/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090320.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, March 20, 2009, Vol. 13, No. 78 Headlines ACP AMERI-TECH: Case Summary & 20 Largest Unsecured Creditors ALCOA INC: Moody's Assigns 'Baa3' to $575-Mil. 2014 Notes ALERIS INT'L: Court Enters Orders on First Day Motions ALERIS INT'L: DIP Loan Won't Alter Priority of Lenders' Liens ALERIS INT'L: Seeks Court OK to Hire PwC as Special Accountants ALERIS INT'L: To Employ Baker & McKenzie as Environmental Counsel AMERICAN INT'L: Former House Speaker Opposes More Bail-Outs AMERICAN INT'L: Names of Bonus Recipients Now with Atty. Gen. ANDERSON HOMES: Taps Gerald Jeutter & John Northen as Counsel ANDERSON HOMES: Wants to Use Construction Lenders Cash Collateral ANDERSON HOMES: Wants to Assume Deals, Sell and Transfer Assets ANDREWS CAPITAL: Voluntary Chapter 11 Case Summary ARIZONA ASPHALT: Voluntary Chapter 11 Case Summary ARMSTRONG FAMILY: Voluntary Chapter 11 Case Summary ATA AIRLINES: Plan Confirmation Hearing on March 25 ATA AIRLINES: JJL Consultants Named as Creditor Trustee ATA AIRLINES: May Settle $7 Million in Govt. Agencies' Claims ATA AIRLINES: Gets Green Light to Hire Morten as Consultant B&K PROPERTY INVESTMENTS: Voluntary Chapter 11 Case Summary BARRY CLARK: Voluntary Chapter 11 Case Summary BEST VALUE: Voluntary Chapter 11 Case Summary BILTRITE RUBBER: Voluntary Chapter 15 Case Summary BIOPORE INC: Voluntary Chapter 11 Case Summary BORGWARNER INC: Moody's Cuts Ratings on Senior Notes to 'Ba1' BOSCOV'S INC: To Present Plan Outline to Court Today BROWN'S GRADING: Voluntary Chapter 11 Case Summary CACTUS AND BULLARD: Case Summary & 20 Largest Unsecured Creditors CARLOS RODRIGUEZ: Voluntary Chapter 11 Case Summary CHAMATKAR HOSPITALITY: Voluntary Chapter 11 Case Summary CHARLES BUCKELEW: Voluntary Chapter 11 Case Summary CHEMTURA CORP: Chapter 11 Filing Cues Moody's Junk Rating CHEMTURA CORP: Bankruptcy Filing Has Limited Impact on TETRA CHEMTURA CORP: List of 50 Largest Unsecured Creditors CHRYSLER LLC: Faces July Cash Crunch, Doubts Survival in Ch. 11 CIRCLE EAST: Voluntary Chapter 11 Case Summary CITGO PETROLEUM: S&P Affirms Corporate Credit Rating at 'BB' CITIGROUP INC: Senator Wants Unit's Retention Payments Blocked CITY OF NEW ORLEANS: Moody's Affirms 'Baa3' Rating on Tax Bonds CLARK PROPERTIES: Voluntary Chapter 11 Case Summary CMP SUSQUEHANNA: Launches Exchange Offer to Refinance $187MM Notes COEUR D'ALENE: Swaps $18MM in 2024, 2028 Senior Notes for Equity CORE STATES: Voluntary Chapter 11 Case Summary DANA HOLDING: Auction off Assets Left in Old Headquarters DAUFUSKIE ISLAND: Closes, Lays Off Workers; Court to Name Trustee DAVID CLARKSON: Case Summary & Six Largest Unsecured Creditors DBSI INC: Files Schedules of Assets and Liabilities DENNIS SPIELBAUER: Voluntary Chapter 11 Case Summary DCNC NORTH CAROLINA: Voluntary Chapter 11 Case Summary DELTA AIR: To Shrink 10% of Overseas Flights in September 2009 E-CON LLC: Voluntary Chapter 11 Case Summary EAST CAMERON: Sukuk Bondholders Ask Court to Name Ch. 11 Trustee EAST RIDGE: Voluntary Chapter 11 Case Summary ENTRAVISION COMMUNICATIONS: S&P Affirms 'B+' Corp. Credit Rating FAIRCHILD CORP: Wants to Obtain $23 Million DIP Facility from PNC FANNIE MAE: Will Pay Out Up To $611,000 in Retention Bonuses FLEETWOOD ENTERPRISES: Gets Interim OK to Use Cash Collateral FLYING J: Big West Reduces Staff in Bakersfield FORUM HEALTH: Schedules Filing Deadline Extended Until April 30 FREDDIE MAC: Raises Doubts About Ability to Be Profitable Again FREDDIE MAC: Will Pay Bonuses to Keep Key Employees FREEDOM COMMUNICATIONS: Moody's Cuts Corp. Family Rating to 'Caa3' FRESH AIR: Voluntary Chapter 11 Case Summary FRONTIER AIRLINES: Insists on Waiver of Matching 401(k) to Pilots FRONTIER AIRLINES: Eyeing Investors; New Loan Has Dec. Maturity GARY VAUGHT: Voluntary Chapter 11 Case Summary GENERAL MOTORS: SAAB Axes 750 Jobs, Biz Draws Interest from Rivals GERALD MAYO: Voluntary Chapter 11 Case Summary GHOST TOWN: Case Summary & 18 Largest Unsecured Creditors GOOSE MARSH: Voluntary Chapter 11 Case Summary GRAND PRIX: Voluntary Chapter 15 Case Summary GREENBRIER HOTEL: Files Chapter 11, Sells Resort to Marriott GREENBRIER HOTEL: Case Summary & 20 Largest Unsecured Creditors GREYSTONE STAFFING: Voluntary Chapter 11 Case Summary GUFFEY BROTHERS: Voluntary Chapter 11 Case Summary HAROLD REYNOLDS: Voluntary Chapter 11 Case Summary HENRY MORROW: Voluntary Chapter 11 Case Summary HIGHQ BPO: Voluntary Chapter 11 Case Summary IDEARC INC: Largest Stockholder Seeks Election as a Director INDIANA DATA: Voluntary Chapter 11 Case Summary INDYMAC FEDERAL: FDIC Sells Assets & Deposits to OneWest PRECISION PARTS: Wins Nod to Sell Biz. to Lone Bidder Cerion INTERMET CORP: Warns of Liquidation; 2 Unions Oppose CBA Changes JACK BARRETT: Voluntary Chapter 11 Case Summary JAMES SIMS: Voluntary Chapter 11 Case Summary JAMSHID ASHRAFI: Voluntary Chapter 11 Case Summary JDA LITHOGRAPHIC: Voluntary Chapter 11 Case Summary JJTJ LLC: Voluntary Chapter 11 Case Summary JOHNSON DAIRY: Owner Charged With Filing False Income Tax Returns JOSE VILLELA-GUZMAN: Voluntary Chapter 11 Case Summary JOURNAL REGISTER: Shareholder & Utility Firms Object Bankruptcy LANDSBANKI ISLANDS: Sues Deutsche Bank for $10 Million LIFE SCIENCES: Voluntary Chapter 11 Case Summary LOUIS DIBERNARDO: Voluntary Chapter 11 Case Summary LYONDELL CHEMICAL: Attempt to Terminate BASF Appeal Bond Denied MARINE GASKET: Voluntary Chapter 11 Case Summary MARK MURPHY: Voluntary Chapter 11 Case Summary MASONITE INT'L: Disclosure Statement Hearing Slated for April 17 MASONITE INT'L: U.S. Units' Enterprise Value Set at $500,000,000 MASONITE INT'L: Solicitation and Confirmation Timeline Proposed MASONITE INT'L: Court Grants Interim OK to Use Cash Collateral METALS USA: S&P Puts 'CCC' Senior Ratings on Negative CreditWatch MICHAEL CONTI SR: Voluntary Chapter 11 Case Summary MIDWAY GAMES: May Continue to Use Cash Collateral Until April 2 MONTEREY CAPITOLA: Voluntary Chapter 11 Case Summary MORGAN & FINNEGAN: Files for Chapter 7 Liquidation MORNING STAR: Voluntary Chapter 11 Case Summary MTR GAMING: Liquidity Concerns Prompt Moody's Junk Rating MYSTIC TENNIS: Operations Unaffected by Chapter 11 Filing NC CAPITAL FACILITIES: Fitch Cuts $12.67-Mil Revenue Bonds to 'BB' NEXSTAR GROUP: Reports Full Year 2008 Net Loss of $78.1 Million NOBLE INT'L: Obtains $4MM in Funds from Comerica, Customers NORTEL NETWORKS: Court Moves Schedules Filing Deadline to May 29 NORTEL NETWORKS: Sec. 341 Creditors Meeting Adjourned to April 22 NORTEL NETWORKS: Seeks Permission to Hire Huron as Consultant NORTEL NETWORKS: Seeks to Tap Mercer as Compensation Specialist NORTEL NETWORKS: Committee Wants Richards Layton as Counsel NORTEL NETWORKS: In Talks to Sell Assets to Rivals NY WATERWAY: May Have to File for Bankruptcy Protection OWENS CORNING: Delaware Unit's 4th Quarter 2008 Summary Report OWENS CORNING: Directors, Harbinger Disclose Equity Stake PACIFIC PARTNERS: Voluntary Chapter 11 Case Summary PEACH HOLDINGS: S&P Puts 'B' Counterparty Rating on WatchNeg. PILGRIM'S PRIDE: Growers & Cities Oppose Shutdown of 3 Plants PLAZA DE RETIRO: Voluntary Chapter 11 Case Summary POLARIOD CORP: Ex-CEO Wants $7.2 Million Slice From Sale Proceeds PRECISION PARTS: Wins Nod to Sell Biz. to Lone Bidder Cerion PRIMEDIA INC: Corrects Erroneous 2008 Cash Flow Report PRIMUS TELECOMMUNICATIONS: Chapter 11 Filing Cues Moody's D Rating RALEIGH DURHAM: Case Summary & Two Largest Unsecured Creditors REFCO INC: $29.4 Million Goodman Claim Reduced to $750,000 REFCO INC: Allied World Not Required to Advance Defense Costs REFCO INC: Special Reserve Distribution Deferred Until June 30 ROCK-TENN CO: S&P Raises Issue-Level Rating One Notch to 'BB+' ROGER SHIFFMAN: Voluntary Chapter 11 Case Summary RONI RABIN: Voluntary Chapter 11 Case Summary RH DONNELLEY: Approves Amendment to Severance Plan for SVP RH DONNELLEY: Board Approves 2009 Long-Term Incentive Program RH DONNELLEY: Delays Annual Report; In Talks With Lenders SAMSUN LOGIX: Voluntary Chapter 15 Case Summary SEMGROUP LP: Creditors Panel May Pursue Actions Against Kivisto SEMGROUP LP: Producers Allege Systematic Error in Debt Schedule SEMGROUP LP: Sunoco Sued Over Payment of Oil Sold to Semcrude SHARPER IMAGE: Motorola to Pay $185,000 to Settle Avoidance Suit SHARPER IMAGE: Court Approves $207,339 Settlement with Canon SERVE HOLDINGS: Court Okays Sale of 20 Captain D's Restaurants SIX FLAGS: S&P Downgrades Corporate Credit Rating to 'CCC' SMOKE 05: Voluntary Chapter 11 Case Summary SOUTHEAST BANKING: Court Confirms Trustee's Third Amended Plan SPECTRUM BRANDS: Equity Panel Taps Allen & Co. as Bankers STAR TRIBUNE: Workers Okay Concessionary Pact With Firm STERLING MINING: Sec. 341(a) Meeting Scheduled for April 8 STERLING MINING: Files Schedules of Assets and Liabilities STEVEN NOBLE: Voluntary Chapter 11 Case Summary STUART PROPERTY: Voluntary Chapter 11 Case Summary TALLYGENICOM LP: U.S. Court OKs Sale; German Liquidator Appeals TALLYGENICOM AG: Voluntary Chapter 15 Case Summary TARRAGON CORPORATION: Court Sets May 4 General Claims Bar Date TONY CHARONDO: Voluntary Chapter 11 Case Summary TRUCK ACQUISITION: Case Summary & 10 Largest Unsecured Creditors TRUE TEMPER: Failure to Pay Facility Cues S&P's 'D' Rating TRUMP ENTERTAINMENT: D. Trump Blocks Atty. Fees for Noteholders UNIQUE PREMIUM METALS: Voluntary Chapter 11 Case Summary VICTORIA SPROUSE: Voluntary Chapter 11 Case Summary WAVERLY GARDENS: Can Use Lender's Cash Collateral Until June 15 WISE METALS: S&P Changes Outlook to Negative; Keeps 'CCC' Rating WOOD TREATERS: Voluntary Chapter 11 Case Summary * Moody's Sees High Refunding Risks for $300 Bil. in Corp. Bonds * Nearly 15% of Hedge Funds Closed in 2008, Report Says * Casinos Still Generating Interest from Buyers Despite Crisis * Andrew DeNatale Rejoins Stroock's Financial Restructuring Group * House Passes Legislation to Curb Bonuses * Report Reveals Bailouts & Climate Change Burden Fed Superfund * Treasury Unveils $5 Billion Auto Supplier Support Program * BOOK REVIEW: Performance Evaluation of Hedge Funds ********* ACP AMERI-TECH: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: ACP Ameri-Tech Holding, LLC dba Ameri-Tech Building Systems 1084 State Hwy. 7 East Center, TX 75935 Bankruptcy Case No.: 09-90078 Chapter 11 Petition Date: March 11, 2009 Court: Eastern District of Texas (Lufkin) Judge: Bill Parker Debtor's Counsel: Jason R. Searcy, Esq. jrspc@jrsearcylaw.com PO Box 3929 Longview, TX 75606 Tel: (903) 757-3399 Fax: (903) 757-9559 Patrick Kelley, Esq. patkelley@icklaw.com Ireland, Carroll, & Kelley 6101 South Broadway, Suite 500 Tyler, TX 75701 Tel: (903) 561-1600 Estimated Assets: $1 million to $10 million Estimated Debts: $10 million to $50 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Fabral $387,142 3370 Payshare Circle Chicago, IL 60674 Tel: (800) 477-2741 Lincoln Lumber Co. $224,056 PO Box 1868 Conroe, TX 77305 Tel: (936) 539-4421 Steel Building Supply $203,560 1154 Hwy. 7 East Center, TX 75935 Tel: (936) 539-4421 Lengefield Lumber Co. $134,110 Patrick Industries Inc. $123,443 C&L Supply $123,066 Allen Millwork Inc. $114,404 Pocahontas Aluminum $113,274 General Electric $100,080 Morrison Supply $90,793 Stine $90,536 Grainger Inc. $89,752 Loran International Sales Inc. $88,577 Wichita Metal Products Inc. $80,194 Geary Pacific Supply $77,285 Wildcat Electric Supply Ltd. $76,674 Whirlwind Steel Buildings Inc. $73,985 Dave Carter & Associates $65,596 Southern Fastening Systems Inc. $55,575 Captivaire Commercial Kitchen $54,567 The petition was signed by Ronald M. Miller, secretary and treasurer. ALCOA INC: Moody's Assigns 'Baa3' to $575-Mil. 2014 Notes --------------------------------------------------------- Moody's Investors Service assigned a Baa3 rating to Alcoa's issuance of up to $575 million in convertible notes due 2014, which are being issued under the company's well-known seasoned issuer shelf registration (rated (P)Baa3 for senior unsecured debt securities). At the same time, Moody's affirmed Alcoa's Baa3 senior unsecured rating, the Baa3 rating on its senior unsecured bank credit facility, the Ba2 preferred stock rating, the (P)Baa3 senior unsecured shelf rating, and the Prime-3 short-term rating. The rating outlook is stable. The Baa3 senior unsecured rating considers the relatively weak debt protection measures, increased debt levels and leverage ratios and negative free cash flow position of Alcoa going into a major economic downturn. The rating also reflects Moody's expectations that aluminum industry conditions, end use demand, and pricing will not evidence sufficient improvement in 2009 to restore earnings levels or allow for the generation of free cash flow. "However, the recent actions announced by Alcoa, including the approximate 82% reduction in the dividend and issuance of equity better position the company from both a financial strength and liquidity perspective during this difficult operating environment" said Carol Cowan, Vice President and Senior Credit Officer. In addition, the further actions to reduce the company's cost structure is expected to benefit the company over the medium to longer term although most are unlikely to be fully realized until 2010. As a consequence, 2009 is still viewed as a challenging year although the recent actions better position Alcoa in its rating category. The rating also considers Alcoa's leading position in the global alumina and aluminum markets and the depth and breadth of its operating footprint. The stable outlook reflects Moody's view that the current actions being undertaken by the company both financial and operational, together with the monetization of its share in Rio Tinto, will allow the company to significantly reduce its short-term debt position, minimize expected cash burn in 2009 and enhance its liquidity profile comfortably above requirements. Assignments: Issuer: Alcoa Inc. -- Senior Unsecured Regular Bond/Debenture, Assigned Baa3 Moody's last rating action on Alcoa was on February 13, 2009 when the senior unsecured rating was downgraded to Baa3 from Baa1 with a stable outlook. Headquartered in New York City, New York, Alcoa is a leading global producer of alumina, primary aluminum, and downstream products. Alcoa generated revenues of $26.9 billion in 2008. ALERIS INT'L: Court Enters Orders on First Day Motions ------------------------------------------------------ Judge Brendan Linehan Shannon of the U.S. Bankruptcy Court for the District of Delaware issued a slew of orders and amended orders related to so-called First Day Motions filed by Aleris International Inc. and its debtor-affiliates. Judge Shannon authorized the Debtors to pay, up to $5,600,000, to critical vendors who agree to continue supplying good and services to the Debtors on the parties' customary trade terms. The Court authorized the Debtors to undertake appropriate efforts to cause the Critical Vendors to enter into an agreement to continue providing goods or services to the Debtors. A full-text copy of the Critical Vendors Order is available for free at http://bankrupt.com/misc/aleris_CriticalVndrsORD.pdf Judge Shannon entered an amended order with respect to the Debtors' request for authority to pay: (i) undisputed prepetition claims of certain common carriers, mechanic lien claimants and warehousemen who have possessory lien on the Debtors' assets; (ii) certain common carrier charges to ensure timely delivery to customer goods in transit; and (iii) administrative fees to third party agents to effectuate transportation of goods and payment to common carriers. The Court directed the Debtors to provide to the advisors to the Official Committee of Unsecured Creditors and the agents under the DIP Facility, bi-weekly written reports of all payments made, as well as reasonable and timely access to information that will enable the advisors to monitor liens asserted, goods affected, payments made, obligations satisfied and other actions taken under the Carrier Charges Order. The Court, however, prohibits the advisors from disclosing the information to their clients. The Committee will have at least 30 days from the payment date to evaluate the payment and the sufficiency of the lien asserted, Judge Shannon ruled. The Amended Order is in response to the Committee's request for modification to certain provisions in the previous order on Carrier Charges Motion. The Court authorized the Debtors, on a final basis, to pay their foreign creditors up to $3.5 million in the aggregate. The Debtors are permitted to pay prepetition use and property taxes. The Court entered a supplemental order, authorizing the Debtors to pay employee obligations and to continue certain benefit programs, a full-text copy of which is available for free at: http://bankrupt.com/misc/aleris_SuppORDPayemplyees.pdf Prior to entry of the Supplemental Order, L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, explained that certain requests sought in the Employee Obligations Motion were not considered at the original hearing and thus, the need for a supplemental order. Ms. Good has also certified that no timely objections were filed with respect to the proposed form of the supplemental order. About Aleris International Aleris International, Inc. produces and sells aluminum rolled and extruded products. Aleris operates primarily through two reportable business segments: (i) global rolled and extruded products and (ii) global recycling. Headquartered in Beachwood, Ohio, a suburb of Cleveland, the Company operates over 40 production facilities in North America, Europe, South America and Asia, and employs approximately 8,400 employees. Aleris operates 27 production facilities in the United States with eight production facilities that provided rolled and extruded aluminum products and 19 recycling production plants. Aleris International, Inc., aka IMCO Recycling Inc., and various affiliates filed for bankruptcy on February 12, 2009 (Bankr. D. Del. Case No. 09-10478). The Hon. Brendan Linehan Shannon presides over the cases. Stephen Karotkin, Esq., and Debra A. Dandeneau, Esq., at Weil, Gotshal & Manges LLP in New York, serve as lead counsel for the Debtors. L. Katherine Good, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A. In Wilmington, Delaware, serves as local counsel. Moelis & Company LLC, acts as financial advisors; Alvarez & Marsal LLC a as restructuring advisors, and Kurtzman Carson Consultants LLC as claims and noticing agent for the Debtors. As of Dec. 31, 2008, the Debtors had total assets of $4,168,700,000; and total debts of $3,978,699,000. Bankruptcy Creditors' Service, Inc., publishes Aleris International Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Aleris International, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) ALERIS INT'L: DIP Loan Won't Alter Priority of Lenders' Liens ------------------------------------------------------------- Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in Wilmington, Delaware, counsel to Aleris International, Inc., told the U.S. Bankruptcy Court for the District of Delaware at a hearing on March 16, 2009, that the Debtors' $1.075 billion postpetition secured credit facilities do not change the priority of all or substantially all of the liens on the Debtors' assets. According to Mr. Karotkin, the Debtors seek to roll up to about $540 million of the proposed financing, which is roughly 45% of the Liens. "Because 45% is far from all or substantially all of the Liens, any rights of [J. Aron & Company] and [TPG Partners V, L.P.] under the Intercreditor Agreement are not triggered by the DIP Motion," Mr. Karotkin emphasizes. Mr. Karotkin also adds that the roll-up portion of the DIP Credit Facilities merely maintain the relative status quo between J. Aron, TPG and the Debtors' Prepetition Lenders that existed prepetition because the Prepetition Term Loan Agreement already provides for voluntary prepayments of the Prepetition Term Loans. As reported by the Troubled Company Reporter, the Court has authorized the Debtors, on a final basis, to borrow under the DIP Facilities. The $1.075 million DIP credit facility, which includes a new $500 million term loan and a $575 million revolving credit facility, will be used for the Debtors' normal operating and working capital requirements during its reorganization process. At Monday's hearing, the Debtors asked the Court to deny the objections lodged by Babson Capital Management LLC, GSC Group, J. Aron & Company, and TPG Partners, to the postpetition financing request. Mr. Karotkin said the signatories to the Second Amendment of the Debtors' Prepetition Term Loan Agreement and Forbearance Agreement, which includes Babson Capital and GSC, have consented to (i) the lien priority and adequate protection delineated in the DIP Term Sheet and ABL DIP Term Sheet, and (ii) the refinancing of prepetition debt pursuant to the roll-up feature set forth in the DIP Term Sheet. Babson and GSC executed the Second Amendment on February 10, 2009, he said. Babson and GSC have argued that the granting of the replacement liens to the Prepetition Lenders and the roll-up feature of the DIP Credit Facilities is improper. Because Babson is to receive precisely the adequate protection that it bargained for when it entered into the Second Amendment, Babson's objection must be overruled, Mr. Karotkin said. He said Babson, a sophisticated financial investor, cannot credibly allege now that they are not adequately protected or that they were somehow "duped" into executing the Second Amendment, after binding itself under the Second Amendment. The Debtors further asserted that they are not required to obtain the consent of J. Aron or TPG with respect to the proposed priming liens and adequate protection. J. Aron and TPG have argued that the proposed roll-up in the DIP Credit Facilities violates their rights under an Intercreditor Agreement dated December 2006, as amended. The Intercreditor Agreement provides that any holder of Secured Hedging Obligations will not exercise any voting or consent rights with respect to the Collateral, provided that the consent of each Secured Hedge Counterparty is required at all times which respect to all of substantially all of the Liens or changes in the priority of that holder's liens. Representing Deutsche Bank AG, New York Branch, Oak Tree Capital Management and Apollo ALS Holdings, LP, Jeffrey M. Schlerf, Esq., at Fox Rothschild LLP, in Wilmington, Delaware, contends that Babson's assertion -- that its consent to the Second Amendment was given under duress or based on incomplete information -- rings hollow and should be disregarded. Deutsche Bank is the administrative agent of the Debtors' Prepetition Credit Facilities. Oak Tree Capital and Apollo ALS Holdings are backstop lenders under the New Money Term Facility of the postpetition financing facility. Red Herring Babson argued that the Debtors' and Deutsche Bank, et al.'s argument that the Second Amendment precludes the objecting lenders from opposing the DIP Motion is a red herring. Michael R. Lastowski, Esq., at Duane Morris LLP, in Wilmington, Delaware, told the Court that terms of the DIP facilities, as set forth in the Second Amendment, materially differ from the terms of those facilities that the Objecting Lenders approved. The Debtors and Deutsche Bank ignore the fundamental principle that a secured creditor's right to seek adequate protection for its security under the Bankruptcy Code cannot be altered via a contract prior to the bankruptcy filing, he said. William Bowden, Esq., at Ashby & Geddes, P.A., in Wilmington, Delaware, representing J. Aron, argued that the Intercreditor Agreement does not take away Aron's rights, but will be triggered should the Court decide to elevate the term loans to roll-up loans. The amount of collateral with respect to which the new liens are granted an elevated priority relative to the total amount of collateral will be used to determine if there is a change in the priority of all or substantially all of the liens, not, as the Debtors assert, the amount of debt secured by those liens, Mr. Bowden said. The Official Committee of Unsecured Creditors had said it was in discussion with the Debtors to resolve certain informal objections to the DIP Motion. About Aleris International Aleris International, Inc. produces and sells aluminum rolled and extruded products. Aleris operates primarily through two reportable business segments: (i) global rolled and extruded products and (ii) global recycling. Headquartered in Beachwood, Ohio, a suburb of Cleveland, the Company operates over 40 production facilities in North America, Europe, South America and Asia, and employs approximately 8,400 employees. Aleris operates 27 production facilities in the United States with eight production facilities that provided rolled and extruded aluminum products and 19 recycling production plants. Aleris International, Inc., aka IMCO Recycling Inc., and various affiliates filed for bankruptcy on February 12, 2009 (Bankr. D. Del. Case No. 09-10478). The Hon. Brendan Linehan Shannon presides over the cases. Stephen Karotkin, Esq., and Debra A. Dandeneau, Esq., at Weil, Gotshal & Manges LLP in New York, serve as lead counsel for the Debtors. L. Katherine Good, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A. In Wilmington, Delaware, serves as local counsel. Moelis & Company LLC, acts as financial advisors; Alvarez & Marsal LLC a as restructuring advisors, and Kurtzman Carson Consultants LLC as claims and noticing agent for the Debtors. As of Dec. 31, 2008, the Debtors had total assets of $4,168,700,000; and total debts of $3,978,699,000. Bankruptcy Creditors' Service, Inc., publishes Aleris International Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Aleris International, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) ALERIS INT'L: Seeks Court OK to Hire PwC as Special Accountants --------------------------------------------------------------- Aleris International Inc. and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the District of Delaware to employ PricewaterhouseCoopers LLC as their special accountants, nunc pro tunc to February 12, 2009. In addition to performing certain international tax advisory services, PwC has been designing a short-term cash flow forecast on behalf of the Debtors' corporate offices in Beachwood, Ohio, and offices of non-debtor affiliates in Koblenz, Germany, Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York, relates. As a result, PwC has become familiar with the Debtors' business, financial affairs, and capital structure. Mr. Karotkin asserts that the Debtors, their creditors and estates would be unduly prejudiced if the Debtors are required to employ other special accountants to help prepare the cash flow forecast, by the time and expense required for those accountants to become familiar with the intricacies of the Debtors' business operations and financial situation. As special accountants to the Debtors, PwC will: -- further refine the Debtors' current 13-week cash flow forecast model and process; -- further develop the process and procedures to assist the Debtors in creating sustainable short term cash forecast; and -- develop recommendations and a high-level action plan to the Debtors to continue the evolution of the 13-week cash forecast process, improve its effectiveness and efficiency and further embed the cash forecast within the Debtors' processes. For the contemplated services, the Debtors will pay PwC its customary hourly rates: Professional Hourly Rate ------------ ------------ Partner/Managing Directors $600 to $750 Director/Senior Manager $425 to $550 Manager $300 to $400 Senior Associate $200 to $300 Associate $150 to $200 The Debtors will also reimburse the firm for all reasonable and necessary expenses incurred in connection with the representation. PwC and the Debtors' other professionals will undertake every reasonable effort to avoid any duplication of their services, Mr. Karotkin assures the Court. John J. Klee, a partner at PricewaterhouseCoopers, in New York, relates that the Debtors paid his firm $2,464,903 for the cash- forecasting project, international tax advisory services, and other tax related fees. As of the Petition Date, the Debtors owed PwC about $32,000 in fees associated with the international tax advisory services, which the firm agreed to waive upon approval of the Debtors' employment application of the firm. Mr. Klee notes that PwC is unable to state with certainty that every client relationship or other connection has been disclosed. He believes, however, that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, as modified by section 1107(b) of the Bankruptcy Code. PwC intends to file a supplemental disclosure with the Court should additional information that has a bearing on the firm's disinterestedness be discovered. The Court will consider the application at a hearing on April 8, 2009. Objections are due no later than April 1. About Aleris International Aleris International, Inc. produces and sells aluminum rolled and extruded products. Aleris operates primarily through two reportable business segments: (i) global rolled and extruded products and (ii) global recycling. Headquartered in Beachwood, Ohio, a suburb of Cleveland, the Company operates over 40 production facilities in North America, Europe, South America and Asia, and employs approximately 8,400 employees. Aleris operates 27 production facilities in the United States with eight production facilities that provided rolled and extruded aluminum products and 19 recycling production plants. Aleris International, Inc., aka IMCO Recycling Inc., and various affiliates filed for bankruptcy on February 12, 2009 (Bankr. D. Del. Case No. 09-10478). The Hon. Brendan Linehan Shannon presides over the cases. Stephen Karotkin, Esq., and Debra A. Dandeneau, Esq., at Weil, Gotshal & Manges LLP in New York, serve as lead counsel for the Debtors. L. Katherine Good, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A. In Wilmington, Delaware, serves as local counsel. Moelis & Company LLC, acts as financial advisors; Alvarez & Marsal LLC a as restructuring advisors, and Kurtzman Carson Consultants LLC as claims and noticing agent for the Debtors. As of Dec. 31, 2008, the Debtors had total assets of $4,168,700,000; and total debts of $3,978,699,000. Bankruptcy Creditors' Service, Inc., publishes Aleris International Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Aleris International, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) ALERIS INT'L: To Employ Baker & McKenzie as Environmental Counsel ----------------------------------------------------------------- Aleris International Inc. and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the District of Delaware to employ Baker & McKenzie, as their special counsel, nunc pro tunc to the Petition Date, to assist them in matters relating to environmental and international laws. Aleris International Inc. Executive Vice President and Chief Financial Officer Sean M. Stack says that with Baker & McKenzie's prior and continuing general environmental and international work for the Debtors through the Petition Date, and the firm's extensive and longstanding knowledge of the Debtors' operations and affairs, it is aptly qualified to serve as special counsel to the Debtors during these Chapter 11 cases. As special counsel, Baker & McKenzie will be: (a) advising the Debtors on recurring environmental compliance and regulatory matters arising in connection with their business operations; (b) representing the Debtors in enforcement and other proceedings initiated by or involving federal, state and local environmental authorities and other governmental agencies under applicable environmental laws and regulations; (c) representing the Debtors in litigation and other proceedings arising out of the operation of the Debtors' business pursuant to applicable environmental laws and regulations and common law; (d) advising the Debtors on the environmental aspects of corporate acquisitions and divestitures, and representing them with respect to contractual issues and disputes involving waste management and business operations; (e) providing the Debtors with recurring corporate and other counsel arising out of their international business operations; (f) consulting with the Debtors' general bankruptcy counsel, as needed, on issues pertaining to postpetition environmental and international matters; and (g) providing additional services within the area of environmental and international laws that may arise in connection with these Chapter 11 cases, as the Debtors' bankruptcy counsel and Baker & McKenzie may agree from time to time. The Debtors will pay for Baker & McKenzie's services based on the firm's customary rates for professionals involved in the assignment: Professional Hourly Rate ------------ ----------- John W. Watson, Esq. $535 Steven Murawski, Esq. $460 Douglas Sanders, Esq. $460 Sasha Reyes, Esq. $395 Jessica Wicha, Esq. $280 The Debtors will also reimburse the firm for actual and necessary expenses incurred in connection with the representation. John W. Watson, Esq., a principal at Baker & McKenzie, in Chicago, Illinois, disclosed that as of the Petition Date, the Debtors owe the firm about $143,402 for billed but unpaid fees and expenses and $2,237 in unbilled and unpaid fees and expenses. Mr. Watson assures the Court that Baker & McKenzie is a "disinterested person," as the term is defined in Section 101 (14) of the Bankruptcy Code, as modified by Section 1107(b). The Court will convene a hearing on April 8, 2009, to consider the application. Written objections must be filed no later than April 1 at 4:00 p.m. About Aleris International Aleris International, Inc. produces and sells aluminum rolled and extruded products. Aleris operates primarily through two reportable business segments: (i) global rolled and extruded products and (ii) global recycling. Headquartered in Beachwood, Ohio, a suburb of Cleveland, the Company operates over 40 production facilities in North America, Europe, South America and Asia, and employs approximately 8,400 employees. Aleris operates 27 production facilities in the United States with eight production facilities that provided rolled and extruded aluminum products and 19 recycling production plants. Aleris International, Inc., aka IMCO Recycling Inc., and various affiliates filed for bankruptcy on February 12, 2009 (Bankr. D. Del. Case No. 09-10478). The Hon. Brendan Linehan Shannon presides over the cases. Stephen Karotkin, Esq., and Debra A. Dandeneau, Esq., at Weil, Gotshal & Manges LLP in New York, serve as lead counsel for the Debtors. L. Katherine Good, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A. In Wilmington, Delaware, serves as local counsel. Moelis & Company LLC, acts as financial advisors; Alvarez & Marsal LLC a as restructuring advisors, and Kurtzman Carson Consultants LLC as claims and noticing agent for the Debtors. As of Dec. 31, 2008, the Debtors had total assets of $4,168,700,000; and total debts of $3,978,699,000. Bankruptcy Creditors' Service, Inc., publishes Aleris International Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Aleris International, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) AMERICAN INT'L: Former House Speaker Opposes More Bail-Outs ----------------------------------------------------------- Newt Gingrich, the former Speaker of the House, said that the only options for American International Group is receivership or bankruptcy and that it shouldn't be allowed to choose more bailouts from the taxpayers. Mr. Gingrich called on the Obama administration to abandon the strategy of bailing out failing companies, and instead insist that companies choose bankruptcy or receivership as the only way to restore a sense of order and fairness to the economic system. This includes AIG, which reports suggest is going to need another bailout even while rewarding its executives $165 million in bonuses. Mr. Gingrich said, "The cure for our outrage is not merely, as President Obama is demanding, that AIG be prevented from paying its executives... Nor is it acceptable to ask Americans to keep throwing their tax dollars at failed companies and their leaders. The answer is an old fashioned one: AIG should choose between receivership or bankruptcy." "Thanks to the Bush-Obama-Geithner policy of bailing out failing companies, we now have the worst of all possible scenarios: A taxpayer subsidized, government supervised private company; an unsustainable public/private hybrid that is too public to make its own decisions and too private to be responsible to the taxpayers that are keeping it alive. Outrages like the fat cat bonuses currently dominating the headlines will only continue as long as the rule of politicians supplants the rule of law on Wall Street. Bankruptcy would replace the rule of politicians over U.S. financial institutions with the rule of law," Mr. Gingrich stated. About American International Based in New York, American International Group, Inc. (AIG), is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. During the third quarter of 2008, requirements to post collateral in connection with AIG Financial Products Corp.'s credit default swap portfolio and other AIGFP transactions and to fund returns of securities lending collateral placed stress on AIG's liquidity. AIG's stock price declined from $22.76 on Sept. 8, 2008, to $4.76 on Sept. 15, 2008. On that date, AIG's long-term debt ratings were downgraded by Standard & Poor's, a division of The McGraw- Hill Companies, Inc., Moody's Investors Service and Fitch Ratings, which triggered additional requirements for liquidity. These and other events severely limited AIG's access to debt and equity markets. On Sept. 22, 2008, AIG entered into an $85 billion revolving credit agreement with the Federal Reserve Bank of New York and, pursuant to the Fed Credit Agreement, AIG agreed to issue 100,000 shares of Series C Perpetual, Convertible, Participating Preferred Stock to a trust for the benefit of the United States Treasury. At Sept. 30, 2008, amounts owed under the facility created pursuant to the Fed Credit Agreement totaled $63 billion, including accrued fees and interest. Since Sept. 30, AIG has borrowed additional amounts under the Fed Facility and has announced plans to sell assets and businesses to repay amounts owed in connection with the Fed Credit Agreement. In addition, subsequent to Sept. 30, 2008, certain of AIG's domestic life insurance subsidiaries entered into an agreement with the NY Fed pursuant to which the NY Fed has borrowed, in return for cash collateral, investment grade fixed maturity securities from the insurance subsidiaries. On Nov. 10, 2008, the U.S. Treasury agreed to purchase, through its Troubled Asset Relief Program, $40 billion of newly issued AIG perpetual preferred shares and warrants to purchase a number of shares of common stock of AIG equal to 2% of the issued and outstanding shares as of the purchase date. All of the proceeds will be used to pay down a portion of the Federal Reserve Bank of New York credit facility. The perpetual preferred shares will carry a 10% coupon with cumulative dividends. AIG and the Fed also agreed to revise the existing FRBNY credit facility. The loan terms were extended from two to five years to give AIG time to complete its planned asset sales in an orderly manner. The equity interest that taxpayers will hold in AIG, coupled with the warrants, will total 79.9%. At Sept. 30, 2008, AIG had $1.022 trillion in total consolidated assets and $950.9 billion in total debts. Shareholders' equity was $71.18 billion, including the addition of $23 billion of consideration received for preferred stock not yet issued. The Troubled Company Reporter reported on March 4, 2009, that Moody's Investors Service confirmed the A3 senior unsecured debt and Prime-1 short-term debt ratings of American International Group, Inc. AIG's subordinated debt rating has been downgraded to Ba2 from Baa1. The rating outlook for AIG is negative. This rating action follows AIG's announcement of net losses of $62 billion for the fourth quarter and $99 billion for the full year of 2008, along with a revised restructuring plan supported by the US Treasury and the Federal Reserve. This concludes a review for possible downgrade that was initiated on September 15, 2008. AMERICAN INT'L: Names of Bonus Recipients Now with Atty. Gen. ------------------------------------------------------------- Liz Rappaport at The Wall Street Journal reports that New York Attorney General Andrew Cuomo said that he has received from American International Group the list of workers who received retention bonuses. According to WSJ, Mr. Cuomo won't disclose the names of the workers at this time. WSJ relates that Mr. Cuomo decided to conduct a review of the security risks before releasing any individual's name. WSJ states that Mr. Cuomo had subpoenaed AIG on Monday requesting the names of the bonus recipients and information surrounding the bonus contracts. Mr. Cuomo threatened on Wednesday to go to court if he didn't receive the names, according to the report. Mr. Cuomo said that he will work with AIG over the next few days to determine which workers received payments and which have not returned their bonus money, WSJ relates. As reported by the Troubled Company Reporter on March 19, 2009, AIG CEO Edward Liddy called on AIG Financial Products employees who received retention payments of $100,000 or more to return at least half of those payments. Timothy Geithner Criticized Over Bonuses Deborah Solomon at WSJ relates that lawmakers have questioned why Treasury Secretary Timothy Geithner didn't do more to block the bonus payments. Two Republicans asked him to resign, WSJ says. WSJ notes that Mr. Geithner has been operating with a skeleton crew of advisers and has: -- launched a new bank-bailout plan, including "stress tests" for the nation's largest banks; -- rolled out an effort to assist troubled homeowners; and -- launched a plan to boost the availability of consumer loans. WSJ says that Mr. Geithner didn't stop the AIG bonus payments, but he slashed hundreds of millions of dollars in additional payments. Mr. Geithner, WSJ states, was one of the original architects of the AIG rescue while he was president of the Federal Reserve Bank of New York. According to the report, the New York Fed has had primary oversight of AIG and has been involved in several revisions of the bailout, which now includes a $173 billion loan. According to WSJ, President Barack Obama expressed support for Mr. Geithner, saying that the Treasury secretary is dealing with more crises early on than any of his predecessors. The report quoted President Obama as saying, "He is making all the right moves in terms of playing a bad hand." The report states that President Obama took ultimate responsibility for the bonus flap. WSJ reports that administration officials said that they didn't have enough time to deal with bonuses before AIG was required to pay them on March 15. Mr. Geithner learned of the payments on March 10, a few days after the Treasury lent another $30 billion to AIG, WSJ states, citing the officials. Mr. Geithner, WSJ notes, asked Mr. Liddy to determine whether the bonuses could be canceled and had government lawyers study it. Mr. Liddy and the government agreed they were contractual obligations, according to WSJ. Mr. Geithner then decided there was nothing he could do to stop the bonuses, but demanded that Mr. Liddy cancel or curtail additional payouts, WSJ relates. Nancy Pelosi Blames Ben Bernanke for AIG's Bonuses Corey Boles at WSJ relates that House of Representatives Speaker Rep. Nancy Pelosi has blamed Federal Reserve Board Chairperson Ben Bernanke for AIG executives getting $165 million in bonuses at taxpayer expense. According to WSJ, Rep. Pelosi said during a press conference on Thursday that it was the Federal Reserve that initially provided financial aid to AIG in September, with little involvement from the congress. The report quoted Rep. Pelosi as saying, "The announcement was made by the chairman of the Fed [it] would be making this big infusion of cash into AIG without any prior notification to us. We didn't even know [the Fed] had that kind of money . . . That's when it all started." The Bush administration resisted in 2008 any attempts to include executive compensation in the initial legislation creating the Troubled Asset Relief Program, WSJ relates, citing Rep. Pelosi. WSJ notes that Rep. Pelosi wanted to separate House Democrats from any responsibility for the bonus fiasco. According to the report, Rep. Pelosi said that the House Democrats were never involved in the talks in the "watering down of the compensation language" in the economic stimulus bill, as it was a matter between the Obama administration and Sen. Christopher Dodd, the chairman of the Senate Banking Committee. WSJ relates that a Senate version of the legislation included three amendments that would place limits on executive compensation at companies receiving the TARP funds. WSJ notes that in the last-minute talks on the day the final version of the legislation was agreed to between House and Senate lawmakers, the compensation language was altered. WSJ states that the House passed legislation in January 2009 that would have imposed significant limits on financial firms getting taxpayer money, but the Senate never took up the legislation. The Obama administration, says WSJ, pledged to attach similar restrictions on companies as a condition of Congress releasing the second $350 billion of the TARP money to the Treasury Dept. House Passes Legislation to Curb Bonuses Greg Hitt and Aaron Lucchetti at WSJ report that the House has passed legislation that would restrict bonuses this year, imposing a 90% surtax on workers who earn more than $250,000 at firms that get at least $5 billion from the government's financial rescue program. As reported by the Troubled Company Reporter on March 18, 2009, AIG planned to pay about $450 million in bonuses to workers at its financial products unit. The unit caused AIG massive losses and was mainly responsible for the Company's collapse in 2008. AIG's bonuses caused an outrage on Capitol Hill. Legislators received irate e-mails and phone calls, and security was beefed up at AIG as death threats and hate mail flooded employees' mailboxes. WSJ relates that the bonus tax would be retroactive to December 31, 2008, if the Senate approves it and signed it into law. WSJ says that these banks each received more than $5 billion from the government's Troubled Asset Relief Plan: -- Citigroup Inc., -- J.P. Morgan Chase & Co., -- Wells Fargo & Co., -- Bank of America Corp., -- Goldman Sachs Group Inc., -- Morgan Stanley, -- PNC Financial Services Group Inc., and -- US Bancorp. According to WSJ, the House bill also would be implemented on the Fannie Mae and Freddie Mac. WSJ relates that the Senate will also craft a bill that would tax a larger number of workers and companies. The bill, says the report, would impose a 70% surtax on most bonuses, with half paid by employees and half by firms. WSJ quoted Sen. Charles Grassley as saying, "Using bailout dollars for bonuses after companies have been run into the ground adds insult to injury against taxpayers." Bankruptcy Law360 relates that AIG has argued that its failure could shake the global economic system to its core and so far, the federal government has obliged, granting the Company bailout funds. Some legal experts are beginning to rethink whether AIG really is "too big to fail", the report states. About American International Based in New York, American International Group, Inc. (AIG), is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. During the third quarter of 2008, requirements to post collateral in connection with AIG Financial Products Corp.'s credit default swap portfolio and other AIGFP transactions and to fund returns of securities lending collateral placed stress on AIG's liquidity. AIG's stock price declined from $22.76 on September 8, 2008, to $4.76 on September 15, 2008. On that date, AIG's long-term debt ratings were downgraded by Standard & Poor's, a division of The McGraw-Hill Companies, Inc., Moody's Investors Service and Fitch Ratings, which triggered additional requirements for liquidity. These and other events severely limited AIG's access to debt and equity markets. On September 22, 2008, AIG entered into an $85 billion revolving credit agreement with the Federal Reserve Bank of New York and, pursuant to the Fed Credit Agreement, AIG agreed to issue 100,000 shares of Series C Perpetual, Convertible, Participating Preferred Stock to a trust for the benefit of the United States Treasury. At September 30, 2008, amounts owed under the facility created pursuant to the Fed Credit Agreement totaled $63 billion, including accrued fees and interest. Since September 30, AIG has borrowed additional amounts under the Fed Facility and has announced plans to sell assets and businesses to repay amounts owed in connection with the Fed Credit Agreement. In addition, subsequent to September 30, 2008, certain of AIG's domestic life insurance subsidiaries entered into an agreement with the NY Fed pursuant to which the NY Fed has borrowed, in return for cash collateral, investment grade fixed maturity securities from the insurance subsidiaries. On Nov. 10, 2008, the U.S. Treasury agreed to purchase, through its Troubled Asset Relief Program, $40 billion of newly issued AIG perpetual preferred shares and warrants to purchase a number of shares of common stock of AIG equal to 2% of the issued and outstanding shares as of the purchase date. All of the proceeds will be used to pay down a portion of the Federal Reserve Bank of New York credit facility. The perpetual preferred shares will carry a 10% coupon with cumulative dividends. AIG and the Fed also agreed to revise the existing FRBNY credit facility. The loan terms were extended from two to five years to give AIG time to complete its planned asset sales in an orderly manner. The equity interest that taxpayers will hold in AIG, coupled with the warrants, will total 79.9%. At September 30, 2008, AIG had $1.022 trillion in total consolidated assets and $950.9 billion in total debts. Shareholders' equity was $71.18 billion, including the addition of $23 billion of consideration received for preferred stock not yet issued. The Troubled Company Reporter reported on March 4, 2009, that Moody's Investors Service confirmed the A3 senior unsecured debt and Prime-1 short-term debt ratings of American International Group, Inc. AIG's subordinated debt rating has been downgraded to Ba2 from Baa1. The rating outlook for AIG is negative. This rating action follows AIG's announcement of net losses of $62 billion for the fourth quarter and $99 billion for the full year of 2008, along with a revised restructuring plan supported by the US Treasury and the Federal Reserve. This concludes a review for possible downgrade that was initiated on September 15, 2008. ANDERSON HOMES: Taps Gerald Jeutter & John Northen as Counsel ------------------------------------------------------------- Anderson Homes, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Eastern District of North Carolina for authority to employ (i) the law firm of Gerald A. Jeutter, Jr., Attorney at Law, P.A., and (ii) John A. Northen and the firm Northen Blue, L.L.P. as bankruptcy attorneys. The firms of Messrs. Jeutter and Northen will: a) advise the Debtors with respect to its duties and rights in the Chapter 11 cases; b) assist the Debtors in the operation of the business, the ability and means by which some or all of its assets could be refinanced or liquidated to generate cash for the payment of the claims as may be allowed in these proceedings and any other matter relevant to the cases or to the formulation of a Plan; c) assist the Debtors in the preparation and filing of all necessary schedules, statements of financial affairs, reports, a disclosure statement, and a Plan; d) assist the Debtors in the examination and analysis of the conduct of the Debtors' affairs and the causes of insolvency; e) assist and advise the Debtors with regard to communications to the general creditor body regarding any matters of general interest and any proposed Plan of Reorganization; f) prepare, review or analyze all applications, orders, statements of operations, and schedules filed with the Court by the Debtors or other third parties, advise the Debtors as to their propriety, and after approval by the Debtors, consent to orders; and g) perform other legal services as may be required and in the interest of the Debtors, including but not limited to the commencement and pursuit of the adversary proceedings as may be authorized, and the removal and and pursuit of the civil actions as may be pending as of the petition date. The Debtors relate that Messrs. Jeutter and Northen will manage and apportion the legal services so as to minimize any duplication or unnecessary expense. The law firm of Mr. Jeutter received a sum of $18,500 fro services rendered prior to the petition date. The firm also received a $36,500 retainer for postpetition fees. The retainer is held in co-counsel's trust account as security for postpetition fees and expenses. Prior to the petition date, Mr. Northen's firm was paid a sum of $9,731 for services rendered. At the time of the filing, the firm maintained a trust account balance/retainer for the benefit of the Debtors in the amount of $30,269. Messrs. Jeutter and Northen assure the Court that each of their firms are "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Jeutter can be reached at: The law firm of Gerald A. Jeutter, Jr., Attorney at Law, PA 615 Oberlin Road P.O. Box 12585 Raleigh, North Carolina 27605 Tel: (919) 334-6631 Fax: (919) 833-9793 Mr. Northen can be reached at: P.O. Box 2208 Chapel Hill, NC 27515 Tel: (919) 638-4441 Fax: (919) 942-6603 About Anderson Homes, Inc. Headquartered in Raleigh, North Carolina, Anderson Homes, Inc., was formed over 25 years ago and has built homes and developed neighborhoods in the Research triangle region. In the year 2008, it built over 300 homes, and has had sales revenue in excess of $60,000,000. Its sole shereholder is David Servoss, who is also the president. AHI has built homes and developed neighborhoods in the Research triangle region, and in the year 2008 built over 300 homes, and has had sales revenue in excess of $60,000,000 Anderson Homes, Inc. and its debtor-affiliates filed for Chapter 11 protection on March 16, 2009, (Bankr. E. D. N.C. Lead Case No.: 09-02062). Gerald A. Jeutter, Jr., Esq. and John A. Northen, Esq. at Northen Blue, LLP represent the Debtors in their restructuring efforts. The Debtors listed total assets of $17,190,001 and total debts of $13,742,840. ANDERSON HOMES: Wants to Use Construction Lenders Cash Collateral ----------------------------------------------------------------- Anderson Homes, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Eastern District of North Carolina for authority to: a) use of cash collateral securing the repayment of the loan from the construction lenders; and b) provide the construction lenders with adequate protection. The Debtors own, construct improvements on, and sell (i) single- family houses and town homes in subdivisions known and referred to as Edgewater, Bridgewater, Bridgewater West, Cobblestone, Haw Village, Ridgefield, Amberlynn Valley, Cane Creek, Muirfield Village, Pine Valley, Quail Meadows, Thornton Commons Place, Willow Ridge, Creekside at Landon Farms, Keystone Crossing, Sterling Ridge, Jeffries Creek, Briar Chapel, and Vilas at Forest Hills; and (ii) condominiums known as Blount Street Commons. The net proceeds from the sale and transfer of the sale properties constitute the cash collateral. The sale properties are subject to liens in favor of construction lenders, in each instance securing indebtedness which in the aggregate is greater blanket deeds of trust which secure than the value of the individual property, either by means of the promissory notes without allocation among particular properties or by means of trust which are expressly cross-collateralized. In relation to the acquisition and development of the sale properties, the Debtors arranged financing with a number of lenders, each of whom hold deeds of trust to secure the funds advanced to complete the improvements. The construction lenders holding liens on certain sale properties are: a. Bank of America is owed approximately $253,000 pursuant to a loan agreement which reduced the line of credit to the amount, secured by first mortgage liens upon two properties having an aggregate value of approximately $355,000. b. Capital Bank is owed approximately $2.6 million pursuant to a non-revolving line of credit in the amount of $6.0 million, secured by first mortgage liens upon properties known as the Blount Street Commons condominium project, having an aggregate present value of approximately $3.5 million. c. KeySource Bank is owed approximately $1.1 million pursuant to a promissory note in the amount of $2.5 million, secured by first mortgage liens upon a number of properties in Bridgewater, Cobblestone, Edgewater, and Haw Village having an aggregate value of approximately $1.3 million. d. Paragon Commercial Bank is owed approximately $4.3 million pursuant to (i) an A&D revolving line of credit in the amount of $3.8 million; (ii) an A&D non-revolving line of credit in the amount of $1.3 million, and (iii) a Guidance line of credit in the amount of $5.0 million, all secured by first mortgage liens upon a number of properties in Briar Chapel, Bridgewater and Bridgewater West, having an aggregate value of approximately $6.3 million. e. RBC Centura Ban is owed approximately $2.0 million pursuant to (i) a residential construction line of credit in the amount of $5.0 million and (ii) promissory notes in the amounts of $302,432, $104,250, $228,750, $915,000, $1.0 million, and $101,550, all secured by first mortgage liens upon a number of properties in Cobblestone, Ridgefield, and Vilas at Forest Hills, having an aggregate value of approximately $2.4 million. f. Regions Bank is owed approximately $4.9 million pursuant to a builder line of credit in the amount of $15.0 million, secured by first mortgage liens properties in Amberlynn Valley, Bridgewater, Cane Creek, upon a number of Cobblestone, Edgewater, Haw Village, Muirfield Village, Pine Valley, Quail Meadows, Thornton Commons, and Willow Ridge, having an aggregate value of approximately $5.8 million. g. Wachovia Bank is owed approximately $4.8 million pursuant to a construction line of credit in the amount of $8.5 million secured by first mortgage liens upon a number of properties in Amberlynn Valley, Briar Chapel, Creekside at Landon Farms, Keystone Crossing, Edgewater, Quail Meadows, Ridgefield, and Sterling Ridge, having an aggregate value of approximately $5.5 million. In addition, certain secured creditors holding deeds of trust on certain sale properties are: a. James D. Goldston and William Goldston are owed approximately $568,000 pursuant to a promissory note secured by a second mortgage lien upon a number of properties in Bridgewater and Bridgewater West, having an aggregate value of approximately $3 million, subject to the prior lien of Paragon. b. Stock Building Supply, Inc. is the holder of a promissory note, loan agreement, and several deeds of trust recorded with 90 days prepetition to secure antecedent debt in the stated amount of $1.5 million. In many but not all instances, the Stock deed of trust is junior to liens of one or more of construction lenders. The Stock deed of trust is subject to bona fide dispute, avoidance and preservation for the benefit of the estate. In a separate motion, the Debtors have sought an order (i) approving the assumption of certain sale contracts, (ii) authorizing the Debtors to convey certain properties and pay certain closing costs, including broker's commissions, from the sale proceeds, and (iii) transferring all actual or potential liens to the proceeds of the sales. The Debtors will need to receive and use the proceeds of sales to pay on-going costs of operating, insuring, preserving, and protecting the business and property of the estate. Debtors offer to provide each of the construction lenders with adequate protection for the use of their cash collateral as: a. The Debtors will pay the construction lenders interest accruing post-petition on the outstanding indebtedness at the contract rate, monthly in arrears. b. At each closing of a sale property, apply the gross sale proceeds to (i) the payment of ordinary and customary closing costs and, where applicable, a broker's commission if the sale was co-brokered through a third-party; (ii) payment of or reimbursement for any post-petition costs to complete the improvements on the property; and (iii) payment of in-house sales commissions. c. The remaining proceeds will be disbursed (i) as adequate protection payments to each of the construction lenders upon closing of a sale property which is subject to their first priority lien, an amount equal to 75% of the net sale proceeds; and (ii) to the Debtors, an amount equal to 25% of the net sale proceeds. d. The Debtors will limit the use of cash collateral as projected in the Budget, pending further orders of the Court after notice and hearing. e. The Debtors will provide the construction lenders with a continuing post-petition lien and security interest in the Adequate Protection Lots, and the proceeds thereof, equivalent to a lien granted, but (i) only to the extent of cash collateral used and (ii) only to the extent the use of cash collateral, after application of the proceeds of the replacement collateral, results in a decrease in the value of the entity's interest in the property. The validity, enforceabilty, and perfection of the post-petition liens on the Post-Petition Collateral will not depend upon filing, recording, or any other act required under applicable state or federal law, rule, or regulation. f. The Debtors will provide the construction lenders with an administrative expense claim to the extent the use of cash collateral, after application of the proceeds the Post- Petition Collateral, results in a decrease in the value of the proceeds of entity's interest in the property. g. The Debtors will provide the construction lenders with (i) financial reports for the Debtors in form and frequency reasonably acceptable to the Debtors and the construction lenders. About Anderson Homes, Inc. Headquartered in Raleigh, North Carolina, Anderson Homes, Inc., was formed over 25 years ago and has built homes and developed neighborhoods in the Research triangle region. In the year 2008, it built over 300 homes, and has had sales revenue in excess of $60,000,000. Its sole shereholder is David Servoss, who is also the president. AHI has built homes and developed neighborhoods in the Research triangle region, and in the year 2008 built over 300 homes, and has had sales revenue in excess of $60,000,000 Anderson Homes, Inc. and its debtor-affiliates filed for Chapter 11 protection on March 16, 2009, (Bankr. E. D. N.C. Lead Case No.: 09-02062). Gerald A. Jeutter, Jr., Esq. and John A. Northen, Esq. at Northen Blue, LLP represent the Debtors in their restructuring efforts. The Debtors listed total assets of $17,190,001 and total debts of $13,742,840. ANDERSON HOMES: Wants to Assume Deals, Sell and Transfer Assets --------------------------------------------------------------- Anderson Homes, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Eastern District of North Carolina for authority to: (i) assume certain sale contracts; (ii) sell, transfer and convey certain properties and pay certain closing costs, seller concessions and, where applicable, a broker's commissions, if the sale was co- brokered through a third-party; and (iii) transfer all liens, claims or interests of any creditor or other party in interest to the sale proceeds. The Debtors relate that each of the sale contracts was negotiated in good faith and at arm's length, entered into prepetition, and reflects a sale of the property for full, fair and adequate consideration. Assumption of the sale contracts is within the Debtors' sound business judgment and in the best interest of the estate. The Debtors propose to sell, free and clear of liens, claims, interests and encumbrances (i) single-family houses and town homes in subdivisions known and referred to as Edgewater, Bridgewater, Bridgewater West, Cobblestone, Haw Village, Ridgefield, Amberlynn Valley, Cane Creek, Muirfield Village, Pine Valley, Quail Meadows, Thornton Commons Place, Willow Ridge, Creekside at Landon Farms, Keystone Crossing, Sterling Ridge, Jeffries Creek, Briar Chapel, and Vilas at Forest Hills; and (ii) condominiums known as Blount Street Commons. In relation to the acquisition and development of the sale properties, the Debtors arranged financing with a number of lenders, each of whom hold deeds of trust to secure the funds advanced to complete the improvements. the construction lenders holding liens on certain sale properties include (a) Bank of America (b) Capital Bank; (c) KeySource Bank; (d) Paragon Commercial Bank; (e) RBC Centura Bank; (f) Regions Bank; and (g) Wachovia Bank. In addition, certain secured creditors holding deeds of trust on certain sale properties include (a) James D. Goldston and William Goldston; and (b) Stock Building Supply, Inc. The Debtors relate that none of the construction Lenders object to the proposed sales. The Debtors add that the transfer of all liens to proceeds will enable the Debtors to convey clear title and preserve the value of the sale properties for the benefit of the Debtors' estates. No creditors are harmed by the transfer of their claims, liens or interests to the proceeds of sale. About Anderson Homes, Inc. Headquartered in Raleigh, North Carolina, Anderson Homes, Inc., was formed over 25 years ago and has built homes and developed neighborhoods in the Research triangle region. In the year 2008, it built over 300 homes, and has had sales revenue in excess of $60,000,000. Its sole shereholder is David Servoss, who is also the president. AHI has built homes and developed neighborhoods in the Research triangle region, and in the year 2008 built over 300 homes, and has had sales revenue in excess of $60,000,000 Anderson Homes, Inc. and its debtor-affiliates filed for Chapter 11 protection on March 16, 2009, (Bankr. E. D. N.C. Lead Case No.: 09-02062). Gerald A. Jeutter, Jr., Esq. and John A. Northen, Esq. at Northen Blue, LLP represent the Debtors in their restructuring efforts. The Debtors listed total assets of $17,190,001 and total debts of $13,742,840. ANDREWS CAPITAL: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Andrews Capital Holding Corp. 1511 E Commercial Blvd. #61 Ft. Lauderdale, FL 33334 Bankruptcy Case No.: 09-14456 Chapter 11 Petition Date: March 16, 2009 Court: United States Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: John K. Olson Debtor's Counsel: David W. Langley, Esq. 8551 W Sunrise Blvd #303 Fort Lauderdale, FL 33322 Tel: (954) 356-0450 Fax: (954) 356-0451 Email: dave@flalawyer.com Total Assets: $800,000 Total Debts: $3,836,408 The petition was signed by Jayson R. Oneschuk, president of the company. A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flsb09-14456.pdf ARIZONA ASPHALT: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Arizona Asphalt, Inc. 430 W. Warner Rd., Ste 119 Tempe, AZ 85284 Bankruptcy Case No.: 09-04308 Chapter 11 Petition Date: March 10, 2009 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Charles G. Case II Debtor's Counsel: Nathan E. Carr, Esq. The Law Office of Nathan E. Carr 1830 S Alma School Rd #104 Mesa, AZ 85210 Tel: 480-278-1278 Email: natecarrlaw@yahoo.com Total/Estimated Assets: $0 to $50,000 Total/Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/azb09-bk-04308.pdf The petition was signed by Charles G. Herbert, president of the company. ARMSTRONG FAMILY: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Armstrong Family Limited Partnership 220 Station Road Auburn, ME 04210 Bankruptcy Case No.: 09-20320 Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. ------ -------- Auto Center 09-20321 Chapter 11 Petition Date: March 17, 2009 Court: United States Bankruptcy Court District of Maine (Portland) Judge: James B. Haines Jr. Debtor's Counsel: D. Sam Anderson, Esq. Bernstein Shur Sawyer & Nelson 100 Middle St., West Tower Portland, ME 04101 Tel: (207) 774-1200 Fax: (207) 774-1127 Email: sanderson@bernsteinshur.