ii) cash in the amount of $650,000; plus (iii) assumption of certain liabilities. If at least one Qualified Bid, other than that of the Purchaser, is received and is determined by the Debtor to be higher or otherwise better than the bid of Purchaser as set forth in the Asset Purchase Agreement, the Debtor will conduct an auction which will take place at 12:00 Noon (prevailing Eastern Time) on April 8, 2009, at the offices of of Potter Anderson & Corroon LLP, 1313 North Market Street, 6th Floor, in Wilmington, Delaware, 19801. Objections to the sale, if any, must be in writing and filed with the Bankruptcy Court and served on the Notice Parties not later than April 9, 2009, at 4:00 p.m. (prevailing Eastern Time). Any party that wishes to take part in this process and submit a bid for the Acquired Assets must submit its competing bid prior to April 6, 2009, at 12:00 Noon (prevailing Eastern Time) to: (i) counsel to the Debtor: Potter Anderson & Corroon LLP Attn: Steven M. Yoder, Esq. 1313 North Market Street, 6th Floor Wilmington, Delaware 19801 (ii) counsel to the Proposed Purchaser: Drinker Biddle & Reath LLP Attn: Andrew C. Kassner, Esq. Howard A. Cohen, Esq. 1100 N. Market Street Suite 1000, Wilmington, DE 19801-1254 (iii) counsel to the Official Committee of Unsecured Creditors: Lowenstein Sandler Attn: Sharon L. Levine, Esq. Thomas A. Pitta, Esq. 65 Livingston Avenue, Roseland New Jersey 07068 The sale of the Acquired Assets will be on an "as is, where is" basis. A full-text copy of the approved Bid Procedures are available at: http://bankrupt.com/misc/NailiteInternational.BidProcedures.pdf About Nailite International Headquartered in Miami, Florida, Nailite International Inc. -- http://www.nailiteinternational.com-- produces injection polypropylene based cedar and masonry replica siding. The Debtor supplies residential construction and remodeling markets through various building materials and siding distributors. Nailite International filed for Chapter 11 on Feb. 13, 2009 (Bankr. D. Del., Case No. 09-10526). Gabriel R. MacConaill, Esq., and Steven M. Yoder, Esq., at Potter Anderson & Corroon LLP, have been tapped as counsel. AlixPartners LLP is also on-board as restructuring adviser. In its bankruptcy petition, the company estimated assets and debts of $50 million to $100 million. PACIFIC ENERGY: Owes $452 Million to Secured Creditors ------------------------------------------------------ Pacific Energy Resources Ltd., filed for Chapter 11 on March 8, owing $452 million to secured creditors who made first- and second-lien loans enabling acquisition of properties in 2006 and 2007, Bloomberg's Bill Rochelle reported. According to the report, the properties are offshore near California and Alaska. Some of the secured loan went into default in March 2008. In addition to the secured obligations, the companies owe $31.7 million on subordinated notes and what amounts to a $25.2 million secured claim owing to an affiliate of Chevron Corp., the holder of the majority working interest and the operator of the California properties. As reported by yesterday's Troubled Company Reporter, 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. About $9.6 million of the DIP loan would be available on an interim basis, Bill Rochelle said. The company said that the DIP financing combined with its operating revenue will provide sufficient liquidity to fund working capital, meet ongoing obligations and ensure that normal operations continue without interruption during its restructuring. The company recorded revenues of $226.2 million in 2008. Headquartered in Long Beach, California, Pacific Energy Resources Ltd. -- http://www.pacenergy.com-- engage in the acquisition and development of oil and gas properties, primarily in the United States. The company and seven of its affiliates filed for Chapter 11 protection on March 8, 2009 (Bankr. D. Del. Lead Case No. 09- 10785). James E. O'Neill, Esq., Kathleen P. Makowski, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Debtors in their restructuring efforts. The Debtors proposed Rutan & Tucker LLP as their corporate counsel; Schully, Roberts, Slattery & Marino as special oil and gas counsel; Devlin Jensen as Canadian counsel; Zolfo Cooper as financial advisor; Lazard Freres & Co. LLC and Albrecht & Associates Inc. as investment bankers; and Omni Management Group LLC as noticing and claims agent. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million each. PACIFIC ENERGY: Can Access $9.5 Million DIP Facility on Interim --------------------------------------------------------------- The Hon. Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware authorized Pacific Energy Resources Ltd. and its affiliated debtors to obtain, on an interim basis, $9,500,000 in postpetition financing under the senior secured superpriority priming debtor-in-possession credit and guaranty agreement with J. Aron Company, as lead arranger, syndication and administrative agent; and Silver Point Finance LLC as collateral agent. Judge Carey also authorized the Debtors to use cash collateral securing repayment of secured loans to the lenders in accordance to the proposed DIP budget. A hearing is set for April 8, 2009, at 11:00 a.m. (Eastern Time) to consider final approval of the motion. Objections, if any, are due April 1, 2009. Prepetition Credit Facilities Pacific Energy Resources Ltd. entered into a credit and guaranty agreement dated Nov. 30, 2006, as amended from time to time, with J. Aron, as administrative agent, which is secured by a first priority, senior lien on substantially all of PERL's personal property. Approximately $39,100,000 in principal obligations were outstanding under the agreement. Furthermore, Pacific Energy Alaska Operating LLC entered into a first lien credit agreement dated Aug. 24, 2007, as amended from time to time, with Silver Point, as administrative agent, and J. Aron, as documentation agent, which is secured by a first priority, senior lien on substantially all of PEAO's personal assets. Approximately $90,900,000 in principal obligations were outstanding under the agreement. Laura Davis Jones, Esq., at Pachulski Stang Zieh & Jones LLP, the Debtors defaulted under the prepetition credit facilities starting in late March 2008, due to a several of factors, including the drastic fall in the price of crude oil in the last calendar quarter of 2008, and the stress on the Debtors' cash flow worsened. The Debtors and the prepetition lenders entered into forbearance agreements on Dec. 19, 2008, Ms. Jones relates. The last of the forbearance periods expired on Feb. 17, 2009, and on the same date, the prepetition lenders sent a letter stating that the Debtors are in default under the credit facilities, she says. The Debtors' estimated liabilities as of March 8, 2009, exclusive of accrued and unpaid interest: A. Pacific Energy Resources Ltd. Creditor Estimated Amount Type -------- ---------------- ---- prepetition lenders $361,100,000 secured subordinated unsecured $31,700,000 unsecured unsecured lender $1,000,000 unsecured unsecured obligations $4,000,000 unsecured B. Pacific Energy Alaska Operating LLC Creditor Estimated Amount Type -------- ---------------- ---- prepetition lenders $412,900,000 secured Chevron $25,200,000 secured guaranty of subordinated $31,700,000 unsecured unsecured noteholder unsecured obligations $9,000,000 unsecured The salient terms of the DIP facility: Borrowers: PERL, PEAR and PEAO. Guarantors: The remaining Debtors and all subsidiaries of the Debtors. DIP Administrative Agent: J. Aron DIP Collateral Agents: J. Aron, with respect to the assets of PERL and its subsidiaries other than PEAR and PEAO; Silver Point, with respect to the assets of PEAR and PEAO. DIP Credit Facility: A senior multi-draw revolving credit facility in the amount of up to $40,000,000 in new money loans, plus two term loans in the amount of (a) $44,199,560 to satisfy the outstanding prepetition obligations under the beta facility; and (b) 98,446,809 to satisfy the outstanding prepetition obligations under the Alaska first lien facility. DIP Lenders: J. Aron, other prepetition lenders who may agree to participate, and certain other lenders as may be approved by the DIP administrative agent. Use of Proceeds: To finance working capital, capital expenditures and other general corporate purposes, and to satisfy all outstanding obligations under the beta facility and the Alaska first lien facility. Maturity: Earlier of (a) September 10, 2009; (b) the effective date of the Debtors' chapter 11 plan; (c) the date a sale or sales of substantially all of the Debtors' assets are consummated under section 363 of the Bankruptcy Code; and (d) the occurrence of an event of default. Interest: Borrowings under the DIP Facility shall be at the annual rate equal to 10.50% plus the greater of the Adjusted Eurodollar Rate and 4.00% per annum. Default Pricing: 2.00% above the regular applicable rate. Commitment Fee: 0.75% per annum on the unused portion of the DIP Facility, payable monthly in arrears. Facility Fee: 2.50% of the Revolving Loan Commitment, payable at Closing, pro rata to the DIP Lenders. The DIP agreement contains customary and appropriate events of default. The DIP lender will be granted superpriority administrative expenses claims status over all and any administrative claims against the Debtors and unsecured claims against their estate. A full-text copy of the senior secured superpriority priming debtor-in-possession credit and guaranty agreement is available for free at: http://researcharchives.com/t/s?3a2e A full-text copy of the DIP budget is available for free at: http://ResearchArchives.com/t/s?3a2d Headquartered in Long Beach, California, Pacific Energy Resources Ltd. -- http://www.pacenergy.com-- engage in the acquisition and development of oil and gas properties, primarily in the United States. The company and seven of its affiliates filed for Chapter 11 protection on March 8, 2009 (Bankr. D. Del. Lead Case No. 09- 10785). James E. O'Neill, Esq., Kathleen P. Makowski, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Debtors in their restructuring efforts. The Debtors proposed Rutan & Tucker LLP as their corporate counsel; Schully, Roberts, Slattery & Marino as special oil and gas counsel; Devlin Jensen as Canadian counsel; Zolfo Cooper as financial advisor; Lazard Freres & Co. LLC and Albrecht & Associates Inc. as investment bankers; and Omni Management Group LLC as noticing and claims agent. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million each. PARTY CITY: Section 341(a) Meeting Slated for April 7 in Calif. --------------------------------------------------------------- The U.S. Trustee of Region 15, will convene a meeting of creditors in Party City of San Diego's Chapter 11 case on April 7, 2009, at 2:00 p.m., at Sixth Floor, Suite 630, 402 W. Broadway, San Diego, California. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in San Diego, California, Party City of San Diego and its debtor-affiliates filed for Chapter 11 protection on March 4, 2009, (Bankruptcy S.D. Calif. Lead Case No.: 09-02734) Christopher Celentino, Esq. at Duane Morris LLP represents the Debtors in their restructuring efforts. The Debtors listed estimated assets of less than $50,000 and estimated debts of $1 million to $10 million. PHILADELPHIA NEWSPAPERS: Gets Court OK to Spend Up to $1.15MM ------------------------------------------------------------- The Associated Press reports that Philadelphia Newspapers has received the approval of the U.S. Bankruptcy Court for Eastern District of Pennsylvania to spend up to $1.15 million until its next bankruptcy hearing on March17. According to The AP, the next hearing would be about a dispute between Philadelphia Newspapers and some creditors over how to finance operations during the bankruptcy reorganization. Philadelphia Newspapers, LLC -- http://www.philly.com/-- owns and operate numerous print and online publications in the Philadelphia market, including the Philadelphia Inquirer, the Philadelphia Daily News, several community newspapers, the region's number one local Web site, philly.com, and a number of related online products. The Company's flagship publications are the Inquirer, the third oldest newspaper in the country and the winner of numerous Pulitzer Prizes and other journalistic recognitions, and the Daily News. Philadelphia Newspapers and its debtor-affiliates filed for Chapter 11 bankruptcy protection on February 22, 2008 (Bankr. E.D. Pa. Case No. 09-11204). Proskauer Rose LLP is the Debtors' bankruptcy counsel, while Lawrence G. McMichael, Esq., at Dilworth Paxson LLP is the local counsel. The Debtors' financial advisor is Jefferies & Company Inc. The Debtors listed assets and debts of $100 million to $500 million. PLANET ORGANIC: In Talks With Lenders for Covenant Relief --------------------------------------------------------- Planet Organic Health Corp. disclosed that pursuant to a Term Loan Agreement dated November 30, 2007, it has breached a debt ratio covenant for the quarter ended December 31, 2008. Planet is in continuing discussions with its lenders with respect to the renegotiation of its debt covenants and anticipates that any events of default will be waived by the lenders, although there is no certainty of this and the revised terms of any new debt covenants are unknown at this time. Planet said it is current with all short term and long term debt obligations to its lenders. Last week, Planet announced financial results for the second quarter ended December 31, 2008. Sales for the quarter were $32.1 million compared to $27.5 million in 2007, an increase of 16.8%. EBITDASX was $1.3 million compared to $1.8 million in 2007, a decrease of $500,000, and cash flow from operations before non- cash working capital adjustments decreased by only $200,000 from 2007. Summary of Q2 Fiscal 2009 Financial Results Fiscal 2009 Fiscal 2008 ----------- ----------- Sales $32,139,724 $27,505,473 Cost of goods sold $19,630,528 $16,344,749 Gross profit $12,803,138 $11,381,766 Operating expenses $15,632,164 $11,110,086 EBITDASX $1,331,640 $1,842,030 (Loss) income before tax ($2,829,026) $271,680 Tax (recovery) ($12,700) $170,000 Net (loss) income ($2,816,326) $101,680 Cash flow from operations (before non-cash working capital adjustments) $1,029,536 $1,236,898 "I am pleased with our EBITDASX under the current extreme economic environment. Pre-tax losses were primarily driven by foreign exchange loss ($2,388,677) on conversion of our U.S. denominated debt, which is a non-cash item. Our largest divisions, Planet Organic Market and Mrs Green's both continue to show positive same store sales growth, which is extraordinary in this environment" reports Darren Krissie, CFO. Based in Edmonton, Planet Organic Health Corp. (CA:POH) -- http://www.planetorganichealthcorp.com/-- is a natural products industry company, comprising manufacturing, distribution and retail. Planet Organic is listed on the TSX Venture Exchange as a Tier One company. Planet Organic operates 10 natural food supermarkets throughout Canada under the Planet Organic Market banner and eleven natural food supermarkets in the U.S. under the Mrs Green's Natural Markets banner. The company also operates 43 natural health outlets under the Sangster's Health Centre banner and eight natural health outlets under the Healthy's and Planet Organic Living banners. Another Planet Organic division, Trophic Canada, is the country's leading manufacturer of natural supplements. The company has a total of 61 stores throughout Canada and eleven in the U.S. and has more than 650 employees. PORT BARRE: S&P Downgrades Rating on $185 Mil. Facilities to 'B' ---------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its debt rating on Port Barre Investments LLC's (PBI; d/b/a Bobcat Gas Storage) $185 million credit facilities to 'B' from 'B+'. The outlook remains negative. The '3' recovery rating, which remains unchanged, indicates that lenders can expect a meaningful (50%- 70%) recovery in the event of a payment default. "The rating action follows our review of a further cost and schedule overrun on the construction of the natural gas storage project, the anticipated infusion of $25.3 million in additional sponsor equity, and a revised financial model," said Standard & Poor's credit analyst Mark Habib. The overrun in construction costs and schedule comes despite an optimistic forecast in December citing a high proportion of fixed costs. That and the marginally weaker financials outweighed the positive impact of the additional liquidity provided by the equity infusion. The negative outlook reflects potential for increases in future uncommitted project construction costs over the next 12 months to exceed the established contingency, and for construction delays that would further delay revenue generation and risk storage contract cancellations, and potentially, covenant milestones. The negative outlook on PBI reflects the potential for further construction cost and schedule overruns in the next 12 months, which would increase leverage if financed through additional debt. Specific triggers include increased leverage that raises the total debt above $12 million per bcf, or failure to deliver on its August 2009 schedule date. S&P could also lower the ratings if a shift in market fundamentals supports lower storage rates while a significant percentage of the project's storage remains uncontracted, or if the project has difficulty securing storage contracts at rates similar to its current agreements in the upcoming planning season. S&P could revise the outlook to stable if projected construction costs remain within budget and construction continues to progress on schedule. As construction risks subside, and with significant storage capacity under firm storage contracts, the rating could gain positive momentum. QUEBECOR WORLD: Plan Filing Period Extended Until Month-end ----------------------------------------------------------- Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York signed a bridge order extending: -- the deadline by which Quebecor World (USA), Inc., and its debtor affiliates have exclusive rights to file a plan of reorganization until March 30, 2009, and -- the deadline by which the Debtors have exclusive right to solicit acceptances of that plan until May 29, 2009. Quebecor World (USA), Inc., and its debtor affiliates were engaged in discussions with the Official Committee of Unsecured Creditors, the Ad Hoc Committee of Noteholders, and the Debtors' Prepetition Lenders regarding the formulation of a consensual reorganization plan, and the Debtors adjourned the hearing on their request to extend the exclusive periods to March 4, 2009. The Court, accordingly, extended the Exclusive Filing Period through March 9, and the Exclusive Solicitation Period through May 8. The March 30 extension will allow discussions on the formulation of the reorganization plan to continue. Meanwhile, the Honorable Justice Robert Mongeon of the Quebec Superior Court of Justice extended the stay period and stay termination date under the Canadian Companies' Creditors Arrangement Act until May 31, 2009. Justice Mongeon also ruled that Quebecor World, Inc., will be relieved of any obligation to call and hold an annual meeting of shareholders on or before June 30, 2009. The CCAA Court directed QWI to hold the shareholders' meeting on or before September 30, 2009, as extended from time to time by orders of the Canadian Court. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW) -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina and the British Virgin Islands. Ernst & Young, Inc., the monitor of Quebecor World Inc., and its affiliates' reorganization proceedings under the Canadian Companies' Creditors Arrangement Act, filed a petition under Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court for the Southern District of New York on September 30, 2008, on behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The chapter 15 case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at Allen & Overy LLP, in New York, serves as counsel to the chapter 15 petitioner. QWI and certain of its subsidiaries commenced the CCAA proceedings before the Quebec Superior Court (Commercial Division) on January 20, 2008. The following day, 53 of QWI's U.S. subsidiaries, including Quebecor World (USA), Inc., filed petitions under Chapter 11 of the U.S. Bankruptcy Code. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy before the U.S. Bankruptcy Court for the Southern District of New York (Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP, represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. QWI is the only entity involved in the CCAA proceedings that is not a Debtor in the Chapter 11 Cases. As of June 30, 2008, Quebecor World's unaudited consolidated balance sheet showed total assets of US$3,412,100,000 total liabilities of US$4,326,500,000 preferred shares of US$62,000,000 and total shareholders' deficit of US$976,400,000. QUEBECOR WORLD: Sued by Former Affiliate Over Name Use ------------------------------------------------------ Quebecor Inc. filed a lawsuit against Quebecor World, Inc., a little more than a year after asking its former affiliate to change its name and logo, La Presse Affaires reported on March 5, 2009. According to the report, Quebecor Inc. brought the lawsuit before The Honorable Judge Robert Mongeon of the Quebec Superior Court of Justice to force QWI to stop using the name and logo associated with the Peladeau family. The Peladeau family is a major stockholder in Quebecor Inc. and QWI. The lawsuit, the report said, will be heard by Judge Mongeon on March 16. "The documents are not public yet but the presentation of the request will be held March 16," Isabelle Dessureault, vice president of public affairs of Quebecor Media, Inc., confirmed to the news agency. Since QWI filed for bankruptcy under the U.S. Bankruptcy Code and the Canadian Companies' Creditors Arrangement Act on January 21, 2008, Quebecor Inc. has tried to disassociate itself from the bankrupt company. Ms. Dessureault told La Presse Affaires that there is still much confusion between Quebecor Inc. and Quebecor World, which is why the lawsuit was filed. "When Pierre Karl and Erik Peladeau decided to leave the Board of Quebecor World in December 2008, some people thought they left [Quebecor Inc.]." The report related that Quebecor Inc. still holds 23.27% shares and 75.12% of voting rights of Quebecor World. Quebecor Inc., the report added, has not indicated that it expected to recover its shares to Quebecor World after the restructuring process completed before the U.S. and Canadian courts. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW) -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina and the British Virgin Islands. Ernst & Young, Inc., the monitor of Quebecor World Inc., and its affiliates' reorganization proceedings under the Canadian Companies' Creditors Arrangement Act, filed a petition under Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court for the Southern District of New York on September 30, 2008, on behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The chapter 15 case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at Allen & Overy LLP, in New York, serves as counsel to the chapter 15 petitioner. QWI and certain of its subsidiaries commenced the CCAA proceedings before the Quebec Superior Court (Commercial Division) on January 20, 2008. The following day, 53 of QWI's U.S. subsidiaries, including Quebecor World (USA), Inc., filed petitions under Chapter 11 of the U.S. Bankruptcy Code. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy before the U.S. Bankruptcy Court for the Southern District of New York (Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP, represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. QWI is the only entity involved in the CCAA proceedings that is not a Debtor in the Chapter 11 Cases. As of June 30, 2008, Quebecor World's unaudited consolidated balance sheet showed total assets of US$3,412,100,000 total liabilities of US$4,326,500,000 preferred shares of US$62,000,000 and total shareholders' deficit of US$976,400,000. REC PLANTATION: Fitch Affirms Ratings on 2016 Floating-Rate Notes ----------------------------------------------------------------- Fitch Ratings has affirmed REC Plantation Place Limited's class A secured floating-rate notes, due 2016, and downgraded the transaction's remaining four tranches as shown below. The class A Rating Outlook has been revised to Negative from Stable and a Recovery Rating of 'RR4' has been assigned to the class E notes. The rating actions are: -- GBP289.93m class A FRN (XS0262650889) affirmed at 'AAA'; Outlook revised to Negative from Stable -- GBP39.72m class B FRN (XS0262650962) downgraded to 'AA-' (AA minus) from 'AA'; Outlook Negative -- GBP44.69m class C FRN (XS0262651002) downgraded to 'BBB-' (BBB minus) from 'A-' (A minus); Outlook Negative -- GBP39.72m class D FRN (XS0262651184) downgraded to 'B-' (B minus) from 'BBB-' (BBB minus); Outlook Negative -- GBP14.9m class E FRN (XS0262651341) downgraded to 'CCC' from 'BB'; assigned 'RR4' REC Plantation Place Limited is the securitization of a single loan secured by a Grade A office property located in the City of London. As of the January 2009 interest payment date, the loan remains in default as a result of the ongoing breach of the loan- to-value covenants. The most recent valuation, conducted in December 2008, states the value of Plantation Place at GBP385m, 12.5% less than at the last valuation date only three months earlier. As a result, the A-note and whole loan LTV ratios were reported at 107.14% and 113.72%, far above the maximum-LTV covenants at 77.68% and 82.14%. The rent roll remains almost unchanged since the closing of the transaction in August 2006. The property remains fully let to predominantly strong tenants on long leases. The reported interest coverage ratios remained unchanged at 1.24x (on the securitized A-note) and 1.15x (on the whole loan), compared to covenants at 1.15x and 1.10x, respectively. Fitch's main concerns remain the ability of the borrower to repay its debt upon maturity, as well as the uncertainty surrounding any potential restructuring of the loan. Fitch will continue to monitor the performance of the transaction. ROBBINS BROS: Wants to Hire William Blair as Investment Banker -------------------------------------------------------------- Robbins Bros. Corporation asks for authority from the U.S. Bankruptcy Court for the District of Delaware to employ William Blair & Company, L.L.C., as investment banker. William Blair will: a. assist the Debtor's management in pursuing a strategy for a Financing Transaction, as debtor-in-possession financing, an M&A Transaction, as a sale of the Debtor's assets, or a Restructuring Transaction; b. assist the Debtor in preparing a descriptive memorandum that describes the Debtor's operations and financial condition, and includes current financial data and other appropriate information; c. assist the Debtor in contacting and eliciting interest from those possible participants in Financing Transactions, M&A Transactions and Restructuring Transactions; d. participate with the Debtor and its counsel in negotiations relating to any Possible Transaction with parties in interest, including, without limitation, any current or prospective creditors of, holders of equity in, or claimants against the Debtor; e. assist the Debtor and its other professionals in reviewing and analyzing the terms of any proposed Possible Transaction, in responding thereto and, if directed, in evaluating alternative proposals for a Possible Transaction, whether in connection with a confirmed Chapter 11 Plan or otherwise; f. attend meetings of creditor groups, official constituencies and other interested parties, as necessary; g. to the extent requested by the Debtor, assist the Debtor in raising capital and refinancing or amending any of its existing