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors, together with its petition. The petition was signed by Robert Armstrong, a Partner at the company. ATA AIRLINES: Plan Confirmation Hearing on March 25 --------------------------------------------------- Counsel for ATA Airlines, Inc., Terry E. Hall, Esq., at Baker & Daniels LLP, in Indianapolis, Indiana, notifies parties-in- interest that the hearing to consider confirmation of the Debtor's First Amended Chapter 11 Plan scheduled for March 25, 2009, will start at 3:00 p.m., and will take place at: Indiana University School of Law 211 S. Indiana Avenue Bloomington, Indiana 47405 The telephonic dial-in number for the Plan Confirmation Hearing is 1-866-499-9766, passcode: 7013697, followed by the pound ("#") key, Ms. Hall says. Parties have until March 19, 2009, to file objections to Plan Confirmation. Voting Classes also have until March 19 to vote on whether to accept or reject the Plan. Under the Plan, ATA Airlines proposes to pay unsecured creditors about 1.3 percent of their claims totaling almost $420 million while it proposed to pay secured creditors about 13.9 percent of their claims totaling $365 million. Secured creditors agreed to share proceeds from potential lawsuits against suppliers that could yield as much as $12.2 million in damages under the proposed plan. ATA Airlines filed its proposed plan barely two weeks after the bid proposal of Southwest Airlines to purchase the Debtor's assets, including its takeoff and landing slots at LaGuardia Airport in New York, for $7.5 million was approved. The sale can't go through until a final plan is confirmed. ATA Files Purchase Agreement, Et Al. Pursuant to the Court's order approving its First Amended Disclosure Statement, ATA Airlines filed with the U.S. Bankruptcy Court for the Southern District of Indiana a copy of its purchase agreement with Southwest. The 14-page purchase agreement provides the terms and conditions governing the sale of ATA Airlines' assets to Southwest Airlines, including its takeoff and landing slots at LaGuardia Airport in New York. A copy of the purchase agreement is available for free at: http://bankrupt.com/misc/ATAPurchaseContract.pdf Pursuant to the Disclosure Statement Order, ATA Airlines also filed a notice of claims register for its employees who are members of the Association of Flight Attendants-CWA, Air Line Pilots Association, Aircraft Mechanics Fraternal Association, International Association of Machinists and AeroSpace Workers, Transport Workers Union of America and those employees not affiliated with the labor unions. A copy of the employee claims register is available for free at: http://bankrupt.com/misc/AFAClaimRegister.pdf http://bankrupt.com/misc/ALPAClaimRegister.pdf http://bankrupt.com/misc/AMFAClaimRegister.pdf http://bankrupt.com/misc/BatmanClaimRegister.pdf http://bankrupt.com/misc/IAMClaimRegister.pdf http://bankrupt.com/misc/TWUClaimRegister.pdf ATA Airlines also submitted a notice of filing of schedule of assumed executory contracts, disclosing that it is not assuming any executory contracts under its Plan. Southwest Airlines' bid proposal initially requires ATA Airlines to have its Chapter 11 plan confirmed by the Court by March 2, 2009. About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., was a diversified passenger airline operating in two principal business lines -- a low cost carrier providing scheduled passenger service that leverages a code share agreement with Southwest Airlines; and a charter operator that focused primarily on providing charter service to the U.S. government and military. ATA is a wholly owned subsidiary of New ATA Acquisition, Inc. -- a wholly owned subsidiary of New ATA Investment, Inc., which in turn, is a wholly owned subsidiary of Global Aero Logistics Inc. ATA Acquisition also owns another holding company subsidiary, World Air Holdings, Inc., which it acquired through merger on August 14, 2007. World Air Holdings owns and operates two other airlines, North American Airlines and World Airways. ATA Airlines and its affiliates filed for Chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). The Honorable Basil H. Lorch III confirmed the Debtors' plan of reorganization on Jan. 31, 2006. The Debtors' emerged from bankruptcy on Feb. 28, 2006. Global Aero Logistics acquired certain of ATA's operations after its first bankruptcy. The remaining ATA affiliates that were not substantively consolidated in the company's first bankruptcy case were sold or otherwise liquidated. ATA Airlines filed for Chapter 22 on April 2, 2008 (Bankr. S.D. Ind. Case No. 08-03675), citing the unexpected cancellation of a key contract for ATA's military charter business, which made it impossible for ATA to obtain additional capital to sustain its operations or restructure the business. ATA discontinued all operations subsequent to the bankruptcy filing. ATA's Chapter 22 bankruptcy petition lists assets and liabilities each in the range of $100 million to $500 million. The Debtor is represented in its Chapter 22 case by Haynes and Boone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel. The United States Trustee for Region 10 appointed five members to the Official Committee of Unsecured Creditors. Otterbourg, Steindler, Houston & Rosen, P.C., serves as bankruptcy counsel to the Committee. FTI Consulting, Inc., acts as the panel's financial advisors. The Court gave ATA Airlines Inc. until Feb. 26, 2009, to file its Chapter 11 plan and April 27, 2009, to solicit acceptances of that plan. ATA Airlines submitted to the Court its Chapter 11 Plan of Reorganization and accompanying Disclosure Statement on Dec. 12, 2008, two weeks after it completed the sale of its key assets to Southwest Airlines Inc. Bankruptcy Creditors' Service, Inc., publishes ATA Airlines Bankruptcy News. The newsletter tracks the chapter 11 case of ATA Airlines, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) ATA AIRLINES: JJL Consultants Named as Creditor Trustee ------------------------------------------------------- Pursuant to ATA Airlines Inc.'s First Amended Chapter 11 Plan, the Official Committee of Unsecured Creditors, Kevin Batman, the Air Line Pilots Association and four other labor unions designated JJL Consultants Inc. as Unsecured Creditor Trustee. JJL will serve as the trustee of the Unsecured Creditors Trust, which will be established under the Plan to provide a mechanism for the liquidation of the $2.5 million in unsecured settlement fund, net proceeds from the recovery of preference actions and other assets. JJL's engagement will be governed by these terms: (1) JLL would serve as Trustee at a monthly fee of $10,000 for the first year, $7,500 per month for months 13 to 18, $5,000 for months 19 to 24, with further compensation to be subject to negotiation with the Oversight Committee proposed for the Trust, plus reimbursement for reasonable and necessary expenses in connection with the engagement. (2) JLL would be responsible for managing and overseeing the claims reconciliation and objection process, with final say on settlements, unless otherwise provided for in either the Plan or the Trust document. (3) JLL would (i) retain Hostetler & Kowalik, P.C., as local counsel to file any objections regarding claims at its usual hourly rate, and Otterbourg Houston Steindler & Rosen PC at its usual hourly rate for any Trust matters the Trustee deems appropriate; and (ii) be authorized to also retain a financial advisor to assist with functions of the trust, including the preparation and filing of periodic reports as may be required by the Plan or Trust document, and tax returns for the Trust. (4) JLL would be responsible for making distributions from the Trust to holders of allowed claims as provided for in the Plan or Trust document. (5) JLL will be authorized to pursue avoidance and other Chapter 5 actions as authorized by the Plan or Trust document. As to preference avoidance matters, JLL would be entitled to a contingent fee for actual recoveries to be paid from preference avoidance recoveries: * on matter of less than $50,000 -- 15 % of gross recovery * on matters settled at $50,001 to $500,000 -- 10% of gross recovery * on matters settled for greater than $500,000 -- 5% of gross recovery and an additional 15% of the distributive percentage of allowed claims based on claims reductions and waivers of claims 502(h) claims. (6) If litigation is commenced on any avoidance actions, then, in addition to the continent fees to be paid to H&K as counsel, JLL will be ent1tled to 2 1/2% of any actual recovery to be paid from preference avoidance recoveries and an additional 2 1/2% of the distributive percentage of allowed claims based on claims reductions and waivers of 502(h) claims. (7) H&K will be retained by the Trust to file all objections to claims that may be necessary in the case, at its usual hourly rate. (8) H&K will be retained by the Trust to prosecute litigation for preference avoidance actions on these bases: * H&K would receive a non-contingent suit fee of $750 for each action filed, to be credited against actual recoveries. * H&K would be entitled to a contingent fee of 22.5% of any actual recovery between $0 and $25,000; 17.5% on recoveries between $25,001 and $500,000; and 12.5% on recoveries greater than $500,000; to be paid from preference avoidance recoveries and an additional 12.5% of the distributive percentage of allowed claims based on claims reductions and waivers of 502(h) claims. * For cases settled within four weeks of trial or matters tried, H&K would receive a contingent fee of 27.5% on gross recoveries of less than $50,000; 22.5% on recoveries between $25,001 and $500,000; and 17.5% on recoveries over $500,000, to be paid from preference avoidance recoveries and an additional 12.5% of the distributive percentage of allowed claims based on claims reductions and waivers of 502(h) claims. * H&K would also be entitled to reimbursement for ordinary and reasonable expenses incurred in connection with both the claims process and preference avoidance actions. About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., was a diversified passenger airline operating in two principal business lines -- a low cost carrier providing scheduled passenger service that leverages a code share agreement with Southwest Airlines; and a charter operator that focused primarily on providing charter service to the U.S. government and military. ATA is a wholly owned subsidiary of New ATA Acquisition, Inc. -- a wholly owned subsidiary of New ATA Investment, Inc., which in turn, is a wholly owned subsidiary of Global Aero Logistics Inc. ATA Acquisition also owns another holding company subsidiary, World Air Holdings, Inc., which it acquired through merger on August 14, 2007. World Air Holdings owns and operates two other airlines, North American Airlines and World Airways. ATA Airlines and its affiliates filed for Chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). The Honorable Basil H. Lorch III confirmed the Debtors' plan of reorganization on Jan. 31, 2006. The Debtors' emerged from bankruptcy on Feb. 28, 2006. Global Aero Logistics acquired certain of ATA's operations after its first bankruptcy. The remaining ATA affiliates that were not substantively consolidated in the company's first bankruptcy case were sold or otherwise liquidated. ATA Airlines filed for Chapter 22 on April 2, 2008 (Bankr. S.D. Ind. Case No. 08-03675), citing the unexpected cancellation of a key contract for ATA's military charter business, which made it impossible for ATA to obtain additional capital to sustain its operations or restructure the business. ATA discontinued all operations subsequent to the bankruptcy filing. ATA's Chapter 22 bankruptcy petition lists assets and liabilities each in the range of $100 million to $500 million. The Debtor is represented in its Chapter 22 case by Haynes and Boone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel. The United States Trustee for Region 10 appointed five members to the Official Committee of Unsecured Creditors. Otterbourg, Steindler, Houston & Rosen, P.C., serves as bankruptcy counsel to the Committee. FTI Consulting, Inc., acts as the panel's financial advisors. The Court gave ATA Airlines Inc. until Feb. 26, 2009, to file its Chapter 11 plan and April 27, 2009, to solicit acceptances of that plan. ATA Airlines submitted to the Court its Chapter 11 Plan of Reorganization and accompanying Disclosure Statement on Dec. 12, 2008, two weeks after it completed the sale of its key assets to Southwest Airlines Inc. Bankruptcy Creditors' Service, Inc., publishes ATA Airlines Bankruptcy News. The newsletter tracks the chapter 11 case of ATA Airlines, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) ATA AIRLINES: May Settle $7 Million in Govt. Agencies' Claims ------------------------------------------------------------- ATA Airlines Inc. sought and obtained approval from the U.S. Bankruptcy Court for the Southern District of Indiana to execute its settlement agreement with five government agencies. The agreement permits ATA Airlines to settle more than $7 million of claims filed against it by the Department of Defense, Federal Aviation Administration, Department of Agriculture, Department of Homeland Security and Transportation Security Administration, and the Customs and Border Protection. The claims were filed on account of civil penalties, unpaid aircraft support services, aviation security infrastructure fees, and customs inspection charges, among other things. Under the court-approved settlement deal, an allowed secured claim of: * $5,891,876 will be granted to the Department of Defense; * $1,121,168 to the Department of Homeland Security; * $190,129 to the Federal Aviation Administration; * $29,757 to the CBP; and * $90,604 to the Department of Agriculture. Any and all other claims of the agencies will be disallowed in their entirety, except for certain unliquidated claims asserted by the CBP or scheduled by ATA Airlines on behalf of the agency. Once liquidated, CBP's claims will be satisfied solely from the proceeds of any surety bonds posted by ATA Airlines to satisfy those claims. Neither the airline nor its bankruptcy estate will be liable for the payment of those claims. Under the deal, the government agencies are authorized to set off or recoup the allowed secured claims against the $11,576,107 they owe to ATA Airlines, and pay the airline a net sum of $4,252,571. The Court, however, held that the approval of the settlement deal does not constitute a release, waiver or other limitation on any preference claim that may exist against the government agencies. The Court also held that the approval does not constitute a release, waiver or other limitation on the part of the government agencies regarding any defense to the preference claim, provided that the amounts set-off by the agencies pursuant to its order should not be avoidable or subject to disgorgement. Creditors Committee Objects Prior to the approval, the Official Committee of Unsecured Creditors objected to the settlement, saying that ATA Airlines failed to address the propriety of the "preference actions waiver" and the value of any preference claims being released. "On its face, the Motion appears to trade away unfairly the general unsecured creditors' bargained-for rights to distributions from preference recoveries in exchange for release of cash to the estate that (a) will not benefit the general unsecured creditors; and (b) it appears the Debtor would be entitled to even absent the grant of releases of the Preference Actions," said Jeffrey A. Hokanson, Esq., at Hostetler & Kowalik, P.C., in Indianapolis, Indiana. About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., was a diversified passenger airline operating in two principal business lines -- a low cost carrier providing scheduled passenger service that leverages a code share agreement with Southwest Airlines; and a charter operator that focused primarily on providing charter service to the U.S. government and military. ATA is a wholly owned subsidiary of New ATA Acquisition, Inc. -- a wholly owned subsidiary of New ATA Investment, Inc., which in turn, is a wholly owned subsidiary of Global Aero Logistics Inc. ATA Acquisition also owns another holding company subsidiary, World Air Holdings, Inc., which it acquired through merger on August 14, 2007. World Air Holdings owns and operates two other airlines, North American Airlines and World Airways. ATA Airlines and its affiliates filed for Chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). The Honorable Basil H. Lorch III confirmed the Debtors' plan of reorganization on Jan. 31, 2006. The Debtors' emerged from bankruptcy on Feb. 28, 2006. Global Aero Logistics acquired certain of ATA's operations after its first bankruptcy. The remaining ATA affiliates that were not substantively consolidated in the company's first bankruptcy case were sold or otherwise liquidated. ATA Airlines filed for Chapter 22 on April 2, 2008 (Bankr. S.D. Ind. Case No. 08-03675), citing the unexpected cancellation of a key contract for ATA's military charter business, which made it impossible for ATA to obtain additional capital to sustain its operations or restructure the business. ATA discontinued all operations subsequent to the bankruptcy filing. ATA's Chapter 22 bankruptcy petition lists assets and liabilities each in the range of $100 million to $500 million. The Debtor is represented in its Chapter 22 case by Haynes and Boone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel. The United States Trustee for Region 10 appointed five members to the Official Committee of Unsecured Creditors. Otterbourg, Steindler, Houston & Rosen, P.C., serves as bankruptcy counsel to the Committee. FTI Consulting, Inc., acts as the panel's financial advisors. The Court gave ATA Airlines Inc. until Feb. 26, 2009, to file its Chapter 11 plan and April 27, 2009, to solicit acceptances of that plan. ATA Airlines submitted to the Court its Chapter 11 Plan of Reorganization and accompanying Disclosure Statement on Dec. 12, 2008, two weeks after it completed the sale of its key assets to Southwest Airlines Inc. Bankruptcy Creditors' Service, Inc., publishes ATA Airlines Bankruptcy News. The newsletter tracks the chapter 11 case of ATA Airlines, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) ATA AIRLINES: Gets Green Light to Hire Morten as Consultant ----------------------------------------------------------- ATA Airlines Inc. sought and obtained permission from the U.S. Bankruptcy Court for the Southern District of Indiana to employ Morten Beyer & Agnew as its consultant effective Feb. 11, 2009. The airline tapped the services of Morten, a global aviation consulting firm, in connection with the civil lawsuit it filed against Federal Express Corporation. To recall, ATA Airlines filed the lawsuit after FedEx, which leads a team of airline conducting military charter flights, booted the airline out of the group early last year in alleged violation of their 2006 contract. The lawsuit seeks $180,000,000 in damages. Attorney for ATA Airlines, Terry Hall, Esq., at Baker & Daniels LLP, in Indianapolis, Indiana, said that Morten Beyer has an "excellent reputation for providing high quality services and expert testimony regarding the aviation industry." Ms. Hall said that the firm's knowledge of the aviation industry including the Air Mobility Command and Civil Reserve Air Fleet programs where ATA Airlines previously participated in as part of the team, will be important in assisting the airline in the lawsuit. Morten Beyer's personnel will be paid for their consulting services at these hourly rates: Principal $400 COO/Senior Vice-President $350 Vice-President/Senior Associate/ Managing Director $275 Director/Associate $200 Manager/Associate $160 Analyst $115 Administrative $88 The current customary hourly rates for the firm's personnel providing testimonies during deposition, among other things, are: Principal $450 COO/Senior Vice-President $400 Managing Director/Vice-President/ Senior Associate $400 All other Staff $325 Morten Beyer, however, requested that those rates be revised to the rates that are in effect at the time the services are rendered, according to Ms. Hall. She further said that Morten Beyer will also be reimbursed of any expenses incurred in connection with its employment. Robert Agnew, a principal at Morten Beyer, assured the Court that his firm does not hold or represent interest adverse to the interest of ATA Airlines' estate. He says that the firm is a "disinterested person" under section 101(14) of the Bankruptcy Code. About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., was a diversified passenger airline operating in two principal business lines -- a low cost carrier providing scheduled passenger service that leverages a code share agreement with Southwest Airlines; and a charter operator that focused primarily on providing charter service to the U.S. government and military. ATA is a wholly owned subsidiary of New ATA Acquisition, Inc. -- a wholly owned subsidiary of New ATA Investment, Inc., which in turn, is a wholly owned subsidiary of Global Aero Logistics Inc. ATA Acquisition also owns another holding company subsidiary, World Air Holdings, Inc., which it acquired through merger on August 14, 2007. World Air Holdings owns and operates two other airlines, North American Airlines and World Airways. ATA Airlines and its affiliates filed for Chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). The Honorable Basil H. Lorch III confirmed the Debtors' plan of reorganization on Jan. 31, 2006. The Debtors' emerged from bankruptcy on Feb. 28, 2006. Global Aero Logistics acquired certain of ATA's operations after its first bankruptcy. The remaining ATA affiliates that were not substantively consolidated in the company's first bankruptcy case were sold or otherwise liquidated. ATA Airlines filed for Chapter 22 on April 2, 2008 (Bankr. S.D. Ind. Case No. 08-03675), citing the unexpected cancellation of a key contract for ATA's military charter business, which made it impossible for ATA to obtain additional capital to sustain its operations or restructure the business. ATA discontinued all operations subsequent to the bankruptcy filing. ATA's Chapter 22 bankruptcy petition lists assets and liabilities each in the range of $100 million to $500 million. The Debtor is represented in its Chapter 22 case by Haynes and Boone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel. The United States Trustee for Region 10 appointed five members to the Official Committee of Unsecured Creditors. Otterbourg, Steindler, Houston & Rosen, P.C., serves as bankruptcy counsel to the Committee. FTI Consulting, Inc., acts as the panel's financial advisors. The Court gave ATA Airlines Inc. until Feb. 26, 2009, to file its Chapter 11 plan and April 27, 2009, to solicit acceptances of that plan. ATA Airlines submitted to the Court its Chapter 11 Plan of Reorganization and accompanying Disclosure Statement on Dec. 12, 2008, two weeks after it completed the sale of its key assets to Southwest Airlines Inc. Bankruptcy Creditors' Service, Inc., publishes ATA Airlines Bankruptcy News. The newsletter tracks the chapter 11 case of ATA Airlines, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) B&K PROPERTY INVESTMENTS: Voluntary Chapter 11 Case Summary ----------------------------------------------------------- Debtor: B & K Property Investments, Inc. P.O. Box 259 Waynesville, MO 65583 Bankruptcy Case No.: 09-60477 Chapter 11 Petition Date: March 16, 2009 Court: United States Bankruptcy Court Western District of Missouri (Springfield) Debtor's Counsel: M. Brent Hendrix, Esq. P.O. Box 3373 Springfield, MO 65808 Tel: (417) 889-8820 Fax: (417) 889-3493 Email: brenthendrix@sbcglobal.net Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Michael Liebig, CFO of the company. A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mowb09-60477.pdf BARRY CLARK: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Barry Gene Clark dba Joe Clark Residential Care Home P.O. Box E Nevada, MO 64772 Bankruptcy Case No.: 09-30199 Chapter 11 Petition Date: March 11, 2009 Court: United States Bankruptcy Court Western District of Missouri (Joplin) Debtor's Counsel: J. Kevin Checkett, Esq. Checkett & Pauly P.O. Box 409 Carthage, MO 64836 Tel: 417-358-4049 Fax : 417-358-6341 Email: maw@cp-law.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bryan Cave Legal Services $889.52 C/O James Lawrence One Kansas City Place 1200 Main Street, Ste. 3500 Kansas City, MO 64105-2100 Medical Business Bureau Collection for $413.87 1175 Devin Drive, Ste. 173 Apogee Medical Muskegon, MI 49441 Group St. Johns Hospital Medical $177.23 2727 McClelland Blvd. Joplin, MO 64804 St. Joseph Medical Center Medical $1,971.64 1000 Carondelet Drive Kansas City, MO 64114 Sunbelt Fire Protection Sprinkler system $25,525.00 7924 E. 15th Street Tulsa, OK 74112 The petition was signed by Barry Gene Clark. BEST VALUE: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Best Value, Inc. P.O. Box 947 Postville, IA 52162 Tel: (563) 864-6090 Bankruptcy Case No.: 09-00591 Chapter 11 Petition Date: March 16, 2009 Court: United States Bankruptcy Court Northern District of Iowa (Dubuque) Company Description: The debtor is a trucking operator. Debtor's Counsel: Jeffrey D. Goetz, Esq. Bradshaw, Flowler, Proctor & Fairgrave 801 Grand Avenue, Suite 3700 Des Moines, IA 50309-8004 Tel: (515) 246-5817 Fax: (515) 246-5808 Email: goetz.jeffrey@bradshawlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The petition was signed by Candy Seibert, general manager of the company. The Debtor did not file a list of 20 largest unsecured creditors together with its petition. BILTRITE RUBBER: Voluntary Chapter 15 Case Summary -------------------------------------------------- Chapter 15 Petitioner: RSM Richter Inc. Allen & Overy LLP 1221 Avenue of the Americas New York, NY 10020 Chapter 15 Debtor: Biltrite Rubber (1984) Inc. 170 North Queen Street Toronto Ontario Canada M9C1A8 Chapter 15 Case No.: 09-31423 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Biltrite Rubber, Inc. 09-31425 Type of Business: The Debtors engage in custom rubber mixing and compounding market with manufacturing facilities located in Canada and the United States. See: http://www.biltriteindustries.com/ Chapter 15 Petition Date: March 12, 2009 Court: Northern District of Ohio (Toledo) Judge: Mary Ann Whipple Chapter 15 Petitioner's Counsel: Ronald E. Gold, Esq. rgold@fbtlaw.com Frost Brown Todd LLC 2200 PNC Center 201 East Fifth Street Cincinnati, OH 45202-4182 Tel: (513) 651-6156 Fax: (513) 651-6981 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million BIOPORE INC: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: BioPore, Inc. P.O. Box 182 Boalsburg, PA 16827 Bankruptcy Case No.: 09-01694 Chapter 11 Petition Date: March 11, 2009 Court: United States Bankruptcy Court Middle District of Pennsylvania (Harrisburg) Debtor's Counsel: Erik Sobkiewicz, Esq. Campbell and Levine LLC 1700 Grant Building Pittsburgh, PA 15219 Tel: 412 261-0310 Fax : 412 261-5066 Email: es@camlev.com Total Assets: $1,300,687.42 Total Debts: $261,705.79 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/pamb09-bk-01694.pdf The petition was signed by the company's President, Treasurer, Secretary & Sole Director, Sandra R. Hay. BORGWARNER INC: Moody's Cuts Ratings on Senior Notes to 'Ba1' ------------------------------------------------------------- Moody's Investors Service lowered BorgWarner Inc.'s senior unsecured notes to Ba1 from Baa3, and assigned Corporate Family and Probability of Default Ratings of Ba1. In a related action a Speculative Grade Liquidity Rating of SGL-4 was assigned. The rating outlook is negative. In lowering the ratings, Moody's noted that BorgWarner is an important supplier of power train components to the automotive industry, and that the company's technological capabilities and global presence should enable it to sustain a leading position in its industry. Nevertheless, the severe downturn in automotive production has led to a significant erosion of earnings and cash flow, and even with the benefits of aggressive restructuring initiatives being implemented by the company, credit metrics are not expected to return to levels consistent with an investment grade rating over the intermediate-term. Moody's notes that BorgWarner is largely a holding company and its unsecured notes are structurally subordinated to considerable liabilities that exist at its various operating subsidiaries. However, the indenture governing the notes contains negative pledge provisions. Consequently, the granting of security to bank lenders in connection with the renegotiation of the credit facility could result in the unsecured notes sharing in the granting of any security or subsidiary guarantee enhancements in excess of lien basket limitations under the unsecured note indentures. Under Moody's Loss Given Default rating methodology, the unsecured notes are currently given rating benefit due to this consideration. Upon the resolution of the credit facility renegotiations, Moody's will reassess its rating of the notes within the context of its Loss Given Default methodology. To the extent that the notes remain subject to a material degree of structural subordination relative to the liabilities of BorgWarner's operating subsidiaries, the rating of the notes could be further adversely affected under the Loss Given Default methodology. BorgWarner holds a well established position as a supplier of automotive products which enhance fuel economy, reduce emissions and improve vehicle performance. The company's strong position in these markets, along with its technological leadership, has historically supported revenue growth and expansion in international markets. With only 12% of revenues derived from the North American operations of the Big-3 U.S. automakers, BorgWarner has good customer and geographic diversification in its business. However, global economic conditions are expected to pressure BorgWarner's operating performance and credits metrics, as automotive original equipment manufacturers reduce productions levels to meet weak consumer demand. Actions taken by the company to help mitigate industry conditions and preserve operating flexibility include headcount reductions of approximately 4,400 (or 24%) by year-end 2008, moving to 4-day work weeks in certain European locations, plant closings, and the temporary suspension of dividends. While these actions should help to stem the losses incurred in the latter part of 2008, overall profitability and cash flow generation are likely to remain pressured at least through 2009. Importantly, BorgWarner maintains a book of net new business awards totaling $2.1 billion that should provide a basis for future earnings growth. These awards include products such as turbochargers and dual clutch transmission technologies that will be needed by automakers to enhance vehicle performance and meet regulatory requirements. The company continues to invest in product development initiatives that should enable it to maintain its product leadership and support continued new business awards. The negative outlook considers BorgWarner's weak near-term liquidity profile combined with the risk of further reductions in global automotive original equipment production. The company faces the refinancing risk of its $600 million multi-currency revolving credit facility which matures in July 2009. While the company is in the process of replacing the facility, tight credit markets combined with the deterioration in the automotive industry will challenge the company's ability to maintain the size and terms of the existing facility. The ratings may be stabilized upon completion of a new revolving credit facility which provides sufficient liquidity and covenant cushion to manage through the current industry downturn. The Speculative Grade Liquidity Rating of SGL-4 indicates weak liquidity over the next twelve months and is heavily influenced by the need to replace the expiring revolving credit facility. As of 12/31/08, the company maintained cash balances of about $103 million, a large portion of which was subsequently used in meeting the $137 million February 15th bond maturity. The company is expected to generate free cash flow, in part due to the benefits of restructuring actions, lower capital expenditures, and the announced temporary dividend suspension. Nevertheless, weak industry conditions are likely to constrain the magnitude of free cash generation in the near term. There are no near term bond maturities, but the company does have about $184 million of short term borrowings outstanding and a $50MM receivables securitization facility that expires in April 2009. The $600 million multi- currency revolving credit facility matures in July 2009. This facility had no cash drawings and no outstanding letters of credit at 12/31/08. The near term maturity of the revolving credit facility is a key consideration in the Speculative Grade Liquidity Rating. A replacement of this facility in an amount of sufficient size and duration to weather the current industry downturn could improve the company's Speculative Grade Liquidity Rating. Future events that have potential to drive BorgWarner's ratings lower include: further declines in global OEM production; failure to successfully implement the restructuring initiatives to help offset industry conditions; elevated working capital levels resulting in continuing negative free cash flow; and the inability to renew the current revolving credit facility in sufficient size to maintain adequate liquidity. Lower rating could arise if any combination of these factors were to detract from the company's ability to return operating profit margins to 6% during 2009, or if the company continues to sustain negative free cash flow generation. The rating outlook could be stabilized if BorgWarner is able to improve its liquidity profile through an adequate refinancing of its bank credit facility and receivable securitization facility. Future events that could also be beneficial to the rating or outlook include a stabilization of production levels in the automotive markets, restoration of stronger margins and higher levels of free cash flow generation over the intermediate term resulting in improved leverage. A stabilized rating outlook could arise if any combination of these factors were to lead to EBIT/Interest coverage being sustained above 4.0x, or a reduction in leverage approaching 2.0x. Ratings assigned: BorgWarner, Inc. -- Corporate Family Rating, Ba1 -- Probability of Default Rating, Ba1 -- Speculative Graded Liquidity Rating, SGL-4 Ratings lowered -- Senior unsecured notes, to Ba1 (LGD4, 63%), from Baa3; -- Senior unsecured shelf, to (P)Ba1 (LGD4, 63%), from (P)Baa3; -- Subordinated shelf filing, to (P)Ba2 (LGD6, 97%), from (P)Ba1; -- Preferred shelf filing, to (P)Ba3 (LGD6, 97%), from (P)Ba2 BorgWarner Capital Trusts I, II and II -- Shelf filing for trust preferred securities, to (P)Ba2 (LGD6, 97%), from (P)Ba1 The last rating action on BorgWarner was on December 24, 2008 when the company's senior unsecured ratings were lowered to Baa3 and left under review for further downgrade. BorgWarner, Inc. headquartered in Auburn Hills, Michigan, is a global tier-1 automotive supplier focused on engine and drivetrain products. In 2008, revenues were approximately $5.3 billion. The Company operates manufacturing facilities serving customers in the Americas, Europe, and Asia, and is an original equipment supplier to every major automotive OEM in the world. BOSCOV'S INC: To Present Plan Outline to Court Today ---------------------------------------------------- Boscov's Inc., now known as BSCV Inc. following the sale of its business to the Boscov and Lakin families, will present its disclosure statement to its proposed Chapter 11 plan of liquidation to the bankruptcy court today. The disclosure statement submitted to the U.S. Bankruptcy Court for the District of Delaware details on the proposed treatment and recovery of claims against, and interests in, the Debtors. Pursuant to the Plan, unsecured creditors with claims totaling between $140 million and $160 million are expected to obtain a 6.3% to 14.4% recovery. Holders of existing equity interests won't receive anything. A full-text copy of the Liquidation Plan is available for free at http://bankrupt.com/misc/BSCV_Ch11LiquidationPlan.pdf A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/BSCV_DisclosureStatement.pdf Bloomberg's Bill Rochelle notes that the Plan was made possible by the sale of 39 stores in December to the controlling Boscov and Lakin families. According to the same source, the buyers took over the first- and second-lien loans while paying $11 million cash in part to cover specified expenses of the Chapter 11 case. About Boscov's Inc. Headquartered in Reading, Pennsylvania, Boscov's Inc. -- http://www.boscovs.com/-- is America's largest family-owned independent department store, with 49 stores in Pennsylvania, New York, New Jersey, Maryland, Delaware and Virginia. Boscov's Inc. and its debtor-affiliates filed for Chapter 11 protection on Aug. 4, 2008 (Bankr. D. Del. Case No. 08-11637). Judge Kevin Gross presides over the cases. David G. Heiman, Esq., and Thomas A. Wilson, Esq., at Jones Day, serve as the Debtors' lead counsel. The Debtors' financial advisor is Capstone Advisory Group and their investment banker is Lehman Brothers, Inc. The Debtors' claims agent is Kurtzman Carson Consultants L.L.C. Boscov's listed assets of $318.9 million against debt totaling $412.8 million. Secured creditors are owed $196.2 million. On November 21, Judge Kevin Gross approved the sale of the Debtors' assets to a family group led by former company chairman Albert Boscov and former company executive Edwin Lakin. The deal, valued at $300 million, was completed in December. Following the sale Boscov's Inc., and Boscov's Department Store, LLC, revised their corporate names to BSCV, Inc., and BSCV Department Store, LLC. (Boscov's Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BROWN'S GRADING: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Brown's Grading & Grinding, Inc. Post Office Box 707 Easley, SC 29641 fdba Brown & Rampey fdba Brown's Landscaping Bankruptcy Case No.: 09-01975 Type of Business: Brown's Grading & Grinding, Inc., provides lawn and garden services. Chapter 11 Petition Date: March 17, 2009 Court: United States Bankruptcy Court District of South Carolina (Spartanburg) Judge: Helen E. Burris Debtor's Counsel: Randy A. Skinner. Esq. Skinner and Associates Law Firm, LLC P.O. Box 1843 Greenville, SC 29602 Tel: (864) 232-2007 Fax: (864) 232-8496 Email: 1ras@bellsouth.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/scb09-01975.pdf The petition was signed by Cory L. Brown, corporate secretary of the Company. CACTUS AND BULLARD: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Cactus And Bullard, LLC 3534 E. Cochise Drive Phoenix, AZ 85028 Bankruptcy Case No.: 09-04292 Chapter 11 Petition Date: March 10, 2009 Court: District of Arizona (Phoenix) Judge: G. Case II Debtor's Counsel: Carlos M. Arboleda, Esq. arboledac@abfirm.com Arboleda Brechner 4545 E. Shea Blvd., #120 Phoenix, AZ 85028 Tel: (602) 482-0123 Fax: (602) 482-4068 Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $10 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Meridian Bank NA judgment $6,304,000 Kierland Office - Construction Division 7077 E Marilyn Rd, Ste 150 Scottsdale, AZ 85254 Kevin Reilly business debt $200,000 9 Belle Harbor Ct Center Moriches, NY 11934 Zone Commercial business debt $148,450 2125 E 5th St, Ste 122 Tempe, AZ 85281 Paul Bonheim business debt $125,000 Christopher Reilly business debt $100,000 Orlando And Julia Montano business debt $100,000 Schoolhouse Finance, LLC business debt $100,000 Thomas And Lori Schellinger business debt $100,000 James Neville business debt $75,000 Thomas Knobbe business debt $59,150 Paul And Judith Hochhouser business debt $50,000 Melissa Sapan business debt $50,000 Chid Associates business debt $50,000 SKD, Inc business debt $50,000 The Schwartz Trust business debt $42,000 Stephen And Patricia business debt $40,000 Burke Mastracci & Sons, LLC business debt $35,000 Thomas And Concetta business debt $31,300 Napolitano Timothy And Lisa Wintz business debt $30,000 Roy And Jill Bruno business debt $30,000 The petition was signed by Thomas Knobbe, manager. CARLOS RODRIGUEZ: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Carlos E. Rodriguez 10633 Chiquita St. North Hollywood, CA 91602 Bankruptcy Case No.: 09-12891 Chapter 11 Petition Date: Marc 17, 2009 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Kathleen Thompson Debtor's Counsel: Douglas D. Kappler, Esq. Robinson Diamant & Wolkowitz 1888 Century Pk., East Ste. 1500 Los Angeles, CA 90067 Tel: (310) 277-7400 Fax: (310) 277-7584 Email: aolvera@rdwlawcorp.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-12891.pdf The petition was signed by Carlos E. Rodriguez. CHAMATKAR HOSPITALITY: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Chamatkar Hospitality, LLC c/o Mr. Malwinder Waraich 9854 Kapalua Lane Elk Grove, CA 95624 Bankruptcy Case No.: 09-20169 Type of Business: Chamatkar Hospitality, LLC, is a single-asset, real estate debtor. Chapter 11 Petition Date: March 11, 2009 Court: United States Bankruptcy Court Western District of Louisiana (Lake Charles) Debtor's Counsel: Wade N. Kelly, Esq. 1777 Ryan Street P.O. Box 2065 Lake Charles, LA 70601 Tel: (337) 433-0234 Fax : 337-433-1274 Email: wnkellylaw@yahoo.com Total Assets: $4,297,200.00 Total Debts: $7,252,833.50 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/lawb09-20169.pdf The petition was signed by Harbhajan Kandola, managing member of the company. CHARLES BUCKELEW: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Charles O. Buckelew 1005 Section Line Rd. Albertville, Al 35950 Bankruptcy Case No.: 09-40739 Chapter 11 Petition Date: March 16, 2009 Court: United States Bankruptcy Court Northern District of Alabama (Anniston) Judge: James J. Robinson Debtor's Counsel: Carla Handy, Esq. McCord and Martin PO Box 45 Gadsden, AL 35902 Tel: (256) 546-0448 Email: mccordandmartin@comcast.net Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/alnb09-40739.pdf The petition was signed by Charles O. Buckelew. CHEMTURA CORP: Chapter 11 Filing Cues Moody's Junk Rating --------------------------------------------------------- Moody's Investors Service downgraded Chemtura Corporation's Corporate Family Rating to Ca from B3, and the Probability of Default Rating was lowered to D from Caa1 following the company's announcement that it has filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code with the United States Bankruptcy Court for the Southern District of New York. The ratings on the company's debt issues were also downgraded. The ratings had been under review for downgrade, with the new ratings being Moody's final ratings for the company. These ratings will be withdrawn in the near future due to the bankruptcy. These summarizes the ratings changes: Chemtura Corporation * Corporate Family Rating -- Ca from B3 * Probability of Default Rating -- D from Caa1 * Senior notes, $500 million due 2016 -- Caa3 from B3 -- LGD3 (41%) * Senior Unsecured Notes, $150 million due 2026 -- Caa3 from B3 -- LGD3 (41%) * Senior Unsecured Notes, $370 million due 2009 -- Caa3 from B3 -- LGD3 (41%) Our last rating action was to lower Chemtura's PDR to Caa1 from B2, its CFR to B3 from B2, the and the company's outstanding debt ratings to B3 on February 5, 2009 as Chemtura's operational performance and asset sale program had not resulted in liquidity improvement in line with Moody's prior expectations and the concern that covenants in the revolver would remain breached. Headquartered in Middlebury, Connecticut, Chemtura manufactures a variety of polymer additives, petroleum and lubricant additives, castable urethane pre-polymers, crop protection chemicals, brominated flame-retardants, recreational water treatment chemicals, and brominated specialty chemicals. For the LTM period ending December 31, 2008, the company had revenues of $3.5 billion. CHEMTURA CORP: Bankruptcy Filing Has Limited Impact on TETRA ------------------------------------------------------------ The Woodlands, Texas-based TETRA Technologies, Inc. in 2006 entered into a number of agreements with Chemtura Corp. relating to Tetra's Arkansas operations. In light of Chemtura's bankruptcy filing, Tetra said that, although it is impossible to predict the outcome of contractual arrangements as a result of the bankruptcy filings, Tetra does not believe that Chemtura's filing will have a material impact on its own operations. However, Tetra has contingency plans for the procurement of alternative feedstock supplies. "We believe that the agreements with Chemtura are symbiotic, in that they benefit both parties. We further believe that Chemtura has an incentive to continue our existing agreements and we are optimistic that the bankruptcy filing will not affect our existing arrangements; however, no assurances can be given that the agreements will survive the bankruptcy proceeding. TETRA did not base its Arkansas investment solely on the operations of one third-party plant. If necessary, TETRA potentially can turn to another bromine producer that has a plant in close proximity to our El Dorado facility, as a way to mitigate the impact of any adverse action by Chemtura. Furthermore, starting in the 1990s, TETRA acquired approximately 33,000 gross acres of brine leases in the area. With additional capital expenditures, these leases could allow us to supply our own brine to the facility, if necessary. In summary, while we believe that our agreements with Chemtura are mutually beneficial to the parties and that Chemtura has an incentive to continue our agreements, TETRA does have other options regarding feedstock to our El Dorado fluids plant, should issues arise regarding Chemtura's ability to supply those feedstocks," concluded Geoffrey M. Hertel, President and Chief Executive Officer of TETRA. TETRA is an oil and gas services company, including an integrated calcium chloride and brominated products manufacturing operation that supplies feedstocks to energy markets, as well as other markets. About Chemtura Corp. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D. N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. CHEMTURA CORP: List of 50 Largest Unsecured Creditors ----------------------------------------------------- Chemtura Corporation and its debtor-affiliates filed with the United States Bankruptcy Court for the District of Delaware a list of 50 largest unsecured creditors. The Debtor's Largest Unsecured Creditors are: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wells Fargo Bank, N.A. Corporate Notes $500,000,000 Lynn M. Steiner 2016 Vice President Corporate Trust Services MAC N9311-110 Minneapolis, MN 55479 Tel: (262) 361-4376 The Bank of New York Melon Corporate Notes $370,000,000 Trust Company, N.A. 2009 Irina Bogomolny N. LaSalle Street, Suite 1020 Chicago, IL 60602 Tel: (312) 827-8691 Fax: (312) 827-8542 Manufacturers & Traders Trust Corporate $150,000,000 Co./Deutsche Bank Debentures 2016 Kevin Ebert, CCTS Corporate Trust Officer 25 South Charles Street 16th Floor Baltimore, MD 21201 Tel: (410) 244-4632 CITIBANK, N.A. Bank Loan Syndicated Loan $132,800,000 Syndications Department Two Penns Way New Castle, Delaware 19720 Occidental Chemical Corp. Trade Claim $3,455,642 P.O. Box 406422 Atlanta, GA 75356 SAP Americas Trade Claim $3,349,859 3999 Westchester Pike Newton Square, PA 19073 Nisso America, Inc. Trade Claim $2,986,973 Attn: Mr. Nakamura 45 Broadway, Suite 2120 New York, NY 10006 Tel: (212) 490-0350 Fax: (212) 972-9361 Lyondell Chemical Co. Trade Claim $2,734,761 2640 Collections Dr Ctr Chicago, IL 60693 Tel: (610) 359-3241 Synthesia Trade Claim $2,718,619 Aliachem A.S., Odstepny Zavod Se Sidlem:Pardubice Pardubice - Semtin 53217 Tel: 420-466-821-111 Fax: 420-466-821-020 Sinon Corporation Trade Claim $2,382,450 111, Chung Shan Road Ta-Tu Hsiang, Taichung Hsien 00432 TW Tel: 886-4-26934261 Fax: 886-4-26934265 Preston Park 2004 LLC Trade Claim $1,160,443 The Hampshire Partners Fund VI LLC P.O. Box 9020 Hicksville, NY 11802 Caremark Trade Claim $1,145,345 Prescription Services Division P.O. Box 840336 Dallas, TX 75284 Tel: (847) 559-5762 Greenberg Traurig PA Trade Claim $1,124,613 1221 Brickell Avenue Miami, Fl 33131 Tel: 305-579-0500 Fax: 305-579-0717 Thermphos International BV Trade Claim $1,094,960 P.O. Box 406 Ak Vlissingen - NL 4380NL Tel: 0031-113-689557 Fax: 0031-113-689501 Yash Technologies, Inc. Trade Claim $1,020,340 605 17th Avenue East Moline, IL 61244 Tel: 309-755-0433 Fax: 309-796-1242 Shell Chemicals Americas Inc. Trade Claim $948,325 Box 240 STN-M Calgary, Alberta T2P 2H6 Tel: 866-897-4355 Fax: 800-567-8862 Philippe.Godin@shell.com Gulf Stabilizers Industries Trade Claim $918,000 Box 35625 Jubail Industrial City 31961 Tel: 966-3341-7727 Fax: 00966-3341-6033 Invista, S.A.R.L. Trade Claim $874,877 P.O. Box 905624 Charlotte, NC 28290-5624 Tel: 704-586-7300 Fax: 704-586-7500 PPG Industries Inc. Trade Claim $841,891 Box 360175M Pittsburgh, PA 15251-6175 Tel: 800-323-2487 Fax: 724-325-5049 Weil, Gotshal and Manges Trade Claim $832,986 1300 Eve St. NW. Ste 900 Washington, DC 20005 Tel: 202-682-7000 Fax: 202-857-0940 Acid Chem (USA) Inc. Trade Claim $771,344 201 W. Passaic Street Suite 100 Rochelle Park, NJ 07662 Tel: 201-909-0305 Fax: 201-909-9892 BASF Corporation Box 360941 Trade Claim $764,931 Pittsburgh, PA 15251-6941 Tel: 973-895-8256 Fax: 973-426-5039 CIBA Corporation Trade Claim $740,956 Box 7247-7318 Philadelphia, PA 19170-7318 BMR-Landmark At Eastview LLC Trade Claim $737,296 Attn: General Counsel/Real Estate Box 51918A Los Angeles, CA 90051-6218 Tel: 858-485-9840 Fax: 858-485-9843 Shell Chemical LP Trade Claim $710,922 P.O. Box 7247-6189 Philadelphia, PA 19170-6189 Tel: 800-872-7435 DLA Piper US LLP Trade Claim $692,943 111 S Calvert St. Ste. 1950 Baltimore, MD 21202-6193 Tel: 410-580-3000 Fax: 410-580-3665 O'Melveny & Myers, LLP Trade Claim $670,101 PO Box 894436 Los Angeles, CA 90189-4436 WS Packaging Group Inc. Trade Claim $665,472 P.O. Box 127 Algoma, WI 54201 Tel: 920-487-3424 Fax: 920-866-6483 Sapient Corp Trade Claim $652,430 P.O. Box 4886 Boston, MA 02212 Plastican Inc. Trade Claim $651,216 P.O. Box 868 Leominster, MA 01453 Tel: 978-537-4911 Fax: 978-537-6376 Lyondell Chemical Company Trade Claim $614,394 P.O. Box 3234 Carol Stream, IL 60132-3234 Tel: 713-652-4151 Fax: 713-652-4151 Merrill Lynch Global Markets Trade Claim $598,120 and Investment Banking Chase Manhattan Plaza New York, NY 10081-6500 Tel: 212-449-4630 SI Group, Inc. Trade Claim $571,505 Lockbox 088168 Chicago, IL 60695-1168 Tel: 518-347-4200 PPG Industries Inc. Trade Claim $559,002 1 PPG PI Pittsburgh, PA 15272-0001 Tel: 412-434-3131 Fax: 412-434-2448 Sedgwick, Detert, Trade Claim $551,069 Moran & Arnold Steuart Tower, 8th Floor San Francisco, CA 94105 Kyowa Hakko U.S.A. Inc. Trade Claim $549,357 W502085 Box 7777 Philadelphia, PA 19175-2085 Tel: 212-319-5353 Fax: 212-421-1283 Synasia Inc. Trade Claim $528,971 240 Amboy Ave Metuchen, NJ 08840 Tel: 732-205-9880 Fax: 732-205-1788 AG Processing, Inc. Trade Claim $511,132 Box 3480 Omaha, NE 68103-0480 Fax: 402-492-7721 Skadden, Arps, Slate, Trade Claim $496,825 Meagher & Flom LLP Four Times Square New York, NY 10036 Tel: 212-735-3000 Fax: 212-735-2000 Patrick Products Inc. Trade Claim $483,171 150 S Werner St. Leipsic, OH 45856 Tel: 419-943-3733 Fax: 419-943-3734 American Chemistry Council Trade Claim $470,360 Inc. Department 6044 Washington, DC 20042-6044 Holly Oak Chemical Inc. Trade Claim $456,028 P.O. Box 266 Fountain Inn, SC 29644 Tel: 800-552-5363 Fax: 864-862-1474 Packaging Corp of America Trade Claim $454,951 PO Box 532058 Atlanta, GA 30353 Covalence Specialty Coatings Trade Claim $448,222 Dept. CH10372 Palatine, IL 60055-0372 ADM Archer Daniels Midland Trade Claim $427,514 Box 92572 Chicago, IL 60675-2572 Tel: 651 388-7111 Fax: 217-424-6196 PMC Biogenex, Inc. Trade Claim $425,315 PO Box 8500-7346 Philadelphia, PA 19178 Tel: 800-872-1117 Fax: 856-533-1896 Jiangsu Yabang Import Trade Claim $425,243 & Export Co. Ltd. R 205 Niutang Bridge Changzhou City Jiangsu, China 213163 Tel: 86-519-86390292 Fax: 86-519-86390287 M L Smith Jr. Inc. Trade Claim $414,404 P.O. Box 1717 Ruston, LA 71273-1717 Tel: 318-255-4474 Fax: 318-255-8661 AKZO Nobel Functional Trade Claim $412,850 Chemicals LLC Box 905361 Charlotte, NC 28290-5361 Tel: 800-906-9977 Fax: 312-544-7159 Rimex Supply Ltd. Trade Claim $406,340 9726 186th St Surrey, British Columbia, Canada V4N 3N7 Tel: 604-888-0025 Fax: 604-888-7642 Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. CHRYSLER LLC: Faces July Cash Crunch, Doubts Survival in Ch. 11 --------------------------------------------------------------- Even if Chrysler LLC gets additional government loans, it could face another cash shortage in July when revenue dries up as the company shuts down its factories for two weeks to change from one model year to the next, its Chief Financial Officer Ron Kolka, said, according to The Associated Press. "Chrysler's viability plan submitted to the Treasury Department on Feb. 17, calls for the additional government aid. Following that, the next critical low point in cash is July shutdown," Mr. Kolka, as quoted by The Associated Press, said. Tom Krisher at The Associated Press reports that the Company's Chief Financial Officer, in a brief telephone interview, said the Company planned for the $4 billion it received Jan. 2 to last through March 31. The Company is talking with the Obama administration's autos task force about getting another $5 billion, and faces a March 31 deadline to complete its plan to show how it can become viable and repay the loans. Sources say that automakers generally book revenue from a vehicle once it leaves the factory and heads for a dealership. But when it doesn't produce cars during the shutdown, the revenue stops flowing. Mr. Kolka said Chrysler planned conservatively so the Company can be viable even at the current U.S. industry annual sales rate of 9.1 million vehicles, the lowest level in 27 years. General Motors Corp. and Chrysler admitted in their viability plans submitted to the U.S. Treasury on February 17 that they considered bankruptcy scenarios, but ruled out the idea, citing that a Chapter 11 filing would result to plummeting sales, more loans required from the U.S. government, and the collapse of dealers and suppliers. Chrysler Still Says No to Bankruptcy Chrysler has reiterated its stance against a bankruptcy filing. Chrysler Chairman Robert Nardelli said he doubts the struggling automaker would survive a government-sponsored bankruptcy, the New York Times reported. Chrysler's restructuring plan, submitted to the U.S. government Feb. 17, estimated the company would require as much as $25 billion in assistance if bankruptcy protection were sought, the Times said. According to Gene Laverty of Bloomberg, Mr. Nardelli told the newspaper he doesn't have a lot of confidence that Chrysler could emerge from bankruptcy in the current environment. The automaker is seeking $4 billion in loans from the U.S. government in addition to $4 billion in aid already received. Chrysler said in its viability plan that it is considering three alternatives -- (i) to stay as a stand alone company, (ii) seek a strategic partnership or consolidation with other automakers, and (iii) file for Chapter 11 as a first step in an orderly wind down. Chrysler's management said that it has recommended that Chrysler continue its stand-alone plan while it pursues an alliance. The stand-alone plan requires additional $5 billion from the U.S. government, on top of the $4 billion it had earlier provided, and requires concessions from unions and other parties. Chrysler said that if its not able to restructure its balance sheet, negotiated the targeted concessions from constituents, and receive additional $5 billion in government funding, its only alternative is to file for Chapter 11 as a first step in an orderly wind down. Chrysler stated that in the event of a bankruptcy filing, it would seek debtor-in-possession financing from both private sector lenders and the U.S. Government. "We believe the estimated size of the financing need is $24 billion over a two year period." Chrysler added that without adequate DIP financing, it estimates that: -- First lien lenders will only realize a 25% recovery. -- The U.S. government will recover five cents on the dollar. -- All other creditors will receive nothing. A copy of the Chrysler viability plan is available at: http://ResearchArchives.com/t/s?39a3 A copy of GM's viability plan is available at: http://researcharchives.com/t/s?39a4 About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Dec. 3, 2008, Dominion Bond Rating Service downgraded the ratings of Chrysler LLC, including Chrysler's Issuer Rating to CC from CCC (high). Chrysler's First Lien Secured Credit Facility and Second Lien Secured Credit Facility have also been downgraded to CCC and CC (low) respectively. All trends are Negative. The ratings action reflects Chrysler's challenge to maintain sufficient liquidity balances amid severe industry conditions that have deteriorated alarmingly over the past few months and are not expected to improve in the near term. With this ratings action, Chrysler is removed from Under Review with Negative Implications, where it was placed on Nov. 7, 2008. As reported in the Troubled Company Reporter on Aug. 11, 2008, Standard & Poor's Ratings Services lowered its ratings on Chrysler LLC, including the corporate credit rating, to 'CCC+' from 'B-'. On July 31, 2008, TCR said that Fitch Ratings downgraded the Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'. The Rating Outlook is Negative. The downgrade reflects Chrysler's restricted access to economic retail financing for its vehicles, which is expected to result in a further step-down in retail volumes. Lack of competitive financing is also expected to result in more costly subvention payments and other forms of sales incentives. Fitch is also concerned with the state of the securitization market and the ability of the automakers to access this market on an economic basis over the near term, given the steep drop in residual values, higher default rates, higher loss severity being experienced and jittery capital market. As reported in the TCR on Dec. 3, 2008, Dominion Bond Rating Service downgraded on Nov. 20, 2008, the ratings of Chrysler LLC, including Chrysler's Issuer Rating to CC from CCC (high). Chrysler's First Lien Secured Credit Facility and Second Lien Secured Credit Facility have also been downgraded to CCC and CC (low) respectively. All trends are Negative. The ratings action reflects Chrysler's challenge to maintain sufficient liquidity balances amid severe industry conditions that have deteriorated alarmingly over the past few months and are not expected to improve in the near term. With this ratings action, Chrysler is removed from Under Review with Negative Implications, where it was placed on Nov. 7, 2008. CIRCLE EAST: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Circle East Manor Apartments, LLC P.O. Box 50221 Colorado Springs, CO 80949 Bankruptcy Case No.: 09-14304 Type of Business: The company is a single asset real estate debtor. Chapter 11 Petition Date: March 17, 2009 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: A. Bruce Campbell Debtor's Counsel: John Randolph Torbet, Esq. 320 E. Costilla St. Colorado Springs, CO 80903 Tel: (719) 471-9300 Fax: (719) 578-5671 Email: JRTorbet@aol.com Total Assets: $1,802,000.00 Total Debts: $1,480,000.00 The Debtor did not file a list of its 20 largest unsecured creditors, together with its petition. The petition was signed by Kevin R. Ryan, Manager of the Company. CITGO PETROLEUM: S&P Affirms Corporate Credit Rating at 'BB' ------------------------------------------------------------ Standard & Poor's Ratings Services said that it affirmed its ratings on CITGO Petroleum Corp. including its 'BB' corporate credit rating, and removed them from CreditWatch with negative implications. The outlook is negative. "The ratings, which S&P placed on CreditWatch on Feb. 2, 2009, were removed from Watch due to the company's improved liquidity position" said Standard & Poor's credit analyst Amy Eddy. "CITGO's liquidity profile improved after successfully amending certain technical definitions in its $450 million accounts receivable securitization program. The amendment has allowed CITGO to repay a considerable amount of funds previously borrowed under its $1.15 billion senior secured revolving credit facility." As a result of repaying borrowings under the revolving credit facility, the cushion under the company's maximum total debt to capital covenant of 55% also improved; though, the cushion is expected to remain tight in 2009. The rating reflects S&P's expectations that refining margins will be weak in 2009, which will weigh on the company's profitability and cash flow levels. The company has deferred significant capital spending until 2010, much of it regulatory, on account of poor market conditions. Although this will alleviate near-term cash flow uses, if market conditions do not improve materially in 2010, S&P would expect the company to have to outspend cash flow by a wide margin and seek alternate sources of funding. The rating also reflects the heightened risk and uncertainties associated with CITGO's parent, Petroleos de Venezuela S.A. (PDVSA; BB-/Negative/--), and the potential impact to CITGO's credit quality. In light of lower oil prices combined with robust social spending programs in Venezuela, PDVSA could implement measures to optimize its returns from CITGO that could prove detrimental to CITGO's financial profile. The rating on CITGO is one notch higher than PDVSA because of the relative strength of the refiner's financial profile and the asset protection afforded to CITGO's creditors, but S&P believes it is not entirely immune to the financial pressures at PDVSA and in the Republic of Venezuela. S&P will review further challenges at PDVSA and the related impact on CITGO as they occur. CITGO's satisfactory business risk profile reflects the company's strength as a stand-alone entity and is based on the scale and complexity of its refining operations, which have net crude processing capacity of 750,000 barrels per day through three fuel refineries. Over the past two years the company has sold several of its assets, including two asphalt refineries, its interests in major refined-products pipelines, and its 41% nonoperating interest in the Lyondell-CITGO Refining L.P. (LCR; unrated) joint venture to Lyondell Chemical Co. in 2006. The company upstreams proceeds from asset sales to PDVSA. Although the reduction in CITGO's asset base is unfavorable for credit quality, the company's refining operations following the sales remain considerable and are adequate to support the ratings. CITGO's remaining throughput still places it among the largest refiners in the U.S. The company gains substantial competitive advantage from its ability to process large volumes of heavy sour crude oils -- which, typically trade at sharp discounts to better- quality crude oil -- into high-margin products, and from its relatively large refineries, which give it economies of scale. The outlook on CITGO is negative. The negative outlook reflects S&P's expectations that CITGO's profitability measures will likely be weaker in the near-term, which combined with high capital spending requirements could pressure the rating. S&P could also lower the rating if liquidity declines from current levels or if its owner PDVSA implements actions that could prove detrimental to CITGO's credit quality. Conversely, S&P could revise the outlook to stable if S&P has greater confidence that credit measures will not weaken due to its ownership by PDVSA and that its near-term credit measures remain acceptable in light of current market conditions and considerable capital spending plans in 2010. CITIGROUP INC: Senator Wants Unit's Retention Payments Blocked -------------------------------------------------------------- James R. Hagerty and Aaron Lucchetti at The Wall Street Journal report that Sen. Robert Menendez has asked Treasury Secretary Geithner to "use every legal means available" to stop $3 billion in previously disclosed retention payments to brokers at a joint venture being formed by Morgan Stanley and Citigroup Inc.'s Smith Barney unit. Citigroup and Morgan Stanley will jointly own the joint venture, WSJ relates. WSJ quoted Mr. Menendez as saying, "These payouts constitute misuse of taxpayer money and are an insult to hardworking families who are saving every penny." Morgan Stanley denied in a statement that the payments are bonuses. According to Morgan Stanley's statement, the payments are loans that won't start paying until 2010 and can't be kept in full unless the broker stays at the company for nine years. "The program is necessary because our financial advisers are being poached by competitors," Morgan Stanley said. Citigroup Causes Hedge Funds Losses Susan Pulliam and Jenny Strasburg at WSJ relate that some hedge funds have suffered losses on a trade they thought would be easy money based on the latest bailout of Citigroup. WSJ notes that hedge funds, hoping to get a quick profit based on the conversion terms being offered by Citigroup to preferred shareholders, bought preferred shares of the Company after it said in February that it would convert preferred shares into common stock. WSJ states that the hedge funds' strategy of buying Citigroup preferred shares while selling short the common stock backfired. The price of Citigroup common shares has tripled since March 5, including a 23% rise on Wednesday that left the stock at $3.08 in the New York Stock Exchange composite trading. According to WSJ, the hedge funds' losses from Citigroup appears to be the government's gain, since preferred holders would be converting each share of preferred stock into common stock that has risen mightily in value. WSJ says that the difference between the preferred and common shares as of Wednesday was $8.45, based on the conversion rate of 7.31. 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. CITY OF NEW ORLEANS: Moody's Affirms 'Baa3' Rating on Tax Bonds --------------------------------------------------------------- Moody's Investors Service has affirmed the Baa3 rating and stable outlook on the City of New Orleans' general obligation unlimited tax bonds affecting $523.9 million in outstanding debt. In addition, Moody's have also affirmed the Baa3 rating on the City's Downtown Development District Bonds, Series 2001 and Drainage System Limited Tax and the Ba1 rating on the Limited Tax Bonds, Series 2005 and the Audubon Commission Limited Tax Bonds, Series 1997. Finally, Moody's affirmed the Ba3 rating on the City's Pension Obligation Bonds, Series 2000. All of the City's ratings carry a stable outlook. Assignment of the Baa3 rating on the GOULT debt reflects the Board of Liquidation's strong management and willingness to adjust rates as necessary. The rating also takes into consideration the recovery in key revenues streams and a five year forecast that projects the City will be self sufficient by 2011. The rating also takes into consideration ongoing pressures on financial operations in the General Fund. The Baa3 ratings on certain limited tax debt take into consideration strong debt service coverage of 8.67 times on the Downtown Development District Bond, Series 2001 and 6.59 times on Drainage System Limited Tax debt. The Ba1 ratings on the remaining limited tax debt reflect adequate yet narrower debt service coverage of 1.10 times for Limited Tax Bonds, Series 2005 and 1.80 times on Audubon Commission Limited Tax Bonds, Series 1997. Finally, maintenance of the Ba3 rating on the pension obligation bonds reflects the weaker pledge of excess revenues from general fund operations and the exposure to insured variable rate demand obligations, and interest expenditures exceeding those anticipated when the bonds were first issued Board Of Liquidation Key Factor In Rating Assignments The Board of Liquidation was established by the State of Louisiana legislature in 1880 and made a "body corporate" separate and distinct from the City in 1890. The Board has exclusive control and direction of all matters related to the issuance and repayment of the city's general obligation unlimited tax bonds. The repayment of these bonds is therefore separated and excluded from the City's operating budget and a dedicated source and security exists for the payment of the City's GOULT. All ad valorem taxes levied by the City for the payment of GO bonds are transferred to the Board. The Board has the authority to enforce imposition and collection of sufficient taxes for the payment of GO bonds upon a failure of the City Council to do so. Because of this authority and its distinct separation from the City, Moody's believes this provides strong protection for bondholders. The Board demonstrated its conviction to amply meet debt service when it increased the debt service tax rate for unlimited tax bonds from $28.4 mills in fiscal 2005 to $38.2 mills in fiscal 2006, in response to projected declines in assessed value as a result of damage caused by Hurricane Katrina. After collecting 150% of the amount forecasted for 2006, the tax rate was decreased to $31.7 mills for fiscal 2007. The tax rate has decreased further to $23.80 mills in 2008 and 2009 in order to keep revenues more aligned with annual debt service requirements. Moody's believes that the Board's actions demonstrate its willingness to adjust the tax rate as necessary and this is a key factor in the Baa3 rating. Although the Board is not required to maintain reserves for the payment of GO bonds, it has been the policy of the Board, since 1951, to maintain reserves of approximately one-half of the maximum amount of principal and interest on GO bonds payable in one year. The Board had to rely on some of the reserves in 2006 to service debt; however, these reserves were completely replenished to prior year levels and are now at an estimated $30 million. The presence of the reserve was significant and provided bondholders comfort in the early months after Katrina, when damage to the tax base and the affects on pledged revenues were unknown; therefore, Moody's notes that it is significant that the Board continues to maintain a strong debt service reserve. Positive Growth In Assessed Valuations Hurricane Katrina resulted in a 5-month delay in the mailing of property tax bills for fiscal 2006. Without knowing the full extent of damage to the tax base, City officials created a budget that assumed a 50% reduction in property values. The actual valuation loss was only 25% for fiscal 2006. Moody's has noted in prior reports that real property in Orleans Parish qualify for a $7,500 homestead exemption on the assessed value of an owner occupied home, which is set at 10% of full value. Therefore, on a $100,000 valued home, the assessed value is only $2,500 and homes valued at $75,000 or less are effectively not taxed. For fiscal 2007, the assessment cycle returned to the normal schedule and tax bills were mailed in December of 2006 and due by January 31st of 2007. Total valuations for fiscal 2007 increased 11% over 2006 and remain only 12% below 2005. For fiscal 2008, the full valuation increased another 33% to a sizable $21 billion which exceeds levels even before the storm. Although the assessed valuation increase only 2.8% in fiscal 2009, millions of Federal dollars are currently beginning to flow which should attract additional population and business growth. Population is currently estimated to be 329,000 which approximates 72% of the pre-Katrina level. Recovery In Key Revenues Continues In fiscal 2007, sales tax revenues provided 28% of total General Fund operating revenues making it the primary revenue source for the City's general fund. Sales tax revenues are displaying faster than expected recovery which is significant for the Baa3 rating given the City's reliance on this revenue source. Sales tax revenues for 2005 were 24% below 2004 at $116 million. In 2006, collections totaled $124 million which was 19% below 2004 but better than earlier estimates that projected a 30% decline. Fiscal 2004 serves as a base year given it was the last full fiscal year before the hurricane. Sales taxes increased but remained 11% under 2004 for fiscal 2007 to $133 million. Sales taxes are projected to increase in fiscal 2008 to $142 million which would be 29% of General Fund revenues. Over the last three fiscal years, the City has been able to establish a higher General Fund balance than before the storm and has created an emergency fund equal to 8% of General Fund expenditure. The total fund balance increased from $21 million, equal to 4.8% of revenues, in fiscal 2003 to a peak of $99 million in fiscal 2006 which was equal to 27% of revenues. During this period, the unreserved fund balance increased from $11.4 million to $95 million. In fiscal 2007, the total fund balance decreased to $95 million and the unreserved balance was $78 million. During the 2005 fiscal year, City officials enacted significant staffing and other cuts to bring expenditures in line with available revenues and appeared committed to making additional cuts if needed. The improvement in the fund balance was assisted by the budget cuts but primarily driven by influxes of cash from Federal and State government funds received after the hurricane. Therefore, during fiscal 2008, the General Fund reserves are expected to decrease significantly as designated funds for capital outlay were spent. Additionally, during 2008, the City experienced cost overruns associated with police overtime which they plan to control during fiscal 2009. City officials have identified their emergency fund reserve as $32.5 million equal to 7.98% and close to the 8% target for fiscal 2007. Although this reserve will be $34 million in fiscal 2008, the 7.2% of expenditures is below the 8% target. For fiscal 2009, the Mayor's budget amended the originally adopted budget to cut expenditure and ensure the emergency fund would equal 8% of expenditures. Moody's believes that this fund balance reserve is significant to demonstrating prudent fiscal management. A trend of healthy reserves will continue to be a consideration in the City's rating assignments. City officials have provided reasonable financial projections which indicate that the use of one time funding from government sources will end in the 2010 fiscal year so that City revenues are projected to be sufficient for supporting General Fund expenditures during 2011. City officials continue to demonstrate the use of long term projections which is also a favorable factor in the rating. Moody's believes the projections are reasonable and include some conservative amounts. The projections include the increased interest rate costs associated with the pension obligation bonds. Risk In Pension Obligation Bonds In 2000, the City issued Pension Obligation Bonds, Series 2001 that are secured by excess revenue of the General Fund. Moody's notes that an important distinction in this rating is the bonds were not issued through the Board of Liquidation and there is no authority to increase taxes to repay the bonds. This variable rate debt is enhanced by a standby bond purchase agreement with JP Morgan (senior unsecured rated Aa3/Stable) and insured by Ambac (Baa1 Financial Strength rating/negative outlook) Ambac's downgrades impacted the ability to remarket the bonds and triggered a change in interest rates on the liquidity facility. The total outstanding variable rate amount of $138.5 million is hedged by a swap with UBS. With a failed remarketing, the bonds have been held by the bank since February of 2008. The trigger on the bank bonds to become a term loan is the expiration date of the standby agreement. The current standby agreement was extended on December 18, 2008 and expires on December 18, 2009. JP Morgan has provided the City with four annual extensions since December 18, 2006. If the agreement is not extended on December 18, 2009, the term loan will required the city to begin accelerated repayment in semiannual principal payments over 5 years beginning on June 18, 2010. In order to be conservative, officials are planning to include this accelerated payment of almost $30 million in development of the 2010 budget. However, the City is currently working to provide an alternative solution to prevent the accelerated payments and is working to successfully remarket the variable rate demand bonds. The City is also negotiating with JP Morgan to provide an annual extension to the standby purchase agreement. Also as a result of the downgrade on Ambac, the interest rate on the variable rate bonds changed from SIFMA to prime plus one which is currently at 4.25%. Under the swap with UBS, the City pays a fixed 6.95% rate and received one month LIBOR. With LIBOR currently at 0.56%, the City is paying approximately 10.6% in interest when the original swap was initiated as a cost of tender swap to net the 6.95% fixed rate cost. The rising cost in interest rates resulted in an increase of approximately $4 million during the 2008 fiscal year. The 2009 budget includes the higher interest rate for total debt service repayment. Favorably, the UBS swap does not require collateral posting by the city. The current mark to market on the swap is a $43 million against the City. Termination of the swap could be triggered if one or more of the City's outstanding senior debt falls below Baa3 or BBB- for both Moody's and S&P, respectively. Moody's notes that when the City's highest rating was below investment grade following Hurricane Katrina, by both agencies, UBS worked with the City and did not terminate the swap. Key Statistics: -- Population (2000): 455,000 -- Population 2007: 329,000 -- 2008 Full valuation: $19 billion -- 2008 Assessed valuation: $2.2 billion -- 2000 Per Capita Income: 17,258 (79.9% of US) -- Payout (10 years): 52% -- 2007 General Fund balance: $95 million (22.5% of General Fund revenues) -- 2007 Unreserved General Fund balance: $78.6 million (18.6% General Fund revenues) Outstanding Debt: -- GOULT: $523.9 million -- Drainage Tax bond: $22.7 million -- Downtown Development District: $6.1 million -- Limited Tax Bonds, Series 2005: $28.4 million -- Audubon Limited Tax Bonds: $2.4 million -- Pension Obligation Bonds: $138.5 million The last rating action for the City of New Orleans was on October 30, 2007 when the Baa3 GOULT rating was affirmed. CLARK PROPERTIES: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Clark Properties of Missouri, Inc. P.O. Box E Nevada, MO 64772 Bankruptcy Case No.: 09-30198 Chapter 11 Petition Date: March 11, 2009 Court: United States Bankruptcy Court Western District of Missouri (Joplin) Debtor's Counsel: Norman E. Rouse, Esq. Collins, Webster & Rouse 20th St and Prosperity Rd P.O. Box 1846 Joplin, MO 64802-1846 Tel: 417-782-2222 Fax : 417-782-1003 Email: twelch@cwrcave.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mowb09-30198-11.pdf The petition was signed by Barry Clark, president and secretary of the Company. CMP SUSQUEHANNA: Launches Exchange Offer to Refinance $187MM Notes ------------------------------------------------------------------ CMP Susquehanna Radio Holdings Corp. and CMP Susquehanna Corp., its wholly owned subsidiary, have commenced an exchange offer and consent solicitation to refinance CMPSC's 9-7/8% Senior Subordinated Notes due 2014. The aggregate principal amount of the Existing Notes outstanding as of March 6, 2009, was $187.6 million. The exchange offer and consent solicitation will expire at 12:00 midnight, New York City time, on April 3, 2009, unless extended or earlier terminated by CMPSC and the Company. To be eligible to receive the total exchange amount, including the early exchange premium, eligible holders of Existing Notes must tender their Existing Notes prior to 5:00 p.m., New York City time, March 23, 2009, unless the deadline is extended by CMPSC and the Company. The exchange offer and consent solicitation are only being made, and copies of the exchange offer documents will only be made available, to holders of Existing Notes that have certified certain matters to CMPSC, including their status as either "qualified institutional buyers," as that term is defined in Rule 144A under the Securities Act of 1933, or persons other than "U.S. persons," as that term is defined in Rule 902 under the Securities Act of 1933. The Company and CMPSC are offering to exchange all of the outstanding Existing Notes held by eligible holders in exchange for: (1) up to $15 million aggregate principal amount of Variable Rate Senior Subordinated Secured Second Lien Notes due 2014 of CMPSC; (2) up to $35 million in shares of Series A preferred stock of the Company; and (3) warrants exercisable for shares of the Company's common stock representing, in the aggregate, up to 40% of the outstanding common stock on a fully diluted basis. The New Notes will be secured on a second-priority basis by a security interest in substantially all of CMPSC's existing and future assets and will be subordinated to all first priority senior secured indebtedness of CMPSC, including its senior credit facilities. In addition, the New Notes will be initially guaranteed on a second-priority senior secured subordinated basis by the Company and each subsidiary of the Company that guarantees the CMPSC's senior credit facilities. The New Preferred Stock, with an initial stated value of $10 per share, will pay dividends semi-annually in arrears, only when, as and if declared by the Company's board of directors from funds legally available, payable in additional shares of New Preferred Stock at an annual rate equal to 9.875% of the stated value per share. Dividends will be cumulative from the date of first issuance, and will be calculated and compounded semiannually. Shares of New Preferred Stock will be redeemable at the option of the Company at specified prices determined based on the date of redemption. The New Warrants will be immediately exercisable for shares of the Company's common stock at an exercise price of $0.01 per share, to comprise, as of the date of issuance, up to 40% of the outstanding shares of common stock on a fully diluted basis. Holders of the New Warrants will have customary "tag-along" rights, preemptive rights and anti-dilution protections. Eligible Holders of Existing Notes that validly tender their Existing Notes prior to the Early Participation Deadline, and whose notes are accepted for exchange by CMPSC, will receive the total exchange amount set forth below for each $1,000 in principal amount of Existing Notes: Principal Early Total Exchange Exchange Participation Amount (Includes Amount Amount Participation Amount) --------- ------------- --------------------- $63.97 in New Notes $15.99 in New Notes $79.96 in New Notes $149.26 in shares $37.31 in shares $186.57 in shares of New Preferred of New Preferred of New Preferred Stock Stock Stock New Warrants New Warrants New Warrants exercisable for exercisable for exercisable for 17.06 shares 4.26 shares 21.32 shares of Radio Holdings of Radio Holdings of Radio Holdings Common Stock Common Stock Common Stock Eligible Holders of Existing Notes that validly tender their Existing Notes after the Early Participation Deadline but prior to the Expiration Time, and whose notes are accepted for exchange, will receive the principal exchange amount but not the early participation amount. Holders will not be entitled to withdraw tenders of their Existing Notes except under certain limited circumstances. Concurrently with the exchange offer, CMPSC is soliciting consents from Eligible Holders that held Existing Notes as of March 6, 2009, to proposed amendments to the indenture governing the Existing Notes that would eliminate substantially all of the restrictive covenants, certain events of default and other related provisions in the indenture. No consideration is being paid to holders of Existing Notes in connection with the consent solicitation. Consummation of the exchange offer is subject to certain conditions, including, without limitation, the receipt of the requisite consents required to amend the indenture governing the Existing Notes -- a condition that may not be waived -- and the tender of at least 98% of the outstanding amount of Existing Notes, as well as certain additional conditions, which must also be satisfied or waived. The settlement date in respect of any Existing Notes that are validly tendered and accepted for exchange and the consents that are validly delivered prior to the Early Participation Deadline will be promptly after the Early Participation Deadline and is expected to be on or about March 24, 2009, the first business day following the Early Participation Deadline, unless the exchange offer or consent solicitation is extended or earlier terminated by the Company and CMPSC in their sole discretion. The settlement date in respect of any Existing Notes that are validly tendered and accepted for exchange and the consents that are validly delivered after the Early Participation Deadline but prior to the Expiration Time will be promptly after the Expiration Time and is expected to be on April 4, 2009, the first business day following the Expiration Time, unless the exchange offer or consent solicitation is extended or earlier terminated by the Company and CMPSC in their sole discretion. Prior to launching the exchange offer and consent solicitation, the Company and CMPSC entered into agreements with Eligible Holders of approximately 72% of the outstanding aggregate principal amount of the Existing Notes pursuant to which such Eligible Holders have agreed to validly tender their Existing Notes and validly deliver and not validly revoke the corresponding consents with respect to such Existing Notes, subject to the terms and conditions of such agreements and the offer documents. Eligible Holders may request documents by contacting the information agent, Global Bondholders Services Corporation, at (toll-free) 866-873-7700. The New Securities have not been and are not expected to be registered under the Securities Act of 1933 or any state securities laws. Therefore, the New Securities may not be offered or sold in the United States absent registration or any applicable exemption from the registration requirements of the Securities Act of 1933 and any applicable state securities laws. Further, the New Warrants may only be offered or sold to qualified institutional buyers in reliance on Rule 144A under the Securities Act or to persons in offshore transactions in reliance on Regulation S under the Securities Act. Fourth Quarter Financial Highlights For the quarter ended December 31, 2008, Radio Holdings had net revenues of $48.5 million, as compared to $57.4 million for the fourth quarter 2007, down 15.5%, primarily the result of weak demand for advertising across our station platform. Station operating income for the quarter was down 25.5% from the prior year's period, from $27.0 million in the fourth quarter 2007 to $20.1 million in the fourth quarter of 2008, primarily due to the weak demand for advertising, partially offset by a general decrease in operating expenses across our station platform coupled with a format change in the Atlanta market. Year End Financial Highlights The Company for the year ended December 31, 2008, had net revenues of $203.4 million, as compared to $223.4 million for the prior year, down 9.0%, primarily the result of a general weak demand for advertising across our station platform coupled with a format change in the Atlanta market. Station operating income for the year was down 16.6% from the prior year, from $100.0 million in 2007 to $83.4 million in 2008, primarily due to the weak demand for advertising and the format change in the Atlanta market, partially offset by a general decrease in operating expenses across our station platform coupled with a format change in the Atlanta market. The Company as of December 31, 2008, had $657.5 million of borrowings outstanding under Company's term-loan facility and had drawn $96.7 million on the revolving facility. The complete Offering Memorandum including the tables for Reconciliation of Non-GAAP Financial Measure is available at no charge at: http://ResearchArchives.com/t/s?3a70 Radio Holdings performs its annual impairment tests for goodwill and indefinite-lived intangibles December 31. The annual impairment tests require Radio Holdings to make certain assumptions in determining fair value, including assumptions about the cash flow growth rates of its businesses. Additionally, the fair values are significantly impacted by macro-economic factors, including market multiples at the time the impairment tests are performed. The current general economic pressures now impacting both the national and a number of local economies in which Radio Holdings' operates, and their downward effects on its forecasted operating profit margins or expected cash flow growth rates, industry forecasted operating profit margins, advertising market revenues within the markets Radio Holdings operates stations, and the selling prices of radio stations, have resulted in non-cash impairments in the fourth quarter of 2008 expected to be approximately $600 million. The exact amount of the impairment, however, has yet to be finalized. Meanwhile, the Company disclosed that on February 24, 2009, it received the resignation of Holcombe T. Green, Jr. from its board of directors and the board of directors of CMP Susquehanna Corp., its wholly owned subsidiary, effective on such date. Mr. Green's resignation was not the result of any disagreement. Neither the board nor the Company's stockholder have appointed or elected a replacement director to date. CMP Susquehanna Radio Holdings Corp. is the third-largest privately owned radio broadcasting company in the United States and is believed to be the 10th largest radio broadcasting company overall in the United States based on 2008 revenues. The Company owns 32 radio stations, of which it operates 23 FM and 9 AM revenue generating stations in 9 metropolitan market in the United States. The Company's headquarters are in Atlanta, Georgia. * * * The Troubled Company Reporter said March 16, 2009, that Standard & Poor's Ratings Services lowered its corporate credit rating on CMP Susquehanna Radio Holdings Corp. to 'CC' from 'CCC+'. In addition, S&P lowered the issue-level rating on the company's 9.875% senior subordinated notes due 2014 to 'C' from 'CCC-'. The corporate credit rating and all issue-level ratings on CMP Susquehanna, including the 'CCC+' rating on the company's $800 million secured credit facilities, remain on CreditWatch with negative implications. COEUR D'ALENE: Swaps $18MM in 2024, 2028 Senior Notes for Equity ---------------------------------------------------------------- Coeur d'Alene Mines Corporation agreed to exchange: -- $12,026,000 aggregate principal amount of its 1.25% Convertible Senior Notes due 2024; and -- $6,291,000 of its 3.25% Convertible Senior Notes due 2028, for an aggregate of 15,361,918 shares of its common stock, par value $1.00, pursuant to privately-negotiated agreements dated March 9, 2009, March 12, 2009 and March 13, 2009. The Company expects all the Shares to be issued between March 10 and 19, and will issue the Shares pursuant to the exemption from the registration requirements afforded by Section 3(a)(9) of the S.A. of 1933, as amended. About Coeur d'Alene Coeur d'Alene Mines Corp. (NYSE:CDE) (TSX:CDM) -- http://www.coeur.com/-- is the world's largest primary silver producer, as well as a significant, low-cost producer of gold. The company has mining interests in Nevada, Idaho, Alaska, Argentina, Chile, Bolivia and Australia. * * * Coeur d'Alene Mines Corp.'s US$180 Million notes due Jan. 15, 2024, carry Standard & Poor's Ratings Services B- rating. CORE STATES: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Core States Management, Inc. 1243 Water Avenue P.O. Box 499 Hillsboro, WI 54634 Bankruptcy Case No.: 09-11497 Chapter 11 Petition Date: March 15, 2009 Court: United States Bankruptcy Court Western District of Wisconsin (Eau Claire) Judge: Thomas S. Utschig Debtor's Counsel: William J. Rameker, Esq. Murphy Desmond S.C. 33 East Main Street, Suite 500 Madison, WI 53701-2038 Tel: (608) 257-7181 Fax: (608) 257-4333 Email: wrameker@murphydesmond.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The petition was signed by Robert Feala, president of the company. A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/wiwb09-11497.pdf DANA HOLDING: Auction off Assets Left in Old Headquarters --------------------------------------------------------- Dana Holding Corp., which hasn't made a profit since emerging from bankruptcy last February 2008, is hoping to do better selling candelabras, go-karts, and a gold-plated warrior helmet, Alex Ortolani of Bloomberg reported. Those items were among more than 200 the company put up for auction before it moves from its Toledo, Ohio, headquarters with rolling lawns and Georgian, colonial-style buildings to a technical center in nearby Maumee. According to the report, the goods, many of which were in storage, include mahogany wine cabinets, a scale for weighing gold and a 20-piece Wedgewood China set that sold for $800. Spokesman Chuck Hartlage said that about 175 Dana employees will move out of the old headquarters in September, after which all of the office furniture currently in use will join the auction list. He declined to provide an estimate of the amount the company might raise selling large candlesticks and other furnishings, adding that some of the proceeds will go to Dana's charitable foundation, Bloomberg added. Mr. Hartlage according to the source points out, "It's not about the money. It's about assets that we will no longer have a use for. We're moving to a fully furnished, modern facility." The source says Dana is doing more than moving headquarters to cut costs after reporting $435 million in net losses over the past three quarters. The supplier said Nov. 6 it's working to close 10 plants by 2010 and shed 5,000 employees. About Dana Holding Based in Toledo, Ohio, Dana Corporation -- http://www.dana.com/ -- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Dana has facilities in China in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. The company and its affiliates filed for chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Nov. 30, 2007, the Debtors listed $7,131,000,000 in total assets and $7,665,000,000 in total debts resulting in a shareholders' deficit of $534,000,000. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represented the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, served as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners served as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represented the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP served as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC served as counsel to the Official Committee of Non-Union Retirees. The Debtors filed their Joint Plan of Reorganization on Aug. 31, 2007. On Oct. 23, 2007, the Court approved the adequacy of the Disclosure Statement explaining their Plan. Judge Burton Lifland of the U.S. Bankruptcy Court for the Southern District of New York entered an order confirming the Third Amended Joint Plan of Reorganization of the Debtors on Dec. 26, 2007. The Debtors' Third Amended Joint Plan of Reorganization was deemed effective as of Jan. 31, 2008. Dana Corp., starting on the Plan Effective Date, operated as Dana Holding Corporation. (Dana Corporation Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the TCR on Dec. 22, 2008, Moody's Investors Service has lowered the ratings of the Dana Holding Corporation -- Corporate Family Rating and Probability of Default Rating to Caa1 from B2. Moody's also lowered the ratings on the company's senior secured asset based revolving credit facility to B2 from Ba3, and lowered the rating for the senior secured term loan to B3 from B1. The ratings remain under review for possible further downgrade. The Speculative Grade Liquidity Rating of SGL-3 was affirmed. The downgrades result from the expectation of continued erosion in the North American market for SUVs and light trucks over the near term. Reduced demand, according to Moody's, is expected to be driven by weakening economic conditions and consumer aversion of purchasing automobiles from distressed OEMs. DAUFUSKIE ISLAND: Closes, Lays Off Workers; Court to Name Trustee ----------------------------------------------------------------- Michael Welles Shapiro at Beaufortgazette.com reports that the Daufuskie Island Resort & Breathe Spa owners Bill and Gayle Dixon have closed and laid off the rest of its skeleton staff. Beaufortgazette.com relates that Melrose Inn, the Melrose golf course and clubhouse, and ferry operations from Salty Fare on Squire Pope Road on Hilton Head Island have been closed. The court ruled on Tuesday that a trustee will be appointed to run the resort, which could lead to a reopening, Beaufortgazette.com. "It could be two days or two weeks until a trustee is picked and the resort's back in business," Beaufortgazette.com quoted Russ Brown -- chairperson and CEO of RBC Enterprises, which develops and sells real estate at the resort -- as saying. The Dixons have relinquished control of Daufuskie Island, Beaufortgazette.com relates, citing Mr. Brown. According to Beaufortgazette.com, the court ruled last week that the Dixons could not sell or lease portions of the resort without the consent of a select group of resort members. Rich Silver, a member involved in a lawsuit against the resort, and Mr. Brown said that a lender was willing to give the Dixons money if the court let them sell or lease its assets freely, which the court wouldn't allow, Beaufortgazette.com states. the report quoted Mr. Silver as saying, "As a result of this ruling, the one lender that was willing to lend (the Dixons) monies to keep operatingis no longer willing to make that loan." The Dixons, after the lender pulled out, agreed to let the court appoint a trustee, Beaufortgazette.com relates, citing Mr. Brown. Based in Hilton Head Island, South Carolina, Daufuskie Island Properties LLC -- http://www.daufuskieislandresort.com/-- operates the Daufuskie Island Resort & Breathe Spa. The company was owned by Gayle and Bill Dixon, a San Francisco Bay area couple. As reported by the Troubled Company Reporter on January 22, 2009, Daufuskie Island Properties LLC, also known as Daufuskie Island Resort & Breathe Spa, sought bankruptcy protection from creditors before the U.S. Bankruptcy Court for the District of South Carolina. DAVID CLARKSON: Case Summary & Six Largest Unsecured Creditors -------------------------------------------------------------- Debtor: David G. Clarkson 1705 32nd St. Evans, CO 80620 Bankruptcy Case No.: 09-13890 Chapter 11 Petition Date: March 11, 2009 Court: District of Colorado (Denver) Debtor's Counsel: Jon S. Nicholls, Esq. jon.nicholls@nichollslaw.com 1850 Race St. Denver, CO 80206 Tel: (303) 329-9700 Total Assets: $ 3,017,250 Total Debts: $31,222,939 The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ New Frontier Bank potential $11,410,337 2425 35th Ave personal Greeley, CO 80634 liability Wells Fargo Bank potential $2,456,000 5801 W 11th St personal Greeley, CO 80634 liability Bank of Choice potential $1,689,928 3635 23rd Ave personal Evans, CO 80620 liability 1st Horizon Home Loans property $1,570,000 4000 Horizon Way personal Irving, TX 75063 liability Farmers Bank of Ault potential $1,461,066 119 1st St personal Ault, CO 80610 liability Colorado Community Bank potential $647,000 175 E 1st St personal Akron, CO 80720 liability DBSI INC: Files Schedules of Assets and Liabilities --------------------------------------------------- DBSI Inc. filed with the U.S. Bankruptcy Court for the District of Delaware a schedule of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------------ ------------ A. Real Property $10,460,549 B. Personal Property $345,801,655 C. Property Claimed as Exempt D. Creditors Holding $2,002,651 Secured Claims E. Creditors Holding $6,692,394 Unsecured Priority Claims F. Creditors Holding $145,615,082 Unsecured Non-priority Claims ------------ ------------ TOTAL $356,262,205 $154,310,128 [Content redacted on June 16, 2009.] About DBSI Inc. Headquartered in Meridian, Idaho, DBSI Inc. -- http://www.dbsi.com -- operates a real estate company. On November 10, 2008, and other subsequent dates, DBSI and 167 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-12687). Lawyers at Young Conaway Stargatt & Taylor LLP represent the Debtors as counsel. The Official Committee of Unsecured Creditors tapped Greenberg Traurig, LLP as its bankruptcy counsel. Kurtzman Carson Consultants LLC is the Debtors' notice claims and balloting agent. When the Debtors filed for protection from their creditors, they listed assets and debts of between $100 million and $500 million each. General Information: On November 10, 2008, and other subsequent dates, each of the Debtors filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code"). The 168 Debtors cases were assigned case numbers listed here (collectively, the "Bankruptcy Cases") and are jointly administered under case no. 08-12687. The Bankruptcy Cases are pending before the Honorable Peter J. Walsh in the United States Bankruptcy Court for the District of Delaware. DENNIS SPIELBAUER: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Dennis S. Spielbauer dba Royal Pacific Properties dba Golden Gate Financial Management P.O. Box 720835 San Jose, CA 95172-0000 Bankruptcy Case No.: 09-51654 Chapter 11 Petition Date: March 10, 2009 Court: Northern District of California (San Jose) Judge: Roger L. Efremsky Debtor's Counsel: David A. Boone, Esq. ecfdavidboone@aol.com Law Offices of David A. Boone 1611 The Alameda San Jose, CA 95126 Tel: (408)291-6000 Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $10 million The Debtor's Largest Unsecured Creditors: The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Roberts & Elliott Services Rendered $20,000 Ten Almaden Blvd, Ste. 500 San Jose, CA 95113 Kathleen Denney Personal Loan $15,000 484 S. Fifth Street San Jose, CA 95112 Warren's Heating & Air Conditioning $3,500 Conditioning 6022 E Lathrop Rd Manteca, CA 95336 Robert Sturges Legal Services $3,500 Discover Card Credit Card Debt $3,089 Cal Coast Credit Services Collection Agent $2,739 for Mindy Pelz Washington Mutual $2,485 Johst Floor Coverings Services Rendered $1,450 ER Solutions Collection Agent $739 Bally Total Fitness Services Rendered $232 Professional Recovery Collection Agent $6 DCNC NORTH CAROLINA: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: DCNC North Carolina I, L.L.C. 401 City Avenue, Suite 710 Bala Cynwyd, PA 19004-1150 Bankruptcy Case No.: 09-11825 Chapter 11 Petition Date: March 16, 2009 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Debtor's Counsel: Leslie Beth Baskin, Esq. Spector Gadon Rosen 1635 Market Street Philadelphia, PA 19103 Tel: (215) 241-8888 Fax: (215) 241-8844 Email: lbaskin@lawsgr.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Maurice H. Johnson, vice president and treasurer of the company. The Debtor did not file a list of 20 largest unsecured creditors together with its petition. DELTA AIR: To Shrink 10% of Overseas Flights in September 2009 -------------------------------------------------------------- As widely reported, Delta Air Lines Inc., will implement 10% international capacity cuts starting in September 2009, in light of plunging customer demand for international travel. The 10% capacity reduction adds to the 6% to 8% capacity cuts the airline previously confirmed in December 2008. Delta has it is trimming 3% to 6% of international seats in 2009. The carrier disclosed that it was cutting, among others, Atlanta- Shanghai flying by 40% in the second quarter of 2009, by operating four days a week instead of seven, according to Bloomberg News. "By and large, Delta is managing necessary capacity reductions through fewer weekly frequencies, and in some cases, smaller aircraft," spokeswoman Betsy Talton told Bloomberg. Delta reported in January 2009, that it was also experiencing low demand in its domestic routes, as spurred heavily by pullbacks in business travel by the automotive industry and in leisure travel by worried consumers. Delta's combined traffic results with Northwest Airlines Corporation fell 10% in February. Other large U.S. airlines are cutting seats on routes to London, Tokyo and other overseas business centers by as much as one-third of their overall capacity, Bloomberg notes. "The airlines aren't competing with each other right now. They're just trying to manage their own revenues and survive," Bloomberg quotes Roger King, a debt analyst at CreditSights Inc., in New York, as saying. Company's Statement In a memo dated March 10, 2009, addressed to more than 70,000 Delta employees worldwide, Delta Chief Executive Officer Richard Anderson and President Edward H. Bastian confirmed that the airline is undertaking measures to combat the "worsening global economy," including capacity cuts: The memo reads: "The worsening global economy continues to place additional pressure on the airline industry. In just the few months since we last announced capacity reductions, revenues have weakened, particularly in international markets. Once again, we must move quickly to adjust our capacity and stay in front of demand changes. This morning at an investor conference in New York, we will announce plans to reduce international capacity an additional 10% beginning in September. These reductions will be targeted to areas where we've seen the most revenue weakness -- the Atlantic and Pacific networks. Trans- Atlantic capacity this winter will be down 11 to 13% and trans-Pacific down 12 to 14% compared to winter 2008. To achieve these capacity changes, we will exit low performing markets, down-gauge certain routes, adjust frequencies, and move some markets to seasonal service. We remain focused on our goal to build a diversified, profitable worldwide network. To this end, even as we reduce our Atlantic and Pacific capacity, our Latin America capacity will be up slightly in the fourth quarter, as we take advantage of targeted growth opportunities through new routes and increased frequencies. These reductions are in addition to the December announcement to reduce systemwide 2009 capacity by 6 to 8% year over year. As a result of the voluntary programs just concluded, nearly 2,100 of our colleagues will be voluntarily leaving over then next several months. While these voluntary reductions met our overall target, there are certain positions and geographic locations where we fell short of achieving the goals of the voluntary programs. With the additional capacity reductions noted above, we again must reassess our staffing needs. As in the past, voluntary programs are always our first consideration to adjust staffing needs. Our merger provides the silver lining to these turbulent economic times as we begin to see tangible evidence of the benefits of our integration and understand how the merger positions Delta ahead of our competitors. Above all, your focus on executing the Flight Plan and providing superior customer service is our most prized attribute. We will continue to make decisions that are in the long-term interest of employees, customers, shareholders and the communities we serve. Remaining focused on our 2009 Flight Plan will be key to our success. This will require teamwork from all divisions and departments working toward this common goal. Thank you for the incredible work you do for our customers every day. Together, we are building a stronger Delta." Integration of Airport Operations In light of their merger in October 2008, Delta and Northwest are integrating various aspects of their operations. At the Tampa International Airport in Florida, Northwest will relocate to Airside E in April 2009, to be with Delta, airport director Louis Miller told the Tampa Tribune. Delta and Northwest have also have begun to shift destination schedules at the TIA, including Tampa-Los Angeles and Tampa-Hartford routes, as reflected on both airlines' Web sites, the newspaper noted. Similarly, the Northwest ticket counter at the Eppley Airfield in Omaha, Nebraska will close at the end of April 2008, while the Delta counter at the south end of the terminal will expand to handle passengers for both airlines, reported Tom Shaw of Omaha World-Herald. The Northwest brand at Eppley will eventually will be phased out and integrated into Delta, with the merged airline using gates 3, 4 and 5, the report added. The integration of Delta and Northwest operations are resulting to job cuts in June 2009, for up to 25 ground services crews at the Buffalo Niagara International Airport, reported Sharon Linstedt of The Buffalo News, citing a notification from the New York State Department of Labor. Delta spokesman Anthony Black told the Buffalo News that while there will be a new ground services structure in place for the merged airline as of June 2, it is possible that current workers will be hired by a firm which secures a single service contract. Mr. Black said that the combined airline operations at the Buffalo Airport "will work out of the same ticket counters and gate space." The Delta-Northwest integration in China has also started in March 2008, with the airlines' air ticketing and booking services being merged, according to China Hospitality News. The move allows customers to purchase air tickets for both airlines from one office, the report added, quoting Sandeep Bahl, general manager of Northwest Airlines China. Delta has begun in January 2009, the consolidating and re-branding of Northwest facilities in more than 200 airports worldwide in order to seamlessly integrate the carriers. Delta expects to complete re-branding in all airports by 2010. Progress on Seniority Integration Efforts Delta confirmed March 16, 2009, that the remaining seniority integration committees representing pre-merger Delta employees in the larger workgroups presented their recommendations for fair and equitable seniority integration methods for the combined workgroups. In a memo issued to update Delta employees on the "merger milestones," Mike Campbell, executive vice president of Human Resources and Labor Relations at Delta, explained that the recommendations made cover ACS/Cargo, Reservation Sales and TechOps Stores employees. "If these recommendations were to be agreed to by representatives of pre-merger Northwest Airlines Corporation employees, and accepted by the company, we would have seniority integration issues resolved for the vast majority of our combined employee groups." Mr. Campbell said. Mr. Campbell noted that pre-merger Northwest training representatives, production planners, line maintenance planners, technical writers, reliability analysts and technical analysts, represented by the Aircraft Technical Support Association, voted to approve a transition plan. The transition plan provides that they will now file a notice with the National Mediation Board requesting that the NMB terminate their certification, according to Mr. Campbell. In addition, Mr. Campbell confirmed that Delta also resolved representation issues for planners, trainers, and reliability and technical analysts in Northwest's Technical Operations group. To recall, the Delta TechOps Seniority Integration Committee and the Northwest Committee partnered in December 2008, to reach a tentative agreement on a combined seniority list covering approximately 6,000 aircraft technicians and other TechOps employees of the new Delta. Mr. Campbell noted that Delta has already resolved seniority integration issues with respect to its pilots, dispatchers, AMTs, and meteorologists. The Company has also supported a "seniority date methodology" method in integrating the Delta and Northwest flight attendant workgroups, as was proposed by the Flight Attendant Seniority Integration Committee. Mr. Campbell applauded the efforts of the seniority integration teams, and commended ATSA "for working with [the airline] to resolve representation for these employees." He affirmed that the Delta's progress on seniority integration of pre-merger employees will allow the airline "to align [employees'] pay, benefits and work rules with similarly situated salaried and merit-based employees of Delta. Progress "Stalled" While Delta moves ahead with the ironing out of its merger issues with Northwest's workforce, the Association of Flight Attendants and International Association of Machinists and Aerospace Workers, which represent 16,000 pre-merger Northwest employees, have to file for an election with the National Mediation Board, The Detroit News reports. AFA-CWA and IAMAW "[are] facing the distinct possibility of losing elections when combined with non-union Delta counterparts . . . [standing] to lose tens of millions each year in dues collected from members," the newspaper notes. In a letter sent to Delta executives, Machinists Union president Stephen Gordon called the airline's promises to protect employee interests "hollow." "Be assured that we will not allow you to roll over our members," Mr. Gordon wrote, according to The Detroit News. Joseph Tiberi, spokesman for the International Association of Machinists, has told the Atlanta Journal-Constitution that a seniority list is "meaningless" without a contract that discusses how employees can use their seniority. Lord Abbett Holds 10.10% Stake In Reorganized Delta In an amended Form 13G filed with the Securities and Exchange Commission dated March 10, 2009, Lord, Abbett & Co. LLC disclosed that it beneficially owns 30,689,022 shares of Delta common stock, constituting 10.10% of shares outstanding. The firm has the sole voting power on 27,750,818 shares and has the sole option to dispose of 30,598,273 shares. Delta had 698,464,807 shares outstanding as of January 31, 2009. About Delta Air Lines With its acquisition of Northwest Airlines, Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or http://www.nwa.com/-- is now the world's largest airline. From its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its Northwest subsidiary and Delta Connection carriers offer service to more than 376 destinations worldwide in 66 countries and serves more than 170 million passengers each year. Delta's marketing alliances allow customers to earn and redeem either SkyMiles or WorldPerks on more than 16,000 daily flights offered by SkyTeam and other partners. The merger closed on October 29, 2008. Prior to the merger, Delta was the world's second-largest airline in terms of passengers carried and Northwest was the world's fourth largest airline. Northwest and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington, represented the Northwest Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors retained Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy counsel. When the Northwest Debtors filed for bankruptcy, they listed $14.4 billion in total assets and $17.9 billion in total debts. On May 21, 2007, the Court confirmed the Northwest Debtors' amended plan. That amended plan took effect May 31, 2007. (Northwest Airlines Bankruptcy News Issue No. 114; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). Delta and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provided the Delta Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provided the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, served as the Committee's financial advisors. On April 25, 2007, the Court confirmed the Delta Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. (Delta Air Lines Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). E-CON LLC: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: E-CON, LLC 4555 Investment Drive Suite 200 Troy, MI 48098 Bankruptcy Case No.: 09-47159 Chapter 11 Petition Date: March 11, 2009 Court: United States Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Marci B. McIvor Debtor's Counsel: Michael P. DiLaura, Esq. 105 Cass Ave. Mt. Clemens, MI 48043 Tel: (586) 468-5600 Fax : (586) 465-9113 Email: miked@mikedlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors, together with its petition. The petition was signed by Djeamourty Ramkumar, CEO of the company. EAST CAMERON: Sukuk Bondholders Ask Court to Name Ch. 11 Trustee ---------------------------------------------------------------- Camulos Master Fund LP, Cheyne Capital Management (UK) LLP, The DuPont Pension Trust, Merrill Lynch, Pierce, Fenner & Smith, Incorporated, and Plainfield Direct Inc. (the "Sukuk Certificateholders"), and East Cameron Gas Company ask the U.S. Bankruptcy Court for the Western District of Louisiana to appoint a Chapter 11 trustee for East Cameron Partners, L.P. The movants charges the management of the Debtors of incompetence and gross mismanagement, on the following grounds: a) Debtor's management has lost the right to operate in the Outer Continental Shelf because of the Minerals Management Service's disqualification of an affiliate of the Debtors. b) Debtor's management has wantonly and without explanation drained funds from the estate amounting to over $1.2 million in less than four months through several unauthorized transfers to the Debtor's affiliates, some possibly in payment of prepetition claims. c) Revenues of the Debtor are being used to pay the costs and expenses of non-debtor affiliates. d) Debtor, through the use of contrived "invoices", has deceptively drained money from a capital expenditure account, the purpose of which is the legitimate, reasonable development of mineral leasehold interests obtained from the MMS, specifically East Cameron Blocks 71 and 72 (the "Subject Leases"). e) Debtor has used monies specifically escrowed for capital expenditures for operational expenses, and has used monies specifically escrowed for operational expenses for capital expenditures. f) Debtor has made specious management decisions, including (a) refusing or inexplicably being unable to procure and install a compressor on the Subject Leases, while admitting that the piece of equipment will cause a substantial ramping of gas production, and (b) purchasing an unnecessary and over-priced quarters building from a non-debtor affiliate of the Debtor. g) Debtor has squandered nearly $38 million which was intended to complete the entire leasehold development program anticipated as part of the Sukuk transaction. Based in Lafayette, Louisiana, East Cameron Partners, LP -- http://www.eastcameronpartners.com/-- is an independent oil and gas exploration and production company. The company filed for Chapter 11 relief on Oct. 16, 2008 (Bankr. W.D. La. Case No. 08-51207). Benjamin W. Kadden, Esq., Christopher T. Caplinger, Esq., and Stewart F. Peck, Esq., at Lugenbuhl, Wheaton, Peck, Rankin & Hubbard, represent the Debtor as counsel. Michael H. Piper, Esq., and William E. Steffes, Esq., at Steffes, Vingiello & McKenzie, L.L.C., represent the Official Committee of Unsecured Creditors as counsel. When the Debtor filed for protection from its creditors, it listed over $100 million in assets and over $100 million in debts. EAST RIDGE: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: East Ridge Associates, LLC 103 Remsen Street Cohoes, NY 12047 Bankruptcy Case No.: 09-10761 Chapter 11 Petition Date: March 11, 2009 Court: United States Bankruptcy Court Northern District of New York (Albany) Judge: Robert E. Littlefield, Jr. Debtor's Counsel: David Brickman, Esq. David Brickman PC 1664 Western Ave. Albany, NY 12203 Tel: 518-464-6464 Total Assets: $2,635,000.00 Total Debts: $2,226,890.00 The Debtor does not have any creditors who are not insiders. The petition was signed by Steve T. Noble, managing member of the company. ENTRAVISION COMMUNICATIONS: S&P Affirms 'B+' Corp. Credit Rating ---------------------------------------------------------------- Standard & Poor's Rating Services affirmed its 'B+' corporate credit rating on Santa Monica, California-based Spanish-language media company Entravision Communications Corp. The rating was removed from CreditWatch, where it was placed with negative implications on Feb. 4, 2009, due to S&P's concerns regarding covenant compliance. The rating outlook is negative. At the same time, S&P revised its recovery rating on the company's secured credit facilities to '3', reflecting S&P's expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default, from '2'. The issue-level rating on these facilities was lowered to 'B+' (at the same level as the 'B+' corporate credit rating on the company) from 'BB-' in accordance with S&P's notching criteria for a '3' recovery rating. S&P removed the issue-level rating from CreditWatch along with the corporate credit rating. "The affirmation of the corporate credit rating reflects S&P's expectation that Entravision will remain in compliance with financial covenants over the intermediate term following its March 16, 2009 credit amendment, despite the potential for continued meaningful EBITDA declines in 2009," said Standard & Poor's credit analyst Michael Altberg. S&P estimate that debt to EBITDA (pro forma for the company's $40 million of debt repayment as required by the amendment) was roughly 5.0x, versus a 6.75x covenant, which steps down to 6.5x on March 31, 2010. Based on S&P's assumptions regarding cost-cutting initiatives and retransmission consent revenue in 2009, S&P project that the company could withstand 30% to 35% EBITDA declines in 2009 and still remain in compliance with covenants without further debt repayment. As of Dec. 31, 2008, cash balances were $64.1 million, prior to the $40 million debt repayment in March 2009. S&P believes Entravision will generate positive discretionary cash flow in 2009, which could also be directed toward debt repayment for compliance purposes. For the fourth quarter of 2008, revenue and EBITDA declined 16% and 37%, respectively, due to advertising demand weakness and significant declines in the key automotive category. The company's EBITDA margin declined to roughly 30.4% for 2008--still very healthy, but down from the mid-30% area in previous years. The company expects to lower its operating costs by a minimum of $11 million in 2009 due to cost-cutting initiatives, but S&P is still projecting further margin compression throughout the year. Lease-adjusted debt to EBITDA was 5.7x as of Dec. 31, 2008, and roughly 5.2x pro forma for the $40 million debt repayment associated with the credit amendment subsequent to the quarter- end. EBITDA coverage of cash interest was 2.4x as of Dec. 31, 2008. Based on the 375-basis-point increase in LIBOR spreads that accompanied the amendment and S&P's projections for EBITDA declines throughout the year, S&P estimates that EBITDA coverage of cash interest could decline to roughly 1.5x in 2009, which is slightly weak for the rating. The company converted a healthy 46% of EBITDA to discretionary cash flow for the 12 months ended Dec. 31, 2008. Based on the credit amendment, capital expenditures will be limited to $10 million for 2009 and 2010. Still, S&P expects that conversion could decline to the 30% area in 2009 due to pressure on EBITDA. FAIRCHILD CORP: Wants to Obtain $23 Million DIP Facility from PNC ----------------------------------------------------------------- The Fairchild Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to: -- authorize (i) its affiliates to obtain debtor in possession financing in an aggregate amount not to exceed $23 million from PNC, Bank National Association; and (ii) Fairchild to (A) guaranty the DIP Borrowers obligations under the PNC DIP facility and (B) pledge its equity interests in Banner Aerospace Holding Company I, Inc.; -- authorize the DIP Borrowers to execute and enter into the PNC DIP agreements and to perform the other and further acts as may be required in connection with the PNC DIP facility; -- grant security interest, liens