debt facilities; h. participate in meetings of the board of directors of the Debtor at which a Possible Transaction is to be considered and, as appropriate, report to the board of directors with respect thereto; i. participate in hearings before the Bankruptcy Court and provide relevant testimony in connection with any Possible Transaction or any proposed Plan; j. perform those additional services agreed to in writing between the Debtor and Blair. Geoffrey A. Richards, co-head of the special situations and restructuring group of William Blair, will lead all of the day-to- day aspects of this assignment. Mr. Richards tells the Court that his firm will be paid: a) A monthly fee in the amount of $90,000 paid in advance, beginning on Dec. 23, 2008, and continuing every thirty days thereafter until the termination of Blair's engagement. b. Upon consummation of a Financing Transaction, a fee equal to $700,000; provided that Blair will be paid an additional fee calculated by multiplying 2.5% by the total gross proceeds raised or committed in excess of $12 million. c. Upon the consummation of any M&A Transaction, the Debtor will pay Blair a cash fee: * For Transaction Value up to $30.0 million: the Minimum Fee, plus * For Transaction Value from $30.0 million to $37.5 million: 2.5% of incremental value, plus * For Transaction Value from and in excess of $37.5 million: 3.0% of incremental value. d. Upon the consummation of any Restructuring Transaction, a cash fee equal to the $700,000 Minimum Fee. Debtor has paid Blair approximately $459,000 in fees and expenses prior to the petition date. There are no amounts owed to Blair as of the petition date. Mr. Richards assures the Court that 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: Posts $248.5 Million Net Loss in Fourth Quarter 2008 --------------------------------------------------------------- SIRIUS XM Radio released its full year 2008 results, including pro forma full year 2008 revenue of $2.44 billion up 18% over 2007 pro forma revenue of $2.06 billion; total subscribers of more than 19 million up 10% from 2007 subscribers of 17.3 million; and positive pro forma adjusted income from operations in the fourth quarter of 2008. "In the fourth quarter 2008, the company's first full quarter of combined operations, SIRIUS XM made remarkable financial progress," said SIRIUS CEO Mel Karmazin. "For the first time in company history, we reached positive pro forma adjusted income from operations of $32 million, as compared with a loss of $224 million one year ago. Fourth quarter 2008 revenue of $644 million grew 16% over the year ago quarter while total cash operating expenses declined by 22%, a clear demonstration of our focus on improving profitability. Despite challenges in the overall economy and in the auto sector, we look forward to continuing to deliver on the synergies of the merger. We are also very pleased to report that we have closed the second and final phase of the previously announced investment by Liberty Media Corporation. These transactions resolve the uncertainty surrounding the company's and its subsidiaries' debt maturing in 2009." SIRIUS XM ended the fourth quarter 2008 with 19,003,856 subscribers, up 10% from 17,348,622 subscribers at year end 2007. In the fourth quarter 2008, pro forma average revenue per subscriber (ARPU) grew to $10.60 from $10.42 in 2007. The monthly self-pay customer churn rate was 1.8% in the fourth quarter 2008, as compared with 1.7% in the fourth quarter 2007. Fourth quarter 2008 pro forma revenue was $644 million, up 16% from fourth quarter 2007 pro forma revenue of $558 million. Subscriber acquisition costs (SAC) per gross subscriber addition was $70 in the fourth quarter of 2008, an improvement of 16% over the $83 in SAC per gross subscriber addition in the fourth quarter of 2007. In the fourth quarter 2008, SIRIUS XM achieved positive pro forma adjusted income from operations of $31.8 million as compared with a pro forma adjusted loss from operations of ($224.1) million in the fourth quarter 2007. The pro forma fourth quarter 2008 net loss was ($248.5) million as compared with a pro forma net loss of ($405.0) million in the fourth quarter 2007. On a GAAP basis, the fourth quarter 2008 net loss was ($245.8) million or ($0.08) per share. SIRIUS XM will hold a conference call on March 12, 2009, at 8:00 a.m. ET to discuss the results. Investors and the press can listen to the conference call via the company's Web site and on its satellite radio service by tuning to SIRIUS channel 126 or XM channel 90. Fourth Quarter 2008 Versus Fourth Quarter 2007 For the fourth quarter of 2008, SIRIUS XM recognized total pro forma revenue of $644.1 million compared to $557.5 million for the fourth quarter of 2007. This 15.5%, or $86.6 million, increase in revenue was driven by the net increase in subscribers of 1,655,234 from the fourth quarter of 2007. Total ARPU for the three months ended December 31, 2008 was $10.60, compared to $10.42 for the three months ended December 31, 2007. The increase was driven by the start of our "Best of" package sales, most of which were at the $16.99 price point, and a lower mix of prepaid subscriptions from automakers in vehicles which have not sold through to end customers. These factors were partially offset by an increase in the mix of discounted OEM promotional trials, subscriber winback programs, second subscribers and a decline in net advertising revenue per average subscriber. In the fourth quarter 2008, the company achieved positive pro forma adjusted income from operations of $31.8 million, compared to an adjusted loss from operations of ($224.1) million for the fourth quarter of 2007 (refer to the reconciliation table of net loss to adjusted income (loss) from operations). This decrease was driven by the increase in total revenue of $86.6 million and a $219.8 million decrease in operating expenses. Programming and content costs decreased by 4%, or $3.9 million, over the prior year's quarter as savings began to be realized. Revenue share and royalties expense decreased by 25%, or $40.8 million, over the prior year's quarter. The prior year quarter included a one time charge of $52 million in connection with the decision by the Copyright Royalty Board in January 2008 setting royalty rates for the performance of sound recordings effective January 1, 2007. Adjusting for this charge, royalties would have been up 10%, or $11.6 million, from the fourth quarter of 2007. Customer service and billing costs increased 3%, or $2.0 million, from the prior year's quarter, reflecting higher subscriber totals and improved scale efficiencies. Sales and marketing costs declined 34%, or $42.0 million, over the prior year's quarter due to reduced advertising and cooperative marketing spend, offset in part by higher customer retention spending. Sales and marketing costs were 13% of revenue in the fourth quarter of 2008 compared to 22% of revenue in the fourth quarter 2007. Subscriber acquisition costs (SAC) declined 27%, or $48.0 million, and as a percent of revenue improved from 32% to 21% over the prior year's quarter. This improvement was driven by 27% lower gross additions in the fourth quarter. SAC, as adjusted, per gross subscriber addition improved by 16% to $70 from $83 for the three months ended December 31, 2008 and 2007, respectively. The decrease was primarily driven by lower retail and OEM subsidies due to better product economics. General and administrative costs decreased 20%, or $12.6 million, and declined as a percent of revenue from 12% to 8% over the prior year's quarter, reflecting lower merger costs and savings from the integration of administrative functions. Engineering, design and development costs decreased 27%, or $3.9 million, due to lower product development costs and merger savings. Year Ended December 31, 2008 Versus Year Ended December 31, 2007 For the year ended December 31, 2008, SIRIUS XM recognized total pro forma revenue of $2.4 billion compared with $2.1 billion for the year ended December 31, 2007. This 18.4%, or $378.1 million, increase in revenue was primarily driven by a $367.6 million increase in subscriber revenue resulting from the net increase in subscribers of 1,655,234 during 2008. Total ARPU for the year ended December 31, 2008, was $10.51, compared to $10.61 for the year ended December 31, 2007. The decrease was driven by an increase in the mix of discounted OEM promotional subscriptions, subscriber winback programs, second subscribers and a decline in net advertising revenue per average subscriber. The company's pro forma adjusted loss from operations decreased ($429.2) million to ($136.3) million for the year ended December 31, 2008, from ($565.5) million for the year ended December 31, 2007 (refer to the reconciliation table of net loss to adjusted income (loss) from operations). This decrease was driven by an 18.4%, or $378.1 million, increase in revenue and a 4.2%, or $129.5 million, decrease in expenses. Programming and content costs for the year ended December 31, 2008, increased 11%, or $45.2 million, including a one-time payment to a programming provider of $27.5 million due upon completion of the merger. Excluding this one-time payment, programming costs increased by 4% or $17.7 million. Revenue share and royalties expense increased by 19%, or $74.9 million, over the prior year, maintaining a flat percentage of revenue of approximately 20% in 2008 and 2007. Customer service and billing costs increased 12%, or $26.8 million, from the prior year due to a larger subscriber base, mitigated by scale efficiencies. Sales and marketing costs declined 17%, or $70.8 million, due to reduced advertising and cooperative marketing spend, offset in part by higher customer retention spending. As a percentage of revenue, sales and marketing costs improved from 20% in 2007 to 14% in 2008. Subscriber acquisition costs declined nearly 12%, or $77.6 million, and as a percentage of revenue improved from 32% to 24%. This improvement was primarily driven by a 14% improvement in SAC per gross addition due to improved product economics and lower retail and OEM subsidies. Subscriber acquisition costs also declined as a result of the 5% decline in gross additions in the year. SAC, as adjusted, per gross subscriber addition improved by 14% to $74 from $86 for the years ended December 31, 2008 and 2007, respectively. The decrease was primarily driven by lower retail and OEM subsidies due to better product economics. General and administrative costs decreased 2%, or $4.8 million, and declined as a percent of revenue, reflecting one time costs in connection with the merger in the prior year and early integration savings. Engineering, design and development costs decreased 17%, or $10.4 million, due to fewer OEM platform launches and lower product development costs. 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. SPANSION INC: Can Use Lenders' Cash Collateral Until March 29 ------------------------------------------------------------- Judge Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware, on an interim basis, authorized Spansion Inc. and its affiliates to use cash collateral in an amount not to exceed $150,000,000, until March 29, 2009. Judge Carey permitted the Debtors to: (i) carry over any amounts not expended for a particular line item in any week to succeeding weeks; (ii) expend up to 15% more than the amounts set forth in a particular line item for a specific week so long as the aggregate expenditures during the period covered by the Order do not exceed the total shown on the Budget for that interim period by more than 15%; and (iii) pay amounts incurred from and after the Petition Date, in addition to or for categories not listed in the Budget with the prior consent of the prepetition agent and the indenture trustee for the Floating Rate Notes. A final hearing on the request will be held on March 23, 2009. As adequate protection, Judge Carey ordered the Debtors to grant replacement liens to the Prepetition Lenders on all property and assets of the Debtors, and all proceeds, rents, or profits that were subject to the Prepetition Lender Liens and additional liens to the Prepetition Lenders on all of the unencumbered assets. To the extent that the aggregate diminution in value of the Prepetition Lenders' interests in the Prepetition Lender Collateral from and after the Petition Date, reduces the value of the Prepetition Lender Adequate Protection Liens below the outstanding balance of the Prepetition Revolver Indebtedness, then the Prepetition Lenders will be granted superpriority claims under Section 507(b) of the Bankruptcy Code, and the Prepetition Lender Superpriority Claim will have priority in payment over any and all administrative expense claims of any kind. Judge Carey directed the Debtors to grant replacement liens to the FRN Noteholders on all of their property and assets, and all proceeds, rents, or profits that were subject to the FRN Noteholders' liens on the Noteholder Collateral, and additional liens to the FRN Noteholders on the New Collateral to secure an amount of the Prepetition Noteholder Indebtedness equal to the aggregate diminution in the value of the FRN Noteholders' interests in the Noteholder Collateral occurring from and after the Petition Date. To the extent that the aggregate diminution in value of the FRN Noteholders' interests in the Noteholder Collateral from and after the Petition Date reduces the value of the Noteholder Adequate Protection Liens below the outstanding balance of the Prepetition Noteholder Indebtedness, then the FRN Noteholder will be granted superpriority claims under Section 507. The Debtors are also authorized to continue to pay all interest, fees and expenses on account of the Prepetition Revolver Indebtedness as required in the Prepetition Credit Agreement Documents. A full-text copy of the Interim Cash Collateral Order is available for free at: http://ResearchArchives.com/t/s?3a26 About Spansion Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc. and four affiliates filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09- 10690). Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. As of Sept. 30, 2008, Spansion disclosed total assets of $3,840,000,000, and total debts of $2,398,000,000. SPANSION INC: Court Approves Protocol to Limit Securities Trading ----------------------------------------------------------------- Spansion Inc. and its debtor affiliates have recently incurred, and are currently incurring, significant net operating losses. To protect and preserve their valuable tax attributes, including without limitation, current year NOLs and available NOL carryforwards in excess of $379,000,000, the Debtors sought and obtained the Court's authority to establish, on an interim basis, procedures regarding the trading of Spansion equity securities that must be complied with before trades or transfers become effective. In addition, the Debtors sought and obtain the Court's interim approval to establish notice and sell-down procedures regarding claims against the estates. The Debtors assert that if no trading restrictions regarding equity securities and no sell-down procedures regarding claims are imposed by the Court, unrestricted trading or transfers of equity securities and claims could severely limit or even eliminate their ability to use their Tax Attributes, a valuable asset of their estates. The Court will convene a final hearing on the Debtors' request on March 23, 2009. Michael R. Lastowski, Esq., at Duane Morris, LLP, in Wilmington, Delaware, proposed attorney for the Debtors, relates that unrestricted trading of claims against the Debtors and Spansion equity securities could adversely affect the Debtors' Tax Attributes if: (i) too many 5% or greater blocks of Spansion equity securities are created or too many shares are added to or sold from those blocks at any time during the preceding three-year or shorter period, as applicable -- the Testing Period -- an "ownership change" within the meaning of Section 382 of title 26 of the United States Code, the Internal Revenue Code of 1986, as amended, is triggered prior to consummation and outside of the terms of a confirmed Chapter 11 plan; or (ii) the beneficial ownership of claims against the Debtors that are currently held by "Qualified Creditors" under the applicable tax regulations is transferred, prior to consummation of a plan, and those claims would be converted under a plan of reorganization into a 5% or greater block of the stock of the reorganized Debtors. Mr. Lastowski asserts that the Tax Attributes are of significant value to the Debtors and their estates because the Debtors generally can carry forward their NOLs to offset their future taxable income for up to 20 taxable years, thereby potentially reducing their future aggregate tax obligations and freeing up funds to meet working capital requirements and service debt. Spansion currently takes the position that is subject to an existing $13,300,000 annual limitation under Section 382 of the Internal Revenue Code, on the use of a portion of its NOLs as a result of a March 18, 2008 "ownership change." Generally, an "ownership change" occurs if the percentage of the stock of a corporation owned by one or more 5% shareholders has increased by more than 50 percentage points over the lowest percentage of stock owned by the Shareholders, generally at any time during the testing period. On an interim basis, Judge Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware approved the procedures in part relating to the trade in of Spansion equity securities: (a) Any person or entity who currently is or becomes a Substantial Shareholder will file with the Court, and serve on counsel to the Debtors, a notice of status, on or before the later of (i) 20 calendar days after the effective date of the notice of entry of the interim order or (ii) 10 calendar days after becoming a Substantial Shareholder. (b) At least 30 calendar days prior to effectuating any transfer of equity securities that would result in an increase in the amount of Spansion Stock beneficially owned by a Substantial Shareholder or would result in a person or entity becoming a Substantial Shareholder, that Substantial Shareholder will file with the Court, and serve on counsel to the Debtors, advance written notice, of the intended transfer of equity securities. (c) At least 30 calendar days prior to effectuating any transfer of equity securities that would result in a decrease in the amount of Spansion Stock beneficially owned by a Substantial Shareholder or would result in a person or entity ceasing to be Substantial Shareholder, that Substantial Shareholder will file with the Court, advance notice of the intended transfer of equity securities. (d) The Debtors will have 30 calendar days after receipt of a Notice of Proposed Transfer to file with the Court and serve on the Substantial Shareholder an objection to any proposed transfer of equity securities described in the Notice of Proposed Transfer on the grounds that the transfer may adversely affect the Debtors' ability to utilize their Tax Attributes. If the Debtors file an objection, that transaction will not be effective unless approved by a final nonappealable order of the Court. If the Debtors do not object within the 30-day period, the transaction may proceed solely as set forth in the Notice of Proposed Transfer. Judge Carey held that a Substantial Shareholder refers to any person or entity which beneficially owns at least 7,673,713 shares, representing approximately 4.75% of all issued and outstanding shares, of Spansion common stock. Beneficial Ownership will be determined in accordance with applicable rules under Section 382, as amended, Treasury Regulations promulgated, and rulings issued by the Internal Revenue Service, and thus, to the extent provided, from time to time will include, without limitation: (a) direct and indirect ownership; (b) ownership by the holder's family members and persons acting in concert with that holder to make a coordinated acquisition of stock; and (c) an option to acquire Spansion Stock. An "Option" to acquire stock includes any contingent purchase, warrant, convertible debt, put, stock subject to risk of forfeiture, contract to acquire stock, or similar interest, regardless of whether it is contingent or otherwise not currently exercisable. About Spansion Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc. and four affiliates filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09- 10690). Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. As of Sept. 30, 2008, Spansion disclosed total assets of $3,840,000,000, and total debts of $2,398,000,000. SPANSION INC: Gets Court OK to Hire Epiq as Claims & Notice Agent ----------------------------------------------------------------- Spansion Inc. and its debtor-affiliates sought and obtained authority from the U.S. Bankruptcy Court for the District of Delaware to employ Epiq Bankruptcy Solutions, LLC, as claims, noticing, and balloting agent, nunc pro tunc to the Petition Date. Epiq specializes in providing data processing services to Chapter 11 debtors in connection with administration and reconciliation of claims, as well as administration of plan balloting. Dario Sacomani, executive vice president and chief financial officer of Spansion, Inc., tells the Court that the Debtors have thousands of creditors and other parties-in-interest, many of whom are expected to file proofs of claim. According to Mr. Sacomani, noticing and receiving, docketing and maintaining proofs of claim would impose heavy administrative and other burdens upon the Court and the Office of the Clerk of the United States Bankruptcy Court for the District of Delaware. Rule 2002 of the Federal Rules of Bankruptcy Procedure generally regulates what notices must be provided to the creditors and other parties-in-interest in bankruptcy cases. Pursuant to Rule 2002-1(f) of the Local Rules for the District of Delaware, in cases with more than 200 creditors, a debtor is required to file with the Court a motion to retain a notice or claims agent. The Debtors believe that the employment of Epiq as claims agent will: * relieve the Clerk's Office of a significant administrative burden; * avoid delay in processing of proofs of claim and interests; * reduce legal fees that would be otherwise incurred in connection with the retrieval of proof of claim copies from the Clerk's Office and responding to numerous claim-related inquiries; and * reduce costs of notice to parties and provide an efficient medium to consummate case information. As claims and noticing agent, Epiq will: a. assist the Debtors and the Clerk's Office with noticing and claims handling; b. assist the Debtors with the compilation, administration, evaluation and production of documents and information necessary to support a restructuring effort; c. prepare and serve those notices required in the Debtors' Chapter 11 cases; d. assist with the publication of required notices, as necessary; e. within three business days after the service of a particular notice, prepare for filing with the Clerk's Office an affidavit of service; f. receive, record and maintain copies of all proofs of claim and proofs of interest filed in the Chapter 11 cases; g. create and maintain the official claims registers; h. receive and record all transfers of claims pursuant to Bankruptcy Rule 3001(e); i. maintain an up-to-date mailing list for all entities who have filed proofs of claim or requests for notices in the Chapter 11 cases; j. assist the Debtors with the administrative management, reconciliation and resolution of claims; k. mail and tabulate ballots for purposes of plan voting; l. provide administrative assistance, upon the Debtors' request, in connection with the preparation and maintenance of the Debtors Schedules of Assets and Liabilities, Statements of Financial Affairs and other master lists and databases of creditors, assets and liabilities; m. assist with the production of reports, exhibits and schedules of information for use by third parties; n. provide other technical and document management services of a similar nature requested by the Debtors or the Clerk's office; o. facilitate or perform distributions; p. maintain a call center; and q. any other functions required by Local Rule 2002-1(f). The Debtors pay Epiq with a $50,000 retainer to be applied immediately in satisfaction of obligations incurred in connection with the services performed by Epiq pursuant to the parties' Service Agreement, a full-text copy of which is available for free at: http://bankrupt.com/misc/SpansionEpiq_ServicesAgreement.pdf The Debtors will indemnify and hold Epiq, its affiliates and each of their officers, members, directors, agents, consultants and employees harmless, to the fullest extent permitted by applicable law, from and against any losses, claims, damages, liabilities, costs, to which any Indemnified Person may become subject or involved in any capacity arising out of or relating their agreement. Daniel C. McElhinney, executive director of Epiq Bankruptcy Solutions LLC, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Spansion Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc. and four affiliates filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09- 10690). Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. As of Sept. 30, 2008, Spansion disclosed total assets of $3,840,000,000, and total debts of $2,398,000,000. SPANSION INC: Hires Sitrick as Communications Consultants --------------------------------------------------------- Spansion Inc. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Sitrick and Company Inc., as their communications consultants nunc pro tunc to the Petition Date, pursuant to Sections 327(a) and 328(a) of the Bankruptcy Code. The Debtors have selected Sitrick because of its extensive expertise, experience and knowledge in the field of communications consulting and because of its knowledge about and understanding of their businesses, gained through providing communications consulting services prepetition. Formed in 1989, Sitrick specializes in addressing sensitive business situations that require communications strategies targeted to a variety of constituencies, including customers, employees vendors, shareholders, bondholders, and the media. As communications consultants, Sitrick will: 1. develop and implement communications programs and related strategies and initiatives for communications with the Debtors' key constituencies regarding the Debtors' operations and progress through the Chapter 11 process; 2. develop public relations initiatives for the Debtors to maintain public confidence and internal morale during the Chapter 11 process; 3. prepare press releases and other public statements for the Debtors, including statements relating to major Chapter 11 events; 4. prepare other forms of communication to the Debtors' key constituencies and the media; and 5. perform other communications consulting services as may be requested by the Debtors. The Debtors assert that the services provided by Sitrick will not be unnecessarily duplicative of those provided by any of their other professionals. The Debtors propose to pay Sitrick based on the firm's current hourly rates that ranges from $185 to $895. Specifically, the individuals anticipated to provide services to the Debtors and their present hourly rates are: Professional Rate ------------ ---- Maya Pogoda $550 Lance Ignon $550 David Satterfield $495 Meghan Fancler $185 Alex Dickel $185 Claire Wolf $185 The Debtors will also reimburse Sitrick for necessary expenses incurred, which include travel, photocopying, delivery service, postage, vendor charges and other out-of-pocket expenses incurred in providing professional services. According to the Debtors, they have paid Sitrick a retainer of $60,000 and a refundable expense advance of $10,000, on January 30, 2009. On February 18, 2009, the Debtors paid an additional $45,000. The Debtors tell the Court that Sitrick has used the advance payments to credit their account, and has reduced the balance of the credit available to them by the amount of charges. The Debtors relate they have paid Sitrick $115,000 within 90 days before the Petition Date. Pursuant to the Engagement Letter, the parties agree that in no event will Sitrick be indemnified in the case of their own bad faith, self-dealing, breach of fiduciary duty, gross negligence, reckless or willful misconduct, or malpractice. Any request by Sitrick for indemnification will be subject to prior approval of the Court. Maya Pogoda, a member of Sitrick and Company Inc., assures the Court that her firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). About Spansion Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc. and four affiliates filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09- 10690). Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. As of Sept. 30, 2008, Spansion disclosed total assets of $3,840,000,000, and total debts of $2,398,000,000. SPANSION INC: Receives Delisting Notice From NASDAQ --------------------------------------------------- Spansion Inc. has received a staff determination notice from the NASDAQ Stock Market stating that the company's common stock is subject to delisting from the NASDAQ Global Select Market in accordance with NASDAQ Marketplace Rules 4300, 4450(f) and IM- 4300. The notice was issued as a result of, among other factors, the company's filing for relief under chapter 11 of the U.S. Bankruptcy Code on March 1, 2009. The company said it intends to request a hearing before the NASDAQ Listing Qualifications Panel to appeal the decision. Pending a decision by the hearing panel, Spansion's common stock will remain listed on the NASDAQ Global Select Market. There can be no assurance that the hearing panel will grant the company's request for continued listing. About Spansion Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc. and four affiliates filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del., Lead Case No. 09- 10690). Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. As of Sept. 30, 2008, Spansion disclosed total assets of $3,840,000,000, and total debts of $2,398,000,000. ST. LOUIS INDUSTRIAL: Moody's Downgrades Ratings on 2009A Bonds ---------------------------------------------------------------- Moody's Investors Service has downgraded the ratings on the St. Louis Industrial Development Authority's St. Louis Convention Center Headquarters Hotel Project's (Project) $98 million Series 2000A senior lien revenue bonds from Caa2 to Ca and assigned a negative outlook to the rating. The downgrade reflects the continued weak operational performance of the St. Louis Convention Center Headquarters Hotel, the Renaissance Grand Hotel and Suites Hotel, and Moody's opinion that the recovery value of the hotel will likely be lower than the outstanding Series 2000A bond balance. In January 2009, the Series 2000A bondholders initiated foreclosure proceedings after the hotel's previous owners, HRI Properties and Housing Horizons, a subsidiary of Kimberly-Clark Corporation (A2 senior unsecured rating), failed to pay the full $3.5 million interest payment due on December 15, 2008 resulting in a default. The project engaged Jones Lang LaSalle, a commercial real-estate firm, to help improve operational and financial performance. On February 9, 2009, the hotel was auctioned off. The Trustee, UMB Bank, on behalf of the bondholders, was the only bidder for the outstanding bond balance, $98 million. Although the bondholders have taken over ownership, the hotel will continue to operate under the management of Renaissance Hotel Management Company, LLC, an affiliate of Marriott International, Inc. (Baa2 senior unsecured rating). Since opening in 2003, Moody's notes that the financial and operating performance of the $277 million hotel has been significantly weaker than the original forecast. Although the project has been generating enough revenue to cover operating expenses, revenues have not been sufficient to cover debt service and to fully fund the furniture and fixtures account. Moody's also notes that the hotel's financial performance will continue to remain highly stressed given the economic downturn, slowing convention center sales, and new or recently renovated competitive hotel supply. The hotel's poor operating and financial performance stems from a number of national and local factors. National factors include the disruption of the hotel industry post September 11th; a national and regional economic slowdown; a general deterioration of hotel market conditions, both nationally and in the St. Louis regional market; a decline in business spending on meetings and conventions. Another factor was the demise of the TWA hub at Lambert-St. Louis International Airport and American Airlines' significant subsequent reduction in air service to St. Louis. On a local level, the inability of the CVC to obtain the anticipated convention activity at the America's Convention Center resulted in lower occupancy than originally anticipated. In addition, the high cost labor work rules and the governance structure of the CVC in the past led to lower convention center utilization. The project bonds were issued in 2000 to finance a portion of the costs of construction and renovation of the headquarters hotels for the America's Center Convention Center in downtown St. Louis. The four-star Renaissance Grand Hotel and Suites consists of two hotels, a 916-room convention headquarters hotel and a 165-room all-suites hotel. The Series 2000A senior lien revenue bond ratings were assigned by evaluating factors believed to be relevant to the credit profile of the Project 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, and iv) the issuer's history of achieving consistent operating performance and meeting budget or financial plan goals. These attributes were compared against other issuers both within and outside of the Project's core peer group and the Series 2000A senior lien revenue bond ratings are believed to be comparable to ratings assigned to other issuers of similar credit risk. The last rating action was on November 10, 2005 when a Caa2 rating was assigned to the Series 2000A bonds. ST MARY'S HOSPITAL: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: St. Mary's Hospital, Passaic, N.J. 350 Boulevard Passaic, NJ 07055 Bankruptcy Case No.: 09-15619 Type of Business: The Debtor operates a hospital. Chapter 11 Petition Date: March 9, 2009 Court: District of New Jersey (Newark) Judge: Morris Stern Debtor's Counsel: Joseph Lubertazzi, Jr., Esq. jlubertazzi@mccarter.com McCarter & English Four Gateway Center, PO Box 652 100 Mulberry Street Newark, NJ 07102-4004 Tel: (973) 622-4444 Estimated Assets: $50 million to $100 million Estimated Debts: $50 million to $100 million The Debtor's Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Armanti Financial Services LLC $1,873,877 2 Broad Street Bloomfield NJ 07003 Oxford Health Plans $819,725 Office of the General Counsel 48 Monroe Turnpike 48 Monroe Turnpike Trumbull CT 06611 Trumbull CT 06611 Passaic Valley Water $613,715 PO Box 11393 Newark NJ 07101 Medtronic USA Inc. $486,298 Eclipsys Corp. $412,632 Comprehensive Equipment Mgt $411,943 Boston Scientific Corp. $410,835 N.J. Dept. of Labor & Workforce $374,976 MD-X Solutions, Inc. $372,453 MMS-A Medical Supply Company $334,093 J.H. Cohn LLP $321,135 Amerisourcebergen Drug Corp $316,248 Verizon Communications $295,185 Sleep Services of America NE $243,309 Hess Corporation $226,469 J & J Health Care Systems $207,397 Respironics Hosptial Capital $203,753 Abbott Vascular $196,555 Navix Diagnostix, Inc. $188,465 Roche Diagnostics Corp. $191,756 The petition was signed by Colene Y. Daniel, M.S., M.P.H. FACHE, president and chief executive officer. SUNSET AVIATION: Files Chapter 7 Liquidation in Delaware -------------------------------------------------------- Sunset Aviation Inc., has sought bankruptcy protection without attempting to reorganize. The company filed a petition for Chapter 7 liquidation on March 6 before the U.S. Bankruptcy Court for the District of Delaware. While a debtor-in-possession case in Chapter 11 allows management to maintain control while it restructures the business, a Chapter 7 case gives up control of the estate to a trustee, who will liquidate the assets. In its bankruptcy petition, the company estimated assets of less than $10 million and debt exceeding $100 million. Novato, California-based Sunset Aviation Inc. is an operator of jet and turbo-prop charter aircraft. The company was acquired in June 2007 by JetDirect Aviation Holdings Inc. (Bankr, D. Del., Case No. 09-10778). SYNCORA GUARANTEE: Moody's Downgrades Insurance Rating to 'Ca' -------------------------------------------------------------- Moody's Investors Service has downgraded to Ca from Caa1 the insurance financial strength ratings of Syncora Guarantee Inc. (formerly XL Capital Assurance Inc.) and Syncora Guarantee (U.K.) Ltd. In the same rating action, Moody's downgraded the provisional senior unsecured shelf rating of Syncora Holdings Ltd. to (P)C from (P)Ca and the rating of Twin Reefs Pass-Through Trust to C from Ca. The outlook for SG's insurance financial strength ratings is developing. Moody's ratings on securities that are guaranteed or "wrapped" by a financial guarantor are generally maintained at a level equal to the higher of a) the rating of the guarantor (if rated at the investment grade level), or b) the published underlying rating (and for structured securities, the published or unpublished underlying rating). The rating action was prompted by the large loss reserve and credit impairment charges taken by the company on its mortgage- related exposures during 4Q2008, which have resulted in a $2.4 billion statutory deficit at SG as of December 31, 2008. Moody's said that the company's capital position is now below minimum statutory capital regulations under New York law, which heightens the risk of regulatory action. Moody's notes that SG is attempting to reach a comprehensive settlement with its bank counterparties on certain exposures, including most of the company's insured ABS CDOs. The company also intends to repurchase wrapped RMBS securities from investors through a tender offer. In Moody's opinion, if the company is unable to reach such settlements in the near term, the company could be placed into rehabilitation or liquidated by the New York regulator. Moody's said that the developing outlook reflects the possibility of both positive and negative pressure on SG's insurance financial strength ratings. Moody's notes that most of Syncora's bank counterparties have signed a non-binding letter of intent to commute certain ABS CDO exposures. To the extent Syncora is able to commute these exposures under terms that are consistent with those outlined in Syncora's recent SEC filings, SG's insurance financial strength ratings could be confirmed or upgraded. If, however, the company is unable to execute a settlement that improves its capital adequacy profile, the insurance financial strength ratings would likely be downgraded to C. The downgrades of the ratings on Syncora's debt and preferred stock reflect the absence of dividend capacity at SG and the subordination of these instruments to policyholder claims. Moody's anticipates that any improvement in SG's capital adequacy profile achieved through the commutation or termination of troubled mortgage-related exposures will have minimal impact on the credit profile of the holding company over the near to medium term. List Of Rating Actions These ratings have been downgraded, with a developing outlook: * Syncora Guarantee Inc. -- insurance financial strength to Ca from Caa1; * Syncora Guarantee (U.K.) Ltd. -- insurance financial strength to Ca from Caa1. These ratings have been downgraded: * Syncora Holdings Ltd. -- provisional rating on senior debt to (P)C from (P)Ca; provisional rating on subordinated debt to (P)C from (P)Ca; and preference shares to C from Ca; * Twin Reefs Pass-Through Trust -- contingent capital securities to C from Ca. The last rating action related to Syncora was on October 24, 2008, when Moody's downgraded SG's insurance financial strength rating to Caa1 from B2. Syncora Holdings Ltd. (formerly Security Capital Assurance Ltd) is a Bermuda-domiciled holding company whose primary operating subsidiary, Syncora Gurantee Inc. (formerly XL Capital Assurance Inc.) provides credit enhancement and protection products to the public finance and structured finance markets throughout the United States and internationally. TAPIA DAIRY: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Tapia Dairy 3, L.L.C. 3913 Veribest Park Rd. Miles, TX 76861 Bankruptcy Case No.: 09-60049 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Tapia Pearsall, L.L.C. 09-60052 Ezequiel Alcala Tapia dba Tapia Dairy 09-60048 Tapia Dairy, Inc. 09-60051 Tapia Brothers, Inc. 09-60053 Chapter 11 Petition Date: March 5, 2009 Court: Northern District of Texas (San Angelo) Judge: Robert L. Jones Debtors' Counsel: Dana A. Ehrlich, Esq. danaehrlichlawoffice@yahoo.com Law Office of Dana Ehrlich P.O. Box 1831 San Angelo, TX 76902 Tel: (325) 655-5351 Fax: (325) 655-7089 Estimated Assets: $1 million to $10 million Estimated Debts: $10 million to $50 million The Debtors did not file a list of 20 largest unsecured creditors. TARGUS GROUP: Moody's Keeps 'Caa1' Rating; Gives Negative Outlook ----------------------------------------------------------------- Moody's Investors Service affirmed the Caa1 rating of Targus Group International, Inc. and changed the outlook to negative. The negative outlook reflects ongoing revenue and cash flow pressures due to difficult market conditions in the market for laptops and associated cases and consumer electronics, as well as poor liquidity. Following this rating action, the company's ratings will be withdrawn for business reasons. The ratings reflect very high leverage and