and superpriority claims to lenders to secure all obligations of the DIP borrowers, but subject in the case of priority to the Wells Fargo lien to the extent it is a permitted lien and the Carve Out; -- allow it to immediately apply a portion of the proceeds of the PNC DIP facility to satisfy in full the Debtors' obligations under the prepetition financing documents and the other terms; -- authorize it to waive and release all claims against the lenders, including to contest the validity, extent or priority of the lenders' claims, subject to the rights of a party with requisite standing to challenge same within 45 days of the petition date; -- authorize it to waive the rights to seek use cash collateral of the lenders or obtain other postpetition loans or financial accommodations; -- prohibit any other party to foreclose or otherwise seek to enforce any junior lien or claim in any of the collateral that secures the PNC DIP facility; -- schedule a final hearing on the motion 20 days after the petition date to consider entry of the final orders; -- certain notice procedures for the hearings hereon; and -- grant the lenders a security interest in all causes of action and recovery rights and barring any surcharge of the lenders' collateral. Prior to the petition date, the operations of the Debtors were financed by the lenders pursuant to a $28 million revolving credit facility under the prepetition financing documents. The prepetition financing documents consisted of two inter-related credit and security agreements, (a) the Domestic Prepetition revolving credit agreement; and (b) the Export-Import revolving credit agreements. Amounts outstanding as of the petition date were approximately $20 million. The prepetition obligations to the lenders are secured by first-priority liens in and continuing pledges and and security interest of and against substantially all of the Debtors' assets and the Debtors' equity interest in Banner in favor of PNC, subject to the lien in favor of Wells Fargo Financial Leasing lien to the extent it is a permitted lien. In addition, the Pension Benefit Corporation has filed a notice of federal lien in the amount of about $2 million against Matrix, one of the Debtors, which lien is dated Feb. 16, 2009. The lien relates to pension payments the Debtors were unable to make due to their deteriorating financial condition. The Debtors relate that the PBGC lien is both subordinate to PNC and lenders' prepetition liens and is unsecured. Salient Terms of the PNC DIP Facility DIP Borrowers: Banner Aerospace Holding Company I, Inc., GCCUS, Inc., NASAM Incorporated, Professional Aviation Associates, Inc., DAC International, Inc. Professional Aircraft Accessories, Inc. PNC DIP Facility: A senior secured, priming super-priority debtor in possession credit facility consisting of a revolving credit facility in the maximum aggregate amount equal to $23 million sublimit for advances under the DIP Ex-Im credit agreement. Availability under the PNC DIP facility will be reduced dollar for dollar by the amounts outstanding under the DIP Ex-Im credit agreement. Lenders: PNC Bank, National Association and other financial Institutions from time to time to the PNC DIP facility. Guarantors and Guaranty: The Fairchild Corporation will guaranty the obligations of the DIP borrowers and pledge its holdings of Banner's Stock to secure its obligations under the guaranty. Designated Purposes: The proceeds will be used solely for the items, in the amounts and at the times set forth in the Budget to fund pending the sale of DIP borrowers, the working capital needs of DIP borrowers and repayment of the prepetition obligations. Borrowing Base: The facility will include up to a $23 million revolving credit facility that includes up to a $12 million sublimit for advances under the DIP Ex-Im credit agreement. Priority of Security Interest in DIP Collateral: All obligations of the Debtors will be secured by a first priority, perfected lien on all prepetition collateral and postpetition collateral of the DIP borrowers and the senior lien on the pledge of all the stock of Banner by Holdings, subject only to Carve Out, including without limitation, all prepetition obligations. All liens and security interest of the lenders in the DIP Collateral will be deemed valid and perfected upon the entry of the interim order, without further action required by the lenders. The lenders will not be required to marshal the DIP Collateral and may foreclose upon and liquidate any of the DIP collateral in any order. Superpriority: All of the obligations of the DIP borrowers and Holdings under the PNC DIP Facility will constitute allowed superpriority administrative expense claims in the DIP borrowers' Chapter 11 cases with priority over any and all administrative expense claims in the DIP Borrowers' Chapter 11 cases. Carve Out: The lenders' liens and security interest in the DIP Collateral and any proceeds received by the lenders from the DIP Collateral after an event of default will be subject to the prior payment of (a) the statutory fees payable to the U.S. Trustee; and (b) the unpaid and outstanding reasonable fees and expenses actually incurred on or after the petition date, with respect to the services performed and approved by a final orders of the Court, by attorneys, accountants, and other professionals retained by the borrowers and any committee appointed, less the amount of any retainers, if any, then held by the persons in a cumulative, aggregate sum not to exceed in the case of all the allowed professional fees incurred on or after Carve Out termination date, the lesser of (I) the actual amount of the allowed professional fees incurred on or after the petition date, and (II) $300,000 less the amount of all payments made by or on behalf of the borrows on account of all payments made by or on behalf of the borrowers on account of allowed professional fees and statutory fees after the Carve Out termination date. Interest Rate: The sum of (a) the alternate base rate plus 3% with respect to domestic rate loans and (b) the sum of 4% plus the higher of (i) the Eurodollar Rate and (ii) 2% with respect to Eurodollar Rate loans. Conditions: Lenders' obligation to make available the interim borrowing is conditioned on: (i) all of the "first day orders" entered; (ii) the Budget being satisfactory to the agent; (iii) entry of the interim order approving the interim borrowing without appeal, stay or modification; (iv) entry of an order acceptable to the agent approving on an interim basis the PNC DIP facility; (v) all PNC DIP liens will have been deemed valid and perfected upon entry of the interim order, (vi) a cash management acceptable to the agent; (vii) the entry of an order approving the subordinated DIP facility; (viii) the DIP Borrowers will have filed a satisfactory motion to establish bidding procedures and authorizing a sale of the DIP borrowers' assets; (ix) the facility fee will have been paid to the lenders; and (x) lenders' expenses and fees will have been paid and reimbursed simultaneous with interim borrowing. Termination Date: The date which is the earliest of (a) the date that is 100 days after the petition date; (b) the effective date of a confirmed Plan of Reorganization; (c) the date that is 21 days after the entry of the interim order if the final order has not been entered by the Court by the date; (d) the date of the closing of a sale of substantially all of the DIP borrowers assets; (e)the date of conversion of any DIP borrowers cases to a case under Chapter 7 of the Bankruptcy Code; (f) the date of dismissal of the case; and (g) the earlier date on which all obligations become due and payable under the terms of the PNC DIP agreements. Fees and Expenses: Commitment fee of 2% or $460,000, which is not refundable and fully earned upon the entry of the interim order and payable as: (i) $230,000 upon the entry of the interim order and (ii) $230,000 on the earlier of the 60th day after the petition date or the occurrence of an event of default, collateral monitoring fee of $58,000 per month; an unused line fee of 0.25% on the average unused advances under the PNC DIP facility; the agents' reasonable legal fees and expenses; and a field exam fee $850 per man-day plus expenses. The agreement contained certain events of default. The Phoenix Subordinated DIP Financing The Debtors relate that they requested PNC to extend credit, but except as set forth in the Budget, PNC was unwilling to increase its funding levels to permit its loan proceeds to be used other than for the DIP Borrowers. The Debtors require additional financing because the PNC DIP Facility may not be used for the benefit of the Debtors, except as set forth in the Budget. The Debtors do not have sufficient cash and require liquidity to operate their businesses and provide corporate overhead, administrative and professional support necessary to facilitate the sale of the assets of the Debtors and the further sale, reorganization or winddown of the Debtors' other operations pursuant to the Phoenix Sale. Thus Banner/Holdings Debtors and Fairchild Realty LLC have agreed to enter into a $4 million subordinated financing with Phoenix Banner LLC. The subordinated DIP facility is to be quaranteed by all the Debtors other than the DIP Borrowers and Realty and subordinated in all respects to the obligations under the PNC DIP facility. The subordinated DIP facility is essentially a bridge facility to allow the Debtors to funs the costs of pursuing the sale of the DIP borrowers, the proceeds of which sale will in turn be used to fund the costs of sale, reorganization or winddown of the Debtors' other operations. About The Fairchild Corporation Based in McLean, Virginia, The Fairchild Corporation (OTC:FCHD.PK) -- http://www.fairchild.com/-- operates under three segments: aerospace, real estate, and motorcycle apparel. Fairchild's aerospace segment is engaged in the aerospace distribution business which stocks and distributes a wide variety of parts to operators and aerospace companies providing aircraft parts and services to customers worldwide. Fairchild also owns and develops commercial real estate. Fairchild's motorcycle apparel business designs and produces apparel under private labels for third parties, including Harley-Davidson and also owns a 49% interest in PoloExpress, a business which designs and sells motorcycle protective apparel, helmets, and a large selection of technical accessories, for motorcyclists and operates approximately 96 retail shops in Switzerland and Germany. The Debtors and its debtor-affiliates filed for Chapter 11 protection on March 18, 2009, (Bankr. D. Del Lead Case No.: 09- 10899)Jason M. Madron, Esq. and Michael Joseph Merchant, Esq. at Richards Layton & Finger, P.A. represents the Debtors in their restructuring efforts. The Debtors' financial condition as of Jan. 31, 2009, showed total assets of $89,433,000 and total debts of $228,095,000. FANNIE MAE: Will Pay Out Up To $611,000 in Retention Bonuses ------------------------------------------------------------ James R. Hagerty and Aaron Lucchetti at The Wall Street Journal report that Fannie Mae will pay retention bonuses of as much $470,000 to $611,000 to some executives this year, despite posting losses. As reported by the Troubled Company Reporter on March 2, 2009, Fannie Mae recorded a net loss of $58.7 billion and a diluted loss per share of $24.04 for 2008. The Company's results for 2008 were driven primarily by escalating credit-related expenses, consisting primarily of additions to the Company's combined loss reserves; significant fair value losses; investment losses from other-than- temporary impairment; and a non-cash charge of $21.4 billion in the third quarter of 2008 to establish a partial deferred tax asset valuation allowance. WSJ relates that Fannie Mae is receiving increasing amounts of funding from the U.S. Treasury. According to the report, the Treasury has agreed to provide as much as $200 billion of capital each to Fannie Mae and Freddie Mac in exchange for preferred stock. Fannie Mae and Freddie Mac said that they will need a combined $60 billion of that money to cover their losses, the report states. Fannie Mae said in a securities filing that chief operating officer Michael Williams is due to receive cash retention awards of $611,000 this year, atop a similar award of $260,000 last year. According to WSJ, Mr. Williams' base salary is $676,000 per year. WSJ states that Fannie Mae said that it will pay retention awards this year to these executive vice presidents: -- David Hisey, $517,000; -- Thomas Lund, $470,000; and -- Kenneth Bacon, $470,000;. WSJ notes that the bonuses this year will be paid in two installments -- one in April and another in November. According to WSJ, the installments will be paid only if the executives remain in their posts at the payment dates. Other Fannie Mae employees are also eligible for retention awards, but the Company disclosed only the largest of the bonuses, the report states. Fannie Mae said that it won't give a retention bonus for the chief executive officer Herbert Allison, who chose to work without any salary or bonus last year, according to the report. The bonuses that Fannie Mac and Freddie Mac are paying are "critical" to keep people needed to support the mortgage market and work on foreclosure-prevention efforts, WSJ says, citing James Lockhart, director of the Federal Housing Finance Agency, of FHFA, which regulates Fannie Mae and Freddie Mac. Mr. Lockhart, WSJ relates, said that after the companies' chief executives were ousted in September 2008, "it would have been catastrophic to lose the next layers down and other highly experienced employees." Compensation has declined for many workers as other types of bonuses weren't paid in 2008 and "past stock grants are virtually worthless," the report states, citing Mr. Lockhart. The report says that until last year, Fannie Mae and Freddie Mac executives were compensated largely in the form of common stock. According to WSJ, U.S. Rep. Edolphus Towns said that bonuses for executives at companies that have received government financial assistance are "definitely wrong," as "they are rewarding folks who have not done a good job." WSJ says that Mr. Towns didn't think that executives would leave the companies if they didn't get retention bonuses. "Where are these people going? Everybody's laying off," WSJ quoted Mr. Towns as saying. Fannie Stops Guaranteeing Mortgages in Condo Buildings Nick Timiraos at WSJ relates that Fannie Mae stopped guaranteeing mortgages in condo buildings where fewer than 70% of the units have been sold, up from 51%. Fannie Mae, says WSJ, won't back loans for sales in buildings where 15% of current owners are delinquent on association fees or where more than 10% of units are owned by a single-entity. According to the report, the new policy became effective on March 1, 2009. Most lenders, states the report, have begun to implement Fannie Mae's guidelines. The new rules protect borrowers from purchasing units in buildings that have a high risk of failure while also preventing the companies from throwing money into troubled developments, WSJ states, citing Fannie Mae. According to WSJ, developers can ask Fannie Mae for an exemption from the rule. More than 50 exceptions have been made, says the report. WSJ reports that Fannie Mae and Freddie Mac will increase fees on condo buyers in April. WSJ notes that buyers without at least a 25% down payment should pay closing-cost fees equal to 0.75% of their loan, regardless of the borrower's credit score. The fees are necessary to protect against higher default rates, WSJ states, citing Fannie Mae and Freddie Mac. About Fannie Mae The Federal National Mortgage Association -- (FNMA) (NYSE: FNM) -- commonly known as Fannie Mae, is a shareholder-owned U.S. government-sponsored enterprise. Fannie Mae has a federal charter and operates in America's secondary mortgage market, providing mortgage bankers and other lenders funds to lend to home buyers at low rates. Fannie Mae was created in 1938, under President Franklin D. Roosevelt, at a time when millions of families could not become homeowners, or risked losing their homes, for lack of a consistent supply of mortgage funds across America. The government established Fannie Mae to expand the flow of mortgage funds in all communities, at all times, under all economic conditions, and to help lower the costs to buy a home. In 1968, Fannie Mae was re-chartered by the U.S. Congress as a shareholder-owned company, funded solely with private capital raised from investors on Wall Street and around the world. Fannie Mae is the U.S. largest mortgage buyer, according to The New York Times. Conservatorship As reported by the Troubled Company Reporter, the U.S. government took direct responsibility for Fannie Mae and Freddie Mac, placing the government sponsored enterprises under conservatorship on September 7, 2008. James B. Lockhart, director of Federal Housing Finance Agency, said that Fannie Mae and Freddie Mac share the critical mission of providing stability and liquidity to the housing market. Between them, the Enterprises have $5.4 trillion of guaranteed mortgage-backed securities (MBS) and debt outstanding, which is equal to the publicly held debt of the United States. Among the key components of the conservatorship, the FHFA, as conservator, assumed the power of the Board and management. FLEETWOOD ENTERPRISES: Gets Interim OK to Use Cash Collateral ------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California has authorized Fleetwood Enterprises Inc. to use its lenders' cash collateral until March 29, Bloomberg's Bill Rochelle said. The Court approved the cash collateral use on an interim basis. The Court will convene a hearing to consider final approval on March 26. Fleetwood hopes to have negotiated a secured financing arrangement "as early as next week." Reuters relates that Fleetwood has said it is closing its travel trailer division and seeking a buyer for its motor home and manufactured housing units. Reuter quoted Mr. Bell as saying, "There has been outreach to strategic and financial buyers and there has been interest." Meanwhile, Erik Larson of Bloomberg has earlier reported that Fleetwood Enterprises Inc., the maker of motor homes and camping vans that filed for bankruptcy, was sued for back wages by two ex- workers who claim more than 800 employees were fired without required warning. Headquartered Riverside, California, Fleetwood Enterprises, -- http://www.fleetwood.com-- produces recreational vehicles and manufactured homes. The Debtors have about 9,000 associates working in facilities strategically located throughout the nation. The company and 19 of its affiliates filed for Chapter 11 protection on March 10, 2009 (Bankr. C.D. Calif. Lead Case No. 09-14254). Craig Millet, Esq., atGibson, Dunn & Crutcher LLP, represents the Debtors in their restructuring efforts. The Debtors proposed Ernst & Young LLP as auditor, FTI Consulting Inc. as consultant, and Greenhill & Co. LLC as financial advisor. FLYING J: Big West Reduces Staff in Bakersfield ----------------------------------------------- Flying J Inc.'s Big West of California LLC has reduced operations at its Bakersfield oil refinery in Southern California to the point where the only staff left are there to maintain the plant, a spokesman said, according to Bloomberg News. Bloomberg's Samantha Zee relates that in January, Big West said it would curtail operations at the Bakersfield refinery after failing to secure adequate crude oil supplies. The company is seeking to sell the refinery or find a partner to share in running the plant. An outside spokesman for the company Peter Hill was quoted saying in an interview, "Operations are now wound down to the extent that they can be. There have been layoffs in the past few weeks and the end point in terms of staffing is still under discussion with the union." The source relates that last month, Ed Huhn, secretary treasurer of the United Steelworkers of America Local 219 at the refinery, said Big West was expected to reduce the number of staff at the Bakersfield plant "down to 36 to 40 people." The remaining staffs are "needed to ensure the safety of the facility and that the refinery's baseline functionality is protected," Mr. Hill said, according to the Bloomberg report. And he stressed, "The intention is still to seek a resolution to the financial and operational difficulties that have been experienced. To the extent that a resolution can be reached, then all of this is being done with an eye on resuming operations in the future." 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. FORUM HEALTH: Schedules Filing Deadline Extended Until April 30 --------------------------------------------------------------- The Hon. Kay Woods of the U.S. Bankruptcy Court for the Northern District of Ohio extended until April 30, 2009, Forum Health and its debtor-affiliates' time to file (a) schedule of assets and liabilities; (b) statement of financial affairs; (c) schedule of current income and expenditures; (d) a statement of executory contracts and unexpired leases; and (e) a list of equity security holders. The Debtors related that the extension will provide sufficient time to gather necessary information, prepare and file the Schedules and Statements. Based in Warren, Ohio, Forum Health -- http://www.forumhealth.org/ -- offer health care services. The primary service area consists of the northeast Ohio counties of Mahoning, Trumbull and Columbiana; and northeast Ohio counties of Ashtabula, Geauga and Portage and the Pennsylvania counties of Mercer and Lawrence. The Debtor and its debtor-affiliates filed for Chapter 11 protection on March 16, 2009, (Bankr. N.D. Ohio Lead Case No.: 09- 40795) Paul W. Linehan, Esq. and Shawn M Riley, Esq. at McDonald Hopkins LLC represents the Debtors in heir resructuring efforts. The Debtors propose to employ Michael A. Gallo, Esq. at Nadler Nadler & Burdman Co., LPA as co-counsel; Kurtzman Carson Consultants LLC as claims, noticing and balloting agent; and Huron Consulting Services LLC as financial advisors. The Debtors listed estimated assets of $100 million to $500 million and estimated debts of $100 million to $500 million. FREDDIE MAC: Raises Doubts About Ability to Be Profitable Again --------------------------------------------------------------- Dawn Kopecki of Bloomberg reports that Freddie Mac announced that it needs more financial help from the government and consequently raised doubts about its ability to become profitable again. Freddie's decision to tap an additional $31 billion in aid in return for preferred stock will raise its annual dividend payment to the Treasury to $4.6 billion, a figure the McLean, Virginia- based company said may be beyond its means. Bloomberg quoted Freddie Mac as saying, "This dividend obligation exceeds our annual historical earnings in most periods, and will contribute to increasingly negative cash flows in future periods". The Company has posted earnings large enough to cover such a payment in only two of the past 19 years, according to data compiled by Bloomberg. The source says an inability to make good on dividends may force the Treasury to raise the interest, write off the debt or assume full control of Freddie, which was put under government control along with its larger competitor, Fannie Mae, on Sept. 6. "Basically, there is no exit strategy. There is no way they can repay the taxpayer even when credit losses tail off," Rajiv Setia, a fixed-income strategist at Barclays Capital in New York, said in an interview. Bloomberg relates that the conflicting demands of meeting government initiatives and pursuing profit were cited by Freddie as a reason for "significant uncertainty" about its capital needs and "long-term financial sustainability." Jim Vogel, the head of agency debt research at FTN Financial in Memphis, Tennessee, as cited by Bloomberg said that policy makers won't be able to make an accurate assessment about the companies' future for at least six months. "It's probably too strong to say that they'll never be profitable. You could say that it will be difficult for them to stay consistently profitable and earn the return required," Moshe Orenbuch, an analyst at Credit Suisse in New York, said in an interview. Freddie and Fannie Mae own or guarantee about $5.2 trillion of the $12 trillion U.S. residential mortgage market. Since the takeover, regulators have been pressuring the companies to offer low-cost mortgage refinancings and waive loan standards to help curb foreclosures amid the worst U.S. housing market since the Great Depression, the report added. Freddie and Fannie are part of President Obama's plan to help 9 million Americans avoid foreclosure. The Obama administration on March 4 said a program using Fannie and Freddie to refinance as many as 5 million loans would have the companies buy mortgages on properties that have less than 20 percent equity without requiring new appraisals or additional mortgage insurance, Bloomberg said. "They are being used as a public policy tool to save the housing market. That is just going to make it more difficult for them to be floated out as public companies down the road," Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia, said in an interview. Freddie's ability to return to profitability depends on how long the government keeps using the company to push its housing agendas, Mr. Miller said. According to the report, the Federal Housing Finance Agency put the companies under its control and forced out management after examiners said the two may be at risk of failing. The Treasury pledged to buy $100 billion of each company's preferred stock as needed when the value of their assets drops below the amount they owe on obligations. On Feb. 18, it doubled that funding commitment. About Freddie Mac The Federal Home Loan Mortgage Corporation -- (FHLMC) NYSE: FRE -- commonly known as Freddie Mac, is a stockholder-owned government- sponsored enterprise authorized to make loans and loan guarantees. Freddie Mac was created in 1970 to provide a continuous and low cost source of credit to finance America's housing. Freddie Mac conducts its business primarily by buying mortgages from lenders, packaging the mortgages into securities and selling the securities -- guaranteed by Freddie Mac -- to investors. Mortgage lenders use the proceeds from selling loans to Freddie Mac to fund new mortgages, constantly replenishing the pool of funds available for lending to homebuyers and apartment owners. At Sept. 30, 2008, the company's balance sheet showed total assets of $804,390 billion and total liabilities of $818,185 billion, resulting in a stockholders' deficit of $13,795 billion. Conservatorship As reported by the Troubled Company Reporter, the U.S. government took direct responsibility for Fannie Mae and Freddie Mac, placing the government sponsored enterprises under conservatorship on September 7, 2008. James B. Lockhart, director of Federal Housing Finance Agency, said that Fannie Mae and Freddie Mac share the critical mission of providing stability and liquidity to the housing market. Between them, the Enterprises have $5.4 trillion of guaranteed mortgage-backed securities (MBS) and debt outstanding, which is equal to the publicly held debt of the United States. Among the key components of the conservatorship, the FHFA, as conservator, assumed the power of the Board and management. FREDDIE MAC: Will Pay Bonuses to Keep Key Employees --------------------------------------------------- James R. Hagerty and Aaron Lucchetti at The Wall Street Journal report that Freddie Mac plans to pay retention bonuses but hasn't yet disclosed details. As reported by the Troubled Company Reporter on March 12, 2009, Freddie Mac reported a net loss of $23.9 billion for the quarter ended December 31, 2008, compared to a net loss of $25.3 billion for the quarter ended September 30, 2008. For the full-year 2008, the Company reported a net loss of $50.1 billion, compared to a net loss of $3.1 billion for the full-year 2007 WSJ relates that Freddie Mac is receiving increasing amounts of funding from the U.S. Treasury. According to the report, the Treasury has agreed to provide as much as $200 billion of capital each to Fannie Mae and Freddie Mac in exchange for preferred stock. Fannie Mae and Freddie Mac said that they will need a combined $60 billion of that money to cover their losses, the report states. The bonuses that Fannie Mac and Freddie Mac are paying are "critical" to keep people needed to support the mortgage market and work on foreclosure-prevention efforts, WSJ says, citing James Lockhart, director of the Federal Housing Finance Agency, of FHFA, which regulates Fannie Mae and Freddie Mac. Mr. Lockhart, WSJ relates, said that after the companies' chief executives were ousted in September 2008, "it would have been catastrophic to lose the next layers down and other highly experienced employees." Compensation has declined for many workers as other types of bonuses weren't paid in 2008 and "past stock grants are virtually worthless," the report states, citing Mr. Lockhart. The report says that until last year, Fannie Mae and Freddie Mac executives were compensated largely in the form of common stock. According to WSJ, U.S. Rep. Edolphus Towns said that bonuses for executives at companies that have received government financial assistance are "definitely wrong," as "they are rewarding folks who have not done a good job." WSJ says that Mr. Towns didn't think that executives would leave the companies if they didn't get retention bonuses. "Where are these people going? Everybody's laying off," WSJ quoted Mr. Towns as saying. About Freddie Mac The Federal Home Loan Mortgage Corporation -- (FHLMC) NYSE: FRE -- commonly known as Freddie Mac, is a stockholder-owned government- sponsored enterprise authorized to make loans and loan guarantees. Freddie Mac was created in 1970 to provide a continuous and low cost source of credit to finance America's housing. Freddie Mac conducts its business primarily by buying mortgages from lenders, packaging the mortgages into securities and selling the securities -- guaranteed by Freddie Mac -- to investors. Mortgage lenders use the proceeds from selling loans to Freddie Mac to fund new mortgages, constantly replenishing the pool of funds available for lending to homebuyers and apartment owners. At December 31, 2008, the company's balance sheet showed total assets of $850.9 billion and total liabilities of $881.6 billion, resulting in a stockholders' deficit of $30.7 billion. Conservatorship As reported by the Troubled Company Reporter, the U.S. government took direct responsibility for Fannie Mae and Freddie Mac, placing the government sponsored enterprises under conservatorship on September 7, 2008. James B. Lockhart, director of Federal Housing Finance Agency, said that Fannie Mae and Freddie Mac share the critical mission of providing stability and liquidity to the housing market. Between them, the Enterprises have $5.4 trillion of guaranteed mortgage-backed securities (MBS) and debt outstanding, which is equal to the publicly held debt of the United States. Among the key components of the conservatorship, the FHFA, as conservator, assumed the power of the Board and management. Being under Conservatorship, Freddie Mac said it is dependent upon the continued support of Treasury and FHFA to continue operating its business. FREEDOM COMMUNICATIONS: Moody's Cuts Corp. Family Rating to 'Caa3' ------------------------------------------------------------------ Moody's Investors Service downgraded Freedom Communications Inc.'s Corporate Family Rating and Probability of Default Rating each to Caa3, from Caa1 and Caa2, respectively. Moody's also lowered the company's senior secured bank credit facility ratings to Caa3 from Caa1. These actions conclude Moody's review for possible downgrade, originally initiated in September 2008, and follow the recent disclosure that the company is, as expected, currently in default under the financial covenants of its senior secured loan agreements. Details of the rating action are: Ratings downgraded: * Corporate Family Rating - to Caa3 from Caa1 * Probability of Default Rating - to Caa3 from Caa2 * Senior secured revolving credit facility due 2011 - to Caa3, LGD3, 48% from Caa1, LGD3, 33% * Senior secured term loan A due 2011 - to Caa3, LGD3, 48% from Caa1, LGD3, 33% * Senior secured term loan A-1 due 2012 - to Caa3, LGD3, 48% from Caa1, LGD3, 33% The rating outlook is negative. The rating actions follow Freedom's disclosure that it has received a default notification from its lenders in connection with its failure to comply with the September 30, 2008 financial ratio tests stipulated by the terms of its senior secured loan agreement. The company and its lenders remain in discussions in an attempt to resolve the current default; however, the company's lenders have not yet announced whether they intend to commence legal rights and remedies as creditors as provided by the terms of the loan agreement. The downgrade of the CFR to Caa3 largely reflects the ongoing adverse conditions placed upon Freedom by continuing soft market spending on newspaper advertising (especially in the company's hard-hit sub-prime California and Arizona markets), which has substantially reduced the company's free cash flow, as well as the increase in Freedom's debt burden following the complete drawdown of its revolving credit facility in September 2008. The downgrade of the Probability of Default rating to Caa3 incorporates Moody's concern that Freedom is currently in technical default under the terms of its senior secured credit agreement and that it lacks sufficient liquidity to fund the repayment of approximately $881 million of loans in the event that lenders exercise their legal rights to accelerate payment of their full outstanding balance. Moody's consider that lenders will be willing to provide a waiver (or amendment) to Freedom's already- elevated financial ratio tests, albeit at substantially higher cost to the company, which in turn would place yet further pressure on the company's liquidity profile, heightening the probability of near- to- intermediate term default. Moreover, even assuming that a waiver is granted Moody's consider that the company will face an elevated probability of default once scheduled amortization payments step up, should the current pace of advertising sales declines continue over the near term. Moreover, the Caa3 CFR reflects Freedom's heavy debt burden (which substantially exceeds the total value of the company, according to Moody's estimates), and its high leverage (which Moody's calculates at approximately 10 times total debt to EBITDA at the end of September 2008, including a partial debt attribution to Freedom's putable common stock and adjusting for underfunded pension obligations and operating leases). The negative rating outlook underscores Moody's view that recessionary market conditions are likely to continue unabated over the near term, placing further pressure on Freedom's liquidity and leverage metrics. In addition, the negative rating outlook incorporates the overhang of a potential put by Freedom's minority owners, last valued at approximately $430 million (based upon a December 2007 appraisal) although subject to extremely high uncertainty as to any value at the present time. The last rating action for Freedom Communications occurred on October 7, 2008, when Moody's downgraded Freedom's CFR to Caa1 and its PDR to Caa2. Freedom Communications is a newspaper and television broadcasting operator based in Irvine, California. The company recorded total revenues of $767 million for the LTM period ended September 30, 2008. FRESH AIR: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: Fresh Air Dispatch, LLC 4222 East Thomas Rd., Ste. 220 Phoenix, AZ 85018 Bankruptcy Case No.: 09-04804 Chapter 11 Petition Date: March 16, 2009 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Sarah Sharer Curley Debtor's Counsel: Harold E. Campbell, Esq. Harold E. Campbell, PC 1811 S. Alma School Road, Suite 225 Mesa, AZ 85210 Tel: (480) 839-4828 Fax: (480) 897-1461 Email: heciii@haroldcampbell.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/azb09-04804.pdf The petition was signed by Richard Barrett, manager of the Company. FRONTIER AIRLINES: Insists on Waiver of Matching 401(k) to Pilots ----------------------------------------------------------------- Bloomberg News' Bill Rochelle said March 18 that Frontier Airlines Inc. sued the pilots' union in bankruptcy court this week, contending the pilots are reneging on $7 million in concessions that they have voluntary agreed to provide. Last year, Frontier conveyed its intent to reject collective bargaining agreements with unions if it couldn't obtain voluntary concessions. The cost savings provided for in the concessions, Frontier asserts, are necessary for it to maintain operations and exit bankruptcy. The Debtor and the Frontier Airlines Pilots Association reached an agreement in December, the pilots ratified it early January, and the U.S. Bankruptcy Court for the Southern District of New York days later. The parties will be back to Court in light of a dispute regarding matching contributions to 401(k) plans. Mr. Rochelle said some pilots assert that Frontier remains obligated to provide matching contributions, while Frontier asserts that it is not required to do so beginning June 2008 until they are gradually restored after January 2010. According to the report, Frontier says the waiver of matching contributions was "heavily negotiated," has saved the airline $1.7 million so far, and will bring a $7 million savings for the life of the contract. Rank-and-file FAPA members in January overwhelmingly voted in favor of the Restructuring Participation Agreement, dated as of December 20, 2008, which provides for certain wage and benefit concessions until December 2011. Pilots agreed to these wage reductions: Compensation Period Pay Rate ------------------- -------- 01/20/2009 to 01/05/2011 reduced by 10% 01/20/2011 to 07/05/2011 reduced by 7% for all pilots with at least one year of service 07/20/2011 to 01/05/2012 reduced by 4% for all pilots with at least one year of service A full-text copy of the FAPA Restructuring Agreement is available for free at http://bankrupt.com/misc/FAPARestructuringPact.pdf. 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: Eyeing Investors; New Loan Has Dec. Maturity --------------------------------------------------------------- Chief executive of Frontier Airlines Sean Menke has a tough job of looking for investors in an airline, Joshua Freed at The Associated Press reported. For the past few weeks Mr. Menke and Chief Financial Officer Ed Christie have been visiting dozens of potential investors, looking both for an extended bankruptcy loan and a financier to take them out of bankruptcy. They got the first, but still need the second. "We believe that if we can find the appropriate plan sponsor that this organization could be out mid- to late summer, and that's our focus right now," Mr. Menke said in an interview. According to The Associated Press, the new $40 million debtor-in- possession loan from Republic Airways announced last week runs through Dec. 1, replacing a loan that would have been due April 1. Frontier's unsecured creditors include Republic and act as a sort of de-facto board of directors in bankruptcy, and they support the new loan with the Dec. 1 deadline. Mr. Menke, as cited by the report, said, "It tells you that they're comfortable going out that far". He called the Dec. 1 date "validation of the time that they're giving the organization." The source says Mr. Menke said that some of the potential investors had little interest in financing Frontier's exit from bankruptcy, but others asked for more information and appeared to be giving it serious thought. He said he has meetings with more potential investors scheduled in coming weeks. And he stressed, "We could continue to go for a while where we are, but we do need to find that plan sponsor, that is something this organization needs to do." Frontier's current bankruptcy court deadline to submit a reorganization plan is June 4; after that, creditors can step in and propose their own plan. That deadline has been extended before and could be again, said The Associated Press. About Frontier Airlines 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) GARY VAUGHT: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Gary W. Vaught and Susan C. Vaught 205 Kodiak Jacksonville, AR 72076 Bankruptcy Case No.: 09-11653 Chapter 11 Petition Date: March 10, 2009 Court: United States Bankruptcy Court Eastern District of Arkansas (Little Rock) Judge: James G. Mixon Debtor's Counsel: John Alexander Flynn, Esq. Flynn Law Firm P.O. Box 1344 Cabot, AR 72023-1344 Tel: (501) 843-8886 Fax : (501) 843-8887 Email: flynnlaw@centurytel.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors, together with its petition. The petition was signed by Gary W. Vaught and Susan C. Vaught. GENERAL MOTORS: SAAB Axes 750 Jobs, Biz Draws Interest from Rivals ------------------------------------------------------------------ Saab Automobile, which filed for bankruptcy protection in Sweden last month, will cut 750 jobs at its main factory in southern Sweden in response to falling demand, Niklas Magnusson and Toby Alder of Bloomberg reported. Gunilla Gustavs, Saab spokeswoman, as cited by Bloomberg said by telephone from Gothenburg, that about 650 of the affected workers are tied to production, while the remaining 100 jobs are administrative positions. According to the report, Saab Chief Executive Officer Jan-Aake Jonsson told Swedish national radio, "We've had too many employees for a very long time. The market is difficult and going into this reorganization we have to adjust our production accordingly". Bloomberg relates that Mr. Jonsson said March 4 that the carmaker has drawn interest from rivals as well as investment companies as it seeks a new owner. Parent General Motors Corp. said it wants to cut ties with Saab by the beginning of 2010 at the latest after years of losses. "We're hopeful that when we find a new investor and can introduce the new models, which are waiting and are almost ready, demand will increase and we can then hopefully increase production again and hire people again," Ms. Gustavs said. The report say that Ms. Gustavs added that among potential buyers is a group of undisclosed Swedish investors and that, as many as eight investors have shown an interest in the company. Stephen Pope, chief global strategist at Cantor Fitzgerald in London, said, "In a tough market, a product with no unique identity or selling proposition will not sell. Saab is a pale shadow of the beast it was right up to the end of the 1980s. Now it's just a re-skinned Opel or Vauxhall, that won't catch a Beemer or Mercedes buyer." Meanwhile, PSA Peugeot Citroen and Tata Motors Ltd. will not bid for a stake in Adam Opel GmbH, the newspaper Handelsblatt reported. According to Joseph Mapother of Bloomberg, Tata, the company that owns Jaguar Land Rover, is not interested in buying into General Motors' German subsidiary. "An unidentified PSA official said an Opel stake "isn't part of our current working strategy," Handelsblatt said on its Web site. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Latin America, Africa and Middle East, with headquarters in Miramar, Florida, is one of GM's four regional business units. GM LAAM employs approximately 37,000 people in 18 countries and has manufacturing facilities in Argentina, Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and Venezuela. GM LAAM markets vehicles under the Buick, Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and Suzuki brands. GM's common stock was considered the stock market's bellwether for many years, hence the saying "What's good for GM is good for America." * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on General Motors Corp. To 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. S&P said that the outlook is negative. Fitch Ratings, as reported in the Troubled Company Reporter on Nov. 11, 2008, placed the Issuer Default Rating of General Motors on Rating Watch Negative as a result of the Company's rapidly diminishing liquidity position. Given the current liquidity level of US$16.2 billion and the pace of negative cash flows, Fitch expects that GM will require direct federal assistance over the next quarter and the forbearance of trade creditors in order to avoid default. With virtually no further access to external capital and little potential for material asset sales, cash holdings are expected to shortly reach minimum required operating levels. Fitch placed these on Rating Watch Negative: -- Senior secured at 'B/RR1'; -- Senior unsecured at 'CCC-/RR5'. As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corp. And General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. Economy. GERALD MAYO: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Gerald D. Mayo Suzanne J. Mayo PO Box 1841 265 Lookout St. Estes Park, CO 80517 Bankruptcy Case No.: 09-14276 Chapter 11 Petition Date: March 17, 2009 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Sidney B. Brooks Debtor's Counsel: William A. Richey, Esq. 730 17th St., Ste. 240 Denver, CO 80202 Tel: (303) 572-1010 Email: lkraai@weinmanpc.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors, together with its petition. The petition was signed by Gerald D. Mayo and Suzanne J. Mayo. GHOST TOWN: Case Summary & 18 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Ghost Town Partners, LLC c/o Lynn Sylvester, CPA 675 S. Haywood Street Waynesville, NC 28786 Bankruptcy Case No.: 09-10271 Chapter 11 Petition Date: March 11, 2009 Court: Western District of North Carolina (Asheville) Judge: George R. Hodges Debtor's Counsel: David G. Gray, Esq. judyhj@bellsouth.net Westall, Gray, Connolly & Davis, P.A. 81 Central Avenue Asheville, NC 28801 Tel: (828) 254.6315 Total Assets: $13,035,300 Total Debts: $12,305,672 The Debtor's Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Industrial Service Group $316,217 PO Box 265 Dallas, GA 30132 Moore & Van Allen $192,248 PO Box 65045 Charlotte, NC 28265-0045 Hank P. Woodbum $178,656 2315 Beach Blvd., Suite 203 Jax Beach, FL 32250 North Carolina Dept. of $136,662 Bankruptcy Unit - Collec Gaines Kriner Elliott $73,328 Lynn A. Sylvester, CPA, PA $70,444 Liberty Mutual Ins. Co. $66,710 Jennings Builders Supply $55,616 RG Consultants $52,185 Parris Mfg. Co. $45,189 IFH Food Service Dist. $42,545 Lamar $41,518 Ideal Software Systems $40,917 BB&T Card Center $36,325 Harden & Associates, Inc. $29,511 Carolina-A-Contracting $28,866 Haywood Co. Tax Collector $26,902 Cherokee Boys Club Bus Serv. $26,525 The petition was signed by Roy S. Shiver, member and manager. GOOSE MARSH: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Goose Marsh, L.L.C. 401 City Avenue, Suite 710 Bala Cynwyd, PA 19004-1150 Bankruptcy Case No.: 09-11827 Chapter 11 Petition Date: March 16, 2009 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Debtor's Counsel: Leslie Beth Baskin, Esq. Spector Gadon Rosen 1635 Market Street Philadelphia, PA 19103 Tel: (215) 241-8888 Fax: (215) 241-8844 Email: lbaskin@lawsgr.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Maurice H. Johnson, vice president and treasurer of the company. A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/paeb09-11827.pdf GRAND PRIX: Voluntary Chapter 15 Case Summary --------------------------------------------- Chapter 15 Petitioner: Plaza Management Overseas S.A. as the foreign representative Chapter 15 Debtor: Grand Prix Associates Inc. West Suite, Old Clarence Thomas Building Wickham's Cay II Road Town, Tortola British Virgin Islands Chapter 15 Case No.: 09-16545 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Bundora Associates Inc. 09-16549 Bundora Investments Limited 09-16551 Bundora Investments N.V. 09-16554 Ruby Investments Sp. z.o.o. 09-16556 Bundora Corp. 09-16558 Lockhart Overseas Investments Corp. 09-16560 Lockhart Limited 09-16561 Naven Investments Sp. z.o.o. 09-16562 Lockhart Corp. I 09-16563 Shelby Overseas Invest & Trade Ltd. 09-16564 Type of Business: The Debtors operate a private investment holding company. See: http://www.grandprixassociates.vg/ Chapter 15 Petition Date: March 18, 2009 Court: District of New Jersey (Newark) Judge: Donald H. Steckroth Chapter 15 Petitioner's Counsel: Michael D. Sirota, Esq. Cole, Schotz, Meisel, Forman & Leonard 25 Main St. Hackensack, NJ 07601 (201) 489-3000 msirota@coleschotz.com Estimated Assets: unstated Estimated Debts: unstated GREENBRIER HOTEL: Files Chapter 11, Sells Resort to Marriott ------------------------------------------------------------ The Greenbrier Hotel Corporation, owner of The Greenbrier resort in White Sulphur Springs, has sought Chapter 11 protection to help ensure the viability of the resort. As part of the filing, GHC asked for approval of financing from CSX Corporation to support the resort s ability to operate in the normal course in the near-term. The filing should have no effect on the day-to-day operations of the resort or its ability to accept and fulfill advance bookings. Also, GHC has signed an Asset Purchase Agreement with Marriott Hotel Services, Inc. for the sale of The Greenbrier, subject to substantial conditions. "A sale to Marriott would be a great outcome for everyone associated with The Greenbrier," said Michael Gordon, president and managing director of the resort. The agreement with Marriott contemplates that CSX Corporation would provide $50 million, through an affiliate, to be used in the operation of the resort after completion of the sale. These funds would be paid over a two-year period following the closing of the transaction. In turn, Marriott would pay GHC between $60 million and $130 million within approximately seven years, with the actual amount depending on the timing of the payment and The Greenbrier s financial performance. The transaction, which is not expected to be completed until later in the year, is contingent on the ability of The Greenbrier and its unions to negotiate labor contracts that are satisfactory to Marriott as The Greenbrier competes in a very difficult market environment. It is also subject to a court-supervised auction process in which other qualified purchasers will have an opportunity to bid on the resort. Marriott would assume management responsibility for the resort as soon as the transaction is closed. The Chapter 11 petition was submitted to the United States Bankruptcy Court for the Eastern District of Virginia in Richmond. Based in White Sulphur Springs, West Virginia, The Greenbrier Hotel Corporation -- http://www.greenbrier.com-- is a wholly owned subsidiary of The Greenbrier Resort and Management Corporation, which is wholly owned by CSX Corporation. GREENBRIER HOTEL: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Greenbrier Hotel Corporation fka CSX Hotels, Inc. fka The White Sulphur Springs Co. 300 West Main Street White Sulphur Springs, WV 24986 Bankruptcy Case No.: 09-31703 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- The Greenbrier Resort and Club Management Company 09-31702 Greenbrier IA, Inc. 09-31704 Greenbrier Golf and Tennis Club Corporation 09-31705 Old White Club Corporation 09-31706 The Old White Development Company 09-31707 Type of Business: The Debtors own The Greenbrier resort in White Sulphur Springs. See: http://www.greenbrier.com Chapter 11 Petition Date: March 19, 2009 Court: Kevin R. Huennekens Judge: Eastern District of Virginia (Richmond) Debtor's Counsel: Dion W. Hayes, Esq. dhayes@mcguirewoods.com Patrick L. Hayden, Esq. phayden@mcguirewoods.com McGuireWoods LLP 1345 Avenue of the Americas Seventh Floor New York, NY 10105 Tel: (212) 548-2163 Fax: (212) 548.2171 Corporate Counsel: Huddleston Bolen LLP Special Labor Counsel: Dinsmore & Shohl LLP Claims Agent: Kurtzman Carson Consultants LLC Estimated Assets: $50 million to $100 million Estimated Debts: $100 million to $500 million The Debtor's Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Micros Systems Inc. $228,176 PO Box 23747 Columbia, MD 21046-2289 Tel: (443) 285-6821 Fax: (443) 587-2327 Allegheny Power $73,252 PO Box 2809 Lewisburg, WV 24901 Tel: (800) 255-3443 Fax: (800) 453-9366 Sysco Food Services of VA, LLC $55,841 PO Box 20020 Rt. 11 South Acct. No. 109108 Harrisonburg, VA 22801 Tel: (800) 927-9726 Fax: (540) 433-1698 Donahoe Construction Companies $40,000 Trinity Turf Inc. $35,781 City of White Sulphur Spr. $35,640 Frieshens-Book Division $33,900 Mountaineer Gas Company $23,819 Growth Enhancer Turf Consultant $20,822 Beth Daniel $20,000 Cardiac Science $19,350 Coastal Sunbelt Produce Co. $18,188 St. John Knits $18,162 Alleghany T-Shirts $13,766 John B. Tudor $12,177 First Citizens Bank $12,148 Kent Cartridge America Inc. $11,435 Chris Lilly $10,600 Goesyntec Consultants $10,000 Janpak/Paper Supply $9,756 The petition was signed by Michael McGovern, chief financial officer. GREYSTONE STAFFING: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: GreyStone Staffing, Inc. 6175 Sunrise Highway Massapequa, NY 11758 Tel: (212) 840-6810 Fax: (212) 840-6805 Bankruptcy Case No.: 09-71715 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- GreyStone Healthcare Staffing of 09-71717 Central Jersey, LLC GreyStone Healthcare Staffing of NY, LLC 09-71719 GreyStone Staffing of Central Jersey, LLC 09-71720 Chapter 11 Petition Date: March 16, 2009 Court: United States Bankruptcy Court Eastern District of New York (Central Islip) Judge: Robert E. Grossman Company Description: GreyStone Staffing is a recognized leader in the staffing industry, and has attracted and placed tens of thousands of temporary and permanent employees for business on Long Island, New Jersey, and the metropolitan New York area. See: http://www.greystonestaffing.com Debtor's Counsel: Kenneth A. Reynolds, Esq. McBreen & Kopko 500 North Broadway, Suite 129 Jericho, NY 11783 Tel: (516) 364-1095 Fax: (516) 364-0612 Email: kreynolds@mklawnyc.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Phillip Missirlian, CEO of the company. A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nyeb09-71715.pdf GUFFEY BROTHERS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Guffey Brothers, Inc. 14179 Lincoln Way North Huntingdon, PA 15642 Tel: (412) 751-2821 Fax: (412) 751-0953 Bankruptcy Case No.: 09-21830 Chapter 11 Petition Date: March 16, 2009 Court: United States Bankruptcy Court Western District of Pennsylvania (Pittsburgh) Company Description: The Company operates a flower shop. See: http://www.johnstontheflorist.com/ Debtor's Counsel: Robert O. Lampl, Esq. 960 Penn Avenue, Suite 1200 Pittsburgh, PA 15222 Tel: (412) 392-0330 Fax: (412) 392-0335 Email: rol@lampllaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Mark Guffey, president of the company. The Debtor did not file a list of 20 largest unsecured creditors together with its petition. HAROLD REYNOLDS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Harold B. Reynolds aka Harold Bruce Reynolds P.O. Box 198 Kiamesha Lake, NY 12751 Bankruptcy Case No.: 09-35537 Chapter 11 Petition Date: March 11, 2009 Court: United States Bankruptcy Court Southern District of New York (Poughkeepsie) Judge: Cecelia G. Morris Debtor's Counsel: Lawrence M. Klein, Esq. Drake Loeb Heller Kennedy Gogerty Gaba & Rodd, PLLC 555 Hudson Valley Avenue Suite 100 New Windsor, NY 12553 Tel:(845) 561-0550 Fax : (845) 561-1235 Email: lklein@drakeloeb.com Total Assets: $775,985.11 Total Debts: $3,527,467.24 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nysb09-35537.pdf The petition was signed by Harold B. Reynolds. HENRY MORROW: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Henry Walton Morrow, Jr. Jeannette Hinz Morrow P.O. Box 718 Shepherdstown, WV 25443 aka Bucky Morrow Bankruptcy Case No.: 09-00511 Chapter 11 Petition Date: March 16, 2009 Court: United States Bankruptcy Court Northern District of West Virginia (Martinsburg) Debtor's Counsel: David A. Camilletti, Esq. Campbell Miller Zimmerman, PC 201 North George St., Suite 202 Charles Town, WV 25414 Tel: (304) 725-5325 Fax: (304) 724-8009 Email: dcamilletti@cmzlaw.com Total Assets: $2,229,622 Total Debts: $1,632,281 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/wvnb09-00511.pdf HIGHQ BPO: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: HighQ BPO LLC 100 S. Alto Mesa El Paso, TX 79912 fka International Oustsourcing Services, LLC Tel: (866) 797-4690 Bankruptcy Case No.: 09-30511 Chapter 11 Petition Date: March 16, 2009 Court: United States Bankruptcy Court Western District of Texas (El Paso) Judge: Leif M. Clark Company Description: HighQ BPO outsources labor-intensive jobs that pertain to the accurate capture of data. See: http://www.highqbpo.com/ Debtor's Counsel: Harrel L. Davis, III, Esq. Gordon Mott & Davis P.C. P. O. Box 1322 El Paso, TX 79947-1322 Tel: (915) 545-1133 Email: vrust@gmdep.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Max Boedder, president of the company. A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/txwb09-30511.pdf IDEARC INC: Largest Stockholder Seeks Election as a Director ------------------------------------------------------------ Based upon growing concerns over the governance of Idearc, Inc. (Pink Sheets: IDAR), Jack Corwin, the Company's largest shareholder, has notified the Company of his request to be included on the slate of directors to be voted upon at the upcoming stockholders meeting. "In order to ensure that the interests of shareholders are regarded as paramount at the Board level, I have decided to step to the plate," said Mr. Corwin, an experienced businessman and professional investor. "This company [Idearc, Inc.] has tremendous potential, and frankly, the Board and Management have tremendous responsibility . . . to its investors, its employees, and its customers. Given the particulars of the company's financial situation, bankruptcy proceedings, indicated by the company as likely, would leave many constituencies greatly disadvantaged and in some cases literally wiped-out," Mr. Corwin continued. "In addition, I'm concerned that the Company's customers -- particularly its biggest national customers -- will not want to place advertising with a bankrupt company." "I have received a steady wave of communications from numerous Idearc shareholders indicating that their concerns parallel those that I have raised," said Mr. Corwin, who recently sent a letter to each member of Idearc's Board of Directors urging that bankruptcy could be avoided by pursuing other readily-available alternatives. In that letter, Mr. Corwin reminded the Board that Idearc has sufficient cash on hand -- $510 million at year-end 2008 -- to pay down enough of its outstanding debt to avoid the need for a bankruptcy, and failure to do so would be a breach of the Board's fiduciary duty to its shareholders. Mr. Corwin's commitment to Idearc is significant. As contrasted from the existing Directors who are only minimal stakeholders both individually and collectively -- one director holds 30,000 shares, while most others own less than 10,000 shares each -- Mr. Corwin holds greater than 12 million shares of Idearc stock. On March 16, 2009, Mr. Corwin said he was shocked Sunday to find, buried in a 17-page press release announcing 2008 financial results, language that indicated Idearc would likely file for bankruptcy. Mr. Corwin sent a letter to each member of the Board of Directors urging that bankruptcy could be avoided by pursuing other readily- available alternatives. Mr. Corwin reminded the Board that Idearc has sufficient cash on hand -- $510 million at year-end 2008 -- to pay down enough of its outstanding debt to avoid the need for a bankruptcy, and failure to do so would be a breach of the Board's fiduciary duty to its shareholders. There is growing speculation that the possible bankruptcy filing is part of a broader plan on the part of the company to decrease its fair market value, and in doing so make it possible for it to capture future appreciation from its currently-distressed valuation. "This comes at a time when all eyes are on Corporate America to behave with the utmost fiduciary responsibility. Where alternatives may exist for companies to avoid bankruptcy it is highly unusual for a corporation to choose the route of bankruptcy at the risk of damaging their business and harming their employees and other stakeholders," Mr. Corwin said on Monday. "The impact on local and national communities and economies is significant, to put it mildly," Mr. Corwin continued, "which is why I have sent a letter to each member of the Board of Directors asking them to consider all the other viable alternatives." About Idearc Inc. Headquartered in Dallas, Texas, Idearc Inc. (NYSE: IAR) -- http://www.idearc.com/-- provides yellow and white page directories and related advertising products in the United States and the District of Columbia. Products include print yellow pages, print white pages, Superpages.com, Switchboard.com and LocalSearch.com, the company's online local search resources, and Superpages Mobile, its information directory for wireless subscribers. The company is the exclusive official publisher of Verizon print directories in the markets in which Verizon is currently the incumbent local exchange carrier. The company uses the Verizon brand on its print directories in its incumbent markets, as well as in its expansion markets. * * * In February 2009, Moody's Investors Service downgraded Idearc Inc.'s Corporate Family Rating to Caa2 and its Probability of Default Rating to Caa3, reflecting concerns that the company may determine that a complete debt restructuring represents the best alternative to address its currently challenged capital structure. Standard & Poor's Ratings Services also lowered its corporate credit and issue-level ratings on Idearc Inc.; the corporate credit rating was lowered to 'CCC' from 'B-'. At the same time, S&P removed these ratings from CreditWatch, where they were placed with negative implications Oct. 31, 2008. The rating outlook is negative. INDIANA DATA: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Indiana Data, Inc. 1700 W. Bloomfield Rd. Bloomington, IN 47403 Bankruptcy Case No.: 09-30516 Debtor-affiliate filing a separate Chapter 11 petition: Entity Case No. ------ -------- HighQ BPO, LLC 09-30511 Chapter 11 Petition Date: March 17, 2009 Court: United States Bankruptcy Court Western District of Texas (El Paso) Judge: Leif M. Clark Debtor's Counsel: Harrel L. Davis, III, Esq. Gordon Mott & Davis P.C. P. O. Box 1322 El Paso, TX 79947-1322 Tel: (915) 545-1133 Email: vrust@gmdep.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/txwb09-30516.pdf The petition was signed by Rex Furr, Vice President of the company. INDYMAC FEDERAL: FDIC Sells Assets & Deposits to OneWest -------------------------------------------------------- The Federal Deposit Insurance Corporation has completed the sale of IndyMac Federal Bank FSB, Pasadena, California, to OneWest Bank, FSB, a newly formed Pasadena, California-based federal savings bank organized by IMB HoldCo LLC. OneWest will assume all deposits of IndyMac Federal. IMB HoldCo signed a letter of intent with the FDIC on December 31, 2008, to purchase IndyMac Federal. The 33 branches of IndyMac Federal will reopen as branches of OneWest on Friday, March 20, 2009. Depositors of IndyMac Federal will automatically become depositors of OneWest. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. As of January 31, 2009, IndyMac Federal had total assets of $23.5 billion and total deposits of $6.4 billion. OneWest has agreed to purchase all deposits and approximately $20.7 billion in assets at a discount of $4.7 billion. The FDIC will retain the remaining assets for later disposition. FDIC and OneWest have entered into a loss share transaction on the single family residential portfolio. Under terms of the loss share agreement, OneWest will continue the FDIC's existing loan modification program. IndyMac Federal sustained losses of $2.6 billion in the fourth quarter 2008 due to deterioration in the real estate market. The total estimated loss to the Deposit Insurance Fund is $10.7 billion. No further payments on receivership claims for uninsured funds from former IndyMac Bank, F.S.B. will be distributed as a result of this transaction. PRECISION PARTS: Wins Nod to Sell Biz. to Lone Bidder Cerion ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has authorized Precision Parts International Services Corp. to sell its business to Cerion LLC for $18.5 million, Bloomberg's Bill Rochelle reports. According to the report, did not have rival bids for Precision Parts' six plants that produce auto-parts. Headquartered in Rochester Hills, Michigan, Precision Parts International Services Corp. -- http://www.precisionparts.com/-- sells products to major north American automotive and non- automotive original equipment manufacturers and Tier 1 and 2 suppliers. The Debtors operate six manufacturing facilities throughout north America, including a facility in Mexico operated on the Debtors' behalf by Intermex Manufactura de Chihuahua under a shelter and logistics agreement. The Debtors' operations consist of two distinct lines of business: MPI, which performs fineblanking work and conventional metal stamping, as well as a range of value-added finishing operations, and Skill which performs conventional metal stamping, as well as a range of assembly and value-added finishing operations. Four of the Debtors are holding companies that have no employees and are not involved in the Debtors' day-to-day operations: PPI Holdings, Inc.; PPI Sub-Holdings, Inc.; MPI International Holdings, Inc.; and Skill Tool & Die Holdings Corp. The Company and eight of its affiliates filed for Chapter 11 protection on Dec. 12, 2008 (Bankr. D. Del. Lead Case No. 08-13289). David M. Fournier, Esq., at Pepper Hamilton LLP; and Robert S. Hertzberg, Esq., and Deborah Kovsky-Apap, Esq., at Pepper Hamilton LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Alvarez & Marsal North America LLC as financial advisor and Kurtzman Carson Consultants LLC as notice, claims and balloting agent. When the Debtors filed for protection from their creditors, they listed assets of between $100 million to $500 million each. INTERMET CORP: Warns of Liquidation; 2 Unions Oppose CBA Changes ---------------------------------------------------------------- Intermet Corp. has submitted to the U.S. Bankruptcy Court for the District of Delaware a motion to reject collective bargaining agreements with two unions representing 400 employees in order to cut costs. Intermet asserts that without the concessions they could gain from the rejections of the CBAs with the Service Workers International Union (USW) and the Glass, Molders, Pottery, Plastics and Allied Workers International Union (GMP), there will be "no prospects of successfully reorganizing." The International Association of Machinists (IAM) was not covered by the termination request because it has already agreed to concessions with the Debtor. The Company has 1,100 employees, with USW representing 316 employees and GMP 65. Intermet has requested authority to (ii) reject under Section 1113 of the Bankruptcy Code the CBAs of the two unions unless they reach an agreement; and (ii) terminate under Section 1114 the provision of retiree welfare benefits to existing retirees as of May 31. Pursuant to Section 1113, a court can only approve a CBA rejection if the debtor (1) has submitted to the union a proposal for modifications that are necessary to permit its reorganization and assures that all parties are treated fairly and equitably, (2) the union has refused to accept the proposal without good case, and (3) the balance of equities clearly favors the rejection of the CBA. Under Section 1114, the court may allow the debtor from modifying or not paying retiree benefits if the court finds that (i) the debtor has submitted to the retirees' representative a proposal for modifications that are necessary to permit its reorganization, (ii) the representative has refused to accept the proposal without good cause, and (iii) the modification is necessary to permit the reorganization of the debtor and assures that all parties are treated fairly and equitably, and is clearly favored by the balance of equities. Intermet Proposed Modifications According to Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, with respect to the CBAs, Intermet developed an initial proposal pursuant to Section 1113 to the USW, the IAM and the GMP to modify the terms of the CBAs and, to a limited extent, certain retiree benefits associated therewith. The Section 1113 Proposal is identical for all CBAs and all hourly employees, and includes these provisions: a. Pension Plans and Retiree Welfare Benefits. Any obligation in any CBA to provide for the continued accrual of defined benefit pension plan benefits and/or to maintain or to fund a defined benefit pension plan on behalf of employees covered by such CBA shall terminate effective immediately. The Unions will consent to the termination of the defined benefit pensions plans, whether through a distress termination or other proceeding. Any obligation in any CBA for Intermet to make any company contributions to any 401(k) or other defined contribution plan shall terminate effective immediately. Any express or implied obligation in any CBA to provide medical coverage or life insurance to an employee who retires during the term of such CBA shall terminate (i) if such employee has retired prior to the date hereof, then effective on February 28, 2009, or (ii) otherwise, effective on the date such employee retires. Any claim, as that term is defined in section 101(5) of the Bankruptcy Code, of the Unions or of an employee covered by any CBA with respect to pension or retiree welfare benefits shall be a prepetition unsecured claim. b. Asset Sale or Liquidation. In the event that either (i) Intermet consummates a sale of substantially all of its assets, whether pursuant to Section 363 of the Bankruptcy Code or a plan of reorganization, or (ii) Intermet's bankruptcy case is converted to Chapter 7 or Intermet liquidates its assets or business pursuant to a plan of liquidation, each CBA shall terminate and be of no further force and effect on the effective date of such sale, plan of reorganization or liquidation or conversion to chapter 7. Intermet shall use reasonable efforts to obtain recognition of the Unions as the bargaining representative of hourly employees, as applicable, who are offered employment by an acquirer of some or all of Intermet's assets. In the event of such termination, any claim, as that term is defined in Section 101(5) of the Bankruptcy Code, of the Unions or of an employee covered by any CBA arising with respect to the CBA shall be a prepetition unsecured claim. With respect to retiree welfare benefits, Intermet formulated an initial proposal pursuant to section 1114 of the Bankruptcy Code to the USW, the IAM and the official committee of retirees. The Section 1114 Proposal is identical for the salaried retirees and the IAM- and USW-represented employees who receive benefits under one of the postretirement plans, and states the following: "Intermet proposes to terminate all Retiree Welfare Plans and to end coverage as to each staff and hourly retiree participating in such Retiree Welfare Plans, effective February 28,2009." This date was later modified to May 31, 2009. The IAM accepted both Proposals as to the employees and retirees for which it serves as Authorized Representative on March 4, 2009. Two Unions Object USW says that in its counterproposal to the Debtor, it has consented to termination of the defined-benefit plans and the health and life insurance benefits for retirees, and that it is asking "only for certain modest items in exchange for the enormous sacrifice that these terminations will impose upon the workers whose skill and effort make this company run and upon the financially vulnerable retirees who gave many years of their lives to the company." However, according to USW, Intermet is refusing to give virtually anything of substance in exchange for the termination of the USW pension and retiree welfare benefits: -- In response to the termination of retiree welfare benefits at the end of May 2009, USW seeks one additional month of benefits before the termination -- at a cost that will almost certainly be less than the cost of the bonuses that Intermet expects to pay to a handful of management employees at its corporate headquarters. Intermet, however, has refused to budge beyond its proposed May 2009 termination date. -- USW also seeks a modest profit-sharing plan for the retirees, to be paid based on the financial performance of the plants where the USW employees work. Third Circuit law makes clear that a debtor seeking sacrifice from its workers should allow them to share in the "upside" in the event that, after their sacrifice is made, the debtor achieves improved financial performance. Intermet, however, has flatly refused any such "upside" for the retirees. -- In response to Intermet's Section 1113 proposal seeking permission to terminate the DB Plans and employer contributions to certain 401(k) plans, USW seeks a "successorship" clause that would require a potential buyer of one or more of the plants where USW-represented employees work to hire those employees, recognize the union and assume the existing labor contract as modified by the USW's proposal. Intermet, however, has refused any "successorship" clause that would preserve the employees' terms of employment, proposing only that it would use "reasonable efforts" to have a buyer of a plant recognize the USW. -- While demanding enormous sacrifice from the USW employees and retirees, Intermet makes no mention of any real sacrifice by top management. According to Bloomberg's Bill Rochelle, the second target of the motion, the GMP takes a different tack. The GMU says Intermet hasn't complied with bankruptcy law on the rejection of union contracts because it demanded an expansive confidentiality agreement as a condition for access to financial information. The union says the Company was obliged to bargain over confidentiality. Customers Require Plan Approval by June 30 Intermet wants the Court to rule on its rejection request at the March 23 hearing. Intermet has noted that its accommodation agreement with customers require certain milestones. If the Debtor fails to achieve these requirements, it will be in default of its obligations under the agreement and the customers may terminate the pricing and other accommodations necessary to its continued survival. Date Item Status ---- ---- ------ 10/31/08 Obtain Financing through 6/30/09 Achieved 03/31/09 Elimination or significant reduction in legacy costs In Progress In Progress 04/30/09 File a reorganization plan, execute a merger or asset purchase agreement In Progress 06/__/09 Achieve 50% increase in capacity utilization In Progress 06/30/09 Confirmed plan of reorganization, close merger or asset purchase transaction In Progress "If Intermet can neither submit a plan of reorganization nor consummate an asset purchase agreement by April 30, 2009, it could be forced into a liquidation and cease all business operations." About Intermet Corp. Based in Fort Worth, Texas, Intermet Corp. designs and manufactures machine precision iron and aluminum castings for the automotive and industrial markets. The company and its debtor- affiliates filed for chapter 11 protection on Aug. 12, 2008 (D. Del. Case Nos. 08-11859 to 08-11866 and 08-11868 to 08-11878). Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Michael E. Comerford, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as the Debtors' counsel. James E. O'Neill, Esq., Laura Davis Jones, Esq. and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' co-counsel. Kurtzman Carson Consultants LLC serves as the Debtors' claims, notice and balloting agent. An Official Committee of Unsecured Creditors has been formed in this case. When the Debtors filed for protection from their creditors, they listed assets of between $50 million and $100 million and debts of between $100 million and $500 million. This is the Debtors' second bankruptcy filing. Intermet Corp., along with its debtor-affiliates, filed for Chapter 11 protection on September 29, 2004 (Bankr. E.D. Mich. Case Nos. 04-67597 through 04-67614). Salvatore A. Barbatano, Esq., at Foley & Lardner LLP, represents the Debtors. In their previous bankruptcy filing, they listed $735,821,000 in total assets and $592,816,000 in total debts. Intermet Corporation emerged from this first bankruptcy filing in November 2005. JACK BARRETT: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Jack A. Barrett Dawn E. Barrett 34806 N. 80th Way Scottsdale, AZ 85266 Bankruptcy Case No.: 09-04743 Chapter 11 Petition Date: March 16, 2009 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: George B. Nielsen, Jr. Debtor's Counsel: D. Lamar Hawkins, Esq. Aiken Schenk Hawkins & Ricciardi PC 4742 North 24th Street, Suite 100 Phoenix, AZ 85016 Tel: (602) 248-8203 Fax: (602) 248-8840 Email: dlh@ashrlaw.com Company Description: The debtor is engaged in real estate development. Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of 20 largest unsecured creditors together with its petition. JAMES SIMS: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: James Sims 3025 Grandview Farms Place Bethel Park, PA 15102 Bankruptcy Case No.: 09-21812 Chapter 11 Petition Date: March 16, 2009 Court: United States Bankruptcy Court Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: Robert O. Lampl, Esq. 960 Penn Avenue, Suite 1200 Pittsburgh, PA 15222 Tel: (412) 392-0330 Fax: (412) 392-0335 Email: rol@lampllaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of 20 largest unsecured creditors together with its petition. JAMSHID ASHRAFI: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Jamshid Ariel Ashrafi 1814 10th St #3 Santa Monica, CA 90404 Bankruptcy Case No.: 09-16026 Chapter 11 Petition Date: March 17, 2009 Court: United States Bankruptcy Court Central District Of California (Los Angeles) Judge: Barry Russell Debtor's Counsel: Robert M. Aronson, Esq. Law Office of Robert M. Aronson 7438 Darnoch Way West Hills, CA 91307 Tel: (818) 667-3880 Estimated Assets: $4,564,074 Estimated Debts: $4,912,086 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-16026.pdf The petition was signed by Jamshid Ariel Ashrafi. JDA LITHOGRAPHIC: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: JDA Lithographic Group, L.L.C. dba Inove Graphics 2016 American Way Kingsport, TN 37660 Tel: (423) 246-8022 Bankruptcy Case No.: 09-50702 Chapter 11 Petition Date: March 16, 2009 Court: United States Bankruptcy Court Eastern District of Tennessee (Greeneville) Debtor's Counsel: Mark S. Dessauer, Esq. Hunter, Smith & Davis 1212 North Eastman Road P.O. Box 3740 Kingsport, TN 37664 Tel: (423) 378-8840 Fax: (423) 378-8801 Email: dessauer@hsdlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Dana C. Wolfe, manager of the company. A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/tneb09-50702.pdf JJTJ LLC: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: JJTJ, LLC c/o Joseph Murphy 13012 Justice Ave. Baton Rouge, LA 70816 Bankruptcy Case No.: 09-10324 Chapter 11 Petition Date: March 16, 2009 Court: United States Bankruptcy Court Middle District of Louisiana (Baton Rouge) Debtor's Counsel: Arthur A. Vingiello, Esq. Steffes, Vingiello & McKenzie, LLC 13702 Corsey Boulevard, Building 3 Baton Rouge, LA 70817 Tel: (225) 751-1751 Fax: (225) 751-1998 Email: avingiello@steffeslaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Joseph Murphy, member of the company. A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/lamb09-10324.pdf JOHNSON DAIRY: Owner Charged With Filing False Income Tax Returns ----------------------------------------------------------------- Greeley Tribune reports that Johnson Dairy LLC's owner, John Johnson, has been charged with filing false state income tax returns during a three-year period. Greeley Tribune relates that after filing for Chapter 11 protection, Mr. Johnson filed a complaint against New Frontier Bank of Greeley, alleging that bank officials: -- disguised his loans as lease agreements, -- moved his money to avoid regulator scrutiny, -- orchestrated kickbacks to themselves and others, and -- harmed him financially. According to Greeley Tribune, bank officials deny those charges, saying that they've done nothing wrong and called the complaint an act of desperation. The Weld District Attorney's Office, Greeley Tribune says, filed on Tuesday three counts of filing a false state tax return against Mr. Johnson, one count each for 2006, 2007, and 2008. Mr. Johnson, if convicted of the three counts, could face up to nine years in prison, the district attorney's office said in a statement. According to the statement, the charges were filed after an 11-month probe by the Colorado Department of Revenue. The district attorney's office said that Mr. Johnson will be served with a felony summons, and he has been ordered to appear in court for an arraignment on April 26. Headquartered in Eaton, Colorado, Johnson Dairy LLC -- http://www.johnstondairyfarm.com-- is a family-owned dairy company. As reported by the Troubled Company Reporter on January 9, 2009, Johnson Dairy LLC and owner John D. Johnson made a voluntary filing under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Colorado. JOSE VILLELA-GUZMAN: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Jose Evariato Villela-Guzman 7004 S. 34TH Ln. Phoenix, AZ 85041 aka Jose E. Villela Bankruptcy Case No.: 09-04857 Chapter 11 Petition Date: March 17, 2009 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: George B. Nielsen Jr. Debtor's Counsel: Nathan E Carr, Esq. The Law Office Of Nathan E. Carr 1830 S. Alma School Rd #104 Mesa, AZ 85210 Tel: (480) 278-1278 Email: natecarrlaw@yahoo.com Total Assets: $1,655,727 Total Debts: $1,783,123 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/azb09-04857.pdf The petition was signed by Jose Evariato Villela-Guzman. JOURNAL REGISTER: Shareholder & Utility Firms Object Bankruptcy --------------------------------------------------------------- Paul Bass at New Haven Independent reports that a major shareholder and a group of utility companies have filed objections against Journal Register Company's bankruptcy. New Haven relates that a challenge from Journal Register shareholder Richard M. Freeman was scheduled to be heard by the Hon. Allan L. Gropper on Tuesday. Mr. Freeman owns 8% of the Company's stock, says the report. According to the report, Mr. Freeman wants court permission to question Journal Register officials about who is running the shop these days. The court approved Robert Conway as Journal Register's interim CEO, according to New Haven. Mr. Freeman also filed a motion under Rule 2004 of the Federal Rules of Bankruptcy Procedure seeking to learn more about Journal Register's termination agreement and other documents suggesting that CEO James Hall may have left the Company with a golden parachute, New Haven says. That motion, the report states, was pulled from Tuesday's schedule pending negotiations between the parties. New Haven reports that seven utilities from various states, including Southern Connecticut Gas Co. and Connecticut Light & Power, are objecting Journal Register's bankruptcy filing. According to New Haven, the utilities want Judge Gropper to deny Journal Register's bid to prevent them from demanding more than two-week advance payments. The utilities claimed that they have back-due bills and feared larger unpaid debts, New Haven states. The utilities, New Haven relates, want the court to require six- month up-front payments. New Haven relates that Journal Register's bankruptcy filing included a proposal to give 31 key executives $1.7 million in bonuses if they meet certain goals, which mainly consist of closing down newspapers and laying off about 450 more full-time workers by March 31. New Haven states that Connecticut Attorney General Richard Blumenthal is opposing the bonuses, as the Company owes the state $21.5 million in unpaid corporate, sales, and other taxes. New Haven quoted Mr. Blumenthal as saying, "The growing [national] outrage about executives being rewarded for failure should . . . certainly help us. It heightens the credibility of our argument." The court will hear the objection on the bonuses on April 2, 2009, New Haven says. About Journal Register Yardley, Pennsylvania-based Journal Register Company (PINKSHEETS: JRCO) -- http://www.JournalRegister.com-- owns 20 daily newspapers, more than 180 non-daily publications and operates over 200 individual Web sites that are affiliated with the Company's daily newspapers, non-daily publications and its network of employment Web sites. All of the Company's operations are strategically clustered in six geographic areas: Greater Philadelphia; Michigan; Connecticut; Greater Cleveland; and the Capital-Saratoga and Mid-Hudson regions of New York. The Company also owns JobsInTheUS, a network of 20 employment Web sites. The company, along with its affiliates, filed for Chapter 11 bankruptcy protection on February 21, 2009 (Bankr. S.D. N.Y. Case No. 09-10769). Marc Abrams, Esq., Rachel C. Strickland, Esq., Shaunna D. Jones, Esq., and Jennifer J. Hardy, Esq., at Willkie Farr & Gallagher LLP, assist the company in its restructuring effort. The company's financial advisor is Lazard Freres & Co.. Its restructuring advisor is Conway, Del Genio, Gries & Co., LLC. Robert P. Conway is the Company's chief restructuring officer. The Company listed $100 million to $500 million in total assets and $500 million to $1 billion in total debts. LANDSBANKI ISLANDS: Sues Deutsche Bank for $10 Million ------------------------------------------------------ Landsbanki Islands hf has filed a complaint against Deutsche Bank AG New York Branch before the U.S. Bankruptcy Court for the Southern District of New York. According to a report by Bloomberg's Bill Rochelle, Landsbanki says it was among a group of lenders led by Deutsche Bank that made a loan of some $1.1 billion to Huntsman International LLC. Huntmain repaid the loan. Landsbanki, however, says Deutsche has refused to give its $10 million share of the repayment, despite numerous demands. The U.S. Bankruptcy Court in January granted Landsbanki's Chapter 15 petition, and acknowledged that that Iceland is home to the "foreign main proceeding." The Troubled Company Reporter - Europe reported Dec. 9, 2008 that a resolution committee has been appointed by the Icelandic Finance Supervisory Authority to run operations of Landsbanki with the aim of maximizing the value of the assets for all creditors. While saying that the bank is not in administration or liquidation, the Committee has obtained an Icelandic legislation setting forth a moratorium that bars creditors will be prevented from bringing enforcement proceedings against Landsbanki. About Landsbanki Islands Landsbanki Islands hf, also commonly known as Landsbankinn in Iceland, is an Icelandic bank. On October 7, 2008, the Icelandic Financial Supervisory Authority took control of Landsbanki and two other major banks. Landsbanki filed for Chapter 15 protection on Dec. 9, 2008 (Bankr. S.D. N.Y. Case No.: 08-14921). Gary S. Lee, Esq., at Morrison & Foerster LLP, represents the Debtor. When it filed for protection from its creditors, it listed assets and debts of more than US$1 billion each. LIFE SCIENCES: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Life Sciences, Inc. 2900 72nd St. N. Saint Petersburg, FL 33710 Bankruptcy Case No.: 09-04322 Chapter 11 Petition Date: March 9, 2009 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Judge: Michael G. Williamson Debtor's Counsel: Scott A Stichter, Esq. Stichter, Riedel, Blain & Prosser 110 E. Madison Street, Suite 200 Tampa, FL 33602-4700 Tel: 813-229-0144 Fax : 813-229-1811 Email: sstichter.ecf@srbp.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors, together with its petition. The petition was signed by Alex Burns, president of the company. LOUIS DIBERNARDO: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Louis Joseph DiBernardo Sherry Lynne DiBernardo 35925 Rancho California Road Temecula, CA 92589 Bankruptcy Case No.: 09-14788 Chapter 11 Petition Date: March 15, 2009 Court: United States Bankruptcy Court Central District of California (Riverside) Debtor's Counsel: Stuart J. Wald, Esq. 36154 Coffee Tree Place Murrieta, CA 92562 Tel: (310) 429-3354 Email: stuart.wald@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-14788.pdf LYONDELL CHEMICAL: Attempt to Terminate BASF Appeal Bond Denied --------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of New York ruled on March 18, 2009, that BASF Corporation could not force Lyondell Chemical Company to prosecute an appeal at this time, but that BASF's $200 million appeal bond securing the judgment remains in place. On August 13, 2007, BASF won a unanimous jury verdict of $169,932,670.17 against Lyondell in a breach of contract case in a New Jersey trial court. Inclusive of pre-judgment interest, BASF's judgment is currently valued at roughly $200 million. Lyondell's appeal of the judgment is pending before the New Jersey Appellate Division and BASF's judgment is secured by an appeal bond worth $200 million. When Lyondell filed for bankruptcy in a New York federal court, other legal proceedings against the company were stayed under the U.S. bankruptcy code, including its appeal of the BASF judgment. Lyondell argued that the appeal bond had terminated by reason of an order of the New Jersey appellate court -- which did not refer to or mention the bond -- and that BASF's judgment was no longer secured. The bankruptcy court found Lyondell's argument would lead to a "counterintuitive result, or even an absurdity" and denied Lyondell's request for relief. The bankruptcy court also ruled that a New Jersey court -- and not the bankruptcy court -- would be the proper forum for interpreting the appeal bond going forward if Lyondell wants to continue to press the issue. BASF argued for this result since the New Jersey court put the bond in place in the first instance to ensure that BASF would be protected from further action by Lyondell. Mark Stephenson, BASF spokesperson, commented that BASF was pleased with the result of the order, which will permit the appeal to go forward in the future and protect BASF's judgment in the meantime. BASF Corporation -- http://www.basf.com/usa-- headquartered in Florham Park, New Jersey, is the North American affiliate of BASF SE, Ludwigshafen, Germany. BASF has more than 15,000 employees in North America, and had sales of approximately $17.5 billion in 2008. BASF is the world's leading chemical company, with portfolio ranging from chemicals, plastics and performance products to agricultural products, fine chemicals, as well as oil and gas. 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) MARINE GASKET: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Marine Gasket, LLC 4250 Central Avenue Saint Petersburg, FL 33711 Bankruptcy Case No.: 09-04824 Chapter 11 Petition Date: March 16, 2009 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Joel S. Treuhaft, Esq. Joel S. Treuhaft Law Offices 2656 West Lake Road Palm Harbor, FL 34684 Tel: (727) 797-7799 Fax: (727) 230-9518 Email: jstreuhaft@yahoo.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by James P. Naset, manager of the company. A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flmb09-04824.pdf MARK MURPHY: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Mark D. Murphy Melissa K. Murphy 4307 Timberidge Avenue NW Massillon, OH 44646-1376 Bankruptcy Case No.: 09-60854 Chapter 11 Petition Date: March 16, 2009 Court: United States Bankruptcy Court Northern District of Ohio (Canton) Judge: Russ Kendig Debtor's Counsel: Anthony J. DeGirolamo, Esq. 116 Cleveland Ave., N.W., Suite 307 Canton, OH 44702 Tel: (330) 588-9700 Fax: (330) 588-9713 Email: ajdlaw@sbcglobal.net Total Assets: $1,212,515.00 Total Debts: $1,790,689.00 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ohnb09-60854.pdf The petition was signed by Mark D. Murphy and Melissa K. Murphy. MASONITE INT'L: Disclosure Statement Hearing Slated for April 17 ---------------------------------------------------------------- Judge Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware will hold on April 17, 2009, at 3:00 p.m., a hearing to consider the approval of: (a) Masonite Corporation and its affiliates' Disclosure Statement explaining their Joint Chapter 11 Plan of Reorganization as containing "adequate information" pursuant to Section 1125 of the Bankruptcy Code; (b) procedures for soliciting, receiving and tabulating votes on the Plan and for filing objections to the confirmation of the Plan; and (c) April 17, 2009, as the voting record date for determining holders of claims that are eligible to vote on the Plan. Objections, if any, to the adequacy of the Disclosure Statement must be filed and served on these parties on or before April 13, 2009: * Kirkland & Ellis, LLP Attn: Jonathan S. Henes, Esq. Attn: Christopher J. Marcus, Esq. Attn: Chad J. Husnick, Esq. Citigroup Center 153 East 53rd Street New York, NY 10022-4611 (Counsel to the Debtors) * Richards, Layton & Finger, P.A. Attn: Daniel J. DeFranceschi, Esq. Attn: Katisha D. Fortune, Esq. One Rodney Square 920 North King Street Wilmington, DE 19801 (Counsel to the Debtors) * Paul, Weiss, Rifkind, Wharton & Garrison LLP Attn: Andrew Rosenberg, Esq. Attn: Margaret Phillips, Esq. 1285 Avenue of the Americas New York, NY 10019-6064 (Counsel to the Informal Noteholder Committee) * Wachtell, Lipton, Rosen & Katz Attn: Richard G. Mason, Esq. Attn: Gregory E. Pessin, Esq. 51 West 52nd Street New York, NY 10019-6064 (Counsel to the Senior Secured Agent) * Office of the U.S. Trustee Attn: David Buchbinder 844 King Street, Suite 2207 Wilmington, DE 19801 In support of their Disclosure Statement, the Debtors assert that the Disclosure Statement contains the pertinent information necessary for the holder of claims entitled to vote on the Plan to make informed decisions about whether to vote to accept or reject the Plan, including, among others, these key sections and information: (a) executive summary, which includes the statement of the Debtors, certain Holders of Senior Secured Claims, and the Informal Noteholder Committee support for the Plan, the purpose of the Plan and the overview of the classes of claims and equity interests; (b) the Debtors' corporate history and capital structure, an overview of their business operations, their indebtedness, and the events leading to their Chapter 11 cases; (c) the classification and treatment of claims and equity interests under the Plan and the means for implementation of the Plan; (d) procedures for soliciting votes to accept or reject the Plan, Confirmation procedures, statutory requirements for Confirmation of the Plan and the consummation of the Plan; (e) certain risk factors that may affect the Plan, the value of any securities to be issued under the Plan, and the Debtors' businesses as well as certain risks associated with forward-looking statements and overall disclaimer as to the information provided by the Disclosure Statement; (f) liquidation under Chapter 7 of the Bankruptcy Code, including liquidation analysis, or the filing of alternative plans of reorganization; (g) Section 1145 of the Bankruptcy Code and the issuance of New Common Stock under the Plan; (h) certain U.S. federal income tax law consequences of the Plan with respect to Holders of Allowed Claims and the reorganized Debtors; (i) the reorganized Debtors' projections and valuations; and (j) the Debtors' recommendation that Holders of Claims entitled to vote on the Plan vote to accept the Plan, the Informal Noteholder Committee's recommendation that Holders of Claims entitled to vote on the Plan vote to accept the Plan, and certain Holders of Senior Secured Claim's recommendation that Holders of Claims entitled to vote on the Plan vote to accept the Plan. Pursuant to Section 1125, the proponent of a proposed Chapter 11 plan must provide holders of impaired claims and interests entitled to vote on the plan "adequate information" regarding that plan. Section 1125(a)(1) states, in relevant part, that "adequate information" means information of a kind, and in sufficient detail, about the debtor and the condition of the debtor's books and records. New Term Loan On the Effective Date, the Reorganized Debtors will enter into the New Term Loan consisting of a first lien secured term credit facility in the maximum amount of $200,000,000, and secured by first priority liens on and security interests on substantially all of the assets of the Reorganized Debtors. The New Term Loan will have a maturity date of December 31, 2013. Cash interest under the New Term Loan will be payable quarterly at LIBOR plus 700 basis points and amortization of the New Term Loan will be effected on a quarterly repayment schedule of 0.25% of the principal amount. The New Term Loan will not have any affirmative or negative covenants other than covenants requiring payment of principal and interest under the New Term Loan and limiting the Reorganized Debtors ability to incur liens that are pari passu with or senior to the liens securing the New Term Loan, with customary carve- outs and baskets, and a basket for first-priority liens on accounts receivable and inventory to secure up to $150 million of obligations in respect of receivables securitizations, or revolving credit facilities and an additional $25 million of obligations in respect of letter of credit facilities or debt to cash collateralize letters of credit. New liens will be subject to an intercreditor agreement on terms set forth in the New Term Loan or on other customary terms reasonable acceptable to the agent under the New Term Loan. The Reorganized Debtors are also limited to engage in consolidations, mergers or sales of all or substantially all of its assets. The New Term Loan will have customary events of default. New PIK Loan On the Effective Date, the Reorganized Debtors will enter into the New PlK Loan consisting of a second lien secured term facility in an amount equal to or greater than $100 million plus $200 million less the amount of New Term Loan actually issued. The New PIK Loan will be secured by second priority liens upon and security interests on substantially all of the assets of the Reorganized Debtors. The New PIK Loan will have a maturity date of December 31, 2015. The interest rate under the New PlK Loan will be 8.00%. The New PIK Loan will not have any affirmative or negative covenants other than covenants requiring payment of principal and interest under the loan and limiting the Reorganized Debtors' ability to engage in certain consolidations, mergers or sales of all or substantially all of its assets. The New PIK Loan will have customary events of default. The Debtors and the Reorganized Debtors will be entitled to transfer funds between and among themselves as they determine to be necessary or appropriate to enable the Reorganized Debtors to satisfy their obligations under the Plan. Any changes in intercompany account balances resulting from those transfers will be accounted for and settled in accordance with the Debtors' historical intercompany account settlement practices and will not violate the terms of the Plan. Issuance of New Common Stock Upon Confirmation, the Reorganized Debtors will issue the New Common Stock, including options, or other equity awards, if any, reserved for the Management Equity Incentive Plan, by New Masonite Holdings. An unlimited number of common shares will be authorized under the New Certificate of Incorporation of New Masonite Holdings. On the Effective Date, an initial number of shares of New Common Stock will be issued and distributed to: -- Holders of Claims in Class 2; and -- Holders of Claims in Class 4. For purposes of distribution, the New Common Stock will be deemed to have the value assigned to it based on, among other things, the New Masonite Total Enterprise Value, regardless of the date of distribution. Distributions of New Common Stock will only be made through broker accounts and New Masonite Holdings will not issue separate stock certificates. Furthermore, the New Board of New Masonite Holdings will implement the Management Equity Incentive Plan, which will consist of restricted stock units, stock options, and stock appreciation rights in an amount up to 10% of the New Common Stock, some portion of which will be allocated to management by the New Board of New Masonite Holdings within 30 days of the Effective Date. On the Effective Date, the Reorganized Masonite Debtors will issue the New Warrants to the Holders of Claims in Class 4, pursuant to the terms of the New Warrant Agreement. Pension Plan & Other Benefit Plans The Pension Plan will be continued in accordance with its terms, and the Debtors will satisfy the minimum funding standards to the Pension Benefit Guaranty Corporation. In addition, all employment, retirement, indemnification, and other agreements in place as of the Effective Date with the Debtors' officers, directors, and employees, or retirement income plans or welfare benefit plans will remain in place after the Effective Date, provided that the provision will not apply to any stock-based compensation or incentive plan existing as of the Petition Date. A full-text copy of the Prepackaged Plan is available for free at: http://bankrupt.com/misc/masonite_plan.pdf A full-text copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/masonite_ds.pdf 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. Masonite International, Inc., and six affiliates filed petitions on March 16, 2009, before the Ontario Superior Court of Justice (Commercial List) under the Companies' Creditors Arrangement Act. The Honorable Justice Campbell presides over the CCAA proceedings. Derrick Tay and Orestes Pasparakis at Ernst & Young, Inc. serve as monitor. Jay A. Carfagnini, Esq., and Brian F. Emprey, Esq., at Goodmans LLP in Toronto, serve as the Applicants' counsel. Masonite Corporation, based in Tampa, Florida, and several U.S. affiliates filed for Chapter 11 bankruptcy protection on the same day (Bankr. D. Del. Case No. 09-10844). Judge Peter J. Walsh handles the cases. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP; and Daniel J. DeFranceschi, Esq., Jason M. Madron, Esq., and Katisha D. Fortune, Esq., at Richards, Layton & Finger, P.A., serve as bankruptcy counsel. The Debtors' Investment Banker and Financial Advisor is Perella Wenberg Partners LLP; the Debtors' Restructuring Advisors is Alvarez & Marsal North American LLC; and the Debtors' Claims Agent is Kurtzman Carson Consultants LLC. As of January 31, 2009, the Debtors had total assets of $1,527,495,443 and total debts of $2,641,590,842. The Debtors filed with the Bankruptcy Court a pre-negotiated reorganization plan together with their petitions. The Plan provides that Masonite's existing senior secured obligations will be converted on a pro rata basis subject to the election of each existing holder of Senior Secured Obligations into: (i) a new first-priority senior secured term loan; (ii) a new second- priority senior secured PIK loan; and (iii) 97.5% of the common equity of the reorganized Masonite. Holders of Masonite's existing senior subordinated notes will be allocated 2.5% of the common equity in the reorganized Masonite plus warrants for 17.5% of the common stock of the reorganized Company, subject to dilution under certain conditions. Holders of Class 5 General Unsecured Claims under the Plan will be unimpaired and is expected to recover 100% under the Plan. Bankruptcy Creditors' Service, Inc., publishes Masonite Bankruptcy News. The newsletter tracks the CCAA proceedings in Canada and parallel chapter 11 proceedings in Delaware undertaken by company and its various affiliates. http://bankrupt.com/newsstand/or 215/945-7000) MASONITE INT'L: U.S. Units' Enterprise Value Set at $500,000,000 ---------------------------------------------------------------- Masonite Corporation and its debtor-affiliates have been advised by their investment banker, Perella Weinberg Partners LP, with respect to the estimated hypothetical reorganization value of the Reorganized Debtors. Together with the preparation of their Joint Chapter 11 Plan of Reorganization, the Debtors, together with Perella Weinberg, prepared valuation analysis. Perella Weinberg estimated the New Masonite Total Enterprise Value of the Reorganized Masonite Debtors to be approximately $500,000,000. The New Masonite Total Enterprise Value consists of the theoretical enterprise value of the Reorganized Debtors through the application of various relative and intrinsic valuation methodologies. Perella Weinberg has estimated the New Masonite Total Enterprise Value as of June 8, 2009. The imputed reorganization equity value of the Reorganized Masonite Debtors, which takes into account estimated debt balances and other obligations under the Plan as of the assumed Effective Date, is estimated to be approximately $264,000,000. The debt balances were calculated based on the assumption that the combined principal amount of the New Term Loan and the New PIK Loan will be approximately $300,000,000. If the Combined Amount is determined to be a different amount, then the Equity Value will be adjusted accordingly. The estimates of the New Masonite Total Enterprise Value and the Equity Value of the Reorganized Masonite Debtors are based on a number of assumptions, including a successful reorganization of the Debtors' business, the implementation and realization of the Reorganized Debtors' business plans, the achievement of the forecasts reflected in management's projections, and the Plan becoming effective on the assumed Effective Date. In preparing its estimate of the New Masonite Total Enterprise Value, Perella Weinberg, among other things: (a) reviewed certain historical financial information of the Debtors for recent years and interim periods; (b) reviewed certain internal financial and operating data of the Debtors and financial projections relating to their business and prospects; (c) met with certain members of the senior management of the Debtors to discuss the Debtors' operations and future prospects; (d) reviewed publicly available financial data and considered the market values of public companies that Perella Weinberg deemed generally comparable to those of the Debtors as a whole or a significant part of their operations; (e) considered certain economic and industry information relevant to the Debtors' operations; and (f) reviewed other information and conducted other analyses as Perella Weinberg deemed appropriate. Although Perella Weinberg conducted a review and analysis of the Debtors' businesses, operating assets and liabilities and business plans, Perella Weinberg assumed and relied on the accuracy and completeness of all (a) financial and other information furnished to it by the Debtors and by other firms retained by the Debtors and (b) publicly available information. Perella Weinberg did not independently verify any financial projections prepared by management of the Debtors in connection with its estimate of the New Masonite Total Enterprise Value. Perella Weinberg has assumed that those projections have been prepared reasonably, in good faith and on a basis reflecting the currently available estimates and judgments of the Debtors as to the future operating and financial performance of the Debtors. Those projections assume that the Debtors will operate the businesses reflected in the financial forecast and that those businesses will perform as expected in the financial forecast. To the extent that the Debtors operate at higher or lower capacity utilizations or have higher or lower raw material margins during the period contemplated in the projections and to the extent that all or a portion of the businesses perform at levels inconsistent with those expected by management in the financial forecast, those adjustments may have a material impact on the projections and the valuations as presented in the Plan. Hypothetical valuation estimates reflect computations of the estimated New Masonite Total Enterprise Value and Equity Value of the Reorganized Debtors through the application of various valuation techniques, including, among others: (a) a comparable company analysis, in which Perella Weinberg analyzed the enterprise values of public companies that Perella Weinberg deemed generally comparable to all or parts of the operating businesses of the Debtors as a multiple of certain financial measures, including, but not limited to, earnings before interest, taxes, depreciation and amortization and then applied multiples derived from those analysis, among other statistics, to the projected EBITDA of the Reorganized Masonite Debtors; and (b) a discounted cash flow analysis, in which Perella Weinberg, using a weighted average cost of capital, computed the present value of free cash flows and the terminal value of the Reorganized Debtors. Reorganization Beats Liquidation Section 1129(a)(7) of the Bankruptcy Code requires that each holder of an impaired allowed claim or interest either (i) accept the plan of reorganization or (ii) receive or retain under the plan property of a value, as of the effective date, that is not less than the value that holder would receive or retain under the plan of reorganization if the debtor were liquidated under Chapter 7 of the Bankruptcy Code on the effective date. This is referred to as the "best interests" test. To demonstrate compliance with the "best interests" test, the Debtors prepared a liquidation analysis that shows the estimated a range of proceeds that would be generated from a hypothetical Chapter 7 liquidation. The Debtors assumed a liquidation date of June 8, 2009. The Effective Date is expected to be the same as the Liquidation Date. The Debtors first determined the dollar amount that would be generated from a hypothetical Chapter 7 liquidation of their assets where a Chapter 7 trustee would be appointed and charged with reducing to cash any and all of the assets. In this hypothetical liquidation scenario, the trustee would be required to either (i) sell the assets owned by the Debtors and their non- Masonite Debtor affiliates as going-concerns or (ii) shut down the Debtors' businesses and sell the individual assets of the Debtors and their non-Masonite Debtor affiliates. The gross amount of cash available from liquidation would be the sum of the proceeds from the disposition of the Debtors' assets and cash held by the Debtors at the time of the commencement of the hypothetical Chapter 7 cases. The Debtors then reduced the total amount by the amount of any claims secured by those assets, the costs and expense of liquidation, and additional administrative expenses and priority claims that may result from the termination of the Debtors' businesses and the use of Chapter 7 for purposes of the hypothetical liquidation. Any net cash would be allocated to creditors and stockholders in strict priority in accordance with Section 726 of the Bankruptcy Code. Finally, the Debtors compared their hypothetical liquidation value to the value and returns provided for under the Plan. The Debtors' management assumed that (i) the Debtors would have access to cash collateral over the course of the hypothetical Chapter 7 liquidation, (ii) all operating divisions would be liquidated, and (iii) the Debtors would be able to complete an expedited liquidation. The Debtors did not include estimates for additional claims that may arise as part of any conversion to a Chapter 7 liquidation, including potential rejection damages claims associated with the rejection of executory contracts or unexpired leases pursuant to Section 365, potential claims associated with the rejection of various management employment contracts, and potential claims that would arise in connection with the Worker Adjustment and Retraining Notification Act. In addition, the Debtors have not performed a comprehensive analysis of potential avoidance actions and, therefore, the Liquidation Analysis does not account for the proceeds, if any, of those avoidance actions. A full-text copy of the Liquidation Analysis is available for free at: http://bankrupt.com/misc/masonite_liquidanalysis.pdf Financial Projections Underpinning Plan In connection with the negotiations between Masonite International, Inc., and the Senior Secured Agent and the Informal Noteholder Committee relating to the restructuring transaction, Masonite provided the Senior Secured Agent and the Informal Noteholder Committee with certain non-public financial information under confidentiality agreements. The information provided by Masonite included projections of the company's operations and financial conditions from 2009 through 2013, prepared as of February 2009. The projections are based on a variety of estimates and assumptions, including: (a) Masonite'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 obligations, 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; (b) current and projected market conditions in each of the company's 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; (c) 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 that growth in both its North American and the rest of the world segments based on the pace of global economic recovery; (d) 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. 2008A 2009E 2010E 2011E 2012E 2013E ------ ------ ------ ------ ------ ------ Balance Sheet ($ in millions) Cash $194 $177 $157 $176 $200 $250 Accounts Receivable 239 144 148 162 189 220 Inventory 233 188 219 248 284 316 Prepaid 23 18 14 17 20 22 Net fixed assets 867 813 768 725 699 688 ------ ------ ------ ------ ------ ------ Total assets $1,556 $1,340 $1,306 $1,328 $1,392 $1,496 ====== ====== ====== ====== ====== ====== Revolving facility $336 $0 $0 $0 $0 $0 Accounts payable, 287 164 196 227 255 273 accrued debts & other short-term debt Long-term debt 1,909 303 310 317 325 334 Net tax liabilities 46 44 44 44 44 44 Other long-term debts 32 26 22 19 17 15 Non-controlling interest 27 30 31 34 36 39 Equity (1,081) 774 703 688 715 791 ------ ------ ------ ------ ------ ------ Total liabilities and equity $1,556 $1,340 $1,306 $1,328 $1,392 $1,496 ====== ====== ====== ====== ====== ====== A full-text copy of the Financial Projections is available for free at: http://bankrupt.com/misc/masonite_finlprojections.pdf 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. Masonite International, Inc., and six affiliates filed petitions on March 16, 2009, before the Ontario Superior Court of Justice (Commercial List) under the Companies' Creditors Arrangement Act. The Honorable Justice Campbell presides over the CCAA proceedings. Derrick Tay and Orestes Pasparakis at Ernst & Young, Inc. serve as monitor. Jay A. Carfagnini, Esq., and Brian F. Emprey, Esq., at Goodmans LLP in Toronto, serve as the Applicants' counsel. Masonite Corporation, based in Tampa, Florida, and several U.S. affiliates filed for Chapter 11 bankruptcy protection on the same day (Bankr. D. Del. Case No. 09-10844). Judge Peter J. Walsh handles the cases. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP; and Daniel J. DeFranceschi, Esq., Jason M. Madron, Esq., and Katisha D. Fortune, Esq., at Richards, Layton & Finger, P.A., serve as bankruptcy counsel. The Debtors' Investment Banker and Financial Advisor is Perella Wenberg Partners LLP; the Debtors' Restructuring Advisors is Alvarez & Marsal North American LLC; and the Debtors' Claims Agent is Kurtzman Carson Consultants LLC. As of January 31, 2009, the Debtors had total assets of $1,527,495,443 and total debts of $2,641,590,842. The Debtors filed with the Bankruptcy Court a pre-negotiated reorganization plan together with their petitions. The Plan provides that Masonite's existing senior secured obligations will be converted on a pro rata basis subject to the election of each existing holder of Senior Secured Obligations into: (i) a new first-priority senior secured term loan; (ii) a new second- priority senior secured PIK loan; and (iii) 97.5% of the common equity of the reorganized Masonite. Holders of Masonite's existing senior subordinated notes will be allocated 2.5% of the common equity in the reorganized Masonite plus warrants for 17.5% of the common stock of the reorganized Company, subject to dilution under certain conditions. Holders of Class 5 General Unsecured Claims under the Plan will be unimpaired and is expected to recover 100% under the Plan. Bankruptcy Creditors' Service, Inc., publishes Masonite Bankruptcy News. The newsletter tracks the CCAA proceedings in Canada and parallel chapter 11 proceedings in Delaware undertaken by company and its various affiliates. http://bankrupt.com/newsstand/or 215/945-7000) MASONITE INT'L: Solicitation and Confirmation Timeline Proposed --------------------------------------------------------------- Masonite Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to approve a proposed timeline for soliciting plan votes and obtaining confirmation of their plan. The Debtors ask the Court to establish these dates and deadlines: April 24, 2009 -- Deadline for distributing solicitation packages, including Ballots, Beneficial Holder Ballots, and Master Ballots, to Holders of Claims entitled to vote on the Plan April 27, 2009 -- The last date by which the Debtors will publish notice of the Confirmation Hearing May 12, 2009 -- The date by which the Debtors must file the Plan Supplement with the Court and serve the 2002 List with a notice that will (i) inform the parties that the Debtors filed the Plan Supplement, (ii) list the information contained in the Plan Supplement, and (iii) explain how parties may obtain copies of the Plan Supplement May 25, 2009 -- Deadline by which all Ballots and Master Ballots must be properly executed, completed and delivered so that they are actually received by Financial Balloting Group, LLC -- Deadline by which objections to the Plan must be filed with the Court May 28, 2009 -- Date by which the Debtors must file the Voting Report with the Court June 1, 2009 -- Confirmation Hearing Date The Debtors also ask the Court to approve uniform procedures for soliciting, receiving, and tabulating votes to accept or reject their Joint Chapter 11 Plan of Reorganization, voting to accept or reject the Plan, and filing objections to the Plan. The Debtors also ask the Court to approve beneficial ballots and the master ballots in the form substantially similar to Official Form 14. The Debtors will distribute solicitation packages to Holders of Claims entitled to vote on the Plan. Certain Holders of Claims and all Holders of Equity Interests are not entitled to vote on the Plan. As a result, these parties will not receive solicitation packages and, instead, will receive an appropriate form of Non-Voting Status, if any, in lieu of solicitation materials. Voting Record Date The Debtors ask the Court to set April 22, 2009, as the record date for determining (a) the Holders of Claims entitled to receive a Solicitation Package; (b) the Holders of Claims entitled to vote to accept or reject the Plan; and (c) whether Claims have been properly transferred to an assignee pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedure. Solicitation for Class 4 Claim Holders Because of the added complexity of identifying and reaching Beneficial Holders of Class 4 Senior Subordinated Note Claims, advance notice of the Voting Record Date is necessary to enable the assembly of record ownership lists as of the Voting Record Date. To help ensure the highest likehood of an efficient and cost-effective solicitation process, prior to the Solicitation Deadline, the Voting Agent will contact known Nominees to provide them with advance notice of the Voting Record Date and inform them of the proposed solicitation procedures. Once the Voting Record Date has passed, the Debtors will distribute Solicitation Packages to each Nominee identified as holding Senior Subordinated Notes on behalf of Beneficial Holders as of the Voting Record Date. Notices to Holders of Claims Not Entitled to Vote Under the Plan, Classes 1, 3, 5, 6, and 7 are unimpaired and are deemed to have accepted the Plan. Classes 8 and 9 are receiving no distribution under the Plan and are deemed to reject the Plan. Holders of claims under Classes 1, 3, 5, 6, 7, 8, and 9 will not receive any solicitation packages and, instead, will receive an appropriate form of Non-Voting Status Notice. The Debtors will not provide the Holders of Intercompany Claims or Intercompany Interests with a Solicitation Package or any other type of notice. Counterparties to executory contracts and unexpired leases will receive a "Contract/Lease Party Notice" in lieu of a Non-Voting Status Notice. Voting & Tabulation Procedures Ballots will not be counted or considered for any purpose in determining whether the Plan has been accepted or rejected if: -- the Ballot is illegible or contains insufficient information to permit identification of the Holder of the Claim; -- the Ballot does not hold a Claim in a Class that is entitled to vote on the Plan or is not otherwise entitled to vote pursuant to the solicitation procedures; -- the Ballot is sent to the Debtors or their representatives other than the Voting Agent; -- the Ballot is unsigned; or -- the Ballot is not marked to accept or reject the Plan or is marked both. 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. Masonite International, Inc., and six affiliates filed petitions on March 16, 2009, before the Ontario Superior Court of Justice (Commercial List) under the Companies' Creditors Arrangement Act. The Honorable Justice Campbell presides over the CCAA proceedings. Derrick Tay and Orestes Pasparakis at Ernst & Young, Inc. serve as monitor. Jay A. Carfagnini, Esq., and Brian F. Emprey, Esq., at Goodmans LLP in Toronto, serve as the Applicants' counsel. Masonite Corporation, based in Tampa, Florida, and several U.S. affiliates filed for Chapter 11 bankruptcy protection on the same day (Bankr. D. Del. Case No. 09-10844). Judge Peter J. Walsh handles the cases. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP; and Daniel J. DeFranceschi, Esq., Jason M. Madron, Esq., and Katisha D. Fortune, Esq., at Richards, Layton & Finger, P.A., serve as bankruptcy counsel. The Debtors' Investment Banker and Financial Advisor is Perella Wenberg Partners LLP; the Debtors' Restructuring Advisors is Alvarez & Marsal North American LLC; and the Debtors' Claims Agent is Kurtzman Carson Consultants LLC. As of January 31, 2009, the Debtors had total assets of $1,527,495,443 and total debts of $2,641,590,842. The Debtors filed with the Bankruptcy Court a pre-negotiated reorganization plan together with their petitions. The Plan provides that Masonite's existing senior secured obligations will be converted on a pro rata basis subject to the election of each existing holder of Senior Secured Obligations into: (i) a new first-priority senior secured term loan; (ii) a new second- priority senior secured PIK loan; and (iii) 97.5% of the common equity of the reorganized Masonite. Holders of Masonite's existing senior subordinated notes will be allocated 2.5% of the common equity in the reorganized Masonite plus warrants for 17.5% of the common stock of the reorganized Company, subject to dilution under certain conditions. Holders of Class 5 General Unsecured Claims under the Plan will be unimpaired and is expected to recover 100% under the Plan. Bankruptcy Creditors' Service, Inc., publishes Masonite Bankruptcy News. The newsletter tracks the CCAA proceedings in Canada and parallel chapter 11 proceedings in Delaware undertaken by company and its various affiliates. http://bankrupt.com/newsstand/or 215/945-7000) MASONITE INT'L: Court Grants Interim OK to Use Cash Collateral -------------------------------------------------------------- Masonite Corporation and its debtor affiliates use cash on hand and cash flow from operations to fund working capital, capital expenditures, research and development efforts, and for other general corporate purposes. An inability to use these funds during the Chapter 11 cases could cripple the Debtors' business operations, their proposed counsel, Richard M. Cieri, Esq., at Kirkland & Ellis, LLP, in New York, said. Indeed, Mr. Cieri said, the Debtors must use their cash to, among other things, continue the operation of their businesses in an orderly manner, maintain business relationships with vendors, suppliers and customers, pay employees and satisfy other working capital and operation needs -- all of which are necessary to preserve and maintain the Debtors' going-concern value and, ultimately, effectuate a successful reorganization. Accordingly, the Debtors sought and obtained, on an interim basis, authority from the U.S. Bankruptcy Court for the District of Delaware to use the cash collateral securing their $1,500,000,000 prepetition indebtedness from a consortium of lenders led by The Bank of Nova Scotia, as administrative agent. The Prepetition Lenders, according to Mr. Cieri, have consented to the Debtors' use of Cash Collateral in the ordinary course of business pursuant to certain terms. As adequate protection, the Debtors will provide the Prepetition Lenders with these forms of adequate protection: (a) additional and replacement continuing valid, binding, enforceable, non-avoidable and automatically perfected postpetition security interests in and liens on all property and assets of the Debtors, which will be: -- junior only to the Carve-Out, the charges ordered by the Ontario Superior Court of Justice in some of the Debtors' affiliates' proceedings under the Canadian Companies' Creditors Arrangement Act, and the Permitted Prior Liens; and -- senior to all other security interests in, liens on, or claims against any of the Collateral; (b) superpriority claim pursuant to Section 507(b) to the extent of any diminution in the value of their interest in the Prepetition Collateral, which will: -- be junior only to the Carve-Out and the CCAA Charges; and -- have priority over all administrative expense claims and unsecured claims against the Debtors or their estates. The Debtors will provide adequate protection payments to the Prepetition Lenders in the form of: * payments in cash on a monthly basis of all cash-pay interest, fees, and other amounts due under the Prepetition Credit Documents; and * ongoing payments of the reasonable postpetition fees, costs, and expenses of the Prepetition Agent, including, without limitation, the reasonable postpetition fees and expenses of legal, financial advisory, investment banking and other professionals. The Debtors will also continue to maintain and insure the Collateral in the amounts and for the risks, and by the entities, required under the Prepetition Credit Documents. "Carve-Out" means the (a) unpaid fees of the Clerk of the Bankruptcy Court and the U.S. Trustee; (b) unpaid fees and expenses of professional persons retained by any Debtor or statutory committee incurred prior to delivery of a Carve-Out Trigger Notice; and (c) unpaid Professional Fees in an aggregate amount not to exceed $5,000,000 of Professionals incurred subsequent to delivery of a Carve Out Trigger Notice. Use of the Cash Collateral is subject to customary affirmative covenants and events of default, including the Debtors' maintenance of a rolling 13-week cash flow forecast in form and substance consistent with the Cash Flow Projected provided to the Prepetition Agent before the Petition Date. A full-text copy of the 13-Week Cash Flow Projection commencing on the week ended March 22, 2009, until the week ended June 12, 2009, is available for free at: http://bankrupt.com/misc/masonite_13weekcash.pdf The Interim Order provides that any statutory committee appointed in the Chapter 11 cases will have until May 31, 2009, to object or challenge the validity, extent, priority, or perfection of the Prepetition Liens, or the validity, allowability, priority, full secured status, or amount of the Prepetition Obligations. The Court will convene a hearing on April 13, 2009, at 3:30 p.m., to consider final approval of the motion. Objections are due April 6. A full-text copy of the Interim Order is available for free at: http://bankrupt.com/misc/masonite_interimord.pdf 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. Masonite International, Inc., and six affiliates filed petitions on March 16, 2009, before the Ontario Superior Court of Justice (Commercial List) under the Companies' Creditors Arrangement Act. The Honorable Justice Campbell presides over the CCAA proceedings. Derrick Tay and Orestes Pasparakis at Ernst & Young, Inc. serve as monitor. Jay A. Carfagnini, Esq., and Brian F. Emprey, Esq., at Goodmans LLP in Toronto, serve as the Applicants' counsel. Masonite Corporation, based in Tampa, Florida, and several U.S. affiliates filed for Chapter 11 bankruptcy protection on the same day (Bankr. D. Del. Case No. 09-10844). Judge Peter J. Walsh handles the cases. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP; and Daniel J. DeFranceschi, Esq., Jason M. Madron, Esq., and Katisha D. Fortune, Esq., at Richards, Layton & Finger, P.A., serve as bankruptcy counsel. The Debtors' Investment Banker and Financial Advisor is Perella Wenberg Partners LLP; the Debtors' Restructuring Advisors is Alvarez & Marsal North American LLC; and the Debtors' Claims Agent is Kurtzman Carson Consultants LLC. As of January 31, 2009, the Debtors had total assets of $1,527,495,443 and total debts of $2,641,590,842. The Debtors filed with the Bankruptcy Court a pre-negotiated reorganization plan together with their petitions. The Plan provides that Masonite's existing senior secured obligations will be converted on a pro rata basis subject to the election of each existing holder of Senior Secured Obligations into: (i) a new first-priority senior secured term loan; (ii) a new second- priority senior secured PIK loan; and (iii) 97.5% of the common equity of the reorganized Masonite. Holders of Masonite's existing senior subordinated notes will be allocated 2.5% of the common equity in the reorganized Masonite plus warrants for 17.5% of the common stock of the reorganized Company, subject to dilution under certain conditions. Holders of Class 5 General Unsecured Claims under the Plan will be unimpaired and is expected to recover 100% under the Plan. Bankruptcy Creditors' Service, Inc., publishes Masonite Bankruptcy News. The newsletter tracks the CCAA proceedings in Canada and parallel chapter 11 proceedings in Delaware undertaken by company and its various affiliates. http://bankrupt.com/newsstand/or 215/945-7000) METALS USA: S&P Puts 'CCC' Senior Ratings on Negative CreditWatch ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it placed its ratings on Houston-based Metals USA Holdings Corp. and its wholly owned subsidiary, Metals USA Inc. on CreditWatch with negative implications. This includes the 'B-' corporate credit ratings and the 'CCC' ratings on the senior secured notes and senior unsecured pay-in-kind toggle notes. "The CreditWatch listing reflects our concern that because of the sharp deterioration in steel market conditions in North America over the past several months, and our expectation that operating conditions will remain challenging in the near term, Metals USA's profitability, cash flow, and credit measures will weaken materially during 2009, potentially pressuring its liquidity position," said Standard & Poor's credit analyst Maurice Austin. S&P deem the company's current liquidity to be adequate because of Metal USA's working capital management. In resolving the CreditWatch listing, S&P will evaluate Metals USA's full-year 2008 operating results and incorporate S&P's expectation for 2009 operating performance. S&P's analysis will focus on the company's liquidity profile and its ability to remain in compliance with financial covenants. The company's credit facility has a minimum fixed-charge covenant requirement of 1x that takes effect when its availability dips below $45 million. MICHAEL CONTI SR: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Michael Frank Conti, Sr. Michelle Davis Conti 8221 Stoney Creek Rd. Somerset, CA 95684 Bankruptcy Case No.: 09-24596 Chapter 11 Petition Date: March 17, 2009 Court: United States Bankruptcy Court Eastern District of California (Sacramento) Judge: Michael S. McManus Debtor's Counsel: David Foyil, Esq. 18 Bryson Dr. Sutter Creek, CA 95685 Tel: (209) 223-5363 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/caeb09-24596.pdf The petition was signed by Michael Frank Conti, Sr. and Michelle Davis Conti. MIDWAY GAMES: May Continue to Use Cash Collateral Until April 2 --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved at a hearing on March 10, 2009, the stipulation of Midway Games Inc., et al., Acquisition Holdings Subsidiary I LLC, and the Official Committee of Unsecured Creditors extending the period for the continued interim use of cash collateral to April 2, 2009, in accordance with a revised cash collateral budget. A final evidentiary hearing on the request will be held on April 1, 2009, at 10:00 a.m. EST. As reported on February 18, 2009, the Court approved Midway's request for the interim use of Cash Collateral for the period from February 12, 2009, through March 10, 2009, despite objections by holders of Midway's $150 million in aggregate principal obligations under the Senior Convertible Notes, who balked at the some of the protections Midway proposed for the secured lender who is also the controlling shareholder. As adequate protection, Acquisition Holdings will receive (i) payment of accrued and unpaid prepetition interest under the prepetition facility as well as current postpetition interest under the prepetition facility at the non-default rate of interest under a certain loan and security agreement, and (ii) payment of out-of-pocket expenses for reasonable professional fees and disbursements. A full-text copy of the revised cash collateral budget is available for free at: http://bankrupt.com/misc/MidwayGames.RevisedBudget.pdf Headquartered in Chicago, Illinois, Midway Games Inc. -- http://www.midway.com-- develops video games and sell them primarily in North America, Europe, Asia and Australia. The company and nine of its affiliates filed for Chapter 11 protection on Feb. 12, 2009 (Bankr. D. Del. Lead Case No. 09-10465). David W. Carickhoff, Jr., Esq., Michael David Debaecke, Esq., and Victoria A. Guilfoyle, Esq., at Blank Rome LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard as their investment banker, Dewey & LeBoeuf LLP as special counsel, and Epiq Bankruptcy Solutions LLC as claims agent. The Debtors' financial condition as of Sept. 30, 2008, showed $167,523,000 in total assets and $281,033,000 in total debts. MONTEREY CAPITOLA: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Monterey Capitola, LLC 206 Hollister Avenue Capitola, CA 95010 Bankruptcy Case No.: 09-51826 Chapter 11 Petition Date: March 16, 2009 Court: United States Bankruptcy Court Northern District of California (San Jose) Judge: Roger L. Efremsky Debtor's Counsel: Joan M. Chipser, Esq. Law Offices of Joan M. Chipser 1 Green Hills Court Millbrae, CA 94030 Tel: (650) 697-1564 Email: joanchipser@sbcglobal.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $50,001 to $100,000 The petition was signed by Steve Davis, managing member of the Company. The Debtor did not file a list of 20 largest unsecured creditors together with its petition. MORGAN & FINNEGAN: Files for Chapter 7 Liquidation -------------------------------------------------- JD Journal reports that Morgan & Finnegan has filed for Chapter 7 bankruptcy. Debra Cassens Weiss at ABA Journal relates that Morgan & Finnegan's bank accounts were reportedly frozen and its severance checks were bouncing. Court documents say that Morgan & Finnegan listed $6.37 million in assets and $10 million in liabilities, and the Company listed "multiple former partners" as unsecured creditors owed capital totaling $3.9 million. Morgan & Finnegan, according to ABA Journal, said that it is owed money from two former partners whose draws exceeded their capital accounts: Day Pitney partner Keith McWha and Cadwalader special counsel Tod Melgar. ABA Journal relates that Morgan & Finnegan's revenues declined by almost a half in 2008 as it lost partners to law firms like Cadwalader, Wickersham & Taft and Dickstein Shapiro. According to court documents, Morgan & Finnegan earned $36.99 million in revenue last year, compared to $60.63 million in 2007. JPMorgan Chase, Morgan & Finnegan's lender, will file a lawsuit against Morgan & Finnegan for more than $4 million, ABA Journal reports. Morgan & Finnegan, LLP was a New York Law firm. Locke Lord Bissell & Liddell hired 30 of the Morgan & Finnegan's lawyers, including 13 out of 17 remaining partners, in February 2009. MORNING STAR: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Morning Star Restaurant Group, LLC aka Amy Ruth's Restaurant 68 West 120th Street New York, NY 10027 Bankruptcy Case No.: 09-11189 Type of Business: Morning Star operates a restaurant. Chapter 11 Petition Date: March 17, 2009 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Judge: Allan L. Gropper Debtor's Counsel: Edward B. Mendy, Esq. Mendy & Beekman, PLLC 2 Penn Center, Suite 200 Philadelphia, PA 19102 Tel: (215) 854-4057 Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors together with its petition. The petition was signed by Lawrence Jordan, Managing Partner of the company. MTR GAMING: Liquidity Concerns Prompt Moody's Junk Rating --------------------------------------------------------- Moody's Investors Service lowered MTR Gaming's probability of default rating to Caa1 from B2 and corporate family rating to B3 from B2. The rating for the senior unsecured notes was affirmed at B2. Further, the rating for the 9% senior subordinated notes was lowered to Caa2 from Caa1. The rating outlook remains negative. The downgrade of the probability of default rating and corporate family rating reflect liquidity concerns due to MTR's near-term debt maturities and tight financial covenants, as well as the risk that the more challenging competitive environment pressures the company's earnings. The affirmation of the rating for the senior unsecured notes incorporates Moody's view of above- average recovery prospects in a default scenario. MTR faces significant near-term debt maturities related to the senior unsecured notes and the senior secured revolver, for a total amount exceeding $230 million. The refinancing of the senior notes at reasonable conditions might be a challenge for MTR, should the credit markets remain highly risk adverse in 2009. From a liquidity perspective, the tightening of the total leverage covenant in the course of 2009 due to several step downs represents another hurdle for the company. Additionally, MTR is expected to deal with stronger competitive pressures in 2009, related to the expansion of the Meadows "racino" and the subsequent opening of Rivers Casino, a slot parlor in Pennsylvania. The expected cost savings might not fully offset the increasing competitive pressures at the EBITDA level. Longer term, key risk factors also include the legalization of table games in Pennsylvania or the legalization of casino gambling in Ohio in case it does not involve MTR's Scioto Downs racetrack. More positively, Moody's also consider the material reduction in senior secured revolver borrowings that occurred in 2008 and the expected solid coverage for the senior unsecured notes, based on Moody's near-term EBITDA estimate. The rating outlook remains negative at this junction given the large amount of debt maturing and the risk of covenant violation. Should the company fail to refinance its senior unsecured notes in the very near term, further negative rating pressures are likely. Ratings downgraded: -- Probability of Default Rating to Caa1 from B2 -- Corporate Family Rating to B3 from B2 -- Senior Subordinated Notes to Caa2 from Caa1 (LGD assessment revised to LGD4, 70% from LGD5, 87%) Rating affirmed: -- Senior Unsecured Notes at B2 (LGD assessment revised to LGD3, 31% from LGD4, 54%) The last rating action was on August 26, 2008 when Moody's changed the rating outlook to negative from stable. MTR, through its subsidiaries, owns and operates Mountaineer Casino, Racetrack & Resort in Chester, West Virginia; Presque Isle Downs & Casino in Erie, Pennsylvania and Scioto Downs in Columbus, Ohio. MTR reported net revenues of approximately $471 million in 2008. MYSTIC TENNIS: Operations Unaffected by Chapter 11 Filing --------------------------------------------------------- Lee Howard at Theday.com reports that Sport & Wellness LLC's manager Beth Albrikes said that the Company has filed for Chapter 11 bankruptcy protection, but the club will remain open. According to Theday.com, Ms. Albrikes had denied rumors that the club might close down, saying that it has been making money for the past five years. Other tennis clubs in the Sport & Wellness group have led to financial problems, Theday.com states, citing Ms. Albrikes. While Sport & Wellness workers still get paid, the Company hasn't been able to pay for outside contractors who have done work at the club, Theday.com relates, citing Ms. Albrikeses. Ms. Albrikes said that she has yet to hear whether the club might be sold, Theday.com states. North Salem, New York-based Sport & Wellness, LLC, owns the Mystic Indoor Tennis in Old Mystic. The Company filed for Chapter 11 bankruptcy protection on February 25, 2009 (Bankr. S.D. N.Y. Case No. 09-22266). Jonathan S. Pasternak, Esq., at Rattet, Pasternak & Gordon Oliver, LLP, assists the Company in its restructuring effort. The Company listed $1,000,001 to $10,000,000 in assets and $1,000,001 to $10,000,000 in debts. NC CAPITAL FACILITIES: Fitch Cuts $12.67-Mil Revenue Bonds to 'BB' ------------------------------------------------------------------ Fitch Ratings has downgraded the long-term rating on the approximately $12.67 million of outstanding North Carolina Capital Facilities Finance Agency's educational facilities revenue refunding bonds, Brevard College Corporation, series 2007 to 'BB' from 'BBB-'. The bonds are a general obligation of Brevard College (Brevard), payable from all legally available funds. The Rating Outlook is Stable. The downgrade to 'BB' primarily reflects Brevard's weak liquidity levels, continued negative operating performance, and small size, which limits operating flexibility. Offsetting these negative credit factors include Brevard's adequate student demand, a base level of fundraising through annual giving, and moderate debt burden, with no additional debt plans in the near term. Brevard is also considering new development efforts, although the success of such fundraising is questionable at this time given the current economic environment. For fiscal 2008, available funds, defined by Fitch as unrestricted and temporarily restricted cash and investments, were $2.5 million and covered operating expenses ($19.9 million) and total debt ($14.2 million) by a very low 12.4% and 17.3%, respectively. While Brevard's endowment totaled $23.8 million as of May 31, 2008, a majority of funds were permanently restricted for student financial aid. Furthermore, the market value of Brevard's endowment declined approximately 25% from May 31, 2008 to Dec. 31, 2008, as a result of the current financial market turbulence. Brevard's operating margin has been volatile over the past several years. The operating margin was negative in both fiscal years 2007 and 2008, and was negative for three of the past five fiscal years. The operating margin was negative 7.2% for fiscal 2008, following a negative 9.8% margin for fiscal 2007. Fluctuations in enrollment have partly contributed to Brevard's operating performance as well as a decline in gifts and contributions following the previous capital campaign, which concluded in 2006. Full-time equivalent enrollment fell 1.8% and 2.1% in fall 2007 and fall 2008, respectively, although FTE enrollment has grown by 14.4% since fall 2004. While enrollment has fluctuated in recent years, Brevard's management team has taken measures to improve its enrollment management. Among other strategies, it hired an enrollment consultant to help improve the admissions process and grow enrollment. This is evident in the 29.7% increase in applications received for fall 2008. In addition, the number of applications received for fall 2009 is currently 7.7% higher than for fall 2008. Brevard's debt burden remains manageable with maximum annual debt service of approximately $1 million representing a moderate 5.5% of fiscal 2008 unrestricted operating revenues. Brevard's debt burden has gradually improved from 6.7% in fiscal 2004. Brevard's near-term capital improvement plan calls for various renovations and minor capital projects, all of which are expected to be funded through fundraising. Brevard College is a four-year private college located on 120 acres in Brevard, North Carolina (140 miles west of Charlotte). It was founded in 1934 and is affiliated with the Western North Carolina Conference of the United Methodist Church. Fall 2008 full-time equivalent enrollment was 644, down slightly from 658 students in fall 2007. NEXSTAR GROUP: Reports Full Year 2008 Net Loss of $78.1 Million --------------------------------------------------------------- Nexstar Broadcasting Group, Inc. reported its financial results for the fourth quarter and year ended December 31, 2008. The Company's net revenue for the quarter ended December 31, 2008, rose 12.3% to $80.3 million from $71.6 million in the fourth quarter of 2007. Nexstar's fourth quarter 2008 net loss was roughly $21.3 million. During the 2008 fourth quarter, Nexstar incurred a non-cash impairment charge of $33.9 million. For the 2008 full year, net revenue was $284.9 million, an $18.1 million increase over $266.8 million for 2007. Reflecting a total of approximately $89.6 million of non-cash contract termination fees and non-cash impairment charges, Nexstar's full year 2008 net loss was approximately $78.1 million. Perry A. Sook, Chairman, President and Chief Executive Officer of Nexstar Broadcasting Group, Inc., commented, "Nexstar's double digit fourth quarter net revenue growth highlights strong year- over-year increases in political, retransmission consent and e- MEDIA revenues which helped to offset the impact of the current economy and soft general advertising environment. Fourth quarter net revenue of $80.3 million included approximately $16.6 million of net political advertising revenue and full year 2008 net political advertising revenue reached $28.0 million, in line with our expectations. In 2008, e-MEDIA revenue increased 100% over 2007 levels while full year retransmission consent revenue rose 27% to $21.8 million. "On February 19, Nexstar announced renewed and new multi-year retransmission consent agreements which will contribute more than $75 million in revenues to the Company over the lives of these agreements. Approximately one third of this revenue is expected to be realized in 2009". According to Mr. Sook, the Company is projecting another year of significant e-MEDIA revenue growth based on the full year benefits of approximately fifteen revenue generating applications that the Company is now offering across all markets in its platform. The Company will also launch Nexstar's community portal e-MEDIA offerings in any new markets that it enters. Nexstar's pending and de-leveraging acquisitions of WCWJ-TV in Jacksonville, Florida and KARZ-TV in Little Rock, Arkansas, will also contribute to offsetting the impact of lower political revenues and ongoing industry softness in 2009, according to Mr. Sook. In light of the current economic conditions and the absence of significant political revenues this year, Nexstar is taking steps to reduce expenses on all fronts at both the station and corporate levels. Moreover, Mr. Sook stressed that the Fourth quarter and full year 2008 cap ex spending was approximately $12.7 million and $30.8 million, respectively, with approximately $9.7 million and $23.3 million of these respective amounts allocated to digital conversions. The Company will incur approximately $5.4 million of capital expenditures in early 2009 to complete the remaining stations' digital television requirements." Outstanding Debt The Company's total net debt at December 31, 2008, was $646.3 million, compared to $665.0 million at December 31, 2007. The total net debt consists of $356.2 million of bank debt, $190.8 million of senior subordinated 7% notes, $37.3 million of senior subordinated 12% PIK notes and $77.8 million of 11.375% senior discount notes, less cash on hand of $15.8 million. During the fourth quarter, the Company repurchased approximately $7.5 million of the 7% senior subordinated notes, resulting in a $2.9 million pre-tax gain. The purchase of these notes was funded with cash flows from operations. Consolidated total net debt was $609.7 million at December 31, 2008. The Company's total leverage ratio at December 31, 2008 was 6.18x compared to a permitted leverage covenant of 6.50x. Total interest expense in the fourth quarter of 2008 was $12.4 million, compared to $13.8 million for the same period in 2007. Cash interest expense for the fourth quarter of 2008 was $10.7 million, compared to $10.0 million for the same period in 2007. Debt Exchange On February 27, 2009, Nexstar Broadcasting, Inc., an indirect subsidiary of Nexstar Broadcasting Group, commenced an offer to exchange up to $143.6 million aggregate principal amount of its outstanding $191.51 million in aggregate principal amount of 7% Senior Subordinated Notes due 2014 in exchange for: (i) up to $142.3 million in aggregate principal amount of Nexstar Broadcasting's 7% Senior Subordinated PIK Notes due 2014, to be guaranteed by each of the existing guarantors to the Old Notes, and (ii) cash. The exchange offer is being conducted upon the terms and subject to the conditions set forth in the Offering Memorandum dated February 27, 2009, as supplemented, and the related letter of transmittal. The exchange offer is subject to certain conditions, including the minimum tender condition, that Nexstar Broadcasting receive valid tenders, not validly withdrawn, of at least $114.9 million of the aggregate principal amount of Old Notes. Documents relating to the exchange offer will only be distributed to holders of Old Notes who complete and return a letter of eligibility confirming that they are within the category of eligible investors for this private offer. Pending Acquisition On January 28, 2009, Nexstar Broadcasting Group entered into a definitive agreement to acquire the assets of WCWJ-TV, the CW affiliate serving the Jacksonville, Florida market, from Media General, Inc. This acquisition marks Nexstar's entr�e into the State of Florida and will represent the 52nd television station that the Company owns or for which it provides sales, programming or other services. Additionally, the Company's acquisition of KARZ-TV (formerly KWBF-TV) in Little Rock, Arkansas, which was announced on October 7, 2008, was approved on February 26 by the bankruptcy court and closing will occur before the end of March. Guidance Given the uncertain economic environment, the Company has elected to discontinue the practice of providing quarterly guidance for net revenue, station operating expenses and corporate overhead. Upon the completion of announced transactions, Nexstar Broadcasting Group will own, operate, program or provide sales and other services to 52 television stations in 30 markets in the states of Illinois, Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania, Louisiana, Arkansas, Alabama, New York and Florida. Nexstar's television station group includes affiliates of NBC, CBS, ABC, FOX, MyNetworkTV and The CW and pro-forma for the completion of all announced transactions, reaches approximately 10 million U.S. television households or approximately 8.8% of all U.S. television households. * * * As reported by the Troubled Company Reporter on December 3, 2008, pursuant to the company's Form 10-Q, as of September 30, 2008, Nexstar's balance sheet shows $665.2 million in total assets, $809.5 million in total liabilities, resulting in $144.3 million in stockholders' deficit. As disclosed in the Troubled Company Reporter on July 4, 2008, Standard & Poor's Ratings Services lowered its corporate credit rating on Nexstar Broadcasting Group Inc. to 'B-' from 'B' and removed the ratings from CreditWatch, where they were placed with negative implications on April 11, 2008. At the same time, S&P lowered the ratings on the company's senior secured credit facilities to 'B+' from 'BB-', and the rating on its unsecured debt to 'CCC' from 'CCC+'. The outlook is stable. NOBLE INT'L: Obtains $4MM in Funds from Comerica, Customers ----------------------------------------------------------- Noble International, Ltd., amended its forbearance agreements with respect to its credit facility with Comerica Bank and another forbearance agreement with respect to its Mexican units. On February 24, 2009, Noble International entered into a forbearance agreement with Comerica, as agent for itself and other lenders under the Company's U.S. and Canadian credit facility. Under the Forbearance Agreement, the Lenders agreed to refrain from exercising remedies under the Credit Facility until March 23, 2009, subject to earlier termination. One event of termination under the Forbearance Agreement is a default under the Revolving and Term Credit Agreement dated as of July 31, 2006 among the Company's Mexican subsidiary, Pullman de Queretaro, S.A. de C.V. as borrower, the Company and the Company's Mexican subsidiaries, Pullman de Mexico, S.A. de C.V. and Pullman de Puebla, S.A. de C.V., as guarantors, and Comerica as lender. Under the Mexican Credit Agreement, Pullman de Queretaro was obligated to repay outstanding principal of roughly $9.2 million on March 2, 2009. Concurrently with the execution of the Forbearance Agreement, Comerica Bank agreed that if a partial payment of the outstanding principal owed under the Mexican Credit Agreement was repaid on or before March 2, 2009, it would forbear through the Expiration Date from exercising remedies it had under the Mexican Credit Agreement. On March 6, 2009, the parties to the Mexican Credit Agreement entered into a forbearance agreement. As consideration for the Mexican Forbearance Agreement, Pullman de Queretaro made a principal payment of $1.5 million to Comerica Bank. Pursuant to the Mexican Forbearance Agreement, interest on amounts owed under the Mexican Credit Agreement will now accrue at the interest rates set forth in the Mexican Credit Agreement plus an additional 2% per annum. Other terms of the Mexican Forbearance Agreement are substantially similar to those of the Forbearance Agreement. The Mexican Forbearance Agreement, like the Forbearance Agreement, expires on March 23, 2009. Concurrently with the signing of the Comerica Forbearance Agreement, the Company entered into a 30-day, binding memorandum of understanding dated February 23, 2009, with General Motors Corporation, Ford Motor Company, Chrysler, LLC and Comerica, as agent for itself and the other lenders. In the MOU, the Customers agreed to expedited payment of amounts owed to the Company and other accommodations of financial benefit to the Company. The Customers also agreed to provide a limited amount of short-term financing through the purchase of subordinated participations in the Credit Facility. The Company requested short-term funding through March 23, 2009, from the Customers in addition to that agreed to by the Customers in the MOU. The Company also requested short-term funding from Comerica. The Company indicated that given its cash and credit position, it is unlikely that the Company will be able to maintain operations to March 23, 2009, absent funding. On March 17, 2009, the Customers provided $2 million to the Company pursuant to the terms of the MOU in exchange for the purchase of subordinated participations in the Credit Facility. On March 18, 2009, the Company entered into first amendments to the Comerica Bank Forbearance Agreement and the Mexican Forbearance Agreement. Pursuant to the terms of the Forbearance Agreement Amendment, Comerica agreed to provide $2 million to the Company on March 19, 2009, under the terms of the Credit Facility. Under the amendments the Lenders also agreed to maintain the Forbearance Agreement and the Mexican Forbearance Agreement through March 23, 2009. Early termination of the forbearance agreements may occur if there are new defaults under the Credit Facility or Mexican Loan Agreement or defaults under the forbearance agreements and the amendments thereto, if there is further deterioration in the financial condition of the Company or further deterioration in the Lenders' collateral position, or if the Lenders believe that the prospect of payment or performance is impaired. The Company believes that the funding from the Customers and Comerica will provide the Company with credit sufficient to meet its ongoing and routine obligations to March 23, 2009, but this is not assured. The Company remains in discussions with Comerica and the Customers to identify funding solutions for its liquidity needs beyond March 23, 2009. The Company is also continuing to analyze and consider strategic alternatives. Noble Defaults Under $32.5MM 4% Notes, $50MM ArcelorMittal Sub Note, & $12.5MM GECC Promissory Note In October 2006, Noble International issued $32.5 million of 4% convertible notes that are now held by affiliates of Whitebox Advisors, LLC. The Notes mature in October 2011. The Company's obligations under the Notes are set forth in several Amended and Restated Convertible Subordinated Notes dated October 11, 2006. On March 1, 2009, the Company did not make an interest payment on the Notes required to be made on that date. On March 10, 2009, the Company received a notice from Whitebox declaring a default on the Notes and purporting to require that the Company redeem the Notes. Pursuant to the terms of the Notes, the redemption price to be paid to Whitebox by the Company as of March 10, 2009, was $40 million. Whitebox is prevented from taking action to collect on, or otherwise enforce its rights under, the Notes, however, until amounts owed under the Mexican Credit Agreement are paid or waived by Comerica, or 270 days after Comerica is notified of the default on the Notes, whichever is earlier. The default under the Notes is an event of default under the Convertible Subordinated Note issued by the Company to ArcelorMittal, S.A. on March 20, 2008 in the principal amount of $50 million and a promissory note issued by certain of the Company's subsidiaries to General Electric Capital Corporation on September 19, 2008 in the principal amount of $12.5 million, which is guaranteed by the Company. The default under the Notes gives the Lenders the right to terminate the Comerica Forbearance Agreement. In response to the default under the Notes and pursuant to the Forbearance Agreement, the Lenders have off-set a significant portion of the Company's cash on hand to satisfy the Company's obligations to the Lenders. Further, the Lenders notified the Company that no additional borrowings are available to the Company under the Credit Facility. About Noble International Based in Troy, Michigan, Noble International, Ltd., provides of 21st Century Auto Body Solutions primarily to the automotive industry. Noble utilizes laser-welding, roll-forming and other technologies to produce flat, tubular, shaped and enclosed formed structures used by original equipment manufacturers (OEMs) or their suppliers in automobile applications, including doors, fenders, body side panels, pillars, bumpers, door beams, load floors, windshield headers, door tracks, door frames and glass channels. The Company operates 24 production facilities worldwide, including two joint ventures in China and one in India. Thirteen of its facilities are located in North America and the remaining 11 facilities are located primarily in Western Europe. In August 2007, Noble completed the purchase of Arcelor's Tailored Laser-Welded Blank operation. NORTEL NETWORKS: Court Moves Schedules Filing Deadline to May 29 ---------------------------------------------------------------- Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware extends the time by which Nortel Networks Inc., Nortel Networks Capital Corporation, Alteon WebSystems Inc., and Nortel Networks International Inc. must file their schedules of assets and liabilities, through and including May 29, 2009. The Court also extends the time by which 11 other Debtors -- Xros Inc., Sonoma Systems, Qtera Corporation, CoreTek Inc., Nortel Networks Application Management Solutions Inc., Nortel Networks Optical Components Inc., Nortel Networks HPOCS Inc., Architel Systems (U.S.) Corporation, Northern Telecom International Inc., Nortel Networks Cable Solutions Inc., and Alteon WebSystems International Inc. -- must file their Schedules, through and including April 20, 2009. The Court also gives all the Debtors until April 20, 2009, to file their statements of financial affairs. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. Nortel Networks Corp., Nortel Networks Inc. and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORKS: Sec. 341 Creditors Meeting Adjourned to April 22 ----------------------------------------------------------------- The meeting of creditors required under Section 341(a) of the Bankruptcy Code in bankruptcy cases of Nortel Networks Inc. and its debtor affiliates has been postponed to April 22, 2009. The meeting was originally scheduled for February 19, 2009. The Section 341 meeting offers the creditors a one-time opportunity to examine the Debtors' representative under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. Meanwhile, Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware has issued an order recognizing the cases of the Canadian-based Nortel companies as foreign main proceedings. The Nortel companies are Nortel Networks Corporation, Nortel Networks Limited, Nortel Networks Technology Corporation, Nortel Networks International Corporation and Nortel Networks Global Corporation. They filed on January 14, 2009, insolvency proceedings under the Companies' Creditors Arrangement Act before the Ontario Superior Court of Justice and petitions under chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court. The Nortel companies' Chapter 15 petitions met the requirements of and were properly commenced pursuant to the U.S. bankruptcy laws, Judge Gross held. Judge Gross thus ruled that all provisions of Section 1520 of the Bankruptcy Code apply in Nortel companies' Chapter 15 cases, including the automatic stay provision, throughout the duration of their cases. "The relief granted hereby is necessary and appropriate, in the interests of the public and international comity, consistent with the public policy of the United States, warranted pursuant to Section 1521 of the Bankruptcy Code, and will not cause any hardship to any party in interest that is not outweighed by the benefits of granting that relief," Judge Gross said. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. Nortel Networks Corp., Nortel Networks Inc. and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORKS: Seeks Permission to Hire Huron as Consultant ------------------------------------------------------------- Nortel Networks Inc. and its affiliates seek permission from Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware to employ Huron Consulting Group as their accounting and restructuring consultant, nunc pro tunc to February 2, 2009. The Debtors relate that they chose Huron to be their consultant because of the firm's extensive experience and excellent reputation in providing turnaround and restructuring services in complex chapter 11 cases. As the Debtors' accounting and restructuring consultant, Huron will be tasked to: (1) assist the Debtors in implementing critical task plans that would facilitate the restructuring process by addressing court and other reporting requirements; (2) assist management, as requested, in addressing requests for information from various parties about the restructuring; (3) assist management, as requested, with financial reporting matters in preparation for and resulting from a restructuring, including assistance with the evaluation of generally accepted accounting principles; (4) review financial and other information to assist the Debtors in matters related to their restructuring, including evaluation of potential avoidance actions; and (5) assist the Debtors in reviewing, updating or modifying their business plan and in formulating a plan of reorganization. Huron will be paid for its services based on these hourly rates: Managing Directors $650 - $730 Directors $525 - $620 Managers $400 - $475 Associates $325 - $345 Analysis $230 - $245 On-Demand Consultants $140 - $300 The Firm will also be reimbursed for expenses it incurred or will incur in connection with its employment with the Debtors. "As an accommodation to the Debtors, Huron has agreed to permanently reduce [for] each month the total of monthly fees invoiced by 10 percent," according to Thomas Driscoll III, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, Delaware. James Lukenda, managing director at Huron, assures the Court that his firm does not hold interest materially adverse to that of the Debtors, their creditors and shareholders. He says that the firm is a "disinterested person" under Section 101(14) of the Bankruptcy Code. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. Nortel Networks Corp., Nortel Networks Inc. and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORKS: Seeks to Tap Mercer as Compensation Specialist --------------------------------------------------------------- Nortel Networks Inc. seeks permission from Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware to hire Mercer (US) Inc., as their compensation specialist, nunc pro tunc to January 14, 2009. The Debtors relate that they selected Mercer to be teas compensation specialist because the firm is already familiar with their operations. Mercer currently provides plan administration services, and general human resources and employee benefits consulting to the Debtors and their affiliates. Mercer is currently under the Debtors' employ as an ordinary course professional. As a compensation specialist, Mercer will assist the Debtors in developing a Key Employee Incentive Plan. Specifically, the firm will be tasked to: (1) analyze and review the Debtors' executive pay issues; (2) analyze, review and assist in unwinding the Debtors' long- term incentive plans; (3) analyze and review the Debtors' compensation and benefit plans; (4) advise the Debtors about issues on salary and benefits, and the design, management and administration of the incentive plan; (5) provide expert witness testimony regarding its analysis, assessments and recommendation upon request of the Debtors; and (6) provide a summary report of its work, stating its findings, conclusions and recommendations upon the Debtors' request. The Debtors propose to pay for Mercer's services based on these hourly rates: Analysts $225 Junior Associate $250 - $300 Senior Associate $350 - $450 Principal $667 Specialist Principal $725 - $870 The firm will also be reimbursed for reasonable and actual expenses it incurs and will be indemnified for damages or losses in connection with its employment. John Dempsey, a principal at Mercer, assures the Court that his firm does not hold interest materially adverse to the Debtors, their creditors and shareholders. He maintains that Mercer is a "disinterested person" under Section 101(14) of the Bankruptcy Code. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. Nortel Networks Corp., Nortel Networks Inc. and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORKS: Committee Wants Richards Layton as Counsel ----------------------------------------------------------- The Official Committee of Unsecured Creditors in the bankruptcy cases of Nortel Networks Inc. seeks permission from Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware to retain Richards Layton & Finger P.A., as its counsel, nunc pro tunc to January 26, 2009. The Creditors Committee selected Richards Layton as its counsel because of the firm's extensive experience and knowledge in the field of business reorganizations and liquidations under Chapter 11 of the Bankruptcy Code, according to Terry Zale, vice president for Corporate Finance of Committee Chair Flextronics Corporation. As counsel to the Creditors Committee, Richards Layton is expected to: (1) advise the Creditors Committee of its rights, powers and duties in the Debtors' cases; (2) assist and advise the Creditors Committee in its consultation with the Debtors relative to the administration of the cases; (3) assist the Creditors Committee in analyzing the claims of the Debtors' creditors and in negotiating with those creditors; (4) assist the Creditors Committee in investigating the Debtors' acts, conduct, assets, liabilities, financial condition and business operations; (5) assist the Creditors Committee in its analysis of and negotiations with the Debtors or their creditors concerning matters related to the terms of the plan of reorganization or liquidation for the Debtors, among other things; (6) prepare on behalf of the Creditors Committee all legal papers in furtherance of the panel's interests and objectives; and (7) perform other legal services when necessary. Richard Layton professionals who will be designated to represent the Creditors Committee and their hourly rates are: Mark Collins $610 Christopher Samis $275 Drew Sloan $255 Barbara Witters $185 The firm will also be reimbursed of actual and necessary expenses it incurred or will incur in connection with its representation of the Committee. Mr. Collins, Esq., a director at Richards Layton, assures the Court that his firm does not hold any interest adverse to the Creditors Committee and the Debtors' estates. He asserts that Richards Layton is a "disinterested person" under Section 101(14) of the Bankruptcy Code. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. Nortel Networks Corp., Nortel Networks Inc. and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORKS: In Talks to Sell Assets to Rivals -------------------------------------------------- Nortel Networks Corp. is in talks to sell assets to rivals, Serena Saitto and Hugo Miller of Bloomberg report, citing people close to the situation. James Kelleher, an analyst at Argus Research Corp. in New York, as cited by Bloomberg said, "It's probably a better outcome that the assets be sold rather than the company struggle through bankruptcy only to walk into a reaper of a competitive market. Even if it came out of bankruptcy proceedings, it would face a declining value for those businesses." The report relates that Mr. Kelleher who has a "hold" rating on Nortel said, that Nortel's business may struggle in the future because of the company's dependence on demand from North America, a telecommunications market "that's going to be in trouble for years to come" as companies put off capital spending during the recession. Siemens Enterprise Communications Ltd. is examining an offer for Nortel's unit that builds communication networks for companies, said one of the people, who declined to be identified as the talks aren't public. Nokia Siemens Networks is looking at a unit that makes wireless voice gear, another person said, the report added. According to Bloomberg, Nokia Siemens may be seeking the wireless business, which lists Verizon Wireless and Sprint Nextel Corp. among its customers, to expand in North America, according to Todd Coupland, an analyst at CIBC World Markets in Toronto. While the division generated sales of $4.31 billion last year, it's probably worth about $1.4 billion because its products use older technology that customers are replacing, he said and added, "It's a declining business. Next generation wireless is where the growth will be." About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. Nortel Networks Corp., Nortel Networks Inc. and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NY WATERWAY: May Have to File for Bankruptcy Protection ------------------------------------------------------- NY Waterway CEO Arthur Imperatore said that the Company may have to file for bankruptcy this year unless the Port Authority or NJTransit buys the company. Lore Croghan at Nydailynews.com relates that NY Waterway is preparing to sue US Airways to recover expenses from rescue efforts after the January 2009 splash landing of Flight 1549 in the Hudson River. Nydailynews.com quoted Mr. Imperatore as saying, "The question is whether we can survive." According to Nydailynews.com, revenue at NY Waterway has been dropping since last year. Ridership, says the report, declined by 12% in February 2009 from February 2008. NY Waterway transports riders to Manhattan from Hoboken, Weehawken and other New Jersey ports. It operates the ferry boats that use the World Financial Center terminal. OWENS CORNING: Delaware Unit's 4th Quarter 2008 Summary Report -------------------------------------------------------------- Owens Corning Delaware submitted to the Office of the U.S. Trustee a post-confirmation summary report for the quarter ended December 31, 2008. Owens Corning Delaware Case No. 00-3837 Post-Confirmation Report Cash, beginning of period $70,309,000 Total receipts received by Debtor: Cash sales 0 Accounts receivable 1,248,503,000 Proceeds from litigation 0 Sale of Debtor's assets 0 Capital infusion under Plan 0 --------------- Total cash received 1,248,503,000 --------------- Total cash available 1,318,813,000 Less disbursement made by Debtor: Disbursements made under Plan 614,000 Disbursement made for administrative claims 1,568,000 Other disbursements 1,300,814,000 --------------- Total disbursements 1,302,997,000 --------------- Cash, at end of period $15,815,000 =============== The Chapter 11 cases of the other Owens Corning affiliates have been closed, Case Nos. 00-3838 through 00-3854. About Owens Corning Headquartered in Toledo, Ohio, Owens Corning fka Owens Corning (Reorganized) Inc. (NYSE: OC) -- http://www.owenscorning.com/-- is a producer of residential and commercial building materials and glass fiber reinforcements, and other similar materials for composite systems. The company has operations in 26 countries. The company filed for chapter 11 protection on Oct. 5, 2000 (Bankr. D. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represented the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Official Committee of Asbestos Creditors. James J. McMonagle served as the Legal Representative for Future Claimants until June 20, 2007. Mr. McMonagle was replaced by Michael J. Crames. Mr. Crames served as Mr. McMonagle's counsel until July 2005, when he retired from the law firm Kaye Scholer LLP. On Sept. 28, 2006, the Honorable John P. Fullam, Sr., of the U.S. District Court for the Eastern District of Pennsylvania affirmed the order of Honorable Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware confirming Owens Corning's Sixth Amended Plan of Reorganization. The Plan took effect on Oct. 31, 2006, marking the company's emergence from Chapter 11. Reorganized Owens sought on July 25, 2008, from the Delaware Bankruptcy Court a final decree closing the Chapter 11 cases of 17 of its affiliates. Only the Chapter 11 case of Owens Corning Sales, LLC, formerly known as Owens Corning, under Case No. 00-03837 will remain open. (Owens Corning Bankruptcy News, Issue No. 181; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) OWENS CORNING: Directors, Harbinger Disclose Equity Stake --------------------------------------------------------- In separate Form 4 filings with the Securities and Exchange Commission, more than 10 directors and officers of Reorganized Owens Corning disclosed that they acquired shares of Owens common stock from the period from February 23, 2009, through March 16, 2009: Date of No. of Shares No. of Shares Officer Acquisition Acquired Currently Owned ------- ----------- ------------- --------------- Michael H. Thaman 03/13/09 25,000 600,087 Stephen K. Krull 03/16/09 2,650 96,218 Norman P. Blake Jr. 02/23/09 6,709 40,270 Norman P. Blake Jr. 03/11/09 15,000 55,270 James J. McMonagle 02/23/09 4,725 39,723 Hilliard Landon 02/23/09 7,911 26,247 Ralph F. Hake 02/23/09 4,166 19,428 Ralph F Hake 02/27/09 2,000 21,428 Joseph F. Neely 02/23/09 3,965 19,755 Philip Handy 02/23/09 3,605 19,196 Mark W. Mayer 03/09/09 5,000 17,270 Ann Iverson 02/23/09 3,845 16,861 Ann W. Reynolds 02/23/09 3,925 16,003 Gaston Caperton 02/23/09 3,805 15,843 Daniel Tseung 02/23/09 3,725 15,588 Howard W. Morris 02/23/09 3,725 15,588 William W. Colville 02/23/09 3,485 15,229 Robert B. Smith Jr. 02/23/09 3,485 15,229 Certain of the Owens common stock the Executives got were the deferred share portion of their quarterly retainer or fees. Stephen Krull also reported that he acquired another 1,950 shares of Owens Corning common stock, of which is a portion of the 3,821 Owens Corning shares he is deemed to indirectly own by virtue of the company's 401(k) program. In her SEC form 4 filing, Ann Iverson disclosed that she indirectly owns 400 shares of Owens common stock by virtue of her spouse' trust. In a separate filing dated March 9, 2009, Morris W. Howard disclosed that he indirectly acquired 20,000 shares of Owens Common stock by The Prairie & Tireman Group, LLC. Mr. Howard disclaims beneficial ownership of these securities except to the extent of his pecuniary interest, and his report will not be deemed an admission that he is the beneficial owner for purposes of Section 16 or for any other purpose. In a Schedule 13G/A filing with the U.S. Securities and Exchange Commission dated March 4, 2009, Harbinger Capital Partners Master Fund I, Ltd., disclosed the shares of Owens Corning Common Stock it and its affiliates beneficially own: Owens Stock Beneficially Equity Stake Entity Owned in Owens ------ ------------ ------------ Harbinger Capital Partners Master Fund I, Ltd. 8,398,982 6.2% Harbinger Capital Partners Offshore Manager, L.L.C. 0 0.0% Harbinger Capital Partners LLC 8,398,982 6.2% HMC Investors, LLC 0 0.0% Harbinger Capital Partners Special Situations Fund, L.P. 3,689,741 2.9% Harbinger Capital Partners Special Situations GP, LLC 3,689,741 2.9% HMC - New York, Inc. 0 0.0% Harbert Management Corporation 0 0.0% Harbinger Holdings, LLC 12,088,723 8.8% Philip Falcone 12,088,723 8.8% Raymund J. Harbert 0 0.0% Michael D. Luce 0 0.0% Harbinger Capital Partners Offshore Manager is the investment manager of the Master Fund. HMC Investors is the Master Fund's managing member and Philip Falcone is a member of HMC Investors and the portfolio manager of the Master Fund. Raymond J. Harbert and Michael D. Luce are members of HMC Investors. Harbinger Capital Partners Special Situations is the general partner of the Special Situations Fund. HMCNY is the managing member of HCPSS. Harbert Management Corp. wholly owns HMC New York. Philip Falcone is the portfolio manager of the Special Situations Fund and is a shareholder of HMC. Raymond J. Harbert and Michael D. Luce are shareholders of HMC. About Owens Corning Headquartered in Toledo, Ohio, Owens Corning fka Owens Corning (Reorganized) Inc. (NYSE: OC) -- http://www.owenscorning.com/-- is a producer of residential and commercial building materials and glass fiber reinforcements, and other similar materials for composite systems. The company has operations in 26 countries. The company filed for chapter 11 protection on Oct. 5, 2000 (Bankr. D. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represented the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Official Committee of Asbestos Creditors. James J. McMonagle served as the Legal Representative for Future Claimants until June 20, 2007. Mr. McMonagle was replaced by Michael J. Crames. Mr. Crames served as Mr. McMonagle's counsel until July 2005, when he retired from the law firm Kaye Scholer LLP. On Sept. 28, 2006, the Honorable John P. Fullam, Sr., of the U.S. District Court for the Eastern District of Pennsylvania affirmed the order of Honorable Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware confirming Owens Corning's Sixth Amended Plan of Reorganization. The Plan took effect on Oct. 31, 2006, marking the company's emergence from Chapter 11. Reorganized Owens sought on July 25, 2008, from the Delaware Bankruptcy Court a final decree closing the Chapter 11 cases of 17 of its affiliates. Only the Chapter 11 case of Owens Corning Sales, LLC, formerly known as Owens Corning, under Case No. 00-03837 will remain open. (Owens Corning Bankruptcy News, Issue No. 181; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) PACIFIC PARTNERS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Pacific Partners Ltd. PO Box 3540 Silver Springs, NV 89429-3540 Bankruptcy Case No.: 09-14317 Type of Business: The company is a real estate debtor. Chapter 11 Petition Date: March 17, 2009 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Howard R. Tallman Debtor's Counsel: Philipp C. Theune, Esq. 1763 Franklin St. Denver, CO 80218-1124 Tel: (303) 832-1150 Fax: (303) 845-6934 Email: philipp@theunelaw.com Total Assets: $2,001,200 Total Debts: $1,578,038 The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ BC Design Studios Trade Debt $115,000 PMA Design Trade Debt 33,000 The petition was signed by Michael Horner, General Manager of the company. PEACH HOLDINGS: S&P Puts 'B' Counterparty Rating on WatchNeg. ------------------------------------------------------------- Standard & Poor's Ratings Services said that it placed its ratings on Peach Holdings Inc., including its counterparty credit rating of 'B', on CreditWatch with negative implications. "The action reflects our concerns regarding Peach Holdings' liquidity and financial flexibility. The firm's management is actively working on renewing or replacing existing credit facilities that are coming due. Failure to secure either the renewal or replacement of these facilities could, in our view, have significant implications for Peach Holdings' ability to generate new business," said Standard & Poor's credit analyst Lisa Wang. The recent market turmoil has elevated funding risks for the company as lenders have pulled back on lending in order to preserve liquidity and reduce their own risks. In addition, the credit risk involved with the company's assets (mostly insurance company obligations), has increased, just as the insurance sector's credit risk profile has become more elevated. S&P also believe that there's a possibility that management may buy back up to $335 million in senior secured term loan debt, which would use up much of Peach Holdings' available cash. "We will continue to monitor the renewal or replacement of Peach Holdings' credit facilities, asset credit risks, and any developments on the debt buyback, then resolve the CreditWatch action accordingly," Ms. Wang added. PILGRIM'S PRIDE: Growers & Cities Oppose Shutdown of 3 Plants ------------------------------------------------------------- Chicken growers and local governments want the U.S. Bankruptcy Court for the Northern District of Texas (Fort Worth) to stop from shutting down three of its 32 plants. According to Bloomberg's Bill Rochelle, the growers and the localities insist that the Debtor should sell the plants instead, citing that shutting the plants will devastate local economies and cause bankruptcies among farmers. Pilgrim's Pride previously said that selling the three plants wouldn't remove production from the market and thus wouldn't help solve the company's financial problems. Pilgrim's Pride previously filed motions with the Bankruptcy Court to shut the plants and end contracts with the affected growers, Mr. Rochelle reported. Judge D. Michael Lynn, the report relates, ruled last month that once the company shows a sound business reason for ending the contracts, the growers may present evidence proving there are alternatives giving Pilgrim's Pride equal economic relief. The judge said, according to the same report, the growers could show the Company used irrational criteria such as racial discrimination to underpin decisions about whose contracts to end. The next hearing is scheduled for March 24. About Pilgrim's Pride Corp. Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. In addition, the company owns 34 processing plants in the United States and 3 processing plants n Mexico. The processing plants are supported by 42 hatcheries, 31 feed mills and 12 rendering plants in the United States and 7 hatcheries, 4 feed mills and 2 rendering plants in Mexico. Moreover, the company owns 12 prepared food production facilities in the United States. The company employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico, and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. Pilgrim's Pride Corp. and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No. 08-45664). The Debtors' operations in Mexico and certain operations in the United States were not included in the filing and continue to operate as usual outside of the Chapter 11 process. Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. The Debtors have also tapped Baker & McKenzie LLP as special counsel. Lazard Freres & Co., LLC is the company's investment bankers and William K. Snyder of CRG Partners Group LLC as chief restructuring officer. The company's claims and noticing agent is Kurtzman Carson Consulting LLC. A nine-member committee of unsecured creditors has been appointed in the case. As of December 27, 2008, the Company had $3,215,103,000 in total assets, $612,682,000 in total current liabilities, $225,991,000 in total long-term debt and other liabilities, and $2,253,391,000 in liabilities subject to compromise. Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride Bankruptcy News. The newsletter tracks the chapter 11 proceeding of Pilgrim's Pride Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PLAZA DE RETIRO: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Plaza De Retiro, Inc. aka PDR 414 Camino de la Placita Taos, NM 87571 Bankruptcy Case No.: 09-10974 Type of Business: Plaza De Retiro, Inc., provides health care services. Chapter 11 Petition Date: March 11, 2009 Court: United States Bankruptcy Court New Mexico (Albuquerque) Judge: James S. Starzynski Debtor's Counsel: William F. Davis, Esq. 6709 Academy NE, Suite A Albuquerque, NM 87109 Tel: 505-243-6129 Fax : 505-247-3185 Email: daviswf@nmbankruptcy.