weak interest coverage. The ratings also reflect significantly lower than anticipated demand for computer cases and accessories in the first quarter of fiscal 2009, as the global economy weakens further. Although this is also an opportunity for Targus, the growing popularity of cheaper ultraportables versus traditional laptops presents additional pressures. Partially offsetting significant macroeconomic pressures is the company's leading market position, albeit in a relatively narrow segment, as well as ongoing expense reduction initiatives. The affirmation of the ratings also reflects considerations of enterprise value in relation to outstanding debt. Moody's took these rating actions: -- Affirmed the Caa1 Corporate Family Rating; -- Affirmed the Caa1 Probability of Default Rating; -- Affirmed the B2 (LGD-2, 27%) rated first-lien secured bank facilities, which consist of a $40 million revolver due 2011 and $185 million term loan due 2012; -- Affirmed the Caa2 (LGD-4, 69%) rated $85 million second-lien secured term loan due 2013; The outlook for the ratings is negative. The previous rating action was on February 14, 2008, when Moody's changed the outlook to stable from negative. The Caa1 Corporate Family Rating was affirmed at that time. Targus Group International, Inc., based in Anaheim, California, designs, develops, and distributes notebook computer cases and computer accessories. The company sells its products to original equipment manufacturers, third-party distributors, and retailers worldwide. Targus generated revenue of about $505 million for the twelve months ended December 31, 2008. TARGUS GROUP: S&P Withdraws 'CCC+' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services said that it withdrew its ratings on Anaheim, California-based Targus Group International Inc., including the 'CCC+' corporate credit rating, at the company's request. TELEPLUS WORLD: Section 341(a) Meeting Set For April 13 ------------------------------------------------------- The U.S. Trustee of Region 21, will convene a meeting of creditors in Teleplus World, Corp.'s Chapter 11 case on April 13, 2009, at 1:30 p.m., at Claude Pepper Federal Bldg, 51 SW First Ave., Room 1021, Miami, Florida. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Miami-Lakes, Florida, Teleplus World, Corp. -- http://www.teleplusworld.com/en/-- provides telecommunications products and services including local lines, long distance, toll free and high speed internet services to customers in 53 distinct centrex serving areas. The Debtor filed for Chapter 11 protection on March 5, 2009, (Bankr. S.D. Fla. Case No.: 09-13799) Phillip M. Hudson, III, Esq. represents the Debtor in its restructuring efforst. The Debtor's financial condition as of Feb. 28, 2009, showed total assets of $10,825,743 and total debts of $21,244,618. TNS INC: Moody's Affirms Corporate Family Rating at 'B1' -------------------------------------------------------- Moody's Investors Service affirmed TNS Inc.'s B1 corporate family rating and stable outlook, and assigned a (P) B1 rating to the company's proposed $250 million senior secured first lien term loan. Proceeds from the proposed debt offering, and approximately $15 million of balance sheet cash, will be used to finance TNS' acquisition of VeriSign, Inc.'s Communication Services Group for approximately $230 million in cash. The company's B1 corporate family rating incorporates Moody's favorable view of TNS' acquisition of VeriSign's Communication Services Group, as this transaction should enhance its scale, diversification and market position, while maintaining strong pro forma credit metrics and good liquidity position. However, the rating is constrained by TNS' relatively small size, even pro forma for the proposed acquisition, in the highly competitive data communication and network services markets and the possibility of near-term integration challenges from the proposed acquisition of CSG (which is TNS' largest acquisition to- date), which has experienced declines in its financial performance over the last few years. In addition, given the current challenging macroeconomic environment, Moody's believes that TNS could also face declines in transaction volumes in its core domestic dial-up POS business, increase pricing pressure and prospects of continued consolidation in the telecommunication services industry, and to a lesser extent, customer churn in its financial services business. The stable outlook reflects Moody's expectation that TNS will continue to maintain its good liquidity and market position, and generate strong operating profits and free cash flows, which would be used to repay debt. The stable outlook also reflects Moody's expectation that TNS will be able to stabilize the underperformance of CSG and successfully integrate its operations without any material customer attrition. TNS, Inc. These ratings were affirmed: -- Corporate Family Rating - B1 -- Probability of Default Rating - B2 -- Transaction Network Services, Inc. This new rating is assigned: -- $250 million NEW Senior Secured Term Loan due 2014 - (P) B1 (LGD3, 33%) These ratings were affirmed with changes in LGD point estimates: -- $15 million Senior Secured Revolving Credit Facility due 2013 affirmed at B1 with LGD point estimate changed to LGD3, 33% from LGD3, 32% -- $178.5 million Senior Secured Term Loan due 2014 affirmed at B1 with LGD point estimate changed to LGD3, 33% from LGD3, 32% The provisional instrument rating is subject to closing of the transaction and Moody's review of all closing documents. The last rating action was on April 11, 2007 when Moody's lowered TNS' CFR senior to B1 from Ba3 and assigned B1 ratings to its $225 million senior secured term loan and $15 million senior secured revolver. TNS is a provider of business-critical data communication services to credit card, debit card, and automated teller machine transaction processors. TNS is also a provider of call signaling and database access services to the domestic telecommunications industry and of secure data and voice network services to the global financial services industry. For the last twelve months ended December 31, 2008, total revenues for standalone TNS were $344 million. TRUMP ENTERTAINMENT: Court Sets May 28 as General Claims Bar Date ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey has established May 28, 2009, at 4:00 p.m. (EST) as the last day for the filing of proofs of claim for all entities, other than governmental units, in TCI 2 Holdings, LLC, and its debtor- affiliates' bankruptcy cases. Governmental units have until September 4,2009, by 4:00 p.m. (EST) to file proofs of claim against any of the Debtors. Proofs of claim, together with any accompanying or supporting documentation, must be filed so as to be received no later than 4:00 p.m., Eastern Time, on the applicable bar date to: a) if sent by mail: The United States Bankruptcy Court for the District of New Jersey Attn: TCI 2 Holdings LLC Claims P.O. Box 2067 Camden, NJ 08101 b) if by hand or overnight carrier: The United States Bankruptcy Court for the District of New Jersey Attn: TCI 2 Holdings LLC Claims 401 Market Street, Camden, NJ 08101 About Trump Entertainment Based in Atlantic City, New Jersey, Trump Entertainment Resorts Inc. (NASDAQ: TRMP) -- http://www.trumpcasinos.com/-- owns and operates three casino hotel properties in Atlantic City, New Jersey, which include Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino, and Trump Marina Hotel Casino. The Company conducts gaming activities and provides customers with casino resort and entertainment. Donald Trump is a shareholder of the Company and, as its non- executive Chairman, is not involved in the daily operations of the company. The Company is separate and distinct from Mr. Trump's privately held real estate and other holdings. Trump Entertainment Resorts, TCI 2 Holdings, LLC and other affiliates filed for Chapter 11 on Feb. 17, 2009 (Bankr. D. N.J., Lead Case No. 09-13654). The Company has tapped Charles A. Stanziale, Jr., Esq., at McCarter & English, LLP, as lead counsel, and Weil Gotshal & Manges as co-counsel. Ernst & Young LLP is the Company's auditor and accountant and Lazard Freres & Co. LLC is the financial advisor. The company disclosed assets of $2,055,555,000 and debts of $1,737,726,000 as of Dec. 31, 2008. TRUMP ENTERTAINMENT: TCI Files Schedules of Assets & Liabilities ---------------------------------------------------------------- TCI 2 Holdings, LLC, filed with the U.S. Bankruptcy Court for the District of New Jersey, its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ------------- A. Real Property $0 B. Personal Property Unknown C. Property Claimed as Exempt D. Creditors Holding Secured Claims $492,318,582 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $0 ----------- ------------ TOTAL $0 $492,318,582 A full-text copy of TCI 2 Holdings, LLC's schedules of assets and liabilities is available at: http://bankrupt.com/misc/TCI2HoldingsLLC.Schedules.pdf About Trump Entertainment Based in Atlantic City, New Jersey, Trump Entertainment Resorts Inc. (NASDAQ: TRMP) -- http://www.trumpcasinos.com/-- owns and operates three casino hotel properties in Atlantic City, New Jersey, which include Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino, and Trump Marina Hotel Casino. The Company conducts gaming activities and provides customers with casino resort and entertainment. Donald Trump is a shareholder of the Company and, as its non- executive Chairman, is not involved in the daily operations of the company. The Company is separate and distinct from Mr. Trump's privately held real estate and other holdings. Trump Entertainment Resorts, TCI 2 Holdings, LLC and other affiliates filed for Chapter 11 on Feb. 17, 2009 (Bankr. D. N.J., Lead Case No. 09-13654). The company has tapped Charles A. Stanziale, Jr., Esq., at McCarter & English, LLP, as lead counsel, and Weil Gotshal & Manges as co-counsel. Ernst & Young LLP is the Company's auditor and accountant and Lazard Freres & Co. LLC is the financial advisor. The company disclosed assets of $2,055,555,000 and debts of $1,737,726,000 as of Dec. 31, 2008. TUSCANY HEIGHTS: Case Summary & 12 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Tuscany Heights LLC 77-900 Avenue of the States Palm Desert, CA 92211 Bankruptcy Case No.: 09-14197 Chapter 11 Petition Date: March 9, 2009 Court: Central District Of California (Riverside) Judge: Thomas B. Donovan Debtor's Counsel: Mark C. Schnitzer, Esq. mschnitzer@rhlaw.com Reid & Hellyer APC P.O. Box 1300 Riverside, CA 92502-1300 Tel: (951) 682-1771 The Debtor's financial conditions as of March 6, 2009: Total Assets: $5,032,272 Total Debts: $10,934,226 The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Vineyard Bank Lots 1-15 of $10,078,000 Attn: Cheri George Tract 28495, 1260 Corona Point Court Riverside Corona, CA 92879 1260 Court County, Ca; Tel: (951) 739-6343 secured: $5,000,000; senior lien: $25,971 Suresh Shah Breach of $250,000 73-345 Hwy 111, Ste. 100 contract Palm Desert, CA 92260 Tel: (760) 464-1531 Ly[e Realty Reimbursement $121,350 483 N Palm Canyon Drive Palm Springs, CA 92262 Tel: (760) 778-6200 Desert Gables Realty Commission for $43,350 sale Desert Water Agency Utilities $131 LaPaz Landscape February $500 landscaping Road maintenance SCE -- Common Areas SCE Utilities $175 Palm Springs Disposal Disposal Services $49 Services Verizon Verizon Utilities $48 City of Palm Springs Dust control Unknown Peter Jamieson Lease option Unknown Kenneth Owen Claims Unknown The petition was signed by Wesley Oliphant, managing member. VERASUN ENERGY: Plan Filing Period Extended Until May 31 -------------------------------------------------------- Judge Brendan Linehan Shannon of the U.S. Bankruptcy Court for the District of Delaware has extended the deadline by which Verasun Energy Corp. and its affiliates have exclusive rights to file a plan of reorganization until May 31, 2009. However, Judge Shannon said the Plan Filing Period will be further extended automatically to June 30, 2009, unless the Official Committee of Unsecured Creditors files an objection to the automatic extension by May 27, 2009. If the Committee files an objection, the objection will be heard at the June 3, 2009, omnibus hearing or at any other hearing as agreed to by the Debtors and the Committee. Accordingly, the Plan Period will be automatically extended until the Committee Plan Period Objection is resolved by agreement of the Debtors and the Committee or by final order of the Court. Judge Shannon has also extended the deadline by which the Debtors have exclusive rights to solicit acceptances of a plan until July 31, 2009. The Solicitation Period will be further extended automatically to August 31, 2009, unless the Committee objects to it. The Court's Order is without prejudice to the right of the Debtors to seek further extensions of the Exclusive Periods, and the right of any party-in-interest to seek reduction the Exclusive Periods for cause. Judge Shannon also extended the Debtors' deadline to assume or reject unexpired nonresidential property leases, through and including May 29, 2009. Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP, in Wilmington, Delaware, reported that as of March 3, 2009, no formal or informal objection or response to the Debtors' request were received. About VeraSun Energy Headquartered in Sioux Falls, South Dakota, VeraSun Energy Corp. -- http://www.verasun.comor http://www.VE85.com/-- produces and markets ethanol and distillers grains. Founded in 2001, the company has a fleet of 16 production facilities in eight states, with 14 in operation. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 31, 2008, (Bankr. D. Del. Case No. 08-12606) Mark S. Chehi, Esq. at Skadden Arps Slate Meagher & Flom LLP represents the Debtors in their restructuring efforts. AlixPartners LLP serves as their restructuring advisor. Rothschild Inc. is their investment banker and Sitrick & Company is their communication agent. The Debtors' claims noticing and balloting agent is Kurtzman Carson Consultants LLC. The Debtors' total assets as of June 30, 2008, was $3,452,985,000 and their total debts as of June 30, 2008, was $1,913,214,000. VeraSun Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). VERASUN ENERGY: To Assume and Assign 1,500 Contracts to Buyer ------------------------------------------------------------- VeraSun Energy Corp. and its affiliates notified interested parties to make offers to purchase any of the Debtors' assets, individually or as part of a package. The Debtors will conduct an auction for the Assets beginning on March 16, 2009, at the offices of Skadden Arps Slate Meagher & Flom, at One Rodney Square, P.O. Box 636, in Wilmington, Delaware, or at a later date to be determined by the Debtors. A full-text copy of the Auction Notice is available for free at: http://bankrupt.com/misc/VerSSaleNot.pdf Meanwhile, on March 6, 2009, the Debtors filed with the Court a proposed form of final sale order, a copy of which is available for free at: http://bankrupt.com/misc/VerSPropFinSale.pdf The Debtors have notified interested parties that they intend to assume and assign more than 1,500 unexpired lease or executory contracts to the successful bidder of their assets. The Debtors have assured the contract parties that the Debtors will pay a cure amount reflected on their records. The Debtors added that all postpetition amounts owing under Assumed Contracts will continue to be paid until an Assumed Contract's assumption and assignment. Notwithstanding, various parties filed objections to the Debtors' proposed cure amounts for the contracts they intend to assume pursuant to the sale. A schedule of affected contracts is available for free at: http://bankrupt.com/misc/VerSBidContracts.pdf Parties Object to Cure Amounts These parties object to the Debtors' proposed cure amounts for the contracts they intend to assume pursuant to the sale: -- White County, Indiana; -- Iowa Lakes Electric Cooperative; -- Dakota Valley Electric Cooperative, Inc.; -- Rognes Bros. Excavating, Inc.; -- Beemer Companies; -- Haas TCM Processing LLC; -- ICM, Inc.; -- BNSF Railway Company; -- Tri-County Electric Company; -- Kahler Electric; -- J.D. Streett and Company, Inc.; -- Axis Capital, Inc.; -- Northern Border Pipeline Company; -- GE Railcar Services Corporation; -- Federated Rural Electric Cooperative Association; -- WINBCO Tank Company; -- ShipXpress, Inc.; -- Barr Engineering Company; -- Hamilton Farm Bureau Cooperative, Inc.; -- Fagen, Inc.; -- Todd & Sargent; -- The City of Litchfield, Illinois; -- Kinder Morgan Interstate Gas Transmission LLC; -- Anadarko Energy Services; -- CSX Transportation, Inc.; -- HDR Engineering, Inc.; -- Dougherty Funding LLC; -- Northern Natural Gas Company; -- North West Rural Electric Cooperative; -- Northwestern Corporation; -- Cargill, Incorporated; -- Lessafre Yeast Corporation; -- Microsoft Coporation; and -- Interstate Power and Light Company. On behalf of White County, Michael K. McCrory, Esq., at Barnes & Thornburg LLP, in Indianapolis, Indiana, asserts that the only meaningful "cure," which would support assumption and assignment of the deal-specific economic incentives that White County agreed to provide, would be the construction and completion of an ethanol fuel production facility on a scale and with the particular characteristics previously proposed by the Debtor for the White County, Indiana site. Mr. McCrory contends that the Debtor is not capable of effecting the cure, and, upon information and belief, neither the stalking horse bidder nor any other prospective purchaser has made a commitment to do so. However, Mr. McCrory notes that White County remains willing to explore the availability of other similar, economic incentives with a purchaser of Debtors' assets, but in the interim, White County objects to the Notice. Accordingly, White County asks that the Court acknowledge the lack of assignability of the identified agreements under applicable law. On behalf of ILEC, Stephen W. Spence, Esq., at Phillips Goldman & Spence P.A., in Wilmington, Delaware, complains that the Debtors failed to include late charges amounting to $4,175 for the invoice of electricity provided from September 1 to October 1, 2008. With regard to Dakota, Mr. Spence relates that the Debtors failed to include the amount necessary to comply with an electric agreement between the parties. Pursuant to the Agreement with ILEC, the Debtors are required to furnish a security deposit amounting to two months of billing for the account. The Deposit would total approximately $428,000. As of the Petition Date, Mr. Spence tells the Court that the Debtors had not yet furnished the amount to Dakota. The City of Litchfield tells the Court that its contracts with the Debtors are excluded from the sale, and thus should not be assumed and assigned pursuant to the current auction. The other Objecting Parties complain that the Debtors' proposed cure amounts of their contracts are insufficient to cure the Debtors' actual monetary defaults under their contracts. The Objecting Parties assert these cure amounts: Fagen, Inc. $17,542,977 Cargill, Incorporated 16,579,326 Haas TCM Processing LLC 7,124,899 ICM, Inc. 4,263,829 Interstate Power and Light Company 1,726,308 Todd & Sargent 1,654,282 CSX Transportation 1,418,705 Kinder Morgan 1,060,009 Northern Border Pipeline Company 795,125 Rognes Bros. 783,927 Northwestern Corporation 617,085 Barr Engineering 491,323 Northern Natural Gas 477,708 BNSF Railway Company 477,002 GE Railcar 476,550 Dougherty Funding 424,929 HDR Engineering 406,892 Federated Rural 400,000 Tri-County Electric Company 318,356 WINBCO 278,561 Beemer Companies 222,524 North West Rural Electric 200,000 Microsoft Corporation 159,757 Lessafre 131,801 ShipXpress 66,687 Anadarko 54,358 Hamilton Farm 29,585 J.D. Streett and Company, Inc. 23,692 Axis Capital 4,249 In addition, Kahler Electric asserts that the cure amount of its contract with the Debtors should be $14,785 plus interest, attorneys' fees, costs and disbursements resulting from the Debtors' default under the contract. Furthermore, Fagen objects to the disposition of any cash proceeds received in connection with the sale of the VSE assets, including the remittance of any cash proceeds to the lenders under the VSE DIP Facility and the UBS Cash Collateral agreement, pending a final determination of the extent and priority of Fagen's mechanic's lien claims. Wells Fargo Reserves Rights to Sale Proceeds Wells Fargo Bank, N.A., as indenture trustee for the Debtors' 9 7/8% Senior Secured Notes, seeks to reserve its rights in the proceeds of the sale of the Debtors' assets. As of the Petition Date, the Trustee held valid and perfected first-priority liens and security interest in the VeraSun entities' property, plant and equipment. Postpetition, the Trustee obtained junior liens on the VeraSun entities' working capital assets as adequate protection for the priming of the Trustee's first priority liens on their property, plant and equipment. Wells Fargo contends that based upon its prepetition and postpetition liens, it has rights in the proceeds of the sale of the Debtors' assets. Qteros Objects to Sale of Debtors' Equity Interest Qteros, Inc., formerly known as SunEthanol, Inc., complains that the sales procedures do not indicate whether the Debtors will sell their 5,029,323 shares of Qteros Series A Preferred Stock. Francis A. Monaco, Jr., at Womble Carlyle Sandridge & Rice PLLC, in Wilmington, Delaware, points out that the asset purchase agreement the Debtors entered into with Valero Renewable Fuels Company LLC and Valero Energy Corporation refers to the Qteros Shares but did not list them as an "Acquired Asset." Mr. Monaco tells the Court that at the auction, there may be overbidding regarding the Valero APA, and the Qteros Shares may become the subject of standalone bids or bids for other groups of assets. He relates that on October 10, 2008, VSE entered into an Amended and Restated Right of First Refusal and Co-Sale Agreement, by and among Qteros, the Debtors, and certain other stockholders of Qteros, which prohibits the Debtors from transferring their shares of Qteros capital stock to a competitor of Qteros. When a proposed buyer is made known to Qteros, Qteros will promptly convene its board of directors, to determine whether that entity is a competitor, Mr. Monaco says. For these reasons, Qteros asks the Court to forbid any sale of the Qteros Shares to any person or entity, unless and until Qteros' Board of Directors determines that the proposed buyer is not a Competitor of Qteros. Dougherty Wants Proper Allocation of Sale Proceeds Among Debtors Dougherty Funding LLC previously made a loan to US Bio Marion LLC amounting to $90,000,000, which financed the construction of a 100-MGY ethanol refinery. To the extent that a bid covers multiple segments, or multiple Debtors' assets, and is not properly allocated, Dougherty asks that any bid that covers the assets be properly allocated. Moreover, to the extent that bids are allocated in a fashion or amount that Dougherty deems objectionable, Dougherty reserves its right to object. On behalf of Dougherty, Bonnie Glantz Fatell, Esq., at Blank Rome LLP, in Wilmington, Delaware, argues that bids should distinguish between assets subject to the liens of different first priority lenders to allow each secured creditor to determine whether and how to credit bid. About VeraSun Energy Headquartered in Sioux Falls, South Dakota, VeraSun Energy Corp. -- http://www.verasun.comor http://www.VE85.com/-- produces and markets ethanol and distillers grains. Founded in 2001, the company has a fleet of 16 production facilities in eight states, with 14 in operation. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 31, 2008, (Bankr. D. Del. Case No. 08-12606) Mark S. Chehi, Esq. at Skadden Arps Slate Meagher & Flom LLP represents the Debtors in their restructuring efforts. AlixPartners LLP serves as their restructuring advisor. Rothschild Inc. is their investment banker and Sitrick & Company is their communication agent. The Debtors' claims noticing and balloting agent is Kurtzman Carson Consultants LLC. The Debtors' total assets as of June 30, 2008, was $3,452,985,000 and their total debts as of June 30, 2008, was $1,913,214,000. VeraSun Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). VINCENT PITTS: Section 341(a) Meeting Set for March 31 ------------------------------------------------------ The U.S. Trustee of Region 11, will convene a meeting of creditors in Vincent Y. Pitts' Chapter 11 case on March 31, 2009, at 1:30 p.m., at 19 South Dearborn, Room 804, Chicago, Illinois. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Country Club Hills, Illinois, Vincent Y. Pitts filed for Chapter 11 protection on February 26, 2009, (Bankruptcy N.D. Ill. Case No.: 09-06250) Debra J. Vorhies Levine, Esq. represents the Debtor in its restructuring efforts. The Debtor listed estimated assets of $0 to $50,000 and estimated debts of $1,000,001 to $10,000,000. VISKASE COS: S&P Raises Corporate Credit Rating to 'CCC+' --------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its long- term corporate credit rating on Darien, Illinois-based Viskase Cos. Inc. to 'CCC+' from 'SD' (selective default). The outlook is stable. At the same time, Standard & Poor's raised the issue rating on the company's 11.5% senior secured notes due 2011 to 'CCC+' from 'CC' and removed the rating from CreditWatch, where it was placed with developing implications on Aug. 8, 2008. S&P also assigned a recovery rating of '3' to the notes, indicating the expectation of meaningful recovery (50% to 70%) in the event of a payment default. "The rating actions reflect our reassessment of credit quality and the noteholders' recovery prospects following the company's execution of an exchange offer for its outstanding 8% senior secured notes," said Standard & Poor's credit analyst Ket Gondha. S&P had lowered the corporate credit rating to selective default after Viskase completed a tender offer to exchange a portion of the then-outstanding 8% notes for cash or securities for a total value that was less than par. The ratings on Viskase reflect its vulnerable business risk profile as a producer in the highly competitive non-edible casings niche within the packaging industry and its narrow scope of operations. The ratings also take into account the company's highly leveraged financial risk profile since emerging from Chapter 11 bankruptcy protection in April 2003 and its limited liquidity. Good market positions in cellulosic and fibrous casings and diverse geographic sales are partially offsetting factors. With annual sales exceeding $275 million, Viskase is a global producer of non-edible cellulosic, fibrous, and plastic casings used to prepare and package processed meat products. The niche casings industry is characterized by intense price-based competition, particularly during periods of overcapacity. While excess capacity is currently at relatively lower levels and industry players have been increasing pricing, capacity additions or an unexpected demand shortfall in the current weak economic environment could entice industry players to sacrifice price as a way to recover volumes. VISTEON CORPORATION: Fitch Downgrades Issuer Default Rating to 'C' ------------------------------------------------------------------ Fitch Ratings has downgraded the Issuer Default Rating 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. A full list of the rating actions is provided below. 