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/nmb09-10974.pdf The petition was signed by John William Himes, president of the company. POLARIOD CORP: Ex-CEO Wants $7.2 Million Slice From Sale Proceeds ----------------------------------------------------------------- Michael O'Shaughnessy, the former chief executive officer of Polaroid Corp., asked a judge to block the bankrupt pioneer of instant photography from selling itself as planned unless it agrees to pay him $7.2 million. Erik Larson of Bloomberg relates that Mr. O'Shaughnessy resigned in 2007 to work at Polaroid's parent company, Petters Group Worldwide LLC, which is allegedly at the center of a $3 billion Ponzi scheme. The ex-CEO says Polaroid agreed to compensate him if the photography firm were ever liquidated, according to an objection filed March 13 in U.S. Bankruptcy Court in Minneapolis. Polaroid filed for bankruptcy in December after Petters Group's founder, Thomas Petters, was accused of operating a $3 billion Ponzi scheme, in which old investors were paid with money from new ones. Mr. O'Shaughnessy has worked with Mr. Petters since 2003 and helped him found Petters Group's consumer brands division, according to Polaroid's Web site. The report added that Petters Group bought Polaroid in 2005 for $426 million. According to the report, Polaroid agreed in January to sell its assets to private equity firm Genii Capital SA for $42 million, a deal subject to competing bids at a March 30 auction. Mr. O'Shaughnessy wants the sale blocked unless the accord includes his so-called earn out payment. Bloomberg added that Mr. O'Shaughnessy says the earn out payment may have been triggered last year, when the Company allegedly signed over some assets to hedge fund firm Ritchie Capital Management LLC before the Petters Group scandal broke, according to the objection. Polaroid and Ritchie sued each other in bankruptcy court over the alleged transaction. About Polaroid Corporation Polaroid Corporation -- http://www.polaroid.com-- makes and sells films, cameras, and other imaging products. The company and 20 of its affiliates first filed for bankruptcy protection on October 12, 2001 (Bankr. D. Del. Lead Case No. 01-10864). Skadden, Arps, Slate, Meagher & Flom LLP represented the Debtors in their previous restructuring efforts. At that time, the company blamed steep decline in its revenue and the resulting impact on its liquidity. On June 28, 2002, the U.S. Bankruptcy Court for the District of Dealware approved the purchase of substantially all of Polaroid's business by One Equity Partners. The bid provides for cash consideration of $255 million plus a 35% interest in the new company for unsecured creditors. Polaroid Corp., together with 11 affiliates, filed its second voluntary petition for Chapter 11 on Dec. 18, 2008 (Bankr. D. Minn., Lead Case No. 08-46617). Judge Gregory F. Kishel handles the Chapter 22 case. James A. Lodoen, Esq., at Lindquist & Vennum P.L.L.P, is the Debtors' counsel. According to the company, the financial structuring process and the second bankruptcy filing are the result of events at Petters Group Worldwide, which has owned Polaroid since 2005. The founder of Petters Group and certain associates are currently under investigation for alleged acts of fraud that have compromised the financial condition of Polaroid and other entities owned by Petters Group. The company and its leadership team are not subjects of the ongoing investigation involving Petters Group. PRECISION PARTS: Wins Nod to Sell Biz. to Lone Bidder Cerion ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has authorized Precision Parts International Services Corp. to sell its business to Cerion LLC for $18.5 million, Bloomberg's Bill Rochelle reports. According to the report, did not have rival bids for Precision Parts' six plants that produce auto-parts. Headquartered in Rochester Hills, Michigan, Precision Parts International Services Corp. -- http://www.precisionparts.com/-- sells products to major north American automotive and non- automotive original equipment manufacturers and Tier 1 and 2 suppliers. The Debtors operate six manufacturing facilities throughout north America, including a facility in Mexico operated on the Debtors' behalf by Intermex Manufactura de Chihuahua under a shelter and logistics agreement. The Debtors' operations consist of two distinct lines of business: MPI, which performs fineblanking work and conventional metal stamping, as well as a range of value-added finishing operations, and Skill which performs conventional metal stamping, as well as a range of assembly and value-added finishing operations. Four of the Debtors are holding companies that have no employees and are not involved in the Debtors' day-to-day operations: PPI Holdings, Inc.; PPI Sub-Holdings, Inc.; MPI International Holdings, Inc.; and Skill Tool & Die Holdings Corp. The Company and eight of its affiliates filed for Chapter 11 protection on Dec. 12, 2008 (Bankr. D. Del. Lead Case No. 08-13289). David M. Fournier, Esq., at Pepper Hamilton LLP; and Robert S. Hertzberg, Esq., and Deborah Kovsky-Apap, Esq., at Pepper Hamilton LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Alvarez & Marsal North America LLC as financial advisor and Kurtzman Carson Consultants LLC as notice, claims and balloting agent. When the Debtors filed for protection from their creditors, they listed assets of between $100 million to $500 million each. PRIMEDIA INC: Corrects Erroneous 2008 Cash Flow Report ------------------------------------------------------ PRIMEDIA Inc. discovered an error in its reporting of cash flows from operating and investing activities in its consolidated statement of cash flows in its Quarterly Report on Form 10-Q for the nine months ended September 30, 2008. The Company improperly included the final adjustment to the net proceeds from the sale of its Enthusiast Media segment as an operating activity rather than an investing activity. This error had no impact on the Company's consolidated balance sheet, consolidated statement of operations or cash flows from financing activities for any period. It was discovered during the preparation of the Annual Report on Form 10-K for the year ended December 31, 2008 of Primedia. As a result, on March 12 the management recommended to the Chairman of the Audit Committee of the Board of Directors of the Company that the Company correct the errors in its condensed consolidated statement of cash flows for the nine months ended September 30, 2008. The Chairman agreed with management's recommendation, and it was concluded that the condensed consolidated statement of cash flows for the nine months ended September 30, 2008, should no longer be relied upon. Management has discussed this matter with Deloitte & Touche LLP, the Company's independent registered public accounting firm. The error resulted in an understatement of cash flows from operating activities and a corresponding overstatement of cash flows from investing activities for the nine months ended September 30, 2008. Headquartered in Atlanta, PRIMEDIA Inc. (NYSE: PRM) -- http://www.primedia.com/-- through its Consumer Source Inc. operation, is a provider of advertising-supported consumer guides for the apartment and new home industries. Consumer Source publishes and distributes more than 38 million guides such as Apartment Guide and New Home Guide to approximately 60,000 U.S. locations each year through its proprietary distribution network, DistribuTech. The company also distributes category-specific content on its leading websites, including ApartmentGuide.com, NewHomeGuide.com and Rentals.com, a comprehensive single unit real estate rental site. At Sept. 30, 2008, the company's balance sheet showed total assets of $269.7 million and total liabilities of $393.6 million, resulting in a stockholders' deficit of $123.9 million. * * * As reported in the Troubled Company Reporter on Dec. 16, 2008, Standard & Poor's Ratings Services lowered its issue-level rating on Norcross, Georgia-based PRIMEDIA Inc.'s $350 million secured credit facility to 'BB-' (at the same level as the 'BB-' corporate credit rating on the company) from 'BB'. In addition, S&P revised the recovery rating on this debt to '3', indicating S&P's expectation of meaningful (50%-70%) recovery in the event of a payment default, from '2'. The credit facilities consist of a $250 million term loan B due 2014 and a $100 million revolving credit facility due 2013. PRIMUS TELECOMMUNICATIONS: Chapter 11 Filing Cues Moody's D Rating ------------------------------------------------------------------ Moody's Investors Service downgraded the probability of default rating for Primus Telecommunications Group, Incorporated to D from Ca in response to the company's announcement that it, along with key affiliate companies, had filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the District of Delaware. The company's corporate family rating remains unchanged at C and its speculative grade liquidity rating remains unchanged at SGL-4 (weak). The proposed plan of reorganization and disclosure statement indicates that the preponderance of recovery value is allocated to a very small number of debt instruments, one of which is the company's senior secured bank credit facility. Since the implied structure of the continuing waterfall of liabilities features a dramatically reduced number of dollars potentially competing for future recovery value, the transaction reduces the expected loss for the bank credit facility. In turn, this causes the facility's rating to be upgraded to Ca from C. With all other rated debt instruments being converted to equity, their ratings and loss given default assessments remain unchanged. Shortly following these rating actions, Moody's will withdraw all of the relevant ratings. Rating actions: Issuer: Primus Telecommunications Group, Incorporated -- Probability of Default Rating, Downgraded to D from Ca -- Corporate Family Rating, Unchanged at C -- Speculative Grade Liquidity Rating, unchanged at SGL-4 -- Senior Unsecured Regular Bond/Debenture, Unchanged at C (LGD6, 100%) -- Step-up Subordinated Convertible Debenture, Unchanged at C (LGD6, 100%) Issuer: Primus Telecommunications Holding, Inc. -- Senior Secured Bank Credit Facility, Upgraded to Ca (LGD3, 43%) from C (LGD5, 73%) -- Senior Unsecured Regular Bond/Debenture, Unchanged at C (LGD6, 98%) Moody's most recent rating action concerning Primus was taken on December 23, 2008, at which time the company's PRD was downgraded to Ca, its CFR downgraded to C and its SGL rating downgraded to SGL-4. Primus is a competitive telecom provider headquartered in McLean, Virginia. The company offers telecommunications services to small and medium-sized enterprises, residential customers and other telecommunications carriers and resellers located in the United States, Australia, Canada, the United Kingdom and Western Europe. RALEIGH DURHAM: Case Summary & Two Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Raleigh Durham e-Suites, LLC 6308 Benjamin Road, Suite 710 Tampa, FL 33634 Bankruptcy Case No.: 09-02023 Chapter 11 Petition Date: March 13, 2009 Court: Eastern District of North Carolina (Wilson) Judge: A. Thomas Small Debtor's Counsel: Trawick H Stubbs, Jr., Esq. efile@stubbsperdue.com Stubbs & Perdue, P.A. P.O. Drawer 1654 New Bern, NC 28563 Tel: (252) 633-2700 Fax: (252) 633-9600 Estimated Assets: $1 million to $10 million Estimated Debts: $10 million to $50 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ GVEC Resource IV, Inc. Property; $19,000,000 Attn: Manager or Agent secured: PO Box 92, Road Town $3,000,000 Tortola, BVI Wayne Co Tax Collector $18,729 Attn: Manager or Agent PO Box 227 Goldsboro, NC 27533 The petition was signed by Gerald D. Ellenburg, Managing Member of e-Suites Hotels, LLC. REFCO INC: $29.4 Million Goodman Claim Reduced to $750,000 ---------------------------------------------------------- In April 2005, Richard M. Goodman commenced an action against Refco LLC and certain affiliates in the United States District Court for the Eastern District of Michigan, captioned Goodman v. Refco, LLC, et al., Case No. 2:05-CV-71610-VAR-SDP, asserting claims of negligence, fraud, conspiracy, aiding and abetting fraud. In November 2007, Mr. Goodman filed Claim No. 583 in the Debtors' cases, which replaced a previously filed claim in its entirety. Under the Amended Goodman Claim, Mr. Goodman alleged that he was entitled to recover from the Chapter 7 Debtor's estate a total of $29.432 million, which consisted of: -- $5.8 million for compensatory damages, -- $2.93 million for interest, -- $600,000 for commissions that should be disgorged, -- $8.372 million for attorney's fees, and -- $130,000 for expenses. The Chapter 7 Trustee filed an objection to the Amended Goodman Claim. As a result of various settlement meetings, Mr. Goodman accepted the Chapter 7 Trustee's offer of settlement. The Parties have decided to resolve the Amended Goodman Claim without the cost, expense, and uncertainty of a trial. The parties' Stipulation provides that: (1) The Amended Goodman Claim is reduced and allowed as a general unsecured claim for $750,000; (2) The Chapter 7 Trustee will cause the $750,000 to be paid to the trust account of Mr. Goodman's counsel. Payment of the Settlement Amount will constitute full and final satisfaction of any other claims that Mr. Goodman has asserted, or could assert, against the Debtors. (3) Mr. Goodman releases and forever discharges the Chapter 7 Debtor, the Chapter 7 Trustee, the Chapter 7 Trustee's attorneys, financial advisors, and agents, the Chapter 11 Debtors, and the Plan Administrator from any and all Goodman Claims. The Release, however, will not affect any Claims that Mr. Goodman may have presently or in the future against Charles G. Mady, Charles A. Mady, or any other entity or individual not affiliated with the Debtors, the Chapter 7 Trustee's attorneys, financial advisors, and agents or the Plan Administrator. (4) Similarly, the Chapter 7 Trustee and the Debtors release and forever discharges Mr. Goodman from any and all manner of Claims. (5) Within five business days of receiving the Settlement Payment from the Chapter 7 Trustee, Mr. Goodman will cause the Michigan Action to be dismissed in its entirety, with prejudice, and with each party to bear its own attorneys' fees and costs. Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York approved the Stipulation. Headquartered in New York, Refco Inc. -- http://www.refco.com/ -- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The company has operations in Bermuda. The company and 23 of its affiliates filed for Chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on Dec. 15, 2006. That Plan became effective on Dec. 26, 2006. Pursuant to the plan, RJM, LLC, was named plan administrator to reorganized Refco, Inc. and its affiliates, and Marc S. Kirschner as plan administrator to Refco Capital Markets, Ltd. (Refco Bankruptcy News, Issue No. 92; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) REFCO INC: Allied World Not Required to Advance Defense Costs ------------------------------------------------------------- Allied World Assurance Company (U.S.), Inc., won a ruling from the U.S. District Court for the Southern District of New York that it is not required to advance costs under a directors and officers liability insurance policy obtained by Refco Inc. Fourteen former officers and directors of Refco, Inc., initiated a complaint against Allied World, the Debtors' third excess insurer in the "tower" of directors and officers liability insurance. The Former D&Os asked Allied World to advance the defense costs they incurred as defendants in various civil proceedings, and in the case of Tone Grant, a criminal proceeding, related to the collapse of Refco. The Former D&Os asserted that the claims asserted in the Underlying Actions constitute claims for "Wrongful Acts" under the Excess Directors and Officers Insurance and Company Reimbursement Policy issued by Allied World to Refco. Allied World, however, has refused to advance any defense costs. Moreover, despite an advancement ruling with respect to the second excess D&O policy issued by Axis Reinsurance Company, another insurer, Allied World still refused to advance the defense costs, according to the Former D&Os. The Former Directors sought a declaration that the Allied World Policy requires an advancement of defense costs, as well as a preliminary and permanent injunctive relief directing Allied World to advance those defense costs, in accordance with the requirements of the Allied Policy. As of April 2008, Allied World had advanced $5.8 million of its $12.5 million limit and was continuing to advance funds at the rate of approximately $1 million every two weeks. Subsequently, Allied World sought a summary judgment order, declaring that it has no obligation under the terms of its Policy to provide coverage to the Insureds. In a 36-page opinion that tackled Allied World's Summary Judgment Motion, along with two separate actions from other insurers, Judge Gerard E. Lynch of the U.S. District Court opined that Allied World holds "a stronger position." He elaborated that under the Allied World Policy, the term "claim" is defined "any civil proceeding," contrary to the Insureds' contention that a claim refers to each separate portion of a complaint specifying the legal theories defining a cause of action. "It is therefore sufficient that [Allied World] has analyzed the operative complaints in each of the Underlying Matters to determine whether each lawsuit, as a whole, arises out of the acts, errors, omissions, facts, matters or circumstances of which [Phillip] Bennett had prior knowledge," Judge Lynch opined. Mr. Bennett, Refco's CEO, was charged with criminal charges in various criminal actions arising out of fraud at Refco. "If, as the Insureds assert, some of the claims in the Actions . . . could be said to arise out of an entirely separate fraud from the one to which [Mr. Bennett] pled guilty, this would not be fatal to the Insurers' position so long as the suit as a whole arises from the fraud of which [Mr. Bennett] had knowledge," Judge Lynch added. Judge Lynch also held that the Insurer has demonstrated that each Underlying Action arose from the fraudulent concealment of the Refco Receivable. While Allied World bears the burden of demonstrating that their interpretation of the severability provision is "the only construction that [could] fairly be placed thereon," the Insurer's assessment that the Severability Provision is limited to the rescission context under the Policy may prevail at the trial stage, the District Court concluded. Arch Insurance Withdraws Request to Advance Costs Meanwhile, Arch Insurance Company withdrew a request before the U.S. Bankruptcy Court for the Southern District of New York to advance defense costs. Arch Insurance did not disclose reasons for withdrawing the request. Arch Insurance had initially asked the Court to modify the Plan Injunction and automatic stay to permit it to advance defense costs incurred by directors and officers of Refco. Arch Insurance issued a fourth layer excess directors, officers and corporate liability policy to Refco for the claims-made period from August 11, 2005 to August 11, 2006. The Arch Policy has a limit of liability of $10 million that is excess of $40 million in underlying insurance. The Arch Insurance is comprised of: Position Insurer Policy No. Limit -------- ------- ---------- ---- Primary U.S. Specialty 24-MGU-05 $10 million Insurance Company -A10821 1st Excess Lexington Insurance 1620924 $7.5 million, Company excess of $10 million 2nd Excess Axis Reinsurance RNN 506300 $10 million, Company excess of $17.5 million 3rd Excess Allied World AW0418197 $12.5 million Assurance Company excess of $27.5 million The Arch Policy generally applies in conformance with the terms and conditions of the Primary Policy, except as modified by the terms and conditions of the Arch Policy or as limited by any other Underlying Policy further limiting or restricting coverage. The Primary Policy provides that the Insurer will pay covered Defense Costs on an as-incurred basis. If it is finally determined that any Defense Costs paid by the Insurer are not covered under this Policy, the Insureds agree to repay the Non- covered Defense Costs to the Insurer. The Policies relate to certain matters involving litigations, adversary proceedings, restraints, seizures or actions based on civil forfeiture statutes that were initiated against Refco and several of its directors and officers, which include: * Refco, Inc. Securities Litigation, * Thomas H. Lee Equity Fund V, L.P. v. Bennett, et al., * American Financial International Group v. Bennett et al., * In re Refco Capital Markets Ltd. Brokerage Customer Securities Litigation, * VR Global Partners L.P. v. Bennett et al., * Capital Management Select Fund Ltd. v. Bennett et al., * Kirschner v. Thomas H. Lee Partners, L.P. et al., * Kirschner v. Grant Thornton LLP et al., * Kirschner v. Agoglia, et al., * Krys, et al. v. Sugrue, et al., * Capital Management Select Fund Ltd., et al. v. Bennett, et al., and * United States v. Funds on Deposit at Bear Stearns Account No. 893-86267. The D&Os involved in the Actions noted are John D. Agoglia, Peter McCarthy, Dennis A. Klejna, William M. Sexton, Gerald Sherer, Philip Silverman, Richard N. Outridge, Joseph Murphy, Leo R. Breitman, Nathan Gantcher, David V. Harkins, Scott L. Jaeckel, Thomas H. Lee, Ronald L. O'Kelley and Scott A. Schoen. Although several of the D&Os have sought coverage and advancement of defense costs from Arch Insurance in relation to the Actions, Arch Insurance contended that it is plainly and unambiguously not required to advance the Defense Costs prior to an adjudication of its coverage defenses. Arch Insurance further maintained that there is no coverage available under the Arch Policy for the Actions. However, in the interest of conserving judicial resources, and to avoid further litigation of the advancement issue before the Court, Arch Insurance had agreed to provide for the advancement of Defense Costs under the Arch Policy, subject to certain conditions. In this regard, relief from the Plan Injunction and the automatic stay is necessary to permit advancement of the Defense Costs on behalf of the D&Os under the D&O liability policies issued to Refco, John H. Eickemeyer, Esq., at Vedder Price P.C., in New York, had told the Court. Headquartered in New York, Refco Inc. -- http://www.refco.com/ -- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The company has operations in Bermuda. The company and 23 of its affiliates filed for Chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on Dec. 15, 2006. That Plan became effective on Dec. 26, 2006. Pursuant to the plan, RJM, LLC, was named plan administrator to reorganized Refco, Inc. and its affiliates, and Marc S. Kirschner as plan administrator to Refco Capital Markets, Ltd. (Refco Bankruptcy News, Issue No. 92; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) REFCO INC: Special Reserve Distribution Deferred Until June 30 -------------------------------------------------------------- RJM, LLC, the Plan Administrator of Refco Inc. and its debtor- affiliates, including Refco F/X Associates, LLC, notified the U.S. Bankruptcy Court for the Southern District of New York of a sixth interim distribution of additional property, totaling $31,000,000, on December 31, 2008, to holders of Allowed Class RCM Securities Customer Claims. Allowed Class RCM Securities Customer Claims aggregated approximately $2,835,617,507. The RCM Plan Administrator established (i) the Capped Claims Special Reserve, and (ii) the 502(h) Special Reserve, which are being withheld from the current distribution pending resolution of certain disputes. A dispute has been raised by the holders of RCM Securities Customer Claims and RCM FX/Unsecured Claims regarding the allocation of Additional Property distributions that otherwise would be made to the Capped Claim Holders. They insist that the Additional Property should be distributed among both Holders as separate classes. Accordingly, $4,000,000 was added into the Capped Claims Special Reserve for the disputed allocations. The RCM Plan Administrator informed that it aimed to distribute the Capped Claims Special Reserve no later than March 31, 2009, unless, upon the request of the Refco Plan Committee, the Court would require the RCM Plan Administrator to distribute the Capped Claims Special Reserve pursuant to an alternative methodology. To permit further consultation with the Refco Plan Committee, the RCM Plan Administrator has agreed to: (i) extend to June 15, 2009, within which an Alternative Distribution Order must be obtained; and (ii) defer until June 30, 2009, for the Capped Claims Special Reserve to be distributed pursuant to the terms of the Distribution Notice. The RCM Plan Administrator reserves the right to amend this distribution notice as he determines appropriate from time to time. Headquartered in New York, Refco Inc. -- http://www.refco.com/ -- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The company has operations in Bermuda. The company and 23 of its affiliates filed for Chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on Dec. 15, 2006. That Plan became effective on Dec. 26, 2006. Pursuant to the plan, RJM, LLC, was named plan administrator to reorganized Refco, Inc. and its affiliates, and Marc S. Kirschner as plan administrator to Refco Capital Markets, Ltd. (Refco Bankruptcy News, Issue No. 92; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) ROCK-TENN CO: S&P Raises Issue-Level Rating One Notch to 'BB+' -------------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its issue- level and recovery ratings on Norcross, Georgia-based Rock-Tenn Co.'s existing senior secured notes. S&P raised the issue-level rating by one notch to 'BB+' (same level as the corporate credit rating) from 'BB' and revised the recovery rating to '4' from '5'. The revised ratings indicate S&P's expectation of average (30%- 50%) recovery in the event of a payment default. The higher issue-level rating and recovery expectation reflect the repayment of the company's outstanding industrial revenue bonds and the resulting additional collateral that benefits secured noteholders in the event of a default. Previously, the Solvay Paperboard assets were carved out as collateral for the IRBs. However, with the repayment of these obligations Solvay Paperboard assets are now included in the collateral package for the secured notes and bank credit facilities. Rock-Tenn had about $1.68 billion of debt, adjusted for operating leases and employee benefits liabilities, outstanding on Dec. 31, 2008. The corporate credit rating on the company is 'BB+' and the outlook is stable. The ratings on Rock-Tenn reflect competitive end markets, volatile raw material costs, and aggressive financial leverage following the acquisition of Southern Container Corp. in March 2008. Forward integration, improved operating margins, and relatively stable cash flow generation support the ratings. Ratings List Rock-Tenn Co. Corporate credit rating BB+/Stable/-- Ratings Revised To From --------------- -- ---- Senior secured notes BB+ BB Recovery rating 4 5 ROGER SHIFFMAN: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Roger Shiffman Joanne Marie Shiffman 310 Pasadera Drive Monterey, CA 93940 Bankruptcy Case No.: 09-51816 Chapter 11 Petition Date: March 15, 2009 Court: United States Bankruptcy Court Northern District of California (San Jose) Judge: Arthur S. Weissbrodt Debtor's Counsel: Henry B. Niles, III, Esq. Law Offices of Henry B. Niles III 340 Soquel Ave., #105 Santa Cruz, CA 95062 Tel: (831) 457-4545 Email: ecf-niles@hbniles.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/canb09-51816.pdf RONI RABIN: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Roni Rabin 25104 HIghland Manor Court Damacus, MD 20882 Bankruptcy Case No.: 09-14501 Chapter 11 Petition Date: March 17, 2009 Court: United States Bankruptcy Court District of Maryland (Greenbelt) Debtor's Counsel: Sandy Y. Chang, Esq. The Chang Law Firm 1 Research Court, Suite 450 Rockville, MD 20850 Tel: (301) 216-3845 Email: sandychang@thechanglawfirm.com Total Assets: $1,106,260 Total Debts: $1,268,676 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mdb09-14501.pdf The petition was signed by Roni Rabin. RH DONNELLEY: Approves Amendment to Severance Plan for SVP ---------------------------------------------------------- The Compensation and Benefits Committee of the Board of Directors of R.H. Donnelley Corporation approved an amendment to the Company's Severance Plan-Senior Vice President effective March 9. The plan provides that any amendment or termination of the SVP Plan that results in a reduction or termination of any plan benefits will not apply to any employee who is a participant immediately before the date of the amendment or termination. As amended, the SVP Plan provides benefits to senior vice presidents of the Company and its affiliates, together with certain more senior officers who do not have employment agreements, in the event of termination of their employment under the circumstances described in the SVP Plan. The Employee Benefits Committee of the Company administers the SVP Plan in its sole discretion. According to the SVP Plan, if an eligible employee's employment is terminated either by the Company for reasons other than Cause or by the employee for Good Reason and the employee's employment is not terminated within two years following a Change in Control of the Company, the employee will generally be entitled to a lump sum cash payment equal to 78 weeks of pay plus one and one half times such employee's target bonus, continuing health benefits under COBRA and basic life insurance premiums for 18 months, and a prorated bonus for the year of termination, based on the achievement of applicable performance conditions. Moreover, an eligible employee who is reemployed by the Company or one of its affiliates during the 78-week period following termination of employment, or the 104-week period following a termination that occurs within two years after a Change in Control, is required to repay to the Company a prorated portion of his or her severance benefits paid under the SVP Plan. About R.H. Donnelley Headquartered in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun & Bradstreet Corp., -- http://www.rhdonnelley.com/-- (NYSE: RHD) publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc. and Local Launch, Inc. are the company's only direct wholly owned subsidiaries. * * * As reported by the Troubled Company Reporter on February 16, 2009, Standard & Poor's Ratings Services lowered its corporate credit rating for R.H. Donnelley Corp. by three notches to 'CCC+' from 'B+'. S&P said that the rating outlook is negative. According to the TCR on February 11, 2009, Moody's Investors Service downgraded R.H. Donnelley's Corporate Family Rating to Caa1 and its Probability of Default Rating to Caa2, prompted by concerns that the company may determine that a complete debt restructuring represents the best alternative of addressing its currently challenged capital structure. RH DONNELLEY: Board Approves 2009 Long-Term Incentive Program ------------------------------------------------------------- The Compensation and Benefits Committee of the Board of Directors of R.H. Donnelley Corporation approved the 2009 Long-Term Incentive Program for the Company March 9. The 2009 LTIP is a cash-based plan designed to provide long-term incentive compensation to participants based on the achievement of performance goals designated by the Committee pursuant to the Company's 2005 Stock Award and Incentive Plan. The Committee administers the 2009 LTIP in its sole discretion and may, subject to certain exceptions, delegate some or all of its power and authority under the 2009 LTIP to the Chief Executive Officer or other executive officer of the Company. Participants in the 2009 LTIP consist of such executive officers of the Company and its affiliates as the Committee in its sole discretion may select from time to time and such other employees of the Company and its subsidiaries and affiliates as the Chief Executive Officer in his sole discretion may select from time to time. The amount of each award under the 2009 LTIP will be paid in cash and is dependent upon the attainment of certain performance measures related to the amount of the Company's cumulative free cash flow for the 2009, 2010, and 2011 fiscal years. Participants who are executive officers of the Company, and certain other participants designated by the Chief Executive Officer, are also eligible to receive a payment upon the achievement of a restructuring, reorganization or recapitalization relating to the Company's outstanding indebtedness and liabilities during the Performance Period. Payments will be made following the end of the Performance Period or the date of a Specified Action. Awards granted to executive officers under the 2009 LTIP will continue to be paid, subject to the applicable performance conditions, in the event the participant's employment is terminated by the participant with Good Reason by the Company without Cause or as a result of the participant's death or disability. Such payment will be made as if the participant had remained employed with the Company through the applicable payment date under the 2009 LTIP, subject to the achievement of the applicable performance conditions. If any participant's employment with the Company is terminated under any other circumstances, any unpaid amount under the 2009 LTIP will be forfeited. About R.H. Donnelley Headquartered in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun & Bradstreet Corp., -- http://www.rhdonnelley.com/-- (NYSE: RHD) publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc. and Local Launch, Inc. are the company's only direct wholly owned subsidiaries. * * * As reported by the Troubled Company Reporter on February 16, 2009, Standard & Poor's Ratings Services lowered its corporate credit rating for R.H. Donnelley Corp. by three notches to 'CCC+' from 'B+'. S&P said that the rating outlook is negative. According to the TCR on February 11, 2009, Moody's Investors Service downgraded R.H. Donnelley's Corporate Family Rating to Caa1 and its Probability of Default Rating to Caa2, prompted by concerns that the company may determine that a complete debt restructuring represents the best alternative of addressing its currently challenged capital structure. RH DONNELLEY: Delays Annual Report; In Talks With Lenders --------------------------------------------------------- Steven M. Blondy, Executive Vice President and Chief Financial Officer of R.H. Donnelley Corporation said the Company is presently in the process of finalizing its 2008 year end income tax accounts, particularly as it relates to deferred income tax and net operating loss carryforwards. Because this work is not yet complete, the Company was not in a position to file its Annual Report on Form 10-K for the fiscal year ended December 31, 2008, by March 16, 2009. The Company expects to file its Annual Report on Form 10-K as soon as practicable and in any event by March 31, 2009. The Company cannot eliminate the reasons causing the inability to timely file without unreasonable effort or expense, Mr. Blondy said. "The Company presently expects that the statement of operations to be included in the Annual Report on Form 10-K for the year ended December 31, 2008 will reflect significant changes in operations from the prior year consistent with the comparative results of operations disclosed in the schedules to the Company's earnings release included in our Form 8-K filed with the Commission on March 12, 2009," Mr. Blondy said. On March 12, 2009, R.H. Donnelley reported full year 2008 net revenues of $2,617 million, representing a 2% decline from the prior year. In the fourth quarter of 2008, net revenue declined 7% from the fourth quarter of the prior year to $630 million. The Company disclosed a 2008 pre-tax loss of $3.5 billion and fourth quarter pre-tax loss of $700.3 million. "During 2008, we took significant initiatives to address the challenging selling environment and advanced our strategic priorities," said David C. Swanson, chairman and CEO of R.H. Donnelley. "We dramatically improved our efficiency and eliminated non-essential operating costs, reducing headcount by 20% and achieving $100 million of cost savings. At the same time, we broadened and improved our Dex branded interactive local search solutions. We also completed a major, company-wide systems integration and upgrade project and reduced net debt by more than $600 million. These initiatives helped us to continue building a foundation for sustainable growth once the economy recovers." Mr. Swanson continued, "Advertising sales declined 8 percent for the full year and 12 percent in the fourth quarter as trends weakened during the second half of the year. These disappointing results were primarily due to the impact that the recession had on small and medium sized businesses, including lower consumer spending, reduced liquidity and higher business failure rates. We continued to diversify advertisers into our online and mobile platforms in addition to our core print solutions, but could not overcome the extremely difficult economic conditions. Despite the challenging environment, our mission remains unchanged -- to help local businesses grow. R.H. Donnelley continues to generate large volumes of ready-to-buy leads at an accessible price and attractive ROI for local advertisers. Our services will generate even more value as the market becomes more complex and fragmented." During the fourth quarter, R.H. Donnelley recognized a $744 million non-cash, pre-tax impairment charge associated with its intangible assets that in large part reflects the decline in the market value of the Company's debt and equity securities and the impact that the overall economy has had on its operating results. Earlier in the year, the Company recorded $3.1 billion of non-cash, pre-tax charges associated with goodwill impairment to reflect the decline in the market value of the Company's debt and equity securities. R.H. Donnelley is presently in the process of finalizing its 2008 year end income tax accounts, particularly as it relates to deferred income tax and net operating loss carryforwards. KPMG, the Company's independent registered public accounting firm, remains involved in finalizing its audit with respect to those income tax accounts. R.H. Donnelley has engaged Lazard as its financial advisor to assist in the evaluation of its capital structure, including various balance sheet restructuring alternatives. "Our goal is to better position R.H. Donnelley for the future by establishing a more sustainable capital structure," said Mr. Blondy. "We have significant debt maturities commencing in 2010 that we are working to address. Though we intended to refinance this debt prior to maturity, it may no longer be possible to do so given the current state of the capital markets. In the meantime, the company continues to generate robust EBITDA and has significant liquidity to meet all our financial and business obligations." Mr. Blondy continued, "We plan to initiate discussions with our banks and bondholders about amending, refinancing or restructuring our debt obligations. Whichever path we choose to strengthen our balance sheet, R.H. Donnelley will continue to provide outstanding service and support to our customers, while also remaining committed to our employees and business partners. Our print and digital solutions continue to be the best way for local businesses to connect with ready-to-buy consumers, which should position R.H. Donnelley for healthy growth once the economy stabilizes." R.H. Donnelley borrowed $361 million from the revolving credit facilities of three of its operating subsidiaries on February 17, 2009. The Company borrowed the cash to increase liquidity and financial flexibility given the continuing uncertainty in the global credit markets. As of February 28, 2009, the company had more than $500 million of cash and cash equivalents on hand. About R.H. Donnelley Headquartered in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun & Bradstreet Corp., -- http://www.rhdonnelley.com/-- (NYSE: RHD) publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc. and Local Launch, Inc. are the company's only direct wholly owned subsidiaries. * * * As reported by the Troubled Company Reporter on February 16, 2009, Standard & Poor's Ratings Services lowered its corporate credit rating for R.H. Donnelley Corp. by three notches to 'CCC+' from 'B+'. S&P said that the rating outlook is negative. According to the TCR on February 11, 2009, Moody's Investors Service downgraded R.H. Donnelley's Corporate Family Rating to Caa1 and its Probability of Default Rating to Caa2, prompted by concerns that the company may determine that a complete debt restructuring represents the best alternative of addressing its currently challenged capital structure. SAMSUN LOGIX: Voluntary Chapter 15 Case Summary ----------------------------------------------- Chapter 15 Petitioner: Hyun-Chul Hur as receiver of Samsun Logix Corporation Chapter 15 Debtor: Samsun Logix Corporation 5-6F, Lee Ma Blg 146-1 Soosong-Dong Jongno-Gu Seoul Korea Chapter 15 Case No.: 09-11109 Type of Business: The Debtor is one of South Korea's largest bulker operators. It owns 15 bulkers and has another four new buildings on order. The Company's fleet comprises capesize, panamax and handysize vessels built in the 1980s and 1990s. The oldest vessel is the 1982-built, 21,289 dwt Ataraxia, while the youngest is the 1999-built, 69,406 dwt Clio. See: http://www.samsunlogix.com/ Chapter 15 Petition Date: March 11, 2009 Court: Southern District of New York (Manhattan) Chapter 15 Petitioner's Counsel: Martin G. Bunin, Esq. marty.bunin@alston.com Alston & Bird LLP 90 Park Avenue New York, NY 10016 Tel: (212) 210-9492 Fax: (212) 922-3892 Estimated Assets: More than $1 billion Estimated Debts: More than $1 billion SEMGROUP LP: Creditors Panel May Pursue Actions Against Kivisto --------------------------------------------------------------- The U.S. Bankruptcy Court in Delaware has authorized the Official Committee of Unsecured Creditors appointed in the bankruptcy cases of Semgroup L.P. and its debtor-affiliates to commence an action on behalf of the Debtors against Thomas L. Kivisto, Westback Purchasing Co., LLC, Gregory C. Wallace, and VAP-IV, LLC involving the wrongful conversion or dissipation of the Debtors' assets. The Debtors have consented to the Committee prosecuting the Claims and commencing an adversary proceeding by filing an amended complaint against Mr. Kivisto, et al. The Committee had argued that the Debtors' exclusive period to propose and file a Chapter 11 plan of reorganization expires March 19, 2009. It said that until that time, the Debtors will be concentrating on drafting a plan of reorganization for 27 Debtors in a case with myriad complex issues. It said that during that time, the Debtors will also be trying to revive various business units still feeling the effects of the unraveling of prepetition events. Given the time sensitive-nature of the claims and the threat of asset dissipation to the estates, it is imperative that the Complaint be prosecuted with alacrity, the Committee had said. Examiner, Tom Kivisto, et al., Object Louis J. Freeh, Esq., the Court-appointed examiner in the Debtors' bankruptcy cases, recognizing the substantial interest of the Debtors' estates and their creditors in permitting the Committee to take prompt action to maximize value, had said he does not object to the entry of an order granting the Committee derivative standing to prosecute the claims. However, the Examiner asked that the Committee continue to coordinate with the Examiner and his professionals to permit the Examiner to continue to lead the investigation and to otherwise avoid interfering with the investigation or the preparation of the report until the report has been filed with the Court. The Examiner said he expects to complete his report by March 24, 2009. Tom Kivisto and Westback Purchasing, meanwhile, had argued it is not sufficient that the Debtors do not object to the Committee prosecuting the claims. Susan E. Kaufman, Esq., at Cooch and Taylor, P.A., in Wilmington, Delaware, pointed out that the bankruptcy court's equitable power to grant derivative standing arises when the debtor-in-possession refused to bring an action to avoid a transfer. In a separate filing, Vess Oil Corporation, a creditor of the Debtors and an entity distantly related to VAP, had argued, among others, that the Committee's pursuit of the complaint against VAP is a complete waste of the assets of the estates. Vess had said that the Committee has failed to conduct a proper or even an initial investigation of the allegations contained in the complaint, at least with respect to VAP. Vess had said Westback sold Kansas oil and gas leases for $6 million about one month after the Debtors filed for bankruptcy. "The sum of $6 million clearly exceed the fair-market value for the interests sold, which a reasonable investigation would have revealed," Vess complains, the Tulsa World related. Committee Addresses Objections The Committee argued that the Kivisto Defendants' assertion that the Committee failed to demand on the Debtors to pursue the Claims is unavailing. The Committee pointed out that it has made a demand on the Debtors on the Fall of 2008 upon learning of the Kivisto Defendants' failure to repay the Westback Receivable and contemporaneous liquidation of valuable oil and gas leases. The Committee has met with Vess' counsel and Vess has shared selected information on a confidential basis purporting to show the factual inaccuracies the Committee made in its complaint. On March 6, 2009, the Committee agreed to correct the factual errors in an amended complaint and to hold off naming Vess in the amended complaint as a defendant, at least until the Committee is able to complete further investigation concerning the transactions between the Kivisto Defendants and Vess. During the March 12, 2009, hearing on the Motion, the Committee resolved Vess' objection. For reasons stated on the record of the March 12 proceedings, the Court granted the Committee's motion overruling the objections of Mr. Kivisto and Westback. About SemGroup LP SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on Nov. 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: Producers Allege Systematic Error in Debt Schedule --------------------------------------------------------------- The Official Producers' Committee objects to Schedule E of the schedules of assets and liabilities filed by Semgroup L.P. and its debtor-affiliates as they relate to so called 20-Day Claims. The Producers' Committee asks the U.S. Bankruptcy Court in Delaware to direct the Debtors to amend their Schedules. The Producers' Committee complains that systematic errors exist in the Debtors' filed Schedules E with regard to 20-Day Claims. Hugh M. Ray, Esq., at Andrews Kurth LLP, in Houston, Texas, relates that the OPC has taken a sampling of certain 20-Day Claims and compared them to the Debtors' Schedules E. In the sampling, the OPC found an alarming number of mistakes and plain errors that call into question the validity of the Debtors' Schedule E. The common theme of the errors, Mr. Ray points out, is that the Debtors have blindly applied an arbitrary date that they use in their accounting system for summary allocation of their run tickets without regard to the actual delivery or receipt dates. As a result, the claims are treated by the Debtors as having accrued on July 1, 2008, and excluded from Schedule E, even though those claims arise from goods delivered within the 20-Day Period. The systematic errors in the Debtors' Schedules create burden and prejudice for creditors, especially for those who are less sophisticated or affluent and may not file individual objections or proofs of claim, the OPC asserts. The Official Committee of Unsecured Creditors, in a separate filing, object to the allowance of all scheduled and filed administrative claims pursuant to Section 503(b)(9) of the Bankruptcy Code. The Creditors' Committee complains that the final allowance of every Section 503(b)(9) claim -- more than 3,700 claims in excess of $330 million -- is grossly premature at this stage in the Debtors' bankruptcy cases. Prior to final allowance, the Committee says it would like an opportunity to understand and investigate the Debtors' methodology in identifying and quantifying the 20-Day Claims. The Committee notes that there a plethora of bona fide legal questions concerning the scope and meaning of the recently enacted Section 503(b)(9) that require resolution by the Court. Other parties-in-interest who filed separate objections to the Debtors' Schedule E because of their factual errors are: * AKA Energy Group, LLC * Samson Resources Company, et al. * Growmark, Inc. * Chevron Products * Triad Energy, Inc. * River View Pipelines, L.L.C. * Staghorn Energy LLC * Crown Energy Company * Dorado Oil Company * Pierce Production Co. * Titan Resources Limited * Coffeyville Resources, LLC * Crosstex NGL Marketing, LP * Mewbourne Oil Company * Black Gold Oil Co. * Phoenix Oil and Gas, Inc. * Crude Marketing and Transportation, Inc. * New Dominion LLC * Hutchinson Oil Company * Triad Energy, Inc. * Bobby J. Darnell * RDT Properties, Inc. * Edinger Engineering, Inc. * Cook Oil Co. * Wildhorse Operating, Inc. * GP II Energy, Inc. * Zenergy, Inc. * RWI Enterprises, LLC * Capital Energy LLC * Davis Petroleum, Inc. * Vess Oil Corporation * Cenpat Operating, LLC * RAMA Operating Co., Inc. * Enerfin Resources I Limited Partnership * DesignPlast, Inc. * Murphy Oil USA, Inc. * Squareknot Energy, Inc. * Statewide Crude, Inc. * Bridwell Oil Company * Targa Liquids Marketing and Trade * Targa Permian LP * Cimmarron Gathering, LP * Central Crude Corporation * Lionel Harris Oil Co., Inc. * Noble Energy, Inc. * Plains Exploration & Production Company * Herman E. Loeb, LLC * Barta Enterprises * Kahan & Associates, Inc. * John Warden, Inc. * Unit Petroleum Company * Willford Energy Company, Inc. * American Energies Corporation * Barnes Oil Company * Escher Corporation * Clipper Energy * Rosewood Resources, Inc. * Rougeot Oil and Gas Corporation * Pioneer Natural Resources * Atlas Pipeline Mid-Continent, LLC * David K. Moore and Latigo Drilling Corporation * Butkin Oil Company, LLC * George W. Dennison, Sr. * Sullivan and Company, LLC * Shell Energy North America, LP * XTO Energy Inc. * Sta-Bilt Construction Co. * Gary-Williams Energy Corporation * ConocoPhillips Company * Nadel and Gussman, LLC * Cummins Investment Corporation * Nadel and Gussman Permian, LLC * Murfin Drilling Company, Inc. * Pipe & Supply Company, Inc. * Bank of America, N.A. * Dreyer Oil Co. * JMA Energy Company, LLC * LCS Production Company * Enterprise Group * TE Products Pipeline Company, LP * Forest Oil Corporation * Nacogdoches Oil & Gas, LLC * South Burbank Petroleum Corporation * Wadi Exploration and Production, LLC * Titan Energy, Inc. * Anadarko Energy Services Company, Kerr-McGee Gathering, L.L.C., Kerr-McGee Oil & Gas Onshore, LP * Atchley Resources, Inc., Carmac Energy Corporation, Marlin Oil Corporation, US Canada Ltd. Partnership, United Production Company, LLC * Altex Energy Corp., Blue Dolphin Production, LLC, Lobar Oil Co., Inc., Ranken Energy Corporation * Dan Wallace, Inc., Egret Operating, Inc., Hawkins Oil, LLC, Huntington Energy, LLC, J.D. Pittman, Patriot Petroleum Co., LLC, Quinque Operating Company, and Zephyr Operating Co. * Thunder Oil & Gas, LLC, The Quintin Little Company, Te-Ray Resources, Inc., RKK Production, Perry Larson Operating, Pedestal Oil Co., Newell Oil & Gas, Inc., Mercuria Energy Trading, Inc., Kirkpatrick Oil Company, Grayson Investments LLC, Athan, Inc., Jolen Operating Company, Mustang Fuel Corporation, Petrohawk Energy Corporation, Special Energy Corporation, Stephens & Johnson Operating Company These parties-in-interest reserve their right regarding the administrative claims and issues relating to Debtors' Schedule E: * Ardmore Production & Exploration Co., Arrow Oil & Gas, Astine & Musgrove, Inc., Casey Musgrove Oil Company, Inc., Chaparral Energy, L.L.C., Charter Oak Production Company, FHA Oil & Gas LLC and FHA Investments, LLC, Fairfield Oil & Gas, GMX Resources, Ground Development Company, Howard & Taylor Oil, Jack Exploration, Inc., Keith F. Walker Oil & Gas Company, LLC, Kingery Drilling Company, Inc., Krumme Oil Company, LLC, Landers Oil & Gas, Inc., Little Bear Resources, L.L.C., Muirfield Resources Company, Musgrove Energy, Inc., NYTEX Energy, L.L.C., Oklahoma Oil & Gas Management, Inc., Otey Johnson Properties, Inc., Patwill Oil & Gas, Inc., R.J. Sperry Co., Romak Corporation, Roxanna Oil Company, Seeker LLC, Stephens Exploration, The Gloria Corporation, Tommy Young Oil, Inc., Tripledee Operating Company, LLC, Tripower Resources, L.L.C., Wellco Energy, Inc., Williams NGL Marketing, LLC, Williams Energy Canada, Inc., Mid-Con Frac & Storage, Williams Field Services and Williams Production RMT Company * Slawson Companies, Inc., Sterling Energy, Randon Production Company, Central Operating, Inc., Coral Coast Petroleum, Drillers & Producers, Inc., Double Eagle Exploration, Inc., Wellstar, GRA EX, W.D. Short Oil Co., L.L.C., McGinness Oil Company of Kansas, Inc., L & J OIL PROPERTIES, INC., CMX, Inc., Platt Valley Oil Company, Oil Company of America, Braden-Deem, Inc., J & D INVESTMENT COMPANY, V.J.I. Natural Resources, Inc., Calvin Noah, Wheeler Energy, D E Exploration Inc., Daystar Petroleum Inc., Dunne Equities Inc., F.G. Holl Co. LLC, Landmark Resources Inc., Lario Oil & Gas Co., McCoy Petroleum Corporation, Mid-Continent Energy Corp., Molitor Oil, Inc., Mull Drilling Co., Inc., D E Exploration, Daystar Petroleum Inc., Dunne Equities Inc., F.G. Holl Co. LLC, Lario Oil & Gas Co., Landmark Resources Inc., McCoy Petroleum Corporation, Osborn Heirs Co., P. Osborn Heirs Co., Pickrell Drilling Company, Inc., Red Oak Energy Inc., Ritchie Exploration, Inc., Tempest Energy Resources LP, Thoroughbred Associates, V.J.I. Natural Resources, Viking Resources, Inc., Vincent Oil Corporation, Wheeler Oil Company, White Pine Petroleum Corporation. About SemGroup LP SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on Nov. 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: Sunoco Sued Over Payment of Oil Sold to Semcrude ------------------------------------------------------------- Samson Resources Company and Samson Lone Star, LLC, filed a complaint against Sunoco Logistics Partners, L.P., in the U.S. District Court for the Northern District of Oklahoma to recover payments for oil deliveries from SemGroup, L.P.'s affiliates, SemCrude, L.P., and Eaglwing, L.P. In the course of its business, Samson entered into various agreements with SemCrude and Eaglwing under which Samson agreed to sell production, principally crude oil, directly from the wells it operates. SemGroup has agreed to remit monthly payments to Samson. Samson said in the complaint that it has sold and delivered millions of dollars worth of crude oil to SemGroup from June 1 through July 21, 2008, for which Samson has not been paid. SemGroup and its affiliates, SemCrude and Eaglwing, filed for bankruptcy on July 22, 2008. Sunoco was a substantial purchaser or recipient of crude oil from SemGroup prior to bankruptcy. Samson said Sunoco either traded, swapped or sold Samson's crude oil to third parties, or consumed Samson's crude oil in the course of Sunoco's operations, which generated proceeds, funds or valuable consideration for the benefit of Sunoco. In September 2008, Sunoco indicated that it has terminated its agreement with SemGroup. Samson related that Sunoco claims to have received or otherwise accounted for tens of millions of dollars in crude oil production or proceeds for the alleged purchase or delivery of crude oil from SemGroup, including the crude oil of Samson and other producers. Samson asserts in the complaint that it holds valid, perfected purchase money security interests and liens on all crude oil produced, sold and delivered to SemGroup in June and July 2008 for which SemGroup has failed to pay. Those valid and perfected purchase money security interests and liens extends to all proceeds resulting from SemGroup's sale of the crude oil to third parties, including Sunoco, William H. Spitler, Esq., at Doerner, Saunders, Daniel & Anderson, L.L.P., in Tulsa, Oklahoma, argued for Samson. Specifically, in the complaint, Samson asks the Northern Oklahoma District Court to declare, among others, that: (a) the proceeds of the crude oil it delivered to SemGroup be proceeds of purchase money security interests, liens, and constructive trust claims, and are to be held for the benefit of Samson and not otherwise subject to any claims or reduction by virtue of other contractual relationships and agreements between Sunoco and SemGroup; (b) in the alternative, Sunoco purchased Samson's crude oil as first purchaser and is directly obligated to Samson for the crude oil sales, and that to the extent of non-payment of Sunoco, Samson is entitled to enforce its statutory purchase money security interests, liens, and constructive trust rights against Sunoco as first purchaser; and (c) the Samson Proceeds are being wrongfully and without justification withheld from Samson, entitling Samson to an order requiring that all profits or financial gain of Sunoco on account of the wrongful withholding and unjust enrichment be disgorged. About SemGroup LP SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on Nov. 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SHARPER IMAGE: Motorola to Pay $185,000 to Settle Avoidance Suit ---------------------------------------------------------------- The Sharper Image Corp. has identified certain transfers to Motorola, Inc., its former supplier of electronic goods, on account of antecedent debt within 90 days of the Petition Date aggregating $408,029. The Debtor has asserted that those transfers constitute voidable preferences pursuant to Section 547 of the Bankruptcy Code and has made a written demand to Motorola for recovery of the Disputed Transfers. Motorola has rejected the demand and argued that the Disputed Transfers are not avoidable pursuant to Section 547(c). After substantial negotiations between the Debtor and Motorola as to the dispute and the pertinent facts, in the interests of expeditious resolution, and to eliminate the uncertainty and costs of prolonged discovery and litigation, the parties have agreed that it is in their mutual best interests that their dispute be resolved consensually. Accordingly, the parties entered into a settlement resolving their disputes. Accordingly, the Debtor asks Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware to approve its settlement agreement with Motorola, which provides that Motorola will pay to the Debtor $185,000 in full and final settlement of the dispute upon entry of a final and non-appealable order approving the Settlement Agreement. The Settlement Agreement further provides for a mutual release of all claims related to the Disputed Transfers, with the exception of Motorola's right to file a general unsecured claim in the Settlement Amount pursuant to Section 502(h). Although neither party admits the facts relied upon by the other nor concedes to the legal positions asserted by each, the parties seek to settle their dispute due to the vagaries of litigation and the costs and expenses that would be incurred by the initiation of litigation to the detriment of both Parties. About Sharper Image Corp. Headquartered in San Francisco, California, Sharper Image Corp. -- http://www.sharperimage.com/-- is a multi-channel specialty retailer. It operates in three principal selling channels: the Sharper Image specialty stores throughout the U.S., the Sharper Image catalog and the Internet. The company has operations in Australia, Brazil and Mexico. In addition, through its Brand Licensing Division, it is also licensing the Sharper Image brand to select third parties to allow them to sell Sharper Image branded products in other channels of distribution. The company filed for Chapter 11 protection on Feb. 19, 2008 (Bankr. D.D., Case No. 08-10322). Judge Kevin Gross presides over the case. Harvey R. Miller, Esq., Lori R. Fife, Esq., and Christopher J. Marcus, Esq., at Weil, Gotshal & Manges, LLP, serve as the Debtor's lead counsel. Steven K. Kortanek, Esq., and John H. Strock, Esq., at Womble, Carlyle, Sandridge & Rice, P.L.L.C., serve as the Debtor's local Delaware counsel. An Official Committee of Unsecured Creditors has been appointed in the case. Cooley Godward Kronish LLP is the Committee's lead bankruptcy counsel. Whiteford Taylor Preston LLC is the Committee's Delaware counsel. When the Debtor filed for bankruptcy, it listed total assets of $251,500,000 and total debts of $199,000,000. As of June 30, 2008, the Debtor listed $52,962,174 in total assets and $39,302,455 in total debts. The Court extended the exclusive period during which the Debtor may file a Plan through and including Sept. 16, 2008. Sharper Image sought and obtained the Court's approval to change its name to "TSIC, Inc." in relation to an an Asset Purchase Agreement by the Debtor with Gordon Brothers Retail Partners, LLC, GB Brands, LLC, Hilco Merchant Resources, LLC, and Hilco Consumer Capital, LLC. (Sharper Image Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) SHARPER IMAGE: Court Approves $207,339 Settlement with Canon ------------------------------------------------------------ Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware approved a settlement agreement between The Sharper Image Corp. and Canon U.S.A. Prior to the Petition Date, Canon U.S.A., Inc., sold cameras, camcorders, and similar imaging equipment to the Debtor for resale. During the fourth quarter of 2007, the Debtor was paying in cash advance of the Equipment before it arrived at its stores. To the extent the Debtor did not receive the Equipment equal to the prepaid amount, Canon would apply the unused portion of the advance to future shipments. Following the Petition Date, the Debtor no longer received new shipments of Equipment, but continued to sell the Equipment it had on hand prior to the Petition Date, John H. Strock, Esq., at Womble Carlyle Sandridge & Rice, PLLC, in Wilmington, Delaware, said. After the sale of the Debtor's inventory to Hilco Organization and Gordon Brothers Group, LLC, and the closing of its stores, the Debtor has determined that Canon owe it $240,000 on account of: (i) the unused portion of the payment advances prior to the Petition Date for Equipment that was shipped; (ii) product returns; or (iii) price protection, that is, amounts Canon agreed to reimburse the Debtor when it sold a particular piece of Equipment at a marked down price. Canon did not dispute the fact that it owe amounts on account of the Debtor Balances, but disputed the Debtor's assertion as to the amounts owed, claiming it owed significantly less, Mr. Strock said. After substantial negotiations, Canon has agreed to pay the Debtor $207,339 in full and final settlement of claims. About Sharper Image Corp. Headquartered in San Francisco, California, Sharper Image Corp. -- http://www.sharperimage.com/-- is a multi-channel specialty retailer. It operates in three principal selling channels: the Sharper Image specialty stores throughout the U.S., the Sharper Image catalog and the Internet. The company has operations in Australia, Brazil and Mexico. In addition, through its Brand Licensing Division, it is also licensing the Sharper Image brand to select third parties to allow them to sell Sharper Image branded products in other channels of distribution. The company filed for Chapter 11 protection on Feb. 19, 2008 (Bankr. D.D., Case No. 08-10322). Judge Kevin Gross presides over the case. Harvey R. Miller, Esq., Lori R. Fife, Esq., and Christopher J. Marcus, Esq., at Weil, Gotshal & Manges, LLP, serve as the Debtor's lead counsel. Steven K. Kortanek, Esq., and John H. Strock, Esq., at Womble, Carlyle, Sandridge & Rice, P.L.L.C., serve as the Debtor's local Delaware counsel. An Official Committee of Unsecured Creditors has been appointed in the case. Cooley Godward Kronish LLP is the Committee's lead bankruptcy counsel. Whiteford Taylor Preston LLC is the Committee's Delaware counsel. When the Debtor filed for bankruptcy, it listed total assets of $251,500,000 and total debts of $199,000,000. As of June 30, 2008, the Debtor listed $52,962,174 in total assets and $39,302,455 in total debts. The Court extended the exclusive period during which the Debtor may file a Plan through and including Sept. 16, 2008. Sharper Image sought and obtained the Court's approval to change its name to "TSIC, Inc." in relation to an an Asset Purchase Agreement by the Debtor with Gordon Brothers Retail Partners, LLC, GB Brands, LLC, Hilco Merchant Resources, LLC, and Hilco Consumer Capital, LLC. (Sharper Image Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) SERVE HOLDINGS: Court Okays Sale of 20 Captain D's Restaurants -------------------------------------------------------------- Andy Meek at The Memphis Daily News reports that the Hon. Paulette Delk of the U.S. Bankruptcy Court's West Tennessee Division has approved the sale of 20 Captain D's restaurants after the 2007 bankruptcy of the restaurant's previous owner, SERVE Holdings LLC. The Memphis Daily relates that Sonfish LLC has filed in February 2009 with the Court an offer to purchase the assets of SERVE Holdings. According to The Memphis Daily, Sonfish runs two Captain D's restaurants in Union City and Paris, Tennessee that SERVE closed. The Memphis Daily states that Sonfish had negotiated leases on 17 of the 20 restaurants, which include Captain D's restaurants in: -- Southaven, Mississippi; -- Blytheville, Jonesboro and West Memphis, Arkansas; and -- Dyersburg, Jackson, and Millington. The 20 restaurants also include 13 units in Memphis, says The Memphis Daily. According to The Memphis Daily, Sonfish offered $25,000 in exchange for rights and interests in SERVE's franchise agreements, furniture, fixtures, equipment, food and paper goods inventory, and books and records. The Memphis Daily reports that Judge Delk said, "Debtor . . . is ordered, authorized and directed to cooperate in good faith fully with Sonfish to facilitate, expedite, and consummate the sale pursuant to Sonfish's offer and this order and to provide a smooth transition for the operation by Sonfish of Captain D's franchise." SERVE Holdings LLC was formed in 2003 when its owners bought 20 Memphis-area Captain D's locations. The Company filed for Chapter 11 bankruptcy protection in December 2007. The bankruptcy petition is pending in the U.S. Bankruptcy Court's West Tennessee Division, where the bankruptcy is pending. SIX FLAGS: S&P Downgrades Corporate Credit Rating to 'CCC' ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on theme parks operator Six Flags Inc. to 'CCC' from 'CCC+'. The rating outlook is negative. At the same time, S&P revised the recovery rating on Six Flags Theme Parks Inc.'s senior secured credit facilities to '2', reflecting S&P's expectation of substantial (70% to 90%) recovery for lenders in the event of a payment default, from '1'. The issue-level rating on these facilities was lowered to 'CCC+' (one notch higher than the 'CCC' corporate credit rating on the company) from 'B', in accordance with S&P's notching criteria for a '2' recovery rating. In addition, S&P lowered the issue-level rating on Six Flags Operations Inc.'s senior unsecured debt to 'CCC-' (one notch lower than the 'CCC' corporate credit rating) from 'CCC'. The recovery rating on this debt remains at '5', indicating S&P's expectation of modest (10% to 30%) recovery in the event of a payment default. S&P also lowered Six Flags' senior unsecured debt to 'CC' (two notches lower than the 'CCC' corporate credit rating) from 'CCC-'. The recovery rating on this debt remains at '6', indicating S&P's expectation of negligible (0% to 10%) recovery in the event of a payment default. The 'C' rating on Six Flags' preferred stock was affirmed. "The ratings downgrade reflects our concerns that the company could seek a pre-packaged or prearranged Chapter 11 reorganization to reduce its high debt leverage and significant maturities over the near term," said Standard & Poor's credit analyst Andy Liu. "An out-of-court restructuring is also a possibility." Six Flags is required to redeem its preferred income equity redeemable shares for cash totaling $318.8 million, including accrued and unpaid dividends of $31.3 million, prior to their mandatory redemption date on Aug. 15, 2009. If the company is unable to refinance or restructure PIERS at or prior to the redemption date, it would constitute an event of default under the credit facility, permitting lenders to accelerate the obligations. Subsequent to an acceleration by bank lenders, this will cause other debt maturities to accelerate as well. The outstanding balance on the credit facility totaled about $1.1 billion as of Dec. 31, 2008, and nonbank debt totaled $1.0 billion. Based on the current state of the economy and the credit markets, S&P believes it is unlikely that Six Flags will be able to refinance the PIERS prior to their mandatory redemption date as well as the 2010 notes. The company is exploring various alternatives. Operating performance in 2008 was Six Flags' best in some time. For the year, revenues increased 5% and EBITDA increased 50% from increased paid attendance and higher per capita spending. The higher per capita spending was driven by increased rental, food and beverage, parking, admissions, retail, and sponsorship revenues. The EBITDA increase also benefited from expense reduction in marketing, third-party services, repair and maintenance, travel-related expenses, supplies, and seasonal labor. As a result, Six Flags was able to achieve a full-year EBITDA margin of 29.5%, its highest in five years. Its EBITDA margin in 2007 was 22.1%. Six Flags is highly leveraged. Lease-adjusted total debt to EBITDA for 2008 was 8.8x. Including PIERS as debt, the lease-adjusted debt leverage increases to about 9.7x. The company's lease- adjusted EBITDA interest coverage was 1.5x or 1.4x, including preferred dividends. In 2008, Six Flags was able to substantially reduce its discretionary cash flow deficits to about $33 million, from $110 million in 2006, due to a combination of revenue growth and cost and capital expenditure reductions. However, the company still does not have sufficient financial resources to address its 2009 maturities. SMOKE 05: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: Smoke 05 LLC 211 N. Buffalo Dr., Suite A Las Vegas, NV 89145 Bankruptcy Case No.: 09-13332 Type of Business: Smoke 05 LLC is a single-asset, real estate debtor. Chapter 11 Petition Date: March 11, 2009 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtor's Counsel: David J. Winterton, Esq. 211 N. Buffalo Dr., Suite A Las Vegas, NV 89145 Tel: (702) 363-0317 Email: david@davidwinterton.