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'. W.R. GRACE: Court Approves Disclosure Statement ----------------------------------------------- W.R. Grace & Co., which has been in Chapter 11 protection for almost eight years, has received approval of the disclosure statement to its Chapter 11 plan. W.R. Grace may now solicit support, then seek confirmation, of its Chapter 11 plan. The approval by Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware, which filed for bankruptcy in 2001 due to 100,000 asbestos-poisoning claims, allows the company to begin the final chapter of its bankruptcy; securing a $1 billion loan and winning court approval of the reorganization plan in September. The Court has scheduled two-phase confirmation hearings: -- Hearings on June 22 to 25 to deal with objections by insurance companies; and -- Hearings on Sept. 8 to 11 for objections related to claims from the facility in Libby, Montana. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. According to Bill Rochelle, W.R. Grace's stock closed March 9 at $4.10, down 8 cents a share in New York Stock Exchange trading. He said the two-year high was $30.65 on Oct. 12 2007, and the stock was trading around $26 as recently as August. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 13, 2004. On Jan. 13, 2005, they filed an Amended Plan and Disclosure Statement. The hearing to consider the adequacy of the Debtors' Disclosure Statement began on Jan. 21, 2005. The Debtors' exclusive period to file a chapter 11 plan expired on July 23, 2007. Estimation of W.R. Grace's asbestos personal injury liabilities commenced on Jan. 14, 2008. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) YELLOWSTONE CLUB: Court OKs Auction; Lender Moves Plan Deadline --------------------------------------------------------------- The U.S. Bankruptcy Court District of Montana (Butte) has given tentative approval for an auction process for the assets of Yellowstone Mountain Club LLC. Investor CrossHarbor Capital Partners LLC has been selected as lead bidder, and has agreed to buy Yellowstone's private ski and golf resort absent higher and better bids for the property. According to Bloomberg's Bill Rochelle, the Bankruptcy Court approved the bid procedures after certain modifications, including the provision of more time for the Debtor to sell its assets. The Court previously declined to approve the proposed sale process on grounds that the bid procedures chilled bidding and gave advantage to Cross Harbor, who was the DIP lender. In the Court-approved procedures, bids in competition with CrossHarbor will be due 10 days before a confirmation hearing for approval of Yellowstone's Chapter 11 plan. The auction will be five days before the confirmation hearing, Mr. Rochelle said. The hearing on the adequacy of the disclosure statement to Yellow Stone's Chapter 11 plan is scheduled for April 1. CrossHarbor has agreed to push back from March 31 to April 30 Yellow Stone's deadline to obtain confirmation of its plan. Before the auction is held, the Court, Bloomberg relates, will hold a hearing on April 1 to decide whether Credit Suisse Group A.G., as agent for existing secured lenders owed $310 million, will be able to bid at the auction and use its secured claim for part of the purchase price. According to Mr. Rochelle, the auction and sale process will be complicated because Credit Suisse has liens on some, but not all, assets. The official committee of unsecured creditors of Yellowstone filed a lawsuit on March 3 hoping to invalidate the Credit Suisse claim while recovering $146 million Yellowstone paid on what was originally $375 million in loans. As reported by the TCR on March 10, the Court has postponed to April 1 the hearing in connection with Yellowstone's Chapter 11 plan. 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. The Court postponed the hearing to fix the amount of Credit Suisse's claim. Yellowstone has lost its exclusive rights to file a plan. Parties-in-interest may file a competing 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. YELLOWSTONE CLUB: Court OKs CrossHarbor as Stalking Horse Bidder ---------------------------------------------------------------- CrossHarbor Capital Partners, LLC, reported that the U.S. Bankruptcy Court for the District of Montana has approved the Yellowstone Club's motion to approve plan solicitation procedures that include the appointment of CrossHarbor as the lead or "stalking horse" bidder in the proposed sale of the equity interests in the Yellowstone Club pursuant to the Club's Chapter 11 Plan. The motion was supported by the Official Committee of Unsecured Creditors and the Ad Hoc Yellowstone Club Members Committee, which represents a majority of the Yellowstone Club's members and homeowners. CrossHarbor's bid provides for a purchase price of approximately $100 million, subject to higher and better offers, as well as the assumption of various liabilities, including, among others, some or all of the Club's obligations to existing members. In addition, CrossHarbor has agreed to provide additional capital of at least $75 million to the reorganized Club, as well as to commit up to $7.5 million of CrossHarbor's funds for payment of the claims of local trade and other creditors to preserve and enhance the reputation and good standing of the reorganized Club in the Big Sky and Yellowstone Club communities and in recognition of the sacrifice and hardships endured by such creditors as a result of the financial problems of the Club. CrossHarbor's bid provides the Yellowstone Club with the opportunity to proceed to confirmation of its plan and emergence as the world's only private ski and golf community, with first- class mountain resort amenities. In addition, it provides certainty regarding the continued operation of the Club. The Court has also approved the timeline and plan solicitation procedures for the Court-supervised auction proposed in the Yellowstone Club's Plan of Reorganization. Third party bidders will be able to submit qualified alternative offers on or before ten days prior to the confirmation hearing. If additional qualified bids are submitted, an auction will be held five days prior to the Confirmation Hearing, which likely will be scheduled for some time during the period April 30, 2009, to May 21, 2009. Pending confirmation, the Club will continue to operate with the debtor-in-possession financing previously provided by a CrossHarbor affiliate. CrossHarbor said, "We are pleased that the Court has approved the proposed plan solicitation procedures for the Yellowstone Club and has approved CrossHarbor as the stalking horse bidder, ensuring that the sale will be completed in a speedy and orderly manner and that the operations of the Club will continue as normal. The sale will enable the Yellowstone Club to recapitalize its balance sheet and emerge from Chapter 11 well-positioned for long-term success. CrossHarbor is committed to the Yellowstone Club and to protecting the interests of the Club's members, trade creditors and other stakeholders. Throughout this process, CrossHarbor has operated with transparency and integrity, and we look forward to continuing to work through the Court-supervised auction process to reach an outcome that is in the best interests of the Yellowstone Club. About CrossHarbor CrossHarbor Capital Partners is an alternative investment firm specializing principally in real estate as well as distressed securities and private equity. 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. * NewOak Capital Names Edward Napoli as Managing Director --------------------------------------------------------- NewOak Capital has appointed Edward Napoli as Managing Director of Business Development to help market the firm's advisory, asset- management and capital markets services and to act as Assistant General Counsel. "In today's economic environment, client relationships mean providing solutions and cognitive agility as we face complex structural securities with ambiguous terms. Therefore, we must consider scenarios that combine credit, structure and legal terms. Ed Napoli brings a great deal of knowledge and experience to get to the bottom of these issues. He will be able to effectively leverage NewOak Capital's sector experts to solve our clients' complex investment problems," said Ron D'Vari, CEO of NewOak Capital. "As a solution provider, NewOak Capital addresses the many needs of our diverse client-base. Ed's legal experience in the structured finance and derivatives space will prove value-added to our platform and we're excited to have him join our growing team", NewOak Capital President James Frischling stated. Mr. Napoli brings extensive experience acting as counsel to financial institutions, asset managers and financial guarantors in connection with structured finance and derivatives transactions. Mr. Napoli's previous experience includes positions with Skadden Arps LLP and a start-up monoline financial guarantor. He was most recently with the law firm of Dechert LLP in New York. Mr. Napoli has a BS from the U.S. Merchant Marine Academy, a JD from New York University and an MBA from Duke University. About NewOak Capital NewOak Capital --http://www.newoakcapital.com/--is an advisory, asset management and capital markets firm organized to serve institutions in response to challenges arising from the global credit markets. It provides analysis, valuation, restructuring, risk transfer, and management solutions and services to financial institutions and investors to support their portfolio and corporate needs. NewOak Capital employs 16 senior professionals with an average of 17 years of experience in the fixed-income markets in addition to 17 junior and support staff. It specializes in residential and commercial mortgage loans and securities, REITs, asset-backed securities, structured corporate securities (CSOs/CLOs), and distressed financial companies with exposure. NewOak employs a differentiated framework, an integrated "see-through" analytics platform, and a team of experienced professionals with diversified investment and modeling expertise to provide client solutions. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Mar. 13, 2009 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West Beverly Wilshire, Beverly Hills, California Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 14-16, 2009 AMERICAN BANKRUPTCY INSTITUTE Conrad Duberstein Moot Court Competition St. John's University School of Law, New York City Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 1-4, 2009 AMERICAN BANKRUPTCY INSTITUTE 27th Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 16-19, 2009 COMMERICAL LAW LEAGUE OF AMERICA 2009 Chicago/Spring Meeting Westin Hotel on Michigan Ave., Chicago, Ill. Contact: (312) 781-2000; http://www.clla.org/ Apr. 17-18, 2009 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES NABT Spring Seminar The Peabody, Orlando, Florida Contact: http://www.nabt.com/ Apr. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE Consumer Bankruptcy Conference John Adams Courthouse, Boston, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 27-28, 2009 TURNAROUND MANAGEMENT ASSOCIATION Corporate Governance Meetings Intercontinental Hotel, Chicago, Illinois Contact: www.turnaround.org Apr. 28-30, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Intercontinental Hotel, Chicago, Illinois Contact: www.turnaround.org May 1, 2009 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts for Young Practitioners Alexander Hamilton Custom House, New York City Contact: 1-703-739-0800; http://www.abiworld.org/ May 4, 2009 AMERICAN BANKRUPTCY INSTITUTE New York City Bankruptcy Conference New York Marriott Marquis, New York City Contact: 1-703-739-0800; http://www.abiworld.org/ May 7-8, 2009 RENASSANCE AMERICAN MANAGEMENT, INC. 6th Annual Conference on Distressted Investing - Europe The Le Meridien Piccadilly Hotel, London, U.K. Contact: 1-903-595-3800 or http://www.renaissanceamerican.com/ May 7-10, 2009 AMERICAN BANKRUPTCY INSTITUTE 27th Annual Spring Meeting Gaylord National Resort & Convention Center National Harbor, Maryland Contact: http://www.abiworld.org/ May 12-15, 2009 AMERICAN BANKRUPTCY INSTITUTE Litigation Skills Symposium Tulane University, New Orleans, La. Contact: http://www.abiworld.org/ May 14-16, 2009 ALI-ABA Chapter 11 Business Reorganizations Langham Hotel, Boston, Massachusetts Contact: http://www.ali-aba.org June 11-14, 2009 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ June 21-24, 2009 INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY & BANKRUPTCY PROFESSIONALS 8th International World Congress TBA Contact: http://www.insol.org/ July 16-19, 2009 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Mt. Washington Inn Bretton Woods, New Hampshire Contact: http://www.abiworld.org/ July 29-Aug. 1, 2009 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Westin Hilton Head Island Resort & Spa, Hilton Head Island, S.C. Contact: http://www.abiworld.org/ Aug. 6-8, 2009 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Conference Hotel Hershey, Hershey, Pa. Contact: http://www.abiworld.org/ Sept. 10-11, 2009 AMERICAN BANKRUPTCY INSTITUTE Complex Financial Restructuring Program Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 2, 2009 AMERICAN BANKRUPTCY INSTITUTE ABI/GULC "Views from the Bench" Georgetown University Law Center, Washington, D.C. Contact: http://www.abiworld.org/ Oct. 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Oct. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Paris Las Vegas, Las Vegas, Nev. Contact: http://www.abiworld.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 29-May 2, 2010 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 17-20, 2010 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 7-10, 2010 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Ocean Edge Resort, Brewster, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2010 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Ritz-Carlton Amelia Island, Amelia, Fla. Contact: http://www.abiworld.org/ Aug. 5-7, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE 22nd Annual Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 31-Apr. 3, 2011 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 9-12, 2011 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. Last Updated: March 2, 2009 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo 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 ***