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nvb09-13332.pdf The petition was signed by Mivhael Gramly, manager of the company. SOUTHEAST BANKING: Court Confirms Trustee's Third Amended Plan -------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of Florida entered on March 13, 2009, an order confirming the third amended chapter 11 plan of reorganization for Southeast Banking Corporation. Jeffrey H. Beck, the Chapter 11 Trustee for the estate of Southeast Banking, filed the Third Amended Chapter 11 Plan February 9, 2009. The Plan proposes to rehabilitate SEBC and certain of its non- debtor subsidiaries by recapitalizing SEBC through an investment of $1.639 billion by Modena 2004-1 LLC, an indirect wholly owned subsidiary of Merrill Lynch & Co., Inc., and reorganizing SEBC into SEBC Financial Corporation, with a new holding company, SEBC Holdings, LP. SEBC Holdings will own 60% of the common stock of Reorganized SEBC and a new subsidiary, SEBC Real Estate, LLC, that will acquire and hold SEBC's real estate-owning subsidiaries. The equity investment would be utilized by Reorganized SEBC to purchase equity securities from a newly formed special purpose vehicle to be established on or after the Closing Date. A full-text copy of the Disclosure Statement explaining the Chapter 11 Trustee's Third Amended Plan for Southeast Banking Corp., dated Feb. 9, 2009, is available for free at: http://bankrupt.com/misc/SoutheastBankingDSThirdAmendedPlan.pdf As provided in the Plan, upon the occurrence of the Effective Date Reorganized SEBC will file and publish a separate Notice setting forth that the Transaction has closed and the Effective Date has occurred. About Southeast Banking Southeast Banking Corp. was the holding company of Southeast Bank, N.A., and its sister institution, Southeast Bank of West Florida, and the direct or indirect parent of a number of subsidiary corporations and affiliates, active and inactive, which at various times conducted substantial business throughout the State of Florida and beyond. The businesses of SEBC and its affiliates consisted of banking, real estate investment and development, insurance, mortgage banking, venture capital, and asset investment. At the time of their failure the Banks had total assets of $10.5 billion and total deposits of $7.6 billion. Most of the assets were with SEBNA, which had 218 of the combined 224 branches and all but $100 million of the assets. Together, the two banks had approximately 6,200 employees, operating exclusively in Florida. On Sept. 20, 1991, Southeast Bank filed a voluntary petition under Chapter 7 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 91-14561). Southeast Bank, N.A., was seized by federal regulators while Southeast Bank of West Florida was seized by state regulators on Sept. 19, 1991. On Sept. 20, 1991, SEBC's board of directors voted to authorize the filing of a voluntary Chapter 7 petition, and then promptly resigned along with all of SEBC's officers. Jeffrey H. Beck was the fourth trustee appointed in the Debtor's liquidation proceeding. This Bankruptcy Case was converted to Chapter 11 on Sept. 17, 2007, almost sixteen years after its initial filing. SPECTRUM BRANDS: Equity Panel Taps Allen & Co. as Bankers --------------------------------------------------------- The Official Committee of Equity Security Holders for Spectrum Brands, Inc., has Allen & Company to be its investment banking firm and financial advisor, assisting in representing the interests of Spectrum Brands' common shareholders in the Chapter 11 cases filed by Spectrum Brands, Inc. The proposed engagement will be led by Allen & Company Managing Directors Enrique Senior and Leroy Kim. The Committee's selection of Allen & Company is subject to the signing of an engagement letter, an application to approve the retention of Allen & Company to the Bankruptcy Court, and the Bankruptcy Court order approving that retention. As reported by the Troubled Company Reporter, Mittleman Brothers, one of the equity committee members, disclosed on February 23, 2009, in a Schedule 13D filed with the Securities and Exchange Commission that it is deemed to beneficially own 2,655,652 shares of Spectrum Brands common stock, or 5.03% equity stake in the company. Mr. Mittleman, on February 20, sent a letter dated February 23, 2009, to the members of the Board of Directors of Spectrum Brands expressing concerns over the current management of the Debtors in connection with the Debtors' First Proposed Joint Plan of Reorganization filed on February 3, 2009. Particularly, the February 23rd Letter outlines Mittleman Brothers' belief that the Debtors' management and board of directors have engaged in, and are continuing to pursue, courses of action that are in breach of their fiduciary duties to the Debtors' shareholders, and that have resulted in, and are continuing to inflict, material harm to the shareholders. Mittleman Brothers demanded the immediate withdrawal of the Plan. Mittleman Brothers has also demanded that the Debtors fully support the appointment of an official committee of equity security holders that would negotiate a new, fair and equitable plan of reorganization that adequately compensates existing shareholders. Among other things, Mittleman Brothers noted in its letter that the Plan proposes that existing senior subordinated noteholders will exchange $1.09 billion face value in notes, and receive in return $218 million in new notes, and 100% of Spectrum's equity. The Plan projects the company -- after the reorganization -- will generate $125 million in free cash flow for fiscal year ending September 30, 2010. According to Mittleman Brothers, at a low multiple of only 10x free cash flow, there would be $1.25 billion of equity value to cover the $872 million in face value that the Noteholders would exchange. Adding the $218 million in new bonds that the Noteholders would also receive to the conservatively appraised equity value of $1.25 billion, means that Noteholders would be receiving $1.468 billion under the Plan, or $378 million more than the $1.09 billion face value of the bonds they now own. Mittleman Brothers said the $378 million of excess compensation to Spectrum's Noteholders under the Plan rightly belongs to the existing shareholders. In other words, even if 30% of the post- Plan equity was granted to existing shareholders, the Noteholders would still receive par value for their bonds with their remaining 70% of the equity. That $378 million in excess equity value equates to $7.16 per share to existing shareholders, roughly where the stock was valued as recently as June 2007, when Spectrum's near-term prospects were much less favorable. "This exercise ignores the likely substantial net present value of the net operating loss carry-forwards that Spectrum projects should total $1.25 billion for U.S. Federal taxes and $2.1 billion for state taxes as of September 30, 2009. That these NOLs represent significant potential value is underscored by Spectrum's recent efforts to preserve them, in a motion made to the Bankruptcy Court and granted on an interim basis on Feb. 6, 2009, which may allow Spectrum to limit certain shareholders from achieving a 5% ownership threshold," the letter said. A full-text copy of the February 23rd Letter is available at no charge at: http://researcharchives.com/t/s?3a38 About Spectrum Brands Based in Cibolo, Texas, Spectrum Brands, Inc. -- http://www.spectrumbrands.com/-- supplies consumer batteries, lawn and garden care products, specialty pet supplies, shaving and grooming products, household insect control products, personal care products, and portable lighting. Spectrum Brands' business is operated in three reportable segments: (a) Global Batteries and Personal Car; (b) Global Pet Supplies; and (c) Home and Garden. Spectrum Brands has roughly 5,960 employees worldwide, with about 2,700 of those employees working within the United States. In addition, Spectrum Brands holds a 50% interest in a domestic entity; minority interests (less than 25% each) in a domestic entity and a foreign entity; a limited partnership interest in a foreign entity; and a 100% interest in a foreign trust. Spectrum Brands, Inc. and 13 subsidiaries filed separate Chapter 11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead Case No. 09-50455). The Hon. Ronald B. King presides over the cases. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr., Esq., at Vinson & Elkins LLP, in Houston, Texas; and William B. Kingman, Esq., in San Antonio, serve as the Debtors' counsel. Sutherland Asbill & Brennan LLP acts as special counsel; Perella Weinberg Partners LP, as financial advisor; Deloitte Tax LLP as tax consultant; and Logan & Company Inc. as claims and noticing agent. As of September 30, 2008, Spectrum Brands had $2,247,479,000 in total assets and $3,274,717,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Spectrum Brands Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Spectrum Brands Inc. and its various subsidiaries. (http://bankrupt.com/newsstand/or 215/945-7000) STAR TRIBUNE: Workers Okay Concessionary Pact With Firm ------------------------------------------------------- The Associated Press reports that 116 pressmen at the Star Tribune have accepted a concessionary contract that includes layoffs and pay cuts. The AP relates that the terms include wage reductions, 24 layoffs, and reduced manning requirements on Star Tribune's presses. According to The AP, the contract will save Star Tribune about $3.5 million a year. The contract, says The AP, is the second approved this week. The report states that the Teamsters local for Star Tribune's mailers approved a new contract over the weekend. Star Tribune will seek deals with its delivery truck drivers and newsroom staff, The AP relates. Star Tribune seeks to cut labor costs by $20 million a year from among its 800 union workers, says the report. About Star Tribune Headquartered in Minneapolis, Minnesota, The Star Tribune Company -- http://www.startribune.com-- operate the largest newspaper in the U.S. state of Minnesota and published seven days each week in an edition for the Minneapolis-Saint Paul metropolitan area. The company and its affiliate, Star Tribune Holdings Corporation, filed for Chapter 11 protection on January 15, 2009 (Bankr. S.D. N.Y. Lead Case No. 09-10245). Marshall Scott Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. The Debtors proposed Blackstone Group LP as their financial advisor; and Curtis, Mallet-Prevost, Colt & Mosle LLP as conflict counsel; and Garden City Group Inc. as claims agent. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million to $500 million each. STERLING MINING: Sec. 341(a) Meeting Scheduled for April 8 ---------------------------------------------------------- Robert D. Miller Jr., Acting United States Trustee for Region 18, will convene a meeting of Sterling Mining Company's creditors on April 8, 2009, at 9:00 a.m., at the U.S. Bankruptcy Court for the District of Idaho, at 6450 N. Mineral Drive, in Coeur d Alene, Idaho. 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 Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Sterling Mining Based in Coeur d'Alene, Idaho, Sterling Mining Company (OTCBB:SRLM and FSE:SMX) -- http://www.SterlingMining.com/-- is a mineral resource development and exploration company. The company has a long term lease on the Sunshine Mine in North Idaho's Coeur d'Alene Mining District. The Sunshine Mine is comprised of 5,930 patented and unpatented acres, and historically produced over 360 million ounces of silver from 1884 until its closure in early 2001. Sterling Mining leased the Sunshine mine in June 2003, along with a mill, extensive mining infrastructure and equipment, a large land package, and a database encompassing a long history of exploration, development and production. As of September 30, 2008, Sterling Mining had $31.9 million in total assets, and $13.2 million in total current liabilities and $1.6 million in total long-term liabilities. Sterling Mining filed for bankruptcy protection on March 3, 2009 (Bankr. D. Idaho Case No. 09-20178). Bruce A. Anderson, Esq., at Elsaesser Jarzabek Anderson Marks & Elliott in Coeur d'Alene, as bankruptcy counsel. STERLING MINING: Files Schedules of Assets and Liabilities ---------------------------------------------------------- Sterling Mining Company filed with the U.S. Bankruptcy Court for the District of Idaho, its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $8,472,625 B. Personal Property $3,234,136 C. Property Claimed as Exempt D. Creditors Holding $7,790,007 Secured Claims E. Creditors Holding $107,233 Unsecured Priority Claims F. Creditors Holding $6,261,769 Unsecured Non-priority Claims ----------- ----------- TOTAL $11,706,761 $14,159,010 About Sterling Mining Based in Coeur d'Alene, Idaho, Sterling Mining Company (OTCBB:SRLM and FSE:SMX) -- http://www.SterlingMining.com/-- is a mineral resource development and exploration company. The company has a long term lease on the Sunshine Mine in North Idaho's Coeur d'Alene Mining District. The Sunshine Mine is comprised of 5,930 patented and unpatented acres, and historically produced over 360 million ounces of silver from 1884 until its closure in early 2001. Sterling Mining leased the Sunshine mine in June 2003, along with a mill, extensive mining infrastructure and equipment, a large land package, and a database encompassing a long history of exploration, development and production. As of September 30, 2008, Sterling Mining had $31.9 million in total assets, and $13.2 million in total current liabilities and $1.6 million in total long-term liabilities. Sterling Mining filed for bankruptcy protection on March 3, 2009 (Bankr. D. Idaho Case No. 09-20178). Bruce A. Anderson, Esq., at Elsaesser Jarzabek Anderson Marks & Elliott in Coeur d'Alene, as bankruptcy counsel. STEVEN NOBLE: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Steve T. Noble 103 Remsen St. Cohoes, NY 12047 Bankruptcy Case No.: 09-10834 Chapter 11 Petition Date: March 16, 2009 Court: United States Bankruptcy Court Northern District of New York (Albany) Judge: Robert E. Littlefield, Jr. Debtor's Counsel: David Brickman, Esq. David Brickman PC 1664 Western Ave. Albany, NY 12203 Tel: (518) 464-6464 Total Assets: $2,034,200 Total Debts: $1,116,236 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nynb09-10834.pdf STUART PROPERTY: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Stuart Property, LLC 11215 Stuart Mill Road Oakton, VA 22124-1104 Bankruptcy Case No.: 09-11907 Chapter 11 Petition Date: March 16, 2009 Court: United States Bankruptcy Court Eastern District of Virginia (Alexandria) Judge: Robert G. Mayer Debtor's Counsel: Christopher S. Moffitt, Esq. 218 North Lee St., 3rd Floor Alexandria, VA 22314-2631 Tel: (703)683-0075 Fax: (425)952-8213 Email: csm@moffittlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Bonnie Horner, sole member of the company. The Debtor did not file a list of 20 largest unsecured creditors together with its petition. TALLYGENICOM LP: U.S. Court OKs Sale; German Liquidator Appeals --------------------------------------------------------------- According to Bloomberg's Bill Rochelle, the U.S. Bankruptcy Court for the District of Delaware (Wilmington) has approved the sale of TallyGenicom L.P.'s business to Printronix Inc. for $36.6 million, including the assumption of $23 million in secured debt, $6.75 million in warranty claims and $4 million in accounts payable. The German liquidator for affiliate TallyGenicom A.G. took an appeal of the sale order, disputing the right of the U.S. side of the company to sell some of the property. The liquidator wants the sale stayed pending the appeal. The lender providing the Debtor with debtor-in-possession financing required a quick sale and agreed not to bid for the assets using its claim rather than cash. No competing bids were made against Printronix, and, as a result, the scheduled auction was cancelled, and the Court approved the sale. About TallyGenicom Headquartered in Chantilly, Virginia, TallyGenicom L.P. aka Datacom Manufacturing LP -- http://www.tallygenicom.com-- provide an array of business and industrial imaging devices and printer parts. The company and two of its affiliates filed for Chapter 11 protection on January 27, 2009 (Bankr. D. Del. Lead Case No. 09- 10266). Ann C. Cordo, Esq., and Gregory Thomas Donilon, Esq., at Morris Nichols Arsht & Tunnell LLP, represent the Debtors in their restructuring efforts. The Debtors propose Proskauer Rose LLP as their special corporate counsel; CRG Partners Group LLC as financial advisor; and Donlin Recano & Company Inc. as their claims agent. Suzzanne Uhland, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., represent Printronix Inc., the stalking horse bidder. Randall L. Klein, Esq., at Goldberg Kohn Bell Black Rosenbloom & Moritz, Ltd., and Steven K. Kortanek, Esq., at Womble Carlyle Sandridge & Rice, PLLC, represent Dymas Funding Company LLC, agent to Printronix' lenders. When the Debtors filed for protection from their creditors, they listed assets and debts between $10 million to $50 million each. TALLYGENICOM AG: Voluntary Chapter 15 Case Summary -------------------------------------------------- Chapter 15 Petitioner: Michale Pluta Preliminary Insolvency Administrator and putative foreign representative of TallyGenicom AG under Germany's Insolvenzordnung Insolvency Act pending before the Amtsgericht, the Local Court of Ulm. Chapter 15 Debtor: TallyGenicom AG Heuweg 3, 89079 Ulm, Germany Chapter 15 Case No.: 09-12253 Type of Business: The Debtor is a wholly owned subsidiary of TallyGenicom Holdings LLC, which is now a debt in a proceeding under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy of Delaware Case No. 09-10266. Chapter 15 Petition Date: March 19, 2009 Court: District of Massachusetts (Boston) Judge: William C. Hillman Chapter 15 Petitioner's Counsel: Steven T. Hoort, Esq. Steven.Hoort@ropesgray.com Ropes & Gray One International Place Boston, MA 02110-2624 Tel: (617) 951-7000 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million TARRAGON CORPORATION: Court Sets May 4 General Claims Bar Date -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey has fixed May 4, 2009, at 5:00 p.m. (Prevailing Eastern Time) for all creditors holding prepetition claims against Tarragon Corporation, et al., to file proofs of claim in the Debtors' bankruptcy cases. Governmental units have until July 12, 2009, at 5:00 p.m. (Prevailing Eastern Time) to file proofs of claim. Proofs of claim must be delivered on or before the applicable bar dates to: Kurtzman Carson Consultants, LLC Attention: Tarragon Claims Processing 2335 Alaska Avenue, El Segundo California 90245 Tel: (866) 381-9100 For additional information, please contact Debtors' counsel at this address: Cole, Schotz, Meisel, Forman & Leonard, P.A. Counsel for Tarragon Corporation, et al. Court Plaza North, 25 Main Street P.O. Box 800 Hackensack, New Jersey 07602-0800 (Attention: Frances Pisano, Paralegal) Tel: (201) 525-6351 About Tarragon Corporation Based in New York City, Tarragon Corporation (NasdaqGS:TARR) -- http://www.tarragoncorp.com/-- is a leading developer of multifamily housing for rent and for sale. Tarragon's operations are concentrated in the Northeast, Florida, Texas, and Tennessee. Tarragon and its affiliates filed for Chapter 11 protection on January 12, 2009 (Bankr. D. N.J. Case No. 09-10555). The Hon. Donald H. Steckroth presides over the case. Michael D. Sirota, Esq., Warren A. Usatine, Esq., and Felice R. Yudkin, Esq., at Cole Schotz Meisel Forman & Leonard, P.A., represent the Debtor as bankruptcy counsel. Kurztman Carson Consultants LLC serves as notice and claims agent. As of Sept. 30, 2008, the Debtors had $840,688,000 in total assets and $1,035,582,000 in total debts. TONY CHARONDO: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Tony M. Charondo Gloria Charondo fdba T.C. Classic Granite and Marble, Inc. dba The Tracy Design Center, Inc. dba T.C. Construction and Design, Inc. 47 W 6th St. Tracy, CA 95376 Tel: (209) 835-2470 Fax: (209) 836-1420 Bankruptcy Case No.: 09-24331 Chapter 11 Petition Date: March 13, 2009 Court: United States Bankruptcy Court Eastern District of California (Sacramento) Judge: Robert S. Bardwil Company Description: The debtor is a general building contractor. See: http://www.tcconstruction.com/ Debtor's Counsel: David C. Johnston, Esq. 1014 16th St. Modesto, CA 95353 Tel: (209) 521-6260 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of 20 largest unsecured creditors together with its petition. TRUCK ACQUISITION: Case Summary & 10 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Truck Acquisition Funding, LLC 3700 34th Street, Suite 120 Orlando, FL 32805 Bankruptcy Case No.: 09-02889 Chapter 11 Petition Date: March 11, 2009 Court: Middle District of Florida (Orlando) Debtor's Counsel: David R. McFarlin, Esq. dmcfarlin@whmh.com Wolff, Hill, McFarlin & Herron, P.A 1851 West Colonial Drive Orlando, FL 32804 Tel: (407) 648-0058 Fax: (407) 648-0681 Estimated Assets: $1 million to $10 million Estimated Debts: $10 million to $50 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wachovia Bank loan $1,446,224 301 S Tryon St 29th Floor Charlotte, NC 28288 Regions Bank loan guaranty $1,134,196 PO Box 2545 Birmingham, AL 35202 Dealer Services Corporation loan guaranty $1,114,202 1320 City Center Drive Suite 100 Carmel, IN 46032 Carolina First Bank loan guaranty $588,146 PO Box 1029 Greenville, SC 29602 Suntrust Bank loan guaranty $249,303 RBC loan $249,162 American Community Bank loan guaranty $182,642 Orange Bank loan $158,977 Washington Mutual business debt $31,664 First Equity Card Corp business debt $5,123 The petition was signed by Blake Bolin, manager. TRUE TEMPER: Failure to Pay Facility Cues S&P's 'D' Rating ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Memphis, Tennessee-based True Temper Sports Inc., a leading manufacturer of golf shafts, to 'D' from 'CCC'. At the same time, S&P lowered the rating on the company's $110 million senior secured revolving credit facility to 'D' from 'B-'. In addition, S&P lowered the rating on the company's $125 million 8.375% senior subordinated notes due 2011 to 'D' from 'CC'. Currently, the recovery rating on the bank facility is a '1" and the recovery rating on the subordinated notes is a '6'. The downgrades are based on the company's failure to pay its March 16, 2009, principal payment of $20 million due on the revolving credit facility. True Temper Sports' failure to make the scheduled principal payment is an event of default under the first lien agreement, which allows the lenders to immediately accelerate the repayment of all amounts borrowed under the first lien agreement along with accrued and unpaid interest. As of March 16, 2009, the principal amount outstanding was $101.7 million under the facility. Also, on March 16, 2009, the company did not pay interest due on its 8.375% senior subordinated notes. The failure to pay interest, if continued for 30 days, will constitute an event of default under the indenture, which will then give the holders the right to accelerate payment of the notes together with accrued and unpaid interest. As of March 16, 2009, the principal amount of notes outstanding was $125 million. Furthermore, if the non- payment of principal under the first lien agreement continues for 90 days after notice or if the maturity of principal of the first lien agreement is accelerated, it will then constitute an event of default under the second lien agreement (unrated) giving the lenders under the second lien agreement the right to accelerate repayment of principal and unpaid interest. As of March 16, 2009, there was $45 million borrowed under the second lien agreement. The company has retained Lazard Middle Market to assist it in exploring alternatives to True Temper Sports' capital structure. The company is currently in ongoing discussions with its lenders under the senior credit facility and first lien agreement to extend the maturity of the facility. To date, none of the lenders under the first or second lien agreements or any of the holders of the notes have accelerated the payment of principal or interest. If True Temper Sports can make the interest payment during the 30- day grace period, S&P would review the rating on that issue. Standard & Poor's will continue to monitor the situation and provide updates as additional information becomes available. TRUMP ENTERTAINMENT: D. Trump Blocks Atty. Fees for Noteholders --------------------------------------------------------------- Donald Trump previously threatened to resign as chairman of the board of Trump Entertainment Resorts Inc. after noteholders conveyed plans to send the Company to bankruptcy after their forbearance agreement expires. To defeat an involuntary petition, Trump Entertainment filed for Chapter 11 and has proposed to use the cash collateral of holders of 8.5% senior subordinated secured notes due 2015. The noteholders have agreed to Trump Entertainment's use the cash, subject to adequate protection, which includes payment of the noteholders' professional fees. Trump Entertainment owes $1,250,000,000 in principal amount of the notes, which are secured by second mortgages on the Debtors' real property, certain intellectual property rights, and related personal property. Trump Entertainment already owes $488,757,000 to lenders under a senior secured credit facility, secured by a first priority security interest in and lien on substantially all of the assets of the Debtors. The 2007 Credit Facility is senior in priority to the Subordinated Notes. Mr. Trump filed an objection to the terms of the cash collateral use, asserting that the noteholders are not entitled to attorneys' fees because they are unsecured or undersecured, i.e., their claims exceed the value of the collateral. The ad hoc group of holders of the Subordinated Notes has the burden, according to Mr. Trump, to show that the value of its collateral -- which is limited to certain real property, intellectual property, and personal property -- exceeds Beal Bank's $488,800,000 senior priority obligations by another $1.2 billion. "This burden concededly cannot be met," says Donald K. Ludman, Esq., at Brown & Connery, LLP, in Woodbury, New Jersey, attorney to Mr. Trump. "As undersecured creditors, the Noteholders cannot receive adequate protection. The Noteholders Group, according to Bloomberg's Bill Rochelle, countered that the Company could use its business judgment to pay secured lenders' fees when bankruptcy law doesn't otherwise permit. Mr. Rochelle said that Mr. Trump took round one with the noteholders after the U.S. Bankruptcy Court for the District of New Jersey ruled that the payments wouldn't be allowed. 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. UNIQUE PREMIUM METALS: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Unique Premium Metals, Inc. 640 S Hill Street #743 Los Angeles, CA 90014 Tel: (213) 622-9995 Bankruptcy Case No.: 09-15849 Chapter 11 Petition Date: March 16, 2009 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Barry Russell Company Description: The company operates a jewelry store. Debtor's Counsel: Sandford Frey, Esq. 633 W. Fifth St., 51st Floor Los Angeles, CA 90071 Tel: (213) 614-1944 Email: Sfrey@cmkllp.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Laurette Colton, secretary of the company. A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-15849.pdf VICTORIA SPROUSE: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Victoria Leigh Sprouse aka Victoria L. Sprouse aka Vicki Sprouse 13130 Whisper Creek Drive Charlotte, NC 28277 Bankruptcy Case No.: 09-50535 Chapter 11 Petition Date: March 16, 2009 Court: United States Bankruptcy Court Middle District of North Carolina (Winston-Salem) Debtor's Counsel: Rayford K. Adams, III, Esq. 101 W. Friendly Ave. Greensboro, NC 27420 Tel: (336) 273-1600 Email: RKAdams@greensborolaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ncmb09-50535.pdf WAVERLY GARDENS: Can Use Lender's Cash Collateral Until June 15 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Tennessee has approved the stipulation of First Tennessee Bank National Association and Debtors Waverly Gardens of Memphis, LLC, and Kirby Oaks Integra, agreeing to the the Debtors' use of Cash Collateral for the limited purpose of satisfying the expenses listed in a cash expenditure budget for the period from February 15, 2009, and June 15, 2009. First Tennessee says that it is owed $8,494,044 by the Debtors. As security, the Debtors conveyed to First Tennessee a security interest in substantially of their assets, including Cash Collateral. As adequate protection, First Tennessee is granted a postpetition security interest in (a) all proceeds from the disposition of any of the Cash Collateral, and (b) any and all of the Debtors' goods, property, assets and interests in property now existing and hereafter acquired. As additional adequate protection, First Tennessee is granted an allowed superpriority administrative claim pursuant to Sec. 507(b) of the Bankruptcy Code. Debtors shall also make adequate protection payments to First Tennessee as follows: $20,000 on February 15, 2009; $20,000 on March 15, 2009; $25,000 on April 15, 2009, $25,000 on May 15, 2009; and $35,000 on June 15, 2009. About Waverly Garden Memphis, Tennessee-based Waverly Gardens of Memphis, LLC -- http://www.waverlygardens.com/-- owns and operates an independent living facility comprised of 19 interconnected single story modular structures on an 11.5 acre site. Kirby Oaks Integra, LLC, dba. Waverly Glen, owns and operates a 52 unit assisted living facility, with Alzeheimer's unit. The Debtors filed separate petitions for Chapter 11 relief on Oct. 2, 2008 (Bankr. W.D. Tenn. Lead Case No. 08-30218). Michael P. Coury, Esq., at Farris Bobango Branan PLC, represents the Debtors as counsel. When Waverly Gardens filed for protection from its creditors, it listed assets of between $10 million to $50 million, and debts of $1 million to $10 million. When Waverly Glen filed for protection from its creditors, it listed assets and debts of between $1 million and $10 million each. WISE METALS: S&P Changes Outlook to Negative; Keeps 'CCC' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlook on Wise Metals Group LLC to negative from developing. At the same time, Standard & Poor's affirmed its 'CCC' corporate credit rating. "The outlook revision reflects our increased concern regarding Wise Metal's thin liquidity position given our expectation that the company's operating performance will remain challenged in the near term due to weak economic conditions resulting in lower end- market demand," said Standard & Poor's credit analyst Maurice Austin. Currently, the company only has about $15 million available on a maximum borrowing base availability of about $175 million. In addition, during the fourth quarter of 2008, Wise received $72 million in loans from the combination of a major shareholder and a new lender to help bolster near-term liquidity. Also, heightened risk exists around Wise's near-term refinancing needs related to the company's $300 million credit facility, which matures in May 2010. The company faces this near-term refinancing at a time when the capital markets remain difficult and S&P expects credit measures to weaken significantly from current levels. The 'CCC' ratings reflect Wise's participation in a mature and consolidated industry, limited operating diversity, customer concentration risk, negative operating margins, thin liquidity, and aggressive financial leverage. Wise participates in the mature and consolidated aluminum beverage-can industry through the manufacturing of aluminum sheets from a single facility, which exposes it to both planned and unplanned maintenance downtime. Wise competes against substantially larger and financially stronger rivals, such as Alcoa Inc. and Novelis Inc. As a result, these competitors can cause Wise to lower prices, lose margins, or lose market share. Despite the consolidated nature of the beverage-can sheet industry, producers have had a difficult time passing through cost increases and raising aluminum prices because the customer base is also consolidated, with only four North American can manufacturers. The customers' significant purchasing power, results in low- to-negative operating margins for Wise. In addition, customer concentration concerns exist for Wise Metal's largest customer, Ball Corp., which totaled about 37% of 2008 sales. The negative outlook reflects S&P's concern that Wise will be unable to obtain additional financing to bolster liquidity during this challenging period given the difficult capital markets. S&P could lower the ratings if the economy worsens, leading to weaker end-market demand, creating conditions for lower EBITDA and lack of positive free cash flow generation. S&P could also lower the rating as the credit facility maturity date approaches if S&P becomes concerned that lenders may accelerate payment. S&P may consider a stable outlook or a higher rating if the company's operating performance improves at a sustainable level, improving its liquidity position and enabling it to successfully negotiate an extension to its credit facility maturity date. WOOD TREATERS: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Wood Treaters, LLC 2610 Fairfax Street Jacksonville, FL 32203-1604 Tel: (800) 330-7283 Fax: (904) 354-7123 Bankruptcy Case No.: 09-01895 Chapter 11 Petition Date: March 16, 2009 Court: United States Bankruptcy Court Middle District of Florida (Jacksonville) Company Description: Wood Treaters, LLC, is in the business of wood preserving. We supply pressure treated wood products, poles, piling, timbers and other specialty products to companies throughout the United States. See: http://www.woodtreaters.com/index.asp Debtor's Counsel: Nina M. LaFleur, Esq. P.O. Box 861128 St. Augustine, FL 32086-1128 Tel: (904) 797-7995 Fax: (904) 797-7996 Email: nina@lafleurlaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Stan W. Hill, CEO of the company. The Debtor did not file a list of 20 largest unsecured creditors together with its petition. * Moody's Sees High Refunding Risks for $300 Bil. in Corp. Bonds ---------------------------------------------------------------- Refunding risk for the $300 billion of investment-grade non- financial corporate bonds that will mature during the next three years is elevated at a time of tight credit markets and weak economic conditions, according to a new study from Moody's Investors Service. The study of 330 investment-grade non-financial corporate issuers in the U.S. with debt maturing between 2009 and 2011 indicates that credit ratings have migrated downward during the last year. About $100 billion of the $300 billion of maturing debt is rated Baa2 or Baa3, the lowest investment-grade ratings. Of the $10 billion of Baa3-rated bonds maturing in 2009, 28% have either a negative outlook or are under review for a possible ratings downgrade. "Investment-grade companies have comparatively strong credit profiles, with more than half of the bonds maturing over the next three years rated single-A or higher," said Kevin Cassidy, VP- Senior Credit Officer at Moody's. "Still, the overall deterioration of ratings over the last year increases the refinancing risk." The broad financial crisis is elevating refunding risk for most companies. However, many investment-grade issuers are benefiting from investors' relative confidence in companies with higher credit quality, reduced appetite for other forms of investment and need to continue deploying capital. This is reflected in a more than 150% increase in investment-grade non-financial corporate bond issuance during the first two months of 2009 versus the same period in 2008. "Investment-grade issuers have an advantage in these tight credit markets. But considering current conditions, we still consider refunding risk as relatively high for the $99 billion of maturities in 2009," Mr. Cassidy said. The global recession is also taking a toll on many investment- grade companies, causing profitability and operating cash flow to deteriorate. This may result in an increase in covenant violations, Mr. Cassidy said. "In contrast with the trend for many speculative-grade issuers, we believe that most investment-grade companies should be able to amend their credit facilities, although the cost may be substantial," the analyst noted. Moody's study is its first to examine the refunding risk and needs of investment-grade issuers. The study includes a listing of all debt maturities and putable obligations for U.S. non-financial companies during the next three years -- Moody's latest effort to facilitate greater transparency in intrinsic liquidity analysis at a time of challenging credit market conditions that can constrain access to financing for even investment-grade issuers. Moody's recently published the 11th annual edition of its study for speculative-grade companies. That study found $190 billion of U.S. speculative-grade corporate debt obligations maturing during the same 2009-2011 period. The full report, titled, "Refunding Risk and Needs for U.S. Investment-Grade Corporate Bond Issuers, 2009-2011," is available at http://www.moodys.com/ * Nearly 15% of Hedge Funds Closed in 2008, Report Says ------------------------------------------------------- Hedge fund industry consolidation continued through the end of 2008, with a record number of hedge funds liquidating in the fourth quarter, according to data released by Hedge Fund Research, Inc. (HFR), in Chicago, Illinois. Reflecting record investor withdrawals of over $150 billion in Q4, 778 funds liquidated during the period, more than doubling the previous quarterly record of 344, set just one quarter earlier in 3Q08. The total number of liquidations in 2008 was 1,471, an increase of over 70 percent from the previous full year record of 848 liquidations set in 2005. The fourth quarter also saw a sharp drop in the number of new funds launched, with only 56 launches for the quarter versus 117 funds launches in 3Q08, although 659 funds launched over the calendar year. The launch total for the full year was the lowest since 2000, when 328 funds launched. A full analysis of 2008 hedge fund launches and liquidations is included in the HFR Market Microstructure Industry Report: Year End 2008. Among other topics of note: -- 2008 was a record year for performance dispersion across the hedge fund industry, with nearly 100 percentage points separating the top decile of performers from the bottom decile; -- Despite substantial transition across the brokerage industry, the top three prime brokerage firms continue to control more than 62 percent of all industry capital; -- More than 275 Funds of Hedge Funds were liquidated in 2008, also a record; -- On a net basis, the total number of hedge funds declined by about eight percent in 2008, to 9,284. "After years of steady growth, 2008 was a record year for hedge fund liquidations, reflecting in part the transitions occurring across many aspects of the overall financial industry, as well as the substantial performance dispersion between hedge funds," said Kenneth J. Heinz, president of Hedge Fund Research. "As the industry evolves to suit investor demand, trends in strategy preferences, service providers, disclosure and transparency are likely to shape the industry landscape for the foreseeable future." About HFR HFR Group L.L.C., founded in 1993, is a global leader in the provision of hedge fund data, research, indexation and asset management. The HFR Group of companies includes Hedge Fund Research, Inc., and HFR Asset Management L.L.C. Hedge Fund Research produces the HFR Database, considered to be the definitive source of hedge fund performance and information. HFR also distributes the HFRI and HFRX Indices -- the premier benchmarks for hedge fund industry performance. * Casinos Still Generating Interest from Buyers Despite Crisis -------------------------------------------------------------- While retailers like Circuit City Stores, Inc., and Linens 'n Things, Inc., have failed to find buyers, thus ended up conducting going-out-of-business sales, struggling casinos in Atlantic City, New Jersey; Las Vegas, Nevada, and Detroit, Michigan, have generated interest from bidders, signaling that the gaming industry may survive the current economic crisis. According to various reports, Carl Icahn and other secured lenders have conveyed their intent to bid for the casino in Atlantic City, New Jersey, of Tropicana Entertainment LLC, which has been under bankruptcy protection since May 2008. MGM Mirage and Greektown Casino are entertaining offers for their casinos in Detroit. According to the Detroit Free Press, gaming experts say the two casinos are both attractive properties, given that Detroit is a stable market. MGM Grand Detroit, the report notes, has consistently grabbed the highest revenues in Detroit and ranked fifth in profitability measures among MGM Mirage's casinos in the third quarter of 2008. Steve Rittvo, a gaming expert at the Colorado-based Innovation Group, said that Greektown would attract someone looking to take on a project, given its bankruptcy issues. Greektown, which has been in bankruptcy protection since last year, has been required by its debtor-in- possession lenders to close a sale of its casino by July 1, or in the alternative, file a stand-alone restructuring plan by that time. Station Casinos, which has 17 hotel/casinos in Las Vegas, is not yet in bankruptcy but is preparing a restructuring plan and is soliciting support from creditors in order to have a quick Chapter 11 case. Casino operator Boyd Gaming Corp., however, has already conveyed an interest to purchase key assets of Station Casinos. Herbst Gaming, which operates slot machines and has 16 casinos, said that it has reached agreement with holders of 68% of the $847 million senior credit facility on a restructuring to be carried out through a Chapter 11 plan under which bank lenders will take control of the casinos. The Company's casino and slot route business will be separated into two holding companies. The plan provides that the Herbst family will receive 90% of the new equity in the new slot route company in exchange for the contribution of a new gaming device license agreement. The restructuring plan also provides for conversion of all the company's outstanding obligations under its Senior Credit Facility (currently approximately $847 million plus accrued and unpaid interest) into debt and equity of the reorganized companies, with the bank lenders receiving 100% of the new equity of the reorganized casino company and the reorganized casino company owning 10% of the new equity in the new slot route business. Casinos and the gaming industry have been affected by the present crisis. Moody's have identified a number of casino operators in its Bottom Rung report, a list of 283 companies with high default risk and weak liquidity. The list includes 155 East Tropicana, LLC, which owns the Hooters Casino Hotel located in Las Vegas, Nevada, which has 'Ca' family rating from Moody's. So are Station Casinos, Inc. (Ca), Buffalo Thunder Development Authority (Caa3), CCM Merger, Inc. (Caa1), Centaur, LLC (Caa3). A copy of the Bottom Rung report is available at: http://bankrupt.com/misc/Bottom_Rung_Report.pdf * Andrew DeNatale Rejoins Stroock's Financial Restructuring Group ----------------------------------------------------------------- Andrew P. DeNatale has rejoined Stroock & Stroock & Lavan LLP's Financial Restructuring Practice Group as Partner and Head of the Special Situations Lending Group effective immediately. Mr. DeNatale was the former Co-Head of White & Case's Financial Restructuring & Insolvency Group. Mr. DeNatale worked at Stroock from 1980 through 1991 and was promoted to Partner in 1984. "We are delighted to welcome Andrew back to Stroock," said Lewis Kruger, Co-Chair of Stroock's Financial Restructuring Practice. "Andrew and I worked together representing creditors and creditors' committees and got great results for creditors in a number of tough cases including the massive Southmark Corporation restructuring." Kris Hansen, Co-Chair of Stroock's Financial Restructuring Practice, added, "As Head of the Special Situations Lending Group, Andrew will focus on restructuring on behalf of financial institutions. He will be a tremendous resource to Stroock and our clients, who will once again benefit from his experience." With over 30 years of bankruptcy law experience, Mr. DeNatale has served as counsel to a wide range of clients, including institutional lenders, unsecured creditors' committees, individual creditors (both secured and unsecured) and debtors. Mr. DeNatale advises on a variety of matters, including major Chapter 11 proceedings, multinational bankruptcy cases and the structure and restructuring of corporate and financial transactions to eliminate or reduce insolvency-related or lender liability risks. Mr. DeNatale's Chapter 11 representations include creditors' committees in a number of large bankruptcy cases throughout the United States, including Reliance Group Holdings, Inc., Fairfield Communities, Inc. and The Charter Company as well as major creditor interests in cases such as The SemGroup, First Magnus Financial Corporation, Delta, Northwest, United Airlines, US Air, Enron, Fleming and PG&E. Mr. DeNatale's participation in structuring and restructuring corporate and financial transactions includes counseling on lender liability, equitable subordination (a topic on which he has been quoted by the United States Supreme Court) and derivative transactions. Mr. DeNatale lectures frequently on bankruptcy law and has published extensively in journals including The Business Lawyer, American Bankruptcy Law Journal, The Secured Lender, Butterworths Journal of International Banking and Financial Law and the Journal of the Japanese Institute of Business Law and such treatises as the Collier Bankruptcy Manual, the Collier Bankruptcy Practice Guide and Bankruptcy Practice and Strategy. Stroock & Stroock & Lavan LLP -- http://www.stroock.com/-- is a law firm providing transactional and litigation guidance to leading multinational corporations, investment banks and venture capital firms in the U.S. and abroad. Stroock's emphasis on client service and innovation has made it one of the nation's leading law firms for 130 years. Stroock's practice areas include capital markets/securities, commercial finance, mergers and acquisitions and joint ventures, private equity, private funds, derivatives and commodities, employment law and benefits, energy and project finance, entertainment, environmental law, financial restructuring, financial services litigation, insurance, intellectual property, investment management, litigation, personal client services, real estate, structured finance and tax. * House Passes Legislation to Curb Bonuses ------------------------------------------ Greg Hitt and Aaron Lucchetti at The Wall Street Journal report that the House has passed legislation that would restrict bonuses this year, imposing a 90% surtax on workers who earn more than $250,000 at firms that get at least $5 billion from the government's financial rescue program. As reported by the Troubled Company Reporter on March 18, 2009, AIG planned to pay about $450 million in bonuses to workers at its financial products unit. The unit caused AIG massive losses and was mainly responsible for the Company's collapse in 2008. AIG's bonuses caused an outrage on Capitol Hill. Legislators received irate e-mails and phone calls, and security was beefed up at AIG as death threats and hate mail flooded employees' mailboxes. WSJ relates that the bonus tax would be retroactive to December 31, 2008, if the Senate approves it and signed it into law. WSJ says that these banks each received more than $5 billion from the government's Troubled Asset Relief Plan: -- Citigroup Inc., -- J.P. Morgan Chase & Co., -- Wells Fargo & Co., -- Bank of America Corp., -- Goldman Sachs Group Inc., -- Morgan Stanley, -- PNC Financial Services Group Inc., and -- US Bancorp. According to WSJ, the House bill also would be implemented on the Fannie Mae and Freddie Mac. WSJ relates that the Senate will also craft a bill that would tax a larger number of workers and companies. The bill, says the report, would impose a 70% surtax on most bonuses, with half paid by employees and half by firms. WSJ quoted Sen. Charles Grassley as saying, "Using bailout dollars for bonuses after companies have been run into the ground adds insult to injury against taxpayers." 13 TARP Fund Recipients Owe Unpaid Federal Taxes Meena Thiruvengadam at The Wall Street Journal reports that the Ways and Means Committee -- a U.S. House oversight committee -- said on Thursday that 13 of the 23 top recipients of government capital through the Troubled Asset Relief Program owe unpaid federal taxes. The firms owe a combined more than $220 million in unpaid federal taxes, WSJ relates, citing House Ways and Means Subcommittee on Oversight Chairperson John Lewis. According to WSJ, two of those companies owe more than $100 million each. WSJ states that Rep. Lewis alleged that the Treasury engaged in poor documentation practices by failing to ask firms to prove that they didn't owe federal taxes, a requirement for government aid. The report quoted Rep. Lewis as saying, "Treasury did not ask these banks and companies to turn over their tax records. Treasury relied on the signed statements when it agreed to invest billions of taxpayer dollars." According to WSJ, the Ways and Means Committee said that the unpaid tax debts include unpaid income taxes and unpaid employment taxes. WSJ notes that it is unclear whether the Internal Revenue Service has taken any steps to recover unpaid tax money from the TARP recipients, but two of the programs regulators were previously unaware of the debts' existence. WSJ quoted acting U.S. comptroller general Gene Dodaro, as saying, "IRS has the tools available to collect that money." About American International Based in New York, American International Group, Inc. (AIG), is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. During the third quarter of 2008, requirements to post collateral in connection with AIG Financial Products Corp.'s credit default swap portfolio and other AIGFP transactions and to fund returns of securities lending collateral placed stress on AIG's liquidity. AIG's stock price declined from $22.76 on September 8, 2008, to $4.76 on September 15, 2008. On that date, AIG's long-term debt ratings were downgraded by Standard & Poor's, a division of The McGraw-Hill Companies, Inc., Moody's Investors Service and Fitch Ratings, which triggered additional requirements for liquidity. These and other events severely limited AIG's access to debt and equity markets. On September 22, 2008, AIG entered into an $85 billion revolving credit agreement with the Federal Reserve Bank of New York and, pursuant to the Fed Credit Agreement, AIG agreed to issue 100,000 shares of Series C Perpetual, Convertible, Participating Preferred Stock to a trust for the benefit of the United States Treasury. At September 30, 2008, amounts owed under the facility created pursuant to the Fed Credit Agreement totaled $63 billion, including accrued fees and interest. Since September 30, AIG has borrowed additional amounts under the Fed Facility and has announced plans to sell assets and businesses to repay amounts owed in connection with the Fed Credit Agreement. In addition, subsequent to September 30, 2008, certain of AIG's domestic life insurance subsidiaries entered into an agreement with the NY Fed pursuant to which the NY Fed has borrowed, in return for cash collateral, investment grade fixed maturity securities from the insurance subsidiaries. On Nov. 10, 2008, the U.S. Treasury agreed to purchase, through its Troubled Asset Relief Program, $40 billion of newly issued AIG perpetual preferred shares and warrants to purchase a number of shares of common stock of AIG equal to 2% of the issued and outstanding shares as of the purchase date. All of the proceeds will be used to pay down a portion of the Federal Reserve Bank of New York credit facility. The perpetual preferred shares will carry a 10% coupon with cumulative dividends. AIG and the Fed also agreed to revise the existing FRBNY credit facility. The loan terms were extended from two to five years to give AIG time to complete its planned asset sales in an orderly manner. The equity interest that taxpayers will hold in AIG, coupled with the warrants, will total 79.9%. At September 30, 2008, AIG had $1.022 trillion in total consolidated assets and $950.9 billion in total debts. Shareholders' equity was $71.18 billion, including the addition of $23 billion of consideration received for preferred stock not yet issued. The Troubled Company Reporter reported on March 4, 2009, that Moody's Investors Service confirmed the A3 senior unsecured debt and Prime-1 short-term debt ratings of American International Group, Inc. AIG's subordinated debt rating has been downgraded to Ba2 from Baa1. The rating outlook for AIG is negative. This rating action follows AIG's announcement of net losses of $62 billion for the fourth quarter and $99 billion for the full year of 2008, along with a revised restructuring plan supported by the US Treasury and the Federal Reserve. This concludes a review for possible downgrade that was initiated on September 15, 2008. * Report Reveals Bailouts & Climate Change Burden Fed Superfund --------------------------------------------------------------- A new study by the Center for Health, Environment & Justice sheds light on the growing connections between global climate change, corporate bankruptcies and the crisis of the Federal Superfund toxic waste cleanup program. Superfund: In the Eye of the Storm reveals new threats from climate change-related hurricanes, tornadoes and flooding are damaging Superfund toxic waste sites and driving up costs, and the program's solvency threatens to buckle as more bankrupt companies try to unload their cleanup costs on Superfund. CHEJ and 40 groups in 23 states are delivering letters and pizzas to policymakers in support of President Obama and Congress's recent actions to replenish Superfund by restoring polluter pays fees. One of the fees, the Corporate Environmental Income Tax paid by companies with $2 million or more in profits, was only $12 on every $10,000 in profits -- the price of a large, cheese pizza. The report found extreme weather conditions have impacted Superfund sites, including Hurricanes Ike in 2008, Katrina and Rita in 2005. From 2004 through 2008 alone, 56 Superfund sites were impacted by hurricanes in the Gulf Coast region. Growing corporate bankruptcies further place Superfund at the eye of the economic storm as polluting companies, like ASARCO, are allowed to try and avoid the costs of re-mediating up to 94 sites by declaring bankruptcy, although a new court decision requires EPA to close this loophole. Superfund fees lapsed in 1995, bankrupting the trust fund in 2003, and taxpayers now fund $1.2 billion per year. "There is only one solution -- Congress must reinstate the polluter pays fees. The country cannot afford to continue bailing out polluters while the list of unfunded sites grows. The core principle of the Superfund program is that polluters, not taxpayers, should pay to clean up toxic sites," says CHEJ Executive Director Lois Gibbs. To view report, visit http://www.chej.org/ WHAT: National Media Conference Call with experts to discuss Superfund: In the Eye of the Storm, which finds the federal toxic site cleanup program is burdened by climate change-related hurricanes, tornadoes and floods damaging sites, and increased corporate bankruptcies. WHEN: 12 PM Noon (EDT), Thursday, March 19, 2009. WHERE: Call 1-877-233-4763. Access code is 55 36 535# WHO: Lois Gibbs, CHEJ Executive Director, Stephen Lester, Science Director and Anne Rabe, Campaign Coordinator. * Treasury Unveils $5 Billion Auto Supplier Support Program ----------------------------------------------------------- The U.S. Department of the Treasury has unveiled a new program to help stabilize the auto supply base and restore credit flows in a critical sector of the American economy. As the President's Task Force on the Auto Industry continues to review restructuring plans submitted by General Motors and Chrysler, Treasury announced an Auto Supplier Support Program that will provide up to $5 billion in financing, giving suppliers the confidence they need to continue shipping parts, pay their employees and continue their operations. As rising unemployment and contracting credit continue to threaten economic recovery, the program will support an industry employing more than 500,000 American workers across the country. Because of the credit crisis and the rapid decline in auto sales, many of the nation's auto parts suppliers are unable to access credit and are facing growing uncertainty about the prospects for their businesses and for the auto companies that rely on the parts they ship. This program will help break this cycle and provide confidence in the supplier base at an important time for the domestic auto industry. It is part of the Administration's broader efforts to ensure that the Financial Stability Plan reaches the main street businesses that create good jobs for American workers. "The Supplier Support Program will help stabilize a critical component of the American auto industry during the difficult period of restructuring the lies ahead," said Treasury Secretary Tim Geithner. "The program will provide supply companies with much needed access to liquidity to assist them in meeting payrolls and covering their expenses, while giving the domestic auto companies reliable access to the parts they need." A full fact sheet on the program is available at no charge at: http://researcharchives.com/t/s?3a71 Suppliers that ship parts to auto companies generally receive payment for those shipments about 45 to 60 days later. In a normal credit environment, suppliers can either sell or borrow against those commitments or receivables in the interim period to pay their workers and fund their ongoing operations. Due to the uncertainty about the ability of the auto companies to honor their obligations, banks are unwilling to extend credit to suppliers. The program will provide suppliers with access to government- backed protection that money owed to them for the products they ship will be paid no matter what happens to the recipient car company. Participating suppliers will also be able to sell their receivables into the program at a modest discount. This will provide suppliers with desperately needed funding to operate their businesses and help unlock credit more broadly in the supplier industry. The program will be run through American auto companies that agree to participate in the program. Suppliers to those companies that agree to maintain qualifying commercial terms will have the opportunity to request this government backed protection. If granted, the supplier will pay a small fee for the right to participate in the program. Any receivable created with respect to goods shipped after March 19, 2009, that is made on qualifying commercial terms between a supplier and a participating auto company will be eligible for the program. * BOOK REVIEW: Performance Evaluation of Hedge Funds ---------------------------------------------------- Edited by Greg N. Gregoriou, Fabrice Rouah, and Komlan Sedzro Publisher: Beard Books Hardcover: 203 pages Listprice: $59.95 Review by Henry Berry Hedge funds can be traced back to 1949 when Alfred Winslow Jones formed the first one to "hedge" his investments in the stock market by betting that some stocks would go up and others down. However, it has only been within the past decade that hedge funds have exploded in growth. The rise of global markets and the uncertainties that have arisen from the valuation of different currencies have given a boost to hedge funds. In 1998, there were approximately 3,500 hedge funds, managing capital of about $150 billion. By mid-2006, 9,000 hedge funds were managing $1.2 trillion in assets. Despite their growing prominence in the investment community, hedge funds are only vaguely understood by most people. Performance Evaluation of Hedge Funds addresses this shortcoming. The book describes the structure, workings, purpose, and goals of hedge funds. While hedge funds are loosely defined as "funds with no rules," the editors define these funds more usefully as "privately pooled investments, usually structured as a partnership between the fund managers and the investors." The authors then expand upon this definition by explaining what sorts of investments hedge funds are, the work of the managers, and the reasons investors join a hedge fund and what they are looking for in doing so. For example, hedge funds are characterized as an "important avenue for investors opting to diversify their traditional portfolios and better control risk" -- an apt characterization considering their tremendous growth over the last decade. The qualifications to join a hedge fund generally include a net worth in excess of $1 million; thus, funds are for high net-worth individuals and institutional investors such as foundations, life insurance companies, endowments, and investment banks. However, there are many individuals with net worths below $1 million that take part in hedge funds by pooling funds in financial entities that are then eligible for a hedge fund. This book discusses why hedge funds have become "notorious as speculating vehicles," in part because of highly publicized incidents, both pro and con. For example, George Soros made $1 billion in 1992 by betting against the British pound. Conversely, the hedge fund Long-Term Capital Management (LTCP) imploded in 1998, with losses totalling $4.6 billion. Nonetheless, these are the exceptions rather than the rule, and the editors offer statistics, studies, and other research showing that the "volatility of hedge funds is closer to that of bonds than mutual funds or equities." After clarifying what hedge funds are and are not, the book explains how to analyze hedge fund performance and select a successful hedge fund. It is here that the book has its greatest utility, and the text is supplemented with graphs, tables, and formulas. The analysis makes one thing clear: for some investors, hedge funds are an investment worth considering. Most have a demonstrable record of investment performance and the risk is low, contrary to common perception. Investors who have the necessary capital to invest in a hedge fund or readers who aspire to join that select club will want to absorb the research, information, analyses, commentary, and guidance of this unique book. Greg N. Gregoriou teaches at U. S. and Canadian universities and does research for large corporations. Fabrice Rouah also teaches at the university level and does financial research. Komlan Sedzro is a professor of finance at the University of Quebec and an advisor to the Montreal Derivatives Exchange. ********* 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 ***